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Chief Editor Rakesh Dubey, Tel: +91 91633 48159, Email: rakesh.dubey@mjunction.in Executive Editor Arindam Bandyopadhyay, Tel: +91 91633 48016 Email: arindam.bandyopadhyay@mjunction.in Editorial Board Alok Srivastava, General Manager, MMTC Ltd Amitabh Panda, Group Director (Shipping & Logistics Operations), Tata Steel Group Anirudha Gupta, Director, P&H JoyMining Equipment India Ltd Ashok Jain, Managing Director, Saumya Mining Ltd Deepak Bhattacharyya, Chief – coaljunction, mjunction services ltd Ganesan Natarajan, WT Director, President & CEO, Ennore Coke Ltd Lawrence Metzroth, Vice President – Analysis & Strategy, Arch Coal Inc M K Palanivel, President – All India Bulk, Samsara Group P S Bhattacharyya, former Chairman, Coal India Ltd S N Choubey, Head – Commercial, ABG Cement Ltd Sandeep Kumar, EIC (Secondary Products), Tata Steel Ltd Shyamji Agrawal, AVP-Central Procurement Cell, Ultratech Cement Ltd Suresh Thawani, Managing Director, Tata Sponge Iron Ltd Advertising Soumitra Bose, Tel: +91 92310 00232, Email: soumitra.bose@mjunction.in Sumit Jalan, Tel: +91 91633 48243, Email: sumit.jalan@mjunction.in Subscription Rachita Das, Tel: +91 91633 48045, Email: rachita.das@mjunction.in Toll Free No.: 1800 4192 000 1. Press 8 for publication Email: publication.tbss@mjunction.in Design Debal Ray, Sobhan Jas For suggestions, feedback and queries, please write to coalinsights@mjunction.in

EDITORIAL Dear Readers, India is not importing much coal these days. Strange as it may sound, data for the top 10 major ports show steam coal imports have actually gone down in first six months (April-September) of FY13 from last year level, though coking coal imports have slightly moved up. The top 10 ports don’t give the entire picture, of course, but show a definitive trend nonetheless. This at a time when everybody (including the coal ministry) thought India’s imports would surge to 150 million tons (mt) in FY13 from 119 mt in FY12, and the Indian power sector would guzzle every piece of coal available in the market, surely comes as news. More so, because international prices have remained soft for a while (they still are) and coal stocks of utilities are as precarious as ever. Why are the utilities not importing then? Some traders say they (utilities) are “waiting out” for the new Fuel Supply Agreements (FSA) signed with Coal India Ltd (CIL). That couldn’t possibly explain this. Data shows CIL is reasonably fulfilling its trigger level commitments (90% of volume committed). So this could be either construed as a surprise or be left unexplained. We fear India’s massive power sector expansion is going ballistic. The government better do something about it. Sadly, nothing much is being heard these days about the follow-up of Discom (distribution companies) bust or the massive grid failure that shook us India recently. Nothing much is being done about the follow-up of coal scam too. The winter session of Parliament has just begun. We hope to see some concrete measures on coal and energy sector. Formation of the coal regulator is long pending. So is the auction of blocks. Elsewhere, the prices in the international market are still subdued. Although there is an indication of some movement in coking coal, the traders are doubtful about a full-fledged recovery anytime soon.

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Copyright: All rights reserved. No part of Steel Insights can be reproduced or copied in any form or by any means without the prior permission of mjunction services limited. Please inform us if any copyright has been inadvertently infringed. Disclaimer: This document is for information purpose only. Certain information herein has been acquired from various external sources believed to be reliable. While we have taken reasonable care to compile this report, we in no way assume any responsibility for any error or discrepancy in regards to information contained herein. Readers are requested to make appropriate judgment without any prejudice or compulsion.

But not everything is gloomy here. Although affected by the soft prices of coal, the global mining equipment makers are one lot that is upbeat about the medium-term prospects for the mining sector, especially in China and India. In this special issue on 11th International Mining & Machinery Exhibition (IMME) we have attempted to capture this excitement about the largest trade fair dedicated to the mining industry in India. The globally leading players in this industry have lined up new launches and state-of-the-art technology displays for the exhibition in Kolkata. We hope the Indian miners make use of such exposure. There is also something exciting happening in the coal logistics part. At least one port, Krishnapatnam, is pledging to bring a paradigm shift in the logistics sector. We have tried to capture the prolific achievements of this new port in our cover story. Actually, India today badly needs such individual excellences from the industry. But these need to be guided by well thought out policies. Together the government and the industry can take the economy to its peak. And we the citizens must actively take part in this ‘karma yajna’. After all, the economy has its end customers in you and me, the ‘aam admi’. Happy reading,

(Rakesh Dubey) Coal Insights, November 2012

3


Contents 22 Imported thermal coal prices firm up in Nov 24 Spot coking prices firm up marginally 26 CIL production up 8.5% in H1, may achieve yearly target 36 ‘Bulk material handling sector to grow 20% y-o-y’ 42 Hectronic: helping in fuel management 42 Joy Global to showcase its latest offerings at IMME 44 Sandvik plans 2014 launch of new products 46 Long distance haulage has high growth potential 47 Asia Motor Works plans expansion 48 Rotoauto: Supplying iron ore pelletising discs 60 Coal India needs to be more proactive 62 Tata Power acquires 26% stake in BSSR mines 63 CIL posts 19% jump in Q2 net profit 64 India misses October power generation target 66 Jayaswal Neco to expand capacity despite slowdown 67 US coal production to be 1,021 MMst in 2012: EIA 68 Traffic handling by major ports down 2.82% in Apr-Oct 69 Railways coal handling up in October 70 E-auction data 72 Port data

6  |  Cover Story

“We are ready to handle the coal rush” Krishnapatnam port overcomes ‘double setbacks’ to keep on expanding horizon.

28  |  FEATURE

India’s H1 coal imports by 10 ports up marginally In contrast with expectations, India’s steam coal imports through 10 major ports show a drop in first six months.

30  |  IMME SPECIAL

Indian mining equipment industry; hop, skip and ….? The global mining equipment makers brave the weak sentiment.

52  |  Special report

Rohne project to cut off link between Palamau, Hazaribagh tiger reserves Jharkhand’s coal block may also endanger other wildlife, says report.

57  |  TECHNOLOGY

Pneuflot® technology: An improved process for mineral beneficiation Although sparsely adopted in India so far, the technology is expected to gain popularity due to its multiple benefits.

Call 9163348243 for more details

4 Coal Insights, November 2012


Cover Story

E

ven before the Krishnapatnam port was formally inaugurated sometime in 2008, it held out huge promise for the port logistics sector of the country. The port, with a planned capacity of up to 200 million tons per annum (mtpa), was easily billed to be the largest port in India. A few record breaking performances later, there was a sudden and huge challenge when the government banned iron ore export. And then again, the Reliance UMPP faced uncertainty, putting Krishnapatnam’s growth plans in sudden danger. However, just when things had begun to look really bleak, Krishnapatnam did a turnaround – stuck to its phased investment and expansion plans and most importantly, turned its iron ore terminal into a container terminal. But what is more important from the viewpoint of the coal industry, is that it has already braced up for the impending coal rush, with arrangements complete with handling capacity, high draft and environmental emission control. From coal, it is planning for more novelties, developing a car export terminal being its latest addition. In a free-wheeling conversation with Coal Insights, the CEO of the Krishnapatnam Port, and director of Krishnapatnam Rail Co Ltd, Anil Yendluri, talks about the surge in coal imports, expansions, investments, growth plans and also the challenges.

‘‘ We are ready to

’’

handle the coal rush Rakesh Dubey

6 Coal Insights, November 2012


Cover Story Excerpts: Let us start with the obvious. How prepared is your port to handle the surge in India’s coal imports? From the very time that our project kickstarted it was known that coal import into India will increase several times. With power generation needs going up, domestic coal production will fall short, and imports will rise. We also understood that an importer of coal needs bigger sized vessels and good draft. So even before the rush came, we dredged our port to increase our draft to 18.5 metres. What this means is that before the real need came, we were already ready with 18.5 metres channels. Our railway line is also ready. Today the highest number of rakes that we have handled is 15, but once the doubling happens by March 2013, we can handle 30-35 rakes a day. We are thus ready with our capacity and connectivity to handle more coal in the coming days. And it’s not only about coal, we are also mechanising our fertilizer handling facility. We are ready to handle 4-5 million tons of fertilizer; as for edible oil we will be ready to handle about 2-3 million tons. Our rake handling capacity can go up to 60 rakes per day with two lanes. In fact, we will be comfortably cruising to that level. We can therefore reasonably claim that we had anticipated the trajectory and growing needs of the customers and growing needs of the nation. We have keenly observed which power plants are going down, which plants are moving up. We have also watched which steel plants are coming up in various places. For instance, the steel plant of JSW started with 6 million tons per annum (mtpa) capacity, but is now a 10-mtpa plant and they are planning to increase it further to 16 mtpa. This implies a substantial increase in their coking coal requirement, almost all of which would be imported, and also increased movement of iron ore. To make 1 million tons (mt) of steel, we have to move 4 mt of raw material, which includes steam coal, coking coal, iron ore, dolomite, limestone and other raw materials.

Taken everything together there will be around 42 berths and that is the master plan.

8 Coal Insights, November 2012

Advantage Krishnapatnam

• All-weather port operating 365 days a year • Vast protected waterfront of 12.5 Km, to develop 42 berths of 15-20 m dredged depth • Deep draft of 18 m capable of handling Capesize vessels up to 180,000 DWT • Approach channel of 6.5 NM with one of the largest Turning Circles (500 m diameter) to ensure safe maneuvering of vessels • Robust and dedicated connectivity to hinterland through national highways and national railways • Planned capacity up to 200 mtpa, making it the largest port in India • State-of-the-art mechanical cargo handling equipment, capable • of handling bulk cargo at the rate of over 100,000 tons per day • Fastest turnaround time – High load/discharge rates • No waiting time – No demurrage • Availability of extensive yards and large godowns for transit storage • Customized solutions based on the requirements of the customers

They have to be transported from the port as so much of imported component is involved. We calculated all that and then planned our capacity. The overall growth of our cargo during the last 4-5 years has been a little less than what we had anticipated, but we are on track and geared up for the growth trajectory. Some hiccups and operational risks, as we face on occasions, are only too normal in our kind of business. Krishnapatnam port came up with a lot of promises. How do you describe your performance so far? What is your revenue and growth in the current fiscal? As of 2011-12, our revenue was `700 crore. Our net profit in 2011-12 was around `70 crore. Total cargo handled during the year was around 15.4 mt and the number of ships handled was 428. This year (2012-13), till the end of this

month (November), we are close to 13.8 mt of cargo handling. We expect around 30 percent growth in cargo handling as well as revenues this year. This is our expectations; the actuals can only be confirmed in March 2013. You talked about some hiccups and risks. What are the risks facing your port business? How are you positioned vis-à-vis other major ports in the country? Every industry has its own risks and rewards. Ports too have their unique features i.e. changing prospects of cargo profile. For example, Chennai port has witnessed its bulk cargo moving out because of the High Court order; so they have aggressive plans to increase container terminal. Each port is different as each of them has different risks and investments. We cannot equate any two models because the cargo is different, cargo handling is different, cost is different, structure of cargo handling is different and the nature of investment is also different. In some ports, very little dredging is required to increase the draft, while some other ports may require huge dredging. In some ports you require huge maintenance, yet in some other ports you require huge railway line or roadways to establish connectivity. So you cannot have one set of investment

When iron ore handling stopped, we immediately changed to a container terminal. We cannot remain stuck. The idea is to rise to the occasion in any situation. pattern or one set of revenue pattern for all the ports. You have to take into account the risks as well as the investment and the cargo profile and the nature of cargo. For example, if you are handling fertilizer, your cost is almost 70-80 percent of the revenue because a lot of labour component is involved here in loading and unloading. Despite whatever mechanisation we do, ultimately it has to be unloaded or loaded on the back of labourers. Similarly, if you are getting wheat, unloading wheat bags has to be done manually; the machine cannot do it. In


Cover Story Western countries, they do not have labour, so they do pelletisation. If it is pelletised cargo, you can do mechanisation, but if it is unpelletised cargo, the human aspect has to be there and wherever there is human involvement, the cost will shoot up. We have to take these things into account while fixing the revenues. Normally the government and the developer sit and decide the revenue based on cargo that they have or the potential cargo that they can have. So I don’t think there can be a uniform norm for fixing revenue and investment.

Phase III investments will depend on requirement. The requirement may change the entire investment profile. What is the ownership structure of the port? The port is owned by the Andhra Pradesh government and the Krishnapatnam Port Company Ltd (KPCL) is only the operating company. The KPCL is promoted by the Hyderabad-based CVR Group. Lately, 3i has picked up 8 percent stake in the port

after making an investment of around $161 million. The remaining 92 percent is owned by CVR Group. And the investment of 3i is only in the operating company. What is your arrangement with the Andhra Pradesh government and how much revenue do you share with them? For the first 30 years, we will pay 2.7 percent of the revenue. For the next 10 years, we will pay 5.4 percent of the revenue and for the next 10 years we will pay 10.8 percent of the revenue. For the entire span, we will share the revenue irrespective of whether we earn profit or not. As we grow, this part will also grow. We also have a single window system, which means we offer end-to-end port services, so the government has no role to play here and experience says this results in better revenue. As far as investment is concerned, the investment of the Andhra Pradesh government, apart from land, is nil. Even in land, we buy the land, give it to the government and then take it back on lease and adjust that in the revenues. So the

upfront cost of the government is only the connectivity. They have to give connectivity, not in railway, but only for road. What has been your investment so far? What is your capex plan going forward? We have invested a total of around `4,000 crore so far and by the end of completion of the second phase of expansion, we would have invested around Rs 5,400-6,000 crore. Actually, the investments keep on changing as we keep on changing the pattern of port operations. For example, when we started there was iron ore, so we built iron ore berth to feed the needs of the iron ore sector. Now that iron ore handling is not there we cannot afford to remain stuck. So immediately we changed our plan to container terminal and we bought the equipment needed for that. We are open to catering to the current need of the day. For example, agricultural exports are increasing and if tomorrow there is a requirement for that, we need to prepare ourselves accordingly. It is possible to survive only if we change ourselves to suit the customers’ needs.

Coal unloading at Krishnapatnam

10 Coal Insights, November 2012


Cover Story ‘When iron ore handling stopped, we immediately changed to a container terminal. We cannot remain stuck. The idea is to rise to the occasion in any situation’ For example, once we realised that doubling of railway track is very important with increased movement of cargo, we got all the permissions and completed the railway track doubling. The idea is to rise to the occasion in any situation.

number of berths, because the same berth can give you 6 mt or 4 mt or 2 mt of cargo. We have also been setting up a worldclass, all-weather container terminal. This terminal is built in two phases. The first phase was commissioned in September 2011 with a capacity of 1.2 million TEUs. The second phase will have a capacity of 4.8 million TEUs. Phase III expansion will involve construction of more berths for bulk cargo. With some more power plants and Ultra Mega Power Plants (UMPPs) coming up, they may need dedicated terminals and container terminal of second phase capacity may be expanded. Actually, the plan changes with the need of the customers. If tomorrow someone wants to set up a refinery, we may have to put up facilities to cater to his needs; or if somebody wants an LNG terminal, we will need to put up an LNG terminal. We must

What about your next phases of expansion? We had started our expansion work in the second phase after commissioning the first phase in June 2008. The second phase of expansion is likely to be completed by January-February 2014. Post completion of the second phase of expansion, we will be in a position to handle up to 50 mt of cargo annually. The number of berths will be increased to around 11. However, the cargo handling does not always depend on the

have a proper understanding of the needs of customers and then go for it. What will be the investments for Phase III expansion and the number of berths after completion? Phase III investments will depend on requirement. The requirement may change the entire investment profile. We have a great strength in the form of our flagship company NEC. They are our builder, our EPC contractor, and have all the wherewithal – operation, machinery, trained manpower, and so it gives us a lot of comfort. When we made our original plan for berths, we had planned for 22 metres draft, because we were looking at a future scenario. For that depth, we had to just dredge. However, as soon as berth numbers 1 and 2 were ready for handling iron ore, there was a ban on iron ore export and the entire scenario changed. However, we did not waste any

Krishnapatnam port – emerging coal hub of India Coal requirement for the power plants PSA signed capacity (MW)

Investment (approx.)

APGENCO

2400

1600

8800

Signed

5.00

5.00

5.00

5.00

5.00

Thermal Power Tech

1980

1320

7260

Signed

6.00

2.00

6.00

6.00

6.00

NCC Power

1320

1320

7260

Draft sent

6.00

2.00

6.00

6.00

6.00

Simhapuri Energy

1920

600

3300

Signed

2.35

1.23

2.35

2.35

2.35

2.35

Meenakshi Energy

2320

1000

5500

Signed

4.20

0.35

0.68

2.7

4.2

4.2

Krishnapatnam Power

1980

1320

7260

Draft sent

6.00

2.00

6.00

6.00

Kineta Power

3200

1600

8800

Draft sent

6.00

Name of power plant

Status of PSA

Coal qty (in mt)

Qty required by (in mt)

Actual capacity (MW)

2012-13

2013-14

2014-15

2015-16

Beyond 2016

North side Power Plants

South side power plants

Total

35.55

6.00 1.58

12.03

24.05

29.55

Coal requirement for steel plants* Name of plants

Capacity (in mt)

Coal requirement (in mt)

Current capacity – 10 mt Capacity enhancement – 6 mt

Requirement – 20 mt Capacity enhancement – 8 mt

Posco

6

4

ArcelorMittal

6

4

NMDC

3

2

JSW Steel

*Note: In addition 38 mtpa of coal is required for steel plants in the hinterland sourcing coal from Australia, Indonesia and Mozambique.

