Contents 23 Thermal coal offers decline on low Chinese procurement 24 March seaborne coking coal offers marginally down on limited activity 25 India’s January coal imports up 8% y-o-y 26 CIL’s coal production up 6.5% in February 28 Enough coal stocks to ensure smooth power supply during polls 29 SCCL’s Feb coal production down 3.03% y-o-y 30 India’s coal production during Apr-Feb up 8% y-o-y 31 India’s coking coal imports down 22% in Jan y-o-y 33 No power capacity addition in January 35 India’s cement production surges 14% in Apr-Jan 36 Sponge iron Feb production up y-o-y, down m-o-m 37 Traffic handled by major ports up 3% in Apr-Feb 38 Indian Railways’ Feb coal handling up 7.5% y-o-y 42 National Mineral Policy, 2019 gets Cabinet nod 43 NTPC captive coal output to surge 170% in current fiscal 52 US coal exports up 19% in 2018 53 NLC’s lignite production up 11% in February y-o-y 54 MCL’s UG output down till Feb 55 Corporate 56 E-Auction 57 Port data
6 | COVER STORY Go underground!
39 | Government
UG mining, once a predominant method, is barely at 7% of India’s total coal output today. But OC deposits are depleting, hence, UG mining needs a relook
CCEA approves power projects worth over `31,000 crore The move involves approval for four key power projects spread across Bihar, Uttar Pradesh, Jammu & Kashmir and Sikkim
41 | Government
Large hydro projects come under renewables ambit HPOs as a separate entity within non-solar RPOs will cover LHPs commissioned after notification of these measures
45 | International Global coal market sends mixed signals While tidings are good in India, Britain & Mediterranean Basin, there is a setback in China, Vietnam, the US and Australia
50 | International
China coal production may rise in 2019 Reversal in production trend in last 3 years may be due to closure of old and inefficient mines & efficient modern projects Publisher’s Statement
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: Arindam Bandyopadhyay
Dated: March 2019
4 Coal Insights, March 2019
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Cover Story
Go underground! Yes, if India needs to increase its coal production to desired levels. Once a predominant mining method, today it is at barely 7% of the total coal output in India. But OC deposits are depleting! So, there is an urgent need to bring the focus back on underground mining Madhumita Mookerji & Arindam Bandyopadhyay
6 Coal Insights, March 2019
Cover Story
A
guided tour of even a portion of an underground mine gives an idea of the enormity of the rich mineral deposits that Nature has endowed the earth with and yet the difficulties in reaching to those depths and exploiting the same in Indian geo-mining conditions. It is interesting to note that underground mining (UG) was prominent in the preNationalisation days (prior to 1973). Maximum production from UG was around 73 million tons (mt) then. Later on, subsequently, the opencast (OC) mining concept came into the picture and production through this method kept on increasing so much so that in 2015-16, opencast mining contributed almost a whopping 93 percent of the total production, whereas the balance (7 percent) came from underground mining. It has been seen that the percentage contribution of production from underground mining has fallen sharply from a slightly better 16 percent in 2004-05 to a slim 8 percent in 2014-15. The global scenario in UG mining is rather different. In major coal producing countries like China, the US and Australia the contribution of underground mines has been at 95 percent, 33 percent and 20 percent respectively as per an article, Future of Bulk Production from Underground Mining by Bijay Kishore carried in Coal Mining Technology and Management in June 2018. Globally, coal fulfills around 30 percent of primary energy needs, generates over 40 percent of the world’s electricity and is used in the production of 70 percent of the world’s steel. In reverse to the Indian scenario, around 60 percent of the world’s coal production comes from underground mines and the remaining 40 percent from open cast blocks. This proves that the major focus, dominance and reliance in India have been on opencast mining in meeting the country’s coal/energy needs. However, experts say that 70 percent of the country’s coal reserves have such geo-mining parameters that they can be worked through underground methods. In fact, India has huge untapped potential for underground (UG) mining with extractable reserves up to a depth of 600 metres. But, at the same time, persistently declining coal production from underground coal mines at Coal India Limited (CIL), the primary coal producer of the country, and the trend of UG contribution to the total coal production,
