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Published on : 28.04.2018 Price: 40/W H E R E S E R V I C E A N D D E D I C AT I O N J O I N H A N D S

Vol. XLVI No. 13 April 2018 POWER DOMESTIC

GLOBAL

CCAI Monthly Newsletter April 2018

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From the Editor’s Desk Coal supply situation to the power plants has improved moderately in the country. Average coal stock at power plants have increased from 7.38 mt in October last year to to around 16.7 mt in April 2018. But the power plants located far from coal mines still have a stock of less than 7 days due to transportation issue. Though supply has increased considerably but coal supply position to the power plants is expected to remain tight for about 2 years. Indian Railways has yet again set a new target of April 2020 for commissioning of the 3,342-km Dedicated Freight Corridor (DFC) along its trunk routes starting from November 2018 and may help to ease the situation gradually. Coal Ministry has assured power plants that there will be no shortage of dry coal in the upcoming monsoon season but only if the plants follow the CEA guidelines to have adequate stocks of 2122 days. To meet consumers’ demand the Union Government has announced to auction 45 mt of coal in 2018-19 for power producers through Special Forward e-Auction. It may help IPPs to plan in advance to source coal as per their requirement. Coal India will undertake commercial extraction of methane from all new mines holding substantial volume of gas. It would be a two way revenue gain where CIL will earn additional revenue and mining would be safer and larger quantities of coal can be mined from them. Innovations and timely implementation of policies would be able to encounter the robust demand and further reduce the demand supply mismatch.

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Content Vol. XLVI No. 13 April 2018

06 |Consumers’ Page

Official Organ of the Coal Consumers’ Association of India. Disseminates News and Views on Coal and all other sources of Energy.

08|Power

4, India Exchange Place - 7th Floor Kolkata - 700 001 Landline : +91 33 22304488 / 22621516 E-mail : sec.ccai@gmail.com Website : www.ccai.co.in

14|Domestic

Editor : Subhasri Nandi

20|Global

Annual Subscription Rs. 400/(including postage) MO/DD to be made in favour of “Coal Consumers’ Association of India” CCAI do not necessarily share or support the views expressed in this Publication.

24|In Parliament

38 |Monthly Summary of Domestic Coal 40 |Energy Genaration Report 41 |Monthly Summary of Imported Coal and Petcoke

42 |Global News 44 |Production and Offtake Performance of CIL and Subsidiary Companies

46 |Overall Domestic Coal Scenario CCAI Monthly Newsletter April 2018

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CONSUMERS’ PAGE Present Coal Scenario Coal India has achieved 96% of the targeted coal production at 44.84 million tonnes in April 2018. Its offtake was 90% of the targeted at 50.97 million tonnes in the same month. Rake loading per day during the month grew 10.4% as the company loaded 246 rakes per day on an average compared to 223 rakes per day during April 2017.

Consumers’ Concern 1. Coal Stock Position

CIL has supplied 40.30 million tonnes of coal to the power sector during April, 2018 against 35.20 million tonnes on a comparative month to month basis. Increased supply has helped the power sector to increase its inventory from a little over 7 million tonnes six months ago to 16 million tonnes on April 30, 2018. Though the situation has improved IPPs are still facing shortage of coal. 2. Power Companies with and without PPAs have urged to start Auction under Shakti Scheme Power Plants without assured coal supply but with PPAs could not take part in Auction due to various reasons, have urged to commence Auction to provide them the opportunity to win long term supply assurance. Similarly, non-PPA holders have also requested for commencing Auction for them as per provisions of Shakti Scheme. 3. Refund of GST In case of refund of coal value GST is neither refunded nor adjusted and it adds to the financial loss of the consumers. 4. Reconciliation at regular intervals is needed for refund or adjustment of balance amount Reconciliation against advance payment should be done at regular intervals otherwise it takes inordinate time to get back the adjusted amount. 5. GCV slippage repeatedly found Power Consumers are repeatedly complaining of GCV slippage from different areas of ECL and BCCL. In spite of Third Party Sampling & Analysis, consumers are not satisfied with the quality specially from these two Subsidiary Coal Companies resulting in loss to the Power Plants. 6. Delay in issuance of credit notes against GCV slippage In case of GCV slippage in different subsidiaries, inordinate delay in issuance of credit note is resulting in stuck up of funds. Therefore, coal consumers are requesting Subsidiary Coal Companies for timely release of credit notes as it is done in case of debit notes. 7. Under loading of coal in rakes Under loading even in the tune of 300 to 400 tonne of coal resulting in idle freight is a direct load to the consumers. Before 2009, it had been compensated by the coal companies as under loading rebate but now this has been restricted to stencil carrying capacity only.

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8. Overloading penalty Customers have to pay penalty for overloading and that is quite higher than the normal freight. Therefore loading should be done as per the chargeable carrying capacity fixed by the Railways. 9. Scarcity of Box-N Wagons Scarcity of rakes in certain zones specially unavailability of Box-N Wagons is increasing pendency of rakes at specific zones. 10. CHP or SILO loading For ensuring time bound efficient loading of coal, both Power and Non-power Sectors have requested CIL & Subsidiaries for loading only through Silo or rapid loading mechanism. Advanced Coal Handling Plants (CHP) should be put in place. 11. Request for extension of the exemption against advance payment in the Non-lapsable category Due to huge demand of coal number of power sector rakes are getting lapsed almost every month. There is also arrear of more than 4500 rakes in the Non-lapsable category during the same period from different CIL Subsidiaries which is creating temporary stalemate in smooth functioning of the plants. Considering this, consumers have requested for extension of the exemption of advance payment from May 2018 till the situation normalises. 12. Yearly calendar for Exclusive e-Auction All the Subsidiaries of CIL have announced the schedule for Special Forward e-Auction and started implementing the same. Therefore, Non-power Sector consumers have urged for scheduling of Exclusive e-Auction as well so that industries can plan for their yearly procurement in advance which would prove to be a win-win situation for both the buyers and the sellers. 13. Request for increase in Quantity by Rail in Linkage Auction Tranche IV Huge number of old FSAs from Non-power Sector would expire in 2018 from April onwards and there is also long pendency of rakes from different Subsidiaries of CIL. Therefore, consumers have urged for increase offer by Rail in Tranche IV Auction of Linkage for Non-power Sector.


POWER Power ministry unveils scheme to help 2,500 MW stranded thermal plants. In an attempt to bring some relief to the stressed thermal power sector, the government has introduced a pilot scheme to procure electricity from power plants without PPAs. A combined capacity of 2,500 megawatt (MW) will be procured through this scheme. Though no time line for inviting tenders has been announced, the power ministry said PTC India would sign three-year (mid-term) power purchase agreements (PPAs) with successful bidders and contract with power distribution companies (discoms) to sell electricity. The pilot plan proposes that a single entity, which quotes or matches the lowest bid in the auction, would be allocated a maximum capacity of 600 MW. A company cannot quote part capacity from different power stations in the same bid. If PTC procures power less than 55% of contracted capacity in a month, the power plant would be paid a compensation, whose quantum would be linked to spot power prices at the Indian Energy Exchange. The competitive bidding for the pilot scheme would be conducted by PFC Consulting, a subsidiary of the Power Finance Corporation. PFC Consulting had signed a memorandum of understanding (MoU) with PTC India in January for exploring power procurement opportunities from coal-based power plants

National Electricity Plan revised to make room for more coal The Central Electricity Authority (CEA) has revised the National Electricity Plan (NEP) after getting

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feedback from more than 30 state-owned and private institutions, mostly questioning the redundancy of coal. From retiring coal-based power completely, the CEA has said India would need 6,440 Mw thermal power during 2017-22. In the earlier version of the NEP, which was out in 2017, the CEA had said the country did not need coal-based capacity addition till 2022. However, the CEA said coal-based power projects of 47,855 Mw were likely to yield benefits during the period 2017-22. They are currently under different stages of construction. This translates into a likely capacity addition of 176,140 Mw in the next five years, according to the plan. The plan has made capacity addition assumption based on projected growth in power demand of 6 per cent annually till 2022. Growth will, however, slow to 5.5 per cent till 2027. The plan has discounted the effect of electric mobility on the electricity demand in the coming years, indicating no significant change in government policy for promoting of electric vehicles. The total coal requirement in the year 2021-22 and 2026-27 has been estimated at 735 million tonnes (mt) and 877 mt, respectively, including imported coal of 50 mt.

Spot power prices spurt on lower coal supplies A spike in power prices in the spot market has put the Power Ministry in a fix. Given that both the Ministries of Coal and Power had been claiming adequate supplies, they are unable to account for the price surge. Senior officials in the Power Ministry said the government is addressing the problem. “Coal supply


needs to be in sync with demand for power, which is 10,000 MW more than the corresponding period last year,” Minister of State (Independent Charge) for Power and Renewable Energy RK Singh told. In February, the average number of rakes supplied was 259, and in March it was 270. “From April, we have given a target of 288,” Singh said. Power demand grew 9.1 per cent in February, and about 6 per cent in March. “On an average we are growing at 6.5 per cent,” Singh added. According to the Indian Energy Exchange, in March this year, the average market price for the day-ahead market stood at Rs. 4.02 a unit. This was 57 per cent higher than the Rs. 2.56 a unit monthly average reported during March 2017. The price in March was higher by 24 per cent over the Rs. 3.23 per unit average price reported in February. IEX said the increase in the spot market price was largely on account of the increase in the demand associated with seasonal variation and inadequate availability of coal with thermal generators. During financial year 2017-18, the day-ahead market traded at an average price of Rs. 3.19 a unit, against Rs. 2.41 a unit in fiscal 2016-17.

Discoms likely to consider PPAs as short-term power rates rise The price of one unit of power sold in the spot market has jumped over 50 per cent over a year ago. This implies an increase in demand and input cost. It may also be an early indicator for state distribution companies (discoms) to consider long-term options for power procurement. As the cost of short-term power rises, it is likely that state discoms would look at longer tenure for power purchase agreements (PPAs). “We may see a change in the trend (where long-term PPAs were missing so far) now that merchant power prices are also going up and because the ministry initiatives are also to centralise procurement. Whether the revival is medium- or long-term needs to be seen,” said Vivek Sharma, senior director, CRISIL Infrastructure Advisory. “The exchange prices have moved up and the bilateral agreement prices are also going up for the last one year. We expect this trend to continue, which in turn will trigger a PPA,” he said.

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According to the data available with the Indian Energy Exchange, a platform to trade energy in the spot market, average monthly price for one unit of power for April 2018 is at Rs 4.15 against an average monthly price of Rs 2.70 per unit in the year-ago period, up 53 per cent. Rising coal prices also pose a challenge for state distribution companies.

