Coal Insights, March 2023

15 Seaborne thermal coal offers decline in March

16 Seaborne coking coal offers remain volatile in April

17 India’s February coal imports up 26.5% y-o-y

18 CIL’s coal production up 7% in February

19 SCCL’s coal production up 8% in February

20 Coal Ministry auctions off 8 billion tons coal reserve in 29 mines

24 USTDA to fund Jharia CBM project

26 Government moves towards averting a summer energy crisis

29 High-priced power trading starts at IEX

30 Transition dynamics triggers met coal volatility

34 Coal logistics to focus on smart rail corridors, coastal shipping

36 Sponge iron production up 15% in February FY23

40 Sangita Sales bets big on commercial mining, eyes 20% growth

42 Coal handled by major ports up 30% till February

43 Indian Railways’ coal handling up 12% till February

45 Coal accounts for third of Germany’s power output in 2022

46 Yankuang Energy goes for intelligent mine development

47 US coal production to decline by 7% in 2023: EIA

48 NTPC North Karanpura to get 8.5 mt coal from CCL

49 Thermax, Fortescue eye PLI under hydrogen mission

50 Corporate Update

52 Government Update

54 E-auction data

56 Port data

6

COVER STORY

HOT COAL: Staying relevant amid green rush

Coal Secretary and sector leaders debate future of coal at ICMC 2023.

13

EVENT

Leader Speak @ ICMC 2023

What the industry leaders and experts said at the conference.

22

FEATURE

‘Flexible’ thermal plants to operate at 40% average minimum load

CEA body looks at RE integration with thermal power.

37

INTERVIEW

“Gainwell to end India’s dependence on imported equipment for UG mining.”

Interview of Dipankar Banerjee, COOMining, Gainwell Commosales.

44

INTERNATIONAL

American Carbon expands met coal

mine capacity

Deep cut ops at Carnegie 1&2 to raise output.

Publisher’s Statement

Statement about ownership and other particulars about Coal Insights required to be published under Rule 8 of the Registration of Newspapers (Central) Rule, 1956. FORM IV (See Rule 8)

1. Place of publication : Kolkata

2. Periodicity of publication : Monthly

3. Printer’s Name : Amit Surana

Whether citizen of India : Yes

4. Publisher’s Name : Amit Surana

Whether citizen of India : Yes

Address : Tata Centre, 43 J L Nehru Road, Kolkata 700071

5. Editor’s Name : Arindam Bandyopadhyay

Dated: March 2022

Whether citizen of India : Yes

Address : Tata Centre, 43 J L Nehru Road, Kolkata 700071

6. Names and addresses of : mjunction services ltd individuals who own the Tata Centre, 43 J L Nehru Road, Kolkata 700071 newspaper and partners or shareholders holding more than one per cent of the total capital

I, Amit Surana, hereby declare that the particulars given above are true to the best of my knowledge and belief.

Sd/Amit Surana

Publisher

HOT COAL: Staying relevant amid green rush

Sumit Maitra

Rising economic prosperity, expanding access to electricity and slow growth of Renewable Energy (RE) have all conspired to keep coal burning in coming years, believe panelists at the inaugural session of 16th Indian Coal Markets Conference organised by mjunction services Ltd based on the theme: “Coal Rush: Growing in a Green World”.

To meet the demand for thermal power, the government is aggressively pursuing expansion of country’s coal production capacities.

“Economy is developing so the requirement of power is enormous. Though the focus is on expanding RE capacity, dependence on coal is significant. Therefore, the Coal Ministry is working on a strategy to enhance production of coal so that power as well as other sectors get adequate amount of coal and, if there is a surplus, coal can also be exported,” Amrit Lal Meena, Coal Secretary said during his address at the inaugural session.

Meeting the need of the non-power sector

Before the country turns surplus on coal, there is an urgent need to meet the demand of non-power/non-regulated sector, to which supplies have been impacted due to priority currently being given to the power sector in the run-up to the summer days.

“We are pained by the inadequate availability of coal to the non-regulated sector (NRS). In fact, in all high-level meetings, the issue of supply of coal to all sectors of the economy is stressed. Power sector being preferred, we are not able to give (coal to NRS). Once the production goes up both from Coal India as well as captive and commercial miners, definitely there would be adequate coal,” Meena, who was addressing the inaugural session virtually, said.

Coal Secretary requested coal users to participate in auction as smaller-sized mines

at reasonable revenue-share are available which will make coal users self-reliant in coal.

Coal India Chairman Pramod Agrawal said supplied to the NRS is being beefed up.

“In February-March, we are doing highest-ever supplies to the NRS. We will continue to do so provided the rakes are made available. We can shift to the road-mode if rakes are inadequate. However, making rakes available has to be taken care of by the customers. This is the basic premise that we have to work. Within this framework, if there is any suggestion from customers, we are willing to consider,” Agrawal said during his address.

