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Thursday, 25 June 20
ALL YOU WANT TO KNOW ABOUT COAL MINE AUCTIONS - THE HINDU BUSINESS LINE
Last week, Prime Minister Narendra Modi threw open the auction of 41 coal blocks for commercial mining. The decision, which was part of the announcements made by the Centre under the Atmanirbhar Bharat Abhiyan, was already proposed in January through the Mineral Laws (Amendment) Ordinance, 2020.
What is it?
These auctions invite participants to mine coal blocks by bids on the percentage value of coal sold that they will be willing to share with the government. Successful bidders will obtain leasing rights from State governments to mine a coal block for a certain period.
What’s new about the recent auction of 41 coal blocks is that this is the first time private players have been allowed to mine coal for commercial mining purposes, without any end-use restrictions. That is, unlike now, mined coal can be sold outside. There is no requirement that it should be used only for the firms’ own consumption.
India has a long history of commercial mining, for about 200 years starting from 1774. In the second half of the 20th century, the government took note of the inadequate capital investments from private players to meet the burgeoning energy needs of the country. Some private coal miners were found to be using unscientific coal mining practices and providing poor working conditions for labour. This led to the Central Government taking a decision to nationalise private coal mines. The nationalisation was done in two phases, from 1971-1973. That’s how the Coal Mines (Nationalisation) Act, 1973 was enacted, which restricted coal mining operations mainly to government entities.
The recent decision to allow private firms to participate in the bidding process with a reduced upfront amount, the facility of adjustment of upfront amount against royalty, liberal operational efficiency parameters, and 100 per cent FDI through automatic route is a watershed moment for India’s energy industry. Further, allowing a revenue-sharing basis (a percentage of revenue share (final bid) has to be paid to the government on the sale of coal) as against the current mechanism of paying fixed rupee per tonne, may also encourage private players to take participation in the auction process.
Why is it important?
Despite India being the world’s fourth-largest country in terms of availability of coal reserves, we still import around 240 million tonnes (mt) of coal a year valued at about ₹1.7 lakh crore. Almost the entire requirement of coking coal, a key raw material for steel, is imported as the domestic availability of high-quality coking coal is limited. According to the Coal Ministry, the 41 mines opened for auction now can hit a peak production of 225 mt in 2025-26, saving precious foreign exchange.
The High Powered Expert Committee formed in 2017 to examine the efficacy and challenges in coal mining auctions recommended a gradual shift from the allocation of coal blocks for own consumption to allocation of blocks for commercial mining. It expected that commercial mining of coal would help tap the locally available reserves and increase the availability of coal in the Indian market at a cheaper price making us less dependent on imports.
Why should I care?
On launching the auction of 41 coal blocks last week, the Prime Minister said that coal would be brought out “after decades of lockdown” and private sector involvement would help realise ₹33,000 crore of capital investment in the next five years. Should private investments flow in, it can give a leg up to the economic activity within the country and play an important role in job and income creation.
In addition, higher production and surplus availability of coal may lead to fall in its prices, which may reduce the cost of electricity consumed by the households and industries. Currently, coal-fired plants generate about 70 per cent of India’s electricity.
But weighed against this, is the question of is whether this has this move come a little too late in the day, and will it see enthusiastic bidding? India’s energy mix is already shifting towards cleaner renewables, the cost of producing power through cleaner routes has been falling and global players are shying away from polluting fuel.
The bottomline
Its a fine balance between short-term cost savings and long-term environmental impact
A weekly column that puts the fun into learning
Source: Satya Sontanam | The Hindu Business Line
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Monday, 29 June 20
CHINA COAL IMPORT OUTLOOK: MANY MOVING PARTS, FORECAST TO FALL 10% YOY - GHEE PEH | IEEFA
China’s coal demand declined in the first quarter of 2020. According to the China National Coal Association, the country consumed 870mt in th ...
Monday, 29 June 20
ULTRAMAX: A 58,000 FIXING DELIVERY SINGAPORE TRIP, VIA EAST COAST INDIA, REDELIVERY CHINA IN THE LOW $12,000S - BALTIC BRIEFING
Capesize
As the halfway mark of 2020 arrives, the capesize market is making new highs for the year. From persistent lows earlier caused by a ba ...
Saturday, 27 June 20
CHINA'S BENCHMARK POWER COAL PRICE REMAINS FLAT - XINHUA
China’s benchmark power coal price remained flat during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Friday, 26 June 20
WHAT TODAY'S BAILOUTS CAN DO FOR TOMORROW'S ECONOMIES - WORLD ECONOMIC FORUM
The COVID-19 crisis provides an opportunity for governments to build fairer, more sustainable and more resilient economies.
