Chief Editor Rakesh Dubey, Tel: +91 91633 48159, Email: rakesh.dubey@mjunction.in Executive Editor Arindam Bandyopadhyay, Tel: +91 91633 48016 Email: arindam.bandyopadhyay@mjunction.in Editorial Board Alok Srivastava, General Manager, MMTC Ltd Amitabh Panda, Group Director (Shipping & Logistics Operations), Tata Steel Group Anirudha Gupta, Director, P&H JoyMining Equipment India Ltd Ashok Jain, Managing Director, Saumya Mining Ltd Deepak Bhattacharyya, Chief – coaljunction, mjunction services ltd Ganesan Natarajan, WT Director, President & CEO, Ennore Coke Ltd Lawrence Metzroth, Vice President – Analysis & Strategy, Arch Coal Inc M K Palanivel, President – All India Bulk, Samsara Group P S Bhattacharyya, Executive Director, Deepak Fertilisers and Petrochemicals Corporation Ltd S N Choubey, Head – Commercial, ABG Cement Ltd Sandeep Kumar, EIC (Secondary Products), Tata Steel Ltd Shyamji Agrawal, AVP-Central Procurement Cell, Ultratech Cement Ltd Suresh Thawani, Managing Director, Tata Sponge Iron Ltd Advertising Soumitra Bose, Tel: +91 92310 00232, Email: soumitra.bose@mjunction.in Sumit Jalan, Tel: +91 91633 48243, Email: sumit.jalan@mjunction.in Subscription Rachita Das, Tel: +91 91633 48045, Email: rachita.das@mjunction.in Toll Free No.: 1800 4192 000 1. Press 8 for publication Email: publication.tbss@mjunction.in Design Debal Ray, Sobhan Jas For suggestions, feedback and queries, please write to coalinsights@mjunction.in
Registered Office mjunction services limited, Tata Centre, 43 J L Nehru Rd, Kolkata 700 071 Website: www.mjunction.in Corporate Head Quarters: Godrej Waterside, 3rd Floor, Tower 1, Plot V, Block DP, Sector V, Salt Lake, Kolkata 700091, Tel: +91 33 6610 6100, Fax: +91 33 6610 6187 Bhilai: Room 321, 3rd Floor, Ispat Bhavan, Bhilai Steel Plant, Bhilai 490001, Tel: +91 788 6451066, Tele/Fax: +91 788 2221071 Bokaro: Room 19, Old Admin Bldg., Bokaro Steel Plant, Bokaro 827001, Tel/Fax: +91 654 2226132 Burnpur: SAIL - IISCO Steel Plant, Materials Building, Order Department, Ground Floor, Burnpur 713325, Telfax: +91 341 2240107 Chennai: Basement, Begum Ispahani Complex, New No 91, Old No 44, Armenian Street, Chennai 600 001, Tel: +91 44 64624733-35, Fax: +91 44 25216536 Durgapur: Room 618, Ispat Bhavan, Durgapur Steel Plant, Durgapur 713203, Tel: +91 343 6510185, Tele/Fax: +91 343 2586946 Jamshedpur: Kashi Kunj, Ground Floor, Road No. 02, Contractors Area, Bistupur, Jamshedpur 831001, Tel: +91 657 6519985/86/90/91, Fax: +91 657 2230040 Mumbai: Jolly Bhavan II, 403, 4th Floor, 7 New Marine Lines, Mumbai 400020, Tel: +91 22 66510663, Tele/Fax: +91 22 66510662 New Delhi: C127, 2nd Floor, A One Plaza, Naraina Industrial Area, Phase I, New Delhi 110028, Tel: +91 11 65661774/65413288, Tele/Fax: +91 11 25897000 Noamundi: C/o TATA Steel Limited, Mines Purchase Cell, PO: Noamundi, Singbhum (West), Jharkhand 833 217, Tel: +91 9204791638/9234368606 Rourkela: Administrative Bldg., Room 624, 6th Flr, Rourkela Steel Plant, Rourkela 769011, Tel: +91 661 6514142/6511412 mjunction believes that all junctionites, customers, suppliers, partners, etc should practice the highest ethical standards in their daily operations. Report a concern to ethics@mjunction.in Copyright: All rights reserved. No part of Steel Insights can be reproduced or copied in any form or by any means without the prior permission of mjunction services limited. Please inform us if any copyright has been inadvertently infringed. Disclaimer: This document is for information purpose only. Certain information herein has been acquired from various external sources believed to be reliable. While we have taken reasonable care to compile this report, we in no way assume any responsibility for any error or discrepancy in regards to information contained herein. Readers are requested to make appropriate judgment without any prejudice or compulsion.
EDITORIAL Dear Readers, It’s disheartening to note how two major pillars of public sector…oh! Not again. Instead, let’s talk about how some people rejoiced the spat between Coal India and NTPC. Predictably, many of them blamed squarely one party, giving a clean chit to other. Yet there were others who are apparently unbiased. For instance, captive power producers should have been unconditionally happy, given the amount of disgruntle they had against both. Some businesses kept on guessing if the conflict would change things, benefitting their trade. And the media did what it must do, fanning the squabble. On the hindsight, the issue seems to be a not-so-big one, definitely not as big as the chit fund scam or the increasing crime chart in the capital city. But in some way, somewhere, it has left a message. Let’s try to read that note which, of course, was not circulated to the media. Why is Coal India so rigid about coal inspection at the receiver’s end? And why are the utilities so hell bent on demanding that? One explanation could be that the missing puzzle piece lies somewhere between the despatch and receiving point. The transit, to be specific! It is the larceny during transportation that Coal India wants to avoid. In fact, if they commit to factory gate inspection once, the miner will have to pay for the on-transit loss for all time to come. Similar is the case with the utilities. If they can commit the miner to it, their ontransit-losses would be insured for once and all. This may be the real cause, or may not be, but what is obvious is a lack of faith in each other. Despite both of them being public sector units and playing a largely complementary role, these companies behaved as rivals. Remarkably, it was the same reaction seen in case of the chit fund scam or the crime on streets. In these cases, the masses and media barged against the government and the police, respectively, even though neither the masses nor the government/police were at fault. More than the missing puzzle pieces – which are sometimes identified, sometimes not – this lack of faith between two complementary blocs is pulling us down altogether. This perhaps is what the message was. That said, let us take a quick look into the latest happenings in the coal sector. On expected lines, Coal India has ended up with a reasoable production growth after a couple of years. Coal prices, especially coking coal prices, have remained soft in international market. And imports into the country have continued to grow unabated. At the present juncture, it appears that India should focus more on the new coal projects in pipeline rather than crying wolf over the short term production growth. This has been rightly pointed out by Coal India chairman. The lack of new mining projects is a real cause of worry. Over and above that, the government’s indecision to chart out a clear roadmap for energy sector growth is what ails the economy. If coal is the future, let us mine it. If it is not, let us build up an alternative plan and implement that. Let us have faith in what we believe will serve us the best, because if we cannot decide that, nobody else will. Happy reading,
(Rakesh Dubey) Coal Insights, April 2013
3
Contents 24 Steam coal prices move in narrow range in April 26 Seaborne coking coal prices ease in April 28 CIL reports 452.19 mt of coal production in FY13, wants to scrap yearly targets 32 CIL’s coal supply to power utilities up 10.2% in FY13, assures adequate supply 34 Indian coal mining sector facing shortage of mining engineers 38 India’s power generation up 3.9% in FY13 40 UMPPs: Too little, too late? 42 Power generators urge CIL to go slow on coal supplies 43 Indian power utilities FY14 coal import target at 82 mt 46 Technology developments for augmentation of India’s coking coal resources 50 Govt considering proposal to divest 10% in CIL 51 ICECB conference highlights India’s coal beneficiation woes 52 US coal production expected to rise by 1% in 2013: EIA 54 RBCT’s Q1 coal exports up 1.5% 56 CIL could consider benchmarking prices against ex-mine price elsewhere 57 Articulated dump trucks could be a solution for monsoon loss of production 59 Coal logistic lags will impact India’s economic growth 60 Traffic handling by major ports down 2.5% in Apr-Mar 61 Railways coal handling up 17.9% in March 66 E-auction 68 Port data
4 Coal Insights, April 2013
6 | Cover Story
Looking beyond Singareni Constrained with aging mines, SCCL puts thrust on technology, seeks new mines elsewhere.
36 | Special feature
Coal quality row of NTPC and CIL: A petty issue or a national problem! Factors that seem to bother the PSU giants may actually be beyond their control.
44 | Technology
Will burning of coal be a thing of past? Researchers are trying to find ways to extract energy without burning the dry fuel
53 | International
New pet coke capacity in Middle East may augur well for India The Saudi plant may provide alternative and cheap source for Indian cement makers.
62 | Logistics
Krishnapatnam Port expects to see 40% growth in coal traffic in FY14 Coal handling may jump to 22 million tons in FY14 from 11 million tons two years ago.
Cover Story
SCCL seeks new mines outside Andhra
Looking beyond Singareni Arindam Bandyopadhyay & Rakesh Dubey
W
hen Sutirtha Bhattacharya took over as the chairman and managing director of Singareni Collieries Company Ltd (SCCL), he evoked spontaneous curiosity in India’s coal corridors. More than his antecedents as a senior IAS officer, the stupendous success of his illustrious predecessor drew instant comparisons. Will he be able to step into the shoes of S. Narsing Rao, the industry seemed to ponder. Hailing from Durgapur, a quiet township in West Bengal, Bhattacharya is a man of few words. It was not until the completion of his first year at Singareni that he let his voice be heard at any significant scale. Remarkably, when he speaks that voice seems more of a customer’s than that of the second largest producer of coal in the country.
6 Coal Insights, April 2013
A physics graduate from Kolkata’s prestigious Presidency College, Bhattacharya joined the Indian Administrative Service (IAS) after a brief stint with the insurance sector. His selection as the CMD of SCCL was a cakewalk as the government nominated him for the post. One year into the job, however, the situation appears to be a little challenging. The aging mines of Singareni pose concern for production growth; so do the high cost of underground mines that puts pressure on margins. But Bhattacharya, known for his practical ways, is never short of ideas, something that his predecessor was also known for. In a candid interview with Coal Insights, Bhattacharya spoke his mind about his early days as a young IAS officer with the Andhra Pradesh cadre, his present assignment and the future of Singareni.
Increase capacity, efficiency and reliability through One Source for coal processing To successfully compete in today’s challenging world economy, we know that you require innovative solutions to make your coal processing systems function at peak efficiency. Utilizing the latest in equipment technology, resources, and materials, we deliver the optimum design, equipment, and process support needed. FLSmidth is able to cover your coal beneficiation process from the beginning to end including: testing, design, engineering, crushing, grinding, classifying, screening, flotation, thickening and clarifying, vacuum and pressure filtration, pyroprocessing, material handling, slurry handling, automation, along with OEM quality replacement parts, modernization services and other after-sale services. www.flsmidth.com FLSmidth Private Limited FLSmidth House, 34, Egatoor, Kelambakkam (Rajiv Gandhi Salai – Chennai) Tamil Nadu – 603 103, India Tel + 91 44 4748 1000 / 2741 1000 Email: indiainfo@flsmidth.com l
l
l
l
Cover Story Excerpts: Let’s start from your growing up years, the days when you were graduating from the Presidency College in Kolkata. I hail from Durgapur in West Bengal. As a young boy, like everybody of my age, I too aspired to study science. In fact, in our early days, we all wanted to be physicists. So I got admitted to the Presidency College. That was how I came to Calcutta to study science. After passing out, however, I joined General Insurance Company – United India Assurance. But some goods friends of mine from Uttar Pradesh and Bihar convinced me to take the civil services exam. After I got selected the posting happened. These postings don’t come because of applications. So unlike all other postings, SCCL for me did not happen because I had applied for it. It happened because the government chose me for the position. There was no interview or anything of that sort. I was a nominee of the state government (SCCL is a JV of Andhra Pradesh and Central government). I continue to be in service and I continue to
be Principal Secretary. The process was the same with S. Narsing Rao as well. What was your initial experience like after you became an IAS officer? Andhra Pradesh cadre is a good cadre option, mainly because of the people. I served for almost eight years in tribal areas where you are allowed to plan and implement the development projects. I worked in ITD area and that was the best part of my life. We could do things we wanted to do and bring about positive changes in the lives of people. In the initial years, there is high enthusiasm and a flood of ideas. Also, it is possible to implement the government funded action plans in the interest of the people if you are working in the remote areas. Maybe there will be conflict areas of 5 percent, but in 95 percent of the cases you can, at least that is what I have seen in Andhra Pradesh. There, if you are doing good work, people will leave you alone and not disturb you. People will recognise your efforts and that is the best part of the job. Please tell us about your administrative career before SCCL? What has been your most crucial and satisfying project? I was with districts as ITDS and after that I came to Kolkata and served with the Ministry of Textiles (Jute Board). I was there for a little over five years. All the food grade jute products were introduced during my tenure, including geotextile.
In fact, this was a project I fondly remember. During that time, India was losing out to Bangladesh very badly and then we came out with food grade jute product. Soon, a new standard was evolved and under that we could reach out to countries which were otherwise difficult. Even today I find people in the jute business getting benefited for that endeavour and marketing these products to overseas countries. It was a grand project. We could understand the requirement of the international market; we could understand the technology to be brought in for the market and we could take that step in a synergic manner. I remember, representatives from 77 countries had come to Kolkata to discuss a product which was not that fancy. Those were golden days and during the twoday conference, all the countries together came out with a new standard for food grade jute product. So it was technology and marketing put together in the international market. That was satisfying. In addition to that, in the state government, many crucial projects came up from time to time. For instance, once we had to do a critical transmission project on time. We had a major problem in the transmission project and the situation was such that if we failed to do it within a particular time frame, the generator would be stranded. So we had to work with the time crunch and finish the project with some technical innovations for evacuation of power and save public money. These projects are immensely rewarding projects. Coming to SCCL, how would you describe your first year in SCCL? It had been a very eventful year. I think the entire coal sector is facing strong challenges, because the people or the society has
Currently we are in search for new technology to do the mining in a more productive manner. Also, the government of Andhra Pradesh has been requesting the Government of India to allot new areas outside the state for mining by SCCL. We are also in joint venture (JV) with some of the major companies like NTPC and MMTC to do mining for them.
8 Coal Insights, April 2013
Cover Story
SCCL’s performance highlights for 2012-13 ♦♦ Company produced 11.60 million tons (mt) from underground (UG) mines with an incremental production of 1 mt of 9 percent in UG mines over last year. Opencast production during the year stood at 41.59 mt. The present UG:OC ratio in SCCL is 22:78 whereas all India UG:OC ratio is 10:90. ♦♦ Company despatched 53.20 mt coal to its customers recording 3.6 percent growth over previous year supply of 51.39 mt. ♦♦ Coal supply to power utilities during the year was 41.31 mt evincing a target satisfaction of 128 percent and registering a growth of 4.5 percent compared to the corresponding period of last year. ♦♦ SCCL despatched 204.14 LT coal to APGENCO Power Utilities which is all time high record and stood at 167 percent against linkage of 122.40 LT. This is 9 percent more than the previous year supplies of 187.27 LT. ♦♦ Similarly, coal supply to NTPC is 128.41 LT and stood at 126 percent of the linkage during this financial year. ♦♦ Coal stocks at SCCL linked power plants are at the levels of 10 to 15 days consumption and none of the power utilities linked to SCCL were taken outage on account of coal availability. With the result the NTPC Ramgundam and APGENCO achieved 91 percent and 84.3 percent PLF respectively against national average of 73 percent. ♦♦ Coal freight contributed about 38 percent of total South Central Railways freight during the financial year 2012-13. ♦♦ Gross turnover (provisional) during the year 2012-13 was `12,846 crore – the highest ever in the history of SCCL; amounts to 18 percent of growth over previous year. ♦♦ Provisional contribution to exchequer is around `3,580 crore towards Royalty, Sales Tax, Corporate Tax, Clean Energy Cess, Works Contract Tax and Entry Tax compared to `2,980 crore last year with an increase of 16 percent. This includes `1,784 crore to the State Exchequer (Royalty, Sales Tax, Dividend etc.) and `1,796 crore to Central Government (Corporate Tax, Dividend, Excise, Clean Energy Cess).
become an energy dependent society. At the same time, in the entrepreneurial class there is a lot of unrest. People want to get their things done as quickly as possible. As a result, we have to really buckle our belt. There are three things that we need to focus on production. The first is quantity of coal, i.e. whatever we have promised to give, we must give, or at least we must strive for that quantity. Second is the quality of coal. You must give what you have promised to give. And third is price. In any economic product, the substitution of cost will be very quick because we are becoming an integrated economy. In the power sector, there is an important concept of merit order despatches (under the Electricity Act) which stipulates that cheaper power be provided to
10 Coal Insights, April 2013
consumers first and the more expensive power can be supplied only if cheaper options are not available. This merit order despatches is going to be a very strong phenomenon and for that our cost, quantity and quality, this triangle has to be much more coordinated. In SCCL, the challenge has been that the geological conditions in some places are not favourable or are rather adverse. We don’t have a situation where stripping ratio is 1:1 or more favourable. So the challenges are there, particularly in the opencast projects. Mining itself is an ecological challenge. Because all said and done, the perception of the people about opencast mining – not only coal but other minerals too – is that it impacts the environment in a more direct manner.
So the pollution and the perception are two things that are visible. The coal industry does not cause any toxic pollution, of course, but noise and dust and other things are definitely there and then you need to be more careful to see that at least those parameters are always kept within the range. Talking about environment, what is the situation like so far as environment and forest clearances are concerned? So far as environmental clearances are concerned, miners are getting those clearances…the clearances are certainly coming, but it is taking a finite time. The problem is that coal seams are found near the forests or wildlife sanctuaries and therefore those clearances take their own time. But in case of power plants, the projects come up on a finite land and in a pre-fabricated manner, and they come up fast. Clearances for power plants are not a big issue. Now, these power plants are hungry for coal. And the coal has to come from mines which are near the forests and also require significant displacement of local populace. So there is sometimes a mismatch.
Current profitability of SCCL’s operations yy Overall average cost of coal production in the company is `1,850 per ton during 2012-13, compared to `1,697 per ton during last year. yy Average sales realisation is around `1,857 per ton, compared to `1,691 per ton of coal during last year. yy Average Earning per Man Shift (EMS) is `2,178 for the year 201213, compared to `1,973 for 2011-12. yy Company sold 37.59 LT through spot e-auction to customers compared to 29.11 LT last year. yy Additional revenue generated through e-auction over notified price is around `353.33 crore. yy Profit after tax (provisional) is `341.40 crore.
Cover Story But now, everybody is taking a proactive stance. Not only the Ministry of Environment and Forests (MoEF) is looking at it proactively, but Ministry of Coal (MoC) is also taking up the matter strongly. I am sure that when everybody is working together, the time span will be far more practical. So, there is a qualitative change in the process? I think there is sensitisation. But I must say that we have to go some way and we also must understand that in certain areas permission may not be forthcoming. We must be able to identify those projects and get those projects out of our minds. What is your total coal linkage at present? What is the projected increase in consumption through linkage till 2016-17? Do you have any plan to import to meet the supply gap in coming years? As on April 1, 2013, total sector-wise linkage on SCCL is 53.37 mt. Of this, the power sector accounts for the highest linkage of 27.71 mt. Other than that captive power plants account for 4.55 mt, cement 9.05 mt, sponge iron 1.96 mt, heavy water plant 0.60 mt, other industries 4.10 mt and e-auction 5.40 mt. It is expected that demand for coal from SCCL by the end of the Twelfth Plan (2016-17) will be around 61.0 mt.
At the moment there is no such proposal (for price increase). Before any such decision is taken, we have to analyse if there is a need to increase prices. In fact, such analysis is being done all the time as this is a continuous job of the marketing department. As for the import plan, at present SCCL does not have any plan to import coal. It is said that there is limited scope before SCCL to increase production because of limited reserves. How do you think the company would be able to meet its future challenges? Before coming to how we plan to deal with future challenges, let me brief about the current scenario. SCCL is the only coal producing company in south India, currently producing about 9.6 percent of national coal production with about 8 percent reserve base. This year SCCL is operating 34 underground mines and 15 opencast mines. The current production mix of SCCL is 78 percent (41.59 mt) from opencast mines and 22 percent (11.59 mt) from underground mines. Most of the underground mines at present are being operated up to a depth of 350 mtrs except a few mines that are operating beyond 350 mtrs depth. The working-life of 49 mines under
Current sector-wise linkage of SCCL (in mt)
30
27.71
25 20 15 9.05
10 4.55
5
1.96
4.1
5.4
0.6
0 Power
Captive Power Plant
12 Coal Insights, April 2013
Cement
Sponge Iron
Heavy Water Plant
Other e-auction Industries
operation are: a) up to 09 years life: 12; b) 10 to 25 years life: 12; c) 26 to 50 years life: 17; d) more than 50 years life: 8. It is true that about 50 percent operating mines especially underground mines are more than 25 years, but the company has taken a number of measures, such as: a) man riding systems for transport of men from surface to working places; b) mechanical roof bolters for drilling and resin capsules for roof bolting; c) improved ventilation systems; and d) near phasing out of hand section drills with SDLs/LHDs so as to ensure sustainable production from the old mines. Besides, currently we are in search for new technology to do the mining in a more productive manner. Also, the government of Andhra Pradesh has been requesting the Government of India to allot new areas outside the state for mining by SCCL. We are also in joint venture (JV) with some of the major companies like NTPC and MMTC to do mining for them. Right now we are not getting coal share. Basically, the roadmap appears to be that we may become the mining front of those JVs, but not the owner front. We may go for appointing a MDO or we may mine on our own. That decision would be taken in consultation with the mining partner, in this case NTPC or MMTC. This decision would be taken only after the Mining Plan is available as after that we will see what
Cover Story Break-up of the number of mines by working life
price? It is the landed price of coal at the factory gate. We will have to ensure that factory gate price of our coal is cheaper so that customer satisfaction remains and SCCL does not suffer losses. This is the win-win situation for both.