Commercial/captive mines to produce 150 mt in FY24

According to Meena, 50 commercial and captive mines are ready for operation.

A total of 129 mines have been allocated so far for captive and commercial users.

The Ministry estimates that 15 percent of the total coal production will be from captive and commercial mines, Meena said.

During FY22, production from captive and commercial mines stood at 89 million tons (mt), and in FY23, the Ministry is expecting 112 mt against a target of 120 mt.

And in FY24, the target set for this category of mines is 161 mt.

mjunction services ltd MD Vinaya Varma (left), Coal India CMD Pramod Agrawal, S Saha, MD, Bhubaneswar Power Pvt Ltd and Ajay Misra, Director General of Renewable Energy Society of India at the inaugural session of 16th Indian Coal Markets Conference.

Audience at the conference

Considering growth rate of India, it can be assumed that energy sector shall see a similar increase in requirement of around

Leader Speak @ICMC 2023

Currently we don’t have G1-G7 grades in Open Cast mines. We have to go Under Ground, open large mines and let commercial miners to have equity coal.

DLR Prasad Adviser, Minerals, Metals, Mining, APMDC

Expanding coal production in Eastern India has pushed existing rail transport to full capacity.

V K Arora

Chief Mentor, KCT, chairing the session on Coal logistics

There has hardly been any major investments in coal mining except in China and India.

Tuhin Mukherjee

Group Advisor, Aditya Birla Group, & Former MD, Essel Mining

Intermittency is a major problem for Renewable Energy. Till it is solved, coal will play a major role in energy mix.

Ritabrata Ghosh VP, Sector Head, Corporate Sector Ratings, ICRA Ltd

Next year we will get all our coal requirements from our own mines and become the first State Genco to do do.

Debal Gangopadhyay Adviser, WBPDCL

It is high time all commercial miners are put on a level playing field by bringing all blocks under CBA Act.

R P Ritolia Adviser, IMR Resources & former CMD, CCL

As long as the commercial blocks are good, financing will keep happening.

We need high-speed continuous miners so that we can extract more coal from Under Ground mines.

Dr Anindya Sinha

Director

(Tech/Operations), Northern Coalfields Ltd

We are supporting Coal India on several transformational projects.

Srihari Rao Cloud Advisor-Mining, AWS India

Coal production from Under Ground mines has been declining. In this background, 100 million ton production target from such mines by 2030 is challenging.

Prasenjit Maity

National Head – OE Sales, Underground Soft Rock, KomatsuJoy Global

Wide bodied trucks reduces fleet size by 40%, there is lesser accidents and 25-30% more fuel efficient than Rigid Dump trucks.

Mukul

Modi Executive VP, SBI Caps

Sauro Jyoti Ray

Business Head (Mining), Sany Heavy Industry India

MD, Bhubaneswar Power Pvt. Ltd.

‘Flexible’ thermal plants to operate at 40% average minimum load

Insights Bureau

The power ministry has begun the process of making thermal power plants ‘flexible’ in operations to sync with growing but unstable renewable generation. To meet commitments of minimum Renewable Energy generation, thermal power plants will have to operate at an average minimum load of 40 percent by 2030 considering the 500 GW renewable energy integration by then. This will drastically impact their coal consumption and the schedule of most of the conventional generating plants.

“In near future thermal power plants fleet is expected to operate at an average minimum load of 40 percent. It shall drastically impact the schedule of most of the conventional generating plants and shall lead to operating thermal power plants at part load. Hence, thermal generating units shall have to be tuned such that they can meet the new load demands in a very effective and efficient manner. And if any gaps are found, the same needs to be fixed,” a report issued by Central Electricity Authority (CEA) titled ‘Flexiblisation of Coal-Fired Power Plants: Roadmap for achieving 40 percent Technical Minimum Load’, says.

“Flexible thermal units are one of the cheapest source of flexible power presently in the country. Hence, it will be crucial to ready the existing thermal units for the new operating regime enforced by the renewables. It shall help to optimise the operation of thermal units and reduce emission burden of power plants,” Ghanshyam Prasad, Chairman, Central Electricity Authority has said in the report.

Minimum thermal load categories

To give effect to the flexiblisation, a committee was formed by CEA with the following objectives:

♦ Explore the new technical minimum load of thermal generating units without oil support

♦ Assessment of thermal flexible power and ramp rate available for integration of renewable generation

♦ Identify increase of net heat rate, O&M cost etc

♦ Targeting grid security and stability, less impact on tariff

♦ Explore cost implication of flexible operation of thermal unit

♦ Preparation of Roadmap for achieving new technical minimum load.