12 Coal Insights, November 2012

35.55


Cover Story time and turned it into a container terminal and thus a container yard was prepared. So there was nothing like a fixed plan… the only thing is that it was to come at the end of Phase III; instead, it has come at the end of Phase II. We have literally converted our iron ore terminal into a container terminal. Earlier, we were using Berth no. 6, 5, 4 (and they come like that). We started construction from Berth no. 6 and berth no. 3 was to be used for iron ore; but when that did not happen, we started using it for coal and converted berth nos. 1 and 2 into container terminals. After Phase III, there will be a Phase IV also. Taken everything together there will be around 42 berths and that is the master plan. Right now we have 10 berths and one more is coming up so we will have 11 berths by end of Phase II. We have not defined Phase III requirement, but once we define that we may bring in some new commodities to handle. Unless we complete Phase II we cannot go into Phase III. Is your plan to set up container terminal an effort to compete with the Chennai port? Why should I compete? I should complement and supplement those initiatives of Chennai port. Ultimately it is the customer who uses the port and he has to see who gives the best service.

As a port, I cannot decide what I will handle. I will handle whatever is imported or exported by the country. If you go to the market you will see that there are so many people offering so many products and services, but you choose the one which is the best in terms of quality and the cost; so the port users now have more options. Are you planning an IPO? I think I cannot answer this. This can be answered only by my Chairman and the MD. Your port has witnessed two big setbacks in its initial days – the ban on iron ore exports and deferment of Krishnapatnam UMPP by

14 Coal Insights, November 2012

In the fourth year (2011-12), our iron ore handling fell to zero, but coal handling rose to 11.3 mt, 2.3 mt was fertilizer and close to 1.0 mt was granite. So during these four years, you will see how cargo profile changed and how we have managed to change ourselves. This year (2012-13), again, there is zero ore export. But we have handled close to 13.8 mt of cargo, till close to the end of November. The cargo profile includes coal, fertilizer and edible oil (around 1 mt), then granite, agri commodity…it’s a mix of it all. In coal itself, we may touch 15-16 mt this year (2012-13). • 180 Km North of Chennai • Located in Nellore (district HQ), on National Highway 5 (ChennaiKolkatta) • 26 Km from Venkatachalam, the nearest rail head on the Chennai– Kolkata main line • Vast hinterland covering Southern • Andhra Pradesh, Districts of Rayalseema, North Tamil Nadu and Eastern Karnataka • Being on Eastern Coast supports • LOOK EAST Exim Trade Policy • 14° 15’ N Latitude, 80° 08’ E Longitudes

Reliance Power. How did you cope with this? I did not take them as setbacks. I would only say this is a change in the profile of cargo which India exports or imports and not a setback for the port. As a port, I cannot decide what I will handle. I will handle whatever is imported or exported by the country. That said, I admit we started off as an iron ore port. We had handled around 8.2 mt of cargo during the first year of our operations i.e. during the six months of 2008-09 after we became operational in June 2008. Of this, around 7.7 mt was iron ore, and hardly around 0.5 mt was coal cargo. In the second year (2009-10), we had handled a total cargo of 16.1 mt of which 10.5 mt was iron ore, 1.0 mt was fertilizer and around 2.0 mt was coal. In the third year (2010-11), midway through, iron ore export was banned, but in that year we handled a total cargo of 15.9 mt of which 5.0 mt was iron ore, 7.0 mt was coal and 2.15 mt was fertilizer.

Has the iron ore ban not really affected your growth plans? Well, it has affected us to a certain extent, but we were always ready to change our profile and thus overall growth was not affected much. What about the Krishnapatnam UMPP? Will it affect the port’s growth projections? If it is not coming, we have to compensate from somewhere else. Other power plants are coming up. The country’s need for power plants is growing anyway; so generation capacity will come in one form or the other. As it stands now, it is because of policy indecisions that a lot of projects are running behind schedule; the timelines of some power plants have also been extended. Not only UMPP, which you said had been unduly prolonged, other power plants also have slowed down. But then once they come up, there will be a spurt in activity.

Quality, efficiency and cost competitiveness are the USPs of Krishnapatnam port. At the same time, even without that UMPP, there are adequate number of power plants with expansion plans to compensate for the loss of cargo, if any. In fact, the remaining seven power plants that have been planned in our vicinity will together add something around 15,000 MW. Along with these, we will try to serve the hinterland where lots of power plants are coming up. You shouldn’t see Krishnapatnam port as a port of Andhra Pradesh only. It is actually a port catering to the south eastern part of India – close to Chennai (Tamil Nadu), close to Karnataka, of course in


Cover Story Andhra Pradesh, and it is close to some parts of Maharashtra as well. We are closer to both Chandrapur and Khaparkheda power plants in that state (Maharashtra). Both of these plants can come here for their cargo movement. In Andhra Pradesh, all the power plants are in close proximity to us – Rayalseema, Vijayawada. In Karnataka, Raichur power plant is closer to us. We cater to them and their needs are increasing.

Guruvayur) had announced their first half results a few days back and revealed this figure of 45 percent. There are lots of cement

Similarly, a lot of steel plants are coming up in the hinterland. One reason for this could be promotion of steel in the country and the second is the domestic availability of iron ore. Many companies are setting up steel plants and so they require coal – coking as well as non-coking coal – they require iron ore and their requirements are huge. For them, it is better to send material by ports.

plants and power plants in this region, but still 45 percent of their revenue came from this port. Now, this revenue was not there earlier. From zero it may touch close to `1,000 crore for the Railways. Also, for customs and service tax, revenue of around `1,000 crore might have been generated due to this port.

Doesn’t that mean you are targeting to divert cargo from other ports?

There is no issue as such. The only problem is with governmental procedure, and unless that is cleared, I cannot lay my conveyor belts. However, I am hopeful that by March 2013, the clearances would come. APGENCO is working hard on getting clearances because they require the conveyors more than anybody else for transportation of coal from our port to their power plant.

We are capturing the growth of the nation. Because of us, someone somewhere may lose something, but there could also be others who may actually gain. Take the case of East Coast Railway. Today, we are the biggest customer of this Railway. After Singareni Collieries Company Ltd (SCCL), we are the biggest contributor to their revenue. If you take Vijaywada division, under which we work, 45 percent of its revenue is from Krishnapatnam port. Vijaywada division (starting from Vizag till

But of course, coal is expected to continue to be a major cargo for us in years to come.

What is your land issue with APGENCO?

Please tell us about your rail venture. We have formed a SPV, Krishnapatnam Rail Co Ltd, where Rail Vikas Nigam Ltd has got 33 percent stake, Andhra Pradesh

government has got 33 percent and we have got the balance shareholding. Again, it is part of concessional agreement, depending on the type of risk profile. It need not be uniform. The Railways have only a particular type of privatisation. They take funding from funding agencies. In this SPV, all the partners will share the cargo handled. Once we get our money back and the loan is repaid, that will become the railway property. Please elaborate on your container service. It was earlier thought of as an import terminal, but later the plan changed. Actually, Andhra Pradesh has a lot of export cargo. Although we started off with import cargo, now with the logistics and connection issues resolved, we are getting export cargo as well. In the first year, we were only handling MERSK service. In the second year we slowly started BPL service, which earlier had fortnight calls, but now has got good number of calls and then MSC has come. Now they are supporting imports also and we are talking with other liners and I hope they will come. Earlier, they were making only ad hoc calls, but now they are making firm calls. MSC is currently doing Colombo-Chennai and Krishnapatnam because their hub is Colombo. So they take their boxes to Colombo and from there to other places. Now they are talking to their other customers as well and it is picking up.

Krishnapatnam’s connectivity

Road • Dedicated 4 lane road (26 Km) from port to NH5 is operational • To be upgraded to 6-lane road in the future (Land acquisition is completed) • Dedicated Over Dimension Cargo (ODC) road around the port for handling Project Cargo Air • Nearest domestic airport : Tirupati (120 Km) • Nearest International Airport : Chennai (180 Km) • Port owned Helipads

16 Coal Insights, November 2012

Rail • Land between Road and rail line is already acquired for future expansion • Currently doubling of existing railway line is under progress


Cover Story What is the USP of Krishnapatnam Port? It is quality, efficiency and cost competitiveness. Quality, efficiency and cost competitiveness are the USPs of Krishnapatnam port Our total cost of handling is much lower and we had to do this to in order to attract customers. If you have multiple operations, your operation cost increases and if cost of operations increases your total cost goes up. So we have had to work backwards. For us every cargo is different, every operation is different. Suppose I charge less, but there is heavy demurrage to be paid by customers, the total cost for the customer will move up. Now, suppose there is no demurrage, but there is huge delay and cost involved in taking the cargo from the port to the consumption point or to bring the cargo to port, then again your total cost increases. For a customer using the port’s services, it is important that the cargo is discharged and taken out of the port fast and delivered

Container handling at the port

18 Coal Insights, November 2012

Performance highlights Financial year

Cargo in mt

Vessels

2008-09

8.21

206

2009-10

16.13

407

2010-11

15.91

417

• More than 100 Panamax/Cape size vessels handled in 2010-11 and 201112 • Handled 391 Rakes during the month of Oct 2012 on an average of 13 rakes per day • Highest cargo handled thru rail in a month is 1.05 mt in Dec 2011 with 309 rakes • Total 7936 Rakes handled inside the Port Siding till July • Total 3114 Rakes are handled in 2011-2012

to the customer on time. Increased delay in supply chain may lead to increased cost. As for the port costs incurred by a user, some part is upfront cost and some is behind cost. If you look at all the cost and give him a good package he saves on cost. What the port user wants is clarity in terms of cost, efficiency in operations, no unnecessary and undue cost, and then safety of his cargo. We are providing all these, but the parameters keep on changing from port to port and from customer to customer. Overall, it seems that coal will be the mainstay of your cargo for the next five years. We would not necessarily depend on coal as imported LNG may also come up. If imported LNG does come up, we will have the advantage of fleet and just bring it in and build up storage. But of course, coal is expected to continue to be a major cargo for us in years to come.


Cover Story Handling coal is a tricky business because of the damage caused by pollution. What is being done by Krishnapatnam in this respect? We take the issue of environment very seriously. At the same time, we understand that coal is very important for the nation; not only at the present juncture, but 20 years down the line too. The real issue is how we handle it efficiently, without causing concerns to the environment. As of today, we have adhered to almost 90 percent of the norms set for safe handling of coal by the Pollution Control Board (PCB) and the balance 10 percent will be adhered to soon. We have conducted environmental studies all around the coal yard, planted trees and supervised the coal wagon handling stations. We cannot ignore certain things. If they are the nation’s need and we ignore them, it will be a disaster. We have 184 acres of reservoir, and we constantly measure the pollution level on the AEQ machine. There are some permitted levels. Everyday round the clock this is being monitored. The minute it shoots up to a definite level, we get alerts and we stop work, control it and then only resume work. We have to do that anyway. There are always some environmental issues in any mega project and we have to work on it. At the end of day, for example, the power plants do have some issues, but we cannot say that we will only use hydro or solar or wind power. They are important, of course, but their capacity to feed the nation’s requirement is very limited, may be 20-30 percent or maximum 40 percent; but what about the rest? So we have to understand environmental concerns, industrial concerns and the nation’s concerns. We have the facility to know what is the dust level or noise at any point in time and then act accordingly. Very recently I suddenly got a report that pollution level has shot up. On enquiry it was found that these days it is very cold and the workers had put up a bonfire to make themselves confortable, but that had immediately alerted the AEQ machine. The wind pattern in Krishnapatnam is from south to north-west. So we have kept our grain terminal at the south-west corner

20 Coal Insights, November 2012

Productivity benchmarks

and only coal goes from the north-east corner. Similarly, we are moving our agri cargo to our South Port, which is almost 5-6 km away. We will start a car terminal very soon and all that will go to the South Port. So we are continuously innovating. Could you please elaborate on the car terminal?

MV Cohiba: 122,247 tons coal discharge on Aug 7, 2012

All India Records • Coal discharge –122,247 tons/day • Fertilizers discharge– 35,278 tons/ day • Iron Ore loading – 60,021 tons/ day

MV Trident Protector: 35,278 tons urea discharge on Jan 7, 2011

Other Records • Edible Oil discharge - 559 tons/ HR • Granite loading – 8,518.19 tons/ day • Raw Sugar discharge – 15,614 tons/day

Double Banking of MV Titan Glory & MV Da Zi Yun on Feb 4, 2011

• Double Banking of vessels for discharging Edible Oil and loading Granite • The loading/discharging rates for other commodities are also among the most efficient in India using conventional system

Car export from this port will start any time now. The industry needs a key terminal and we will operate from South Terminal that will handle car exports. Many OEMs from Chennai and Bangalore have come and visited and they are enquiring. We are expecting to start the car terminal from the first quarter of 2013-14. The project proposal is ready. Now it is the question of making the yard and taking a look into the last minute details as per the requirement of customers. In fact, some cars move in containers also. It all depends on their needs. There are many people in Chennai and Bangalore such as Renault-Nissan who are thinking of exporting in a big way. Toyota is planning too, and so is Honda. Actually, India is emerging as a global sourcing hub for these automotive giants. From the OEMs’ point of view, I suppose they would look at the advantage of moving their materials to Krishnapatnam vis-a-vis other Indian ports. If you compare the distance between Sriperumbudur and Chennai vis-a-vis Sriperumbudur and Krishnapatnam, obviously you will find the time is less for Krishnapatnam and this route will save costs. Now consider this. Getting the material to Chennai port will take time because of port congestion. Anybody getting into Chennai port will have to use trucks and there will be traffic within the city. Besides, all companies are currently exploring new opportunities and options because they cannot really depend on one port. We on our part are talking to everybody, all car exporters, and will provide whatever facility they need. I am expecting to start the car handling facility from the first quarter of 2013-14, but cannot say anything on volumes right now. 


coal market fundamentals

Imported thermal coal prices firm up in Nov Coal Insights Bureau

I

n line with firmer oil prices, thermal coal prices firmed up in November as power consumption picked up during the festive season in India and stockpiles reached critical levels in most of the power plants in the country. In the international market, Australian thermal coal of heating value of 6,300 kcal GAR is currently being offered at around $89/ton in November compared to $81/ton in October end. Offers of South African thermal coal of heating value of 6,000 kcal NAR rose to $87/ton in November compared to $80/ton in September. Offers of Indonesian coal of heating value of 5,900 kcal GAR is hovering around $70/ton in November compared to $71/ton in October, while coal of heating value 5,000 kcal/kg GAR is quoted at $55/ton in November compared to $54/ton quoted a month back.

Trade sources felt Indian buyers would be drawn to the market as they are holding low stocks and would likely look at lower calorific value Indonesian coal in the coming weeks. For Indian buyers it is a question of price and whenever China is out of the market and they try to put the pressure on producers in order to bring the offers down if they can, sources said. However, with margins at low levels, all sellers canvassed said that there was no room to cut offers further. Some sources said Indian enquires for lower calorific value thermal coal — including, 3,500 kcal/kg GAR, 3,800 kcal/kg GAR and 4,200 kcal/kg GAR — were picking up. Indonesian 3,800 kcal/kg GAR was widely described as the most liquid market, as several buyers were said to be taking this material on a hand-to-mouth basis. Despite this, buying and selling ideas still showed a $2-2.50/ton spread, with offers of $33-34/ton

Steam coal FOB India ($/ton) South African Coal (6000 Kcal NAR)

Australian Thermal coal (6300 GAR)

84.5

82.5

72.4

55.9

2-Oct

84.5

82.5

72.4

55.9

3-Oct

84.15

82.5

72.4

55.7

4-Oct

85.4

83

72.4

55.7

9-Oct

86.3

83

72.5

56

29-Oct

79.75

81.25

70.55

54.55

5-Nov

80.2

80.05

70

55.2

6-Nov

81.9

80.55

70

55.2

7-Nov

81.75

81

69.8

55

8-Nov

81

80.5

69.7

55

9-Nov

81.5

81

69.6

54.8

Date 1-Oct

Indonesian (5900 Kcal GAR)

Indonesian (5000 Kcal/GAR)

12-Nov

83

82

69.6

55.1

14-Nov

83

82.75

69.7

55.2

15-Nov

83

84

69.8

55.2

20-Nov

84

84

69.9

55.2

21-Nov

87.5

88.5

69.9

55.2

22-Nov

87.5

88.75

70

55.2

22 Coal Insights, November 2012

FOB Kalimantan being met with bids of $3131.50/ton FOB. Traders said that tighter availability following curtailed production was beginning to push the Indonesian price of 3,800 kcal/kg GAR higher. Indian buyer Jaypee Cement was said to have taken one cargo of 3,900 kcal/kg GAR Indonesian thermal coal for December arrival at $45-46/ton as part of a tender that closed on November 12. However, there was no official confirmation available in this regard. Coal stock at critical levels

The stock of coal at 89 power plants monitored by Central Electricity Authority (CEA) was around 8.82 mt as on November 21, 2012. According to the data of CEA, stock of imported coal and domestic coal stood at 0.480 mt and 8.34 mt. Total number of plants facing critical coal stock situation of less than seven days stood at 46. However, the number of plants facing super critical coal stock situation of less than four days was 25. Imports to rise

According to analysts, like China, India’s domestic production of coal is not expected to meet the strong growth expected in the demand for coal. Currently 53% of the total power generation capacity is from thermal power. To speak about the scale of thermal coal requirement in the medium term, there are four Ultra Mega Power projects (UMPPs) at Sasan, Krishnapatnam, Tilaiya and Mundra which are expected to generate more than 4000MW each of power annually which would require 16-20mt of thermal coal annually. These are either in construction stage or have commenced operations albeit at lower operating rates. But to meet this demand, the growth in domestic production of thermal coal would not be sufficient as it is constrained by delays in regulatory approvals, environmental approvals and negotiating agreements with local land holders. Thus India’s thermal coal imports are expected to increase at an average annual growth rate of 11 percent to reach 148 mt in 2017, according to analysts. 


