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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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- Minerals Council of Australia
- PTC India Limited - India
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- Meenaskhi Energy Private Limited - India
- Malabar Cements Ltd - India
- Cement Manufacturers Association - India
- White Energy Company Limited
- Coal and Oil Company - UAE
- SN Aboitiz Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parliament of New Zealand
- Banpu Public Company Limited - Thailand
- Thiess Contractors Indonesia
- Manunggal Multi Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Dalmia Cement Bharat India
- Vijayanagar Sugar Pvt Ltd - India
- Romanian Commodities Exchange
- Karaikal Port Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- CNBM International Corporation - China
- Sarangani Energy Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Sical Logistics Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Antam Resourcindo - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Anglo American - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tata Chemicals Ltd - India
- Georgia Ports Authority, United States
- Renaissance Capital - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- GVK Power & Infra Limited - India
- Star Paper Mills Limited - India
- CIMB Investment Bank - Malaysia
- Chettinad Cement Corporation Ltd - India
- Intertek Mineral Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Port Waratah Coal Services - Australia
- Larsen & Toubro Limited - India
- Timah Investasi Mineral - Indoneisa
- Jaiprakash Power Ventures ltd
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- PNOC Exploration Corporation - Philippines
- Indian Energy Exchange, India
- Madhucon Powers Ltd - India
- Commonwealth Bank - Australia
- Formosa Plastics Group - Taiwan
- Sindya Power Generating Company Private Ltd
- Metalloyd Limited - United Kingdom
- Indika Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- Aditya Birla Group - India
- Billiton Holdings Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Bulk Trading Sa - Switzerland
- Gujarat Sidhee Cement - India
- Altura Mining Limited, Indonesia
- Kumho Petrochemical, South Korea
- Independent Power Producers Association of India
- International Coal Ventures Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Sojitz Corporation - Japan
- Interocean Group of Companies - India
- Ind-Barath Power Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Energy Link Ltd, New Zealand
- Pendopo Energi Batubara - Indonesia
- Ambuja Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Tamil Nadu electricity Board
- Krishnapatnam Port Company Ltd. - India
- The Treasury - Australian Government
- Goldman Sachs - Singapore
- The State Trading Corporation of India Ltd
- Mjunction Services Limited - India
- Indo Tambangraya Megah - Indonesia
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- MS Steel International - UAE
- Kaltim Prima Coal - Indonesia
- Carbofer General Trading SA - India
- Kepco SPC Power Corporation, Philippines
- Edison Trading Spa - Italy
- Kartika Selabumi Mining - Indonesia
- Standard Chartered Bank - UAE
- Jindal Steel & Power Ltd - India
- SMG Consultants - Indonesia
- Central Electricity Authority - India
- Power Finance Corporation Ltd., India
- Maheswari Brothers Coal Limited - India
- Bhoruka Overseas - Indonesia
- Bhatia International Limited - India
- Videocon Industries ltd - India
- Makarim & Taira - Indonesia
- Xindia Steels Limited - India
- Meralco Power Generation, Philippines
- Vedanta Resources Plc - India
- Ministry of Finance - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- GAC Shipping (India) Pvt Ltd
- Chamber of Mines of South Africa
- Sinarmas Energy and Mining - Indonesia
- Singapore Mercantile Exchange
- Kohat Cement Company Ltd. - Pakistan
- Mercator Lines Limited - India
- Ceylon Electricity Board - Sri Lanka
- Karbindo Abesyapradhi - Indoneisa
- Global Coal Blending Company Limited - Australia
- Kobexindo Tractors - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Agrawal Coal Company - India
- Thai Mozambique Logistica
- Asmin Koalindo Tuhup - Indonesia
- LBH Netherlands Bv - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Rio Tinto Coal - Australia
- Merrill Lynch Commodities Europe
- Straits Asia Resources Limited - Singapore
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- Sakthi Sugars Limited - India
- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- Bukit Makmur.PT - Indonesia
- Central Java Power - Indonesia
- Indonesian Coal Mining Association
- Bahari Cakrawala Sebuku - Indonesia
- Uttam Galva Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Deloitte Consulting - India
- Latin American Coal - Colombia
- San Jose City I Power Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Coalindo Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bangladesh Power Developement Board
- SMC Global Power, Philippines
- Attock Cement Pakistan Limited
- Binh Thuan Hamico - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- India Bulls Power Limited - India
- Therma Luzon, Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Bukit Baiduri Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Posco Energy - South Korea
- Bayan Resources Tbk. - Indonesia
- Australian Commodity Traders Exchange
- European Bulk Services B.V. - Netherlands
- Oldendorff Carriers - Singapore
- Electricity Authority, New Zealand
- Ministry of Transport, Egypt
- Eastern Energy - Thailand
- Samtan Co., Ltd - South Korea
- Mintek Dendrill Indonesia
- London Commodity Brokers - England
- Bukit Asam (Persero) Tbk - Indonesia
- Grasim Industreis Ltd - India
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- The University of Queensland
- McConnell Dowell - Australia
- Trasteel International SA, Italy
- Global Green Power PLC Corporation, Philippines
- Indian Oil Corporation Limited
- Riau Bara Harum - Indonesia
- Lanco Infratech Ltd - India
- Global Business Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Semirara Mining Corp, Philippines
- Indogreen Group - Indonesia
- New Zealand Coal & Carbon
- Ministry of Mines - Canada
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Globalindo Alam Lestari - Indonesia
- Orica Mining Services - Indonesia
- Siam City Cement - Thailand
- VISA Power Limited - India
- Marubeni Corporation - India
- Economic Council, Georgia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Development Corp, Philippines
- ASAPP Information Group - India
- Wood Mackenzie - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Bhushan Steel Limited - India
- ICICI Bank Limited - India
- Borneo Indobara - Indonesia
- Planning Commission, India
- Australian Coal Association
- Baramulti Group, Indonesia
- PowerSource Philippines DevCo
- Toyota Tsusho Corporation, Japan
- Simpson Spence & Young - Indonesia
- Petron Corporation, Philippines
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