The committee has now come out with the detailed report. Necessary changes also have been brought to the relevant regulations.

In pursuance of clause (e) of sub-section (2) of Section 177 of the Electricity Act, 2003 read with clause (b) of Section 73 of the Act, CEA has made the following regulations under Central Electricity Authority (Flexible Operation of Coal based Thermal Power Generating Units) Regulations, 2023.

• Applicability

These regulations shall apply to all coal based thermal power generating units owned or under control of the Central Government, State Governments or owned by any private company, connected with the grid and to the load despatch centers.

Onthe basis of net heat rate increase due to minimum thermal load (MTL) operation, thermal generating units are categorised under very flexible (40 percent MTL), flexible (45 percent) and low flexible (50 percent) group.

In a particular day (with 175 GW Renewable Energy) about 90 very flexible units (24 GW), 78 flexible units (42 GW) and 75 low flexible units (52 GW) from 243 grid synchronized thermal generating units (118 GW) are required for safe &secured grid operation.

• General requirements

(1) The coal based thermal power generating units shall be designed or suitably retrofitted, if required, to comply with these regulations for full range of ambient and environmental conditions prevailing at the site

(2) All equipment and systems installed shall comply with the provisions of statutes, regulations and safety codes, as applicable

• Flexible operation of coal-based thermal power generating units

(1) The coal based thermal power generating units shall be capable of providing the flexible operation as per these regulations

(2) The implementation of flexible operation of the coal based thermal power generating units shall be as per the phasing plan specified by the Authority from time to time

Coal

Transition dynamics triggers met coal volatility

Coal Insights Bureau

Global decarbonisation agenda is repurposing investment strategies of the steelmakers and coal miners.

Few coking coal mines are being developed as low-emission alternatives are being developed while evolving geo-political relations are forcing countries to look for newer sourcing bases.

These factors are at play as the Indian steel industry is trying to secure supplies to feed the expanded capacity which will come on stream in coming years.

“Raw material security has become a major issue. We are balancing out two things: growing steel production in line with the National Steel Policy and the focus on decarbonisation and growing sustainably. This dynamics is being managed at a time when the markets has become extremely volatile,” Amita Khurana, Group Chief of Raw Materials Procurement at Tata Steel said at the Chintan Shivir organised by the steel ministry to decide on raw material strategy for the sector.

While commodities have gone through super-cycles, reaching levels unheard of before, the growth aspirations of the country as well as the corporation is not getting matched with the availability of raw materials, Khurana said at the brain-storming session.

While coking coal supplies remain constrained, miners divesting their coking coal assets would create uncertainty in supply, believes Teck Resources Ltd (Teck), the second largest producer of high-quality steelmaking coal in the world.

Teck itself is divesting its prized coking coal assets to 2 top steelmakers in the world – POSCO of Korea and Nippon Steel of Japan.

As these assets turn captive mines from merchant mines, this would mean trouble

for Indian steelmakers who are expected to import more coking coal in coming days.

“Future demand growth (for met coal to come) mainly from India and South East Asia. Demand is expected to increase 37 million tons by 2030, driven by India and SE Asia,” Teck Resources told investors while announcing the deal. Energy transitionfocused strategies, along with evolving demand for critical minerals, is changing the investment climate of the steel sector, says top management of Teck.

Future supply growth coming mainly from existing mines, but could be delayed by labour shortages, logistic issues and approvals, the company says predicting market shortage by 2025, unless additional production comes on.

Coking coal price volatility turning steelmakers nervous

Coking coal, one of the key raw materials that changes the dynamics of the steel industry, plunged in the last week of February with easing supply concerns. Prices cooled off with debottlenecking of logistic constraints and improving climatic conditions in Australia.

Chinese steel manufacturers are cutting down on their production due to environmental concerns and Chinese steel maker Baowu Group is also reselling its Glencore low volume coal for $370/ton.

Teck Resources

“The fact that the largest steel manufacturer in the world is reselling its coking coal in open market, coking coal is expected to run in surplus and prices are expected to correct further in coming weeks,” analysts with Motilal Oswal had said on February 27.

However, strong demand in Asia and Europe has led to a sharp rise in coking coal prices since then.

Persistent volatility in coking coal prices hampers Indian steel makers, which rely heavily on imported coking coal.

Usually steel manufacturers in India carry inventory of around two months, and hence any price hike would dent margins of steel manufacturers in Q1 of FY24.

“The increase in coking coal prices again is threatening to increase our cost of production in the current quarter. However, the simultaneous improvement in the steel

Global seaborne coking coal outlook

“Future demand growth (for met coal to come) mainly from India and South East Asia. Demand is expected to increase 37 million tons by 2030, driven by India and SE Asia.”

