Indian state owned coal giant Coal India Limited is looking at an opportunity, presented by surging Indonesian thermal coal prices, to replace imported thermal coal with the domestic variety going by the government’s mandate of 100 million tonne of import substitution. CIL has already communicated with 300 importers seeking their requirement from domestic sources. Indonesian coal prices are bound to move up further from December onwards as there are increased demand from China, Japan and South Korea. Besides the sky rocketing ocean freights might put importers at a disadvantage, which is where CIL is trying to capitalise.
Indonesian coal prices at USD 67.09 per tonne in March this year slumped to its lowest at USD 49.42 per tonne in September 2020. Indonesian government has set the November average free on board coal prices at USD 55.71 per tonne, up 9.2% from October’s FOB value
India had imported 248 million tonne of coal in 2019-20, resulting in an outflow of around INR 1 lakh crore of foreign exchange.