Coal news and updates

Paradoxical situation in coal industry

The overall coal inventory has now fallen to 57mt, most of which lying near pit-heads and some stored in remote coalfields not accessed by railways. To top this mess, Coal India want to reduce this inventory by 10mt this year

 In a couple of weeks from now, the Annual General Meeting of Coal India Ltd (CIL) is scheduled to take place in Kolkata. What would S Narasing Rao, chairman and managing director of CIL who runs the world's largest coal company, say to his shareholders?
 
Would he like to say that in the last quarter (April-June), the production growth was a measly 0.4% as against the target of 6.6%?
 
Or would he say that the off-take of coal by power generators actually has fallen due to idling of capacity (by producers like NTPC and others), who did not generate power from their 5,000MW plant all because of lack of demand?
 
Of course, if the national power grid was linked to the Southern Grid (which is likely by next year), this would not have happened.  NTPC would not have lost their production capacity, Coal India would not have had to stockpile and store the coal and the much-needed power sold to the starving Southern industries.
 
The overall coal inventory has now fallen to 57 million tonnes (mt), most of which lying near pit-heads and some stored in remote coalfields not accessed by railways. To top this mess, they (CIL) want to reduce this inventory by 10mt this year.
 
In the interim, Coal India has no option but to reduce production, though the Ministry of Finance has been asking Coal Ministry, why the production is lower?

In the past, the grievance was that racks were not available in time to evacuate coal, which was piling up at pitheads. In fact, at one time, not long ago, the power generators were encouraged to pick up the coal from production sites so as to maintain their power production.
 
Many coalfields under the Coal India management have various problems relating to completion of environmental formalities, and these are best seen on the web site of the main producing units of CIL.
 
In the meantime, Coal India, flush with enormous cash reserves of over Rs17,520 crore are looking at overseas investments to acquire mining properties, notably in Australia, Indonesia and far off Columbia, for both thermal and coking coal.
 
 The indigenous production of coal is estimated to reach 482mt in 2013-14 as against 452mt achieved in 2012-13. In 2012-13, expensive imported coal (137mt) came into the country, fuel supply agreement (FSAs) were signed, and with and some more to go and CIL had a busy year.

To get more information on CIL's activities, attempts were made to get through to compliance officer Viswanathan at Coal India at Kolkata, but were unsuccessful, as one of the two email addresses did not work (message bounced) and the other elicited no response!

International prices of coal have fallen due to lack of Chinese demand, and it may be worthwhile to get the high caloric value thermal coal for stock piling, at the cost of losing marginal interest and incurring storage costs at this time.  We must bear in mind that the situation in Syria may create a war-like condition in the west Asia region, resulting in an oil blockade, leading to an embargo!  What happens then?  Why can't we be on our toes?


Source: Money Life