Coal India to Spend Rs 12,000 Crore for Capital Expenditure, Infrastructure

Coal India Limited is planning to invest about Rs 6000 Crs towards capital expenditure in the next fiscal and an equal amount on augmenting other infrastructure, including rail connectivity.

According to a filing to BSE, CIL and its subsidiaries are proposing to invest around Rs 6,000 crore in 2015-16 towards capital expenditure. Further, an amount of around Rs 6,000 crore has been earmarked by CIL for railway and other infrastructure development for 2015-16.

 

CIL also unveiled its roadmap, of strategies to be adopted, to attain the one billion tone coal production by 2019-20. 

With the projected coal demand of the country hovering around 1,200 million tonnes (MTs) by 2019-20, at an envisaged growth rate of 7 per cent, CIL is expected to chip in one billion tonnes, of which, 908 million tonnes is the expected contribution from the identified projects.

The two CIL subsidiaries---Mahanadi Coalfields Ltd and South Eastern Coalfields Ltd (SECL) are expected to play a pivotal role in its quest of attaining the one BT production with 250 million tonnes and 240 million tonnes respectively, he said.          

In the biggest ever disinvestment exercise, the government in January sold 10 per cent stake in Coal India for about Rs 22,600 crore.

 

Source

Read More...

With CCI approval, Coal India on track to boost output by 50%...

 

India’s rising coal imports, increasingly a reason for the country’s wide trade and current account deficits, may be reined in considerably in the next few years, report Raj Kumar Ray and Aftab Ahmed in New Delhi. With the Cabinet Committee on Investment (CCI) approval in hand, the railways is set to complete work on three rail projects by end 2016, helping Coal India and its arms evacuate the black gold from some of their big mines and transport them to industrial hubs. The facility will help increase domestic coal output by 250 million tonnes or nearly 50%.

The three projects — Tori-Shivpur-Kathautia (Hazaribagh) triple line for the North Karanpura Coalfield in Jharkhand, Jharsuguda-Barpalli double line for Ib Valley coalfield in Orissa and Bhupdeopur-Raigur-Mand in Chhattisgarh — were stalled for nearly a decade due to various reasons. With the CCI clearance, work has begun at some of the sites, a senior official told.

“The clearance for these railway lines would be a milestone in terms of efforts to step up domestic production of coal. The rail connectivity has the potential to generate over 250 million tonnes of coal annually, which is almost half of what CIL produces now,” said a coal ministry official, asking not to be named.

India’s domestic coal output, mainly from Coal India, has grown slowly from 431 million tonnes (mt) in 2006-07 to 576 mt last fiscal, while imports more than trebled from 41.5 mt to 138 mt as power plants, steel and other units consumed more fuel to aid growth in Asia’s third-largest economy. Coal imports as a percentage of GDP almost doubled from 0.5% in 2006-07 to 0.9% in 2012-13, and was one of the main reasons along with oil and gold imports for widening the current account deficit.

While many captive coal blocks allotted to private players failed to take off, the pressure has mounted on Coal India to raise output. CIL has often blamed delays in green clearances, land acquisition and lack of rail links from pithead to industrial units as major reason for not being able to scale up its operations.

In this context, the three rail projects will address much of the coal shortage in coming years. The Jharsuguda-Barpalli rail line is essential for transportation of coal from the Ib Valley coalfield of Mahanadi Coalfields with a potential of 90 million tonnes per annum. The North Karanpura Coalfield covers an area of 1,230 square kilometres and has total coal reserves of 13.1 billion tonnes with a potential output of 70 mt annually. The Mand Raigarh Coalfield can supply 100 mt of coal annually once the rail link is built.

The environmental clearance for Jharsuguda-Barpalli was given last month and the project is likely to be completed by June 2016, an official said.

The Rs 2,345-crore Tori-Shivpur-Kathautia project has now got environmental clearance and land acquisition for some stretches is under way. The project is likely to be operational by December 2016.

In the case of the Rs 2,500-crore Bhupdeopur-Raigur-Mand line, the CCI/CCEA has resolved the issue and a special purpose vehicle led by Ircon will be set up by September 2016.

The three railway link projects are a part of the three inter-state rail corridor projects proposed by CIL that are dedicated to coal evacuation in the Naxal-affected areas in Orissa, Chhattisgarh and Jharkhand. CIL’s total investment in these three corridors are of the order of Rs 6,000 crore.

Source

Read More...

MMTC, Adani in fray for NTPC coal tender…

 

State-owned MMTC Ltd, Adani Enterprises Ltd and Knowledge Infrastructure Systems Pvt. Ltd (KISPL) are among the firms in the fray for supplying 7 million tonnes (mt) of imported coal estimated to be valued at around Rs. 4,500 crore to NTPC Ltd.

