Coal Insights - May 2012 by mjunction services ltd

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, Head – 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, Managing Director, Haldia Petrochemicals Ltd S N Choubey, Head – Commercial, ABG Cement Ltd Sandeep Kumar, Managing Director, S & T Mining Co Pvt 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, Ishawer Kumar Sriwastva, Sobhan Jas For suggestions, feedback and queries, please write to coalinsights@mjunction.in

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EDITORIAL

Dear Readers, The summer temperature is soaring to hit the Indian cities; but a cloud of gloom is hovering over the capital. The big news at the moment is Rupee’s dramatic fall against the US Dollar. As per the latest news, Rupee has fallen to the level of $56. The doomsday conspiracy has it that Rupee may slip further…and further, courtesy the country’s huge current account deficit and issues with its fiscal health. Some say the currency may retire at $60; others predict a permanent settlement at $70 by 2014. The Reserve Bank of India (RBI) is watching; not intervening much. All that the governor has sounded out so far is that a separate dollar window for oil marketing companies is “not ruled out”. How far it will control Rupee’s depreciation is to be seen. If not anything else, the apex bank should come out and give a positive sentiment indication to the market. The weakness in Rupee has taken its toll, as expected, in the country’s huge oil import bill; in turn leading to a substantial hike in petrol prices. Inflationary pressure is round the corner. All these, at a time when the global equity markets are paving way for a phase of correction, have hit sentiment at the bourses. And another bout of slowdown is feared by the man on the street. It is interesting to note how the coal ministry timed its proposal for a sovereign fund for overseas coal mine acquisitions. Any substantial forex outgo should be the last thing in mind of RBI right now. If there is no immediate respite from the external front, this fund proposal may meet the same fate as the one mooted earlier. In the domestic sector, there is quite a chaos over coal. After much dilly-dally, Coal India Ltd (CIL) has started signed fuel supply agreements. Even then, the resentments and apprehensions are palpable. The falling currency has deferred buying decisions by some power utilities, including NTPC. Other segments are to follow suit. But how long? At this juncture, Coal Insights brings to you a report on saving the dry fuel by adopting best practices and new technology applications. Indian industry consumes nearly one-third of the country’s primary energy consumption. Isn’t it high time the industry realised the value of coal and the importance of using the fuel with utmost efficiency? Coal is here to say. At least another 30 to 40 years, all market intelligence shows, coal would be the dominant energy source for the global economy. India, which lacked any say in crude trade, has a large reserve and is also one of the largest importers of coal. Why not use this dominant position to your advantage? Happy reading,

(Rakesh Dubey)

Contents

06 | Cover Story

Fuel efficiency the best approach In the absence of alternative fuels, the Indian industry must embrace efficient processes to reduce their coal consumption.

28 | FEature

India’s proven coal reserves at 118 bn tons: GSI Latest estimate increases total coal reserves to 293 bn tons, lignite reserves to 41.9 bn tons.

41 | Feature

57 56.5 56 55.5

Coal importers defer purchases as Rupee depreciates

Rs/USD

55 54.5 54 53.5 53 52.5

01 2

5/2 /0

5/2 /0 24

5/2 /0

5/2 /0 22

5/2

/0 21

01 2

5/2

/0 16

01 2 /0 15

01 /2

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/5 10

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01 /2

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4/5

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01 /2

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2/5

4/2

/0 27

4/2 /0 26

4/2

01 2

If the currency’s weakness continues, coal users may suffer from production loss or higher raw material bill.

50 | Interview

Beneficiation is the key to future coal use in India Gurudas Mustafi, CEO, MBE CMT India, stresses on the potential of washery business in the country.

COAL INSIGHTS 4 may 2012

22 Thermal coal import prices ease in May 24 Coking coal prices witness mixed trend in May 31 Govt mulls sovereign fund, CIL subsidiary in SA 33 MoC issues showcause notices to 58 captive blocks 36 Bring coking coal under steel ministry: Verma 37 Coal producing states demand 20% royalty 39 CIL’s new R&R policy to benefit project oustees: Jaiswal 40 CRISIL emerges lowest bidder for coal consultancy 42 India’s April power generation exceeds target 46 India’s cement production up nearly 6.3% in FY12 47 Sponge iron production falls in FY12 48 Tar injection: The answer to met coke crisis 54 Coal consuming industries show mixed results in FY12 58 BCCL advances date for revival 60 SCCL production growth slackening, aims 53 mt in FY13 62 CIL must own coal berths for import of coal 64 US coal consumption, production to decline in 2012: EIA 66 SA miners expect higher coal import by India in Q2 67 China all set to hike coal imports 68 Traffic handling by major ports down 6.3% in April 69 Indian Railways commodity wise freight revenue fall m-o-m in April 70 Power sector update 84 CIL’s sale via e-auction sharply up in FY12 85 Port data

Cover Story

Reducing coal consumption

ch pproa st a be

e l f e f i u c F i e ncy t he

Arindam Bandyopadhyay

Cover Story

“T

he Stone Age,” said Sheikh Zaki Yamani, “did not end because we ran out of stones, and the Oil Age will end long before the world runs out of oil”. This famous quote from the former Saudi oil minister (1962-86) appeared around 40 years ago, during the first oil shock, circa 1973. Within a decade (1980s), the citation became a popular catch-line for the ‘greens’. It was quoted by The Economist in 2003. Al Gore used these magic words in 2006 to warn the world of things to come. As we near the middle of 2012, the mankind is yet to find something better than oil, or for that matter, all carbon-based fossil fuels, including coal and gas…! The share of oil, as of 2010, was still a high 33 percent. The crude, along with the other variants of fossil fuels, accounted for 87 percent of the world’s energy consumption, while hydro, renewables and nuclear together powered around 13 percent. After four decades of frantic search for an alternative, the world remains helplessly dependent on conventional fuels which are fast depleting. So much so, that if the fossil fuels are burnt out today, only one-tenth of the world or an area equal to the US and Canada (area-wise) will be lit tomorrow, and the rest of the world will plunge into darkness. Consumption-wise, not even the whole of the US will meet their energy needs of the day. Share of fuel types in global energy matrix 1.80%

5.70%

6.50%

33%

oil coal gas hydro

24%

Non-hydro renewables nuclear

Future share of fuel types in US

Source: EIA

Within the fossil fuel basket, however, there is a perceptible shift from crude to coal. The shares of these resources had a 3 to 4 percent swing, in favour of the dry fuel, over the last five years. This, in fact, is a regression that neither Yamani, nor the greens did imagine. A shift from oil to coal was not what Gore meant. Nonetheless, coal may be apparently abundant but is definitely not inexhaustible. Standing at the present juncture, if the planet has to live more than 118 years – the present life of coal as per World Coal Association (WCA) estimate – the best way to sustenance is to reduce its consumption. But sacrificing growth, especially in China and India which are driving the world economy, would be summarily suicidal. That leaves the world with one option – doing more with less. Until, of course, something better than coal comes up…! The India angle

29%

Fast forward to 2030…! Now let us see what the global energy projections have to say. “Global energy demand,” says BP Energy Outlook 2030*, “is likely to grow by 39 percent by 2030, or 1.6 percent annually, almost entirely in non-OECD countries….Global energy will remain dominated by fossil fuels, which are forecast to account for 81 percent of global energy demand by 2030.” The BP estimate goes in tandem with projections made by US Energy Information Administration (EIA), International Energy Agency (IEA) and even individual country reports. This, despite the “tremendous growth” in renewables, is the future of energy consumption in a “hot, flat and crowded” * Published in January 2011

planet. Even the US, a frontrunner in the field of renewables, is estimated to meet 78 percent of its energy needs from the conventional sources in 2030. Apparently, there is no escape from the world’s addiction to fossil fuels. These are things that cannot be changed at will, without an accident, the estimates show.

For decades together, until 1990, the most important source of power in India, as the westerners saw it, was will power. With 15 percent of the world’s population, the economy ran on minimal resources. No wonder, India ranked at the bottom of the table in terms of per capital consumption of energy. And it still does! But things have changed dramatically after liberalisation. Post 1990, India’s biggest burden – its population – became its biggest strength, a huge market for the stagnant developed world. The increasing appetite of Chinese and Indian consumers put a strain on the supply basket. Despite the low per capita figure, these two economies currently account for nearly one-quarter of the world’s energy demand. This growing appetite, while fueling the domestic economic growth, has made them more vulnerable to any impending shock on the global energy front.

COAL INSIGHTS 8 may 2012

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Cover Story According to BP Energy forecast, the increasing energy demand from emerging countries would result in higher and higher oil import at increased prices. “By 2030 today’s energy importers will need to import 40 percent more than they do today,” the report says. For countries like India, this will translate into increased oil import bill, higher forex outgo and inflationary pressure on the economy. Higher inflation in turn attracts punitive measures like increased interest rates, which reduces investment flows and leads to slowdown. In brief, the over-dependence on imported crude alone could mar India’s growth story. India’s energy consumption, 2009 2% 2%

Oil

24% 23%

Natural gas Coal 7%

Hydro and combustible renewables Nuclear

42%

Other renewables

Source: IEA

But there is more to energy than crude. Although India is a poor second to China as far as energy consumption is concerned – accounting for one-fourth of Chinese demand – the country is a major player in the field of coal, being the third largest producer and importer with fourth largest reserves. Unlike the world at large, coal holds the pride of place in India’s energy-mix. Compared to its 29 percent in the world, coal accounts for 42 percent of India’s energy basket, much high than crude’s 24 percent share. Instead of remaining exposed to oil price spikes, the country could, with a little planning and execution, very well build on its ‘coal economy’, making full use of indigenous resources, upgrading coal quality through beneficiation, curtailing unnecessary imports (which again leads to forex outgo) and gaining efficiency through new technology adoption and innovation. In the oil age, India had hardly any impact on the market, either as a buyer or seller of the commodity. As crude loses its pride of place to coal, India may become a major influence. There is no point why this position would not be exploited to its advantage.

to meet demand is raising the raw material cost and putting pressure on prices or margins, as the case may be. In recent past, imports have increased by leaps and bounds. Already, India is importing around 120 million tons (mt) of coal per annum. The quantity is expected to jump to 250 mt by the end of the Twelfth Plan (2016-17). That imports are not in the best interest of the domestic industry is understood by all and sundry – the miners, industry and the government. But to maintain the growth in power and other core sectors, the government argues, it does not have much option. Remarkable as it may sound, but the industry actually differs with the government’s view. Of late, a number of industry leaders, all belonging to coal consuming industries, are raising their voices about a better alternative, ie increasing fuel efficiency. “It is always better to focus on reducing fuel consumption by increasing efficiency than going out of the way to somehow meet that additional requirement,” said a top official of a leading cement manufacturer. “Unfortunately, not many people in the industry is embracing this approach,” he complained. The benefits of this “better” approach, he said, could be manifold. “You can conserve precious resources, avoid pollution, stop unnecessary expenditure, improve margins, and reduce forex outgo. All in all, by doing this you help the economy to do more with less.” For instance, he said, the power ministry had recently announced it has achieved avoidable capacity generation to the tune of 15,000 MW. This has not only reduced capital expenditure, but stopped the need to import coal for feeding this additional capacity for the next 20 years. Energy consumption by India, 1980-2030

A penny saved The stupendous growth in India’s electricity generation, which forms the basis of all industrial activity, has seemingly unsettled the coal fraternity. The power sector alone makes up 65 percent of India’s coal consumption. Steel, cement, sponge iron, pharmaceuticals and paper are the other major consumers of the fuel. On one hand, the production hurdles in the form of environmental clearance and land acquisition is restricting production growth. On the other hand, increased imports

Source: USAID, Form Ideas to Action: Clean Energy Solutions for Asia to Address Climate Change, India Country Report

COAL INSIGHTS 10 may 2012

Cover Story Global marketed energy consumption by source in 2004 and projected for 2030 Quadrillion Btu

Note: Fig. does not include traditional biomass

Source: EIA, 2007

The initial cost of adopting a new technology, the official said, is worth the investment if it reduces such recurring costs to a significant extent. “But in most of the cases, it is not about investment, but a mental block that prevents the companies from trying out new things….it is high time we changed our mindsets and take a mature, long-term view.” Given that industry accounts for around one-third of India’s primary energy consumption, such a proactive approach towards change, if it catches the fancy, would help not only the industry but improve the country’s overall economic health.

by drilling two wells from the surface, one to supply air/ oxygen, another well to produce syn-gas to the surface. Apart from syn-gas, by-products are hydrocarbon liquids, ammonia, among others. According to experts, UCG could be the only way to exploit India’s huge deposit of coal that lies below mineable depths. To go by a study by the Central Institute of Mining and Fuel Research (CIMFR), the coal deposits lying below the mineable depth of 600 metres may be nearly as voluminous as the deposits lying above the mineable depth. Beneficiation: Washing of coal, in short, does not only help maximise the recovery of clean coal, but allows for higher mine mechanisation, thus improving production. It also helps to utilise mines having inferior grade coal and boost overall production, thus resulting in less dependence on imports. Currently, there is a shortfall in washing capacity of around 150 mtpa. Considering the environment ministry’s (MoEF) directives on use of washed coal in thermal power plants (TPPs) and growth in thermal power generation, requirement for washed coal is expected to increase substantially in coming years. An estimate shows the gap between washed coal production and requirement would increase to more than 270 mt by 2025. Installed capacities of washeries operating in India Washery operators

Non-coking coal Nos.

CIL

Capacity

Coking coal Nos.

Total

Capacity

21.22

19.68

40.9

Non-CIL

75.10

10.01

85.11

Total

96.32

29.69

126.01

New processes

Note: As of March 2010

The industries in the developed economies have long been trying out ways to achieve further efficient processes. India like other emerging nations has been a laggard in this respect. Low R&D focus has been a major shortcoming for the private sector, while lack of quality consciousness has proved the undoing of the public sector. But necessity, in India, is the mother of all bold decisions. In the face of impending crises, the domestic industry has often stood up to the challenges and shed their inhibitions. In the coal sector too, the production hurdles have encouraged the user segments to explore new options, technologies and innovations. New methods like underground coal gasification (UCG), coal to liquid (CTL), Integrated Gasification Combined Cycle (IGCC), biomass co-firing and coal tar injections in blast furnaces are being tried out by the user segments. Not all the technologies have been an instant hit, but then the refinement process is on and the industry is confident of pulling it off.

Source: Ministry of Coal, Energy Statistics 2011

UCG: Underground coal gasification is the partial combustion of coal lying below to produce a combustible gas known as syn-gas for use as an energy source. It is achieved

Nos.

Case Study

Tata Sponge Iron Ltd

Tata Sponge Iron, a leading sponge iron maker in India, has initiated certain actions to optimise coal consumption in the rotary kiln operation. To achieve optimum level of coal consumption, the company is trying to optimise the following: ♦♦ Carbon to iron ratio ♦♦ Increase campaign life of rotary kiln by which unnecessary burning of coal during start-ups can be avoided ♦♦ Dispose coal fines (rejects) directly from the bunkers ♦♦ Operate WHRBs at its optimum level The above mentioned steps are in the direction of operational efficiency enhancement without incurring major capital expenditures. However, as such, cost-benefit analysis has not been carried out, according to company sources.

COAL INSIGHTS 12 may 2012

Cover Story Fluidised Bed Combustion: Fluidised Bed Combustion (FBC) is a very flexible method of electricity production – most combustible material can be burnt including coal, biomass and general waste. FBC systems improve the environmental impact of coal-based electricity, reducing SOx and NOx emissions by 90 percent. In fluidised bed combustion, coal is burned in a reactor comprising a bed through which gas is fed to keep the fuel in a turbulent state. This improves combustion, heat transfer and recovery of waste products. The higher heat exchanger efficiencies and better mixing of FBC systems allows them to operate at lower temperatures than conventional pulverised coal combustion (PCC) systems. By elevating pressures within a bed, a high-pressure gas stream can be used to drive a gas turbine, generating electricity. FBC systems fit into two groups, non-pressurised systems (FBC) and pressurised systems (PFBC), and two subgroups, circulating or bubbling fluidised bed. ♦♦ Non-pressurised FBC systems operate at atmospheric pressure and are the most widely applied type of FBC. They have efficiencies similar to PCC – 30-40 percent ♦♦ Pressurised FBC systems operate at elevated pressures and produce a high-pressure gas stream that can drive a gas turbine, creating a more efficient combined cycle system – over 40 percent ♦♦ Bubbling uses a low fluidising velocity – so that the particles are held mainly in a bed – and is generally used with small plants offering a non-pressurised efficiency of around 30 percent ♦♦ Circulating uses a higher fluidising velocity – so the particles are constantly held in the flue gases – and are used for much larger plant offering efficiency of over 40 percent

The flexibility of FBC systems allows them to utilise abandoned coal waste that previously would not be used due to its poor quality. Supercritical & Ultrasupercritical Technology: New pulverised coal combustion systems – utilising supercritical and ultra-supercritical technology – operate at increasingly higher temperatures and pressures and therefore achieve higher efficiencies than conventional PCC units and significant CO2 reductions. Supercritical steam cycle technology has been used for decades and is becoming the system of choice for new commercial coal-fired plants in many countries. Research and development is under way for ultrasupercritical units operating at even higher efficiencies, potentially up to around 50 percent. The introduction of ultra-supercritical technology has been driven over recent years in countries such as Denmark, Germany and Japan, in order to achieve improved plant efficiencies and reduce fuel costs. Research is focusing on the development of new steels for boiler tubes and on high alloy steels that minimise corrosion. These developments are expected to result in a dramatic increase in the number of SC plants and USC units installed over coming years. Integrated Gasification Combined Cycle (IGCC): An alternative to achieving efficiency improvements in conventional pulverised coal-fired power stations is through the use of gasification technology. IGCC plants use a gasifier to convert coal (or other carbon-based materials) to syngas, which drives a combined cycle turbine. Coal is combined with oxygen and steam in the gasifier to produce the syngas, which is mainly H2 and carbon monoxide (CO). The gas is then cleaned to remove impurities, such as sulphur, and the syngas is used in a gas turbine to produce electricity. Waste heat from the gas turbine is recovered to create steam which drives a steam turbine, producing more electricity – hence a combined cycle system. By adding a ‘shift’ reaction, additional hydrogen can be produced and the CO can be converted to CO2 which can then be captured and stored. IGCC efficiencies typically reach the mid-40s, although plant designs offering around 50 percent efficiencies are achievable. Reliability and availability have been challenges facing IGCC development and commercialisation. Cost has also been an issue for the wider uptake of IGCC as they have been significantly more expensive than conventional coal-fired plant. Gasification may also be one of the best ways to produce clean-burning hydrogen for

COAL INSIGHTS 14 may 2012

Cover Story

Case Study

Saurashtra Cement Limited

Saurashtra Cement Limited, one of the leading cement manufacturing companies of India, took a number of initiatives in order to conserve energy. During the period of review 19992002, about 35-40 energy saving ideas were generated by continuous brain storming sessions, root cause analysis, Fish Bone analysis etc. Out of this, 25 ideas were implemented. Achievement ♦♦ Increase in Area of Riser Duct ♦♦ Kiln Feed Hood Modifications ♦♦ I ncrease in Height of Flash Furnace Calciner Vessel by 1m. to increase the retention time of coal burning ♦♦ R aw Mill Modified Version LNV Classifier Installed to save power, increase output & better control over quality. Source: Bureau of Energy Efficiency

tomorrow’s cars and power-generating fuel cells. Hydrogen and other coal gases can be used to fuel power-generating turbines, or as the chemical building blocks for a wide range of commercial products, including diesel and other transport fuels. Biomass co-firing: Biomass co-firing has proven to be a simple and effective option for carbon abatement technology which can give direct and immediate results. This is a lowcost option for efficiently converting biomass to electricity by adding biomass as a partial substitute fuel in highefficiency coal boilers. There is little or no loss in total boiler efficiency after adjusting combustion output for the new fuel mixture. Biomass combustion efficiency to electricity would be close to 33-37 percent when co-fired with coal. Extensive demonstration and tests have confirmed that biomass energy can provide as much as 15 percent of the total energy input with only feed intake system and burner modifications. Cofiring biomass with coal offers several environmental benefits such as reduced emission of carbon dioxide and sulphurous gases and oxides of nitrogen. BEE initiatives While the industry had been striving to embrace new concepts to achieve fuel efficiency, the Indian government did its bit by setting up the Bureau of Energy Efficiency (BEE) in 2002 under the provision of the Energy Conservation Act, 2001. The mission of BEE is to assist in developing policies and strategies with a thrust on self-regulation and market principles, within the overall framework of the Energy Conservation Act. Its primary objective is to reduce energy intensity of the Indian economy. This would be achieved through active participation of all stakeholders and result in accelerated and sustained adoption of energy efficiency in all sectors.

Amitabh Mudgal, Sr. V.P, Marketing & Corporate Affairs, Monnet Ispat & Energy Limited

ith rapidly depleting global coal stock reserves, the coal consuming sectors are inclined towards adopting alternate ways to ensure their survival. For the sponge iron industry, sustaining uninterrupted production by reduction of coal usage seems to be the biggest challenge in the current times. In a candid conversation with Coal Insights, senior vice-president, marketing & corporate affairs, Monnet Ispat & Energy Limited, Amitabh Mudgal, discusses the company’s approach regarding this. Excerpts: As coal supply issues are showing up, coal consumers in India are looking for more and more imports, but not so much on reducing coal use at their plants by increasing fuel efficiency. What is your view on this? Yes, there is an acute shortage of coal, and all predictions of five or six years ago are coming true. The sponge iron industry can be divided into two categories. The ones with proven/established technologies like lurgi/Jindal and HYL/Midrex are using fuel efficient equipment and technology. The consumption of fuel in plants with above technology is well optimised. No other significant improvement worth mentioning has taken place. Perhaps this is the bare minimum carbon requirement

COAL INSIGHTS 16 may 2012

Cover Story

Open up the coal sector: Amitabh Mudgal Sanjukta Ganguly to reduce Fe oxide. At the present juncture, when the sponge iron industry is struggling to meet the daily requirement of their plant, it is difficult to concentrate on fuel efficiency. Quality of fuel is also a big concern. Coal being supplied to DRI producers is of ‘F’ grade instead of ‘D’ grade. The Bureau of Energy Efficiency has recently come out with a suggestion that will be effective from April 2012 to March 2015 for increasing efficiency of coal by all section of consumers. What is your view on these schemes? The Bureau of Energy Efficiency (BEE) scheme is a welcome step in the direction of cost effectiveness and improvements in energy efficiency. It will give some motivation to the industry to look for alternatives for increasing efficiency which will be rewarded in the form of PAT (Perform Achievement Trade) and direct saving of cost of course. The practicality of the implementation needs to be evaluated from the level of benchmark BEE had made during audit of each industry. If the benchmarks are at a level which shows some excessiveness, then to bring down the consumption will be practical and economical too. This will be judged at the implementation time. Has your company taken any significant step to increase fuel efficiency recently? If yes, please elaborate. Also, please give an account of the cost-benefit analysis involved with the process. Yes, we already have taken this seriously and are working with Ernst & Young for mapping our total carbon requirement and to develop a roadmap for us to reduce our coal consumption and in turn save on cost. As per rough estimates, the targets which we have been given will result in an opportunity cost of approximately `59

crore until 2021 (all the three cycles of PAT) if MIEL makes no investment in energy efficiency and plant expansion and meets PAT targets only through purchase of ESCerts, which is a significant amount. The sponge iron industry is grossly blamed for their perceived role in increasing pollution because of the way they burn their coal and general lack of apathy to install or run effluent treatment plants. What should be the way forward to change this perception? In the past also, I have categorically stated that pollution by any industry should be strictly discouraged. The general lack of apathy should be strictly dealt with and penalised to discourage the industry from creating pollution. It will be incorrect again to paint the entire industry with the same brush; this problem is more rampant in the small unorganised sector of the industry. We, even at the association level, are very strict and are advising and guiding our members to install pollution control equipment and be sensitive to the environment. As a responsible corporate, Monnet is doing its bit in saving our planet from global warming. The company’s Raipur power plant has been registered with United Nations Framework convention on Climate Change (UNFCCC) under the Kyoto Protocol and consequent thereto; the company is able to sell certified Emission Reduction (CERs) units. While talking on the subject on coal availability, 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. We must encourage captive coal producers to produce more and allow them interchangeability of end use. There are captive coal producers which can possibly produce more than the requirement of their specific end use plant, but cannot do so because the current policy regime does not allow them to sell coal and/or alternatively use it in any other end use plant. In some cases even these producers are bound to import coal to meet the requirement of their other end use. 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.

