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Friday, 23 October 09
CIL PRICE HIKE LIKELY TO PUSH POWER RATES UP
 Business-Standard reported that, May squeeze cement companies’ margins, but the steel sector is unlikely to be affected much.
The upward revision of coal prices by government-owned Coal India Limited (CIL), which took place last week, is likely to have a divergent impact on the fossil fuel’s primary consumers such as cement, power and steel sectors. While cement makers’ margins will be under pressure, power producers will make a move to pass on the increased burden to consumers.The three sectors account for about 72 per cent of the total coal demand in the country.
On October 16, CIL increased the price of coal from Eastern Coalfields (ECL) and Bharat Coking Coal (BCCL) by 15 per cent, while all other subsidiary companies were permitted a hike of 10 per cent. This price increase is expected to swell CIL’s net profit by approximately Rs 2,000 crore this financial year and by about Rs 4,100 crore in the following year.
However, for the consuming sectors, especially the cement industry, the increase in coal prices will squeeze profit margins at a time when prices are already low due to rapid capacity augmentation.
Despite the fact that coal accounted for around two-thirds of the power and fuel cost, and 20 per cent of the total cost for cement manufacturers, firms would be unable to pass on the hike in coal prices to end users due to the current business environment, a report by Crisil Research suggested.
“The recent coal price hike will increase the cost of cement by Rs 3-4 a bag. However, this has been absorbed by manufacturers in the short-term. In the long run, though, if conditions are right, we could pass on the cost,” Cement Manufacturers Association President and Shree Cement Managing Director HM Bangur said. For the power sector, though, the impact of the upward revision of coal prices would be neutral, as the rise in cost of fuel would be passed on by the generators.
On an average, tariffs of power plants using domestic coal as fuel are expected to increase by 3-4 per cent. In rupee terms, the tariffs are expected to increase on an average by Rs 0.06 a unit. The rise is expected to increase the tariffs for final power consumers as the price hike will be passed on, the Crisil report further stated.
With the respective regulatory authorities of each state overseeing power tariffs, generators would first have to ascertain the increase in input costs and then approach the regulator for approval.
However, with the coal mixture of each generator differing, the choice being between CIL coal and that of the imported variety, it would take sometime before power utilities decide on the actual magnitude of the increase in tariff. “But 100 per cent, we will have to pass on the cost,” an official from the RPG’s power utility CESC said.
As for the steel industry, the Crisil report indicated that the coal price hike by CIL was not expected to have a significant impact on the steel industry as non-coking coal, which was primarily used by the sector, did not account for a significant portion of the total cost of steel manufacturing, except for steel made through the sponge iron route. Moreover, the dependence of domestic steel producers on CIL is only 25-35 per cent of their total requirement due to the availability of captive mines and imports. But Visa Steel Chairman and President of the Indian Chamber of Commerce Vishambhar Saran said the ex-pit head prices of CIL were already comparable to international prices, barring the freight factor cost. “The cost of setting-up a plant is higher if one is to use domestically available coal as compared to imported coal. This is because the former is of inferior quality and consequently extra costs such as ash disposal must be counted into the total project cost,” he added.
Source: Business-Standard
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Tuesday, 13 October 09
INDIA INTERESTED IN AMERICAN COAL
UPI reported that, Coal India Ltd. in its global expansion efforts is now interested in coal properties in the United States.
The Business Standard ...
Tuesday, 13 October 09
RIVERSDALE MAY USE ZAMBEZI RIVER TO TRANSPORT MOZAMBIQUE COAL
Mining Weekly reported that, ASX-listed coal-miner Riversdale Mining would submit a feasibility study and an environmental-impact study (EIS) for it ...
Monday, 12 October 09
INDONESIAN COAL MINER SAYS PLANS IPO IN 2010
Reuters reported that, Indonesian coal miner PT Bhakti Energi Persada plans an initial public offering in the first quarter of 2010 to develop coal ...
Monday, 12 October 09
BISICHI MINING FINALIZES COAL SUPPLY CONTRACT FOR 2010-2012
Small Cap News reported that, Bisichi, the South Africa based coal mining group, has agreed a three year coal supply contract between its principal ...
Monday, 12 October 09
SHANDUKA BUYS SACMH RICHARDS BAY COAL ALLOCATION
* Shanduka Coal takes SACMH 500,000T export space
* RBCT must approve any change of ownership
Reuters reported that, South Africa's Shanduka Co ...
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- Cigading International Bulk Terminal - Indonesia
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- Tamil Nadu electricity Board
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- TeaM Sual Corporation - Philippines
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- Dalmia Cement Bharat India
- India Bulls Power Limited - India
- Port Waratah Coal Services - Australia
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
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- Singapore Mercantile Exchange
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- Merrill Lynch Commodities Europe
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- Bulk Trading Sa - Switzerland
- Commonwealth Bank - Australia
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- Global Coal Blending Company Limited - Australia
- Iligan Light & Power Inc, Philippines
- Minerals Council of Australia
- Trasteel International SA, Italy
- IHS Mccloskey Coal Group - USA
- Bhatia International Limited - India
- GMR Energy Limited - India
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- Rio Tinto Coal - Australia
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- International Coal Ventures Pvt Ltd - India
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- Billiton Holdings Pty Ltd - Australia
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- Power Finance Corporation Ltd., India
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- Indian Oil Corporation Limited
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- Ceylon Electricity Board - Sri Lanka
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- Coal and Oil Company - UAE
- IEA Clean Coal Centre - UK
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- Chettinad Cement Corporation Ltd - India
- Semirara Mining and Power Corporation, Philippines
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- Thiess Contractors Indonesia
- Alfred C Toepfer International GmbH - Germany
- Toyota Tsusho Corporation, Japan
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- Samtan Co., Ltd - South Korea
- LBH Netherlands Bv - Netherlands
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- Directorate General of MIneral and Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Eastern Energy - Thailand
- Leighton Contractors Pty Ltd - Australia
- Star Paper Mills Limited - India
- Goldman Sachs - Singapore
- Indian Energy Exchange, India
- Electricity Authority, New Zealand
- Kalimantan Lumbung Energi - Indonesia
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- Ministry of Transport, Egypt
- Indonesian Coal Mining Association
- PetroVietnam Power Coal Import and Supply Company
- Kumho Petrochemical, South Korea
- Orica Australia Pty. Ltd.
- Georgia Ports Authority, United States
- Central Electricity Authority - India
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- TNB Fuel Sdn Bhd - Malaysia
- European Bulk Services B.V. - Netherlands
- Economic Council, Georgia
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- Chamber of Mines of South Africa
- McConnell Dowell - Australia
- Savvy Resources Ltd - HongKong
- Meralco Power Generation, Philippines
- Wilmar Investment Holdings
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- Planning Commission, India
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- Ministry of Mines - Canada
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- Tata Chemicals Ltd - India
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- Indogreen Group - Indonesia
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