Coal Insights, April 2017

Contents

6 | COVER STORY

12 ‘Thrust should be on large-sized mining equipment’

High end coal mining equipment more in demand

20 Steam coal offers rise in April 22 Coking coal price rises sharply in April on Debbie effect 23 India’s February coal imports down 33% y-o-y 24 CMPDI FY17 exploration at new 11.26lakh metre high 29 SCCL’s production surpasses target by 6% in FY17 30 India adds 1,154 MW generation capacity in Feb

26 | FEATURE

Coal India targets 19% production growth in FY18 Notwithstanding lukewarm demand, the miner refuses to give up on its ambitious growth roadmap.

34 | Technology

32 Centre to light up 4,615 villages by May 2018

HiBar Steam Pressure Filtration of Coal Ultrafines – new developments

38 US coal production up 17% in April y-o-y 39 Indian Railways FY17 coal handling slips 3% 40 Traffic handled by major ports up 6.79% in FY17 48 MCL produces over 128 mt coal by surface miners 49 Kusam Meco launches new temperature calibrator 50 Corporate update

Despite the recent stagnation, exciting times await the mining equipment business in India, say industry insiders.

HiBar Filtration is the most modern technology of continuous pressure filtration.

41 | EXPERT SPEAK

Fearing for country’s energy security The government is doing precious little to ensure the country’s future energy security, says J P Panda.

53 | INTERVIEW

60 ‘Economic viability key issue for thermal power units’

Martin Engineering eyes buyouts in India

62 E-auction data

The company is highly bullish on the Indian market, say R Todd Swinderman and Bill Shukla.

64 Port data

4 Coal Insights, April 2017

Cover Story

High-end coal mining equipment more in demand Madhumita Mookerji

6 Coal Insights, April 2017

Cover Story

T

he bounty of this country’s good earth is boundless! India possesses a mine of mineral resources, ranking among the top 10 global producers of coal, lignite, iron ore, chromite and many more. Her proven iron ore reserves were at around 28. 5 billion tons and production almost 160 million tons in 2015-16. Coal is India’s leading mining product, accounting for almost a whopping 78 percent of the country’s total mineral portfolio production.

The estimated coal reserves are at over 300 billion tons, which is a considerable 10 percent of the global reserves.

Despite the rapid strides being taken by renewables across the developed West, coal is here to stay, say experts, and will be the primary fuel to light the furnaces and boilers in India’s power stations.

Important steps have been taken by the government to increase domestic production.

A roadmap has been prepared by Coal India Limited (CIL) to substantially enhance coal production by 2019-20. This includes capacity addition from new projects, use of mass production technologies and identification of existing on-going projects with growth potential.

As a result, India’s coal production increased from 565.77 mt in 2013-14 to 639.24 mt (provisional) in 2015-16 but against a total coal demand of 822.36 mt (revised estimates), resulting in a supply gap of 183.13 mt or about 22.2 percent.

Piyush Goyal, Minister of State for Coal, Power, New and Renewable Energy and Mines, recently said: “As per the Annual Plan 2016-17 document of the Ministry of Coal, the all-India domestic production target of coal has been fixed at 724.71 mt, against an estimated demand of 884.87 mt for the current financial year.” This translates into a supply gap of 160.16 mt or about 18.9 percent.

Goyal further said that in 2015-16, domestic coal production was at 639.23 mt, against the total coal demand of 822.36 mt (revised estimates), resulting in a supply gap of 183.13 mt or about 22.2 percent.

As per the US trade data website, India produced 612 mt of coal and lignite in 2015 (3rd most in the world). However, consumption of coal and lignite stood at 824 mt, resulting in a shortfall of 212 mt, which was imported. Out

of this 212 mt, 168 mt was non-coking coal and 44 mt coking coal (for the steel industry).

The Ministry of Coal estimates that this gap will widen to 273 mt by 2021 when demand has been pegged at 980 mt.

“From 2008 till 2011-12, the growth in the construction equipment market was at a compound annual growth rate (CAGR) of 20-25 percent, which, year-on-year was much higher. That’s how the capacity got doubled.

However, the market started decreasing from 2012-13 and began de-growing by around 20 percent year-on-year,” recalls Devendra Kumar Vyas, CEO, Financial Services, SREI Equipment Finance Limited.

The share of backhoe loaders and excavators is 16 percent in the construction equipment market). However, by calendar 2016 (most overseas companies follow the calendar year), the latter has seen a growth of 50 percent for the first time after continuous degrowth of three years while the former has experienced a growth of 35-40 percent yearon-year. Last year, the growth was around 38 percent. Equally important, other equipment growth has been at around 30 percent.

The construction equipment market growth started coming back from 2016 onwards, boosting SREI Equipment Finance’ disbursements by 24 percent in the first 9 months, a telling pointer that good times are returning.

