Ccai newsletter march issue

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Vol. XLVI No. 12 Published on : 28.03.2018

CCAI Monthly Newsletter March 2018

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From the Editor’s Desk Though the production of Coal India Limited has exceeded its target in March, 2018 but coal stock position at power plants has not improved. There is huge pendency of rakes and arrear is more than 5000 rakes in the Non-lapsable category.

Power demand is set to rise in summer but shortage of coal at the power plants may impact generation heavily. To overcome supply hurdles specially at the generation units, Coal India is looking to utilise road network for delivering dry fuel which may be beneficial to its customers. Coal Ministry has asked Railways to increase coal loading for power plants and it would be stepped up to 500 rakes per day for smooth functioning at the plants.

The winning bidders of Shakti Scheme have started getting coal in March and this has ended their long exercise to source domestic coal.

Though the import of coking coal has increased considerably in this fiscal compared to the last year, volatile international price has contributed to lower profit margin of the steel producers.

Coal Ministry and CIL are continuously monitoring the supply situation of the power plants which has not only improved but also boosted the morale of this sector. Introduction of new schemes like Uday, Shakti and Saubhagya have been paving the way for change and growth eventually.

Similarly it is imperative to address the coal supply issues of captive power plants and industries. Hopefully growth of CPP units would prove to be vital for power sector and increase in revenue of the industries would add to the National Exchequer.

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Content Vol. XLVI No. 12 March 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 39 |Energy Genaration Report 40 |Monthly Summary of Domestic Coal 41 |Monthly Summary of Imported Coal and Petcoke

42 |Global News 44 |Production and Offtake Performance of CIL and Subsidiary Companies CCAI Monthly Newsletter March 2018

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CONSUMERS’ PAGE Present Coal Scenario Coal India has produced 72.28 mt of coal in March 2018, exceeding its target of 68.68 mt for the month. Though it missed the production target of 600 mt for 2017-18 by producing 567.37 mt but 2.4 per cent growth has been achieved as compared to 554.13 mt of coal produced in 2016-17. Its offtake during FY 2017-18 stood at 580.28 mt also missing the target by three per cent.

Consumers’ Concern 1. Coal Stock Position

Though coal output of CIL has increased in March, 2018, there is still low coal stock position at power plants. An early onset of summer is expected to boost electricity consumption. To meet that demand, CIL is seeking more railway carriages and is also trying to ship the fuel through roads to some customers.

8. Third Party Sampling and Analysis for all consumers Third Party Sampling and Analysis facility will be provided to the consumers across the board from 1st April, 2018.

Large section of consumers were deprived of this facility which would be beneficial if execution is smooth and timely at the Subsidiary level.

2. Request for extension of the exemption of 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 5000 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 April, 2018 till the situation normalises.

9.Request to conclude FSAs by offering Secondary Source in absence of allotted grade at primary source In absence of required quantity from the primary source in Tranche III, Subsidiaries should expedite the conclusion of FSAs considering the secondary source.

3. GCV based Coal pricing Though Coal India has deferred GCV based billing system for the time being it is expected to commence within a month or two.

4. 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.

5. Huge Under loading Huge under loading even 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.

6. Overloading Customers have to pay penalty for overloading and that quite higher than the normal freight. Therefore loading should be done as per the chargeable carrying capacity fixed by the Railways.

7. 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.

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10. 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.

11. 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 12. Consumer informed that imported Indonesian coal is cheaper than pithead price of coal of certain mines of WCL According to a reputed industry consumer, certain varieties of WCL coal supplied to industries are costlier than imported Indonesian coal of same grades (GCV).

13. Refund of CST While depositing payment for coal value, consumers deposited CST @ 5% instead of CST @ 2% against C-Form at requisite Quarter-end. The refund against C-Form transactions is not released in time. However, till date many consumers in spite of their depositing ‘C’ form in time have not received refund of excess CST amount deposited by them.

14. Scarcity of Box-N Wagons Huge numbers of rakes are pending for the Non- regulated Sector till March 2018. Scarcity of rakes in certain zones specially unavailability of Box-N Wagons have been stated

POWER Coal shortage may impact power generation even as demand rises The peak power demand is set to rise with increase in average temperatures but coal supply is likely to be hit because of a shortage in production by top suppliers. Peak demand for power rose 15% to 157,000 MW in February over the year-ago period and would trend higher in the coming months. With the government likely to push for 24×7 supply in the pre-election year, meeting demand shortage is likely to continue.

Industry experts believe the situation will worsen if the right steps on coal allocation are not taken immediately. According to the data, there are 11 plants with critical stocks of less than seven days, while 14 plants have a super-critical stock of less than 4 days. On an average, the companies are supposed to have a critical stock of 21 days. Adequate inventory is key to maintaining power generation at present levels at the thermal power plants

Raise coal supply to 500 rakes per day to power plants: Minister to Railways As power plants face coal shortages, Coal Minister Piyush Goyal has asked Railways to increase coal loading to up to 500 rakes per day to meet power demand in summer, official sources said.

In a meeting, the minister took review of the coal stock at various power plants and coal loading by Indian railways.

“It was noted that more than 50 power plants had coal stocks less than the stipulated level,” official sources told.

It was decided that coal loading would be stepped up to 500 rakes per day from present 464 rakes per day to ensure power supplies are not impacted due

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to fuel shortage at the plants, the sources said.

Moreover, officials of coal ministry would be deputed to coal companies in order to ensure higher transportation of coal to the siding and faster loading of rakes.

Spot power price nearly doubles in past 1 month India’s daily average spot electricity price has nearly doubled over the last one month and is close to Rs 5 per unit, according to executives of India Energy Exchange, the country’s biggest electricity exchange.

The average price for evening peak was Rs 7.7 per kilowatt hour—one the highest in recent times.

A price of Rs 5 per unit is a six-month high. It had last crossed Rs 5 per unit in September, when power plants were facing coal shortage. “Daily average price declined gradually after September as the coal supply situation eased. Since then the price had remained subdued, at least till February, with sudden spikes though it did not touch Rs 5 per unit,” one of the executives cited earlier said.

“This time, the reason for spiralling price is a mix of rise in power demand, outages of a few large power-generating units in Gujarat and Haryana as well as inadequate coal supply to certain plants,” said Rajesh K Mediratta, director of business development at Indian Energy Exchange.

Long-term coal allocation auction: CIL starts supply After a long delay of nearly six months, Coal India has started supplying coal to some of the 10 power plants that won long-term coal allocation at the first such auction held in September last year. Coal India

would supply 27 million tonnes of coal annually to these companies.

“Respective CIL subsidiaries are in the process of signing fuel purchase agreements with all the successful bidders and we would be in a position to supply their allotted quantities to all bidders very soon,” Coal India chairman Gopal Singh said. “Supplies to some of the companies have already started.”

A senior power sector executive from one of the power companies said: “We received a letter of allotment in December and approached the Electricity Regulatory Commission in January for change in tariffs.

‘Saubhagya’ connections driving power demand, says Minister The demand for power in the country is on a rise as new consumers are being connected under the Saubhagya scheme, said RK Singh, Minister of State (Independent Charge) for Power and Renewable Energy.

“There has been a 6.5-7 per cent growth in power demand during the current fiscal compared to the last financial year. This is on the back of 35.96 lakh new households getting electricity connections under the Saubhagya scheme since October 2017,” said Singh.

Energy generation from conventional sources grew by 4.72 per cent to 1,160.141 billion units in the financial year 2016-17, according to data shared by the Ministry of Power.

A Power Ministry official said, “We are presently getting 275 rakes of coal. In the April-February period in the last financial year, 448 million tonne of coal was consumed by power plants.

Now, India is the third largest electricity producer ahead of Russia, Japan India’s electricity production grew 34% over seven years to 2017, and the country now produces more energy than Japan and Russia, which had 27% and 8.77% more electricity generation capacity installed, respectively, than India seven years ago.

India produced 1,160.10 billion units (BU) of electricity–one BU is enough to power 10 million households (one household using average of about 3 units per day) for a month–in financial year (FY) 2017. Electricity production stood at 1,003.525 BU between April 2017-January 2018, according to a February 2018 report by India Brand Equity Foundation (IBEF), a trust established by the commerce ministry.

With a production of 1,423 BU in FY 2016, India was the third largest producer and the third largest consumer of electricity in the world, behind China (6,015 BU) and the United States (4,327 BU).

With an annual growth rate of 22.6% capacity addition over a decade to FY 2017, renewables beat other power sources–thermal, hydro and nuclear. Renew-

CCAI Monthly Newsletter March 2018

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ables, however, made up only 18.79% of India’s energy, up 68.65% since 2007. About 65% of installed capacity continues to be thermal.

is known, the industry is not in the best of health, with plants facing low capacity utilisation due to less-than-expected growth in demand. Stressed assets in the sector comprising 34 private power plants have an outstanding debt of Rs 1.74 lakh crore.

Emission norms: How money is the fuel thermal plants lack Power crisis looms in Gujarat as With the country under an obligation to meet its Par- Adani, Essar stop supply is commitments and renewables representing the future of the power sector, India’s coal-based power plants —the backbone of power generation in the country — face the challenge of cutting down on their emissions by 2022 if they are to stay in business.

After the failure to meet the two-year deadline set in December, 2015 for compliance with new emission norms, power plants have been directed by the Central Pollution Control Board to meet the revised norms by 2022. The revised plan envisages installation of flue gas de-sulphurisation (FGD) units for 1,61,402 MW generation capacity and upgrade of electrostatic precipitators for 64,525 MW capacity.

Finance is the biggest hurdle in this exercise, especially at private plants. Power Minister RK Singh said recently capital expenditure on such installation would be in the range of Rs 88-128 lakh per MW. As

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A power surplus state till recently, Gujarat may witness a scorcher of a summer, with private power producers —Adani and Essar — discontinuing supply on account of paucity of coal. The situation forces the state to meet demand by procuring expensive power from energy exchanges and other sources. Gujarat Urja Vikas Nigam (GUVNL) has invited bids for procurement of 2,000 MW of power for April, May and June to meet rising demand. What have made matters worse is the early onset of summer which has led to a corresponding spike in demand. GUVNL has PPA of 2,000 MW with Adani Power, 1,000 MW with Essar Power Gujarat and 1,805 MW with Tata Power.

Essar discontinued supply from December 15 while Adani stopped supply from January 20 without any prior notice to GUVNL or the Gujarat Electricity Regulatory Authority (GERC).