The tender for the largest such package in the current fiscal year was called by NTPC, India’s largest coal consumer, which has a coal requirement of 166.7 mt in the year to March.

Of this, 150 mt is to be supplied by state-owned Coal India Ltd (CIL) and Singareni Collieries Co. Ltd; the balance 16.7 mt is to be sourced from overseas. NTPC has already ordered for 9.7 mt with the price bids opened for the balance 7 mt this month.

“This 7 mt is being sourced through four separate tenders for which the price bids have been opened. They are under evaluation,” said a senior NTPC executive requesting anonymity.

Another NTPC executive confirmed that MMTC, Adani Enterprises and KISPL were in the fray for supplying fuel to India’s largest power generation utility.

The utility has the capacity to generate 42,454 megawatts (MW) of electricity with 17 coal-fuelled projects. The demand for coal will increase with the utility setting a target of becoming a 128,000 MW power producer by 2032. Of this, 56% or 71,680MW will be coal-based.

“Notice Inviting Tender (NIT) for imported coal procurement was notified in newspapers and is currently under evaluation therefore the information sought can not be shared at this stage,” an NTPC spokesperson said in reply to emailed queries.

Queries emailed to the spokespersons of MMTC and Adani Enterprises on Wednesday remained unanswered as of press time on Monday.

“We are one of the participants in the recent NTPC tender for imported coal,” a KISPL spokesperson said in an emailed response. “We are awaiting formal announcement and award of contract by NTPC.”

Analysts said NTPC must improve procurement efficiency.

“The negotiated route with coal miners in select geographies such as Indonesia, South Africa and Australia may have greater procurement efficiency given that the volumes are large and the miners may favour long-term contracts in view of uncertainties ahead, but these need to be weighed against the established procedures and objectives of transparency,” said Dipesh Dipu, a partner at Jenissi Management Consultants, a Hyderabad-based resources-focused consultancy.

“In future, adopting a globally accepted standard contract of coal trade may also enhance procurement efficiency,” said Dipu.

NTPC, India’s largest power generation utility, has been allocated six captive coal blocks by the government and aims to mine 15 million tonnes per annum in three years. However, it has not been able to make them operational yet.

“India has a strong structural demand for coal, given the country’s reliance on thermal power. We expect the country’s thermal coal-based power capacity to increase from an estimated 123GW at the end of FY13 to ~150GW by FY16,” UBS Global Equity Research wrote in a 18 December report.

“Thereby, we expect the total coal demand to increase from~720 mt in FY13 to 920 mt in FY16. However, we expect the domestic coal supply to only cater to 76% of the FY16 coal demand, with rest of the requirement being filled up by imports,” it said.

NTPC’s orders comes at a time when demand for the fuel in the country is expected to grow from 649 mt per year now to 730 mt in 2016-17, and its failure in securing coal assets overseas.

Of India’s current capacity of 227,356.73MW, 58.6%, or 133,188.39MW, is fuelled by coal.
NTPC has an 18.29% share of India’s installed power generation capacity.

Source

Read More...

Coal India gets environment ministry nod for 23 projects...

 

Coal India (CIL) has received approval from the Ministry of Environment and Forests for 23 projects after intervention by the Cabinet Committee on Investment (CCI).

"As on December 30, 2013, out of the 20 projects pending with MoEF (Ministry of Environment and Forests) for EC (environment clearance), 16 proposals have been granted EC," the Coal Ministry said in a note highlighting the action-taken report on decisions by the CCI.

Of the four projects awaiting environment approval, three belong to Coal India unit Western Coalfields Ltd and one to South Eastern Coalfields Ltd, another unit.

In addition, two of five projects have been granted stage-II forest clearance (FC), and five of 15 proposals have been given stage-I FC.

Of the projects awaiting stage-II FC, two belong to Central Coalfields Ltd and one to South Eastern Coalfields.

Two projects of Central Coalfields, four of South Eastern Coalfields and four of Central Mine Planning & Design Institute Ltd, Coal India's consultancy firm, have yet to get stage-I FC.

The government set up the CCI to expedite the decision making process for clearance of projects in the infrastructure sector.

The Coal Ministry said four meetings, including one on December 11, have been held among officials of the two ministries and Coal India to review and expedite clearances.

Source

Read More...

Government eases environment clearance norms for coal mines...

 

The government has eased environmental clearance norms for expanding coal mines, which will help state-run Coal India boost output by a record 30-40 million tonnes in the new financial year and ease the crippling fuel scarcity in the power sector.