17
18 16 14 12
12
12
10
8
8 6 4 2 0 up to 9 yrs
10-25 yrs
kind of responsibility each of the partners can take. Suppose, if NTPC is allotted a block, it will form a JV with a mining company which is the requirement. Then we will guide them and see that effective mining plan takes place and mining takes place as per mining plan and they will get access to coal and we will get some money out of that on per ton basis or whatever be the normative cost and this has to be in area which is outside Andhra Pradesh. How many such JVs have been signed so far and when do you expect these projects to fructify? There are actually three JVs so far as I remember. One is with NTPC and the other is with MMTC and the third is with Andhra Pradesh Mineral Development Corporation. The unique feature of these JVs is that coal in question is outside Andhra Pradesh, in places such as Odisha, Madhya Pradesh or Jharkhand. May be it will happen over the next twothree years. As I said, the JVs have already been signed and if the projects get clearances on time, the mining may start in next twothree years. What is your view on the recent spat between coal companies and some power producers? Do you think there is a pricequality mismatch as claimed by some consumers? Regarding the quality issue, we did not have
14 Coal Insights, April 2013
26-50 yrs
more than 50 yrs
any problem because we already have a joint sampling provision. For some companies like MAHAGENCO, I think there is also a provision of third-party sampling and for NTPC is it joint sampling. We must trust each other and go ahead. As for the pricing issue, we must understand that price is always a dynamic phenomenon. Our price should be such that it should cover my cost, give us fair return and still will be acceptable to the consumer. That means it should be comparable to the cost of comparative resources. SCCL did not have any problem so far in determining its price because on landed cost basis our cost is always lower. Suppose you take equivalent coal from “x” place and then take that to our customer. Then you take our coal and take that to the same customer. How do you compare the
Of late, SCCL has been passing on the increase in fuel cost to consumers through fuel surcharge. What has been the reaction from the market? Actually more than 20 percent or about 22 percent of our total coal production comes from underground mines. The balance 78-80 percent comes from opencast. Out of that 78-80 percent, one-third of production/ OB removal is through departmental means and the balance two-third is through the contractors. However, the diesel is supplied by us to avoid any confusion. So if diesel price goes up, it means the OB cost is also going up directly. We calculate that cost and pass it on to consumers. There is no complaint till now from consumers because we ensure that our landed cost is always cheaper. Generally, in case of an increase in cost elements, we conduct sensitivity analysis. We do not have a perfectly elastic cost matrix. We have to see how to reduce the cost of production and what is the comparative price. We have to see that whatever cost we incur, (a) if there is way to reduce that, (b) if there is more efficient way of doing production. At the same time, suppose we determine that optimal cost increase is necessary which has to be
Steps being taken to augment coal production ♦♦ Three underground mines – KK 6&7, Kasipet 2 and Jallaram (RFR is under preparation will become operational during Twelfth Plan. ♦♦ Six new opencast projects (JVR OC II, Kistaram OC, MNG OC, Abbapur OCP , RK OC I, RG OC II Ph 2) are planned to start production during this period. ♦♦ Eight underground mines (21 Incl., PK 1, GDK 7, GDK 8, GDK 8A, GDK 10A, RK1A, RK8) are likely to be closed during this period due to exhaustion of UG coal reserves or likely conversion into opencast mines. ♦♦ One high capacity Long Wall project (ALP) with ultimate capacity of 2.81 MTPA is expected to start production during 2013-14. ♦♦ Another high capacity Long Wall project (LKP) with ultimate capacity of 2.747 MTPA is expected to start production during 2014-15.
Cover Story
SCCL’s projection for production growth in Twelfth Plan SCCL has planned for an absolute production growth of 5.67 mt by the end of Twelfth Plan in comparison to the end of Eleventh Plan (2011-12: actual production 51.33 mt). This is in the backdrop of past decadal performance of the company achieving a growth rate of 36 percent and 19 percent over previous Five Year Plans production during Ninth and Tenth Plan periods. Company achieved 6.78 percent compound annual growth rate (CAGR) during Eleventh Plan period, compared to all India CAGR of 5 percent and CIL’s 4.04 percent. This growth was realised from the expansion of existing mines and starting a few small patches of OC’s and the potential with the current technologies is nearing plateau. Considering the closing of a few mines due to exhaustion of UG coal reserves, the production projections of SCCL during Twelfth Plan period are given below (in mt): Year
2012-13
2013-14
2014-15
2015-16
2016-17
Target as per WG (XII Plan)
53.10
54.30
55.00
56.00
57.00
Target as per Annual plan
53.10
54.30
–
–
–
Actual
53.19
–
–
–
–
Three underground mines – KK 6&7, Kasipet 2 and Jallaram (RFR is under preparation) will become operational during Twelfth Plan. One high capacity Long Wall project (ALP) with ultimate capacity of 2.81 mtpa is expected to start production during 2013-14. Another high capacity Long Wall project (LKP) with ultimate capacity of 2.747 mtpa is expected to start production during 2014-15. Six new opencast projects (JVR OC II, Kistaram OC, MNG OC, Abbapur OCP, RK OC I, RG OC II Ph 2) are planned to start production during this period. accommodated in the price, then we must ensure that price does not increase the price of substitute product. That is what is required and that is called sound principle of pricing. What is your per ton cost of production? It varies from mine to mine. The least cost will be outsourced opencast operations, which will be around `1,100 per ton. But the average cost of production, including that of departmental mining, would be roughly around `1,800 per ton, because of the huge cost involved with underground mining. In underground mining, the average cost is around `3,500 per ton. There is one mine where per ton cost of production is around `5,000 per ton. We do cross subsidisation so that even that coal is sold at much lower price. Now, underground will always be a drag; but we cannot write off history. Had those
16 Coal Insights, April 2013
underground mines not been there, where would you have been today? As it ages and productivity goes down, we have to take up newer projects. But all said and done, we cannot lose coal. In view of the increase in production costs, is there any proposal to increase coal prices? At the moment there is no such proposal (for price increase). Before any such decision is taken, we have to analyse if there is a need to increase prices. In fact, such analysis is being done all the time as this is a continuous job of the marketing department. Recently, Planning Commission’s Deputy Chairman Montek Singh Ahluwalia said that 75% of domestic coal should be benchmarked with international prices. What is your view? This is purely a government policy and I should not be responding to that. Even in gas sector, some people are asking for that parity with international prices. If you go for underground mining all your capital investments come at international benchmark prices. Nothing is made in this country. Finally, if you work out the cost detail, you have to get somewhere in between.
Cover Story working in SCCL, but that is not a Long Wall in true sense. We do it directly. There is nobody in between that. Besides Long Wall how many continuous miners you have right now and do you plan to increase that number?
SCCL’s recent hike in surcharge not resented SCCL production portfolio mainly consists of G9 and below grades (G5 2.2 percent, G7 15 percent, G9 25 percent, balance 58 percent is G8 and below). SCCL last revised Basic Coal Prices of erstwhile G & F grades (present G15 & G13) in 2004; E, D & C grades (present G11, G9 and G7) in 2009, and B & A grades (present G5 & G2) in 2012. Technically, the company has not revised prices of thermal utilities for more than three years and nine years for C-E & F-G respectively. However, SCCL has started fuel surcharge at `27 per ton from 2011 due to frequent revision of imported crude oil prices and India being dependent on imported oil. Further, due to high stripping ratio i.e. 1:5.7, the diesel component in excavation is very high compared with other mines of India. It is levied to neutralise the cost component of diesel only. Hence, fuel surcharge from `85 per ton to `169 per ton was raised during March 2013 to nullify the effect of diesel price increase for the bulk consumers by `11 per litre. This amount is arrived as company consumes around 6 liters of diesel for extracting one ton of coal including 5.7 Cu.M. OB. Consumers’ response
SCCL landed cost of Coal to its customers is cheapest when compared to other sources including indigenous coal. Hence there is not much resentment among our customers. SCCL supplies around 77 percent of its coal to power utilities including captive power plants. Coming to technology, recently you had installed Long Wall in one of your projects. How that will make difference to SCCL’s overall scheme of things? We are installing one Long Wall at our Adriala project through departmental means. That is likely to be operational by November this year. Once it is in place, the underground production will go up. It will be up by around 1 million tons (mt) this year. The rated capacity of Adriala is around 2.8 million tons per annum (mtpa), but it will take us more than a year to reach the rated capacity.
18 Coal Insights, April 2013
In addition, we have one more Long Wall project at KTK in which a Technology Provider and Operator (TPO) is involved. However, that has not progressed very fast. There is one old Long Wall which is already
It is not about the numbers. We always feel that there should be an underground strategy. Underground mining is something which, if we can make it safe, will take away a lot of ecological dis-advantages. At the same, it is a costly affair as cost of mining goes up substantially. The basic reason is geologically if the seam is slopey, you cannot do continuous mining there. It depends upon continuous miner or tailor made continuous miner. Underground mining has to be developed keeping in mind India’s geology and other factors and for that I am sure some task force would be constituted. We will also participate in that task force as we have more stake in underground mining than any other coal company in the country. As I said, nearly 22 percent of our total production comes from underground mining as against national average of less than 10 percent. CIL Chairman recently said that they are planning to do de-pillaring and allowing the roof to come down to extract coal locked in board and pillar method mining. Is there any such plan with SCCL? We have not yet looked at it, but we have to explore the option. For mining or extracting coal from those pillars, surface right has to be there because subsidence will not be possible without surface right. However, at this point in time even CIL has said that they are only looking at it and not going to do it immediately.
Production from underground mines of SCCL during Twelfth Plan (mt) 2012-13 (Actual)
2013-14 (Annual Plan)
2014-15 (as per XII Plan WG)
2015-16 (as per XII Plan WG)
2016-17 (as per XII Plan WG)
UG production
11.597
14.400
15.600
15.682
15.982
Total SCCL production
53.190
54.300
55.000
56.000
57.000
21.8
26.5
28.4
28.0
28.0
Year
% share
Cover Story
Areas of future diversification 1. Mine consultancies 2. JV’S 3. Coal Washing 4. Contract Mining 5. Underground Coal Gasification (UCG) 6. Coal Bed Methane (CBM) 7. Power Generation 8. Special Economic Zone (SEZ) 9. Manufacturing of explosives, Resin capsules and few other consumables. 10. Manufacturing of low value fabrication/ manufacturing items like roof bolting material, conveyor rollers & sections etc. Although you have a significant share of UG mining, overall UG mining is steadily declining in India. What is your take on the viability of UG mining in India? Should the miners go for renewed thrust on UG mining through mechanisation or stick to OC mining? As I mentioned, during the last four years in SCCL, the production share from underground mines has been around 22 percent. After commencement of production
from Long wall panels at ALP and KLP and opening of new underground mines in SCCL, underground coal production will increase from 21.8 percent (actual during 2012-13) to 28 percent in 2016-17. That said, I must say that the choice of mining method is largely decided by a number of parameters. These include the depth of coal deposit, thickness of coal deposit, gradient of coal deposit, structure of coal deposit, Useful Heat Value (UHV)/GHV of coal deposit, presence of geological disturbances such as Faults and Folds, ratio of coal (ton) to overburden (volume) i.e. Stripping Ratio, ground water and hydrogeology, nature of Roof rocks, physico-mechanical properties of coal deposit and Roof rocks, surface features such as Railways, public buildings, road, rivers, nalah, historical features etc., and nature of surface land – forest, non-forest, public and private, capital investment required etc. Do you have any plan to venture out into new areas like power generation? We are already working on a 1,200 MW power plant and installation is already on. I think it will take another three years to be on stream as is the norm with coal fired power plants. The industry norm is 36-42 months. Other than power, there are a number of segments where we would like to
establish our footprint. The Business Plan for the future growth of SCCL has been prepared which comprises of around 10 diversification activities. These include mine consultancies, JV’s, coal washing, contract mining, Underground Coal Gasification (UCG), Coal Bed Methane (CBM), Special Economic Zone (SEZ) and manufacturing of explosives, Resin capsules and a few other consumables. What is your view on the new Land Bill? We have to see how the Act comes up. We do land acquisition as per land acquisition Act. Any capital cost increase will have bearing on the cost of allied products. There is a method of cost determination and norms for price determination. But we will look into it when it comes. We do land acquisition through consensus. Even today if you see in SCCL, the land acquisition is always done through consensus. We pass consent order which means we give exactly what the land owner wants. So basically, we are not facing any major problem so far as land acquisition is concerned. We don’t make any reference to the court order and pay whatever the owners want. Our cost of land varies from place to place and it is determined by the collectors of that particular area. What is the status of beneficiation projects at SCCL? We already have two washeries, including one at Ramagundam, which are running with total capacity of around 1.3 mtpa. We have a model which nowadays CIL is trying to adopt, where the coal and everything is ours, but we are trying to see how this can be improved. CIL is going for large scale outsourcing of production through MDOs. What is SCCL’s stand on this issue? What is your current share of production that comes through contract mining? SCCL has not appointed any MDO for complete mine i.e. for extraction of coal and
20 Coal Insights, April 2013
Cover Story OB. However, SCCL has engaged TPO for extraction of coal by Longwall mining through global enquiry in KTK LW UG mine with 2.7 mtpa. The target set for this contract for the year 2013-14 is 0.13 mt. At VK 7 Inc and GDK11 Inc mines, Continuous Miners are introduced under risk gain sharing basis, i.e. company procured the equipment on outright basis, but the operations including maintenance are carried out by the manufacturers for 5-7 years on per ton basis. Continuous Miners are working satisfactorily and producing about 4.5 LT/ Continuous Miner per year. Further, SCCL outsourced Surface Miner for coal production in Koyagudem OCP with a rated capacity of 2.0 mtpa and Medapalli OC mine through Highwall Mining with a production capacity of 1.0 mtpa. Total production of coal through various business models for the year 2013-14 are as following: a) Koyagudem OCP – 2.00 mt, b) Highwall mining at medaplli OC mine – b 1.00 mt. The total quantity will be 3.00
22 Coal Insights, April 2013
mt. The current share of production that comes through these models is about 5.5 percent.
role in one’s success. But that does not mean we should depend solely on that. Instead, let us give our best and keep faith in destiny.
Coming back to where we started from, what are the factors that helped you to achieve success in life? Do you consider destiny as a driving force behind success?
How do you look at yourself as a person and as a professional?
Along with perseverance, the support and cooperation extended by your colleagues and the support given by people for whom you work are equally important in achieving desired results. I feel that if you are ready to be humble and reach out to others, others will also reach out to you. And of course, I believe that luck is a major factor in success. I always believed that. There are many who may feel that they are the best and that is why they are here, but I always believe luck is a critical factor which may give a boost during a particular instance. For instance, during the IAS exam, a particular question in the interview can make all the difference in rank. To my mind, destiny does play a major
We are professionals in the art of administration. I feel that our role is in quick assimilation, coordination, having strong respect for the technocracy and absolute faith in overall public good. So if the purpose is overall public good, and if the way is known as strong technocracy, then riding it well by proper coordination and synergy, has to be the way forward. The better we do it with our coordination and communication skill, I am sure, the greater public interest is going to be served. Whether I am successful or not is very difficult for me to judge. Any success will be judged by posterity. I feel everybody is successful because even a failure of today may be considered a success tomorrow and a success of today may be considered a failure tomorrow.
coal market fundamentals
Steam coal prices move in narrow range in April Coal Insights Bureau
I
mported steam coal prices moved in a narrow range in April with prices of South African coal rising marginally, while Australian and Indonesian coal prices easing a little amid scant buying interest. South African coal (6000 kcal/kg NAR) prices rose marginally to $82.4 per ton fob on April 23 compared to $79.8 per ton fob on March 28. Australian coal (6300 kcal/kg GAR) prices eased marginally to $87.2 per ton fob on April 23 compared to $89.8 per ton fob on March 28. Indonesian coal (5900 kcal GAR) prices eased marginally at $74 per ton fob on April 23 compared to $75.7 per ton fob on March 28. Prices of Indonesian coal (5000 kcal/ GAR) fell slightly to $58.8 per ton fob on April 23 compared to $59.8 per ton fob on March 28. Buyers expect a weakening in international coal prices primarily on slower economic growth in China, market sources said. The overall demand from China is reported to be falling and its impact is visible on Indonesian coal prices even as Australian
SLC allows WCL to charge higher price
coal prices fell marginally, the sources said. Meanwhile, Indian cement makers expect South African coal prices to remain soft in coming few weeks on low demand from Europe even as prices firmed up a bit. Indications from Chinese buyers for the second quarter were not positive and some were even bearish for the third quarter of this fiscal year. Chinese traders were willing to pay about $82-82.50/ton for cargoes of 5,500 kcal/kg NAR imported coal on a delivered basis, while end-users were ready to pay as much as $83.50/ton CFR. However, there was some supply tightness being seen for 5,500 kcal/kg NAR coal from both Australia and South Africa. Sentiment at a recently concluded industry gathering in Beijing was “bearish” and not many deals were reported during the event. Quite a few Chinese participants believe that their domestic price doesn’t have a huge amount of room to come lower and most expect they are close to the bottom of the price level. Chinese domestic prices have fallen in recent weeks and it made “perfect sense” for Chinese end-users to blend lower calorific
Steam coal FOB ($/ton) Dates
SOUTH AFRICA (6000 NAR)
AUSTRALIA (6300 GAR)
INDONESIA 5900 GAR
INDONESIA 5000 GAR
INDONESIA 4200 GAR
INDONESIA 3800 Kcal GAR
1-Apr
79.7
89.8
75.8
59.8
41.9
35.9
2-Apr
80.25
89.5
75.5
59.6
42
35.9
3-Apr
80.7
89.5
75.5
59.2
42
35.5
4-Apr
81
90.4
75.25
59
42
35.5
5-Apr
81.6
91.4
75
59
42
35.5
8-Apr
82
91.7
74.5
59
42
35.5
9-Apr
82.5
91.75
74.7
58.8
41.8
35.5
10-Apr
83.5
91.75
74.7
58.6
41.85
35.6
11-Apr
83.8
90.5
74.7
58.6
41.85
35.65
12-Apr
84
90.75
74.7
58.6
41.85
35.65
15-Apr
83.1
89.75
74.5
58.5
41.75
35.6
16-Apr
82.35
88.85
74.4
58.45
41.7
35.6
17-Apr
81.9
87.75
74.1
58.2
41.5
35.5
18-Apr
81.8
87.4
74.1
58.2
41.5
35.5
19-Apr
81.5
87.3
74
58.1
41.4
35.5
22-Apr
82
87.5
74.2
58.3
41.5
35.6
24 Coal Insights, April 2013
In India, the standing linkage committee (SLC) has allowed Western Coalfields Ltd (WCL) to charge higher price for coal from its customers, a move that will help it recover initial investment on new projects. Although this decision may boost WCL which will be able to earn at least 12 percent on initial investment, its parent Coal India Ltd (CIL) will not be much impacted, said analysts. WCL had earlier sought price revision because around 25 of its new projects were increasingly becoming unviable due to higher manpower and infrastructure cost. While apprising shareholders about company’s performance in 201112, DC Garg, chairman and managing director of WCL, had pointed out that all projects may not yield 12 percent internal rate of return at 85 percent capacity utilisation level, due to higher relief and rehabilitation packages which are to be provided while acquiring land for upcoming projects. Meanwhile, the SLC has left the final price hike decision with the coal ministry. Price revision entails shifting pricing formula from notified to costplus method which will push up price per ton by at least `500 and therefore WCL customers will have to pay around `1,400-1,600 per ton of coal. While notified price is decided by the government, cost-plus method is based on the actual cost incurred on a particular project. WCL’s 25 projects with production target of 45 million tons (mt) will cost around `5,000 crore and the firm needs to recover initial cost by hiking price. value coal with their higher calorific value domestic material for the power plants. Demand for Indonesian lower calorific value coal remained relatively strong although there were limited cargoes being offered in the spot market for prompt loading, sources said.
coal market fundamentals
Seaborne coking coal prices ease in April Coal Insights Bureau
T
he seaborne metallurgical coal market saw continued drop in April as Chinese participants backed away from procurement expecting further declines in steel prices and further macro-economic worries. According to information available with Coal Insights, the premium variety was quoted at $150.5 per ton fob Australia on
April 23, down from $154 per ton on March 28. Peak downs prices fell to around $151.50 per ton on April 23, down from $155 per ton on March 28. The semi-soft variety was quoted at $110 per ton on April 23 compared to $112 per ton on March 28. Mills were negotiating for lower May prices with domestic miners, sources said, so buyers were sitting out of the import market. Trade sources said although talks were on, deals were very thin.
Coking coal FOB Australia ($/ton) Peaks Down (CSR 74%, VM-20.7%, Ash-9.7%, S-0.6%, P-0.03%, TM-9.5%)
Prem Low Vol (CSR-71%, VM21.5%, Ash-9.3%, S-0.50%, P-0.045%, TM-9.7%)
19-Mar
159
159.5
20-Mar
158
157
21-Mar
158
156.5
22-Mar
157.5
25-Mar
156.5
27-Mar 28-Mar
Dates
HCC 64 Mid Vol (CSR-64%, VM25.5%, Ash-9.0%, S-0.6%, P-0.050%, TM-9.5%)
Semi Soft Coking Coal
Met Coke
115.5
296.00
142
114
295
142
112.5
295
156
142.5
112.5
295
155
141.5
112.5
296
156
154.75
141
112.5
296
155
154
141
112
294
1-Apr
154.5
154
112
294
2-Apr
153
152
137.5
111
291
3-Apr
152
151
137.5
110
291
4-Apr
151.5
150.5
5-Apr
151.5
150.5
8-Apr
151.5
150.5
9-Apr
151.5
150.5
137.5
111
291
137
111
290
110
290
136
109
288
10-Apr
151.5
150.5
136
108.75
288
11-Apr
152
151
135.5
108.5
288
12-Apr
152.5
151.5
108.5
288
15-Apr
152
151
108
288
16-Apr
151.5
151
108
287
17-Apr
151
150
107.5
287
18-Apr
151
150
107.5
287
16.5
19-Apr
151
150
16.5
107.5
287
22-Apr
151
150
16.5
107.5
287
23-Apr
151.5
150.5
16.5
107
286
26 Coal Insights, April 2013
For second-tier HCC, liquidity outside China increased on relatively better buying appetite. Continued uncertainty in the near-term steel market created some fears in China, with buyers withholding any purchasing decisions. Liquidity appeared thin, as a result of uncertainty with no spot transaction heard. With current faltering steel prices, raw materials procurement such as coking coal would understandably have to wait, sources said. Quarterly contracts
Meanwhile, BHP Billiton-Mitsubishi Alliance (BMA) and Japan’s Nippon Steel & Sumitomo Metal Corporation have agreed on coking coal prices for April-June at $172 per ton fob Australia, up $7 per ton from Q1 levels, market sources said. Such a deal would mean a 4.2 percent increase over Q1’s price of $165 per ton, which had also been agreed by BMA and NSSMC. The first quarterly contract between a large miner and steelmaker is usually followed by other major Australian miners. The price would apply to BMA’s leading premium low-volatile hard coking coals Peak Downs and Saraji. Its other premium HCC brands, Goonyella and Illawara, were reportedly settled at $169 per ton, up from $161 per ton in Q1. Steel mills described the deal as “a little on the high side,” however, adding that it was perhaps not completely reflective of the market. Peak Downs is a premium low-volatile hard coking coal with 74 percent coke strength after reaction or CSR, 20.7 percent volatile matter, 9.7 percent total moisture, 10.5 percent ash, 0.6 percent sulfur and 500 dial divisions per minute of maximum fluidity. Met coke
Imported metallurgical coke prices dropped to $286 per ton from $294 per ton in April on low buying appetite. Poorer steel market fundamentals have resulted in the bearish trend in the prices. In India, coke prices eased by around ` 400 per ton to ` 17,000 per ton (basic) on low demand conditions prevailing in the market. The prices are likely to be around the same levels in rest of April, sources said.
