Coal Play - Quoted in the LOG India magazine
The share of imported coal in the total coal consumption has risen to about ten percent in 2009-10 from seven percent in 2002-03. Despite India’s vast coal reserves, passive regulatory policies and debilitated coal logistics have failed to meet domestic demands.
India walks on burning coal. This is no metaphor. For practically, every other Indian industry uses the energy of coal to produce power, steel, bricks, cement etc.
India is globally the fifth largest coal producer in the world. It accounts for 53 percent of the total commercial energy consumed in the country which is high compared to the world average of 30 percent. Nearly all the major sector ranging from power, coal to liquid / coal to gas, cement manufacturing, steel manufacturing use coal, but power accounts for 73 percent of the total coal usage.
CIL Monopoly
Coal mines in India were nationalized in 1972-73 in order to meet the long term coal requirement of the country, in the wake of industrial unrest, lack of investment in mine development, violation of mine safety norms, non-provision of safe mining conditions for miners and other such related issues.
Today till date, 80 percent of coal mines in India are owned by Coal India Ltd (CIL) and ten percent by Singareni Collieries Company Ltd (SCCL). Thus, over 90 percent of coal is controlled by government-owned collieries. Through a series of amendments, the government relaxed a few norms and private companies were permitted to mine coal from specified captive areas solely for their end-use projects; they cannot sell the surplus.
A Business Standard supplementary carried a report that affirms that the present 28 operational captive mines in India contribute about 35 million tons (Mt) of the total 530 Mt of coal produced in the country. Under the guidelines set by the Act, the coal block allocation for captive consumption is limited to few specific sectors like power, steel, cement, sponge iron. Other sectors like fertilizers, brick manufacturing enter into Fuel Supply Agreement (FSA) with state government notified agency and buy coal at a pre-defined market price.
CIL operates 17 coal washeries in India, out of which 12 are coking coal washeries with a capacity of 22.18 million tons per year (MTY) and 5 are non-coking coal washeries with a capacity of 17.22 MTY. Washeries are used from to remove excessive impurities from coal, where it reduces ash content washing off excess ash, thereby making it safer to be transported.
Agonizing Freight
It is easier to channelize power than to transport coal. The energy spent by trucks in transporting one ton of coal is more than energy produced by that quantity. “If the power plants are located closer to the ports, or the mines or any point of loading-unloading, it is cheaper and more efficient for the power plants,” says Arvind Ambo, Vice President, Head- Sales and Marketing, Credence Logistics. Credence Logistics is one of the leading third party logistics player in India that provide specialized solutions in the bulk segment.
Indian supply of coal is infringed with misappropriation and pilferage. Customers often report grade slippage as the quality of the coal at loading and unloading doesn’t match. “Often, major portion of coal transported by local transporters are unloaded along the way and replaced with kaali mitti (black sand),” says Mr Ambo.
Coal is weighed and transported in bulk. So the crucial problem in transporting bulk commodities in India is that there is very little inspection along the way to ensure that the quality of coal is not being compromised. “Currently there are no penalty obligations and recourse available to consumers for short supply. New Fuel Supply Agreement (FSA) provides for penalty but the levels of penalty are very low to have any impact on miscreants,” sighs Mr. Pushkaraj Sethiya, Manager- Energy (Coal and Mining), PricewaterhouseCoopers (PwC).
Apart from the ‘road mafia’ playing havoc, “high diesel prices and a number of taxes along the way add to the costs of road transport,” adds Mr. Mukul Dev, Asst Manager, Coal and Logistics, Mercator. Mercator owns coal mines in Indonesia and Mozambique and offers complete logistics solutions to all its clients, from load port to point of usage.
Budding young professional players in the market often cite unavailability of rakes and poor turnaround time as a major obstacle in transporting coal by Indian railways. A 2012 PwC report titled ‘Emerging Opportunities and Challenges in the coal sector’ states that in 2009-10, about 420MT of coal was loaded onto rail wagons, which is expected to cross 700MT in the next decade. The trunk routes i.e. main routes of the railways are overloaded as they carry 50 percent of the traffic.
Heavy congestion in rail network has been observed many times in the coal producing states which lead to delays. “Delays in development of proposed railways’ capacity add to freight woes,” elucidates Mr. Sethiya. “Passenger and freight traffic running on the same line restricts the speed of freight trains to 25 km/h which is very low compared to international standards (65 km/h or less as per the Norway/Sweden Freight Model).”
