India will be a global coal production bright spot with the country increasing global market share of output from 10.1 per cent in 2016 to 13.1 per cent by 2020.
In 2016, the country will surpass the United States to become the second largest coal producing country in the world, second only to China, despite remaining a net importer of the mineral, BMI Research said.
The government's desire to attain self-sufficiency in coal in order to improve domestic electricity provision will see state-owned Coal India (CIL) to remain the country's largest producer. The miner produced 536.5 million tonnes (MT) of coal in the fiscal ending March 31 2016, representing a growth of 8.6 per cent y-o-y, which is their highest annual tonnage increase since inception.
"Nevertheless, we believe the difficulties in land acquisitions and environmental clearances will remain key obstacles to CIL's expansion plans in India over the coming quarters," it said.
In March 2015, the Indian government passed the Coal Mines (Special Provisions) Bill, under which private as well as foreign mining companies are allowed to enter the domestic coal market, a previously state-monopolised sector, to sell and produce coal.
However, the government announced in June that auctions will be delayed for a few months due to a lack of takers.
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