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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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Wednesday, 13 October 21
FBX INDEX: THE IMPOSSIBILITY OF SHORT-TERM FORECASTING - LARS JENSEN
Will freight rates on Asia-Europe or the Transpacific reach 40.000 USD/FFE in the run-up prior to Chinese New Year 2022? Or will they start droppin ...
Wednesday, 13 October 21
CHINA FLOODS: COAL PRICE HITS FRESH HIGH AS MINES SHUT - BBC
The price of coal used in China’s power plants has surged to a new record high as another of the country’s key mining regions is hit by ...
Tuesday, 12 October 21
BUMA SIGNS CONDITIONAL AGREEMENT FOR AUSTRALIAN ASSET ACQUISITION
PT Tbk. announced that its subsidiary, PT Bukit Makmur Mandiri Utama, through its newly incorporated Australian subsidiary, BUMA International Pty ...
Tuesday, 12 October 21
INDONESIA'S COAL-BASED POWER PLANTS ARE SUBJECT TO CARBON TAX NEXT YEAR, ELECTRICITY COSTS COULD RISE! - CNBC
The Indonesian government is planning plans to implement a carbon tax of IDR 30 per kilogram (kg) of carbon dioxide equivalent (CO2e) or equivalent ...
Monday, 11 October 21
COAL ABANDONMENT IN POWER GENERATION PROMOTED GAS DEMAND GROWTH IN EUROPE - TOP MANAGER: TASS
Accelerated abandonment of coal in power generation and the overall recovery of economic activity facilitated gas demand growth in Europe and led t ...
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- Central Java Power - Indonesia
- Bukit Baiduri Energy - Indonesia
- Wilmar Investment Holdings
- Billiton Holdings Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Riau Bara Harum - Indonesia
- Attock Cement Pakistan Limited
- ASAPP Information Group - India
- TeaM Sual Corporation - Philippines
- Trasteel International SA, Italy
- Sinarmas Energy and Mining - Indonesia
- Altura Mining Limited, Indonesia
- Vizag Seaport Private Limited - India
- Ministry of Transport, Egypt
- Merrill Lynch Commodities Europe
- Standard Chartered Bank - UAE
- OPG Power Generation Pvt Ltd - India
- Mjunction Services Limited - India
- ICICI Bank Limited - India
- Indonesian Coal Mining Association
- Malabar Cements Ltd - India
- Africa Commodities Group - South Africa
- Simpson Spence & Young - Indonesia
- Petron Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Anglo American - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Bhushan Steel Limited - India
- Kepco SPC Power Corporation, Philippines
- GMR Energy Limited - India
- Sakthi Sugars Limited - India
- Central Electricity Authority - India
- Directorate General of MIneral and Coal - Indonesia
- PTC India Limited - India
- Price Waterhouse Coopers - Russia
- Georgia Ports Authority, United States
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bulk Trading Sa - Switzerland
- Agrawal Coal Company - India
- Sree Jayajothi Cements Limited - India
- Cigading International Bulk Terminal - Indonesia
- Economic Council, Georgia
- White Energy Company Limited
- International Coal Ventures Pvt Ltd - India
- Renaissance Capital - South Africa
- AsiaOL BioFuels Corp., Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Deloitte Consulting - India
- Bhatia International Limited - India
- Energy Development Corp, Philippines
- Independent Power Producers Association of India
- Interocean Group of Companies - India
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Mineral Development Corp Ltd - India
- PowerSource Philippines DevCo
- IEA Clean Coal Centre - UK
- VISA Power Limited - India
- Commonwealth Bank - Australia
- Semirara Mining and Power Corporation, Philippines
- Vedanta Resources Plc - India
- Meralco Power Generation, Philippines
- Kartika Selabumi Mining - Indonesia
- Salva Resources Pvt Ltd - India
- The State Trading Corporation of India Ltd
- India Bulls Power Limited - India
- Uttam Galva Steels Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coalindo Energy - Indonesia
- Electricity Authority, New Zealand
- Coal and Oil Company - UAE
- GN Power Mariveles Coal Plant, Philippines
- Bayan Resources Tbk. - Indonesia
- Thiess Contractors Indonesia
- Iligan Light & Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- MS Steel International - UAE
- Rashtriya Ispat Nigam Limited - India
- Dalmia Cement Bharat India
- Australian Coal Association
- Kumho Petrochemical, South Korea
- Videocon Industries ltd - India
