India faces serious coal shortage

Domestic coal production will fall short of demand by 142 million metric tons in the year starting 1 April, exceeding a previous estimate. 

Coal demand in the next financial year is expected to be 696 million metric tons compared with domestic output of 554 million tons, coal minister Jaiswal told reporters in New Delhi. The shortfall in the 2010-2011 annual plan was estimated at 83.33 million tons, according to the document posted on the ministry's website. 

Environmental restrictions and delayed approvals may curb production by state-owned Coal India Ltd, the world's biggest producer of the fuel. Coal is used to fire more than half of India's power generation capacity, which needs to increase 18 per cent to 200,000 mw from current levels by March 2012 to sustain economic growth of 8 per cent. 

Coal India's output in the financial year ending 31 March may be 435 million tons, less than the target of 460.5 million tons, N C Jha, director in charge of policy decisions on technical matters, said recently. 

India boosted coal purchases from South Africa in December by about 54 per cent from a year earlier as demand for the fuel rose and floods in Australia disrupted supplies.