coal market fundamentals

Spot coking coal prices firm up marginally 0.3-0.4% sulfur were heard at $170/ton CFR China. Demand for PCI from Chinese steel mills was still strong. But supply was rather tight, as Australian miners had sold out for December cargoes and Russian supply was occupied by Korean buyers, traders said. On the buy-side, some Chinese end-users were still looking for coal arriving before the Lunar New Year in early February, traders said, but volumes being sought were not as significant as a few weeks ago. However, some market participants had turned more cautious as China’s Communist Party congress ended – meaning domestic coking coal supply would recover, and steel transactions at mills were not good with steel prices expected to fall in the future. In India, a 63-65% CSR, 19-21% VM and 8-9% ash HCC was heard offered at

Coal Insights Bureau

T

he spot coking coal market strengthened further in November, thanks to continuing buying appetite from Chinese end-users, and limited supply for December loading cargoes. Premium low-vol HCCs traded at around $161/ton FOB in November, up from $149/ton FOB Australia. Low vol PCI prices recovered to $129/ton in November compared to $115/ton with some buying interest. The semi soft variety was quoted at $112/ton in November compared to $100/ ton in October. Cargoes earlier bought by traders had started to arrive China ports, and continued to attract some buying interest. Indicative offers of Australia premium HCC with around 70% CSR, 20% volatile matter and

Coking coal FOB India ($/ton) HCC Peak Down fob Australia ($/ Ton)

Premium hard coking coal prices (premium low vol) fob Australia ($/ton)

HCC 64 Mid Vol fob Australia ($/Ton)

Low Vol PCI fob Australia ($/Ton)

Semi soft coking coal rates fob Australia ($/ton)

Met coke price cfr India $/ton)

1-Oct

143

142.5

128

103.5

94

317

2-Oct

143

142.5

128

104

94

317

3-Oct

143

142.5

128

104.5

93

316

4-Oct

142

142

127

105

92.5

316

9-Oct

144

143.5

129

109

97

319

29-Oct

149

149

130

115

100.5

316

5-Nov

154

154

136

121

103

307

6-Nov

156

156.2

137

124

103.5

307

7-Nov

159

159.5

138

124

104.5

307

8-Nov

160

160

138

124.5

106

307

9-Nov

161

161

142

125.5

110

307

12-Nov

161

161

142

125.5

110.5

307

14-Nov

161

161

142

126.5

113.5

307

15-Nov

163

163

143

127.5

114

306

20-Nov

162

162

141

128.5

112

303

21-Nov

161

161.5

142

129.5

112

304

22-Nov

161

161.5

143

129.5

112

306

Date

24 Coal Insights, November 2012

$160/ton CFR, with one buyer stating interest at $150-155/ton CFR. Separately, an unblended US coking coal with 24% VM, 9.5% ash, less than 1% sulfur and 1.2 MMR was also offered to India at $132/mt FOB US east coast for a December laycan. In India, spot demand continued to be slow, with some end-users preferring coal available in ports instead. Australian premium mid-vol HCC was available at the west coast of India at `10,000-11,000/ton, which approximates to $176-194/ton CFR after deducting `270/ton for port charges. Buyers were said to be more interested in these cargoes since smaller quantities of coal could be purchased, which made more sense in the current market with low steel demand, one of the sources said. Steel mills in India were also facing immense pressure with the rising cost of iron ore which meant that allocated expenditure for coking coal had been reduced, sources said. India imports 30-35 mt per year of coking coal currently. India plans to invest about $1 trillion in the infrastructure sector during the 12th five-year plan period running from April 2012-March 2017. Sources have earlier estimated this would generate some 200-250 mt of steel demand in the period. Met coke prices ease in November

Metallurgical coke eased in November on low demand and higher supply. Met coke is quoted at $306/ton cfr India in November compared to $316/ton cfr India in October. Sources said metallurgical coke market saw some possibilities of an upside in the market after about four months of nearcontinual declines with the recent uptick in coking coal prices. An increase in Chinese domestic metallurgical coke prices also raised the possibilities of an increment in the seaborne market, traders said. Meanwhile, a trader reported a sale to an end-user concluded at around $318/ton CFR East India for 64% CSR, 11% ash coke. In the domestic market met coke prices hovered around `17,000/ton ex-plant in the eastern region. Producers were skeptical about the offer since it was still uncertain as to when the export duty in China would be lifted. 


Feature

CIL production up 8.5% in H1, may achieve yearly target Coal Insights Bureau

A

fter widely missing the production target for consecutive three years, Coal India Ltd (CIL) is bracing up to achieve the annual production target of 464 million tons (mt) in 2012-13. If the halfyearly trend is anything to go by, the world’s largest coal miner may actually see crossing the mark set by the government. According to information available with Coal Insights, CIL has achieved around 8.5 percent growth in production during the first six months (H1) of FY13. This is comfortably above the 6.66 percent growth required to achieve the yearly target. Coal production during H1 FY13 was 191.54 mt, up by 14.93 mt over 176.61 mt achieved during the same period last year. The high growth was possible due to a 10.9 percent jump in production during the second quarter (Q2) when the coal monolith produced 89.09 mt, compared to 80.30 mt in Q2 FY12. While the Q2 FY13 production was below the 102.45 mt produced in the previous quarter, it was nevertheless significantly above the last year’s figure. Performance during Q2 is generally affected by heavy rains which marred production both last year and the current fiscal. While CIL chairman S Narsing Rao is

generally happy with the growth figure, he cannot but be concerned about the production requirements for the coming quarters. The third quarter (Q3) production target is a few notches above the Q2 performance, at 124 mt. Assuming that CIL achieves the Q3 target, there would still be a lofty target of 149 mt left to achieve during the fourth quarter (Q4) of FY13. However, given that the company historically achieves high production in the last quarter, the Q4 target this year may not be an impossible task. Overall, India’s largest miner looks poised, after a long time, to achieve its annual production target in FY13. Speaking on CIL’s half yearly performance, coal minister Sreeprakash Jaiswal recently said that the state-owned miner’s production was nearly 96 percent of the target till the end of October 2012. He further said that incremental production till October 2012 was around 18 mt. Quarterly coal production and targets for CIL in 2012-13 However, CIL’s production between April and October 2011-12 stood at 209.61 mt and going by the minister’s comment, the total production between April and October 2012-13 should be around 227.61 mt. This implies that production in October was 36.04 mt, up by a staggering 25.53

Quarterly coal production and targets for CIL in FY13 (in mt)

160 140 120 100 80 60 40 20 0

Q1

Q2

Q3*

* Quarterly target   ** Requirement to achieve FY13 target

26 Coal Insights, November 2012

Q4**

Captive production misses H1 target

U

nder the shadow of the coal scam, the captive mining sector in India has widely missed the production target during the first half (Apr-Sept) of 2012-13, according to information available with Coal Insights. Captive coal production stood at 22.96 million tons (mt), about 19.72 percent below the target of 28.6 mt set for the period. The first half (H1) production, however, was marginally higher than 21.51 mt reported for the corresponding period of 2011-12. Despite the slight improvement yearon-year, the production performance of captive coal blocks has been grossly disappointing, though not so much unexpected, industry sources said. The coal block allocation scam, as alleged by the Comptroller and Auditor General (CAG), has further worsened the possibility of captive production to pick up in near future. Since the performance of the captive coal blocks is crucial for narrowing the gap between domestic demand and supply, in the current scenario this gap is expected to widen further, worry the industry experts. percent compared with 28.71 mt produced in September. Coal despatches

Jaiswal said the company’s coal despatches during the seven month period of 201213 stood at 253.27 mt, up 8.6 percent over 233.21 mt despatched during the corresponding period of previous year, as per Coal Insights estimate. Supplies to power sector between April and October stood higher by 11.6 percent at 184.36 mt (estimated) compared with 165.20 mt (actual) during the same period of FY12. Similarly, the despatches in October should have been 38.99 mt and despatches to power sector in October should be 28.72 mt as the despatches between April and September stood at 214.28 mt and that to power sector at 155.64 mt. 


feature

India’s H1 coal imports by 10 ports up marginally Coal Insights Bureau

I

n stark contrast with market expectations, India’s coal imports via 10 major ports during the first six months (AprilSeptember) of 2012-13 increased by a mere 1.78 percent, according to a compilation (provisional) by Coal Insights based on official figures received. The total import of coking coal, steam coal, pulverised coal injection (PCI), anthracite coal, metallurgical coke and petroleum coke via 10 major ports – Chennai, Ennore, Gangavaram, Kandla, Kolkata, Mormugao, Mundra, New Mangalore, Paradip, Vizag, Cochin and Mumbai - stood

at 38.82 million tons (mt) between April and September 2012. The import Imports through 10 major ports in H1 (in mt) of same materials via same number 25 of ports stood at 38.14 mt during 20 the corresponding period of 2011-12, 15 the compilation 10 revealed. The total 5 import during the full financial 0 Coking coal Steam coal year 2011-12 H1 FY12 H1 FY13 through the 10

India’s April-October foreign trade deficit widens

I

ndia’s foreign trade deficit for April-October 2012-13 was estimated at $110212.91 million, up 3.19 percent compared with a deficit of $106,805.58 million during the corresponding period of 2011-12, an official release said, quoting provisional figures. The deficit in October stood at $20,961.44 million, up 19.49 percent from $17,543.04 million in October 2011, and also up from $15,622.42 million in August and $15,493.22 million in July 2012, the release said. The deficit in April-October 2012-13 in Rupee term was up 22.24 percent at `598,862.39 crore from `489,923.25 crore during the corresponding period of 2011-12. The deficit in October 2012 stood at `111,145.73 crore, up 28.62 percent from `86,413.33 crore in October 2011. India’s exports, imports and trade deficit (in $ mn)

300,000 250,000 200,000 150,000 100,000 50,000 0 Exports

Imports Apr-Oct '11

28 Coal Insights, November 2012

ports stood at 72.14 mt. However, the total import of coal by the country in 2011-12 was much higher at around 119 mt after including the figures from non-major ports such as Navlakhi, Karaikal, Krishnapatnam, Tuticorin, Magdalla, Dahej and Porbandar. Similarly, the actual imports during the first six months of 2012-13 are estimated to be around 58-60 mt if the figures from other ports too are combined.

Apr-Oct '12

Trade deficit

The compilation of data from 10 ports revealed that import of coking coal during the first half of 2012-13 increased by 7.21 percent and that of metallurgical coke by 104.61 percent while import of PCI coal increased by 0.78 percent. The data further revealed that import of steam coal, anthracite coal and pet coke through these major ports fell by 3.27 percent, 42.34 percent and 2.07 percent respectively during the period under review. According to the compilation, India’s coking coal import through the 10 mentioned ports increased to 14.39 mt during the first half of 2012-13 compared with 13.43 mt imported during the corresponding period of 2011-12. Metallurgical coke import more than doubled to 1.26 mt during the period from a low of 0.62 mt in 2011-12 while PCI coal import increased to 0.81 mt from 0.80 mt. Steam coal imports during the first six months of 2012-13 fell to 21.20 mt from 21.91 mt in the same period last year, whereas anthracite coal imports fell to 0.28 mt from 0.49 mt. The import of pet coke, both fuel grade and calcined grade, fell to 0.88 mt from 0.90 mt during the first six months of 2011-12. 


IMME SPECIAL

Indian mining equipment industry

Hop, skip and‌?

Coal Insights Bureau

I

n 2004-05, a sudden upturn in mining activity in India had charmed the global mining equipment industry. There were several footfalls on the Indian shore. The high growth in earthmoving and construction sector, which grew by as much as 33 percent in 2004-05, continued for a while and defied the global economic slowdown starting 2008. The sudden interest gained momentum over the next four years as coal shortage shot up and so did the domestic coal prices. Although the environmental blockades emerged as a dampener, earnest efforts by the government to speed up production by Coal India Ltd (CIL) and from captive blocks further increased the potential. For the equipment industry, the opportunities were knocking on the door‌well, almost. But then there was a sudden jolt! The alleged coal scam (following a report by the

30 Coal Insights, November 2012

Comptroller & Auditor General or CAG) threw into disarray all governmental efforts. The captive blocks were brought under scanner. At the same time, coal prices in the international market softened big time. And the Eurozone crisis went on. At the end of 2012, the mining equipment industry wonders if this is an opportunity overstated or just a limp before that big jump. A dry spell

Globally, the mining industry is suddenly on a low footing. The scenario has changed for worse in a short period. Companies that were optimistic of continued high growth (globally and especially in emerging markets like China and India) even a year ago now find the outlook rather gloomy. The international coal prices have remained subdued in the September quarter and are unlikely to see any major changes until next year. Analysts and industry sources expect

a flat market in 2013. This dull market for mining products has not only hurt the miners, but also affected sentiment in the mining equipment industry. The drop in spot market prices has prompted many mine operators to idle some equipment and high-cost mines. PT United Tractors, the largest distributor of heavy equipment in Indonesia, feared that it might have to take a hit on its quarterly bottomline. Sandvik, the global brand from Sweden, acknowledged the slowdown in mining industry and therefore, in the equipment sector. In the absence of upbeat demand in Europe and US markets, the global demand banks on Chinese and Indian market. But the Chinese market is relatively quiet and this is affecting global miners. In India, the health of the equipment industry can be gauzed from the response of the leasing industry. Srei Paribus, the leading player in mining equipment leasing, finds the


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IMME SPECIAL

market a little too dull over the last one year. “We expected the industry to pick up once the captive blocks start production en masse. There were various stumbling blocks; but we were hoping things to turn better within twothree years. Now it seems the recent (CAG) controversy has derailed the whole process,” a source in the mining leasing sector said. On a macroeconomic perspective, the slowdown of the Indian industrial growth as a whole is also becoming a concern. According to a recent report by CMIE, Indian corporates have shelved projects worth `1.8 trillion during April-August, 2012. This clearly shows that the economy is on steep slide on the back of extreme shortage of investments in major sectors, including mining.

classification, we must either enter into a JV with such players or are left out. According to domestic miners, the equipment providers are sometimes peeved with the Directorate General of Mines Safety (DGMS) that locally inspects equipment that otherwise meet international standards. These vendors allege that DGMS does not have capability to test many advanced technologies that are not available in India. These charges, however, are refuted by DGMS. About land acquisition delays, however, the government itself is in a fuss. According to the CMIE report on deferment or cancellation of industrial projects, the major reason for this trend are the hassles related to land acquisition and statutory clearances. Miners’ woes

Government decisions

The recent slide in mining and mining equipment sector is largely attributed to the government’s indecisions and ambiguous policy. While the environment hurdles continue to despair miners, delays in land acquisition has emerged as a more knotty affair. Also, the lengthy tendering and approval procedures are proving to be a disincentive for the foreign equipment manufacturers and technology providers. In some cases, tendering clauses are preventing these companies from taking part. This is particularly true for both underground mines and washery tenders floated by the stateowned CIL. For instance, in case of washery tenders, the CIL subsidiaries allow only those who either own or operate a washery in the country. But since we do not fit into this

32 Coal Insights, November 2012

Unlike China, which has a large domestic base of mining equipment manufacturing, India still continues to import a wide range of sophisticated equipment. While a number of foreign players such as Volvo, Terex and Belarus based Belaz-Enrika, a global leader in mining dump trucks, have lately entered the Indian market, hardly any of them have planned to start production locally. Among the foreign players, Volvo has set up its manufacturing facility in Bangalore, where it manufactures tippers. All the other equipment are imported from its parent company and marketed in India. Terex also sells most of its range of products through marketing agents in India. Joy Mining, a global leader in longwall mining equipment, has a small operation to manufacture spares and provide sales support in India. Belaz-

Enrika plans to import its entire range of products into the Indian market. “The lack of domestic manufacturing base is a major hurdle for domestic miners,” said an official of a domestic contract miner. “These machines are huge, and they command a substantial lead time before the machine is assembled and shipped. We source most of our products directly from Komatsu and have to wait for around a year after placing the order before we can actually procure new equipment,” he said. The volatile movement in the forex market is another concern for the heavy mining equipment users. Even a marginal increase in dollar vis-à-vis rupee would increase the cost substantially, the official added. The recent weakening of rupee is a case in point. Opportunities beckon

Despite the short-term downturn, the industry however remains hopeful of a bright future. Going forward, the Indian mining equipment industry is likely to maintain a double digit growth, according to industry analysts. Also, there could be significant investment from foreign players if they find volumes to justify their increased presence. “You cannot possibly run the economy without mining. And to maintain a high growth in industry and infrastructure, mining growth is a prerequisite. Hence, notwithstanding the current impasse, the Indian mining sector is bound to see better days ahead,” said an industry source. In the next five years, India’s coal production is expected to increase by around 250-300 mt. This cannot be done without new mining projects and expansion of existing facilities. Around 200 new projects are awaiting various clearances. Also, a significant number of captive blocks are expected to come to the production stage within the Twelfth Five Year Plan period (2012-17). All these imply growing demand for mining equipment in the country. “As new mines open, there will be new orders for equipment. So the long run prospects remain intact,” said the official with the contract miner. Accordingly, the equipment industry which stands at around `10,000 crore may witness a substantial growth over the next five years and reach `15,000 crore by the end of the Twelfth Plan. That will be good news for both the mining sector and the economy as a whole, he added. 


IMME SPECIAL Bulldozers

Hydraulic excavators

These are excavation machines which employ hydraulic pistons to actuate mechanical digging elements. The major manufacturers are Bucyrus, Case CE, Caterpillar, Doosan Infracore, Hitachi, John Deere, JCB, Komatsu, Liebherr, Manitowoc, Mitsubishi, New Holland.