COAL INSIGHTS 17 may 2012

Cover Story

Case Study

Bokaro Steel Plant

Bokaro Steel Plant (BSL), which uses coal to a large extent for production purpose has taken a number of active measures to increase fuel efficiency and thus conserve energy. In order to impart sustained and systematic approach to energy conservation, BSL has established a well organised Energy Management department since inception. A separate energy conservation cell comprising executives, skilled and semi skilled workers has been operating under Energy Management department for monitoring and controlling all energy parameters in close association with all units of the plant. Measures taken For improved gas management, duplex burners (capable of firing both PCM and CO gas) were fabricated in house and installed in kiln no. 1, 2, 3 and 4 to use surplus CO gas. Due to poor demand for tar derivatives in the market, PCM thus saved from RMP kiln was being supplied to CPP boilers using existing tar/PCM line from BPP to Power Plant since November 2001. ♦♦ A separate mixing station for cold rolling mill was commissioned in order to supply mixed gas of calorific value 2,300 kcal/nm3 to Hot Strip Mill (HSM) and 1,600 kcal/m3 to Cold Rolling Mill (CRM). This helped to reduce sp. heat consumption in HSM and CRM. ♦♦ The plant also used non coking coal in blend (3.36 percent) with the twin aim of conserving coking coal and reducing cost of inputs. ♦♦ Oxygen enrichment facilities were set up in Blast Furnace no. 2. ♦♦ Utilisation of LD slag in the Blast Furnace was made in addition to its usage in Sinter Plant to partly replace lime stone flux and manganese ore usage. ♦♦ Layer charging of Nut coke was made in Blast Furnace (in addition to its usage in Sinter) for optimum utilisation of undersize fraction and increase BF productivity. ♦♦ Gas availability for all the 5 boilers was restored after necessary revivification of the gas handling system of Power Plant boilers. This resulted in reduction of middling coal consumption from 134.4 in 2000-01 to 124.8 kg/t of steam in 2001-02 and minimization of gas bleeding losses. BF gas bleeding reduced from 2.8 percent to 2.4 percent and CO gas from 0.19 to 0.1 percent as compared to the previous year. ♦♦ Naphtha consumption was reduced and has been stopped completely since June 2001. ♦♦ Three out of six descalers in roughing group were switched off resulting in lowering in drop out temperature leading to reduction in sp. heat. Observation As a result of various measures taken and improvement in operating and maintenance practices, all major energy parameters during the period showed a significant improvement. Source: Bureau of Energy Efficiency

BEE works closely with the National Productivity Council (NPC), Delhi, and undertakes third party “Verification of Energy Savings related to the activities of Bureau of Energy Efficiency” spread throughout the country, based on secondary data and stakeholder interactions. The major schemes that the BEE took up during the Eleventh Plan are: (a) Bachat Lamp Yojana to promote energy efficient and high quality CFLs as replacement for incandescent bulbs in households. (b) Standards & Labeling Scheme targets high energy end use equipments and appliances to lay down minimum energy performance standards. (c) Energy Conservation Building Code (ECBC) that sets minimum energy performance standards for new commercial buildings. (d) Operationalising EC Act by Strengthening Institutional Capacity of State Designated Agencies (SDAs). The scheme seeks to build institutional capacity of the newly created SDAs to perform their regulatory, enforcement and facilitative functions in the respective states. (e) Star Rating of Office Buildings and BPO Buildings. (f) Agricultural and Municipal DSM Schemes targeting replacement of inefficient pumpsets, street lighting, etc. to achieve energy saving from end users. (g) Energy Efficiency Schemes in Small and Medium Enterprises targeting SME clusters to adopt energy savings schemes and to cover large SME sector units. (h) National Mission on Enhanced Energy Efficiency (NMEEE) Program targeting 9 energy intensive industrial sectors including railways, with four new initiatives namely. ♦♦ ‘PAT’ Scheme involving the market based mechanism to enhance cost effectiveness of improvements in EE in energy intensive industries through certification of energy saving which can be traded. (Perform, Achieve & Trade). ♦♦ Accelerating the shift to energy efficient appliances in designated sectors through innovative measures to make the product more affordable. ♦♦ Creation of a mechanism that would help finance DSM programs in all sectors by capturing future energy saving. ♦♦ Developing fiscal instruments to promote energy efficiency In 2009-10, BEE’s The Standards and Labeling (S&L) Programme resulted in electricity saving of 4,350.92 million units, equivalent to avoided generation capacity of 2,179.31 MW.

COAL INSIGHTS 18 may 2012

Cover Story The National Energy Conservation Award Programme resulted in electricity saving of 2,450.6 million units, equivalent to avoided generation capacity of 358.6 MW. Apart from this, these programmes were able to reduce 1.366 million MTOE of thermal energy. The ECBC programme has given a fillip for the construction of energy efficient buildings and systems. To promote energy conservation in buildings, BEE has developed a star rating scheme of the building based on annual energy consumption per sq-m per year (EPI). EPI has been developed for different climatic zones and for buildings with less than 50 percent air conditioners area as well as for buildings having more than 50 percent air conditioners area. The initiative received a moderate response in the beginning, but has started drawing the attention of the realty sector lately. During the year 2009, about 100 office buildings and four BPO buildings were applied for star rating. The estimated energy savings in these buildings is estimated at about 21.06 million units. This, according to BEE, was equivalent to an avoided generation capacity of about 3.082 MW. Recently, BEE has come out with a detailed guideline and suggestions that will be effective from April 2012 to March 2015 for increasing efficiency of coal by all sections of consumers. Commenting on the BEE initiatives, an industry source said, “Some measures have already been taken and this may result in low energy consumption to some extent. But, drastic energy saving will not be possible without adopting major technological changes.”

Case Study

Rashtriya Chemicals & Fertilizers Limited

According to company sources, in Rashtriya Chemicals & Fertilizers Limited (RCF), a number of proposals for energy conservation were taken and implemented based on energy audits, case histories of successful conservation measures implemented by other plants and through suggestions received from the operating and technical personnel. Achievement ♦♦ Optimisation of steam network In RCF Trombay unit, steam is produced and consumed at five different pressure levels. It was observed that in one plant steam was surplus while in another there was a shortage. By carefully analysing overall steam production and consumption pattern, the steam distribution network was organised in such a way that steam wastages were minimised. This helped to bring down the plant’s boiler load considerably and thereby reduced its energy consumption. To have energy conservation on Thermal Front regular inspection of Steam Traps and steam leakages and repairs thereof were carried out. Also, periodic monitoring of insulation status and their repairs were made. ♦♦ In spite of the risks involved, RCF decided to shut down one boiler from 2002 which led to an electrical energy saving of 21 MWH/day thereby meeting all factory steam demand through only one boiler. ♦♦ In Ammonia-V motor driven Benfield pump was stopped and in its place steam turbine driven pump was taken in line, thereby reducing electric power consumption (35 MWH/day). ♦♦ A new 4” line was laid for diverting excess air in Ammonia-V Process Air Compressor (PAC) to Ammonia-I for operating Inert Gas Plant (IGP) and factory grid. With this modification Ammonia-I were able to stop their motor driven Instrument Air Compressors (daily saving of 8.5 MWH). However, to meet the instrument air requirement in case of upset in Ammonia-V PAC, ‘auto start’ arrangement of IAC in Ammonia-I was also been made. ♦♦ In Methanol Plant Boiler Feed Water Pump and Boiler Water Circulation Pump were being run by turbine drives by consuming in-house steam, thereby stopping the electrical drives (daily saving of 1.5 MWH). ♦♦ In Methanol Plant one Instrument Air Compressor (42 KW) was stopped by diverting instrument air from CPT air compressor which had a higher capacity (daily saving of 4 MWH). ♦♦ In Ammonia-V, “Mass Spectrometer” analyzer for on-line analysis of 13 process streams was installed and commissioned successfully in February 2002. This would facilitate precise control of all critical parameters. ♦♦ Synthesis Gas interconnecting lines between Ammonia-I and Ammonia-V was suitably incorporated with required instrumentation and on a number of occasions this resulted in speedy start-ups of Ammonia-I/Ammonia-V plants and also reduction in unproductive energy consumption during their start-ups. ♦♦ Modified cooling water supply arrangement was made for Ammonia-I IGP and IAC from New Nitric Acid Plant. This facilitated total stoppage of cooling water system in Ammonia-I. ♦♦ In CNA Plant only one Cooling Tower pump was being operated to meet the requirement, while the other pump was kept stopped (daily saving of 0.8 MWH). The energy conservation schemes implemented showed continual reduction in the energy consumption of all plants per se (through various specific schemes implemented). However, the specific energy consumption showed an increasing trend primarily because of the low load operation of plants due to feed stock (Associated Gas) limitations. Source: Bureau of Energy Efficiency

COAL INSIGHTS 20 may 2012

coal market fundamentals

Thermal coal import prices ease in May 120

Thermal coal price trend

110

100

$ per Ton

hermal coal prices remained subdued in the international market in May due to lack of demand from the utilities and the depreciation of Rupee, according to market participants. Both consumers and traders are not bullish or ready to take position in this market mainly because of financial problems. As for India, the power prices remained low, while coal prices were high, with the local currency, the Rupee, hovering around 55 to the US dollar, acting as a deterrent to imports. In the international market, however, Australian thermal coal of heating value of 6,300 kcal GAR is currently being offered at around $98 per ton in May against $100 per ton quoted at the end of April. Offers of South African thermal coal of heating value of 6,000 kcal NAR fell by $4 per ton to $96 per ton in May from April end levels. Offers for Indonesian coal of heating value of 5,900 kcal GAR is hovering around $88.9 per ton, while that of heating value of 5,000 kcal GAR is at $69.5 per ton. Traders said deals are struck only if the coal is required on an urgent basis. No one is buying to stock the coal, and small power projects are also buying low grade coal with high ash. Indian buyers are quoting prices way below market rates. However, according to analysts, thermal coal prices will remain relatively firm over the long term despite aggressive mine expansions to meet the growth in Asian demand, particularly from China and India. Analysts at a recent coal conference felt although there will be “aggressive” thermal coal supply expansions, steam coal prices in the long term will remain at high levels. Cost pressures, infrastructure bottlenecks and a decrease in export coal quality will combine to hold prices at traditionally high levels and China and India will be the top two demand

4/ 2/ 20 12 4/ 4/ 20 12 4/ 6/ 20 12 4/ 8/ 20 12 4/ 10 /2 01 2 4/ 12 /2 01 2 4/ 14 /2 01 2 4/ 16 /2 01 2 4/ 18 /2 01 2 4/ 20 /2 01 2 4/ 22 /2 01 2 4/ 24 /2 01 2 4/ 26 /2 01 2 4/ 28 /2 01 2 4/ 30 /2 01 2 5/ 2/ 20 12 5/ 4/ 20 12 5/ 6/ 20 12 5/ 8/ 20 12 5/ 10 /2 01 2 5/ 12 /2 01 2 5/ 14 /2 01 2

Coal Insights Bureau

South African Coal (6000 Kcal NAR) Indonesian (5900 Kcal GAR)

Australian Thermal coal (6300 GAR) Indonesian (5000 Kcal/GAR)

drivers. India’s seaborne steam coal demand by 2030 will be 400 million tons (mt) per year from 80 mt in 2011, overtaking Japan, according to analysts. In fact, India’s thermal coal demand may be even higher if domestic coal supply is constrained by delays in associated rail and port infrastructure projects. Cost pressures from changing fiscal regimes such as the carbon tax in Australia and the minimum export price regulations in Indonesia will also support high thermal coal prices. India, according to analysts Wood Mackenzie, is among the world’s fastest-growing coal importers. The country is battling chronic power shortages which are hampering the economy, largely due to the yawning gulf between domestic coal supply, demand and its ability to import fuel. Coal India Ltd (CIL), the world’s largest coal miner, aims to raise its output to 464 mt in 2012-13 after missing its scaleddown target for the previous year and is separately considering importing up to 15 mt of coal at prices far exceeding domestic levels to help bridge that gap. But these measures, industry participants feel, are not enough. India is likely to import up to 80 mt of thermal coal in the current financial year. In recent past, CIL has struggled to hit production targets for years because of difficulties compensating people for moving from their land and infrastructure problems. Most of the country’s coal deposit is in the north and there is not sufficient rail capacity to move it efficiently around the country to where it is needed. Meanwhile, there is deadlock in discussions between the Cabinet, the power generators and Coal India, with each party wanting the others to pay for the extra cost of imports. Also, there is disagreement over the meaninglessly small penalties proposed for Coal India if it fails to deliver contracted tonnages. In this milieu, however, one aspect of India’s power shortage – inefficient transmission and distribution – is getting little attention from either the industry or the government.

COAL INSIGHTS 22 may 2012

coal market fundamentals

Coking coal prices witness mixed trend in May Coal Insights Bureau

Met coke import prices ease in April Met coke import prices eased in May on slackness in demand from steel makers. The import prices of met coke were hovering around $360 per ton currently, down from $370 per ton at the end of April. LAM coke demand, which is currently at 33 million tons per annum (mtpa) domestically, is expected to shoot up to 58 mtpa in the next five years, as steel makers increase capacity, according to industry estimates.

growth forecast at almost 10 percent this year. It started about 10 new blast furnaces in the past six months, lifting output to a record in March. India, the third-biggest steelmaker, is set to boost capacity a third to more than 100 million tons (mt) by March in a five-year $1 trillion plan to build roads, bridges and railway networks. Growth in China slowed more than forecast last quarter to the least in almost three years, prompting economists to predict a rebound as the government loosens policy to counter weak domestic and European demand. Gross domestic product expanded 8.1 percent from a year earlier after an 8.9 percent fourth- quarter gain, the National Bureau of Statistics said. Coking coal price trend in Australia 240

220

fob $ per Ton

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180

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140

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2Ap r-1 2 4Ap r-1 2 6Ap r-1 2 8Ap r-1 2 10 -A pr -1 2 12 -A pr -1 2 14 -A pr -1 2 16 -A pr -1 2 18 -A pr -1 2 20 -A pr -1 2 22 -A pr -1 2 24 -A pr -1 2 26 -A pr -1 2 28 -A pr -1 2 30 -A pr -1 2 2M ay -1 2 4M ay -1 2 6M ay -1 2 8M ay 10 -12 -M ay -1 12 2 -M ay -1 14 2 -M ay -1 2

he seaborne coking coal prices firmed up in May on selective buying support from steel mills. However, some slackness in transactions was witnessed towards the end of May. Coke makers and mills were unable to absorb further rises as operating margins were being compromised. Premium low-vol hard coking coal was assessed at $223 per ton fob Australia, while 64 percent CSR mid vol was stable at $189 per ton fob. The semi soft variety slid to $130 per ton. According to market sources, coal users in China and India expressed a lack of interest at current prices levels. The prices were dragged down by generally lower indicative bids, and an increasingly bearish macro-economic environment. Most major Chinese mills seemed willing to consider prices close to $235 per ton CFR North China for top Australian coals, but said they would be reluctant to pay much more than this. Supply of high-quality coking coal in the domestic Chinese market was limited though and prices were broadly stable. Coking coal traders continued to express concern about the negative sentiment in China, and said some customers were struggling financially. There was much debate about China’s record steel output in April, especially given poor fundamentals in steel markets, both for long and flat products. Meanwhile, China announced a 0.5 percent cut in the bank reserve ratio to take effect on May 18, releasing Yuan 400-500 billion ($63-79 billion) of liquidity. But steel traders said continued high steel production could offset the potential positive effect on the steel market of the easing of monetary policy. The low demand from India was attributed to a scarcity of iron ore facing the steel sector. The Indian steel plants are still reeling under a shortage of iron ore and have reduced its coal consumption substantially. In 2010-11, domestic steelmakers imported close to 27 mt of the raw material. However, analysts feel coking coal prices are set to rebound as early as July from four straight quarterly declines as China and India seek raw material overseas to fire new steel production. Contract prices that fell to $206 a ton for the quarter ending June 30 may rebound to average $225 a ton this financial year, analysts feel. China, the largest steel producer, is leading demand

COAL INSIGHTS 24 may 2012

HCC Peak Down fob Australia ($/Ton) Premium hard coking coal prices (premium low vol) fob Australia ($/ton) HCC 64 Mid Vol fob Australia ($/Ton) Low Vol PCI fob Australia ($/Ton) Semi soft coking coal rates fob Australia ($/ton)

coal market fundamentals

India to acquire mine in Mongolia

Coal Insights Bureau

n a move to reduce dependence on highly priced Australian coking coal, India will acquire a mine in Mongolia and also set up the first steel plant in the quality coal rich country. An Indian delegation comprising the chairman of Steel Authority of India (SAIL) C.S. Verma and U.P. Singh, Joint Secretary in the Ministry of Steel recently visited the country and signed a pact in this regard. The plan is to acquire the mine, utilise the coal for the steel plant India proposes to set up in Mongolia and export the rest to India through Chinese ports as Mongolia is a land locked country. Despite being a growing economy with abundant

Demand for imported coking coal in China may rise 37 percent to 63 mt this year from last year, Australia’s Bureau of Resources and Energy Economics said on March 21. Consumption is projected to increase due to state investment in steel-intensive infrastructure such as highways and rail networks, linking the less-developed provinces in western China to demand centers in the east, it said. Global trade in coking coal may rise 9.6 percent to 297 mt this year, compared with a 0.7 percent drop last year, the Bureau of Resources and Energy Economics said.

coking coal mines, Mongolia does not have any steel plant of its own. The mine India plans to acquire will first meet the requirement of setting up a steel plant there. Then the surplus coking coal will be taken to from there. This will be the first attempt by India to break away from the excessive dependence of Australian coking coal, which has become too costly in recent years pushing up the cost of steel production to very high level in India. India is importing 35 mt of coking coal every year, about 60 to 70 percent from Australia which is close to India, and the rest from the US and New Zealand. In view of its plans to expand steel production from the current level of 80 mt to 200 mt by 2020, the country is looking for gaining fuel (coking coal) security, as there is hardly any quality coking coal mine at home. The factor has become very important as the production of one ton of steel requires 0.9 ton of coking coal. The consumption of coking coal in India is roughly about 35 to 40 mt of which about 12 to 15 mt is made available from domestic sources, mainly Bharat Coking Coal Ltd (BCCL). However, the domestic supply is not of very good quality and comprises medium grade soft coking coal. Mongolia, in contrast, has prime quality coking coal. China which also has a lot of coking coal reserves is importing from Mongolia, cutting down its imports from Australia.

Meanwhile, India’s coking coal needs may jump 13 mt this financial year as its rising appetite for the alloy drives companies to add capacity worth at least $10 billion in the year that started April 1. Indian demand may support coking coal prices as most of the local requirements are met through imports, he said. Last year, India imported 13 percent of the 271 mt of coking coal traded globally. Australia is estimated to have shipped 148 mt of the steelmaking ingredient in the year ended March 31, the Bureau of Resources and Energy Economics said in its March 21 report.

COAL INSIGHTS 26 may 2012

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feature

India’s proven coal reserves at 118 bn tons: GSI

Coal Insights Bureau

ndia’s total proven coal reserves stand at 118 billion tons as of April 2012, according to the latest estimate by Geological Survey of India (GSI). This shows an increase of around 4 billion tons over GSI estimate in 2011. At the present level of production, the proven stock of coal, up to a depth of 1,200 metres, would sustain for around 200 years. However, not all of this proven reserve is mineable. India lacks the capability for deep underground mining. In fact, at

current state of technological endowment, the country’s coal mining is mostly restricted up to the depth of 300 metres and only in a few cases, up to a maximum 600 metres. The increased estimate nonetheless shores up the geologists’ claim of abundant reserves of coal in the country. It also further cements India’s position among the countries having largest coal reserves, after the US, Russia and China. At the same time, the higher domestic reserves put to question the ever-increasing imports of the dry fuel. The figures of higher and higher reserves would not count much if the country is unable to exploit the same. Total reserves India’s total coal reserves, however, are more than double the proven reserves and stand at 293 billion tons, the GSI estimate shows. This includes indicated reserves of 142 billion tons and inferred reserves of 33 billion tons. Of the total inferred reserves, inferred (exploration) reserves are estimated at 32.4 billion tons while inferred (mapping) reserves stand at 0.75 billion tons. These latest estimates take into account the coal deposits found up to the depth of 1,200 metres in Gondwana coalfields and Tertiary coalfields. Almost the entire reserve of 292 billion tons is found in Gondwana coalfields while a miniscule part of 1 billion tons is traced in Tertiary region. A depth-wise break-up shows that reserves up to the level of 0-300 metres are at 173 billion tons, 0-600 metres (only for Jharia coalfield for which break-up is not available) at 14.2 billion tons, 300600 metres at 84 billion tons, and

COAL INSIGHTS 28 APRIL 2012

Feature Depth-wise break-up of coal reserves 200

Quantity (in bn tons.)

