Coal Insights December edition

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

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EDITORIAL Dear Readers, As I write this piece, I wonder what the years ahead have in store for us.

This is not to make light of the Mayan doomsday prediction; nor to pooh-pooh astronomers’ warning about any violent storm in the sun. I talk about the business as usual scenario, and wonder how the world may find life hard-hitting and despondent as we come to terms with the realisation that we are not being able to manage affairs in our little habitat.

In more concrete terms, the world economy is feared to enter another trough of recession (as if it is not going through one already). The patch work on the US economy has not helped much, the world knows it by now. The EU is becoming accustomed to parsimony, both at governmental and household levels. The rest of the world seems not to have much to offer; so the onus of keeping the market afloat now falls on China and India. Even these growth engines seem to slow down.

Only recently, a United Nations study has expressed fresh concern about the global economic scenario for the next couple of years, especially about demand slackness and job losses. It has also forecast that the developed world, even if it escapes any fresh tumult, would take at least five years to mend the damage inflicted to the economies.

What can India do to survive the overall adverse sentiment? The country’s economic growth is projected to slide to 5.5 percent this year, the lowest in a decade. Although the planners avow a pick-up next fiscal, the market is keeping its fingers crossed. But the UN report has a provided a vital cue. The problem with India is not exactly the same as that of the world. There is no dearth of demand, effective or latent.

What brings India down is its “structural challenges”.

Which sector knows it better than the coal industry? There is neither any dearth of reserves, nor any shortage of demand. Only taking the coal out of the mine and delivering it to the end-user is what has gone amiss. The present scenario doesn’t look prospective of any radical improvement in the short term. However, there could be even bigger challenges on the way, if we neglect the more fundamental activities like exploration of new coalfields. And this is not only true for coal, but for all other minerals, metallic and non-metallic. This issue of Coal Insights delves into this most basic and yet most neglected area of mining in India.

Meanwhile, the “structural challenges” are making the coal consumers an impatient lot. So much so that some private sector bigwigs have started clamouring for allowing merchant mining, expecting this would sort out the supply issues almost overnight. But any chaos calls for a matured handling. And this is not the time to be drastic in our action, not in the face of so many adversities, internal and external.

Instead, let’s be more responsible in our work and in our demands too.

Happy reading!

(Rakesh Dubey) Coal Insights, December 2012

3

Contents 22 Imported steam coal prices show mixed trends in Dec 24 Spot coking coal prices ease in December 26 CIL aims to achieve 10% production growth, achieve target for first time 34 CIL expects to appoint MDO for at least 7-8 projects by April 2013 38 India’s coal import picks up in October 40 Central utilities line up 21 mega projects with 23,330 MW generation capacity 41 India’s power utilities received 35.8 mt of coal in November 43 Captive power sector gets a raw deal from govt, miners: ICPPA 48 Outotec offers paste technology to dispose of tailings 49 Vibrocone™ crusher: The next generation crushing technology 51 Afghanistan to sign pact with SAIL consortium in January 54 World thermal coal trade to rise 4% in 2013 55 US coal production to be 1,027 MMst in 2012: EIA 56 China removes 40% export tax on met coke 57 Traffic handling by major ports down 2.8% in April-November 58 Shipping Ministry takes corrective steps after missing XI Plan target 59 Railways coal handling down in November 66 E-auction 68 Port data

6 | Cover Story

Coal & mineral exploration in India: Anybody’s business…?

The government makes a desperate call for private investment; but is anyone listening?

30 | FEATURE

Industry clamours for merchant mining, MoC offers outsourcing jobs India Inc. cites benefits of technology absorption; MoC asks to do it through contract mining.

45 | TECHNOLOGY

Selective drop breakage studies on individual coal and stone samples

50 | In Focus

Results of the selective drop breakage tests by CIMFR showed there is a good potential of installing a rotary breaker at the pithead.

World pet coke production may grow 35% by 2016 China and India will lead production growth while Middle East would double its market share, going forward.

52 | INTERNATIONAL

Coal to close in on oil as world’s top energy source by 2017: IEA Global coal consumption by 2017 would rise to 4.32 billion tons of oil equivalent (btoe), versus around 4.40 btoe for oil.

Call 9163348243 for more details

4 Coal Insights, December 2012

Cover Story

Coal & mineral exploration in India

Anybody’s business…?

Arindam Bandyopadhyay

6 Coal Insights, December 2012

Cover Story

I

t takes a piece of coal a few minutes to get consumed. Producing the same coal from a mine, in India, takes around 3-4 years. And finding that mine takes no less than 15 years. If that sounds ballistic, consider minerals of lesser use. For many metallic and non-metallic minerals, detailed exploration in the country takes decades together.

That explains why the contribution of mining sector to India’s GDP has remained a lowly 2-2.5 percent over the last decade. This, against the 8 percent share in other major coal producing countries such as Australia and South Africa, says a lot about the dismal performance of mineral exploration and, at the same time, the immense opportunity and potential threat that looms.

Even more startling could be the fact that out of India’s total mineral potential area of 575,000 sq. km., only 75,000 sq. km. has been explored in detail (as of March 2011)*. This percentage, again, is much less compared with the developed countries; so is India’s total spend on mineral exploration, estimated at less than 0.5 percent of global exploration budget in 2010.

Needless to say, the addition to potential reserves of minerals in the country has been pretty little compared to countries that succeeded in leveraging their mining industries.

For instance, in iron ore, a relatively abundant mineral in India, the proven reserves increased by only 3 billion tons over the period 1980-2008, while in Australia the reserves increased by 35 bn tons over the same period.

A brief history of coal exploration ♦♦ The earliest evidence of mineral exploration in Indian subcontinent dates back to the Harappan civilization. ♦♦ The first recorded history of mining in India dates back to 1774 when an British company was granted permission by the East India Company for mining coal in Raniganj. ♦♦On the recommendation of Coal Committee for systematic survey of coal fields, search for coal was initiated in the country in 1845.

railways.

♦♦The Geological Survey of India (GSI), the second oldest survey in the country, was established in 1851 with the singular aim to locate coal for the

♦♦ Exploration for coal aided by drilling started since 1869. ♦♦ Geophysical techniques were introduced in coal exploration during the late 1940s.

Similar was the case with gold, diamond and bauxite. To make things worse, more than 200 operating mines in India became closed in the last few years.

When it comes to consumption and demand growth, the scenario is grossly different. In almost all minerals, India’s consumption has increased multifold in recent years.

In coal sector, consumption growth during the Eleventh Five Year Plan (200212) has been double the growth Mining sector’s share in GDP, 2009 (%) in production and addition to the Brazil proven reserves.

As the country South Africa starts feeling the pinch of truncated Australia growth in coal and mineral production, China the low level of detailed exploration India is coming up as a potential threat to its 0 2 4 6 8 10 future growth.

Source: Global Insights

* Exploring India: Mining the opportunities – Ernst & Young

8 Coal Insights, December 2012

Upbeat global trend

Globally, coal and mineral exploration is seen as a high-risk, high-reward venture.

Exploration investment typically moves in a cycle depicting a clear correlation with metal prices in the international market. In recent years, the steep rise in metal prices since 2002 till 2008 led to substantial budget increases by the major exploration companies.

However, the widespread economic downturn since September 2008 pushed most metal prices down. Subsequently, the majority of companies slashed their exploration budgets in 2009, resulting in a 42 percent decline in exploration spending year-on-year, as estimated by Metals Economic Group (MEG). Post 2009, there was a recovery in metal prices as well as in the exploration budget of the industry. As of 2011, exploration spending by around 3,500 mining and exploration companies worldwide was a record $18.2 billion for non-ferrous metals. The same for iron ore exploration was estimated at $2.5 billion.

One significant finding in the analysis of the budget spend by these companies is that

Cover Story Mining sector’s contribution to India’s GDP (%)

the smaller firms, major part of exploration in coal sector. While due to the poor GSI is under the mines ministry, CMPDIL 2.26 stock market is a subsidiary of Coal India Ltd (CIL), the 2.2 performance, may world’s largest coal miner. Other than these, find it difficult to Singareni Collieries Company Ltd (SCCL) 2.11 2.1 2.09 raise capital for and Mineral Exploration Corporation Ltd maintaining their (MECL) are also engaged in coal block 2 1.98 expenditure. This exploration.

1.92 1.91 would imply a All these public sector entities have 1.9 decline in smaller limited budget and capacity which restrict 1.8 firms’ share in their exploration activity. GSI, the principal overall exploration exploration agency, is stretched thin due to 1.7 investment.

In its scarce resources. As a result, barring coal FY06 FY07 FY08 FY09 FY10 FY11* other words, the and iron ore, other minerals have remained * In FY11, the base year was changed from 1999–2000 to 2004–05 market could see largely underexplored.

Source: Ministry of Mines annual report FY11 the formation of Overall, the mining sector is dominated by the public sector which accounted for 74.5 the average increase in drilling lags behind new joint ventures and consolidation.

The major drivers of the market would percent of the total mineral production in the aggregate budget increase. This could be due to rising drilling costs, an increased be the continued growth in coal and mineral India in FY11. The total number of operating from focus on other exploration techniques or demand Global non-ferrous exploration budget ($ bn) other factors. The increasing cost of drilling China, India and emerging 20 has been a common occurrence in almost all other c o un tr i es.

18 major mineral producing countries. the 16 A break-up of expenditure by country However, 14 shows that the top 5 countries had a share of e c o n o m i c 12 50 percent in 2010. The leading two countries slowdown in the 10 in terms of exploration spending were Canada US and Eurozone, aggravated 8 and Australia, while the US, Mexico, China if would 6 and Russia featured among the other major further, 4 spenders. Latin American countries such as cast a shadow on Peru, Brazil and Argentina figured in the top global exploration 2 10 list. In fact, in 2011, Latin America was investment.

0 2.3

the most popular exploration destination, attracting 25 percent of global spending on exploration.

Going forward, the global exploration market is expected to see a shake-out, according to analysts’ reports. The major mining and exploration firms with deep pockets are likely to increase spending while

2008

Indian scenario

As mentioned, India’s share of exploration budget is less than 0.5 percent. Exploration in India is mainly carried out by government agencies. GSI and Central Mine Planning & Design Institute Ltd (CMPDIL) do the

The mineral exploration activity being high risk venture need special treatment. SEBI and Stock Exchanges need to come out with a policy framework so that investment in mining/mineral exploration is increased.

10 Coal Insights, December 2012

2009

2010

2011

Source: Metals Economic Group

mines was reported as 2,628, of which 574 mines are involved in coal and lignite while the numbers of metallic and non-metallic mines are 608 and 1,446, respectively.

Among the various mineral producing states in India, Andhra Pradesh and Gujarat account for the highest number of mines in the country with 377 and 372 mines, respectively.

Mineral production in the country is primarily concentrated in 6 states, namely Andhra Pradesh, Chhattisgarh, Jharkhand, Rajasthan, Gujarat and Odisha.

In fact, these states together contributed around 50 percent of the national mineral production in FY11.

Other than the low budget expenditure for exploration, another discerning feature for India is the low per capita income of the

Cover Story Global exploration budget by sector, 2010 (%) 2

11

3

Gold Base metals 51

33

Diamond PGM Others

Source: Metals Economics Group, E&Y

mineral rich states. Of the 50 major mining districts, 60 percent figure among the 150 most backward districts of the country. This overlapping of poverty and mineral resources has resulted in increased resistance from local populace in many prospective zones.

On the whole, despite the best efforts by the state agencies, a vast land area of India still remains unexplored.

This is more so for the metallic and nonmetallic minerals, while exploration status for coal and other fuel minerals are significantly better. However, even in coal, there is much to be desired.

“The limited achievement in exploration is reflected in the fact that the proven reserves of coal at 118 bn tons is far less than the total estimated reserves of 293 bn tons. More detailed exploration is required to significantly reduce this gap,” an industry source said.

Faulty process?

Yet another concern about India’s exploration activity was raised by the Comptroller and Auditor General (CAG) in its recent annual performance audit report that resulted in a huge controversy.

While putting to question the Indian government’s policy to dole out coal blocks to private companies, CAG also raised doubts over the country’s coal reserve estimates. The statutory body questioned the “authenticity” of estimates made by GSI and/or CMPDIL. As of April 2012, India has a proven reserve of 118 billion tons and ranks fourth in the world after the US, Russia

Referring to estimates quoted by CIL, the report said, “CIL gave its estimates as also those of a third party, i.e. SRK Consultants of UK in its Red Herring Prospectus issued (August 2010) to SEBI for its Initial Public Offering. While CIL’s resource estimates were based on ISP code, those of the Consultant were based on the Australian Code for Reporting of Exploration Results, Mineral Resource and Ore Reserves (JORC Code). Although the Consultant did not independently verify the technical information provided by CIL, the differences in estimates were significant.”

As per CIL, out of a total resource of 64.22 billion tons in its command area, 51.33 billion tons was categorised as ‘proved’, 9.92

and China.

CAG’s reservations are centred on the method Share in global exploration budget, 2010 (%) of estimation and focused mainly on the reserves Canada brought under CIL. CAG 19 noted that India computes Australia its coal inventory on the US basis of the Indian Standard 50 12 Procedure (ISP) code of Mexico 1956, which is “purely Peru a geological resource 8 classification system Others without assessment of 6 5 mineability”. ISP addresses only the volume and Source: Metals Economic Group, E&Y tonnage, i.e. the resource of coal but not the accuracy of structural billion tons as ‘indicated’ and 2.97 billion delineation, which would ensure that the tons as ‘inferred’ reserves. The extractable reserves are actually economically and coal was, however, assessed by CIL at 22.34 technically amenable to extraction, it alleged. billion tons as of April 2010. As per the “Mining of coal with the present state Consultant, extractable coal as per JORC of technology either currently or in the near Code was only 18.86 billion tons (10.60 future is not likely to go beyond 300 metres billion tons as proved and 8.26 billion tons as depth. However, as per ISP, coal up to 1,200 probable), the report mentioned.

Meanwhile, the government took a metres has been considered in the reserve decision in May 2011 to do away with ISP estimation.”

GDP per capita in mineral producing states, 2009 (in $)

1,500 1,000 500 0

100,000

43,000

50,000

42,500 42,000

0 Australia

Source: Mospi, Australian Bureau of Statistics, Bureau of Economic Analysis, US

12 Coal Insights, December 2012

Western Australia

41,500 US

Texas

Cover Story and implement the internationally accepted system of United Nations Framework Classification (UNFC) for minerals.

UNFC lays down a standard procedure for calculating the size of reserves and resources based on a three-dimension system with technical feasibility, economic viability and geological estimates.

However, no action was taken till the PMO directed (April 2007) the ministry of coal (MoC) to examine the issue of current ISP procedure vis-à-vis UNFC. CMPDIL undertook (April 2007) a project Geological resources of coal in India (in bn tons)

As on

Proved

Indicated

Inferred

Total

2006

95.8

119.8

37.7

253.3

2007

99.0

120.2

38.1

257.4

2008

101.8

124.2

38.5

264.5

2009

105.8

123.5

37.9

267.2

2010

109.8

130.7

36.4

276.8

2011

114.0

137.5

34.3

285.9

2012

118.0

142.0

33.0

293.0

Source: GSI

for converting the existing system of coal resource classification to UNFC, which was to be completed by March 2012. The project is yet to take off (February 2012), the report pointed out.

The Audit suggested that the impact of the changeover from ISP to UNFC code on the national mineral inventory is expected to be significantly realistic and CMPDIL should urgently carry out this exercise so as to ensure more reliability in the extractable coal estimates in the country.

Commenting on the findings, industry sources said the GSI estimates of reserves are generally authentic and should not contain beyond 5 percent error level.

A prospecting licence application has to pass through a minimum of 126 tables (officials).

This is one reason why India is ranked low for investment in mining and exploration.

In December 2005, the T L Sankar Committee appointed by the government suggested that the ministry of coal (MoC) should launch a programme of detailed exploration and drilling in the Eleventh Plan (2007-12), aimed at increasing ‘proved’ category reserves. It was also proposed that measures be taken to increase the drilling capacity of CMPDIL from 300,000 metres per annum to at least 1,500,000 metres per annum by involving all eminent agencies within the country and outside.

Subsequently, an outlay of Rs 383.50 crore was proposed in the Eleventh Plan under the Central Sector Plan Schemes for promotional exploration for drilling of 750,000 metres comprising 400,000 metres for coal in CIL blocks to establish about 20 billion tons of coal and 350,000 metres in lignite to establish 4.06 billion tons of lignite resources.

Factors limiting mining growth ♦♦ Insufficient exploration ♦♦ Unattractive investment environment ♦♦ Lack of a clear system for disposal of government prospected mineral ore bodies

Inadequate drilling

Besides the debate over the methods employed, inadequate drilling in India has become a cause of concern, both for the government and industry and also for performance appraisers like CAG. There is little doubt that rapid increase of coal production requires accelerated exploration, which in turn requires augmentation of drilling capacity and capacity to assess coal reserves and prepare geological reports.

14 Coal Insights, December 2012

Similarly, in case of non-CIL blocks scheme, about 1,000,000 metres of drilling was proposed to be undertaken in 32 (nonCIL) blocks during the Plan period (200712) to bring 10.75 billion tons of resources under ‘proved’ category.

The total fund requirement for detailed exploration was estimated at Rs 893.89 crore.

