India asks "captive" coal mines to increase output as power demand rises

A labourer works inside a coal yard on the outskirts of Ahmedabad, India, April 6, 2017. REUTERS/Amit Dave/File Photo

CHENNAI, Sept 6 (Reuters) - India has asked owners of coal mines that produce solely for their own use, known as "captive" mines, to increase output within a week as the government tries to address a shortage of coal at power stations amid rising electricity demand.

Industrial companies which own "captive" mines have been given a week to ramp up production to above 85% of existing targets, the federal power ministry said in a statement on Monday. It also gave utilities companies that buy power from plants run on imported coal two weeks to increase procurement.

Data from the Central Electricity Authority showed nearly two thirds of India's 135 coal-fired power plants had less than a week's supply of coal left, including 43 with fewer than three days left. Four plants had no coal as of Sunday.

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India is the world's second-largest importer of coal despite having the fourth-largest reserves, and coal burning generates nearly three-quarters of the country's electricity demand.

Power demand has risen as economic activity picks up due to the easing of coronavirus-related restrictions.

The government's call for utilities to import coal to meet the shortage comes despite an overall policy to reduce import dependence. India mainly imports coal from Indonesia, Australia and South Africa.

India's Power Minister R.K. Singh also directed hydro power plants to defer maintenance shutdowns in September and October, and explore the possibility of operating more gas-fired power plants when power demand peaks.

Coal shortages occur periodically in India, with the last such shortage occurring in 2017. Production of coal typically slows during India's annual monsoon in June through September.

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Reporting by Sudarshan Varadhan Editing by Nick Tattersall

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