180 160

1,200 metres. Besides coking and non-coking coal, there are 1.5 billion tons of high sulphur coal deposits in the Tertiary coalfield. Break-up of coking and non-coking reserves

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0-300

0.00

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20 0 0-300

300-600

600-1,200

Depth (in mtrs.) Coking Coal

Steam Coal

0-600

4043.42 4067.00

300-600

Total Reserve

Note: 0-600 mtrs (only for Jharia coalfield for which break-up is not available) at 14.2 bn tons

600-1,200 metres at 21.5 billion tons. The geographical distribution of coal shows that reserves are spread across 14 states of India. The largest coal-bearing states are Jharkhand (80.3 bn tons), Odisha (71.4 bn tons), Chhattisgarh (50.8 bn tons) and West Bengal (30.6 bn tons) Coking and non-coking coal Proven reserves of coking coal, according to the estimate, stand at 17.9 billion tons, while that of non-coking coal at 99.6 billion tons as of April 2012. Total reserves of coking and non-coking coal are 33 billion tons and 258 billion tons, respectively. Of the total coking coal reserves, prime coking coal deposit is 5.3 billion tons, medium coking coal deposit is 26.6 billion tons and semi coking coal deposit is 1.7 billion tons. Almost 12 billion tons of the reserve is found at a depth of 0-300 metres, another 8.1 billion tons at 0-600 metres (Jharia), 6.6 billion tons at 300-600 metres and the remaining 6.9 billion tons at 6001,200 metres. In case of non-coking coal, superior grade accounts for 36.6 billion tons while the vast majority of 191.3 billion tons are of inferior grade and the remaining 30.2 billion tons are ungraded. A further break-down by grades shows that of the total proven reserves of 99.6 billion tons of non-coking coal in the country, Grade A reserve is 1.3 billion tons, Grade B is 4.5 billion tons, Grade C is 10.5 billion tons, Grade D is 15.1 billion tons, Grade E to G is 68 billion tons. Around 160.5 billion tons of non-coking coal is found at a depth of 0-300 metres, 6.1 billion tons at 0-600 metres (Jharia), 77 billion tons at 300-600 metres and 14.6 billion tons at 600-

11566.45 466.38 21585.76 129038.81

0.00

5869.61

600-1200 1269.64 5165.48 0-1200

0.00

202.42

1290.64 173842.52

0.00

14212.42

758.14 12362.80 49294.31

15436.32

202.00

83923.18

482.61

4951.29

0.00

21519.03

2505.12

5899.58

9894.48

7144.89

5313.06 26668.54 1707.13 36656.10 191377.59 30282.09 1492.64 293497.15

Lignite reserves Total lignite reserves in India, as of April 2012, is estimated at 41.9 billion tons. Of this, proven reserves stand at 6.2 billion tons, while indicated reserves are estimated at 25.7 billion tons and inferred reserves at 10 billion tons. Lignite deposits are categorised up to the depth of 150 metres, 150-300 metres and more than 300 metres. The southern state of Tamil Nadu alone holds 33.8 billion tons of lignite reserves (proven 3.7 billion tons). Neyveli lignite field has 8.6 billion tons, but almost all of the proven reserves of the state. Mannargudi lignite field has 24.2 billion tons of inferred and indicated reserves but not any proven reserves so far. Other than Tamil Nadu, Rajasthan (total reserves 4.9 billion tons) and Gujarat (total reserves 2.7 billion tons) have limited reserves of the mineral. Apart from the reserves already found (proven, indicated or inferred), GSI has hinted there could be other lignite deposits in some areas. For instance, about 60 billion tons of lignite is likely to be contained within 800-1,400 metres depth in Kalol basin (Mehsana area) of Gujarat. Also, Mannargudi lignite field extending eastward beyond the explored area may also contain considerable resources. Furthermore, exploration by Shell Oil Company in the Barmer and Sanchor basins of Rajasthan indicated the presence of substantial lignite resource at deeper level. Substantial resource of lignite has also been prognosticated in the Cambay basin of Gujarat at deeper level.

(The indicated reserve is the estimate of mineral computed from boreholes, outcrops, and developmental data, and projected for a reasonable distance on geologic evidence. An inferred reserve is an estimate based on relationships, character of deposit, and past experience, without actual measurements or samples; it should include the limits between which the deposit may lie. A potential reserve is mineral not yet discovered but whose presence is suspected; the term is sometimes used for mineral not commercially viable at present time. A proved reserve is a resource reliably established by tunnels, boreholes, or mining.)

COAL INSIGHTSâ&#x20AC;&#x201A; 30â&#x20AC;&#x201A; may 2012

Feature

Govt mulls sovereign fund, CIL subsidiary in SA Coal Insights Bureau

aking an aggressive stance to acquire mines abroad, the Indian coal ministry has proposed the setting up of a sovereign fund to buy coal assets abroad. Simultaneously, state-run Coal India Ltd (CIL), the country’s major supplier of the fuel, is considering setting up a subsidiary in South Africa for export of coal from that country. The twin developments are seen as desperate measures by the ministry to taste some success in overseas mine acquisitions. Coal minister Sriprakash Jaiswal said that the proposed fund would be used solely for coal assets and would target acquiring mines in Australia, South Africa, Mozambique, the US and Indonesia, which are on the priority list for acquisitions by CIL. “Acquisition of coal assets has assumed significance due to the domestic production constraints. Coal India has taken several initiatives in this space and has prioritised countries including Australia, Mozambique, South Africa, Indonesia and the US for acquiring mining assets,” Jaiswal said.

The minister, however, did not divulge the likely size of the fund, but said it would be set up within a couple of months. Also, it was not clear if the fund would be used by International Coal Ventures Ltd (ICVL), a consortium of staterun companies, or by CIL. The coal behemoth, however, had its own reserves earmarked for foreign acquisitions and has made two acquisitions in Mozambique. ICVL, in contrast, was yet to acquire a single asset in the three years since its inception, allegedly because of bureaucratic hassles. Last year ICVL decided not to counter Rio Tinto's $3.9 billion bid for Australian coal miner Riversdale. Incidentally, CIL is a member of ICVL along with Steel Authority of India Ltd (SAIL) and iron ore miner NMDC Ltd. Earlier, a similar state fund for all energy assets was considered last year, but did not fructify after Reserve Bank of India reportedly expressed its concern about possible foreign exchange outgo. It was not immediately clear how the apex bank would react to the new proposal in the backdrop of the

COAL INSIGHTS 31 may 2012

Feature sharp decline in Rupee vis-à-vis US Dollar over the past few weeks. Industry sources said the minister’s announcement gave expression to the huge pressure facing the ministry to meet the bulging coal demand from the power and other sectors. The Indian power utilities are given a target to add generation capacity of 76,000 MW during the Twelfth Five Year Plan (2012-17). Despite having proven coal reserves of around 118 billion tons, the fourth largest in the country, India has witnessed severe supply constraints in recent years, which led to robust growth in costlier imports. In 2012-13, imports are expected to cross 150 million tons (mt), compared to 118 mt recorded in 2011-12.

in features of the India’s SWF,” said ASSOCHAM secretary general D.S. Rawat. “The global economic structure is changing and new instruments are coming,” he said adding growth comes from new ideas and innovation. SWF are an important component to generate nation’s wealth. They have emerged as formidable global investors and often evoke concerns in countries where they put in money. If India’s GDP has to grow at more than 8 per cent, then many sectors must grow faster than that. For this, said Mr Rawat, SWF will play a crucial role. The sectors which would benefit from acquisitions made by SWF could pertain to oil and gas, coal and infrastructure. With India’s current growth, the country will need to secure its energy needs of the future.

Global acquisitions

Subsidiary in SA

Close on the heels of the announcement by the coal minister, leading chamber of commerce ASSOCHAM said India should aim at setting up a sovereign wealth fund (SWF) which is financially viable and target overseas assets at a time when the developed economies are struggling with debt loads. Noting that there are more than 50 sovereign wealth funds managing assets worth nearly three trillion dollars, the chamber said most of these are run by countries with huge trade surpluses and are funded mostly by oil and gas exports. In fact, India is the only BRIC nation that does not have a SWF, it pointed out. China, Singapore, Saudi Arabia, Norway, Kuwait and Russia are among top countries that have large wealth funds to make investments abroad. Chinese firms spent 32 billion dollars last year to buy energy and metal assets as well as huge chunks of real estate abroad. SWFs are becoming increasingly important in the international monetary and financial system, and attracting growing attention, the chamber added. “Quick decision-making and transparency should be built-

Meanwhile, CIL is mulling to set up a subsidiary in South Africa for developing necessary infrastructure for export of coal and coal products from Limpopo province, Minister of State for Coal Minister Pratik Prakashbapu Patil has said. CIL has executed a Memorandum of Understanding (MoU) with organisations owned by Provincial Government of Limpopo, South Africa to engage in joint initiatives of identification, exploration and development of coal assets and development of necessary infrastructure for export of coal and coal products from Limpopo province, he said. To implement the MoU, setting up of a CIL subsidiary in South Africa would be required, Patil said, adding a total of Rs 553.33 crore was allocated for Corporate Social Responsibility during the year 2011-12 by CIL and its subsidiaries. The CSR activities are being undertaken as per CSR policy of CIL through implementing agencies such as Panchayats, Voluntary Agencies, Trusts, Missions, Self Help Groups, Government, Semi-government and autonomous organisations among others.

COAL INSIGHTS 32 may 2012

Feature

MoC issues showcause notices to 58 captive blocks Coal Insights Bureau

rked by the slow progress made on various fronts for development of captive coal blocks, the Ministry of Coal has issued as many as 55 showcause notices asking the holders of as many as 58 coal and lignite blocks with estimated reserve of 16.61 billion tons to reply within 20 days as to why there was delay in development of the blocks allotted to their projects or face de-allocation. The notices, including two to lignite blocks holders, were issued between last week of April and first week of May 2012. Earlier in 2010, the ministry had issued showcause notices to 84 blocks on recommendation of the Review Committee. Based on the clarifications submitted by the allocattees of these 84 coal blocks, 14 coal blocks (12 of public sector companies and 2 of private companies) were de-allocated. Among the major private sector companies that have been

Captive coal block FY13 production estimated at 39.2 mt

Coal Insights Bureau

he coal production by 36 captive coal blocks is projected at 39.2 million tons (mt) in 2012-13, a senior official of Ministry of Coal said. “We project a production of 39.2 mt of coal by captive coal blocks during the current financial year considering that a total of 36 blocks will be operational by end of the year as against 29 operational blocks at present,” the official said. However, if forest and other statutory clearances are provided on time, then another four to six blocks may provide additional production of around 3.1 mt, he said. “So in a very optimistic scenario, the total production from captive coal blocks would be around 42.3 mt in 2012-13,” the official added.

Sriprakash Jaiswal, Minister of Coal, Govt. of India

served the show cause notices this time, are Sasan Power Ltd of Reliance Power Ltd, Grasim and Hindalco of Aditya Birla Group Company, Usha Martin Ltd, Jaiswal-Neco Ltd, CESC Ltd, Kesoram Industries Ltd, Lafarge India Pvt Ltd, Arcelor Mittal India Ltd, Monnet Ispat Ltd and Tata Power Ltd. The prominent among public sector companies are MMTC, Nalco, Chhattisgarh Mineral Development Corporation, Jharkhand State Mineral Development Corporation, Jharkhand State Electricity Board, Orissa Mining Corporation, Gujarat Mineral Development Corporation, Kerala State Electricity Board, Orissa Mining Corporation, West Bengal Mineral Development and Trading Corporation and Andhra Pradesh Mineral Development Corporation. The decision to issue the show cause notice was taken following a review meeting held in January 2012 (January 11 and 12) which found that the owners of the blocks had failed to achieve various milestones as per the allocation letter. As per the milestone chart prepared with the allocation letter, it was indicated that the coal production from the blocks shall commence within 36 months (42 months in case the areas is in forest land) in case of opencast mines. “You are hereby called upon to show cause, on each milestone separately, to this Ministry within a period of 20 days from the date of issue of the showcause notice, failing which it would be presumed that your company has no explanation to offer and action as appropriate would be taken against your company for de-allocation of the said blocks,” the ministry’s notice said.

COAL INSIGHTS 33 may 2012

Feature Following is the detail of showcause notices issued to various companies with estimated reserve against each block (in million tons): Sl. No.

Name of the Coal block

Owner

Date of Showcause Notice Issue

Estimated Coal Reserve (In million tons)

Lohari Coal Block

Usha Martin

24.04.2012

9.99

Nerad-Malegaon Coal Block

Gupta Metallics & Power Ltd.

24.04.2012

19.5

Moher and Moher Amlori Extension coal blocks Power Finance Corporation Sasan UMPP

01.05.2012

198

Chinora and Warora Sourthern Part coal block

Fieldmining & Ispat Ltd.

30.04.2012

Tubed coal block

HINDALCO, Tata Power Corporation Limited

30.04.2012

189

Durgapur II/ Sariya coal block

DB Power Limited

30.04.2012

91.67

Shankarpur(Bhatgaon II) & Extn. coal block

Chhattisgarh Mineral Development Corporation Limited

30.04.2012

80.13

Bhaskarpara coal block

Electrotherm India Limited, Grasim Industries Ltd

30.04.2012

24.69

Sugia Closed Mine coal block

Jharkhand State Mineral Development Corporation

30.04.2012

Utkal B2 block

Monnet Ispat Ltd.

30.04.2012

106

Macherkunda block

Bihar Sponge Iron Ltd.

02.05.2012

23.86

Rabodih OCP coal block

Jharkhand State Mineral Development Corporation

02.05.2012

133

Patratu coal block

Jharkhand State Mineral Development Corporation

02.05.2012

450

Urma Paharitola coal block

Jharkhand State Electricity Board

02.05.2012

437

Seregarha coal block

Arcelor Mittal India Ltd, GVK Power (Govindwal Sahib) Ltd

02.05.2012

150

Saria Koiyatand coal block

Bihar Rajya Khanij Vikas Nigam

02.05.2012

202

Latehar coal block

Jharkhand State Mineral Development Corporation

02.05.2012

220

Pindra-Debipur-Khowatand

Jharkhand State Mineral Development Corporation

02.05.2012

110

Gomia (deep UG mine) coal block

MMTC

02.05.2012

355

Rauta Closed mine and Burakhaph Small Jharkhand State Mineral Development Corporation Patch coal block

02.05.2012

3.5

Utkal - E coal block

NALCO

02.05.2012

194

Utkal - D coal block

Orissa Mining Corporation

02.05.2012

153.31

Naini coal block

Gujarat Mineral Development Corporation, PIPDICL

02.05.2012

500

Baitarni West coal block

Kerala State Elec. Board, Orissa Hydro Power Generation Cor

02.05.2012

401.32

,Gujarat Power Generation Corp 25

Naugaon Telisahi coal block

Orissa Mining Corporation Ltd, APMDC

02.05.2012

733

Gondkhari block

Maharashtra Seamless Limited, Dhariwal Infrastructure (P) Ltd., Kesoram Industries Ltd.

02.05.2012

98.71

Dahegaon Makardhokra IV coal block

IST Steel & Power Ltd, Gujarat Ambuja Cement Ltd., Lafarge India Pvt. Ltd.

02.05.2012

132

Assam Mineral Dev. Corp, Meghalaya Mineral Dev. Corp

02.05.2012

1200

Mandakini-B block

, Tamil Nadu State Electricity Board, Chennai ,Orissa Mining Corporation

COAL INSIGHTS 34 may 2012

Feature

Sl. No.

Name of the Coal block

Owner

Date of Showcause Notice Issue

Estimated Coal Reserve (In million tons)

Lalgarh North coal block

Domco Smokeless Fuel Pvt. Ltd

02.05.2012

Rajbar E&D block

Tenughat Vidyut Nigam Limited

02.05.2012

385

Tadicheria - I coal block

Andhra Pradesh Power Generation Corpn. Ltd.

03.05.2012

61.28

Bhusan Steel & Strips Ltd., Adhunik Metaliks Ltd.

03.05.2012

1042

New Patrapara block

, Deepak Steel & Power Ltd, Adhunik Corp. Ltd., Orissa Sponge Iron Ltd , SMC Power Generation Steel Ltd.

Ltd., Sree Metaliks Ltd., Visa

Mahuagarhi coal block

CESC Ltd, Jas Infracture Capital Pvt Ltd

03.05.2012

110

Gourangdih ABC block

Himachal EMTA Power Ltd., JSW Steel Ltd.

03.05.2012

137.7

North Dhadu block

Jharkhand Ispat Pvt. Ltd, Pavanjay Steel & Power Generation Pvt. Ltd

03.05.2012

923.94

, Electrosteel Castings Ltd, Adhunik Alloys & Power Ltd. 36

Jitpur coal block

Jindal Steel & Power Ltd.

03.05.2012

81.09

Chitarpur coal block

Corporate Ispat Alloys Ltd

04.05.2012

212.01

Gare Palma Sector - I coal block

Chhattisgarh Mineral Development Corporation Limited

04.05.2012

900

Gare Palma Sector - II block

Tamil Nadu Electricity Board, MSMCL

04.05.2012

768

Choritand Tailaya coal block

Rungta Mines Limited, Sunflag Iron Steel Ltd

04.05.2012

27.42

Rajhara North (Central & Eastern) coal block

Mukund Limited, Vini Iron & Steel Udyog Limited

04.05.2012

17.09

Mahanadi Coalfields Ltd., JSW Steels Ltd./ Jindal Thermal Power Ltd.

04.05.2012

333.4

Utkal-A & Gopalprasad block

, Jindal Stainless Steel Ltd. , Shyam DRI Ltd.

Radhikapur (East) coal block

Tata Sponge Iron Ltd., Scaw Industries Ltd., SPS Sponge Iron Ltd.

04.05.2012

115

Ichapur coal block

West Bengal Mineral Development Trading Corp.

04.05.2012

335

Kulti coal block

West Bengal Mineral Development Trading Corp.

04.05.2012

210

Jaganathpur - A block

West Bengal Mineral Development Trading Corp.

04.05.2012

273

Jaganathpur - B coal block

West Bengal Mineral Development Trading Corp.

04.05.2012

176

Sitarampur coal block

West Bengal Mineral Development Trading Corp.

04.05.2012

210

Moitra coal block

Jaiswal-Neco Ltd

04.05.2012

215.78

Dumri coal block

Nilachal Iron & Power Generation, Bajrang Ispat Pvt. Ltd.

04.05.2012

Mahanadi & Machakata coal block

Gujarat State Electricity Corp. Ltd., Maharashtra State Electricity Board

04.05.2012

1200

Mokhala Lignite block

Rajasthan State Minerals Ltd

04.05.2012

Chendipada & Chendipada - II coal block

Uttar Pradesh Rajha Vidyut Utpadan Nigam Ltd., Chhattisgarh Mineral Development Corporation Limited

04.05.2012

1589

, MAHAGENCO 54

Merta Road Lignite block

NCL Power & Infratech Pvt Ltd

04.05.2012

Bramhadih coal block

Castron Mining Ltd. (formerly Castron Technologies Ltd.)

04.05.2012

2.215

Total

15610.61

COAL INSIGHTS 35 may 2012

Feature

Bring coking coal under steel min: Verma

Coal Insights Bureau

aking a cue from a Planning Commission recommendation, the Indian steel industry has raised its voice on demerging coking coal operations from the ambit of Coal India Ltd (CIL). While the Plan Panel mooted the formation of a separate entity, the steelmakers seem to prefer bringing coking coal under the purview of the steel ministry. The suggestion has come from none other than the chairman of the Steel Authority of India Limited (SAIL), C.S. Verma, who said that such a move would help ensure supply security for this all important fuel. This, he averred, was also necessary to achieve the national goal of achieving a steel production of 200 million tons (mt) by 2020. SAIL is investing about `72,000 crore to lift annual crude steel making capacity to 21.4 mt from the current level of 13.8 mt. Hence, the issue of long-term security in coking coal supply is undoubtedly one of the most important areas of concern for the SAIL authority and the steel industry at large. Import dependence Coking coal being a key ingredient for making steel, the

SAIL’s global tender receives ‘reasonable’ response

he Steel Authority of India Limited’s (SAIL) global tender to procure 0.5 million tons (mt) (+/-10%) freshly mined imported prime quality hard coking coal has witnessed a reasonable response unlike in the past when the company used to get very limited response, a source in SAIL told Coal Insights. “We have received reasonable response to the tender that closed on May 14 and the next stage (finalising commercial bids) is under process,” the source added. The source, however, could not disclose the names of companies which participated in the tender floated on April 13. SAIL is required as per the ministry of steel directive to purchase 10% of its total coking coal requirement through open tenders and the balance through direct negotiation with miners. There used to be limited response from miners or suppliers for SAIL’s coking coal tenders as generally the miners were unwilling to supply coking coal at long term contract prices, an industry source said. However, this time the response may be slightly better as the steel behemoth has planned to start taking delivery within six months starting from June and completing in November instead of a delivery period of 12 months in earlier tender conditions.

domestic steelmakers rely heavily on imports mainly from overseas countries like Australia to meet their requirement. It is estimated that India has coking coal reserves of about 33 billion tons, which are not exploited adequately. Besides expressing the wish to bring the coking coal mines under the steel C S Verma, Chairman, SAIL ministry, the steelmakers have also sought government funding for research and development (R&D) initiatives in steel to encourage collaborative research. In order to meet the steel production target set by the Government of India, Verma further stressed upon the need for timely grant of statutory approvals for mine leases and ease in land acquisition process. Focus on R&D According to Verma, Indian steelmakers' R&D spend ranged from 0.15-0.25 percent of their turnover, while their global counterparts spend 2-2.5 percent of their earnings. Since, these globally breakthrough technologies were possible only through government aided research and development projects, the SAIL chairman called for such support in India to encourage the collaborative research. SAIL wants to go for a joint venture with South Korea based Posco for building a 3 mt steel mill at Bokaro using the former’s patented Finex technology that makes hot metal from iron ore fines and non-coking coal. The attendant mini flat mill, in a revolutionary way, allows direct casting and rolling in a single sequence. This and also the absence of coke oven batteries will need 60 percent less land than is the case with a BF-BOF mill of identical size. Hence, although this Finex technology is of great importance for SAIL, but any steel mill will require coking coal as an input, hence ensuring the uninterrupted supply of this raw material is of paramount importance for the largest Indian steelmaker. Moreover, other initiatives such as acquiring coal assets abroad by itself or in alliance with others, as will be the case whenever International Coal Ventures Ltd (ICVL) of which SAIL is the lead partner is proving to be time consuming. On the other hand, acquisitions will also not come cheap. Therefore, at present, the main focus for this largest steelmaker of the country is on how to maintain continuous supply of this essential raw material to sustain production.

COAL INSIGHTS 36 may 2012

Feature

Coal producing states demand 20% royalty Coal Insights Bureau

ome of the major coal producing states had sought for fixation of coal royalty rates at 20 percent ad valorem basis, in place of the hybrid formula based royalty rates on coal and lignite prevalent earlier, Pratik P. Patil, minister of state for coal, said. This was significantly higher than 14 percent rate (for coal) approved by the government in April. The proposal by the states was, in fact, considered by a Study Group constituted by the government to examine the issue of revision of royalty rates on coal and lignite, the minister said. The Study Group held extensive deliberations on the issues involved and also held consultations with all the stakeholders. On the basis of the recommendations of the Study Group, the Union Government has finalised and accepted the proposal of the coal bearing States, including Assam, for shifting to ad valorem based system of royalty rates. However, keeping in view the interest of consumer states

and the power sector, the government has approved for 14 percent ad valorem royalty on coal, Patil said. New rates Meanwhile, the new ad valorem rates at 14 percent for coal and 6 percent for lignite – excluding taxes, levies and other charges – came into force from May 10, 2012 when the government published the Gazette notification. The notification was issued for amendment to the Second Schedule of the Mines and Minerals (Development and Regulation) Act, 1957 for revision in the rates of royalty on coal and lignite. Accordingly, all coal and lignite bearing States started levying royalty on coal and lignite as per new rates from the date of publication of the Gazette Notification. As per an estimate, the royalty revenue earning of major coal producing states viz. Jharkhand, Andhra Pradesh, Madhya Pradesh, Uttar Pradesh, Tamil Nadu, Odisha, Nagaland, Meghalaya, Maharashtra, Chhattisgarh, Assam

COAL INSIGHTS 37 may 2012

fEATURE Old and new coal royalty rates Grade

GCV Range (Kcal/kg)

Notified price (Power Sector)

Notified Price (Non- power sector)

Classification as per erstwhile system

Royalty (Old) for Power Sector (Rs/tn)

Royalty (New) for Power Sector (Rs/tn)

Increase in Royalty for Power Sector (Rs/tn)

Royalty (Old) for NonPower Sector (Rs/tn)

Royalty (New) for Non-Power sector (Rs/tn)

Increase in Royalty for Non-Power Sector (Rs/tn)

7,000+

6,700-7,000

4,870

4870

373.5

682

309

373.5

682

309

6,400-6,700

4,420

4420

351

619

268

351

619

268

6,100-6,400

3,970

3970

328

556

227

328

556

227

5,800-6,100

2,800

2800

270

392

122

270

392

122

5,500-5,800

1,450

1960

163

203

188

275

5,200-5,500

1,270

1720

133.5

178

44.5

156

240.8

4,900-5,200

1,140

1540

127

160

147

216

4,600-4,900

880

1180

114

123.2

9.2

129

165

36.2

G10

4,300-4,600

780

1050

109

109.2

Nil

122.5

147

24.5

G11

4,000-4,300

640

850

89.6

2.6

98.5

121.8

23.3

G12

3,700-4,000

600

810

(-1)

95.5

113.4

17.9

G13

3,400-3,700

550

740

82.5

(-5.50)

103.4

11.6

G14

3,100-3,400

500

680

(-10)

95.2

6.2

Note: Royalty Rate Earlier was `130 + 5% of price (A & B Grade), `90 + 5% of Price (C Grade), `70 + 5% of Price (for D and E grades), `55 + 5% of price (for F and G grade), New Rate is 14% of prices Source: Ministry of Coal

and Arunachal Pradesh will increase on an average up to 17.31 percent for coal and 14.53 percent for lignite. The major coal producing states will now earn revenues of about `6,980 crore in place of `5,950 crore, being earned at present at existing rates, resulting in increase in combined earning by more than `1,050 crore. T h e p r o p o s e d royalty revision is, however, not to be extended to the state of West Bengal unless the cesses imposed, are withdrawn. Pratik P Patil, Minister of State, MoC For states

other than West Bengal that levy cess or other taxes specific coal bearing lands, the revision of royalty allowed shall be adjusted for the local cesses or such taxes so as to limit overall revenue to the ad valorem royalty yield. While Patil did not name the states that sought higher royalty rates, the Orissa government has expressed its dissatisfaction over the increase. Among the mineral-rich states, Odisha had been quite vocal about a revision of royalty rates for coal in recent past. Commenting on the new rates, state finance minister Prafulla Chandra Ghadai said it was “unsatisfactory”. “The state government will not gain significantly from the coal royalty revision. We would have been benefited if the royalty rate was fixed at 30 per cent. The demands of coal bearing states have not been considered by the Centre. This is a token hike that will only benefit the coal mining companies. It is unfortunate that the Centre has bowed to the pressure of the mining lobby,” Ghadai said.

