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Thursday, 06 August 09
NTPC LOOKS TO BYPASS STATE TRADING FIRMS ON COAL IMPORT
 A reduced coal import bill for NTPC could lead to lower power tariffs
Live mint.com reported that, India’s largest power generation utility, NTPC Ltd, may directly import the coal it needs, instead of asking state-owned trading firms such as MMTC Ltd and State Trading Corp. of India Ltd (STC) to import the fuel for it.
The move, which could affect revenue from coal imports at these trading firms, is a fallout of a controversy surrounding MMTC’s execution of an order to import a record 12.5 million tonnes (mt) of coal valued at Rs6,000 crore for NTPC. That order is now stuck.
One of the bidders for the tender, Knowledge Infrastructure Systems Pvt. Ltd (KISPL), has alleged foul play in the way this order was executed, and has demanded an investigation into the procurement process and an intervention by the Prime Minister’s Office.
NTPC could reduce its coal import bill through direct imports that do not involve paying a commission to the trader. This could mean proportionately lower power generation costs and, consequently, lower tariffs.
“We plan to operationalize this sourcing mechanism by the end of this year and we are in talks with overseas coal mining firms in Indonesia and Australia for the same,” said a top NTPC executive who did not want to be identified. “We are aware about the controversy surrounding our 12.5mt coal contract with MMTC over which questions have been raised from some quarters.”
NTPC has a coal import policy in place and can only import coal through state trading firms such as MMTC and STC. This policy will need to be changed should NTPC want to import coal directly.
In an email communication, KISPL’s spokesperson voiced two concerns about the controversial 12.5mt contract. The first is NTPC’s use of an intermediary because this will lead to a mark-up in the imported cost of coal. “Since fuel cost is a pass-through, this additional cost is passed on to citizens in the form of increased power tariff and, hence, the process should be discouraged,” wrote the spokesperson.
The second has to do with the conditions of the import tender which the spokesperson claims are “against Central Vigilance Commission (CVC) guidelines and standard public sector tenders.” “The tender neither provides level playing ground for all the bidders nor does it seem to promote competition, which is the main basis behind public tenders.”
CVC is a government entity that serves as a sort of conscience keeper for state-owned companies.
Other bidders for the 12.5mt contract are Adani Enterprises Ltd and two consortia, Agarwal Coal Corp. Pvt. Ltd and Kowa Co. Ltd of Japan; and Dubai-based Coal and Oil Group (C&O), Coastal Energy Pvt. Ltd and Seapol Pvt. Ltd.
“The controversy has been raised as there is a conflict between various competitors. There is a divergent view on the qualification criteria between CVC and NTPC. We are stuck there. We have communicated to NTPC that either you get these qualification criteria cleared by the CVC or we get an approval from our board,” said a senior MMTC executive who did not want to be identified.
The same MMTC official maintained that NTPC’s decision to bypass a trading firm will only have a minimal impact on its turnover. “We are not regularly importing coal for NTPC. The last time we imported coal for them was in 2005-06—2.1 mt. I will not say that it is a loss of business as it is an additional business we are looking for. It is NTPC’s prerogative whether they want to do it through a trading company such as ours or themselves,” he said.
MMTC posted a net profit of Rs1,654.42 core on a turnover of Rs36,904.62 crore in 2008-09. Of this, revenue of Rs2,724 crore came from the coal business. The firm imported 3.7mt of coal in the last fiscal for state utilities. Mint could not immediately ascertain the share of NTPC in the state trading firm’s coal import business in previous years.
The size of the market for imported coal that goes into power generation in India is around 20mt a year, and is expected to double by 2012 as more thermal power projects come up.
Coal is critical for NTPC as at least 80% of its installed capacity of 30,644MW is coal-based. However, a majority of its coal-based projects don’t have sufficient stock of coal. NTPC used 125 million tonnes per annum (mtpa) of domestic coal in 2008-09 and 6.41 mtpa of imported coal. Indian coal has a high-ash content, one reason why some domestic coal-based power plants mix it with higher quality coal that is imported.
An Adani Group spokesperson could not be reached for comment and questions mailed to his email address bounced back. Questions emailed to the firm remained unanswered.
A consultant said that intermediaries usually add to the cost unless they can aggregate demand and get better bargains in the international market. “That, however, may not be the case with some of the larger utilities in India,” said Dipesh Dipu, principal consultant, mining, at audit and consulting firm PricewaterhouseCoopers,
India has known coal reserves of 255 billion tonnes, the fourth largest in the world. Coal accounts for at least 50% of India’s commercial energy consumption and around 78% of domestic coal production is dedicated to power generation.
Source: Live Mint
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Friday, 07 August 09
BALTIC DRY INDEX HAS WORST WEEK SINCE OCTOBER AS DEMAND SLOWS
Bloomberg reported that, The Baltic Dry Index, a measure of shipping costs for commodities, had its worst week since October as Chinese demand for s ...
Friday, 07 August 09
COAL-PRICE FORECAST RAISED AT MERRILL ON CHINA, INDIA DEMAND
Bloomberg reported that, Bank of America Corp.’s Merrill Lynch & Co. unit increased its price forecast for Asian power-station coal becaus ...