“The current power scarcity is a result of Adani and Essar discontinuing power supply in violation of their PPAs. We are managing to meet demand by purchasing power from energy exchange and other open sources. As part of preparation to cater to upcoming summer demand, we are going to purchase 2,000 MW power under short-term PPAs,” a senior GUVNL official said.

During March, power demand has increased by 640 MW to about 14,890 MW per day and it will increase more when temperature rises further in coming months. At present, Gujarat is depending on central sources for power as its own power production is not sufficient to match the demand. About 53% of power supply comes from central sector sources. The state government has served notices to Adani and Essar for resumption of power supply. It may be mentioned that as per the terms of the PPAs, if any supplier discontinues supply for over a year, it would be declared a defaulter.

its “strong push” towards renewable energy especially solar, said the head of the International Renewable Energy Agency (IRENA).

“The main constrain in India right now is the grid,” said IRENA Director-General Adnan Z Amin. “There is a huge upsurge in investment,” he said of the renewable projects being implemented in the country.

India has set a target of 175 GW of renewable energy, including 100 GW of solar, to be installed by 2022.

Investment is not a constrained while a lot of companies are re-tooling their production capabilities, he noted. “I think renewable energy has a huge future in India and it is moving really very fast,” Adnan told after delivering a keynote address at the campaign launch of Singapore International Energy Week to be held from Oct 29-Nov 2, 2018.

Falling tariffs, 100-GW target, ‘India must strengthen grid infra hope of demand growth boost solar capacity to boost renewable energy’ India must strengthen grid infrastructure to support

India’s global commitments to cut its carbon footprint, falling solar rates and unlocking of potential energy demand through ‘24X7’ power schemes have been cited as the main reasons behind the record surge in solar power capacity addition in 2017.

Electricity production capacities added in the solar segment surpassed coal for the first time in 2017.

In fact, solar capacity added in the year (8,040 MW) was more than twice the net addition of coal power units (4,004 MW). While solar capacity reflects an annual increase of 95%, net addition of high-emitting generating capacities sharply dwindled by 75% — a screeching halt after years of aggressive addition (91,731 MW thermal units added against the original target of 72,340 MW in FY13-17).

The country aims to achieve the target of 175 GW (100 GW solar, 60 GW wind, remaining from small hydro and other sources) installed renewable power capacity by FY22. Karunesh Chaturvedi, corporate affairs head, Vikram Solar, said that renewables growth “is in line with India’s commitment to reduce carbon emission as well as makes India less vulnerable to risks posed by climate change”. About 40 GW of wind and solar generation units are to be auctioned by FY20, leaving a margin of two years to commission the projects within the deadline.

CCAI Monthly Newsletter March 2018

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Hydro power policy 2018-28: Government funding declines 34 pct The government has revised downwards the proposed size of the Centre’s funding of hydro power projects by way of 4% interest subvention by 34% to Rs 11,049 crore for the 2018-2028 period.

A modified hydro power policy draft being sent to the Cabinet by the power ministry also proposes to limit the benefit of interest subvention to government-owned projects, while private investors will be helped by transfer of funds equivalent to the interest subvention to their buyers, namely, then distribution companies (discoms).

Another change in the draft policy — the initial draft prepared by the ministry in early 2017 — is that infrastructure costs such as construction of roads, bridges, and flood moderation infrastructure that are not directly related to power generation should not be included to calculate electricity tariffs. This will make hydro power more affordable and competitive.

The government will set up a hydro power development fund (HPDF) to provide capital support in the form of interest subvention, sources said. Resources will be pooled from the existing power system development fund, national clean energy fund and nonlapsable central pool of resources (NLCPR) of department of north eastern region (DoNER), they said.

Grandiose plan: India needs to frame a realistic solar power policy By the end of 2017, it had almost 7 times that, or 20 GW, according to industry tracker Bridge to India, a renewable energy consultancy.

“India, which is being viewed as a key player in tapping solar energy, has pledged to generate 175 gigawatts (GW) of electricity in India from renewable energy sources by 2022”, said Indian Prime Minister Modi during his address at the summit.

A report from General Electric, which has operations in both renewable and conventional energy resources, said the Indian government has ambitious plans

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to boost oil and gas production, but has fallen short of its goals in the past. Greenko Energy issued senior notes and bonds to the tune of $1.5 billion, Azure Power raised over $500 million through a bond and ReNew Power raised close to $500 million via bond issues.

India set to achieve 20 GW solar energy capacities this fiscal itself: Govt India is close to achieving 20 GW grid connected installed solar power generation capacity this fiscal itself with 19.58GW already in hand till February end, Parliament was informed. “As on February 28, 2018, a grid connected solar capacity of 19.58 GW has been installed and the government is very close to achieving 20GW in 2017-18 itself of the the target set initially,” Power and New & Renewable Energy Minister R K Singh said in a written reply to Lok Sabha.

The government had revised the target of grid-connected solar energy capacities from 20GW to 100GW by 2022.

However, the minister said that at present, the indigenous manufacturing capacity is not adequate and therefore the country is dependent on both imported as well as domestically manufactured solar panels/ equipments.

The government has decided auction 30 GW solar energy capacities each in 2018-19 and 2019-20 to achieve 100 GW grid connected capacities by 2022.

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DOMESTIC Coal India eyes road route to augment supply to customers In order to overcome supply hurdles, state-run Coal India is looking at effective utilisation of road network to deliver dry fuel to customers, specially power plants, a source said.

With the rail network at its best carrying 320 rakes of fuel from coal pitheads to power plants every day, the road network can help boost supplies to power producers as a short-term measure.

“Coal India is ready to supply fuel through the network of roads. Coal India at present has a stock of 50 million tonnes (MT),” the source said. According to the company data, offtake during the April-February period was at 525 MT against the target of 541 MT.

Coal India’s new pricing may raise fuel cost, consumers complain Coal India’s new pricing system may raise fuel costs because the monopoly would end up charging for moisture content in consignments, its consumers have complained. But executives of the state-run miner said the new pricing would make an insignificant difference.

Coal India called consumers for a meeting to apprise them of its new pricing policy that would be implemented from April 1. The miner has been working on the new mechanism, which it says is a transparent system where consumers would only pay for the quality they receive. Under the proposed policy, Coal India will migrate to a system where prices would be determined on the basis of paisa per unit of energy for different grades of coal sold from April 1.

Coal India chairman Gopal Singh said the new sys-

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tem will bring in transparency and consumers would pay for what they receive in terms of quality.

Coking coal import increases to 43.53 million tonne The country’s coking coal import increased to 43.53 million tonne (mt) from 38.83 mt during the period April 2017 – February 2018, a jump of 12.10% over same period last year, according to mjunction, a leading e-commerce company.

The trend highlights India’s dependence on imported coking coal that has been the concern for steel and power sectors. These sectors essentially depend on low ash content coal, which is not abundant in India.

Low ash coal, which is used in blast furnaces and Basic oxygen furnaces of steel plants is thus largely imported from Indonesia, Australia and South Africa.

However, the fluctuations in prices of imported coking coal often eats into the profit margin of steel industry players. Given the problem, the steel industry has been groping for a dependable solution to meet the growing demand for coking coal.

CEMENT Lack of rail rakes, higher diesel prices to weigh on cement margins Despite the projection of an increase in cement prices over the next few months, the profitability of producers might stay under stress, with diesel prices projected to remain firm and lack of railway rakes to carry the finished product. Also, higher cost.

According to ratings agency ICRA, diesel prices last

month stood at Rs 61.8 a litre in Delhi. In the December quarter, it was about Rs 58 a litre.

despite Aditya Birla Group firm UltraTech Cement putting in a higher bid for Binani Cement.

“On a sequential basis, it is a three per cent increase, while on a year-on-year basis, the increase is seven per cent. Looking at the current trend, diesel prices will continue to remain firm, which might affect profitability,” said Sabyasachi Majumdar, senior vice-president at ICRA.

UltraTech is likely to challenge Dalmia Bharat Cement’s offer in the National Company Law Tribunal (NCLT).

However, analysts think cement prices are also expected to rise, relieving the stress at companies.

“Last year’s base, on account of demonetisation, is low. In a year-on-year comparison, prices are expected to firm up more,” a sector expert said.

Consolidation will help cement makers tackle excess supply: JK Cement chief Consolidation will help set right the supply overhang in the cement industry where profitability and capacity utilisation have remained subdued, Yadupati Singhania, chairman of JK Cement told.

“Consolidation in a way is good for the industry as it will take care of the excess supply,” said Singhania, one of the three patriarchs running the JK Group of companies that rose to prominence in the 1960s and 70s when it occupied the third position as an industrial conglomerate after the Birlas and the Tatas.

That said, the company is gearing for a string of brownfield and greenfield expansions even as it gets close to full capacity in its existing plants. In an environment of subdued investments, Singhania said company gets its confidence from the regional supply-demand gap, especially in the north where the cement maker is bringing up a new grinding unit close to Aligarh with an estimated investment of close to ?300 crore.

The CoC voting, which went for over four hours, approved the resolution plan proposed by Dalmia Bharat Cement, a source told. Binani Cement has debts of around Rs 40 billion and it is one of the rare cases where banks are not taking a haircut.

The NCLT asked Vijaykumar Iyer, the resolution professional for Binani Cement, to appear in person in the Tribunal to answer questions on the bidding process. UltraTech had moved the NCLT against the resolution professional and Deloitte for rejecting its bid for Binani Cement.

RAILWAY Rail Wagons: Bulk consumers to get their own With demand for wagons set to surge, the cashstrapped Indian Railways has prepared a policy blueprint allowing private investments in general-purpose goods carriages. The idea is that key users of the rail network — including the upcoming dedicated freight corridors (DFCs) — like coal and cement companies will invest in and own the wagons. The transporter will either offer discounts on freight to these bulk consumers or pay lease rentals to them. Currently, general purpose vehicles are leased in by the railways from its arm, Indian Railway Finance Corporation (IRFC), which gets rentals.

Although an estimate of the potential investments by the consumer-industries is yet to be made, it could run into tens of thousands of crores.

