Coal Insights, November 2019 by mjunction services ltd

Contents

6 | COVER STORY

20 Thermal coal offers remain firm in November 21 Seaborne coking coal offers slid in November

Washed Out: Need for catching up in beneficiation

22 India’s September coal imports down 4% y-o-y

There is an urgent need to raise coal washing capacities in India as emission norms get stricter.

25 NTPC to blend coal at Pakri Barwadih 28 Govt to diversify coking coal sourcing 29 Adani to ship Carmichael coal from August 2021 30 Washed coal use can help meet emission norm deadline 31 CMPDI to curve out large blocks to attract modern miners 32 October sponge iron production up 5% y-o-y 33 Power capacity addition during September at 1,320 MW

23 | Feature Coal ministry to set up unit to expedite mine ops Consultancy firm to set-up project management unit

26 | Corporate

34 India’s cement production flat in Q2 35 Traffic handled by major ports up marginally till Oct

Coal gas can be a viable alternative fuel for steel making

36 Indian Railways’ coal handling in Oct down 12.5% y-o-y

Steel, coal ministry formulating policy to promote coal gasification

38 Corporate Update 39 Government Update 40 Four in five EU coal plants unprofitable: Report 41 US coal ash recycling rate declines amid shifting production 44 US coal production estimated at 698 MMst in 2019 45 Problems and prospects of coal mining industry in India: Part 2 51 Expert Speak: Logistical challenges for moving Indian coal 53 Fuel oil conundrum – at crossroads with IMO 2020 56 E-auction data 57 Port data

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42 | International

China Thermal power capacity touches 1027 GW Addition four times the capacity created in India, US

54 | INTERview

“Price of power in India not high enough to justify coal washing” Andrew Swanson of Australian Coal Preparation Society talks about lack of initiatives in India for washing coal

Cover Story

Washed out: Need for catching up in beneficiation Sumit Maitra

ndia is fortunate to be endowed with very large reserves of coal. As of date, the reserve is over 300 billion tons of coal. While the abundance of this fuel is acknowledged, most of this coal has a very high ash content, which makes beneficiation a necessary process to improve its quality and to render its usage as a fuel, which is more environment friendly. The need to wash and improve the quality of the coal has been endorsed by the government of India repeatedly, but the progress in establishing washeries has not been up to desired level, says Alok Perti, chairman, Coal Preparation Society of India. CPSI is a front-runner in promoting the use of washed coal in India. “There are some very critical issues

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involved in promoting this activity despite clear benefits in respect of preservation of the environment. Any enterprise would welcome any sort of move to get and use good quality coal to improve its business. We in CPSI are constantly engaged in creating forums and encouraging industries to recognize both environmental and commercial benefits of washing,” Perti said at International Congress on Coal Preparation (ICPC) recently held in New Delhi. ICPC is a forum where intensive deliberations take place on varied technical aspects of coal preparation reflecting the world wide status with regard to the latest state-of-the-art technologies being developed or deployed in the industry in respect of coal preparation. Notwithstanding the fact that per capita electricity is only about 1100

Kwhr, country’s economy has to grow at a reasonable rate of 8 to 9 percent, that makes it imperative that India continues to depend on coal based electricity, despite heavy investment on creating non-fossil based generation capacity of 40 percent of total electricity generation capacity of 800 – 900 GW required by 2030. With country’s aim of becoming a Five Trillion Dollar economy by 2025, the requirement of coal for generation of electricity, for making iron & steel, cement for meeting requirement of growing infrastructure like ports, highways, housing, education, health facilities and other basic needs to provide required quality of life to its growing population will also grow commensurately. “With poor generic quality of domestic coal, it is imperative that all coals must be washed to reduce the ash