Against the above requirement, an outlay of Rs 523.08 crore (revised) was approved by MoC in the Eleventh Plan and a sum of Rs 324.22 crore was released till January 2012 for drilling in non-CIL blocks.

As it appeared from the performance review, there was gross discrepancy between the targets set for drilling (by CMPDIL’s own resources and through outsourcing) at the end of the Plan period. Less progress in drilling, according to the ministry, was due to nonclearance of forest land. It was further stated

♦♦ Poor performance of State Directorates of Mining and Geology ♦♦ Perception of mining in terms of ecological & environment practices ♦♦ Delays and uncertainty in the approval process ♦♦ Inadequate supporting infrastructure and insufficient legislative framework (Act and Rules) and poor enforcement ♦♦ Social issues Source: Strategic Plan for the Ministry of Mines

Cover Story government from the start of production (instead of the current practice whereby they first recover costs).

“Apart from tax incentives, there should be some freedom in daily operations for those who would park their funds. This if allowed may also attract much needed venture capital into the sector,” said a member of CII. Yet another area of concern for potential investors could be the delay in getting approvals.

“A prospecting licence application has to pass through a minimum of 126 tables (officials). This is one reason why India is ranked low for investment in mining and exploration,” a top official of an ASX listed mineral exploration company said.

The record of statutory clearances for mining lease applications has been “very unimpressive” over the last two decades, he pointed out. A major problem is, of course, getting forest clearance. The number of boreholes allowed in forest areas is far less than standard requirement. There are other policy restrictions too that invoke regular interference even after sanction of a mining lease.

All in all, getting necessary approvals and completing the mapping and detailed exploration process in India takes no less than 15 years, he added.

Besides, the lack of any special instrument to help these companies raise risk-capital from the local market is yet another impediment, industry sources felt.

Classification of Reserves/Resources of Various Minerals as per United Nations Framework Classification (UNFC) System

• M easured Mineral Resource That part of mineral resource for which tonnage, density, shape, physical characteristics, grade and mineral content can be estimated with a high level of confidence, i.e., based on detailed exploration.

• Indicated Mineral Resource Tonnage, density, shape, physical characteristics grade and mineral content can be estimated with reasonable level of confidence based on exploration, sampling and testing information, location of borehole, pits etc.

• Inferred Mineral Resource Tonnage, grade and mineral content can be estimated with low level of confidence inferred from geological evidence.

• Reconnaissance Mineral Resource Estimates based on regional geological studies and mapping, airborne and indirect methods, preliminary field inspections as well as geological inference and extrapolation.

• Prefeasibility Mineral Resource That part of an indicated and in some circumstances measured mineral resource that has been shown by prefeasibility study as not economically mineable or can become economically viable subject to changes in technological, economic, environmental and/or other relevant conditions.

• Feasibility Mineral Resource That part of measured mineral resource, which after feasibility study has been found to be economically not mineable. that enhancement of departmental capacity through expansion and modernisation has been taken by introduction of mechanical equipment and additional drills.

However, the fact remains that CMPDIL needs to increase its drilling capacity of nonCIL blocks as also deploy other agencies for accelerating exploration, assessment of coal reserves and preparation of geological reports.

The loopholes

The problems in augmenting India’s exploration work include, among others, the low participation of private investment.

During a recent interaction with ministry officials, members of the Confederation of Indian Industry (CII), an apex body of Indian industries, asked for fiscal incentives through tax rebates and flexibility in terms of exploration rights. A case in point was the recent announcement that oil exploration

16 Coal Insights, December 2012

firms would be insulated from rigorous CAG scrutiny and bureaucratic hassles though they would have to share profit with the

Exploratory drilling by CMPDIL and others in XI Plan (in mtrs) Agency

Target in XI Plan

Actual till 2010-11

Proposed addition in 2011-12

Actual & proposed during XI Plan

Shortfall

A. Detailed drilling by CMPDIL (including promotional drilling) MECL

361,000

104,000

465,000

GSI

81,000

19,000

100,000

CMPDIL

12,000

10,000

22,000

DGMs (Nagaland & Assam) Total A

750,000

0

1,000

1,000

454,000

134,000

588,000

249,000

70,000

319,000

162,000

B. Central Sector Scheme (non-CIL) CMPDIL (Departmental) Outsourcing

323,000

140,000

463,000

Total B

1,370,000

572,000

210,000

782,000

588,000

Total A+B

2,120,000

1,026,000

344,000

1,370,000

750,000

Source: CAG

Cover Story

Regulatory milestones ♦♦ The National Mineral Policy of 2003 paved the way for foreign companies to invest up in mining industry in India. ♦♦ In Mines and Minerals (Regulation and Development) Act (MMRDA) Amendment 1999, reconnaissance permits were introduced and FDI cap was increased from 50 percent to 100 percent for all minerals except diamonds. Subsequently, FDI in the diamond industry also increased to 100 percent. ♦♦ The Mines and Minerals (Development & Regulation) Bill, 2011 has provisions that are expected to lead to technology absorption and exploitation of deep-seated minerals.

A renewed thrust

Nobody knows the shortcomings in India’s coal and mineral exploration better than the government. And the government seems to understand this and is therefore trying to take a pro-active stance. To start with, it has raised the target for state agencies involved in exploration.

“There is little doubt that in comparison with other major coal and mineral producing countries, we are at a low level when it comes to exploration. There must be a quantum leap in this sector,” coal secretary S K Srivastava recently said.

“CMPDI does the exploration work on behalf of the government. We have increased the drilling target for them from about 400,000 metres per annum to 1,500,000 metres per annum in a matter of two years.

In Indian standards, this is a great leap but if compared with international standards, even

this is not significant,” Srivastava said.

He also acknowledged that the state agencies are incapacitated by their limited capacity and are therefore trying to get the private sector involved. “There is a strong case for private sector’s participation in exploration. CMPDI is going to outsource a lot of exploration work. In 2012-13, almost 40 percent of CMPDI’s target is to be achieved through outsourcing. However, we are not finding sufficient number of private agencies in exploration.”

To attract the private exploration companies, he urged the industry associations to look into the prospects and give suggestions. He also proposed that the bidding documents be improved and incentives be considered.

In tandem with the coal secretary’s views, the report by the Working Group on Mineral Exploration and Development for the Twelfth Plan (2012-17) period has suggested a slew of measures, including recommendations on investment, taxation and trade policies, to attract private sector to exploration activities. These suggestions are mainly for minerals other than coal and lignite, but can be extended to other segments too.

Some of the recommendations of the Working Group are as follows: • All expenditure incurred prior to commercial production including the expenditure incurred on site and deposit acquisition should be eligible for amortisation over the minimum mining lease period of 20 years or a lesser period at the option of the lessee.

2010

2025

Source: Strategic Plan, Ministry of Mines

18 Coal Insights, December 2012

• It is recommended that a TechnoEconomic Cell in the Ministry of Mines may be set up with requisite manpower for analysis of the issues related to taxes, tariff structure and trade policies in the mining sector.

Besides, the new Mines and Minerals (Development and Regulation) Bill, which reflects the problems diagnosed by the National Mineral Policy 2008, has also deliberated on exploration in detail and provides for some forward looking measures.

Opportunities beckon

Copper demand (in mt)

3 2 1 0

0

0

• Exploration bonds on the lines of Infrastructure bonds may be introduced.

Aluminium demand (in mt)

5

100

• “Flow-through–shares” mechanism may be introduced in Indian mineral sector so that venture capital can flow in exploration activities.

Notwithstanding the dismal progress so far, Indian coal and mineral exploration has a bright prospect. While the demand for coal cannot but see a dramatic growth, demand for industrial minerals is also expected to increase 4-5 times over the next 15 years.

Other than China, Indian demand would be

10

200

• The mineral exploration activity being high risk venture need special treatment.

SEBI and Stock Exchanges need to come out with a policy framework so that investment in mining/mineral exploration is increased. For this a concept of Competent Person to certify the mineral resources as per UNFC system may be introduced so that investor is confident of getting returns and at the same time requirement of Stock Exchanges are adhered to as in the case of Toronto Stock Exchange.

• For reclamation of mined out area, the mining companies may be allowed to earmark a percentage of book profits each year to meet rehabilitation as per approved Mine Closure Plan and set it aside as a special reserve in their books.

Steel demand (in mt)

300

Mine closure expenditure should be considered for tax benefits.

2010

2025

2010

2025

Cover Story

20 Coal Insights, December 2012

80

280,000

70

240,000

60

200,000

50

160,000

40

120,000

30

80,000

20

40,000

10 Coal

Diamond and gemstone

Base metal

Geological environment (in sq.km)

Area covered (in %) 100

8,000

80

6,000

60

4,000

40

2,000

20

0

in %

10,000

in %

320,000

Gold

in sq. km

Geological environment and area covered by prospecting

in sq. km

Geological environment (in sq.km)

Lignite

Platinum group of elements

Chromite ore

Manganese ore

0 Iron ore

a major driver of growth for the global metals and minerals market in coming years.

The low penetration in exploration of reserves gives ample scope for private sector companies to find new deposits and also to cash in on the emerging outsourcing opportunities. For overseas mineral mining and exploration firms, India has to date remained a largely untapped territory. If the government can provide the required policy support, the country may offer untapped opportunities. This potential is well reflected in the reserve/production (R/P) ratio for various minerals in India vis-à-vis other mineral producing countries.

Along with exploration, there are opportunities galore in new applications for the so-called ‘technology metals’ or ‘industrial metals’. New technology products coming up in communications, medical, space and energy sectors need various minerals that often do not get required attention from the mining and exploration groups in India. Some of such end-uses could be laser, catalytic converters, photovoltaic thin films, energy storage units and applications in civil and military uses. Developing new R&D processes, as suggested by an expert, for extracting such minerals in economically viable manner and putting them to innovative end-uses can give a significant boost to the Indian coal and mineral mining sector.

As for coal, the primary fuel source in the country, ongoing efforts to find new forms of fuel such as coalbed methane, underground coal gasification and coal-to-liquid need to be pursued without further delay. The more value addition these alternative fuel sources can bring in, the more the exploration sector would be incentivised.

The stakeholders in mining sector including the government, exploration

Area covered (in %)

Source: Federation of Indian Minerals Industries, E&Y

companies and user industries need to find a business in exploration. The faster they do the better for the economy as there is always a threat on the other side of an opportunity.

And the threat emanating from treating

exploration as a charity work by the public sector is a little too obvious. As mentioned in the beginning, to consume a piece of coal is a matter of minutes, but to find it takes no less than 15 years…!

coal market fundamentals

Imported steam coal prices show mixed trend in Dec Coal Insights Bureau

I

mported steam coal prices showed mixed trends in December with prices easing in South Africa and Australia, while Indonesian prices remained firm amid scant trading interest.

South African coal (6000 kcal/kg NAR) prices eased marginally to $87.3 per ton fob on December 14 compared to $90 per ton fob on November 30. Australian coal (6300 kcal/ kg GAR) prices eased to $90.5 per ton fob compared to $92 per ton fob on November 30.

Indonesian coal (5900 kcal GAR) prices remained firm at $71.75 per ton fob on December 14 compared to $70 per ton fob on November 30. Indonesian coal (5000 kcal/GAR) also remained firm at $56 per ton fob on December 14 compared to $55 per ton fob on November 30.

The Chinese thermal coal market remained largely inactive with no deals reported as traders started to wind down for the holiday season, the up-coming Lunar New Year break, amid muted demand from end-users, sources said.

But China’s industrial electricity consumption generally grinds to a halt during the Chinese New Year holidays in February and coal demand is expected to slump accordingly.

Meanwhile, falling dry bulk freight rates exerted further downward pressure on Indian CFR prices, increasing the arbitrage opportunity for shippers of South African thermal coal into the Indian market, sources said.

However, sources said stockpiles at India are high and there are around 11-12 million tons of stock at the ports and the stocks at power plants are comfortable too.

According to the recent Central Electricity Authority data, combined coal stocks at Indian power plants had risen to over 10 million tons as of December 11.

Imports to rise

According to analysts, like China, India’s domestic production of coal is not expected to meet the strong growth expected in the demand for coal.

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

3 December

91.15

94.5

71.15

55.6

38.4

33.4

4 December

91

94.75

71.7

55.8

38.5

33.5

5 December

90

94.5

71.7

55.8

38.6

33.5

6 December

88

94

71.65

56

38

33.5

7 December

87.6

93

71.65

56

38.5

33.5

10 December

86.2

93.5

71.7

56

38.5

33.5

11 December

85

93

71.75

56

38.6

33.6

12 December

84.5

92.4

71.75

56

38.6

33.6

13 December

86

91.8

71.75

56

38.6

33.6

14 December

87.2

90.6

71.7

55.9

38.5

33.5

17 December

86.6

90.8

71.4

55.8

38.5

33.5

18 December

88.5

90.4

71.4

55.9

38.5

33.5

19 December

89.5

90.8

71.5

56

38.5

33.5

20 December

89.1

90.3

71.5

56.2

38.5

33.4

22 Coal Insights, December 2012

Currently 53 percent of the total power generation capacity is from thermal power.

But to meet this demand, the growth in domestic production of thermal coal would not be sufficient as it is constrained by delays in regulatory approvals, environmental approvals and negotiating agreements with local land holders. Thus India’s thermal coal imports are expected to increase at an average annual growth rate of 11 percent to reach 148 mt in 2017, according to analysts.

According to International Energy Agency (IEA), coal demand will increase by more than 500,000 tons every day for the next five years, with coal coming close to surpassing oil as the world’s top energy source.

IEA said despite the focus on climate policy, the world will use around 1.2 billion tons/year more coal by 2017 compared with current consumption, with China and India representing 100% of the global increase in coal demand. A large decline in the US will compensate for growth in the rest of the world.

By 2017, India will become the second largest coal consumer and largest importer in the world. Together with China, the two countries will import more than one-third of total global coal imports, and will represent two-thirds of global coal demand. Indonesia will be the world’s key coal exporter.

GMR tender

According to reports, GMR Group has issued two tenders to import a total 100,000 tons of thermal coal for delivery in early 2013, making a foray into the spot market.

GMR is seeking two equal shipments of thermal coal from Indonesia, South Africa, Australia or the United States for deliveries in January and February, either on free on board or CIF basis. The company is seeking minimum 4,800 kilocalorie GAR coal with one parcel to be delivered ex Paradip and one ex-Kakinada, both eastern ports. The last day for submission of bids is December 26.

The group, with interest panning from energy to aviation, is seeking the cargoes for its subsidiaries Kamalanga Energy Ltd and EMCO Energy Ltd. Meanwhile, Kamalanga has a three 350 MW thermal power plants in Angul in eastern Odisha state and EMCO runs two 300 MW plants in Chandrapur in western Maharashtra state.

coal market fundamentals

Spot coking coal prices ease in December Coal Insights Bureau

S

lower demand from China and continued supply from traders made prices for international spot coking coal, especially premium hard coking coal, ease marginally in December.

Premium low-vol HCCs traded at around $158.50 per ton FOB Australia on December 20, down from $159 per ton FOB on December 6. Low vol PCI prices firmed marginally to around $130.50 per ton on December 20, up from $127 per ton on December 6. The semi soft variety was quoted at $113 per ton on December 20 compared to $111/ton on December 6.

Traders and mills said not much demand was evident for imported coking coal, as inventories at steel mills have recovered to a reasonable level after several weeks of restocking. But there were still quite some positions held by traders, who may have to give a much more competitive offer to entice buyers.

Second-tier HCC markets were firm, with some demand evident from both China and India. A transaction was concluded

at $142-144 per ton FOB Australia for a January-loading Panamax, sources said.

In India, sentiment was said to have been helped by an 8.2 per on-year jump in industrial output in October. But the reality on the ground is that there is no visible change in demand and prices, sources said.

Met coke prices ease

Met coke prices also showed a soft trend in December. Prices were quoted at $287 per ton cfr India on December 20 compared to $293 per ton cfr India on December 6.

The fall in the met coke prices was mainly because of low demand from Indian steel makers, who are faced with low liquidity situation because of poor end product demand conditions.

Reports that China will scrap 40 percent export tax on coke in 2013 also impacted sentiment as this will increase availability of the material worldwide and put pressure on prices.

China imposed a 40 percent export tax on coke in late 2008, as part of a broader policy to restrict the export of raw materials.

The country exported 960,000 tons

Coking coal FOB ($/ton)

Dates

3-Dec 4-Dec 5-Dec 6-Dec 7-Dec 10-Dec 11-Dec 12-Dec 13-Dec 14-Dec 17-Dec 18-Dec 19-Dec 20-Dec

Peaks Down (CSR 74%, VM-20.7%, Ash-9.7%, S-0.6%, P-0.03%, TM-9.5%) 161.5 161 158.75 159.25 160.75 160.75 161 159.5 157.5 157.25 157 158 158 158

24 Coal Insights, December 2012

Prem Low Vol (CSR-71%, VM21.5%, Ash-9.3%, S-0.50%, P-0.045%, TM-9.7%) 161.25 160.5 159 159.5 161 161 161.5 160 158 157.5 157.5 158.5 158.5 158.5

HCC 64 Mid Vol (CSR-64%, VM25.5%, Ash-9.0%, S-0.6%, P-0.050%, TM-9.5%) 145.5 145.5 143.5 143 144 144 144.5 144.5 144.5 144.5 145 145 145 145

Semi Soft Coking Coal 110 110 110.5 111 111 111.5 112 112 112 112 113 113 113 113

Met Coke

294.00 292.00 292.00 292.00 292.00 292.00 292.00 288.00 288.00 288.00 287.00 287.00 287.00 287.00

of coke during the first 11 months of 2012. This resulted in an annualised rate of 1.05 million tons (mt) for 2012, down 91.3 percent from that recorded in 2008, according to customs data.