- Romanian Commodities Exchange
- Ind-Barath Power Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Semirara Mining Corp, Philippines
- Goldman Sachs - Singapore
- Planning Commission, India
- Ministry of Finance - Indonesia
- Sindya Power Generating Company Private Ltd
- Indian Oil Corporation Limited
- Banpu Public Company Limited - Thailand
- Heidelberg Cement - Germany
- Maharashtra Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Samtan Co., Ltd - South Korea
- Bukit Makmur.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Grasim Industreis Ltd - India
- McConnell Dowell - Australia
- Power Finance Corporation Ltd., India
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement PLC, Thailand
- Kaltim Prima Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Oldendorff Carriers - Singapore
- Parry Sugars Refinery, India
- GVK Power & Infra Limited - India
- Cement Manufacturers Association - India
- The University of Queensland
- Antam Resourcindo - Indonesia
- Rio Tinto Coal - Australia
- New Zealand Coal & Carbon
- Edison Trading Spa - Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sojitz Corporation - Japan
- Ministry of Mines - Canada
- Maheswari Brothers Coal Limited - India
- Indo Tambangraya Megah - Indonesia
- Star Paper Mills Limited - India
- Chamber of Mines of South Africa
- CNBM International Corporation - China
- GAC Shipping (India) Pvt Ltd
- San Jose City I Power Corp, Philippines
- Minerals Council of Australia
- European Bulk Services B.V. - Netherlands
- Kideco Jaya Agung - Indonesia
- Binh Thuan Hamico - Vietnam
- Energy Link Ltd, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- The Treasury - Australian Government
- Marubeni Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ambuja Cements Ltd - India
- Wood Mackenzie - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Indika Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Therma Luzon, Inc, Philippines
- CIMB Investment Bank - Malaysia
- Eastern Coal Council - USA
- Global Coal Blending Company Limited - Australia
- Krishnapatnam Port Company Ltd. - India
- Medco Energi Mining Internasional
- Global Business Power Corporation, Philippines
- Siam City Cement - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- Eastern Energy - Thailand
- Gujarat Sidhee Cement - India
- London Commodity Brokers - England
- Parliament of New Zealand
- Barasentosa Lestari - Indonesia
- Tamil Nadu electricity Board
- Formosa Plastics Group - Taiwan
- Thai Mozambique Logistica
- Bhoruka Overseas - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- PNOC Exploration Corporation - Philippines
- Indian Energy Exchange, India
- South Luzon Thermal Energy Corporation
- Aditya Birla Group - India
- SN Aboitiz Power Inc, Philippines
- Bharathi Cement Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercator Lines Limited - India
- Baramulti Group, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- Orica Australia Pty. Ltd.
- Xindia Steels Limited - India
- Savvy Resources Ltd - HongKong
- Singapore Mercantile Exchange
- Borneo Indobara - Indonesia
- Sical Logistics Limited - India
- Meenaskhi Energy Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Lanco Infratech Ltd - India
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
- Toyota Tsusho Corporation, Japan
- Bangladesh Power Developement Board
- Port Waratah Coal Services - Australia
- Pendopo Energi Batubara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Mercuria Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Larsen & Toubro Limited - India
- Alfred C Toepfer International GmbH - Germany
- Metalloyd Limited - United Kingdom
- Straits Asia Resources Limited - Singapore
- Madhucon Powers Ltd - India
- Indogreen Group - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Mintek Dendrill Indonesia
- Timah Investasi Mineral - Indoneisa
- Orica Mining Services - Indonesia
- Electricity Generating Authority of Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- SMC Global Power, Philippines
- IHS Mccloskey Coal Group - USA
- Holcim Trading Pte Ltd - Singapore
- LBH Netherlands Bv - Netherlands
- Essar Steel Hazira Ltd - India
- SMG Consultants - Indonesia
- Carbofer General Trading SA - India
- Latin American Coal - Colombia
- Gujarat Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
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