The ministry, which has taken a pro-industry stance since Veerappa Moily took charge, has ruled that mines with an annual capacity of up to 8 million tonnes can expand capacity by up to 50% without holding public hearings. This exemption will apply to one-time capacity expansion in projects that do not involve land beyond the existing lease area. Several mining projects have been stalled because of the earlier provision that required public hearings if the capacity was being expanded by 25%.

The decision is a big boost for Coal India, which has been under enormous pressure to boost output as large power generation capacity is idling or underutilised because private investment led to record capacity addition in the last fiscal year while coal output stagnated.

Coal India produced about 450 million tonnes last fiscal. It has 400 mines with annual production of less than 8 million tonnes. "We are easily looking at an increase of 30-40 million tonnes increase in production in the next financial year ... the increase could be even more, but, at this stage we will study the possibility of increasing production by 50% for all mines in this category. This order will give a boost to production teams at every mine as they can increase production by 1 to 1.5 million tonnes without additional hearing," said Coal India Limited Director N Kumar.

Tuesday's order increases the ambit of an expansion that has been in place since December 2012. Former environment minister Jayanthi Natarajan had exempted existing coal mines with plans to increase production by as much as a quarter of the current permissible production levels from holding public hearings as part of the environment clearance process.

The decision to further relax the clearance process for expansion projects comes at the behest of the coal ministry, which argued that the December 2012 exemption norms were unfavourable for smaller coal mining projects. For mines with lower permissible annual production levels, a 25% capacity increase worked out to a negligible increase. Therefore, were unable to avail of the exemption from holding public hearings for getting the clearance.

Moily's latest industry-friendly move comes at a time when the environment ministry has been under attack, particularly from infrastructure ministries, for delays in clearing projects. The coal ministry has consistently maintained that these delays were primarily responsible for lower coal production. However, some experts say delays in environmental clearance is only part of the reason for Coal India's failure to meet annual production targets. Lower coal production adversely affected power, steel and other industry projects, all of which a section of the government and industry claimed was derailing India's growth. The coal ministry, in particular, has since 2009 been demanding a more liberal and pro-growth environmental regulatory framework.

Source

Read More...

CIL to once again invite fresh applications for coal import...

 

State-owned  Coal India  (CIL) will once again invite fresh applications from interested entities for importing coal that would be supplied to power plants under fuel supply agreements as the earlier tender floated by the PSU elicit no response.

"We will float a fresh tender anytime...There was no response to the the tender floated earlier as the potential people (the PSUs like STC, MMTC) because of some apprehensions expressed by them," Coal India Chairman and Managing Director S Narsing Rao told PTI.

Rao said the company intends to import five million tonnes (MT) of coal to meet the shortfall against deliveries under fuel supply agreements (FSAs). CIL had for the first time invited th applications with regard to coal import in November, 2013 which closed last month.

"(CIL invites) NIT (Notice Inviting Tender) for selection of agency from government department or government owned company or public sector entity for supply of imported coal to purchaser (power producers) at delivery point (power plant end)," the company said on its website.

The company had said that the agency will supply coal to various power plant across the country till March 2015. "The successful bidder shall procure imported coal through tendering for the quantity required for each quarter separately," CIL said.

CIL had said in September last year said that it is likely to import 15 million tonnes of coal for power utilities as part of meeting the FSA commitment. According to the new FSA, Coal India will supply 65 percent of the contracted amount from domestic sources and another 15 percent through imports with pass-on pricing model.

Source

Read More...

Coal imports rise 20% to help fuel new power plants...

 

The coal imports rose 20% to 105.8 million tonnes in April-October from a year earlier as power producers turned to Indonesia to help feed new plants, according to data from mjunction services, an online market operator.

Regulatory and bureaucratic delays in adding new mines and expanding existing ones have made India the No. 3 importer of coal, even though it sits on what BP ranks as the world's fifth-largest reserves. Imports leaped 34% to 137.56 million tonnes in 2012/13.

April-October shipments of thermal coal, used in power generation, jumped 28% to 81.6 million tonnes, according to mjunction services, which is jointly owned by Tata Steel Ltd and SAIL.

India's generation capacity increased in the seven months with the addition of new plants, while benchmark thermal coal prices fell, reaching their lowest levels in almost four years in September.
Imports of coking coal for making steel, the second-biggest contributor to total shipments, were nearly flat at 19.35 million tonnes.

The Indian government does not regularly release data on coal imports.

Its domestic production, 81% of which is from state-owned Coal India Ltd , could fall short of demand by 155 million tonnes this fiscal year, according to the Coal Ministry. That could lead to a 13 percent rise in imports.

Coal India has fallen short of its production target for at least the past six years due to difficulties in obtaining environmental approvals, lack of railway access and other issues. Its April-December output of 319.2 million was 4% less than its target for the period.