A bulldozer is a crawler equipped with a substantial metal plate (blade) used to push large quantities of soil, sand and rubble during construction work. The major manufacturers are Caterpillar, Komatsu, Case, JCB, Euclid, Liebherr,Terex, John Deere.

Graders

Wheel loaders

A grader is a construction and mining machine with a long blade used to create a flat surface. Typical models have three axles with the engine and cab situated above the rear axles. The major manufacturers are Case, Caterpillar, Komatsu, LiuGong Construction, Mitsubishi.

The wheel loader is self-propelled heavy equipment used for pushing, lifting and loading earth, sand, snow and other heavy material. The major manufacturers are Case, Caterpillar, Chinamax, Doosan, Dresser, Fiat Allis, Ford.

Backhoe loaders

Cranes

A backhoe loader is a heavy equipment vehicle that consists of a tractor fitted with a shovel/ bucket on the front and a small backhoe on the back. The major manufacturers are BEML, Case, Caterpillar, John Deere, Fiat, Ford Motor, Hitachi, Hydrema, Terex, Mahindra.

Dump trucks

A crane is generally equipped with a hoist, wire ropes or chains, and sheaves, that can be used both to lift and lower materials and to move them horizontally. It is mainly used for lifting heavy things and transporting them to other places.

Fork lifts A forklift truck is a powered industrial truck used to lift and transport materials. The forklift has since become an indispensable piece of equipment in manufacturing, mining and warehousing operations. The major manufacturers are Toyota, Mitsubishi, Caterpillar, Komatsu, Nissan, NACCO.

A dump truck is used for transporting loose material such as sand, gravel, or dirt. A typical dump truck is equipped with a hydraulically operated open-box bed hinged at the rear, the front of which can be lifted up to allow the contents to be deposited on the ground behind. The major manufacturers are BelazEnrika, BEML, Kenworth. Doosan Moxy, Hitachi, International, Komatsu, Tata, MAN.

Dozers Draglines Draglines are one of the most commonly used overburden-removal equipment in surface coal mining. A dragline sits on the top of the overburden, digs the overburden material directly in front of it, and disperses the material. The major manufacturers are Bucyrus, P&H Mining, Liebherr, BEML, ESCO .

Off-highway dumpers Off-highway dump trucks are heavy construction equipment and share little resemblance to highway dump trucks. Bigger off-highway dump trucks are used strictly offroad for mining. The major manufacturers are Belaz-Enrika, BEML, Kenworth, Case.

Tippers Tippers are trucks whose contents can be emptied without handling; the front end of the platform can be pneumatically raised so that the load is discharged by gravity. The major manufacturers are Volvo, Payloader, Liebherr, Hyundai, Komatsu, Mercedes Benz.

Shovels Drills A drill motor is a tool fitted with a cutting tool attachment or driving tool attachment, usually a drill bit or driver bit, used for drilling holes in various materials or fastening various materials together with the use of fasteners.

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Dozers are large powerful tractors with a large blade in front which flattens areas of ground. The major manufacturers are Caterpillar, BEML, Hyundai, Case, Komatsu, among others.

A shovel is used for digging, lifting and moving bulk materials such as soil, coal, gravel, snow, sand or ore. Coal shovels typically have a wide, flat blade with steeply turned sides, a flat face and a short D-shaped handle. Three types of shovel are used in mines: stripping shovel, loading (or quarry-mine) shovel, and hydraulic shovel.


IMME SPecial

‘Bulk material handling sector to grow 20% y-o-y’

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Coal Insights Bureau

he Hyderabad-based Bevcon Wayors provides a total concept to commissioning solutions to all material handling applications, and would like to be a one-stop shop for all material handling needs of its clients. The name ‘Bevcon Wayors’ was coined after it was creatively combined with a few letters of ‘Bucket Elevator Conveyor’ in 1990. Formed with the intent of catering to the rising demand for bulk material handling solutions, Bevcon Wayors has come a long way by evolving as an industry leader that offers high-quality, technologically advanced bulk material handling systems. The company’s motto – ‘Engineering – Built to Last’ has been its success mantra for the last 20 years and even today Bevcon is committed to offering the best engineering services to its clients. In India, Bevcon has its presence all over with offices in Hyderabad, New Delhi, Kolkata, Chennai, Pune, Raipur and

Metal Recovery & Slag Processing Plant at JSW Ispat

Bhubaneswar. Group companies Spareng Inc. established in 2003 and Bevcon Zentry formed in 2004 have further strengthened Bevcon’s presence in the bulk material handling industry. Bevcon’s key strength has been its world-class research and development division that offers cutting edge solutions and designs of long-term value. The company manufactures conveyors, crushers, screens, feeders, dust extraction, pneumatic conveying and new generation material handling equipment like sandwich belt conveyors as well as sidewall conveyors and stockyard equipment like stackers and reclaimers etc. The managing director of Bevcon Wayors, Y. Srinivas Reddy, spoke to Coal Insights on the company’s future plans and the bulk material handling sector in general. Excerpts: Which sectors are you catering to currently? Who are your major clients? Do you have any plan to enter any new vertical in future?

Y. Srinivas Reddy, MD, Bevcon Wayors

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As a material handling organisation we are catering to almost all material handling sectors like steel, power, cement, mining, salt, sugar, paper etc. but the core business comes from the power sector as we supply total fuel

/coal handling plants as well as pneumatic conveying of ash handling systems. Our clients include IMFA, TATA, SAIL, Jindal, ITC Bhdrachalam, FACOR, BHEL, Reliance, GVK, OCL, Abhijeet, Prakash Industries, Thermax, L&T, IndBharat, Dalmiya, Adani Wilmar, Ultratech, Jaypee, etc., We already have three verticals in our organisation (Projects – Products and AFD which deals with pneumatic and dust collection systems) and we wish to currently concentrate on strengthening and consolidating them. So we have no plans to enter any new vertical in the near future. What is the demand scenario or such bulk material handling system in India? Demand for bulk material handling in India is very good. The size of the Indian MHE industry is estimated to be around `5,000 crore and is likely to grow at 20 percent yearon-year over the next five years, in keeping with overall economic growth. How much technological upgradation is required in this field? Does your company have any plan to partner with any other company for technology transfer in near future? Technological upgradation is mandatory to


IMME SPecial survive in the present competitive world. We at Bevcon strongly believe that innovation is future, hence we have developed a twolevel strategy to enhance the technological upgradation of the product profile. One is the self-reliance method wherein Bevcon has an in-house engineering research department which develops eight to 10 new material handling products every year. The second method is by collaborating with foreign companies on exchange of technology. As of date we have tied up with Fleximat from Austria for critical screening applications, Friedrich from Germany for unbalanced motors and exciters for our sizers and feeders, Rollier from Spain for fine screening applications, FMK from Poland for stock yard applications and Dos Santos Intl. from USA for sandwich belt conveyors as well as long distance conveyors. What are your views on the development of the mining sector in India in the next five years? The Indian mining sector has a very bright future as the demand-supply gap is very wide and there is ample abundant opportunity to explore the mining sector. How old are your operations in India? What are your India specific plans? Do you have any plan to tap the overseas markets in future? If yes, which countries are you targeting?

Flip Flow Screen.

Bevcon is two decades old and one of the leading material handling equipment manufacturing firms with a pan India presence. We provide concept to commissioning solutions and execute turn key projects for all material handling applications. we have two ISO certified manufacturing units streamlined back end

process through SAP integration, In-house development of it services and software’s for project planning, design, execution and monitoring. Yes we do export our products and have customers at overseas more in specific East Asia and as well as African countries. What are the major roadblocks for the bulk material handling providers in the Indian market? The major roadblock for the Indian material handling sector is government regulations and policies which are not clearly defined and are also non-transparent, leading to chaotic situations in infrastructure growth and uncertain business prospects. How do you compare your offerings with other foreign vendors seeking a pie of the Indian market?

Sandwich Belt Conveyor

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It is very clear that the Indian market is highly competitive and very price sensitive hence for any foreign player it is a difficult proposition to be part of the Indian market. Hence our offerings are fairly competitive, qualitative and more importantly, reliable products and timely service always ensure that we win over foreign players. 


IMME SPECIAL

Hectronic: Helping in fuel management Coal Insights Bureau

W

hen it comes to saving money for your business, you need to be very careful where to cut budgets and to do that one should have clear data of all the costs and processes. In the overall operational costs, fuel is a major expense which needs proper monitoring and control. One of the great ways to save money is to cut down unaccountable fuel costs

by implementing the “Intelligent Fuel Management Solutions”. Control and monitoring on consumption of fuel can be achieved through RFID identification of all the vehicles, accurate measurement of fuel dispensed, monitoring fuel stock in tanks and accurate MIS reports with wireless data polling options from any remote place. Without an effective fuel management in place, the company

Joy Global to showcase its latest offerings at IMME

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oy Global, a worldwide leader in the design, manufacture and field support of equipment for surface and underground mining, would unveil a bouquet of innovative products and systems at the International Mining and Machinery Exhibition (IMME), 2012 to be held in Kolkata on December 5-8, 2012. At Joy Global, P&H and Joy are combining resources to better serve its customers worldwide. With their keen focus

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on operations excellence, Joy Global has over the years demonstrated its singular focus on mining with innovative products and systems along with life cycle services that make mining operations safer and more productive. At IMME 2012, Joy Global would exhibit real examples demonstrating the power of technology that transforms data into valuable knowledge, helping optimise machine and system performances. Joy Global added world-class wheel

will be losing out on a national resource. The solution uses globally proven robust technology of hardware and software which provides great tool for tracking and control on critical refuelling operation. By implementing “Intelligent Fuel Management Solution,” one can achieve total transparency in refuelling operations and can take more responsible decisions. The technology exists in India through the wholly owned subsidiary of Hectronic GmbH, which has been receiving great response from the mining and infrastructure segments. The company’s clientele in India includes industry giants like TATA Steel, JSW, Vedanta, Reliance, Ambuja Cements, SEW, AMR, KMC, AMPL and DP World, to mention a few. 

loaders to its product portfolio during 2011. The company will showcase training shovel simulator which uses a set of controls that mimic the touch and feel of controls applied to actual world class P&H shovels. Indigenously developed components of undercarriage and GET’S would be on display to showcase the high quality and reliability of spares that go into the large fleet of P&H shovels operating in various mines in India. Joy Global will also showcase through continuous videos, presentations and exclusive discussion several more examples of advancing technology that helps mines increase operations efficiency. Amongst others, these include the innovative P&H LeTourneau-Series SR or Switched Reluctance motor technology, new training simulators, etc. In addition to the scaled product models and systems on display, a giant screen monitor will feature Joy Global’s leadership and unparalleled direct service support, and will serve to introduce new surface and underground mining systems – including a first-of-its-kind generation of loading equipment. Also featuring at the booth would be Joy Mining Services who are Joy Global’s associate in providing total underground mining solutions to customers’ need in India. 


Coal Insights, November 2012

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IMME SPECIAL

Sandvik plans 2014 launch of new products

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Coal Insights Bureau

andvik, o n e of the largest mining companies of India, has been in business for the last 150 Subhasis Das, VP (coal years with a business), Sandvik Mining wide range of offering for the mining Industry. The company’s current offering for the Indian underground coal mining sector includes different models of continuous miners, low cost continuous miners, bolter miners, road headers, shuttle cars, self-advancing conveyors, feeder breakers, single, twin and platform bolters, flame-proof LHDs both diesel and electric, shield haulers, trailers,

breaker line supports, mining picks, tools, hammers etc . Sandvik can thus be called a one-stop shop for all equipment and tools required for Bord & Pillar Mining Equipment or very fast Longwall development equipment. In the underground segment, Sandvik is one of the market leaders in products like single and twin drill jumbos, roof bolting units , high capacity loaders and UG trucks up to 60-ton capacities. Its product basket also includes raise borers, UG crushers, conveying systems, tools and consumables. For surface coal and metal mining application, the company has a wide variety of top hammer, rotary & DTH drill machines, gyratory and wide range of crushing, screening and conveying system offerings. In a conversation with Coal Insights, the vice-president (coal business) of Sandvik Mining, Subhasis Das, talks about the

Sandvik to launch ‘Vibrocone™’ Crusher at IMME 2012

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andvik Mining will launch its Vibrocone™ crusher at International Mining and Machinery Exhibition (IMME), 2012 to be held in Kolkata on December 5-8, 2012. The Vibrocone™ crusher is the next generation crushing technology, combining the best of conventional crushing and grinding principles to produce an unprecedented amount of finely crushed product. This innovative product opens the possibility for new eco-efficient comminution alternatives enabling up to 30 percent energy savings in downstream processing.

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An impressive line-up of technologically advanced products will also be exhibited. Sandvik Tunneling Roadheader MT720, designed for economical excavation of rock with robust design and cutting power for low speed cutting, is another highlight at the event. Besides Sandvik Loading and Hauling (LH 621, TH550) equipment and Rock Tools with state-of-the-art performance and cutting edge technology will be showcased. Sandvik Mining is acknowledged globally for providing a wide range of technologically advanced products that contribute significantly to enhancing productivity and efficiency in the sector.

mining equipment industry in general and Sandvik in particular. Excerpts: What is the current scenario of mining equipment industry in India vis-à-vis the global scenario? It is a well-known fact that the mining industry world-wide is not on fast track like so many sectors in India. Iron ore mining is yet to recover fully from the ban imposed due to environment reasons. Although some investment on new equipment is happening in government mining sectors, the slowdown continues in relatively smaller private companies and contractors. There is urgency in ramping up the coal production by another 200 miilion tons at least in the next five years, so significant purchases will have to be made both for surface mining, underground mining, coal beneficiation and conveying equipment. But though there has been some measures taken towards provision of quicker forest and environment clearance, the CAG issue and delay in obtaining mining clearance has not really resulted into any major upsurge in purchasing of equipment by coal companies and MDO contractors, as on date. But it is expected that 2014 will be better for both UG & Surface Coal mining activities and purchases related to it. As India looks at galvanizing the mining sector, there is an imperative need for latest mining technologies and state-of-the-art equipment to increase productivity and operational efficiencies at mines and at the same time a reliable and highly skilled service support network; making hi-end equipment suppliers like Sandvik a preferred choice for customers. Soumitra Banerjee, Vice President, Sandvik Mining, India said, “India is a strategic market and key focus area. We see a lot of traction in underground coal and hard rock segments. Introduction of next generation technology with sophisticated mechanisation and automation can spur fast-paced growth in the Indian mining and coal sector. Our new products Vibrocone Crusher™, 63T truck and bolter miner are aimed towards increasing productivity and mechanisation to the next level.”


IMME SPECIAL Heavier metal projects are doing relatively better and so are equipment purchases related to zinc and uranium mining. The projects awarded in copper have also not seen active purchase owing to pending environment clearances. Uranium might see some slowdown of purchasing in near future owing to consolidation and proper deployment of existing fleet. How much do you expect the mining market to grow in India in the next five years? Coal is projected to grow at a CAGR of 8.9 percent till 2016-17. Here a significant amount of contribution is expected from private coal blocks and enhancing production of four new coalfields. There are issues with land acquisition, rail connectivity and CAG verdict for certain private players which have led to a slow start-up. My personal opinion is that if we can increase by 5 percent on CAGR basis, it would be a significant success. Please give us a brief idea of your clientele in India. Our customers include all government and

private mining majors both in coal and metal mining sectors. What is your current market share in India as well as the global market? How do you foresee your growth in India in the coming years? In certain segments like UG Metal we are one of the market leaders and have significant presence. In other sectors like UG Coal we are relatively new entrants and there is a lot of catching up to do in the next few years. With technology shift occurring on a regular basis in the OEM industry, what measures do you take to upgrade your technology and how frequently? A significantly high percentage of our revenue is spent on automation and product innovation to exceed even the industry standards of tomorrow in terms of safety, productivity and cost efficiency. Sandvik has a presence in over 30 countries and there are several competence centres in US, Europe , Australia and even India where these R&D activities are carried on.

Other than coal in India, which are the mining areas you want to focus on as of now and why? We already have significant presence and equipment market share in zinc, copper, iron, uranium and other metal sector. Most of these machines are backed up by Sandvik Life Cycle after- market services. The metal mining customers are a little more progressive and mechanisation in metal is a bigger and more mature success story than in coal. What are your plans of expanding business in India? Are you planning any new investments? Sandvik Mining has big plans for India and with that there is a substantial investment on the cards. However, there is nothing that I can share at this point. Do you have any new product launch in the pipeline for the Indian market? Yes, there are certain innovative products like Bolter Miners, Rotary Percussive FLP Drills which have been planned to be launched in India in 2014. 

Coal Insights, November 2012

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IMME SPECIAL

Long distance haulage has high growth potential The MD & CEO of Asia Motor Works, Anirudh Bhuwalka, speaks to Coal Insights.

annum and our investments include a 200seat R&D Centre in Mumbai, a fully built vehicle plant at Bhuj and modern cab, paint shop and assembly facilities.

Anirudh Bhuwalka, MD & CEO, AMW

What are the upcoming expansion programmes of the company in terms of manufacturing units, product enhancement and dealership networking? We will expand our manufacturing facilities in Bhuj, Gujarat and have built a comprehensive R&D and product development centre in Mumbai. We currently have 123 dealerships and over 1,500 touch points for service across the country. How do you foresee the growth of the truck manufacturing industry in the next 4-5 years?