Private power plants’ PLF seen rising in FY19 on CEA estimate The Central Electricity Authority (CEA) has set the electricity generation target from conventional sources, which include coal, gas, nuclear and hydro power plants, at 126,000 million units (MU) for FY19, 6.7% higher than power produced from these sources in FY18. In order to achieve this target, state and private power plants would have to raise their annual production by 9.2% and 13.4%, respectively, while generation from central government-owned plants would slip by 0.7%, data from the CEA report showed. The estimate sounds positive for private power plants which are running at very low utilisation levels due to less-than-expected growth in power demand. The

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plant load factor (PLF) for central government-owned thermal power plants in FY18 was 72.4%, while private power plants were running at 55.1% in the same period. PLFs of less than 60% make it difficult to service debts. Stressed assets in the power sector consist of 34 private power plants with an outstanding debt of Rs 1.74 lakh crore. The power generation programme was designed on the actual power generation trends from previous years, planned maintenance schedules and new capacity additions anticipated in the new financial year, the statutory body said. Import from Bhutan is expected to remain unchanged at 5BU in FY 19. Uttar Pradesh is expected to produce 129,423 MU of power, the highest in the country. It would be followed by Maharashtra at 132,643 MU and Chhattisgarh at 111,858 MU.

Power tariff up by 2 per cent in Punjab, relief for steel industry Power tariff has been increased by over 2 per cent for domestic as well as industry in Punjab for 2018-19 as the Punjab State Electricity Regulatory Commission sough to bridge Rs 669 crore in revenue and expenditure. The hike in tariff includes 10-40% increase in


fixed charges for domestic as well as industry. The PSERC has omitted fixed charges for Electronic Charging Stations and announced energy charges at the rate of Rs 5 per unit to promote environment friendly vehicles. The charges have been reduced in case of power intensive units including arc furnaces as per new tarrif plan and steel rolling industry has been relieved off 5 per cent surcharge in 2018-19. It is pertinent to mention that the state government has earlier announced to provide power to industry at a tariff of Rs 5 per unit. The new tariff would further increase Rs 1450 crore subsidy estimated to fund subsidized power to industry, a pre-poll promise of state government.

Coal shortage set to unplug power plants in Rajasthan The state’s daily demand of electricity has surged to about 15,000 MW as the summer days are progressing, while the coal stock in 4 power plants in the state is for less than 10 days. The position in Kota thermal power plant for coal is said to be very critical and officials inform that power plant has stock of about 50,000 tonnes which would barely suffice for merely 4-5 days. As per the latest report of central electricity authority, Chhabra Thermal power project has coal stock of 9 days, while Suratgarh has stock of 7 days and Kawai also has 3 days left. The condition of coal stock in the plants is almost same since last 8-10 months, however that time it was being managed easily as the power demand was less. Sources informed that this is because of the technical problems related to coal India Limited. It has a major role in the shortage of coal across the country. Secondly, the state also needs regular movement of rakes of coal which is also many times not happening. To streamline the system, meeting between the power utilities, Coal India and Railways is slated to be held in New Delhi on April 11. Thereafter, a meeting will also be held in Kolkata on April 12. In these meetings, officials from Rajasthan Vidyut Utpadan Nigam limited (RVUNL) are expected to participate, who will apprise the officials about the critical stock of coal.

Reliance Power posts 16% rise in Q4 profit on higher electricity generation Reliance Power reported a 16 per cent rise in its January-March quarter net profit on higher electricity generation. Net profit in the fourth quarter of 2017-18 at Rs2.5 billion was 16 per cent higher than Rs 2.15 billion net profit in the same period of the previous fiscal year. Revenue from operations or turnover was however lower at Rs 24 billion when compared with Rs 25.9 billion in the year-ago period. The company did not give reason for the decline in the revenue. The company said its 3,960 Mw Sasan ultra-mega power plant in Madhya Pradesh generated 31,793 million units operating at plant load factor (PLF) of 91.6 per cent, the highest among all 1000+ Mw thermal plants in the country. Captive coal mines of Sasan UMPP produced 18 million tonnes of coal, the highest among the private sector players in the country.

India Had Coal-Free Power Capacity Addition During 8 Months In 2017 India probably witnessed the greenest stretch of its power sector last year in terms of new capacity added. No thermal power capacity was added in 8 of the 12 months last year in India. India managed to add coal-based power capacity in only 4 of the 12 months last calendar year. In six months, India actually retired coal-based power capacity, leading to a net reduction in installed coalbased capacity during those months. Overall, India added 7,115 megawatts of coal-based power capacity and retired 3,111 megawatts of capacity in 2017 — a net capacity addition of 4,004 megawatts during the entire year. Only in three months did the coal-based power industry manage to beat capacity additions in the renewable energy industry. The largest monthly volume in the coal industry was seen in April 2017 with 3,115 megawatts capacity addition. The renewable energy industry saw addition of 7,242 megawatts in the CCAI Monthly Newsletter April 2018

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same month. Total capacity added in the renewable energy sector in 2017 was 12,829 megawatts, more than three times the net capacity addition in the coal sector. This is in stark contrast to the trends seen over the last few years.

NTPC to substitute 2,000 MW thermal electricity with renewable power NTPC will substitute thermal power that it had committed to supply to its consumers with cheaper renewable power after the Ministry of Power tweaked norms to allow the same. “Under the revised norms issued by the Ministry of Power earlier this month, if NTPC wants, it can now replace coal-based power, committed to a power distribution company (Discom), with power generated through cheaper renewable energy sources. We have called for bids from renewable energy companies, both wind and solar to offer 2000 MW of power to us that we can use for the substitution,” a top NTPC official said.

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How India can end energy poverty by 2040 What would be the energy scenario in India in, say, 25 years from now? This is an important political enquiry as the path we choose would have a pivotal role in determining the country’s economic growth, social development and environmental sustainability. But, before gazing into the crystal ball, let’s analyse emerging trends in the sector. The tariff of utility-connected large solar photovoltaic (PV) power projects in India has hit a record low of Rs 2.44/kWh. At this tariff, solar plants are cheaper than several new and old coal-fired power plants. In the past six years, the tariff of large solar power in India has reduced annually by 20%. Going by the global trends, it is likely to fall further. In October 2017, in Saudi Arabia, the winning bid for a 300 MW solar plant had a tariff of Rs 1.2/kWh. The International Renewable Energy Agency (IRENA) says by 2025, the global average cost of energy (LCOE) of solar PV system could fall by 59% from 2015 levels. Even if the tariff of large solar projects drops by 5% annually in India between now and 2020 (lower than IRENA’s prediction), solar plants would soon be the cheapest source of electricity during the daytime.


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DOMESTIC No question of coal shortage during monsoon: Susheel Kumar Ruling out any possibility of dry coal shortage in the upcoming monsoon season, the Coal Ministry said it has sufficient stocks to meet the demand of power plants. The ministry, however, stressed that it expects power plants to lift their requirement in time to avoid any shortage which was witnessed last year after the rainy season. The ministry hopes that the electricity producers which faced fuel problem last time would be careful this year and pile up adequate stocks, Coal Secretary Susheel Kumar told. “No question of coal shortages at power plants. Because they have to have adequate stocks as per CEA guidelines (for) 21-22 days. They will keep stock. In any case they have faced problem last year so they know what are the problems. This year I am sure they are going to be careful,” he said. Power plants were hit by coal shortages in the second half of 2017 which affected power production in some states. The ministry said it is fully geared to meet the increased coal demand this time as it has adequate fuel. Moreover, the ministry has also charted out a plan on this year’s production and supply.

Key Coal India pricing system delayed till June A new way of charging for coal, beneficial to customers, including power plants, may not get implemented before June as Coal India struggles to get its systems in place. The PSU mining giant was supposed to implement a billing policy from April 1, in line with global standards, where in it would charge customers for exact

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units of energy consumed and do away with the prices for grades of coal at present. While a pre-launch workshop was conducted by Coal India, industry representatives, who attended the meeting, said the proposed system was largely supported. “The implementation of pricing based on energy consumption was likely to start either by end-May or early-June but Coal India subsidiaries are not quite ready with the infrastructure to launch it,” sources told. Almost all of Coal India’s actual mining is carried out by most of its subsidiaries while supplies and sales are handled by Coal India, the holding company. Charging customers for the actual amount of heat expected to get generated by burning the coal would change the way Coal India books its revenues and the way power generating companies like NTPC and others pay for the coal, which, in turn, determines what people pay for their electricity bills. But power plants would have to wait for a bit more time to reap benefits of the new pricing system.

Coke dumping levy fails to limit import The import of low ash metallurgical coal from China and Australia has gone down only fractionally in 2017-18 despite the imposition of an anti-dumping duty. The finance ministry, through a notification dated November 25, 2016, had imposed an anti-dumping duty of $25.20 per tonne on met coke imports from China and $16.29 per tonne on imports from Australia to protect the domestic industry. The duty is applicable for a period of five years from the date of issue of the order. In 2017-18, total low ash met coke imports from China and Australia was 2.21 million


tonnes (mt). This is marginally lower than 2.97mt in 2016-17 but higher than 2.09mt in 2014-15 and close to the level 2.45mt in 2015-16 before the imposition of the duty. Domestic ferro alloy producers have questioned the logic of continuing with a blanket duty as imports from the two major countries are showing no signs of abatement. Met coke is a key raw material for both the ferro alloy and steel industries. India is a key importer of both metallurgical coke and coking coal. However the anti-dumping duty, which has added to its cost, and the poor quality of indigenous met coke has put the ferro alloy producers in a fix.

CIL in Odisha struggling: Piyush Goyal Union Minister of State for Coal and Railways Piyush Goyal expressed displeasure over lack of support from the State Government for increased coal production in the State.While the Government was able to ramp up coal production in Chhattisgarh, Jharkhand and Madhya Pradesh, it was still struggling in Odisha, Goyal said at an industry event in New Delhi. “When Odisha Chief Minister came to Delhi, he wanted to talk about his own agenda while I was more keen to flag up with him the issue which the coal sector was facing in the State, one of the prime places from where coal will come for rest of the country,” said Goyal. The Union Minister said he had sought the Chief Minister’s help in increasing coal production in the State by getting land, making railway line, sorting out law and order issues and stopping harassment of coal mines by BJD MLAs, particularly in Talcher which has the potential to provide coal to the power plants in rest of the country. “But I did not get the kind of support which I should have,” added Goyal. The biggest beneficiary, he said, would have been the State and its people. The State would get royalty, huge employment for people who for many years remained deprived of progress and development.

Industry Analysis Suggests India’s Demand for Coal Will Decline in Coming Decades

A new analysis of future energy trends by Coal India Limited, the state-controlled company that produces the bulk of the developing nation’s coal, finds that the falling cost of renewables, improvements in energy efficiency, and the global push to address climate change could significantly decrease demand for coal in India in the coming decades, according to reporting by Climate Home. “Even in the case of coal industry in India, trends portent that in the long run the demand is likely to decrease substantially,” the report, titled Coal Vision 2030, states. “With the increasing threat of climate change impacting humanity (irrespective of the U.S. position) and the global funding focus on renewables, it is a matter of time when alternate clean energy would displace coal.”

