Coal news and updates

Sical may switch to handling coal at Kamarajar Port

The board of Ennore’s Kamarajar Port Ltd’s (KPL) has consented to Sical Logistics handling private coal (other than the coal belonging to the Tamil Nadu Electricity Board) instead of iron ore at the private terminal, which has been idle for three years. However, this can begin only after February 2016.

The board met on Saturday and took cognizance of the fact that Sical’s iron ore terminal has been idle since 2011 due to a ban on iron ore export by the Supreme Court.
Terminal handover

At present, the Chettinad group is handling non-TNEB coal at the port and a competing facility cannot handle such coal till February 2016, according to sources.

Sources said that KPL took the advice of the Attorney-General in the matter. He said that Sical, which now belongs to the Bangalore-based Coffee Day group, can handle only non-TNEB coal, and that too after February 2016. This proposal is legally valid under the ‘mitigation relief measure’ when there is a change in law (in this case the ban on iron ore export by the Supreme Court).

KPL will now take the proposal to the Shipping Ministry for clearance. This will help the port handle the increasing coal volume. In 2013-14, KPL handled a total of 27.34 million tonnes (mt) of cargo, of which 22.49 mt was coal.
Cutting losses

The port’s two dedicated berths handle thermal coal for TNEB. The Chettinad terminal is likely to achieve 100 per cent capacity utilisation, which warrants another facility to handle non-TNEB coal, sources said.

In September 2006, KPL signed an agreement for an iron ore terminal on a 30-year BOT basis with Sical Iron Ore Terminal Ltd, with an approved project cost of ₹480 crore in two phases of 6-mt-per-annum capacity at an investment of ₹360 crore. The commissioning activities depend on the permits on the movement of export of iron ore by Karnataka and Supreme Court.

Sources said Sical could have lost around ₹600 crore due to terminal remaining idle. It will need another ₹200 crore to convert the facility to handle coal.

In its 2013-14 annual report, Sical said that though the mining activities have started in restricted manner, the strong demand of the commodity in the domestic market, coupled with restrictive conditions imposed by Supreme Court of India, would continue to pose a challenge for exports. The company approached KPL and the Shipping Ministry for approvals to handle alternate cargo.

Source:  The Hindu BusinessLine