India is set to be the world’s largest consumer of coal - iMINCO Mining Training Information

India is set to be the world’s largest consumer of coal

India is coming for Queensland coal.

Australian coal mining is experiencing the levelling out of a commodities trading cycle. You might be persuaded into believing that it’s all over for Australian mining companies, especially the ones that have invested heavily in building new coal mines in Queensland and New South Wales.

When coal prices were high and demand was also driven by developing nations, there was plenty of fat on the bone. Wages were high, everyone seemed to be able to boast about how much they earned as a miner, and owners of rental properties rubbed their hands together as they collected thousands in rent for houses that they owned close to mine sites.

That did not seem so long ago right?

So what happened?

How come the coal industry is the target of the media because of sliding coal prices and increased overseas competition? Do stories of hardship and injustice sell newspapers? You bet they do. Yet despite what you see, read and hear in the news, for some of us, we like to keep a positive view of the coal industry wherever possible.

The reality is, many people have been forced to find alternative employment as things slow down, yet that is typical of any industry. Will coal demand once again soar and we will return to the glory days where mining was ‘top dog’?

There’s no real answer to that as there are many factors at play. With so much uncertainty in the world, one day can be normal and another day can be a 180 degree change because we never know when the next catalyst will ignite the next big thing in mining.

The domino effect is well known to all of us, and this can be created by the slightest movement far away from the domino pack, then they start to topple and you can’t stop it.

What we are seeing in the coal market is a stacking of dominoes in terms of what’s coming to Australia. For years iMINCO has been reporting on the coal market in Australia and when you start to put the pieces together (stack the dominoes), things start to line up.

For instance, take the Galilee Basin in Queensland. A vast open space of native Australian land that has been earmarked for one of the world’s biggest coal mines, the Adani Carmichael mine. Indian power and energy conglomerate Adani has been chipping away at the Queensland state and Australian federal governments to prepare the way for its Carmichael mine project.

Then there’s the case for Gina Rinehart and GVK, who also have their sights set firmly on Queensland’s coal-rich Galilee Basin, and who could forget Clive Palmer, whose China First coal project is simply primed to ignite at any time.

Two of the players in the Galilee Basin Adani and Hancock GVK will export the coal direct to India where it is needed the most. You see, India is going through a massive growth phase. Millions of Indians live in poverty without any electricity and the newly elected Prime Minister has pledged he will bring those millions out of poverty by providing electricity to make their lives easier.

So in effect, it’s ‘game on’ for India because politicians don’t like to be proved wrong, and if you know anything about Indian culture, there are many ways to ensure things get done!

What has spurred the editorial team at iMINCO on, is this new story that has emerged today about how India is set to overtake China as the largest consumer of coal. Given the poor coal quality in India, the lack of modern machinery, the vast distances between coal mines and power stations – the task ahead for their Prime Minister seems immense.

Add to that the regulations imposed on the Indian mining companies regarding the acceptable distance from mine to power station, and there are big problems in India – and for those who are switched on and have been regular readers of iMINCO Project News, Australian coal mining companies could be in for a new era of prosperity.

India needs more coal

It’s official, India is set to overtake China as the world`s largest importer of coal, as the country battles chronic power shortages, crippling its growth, while on the other side of the coin, India’s domestic natural gas supplies are being depleted quickly.

India, currently the world`s third-largest consumer of coal, behind China and Japan, has imported 43 per cent more coal than it did 12 months ago, as demand from power stations and steelmakers increases.

In the year ended March 2013,India imported 20 per cent of its coal requirements, and that number is expected to grow to 23% by 2017.

The demand for Indian power station coal is estimated to increase 43 per cent to 730 million tons by 2017.

What happens next?

The 64 million dollar question is, will Australian coal mining companies benefit from this latest news out of India? How can people take advantage of this news and think about preparing for a mining career?

For one thing, nothing stands in the way of progress and Indian has been silently creeping up on Queensland coal deposits, laying the dominoes along the way, and we’re all just waiting for the ‘Tipping Point’.

Don’t miss the ‘Tipping Point’, keep updated each week with iMINCO Project News. Packed full of the latest ‘good news’ about the mining and resource sector in Australia, Project News is all you need to build your knowledge.

When you have the knowledge, informed decisions about how to direct your career in the industry suddenly become clearer, where most people will just be late starters and miss the opportunity.

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