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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, 27 January 22
2022 - A YEAR OF REBALANCING FOR METALS AND MINING - WOOD MACKENZIE
If 2021 was the year of rebound for metals and mining (M&M) commodities, then 2022 is shaping as the year of rebalance, says Wood Mackenzie, a ...
Wednesday, 26 January 22
MARKET INSIGHT - INTERMODAL
While it is logical that most of the S&P reports of the first weeks of the year are linked to very limited activity as reflected in the weekly ...
Wednesday, 26 January 22
INDONESIA: DME PROJECT IS ECONOMICALLY VIABLE AS STUDY DEMONSTRATES
The government is encouraging downstream coal processing or increase in coal added value, for example by turning coal into Dimethyl Ether (DME) to ...
Wednesday, 26 January 22
COMMODITY PRICES COULD SOAR IF THE RUSSIA-UKRAINE CRISIS ESCALATES - ING
It appears that a number of commodity markets are starting to at least price in some geopolitical risk around the growing tension between Russia an ...
Wednesday, 26 January 22
INDONESIA'S COAL BAN SENDS PRICES SOARING, OTHER EXPORTERS FAIL TO STEP UP - REUTERS
Indonesia’s short-lived ban on exporting coal has sent ructions through the seaborne market for the fuel in Asia, with the fallout likely to ...
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Showing 366 to 370 news of total 6871 |
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- Madhucon Powers Ltd - India
- Price Waterhouse Coopers - Russia
- Bukit Baiduri Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Meralco Power Generation, Philippines
- Antam Resourcindo - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement PLC, Thailand
- Planning Commission, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bangladesh Power Developement Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMG Consultants - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Deloitte Consulting - India
- Binh Thuan Hamico - Vietnam
- Indogreen Group - Indonesia
- Bayan Resources Tbk. - Indonesia
- Trasteel International SA, Italy
- CIMB Investment Bank - Malaysia
- Salva Resources Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- White Energy Company Limited
- Global Coal Blending Company Limited - Australia
- Pendopo Energi Batubara - Indonesia
- ICICI Bank Limited - India
- Africa Commodities Group - South Africa
- Bharathi Cement Corporation - India
- Wilmar Investment Holdings
- Thiess Contractors Indonesia
- Altura Mining Limited, Indonesia
- Manunggal Multi Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- Medco Energi Mining Internasional
- Energy Link Ltd, New Zealand
- McConnell Dowell - Australia
- Singapore Mercantile Exchange
- Ministry of Mines - Canada
- Metalloyd Limited - United Kingdom
- Minerals Council of Australia
- Jindal Steel & Power Ltd - India
- Alfred C Toepfer International GmbH - Germany
- San Jose City I Power Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Goldman Sachs - Singapore
- Independent Power Producers Association of India
- Mjunction Services Limited - India
- Meenaskhi Energy Private Limited - India
- Star Paper Mills Limited - India
- Gujarat Sidhee Cement - India
- TeaM Sual Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Aboitiz Power Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Dalmia Cement Bharat India
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement - Thailand
- Rio Tinto Coal - Australia
- Sojitz Corporation - Japan
- Toyota Tsusho Corporation, Japan
- Power Finance Corporation Ltd., India
- Bhoruka Overseas - Indonesia
- Indika Energy - Indonesia
- Economic Council, Georgia
- Ministry of Finance - Indonesia
- Parliament of New Zealand
- PTC India Limited - India
- Sinarmas Energy and Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Ind-Barath Power Infra Limited - India
- Indonesian Coal Mining Association
- Samtan Co., Ltd - South Korea
- Riau Bara Harum - Indonesia
- Larsen & Toubro Limited - India
- Intertek Mineral Services - Indonesia
- Aditya Birla Group - India
- Barasentosa Lestari - Indonesia
- Romanian Commodities Exchange
- SN Aboitiz Power Inc, Philippines
- PowerSource Philippines DevCo
- Mintek Dendrill Indonesia
- The State Trading Corporation of India Ltd
- Karaikal Port Pvt Ltd - India
- Electricity Generating Authority of Thailand
- OPG Power Generation Pvt Ltd - India