What is your assessment on the market size of AMW trucks in India? AMW is present in the heavy commercial vehicles segment of the goods transportation sector, for which the market size is around 200,000 vehicles a year. We believe that with the Government’s thrust on infrastructure, mining, construction etc, this segment has a high potential for growth, especially in the long distance haulage and specialised applications. In a market where large established brands hold the majority of the stakes, hurdles are natural for a new entrant like AMW. Can you tell us about the major challenges that the company faced over a period of time? AMW believed that the industry was ready for a change as operators looked for betterengineered vehicles with better return on investment, greater power, safety and comfort features and of course all this at a cost that gave them a choice. Customers could quickly see the difference in performance of AMW vehicles in the segments that we chose to operate and our tractor-trailers and tippers gained high acceptance. AMW

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was the first with a 49 ton tractor-trailer and we offered Fully Built tippers from our own manufacturing facility, thus exercising control over manufacturing quality. Having motored ahead with forceful growth for many years, the truck industry is visibly slackening the pace before the financial market skids. So as a growing truck manufacturer, how are you preparing yourself to tackle this economic downturn? We believe that the recent steps announced by the government will help in generating demand and as interest rates stabilise, we expect market conditions to get better. Is it only economic downturn that has put the brake on the truck industry? Or are there other, more fundamental factors at work? The long term prospects of the industry are bright but the uncertainty in government policy and high interest rates are a matter of concern. Can you brief us about your investment plans in India? We have a capacity of 50,000 trucks per

We see good potential for growth in the segment that we operate, i.e. Heavy Commercial Vehicles in haulage and other applications. How you are projecting the Indian market with stiff competition ahead? And what are your future plans in introducing new products? We are the fastest growing truck brand in the country and have had significant success in every product that we have launched. In 2011 alone we introduced 11 new truck models in the market and we continue to explore possibilities of tapping new opportunities. Please give us your brief overview on IMME 2012. AMW is the principal sponsor at IMME and we believe that this is a great platform for the mining and allied sectors. We are displaying six vehicles which have been favourites with customers in the mining sector. We are launching our new mining tipper – 2528 Rock Body tipper with 280 HP Engine and a 9 speed gear box. More power will enhance the productivity of the machine which in turn will lead to better returns and profitability to the customer. 


IMME SPECIAL

Asia Motor Works plans expansion Coal Insights Bureau

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sia Motor Works (AMW), India’s third largest manufacturer of heavy commercial vehicles, is planning to expand capacity at its Bhuj (Gujarat) plant, a top company official said. The company has achieved a unique position in India’s transportation sector through innovative engineering and customer orientation. Rolling out its trucks in 2008, AMW has increased its presence in a competitive marketplace through its products and wide service network. AMW is an intrinsic part of the country’s largest infrastructure and construction projects including the Golden Quadrilateral. AMW is also the fastest growing truck brand in India with an annual volume growth

of over 100 percent for the last three years. In addition AMW has a dominant presence in the fast growing Tipper segment. Its vehicles are the preferred choice in the mining, construction and infrastructure sectors, where they operate under very arduous road and load conditions. The company has a widespread and growing dealer and service network across the country. There are 113 dealerships and over 1,500 touch points. This vast distribution network includes sales and service centres, authorized service outlets, mobile vans, workshops and a 24x7 helpline called ‘AMW Seva’. This wide network of dealerships and touch points across the country ensures a rapid response to customer needs.

Wide product range

AMW offers trucks ranging from 16 to 49 tons and has pioneered several segments in the Indian CV market. The AMW 49 ton model created the segment and was India’s largest tractor trailer at launch. In addition, AMW also created the construction and mining segments in the Indian CV market with its range of tippers. AMW won the ‘Truck of the Year’ award from NDTV in January 2008. Additionally, it also got the coveted ‘CV Innovation of the Year 2009-10’ award for its 3123 model. AMW CV Applications was given the ‘Truck Application Builder of the Year 2010’ award for its Tranztar brand of fully built vehicles. State-of-the-art plant

AMW’s fully integrated manufacturing facility in Bhuj, Gujarat, has a planned capacity of 50,000 commercial vehicles per annum. The Bhuj plant currently employs about 1,200 people and uses state-of-theart production processes to build world class trucks for the Indian market. 

Coal Insights, November 2012

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IMME SPECIAL

Rotoauto: Supplying iron ore pelletising discs

Coal Insights Bureau

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otoauto Engineering Solutions Pvt Ltd based at Chennai is a multifaceted heavy engineering enterprise with focus on large rotary process equipment catering to core industries like steel, power, cement, petrochemical, etc. in the steel industry. Its expertise lies in design, manufacture and supply of iron ore pelletising discs (balling discs) and process fans.

Beneficiation technology

and

pelletisation

The iron ore fines generated during the excavation process cannot be directly used in the iron making process. The low grade iron ore fines will have to be beneficiated and then pelletized before being utilised in the blast furnace (or DRI) for making pig iron. Pellets are uniform and between the size-range of 9 to 16 mm, with approximately 65 percent to 68 percent iron concentration. Such uniformly formed pellets with their high

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mechanical and abrasive strength increases sponge iron production by at least 25 percent with the same quantum of fuel. Pelletisation of iron ore can be done either by Straight Grate Technology or by the Grate Kiln Technology. In India, Hematite (Fe2O3) ore is available in abundance compared to Magnetite ore (Fe3O4). Straight Grate technology is widely used with Hematite ore; whereas in the Grate Kiln Technology, the ore preferred is Magnetite. Both the technologies have their advantages and disadvantages. However the Indian iron-ore being predominantly Hematite, the straight Grate Technology is a preferred option. The diagram depicts the general flow of processes in both the technologies and it is evident that irrespective of the choice of technologies, pelletizing discs and Process fans are common vital equipment for proper performance of these plants. Plant technical consultants compute various factors to decide on the number of

Rotoauto has indigenously designed, manufactured and supplied pelletizing discs and Process Fans to some of the major pellet plants in India. Some of its major clients are: ♦♦ Hygrade Pellets Ltd (presently Essar Steel Ltd), Vishakapatnam (capacity 4MTPA) – 7500mm Dia Pelletizing Discs, Qty 7 nos. ♦♦ Jindal Vijayanagar Steel Ltd, Bellary (4 MTPA) – 7620mm Dia Pelletizing Disc, Qty 1 no. ♦♦ BMM Ispat Ltd, Hospet (1.2 MTPA) – 7500mm Dia Pelletizing Discs, Qty 3 nos. ♦♦ JSW Steel Ltd, Bellary (4.2 MTPA) – 7500mm Dia Pelletizing Disc, Qty 1 no. ♦♦ Jindal Steel & Power Limited, Barbil (4MPTA) – 7600mm Pelletizing Discs, Qty 6 nos. ♦♦ Brahmani River Pellets Ltd, Jajpur (4 MTPA) – 7500mm Pelletizing Discs, Qty 6 nos. ♦♦ Essar Construction Ltd, Paradeep (8MTPA) – 7500mm Pelletizing Discs, Qty 10 nos. ♦♦ Orissa Manganese & Minerals Ltd, (Adhunik group), Kandra, Jhamshedpur (1.2 MTPA) -6000mm Pelletizing Disc, Qty 4 nos. ♦♦ BMM Ispat Ltd, Hospet (1.2 MTPA) - 7500mm Pelletizing Discs, Qty 3 nos. ♦♦ JSW Steel Ltd, Bellary (4.2 MTPA) – 7600mm Pelletizing Discs, Qty 6 nos. ♦♦ Stemcor (INDIA) Private Limited (Crest Steel & Power Limited), Chhattisgarh (1.2MTPA) – 7500mm Pelletizing Discs, Qty 2 nos. (current project) ♦♦ Hygrade Pellets Limited (presently Essar Steel Ltd), Vishakapatnam (4 MTPA) –process fans - Qty 5 nos ♦♦ Brahmani Rive Pellets Ltd, Jajpur (4 MTPA) –process fans - Qty 5 nos ♦♦ Orissa Manganese & Minerals Ltd (Adhunik group), Kandra, Jhamshedpur (1.2 MTPA) –process fans 5 nos and spare rotor assemblies 2 nos. ♦♦ BMM Ispat Ltd, Hospet (1.2 MTPA) – process fans - Qty 12 nos. ♦♦ Stemcor (INDIA) Private Limited (Crest Steel & Power Limited), Chhattisgarh (1.2MTPA) – Qty 9 nos. process fans (current project)


IMME SPECIAL pelletizing discs and technical specifications of Process fans. Certain key driving factors are overall plant pellet generation capacity (e.g. 0.6/1.2 mtpa), ore composition and availability, recirculation losses of undersized/ oversized green pellets, plant elevation from Mean Sea Level and Kiln sizing of the pellet plant. The process fans requirements are different for the two different technologies. Generally for the Straight Grate Technology, the major process fans are Hood Exhaust fan, Updraught drying fan, Windbox Exhaust fan, Windbox Recuperation fan and the Cooling Air fan. In Grate Kiln Technology, the major fans are Waste Gas Fan, Air Blowing Dry fan, Annular Cooler Fan, Cooling Air Fan for Kiln Head/Kiln End, Cooling Air Fan for Chute Structure at Kiln End, System Air Fan for Wall Isolation and System Air Fan for Coal Mill. Concept to commissioning

With multiple facilities under its belt, Rotoauto has in-house end-to-end infrastructure to convert steel to finished products. They include a range of heavy precision machines, large fabrication shops,

plate bending and forming machines, heat treatment furnace, dynamic balancing machines etc. Engineers at Rotoauto are trained and evaluated periodically to assure stringent quality standards in manufacturing. Manufacturing stages are seamlessly integrated for verification by third party inspection agencies such as Lloyds Registrar of shipping, Indian Registrar for shipping, SGS, Germanisher Lloyd, Tata Projects Ltd, DNV, Fichtner consultants and National Thermal Power Corporation. Best inventory

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IMME SPECIAL management techniques, efficient production controls and co-ordinated team work ensures that reliable products are consistently delivered in reasonably short time periods. Process fans at Rotoauto are designed with 3D CAD systems. This ensures accurate assembly and fitment of various parts. Prototype fan designs are validated in testducts with computerized data acquisition systems. With complete capability to design Fans in-house, it is possible at Rotoauto to develop and supply a wide range of Axial and Radial fans . Post sales product support is one of the core strengths of Rotoauto. Based on stringent evaluation Rotoauto has over the years developed a strong supply chain that comprises of reputed brands such as Flender, Elecon, Siemens, Timken, ABB, Schneider Electric, etc. Material sourcing is done worldwide based on quality and price competitiveness. This further enhances the quality of the equipment in whole and imparts a multi-pronged approach to technical support during equipment selection, commissioning, trials and maintenance. Further, Rotoauto sources quality raw

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Extension of services

materials such as quenched/tempered steel plates, forgings, etc. from major suppliers such as Thyssen Krupp Steels Germany, SSAB Oxelosund Sweden, Scot Forge USA, Federal steels USA, Corus UK and Wuxi steel China. With Rotoauto’s Indigenous capability to supply pelletizing disc and process fan assemblies; inventory of critical long-lead-time spares; and performance guarantee(s) issued, the client is assured of long term operational gains.

Rotoauto deploys its skilled technical services and infrastructure for providing replacement parts for equipment of Chinese/other origin. A number of components have already been supplied for such pellet plants. While the core competency of Rotoauto is in supplies of plant equipment, the company also liaisons with a number of technical consultants and firms for successful plant deployments. This enables Rotoauto in assisting prospective iron ore pellet producers in choosing technical consultants. Rotoauto Engineering Solutions is an organisation that is on a steady growth track. It is a company that enjoys a market view of being quality suppliers at competitive prices. The core of the company has strong business fundamentals that protect its client’s interests first. It periodically reviews and upgrades its policies and procedures on products and processes for better results. This in turn has resulted in a number of repeat orders over the years from clients. Corporate social responsibility at Rotoauto lends itself to support a number of organisations to benefit childcare and women’s welfare. 


Rohne coal project to cut off link between Palamau, Hazaribagh tiger reserves Coal Insights Bureau

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orest land diversion for the proposed Rohne coal mining project in North Karanpura coalfield in Jharkhand may cut off the link between two major tiger reserves of the country – Palamau and Hazaribagh, a forest survey report has claimed. The coking coal project, taken up by Rohne Coal Company Private Limited, falls under the Hazaribagh West Forest Division (Hazaribagh district) and is located within the commanding area of Central Coalfields Ltd (CCL). As per the preliminary survey, the Rohne coal project would cost a slice of dense forest cover estimated at 778.23 ha. According to the Forest Advisory Committee (FAC) report, coal mining in the

52 Coal Insights, November 2012

demarcated zone would lead to the loss of around 100,000 trees and cause fragmentation of an elephant habitat. Most importantly, it will cut off the only link between the two tiger reserves, thus restricting movement of the animal through the forest corridor. Besides, “the polygon drawn with the coordinates given by the user agency for proposed lease area is not matching with the coal blocks of North Karanpura Coalfield mapped by CMPDIL,” it notes. Subsequent to the report, the government had asked a nature conservation organisation for its observations. Both the FAC report and conservationists recommended revision of the wildlife conservation plan submitted by the project proponent and adoption of delineation of the link between the two reserves from the said coal block.

Source: Google earth

SPECIAL REPORT

Rohne block

The Rohne coal block was allocated to JSW Steel, Bhushan Power & Steel and Jai Balaji Industries Ltd in June 2008. It is estimated to hold coal reserves of around 140 million tons (mt). Subsequent to the allocation, the three allocattees formed a joint venture called Rohne Coal Company Pvt Ltd to explore, develop and produce coal from the captive block. Later, the company applied for the statutory clearances, including forest clearances. The FAC which was to consider the proposal held a meeting on November 28-29 November, 2011 and submitted its observations. The FAC recommended that a sub-committee of the FAC should visit the area and submit its report. The sub-committee may include an ecology expert preferably having knowledge of the area. Accordingly, a sub-committee of the FAC was constituted in January 2012 to undertake a field visit. The committee visited the area in March 2012 and made its observations to the concerned departments of the government. Later on, the environment ministry sent


SPECIAL REPORT

FAC recommendations for Rohne block The Forest sub-committee observed that from the point of view of preservation of wildlife corridor, forest area falling on western side of the brown line drawn in lease polygon should not be considered for diversion. The diversion of remaining area could be considered subject to fulfillment of the following conditions and mitigative measures that need to be undertaken for the long term conservation of wildlife in the area. Some of these conditions pertain to the general landscape of the area and for the proposals for diversion likely to come up for consideration in future: • The exact boundary of wildlife corridor in the landscape between Palamau Tiger Reserve and Hazaribagh WLS should be delineated by using recent satellite imageries and managed through a wildlife management plan. The Wildlife Management Plan prepared by the User Agency accordingly needs revision. • Progressive mining and successive restoration plan must be geo-referenced

independent experts from an environment and conservation organisation who found gaps in the conservations plans submitted by the project proponent. “The Wildlife Conservation Plan submitted by project proponent, does not seem to have been prepared on the basis of real scientific field survey,” they observed. Wildlife issues

The project site falls in Barkagaon range of Hazaribagh West region which has a dense forest cover. Sal is the major crop in the area occupying the top canopy. The subcommittee in its report observed that the project would cause the felling of around 100,000 trees, including 10,000 trees above 60 cm girth and 90,000 trees below 60 cm girth. The tree felling involves about 131 trees per ha including 13 trees above 60cm. The report further pointed out that the area having a number of seasonal streams (which flows into Damodar river) is vulnerable to sheet and gully erosion. The project is also likely to intensify the scarcity

54 Coal Insights, November 2012

• •

and developed in GIS domain. The restored area should be immediately returned to the forest department. Explosives should not be stored near the forest area of corridor. During night time; use of heavy earth movers, machinery and drilling operation should be avoided to minimise ground vibration. To minimize glare to open sky in night, proper lighting system should be used. W hile removing the overburden, the top soil should be removed and stored in such a way that it should preserve germplasm of local species and while reclamation the same should be used. As per the mining plan, the user agency is supposed to start mining from eastern most portion of the lease boundary and reclaim the same first. The reclamation of mined land should be planned in such a way so that the reclaimed area could be developed as an alternate wildlife corridor.

of water facing the area. From the point of view of forests, the sub-committee felt that diversion of forest land for the said coal block could be considered subject to strict safeguards. As for wildlife, the conservationists noted that the area is visited by elephants. It is known as a rich wildlife habitat. The site inspection report notes that the project may lead to fragmentation of the elephant habitat. “There is a need to study the impact of the proposed project on forest connectivity in this area and prevent fragmentation of the elephant habitat,” the report says. Other fauna found in the area include chital, sambhar, barking dear, hyena, jackal etc. There is also occasional occupancy of leopard and tiger. However, the project report prepared seems to have omitted mention of most of these species. “The Wildlife Conservation Plan submitted by project proponent, does not seem to have been prepared on the basis of real scientific field survey. As per the list of fauna given in conservation plan, only

• A Social Impact Assessment should be undertaken by a reputed independent agency, viz. Xavier Institute of Social Sciences, Ranchi to evaluate the full extent of villagers’ forest and land dependence and to plan for an equivalent or superior livelihood package for individual family members. • Effective monitoring of R&R implementation is likely to be a challenge. An independent agency should be appointed for a period of at least three years. The agency should report directly to the District Collector twice a year. The Stage II clearance should be conditional upon the adoption of a revised R&R plan with enhanced compensation and effective monitoring along the lines suggested above. agency should aim to promote greater awareness among the affected population so that they can monitor R&R implementation themselves.

jackal is shown to be found in the area as an important mammal; whereas the wildlife conservation plan speaks about development of habitat for Chital and Sambhar etc,” the report observes. However, as already mentioned, the biggest concern for environmentalists about the project’s impact is the delinking of two tiger reserves. “The forests which are in the western portion of the proposed coal block is the only connecting link between a large intact patch of the Barkagaon RF (approx 150 km2) in western side and the Rautpara & Jorakath RF in northern side. The distribution of forest cover between Barakgaon RF and Rautpara & Jorakath RF satisfy the definition of term ‘a wildlife corridor’. A bird’s eye view suggests that the corridor is further linking Palamau Tiger Reserve to Hazaribagh Wildlife Sanctuary (WLS). Therefore, while granting the clearance for diversion of forest area falling within the proposed coal block, special attention would


SPECIAL REPORT

Source: Google earth

be required to preserve the said corridor at any cost,” the report says. Tiger presence was reported in Hazaribagh WLS in 2006, which is at an aerial distance of about 40 km from the proposed coal block. Tiger’s presence in Hazaribagh WLS is an indicator of possible movement between Palamau Tiger Reserve and Hazaribagh WLS.

