Production resumes at Jharkhand coal mine; five bodies still under debris
Even as Eastern Coalfields Limited (ECL) succumbed to pressure from power generation plants to resume coal extraction at the Lalmatia mine in Jharkhand, rescue work remained halted for the fourth consecutive day on Monday while there was no trace of the five workers trapped under the debris after the December 29 cave-in.
A halt in coal extraction at Rajmahal Opencast Project of ECL in Godda district following the tragedy, in which 18 miners were confirmed dead, had badly affected coal supply to NTPC plants at power generation at Kahalgaon in Bihar and Farakka in West Bengal. This had posed the danger of many parts of Bihar, Jharkhand and West Bengal plunging in darkness.
While ECL, its outsourcing partner Mahalaxmi Company and the Godda district administration claim a total of 23 people were at work at the site during the cave-in, local people and trade unions insist that more than 100 people were inside the ill-fated mine. Protests by trade unions ended on Sunday evening due to lack of support as most workers believed to have died in the mishap were from other states, said sources.
“There is still no news about my brother, Gagan Singh, who was working at this mine when the accident happened. I do not know if they will resume the search operation so that we could at least have hs body,” said Navneet Singh, a resident of Bhagalpur in Bihar, who is still in Lalmatia. There is uncertainty if his family would get the ex gratia and other government benefits if the body is never found.
ECL’s general manager at Rajmahal, HK Singh, said the PSU’s constant requests to the trade unions’ representatives and others opposing resumption of production at Lalmatia colliery have paid off. “Rescue operation would certainly resume shortly. What was most important was to at the moment ensure power availability to three states,” he said.
The Director General of Mines Safety (DGMS) is yet to issue a report regarding the cause of the mishap. Trade union organisations have accused DGMS of not having carried out its duty in ascertaining the exact number of people engaged in work when the mine caved in.
Local firms should be incentivised in oil production: Vedanta chief
Oil and mining major Vedanta Resources founder and Chairman Anil Agarwal has expressed the hope that the forthcoming Union Budget will incentivise oil exploration by local entreprenaurs as well more mining of natural resources by the small and medium entreprises.
"We have to support local entrepreneurs so that we can increase the production contribution from them to 50 per cent from the current 30 per cent," Agarwal told BTVi in an interview while responding to a query on boosting hydrocarbons production in India.
"It is very important to give a lot of comfort to local entrepreneurs. They will bring a lot of JVs (joint ventures) from outside to do oil exploration," he said.
Oil and natural Gas Corp (ONGC) has "tremendous resources" and the state-run explorer is looking for tie-ups with suitable partners, he added.
Citing the example of aluminium, Agarwal lamented that while India produces only 10 per cent of the Chinese output, the Indian government has put a cap on production of minerals like iron ore.
"I am looking at the removal of these caps. Of course, the environment is also a very important consideration.
"Aluminium is so important for India, though we produce only 3 million tonnes (MT) compared to 34 MT by China, which is dumping half its aluminium in India. The steel industry has been protected by the government against dumping," he said.
The Vedanta chief also said that it was necessary to bring in small and medium enterprises (SMEs) into mineral resource exploration through proper policy incentives.
"Banks are sitting on a pile of funds (post-demonetisation). It is very important to use SMEs to develop resources like aluminium, iron ore, oil and copper.
"Royalties, however, are currently very high and I am looking at whether they can be reduced, or can be tagged to production levels. The auction process for resources can also be simplified," Agarwal said listing some of his other expectations from the government.
Noting the high operating costs for miners, he said railway freight rates were a major factor.
"Railways increase the freight rates for iron ore like anything.. railway freight rates need to be rationalised," he said.
In this connection, Agarwal lauded the Shipping and Road Transport Minister Nitin Gadkari's plan to develop waterways for transport as a measure that would reduce both the pressure on, as well as rates of, rail and road transport in India.
HomeEconomy Post-demonetisation eco growth hinges on industry orientation
Post-demonetisation eco growth hinges on industry orientation
The latest release of CSO data on advanced estimates of GVA/GDP for FY17 has put estimated real GDP growth for the year at 7.1%, 0.5% lower than the previous year.
As these estimates are based on the data prior to the commencement of the demonetisation exercise, it is likely that the full year GDP growth rate may be marginally lower in view of slowdown in cash based sectors.
In first half of the current fiscal, the country has grown by 7.2% and hence to achieve a 7% growth in the full year, the country must grow at 6.8% in the second half.
This is a probable scenario if the performance of the economy in fourth quarter takes place on a growth momentum mode.
It is heartening to note that agriculture sector is projected to achieve 4.1% growth rate in FY17 as against a meager 1.2% in last year. Good agriculture production has a significant contribution to income and employment generation, lower pressure on migration and improving the quality of life in the rural areas which would ultimately enhance rural consumption.
