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The announcement times with the entry of power players

Finance Minister P. Chidambaram had a few cryptic announcements to make, while unfurling Budget 2008-09. And one of them was the decision to set up a coal regulator. Though he did not spell it out, the Centre's proposal is timed with the entry of the private players in the coal sector.

Reliance Industries Ltd (RIL) has begun talks with Coal India Ltd (CIL) to explore the possibility of striking a joint venture for a coal-liquefaction project.

Coal India (CIL) has ambitious plans of investing Rs 18,000 crore in 118 projects during 2008-09. This would enable the company to augment its production by comprehensive margins. CIL projects a production of around 520 million tonne during the 11th Plan. Its current production is about 363 million tonnes which is expected to go up by over 384 million tonnes in 2008-09.

Coal India (CIL) will have to spend around Rs 1,800 crore for importing over 200 million tonnes (mt) of coal valued at current international prices to meet domestic demand during the 11th Five-Year Plan period, according to the public sector behemoth's latest estimates. The imports are necessitated due to a number of letters of assurance (LoA) issued by the coal ministry recently. The LoAs have been issued to different independent power producers, captive power producers, cement and sponge iron units. CIL's estimates, worked out on the basis of applications received by way of LoAs issued to different coal consumers, reveal that the total domestic coal demand during the 11th plan period would be around 773 mt as against the projected production of 520 mt. CIL has received 400-odd applications for the 11th plan period, taking the total coal demand figure to around 773 mt. This leaves a shortfall of over 200 mt to meet domestic requirement. However, the state-run company has also worked out a second conservative estimate of 706 million tonnes for the period. This estimate is based on the feedback that some power units may not be able to commence production during the period. Highly placed CIL sources said, "A necessity for imports is genuinely felt if actual demand and supply are taken into consideration during the 11th plan. Talks on imports have just begun and we have to work out the issue in the shortest possible time to cater to requirements.' For the first time, the new coal distribution policy, announced a few months ago, has kept provisions for meeting domestic coal demands through imports and that might have prompted CIL to work out its internal assessments till 2011-12. The imports would come mostly from Indonesia, South Africa and Australia. Internationally, prices of non-cocking coal are ruling at $90 a tonne. The average domestic price of the product is Rs 800 a tonne. According to CIL estimates, the major part of the domestic demand for coal would come from power plants, taking up about 533 million tonnes, followed by sponge iron, cement and captive power units. Till date, the coal ministry has issued LoAs to 64 new and upcoming units.

Faced with high oil prices and increasing oil imports to meet the country's rising demand for transportation fuels, there is now a perception that India's energy security is threatened. In addition to securing overseas oil fields, alternative options include biomass-based fuels and coal-to-liquid (CTL) fuels. While the production of biodiesel has now become a national mission, CTL fuels are also gaining currency as a commercially attractive proposition because of the potentially cleaner characteristics.

A subsidiary of the central ministry of coal in Assam is steadily refusing to compensate for crop damages wrought by its open-cast mining. This is after the Gauhati High Court told the company to pay

DANISH FIRM IN INDIA: A S Velfrost, a US $200-million Danish freezer and deep freezer manufacturer, is considering India as a possible manufacturing base, its first outside Denmark. According to executives, a deal is being negotiated with Blue Star India for a joint venture. However, the plans have not taken off yet because neither companies have found market conditions encouraging. "We would like to have a production unit with a minimum capacity of one lakh units per annum,' said Ole Miller Jensen, sales director of the Danish firm.

A recent disaster that claimed 55 lives revealed the abysmal safety standards of India's mines.

09 Apr 2012

Two monopolies. One private and the other public; one in gas and one in coal. Both equally disastrous for the environment. I speak here of Reliance Industries Ltd and Coal India Ltd.

14 Apr 2011

If you believe the financial press, one of the biggest environmental stories this past year has been the question of "go" and "no go" areas for coal mining.

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