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Tuesday, 19 October 21
COAL INDIA, THE FALL GUY FOR POWER CRISIS - INDIA EXPRESS
The post-Covid economic recovery has led to a major increase in the demand for power, both in India and globally. In India, coal-based power plants have witnessed rapid depletion of coal stocks from a comfortable 28 days at the end of March to a precarious level of four days by the end of September. The country is struggling to understand how the crisis is likely to pan out in the near future. Coal India Ltd (CIL) has been unfairly attacked, even as it gears up to play a crucial role in fighting the power crisis.
The reasons for the crisis are not hard to find. These are structural as well as operational. A government-appointed committee in the early 1990s concluded that CIL “cannot be expected to meet the demand of the power sector, in case the pace of capacity addition accelerates.” This led to an amendment in the Coal Mines Nationalisation Act (CMNA) in 1993 that enabled the government to take away 200 coal blocks of 28 billion tons from CIL and allocate them to end-users for the captive mining of coal. These end-users, mostly in the private sector, failed to produce any significant quantity of coal to meet the rapidly rising power capacity between 2007 and 2016. The cancellation of 214 blocks by the Supreme Court added to the problem.
Commensurate to the captive mines allocated to the end-user industries, the coal production today should have been at least 500 million tonnes per annum (mtpa). In reality, this has never exceeded 60 mtpa. CIL, with denuded reserves, is called to meet the rising gap in coal supplies. These structural factors fuelled not just over-expectations from CIL, they also kept the company in a constant state of stress.
On the operational side, power plants are required by the Central Electricity Authority (CEA) to maintain a minimum stock of 15 to 30 days of normative coal consumption, depending upon the distance of the plant from the source of coal. The compliance with this directive by power plants has been severely lacking. This enhances the vulnerability of power plants, particularly those at longer distances, to supply constraints on account of the coal producer or transporter.
The persistent non-payment of coal sale dues by power plants to coal companies has created a serious strain on their working capital position. Some companies were forced to borrow from banks to meet the operational expenses, including disbursement of salaries. According to reports, Rs 18,000 crore is currently due to coal producers.
The persistent shortage of coal production by the privatised and captive mines forced India to import around 200 million tonnes (mt) of coal. Of this, more than 40 per cent goes to meet the demands of power plants. A spurt in imported coal prices, mainly due to a major increase in coal imports by China, acted as a brake on imports of coal. This escalated the demand for domestic coal.
Simultaneously, from August, the demand for thermal power witnessed a sudden rise after stagnating for over three years. The spurt in demand for coal is being linked to the post-Covid economic recovery. In the short run, the coal production by CIL has faced severe headwinds in the first quarter due to the second wave of the pandemic. Thousands of workers and officers were infected and hospitalised and more than 250 CIL employees lost their lives. In the second quarter, the extended monsoon severely affected open-cast mining. These added to supply disruptions and aggravated the crisis.
Despite so many constraining factors, it is to the credit of CIL that it has achieved a growth of 14 million tonnes (mt) or 5.8 per cent in coal production during the first half of 2021-22. Yet, the offtake was higher than the preceding year by 52 mt or 20.6 per cent. This was possible by drawing down on the opening inventory of coal from 100 mt to 42 mt during April to September.
With the monsoons behind us and the onset of a good productive season, CIL has already stepped up coal offtake to more than 1.5 mt per day. It is expected to rise further to 1.6/1.7 mt in the next few weeks. With these efforts, supply will match, if not exceed consumption. With efforts on the part of the railways in moving the coal, the crisis should dissipate in the near future, at least for power plants that pay timely for coal supplies. Obviously, it will take a few months for coal stock at power plants to climb to comfortable levels in line with the CEA’s norms.
Besides meeting the growing coal demand of power plants, CIL has been able to significantly replace the import of highly expensive thermal coal. Even after bearing the highest tax and transport cost globally, the landed cost of CIL coal continues to be much cheaper than imported coal at almost all destinations. The resultant benefits are savings of foreign exchange, and generation of power at affordable tariffs. The coal price charged by CIL, expressed in energy units, is at a deep discount of 60-70 per cent of imported coal.
