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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, 11 November 21
ASIA COAL POWER PIPELINE TO SHRINK BY TWO THIRDS AFTER CHINA FINANCE CUT - REUTERS
Asia’s pipeline of proposed coal-fired power plants is expected to shrink from 65 gigawatts to 22 gigawatts following China’s pledge to ...
Tuesday, 09 November 21
ASIA-PACIFIC IS HOME TO SOME OF THE WORLD'S LARGEST CARBON-EMITTERS - 2 CHARTS SHOW ITS RELIANCE ON COAL - CNBC
Asia-Pacific is home to some of the world’s largest carbon emitters — and experts say much of global efforts to fight climate change de ...
Tuesday, 09 November 21
CHINA DAILY COAL OUTPUT HITS MULTI-YEAR PEAK, PRICES EXPECTED TO FALL - REUTERS
China’s daily coal output hit 11.93 million tonnes last week, a multi-year high as more capacity returned to operation, the state planner sai ...
Thursday, 04 November 21
CHINA'S COAL MARKET SEES SIGNIFICANT IMPROVEMENTS: NDRC - GLOBAL TIMES
China’s top economic planner has declared initial success in its efforts to ensure coal supply and stabilize prices, saying that daily coal o ...
Thursday, 04 November 21
CHINA THERMAL COAL PRICES RISE AFTER FALLING FOR 10 DAYS - REUTERS
China thermal coal futures rebounded on Wednesday after falling for 10 days on an expected jump in fuel demand to meet heating needs amid forecasts ...
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- Miang Besar Coal Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- The Treasury - Australian Government
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Formosa Plastics Group - Taiwan
- GAC Shipping (India) Pvt Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Aditya Birla Group - India
- Asmin Koalindo Tuhup - Indonesia
- Timah Investasi Mineral - Indoneisa
- Electricity Authority, New Zealand
- Standard Chartered Bank - UAE
- AsiaOL BioFuels Corp., Philippines
- Interocean Group of Companies - India
- Coal and Oil Company - UAE
- Port Waratah Coal Services - Australia
- GMR Energy Limited - India
- Oldendorff Carriers - Singapore
- Cigading International Bulk Terminal - Indonesia
- Ministry of Transport, Egypt
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- London Commodity Brokers - England
- Edison Trading Spa - Italy
- Ministry of Finance - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Baramulti Group, Indonesia
- ICICI Bank Limited - India
- Bharathi Cement Corporation - India
- Africa Commodities Group - South Africa
- Binh Thuan Hamico - Vietnam
- Romanian Commodities Exchange
- Gujarat Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Intertek Mineral Services - Indonesia
- New Zealand Coal & Carbon
- Attock Cement Pakistan Limited
- Australian Coal Association
- Kapuas Tunggal Persada - Indonesia
- SMC Global Power, Philippines
- Thiess Contractors Indonesia
- Renaissance Capital - South Africa
- Rio Tinto Coal - Australia
- Anglo American - United Kingdom
- Independent Power Producers Association of India
- Grasim Industreis Ltd - India
- IEA Clean Coal Centre - UK
- Planning Commission, India
- Meenaskhi Energy Private Limited - India
- Goldman Sachs - Singapore
- European Bulk Services B.V. - Netherlands
- Dalmia Cement Bharat India
- Rashtriya Ispat Nigam Limited - India
- Gujarat Sidhee Cement - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wood Mackenzie - Singapore
- Siam City Cement PLC, Thailand
- Georgia Ports Authority, United States
- San Jose City I Power Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Bayan Resources Tbk. - Indonesia
- Economic Council, Georgia
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- Samtan Co., Ltd - South Korea
- Siam City Cement - Thailand
- The State Trading Corporation of India Ltd
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- Karbindo Abesyapradhi - Indoneisa
- Indian Oil Corporation Limited
- Deloitte Consulting - India
- Meralco Power Generation, Philippines
- Therma Luzon, Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- VISA Power Limited - India
- Bukit Makmur.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Aboitiz Power Corporation - Philippines
- Sical Logistics Limited - India
- Vizag Seaport Private Limited - India
- Manunggal Multi Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Semirara Mining Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Maheswari Brothers Coal Limited - India