Cover Story content and improve the heat value so that it burns more efficiently with lesser emissions,” Raj K. Sachdev, President, CPSI said at the event. The 9th ICPC was held in India in 1982 when the world was faced with sudden doubling of oil prices after Iranian revolution and beginning of Iran-Iraq war. However, coal continued to be the King. The 19th ICPC was held under the shadow of climate change, fears of melting glaciers, fast changing weather patterns and concerns about floods, droughts and crop losses. Naysayers are predicting death of coal. However, China, India and many other countries having limited choice between renewable and coal, will continue to use coal for power, iron and steel, cement etc for many more years to come. “International Energy Agency (IEA) has predicted that in 2045 or so, around 26 percent from present 38 percent of world electricity will still be coming from coal. But we cannot afford to adopt an ostrich approach. India has accepted the need to wash coal, adopt high efficiency low emission technologies for power generation and in coming years CCUS projects are sure to become reality,” Sachdev said. The headwinds that coal faces relate most to emissions and their impact on the earth’s atmosphere. Unabated carbon, be it in the form of any fossil fuel like coal, oil or gas has a commercial appeal that is going to be increasingly under pressure from international climate agreements on carbon emissions. “To ensure that the carbon footprint is made more climate-friendly, policymakers have to increasingly focus on newer and better technologies, which increase efficiencies and reduce emissions,” said Jitendra Roychoudhury of King Abdullah Petroleum Studies and Research Center, Riyadh. There is also an urgent need to wash coal as its use can help meet emission norm deadline, says R Srikanth of National Institute of Advanced Studies. Washing coal, the only pre-combustion emission control available, would be a way out for the power plants rather than missing deadline and pay up significant costs, he said. “Power plants using washed coal and sorbent injection of lime can bring down the emission of both SO2 and particulate matter,” Srikanth said. Need for coal washing would also

rise because of factors like railway freight bottlenecks as coal consumption in India outpaces Railway freight capacity in the main coal transportation routes. Compounded annual growth rate of Railway freight for coal in India was more than four times the wholesale inflation rate during FY12 to FY17 as per a study done by Brookings in 2018. Also, costs and pollution risks of land for ash disposal will increase in future as the existing ash dams are exhausted since flyash utilization in India during FY18 was only 67 percent, he said. Coal washing in India doesn’t compares well against countries like China and Australia. While Australia is cleaning most of its coal which are imported following stringent environment norms, China is rapidly expanding its washing capacities in tune with its mammoth scale of coal mining. Elsewhere in the world, the focus is on improved operations at lower costs. Coal washing a tricky business

While washing no doubt leads to lesser damages to environment when it is burnt, the process of washing, which only comes at a price if proper and latest technology is used, it also generates washery wastes and consumption of ground water, factors which, probably explains why coal washing is not getting proper focus. While metallurgical coal is traditionally washed washing of thermal coal is picking up in India. High ash with poor washability characteristics like high Near Gravity Material make Indian coal difficult to wash. Keeping capex and opex of coal preparation plants within acceptable limits is itself a big challenge, says HL Sapru of Monnet Group. “Therefore, proper design and selection of washing circuits and equipment after in-depth study of comminution/liberation studies and keeping overall organic efficiency of washing plants within acceptable limits is need of the hour. New strategies both for coarse coal and fine coal washing to get maximum yield with minimum wrong migration of clean coal into rejects and viceversa need to be adopted,” he said in his paper presented at the conference. “Non-coking coal used in power plants should be washed up to 32 percent but this should not be a blanket approach for

all coal fields, because of varying ROM and washability characteristics. The policy that power plants located more than 1,000 km from coal mines should use coal with ash content less than 34 percent applied to every power plant will be very expensive and unlikely to provide ‘good environmental value’ for money spent,” DN Prasad, adviser to SCCL said. The policy should focus on environmental standards to be achieved allowing consumers and suppliers to find the most economical means to achieve those standards, he suggested. “If India is going to start washing 500600 million tons of coal, there would be a lot of rejects and refuse that are generated and there doesn’t appear to exist a comprehensive plan to treat all of it,” says Andrew Swanson, founding director of Australian Coal Preparation Society. Several coal producing countries are now trying to address such issues. Blending

If coal preparation plant alone cannot reach the overall product ash specifications and produces several percentage points lower than the required ash product, raw coal blending with the clean coal can be seriously considered for the overall process optimization, a study of Indian and North American coal shows done by Swadhin Saurabh, Rainer Stephenson and Barbara Arnold of Millcreek Engineering Company and PrepTech Inc of US shows. This will not only assist in meeting the overall desired specification, but also assist in increasing the overall yield of the facility, thus it will help in improving the economics of the coal production cycle. It was also found that although a partial-wash plant may produce the desired product specification, a full-wash combined with blending can provide a higher overall product yield, the study shows. Coal blending in power stations is being adopted to reduce the cost of generation and increase the use of indigenous or more readily available coal. Low-grade (high ash) coal can be mixed with higher-grade low ash coal without deterioration in thermal performance of the boiler, thus reducing the cost of generation. When indigenous coal becomes less available, are of lower quality or are more expensive to mine in some regions, blending

Coal Insights, November 2019

FEATURE

Coal gas can be a viable alternative fuel for steel making

generating Electric Power as well as Steel (Direct Reduced Iron) making. What is Coal Gasification?

