News and analysis of the Indian Coal Sector which is an integral part of Indian Power Market
Tuesday, July 5, 2011
ICVL scouring mines in Australia
Chhatisgarh Hasdeo Arand coal mines in Environmental "No go" areas
The ministry of power has also urged the MoEF to take an early decision in view of the urgent requirement of coal from these blocks.
As many as 20 coal blocks have been identified by the Ranchibased Central Mine Planning & Design Institute Ltd. Of these, the environment ministry has received proposals for diversion of forest land for seven coalmines. Proposals of at least four mines- Paturiya-Gidhmuri, Nakiya-I&II, Madanpur (South) and Tara-were examined and rejected by the forest advisory committee because of the dense forest area and the presence of Sal trees.
State Chief Secretary Parampath Joy Oommen said that the Centre must take a comprehensive view on development and admitted that some environment impact could not avoided. He noted that a lot of time, money and energy had already gone into these projects, as forest clearance was one of the last milestones to cross in the development of a power project or coalmine. He said that the forest area in these coal blocks was hardly 2 per cent of the total forest area of the state and that the state had little option but to develop its mineral resources for economic growth.
Oommen suggested thirdparty verification and creation of a special fund for environment management.
Commenting on the issue, Union Power Secretary H.S. Brahma said that the protection of forest land on one hand and economic development on the other should be considered in tandem rather than in isolation. He sought an early decision on the coalmines in the Hasdeo-Arand area so that coal could be made available to the power sector and investment in capacity addition projects did not remain idle.
Friday, July 1, 2011
Adani captures coal deal with Linc Energy Australia
Thursday, June 23, 2011
NTPC may get more cancellation, warns Govt- ET
After cancelling five National Thermal Power Corporation (NTPC) coal blocks last week, the coal ministry is likely to warn the power company that two more of its fields would be deallocated, if it does not develop them immediately.
“We will soon send letters to NTPC, warning and directing them to develop Pakri Barwadih (Jharkhand) and Talaipalli (Chhattisgarh) coal blocks,” an official in the coal ministry said.
"Any further failure in development of the block(s) would lead to necessary action as per the terms and conditions of allocation, including deallocation of the coal blocks,” the official said. The estimated production capacity of Pakri-Barwadih block in North Karanpura coalfield in Jharkhand is 15 million tonne (Mt), while in the case of Talaipalli block in Mand-Raigarh coalfield in Chhattisgarh, it is 18 Mt. The geological reserves of Pakri-Barwadih is 1,436 Mt and for Tallaipalli it is 1,267 Mt.The coal ministry had issued show cause notices to the power major in September last year, asking it as to why its coal blocks should not be withdrawn for its failure to develop these within the stipulated time-frame.
In the notices, the ministry had said both the blocks weren’t developed despite the issue having being raised at the Prime Minister’s level in January, 2007. Pakri Barwadih was allotted to the public sector firm in 2004 and the production from this block was scheduled to start from 2008-09. Tallaipalli block was allocated to NTPC to feed its 4,000-Mw power projects which has to start production by March-end next year, according to the coal ministry.
A couple of days back the Coal Ministry had sent letters to Gondwana Ispat and Andhra Pradesh Development Corp warning that coal blocks allocated to them would be cancelled if they failed to develop them in time. The government had last month said that the panel set up by the Ministry to look into the process of deallocation of coal blocks had recommended issuing warnings to 29 coal and three lignite blocks allocatees for bringing their production at the earliest. The panel had also suggested cancellation of 14 coal blocks and one lignite block to six PSUs, including NTPC and three private firms for failing to develop the mines. As part of its deallocation drive, this year the government has deallocated coal blocks of various firms, including NTPC, Damodar Valley Corporation, Jharkhand State Electricity Board, Baidyanath Ayurved Bhavan, Andhra Pradesh Power Generation Corporation Limited, and Bhatia International Limited.
Indonesian imported coal price hike set to hurt and power tariff
The plea of the private power utilities comes at a time when Indonesia's -- the largest coal supplier to India -- mining laws are making it mandatory that coal prices be based on international market rate.
In a letter to Power Secretary P Uma Shankar, the 14-member Association of Power Producers (APP) has called for setting up of an "expert committee" to find an appropriate solution to price issues related to imported coal.
Apart from Reliance Power and Tata Power, other association members include Essar Power , Adani Power, GMR Energy and Jindal Power.
Many private utilities have won projects via competitive tariff-bidding route and the imported coal supply was based on bilateral agreements with fuel suppliers, mainly from Indonesia.
"Current contractual framework does not protect power companies from coal price changes triggered by any 'change in law' event in the coal exporting country," the letter written by AAP Director General Ashok Khurana said.
Similarly, Australia is planning to collect taxes on general additional revenues from exports of coal and iron ore as well as impose carbon tax on Australian coal production.