Friday, 07 August 09
CHINESE DEMAND FOR FOREIGN COAL SOARS
Mining Weekly reported that, Chinese coal imports rocketed by 126,3%, year-on-year, in the first half of this year, the country’s customs auth ...
Thursday, 06 August 09
RICHARDS BAY COAL SHIPMENTS FELL 3% ON YEAR IN JULY
Bloomberg reported that, Richards Bay Coal Terminal, Africa’s largest coal-export facility, exported 3 percent less of the fuel in July than i ...
Thursday, 06 August 09
CHINA JULY COAL IMPORTS AT 9.5 MLN T, DEMAND FIRM
* Coal imports at key ports in July 2.8 times year-ago levels
* July coal imports down nearly 40 percent from June
* China still buying overseas c ...
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- Interocean Group of Companies - India
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- Chamber of Mines of South Africa
- Bahari Cakrawala Sebuku - Indonesia
- MS Steel International - UAE
- Toyota Tsusho Corporation, Japan
- Eastern Coal Council - USA
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- Ministry of Transport, Egypt
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- Bharathi Cement Corporation - India
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- CNBM International Corporation - China
- Wood Mackenzie - Singapore
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- Thai Mozambique Logistica
- Africa Commodities Group - South Africa
- SMG Consultants - Indonesia
- Agrawal Coal Company - India
- San Jose City I Power Corp, Philippines
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- Merrill Lynch Commodities Europe
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- Metalloyd Limited - United Kingdom
- Goldman Sachs - Singapore
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- New Zealand Coal & Carbon
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- Ambuja Cements Ltd - India
- Makarim & Taira - Indonesia
- Baramulti Group, Indonesia
- Port Waratah Coal Services - Australia
- PowerSource Philippines DevCo
- ICICI Bank Limited - India
- Attock Cement Pakistan Limited
- Economic Council, Georgia
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- White Energy Company Limited
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- Ministry of Mines - Canada
- Coal and Oil Company - UAE
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- Coalindo Energy - Indonesia
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- Thiess Contractors Indonesia
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement PLC, Thailand
- Kideco Jaya Agung - Indonesia
- Borneo Indobara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bayan Resources Tbk. - Indonesia
- Kobexindo Tractors - Indoneisa
- LBH Netherlands Bv - Netherlands
- Energy Link Ltd, New Zealand
- Australian Commodity Traders Exchange
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- Tata Chemicals Ltd - India
- Samtan Co., Ltd - South Korea
- Sinarmas Energy and Mining - Indonesia
- Standard Chartered Bank - UAE
- GN Power Mariveles Coal Plant, Philippines
- Mintek Dendrill Indonesia
- Medco Energi Mining Internasional
- IHS Mccloskey Coal Group - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Energy Development Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
- Eastern Energy - Thailand
- Sree Jayajothi Cements Limited - India
- Neyveli Lignite Corporation Ltd, - India
- India Bulls Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Billiton Holdings Pty Ltd - Australia
- Electricity Authority, New Zealand
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- Central Electricity Authority - India
- ASAPP Information Group - India
- Grasim Industreis Ltd - India
- Global Coal Blending Company Limited - Australia
- Kumho Petrochemical, South Korea
- SN Aboitiz Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- GVK Power & Infra Limited - India
- TeaM Sual Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Minerals Council of Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sojitz Corporation - Japan
- Deloitte Consulting - India
- Price Waterhouse Coopers - Russia
- Xindia Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Mercuria Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- TNB Fuel Sdn Bhd - Malaysia
- Salva Resources Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sical Logistics Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Australian Coal Association
- Ceylon Electricity Board - Sri Lanka
- Indian Oil Corporation Limited
- Trasteel International SA, Italy
- Madhucon Powers Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Kepco SPC Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Orica Australia Pty. Ltd.
- Kapuas Tunggal Persada - Indonesia
- Timah Investasi Mineral - Indoneisa
- Renaissance Capital - South Africa
- Siam City Cement - Thailand
- Pendopo Energi Batubara - Indonesia
- Bangladesh Power Developement Board
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- Bukit Makmur.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Bulk Trading Sa - Switzerland
- Semirara Mining and Power Corporation, Philippines
- Commonwealth Bank - Australia
- Malabar Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Indonesian Coal Mining Association
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- Therma Luzon, Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- Iligan Light & Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Planning Commission, India
- Anglo American - United Kingdom
- GMR Energy Limited - India
- Heidelberg Cement - Germany
- Binh Thuan Hamico - Vietnam
- Dalmia Cement Bharat India
- Electricity Generating Authority of Thailand
- Lanco Infratech Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Indian Energy Exchange, India
- Karbindo Abesyapradhi - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Latin American Coal - Colombia
- Formosa Plastics Group - Taiwan
- The University of Queensland
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- Independent Power Producers Association of India
- Georgia Ports Authority, United States
- Ministry of Finance - Indonesia
- McConnell Dowell - Australia
- SMC Global Power, Philippines
- Leighton Contractors Pty Ltd - Australia
- Posco Energy - South Korea
- Parliament of New Zealand
- Bukit Baiduri Energy - Indonesia
- Indika Energy - Indonesia
- Meralco Power Generation, Philippines
- Power Finance Corporation Ltd., India
- CIMB Investment Bank - Malaysia
- The Treasury - Australian Government
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate Of Revenue Intelligence - India
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- Savvy Resources Ltd - HongKong
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