COAL INSIGHTS 38 may 2012

fEATURE

CIL’s new R&R policy to benefit project oustees: Jaiswal

Coal Insights Bureau

he new Resettlement and Rehabilitation (R&R) policy, 2012 of Coal India Ltd (CIL) aims to provide greater flexibility in resettlement and rehabilitation of people affected by coal mining projects, Coal Minister Sriprakash Jaiswal has said. The new policy will ensure well developed resettlement sites and employment opportunities, Jaiswal told a parliamentary consultative committee on coal. However, members of the committee felt that the R&R policy should be made more lucrative and local people should be provided all possible assistance for skill development and to arrange for a better livelihood. They raised the issue of financial irregularities in disposing of coal dump and suggested a thorough investigation. Jaiswal said the new policy attempts to consolidate the different R&R practices that are being followed by CIL subsidiaries as per the different state land acquisition acts to determine the rehabilitation packages best suited to local needs. The minister said that the policy emphasises the need to prepare detailed resettlement and rehabilitation action plans (RAPs) that clearly identify, at an early stage, the entitlements of the people affected by coal projects and enables them to exercise a choice between various options. He said that the concept of annuity in lieu of compensation/employment is also being introduced to mitigate, if not eliminate, the perpetual state of dependence of Project Affected Families. Highlights of the new R&R policy ♦♦ Land compensation to land oustees as per the provisions of the concerned Act or State Government notification. Solatium and Escalation paid to land oustees as per provisions of the concerned Act or as imposed by the concerned State Govt. ♦♦ Employment to land oustees against every 2 acres of land. All the land losers who are not eligible for employment are entitled to receive monetary compensation in lieu of

employment at the rate of Rs 500,000 for each acre of land on pro-rata basis. ♦♦ One time lump sum payment of Rs 300,000 to be paid in lieu of alternate house site, assistance in designing shifting allowance, compensation for construction of cattle shed, monetary compensation for construction of work shed etc. Each affected displaced family gets a subsistence allowance at the rate of 25 days (Minimum Agricultural Wage) per month for one year. ♦♦ The coal companies to assist the Project Affected People (PAPs) to establish non-farm self-employment through the provision of infrastructure, pretty contracts or formation of cooperatives and encourage provisions of Jobs with contractors. Contractors are persuaded to give jobs to eligible PAPs on preferential basis. ♦♦As far as possible coal companies shift the tribal community as a unit and provide facilities to meet the specific needs of the tribal community that allow them to maintain their unique cultural identity. ♦♦ Tribal affected families are given one-time financial assistance of 500 days for loss of customary right or usages of forest produce loss. Tribal affected families resettled out of the district to be given 25 percent higher rehabilitation and resettlement benefit. ♦♦ The coal companies provide at the resettlement site, a school, road with street light, pucca drain, pond dugwell and/ or tube well for drinking water supply, community centre, place of worship, dispensary, grazing land for cattle and play ground. Similar infrastructural facility, if necessary, is extended to the host locality. ♦♦ The community facilities and services are available to all residents of the resettlement colonies, including PAPs and the host population. The approach for operation of community facilities in flexible and all efforts are made to involve the State and local self-Government/ Panchayat for operating the facilities. The planning of the community facilities and their construction is undertaken in consultation with the affected community.

COAL INSIGHTS 39 may 2012

fEATURE

CRISIL emerges lowest bidder for coal consultancy Coal Insights Bureau

RISIL, a leading credit rating and consultancy firm, has emerged as the lowest financial bidder for the coal ministry’s contract to prepare the methodology for determining reserve price for coal block auctions. The ministry of coal (MoC) had shortlisted SBI Caps, PricewaterhouseCoopers (PwC) and CRISIL out of six bidders for the consultancy services, according to information available with Coal Insights. The three companies had cleared the first round of selection that involved evaluation of technical bids. After evaluating their financial bids in the next round, finally CRISIL has come up as the lowest financial bidder, a source said. In February, Central Mine Planning & Design Institute (CMPDI), a subsidiary of Coal India Ltd (CIL) on behalf of the coal ministry had invited an expression of interest (EoI) for providing consultancy services. In fact, CMPDI has been assigned the task of hiring a consultant for the methodology of fixing the reserve price of blocks and finalising the bid document, and assist in bidding process. A coal ministry official had earlier said the ministry will put 54 blocks on auction in the first round, once the methodology is fixed. "Of the 54 coal blocks to be auctioned, 18 would be for power sector, two for steel sector, 12 for commercial mining and rest for sponge iron and cement sector," he said. The procedure for allotment of coal blocks were announced by a notification by ministry of Coal (MoC), on February 2, nearly six months after the ministry came out with four sets of drafts inviting suggestions from stakeholders to finalise the rules and regulations for the auction. According to the notification, “floor price” will be the minimum price fixed by the Central government for an area containing coal offered for auction by competitive bidding

whereas “reserve price” will be applicable price for an area containing coal which is to be allotted otherwise than through auction by competitive bidding. The notification further said that the Central government will identify the area containing coal for allocation through auction by competitive bidding and will earmark areas containing coal for each specified end use separately for the purpose of auction. The government will invite offers through auction from the companies engaged in the business of specified end uses as mentioned in Section 11A of the Mines and Minerals (Development and Regulation) Act, 1957 for the allocation of coal or lignite blocks in the areas identified and then notify a floor price for each identified area. The companies intending to participate in competitive bidding would be required to submit their offers in two parts i.e. technical bid; and commercial bid, and the successful bidder would be allocated the area containing coal, the notification said. During April 2012, coal minister Sriprakash Jaiswal, had said the government is almost ready to auction coal blocks through competitive bidding. Meanwhile, in a draft report, the Comptroller and Auditor General (CAG) had estimated a `10.6 lakh crore loss to the exchequer on account of allotment of coal blocks during 2004 to 2009 without auction to 100 private and public sector companies. In fact, at present, coal blocks are offered to the end-users on the basis of recommendations by an inter-ministerial screening committee. The coal ministry last year had sought suggestions from stakeholders on draft guidelines on competitive bidding. However, the proposal for auctioning coal blocks through competitive bidding was suggested for the first time about three years ago as the need for the same was felt due to the slow progress in mining and development operations of the coal blocks.

Allocation of captive blocks to date No of blocks to govt. companies Year of allocation Till 2003 2004 2005 2006 2007 2008 2009 2010 2011 (Dec 2011) Total

Gross allotted

De-allocated/ surrendered

Net allocated blocks as on date

17 4 8 32 34 3 1 1 100

2 6 6 1 1 16

17 4 6 26 28 2 1 84

No of blocks to private companies Net allocated Gross De-allocated/ blocks as on allotted surrendered date 24 2 22 1 1 16 1 15 15 15 17 1 16 20 2 18 12 12 1 1 106 7 99

Source: MoC

COAL INSIGHTS 40 may 2012

No of blocks to UMPP/for tariff based bidding

Total net blocks for the year

6 1 1 3 1 12

39 4 21 47 45 21 15 1 2 195

fEATURE

Coal importers defer purchases as Rupee depreciates Rakesh Kumar Dubey

oncerned at the “free fall” of Rupee versus US Dollar, coal import into India is taking a back-seat for the time being. A number of users of imported coal are believed to have deferred their purchases at the request of suppliers following sharp depreciation in the local currency during the past few days, industry sources told Coal Insights. The weakness in Rupee has affected some of the major power utilities, including NTPC Ltd, as well as other coal user segments such as cement and steelmakers. If the trend continues, they said, these industries may suffer from either loss of production or higher raw material costs. “NTPC has deferred its commercial bid opening date by 14 days from May 9 to May 23, while some other companies have deferred their finalisation of tenders, in some cases, at the request of suppliers,” the sources said. Some private sector consumers in the cement sector too have deferred their purchases, preferring to wait for some more time to place their orders in anticipation that there would be some stability in Dollar-Rupee exchange rates in the coming few days, they added. The US Dollar has appreciated against all major currencies in anticipation of fresh financial crisis in Europe as Greece is most likely to come out of European Union and this has impacted purchase of coal by almost all the leading consumers, including those in India and China, causing marginal weakness in international coal prices, the sources informed. According to information available with Coal Insights, the price of coal in the international market has fallen by about 18 USD movement agaisnt INR 57 56.5 56 55.5

Rs/USD

55 54.5 54 53.5 53 52.5

12 5/

20 5/

/0 25

20 5/ /0

/0 24

20 5/ 23

20 5/ /0

/0 22

20 /0

5/ 21

20 5/ /0

/0 16

12 20 5/

/0 15

01 /2 /5

/0 14

/2 11

20 5/ 9/

Source: Insights Research

5/ 7/

12 20 5/

20 4/ /0

20 4/

20 4/ /0

/0 27

percent from a high of around $110/ton fob (for 6000 kcal/kg NAR) in August 2011 to around $90 a ton as on May 22, 2012, but the Indian consumer of imported coal has seen their cost rising because of depreciation in Rupee from around Rs 44.50 a US Dollar to current levels of Rs 55.82 to a US Dollar. Effectively, the cost of imported coal for Indian consumer has gone up by around Rs 330/ton, including freight rates, between August 2011 and May 2012 as the coal which was coming at port delivered price of around Rs 5,700/ton is now costing around Rs 6,030/ton. Chamber seeks RBI, govt intervention Various industry associations and chambers of commerce have, meanwhile, sought intervention by the Reserve Bank of India (RBI) and the government to check the fall in Rupee’s value. Besides adding to India’s fuel crisis, a falling rupee would bring back the inflationary pressure, they said. Already, the government has raised petrol prices by Rs 7.50 per litre on the ground of an increase in oil import bills. The Kolkata-based MCC Chamber of Commerce and Industry on May 23 sought immediate intervention of RBI and the government to check the sharp depreciation in Rupee to retain reserves in the event of prolonged turbulence. “We also recommend infusion of more Dollars by the Central Bank through open market window to curb the Dollar demand thereby enabling the stock market to boom automatically,” the chamber said in a release. The government needs to undertake more focused policy measures by attracting long term overseas investments into India by opening key sectors including retail, insurance, pension, defence and aviation which would increase capital flows and reduce the pressure on the currency, inflation and interest rate, the MCC said. The Indian Rupee was the worst performing currency in Asia in 2011 and the third worst globally after it depreciated by 26 percent against the US Dollar since August 2011 to plummet to a historic low of Rs 55.82 to a US Dollar on May 23. Analysts foresee further fall of the Rupee in future (to about Rs 60 to a US Dollar) against the backdrop of risk aversion hitting global markets, particularly with India’s largest trading partner Europe, and sentiment souring over India because of its gaping trade and current account deficits, paltry manufacturing sector growth and competing political interests. The worst affected by the Indian currency volatility are the importers, including that of coal.

COAL INSIGHTS 41 may 2012

fEATURE

India’s April power generation exceeds target Sanjukta Ganguly

ndia’s power plants generated a total of 74,725.25 million units (MU) electricity in April 2012 and surpassed the target of 71,838.00 set for the month, according to provisional data released by Central Electricity Authority (CEA). The generation in April 2012 was also higher than 71,425.76 MU generated during the corresponding month of the previous year. The target set for April 2011 was 67,777.77 MU, the data revealed. The electricity generation in March 2012 was 77,619.12 MU against a target of 74,050.53 MU for the month, whereas electricity generation in February 2012 stood at 70,988.48 MU against a target of 68,542.65 MU for the month. Of the total generation in April 2012, the thermal sector accounted for 63,674.63 MU, while 2,805.66 MU was generated by the nuclear sector. The hydro sector contributed 8,041.30 MU. Bhutan imports accounted for the remaining 203.66 MU. The target for generation in thermal sector for the month was 60,623 MU, while that for the nuclear and hydro sectors was 2,611 MU and 8,368 MU, respectively. The target for Bhutan import stood at 236 MU. In April 2011, the achieved figures of power generation by the various power sectors stood at 59,818.28 MU for thermal, 2,663.13 MU for nuclear and 8,835.17 MU for the hydro sector. The remaining 109.18 MU was contributed by Bhutan imports during the month. Capacity addition A total of 1760 MW of power generation capacity was added in India during the month of April, taking the total installed generation of the country to 201,637.03 MW, according to provisional data of CEA. The actual capacity addition in March was 5,482 MW and that in April 2011 was 735 MW. The capacity addition target for April 2012 was 660 MW. In April 2012, the entire capacity addition of 1,760 MW took place in thermal sector with private sector adding 1,260 MW (Jhajjar TPS/Mahatma Gandhi TPP of CLP Power – 660 MW and Sterlite TPP in Orissa of 600 MW) and central sector (NTPC) adding 500 MW at Mouda TPP in Maharashtra. 85

All India PLF factor – April 2012 (in %)

80 75 70 65 60 Central

State Sector Program

Pvt. Utl . Sector Achi vement

Al l Indi a

Critical coal stock Inadequate coal supplies by domestic coal companies and lower imports by power utilities have led to critical coal stock position at a number of Indian power plants. According to data available with Coal Insights, a total of 29 plants of the total 89 in the country were faced with critical coal stock position of less than seven days as on April 29. The data further shows that out of the 29 plants facing ‘critical coal stock’ position, 14 were facing ‘super critical’ coal stock position of less than four days. On April 15, out of the 32 plants (out of 90 plants) facing critical coal stock position of less than seven days, 15 were facing ‘super critical’ coal stock position of less than four days. Plants in Maharashtra, Jharkhand and West Bengal were the worst sufferers. Plant load factor The Plant Load Factor (PLF), a measure of the output of a power plant compared to the maximum output it could produce, for the

NTPC suffers generation loss due to coal shortage

TPC Ltd, Asia’s largest power generator, suffered a total generation loss of around 7,882 million units (MU) in 2011-12 due to less availability of around 6.264 million tons (mt) of coal, an official of the power ministry said. The company had imported around 12 mt of coal during the year, but that was not sufficient to mitigate the shortfall arising out of less availability of domestic coal, the official said. Plant-wise generation loss during 2011-12 Station Singrauli Rihand Unchahar Dadri coal Badarpur Vindhyachal Ramagundam Simhadri Farakka Kahalgaon Talcher Kaniha Total

Source: Central Electricity Authority

COAL INSIGHTS 42 may 2012

Coal Shortage in Million Tons (MT) 0.127 0.102 0.095 0.119 0.012 0.517 0.328 0.369 0.135 4.175 0.285 6.264

Generation Loss (MUs) 179 152 132 191 14 749 546 499 195 4855 370 7882

fEATURE

2000 1800

Power supply position

Achievement vs target in capacity addition (in MW)

1600 1400 1200 1000 800 600 400 200 0 Thermal

Hydro Target

Nuclear Achievement

Source: Central Electricity Authority

country for the month of April 2012 stood at 75.21 percent against the planned 72.53 percent. The PLF was 77.80 percent and 78.47 percent for March 2012 and February 2012, respectively. The PLF of power plants of central sector run companies such as NTPC and DVC in April 2012 stood at 82.21 percent compared with same figure achieved in April 2011. The plants in the private sector recorded a PLF of 82.13 percent against the planned 81.47 percent. The worst performer was DPL, which recorded a PLF of 21.32 percent against a target of 55.76 percent. Bokaro ‘B’ TPS which recorded a PLF of 41.91 percent against a target of 67.9 percent continued to be a poor performer.

In the month of April 2012, the country’s peak power demand was estimated at 78,947 MU, but actual availability was only 74,793 MU, reflecting a shortfall of 72,447 MU or 8.2 percent. Earlier, in the month of March 2012, the country’s peak power demand was estimated at 83,247 MU, but actual availability was only 74,793 MU, reflecting a shortfall of 8,454 MU or 10.2 percent. An interesting observation is that despite overall peak shortage of power in the country in March 2012, Chandigarh, Daman & Diu, Dadra and Nagar Haveli, Lakshadweep, Andaman & Nicobar islands and Sikkim did not have any peak power shortages, according to data made available by CEA. Tamil Nadu, however, faced the highest shortfall among all states during peak period with a total shortfall of 1,767 MU. Andhra Pradesh recorded the second highest shortfall during the month under review. The state recorded total shortfall of 1,118 MU in April 2012, against 1,413 MU in March 2012. Maharashtra continued to be a poor performer recording a shortfall of 484 MU against 1,311 MU in March 2012. Madhya Pradesh recorded a shortfall of 556 MU against 898 MU during March 2012 whereas Uttar Pradesh (558 MU versus 792 MU in March) also faced major peak period shortfall during the month.

COAL INSIGHTS 43 may 2012

fEATURE

India’s cement production up nearly 6.3% in FY12 Coal Insights Bureau

ndia’s cement production by large plants, except ACC and Ambuja Cement, in 2011-12 moved up 6.3% to 179.88 million tons (mt) compared to 169.21 mt during 2010-11, according to information made available to Coal Insights by a member of the Cement Manufacturers’ Association (CMA). India’s clinker production by large plants, except ACC and Ambuja Cement, during 2011-12 stood at 137.12 mt, up by 3.19% from 132.88 mt during 2010-11. In March 2012, clinker production by large plants, except ACC and Ambuja Cement stood at 13.4 million tons (mt), up 8.06% over 12.4 mt produced in the corresponding month of the previous year. Clinker production in February 2012 stood at 11.84 mt. Production by large plants, except ACC and Ambuja Cement, in March 2012 moved up 5.64% to 17.99 million tons (mt) compared to 17.03 mt in the corresponding month of 2011, the member said. However, the production in March 2012 was 10.98% lower compared with 16.21 mt in February 2012. The production by ACC and Ambuja in March 2012 was 2.30 mt and 2.19 mt, respectively and if their production is taken into account the total cement production of the country would be 22.48 mt. Production capacity India’s total cement producing capacity (installed capacity of the member companies of Cement Manufacturers’ Association) stood at 244.05 million tons (mt), during 2011-12. According to information provided by a CMA member, the production capacity for the year at the end of March 2012 was up by 2.37% as compared to a total installed capacity of 238.4 mt recorded at the end of March 2011. During the month of March 2012, no capacity has been added. However, a total capacity of 1 mt was added by Jaypee Cements during February 2012 at its plant in Himachal Pradesh, the member added. According to information available with CMA, during 2011-12, a total of 5.65 mt of capacity has been added at various locations which included Jharkhand (Lafarge, Jaypee Cements), Uttar Pradesh (Jaypee Cements), Himachal Pradesh (Jaypee Cements) and Meghalaya (Meghalaya Cements). Despatches India’s cement despatches (except ACC and Ambuja) during 2011-12 stood at 178.99 million tons (mt), up 6.5% from 168.06 mt during 2010-11, according to the CMA member.

The despatches by large plants, except ACC and Ambuja Cement, in March 2012 stood at 18.07 mt, up 6.73% as compared to 16.93 mt in the corresponding month of 2011. The despatches in February 2012 stood at 16.28 mt, he said. Exports India’s cement export, except by ACC and Ambuja Cement, in 2011-12 stood at 1.62 mt, up 6.58% from 1.52 mt during 201011, according to information available with Coal Insights. The export in March 2012 stood at 0.14 mt, up 7.69% from 0.13 mt during the corresponding month of 2011. Meanwhile, export of clinker in March 2012 also rose by 16.67% to 0.21 mt from 0.18 mt in March 2011. The export during the 2011-12 stood at 1.88 mt, down 29.59% from 2.67 mt during 2010-11. Production by cement majors ACC Ltd’s cement production moved up by 7.48% to 2.30 mt in March 2012 compared with 2.14 mt in February. The production in March was also up 5.02% as compared with 2.19 mt produced in March 2011, the company said in a release. The company’s despatches or sales in March surged by 8.84% and stood at 2.34 mt as compared to 2.15 mt in February. Cement despatches of ACC cement stood at 2.18 mt in March 2011. Ambuja Cement Ltd’s March production stood at 2.19 mt, up 10.05% as compared to 1.99 mt produced during the previous month. Production during March 2011 stood at 1.95 mt. The company sold 2.17 mt of cement in March 2012 against 1.93 mt during the same period last year, Ambuja Cements said in a statement. UltraTech Cement Ltd, an Aditya Birla Group company, reported March cement production of 3.92 mt, up 12.97% compared with 3.47 mt produced in February. The company’s production in March was, however, 4.53% higher compared with 3.74 mt produced during the same month of 2011. The cement production during the entire 2011-12 stood at 39.65 mt against 38.44 mt produced during 2010-11. UltraTech’s cement despatches or sales in March stood at 4.01 mt, up 13.92% compared with 3.52 mt despatched in February. The despatches in March were, however, 6.28% higher compared with 3.76 mt despatched in March 2011. The cement despatches during 2011-12 stood at 39.76 mt, up 3.51% compared with 38.41 mt despatched during the corresponding period of 2010-11.

