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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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Thursday, 11 June 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Wednesday, 10 June 20
OPEC+ CUTS EXTENSION TO ACCELERATE MARKET REBALANCING - FITCH RATINGS
Fitch Ratings-London-08 June 2020: The OPEC+ agreement to extend by one month record oil production cuts should accelerate market rebalancing, Fitc ...
Wednesday, 10 June 20
MARKET INSIGHT - INTERMODAL
In contrast to the economic projections of the past two years for the first half of 2020, the oil & gas industry and those involved in it faced ...
Wednesday, 10 June 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.19 PCT - XINHUA
China Taiyuan coal transaction price index stood at 123.71 points Monday, down 0.19 percent week on week.
The index, released by Chi ...
Tuesday, 09 June 20
BUNKER SUPPLY CONTRACTS - KEY CONSIDERATIONS FOR THE BUYER - GARD
KNOWLEDGE TO ELEVATE
Regardless of whether a buyer purchases fuel directly from physical suppliers or via brokers or traders and whether sale ...
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- Aboitiz Power Corporation - Philippines
- Vedanta Resources Plc - India
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- Rashtriya Ispat Nigam Limited - India
- AsiaOL BioFuels Corp., Philippines
- Global Business Power Corporation, Philippines
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- Indian Oil Corporation Limited
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- Coal and Oil Company - UAE
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- Goldman Sachs - Singapore
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- Billiton Holdings Pty Ltd - Australia
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- Planning Commission, India
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- Indo Tambangraya Megah - Indonesia
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- Minerals Council of Australia
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- Metalloyd Limited - United Kingdom
- Kepco SPC Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Indonesian Coal Mining Association
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- Vizag Seaport Private Limited - India
- Indogreen Group - Indonesia
- CIMB Investment Bank - Malaysia
- Rio Tinto Coal - Australia
- Neyveli Lignite Corporation Ltd, - India
- The Treasury - Australian Government
- Barasentosa Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhatia International Limited - India
- Bhoruka Overseas - Indonesia
- PNOC Exploration Corporation - Philippines
- Indian Energy Exchange, India
- Attock Cement Pakistan Limited
- IEA Clean Coal Centre - UK
- Wilmar Investment Holdings
- Price Waterhouse Coopers - Russia
- TeaM Sual Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Development Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Meenaskhi Energy Private Limited - India
- Lanco Infratech Ltd - India
- Independent Power Producers Association of India
- Australian Coal Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Finance - Indonesia
- Xindia Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Videocon Industries ltd - India
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- Africa Commodities Group - South Africa
- Chettinad Cement Corporation Ltd - India
- Binh Thuan Hamico - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Makarim & Taira - Indonesia
- Iligan Light & Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Kumho Petrochemical, South Korea
- Orica Australia Pty. Ltd.
- Siam City Cement - Thailand
- Economic Council, Georgia
- VISA Power Limited - India
- Parliament of New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Aditya Birla Group - India
- Holcim Trading Pte Ltd - Singapore
- CNBM International Corporation - China
- LBH Netherlands Bv - Netherlands
- PTC India Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Miang Besar Coal Terminal - Indonesia
- London Commodity Brokers - England
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Trasteel International SA, Italy
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- ASAPP Information Group - India
- Anglo American - United Kingdom
- Directorate Of Revenue Intelligence - India
- MS Steel International - UAE
- Coastal Gujarat Power Limited - India
- Parry Sugars Refinery, India
- Manunggal Multi Energi - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement PLC, Thailand
- Marubeni Corporation - India
- Ministry of Transport, Egypt
- Leighton Contractors Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- TNB Fuel Sdn Bhd - Malaysia
- Chamber of Mines of South Africa
- Sindya Power Generating Company Private Ltd
- Kalimantan Lumbung Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Indika Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- ICICI Bank Limited - India
- Krishnapatnam Port Company Ltd. - India
- Mjunction Services Limited - India
- Global Coal Blending Company Limited - Australia
- Agrawal Coal Company - India
- Wood Mackenzie - Singapore
- Power Finance Corporation Ltd., India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The University of Queensland
- Latin American Coal - Colombia
- SN Aboitiz Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mercuria Energy - Indonesia
- Electricity Generating Authority of Thailand
- Altura Mining Limited, Indonesia
- Maheswari Brothers Coal Limited - India
- Merrill Lynch Commodities Europe
- Star Paper Mills Limited - India
- Larsen & Toubro Limited - India
- Baramulti Group, Indonesia
- Ministry of Mines - Canada
- Romanian Commodities Exchange
- Toyota Tsusho Corporation, Japan
- Bhushan Steel Limited - India
- Uttam Galva Steels Limited - India
- Edison Trading Spa - Italy
- Orica Mining Services - Indonesia
- Gujarat Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- Pendopo Energi Batubara - Indonesia
- Singapore Mercantile Exchange
- Oldendorff Carriers - Singapore
- Bangladesh Power Developement Board
- Kideco Jaya Agung - Indonesia
- Gujarat Sidhee Cement - India
- Bharathi Cement Corporation - India
- Interocean Group of Companies - India
- Standard Chartered Bank - UAE
- Intertek Mineral Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- The State Trading Corporation of India Ltd
- Thai Mozambique Logistica
- Energy Link Ltd, New Zealand
- McConnell Dowell - Australia
- Meralco Power Generation, Philippines
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Commonwealth Bank - Australia
- GAC Shipping (India) Pvt Ltd
- Bulk Trading Sa - Switzerland
- Kapuas Tunggal Persada - Indonesia
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
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- PowerSource Philippines DevCo
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- Australian Commodity Traders Exchange
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