Flooding at one of Coal India's largest open-pit mines will halt operation there for at least a month, a senior company official said last week, which is likely to push domestic utilities to seek for more overseas cargoes.
The flooding at Dipka mine, which produces more than 30 million tonnes a year of thermal coal and accounts for 5% of Coal India's overall output, could leave some power plants in eastern and central India scrambling for fuel.
Coal India declined to comment on the extent of the damage or the length of the likely production outage.
The outage would result in a slight increase in Indian import demand, traders said. "Some domestic utilities will issue tenders for seaborne cargoes in coming weeks," one said.
India has been looking to ease its dependence on overseas coal, which is within the top five import commodities by value.
Coal India said on October 1 that its output for the first half of the financial year ending September fell 6%, while September's output dropped 23.5% to the lowest in months.
The state-owned miner aimed to produce 660 million tonnes of coal during the financial year ending March 2020, which would be 8.7% higher than 606.9 million tonnes in FY2018-19.
Monsoon rains this year were 10% more than average in previous years, the highest in 25 years, and seasonal rains have continued longer than expected.
India gets about 2/3 of imported thermal coal from Indonesian. South Africa and the US are also its key suppliers.
(Writing by Alex Guo Editing by Tammy Yang)
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