11 arrested for coal fraud
leven persons who were involved in replacing a consignment of coal with coal ash were arrested by a Special Operation Team (SOT) at Adibatla on Saturday.
The SOT police said Annapurna Enterprises of Vijayawadapurchases coal from agents at Visakhapatnam port at Rs 6,000 per metric tonne and supplies it to Orient Cement factory in Gulbarga, Karnataka. "Instead of directly taking the load of 21 tonnes of coal brought from Vishakapatnam port, the lorry driver Anjaiah diverted it to a site of Dharmaiah Goud and unloaded it. To make it look original, they spread a tonne of original coal on the top of the ash load," SOT inspector K Narsing Rao said.
Barring coal, Railways has arrested the drop in freight loading
The Railways has arrested the fall in freight loading of most commodities, other than coal, in the April-October period. But, there is still concern over the drop in coal traffic, as it accounts for almost half of Railways' total freight loading. To get a new projection for this fiscal, Mohd Jamshed, Member Traffic of the Railways, will soon meet the Coal and Power Secretaries. In an interview with BusinessLine, Jamshed talks about how the Railways is now taking cargo away from coastal shipping by opening routes, and more. Excerpts:
What has been the freight traffic performance till now?
After meeting customers, we made 15 major policy reforms. Now, we have walked the extra mile and need customers to come to the Railways. Diesel prices have gone down. We have given concessions to cement, etc.
We have started getting very positive results from few sectors, such as iron ore (more than we were anticipating) and steel, and recoveries have been made on containers and foodgrains in the past two months.
We were on a down-slide for all other commodities (other than coal), which has been arrested. In April-October, loading for all other commodities has been four million tonnes more than over the same period last year.
For coal loading, we had got some projections from Coal India and the Coal Ministry.
That was supposed to go up from 750 million tonnes (mt) last year to 1,500 mt in five years. Out of 750 mt, the Railways carried 550 mt. With the same trend, we would carry 1,100 mt by 2020. That means, 100 mt of incremental coal loading every year. So, we provided for wagons, locomotives and huge investments in section capacity.
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Coal India had a target of 598.6 mt of production. The target by October was to be 305.3 mt, but it has produced 271.9 mt.
Second, 84 rakes of imported coal had been coming in a day. This has gone down to 60 rakes a day, resulting in net shortfall of 24 rakes.
Overall, I could have moved 50 mt of coal, which I have not moved. We are looking to CIL again. In the past 10 days, the number of rakes loaded has gone up from 205 to 234, which is very positive.
What about the freight segment's net tonne kilometre (ntkm), which reflect both loading and distance?
This has been impacted because powerhouses are not demanding coal transportation. There are 25 powerhouses that are now loading 28 rakes (sets of goods trains) a day, which is lower than that of last year. The Railways serves 144 powerhouses, of which, these 25 powerhouses are for long-distances. Against a capacity of 415,
I need more demand. These projections were given by the Coal Ministry last year.
Any change in freight rates in the offing?
We will liberalise the freight charges in empty flow direction. The General Managers will be permitted to decide the charges. For example, the empty flow movement was from one division to another division.
Now, we are going to permit about 30 per cent lower rates between two zones.
If somebody loads for a mid-point between two zones, they can get load cargo in empty direction at 30 per cent lower charges.
Some commodities have seen higher rail freight. Are these because of policy changes?
We have seen upswing in iron ore, steel, cement, foodgrains and fertilisers, because of policy changes.
Instead of the sea-cum-rail route for some cargo, we have opened all rail routes (ARR) for some routes.
Andhra Pradesh, Karnataka, and Tamil Nadu have been asking us to open up all rail routes. We had closed some routes as we did not have capacity.
So, we used to take coal from Talcher to Paradip Port and then ship it using coastal shipping for powerhouses in the South. Now, we have opened ARRs.
In fact, the Shipping Ministry is not very happy about this as it is making the route cheaper by ₹200/tonne of coal against coastal shipping.
Odisha opposes clean environment tax on coal
he Odisha government today opposed the GST Council's decision to continue with the clean environment cess on coal and demanded enhancement of the rate of royalty on coal.
"The Odisha government has always been of the view that the cess will distort the GST structure. Therefore, the decision to continue with the clean environment cess on coal etc., for compensation to all states has been opposed by us," an official statement issued by the Chief Minister's office said.
The state government would continue to pursue the Centre for enhancing royalty on coal-bearing states instead of the same being shared for compensating all the states for introduction of GST, it said.
The Odisha government, however, welcomed the GST Council's decision to impose no tax or the lowest possible tax on daily consumer goods.
"The state government, therefore, welcomes zero tax rate on common food items and reduction in tax rate from 6 per cent to 5 per cent by the GST council, as demanded by the state government," it said.
The government also welcomes the decision of the GST Council to recommend compensation by the Centre to the state on the implementation of the GST with 14 per cent growth on collection of tax for the base year 2015-16, it said.
Indonesian coal miners remain cautious despite predicted increase in demand
Despite rising coal prices and new research indicating that the country's coal production will begin to increase, coal miners are still doubtful the rise in demand is enough to significantly boost domestic production in the near future.
