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Coal Shortage in India is a major concern of the government. Even industries are also facing issues on their productions. As coal is an important mineral for the production of heat and electricity.
Mismanagement and unprecedented demand are the results of the coal shortage in India. Now there are some states severely suffering from a lack of coal.
In some of India’s states, governments had already given the guidelines to use electricity efficiently. Coal shortage results in power cuts in some of the major cities of India.
Not is just India, Coal shortage is the major problem existing rest of the world.
Reasons for Coal Shortage in India
Due to the corona pandemic, there was a national wide lockdown in the country. All the industries were declining in their production steeply. Even the imports of coal were also reduced to a certain extent.
Imports of Coal have fallen nearly 44% during August and September of 2021. So, after the post lockdown, demand had ramped up exponentially. But the requirement for coal had also raised suddenly. As a result, there is a shortage of coal in the country.
Still, India depends on over 70% of coal for the production of electricity. After the declination of the second wave of the pandemic, there is a surge in electricity consumption.
As the industries started working rigorously and transportation is also recovering at a quick pace. So, there is the demand for coal has taken raise.
As 44% of the coal, is utilized for the industries usage. But there is 13% more demand for coal.
For all the activities, electricity plays a major role in its functions. So, the government has to take certain measures to solve the coal shortage problem in India.
Coal demand is not only in India but it is in the rest of the world. Due to the pandemic, all the production activities were at in halt. But as of now, there is a huge demand for coal in the international market.
As India is the third-largest importer of Coal, so it relies on the supplies of the international markets. But now due to sudden demand, there is a rise in the price of coal. Now for one ton of coals, the price hiked over 18,000 rupees.
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No coal Stocks
At any time, stocks of coal in the industries should be persisted for long period. But now many industries are having coals stocks of about less than 8 days.
This is one of the major results of the Coal shortage in India. So, there might be blackouts across many major Indian cities.
Even climate was one of the factors for the coal shortage in India. Due to heavy rain, coal mining places were shut down their operation.
Besides, there were landslides, near the coal mining places which made the matter worse. Subsequently, the erratic nature of rainfall in India made it difficult to mine coal.
Even rain was a hindrance to transportation as well. This made the shortage of coal severe within the country.
Reasons for the High price of coal
There was high demand for coal for the past 2 to 3 months. So, it’s simple logic, if there is a huge demand for any product with less supply then the price goes up gradually.
In August and September, there was nearly 17% more demand for coal in India. But the government had not taken any steps to ramp up the production of coal. Even the government does not plan to increase the supply of coal exports.
Now, in India there are 135 coal power plants had only 8 days of stocks left.
In Europe, there is an unprecedented severe winter existing at present. As a result, due to severe temperature drops, people need more heat to survive. There is a huge demand for natural gas but it won’t meet all the needs.
So, Europe is facing issues in the supply of coal for the present need. Even United Kingdom is also facing the same issues and they also quickly need the supply of coal.
Even India is the largest importer of coal, it imports coal from Indonesia and Australia of 43% and 26% respectively. So, India has imported coal from the International market. But due to the high price of coal and lack of funds in the government, India is facing a shortage of coal severely.
China and Australia relationship
Australia is the largest exporter of coal in the world. In fact, China is the highly populated country in the world. So, to reach the demand China was highly relying on the supply of coal from Australia.
In fact, 50% of the factories in china totally rely on the supply of coal from Australia. But after the coronavirus pandemic breakdown, everyone was speculating that China was the source.
Even Australia was urging WHO to investigate China in this matter. So, China was not happy with the behavior of Australia. As a result, China ends its imports from Australia.
At the same time, due to heavy rainfall in China, nearly 60 coal mines had the worst hit from the floods. So, china once again becomes vulnerable in producing coal.
Consequently, China world highly populated country is also facing a shortage of coal.
Once Australia end the contract with China, then it was facing losses due to a lack of importers. So, Australia was in search of an importer, then it made a healthy relationship with India and become their exporter.
As India is the second-largest populated country in the world, so it needs enough coal to meet the demand. But now there is a sudden surge in the prices of coal in Australia.
As a result, India went on to cut down the supply to a certain extent. Earlier, India was highly relying on Australia for the coal supply.
So, this is the main reason for the present coal shortage in India.
Effects of coal shortage in India
Due to a shortage of coal, many states are facing issues in the supply of electricity.
- Maharastra government has given guidelines to use electricity efficiently. Due to the shutdown of 13 thermal power plants.
- Even Punjab is facing power cuts of about 6 hours every day.
- In Rajasthan, power cuts duration is nearly 4 hours in rural and 2 hours in urban areas.
Major states in India producing coal, such as Jharkhand, Odisha, and West Bengal are suffering severely from the floods. In this way, there is a severe coal shortage in India.