China’s coke production remains high at 407.36 mt for the first 11 months, which yields an annualised rate of 444.39 mt.

In India, coke prices hovered around Rs 17,000 per ton ex-plant in the eastern region with few takers for the material.

Coking coal price outlook firm

If analyst are to be believed, 2013 certainly augurs well for the coking coal market.

Increased steel production projections by 3 percent touching 1.6 mt will catalyze turn around towards the Q2 as the initial days will continue in the hangover of economic recession in 2012.

One of the main triggers will come from the usual quarters of imminent economic revival in China.

The “silent” removal of a 40 percent tax on China’s coke exports, coming after the World Trade Organization ruled against the practice, will drive up production and boost the nation’s coal imports, analysts said.

China’s coke exports plunged to about 1 mt this year amid the curbs, from an annual average of 15 mt between 2000 and 2007.

Should exports rebound to that average, demand for coking coal may rise by 20 mt, benefiting suppliers including Mongolian Mining Corp and Winsway Coking Coal Holding Ltd. Steel prices have improved by 7 percent during October-November on improved stocking before the Lunar holidays in February last week. Undoubtedly effervescence in steel production would reflect positively on coking coal consumption giving fillip to the sagging imports of late. China is expected to import nearly 45 mt of coking coal in 2012 which will go up by another 1.5 mt in 2013.

However, coking coal prices might not see the same flurry as witnessed in 2011 after the flooding of Australian mines when the average price touched $289 per ton. The 2012 estimate is $210 per ton and 2013 is speculated to be $171 per ton. One of the main reasons has been ameliorated coking coal capacity in Mongolia and Mozambique.

At the same time US has of late been active in the hitherto Australian bastion owing to dipping demand in Europe.

Feature

CIL aims to achieve 10% production growth, production down in Nov Coal Insights Bureau

B

uoyed by the better-than-expected production during the first eight months (April-November) of 201213, Coal India Ltd (CIL) is hoping to achieve around 10 percent growth in coal production this year. If achieved, this would be a record both in terms of percentage increase and incremental growth in volume.

“As of the first week of December, our production growth is around 8.2 percent. We should achieve more than 10 percent growth by the end of the current fiscal,” said a top official of the state-owned coal miner.

A double digit growth expectation indicates that CIL’s FY13 production may cross 470 million tons (mt), higher than the targeted production of 464.1 mt, and around 35 mt higher than the yearly production last fiscal. The highest incremental production till now came in 2009-10 when the company reported an increase of 28 mt year-on-year.

In terms of percentage increase, the highest growth came in 1991-92 at around 8 percent.

Meanwhile, the company has achieved around 37.60 mt of production in November

2012. This was lower than the initial estimate of 38.5 mt and also 2.08 percent below 38.40 mt produced in November 2011.

A target too high?

According to information available with Coal Insights, CIL’s coal production during the eight months ended November 2012 was 264.99 mt, about 17 mt higher than 248 mt achieved during the same period last year.

If CIL achieves its December production target of 46 mt, aggregate production would be 311 mt. That will leave around 160 mt of production to be achieved in the fourth quarter (Q4) of the current fiscal, or 53 mt each month during January-March 2013.

On the face of it, a monthly production of 53 mt each month for the remaining three months of the year does not look an easy job. However, the top management looks confident about crossing the yearly target comfortably. As such achieving the yearly target itself would be a milestone, as the company has not been able to achieve that in last five years.

Rao is hopeful that the company’s coal

CIL production in 2012-13 (in mt)

45 40 35 30 25 20 15 10 5 0

2011-12

26 Coal Insights, December 2012

2012-13

Coal production to grow 8.05% in XII Plan

I

ndia’s coal production is expected to grow by 8.05 percent per annum during the Twelfth Five Year Plan (2012-17) period, D.N. Prasad, Advisor (Projects), Ministry of Coal, said.

The production growth is expected to nearly double from 4.61 percent growth witnessed during the Eleventh Plan period, he said at the recent Global Mining Summit in Kolkata.

However, to achieve the anticipated growth, the industry needs to adopt advanced exploration technology and best mining practices, Prasad said.

“Coal supplies around 55 percent of India’s primary energy needs. The situation is not going to change in the next 2-3 decades unless we come out with huge gas discovery or something like that. In the given scenario, adopting cutting edge technology is important not only to increase production, but also to achieve cost competitiveness in mining sector,” he said. production during Q4 of 2012-13 will not be affected due to delays in getting environmental clearances for mining.

“We are working on getting faster environmental clearances, but it is too early to say whether Q4 production will suffer because of these delays. But we are working and hopefully production will not suffer,” he said. The company has recently received one environmental clearance and a couple of more are in the pipeline.

For CIL, Q4 of any financial year is the peak production period due to extremely favourable weather conditions. The company generally tries to narrow the gap between actual production and projected production for a particular financial year during the second half (Q3 and Q4) of a financial year.

If CIL achieves its target, India’s coal production may reach 580 mt this year (including 110 mt from other sources), compared with 540 mt produced last year (2011-12), industry sources said.

feature SCCL prtoduction during 2012-13 (in mt)

5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0

Given the uptick in production after a gap of three years, CIL is also confident to achieve the 615 mt of production targeted for 201617. By 2025, the company is aiming to reach the 1 bn tons mark, company sources said.

SCCL production at 31.9 mt

Singareni Collieries Company Ltd (SCCL),

28 Coal Insights, December 2012

mt, marginally lower than 4.9 mt targeted for the month. November production was, however, the highest so far this year.

As it stands now, the company may exceed last year’s production in FY13, but may fall marginally short of the yearly target. SCCL had achieved 52.2 mt of coal production in 2011-12.

Captive production to be 42 mt

the second largest coal producer in India, has meanwhile achieved a production of 31.9 mt during April-November 2012. The production in the first eight months is higher than 29.7 mt achieved during the same period last year, but lower than 35.6 mt targeted for the period this year.

Production in November 2012 was 4.4

Captive coal production in India, which missed the first half target in the current year, may receive a boost as four new captive coal blocks are expected to start production soon.

As a result, total captive coal production may reach 42 million tons (mt) in 2012-13, coal secretary S.K. Srivastava has said.

“Altogether 30 captive blocks are already operating. In 2012-13, four new blocks will come to production stage. We expect captive production to reach 42 mt this year,” Srivastava said recently.

He further said that captive production is expected to increase to 100 mt by FY17.

“By the end of the 12th Plan, we hope to achieve about 100 mt, if not more. This is a conservative estimate,” he added.

feature

Industry clamours for merchant mining, MoC offers outsourcing jobs Coal Insights Bureau

T

he India Inc., the end users of coal, is running out of patience.

Amid prolonged deliberations on the chronic shortage of the dry fuel in the country and raging debate over imports, the Indian companies have suddenly become vocal about the opening up of the coal mining sector, at least in phases if not lock, stock and barrel.

In a recent interaction with a top official of the coal ministry (MoC) during the Global Mining Summit in Kolkata, the captains of the industry asked if the ministry can take up the merchant mining opportunity for consideration. The justifications given in favour of the proposal include, among others, faster technology adoption and absorption, and saving of foreign exchange.

“This has been an issue always deliberated upon,” said S K Srivastava, secretary, ministry of coal. “We are continuously moving forward and are currently just short of it (merchant mining).”

He agreed that allowing the private sector to commercially mine coal would help faster adoption of upgraded technology, but said the involvement of mine developer and operators (MDOs) in developing and mining blocks for lease holders has given scope for

the same.

Instead, the private sector can look forward to participate in greater numbers in the mining and exploration jobs offered by Coal India Ltd (CIL) and the Central Mine Planning & Design Institute (CMPDI).

Stating that the tenders floated by CMPDI for outsourcing of exploration work did not attract much interest from private parties, he said the government is considering bringing some changes in the tender documents and clauses to offer incentives to successful bidders.

In this regard, he said the coal ministry is holding parleys with the finance ministry to improve the notice inviting tenders (NITs).

“We believe Coal India should move more and more towards MDO approach. We are in dialogue with the finance ministry to improve NITs to attract the private sector to coal mining. We also welcome foreign investors to pitch in,” Srivastava said.

About exploration, he said the exploration target for CMPDIL has been increased from 4 lakh metres to 15 lakh metres of drilling per annum. “CMPDIL is going to outsource a lot of exploration activities. But we are not finding sufficient number of private agencies to do this. We are considering how the bidding documents can be improved and incentive given to them to ensure greater

“It is not a high priority issue now. We have to achieve a consensus and then only we can move forward.”

S K Srivastava Secretary, Ministry of Coal 30 Coal Insights, December 2012

participation,” he added.

When insisted about merchant mining, the official said “It is not a high priority issue now. We have to achieve a consensus and then only we can move forward.”

CIL seconds MoC stance

In line with the MoC’s stance, CIL’s top management is favouring entry of private players into the coal sector but only as a contract miner or MDO. “There is no objection to private companies, Indian or overseas, engaging as contractors for raising coal,” said a top official of the company. “In fact it is better if they come with better expertise and technology.

This will result in improved competition.

But the demand for opening up the sector or allowing private companies to own properties is not justified.”

Unlike the past, the private sector should not be allowed to own mining properties which belong to 1.2 billion people, the official said.

Interestingly, as pointed out by some industry veterans, the call for privatisation of coal mines is coming at a time when some other coal producing nations such as Indonesia and South Africa are considering greater control of state on this sector.

The major objection to the idea of opening up is that large scale private ownership of mining property would have an adverse impact on domestic coal prices.

The same is feared by some in the port sector where private ports are coming up in a big way and may dictate terms in future.

“Generally saying, as a natural resource, coal is property of the nation and it should be utilised in the most transparent way to the best benefit of the society and not to the individuals and contractors. That is really terrible, I would say,” the CIL official said.

A billion dollar opportunity

Coal mining in India is close to a billion dollar business, if one considers only cost of extraction. CIL is currently excavating 450 plus 200 million cubic metres of coal and overburden (OB) every year. As per a thumb rule, the cost of excavating is around Rs 80 per ton of material. This gives a ball park figure of Rs 5,200 crore (650 mt x Rs 80 per ton) or $1 billion.

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Feature According to CIL, this business volume is up for competition. The increased share of outsourcing in total mining volume provides for a huge business opportunity to contract miners. “If they come and give more competitive prices, they can have their own pie provided they are more competitive… ultimately the business goes to the lowest bidder.”

While the global mining giants such as BHP, Rio Tinto etc may not be interested in such contract mining (without owning the property), there could be others that do the actual extraction. Companies like Leighton and Thiess are already operating on Indian soil. However, the presence of these companies is still very limited and their track record is not exactly outstanding.

“But they can come and compete and help the country. It is business for them, but the country should be happy because you have more competition and also more capacity.

Capacity is something we will require as we move forward,” the official said.

In case of Pakri Barwadih block (Jharkhand) of NTPC which was awarded to Thiess India in 2010, there were two other foreign companies in the fray. If such companies come in more and more numbers, it will be beneficial for the country, he said.

These companies may not be willing to come for a shorter duration and smaller volumes.

But in principle CIL is committed to expand operations.

“We have not only identified new projects, but have planned expansion in existing projects also. These are all the greenfield projects to be done on turnkey basis. Turnkey projects in any case we are making open to global players. We are also improving the document and tender condition so that more competition can come and credible players can come.”

There are some big projects, both existing and upcoming, which would require excavation of up to 10 mtpa. The volume of work at mines like Kusmunda, Dipka and Rajmahal are quite substantial. “So if they expect us to offer large volume, longer duration we are open for that provided there is credible competition. Ultimately it should be beneficial to CIL in terms of volume, in terms of the time saving, efficiency and finally the cost.”

32 Coal Insights, December 2012

care of.”

“We need to open the sector to private miners and make up our mind on how we price it. We worry about windfall profit, coal being diverted to other projects, depletion of minerals...let’s have a coal regulator and all that can be taken Arup Roy Choudhury Chairman, NTPC

“If monopoly (of Coal India Ltd) in the coal sector is broken, then scams will come down.

Scams happen due to shortages and opaque way to meet shortages. We strongly advocate denationalisation of the coal industry,” D.S. Rawat Secretary General, Assocham

“Stating that the country’s energy security was under grave threat, FICCI President R. V. Kanoria called for radical reforms to break the monopoly of public sector Coal India and also attract investments in the oil and gas sectors.”

R. V. Kanoria President, FICCI

“We must understand that this is a time of coal crisis. Acquisition of mines abroad and import of coal are not the only measures to solve this problem….While the foreign companies are making tons of profit by way of export of coal, we are worried about some small profit that captive coal producers may earn by selling surplus coal. The government should take immediate policy measures to open the coal sector by taking cues from enormous competitive benefits and users/ customers of the sectors which have been privatised in the last one decade or so.”

Amitabh Mudgal Senior VP, marketing & corporate affairs, Monnet Ispat & Energy Ltd

Feature

CIL expects to appoint MDO for at least 7-8 projects by April 2013

per annum (mtpa). Out of the 27 blocks, 12 are underground mines having capacity of 14.42 mtpa and 15 are opencast project mines having capacity of 122.06 mtpa.

“Based on the feedback, we will improvise our documents and we are hopeful that something will happen soon,” Rao added.

The company expects to start mining from at least a few such projects in 2014-15.

“Eventually, we expect about 60-70 mt of additional production through MDO route during the current Five Year Plan that will come to end in 2016-17,” the chairman said.

“Our ultimate aim is to produce 140 mt of coal through these 30 projects via MDO route. We will identify new projects in future. However, if we reach that level (of 27 projects), it will be a big achievement,” Rao added.

He, however, said Indian Railways will have to improve its infrastructure to facilitate CIL improve its coal transportation from sidings to consumption points.

CIL gets “critical” EC

Rakesh Dubey

C

oal India Ltd (CIL) expects to appoint mine developers and operators (MDO) for at least 7-8 opencast projects by April 2013, the company’s chairman S Narsing Rao told Coal Insights.

CIL had in August 2012 planned to develop a total of 27 new opencast projects through MDO route to fast increase its production and meet the country’s growing demand for the fuel.

“We do not expect to award all the projects at one go because there may be some local issues and clearance related issues, but we are confident that 7-8 projects should be contracted by April 2013,” Rao said.

“Our internal target is April 2013, but

34 Coal Insights, December 2012

if even by June 2013 we can award 5-6 contracts, that will create a lot of enthusiasm among people as we can award more projects in the next 8-12 months,” the chairman said.

CIL has already awarded Bhubaneswari opencast project of Mahanadi Coalfields Ltd (MCL) and Rajmahal opencast projects of Eastern Coalfields Ltd (ECL) through open tender to various agencies for mining of coal under long term contract.

The state-owned miner had identified these projects in August and then prepared a draft notice inviting tender (NIT) which was put on its website. It is already having some preliminary meetings with prospective bidders, seeking their views and clarifying whatever is required.

The 27 blocks so identified have a total production capacity of 136.48 million tons

Rao said CIL had on December 3 finally received environmental clearance (EC) for its Bhubaneswari project and that the company expects two more such clearances, including that for Dipka, soon.

“These clearances were very critical even for achieving this year’s (2012-13) production target and that is why we were very desperate,” a relived Rao said.

He pointed out that CIL had received approvals (i.e. the expert committee had recommended the clearance of Bhubaneswari and two other projects) long back, but the company was not getting the clearances in hand.

“Earlier whenever there was a recommendation from the expert committee, the company used to get environmental clearances in hand within a week, but now it is taking more than 2-3 months,” Rao said.

The chairman said that around 30-35 mt of incremental production from Ananta and Lakhanpur projects in 2013-14 will depend to large extent on environmental clearances and many more such applications are pending before the Ministry of Environment and Forest (MoEF).

“In fact a number of projects with total

Feature incremental production potential of around 50 mtpa are pending with MoEF. These projects have been technically cleared by the expert committee,” Rao said.

The chairman said the company is trying to put as much pressure as possible on MoEF through Ministry of Coal (MoC) to get faster environmental clearances.

“We have no choice other than doing this (putting pressure on MoEF). We can’t be childish (and keep on complaining) that this was not there or that was not there and so we could not reach production target. These may be blameworthy issues, but blaming others will not give us coal. We need coal and blaming the Railways or MoEF will not serve our purpose. This will only give false satisfaction that I am not at fault,” Rao said, indicating he is not going to leave any stone unturned to achieve the production targets.

Assurance for rail project

Regarding the transportation network, Rao said he has directly requested the Chief Minister of Chhattisgarh to facilitate quick land acquisition for at least 63-67 kms of rail track from Bhupdevpur to Baroud that will be set up by the company through a Joint Venture with Indian Railways.

“I have directly requested the Chief Minister of Chhattisgarh saying that we badly need this first 63-67 kms (Bhupdevpur to Baroud). At least that should be done fast so that we put it to use. They have promised that they will do this faster,” Rao said.

CIL’s subsidiary South Eastern Coalfields Ltd (SECL) had in October signed a Memorandum of Understanding jointly with IRCON and Chhattisgarh government to develop two rail projects – East Corridor (180 kms from BhupdevpurGharghoda-Dharamjaygarh to Korba) and East West Corridor (112 kms from Gevra Road to Pendra Road.

