VITAL INDUSTRY UPDATES – 26/05/2015

May 26, 2015 12:59 pm Published by

Coal India decision to cancel coal won by Jindal Power comes under Delhi High Court lens

The Delhi High Court today asked Coal India Ltd (CIL) how it was offering coal from two Chhattisgarh mines to NTPC when it had cited production issues to cancel an e-auction of 49,000 metric tonnes (MT) of the mineral, mined from the same area, which was won by JPL.

A bench of justices Badar Durrez Ahmed and Sanjeev Sachdeva observed “this was not how the government should function” and asked CIL to come with instructions on the issue tomorrow.

 

Jindal Power Ltd (JPL), in an affidavit, has contended that while the 49,000 MT of non-coking coal won by it was cancelled citing production issues at Gare Palma IV/2 and IV/3 mines, 2.5 lakh tonne per month of coal from same area was being offered to National Thermal Power Corporation Ltd (NTPC) on ‘as is where is basis’.

JPL said that much coal was being offered to NTPC for the PSU’s thermal power plant at Barh in Patna, Bihar and to transport this the state-run enterprise invited bids.

The company contended that it had participated in the e-auction held on April 11 and had bid the highest price of Rs 1008 per tonne of coal and had paid Rs 7.8 crore for the 49,000 MT coal won by it.

Senior advocate Kapil Sibal, appearing for JPL, said that on May 22 it was informed by CIL that the e-auction was being cancelled owing to production issues and the amount of Rs 7.8 crore was refunded.

He said CIL had on April 3 invited bids for 4.05 lakh tonne of non-coking coal  .

Of the 4.05 lakh tonne of non-coking coal, 60,000 metric tonne was to be auctioned from the two Gare Palma mines, JPL has said in the affidavit filed by it.

The affidavit was filed in the company’s plea for quashing of March 20 order of the government cancelling the bids of the company and Bharat Aluminium Company (Balco) for four coal blocks amid speculation of cartelisation. Balco too has challenged the order separately.

 

PM Narendra Modi to visit Vizag Steel Plant to inaugurate RINL’s new facility

Prime Minister Narendra Modi will visit Vizag Steel Plant to formally inaugurate RINL’s new expanded 6.3 million tonne (mt) facility. For Modi, who has already visited Rourkela and Burnpur to inaugurate Steel Authority’s steel plants this will be the third such visit in as many months. While the Modi government has taken initiative to set up new steelmaking capacity domestic steel majors battling indifferent demand from infrastructure and consumer sectors are hoping the Prime Minister’s support will soon translate into higher infra spends and lead to a reversal in fortunes.

 

“The PM is likely to visit Visakhapatnam sometime during the end of June or early July. The date is likely to be confirmed soon. He will dedicate Vizag steel plant (VSP)’s expanded facility to the nation,” a steel ministry official said. RINL which runs the VSP has more than doubled the plant’s steelmaking capacity from 3 to 6.3 mt at a cost of Rs 12,400 crore.

 

The Modi government has taken an initiative to set up four new integrated steel plants in Odisha, Jharkhand, Chhattisgarh and Karnataka, initiating public investment in steel after four decades. This is in step with the PM’s keenness to raise India’s steelmaking capacity from 82 to to 300 mt by 2025. The new plants would add up to 24 million tonne of steel-producing capacity. RINL is envisaged to play a key role in setting up these plants in which two other central PSUs such as the SAIL, and NMDC will also taking leading roles. In two months after announcing plans for the new plants, Modi attended a MoU ceremony at Bastar on May 9, where NMDC, the country’s largest mining company, is partnering SAIL to set up the first of these four plants, a Rs 20,000-crore greenfield 3 million tonne steel plant. Interestingly, while PSUs are seen taking the lead in setting up these steel and mining units, top steel ministry sources said the private sector players would also be offered stake in these projects at a later stage.

 

Global steel output declines in April

The financial year 2015-16 has started on a dull note for global steel producers, with crude steel production in April declining 1.7% over a year ago, according to the World Steel Association. The sequential decline was worse at 1.9% over March. In Asia, China’s output fell by a relatively modest 0.7% and by 0.8% over March. Japan and South Korea saw sharp cuts.

Among other large regions, the Commonwealth of Independent States (CIS) and North America also saw sharp cuts. The European Union saw a 0.3% increase, though output declined sequentially.

India’s output rose 2.1%, but declined by 3.6% sequentially. Data from the Joint Plant Committee indicates that domestic finished steel production grew only 0.5%, but within this, large integrated steel producers have seen output decline. Steel exports are declining and imports are rising, which had put pressure on domestic steel prices in the March quarter. This had affected steel company earnings. If the current trend continues, it may hit June quarter

Categorised in:

This post was written by Atlantic Admin