which is presently about even less than even 8 percent, are issues of serious concern for the coal behemoth. Breaking this trend by enhancing production and productivity of underground mines is the biggest challenge before CIL, feel experts. Indeed, over the past few years, a growing consensus has been building up over the need for increasing coal production from underground mines to meet, in turn, the challenges of increasing energy demand in the coming future. An industry stalwart rues the fact that more than 60 percent of coal production in the world comes from UG while in India, it is not even 10 percent. “But India is different from other coal-bearing countries. For instance, underground mining is more prevalent in China. Underground mining operations are distinctly more difficult than that of surface mining, involving higher expenses and more complex processes. The outlook is far less in this space because of the technology used etc,” the source says. However, the coal ministry has plans to focus more on underground mining henceforth, it is learnt. Both CMPDI and ISM are learnt to have conducted a survey on the viability of a large number of UG mines, which are old and closed. “These mines have considerable resources, but are being shut in a designed manner. It is learnt that the findings of the survey report have been circulated among select people,” says an industry source. As per a note to a global tender notice by CMPDIL a few year ago, for consultancy services for “Study on Underground Coal Mining in CIL – Problems, Potential, Technology, Modernisation, Production and Safety”, CIL operates through 81 mining areas spread over 8 provincial states of India. CIL as per April 2018, has 369 mines of which 174 are underground, 177 opencast and 18 mixed mines. As such, CIL has core competency across the entire
coal business value chain starting from exploration, planning and design, operations, beneficiation and marketing. As per the Indian Minerals Yearbook, 2017, as on March 31, 2016, there were 493 operating mines for coal in the country out of which 210 were opencast, while 252 were underground. The remaining 31 mines were mixed collieries. There were 473 public sector mines and 20 mines in the private sector. As a result of exploration carried out by GSI, CMPDI and other agencies, 315.149 billion tons (including that estimated in Sikkim) of geological coal reserves up to 1,200 metre depth have been established in the country as on April 1, 2017. Out of these reserves, 143.058 billion tons (bt) are “proved” reserves, 139.311 bt are “indicated” reserves and the remaining 32.779 bt are in the “inferred” category. Of the total reserves, the share of prime-coking coal is 5.313 bt, medium-coking and semi-coking are at 29.221 bt and non-coking coal, including high sulphur, at 280.615 bt. A thrust is being given on further increasing production from opencast mines where the gestation period is comparatively shorter. In 2016-17, the share of production of raw coal from opencast mines was 618.44 mt (93.3 percent) against 44.35 mt (6.7 percent) from underground mines. India is the third largest coal producer in the world and currently produces around 700 million tons (mt) of coal per year. The consumption of coal is mainly in the power sectors where non-coking coal is being used. The steel industry uses mainly metallurgical coal whose reserves are concentrated in the Jharia and Raniganj coalfields. At present, India’s coking coal requirement is fulfilled only partially from indigenous resources while the rest is being imported, mainly from Australia, Indonesia and other countries. Coal production during April-February,
Breaking this trend by enhancing production and productivity of underground mines is the biggest challenge before CIL, feel experts. Indeed, over the past few years, a growing consensus has been building up over the need for increasing coal production from underground mines to meet, in turn, the challenges of increasing energy demand in the coming future
Coal Insights, March 2019
7
Government
CCEA approves power projects worth over `31,000 crore Policies on stressed thermal power projects also approved Coal Insights Bureau
T
he Cabinet Committee on Economic Affairs (CCEA), recently, took several key decisions for strengthening of the power sector. Approval was given for
four projects worth over `31,000 crore. These projects are located at Buxar (Bihar), Khurja (Uttar Pradesh), Kishtwar (Jammu & Kashmir) and Sirwani (Sikkim). In addition to these, the Union Cabinet approved measures to promote development of hydro
power and to alleviate the stress in thermal power projects. Details of the four projects/polices are as given below. Buxar Thermal Power Project
The CCEA has approved the proposal for an estimated investment of `10,439.09 crore in the 2x660-MW Buxar Thermal Power Project (Buxar TPP), located in the district of Buxar in Bihar. The plant will be set up by SJVN Thermal Private Ltd, a wholly-owned subsidiary of SJVN Ltd, a Mini Ratna CPSU under the Ministry of Power, Government of India. The Buxar TPP will be based on the supercritical technology with two units of 660 MW each. Equipped with latest emission control technology to protect the environment, the project will have high
Coal Insights, March 2019
39
INTERNATIONAL
Global coal market sends mixed signals Kingshuk Banerjee
M
ixed signals are generating from the global coal market. While tidings for coal are somewhat good in India, Britain and the Mediterranean Basin, fossil fuel has got a definite setback in China, Vietnam, the US and Australia. Nevertheless, experts are not that pessimistic on king coal, pinning hopes on rising demand in near future as well as widespread deployment of carbon capture, use and storage (CCUS) to mitigate emission level.