COAL INSIGHTS 46 may 2012

fEATURE

Sponge iron production falls 11.6% in FY12 Sanjukta Ganguly

roduction of sponge iron in India has declined by 11.6 percent in 2011-12 and stood at 20,557,663 tons, as compared to the production of the material during the last year (2010-11) which was at 23,255,349* tons, according to the data made available to Coal Insights by a member of the Sponge Iron Manufacturers’ Association of India (SIMA). However, during the fourth quarter (January-March or Q4) of 2011-12, total production of sponge iron stood at 4,758,173 tons whereas in Q4 of 2010-11, the figure was at 5,981,908 tons, as per the available data. Out of the total sponge iron production during 2011-12, gas based production accounted for 5,150,018 tons (6,189,917 tons in 2010-11) whereas the remaining coal based production of sponge iron stood at 15,407,645 tons (17,065,432 tons in 2010-11). Exports of sponge iron by three major sponge iron manufacturers – namely Welspun Maxsteel Limited, Tata Sponge Iron Limited and Monnet Ispat & Energy Limited – has dipped by 25.29 percent in 2011-12 and stood at 116,159 tons as compared to 155,495 tons in 2010-11, according to the data. In Q4 (January-March) of 2011-12, total exports of sponge

iron by these companies stood at 18,350 tons whereas the exports stood at 32,707 tons during the corresponding period of last year. Production of sponge iron has witnessed a major slump during 2011-12 mainly due to the dearth in the availability of essential raw materials like iron ore and coal. Sharp rise in input prices had prompted most of the sponge iron makers to slash their production during the year. In addition to this, low demand for the material had also played its role in decreasing the production of sponge iron. DRI p‑roduction in 2011-12 (in tons) Month (2011-12)

Total gas based

Total coal based

Grand total

April

561,876

1,399,327

1,961,203

May

501,440

1,463,195

1,964,635

June

513,951

1,433,178

1,947,129

July

559,601

1,325,530

1,885,131

August

518,692

1,328,723

1,847,415

September

404,641

1,275,571

1,680,212

October

341,718

1,177,838

1,519,556

November

311,031

1,154,222

1,465,253

December

325,005

1,203,951

1,528,956

January

377,046

1,200,446

1,577,492

February

346,049

1,202,103

1,548,152

March

388,968

1,243,561

1,632,529

Total

5150,018

15,407,645

20,557,663

Source: SIMA

Export of sponge iron (in tons) Company

2011-12

2010-11

Tata Sponge Iron Limited

23920

24650

Welspun Maxsteel Ltd

35733

92051

Monnet Ispat & Energy Limited

56506

38794

116,159

155,495

Total Source: SIMA

COAL INSIGHTS 47 may 2012

Technology

Tar injection: The answer to met coke crisis

Coal Insights Bureau

lobally depleting coal reserves resulting in a shortage of metallurgical coke, forced steel makers in India to look for options. Auxiliary fuel injection in blast furnaces became a natural choice for them so that a part of the coke used in blast furnaces could be replaced, thereby reducing the demand of coke produced in the coke ovens. The process, called tar injection, or coal tar injection since coal is the most widely injected fuel, involves injecting coal tar into blast furnaces. Coal tar, a by-product of coke ovens, is basically a hydrocarbon. When injected through the tuyeres of a blast furnace, it gives reducing gases carbon monoxide, hydrogen and heat. Thus it replaces the thermo-chemical functions of coke and brings about economy in usage of coke. Moreover, hydrogen in the blast furnace process has thermodynamic, kinetic and aerodynamic advantages over carbon monoxide. Thus, injection of tar, containing more hydrogen than coke, leads to smoother blast furnace operation. The other positive effect of fuel injection is that the removal of a part of coke from the burden increases the ore-coke ratio. This on one hand increases the efficiency of reduction, as more surface area of ore available per unit volume of reducing gas and on the other allows more wind to be blown to balance the increase in the weight of the burden column. These lead to an improvement in the productivity of the blast furnace. Enabling factors Successful tar injection rate of 50-60 kg per ton of hot metal (kg/thm) has been achieved in many of the blast furnaces in advanced countries by adhering to the following factors: ♦♦ Continuous improvement in the quality of iron bearing burden and coke; ♦♦ Close monitoring of gas distribution using under/above burden probe; ♦♦ Exhaustive monitoring of wall temperatures along the furnace height; ♦♦ Burden distribution control using profilometer and mathematical models; ♦♦ Increased use of oxygen in the blast; ♦♦ Strengthening of refractories and cooling, especially in the bosh, belly and lower stack regions of blast furnace.

Fuel injection Fuel injection through the tuyeres of blast furnace is an established technique for seeking improvement in blast furnace operations, viz, a reduction in coke rate, increase in productivity, improvement in hot metal quality and stabilised operation of the furnace. Ease of operation of the injection facilities with a particular injectant, availability and cost of the injectant vis-a-vis that of coke and availability of high hot blast temperature and oxygen for blast enrichment are the main considerations for the choice of an injectant and its injection rate. However, techno-economic considerations have mostly been overriding. Thus, the world practice has witnessed a shift from fuel oil and natural gas injection in 1960’s, to coal injection from 1980’s onwards. Natural gas, coke oven gas, fuel oil, coal tar, oil-coal mixture, tar-coal mixture, pulverized and granular coal and recently waste plastic injection have all been attempted globally. However, presently, coal injection is the most popular due to an assured supply of non-coking coal at a reasonable price on a long-term basis. The second factor favouring coal injection is that it can be injected in greater amounts than the other injectants, barring tar, for a given hot blast temperature and oxygen enrichment and thus can bring more coke economy. The other potential injectant is tar. But tar injection is limited by its poor availability and combustibility problems as compared to coal injection. Depending on its availability, it has been widely used at an injection rate

COAL INSIGHTS 48 may 2012

Technology of 40-60 kg/thm in the US, Japan, Italy, France, Australia and South Africa. At these rates no combustibility problems have been faced. Effect on RAFT

Tar properties ♦♦ Tars are liquid or semi-solid products obtained by thermal decomposition of natural organic materials;

However, injection of tar through the blast furnace tuyeres has a cooling effect on the raceway temperature (RAFT) mainly because of the following effects:

♦♦ In general, tars are dark or black viscous liquids containing small amounts of emulsified water and dispersed high-carbon solid particles entrained during formation;

♦♦ Carbon of coke reaches the tuyere zone already preheated to about 1500 degrees Celsius whereas the tar in injected at a temperature of 80-90 degrees Celsius only;

♦♦ Coal tar is a multi-compound mixture containing aromatic or aliphatic hydrocarbons, together with some heterocyclic compounds;

♦♦ The cracking of hydrocarbons for breaking of C-H bonds also requires some heat. As RAFT is a key parameter for BF performance, this endothermic effect of tar injection is to be compensated either by an increase in blast furnace temperature or an increase in oxygen enrichment of blast, or a drop in moisture content of the blast. It is estimated that a tar injection rate of 40 kg/thm under Indian conditions would require:

♦♦ Coal tar can contain as many as 10,000 different constituents.

♦♦ Increase in hot blast temperature by about 80 degrees Celsius; ♦♦ Increase in blast oxygen enrichment by about 2%. The replacement ratio will be around 1.4 and estimated increase in productivity will be of the order of 3-4%. Tar distribution and injection systems Tar is despatched to the blast furnaces for injection through a suitably sized, steam traced tar pipe line. The flow rate of pre-heated tar at about 90-105 deg.C to the blast furnace is monitored by a mass flow meter. The injection rate is controlled by means of a control valve & control is from PLC. Controlled amount of tar goes to the tar distributor and then to the individual tuyeres through tapping lines from the

distributor. The individual lines have an isolation valve and a three-way solenoid valve. A steam header supply purges steam to all the three-way solenoid valves. It should be possible to selectively inject tar or steam in the individual tuyere by means of selector switches. If the selector switch is on “Auto” mode, then all the tuyeres will be on tar provided healthy process conditions persists. If the selector switch is on manual mode, then the selection of tar injection for the individual tuyere can be achieved. Stoppage of tar injection The tar injection will be suspended under the following conditions: ♦♦ When the hot blast pressure reduces to a minimum level (can be set as desired ♦♦ based on experience); ♦♦ When coal tar pressure and temperature at furnaces reduces to a minimum level (about 3.5 kg/cm2 and 80 deg. C respectively); ♦♦ When compressed air pressure reduces to minimum level of 3.5 kg/sq.cm; In the event of suspension of tar injection during the above mentioned conditions, the steam purging starts automatically and will be shut off after preset time. Conclusion It is essential to maintain a constant tar injection regime with respect to tar injection rate (kg/hour/tuyere), continuity of injection for the whole day (least total stoppage) and uniformity of injection circumferentially. It is also essential to maintain a constant RAFT operation for tackling the thermal disturbance created by tar injected into the tuyere. Also, hot blast temperature and oxygen enrichment should be kept at the maximum attainable level for creating conditions for complete burning of tar. Optimum value of RAFT for different levels of tar injection should be worked out during sustained trials.

COAL INSIGHTS 49 may 2012

interview

‘Beneficiation is the key to future coal use in India’ Arindam Bandyopadhyay The coal beneficiation industry in India is at the crossroads. On one hand, the ambitious new washery projects of Coal India Ltd (CIL) are stuck due to procedural delays; on the other hand, the private sector seems to be giving up. There has hardly been any new capacity build-up in the last few years. Meanwhile, the demand for washed coal is increasing by the day. Standing at this juncture, MBE Coal & Mineral Technology India Pvt Ltd (MBE CMT), a global leader in the mineral beneficiation business, offers valuable insights into the true potential of the sector. In an exclusive interview, CEO and director of MBE CMT India Pvt Ltd, Gurudas Mustafi, shared his thoughts with Coal Insights. A highly acclaimed professional with a number of international papers to his credit, Mustafi is considered a reference point for the mineral beneficiation industry at large. Through the course of the conversation, he shed light on the crucial role played by coal and mineral beneficiation, the lack of awareness about its benefits, and most importantly, the choice of the right technology for the Indian coal users.

Excerpts: As a leading player in coal beneficiation, how do you view the current status of the coal washery business in India? Honestly speaking, the current situation is not that encouraging. CIL had sometime back advertised about adding, in the first phase, 100 million tons (mt) of washing capacity by setting up around 19 washeries. Two or more years have passed. But we are yet to see any construction work at the site. On the other hand, the private players who were till then investing in building coal washeries for either their captive

use or for providing washed coal to the end users – like state electricity boards (SEBs), independent power producers (IPPs), cement and sponge iron manufacturers – were caught in a dilemma as to whether they should further invest in building washeries. With these CIL washeries coming up, it was playing at the back of their minds if their plants will remain under-utilised. Coupled with this was the economic slowdown, recession, environmental clearance related issues and above all high lending rates which made entrepreneurs lose interest as viable projects looked unviable. Overall, the current scenario does not look very bright.

Coal benficiation plant at Bina, NCL

COAL INSIGHTS 50 may 2012

interview

Deshelling plant at Bina, NCL

When this impasse will be over is difficult to predict. It depends largely on how the government would respond to this. It is a policy decision that has to be taken at the highest level. What is the future potential of this segment?

“For sponge iron and cement sectors, a captive washery will be ideal. Small players can have a washery on cooperative basis. This will help ensure consistent quality of coal”

Notwithstanding the current stagnation, this segment holds high prospects in coming years. Both in coking and non-coking coal, India will need new washeries if the growth in user industries is to continue. The government has set a target to provide power to all by 2020. In India, as in most other countries, thermal power would continue to remain the dominant source of energy. There is nuclear, hydro, solar and renewable coming up, but these can play only a supplementary role. And you need non coking coal for that growth in thermal power generation. As per the environment ministry (MoEF) guidelines, you have to use washed coal of < 34% ash in all power stations located more than 1000 km from coal source and also those located in urban and environmentally sensitive locations. To conform to these guidelines, you need beneficiation. So washing of coal definitely has a future for non-coking coal used in power sector. For sponge iron and cement industries, getting CIL linkage coal is becoming difficult by the day. They also need consistent

ash content. Many of these plants buy coal from e-auction where the coal quality fluctuates significantly. What will they do? They need to have captive washeries or must go for imports. But imported coal comes at a premium and the prices show an upward trend. Recently, Indonesia has been talking of increasing the export prices with an expressed intention of saving the resources for its own future use. So you have to depend on the domestic coal. And for that, you need to have washing capacity. At this juncture when quality of raw coal is inconsistent to a great extent, it will be ideal to have their captive coal washery or for small players to have a washery on cooperative basis. This will help ensure consistent quality of coal put into the kilns and at the same time use the discards in power generation. This is more so because it may not be feasible for CIL to give them washed coal in the near future. Many sponge iron plants, including that of Jindals and Bhusans, and some cement plants belonging

COAL INSIGHTS 51 may 2012

interview to Grasim, UltraTech and ACC have thus built up their own captive washeries and they generate power too from washery discards. In fact, there is a big vacuum in this segment of coal beneficiation, and to meet the vacuum you need to have more number of washeries. It was for sure that the government is fully aware of this and only has to do something to break this shackle. In steelmaking, coking coal prices are increasing too. Here, you cannot completely do away with imports though. Even after washing our coking coal, we still need to blend it with imported coal. But without washed coal from domestic sources, import quantity will go up substantially. That may affect a plant’s competitiveness in today’s globalised economy. However, in coking coal, the shortage of washed coking coal to a great extent can be made up if the capacities of the existing washeries are fully utilised. To do this we first need to do a proper technical audit of the plants and invest in modernising and refurbishing the existing washeries of BCCL and CCL which were built more than 30 to 40 years back and being operated without any proper upgradation. Besides this new coking coal washeries can be added. Tata added Bhelatand washery after Jamadoba and West Bokaro which are also quite old but from time to time investments have been made in these washeries towards modernisation and this helped in achieving both better quality and capacity utilisation.

with these, of course, there are huge environmental benefits. As for the cost involved, it depends a lot on how we structure it. We have already changed the coal pricing from the earlier method of useful heat value (UHV) to gross calorific value (GCV). That was the right thing to do; still I think the range between the grades should be reduced which will give both provider and user the best benefit from price and quality point of view respectively. Can you give us a brief outline on the technology used for beneficiation? Which technology is suitable more for Indian coal and why?

There are different beneficiation processes as we all know; for example in coal the proven processes are Jigging technology, heavy media or dense media technology and flotation. I always feel we should know the customer’s requirement, and be transparent with him by giving the correct solution. It helps at the end in building a long lasting relation. Which process and technology or equipment per se should be adopted is not necessarily required to be the guiding factor of what is being followed in other countries but on what are the conditions and requirement of ours. For instance, we require non coking coal of <34 percent ash for our power stations. Is that acceptable in the US or Europe? No. Then why it should be that we need to follow their washing process? Instead, the selection of technology should depend on the quality of raw coal, and quality requirement for our end product. What are the benefits of coal beneficiation to the user I feel bad for those entrepreneurs who at times get industries? What are the costs involved? misguided by people who try to sell their own technology. For sponge iron and cement manufacturers, coal is one of the There are many players in this business who have only one main raw materials for producing their end product; their process and try only to advocate their product and process kilns need coal of consistent quality to produce the desired technology. In the process, these entrepreneurs end up in qualitative end product. This can be achieved only by feeding selecting a technology or equipment which is not the best beneficiated coal. Even for thermal power generation, if the suited one or is over designed for his specific requirement coal quality is not consistent, the plant load factor (PLF) from techno-economical perspective. However in the long fluctuates, furnace oil consumption increases, boiler tubes run, this sort of push-selling does not help. erode fast, and maintenance cost goes up. The fact remains that both the processes (jig and heavy Then there is a benefit by saving in huge transport costs media) have their advantages and disadvantages and we as by not transporting stones. Our railway system is already technology providers should try to explain the merits and over burdened. Through coal washing, we can actually ensure demerits of both based on the raw coal and end product better utilisation of the existing rail transport capacity. Along requirements in an unbiased manner, leaving it to the entrepreneur or end user to take the final call. In many “We first need to do a proper of my technical papers presented in international and technical audit of the plants domestic forums, I have highlighted the areas or points which need to be seen or taken into consideration and invest in modernising before deciding on the process.

and refurbishing the existing washeries of BCCL and CCL which were built 40 to 30 years back and are being operated without any proper upgradation”

What are the major stumbling blocks for overseas technology providers to tap the Indian market? Generally speaking, the biggest stumbling block for foreign technology providers is the delay in taking decisions in the coal industry. Earlier, CIL used to float tenders and award projects on an EPC basis. Then they tried the build-own-operate

COAL INSIGHTS 52 may 2012

interview

“I feel bad for those entrepreneurs who at times get misguided by people who try to sell their own technology…. In the process, these entrepreneurs end up in selecting a technology or equipment which is not the best suited one” (BOO) model. At that time, a number of foreign players had participated. Four tenders were decided and Letter of Intent issued but ultimately none of them matured and the foreign players who invested a lot of time and money had to return empty handed. Nowadays, CIL has decided to award projects on buildoperate-maintain (BOM) basis. It was considered ideal for the Indian scenario. But subsequently, as an after thought, some new conditions were put which played the spoilsport. For example, the conditions put in some latest tenders for giving bank guarantee for the entire project cost is something the foreign players will not find attractive. As a matter of fact, these conditions have resulted in further delay in finalising CIL tenders. Some tenders were floated again with these clauses but I do not think the foreign players will be coming to bid for those projects. In fact many of the good EPC companies who were participating earlier have refrained from quoting. Who are your major competitors in India and globally? In coal beneficiation, Schenck Process of China is emerging as a competitor. This company has started Indian activities in coal beneficiation. There is also Metso Minerals, but we don’t get them as competitor globally in coal, but only in ore sector. In India,

however, they compete in the field of coal beneficiation as well. And of course, there are companies like Allmineral and Bateman Group of South Africa. The latter one is mainly in ore and other mineral beneficiation. They are also trying to come the Indian market. What are your prescriptions for the growth of the Indian coal beneficiation industry?

India needs to wash the coal especially for the power sector. Washing is an auxiliary activity for mining. In India, the mining sector itself is facing several challenges. All the people concerned – ministries, planning commission, technocrats and bureaucrats – should put their heads together and decide on the future of the mining projects. As I said earlier, Coal India had decided more than two years back to set up around 19 washeries on BOM basis in the first stage. But to date, construction work at site has not started in any of them. So I feel, in between CIL can also think of dovetailing a washery unit with each of its existing coal handling plants or new coal handling plants being planned or under construction that have many of the required clearances in hand. This will go a long way in easing the problem of shortage of washed coal availability for power stations. For the Indian economy as a whole, both the environment and industry are equally important. We will not find minerals in cities and must divert forest lands or allow mining activity in remote locations. But we need to strike a balance. The policymakers should sit together and decide on the future of the mining industry. Otherwise, we will need to keep everything as it is, and import all our requirements. But is that possible? My humble submission is that the government should take a proactive stance and realise that we cannot allow the issue of mining, and therefore washing, hang on forever.

CESC washery at Sarisathali, West Bengal

COAL INSIGHTS 53 may 2012

CORPORATE

Coal consuming sectors show mixed results in FY12 Coal Insights Bureau

he coal consuming sectors in India which primarily comprises of power, cement and steel are seen to depict a mixed financial health during 2011-12. Out of these three sectors, power sector, which records the highest consumption of coal for energy generation, have put up a comparatively less satisfactory performance during the year with some of the major power producers like Tata Power, Adani Power not doing so well. Others like NTPC JSW Energy and CESC Limited managed to post commendable profits during the fiscal. Despite being adversely affected by poor demand conditions during the monsoons, the cement sector has

shown a fair performance with most of the major cement manufacturers earning sizeable profits during the year such as UltraTech Cement, Shree Cement, JK Lakshmi Cement and many others. However, the scenario seems to be somewhat gloomy for the steel sector as the major steel producers like Tata Steel, JSW Steel and many others have witnessed their profit margins plummeting sharply. The picture is even worse for the other coal consuming sectors such as sponge iron, pig iron, paper etc. A few snapshots of the financial performance of a number of coal consuming companies are given below:

NTPC net profit at `9,814.66 cr

compared to `2,135.19 crore during 2010-11. However, total expenditure of the company was at `3,355.05 crore against `1,103.31 crore during the previous fiscal.

NTPC Limited, the largest power utility in India, has posted a net profit of `9,814.66 crore during the fiscal year ended March 31, 2012, up by 4.99 percent as compared to `9348.23 crore earned during 2010-11, the company said in

a filing to BSE. The company’s total income from operations stood at `65,893.68 crore in 2011-12 while it stood at `59,505.38 crore during 2010-11. Total expense of the power utility stood at `53,559.70 crore, with the fuel cost standing at `43,302.66 crore. The corresponding figures for the previous year were `47,788.31 and `36,414.35 crore, respectively. NTPC consolidated results for FY12 (` cr) Particulars Income from operations

Year ended March 31, 2012

Year ended March 31, 2011

65,893.68

59,505.38

Total expenses

53,559.70

47,788.31

Profit from ordinary activities before tax

13,137.26

12,392.33

Net profit

9,814.66

9,348.23

Adani Power posts loss in FY12 Adani Power Limited, a part of the Adani group, has posted loss of `294.5 crore during the year ended March 31, 2012, as compared to `513.18 profit in 2010-11, the company said in a filing to BSE. The company’s total income from operations stood at `4,089.79 crore as

CESC’s net profit up in Q4 CESC Limited, a part of the RPG Group, has posted net profit of `266 crore in the fourth quarter (Q4) of 2011-12, up by `154 crore as compared to `112 crore earned during the corresponding quarter of 2010-11. Total income of the company during the quarter stood at `1,417 crore against `895 crore during Q4 of 2010-11. CESC’s total expenses during Q4 of 2011-12 stood at `947 crore as compared to `629 crore during the corresponding quarter of the previous financial year. Thermax net profit up 6.54% Thermax Limited, a leading provider of energy and environment solutions, posted net profit of `406.86 crore in the year ended March 31, 2012, about 6.54 percent up from last year’s figure of `382.41 crore, the company said in a statement. Total revenue earned by the company in FY12 also showed a steady rise of 9 percent and stood at `5,304.05 crore as compared to `4,852.36 crore in FY11. Export income including deemed exports, during the financial year, increased to `1,143 crore against `1,066 crore in 2010-11. Owing to the current economic slowdown, especially in the power sector, the order backlog on a consolidated basis, as

COAL INSIGHTS 54 may 2012

CORPORATE on March 31, 2012, has declined to `4,828 crore from last year’s `6,446 crore, the statement added. Essar Oil posts loss of `4,199 cr Essar Oil Limited (EOL), a part of the Essar group, has posted loss of `4,199 crore during 201112 as compared to a profit of `654 crore during the previous fiscal (2010-11), the company said in a statement. Gross revenue of the company during the year stood at `63,340 crore during 2011-12 against `53,119 crore during 2010-11. Commenting on the performance, EOL’s managing director and CEO, L.K. Gupta, said, “We have completed a very challenging yet satisfying year at Essar Oil. During the year, we completed our refinery expansion programme, making us the second largest single location refinery in India and one of the most complex refineries in the world. This has opened up new markets for our products and provides flexibility for sourcing of crudes. With our optimisation programme now nearing completion, we have reached the closure of our major capex programme. With this, we have significantly moved up in the refining value chain and are now fully focused on delivering the value of our investments to our stakeholders.” Chief financial officer, EOL, Suresh Jain, said, “With our capex funding requirement coming to an end, ensuing CDR exit, and benefits of higher capacity and complexity will soon be visible in terms of incremental operational cash flows, which will be utilised to deleverage the balance sheet and boost our valuation.“ TEECL sees marginal rise in PAT Techno Electric and Engineering Company Ltd (TEECL), a leading EPC company in the power sector, has announced its profit after tax (PAT) for the financial year 2011-12 increased by 7.11 percent to `120.77 crore from `112.75 crore reported in 2010-11. Net sales during the year increased by 14.59 percent to `819.6 crore from `715.24 crore, whereas EBIDTA increased by 37.39 percent to `224.33 crore from `163.28 crore in 2010-11, the company said in a statement. During the fourth quarter (January-March of 2012), the company reported net profit of `14.64 crore (`19.85 crore last year), net sales of `218.01 crroe (`196.48 crore) and EBIDTA of `34.22 crore (`28.59 crore), the statement added. JSW Energy Q4 net up JSW Energy Limited, part of the JSW group, has posted net profit of `225 crore during the fourth quarter (Q4) of 2011-12, recording a marginal growth of 9 percent over the corresponding

quarter of the previous year (2010-11). The bottomline was boosted by an increase in net generation from additional capacity and consequent increase in interest and depreciation cost, the company said in a statement. The company has considered the unrealised gain of `62 crore, as an exceptional item of income during the quarter, due to the unusual and sharp movement in the value of the Indian Rupee against US Dollar, the statement added. However, during the year ended March 31, 2012, the company earned net profit of `171 crore while total income from operations stood at `6,119 crore. Total expense of the company during the year stood at `5,174.39 crore against `2,997.11 crore during 2010-11. During the quarter, JSW Energy has completed the sale of balance banked power aggregating to about 49 million units (MU). In fact, under the Power Conversion Agreement, 408 million units have been generated during the quarter and the aggregate generation under this arrangement for the year ended March 31, 2012 stood at 895 MU. Net generation from different units (in million units) Location

Q4, FY12

FY12

Vijayanagar

1,772

5,905

Ratnagiri

2,018

6,259

827

1,430

4,617

13,594

Barmer Total

Tata Power posts `628 crore loss in Q4 Tata Power has reported a consolidated loss of `628.75 crore in the three months ended March 2012, hit by non-cash impairment charge provision of `815 crore related to the Mundra Ultra Mega Power Project (UMPP). The country’s largest private power producer had a consolidated profit after tax (PAT) of `625.02 crore in the 2011 March quarter. Consolidated revenue climbed 44 percent to `7,234.76 crore in the three months ended March 2012. In the year-ago period, the same stood at `4,985.84 crore. In a statement, Tata Power said the net loss was mainly on account of additional provision made for impairment of `815 crore related to the Mundra UMPP. Steep rise in Indonesian coal prices is hurting the UMPP, it said. The company has an installed capacity of over 5,000 MW. Tata Power Managing Director Anil Sardana said it was looking forward to early resolution on imported coal compensation issue for long-term sustenance of power sector. Recently, the company set up a joint venture – Cennergi – with Exxaro to explore electricity generation opportunities across South Africa, Botswana and Namibia.