The world's largest coal mining company launched its first tender in November, seeking to import 5 million tonnes of coal to supply power producers until March 2015.

The need for reform of the coal mining sector means India is expected to remain a big importer, with Coal India estimating a shortage of 350 million tonnes for 2016-17.

Indonesia could be the biggest beneficiary. It already accounts for more than 50 percent of India's coal imports, ahead of Australia and South Africa.

Several coal blocks allocated to companies from 1998 to 2009 for development are yet to start production. Recent court-mandated investigations into the allocations by the Central Bureau of Investigation (CBI) have further delayed mining.

The CBI said last week it had registered two cases regarding the alleged supply of low quality Indonesian coal by a private company to fuel power plants operated by National Thermal Power Corporation.

Source: Business Standard

Read More...

Six firms get notice for delay in development of coal blocks...

 

The coal ministry on Friday sought explanation from six companies including state-owned NTPC, Damodar Valley Corporation and private player Tata Steel for the allegedly slow progress in development of their allocated captive coal blocks.

These companies have been asked to reply within 20 days, explaining why the delay should not be held as a violation of the terms of allocation and why the block should not be deallocated.

Chhattisgarh Mineral Development Corporation, Utkal Coal and Gujarat Mineral Development have also been issued similar show-cause notices by the ministry.

The coal blocks in question are Utkal C, Tara, Kerandari, Khagra Joydev, Ganeshpur and Morga-II. The ministry issued notices to the companies following recommendations of an inter-ministerial group constituted to review development status of captive coal blocks.

Source

Read More...

Coal India misses April-December output target by 15 mn tonne...

 

State-owned Coal India Ltd (CIL) has recorded an output of 319.19 million tonnes for the April-December period, missing the target by 4.5%.

The world's largest coal miner has set a production target of 334.44 mn tonne for the nine-month period.

On the offtake front, the miner missed the target by 3.5% in the April-December period to 341.52 mn tonne as against 353.94 mn tonne, the PSU said in a filing with BSE.

However, no reasons were given by the company for missing both the output and offtake target.

Coal India has also marginally missed its target for December by producing 44.49 mn tonne against 45.06 mn tonne.

As regards offtake during December, it stood at 42.92 mn tonne against a target of 43.51 mn tonne.

CIL, which accounts for over 80% of the domestic production, contributed 452.5 MT of coal in the previous financial year, compared with the target of 464 mn tonne.

The Coal Ministry has set a production target of 482 mn tonne and offtake of 492 mn tonne for CIL for 2013-14.

Coal India shares closed at Rs 283 a piece on BSE, down 3.05% against the previous close.

Source: Business Standard

Read More...

Year end review of Indian Coal Sector for the year 2013 by Coal Ministry...

 

Coal Ministry has done an year end analysis of the progress made by the Indian Coal Sector during the year 2013.

The same has been depicted below:

 

 

Major Highlights:

• Regulator proposed for Coal Sector
• Public Private Partnership to augment coal production
• Thirty eight captive coal blocks comes under production
• Year End Review of Ministry of Coal

Coal sector witnessed a number of initiatives during 2013 to augment coal production and supply. Regular reviews of captive coal blocks were held by Inter-Ministrial Group to expedite their development, fuel supply agreements were signed with Power Sector and setting of Coal regulator approved. Under the bidding policy, seventeen coal blocks allotted to the Government Companies and thirty eight coal blocks brought under production. Highlights and achievements of the Coal Ministry during the year are as follows:

Assured coal supplies to 78,000 MW projects to boost power production

In a major boost to the power sector, the Government approved supply of coal to power plants with a capacity of 78,000 MW. Commissioned or to be commissioned during April 2009 to March 31, 2015. Coal India Limited(CIL) has already signed 157 Fuel Supply Agreements for a capacity of 71,145 MW. This will not only increase the power generation further but will also fast track several power project which are under consideration.

Coal Regulator proposed for Coal Sector

The Government has approved the setting up a Regulatory Authority for Coal Sector on June 27, 2013. As the enactment of the legislation through the Parliament would take some time, therefore, it was decided that a non-statutory regulator be set up through an appropriate executive order. Accordingly, the matter has been referred to the Ministry of Law for advice/ consultation for framing the executive order. The Coal Regulatory Authority Bill was also introduced in theLok Sabha on December 13, 2013 for its consideration.

Public Private Partnership to Augment coal production

The Government has decided to initiate Public Private Participation (PPP) to augment coal production in the country. Accordingly, a committee has been set up under the chairmanship of Secretary (Coal) with representatives from Planning Commission, Ministry of Finance (DEA), Ministry of Labour, Ministry of Law & Justice (DLA) among others to recommend a framework for the PPP. The committee deliberated on the various models including engaging Mine Developer cum Operators (MDO) & In consultation with all the stake holders, the Government is in the process of finalizing a Model Concession Agreement (MCA) for engagement of MDO in CIL.