CEMENT The impact of import duty hike on landed cost of petcoke An internal analysis conducted by domestic brokerage firm Nirmal Bang Institutional Equities showed that landed cost of petroleum coke (petcoke)—a key raw material input for cement producers—should increase by around 6% considering the import duty hike. In November, the Supreme Court banned petcoke use in a few states around the National Capital Region in a bid to curb pollution. Though the restriction was relaxed later, it was followed by an import duty hike on petcoke from 2.5% to 10%. It should be noted that at the time when import duty was raised, i.e. December 2017, the international petcoke price was hovering around $95-96/tonne, showed data from S&P Global Platts. However, the price of petcoke imported from the US hit a multi-year high of $117/tonne in March this year and continues to soar, which means its landed cost should surge further. Power and fuel costs account for nearly 30% of overall cost and in the absence of strong demand and consequently subdued prices, input cost inflation will hurt margins of cement makers in the March quarter earnings.

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Cement industry may post flat 5% growth in FY19: ICRA

months to December from 73.96 mt in the previous year, according to provisional figures from the steel ministry. Exports rose to 7.6 mt from 4.98 mt in the previous year.

The cement industry is likely to register a flat growth of around 5 per cent in the current financial year despite a pick-up in demand in recent months and healthy outlook ahead, a report said.

India, in fact, has been a net exporter of steel for the past 13 months and has surpassed Japan to be the world’s second largest exporter.

The profitability margins and debt metrics of the cement companies may also come under pressure in the coming quarters on higher petcoke, coal and diesel prices, rating agency ICRA said in its report. “The cement demand has picked up from Q3 FY18 and the trend is expected to continue in Q4 FY18, but the growth of the industry may remain flat at 5 per cent in FY19,” it said. ICRA expects the cement demand to show a moderate growth of around 5 per cent in FY18 as well. “A demand pick-up in the recent months — October 2017 to January 2018 — by 13.4 per cent, is backed by demand for low-cost housing in the eastern markets, Andhra Pradesh and Telangana along with the infrastructure demand from the eastern, southern and western markets,” it said. However, the sand availability issues persist in Rajasthan, Uttar Pradesh, Bihar and Tamil Nadu, which according to the agency, are adversely impacting the demand in these regions. ICRA said a pick-up in the affordable and rural housing segments and infrastructure — primarily road and irrigation projects — is likely to continue the demand growth momentum of around 5 per cent in FY19.

STEEL Steel production in India seen increasing to a record in FY18

Last year’s National Steel Policy that projected crude steel production capacity will increase to 300 mt per year for 2030-31 from 100-120 mt now came on heels of the government introducing a minimum import duty (MIP) on certain steel products, and an anti-dumping duty on products from China and European countries. The duty on Chinese products was later extended to five years. Across the northern border, the Chinese seem no longer interested in keeping open capital-intensive units that are racking up losses. In 2016 and 2017, it phased out 115 mt of capacity and is aiming to further cut production by 30 mt in 2018. Marginal producers fell afoul of the country’s new environmental norms and have been shut down. Indian steel makers have made the most of this. JSW Steel (with a capacity of 18 mt) and Jindal Steel and Power (8.6 mt) recorded their highest ever quarterly and monthly crude steel production, respectively in the March quarter; Tata Steel (13 mt) was hampered by a temporary technical snag at its Kalinganagar blast furnace but crossed the 3 mt mark for the quarter. At 12.48 mt for the year, it recorded its highest ever output for the full year FY18.

Tata Steel achieves highest ever annual sales, grows 11% Tata Steel achieved its highest-ever annual sales of 12.13 million tonne in FY18 and registered a growth of 11% against a market growth of around 5%, the company said in a statement.

Indian firms are estimated to have churned out a record amount of steel in the year that ended in March as the government took steps to protect steel makers, construction activity rebounded and China shut down illegal factories.

The company’s annual sales growth was driven by sales in automotive sector which registered a growth of 21% in FY18 against an industry growth of 14%. The growth was mainly driven by two-wheelers & three- wheelers. Tata Steel also reported a 9% yearon-year increase in sales of Branded Products & Retail sector in FY18.

India produced 86.7 million tonnes (mt) in the nine

Tata Steel also said it touched the of one million

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tonne mark in annual exports in FY18. Tata Steel’s blast furnaces in Jamshedpur achieved best-ever hot metal production in FY18 of 10.95 million tonne, beating its previous best figures of 10.83 million tonne in FY17. It also reported its best-ever saleable steel production of 9.78 million tonne in FY18 compared to its previous best of 9.70 million tonne in FY17.

RAILWAY

wagon-owning policies, which would liberally allow private companies to own railway infrastructure, and offer more attractive returns than previous similar schemes. Coal India (CIL) is mulling investments to the tune of Rs 20,000 crore in the next five years to buy about 2,000 rakes. Goyal was speaking at an event to launch the ‘Uttam’ app, designed to bring more transparency in the coal sampling process and improve the quality of the dry-fuel.

Railway ministry poised to imRailways gets Rs 4,700 crore from prove coal transportation, says NTPC as coal carriage charge Piyush Goyal In order to make coal transportation through railways more robust, the government is working on a number of plans such as advance rake-booking, wagon owning and doubling of railway lines. At an event here, Piyush Goyal, who heads the railway and coal ministries, said that the Centre is also working rigorously to develop 14 new lines identified for coal movement. After coal-supply scenario at power plants reached critical levels in the second half of 2017, the railway ministry has increased the number of rakes for coal transportation to 320 rakes, out of which 280 earmarked for power. Goyal said that the government is doubling a number of coal-carrying railway lines, which would transportation capacity by 4-6 times. The policy to book railway rakes 12-months in vance at an assured rate would also address last-minute availability issues, Goyal added. ministries are also working on strengthening

adthe His the

NTPC has paid in advance Rs 4,700 crore to Railways for coal that the transporter will carry for the power major in financial year 2018-19. The money, however, will be reflected in earnings for the previous fiscal year.

While Indian Railways carried a record 1,162 million tonnes of freight in 2017-18, its highest ever, and around 4.8 per cent more than last year’s figures, the extra money from NTPC, an MoU for which was drawn on the last day of the financial year, will help the railway books look better and negate the possibility of a revenue shortfall in 2017-18. The extra money will have a direct bearing on the Operating Ratio of the transporter, which will now stay shy of 100 per cent, sources said. In return, the NTPC will be insulated from all possible hikes in freight rates in 2018-19 and railways will remain a competitive mode for the power major.

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UGF 1& 2, Kanchenjunga Building, 18 Barakhamba Road, New Delhi-110001, India P : +91 11 23354046/47 F : +91-11-23354047 E : corporate@shardamaa.com W : www.shardamaa.com


GLOBAL U.S. Coal Exports Jumped in 2017 The U.S. exported 97.0 million tons of coal in 2017, a 61 percent increase from the 2016 level. Exports to Asia more than doubled from 15.7 million tons in 2016 to 32.8 million tons in 2017, although Europe continues to be the largest recipient of U.S. coal exports. Steam coal, which is used to generate electricity, accounted for most of the increase in 2017 coal exports. India, South Korea and Japan were three of the top five recipients of U.S. steam coal exports in 2017. India, the largest importer of steam coal from the U.S., imported 7.6 million tons of steam coal from the U.S. in 2017, nearly three times as much as in 2016. Coal-fired generating capacity in India has more than doubled in recent years to meet growing electricity demand. Although India produces enough coal to meet most of its domestic needs, a large portion of India’s new coal-fired power plants require coal with higher quality and energy content than the coal that is typically produced in India, resulting in these power plants having to import coal from elsewhere. South Korea was the third-largest recipient of U.S. steam coal in 2017, importing 5.9 million tons, up from 1.3 million tons in 2016. This increase was primarily because of South Korea’s plan to transition away from nuclear power, increasing its reliance on electricity generated from coal-fired power plants.

Importers to gain from 22% dip in Indonesia coal prices Rising Indonesian coal production and lower Chinese demand have pulled down Indonesian coal prices by 22% over the last 45 days, a trend that augurs well for plants that import fuel. China has restricted coal imports at many ports and

20 | CCAI Monthly Newsletter April 2018

plans to phase out a large number of thermal plants, hurting demand. Indian power generators are likely to increase imports because they face a supply crunch. It would also ease pressure on Coal India although it would increase dependence on foreign fuel. Experts said prices are expected to fall further, keeping potential buyers away from the market as they are waiting for lower rates. Public sector power companies would continue to follow centre’s directive of not importing fresh consignments. A senior power company executive said: “As Indonesian prices fall, power plants within a radius of 150 km from ports will find it remunerative to import. Content in Indonesian coal is, at most, 10% while Indian coal contains ash of 30-40%. Importing Indonesian coal makes sense for coastal plants even when it is costlier than Indian. However, for pit head plants, it is still a costlier option and will continue to be so unless prices fall drastically.” Deepak Kannan of S&P Global Platts in Singapore said price of freight on board Kalimantan 4200 GCV as received coal — a popular grade bought by both India and China in significant quantities — has dipped to $40 per tonne, from $51 late February.

Chinese steel prices climb after bank liquidity boost China’s steel futures climbed more than 2 percent, on track for their biggest daily gain in three weeks, as market sentiment was boosted after the country’s central bank announced it would cut the cash banks hold as reserves. The People’s Bank of China late unexpectedly said it would cut the reserve requirement ratio (RRR), the amount of cash that most commercial and foreign banks must hold as reserves to pay back medium-term lending facilities, by 100 basis points for most commercial banks.


“The cut in RRR helps to relieve pressure in capital markets and boost optimism over the macroeconomy,” said Xu Bo, analyst at Haitong Futures. The most-active construction rebar futures on the Shanghai Futures Exchange had gained 2.4 percent to 3,471 yuan ($552.17) a tonne by GMT 0158, set for their strongest one-day advance in three weeks. Prices for steelmaking raw materials also rose. Iron ore contracts for September delivery jumped 1.7 percent to 447.5 yuan a tonne, on course for their biggest intraday gain since early January. The most-traded coke futures on the Dalian Commodity Exchange surged 4.5 percent - approaching their largest one-day move in 12 months - to 1,847 yuan a tonne. Coking coal prices rose 3.4 percent to 1,153 yuan a tonne. However, some analysts warned the pickup in the market may just be temporary.