COAL INSIGHTS 55 may 2012

CORPORATE Adani Ports' net profit up 20%

India Cements’ net profit up

Adani Ports & Special Economic Zone Limited, a part of the Adani group, has recorded a growth of 20.03 percent in net profit during the year ended March 31, 2012 to `1102.06 crore as compared to `918.14 crore in 2010-11, the company said in a filing to BSE. Total income of the company during the year stood at `3,270.80 crore against `2,000.11 crore in 2010-11. The company’s total expenses stood at `1,668.58 crore as compared to `939.46 crore during the previous fiscal. GPPL posts 18% rise in Q1 operating profit Gujarat Pipavav Port Ltd (GPPL), a leading private port of India, has reported about 18.4 percent rise in operating profit to `45.10 crore in the first quarter ended March 31, 2012, compared to `38.15 crore registered in the same period last year. Total income rose to `103.68 crore in Q1, 2012 as against `86.25 crore recorded for the same period previous year. Total expenses stood at `55.29 crore for the quarter under review. Gross profit for the quarter stood at `27.82 crore, more than double `13.43 crore posted in the same quarter last year. During the quarter, the port registered a 21 percent growth in container volumes compared to Q1 2011. In this particular quarter, in the month of January, the port handled the highest number of containers on a monthly basis. GPPL’s quarterly results (in ` cr) Mar’12 Sales

Dec’11

Sep’11

Jun’11

Mar’11

100.38

115.94

97.87

99.93

83.06

Operating profit

45.10

59.00

45.03

40.94

38.15

Interest

20.57

20.76

21.12

21.39

21.93

Gross profit

27.82

43.10

26.34

24.03

13.43

0.33

0.64

0.31

0.26

0.14

EPS (`)

Kesoram Ind posts loss in FY12 Kesoram Industries Limited, a leading cement manufacturer of India, has posted loss of `379.74 crore during the financial year ended March 31, 2012 as compared to loss of `210.21 crore in 2010-11, the company said in a filing to BSE. The company’s total income from operations stood at `5,920.86 crore in 2011-12 as against `5,438.43 crore during 2010-11. During 2011-12, total expenses of Kesoram Industries stood at `6,316.18 crore whereas the expenses stood at `5,448.27 crore in 2010-11. Out of the total expenses incurred in 201112, power and fuel expenses were at `761.50 crore as against `689.29 crore in 2010-11.

India Cements Limited, a leading cement manufacturer, has posted net profit of `259.85 crore during the year ended March 31, 2012, sharply up by `191.85 crore as compared to `68

crore earned during 2010-11. During 2011-12, total income from operations of the company stood at `4,645.49 crore as against `3,500.72 crore during 2010-11. The company had incurred total expenditure of `3,974.08 crore in 2011-12 against `3,311.07 crore in 2010-11. Srei Infra PAT down in FY12 Srei Infrastructure Finance Limited has reported a decline in profit after tax (PAT) to `112 crore during FY12 against `179 crore in FY11, owing to sharp depreciation of Rupee against Dollar, resulting in a notional forex loss of `64,80 crore. The successive interest rate hikes also brought profits under pressure. The profit before tax (PBT) stood at `237 crore during FY12 as against `289 crore in FY11. The consolidated total income of the company grew by 49 percent to `2,446 crore for FY12 from `1,638 crore in the previous year. Consolidated disbursement was up 49 percent during 2011-12 (FY12) to `18,600 crore, against `12,497 crore in the previous year. Announcing the financial results, company chairman and managing director Hemant Kanoria said, “The disbursements have risen this year by 49 percent but the profits have been under stress, primarily due to steep depreciation of Rupee, which has resulted in substantial MTM forex loss and also because of multiple interest rate hikes creating pressure on margins. However, the focus has been on maintaining good quality of assets, as the economy is also facing challenges.” For the quarter ended March 31, 2012 (Q4), the consolidated PAT was `13.21 crore, around 7 percent lower than `14.20 crore reported for Q4 last year. However, total income from operations was higher by 3.8 percent to `653 crore in Q4FY12, against `628 crore in Q4FY11. Ultratech PAT up in FY12

COAL INSIGHTS 56 may 2012

UltraTech Cement, an Aditya Birla Group company, has reported an increase in its profit after tax (PAT) to `2,446 crore in FY12 as compared to `1,719 crore in FY11.

CORPORATE Net sales during the year stood at `18,166 crore as compared to `15,406 crore in the previous year. Profit before interest, depreciation and tax was `4,519 crore as against `3,453 crore a year ago. However, the results for the year ended March 31, 2011 have been recasted to include Samruddhi Cement Limited’s performance for the period April 1, 2010 to June 30, 2010 for a like-for-like comparison. The results therefore were strictly not comparable with the corresponding period of the previous year, the company said in a statement. During the fourth quarter (Q4), net sales stood at `5,337 crore as compared to `4,490 crore in the corresponding period of the previous year. Profit before interest, depreciation and tax was `1,464 crore versus `1,127 crore in the same period of the previous year. PAT was `867 crore compared to `727 crore in Q4 FY11. Ultratech’s financial results for FY12 (in ` cr) Year ended 31.03.12 Net sales

Quarter ended

31.03.11(LFL#)

31.03.12

31.03.11

18,166

15,406

5,337

4,490

PBIDT

4,519

3,453

1,464

1,127

PAT

2,446

1,719

867

727

2010-11. Out of the total expenses incurred, expense for power and fuel during the quarter stood at `680.33 crore whereas the figure stood at `482.55 crore during the same period previous year, according to company sources. Shree Cement’s net up 27% Shree Cement, a leading cement manufacturer in India, has reported a 27.3 percent rise in net profit to `266.97 crore in 2011-12, compared to `209.70 crore posted in 2010-11. Total income from operations was up 31.7 percent to `4,625.22 crore in FY12, against `3,511.87 crore in FY11. Total expenses for the year stood at `4,251.92 crore in FY12 versus `3,302.79 crore a year ago. Of the total expenses in FY12, power and fuel costs accounted for `1,158.4 crore, higher than `904.81 crore posted in the previous year. During 4QFY2012, Shree Cement posted 38.1 percent y-o-y and 73.9 percent y-o-y growth in its top-line and bottom line on account of a healthy operational performance. Cement volumes rose by 20.5 percent y-o-y to 3.47 million tons (mt), while adjusted realisation was up 9.4 percent y-o-y at `3,611 per ton. Shree Cement’s financial results (in ` cr) Q4 FY12

Q4 FY11

Year ended March 2012

Year ended March 2011

#Like-for-like

Income from operations (net)

1,478.01

1070.12

4625.22

3511.87

The Board of Directors recommended a dividend of 80 per cent, at the rate of `8 per share of face value of `10 each aggregating to `219 crore. The company will absorb the corporate tax on dividend amounting to `36 crore, resulting in a total payout of `255 crore. The company’s initiative towards setting up of additional clinkerisation plants at Chhattisgarh and Karnataka together with grinding units, bulk packaging terminals and ready mix concrete plants is progressing on schedule and are expected to be operational from early FY14. Consequently, the company’s cement capacity will be enhanced by 10.2 mtpa.

Total expenses

1339.43

1039.00

4251.92

3302.79

Profit/loss from operations before other income, finance 138.58 costs and exceptional items

31.12

373.29

209.07

Net profit/loss

65.73

266.97

209.70

ACC posts lower Q4 profits ACC Limited has posted net profit of `151.55 crore for the quarter ended March 31, 2012, down 56.72 percent from the figure of `350.17 crore earned during corresponding period of last year, the company said in a statement. Net sales of the company during the period stood at `3,015.22 crore against `2,541.37 crore during corresponding period of last fiscal. During 2011-12, total expenses of the company stood at `2,535.47 crore as compared to `2,118.52 crore incurred during

114.27

Ambuja Cements Q4 net down Cement major Ambuja Cements Limited has posted net profit of `312.22 crore for the quarter ended March 31, 2012, down 23.38 percent from `407.48 crore earned during corresponding period of last year, the company said in a statement. Net sales of the company during the period stood at `2,633.31 crore against `2,212.51 crore during the corresponding period of the last fiscal year. During 2011-12, total expenses of the company stood at `2,009.73 crore as compared to `1,701.58 crore incurred during 2010-11. Out of the total expenses incurred, expense for power and fuel during the quarter stood at `626.88 crore whereas the figure stood at `481.62 crore during the same period last year, according to company sources.

COAL INSIGHTS 57 may 2012

CORPORATE

BCCL advances date for revival Coal Insights Bureau

harat Coking Coal Ltd (BCCL), the leading supplier of coking coal in India, is aiming to stage a financial turnaround by 2012-13 (FY13), one year ahead of the target set by the Board for Industrial and Financial Reconstruction (BIFR), company sources told Coal Insights. “We are already earning net profits for the last few years. Going by the recent trend, the company is expected to achieve positive net worth by 2012-13. It’s now a matter of how much profit we may earn in the current year (FY13),” a senior official said. This was in line with the recent announcement by coal minister Sriprakash Jaiswal who said in April that the company may get rid of the tag of being a sick company by the end of 2012. This, if achieved, will take the company out of BIFR’s purview one year ahead of schedule. “We were given time till 2013-14. We are aiming to achieve this by the current year (2012-13) itself,” the official said. BCCL is one of the two loss-making subsidiaries of Coal India Ltd (CIL), the other being Eastern Coalfields Ltd (ECL). The company had been perennially incurring operating losses since the beginning, which resulted in huge accumulated losses. Subsequently, BCCL was referred to BIFR in 1994-95 when the company reported a negative net worth of `171 crore and its accumulated losses stood at `1,293 crore. Later on, the management took a slew of measures to improve production, increase sales realisation and reduce expenditures. Also, CIL mobilised funds for reviving its ailing subsidiaries. The company started making a turnaround from 200506, when it earned profit solely from its operations, for the

BCCL raw coal production

*production target for FY13

first time in its history. The following years have seen steady improvement in operations and financial performance. However, going by the financial position as of March 2011 (the results for FY12 are likely to be announced shortly), the target of achieving overall turnaround by FY13 seems to be slightly ambitious. Tough job ahead Despite the steady improvement and earnest efforts by its staff, BCCL management may find it a little difficult to achieve positive net worth by the current financial year. As of March 2009, BCCL had total accumulated loss of `8,315 crore. The company earned net profit of `794 crore (after provisioning for fringe benefit tax and prior period

BCCL ‘s opencast mine at Jharia

COAL INSIGHTS 58 may 2012

CORPORATE

ECL making slow progress Coal Insights Bureau

astern Coalfields Ltd (ECL), an ailing subsidiary of Coal India Ltd (CIL) is making slow progress towards revival even as the physical performance shows steady improvement. The company, as of March 2011, had total accumulated loss of `8,127.42 crore. This was slightly lower than `8,233.99 crore reported a year ago. Over the last two years (FY09-FY11), ECL has reduced its outstanding loss amount by more than `400 crore. The company earned net profit in FY10 and FY11. However, the net profit figure declined from `333 crore in FY10 to `106 crore in FY11, mainly due to higher depreciation which increased by around `118 crore. As for physical performance, ECL witnessed continuous increase in production from 24.06 million tons (mt) in 2008 to 30.80 mt in 2011. There was also significant reduction in manpower and improvement in productivity during the period. ECL operational statistics 2008

2009

2010

2011

Production of raw coal (in mt)

24.06

28.13

30.06

30.80

OB removal (in mt)

39.98

43.07

49.74

56.25

Offtake

25.44

28.26

29.22

29.76

1.07

1.33

1.46

1.57

Productivity (OMS)

Source: ECL

adjustment) in 2009-10. As a result, the accumulated loss figure was reduced to `7,520 crore as of March 2010. In the following year (2010-11), BCCL earned net profit of `1,094 crore (after provisioning) and thus further reduced the outstanding loss figure. As of March 2011, loss carried forward to balance sheet was `6,427 crore. Now, BCCL needs to earn combined net profit equal to this outstanding amount (as of March 2011) during FY12 and FY13 to wipe off the accumulated losses and become positive net worth company. This, as it seems, would not be an easy task. Production growth Meanwhile, the company has continued to achieve its production target set for the year. In 2011-12, BCCL recorded total production of 31.2 million tons (mt). This was higher than the annual target of 30.2 mt. This was in line with the production performance a year ago. In FY11, the company reported total production of 29.004

mt, compared to a target of 29 mt. The FY11 production was 5.42 percent higher than 27.512 mt produced in FY10. The company achieved positive growth in production at a time when CIL as a whole witnessed zero growth in production in subsequent years. In the current financial year (FY13), BCCL has been given a production target of 32 mt, company sources said. Also, the company achieved significant growth in terms of operating parameters such as OBR removal, overall output per man shift (OMS), wagon loading and coal offtake. Washery projects Another area of growth that the company is targeting is the supply of washed coal to the user industries. BCCL currently has total coal beneficiation capacity of around 6-7 mtpa. The company has been given mandate for six new washeries by CIL board. This would be part of the 20 new washery projects that CIL has planned for. The six new projects are: Madhuban, Patherdih, Dugda, Dahibari, Patherdih (II) and Bhojudih. The combined capacity of these six projects would be 18.6 mtpa. Once complete, these projects would take the total washed coal capacity of BCCL to 24-25 mtpa, the sources said. Of these new projects, two projects, namely Madhuban and Patherdih I have already been awarded to HEC, Ranchi and Monnet Ispat and Energy, respectively. Site activity at these projects is likely to be started in June-July. As for Dugda, the sources said, BCCL board has taken a decision on the preferred bidder on March 3. But the award of contract is not yet announced. The proposal has been sent to CIL board for its approval. Explaining the cause of the delay, the sources said that since BCCL is a BIFR referred company, its board has limited powers in taking investment decision. It cannot decide on investment proposals of more than `20 crore. But Dugda project will require an investment of around `100 crore. So the CIL Board has to ratify the same. Once the proposal is cleared, the Letter of Intent (LoI) will be issued. The same procedure was followed for Madhuban and Patherdih I (5 mtpa) projects. For the other three projects, tenders are yet to be floated. Conceptual reports are being made by CMPDIL, Ranchi. In some cases, coal testing is on and tender document is being made. “All these projects were initially targeted to be completed by the end of Eleventh Plan (March 2012). We foresee them to be complete by March 2016,” an official said. Company sources felt the prolonged delay in the first few projects will not be replicated in case of later ones. This is so because of the company’s expected turnaround from FY13. “From Dahibari project onwards, we expect to be able to sanction the projects on our own, as the company should be out of BIFR by 2012. Once we achieve this, we won’t need to go to CIL for clearing these investment approvals, and thus save time on them,” they elaborated.

COAL INSIGHTS 59 may 2012

CORPORATE

SCCL production growth slackening, aims 53 mt in FY13 Coal Insights Bureau

ingareni Collieries Company Ltd (SCCL), which recorded stupendous growth in production during the last few years, seems to be slowing down. From an average annual growth of over 10 percent during 2007-08 (FY08) to 2009-10 (FY10), the company’s production growth dropped to 1.7 percent in FY11 and FY12. SCCL achieved total production of 52.21 million tons (mt) in FY12, against 51.33 mt in FY11. The FY12 production barely reached the yearly target of 52.20 mt. “Last year’s production was affected by month-long workers’ agitation and heavy rains. However, the production increase in the later months ensured that the company achieves the target,” company sources said. The slowdown in growth, however, was only on the expected lines, industry sources said. This is so because most of the operating mines of the company are nearing maturity. Although adoption of new mining technology such as longwall mining helped increase production to some extent, the high growth phase is unlikely to be sustained, they said. The company at this stage needs to explore and mine new blocks to keep on growing its production at significant rate. In the current year (FY13), SCCL has been given a production target of 53.1 mt, which again marks a low 1.7 percent growth over production last year. SCCL has been continuously achieving the target since 2002-03. In the current year too, company sources said, the company would surpass the given target. Nevertheless, the start to the new financial year has not been very impressive. SCCL produced 3.16 mt in April 2012, below the monthly target of 4.25 mt and also less than 3.5 mt produced in April last year.

25.00

2.00%

20.00

0.00%

Actual

Growth Rate

2011-12

4.00%

2010-11

30.00

2009-10

6.00%

2008-09

8.00%

35.00

2007-08

40.00

2006-07

10.00%

2005-06

12.00%

45.00

2004-05

50.00

2003-04

14.00%

2002-03

55.00

2001-02

Quantity (in mn tons.)

Production performance of SCCL

Commenting on the same, a company official said production was kept at a low level to liquidate the ground stock. Also, the extreme weather conditions of summer days affected productivity. The production would pick in the coming months, he assured. New projects Meanwhile, the new projects of SCCL in mining and other sectors are progressing in full swing, the sources said. These include new mining block development, thermal power projects and the company’s proposed entry into wind power segment. Some of the projects, however, are likely to be delayed due to various reasons, mainly land acquisition, they said. The Adriyala Shaft Project, which received government approval in December 2009, has a rated capacity of 2.81 mt and a life of 32 years. The total capital outlay for the project is `846.06 crore and sanctioned capital is `779.26 crore. The approved date of completion is September 2012. However, the anticipated date of completion for getting rated output is December 2013. The KTK Longwall Project, which was approved in December 2008, has a total capital outlay of `620.03 crore and sanctioned capital of `453.63 crore. The project would have a rated capacity of 2.747 mt and a life of 32 years. Much of the land acquisition required for the project is still pending. The anticipated date of completion of the project is August 2014. This indicates a time over-run of 25 months. In the Tadicherla coal block-I, the preliminary work has begun. The company has signed a MoU with APGENCO for jointly taking up pre-mining activities. Part of the land acquisition has been made for taking up drilling activities. Once the preliminary work is over, SCCL would undertake exploration, mining and related activities. The scheduled date of completion of pre-mining activities is September 2012, but the company expects the work to be completed by October 2013. The RKP opencast project (phase-I), which would have a rated capacity of 2.50 mt and a life of 10 years, is right on schedule. This project was approved by SCCL Board in March 2010 with a total capital outlay of `129.39 crore and sanctioned capital of `209.78 crore. The approved and anticipated date of completion is March 2015. SCCL is also perusing the RG opencast-II extension project, for which it has already completed 990.22 Ha of land. Another 932.2 Ha acquisition is under progress. This project would have a rated capacity of 4.00 mt and a life of 27 years.

COAL INSIGHTS 60 may 2012

CORPORATE

S Bhattacharya new CMD of SCCL Coal Insights Bureau

uthirtha Bhattacharya, a 1985 batch IAS, has been appointed the new chairman of Singareni Collieries Company Ltd (SCCL). The order for Bhattacharya’s appointment was released on May 7 and he took charge on May 10, a company spokesman said. Bhattacharya succeeded S. Narsing Rao, who has taken charge as chairman of Coal India Ltd (CIL) with effect from April 24. However, unlike CIL, SCCL did not have to wait long for its next fulltime chairman. Dinesh Kumar, principal secretary (energy) of Andhra Pradesh government, officiated as acting chairman of SCCL for the interim period. Prior to taking over as CMD, SCCL, Bhattacharya was working as Principal Secretary, Infrastructure and Investment department, Government of Andhra Pradesh. He has also been the Principal Secretary in Energy Department and CMD of AP Transco (Transmission Corporation of Andhra Pradesh Ltd) in his previous assignments.

Similarly, work for the MNG OC-II Extension Phase-II Project is making progress. This project was approved by the board of SCCL in March 2010. It has a total capital outlay of `218.01 crore and sanctioned capital of `181.19 crore with a rated capacity of 3.00 mt and a life of 20 years. In the power sector, the work for SCCL’s proposed 2x600 MW thermal power project (TPP) was going on in full swing, the sources said. The project, which followed a 20 MW captive power plant, is expected to be completed by 2015-16. The SCCL board, in its meeting held on September 9, 2011, accorded approval to place order on M/s BHEL for BTG Package for 2x600 MW Singareni TPP, including switchyard and associated civil works, type Test charges and spares. Work order for ground leveling by earth-work excavation, transportation, spreading, leveling and consolidation at 2x600 MW TPP site has been awarded to AMR Constructions Ltd. The company has also completed a feasibility study (by RITES) for the construction of a captive private railway siding for the proposed TPP. Work has been awarded to K V R Rail Infra Projects Pvt. Ltd. for preparation of the detailed project report (DPR). Wind power faces delay SCCL, which was about to foray into generation of wind power and was about to float a notice inviting tender (NIT) for the same during March or April 2012, has decided to

postpone the project, a senior company official told Coal Insights. “We are in the process of taking up consultancy activity to assess profitability of the initiative after which the purchase procedure will follow. Considering the change in scenario after Union Budget in which accelerated depreciation (AD) has been discontinued, it is now required to reassess profitability of the green initiative taken up by SCCL,” he said. “It is also learnt from media reports that permitting AD is also being considered. Once there is clarity in the regulatory scenario, we can draft schedule for the same,” he added. The company which had earlier decided that the capacity of the wind power generation project would be 100 MW, has now changed its decision. “The capacity of the project would now actually depend on the profitability of the project,” the official further added. SCCL is open as far as location of the wind power project is considered. A good yield (IRR) from the potential site shall be the selection criteria, including others, company sources said. Apart from thermal and renewables, SCCL is also planning to enter the hydro power generation, according to company sources. The company has always been in the forefront of technology absorption, implementation of modern management practices using ITeS for decision making and effective management of resources. The diversification plans are being considered to ensure sustainability of the company in the long run, they said.