There are no specific storage arrangements made available for coal when in transit. Coal due to its inflammable nature is kept damp when transported by trucks, rail racks, and covered when stored at ports so that it does not catch fire when exposed to hot temperature or absorb too much moisture during rains. “The only external factors we are careful about is excessive moisture or high temperature as either can degrade the calorific value of the coal which will inadvertently, affect the price value,” adds Mr. Ambo.
Grading The Coal
Energy content of Indian coal is expressed in Useful Heat Basis (UHV). In the context of UHV, Indian coal (non-coking) is classified by grades (A-G). “UHV is an expression derived from ash and moisture contents for non-coking coals as per the Government of India notification. Both moisture and ash shall be determined after equilibrating at 60 percent relative humidity and 40°C temperature as per relevant clauses of the Indian Standard Specification No. IS:1350-1959,” explains Dipesh Dipu, Director – Consulting, Mining, Deloitte Touche Tohmatsu India Pvt. Ltd.
India largely produces non-coking coal, which is primarily used in power companies. Grade A to C is considered to be of superior quality and is used in industries like fertilizers, sponge iron and cement industries. Grade D to G is easily available across all coalfields and is considered to be of inferior quality. It is used in the power sector.
The power sector is one of the main consumers of non-coking coal and nearly two-third of the electricity generation in the country is coal-based. Coking coal which can again be classified as prime, medium and semi is mainly used for metallurgical purposes and in steel factories.
Looking Overseas
CIL has, time and again, failed to meet the demands of various sectors in India. Many customers have complained of delay in delivery or unavailability of consignment on time. “The Letter of Assurance (LoA) commitments of CIL are more than the production which has resulted in shortage of supply,” asserts Mr. Sethiya, PwC.
The difference in the demand-supply output has widened in the past few years. The Coal Controller report estimates a gap of 161 MT in the demand and supply in the year 2011-12, which incidentally explains why the private players have shifted their focus towards mines abroad. (See Chart)
Recent media reports suggest that import of coking coal from Australia may increase. A research report by Markus Hyvonen and Sean Langcake indicate that India, despite being the fourth largest steel producer in the world is a modest consumer of steel when compared to the relative size of the economy. India has sufficient reserves of iron ore but has to import large amount of coking coal from Australia, Indonesia.
The Press Trust of India reported that the Indian government is trying to move away from its dependency on the highly priced Australian coking coal, by aiming to acquire a mine in Mongolia. Mongolia has a rich coal reserve but being a land-locked country, the Indian government is planning to set up its first steel plant closer to the mine and export from there on.
India has enough mine reserves in the country to meet the requirements of all sectors for another 200 years. But despite its large reserves of coal, India has been unable to meet domestic demands. Most of it is imported from Indonesia, Australia and South Africa.
An official report prepared by the Indonesian government claim that 76 percent of Indonesian coal produced last year was purchased by India alone. The coals from Indonesia are high in calorific value (HCF), which means they have mid- to high- moisture and low ash content, which make them superior in quality when compared to the Indian coals.
The non-coking coals are imported from Kalimantan mines inIndonesia. The coking coal depends on the ash content whereas the semi coking coal depends on both the moisture and ash content. The high grade semi coking coal (grade I) is one that has an ash and moisture content not exceeding 19 percent, whereas grade II semi coking coal has an ash and moisture content between 19 percent and 24 percent.
Logistics Costs Inflate Price
Costs of mining in India are high due to lack of upgraded underground mining equipment for extracting coal. The private sectors spend a major chunk of their expenses in acquiring captive mines, whereas additional expenditure on modern machinery used for coal extraction, make costs of coal mining inexorably high. For state-owned CIL, costs are inflated by low productivity, obsolete equipment and overstaffing. CIL has to follow staffing norms that require it to employ one person for every two acres of land.
“Price rises have been sporadic but the trend has been that on a year-on-year basis, prices are seen to rise by six percent to seven percent. However, it may be of interest to note that prices of Indian coal are typically discounted by 40-50 percent from the international prices on energy content basis,” adds Mr Dipu. “The steep process in the international market is majorly due to high import demand from countries like China and India.”
But the main factors continue to remain steep logistics costs and unskilled, unorganized workforce. For short distance haulage of goods, merry-go-round (MGR), conveyor belt or trucks are useful, but to ship long distance, coastal shipping or railway is the best means. “Coal, as per Railways, comes under the 130-150 freight class. The additional surcharge, development taxes, port terminal charges and siding loading and unloading charges are added to the base freight rate,” explains Mr. Dev. “In coastal shipping of goods, the terminal loading and unloading charges are added to base freight charges.”
