An inter-ministerial group (IMG) has cleared the $8-billion (Rs 32,000 crore) CTL project of the Tata group and its partner Sasol of South Africa, the world's largest producer of oil from coal.

India's first coal-to-liquid (CTL) project rolls off.

Chinese domestic coking coal prices are expected to rise $14 per tonne next month, which could trigger problems for the Indian steel industry whose demand for coke is expected to touch 85.34 million metric tons by 2011-12. "Chinese domestic coking coal prices are expected to rise by 100 yuan ($14) per tonne for March delivery, pushed up by strong demand for coke,' the Metal Bulletin reported. Coal producers in China are talking about raising prices next month in the face of strong demand as steel mills gradually ramp up production after the snowstorms, it quoted Chinese trading sources as saying. Currently, coking coal is transacting at 1,300-1,400 yuan per tonne in Shanxi province, China's largest coal and coke producer. This is double the price paid in the middle of last year. Indian Steel Alliance sources said that rise in Chinese coking coal prices could generate problems for the Indian steel industry as domestic firms are considerably dependent on the neighbouring country for coke. Recent force majeure announcements by BHP Billiton and Rio Tinto at several hard coking coal mines in Queensland, Australia, have also seriously affected many Asian steel mills and caused a global shortage of coking coal supply.

The special assistant to the chief adviser, M Tamim, on Wednesday said that they would form another committee to review the current draft of the coal policy although a citizens' commission has declared that the government should not make changes, except to amend one clause.

Banpu Pcl, Thailand's biggest coal miner, expects prices of the raw material to set new records as demand growth in Asia, led by China and India, outpaces supply. India will raise purchases at a faster pace in the next two years, compared with 2007 and 2008, as the nation completes power plants, Philip Gasteen, head of marketing and logistics, said during the McCloskey Group coal conference in Singapore yesterday. Indonesia, the world's second-biggest thermal coal exporter, is promoting coal-fired power output to cut oil use. Benchmark prices at Newcastle, the world's biggest export harbor for thermal coal in Australia, dropped $4.71 to $134.45 a metric tonne in the week ended February 22 after four weeks of records, according to the globalCOAL NEWC Index. Prices had climbed after heavy rains in Australia, power shortages in South Africa and snowstorms in China cut output. "Things got tighter because of growth,'' Gasteen said in the interview. China's export ban after the nation's worst snowstorms in 50 years will pull 8 million tonnes out of the Pacific basin during the first quarter and "is a big loss,'' he said. China, the world's second-biggest energy consumer, banned coal exports so that local utilities "don't have grounds to raise prices'' amid government efforts to curb inflation, Gasteen said. Vietnam's exports Vietnam, China's largest coal supplier, plans to reduce exports 32 per cent this year and gradually eliminate the sales to meet rising domestic demand, Nguyen Khac Tho, vice director of the Ministry of Industry and Trade's energy and petroleum department, said February 15. Exports may drop to a forecast 22 million tonnes from 32.2 million in 2007 and the government is recommending halting overseas shipments after 2015. Coal producers are keeping inventories at half of typical levels of 6 to 7 per cent of annual output because of rising demand, Gasteen said. Banpu is maintaining stockpiles at about 3 to 4 percent of annual production, he said. "Demand has been very high so producers have been shipping out higher proportions than production and not putting as much in stock ,'' he said. Gasteen declined to comment on prices being negotiated with Japanese customers for annual supplies starting in April. Australian miners are seeking between $125 and $136 a tonne under one-year contracts, compared with offers from Japanese utilities to pay $110 a ton, Peter Ball, vice president for marketing at PT Bumi Resources, Indonesia's largest thermal coal exporter, said earlier this week in an interview. In the year ending March 31, the price is about $55. Japan is Banpu's biggest export destination, representing 25 per cent to 30 per cent of its sales. Banpu also ships to buyers in Taiwan, Thailand, South Korea and Italy, Gasteen said.

The National Committee to Protect Oil, Gas, Mineral Resources, Electricity and Port yesterday called on the government not to allow open pit coal mining in Phulbari, saying that it would lead to environmental disasters in the area. Such a project would lead to the eviction of 4.7 lakh people from four upazilas and cause the groundwater level to go further down, the committee leaders said at a press conference at Dinajpur Press Club. The government should also review the draft coal policy and maintain neutrality regarding the Phulbari coalmine issue, they added. The leaders said that according to the proposal of the Asia Energy, it would extract coal for 30 years through open pit method and export two-thirds of coal. Extraction of coal through open pit mining would cause massive damage to agriculture and the environment and threaten the livelihoods of local people, they said. The leaders also said any agreements on open pit mining would go against the interest of the country. Prof Anu Muhammad, member secretary of the committee, said the open pit method would cause more damage to ecology than the extent of economic benefit from the coalmine if the draft coal policy is not reviewed. Open pit method is not suitable for densely populated countries like Bangladesh, he added. Dr Sheikh Mohammad Shahidullah and Prof Samsul Alam also spoke at the press conference.