COAL INSIGHTS 61 may 2012

expert speak

CIL must own coal berths for import of coal

J.P. Panda

ith Coal India Ltd (CIL) contemplating import of coal, it is time now for the behemoth to take a few more decisions. In fact, CIL has been signing FSAs with many domestic consumers with a condition that they should accept at least 50 percent of the total quantity from imported coal. If that is so, CIL must construct and own its own coal berths in the ports of India in order to supply coal to the starving power sector. That way, it will make huge profits in the bargain. Many do not know that about 14 years ago, this was thought out by a group of strategic planners and visionaries that CIL should have captive coal berths to import coal and blend it with indigenous coal for supply to the domestic market. The then coal secretary Dr S Narayan was a vociferous advocate of this. Coal India was allocated two coal berths in principle at the

New Ennore port (presently Ennore Port) from the ministry of shipping and surface transport in the year 1998. On behalf of Coal India, MCL was entrusted with the job and I as the chief general manager technical coordination, was entrusted with the overall responsibility of preparation of feasibility and detailed project report and getting it approved by the MCL board. The MCL board meeting held on August 5, 1998, approved the preparation of the feasibility report and subsequently a detailed project report. Mecon India was entrusted with the job of preparing a feasibility and subsequently a detailed project report. Subsequently the detailed project report was placed before the MCL board in the year 2000. However, the project was dropped. I feel it was not a prudent decision on the part of the MCL board and Coal India to refuse the two coal berths. For one, Coal India could have earned huge revenues from the coal berths. With nearly 100 million tons (mt) import of coal, Coal India would have earned a revenue of `10,000 crore per year @ of `100 a ton by simply keeping the captive berths. Assuming the cost of running the jetties is `50 per ton, nearly `5,000 crore would have been added to CIL’s profit. The project details The locations of two coal jetties were dovetailed into the master plan of the Ennore port. The coal handling system would be unloading of coal from ships to the coal stockyard, stacking, reclaiming, blending into blending silos and loading into the railway wagons by rapid loading system for onward transportation to various consumers. ♦♦ The major units proposed were: Two captive coal berths of 555m length with two mooring Dolphins on either side provided with four ship unloaders. The ship unloading is through 2000t/hr grab unloaders;

COAL INSIGHTS 62 may 2012

Expert Speak

A private port terminal at Ennore Port

♦♦ One mobile hopper and belt conveyors running along the berth; ♦♦ Belt conveyor system to coal transport yard, coal stockpiles with six beds for indigenous coal and two beds for imported coal and four stacker reclaimers. 4000t/hr belt conveyors to the blending silos; Blending silos; ♦♦ Rapid loading system; ♦♦ Railway marshalling yard for handling of 16 rakes per day was assumed to be owned and maintained by Indian Railways. The techno-economics of the project envisaged 100 percent import of low ash coal/ high calorific value coal and blending it with MCL coal at the blending site near Ennore port and supplying the coal to different consumers. Ennore port The biggest coal producer in the eastern region is Mahanadi Coalfields Ltd and the bulk consumers are Tamilnadu Electric Supply Board (TNEB), Andhra Pradesh Electricity Board and Karnataka electricity Board. The rail route to these power generating companies is long and requires nearly five rakes for movement of 3500 tons as all the power plants are at a considerable distance from the MCL mines. The present preferred route is the rail cum sea cum rail, ie loading at the pit heads of MCL and transporting by rail up to Paradip or Dhamra port and transport by sea route to southern India ports like Ennore, Krishnapatnam or any other southern port and subsequently transporting it from the port to the power stations.

The decision to blend it with imported coal was to reduce the ash to less than 34 percent as per MoEF notification which stated that by June 2001, all power houses situated more than 1,000 km from the pit top has to use coal with <34 percent ash. Though this notification was subsequently changed, but it is imperative that in future all coal will have to be washed and ash brought down as per MoEF stipulations. As consumers are not comfortable with the price of washing, the best alternative was to blend low ash imported coal with high ash indigenous coal. If Coal India does take a decision to import coal, it must own its own berths in order to supply coal to many consumers. For the last two years, Coal India has not been able to reach its target. The gap between demand and supply is increasing every year. Indeed the projection is that nearly 200 million tons of coal will have to be imported by 2020. India has no alternative but to import coal. Many power houses may import coal directly but Coal India as a bulk importer can negotiate a reasonable cost of import and supply to the starving power houses. Obviously Coal India can make a huge profit by importing coal and if it owns coal berths, the profit will go up further. In a worst case scenario if coal import is not done, Coal India can still make a decent profit by simply allowing its berths to be rented out. (The author is managing director of Priya Mining Consultancy and Services Ltd, which provides consultancy on both underground and opencast coal mines, including EMP-EIA, forest clearance etc. The company has also produced CDs on a wide variety of subjects including all DGMS circulars from 1957 till December 2010, a history of disasters in coal mines for the last 100 years and safety and productivity improvement in both opencast and underground mining. The author can be contacted at jppanda2003@yahoo.com.)

(Note: The views expressed here are those of the author and not of Coal Insights. The publication does not take any responsibility for the article in part or in full)

COAL INSIGHTS 63 may 2012

International

US coal consumption, production to decline in 2012: EIA

Coal Insights Bureau

he Energy Information Administration (EIA) of the US said in its May report that it expected US coal consumption this year to fall to the lowest level in 25 years as electric utilities and other industries favour burning cheap natural gas. The EIA said it expects US power plants, steelmakers, and other users of the fuel to consume 875.8 million short tons (million s.t) in 2012, down 4.5 percent as compared to 916.9 million s.t estimated in its April 2012 report. This quantity would be the lowest consumption since 1987. The EIA cut its 2013 coal-consumption estimate by 7 percent to 890 million tons. US natural gas prices this spring touched a series of 10-year lows, the result of a massive supply glut as drillers tap the gas held in shale rock formations. That spurred utilities with the ability to switch from coal to natural gas to do so. The agency, which is an independent statistical organisation within the US Department of Energy, further said coal production will also decline to 982.2 million s.t in its latest report down 2.9 percent from 1010.8 million s.t estimated a month back. Electric power producers accounted for about 93 percent of U.S. coal use in 2011, according to the EIA. Consumption in the sector will total 796 million tons this year, down 14 percent from 2011, the EIA said. EIA forecasts that electric power sector coal consumption will be about 800 million short tons (MMst) in both 2012 and 2013. EIA expects this trend to continue in 2012, with electric power sector coal consumption falling by 14 percent. EIA expects that electric power sector coal consumption will increase by 1.2 percent in 2013, as projected power industry

US coal consumption (million short tons)

Source: EIA

coal prices fall and natural gas prices increase. EIA expects that electric power sector coal consumption will fall to 796.0 million s.t in 2012 and 805.9 million s.t in 2013 as per the May report as an unusually warm winter and spring also limited overall US electricity demand. In April report coal consumption by this sector stood at 838.4 million s.t and 877.1 million s.t in 2012 and 2013 respectively. The EIA in its May report has also estimated that coal consumption in its retail and other industry would slowdown to 52.3 million s.t in 2012 similar to that recorded in its April report which stood at 51.9 million s.t. As per the latest report, in 2013 they are projected to remain at 53.7 million s.t similar

COAL INSIGHTSâ&#x20AC;&#x201A; 64â&#x20AC;&#x201A; may 2012

INTERNATIONAL kilowatthours per day estimated in the previous month’s report. Retail sale of electricity will fall to 10.11 kilowatthours per day similar to levels projected in last month’s report at 10.16 kilowatthours per day. In 2013 it will grow to 10.3 kilowatthours per day as per the May report from 10.4 kilowatthours per day estimated in its April report. As per the May report there was a 11 percent decline in US residential electricity sales compared with the same period last year as winter temperatures were particularly mild in the South, where a majority of homes use electric heat pumps.

US coal production (million short tons)

Oil consumption

Source: EIA

to that projected in the previous month’s report at 53.5 million s.t. However, coal consumption by coke plants in this month’s report is estimated to improve to 27.7 million s.t in 2012 as compared to 26.4 million s.t as per the April report. In 2013 consumption in this sector is expected to soar further to 30.8 million s.t from 27.8 million s.t estimated in the earlier report. EIA forecasts that coal production will decline by 10.2 percent in 2012 as domestic consumption and exports fall. Production for the first three months of 2012 was 22 million s.t below last year’s value for the same period. Despite declines in production, EIA projects that secondary inventories will increase in 2012, with electric power sector stocks exceeding 200 million s.t, and inventories will remain at elevated levels in 2013. This will increase coal production to 955.1 million s.t in 2013 as per the latest report. This is however much less than last month’s estimate of the same at 1023.8 million s.t in 2013. Electricity demand EIA expects total consumption of electricity to decline by 0.8 percent during 2012 and then grow by 1.9 percent in 2013. As per the agency’s latest report, US electricity consumption will fall to 10.48 billion kilowatthours per day in 2012 from 10.53 billion kilowatthours per day estimates in the April report. It will however rise to 10.68 billion kilowatthours per day in 2013 according to May report as compared to 10.77 billion

World liquid fuels consumption grew by an estimated 1 million bbl/d to 88.88 million bbl/d in 2012. EIA expects that consumption growth will accelerate, with consumption reaching 90.04 million bbl/d in 2013. World liquid fuels consumption grew by an estimated 0.8 million bbl/d in 2011. EIA expects consumption growth of 1.0 million bbl/d in 2012 and 1.2 million bbl/d in 2013, with China, the Middle East, Central and South America, and other countries outside of the Organization for Economic Cooperation and Development (OECD) accounting for essentially all consumption growth. EIA expects OECD liquid fuels consumption is projected to decline by 0.4 million bbl/d in 2012, with Europe and, to a lesser extent, the United States accounting for almost the entire decline. In 2013, forecast OECD liquid fuels consumption is expected to remain essentially flat. Trade On the export front, the agency said that US coal export is expected to remain strong 100.1 million s.t as per the May report almost similar to 100.2 million s.t estimated in the agency’s April report. Forecast US coal exports are estimated to be at 97 million s.t in 2013 as per EIA’s latest report while last month’s report projected the same at 98.2 million s.t. EIA’s, recent most report however suggest the US coal import is likely to get worse in 2012 as compared to year before. US coal imports stood at 13.8 million s.t in 2012 as per the May report, lower than 15 million s.t estimated in the previous month’s report. In 2013, coal imports are forecast to rise further to 15.7 million s.t.

COAL INSIGHTS 65 may 2012

INTERNATIONAL

SA miners expect higher coal export to India in Q2 Coal Insights Bureau

fter witnessing a sharp decline in coal export to India in 2011 compared to 2010 levels due to general firmness in prices throughout 2011, South African coal miners expect India’s coal imports from their country to go up in 2012. Import by India during the first quarter of 2012 was up sharply or 31.6 percent at 5.08 million tons (mt) compared with 3.86 mt imported during the same quarter of 2011. “With prices hovering at lowest levels for some time, imports into India should remain firm in second quarter (April-June 2012) as well,” an official of a leading South African coal miner told Coal Insights. “Pressure on Indian Rupee versus US Dollar and availability of credit will hamper buyers, but we still see firm prompt interest from buyers,” the official added. India’s import of South African coal fell to 16.13 mt in 2011 from a high of 20.999 mt in 2010, according to data available with Coal Insights. “With current coal prices ruling below $100, Indian companies are likely to purchase more of South African cargo because of quality issues,” the official said.

Break-up of shipment of coal through RBCT (in tons) Region

ASIA

2011

2010

China

13,205,829

7,001,539

Japan

467,405

298,702

La Reunion

417,700

559,356

Malaysia

2,771,980

2,681,117

Mauritius

850,736

624,139

Pakistan

493,255

1,035,142

South Korea

3,626,257

2,336,165

Taiwan

3,609,240

2,859,595

UAE

1,312,409

1,517,824

Madagascar Thailand

82,499 139,200

Yemen India ASIA TOTAL ARA

China’s support seen if prices fall Meanwhile, China is expected to provide a strong floor to the international price if levels soften further, the official said. “China continues to maintain strong imports of thermal coal, including South African material even as they are feeling the same uncertainty as the rest of the world and are nervous to commit too far out, hence prompt buying only,” he said. According to him, imported material prices into China versus domestic levels are technically allowing a steady stream of imports of off-spec material to China. Asked about his views on coal prices after the softness witnessed in the first quarter of 2012, the official said, the downside will be limited by China. “Most of the weakness is in Atlantic where USA and Russian producers are meeting their cash cost of export and so production cut in these countries might be imposed,” he said, adding, “API4 is showing more resilience and appears to have strong support at $90-$100 levels.”

Country

ATLANTIC

20,999,761

43,108,650

40,473,048

3,743,931

4,525,559

171,193

234,996

765,062

796,587

Denmark

1,497,711

1,035,963

France

1,032,382

999,163

Greece

27,500

Ireland

93,632

82,427

Israel

3,112,649

2,798,972

Italy

3,949,376

3,103,052

Mexico

395,764

1,544,105

Portugal

47,395

324,465

Senegal

391,672

414,426

2,973,832

3,231,121

92,000

145,447

1,684,715

962,325

596,544

660,456

Turkey UK Nigeria ATLANTIC TOTAL

COAL INSIGHTS 66 may 2012

16,132,140

Argentina

Spain

GRAND TOTAL

197,956

Brazil

Togo

OTHERS

361,752

33,000 20,608,358

921,507

20,859,064

2,193,250 64,638,515

63,525,362

INTERNATIONAL

China all set to hike coal imports Coal Insights Bureau

hina is poised to accelerate coal imports to take advantage of the cheapest international prices in 20 months relative to domestic supplies. China’s monthly coal imports, which climbed as news of the price spread, expanded in the past few months. China’s coal imports rose for a second straight month in March, to 17.1 million tons (mt), according to customs data a rise of 10 percent from a year earlier to a record 183 mt in 2011. Increase in Chinese imports can be attributed mainly to the Chinese government wanting to cap annual domestic production at 3.9 billion tons by 2015 to curb pollution, according to a five-year plan released by the National Energy Administration in March. China imported around 567,718 tons of semi soft/PCI coal from Australia between January and March this year at an average price of around $149.01 per ton. China’s import of thermal coal from Australia however increased to 5,105,023 tons during the first quarter of 2012, a huge increase from 1,454,206 tons imported during the same period last year. Import price of thermal coal imported from Australia also showed a stark difference with prices between January and March 2012 at $93.33 per ton while that between January and

March 2011 at $98.14 per ton. The price gap could narrow with Newcastle prices rebounding on higher demand from China. There was also a huge price difference in southern China for thermal coal delivered from the northern Chinese port of Qinhuangdao compared with shipments from Newcastle, Australia. China’s growing demand for electricity has been supporting domestic prices of the fuel. Rising imports this quarter may keep the price of Newcastle coal with a heating value of 6,700 kilocalories per kg, a benchmark grade for Asia, at an average of $112 a ton. Experts feel that China’s coal imports will probably increase due to the wide premium of Qinhuangdao over Newcastle prices but price gap could narrow with Newcastle prices rebounding on higher demand from China. China is the second largest importer of South African coal worldwide. Between January and March this year, China imported around 2,774,370 tons of South African coal a huge increase as compared to 1,268,292 tons imported in the corresponding year of 2011. The world’s biggest consumer of the fuel became a net importer for the first time in 2009 as Chinese buyers snapped up cheap overseas supplies helping a recovery in the regional seaborne coal market.

COAL INSIGHTS 67 may 2012

logistics

Traffic handling by major ports down 6.3% in April Coal Insights Bureau

he 12 major Indian ports have handled 46.42 million tons (mt) of traffic during April 2012, 6.33 percent lower than 49.56 mt recorded during April 2011. According to data released by the Indian Ports Association (IPA), the country’s major ports handled a total of 2.43 mt of coking coal in April 2012, down 17.52 percent compared with 2.94 mt handled in April 2011. However, the movement of thermal coal through the major ports was up 13.13 percent to 4.49 mt during April 2012, compared to 3.98 mt achieved during the corresponding month of previous year. Among the major ports, Paradip port had the distinction of handling the highest volume of thermal coal of around 1.38 mt in April 2012. Mormugao port handled the highest quantity of 0.6 mt of coking coal during the period. Movement of iron ore through the major ports showed a significant drop of 29.69 percent in April 2012 due to restrictions imposed on mining and a hike in export duty on iron ore. The major ports together handled 5.08 mt of iron ore during the month of April 2012 compared to 7.23 mt handled in 2010-11. Mormugao port handled the highest volume of 3.08 mt of iron ore in April 2012. This volume, however, was about 0.93 mt less or 23.19 percent lower than the iron ore traffic moved through the port in 2010-11. Movement of container traffic in terms of tonnage showed an increase in April. The major ports handled 9.98 mt of tonnage in April 2012 compared to 9.88 mt of tonnage in April 2011. Four major ports showed positive growth in traffic handling during the month of April 2012 while the remaining eight showed negative growth on a year-on-year basis. In terms of growth, Ennore port topped the list with a record 28.25 percent increase in cargo throughput. V.O Chidambaranar port’s growth was lowest at about 3.49 percent during the period. In terms of traffic volume, Kandla port

Traffic handled at major ports (During April, 2012* vis-a-vis April, 2011) (*) Tentative

(In '000 tons)

PORTS

APRIL

% VARIATION

TRAFFIC

AGAINST PREV.

2012*

2011

YEAR TRAFFIC

KOLKATA Kolkata Dock System

898

1067

-15.84

Haldia Dock Complex

2202

2936

-25.00

TOTAL: KOLKATA

3100

4003

-22.56

PARADIP

4075

5260

-22.53

VISAKHAPATNAM

4958

5567

-10.94

ENNORE

1371

1069

28.25

CHENNAI

4297

5390

-20.28

V.O. CHIDAMBARANAR

2430

2348

3.49

COCHIN

1406

1409

-0.21

NEW MANGALORE

2931

2461

19.10

MORMUGAO

3986

4901

-18.67

MUMBAI

5533

4753

16.41

JNPT

5575

5608

-0.59

KANDLA

6760

6788

-0.41

TOTAL:

46422

49557

-6.33

clinched the top rank with a cargo volume of 6.76 mt recorded for the period. Kolkata port registered the highest decline of 22.56 percent in traffic handling during April due to fall in iron ore export.

COAL INSIGHTS 68 may 2012

Logistics

Indian Railways commodity wise freight revenue fall m-o-m in April Coal Insights Bureau

he Indian Railways’ revenue earnings from commodity-wise freight traffic fell month-on-month in April due to lower transportation of coal, cement, foodgrains, iron ore and fertilisers. The Railways’ revenue earnings from commodity-wise freight traffic during the month of April 2012 stood at `6,906.83 crore, down 10.88 percent compared with `7,749.94 crore earned in March, according to information available with Coal Insights. Revenue from transportation of coal fell to `3,167.82 crore from `3,359.66 crore in March. The Railways transported only 40.33 million tons (mt) of coal in April compared with 44.77 mt transported a month ago. Revenue from transportation of iron ore for exports, steel plants and for other domestic user in April rose to `633.93 crore, up 5.69 percent from `599.79 crore in March. However, the quantity of iron ore transported fell to 9.20 mt in April from 9.65 mt in the previous month. Revenue from transportation of cement in April dropped to `764.90 crore (9.22 mt) from `808.01 crore (10.59 mt) in March, while that from foodgrains transportation fell to `459.48 crore (3.26 mt) in April from `579.06 crore (4.35 mt) in March. The Railways revenue from transportation of fertilisers in April declined sharply to `218.79 crore (2.14 mt) from `398.74 crore (4.0 mt) in March. Revenue from transportation of petroleum oil and lubricant (POL) in April stood at `366.58 crore (3.14 mt), from pig iron and finished steel from steel plants and other points at `407.04 crore (2.71 mt), and from raw material for steel plants, except iron ore, at `113.02 crore (1.20 mt). Revenue from container services was `293.40 crore (3.29 mt) and from transportation of other goods was `481.87 crore (5.76 mt). Commodity

Earning (in ` cr)

Quantity (in mt) April’11

April’12

April’11

April’12

Coal i) for steel plants ii) for washeries iii) for thermal power houses iv)for public use

3.62

4.2

153.12

251.53

0.15

0.09

1.92

1.07

24.84

26.29

1,596.53

2,174.31

8.76

9.75

526.57

740.91

v) Total Raw material for steel plants except iron ore

37.37

40.33

2,278.14

3,167.82

1.1

1.2

91.26

113.02

2.03

2.08

245.69

350.93

Pig iron and finished steel i) from steel plants ii) from other points

0.56

0.63

44.03

56.11

iii) Total

2.59

2.71

289.72

407.04

Iron ore i) for export

1.4

0.36

372.39

86.63

3.59

5.13

100.97

250

iii) for other domestic users

4.03

3.71

257.06

297.3

iv) Total

9.02

9.2

730.42

633.93

ii) for steel plants

Cement

9.03

9.22

560.5

764.9

Foodgrains

4.09

3.26

436.22

459.48

Fertilizers

2.28

2.14

161.13

218.79

Mineral Oil (POL)

3.34

3.14

286.44

366.58

Container Service i) Domestic containers

0.74

0.72

71.84

68.99

ii) EXIM containers

2.28

2.57

193.39

224.41

iii) Total

3.02

3.29

265.23

293.4

Balance other goods

5.68

5.76

391.87

481.87

77.52

80.25

5,490.93

6,906.83

Total revenue earning traffic

COAL INSIGHTS 69 may 2012

power sector update ALL INDIA ENERGY GENERATION, GENERATION (GWH) Category / Regions

Monitored Capacity (MW)

April 2012

Target April 2012 to March 2013

PROGRAMME

ACTUAL*

ACTUAL SAME MONTH (2011-12)

% OF PROGRAMME 105.03

THERMAL

132466.12

760275.00

60623.00

63674.63

59818.28

NUCLEAR

4780.00

32200.00

2611.00

2805.66

2663.13

38990.40

122045.00

8368.00

8041.30

0.00

5480.00

236.00

203.66

176236.52

920000.00

71838.00

74725.25

THERMAL

32068.26

192014.00

14005.00

15092.83

NUCLEAR

1620.00

10799.00

814.00

HYDRO

15178.25

60243.00

TOTAL

48866.51

THERMAL

% OF LAST YEAR

PROGRAMME

106.45

60623.00

107.46

105.35

2611.00

8835.17

96.10

91.01

8368.00

109.18

86.30

186.54

236.00

71425.76

104.02

104.62

71838.00

14316.36

107.77

105.42

14005.00

939.96

796.96

115.47

118.02

814.00

4092.00

4217.62

4060.67

103.07

103.87

4092.00

263056.00

18911.00

20250.41

19173.50

107.08

105.62

18911.00

47406.31

267367.00

21522.00

22862.87

21472.71

106.23

106.47

21522.00

NUCLEAR

1840.00

12517.00

1116.00

1192.99

1199.77

106.90

99.43

1116.00

HYDRO

7392.00

15159.00

1103.00

1036.47

1360.80

93.97

76.17

1103.00

TOTAL

56638.31

295043.00

23741.00

25092.33

24033.28

105.69

104.41

23741.00

THERMAL

26680.80

158867.00

13444.00

14064.61

13915.49

104.62

101.07

13444.00

NUCLEAR

1320.00

8884.00

681.00

672.71

666.89

98.78

100.87

681.00

HYDRO

11372.45

32362.00

2539.00

2159.95

2417.76

85.07

89.34

2539.00

TOTAL

39373.25

200113.00

16664.00

16897.27

17000.14

101.40

99.39

16664.00

25415.05

137518.00

11294.00

11298.10

9725.90

100.04

116.17

11294.00

HYDRO

3847.70

10081.00

448.00

488.76

777.65

109.10

62.85

448.00

TOTAL

29262.75

147599.00

11742.00

11786.86

10503.55

100.38

112.22

11742.00

895.70

4509.00

358.00

356.22

387.82

99.50

97.85

358.00

HYDRO

1200.00

4200.00

186.00

138.50

218.29

74.46

63.45

186.00

TOTAL

2095.70

8709.00

544.00

494.72

606.11

90.94

81.62

544.00

HYDRO BHUTAN IMP TOTAL NORTHERN REGION

WESTERN REGION

SOUTHERN REGION

EASTERN REGION THERMAL

NORTH EASTERN REGION THERMAL

Provisional based on actual-cum-assessment

COAL INSIGHTS 70 may 2012

Power sector update PROGRAMME AND PLANT LOAD FACTOR PLANT LOAD FACTOR % APRIL 2012 – April 2012