Feature
CIL reports 452.19 mt of coal production in FY13, wants to scrap yearly targets S Narsing Rao, CMD, CIL Projects in pipeline
Coal Insights Bureau
C
oal India Ltd (CIL) has finished the year 2012-13 (FY13) with total coal production of 452.19 million tons (mt), around 12 mt lower than the target of 464.1 mt set for the year, CIL chairman S. Narsing Rao said. Although the total production in FY13 was 3.8 percent (or 16.35 mt) higher than 435.84 mt produced in 2011-12 (FY12), the yearly growth rate was lower than the above 6 percent growth reported by the coal monolith for the first six months (April-September) of 2012-13. This was primarily because of the production loss during the monsoon months and the two-day strike in February 2013 which affected the second half output. Nevertheless, this was the highest production growth in four years and the company was confident of maintaining the
28 Coal Insights, April 2013
performance in 2013-14. Rao, however, has already expressed his desire to do away with the practice of setting annual production targets and instead focus on long-term sustainability in coal production in the country. As for total coal offtake in FY13, Rao said, it was estimated at 465.19 mt, slightly lower than 470 mt targeted for the year. The total offtake was 7.4 percent (or 32.11 mt) higher than the figure reported for FY12. The company’s closing stock stood at 57.91 mt as on April 1, 2013. The volume reported was 12.97 mt lower than 70.88 mt recorded for April 1, 2012, he said. Increased availability of railway rakes has helped CIL reduce the pithead stock in 2012-13. The average number of rakes loaded per day in 2012-13 was 186.2, which was higher by 18.5 rakes per day from 167.7 rakes per day loaded in 2011-12, he added.
While discussing the yearly performance, the CIL chairman stressed on the future potential of CIL projects which were pending statutory clearances and other issues. Rao said as many as 190 projects of CIL with production potential of around 300-360 mt per annum is struck on lack of mandatory forestry and environmental clearances. “I don’t have exact figures, but around 60-70 projects are struck due to lack of forest clearances and another about 120 projects are struck for lack of environmental clearances,” Rao said while answering to a query from Coal Insights. He, however, said the numbers keep on changing every day, but it is not that all the projects are struck at Ministry of Environment Forest (MoEF) level. “The projects at struck at various levels like DFO, public hearing, conservatory, forest clearance and environmental clearance and not with MoEF along. There are various stages of clearances and projects at struck at various levels,” Rao said. Asked what would be potential production from these projects, he said, “I think it would be 300 to 360 mt. But again this is hypothetical question because the production matters only once we get the clearance.” Rail corridor
Yet another area in focus was enhancing the rail connectivity to increase despatch which would help increase coal production at CIL mines, Rao said.
Feature Commenting on the development of the proposed railway line projects in Chattisgarh to improve coal transportation from the mines of South Eastern Coalfields Ltd (SECL), he said it is unlikely to be on stream in the Twelfth Five Year Plan period i.e. up to 2016-17. “However, two other rail projects -IB Valley and Tori-Shivpuri – are likely to be operational in calendar year 2016,” he said. “Both Tori-Shivpuri and IB Valley projects are going on, albeit a bit slowly. To the extent, they have been awarded, the project is going on. But the problem is there is huge gap in between related clearances like forest clearance as well as land acquisition related issues,” Rao said.
N Kumar, Director (Tech), CIL
India’s coal production up 3.2% In line with the performance of Coal India Ltd (CIL), India’s coal production was up by 3.2 percent in 2012-13 (FY13) to 557.661 million tons (mt), compared to 539.95 mt in 2011-12 (FY12), according to provisional data released by CCO. In absolute terms, this showed an increase of nearly 18 mt, of which CIL’s contribution was 16.3 mt. India’s coal production in February 2013 fell 8.64 percent as compared to January because of lesser number of working days during the month coupled with industrial strike for two days at various mine locations, according to provisional data available with Coal Insights. India’s coal production, demand and despatch (in mt) 900 800 700 600 500 400 300 200 100 0 2010-11
2011-12 production
demand
2012-13 supply
Source: CCO data
The production in February 2013 stood at 50.75 mt compared with 55.55 mt produced in January 2013, the data revealed. During the year (FY13), coal demand (budget estimate) was up by around 76 mt and reached 772.84 mt, the data showed. Total demand for coal was estimated at 696 mt in FY12.
30 Coal Insights, April 2013
“I would say I am cautiously optimistically that both Tori-Shivpuri and IB Valley may come up by 2016 or so. If not in 2016, may be calendar 2016 or fiscal 2016, if it can come up, it will give us a huge relief,” the CMD said. He said in Tori-Shivpuri project, of the total 145 Km, they have identified 45 Km as critical stretch at least the transportation can take place. “It will not solve the problem, but temporary relief can be there. But eventually, if it is connected to Delhi route, the transportation could be done seamlessly,” he added. So far as Mand-Raigarh is concerned, only MoU has been signed so far or SPV has been registered, but the final alignment
CIL production to increase by 179 mt in XII Plan As per the 12th Plan document, the total production of coal by Coal India Limited has been projected to increase from 435.8 million tons (mt) achieved by CIL in 2011-12 to 615 mt in 2016-17 which is the terminal year of the Twelfth Plan. The increase in production of coal by CIL is therefore targeted to be of the order of 179.2 mt during the Plan period, minister of state for coal, Pratik Prakash Patil said. During the same period, the total demand for coal in the country has been estimated to increase from 640 mt in 2011-12 to 980.5 mt in 201617 which represents an increase of 340.5 mt. Therefore, the incremental production of coal targeted for CIL during the Twelfth Plan period works out to 52.6 percent of the estimated incremental demand in the Plan period, he said. The main hurdles of CIL in increasing coal production include delay in land acquisition, environment and forest clearance and in the completion of projects relating to movement of coal, especially by rail, he added.
Feature survey is yet to be completed and land acquisition will be a major issue, Rao said. The government had on February 8 this year approved construction of new broad gauge lines between Raigarh (Mand Colliery) to Bhupdeopur Railway Station (184.7 kilometres) and Gevra Road to Pendra Road (121.70 kms). The projects would cover a total distance of 306.40 kms and involve a total investment of around 2055.12 crore, of which RaigarhBhupdeopur stretch would be spread over 63 kms and would cost around `379.08 crore. Gevra Road- Pendra Road line is expected to cost `838.02 crore. “The first phase of 63 km of RaigarhBhupdeopur stretch will be the first critical stretch. If that is done, around 50-60 mt of production potential can be realised to start with,” Rao said. “I don’t expect even the first stretch of 63 km in Mand-Raigarh to happen in Twelfth Five Year Plan (2012-17). As a nation, we should be happy even if it happens even in Thirteenth Five Year Plan (2017-22). 63 kms by Indian standard is too huge,” he said.
CIL restructuring
Meanwhile, asked about the status of CIL’s restructuring plans, Director (Technical) N Kumar said the company has received around 14 bids from foreign firms in response to its notice inviting expression of interest (EoI) for appointing consultants for technology development and modernisation of the company. “We have received a number of bids. I can’t say with confidence the number of bids received, but it is probably more than 13-14,” he said. Asked by when they expect to take a call on appointing consultants, Kumar said, “I think within next 4-5 months we will be able to appoint the consultant.” CIL had in February 2013 floated EoI notice inviting bids from foreign consultancy firms/organisations for technology development and modernisation of the company. The selected consultant would have to among others assess the status of existing technology for safety, production and productivity in the underground and open cast mines of CIL.
It would also have to assess the gaps in technology upgradation, requirements of technology and infrastructure development for mine planning & mine design and construction with regard to projected coal production plans of CIL for XII, XIII & XIV Five Year plans. In addition, the consultant would have to assess the indigenous capabilities in meeting technological upgradation requirements visà-vis import dependence as well as preparation of a road map for technological upgradation covering the different plan periods. Mozambique block
CIL will explore the avenues to transport coal from its mines in Mozamibique when it has managed to fully explore the reserve, Kumar said. “We are exploring the possibility of how to transport the coal, but that is right now only at the exploration stage. Unless it has been proven that how much coal is there, we cannot plan about evacuation,” he said. “Once we know the reserve, then only we can take investment decisions on logistics,” he added.
Coal Insights, April 2013
31
Feature
CIL’s coal supply to power utilities up 10.2% in FY13, assures adequate supply Coal Insights Bureau
A
mid prolonged dialogue on fuel supply agreements (FSA) with power utilities, Coal India Ltd (CIL) has reported a 10.2 percent increase in coal supply to the power sector in 2012-13 on an annual basis. Coal supply by CIL to Indian power utilities is estimated at 343.79 million tons (mt) in 2012-13, an increase of 31.72 mt over 312.07 mt of coal supplied in 2011-12, company chairman S. Narsing Rao said. CIL’s yearly coal supply to NTPC Ltd, the country’s biggest power utility, was 132.84 mt in 2012-13, which was 17 mt higher than 115.84 mt supplied in the previous year. This was also higher than the state utility’s annual contracted quantity of 125.98 mt, he said. This indicates that in 2012-13, total supply of coal to NTPC, the country’s largest power utility, was 105.4 percent of the yearly target. “Our growth in coal supplies to NTPC was 14.7 percent and in absolute terms it was 17 mt more than that of 2011-12. I am absolute delighted to share with you that our achievement is more than the target. Taking the FSAs and MoU together, we have achieved 105.4 percent of the target. The target was 126 mt for achieving 100 percent, but we ended up supplying almost 133 mt, (132.84 mt) coal to NTPC,” he said. In 2013-14 (FY14), CIL has planned to supply a total of 377 mt of coal to power utilities as against actual supply of 343.79 mt in 2012-13, Rao said and stressed that there would be sufficient domestic coal to meet the requirement of power utilities. “We would like to go on record that any power plant in the country, which is in operation and has signed a proper power purchase agreement (PPA) with a Discom, shall have no reason to feel let down by us. We give an open offer to them,” Rao said while announcing the physical performance
32 Coal Insights, April 2013
result of the company for 2012-13. He, however maintained that power utilities need to work with the railways and work with whatever means of transportation to get the supplies. “Any power plant in the country which is ready to generate power and having PPA with Discoms and has already started generation will get more than required coal from us provided also the Railways provide sufficient rakes,” Rao said. “Our total supply or off-take take target for 2013-14 is 492 mt of which 377 mt is planned to be supplied to power utilities. Our supplies to power utilities grew by 31.72 mt or 10.2 percent in 2012-13 over 2011-12,” he said. Asked about the target for coal supply to NTPC in 2013-14, Rao said, as things stand today, it may be the same as last year. “Possibly one or two new plants of NTPC may be coming up in 2013-14 but we have already covered about 6 mt more in 2012-13 and meeting the requirement of those plants would not be a problem,” Rao stressed. Asked if supply to Barh plant of NTPC has also been included, Rao said, “I don’t think Barh is likely to be commissioned
before March 2015. Subject to correction, as far as I remember, Barh is not part of the list that has been given to us by NTPC or power ministry’s CEA.” Higher stock at power plants
Rao said that the company’s initiatives to supply more coal to country’s power plants has resulted in ‘much better’ coal stock position at various power plants of the country. The coal stock at various power plants of the country, which are monitored by Central Electricity Authority (CEA) is close to 20 mt or 19.75 mt as of April 8, which is sufficient to take care of average 16 days of generation, he said. “I can say with confidence that there never had been a stock of more than 6-7 mt with power plants on any given day in the past 4-5 years,” Rao said, adding, “of course there are 17-18 plants of the total 80 monitored by the CEA which are facing critical or super-critical coal stock position, but that is again mainly on account of transport mismatches.” Rao said the fact that in the month of December 2012, CIL’s addition to the ground stock was more than 9 mt shows that there is enough coal with us the coal if it can transport. “Overall from December, January, February and March, we were compelled to dump around 15 mt of coal at stock shows that it was available for supply to the consumers, if only the transport bottlenecks could be sorted out. Some of these bottlenecks could be at our end like siding issues, contract award issues here and there and then MGR at consumers end and some at Railways end,” he said. He pointed that CIL’s pithead stock stood at around 58 mt as on April 1, 2013 as compared to a stock of 71 mt as on April 1, 2012. “Our 58 mt of ground stock is in addition to 20 mt stock at power plants. So the aggregate coal stock is around 78 mt,” Rao said. “Our belief is that to the extent production capacity is there I would say up to 525 mt of production potential is there with us today. It is only lack of transport arrangement, particularly in Mahanadi (about 45-50 mt) and to some extent in Central Coalfields, that we are not able to utilise our existing potential,” Rao said.
Feature
Blame it on overseas jobs, short supply
Indian coal mining sector facing shortage of mining engineers
Shortage of staff in various mining companies CIL
SCCL
NLC
Asst Manager (1st class)
-195
-65
4
3
4
Asst Manager (2nd class)
591
28
0
5
6
Overman
1057
212
178
13
24
Mining sirdar
1874
270
0
0
-6
4
15
8
2
0
3331
460
190
23
28
Mining surveyor Total
GIPCL GMDCL
Source: MoC
Receding supply line
Coal Insights Bureau
T
he Indian coal mining companies, including Coal India Ltd (CIL) and Singareni Collieries Company Ltd (SCCL), are currently facing a shortage of around 4,032 mining engineers and field staff, thanks to the inadequacy of formal training system and lure of overseas jobs. Also, in some levels, there is gross lack of interest in candidates to take up jobs in the mining sector, say the miners. A break-up of the latest manpower shortage data released by the coal ministry shows that the coal producing subsidiaries of CIL account for the majority of 3,331 unfilled positions, while SCCL has a shortage of 460 and Neyveli Lignite Corporation (NLC) has 190 positions unfilled. Other state undertakings such as Gujarat Industries Power Company Ltd (GIPCL) have limited
34 Coal Insights, April 2013
number of vacancies. However, private sector miners (such as Tata Steel) and mine developer and operators (MDOs) like Bengal Emta reported zero gap in requirement and current strength. Of the total shortage in CIL, Eastern Coalfields Ltd (ECL), South Eastern Coalfields Ltd (SECL) and Mahanadi Coalfields Ltd (MCL) have a large number of unfilled positioned to date. Among the various categories, the highest numbers of unfilled positions are in the levels of overman and mining sirdar. Also, there is a large shortage of assistant managers (2nd class) in these companies. However, in assistant managers (1st class) category, there was around 200 numbers of additional employees in CIL as of January 1, 2013. There was also a small number of additional staff in the same category in SCCL, the data showed.
The major problem in filling up vacancies, especially in managerial cadres is the lure of more lucrative assignments in other sectors such as information technology (IT) or foreign countries such as Australia, South Africa and Indonesia. A senior official of a coal miner said this trend has gained momentum since the last few years after imports of coal into India surged dramatically. This had opened up opportunities for Indian mining professionals in countries exporting coal to the domestic market. “Earlier, the overseas opportunities were few and far between. Entry-level professionals from the Indian School of Mines (ISM) could opt for higher education elsewhere. Most of them would stay back in those countries. Other than that, only a handful of senior level mining professionals could get job assignments from countries like Australia. Recently, this trend has picked up very significantly,� said the official. While it was difficult to have an estimate of the number of Indian mining professionals working elsewhere, industry sources said the trend needs to be curbed if the Indian mining sector has to go for a modernisation and mechanisation drive as being planned by the government. Another factor that was hindering the supply line was the lack of technical educational institutions such as ISM. The total number of seats available for mining engineers was falling short of the increased requirement. Also, the present course curriculum is not appropriate for the industry
Feature and needs revision with focus on mine safety, environment and rock mechanics to address the requirements of the industry. Measures taken
The mining companies, meanwhile, are taking steps in their individual capacities to fill up the positions through fresh recruitment of mining engineers through campus interviews, promotion of departmental candidates and also through statutory training programmes. CIL, for instance, has recruited 683 management trainees from various institutions since 2010. The world’s largest coal miner has also promoted 574 departmental candidates to Assistant Manager (2nd class) category. Besides, there were 417 appointments made for overman, 776 for mining sirdars and 69 for mining surveyor’s position during 201112 and 2012-13. SCCL, on its part, is appointing mining diploma holders to work as mining sirdars for the first three years to make up the shortage of mining statutory personnel. Altogether, 219 dependents appointed under fast track scheme are undergoing statutory training. However, there was a lack of interest in many in acquiring mining statutory certificates.
Another state-owned miner, NLC is regularly taking action for recruitment of mining engineers through campus interviews and also by press notifications. However, the company is facing poor response for filling up vacant positions for overman. Also, the attrition rate is significantly high at this level. Need for higher skills
In line with the increased mechanisation, the mining companies are finding it difficult to run their new sophisticated machineries by their low-skilled existing staff. This is particularly the case with NLC. For instance, in connection with the postings of mining sirdar, the company has informed the Directorate General of Mining Safety (DGMS) that it is having highly mechanised mines adopting continuous mining system by deploying speciailised mining equipment of Bucket Wheel Excavators, series of Conveyors and Spreaders. NLC has posted a good number of mechanical and electrical engineers possessing diploma/degree qualification and assigned the jobs to supervise the working areas of men and machines. This is so because the mining sirdars having lower qualifications
are not being able to have effective control of the work of high sophisticated machineries. “We have furnished certain details as sought by DGMS with a request to exempt NLC from the provisions of appointment of mining sirdars,” the company said. This move summarises the industry’s concerns about both the quantity and quality of manpower available for mining jobs in the country. A recent study by CII-ICRA had pointed out this growing shortage in supply of quality mining engineers, geoscientific personnel as well as other staff in the mining sector. It had also highlighted the lack of mineral specific professionals like lawyers, financial analysts, economists and so on. To meet this shortage, courses related to areas such as geoinformatics, climate change and advance courses in remote sensing are required to cater the growing needs of the industry, the report said. While the current stock-taking by the government is seen a welcome move, industry sources said the government and the institutions need to speed up measures to boost the supply line in coming years, failing which the mechanisation drive in the mining sector may not be achievable.
Coal Insights, April 2013
35
SPECIAL FEATURE
Coal quality row of NTPC and CIL
A petty issue or a national problem!
Radha Krishna Tripathy
T
he recent spat between Coal India Ltd (CIL) and NTPC Ltd. has raised many eyebrows in the Indian industry. The fight between two major public sector (PSU) behemoths has brought to the fore the industry’s concerns about the quality of coal supplied and coal pricing. CIL, the largest supplier of coal in India and NTPC, the largest coal consumer have locked horns primarily over the coal quality issue. While NTPC had refused to sign the fuel supply agreement (FSA) with CIL and also not paid `2,000 crore as alleged by the coal company, CIL threatened to curtail supply to NTPC plants. In fact, the state-owned miner stopped supplying coal to two of its power plants, namely Farakka in West Bengal (WB) and Kahelgaon in Bihar, thus jeopardising power generation to the tune of 5,000 MW. The power ministry had threatened to move to Competition Commissioner of India (CCI) over this move by CIL. NTPC has alleged that CIL has been supplying coal of GCV 3300 kcal/kg instead of 5,000 kcal/kg as agreed upon, but charged NTPC with the
36 Coal Insights, April 2013
price of the latter grade, which resulted in higher cost of generation. After the intervention of coal minister, CIL resumed supply of coal to these plants only by 50 percent. CIL is yet to sign FSA for 45,000 MW with NTPC and allegedly keeps putting pressure on NTPC to close the FSA to achieve the target set by the Prime Minister’s Office (PMO). NTPC, on the other hand, has not signed the FSA citing coal quality concerns. The power utility has apprehension that CIL will not provide the coal quality as agreed upon. Genesis of crisis
The genesis of this spat between CIL and NTPC dates back to January 2012 when CIL shifted from Useful Heat Value (UHV) based pricing to Gross Calorific Value (GCV) based pricing. Power companies had opposed to this shift alleging it would increase the overall cost of coal for them. With CIL enjoying the monopoly status in the industry with no regulatory control mechanism in place, there was apprehension in the industry that CIL would supply lower GCV grade coal while charging for higher GCV grade.
According to industry sources, this problem of grade slippage is commonplace in case of utilities, captive power producers and other non-core industries. They often allege that CIL is supplying inferior quality of coal and also raise this issue in various forums and ministries, but such complaints mostly go unheeded. With coal supply becoming an issue these days, the availability of the dry fuel hogs all the limelight and becomes the priority for the utilities as well as the government. As a result, coal quality and pricing takes a back seat. Coupled with these problems are the high international coal prices and sudden policy changes in Indonesia and Australia government putting restrictions from time to time on sourcing of coal from these countries. Utilities are therefore making a beeline to CIL for signing the FSAs or long term agreement for coal. A section of the industry maintains that CIL, sensing opportunities, is trying to design the FSA agreement in its favour. Incidentally, NTPC has raised the quality issue at a time when it was undergoing negotiations for FSA with the coal major. NTPC is well aware of the fact that it enjoys an upper hand being the eyeball of the power ministry when it comes to power generation and providing the country with sustainable power. The power issue is more of a political adventure rather than a pure economic or commercial consideration for the ministry since decades as it is having direct relation to the vote bank. With 16 coal projects across the country, having an installed base of 41,200 MW and 160 mt of coal requirement, NTPC always enjoys favourable recommendations of the power ministry. In this case, NTPC went a step ahead asking the state governments to join hands with it to raise the quality issues against CIL. It managed to garner support from WB and Odisha governments who joined forces to urge the coal supplier to come clean on quality issues. Odisha government has alleged that CIL is supplying coal of GCV 2790 kcal/kg instead of 3300 kcal/kg as promised. CIL’s production woes
While NTPC enjoys the patronage of the power ministry, CIL is currently facing flak from the coal ministry (MoC) because of not meeting the production target for the year 2012-13. Over the last 3 years, there has been almost zero growth in CIL’s output. Although there was a slight increase in coal
SPECIAL FEATURE off-take in 2012-13, the overall production graph is not quite encouraging. CIL boasts of increasing coal supply to NTPC by 10 percent over the past year (133 mt in 2012-13 from 126 mt in 2011-12) and promises the industry stakeholders to supply all the incremental coal to the power industry. But then, the miner has drawn flak from the state governments over price pooling. At this juncture, if the state governments and other consumers join hands with NTPC on the quality issue, it will only mount further pressure on the coal supplier. Cause of the rift
CIL is allegedly very firm on its stand of sampling at the mine head and gives no heed for joint sampling of coal or third party verification at the coal consumption centres. Prima facie, all these issues started with thermal coal being supplied from the Rajmahal coal mines under Eastern Coalfields Ltd (ECL) to NTPC power plants at Kahelgaon and Farakka. NTPC has been constantly raising the non-conformity of coal quality with CIL but with no avail. Instead of solving the matters bilaterally through dialogue, NTPC has taken a unilateral stand on not paying ECL for the higher coal quality it charged to NTPC. Instead, it paid on the basis and calculation of its own on the coal GCV as received at its stations, thus engaging in a direct conflict with CIL. The annual coal cost of NTPC is about `20,000 crore. NTPC has used this issue to hard bargain with CIL for nonsigning the FSA for around 4500 MW. The logic put forth by NTPC is that with certain provisions not finding any place in FSA (such as joint sampling at receiver end/ third party verification), the FSA is silent on coal quality and it can be misused later. Meanwhile, the shift of coal pricing from UHV to GCV has given enough ammunition to CIL to earn premium over and above what it was earning through the UHV system. Although UHV system was full of inefficiencies and there was no room for quality improvement, the shift to GCV is also one-sided with no consideration on pricing for environmental concerns, social and market parameters. The grade system does exist in the system and the only change happened is in the level of bandwidth reduction which is in a range of 300 kcal/kg for each level increase. The new system is having 17 different grades
starting with 2200 kcal/kg to more than 7000 kcal/kg. While this is a welcome step in improving the quality of coal being supplied to the industry, the consumers expect this to be implemented in true spirit. While CIL reaps the benefit of GCV pricing, it appears to be against any joint sampling at the receivers’ end. The logic given is that the utilities can always claim compensation for any kind of impurities (with a ceiling of 0.75 percent of quantity of coal supplied to it in a quarter). The industry argues that the ceiling is very minimal. Also, such provisions are only for foreign materials such as stones and boulders, if any. There is no direct reference to the GCV of the coal supplied for claiming any type of compensation.