Dalmia Bharat set to buy Binani Cement; Ultra Tech likely to chal- Higher loading plan by CIL to lenge deal push railways’ freight volume After a series of controversies, the consortium led

by Dalmia Bharat Cement has received final approval from the Committee of Creditors (CoC) of Binani Cement to acquire the firm for Rs 67 billion, which includes a capital infusion of Rs 4 billion. This was

Going by the coal loading projections for Coal India (CIL) by the Ministry of Power, the Indian Railways is set to witness an incremental freight of 30-50 million tonne (MT) over the next three years on account of the fuel alone. The transporter is expected to carry CCAI Monthly Newsletter March 2018

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1,165 MT of goods in 2017-18. Coal accounts for nearly 60% of its freight revenue. The average coal loading by CIL for the current financial year is at 278 rakes/day. However, as per power ministry’s projection, loading will shoot up to 306 rakes per day in 2019-20, 327 in 2020-21, and 347 in 2021-22. One rake of coal loading per day translates to 1.4 MT of freight for a year. According to an official at the Ministry of Railway, the transporter will meet the growing demand of the coal sector.

STEEL

duction in the period was about 88.6 million tonnes.

Currently, Indian prices are around $650 a tonne; in the US, close to $900 a tonne. Europe’s steel is about $750 a tonne and so is South Korea’s and some other Asian countries, said industry officials.

Industry officials think encouraging economic indicators in India could also push domestic demand.

The country’s industrial production growth in January was 7.5 per cent, from 7.1 per cent the previous month. Manufacturing, in general, grew 8.7 per cent.

The Centre had amended the IBC last year to keep defaulting promoters out of the resolution process.

Steel exports expected to remain strong on back of higher global Increased coal usage a serious prices setback for carbon reduction in India’s steel exports are expected to remain strong, Indian steel industry: Moody’s on the back of higher global prices, amid falling Chinese shipment as Beijing focuses on cutting around 30 million tonnes of excess annual capacity, to curb air pollution.

Exports during the first 10 months of this financial year jumped 40.2 per cent from same period last year, while domestic consumption grew 5.4 per cent. Pro-

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Global rating agency Moody’s said that Indian steel industry is yet to introduce more stringent emission regulations, and an increase in coal usage poses a serious limitation to the potential for carbon reduction.

The global steel industry’s progress in reducing emis-

sions and energy use continues to be limited. The challenge for the industry will be to lower carbon intensity at a time when demand for steel is forecast to grow 31 per cent by 2030, from 2016 levels.

The World Steel Association reports CO2 intensity has increased by more than 10 per cent, to 1.9 tonnes per tonne of steel manufactured over the past decade, while energy intensity has fallen modestly.

Domestic steel companies to urge Centre for anti-dumping duty revision Primary domestic steel producers will ask the government for a mid-term review of the anti-dumping duty on hot- and cold-rolled steel products in the wake of a sharp rise in raw material prices since the duty was imposed in August 2016. “The raw material price increase from August 2016 to March 2018 has been significant and India needs to correct this gap by revising the duty upward to the extent that it reflects the cost push,� one of the petitioners of anti-dumping told.

Essar Steel, state-owned Steel Authority of India, and

Sajjan Jindal-led JSW Steel had jointly filed a petition to the government, seeking for relief from cheap imports being dumped by neighbouring countries such as Korea, Japan, China, Brazil, Russia and Ukraine.

The application was also supported by Bhushan Steel and Tata Steel.

US tariff on steel to impact Indian companies The Indian Steel Association (ISA), which represents large private and public sector steel players in the country, has said that the US move to impose 25% tariff on steel imports is likely to trigger major shifts in existing trade flows of steel and steel products globally. It has warned that imposition of tariffs in the US will inevitably force major steel producing countries to divert part of their exports to major steel consuming centres like India. This could distort the domestic market considerably by raising the threat of imports.

Indian steel producers already face 16 trade barriers, which include 10 anti-dumping duties and six countervailing duties in the US, the statement said. This includes corrosion resistant steel, cold rolled flat steel items, certain hot rolled steel products and cut to length carbon steel plates making it nearly impossible to export to the US.

CCAI Monthly Newsletter March 2018

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With Best Compliments From:

Sharda Ma

( )

COAL MERCHANTS, IMPORTERS & HANDLING AGENTS INDIA SOUTH AFRICA INDONESIA SINGAPORE HONG KONG NIGERIA

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 Indonesia’s protectionist shipping rule worries coal importers Indonesia’s decision to mandate the use of domestic shipping companies handling the country’s key export commodities of coal and palm oil has drawn criticism, as well as a warning that it will drive up freight costs and hurt the country’s economy in the end.

Indonesia is the world’s top exporter of thermal coal, a type of coal used widely for power generation. Japan sourced 32.07 million tons, or 17% of its coal imports, from the Southeast Asian country last year.

It now seems that the regulation will be delayed and not take effect in late April as planned. Nevertheless, strict enforcement would have a substantial impact on Japanese shipping companies.

“If we tolerate this regulation, other countries may make similar moves,” an official at the Japanese Shipowners’ Association said.

Indonesia caps domestic coal price at $70 per ton for two years: media Indonesia has moved to cap prices of domestic coal for power at $70 per ton for two years, the Energy and Mineral Resources Minister said. The government plans to keep electricity tariffs unchanged this year and next, and the cap on thermal coal for power is intended to shield state-owned utility Perusahaan Listrik Negara (PLN) from price fluctuations.

“We’ve fixed prices for every transaction at $70 per ton or HBA, whichever is lower,” Energy Minister Ignasius Jonan said on the sidelines of an industry event in Kalimantan. Jonan was referring to the monthly Indonesian Coal Benchmark Price (HBA), which was

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set last week at $101.86 per ton for the month of March, its highest since May 2012.

The new rule will be applied retroactively to Jan. 1, 2018, and will be reviewed in December 2019.

Energy security linked to Thar coal deposits Thar coal deposits will be key to future energy requirements in the country, a provincial government official said. “Pakistan’s energy security is based on Thar coal deposits,” Sindh Chief Minister Syed Murad Ali Shah said at the Sindh Development Forum, 2018, organised by the Sindh Planning and Development Department.

The forum was also supported by the United States Agency for International Development (USAID) and other development partners. Shah said that 75 percent of the mining work at the Thar coal deposits has been completed. “Formal announcement of completion of 75 percent work will be announced at a ceremony next month,” he added.

The chief minister said the provincial government is also working on other alternative energy resources, adding that the province is establishing wind energy projects also.

One of the dirtiest oil sources going green; Alberta closing coal plants One of the most aggressive campaigns to fight global warming is happening in a Canadian province.

There’s just one problem: the same place is also home to some of the dirtiest oil in the world. Alberta is boosting its use of renewable energy, closing pow-

er plants that burn coal and in January increased its tax on carbon emissions by 50 per cent, moves that will help Canada curb emissions under the global Paris climate agreement. However, the province is also increasing output from its vast reserves of oil sands, a gooey fossil fuel that produces more than twice as much carbon dioxide during extraction and processing than the North American average.

the first time in a decade that both resources faced declines.

This kind of dual personality underscores the dilemma faced by oil producers that are also seeking to control air pollution.

Canada in 2011 pulled out of an earlier international climate deal, the Kyoto Protocol, after its oil sands drove up carbon emissions. Alberta’s newly increased carbon tax affects coal and natural gas-fired power plants, but doesn’t apply to its $36-billion oil extraction industry.

Just over 11 gigawatts of power generation was retired last year, including 6.3 gigawatts of coal and 4 gigawatts of natural gas -- mostly of steam turbines.

Despite these shifts, natural gas remains at the top of the U.S.’ list as a fuel source. The country also added 9.3 gigawatts of natural-gas capacity in the last year -- mostly from combined-cycle units. But the current reign of natural gas comes alongside growing consideration of a gas-free future.

Natural Gas and Coal Generation Fell in 2017, While Renewable Energy Grew

While environmentalists have long decried what many have called a “bridge fuel,” utility commissions in forward-looking states are also now starting to strategize about how to leave natural gas behind. .

Natural-gas power generation in the U.S. saw its biggest annual decline yet in 2017, with net generation from the resource dropping 7.7 percent. Coal generation also fell, at a more modest 2.5 percent, marking

US slaps anti-dumping duty on steel wire imported from India, China

At the same time, data from the Energy Information Administration (EIA) showed net generation from utility-scale clean energy sources, excluding hydro, grew by 13.4 percent. Meanwhile, total U.S. net generation fell by 1.5 percent last year.

CCAI Monthly Newsletter March 2018

| 21

The US has decided to slap anti-dumping duty on stainless steel flanges imported from India and China after it found in its preliminary probe that both the countries provided subsidies to the exporters.

President Donald Trump had earlier this month imposed heavy tariffs on imported steel and aluminium which he said were necessary to boost the US industry suffering from “unfair” business practices, a move that has sparked fears of a global trade war.

The Department of Commerce has found that exporters from China and India have sold stainless steel flanges in the US at 257.11 per cent and 18.10 to 145.25 per cent less than fair value, respectively, according to an official statement issued.

Following this decision, the commerce department will instruct the US Customs and Border Protection (USCBP) to collect cash deposits from importers of the stainless steel flanges from China and India, based on these preliminary rates, it said.

In 2016, imports of stainless steel flanges from China and India were valued at an estimated USD16.3 million and USD32.1 million, respectively.

Cabinet defends coal plant proposal: Taipei The Cabinet defended a controversial plan to reactivate the coal-fired Shenao Power Plant in New Taipei City’s Rueifang District, saying the clean coal technology to be employed could help lessen the environmental impact of the plant.

State-run Taiwan Power Co’s (Taipower) plan to “restart and upgrade” the plant, which was decommissioned in 2007 and torn down, was approved last week. The planned use of coal-fired generators has sparked environmental concern, although the Taipower has proposed using ultra-supercritical power generation technology to reduce emissions.

Cabinet spokesman Hsu Kuo-yung said that “clean coal technology” is an academic term describing coal-fired power generation technologies with lower harmful emissions levels comparable to those of natural gas-fired power plants.

The billion dollar bet on European coal Czech energy magnate Pavel Tykac is ready to spend 1 billion euros ($1.2 billion) of his own cash on aging coal and gas-fired power plants across Europe.

He’s betting the dirty generators will be needed for decades to supplement the green power that’s taking

22 | CCAI Monthly Newsletter March 2018

a bigger role at utilities from Germany to Britain.

“The media bubble around clean energy doesn’t reflect reality,” said Alan Svoboda, an executive director of Seven Energy, the utility and lignite miner owned

by Tykac. “Our fundamental assumption is that these conventional assets will be needed in the near future to balance the grids.”