Mr. Ambo vouches for coastal shipping as a boon for bulk commodities. “Shipping ‘x’ amount of coal from Mumbai to Haldia port(Kolkata) via coastal route will take ten days at the rate of Rs. 2600 per ton, whereas transporting it by road will take seven-eight days at the rate of approx Rs. 3400 per ton. The difference in the number of days is counterbalanced by the fact the entire shipment will have reached the customer as opposed to small deliveries in different trucks.”
The potential of coastal freight movement is not fully exploited at the moment. “Coastal movement is only favorable for those plants closer to the ports. For movement in the interiors of the country, road or railways is preferred,” notes Mr. Dev.
Disparities in regulatory policies also impede movement of coal within the country. The Metals and Minerals Practice (Team), Frost & Sullivan – South Asia, Middle East and North Africa report that the coal movement to power plants is governed by Fuel Supply Agreement (FSA) but no such agreement exists for imported coal. Also, the Railways, generally the first choice as a mode for inland transport of dry bulk, is still to work out a clear-cut freight movement policy with respect to private ports, many of which are handling large quantities of imported coal.
Online Bidding
Coal distribution through e-auction was introduced with a view to provide access to coal for such consumers who are not able to source coal through the available institutional mechanism.
The scheme was discontinued temporarily but resumed under a new modified scheme of e-auction which was introduced in November, 2007 under the guidelines set by New Coal Distribution Policy.
Amidst speculations of favoritism in allocation of coal blocks to private companies and fluctuating coal prices, e-auction acts a suitable platform to allow transparency between the sellers and the consumer. There is no ‘floor price’ in e-auction. However, coal companies may be allowed to fix an undisclosed reserve price not below the notified price.
E-auction provides a suitable framework to provide stable coal prices and ensure steady profits for private developers. Ten percent of annual production of CIL is marked for e-auction. Metal Scrap Trading Corporation (MSTC), mjunction (a 50:50 venture by SAIL and Tata Steel) and CoalJunction (West Bengal Mineral and Trading Corporation) are some of the service providers in India that conduct the e-auction of coal.
The Green Impact
Excessive land mining is depleting resources at a high rate. The Ministry of Coal is constantly at conflict with the Ministry of Environment and Forests (MoEF), because the former cannot allocate land for mining unless the MoEF gives them a green signal.
“The adverse impact of mining activities on environment cover impact on biodiversity, contamination of surface and ground water, contamination of soil, subsidence, air pollution etc. Thus, it is very much necessary to take appropriate safeguards or recourse measures to minimize these impacts,” clarifies Mr. Sethiya.
MoEF has laid down some stringent norms and is responsible for implementation and administration of various environment and forest related legislations. Environmental Clearances and Forest Clearances must be secured from MoEF prior to setting up any industry. MoEF approval is mandatory for diversion of forest land to other uses also.
For implementation of any mining project, a mining company is required to conduct Environmental Impact Assessment (EIA) study and prepare Environmental Management Plan (EMP) and get the Terms of Reference (ToR) approved prior to project implementation.
MoEF govern and implement various environment related legislations and policies through various departments and Central Pollution Control Board (CPCB). Thus, a ‘no-go’ from the MoEF can stall any plans by Ministry of Coal to allocate land for mining. There have been instances where MoEF has identified and demarcated ‘inviolate areas’ to preserve the green forest cover and prevent coal resources from being exhausted.
The Madras High Court banned Chennai Port Trust from handling coal and iron ore in 2011 on the grounds that it pollutes the environment. While the local residents welcomed the ban, the Port suffered a decline in cargo handling by 8.35 percent. Since then, the Supreme Court has set up an expert committee to study whether the claims exacted by the High Court is indeed true. Meanwhile, the bulk handling has been shifted to Ennore Port.
Also, mining and logistics of coal have an impact not only on the environment but also on humans. The ash content has a harmful effect on human health if inhaled. “Further, as mentioned earlier MoEF does not allow coal with ash content of more than 34 percent to be used in any thermal plants located beyond 1000 km from the pithead, also any plant located in an urban area or, sensitive area irrespective of the distance from the pithead except any pithead power plant,” adds Mr. Sethiya.
Investments targeted at development of coastal freight movement, decongesting rail freight traffic will ensure greater connectivity. Keeping a check on road mafias will control grade slippages. Meanwhile, the slowing economy (abetted by weakening of rupee, steep fuel hikes) is likely to have an impact on the import of coal. Hence, the domestic production must be ramped up to meet the escalating demand of energy in all sectors in India.
