Coal news and updates

China’s Anhui Conch Cement Co. Ltd, the largest cement maker in Mainland China, was the top bidder for Lafarge India Pvt. Ltd, but lost out to eventual winner Nirma Ltd.

 

Interestingly, while Nirma agreed to buy the 11-million tonnes per annum assets of Lafarge India from LafargeHolcim for an enterprise value of $1.4 billion (around Rs.9,400 crore), Anhui Conch, with a bid of Rs.9,500 crore, was the highest bidder.

 

A spokesperson for Anhui Conch was not reachable, but a person advising the Chinese firm on the deal claims the Competition Commission of India (CCI) may have something to do with its exclusion.

 

That seems unlikely. While LafargeHolcim was asked to divest the assets of Lafarge India by CCI, the antitrust regulator had nothing to do with the choice of buyer itself that was made by the board of LafargeHolcim.

 

Still, it is true that as late as last week, on Friday, Anhui Conch was considered one of the two top-runners to close the deal.

 

“Conch’s bid looks very exciting. If anyone has to take a guess now, it looks like it will be between Conch and JSW (Cement),” said a person involved in the deal on Friday.

 

So, what changed between Friday and Monday?

 

“We have witnessed strong interest from both financial and industrial bidders. However, we are not disclosing any details on further parties that were involved in the divestment process,” said a LafargeHolcim spokesperson in an email response to queries.

 

Many don’t have power in ‘power-surplus India’

In India, 300 million people don’t have access to electricity, power cuts are rampant and per capita power consumption is significantly lower than the world average. In sharp contrast to this, the Power Ministry says India is power-surplus.

 

“India is likely to experience the energy surplus of 1.1 per cent in 2016-17,” says the Load Generation and Balance Report (LGBR) 2016-17 of the Central Electricity Authority (CEA), which functions under the Power Ministry.

 

Surplus or deficit is determined by calculating the difference between the demand for power and availability. It is the definition of “demand” that lies at the base of this paradox.

 

‘Real demand’

 

“While calculating power demand, only people who are connected to the grid and have access to electricity at present are taken into consideration,” S.D. Dubey, Chairperson of the CEA, told The Hindu. The “real demand” that encompasses all citizens would be known only when India achieves the goal of ‘Power for All’, towards which the government is actively working, he says.

 

Taking this definition into consideration, there has been a significant improvement. The deficit has gradually reduced from 11 per cent in 2008-09 to 2.9 in 2015-16 and for the first time, there will be a surplus in 2016-17.

But if there is surplus power, why do we have power cuts? “State discoms are unable to buy electricity due to poor financial health. There is unused power lying in the grid,” Mr. Dubey said.

 

Transmission and distribution constraints are also responsible for power cuts. To solve this problem, the government launched the Ujjawal Discom Assurance Yojana (UDAY) in November 2015. By operational and financial turnaround of discoms, UDAY is expected to facilitate reliable, adequate and sufficient power supply to consumers, among other things. The state of power in the country is best captured by looking at the per capita power consumption. On an average, in 2015-16, the per capita consumption in India was 1,070 kWh, less than the world average of 3,026 kWh, as per data from the International Energy Agency. It is also the lowest among BRICS nations.

Source: THe Hindu