These projects are expected to help CIL transport around 50 mt of additional coal within the current Five Year Plan (2012-17) once it is operational.

“The coming up of the project (two corridors) will definitely help, but it takes time. First there will be survey, which is expected to start soon and then there will be issue of land acquisition,” Rao said. So as against around 300 kms of total rail track, if

36 Coal Insights, December 2012

this 63-67 km is done fast or during the next three years, CIL can utilise it at least for coal production, he said. The rest of the track can go on at normal pace as it will be beneficial in the longer term, but in the short term CIL is badly in need of that 63-67 km stretch.

Recently, while addressing the Global MIning Summit in Kolkata, Rao had described the lack of railways link as the “single largest challenge” facing the coal miner. “Although clearance issues are very critical for our growth, it is the transportation of coal that is our single largest challenge,” he said. Lack of rail transport facility not only hinders despatch, it also increases the cost of coal for the end-user. He also said that road transport of coal should ideally be stopped in the country.

“Coal should not be carried to a distance of 2,000-3,000 kms. We need to consider how much energy is being spent to carry this,” he added.

No price hike proposal

To a query, Rao said that the company is not immediately considering increasing coal prices. “There is no proposal as of now to increase prices,” he said.

Asked whether the company is considering increasing prices in the next quarter (January-March 2013), the chairman

said, “I am not in a position to share anything on this right now.” He, however, said that the cost of production of the company has gone up in recent quarters following implementation of wage agreement with employees and also because of increase in diesel prices in JuneJuly 2012.

“For every one rupee increase in diesel prices, our cost of production goes up by around Rs 100 crore and so if there was an increase of Rs 4 per litre in diesel prices, our production cost has increased by around Rs 400 crore,” Rao said.

He said the company’s average cost of production during the first six months of 2012-13 was around Rs 1045 to Rs 1050 per ton. “However, the cost of production is a function of actual production because the majority of cost is fixed,” the chairman said.

Pooling and imports

Rao said CIL is seriously working on sorting out the imbroglio created over pooling of coal prices and its import of coal to supply to domestic consumers.

“We are working on imports as well as pooling. The matter has got escalated to the highest authority and soon there will be a decision,” he said. Asked if there is any deadline to solve the issue, the chairman replied in negative.

Feature

India’s coal import picks up in October

Sanjukta Ganguly

A

fter a marginal growth in the first six months (April-September) of 2012-13, coal import by India seems to have picked up since October 2012.

According to a provisional compilation by Coal Insights, import of coal (steam, coking, anthracite, PCI, met coke and pet coke) through 10 major ports of India increased by around 17 percent in October compared with September imports.

India’s coal imports from RBCT during Apr-Oct (in tons)

2,500,000 2,000,000 1,500,000 1,000,000 500,000 0

2011

38 Coal Insights, December 2012

2012

The import of coal in October stood at 7.16 million tons (mt) versus 6.12 mt imported a month ago. This figure includes imports only through the ports of Haldia, Paradip, Vizag, Gangavaram, Ennore, Chennai, Mormugao, New Mangalore, Mumbai, Kandla and Mundra ports.

The October import was also 29.13 percent higher as compared to 5.54 mt imported through the same ports in October 2011, the data revealed.

With this, the import of coal (all types) through the 10 ports during the first seven months (April-October) of 2012-13 stood at 45.97 mt, up 5.24 percent, compared with 43.68 mt imported during the corresponding period of 2011-12.

Total import during the full financial year 2011-12 through the 10 ports stood at 72.14 mt.

However, overall import of coal by the country through all the ports was much higher at 119 mt in 2011-12. This figure included imports through non-major ports like Navlakhi, Karaikal, Krishnapatnam, Tuticorin, Magdalla, Dahej, Porbandar etc.

Similarly, the actual imports during the first seven months of 2012-13 are likely to be around 67-69 mt, if the figures from other ports are accounted for.

Import from RBCT sharply up

In line with the overall trend, India’s import from Richards Bay Coal Terminal (RBCT) of South Africa showed a surge in October 2012.

Coal import from RBCT rose by nearly 24 percent in October to cross 2.0 mt marks for the first time in 2012 to 2,166,051 tons, compared with 1,748,242 tons imported in September, according to data made available to Coal Insights by one of the promoters of the terminal.

The import by India in October this year was also up by 72 percent compared with 1,259,355 tons imported in October 2011.

The softness in South African coal prices since September appears to have encouraged Indian companies to increase their purchases.

India accounted for 38.93 percent of the total coal exported through the terminal in October 2012, compared with 33.37 percent share in September. The country’s share in

Feature

I

India’s coal import may touch 300 mt by 2017: McKinsey

ndia’s coal imports which crossed 100 million tons (mt) in 2011-12 may touch 300 mt by the end of the Twelfth Five Year Plan (2012-17), according to a recent report by consultancy firm McKinsey and CII on the Indian mining sector.

The estimate is based on the “base case scenario” and widely varies from Planning Commission projection (185 mt) which is based on “best case scenario,” Rajat Bhargava, Partner, McKinsey & Co., said while commenting on the findings of the report.

However, the import estimates of 300 mt may come down if Coal India Ltd (CIL) augments its production growth and captive blocks show improvement in production performance, he said.

In any case, coal imports would result in huge forex outgo from India and, if unchecked, may impact the country’s balance of payments (BoP) position. “Forex outgo only on thermal coal between now and 2020 may become equal to India’s current forex reserves. But this is controllable. If not checked, it may blow up into a crisis.”

Globally, the demand-supply of coal is expected to be balanced over the next five years. “Commodity prices will structurally increase in future, driven by increase in marginal costs of mining…Going forward, we expect total profit pool of the industry to increase, but EBITDA margin will not grow as much as seen in the last ten years.

This however is good news for India,” he said.

total export from RBCT in October 2011 stood at mere 17.06 percent.

Earlier, India’s coal imports from RBCT rose in September as well. The import had fallen continuously between March and May 2012. It subsequently rose in June and July but witnessed a slight fall thereafter in August.

India’s total coal imports from South Africa during the first ten months of 2012 stood at 16.8 mt, up 28.7 percent compared with 13.1 mt imported during the corresponding period of 2011.

With the rise in imports during the first ten months, India’s share in total export through RBCT rose to 30.6 percent, compared with a share of 25.6 percent during the corresponding period of 2011.

In 2011, India’s coal import from South Africa stood at 16.1 mt, down 23.1 percent as compared with 20.9 mt in 2010.

Overall, India imported around 119 mt of coal in the last fiscal year (FY12). It was expcted that coal imports would reach around 150 mt this year.

Coal Insights, December 2012

39

Feature

Central utilities line up 21 mega projects with 23,330 MW generation capacity Coal Insights Bureau

T

he central power generation companies like NTPC, NLC and DVC have lined up a total of 21 mega thermal power projects with combined generation capacity of 23330 MW, an official of the power ministry said.

Of the total lined up projects, 17 with a total capacity of 17,110 MW are already under construction while for 4 projects with a capacity of 6,220 MW inputs have been tied up, but construction is yet to start, the official said.

NTPC has lined up the highest number of 14 projects on its own and another 1 through a joint venture with BSEB. DVC

has 3 projects under pipeline while NTECL has undertaken 2 projects. The remaining 1 plant would be a JV of NLC and TNEB. The mega thermal power projects would come up in ten states including Assam, Bihar, Jharkhand, Uttar Pradesh, Madhya Pradesh, Tamilnadu and West Bengal.

India adds 48,715.2MW since FY10*

Meanwhile, India has added a total of 48,715.2 MW of thermal power generation

capacity between 2010-11 and 2012-13 (till November 21, 2012), power ministry sources said.

Of the total capacity added, 34 units with generation capacity of 8,881 MW was added in 2009-10, 36 units with a capacity of 11,250.50 MW was commissioned in 2010-11, 58 units with a capacity of 19,078.70 MW was added in 2011-12 and 23 units with total capacity of 9,505 MW have been commissioned till November 21 of 2012-13. 

Mega TPPs proposed to be set up by Central power generating companies State

Project Name

Implementing Agency

Unit No

Capacity (MW)

U-1

250

U-2

250

U-3

250

U-1

660

U-2

Part A: Mega TPPs under construction Assam

Bongaigaon TPP

Barh STPP-I

Bihar

Barh STPP-II

Nabi Nagar TPP

Jharkhand Karnataka

Maharashtra

Koderma TPP Kudgi STPP Ph-I

NTPC

NTPC

NTPC

NTPC

DVC NTPC

Mouda STPP

NTPC

Mouda STPP-II

NTPC

Solapur STPP

40 Coal Insights, December 2012

NTPC

State Madhya Pradesh

Project Name

Implementing Agency

Unit No

Capacity (MW)

Vindhyachal TPP-IV

NTPC

U-12

500

Vindhyachal TPP-V

NTPC

U-13

500

U-1

500

U-2

500

Tuticorin JV

NLC & TNEB

Vallur TPP Ph I JV

NTECL

U-2

500

660

Vallur TPP-II

NTECL

U-3

500

U-3

660

Rihand TPP- III

NTPC

U-6

500

U-4

660

U-1

660

U-5

660

U-2

660

U-1

250

U-2

250

U-1

600

U-3

250

U-2

600

U-4

250

U-2

500

U-1

800

Bihar

Nabinagar TPP

JV of NTPC & BSEB

3x660

1980

U-2

800

Chhattisgarh

Lara STPP-I

NTPC

2x800

1600

U-3

800

Uttar Pradesh

Tanda-II

NTPC

2x660

1320

U-2

500

U-3

660

West Bengal

Raghunathpur TPS (Ph-II)

DVC

2x660

1320

U-4

660

Sub Total (Part B)

6220

U-1

660

Total

23330

U-2

660

Tamilnadu

Uttar Pradesh

West Bengal

JV

Meja STPP Raghunathpur TPP, Ph-I

NTPC DVC

Sub Total (Part A)

17110

Part B: MEGA TPPS Construction yet to start

*See annexure on pp. 60

Feature

India’s power utilities received 35.8 mt of coal in November Coal Insights Bureau

I

ndia’s power sector utilities received a total of 35.86 million tons (mt) of coal in November 2012, 2.66 percent higher than 34.93 mt received during the same month in 2011, according to provisional data compiled by the Central Electricity Authority (CEA).

Of the total quantity received during the month, indigenous coal was 29.79 mt, 4.95 percent lower than 31.34 mt received during the corresponding month of 2011.

The imported coal received by the power utilities in November 2012 stood at 6.07 mt, 69.08 percent higher than 3.59 mt received in November 2011, the data showed.

The power sector utilities received a total of 35.88 mt of coal in October 2012, which means the receipt in November was

down marginally by 0.06 percent month-onmonth. Coal consumption by power utilities in November 2012 was estimated at 34.32 mt, compared with 35.16 mt in November 2011 and 36.82 mt in October 2012.

The power utilities have received 285.47 mt of coal during the first eight months

(April-November) of 2012-13 as compared to 254.11 mt during the corresponding period of 2011-12.

On the other hand, coal consumption by power utilities during entire 2011-12 was estimated at 406.77 mt, compared with 377.88 mt in 2010-11.

Coal Insights, December 2012

41

Feature Despatch to power sector at 32 mt in Nov

Power utilities’ Nov coal import up

The import of steam coal by Indian power utilities, including imported coal based plants, in November 2012 jumped by a 16.06 percent to 6.07 mt from a low of 5.23 mt in October.

The actual imports were even higher than the target of 5.83 mt set by CEA for the month, and almost 2.73 mt or 81.74 percent higher than 3.34 mt imported in November 2011.

36.00 35.80 In million tons

Indian coal companies – Coal India Ltd (CIL) and Singareni Collieries Company Ltd (SCCL) – despatched a total of 32.09 mt of coal to the power sector in November 2012, according to CEA data. These companies had despatched 30.64 mt of coal to the power sector in November 2011, the data showed.

The despatches in October 2012 stood at 32.35 mt, which means November despatches were down by 0.80 percent month-on-month or 0.26 mt less compared to October 2012.

Of the total despatches in November 2012, CIL despatched 29.17 mt, while the balance 2.93 mt was despatched by SCCL. In November 2011, 27 mt was despatched by CIL while SCCL had despatched 3.63 mt to the power utilities.

In October 2012, CIL despatched 29.36 mt, while the balance 2.99 mt was despatched

by SCCL. During the first eight months (AprilNovember) of 2012-13, the total dispatches stood at 238.98 mt, up 11.59 percent as compared to 214.16 mt despatched during 2011-12.

Coal receipt by power utilities (in million tons)

35.60

Nov-12

35.40

Oct-12

35.20

Nov-11

35.00 34.80 34.60 34.40

During the month of November 2012, imported coal based plants had brought in 3.04 mt of coal whereas in October, the import by such plants stood at 2.65 mt. The import by non-imported coal based plants or domestic coal based plants stood at 3.03 mt in November compared with only 2.58 mt imported by them in October.

The total import of coal by power utilities during the first eight months (AprilNovember) 2012-13 stood at 37.17 mt of which 18.16 mt was brought by imported coal based plants and 19.01 mt by domestic coal based plants.

The target for the period for imported coal based plants was 16.00 mt and that for domestic coal based plants was 29.96 mt and actual imports till November shows that import by the former was slightly higher than the target, while that by the latter was 36.55 percent lower than the target.

CEA has set a target of 70 mt for coal

Coal despatch to power utlities (in million tons)

32.50

In million tons

32.00

Nov-12

31.50

Oct-12

31.00

Nov-11

30.50 30.00 29.50

42 Coal Insights, December 2012

import by power utilities, including 24 mt by imported coal based plants and 46 mt by domestic coal based plants for 2012-13.

The import by power utilities during the first eight months of 2011-12 stood at 29.77 mt against the target of 36.67 mt, which means the imports during the first eight months of current financial year (2012-13) were up 24.86 percent.

NTPC’s Nov coal import down marginally y-o-y NTPC Ltd imported only 810,000 tons of steam coal during the month of November down 1.82 percent compared with 825,000 tons imported in November 2011, according to provisional data of Central Electricity Authority (CEA) available with Coal Insights.

The company’s total coal imported during the first eight months (AprilNovember) of 2012-13 stood at 5,893,000 tons, down 37.12 percent compared with 9,372,000 tons imported during the corresponding period of 2011-12, the data revealed.

Its actual import during the first eight months of current financial year was 44.78 percent lower than the target of 10.67 mt for the period.

NTPC’s coal import in October 2012 stood at 742,000 tons, the data revealed.

Feature

Captive power sector gets a raw deal from govt, miners: ICPPA Coal Insights Bureau

T

he captive power producers (CPPs) which account for 10 percent of India’s power generation are being given a raw deal by domestic coal miners.

Higher price of coal, inadequate supply and lack of rakes available for transport are becoming the bane of their existence, the Indian Captive Power Producers Association (ICPPA) has alleged.

“While the independent power producers’ (IPPs) woes are well circulated, the captive power sector is being grossly neglected by one and all, starting from coal miners to government to railways. But CPP’s contribution to the economy is quite

significant,” said an official of the association.

The first and foremost issue facing the CPPs is the 35 percent premium being charged

by Coal India Ltd (CIL) on its supply to the segment. “This additional charge on CPPs smacks of ‘unequal treatment’ and is proved null and void under the Electricity Act 2003 and New Coal Distribution Policy (NCDP).

Our demand is to stop all discrimination with CPP because color of power does not change with “who is producing”.

Meanwhile, the coal ministry has not given coal linkages to CPPs and a huge number of applications are pending.

“Last year, 434 linkage applications from CPPs, including tapering linkages, having combined generation capacity of 33,000

Captive power plant at Angul

MW were pending before the ministry. This year, the ministry has not published this list so far. Around 40 applications from already operational CPPs with 2,500 MW capacity were approved by Power Ministry in AprilMay 2012 but it appears that Coal Ministry

Coal Insights, December 2012

43

Feature

Last year, 434 linkage applications from CPPs, including tapering linkages, having combined generation capacity of 33,000 MW were pending before the ministry. This year, the ministry has not published this list so far. has reserved linkages during 2012-17 only for IPP,” the official said.

Both these issues – higher price of coal and failure to get coal linkages – are taking away assured quality and power availability from industry. On one hand it is leading to delaying and cancelling of a number of CPP projects increasing pressure on the grid. On the other hand, large future investments in mother industries are stopped while the government has to walk the extra mile wooing FDI. CPPs consume 7-8 percent of the country’s total coal and contribute very significantly to the economy, but are still being treated badly by both the government and the coal miners,” he said.

One of the biggest merits of CPPs over IPPs is perhaps their zero transmission and

44 Coal Insights, December 2012

distribution (T&D) loss. Although the thermal efficiency of CPPs is a little below the level of IPPs, the low T&D losses more than compensate for that.

“A normal power plant has around 32-33 percent thermal efficiency while that of an ultra mega power project (UMPP) is around 37-38 percent. The CPPs have thermal efficiency of 31 percent. So there is a difference of 6-7 percent, but the zero T&D losses of CPPs far outstrips 25 percent to 40 percent losses in the grid system,” the official informed.

Yet another major concern of CPPs is the lack of availability of railway rakes for transport of coal to the plants. While rake availability has improved for CIL, for small consumers such as CPPs, it continues to be a hassle.

