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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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Tuesday, 05 October 21
CAPESIZE MARKET WAS IN A STEEP CLIMB FOR MOST OF THIS WEEK - BALTIC EXCHANGE
Capesize
The Capesize market was in a steep climb for most of this week as it reached a pinnacle of $74,786 Wednesday before stalling, regather ...
Wednesday, 29 September 21
THE WRITING IS ON THE WALL: AUSTRALIA’S COAL ERA IS OVER - YAHOO!FINANCE
As the fringe of Australian politics strives to pump up the coal industry, facts show that coal production has started its long run decline.
&n ...
Wednesday, 29 September 21
SURGING COAL PRICES SPLIT ASIAN BUYERS INTO RICH AND POOR - REUTERS
As seaborne coal in Asia trades at, or near, record highs, there are early signs of demand destruction, especially among price-sensitive buyers suc ...
Wednesday, 29 September 21
MARKET INSIGHT - INTERMODAL
Tanker Asset values have surprised to the upside, despite the downward pressure on the freight market. Tanker rates have been hovering close to the ...
Tuesday, 28 September 21
THE MAIDEN EDITION OF DIVE TECHNOLOGY SUMMIT 2021 CONCLUDES SUCCESSFULLY
Press Release: DIVE TECHNOLOGY SUMMIT 2021, a one-day conference on the recent technological advancements in the Industrial Diving industry conclud ...
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- Ministry of Finance - Indonesia
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- Samtan Co., Ltd - South Korea
- Petron Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Australian Commodity Traders Exchange
- Posco Energy - South Korea
- IEA Clean Coal Centre - UK
- Vizag Seaport Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bangladesh Power Developement Board
- Baramulti Group, Indonesia
- Formosa Plastics Group - Taiwan
- Price Waterhouse Coopers - Russia
- Australian Coal Association
- Minerals Council of Australia
- Ind-Barath Power Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Indian Oil Corporation Limited
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- Global Coal Blending Company Limited - Australia
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- India Bulls Power Limited - India
- PNOC Exploration Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
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- Ministry of Transport, Egypt
- Economic Council, Georgia
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- SMC Global Power, Philippines
- Grasim Industreis Ltd - India
- Directorate Of Revenue Intelligence - India
- Kideco Jaya Agung - Indonesia
- Standard Chartered Bank - UAE
- Karaikal Port Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhushan Steel Limited - India
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- Aditya Birla Group - India
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- GAC Shipping (India) Pvt Ltd
- Electricity Generating Authority of Thailand
- Global Business Power Corporation, Philippines
- The University of Queensland
- Indo Tambangraya Megah - Indonesia
- Rio Tinto Coal - Australia
- GVK Power & Infra Limited - India
- Malabar Cements Ltd - India
- ASAPP Information Group - India
- Energy Link Ltd, New Zealand
- Makarim & Taira - Indonesia
- Ministry of Mines - Canada
- Thai Mozambique Logistica
- MS Steel International - UAE
- Parliament of New Zealand
- Bukit Baiduri Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- McConnell Dowell - Australia
- Indian Energy Exchange, India
- Kalimantan Lumbung Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Sinarmas Energy and Mining - Indonesia
- Mjunction Services Limited - India
- Antam Resourcindo - Indonesia
- Indika Energy - Indonesia
- Coalindo Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Electricity Authority, New Zealand
- European Bulk Services B.V. - Netherlands
- Essar Steel Hazira Ltd - India
- PowerSource Philippines DevCo
- Miang Besar Coal Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Commonwealth Bank - Australia
- Africa Commodities Group - South Africa
- Rashtriya Ispat Nigam Limited - India
- Power Finance Corporation Ltd., India
- Coal and Oil Company - UAE
- Tamil Nadu electricity Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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- Agrawal Coal Company - India
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- International Coal Ventures Pvt Ltd - India
- Lanco Infratech Ltd - India
- The Treasury - Australian Government
- Bharathi Cement Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- Bahari Cakrawala Sebuku - Indonesia
- Savvy Resources Ltd - HongKong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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- Tata Chemicals Ltd - India
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- Wilmar Investment Holdings
- Siam City Cement PLC, Thailand
- Maharashtra Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- SN Aboitiz Power Inc, Philippines
- Madhucon Powers Ltd - India
- Thiess Contractors Indonesia
- Interocean Group of Companies - India
- Simpson Spence & Young - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Makmur.PT - Indonesia
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- Semirara Mining and Power Corporation, Philippines
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- Asmin Koalindo Tuhup - Indonesia
- Chamber of Mines of South Africa
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- The State Trading Corporation of India Ltd
- Gujarat Sidhee Cement - India
- Cigading International Bulk Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Jaiprakash Power Ventures ltd
- Semirara Mining Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Larsen & Toubro Limited - India
- Chettinad Cement Corporation Ltd - India
- Aboitiz Power Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Banpu Public Company Limited - Thailand
- Central Electricity Authority - India
- Pipit Mutiara Jaya. PT, Indonesia
- Port Waratah Coal Services - Australia
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- London Commodity Brokers - England
- Directorate General of MIneral and Coal - Indonesia
- Kumho Petrochemical, South Korea
- Global Green Power PLC Corporation, Philippines
- ICICI Bank Limited - India
- Riau Bara Harum - Indonesia
- Straits Asia Resources Limited - Singapore
- Meralco Power Generation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- GMR Energy Limited - India
- Kaltim Prima Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Latin American Coal - Colombia
- Heidelberg Cement - Germany
- Carbofer General Trading SA - India
- Sree Jayajothi Cements Limited - India
- Jorong Barutama Greston.PT - Indonesia
- White Energy Company Limited
- Billiton Holdings Pty Ltd - Australia
- Indogreen Group - Indonesia
- Merrill Lynch Commodities Europe
- Toyota Tsusho Corporation, Japan
- Maheswari Brothers Coal Limited - India
- Trasteel International SA, Italy
- Eastern Coal Council - USA
- Binh Thuan Hamico - Vietnam
- South Luzon Thermal Energy Corporation
- Georgia Ports Authority, United States
- Medco Energi Mining Internasional
- Indonesian Coal Mining Association
- Romanian Commodities Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Planning Commission, India
- Borneo Indobara - Indonesia
- Anglo American - United Kingdom
- Mercator Lines Limited - India
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- Mercuria Energy - Indonesia
- Eastern Energy - Thailand
- Alfred C Toepfer International GmbH - Germany
- Independent Power Producers Association of India
- Therma Luzon, Inc, Philippines
- Sojitz Corporation - Japan
- Meenaskhi Energy Private Limited - India
- Sindya Power Generating Company Private Ltd
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- Bhatia International Limited - India
- LBH Netherlands Bv - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement - Thailand
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- Mintek Dendrill Indonesia
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