Governments across Europe are stepping up efforts to reduce pollution by phasing out coal use, unsettling the outlook for conventional power generators. RWE AG, Germany’s biggest energy producer, just added green generation assets to its fleet of coal plants in the utility industry’s biggest shakeup in years.

Coal prices up says Minerals Council: NSW of Australia NSW thermal coal exports were at near-record levels last year but prices were up, the Minerals Council of NSW has said after appraising annual statistics provided by the industry body Coal Services.

The council’s chief executive, Stephen Galilee, said NSW thermal coal exports topped 140 million tonnes in 2017, only just below 2016 volumes and more than 15 per cent higher than they were in 2012.

Thermal coal is used in power stations, while higher-energy coking coal – often found in the same deposits – is used in steelmaking.

“Coal is our state’s most valuable export so it’s great for the NSW economy that demand for our thermal coal continues to be strong,” Mr Galilee said.

He said growth in demand was led by China, which lifted its imports of NSW coal by almost 10 per cent to 23.7 million tonnes.

CCAI Monthly Newsletter March 2018

| 23

GOVERNMENT OF INDIA MINISTRY OF COAL LOK SABHA Q. No. 1859. Coal Reserves

07.03.2018

(d) if so, the details thereof including the salient features thereof;

SHRI MOHITE PATIL VIJAYSINGH SHANKARRAO: SHRI SATAV RAJEEV: DR. HEENA VIJAYKUMAR GAVIT: SHRI NISHIKANT DUBEY: SHRI DHANANJAY MAHADIK: SHRI P.R. SUNDARAM: SHRI RAVINDRA KUMAR PANDEY: DR. J. JAYAVARDHAN:

(e) whether the view of the various stakeholders have been obtained before setting up of Coal Regulatory Authority and if so, the details thereof and the time by which the authority is likely to be set up; and

Will the Minister of COAL be pleased to state: (a) the total quantum of coal reserves in the country at present, State-wise along with the annual consumption of coal during the last three years; (b) whether coal resources of the country are being developed in an optimal manner and if so, the details thereof including the steps taken in this regard during the last three years; (c) whether the Government proposes to set up a Coal Regulatory Authority in the country;

24 | CCAI Monthly Newsletter March 2018

(f) the steps being taken by the Government to find out the alternative source of energy so as to reduce dependency of coal?

ANSWER MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL) (a) The total estimated coal resources in the country is 315.149 billion tonnes as per “The inventory of Geological Resources of Indian Coal” (as on 01.04.2017), prepared by the Geological Survey of India. The total coal extracted from the coalfields of

India during 2016-17 is 655.31 million tonnes and since 1950 upto 2016-17 is around 14438.22 million tonne.

(As per Coal Controller, MoC, Govt. of India). Every year about 3 to 5 billion tonnes of resources are being added through fresh exploration to the Coal Inventory of India.

STATEWISE GEOLOGICAL RESOURCES OF COAL IN INDIA AS ON 01.04.2017 (AS per GSI Inventory) Category-wise Coal Resources (in Million Tonnes) STATE

Measured (Proved)

Indicated

13723

12954

4990

31667

0

0

1354

1354

WEST BENGAL BIHAR

Inferred

Total

JHARKHAND

44341

31876

6223

82440

MADHYA PRADESH

11269

12760

3645

27673

CHHATTISGARH

19997

34462

2202

56661

UTTAR PRADESH

884

178

0

1062

MAHARASHTRA

7038

3158

2063

12259

34810

34060

8415

77285

0

1149

432

1581

ORISSA ANDHRA PRADESH TELANGANA

10402

8542

2520

21464

SIKKIM

0

58

43

101

ASSAM

465

57

3

525

ARUNACHAL PRADESH

31

40

19

90

MEGHALYA

89

17

471

576

NAGALAND

9

0

402

410

143058

139311

32780

315149

GRAND TOTAL

Year wise annual coal offtake/supply for the last three years is as follows: ( Year Offtake(Mt.)* * *Source-Coal Statistics of CCO)

2014-15

2015-16

2016-17

603.772

632.442

650.319(Prov.)

(b): Based on the coal demand projected by NITI Aayog and Ministry of Coal, project reports (PRs)/ Mining Plans are prepared for optimal development of the coal block with the available mining technology suitable for the block. The list of project reports prepared by CMPDI for the subsidiaries of Coal India Limited during last 3 years is enclosed as Annexure. (c), (d) & (e): The issue of Coal Regulatory Authority has to be examined keeping in view the legislative developments that took place after the cancellation of the coal blocks allocated through the Screening Committee route since 1993 by the Hon’ble Supreme Court in 2014. The decision in the matter is yet to be taken. (f): As an alternative energy source, the Government has up-scaled the target of Renewable Energy capacity to 175 GW by the year 2022, which includes 100 GW from solar, 60 GW from wind, 10 GW from Bio-power and 5 GW from Small Hydro power. So far a total of 64.31 GW capacity has been installed through the implementation of various renewable energy schemes/ programmes upto 31st January 2018 which includes 32.88 GW from Wind, 18.45 GW from Solar, 8.53 GW from Bio-power and 4.45 GW from Small Hydro Power. To promote

CCAI Monthly Newsletter March 2018

| 25

the production of renewable energy through various schemes/programmes, the Government has taken various steps which inter alia includes:i) Announced a cumulative target of 175 GW renewable energy based electric installed capacity by 2022; ii) Issued guidelines for procurement of solar and wind power through tariff based competitive bidding process; iii) Declared Renewable Purchase Obligation (RPO) up to the year 2018-19; iv) Declare Renewable Generation Obligation on new coal/lignite based thermal plants; v) Notified National Offshore Wind Energy Policy; vi) Notified policy for Repowering of Wind Power Projects; vii) Notified standards for deployment of solar photovoltaic systems/devices; viii) Issued order for waiving the Inter State Transmission System charges and losses for inter- state sale of solar and wind power for projects to be commissioned by March 2019.

Annexure PRs prepared by CMPDI for CIL subsidiaries during 2015-16 to 2017-18 (up to 28 Feb 2018) Sl. No.

Name of PR

Subsidiary

OC/ UG

Capacity (Mty)

PR Submsn Date

1

Belbaid Parasea

ECL

UG

1.83

Nov-15

2

Chaudhar Gariapani Kayada OC

ECL

OC

4.00

Mar-16

3

Ghusick UG/OC (OC-0.7,UG-1.5)

ECL

UG

1.55

Jun-16

4

Jhanjra Combined

ECL

UG

3.50

May-15

5

Kottadih OC Expn PR

ECL

OC

1.60

Sep-16

6

Mohanpur Expn. Ph-II

ECL

OC

2.50

Jan-16

7

Naba Kajora Madhabpur UG

ECL

UG

1.44

Oct-16

8

Nakrakonda Kumardih B OC

ECL

OC

3.00

Apr-15

9

Narainkuri OC

ECL

OC

2.50

Mar-17

10

North Searsole OC

ECL

OC

2.00

Jun-16

11

Sarpi UG (Expn. PR)

ECL

UG

1.41

Mar-17

12

Siduli OC+UG

ECL

UG

1.55

Dec-16

13

Siduli UG

ECL

UG

1.63

Oct-17

14

Tilaboni UG

ECL

UG

1.86

Aug-15

15

Block-VIII OC

BCCL

OC

2.00

Mar-17

16

Chandrapura Block

BCCL

OC

1.50

Jul-16

17

Amrapali Expn OC

CCL

OC

25.00

Dec-15

18

Ashok OC Expn

CCL

OC

22.00

Mar-17

19

Asnapani (East) UG

CCL

UG

0.72

Mar-16

20

Bhurkunda OC

CCL

OC

3.50

Mar-16

21

Chandragupta OCP

CCL

OC

15.00

Mar-17

22

Hindegir OC

CCL

OC

4.00

Mar-17

23

Jaridih OC

CCL

OC

1.00

Feb-16

24

Kabribad OC

CCL

OC

0.60

Mar-17

26 | CCAI Monthly Newsletter March 2018

25

Konar Expn

CCL

OC

8.00

Aug-15

26

Konar Expn

CCL

OC

8.00

Aug-17

27

Piparwar UG Ph-1

CCL

UG

0.87

Jun-17

28

Religara OC

CCL

OC

2.00

Feb-16

29

Urimari OC

CCL

OC

4.00

Mar-17

30

Bhanegaon OC

WCL

OC

1.00

Nov-16

31

Chinchala-Pisgaon OC

WCL

OC

2.50

Mar-17

32

Durgapur OC RPR

WCL

OC

3.00

Aug-16

33

Gandhigram UG

WCL

UG

1.20

Oct-15

34

Gokul OC RPR

WCL

OC

1.50

Nov-16

35

Gouri Central OC

WCL

OC

5.00

May-16

36

Konda-Hardola OC

WCL

OC

7.00

Aug-17

37

Kumbharkhani UG to OC

WCL

OC

1.50

Mar-16

38

Pauni II & III Combined

WCL

OC

3.25

Jun-15

39

Sangam UG

WCL

UG

4.00

Jan-18

40

Saoner II UG to OC

WCL

OC

2.50

Mar-16

41

Saoner-I UG to OC

WCL

OC

1.30

Mar-16

42

Sharda UG

WCL

UG

0.42

Jul-15

43

Silewara Deep UG

WCL

UG

3.20

Jan-18

44

Thesgora UG to OC

WCL

OC

2.50

Mar-17

45

Vishnupuri UG to OC

WCL

OC

2.00

Feb-18

46

Batura West OC

SECL

OC

1.50

Feb-18

47

Bodri UG

SECL

UG

1.52

Feb-18

48

Chimtapani-Porda Combined OC

SECL

OC

15.00

Nov-17

49

Chirimiri Expn OC

SECL

OC

2.00

Aug-15

50

Damini UG to OC

SECL

OC

1.50

Mar-17

51

Gevra Expn (35 to 70 Mty)

SECL

OC

70.00

Jun-15

52

Mahamaya

SECL

OC

1.50

Mar-17

53

Rampur Batura OC

SECL

OC

4.00

Oct-17

54

Sayang OC

SECL

OC

17.00

Oct-17

55

West Jhiria OC

SECL

OC

1.50

Mar-16

56

Block-B Expn

NCL

OC

8.00

Dec-15

57

Dudhichua Expn OC

NCL

OC

20.00

May-16

58

RCE for Nigahi OC

NCL

OC

15.00

Aug-15

59

MCL

OC

20.00

Oct-15

MCL

OC

15.00

Mar-17

61

Bharatpur Reorganisation Lajkura OC Expn (incl. lower seams) Samaleshwari Expn (20 Mty)