- PowerSource Philippines DevCo
- GVK Power & Infra Limited - India
- Essar Steel Hazira Ltd - India
- Madhucon Powers Ltd - India
- Medco Energi Mining Internasional
- Xindia Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Mercator Lines Limited - India
- Ind-Barath Power Infra Limited - India
- Iligan Light & Power Inc, Philippines
- Carbofer General Trading SA - India
- Holcim Trading Pte Ltd - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- The University of Queensland
- Chettinad Cement Corporation Ltd - India
- LBH Netherlands Bv - Netherlands
- Latin American Coal - Colombia
- Bukit Asam (Persero) Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- Eastern Coal Council - USA
- Indonesian Coal Mining Association
- Kepco SPC Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Marubeni Corporation - India
- Indogreen Group - Indonesia
- Banpu Public Company Limited - Thailand
- Sojitz Corporation - Japan
- IHS Mccloskey Coal Group - USA
- Jaiprakash Power Ventures ltd
- ASAPP Information Group - India
- Parliament of New Zealand
- Indian Energy Exchange, India
- Alfred C Toepfer International GmbH - Germany
- Coalindo Energy - Indonesia
- Cement Manufacturers Association - India
- Kartika Selabumi Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Merrill Lynch Commodities Europe
- Wilmar Investment Holdings
- Makarim & Taira - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Agrawal Coal Company - India
- PetroVietnam Power Coal Import and Supply Company
- Bangladesh Power Developement Board
- Star Paper Mills Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Antam Resourcindo - Indonesia
- Orica Australia Pty. Ltd.
- Central Electricity Authority - India
- Power Finance Corporation Ltd., India
- MS Steel International - UAE
- Central Java Power - Indonesia
- Kumho Petrochemical, South Korea
- Savvy Resources Ltd - HongKong
- Global Business Power Corporation, Philippines
- Ambuja Cements Ltd - India
- PTC India Limited - India
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- Minerals Council of Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Malabar Cements Ltd - India
- Chamber of Mines of South Africa
- Mjunction Services Limited - India
- South Luzon Thermal Energy Corporation
- Indika Energy - Indonesia
- Electricity Generating Authority of Thailand
- India Bulls Power Limited - India
- White Energy Company Limited
- Maharashtra Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Altura Mining Limited, Indonesia
- Larsen & Toubro Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Tamil Nadu electricity Board
- Lanco Infratech Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Riau Bara Harum - Indonesia
- Directorate Of Revenue Intelligence - India
- Kideco Jaya Agung - Indonesia
- Sarangani Energy Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- McConnell Dowell - Australia
- Energy Link Ltd, New Zealand
- Trasteel International SA, Italy
- Mintek Dendrill Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Posco Energy - South Korea
- Billiton Holdings Pty Ltd - Australia
- Singapore Mercantile Exchange
- Australian Commodity Traders Exchange
- Heidelberg Cement - Germany
- Bukit Baiduri Energy - Indonesia
- Videocon Industries ltd - India
- TeaM Sual Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Petron Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bhatia International Limited - India
- Indo Tambangraya Megah - Indonesia
- SN Aboitiz Power Inc, Philippines
- Commonwealth Bank - Australia
- Thai Mozambique Logistica
- Kobexindo Tractors - Indoneisa
- Orica Mining Services - Indonesia
- Bhoruka Overseas - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jindal Steel & Power Ltd - India
- Globalindo Alam Lestari - Indonesia
- SMG Consultants - Indonesia
- Salva Resources Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Pendopo Energi Batubara - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Vedanta Resources Plc - India
- Global Green Power PLC Corporation, Philippines
- CNBM International Corporation - China
- Borneo Indobara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Uttam Galva Steels Limited - India
- Energy Development Corp, Philippines
- CIMB Investment Bank - Malaysia
- Ministry of Mines - Canada
- Bhushan Steel Limited - India
- Price Waterhouse Coopers - Russia
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