“The Railway infrastructure is in bad

shape. Rake availability reduces with significant increase in the average turnaround time (rake reaches destination in 3-5 days in northern & western sectors against earlier 2 days) The railway is trying to clear the pendency by reducing CPP quota for fresh bookings leading to permanent loss of linkage for CPP. This in turn is impacting the smaller consumers very hard,” the official said.

In a latest example South East Central (SEC) Railway curtailed rakes allocation for transport of coal by 20 percent since October.

Earlier they announced this measure in April but postponed implementation.

Such reduction in rakes affects coal supply in vast areas under South East Coalfields Ltd, Mahanadi Coalfields Ltd and Central Coalfields Ltd, industry sources said.

Industries have been making heavy investments in CPP on the behest of governments itself to boost economy, taxes and employment. Now implementers themselves are breaching consistent long term policy promises to CPP and right of unrestricted business by denying coal, charging higher and blocking rail movement, they said.

technology

Selective drop breakage studies on individual coal and stone samples The coal seams in India are mostly inter-bonded, containing stone and hard shales, since such bands cannot be separated during the mining operations; these are mixed with the coal, thereby increasing the ash percent of the run-of-mine (ROM) coal. In majority of the coalfields, it was found that the nature/character of the coal and stone is such that the stone is harder than the coal. Hence, it may be possible to remove the hard stone by incorporating a rotary breaker at the pithead or coal handling plant. However, before installing a rotary breaker, it is very much essential to understand the breakage characteristics of the coal and stone.

The present investigation includes selective drop breakage tests of coals and stones from variable heights. The differential breakage patterns of this material have been quantified in terms of Selective Crushing Index and its dependence on number of drops and heights.

Results of the selective drop breakage tests on coal and stone from non-coking coalfields showed that there is a good potential of installing a rotary breaker at the pithead.

T. Gouri Charan, U.S. Chattopadhyay, K.M.P. Singh, G.S. Jha, P.C. Chattopadhyay and K.K. Sharma – all scientists with the Coal Preparation Division, Central Institute of Mining & Fuel Research (CIMFR), Dhanbad, together carry out this investigation.

A

mongst other natural resources, coal occupies the key position as a major resource of commercial energy. As of today, the total reserves of coal in India are 285 billion tons. The coking coal reserves are very much limited, which constitute about 15 percent of the total coal reserves (GSI, 2012).

The majority of Indian coal reserves are of inferior quality with ash content between 24 – 45 percent and as high as 55 percent in some areas. The ash content in coal as delivered to some power plants is around 45 percent, which leads to various problems both at the supplier and user ends. The high ash content of coal generates various problems like an increase in erosion of heat exchange surfaces of the boiler, increased maintenance, higher transportation cost, increase of particulate emissions, and requirement of large area for fly ash disposal etc. (Saradana 2002).

Most of the coal seams are inter-banded, and the bands within the same seam or between the seams are sometimes thin

containing stone and hard shales and such seams are found in most of the coalfields of India. Since such bands cannot be separated

during the mining operations; these get mixed with the coal, increasing the ash percent of the ROM coal. Weak and soft roof and floor of the coal seams are also a contributory factor to deterioration in the quality of the ROM coal. Some dirts are disseminated in all the size fractions of coal as well as in the coal matrix. These factors are responsible for inconsistency in the ROM coal quality, particularly with regard to ash and moisture content (Sen 1999).

A cost-effective technique for deshaling of these non-coking coals which are inferior in nature and contain high amounts of stone and hard shales is needed. This necessitates proper investigations on the properties of the non-coking coals with regards to breakage characteristics etc. (Biswas 1995). It is also desirable to identify a suitable size reduction unit to produce products with the appropriate size distribution akin to industrial scale and explore the possibility of dry deshaling devices like rotary breakers. Studies on the application of single particle breakage data to the modelling of the breakage processes in a rotary breaker for Australian coals, showed that rotary breaker may be used for size reduction to reduce the fines generation (Esterle, 1996). These devices remove the hard stone and shale, which reduces the R.O.M ash content and facilitates uniform feed supply and also reduce the fines generation. The scope exists to design a suitable rotary breaker for a particular coal/ stone combination.

Fig 1: Selective Drop Breakage Experimental Set-Up

Coal Insights, December 2012

45

technology

Fig 2: Selective Crushing Index of coal: Stone at different drop height The experiment

Samples of discrete coal and stone pieces of size + 500 mm were collected from opencast coal mines where the total thickness of the working seam is about 28 m. The individual pieces were marked properly and the three dimension sides were measured for carrying out the detailed drop breakage tests.

Figure 1 shows the variable height belt conveyor wherein the following specifications were used for dropping the individual lumps of coal and stone pieces from various heights: Belt Speed Conveyor length Capacity Inclination Lift

: : : :

1.36 m/sec 9m 10 tph 18째 (Max) and 12째 (Min) : 3.290 m (Max) and 2.045 m (Min)

A thick manganese steel plate (25 mm thick) with perforations of desired size was placed in a wooden box of size 1800 x 1800 x 600 mm, so that the plate was at least 300 mm above the ground to cause resilient effect. This wooden box which had wheels was placed exactly below the belt conveyor.

Individual lumps of coal and stone (free from visible cracks or fissures) were chosen, and they were individually measured in three dimensions and weighed. These lumps of coal/stone were dropped from heights of 2.0, 2.5, 3.0 m on to a manganese steel plate of dimension 1800 x 1800 x 600 mm. Usually when these lumps were dropped, some broke while some remained unbroken. The oversize material (i.e. + 200 mm) was screened in 250, 200 mm square hole screens and weighed

46 Coal Insights, December 2012

separately the undersize material was also screened at 150, 125, 100 ,75, 50, 25, 13, 6 and 3 mm and weighed.

The data generated for each drop was recorded and used for mathematical interpretations.

This procedure was repeated until most of the coal/stone samples (95 percent) passed through the nominal top size.

Selective crushing index

The Selective Crushing Index (SCI) between coal and stone is given by:

SCI = icoal/istone

---- (1)

where, icoal = crushing degree for coal

istone = crushing degree for stone, under the same conditions.

Crushing degree (i) = do /dp

---- (2)

where, dO = Average diameter of material before crushing,

dP = Average diameter of material after crushing,

The process of selective crushing and removal of rejects as oversize are considered: Low when SCI = 1 to 1.5 Medium when SCI = 1.5 to 2.5 Good when SCI = more than 2.5 The data generated from the selective drop breakage tests were used for calculating the SCI values.

Particle sizing

The oversize retained on a particular screen after each subsequent drop of the individual samples of coal and stone when plotted as Cum. wt. percent vs No. of drops indicates the extent of separation between coal and stone over that particular screen. These data are very useful in determining the extent of stone removal at a particular size, height and number of drops.

An effective means of representing the particle size distribution data as suggested by Rosin-Rammler-Bennet (RRB) is to plot the log (log distribution of the cumulative weight percent retained/100) against the log of the screen size. This graphical representation allows one to set the undersize/oversize at any screen size and also helps to identify the characteristic particle size (material retained, 36.8 percent).

The Rosin-Rammler-Bennet (RRB) distribution curve is commonly used to

Fig 3: Cumulative Wt percent retained over 200mm screen at 2.0 m, 2.5 m and 3.0 m drop height

technology steady separation until and unless the curve becomes more or less a straight line.

Conclusion

Fig 4: RRB plots for coal sample drop height 3.0 m

describe a particle size distribution after size reduction. In the present case the RRB distribution was fitted to the products of a discrete sample of lump coal/ stone after each drop. For each height the average of three samples was taken and the RRB plots were plotted and the same for the drop height of 2m is depicted in Figures 4 for the coal samples.

Results

For each height the average of three samples was taken and SCI values were calculated for coal and stone. The different values of SCI were plotted against the number of drops graphically and shown in Figure 2. The SCI values were 2.1, 2.3 and 2.3 for drops heights of 2.0, 2.5 and 3.0 m respectively, when the experiments were carried out with 200 mm as the base size. This indicates that SCI values are high for separation of stone.

The oversize retained on the 200 mm

screen after each subsequent drop of the individual samples of coal and stone is shown in Figure 3 for the drop heights of 2.0m, 2.5m and 3.0m.

It seems that about 85.9 percent stone could be discarded as 200 mm oversize while dropping the individual lumps from a height of 3.0 m (5 drops) and under similar conditions almost no coal was found to be lost with the rejects. It may be seen from Figure 4, that after 3-4 drops the effective liberation of material is started and maintains the

The selective crushing index obtained from the drop breakage test on coal and stone suggest the use of rotary breaker as an effective means for removing the stone from this particular coal. The cumulative weight percent retained on a 200 mm screen suggests that a substantial amount of stone can be discarded as oversize. The representation of screen analysis by RRB diagram is useful for obtaining directly the characteristic diameter (do) and also the nominal diameter (d20) which is helpful in predicting the result.

The data generated from the Selective Drop Breakage Studies on Individual Coal and Stone Samples may be used as a precursor for installation of a Rotary Breaker (Figure-5) at the mine site. However, to validate the laboratory findings and for obtaining an optimum design specification such as screen size, drum diameter and length, rpm etc., it is necessary to conduct pilot scale studies.

Fig 5: Rotary Breaker

Reference: 1. Geological Survey of India (GSI) Report, 2012 “Government of India. Inventory of Indian Coal Resources” 2. A.K. Sardana, 2002 “Techno-Economic Viability of Coal Washing of Power grade coal for India”, International conference & Business Meet on ‘Fossil Fuel Power Generation’, 21-23. New Delhi.

3. Kalyan Sen, N.S. Das, S. Biswas, S. K. Mitra, A. Seth, D. Gnana Bharathi, S. G. Chaudhuri, Anjani Kumar and M. M. Bhattacharya, 1999 “Basic Study initiated on improvement on coal quality: Beneficiation for cleaner use of non-coking coal”, International Symposium on Clean Coal Initiatives (CMRI), New Delhi, 22-24 4. S. Biswas, T. Gouri Charan, U.S. Chattopadhyay and K. Sen, 1995 “Selective Breakage of Non-coking Coals and Associated Stones - A Case Study” Fuel Sci. Technol., 14 (3 & 4), pp 95to 100.

5. J.S. Esterle, T. Kojovicm G. O’Brien, A.C. Scott, 1996 “Coal Breakage Nodelling: A tool for managing fines generation” Proceedings of the Mining Technology Conference, Fremantle WA, p 211-228.

Coal Insights, December 2012

47

technology

Outotec offers paste tech to dispose of tailings

tailing pond by placing the paste tailings on top of the existing tailings. This was possible only by using paste technology, he said.

Nyström said that the mining industry faces growing challenges globally on how to use water efficiently, how to recover and recirculate water and how to reduce the areas needed for tailings storage. “That is why the market for new sustainable solutions for tailings treatment is growing,” he said. “Since the water from the tailings is efficiently recovered using paste technology, the water can be used over and over again. This makes the technology attractive especially in dry regions,” he added.

He also pointed out that paste technology makes it much easier to restore the landscape in a safe way after a mine is closed.

“We are now investigating the possibility with adding fertilisers and seed to the tailings through the paste plant some time before the mine will be closed down. This way the restoration process needs very little extra work. By using this method the closure process can be started in good time, saving time and money and in an environmental way improving the closure process,” he informed.

Stabilising mined out areas

Coal Insights Bureau

I

n any mining process, mechanical and chemical processes are used to extract the desired product from the run of the mine ore. The processes in turn, also produce a waste stream known as tailings, primarily consisting of unrecoverable and uneconomic metals, minerals, chemicals, organics and process water. In coal mining, the term ‘tailings’ refers specifically to fine waste suspended in water.

How the tailings are handled is of utmost importance as they have ecological ramifications. Paste technology is one such technology which primarily aims to reduce the moisture content of a processing plant’s tailings stream to produce a material that remains sufficiently fluid to pump yet sufficiently stiff to gain early stability. Advantages of this technology include conservation of water resources, reducing the environmental impact of tailings disposal and speeding up tailings restoration, among others.

Outotec, a company which provides

48 Coal Insights, December 2012

technology for the metal and mineral processing industries, is one of the few companies in the world that offers paste thickening solutions for the mineral industries. Outotec’s expertise regarding paste technology springs from the company’s long experience in the minerals and metals processing technology field, company sources said.

“Paste technology is now widely acknowledged and at the moment Outotec has ongoing paste projects all over the world,” said Anders Nyström, Technology Sales Manager of Paste and Backfill Solutions at Outotec. “Using paste technology the tailings form a conical pile and do not need big ponds to be stored in. This means that the disposal area is much smaller compared to conventional tailing ponds and the danger of leakage is minimal,” he explained.

Nyström was introduced to paste technology when he was leading a project aiming at minimising the area needed for tailings disposal at a mine in Canada in 2002.

The mine was not allowed to extend the tailing ponds but could use the existing

With the recent acquisition of the Australian company Backfill Specialists, Outotec can now offer even more comprehensive tailings treatment solutions to the mining industry worldwide.

“Paste backfill is mainly used to stabilise underground excavations, according to Mathew Revell, a leading international expert regarding backfill solutions and head of Outotec’s Paste and Backfill Solutions business. “It means that a mix of paste and cement is pumped into previously mined stopes to form a rock solid material,” he added.

The paste backfill supports for example the walls of adjacent adits as mining progresses.

“This way the mine can be utilised to a maximum since it makes it possible to mine all of the ore deposit,” Revell explained. “The paste backfill can also serve as a working platform in a mine. In short, by using paste backfill the mines can be utilised more efficiently and above all, safely.”

Since the cost of the binding material is essential for the competitiveness of paste backfilling, Outotec’s expertise in optimising the consistence of the paste can be crucial.

technology

Vibrocone™ crusher: The next generation crushing technology Coal Insights Bureau

T

he Vibrocone™ crusher launched

by Sandvik Mining is the next generation of crushing technology combining the best of conventional crushing and grinding principles. The crusher can handle even the first stages of grinding.

The whole comminution process is made much more streamlined, with great savings in investment, workload, energy and consequently, money.

Material is crushed by means of multiple compressions and a large top size in the feed is accepted just as with a traditional cone crusher. Material is crushed in a thick material bed and exposed to optimal controlled force that can be adjusted, as in high pressure grinding rolls. Material is crushed against material, as in AG and SAG mills.

The Vibrocone™ crusher combines the best of conventional crushing and grinding principles to produce an unprecedented amount of finely crushed product. The particles are not only crushed between the liner surfaces in the crushing chamber; they are also to a higher degree crushed by each other in a high pressure inter-particle crushing action.

The result is a crusher moving into the grinding performance area. This breakthrough gives Vibrocone extraordinary potential. With a P50=3mm (1/8”) mill feed, the grinding phase works much more efficiently.

Highlights of the Vibrocone™ crusher

♦♦ S afety has always been one of the cornerstones in Sandvik’s values. While developing Vibrocone™, a number of issues were worked on to achieve Sandvik’s ambition of providing the safest equipment on the market

♦♦ T he Vibrocone design makes it possible to automatically detect and safely react to uncrushable objects like tramp metal. As uncrushable objects restrict the movement of the mantle the power input will drop immediately. Crushing will continue until the object has passed through. If by chance it gets stuck inside due to its size, the feed will stop.

Operation can continue gently at reduced speed and force in order to empty the crushing chamber of material, so that the unwanted object can easily be removed ♦♦ O nce operating conditions are set up for the specific application the Vibrocone doesn’t normally require any human involvement. Crusher performance and power input as well as wear compensation is supervised and regulated around the clock by the automation. The warning system monitors the crusher and alert the operator there is a malfunction. For example, if an uncrushable object is stuck because it couldn’t pass the warning system monitor will alert the operator.

In addition there is a historical database with all operating parameters in the control system to assist with performance analysis ♦♦ M aintenance procedures from conventional cone crushers are well recognized. For wear liner change, the regulating ring is hydraulically unscrewed and the main shaft is lifted out. In support of achieving Sandvik’s safety ambition, Vibrocone has no backing material for fixing the mantle and concave.

Additionally, all crushed material areas are separated from any mechanical parts of the machine and the crusher product is discharged via an outlet chute of just 500 x 500 mm. There is also a 360˚ access to the crushing chamber and dust seal from six hatches.

Features of the Vibrocone™ Crusher ♦♦ U pgrading for downstream efficiency ♦♦ S afer handling of uncrushable objects ♦♦ S upervised and regulated by automation ♦♦ Well recognized ♦♦ Easy maintenance Examples

Changing the rules for comminution crushers are typically ten times more energy efficient than mills. By producing a much finer mill feed, Vibrocone also handles the first stages of grinding – in a dry process.

Off-loading work from the downstream milling process saves up to 30% energy.

Meeting increases in energy prices and environmental regulations greatly benefiting the bottom line.

For a better future

The Vibrocone crusher is in operation at copper, gold and iron ore mine sites, and provides highly increased efficiency in the comminution process. Substantial amounts of energy are saved which opens the door to a better future in mining.

Coal Insights, December 2012

49

In Focus

World pet coke production may grow 35% by 2016 Sanjukta Ganguly

P

roduction of pet coke, a key ingredient in cement making, is witnessing steady growth and is likely to touch around 168 million tons per annum (mtpa) by 2016, according to a report by Jacobs Consultancy, one of the leading global consultants of the petrochemical industry.