MCL

OC

20.00

Apr-15

62

Jagun OC

NEC

OC

0.50

Oct-17

63

Lekhapani OC RCE

NEC

OC

0.25

Jun-16

64

PQ OC

NEC

OC

0.15

Aug-17

60

CCAI Monthly Newsletter March 2018

| 27

Q. No. 2277. IMPACT OF COAL AND FREIGHT PRICES ON THERMAL POWER PLANTS 08.03.2018 SHRI ADHALRAO PATIL SHIVAJIRAO: DR. SHRIKANT EKNATH SHINDE: SHRI VINAYAK BHAURAO RAUT: DR. PRITAM GOPINATH MUNDE: SHRI ANANDRAO ADSUL: Will the Minister of COAL be pleased to state: (a) whether the thermal power plants are suffering due to hike in railway freight and thermal grade coal prices, if so, the details thereof along with the percentage of price of thermal grade coal and freight hiked recently and the impact of the aforesaid hikes on the generation cost of thermal power plants; (b) whether the thermal plants are operating at lower load due to rising demand for renewable power, if so, the details thereof; (c) whether hike in coal and railway freight costs is a blow on the operations of the coal based units and the plants without long-term Power Purchasing Agreements (PPAs) have suffered the most, if so, the details thereof; and (c) the extent to which the price of per unit procurement for discoms at all India level has increased and its impact on the consumers?

ANSWER THE MINISTER OF STATE (INDEPENDENT CHARGE) FOR POWER AND NEW & RENEWABLE ENERGY ( SHRI R. K. SINGH ) (a) : No, Madam. Indian Railways has rationalized Coal & Coke tariff structure by reducing the freight in the range of -1% to -15% for distances beyond 700 km. The freight rates below 100 km have also been reduced substantially by reducing the minimum distance for charge from 125 km to 100 km for all commodities. Moreover, for the traffic moving for distances between 0-50 km, 51- 75 km and 76-90 km, concession of 30%, 10% and 5% respectively, is being granted. There has been only a slight increase in freight in the range of 1% to 9% for the distances between 101-700 km.

Coal India Limited, vide notification dated 01.01.2018, has revised the price of all grades of non-coking coal

28 | CCAI Monthly Newsletter March 2018

produced by coal companies of CIL superceding their earlier price notification dated 29.5.2016. The price of higher grade of coal (G1 to G5) has been reduced by 0-5% whereas the price for other grades (G6-G14) has been increased in the range of 3 to 22%. With this increase, the increase in cost of generation is expected to be around 9.0-10.0 paisa/ unit. (b) : No, Madam. The thermal power plants are operating consistently at Plant Load Factor (PLF) of about 60% during 2016-17 as well as during 2017-18 (April 2017 - January, 2018). However, the generation from thermal power plants is increasing. The low PLF of thermal power plants is primarily due to high growth rate of capacity addition vis-Ă -vis growth rate of demand. The Compounded Annual Growth Rate (CAGR) of installed capacity during 2012-17 was 10.3% vis-avis CAGR of energy met at 5.8% only. (c) & (d) : The price revision of coal by Coal India Ltd. and the rationalization of tariff by the Railway are based on their operational requirement. The energy charge rate (ECR) of any Thermal Power Station (TPS) is determined based on the landed price of coal, i.e., the price of coal as well as its transportation cost including all taxes, levies, duties etc. The Plants without long term PPAs, purchase coal through e-auction, the price of which is higher than the notified price of coal.

Government of India has taken following initiatives to reduce the cost of Generation: (i) Flexibility in utilization of domestic coal for reducing cost of power generation. (ii) Rationalization of coal linkages to optimize cost of transportation. (iii) Third Party Sampling of coal at both loading and unloading ends to reduce the power tariffs to the consumers.

Q. No. 3049. Coal

14.03.2018

SHRI RAMSINH RATHWA: Will the Minister of COAL be pleased to state: (a) whether the Government has assessed the current requirement of coal for power plants in the country including Gujarat; (b) if so, whether the required quantity is being supplied to these power plants in the States, particularly in Gujarat;

(c) if not, the reasons for inadequate supply of coal to these power plants; and (d) the corrective steps taken by the Government in this regard ?

ANSWER MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL) (a): During the process of formulation of Annual Plan, Ministry of Coal/Niti Ayog assesses overall demand of the country, including demand for power sector. Central Electricity Authority assesses the requirement of coal for power plants in the country in the beginning of financial year based on the generation target during the year. As per the assessment, based on the generation target, the total domestic coal requirement for Gujarat Gencos would be 10.53 Million Tonnes (MT).

The receipt of the coal by the power plants of Gujarat State Electricity Corporation Ltd. (GSECL) during Apr-Jan 2018 is as under: (Figs in ‘000Tonnes) Receipt

S. No.

Nmae of TPS

1

GANDHI NAGAR TPS

1635

208

1843

2

SIKKA REP. TPS

-

1066

1066

3

UKAI TPS

3009

310

3319

4

WANAKBORI TPS

3417

103

3520

8061

1687

9748

Total

Domestic

Imported

Total

(b) & (c): CIL makes all efforts to meet the requirements of Power Sector in the Country. The Production and dispatch plan is also prepared keeping the same in view. However, many of the power stations of the country opted to restrict the coal supplies from the Coal Companies during major part of the last year and in the initial months of this fiscal. The total stock at the power stations’ end which was 38.87 MT in the beginning of 2016-17 had reduced to about 27.74 MT by the end of 2016-17, while pithead coal stock with CIL increased from 57.64 MT to 68.42 MT during the same period. The Coal supply to power plants in the State of Gujarat has increased to 15.71 MT (31%) during April 2017 - February 2018 in comparison to 11.98 MT over the corresponding period in 2016-17. (d): In addition to the monitoring mechanism available at coal companies and CIL, coal supplies to Power Utility Sector is monitored regularly by an inter-ministerial sub-group comprising representatives of Ministry of Power, Ministry of Coal and Ministry of Railways constituted by Infrastructure review Committee of Cabinet Secretariat. This Sub-Group takes various operational decisions for meeting any contingent situations relating to Power Sector including critical coal stock position for power plants.

Q. No. 3122. Quality Coal 14.03.2018 SHRI OM BIRLA: Will the Minister of COAL be pleased to state: (a) the details regarding the quantity of the coal produced quality wise in India during the last three years; (b) the quantity of coal imported from various countries across the world during the previous year; (c) whether there is a shortage of quality coal for the production of electricity in the country and if so, the meaCCAI Monthly Newsletter March 2018

| 29

sures taken by the Government to overcome this problem in the country; and (d) whether there has been several occasions of disputes between Coal India Limited (CIL) and National Thermal Power Corporation (NTPC) regarding the quality of coal which is supplied by the CIL to various NTPC’s power units and if so, the action/steps taken by the Government to reduce such disputes?

ANSWER MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL) (a): The quantity of the coal produced quality-wise in India during the last three years is given below:( in Million Tonnes) Grade

PRODUCTION 2016-17(Provisional) 0.023

Steel-I

2014-15 0.050

2015-16 0.037

Steel-II

0.456

1.051

1.004

SC-1

0.130

0.135

0.110

Wash-I

0.115

0.415

0.314

Wash-II

2.228

2.493

3.422

Wash-III

12.335

12.968

11.084

Wash-IV

42.132

43.788

45.704

Total Coking

57.446

60.887

61.661

G1

2.740

3.831

3.832

G2

0.565

0.341

0.309

G3

5.469

5.189

5.279

G4

19.025

17.665

17.319

G5

14.789

16.302

13.112

G6

22.680

13.114

14.140

G7

37.838

39.038

35.961

G8

30.523

33.150

29.450

G9

52.704

44.579

37.769

G10

64.411

82.855

98.074

G11

130.703

147.460

143.133

G12

79.169

90.578

92.317

G13

76.348

77.619

90.838

G14

5.054

1.439

7.440

G15

3.806

4.073

3.540

G16

2.627

0.418

7.769

G17

3.258

0.666

0.531

UNG

0.024

0.026

0.318

Total Non-Coking

551.733

578.343

601.131

Total Coal

609.179

639.230

662.792

(b): The quantity of coal imported from various countries during the previous year 2016-17 was 190.95 Million Tonnes.

30 | CCAI Monthly Newsletter March 2018

(c): By and large, the requirement of coal for Power sector is for supply of lower grades coal. In terms of extant policy and Government directives, CIL is supplying requisite quality of coal to Power sector for electricity production. In order to ensure supply of requisite quality coal, a mechanism of independent Third Party sampling at loading end has already been put in place covering different schemes under which supplies are being made to power houses. (d): Prior to the directives issued by Ministry of Coal dated 26.11.16 for independent third party sampling mechanism at loading end, sampling was being undertaken by third party agencies appointed both

by CIL and NTPC independently. Due to variation in result of these third parties, difficulties were being faced in finalization of quality of coal dispatched.

However, consequent to issuance of Standard Operating Procedure on Third Party Sampling at loading end, the issues have largely been settled. For smooth operationalization of the mechanism, a committee has been constituted to oversee the implementation process. Further, Alternate Dispute Redressal Mechanism (ADRM) has been set up at the Government level to ensure redressal of disputes, if any.

Q. No. 3203. Distribution of Coal 14.03.2018 SHRIMATI JYOTI DHURVE : Will the Minister of COAL be pleased to state: (a) the manner in which the Government controls the price and distribution of coal in emerging trade scenario; and (b) the arrangement made for the allocation of coal to the bulk consumers?

ANSWER MINISTER OF RAILWAYS AND COAL, (SHRI PIYUSH GOYAL) (a) & (b) : Fixing the price of coal is not in the domain of the Government. Pricing is an operational decision of Coal India Limited (CIL) and Government does not play any role in it. After complete decontrol of coal prices w.e.f. 01.01.2000, CIL fixes the basic prices of coal produced by CIL and its subsidiary companies.

The coal companies fix the Coal price based on input costs, inflation index, market trends, etc.

The distribution of coal to different consumers is done through one or more of the following methods:1. A policy on ‘’Auction of Linkages of Non-Regulated Sector’’ was issued by Ministry of Coal (MOC) on 15.02.2016 vide letter No23011/51/2015-CPD (Pt-I).