Gainwell to end India’s dependence on imported equipment for underground mining.

The mining sector has been evolving fast with an urgent need to raise production to match the country’s energy and other developmental needs. The required focus on sustainable mining operations also calls for increasing mechanisation of mining operations incorporating stateof-the-art machines and digital technologies.

Gainwell, through its arms, Gainwell Commosales Pvt Ltd (GCPL) and Gainwell Engineering Pvt Ltd, has stayed at the forefront of the evolution of the mining sector by bringing in comprehensive and technologically advanced product line of Caterpillar and by establishing itself as a manufacturer of high-end machines for global markets. In its endeavour to provide turnkey ‘solutions for growth’ to its customers in the infrastructure and mining space, Gainwell has nurtured close relationships with multiple global OEMs and expanded presence in Railways, Defence, Oil and Gas and Under Ground mining sectors in recent years providing end-to-end and fullspectrum maintenance services to customers across various sectors and with state-of-the art facilities spread across India. Sumit Maitra spoke to Dipankar Banerjee, Chief Operating Officer-Mining, Gainwell Commosales Private Ltd on topics ranging from the plans of the group to the prospects of the mining sector.

American Carbon expands met coal mine capacity

Coal Insights Bureau

American Resources Corp’s (ARC) subsidiary American Carbon has expanded production at its Carnegie 2 metallurgical mine which will double the output at the mine.

The company is utilising existing equipment from its fleet to efficiently expand production and minimize the capex thereby increasing rate of return to shareholders. ARC said.

The capacity of the Carnegie 2 metallurgical carbon mine in Pike County, Kentucky, has been expanded by adding a second operating section.

“It is expected that the production from this section will initially ramp up to approximately 9,000 tons to 12,000 additional tons per month,” ARC said in a release.

Mark Jensen, CEO of American Resources commented, “Our McCoy Elkhorn complex is a showcase operation that possesses a significant opportunity for growth from our internal portfolio of assets. Adding a second operating section at this

already producing mine is one of the highest margin growth opportunities we can execute upon as a company, given no additional fixed costs and minimal additional variable costs are needed to achieve the incremental growth of production. Now that this has been achieved, we look forward to focusing on additional growth expansion at the McCoy Elkhorn complex, while we continue to minimize capex costs and maximize speed to market.”

ARC over the years has acquired a significant fleet of underground and surface equipment that it can utilize to expand production.

The new expansion at Carnegie 2 is utilising almost entirely owned equipment that the Company has been able to acquire over the years.

The company is still in possession of over three additional full operating sections of equipment that it intends to use for Carnegie 1 expansion, the upcoming mine 15A expansion, as well as its Wyoming County Coal LLC complex that it is currently developing.

“In the current market, owning quality

Our McCoy Elkhorn complex is a showcase operation that possesses a significant opportunity for growth from our internal portfolio of assets. Adding a second operating section at this already producing mine is one of the highest margin growth opportunities we can execute upon as a company, given no additional fixed costs and minimal additional variable costs are needed to achieve the incremental growth of production. Now that this has been achieved, we look forward to focusing on additional growth expansion at the McCoy Elkhorn complex, while we continue to minimize capex costs and maximize speed to market.

Mark Jensen, CEO, American Resources

assets and equipment for efficient growth offers a significant competitive advantage, given the current tightness in the equipment and infrastructure marketplace,” the company said in a release.

Deep cut ops at Carnegie 1&2 to raise output

ARC in October 2022 received approval of the Mine Safety and Health Administration for a deep cut plan at its Carnegie 1 mine.

“A deep cut plan enables 30 percent additional production while reducing the movement of our mechanised equipment, which further reduces the potential for injury to our operating team, reduces travel time and wear and tear of the equipment. The company is also pursuing such approvals at our newly operating Carnegie 2 mine. Having these assets in place positions our carbon platform as one of the few in the industry that can organically expand production and feed the demand especially while older mines in our region are coming to end of life,” Tarlis Thompson, COO of American Resources commented.

ARC is now planning to undertake similar deep cut operations at Carnegie 2.

Plans to cash in on supply squeeze

ARC plans to cash in on the rising demand for met coal following removal of Covidrelated restriction in China and general supply squeeze.

“The company believes that the strength in the current carbon market will be further exemplified in 2023 for metallurgical carbon for steel production as China slowly emerges from Covid-related lock downs. Carnegie 1 and Carnegie 2 mines are underground room and pillar mines that are set up in a manner that will provide significant growth over the course of the next few years. The Company will achieve such growth and efficiencies with minimal capex by optimizing the operations through methods such as adding additional mining sections, now that mining has advanced further into the seam, and through deep cut mine plans at Carnegie 2, similar to those recently announced at Carnegie 1,” the company said.