CEE Jan-Mar 2012

coal demand was met through international trade, more than half of global coal demand during the outlook period was projected to arise from China. "What happens in China over the medium term may impact the prices for electricity that consumers everywhere will have to pay," Van der Hoeven cautioned. Courtesy: London Commodity News, December 15, 2011, London COAL IMPORTS MAY JUMP TO 114 MT IN 2011 -12 India could import about 114 million tonnes (mt) of coal in 2011 - 12, up by over a third from the previous year, mainly from Indonesia and South Africa, to help prevent power stations and factories in Asia's third– largest economy from slowing. Coal Minister Sriprakash Jaiswal said India's coal demand was seen at 696 mt in 2011 - 12 , against an expected local output of 554 mt. State-run Coal India, the world's largest coal miner, has stocks of about 28 mt, reducing the overall shortfall. "However, stock liquidation is subject to availability of (rail wagons). Measures proposed to step up production are subject to different statutory approvals and availability of land," Jaiswal said recently. India is home to 10 per cent of the world's reserves, trailing only the United States, Russia and China , but a shortfall from local supplies has grown rapi dl y with an increase in coal-fired power plants and steel makers. Domestic output has been crimped by hurdles over environmental clearances and land acquisition, as well as low investment, forcing sharp down– ward revisions of output targets that could drag on India's nine per cent growth plans. India bought about 82 mt of coal in 2010-11 , government data, which is often slow to compile, showed. The Indian coal industry puts that figure at about 102 mt, including some 70 mt of the thermal variety. It was not clear how much of 2011-12 imports could consist of the costlier coking coal. "The gap in demand and supply from domestic sources would exceed 200 mt," by 2017, at the end of a five-year plan period , Jaiswal said. "We are aware that coal is the main-stay of India's energy needs and our dependence on the same is likely to continue for quite some time. " Mr. Jaiswal said a concerted effort to remove regulatory hurdles could help boost India's coal output by 78 per cent in 2011- 2012, though the country would remain a major importer. Courtesy: Total Energy, Nov.- Dec. 2011, P25. WORLD COAL PRICES SET TO RISE IN NEXT 5 YRS: lEA China's huge reliance on coal could drive world coal prices higher in the next five years, according to an lEA report released yesterday. But domestic coal prices will fal. next year, experts said. The lEA (International Energy Agency) report said the surging need for energy in emerging economies China in particular, would increase coal demand over the next five years, with strong impli cations for world prices. The size of China's domestic coal market is more than triple that of global coal trade volume, the report said. China also supplies more than half of the coal in international trade. "The lEA estimates average coal demand will grow by 600,000 tons a day over the next five years," Maria van der Hoeven, executive director of the lEA, said during the launch of the report. "What happens in China over the medium term may impact the prices for electricity that consumers everywhere will have to pay." "The international coal price may rise, but domestically the coal price will be lower due to the government's policy of limiting coal prices next year," Lin Boqiang said. Li Chaolin, coal analyst at Beijing-based Anbound Consulting, agreed that China's coal :')rice would fall next year. "The government's price limiting policy on coal is one factor," Li told the Global Times yesterday. "Another is the slowdown in China's economy, which means less energy will be needed. Currently, the domestic coal supply is slightly more than the demand," he said. "The international coal price is not only affected by demand and supply. The Chinese government is trying hard to ease the reliance on coal. And by 2016, China will have a huge change in its energy consumption . The proportion of natural gas and clean energy will grow," Tang Dechao, director of the Shanghai Pacific Energy Center, told the Global Times . "China will soon launch a carbon tax, maybe in 2013. But I believe the tax won't be too heavy, as the major energy source in China is still coal," Lin noted. "The carbon tax will be good news for new energies. But the drop in coal prices will be bad news for them, as new energies involve higher costs than coal," said Li Chaolin. Wu Yin, deputy director of the State Energy 36