Category: Coal

January 17, 2016

The 10 percent stake sale in Coal India is likely to be deferred to next fiscal as the government wants to wait for stability in the equity markets for a better valuation.

According to sources, the government may not sell its shares in CIL this fiscal, if it doesn’t get good price. The government currently owns 79.65 percent in the PSU.
Coal India shares are currently trading at Rs 318.20 a share, resulting in a notional loss of over 11 percent to investors who purchased the equity at Rs 358 apiece in the disinvestment on January 31, 2015.At current market price of Rs 318.20, sale of 63.16 crore shares, or 10 percent stake, would bring in around Rs 20,000 crore to the exchequer.

Foreign investors such as Fidelity, Wellington Management and BlackRock have conveyed their reservations over Coal India stake sale at the current juncture as the stock is already beaten down.

Government has shortlisted five Indian merchant bankers– JM Financial, SBI Capital and ICICI Securities, Axis Capital and Kotak Mahindra Capital — for managing Coal India stake sale.

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January 17, 2016

Coal linkage for Coal India arm Mahanadi Coalfields Ltd’s (MCL) 1,600 MW super critical thermal power project in Sundargarh district of Odisha has been delayed.

MCL Chairman and Managing Director A K Jha said “The coal linkage is still pending with the government. We have written to the government for giving us preference of a central PSU in offering the linkage.”
If the government does not offer any preference, MCL will have to get linkage from its own mine through the standing committee.

Jha said though coal linkage was pending, the preliminary work for the proposed power project has already begun. The company has also started the process of seeking environmental clearances. MCL had said 800 acres had been acquired for the project and water linkages are in place.

A special purpose vehicle (SPV), Mahanadi Basin Power Ltd (MBPL), has been incorporated as a wholly-owned subsidiary of MCL for setting up the project.

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January 15, 2016

According to knowledgeable sources, the  government is likely to scale back its revenue targets from planned divestments, following already huge shortfalls from planned asset sales in recent years. They say that it is now setting more “realistic” targets for the fiscal year ending March 2017 having raised less than one fifth of the Rs 68500 crore (USD 10.2 billion) it had projected in 2015/16, the sixth straight year it will have missed the target.

The Modi government is expected to rely more on divestment proceeds to keep the fiscal deficit in check  as it seeks to fix public finances with slowing nominal GDP growth threatening tax estimates.
Sources further say that the government expects the shortfall could be as much as Rs 50000 crore (USD 7.45 billion) for 2015/16,  also  noting that none of the proposed big divestments are likely before April, including a USD 3 billion stake sale in Coal India . The government plans to bolster the financials of Coal India and NTPC to prepare assets for sale.
 

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January 15, 2016

According to Chairman A.K.Jha,NTPC has cut back on buying costlier imported coal as well as augmented domestic supplies to reduce fuel cost , thereby slashing average cost of generating electricity from coal by 13.6 per cent in the last three months .

He said “The measures taken have reduced average energy charges by 13.6 per cent from Rs 2.06 per unit in September to Rs 1.78 in December. This has led to lower per unit cost to consumers. “Cost of purchase by state DISCOMS is lower by Rs 300 crore per month.”

Jha said the company this fiscal cut coal imports by 30 per cent to 8.6 million tons from 12.3 million tons a year ago adding that coal procured from e-auction has also been cut by 64 per cent to 0.865 million tons. Reserve price for e-auction was 20 per cent above the notified price as compared to 40 per cent above notified price in 2014, helping cut costs.

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January 14, 2016

Power and Coal Minister Piyush Goyal  said that Niti Aayog is working actively with the Institute of Energy Economics, Japan (IEEJ) for developing a long-term cooperation in the energy sector which will help India plan its energy security. India’s collaboration with the Japanese think tank in the energy space IEEJ will help it develop a possible energy mix for the country in the years to come.
 

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January 14, 2016

Power and Coal Minister Piyush Goyal invited Japanese companies to invest in India’s energy sector to help provide affordable electricity supply round the clock in the country.

Piyush Goyal, who is in Tokyo to take part in the India Japan Strategic Energy Dialogue, also said that companies and lenders in Japan have evinced interest in setting up big solar projects and setting up equipment manufacturing lines in India.

He said “India offers a huge opportunity to the world. India is open to investments from around the world in order to help us serve our people with affordable energy access 24×7.”
He said that the country is also looking at engaging financiers and different financial institutions which are looking to finance major energy-related initiatives in India.

Goyal said companies and lenders in Japan have evinced interest in setting up big solar projects and setting up equipment manufacturing lines in India. He said that the future ultra mega power projects that will be bid out by the Government also offer investment potential to the foreign firms.

The minister will meet various financiers including JICA, Nippon Exports and Insurance Investment and JBIC which are looking to tap opportunities in Indian energy space.

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January 13, 2016

Power Minister Piyush Goyal said that India and Japan will focus on renewable energy, clean coal and energy efficiency during the Strategic Energy Dialogue between the two nations in Tokyo. Goyal, on a three-day visit to Japan, has said that  the Strategic Energy Dialogue between the two countries is not about specific targets of investment but building technology partnerships and engagement for investment in different areas of energy, including coal and renewable energy.

Goyal is accompanied by a CII delegation which will participate in various discussions on key areas across the energy value chain including renewable, clean coal and energy efficiency.

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January 13, 2016

Coal India Ltd is making its biggest tech overhaul in four decades to check rampant theft and shed its image as an inefficient behemoth.

Coal India’s  monopoly had allowed it to delay the use of modern technology common in international mining, but it cannot afford to wait any longer as the government is set to soon announce a plan to allow private competitors like Adani Group to mine and sell coal.

Coal India’s productivity is estimated at just one-eighth of its technologically advanced rivals in the United States, and as much as a fifth of its annual output is stolen, costing the company up to USD1 billion each year.
 

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January 9, 2016

According to officials, Singareni Collieries Company Ltd’s coal output in the first nine months of current fiscal was at 43.24 million tonnes (MT), an increase of 22.74 percent from 35.23 MT a year ago. The company achieved an output of 5.74 MT in December 2015, a rise of 12.99 percent from 5.08 MT in December 2014.The official said that the coal dispatch in April-December period also increased to 43.53 MT, over 38.23 MT a year ago.Coal production in the April-December period of the ongoing fiscal was at 43.24 MT, against the target of 39.75 MT for the first nine months of FY 2015-16. The company had recorded a production of 52.54 million tonnes in the last fiscal.

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January 6, 2016

According to a top official, India ‘s coal imports fell by 15 percent to 132.3 million tonnes in the first 9 months of the current fiscal, from 155.4 MT a year ago, because of record production by CIL.In value terms, the decline was worth around Rs 18,000 crore. ,” Coal Secretary Anil Swarup said in a tweet “Record coal production by Coal India leads to further reduction in imports. Coal imports down by 15% during April-Dec ’15 compared to 2014″Coal imports at 132.3 MT during April-Dec’15 as compared to 155.4 MT during April-Dec ’14 at Rs 60,250 Cr against Rs 78,006 Cr in value.”He added that in value terms coal imports come down by Rs 17,765 crore during April-December, 2015-16, as compared to the corresponding period of the previous fiscal.”Import of coal during Dec 15 at 12.35 MT against 18.81 MT last year. In value, Rs 5,643 Cr in Dec’15 as compared to Rs 9,184 in Dec’14. Swarup had earlier said that coal imports will continue to decline this fiscal due to “unprecedented increase” in output of the fossil fuel by Coal India Ltd which accounts for over 80 percent of the domestic coal production, eying one billion tonnes production by 2020”.

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