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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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Friday, 27 February 09
WIKA TO ACQUIRE MINING COMPANY
The Jakarta Post reported that, Public listed state construction firm PT Wijaya Karya (Wika) is to acquire a mining contracting firm in the first se ...
Friday, 27 February 09
COASTAL ENERGEN INKS PACT WITH CHINESE FIRM FOR POWER EQUIPMENT
My Digital Fc reported that, Dubai-based Coal and Oil Group, which is setting up a 1,200MW thermal power plant in Tamil Nadu, has tied-up with China ...
Thursday, 26 February 09
GMR INFRA COMPLETES INDONESIAN BUY
Blonnet reported that, GMR Infrastructure Ltd today confirmed the acquisition of an Indonesian coal mining company for a consideration of $80 millio ...
Wednesday, 25 February 09
INDONESIAN GOVERNMENT TO REGULATE MINIMUM COAL SELLING PRICES
The Jakarta Post reported that, To complement the recent enactment of the new mining law, the government is preparing to introduce a coal pricing in ...
Thursday, 19 February 09
GEOTHERMAL ENERGY DOMINATES 10.000 MW POWER PROJECT - ESDM
The role of coal as a source of energy is superseded by geothermal energy to power the second phase of the 10.000 megawatt (MW) power plant project. ...
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- San Jose City I Power Corp, Philippines
- Singapore Mercantile Exchange
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- VISA Power Limited - India
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- Pipit Mutiara Jaya. PT, Indonesia
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- Renaissance Capital - South Africa
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- Ceylon Electricity Board - Sri Lanka
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- Holcim Trading Pte Ltd - Singapore
- Tata Chemicals Ltd - India
- Port Waratah Coal Services - Australia
- Kohat Cement Company Ltd. - Pakistan
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- SN Aboitiz Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Heidelberg Cement - Germany
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- Goldman Sachs - Singapore
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- Economic Council, Georgia
- ASAPP Information Group - India
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- IEA Clean Coal Centre - UK
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- The Treasury - Australian Government
- Xindia Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Wood Mackenzie - Singapore
- Indogreen Group - Indonesia
- Trasteel International SA, Italy
- Gujarat Sidhee Cement - India
- Toyota Tsusho Corporation, Japan
- MS Steel International - UAE
- Timah Investasi Mineral - Indoneisa
- Bukit Makmur.PT - Indonesia
- Thiess Contractors Indonesia
- Minerals Council of Australia
- Alfred C Toepfer International GmbH - Germany
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- Merrill Lynch Commodities Europe
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- IHS Mccloskey Coal Group - USA
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- Antam Resourcindo - Indonesia
- Bhushan Steel Limited - India
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- Tamil Nadu electricity Board
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- Metalloyd Limited - United Kingdom
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- Directorate General of MIneral and Coal - Indonesia
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- Parliament of New Zealand
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- Ministry of Finance - Indonesia
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- Wilmar Investment Holdings
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- Straits Asia Resources Limited - Singapore
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
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- Manunggal Multi Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Jaiprakash Power Ventures ltd
- Bhoruka Overseas - Indonesia
- Central Electricity Authority - India
- Energy Link Ltd, New Zealand
- Global Coal Blending Company Limited - Australia
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- Karbindo Abesyapradhi - Indoneisa
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- Rashtriya Ispat Nigam Limited - India
- Ministry of Mines - Canada
- Planning Commission, India
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- Bulk Trading Sa - Switzerland
- Bangladesh Power Developement Board
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- Binh Thuan Hamico - Vietnam
- Bharathi Cement Corporation - India
- Edison Trading Spa - Italy
- Medco Energi Mining Internasional
- Attock Cement Pakistan Limited
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- PNOC Exploration Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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- Orica Mining Services - Indonesia
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- CNBM International Corporation - China
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- Eastern Coal Council - USA
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- PetroVietnam Power Coal Import and Supply Company
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