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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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Wednesday, 05 January 22
CHINA COAL FUTURES SURGE ON SUPPLY WORRIES AMID INDONESIA EXPORT BAN - REUTERS
China’s thermal coal futures surged by as much as 7.8per cent to kick off 2022 on concerns of supply disruptions after Indonesia, its biggest ...
Wednesday, 05 January 22
INDONESIA WARNS COAL SUPPLY CRUNCH NOT OVER AS CHINA PRICES RALLY - REUTERS
Indonesia has warned that its coal supply situation remains critical, ahead of Wednesday’s (Jan 5) review of its export ban, unnerving global ...
Tuesday, 28 December 21
INDIA'S ADANI NEARS FIRST COAL SHIPMENT FROM SHUNNED AUSTRALIAN MINE - REUTERS
India’s Adani Group ADEL.NS is preparing to ship the first coal cargo from Australia’s most controversial mine, after battling a seven- ...
Thursday, 23 December 21
COAL TO STAY AS MAJOR SOURCE OF ENERGY IN FORESEEABLE FUTURE: JOSHI - BUSINESS STANDARD
Coal will stay as a major source of energy in the foreseeable future as it is an affordable source of energy with substantial reserve, Parliament w ...
Thursday, 23 December 21
ANNUAL U.S. COAL-FIRED ELECTRICITY GENERATION WILL INCREASE FOR THE FIRST TIME SINCE 2014 - EIA
From December 20 through December 30, Today in Energy will feature some of our favorite articles from 2021. Today’s article was originally pu ...
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- Aboitiz Power Corporation - Philippines
- Coalindo Energy - Indonesia
- Wilmar Investment Holdings
- Videocon Industries ltd - India
- Holcim Trading Pte Ltd - Singapore
- Borneo Indobara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Grasim Industreis Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Dalmia Cement Bharat India
- Banpu Public Company Limited - Thailand
- South Luzon Thermal Energy Corporation
- Essar Steel Hazira Ltd - India
- Orica Mining Services - Indonesia
- Vizag Seaport Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Coal Council - USA
- Energy Development Corp, Philippines
- Metalloyd Limited - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Aditya Birla Group - India
- Bharathi Cement Corporation - India
- Antam Resourcindo - Indonesia
- Kideco Jaya Agung - Indonesia
- Vedanta Resources Plc - India
- Carbofer General Trading SA - India
- Indian Oil Corporation Limited
- The University of Queensland
- Sical Logistics Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Lanco Infratech Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- Sindya Power Generating Company Private Ltd
- Bayan Resources Tbk. - Indonesia
- Kaltim Prima Coal - Indonesia
- Rio Tinto Coal - Australia
- Cigading International Bulk Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- London Commodity Brokers - England
- GVK Power & Infra Limited - India
- Mercuria Energy - Indonesia
- Uttam Galva Steels Limited - India
- Electricity Generating Authority of Thailand
- Parry Sugars Refinery, India
- Karaikal Port Pvt Ltd - India
- Madhucon Powers Ltd - India
- Romanian Commodities Exchange
- Independent Power Producers Association of India
- Global Coal Blending Company Limited - Australia
- Indonesian Coal Mining Association
- Price Waterhouse Coopers - Russia
- Directorate Of Revenue Intelligence - India
- Altura Mining Limited, Indonesia
- Energy Link Ltd, New Zealand
- Planning Commission, India
- Trasteel International SA, Italy
- Indogreen Group - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Intertek Mineral Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Toyota Tsusho Corporation, Japan
- Barasentosa Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Makarim & Taira - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Mines - Canada
- Ministry of Finance - Indonesia
- IHS Mccloskey Coal Group - USA
- Tamil Nadu electricity Board
- Power Finance Corporation Ltd., India
- Semirara Mining Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Kartika Selabumi Mining - Indonesia
- Marubeni Corporation - India
- Interocean Group of Companies - India
- Deloitte Consulting - India
- Orica Australia Pty. Ltd.