remains. The association of small and captive coal consumers often alleges that CIL is not supplying the desired quality of coal even through e-auction mode. Currently, all focus is on increasing the production level of CIL so as to increase coal quantity for the starving sectors such as power and there is less concern on the quality front. Coal washing is talked about for decades but nothing concrete has come out as of now. There is no clear policy on coal beneficiation and neither of the parties (coal producer or the coal consumer) seems to be keen to set up coal washeries. Each party wants to be cost neutral and does not show any intention to take the extra burden on them. Crux of the matter
CIL’s concerns
Why is CIL against the joint sampling at the receivers’ end? Actually, the coal miner does not want to take any responsibility after the coal is loaded into railways rakes. CIL is well aware of the coal mafias and coal thefts prevailing at the areas where it mines coal, especially in ECL region. It is a law and order issue and the mitigation measures are not enough. The company is not in a position to stop the illegal coal stealing activity en route. There is huge loss to the exchequer as good quality of coal is siphoned off by coal mafias and is mixed with foreign materials in transit. As for ECL’s coal supply to NTPC plants, it may be noted that after GCV based pricing came into effect, ECL mining came under severe stress. Coal from Rajmahal mines is not of good quality and does not fetch good amount of money. Also, there is not much of mechanised mining in CIL to adhere to quality provisions. After CIL switched to GCV based pricing, the price of ECL coal was reduced from `870 per ton to `640 per ton. ECL has to manage its finances and there is no way to increase the coal quality being supplied to the consumers (because of its inherent nature). It was alleged that to cover this up, ECL was doing it intentionally. No party is willing to take this blame and eventually it is the CCO (Coal Controller Organisation) which was made to declare that it was a mistake on its part to wrongly grade the coal mine at a higher category. Although the controversy seems to wither away now, with both parties agreeing for joint sampling, the real concern still
While designing fuel supply agreements or any policy changes that would affect industry stakeholders in the long run, India should look inside rather than imitating any other country. Indian coal is quite different from coal seams found in other countries. Indian coal is of drift origin and impurities would be there as an inherent property. Quality wise, calorific value would differ in different seams in the same mine and sometimes in the same coal seam. This geological risk needs to be taken into consideration while designing the FSA. Additionally, there is fast depletion of good quality of coal; in fact, good quality coal is feared to exhaust in 5 to 7 years. Also, there is an urgent need to have an integrated energy ministry as there is lack in co-ordination between the ministries and the madness of proving superiority in comparison with one another takes its toll on the overall development of the country. The spat between CIL and NTPC brings out the fact that not all is well. The absolute monopoly of CIL may not be the ideal and there is an impending need of coal reforms. The proposed publicprivate partnership (PPP) structure and competitive bidding for coal blocks are silver lining for the industry. We can only hope that the entry of private players in a phased manner and the formation of a coal regulator would streamline the industry. Radha Krishna Tripathy is an independent consultant (Coal and Power). He can be contacted at radhakrishna.tripathy@gmail.com Note: The views expressed here are those of the author and not of Coal Insights. The publication does not take any responsibility for the article in part or in full.
Coal Insights, April 2013
37
SPECIAL FEATURE
India’s power generation up 3.9% in FY13 Capacity addition
Sanjukta Ganguly
I
ndia’s power generation during 201213 stood at 911,652.31 MU, down 1.97 percent compared with the target of 930,000 MU for the period, but up 3.96 percent compared with 876,888.48 MU generated during 2011-12. Power generation in March 2013 stood at 79,928.89 million units (MU), up 16.73 percent from 68,474.92 MU generated in February, according to provisional statistics of the Central Electricity Authority (CEA). The generation in March was significantly lower than the target of 83,602 MU, the data revealed. Power generation in March 2012 was 77,619.12 MU against the target of 77,050.53 MU, which indicates that year-on-year generation was slightly up. Of the total generation in March 2013, 68,492.39 MU (66,143.92 MU in March 2012) was from the thermal sector, 2,707.21 MU (2,859.50 MU in March 2012) from nuclear sector, 8,677.77 MU (8,531.29 MU in March 2012) from hydro sector and 51.52 MU (84.41 MU in March 2012) was from Bhutan imports. The actual generation was lower than the target of 71,976 MU for thermal sector, 3,462 MU for nuclear sector and 7,997 MU for hydro sector. It was also lower than 167 MU set for Bhutan import.
A total of 7,028 MW of power generation capacity was added in India during the month of March 2013, taking the generation capacity added during 2012-13 to 20,622.80 MW, as per CEA’s revised data. With this, the total installed generation of the country stood at 223,343.60 MW, the provisional data prepared by CEA revealed. In 2011-12, total capacity addition stood slightly lower at 20,501.70 MW, the data showed. Capacity addition in February 2013 was 2,863.8 MW whereas in January it stood at 877 MW. However, CEA data showed that in January 2013, another 745.8 MW of power generation capacity was added in the thermal sector but since the information was received late, it has been included in the February figure. During March, capacity addition in the thermal sector stood at 6,986 MW while the target for the sector stood at 735 MW. For the hydro sector, 42 MW was added against a target of 172 MW. In case of nuclear sector, target and achievement stood at 1,000 MW and nil, respectively. In the thermal sector, during the month, capacity was added at Jallippa Kapurdi TPP Unit 8 (135 MW), Ukai TPS Extn. Unit
Categorywise energy generation in March 2013 (in %) 0%
11%
6 (500 MW), North Chennai TPS StageII Unit 2 (600 MW), Parichha TPS Extn Unit 6 (250 MW), Mundra UMPP Unit 5 (800 MW) in Gujarat, Bela TPP Unit 1 (270 MW) in Maharashtra, Korba West Extn. St. -III TPS Unit 5 (500 MW) in Chatisgarh, Satpura TPS Extn. Unit 10 (250 MW) in MP. Capacity addition during FY13 and FY12 (in MW) Months
2012-13
2011-12
April
1,760
May
1,070#
550
June
2,376
2,224
July
950
1,660
August
550
1,200
870
786.5
September October
1,400
345
803
2807
15
1158
877
895
November December January February March
735
2,863.8
972
7,028
5,482*
Total (Apr-Feb)
20,562.8
18,814.5
Total (Apr-March)
20,562.8
18,814.5*
*As reported by CEA, the capacity for 2011-12 was increased by them to 20,501.70 MW instead of 18,814.50 MW. # CEA had earlier reported that capacity addition in May (2012-13) was 1,070 MW, but it appears that the figures have been revised to 1,130 MW. ## As per the consolidated data provided by CEA, total capacity added during April-March 2013 period stood at 20,622.80 MW although addition of individual month’s capacity addition figure shows the total April-March capacity addition figure to be 20,562.8 MW.
Achievement vs target in capacity addition during March, 2013 (in MW) 7000 6000
3%
5000 4000 3000 2000 1000 0 86% Thermal
Nuclear
Hydro
Source: Central Electricity Authority (CEA)
38 Coal Insights, April 2013
Bhutan Import
Thermal
Hydro Target
Nuclear
Achievement
Source: Central Electricity Authority (CEA)
SPECIAL FEATURE Capacity addition also took place at Tirora TPP Ph-I Unit 2 (660 MW) in Maharashtra, Amaravati TPP Ph-I Unit 1 (270 MW) in Maharashtra, Pipavav CCPP Blk 2 (351 MW) in Gujarat, Mouda TPP St-I Unit 2 (500 MW) in Maharashtra, Adhunik TPP Unit 2 (270 MW) in Jharkhand, Kamalanga TPP Unit 1 (350 MW) in Orissa and Bina TPP Unit 2 (250 MW) in MP. In the hydro sector, capacity addition took place at Myntdu HEP Unit 3 (42 MW) in Meghalaya. Critical coal stock
According to data available with Coal Insights, a total of 21 plants of the total 93 in the country were faced with critical coal stock position of less than seven days as on March 31. The data further shows that out of the 31 plants facing ‘critical coal stock’ position, 14 were facing ‘super critical’ coal stock position of less than four days.* On March 14, out of the 26 plants (out of 93 plants) facing critical coal stock position of less than seven days, 13 were facing ‘super critical’ coal stock position of less than four days. Plants in Maharashtra, Bihar, Tamil Nadu and West Bengal were the worst sufferers. Plant load factor
The Plant Load Factor (PLF), a measure of the output of a power plant compared to the maximum output it could produce for the country, during the month of March 2013 stood at 72.21 percent against the planned 71.6 percent. The PLF was 71.12 percent and 74.2 percent for February 2013 and
NTPC adds 4,170 MW generation capacity in 2012-13 NTPC Ltd, India’s biggest power utility, has added 4,170 MW of generation capacity in 2012-13, which is the highest ever capacity addition in a single year, the company’s Chairman and Managing Director Arup Roy Choudhury has said. Choudhury was speaking at a function organised on the occasion of commencement of commercial operation of the third unit (500 MW) of Indira Gandhi Super Thermal Power Project (IGSTPP) at Jharli village in Jhajjar district of Haryana. NTPC contributes over 41,000 MW in the total 228,000 MW of installed power generation of India, he said. IGSTPP is a project of Aravali Power Company Private Ltd in which NTPC hold 50 percent equity. The remaining portion is equally shared between Haryana Power Generation Corporation Ltd and Indraprastha Power Generation Company Ltd. The main plant equipment of boiler and turbine of IGSTPP was awarded to the BHEL in July 2007 and the first unit was commissioned on October 31, 2010 in 39 months from the date of investment approval. This has been recognized as the best achieved target for any greenfield project. The second unit was commissioned on November 5, 2011 and third unit on Nov 7, 2012. RIL planning to convert gas fired plants to coal fired
Meanwhile, India’s largest crude oil refiner, Reliance Industries Ltd (CIL), is believed to be working on converting some of its existing gas fired power plants in Gujarat to coal fired one, an industry source said. “To start with, RIL is working on converting one of its power plants to coal fired plant, but it may ultimately convert all the existing gas fired plants to coal fired one,” the source said. “The company may initially need around 1.5 million tons of coal annually once the conversion of one plant materialises, but the requirement may go up significantly once its other plants too are converted to coal fired plants,” the source added.
January 2013, respectively. The PLF of power plants of central sector run companies such as NTPC and DVC in March 2013 stood at 83.10 percent whereas All India PLF factor, March 2013 (in %) the figure achieved in February 2013 was at 90 82.42 percent. 80 70 60 50 40 30 20 10 0
Central
State Sector Program
Pvt. Utl. Sector Achievement
Source: Central Electricity Authority (CEA)
All India
In March 2013, the plants in the state sector recorded a PLF of 66.31 percent against the planned 69.89 percent. The worst performers were Mauda TPS, Neyveli TPS II Exp. and Kodarma TPP, all of which recorded nil PLF against a target of 56.99 percent, 37.63 percent
and 40.05 percent, respectively. Power supply position
In the month of March 2013, the country’s peak power demand was estimated at 85,642 MU, but actual availability was only 78,304 MU, reflecting a shortfall of 7,338 MU or 8.6 percent. During the previous month (February 2013), the country’s peak power demand was estimated at 76,667 MU, but actual availability was only 70,549 MU, reflecting a shortfall of 6,118 MU or 8 percent. Despite acute power shortage, deficit stood at nil in Chandigarh, Daman & Diu, Goa, Lakshwadeep and Sikkim while peak power deficit was noticed in Andhra Pradesh which stood at 1,985 MU. See Annexure on Pg 65
Coal Insights, April 2013
39
SPECIAL FEATURE
UMPPs: Too little, too late?
Coal Insights Bureau
W
hen the concept of Ultra Mega Power Project (UMPP) was taken up in 2005 by the Ministry of Power, it was envisaged that these projects would play a major role in bridging the increasing gap between power supply and demand in the country. Initially 9 projects were proposed out of which 4 were pit-head projects based on indigenous coal and 5 were coastal projects based on imported coal. Later on, some more projects were added to the list. As of today, only four projects namely, Sasan in Madhya Pradesh, Mundra in Gujarat, Krishnapatnam in Andhra Pradesh and Tilaiya in Jharkhand, have been awarded and transferred to the identified bidders and the projects are at different stages of implementation. It was expected that the first unit of Mundra UMPP would be commissioned in February, 2012. The first unit of Sasan UMPP was expected in January, 2013. As per revised Power Purchase Agreement (PPA), the first unit of Krishnapatnam was expected in June 2013. As per PPA, the first unit of Tilaiya UMPP was expected in May, 2015.
40 Coal Insights, April 2013
While some of these projects have shown reasonable progress, it is being felt that at this rate of development, the UMPPs would play only a limited role in bridging the supply gap. There are, of course, many more such projects in the pipeline, but none of these are expected to come up in the current Twelfth Plan period (2016-17). The government needs to fast-track these projects, but can do little to mitigate the uncertainty over coal availability. Over the last decade, a significant hike in coal demand has been witnessed throughout the country owing to commissioning of a large number of new coal-fired generation capacity, both in public and private sector. A lower-than-expected increase in domestic coal production, particularly due to delays in the development of captive coal blocks allocated to the power generating companies, has added largely to this demand-supply gap. How far the power industry will be able to overcome this hindrance will decide the fate of India’s overall power growth aspirations.
Sasan UMPP: Sasan UMPP’s unit#3 was synchronised in March 2013. The UMPP project of Reliance Power Limited (RPL) has already acquired 3,520 acres (94.47 percent) of land and captive coal blocks measuring 4,281 acres (56.4 percent). Currently, no issue is pending in respect of land for power plant, a report compiled by Central Electricity Authority (CEA) said. So far as coal blocks are concerned, forest land is being taken in phases. Northern Coalfields Limited (NCL) is yet to handover the land earlier acquired by them under CBA Act. Environmental and Forest Clearance for the main Plant and the coal mine (Mohar and Mohar Amlohri) have been received. In fact, Ministry of Environment & Forest (MoEF) have accorded stage-I approval for the diversion of 965.4 hectares of forest land in favour of Sasan Ultra Mega Power Project for their Chhatrasal Captive Coal Block (including 30.21 hectares of forest land for infrastructure development) in Singrauli district of Madhya Pradesh. However, compliance of Stage-I conditions is yet to be completed, as per the report. All six units boiler and ESP foundation UMPPs in pipeline Sl. No
Name of UMPP
1
Chhattisgarh Surguja Power Ltd., Chhattisgarh UMPP , District Surguja
2
Orissa Integrated Power Ltd., Orissa UMPP, District Sundargarh
3
Coastal Tamil Nadu Power Ltd., Cheyyur UMPP, Tamil Nadu , District Kanchipuram
4
Tatiya Andhra Mega Power Ltd., Andhra Pradesh 2nd UMPP, District Prakasam
5
Deoghar Mega Power Ltd, Jharkhand 2nd UMP, Disrtict Deoghar
6
Sakhigopal Integrated Power Co. Ltd., Orissa 1st Additional UMPP, District Bhadrak
7
Ghogarpalli Integrated Power Co. Ltd., Orissa 2nd Additional UMPP, District Kalahandi
8
Coastal Maharashtra Mega Power Ltd. Maharashtra UMPP, District Sindhudurg
Status of ongoing projects
9
Coastal Karnataka Power Ltd., Karnataka UMPP
Of the four UMPP projects awarded so far, two have shown reasonable progress while the others are lagging due to various impediments.
10
Bihar UMPP
11
2nd UMPP in Tamil Nadu
12
2nd UMPP in Gujarat
SPECIAL FEATURE have been completed where over 230,000 tons of Boiler Turbine Generator (BTG) material have been shipped by Shanghal Electric. As mention, Unit No.3 of the plant has been synchronised on March 9, 2013 while in unit 2, boiler hydro test has been completed. Boiler pressure parts erection is in progress at Unit #2, #1, #4 & #5 while at Unit#6, boiler structure erection is nearing completion. More than 30,000 tons out of 58,803 tons Power House Building (PHB) and Bunker Structure erection has been completed for all 6 units. In the captive coal blocks of the project, coal production has already commenced where over 10.76 million cubic meter overburden has been removed. Four Rope Shovels (43M3) thirteen large size dozer (850-240HP) and five Graders (280 HP) have been commissioned. In addition to this, eighteen dumpers (240 MT), 8 Drills (250 mm-160mm), four water spriklers (70 KL) have been commissioned whereas commissioning of a Dragline assembly is in progress. However, at present, the critical area of this UMPP is the completion of coal conveyor system from mine to power plant.
the environment and forest clearances for the main plant and the coal mines whereas 3,222 acres (almost 100 percent) of the land required for the plant has been acquired. Krishnapatnam UMPP This UMPP is facing stalling of construction. Reliance Power Limited’s Coastal Andhra Power Limited (CAPL) is currently faced with stoppage of construction work at the project site as the developer has cited new Regulation of the Government of Indonesia as the reason which prohibits sale of coal, including sale to affiliate companies, below bench mark price. Environmental clearances and forest clearances for main plant have already been obtained and 90 percent boundary work, leveling of site in main plant have been completed. Piling work has been carried out for Chimney, CW pump house and TG foundation. As per the CEA report, ground improvement works have been done for Cooling Tower Area. Approach road has been constructed, area drains, plant roads, permanent stores were taken-up for construction. However, problems having cropped up, work has come to a standstill at this plant. Tilaiya UMPP
Mundra UMPP Mundra UMPP synchronised its unit#5 in March 2013. Tata Power Company Limited’s (Coastal Gujarat Power Limited) has already obtained
The Tilaiya UMPP is yet to start construction work. This 6X600 MW power project envisaged by Reliance Power Limited’s Jharkhand Integrated Power Limited is yet to take off, the CEA report said.
UMPPs at a glance 18 16
16 13
14 12 10 8 6
4
4 2 0 Total UMPPs envisaged
SPVs incorporated
Source: Power Finance Corporation Limited
Awarded
However, besides obtaining the environmental and forest clearance for main Plant, environment clearance for the Kerandari ‘B’&’C’ block has been obtained. The EIA study has also been completed whereas a proposal for forest clearance for the Kerandari ‘B’&’C’ block has been submitted at the State forest department. Other work that has already been completed at this project include Pillaring work for project boundary. The Mining Plan has been approved by the Ministry of Coal (MoC). In addition, EPC contract has been executed with R-Infra and BTG tied up with SEC China. However NTP is yet to be issued to BTG supplier as land is yet to be handed over. Projects in pipeline
Apart from the four projects already awarded, there are a number of UMPPs which are currently at various stages of planning. Overall, 16 UMPPs have been envisaged, of which SPVs for 13 have been incorporated. Power being one of the most critical components of infrastructure affecting economic growth of India, the development of adequate infrastructure is indispensable for sustained growth of the Indian economy. Even after the considerable growth in the power sector infrastructure and the supply of electricity, many parts of the country still continue to face severe power shortages as consumption by commercial and industrial consumers are found to be increasing at a much faster pace than the electricity supply. Hence, necessity of more UMPPs is surfacing fast. Industry sources said that while the proposal to set up these power projects is welcome, the timelines need to be more stringent. Typically, a normal power project takes 36-48 months to be commissioned. But these are special projects and the progress made in last eight years (since 2005-06) is not satisfactory. Of the four UMPPs, only three are expected to come up in the Twelfth Plan (Tilaiya is expected to come up in the Thirteenth Plan). Considering that total capacity addition would be around 90 GW, these UMPPs would at best contribute 13 percent of the increase. If the delay in implementation is further extended, the purpose of this ambitious power capacity addition programme may be defeated.
Coal Insights, April 2013
41
SPECIAL FEATURE
Power generators urge CIL to go slow on coal supplies
Coal Insights Bureau
I
n an unprecedented development, at least four power generators in India have requested Coal India Ltd (CIL) not to supply more than agreed quantity of coal because of their limited storing facilities. “Today, power plants are refusing coal from CIL saying that their stock has reached at alarming levels,” an official of CIL told Coal Insights. “We have received requests from West Bengal Power Development Corporation Ltd (WBPDCL), Panipat Thermal Power Plant as well Gujarat and Rajasthan generation companies to stop further loading of coal for a few days,” the official said. WBPDCL Chairman and Managing Director in a letter to CIL said that the company had been burdened with excess coal for the last six months due to more than FSA despatches from Eastern Coalfields Ltd (ECL) and Bharat Coking Coal Ltd (BCCL), the official said. “As against the monthly FSA programme of 345,000 tons in a month, the loading from ECL is around 4.0-5.5 rakes per day against the requirement of 3 rakes per day. BCCL on the other hand is loading 2.4 to 3.3 rakes per day instead of the requirement of 1.2-2.2 rakes,” the letter said.
42 Coal Insights, April 2013
The CIL official said, “We don’t understand the logic behind such a request. We are in a fix. Coal is not a commodity that can be stored in a cold storage and we have to send the material, especially when rakes are available,” he said. He further said that instead of requesting CIL to regulate supplies, the power generators should improve their stocking arrangement so that they have enough stock during the coming monsoon season. “The production of coal as well as loading is generally affected during the monsoon, which in turn affects power generation and that is why it would have been better for power generators to keep stock of coal for monsoon,” the CIL official reasoned. According to feedback received from various industry experts, Coal Insights understands that there are many power plants in the country which do not want to keep coal stock of more than 3-4 days. “This happens, either because they do not have proper stocking facility or they do not have funds to pay for such huge coal supplies,” the experts said. Meanwhile, continued improved supplies of domestic coal owing to higher production by CIL and steady supply of imported coal coupled with increased despatches resulted in
NTPC’s FY13 coal import 43% lower than target NTPC Ltd, which is involved in verbal conflict with Coal India Ltd (CIL) over alleged supply of inferior quality of domestic coal, has severely faltered in meeting its 2012-13 coal import target, according to a data compiled by Central Electricity Authority (CEA). The power utility’s actual coal import in 2012-13 was only 57 percent of the target, which means it imported 43 percent less coal than it was required to import. NTPC’s coal import in 201213 stood at 9.064 million tons (mt) as against the target of 16.00 mt for the year. The import in 2012-13 was also lower by 22.54 percent compared with the actual import of 11.701 mt in 2011-12 against the target of 16.00 mt. The lower import in 2012-13 was attributed to delay in placement of order by NTPC, which had decided to directly import the material recently. In fact, the company finally placed an order of 7 mt of coal with two suppliers only in March 2013 even though the tender was floated in October 2012. The supplies are expected to be slightly higher in the first half of 2012-13 and it is expected that NTPC will float another tender of around similar quantity or slightly more than that sometime in June-July this year.
coal stock position at Indian power plants to cross 13 million tons (mt) level for the first time in history, a data of Central Electricity Authority (CEA) revealed. The coal stock position at the Indian power plants stood at 13.746 mt as on February 6, 2013. Of the total, the stock of imported coal stood at 0.588 mt on February 6, up from 0.493 mt as on January 31. The stock of domestic coal also increased to 13.158 mt on February 6 from 12.542 mt on January 31.
