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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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Monday, 01 November 21
COAL PRICES HAVE FURTHER ROOM TO DROP: TOP ECONOMIC PLANNER - GLOBAL TIMES
China’s top economic planner said coal prices have further room to drop on Friday, as the most traded coal futures dropped to below 1,000 yua ...
Saturday, 30 October 21
CHINA'S COAL PRICES SEE BIGGEST WEEKLY FALL IN MORE THAN 5 YEARS - REUTERS
China’s coal futures prices saw their biggest fall in more than five years after the powerful state planner said there is still room to adjus ...
Saturday, 30 October 21
G-20 LEADERS PREPARE STATEMENT TO STOP FUNDING FOREIGN COAL PLANTS - BLOOMBERG
Leaders of the Group of 20 wealthy economies are preparing to pledge to stop funding foreign coal-fired plants, but are still wrangling over climat ...
Friday, 29 October 21
APAC THERMAL COAL SUPPLY TO REMAIN TIGHT AS WINTER LOOMS - FITCH RATINGS
APAC thermal coal prices have surged, hitting historically high levels. The benchmark Newcastle 6,000kcal/kg grade coal reached USD228/tonne in mid ...
Thursday, 28 October 21
CANADA BAN ON SHIPPING COAL WOULD EQUAL SCRAPPING AS MANY AS 3 MILLION CARS - IEEFA
Canada ban on shipping coal would equal scrapping as many as 3 million cars
Change in Canadian policy could have major implications ...
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- Indonesian Coal Mining Association
- Power Finance Corporation Ltd., India
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- Rashtriya Ispat Nigam Limited - India
- Directorate General of MIneral and Coal - Indonesia
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- Electricity Generating Authority of Thailand
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- Chamber of Mines of South Africa
- Simpson Spence & Young - Indonesia
- Agrawal Coal Company - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Mines - Canada
- McConnell Dowell - Australia
- Global Coal Blending Company Limited - Australia
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- Oldendorff Carriers - Singapore
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- Asmin Koalindo Tuhup - Indonesia
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- ICICI Bank Limited - India
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- Siam City Cement PLC, Thailand
- GAC Shipping (India) Pvt Ltd
- GN Power Mariveles Coal Plant, Philippines
- Eastern Coal Council - USA
- Jaiprakash Power Ventures ltd
- Eastern Energy - Thailand
- Kapuas Tunggal Persada - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Finance - Indonesia
- Minerals Council of Australia
- GVK Power & Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Gujarat Sidhee Cement - India
- SMC Global Power, Philippines
- The University of Queensland
- AsiaOL BioFuels Corp., Philippines
- Cement Manufacturers Association - India
- Kohat Cement Company Ltd. - Pakistan
- Meenaskhi Energy Private Limited - India
- Georgia Ports Authority, United States
- Bharathi Cement Corporation - India
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- Medco Energi Mining Internasional
- Central Electricity Authority - India
- Maheswari Brothers Coal Limited - India
- Salva Resources Pvt Ltd - India
- Anglo American - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Economic Council, Georgia
- The State Trading Corporation of India Ltd
- Savvy Resources Ltd - HongKong
- Metalloyd Limited - United Kingdom
- European Bulk Services B.V. - Netherlands
- Baramulti Group, Indonesia
- IEA Clean Coal Centre - UK
- Bhatia International Limited - India
- London Commodity Brokers - England
- Makarim & Taira - Indonesia
- Mercuria Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Tamil Nadu electricity Board
- Toyota Tsusho Corporation, Japan
- Straits Asia Resources Limited - Singapore
- SMG Consultants - Indonesia
- Central Java Power - Indonesia
- Electricity Authority, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- Sindya Power Generating Company Private Ltd
- Indian Oil Corporation Limited
- Ambuja Cements Ltd - India
- Grasim Industreis Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Petron Corporation, Philippines
- Bhushan Steel Limited - India
- Ministry of Transport, Egypt
- Riau Bara Harum - Indonesia
- CNBM International Corporation - China
- Kumho Petrochemical, South Korea
- Semirara Mining and Power Corporation, Philippines
- Attock Cement Pakistan Limited
- SN Aboitiz Power Inc, Philippines
- Dalmia Cement Bharat India
- Karbindo Abesyapradhi - Indoneisa
- Sarangani Energy Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Thai Mozambique Logistica
- Bulk Trading Sa - Switzerland
- Bahari Cakrawala Sebuku - Indonesia
- Romanian Commodities Exchange
- Barasentosa Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- ASAPP Information Group - India
- Marubeni Corporation - India
- Meralco Power Generation, Philippines
- TeaM Sual Corporation - Philippines
- Bangladesh Power Developement Board
- Indian Energy Exchange, India
- Aboitiz Power Corporation - Philippines
- Heidelberg Cement - Germany
- Coastal Gujarat Power Limited - India
- Singapore Mercantile Exchange
- Global Business Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- CIMB Investment Bank - Malaysia
- Coal and Oil Company - UAE
- Madhucon Powers Ltd - India
- Latin American Coal - Colombia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- International Coal Ventures Pvt Ltd - India
- Siam City Cement - Thailand
- Banpu Public Company Limited - Thailand
- OPG Power Generation Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Standard Chartered Bank - UAE
- Gujarat Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- Parry Sugars Refinery, India
- Antam Resourcindo - Indonesia
- Independent Power Producers Association of India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Development Corp, Philippines
- Merrill Lynch Commodities Europe
- Mintek Dendrill Indonesia
- LBH Netherlands Bv - Netherlands
- VISA Power Limited - India
- Borneo Indobara - Indonesia
- Intertek Mineral Services - Indonesia
- Aditya Birla Group - India
- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- Neyveli Lignite Corporation Ltd, - India
- Commonwealth Bank - Australia
- Kepco SPC Power Corporation, Philippines
- PowerSource Philippines DevCo
- Vedanta Resources Plc - India
- San Jose City I Power Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Lanco Infratech Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- PNOC Exploration Corporation - Philippines
- Altura Mining Limited, Indonesia
- Sojitz Corporation - Japan
- GMR Energy Limited - India
- Orica Australia Pty. Ltd.
- Bayan Resources Tbk. - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Malabar Cements Ltd - India
- Parliament of New Zealand
- Interocean Group of Companies - India
- Formosa Plastics Group - Taiwan
- Orica Mining Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Rio Tinto Coal - Australia
- Energy Link Ltd, New Zealand
- Uttam Galva Steels Limited - India
- PTC India Limited - India
- Goldman Sachs - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Trasteel International SA, Italy
- Binh Thuan Hamico - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- New Zealand Coal & Carbon
- White Energy Company Limited
- Star Paper Mills Limited - India
- Bukit Baiduri Energy - Indonesia
- Indika Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- Australian Coal Association
- Bhoruka Overseas - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- India Bulls Power Limited - India
- Vizag Seaport Private Limited - India
- Planning Commission, India
- IHS Mccloskey Coal Group - USA
- Samtan Co., Ltd - South Korea
- Deloitte Consulting - India
- Xindia Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Thiess Contractors Indonesia
- Indogreen Group - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Chettinad Cement Corporation Ltd - India
- Tata Chemicals Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Sical Logistics Limited - India
- Therma Luzon, Inc, Philippines
- Coalindo Energy - Indonesia
- Carbofer General Trading SA - India
- Price Waterhouse Coopers - Russia
- Australian Commodity Traders Exchange
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