India walks on burning coal. This is no metaphor. For practically, every other Indian industry uses the energy of coal to produce power, steel, bricks, cement etc.
India is globally the fifth largest coal producer in the world. It accounts for 53 percent of the total commercial energy consumed in the country which is high compared to the world average of 30 percent. Nearly all the major sector ranging from power, coal to liquid / coal to gas, cement manufacturing, steel manufacturing use coal, but power accounts for 73 percent of the total coal usage.
CIL Monopoly
Coal mines in India were nationalized in 1972-73 in order to meet the long term coal requirement of the country, in the wake of industrial unrest, lack of investment in mine development, violation of mine safety norms, non-provision of safe mining conditions for miners and other such related issues.
Today till date, 80 percent of coal mines in India are owned by Coal India Ltd (CIL) and ten percent by Singareni Collieries Company Ltd (SCCL). Thus, over 90 percent of coal is controlled by government-owned collieries. Through a series of amendments, the government relaxed a few norms and private companies were permitted to mine coal from specified captive areas solely for their end-use projects; they cannot sell the surplus.
A Business Standard supplementary carried a report that affirms that the present 28 operational captive mines in India contribute about 35 million tons (Mt) of the total 530 Mt of coal produced in the country. Under the guidelines set by the Act, the coal block allocation for captive consumption is limited to few specific sectors like power, steel, cement, sponge iron. Other sectors like fertilizers, brick manufacturing enter into Fuel Supply Agreement (FSA) with state government notified agency and buy coal at a pre-defined market price.
CIL operates 17 coal washeries in India, out of which 12 are coking coal washeries with a capacity of 22.18 million tons per year (MTY) and 5 are non-coking coal washeries with a capacity of 17.22 MTY. Washeries are used from to remove excessive impurities from coal, where it reduces ash content washing off excess ash, thereby making it safer to be transported.
Agonizing Freight
It is easier to channelize power than to transport coal. The energy spent by trucks in transporting one ton of coal is more than energy produced by that quantity. “If the power plants are located closer to the ports, or the mines or any point of loading-unloading, it is cheaper and more efficient for the power plants,” says Arvind Ambo, Vice President, Head- Sales and Marketing, Credence Logistics. Credence Logistics is one of the leading third party logistics player in India that provide specialized solutions in the bulk segment.
Indian supply of coal is infringed with misappropriation and pilferage. Customers often report grade slippage as the quality of the coal at loading and unloading doesn’t match. “Often, major portion of coal transported by local transporters are unloaded along the way and replaced with kaali mitti (black sand),” says Mr Ambo.
Coal is weighed and transported in bulk. So the crucial problem in transporting bulk commodities in India is that there is very little inspection along the way to ensure that the quality of coal is not being compromised. “Currently there are no penalty obligations and recourse available to consumers for short supply. New Fuel Supply Agreement (FSA) provides for penalty but the levels of penalty are very low to have any impact on miscreants,” sighs Mr. Pushkaraj Sethiya, Manager- Energy (Coal and Mining), PricewaterhouseCoopers (PwC).
Apart from the ‘road mafia’ playing havoc, “high diesel prices and a number of taxes along the way add to the costs of road transport,” adds Mr. Mukul Dev, Asst Manager, Coal and Logistics, Mercator. Mercator owns coal mines in Indonesia and Mozambique and offers complete logistics solutions to all its clients, from load port to point of usage.
Budding young professional players in the market often cite unavailability of rakes and poor turnaround time as a major obstacle in transporting coal by Indian railways. A 2012 PwC report titled ‘Emerging Opportunities and Challenges in the coal sector’ states that in 2009-10, about 420MT of coal was loaded onto rail wagons, which is expected to cross 700MT in the next decade. The trunk routes i.e. main routes of the railways are overloaded as they carry 50 percent of the traffic.
Heavy congestion in rail network has been observed many times in the coal producing states which lead to delays. “Delays in development of proposed railways’ capacity add to freight woes,” elucidates Mr. Sethiya. “Passenger and freight traffic running on the same line restricts the speed of freight trains to 25 km/h which is very low compared to international standards (65 km/h or less as per the Norway/Sweden Freight Model).”
There are no specific storage arrangements made available for coal when in transit. Coal due to its inflammable nature is kept damp when transported by trucks, rail racks, and covered when stored at ports so that it does not catch fire when exposed to hot temperature or absorb too much moisture during rains. “The only external factors we are careful about is excessive moisture or high temperature as either can degrade the calorific value of the coal which will inadvertently, affect the price value,” adds Mr. Ambo.