According to the letter, these laws would push coal prices by $ 20-25 per tonne.
India imports about 50 per cent of its imported coal from Indonesia and around five per cent from Australia.
The letter has said that there should be a suitable tariff structure that would "allow pass through of fuel prices to the power purchasers".
Out of the 43,000 MW capacity worth power projects awarded through competitive bidding, about 13,000 MW generation is dependent on imported coal.
Power project developers should get protection in the power purchase contracts for coal price changes triggered by legal and regulatory changes in coal exporting nations, the letter said.
The utilisation of imported coal is expected to rise in the coming years, especially since domestic coal production has slowed down mainly on account of environmental issues.
Tuesday, June 21, 2011
Status report sought on captive coal blocks by June end
Monday, June 20, 2011
NTPC coal block de-allocation issue hits a low
Thursday, June 16, 2011
Seven coal blocks identified for coal gasification
These include five lignite blocks and two coal blocks, Mr Jaiswal said at the inaugural of Coal Gas 2011, a two-day event on clean coal technologies. UCG is an industrial process of converting coal into gas and is considered eco friendly.
Indian coal Imports shoot up by 50% in 2011
Tuesday, June 14, 2011
Coal Ministry may review cancellation of blocks to NTPC
oal Minister Sriprakash Jaiswal today said the ministry may review its decision of cancellation of coal blocks allocated to NTPC, provided the reasons put forward by the power major for its failure to develop the blocks were "genuine".
"We can review our decision if the reasons given by NTPC for their inability to develop the coal blocks were found genuine," Jaiswal told PTI.
The development comes close on the heels of Power Ministry writing a letter to the Coal Ministry last week, asking for an urgent review of its decision of cancellation of coal blocks allocated to NTPC.
In the letter the Power Ministry had also expressed concerns that NTPC's plans of adding over 15,000 MW generation capacity were likely to get hit due to de-allocation of the blocks.
The Power Ministry had said that at a crucial juncture when the state-run power major has already spent Rs 175 crore for developing three blocks alloted to it, Coal Ministry's move of de-allocation would prove detrimental for the 12th Five-Year Plan's (2012-17) capacity addition plans.
"Some of NTPC's projects of 15,060 MW coming up during 12th Plan are yet to be accorded coal linkages, Barh stage II and Tanda expansion power projects scheduled to come up during 2012-13 and 2015-16 are linked to Chhatti-Bariatu and Kerandari coal blocks," the Power Ministry had said.
Last month, the Coal Ministry had cancelled allocation of five coal blocks, including Chatti-Bariatu, Kerandari and Chatti-Bariatu (South), to NTPC.
De-allocation of the blocks at a crucial stage means delays in NTPC plans and lesser availability of coal during the beginning of the next Five-Year Plan, the power ministry had said.
Stating that "delays in achieving milestones towards implementation of the project was due to several factors beyond the control of NTPC", the Ministry had said delays in environment and forestry clearances had proved road blocks.
It takes about two-three years to achieve environmental and forestry clearances. The construction at the site can commence only after receiving green clearances from the Ministry of Environment and Forest, it had said.
It had added that NTPC had made substantial progress in development of Chatti-Bariatu and Kerandari blocks.
To weed out non-serious players, the government, last year, issued notices to 84 coal and four lignite block allocattees for not developing the areas within stipulated time and sought explanation as to why blocks should not be cancelled.
In the beginning of May, the coal ministry de-allocated 15 coal and lignite blocks alloted to various firms
Monday, June 13, 2011
Coal India deal with Peaboy awaiting Govt response
"The Coal Ministry had earlier said that acquisition of the property in the overseas market will be confined to listed companies so that the there is not much problem during the valuation of the deal," an official in the Coal Ministry had earlier said.
However, since the proposed company would not be listed, "The board had said to refer the proposal to the government seeking clarifications whether Coal India can go ahead with the deal if the principal (Peabody) is listed," the official had added.
Earlier, CIL had said it was likely to buy up to a 15% stake in Peabody Energy Corp's Australian assets in early 2011-12 for an estimated $100 million (about Rs 450 crore).
Peabody Energy is the world's largest private sector coal company, with sales of 246 million tonne (MT) in 2010. The company claims to have 9 billion tonne of reserves and manages and owns an interest in 28 mining operations in the US and Australia.
Wednesday, June 8, 2011
Sub standard coal being imported by power generators
Coal India to do away with compulsive Fuel Supply Agreements (FSA)
Tuesday, June 7, 2011
Lanco asked to honor coal contract in Australia
Monday, June 6, 2011
Mining disallowed in barren land : Coal India to take 11.5MT hit on latest green directive
Coal India's annual output would fall by 11.5 million tonnes this fiscal because of a recent order from the environment ministry that requires a company to obtain forest clearances before mining even in barren areas if another part of the coal block has a forest.
