Assocham seeks relaxation in long-term PPA norm for coal
Industry body Assocham has sought relaxation in the norm that seeks long-term power purchase agreements (PPA) with distribution companies (discoms) to get coal under fuel supply agreement.
"In the current scenario, CIL's over capacity of coal production and thus removing the cap of long term PPA would be beneficial for them and also help increase the consumption of coal as CIL may get the share of demand of coal by the power plants who have not been able to sign a long term PPA due to paucity of bidding opportunities,"Assocham Secretary-General D S Rawat recommended in a letter to coal secretary Anil Swarup.
He, however, did not highlight the number of power plants or the capacity that was suffering from this issue.
Explaining the need for the same, Assocham pointed out that there was no such condition at the time when such projects were conceptualized and investments were made in these power plants.
Assocham blamed the aforesaid retrospective and arbitrary policy changes of the previous government, several plants that have already been commissioned are not in a position to enter into long term PPA with discoms due to paucity of bidding opportunities with them.
The letter also highlights early auction of the pending de-allocated coal blocks that would not only reduce import of coal but will also reduce the financial burden borne by the prior allottees who made huge investments in development of their coal blocks.
Out of the total 204 coal blocks de-allocated by the Supreme Court till date only 74 blocks have been auctioned.
The body also said that a notification of 2015 had created a discriminatory situation, where Coal India subsidiaries could have the advantage of contractual operations in their mines, while others irrespective of whether they were in the government sector or in private sector, were being deprived of such advantage and sought to allow the exemptions to the private sector mining.
40 leaseholders allowed to extract iron ore: CM
The first full-fledged mining season, after extraction of iron ore and exports were banned from the State by the Supreme Court in October 2012, will begin here next month with 40 leaseholders eligible to operate.
Talking to The Hindu on Wednesday, Chief Minister Laxmikant Parsekar confirmed that the State government has renewed nearly 85 iron ore leases, however, only 40 leaseholders can operate from November; others have pending queries with the Union Ministry of Environment and Forests relating to their Environment Clearances.
The Chief Minister said he was confident that the leaseholders would collectively be able to reach the 20 million ton per annum extraction cap given by the Supreme Court for ore extraction in the State.
When asked what happens if these leaseholders fail to extract the prescribed capacity, Mr. Parsekar said that Vedanta, the State’s leading iron ore exporting company, is willing to extract the surplus capacity.
Goa had reached an annual extraction mark of over 50 million tonnes prior to the SC’s ban, which came following Justice M. B. Shah commission’s report indicating illegalities and irregularities in the State’s private iron ore mining sector and iron ore exports.
The ban was relaxed by the Apex Court in May 2013 by prescribing a cap on extraction and directing the State government to auction the illegally stored iron ore and also regulate its extraction, transport and export.
Goa had reached an annual extraction mark of over 50 million tonnes prior to the Supreme Court’s ban
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http://www.thehindu.com/todays-paper/tp-miscellaneous/tp-others/40-leaseholders-allowed-to-extract-iron-ore-cm/article9218064.ece
Coal India ties up with APGenco
Coal India has tied up with Andhra Pradesh Generation Company (APGenco) for substituting imported fuel, used for blending purposes, by high quality Ranigunj coal. The initiative is part of the CIL’s effort to market Ranigunj coal that has few takers.
APGenco procures 5 million tonnes low quality (4100 kilo calorie) fuel from CIL subsidiary, Mahanadi Coalfields in Odisha for its super-critical 2X800 MW power station at Krishnapatnam. The additional fuel requirement is met through imports.
As per the new plan, it will procure an additional 1 mt fuel of high energy value (6100 kcal) and low ash Ranigunj coal produced by another CIL arm, Eastern Coalfields, replacing the import demand. The State-owned miner has already entered into such arrangements with NTPC and Maharashtra Generation Company (Mahagenco). According to CIL sources, the deal is a win-win to the generation companies as they get the desired fuel at lower than import price.
Decline in sales
After nearly two decades, CIL witnessed a decline in coal sales in the first half of this fiscal. According to the company, sales were down 0.9 per cent compared to last year in April-September. Production, however, is flat indicating piling up of pit-head inventory.
Coal sales were particularly under pressure over the last two months due to arrival of increased quantities of cheap hydro-electricity and distress sale of thermal power by stressed imported coal-based private sector generators, especially in Andhra Pradesh. The situation hasn’t change much in October as hydro-electricity supply is up by 35 per cent in the first week, compared to the same period last year.
(This article was published on October 13, 2016)
http://www.thehindubusinessline.com/companies/coal-india-ties-up-with-apgenco/article9216025.ece
Govt. keen on tapping mining sector: Andhra Minister
Minister for Mines and Geology Peethala Sujatha said the government was doing a survey of the mines available across the State in the wake of the discovery of huge iron and manganese ore reserves in Vizianagaram district.
Officials of the department have been instructed to submit detailed reports of the mines and mineral resources available in each district for locating reserves.
Sand smuggling
Addressing a video-conference from the city on Thursday, Ms. Sujatha said the State exchequer had earned Rs.736 crore so far in the current financial year against the targeted Rs.1,700 crore and a concerted effort was needed to augment the revenue.
These natural resources are of high economic value for the State which faced the paucity of funds in the wake of bifurcation. Ms. Sujatha said check-posts were being set up at the borders with other States to prevent the smuggling of sand that was supposed to be made available free of cost to the people.