Grading The Coal
Energy content of Indian coal is expressed in Useful Heat Basis (UHV). In the context of UHV, Indian coal (non-coking) is classified by grades (A-G). “UHV is an expression derived from ash and moisture contents for non-coking coals as per the Government of India notification. Both moisture and ash shall be determined after equilibrating at 60 percent relative humidity and 40°C temperature as per relevant clauses of the Indian Standard Specification No. IS:1350-1959,” explains Dipesh Dipu, Director – Consulting, Mining, Deloitte Touche Tohmatsu India Pvt. Ltd.
India largely produces non-coking coal, which is primarily used in power companies. Grade A to C is considered to be of superior quality and is used in industries like fertilizers, sponge iron and cement industries. Grade D to G is easily available across all coalfields and is considered to be of inferior quality. It is used in the power sector.
The power sector is one of the main consumers of non-coking coal and nearly two-third of the electricity generation in the country is coal-based. Coking coal which can again be classified as prime, medium and semi is mainly used for metallurgical purposes and in steel factories.
Looking Overseas
CIL has, time and again, failed to meet the demands of various sectors in India. Many customers have complained of delay in delivery or unavailability of consignment on time. “The Letter of Assurance (LoA) commitments of CIL are more than the production which has resulted in shortage of supply,” asserts Mr. Sethiya, PwC.
The difference in the demand-supply output has widened in the past few years. The Coal Controller report estimates a gap of 161 MT in the demand and supply in the year 2011-12, which incidentally explains why the private players have shifted their focus towards mines abroad. (See Chart)
Recent media reports suggest that import of coking coal from Australia may increase. A research report by Markus Hyvonen and Sean Langcake indicate that India, despite being the fourth largest steel producer in the world is a modest consumer of steel when compared to the relative size of the economy. India has sufficient reserves of iron ore but has to import large amount of coking coal from Australia, Indonesia.
The Press Trust of India reported that the Indian government is trying to move away from its dependency on the highly priced Australian coking coal, by aiming to acquire a mine in Mongolia. Mongolia has a rich coal reserve but being a land-locked country, the Indian government is planning to set up its first steel plant closer to the mine and export from there on.
India has enough mine reserves in the country to meet the requirements of all sectors for another 200 years. But despite its large reserves of coal, India has been unable to meet domestic demands. Most of it is imported from Indonesia, Australia and South Africa.
An official report prepared by the Indonesian government claim that 76 percent of Indonesian coal produced last year was purchased by India alone. The coals from Indonesia are high in calorific value (HCF), which means they have mid- to high- moisture and low ash content, which make them superior in quality when compared to the Indian coals.
The non-coking coals are imported from Kalimantan mines inIndonesia. The coking coal depends on the ash content whereas the semi coking coal depends on both the moisture and ash content. The high grade semi coking coal (grade I) is one that has an ash and moisture content not exceeding 19 percent, whereas grade II semi coking coal has an ash and moisture content between 19 percent and 24 percent.
Logistics Costs Inflate Price
Costs of mining in India are high due to lack of upgraded underground mining equipment for extracting coal. The private sectors spend a major chunk of their expenses in acquiring captive mines, whereas additional expenditure on modern machinery used for coal extraction, make costs of coal mining inexorably high. For state-owned CIL, costs are inflated by low productivity, obsolete equipment and overstaffing. CIL has to follow staffing norms that require it to employ one person for every two acres of land.
“Price rises have been sporadic but the trend has been that on a year-on-year basis, prices are seen to rise by six percent to seven percent. However, it may be of interest to note that prices of Indian coal are typically discounted by 40-50 percent from the international prices on energy content basis,” adds Mr Dipu. “The steep process in the international market is majorly due to high import demand from countries like China and India.”
But the main factors continue to remain steep logistics costs and unskilled, unorganized workforce. For short distance haulage of goods, merry-go-round (MGR), conveyor belt or trucks are useful, but to ship long distance, coastal shipping or railway is the best means. “Coal, as per Railways, comes under the 130-150 freight class. The additional surcharge, development taxes, port terminal charges and siding loading and unloading charges are added to the base freight rate,” explains Mr. Dev. “In coastal shipping of goods, the terminal loading and unloading charges are added to base freight charges.”