At 9:45 am, shares of Coal India were trading 0.98% up at Rs 406.95 on the Bombay Stock Exchange.
The coal ministry has urged the environment ministry to withdraw the order. Coal minister Sriprakash Jaiswal said the directive has begun to impact existing and future projects.
"We are writing to Planning Commission deputy chairman Montek Singh Ahluwalia, finance and environment ministers to exempt coal projects from the recent directive. The latest instructions of environment ministry will have an adverse impact on coal production as most of the coal bearing areas are in forests," said the coal minister
Thursday, June 2, 2011
Coal India says - Rake availability is not an issue anymore
Talking about the availability of rakes for transportation of coal Mr. Jha, CMD Coal India said, "The Indian Railways have added more rakes in their fleet. They have promised us to make more rakes available. Rake availability is not an issue currently."
The company is expecting to get 190 rakes per day by June.
Below is the verbatim transcript of his interview with Mitali Mukherjee and Udayan Mukherjee of CNBC-TV18.
Q: Last we spoke, you put out a guidance of 477 million tones in terms of volume off take in 2012. But when we spoke with the coal minister, he indicated that may be nearly 15-20% shortage this year. Would you like to relook your guidance, or can you do what you indicated in your volume growth?
A: I would plan first to liquidate our stocks to maximum extent, even though our MOU target for off take is 454 million tones. We have made our internal plans through interaction with the Indian railways to dispatch around further 27 million tones. This will be around 25 million tones more than our production plan. So, that would require a growth of something like 9.5%. We are currently doing at around 6%.
The gap between demand and availability projected for the year is quite large. The domestic availability was seen to be less, because of the logistic constraints. Now since the Indian Railways have added more rakes in their fleet and they have promised us to make available more rakes. We are hopeful that large part of this cap will be mixed from our stocks.
Q: How much is the availability of rakes gone up from the railways in these last few weeks? Given that extra availability how much of the stock which is lying with you, you think can be cleared up this year?
A: The availability of rakes in March was something like 182 rakes a day. In April it became 178 rakes a day which compared to the same period previous year was 158 rakes a day. So, there was a net addition of 20 rakes per day during this fiscal in April.
There had been some shortfall in May, not because rakes were not available, but because of certain law and order problem in two states. So, the rakes could not reach or transportation could not take place.
Rake availability currently is not an issue. Whatever rake is required, is available and is getting loaded. We have discussed with the Indian Railways only two days ago and they have promised to provide us 190 rakes per day in the month of June.
Q: When we spoke with Mr Jaiswal last week, he came out in stern support of Coal India and the e-auction process and the fact that cap as well should not be relooked at, has the final resolution been reached on this e-auction issue?
A: No proposal for e-auction has come to Coal India as such or I understand even to the ministry of coal. But, there has been some proposal by our ministry is they might have saying to planning commission. But the issue is that e-auction was initiated and is being held for those sectors of consumers who do not have access to coal.
That means they do not have linkages and those who have linkages do not get coal sufficiently. For sector other than power we have signed FSA for only 70% requirement. The annual contracted quantity for all sectors other than power, is only for 70% of their requirement.
The balance 30% they must source from somewhere. E-auction is the only source which has been made available to them and also to those consumers who do not get linkages.
This is because non-core sector consumer other than power, cement, other than steel are not getting any fresh linkages for the last 10 years. So, this was the route or mode through which the coal is made available.
Now, if that e-auction is stopped hypothetically, then from where will this sector get coal also 80% of this e-auction coal goes by road to the nearby by consumers and only 20% goes by rail.
So, at the moment, that rail mode e-acution coal can move by rail, if more rakes are available. But, road mode will completely stop, because that doesn’t go to thepower sector. So if that is stopped, then that will pile up in the stock.
80% of nearly 46-47 million tones is a huge lot of coal and if that doesn’t get sold, then who is the beneficiary? Neither the power sector, nor Coal India. The coal produced pile up in stocks.
So, that is why the honorable minster has very strongly said, that they will definitely do our best to supply as much coal possible to the power sector.
Q: Given the availability of rakes that you are getting, how much of the stock that is lying with you, you think can be liquidated this year?
A: 25 million tones.
Q: You are confident about that?
A: 452 million tones which is to be produced this year, plus 25 million tones, that makes up 477 million tones.
Q: But not more than that, you don’t think more than that is possible?
A: If we get more rakes in the months of third and fourth quarter, if I get 220 rakes and it is feasible to load, we will liquidate more stocks. I am not keeping stocks for keeping my inventory up.
The stocks of coal have to be moved and the only problem is the logistics. If proper logistics are available, what is my interest in not loading them? I will get more money.
