New Delhi: The world’s biggest coal miner is likely to hold on to its crown for now even as competition increases in India, which opened its doors to foreign miners to boost output and curb surging imports. India will allow 100 per cent foreign direct investment in mining and sale of coal.
While that opens up the sector to private companies, both Indian and foreign, it will be a while before it reduces the dominance of monopoly producer Coal India Ltd. India’s coal demand is expected to rise with the addition of new thermal power plants and steel mills, making the nation a bright spot for coal miners in a world that is turning away from the dirty fuel.
Still, difficulties in getting regulatory clearances, delays in land acquisition and shortages of railway rakes to haul the commodity may be a deterrent for foreign miners.
The state miner has a competitive advantage over other companies as it gets the mines for free, while others will have to participate in auctions to get access, raising their costs.