Coal India Said to Plan First Port Terminal to Boost Imports.

Coal India Ltd., the world’s largest producer, plans to invest in its first port terminal to handle imports to help meet increasing demand for the fuel, a company official said.

The company intends to build a terminal in a venture with Visakhapatnam Port Trust in southeast India by 2013 with a capacity to import as much as 6 million metric tons annually, the official said, asking not to be identified, citing company policy. Coal India also intends to form a joint venture with NTPC Ltd., Asia’s second-largest power utility by value, to buy the fuel from overseas, the official said.

Inadequate rail and port facilities may hamper coal imports as demand in India doubles to more than 1 billion tons by 2015, Wood Mackenzie Consultants Ltd. said on July 1. Coal is used to fire more than half of India’s current power generation capacity, according to the country’s electricity regulator.

Coal India Chairman Partha Bhattacharyya didn’t answer calls made to his mobile phone. Ajeya Kallam, chairman of Visakhapatnam Port Trust, could not be immediately reached by telephone at his office and didn’t respond to an e-mail seeking comment. NTPC Chairman R.S. Sharma wasn’t immediately available for comment.

The proposed venture with NTPC, India’s biggest electricity generator, is aimed at supplying coal from overseas to the utility’s plants, the official said.

NTPC Imports

NTPC plans to import 14 million tons of coal in the year ending March 2011, Sharma said on March 15. Coal India is expected to issue a tender next month for an order from the utility to import 4 million tons of coal by the end of December, the official said.

The state-owned coal producer is also looking to secure long-term agreements with foreign suppliers and invest in assets overseas, he said.

Coal India, which proposes to sell shares for the first time this year, is studying proposals by three companies, including two owned by Peabody Energy Corp. in the U.S. and Australia, Bhattacharyya said in April. The company may spend $1.7 billion to buy the stakes, he said.

Coal demand in India may rise by more than 500 million tons from 2008 to 2015 to exceed 1 billion tons, Wood Mackenzie said. India may bring in at least 50 million tons of coal from abroad in 2017 to bolster local production that’s projected to reach 647 million tons, Alok Perti, additional secretary to the coal ministry, said on July 7.

India’s annual coal output of 535 million tons will fall short of demand from power generators by as much as 80 million tons by next year, Perti said.

The International Monetary Fund revised India’s 2010 economic growth forecast to 9.4 percent from its earlier prediction of 8.8 percent in April.

Source : Business Week