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Indian coal sector - major overhauling of policy on the anvil

May 18, 2011

Analysis of:Govt to Evolve a Consensus on Commercial Mining of Coal-Shri Jaiswal | pib.nic.in

 current year the import is likely to be touching over 100MT and Shortage is likely to be 142 MT next year. The main supplier of coal in India Coal India ltd is not able to supply the required coal nor it is likely to be able to do so in future. Captive mine owners of coal are also not able to bridge the gap. Apathy is added for coking coal, which India has abysmal reserve. In the meantime this sector is grappling with many issues which is dampener in the sector.

Indian new mining bill, a Dampener or accelerator to the industry- a paradox

March 9, 2011

Analysis of:Finalising Mining Bill as per GoM's suggestions: Mines Secy | economictimes.indiatimes.com

The govt is mulling to modify proposed new tax bill in India with new issues like more benefit to land oustees and 26% profit sharing with community. At present the environment related to land acquisition for any mining project is becoming a big socio and political issue esp in mineral rich states and is leading to inordinate delay in start of the project. The Govt is introducing it to expedite the project execution but is likely to cause further delay because of issues related to implementation.

Emerging landscape of seaborne trade of metallurgical coking coal supply

March 7, 2011

Current traded quantity of coking coal is 250MT is growing at more than 10-12% growth rate. since 2008-09, the dynamics have changed with china becoming net importer and US emerging as clocking their highest export in a year recently. With expansion plan of Australian logistics it is poised to clock 250MT export by 2015 over current 160MT per annum. US, Mozambique, Mongolia and Columbia are likely to make significance presence in the trade coking coal space by 2015 and further ahead.

Contract mining to flourish in India

August 29, 2010

Future demand for coal, iron ore etc in India is expected to be driven by power sector, and steel and cement sector,  and is expected to grow at a CAGR of 8-10 per cent. This all is leading to the growth of increased activities in Indian mining sector especially opportunities for contract mining. Presently market is fragmented and characterised with regional dominance with poor economies of scale and operational management  ,  which is likely to consolidate and get structured in next 5 yrs. 

Unshackling of Indian coal sector- Competitive bidding for coal block allotment

August 22, 2010

Analysis of:Coal block allocation to become transparent | www.thehindubusinessline.com

The passing of Bill by Govt is one of the step forward for bringing transparency and competitiveness to the allocation of coal blocks. This may bring faster execution of project and only serious player will participate in this. But, this is only a step forward and lot needs to be done since the "captive" word still remains which prevents the mining giants to encash upon and restricts trading. However, this first step by the govt is welcome move.

Increasing investment opportunities in Indian mineral and coal mining sector.

May 4, 2010

Analysis of:Local, foreign cos gear up for UG mining equipment supply | www.mjunction.in

Indian coal sector which consists of 80% of Indian mineral sector, is likely to witness significant investment growth rate in next 5 yrs. The current production of over 450MT is envisaged to go to over 600MT in next couple of years leading to the investment to the tune of Rs 50-60000 cr (US $15 B) which will give opportunities to mining equipment supplier, related maintenance provider and contract miners and service providers. This will be further lead to increased opportunity of at least over Rs 4000 cr yearly business opportunity in contract mining area for operation of the mines in private sector. BEML, caterpillar, bucyrus, joy mining, highwall miner , thiess etc likely to benefit.

Investment opportunities in Indian coal washery sector

April 24, 2010

The current Indian coal washing (benefication) capacity is likely to increase from 120MTPA to over 250MTPA within span of 3-4 yrs. This is likely to attract investment of over 5000cr (over ~ 1 B USD) from coal India ltd and other private coal upcoming coal producer. This growth rate in the sector has led to the overwhelming opportunity for coal benefication equipment supplier eg. metso mineral etc , EPC contractor for washery erection and the contract washing.

The widening coal shortage in India will keep internal coal market buoyant.

April 6, 2010

Analysis of:Fund push for foreign coal assets | www.telegraphindia.com

The increase domestic shortage of coal by China and the domestic demand-supply gap of India will put more demand for coal import by both countries and will lead to the better opportunities in the area of coal trading in Asian region and will also keep prices attractive in international market.

Coal India can become a major market player the international coal market.

September 15, 2009

Analysis of:Coal India to buy assets of Rio Tinto | timesofindia.indiatimes.com

Coal india is the biggest producer of coal in the world and biggest supplier of coal in India. It captures the 90 % market of Indian demand. It will not have much influence in Indian market however it will give key competition in seaborne thermal coal market.

Indian power projects have difficult days ahead on account of coal availability

July 22, 2009

Analysis of:India giant whets dry-bulk appetite | www.tradewinds.no

India is unlikely to meet the power generation target primarily because of coal supply (domestic and imports). The company's who is able to ensure the domestic coal mining project execution or ensuring the imports only will be able to derive benefit from it.

Bonanza of coal resource in India has been opened for global mining majors as well as coal consuming Indian companies.

August 12, 2008

Analysis of:CIL invites bids for 18 old mines | economictimes.indiatimes.com

Global mining companies are likely to encash this opportunity to enter into India through this indirect route easily. The coal supply may get enhanced through these mines and will ease the Indian’s demand-supply gap to some extent although in long run there will still be substantial import. Indian steel making companies and power generating companies would also  rush for this opportunity, to secure their future coal requirement, thus reducing the dependence on coal import and port-rail related bottleneck.  

The demand-supply gap of coal is likely to surge in India, and the growth of imported coal may continue to be in double digit for next few years.

August 7, 2008

Analysis of:Forest ministry rebuts coal claims; says shoddy reports delay approval | www.livemint.com

    Presently India produces around 430 MT of coal and imports  50 MT per year. India will need over 700 MT of coal by year 2011-12. Since the production in existing mines is not witnessing any significant growth, the delay in  execution greenfield coal projects (both coking as well as energy coal) will lead to more depdendence on Imported coal for power producer and steel making companies. In order to hedge  the coal prices fluctuation, the Indian steel and coal based power generating companies need to further agressively invest in coal assets abroad to ensure long term supply security.

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