India's annual coal demand rises 9.1% to nearly 1 bln tonnes - minister

NEW DELHI, June 24 (Reuters) - India’s annual coal demand rose 9.1% to 991.35 million tonnes during the year ended March 2019, India’s Coal Minister Pralhad Joshi told the country’s parliament on Monday.

Coal is among the top five commodities imported by India, one of biggest importers of the fuel despite having the world’s fifth largest reserves.

Consumption by India’s utilities, which accounted for three-fourths of the total demand, rose 6.6% to 760.66 million tonnes, Joshi said in a written response to a question in the upper house of the parliament.

Imports rose to 235.24 million tonnes in 2018-19 from 208.27 million tonnes in 2017-18, Joshi said, adding that domestic supplies rose to 734.23 million tonnes during the year ended March 2019.

India’s supply shortfall more than doubled to 23.35 million tonnes, mainly because of state-run Coal India’s inability to cater to demand from the cement and sponge iron industries.

Demand from the cement sector rose 70% to 37.22 million tonnes while coal demand from the sponge iron industry rose by over two-thirds to 41.33 million tonnes, Joshi said.

A ban on the use of petroleum coke, a dirtier alternative to coal, in some parts of the country, and Coal India’s focus on power sector ahead of the elections amid a promise to electrify all rural households in the country led to a rise in imports.

State-run Coal India is prioritising starting production at mines with a capacity of more than 10 million tonnes per year and improving mechanisation to increase output, Joshi said.

Coal India’s output rose 7% to 606.89 million tonnes in 2018-19, and is targeting a production of 660 million tonnes in 2019-20. (Reporting by Sudarshan Varadhan. Editing by Jane Merriman)