Cement companies need to cut emissions aggressively to meet Paris climate accord: Study

Cement companies have to reduce their carbon emissions by more than double to meet the limit prescribed at the Paris climate deal. The cement sector accounts for six per cent of global carbon-dioxide emissions. Cement, the second most polluting industrial commodity, is used in concrete, which is the most consumed product after water in the world. Regulation for the cement sector has so far been lax but rising ambitions for low carbon cities and tightening building regulations could drive changes up the chain, finds a new report ‘Building Pressure’ by CDP (formerly Carbon Disclosure Project). CDP is an international non-profit that drives companies and governments to reduce their greenhouse gas emissions, safeguard water resources and protect forests. The report analysed the world’s top 13 cement companies that command 16 per cent of global cement production and has total market capitalisation of $150 billion. Indian companies topped the CDP league table thanks to lower carbon footprint during the cement making process, in part due to better access to alter-

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native materials from other carbon intensive sectors. They also benefitted from newer and more efficient cement plants driven by high market growth in the region, in contrast to their European peers that relied on older cement plants.

Australia Sees Miners Winning Highest Japan Coal Deal Since 2012 Coal miners are set to win the highest supply contract in six years from Japanese utilities after demand drove spot prices higher, according to Australia’s commodity forecaster. Japan’s utilities will probably pay $100 a metric ton for annual supplies during the period from April to March, the Department of Industry, Innovation and Science said in a quarterly report. That’s 18 percent higher than the deal in 2017 and the most since 2012. Spot prices climbed earlier in the year on strong demand as buyers snapped up cargoes amid supply concerns, the forecaster said. Spot Newcastle coal capped its best quarter in six years after a winter freeze across Asia boosted heating demand and sapped supplies. The agreed AprilMarch deal between Japan’s utilities and miners will establish a benchmark for the region that other buyers and sellers will follow. .

Trump Makes American Coal Great Again — Overseas President Donald Trump vowed to make U.S. energy dominance a cornerstone of his foreign policy, and, sure enough, the United States this year is producing and exporting record amounts of oil and natural gas. More surprising, though, is the huge resurgence in U.S. exports of coal to countries all over the world, from Argentina to Ukraine. It’s a big silver lining for the beleaguered coal sector that has seen production and exports steadily dwindle in recent years. But it’s not such great news for U.S. steelmakers, who are watching global rivals gobble up American coal to feed their steel mills — and who then turn around and export millions of tons of steel to the United States, prompting the Trump administration to levy tariffs on lots of imported steel.

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After several dismal years, U.S. coal exports surged by 60 percent last year to 97 million tons, not far from the record export numbers reached in 2012 when the domestic market for coal nosedived, according to new figures just published by the U.S. Energy Information Administration. Exports of both the kind of coal used for power plants and coal used for steelmaking surged, with double- or triple-digit growth to every continent. The top buyers of U.S. coal were India, South Korea, the Netherlands, and Brazil.

Coal Use Will Drastically Decline in Thirty Years The world’s reliance on energy sources like oil and coal, some of the main culprits behind pollution, is dwindling, according to the World Bank. “The model has been coal plus renewables, the model can be gas plus renewables. I think 10, 12 years from now, we will see renewables and storage and nothing more than that,” Riccardo Puliti, the World Bank’s global head of energy and extractives, told. In fact, coal usage may fall dramatically in coming decades, he said: “I think that coal in the next 30 years— we will see that it will go very much out of the energy mix more and more.” Despite Puliti’s prediction, a report released by China’s National Bureau of Statistics earlier this year said coal consumption rose by 0.7% in 2017 for the first time since 2013, mainly due to economic stimulus from the government. Furthermore, coal continued to constitute the largest energy source for China tipping over 60% of its energy mix. Perhaps even more worrying is the increase in global coal consumption last year after two straight years of decline, according to data released last month by the International Energy Agency. Nevertheless, Puliti said he is “extremely happy” about China’s rhetoric on combating climate change, he said.


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GOVERNMENT OF INDIA MINISTRY OF COAL LOK SABHA Q. No. 266. WORK EFFICIENCY OF COAL MINES 14.03.2018

Will the Minister of COAL be pleased to state:

(a)to(c): A statement is laid on the Table of the House. 6th POSITION Statement referred to in reply to parts (a) to (c) in respect of Lok Sabha Question No. 266 for reply on 14thMarch, 2018 asked by Shri Nishikant Dubey, MP regarding Work Efficiency of Coal Mines.

(a) the steps taken by the Government for increasing the work efficiency of coal mines in the country;

(a):CIL has taken the following measures to improve the work efficiency of coal mines:

(b) whether any strategy has been formulated to ensure supply of coal to plants from coal bearing mines situated near them; and

Planning for higher capacity mines with heavy mechanization to take advantage of economy of scale. Introduction of state of the art technology to improve its work efficiency with high capacity HEMMs like 42 cum Shovel with 240 T Rear Dumper. Introduction of Surface Miners in opencast mines to improve operational efficiency & cater to environmental needs. Introduction of In-pit crushing & conveying/In pit conveying.

SHRI NISHIKANT DUBEY:

(c) if so, the details thereof? ANSWER MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL)

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Introduction of mechanized mass production technology like powered support long wall technology and continuous miner in UG mines. Thrust on mechanization of coal winning/loading system by gradually phasing out manual loading by SDL/LHD loading, manual drilling into UDM drilling, haulage system of transport to conveyor system wherever feasible. Construction of silos with rapid loading system for faster loading. For survey/check measurements, use of technology like Terrestrial Laser Scanner (TLS). (b)&(c):With a view to optimize transportation cost, an Inter-Ministerial Task Force (IMTF) was constituted by Ministry of Coal for a comprehensive review of existing coal sources as also feasibility for rationalization of these sources. The IMTF recommended rationalization of existing sources on case to case basis for 19 Thermal Power Plants (TPPs) of Public Sector Undertakings (PSUs). This has resulted in rationalization of sources of 24.238 MT coal. In addition, an agreement was signed between Gujarat State Electricity Corporation Ltd. (GSECL) and National Thermal Power Corporation (NTPC) for swapping of 1.0 MT of domestic coal with imported coal. Further, CIL has rationalized sources of coal supply to TPPs of PSUs to the tune of 30.46 MT on the basis of the requests received from them. These have resulted in annual potential savings of Rs.3354 cr. Further, Government has permitted flexibility in utilization of domestic coal by allowing central/state utilities to use coal in such power plants to achieve overall reduction in cost of generation. In addition to the above, it has been decided that all Power Plants located within 20 Kms from Pithead shall construct elevated closed belt conveyor within next 2 years (up to 1st April 2020). Further, it is also decided that the power plants located within 40 Kms from Pit-head shall construct MGR within 3 years (up to 1st April, 2021). Power plants located beyond 40 Km and upto 100 Km., may also consider the option of MGR depending on the financial viability.

Will the Minister of COAL be pleased to state: (a) whether the Government has decided to allot 11 coal mines to Coal India Limited (CIL), if so, the details thereof; (b) whether the Coal India Limited is also planning to increase the production capacity by 225 million tonnes, if so, the details thereof; (c) whether CIL had informed the Government that its three subsidiaries do not have adequate coal reserves at present; and (d) if so, the details thereof and the reaction of the Government thereto? ANSWER MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL) (a) to (d): Coal India Ltd. (CIL) had requested the Government for allotment of additional coal mines so as to make its 3 subsidiaries viz. Eastern Coalfields Ltd. (ECL), Bharat Coking Coal Ltd. (BCCL) and Western Coalfields Ltd. (WCL), 100 MT plus coal producing subsidiaries as these 3 subsidiaries do not have adequate coal reserves at present. Considering the request of CIL, 11 coal mines have been allocated to CIL under the provisions of the Coal Mines (Special Provisions) Act, 2015 and the MMDR Act, 1957. Addition of these 11 coal mines will add about 225 MT of coal in its annual production capacity. The details of these 11 coal mines are as under:

Q. No. 4199. COAL RESERVES IN CIL 21.03.2018 SHRI A. ARUNMOZHITHEVAN:

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Sl. No Name of Coal Mine

Location

1

Amarkonda Murgadangal

Jharkhand

2

Brahmani

Jharkhand

3

Chichro Patsimal

Jharkhand

Rampia and Dip side of Rampia

Odisha

4-5

Ghogharpalli and 6-7 Dip Extension of Ghogharpalli

Name of Subsidiary company of CIL

ECL

the Nominated Authority for the conduct of auction of 13 coal mines for the specified end use ‘Iron & Steel, Cement and Captive Power Plants [excluding steel (coking)]’. In addition, direction of the Central Government has also been issued to the Nominated Authority for the conduct of auction of 6 coal mines for the specified end use ‘Production of iron and steel’. The state wise number of these coal mines are as under: Specified end use

WCL

State

Iron and Steel

1

Chhattisgarh

-

3

3

5

3

8

1

1

2

4

Jharkhand Madhya Pradesh Maharashtra

-

3

3

5

Odisha

-

1

1

6

West Bengal

-

2

2

Total

6

13

19

Odisha

8

Mandar Parvat

Bihar

2

9

Dhulia North

Jharkhand

3

10

Mirzagaon

Bihar

11

Pirpainti- Barahat

Jharkhand

Q. No. 4297. COAL NON-REGULATED

BCCL

BLOCKS FOR 21.03.2018

SHRIMATI RANJEET RANJAN: Will the Minister of COAL be pleased to state: (a) whether the Government has taken a decision sanctioned by the Cabinet Committee on Economic Affairs to allot coal blocks for non- regulated sectors such as steel, cement, aluminium, sponge iron through auction; (b) if so, the amount of revenue likely to be earned as a result thereof; (c) the State-wise number of coal blocks proposed to be auctioned in this way; and (d) the number of coal blocks auctioned to private companies along with the number in which production has started? ANSWER MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL) (a) to (c): Under the provisions of the Coal Mines (Special Provisions) Act, 2015, the methodology for fixing floor price for auction of coal mines for sectors like Steel, Sponge iron, Cement, Captive Power etc. has already been approved by the Government and an Order in this regard was issued on 26.12.2014. Direction of the Central Government has been issued to

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Non-regulated Sector Total [Excluding Steel(Coking)]

Sl. No

Amount of revenue likely to be earned from the auction of above coal mines is dependent on final bid price (Rs. / tonne) of the successful bidder and the quantity of coal extracted. (d): So far, 31 coal mines have been allocated by way of auction to the regulated as well as non-regulated sector under the said Act, out of which 30 have been allocated to the private sector companies. These 30 coal mines includes 5 coal mines (Gare Palma IV/7, Mandla North, Mandla South, Utkal-C and Mandakini) in respect of which notices towards termination of Coal Mine Development and Production Agreement (CMDPA)/ Vesting Order have been issued for violation of terms and conditions of Tender Document/ CMDPA. Out of the 31 auctioned coal mines, mining operations have commenced / mine opening permission granted in 13 coal mines (this includes 2 coal mines Mandla North & Mandla South).

