Calcutta — Coal production continues to increase in India and the country is likely to surpass the US as the world's second largest coal producer this year, according to KPMG partner Niladri Bhattacharjee.

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The country is projected to produce roughly 815 million mt in fiscal year 2019-2020, up from 730 million mt in FY 2018-2019, Bhattacharjee said Tuesday at the mJunction Indian Coal Markets conference in Calcutta.

India's fiscal year runs from April 1 to March 31.

US coal production is projected to total 674 million st (611 million mt) in 2019, down from 755 million st in 2018, according to the US Energy Information Administration.

As India's economy grows, Indian power demand continues to rise, driving the increase in coal production.

The country has an average kWh/capita rate of 1,149 compared with 4,280 kWh/capita in China and 12,830 kWh/capita in the US, according to a presentation by S Chandrasekhar, the director of operations for Singareni Collieries, one of two government-backed miners in India.

Singareni, also known as SCCL, is projected to produce 67 million mt in FY 19-20, while Coal India, the other government-backed miner, is projected to produce 660 million mt. Commercial mines are projected to produce 83 million mt.

The government has set a production target of 1 billion mt by fiscal year 2024-2025, of which Coal India is projected to produce 880 million mt.

Coal-fired power accounts for 55% of India's generation, but there is not enough domestically-produced coal to meet demand, said several speakers.

Indian coal imports totaled 173 million mt in 2018, and are projected to increase to 193 million mt in 2019, according to S&P Global Platts Analytics. In 2020, Indian coal imports are projected to total 213 million mt, surpassing China as the world's largest importer.

The majority of India's thermal coal imports come from Indonesia and South Africa.

Imports are also used to increase the calorific value of India's domestic thermal coal, which averages roughly 3,500 kcal/kg.

India remains the main export market for the US, which exported 10.4 million mt of thermal coal to India in 2018 along with 5.1 million mt of metallurgical coal and 3.1 million mt of fuel-grade petcoke.

Most of the US thermal coal and petcoke exported to India is consumed by the country's brick and cement industries.

-- Andrew Moore, andrew.moore@spglobal.com

-- Edited by Alisdair Bowles, alisdair.bowles@spglobal.com