SPECIAL FEATURE
Indian power utilities’ FY14 coal import target at 82 mt Break-up of coal import by utilities in 2012-13 (in mt)
Coal Insights Bureau
T
he Central Electricity Authority (CEA), an “attached office’ of the Ministry of Power, has increased the coal import target of 2013-14 for power plants of utilities by 17.14 percent to 82 million tons (mt) from 70 mt in 2012-13, an official told Coal Insights. Of the total, 50 mt has to be imported by domestic coal based plants, up by 4 mt from the target of 46 mt for 2012-13, the official said. The imported coal based plant’s coal import target has been increased by 33.33 percent to 32 mt in 2013-14 from 24 mt in 2012-13, the official added. CEA is a Statutory Body constituted under the erstwhile Electricity (Supply) Act, 1948, which was replaced by the Electricity Act 2003, where similar provisions exist. The CEA is responsible for the technical coordination and supervision of programmes and is also entrusted with a number of statutory functions. FY13 coal import surge 40%
Meanwhile, the total import of coal by power utilities surged by 40 percent in 2012-13 on the back of higher than targeted quantity imported by imported coal based plants. The total import stood at 62.547 mt during the year as compared with 44.70 mt imported in 2011-12, the official said. The import in 2012-13 by domestic coal based plants was 30.912 mt, 33 percent lower than the target of 46.00 mt whereas as imported coal based plants imported 31.635 mt of coal which was 132 percent of the target of 24.00 mt, the official added. Despite an impressive increase registered by imported coal based plants, the total import in 2012-13 was, however, 10.65 percent lower than the target of 70.00 mt set for the year. In 2011-12, the import was 19 percent lower than the target of 55 mt.
Name of Utility Plant
2012-13 Target
Achievement
% Materialisation
Torrent
0.50
0.292
58
GSECL
1.50
0.359
24
CESC
0.50
0.384
77
Reliance Energy (Dahanu)
0.60
0.794
132
HPGCL
2.00
2.219
111
APGENCO
1.60
1.733
108
WBPDCL
1.00
1.109
111
DVC
3.00
1.027
34
UPRVUNL
1.00
0
0
RVUNL
2.00
1.178
59
MSPGCL
3.50
3.032
87
MPGCL
0.80
0.327
41
TNEB
2.00
3.565
178
KPCL
1.50
1.474
98
OPGCL NTPC
0.018 16.00
9.064
57
Pathadih
0.40
0.015
3.75
NTPC (JV) Indira Gandhi
1.00
0.151
15
Reliance Energy Rosa
0.90
2.084
232
Sterlite
1.00
0.301
30.10
NTPC SAIL Power CO
0.40
0.336
84
Tata (MaithonRB)
0.50
0.068
14
Lanco Anpara
0.90
0.356
39.55
CSEB
0.20
0
0
Bajaj Hindustan
0.30
0.047
15.67
TVNL
0.20
0
0
Vedanta (Balco)
0.30
0.109
36.33
NTPC (JV-Vallur)
0.40
0.055
13.75
Adani Power (Tiroda)
1.00
0.591
59.10
CLP (Mahatma Gandhi)
1.00
0.189
18.90
Total Excluding Import Based Plants)
46.00
30.912
67
Total Import Based Plants
24.00
31.635
132
Grand Total
70.00
62.547
89
Coal Insights, April 2013
43
Technology
Will burning of coal be a thing of past?
Amid noise over the increased use of coal in the global fuel-mix and its impact on the environment, a silent revolution is said to be taking place in some US research labs. After years of quest for improved technologies to reduce the greenhouse gas emission from the burning of coal, the researchers are now focusing on bypassing the process of burning altogether. Alternative ways to capture the energy such as Coal to Liquid (CTL) and Underground Coal Gasification (UCG) have already gained ground world over, but the pace of implementation has been rather slow. Against this, a couple of new breakthroughs in the US have ushered new hopes. If these scientific feats are successfully deployed, researchers claim, the burning of coal may soon become a thing of past! However, much would depend on how China and India, which account for more than half of the world’s coal consumption, respond to the changing needs and times. Coal Insights Bureau
C
lean coal technology, as is well known, is a pool of technologies developed to reduce the environmental impact of coal fired thermal power generation. The efforts to clean the “dirty fuel” date back to the 1980s. Over the last 30 years, more than $50 billion has been spent for development and deployment of traditional clean coal technologies across the world. However, it was not until late last decade that the world’s first ‘clean coal’ power plant was commissioned in Europe.
44 Coal Insights, April 2013
Traditionally, it was the UK and Europe which had been in the forefront of clean coal initiatives in the last millennium; but the news of the most effective breakthroughs have just come from the US. A group of scientists at Ohio State University has recently developed a way to capture the energy from coal without actually burning it. This technique is called Coal-Direct Chemical Looping (CDCL) and it is claimed that CDCL can eliminate 99 percent of the pollution occurring from coal (e.g. sulfur dioxide, nitrogen dioxide, heavy metals such as mercury and arsenic, and acid gases such as hydrogen chloride).
Elaborating on the process, the researchers said that the method would help avoid actual burning of coal which is the source of pollutants. The technique would control the chemical reactions so that the dry fuel never burns, but is “consumed chemically”. The waste products in the process would be coal ash and water, while the metal from the iron-oxide is recycled. The researchers expect the technology to be ready for use in power utilities within a decade. The biggest benefactor of this method would of course be the environment. According to the Environmental Protection Agency (EPA), in 2010, coal-burning power plants were responsible for about one-third of the US carbon dioxide emission. This number would come down significantly once burning of coal is done away with. It would not only contain the pollution from coal, but would also give the renewables sector the time to grow and take over, thus benefiting both China and India which are striving to increase the portfolio of green energy in their fuel baskets. Meanwhile, the energy unit of GE Electric has developed a new technology to reduce emission from coal-fired power utilities. This comes as an intermediary solution to reduce pollution from coal before the “chemical consumption” process is ready for use. This process, called air filtration technology, uses bi-component felt medium in fabric filters as a replacement for the 100 percent polyphenylene sulphide (PPS) felt which is currently in use. The bi-component
Way to go? Meanwhile, some experts express doubt on the scalability of the Ohio State University research project. The researchers have reportedly used the process to power a 25 kilowatt experimental plant, and a 250 kilowatt demo plant is in the works in Alabama. They aim to implement the process in a 20-50 MW plant by 2020. However, the experts opine that the case may turn out to be similar to the biofuel experiment, which looked highly promising at the pilot levels but lost its charm when used on a large scale.
technology medium is comprised of a high-strength polymer core, which is contained in a PPS sheath and laminated using GE’s ePTFE membrane. The medium is more durable and efficient than pure PPS felt filters. This composite filtration medium is claimed to be a major advancement in current clean coal technologies. India searches on
While the researchers in the US and Europe consistently develop new techniques to further advance the clean coal technologies, India continues to depend on foreign collaboration and assistance to make any progress worth its salt. Earlier, the UK provided assistance in clean coal technology as part of its DFID grant projects in the country. There was little headway and hardly any initiative from the Indian side as both coal consumption and burning were rather limited. In the first half of the last decade, there was a dramatic growth in coal consumption, but no corresponding initiative was found to develop technology to curb pollution. Subsequently, the intense pressure from the green brigade and the environment ministry (MoEF) compelled the government and the industry to look out for help. In 2011, India sought cooperation with South Africa in the fields of clean coal technology like CTL, UCG and coal beneficiation besides modern technology for underground coal mining, including advance shaft sinking and drift drivage technologies, from South Africa.
In view of the sustained campaign against coal, it is in the best interest of the economy that the government takes a proactive stance to leverage on its vast research talent pool. New scientific breakthroughs such as CDCL would actually take the wind off the sail of the green lobby.
Coal Minister Sriprakash Jaiswal visited the country, seeking its help in clean coal technology initiatives. In the bilateral talks held with the minister of energy of South Africa, Susan Shabangu, Jaiswal said that India is committed to introducing clean coal technology in view of increasing environmental concern and it has already planned to introduce CTL technology in two of its coal blocks. South Africa, being the owner of the oldest and largest ‘Coal to Oil’ plant, could assist India to transfer the technology in the other mining projects also. Jaiswal urged the South African government to assist India in UCG technology which is considered to be a clean coal technology, as all pollutants are left in the underground reactor and only the resultant syn-gas by burning the coal insitu is taken out to operate the turbines for generating power. However, not much progress could be heard ever since. Also, there was no fundamentally new and innovative initiative taken for curbing the pollution menace. In a crucial sector such as energy, innovation still finds itself in the back seat. Even private sector companies lack the culture and/or the mindset to aim for long term edge instead of short-term gain in margins. In a number of cases, requests for scaling up innovative research and pilot projects from researchers were turned down by major corporates. Asked to comment on Indian initiatives, a senior research fellow at a premier energy research institute said similar projects are being taken up here, but only in bits and
Coal is the key to emission cut India, the third largest emitter of carbon dioxide, has put in place a “National Action Plan on Climate Change”. The plan envisages that the country will reduce its emissions intensity – the amount of carbon dioxide emitted per unit of gross domestic product – by 20 to 25 percent of 2005 levels by 2020. In order to meet these targets, India needs to curb emissions from the power sector, which accounts for about 60 percent of its total carbon dioxide emissions, according to government data. The country’s power generation capacity is the fifth largest in the world. The power sector’s dominant fuel source, and the most polluting, is coal. India has a total generation capacity of more than 200 gigawatts, of which nearly 60 percent is the coal-fired thermal power capacity. pieces; and hence no major breakthrough could be achieved by the domestic coal industry. India is projected to be the second-largest contributor to the increase in global energy demand by 2035, accounting for 18 percent of the rise, with its energy consumption more than doubling by 2035, according to the International Energy Agency (IEA). Given the immense opportunity that beckons, investments by the corporates in energy research holds significant prospect. Compared to the industry, the environment lobby looks far more determined to champion their cause. Already, Greenpeace India has launched a stir against coal mining in forests and new mining areas. In view of the sustained campaign against coal, it is in the best interest of the economy that the government takes a pro-active stance to leverage on its vast research talent pool. New scientific breakthroughs such as CDCL would actually take the wind off the sail of the green lobby. References: Ohio State University, energybiz. com, DOE, Design Build Source
Coal Insights, April 2013
45
technology
Technological developments for augmentation of Indian coking coal resources T. Gouri Charan
T
he country’s c o a l production has increased from~431 million tons (mt) in 200607 to ~554 mt in 2011-12 (an increase of 28.5 percent). On the other hand, the demand for coal has grown at a CAGR of more than 7 percent in the last decade and has reached around 600 mt. Coal is an essential input in the production of steel. In 2011, the world crude steel production reached 1,518 mt, reflecting a growth of 6.2 percent over 2010. The per capita finished steel consumption in 2011 is estimated at 215 kg for the world and 460 kg for China, while that for India is estimated currently at 55 kg (provisional). This clearly indicates scope for increasing the per capita steel consumption, a factor which correlates to the coking coal availability and production within the country. India has very limited reserves of coking coal which is a key raw material for the production of steel. Coking coal accounts for only 15 percent of the country’s overall proven coal reserves. The Jharia coalfield, located in the state of Jharkhand, holds the majority of the coking coal reserves. The Indian steel industry has been facing acute shortage of coal for the last several years. As per the report of the Working Group of Coal and Lignite for the Twelfth Five Year Plan (2012-17), the steel production by 2016-17 is projected to be 105 mt. The corresponding requirement of coking coal for this quantity of steel is worked out at 67.2 mt in 2016-17. Low volatile coking coal (LVCC),
46 Coal Insights, April 2013
though inferior in qualities but abundantly available in eastern part of the country may be an immediate choice. These coals, being of lower seams are likely to be more matured (Ro ~1.30 percent) than the upper seams and consequently exhibit lower values of volatile matter. The country has a moderate reserve of such coal, amounting to about 50 percent of the total coking coal reserve. Unfortunately, the washability potential of this coal is so poor that the existing washeries having conventional washing technologies may not able to supply coals of ash 17-18 percent as desired by indigenous metallurgical industries and cannot stand in competition with foreign coals because of poor yield of clean coal. As such, these coals are being treated as NLW (Non-linked washery grade) and are supplied to the thermal power plants, against augmenting the demand of metallurgical coal for coke making thus, wasting the scarce coking coal resources. Around 10-12 mt of coking coal is being washed every year to produce clean coal for steel making. During the process, around 1015 percent of coal mined is produced as fines (-0.5 mm) which contains 20-30 percent ash. These fines are upgraded by conventional flotation in cells in the washeries. Due to deterioration of the quality of feed coal having more fines, most of the flotation plants are either not running at all or running much below their capacity, releasing the fines as slurry waste, which pollute land and water. These fines may be beneficiated to the required ash level and used for metallurgical purposes. The coking coal washeries in India are very old and operation of these washeries is becoming difficult. Due to varied reasons the efficiency of individual washers are poor as a result lot of middlings are being generated.
The aspect of recycling of middlings from the coking coal washeries for extracting some percentage of coking coal may be a viable option for augmenting the resources of coking coals. The scarcity of coking coal forces the technologist to look for alternative or reduction of coking coal use in the blast furnaces throughout the globe. The use of pulverized coal injections are some of the major techniques which are holding their ground in steel production in India as well as abroad. About 20-25 percent of the Indian non-coking coal reserves constitute less than 30 percent ash. They are mostly being fed to thermal plants, some of these coals may be beneficiated to obtain clean coal of less than 10 percent ash and use it for pulverized coal injection. This will not only help in conserving the scare coking coal reserves but also help to save considerable foreign exchange. The present paper highlights some of the findings for augmentation of coking coal resources for metallurgical purposes. LVC/NLW coals of Jharia and West Bokaro Coalfields
The LVC/NLW coals of Jharia and West Bokaro coalfields are presently being fed to power plants despite the fact that these coals may be used for metallurgical purposes after suitable beneficiation. Resources of such coals are estimated to be around 6.4 billion tons. These coals are termed as Non Linked Washery (NLW) coal or Low Volatile high Rank (LVHR) coking coal and they generally occur in lower seams (combined seam V/ VI/ VII/ VIII and even seam IV, III, II) of Jharia Coalfield and Karo group of seams (IV to XI) in East Bokaro Coalfield. It has been tested by SAIL and CIMFR that these LVC coals may be a potential source of energy for steel industry in India for use in blend with imported prime coking coal, if it is beneficiated to 17.5 + 0.5 percent ash level. Detailed R&D work on development of a suitable flow scheme was carried out on various sources of coal samples from the Eastern and Western Sector of Jharia Coalfields and West Bokaro coalfields. The technological option for washing coals is detailed as below:
technology Eastern Sector yy It has been proposed to crush Run of Mine coal (maximum size range of 1500 mm by Feeder breaker or suitable crushing equipment to crush ROM coal down to size 200mm. Coal of size – 200 mm will then be crushed to 75 mm, which will be feed to the washing plant. yy The crushed product may be fed to a three product Baum Jig, wherein a pre cleans will be generated, along with middlings, which may be used for power generation through PFC route while the rejects may be used for power generation through FBC route. yy This pre cleans may be screened at 13/6 mm and deslimed at 0. 5 mm mainly to achieve trhee products viz., 75 – 13/6mm, 13/6 – 0.5mm and below 0.5mm yy The fraction 75-13/6 mm may further be treated in a Heavy Medium Drum Separator, depulping and rinsing of both the products will be done in screens for recovery of magnetite. yy The fraction 13/6-0.5 mm may be treated
in Heavy Medium Cyclone and depulping and rinsing of both the products will be done in screens for recovery of magnetite.. yy The fraction below 0.5 mm may be treated in flotation circuit either conventional or column floatation cells. yy The cleans of H. M. Drum Separator, H. M. Cyclone and Flotation may be combined (after dewatering) to achieve total clean coal for metallurgical purposes. yy The sinks of H. M. Drum Separator and H. M. Cyclone may be combined and used as foundry fuel.
yy
yy
yy Western Sector yy It has been proposed to crush Run of Mine coal (maximum size range of 1500 mm by Feeder breaker or suitable crushing equipment to crush ROM coal down to size 200mm. Coal of size – 200 mm will then be crushed to 75 mm, which will be feed to the washing plant. yy Jigging of – 75 mm coal in a 2-product washery preferably, wherein pre-cleans
yy
yy
will be generated and used for further processing and the second product i.e., the rejects will be used for power generation, The pre cleans may be screened at 13/6 mm and the fraction 75-13/6 mm may further crushed to 13/6 mm and the crushed fraction may be mixed with natural 13/6 mm. The combined fraction may be deslimed at 0.5mm, to achieve two products viz., 13/6-0.5 mm and – 0.5 mm. The fraction 13/6-0.5 mm may be treated in Heavy Medium Cyclone, depulping and rinsing of both the products may be done in screens for recovery of magnetite. The fraction below 0.5 mm may be treated in flotation circuit either conventional or column floatation cells. The cleans of H. M. Cyclone and Flotation may be combined (after dewatering) to achieve total clean coal for metallurgical purposes. The Heavy Medium Cyclone rejects may be mixed with the Jig rejects to get a combined rejects, which may be used for power generation through FBC route.
Coal Insights, April 2013
47
technology West Bokaro Coalfields yy It has been proposed to crush Run of Mine coal (maximum size range of 1500 mm by Feeder breaker or suitable crushing equipment to crush ROM coal down to size 200mm. Coal of size – 200 mm will then be crushed to 75 mm, which will be feed to the washing plant. yy The crushed product may be fed to a three product Baum Jig, wherein a pre cleans middlings and rejects are obtained. yy This pre cleans may be screened at 13 mm and deslimed at 0. 5 mm mainly to achieve three products viz., 75 – 13mm, 13 – 0.5mm and below 0.5mm yy The fraction 75-13 mm may further be treated in a Heavy Medium Drum Separator and the fraction 13-0.5 mm may be treated in Heavy Medium Cyclone yy The floatability characteristics of the coal fines are poor and as such this may be blended with middlings or rejects depending upon the ash content. yy The cleans of H. M. Drum Separator and H. M. Cyclone may be combined (after dewatering) to achieve total clean coal for metallurgical purposes. yy The sinks of H. M. Drum Separator and H. M. Cyclone may be combined with jig middlings and used for power generation. yy The total rejects may be used for power generation through FBC route or brick making etc., Beneficiation of Coal Fines
The coking coal fines (-0.5mm) generated from various coal washeries are lying in the lagoons/settling ponds for decades long and in addition to these a huge quantity are bled every month to these waste basins on a regular basis. These waste fines are basically vitrinite enriched coking material which can be utilized properly if beneficiated in a judicious manner. Beneficiation of this coal slurry by froth floatation techniques is assuming increasing importance in India. The present study of beneficiation of these waste settling pond fines can recover fine cleans (ash <17 percent) which if use suitably can improve the coking property of the coke oven blend for coke making.
48 Coal Insights, April 2013
Table 1: Experimental results carried out on various coal fines Processes
Patherdih
Moonidih (Fresh)
Bhojudih
Moonidih (Old)
Yield%
Ash%
Yield%
Ash%
Yield%
Ash%
Yield%
Ash%
Flotation
53.2
18.0
85.4
14.2
65.6
13.1
67.3
15.0
Oleo Flotation
50.0
18.0
85.2
12.6
67.5
12.1
61.6
14.0
Oil Agglomeration
75.5
22.5
83.4
13.7
85.6
15.5
73.0
15.4
Column Flotation
76.0
18.0
90.4
14.0
67.9
11.9
68.5
12.4
Jameson Cell
58.0
18.0
78.5
10.9
79.3
14.7
72.5
15.5
Spiral
35.0
17.0
70.0
18.0
32.9
14.4
38.0
17.0
Water Only Cyclone
50.8
21.6
78.6
18.9
85.6
22.4
70.0
19.2
Multi Gravity Separator
77.2
23.1
92.5
17.6
89.6
18.6
80.0
18.5
The coal fines samples were collected from Patherdih, Bhojudih, Moonidih (fresh) and Moonidih (old stock). It was noted that the overall ash content of the coal fines varied between 22.6 to 35.1 percent. Coal fines collected from Patherdih Washery showed highest ash content and Moonidih fines were having the lowest ash content. The Volatile Matter was observed to be around 20 percent for all the coal fines. The size analysis on the coal fines collected from different washeries was done in the laboratory at sizes 0.5, 0.25, 0.125 & 0.063 mm. It was observed from the results that the quantity of ultrafines (- 0.063 mm) varies from 16.2 to 53.3 percent. The coal fines from both Moonidih and Bhojudih washeries contain very high percentage of ultrafines, more than 50 percent, which may adversely affect the processing of the raw material. To beneficiate these coal fines various extensive experimental work was carried out using processes like flotation, oil agglomeration, column flotation, Oleoflotation, Jamsen Cell, Spiral, Water-only Cyclone, Multi-gravity Separator . The results are tabulated in Table – 1. In the case of beneficiation studies based on surface properties the results indicate that all the samples are amenable for beneficiation by flotation techniques (Conventional and Column). These can be beneficiated by conventional cell or column to reduce the ash below 17.0 percent. These results indicate that flotation column technique is giving superior performance compared to
cell. Flotation column can give better grade product (2-3 percent less ash) for same yield or higher yield (5-10 percent) at same ash level. In the case of beneficiation studies based on gravity techniques, all the different coal samples were tested in units like Water-Only Cyclone, C-900 MGS, and spiral separator. Based on ash content of clean coal, WOC performed better than MGS; however based on separation efficiency MGS is superior to WOC. Separation efficiency values for MGS are higher than WOC while treating all the four coals. Recovery of additional cleans from Middlings of coking coal washeries
Some of the existing coking coal washeries of CIL are more than 40 years old. They were basically designed for washing Washery Grade III coal having ash percentage up to 28 percent. Over the years, reserves of good quality coal have been depleted in the neighboring mines resulting in radical deterioration in raw coal feed quality and characteristics. The washing units installed in these washeries are very old and their efficiency is poor as a result good quality coal is being reported to the middlings. Further, most of the washeries are operating on two product basis i.e., cleans and middlings. The rejects are being mixed with the middlings and dispatched to the power plants. The plants are being operated in such a way that middling + rejects ash to be around 40 to 45 percent, so that they may be sent to power
technology stations. In this way huge amounts of coking coal resources are being wasted. Extensive studies are required to recover additional cleans from these middlings, which may be a potential source of augmenting good quality coking coals.
yy
Non-coking coal sample suitable for Pulverized Coal Injection
Non-coking coals are being mostly preferred for blast furnace injection for cost saving by reducing coke rate. About 30 percent of coal can be saved by injecting fine coal particles into the blast furnace, a technology called Pulverized Coal Injection (PCI). About one tonne of PCI coal used for steel production displaces about 1.4 tons of coking coal. About 20-25 percent of the Indian non-coking coal reserves constitute less than 30 percent ash. They are mostly being fed to thermal plants, some of these coals may be beneficiated to obtain clean coal of less than 10 percent ash and use it for pulverized coal injection. This will not only help in conserving the scare coking coal reserves but also help to save considerable foreign exchange. Detailed laboratory investigations in terms of characterization and washability followed by pilot plant studies carried out on typical coal sample from Eastern Coalfields and suggest the concept of beneficiation for the improvement in the quality of run-off-mine (ROM) coal. The characterization studies of the clean coal strongly support its use as pulverized coal injection in steel making. The clean product also meets the other specifications of PCI like low to medium volatile content, very low phosphorous and sulfur and suitable grindability index.
yy
yy
yy
yy
yy
Beneficiation strategy for washing ECL coal The coal was crushed to below 50 mm, Laboratory washability investigations on ROM Coal crushed to <50mm reveals that the theoretical yield at 10 percent ash level was 35.0 percent. The simulation studies indicated that the coal may be classified into three streams viz., 50 – 6 mm, 6 -0.5 mm and below 0.5 mm. The process description for generation of clean coal at 10 percent ash level is as follows: yy The ROM coal was crushed to 50mm
yy
and the crushed product was screened at 6 mm and deslimed at 0.5 mm. The fraction 50 – 6 mm constituted 69.2 percent and the ash content was 26.6 percent, the fraction 6 – 0.5 mm constituted 22.4 percent and the ash content 21.4 percent, while the fraction below 0.5 mm constituted 8.4 percent and the ash content was noted to be 35.7 percent. Basic studies carried out on 50 - 6 mm fraction of the coal indicated that the coal need to be cut at about 1.35 – 1.36 sp. gr. in Heavy Medium Drum separator to achieve the cleans of about 14 percent ash content. The 50 – 6 mm fraction was subjected to H. M. Drum separator wherein teo products viz., clean at ash content of 14 percent and recovery 12.45 percent was achieved and the corresponding rejects ash content being 29.4 percent at a recovery of 56.75 percent. Basic studies carried out on the 6-0.5 mm fraction of the coal indicated that the coal need to be cut at about 1.43 sp. gr. in Heavy Medium Cyclone to achieve the cleans of about 6.8 percent ash content. The fraction 6 – 0.5 mm was fed to the Heavy Medium Cyclone pilot plant unit and was operated at pre-determined conditions. The yield of cleans was noted to be 12.3 percent at the ash level 6.8 percent and the corresponding sinks were observed as 10.1 percent at ash of 36.9 percent. The fraction below 0.5 mm was not subjected to any washing unit and the same was directly mixed with the rejects. On Combining the HM Drum cleans and HM Cyclone cleans, the total clean coal yield was obtained as 24.7 percent at the ash content 10.4 percent. The HM Drum sinks, the HM Cyclone sinks and the below 0.5 mm fraction was combined together and a product having ash content 31.1 percent was achieved at an yield of 75.3 percent, which may be used for power generation.
