Coal India Plans to Bulk Export Output to Bangladesh, Sri Lanka, Bhutan

Coal India Ltd, the world’s largest coal miner, is planning to export its product to neighbouring countries, after decades of exclusively supplying domestic customers. Coal export to Bangladesh, Bhutan and Sri Lanka is being explored. This is a part of as part of India’s “neighbourhood first” policy, which aims to counter China’s expanding economic influence in South Asia.

Under the proposed plan, 3% of Coal India’s production will be kept aside to be exported. This will have two distinct advantages – diversify and expand Coal India’s revenue streams, and help the government strengthen ties with important neighbouring countries.

However, this plan will not be put into action till the end of 2022, as India is currently suffering a coal shortage crisis. Further, international coal prices have risen sharply as a result of an unexpected temporary export restriction by top exporter Indonesia, and also large purchases by European customers fearful that a Russian invasion of Ukraine could cut off gas supplies to Europe.

Though domestic coal supplies have recently increased, over half of India’s fully operating utilities have inventories that are less than 25% of federally mandated levels.

Coal India, which produces 80% of India’s coal, aims to increase production to one billion tonnes by 2024. Coal India has previously exported small quantities to neighbouring countries on an ad-hoc basis, but never exported in commercial bulk.