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BHP & Anglo American Could Boost FDI in Coal Mining in India - Platts

Coal News - Published on Tue, 01 Oct 2019

Image Source: energy.economictimes.indiatimes.com
Platts reported that India's move to open its coal sector could attract global mining majors and help boost domestic output, with analysts believing peak demand is still years away in a country where coal contributes more than half the energy needs. However, some concerns around coal quality and regulatory hurdles remain. New Delhi's decision to allow 100 percent foreign direct investment in coal mining will not only help bring more competition in a sector dominated by the government for decades, it could potentially save billions of dollars in foreign exchange outflows amid the country's dependence on imports. Although, the move has come as a surprise to some analysts because India is aiming to move towards a gas-based economy, some said the country can't afford to reduce its dependence on coal sharply, given plentiful availability of the energy resource at home.

Mr Pradeep Mittal, executive vice chairman and CEO of Essar Power said that "The government's decision to allow 100% FDI in coal mining will attract global miners like BHP and Anglo American. This will result in FDI inflows along with updated technology and increase India's coal production."

However, India has been looking to move away from coal imports and boost domestic production to 1 billion mt by 2024-2025. The government had initially aimed to produce that amount as early as 2020, but a shortage of railway rakes and a lack of other infrastructure affected those plans.

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Posted By : Rabi Wangkhem on Tue, 01 Oct 2019
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