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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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Monday, 18 April 22
DEMAND FOR THERMAL COAL TO RISE DUE TO INCREASE IN ELECTRICITY DEMAND: INDIAN COAL MINISTRY - PTI
Coal block allocatees have a golden opportunity to augment production as the demand for thermal coal will rise due to an increase in electricity de ...
Tuesday, 05 April 22
INDONESIAN COAL PRICE REFERENCE HITS RECORD ABOVE $288
COALspot.com: Indonesian Coal Price Reference for April in a steep climb from March 2022.
As expected, Russia – Ukraine war dr ...
Thursday, 31 March 22
CHINA STATE PLANNER ASKS COAL INDEX PROVIDERS TO RECTIFY IRREGULARITIES - REUTERS
China’s state planner has asked some major coal price index providers to rectify “severe irregularities” it had identified in the ...
Thursday, 31 March 22
IMPORTED COAL PRICES TO JUMP 55% IN APR-JUN, IMPACT INDIAN FIRMS: ICRA - LIVEMINT
Supply disruption owing to the Russia-Ukraine conflict could push the price of imported coal by 45-55% in Q1FY23 compared to the previous quarter, ...
Thursday, 31 March 22
CHINA'S COAL OUTPUT SET FOR MODERATE GROWTH IN 2022 - INDUSTRY BODY - REUTERS
China is expected to see its coal output to grow further in 2022 after hitting a record last year, an industry body forecast on Wednesday, as the c ...
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- Coal and Oil Company - UAE
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- Tata Chemicals Ltd - India
- CIMB Investment Bank - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Coastal Gujarat Power Limited - India
- Marubeni Corporation - India
- Indogreen Group - Indonesia
- Indian Energy Exchange, India
- CNBM International Corporation - China
- Thai Mozambique Logistica
- Aboitiz Power Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercator Lines Limited - India
- Bhushan Steel Limited - India
- Wood Mackenzie - Singapore
- London Commodity Brokers - England
- Trasteel International SA, Italy
- ICICI Bank Limited - India
- The State Trading Corporation of India Ltd
- Billiton Holdings Pty Ltd - Australia
- ASAPP Information Group - India
- Indika Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
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- Banpu Public Company Limited - Thailand
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- Lanco Infratech Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kohat Cement Company Ltd. - Pakistan
- Edison Trading Spa - Italy
- Ministry of Mines - Canada
- Rio Tinto Coal - Australia
- South Luzon Thermal Energy Corporation
- Chamber of Mines of South Africa
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- Metalloyd Limited - United Kingdom
- Coalindo Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Petrochimia International Co. Ltd.- Taiwan
- Bulk Trading Sa - Switzerland
- Kaltim Prima Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Formosa Plastics Group - Taiwan
- Directorate General of MIneral and Coal - Indonesia
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- Bukit Baiduri Energy - Indonesia
- Standard Chartered Bank - UAE
- Kideco Jaya Agung - Indonesia
- IHS Mccloskey Coal Group - USA
- Sojitz Corporation - Japan
- IEA Clean Coal Centre - UK
- Sical Logistics Limited - India
- Essar Steel Hazira Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Antam Resourcindo - Indonesia
- Sakthi Sugars Limited - India
- Rashtriya Ispat Nigam Limited - India
- Grasim Industreis Ltd - India
- Minerals Council of Australia
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- PNOC Exploration Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Eastern Energy - Thailand
- Kumho Petrochemical, South Korea
- GN Power Mariveles Coal Plant, Philippines
- Holcim Trading Pte Ltd - Singapore
- Bangladesh Power Developement Board
- Bhatia International Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- European Bulk Services B.V. - Netherlands
- Intertek Mineral Services - Indonesia
- Electricity Authority, New Zealand
- Indian Oil Corporation Limited
- Tamil Nadu electricity Board
- Gujarat Mineral Development Corp Ltd - India
- Parry Sugars Refinery, India
- New Zealand Coal & Carbon
- Ministry of Transport, Egypt
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- Maheswari Brothers Coal Limited - India
- Gujarat Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Timah Investasi Mineral - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Sarangani Energy Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Petron Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- LBH Netherlands Bv - Netherlands
- Star Paper Mills Limited - India
- Parliament of New Zealand
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- Miang Besar Coal Terminal - Indonesia
- Vizag Seaport Private Limited - India
- Madhucon Powers Ltd - India
- Chettinad Cement Corporation Ltd - India
- Meralco Power Generation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Central Electricity Authority - India
- Eastern Coal Council - USA
- Posco Energy - South Korea
- Uttam Galva Steels Limited - India
- McConnell Dowell - Australia
- Semirara Mining and Power Corporation, Philippines
- White Energy Company Limited
- Anglo American - United Kingdom
- Attock Cement Pakistan Limited
- Australian Commodity Traders Exchange
- SMC Global Power, Philippines
- Romanian Commodities Exchange
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- Mjunction Services Limited - India
- Merrill Lynch Commodities Europe
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- Ambuja Cements Ltd - India
- Siam City Cement PLC, Thailand
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- Cement Manufacturers Association - India
- Toyota Tsusho Corporation, Japan
- The Treasury - Australian Government
- Alfred C Toepfer International GmbH - Germany
- SMG Consultants - Indonesia
- VISA Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- PowerSource Philippines DevCo
- Central Java Power - Indonesia
- Vedanta Resources Plc - India
- Goldman Sachs - Singapore
- Deloitte Consulting - India
- Asmin Koalindo Tuhup - Indonesia
- Price Waterhouse Coopers - Russia
- Medco Energi Mining Internasional
- SN Aboitiz Power Inc, Philippines
- Oldendorff Carriers - Singapore
- Commonwealth Bank - Australia
- San Jose City I Power Corp, Philippines
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- GMR Energy Limited - India
- Indonesian Coal Mining Association
- Meenaskhi Energy Private Limited - India
- Renaissance Capital - South Africa
- Kalimantan Lumbung Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Economic Council, Georgia
- Bharathi Cement Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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- MS Steel International - UAE
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- Ind-Barath Power Infra Limited - India
- Cigading International Bulk Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Australian Coal Association
- Georgia Ports Authority, United States
- Orica Australia Pty. Ltd.
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Singapore Mercantile Exchange
- Bukit Makmur.PT - Indonesia
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- Samtan Co., Ltd - South Korea
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- Heidelberg Cement - Germany
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