Britain goes 24 hours without using any coal-generated power
National Grid confirmed that Britain had gone a full 24-hour cycle without using coal to produce any of the country's electricity, media reports said.
All electricity produced until late Friday night was generated from a mix of sources, but mainly gas fired and nuclear powered generating stations. Wind, biomass, and imported energy were also used on Friday, Xinhua news agency reported.
National Grid's Cordi O'Hara said: "To have the first working day without coal since the start of the industrial revolution is a watershed moment in how our energy system is changing.
"Britain benefits from highly diverse and flexible sources of electricity. Our energy mix continues to change and National Grid adapts system operation to embrace these changes."
The 24-hour cycle started Thursday when a coal fires power plant at West Burton went offline.
"The 24 hour cycle was confirmed at 22.50 hours on Friday, after which we started to use coal-fired generation again. We can't (tell) when this new record will be broken," O'Hara said.
Earlier this week, a new record was set on Thursday, when Britain went for 19 hours without using any coal-fired generation of electricity.
Britain's first public coal fire power plant opened in London in 1882 and since then coal has played a daily part in generating the country's electricity.
The British government aims to phase out Britain's last coal-fired power stations by 2025 in its program to cut carbon emissions.
In 2015 almost a quarter of Britain's electricity was supplied from coal-fire plants, but in 2016 this had dropped to just under 10 percent as more of the older coal fired stations closed.
Adani, Tata Steel line up for coal mining, but foreigners not keen
Major Indian corporate houses like Adani, GMR, Tata Steel, Dalmia Bharat and CESC, among others have shown interest in government's effort to open up commercial coal mining.
Interest of foreign miners however, is absent despite the fact that the initiative of the government was targeted at getting foreign expertise and capital in the mining.
In a meeting to discuss regulations about opening up coal mining to private and foreign players, representatives of industrial houses like GMR, Hindalco, Adani Enterprises, NMDC, CESC, BGR Mining, Tata Steel, Lanco Infratech, Monnet Ispat, Essel Mining, Dalmia Bharat Cement, JSW Energy have attended the meet to give suggestions on the regulations to be applied to auction of blocks meant for commercial mining.
Other Indian entities were Dilip Buildcon, Rungta Mines, Sainik Mining, VPR Mining, Triveni Earthmovers, Rashmi Group, Montecarlo Ltd, and few others.
However, the foreign miners did not attend the meet. This could be due to the glut in global coal prices, and specifically, some very restrictive clauses in the regulations, sources said.
While private miners would be technically free to decide on the prices of the coal they mine, several experts are apprehensive about an indirect way to protect Coal India, by linking a revenue sharing model with the prices which has to be higher than what the country's dominant state-owned miner charges for its output, DNA Money had earlier reported after the draft rules came out.
That issue was discussed extensively in the meeting held recently between the private mines and the government, record of the meeting shows.
"Some of the participants observed that linking the revenue share at 1.2 times, the Coal India (CIL)- notified price may not be a desirable proposition. It was stated that CIL price is already on the higher side, and linking the revenue share to CIL price may result in increasing the sale price of coal by the commercial miner, whereas the objective under commercial coal mining should be to make coal available at cheaper prices. It was stated that for auction of other mineral blocks, revenue share is estimated at IBM-notified price itself and no margin is being charged over IBM notified price," minutes of the meeting says.
Forcing private miners to sell coal at 1.2 times, CIL prices would negate the benefit these mines can derive from the efficient and cost-effective mining techniques which could reduce prices, experts had said.
Meanwhile, the government has started working on the fifth tranche of auction of mines for specific usage.
This time, just seven mines namely Choritand Tiliaya, Rohne, Urtan North, Jogeshwar, Khas Jogeshwar, Rabodih and Brahmadiha, would be electronically auctioned beginning June 13.
DIGGING DEEPER
Interest of foreign miners is absent despite government’s focus on getting foreign expertise
GMR, Hindalco, Adani Enterprises, NMDC, among others attended the meeting
Coal India allows power companies to swap supplies
State-run power generating companies will now have the flexibility to swap their coal supplies and divert them to more efficient power plants.
Coal India last week signed agreements for aggregation of contracted quantity of coal with state and central power generating companies for flexible movement of coal that would help reduce the cost of power generation, a senior company official said.
The move will allow all coal linkages given to plants of state and central utilities like NTPC to be combined
Read more at:
Power sector to fuel Coal India's e-auction price
Coal India’s (CIL) average net sales realisation from e-auctions is likely to increase by 10 per cent to about Rs 1,650 a tonne in the near term on account of a global surge in coal prices and a revival in projected demand for the fossil fuel in the country, especially from the power sector, analysts say.
According to a report by brokerage firm Motilal Oswal, which sourced the data from the exchanges, e-auction prices had been falling continuously since 2015-16 and remained that way till the first half of 2016-17. This pulled down the average price realisation by 3.8 per cent during 2015-16 and nominally by one per cent in the last financial year.
“However, e-auction prices have started inching up due to higher international coal prices,” a sector expert said. “A rise in the average e-auction price realisation indicates a near similar rise in the selling price of auctioned coal,” the expert added.