- SMG Consultants - Indonesia
- Coal and Oil Company - UAE
- Medco Energi Mining Internasional
- PetroVietnam Power Coal Import and Supply Company
- Singapore Mercantile Exchange
- Indika Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Anglo American - United Kingdom
- GMR Energy Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Malabar Cements Ltd - India
- San Jose City I Power Corp, Philippines
- Meralco Power Generation, Philippines
- Wood Mackenzie - Singapore
- Sakthi Sugars Limited - India
- Georgia Ports Authority, United States
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ASAPP Information Group - India
- Australian Commodity Traders Exchange
- SN Aboitiz Power Inc, Philippines
- Star Paper Mills Limited - India
- CIMB Investment Bank - Malaysia
- The Treasury - Australian Government
- Bukit Makmur.PT - Indonesia
- Edison Trading Spa - Italy
- Formosa Plastics Group - Taiwan
- Riau Bara Harum - Indonesia
- SMC Global Power, Philippines
- Indo Tambangraya Megah - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Electricity Authority - India
- Kapuas Tunggal Persada - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Kobexindo Tractors - Indoneisa
- Bukit Baiduri Energy - Indonesia
- CNBM International Corporation - China
- LBH Netherlands Bv - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Thiess Contractors Indonesia
- Eastern Energy - Thailand
- Bulk Trading Sa - Switzerland
- Pendopo Energi Batubara - Indonesia
- Posco Energy - South Korea
- The State Trading Corporation of India Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Larsen & Toubro Limited - India
- Sojitz Corporation - Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Africa Commodities Group - South Africa
- PNOC Exploration Corporation - Philippines
- Jindal Steel & Power Ltd - India
- White Energy Company Limited
- Chamber of Mines of South Africa
- GAC Shipping (India) Pvt Ltd
- Ministry of Transport, Egypt
- IEA Clean Coal Centre - UK
- Global Green Power PLC Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Bangladesh Power Developement Board
- Parliament of New Zealand
- Bhoruka Overseas - Indonesia
- Mercator Lines Limited - India
- Straits Asia Resources Limited - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Bahari Cakrawala Sebuku - Indonesia
- Ambuja Cements Ltd - India
- Electricity Authority, New Zealand
- PTC India Limited - India
- Heidelberg Cement - Germany
- Agrawal Coal Company - India
- Salva Resources Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- MS Steel International - UAE
- Sarangani Energy Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Latin American Coal - Colombia
- Commonwealth Bank - Australia
- Simpson Spence & Young - Indonesia
- Rashtriya Ispat Nigam Limited - India
- India Bulls Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Renaissance Capital - South Africa
- International Coal Ventures Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- PowerSource Philippines DevCo
- TeaM Sual Corporation - Philippines
- Cement Manufacturers Association - India
- Kumho Petrochemical, South Korea
- Bhatia International Limited - India
- Port Waratah Coal Services - Australia
- Central Java Power - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Australian Coal Association
- Jaiprakash Power Ventures ltd
- Attock Cement Pakistan Limited
- VISA Power Limited - India
- Standard Chartered Bank - UAE
- Samtan Co., Ltd - South Korea
- Indian Energy Exchange, India
- Petron Corporation, Philippines
- Merrill Lynch Commodities Europe
- Bhushan Steel Limited - India
- Kepco SPC Power Corporation, Philippines
- Baramulti Group, Indonesia
- Savvy Resources Ltd - HongKong
- Bank of Tokyo Mitsubishi UFJ Ltd
- AsiaOL BioFuels Corp., Philippines
- Tata Chemicals Ltd - India
- ICICI Bank Limited - India
- Oldendorff Carriers - Singapore
- McConnell Dowell - Australia
- Coastal Gujarat Power Limited - India
- Mjunction Services Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meenaskhi Energy Private Limited - India
- Thai Mozambique Logistica
- Asmin Koalindo Tuhup - Indonesia
- New Zealand Coal & Carbon
- Ceylon Electricity Board - Sri Lanka
- Xindia Steels Limited - India
- Economic Council, Georgia
- Therma Luzon, Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Goldman Sachs - Singapore
- Maheswari Brothers Coal Limited - India
- Minerals Council of Australia
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement PLC, Thailand
- OPG Power Generation Pvt Ltd - India
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