BMI Research, a unit of Fitch Group, has predicted that Indonesia—which is among the five largest thermal coal producing countries— will see its coal production increase by an average 7.5 percent per year from 2017 to 2020, after suffering from a 15 percent year-on-year (yoy) decline this year.
"This will ensure the country increases its global market share from 4.2 percent in 2016 to 5.4 percent in 2020. Indonesia's additional output will be used to meet strong demand from a domestic pipeline of coal-fired power plants," said the report, which was published on Friday.
The government is currently implementing an electrification program aimed to add 35,000 megawatts (MW) in power generation capacity across the country by 2019. Almost 20,000 MW under the program will come from coal-fired plants.
Publicly listed Bumi Resources will remain the largest coal miner in Indonesia, according to the report.
"Through its two coal subsidiaries, Kaltim Prima Coal and Arutmin Indonesia, the company produced 60.0 million tons of coal in the first nine months of 2015, down 7.7 percent yoy," it said.
The report also said that India and Russia were set to increase their market shares in thermal coal production as well, with only Russia's additional output destined for the seaborne market.
Other large producers, including China and the US, will slowly lose market share.
Although the report paints a pretty picture, the Indonesian Coal Mining Association (APBI) casts some doubt on any significant increase in production for the next couple of years.
APBI deputy director Hendra Sinadia said the electrification project was not enough to spur production for domestic coal miners, because many power plants would not begin operations until 2019.
"I doubt there will be any significant increase from 2017 to 2018, because most of the power plant projects need two to four years before the commercial operation date," he told The Jakarta Post.
According to data from the association, coal demand for electrification stands at around 80 million tons per year and has the potential to double by the time the government's electrification program is completed.
However, progress in the 35,000 MW project has been slow, and by September, data from state-owned electricity company PLN show, that less than 1 percent of the total 35,000 MW has gone into commercial operation since the program was launched in late 2014.
The APBI acknowledges that there has been a sudden increase in coal prices after the coal market was badly hit for the past two years.
Reuters reported that the Asian benchmark Newcastle thermal coal price reached US$105.81 per metric ton at the end of last month, almost 109 percent higher than at the end of last year.
Meanwhile, Indonesia's coal reference price (HBA) for November rose to $84.89 per metric ton, up from $54.43 per metric ton at the same time last year.
However, the trauma of low prices might be enough to discourage mining companies from boosting production too much, Hendra said.
"The volatility of coal prices has made companies more cautious. They are now more psychologically hesitant, which leads to more conservative production plans despite high prices," he said, adding that companies that had shut down some of their mines due to low coal prices would need several months before the mines could start operating again.
Government data reveal that Indonesia had around 32.2 billion tons of coal reserves in 2014.
However, another study conducted by the APBI and auditing firm PricewaterhouseCoopers suggests that low prices make only 7.3 to 8.3 billion tons of coal economically viable to mine.
These reserves will most likely be depleted within the next two decades, forcing the country to start importing coal by 2030.
Back in town: Batchfire looks to start new coal gasification plant in Callide
THE man behind the Ambre Energy's ill-fated Felton petrochemical plant is back with a new plan to develop the Callide coal mine into a $2 billion coal gasification project that would deliver synthetic gas and highly-prized urea used as a fertiliser.
Edek Choros, who previously headed Ambre Energy, is now an executive director with Batchfire Resources, which clinched a deal last week to buy the Callide mine from Anglo American at an undisclosed price.
Batchfire also stitched up a separate deal with American company Synthesis Energy Systems to provide the technology for a gasifier which burns coal to create gases.
After the Ambre experience, Mr Choros is much wiser about developing projects in Queensland.
The final nail for Ambre came with the election of the Newman Government, which rejected the Felton petrochemical scheme because it was not in the public interest because of its location in high value farming land near Toowoomba.
"He (Mr Newman) dropped us to the wolves to please some people,'' Mr Choros said. "We were probably 20 years ahead of ourselves with that project.
"After fighting everyone at Felton, forget opening a new mine.
"We are starting with proven technology.
"It's nice to have a stretch target but this time we'll stretch a bit less.''
He said the fundamental technology of creating gas from coal is not new and for many years Brisbane used what was then called town gas, which came from coal.
Mr Choros said it would be about six months before he was ready to put in a development application to the State Government and stressed it was early days in the project.
Even so, he said a good project can always find capital, particularly when urea is selling at $US400 a tonne. Mr Choros is forecasting production of 1.5 million tonnes plus 12 petajoules of syngas.
Callide also has an enormous resource of about 1.5 billion tonnes of coal and the scheme would need about 300 million tonnes over 50 years.
Batchfire is not just a shell, either. It has more than 40 shareholders and its chairman is former Rio Tinto executive Terry O'Reilly and its funding for the Callide deal was through Singapore-based trader Avra Commodities
SES has already got its technology in three projects in China
Under the Batchfire plan, Callide will continue to feed thermal coal to the nearby power station as well as Queensland Alumina as a fundamental part of the business.
But its low quality coal will be fed into a gasifier which needs about 3 million tonnes of coal a year in its initial stage.
Warm Regards
Anurag Singal
Sr Manager –Business Development
Essel Mining & Industries Ltd
14th Floor, Industry House
10,Camac Street –Kol-71
Ph: 033-30518415
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