Industry overview

The coal mining industry accounts for about 80 percent of mining equipment demand in India, posing huge opportunities for manufacturers of the same. Most mining equipment demand is for open pit mines, which account for more than 90 percent of total coal production.

However, high-end, specialised coal mining equipment are more in demand in India and offer better scope to equipment manufacturers. A common refrain is that the mining industry was predominantly not aware of the standards and hence accepted sub-standard products as a way of life. They accepted that if they put up a plant, dust would be there and they would have to accept it. But, now, as technology has developed and products have evolved, it is important to know that a coal, power or steel plant could be clean and green, using the right equipment and components.

As per the US trade data website, the market for mining and mineral processing equipment is estimated at $2.4 billion and is expected to increase marginally to about $2.5 billion in 2017.

It is interesting to note that around 199293, the construction equipment market size in India was `500 crore-`600 crore. This touched a peak of `30,000-crore -plus in 2010. Since then, it has gone down to around `22,000 crore. The market has thus seen huge growth.

Opportunities

Coal India As per industry players, Coal India itself offers the single largest opportunity to the mining equipment manufacturers, being the single largest producer of coal in India. It has been given a target to produce about 598 mt in 2016-17, nearly 11.5 percent higher than the actual production of 536.51 mt in 2015-16.

It mined 82 percent of India’s coal production during 2015, totalling 494 mt

Estimated size of mining equipment in India in USD millions

2014

2015

2016 (estimated)

2017 (estimated)

Total market size

2200

2290

2380

2480

Total local production

1850

1920

2000

2050

Total exports

150

155

160

170

Total imports

500

525

540

600

Imports from the us

137

96

110

130

Exchange rate: 1 USD= INR 67 Total market size = (total local production + total imports) – (total exports) Data sources: Total Local Production: ICRA; Total exports: ICRA; Total imports: ICRA; Imports from US: US Census Bureau 2016 and 2017 figures are estimates looking at the market growth or reduction rate.

Coal Insights, April 2017

7

Cover Story

‘Thrust should be on large-sized mining equipment’

S

hekhar Saran, Chairman-cum-Managing Director, CMPDI has taken over as Director (Technical), CIL, at a crucial juncture, when, along with an unprecedented growth in domestic coal production, there was a crying need to spruce up on the technology front as well to increase not only production but productivity, especially of the underground mines.

An engineering graduate (and topper) from the 1981 batch of the Department of Mining Engineering, Banaras Hindu University (BHU), Saran joined CMPDI, Ranchi, as Director (Technical) in June 2013. His elevation to the coveted post of CMD came with a mix of hopes and challenges. In a candid interview to Arindam Bandyopadhyay, he says, in line with the enhancement in Coal India’s production target, capex is required to be increased, particularly under HEMM and other P&M heads. Accordingly, the capex fund allocation has been kept significantly higher.

Excerpts: It is often said that lack of manufacturing base for high capacity mining equipment is a weak spot for the Indian mining sector, which includes coal. What is your take on this?

High capacity opencast mining equipment, such as 24 cum draglines, electric rope shovels up to 10 cum, hydraulic shovels up to 12 cum, rear dumpers up to 205 T and water sprinklers up 70 kl, etc, are being manufactured in India. Equipment of more than the above -mentioned sizes have limited application in coal mining, so far.

However, in tandem with the increase in demand for even larger-sized equipment in substantial numbers, indigenous manufacturers may also increase the size of their products accordingly.

Apart from Indian manufactures such as HEC, BEML, L&T and others, many global mining equipment makers have their

12 Coal Insights, April 2017

manufacturing base in India, eg, Caterpillar Inc, USA; Komatsu Ltd, Japan; Hitachi, Japan; Also, both the Indian and global manufactures are capable of increasing the size of their equipment to meet the demand of the Indian mining sector.

Nonetheless, it will be in the interest

of the mining industry of the country if manufacturing of larger-sized equipment is started now by the global mining equipment manufacturers considering the future growth of mining in the country.

Coal India is poised for high production growth in the coming years. In view of the anticipated growth, where do you see the opportunities for the domestic mining equipment industry?

The Indian mining equipment industry will continue to witness tremendous growth opportunities in the coming years.

Coal is likely to remain the prime source of commercial energy in the foreseeable future and opencast mines will continue to be the major source of coal in the near future. Accordingly, requirement of opencast mining equipment has already been growing to meet the demand of increased coal production and removal of large volumes of overburden, and also due to scheduled replacement of aging equipment fleet with new ones in the coming years. Certainly, domestic mining equipment manufacturers would adopt the latest technological advancements in their products in respect of productivity and comfort of operation, etc, especially for higher-sized equipment, which would help to meet the challenges of overall growth in the mining sector.

Please tell us about Coal India’s procurement plans of mining equipment and machineries in 2016-17? What was the capital outlay and how much was spent on this front?