Q. No. 4338. TRANSPORTATION OF COAL 21.03.2018 DR. KAMBHAMPATI HARIBABU: Will the Minister of RAILWAYS be pleased to state: (a) whether it is a fact that the train shortage in India


has left about 10 power stations without pare coal supplies and if so, the details of trains provided for supply of coal during the last three years; (b) whether the Government is considering to provide more number of rakes to supply coal and in turn earn more revenue; and (c) if so, the details of new rakes being procured for transportation of coal? ANSWER MINISTER OF STATE IN THE MINISTRY OF RAILWAYS (SHRI RAJEN GOHAIN) (a) No, Madam. (b) Keeping in view the critical importance of coal in the national economy, this segment is accorded a higher priority in supply of rakes over other bulk commodities. Coal loading has increased from 369.4 rakes/day in 2016-17 (April-February) to 383.8 rakes/day in 2017-18 (April-February). During February 2018, Indian Railway loaded 431.4 rakes/ day against 407.2 rakes/day in February 2016. (c) : Transportation of coal is predominantly done in BOXN and BOBR type of open wagons. During 201718 (upto February 2018), 4,358 BOXN and 667 BOBR wagons have been inducted by Indian Railways. As on 01.03.2018, there are pending orders of 4,155 BOXN and 362 BOBR type of wagons with wagon manufacturers.

Q. No. 5007. USE OF COAL GAS BY STEEL PLANTS 26.03.2018 DR. P. VENUGOPAL: Will the Minister of STEEL be pleased to state: (a) whether the Government is carrying out a technical assessment of methanol production and coal gasification process to make integrated steel plants more lucrative; (b) if so, the details thereof; (c) whether the Government has set up a task force to explore the feasibility of producing methanol from coal at Moazmbique and India, replacement of natural gas by coal gas steel plants and carbon dioxide capturing to produce methanol; and (d) if so, the details thereof? ANSWER THE MINISTER OF STATE FOR STEEL

(SHRI VISHNU DEO SAI) (a) Yes, Madam. (b) In pursuance of the decision of the Committee of Secretaries, an Apex Committee has been constituted under the Chairmanship of Dr. V.K. Saraswat, Member NITI Aayog to take forward the initiatives of methanol economy in India. Under this Committee, NITI Aayog has also constituted a Task Force on production of Methanol using high ash coal. The mandate of Task Force is to look into all aspects relating to feasibility of production of methanol using high ash coal including techno economic assessment of setting up demo plant for methanol production in the country and abroad. (c)&(d): Government of India has also constituted a Task Force on 28.12.2017 to explore (1) the feasibility of producing methanol from coal at Mozambique & India, (2) replacement of natural gas by coal gasification in steel plants and (3) Carbon-Di- oxide capturing from steel plants into methanol liquid fuel with the following Terms of Reference:a) Study feasibility of exploring coal mines to produce methanol. b) Explore the feasibility of using coal gas a replacement of natural gas in steel production. c) Examining the feasibility of transporting methanol to India and convert it into olefins, parafins and other chemicals. d) CO2 sequestration from steel plants into methanol liquid fuel. e) Any other related issue as felt necessary by the Task force. f) A detailed analysis of usage of methanol is also to be established by this task force. g) Technology of CO2 to methanol should be explored as an Indian Technology capability. h) Total benefits from CO2 sequestration into methanol and replacing Coal gas with natural gas to the steel sector to be quantified and established.

Q. No. 5309. FLEXIBLE MODE OF TRANSPORTATION OF COAL 28.03.2018 SHRI B. SRIRAMULU: Will the Minister of COAL be pleased to state: (a) whether the Coal Ministry is planning to adopt flexible mode of transportation using Roadways and Railways, both for easy evacuation of coal and if so, the details thereof; (b) whether the Government is aware that during the second tranche of linkage auc-

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tion of 15 million tonnes of coal, the mining companies could not conclude the fuel supply agreements since there were supply constraints from Mahanadi Coalfields Limited (MCL), South Eastern Coalfields Limited (SECL) and Central Coalfields Limited (CCL); (c) if so, the Government’s reaction thereto; (d) whether the CIL’s e-auction and linkage auction has not been in parity with its production and off take infrastructure; (e) if so, the details thereof; and (f) the other steps being taken by the Government for maximum utilization of coal resources? ANSWER MINISTER OF RAILWAYS AND COAL ( SHRI PIYUSH GOYAL) (a) : Coal is supplied to the Power Sector under Fuel Supply Agreement (FSA) as per the mode convenient to the Power Plant. For non-power consumers, a dispensation for change of mode from Rail to Road has been extended by CIL. (b) & (c) : In the second tranche of Linkage Auction for Non-regulated sector, 14.8 Million Tonnes of coal linkage was booked. Out of this booked quantity, FSAs of about 14 MT quantity have already been signed which is around 95% of the linkage quantity. For the balance 0.8 MT of coal linkage, the provisional successful bidders have to submit requisite documents with the company to overcome the deficiencies which have been found during the verification process. (d) to (f) : E-auction of coal and coal linkage are two different modes for coal supply. Through auction route, long term linkages are given to the consumers and subsequently FSAs are signed. For non-power consumers, FSAs are valid for 5 years and renewable for another term of five years, whereas for power sector, FSAs are valid for 20 years or till the end of plant life or period of Power Purchase Agreement (PPA), whichever is the earliest. E-auctions are generally conducted for shorter duration for the buyers with seasonal/periodic demand or in short term need of coal. Coal companies allocate fresh linkages through linkage auction or sell coal through e-auctions keeping in view various factors like production, existing commitments, logistics availability, evacuation infrastructure, market demand etc.

28 | CCAI Monthly Newsletter April 2018

Q.

No.

5438.

SUPPLY

OF COAL 28.03.2018

SHRI SATISH CHANDRA DUBEY: Will the Minister of Coal be pleased to state: (a) whether power companies have requested to reduce the supply of coal to them; (b) if so, the reasons therefore; (c) whether coal reserves available with the power companies have gone up to 1/6 of its annual production; and (d) if so, the details thereof along with the reasons therefor ? ANSWER MINISTER OF RAILWAYS AND COAL ( SHRI PIYUSH GOYAL ) (a): A number of Power Gencos had regulated their coal intake in 2016-17 and in the initial months of 2017-18 when demand for power was subdued while preferring to consume from their own stocks owing to comfortable stock position with them. The details of some of such Power Gencos are as under:

Name of Power Genco

% Materialization % Materialization against FSA during against FSA during 2016-17 2017-18 (1st Qtr)

RRVUNL (Rajasthan)

53%

23%

PSPCL (Punjab)

64%

66%

MPPGCL (Madhya Pradesh)

46%

51%

HPGCL (Haryana)

54%

24%

GSECL (Gujarat)

51%

68%

MAHAGenco (Maharashtra)

62%

77%

(b) to (d) : In 2016-17, pithead stock of CIL has increased to 68.42 MT on 31.03.2017 from 57.64 MT on 01.04.2016 mainly due to regulation imposed by a few Power Gencos as detailed above. On the other hand, coal stock at power house end depleted from 38.87 MT on 31.03.2016 to 27.63 MT as on 31.03.2017. As the coal production of CIL for the year 2016-17 was 554.14 MT, coal stock at power house end is much lower than one sixth of the annual coal production.


Q. No. 5497. PILFERAGE OF COAL 28.03.2018 GOVERNMENT OF INDIA MINISTRY OF COAL SHRI RAHUL SHEWALE : Will the Minister of COAL be pleased to state: (a) the mechanism put in place by the Government to check pilferage/theft of coal clandestinely from Coal India Limited and its subsidiaries in the country; (b) the number of raids conducted by the security personnel to unearth such pilferage/theft of coal along with number of officials of CIL and its subsidiaries found involved in such pilferage/theft across the country during each of the last three years and the current year, State/UT-wise and the action taken/ being taken by the Government in such cases so far; (c) whether the Government has received suggestions from various quarters to prevent such pilferage/ theft of coal across the country; (d) if so, the details thereof along with the action taken/being taken by the Government on such suggestions so far; and (e) the other steps taken/being taken by the Government to eliminate such pilferage/theft of coal from CIL and its subsidiaries across the country? ANSWER MINISTER FOR RAILWAYS AND COAL (SHRI PIYUSH GOYAL) (a) to (e) Theft / pilferage of coal are carried out stealthily and clandestinely. Various suggestions from Members of Parliament, various organisations and general public to prevent pilferage / theft of coal are received from time to time. The same are duly considered in the Ministry and systemic improvement measures for preventing theft / pilferage are conveyed to Coal India Ltd. and its subsidiaries for compliance. Following steps are being taken by CIL subsidiaries to check such incidents in future :-

Security Force (CISF). Regular FIRs are lodged by the Colliery Management and CISF with local Thana. At regular intervals interaction and liaison with District officials are made. Meeting with District Collector & other District Administrative Officials are held regularly. Challans for coal transportation by trucks outside the district are being issued after fixing hologram and putting signatures of authorized officials of CISF to check pilferage. Armed Guards have been deployed at Railway sidings.Escorting of coal rakes in coordination with Railway Protection Force [RPF] upto weighbridge, is arranged in pilferage prone areas. Surprise re-weighment of coal loaded trucks is done at weighbridges. Surprise checks / raids are conducted by flying squads of CISF/security department. Regular patrolling is conducted in and around the mine including over burden (OB) dumps. Joint patrolling with local police is also being carried out in pilferage prone areas. Check posts have been established at entry / exit points where all coal laden vehicles are physically checked. Security at coal dumps has been strengthened by fencing, proper illumination and round the clock guarding. As per the information received from Coal India Ltd., whenever any incident of theft / pilferage of coal comes to the notice of the coal companies, the Management of subsidiary companies lodges First Information Report (FIR) with local Thana to take necessary action. The status of conviction after reporting the case to local police is not easily available. The details of FIRs lodged in case of theft / pilferage of coal, subsidiary-wise and State-wise is as under :-

At strategic locations of all mines Radio Frequency Identification Device (RFID) based Boom Barriers & closed-circuit television (CCTV) camera at weighbridges, General Packet Radio Services (GPRS) based vehicle tracking system with geofencing, CCTV camera have been installed. A close watch on the activities of criminals is being kept by Central Industrial CCAI Monthly Newsletter April 2018

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State

2014-15

2015-16

2016-17

2017-18 (upto December, 2017)

West Bengal

27

116

241

105

Jharkhand

2

18

35

16

Jharkhand

9

9

10

9

West Bengal

0

0

0

2

Jharkhand

11

3

0

1

Madhya Pradesh

0

0

0

0

Uttar Pradesh

0

0

1

0

Maharashtra

13

6

19

11

Madhya Pradesh

0

0

1

0

Madhya Pradesh

2

0

1

1

Chattisgarh

1

6

1

2

Mahanadi Coalfields Ltd.

Orissa

4

0

1

0

North Eastern Coalfields

Assam

66

35

31

20

135

193

341

167

Company

Eastern Coalfields Ltd.

Bharat Coking Coal Ltd. Central Coalfields Ltd. Northern Coalfields Ltd.

Western Coalfields Ltd.

South Eastern Coalfields Ltd.