Greenpeace seeks moratorium on mining in forests Amid continuing debate over coal versus environment, Greenpeace has sought a moratorium on exploration and development of new coal mines in India’s forest areas. The non-governmental environment body has also demanded that the Indian government take a re-look at its huge expansion of coal mining in the forests. The demand was raised at the Eleventh Conference of the Parties to the UN Convention on Biological Diversity held in Hyderabad last month. Noting that the government’s present policy of massive expansion in coal mining is causing severe damage to the environment, including the habitat for the endangered Indian tiger, the green brigade said it is also forcing tens of thousands of people to leave their homes. In fact, a Greenpeace study shows that 13 coalfields in the central Indian landscape alone will destroy more than 1.1 million hectares of pristine woodland. Consequently, over 14,000 tribal people in one region alone will lose their homes and livelihoods. Commenting on the issue, Samit Aich, Executive Director, Greenpeace India, said, “India’s mad dash to mine coal is destroying the precious biological assets. Instead of showing leadership as the host of this prestigious conference, the government is leading the way on the destruction of tens of thousands of hectares of forest.”

56 Coal Insights, November 2012

R&R issues

Along with forest and wildlife issues, the project is also facing Rehabilitation and Resettlement (R&R) issues, according to the fact-sheet. There are two hamlets in the proposed area, namely Indratola (village Barwania) and Chirwan (village Pasaria). Indratola has 64 project-affected families (62 ST, 2 SC) and Chirwan has 45 project-affected families (all ST). Since the user agency has not conducted a comprehensive Social Impact Assessment of the project, it was difficult to accurately assess the extent of villagers’ dependence on the forest, and the likely impact of forest diversion on their livelihoods and welfare, the report points out. In order to address these lacunae, the FAC sub-committee visited Indratola and spoke to assembled villagers. This preliminary investigation raised several concerns. The proposed project seeks to acquire all the agricultural and homestead land of Indratola and will also curtail the villagers’ forest rights and access. It was decided that privately owned land would be purchased at the rate of `5 lakh per acre. The main feature of the user agency’s R&R plan is the provision of one job in the project for each family. In addition, each displaced family will get a house plot and resettlement grant. There are provisions for drinking water and schools etc. As part of its Corporate Social Responsibility (CSR) activities, the user agency promises to impart vocational training to men and women. This R&R

package is in accordance with the Jharkhand state policy. However, it compares unfavourably with the R&R package offered by NTPC in nearby projects, causing considerable resentment among villagers. In addition, villagers are understandably agitated about their comprehensive loss of land-based livelihoods which no R&R policy compensates for at present. “The chief concern of the villagers in Indratola was that the majority of workers in the villagers will get no compensation at all,” the report says, adding, “They stated that the provision of one job per family does not compensate other male members of the family for their loss of livelihood. Women will be rendered unemployed. Landless families will not be given jobs. In addition, there will be no substitute or compensation for the loss of forest rights. In short, the project will permanently take away villagers’ land-based livelihoods and make their lives much more impoverished and insecure.” Their status as forest-dependent communities makes it incumbent upon the FAC to proactively address these issues. Given the large size of the project and likely economic returns to the user agency on the one hand, and the small number of affected families (even if that number is doubled or tripled to include all eligible males) on the other, the user agency has ample resources for establishing ‘best practices’ in R&R in the region, upholding villagers’ rights and ensuring that their socio-economic status is improved. 


technology

Pneuflot Flotation technology: An improved process for mineral beneficiation ®

Coal Insights Bureau

A

s the rich ore bodies are depleted, mineral industries need to go for finer sizes for sellable products. In such a scenario, Flotation is state-of-theart processing method for many minerals. Among Flotation technology, Pneumatic Flotation is considered the most improved version which gives better recovery. Many Pneumatic Flotation plants are installed world over in the coal and mineral industry. With this technology, coking coal and steam coal can be beneficiated in a very economic and efficient way. In India, the first Pneumatic Flotation plant came up in a private coal washery in Gujarat in 2006 for beneficiating Australian coking coal. Earlier, the conventional (Agitators) technology was replaced by

Columns Flotation before Pneumatic Flotation was introduced in this market by Humboldt Wedag Coal & Minerals Technology GmbH (currently MBE Coal & Mineral Technology GmbH). The Cologne based coal and mineral beneficiation company developed and marketed its PNEUFLOT® Flotation technology, an improved process for mineral beneficiation. The same company had earlier developed and introduced to the industry the first under pulsated jig, more popularly known by their patented name Batac Jig. Later on, the company brought the swing bed jig patented as ROM Jig to the Indian market which is today widely acknowledged as dependable, proven and state-of-the-art technology. Currently, there are two plants in India having four Pneumatic Flotation machines which were set up for a private coke maker.

However, as the beneficiation industry realises the benefits of Pneumatic Flotation over conventional methods of beneficiation, this technology is likely to gain popularity in the coal and mineral industry. Pneuflot® Flotation technology

The froth Flotation process is used to separate coal and mineral mixtures with particles showing different physico-chemical surface properties towards water. These properties are either natural or can be produced and even enhanced by treatment with surface active reagents. Basically, the Flotation process itself takes place when mineral particles attach to air bubbles and rise up. Since the beginning of the 20th century froth Flotation has become a widely used beneficiation method for mineral processing and the most important separation process for the majority of nonferrous metal ores and many industrial minerals. Flotation is carried out in Flotation machines. In these Flotation cells the mixture of fine milled ore and water, called Flotation pulp, is agitated and air is drawn into the pulp in the form of fine bubbles. Mechanical Flotation machines are divided into agitation cells which receive air from blower or “self-aerating” machines which use the depression created by the impeller to induce air. Both types are characterised by a mechanically driven highspeed impeller which agitates the pulp and disperses fine air bubbles into it. Pneumatic cells have no impeller and the pulp is “self-aerated” by creating a vacuum using the Venturi principle. Flotation reagents are surface-active agents which selectively adhere to particle surfaces. They can intensify water-repelling (hydrophobic) properties or even reverse these properties, making the particles water-attracting (hydrophilic). The former are known as “collectors”, the latter type reagents are called “depressors”. In addition, to influence selective adsorption, so-called “activators”, pH-adjusters and reagents with a dispersing effect are frequently used. Tensides influence froth formation. When particles with a water-repelling surface come into contact with air bubbles inside the Flotation cell, they immediately attach themselves to the air bubbles and rise up to the pulp surface forming a froth layer. Once the froth has built

Coal Insights, November 2012

57


technology up it overflows and will be discharged from the top of the cell. The hydrophilic wetted particles are discharged in the underflow at the bottom of the cell. To guarantee an efficient Flotation process obviously there is an upper limit for the maximum particle size. Most ores and minerals must be previously milled to achieve the required grain size, which is dictated by the intergrowth of the different components. Nowadays the Flotation process is also used for solid-liquid separation. Especially in the field of waste water treatment, slow settling or suspended particles are collected by means of air bubbles and thickened in the froth phase. History of Pneumatic® Flotation

In the first systems air entered through porous bottoms, cylinders or through nozzle pipes. This air served both for aeration as well as stabilisation of the pulp. In terms of application technology the most important types of this first generation of Pneumatic Flotation cells were: ♦♦ the Callow cell developed in 1914 ♦♦ the McIntosh cell developed after 1925 ♦♦ the South-Western cell ♦♦ the wish frother ♦♦ the cyclone Flotation 1949 ♦♦ the column cells ♦♦ the Bahr cell 1980 ♦♦ Pneuflot® tangential type 1987 ♦♦ Pneuflot® new generation

Available machine sizes Diameter (m)

Throughput (ft)

(m3/h)

(m3)

Footprint (cu ft)

l × w (mm)

0.8

2.6

8–12

26–53

0.5

18

1,000 x 1,000

1.2

4.0

15–30

53-130

1.5

55

2,000 x 2,000

1.8

6.0

30-70

130-300

3

110

2,500 x 2,500

2.5

8.0

70-150

300-650

6

220

3,000 x 3,000

3.0

10.0

150-300

650-1300

12

430

4,000 x 4,000

4.0

13.0

300-600

1300-2400

25

900

5,000 x 5,000

5.0

16.0

600-1000

2600-4400

53

1,900

6,000 x 6,000

6.0

19.7

1000-1400

4400-6200

80

2,800

7,000 x 7,000

After the 1980s Bahr cell was developed at the Technical University of ClausthalZellerfeld in Germany by Prof. Bahr. He was the inventor of a new exceptional technology which was patented and built for the first time in industrial scale from EKOF in Bochum, Germany. This technology was transferred and improved in the 1990s by the company KHD (Klöckner Humboldt Deutz AG). Since 2006 Humboldt Wedag Coal & Minerals Technology GmbH and since 2009 MBE Coal & Minerals Technology GmbH is manufacturing and developing PNEUFLOT® Pneumatic Flotation machines. Pneuflot® has shown its efficiency in many mines around the world. After successful comparison studies and applications Pneuflot® has replaced its place from alternative to state of art nowadays. Briefly the energy consumption, the space

Automatic Recirculation

LICA: Level Indication Control Alarm;  DICA: Density Indication Control Alarm;  FICA: Flow Indication Control Alarm; SIC: Speed Indication Control;  Pi: Pressure Indication

58 Coal Insights, November 2012

Cell volume (gal/min)

and manpower requirements are considerably reduced by the application of Pneuflot® cells. Principle and applications

Flotation with Pneuflot® The Flotation pulp is first directed to a single aerating unit arranged in the vertical pipe above the Flotation cell. The aerator (selfaerated) is installed in the vertical feed pipe. Following aeration, the pulp flows through the central pipe to the slurry distributor ring located at the bottom of the cell where it is vertically deflected upward through high wear-resistant ceramic nozzles. The air bubbles covered with hydrophobic particles ascend to the upper cell area and form a froth layer on the surface which flows off into a froth launder surrounding the cell like a ring. Particles not clinging to air bubbles are discharged with the pulp from the bottom most point of the cell. The pulp level is kept constant either by a level probe which actuates a valve controlling the discharge or by a device known as a “gooseneck discharge”. The kinetic energy required for adhesion at the bubble/particle interface is generated by the turbulent flow of the pulp in the aerator unlike any other technology which takes place in the vessel. The necessary flow rate and pressure are delivered by the appropriate slurry feed pump. The pulp distributor injects the aerated pulp in an upward motion into the Flotation vessel. The cell is only responsible for separating the remaining pulp from the froth formed by the loaded bubbles. Pneuflot® is applicable for every Flotation process where conventional Flotation cells are considered such as: ♦♦ coal (coking coal and steam coal) ♦♦ sulfide non-ferrous metal ores such as copper ore, lead/zinc ore, nickel ore


technology ♦♦ oxide ores ♦♦ industrial minerals such as phosphate, magnesite, fluorspar, quartz, limestone ♦♦ salt minerals ♦♦ paper and plastic waste recycling ♦♦ disposal of fly ash and gypsum from flue gas desulphurisation Self-aerating units which do not require compressed air have been developed for the Pneuflot® technology. The slurry is pressed through small wear-proof ceramic nozzles distributed in circles pointing to a large Venturi and thus creating a vacuum when the pulp is pumped through it. This effect pulls air into the pulp. The circular arrangement of the nozzles distributes the pulp flow creating the necessary turbulence for intensive air bubble/ mineral particle contact. These aerators are offered in various sizes to suit different pulp flow rates and different mineral throughputs. Therefore only one aerator unit per Flotation cell is needed to achieve high performance.

1. The level of the feed tank will be controlled by recirculation underflow slurry of the Pneuflot® cell. A constant feed pressure of 2.2–2.8 bar to the Pneuflot® will be required while running the machine. 2. The reagent dosing will be controlled by a flow meter and a density device in the feed pipe to the aerator. According to a given set point the frequency converter of the dosing pump will be controlled. 3. The feed pressure to the Pneuflot® is controlled by the speed of the centrifugal feed pump in case of using a frequency converter. In this case the air bubble size can be influenced. Higher slurry velocity leads to smaller air bubbles in the aerator. 4. In case of coal Flotation the drain valve underneath the Pneuflot® is closed all the time. In case of ore minerals Flotation the drain valve has to be opened to a given set point to avoid blockage due to sedimentation of coarse particles.

Pneuflot® automation

Pneuflot® Sizes and facts

With a very few control loops a high-efficient process is realised:

For the process: ♦♦ better recovery and more yield because of

Advantages of Pneuflot® Capital cost Maintenance Selectivity Flotation time Compressed air Wear parts Footprint Power consumption Reagent consumption Flotation stages Turbulence

♦♦ ♦♦ ♦♦ ♦♦

Columns High Low high long yes Few small High

Pneuflot® low Low High Short No Less Smaller Low

Agitators high very high low long no much big high

lower

Lower

high

More No

Few No

more yes

optimal particle and bubble contact higher selectivity with optimal control of air no re-sliming because of less shear force air bubble size can be influenced small air bubbles for fine material or bigger air bubbles for coarse feed material can be produced with the same aerator design 

Reference: MBE Coal & Mineral Technology GmbH, Pneuflot® Flotation System

Coal Insights, November 2012

59


EXPERT SPEAK

Coal India needs to be more proactive J.P. Panda

C

oal India’s production has been stagnating over the past three years and needless to say, that is a cause for concern for the country. The company has cash reserves of ` 65,000 crore, and has on its shoulder the huge burden of meeting India’s coal needs. Of course, Coal India, from time to time, has given reasons for its production shortfall and some of the primary reasons are the following: • Coal India does not have new coal blocks; • It does not get forestry, environmental clearances; • It is not able to acquire land; • It cannot increase production from existing mines because of lack of basic infrastructure like rail, road; • Heavy rains affect coal production in monsoon months. To my mind, it is time CIL must introspect and analyse whether it has, on its part, done enough to tackle or mitigate the problems. In this article, we will take a look at each problem. Coal blocks

A very recent report of one of the top economic dailies of India said: “CIL didn’t have too many new explored blocks where mining could start. We only have expansion and extension projects left,says CIL chairman S. Narsing Rao.” The question that comes automatically to mind is who stopped CIL from exploring. Why does it not engage more drilling rigs or more contractors? When Coal India is prospecting for coal in Mozambique, why it can’t do so in India?

60 Coal Insights, November 2012

When CIL blocks and non CIL blocks were demarcated, CIL was a party to the decision. Indeed CIL abdicated its responsibility when it allowed prime and prospected blocks to be handed over for a pittance of `2-5 crore (cost of geological report) to private captive power owners. Environment clearances

The same report says: “CIL has readied about 70 projects, which are waiting for various clearances. Environment and pollution clearances, and land acquisition have been acting against increased production,” says R. Mohandas, director personnel at CIL”. Indeed the above are problems, which have been created in this country to retard it growth. When the government allots a block, environment clearances should come along with the letter of allocation. What is the purpose of having a coal ministry if it cannot solve the problems of Coal India and coal companies regarding clearances? Assuming this has not been done, has CIL taken adequate steps for fast tracking these clearances. Coal India is probably one of the public sector undertakings which has subsidiaries with ISO certification for Environment. Even these companies do not get environment clearances. But if you go deep into each case you

might find that most applications are inadequately filled up. Many environmental problems which already existed have not been tackled. This means that the biggest coal company must not only adhere to environmental mitigation measures but also have a strong cell for internal monitoring. Most Coal India areas do not have adequate environment management teams to monitor the environment, and indeed in many places the mitigation steps are only half-hearted. Land acquisition

Land acquisition does seem to be a rather contentious issue in the whole country and it seems there is a lot of confusion around it. Neither is the land acquisition law being amended nor is the present law being enforced. Coal India seems to be the most confused in this respect. But if it has to understand the problem, it has to understand that the core issue of land losers in Coal India is employment. Coal India, which is producing about 435 million tons (mt) of coal, has a manpower of nearly `3.5 to 4 lakh. If it has to increase its production to the level of say 1,500 mt by 2025-26, the requirement of skilled and unskilled manpower, assuming that higher technology will be involved, will be around nearly 2.5-3 times i.e. nearly 1 to 1.2 million. Where will this manpower come


Expert Speak from? Obviously, it has to come from the only source i.e. the land losers. Each skilled workman requires training for 4-5 years. Why not train the potential land losers in a big way for the future projects? Employment generation will be a burning need for Coal India in the coming years as it embarks on its high production growth path. The present level of skill development in the country is vastly inadequate to meet the total GDP growth of this country. Therefore the only option is to train and develop the land losers. The money will come from the Corporate Social Responsibility (CSR) fund. As per CIL policy, Coal India with a profit of nearly `15,000 crore per annum, has to spend 5 percent for corporate social responsibility (CSR). Therefore the amount works out to be `750 crore per annum, which is more than adequate for skill development Under CSR, there are numerous heads like education, water supply including drinking water, health care, environment, social empowerment, skill development & employment generation, infrastructure and sports and culture. Out of the above the most important point or the core issue is skill development and employment generation. But unless the core issue of employment is addressed, the money spent on all other CSR activities will be taken for granted by the villagers/landlosers and the company will not be able to even enter new mine premises in spite of a good CSR policy and activity. In this scenario, the only solution perhaps is to recruit mostly from the land losers by training them. If an honest effort is made, most of the eligible land losers, once trained can be employed as the requirement is huge.

