Shortage-hit India exporting coal to China and Japan

Sudheer Pal Singh / New Delhi Jul 06, 2012,
Business Standard
The country is facing a power shortage due to a lack of fuel but the government has been allowing export of coal. Domestic availability of the fuel having gone from bad to worse has not been a deterrent. According to the latest official estimate, more than 20 million tonnes (mt), worth about Rs 4,000 crore, has been shipped out over the past decade.

Indian coal exports jumped 50 per cent in 2009-10 and 83 per cent in 2010-11. Countries such as China and Japan are among the major importers, according to provisional coal statistics (2010-11) published by the Coal Controller’s Organisation (CCO), under the coal ministry.

Companies producing energy resources like crude oil and natural gas are not permitted to export them but there seems to be no policy barring coal exports. While the quantum of annual coal exports has not been huge, the sudden spurt in exports post 2008-09 and the fact that the commodity is being shipped out at a time when the country is grappling with an unprecedented availability crisis has left sector experts shocked.

“While a small quantity of coal is exported from Meghalaya to neighbouring countries like Bangladesh, it is definitely surprising that India has exported coal to China. Something does not seem to be right about this statistic,” said Amrit Pandurangi, a noted infrastructure expert and a senior director at accounting and consultancy firm Deloitte Touche Tohmatsu India.

Another surprised expert said these exports defied economic logic, too. “Long-distance transport for export of Indian coal, which is characterised by a high ash content of up to 45 per cent, does not make economic sense. So, it is unlikely that any organised traders are involved in this,” said Kameswara Rao, executive director at consultancy firm PricewaterhouseCoopers.

Data show coal was exported from India in 2010-11 through as many as 14 ports, including Panaji in Goa which alone accounted for more than half of the 4.4-mt exports in that year. Other coal-exporting ports listed in the data include Borsorah and Dawki in Meghalaya and Panitanki in West Bengal.

Business Standard talked to at least four top government officials on the matter. While all of them agreed that a small quantity of coal, typically less than a million tonnes, was exported to neighbouring countries like Bangladesh, none of them knew coal had been exported to China or Japan or that the quantum of exports touched 4.4 mt in 2010-11.

“A few lakh tonnes has been exported to Bangladesh under a bilateral treaty. Most of these exports occur through Meghalaya. The central government has no control over the usage of mineral reserves in Meghalaya and Nagaland, where the coal is highly rich in quality, as these states enjoy a special dispensation under the Constitution,” said one of the officials.

Another official said India’s state-owned Coal India Ltd (CIL) was not exporting any coal at all. A third official, however, said CIL had indeed exported a very small quantity of the mineral. “But coal having been exported to China is news to me,” he said.

When contacted, a senior CCO official refused to comment, saying the coal export data was sourced from the Directorate General of Commercial Intelligence & Statistics, under the commerce ministry.

Meanwhile, India’s total import of coal jumped from 20 mt in 2002-03 to 90 mt in 2011-12.