India Running Short on Coal; Could Force the Country to Increase Imports
India is running dangerously low on coal and the country could be forced to increase imports so power plants can generate enough electricity.
State-owned Coal India Limited (CIL) has been asked to increase coal production at existing mine as production has been failing to meet targets and more imported coal has been required. India’s electricity shortage climbed to 7,000MW in May.
"We hope that a good amount of additional coal can be mined at least as an interim measure for a few years till we are able to sort out the problem which the sector has faced over the last five to six years," power minister Piyush Goyal said.
Although India already imports nearly 20 percent of its coal requirements, Goyal is requesting the company import more despite increased costs. India’s power plants are not running at optimum levels and more coal is required to help ramp up production.
India’s net coal-fired electricity generation is expected to grow by a total of 910 terawatt hours from 2010 to 2040, doubling its total in 2010. India’s coal consumption for electricity generation is expected to double.
According to professor John Rolfe of CQUniversity, Australia could be a viable option for coal supply.
He said the election of Narendra Modi as Prime Minister for India will help grow the country’s economy faster.
"The previous government were quite successful in the early stages at economic growth but over time that growth slowed and they ran into lots of problems trying to get major changes through the different states of India,” Wolfe said.
"Modi's a breath of fresh air, he's also got a much bigger mandate, so he'll have a lot more power to make major changes in the economy.”
The demand for coal in India is forecasted to reach 551.60 million mt in 2015 as supply of coal is predicted to amount to just 466.89 million mt.
Lithium producers bullish as EV revolution ramps demand
Rising demand for lithium is stoking prices for the electric vehicle battery metal, fueling long-delayed expansions that still may not produce adequate supplies that automakers need to meet aggressive production plans.
Growing industry optimism from higher lithium prices is a change from last year when funding for mines and processing plants dried up during the pandemic.
Albemarle Corp, Livent Corp and other producers are scrambling to make more lithium, but some analysts worry the recent price jump will not spur a big enough expansion to meet a planned wave of new EV models by mid-decade.
Since January, General Motors Co, Ford Motor Co LG Energy Solution and SK Innovation Co, along with other automakers and battery parts manufacturers, have said they will spend billions of dollars on EV plants.
U.S. President Joe Biden has proposed spending $174bn to boost EV sales and infrastructure. The European Union has similar plans, part of a rush to catch up with global EV leader China.
Those moves have helped an index of lithium prices jump 59 percent since April 2020, according to data from Benchmark Mineral Intelligence, a commodity pricing provider.
The rising demand “reflects what feels like a real and fundamental turning point in our industry,” said Paul Graves, chief executive of Livent Corp, which supplies Tesla Inc. On Monday, it said it would more than double its annual lithium production to 115,000 tonnes.
Graves warned, though, that “it will be a challenge for the lithium industry to produce sufficient qualified material in the near and medium term.”
Albemarle, the world’s largest lithium producer, aims to double its production capacity to 175,000 tonnes by the end of the year when two construction projects are complete. Albemarle's Q1 profit beat expectations thanks to rising lithium prices. Chile’s SQM, the No. 2 producer, said its goal to expand production of lithium carbonate by 71 percent to 120,000 tonnes should be complete by December.
Australia’s Orocobre is paying $1.4 billion for smaller rival Galaxy Resources, a strategy designed to boost scale and help it grow faster in regions closer to customers.
“The next few years are going to be critical in terms of whether there’s enough available lithium supply, and that’s why you’re starting to see commodity prices start to ramp,” said Chris Berry, an independent lithium industry consultant.
The price gains helped Albemarle and other major producers, including China’s Ganfeng Lithium Co and SQM, post big gains in first-quarter profit and boost forecasts for the year.
Even China’s Tianqi Lithium Corp, saddled with debt due to years of low lithium prices, signaled that recovering demand should help it swing to a profit this year.
Forecasts call for demand for the white metals to surge from about 320,000 tonnes annually last year to more than 1 million tonnes annually by 2025, when many automakers plan to launch new EV fleets, according to Benchmark.
Still, demand is expected to outstrip supply in 2025 by more than 200,000 tonnes, so lithium prices may need to rise to encourage producers to build more mines. That could boost the prices consumers pay for EVs. “Companies across the lithium-ion supply chain are in the best position they’ve been in for the last 5 years,” said Pedro Palandrani of the Global X Lithium & Battery Technology ETF , which has doubled in value in the past year.