India received global attention after the historic blackouts last month that put over 600 million people in the dark. Following the media aftershock thereafter, one thing was made abundantly clear: coal is existential for developing economies.
India and China are heavily dependent on thermal or non-coking coal for electricity generation. In India, for instance, 60% of electricity capacity is dependent on coal-fired generators. In China it’s as high as 80%. As a result, both countries have been characterized as drivers (and dampeners) of the global thermal coal market – and the demand is indeed robust. In the last fiscal year, India purchased $3.5 billion worth of thermal coal, importing up to 42 million tons from trade partners like Indonesia and South Africa. That number is expected to double this year.