The global production stood at about 110 mtpa in 2011 and is about to close at 124 mt in 2012. Over the next four years, production is expected to grow by 35 percent, due to an increase in the number of coal fired thermal power stations, uptrend in coal prices, attractive freight rates and economic growth in Asia leading to construction demand.

The analysis of the global pet coke market brings out two facts. One, pet coke can emerge as a significant alternative to coal for the cement industry. Two, the pet coke market will shift its centre of gravity to Asia.

In fact, Asia has already captured about 32 percent of the global market and this share is expected to increase further, going forward.

Production shifts to east

A notable trend in the pet coke market is the shift of the material’s production centre World petroleum coke demand

Source: Jacobs Consultancy

50 Coal Insights, December 2012

the global economy. Recuperating from the setback, production has started to pick up in Latin American countries. Hence, Brazil and Colombia might lead Latin American growth, expect the analysts. In addition to this, two new Saudi Arabian cokers will add more than 4 mt whereas India will complete the projects already in progress. China will also continue to expand but at a slower pace.

eastward. Global production until now continues to be dominated by the Americas.

USA and Canada together constituted about Green pet coke 48 percent of the production till 2011. In the According to the report, demand for green near term, there will be continued growth petroleum coke is steadily rising throughout in Canadian oil sands, but this may not be the world. China is leading the bandwagon the case in the long term. Already, Committed coking capacity additions, 2012-13 these two countries are seen to be gradually losing their market share to Asian countries.

Asia, in contrast, has already captured a sizeable market share of 32 percent and this share is continuing to grow. China and Other Asian countries, mainly India, will lead production growth Source: Jacobs Consultancy whereas Middle East will effectively double its market share in terms of demand for green pet coke. The of 4 percent. Latin America will hold its own country’s demand for the material is set to production whereas North America will lose witness a steep upsurge from around 32 mtpa the most market share in the coming days. in 2012 to over 50 mtpa by 2016. In US and As per information Canada, the increase in demand is less likely available with Coal to witness such a steep rise. by region Insights, in 2007-2011, new production began Way forward appearing in China Earlier, US mostly exported pet coke to and Other Asia, led by Europe and Japan but of late more is being India which provided exported from the US to the Asian and a major boost to global pet coke production. Middle East markets. As Europe is steadily Construction boom moving away from pet coke use, going although started forward, more pet coke exports from the was tempered by the US is expected to find China as the primary 2008 recession which destination.

According to analysts, the east and New had hit hard the US market on a large scale Middle East production will find markets at with its widespread home which include Mediterranean, China impact cascading over and India.

Corporate

Afghanistan to sign pact with SAIL consortium in January

Afghanistan, India in talks for 600-km railway line

I

Tamajit Pain

T

he Afghanistan government will sign the concession agreement in January with SAIL-led consortium, after cabinet clearance, for mining iron ore in Hajigak concession in Bamiyan province.

A delegation of SAIL is expected to sort out all the remaining issues in December following which the Afghanistan cabinet will clear and concession agreement will be signed in January 2013, informed sources said adding discussions are currently on in this regard.

Earlier, speaking on the sidelines of the CII-organised International Mining and Machinery Conference, Afghanistan Mines Minister Wahidullah Shahrani said for a project of such magnitude delay was not unusual. Already 90 per cent of the issues have been sorted out and that in the next round of meeting final details will be concluded.

The AFISCO (Afghan Iron and Steel Consortium) consists of public sector companies such as SAIL, NMDC and RINL. The private sector players include JSW Steel, JSW Ispat, Jindal Steel and Power Ltd and Monnet Ispat and Energy Ltd. The consortium has won three blocks

at the Hajigak iron ore mines in Afghanistan.

The Afghan Mines Ministry had said AFISCO risked losing mining licences in the country if it failed to meet production targets or failed to commence mining within six months of the licence being granted.

However, Shahrani said the new proposed mining laws would not affect awarding of the contract to AFISCO as India was a very strategic partner, and that the company would be governed under the new proposed laws. Afghanistan is coming out with new mining laws this month to boost mining industry investment in the country, he said.

“It is a very strategic project for both the countries. It can’t be seen purely from the point of view of a commercial venture. For us, commercially as well as politically it is a very important project and also the largestever investment in our country,” the minister said.

“It is just the beginning of Indian investment in our country. As we launch the Hajigak project, it would pave the way for more Indian investment in our country,” he said.

“Under the project part of the iron ore would be shipped through Chinese railway line which is being laid for their Aynak copper project,” Shahrani said.

ndia and Afghanistan are considering a proposal of laying a 600-km railway line between Bamiyan province in the central part of the country and its western province Herat, bordering Iran.

Wahidullah Shahrani, Afghanistan’s Minister of Mines, said this was a newly proposed rail corridor project, which both the countries might jointly implement.

“We are discussing with the government of India at the highest level to develop jointly a special 600 km rail corridor that will join Central Afghanistan all the way to Iranian border,” he added.

“The proposed corridor would link a number of mineral resources deposits in Afghanistan,” the minister said. The landlocked and war-ravaged country does not have a physical communication infrastructure.

The Hajigak iron ore project will cover part of the rail corridor.

Afghanistan has also identified a number of iron ore, lead and zinc deposits that lay along the corridor.

Although a SAIL-led consortium of steel makers was involved in an iron ore and steel project linked to Bamiyan deposits of Hajigak, the minister insisted that this was a separate project.

Another consortium, also led by SAIL, has bid for an unexplored copper deposit in Herat’s Shaida area.

Officials in New Delhi and Kabul have been trying to find a transport route that can viably evacuate minerals or metals out of Afghanistan. The proposed rail link from Hajigak will run westwards to Iran, along the ZaranjDelaram highway that India had built in the mid-2000s, to the Iranian port of Chabahar.

Coal Insights, December 2012

51

International

Coal to close in on oil as world’s top energy source by 2017: IEA

Chandrika Mitra

C

oal’s share of the global energy mix continues to rise, and by 2017 coal will come close to surpassing oil as the world’s top energy source, the International Energy Agency (IEA) said in its annual Medium-Term Coal Market Report (MCMR).

Although the growth rate of coal slows from the breakneck pace of the last decade, global coal consumption by 2017 stands at 4.32 billion tons of oil equivalent (btoe), versus around 4.40 btoe for oil, based on IEA medium-term projections. The IEA expects that coal demand will increase in every region of the world except in the United States, where coal is being pushed out by natural gas.

“Thanks to abundant supplies and insatiable demand for power from emerging markets, coal met nearly half of the rise in global energy demand during the first decade

52 Coal Insights, December 2012

says China will surpass the rest of the world in coal demand during the outlook period, while India will become the largest seaborne coal importer and second-largest consumer, surpassing the United States.

The report notes that in the absence of a high carbon price, only fierce competition from low-priced gas can effectively reduce coal demand. “The US experience suggests that a more efficient gas market, marked by flexible pricing and fueled by indigenous unconventional resources that are produced sustainably, can reduce coal use, CO2 emissions and consumers’ electricity bills, without harming energy security,” said van der Hoeven. “Europe, China and other regions should take note.”

The report’s forecasts are based on a troubling assumption, namely, that carbon capture and sequestration (CCS) will not be available during the outlook period. “CCS technologies are not taking off as once expected, which means CO2 emissions will keep growing substantially. Without progress in CCS, and if other countries cannot replicate the US experience and reduce coal demand, coal faces the risk of a potential climate policy backlash,” she said.

As US coal demand declines, more US coal is going to Europe, where low CO2 prices and high gas prices are increasing the competitiveness of coal in the power generation system. This trend, however, is close to peaking, and coal demand by 2017 in Europe is projected to drop to levels slightly above those in 2011, due to increasing renewable generation and decommissioning of old coal plants.

Amid concern about the impact of Chinese uncertainty on coal markets, the report offers a Chinese Slowdown Case.

This scenario shows that even if Chinese

of the 21st Century,” said IEA Executive Director Maria van der Hoeven. “This report sees that trend continuing.”

In fact, the world will burn around 1.2 billion more tons of coal per year by 2017 compared to today – equivalent to the current coal consumption of Russia and the United States combined. Coal’s share of the global energy mix continues to grow World total primary energy supply by fuel type, 1973 each year, and if 1.8 no changes are 0.1 0.9 made to current Coal/peat 10.5 24.6 policies, coal will Oil 16 catch oil within a Natural gas decade, she said.

Nuclear China and India lead the Hydro 46.1 growth in coal Biofuels and waste consumption Other* over the next five years. The report *Other includes geothermal, solar, wind, heat, etc.

Source: IEA

International GDP growth were to slow to a 4.6 percent average over the period, coal demand would still increase both globally and in China – indicating that coal demand is not likely to stop growing even with more bearish economic perspectives.

Report augurs well for miners

The new IEA projections, covering the 201217 period, augurs well for the world’s top coal producers, including Shenhua Group of China, Coal India Ltd (CIL), Anglo American, the combination of Glencore and

Decelerating development projects might lead to tightened international coal markets during the outlook period.

Xstrata, and Peabody Energy.

Benchmark coal prices earlier this year dropped to a two-year low of $85 per ton because of surging exports from the US, where coal is World total primary energy supply by fuel type, 1973 battling with cheap natural 0.9 gas supplies, 2.3 Coal/peat 5.7 10 and Indonesia, 27.3 Oil but have since Natural gas then recovered 21.4 somewhat.

Nuclear Lower prices Hydro 32.4 have led miners Biofuels and waste to lay off workers, Other* close some pits and cancel *Other includes geothermal, solar, wind, heat, etc.

Source: IEA

future expansions, especially in Indonesia.

“Considering the significant lead time needed to ramp up supply, through simultaneous mine and transport infrastructure development, decelerating development projects might lead to tightened international coal markets during the outlook period,” the IEA said, suggesting higher prices going forward.

Footnote: Medium-Term Coal Market Report 2012 is part of the IEA’s medium-term market report series, which also includes editions on renewable energy, natural gas and oil. With these four reports, the IEA offers a sound and coherent view of the main drivers of energy markets. MCMR offers a complete view of recent trends and projections to 2017 on coal demand, supply and trade and complements the coal chapter of the IEA’s annual World Energy Outlook, which has a longer-term focus.

Coal Insights, December 2012

53

International

World thermal coal trade to rise 4% in 2013 Coal Insights Bureau

T

he global thermal coal trade is expected to increase by 4 percent in 2013 to touch 934 million tons (mt), the Bureau of Resources and Energy Economics (BREE) has forecasted. The volume would also see a similar increase in 2012 to reach 899 mt, compared to 866 mt in the previous year.

This rise is mainly on account of higher consumption demand for electricity generation in Asia. Growth in consumption demand for thermal coal in 2012 has been supported by higher exports from Australia, Indonesia and Colombia.

The increase in thermal coal trade is likely to put downward pressure on thermal coal spot prices and eventually the contract prices. In the coal financial year of 2013-14 (April-March), coal contract price is forecast to settle at about $100 per ton. Average pricing is expected to slump from $115 per ton in 2012 to $100 per ton in 2013. In 2011, the average thermal coal contract price stood at around $130 per ton.

Asia & EU

China and India, the two major growing economies in Asia, are expected to have a Thermal coal imports Country

2011

2012 (forecast)

World

865

899

Asia

577

616

China

146

170

Chinese Taipei

63

63

India

86

89

Japan

122

128

Rep of Korea

97

99

Malaysia

21

21

other Asia

42

47

Europe

211

209

European Union 27 c

165

164

other Europe

46

45

Other

77

74

54 Coal Insights, December 2012

considerable share in global thermal coal imports. India’s thermal coal imports are forecast to increase by 3 percent to 89 mt in 2012, and again by 10 percent to 98 mt in 2013, supported by increasing domestic demand for electricity consumption. India’s coal import in 2011 stood at around 86 mt, according to BREE’s latest release.

China is forecast to increase imports by 16 percent to 170 mt in 2012 and a further 5 percent in 2013 to 179 mt. The country’s coal export figures are forecast at 10 mt each in 2012 and 2013, marginally lower than 11 mt in 2011.

Japan, another major importer of thermal coal, is expected to increase coal imports by 5 percent to 128 mt in 2012 from 122 mt in 2011 due to the shut-down of most of the country’s nuclear power plants following the 2011 Fukushima nuclear incident. In 2013, Japan’s imports of thermal coal are forecast to increase by a further 2 percent, to total 130 mt, as per the report.

BREE further forecasted that in 2012, imports of thermal coal into EU may fall by 1 mt to 164 mt from 165 mt in 2011, mainly due to continuing Euro Zone debt issues and weak economic growth which would result in lower electricity demand. Moderate improvements in European economic conditions in 2013 are expected to result in million tons in thermal coal 2013 (forecast) % change imports recovering to 165 mt.

934 3.9 Indonesia 644 4.5 which is one of the 179 5.3 most important 63 0 thermal coal 98 10.1 producers is 130 1.6 forecast to export 101 2.5 315 mt – an 22 3.9 increase of 2 51 9.6 percent in 2012 212 1.6 over 309 mt in 165 0.5 2011.

47 5.2 In 2013, this 78 5.3 is forecast to grow

by an additional 5 percent to total 330 mt.

Russia, another major thermal coal supplier, is likely to increase exports to 110 mt in 2012 and subsequently to 112 mt in 2013 from 109 mt in 2011.

Americas

Colombia exported around 80 mt in 2012, higher than 75 mt reported for the previous year. The Latin American country might increase exports to a further of 82 mt in 2013.

Overall, South Africa’s coal export is forecast at 75 mt and 76 mt for 2012 and 2013 respectively, slightly higher than 72 mt in 2011.

In the US, cheap domestic gas has caused a surplus of coal production relative to demand in 2012, the balance of which has been sent predominantly to export markets. Accordingly, US thermal coal exports in 2012 are expected to increase by 34 percent, relative to 2011, to 50 mt. In 2013, lower export prices and higher domestic gas prices in the US are forecast to result in a decrease in export volumes to 40 mt, as per the BREE report.

Australia

Thermal coal production in Australia will increase 9 percent to 243 mt in 2012-2013 while exports are expected to jump 13 percent to 180 mt compared to 2011-2012.

In 2012, Australia’s exports of thermal coal are forecast to increase to 167 mt, 13 percent higher than 2011. Increased volumes are forecast for Xstrata’s Mangoola mine (which has an annual capacity of 8 mt), stage 1 of Yancoal’s Moolarben mine (having a capacity of 8 mt) and Peabody Energy’s expansion of its Wilpinjong operation (with an additional annual capacity of 2–3 mt).

The report also forecast that higher export volume of thermal coal would offset the impact of lower coal prices and result in 6 percent increase in export earnings to $18.1 billion.

In 2013, Australia’s exports are forecast to increase by 11 percent, relative to 2012, to 186 mt which will be supported by production from soon-to-be-commissioned mines which include the Hunter Valley Operations Expansion (with a capacity of 6 mt) and Narrabri Coal Project stage 2 expansion (having a capacity of 4.5 mt).

Australia’s thermal coal production for 2011-12 stood at around 223 mt while in 2010-11 it stood at around 206 mt.

International

US coal production to be 1,027 MMst in 2012: EIA Coal Insights Bureau

U

S coal consumption is likely to fall to 917.9 million short tons (MMst) in 2012 but might increase to 946.6 MMst in 2013, according to the latest report by US Energy Information Administration (EIA).

Coal consumption in the electric power sector may drop to 829 MMst in 2012, the lowest amount since 1992 as lower natural gas prices to electric generators have led to a significant increase in natural gas-fired generation. However, power sector coal consumption is expected to grow by 5 percent in 2013, as higher natural gas prices lead to a reduction in natural gas-fired generation.

EIA forecasts that coal production will decline by 6 percent in 2012 to 1,027.1 MMst as domestic consumption falls. The agency expects production to increase slightly by 1 percent to 1,019.9 MMst in 2013 as inventory draws and lower exports offset an increase in domestic consumption. Electric power sector stocks, which ended 2011 at 172 MMst, are forecast to total 183 MMst at the end of the 2012 and 179 MMst in 2013.

Coal trade

EIA expects coal exports to reach a record 123.7 MMst in 2012. It projects that coal exports will decline in 2013 to 104.1 MMst,

but will remain above 100 MMst for the third straight year.

Continuing economic weakness in Europe and lower international coal prices are the primary reasons for the expected decline in coal exports. US exports could be higher if there are significant supply disruptions from any of the major coal-exporting countries.

US coal imports are forecast to remain at 9.9 MMst in 2012 and rise to 11 MMst in 2013.

(December - February) would be about 15 percent more than last winter, leading to a year-on-year increase in US residential electricity consumption of 8.6 percent during the period. However, variations in winter weather can have a significant effect on residential electricity consumption, especially in the southeastern United States where nearly two-thirds of households use electricity as their primary heating source.

Residential electricity consumption during the months of December, January and February in 2011-12 reached the lowest level since the winter of 2005-06 as heating degree days in the South Atlantic Census division totaled about 21 percent below the 30-year normal.

For 2013, EIA projects flat growth in US residential electricity sales to 3.76

Coal prices

Delivered coal prices to the electric power industry increased steadily over the 10-year period ending in 2011, when the delivered coal price averaged $2.39 per MMBtu, a 6 percent increase over 2010.

Howe ver, EIA expects that the decline in domestic demand for coal, combined with large coal inventories, will slow increases in coal prices and contribute to the shut-in of higher-cost production. The agency further forecasts that the delivered coal price will average $2.40 per MMBtu in 2012 and $2.44 per MMBtu in 2013.