Characterisation of clean coal It may be seen from the results that the volatile matter content has been increased
from 28.9 percent to 32.2 percent and the percentage of fixed carbon has also been increased from 36.7 percent to 46.8 percent. The results indicate that the upgradation of coal of ECL to the qualities as mentioned above has improved the contents of volatile matter and the fixed carbon. The ultimate analysis also shows that there is improvement in carbon content in the clean coal to that of the raw coal. The sulfur content had slight increased to that of the raw coal, but it is well within the limits. The gross calorific value had increased from 4970 kcal/kg to 6070 kcal/kg. The may be seen from the petrographic analyses of the raw coal and the clean coal samples, that the vitrinite content has increased from 53.5 percent in raw coal to 81.4 percent, and the reflectance has increased from 0.49 to 0.53. It may be due to the fact that rejection of high ash content inertinites has improved vitrinite contents in clean coal samples. The increase in the percentage of vitrinite content increases the reactive content of the coal which helps in producing good quality PCI coal. Conclusion
The following conclusions may be drawn from the above studies for augmentation of coking coal resources: ♦♦ The inferior quality LVC/NLW coking coals of Jharia and West Bokaro Coalfields may be upgraded to the desired quality if the coals are judiciously beneficiated. ♦♦ Beneficiation of coking coal fines lying at various washeries by adopting suitable technology. ♦♦ Recovery of additional cleans from middlings generated at various washeries. ♦♦ Utilization of non-coking coal resources for PCI injection after suitable beneficiation to the required ash level. Acknowledgements: The author is thankful to the Director CIMFR, Dhanbad for giving his consent to publish this paper. The author is also thankful to all the staff members of the coal preparation division for providing valuable support at various stages of this work.
Senior Principal Scientist and Head, Coal Preparation Division, Central Institute of Mining & Fuel Research, Dhanbad (gouricharan@yahoo.com)
Coal Insights, April 2013
49
CORPORATE
Govt considering proposal to divest 10% in CIL
of Association to provide for buyback of shares, if such provisions did not exist. It (the Articles of Association) states that if a CPSE decides to buy-back its own shares from the shareholders using surplus cash, the DoD may offer government’s equity in the firm on behalf of the government. Coal India, with a cash balance of about `60,000 crore, would need approval of the board before going in for a buyback. The DoD would soon invite bids from merchant bankers and legal advisers for managing the CIL stake sale. Unions plan strike
Tamajit Pain
I
n what could result in another bonanza for the state exchequer, the government is considering a proposal to divest 10 percent of its stake in Coal India (CIL). But a section of the employees promise the move would not be seamless. “The proposal for divestment of 10 percent of 90 percent government shareholding in CIL is under consideration of the government,” minister of state for coal Pratik Prakash Patil said in a written reply to the Lok Sabha. The minister said the proposal was under consideration “in consultation with the various stakeholders”. The finance ministry had earlier moved a draft note of the Cabinet Committee on Economic Affairs (CCEA) for interministerial comments on a stake sale. As per the latest information, the government may opt for the Offer for Sale (OFS) route in the first quarter of this fiscal (2013-14). However, a section of CIL employees has warned of going on strike if the government went ahead with the stake-sale proposal. Earlier, the government had raised `15,199 crore in 2010 by offloading 10 percent in the PSU. At the current price of the stock, the government expects to garner around `17,000 crore by selling 10 percent stake in the company. Overall, in the fiscal
50 Coal Insights, April 2013
year 2013-14, the government plans to raise `40,000 crore by way of PSU stake sale. Buyback option
However, sources said that the government being not confident of raising `17,000 crore through OFS in Coal India, may ask the PSU to buy back a portion of the proposed 10 percent share sale. Accordingly, the 10 percent stake sale may be split into OFS and buyback in view of the volatile market conditions, the sources said. According to market observers, in such weak markets it will be very difficult to raise the amount targeted in any other way. Coal India being a cash rich company could participate in the buyback and help government raise funds. “The fund to be mobilised through CIL stake sale is quite substantial. Since foreign funds are not very bullish on India, it could be done through OFS and buyback to ensure that money comes to the exchequer,” the sources said. The Department of Disinvestment (DoD) has already floated a draft Cabinet note for seeking comments from administrative and other concerned ministries for the stake sale in CIL in tranches. The DoD is awaiting opinion from the Coal Ministry (MoC) for formulating the final Cabinet note. Last year, the government had directed all central PSUs to amend their Articles
Meanwhile, Coal India’s employees’ unions plan to go on an indefinite strike should the government proceed with a plan to sale shares in the company. The workers will “vehemently oppose” any such decision, said S.Q. Zama, secretary general at the ruling Congress Party- backed Indian National Mineworkers Federation, citing a memo to Coal Minister Sriprakash Jaiswal. A day’s strike in Coal India may lead to a loss of about 1.2 million tons (mt) of production, worth around `170 crore, based on the company’s average selling price of `1,438 per ton in the quarter ended December 31, 2012. The stoppage will squeeze supplies to Indian power plants, cement and steel factories. Coal India, which missed its output target for the year ended March 31, is battling law and order problems, labor unrest and delays in acquiring land and mining approvals to boost production and avoid resorting to imports to meet contracts. A peak shortfall of 9 percent in electricity supplies leads to outages that shave about 1.2 percentage points off the $1.8 trillion economy, according to the government. Five central worker unions, led by the Indian National Trade Union Congress (INTUC), opposed a 10 percent share sale in Coal India in 2010, saying it would pave the path for privatisation of the company and jeopardize employee interests. The stake sale went ahead on the assurance that no further stake would be sold. All coal sector workers will go on a continuous strike from the day this decision is announced by the government,” said Jibon Roy, secretary at the Centre of India Trade Unions, a unit of the opposing Communist Party of India (Marxist). “On this matter, we are one.”
Event
ICECB conference highlights India’s coal beneficiation woes
Coal minister Sriprakash Jaiswal inaugurating the conference
Coal Insights Bureau
A
fter two-years of near-stagnation, India’s coal sector ended the year 2012-13 with a 3.24 percent growth in production. While this is welcome news, the country needs to augment production growth further to curb bulging imports. Given the growth in demand, India needs to grow its coal output by around 6-7 percent per annum. However, as the country’s coal production increases at a rate of 6 to 7 percent annually, which is subject to policy reforms, insufficient coal processing capacity could pose a serious impediment to the coal supply chain. Coal beneficiation capacity need to be enhanced by taking up construction of more and more washeries on a ‘Mission’ mode. This is important both from the commercial point of view of better implementation of GCV based grading and pricing of coal as well as
for compliance of environment ministry’s (MoEF) mandate that coal of 4000 Kilo cal/kg and more can only be supplied to the power plants located beyond 500 km from the supply sources and also to those located in environmentally sensitive and urban locations etc. This issue was recently highlighted in the International Conference & Expo on Coal Beneficiation 2013 held in Delhi on April 18-19. The two-day conference was attended by over 250 delegates from nine countries including Australia, China, Denmark, Germany, Norway, Poland, USA, Ukraine and also the who’s who of the India coal industry. The conference was organised by Coal Preparation Society of India (CPSI) along with TAFCON and CMPDI. The dignitaries who attended the conference include S K Srivastava, Secretary, Ministry of Coal; S Narsing Rao, Chairman, Coal India
Ltd; C S Verma, Chairman, SAIL; Sandeep Jajodia, CMD, Monnet Ispat & Energy Ltd; A K Debnath, CMD, CMPDIL; P K Lahiri, Chairman, General Council & EB, Indian School of Mines; and R K Sachdev, President, CPSI. There were about 35 companies participated in the exhibition with large participation from Ukraine, China. The major participants were Neyveli Lignite Corp, FLSmidth, Metso, Monnet Group, MBE Coal, Jindal Steel & Power, Tata Steel, Schenck Process, KSN, Embassy of Poland, MMD, Orbinox, Scantech, Eimco-ECP, Unimark, Westech etc. The delegates spoke at length about the sorry state of the domestic coal beneficiation industry. The pace at which new coal washeries are coming up is painfully slow and highly disappointing for the coal preparation industry. Coal producers do not seem to be keen on setting up washeries as they want washing of coal to be ‘revenue neutral’. Also, coal consumers want it to be ‘cost neutral’ to them. In such a scenario, the recently reported quality related dispute between Coal India Ltd (CIL) and NTPC should be seen as precursor of things to come, the speaker said. Union Coal Minister Sriprakash Jaiswal, in his inaugural address stressed upon the importance of coal quality. He said that use of COAL as mined is not easy in view of the contaminants that are inherent in the coal seams and those which get associated in the course of mining. These impurities make it difficult even to maintain the in-situ quality of run of mine coal thus require cleaning or beneficiation to a desired level so that quality related concerns of consumers are properly addressed. The minister further said, “While maximising the yield of clean coal is always the main objective in designing a washery, however, depending on the requirements, reduction of ash to a desired level takes place even if the yield gets adversely affected. As long as rejects contain reasonably good heat value they can be put to commercial use.” The minister informed the gathering of experts and policy makers that a task force of the Ministry of Coal is working on the Policy issues of coal beneficiation and is likely to submit its report shortly.
Coal Insights, April 2013
51
International
US coal production expected to rise by 1% in 2013: EIA Chandrika Mitra
U
S coal consumption which fell in 2012 is estimated to increase by 0.5 percent to 948.5 million short tons (MMst) in 2013, as primary and secondary inventory draws, combined with an increase in coal imports, meet most of the growth in consumption, according to the latest report by US Energy Information Administration (EIA). Coal consumption may further rise to 957.2 MMst in 2014, which is much higher than that estimated last month. The agency further expects consumption in the electric power sector to increase over the forecast period as a result of higher electricity demand and higher natural gas prices, but remain below 900 MMst. Coal consumption in the electric power sector in 2013 and 2014 is expected to be 885.2 MMst and 889 MMst, respectively. As estimated by EIA, coal production in the US is expected to increase in 2013 to 1,025.4 MMst as compared to 2012. However, this is lower than estimates provided in the agency’s previous report as coal production has continued to decline as per estimates for the first quarter of 2013. Total production is down 9.9 MMst from the previous quarter and 22.7 MMst from the same period in 2012. However, coal production is forecast to grow in 2014 to 1,045.9 MMst, as compared to 2012 and 2013. Again, figures for the same reported
52 Coal Insights, April 2013
in last month’s report were lower at 1,044.0 MMst as compared to April estimates. Coal trade
EIA expects coal exports to decline to 106.7 MMst in 2013 in its April report from 110.5 MMst in recorded in its previous report. However, the current report estimates that in 2014 coal exports might rise to 109.8 MMst which is almost in line with 109.1 of coal exports MMst recorded in its March report. Continuing economic weakness in Europe (the largest regional importer of US coal), falling international coal prices, and increasing production in other coalexporting countries are the primary reasons for the expected decline in US coal exports. US coal imports may increase to 11 MMst in 2013 from 10.1 MMst reported last month and to 10.8 MMst in 2014, as per the agency’s latest report. Coal prices
Delivered coal prices to the electric power i n d u s t r y increased steadily over an 11-year period through 2011, when the delivered coal price averaged $2.39 per MMBtu (a 5-percent increase from 2010). The
delivered coal price averaged $2.40 per MMBtu in 2012, and EIA forecasts average delivered coal prices of $2.41 per MMBtu in 2013 and $2.45 per MMBtu in 2014. Electricity
EIA projects US residential sales of electricity during the upcoming summer months of June, July, and August will average 5 percent below sales during the summer of 2012. For the entire year, US residential electricity sales increase by 0.5 percent to 3.78 billion kilowatthours per day during 2013 and by 0.8 percent to 3.8 billion kilowatthours per day in 2014. US retail electricity sales to the commercial sector increase by 1.0 percent to 10.17 billion kilowatthours per day in 2013 and by 0.8 percent to 10.26 billion kilowatthours per day in 2014. Industrial electricity sales increase by 1.4 percent to 2.72 billion kilowatthours per day and 1.2
percent to 2.75 billion kilowatthours per day in 2013 and 2014, respectively. EIA expects total US generation of electricity to grow by 1.0 percent in 2013 and by 0.9 percent in 2014. It expects generators to increase their use of existing coal capacity, leading to a 7.8 percent increase in US coal fired generation during 2013. This increase, which results because of the increasing cost of natural gas relative to coal, raises the share of total generation fueled by coal from 37.4 percent 2012 to 39.9 percent in 2013, but still below coal’s 42.3-percent fuel share in 2011. Rising costs of infrastructure upgrades continue to drive increases in residential electricity rates, although lower fuel prices in recent years have kept growth in retail rates relatively modest. After an increase of 1.4 percent during 2012, EIA expects US retail residential electricity prices will grow by 2.8 percent in 2013 and by 2.3 percent in 2014.
International
New pet coke capacity in Middle East may augur well for India
Coal Insights Bureau
C
oming up of a state-of-the-art and the biggest refinery in Saudi Arabia by December this year with a capacity to produce about 2.1 million tons per annum (mtpa) of petroleum coke is likely to augur well for Indian cement companies which are currently importing the material from the US Gulf, industry sources feel. Saudi Arabia’s national oil company, Saudi Aramco and France’s Total Oil Co. has formed a joint venture company named Saudi Aramco Total Refining and Petrochemical Company (SATORP) to set up a 20 mtpa refinery on the shore of the Persian Gulf that will also produce 2.1 million tons (mt) of petroleum coke. “Annual petcoke production is estimated to be around 2.1 mtpa and export of these products will depend on seasonal demand within the kingdom,” an official of SATORP was quoted as saying. “Indian companies, besides buying from domestic refineries like Reliance Industries Ltd and Essar Oil Ltd, are buying huge amount of imported pet coke from the US and coming up of this new refinery in the Middle East (ME) might lead to reduction in their cost,” an official of a cement company said. According to a compilation by India Coal Market Watch (ICMW), India’s pet coke import in 2012-13 stood at around 3.0 mt and almost the entire material had come from the US.
Incidentally, US refineries account for nearly 60 percent of the total petroleum coke exported from various countries. “We can use pet coke with any amount of sulphur provided the heat value is high and price is competitive because we have already installed Effluent Treatment Plants (ETPs) and can economically use the material,” the official of the cement company said. Petroleum coke with high sulphur and high calorific value of over 6500 Kcal/kg suits the requirement of Indian cement makers who also buy huge amount of material from domestic refineries. Some of the Indian cement makers use petroleum coke in cement making as well as in their captive power plants because of higher calorific value (heat value) as compared to steam coal. The cost of imported high-sulphur (6.5 percent) petroleum coke is currently pegged at around $105 per ton CFR, while the basic price of domestic petroleum coke is around `5,950 per ton (ex-refinery). In comparison, the price of South African coal (6000 Kcal/ kg NAR), which has low sulphur and is preferred by a large number of Indian cement makers is around $95 per ton CFR. Thus, in terms of per unit heat realisation, it is cheaper to use petroleum coke compared with South African coal. However, a few companies had recently started bringing in high-sulphur and high calorific value US steam coal, as replacement of petroleum coke, but that has come to a halt as of now
because US steam coal has some inherent characters of coking coal and as such customs officials here impose a countervailing duty of 6 percent on such coal. SATORP refinery
Saudi Aramco has 62.5 percent stake in SATORP while the rest 32.5 percent is with Total Oil. “We are building our biggest refinery in Saudi Arabia, on the shores of the Persian Gulf. Boasting the latest technological innovations, the refinery will be able to process heavy oil from the world’s biggest fields,” the official of Saudi Aramco had said. Located in Jubail’s industrial district, barely 10 kilometres from the Persian Gulf coast, the refinery will be supplied by pipeline from two giant offshore fields, Manifa and Safaniya. It will have a capacity of 400,000 barrels of crude oil per day, or roughly 20 million metric tons a year. The new facility will help to meet constantly growing demand for refined products in the Middle East and Asia when it comes on stream in late 2012. Both the Manifa and Safaniya fields were discovered in the 1950s. Manifa will be developed for the first time during the refinery’s construction. Its estimated 11 billion barrels of reserves make it one of the world’s largest still undeveloped deposits. Safaniya, by far the biggest offshore oil field, with reserves estimated at 19 billion barrels in 2004, currently supplies mostly bitumen and heavy fuel oil for industry and bunker fuel for the shipping sector. With its high sulfur content and unusually high proportion of heavy residues, the crude oil from these fields cannot be used directly. It must first undergo a complex process, called deep conversion, which requires sophisticated, capital-intensive installations. To support full conversion, Total plans to equip the Jubail refinery with a comprehensive palette of units to process heavy crude oil. They will include a distillate hydrocracker (DHC), a fluid catalytic cracker (FCC) and a delayed coker. This configuration will optimize the production of diesel fuel and jet fuel. Plans also call for annual production of 700,000 metric tons of paraxylene, 140,000 metric tons of benzene and 200,000 metric tons of high-purity propylene for the petrochemical industry.
Coal Insights, April 2013
53
International
RBCT’s Q1 coal exports up 1.5% Coal Insights Bureau
T
he export of coal through Richards Bay Coal Terminal (RBCT) of South Africa increased by 1.57 percent during the January-March quarter (Q1) of 2013, and stood at 17,155,802 tons as compared with 16,890,511 tons recorded during the corresponding period of the previous year, according to provisional data available with Coal Insights. The coal exports remained subdued in the first two months of the year, but picked up momentum thereafter. In March 2013, coal export through RBCT was up by 37.39 percent and stood at 7,490,334 tons, compared with 5,451,541 tons exported in February 2013. Exports during the month were also up by 18.16 percent compared with 6,339,413 tons exported in March 2012. The total export via RBCT in 2012 stood at 68.44 mt, up 5.88 percent compared with 64.64 mt exported in 2011. In financial year 2012-13, the export through RBCT stood at 68.71 mt, up 2.22 percent from 67.22 mt in 2011-12. Coal export through RBCT
India’s coal import from SA falls
Although the overall coal export via RBCT moved up in March, India’s coal import from RBCT stood at 1,769,861 tons in March 2013, down 4.33 percent as compared to 1,849,894 tons in February, according to data made available to Coal Insights by one of the promoter s of the terminal. The import in March 2013 was also down 7.19 percent compared with 1,906,978 tons imported in March 2012. The import during the first quarter of India’s coal imports from RBCT (in tons)
(in tons)
Months
2013
Month
2012
2013
2012
January
4,213,927
4,463,987
January
1,163,672
1,255,412
February
5,451,541
6,087,111
February
1,849,894
1,915,301
March
7,490,334
1,769,861
1,906,978
6,339,413
March
April
5,174,739
April
1,577,256
May
4,627,648
May
1,371,460
June
5,454,166
June
1,583,151
July
6,279,244
July
1,696,305
August
5,883,215
August
1,649,635
September
5,239,216
September
1,748,242
October
5,563,800
October
2,166,051
November
6,496,279
November
2,178,292
December
6,831,659
December
2,401,944
Total Jan-March
17,155,802
16,890,511
Total (Jan-March)
4,783,427
5,077,691
Total
17,155,802
68,440,477
Total
4,783,427
21,450,027
54 Coal Insights, April 2013
2013 (January-March) stood at 4,783,427 tons, down 5.80 percent as compared with 5,077,691 tons imported during the corresponding period of 2012. India accounted for 23.63 percent of the total coal exported through RBCT in March 2013 whereas the share stood at 30.08 percent in March 2012. India’s coal import from RBCT of South Africa stood at a record 21.45 million tons (mt) in 2012 on the back of a record import of 6.75 mt coal in fourth quarter (OctoberDecember) as compared to a total of 16.13 mt imported in 2011 and 20.99 mt in 2010. The country’s coal import from South African during the financial year 2012-13 stood at 21.16 mt as compared to import of 17.35 mt in 2011-12. China’s coal imports from SA surges in March
Although coal import by India from RBCT dipped in March, for its neighbouring country, the scenario was a little different. China’s total coal import from RBCT surged 14.23 percent in March 2013 as compared to the quantity imported in February, the data showed. Total coal import by China from RBCT during March 2013 stood at 1,592,609 tons whereas 1,394,225 tons were imported during February 2013. The imports in March 2013 were also up
International Coal import by China from RBCT
Will Indian buyers shift to SA to replace low grade Indonesian coal? The prices of Indonesian steam coal, particularly of low and medium calorific value material, have been ruling comparatively higher for the past few months and this has inconvenienced Indian buyers to large extent. However, many feel that this is a temporary phase and Indonesian coal prices will correct in the coming few months, or Indian companies may start exploring other options. In fact, there is a talk doing the rounds that if prices of Indonesian low grade coal continue to remain high for another few months, many Indian companies will be forced to shift to other countries like South Africa, US, Australia or even Colombia. “At present, Indonesia is taking advantage. They have already contracted to sell their higher grade or prime grade steam coal to Korean and Japanese companies. As far as lower or mid-grade coal is concerned, they know that it will be purchased only by Indian and Chinese companies which will not get coal otherwise. Indonesian miners are thus not willing to reduce prices even at the cost of increasing stock,” an official of a leading cement company opined. “Indonesian miners know that though Chinese and Indian companies buy low grade coal, they also engage in lot of bargaining. This time it appears that they have decided not to relent,” the official said. “But this, according to me, is a temporary phase because if this continues, Indian companies will shift to buying South African coal,” said another source. According to him, “It is natural to pay high price for premium coal, but if price of even low grade Indonesian coal is high, then per CV cost goes up. Naturally, buyers will then start comparing the per CV cost of Indonesian coal versus other coal and if this starts happening, which is likely to happen soon, gradually the Indian consumers may start exploring other options.” “Either they (Indonesian) will have to correct their prices or buyers will correct,” the official of cement company said. Indian companies, particularly those in the cement sector, generally consider heat value of coal as their criterion for cost determination. Incidentally, after Indonesia came out with its own index, based on specification of indices for Australian and South African coal, they are now allowing sale of coal below a certain price. “The basic idea behind this was to export higher grade material at a higher price and earn better foreign exchange earnings and at the same time preserve low grade material for their own existing and upcoming power plants. This is beneficial for them and so Indian companies are suffering,” the official added. According to a calculation, at present the plant delivered price of South African coal (6000 Kcal NAR) is around $110/ton for Indian consumers and going by that the per Kcal cost comes to around $0.018. However, the per CV cost of 4200 Kcal GAR or 3900 Kcal NAR Indonesian coal comes to around $62/ton or $0.016 per Kcal. However, since the moisture and ash content of Indonesian coal is much higher compared to South African coal, the cost of Indonesian coal in per Kcal is much higher and this is troubling Indian companies. 27.29 percent as compared to 1,251,086 tons imported in March 2012. With this, China’s coal import from South Africa stood at 3,297,485 tons in Q1 (January-March) of 2013, up 30 percent compared with 2,531,872 tons imported in Q1 of 2012.