Further Disinvestment of Neyveli Lignite Corporation

Disinvestment of 3.56% paid up equity capital of Neyveli Lignite Corporation (NLC) out of Government of India’s shareholding (93.56%) has taken place through Institutional Placement Programme (IPP). This has made NLC compliant with the norms as per SEBI regulations. The 59701260 shares have been sold @ Rs. 60/- per share and total sale proceeds received by the Government are Rs.358.29 Crores.

Allocation of Coal Blocks to Government Companies

Under newly initiated bidding policy seventeen coal blocks, fourteen blocks for specified end-use i.e. Power and three blocks for Mining were allocated to various State Government Companies/Corporations/CPSUs. The proposed Coal Mines Production and Development Agreement to be signed by the Government with the respective eligible Companies is under finalization.

Further, the Government has also decided to put on offer five lignite blocks located in the states of Gujarat and Rajasthan for Power/Commercial mining/ Underground Coal Gasification, for allocation to Government Companies and invited applications July 29, 2013 from Government Companies/Corp. particularly from the state of Gujarat and Rajasthan, keeping in view the fact that lignite cannot be transported over long distances due to its low calorific value, high moisture and soft/brittle nature of mineral, making it susceptible to catch fire. The applications received in response to the NIA are under process.

Four coal blocks have also been identified for allocation to power projects on the basis of competitive bids for tariff and applications for the same were invited on December 20, 2013. Besides this, procedure for allocation of area containing coal through auction by competitive bidding is under process.

Thirty eight captive coal blocks come under Production

The target fixed for coal production from the captive coal blocks for the year 2013-14 is 46.15 million tonnes.As on date (upto October, 2013), 38 captive coal blocks have come under production. The production achieved during the year 2013-14 (upto October, 2013 provisional) is 21.740 million tonnes (13.645 million tonnes for private companies and 8.095 million tonnes for government companies).

Third Party sampling of coal supplies introduced

Various consumers of Coal India Limited have been raising their concern about the quality of coal supplied. In order to address these concerns, CIL has introduced Third Party Sampling and analysis of coal supplied to various power plants in the country. For this purpose, CIL has engaged independent third Party agencies for sampling and analysis of coal at suppliers’ end and the system has been made operational from October 1, 2013

Source: Coal Ministry

Read More...

CIL to begin final exploration round in Mozambique early next financial year...

Coal India Ltd (CIL), the Kolkata-based world’s largest coal miner, will begin third and final round of exploration in two of its blocks in Mozambique early next financial year. This brings the miner a step closer to commissioning mining in its maiden overseas project by 2016.
 
“The second phase of exploration, which is currently on, has seen minor delays owing to the onset of monsoon in that nation. That made the site inaccessible for some time. We will definitely award drilling contracts for the third phase coming March after which the exploration work will start,” said a senior CIL official.
 
The company has already completed 17,000 meters of the overall 30,000 meters of drilling in the ongoing phase. The miner was allocated two blocks with reserves exceeding a Billion Tonne (BT) in a government-to-government deal in Maotize in Tete province in the African nation in 2009.
 
The idea is to import the entire quantity of coal available in the two blocks to India to bridge the gap in demand and supply of coal which currently stands at over 135 million tonne (MT) for domestic industries. However, CIL has already missed the original deadline of starting production by 2013.
 
The progress on the project has been slow owing to procedural delays in outsourcing drilling contracts and the inter-governmental differences over the pattern of funding apart from the lack of local infrastructure support, including roads and ports. The official said the company hopes by the time mining begins in 2016, Mozambique government builds infrastructure for evacuation.
 
“The Mozambique government is building infrastructure. Also, we expect a railway carrying capacity of 6 MT annually to be free next year after the work of another mining company which is currently working there closes,” the executive said. Apart from infrastructure issues, the extent and mode of local expenditure has been a bone of contention between the Indian and the Mozambique governments and a major irritant stalling progress of the project.
 
CIL has been allocating Rs 6,000 crore annually over the past few years for overseas investments but has failed repeatedly in its acquisition plans. The miner had earlier shortlisted Australian miner Peabody Energy’s Wilkie Creek mine and US-based Massey Energy Co’s Sidney mines but failed. It had also considered buying stake in Indonesia’s PT Golden Energy Mines Tbk (GEMS) but lost the deal owing to bureaucratic hurdles.

Source: Business Standard

Read More...

CCEA relaxes 3-year tapering coal linkage policy...

