India’s ports to benefit from Colombian coal

India’s ports stand to gain from yet another coal stream as Colombian coal joins the imports from Indonesia.

According to Commodore Research, the Adani Group has recently begun purchasing small amounts of Colombian thermal coal on the spot market and is reportedly in talks to import Colombian coal on a long-term contract.

Mundra port – which is actually owned by Adani, India's largest coal trader - will be first in line to benefit, as at present Mundra is one of the few ports able to berth capesize vessels. However, there are a number of expansion or new port projects under way. Adani is also developing Dahej which will give it a capacity of 25m tonnes of bulk cargo annually.

Hazira port, also in Gujarat (in which Adani has likewise captured berths), is being expanded to take 50m tonnes a year, while there are plans for Krishnapatnam, and Gangavaram in eastern Andhra Pradesh, plus a whole host of lesser developments on both sides of India.

As well as expanding Mudra upward of 100m tonnes per annum – around 30m tonnes of which will be coal largely destined for power plants set up by Adani and Tatas - Adani has plans for a complementary new facility on the east coast, Adani-Kalinga Port.

The group has said the port could be developed in two phases near Paradip in Jagatsinghpur district, barely three kilometres from Jatadhari Muhan, where Posco India plans to set up its own captive port. If all goes well, 12 of the 16 berths should be up and running by 2015-16.

Indian thermal coal imports are expected to grow by as much as 25% this year and importers are looking to diversify their sources. India is one of the world's fastest-growing coal importers, and higher demand from the power sector may well push total (thermal and coke) coal imports to up to 100m tonnes in this financial year from about 80m last year.

The research group adds that the emergence of Colombian coal exports to China and now India is a positive development in the dry bulk market and will support freight rates due to the long-haul nature of these shipments.

(Source: Port Strategy)