The highlights of the policy are:• All allocations of linkages/LoAs for non-regulated sector viz. cement, steel/sponge iron, aluminium and others [excluding fertilizer (urea) sector], including their CPPs, shall henceforth be auction based.

• There may not be premature termination of FSAs of non-regulated sector as of now. However, there will be no renewal of existing FSAs of non-regulated sectors [except FSAs of CPSEs and Fertilizer (urea)] which are maturing in 2015-16 onwards, after completion of their current agreement tenure.

• Existing FSAs with CPSEs may continue to be renewed on expiry. However, in case • CPSEs require linkages over and above the existing linkages, they may participate in auction of linkage.

• For auction of linkages, separate quantities shall be earmarked for sub-sectors of non-regulated sector.

2. MOC has formulated a new linkage policy for power sector called `SHAKTI (Scheme for Harnessing and Allocating Koyla (Coal) Transparently in India) vide letter No. 23011/15/2016-CPD/CLD dated 22.05.2017. The salient features of the new linkage policy are:• Fuel Supply Agreement (FSA) to be signed with Letter of Assurance (LoA) holders after ensuring that plants are commissioned, respective milestones met, all specified conditions of LoA fulfilled within specified timeframe, where nothing adverse is detected against the LoA holders.

• Based on recommendations of Ministry of Power, Linkages shall be allotted to State/Central Gencos/JVs. • Linkages to IPPs shall be on auction basis.

CCAI Monthly Newsletter March 2018

| 31

• Linkages shall be granted for full normative quantity to Special Purpose Vehicle (SPV), incorporated by nominated agency for setting up of Ultra Mega Power Project, under Central Government initiative through tariff based competitive bidding on the recommendations of the Ministry of Power.

• Linkages to IPPs having PPA based on imported coal but not having linkage shall be on the basis of a transparent auction mechanism.

3. The consumers of small, medium and other sectors who have coal requirement up to 10,000 tonnes/ year shall be eligible to obtain coal from the State Nominated Agencies(SNA), as per the provisions of New Coal Distribution Policy (NCDP), 2007.

4. As per the provisions of NCDP, 2007, around 10% of estimated annual production of CIL would initially be offered under e-auction. CIL offers coal through spot auction, special forward e-auction for power sector and exclusive e-auction for Non-Regulated sector to meet the requirements of different consumers of the economy.

Q. No. 3207. Coal Imports 14.03.2018 SHRI KAUSHAL KISHORE: Will the Minister of COAL be pleased to state: (a) the details of the India’s coal imports for the last three years; (b) the reasons, if any, for the drop in demand for coal from power generating stations in the country; and (c) the ways and means through which the Government proposes to balance the use of coal resources in the country as compared to other sources of energy like renewable energy, etc.?

ANSWER MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL) (a): The details of all India import of coal during the last three years is given below:

32 | CCAI Monthly Newsletter March 2018

Import of Coal (in Mte.) Year

Coking

Non Coking

Total

2014-15

43.71

174.07

217.78

2015-16

44.56

159.39

203.95

2016-17 (Prov.)

41.64

149.31

190.95

(b): During the current year 2017-18, the growth in supply of coal to power sector is 7.2%, based on the rising demand of coal based generating stations. As estimated by the Ministry of Power, the Pan India growth of coal based generation would be 5.4% to 5.7% in the current year & next four years. (c): As an alternative energy source, the Government has up-scaled the target of Renewable Energy capacity to 175 GW by the year 2022, which includes 100 GW from solar, 60 GW from wind, 10 GW from Bio-power and 5 GW from Small Hydro power. So far a total of 64.31 GW capacity has been installed through the implementation of various renewable energy schemes/ programmes upto 31st January 2018 which includes 32.88 GW from Wind, 18.45 GW from Solar, 8.53 GW from Bio-power and 4.45 GW from Small Hydro Power. However, coal will continue to remain the major energy source in the short to medium term.

Q. No. 3220. Clean Coal 14.03.2018 SHRI VINAYAK BHAURAO RAUT: SHRI SHRIRANG APPA BARNE: SHRI ADHALRAO PATIL SHIVAJIRAO: DR. SHRIKANT EKNATH SHINDE: Will the Minister of COAL be pleased to state: (a) whether coal is going to become an important part of economy for decades; (b) if so, whether coal will be a main source of electricity in the country for decades due to its abundance and cost advantage; (c) if so, whether India needs to do more to attract foreign investment in technologies that can cut emissions from burning coal; (d) if so, whether India has already sought foreign funds to move towards clean coal which can cut greenhouse gases emitted from burning coal by up to 30 per cent;

(e) whether Coal India plans to increase its production to about one billion tonnes by 2022; and (f) if so, whether it has fallen short of its annual targets leading to higher imports by the country and if so, the steps taken in this regard?

ANSWER MINISTER OF RAILWAYS AND COAL ( SHRI PIYUSH GOYAL) (a)&(b): Coal is the prime source of energy in India and is likely to continue in the years to come. This is primarily due to abundance of coal in India and that too at a cheaper rate. So, coal will continue to be the prime source of energy in India in near future. As per

draft “New Energy Policy� prepared in NITI Aayog, coal will remain as an import source of energy and electricity, even in near future due to its abundance. (c)&(d): Information is being collected from concerned ministries. (e): The coal production target for Coal India Limited for FY 2018-19 is 650 Mt. based on the projections of power demand as envisaged by the Ministry of Power. Coal production target for Coal India Limited by 2022 has not been firmed up as demand forecast is awaited from various consuming sectors. (f): Production target and achievement for the last three years and import of coal for the same period are as follows: (Figs. in Mt.)

Head

2014-15

2015-16

2016-17

Production Target(BE)

507.00

550.00

598.61

Production Actual

494.23

538.75

554.13

Achievement(%)

97.48

97.95

92.56

Import*

217.783

203.949

190.953(Prov.)

The import of coal in India has come down from 217.783 Mt in 2014-15 to 190.953 Mt. in 2016-17.

GOVERNMENT OF INDIA MINISTRY OF COAL RAJYA SABHA Q. No. 1662. Steps to reduce cost of production and import of coal 09.03.2018 SHRI PARIMALNATHWANI:

(c) to what extent these steps have been successful?

ANSWER

Will the Minister of COAL be pleased to state:

MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL)

(a) whether adequate steps have been taken to reduce production cost and also import of coal and if so, the details thereof;

(a): Some of the measures taken to bring down the cost of productionby Coal India Limited (CIL) include the following:

(b) whether steps have also been taken for rationalization of coal linkages and if so, the details thereof; and

i. e-reverse auction for finalization of contracts for explosives implemented. ii. Action taken for improving competition in tenders and cost reduction:

CCAI Monthly Newsletter March 2018

| 33

a) In case of procurement, introduction of Reverse Auction (RA) for tenders valued more than 1 crore with Start Bid price as L1-bid b) Introduction of rejection of H-1 bid in RA to generate competition and obtain more realistic “Start Bid Price” c) Non-disclosure of Bidder’s identity in RA. iii) Staggering the day of rest so that the infrastructure is utilized for higher number of days without affecting the period of rest for an individual. iv) Adoption of mechanization in both underground and opencast mines.

Q. No. 1663. Supply of coal to power plants in Andhra Pradesh 09.03.2018 SHRI T. G. VENKATESH: Will the Minister of COAL be pleased to state: (a) whether attention of Government is drawn towards shortage of coal and generation of power in Andhra Pradesh; (b) whether it is a fact that power generation in Andhra Pradesh is seriously affected by shortage of supply of coal to the power plants, if so, the details thereof;

v) Converting unsafe, unviable underground mines into opencast mines.

(c) whether Government has made any assessment on availability and supply of coal to the power plants in Andhra Pradesh; and

vi) Higher size HEMM to be deployed in major open cast projects for maximum extraction of coal economically.

(d) whether Government has taken any steps to make availability of sufficient coal to the power plants in the country for uninterrupted power generation?

As per the current import policy, coal is kept under Open General License (OGL) and consumers are free to import coal from the source of their choice as per their contractual prices on payment of applicable duty. However, to reduce import of coal, CIL had taken steps for promotion of import substitution through source rationalization with part supply from higher grade coal sources. More coal from various sources including higher grade were offered through various types of e- auction schemes particularly special forward e-auction with flexi lifting to cater the requirement of various power sector consumers not having FSA with CIL sources. However, the gap between demand and supply of coal cannot be bridged completely as there is insufficient domestic availability of coking coal and power plants designed on imported coal will continue to import coal for their production.

ANSWER

(b) to (c): An Inter-Ministerial Task Force was constituted in June, 2014 for review of existing coal sources as also feasibility for rationalization of these sources with a view to optimize transportation cost. Coal Linkage rationalization in Power sector has resulted in decrease in transportation cost of coal from the mines to the power plants leading to more efficient coal based generation of Power. Total coal movement rationalization of 54.76 MT has taken place with annual potential savings of Rs. 3354 Crore.

34 | CCAI Monthly Newsletter March 2018

MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL) (a) & (b) : No, Madam. Central Electricity Authority (CEA), Ministry of Power has informed that as per CEA report, the energy requirement in Andhra Pradesh during the period April, 2017 to January, 2018 has been 47,848 MU out of which 47,805 MU (i.e 99.9%) energy has been supplied during this period. (c) : Coal linkages have been granted from CIL to Rayalaseema U-6 TPS (100 MW), Dr. NTTPS St-V (1x 800 MW), Damodaran Sanjeevaiah St-II (1x800 MW) TPSs of APGENCO. In order to meet the requirement of Power plants, CIL has offered coal through road mode from available pithead stock to plants which can lift coal through road mode. As a result of these efforts, coal supply to the power plants has been smooth. Further, as per the long term linkage with APGENCO power plant, SCCL has committed to supply 3.88 MT coal to Rayalaseema TPS, Muddanur for 2018-19 and 2.0 MT on best effort MoU basis to Dr. N Tata Rao TPS. (d) : Coal supplies to Power Utility sector is monitored regularly by an inter-Ministerial Sub-Group comprising representatives of Ministry of Power, Ministry of Coal, Ministry of Railways, Ministry of Shipping, NITI,

CEA, CIL, SCCL, NTPC constituted by the Infrastructure Review Committee of Cabinet Secretariat. This subgroup takes various operational decisions for meeting any contingent situations relating to Power sector including critical coal stock position of power plants. In addition, against the requirement of 460.17 MT domestic coal by Power Sector till 28.2.2018 from CIL & SCCL, 457.36 MT (99.39%) Coal has been supplied.

