Column: India coal output will gain, but not to heroic forecasts – by Clyde Russell (Reuters India – March 9, 2015)

http://in.reuters.com/

NEW DELHI – (Reuters) – It’s easy to dismiss the government’s assertion that the country will be able to more than double coal production in the next five years. But that doesn’t answer the question of how close they will get.

India will produce 1.5 billion tonnes of coal by the end of this decade, Coal Secretary Anil Swarup told the Coaltrans India conference this week in New Delhi.

Swarup, the top coal bureaucrat, presented these numbers in a relaxed and confident manner, a stark contrast to previous government presentations at Coaltrans events, which have generally been cautious and fraught with defensive justifications of past disappointments.

He still has the problem that nobody believes that state-controlled behemoth Coal India (COAL.NS) will be able to double its output to 1 billion tonnes per annum within five years.

There is perhaps some more confidence that private miners will be able to ramp up their production to 500 million tonnes, but that comes with the caveat that the laborious process for mining approvals is streamlined.

Then there is the challenge of moving all this additional coal output, another area where India has consistently disappointed expectations, given delays to planned rail corridors and the ongoing problem of having to obtain multiple approvals from a raft of central and state government agencies.

Finally, it has to be asked where the money is coming from. Doubling coal output and putting in place the associated transport infrastructure is an exercise that will be counted in tens of billions of dollars.

What these issues show is the scale of the challenge facing the new government of Prime Minister Narendra Modi, which has responded by changing the tone of the debate from why things haven’t worked in the past to what can be done to make it happen.

This new level of confidence made the Coaltrans India unique among coal conferences in recent years.

It was the first such event boasting what could be called a mood of optimism, as opposed to the doom and gloom that has been pervasive at prior events, as coal miners struggled with the 60-percent fall in prices since the post-2008 recession peak in early 2011.

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