Coal India

Law & Order is a State subject, hence primarily; it is the responsibility of the State/District administration to take necessary deterrent action to stop/curb theft / pilferage of coal. The coal companies are working in close coordination with the State / local administration to prevent theft / pilferage of coal.

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GOVERNMENT OF INDIA MINISTRY OF COAL RAJYA SABHA Q. No. 1664. Supply of coal to power and non-power sectors 09.03.2018

117.10 MT in the corresponding period of 2016-17.

SHRIMATI VIJILA SATHYANANTH:

Q. No. 2462. Extraction of CBM by CIL 16.03.2018

Will the Minister of COAL be pleased to state: (a) whether it is a fact that truck transportation is one of several steps taken to increase coal supplies to power stations which has risen 6.8 per cent to 372 MT in the April-January period from 348 MT in the previous corresponding period; (b) whether it is also a fact that supplies to non-power industry has also risen 9 per cent to 103 MT during this period from 95 MT in the same period of 201617; and (c) if so, the details thereof? ANSWER

SHRI RAM KUMAR KASHYAP: Will the MINISTER OF COAL be pleased to state : (a) whether the Coal India Ltd. (CIL) has undertaken the work of extraction of Coal bed Methane (CBM) from its mines; (b) if so, the details and the targets thereof; (c) whether CIL has the required technology for extraction of CBM; and (d) if so, the details thereof and if not the steps being taken to enhance the CBM production from the coal mines of CIL? ANSWER

MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL)

MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL)

(a) : In order to meet the requirement of thermal power plants (TPPs), Coal India Limited (CIL) and Singareni Collieries Company Limited (SCCL) have offered coal through road mode from available pithead stocks to TPPs which are located within 50 kms to 60 kms from the nearest mine. As a result of these efforts, coal supply to power plants has been 457.36 MT during the period from April, 2017 to February, 2018 which is 7% growth over supply of 426.13 MT in the corresponding period of 2016-17.

(a) to (b): Coal India Limited (CIL) has taken initiatives to undertake the work of extraction of Coal Bed Methane (CBM) from its mining leasehold areas. The initial activities include assessment of CBM potentiality in subsidiaries of Coal India Limited to delineate CBM/ CMM blocks in Damodar Valley Basin. Accordingly one block each have been delineated in Jharia coalfields and Raniganj Coalfields. i) Jharia Coalfield (in BCCL): A CBM/CMM block has been delineated in BCCL mining leasehold with an area of 24 Sq. Km covering Kapuria, Moonidih, Jarma, Singra blocks. ii) Raniganj Coalfield (in ECL): A CMM block has been delineated in ECL mining leasehold within an area 57

(b) & (c) : CIL and SCCL have supplied 123.87 MT coal to non-power sector during the period April 2017 to February 2018 which is 6% growth over supply of

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Sq. KM covering Sripur, Satgram and Kunustoria areas. On receipt of modified guidelines from MoP&NG considering exemption of applicability of the Oilfield (Regulation and Development) Act, 1948 and Petroleum and Natural Gas Rules, 1959 within coal mining leasehold areas, further action will be initiated for extraction of gas and time line will be drawn accordingly. (c) to (d): CIL does not have the required technology for extraction of CBM. As such, a demonstration project was taken-up in Jharia coalfields. Further, for commercial exploitation, CIL is contemplating to extract CBM by engaging experienced developer/service provider through global tender.

Q. No. 2466. Coal collieries

16.03.2018

SHRI C. P. NARAYANAN: Will the Minister of COAL be pleased to state: (a) the total number of coal collieries in the country at present along with their annual production; (b) the number of them which are in Public and Private sectors; (c) the private collieries sanctioned during the last 10 years and 5 years, respectively; and (d) the number of collieries closed down ANSWER MINISTER OF COAL AND RAILWAYS (SHRI PIYUSH GOYAL) (a) to (b): The total number collieries in Coal India Ltd.(CIL) , Singareni Collieries Company Limited (SCCL), Public and Private sectors as on 31-03-2017 and total annual production from these mines during 2016-17 is given below. [Million Tonnes] Sector

Number of collieries

Production

Public

14

9.720

Private

21

34.076

Total

35

43.796

CIL

394

559.14

SCCL

48

61.34

(c) : The number of private mines for which opening permission was sanctioned during last 10 and 5 years respectively upto 31.03.2017 is given in Annexure-I (d) : Number of collieries closed down in CIL are as mentioned below

32 | CCAI Monthly Newsletter April 2018


Comp. 2008-09 2009-10 2010-11 2011-12

2012-13

ECL

-

-

-

BCCL

07

02

01

CCL

-

-

-

WCL

02

-

01

01

02

SECL

01

03

01

03

-

01

2013-14 2014-15 2015-16

2016-17

2017-18

Total

04

01

06

14

05

04

02

06

33

-

01

-

10

15

-

-

01

06

07

20

02

01

-

04

10

25

02

-

-

02

03

01

01

03

-

MCL

-

-

-

-

-

01

-

-

01

01

03

NEC

01

-

01

-

-

-

-

-

-

-

02

CIL

11

05

04

08

`10

04

06

10

14

40

112

In SCCL, a total 11 mines (underground-9 and opencast-2) are closed from the year 2008 to 2018 (up to Feb. 2018).

Annexure-I Opening permissions given to private companies during Last 10 years up to 31.03.2017 1.

Bhelatand Amalgamated Colliery (TSL)

01.01.2008

2.

Digwadih Colliery (TSL)

01.01.2008

3.

Jamadoba Colliery (TSL)

01.01.2008

4.

Sijua Colliery (TSL)

01.01.2008

5.

West Bokaro OCP-Quarry-SE Mine(TSL)

28.02.2008

6.

Parbatpur Central Coal Mine (ESCL)

17.02.2009

7.

Dharmasthal Coal Project (BLA Industries Ltd.)

07.05.2010

8.

Marki Mangli Coal Block (M/s B.S. Ispat Ltd.)

25.05.2010

9.

Kathautia OCM (M/s Usha Martin Ltd.)

02.06.2010

10.

Usha Coal Mine (Jayasawal Neco Industries Ltd.)

25.01.2011

11. Marki Mangli- III OCM (Shri Virangana Steels Limited)

26.07.2011

12. Marki Mangli-II OCM (Shri Virangana Steels Limited)

28.11.2011

13. Prism Coal Mine (M/s Prism Cement Ltd.)

21.03.2012

14. Ardhagram OCM (Sova Ispat Ltd.)

05.06.2012

15. Tokisud North (GVK Power Ltd.)

07.06.2012

16. Moher & Moher Amlohri Extn. OCP (M/s Sasan Power Ltd.)

10.07.2012

17. Amelia North (M/s Jaiprakash Power Ventures Ltd.)

20.08.2013

18. Mandla North UG Colliery (M/s Jayprakash associates Ltd.)

30.08.2013

19. Sarisatolli Coal Block (CESC Ltd.)

07.04.2015

20. Talabira I Coal Mine (M/s GMR Chattisgarh Energy Ltd.)

03.07.2015

21. Belgaon UG Coal Mine (M/s Sunflag Iron & steel company Ltd.)

07.04.2015

22. Gare Palma IV/IV (M/s Hindalco Industries Ltd.)

12.11.2015

23. Chotia -I OC Mine (BACL)

20.11.2015

24. Gare Palma IV/5 (HIL)

23.11.2015

25. Mandla South coal mine (JCCL)

25.01.2016

26.

07.03.2016

Re-opening Sial Ghogri Coal Mine (M/s Reliance cement company Pvt. Ltd.)

CCAI Monthly Newsletter April 2018

| 33


27.

Re-opening Kathautia OCM (M/s HINDALCO Industries Ltd.)

24.02.2017

Opening Permissions given to private companies During Last five Years up to31.03.2017 01. Amelia North (M/s Jaiprakash Power Ventures Ltd.)

20.08.2013

02. Mandla North UG Colliery (M/s Jayprakash associates Ltd.)

30.08.2013

03. Sarisatolli Coal Block (CESC Ltd.)

07.04.2015

04. Talabira I Coal Mine (M/s GMR Chattisgarh Energy Ltd.)

03.07.2015

05. Belgaon UG Coal Mine (M/s Sunflag Iron & steel company Ltd.)

07.04.2015

06. Gare Palma IV/IV (M/s Hindalco Industries Ltd.)

12.11.2015

07. Chotia -I OC Mine (BACL)

20.11.2015

08. Gare Palma IV/5 (HIL)

23.11.2015

09. Mandla South coal mine (JCCL)

25.01.2016

10. Re-opening Sial Ghogri Coal Mine (M/s Reliance cement company Pvt.Ltd.)

07.03.2016

11. Re-opening Kathautia OCM (M/s HINDALCO Industries Ltd.)

24.02.2017

Q. No. 2468. Opening up the Coal sector to private miners 16.03.2018 VENKATESH: SHRI ANAND SHARMA: Will the Minister of COAL be pleased to state: (a) whether it is a fact that Government has taken a decision to open up the Coal sector for commercial mining by private domestic and international miners; (b) if so, whether the decision will impact the exclusive rights of coal mining or monopoly of the State owned Coal India Limited; and (c) the benefits that will accrue to Coal sector from this decision?

Order in this regard has been issued on 27.02.2018. Auction of coal mines for sale of coal is expected to bring efficiency, competition and the best technology in the coal sector in the country. The investment is expected to create direct and indirect employment in coal bearing areas especially in mining sector and have an impact on economic development of these regions. As the entire revenue from the auction of coal mines for sale of coal would accrue to the coal bearing States, this methodology shall incentivize them with increased revenues which can be utilized for the growth and development of backward areas. This will ensure assured coal supply, accountable allocation of coal and affordable coal leading to affordable power prices for consumers.

ANSWER MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL)

Q. No. 2469. Protests against privatization of coal mining 16.03.2018

(a) to (c): Enabling provisions have been made in the Coal Mines (Special Provisions) Act, 2015 for allocation of coal mines by way of auction and allotment for the sale of coal. The methodology for auction for coal mines/blocks for sale of coal under the provisions of the Coal Mines (Special Provisions) Act, 2015 and the Mines and Minerals (Development and Regulation) Act, 1957 has been approved by the Government and

SHRI RAVI PRAKASH VERMA: SHRI NEERAJ SHEKHAR:

34 | CCAI Monthly Newsletter April 2018

Will the Minister of COAL be pleased to state: (a) whether Government has recently decided to privatize and auction the commercial coal mining in the country; (b) if so, the details thereof and present status thereof;


(c) whether various trade unions and employees of Coal India Ltd., the largest coal miner of the world, have protested against privatization of coal mining; (d) if so, the details thereof; and (e) the response of Government thereto? ANSWER MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL) (a) & (b): Enabling provisions have been made in the Coal Mines (Special Provisions) Act, 2015 for allocation of coal mines by way of auction and allotment for the sale of coal. The methodology for auction for coal mines/blocks for sale of coal under the provisions of the Coal Mines (Special Provisions) Act, 2015 and the Mines and Minerals (Development and Regulation) Act, 1957 has been approved by the Government and Order in this regard has been issued on 27.02.2018. A copy of the Order is attached with the reply.

