Producers say move shows CIL's attitude towards meeting fuel supply obligations

In a twist to the unending drama over coal supply, Coal India Ltd (CIL) has refused to supply to power plants commissioned since December 2011. The move is set to stall investment worth Rs 40,000 crore in new power capacity of 8,156 Mw. This includes a 300-Mw unit of Reliance Power’s Rosa power plant in UP and a 660-Mw plant of China Light & Power (CLP) at Jhajjar, Haryana.

The government’s decision to switch to a new royalty formula for coal would erode the benefit currently available to captive coal miners by way of reduced royalty rates. At the same time, it would increase state governments’ royalty collection multi-fold.

As captive miners do not engage in any sale, these currently pay royalty to states as a percentage of the sale price realised at the nearest Coal India mine. This arrangement benefits captive miners, as Coal India (CIL) prices are 70-80 per cent lower than those of international benchmarks.

In what belies the popular notion of a depressed investment environment in the country, the government’s spending on central sector projects commissioned in the first half of the previous financial year had risen exponentially, according to data obtained from the Ministry of Statistics and Programme Implementation (MoSPI).

In the central sector, India commissioned projects worth a record Rs 43,000 crore between April and September 2011-12, a whopping 250 per cent jump over the investment of Rs 17,835 crore in projects completed during the same period in 2008-09,

Industry wants quick SC intervention as the only alternative for survival

Seven months after the Supreme Court issued a detailed corrective plan for rampant illegal mining in Karnataka, until recently the iron ore hub of India, the viability of the Rs 45,000-crore steel industry in the southern state remains in question.

There is still more bad news for coal mining companies, with the mines ministry recommending that coal miners mandatory share 100 per cent royalty with project-affected families. The recommendation, if implemented, could severely dent coal miners’ bottom line.

It would not only increase the annual outgo of monopoly producer Coal India Ltd (CIL) on account of benefit sharing, but also bring captive block holders, including large companies like Tata, Reliance, Essar, GMR, GVK and Aditya Birla Group, under the benefit-sharing net.

Mineral-rich states saw no big benefit in commiting so much land and other inputs for the units

The Union government has scrapped its plan to promote Ultra Mega Steel Plants (UMSPs). Each plant was expected to have a capacity of 10 million tonnes per annum (mtpa). The idea was to give a big boost in the effort to meet burgeoning demand in Asia’s third-largest economy.

The government on Thursday decided to relocate the Rs 10,000-crore Karanpura power plant, being set up in Jharkhand by NTPC Ltd, and laid the blueprint for faster environment clearance for two coal blocks of private power producers.

The decisions were taken by a 12-member Group of Ministers (GoM) headed by Finance Minister Pranab Mukherjee. The blocks, Mahan and Chhatrasal, had been hanging fire for the past two years as they fell under the “no-go” regions demarcated by the environment ministry when it was headed by Jairam Ramesh.

The coal ministry will invite a fresh application from state-owned miner NMDC Ltd for the allocation of India’s largest thermal coal block, Deocha Pachami, in West Bengal’s Birbhum district.

Hit by a dip in production of coal from Coal India Ltd (CIL) and gas from private sector major Reliance Industries Ltd (RIL), the mining sector is set to contract by 2.2 per cent this year.

The government’s decision to roll back a 12.5 per cent rise in coal prices might have eroded Coal India’s cushion against a Rs 6,500-crore wage impact.