Procurement of heavy earth moving

TECHNOLOGY

HiBar Steam Pressure Filtration of Coal Ultrafines - New developments and results J. Hahn, R. Bott and T. Langeloh

H

iBar Filtration is the most modern technology of continuous pressure filtration, also known as hyperbaric filtration. HiBar Filtration enables low moisture contents high specific solids performance and efficient filter cake wash if fine grained, difficult to filter products have to be processed. Lowest cake moisture contents are achieved with HiBar Steam Pressure Filtration. With this hybrid separation process the filter cake is treated with steam immediately after emerging from the slurry.

In a specially designed and patented steam cabin covering only part of the filtration area, the filter cake is only partially exposed to steam, which accelerates and intensifies the de-watering process. For many products the dryness of the filter cakes significantly improves quality, handling and transport of the product. For filtration of bulk materials such as coal ultra-fines, these are decisive criteria.

Hi-Bar steam pressure filtration is capable of producing extremely dry ultrafines below 10 percent w/w free moisture which now offers new options in coal ultrafines treatment.

In July 2014, the BOKELA HiBar pilot plant was operated at the coal washery Auguste Victoria (RAG), Germany, for steam pressure filtration of coal ultra-fines in front of experts from the international coal industry. It was a world premiere and for the first time filter cakes of dry coal ultrafines below 9 percent w/w free moisture were produced in a semi-industrial scale. For this low moisture steam consumption of some 30 kg/t (d) were necessary. This possibility to

34 Coal Insights, April 2017

produce ultra-fines below 10 percent (w/w) free moisture can eliminate former limits and offers new options in the treatment of coal ultra-fines, such as: ♦♦ allowing mixtures of coarse and fine fractions in any given amount; ♦♦ waste-to-product i.e. marketing as a saleable product instead of disposal; ♦♦ reduced transport costs through reduced water content; ♦♦ improved bulk flow behaviour for discharge of railway wagons; ♦♦ lower or even no energy cost for thermal drying; and ♦♦ more profit per ton run-of-mine.

In September 2015 the HiBar pilot plant was operated together with ACARP at Tahmoor coal mine in New South Wales.

The pilot plant was operated with at least two different flotation concentrates. It is the target to demonstrate the feasibility of steam pressure filtration for Australian coal flotation concentrates. Pilot operation will deliver scale-up data with respect to solids throughput, steam and air consumption and moisture content.

The paper explains the function and technical application of steam pressure filtration and reports results of the HiBar pilot plant operation for ultra-fines dewatering at the coal washery Auguste Victoria (RAG).

1. Introduction

Depending on the coal deposit the amount of ultra-fines can sum up to some 10 – 40 percent w/w. The free moisture content of the combined coarse and fine coal fraction is below 10 percent w/w, then filtration of ultra fines (particle size x < 250 µm) with modern rotary vacuum disc filters is a profitable way to produce a dewatered ultra-fine product with 20 – 30 percent w/w free moisture, allowing a mixture of a considerable amount of ultra-fines into the end product. Results of filtration and de-watering of coal ultrafines (Australian flotation concentrates, South

Figure 1: Plant design of HiBar Filtration

Interview

Martin Engineering eyes buyouts in India

U

S-based Martin Engineering has a 70-year history and a presence in 19 countries across 6 continents. With a focus on manufacturing conveyor components and other related products that enhance the safety, efficiency and cleanliness parameters of a bulk material handling plant, the company is highly bullish on India. R Todd Swinderman, CEMA Author and Technology Consultant and Bill Shukla, Managing Director of India operations, spoke at length about the global industry, challenges, enablers and opportunities in India to Madhumita Mookerji & Arindam Bandopadhyaya.

Excerpts from a free-wheeling interview:

Bill Shukla, Managing Director of India operations

What is globally the size of the equipment portfolio that Martin Engineering manufactures. Also, what is the size of the conveyor belting market?

Swinderman: Conveyor components and air cannons that Martin manufactures are probably a little less than a $2-billion-perannum market. Vibration motors and dust solutions would be around a $4-billion market. The conveyor belting market, globally, is probably $10-15 billion.

How has been the scenario like for such products, say over the last couple of years?

Swinderman: I have been involved with The Conveyor Equipment Manufacturers Association, or CEMA as it is known, and

their statistics for North and South America reveal that the market has bottomed out and is starting to improve. They expect shipments of conveyor-related equipment for bulk material handling to be up by 15 percent in 2017 as we come out of recession.

Historically, we have noticed that there tends to be a more or less 7-year cycle for such equipment. The market grows for 7 years and then starts to come down for 7 years, before curving upwards again for another 7 years.

So the market in North and South America is at the cusp of the growth graph, ready to climb up for another 7 years, before reaching a plateau and then tapering off once again.

Also, mining companies are putting their plans together and starting to invest.

Coal Insights, April 2017

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66 Coal Insights, April 2017

Tear along the dotted line

Tear along the dotted line