Activities

Coal India Ltd (CIL) is set to implement uniform interest rates on delayed payments under its fuel supply agreements (FSAs), a move aimed at boosting coal demand amid rising competition from private players. Effective 1 October, CIL will apply a standard interest rate on overdue payments, adjustments, and recoverable sums that remain unpaid after the due date. Previously, interest rates varied widely, even for the same generating companies with different FSAs. The policy change aims to streamline rates across various FSAs and schemes.

India’s coal imports have seen a marginal increase, attributed to the surge in coal-based power generation, as per a recent government update. This uptick in imports is primarily driven by heightened demand for electricity, particularly during the summer months, which has led to increased reliance on thermal power plants. The Ministry of Coal has been closely monitoring the situation to ensure domestic coal production remains sufficient, though imports are being utilized to bridge any gaps in supply.

State-run miner Coal India said its production fell marginally by 1 per cent year-on-year to 50.9 million tonne (mt) in September. The company witnessed a 1.4 per cent year-on-year (y-o-y) drop in coal offtake to 54.4 mt in the last month. Heavy rainfall affected the coal productions. In the first half of the current financial year, Coal India’s output stood at 341.3 mt, which was up 2.5 per cent y-o-y over the same period last year. Coal offtake during this period witnessed a growth of 1.7 per cent y-o-y at 366.6 mt.

The coal production from both captive and commercial coal blocks rose by 32 per cent to 79.72 million tonne (MT) in the April-September period of the ongoing fiscal. The coal dispatch rose by 34 per cent year-over-year, from 65.37 MT in H1 of FY24 to 87.86 MT in H1 of FY'25. There has been “a significant rise in coal production and dispatch from both captive and commercial coal blocks during the first half of FY 2024-25, from April 1, 2024, to September 30, 2024, compared to the same period last year”, the coal ministry said in a statement.

Russia is eyeing the huge potential in increasing presence in coal mining opportunities and engaging in new energy projects in India, said Alexander Novak, deputy prime minister of the Russian Federation. “We also see good prospects for increasing cooperation in the coal sector in the context of the emerging shortage of high-quality metallurgical coal on the world market,” he said. Russian coal mining companies have significant resources and are interested in expanding their presence in the fast-growing Indian market, he said.

From mine sales to expansion into nickel and aluminium smelting, coal producers in Indonesia are reducing their exposure to the commodity as finding financing for the fossil fuel becomes increasingly difficult. The south-east Asian country’s coal capacity is still growing, and the world’s top exporter also remains one of the biggest emitters of carbon, with environmental groups criticising Jakarta for its slow progress towards greener energy sources. But corporate efforts to diversify are now facing concerns over long-term demand for coal.

India’s power consumption remained almost flat at 141.36 billion units (BU) year-on-year in September, mainly due to the above-normal rainfall across the country, which reduced the use of cooling appliances like air conditioners and desert coolers. In September 2023, the power consumption stood at 141.29 BU, according to official data. The highest supply in a day (peak power demand met) contracted to 230.60 GW in September 2024 against 239.93 GW in the year-ago month.

Indian Energy Exchange's (IEX) total trade volume rose 24% year-on-year to 11,370 million units (MU) in September this year. The electricity volume increased 21% year-on-year to 10,332 MU in September, an IEX statement said. According to the statement, IEX achieved total monthly (trade) volume (including certificates) of 11,370 MU in September 2024, marking a 24 per cent year-over-year increase. The Renewable Energy Certificates (REC) at 1,031 MU, increased 100 per cent year-on-year.

Coking coal linkage auctions by BCCL are expected to gain traction among steel producers after Coal India Limited (CIL) made the auction terms more industry-friendly to help India reduce imports, officials said. Steel majors have expressed satisfaction with the modifications made in the terms, stating they will participate in future rounds of auctions. Steel makers, however, emphasised that quality, quantity, and timely delivery will be key factors in successfully replacing imported coking coal with domestic raw material, officials said.

India’s steel industry is set to expand significantly over the next few years, with plans to add around 23 million tonne (MT) of crude steel capacity between FY24 and FY27, according to a report by Nomura. As per the report, the industry is reflecting a compound annual growth rate (CAGR) of 4.8 per cent. The report noted that this growth target is in consistent with the industry’s long-term average growth from FY15 to FY24. Despite this substantial increase in capacity, experts believe that the Indian steel sector is poised to enter a favourable phase.

Cement prices per 50 kg bag are expected to rise further in the second half of the year as infrastructure projects receive pending budget allocations, according to analysts. Political events are unlikely to influence pricing, and the recent rollback of prices in Chhattisgarh is viewed as an exception. Analysts also believe that the upcoming assembly elections will not pressure cement companies to reduce prices. After nearly a year of declining prices, cement companies began reversing the trend with increases ranging from Rs 10 to Rs 20 per bag across regions.

India has ‘great potential’ to emerge as a hub for green shipbuilding, backed by the government's strong focus on alternative fuels and renewable energy. Modernisation and upgradation of Indian shipyards is in progress, while older dockyards are being assessed for reopening and adding more capacities for green shipbuilding, given a strong pickup in global demand, said Cristina Saenz de Santa Maria, Regional Manager South East Asia, Pacific & India, Maritime at DNV, a Norway-based testing, certification and technical advisory services provider.

The Union Cabinet has approved India’s decision to join the International Energy Efficiency Hub by signing a Letter of Intent. This strategic move aligns with India’s commitment to advancing sustainable development and reducing greenhouse gas emissions through global cooperation. With India’s inclusion, the Hub now comprises 16 members, including countries like the US, China, the UK, and Germany, and the European Commission. As a member, India will gain access to a wide network of global experts, resources, and best practices that can bolster its own energy efficiency initiatives.

The Indian logistics market, valued at Rs 9 trillion in FY23, is projected to grow significantly, reaching Rs 13.4 trillion by FY28, registering a CAGR of 8-9 per cent, according to a report by Motilal Oswal. This growth is being fuelled by structural shifts, technological advancements, and government initiatives aimed at reducing logistics costs and improving infrastructure. The National Logistics Policy has focused on increasing the share of railways in the freight movement through the development of dedicated freight corridors, improving road infrastructure, and expanding inland waterways.