Indian coal sector grows, but demand likely to outstrip gains

Coal production helped drive growth in India, one of the world's fastest growing economies, according to The Economic Times.

Overall, coal production grew 17.8 percent in February, only a year after actually contracting 5.8 percent.

But Reuters reports that this growth might not prove to be enough, as demand from coal-fired power plants continues to grow faster than domestic production.

Despite holding the fifth-largest coal deposits in the world and the third-largest production behind the U.S. and China, India imported 80 million tons of coal in 2011, primarily for coal-fired generation. This number could rise to 400 million tons by 2030, as limitations in infrastructure and difficulties in developing mines prevent the country from satisfying domestic demand.

"The problem is the entire process takes time, every approval - be it forest clearance, be it land acquisition, be it rehabilitation," Rajesh Jha, executive director of Jindal Steel and Power's Orissa plant, told Reuters.

One mining executive noted that, despite the incredible demand from coal-fired generators, the difficulties presented by the mining itself continue to keep companies from investing in the industry, limiting competition for state-run Coal India.

More information on coal mining in India can be found at PennEnergy's Research area.

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