India plans tighter vigil on coal imports

Market: Coal
03/09/20

India is considering setting up a coal import monitoring system as it intensifies efforts to discourage consumers from buying seaborne cargoes.

The country's coal minister Pralhad Joshi discussed the modalities of setting up the system with his counterpart in the trade ministry Piyush Goyal yesterday. The system is aimed at reducing coal imports, the coal minister said.

A monitoring system for aluminium and copper imports will also be established, said Joshi, who is also India's mines minister. The proposed arrangement will help with "checking imports and providing stakeholders the necessary information at the click of a button", he said, without elaborating.

The country already has a similar system in place for the steel sector. The government introduced the steel import monitoring system in September 2019, mandating pre-registration of planned imports.

The coal import monitoring system may be based on the same model, a senior government official said. Importers could be mandated to submit advance and detailed information about seaborne cargoes to be purchased. "The aim is to first collect the data on imports, and that will likely be made public as well," the official said, adding that the plan is still in the early stages.

The proposed monitoring system could allow the government to keep an up-to-date record of import volumes, with details of specific grades. The coal import data is currently compiled with a lag of two to three months.

The information on imports could also help the government to fine-tune its policies to further discourage coal imports. The data may enable state-controlled coal producers, including Coal India (CIL), to reach out to the importer, in case the requirement can be matched from domestic sources.

In the coming years, such information could help private-sector miners — those that may secure coal blocks for commercial mining in the upcoming auction — to formulate production and sales strategies.

The plan is in line with India's strategy to support domestic coal sales. Delhi's efforts to discourage imports partly helped to reverse the declining trend in CIL's coal production and sales last month.

The arrival of seaborne cargoes in India fell in July, the fifth consecutive month of annual declines, suggesting that imports are set to contract in 2020 from a year ago.

By Saurabh Chaturvedi

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