Q. No. 1665. Steps to reduce cost of production and import of coal

09.03.2018

SHRI SANJAY SETH: Will the Minister of Coal be pleased to state: (a) the details of coal mines closed/ abandoned during the last three years and the current year, State-wise, company wise and year-wise; (b) the reasons therefor and the norms for closing the coal mines; whether any assessment has been made regarding the loss/profit occurred as a result of the closure of coal mines; (c) if so, the details thereof and the steps taken/being taken by Government for rehabilitation of unemployed labourers of the said closed mines; and (d) whether Government proposes to revive these closed coal mines and if so, the details thereof?

ANSWER MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL) (a) to (d) : The State-wise, company-wise and year-wise details of the coal mines of Coal India Limited, closed/abandoned/discontinued during the last three years and the current year (as on 1.10.17) are given below:

Name of Closed/ Abandoned mines

Year

State

Name of Closed/ Abandoned mines

Year

State

Eastern Coalfields Ltd.: Lachipur colliery UG

2014-15

West Bengal

Belbaid OC

2015-16

West Bengal

K. D. Incline

2015-16

West Bengal

Mahabir OC

2016-17

West Bengal

Ghusik UG

2015-16

West Bengal

MallikBasti OC

2017-18

West Bengal

Haripur UG

2015-16

West Bengal

Ratibati UG

2017-18

West Bengal

Parasea 6&7 incline UG

2015-16

West Bengal

Barmondia A UG

2017-18

West Bengal

Amrasota UG

2015-16

West Bengal

Mandmand UG

2017-18

Jharkhand

Kuardih-Tirat

2017-18

West Bengal

Moira

2017-18

West Bengal

CCAI Monthly Newsletter March 2018

| 35

Gaurangdih Begunia

2017-18

West Bengal Bharat Coking Coal Ltd.:

Ena OC

2014-15

Jharkhand

Bera OC

2017-18

Jharkhand

Basdeopur UG

2014-15

Jharkhand

Sudamdih Incline

2017-18

Jharkhand

Hurriladih UG

2014-15

Jharkhand

Gadhur

2017-18

Jharkhand

Kenduadih Mixed

2015-16

Jharkhand

Basuria

2017-18

Jharkhand

Murulidih 20/21 UG

2015-16

Jharkhand

Bararee

2017-18

Jharkhand

Burragarh UG

2016-17

Jharkhand

East Basuria

2017-18

Jharkhand

Kujama OC

2017-18

Jharkhand

Gandudih Khas Kusundaa

2017-18

Jharkhand

Amal. East Bhagatdfih Simlabahal UG

2017-18

Jharkhand

Karo I UG

2016-17

Jharkhand

Saunda-D UG

2017-18

Jharkhand

Khas Mahal UG

2016-17

Jharkhand

Kuju UG

2017-18

Jharkhand

Ray Bachra UG

2017-18

Jharkhand

Swang UG

2017-18

Jharkhand

Topa UG

2017-18

Jharkhand

Sayal-D UG

2017-18

Jharkhand

Sirka UG

2017-18

Jharkhand

Kargali(BSI) UG

2017-18

Jharkhand

Jarangdih UG

2017-18

Jharkhand

Argada UG

2017-18

Jharkhand

Central Coalfields Ltd.:

Western Coalfields Ltd.: Hindustan Lalpeth.3 UG

2016-17

Maha-rashtra ChandaRayatwari UG 2017-18

RawanwadaKhas UG

2016-17

Madhya pradesh

Ganapati UG

2017-18 Madhya Pradesh

Thesgora UG

2016-17

Madhya Pradesh

Ambara UG

2017-18 Madhya Pradesh

Dhoptala OC

2016-17

Maha-rashtra

HLC-1 UG

Ghugus OC

2016-17

Maha-rashtra

Vishnupuri-1 UG

Makardho OC kada-II

2016-17

Maha-rashtra

Kumbharkhani

2017-18

A B Incline

2017-18

Maha-rashtra

2015-16

Chhattisgarh

Kotma West UG

2017-18 Madhya Pradesh

2017-18

Maha-rashtra

Maha-rashtra

2017-18 Madhya Pradesh Maha-rashtra

South Eastern Coalfields Ltd.: Rajgamar 6&7 UG

36 | CCAI Monthly Newsletter March 2018

North Jhagrakhand

2016-17

Chhattisgarh

North Chirmiri UG

2017-18

Chhattisgarh

Kurasia OC

2016-17

Chhattisgarh Surakachhar 5&6 UG 2017-18

Chhattisgarh

Jamuna OC

2016-17

Madhya Pradesh

Dugga OC

2016-17

Chhattisgarh

Kalyani UG

2017-18

Chhattisgarh

Katkona 3&4 UG

2017-18

Chhattisgarh

Palkimara UG

2017-18

Chhattisgarh

Anjanhill UG

2017-18

Chhattisgarh

Birsingpur UG

2017-18 Madhya Pradesh

Dharam UG

2017-18

Chhattisgarh

2016-17

Odisha

Mine No 4 UG

2017-18

Govinda UG

2017-18 Madhya Pradesh

Mahanadi Coalfields Ltd: Chhendipada OCP

Odisha

The reasons for closure/suspension/abandonment of these mines include depletion/exhaustion of coal reserves, unsafe mining conditions arising out of fire, other safety considerations, inundation, adverse geo-mining conditions etc.

Most of the underground (UG) mines are incurring heavy losses. Closing of these unsafe and unviable mines have reduced the losses previously being incurred by them. All manpower of these closed mines have been suitably redeployed in other mines or other suitable areas of the subsidiary companies. (e) : Some of the closed UG mines have already been converted to OC mines wherever viable. Other mines which are having sufficient extractable reserves will be reconsidered if and when they become economically viable in future by introduction of new technology or change of method of work.

CCAI Monthly Newsletter March 2018

| 37

Q. No. 2463. Operationalizing captive coal blocks

16.03.2018 SHRI MOHD. ALI KHAN Will the MINISTER OF COAL be pleased to state: (a) whether it is a fact that several auctioned captive coal blocks are still not operational , if so, the details thereof; (b) the number of captive coal blocks which are operational out of the total auctioned coal blocks; and (c) whether Government is taking any steps to make all these coal blocks operational?

ANSWER MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL) (a)- (b) Under the provisions of the Coal Mines (Special Provisions) Act, 2015 and Rules made thereunder, 31 coal mines have been auctioned successfully.

Out of these 31 coal mines, 17 are Schedule II coal mines which were operational prior to their cancellation whereas 14 are Schedule III coal mines which were non-operational prior to their cancellation. Out of the 17 auctioned Schedule II coal mines, mining operations have commenced/mine opening permission granted in 12 coal mines. In respect of one op-

38 | CCAI Monthly Newsletter March 2018

erational and 5 non-operation Schedule II coal mines, action has been/is being taken as per the provisions of Coal Mine Development and Production Agreement.

Schedule III auctioned coal mines are scheduled to be operational from June’ 2018 onwards as they were not operational at the time of the allocation. Out of the 14 Schedule III auctioned coal mines, CMDPA in respect of 2 coal mines have been terminated in compliance to Hon’ble High Court of Delhi Order whereas CMDPA/Vesting Order in respect one coal mine has been terminated due to violation of terms and conditions of tender document as well as CMDPA. (C) - Status of all the allocated coal mines are reviewed at the highest level and meetings with Successful Bidders/Allottees and Nodal Officers of State Governments as well as other stakeholders are held regularly by Nominated Authority in Ministry of Coal.

Ministry of Coal is in constant engagement with various stakeholders for enabling expeditious commencement of mining operations. A Monitoring Committee has been constituted under the Chairmanship of Secretary (Coal) with Secretary (MoEF & CC), Chief Secretaries of respective host States, Coal Controller and representative from CMPDIL as members, to review the operationalization of the coal mines allocated so far. The Committee is mandated to review the operationalization of coal mines on monthly basis. A Committee of Secretaries has also been constituted by the Cabinet Secretariat to review the operationalization of already allocated coal mines.

CCAI Monthly Newsletter March 2018

| 39

0

274475.51

TOTAL

Source CEA

TOTAL

BHUTAN IMP

HYDRO

73.84

NUCLEAR

14

60.76

65.33

13

60.15

ACTUAL*

MAR-2018

1229400

PROGRAM

THERMAL

Category

141400

45293.42

HYDRO

BHUTAN IMP

5000

40972

6780

1042028

222402.09

2

NUCLEAR

1

105835

141

9387

3670

92637

3

PROGRAM

105466.09

77.68

7010.76

3064.95

95312.7

4

ACTUAL*

81.97

63.12

15

ACTUAL SAME MONTH 2016-17

102090.73

69.2

7912.66

3778.55

90330.32

5

ACTUAL SAME MONTH 2016-17

MAR-2018

99.65

55.09

74.69

83.51

102.89

6

% OF PROGRAM (4/3)

AN OVERVIEW

70.02

58.7

16

PROGRAM

64.4

60.67

17

ACTUAL*

74.38

59.78

18

ACTUAL SAME PERIOD 2016-17

APRIL 2017 - MAR-2018

PLANT LOAD FACTOR (%)

Monitoring Target Capacity Apr 2017 to (MW) Mar 2018

THERMAL

Category

SUMMARY- ALL INDIA

103.31

112.25

88.6

81.11

105.52

7

% OF LAST YEAR (4/5)

1229400

5000

141400

40972

1042028

8

PROGRAM

GENERATION (GWH)

ACTUAL*

1205920.9

4856.01

126133.79

38247.05

1036684.09

9

PERIOD :

1160140.9

5617.34

122377.56

37915.87

994230.17

10

ACTUAL SAME PERIOD 2016-17

MAR-2018

98.09

97.12

89.2

93.35

99.49

11

103.95

86.45

103.07

100.87

104.27

12

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

APRIL 2017 - MAR-2018

ENERGY GENERATION REPORT

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’s new pricing system may raise fuel costs because the monopoly would end up charging for moisture content in consignments, its consumers have complained. But executives of the state-run miner said the new pricing would make an insignificant difference.

Coal India Ltd (CIL) is offering 10 million tonne of coal, adequate for 2,000 mw, for open market auction exclusively for generation stations — the largest such offering being made to quickly shore up fuel stock at thermal power plants as 91 major water reservoirs run low on scanty winter rainfall.

