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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, 01 December 21
SUPPLY OF COAL TO POWER PLANTS IN NOV MORE THAN CONSUMPTION: JOSHI - PTI
The supply of coal to power plants in November is more than the consumption, resulting in rise in stock of dry fuel at power plants, and this trend ...
Wednesday, 01 December 21
MARKET INSIGHT - INTERMODAL
Essentially, anyone involved in the shipping and commodity markets still struggle with commodity supply issues and skyrocketing prices in the conte ...
Tuesday, 30 November 21
CHINA'S TOP ECONOMIC PLANNER SUMMONS COAL PRODUCERS; LONG-TERM PRICING MECHANISM IS ADVISED - GLOBAL TIMES
China’s top economic planner the National Development and Reform Commission (NDRC) said on Monday that they summoned coal producers for a hea ...
Tuesday, 30 November 21
CHINA'S COAL PRICES PLUNGE AFTER GOVT SIGNALS MORE PRICE REGULATION - REUTERS
China’s thermal coal futures dropped 5.6% on Monday after the state economic planner signaled further regulations for prices of the dirty pow ...
Friday, 26 November 21
AS COAL MARKET STABILIZES, CHINA STEPS UP NATURAL GAS SUPPLY TO MEET WINTER DEMAND - GLOBAL TIMES
The daily supply of natural gas in China has exceeded 1 billion cubic meters (bcm) since November began, up 11 percent year-on-year, data from stat ...
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- Carbofer General Trading SA - India
- Economic Council, Georgia
- Gujarat Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- PTC India Limited - India
- Eastern Coal Council - USA
- Indian Oil Corporation Limited
- Bhushan Steel Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Coalindo Energy - Indonesia
- SMG Consultants - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Alfred C Toepfer International GmbH - Germany
- Standard Chartered Bank - UAE
- Kaltim Prima Coal - Indonesia
- Africa Commodities Group - South Africa
- Posco Energy - South Korea
- Aditya Birla Group - India
- Bhatia International Limited - India
- Wood Mackenzie - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- PNOC Exploration Corporation - Philippines
- Interocean Group of Companies - India
- Indika Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Latin American Coal - Colombia
- White Energy Company Limited
- Billiton Holdings Pty Ltd - Australia
- Minerals Council of Australia
- Price Waterhouse Coopers - Russia
- Orica Australia Pty. Ltd.
- Tamil Nadu electricity Board
- Ministry of Mines - Canada
- Larsen & Toubro Limited - India
- LBH Netherlands Bv - Netherlands
- The State Trading Corporation of India Ltd
- Agrawal Coal Company - India
- CNBM International Corporation - China
- Bulk Trading Sa - Switzerland
- IEA Clean Coal Centre - UK
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- Commonwealth Bank - Australia
- Jorong Barutama Greston.PT - Indonesia
- Global Business Power Corporation, Philippines
- Thiess Contractors Indonesia
- Kumho Petrochemical, South Korea
- Chamber of Mines of South Africa
- Uttam Galva Steels Limited - India
- PowerSource Philippines DevCo
- Sical Logistics Limited - India
- Semirara Mining Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Electricity Authority, New Zealand
- Meenaskhi Energy Private Limited - India
- Parry Sugars Refinery, India
- Makarim & Taira - Indonesia
- Coal and Oil Company - UAE
- Singapore Mercantile Exchange
- McConnell Dowell - Australia
- Chettinad Cement Corporation Ltd - India
- Meralco Power Generation, Philippines
- Ministry of Finance - Indonesia
- Intertek Mineral Services - Indonesia
- Jindal Steel & Power Ltd - India
- Power Finance Corporation Ltd., India
- Toyota Tsusho Corporation, Japan
- Barasentosa Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- Dalmia Cement Bharat India
- SN Aboitiz Power Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Energy - Thailand
- GN Power Mariveles Coal Plant, Philippines
- London Commodity Brokers - England
- Bukit Makmur.PT - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parliament of New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Australian Commodity Traders Exchange
- Indogreen Group - Indonesia
- SMC Global Power, Philippines
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Sidhee Cement - India