However, China’s coal imports from South Africa stood at 12.92 mt in 2012, down from 13.20 mt in 2011. The imports were down 3.66 percent at 13.69 mt in 201213 (April-March) from 14.21 mt in 201112, according to the data. The decline is attributed to a drop in domestic demand.
(in tons)
Months January
2013 310,651
2012 316,365
February
1,394,225
964,421
March
1,592,609
1,251,086
April
814,535
May
1,350,027
June
1,730,684
July
2,108,058
August
895,239
September
656,361
October
783,087
November
963,665
December
1,086,800
Total (Jan-March)
3,297,485
2,531,872
Total
3,297,485
12,920,328
Asian & African countries coal imports up
The import of coal from RBCT by African and Asian countries, excluding India, rose sharply during March 2013 and stood at 3,139,098 tons, up 51.91 percent as compared to 2,066,366 tons imported in February 2013. However, import during the month of March 2013 stood higher by 1.98 percent than 3,078,292 tons imported in March 2012. Besides China, the imports during the month were sharply up by countries like La Reunion, Mauritius, Pakistan and Senegal, the data revealed. Export to Atlantic countries up
The export of coal from South Africa’s Richards Bay Coal Terminal (RBCT) to Atlantic countries in March 2013 rose by 68.14 percent as compared to the quantity exported in February 2013, according to data available with ICMW. The total export from RBCT to Atlantic countries during March 2013 stood at 2,581,375 tons, up from 1,535,281 tons exported in February. The exports in March from RBCT to Atlantic countries, however, rose 90.63 percent from 1,354,143 tons in March 2012 largely on increased imports by countries including Argentina, Brazil, Italy and Turkey.
Coal Insights, April 2013
55
social buzz
CIL could consider benchmarking prices against ex-mine price elsewhere Coal Insights has started a group on LinkedIn called India Coal Market Watch (ICMW). The readers are welcome to join the group and participate in daily conversations and surveys conducted by ICMW on the online forum. Coal Insights may, at its discretion, publish the result of such surveys and discussions for the benefit of a larger audience. Coal Insights Bureau
O
ver the last couple of years, pricing of coal has become a contentious issue in the Indian coal sector. The issue struck the market after Coal India Ltd (CIL), the largest supplier of coal in the country, became listed on the stock exchange. There were angry protests from consuming sections when CIL increased its prices in the process of shifting to GCV based pricing from UHV based system. The coal miner brought down its prices soon after, at the behest of the coal ministry. But this revision also had its detractors in TCI, UK, a shareholder in the company. Things became further complicated when the coal ministry proposed pool pricing of imported and domestic coal for the power utilities.
Price matters
Against this backdrop, members of ICMW shared their views on the online platform to provide well-thought-of inputs. While noting that coal prices in the international markets have declined by more than 30 percent in the last 7-8 months, some of the members suggested that there was a clear case for bringing down domestic prices. The
56 Coal Insights, April 2013
recent weak trend in international prices has reduced the gap with domestic coal prices. “This is the time Coal India should consider revising their prices downward,” said Yogesh Agrawal, Jt. VP (commercial) at DSCL. However, TCI is consistently maintaining that CIL prices should be raised to match the international prices as paid by the imported coal users. This position, the members argued, was not entirely justified. The higher cost of imports is justified by the better quality of coal supplied by the sourcing countries, an industry participant said. There are significant quality and quantity issues facing the industries that source coal from CIL. Considering these factors, Agrawal said “Coal India should benchmark their prices with ex- mine prices in other countries and not compare with delivered (price) in India which has inland freight from mine to port, ocean freight and duties etc. Also there should be solution to grade slippage in CIL coal whereas international supplies are on committed quality with penalty conditions.” Chinese power
The recent softening of coal prices internationall y has largely been caused by the absence of
Chinese buyers. While this may be beneficial for Indian users of imported coal, the miners in other countries are under pressure. In fact, the prices of South African coal have dropped to the level of $80 per ton fob in April, prompting speculation that miners in that country may go for production cut. Commenting on the scenario, Abul K. M. Shamsuddin, mining consultant at Infrastructure Investment Facilitation Center in Bangladesh, said the soft trend is likely to persist for some time. In fact, in the long run, there could be a gradual decline in China’s dependence on coal imports. “I observe the dull trend in international coal market will continue since Chinese are moving forward to use solar system for power generation instead of coal based power plant,” he observed. On the Indian coal sector, Shamsuddin said there was need for speedy implementation of the measures announced by the government, especially the installation of a regulator to decide on crucial issues. “India being one of the largest coal producers in the world must have a regulator in the coal sector for maintaining healthy environment in all crucial events of activities in the sector,” he said. Cairn’s investment
Meanwhile, Cairn India’s move to mobilise funds for its ongoing projects in the country is seen as a welcome step. Recent reports said the company will invest $2 billion over the next few years as part of efforts to raise output by 71 percent from its oil fields in India’s north western state of Rajasthan. Shamsuddin, who is also a consultant in the petroleum sector, said, “When Government of India aims to cut the country’s import dependence by half by 2020 and make it nil by 2030 and encourages more private investment in the sector to boost local hydrocarbon output - Cairn India’s investment of $2 billion over the next few years as part of efforts to raise output by 71 percent from its oil fields, is definitely a good positive sign.”
EXPERT SPEAK
Articulated dump trucks could be a solution for monsoon loss of production J.P. Panda
C
oal India’s output has stagnated for three years in a row and only marginally looked up in 2012-13. The world’s largest coal company with cash reserves of `65,000 crore, has cited a few reasons for this poor show, among which are the following: ♦♦ Coal India does not have new coal blocks; ♦♦ The company does not get forestry, environmental clearances; ♦♦ It is not being able to acquire land; ♦♦ It cannot increase production from existing mines because of infrastructural bottlenecks like rail, road etc.; ♦♦ Heavy rains affect coal production during monsoons. In this article, we will discuss at some length the last point – that of heavy rains affecting production during the monsoons. Around 90 percent of CIL’s production comes from opencast mines and work at opencast mines is affected when there is heavy rainfall. In fact, production from opencast mines comes down sharply during monsoon months due to slushy road conditions. Having said that, it is also a fact that except for a few, most opencast mines do not even have a monsoon preparedness plan, much less implement it. Thus the current scenario calls for a serious review in the company’s overall monsoon preparedness. The Director (Technical) of each subsidiary company should mandatorily review monsoon preparation of each opencast project.
Importance of haul road
The company needs to prepare a haul road plan and drainage plan with width gradient etc. Such plans, once prepared, should not be changed frequently unless urgently required. The company should follow certain standards of haul road gradient, width etc. in letter and in spirit and provide sufficient budget for the purpose. It is surprising that Coal India, which produces nearly 400 million tons (mt) of opencast coal, does not provide sufficient budget for haul road construction, and it is a pity that such an important aspect of opencast mining is totally neglected. Every mine may require at least 3-4 km of haul road and progress of haul road can be hardly approximately 0.5 km per mt depending on the size of the mine. For a production of nearly 400 mt from opencast mines the haul road requirement is 200 km. Assuming
a good haul road costs `2 crore per km, the budget should be nearly `800 crore. Therefore it goes without saying that the budget needs to be enhanced to cater to haul road development. Coal India should also fabricate large size concrete road slabs and lay them by large size cranes over a thick sand bed prepared in advance on the haul roads just before the monsoon or even during the monsoon so that disruption due to slushy conditions during monsoon period is minimised. The best way would be to go for prefabricated concrete road sections and install them before and during monsoon. Haul road organisation
For every large opencast mine, yet another failure of Coal India is that it does not provide for men and machinery for haul road construction and maintenance. Every opencast project should have a haul road organisation, which is independent of the production organisation. The equipment of the haul road organisation should not be diverted for production under any circumstance. It should have equipment like crawler dozers, wheel dozers, small back-hoes and motor graders, vibratory rollers and tippers to carry material. Cranes are to be used whenever concrete slabs are laid on the road.
An articulated dump truck operating on a slushy road
Coal Insights, April 2013
57
EXPERT SPEAK The only work to be done with these equipment is to construct and maintain haul roads, construct and maintain drains/culverts throughout the year. A sufficient number of concrete slabs should be made in advance and kept ready. The suggested haul road organisation should ideally consist of a first class assistant manager, an assistant excavation engineer to maintain the HEMM under them, civil engineers, surveyors and junior staff like overmen, foremen and necessary staff with civil engineer and surveyor. It should also have sufficient contractual manpower to lay murrum, stone aggregates and sand bags on the haul roads. Materials required
The preparations required prior to monsoon in any large mine are: ♦♦ Hume pipes of different sizes 3ft and 2ft and 8 inch diameter steel pipes required near the face to avoid waterlogging; ♦♦ Sand bags prepared in advance in thousands for protecting the sides of temporary Hume pipe culverts from caving during heavy rain. Sufficient quantity of sand should be available for preparing sand beds for laying of concrete slabs; ♦♦ Steel wire ropes to be kept inside steel pipes against getting jammed; ♦♦ Concrete slabs of large size, say, 6mx2.5m (or of size designed by CMPDIL) in sufficient numbers to be stacked at
strategic places near the mine site. As the mine progresses, the slabs are laid over an incompressible layer of sand. The design of concrete slabs and the thickness of layers of sand below the concrete slabs should be done by CMPDIL or a reputed engineering institute in order to cater to HEMM load;
♦♦ Coal India’s dumper population is nearly 6,400, out of which hardly only 40-50 percent are available for production. Even the available ones are used for only six to nine hours per day, which is only 50 percent of the world average. Most of these dumpers cannot operate in slushy roads.
♦♦ Sufficient stock of sand for prefabricated concrete slab base, murrum and road aggregates for filling pot holes stacked by the side of the roads, to be used either manually or by motor grader;
♦♦ Coal India can well afford a few hundred articulated dump trucks which will work under any adverse and slushy road conditions. For each large project, a provision can be made for sufficient number of articulated dump trucks to be operative during monsoon months when the roads are extremely slushy.
♦♦ Wire netting for preparing side walls against OB dumps which may slide or flow into the haul road/drains during rains. Senior officers of the organisation should monitor only haul road conditions and monsoon preparedness. All pre-monsoon work like drains and culverts and stacking of stone aggregates and murrum at strategic places all along the haul roads has to be completed before onset of monsoon in the month of May itself. Maybe introducing a competition for haul road and monsoon preparedness will be a good idea, and the best mine can be given a hefty cash prize or incentive. Coal India should buy articulated dump trucks to maintain production during the monsoons. Coal India’s biggest problem is dumper availability and its utilisation. The following are a few points that should be kept in mind:
♦♦ Four hundred articulated dump tracks may cost `2400 crore, but assuming that a single dumper does 0.8 million cu.m per year, in three months it should do about 0.2 million cu.m. If availability is 90 percent, and therefore 360 dumpers @0.2 million cu.m per dumper means 72 million cu.m of overburden removal. Coal India’s average stripping is ratio 1:1.8, the coal exposure will be 40 mt, which will take care of Coal India’s crisis. If the dumpers are used only mines with less ratio of say 1:0.8 or less like Talcher and Ib valley coalfields, then the coal exposure will be more than 80 mt. ♦♦ With an investment of `2,400 crore, if the production goes up by 40 mt selling at `1,000 per ton, the revenue earned will be `40,000 crore. Is it not good economics?
The author is managing director of Priya Mining Consultancy and Services Ltd, which provides consultancy on both underground and opencast coal mines, including EMP-EIA, forest clearance etc. The company has also produced CDs on a wide variety of subjects including all DGMS circulars from 1957 till December 2010, a history of disasters in coal mines for the last 100 years and safety and productivity improvement in both opencast and underground mining. He is presently senior advisor at the Rampia Coal Mine project of Rampia Coal Mines and Energy Pvt Ltd. The author can be contacted at jppanda2003@yahoo.com Note: The views expressed here are those of the author and not of Coal Insights. The publication does not take any responsibility for the article in part or in full.
58 Coal Insights, April 2013
EXPERT SPEAK
Coal logistic lags will impact India’s economic growth M K Palanivel
C
oal imports are of paramount importance to India as domestic production growth rate has far outstripped demand. There is no doubt that there is an inter-relationship between GDP and infrastructure. However, the shortcomings in the way of transportation of coal need to be dealt with to ensure smooth development. There is an inter-relationship between GDP and Infrastructure. Every 1 percent GDP growth needs an infrastructure investment of 1.5 percent of GDP. Infrastructure should be in place at least two years before the GDP growth is required. In the 4-5 years up to 2011, our GDP growth was between 8 and 9 percent. However, our infrastructure is capable of handling only 5 percent GDP growth and hence cracking at the seams. Thus infrastructure bottlenecks are everywhere including coal transport. The coal transportation infrastructure drawbacks are as follows: ♦♦ Railways, the major transport mode for both domestic and imported coal, face many problems : a) Rolling Stock (wagons) shortage – lack of funds with Railways b) Slow movements of coal and other goods trains with passenger trains getting priority c) Sudden disappearance of the Front Haul cargo of 120 million tons (mt) iron ore exports ♦♦ Indian Road work is an impressive 3 million km but are plagued by serious problems a) Poor quality/surfacing and no dividers at many places/stretches b) Unsuitable for motoring in monsoon season- not all weather c) Mostly single or double lanes only d) Numerous toll gates with attendant corruption and delays e) Slow road movements due to above
factors and average speed less than 30 km/hour f ) Pits and ports don’t have last- mile connectivity, in many cases g) Consequent avoidable and costly stockpiling at both pits and ports Infrastructure/transport sector development initiatives
India proposes to spend $ 1 trillion on Infrastructure of which private investment will be almost half at 47 percent. This will be done during country’s Twelfth Five Year Plan (2012-17). Coal India Ltd ( CIL) has given a proposal to Indian Railways for setting up Special Purpose Vehicles (SPVs) to develop rail linkages from several coal mines in coal rich Indian states/provinces of Jharkhand, Odisha and Chhattisgarh. Indian Railways and CIL will be the major stakeholders and the state governments will hold minor stakes. CIL is cash rich and sitting on surplus funds of close to $2 billion and part of this will be used by CIL in these projects which will alleviate the problems of cash starved Indian Railways. Another help line is given to Indian Railways by NTPC, the power producer requiring 160 mtpa. They have made similar proposals to Indian Railways to set up rail links. NTPC’s rail links proposals pertain to the railways’ infrastructure for industry initiative which is now under discussions at inter-ministerial level and thereafter will go cabinet for approval. The Funds thus advanced by NTPC will be adjusted against the future Rail Freight payable by the user (NTPC). Port capacity/infrastructure: Major issues
Capacity is not an issue at over 300 mtpa, at end of last year, against the import traffic of only around 150 mt in 2012 (JanuaryDecember ). It is slated to go up to around 480 mtpa by 2016-17 against the projected imports of only 250-260 mtpa. However following shortcomings come in the way of efficient port operations:
a) Capacity expansion is not well planned or coordinated leading to anomalies e.g., idle capacity between Gangavaram and Vizag (only 15 km separates them) but Ennore has only one berth for non-EB Coal, Excess Capacity in Mundra (at least for now) and similar cases of mismatches. b) Although some new/private coal berths/ terminals are fully/partly mechanised, the older ports are not well equipped and hence less productive. c) New/private ports are exorbitantly costly scaring away both ship and cargo owners. Why coal imports are of paramount importance to India
Domestic coal production growth rate is far outstripped by that of the demand. Hence, there are huge outages in power generation and resultant long power cuts. This stifles economic growth. For last two years, steel plants are running at lower capacity due to iron ore supply problems and depressed demand. However, if the economy picks up, as is expected, steel production and coking coal demand will shoot up. The cement industry, the third major user of coal after power and steel, are grossly under-supplied. Our annual cement output of about 350 mt uses 40 mt of coal against which, last year, the supply from domestic sources was only 10 mt. Hence India’s coal supply demand gap is more than what is portrayed. The gap is close to 200 mt. For reasons stated earlier, the imports are at a muted level of only 150 mt in 2012. Domestic coal is of lower quality (lower Heat Value/GCV and much higher ash content) and thus we need imported coal (higher GCV and much lower ash content) for blending (2:1, usually). Every country preserves this nonrenewable energy source by partly importing. Hence, even if we improve our domestic coal output substantially, which looks unlikely in the short and medium term, coal imports may have to continue for reasons mentioned above. M K Palanivel is President, All India Bulk Division, Samsara Group, and has rich hands on experience of 45 years including 35 years in shipping, at senior levels. Note: The views expressed here are those of the author and not of Coal Insights. The publication does not take any responsibility for the article in part or in full.
Coal Insights, April 2013
59
logistics
Traffic handling by major ports down 2.5% in Apr-Mar Coal Insights Bureau
T
he 12 major Indian ports have handled 545.67 million tons (mt) of traffic during April-March of 201213, about 2.58 percent lower than 560.13 mt recorded during the same period last year. According to data released by the Indian Ports Association (IPA), the countryâ&#x20AC;&#x2122;s major ports handled a total of 28.29 mt of coking coal in April-March period, up 1.19 percent as compared with the same period last year. However, the movement of thermal coal through the major ports was up 15.78 percent to 58.84 mt during April-March, compared to 50.82 mt achieved in the same period last year. Movement of iron ore through the major
ports showed a significant drop of 55.16 percent in April-March due to restrictions imposed on mining and a hike in export duty on iron ore. The major ports together handled 27.08 mt of iron ore in the Traffic handled at major ports April-March period, (During Apr-Mar, 2013* vis-a-vis Apr-Mar, 2012) compared to 60.40 (*) Tentative (in '000 tons) mt handled in the April to March traffic same period last year. % variation against Ports
2013*
2012
prev. year traffic
Kolkata Kolkata Dock System
11800
12233
-3.54
Haldia Dock Complex
28084
31015
-9.45
Total: Kolkata
39884
43248
-7.78
Paradip
56552
54254
4.24
Visakhapatnam
58960
67420
-12.55
Ennore
17885
14956
19.58
Chennai
53404
55707
-4.13
V.O. Chidambaranar
28260
28105
0.55
Cochin
19845
20091
-1.22
New Mangalore
37036
32941
12.43
Mormugao
17693
39001
-54.63
Mumbai
58037
56186
3.29
JNPT
64501
65727
-1.87
93622
82501
13.48
545679
560137
-2.58
Kandla Total Source: IPA
60 Coal Insights, April 2013
Vishakhapatnam port handled the highest volume of 12.27 mt of iron ore in April-March. This volume, however, was about 12.55 percent lower than the iron ore traffic moved through the port in the same period last year. Movement of container traffic in terms of tonnage fell in the April-March period, while that of TEUs also dropped during the period. The major ports handled 119.81 mt of tonnage and
7.70 million TEUs in April-March period compared to 120.09 mt of tonnage and 7.77 million TEUs in the same period last year. Among the major ports, Paradip port had the distinction of handling the highest volume of thermal coal of around 21.39 mt in April-March period. Visakhapatnam port handled the highest quantity of 6.82 mt of coking coal during the period. Movement of coking coal through Paradip, Kolkata, Visakhapatnam and Chennai ports declined during the period when compared to the corresponding period last year. Six major ports showed negative growth in traffic handling during the April-March period of the current fiscal, while the remaining six showed positive growth on a year-on-year basis. In terms of growth, Ennore port topped the list with6 19.58 percent increase in cargo throughput. V.O. Chidambaranar portâ&#x20AC;&#x2122;s growth was lowest at about 0.55 percent during the period. In terms of traffic volume. Visakhaptnam port clinched the top rank with a cargo volume of 58.96 mt recorded for the period. The Mormugao port registered the highest decline of 54.63 percent in traffic handling during the period due to a fall in iron ore export.â&#x20AC;&#x201A;
logistics
Railways coal handling up 17.9% in March Coal Insights Bureau
T
he Indian Railways transported 48.79 million tons (mt) of coal in March 2013, up by 17.99 percent from 41.35 mt in February 2013, according to information available with Coal Insights. Railways’ revenue earnings from transportation of coal also rose to ` 3,608.30 crore in March from ` 3,041.45 crore in February.
Compared to last year, the transportation of coal in March 2013 was up more than 4.06 mt versus 44.73 mt transported in March 2012. However, the Railways’ revenue from coal transport surged by 7.57 percent to ` 3,608.30 crore in March 2013 compared with ` 3,354.38 crore in the same month last year. Overall, the Railways’ revenue earnings from commodity-wise freight traffic rose month-on-month in March, mainly due to higher transportation of coal and iron ore.