CIL is producing about 2.3 MT per day whereas the offtake on best effort basis is about 1.9 million tons because of logistics, says Gopal Singh, CMD. The move to allow the private sector to mine coal for commercial use will boost both production and mining efficiency. Substitution of imported non-coking coal with domestic production can save about Rs. 30,000 crore of coal imports, according to a Crisil estimate.

— Power — India’s electricity production grew 34% over seven years to 2017, and the country now produces more energy than Japan and Russia, which had 27% and 8.77% more electricity generation capacity installed, respectively, than India seven years ago.

After a long delay of nearly six months, Coal India has started supplying coal to some of the 10 power plants that won long-term coal allocation at the first such auction held in September last year. Coal India would supply 27 million tonnes of coal annually to these cos.

Power demand in India is looking at an uptick this summer. The country’s peak demand has been 157,000 Mw this month, 15 per cent higher than in the same month last year.

As power plants face coal shortages, Coal Minister Piyush Goyal has asked Railways to increase coal loading to up to 500 rakes per day to meet power demand in summer, official sources said. .—

Cement —

UltraTech, India’s leading cement producer, recorded a 33 per cent YoY rise in sales in the final three months of the year, along with a 37 per cent improvement in volumes. For Heidelberg Cement demonetisation and tax reforms kept volumes down for its Indian operations.

40 | CCAI Monthly Newsletter March 2018

India is the second largest producer of cement in the world and its cement producers are constantly looking for possibilities to increase efficiencies of their cement manufacturing operations.

Despite the projection of an increase in cement prices over the next few months, the profitability of producers might stay under stress, with diesel prices projected to remain firm and lack of railway rakes to carry the finished product.

— Steel — India’s steel production grew 6.2% in 2017 compared with a marginal decline in Japan’s production, which had brightened India’s prospect of becoming the second largest steel producer in 2018.

India’s steel exports are expected to remain strong, on the back of higher global prices, amid falling Chinese shipment as Beijing focuses on cutting around 30 million tonnes of excess annual capacity, to curb air pollution.

Steel prices are expected to firm up by 6-10 per cent this month wiping out the current domestic discount to the landed cost of imports. Steel companies are planning to increase prices on the back of rise in raw material cost and revival in demand across sectors, including infrastructure, construction, capital goods and automobile sectors.

MONTHLY SUMMARY OF IMPORTED COAL & PETCOKE Coal Price Index COAL

(kcal/kg)

Price - FOB

Price - FOB

Monthly Change (USD)

South Africa

6000 NAR

USD 87.22

INR 5672

0.79

South Africa

5500 NAR

USD 76.30

INR 4980

-0.27

Australia

5500 NAR

USD 77.66

INR 5827

-11.93

Indonesia

5000 GAR

USD 68.22

INR 4732

-4.53

Indonesia

4200 GAR

USD 46.23

INR 3291

-4.37

PET COKE

Sulphur

India-RIL(Ex-Ref.)

-5%

INR 8950

Price

Saudi Arabia (CIF)

+ 8.5%

INR 7089 ($109)

USA (CIF)

- 6.5%

INR 7505 ($115)

Exchange Rate

Change (Monthly)

USD/INR 65.038

0.86

Coking Coal Price: Semi Soft

Low Vol PCI

Mid Tier PCI

FOB Aus

Premium Low Vol CFR China

FOB Aus

HCC 64 MID Vol CFR China

FOB Aus

FOB Aus

FOB Aus

CFR India

MET COKE 62% CSR FOB N China

217

220.95

192.93

205.83

124.56

149.23

148.48

364.60

348.60

CCAI Monthly Newsletter March 2018

| 41

South Africa: Coal Mining in South Africa to 2021–Supply of Coal to get Strengthened as Domestic Coal Fired Power Capacity Expands.

Sellers of South African thermal coal met with fair demand from Indian buyers in the week due to higher prices for the main competing origin of Indonesia and issues with domestic supply.

Coal-fired plants account for more than 90% of South Africa’s generating capacity. Coal capacity totalled around 39 GW in 2016 and may grow by another 6GW or so by 2025, even with new sustainable energy policies in place, according to International Energy Agency data.

Australia: The first train to load coal from the recently recommissioned Blair Athol thermal coal mine in Australia’s Queensland is scheduled for April 6, mine owner. The company has executed long term contracts for port access with the Dalrymple Bay Coal Terminal and for rail haulage with Pacific National, it said.

Australia’s thermal coal powerhouse state of New South Wales had been issued a severe weather warning for heavy rainfall and is on flood watch, which could impact the region’s coal chains. A spokesman for the Australian Rail Track Corporation, which manages the Hunter Valley coal rail network, said that so far there have been no closures to the system.

Exports from the metallurgical coal dominant region of northern Queensland in Australia slipped to a ninemonth low of 11.12 million mt in February, data from the North Queensland Bulk Ports Corporation showed.

The exports were down 2% year on year and 20% lower from January, the data showed. This was the smallest monthly volume since May last year when coal exports were limping back from the impact of Tropical Cyclone Debbie.

Indonesia: Domestic consumption of Indonesian thermal coal set to increase supported by policy changes.

Indonesia’s Ministry of Energy and Mineral Resources set its March thermal coal reference price, also known as Harga Batubara Acuan or HBA, at $101.86/mt, up 24.4% year on year and 1.2% from February.

Indonesian thermal coal sellers struggled with falling bids and limited buying interest, further widening the

42 | CCAI Monthly Newsletter March 2018

bid-offer spread, market sources said.

USA: Herald Dispatch reported that coal production increased by 45 million short tons in 2017 in response to high demand for US coal exports, according to a report by the US Energy Information Administration.

US Metcoke offers remain high on supply shortage.

Atlantic metallurgical coal prices were steady with US offers above index, after earlier Australian-led falls earlier this week.

Weekly US coal production totalled an estimated 14.81 million st in the week ended March 10, down 1.9% from the prior week but up 2.4% from the year-ago week, US Energy Information Administration data showed.

Pet Coke: Petcoke Market is expected to surpass USD 25 billion by 2024.Rapid industrialization across developing countries along with increasing demand for reliable and cost effective alternate fuels will stimulate the industry growth.

Cement margins at risk as petcoke price hits multi-year high. If petcoke prices do not ease, realization gains will be offset by higher expenses, keeping margin growth subdued for cement makers. The price of imported petroleum coke (petcoke) has skyrocketed to multi-year high in March. Petcoke, which is derived from oil refining, is a key input material for cement makers.

Exports of US petcoke totalled 3 million mt in JAN, down 0.9% from DEC but up 3.7% from the year-ago month, according to US Customs Bureau data.

Shipping: Baltic coal shipments fall on week due to low spring demand. 37 ships were in the Russia-Baltic seaborne thermal coal region, down from 43 a week earlier. Despite ice build-up in the region subsiding over the last few weeks, the fall in coal shipping was due to week demand from the key Northwest European market, according to sources.“Russian coal is still offered into Europe but there is a lack of bids,” a trader in NWE said.

Export volumes of coal from the Port of Gladstone in Queensland, Australia, remained depressed in February, data from the Gladstone Ports Corp. showed, as more rail issues developed. A total of 4.86 million mt of coal was shipped from the port during February, down by 9% year on year.

COAL TESTING & INSPECTION SERVICES

INSPECTION SERVICES

SAMPLING

ANALYSIS

Vessel’s draft survey Load & discharge supervision Stack sampling Truck / rake weight assessments Visual inspection Weighing systems check Quality sampling, sizing and sample preparation Chemical Analysis Moisture determination

Systematic Sampling and Sample Preparation as per IS/ISO/ASTM standards Sampling both manual and by using auto-mechanical samplers Sampling from stationery bulk cargo - vessels, rakes, barges, trucks, stockpiles Sampling from moving streams

Third party analysis Bhubaneshwar, Mumbai, Chennai, Dhanbad, Gandhidham, Vizag, Korba laboratories ISO 17025 certified by NABL Kolkata, Vizag, Chennai ISO 17020

by NABCB for coal & coke inspections Technology capability: • Wet bench chemistry • Instrumental techniques

INSPECTORATE GRIFFITH INDIA PVT. LTD.

Bureau Veritas - Commodities Division: Vasundhara, 3rd Floor 2/7 Sarat Bose Road Kolkata - 700 020. INDIA Tel : +91 33 30516600, 24852901-02 calhq@inspectorate.co.in • www.bureauveritas.co.in

PRODUCTION AND OFFTAKE PERFORMANCE OF CIL AND SUBSIDIARY COMPANIES (PROVISIONAL) COAL PRODUCTION (Figs in Mill Te) SUB CO.

MAR’18

APR’17 - MAR’18

AAP TARGET

ACTUAL

% ACH

AAP TARGET

ACTUAL

% ACH

ECL

4.84

6.01

BCCL

4.27

4

CCL

11

NCL

8.57

% GROWTH

124

47

43.57

93

7.5

94

40.5

32.61

81

-12

12.96

118

70.5

63.4

90

-5.4

9.07

106

89

93.02

105

10.6

WCL

8.26

7.95

96

48.5

46.22

95

1.3

SECL

16.76

15.47

92

153.8

144.71

94

3.4

MCL

14.81

16.7

113

150

143.06

95

2.8

NEC

0.17

0.128

76

0.7

0.78

112

30.2

CIL

68.68

72.28

105

600

567.37

95

2.4

OFFTAKE (Figs in Mill Te) SUB CO.

MAR’18 AAP TARGET

APR’17 - MAR’18

ACTUAL

% ACH

AAP TARGET

ACTUAL

% ACH

% GROWTH

ECL

4.77

5.1

107

47

43.62

93

1.4

BCCL

3.49

3.45

99

40.5

33.35

82

-4.5

CCL

6.86

6.37

93

70.5

67.56

96

10.9

NCL

8.4

9.06

108

89

96.74

109

15.9

WCL

4.67

4.76

102

48.5

48.75

101

23.4

SECL

15.67

13.27

85

153.8

151.1

98

9.8

MCL

14.47

13.05

90

150

138.27

92

-3.3

NEC

0.09

0.14

170

0.7

0.89

128

15.2

CIL

58.41

55.19

96

600

580.28

97

6.8

44 | CCAI Monthly Newsletter March 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

46 | CCAI Monthly Newsletter March 2018

CCAI Monthly Newsletter March 2018

| 47

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