500 450 400 350 300 250 200 150 100

Lack of infrastructure

The Coal India chairman was recently quoted as saying regarding North Karanpura: “It can produce 50 mt a year. All approvals are in place, but the 93 km rail line we need is not.” It is the same story at Ib Valley and MandRaigarh. Rao says CIL has told the Railways it is willing to fund the `7,500 crore needed for the rail. “Even then, they (Railways) are not going ahead,” he says. The following questions come to mind: • W hy is Coal India not forming a JV with IRCON or a similar organisation for constructing its own railway line instead of depending on the Indian Railways? • W hy is Coal India not forming an independent Infrastructure company to take up such jobs? • Coal India gives huge business to the Railways. Has it or the ministry of coal taken it up with the government? • W hy is Coal India not considering pipeline transport of coal? It is cheaper and much less cumbersome. • Indeed the solution is that CIL must help itself. It should form its own infrastructure company and go ahead with its own programme irrespective of the Railways.

50 0 2008-09

2009-10 Target

2010-11

Monsoons

A company of the size and stature of Coal India cannot blame the monsoons for loss of production every year. The fact is that there is no monsoon preparation plan or any proactive step taken by the company to see that production loss is minimum during the monsoon. The director technical of each subsidiary company should indeed Consistent shortfall in CIL’s production review monsoon preparation versus target (in mt) of each opencast project. Surprisingly except for a few mines, most of the opencast mines of Coal India which faces monsoon every year does not prepare a monsoon preparation plan and much less implement it. 2007-08

2011-12*

Production

*The original target for 2011-12 was 520.5 mt which was later revised to 447 mt.

The following are a few suggestions: • It is surprising that Coal India, which produces nearly 400 mt of opencast coal, does not

provide sufficient budget for haul road construction. Assuming a good haul road costs `2 crore per km, this is hardly 20 km per year. It is a pity that such an important aspect of opencast mining is totally neglected. Coal India should fabricate large size concrete road slabs (similar to the ones fabricated in workshop and laid on the pillars of large fly-overs) and lay them by large size cranes over a thick sand bed prepared in advance on the haul roads just before the monsoon or even during the monsoon so that disruption due to slushy conditions during monsoon period is minimum. Standardize haul road construction standards. The best way would be to go for prefabricated concrete road sections and install them before and during monsoon. For every large opencast mine, yet another failure of Coal India is that it does not keep any provision for men and machinery for haul road construction and maintenance. Every opencast project should have a haul road organisation, which is independent of production organisation. Its equipment under no circumstances should be diverted for production. Prepare haul road plan and drainage plan with width gradient etc. and do not change the plan frequently unless urgently required. All pre monsoon work like drains and culverts and stacking of stone aggregates and murrum at strategic places all along the haul roads has to be completed before onset of monsoon in the month of May itself. The director of the company should review monsoon preparedness of each individual project.  The author is managing director of Priya Mining Consultancy and Services Ltd, which provides consultancy on both underground and opencast coal mines, including EMP-EIA, forest clearance etc. The company has also produced CDs on a wide variety of subjects including all DGMS circulars from 1957 till December 2010, a history of disasters in coal mines for the last 100 years and safety and productivity improvement in both opencast and underground mining. He is presently senior advisor at the Rampia Coal Mine project of Rampia Coal Mines and Energy Pvt Ltd. The author can be contacted at jppanda2003@yahoo.com

Note: The views expressed here are those of the author and not of Coal Insights. The publication does not take any responsibility for the article in part or in full.

Coal Insights, November 2012

61


Corporate

Tata Power acquires 26% stake in BSSR mines

Coal Insights Bureau

T

ata Power, India’s largest integrated private sector power company, has announced that it has acquired 26 percent stake in PT Baramulti Suksessarana Tbk (BSSR), Indonesia. The Indian utility picked up the stake through its 100 percent subsidiary Khopoli Investments Limited (Khopoli), according to a statement issued by the company. PT Antang Gunung Meratus (AGM), a 100 percent subsidiary of BSSR, and BSSR together own approximately 1 billion tons of coal resources in south and east Kalimantan in Indonesia. With this recent acquisition, Tata Power has now become a 26 percent shareholder in BSSR. Earlier, the company had signed a long term coal supply agreement with AGM, the release added. “We recognise that fuel security is the key to supporting Tata Power’s growth agenda. Thus, besides entering into coal off-take agreement, we have acquired 26 percent stake in this coal mine too as its reserves and outlook is very promising,” said Anil Sardana, managing director of Tata Power. “This acquisition would aim to support our power generation projects in select geographies, to be developed over next few years,” he added. Tata Power’s existing Indonesia presence includes 30 percent equity stake in PT Kaltim Prima Coal and PT Arutmin Indonesia. As part of the purchase, Tata Power has

62 Coal Insights, November 2012

signed an off-take agreement which entitles it to purchase about 10 million tons of coal per annum. Additionally, a consortium comprising of Tata Power, Origin Energy and PT Supraco is developing a geothermal project in Indonesia with approximately 240 MW of generation capacity. India faces an acute shortage of coal supply which has forced many local power companies to go overseas for tying up fuel supply. India, one of the biggest importers of Indonesian coal, currently runs around 9,000 MW of capacity on coal from the country, and has another 10,000 MW under execution. Environment-friendly solutions

In line with its continued efforts to provide environment-friendly solutions, Tata Power has initiated the use of solar panels for street lights and switch yard areas at their Haldia plant under the Greenolution campaign. This innovative idea has been taken forward by the Haldia team of Tata Power. Around 10 conventional street lights have been replaced by solar street lights to save the auxiliary power of the plant. Earlier, the plant was using 220 V, 150 W HPSV lamps at the sites which have now been replaced by solar lights, thus saving around 7,300 KWH of power on a yearly basis. Similar lights have also been installed in the switch yard areas, so that illumination will be available during blackout or emergencies.

Cyrus Mistry appointed Tata Power chief Cyrus P. Mistry has taken over as the chairman of Tata Power as incumbent Ratan Tata has stepped down from his post. Tata would continue to be on the board of the power utility until his retirement in December 2012, the company said in a release. Mistry, who was appointed deputy chairman of Tata Sons in November 2011, was inducted in the board of Tata Power on December 23, 2011. He also served on the board of Tata Power earlier for 10 years from 1996 to 2006. He is slated to succeed Ratan Tata as the chairman of the Tata Group next year.

Speaking on this initiative, Abhijit Ain Das, station manager, Haldia power plant, said, “The Haldia team has put in all efforts to ensure that the Greenolution initiative leads the way for the sustainability movement at Tata Power. We are delighted to see the results of the solar street lights and will continue to introduce such innovative initiatives for the betterment of the society.” 


Corporate

CIL posts 19% jump in Q2 net profit Coal Insights Bureau

C

oal India Ltd (CIL), the world's largest coal producer, has reported a 19 percent jump in its net profit to `3,078.08 crore in the second quarter (JulySeptember) of the current fiscal (FY13), compared to `2,593.11 crore in the same period of FY12. The coal major reported net sales of `14,572.54 crore in the quarter under review as against `13,148 crore in the year-ago period. Interest income during the second quarter rose to `2,092.85 crore against `1,786 crore in the year-ago period. The production witnessed a jump of 11 percent to 89.09 million tons (mt) during the quarter. "Higher volumes, slightly higher realization in prices and higher receipt from

interest income contributed to the rise in net profit," said S Narsing Rao, CMD, CIL. He said coal offtake was 8 percent higher at 101.59 mt in the quarter under review. "I am confident to maintain this in the coming quarters and we should touch the 470 mt target at the end of this fiscal," he added. On the other hand, e-auction prices dropped by `153 per ton to `2,282 per ton, as against `2,435 per ton during 2011-12. "This quarter saw an impact of the National Coal Wage Agreement (NCWA) and also a decrease in e-auction prices. This happened due to the softening of international prices, as e-auction customers like cement firms have opted for international coal," added Rao. “For the half-year ended September 30,

Performance highlights Q2 (Q2) JulSept 2012

(Q2) JulSept 2011

Growth %

Production

89.09 mt

80.30 mt

10.9

Coal Off-take

101.59 mt

94.02 mt

8.1

Coal Supplies to Power Utilities

75.09 mt

66.39 mt

13.1

Coal Supply to NTPC TPPs

29.24 mt

23.88 mt

22.5

Facet

Average Loading of Rakes/Day

162.6 144.5 Rakes/day Rakes/day

12.5

2012, CIL posted a 12 percent rise in net profit to `7,547 crore. Net sales grew by 12 per cent to `31,073 crore. Coal India is world's largest coal producer with reserves of more 250 billion tons. The company's sale has doubled in the last five years and its net profit has become more than two and half times. Despite providing coal to the Indian utilities at a significantly lower price as compared to imported coal, the company still enjoys an operating margin of 25 percent. 

Coal Insights, November 2012

63


Corporate

India misses October power generation target Coal Insights Bureau

I

ndia’s power generation in October increased to 78,244.04 million units (MU), up from 73,077.91 MU generated in September, according to provisional statistics of the Central Electricity Authority (CEA). The generation in October, however, was significantly lower than the target of 80,848 MU, the data revealed. Power generation in October 2011 or the corresponding month of previous financial year was 74,370.29 MU. The target for power generation in October 2011 was 72,905.58 MU, which means year-on-year generation was up. The country’s power generation during the first seven months (April-October) of 2012-13 stood at 533,979 MU, up 0.15% compared with the target of 533,182 MU for the period and up 4.88% compared with 509,143.10 MU generated during the corresponding period of 2011-12. Of the total generation in October 2012, 65,804.26 MU (59,142.19 MU in October 2011) was from thermal sector, 2,729.25 MU (2,714.63 MU) from nuclear sector, 9,173.45

MU (11,893.19 MU) from hydro sector and Bhutan imports was 537.08 MU (620.28 MU). The actual generation was lower than the target of 66,033 MU for thermal sector, 3,332 MU for nuclear sector and 10,822 MU for hydro sector. It was also lower from 661 MU set for Bhutan import. However, of the total generation in September 2012, 54,986.55 MU was from thermal sector, 2,657.92 MU from nuclear sector, 14,504.64 MU from Hydro sector and Bhutan imports was at 928.80 MU. Capacity addition

A total of 1,400 MW of power generation capacity was added in India during the month of October 2012 taking the total installed generation of the country to 209,276.04 MW, a provisional data prepared by the Central Electricity Authority (CEA) revealed. The capacity addition in September was 870 MW. With this total Categorywise energy generation in October power generation 2012 (in %) capacity added during 1% 12% the first seven months of 2012-13 (AprilOctober) stood at 8,976 3% MW, as per CEA’s revised data. During October, the entire capacity of 1,400 MW was added in the thermal sector while the target for the sector 84% stood at nil. However, for the hydro sector Thermal Nuclear Hydro Bhutan Import although the target stood at 92 MW but no Source: Central Electricity Authority

64 Coal Insights, November 2012

Mahagenco scraps high CV coal tender The Maharashtra State Power Generation Company Ltd (Mahagenco) has decided not to place order for high calorific coal against its tender floated sometime in August, an industry source said. “The company has already placed orders for low CV coal, but has decided not to place order for high CV coal because of high price quoted by suppliers,” the source claimed. “The company might go for retendering of high CV material after a decision to this respect is taken by its board of directors,” the source added. On September 28, ICMW, the high-end coal report, had reported that Mahagenco, which had floated a tender for procurement of 3.673 million tons (mt) of imported steam coal of 6,300 Kcal/kg (ADB) and 4,600 Kcal/kg (GAR) types, may not place the order. Incidentally, Mahagenco had received bids from four leading suppliers. This imported steam coal was to be procured by Mahagenco for its Nasik, Bhusawal, Khaparkheda, Chandrapur, Koradi and Parli Thermal Power Stations and the last date for submission of bids was scheduled on September 20, 2012.


Corporate capacity was added. In case of nuclear sector, both target and achievement stood at nil. Out of the total capacity added during the month, 800 MW was added by Coastal Gujarat Power Limited in Gujarat while the remaining 600 MW was added at Mettur Extension TPP in Tamil Nadu. Months

2012-13

2011-12

April

1,760

735

May

1,070#

550

June

2,376

2,224

July

950

1,660

August

550

1,200

In September, the entire capacity addition of 870 MW was also in the thermal power sector. The capacity addition during the first seven months of 2012-13 and full financial year 201112 is 8,976 MW and 18,814.5 MW respectively. Critical coal stock

All India PLF factor - October 2012 (in %)

80 78 76 74 72 70 68 66 64 62 60

Central

State Sector

Pvt. Utl.

All India

Sector Inadequate coal September 870 786.5 supplies by domestic Program Achievement October 1,400 345 coal companies and November 2,807 lower imports by Source: Central Electricity Authority December 1,158 power utilities have January 895 led to critical coal stock position at a produce, for the country for the month of February 972 number of Indian power plants. October 2012 stood at 70.9 percent against According to data available with Coal the planned 69.83 percent. The PLF was March 5,482* Insights, a total of 48 plants of the total 89 61.58 percent, 61.47 percent, 66.84 percent Total (Apr-Sept) 8,976 6,369 in the country were faced with critical coal and 72.05 percent for September 2012, Total (Apr-March) 8,976 18,814.5* stock position of less than seven days as on August 2012, July 2012 and June 2012, *As reported by CEA, the capacity addition in October 30. respectively. March was 5,482 MW, but the total figure for The data further shows that out of the 48 The PLF of power plants of central sector 2011-12 was increased by them to 20501.70 plants facing ‘critical coal stock’ position, 30 run companies such as NTPC and DVC in MW instead of 18,814.50 MW following revision were facing ‘super critical’ coal stock position October 2012 stood at 78.25 percent whereas in March 2012 figures. of less than four days. the figure achieved in September 2012 was at On October 21, out of the 50 plants (out 68.62 percent. # CEA had earlier reported that capacity addition of 89 plants) facing critical coal stock position In October 2012, the plants in the state in May (2012-13) was 1,070 MW, but it appears of less than seven days, 30 were facing ‘super sector recorded a PLF of 67.2 percent against that the figures have been revised to 1,130 MW. critical’ coal the planned 66.88 percent. stock position The worst performers were Muzaffarpur Achievement vs target in capacity addition (in MW) of less than four TPS, Neyveli TPS II Exp., BSEB and days. Plants in SVPPL, all of which recorded nil PLF against 1400 M a h a r a s h t r a , a target of 19.55 percent, 44.09 percent, 4.34 Bihar, Tamil percent and 44.8 percent, respectively. 1200 Nadu and West 1000 Bengal were the Power supply position worst sufferers. 800 In the month of October 2012, the country’s 600

Plant factor

400 200 0

Thermal Target

Source: Central Electricity Authority

Hydro

Nuclear

Achievement

load

The Plant Load Factor (PLF), a measure of the output of a power plant compared to the maximum output it could

peak power demand was estimated at 132,977 MW. However, the actual availability was only 121,304 MW. This reflected a shortfall of 11,673 MU or 8.8 percent. Despite acute power shortage, deficit stood at nil in Chandigarh, Haryana, Delhi, Rajasthan, Dadar & Nagar Haveli, Lakshwadeep and Sikkim while peak power deficit was noticed in Andhra Pradesh which stood at 2,819 MWw. 

Coal Insights, November 2012

65


Corporate

Jayaswal Neco to expand capacity despite slowdown Sanjukta Ganguly

A

t a time when the Direct Reduced Iron (DRI) industry is facing strong headwinds, Jayaswal Neco Industries Limited (JNIL), one of the leading DRI makers in the country, has decided to go for capacity expansion. The flagship of the Nagpur-based Neco Group is planning to set up a new DRI plant at Bilashpur in Chhattisgarh, a senior official of the company told Coal Insights. The proposed plant, the official said, is likely to start operations by 2014. “We have not started construction of the plant at Bilashpur yet but other necessary approvals required to set up the plant including land acquisition, MoEF approvals etc. have already been received,” he said. “In fact, we are about to start the construction work soon so that we can operationalise the plant by 2014,” he added. The DRI plant with a total capacity of 2X500 tons per day (tpd) will be accompanied by a captive power plant with a capacity to produce 50 MW per hour. The company is

66 Coal Insights, November 2012

also setting up a pellet plant at Raipur with a total production capacity of 1.2 million tons per annum (mtpa). This plant is also likely to be operational soon, the official said. Meanwhile, the DRI industry in the country continues to suffer from adverse market conditions. Abundant availability of non-coking coal reserves in India and successful generation of power through waste heat recovery methods had prompted the rapid development of this industry in the 1990s. But the increasing coal crisis and stagnant demand from the steel market in last few years has put the sector under duress. The raw material supply is currently the main problem for the DRI sector. The move by the government of Odisha to slap huge penalties of over `50,000 crore on mining companies for alleged illegal and excess evacuation of ore has further worsened the supply of iron ore. Also, the overall scenario of the real estate sector being not so well, demand for sponge iron has dropped significantly. However, there is a possibility of the demand to increase in the next few months.

Coal crisis

For the DRI plants, high grade domestic coal gives better output than Indonesian coal as the latter contains high volatile matter (VM), high moisture, low char strength and is highly fragile. Indonesian coal can be used for DRI industry provided it is cost effective, but for most of the DRI makers, procuring imported coal is posing a problem due to the escalating cost. Hence, at the present scenario the industry needs more captive coal blocks to sustain their operations, A.K. Maitra, DGM of the DRI unit of Jayaswal Neco said. “Since we have our captive coal mines, sourcing of coal is not much of a problem for us but every DRI producer is not that lucky. However, since we mainly depend on Odisha mines for iron ore supply, we are facing huge problems. But we expect NMDC to improve supply of iron ore in the next few months,” Maitra said. From a broader perspective, the overall scenario of the sponge iron sector of India is not much satisfactory as most of the small DRI makers have stopped production. However, the midsize and big players are continuing their production at 60-65 percent of their total installed capacity. There is an expectation that with the monsoons over, the real estate sector will start pulling up the demand for sponge iron along with it. How far this expectation is fulfilled would decide the fate of the industry in the near term. 