Wednesday, June 1, 2011
Coal Distribution Policy to be looked into
The problem of deteriorating output growth in spite of regulations in the coal sector is casting a huge shadow on the coal market of India. The problem now appears to have escalated to a level that is persuading the government to issue further regulations to ensure increasing and steady supply of coal from the industry.
Coal industry has always been a highly regulated one; however, the policies undertaken by the ministry seem to be proving inadequate even for a sector such as power, which the government has prioritised with regard to the distribution of coal. The CIL said recently that the company can only deliver 41 metric tonnes of coal out of the 306 metric tonnes mentioned in the Letter of Assurances issued to the power sector for producing 65 gigawatts of energy in an expansion scheduled during the year 2011/12. The supply from CIL will ensure production of only 12 gigawatts.
Under the current policy regime of the Indian coal ministry, captive mining is set up for players apart from Central government and other central or state owned companies such as CIL and SCCL and Mineral Development Corporations of the State governments. Companies engaged in production of iron and steel, power, washing of coal from the mines and other end-uses the government notifies are allowed to produce coal, but only for captive consumption.
The government has also facilitated sub-leasing of isolated small pockets of coal deposits that cannot be developed in a large scale for the benefit of economic development and those which do not require rail transport for other private parties.
Despite this seemingly inclusive regime, coal production is below desired levels in the country, unable to cater to industries.
The Isolated mining pockets leased out to private parties are often under developed and present with insurmountable geological challenges. Mines with infrastructure, on the other hand, is rarely leased out. Since 1993 almost 40 such mines were allocated, and that too on a joint basis, which has lead to problems such as varied economic interests of the recipients and thus time bound development get strained and delayed. Out of these 40 mines allocated, only a few of them have been developed.
The government also reported of 46 delayed projects of CIL earlier during the month of May. The supply shortfall of output has brought the state owned CIL to the verge of dishonouring Letter of Assurances (LoA) that promise delivery of 450 million tonnes.
The Indian power sector was reported of receiving only 303 million tonnes as against the expectation of 335 million, down 10 percent, during 2010-2011. The total coal production on the other hand fell 6 percent during the same time.
In addition, environmental issues, land acquisitions problems and relating snags have lead the CIL to reduce its output target to 447 million tonnes as opposed to the preliminary target set at 520 million tonnes for the 2011/12 fiscal.
The government might free the CIL from such LoAs, in search of alternative amendments to the coal distribution policy to make it more inclusive and assure prompt delivery. However, the coal industry in India is yet to emerge, with possession of 10 percent of the world’s total coal reserves.
Monday, May 30, 2011
China and India : Coal demand set to outstrip supply
As China tries to cope with what may be its worst power shortage in years, coal demand from the world's biggest consumer is likely to take centre stage at one of Asia's largest coal industry gatherings in Indonesia next week.
China will face stiff competition for coal shipped by Indonesia, the world's biggest exporter of thermal coal, from India where demand for electricity is rising in an economy seen growing around 8.5 percent.
"With domestic prices rising so strongly -- they are basically on par with import prices now -- the likelihood of China being strong importers of thermal coal over the summer is extremely high," said Daniel Hynes, director of commodity research at Citigroup in Sydney.
Chinese domestic coal prices rose to the highest level in more than two years last week as utilities stocked up ahead of the summer months, making imports more attractive.
Chinese buyers have already been on the hunt for Indonesian cargoes as well as some Australian coal over the last few weeks to fill requirements.
If Beijing lifts restrictions on how much coal-fired power plants are permitted to charge more for electricity, as it has already done in some provinces, import demand could grow even higher as utilities burn more coal
Indian demand for Indonesian coal is also on the rise, and India's short-term and long-term demand is likely to be a focus.
"Over the last couple of months, you're actually seeing the share of India coal imports from Indonesia, increasing... India has made a lot of progress with imports, with year-on-year growth. People will want to see where they are at the moment," said one Indonesia-based analyst who asked not to be named.
Growing demand for Indonesian coal by India, to fill the widening gap between domestic coal output and demand, is likely to continue, the analyst added, resulting in intense competition between India and China for tonnage.
Indian and Chinese companies are also seeking to acquire stakes in Indonesian coal mines to secure their supply, with Coal India , the world's largest coal miner, in advanced talks to buy up to 40 percent of Indonesian low-grade coal producer Golden Energy Mines for up to $1 billion, three sources with direct knowledge of the deal said.
Although India is home to 10 percent of global coal reserves, it is plagued by a shortfall in local supplies as demand has grown rapidly with the increase in coal-fired power plants.
Source : Economic Times
Wednesday, May 25, 2011
Coal India net profit up 42% : Statistics and news
Monday, May 23, 2011
Price pooling of coal - Report on 25th May
The Power Ministry is exploring every opportunity possible to make coal available to companies at a low price so that electricity generation does not suffer and power tariffs are not driven up.