In brief, CIL has been unfairly blamed for the coal crisis. It has played a stellar role, standing like a solid rock between light and darkness. It is striving to build comfortable stocks at the power plants, not in default of payment. The company has ramped up coal production despite the 1990s policy that took away coal blocks of 28 billion tonnes of reserves. It is time that the country recognises the critical role of CIL. It needs bouquets rather than brickbats.
Source: The India Express
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Thursday, 04 November 21
FASTER DECARBONISATION: BACK TO BASICS FOR THE MINING INDUSTRY? - WOOD MACKENZIE
To the uninitiated, rugby is a technical and complicated game. As young schoolboys it was all a wee bit confusing and we invariably ended up on the ...
Wednesday, 03 November 21
CHINA TO LAUNCH NEW DATA MONITORING SYSTEM, TARGETING COAL MARKET SPECULATION, HOARDING - GLOBAL TIMES
China’s top economic planner announced on Sunday a new data system for supervising the implementation of medium- and long-term contracts of c ...
Wednesday, 03 November 21
CHINA’S STATE PLANNER SAYS COAL SUPPLY IMPROVING, PRICES STABILISING - REUTERS
China’s coal supply situation has seen significant improvement with joint efforts from coal producers, logistics and downstream users, while ...
Wednesday, 03 November 21
HIGHER COKING COAL PRICES TO PARE PROFITABILITY OF STEELMAKERS IN SECOND HALF OF FY22 - CRISIL RATINGS
The operating margin of primary steelmakers will reduce by a third to 24-26% in the second half of this fiscal versus the first half as input cost ...
Wednesday, 03 November 21
MARKET INSIGHT - INTERMODAL
November is here and soon the all time seasonal favorite “all I want or Christmas is you” by Mariah Carey will be played in radio stati ...
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- PowerSource Philippines DevCo
- Jaiprakash Power Ventures ltd
- Krishnapatnam Port Company Ltd. - India
- Georgia Ports Authority, United States
- Anglo American - United Kingdom
- Riau Bara Harum - Indonesia
- Economic Council, Georgia
- Indika Energy - Indonesia
- Ministry of Transport, Egypt
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Energy Development Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Tata Chemicals Ltd - India
- Toyota Tsusho Corporation, Japan
- Ambuja Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Formosa Plastics Group - Taiwan
- Kaltim Prima Coal - Indonesia
- Deloitte Consulting - India
- Mercator Lines Limited - India
- Energy Link Ltd, New Zealand
- European Bulk Services B.V. - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- Borneo Indobara - Indonesia
- Dalmia Cement Bharat India
- Altura Mining Limited, Indonesia
- White Energy Company Limited
- MS Steel International - UAE
- Iligan Light & Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Mjunction Services Limited - India
- Interocean Group of Companies - India
- AsiaOL BioFuels Corp., Philippines
- Kalimantan Lumbung Energi - Indonesia
- Bhoruka Overseas - Indonesia
- Makarim & Taira - Indonesia
- Timah Investasi Mineral - Indoneisa
- Global Coal Blending Company Limited - Australia
- Global Green Power PLC Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Salva Resources Pvt Ltd - India
- Singapore Mercantile Exchange
- Videocon Industries ltd - India
- Trasteel International SA, Italy
- Indonesian Coal Mining Association
- Rashtriya Ispat Nigam Limited - India
- New Zealand Coal & Carbon
- Electricity Generating Authority of Thailand
- Marubeni Corporation - India
- SN Aboitiz Power Inc, Philippines
- Ministry of Finance - Indonesia
- IEA Clean Coal Centre - UK
- Binh Thuan Hamico - Vietnam
- Coalindo Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Coal and Oil Company - UAE
- Kideco Jaya Agung - Indonesia
- GVK Power & Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Aboitiz Power Corporation - Philippines
- Oldendorff Carriers - Singapore
- Cigading International Bulk Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- VISA Power Limited - India
- Ind-Barath Power Infra Limited - India
- Port Waratah Coal Services - Australia
- Commonwealth Bank - Australia
- Orica Australia Pty. Ltd.