 

The Cabinet Committee on Economic Affairs (CCEA) relaxed the coal tapering linkage policy thereby relaxing the coal supply to 9 power projects with investments worth about Rs 60,000 crore with capacity of 11,000 megawatt (MW).

These power projects which were initially proposed to benefit from this relaxation were -Essar Power’s Mahan,  Adani Power’s Tiroda project, Damodar Vally Corporation’s Mejia project, Gujarat State Electricity Board’s Ukai project and Mahagenco’s Parli project.

These power plants already have got their own captive coal supply blocks, but because of environmental clearances and other issues these power blocks could not be developed and hence they wanted the government to ensure that coal supplies to these power projects continue for a period of six years instead of three years which is a current norm as per the tapering coal linkage policy.

 

Source

Read More...

Power Sector Yet to Get its Act Together...

 

Like any other year, this calendar year also did not bring any good cheer for the power sector.

Fuel linkages be it coal, gas or other sources were the factors that held back the sector growth. While power plants from AP to Maharashtra stalled production as promised gas linkages from power plants from AP to Maharashtra continued to reel under acute fuel shortage as Reliance Industries’ eastern offshore KG-D6 fields failed to supply required gas because of a sharp drop in gas production from those fields.

With six power plants shutting down in states including AP and Maharashtra, power generation to the tune of 3000 MW was affected as Reliance failed to supply gas.

Similarly thermal power plants that are dependent on coal had minimal coal stocks throughout 2013 with most of them reporting 60-70 per cent plant load factor.

CIL despite interventions from the Prime Minister’s office failed to honour the FSAs made with different power plants. Following PMO intervention 157 of the 173 supply pacts were signed.

As far as generation capacity addition is concerned the overall conventional capacity addition has been about 50 GW against a target of 62 GW in this plan period.

The peak and energy deficits are down to 10.6% and 8.5%, respectively. The country aims to add over 100 GW in the 12th Plan, half of  which is to come from private  sector.

The silver lining however was government inviting bids for two ultra mega power plants, one each in Odisha and Tamil Nadu. To be built at an estimated cost of `25,000 crore each these plants could help ease India’s power deficit problems.

Source

Read More...

Government allows Coal India to produce gas from coal bed methane...

 

The Union Cabinet on Thursday decided to give state-owned miner Coal India Ltd a licence to produce natural gas from coal seams (CBM) in its existing mines.

The cabinet committee on economic affairs (CCEA) headed by Prime Minister Manmohan Singh, allowed Coal India, the world’s largest coal miner, to explore and produce coal bed methane (CBM) in its existing mines, coal minister Sriprakash Jaiswal said. “Yes, it is approved,” he told reporters in New Delhi.

Currently, rules and regulations prohibit mining firms from extracting CBM during mining as the policy does not allow for simultaneous extraction of methane (CBM) and coal. CBM exploration and production is allowed only in pure coal-seam gas bearing blocks which are auctioned.

Since 2001, 33 CBM blocks have been awarded in four auction rounds. Besides, two CBM blocks to Oil and Natural Gas Corp. (ONGC) and one to Great Eastern Energy Co. Ltd were awarded on a nomination basis.

According to the directorate general of hydrocarbons (DGH), India has CBM reserves of about 4.6 trillion cubic metres. Currently, three CBM blocks are producing around 0.15 million standard cubic metres per day (mscmd). This is likely to touch 7.4 mscmd by 2013, according to the DGH.
Sources said CIL holds at least 20% of the estimated 60 billion tonnes of coal resources in India. It has several coal mines in eight states, which are estimated to have CBM reserves of 3.5-4 trillion cubic feet (Tcf). Many of its acreage are gaseous and unsafe mines, where mining of coal is possible only after the extraction of CBM.

Extracting methane (gas) ahead of coal mining from seams will allow CIL help unlock very significant quantities of coal reserves in areas of Jharkhand, West Bengal.

Sources said Coal India will be allowed to explore for CBM in the mines that were given to it on nomination basis. It can take a state-owned explorer like Oil and Natural Gas Corp. (ONGC) as a partner for the venture.

Union oil minister M. Veerappa Moily had originally proposed allowing Coal India to rope in even private firms for CBM exploration and production. However, the proposal was killed after strong objections from Jaiswal. CBM extracted by CIL will be priced and marketed as per the oil ministry’s gas pricing and utilisation policy.

Sources said CIL had short-listed five blocks in Jharkhand with estimated CBM reserves of about 1 Tcf for exploration in the first stage. They are: Munidih (282 Bcf), Kathara (282 Bcf), Asnapani (212 Bcf), Putki Buliwari (247 Bcf) and Mohuda (14 Bcf). These five assets are considered to be gaseous and unsafe mines at present. CBM extraction would help CIL unlock nearly 100 million tons of medium grade coking coal, and about 1 Tcf of gas.