Electricity

EIA forecasts that heating degree days nationwide during the next three months

billion kilowatthours per day due to cooler summer weather and associated reduction in electricity consumption for space cooling which offsets the projected increase in winter electricity consumption.

The most important trend in electricity generation over the past few years has been the industry’s price-driven substitution of coal-fired generation by generation fueled by natural gas. Through September this year, the price of natural gas delivered to electric generators has averaged 35 percent less than the cost during the same period last year, while the delivered price of coal is unchanged.

EIA expects the nominal US residential electricity price will rise by 1.2 percent during 2012, compared with an increase of 1.6 percent last year. Residential prices during 2013 are projected to rise by 1.6 percent to 12.0 cents per kilowatthour. 

Coal Insights, December 2012

55

International

China removes 40% export tax on met coke

market, but in the international market as well as China is a very big supplier of coke to the world market,” said Nirmal Agarwal, Director of Adhunik Group.

“I think the price of imported met coke will fall to around $260 per ton CFR India soon from current levels of around $290 per ton CFR India ,” he said.

“Not only met coke prices will soften, but we assume that coking coal prices too would soften from current levels of around $157 per ton in the spot market and will also lead to softening of quarterly contracted prices in the second quarter of 2013 to around $150 per ton from Q1 levels of around $160 per ton,” Agarwal said.

However, a section of industry, including coke makers, feel that market has already discounted the Chinese move and there is no further scope for fall in met coke prices.

China’s steam coal demand limited

Coal Insights Bureau

B

ending in face of pressure from the World Trade Organisation (WTO), the Chinese Government has finally taken the decision to do away with the export tax on metallurgical coke. There however was initial doubt over the authenticity of reports claiming the move by the government. But it became evident after the finance ministry released the list of export and import taxes on various products for 2013. The list released on December 17 did not include met coke as an item.

China had imposed 40 percent export tax on met coke in late 2008, as part of a broader policy to restrict export of raw materials from the country. The measure came to good use as the country exported only 960,000 tons of met coke during the first 11 months of 2012. This resulted in an annualised rate of 1.05 million tons (mt) for 2012, down 91.3 percent from that recorded in 2008.

China’s met coke production stood as high as 407.36 mt for the first 11 months, which yields an annualised rate of 444.39 mt, according to customs data. In fact, so far this year in 2012-13, exports represent only 0.2 percent of China’s production.

“A cut on the tax is expected, but a

56 Coal Insights, December 2012

removal shows the government’s resolution.

China is under pressure from the World Trade Organisation and the overcapacity of the industry needs an outlet as well,” an industry analyst in Beijing said.

The WTO backed claims brought by USA, the European Union (EU) and Mexico that Chinese export tariffs and quotas on a range of raw materials including bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, yellow phosphorous and zinc broke WTO rules and distorted global markets. Talks of cutting or removal of the export tax first surfaced in August, 2008. However, WTO rulings against China’s alleged restrictions on the export of raw materials took quite long and gave it until the end of the year to act.

Decision to benefit steel makers

China’s decision to withdraw export duty on met coke is expected to increase the availability of the material in the world market besides putting pressure on prices and both these will benefit steel makers, particularly those in India, an official of a Kolkata-based steel maker told Coal Insights.

“The decision of China will lead to sharp fall in coke prices not only in the Indian

Meanwhile, Chinese thermal coal market remained largely inactive with no deals reported during mid-December as traders started to wind down for the holiday season amid muted demand from end-users.

“Although some of our utility customers have some demand for lower calorific value Indonesian thermal coal, the downstream coal market is basically quiet at the moment,” a Shandong-based trader was quoted as saying. In fact, a Jiangsu-based trader was in the market for 5,500 kcal/kg NAR Australian or South African coal at no higher than $83.50 per ton CFR for early January delivery, according to a market report.

Several traders said that availability in the Newcastle 5,500 kcal/kg NAR market was tightening, with not many cargoes on offer this month. Rather, Chinese domestic supplies are a more attractive alternative for buyers and are abundantly covering demand at the moment in China. As such, Australian sellers were still eyeing the South Korean market, where buyers’ bids were significantly higher than their Chinese counterparts at $86-87 per ton CFR, the report said.

Sliding Chinese domestic thermal coal prices are making buyers hesitant to conclude deals for imported coal, according to information available with Coal Insights.

Chinese buyers are still looking for cargoes but are not ready to pay above the local price, market sources said.

logistics

Traffic handling by major ports down 2.8% in AprilNovember Coal Insights Bureau

The 12 major Indian ports have handled 359.98 million tons (mt) of traffic during the first eight months (April-November) of 2012-13, 2.88 percent lower than 370.67 mt recorded during the same period last year.

According to data released by the Indian Ports Association (IPA), the country’s major ports handled a total of 20.44 mt of coking coal in April-November period, up 7.37 percent as compared with 19.03 mt handled in the same period last year.

However, the movement of thermal coal through the major ports was up 10.62 percent to 35.48 mt during April-November,

compared to 32.07 mt achieved in the same period last year.

Movement of iron ore through the major ports showed a significant drop of 53.38 percent in April-November due to restrictions imposed Traffic handled at major ports on mining and a (During Apr-Oct, 2012* vis-a-vis Apr-Oct, 2011) hike in export duty (*) Tentative (in '000 tons) on iron ore. The major ports together April to November traffic % variation against Ports handled 19.83 mt of prev. year traffic 2012* 2011 iron ore in the AprilKolkata November period Kolkata dock system 7755 8364 -7.28 compared to 42.54 mt handled in the Haldia dock complex 18031 22056 -18.25 same period last year.

Total: Kolkata 25786 30420 -15.23 Vishakhapatnam Paradip 35465 36366 -2.48 port handled the highest volume of Visakhapatnam 39416 47904 -17.72 7.75 mt of iron ore Ennore 10759 8979 19.82 in April-November.

Chennai 35581 37851 -6.00 This volume, V.O. Chidambaranar 18467 18107 1.99 however, was about 37.53 percent lower Cochin 13299 13227 0.54 than the iron ore New Mangalore 23566 20951 12.48 traffic moved through Mormugao 14205 23856 -40.46 the port in the same period last year.

Mumbai 38885 35628 9.14 Movement of JNPT 42860 43630 -1.76 container traffic in Kandla 61694 53758 14.76 terms of tonnage Total 359983 370677 -2.88 showed an increase in the April-November Source: IPA

period, while that of TEUs fell during the period. The major ports handled 79.72 mt of tonnage and 5.16 million TEUs in AprilNovember period compared to 79.51 mt of tonnage and 5.17 mt of TEU 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 13.13 mt in April-November period. Visakhapatnam port handled the highest quantity of 4.59 mt of coking coal during the period.

Movement of coking coal through Paradip, Kolkata, Visakhapatnam, Chennai and Cochin ports declined during the period when compared to the corresponding period last year.

Six major ports showed positive growth in traffic handling during the AprilNovember period of the current fiscal, while the remaining six showed negative growth on a year-on-year basis.

In terms of growth, Ennore port topped the list with a 19.82 percent increase in cargo throughput. Cochin port’s growth was lowest at about 0.54 percent during the period. In terms of traffic volume, Kandla port clinched the top rank with a cargo volume of 61.69 mt recorded for the period.

The Mormugao port registered the highest decline of 40.46 percent in traffic handling during the period due to fall in iron ore export.

Coal Insights, December 2012

57

logistics

Shipping ministry takes corrective steps after missing XI Plan target

Coal Insights Bureau

I

ndia’s shipping ministry has identified the factors resulting in non-achievement of the Eleventh Five Year Plan (200712) targets and has taken corrective steps to address the problems, an official of the ministry said.

As part of corrective measure, the ministry has standardised the bid documents like Request for Qualification (RFQ), Request for Financial Proposal (RFP) and Model Concession Agreements (MCA), the official said.

In addition, the fixation of upfront tariff for PPP projects by Tariff Authority of Major Ports (TAMP) has been done besides streamlining the procedure for granting security clearances.

Incidentally, the major ports of India could increase their handling capacity by only 185.08 million tons per annum (mtpa) during the five years of the Eleventh Plan as against the planned capacity addition of 497.05 mtpa.

58 Coal Insights, December 2012

Had the things gone as per plan, the total handling capacity of the major ports at the end of the Eleventh Plan (March 31, 2012)

should have been 1,001.80 mtpa, but actual capacity stood at only 689.83 mtpa.

Of the total 689.83 mtpa handling capacity at major ports as on March 31, 2012, the capacity of coal handling stood at 65.95 mtpa, iron ore at 79.50 mtpa, POL at 228.76 mt, fertilizer at 9.30 mtpa, general/ bulk cargo at 168.79 mtpa and containers at 137.53 mtpa.

Shipping ministry authorises four non IG Insurance cos

Meanwhile, the Ministry of Shipping, Government of India, has authorised four non-IG Insurance companies under the provision of Rule 2(e) of the Merchant Shipping (Regulation of entry of ships into ports, anchorages and offshore facilities) Rules 2012, a shipping industry source told Coal Insights.

The companies are QBE Insurance (Europe) Ltd (represented by British Marine approved for a period of 5 years with effect from December 6, 2012), Amlin Corporate Insurance N.V (represented by Raets Marine Insurance B.V approved for a period of 3 months with effect from December 6, 2012), Korea Shipping Association (KSA Hull-P&I approved for a period of 3 months with effect from December 6, 2012) and Korea Ship Owner Mutual Protection and Indemnity Association (approved for a period of 3 months with effect from December 6, 2012). 

Capacity addition plans and actuals by major ports in XI Plan in million tons

Port

Capacity (As on 01.04.2007)

Planned Capacity Addition in XIth Plan

Actual Addition in XIth Plan

Should have been as on 31.03.2012 (As per plan)

Actual capacity as on 31.03.2012

Kolkata

13.40

18.05

2.95

31.45

16.35

Haldia

43.50

19.90

7.2

63.40

50.70

Paradip

56.00

50.40

20.5

106.40

76.50

Visakhapatnam

58.50

49.65

14.43

108.15

72.93

Ennore

13.00

51.20

18

64.20

31.00

Chennai

50.00

22.30

29.72

72.30

79.72

V.O. Chidambaranar

20.55

43.43

12.79

63.98

33.34

Cochin

20.15

34.60

20.83

54.75

40.98

New Mangalore

41.30

19.20

9.67

60.50

50.97

Mormugao

30.00

36.96

11.9

66.96

41.90

Mumbai

44.65

47.26

(-)0.12

91.91

44.53

JNPT

52.40

43.20

11.6

95.60

64.00

Kandla

61.30

60.90

25.61

122.20

86.91

504.75

497.05

185.08

1001.80

689.83

Total

logistics

Railways coal handling down in November Coal Insights Bureau

T

he Indian Railways transported 40.89 million tons (mt) of coal in November 2012, lower by 1.16 percent from 41.37 mt handled in October 2012, according to information available with Coal Insights.

Railways’ revenue earnings from transportation of coal also fell to `3,085.81 crore in November from `3,130.05 crore in October.

Overall, the Indian Railways’ revenue earnings from commodity-wise freight traffic fell month-on-month in November, mainly due to lower transportation of coal and iron

Commodity-wise revenue Commodity

Quantity (in mt) Nov 2011

Earning (in ` cr)

Nov 2012

Nov 2011

Nov 2012

Coal i) for steel plants

3.94

3.47

174.01

199.87

ii) for washeries

0.11

0.1

1.29

1.53

26.05

25.79

1,782.65

2,155.80

iii) for thermal power houses iv)for public use v) Total Raw material for steel plants except iron ore

8.92

11.53

553.35

728.61

39.02

40.89

2,511.30

3,085.81

1.04

1.45

92.8

128.52

Pig iron and finished steel i) from steel plants

2.03

2.1

267.78

343.61

ii) from other points

0.59

0.73

43.36

81.65

iii) Total

2.62

2.83

311.14

425.26

0.18

0.04

49.13

10.26

Iron ore i) for export ii) for steel plants

5.23

4.92

202.74

228.06

iii) for other domestic users

2.95

3.41

207.97

251.68

iv) Total

8.36

8.37

459.84

490

Cement

9.03

7.96

570.93

629.5

Foodgrains

2.92

3.82

269.67

523.61

Fertilizers

5.26

4.38

449.59

476.18

Mineral Oil (POL)

3.47

3.34

311.75

371.33

Container Service i) Domestic containers

0.77

0.81

78.76

79.31

ii) EXIM containers

2.31

2.49

202.14

214.92

iii) Total

3.08

3.3

280.9

294.23

Balance other goods Total revenue earning traffic

6.33

5.41

443.64

460.12

81.13

81.75

5,701.56

6,884.56

ore. Revenue earnings from commodity-wise freight traffic during November 2012 stood at `6,884.56 crore, down 3.93 percent compared with `7,165.82 crore earned in October.

Revenue from transportation of iron ore for exports, steel plants and for other domestic user in October fell to `490 crore, down 6.43 percent from `523.67 crore in October. The quantity of iron ore transported fell to 8.37 mt as compared to 8.67 mt in the previous month.

Revenue from transportation of cement in November stood at `629.5 crore (7.96 mt) as compared to `712.42 crore (8.91 mt) in October, while that from foodgrains transportation increased to `523.61 crore (3.82 mt) in November from `569.17 crore (3.85 mt) in October.

The Railways revenue from transportation of fertilizers in October fell sharply to `476.18 crore (4.38 mt) from `580.98 crore (5.2mt) in October.

Revenue from transportation of petroleum oil and lubricant (POL) in November stood at `371.33 crore (3.34 mt), while the same from pig iron and finished steel from steel plants and other points was `425.26 crore (2.83 mt). Revenue from container services was `294.23 crore (3.3 mt) and from transportation of other goods was `460.12 crore (5.41mt).

Coal Insights, December 2012

59

ANNEXURE Thermal units commissioned during the last three years and in the current year Year

Sector

CENTRAL SECTOR

State

Sl. No

Project Name

Implementing Agency

Unit No.

1

Kahalgaon St.2, Ph-2

NTPC

U-7

500

31.07.09

Chhattisgarh

2

Bhilai TPP Expn

NSPCL

U-2

250

12.07.09

U-7

250

04.11.09

Jharkhand

3

Chandrapura TPS Extn.

DVC

U-8

250

31.03.10

5

NCP Project St-II

NTPC

U-5

490

29.01.10

6

Vijayawada TPP-IV

APGENCO

U-1

7

Kutch Lignite TPS Extn

GSECL

4

CENTRAL SECTOR TOTAL Andhra Pradesh

1740 500

08.10.09

U-4

75

01.10.09

GT

240

08.08.09

ST

134

10.10.09

U-1

600

31.03.10

U-2

25

10.02.10

U-2

250

27.03.10

Gujarat

8

Haryana

10

Rajiv Gandhi TPS, Hissar

11

New Parli TPP

12

Paras TPS Expn.

13

Chhabra TPS

U-1

250

30.10.09

14

Giral Lignite-II

U-2

125

06.11.09

15

Kota TPP

U-7

195

31.08.09

16

Suratgarh TPP

U-6

250

29.08.09

17

Bakershwar TPS

210

07.06.09

9

Maharashtra

Rajasthan

West Bengal

Utran CCPP Extn HPGCL MSPGCL

RRVUNL

WBPDCL

U-5

STATE SECTOR TOTAL

2854 18

2009-10

GT-1

145

03.05.09

GT-2

145

03.05.09

20

ST

174

03.05.09

21

GT-1

140

01.05.09

19 Gautami CCPP Andhra Pradesh

Konaseema GP Ltd.

GT-2

140

01.05.09

23

LancoKondapalliPh-II (GT)

LancoKondapalli

GT

233

05.12.09

24

LancoAmarkantak TPS Ph-I, U-1

LancoAmarkantak Power P Ltd.

U-1

300

04.06.09

25

LancoAmarkantak TPS Ph-1, U-2

LancoAmarkantak Power P Ltd.

U-2

300

26.03.10

Mundra TPP Ph-1

Adani Power Ltd

U-1

330

04.08.09

U-2

330

17.03.10

Sugen CCPP (Akhakhol)

Torrent Power Gen. Ltd.

Blk-II

382.5

07.05.09

Blk.III

382.5

08.06.09

Toranagallu TPP

JSW Energy (Vijayanagar) Ltd.

U-1

300

27.04.09

U-2

300

24.08.09

32

Jallipa- Kapurdi TPP

Raj West Power Ltd (JSW)

U-1

135

16.10.09

33

Rosa TPP Ph-1

Rosa Power Supply Co. Ltd, Reliance Energy

U-1

300

10.02.10

34

Budge-Budge-III

CESC

U-3

250

29.09.09

Chhattisgarh PRIVATE SECTOR

26 Gujarat

27 28 29

Karnataka

30 31

Rajasthan

West Bengal

Gautami Power Ltd

Konaseema CCPP

22

PRIVATE SECTOR TOTAL

4287

Total (2009-10) 2010-11

CENTRAL SECTOR

Actual Commissioning Date

Bihar

UP

STATE SECTOR

Capacity (Mw)

8881 Andhra Pradesh

35

Simhadri STPP Extn.