Coal Gasification is a chemical process by which so-called black and dirty low grade, non-coking coal can be converted by reaction with O2, H2O and CO2 into a clean, high grade fuel gas called Synthesis Gas or ‘Syngas’ comprising mainly of H2, CO and CH4. Globally, there are 3 broad classes of gasifiers commercially available which define the types of Coal Gasification technologies for Syngas generation and subsequent application to CTL Technologies. These technologies with a specific type of Gasifiers are currently being offered by various globally reputed Licensors. Some examples are given below. All of these technologies are mostly suitable for Coal feed stock with 25–30 percent ash or less. Major benefits of coal and petcoke gasification

It makes a lot of sense for Gasification of low quality coal and Petcoke in India. The major benefits for India by gasification of coal/ petcoke and establishing further downstream facilities would be as follows: ♦♦ Huge potential for Import Savings due to lesser dependence on Import of Crude oil, LNG, Chemicals and Petrochemicals, Fertilizers, etc. ♦♦ Substantial Monetization of vast resources of unutilized low Grade, High Ash Coal as well as high Sulphur Refinery Distillation Residues ♦♦ Adoption of Environment-friendly, “Clean Coal Technology” (low SOx, NOx) with “CCS-ready” CO2 streams Coal Insights Bureau

ith ministry of steel working a policy to promoting coal gasification for steel-making to be finalized soon, this alternative fuel is again coming under spotlight. Coal Gasification is an environmentfriendly chemical process by which low grade, non-coking coal can be converted by reaction with O2, H2O and CO2 into fuel gas called Synthesis Gas or ‘Syngas’ containing

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mainly H2, CO and CH4. The reaction takes place at high pressure and temperature inside a Reactor called ‘Gasifier’ in the absence of any conventional catalyst, Dipankar Sengupta of Jindal Steel & Power Ltd, said while addressing the International Coal Preparation Congress and Expo. The Syngas produced has a huge commercial application potential as it can be directly used as or converted into - industrial clean Fuels, variety of high value Chemicals & Petrochemicals, Fertilizers, also for

♦♦ Long term “Energy Security” for the country due to immunity from global politics on Oil & Gas Global Gasification Scenario

Coal Gasification is a very well established and widely accepted technology all across the world wherever there are large deposits of Coal available. Soon there will be 350 coal gasification plants with about 1000 gasifiers of different operating types.

INTERNATIONAL

China thermal power touches 1027GW, 4 times of India, US capacities Coal Insights Bureau

hina’s coal fired power capacity has touched 1027 GW in July, more than four times the total capacities in US or India, at 254 GW and 226 GW, respectively. China also has more coal power capacity under development than any country. In total, 195.6 GW is under active development, including 121.3 GW under construction and 22.6 GW permitted for construction, a recent report by Global Energy Monitor said. At the end of 2018, China’s coal fleet stood at 1,010 GW, according to the China Electricity Council. An estimated 17 GW were added in the first six months of 2019, net of 0.5 GW of retirements, putting total coal power capacity at 1,027 GW by July 2019. The report titled ‘Out of Step: China is driving the continued growth of the global coal fleet’ said. India retired roughly 7.4 gigawatts (GW) and added 82.3 GW of coal power plants in

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one and a half years, while China retired 39.4 GW and added 290 GW worth of coal power plants in this period, it said. In 2018, for the first time since China’s coal-building boom began in the 1980s, the coal power capacity outside of China shrank. From January 2018 to June 2019, countries outside of China decreased their total coal power capacity by 8.1 GW, due to steady retirements and an ongoing decline in the commissioning of new coal plants. Yet over the same period China increased its coal fleet by 42.9 GW, and as a result the global coal fleet overall grew by 34.9 GW. “As more countries turn away from coal and retire their plants, China’s continued pursuit of coal is increasingly out of step with the rest of the world, and is now effectively driving the ongoing expansion of the global coal fleet,” the report based on data provided by Global Coal Plant Tracker, commented. China growth