Source

Read More...

Plan panel drafting model accord for Coal India...

 

In a move to increase domestic coal production, the Planning Commission is preparing a model concession agreement for state miner Coal India (CIL) to engage mine developer cum operators (MDOs), the coal ministry said Thursday.

"The Planning Commission in consultation with all the stakeholders, including Ministry of Coal and Coal India Ltd., is in the process of finalising a model concession agreement for engagement of MDOs in CIL," Minister of State for Coal Pratik Prakashbapu Patil said in a written reply to parliament.

A committee was set up under the coal secretary with representatives from the Planning Commission and ministries of finance, labour and law to recommend a framework for public-private partnership (PPP) with Coal India, the minister said.

"The committee deliberated on the various models, including engaging MDOs," Patil said.

Under the MDO model, a coal block owner contracts with a third party for the mining operations, including land acquisition and resettlement and rehabilitation of people displaced.

The minister also said no allocations were made to private companies during 2012, as well as in 2013.

As against the 2013-14 production target from allocated captive coal blocks of 46.15 million tonnes, the production achieved up to October is 21.74 MT - 13.645 MT for private companies and 8.095 MT for government companies, Patil said.

Source

Read More...

Coal India’s tender for Rs. 3,000 crore coal import project fails to attract participants...

 

State-owned Coal India Ltd’s tender seeking to appoint a vendor for a Rs. 3,000 crore project to import five million tonnes (mt) of coal to help make up for India’s short supply has failed to attract any participants, a top executive said on Tuesday.

The deadline for the tender was 11am on Tuesday.

“There is no participation in the tender till now (1430 hours India time)… We will wait till the end of the day (to see if there are any applicants),” said the official, who is close to the tendering process but declined to be named. “It is too early to say what the reason is. It will have to be analysed.”

Coal India, the world’s largest coal mining company, floated a tender on 15 November for selecting a vendor via competitive bidding to supply imported coal as its own production of about 482 mt (target in the year to March) is below India’s demand of over 600 mt a year.

Source

Read More...

Coal India hikes prices of Western Coalfields produce by 10 per cent...

 

Coal India on Monday hiked prices of non-coking coal produced by subsidiary Western Coalfields by 10 per cent, which would earn it Rs. 140 crore in additional revenue this year.

Cola India Ltd (CIL) had raised prices of non-coking coal produced by all other subsidiaries in May which is expected to fetch an additional revenue of Rs. 2,119 crore this year.

"We had increased by 10 per cent (price of non-coking coal on Western Coalfields. Last time, during rationalisation in the end of February 2011, there was a substantial cut. In the process, it had had some impact," Coal India CMD S Narsing Rao told reporters after the board meeting that lasted for about seven hours.

"So, now we have increased it by 10 per cent on WCL (Western Coalfields)."

The price hike will take effect from Tuesday. On account of this increase, Western Coalfields will earn additional revenue of Rs. 139.84 crore for 2013-14," parent Coal India said in a filing to the BSE.

In another decision, the board approved revision of raw non-coking coal sizing charges and rapid loading charges with effect from December 17. This hike would fetch an additional Rs. 197 crore to the company this year.

"This will be applicable to all subsidiaries of Coal India Limited for regulated and non-regulated sectors," the filing noted.

The largest revenue contributor to CIL on account of price revision would be Mahanadi Coalfields which is expected to contribute Rs. 686 crore, followed by Rs. 664 crore from Northern Coalfields and Rs. 495 crore from South Eastern Coalfields.

Central Coalfields' contribution to the kitty would be about Rs. 248 crore, while Bharat Coking Coal would get Rs. 103 crore additional revenue and Western Coalfields Rs. 22 crore.

Coal India subsidiary Eastern Coalfields is the only arm which would incur a loss of Rs. 99 crore due to the price revision.

CIL accounts for over 80 per cent of the domestic coal production.

Source

Read More...

Coal India Ltd to invest Rs. 7.6k Crore to develop Kusmunda mine...

 

State-owned Coal India Ltd (CIL) will invest Rs 7,600 crore to develop Kusmunda mine to a production capacity of about 50 million tonne per annum — the largest in the country. At present, India's largest mine has a total production capacity of 35 mt.

If achieved, CIL officials said this South Eastern Coalfields Ltd (SECL) mine would be one of the largest in the world. "At present, there are open cast mines with capacities of about 40 million tonne in China, but if SECL manages to expand its present capacity from 15 to 50 million tonne in the next few years, it is likely to be one of the largest globally," said a senior CIL official, requesting anonymity.