- Grasim Industreis Ltd - India
- Essar Steel Hazira Ltd - India
- Eastern Energy - Thailand
- Carbofer General Trading SA - India
- Standard Chartered Bank - UAE
- Indian Oil Corporation Limited
- Cigading International Bulk Terminal - Indonesia
- Coal and Oil Company - UAE
- Vedanta Resources Plc - India
- Marubeni Corporation - India
- Ambuja Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Iligan Light & Power Inc, Philippines
- Renaissance Capital - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Kartika Selabumi Mining - Indonesia
- Petron Corporation, Philippines
- Thai Mozambique Logistica
- Indian Energy Exchange, India
- Asmin Koalindo Tuhup - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Coal Council - USA
- Edison Trading Spa - Italy
- Australian Coal Association
- IEA Clean Coal Centre - UK
- Karbindo Abesyapradhi - Indoneisa
- Port Waratah Coal Services - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- TNB Fuel Sdn Bhd - Malaysia
- Agrawal Coal Company - India
- Formosa Plastics Group - Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Baramulti Group, Indonesia
- Banpu Public Company Limited - Thailand
- PNOC Exploration Corporation - Philippines
- Lanco Infratech Ltd - India
- The Treasury - Australian Government
- Savvy Resources Ltd - HongKong
- Timah Investasi Mineral - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Sarangani Energy Corporation, Philippines
- Wood Mackenzie - Singapore
- Posco Energy - South Korea
- Georgia Ports Authority, United States
- Videocon Industries ltd - India
- Commonwealth Bank - Australia
- Ministry of Transport, Egypt
- Simpson Spence & Young - Indonesia
- Coastal Gujarat Power Limited - India
- Heidelberg Cement - Germany
- Makarim & Taira - Indonesia
- Jaiprakash Power Ventures ltd
- Orica Mining Services - Indonesia
- New Zealand Coal & Carbon
- GVK Power & Infra Limited - India
- Kumho Petrochemical, South Korea
- Neyveli Lignite Corporation Ltd, - India
- Pipit Mutiara Jaya. PT, Indonesia
- Sakthi Sugars Limited - India
- MS Steel International - UAE
- Sical Logistics Limited - India
- Krishnapatnam Port Company Ltd. - India
- Bukit Makmur.PT - Indonesia
- Coalindo Energy - Indonesia
- Chamber of Mines of South Africa
- Oldendorff Carriers - Singapore
- VISA Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Indo Tambangraya Megah - Indonesia
- Central Electricity Authority - India
- Anglo American - United Kingdom
- Bhushan Steel Limited - India
- South Luzon Thermal Energy Corporation
- The University of Queensland
- Globalindo Alam Lestari - Indonesia
- Tata Chemicals Ltd - India
- Vizag Seaport Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- GAC Shipping (India) Pvt Ltd
- Malabar Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Energy Development Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Kapuas Tunggal Persada - Indonesia
- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Orica Australia Pty. Ltd.
- GMR Energy Limited - India
- Kobexindo Tractors - Indoneisa
- Therma Luzon, Inc, Philippines
- Kideco Jaya Agung - Indonesia
- SMC Global Power, Philippines
- Global Business Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Attock Cement Pakistan Limited
- London Commodity Brokers - England
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Mercator Lines Limited - India
- Latin American Coal - Colombia
- European Bulk Services B.V. - Netherlands
- Australian Commodity Traders Exchange
- India Bulls Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Parry Sugars Refinery, India
- Central Java Power - Indonesia
- CNBM International Corporation - China
- Uttam Galva Steels Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Merrill Lynch Commodities Europe
- Kaltim Prima Coal - Indonesia
- Mercuria Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Tamil Nadu electricity Board
- Cement Manufacturers Association - India
- Kepco SPC Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- Sree Jayajothi Cements Limited - India
- Bhatia International Limited - India
- Xindia Steels Limited - India
- Borneo Indobara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Leighton Contractors Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- ASAPP Information Group - India
- Semirara Mining Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
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