Governments a ...
Wednesday, 24 June 20
MARKET INSIGHT - INTERMODAL
The World Bank estimates that the global economy will fall by 5.2% this year, underlining that the Covid-19 pandemic has had rapid and massive cons ...
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- Kumho Petrochemical, South Korea
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- Indogreen Group - Indonesia
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- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Electricity Regulatory Commission - India
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- Simpson Spence & Young - Indonesia
- Carbofer General Trading SA - India
- IHS Mccloskey Coal Group - USA
- Renaissance Capital - South Africa
- Central Java Power - Indonesia
- Bharathi Cement Corporation - India
- Wood Mackenzie - Singapore
- White Energy Company Limited
- Economic Council, Georgia
- Singapore Mercantile Exchange
- Australian Coal Association
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- Minerals Council of Australia
- Indian Oil Corporation Limited
- LBH Netherlands Bv - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Borneo Indobara - Indonesia
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- Ind-Barath Power Infra Limited - India
- Tata Chemicals Ltd - India
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- Alfred C Toepfer International GmbH - Germany
- Rashtriya Ispat Nigam Limited - India
- Vizag Seaport Private Limited - India
- Independent Power Producers Association of India
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- Directorate Of Revenue Intelligence - India
- Asmin Koalindo Tuhup - Indonesia
- Neyveli Lignite Corporation Ltd, - India
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- Gujarat Sidhee Cement - India
- Electricity Authority, New Zealand
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- Port Waratah Coal Services - Australia
- Bukit Baiduri Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Holcim Trading Pte Ltd - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Petron Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Barasentosa Lestari - Indonesia
- Standard Chartered Bank - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Binh Thuan Hamico - Vietnam
- Agrawal Coal Company - India
- Global Business Power Corporation, Philippines
- Marubeni Corporation - India
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
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- Kideco Jaya Agung - Indonesia
- Sinarmas Energy and Mining - Indonesia
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- IEA Clean Coal Centre - UK
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- SMG Consultants - Indonesia
- Chettinad Cement Corporation Ltd - India
- Medco Energi Mining Internasional
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- Larsen & Toubro Limited - India
- Formosa Plastics Group - Taiwan
- Merrill Lynch Commodities Europe
- SMC Global Power, Philippines
- SN Aboitiz Power Inc, Philippines
- VISA Power Limited - India
- San Jose City I Power Corp, Philippines
- Cement Manufacturers Association - India
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- Planning Commission, India
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- Anglo American - United Kingdom
- Mercator Lines Limited - India
- GAC Shipping (India) Pvt Ltd
- Xindia Steels Limited - India
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- Ministry of Finance - Indonesia
- Sakthi Sugars Limited - India
- Dalmia Cement Bharat India
- Heidelberg Cement - Germany
- Siam City Cement - Thailand
- The University of Queensland
- Australian Commodity Traders Exchange
- Kobexindo Tractors - Indoneisa
- Thiess Contractors Indonesia
- Sree Jayajothi Cements Limited - India
- The Treasury - Australian Government
- Cigading International Bulk Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Indika Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Central Electricity Authority - India
- Petrochimia International Co. Ltd.- Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Oldendorff Carriers - Singapore
- India Bulls Power Limited - India
- Energy Link Ltd, New Zealand
- Attock Cement Pakistan Limited
- Indian Energy Exchange, India
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- Ceylon Electricity Board - Sri Lanka
- Vijayanagar Sugar Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- AsiaOL BioFuels Corp., Philippines
- CNBM International Corporation - China
- Romanian Commodities Exchange
- Eastern Coal Council - USA
- Africa Commodities Group - South Africa
- Leighton Contractors Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Banpu Public Company Limited - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meralco Power Generation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Aditya Birla Group - India
- Bayan Resources Tbk. - Indonesia
- PTC India Limited - India
- Sical Logistics Limited - India
- European Bulk Services B.V. - Netherlands
- Global Coal Blending Company Limited - Australia
- MS Steel International - UAE
- OPG Power Generation Pvt Ltd - India
- Rio Tinto Coal - Australia
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- New Zealand Coal & Carbon
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- Trasteel International SA, Italy
- Metalloyd Limited - United Kingdom
- Wilmar Investment Holdings
- Orica Mining Services - Indonesia
- CIMB Investment Bank - Malaysia
- PowerSource Philippines DevCo
- Ministry of Mines - Canada
- PNOC Exploration Corporation - Philippines
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- Essar Steel Hazira Ltd - India
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