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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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Tuesday, 23 June 20
COVID-19 COULD CAUSE A BOOM IN COAL POWER - RYSTAD ENERGY | OILPRICE
COVID-19 has not only impacted the energy industry’s revenues but also its infrastructure development.
The delay of new natural gas ...
Tuesday, 23 June 20
CHINA'S COAL OUTPUT UP 0.9 PCT IN JANUARY-MAY: XINHUA
Output of raw coal in China rose 0.9 percent year on year to 1.47 billion tonnes in the first five months of this year, official data showed.
& ...
Monday, 22 June 20
KAMSARMAX TYPES REGULARLY HIT THE $9,000 PER DAY LEVEL FOR INDONESIAN COAL RUN TO CHINA, BALTIC BRIEFING SAYS
Capesize
The Capesize market trajectory this week has been one of the steepest rallies the sector has experienced. Opening at $12,410, the sect ...
Saturday, 20 June 20
WORLD OIL DEMAND IS PROJECTED TO DECREASE BY 9.1 MB/D IN 2020 - OPEC
Crude Oil Price Movements
Spot crude oil prices rebounded in May from low levels registered a month earlier, as physical market fundamentals im ...
Saturday, 20 June 20
NO ESCAPING GLOBAL TRADE SLUMP - BALTIC EXCHANGE
Those hoping for a decent recovery in trade in the second half of the year should prepare for disappointment.
New data from the Unit ...
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- IHS Mccloskey Coal Group - USA
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- Tamil Nadu electricity Board
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- Petrochimia International Co. Ltd.- Taiwan
- India Bulls Power Limited - India
- Eastern Energy - Thailand
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- Electricity Generating Authority of Thailand
- Kumho Petrochemical, South Korea
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- Petron Corporation, Philippines
- The Treasury - Australian Government
- Australian Coal Association
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- Energy Development Corp, Philippines
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- Jorong Barutama Greston.PT - Indonesia
- MS Steel International - UAE
- Commonwealth Bank - Australia
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- Gujarat Electricity Regulatory Commission - India
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- Eastern Coal Council - USA
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- Indian Oil Corporation Limited
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- Altura Mining Limited, Indonesia
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- Energy Link Ltd, New Zealand
- Economic Council, Georgia
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- Parliament of New Zealand
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- Bukit Makmur.PT - Indonesia
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- Australian Commodity Traders Exchange
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- Ministry of Transport, Egypt
- Kalimantan Lumbung Energi - Indonesia
- Merrill Lynch Commodities Europe
- Coastal Gujarat Power Limited - India
- Malabar Cements Ltd - India
- Xindia Steels Limited - India
- Oldendorff Carriers - Singapore
- Meenaskhi Energy Private Limited - India
- Ministry of Mines - Canada
- The State Trading Corporation of India Ltd
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- TNB Fuel Sdn Bhd - Malaysia
- Parry Sugars Refinery, India
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- Kideco Jaya Agung - Indonesia
- White Energy Company Limited
- Semirara Mining and Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
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- Makarim & Taira - Indonesia
- Goldman Sachs - Singapore
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- Essar Steel Hazira Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Grasim Industreis Ltd - India
- Sarangani Energy Corporation, Philippines
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- PNOC Exploration Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Africa Commodities Group - South Africa
- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMC Global Power, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Simpson Spence & Young - Indonesia
- Chettinad Cement Corporation Ltd - India
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- OPG Power Generation Pvt Ltd - India
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- Bank of Tokyo Mitsubishi UFJ Ltd
- Thiess Contractors Indonesia
- AsiaOL BioFuels Corp., Philippines
- Central Electricity Authority - India
- Interocean Group of Companies - India
- Bangladesh Power Developement Board
- Gujarat Sidhee Cement - India
- Baramulti Group, Indonesia
- Salva Resources Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Videocon Industries ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Medco Energi Mining Internasional
- Globalindo Alam Lestari - Indonesia
- Aditya Birla Group - India
- Tata Chemicals Ltd - India
- Intertek Mineral Services - Indonesia
- CNBM International Corporation - China
- Straits Asia Resources Limited - Singapore
- Latin American Coal - Colombia
- PetroVietnam Power Coal Import and Supply Company
- Mjunction Services Limited - India
- Minerals Council of Australia
- ICICI Bank Limited - India
- Maheswari Brothers Coal Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CIMB Investment Bank - Malaysia
- Siam City Cement - Thailand
- PowerSource Philippines DevCo
- Banpu Public Company Limited - Thailand
- Borneo Indobara - Indonesia
- Sindya Power Generating Company Private Ltd
- Agrawal Coal Company - India
- Madhucon Powers Ltd - India
- Bhatia International Limited - India
- Georgia Ports Authority, United States
- Sinarmas Energy and Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- VISA Power Limited - India
- Sojitz Corporation - Japan
- Singapore Mercantile Exchange
- PTC India Limited - India
- Metalloyd Limited - United Kingdom
- Meralco Power Generation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Attock Cement Pakistan Limited
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- Electricity Authority, New Zealand
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- Independent Power Producers Association of India
- Orica Australia Pty. Ltd.
- Bhushan Steel Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Timah Investasi Mineral - Indoneisa
- Indogreen Group - Indonesia
- Dalmia Cement Bharat India
- International Coal Ventures Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Directorate Of Revenue Intelligence - India
- Indian Energy Exchange, India
- Samtan Co., Ltd - South Korea
- Edison Trading Spa - Italy
- Kepco SPC Power Corporation, Philippines
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- Romanian Commodities Exchange
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