January 6, 2022 11:14 AM
Adani Enterprises Ltd. has won a contract to supply overseas coal to India’s top electricity generator as the nation aims to avoid a repeat of last year’s energy crisis, according to people familiar with the matter.
Adani, India’s largest trader of imported thermal coal, will deliver 1 million tons to state-run NTPC Ltd., which in October issued its first tender for coal imports in more than two years, the people said, requesting anonymity as the details are still private.
Kolkata-based Damodar Valley Corp. Ltd., also state-owned, is examining a proposal from Adani for the supply of the same volume to its power plants, the people said. Adani, NTPC and DVC didn’t respond to requests seeking comment.
Indian power producers are under pressure to bolster coal stockpiles after supply disruptions and rising demand left the country grappling with shortages in the second half of 2021, leading to outages in some provinces and curbs on energy-hungry industries.
The decision to purchase coal from overseas comes despite the government’s commitment to reduce reliance on fuel imports. Coal accounts for about 70% of India’s electricity generation, and consumption is forecast to rise in the next few years, even as Prime Minister Narendra Modi makes a huge push to add renewables.
Adani last month began shipping the first export cargo from its controversial Carmichael coal mine in Australia. The shipment is headed to India, one of the people said, without giving details of buyers.
Benchmark seaborne coal prices hit a record in October though have since pared those gains, helping to boost the case for imports.