NTPC

U-3

500

31.03.11

Chattisgarh

36

Korba STPP

NTPC

U-7

500

26.12.10

60 Coal Insights, December 2012

ANNEXURE

Year

Sector

State Haryana Rajasthan

CENTRAL SECTOR

UP West Bengal

Sl. No 37

Project Name

Implementing Agency

Indira Gandhi TPP

APCPL

Barsingsar Lignite

NLC

40

NCP Project St-II

41

Farakka STPS-III

38 39

42 43

Mejia TPS Extn

Unit No.

Delhi STATE SECTOR

Gujarat

500

31.10.10

U-1

125

28.06.10

U-2

125

25.01.11

NTPC

U-6

490

30.07.10

NTPC

U-6

500

23.03.11

DVC

U-1

500

30.09.10

DVC

U-2

500

26.03.11

3740 44

Kakatiya TPP

45

Rayalseema TPP St-III

46 47 48 49

Pragati CCGT-II

APGENCO PPCL

Surat Lignite TPP Extn.

GIPCL

U-1

500

27.05.10

U-5

210

31.12.10

GT-1

250

24.10.10

GT-2

250

16.02.11

U-3

125

12.04.10

U-4

125

23.04.10

Haryana

50

Rajiv Gandhi TPS, Hissar

HPGCL

U-2

600

01.10.10

Karnataka

51

Raichur

KPCL

U-8

250

26.06.10

Rajasthan

52

Chhabra TPS

RRVUNL

U-2

250

04.05.10

Tripura

53

Baramura GT EXtn

TSECL

U-5

21

03.08.10

54

Konaseema CCPP

Konaseema Gas Power Ltd.

55

LancoKondapalliPh-II

Lanco Kondapalli

STATE SECTOR TOTAL 2010-11 Andhra Pradesh

Delhi

2581

56 57 58

Gujarat

59 60

Karnataka PRIVATE SECTOR

Rithala CCPP Mundra TPP Ph-I

NDPL Adani Power Ltd.

Mundra TPP Ph-II

ST

30.06.10

133

19.07.10

GT-1

35.75

09.12.10

GT-2

35.75

04.10.10

U-3

330

02.08.10

U-4

330

20.12.10

U-1

660

26.12.10

U-1

600

23.07.10

62

JSW Energy (Ratnagiri) Ltd

U-1

300

24.08.10

U-2

300

09.12.10

U-1

135

05.06.10

U-2

135

10.10.10

U-3

135

13.01.11

U-1

600

14.10.10

U-2

600

29.12.10

JSW Ratnagiri TPP

64 WPCL

66 67 68

Sterlite TPP

Sterlite Energy Ltd.

Rajasthan

69

Jallipa-Kapurdi TPP

Raj West Power Ltd. (JSW)

U-2

135

08.07.10

UP

70

Rosa TPP Ph-1

Rosa Power Supply Co. Ltd. Reliance Energy

U-2

300

28.06.10

PRIVATE SECTOR TOTAL

4929.5

Total (2010-11)

11250.5 Andhra Pradesh

2011-12

165

UPCL

65 WardhaWarora TPP

Orissa

ST

61 Udupi TPP 63

Maharashtra

CENTRAL SECTOR

Actual Commissioning Date

U-1

CENTRAL SECTOR TOTAL Andhra Pradesh

Capacity (Mw)

Chhattisgarh

71 72 73

Simhadri STPP Extn Sipat-I

NTPC

U-4

500

30.03.12

NTPC

U-1

660

28.06.11

NTPC

U-2

660

24.12.11

Haryana

74

Indira Gandhi TPP

APCPL

U-2

500

05.11.11

Jharkhand

75

Kodarma TPP

DVC

U-1

500

20.07.11

Coal Insights, December 2012

61

ANNEXURE

Year

Sector

CENTRAL SECTOR

State Tamil Nadu West Bengal

Sl. No

Project Name

Implementing Agency

Unit No.

Neyveli TPS PH-1

NLC

U-1

250

04.01.12

77

Vallur TPP PH-1

NTECL

U-1

500

28.03.12

U-1

500

29.07.11

500

23.03.12

78 79

Durgapur Steel TPS

DVC

U-2

4570

Andhra Pradesh

80

Kothagudem TPP-VI

APGENCO

U-1

500

26.06.11

Assam

81

Lakwa Waste Heat Unit

APGCL

ST

37.2

24.12.11

Delhi

82

Pragati CCGT-III

PPCL

Gujarat

83

Hazira CCPP Extn

GSECL

Karnataka

84

Bellary TPP St-II

KPCL

85 Maharashtra

86

Bhusawal TPS Expn.

MSPGCL

ST-1

250

29.02.12

GT+ST

351

18.02.12

U-2

500

23.03.12

U-4

500

07.03.12

U-5

500

30.03.12

U-5

500

05.08.11

87

Khaperkheda TPS Expn.

UP

88

Harduaganj Ext

UPRVUNL

U-8

250

27.09.11

West Bengal

89

Santaldih TPP ExtnPh-II

WBPDCL

U-6

250

29.06.11

90

Simhapuri Energy P. Ltd Ph-I

Madhucon Projects Ltd

U-1

150

24.03.12

91

Kasaipalli TPP

ACB India Ltd.

U-1

135

13.12.11

92

Katghora TPP

Vandana Energy & Steel

U-1

35

14.02.12

93

SV Power TPP

SV Power Pvt. Ltd.

U-1

63

07.12.11

94

Rithala CCPP

NDPL

ST

36.5

04.09.11

95

Mundra TPP Ph-II

U-2

660

20.07.11

U-1

660

07.11.11

U-2

660

03.03.12

STATE SECTOR TOTAL Andhra Pradesh Chhatisgarh Delhi 2011-12

3638.2

96 Gujarat

97

Haryana Jharkhand Karnataka

Adani Power Ltd.

U-3

660

09.03.12

Mundra UMTPP

Tata Power Co.

U-1

800

25.02.12

100

Salaya TPP

Essar Power Gujarat Ltd.

U-1

600

22.02.12

101

Jajjar TPP (Mahatama Gandhi TPP)

CLP Power India Pvt. Ltd.

U-1

660

12.01.12

Maithon RB TPP

DVC

U-1

525

30.06.11

U-2

525

23.03.12

102 103

104 Udupi TPP

UPCL

U-2

600

17.04.11

105

JSW Energy (Ratnagiri) Ltd.

U-3

300

06.05.11

U-4

300

08.10.11

107

U-1

61.5

09.12.12

108

U-2

61.5

09.02.12

U-3

61.5

09.02.12

U-4

61.5

09.02.12

106 Maharashtra

Mundra TPP Ph-III

98 99

PRIVATE SECTOR

Actual Commissioning Date

76

CENTRAL SECTOR TOTAL

STATE SECTOR

Capacity (Mw)

109

JSW Ratnagiri TPP

Mihan TPS

Abhijeet MADC Nagpur Energy P Ltd

110 Orissa Rajasthan UP

62 Coal Insights, December 2012

111

WardhaWarora TPP

WPCL

U-4

135

30.04.11

112

Sterlite TPP

Sterlite Energy Ltd.

U-3

600

16.08.11

Jallipa-Kapurdi TPP

Raj West Power Ltd. (JSW)

U-3

135

02.11.11

U-4

135

23.11.11

Anpara-C

LancoAnpara Power Pvt Ltd.

U-1

600

15.11.11

U-2

600

12.11.11

113 114 115 116

ANNEXURE

Year

Sector

State

Sl. No 117 118 119 120 121

2011-12

PRIVATE SECTOR

UP

122 123 124 125 126 127 128

Project Name Barkhera TPP

Implementing Agency Bajaj Energy Pvt. Ltd.

Khamberkhera TPP

Bajaj Energy Pvt. Ltd.

Kundarki TPP

Bajaj Energy Pvt. Ltd.

Maqsoodpur TPP

Bajaj Energy Pvt. Ltd.

Rosa TPP Ph-II

Reliance Power Ltd.

Utrala TPP

Bajaj Energy Pvt. Ltd.

Unit No.

45

06.11.11

U-2

45

28.01.12

U-1

45

17.10.11

U-2

45

28.11.11

U-1

45

10.01.12

U-2

45

29.02.12

U-1

45

03.11.11

U-2

45

21.01.12

U-3

300

27.12.11

U-4

300

28.03.12

U-1

45

21.02.12

45

19.03.12

U-2

10870.5

Total (2011-12)

19078.7 Chhattisgarh

129

Sipat-I

NTPC

U-3

660

02.06.12

Haryana

130

Indira Gandhi TPP

APCPL

U-3

500

07.11.12

Maharashtra

131

Mouda TPP

NTPC

U-1

500

19.04.12

Madhya Pradesh

132

Vindhyachal TPP-IV

NTPC

U-11

500

14.06.12

UP

133

Rihand TPP-III

NTPC

U-5

500

25.05.12

CENTRAL SECTOR TOTAL

STATE SECTOR

2660

Delhi

134

Pragati CCGT-III

PPCL

GT-3

250

27.06.12

Tamil Nadu

135

Mettur TPP Ext

TNEB

U-1

600

11.10.12

136

Harduaganj Ext

UPRVUNL

U-9

250

25.05.12

137

ParichhaExtn

U-5

250

25.05.12

UP STATE SECTOR TOTAL

1350 Simhapur Energy Pvt. Ltd. Ph-I

Madhucon Projects Ltd.

U-2

150

02.07.12

139

Thamminapatnam TPP-I

Meenakshi Energy Pvt. Ltd.

U-1

150

09.09.12

140

Kasaipalli TPP

ACB India Ltd.

U-2

135

21.06.12

Mundra UMTPP

Tata Power Co.

U-2

800

25.07.12

U-3

800

16.10.12

143

Salaya TPP

Essar Power Gujarat Ltd.

U-2

600

13.06.12

Haryana

144

Jajjar TPP (Mahatama Gandhi TPP)

CLP Power India Pvt. Ltd.

U-2

660

11.04.12

Jharkhand

145

Adhunik Power TPP

Adhunik Power Co. Ltd.

U-1

270

19.11.12

Butibori TPP Ph-II

Vidarbha Industries Power

U-1

300

17.08.12

GEPL TPP

GEPL

U-1

60

09.08.12

U-2

60

28.04.12

Tirora TPP PH-I

Adani Power Ltd.

U-1

660

11.09.12

U-1

250

11.08.12

U-4

600

26.04.12

138 Andhra Pradesh 2012-13 (AS ON 21.11.2012)

Chhattisgarh

141 Gujarat

PRIVATE SECTOR

Actual Commissioning Date

U-1

PRIVATE SECTOR TOTAL

CENTRAL SECTOR

Capacity (Mw)

142

146 Maharashtra

147 148 149

MP

150

Bina TPP

Bina Power Supply Co. Ltd.

Orissa

151

Sterlite TPP

Sterlite Energy Ltd.

PRIVATE SECTOR TOTAL Total (2012-13) Total

64 Coal Insights, December 2012

5495 9505 48715.2

E-AUCTION Monthly data of offered quantity through coaljunction Qty. In Tons and MSTC (road & rail) Month

Offered by road 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

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

Monthwise quantity offered & sold through coaljunction & MSTC e-auction Month

Offered by rail 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

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

Monthly data of offered quantity through coaljunction & MSTC (road & rail)

Quantity in Tons

3,000,000 2,000,000

6,000,000 5,000,000 4,000,000 3,000,000

10.69%

NEC RAIL SECL ROAD

-

-

-

-

NA

NA

151,000

151,000

136,000

136,000

11.03%

11.03%

-

-

-

-

NA

NA

12,000

12,000

-

-

NA

NA

-

-

-

-

NA

NA

730,050

683,550

702,300

649,850

3.95%

5.19%

SECL RAIL

-

-

47,436

47,436

NA

NA

ECL ROAD

124,370

123,555

46,780

46,780

165.86%

164.12%

ECL RAIL

183,018

183,018

112,926

112,926

62.07%

62.07%

WCL ROAD

375,000

328,215

295,400

263,180

26.95%

24.71%

-

-

-

-

NA

NA

171,000

170,554

147,000

131,551

16.33%

29.65%

WCL RAIL SCCL ROAD SCCL RAIL

-

-

-

-

NA

NA

CCL ROAD

217,300

212,200

518,750

505,670

-58.11%

-58.04%

CCL RAIL

38,000

38,000

57,000

57,000

-33.33%

-33.33%

3,550,650

3,177,658

3,451,848

3,091,583

2.86%

2.78%

Oct'12

Sep'12

Aug'12

July'12

June'12

May'12

Apr'12

Mar'12

1,000,000

750,000

500,000

250,000

0

CCL RAIL

17.50%

CCL ROAD

923,890

SCCL RAIL

1,000,000

WCL RAIL

1,022,610

SCCL ROAD

1,175,000

WCL ROAD

MCL ROAD

ECL RAIL

100.00%

ECL ROAD

12.77%

100.00%

SECL RAIL

-5.85%

0

SECL ROAD

217,300

7,906

NEC RAIL

380,350

7,906

NEC ROAD

245,050

15,812

NCL RAIL

358,100

BCCL RAIL

NEC ROAD

Feb'12

Sold qty

NCL ROAD

Offered qty

BCCL ROAD

NCL RAIL

Jan'12

1,250,000

Variation (in percent) Qty sold

MCL RAIL

Qty offered

BCCL RAIL

Sep ’12 Qty sold

SOLD QTY (in tons)

Companywise quantity offered & sold through coaljunction & MSTC in Oct ’12 vs Sept ’12

Quantity In Tons

Oct ’12

Dec'11

OFFERED QTY (in tons)

Companywise quantity offered & sold through coaljunction & MSTC in Oct ’12 vs Sept’12 via rail & road Qty. in tons Qty offered

Nov'11

Oct'12

Sept'12

Aug'12

July'12

June'12

OFFERED BY RAIL

MCL ROAD

OFFERED BY ROAD

May'12

Apr'12

Mar'12

Feb'12

Nov'11

Jan'12

0

Dec'11

0

Oct'11

1,000,000

Oct'11

2,000,000

1,000,000

BCCL ROAD

Qty Offered In Tons

4,000,000

NCL ROAD

Qty. In Tons

Variation (in percent) -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%

7,000,000

5,000,000

MCL RAIL

Sold quantity (in tons) 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

Quantity offered & sold through coaljunction & MSTC

8,000,000

6,000,000

TOTAL

Offered quantity (in tons) 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

Com panies Oct'12 QTY OFFERED

Oct'12 QTY SOLD

Sep'12 QTY OFFERED

Sep'12 QTY SOLD

Note: Data for the period Jan ’11 - Dec ’11 and Feb ’12 is for e-auction through coaljuntion only, while data for Jan ’12 and Mar ’12 - Oct ’12 includes data of MSTC

66 Coal Insights, December 2012

port data Major ports through which Coking Coal arrived in India Aug 2012 - Oct 2012 Port

Qty (in Tons)

VIZAG

1,655,006

MORMUGAO KOLKATA

Port

Major coking coal supplier countries to India (through mentioned ports) Aug 2012 - Oct 2012 Country of Origin

Qty (in Tons)

Qty (in Tons)

AUSTRALIA

5,097,100

1,579,831

NEW MANGALORE

71,033

UNITED STATES

915,368

1,285,080

KANDLA

63,000

SOUTH AFRICA

229,968

GANGAVARAM

997,411

ENNORE

21,441

NEW ZEALAND

163,167

PARADIP

830,756

CHENNAI

MUNDRA

384,351

Grand Total

245 6,888,154

Major ports through which coking coal arrived in India Aug 2012 - Oct 2012 5.6%1.0%

12.1%

0.9% 0.3% 0.0%

OTHERS

482,549

Grand Total

6,888,154

Major coking coal supplier countries to India (through mentioned ports) Aug 2012 - Oct 2012 3%

24.0%

2%

7%

13% 14.5% 22.9%

18.7% VIZAG KOLKATA PARADIP NEW MANGALORE ENNORE

75%

MORMUGAO GANGAVARAM MUNDRA KANDLA CHENNAI

AUSTRALIA NEW ZEALAND

Major ports through which steam coal arrived in India Aug 2012 - Oct 2012 Port

Qty (in Tons)

Port

UNITED STATES OTHERS

SOUTH AFRICA

Major steam coal supplier countries to India (through mentioned ports) Aug 2012 - Oct 2012 Country of Origin

Qty (in Tons)

Qty (in Tons)

PARADIP

2,761,705

KANDLA

926,561

INDONESIA

MUNDRA

2,627,330

MUMBAI

915,286

SOUTH AFRICA

GANGAVARAM

817,471

AUSTRALIA

234,305

MORMUGAO

407,508

UNITED STATES

170,566

172,017

OTHERS

294,361

NEW MANGALORE

1,201,549

ENNORE

1,133,185

VIZAG

998,115

KOLKATA Grand Total

11,960,727

Major ports through which steam coal arrived in India Aug 2012 - Oct 2012 3.4% 7.7%

6.8%

1.4%

1,987,932

11,960,727

Major steam coal supplier countries to India (through mentioned ports) Aug 2012 - Oct 2012 1.4%

23.1%

7.7%

2.0%

2.5%

16.6%

22.0%

8.3% 9.5% PARADIP ENNORE MUMBAI KOLKATA

Grand Total

9,273,563

10.0% MUNDRA VIZAG GANGAVARAM

NEW MANGALORE KANDLA MORMUGAO

77.5% INDONESIA UNITED STATES

SOUTH AFRICA OTHERS

AUSTRALIA

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, December 2012

Tear along the dotted line

70 Coal Insights, November 2012 Tear along the dotted line