- South Luzon Thermal Energy Corporation
- Star Paper Mills Limited - India
- Cement Manufacturers Association - India
- Cigading International Bulk Terminal - Indonesia
- Central Java Power - Indonesia
- Wilmar Investment Holdings
- Kobexindo Tractors - Indoneisa
- Oldendorff Carriers - Singapore
- Sakthi Sugars Limited - India
- Mintek Dendrill Indonesia
- Riau Bara Harum - Indonesia
- Antam Resourcindo - Indonesia
- Romanian Commodities Exchange
- Semirara Mining and Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Edison Trading Spa - Italy
- Marubeni Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhoruka Overseas - Indonesia
- India Bulls Power Limited - India
- Formosa Plastics Group - Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Georgia Ports Authority, United States
- Aboitiz Power Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Globalindo Alam Lestari - Indonesia
- Renaissance Capital - South Africa
- International Coal Ventures Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- GAC Shipping (India) Pvt Ltd
- Therma Luzon, Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Simpson Spence & Young - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Lanco Infratech Ltd - India
- TeaM Sual Corporation - Philippines
- GVK Power & Infra Limited - India
- Essar Steel Hazira Ltd - India
- Australian Coal Association
- Sree Jayajothi Cements Limited - India
- Ambuja Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Orica Mining Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Kideco Jaya Agung - Indonesia
- The University of Queensland
- Binh Thuan Hamico - Vietnam
- Kartika Selabumi Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Goldman Sachs - Singapore
- Bukit Baiduri Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Xindia Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Rio Tinto Coal - Australia
- Sojitz Corporation - Japan
- Vizag Seaport Private Limited - India
- Samtan Co., Ltd - South Korea
- Energy Development Corp, Philippines
- Sindya Power Generating Company Private Ltd
- San Jose City I Power Corp, Philippines
- Bharathi Cement Corporation - India
- Kepco SPC Power Corporation, Philippines
- Ministry of Transport, Egypt
- Sinarmas Energy and Mining - Indonesia
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coastal Gujarat Power Limited - India
- Jaiprakash Power Ventures ltd
- Independent Power Producers Association of India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Heidelberg Cement - Germany
- Merrill Lynch Commodities Europe
- Grasim Industreis Ltd - India
- Tata Chemicals Ltd - India
- Maheswari Brothers Coal Limited - India
- Straits Asia Resources Limited - Singapore
- Ceylon Electricity Board - Sri Lanka
- Central Electricity Authority - India
- Global Coal Blending Company Limited - Australia
- Bangladesh Power Developement Board
- Planning Commission, India
- ICICI Bank Limited - India
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- New Zealand Coal & Carbon
- The Treasury - Australian Government
- Petron Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Siam City Cement - Thailand
- Bayan Resources Tbk. - Indonesia
- Ind-Barath Power Infra Limited - India
- Attock Cement Pakistan Limited
- Baramulti Group, Indonesia
- Borneo Indobara - Indonesia
- Mjunction Services Limited - India
- OPG Power Generation Pvt Ltd - India
- VISA Power Limited - India
- Global Green Power PLC Corporation, Philippines
- MS Steel International - UAE
- Port Waratah Coal Services - Australia
- Malabar Cements Ltd - India
- Vedanta Resources Plc - India
- Thai Mozambique Logistica
- ASAPP Information Group - India
- Savvy Resources Ltd - HongKong
- Mercuria Energy - Indonesia
- Videocon Industries ltd - India
- Krishnapatnam Port Company Ltd. - India
- Gujarat Mineral Development Corp Ltd - India
- Deloitte Consulting - India
- Miang Besar Coal Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Trasteel International SA, Italy
- Madhucon Powers Ltd - India
- Mercator Lines Limited - India
- Medco Energi Mining Internasional
- Electricity Generating Authority of Thailand
- Anglo American - United Kingdom
- Sarangani Energy Corporation, Philippines
- Energy Link Ltd, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
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