ANSWER MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL) (a) to (d): Enabling provisions have been made in the Coal Mines (Special Provisions) Act, 2015 for allocation of coal mines by way of auction and allotment for the sale of coal. The methodology for auction for coal mines/blocks for sale of coal under the provisions of the Coal Mines (Special Provisions) Act, 2015 and the Mines and Minerals (Development and Regulation) Act, 1957 has been approved by the Government and Order in this regard has been issued on 27.02.2018, a copy of which is enclosed with this reply. The auction of coal mines for sale of coal shall be undertaken as per the aforesaid methodology. Terms and Conditions / modalities including eligibility criteria shall be decided as the same are part of Tender Conditions.

(c) to (e): A joint strike notice dated 14.03.2018 has been received from BMS, AITUC, HMS and CITU for a strike on 16.04.2018 against commercial mining. The Government is seized of the matter and discussing the same with the Unions.

Auction of coal mines for sale of coal is expected to bring efficiency into the coal sector due to increased competition and deployment of best possible technology into the sector. The higher investment will create direct and indirect employment in coal bearing areas especially in mining sector and will have an impact on economic development of these regions.

Q. No. 2470. Opening up of Coal sector to private entities 16.03.2018

The methodology gives highest priority to transparency, ease of doing business and ensuring that natural resources are used for national

SHRI D. RAJA: SHRI RITABRATA BANERJEE: Will the Minister of COAL be pleased to state: (a) whether it is a fact that Government has decided to open up the Coal sector to commercial mining by private entities; (b) if so, the details thereof and the reasons therefor; (c) whether this decision amounts to denationalisation of coal mines; and (d) if so, the measures proposed to be taken to address the associated issues like pricing, control on extracting limit, etc., to check any wrongdoings on the part of the private players?

development. There shall be no restriction on the sale and/or utilization of coal from the coal mine. The allocattee is required to comply with all applicable Laws and observe Good Industry Practice for the protection of the general health, safety, welfare, social security and minimum wages of employees engaged at the Coal Mine, including employees of any contractor or sub-contractor and of all other persons having legal access to the area covered by the Agreement. Further, in order to ensure safety of coal mines, Directorate General of Mines Safety (DGMS) under Ministry of Labour & Employment (MoLE) is the nodal agency, which administer The Mines Act, 1957, the Rules and Regulations made there under.

CCAI Monthly Newsletter April 2018

| 35


Q. No. 3251. Adoption of new technology for various coal sector activities. 23.03.2018 SHRI SANJAY SINGH: Will the MINISTER OF COAL be pleased to state : (a) Whether it is a fact that steps towards adoption of new technology for conversion of coal to fertilizer and methanol, exploration of Coal Bed Methane (CBM) and coal mine Methane (CMM) and underground coal gasification have not moved beyond the planning stage; and (b) if so, the details of all activities for adoption of new technology during the last three year-wise ? ANSWER MINISTER OF RAILWAYS AND COAL ( SHRI PIYUSH GOYAL) (a) &(b): The steps taken towards adoption of new technology for conversion of coal to fertilizer and methanol, exploration of Coal Bed Methane (CBM) and Coal Mine Methane (CMM) and underground coal gasification are as mentioned below: 1. NITI Aayog has set up two cells (1) on Coal Gasification & (2) on Methanol Economy, which includes production of methanol from coal. 2. The following strategy with time-line has been outlined: Stage 1: (2017-19): • R&D pilot plant to capture complete coal to methanol indigenous technology (Proof of Concept level). •Work on R&D on key areas having impact on costs. • Generation of blueprint for 100 tonne per day (tpd) plant. Stage 2: (2017-2023)

36 | CCAI Monthly Newsletter April 2018

• Establish 100 tpd plant • Generate blueprint for 1500-5000 tpd plants. Stage 3: (2023-2030) • Set up 1500-5000 TPD plants at different coal mine mouths • Achieve 40 Million Tonne per annum (MTPA) objective by 2030. 3. Coal India Limited (CIL) along with GAIL (India) Limited (GAIL), Rashtriya Chemicals and Fertilizers Limited (RCF) and Fertilizer Corporation of India Limited (FCIL), is involved in revival of the Talcher fertilizer plant through a JV company, Talcher Fertilizers Ltd. Lump-Sum- Trunkey (LSTK) NIT for Coal Gasification using Shell technology has been floated with bid submission date of 28th March, 2018. 4. CIL is engaged in exploring setting up of a commercial scale coal to methanol plant in the premises of its Dankuni Low Temperature Carbonization plant. Five coal gasification technologies have been pre- qualified through a global Expression of Interest (EOI). M/s Projects and Development India Limited (PDIL) has submitted Pre-Feasibility Report for implementation of the project in total Lump-Sum-Turnkey basis to Coal India Limited. 5. An area under mining leasehold of BCCL in Jharia Coalfield of Jharkhand has been identified for extraction of coal bed methane. Project Feasibility Report has been prepared based on techno-economic studies done by International Expert. 6. Ministry of Coal has reserved Dipside Tadkeshware & Dungra and Dipside of Valia & Rajpardi lignite blocks in Gujarat in favour of NLC India Limited (NLCIL) for the purpose of Underground Coal Gasification (UCG). NLCIL has invited bid for “Technical feasibility study and UCG Pilot Project” in these Lignite blocks.


Q. No. 3252. Shortfall in production of coal 23.03.2018 SHRI SANJAY SINGH: Will the Minister of COAL be pleased to state: whether it is a fact that yearly figures of actual coal production have been consistently falling short of production targets for more than six years; and if so, reasons therefor? ANSWER MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL) (a): The details of all India raw coal production against target and shortfall during the last six years are given below: Year

Annual Target

Actual

Absolute shortfall

2011-12

554.00

539.95

14.05

2012-13

574.40

556.40

18.00

2013-14

604.55

565.77

38.78

2014-15

630.25

609.18

21.07

2015-16

700.00

639.23

60.77

2016-17

724.71

662.79

61.92

All India coal production has increased from 565.77 MT in 2013-14 to MT in 2016-17. CIL has increased its production from 462.41 MT in 2013-14 to 554.14 MT in 2016-17. The increase of 91.73 MT in actual production achieved by CIL in the last three years took more than six years to achieve before 2013-14. (b): Reasons for non-achievement of target are due to issues relating to: Land acquisition. Forest Clearance. Environmental Clearance. Rehabilitation & Resettlement. Law & Order. Evacuation of coal.

CCAI Monthly Newsletter April 2018

| 37


MONTHLY SUMMARY OF DOMESTIC COAL Comparative Price of Domestic Coal: Power/Non-power. *The price shown in the Chart below is without: (a) Surface Transportation Charges. (b) State specific taxes. (c) Coal company or area wise charges if any. (d) Evacuation Facility Charges INR 50 per tonne w.e.f. 00:00 of 20.12.2017 GCV (Kcal/kg) (Mid-value)

G3-6400-6700

G5-5800-6100

G7-5200-5500

G10-4300-4600

G11-4000-4300

G12-3700-4000

Basic ROM price (Rs./te)

3144/ 3144

2737/2737

1926/2311

1024/1228

955/1145

886/1063

Tentative Ex-Mine Price*

4447/4447

3941/3941

2932/3411

1809/2063

1724/1959

1638/1858

— Coal — Coal India (CIL) will undertake commercial extraction of methane from all new mines holding substantial volume of the gas. Methane would be sold commercially before the company takes up coal extraction from these mines boosting bottom-line considerably. After the cancellation of coal mines auction twice, the government is exploring certain relaxations for bidders and plans to put on sale 19 blocks in the current quarter, a top official has said. The government had last year annulled the fifth round of auction on account of poor response from bidders. After postponing the introduction of the new Gross Calorific Value (GCV)-based billing mechanism for consumers, earlier scheduled for this month, Coal India is expected to have the new system in place by July. The government-owned behemoth was to switch to charging of consumers on this globally adopted system from April 1. Issues related to sampling and the billing procedure forced a postponement by a fiscal quarter. State-owned Coal India Ltd (CIL) said that it would put on offer a little over 45 million tonnes (MT) of coal under the special forward auction in the current fiscal.

— Railways — The Railways has achieved its highest-ever freight loading in fiscal 2018, supported largely by the additional transport of commodities such as coal, cement and containers. This has helped the Railways buck the gloomy trend of the previous two fiscals, when there was a downslide in ‘throughput’ — a common parameter that measures both loading and average distance. The Indian Railways is planning to buy 38,000 new wagons worth Rs 9,000 crore over the next three years in a bid to step up its game in goods transportation, according to a report. “Most of this procurement will be because the freight transportation by railways is gradually picking up. Some of it will be replacement as well as we plan to include higher capacity wagons to our fleet,” a senior railway ministry official told.

38 | CCAI Monthly Newsletter April 2018


— Power — Coal shortages have put state-run power generation and distribution companies in a tight spot operationally and financially, especially with a searing summer forecast by the Met Department. Distribution companies (discoms) are buying electricity from energy exchanges, where spot prices zoomed 58 % y-o-y in March and doubled over the previous month. Buying power at such high rates will hit the financial health of distribution companies and increase their monetary stress. The Central Electricity Authority (CEA) has revised the National Electricity Plan (NEP) after getting feedback from more than 30 state- owned and private institutions, mostly questioning the redundancy of coal. From retiring coal-based power completely, the CEA has said India would need 6,440 Mw thermal power during 2017-22. In the earlier version of the NEP, which was out in 2017, the CEA had said the country did not need coal-based capacity addition till 2022. The renewable energy sector missed its capacity addition targets for the second consecutive year in 2017-18; but this actually does not come as a surprise. Renewables capacity added was 11,754 MW in 2017-18, against a target of 14,450 MW. .—

Cement —

Cement prices tumbled in March. All-India average prices at March end were down by 4% yoy and 5% mom. However, on the positive wnote, there is an indication of 6-7% demand growth for the industry in March. Cement players have taken price hikes in April, however, sustainability remains a question. The cement industry is likely to register a flat growth of around 5 % in the current financial year despite a pick-up in demand in recent months and healthy outlook ahead, a report said. The profitability margins and debt metrics of the cement companies may also come under pressure in the coming quarters on higher petcoke, coal and diesel prices, ICRA said in its report. Improving prices and demand of cement in the southern states will lead to better profits for cement makers based in the region this year, said Rakesh Singh, president of Indian Cements Ltd.