Commodity-wise revenue Commodity
Quantity (in mt) March ‘12
Earning (in ` cr)
March ‘13
March ‘12
March ‘13
Coal (i) for steel plants
4.24
4.45
255.02
245.21
(ii) for washeries
0.12
0.14
2.17
1.72
29.6
31.33
2,305.46
2,474.81
(iv) for public use
(iii) for thermal power houses
10.77
12.87
791.73
886.56
(v) Total
44.73
48.79
3,354.38
3,608.30
1.61
1.56
146.77
139.51
Raw material for steel plants except iron ore Pig iron and finished steel (i) from steel plants
2.58
2.59
420.19
425.17
(ii) from other points
0.85
0.78
79.41
81.81
(iii) Total
3.43
3.37
499.6
506.98
Iron ore (i) for export
0.12
0.6
29.39
150.58
(ii) for steel plants
5.57
5.04
261.12
238.97
(iii) for other domestic users
3.96
4.71
309.28
349.03
(iv) Total
9.65
10.35
599.79
738.58
Cement
10.59
11.05
808.01
876.12
4.35
5.24
579.06
744.77
4
3.1
398.74
313.09
3.66
3.55
406.24
409.49
Foodgrains Fertilizers Mineral oil (POL) Container service (i) Domestic containers
1
0.94
94.57
104.1
2.62
2.91
226.58
289.6
(iii) Total
3.62
3.85
321.15
393.7
Balance other goods
8.21
7.46
636.2
630.04
93.85
98.32
7,749.94
8,360.58
(ii) EXIM containers
Total revenue earning traffic
Revenue earnings from commodity-wise freight traffic during March 2013 stood at ` 8,360.58 crore, up 7.88 percent compared with ` 7,749.94 crore earned in March 2012. Revenue from transportation of iron ore for exports, steel plants and for other domestic user in March 2013 increased to ` 738.58 crore, up 19.88 percent from ` 616.12 crore in February. The quantity of iron ore transported also rose to 10.35 mt as compared to 8.98 mt in the previous month. Revenue from transportation of cement in March 2013 stood at ` 876.12 crore (11.05 mt) as compared to ` 715.83 crore (8.86 mt) in February, while that from food grains transportation climbed to ` 744.77 crore (5.24 mt) in March from ` 651.34 crore (4.54 mt) in February. The Railways’ revenue from transportation of fertilizers in March 2013 rose to ` 313.09 crore (3.1 mt) from ` 304.17 crore (3.08 mt) in February. Revenue from transportation of petroleum oil and lubricant (POL) in March 2013 stood at ` 409.49 crore (3.55 mt), while the same from pig iron and finished steel from steel plants and other points was ` 506.98 crore (3.37 mt). Revenue from container services was ` 393.7 crore (3.85 mt) and from transportation of other goods was ` 630.04 crore (7.46 mt).
Coal Insights, April 2013
61
logistics
Krishnapatnam Port expects to see 40% growth in coal traffic in FY14 Coal Insights Bureau
I
n a short span of five years, Krishnapatnam Port (KPCL) has set multiple benchmarks for India’s ailing port sector. The biggest of these feats is perhaps its extreme agility and adoptability to situations. The port which was established to handle iron ore exports, is surviving without exporting a single ton of the material. Instead, KPCL is fast becoming a major coal port in India, witnessing prolific growth in coal traffic year-on-year.
62 Coal Insights, April 2013
Krishnapatnam Port (KPCL), a leading port on India’s east coast, is expected to register near 40 percent growth in coal handling during the financial year 2013-14. This is over 45 percent growth in coal import registered in 2012-13, a top company official said. “We ended the financial year 2012-13 with total coal handling of around 16 million tons (mt) compared with around 11 mt in 2011-12 and expect to handle over 21-22 mt coal in 2013-14,” the port’s CEO Anil Yendluri said in a recent interaction with media at Krishnapatnam.
Anil Yendluri, CEO, KPCL
Coal handling, he said, is likely to be the mainstay of Krishnapatnam port in coming years, but the port would also focus adequately for growing cargo of agri-
logistics
Krishnapatnam Port Container Terminal dedicated to the nation Krishnapatnam Port Container Terminal (KPCT), the largest and deepest draft container terminal on the east coast of India, of Krishnapatnam Ports Company Ltd (KPCL) was dedicated to the nation by Andhra Pradesh chief minister Nallari Kiran Kumar Reddy on April 2. Built at an initial investment of around `1,500 crore, the all-weather terminal offers state-of-the-art facilities for handling an increasing volume of inbound and outbound cargo in the region. Speaking on the occasion, Anil Yendluri, CEO, Krishnapatnam Port said, “Our container terminal is the one of the most technically advanced terminals in the world offering tremendous benefits not just to the liners companies but also to the import and export trade community”. “Krishnapatnam Port will help accelerate the growth of this region as an industrial hub and also aims to bring a paradigm shift in the Indian Shipping and Container Terminal operations” Yendluri said. KPCL/KPCT spans an area of 6,500 acres providing ample space for import and export cargo and containers as well as transhipment operations. The container terminal is equipped with 5 state-of–the–art super post panamax quay cranes which deliver by far the highest productivity levels in India. The excellent connections offered by the container liners from KPCT to all parts of the world are tremendously benefitting the importers and exporters in the immediate hinterlands of Guntur, Ongole, Vijayawada, Gudur, Kodur, Nellore etc., said Yendluri. He informed that exim traders of Hyderabad and Bangalore have also commenced moving their cargo through Krishnapatnam to avail of the advantages of lower transportation cost, lower handling cost, efficient and congestion free operations at KPCT. KPCT started its container services in September-October 2012 and has handled around 20,000 TEUs in 2012-13. The volume however would see a substantial growth in 2013-14 as a number of liners have already agreed to move containers from this port, Yendluri said.
commodities, fertilizer, edible oil, granite and Bariles (barium sulphate). Although conceived largely to handle iron ore export cargo, Krishnapatnam port had not handled a single ton of export cargo of iron ore during the past about 18 months. Instead, the port had handled 140,000 tons of imported iron ore in 2012-13. Asked whether he expects resumption of export cargo of iron ore in coming months, Year
Cargo Handled (in mt)
in 2012-13,” Yendluri said. In 2011-12, the port had handled 15.40 mt of cargo. Although the balance sheet of the port is not yet ready, the CEO expects that the revenue of the port in 2012-13 would be around `930-940 crore compared with `630 crore in 2011-12. “Our profitability should also rise significantly because margins are high in bulk cargo,” he added. The CEO said the port’s customer centric approach had helped it register nearly 40 percent growth in 2012-13 and their intention will be to remain as proactive and professional as possible so that the users get value for their money in coming years as well. Asked about expansion plans, he said the second phase of expansion that entails investment of about `5,900 crore is likely to be completed within a year with the commissioning of 11th berth. “Thereafter, the third phase of expansion will begin and once that is complete, the port will have a total of 42 berths with
the CEO refused to comment saying it will all depend on government policies. “Despite not handling iron ore, we are growing and this was possible because of our customer centric approach,” Yendluri said. Total cargo to cross 30 mt
“Our total cargo handling in 2013-14 is likely to cross 30 mt registering a growth of more than 42 percent over 21.12 mt handled
Coal Cargo (in mt)
Other Cargo# (in mt)
Revenue (in `Cr) 930-940*
2012-13
20.12
16.00 mt
4.12
2011-12
15.40
11.00 mt
4.40
630
2013-14*
30.00 mt
22-23 mt
7.0-8.0
1300
*Expected # Fertilizer, Edible Oil, Granite, Agri-Commodity, Bariles
Vinita Venkatesh, Advisor, KPCL
Coal Insights, April 2013
63
logistics total handling capacity of 200 million tons, including containers, which will make it the biggest port in the country,” he said. The port has so far invested about `1,400 crore in the first phase, around `5,000 crore in second phase and plans to invest around another `10,600 crore in the next 10 years, including expanding container terminal facilities which was dedicated to the nation on April 2. “Right now we have 10 berths, including two berths for container handling. We will be building at least one berth each and plan to come up with total 42 berths during the next 10 years subject to market conditions,” Yendluri said, adding, “growth of the port will be in synch with the growth of the country.” Once the expansion projects are completed, the port will have 42 berths and the capacity to handle 200 million tons per annum, thus becoming the biggest port in India. To a querry, he said the current container handling capacity is 1.2 million TEUs, which would be increased to 6 million TEUs. “We want to make the best container terminal in the east coast of India. JNPT is
64 Coal Insights, April 2013
“We want to make the best container terminal in the east coast of India. JNPT is there on the west coast of India as historically India’s exports were largely headed to Europe and Middle East countries, but with Asian and South East Asian countries growing rapidly, inter-Asian and intra-Asian trade are galloping. So the role of east coast ports will be important in coming years,” there on the west coast of India as historically India’s exports were largely headed to Europe and Middle East countries, but with Asian and South East Asian countries growing rapidly, inter-Asian and intra-Asian trade are galloping. So the role of east coast ports will be important in coming years,” he said. “The container terminal at the port adds to its numerous strengths like – maximum efficiency, minimum dwell time and maximum safety, thus making it one of the first and most modern ports in the world,” Yendluri said. “We can load and unload a container
vessel within a few hours. We have right now five cranes each of which can make 45 moves per hour,” he said. The Port’s advisor, Vinita Venkatesh, said the port’s container terminal is strategically placed to act not only as trans-shipment, next to Singapore and Colombo ports, but also provide cargo to calling vessels. “The containers from Haldia, Chittagong etc, which were currently trans-shipped to Colombo or Singapore can now come to Krishnapatnam port for trans-shipment to other places because of good network of liners,” Venkatesh said. “Maersk is providing direct service to China. Mediterranean Shipping Company have started calling their own vessels at Krishnapatnam and in addition, the largest container feeder companies in the Bay of Bengal area – Bengal Tiger Line, FAR Shipping and Express Feedeers are also offering services from here,” she said. She claimed that Krishnapatnam port not only provides draft of 18.5 metre for bulk cargo vessels at its 8 existing berths, but 13.5 metre draft for container vessels at its two berths. “We also provide the ease of operations at the port whereby both the marine services to the vessels as well as stevedoring and other port services are handled by a single operator,” Venkatesh added. Asked about the saving to users of their container terminal, the port’s advisor said, in comparison with Chennai port, the saving in handling one 20 TEU container at the port would be around $230 per box. “This is a good saving, which does not include cost efficiency in delays,” she added. Krishnapatnam port is also working on setting up LNG and POL terminals besides a car terminal, which is in early stages.
Annexure Growth of installed capacity since 6th Plan
(in MW)
Thermal
Plan / Year
Coal
Gas
Diesel
Nuclear
Total
Hydro (Renewable)
RES (MNRE)
Total
End of 6th Plans (31.03.85)
26310.83
541.50
177.37
27029.70
1095.00
14460.02
0.00
42584.72
End of 7th Plan (31.03.90)
41237.48
2343.00
165.09
43745.57
1565.00
18307.63
18.14
63636.34
End of 2nd Plans (31.03.92)
44791.48
3095.00
167.52
48054.00
1785.00
19194.31
31.88
69065.19
End of 8th Plan (31.03.97)
54154.48
6561.90
293.90
61010.28
2225.00
21658.08
902.01
85795.37
End of 9th Plan (31.03.02)
62130.88
11163.10
1134.83
74428.81
2720.00
26268.76
1628.39
105045.96
March, 2003
63950.88
11633.20
1178.07
76762.15
2720.00
26766.83
1628.39
107877.37
March, 2004
64955.88
11839.82
1172.83
77968.53
2720.00
29506.84
2488.13
112683.50
March, 2005
67790.88
11909.82
1201.75
80902.45
2770.00
30942.24
3811.01
118425.70
March, 2006
68518.88
12689.91
1201.75
82410.54
3360.00
32325.77
6190.86
124287.17
End of 10th Plan (31.03.07)
71121.38
13691.71
1201.75
86014.84
3900.00
34653.77
7760.60
132329.21
March, 2008
76048.88
14656.21
1201.75
91906.84
4120.00
35908.76
11125.41
143061.01
End of 11th Plan (31.03.12)
112022.38
18381.05
1199.75
131603.18
4780.00
38990.40
24503.45
199877.03
End of Mar '13
130220.89
20109.85
1199.75
151530.49
4780.00
39491.40
27541.71
223343.60
Captive Generation Capacity in Industries having demand of 1 MW and above, grid interactive (as on 31-03-11) = 34444.12 MW Note: Installed Capacity of RES is 27541.71 as on 31-03-2013 based on MNRE E-mail dated 14-04-2013
List of TPP having critical stock less than 7 days (as on 31-03-13 ) Sl No.
Name of TPP
Days
Reason
1
Badarpur
5
Due to less reciept of coal from CCL i.e. 92% of ACQ during Apr 12- Mar 13
2
Mahatma Gandhi
2
Inadequate coal availability of domestic coal
3
Anpara 'C'
3
Due to financial constraint.
4
Dadri
0
Due to higher generation i.e. 108% of Prog during April12 -Mar13
5
Sabarmati C
4
Due to less reciept of coal during Apr 12- Mar 13 i.e. 94% of ACQ
6
Korba STPS
4
Due to higher generation i.e. 114% of PLF during Apr12 -Mar13
7
Sipat
1
Coal supply for Sipat Unit 2&3 yet to commence by SECL
8
Khaperkheda
2
Due to less reciept of coal from MCL during Apr 12- Mar 13 i.e. 64% of ACQ
9
Bhusawal
6
Due to less reciept of coal during Apr12-Mar13 i.e. 46% of ACQ
10
Parli TPS
5
Due to raw water constraint coal supply was regulated by power station
11
Wardha Warora
4
Due to inadequate import
12
Simhadri
2
Due to less reciept of coal during Apr12-Mar13 i.e. 87% of ACQ/MOU
13
Rayalseema
6
Due to higher generation i.e. 84% of Prog during Apr12 -Mar13
14
North Chennai
5
Due to less reciept of coal from CIL during Apr12- Mar13 i.e. 92% of ACQ
15
Vallur TPP
4
Due to less reciept of coal during Apr12- Mar13 i.e. 73% of ACQ/MOU
16
Kahalgaon
2
Due to inadequate coal availability in linked mine of ECL(Rajmahal)
17
Durgapur Steel
0
Coal supply for unit 2 yet to commence by CIL
18
Talchar STPS
1
Due to less import
19
Sterlite
4
Due to less reciept from MCL
20
Santaldih
4
Due to less import of coal during March 2013
21
Farakka
1
Due to inadequuate coal availability in linked mine of ECL (Rajmahal)
Note: i) Muzaffarpur TPS is under long outrage for R&M activitoes; ii) Kodarma TPS Generation yet to start / coal supply still awaited LOA Letter of Award ACQ Annual Contracted Quantity
Coal Insights, April 2013
65
E-AUCTION Monthly data of offered quantity through coaljunction and mstc (road & rail)* MONTH
OFFERED BY ROAD 2,991,320 2,824,250 2,922,850 2,466,770 2,564,788 1,724,469 2,236,945 2,091,330 2,262,732 512,850 3,083,582 2,706,157 4,518,196 3,698,200 5,874,230 5,014,680 4,927,850 3,818,650 3,444,100 3,541,130 3,226,580 3,313,820 5,329,723 5,787,610 5,895,470 1,932,480
Jan'11 Feb'11 Mar'11 Apr'11 May'11 June'11 July'11 Aug'11 Sept'11 Oct'11 Nov'11 Dec'11 Jan'12 Feb'12 Mar'12 Apr'12 May'12 June'12 July'12 Aug'12 Sept'12 Oct'12 Nov'12 Dec'12 Jan'13 Feb'13
Qty. In Tons
OFFERED BY RAIL 328,366 738,520 326,950 367,390 273,884 135,535 275,070 92,040 315,350 79,060 225,852 220,400 252,812 431,150 1,675,226 867,492 327,030 239,548 195,467 164,433 225,268 236,830 241,440 278,784 816,988 568,524
Monthwise quantity offered & sold through coaljunction & mstc E-Auction* MONTH Jan'11 Feb'11 Mar'11 Apr'11 May'11 June'11 July'11 Aug'11 Sept'11 Oct'11 Nov'11 Dec'11 Jan'12 Feb'12 Mar'12 Apr'12 May'12 June'12 July'12 Aug'12 Sep'12 Oct'12 Nov'12 Dec'12 Jan'13 Feb'13
Monthly Data of Offered Quantity through coaljunction & mstc (Road & Rail)*
8,000,000
6,000,000
SOLD QTY (in tons) 2,608,551 2,805,310 2,481,981 2,179,060 2,328,720 1,303,176 2,255,313 1,764,911 2,203,438 385,904 2,891,019 2,632,049 3,758,496 3,576,946 6,584,608 5,183,850 4,456,357 3,605,700 2,979,323 2,924,489 3,091,583 3,177,658 4,871,200 4,069,700 5,243,866 1,843,142
Qty. In Tons
Variation (In Percent) -21.42% -21.26% -23.63% -23.11% -17.96% -29.94% -10.22% -19.17% -14.53% -34.80% -12.64% -10.06% -21.22% -13.38% -13.00% -11.87% -15.20% -11.15% -18.14% -21.08% -10.44% -10.50% -12.56% -32.91% -21.88% -26.30%
Quantity offered & sold through coaljunction & mstc*
7,000,000 6,000,000
Quantity in Tons
5,000,000
Qty Offered In Tons
OFFERED QTY (in tons) 3,319,686 3,562,770 3,249,800 2,834,160 2,838,672 1,860,004 2,512,015 2,183,370 2,578,082 591,910 3,309,434 2,926,557 4,771,008 4,129,350 7,568,706 5,882,172 5,254,880 4,058,198 3,639,567 3,705,563 3,451,848 3,550,650 5,571,163 6,066,394 6,712,458 2,501,004
4,000,000
3,000,000
2,000,000
5,000,000 4,000,000 3,000,000 2,000,000 1,000,000
1,000,000
131,000
131,000
281,000
281,000
-53.38%
-53.38%
NCL RAIL
116,820
116,820
-
-
NA
NA
-
-
20,000
20,000
NA
NA
NEC RAIL
-
-
41,250
41,250
NA
NA
145,500
99,600
1,357,700
1,005,050
-89.28%
-90.09%
-
-
NA
NA
ECL ROAD
167,380
162,627
76,500
76,353
118.80%
112.99%
ECL RAIL
451,704
315,414
533,478
420,552
-15.33%
-25.00%
WCL ROAD
284,400
215,720
989,020
529,830
-71.24%
-59.29%
-
-
-
-
NA
NA 96.74%
SECL ROAD SECL RAIL
WCL RAIL SCCL ROAD
617,000
373,111
328,000
189,651
88.11%
SCCL RAIL
-
-
49,200
32,800
NA
NA
CCL ROAD
464,050
332,850
1,191,600
1,019,420
-61.06%
-67.35%
-
-
114,000
72,200
NA
NA
2,501,004
1,843,142
6,712,458
5,243,866
-62.74%
-64.85%
CCL RAIL TOTAL
Feb'13
Jan'13
750,000
500,000
250,000
0
Companies Feb'13 QTY OFFERED
Feb'13 QTY SOLD
Jan'13 QTY OFFERED
Note: Data for the period January 2011 - December 2011, February 2012 and February 2013 is for e-auction through coaljuntion only, while data for January 2012, and March 2012 - January 2013 includes data of MSTC * February’13 figure are only of coaljunction. MSTC figure to be provided next month.
66 Coal Insights, April 2013
Dec'12
Nov'12
Oct'12
Aug'12
Sep'12
July'12
May'12
1,000,000
Jan'13 QTY SOLD
CCL RAIL
NA
NCL ROAD
CCL ROAD
NA
NA
SCCL RAIL
NA
-
SCCL ROAD
1,231,600
-
WCL RAIL
1,320,000
-
ECL RAIL
-
-
WCL ROAD
-
MCL RAIL
ECL ROAD
MCL ROAD
1,250,000
SECL RAIL
NA
NEC RAIL
-60.83%
NA
SECL ROAD
-62.87%
79,060
NEC ROAD
245,100
79,060
NCL RAIL
331,650
-
NCL ROAD
96,000
-
MCL RAIL
123,150
BCCL RAIL
NEC ROAD
1,500,000
SOLD QTY
MCL ROAD
QTY SOLD
BCCL RAIL
QTY SOLD
Variation (In Percent) OFFERED QTY
BCCL ROAD
BCCL ROAD
Jan'13 QTY OFFERED
SOLD QTY (in tons)
Companywise Quantity Offered & Sold through coaljunction & mstc in February’13 Vs January’13*
Quantity In Tons
Feb'13
June'12
OFFERED QTY (in tons)
OFFERED BY RAIL
Companywise Quantity Offered & Sold through coaljunction & mstc in February’13 Vs January’13 Qty. In Tons Via Rail & Road* QTY OFFERED
Apr'12
Feb'13
Jan'13
Dec'12
Nov'12
Oct'12
Aug'12
Sept'12
July'12
June'12
Apr'12
May'12
Mar'12
Feb'12
OFFERED BY ROAD
Mar'12
Feb'12
0 0
port data Major ports through which Coking Coal arrived in India December ’12 - February ’13 Port
Qty (in Tons)
Port
Qty (in Tons)
MORMUGAO
1,427,948
MUNDRA
327,767
VIZAG
1,321,537
KANDLA
67,000
GANGAVARAM
1,191,894
NEW MANGALORE
62,412
PARADIP
1,102,363
CHENNAI
KOLKATA
1,001,475
Grand Total
121 6,502,517
Major ports through which Coking Coal arrived in India – December ’12 - February ’13
15.4%
5.0% 1.0%
Major Coking Coal supplier countries to India (through mentioned ports) December ’12 - February ’13 Country of Origin
Qty (in Tons)
AUSTRALIA
4,838,621
UNITED STATES
849,745
SOUTH AFRICA
405,898
NEW ZEALAND
207,707
OTHERS
200,545
Grand Total
6,502,517
Major Coking Coal supplier countries to India (through mentioned ports) – December ’12 February ’13
1.0% 0.0%
3%
6%
22.0%
3%
13% 17.0% 20.3%
18.3% MORMUGAO PARADIP KANDLA
VIZAG KOLKATA NEW MANGALORE
75%
GANGAVARAM MUNDRA CHENNAI
AUSTRALIA NEW ZEALAND
Major ports through which Steam Coal arrived in India December’12 - February’13 Port MUNDRA NEW MANGALORE GANGAVARAM PARADIP VIZAG KANDLA
Qty (in Tons) 5,122,510 1,679,639 1,491,247 1,363,653 1,194,762 1,075,484
Port MUMBAI
Qty (in Tons) 905,082
KOLKATA
481,800
UNITED STATES
4,000 14,073,768
5.4%
3.4%
Qty (in Tons)
INDONESIA SOUTH AFRICA
Major ports through which Steam Coal arrived in India December’12 - February’13 6.4%
Country of Origin
755,590
Grand Total
SOUTH AFRICA
Major Steam Coal supplier countries to India (through mentioned ports) December’12 - February’13
ENNORE COCHIN
UNITED STATES OTHERS
11,930,340 1,679,998 278,328
OTHERS
185,102
Grand Total
14,073,768
Major Steam Coal supplier countries to India (through mentioned ports) December’12 February’13
0.0%
1.3% 2.0%
36.4%
11.9%
7.6%
8.5% 9.7%
10.6%
11.9%
MUNDRA
NEW MANGALORE
GANGAVARAM
PARADIP
VIZAG
KANDLA
MUMBAI
ENNORE
KOLKATA
COCHIN
84.8% INDONESIA UNITED STATES
SOUTH AFRICA OTHERS
Note: Figures are based on consignment lifted from these ports for which price details/break-up is available with Coal Insights team
68 Coal Insights, April 2013
Tear along the dotted line
70 Coal Insights, April 2013 Tear along the dotted line