China’s recent growth is due to a brief but massive spree of project permitting that

occurred from September 2014 to March 2016, a period when the central government delegated permitting to provincial authorities who had strong incentives to approve and build coal plants to hit province-level economic targets. The permitting spree brought a cohort of 245 GW of new projects nearly equivalent to the U.S. coal fleet (254 GW) into the developmental pipeline, inflating what was already an overbuilt coal power fleet, with the average running hours for China’s coal plants hovering around 50% since 2015. Today, 147.7 GW of coal plants are either under active construction or under suspension and likely to be revived—an amount nearly equal to the existing coal power capacity of the European Union (150 GW). Given the amount of capacity under development, China’s central government looks ready to increase— perhaps significantly—its 1,100 GW coal power cap, as set by its 13th Five-Year Plan (FY2016– 2020). Coal and power industry groups are proposing the central government increase total coal power capacity by 20 to 40 percent to between 1,200 and 1,400 GW as part of China’s 2035 infrastructure plan. The 2035 infrastructure plan is expected to be released next year, and the 14th FYP in 2021. The continued growth of China’s coal fleet and consideration of plans to significantly raise the nation’s coal power cap show that while the country is often hailed as a clean energy leader, the momentum of coal power expansion has yet to be halted.

Interview

“Price of Power not high enough to justify coal washing”

ndrew Swanson, Executive Consultant, QCC Resources and representative of the Australian Coal Preparation Society on the ICPC International Organising Committee, has over 40 years’ experience in coal preparation and coal technology, and has held a range of technical, business development and senior management roles. With extensive experience in consulting services in coal preparation, technology disciplines, coal quality evaluations, coal terminal operations, feasibility studies, plant designs, financial optimisation, minesite operating strategies, due diligence investigations and R&D, Andrew has worked for a wide range of clients both in Australia and overseas, including companies such as Xstrata Coal, BHP Billiton, Anglo Coal and Rio Tinto Coal. Some recent projects include Mangoola, Ravensworth North, Drayton, and Mt Arthur Expansion. During this recent visit to India to participate in the 2019 International Coal Preparation Congress, he discussed with Sumit Maitra issues facing coal beneficiation sector and how India has performed compared with progress made in other coal producing economies.

How do you see the current overall state of coal beneficiation across the globe? While coal is expected to represent comparatively lower proportion of the total global energy mix, the total volume of production is expected to increase up until around 2030. In many countries, coal remains the prime resource of fuel for production of electricity. In 2018, coal has provided 27 percent of world energy requirements. The industry gets a bad reputation at times however all countries, involved in coal mining and its utilization, are very mindful of environmental consequences including production of green-house gases. If we look at the world production of coal over the last 20 years, there has been fairly steady increase till about 2012. Then production fell due to subdued demand till about 2016 and since then it has continued to increase again.

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Production is dominated by China which produces 3.6 billion tons or 46 percent of total production, dwarfing other producers. Statistics gathered from members of ICPC shows that Australia has a very high percentage of coal being washed because of industry is dominated by exports which require stringent quality specifications. So, just about all the coal is washed in Australia. It’s average plant size is 1240 t/h (tons per hour), which is a fairly bimodal distribution as there are large number of plants having 1,000 t/h capacity and also lot many having 2,000 t/h capacity. China has a huge number of washeries, more than 2,300 ranging from 250 t/h, which mostly are coking coal plants, while there are also many 550 t/h capacity and a large number of very big plants.

There are about 40 plants bigger than 2,200 t/h capacity going up to 6,000 t/h. China currently washes about 72 percent of its total production. In comparison, India washes 20 percent of its coal. US has about 190 plants ranging from 300 t/h to 1200 t/h but quite a number of idle at the moment. There 45 percent of coal is washed as most of the Western coal can be charged directly into the power station without the need to wash. What are the emerging trends in coal beneficiation across the globe? New coal beneficiation plants are being established mostly in China, Russia and India - countries where there is increasing production or where there is policy being implemented to wash more coal. In other countries, the focus is on improved

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Tear along the dotted line