For the industrial sector, a look at some of the relevant sectors would reveal the intensity of the driving forces. The projected growth at (-) 1.8% in mining and quarrying sector against a growth of 7.4% in the previous year is worrisome. The major two components in mining, namely coal and iron ore are dependent on the demand from the end using sectors, steel and power.
The fresh activities in the auctioned mines have just started and the pace of the activities would be driven by demand from the end using sectors. The demand for coal from the power sector (especially from the industry sector) has slowed down resulting in staggering of the FSAs with CIL.
In manufacturing, around 72% estimates are based on the performance of private corporate sector (listed companies) and around 23% is accounted for by the performance of the quasi corporate and unorganized sector as obtained from IIP index on manufacturing. As manufacturing IIP has grown by (-) 1.0% during April-October’16, the extrapolated projection level for this sector is subdued and may have pulled down the total GVA growth in manufacturing at 7.4% against 9.3% achieved in last year.
It may also be mentioned here that compared to last year’s negative growth, the WPI in manufacturing has grown by 2% in April-November’16 period and this has positively contributed to GVA growth in manufacturing.
Construction sector has been projected to experience one of its lowest growths in the recent past at 2.9%, a clear 1% drop from the previous year.
The latest sops announced for personal loan rates and subsidised loans for affordable housing sector are definite steps to rejuvenate the real estate sector in fourth quarter and may pull up the depressing growth rate a bit upwards. The highest growth rate has been predicted for financial, insurance, professional services at 12.8% which is nearly double the rate achieved in the last year.
The industrial growth in the country comprising of mining, manufacturing, electricity, gas and water supply and construction segments is crucially dependent on investment reflected in gross fixed capital formation as a percentage of GDP.
At constant prices (2011-12 prices) the GFCF as percentage of GDP has progressively come down from 32.3% in FY15 to 31.2% in FY16 and has been projected to reach 29.1% in the current fiscal.
We had earlier discussed that a minimum 5% growth in GFCF/GDP ratio from the current level of 29% is needed primarily targeting the infrastructure sector.
The composition of GFCF needs to be oriented towards energy, railways, roads, irrigation, ports, urban development, airports, storage and warehouses, real estate segments in order to make a positive impact on the growth of critical sectors like steel.
The consumption of steel in the country in the first 9 months of the current year has experienced a growth of 3.3%, while the production of crude steel has grown by 8.5%. In order to stimulate more demand to absorb the likely expansion of fresh capacity, the investment scenario has to perk up significantly in the coming months.
Timeline of tariff relief for power projects unclear: ICRA
Lower dependence on imported coal and tariff relief for affected projects is positive for the power sector but timeline for implementation of tariff relief is still unclear, domestic ratings agency Icra said. "Icra positively takes note of the order issued by the CERC approving tariff relief under force majeure for the imported coal-based power projects of Adani Power Ltd (APL) and Coastal Gujarat Power Ltd (CGPL), affected by the change in regulations in Indonesia," Icra said. However, it said that the implementation of this order is subject to approval by the Supreme Court and thus, timelines of its implementation are not clear. Further, the tariff relief, as per this order, is estimated to be lower than actual fuel cost under-recoveries, as per Icra estimates. It further pointed out that while energy demand growth has been moderate at 3-5 percent since FY14, it is likely to recover gradually over the next 2-3 year period with expected improvement in the financial position of the state-owned distribution utilities (discoms) following the implementation of the Ujwal Discom Assurance Yojana (UDAY) and in turn, leading to an improved off-take and reduction in load shedding. "However, any significant pick-up in average thermal PLF (plant load factor) level from the current level of 59.5 percent (8M FY2017) is unlikely in the medium term in Icra's view, with the increasing share of renewable energy in the overall energy consumption on an all India level and sizeable thermal capacity addition already in place. "In this context, the recovery in industrial demand coupled with extent of improvement in the financial health of discoms remains key drivers for energy demand," Senior Vice President, Icra Ratings, Sabyasachi Majumdar said in a statement. The improvement in domestic coal availability, led by Coal India Limited , has lowered the coal import dependence for the sector during FY16 and in the current fiscal. However, weak electricity demand growth has led to a build-up of coal inventory at CIL's pitheads as well as at the power plants and in turn, led to a slowdown in production growth during the current fiscal. "Despite the improved coal availability, the policy for auction of coal linkages is still pending, which is a credit concern, especially for operational thermal projects/IPPs (estimated 6.8 GW) which have long-term PPAs, but are still awaiting the tie-up of long-term fuel supply agreement (FSA)," Majumdar said. The recent sharp increase in coal price internationally with the price of eco-grade coal increasing by 73 percent between April and December 2016 is a negative for thermal power capacity with short-term PPAs and dependent upon imported coal, especially given the subdued tariff levels in short term power trading.
Warm Regards
Anurag Singal
Sr Manager –Business Development
Essel Mining & Industries Ltd
14th Floor, Industry House
10,Camac Street –Kol-71
Ph: 033-30518415,9088026252
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