India may export 30 mil mt/year of coal to Bangladesh, Sri Lanka by 2030

India can export around 30 million mt/year of coal to Bangladesh and Sri Lanka by 2030 from the mines located in the eastern part of the country, according to the draft version of the "Integrated Coal Logistics Plan" recently issued by the federal coal ministry for stakeholder consultations.

"All efforts are on to further enhance production and export of thermal coal by the year 2025-26," coal minister Pralhad Joshi said recently.

India currently exports around 1 million-2 million mt of coal every year to its neighboring nations of Bangladesh and Nepal with no exports to Sri Lanka.

According to the document, reviewed by S&P Global Commodity Insights, coal with a 2,950- 3,850 kcal/kg GAR calorific value is well placed to replace Indonesian coal in the Bangladesh market and "create a long-term sustainable export-oriented coal market" for Indian producers.

An analysis in the document found that the price of this coal on a CFR Bangladesh basis would be between Rupees 2,534-2,976/mt ($30-$36/mt).

The average price at which Bangladesh imported 5,000 kcal/kg GAR coal in the first five months of 2023 was $106.62/mt, Platts data from S&P Global showed. Platts assessed 5,000 kcal/kg GAR thermal coal at $97.95/mt May 26, on a CFR Bangladesh basis.

According to the report, annual thermal coal demand for power generation in import-dependent Bangladesh is forecast to rise from the present 2.3 million mt to 21 million-25 million mt by 2025 to fuel the upcoming coal-based capacities.

According to data from S&P Global Commodities at Sea, Bangladesh imported 7.5 million mt of coal in 2022, of which 6.6 million mt came from Indonesia.

The Indian coal logistics plan also makes a case for exporting around 4 million mt of coal to Sri Lanka, replacing the current volumes from South Africa, to fuel the 900-MW Lakvijaya power project in the island nation.

The price of 2,950-3,850 kcal/kg GAR Indian coal on a CFR Sri Lanka basis was seen between Rupees 3,088-3,530/mt ($37.40-$42.75/mt), compared to the current CFR Sri Lanka price of $172.09/mt for 5,100 kcal/kg GAR coal coming from South Africa, according to the report.

The grades of coal earmarked for exports currently comprise around 35% of India's current coal output.

The report also stated that as much as 80 million-90 million mt of domestic coal can be transported within the country using the sea route by financial year 2029-30 (April-March).

S&P Global reported earlier that the Indian government is exploring the possibility of domestic coal transportation via the sea route from Paradip port on the east coast to other ports on the Indian west coast to ease the logistical constraints of coal transportation within the country.

India recently revised its thermal coal requirements for power generation utilities for financial year 2029-30 to 1.02 billion mt from its earlier forecast of 892 million mt, according to the latest government report published by Central Electricity Authority. India is expected to produce around 1.5 billion mt of coal in financial year 2029-30.

The integrated coal logistics plan sees India's coal imports drop to 191 million mt by FY 2029-30. The projections assume that state-run Coal India Ltd. will supply 1.12 billion mt of coal in FY 2029-30, while captive and commercial mines increase their output to 281 million mt.

India's coal imports in FY 2022-23 increased 14% on the year to 238 million mt, government data showed.