Peabody sees Indian cloud over global coal

India is set to emerge as the world’s fastest growing coal importer, going by Peabody Energy, the world’s largest private sector coal miner, and Linde AG, one of the largest industrial gas producers in the world.

Blame it on flagging coal output growth and galloping power demand, which have resulted in widespread outages across the country. With hardly any new mine likely to be commissioned in the near future, India’s thermal coal demand is expected to outpace production to the extent of 150 million tonne in the next five years, the two players have predicted in recent reports.
India, which is expected to overtake the United States as the world’s second-largest coal consumer, will become the largest coal importer in 2020, they noted.

The development is likely to radically change the global demand-supply scenario of coal.

Peabody and Linde have reasons to keep a close watch on India’s energy dynamics.

Peabody was earlier in talks with Coal India for divesting one of its mines, a deal that didn’t fructify, adding to the series of failed attempts by India to secure overseas coal assets.

Linde AG, on the other hand, is the parent company of BOC India, which supplies, among other things, oxygen to steel plants and to other manufacturing industries, and specialised gases to solar energy producers.

“The international coal market is very sensitive to developments in China, which accounts for almost half of global production and demand, and increasingly also to India, which is expected to overtake the United States as the world’s second-largest coal consumer and to become the largest coal importer in 2020,” Fatih Birol, chief economist of International Energy Agency, said in an article carried in Linde’s annual report.

Though the dominance of coal and petroleum as the primary sources of global energy is set to decline, the age of fossil fuel is far from over, said Birol.