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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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Thursday, 10 February 22
EIA ANALYSIS CONSIDERS DIFFERENT OUTCOMES FOR COAL MARKETS IN INDIA AND SOUTHEAST ASIA
In our International Energy Outlook 2021 (IEO2021) Issues in Focus: Uncertainty in Coal Trade in India and Greater Southeast Asia, we analyze three ...
Wednesday, 09 February 22
OIL PRICES: "IT'S GOING TO BE VERY EASY" TO GET TO $100/BARREL, ANALYST SAYS - YAHOO FINANCE
Energy and oil prices have been on fire over the last six months — and expect them to go higher, says one analyst.
“For ...
Wednesday, 09 February 22
MARKET INSIGHT - INTERMODAL
Iron ore prices have jumped significantly in the week prior to the Chinese New Year with traders and producers stocking up on raw materials. China& ...
Wednesday, 09 February 22
FEBRUARY HBA HITS RECORD HIGH IN 2022 ON INDONESIA’S EXPORT BAN IN JANUARY, WORSEN SUPPLY, UKRAINE TENSIONS
COALspot.com: Indonesian Coal Price Reference for February in a steep climb from January 2022.
As expected in January the Indonesia ...
Wednesday, 09 February 22
CHINESE COAL MARKS BEST DAY IN 4 MONTHS ON TIGHT SUPPLY, HIGH DEMAND - REUTERS
China’s coal futures on Tuesday recorded their best session since Bejing’s mid-October intervention to cool runaway prices, aided by co ...
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- Savvy Resources Ltd - HongKong
- Economic Council, Georgia
- Jorong Barutama Greston.PT - Indonesia
- ASAPP Information Group - India
- Indian Energy Exchange, India
- Kohat Cement Company Ltd. - Pakistan
- Larsen & Toubro Limited - India
- Siam City Cement PLC, Thailand
- Neyveli Lignite Corporation Ltd, - India
- Mercuria Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- SN Aboitiz Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Parry Sugars Refinery, India
- Ambuja Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- London Commodity Brokers - England
- Independent Power Producers Association of India
- Sical Logistics Limited - India
- International Coal Ventures Pvt Ltd - India
- Attock Cement Pakistan Limited
- Binh Thuan Hamico - Vietnam
- Essar Steel Hazira Ltd - India
- SMC Global Power, Philippines
- The State Trading Corporation of India Ltd
- PetroVietnam Power Coal Import and Supply Company
- Carbofer General Trading SA - India
- Mjunction Services Limited - India
- Indonesian Coal Mining Association
- Bhoruka Overseas - Indonesia
- Power Finance Corporation Ltd., India
- Cigading International Bulk Terminal - Indonesia
- Parliament of New Zealand
- White Energy Company Limited
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- Agrawal Coal Company - India
- Thiess Contractors Indonesia
- Borneo Indobara - Indonesia
- GMR Energy Limited - India
- Edison Trading Spa - Italy
- Bukit Makmur.PT - Indonesia
- Sakthi Sugars Limited - India
- Altura Mining Limited, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Xindia Steels Limited - India
- Rio Tinto Coal - Australia
- PTC India Limited - India
- Bharathi Cement Corporation - India
- Directorate Of Revenue Intelligence - India
- Thai Mozambique Logistica
- The Treasury - Australian Government
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Coal Council - USA
- VISA Power Limited - India
- Toyota Tsusho Corporation, Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Development Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining and Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Metalloyd Limited - United Kingdom
- SMG Consultants - Indonesia
- Sindya Power Generating Company Private Ltd
- Minerals Council of Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aditya Birla Group - India
- Bukit Baiduri Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Star Paper Mills Limited - India
- GAC Shipping (India) Pvt Ltd
- Renaissance Capital - South Africa
- Pendopo Energi Batubara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Goldman Sachs - Singapore
- Anglo American - United Kingdom
- Price Waterhouse Coopers - Russia
- Aboitiz Power Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- Meenaskhi Energy Private Limited - India
- The University of Queensland
- Leighton Contractors Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Malabar Cements Ltd - India
- CNBM International Corporation - China
- European Bulk Services B.V. - Netherlands
- Kartika Selabumi Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- MS Steel International - UAE
- Kapuas Tunggal Persada - Indonesia
- Bhushan Steel Limited - India
- PNOC Exploration Corporation - Philippines
- Wilmar Investment Holdings
- Chamber of Mines of South Africa
- Deloitte Consulting - India
- Indika Energy - Indonesia
- Vedanta Resources Plc - India
- Iligan Light & Power Inc, Philippines
- Interocean Group of Companies - India
- Ministry of Mines - Canada
- Kumho Petrochemical, South Korea
- Dalmia Cement Bharat India
- Banpu Public Company Limited - Thailand
- Energy Link Ltd, New Zealand
- TeaM Sual Corporation - Philippines
- Ministry of Finance - Indonesia
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Madhucon Powers Ltd - India
- Makarim & Taira - Indonesia
- Port Waratah Coal Services - Australia
- Videocon Industries ltd - India
- Indo Tambangraya Megah - Indonesia
- Central Java Power - Indonesia
- Indian Oil Corporation Limited
- Coastal Gujarat Power Limited - India
- Ind-Barath Power Infra Limited - India
- Posco Energy - South Korea
- Electricity Generating Authority of Thailand
- Timah Investasi Mineral - Indoneisa
- San Jose City I Power Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Marubeni Corporation - India
- Semirara Mining Corp, Philippines
- India Bulls Power Limited - India
- Global Coal Blending Company Limited - Australia
- Orica Mining Services - Indonesia
- Gujarat Sidhee Cement - India
- Kepco SPC Power Corporation, Philippines
- Tamil Nadu electricity Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- Australian Coal Association
- AsiaOL BioFuels Corp., Philippines
- Bulk Trading Sa - Switzerland
- Grasim Industreis Ltd - India
- New Zealand Coal & Carbon
- Africa Commodities Group - South Africa
- South Luzon Thermal Energy Corporation
- Salva Resources Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Coal and Oil Company - UAE
- Meralco Power Generation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Wood Mackenzie - Singapore
- Romanian Commodities Exchange
- Ceylon Electricity Board - Sri Lanka
- PowerSource Philippines DevCo
- Kaltim Prima Coal - Indonesia
- Baramulti Group, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- CIMB Investment Bank - Malaysia
- Singapore Mercantile Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- Bhatia International Limited - India
- Vizag Seaport Private Limited - India
- Australian Commodity Traders Exchange
- OPG Power Generation Pvt Ltd - India
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- Eastern Energy - Thailand
- Sarangani Energy Corporation, Philippines
- ICICI Bank Limited - India
- Orica Australia Pty. Ltd.
- GVK Power & Infra Limited - India
- Mintek Dendrill Indonesia
- Intertek Mineral Services - Indonesia
- Petron Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Barasentosa Lestari - Indonesia
- Latin American Coal - Colombia
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Heidelberg Cement - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Medco Energi Mining Internasional
- Globalindo Alam Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Georgia Ports Authority, United States
- Antam Resourcindo - Indonesia
- Siam City Cement - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Bangladesh Power Developement Board
- Ministry of Transport, Egypt
- Straits Asia Resources Limited - Singapore
- Lanco Infratech Ltd - India
- Mercator Lines Limited - India
- Standard Chartered Bank - UAE
- Sree Jayajothi Cements Limited - India
- Simpson Spence & Young - Indonesia
- Central Electricity Authority - India
- Jaiprakash Power Ventures ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Planning Commission, India
- Holcim Trading Pte Ltd - Singapore
- Karaikal Port Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
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