Motilal Oswal expects a 2.8 per cent increase in the average net sales realisation on account of the higher e-auction prices, even if the company doesn’t increase coal prices in the current financial year. Although the total energy demand, excluding captive power plants, has increased by 5.8 per cent to 1,236 billion kwh, conventional generation, which majorly comprises thermal power, increased by 4.7 per cent to 1,154 billion kwh due to displacement from the renewable energy sector.
An analyst with Motilal Oswal said coal continued to be the main driver of conventional power generation with 86 per cent share. Coal-based generation, inclusive of lignite, increased by 5.4 per cent to 945 billion kwh. However, the demand for coal by the end of 2020 may be less by 52 million tonne (mt) than the projected demand of 970 mt. “However, apparent coal demand will still increase at a CAGR (compound annual growth rate) of 5.4 per cent over the 2017-2020 time period, compared to a flat demand over the last two years,” the analyst said.
During the fourth quarter of the last financial year, it is estimated that Coal India has sold 33 mt of coal in the e-auctions at an average price of Rs 1,719 a tonne, which is 10 per cent higher than the auction price in the October-December quarter.
It is estimated that in 2016-17, 97 mt of coal went under the hammer in e-auctions, which is 47 per cent higher than what was offered in 2015-16.
A senior company official said the coal behemoth is now targeting to put on block at least 235 mt of coal in the coming three years to increase revenue.
Furthermore, with the global coal prices touching $74, the official expects private power producers to buy more coal from the e-auctions. To encourage the private players lift more indigenous coal, Coal India is also offering discounts to the tune of 35 per cent for lower grades and 20 per cent for mid-grades to the power plants.
Debasish Mishra, partner at Deloitte Touché Tohmatsu India, said lack of clarity on coal linkage policy was a factor behind increasing interest in e-auctions.
“Government is yet to come out with a policy on auction of coal linkage for IPPs (independent power providers). IPPs with power purchase agreement (PPA) with a fuel supply agreement, IPPs without PPA selling in spot power market and captive plants are buying coal in e-auction,” Mishra said, adding that for power plants located away from the coast, it still makes sense to buy coal from e-auction, rather than import.
Corus acquisition was an aspirational mistake: Ex-Tata Steel MD J J Irani
Acquisition of London-headquartered Corus by Tata Steel was a mistake and slicing off the take-over at the moment was a good job, former MD of the company J J Irani said on Friday.
"Acquisition of Corus was a mistake. Not an intentional one but an aspirational mistake," Irani told at an interaction on management organised by Calcutta Chamber of Commerce here today.
Irani, who held the position of the MD of Tata Steel for nearly a decade, said that the Indian company emerged as a 'white knight' while acquiring Corus in 2007 when the global steel market was good.
But with the subsequent slump in steel demand, Corus (later renamed as Tata Steel Europe), the acquisition turned bad and it had lived off Tata Steel's Indian operations, Irani said.
Irani, however, said that experience of Tata Motors was different in case of JLR, which was acquired by it, was doing extremely well and was supporting the Indian firm now.
"JLR is holding up the Indian company. The scenario is different for Tata Steel", Irani said.
Irani said while he was the MD, the Tata Steel management had very cordial ties with the union in Jamshedpur for which the 78,000 strong workforce could be gradually reduced to 40,000.
"That decision to shed flab at that time has helped Tata Steel now to be one of the most profitable and efficient steel companies in India", Irani said.
Saying that the single most important factor is credibility of the management which meant that people knew that "what you are saying will be done".
"Of course in the last few months, that thing has become blurred and it will come bank to normal once again", he said.
Irani, who described JRD Tata as his icon and professional father, said in the earlier days, when Tata's holding in Tata Sons was just three per cent and G D Birla with five per cent, things were amicably passed in the EGMs of various companies.
But with the Tata's holding in Tata Sons much more now, questions were being asked in some of the group companies, he said.
Regarding the spat between Ratan Tata and Cyrus Mistry, he said that the former had never interfered with the board decisions, a thing which was now being noticed in the case of Infosys.
In Mistry's case, the Tata Sons board lost confidence in Mistry for which he was removed. "But the Tata image has taken a hit as things were blown out of proportions in the media".
Regarding Infosys, Irani said that the founding fathers like N R Narayanamurthy should let the present management to function on its own.
"Interference, in my opinion, is not desirable", he said.
Inorganic growth of any reasonable size looks unlikely, says JSW Steel’s Seshagiri Rao
Steel demand has grown at an anaemic 3.5 percent in FY17, but with the government focusing on infrastructure spend, steel demand could inch up to 4.5 percent in FY18. While JSW Steel is looking at increasing its capacity to 40 MT over the next decade, the company’s Joint MD and Group CFO, Seshagiri Rao tells Moneycontrol that he doesn’t expect inorganic growth to contribute to its expansion plans.
How do you intend to become a 40 MT steel-maker and by when do you plan to achieve this?
