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India’s Coal Crisis Worsens As Top Coal Miner Halts Supply To Industrial Users

The largest coal miner in the world, Coal India, has temporarily suspended supply to several industrial consumers in India as it prioritizes shipments to the coal power plants which provide most of the electricity in the country, the company told Bloomberg in a text message on Thursday.

India, like other countries in Asia, faces a severe coal supply shortage, threatening power outages and industry slowdown, amid rallying global prices of coal and natural gas.

“This is only a temporary prioritization,” according to Coal India’s text message to Bloomberg.

“Once the situation stabilizes, expected within a short time, and stocks at coal-fired plants attain a comfort level, other sectors will be brought back to their regular supply norm,” the world’s top coal miner said.

The current coal shortage in India, which has an average of just three days worth of coal in stockpiles, could last for up to six months, Power Minister R.K. Singh said last week.

“I can’t say I am secure… If you have 40,000-50,000 MW (of thermal capacity) with less than three days of stock, you can’t be secure,” Singh told The Indian Express in an interview last week. 

India’s massive coal fleet is running out of coal, threatening a power crunch in the country that relies on the dirtiest fossil fuel for most of its electricity generation. Coal is the major power generating fuel in India, accounting for 70 percent of electricity generation.

Coal inventories at many of the 135 coal-fired power plants are at critically low levels, while India scrambles to get more coal supply amid a global crunch of energy supply and skyrocketing prices of coal and natural gas.

As of this week, India’s thermal power plants have an average of four days of coal stockpiles compared to a recommended level of between 15 and 30 days, The Indian Express reported on Thursday, citing a situation review of the coal and power ministries. Several states in India, including Delhi, Punjab, and Rajasthan, have warned of potential blackouts due to the coal supply shortage.

By Tsvetana Paraskova for Oilprice.com

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