"The plan includes ramping up railway capacity for evacuating this coal. The investment figure is included in the project cost. The production capacity of 50 million tonne will be achieved through existing techniques of shove-dumper mix and in-pit conveyors, which will transport the coal from the mine to the stockyard," he added. At present, Gevra under SECL, which is a subsidiary of CIL, is the largest in India. It has a total production capacity of about 30 mtpa.

CIL has 148 projects at various stages of implementation of which 90 have already received forest and environment clearance, and 134 are expected to contribute 334 million tonne by 2017.

The company has identified 126 new projects with a targeted capacity of 438 million tonne per annum in the Twelfth Five Year Plan period. Project reports of 28 of these have already been prepared, with 60 projects expected to contribute 88 million tonne by 2017.

Coal demand is expected to grow by 7.09% till 2016-17 and total demand for coal during the period will be 980 million tonne, up from 769 million tonne during 203-14. By 2017, domestic production is likely to touch 795 million tonne of which Coal India is expected to supply 615 million tonne — 77% of total production.

Source

Read More...

CCI imposes Rs.1,773 crore penalty on Coal India, subsidiaries...

 

The Competition Commission of India (CCI) has imposed a penalty of Rs.1,773 crore on Coal India Ltd (CIL), the country’s largest coal miner and its subsidiaries (Mahanadi Coalfields Ltd, Western Coalfields Ltd and South Eastern Coalfields Ltd).

A spokesperson for the antitrust regulator said that the state-owned coal miner, the world’s largest, had been found guilty of violating section 4(2) (a) (i) of the Competition Act of 2002, which relates to abuse of a dominant position.

The case against Coal India was registered by the Maharashtra State Power Generation Co. Ltd and Gujarat State Electricity Corp. Ltd, the spokesperson said.

“CCI held that CIL through its subsidiaries operates independently of market forces and enjoys undisputed dominance in the relevant market of production and supply of non-coking coal in India. The commission inter alia also held CIL and its subsidiaries in contravention of the provisions of section 4(2)(a)(i) of the Competition Act, 2002, for imposing unfair/ discriminatory conditions in fuel supply agreements (FSAs) with the power producers for supply of non-coking coal,” a CCI release said.

“Apart from issuing a cease and desist order against CIL and its subsidiaries, CCI directed modification of FSAs in light of the findings and observations recorded in the order. The impugned clauses related to sampling and testing procedure, charging transportation and other expenses for supply of ungraded coal from the buyers, capping compensation for supply of stones, etc.,” the release further added.

Phone calls made on the mobile phones of S. Narsing Rao, chairman of CIL, and a company spokesperson remained unanswered.

“Further, for effecting these modifications in the agreements, CIL was ordered to consult all the stakeholders. CIL was also directed to ensure parity between old and new power producers as well as between private and PSU (public sector unit) power producers, as far as practicable.,” the release said.

Source

Read More...

CIL has signed 157 fuel supply agreements...

 

State-owned Coal India Ltd (CIL) has signed 157 fuel supply agreements (FSAs) so far for a capacity of 71,145 MW, the Parliament was informed today.

"A Presidential Directive has been issued to Coal India Ltd (CIL)... Accordingly, 157 FSAs have been signed so far for a capacity of 71,145 MW," said Minister of State for Coal Pratik Prakashbapu Patil in a written reply to the Rajya Sabha.

The Minister said as per the New Coal Distribution Policy (NCDP) 2007, CIL has to supply coal to such power plants with which it has entered into fuel supply agreements.

The government had recently approved coal supplies to thermal power plants which are commissioned/to be commissioned by March 31, 2015.

Replying to a question on power projects that have been stuck due to unavailability of coal, Patil said Coal India has been dispatching more than 90 per cent of the quantity committed under fuel FSA/memorandum of understanding (MoU).

"During the last three years, despatches to power utilities have been 91 per cent, 91 per cent and 92 per cent of the targets in 2010-11, 2011-12 and 2012-13, respectively.

Coal dispatches were 87 per cent in the current year up to October, 2013," the Minister said.

As per the coal stock report of Central Electricity Authority (CEA) as on Nov 28, 2013, coal stock position of Thermal power plants (TPPs) was 16.03 million tonnes (MT) as against 9.19 MT during last year.

"However, there are a few power plants with source of fuel other than linked coal from CIL, which may be impacted because of non-availability of inadequate availability of coal.

Information regarding such plants is being sought for from CEA," he added.

Amid continuous delays, the Cabinet Committee on Investment had earlier said that timelines for signing of fuel supply pacts for power projects of 78,000 MW capacity should be met.

Two deadlines set for signing of the fuel supply agreements by Coal India (CIL) with the power producers could not be adhered to. The Coal Ministry had set the deadline of August 31 for signing of the FSAs, which could not be met.

 

Source

Read More...