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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, 13 October 21
FBX INDEX: THE IMPOSSIBILITY OF SHORT-TERM FORECASTING - LARS JENSEN
Will freight rates on Asia-Europe or the Transpacific reach 40.000 USD/FFE in the run-up prior to Chinese New Year 2022? Or will they start droppin ...
Wednesday, 13 October 21
CHINA FLOODS: COAL PRICE HITS FRESH HIGH AS MINES SHUT - BBC
The price of coal used in China’s power plants has surged to a new record high as another of the country’s key mining regions is hit by ...
Tuesday, 12 October 21
BUMA SIGNS CONDITIONAL AGREEMENT FOR AUSTRALIAN ASSET ACQUISITION
PT Tbk. announced that its subsidiary, PT Bukit Makmur Mandiri Utama, through its newly incorporated Australian subsidiary, BUMA International Pty ...
Tuesday, 12 October 21
INDONESIA'S COAL-BASED POWER PLANTS ARE SUBJECT TO CARBON TAX NEXT YEAR, ELECTRICITY COSTS COULD RISE! - CNBC
The Indonesian government is planning plans to implement a carbon tax of IDR 30 per kilogram (kg) of carbon dioxide equivalent (CO2e) or equivalent ...
Monday, 11 October 21
COAL ABANDONMENT IN POWER GENERATION PROMOTED GAS DEMAND GROWTH IN EUROPE - TOP MANAGER: TASS
Accelerated abandonment of coal in power generation and the overall recovery of economic activity facilitated gas demand growth in Europe and led t ...
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- Interocean Group of Companies - India
- Kalimantan Lumbung Energi - Indonesia
- Kumho Petrochemical, South Korea
- Binh Thuan Hamico - Vietnam
- Georgia Ports Authority, United States
- Orica Mining Services - Indonesia
- Manunggal Multi Energi - Indonesia
- Banpu Public Company Limited - Thailand
- Salva Resources Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- Indian Oil Corporation Limited
- Ceylon Electricity Board - Sri Lanka
- Heidelberg Cement - Germany
- Cigading International Bulk Terminal - Indonesia
- Altura Mining Limited, Indonesia
- The Treasury - Australian Government
- Renaissance Capital - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- New Zealand Coal & Carbon
- GN Power Mariveles Coal Plant, Philippines
- Mercator Lines Limited - India
- Jindal Steel & Power Ltd - India
- ASAPP Information Group - India
- Ministry of Mines - Canada
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- MS Steel International - UAE
- SN Aboitiz Power Inc, Philippines
- Indonesian Coal Mining Association
- OPG Power Generation Pvt Ltd - India
- Ministry of Transport, Egypt
- Trasteel International SA, Italy
- Electricity Generating Authority of Thailand
- Mintek Dendrill Indonesia
- Edison Trading Spa - Italy
- Kepco SPC Power Corporation, Philippines
- Thai Mozambique Logistica
- Tamil Nadu electricity Board
- Rashtriya Ispat Nigam Limited - India
- Africa Commodities Group - South Africa
- Australian Coal Association
- Thiess Contractors Indonesia
- South Luzon Thermal Energy Corporation
- Romanian Commodities Exchange
- Therma Luzon, Inc, Philippines
- Carbofer General Trading SA - India
- Borneo Indobara - Indonesia
- Central Electricity Authority - India
- Siam City Cement - Thailand
- European Bulk Services B.V. - Netherlands
- Global Green Power PLC Corporation, Philippines
- Dalmia Cement Bharat India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Java Power - Indonesia
- ICICI Bank Limited - India
- Ambuja Cements Ltd - India
- Bhushan Steel Limited - India
- Kobexindo Tractors - Indoneisa
- Electricity Authority, New Zealand
- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- Parliament of New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CNBM International Corporation - China
- The University of Queensland
- Bukit Asam (Persero) Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Essar Steel Hazira Ltd - India
- Chettinad Cement Corporation Ltd - India
- Madhucon Powers Ltd - India
- Meralco Power Generation, Philippines
- Coastal Gujarat Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Australian Commodity Traders Exchange
- Sinarmas Energy and Mining - Indonesia
- Energy Link Ltd, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Latin American Coal - Colombia
- Barasentosa Lestari - Indonesia
- VISA Power Limited - India
- Riau Bara Harum - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Attock Cement Pakistan Limited
- Toyota Tsusho Corporation, Japan
- Bukit Makmur.PT - Indonesia
- Anglo American - United Kingdom
- Directorate Of Revenue Intelligence - India
- CIMB Investment Bank - Malaysia
- International Coal Ventures Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Marubeni Corporation - India
- AsiaOL BioFuels Corp., Philippines
- Indo Tambangraya Megah - Indonesia
- Orica Australia Pty. Ltd.