International

US coal production to be 1,021 MMst in 2012: EIA Coal Insights bureau

C

oal consumption in the US electric power sector will be below 1 billion short tons for the fourth consecutive year in 2012 at 892.6 million short tons (MMst), according to the latest report by US Energy Information Administration (EIA). EIA forecasts that coal production will decline by 7 percent in 2012 to 1,021.3 MMst as domestic consumption falls. Coal production for the first three quarters (January – September) of 2012 was 46 MMst below the same period in 2011. EIA expects production to remain flat in 2013 at 1,020.2 MMst as inventory draws and lower exports offset an increase in domestic consumption. Coal consumption in the electric power sector is expected to total 825 MMst in 2012. EIA projects power sector coal consumption to grow by 6 percent in 2013 to 870.9 MMst as higher natural gas prices lead to a reduction in natural gas-fired generation. Electric power sector stocks, which ended 2011 at 175 MMst, are forecast to total 185 MMst at the end of the 2012 and 180 MMst in 2013. Coal trade

EIA expects US coal exports to remain strong in 2012 at 125 MMst and exceed the

107 MMst exported in 2011. The 98 MMst of coal exported in the first three quarters of 2012 were larger than any annual total exported from 1993 through 2009. EIA expects that coal exports will decline in 2013 but remain at 105.9 MMst which is above 100 MMst for the third straight year. Falling international coal prices and continuing economic weakness in Europe, along with increasing production in Asia are primary reasons for the expected decline in coal exports. US exports could be higher if there are significant supply disruptions from any of the major coal-exporting countries.

MMBtu in 2012 and $2.44 per MMBtu in 2013. Electricity

Residential sales of electricity in the United States are projected to fall by 3.5 percent in 2012 taking electricity consumption to 10.48 billion kilowatt-hours per day during the year reflecting the mild winter temperatures in the first quarter of this year, particularly in the south where many households heat using electricity. Residential electricity sales decline by 0.5 percent in 2013 taking consumption to 10.52 billion kilowatt-hours per day as lower electricity demand for space cooling during the summer offsets the increase in first quarter consumption.

Coal prices

Delivered coal prices to the electric power industry increased steadily over the 10-year period ending in 2011, when the delivered coal price averaged $2.39 per million British thermal units (MMBtu) which is a 6 percent increase from 2010. Howe ver, EIA expects the decline in domestic demand for coal, combined with large coal inventories, will slow increases in coal prices and contribute to the shut-in of highercost production. EIA forecasts that the delivered coal price will average $2.40 per

EIA expects outages caused by Hurricane Sandy will reduce October and November retail sales of electricity in the midAtlantic region (New Jersey, New York, and Pennsylvania) by about 2-3 percent from their forecasted level. EIA expects the nominal US residential electricity price will rise by just 0.1 percent during 2012, which would be the smallest year-over-year increase in ten years. Residential prices during 2013 are projected to rise by 1.5 percent to an average of 11.98 cents per kilowatt-hour. The shares of total US electricity generation fueled by coal during 2012 averaged 37.2 percent. The projected higher price of natural gas relative to coal contributes to a decline in the share of total generation fueled by natural gas 27.2 percent next year and an increase in the coal share to 40.1 percent. 

Coal Insights, November 2012

67


logistics

Traffic handling by major ports down 2.82% in April-Oct Coal Insights Bureau

T

he 12 major Indian ports have handled 315.81 million tons (mt) of traffic during the first seven months (April-October) of 2012-13, 2.82 percent lower than 324.99 mt recorded during the same period last year. According to data released by the Indian Ports Association (IPA), the country’s major ports handled a total of 17.66 mt of coking coal in April-October period, up 2.98 percent as compared with 17.15 mt handled in the same period last year. However, the movement of thermal coal through the major ports was up 8.37 percent to

30.37 mt during April-October, compared to 28.03 mt achieved in the same period last year. Movement of iron ore through the major ports showed a significant drop of 49.71 percent in April-October due to restrictions imposed on mining Traffic handled at major ports and a hike in export (During Apr-Oct, 2012* vis-a-vis Apr-Oct, 2011) duty on iron ore. The major ports together (*) Tentative (in '000 tons) handled 18.92 mt of April to October traffic % Variation against Ports iron ore in the Aprilprev. year traffic 2012* 2011 October period KOLKATA compared to 37.63 mt handled in the Kolkata Dock System 6875 7291 -5.71 same period last year. Haldia Dock Complex 15983 19770 -19.16 Mormugao port TOTAL: KOLKATA 22858 27061 -15.53 handled the highest volume of 7.42 PARADIP 30576 32749 -6.64 mt of iron ore in VISAKHAPATNAM 35070 42418 -17.32 April-October. This ENNORE 9223 7686 20.00 volume, however, was CHENNAI 30993 33419 -7.26 about 33.90 percent lower than the iron V.O. CHIDAMBARANAR 16365 15954 2.58 ore traffic moved COCHIN 11833 11521 2.71 through the port in NEW MANGALORE 20140 18056 11.54 the same period last year. MORMUGAO 13431 20016 -32.90 Movement of MUMBAI 33495 31400 6.67 container traffic in JNPT 37829 38062 -0.61 terms of tonnage KANDLA 54004 46656 15.75 showed an increase in the April-October TOTAL: 315817 324998 -2.82 period, while that Source: IPA

68 Coal Insights, November 2012

of TEUs fell during the period. The major ports handled 70.23 mt of tonnage and 4.54 million TEUs in April-October period compared to 69.49 mt of tonnage and 4.55 mt of TEU in the same period last year. Among the major ports, Paradip port had the distinction of handling the highest volume of thermal coal of around 10.91 mt in April-October period. Visakhapatnam port handled the highest quantity of 4.03 mt of coking coal during the period. Movement of coking coal through Paradip, Kolkata, Visakhapatnam, Chennai, Cochin and Mormugao ports declined during the period when compared to the corresponding period last year. Six major ports showed positive growth in traffic handling during the April-October period of the current fiscal, while the remaining six showed negative growth on a year-on-year basis. In terms of growth, Ennore port topped the list with a 20 percent increase in cargo throughput. V.O. Chidambaranar’s growth was lowest at about 2.58 percent during the period. In terms of traffic volume, Kandla port clinched the top rank with a cargo volume of 54 mt recorded for the period. The Mormugao port registered the highest decline of 32.90 percent in traffic handling during the period due to fall in iron ore export. 


Logistics

Railways coal handling up in October Coal Insights Bureau

T

he Indian Railways transported 41.37 million tons (mt) of coal in October 2012, higher than 36.1 mt of coal handled in September 2012, according to information available with Coal Insights. Railways’ revenue earnings from transportation of coal also moved up to `3,130.05 crore in October from `2,509.01 crore in September. Overall, the Indian Railways’ revenue earnings from commodity-wise freight traffic increased month-on-month in October, mainly due to higher transportation of coal and iron ore. Revenue earnings from commodity-wise freight traffic during October 2012 stood at `7,165.82 crore, up 18.62 percent compared with `6,040.96 crore earned in September. Revenue from transportation of iron ore for exports, steel plants and for other domestic user in October rose to `523.67 crore, up 1.08 percent from `518.07 crore in September. The quantity of iron ore transported rose to 8.67 mt as compared to 8.2 mt in the previous month. Revenue from transportation of cement in October stood at `712.42 crore (8.91 mt) as compared to `575.41 crore (8.01 mt) in September, while that from foodgrains transportation increased to `569.17 crore (3.85 mt) in October from `488.2 crore (3.57 mt) in September. The Railways revenue from transportation of fertilisers in October rose sharply to `580.98 crore (5.2mt) from `479.86 crore (4.77 mt) in September. Revenue from transportation of petroleum oil and lubricant (POL) in October stood at `415.21 crore (3.54 mt), while the same from pig iron and finished steel from steel plants and other points was `417.36 crore (2.66 mt). Revenue from container services was `302.67 crore (3.41 mt) and from transportation of other goods was `426.74 crore (5.07 mt). 

Commodity-wise revenue Commodity

Quantity (in mt) Oct’11

Earning (in ` cr)

Oct’12

Oct’11

Oct’12

Coal (i) for steel plants

3.77

3.96

164.28

227.04

(ii) for washeries

0.16

0.11

4.18

1.33

(iii) for thermal power houses

23.8

25.93

1,620.96

2,175.97

(iv) for public use (v) Total Raw material for steel plants except iron ore

8.39

11.37

504.32

725.71

36.12

41.37

2,293.74

3,130.05

1.14

1.24

100.24

87.55 366.36

Pig iron and finished steel (i) from steel plants

2.17

2.1

282.22

(ii) from other points

0.57

0.56

49.53

51

(iii) Total

2.74

2.66

331.75

417.36

0.66

0.18

417.36

46.44

(ii) for steel plants

4.88

5.16

203.3

231.12

(iii) for other domestic users

2.45

3.33

168.07

246.11

Iron ore (i) for export

(iv) Total

7.99

8.67

550.4

523.67

Cement

9.16

8.91

580.94

712.42

Foodgrains

3.58

3.85

339.4

569.17

Fertilizers

4.9

5.2

407.15

580.98

3.33

3.54

304.26

415.21

(i) Domestic containers

0.76

0.84

78.06

83.28

(ii) EXIM containers

2.46

2.57

212.88

219.39

(iii) Total

3.22

3.41

290.94

302.67

Mineral Oil (POL) Container Service

Balance other goods Total revenue earning traffic

5.5

5.07

391.8

426.74

77.68

83.92

5,590.62

7,165.82

Coal Insights, November 2012

69


E-AUCTION Monthly data of offered quantity through coaljunction Qty. In Tons and MSTC (road & rail) MONTH

OFFERED BY ROAD 512,850 3,083,582 2,706,157 4,518,196 3,698,200 5,874,230 5,014,680 4,927,850 3,818,650 3,444,100 3,541,130 2,522,480

Oct'11 Nov'11 Dec'11 Jan'12 Feb'12 Mar'12 Apr'12 May'12 June'12 July'12 Aug'12 Sept'12

OFFERED BY RAIL 79,060 225,852 220,400 252,812 431,150 1,675,226 867,492 327,030 239,548 195,467 164,433 120,832

Monthwise quantity offered & sold through coaljunction & MSTC e-auction MONTH Oct'11 Nov'11 Dec'11 Jan'12 Feb'12 Mar'12 Apr'12 May'12 June'12 July'12 Aug'12 Sep'12

Monthly data of offered quantity through coaljunction & MSTC (Road & Rail)

8,000,000

4,000,000 3,000,000 2,000,000

Quantity offered & sold through coaljunction & MSTC

6,000,000 5,000,000 4,000,000 3,000,000

Companywise quantity offered & sold through coaljunction & mstc in Sept ’12 vs Aug ’12 via rail & Qty. In Tons road

Companywise data of sold quantity through coaljunction & mstc in Sept ’12 (road & rail) RAIL

Qty. In Tons

ROAD

Grand Total

BCCL

159,600

159,600

CCL ECL MCL NCL

332,250 46,780 923,890 136,000

332,250 159,706 923,890 136,000

SCCL

131,551

131,551

SECL

374,050

374,050

188,560 2,292,681

188,560 2,405,607

112,926

Sep'12

Aug'12

July'12

May'12

June'12

Apr'12

Mar'12

Jan'12

Feb'12

Dec'11

1,250,000

1,000,000

750,000

500,000

Com panie s Se p'12 QTY OFFERED

Se p'12 QTY SOLD

Aug'12 QTY OFFERED

Aug'12 QTY SOLD

Companywise data of sold quantity through coaljunction & mstc in Sept ’12 (road & rail) 1,000,000 900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0

NEC

112,926

BCCL

CCL

ECL

MCL

NCL

RAIL

Note: Data for the period January 2011 - December 2011 and February 2012 is for e-auction through coaljuntion only, while data for January 2012, and March 2012 onwards includes data of MSTC

70 Coal Insights, November 2012

NEC

SUBSIDIARY NAME ROAD

SCCL

SECL

WCL

CCL RAIL

CCL ROAD

SCCL RAIL

WCL RAIL

SCCL ROAD

WCL ROAD

ECL RAIL

ECL ROAD

SECL RAIL

SECL ROAD

NEC RAIL

NEC ROAD

0

NCL RAIL

250,000

NCL ROAD

210,250 0 897,150 128,000 15,000 608,450 43,483 133,490 105,138 242,580 117,448 423,500 2,924,489

1,500,000

MCL RAIL

QTY SOLD

1,750,000

BCCL RAIL

159,600 0 923,890 136,000 374,050 46,780 112,926 188,560 131,551 332,250 2,405,607

QTY OFFERED 371,600 15,812 1,375,000 128,000 15,000 659,750 43,483 133,530 105,138 261,450 140,000 456,800 3,705,563

SOLD QTY (in tons )

Companywise quantity offered & sold through coaljunction & mstc in Sept ’12 vs Aug ’12

MCL ROAD

QTY SOLD

Variation (In Percent) OFFERED SOLD QTY QTY -43.03% -24.09% -50.00% NA -27.27% 2.98% NA NA 6.25% 6.25% NA NA NA NA NA NA -35.96% -38.52% NA NA -64.97% -64.96% 7.41% 7.41% -18.45% -22.27% NA NA 5.00% 12.01% NA NA -24.41% -21.55% NA NA -28.67% -17.74%

Quantity In Tons

QTY OFFERED 211,700 7,906 1,000,000 136,000 422,500 46,780 112,926 213,200 147,000 345,300 2,643,312

Aug'12

Quantity (in Tons)

Sep'12

Nov'11

Sept'11

Sept'12

Aug'12

June'12

July'12

OFFERED QTY (in tons )

OFFERED BY RAIL

BCCL ROAD

OFFERED BY ROAD

May'12

Apr'12

Mar'12

Feb'12

Jan'12

Dec'11

Nov'11

Sept'11

Oct'11

0

Oct'11

1,000,000

0

WCL Grand Total

Qty. In Tons

Variation (In Percent) -34.80% -12.64% -10.06% -21.22% -13.38% -13.00% -11.87% -15.20% -11.15% -18.14% -21.08% -8.99%

2,000,000

1,000,000

Client

SOLD QTY (in tons) 385,904 2,891,019 2,632,049 3,758,496 3,576,946 6,584,608 5,183,850 4,456,357 3,605,700 2,979,323 2,924,489 2,405,607

7,000,000

5,000,000

Quantity in Tons

Qty Offered In Tons

6,000,000

BCCL ROAD BCCL RAIL MCL ROAD MCL RAIL NCL ROAD NCL RAIL NEC ROAD NEC RAIL SECL ROAD SECL RAIL ECL ROAD ECL RAIL WCL ROAD WCL RAIL SCCL ROAD SCCL RAIL CCL ROAD CCL RAIL TOTAL

OFFERED QTY (in tons) 591,910 3,309,434 2,926,557 4,771,008 4,129,350 7,568,706 5,882,172 5,254,880 4,058,198 3,639,567 3,705,563 2,643,312


port data Major ports through which coking coal arrived in India July ’12 - September ’12 Port

Qty (in Tons)

VIZAG

Port

297,855

5,151,143

UNITED STATES

934,745

71,033

SOUTH AFRICA

304,896

KANDLA

47,105

CANADA

290,557

298

OTHERS

1,544,903

KOLKATA

1,400,849

PARADIP

1,091,346

CHENNAI

GANGAVARAM

1,009,640

Grand Total

7,189,654

Major ports through which coking coal arrived in India July ’12 - September ’12 1%

Qty (in Tons)

AUSTRALIA

NEW MANGALORE

MORMUGAO

4%

Country of Origin

Qty (in Tons)

MUNDRA

1,726,625

Major coking coal supplier countries to India (through mentioned ports) July ’12 - September ’12

1%

508,313

Grand Total

Major coking coal supplier countries to India (through mentioned ports) July ’12 - September ’12

0%

15%

4%

4%

25%

14%

7,189,654

7%

13%

21% 19% VIZAG KOLKATA GANGAVARAM NEW MANGALORE CHENNAI

72%

MORMUGAO PARADIP MUNDRA KANDLA

Major ports through which steam coal arrived in India July ’12 - September ’12 Port

Qty (in Tons)

Port

AUSTRALIA

UNITED STATES

CANADA

OTHERS

SOUTH AFRICA

Major steam coal supplier countries to India (through mentioned ports) July ’12 - September ’12 Country of Origin

Qty (in Tons)

Qty (in Tons)

MUNDRA

2,816,269

KANDLA

897,105

INDONESIA

8,652,337

PARADIP

1,681,599

VIZAG

760,078

SOUTH AFRICA

1,915,643

ENNORE

1,241,192

MORMUGAO

306,863

COLOMBIA

163,580

GANGAVARAM

1,097,033

KOLKATA

238,859

UNITED STATES

124,459

MUMBAI

1,025,137

COCHIN

OTHERS

183,515

NEW MANGALORE

3,000

Grand Total

972,400

11,039,534

Major ports through which steam coal arrived in India July ’12 - September ’12

8.1%

6.9%

2.8%

2.2%

0.0%

Major steam coal supplier countries to India (through mentioned ports) July ’12 - September ’12

25.5%

1.5%

1.7%

17.4%

15.2%

9.9% MUNDRA GANGAVARAM KANDLA KOLKATA

11,039,534

1.1%

8.8%

9.3%

Grand Total

11.2% PARADIP MUMBAI VIZAG COCHIN

72 Coal Insights, November 2012

ENNORE NEW MANGALORE MORMUGAO

78.4% INDONESIA UNITED STATES

SOUTH AFRICA OTHERS

COLOMBIA


Tear along the dotted line

74 Coal Insights, November 2012 Tear along the dotted line



Coal Insights Nov12