Companies & Sectors
Coal quality: Govt to set up panel of third party sampling agencies

The Power ministry had said that supply of excessive stones and boulders especially from Bharat Coking Coal Ltd, a unit of Coal India is a matter of concern, which results in high detention of railway rakes and damage to coal handling system of power plants

 

The Indian government has set a deadline of next month to constitute a panel of third party sampling agencies amid allegations that stones were being dispatched by Coal India Ltd (CIL) even after the introduction of a mechanism to assess the fuel quality.

According to sources, a panel of third party sampling agencies is to be prepared and the consumer shall appoint his sampling agency from the panel and the deadline for this is 31 August 2014.

The issue of fuel quality being supplied to the power plants had also cropped up in the presentation on coal sector earlier made to the Prime Minister Office.

Last week, Piyush Goyal, minister for coal and power, in a written reply to the Lok Sabha had said that to address the issue of fossil fuel quality, third party sampling and analysis facilities at loading ends have been introduced, and the process is being further streamlined.

He was responding to a query on a tiff between CIL and NTPC in regard to conducting the tests of samples of coal by a third party.

NTPC buys a little more than 140 million tonnes of coal and supplies have been coming from both Eastern coalfields and Mahanadi coalfields. It was found that the higher grade slippage (about 7.5%) occurred from supplies emanating from Eastern Coalfields.

Because of the quality issue, NTPC had held up payments, withholding as much as Rs3,035 crore against coal supplied. After a series of discussions and the introduction of third party sampling and strict enforcement of "cash and carry" mechanism by Coal India in October 2013, NTPC cleared its dues since then, but no decision could be made on the old dues. Finally, in the meeting held on 6th March both the companies decided to settle remaining dues based on sampling results at every mine's end for the previous three months.

The issue of third party sampling of coal had also come up for discussions during the Coal India board meeting held this month.

Finance Minister Arun Jaitley during his Budget 2014-15 speech had said that a stringent mechanism for quality control of coal were being put in place.

A system for third party sampling of coal is already in place since October last year at loading points.

The Power Ministry had earlier alleged that stones and boulders were still being dispatched to the power plants.

"Supply of excessive stones and boulders especially from BCCL (Bharat Coking Coal Ltd), a Coal India subsidiary, is a matter of concern. It results in high detention of railway rakes and damage to coal handling system of power plants," said a Power Ministry document.

The mechanism could not address the quality issue and so there is a "need to be done at unloading point", it said.

The issue of coal quality last year had resulted in a standoff between the country's largest power producer NTPC and the world's largest coal producer CIL.

After the government intervened, it was decided that a third party mechanism would be introduced to check coal quality.

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Adani advances in Australia! Why not in India?
Due to strong mining regulations, Australia has good regulatory and enforcement mechanisms in place and Adani group is required to follow 36 conditions for their coal mine. Can India also adopt and follow the same module?
 
It is gratifying to note that Adani Group has received the Australian Government's approval for Adani Minings' proposal to build a coal mine and a linked rail project at a total estimated cost of  $16.5  billion. This is expected to be established in Queensland. The Carmichael coal mine, when fully developed, will be able to produce some 60 million tonnes annually.
 
Located in the North of Galilee Basin, the mine is expected to involve open cut and underground mining operations. Sixty million tonnes of coal that will be mined there is expected to be shipped back to India, which will facilitate power supply to about 100 million people.
 
To facilitate this operation, it may be recalled that, recently, Adani group signed a partnership deal with Korea's Posco E&C, which would be responsible to build a 388kms long North Galilee Basin Rail.  Development of the port to move this large volume of coal will also be done simultaneously.
 
All these activities are expected to create employment opportunities for over 10,000 Australians. It would follow that when power is generated with these 60 million tonnes of coal, in India, it would help in establishing various business opportunities in India too.
 
In approving the project, according to press reports, Greg Hunter, Minister for Environment in Australia has laid 36 stringent conditions for Adani Mining Pty Ltd to comply with. Not an easy task! The requirements have been laid bare to follow. They will be strictly enforced by the Australian government.
 
Greenpeace is up in arms against this project, which believes that this coal mining activity will immediately affect 28,000 hectares of bushland. It will affect some 60 threatened species. It will consume 12 billion litres of water that would be extracted from local rivers and aquifers and all other similar issues affecting the environment.
 