- Sojitz Corporation - Japan
- Samtan Co., Ltd - South Korea
- The Treasury - Australian Government
- Madhucon Powers Ltd - India
- Gujarat Sidhee Cement - India
- Jorong Barutama Greston.PT - Indonesia
- SMG Consultants - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Africa Commodities Group - South Africa
- Star Paper Mills Limited - India
- Lanco Infratech Ltd - India
- Wilmar Investment Holdings
- Kumho Petrochemical, South Korea
- Mercuria Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Attock Cement Pakistan Limited
- Independent Power Producers Association of India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mintek Dendrill Indonesia
- Larsen & Toubro Limited - India
- GAC Shipping (India) Pvt Ltd
- CIMB Investment Bank - Malaysia
- Carbofer General Trading SA - India
- San Jose City I Power Corp, Philippines
- Essar Steel Hazira Ltd - India
- Sical Logistics Limited - India
- McConnell Dowell - Australia
- Minerals Council of Australia
- Standard Chartered Bank - UAE
- Straits Asia Resources Limited - Singapore
- Thai Mozambique Logistica
- South Luzon Thermal Energy Corporation
- Vedanta Resources Plc - India
- Chamber of Mines of South Africa
- Price Waterhouse Coopers - Russia
- Parliament of New Zealand
- Metalloyd Limited - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- ICICI Bank Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maharashtra Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- PTC India Limited - India
- Meralco Power Generation, Philippines
- The University of Queensland
- Eastern Coal Council - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- Semirara Mining Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Australian Commodity Traders Exchange
- Sarangani Energy Corporation, Philippines
- The State Trading Corporation of India Ltd
- Ministry of Mines - Canada
- Goldman Sachs - Singapore
- OPG Power Generation Pvt Ltd - India
- London Commodity Brokers - England
- Chettinad Cement Corporation Ltd - India
- Bhatia International Limited - India
- Intertek Mineral Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Bharathi Cement Corporation - India
- Sindya Power Generating Company Private Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Medco Energi Mining Internasional
- Bangladesh Power Developement Board
- Posco Energy - South Korea
- TeaM Sual Corporation - Philippines
- Indogreen Group - Indonesia
- CNBM International Corporation - China
- Central Java Power - Indonesia
- Sakthi Sugars Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement - Thailand
- Globalindo Alam Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Global Business Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Heidelberg Cement - Germany
- Barasentosa Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Uttam Galva Steels Limited - India
- Malabar Cements Ltd - India
- Merrill Lynch Commodities Europe
- Holcim Trading Pte Ltd - Singapore
- Banpu Public Company Limited - Thailand
- Bhushan Steel Limited - India
- Renaissance Capital - South Africa
- Tamil Nadu electricity Board
- Sree Jayajothi Cements Limited - India
- Indian Energy Exchange, India
- Latin American Coal - Colombia
- Parry Sugars Refinery, India
- Rio Tinto Coal - Australia
- Wood Mackenzie - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Edison Trading Spa - Italy
- GMR Energy Limited - India
- Agrawal Coal Company - India
- Bulk Trading Sa - Switzerland
- Indian Oil Corporation Limited
- Vijayanagar Sugar Pvt Ltd - India
- SMC Global Power, Philippines
- Jindal Steel & Power Ltd - India
- Petron Corporation, Philippines
- Central Electricity Authority - India
- Australian Coal Association
- Bukit Makmur.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Planning Commission, India
- ASAPP Information Group - India
- Romanian Commodities Exchange
- India Bulls Power Limited - India
- Electricity Authority, New Zealand
- Cement Manufacturers Association - India
- Xindia Steels Limited - India
- Eastern Energy - Thailand
- Bukit Baiduri Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Power Finance Corporation Ltd., India
- Vizag Seaport Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Directorate General of MIneral and Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Orica Mining Services - Indonesia
- Maheswari Brothers Coal Limited - India
- Alfred C Toepfer International GmbH - Germany
- PNOC Exploration Corporation - Philippines
- Grasim Industreis Ltd - India
- Aditya Birla Group - India
- Billiton Holdings Pty Ltd - Australia
- Thiess Contractors Indonesia
- Antam Resourcindo - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kartika Selabumi Mining - Indonesia
- Baramulti Group, Indonesia
- Indo Tambangraya Megah - Indonesia
- Directorate Of Revenue Intelligence - India
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