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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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Tuesday, 14 December 21
COAL LOCK-IN IN SOUTHEAST ASIA PRESENTS A CHALLENGE FOR THE ASIAN DEVELOPMENT BANK'S COAL RETIREMENT PLAN - IEEFA
In August, the Asian Development Bank (ADB) announced an ambitious plan to buy high emissions coal-fired power plants in Southeast Asia and retire ...
Saturday, 11 December 21
BUNKER BUYERS LOSE UP TO $5/MT FOR NOT COVERING ENOUGH SUPPLIERS - INTEGR8 FUELS
With the Brent price recently touching the $80 mark and before the Omicron variant concerns pushed it lower, bunker prices reached levels not seen ...
Tuesday, 07 December 21
SUPERCYCLE DEMAND: ARE WE THERE YET? - WOOD MACKENZIE
Taking young children on a long journey is fraught with challenges, not least the inevitable question a few minutes after leaving: are we there yet ...
Tuesday, 07 December 21
COAL WOULD REMAIN ENERGY LEADER FOR AT LEAST 15 YEARS - LIVEMINT
Coal India Ltd (CIL) has been in the eye of the storm after fuel stocks at coal-fuelled power plants depleted in October. Fuel stocks since are bei ...
Tuesday, 07 December 21
GLOBAL SHIPPING OUTLOOK TURNS STABLE FROM POSITIVE ON THE BACK OF PEAKING EARNINGS DURING 2021 - MOODY'S
The outlook for the global shipping industry is changed to stable from positive for the next 12 to 18 months due to demand slightly outstripping su ...
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- Asmin Koalindo Tuhup - Indonesia
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- Directorate General of MIneral and Coal - Indonesia
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- GAC Shipping (India) Pvt Ltd
- Meralco Power Generation, Philippines
- San Jose City I Power Corp, Philippines
- Indian Energy Exchange, India
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Gujarat Sidhee Cement - India
- Eastern Energy - Thailand
- GMR Energy Limited - India
- Tamil Nadu electricity Board
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- Wood Mackenzie - Singapore
- Trasteel International SA, Italy
- Borneo Indobara - Indonesia
- Aditya Birla Group - India
- Bukit Baiduri Energy - Indonesia
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- Karbindo Abesyapradhi - Indoneisa
- Commonwealth Bank - Australia
- Mjunction Services Limited - India
- Bangladesh Power Developement Board
- Offshore Bulk Terminal Pte Ltd, Singapore
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- Marubeni Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
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- Samtan Co., Ltd - South Korea
- Ministry of Mines - Canada
- Kaltim Prima Coal - Indonesia
- Grasim Industreis Ltd - India
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- Chamber of Mines of South Africa
- Intertek Mineral Services - Indonesia
- McConnell Dowell - Australia
- London Commodity Brokers - England
- Rio Tinto Coal - Australia
- Siam City Cement PLC, Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Ind-Barath Power Infra Limited - India
- Electricity Authority, New Zealand
- Global Business Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Kideco Jaya Agung - Indonesia
- SMG Consultants - Indonesia
- Edison Trading Spa - Italy
- PTC India Limited - India
- MS Steel International - UAE
- ICICI Bank Limited - India
- Tata Chemicals Ltd - India
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- Central Electricity Authority - India
- Heidelberg Cement - Germany
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- Electricity Generating Authority of Thailand
- Mercuria Energy - Indonesia
- Energy Link Ltd, New Zealand
- Economic Council, Georgia
- Orica Australia Pty. Ltd.