If you see the Draft National Steel Policy then you will see total steel capacity is expected to be 300 MT by 2030. India’s current installed steel capacity is 128 MT and we are 18 MT (approximately 15 percent of India’s installed capacity). To maintain our marketshare we need to have 45 MT capacity seeing the demand growth in India.
If you look at our plan, we have environmental clearances to increase the capacity of our Vijaynagar plant from 12 MT to 16 MT. At Dolvi, we have approval to double capacity to 10 MT. This means we have the approval to increase from 18 MT to 27 MT. Capacity expansion is in place at a very good investment cost per tonne. The 27 MT to 40 MT capacity expansion could be inorganic growth or through green field projects in Jharkhand or Odisha.
Do you see inorganic growth?
We do not see inorganic growth of any reasonable size happening in India.
What is the expected growth for steel demand in FY18?
Demand growth in FY17 was 3.5 percent and we expect demand growth to expand 1.2-1.3 times of GDP growth if investments pick up. This will take steel demand growth to 9-10 percent
“Captive Iron Ore Mines Must for Steel Industry”; JSPL Pitches at ‘India Steel – 2017’ Conference
Steel Industry should get priority and ‘must be integrated with captive iron ore mining for sustainable growth’, said Mr. Manish Kharbanda, Executive Director & Head of Mines & Minerals, Jindal Steel & Power Ltd, while speaking in ‘India Steel 2017’ Conference today (April 20, 2017) at Mumbai. In his address on ‘Interplay of Demand & Supply of Raw Materials in Steel Industry’, he stressed on preferential treatment to Steel Industry in mining auction.
Speaking on Interplay of Demand & Supply of raw materials in Steel Industry, “Auction of Iron ore blocks for merchant mining should be done after the steel plants are equipped with captive mines”, he added. In auction, most Iron & Steel plants cannot compete with merchant miners on account of their heavy debt, worsened by low demand & price in the past years.
The State Governments need to conduct faster auction and make sufficient numbers of mineral block available to steel sector based at the respective states to build competitive strength of manufacturing sector. In order to promote scientific mining, larger blocks of mining should be allocated.
Speaking on pricing of Iron ore, Mr. Kharbanda said that since more than 75% of the Steel plants do not have captive mines and are dependent on merchant miners, the Government should take step to make Iron Ore available at competitive price. The royalty rate of Iron ore is one of the highest in the World and should be reduced. The Government should take steps to ensure iron ore prices to be as competitive as possible for steel companies. “A price band may be set within which iron prices would be allowed to fluctuate or a cost plus formula may be adopted such that all iron ore miners would have to adopt in setting their market selling price,” he said.
‘India Steel 2017’ is being organised by the Ministry of Steel, Government of India and Federation of Indian Chambers of Commerce and Industry (FICCI) to provide a platform to stakeholders and key decision maker from the Steel and other related industry to interact with and explore new business avenues.
BHP Billiton plans $204M expansion of coal mine
MELBOURNE, Australia--BHP Billiton Ltd. (BHP.AU) is planning a US$204 million expansion of its coking-coal operations in eastern Australia to increase production of the steelmaking ingredient and reduce overall operating costs.
BHP and venture partner Mitsubishi Corp. (8058.TO) on Friday approved the investment in their Caval Ridge mine, where they plan to build a 6.8-mile overland conveyer system to transport coal from the neighboring Peak Downs mine to a preparation plant.
http://www.marketwatch.com/story/bhp-billiton-plans-204m-expansion-of-coal-mine-2017-04-20
RPT-Japan steelmakers scramble for coking coal to make up Debbie losses
Japanese steelmakers have bought coking coal from the United States, Canada and China to replace supply lost after a cyclone closed rail links in Australia, their biggest supplier, industry and trader sources said.
Still, the Japanese buyers are paying nearly double the $150 a tonnes price that they were discussing with sellers for second-quarter supply before the supply disruption. The supply talks are now on hold and prices will likely stay high until full volumes start flowing again.
In 2016, Japan bought about 71 percent of the 59.9 million tonnes of coking coal it consumed from Australia.
"We've tapped supplies by bringing forward shipping schedules of cargos from Canada and the United States, and buying some extra coal from China," an official at a major Japanese steelmaker who deals with raw material procurement told Reuters.
The emergency supplies were purchased at about $300 a tonne, said the official and a second source a major producer.
Premium coking coal prices from the east coast of Australia were quoted at $289.50 a tonne on Thursday, down from $314 a week earlier, but still more than 90 percent above levels four weeks ago, according to Platts TSI.
http://www.reuters.com/article/japan-steel-shortage-idUSL3N1HT3O1
Coking coal price correction turns into crash
The price of coking coal plunged again on Friday with the industry benchmark price tracked by the Steel Index dropping 9% or $26.10 to $263.40 a tonne as supply disruption following tropical storms in Australia begin to ease.
Last week the price of Australia free-on-board premium hard coking coal jumped to highest since the second quarter of 2011. That price spike was also the result of flooding in Queensland that saw quarterly contract prices negotiated at an all time high of $330.
http://www.mining.com/coking-coal-price-correction-turns-crash/
Regards
Anurag Singal
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