These check-posts would be manned by the staff of Police, Revenue and Mines and Geology Departments.
Stringent action would be taken against those responsible for illegal transportation of and selling sand in the neighbouring States, she warned. Secretary (Mines) B. Sreedhar and other officials were present.
http://www.thehindu.com/news/cities/Vijayawada/govt-keen-on-tapping-mining-sector-minister/article9218167.ece
Apollo Said Close to Deal for Anglo’s Australian Coal Mines
Apollo Global Management LLC and Xcoal Energy & Resources LLC are poised to buy Anglo American Plc’s Australian metallurgical coal assets, after beating out competition from rivals including BHP Billiton Ltd., people with knowledge of the matter said.
The deal may ultimately value the assets at more than $1.5 billion, said the people, who asked not to be identified because the details are private. The agreement to buy the Moranbah and Grosvenor mines in Queensland includes a so-called contingent value right, which could entitle Anglo to further payments depending on the future price of coking coal, the people said.
London-based Anglo extended final negotiations after the price of coking coal, used to make steel, more than doubled this year, the people said. No final decisions have been made and the deal may still fall apart. A spokesman for Anglo declined to comment. A representative for Apollo didn’t immediately return requests for comment, while a representative for Xcoal wasn’t immediately available to comment.
Anglo Chief Executive Officer Mark Cutifani, seeking to reshape its business for an era of lower commodities prices and to cut net debt to less than $10 billion, plans to exit coal and iron ore to focus on more profitable diamond, platinum and copper mines. The company is targeting $3 billion to $4 billion in asset sales this year. In April, it agreed to sell its Brazilian niobium and phosphates business for $1.5 billion after also striking deals to offload interests in Australian coal mines including Foxleigh, Callide and Dartbrook.
Coal Prices
Anemka Resources, the mining investor backed by Warburg Pincus, Coronado Coal LLC and AMCI Capital LP had earlier bid for the assets, people familiar with the matter saidin July.
Anglo shares fell 4.8 percent to close at 990.60 pence in London Thursday. The stock has gained 231 percent this year.
Spot prices for coking coal have more than doubled since June as China cut capacity due to flooding in Shanxi province, spurring a boost in the nation’s imports. Peabody Energy Corp., the U.S. producer, scored the highest contract price for selling metallurgical coal in four years through an agreement this week with Japanese steelmaker Nippon Steel & Sumitomo Metal Corp.
Anglo American owns 88 percent of the Moranbah North mine, located in Queensland’s Bowen Basin and has annual output of 4 million metric tons of coking coal, according to the company’s website. The nearby Grosvenor project delivered its first coal seven months ahead of schedule, the company said in May.
Why India will never have zero coal import bill
The Narendra Modi government has been working on cutting the country’s coal import bill of over 1 lakh crore annually. Power minister Piyush Goyal has insisted the government would stop coal imports and make way for domestic coal going ahead.
However, the plan to replace imports with domestic output may falter on a crucial affliction – lack of coking coal reserves that is used as a raw material in steel making and allied industries. The country imported around 200 million tonne (MT) of coal last financial year to top up domestic production of 640 MT.
Coal in India is used either from domestic sources, mostly mined by coal India, or is imported. The imports are mainly to compensate the lack of good quality coal, especially coking coal from the mining sources in the country.
Coking coal is imported by state-run Steel Authority of India Limited (SAIL) and other steel manufacturing units mainly to bridge the gap between the requirement and indigenous availability and to improve the quality.
Coal based power plants, cement plants, captive power plants, sponge iron plants, industrial consumers and coal traders are importing non-coking coal. Coke is imported mainly by pig-iron manufacturers and iron and steel sector consumers using mini-blast furnace.
However, India does not have enough reserves for good quality coking coal and most of it is imported from Indonesia, South Africa, Russia and Australia.
Experts say, it is this requirement of coking coal added with power plants whose boilers are designed to run only on imported coal, which is likely to continue importing coal in the coming years.
“Talking in aggregate terms does not really help. Let us subdivide the import requirement of the country into three parts. One is of coking coal, where we have traditionally had a deficit. So, we have been importers of coking coal for a long-long time,” Vivek Bharadwaj, joint secretary, Ministry of Coal, told ETEnergyworld.
He added this coal requirement will not end any time soon. “Älso, we have power plants at the coasts which are based on imported coal. Their boilers are designed only for imported coal. They will continue to use imported coal. So, it is only the third category of thermal power plants which were using imported coal as a substitute for domestic coal because if its scarcity, which we can do something about,” Bharadwaj explained.
As per provisional government figures, India’s 200 MT of coal imports last fiscal included 43.50 million tonne of coking coal and 156.38 million tonne non-coking or thermal coal. This financial year (2016-17), the government had imported over 35 million tonne coal by the end of May.
However, the government is now taking steps to ramp up the production of coking coal in the country and curtail the use of imported coal. “Last year, there has been a drop of Rs 23,000 crore in the import bill,” Bharadwaj said. “We are trying to map out these industries, with both power and non-power use, which will still continue to import coal in the near future.”
Similarly, for plants situated at the coasts, switching to domestic coal would be a big challenge as the process would involve changes in its boilers, which involve huge costs.
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