— Steel — The world’s total crude steel production in February stood at 132 million tonne, up 3.5 percent from corresponding period last year as India grabbed the second position pushing Japan a notch lower. It is indeed gratifying for Indian steel industry to have completed FY18 with a consumption growth of 7.8%. Last year steel consumption rose by 3.1% and the year before last the growth was 5.8%. In the current year also till October 2017, the rise in steel consumption for the first 7 months was confined to 4.5%. Thus it was a case of late pushes since November 2017. The government will roll out a red carpet to big foreign players who want to set up greenfield steel projects and the country’s steel manufacturing capacity is expected to rise to 150 million tonnes by 2020. Steel Secretary Aruna Sharma said the sector provides huge growth potential against the backdrop of the country becoming the world’s second largest alloy producer with increasing consumption.

CCAI Monthly Newsletter April 2018

| 39


40 | CCAI Monthly Newsletter April 2018

0

274831.51

TOTAL

53.92

Source CEA

TOTAL

BHUTAN IMP

HYDRO

61.16

65.89

64.9

14

13

NUCLEAR

ACTUAL*

MAR-2018

1265000

PROGRAM

THERMAL

Category

130000

45293.42

HYDRO

BHUTAN IMP

5000

38500

6780

NUCLEAR

2

1091500

222758.09

1

101497

175

8657

2508

90157

3

PROGRAM

103455.04

93.13

7522.33

3216.38

92623.2

4

ACTUAL*

65.66

64.66

15

ACTUAL SAME MONTH 2017-18

103159.76

200.1

10185

3205.1

89569.56

5

ACTUAL SAME MONTH 2017-18

APR-2018

101.93

53.22

86.89

128.24

102.74

6

% OF PROGRAM (4/3)

AN OVERVIEW

53.92

61.16

16

PROGRAM

65.89

64.9

17

ACTUAL*

65.66

64.66

18

ACTUAL SAME PERIOD 2017-18

APRIL 2017 - MAR-2018

PLANT LOAD FACTOR (%)

Monitoring Target Capacity Apr 2018 to (MW) Mar 2019

THERMAL

Category

SUMMARY- ALL INDIA

100.29

46.54

73.86

100.35

103.41

7

% OF LAST YEAR (4/5)

101497

175

8657

2508

90157

8

PROGRAM

GENERATION (GWH)

ACTUAL*

103455.04

93.13

7522.33

3216.38

92623.2

9

PERIOD : APR-2018

103159.76

200.1

10185

3205.1

89569.56

10

ACTUAL SAME PERIOD 2017-18

101.93

53.22

86.89

128.24

102.74

11

100.29

46.54

73.86

100.35

103.41

12

% OF LAST % OF PROGRAM YEAR (9/10) (9/8)

APRIL 2018 - APR-2018

ENERGY GENERATION REPORT


MONTHLY SUMMARY OF IMPORTED COAL & PETCOKE Coal Price Index COAL

(kcal/kg)

Price - FOB

Price - FOB

Monthly Change (USD)

South Africa

6000 NAR

USD 91.83

INR 6038

4.61

South Africa

5500 NAR

USD 79.50

INR 5227

3.20

Australia

5500 NAR

USD 70.41

INR 4630

-7.25

Indonesia

5000 GAR

USD 61.45

INR 4040

-6.78

Indonesia

4200 GAR

USD 41.18

INR 2708

-5.05

PET COKE

Sulphur

Price

India-RIL(Ex-Ref.)

-5%

INR 8950

Saudi Arabia (CIF)

+ 8.5%

INR 7219 ($111)

USA (CIF)

- 6.5%

INR 7577 ($117)

Exchange Rate

Change (Monthly)

USD/INR 65.756

0.72

Coking Coal Price: Premium Low Vol

HCC 64 MID Vol

Semi Soft

Low Vol PCI

Mid Tier PCI

MET COKE 62% CSR

FOB Aus

CFR China

FOB Aus

CFR China

FOB Aus

FOB Aus

FOB Aus

CFR India

FOB N China

187.56

195.47

175.49

186.94

115.05

142.93

142.05

334.63

318.63

CCAI Monthly Newsletter April 2018

| 41


South Africa: South African coal of 5,500 kcal/kg NAR grade has been buoyed by tight supplies, while higher bids for the benchmark 6,000 kcal/kg NAR grade has also raised prices for lower calorific value coals, sources said. South Africa signed long-delayed renewable energy contracts worth R55.92 billion with independent power producers, in the first major investment deal under President Cyril Ramaphosa. South Africa relies on coal-fired plants for more than 80 % of its electricity generation, while renewables contribute around 7%. Transform RSA, which opposed Zuma’s removal as head of state, said it would continue to fight the renewable deals.

Australia: The two metallurgical coal export terminals on Australia’s Queensland coast, which closed due to Tropical Cyclone Iris, are expected to reopen, the state’s Department of Transport and Main Roads said. Coal miners are set to win the highest supply contract in six years from Japanese utilities after demand drove spot prices higher, according to Australia’s commodity forecaster.

Indonesia: Indonesia will delay until 2020 trade rules requiring exporters of coal and crude palm oil to use only Indonesian-flagged vessels, government officials said, putting off efforts to develop local shipping and save foreign exchange reserves. Rising Indonesian coal production and lower Chinese demand have pulled down Indonesian coal prices by 22% over the last 45 days, a trend that augurs well for plants that import fuel.

USA: After several dismal years, U.S. coal exports surged by 60 percent last year to 97 million tons, not far from the record export numbers reached in 2012 when the domestic market for coal nosedived, according

42 | CCAI Monthly Newsletter April 2018

to new figures just published by the U.S. Energy Information Administration. Coal production has risen slightly, about 6% last year, from 728 million tons in 2016 to 774 million tons in 2017, according to the U.S. Energy Information Administration. But analysts attribute the increase in part to the bankruptcy-caused restructuring of several major coal producers, which resulted in lower production costs.

Pet Coke: Government is considering a nationwide ban on the use of pet coke by various industries, as per media reports. The decision is likely to be taken within a month. If happens so, this will be a major blow to the cement companies. Global Petcoke Market research report gives a systematic and competent approach to gather important statistics of Global Petcoke industry. The research report analyses the historical as well as present performance of the Global Petcoke industry, and also interprets different market scenarios along with future market trends.

Shipping: Australia’s Queensland coal ports are returning to normal following Cyclone Iris, but forecast weaker April shipments after a rebound in exports from the four largest coal ports in March.

Freight rates for shipping coal from northern Qinhuangdao port to Zhangjiagang, Shanghai and Guangzhou in eastern and southern China continued to fall in the week, port operator Qinhuangdao Port said.


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PRODUCTION AND OFFTAKE PERFORMANCE OF CIL AND SUBSIDIARY COMPANIES (PROVISIONAL)

COAL PRODUCTION (Figs in Mill Te) SUB CO.

APR’18 AAP TARGET

ACTUAL

% ACH

% GROWTH

40.6 9.9 2.6 16.7 22.7 27.3 4.3 87.8 16.7

ECL

4.05

3.81

94

BCCL

2.97

2.44

82

CCL

4.5

3.6

80

NCL

8.04

7.96

99

WCL

3.14

3.4

108

SECL

11.39

12.86

113

MCL

12.71

10.72

84

NEC

0.05

0.05

101

CIL

46.83

44.84

96

OFFTAKE (Figs in Mill Te) SUB CO.

MAR’18 AAP TARGET

ACTUAL

% ACH

% GROWTH

33.3 13.7 12.6 14 25.2 6.7 9.4 26.1 12.9

ECL

4.25

4.17

98

BCCL

3.71

3.05

82

CCL

7.08

5.99

84

NCL

8.38

8.13

97

WCL

4.98

4.42

89

SECL

14.21

13.04

92

MCL

14.08

12.11

86

NEC

0.07

0.08

118

CIL

56.75

50.97

90

44 | CCAI Monthly Newsletter April 2018


WELCOME TO A FUTURE OF SEAMLESS LOGISTICS

INDIA'S BEST COAL HANDLING AGENCY We handle by rail annually

20 million tonnes of coal

We transport annually

25 million tonnes of materials

We operate from

48 locations all over india

We employ

1700 experienced personnel

Equipment & machinery

456 trucks / 161 dumpers etc. 52 excavators 52 loaders 14 cranes

Our three stockyards handle

3 million tonnes of steel annually

We have

over 50 years of experience

We enjoy

a spotless reputation

NARESH KUMAR & COMPANY PVT. LTD. 9B, WOOD STREET (5TH FLOOR), KOLKATA-700 016, INDIA Phone: + 91-33-22838070/ 71 / 72 / 73 / 74 / 76 /77 Fax: + 91-33-2283 8079 E-mail: headoffice@nkcpl.com Website: http://www.nkcpl.com


OVERALL DOMESTIC COAL SCENARIO Coal Production (in MT) Company

March, 2018

% Achievement

Target

Actual

CIL

68.7

72.3

SCCL

5.6

7.4

April- March, 2018

% Achievement

Target

Actual

105%

600

567.4

95%

131%

62.0

62.0

100%

Overall Offtake (in MT) % Growth

April – March, 2018

April – March, 2017

% Growth

52.4

5%

580.3

543.3

7%

6.5

-2%

64.6

60.8

6%

April – March, 2018

April – March, 2017

% Growth

Company

March, 2018

March, 2017

CIL

55.2

SCCL

6.4

Coal Despatch to Power (Coal and Coal Products) (in MT) % Growth

Company

March, 2018

March, 2017

CIL

42.9

40.1

7%

454.1

425.4

7%

SCCL

5.3

5.4

-0.3%

53.47

51.50

4%

Spot E-auction of Coal (in MT) Company

Coal Qty. Allocated March, 2018

Coal Qty. Allocated March, 2017

Increase over notified price

Coal Qty. Allocated April - March, 2018

Coal Qty. Allocated April-March, 2017

Increase over notified price

CIL

3.79

5.38

63%

55.17

53.70

66%

Special Forward E-auction for Power (in MT) Company CIL

Coal Qty. Allocated March, 2018

Coal Qty. Allocated March, 2017

Increase over notified price

Coal Qty. Allocated April - March, 2018

Coal Qty. Allocated April - March, 2017

Increase over notified price

0.00

5.40

-

28.93

41.07

27%

Exclusive E-auction for Non- Power (in MT) Company

Coal Qty. Allocated February, 2018

Coal Qty. Allocated March, 2017

Increase over notified price

Coal Qty. Allocated April - March, 2018

Coal Qty. Allocated April - March, 2017

Increase over notified price

CIL

0.33

1.49

22%

11.11

6.30

27%

Company

Coal Qty. Allocated March, 2018

Coal Qty. Allocated February, 2017

Increase over notified price

Coal Qty. Allocated April - February, 2018

Coal Qty. Allocated April - February, 2017

Increase over notified price

CIL

0.00

-

-

0.70

6.26

39%

Special Spot E-auction (in MT)

46 | CCAI Monthly Newsletter April 2018


REGISTERED

48

CCAI Newsletter April 2018  

Coal Consumers' Association Monthly Newsletter Aprill 2018

CCAI Newsletter April 2018  

Coal Consumers' Association Monthly Newsletter Aprill 2018

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