- PowerSource Philippines DevCo
- Bhushan Steel Limited - India
- CIMB Investment Bank - Malaysia
- Uttam Galva Steels Limited - India
- Dalmia Cement Bharat India
- Toyota Tsusho Corporation, Japan
- Orica Mining Services - Indonesia
- Parliament of New Zealand
- Minerals Council of Australia
- Jaiprakash Power Ventures ltd
- Global Green Power PLC Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- SN Aboitiz Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Riau Bara Harum - Indonesia
- Eastern Coal Council - USA
- Banpu Public Company Limited - Thailand
- Xindia Steels Limited - India
- Coal and Oil Company - UAE
- Merrill Lynch Commodities Europe
- Mercator Lines Limited - India
- Directorate Of Revenue Intelligence - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Carbofer General Trading SA - India
- Globalindo Alam Lestari - Indonesia
- Latin American Coal - Colombia
- Altura Mining Limited, Indonesia
- Agrawal Coal Company - India
- Star Paper Mills Limited - India
- Simpson Spence & Young - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- International Coal Ventures Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Planning Commission, India
- Price Waterhouse Coopers - Russia
- Maheswari Brothers Coal Limited - India
- Jindal Steel & Power Ltd - India
- South Luzon Thermal Energy Corporation
- Sinarmas Energy and Mining - Indonesia
- Vedanta Resources Plc - India
- Attock Cement Pakistan Limited
- Savvy Resources Ltd - HongKong
- OPG Power Generation Pvt Ltd - India
- Indika Energy - Indonesia
- CNBM International Corporation - China
- VISA Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Parry Sugars Refinery, India
- Semirara Mining Corp, Philippines
- Africa Commodities Group - South Africa
- Ambuja Cements Ltd - India
- Australian Coal Association
- Medco Energi Mining Internasional
- Madhucon Powers Ltd - India
- Standard Chartered Bank - UAE
- Meenaskhi Energy Private Limited - India
- Salva Resources Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Videocon Industries ltd - India
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- Power Finance Corporation Ltd., India
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- Anglo American - United Kingdom
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- Mintek Dendrill Indonesia
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- Sarangani Energy Corporation, Philippines
- Sical Logistics Limited - India
- Wilmar Investment Holdings
- Australian Commodity Traders Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Chettinad Cement Corporation Ltd - India
- Deloitte Consulting - India
- Iligan Light & Power Inc, Philippines
- The University of Queensland
- Sakthi Sugars Limited - India
- Holcim Trading Pte Ltd - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Oil Corporation Limited
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining and Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Singapore Mercantile Exchange
- Kumho Petrochemical, South Korea
- Kobexindo Tractors - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Bharathi Cement Corporation - India
- Cement Manufacturers Association - India
- Bulk Trading Sa - Switzerland
- Coalindo Energy - Indonesia
- Indonesian Coal Mining Association
- Goldman Sachs - Singapore
- Port Waratah Coal Services - Australia
- Kapuas Tunggal Persada - Indonesia
- India Bulls Power Limited - India
- Lanco Infratech Ltd - India
- Ministry of Transport, Egypt
- IHS Mccloskey Coal Group - USA
- Larsen & Toubro Limited - India
- Ministry of Finance - Indonesia
- Indo Tambangraya Megah - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petron Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Leighton Contractors Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhatia International Limited - India
- Antam Resourcindo - Indonesia
- Malabar Cements Ltd - India
- Sojitz Corporation - Japan
- Thai Mozambique Logistica
- Indogreen Group - Indonesia
- GVK Power & Infra Limited - India
- Binh Thuan Hamico - Vietnam
- Maharashtra Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Sree Jayajothi Cements Limited - India
- New Zealand Coal & Carbon
- Independent Power Producers Association of India
- Therma Luzon, Inc, Philippines
- Georgia Ports Authority, United States
- Cigading International Bulk Terminal - Indonesia
- Thiess Contractors Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- The Treasury - Australian Government
- Neyveli Lignite Corporation Ltd, - India
- Renaissance Capital - South Africa
- Sindya Power Generating Company Private Ltd
- Alfred C Toepfer International GmbH - Germany
- Coastal Gujarat Power Limited - India
- The State Trading Corporation of India Ltd
- ASAPP Information Group - India
- SMC Global Power, Philippines
- Metalloyd Limited - United Kingdom
- Bhoruka Overseas - Indonesia
- Energy Development Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
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