At every stage, Adani Mining may expect the strictest vigilance (and also protests?) from the Greenpeace activists. The Australian Environment Ministry is also taking every known precaution to ensure that ground water is protected in all possible ways, which is a major cause for worry.
 
Press reports also indicate that, by this development, Queensland's economy will grow richer by $2.97 billion annually.
 
Apart from ensuring Adani Mining to comply with all 36 conditions, the Environment Ministry expects them to make available 730 mega litres of water to the Great Artesian Basin, besides monitoring changes in the ground water level.
 
This project, though acquired in 2010, has taken all these months to get the final clearance. It was expected to go on stream by 2016 - at that time. It could take a little longer now. Knowing the keen interest and the work culture at Adanis, one may expect the project to progress reasonably well. The support that they expect to get from the Queensland government is good.
 
In a separate development, Melanie Stutsel, a Director of Minerals Council of Australia, during a recent visit to India, appears to have had some serious discussions with the Ministry of Coal with regard to mining. She has indicated that Australia would welcome investment opportunities. She also expressed her willingness for technology transfer. In the case of the coal mining industry, she had discussions on coal technology, coal washing and other matters of environmental concerns, including social obligations. Hinting that, now, there are no "illegal mining activities" in Australia, unlike India, she explained that due to strong mining regulations the Australian industry has good regulatory and enforcement mechanisms in place. India could find it useful to study how they have been able to achieve this, so that we could employ similar methods to suit Indian conditions.
 
According to press reports, she has further indicated that opening up the Indian mining industry to bigger global players could bring about development and improved performance. She has suggested that, perhaps, India could use satellite monitoring to get a better handle on the level of deforestation. Maybe, the MoEF could apply this technique to assess the ground reality in the country.
 
As a matter of interest, India should applaud the efforts of Adani group in making headway in Australia, and request the Ministry of Coal and MoEF to make available a virgin coal mine to them to develop the same in the India.
 
India needs this development more than ever before. 
 
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)
 

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Flipkart gets $1 billion fresh funding, taking its value to about $7 billion

It is estimated that the online retailer has, so far, raised over $1.7 billion from investors, including the current transaction

 

India's largest e-Commerce firm Flipkart on Tuesday said it has raised $1 billion (over Rs6,000 crore) in fresh funding from a group of investors, the largest so far in the fiercely competitive online shopping segment in the country.

 

This round of funding has now valued Flipkart at around $7 billion. Flipkart's valuation was estimated between $2.5 billion to $3 billion in May, when it had its previous funding round. In May, Flipkart had raised $210 million. It is estimated that the firm has, so far, raised over $1.7 billion from investors, including the current transaction.

 

"The funds will be used to make long-term strategic investments in India, especially in mobile technology," Flipkart co-founder and CEO Sachin Bansal told reporters.

 

Flipkart was rumoured to be considering an initial public offering (IPO) for raising capital but that has now been put to rest with this successful round of funding. "By 2020, India will have more than half a billion mobile Internet users. Our intense focus on mobile and technology puts us in a unique position to take advantage of this massive opportunity," Bansal added.

 

"IPO is not in consideration at all, we are not thinking about it. We have not settled on a business model that we can take public," Bansal said.

 

The Bangalore-based firm, founded by Sachin Bansal and Binny Bansal, counts Accel Partners, Dragoneer Investment Group, Morgan Stanley Investment Management, Sofina and Vulcan Capital among its other investors.

 

For a business with relatively lower brick and mortar investments, it has proven to be hugely capital intensive and Amazon itself has been a perpetually capital thirsty company. With Amazon's entry in India last year, the competition in the online retail market became exceedingly fierce. Consolidation seems to be on the cards with Flipkart's recent buyout of Myntra, another online fashion retailer. The home-grown e-retailer had acquired online fashion retailer Myntra in May in what is estimated to be a Rs2,000-crore deal. It had also announced an investment of $100 million (around Rs600 crore) in its fashion business over the next 12-18 months.

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COMMENTS

IndianMoney

3 years ago

The growth in Indian online retail is phenomenal.Foreign PE funds are picking up stake in these Companies.The Chinese smartphone by Xiaomi was sold out in a few hours.However the challenge is many Indian shoppers check for products online and pick them from brick and mortar stores.

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