- LBH Netherlands Bv - Netherlands
- Singapore Mercantile Exchange
- Petron Corporation, Philippines
- Port Waratah Coal Services - Australia
- Posco Energy - South Korea
- Oldendorff Carriers - Singapore
- Sical Logistics Limited - India
- Parry Sugars Refinery, India
- Vedanta Resources Plc - India
- Minerals Council of Australia
- Eastern Coal Council - USA
- Ind-Barath Power Infra Limited - India
- GMR Energy Limited - India
- Deloitte Consulting - India
- PNOC Exploration Corporation - Philippines
- Merrill Lynch Commodities Europe
- San Jose City I Power Corp, Philippines
- Intertek Mineral Services - Indonesia
- IHS Mccloskey Coal Group - USA
- Bhatia International Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Mjunction Services Limited - India
- Indika Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- SMC Global Power, Philippines
- Kaltim Prima Coal - Indonesia
- Grasim Industreis Ltd - India
- Baramulti Group, Indonesia
- Antam Resourcindo - Indonesia
- Siam City Cement PLC, Thailand
- Sojitz Corporation - Japan
- Jorong Barutama Greston.PT - Indonesia
- Bulk Trading Sa - Switzerland
- PowerSource Philippines DevCo
- Krishnapatnam Port Company Ltd. - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Xindia Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Indian Energy Exchange, India
- McConnell Dowell - Australia
- Semirara Mining Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Timah Investasi Mineral - Indoneisa
- Energy Development Corp, Philippines
- Goldman Sachs - Singapore
- Bharathi Cement Corporation - India
- Sindya Power Generating Company Private Ltd
- Sree Jayajothi Cements Limited - India
- IEA Clean Coal Centre - UK
- Kohat Cement Company Ltd. - Pakistan
- SMG Consultants - Indonesia
- Malabar Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Business Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Vizag Seaport Private Limited - India
- Lanco Infratech Ltd - India
- Sarangani Energy Corporation, Philippines
- Chamber of Mines of South Africa
- London Commodity Brokers - England
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Billiton Holdings Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Straits Asia Resources Limited - Singapore
- Makarim & Taira - Indonesia
- Wood Mackenzie - Singapore
- Videocon Industries ltd - India
- Mercuria Energy - Indonesia
- Aditya Birla Group - India
- Wilmar Investment Holdings
- Bhoruka Overseas - Indonesia
- Agrawal Coal Company - India
- Ministry of Finance - Indonesia
- Sakthi Sugars Limited - India
- Commonwealth Bank - Australia
- Independent Power Producers Association of India
- Kideco Jaya Agung - Indonesia
- Iligan Light & Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- GVK Power & Infra Limited - India
- Tata Chemicals Ltd - India
- The State Trading Corporation of India Ltd
- PTC India Limited - India
- Price Waterhouse Coopers - Russia
- Aboitiz Power Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Karaikal Port Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Formosa Plastics Group - Taiwan
- Metalloyd Limited - United Kingdom
- Star Paper Mills Limited - India
- Kapuas Tunggal Persada - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Uttam Galva Steels Limited - India
- Indogreen Group - Indonesia
- Larsen & Toubro Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Bukit Baiduri Energy - Indonesia
- Planning Commission, India
- Coalindo Energy - Indonesia
- Standard Chartered Bank - UAE
- Gujarat Sidhee Cement - India
- Eastern Energy - Thailand
- Bangladesh Power Developement Board
- Meenaskhi Energy Private Limited - India
- Cement Manufacturers Association - India
- Coal and Oil Company - UAE
- Power Finance Corporation Ltd., India
- India Bulls Power Limited - India
- Medco Energi Mining Internasional
- Economic Council, Georgia
- White Energy Company Limited
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