Mr. Ambo vouches for coastal shipping as a boon for bulk commodities. “Shipping ‘x’ amount of coal from Mumbai to Haldia port(Kolkata) via coastal route will take ten days at the rate of Rs. 2600 per ton, whereas transporting it by road will take seven-eight days at the rate of approx Rs. 3400 per ton. The difference in the number of days is counterbalanced by the fact the entire shipment will have reached the customer as opposed to small deliveries in different trucks.”
The potential of coastal freight movement is not fully exploited at the moment. “Coastal movement is only favorable for those plants closer to the ports. For movement in the interiors of the country, road or railways is preferred,” notes Mr. Dev.
Disparities in regulatory policies also impede movement of coal within the country. The Metals and Minerals Practice (Team), Frost & Sullivan – South Asia, Middle East and North Africa report that the coal movement to power plants is governed by Fuel Supply Agreement (FSA) but no such agreement exists for imported coal. Also, the Railways, generally the first choice as a mode for inland transport of dry bulk, is still to work out a clear-cut freight movement policy with respect to private ports, many of which are handling large quantities of imported coal.
Online Bidding
Coal distribution through e-auction was introduced with a view to provide access to coal for such consumers who are not able to source coal through the available institutional mechanism.
The scheme was discontinued temporarily but resumed under a new modified scheme of e-auction which was introduced in November, 2007 under the guidelines set by New Coal Distribution Policy.
Amidst speculations of favoritism in allocation of coal blocks to private companies and fluctuating coal prices, e-auction acts a suitable platform to allow transparency between the sellers and the consumer. There is no ‘floor price’ in e-auction. However, coal companies may be allowed to fix an undisclosed reserve price not below the notified price.
E-auction provides a suitable framework to provide stable coal prices and ensure steady profits for private developers. Ten percent of annual production of CIL is marked for e-auction. Metal Scrap Trading Corporation (MSTC), mjunction (a 50:50 venture by SAIL and Tata Steel) and CoalJunction (West Bengal Mineral and Trading Corporation) are some of the service providers in India that conduct the e-auction of coal.
The Green Impact
Excessive land mining is depleting resources at a high rate. The Ministry of Coal is constantly at conflict with the Ministry of Environment and Forests (MoEF), because the former cannot allocate land for mining unless the MoEF gives them a green signal.
“The adverse impact of mining activities on environment cover impact on biodiversity, contamination of surface and ground water, contamination of soil, subsidence, air pollution etc. Thus, it is very much necessary to take appropriate safeguards or recourse measures to minimize these impacts,” clarifies Mr. Sethiya.
MoEF has laid down some stringent norms and is responsible for implementation and administration of various environment and forest related legislations. Environmental Clearances and Forest Clearances must be secured from MoEF prior to setting up any industry. MoEF approval is mandatory for diversion of forest land to other uses also.
For implementation of any mining project, a mining company is required to conduct Environmental Impact Assessment (EIA) study and prepare Environmental Management Plan (EMP) and get the Terms of Reference (ToR) approved prior to project implementation.
MoEF govern and implement various environment related legislations and policies through various departments and Central Pollution Control Board (CPCB). Thus, a ‘no-go’ from the MoEF can stall any plans by Ministry of Coal to allocate land for mining. There have been instances where MoEF has identified and demarcated ‘inviolate areas’ to preserve the green forest cover and prevent coal resources from being exhausted.
The Madras High Court banned Chennai Port Trust from handling coal and iron ore in 2011 on the grounds that it pollutes the environment. While the local residents welcomed the ban, the Port suffered a decline in cargo handling by 8.35 percent. Since then, the Supreme Court has set up an expert committee to study whether the claims exacted by the High Court is indeed true. Meanwhile, the bulk handling has been shifted to Ennore Port.
Also, mining and logistics of coal have an impact not only on the environment but also on humans. The ash content has a harmful effect on human health if inhaled. “Further, as mentioned earlier MoEF does not allow coal with ash content of more than 34 percent to be used in any thermal plants located beyond 1000 km from the pithead, also any plant located in an urban area or, sensitive area irrespective of the distance from the pithead except any pithead power plant,” adds Mr. Sethiya.
Investments targeted at development of coastal freight movement, decongesting rail freight traffic will ensure greater connectivity. Keeping a check on road mafias will control grade slippages. Meanwhile, the slowing economy (abetted by weakening of rupee, steep fuel hikes) is likely to have an impact on the import of coal. Hence, the domestic production must be ramped up to meet the escalating demand of energy in all sectors in India.
posted by Dipesh Dipu @ 11:32 PM
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