Rising coal stock at Indian gencos
The Central Electricity Authority (CEA) data revealed that no coal-fired Indian power
plant has had critical level of coal stock in mid-March, a far cry from 2014 figure when 66 percent of coal-fired plants were at critical level of fuel stock. But the critics have pointed out that the last two months have seen a reduction in conventional capacities. In February 2019, a 100 megawatt (MW) sequential dip in coal- and lignite-based power capacities has been seen which reduced fuel consumption, raising coal inventories. Besides, a rise in coal imports and better fuel quality supplied to the power sector has led to greater efficiencies. This may also have contributed to the improved inventory situation. The experts have cautioned that unless Coal India Ltd (CIL), the country’s and the world’s largest producer of coal, keeps up the
supply momentum, the current inventory may soon disappear. Therefore, experts’ advice both the governments at the state level and at the Centre to try to reduce load-shedding during the general election as demand could rise substantially in the coming months. There are indications that demand would continue to grow steadily, helped by more supplies and greater connectivity. As per statistical trend, the demand for long-term power contracts are emerging after a four- to five-year hiatus. A Gujarat power distribution firm has invited bids for procurement of 3,000 MW on a longterm basis. As states continue to clinch ongoing short-term power contracts, coal requirements will increase, testing the present inventory levels.
Coal Insights, March 2019
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INTERNATIONAL
China coal production may rise in 2019
in small, old mines in major coal producing provinces such as Shanxi ad Shandong. Currently, the Chinese government favours larger, high-capacity projects to replace the old mines to meet sustained demand for coal in years to come. Coke production up
In line with the trend seen last year, China’s metallurgical coke production staged an increase of 6.58 mt during the first 2 months (January-February) of 2019, compared to the same period last year, according to official data. Met coke production by China stood at 73.89 mt during January-February 2019, against 67.31 mt recorded for the same period last year, show the data. Earlier, China’s met coke production increased marginally to 438.2 mt in 2018, against 431.4 mt achieved a year ago. The production in 2018 was, however, lower than 449.1 mt reported for 2016. China’s met coke production had started galloping since 2002 in tandem with the growth in the country’s steel output. Coke production had reached its peak at 476.9 mt in 2014, but dropped thereafter, due to the government’s policy of restricting steel output in the country. Pet coke production increases
Coal Insights Bureau
N
otwithstanding the early trends, the Chinese coal sector may see a positive growth in coal production during 2019. In fact, the country which consistently hits the headlines for a crackdown on coal mining and coal-fired power sectors to arrest pollution, has been witnessing positive growth in production for the last 2 years, i.e. 2017 and 2018. While the year 2017 saw an increase of around 82 million tons (mt) in annual coal production, last year’s increase was even higher at 100 mt. The current year may not be any different. However, the early production trend this year shows a slight decline. According to official data published by National Bureau of Statistics of China, the country’s coal production was marginally down at 513.67 mt during the first 2 months (January-
50 Coal Insights, March 2019
February) of 2019, compared to 516.28 mt reported for the same period last year. And still, the cumulative production during January-February 2019 was higher than 506.78 mt recorded for the first 2 months of 2017 and same as 513 mt achieved during the same period in 2016, the data show. Overall, China’s coal output stood at 3.545 billion tons in 2018, against 3.445 billion tons clocked in 2017. Also, the country had seen positive growth in yearly output of 2017 as compared to 3.36 billion tons posted in 2016. The last time the country saw a decline in its yearly coal output was in 2016. According to industry sources, the reversal of China’s coal production trend during the last 3 years can be attributed to closure of old and inefficient mines and increased capacity of modern, efficient projects. In fact, according to an estimate, China exceeded its yearly target of reduction in coal capacity
After a marginal decline in 2018, China’s petroleum coke production staged an increase during the first two months (JanuaryFebruary) of 2019, official data show. Production of pet coke during JanuaryFebruary 2019 was at 4.64 mt, against 4.26 mt produced during the same period last year, the data show. China’s pet coke production has shown a flat trend in recent years, hovering in the range of 25-27 mt in last 3 years. In 2018, the country’s pet coke output was marginally down at 26.35 mt, compared to 27.22 mt reported for the previous year, according to NBS data. Production of pet coke in December 2018 was at 2.31 mt, about the same as 2.33 mt achieved in the same month previous year, the data show. On a monthly basis, December output was higher than 2.23 mt produced in November 2018. Earlier, China’s pet coke production was up by around 1.3 mt in 2017, against 25.91 mt recorded for 2016, show the data.
58 Coal Insights, March 2019
Tear along the dotted line
Tear along the dotted line