April 2012

APRIL 2012 - April 2012

ACTUAL

ACTUAL SAME PERIOD (2011-12)

% OF PROGRAMME

% OF LAST YEAR

PROGRAMME

ACTUAL*

ACTUAL SAME MONTH (2011-12)

PROGRAMME

ACTUAL*

ACTUAL SAME PERIOD (2011-12)

63674.63

59818.28

105.03

106.45

72.53

75.21

78.84

72.53

75.21

78.84

2805.66

2663.13

107.46

105.35

77.49

81.52

77.38

77.49

81.52

77.38

8041.30

8835.17

96.10

91.01

203.66

109.18

86.30

186.54

74725.25

71425.76

104.02

104.62

15092.83

18316.36

107.77

105.42

67.91

71.13

80.09

67.71

71.13

80.09

939.96

796.47

115.47

118.02

74.38

80.59

68.28

74.38

80.59

68.28

4217.62

4060.67

103.07

103.87

20250.41

19173.50

107.08

105.62

22862.87

21472.71

106.23

106.47

74.12

74.54

79.87

74.12

74.54

79.87

1192.99

1199.77

106.90

99.43

84.24

90.05

90.56

84.24

90.05

90.56

1036.47

1360.80

93.97

76.17

25092.33

24033.28

105.69

104.41

14064.61

13915.49

104.62

101.07

84.58

88.98

87.24

84.58

88.98

87.24

672.71

666.89

98.78

100.87

71.65

70.78

70.17

71.65

70.78

70.17

2159.95

2417.76

85.07

89.34

16897.27

17000.14

101.40

99.39

11298.10

9725.90

100.04

116.17

65.84

69.43

68.56

65.84

69.43

68.56

488.76

777.65

109.10

62.85

11786.86

10503.55

100.38

112.22

356.22

387.82

99.50

91.85

0.00

138.50

218.29

74.46

63.45

494.72

606.11

90.94

81.62 Source: Central Electricity Authority

COAL INSIGHTS 71 may 2012

Power sector update List of utility/organisation whose PLF achievement were lower than the respective programme during April 2012

Programme

Achievement

Description

April 2012 Target

April 2012

Achivement

Target

Achivement

660.00

1760.00

735.00

0.00

CAPACITY ADDITION (MW)

PLF in %

Name of Power Station

Capacity Addition & Generation during April 2012

Shortfall

THERMAL HYDRO NUCLEAR

I. CENTRAL KORBA STPS

82.16

80.79

1.37

RIHAND STPS

93.40

90.70

2.70

0.00

660.00

1760.00

735.00

THERMAL

60623.00

63674.63

58042.00

59818.28

2611.00

2805.66

2048.00

2663.13

HYDRO

8368.00

8041.30

7521.77

8835.17

236.00

203.66

166.00

109.18

71838.00

74725.25

67777.77

71425.76

TOTAL GENERATION (MU)

SIPAT STPS

75.91

72.79

3.12

NUCLEAR

TANDA TPS

75.44

59.87

15.57

BHUTAN IMPORT

MUZAFFARPUR TPS

16.41

0.00

16.41

BOKARO’B’ TPS

67.90

41.91

25.99

BARSINGSAR LIGNITE

54.44

52.73

1.71

UPRVUNL

57.91

55.70

2.21

HPGPCL

68.04

62.83

5.21

GMDCL

52.22

50.96

1.26

GSECL

73.50

71.26

2.24

TNGDCL

85.25

83.76

1.49

JSEB

12.27

4.97

7.30

KPCL

82.65

73.94

8.71

DPL

55.76

21.32

34.44

II. STATE

TOTAL

Note: Generation (MU) achieved in February 2012 is provisional.

Target/Achievement in capacity addition (MW) during April 2012

Achievement in generation (MU) during April 2012

Source: Central Electricity Authority

Sector-wise PLF(%) programme and achievements (thermal) April 2012

April 2012 - April 2012

SECTOR PROG. (%)

ACH. (%)*

PROG. (%)

ACH. (%)*

Central Sector

76.68

82.21

76.68

82.21

State Sector

69.31

71.67

69.31

71.67

Pvt. UTL Sector

81.47

82.13

81.47

82.13

All India

82.53

75.21

72.53

75.21

* Provisional based on actual-cum Assessment Source: Central Electricity Authority

COAL INSIGHTS 72 may 2012

Source: Central Electricity Authority

All India PLF (%) during April 2012

Source: Central Electricity Authority

Power sector update List of critical thermal power stations having critical coal stock of less than 7 days (as on 30-04-2012) NORTHERN 1

Badarpur

Due to less receipt of coal from CCL during the month of April, 2012

Mahatma Gandhi

Non allocation/supply of coal by MOCL/CIL for TPPs commissioned during Jan-March 2012

Kota

Due to less receipt of coal from CCL during the month of April, 2012

Suratgarh

Due to less import

Chabbra

Due to inadequate allocation of indigenious coal during the month.

Anpara C

Due to inadequate allocation of indigenious coal during the month.

Ukai

Due to supply of poor quality of coal GSECL regulated coal supply

Bhusawal

Non allocation/supply of coal by MOCL/CIL for TPPs commissioned during Jan-March 2012

Dhanu

Due to less receipt of coal from SECL during the month of April, 2012

Koradi

Due to less receipt of coal during the month of April, 2012

Sanjay Gandhi

Due to higher generation

Khaparkheda

Due to less receipt of coal during the month of April, 2012

Parli

Due to less receipt of coal from MCL during the month of April, 2012

Dr. N. Tata Rao

Due to higher generation

Rayalaseema

Due to higher generation

Bellary

Non allocation of coal for Bellary unit commissioned on 23-03-12

Simhadri

Non allocation/supply of coal by MOCL/CIL for TPPs commissioned during Jan-March 2012

North Chennai

Due to less receipt of coal during the month of April, 2012

Muzaffarpur TPS

Coal supply regulated as Bihar declined to take its electricity due to financial viability

Kahalgaon

Due to inadequate coal availability in linked mine ECL (Rajmahal) and inability of railways to supply more imported rakes due to change in tracks

Bokaro - B

No import

Chandrapura

(DVC) No import

Koderma TPS

Coal supply / yet to start by CIL to commence the generation

Talcher STPS

Due to less receipt of coal during the month of April, 2012

Bandel

Due to huge outstanding dues coal supply affected

Kolaghat

Due to huge outstanding dues coal supply affected

Mejia

Non allocation of coal by MOC/CIL for Mejia Unit-8 & no import by DVC

New Cssipore

Due to less receipt of coal during the month of April, 2012

Farakka

Due to inadequate coal availability in linked mine ECL (Rajmahal)

WESTERN

SOUTHERN

EASTERN

Source: Central Electricity Authority

COAL INSIGHTSâ&#x20AC;&#x201A; 73â&#x20AC;&#x201A; may 2012

Power sector update Capacity Addition for April 2012 and April 2012 - April 2012 (MW) Schemes

Target 2011-12

Status of Schemes

Central State Thermal Pvt. Total Central State Hydro Pvt. Total Central Nuclear Total Central State All India Pvt. Total Source: Central Electricity Authority

4023.30 3951.00 7180.00 15154.30 645.00 87.00 70.00 802.00 2000.00 2000.00 6668.30 4038.00 7250.00 17956.30

April 2012 Target 0.00 0.00 660.00 660.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 660.00 660.00

April 2012 - April 2012

Achievement 500.00 0.00 1260.00 1760.00 0.00 0.00 0.00 0.00 0.00 0.00 500.00 0.00 1260.00 1760.00

Target 0.00 0.00 660.00 660.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 660.00 660.00

Achievement 500.00 0.00 1260.00 1760.00 0.00 0.00 0.00 0.00 0.00 0.00 500.00 0.00 1260.00 1760.00

Deviation (+) / (-) 500.00 0.00 600.00 1100.00 0.00 0.00 0.00 0.00 0.00 0.00 500.00 0.00 600.00 1100.00

Programme and Achievememt of Energy Generation (MU) Gen. Sch. Target 20011-2012 Sector-wise Programme Thermal Central Sector 297305.00 23133.00 State Sector 309458.00 25640.00 Pvt.IPP Sector 128190.00 9595.00 Pvt.UTL Sector 25322.00 2255.00 Total 760275.00 60623.00 Hydro Central Sector 45920.00 3066.00 State Sector 65429.00 4767.00 Pvt.IPP Sector 8914.00 403.00 Pvt.UTL Sector 1782.00 132.00 Total 122045.00 8368.00 Nuclear Central Sector 32200.00 2611.00 Total 32200.00 2611.00 Bhutan Import 5480.00 236.00 All India Central Sector 375425.00 28810.00 State Sector 374887.00 30407.00 Pvt. Sector 164208.00 12385.00 Total 920000.00 71838.00 * Provisional based on actual-cum-Assesment

April 2012

April 2012 - April2012

Achievement*

% Ach.

24131.53 25970.60 11286.88 2285.62 63674.63

104.32 101.29 117.63 101.36 105.03

3348.63 4262.40 323.72 106.55 8041.30

Achievement*

% Ach.

23133.00 25640.00 9595.00 2255.00 60623.00

24131.53 25970.60 11286.88 2285.62 63674.63

104.32 101.29 117.63 101.36 105.03

109.22 89.41 80.33 80.72 96.10

3066.00 4767.00 403.00 132.00 8368.00

3348.63 4262.40 323.72 106.55 8041.30

109.22 89.41 80.33 80.72 96.10

2805.66 2805.66 203.66

107.46 107.46 86.30

2611.00 2611.00 236.00

2805.66 2805.66 203.66

107.46 107.46 86.30

30285.82 30233.00 14002.77 74725.25

105.12 99.43 113.06 104.02

28810.00 30407.00 12385.00 71838.00

30285.82 105.12 30233.00 99.43 14002.77 113.06 74725.25 104.02 Source: Central Electricity Authority

All India energy generation during April 2012 - April 2012

Capacity addition target & achievement (MW) April 2012 - April 2012

Source: Central Electricity Authority

Programme

Source: Central Electricity Authority

COAL INSIGHTSâ&#x20AC;&#x201A; 74â&#x20AC;&#x201A; may 2012

Power sector update Power Supply Position (Provisional)

(Figures in net MU) April 2012

State/System/ Region Chandigarh

Requirement

Availability

(MU)

April 2012 - April 2012 Surplus/Deficit (-) (MU)

117

Delhi

2,086

Haryana

2,793

Himachal Pradesh

739

Jammu & Kashmir Punjab

Availability

(%)

(MU)

0.0

1,521

2,083

-3

-0.1

2,651

-142

-5.1

732

-7

-0.9

1,157

872

-285

3,031

2,947

-84

Rajasthan

4,026

3,990

Uttar Pradesh

6,618 883

Surplus/Deficit (-) (MU)

(%)

-49

-3.1

24,088

-183

-0.8

32,006

-1,514

-4.5

6,762

-247

-3.5

-24.6

9,929

-2,978

-23.1

-2.8

39,451

-6,319

-13.8

-36

-0.9

42,983

-1,048

-2.4

6,060

-558

-8.4

59,390

-16,432

-21.7

824

-59

-6.7

8,321

-583

-6.5

21,450

20,276

-1,174

-5.5

224,447

-29,356

-11.6

Chattisgarh

1,502

1,476

-26

-1.7

10,766

-269

-2.4

Gujarat

6,878

6,876

-2

0.0

67,263

-3,149

-4.5

Madhya Pradesh

3,626

3,070

-556

-15.3

34,953

-8,206

-19.0

Maharashtra

11,172

10,688

-484

-4.3

101,537

-23,424

-18.7

Daman & Diu

129

0.0

1,799

-132

-6.8

Dadar Nagar Haveli

313

0.0

3,812

-154

-3.9

Goa

243

242

-1

-0.4

3,021

-64

-2.1

Western Region

23,863

22,794

-1,069

-4.5

223,153

-35,398

-13.7

Andhra Pradesh

8,495

7,377

-1,118

-13.2

73,784

-5,230

-6.6

Karnataka

5,479

4,799

-680

-12.4

42,098

-3,509

-7.7

Kerala

1,776

1,695

-81

-4.6

17,183

-423

-2.4

Tamil Nadu

7,518

5,751

-1,767

-23.5

71,488

-4,725

-6.2

Puducherry

193

191

-2

-1.0

1,973

-145

-6.8

Uttarakhand Northern Region

Lakshadweep #

23,461

19,813

-3,648

-15.5

206,525

-14,032

-6.4

Bihar

1,279

977

-302

-23.6

9,939

-1,824

-15.5

DVC

1,590

1,535

-55

-3.5

14,521

-542

-3.6

568

502

-66

-11.6

5,409

-457

-7.8

Orissa

2,217

2,141

-76

-3.4

20,926

-186

-0.9

West Bengal

Southern Region

Jharkhand

3,642

3,623

-19

-0.5

32,919

-934

-2.8

Sikkim

0.0

340

-43

-11.2

Andaman- Nicobar#

180

-60

-25

9,318

8,800

-518

-5.6

84,054

-3,986

-4.5

-4

-7.8

332

-74

-18.2

484

451

-33

-6.8

4,695

-434

-8.5

Eastern Region Arunachal Pradesh Assam Manipur

-3

-9.1

427

-95

-18.2

146

105

-41

-28.1

1,328

-222

-14.3

Mizoram

-2

-7.1

288

-63

-17.9

Nagaland

-3

-8.8

464

-63

-12.0

Meghalaya

Tripura N. Eastern Region All India

-5

-6.3

780

-84

-9.7

855

764

-91

-10.6

8,315

-1,034

-11.1

78,947

72,447

-6,500

-8.2

746,493

-83,807

-10.1

# Lakshadweep and A & N Islands stand-alone systems, power supply position of these, does not form part of regional requirement and availability. Source: Central Electricity Authority

COAL INSIGHTSâ&#x20AC;&#x201A; 75â&#x20AC;&#x201A; may 2012

Power sector update Peak Demand/Peak Met (Provisional)

(Figures in net MW) April 2012

State/System/ Region Chandigarh

Peak Demand

Peak Met

(MW)

April 2012 - April 2012 Surplus/Deficit (-) (MW)

220

Delhi

3,779

Haryana

5,289

5,057

Himachal Pradesh

1,628

1,413

Peak Met

(%) 0

(MW)

Surplus/Deficit (-) (MW)

0.0

308

0.0

-232

-4.4

-215

(%) 0

0.0

4,408

-94

-2.1

5,678

-455

-7.4

-13.2

1,158

3.6

Jammu & Kashmir

1,835

1,513

-322

-17.5

1,521

-726

-32.3

Punjab

6,234

5,089

-1,145

-18.4

7,407

-2,379

-24.3

Rajasthan

7,143

7,112

-31

-0.4

6,859

0.0

Uttar Pradesh

11,690

11,465

-225

-1.9

8,563

-2,293

-21.1

Uttarakhand

1,467

1,237

-230

-15.7

1,313

-84

-6.0

36,765

34,242

-2,523

-6.9

31,439

-5,720

-15.4

3,271

3,134

-137

-4.2

2,703

-116

-4.1

10,869

10,845

-24

-0.2

9,515

-891

-8.6

8,165

6,704

-1,461

-17.9

6,415

-1,075

-14.4

Maharashtra

18,011

16,842

-1,169

-6.5

14,664

-4,724

-24.4

Daman & Diu

284

259

-25

-8.8

437

-30

-6.4

Dadar Nagar Haveli

587

0.0

494

-35

-6.6

Goa

452

450

-2

-0.4

453

-23

-4.8

Western Region

38,137

36,341

-1,796

-4.7

32,586

-7,024

-17.7

Andhra Pradesh

12,974

11,335

-1,639

-12.6

10,880

-1,255

-10.3

Karnataka

9,940

8,264

-1,676

-16.9

7,084

-843

-10.6

Kerala

3,434

3,058

-376

-10.9

2,982

-217

-6.8

Tamil Nadu

12,116

9,841

-2,275

-18.8

9,813

-843

-7.9

Puducherry

318

311

-7

-2.2

294

-31

-9.5

Northern Region Chattisgarh Gujarat Madhya Pradesh

Lakshadweep # Southern Region

36,067

30,681

-5,386

-14.9

29,053

-3,029

-9.4

Bihar

2,208

1,703

-505

-22.9

1,509

-740

-32.9

DVC

2,240

2,152

-88

-3.9

1,908

-283

-12.9

Jharkhand

1,005

933

-72

-7.2

947

-141

-13.0

Orissa

3,430

3,121

-309

-9.0

3,242

-249

-7.1

West Bengal

6,692

6,583

-109

-1.6

5,840

-10

-0.2

0.0

-2

-2.1

Sikkim Andaman-Nicobar# Eastern Region Arunachal Pradesh Assam

-8

-20

15,209

14,156

-1,053

-6.9

12,885

-1,078

-7.7

106

103

-3

-2.8

-17

-17.9

1,053

1,019

-34

-3.2

874

-46

-5.0

Manipur

105

104

-1

-1.0

-12

-10.8

Meghalaya

275

269

-6

-2.2

250

-30

-10.7

Mizoram

-5

-7.7

-6

-8.6

Nagaland

100

-2

-2.0

-4

-4.0

Tripura

180

177

-3

-1.7

173

-3

-1.7

1,822

1,704

-118

-6.5

1,445

-315

-17.9

128,000

117,124

-10,876

-8.5

102,725

-15,748

-13.3

N -Eastern Region All India

# Lakshadweep and A & N Islands stand-alone systems, power supply position of these, does not form part of regional requirement and availability. Source: Central Electricity Authority

COAL INSIGHTSâ&#x20AC;&#x201A; 76â&#x20AC;&#x201A; may 2012

Power sector update Power supply to agricultural sector during April 2012 State/Region Northern Region Chandigarh Delhi Haryana HP J&K Punjab Rajasthan Uttar Pradesh Uttarakhand Western Region Chattisgarh Gujarat

Average hours of supply NA NA – HPSEBL has only 2% agriculture consumers and uninterrupted power is being supplied to agriculture sector – – Three Phase Supply : 5 hrs/day (average) Phase Supply : FRP feeders 20:30 hrs/day (average) and Non-FRP feeders Single 17 hrs/day (average) 12:07 hrs./day 09:17 hrs./day Three phase supply: 18 hrs/day – Only 8 hours power supply in staggered form in rotation of day and night is given to Agriculture. No supply during rest of 16 hours. Jyotigram Yojana 24 hrs. Three Phase Supply: 14:44 hrs /day Single phase Supply: NIL Three Phase Supply : 9 hrs/day (Average) Single phase Supply : 18 hrs/day (Average) No restriction

Madhya Pradesh Maharashtra Goa Southern Region Andhra Pradesh Three phase supply: 07 hrs/day. Karnataka Three phase/single phase supply: 06 hrs/day Kerala Tamil Nadu Three phase supply: 9 hrs/day Puducherry Eastern Region Bihar About 18 hrs Jharkhand About 20 hrs Orissa 24 hrs. West Bengal Average about 23 hrs * Data not furnished for current month.

No restrictions No restrictions

– No supply: 12 hrs/day Single phase supply: 15 hrs/day

–

Transmission lines (prog & achiv) April 2012

Sub-Stations (Prog & Achiv) April 2012

Fig. in ckt Kms Voltage Level/Sector +/- 800 kV HVDC Central Sector State Sector Total +/- 500 kV HVDC Central Sector JV/Private Sector Total 765 kV Central Sector State Sector Total 400 kV Central Sector State Sector JV/Private Sector Total 220kV Central Sector State Sector JV/Private Sector Total Grand Total

Programme 2012-13

Apr 2012 Prog.

Apr 2012-Apr 2012

Achv.

Prog.

Achv.

0 0 0

1913 0 1913

0 0 0

4977 3641 1398 10016

0 358 0 358

495 0 0 495

0 358 0 358

495 0 0 495

443 5054 0 5497

0 0 0 0

6 131 0 137

0 0 0 6557

6 131 2 137

17426

358

632

358

632

Fig. in MVA/MW Voltage Level/Sector

Programme 2012-13

Apr 2012 Prog.

Apr 2012-Apr 2012

Achv.

Prog.

Achv.

+/- 500 kV HVDC Central Sector

State Sector

Total

8500

765 kV Central Sector State Sector

1000

Total

9500

400 kV Central Sector

2330

State Sector

6040

315

JV/Private Sector Total

8370

315

220 kV Central Sector State Sector JV/Private Sector

380

13419

500

2165

500

2165

Total

13799

500

2165

500

2165

Grand Total

31669

500

2480

500

2480

Source: Central Electricity Authority

COAL INSIGHTS 77 may 2012

Source: Central Electricity Authority

Power sector update Generation capacity addition during 2012-13 (Programme & Achievement) Sl. No.

Unit Name

Unit No.

State

Company

Type

Capacity (MW) Prog.

Commissioning Schedule

Ach.

As per Prog.

Actual (A)

1st Quarter (April - June 2012) CENTRAL SECTOR 1

Rihand STPS-III

U.P

NTPC

500.00

June, 12

Chamera-III

H.P.

NHPC

77.00

June, 12

Sipat-1

C.G.

NTPC

660.00

June, 12

STATE SECTOR 4

Harduaganj Ext.

U.P.

UPRVUNL

250.00

May, 12

Mettur TPS Ext.

T.N.

TNEB

600.00

June, 12

Bhawani Kattalai-II

T.N.

Tangedco

15.00

June, 12

Paricha Extn.

U.P.

UPRVUNL

250.00

June, 12

Private SECTOR 8

Kasaipalli TPP

C.G.

ACB

135.00

June, 12

Swastik Korba

C.G.

ACB

25.00

June, 12

Jhajjar TPS (Mahatma Gandhi TPP)

Haryana

CLP Power

660.00

Budhil

Lamcp Green

35.00

Sterlite TPP

Orissa

Sterlite

600.00

3807.00

1260.00

500.00

Sub Total

660.00

Apr.12

11-04-12(A)

May,12 June, 12

25-04-12 (A)

July,12

19-04-12(A)

IInd Quarter (July - September 2012) CENTRAL SECTOR 13

Mouda TPP

Maharashtra

NTPC

500.00

Chamera-III

H.P.

NHPC

77.00

Aug,12

J&K

NHPC

60.00

Aug,12

J&K

NHPC

60.00

Sept.12

J&K

NHPC

11.00

Sept.12

15 16 17 18

Uri-II Chutak

J&K

NHPC

11.00

Sept, 12

Vindhyachal STPS-IV

M.P.

NTPC

500.00

July ,12

Paricha Extn.

U.P.

UPRVUNL

250.00

Sept, 12

Bhawani Kattalai-II

Pragati CCGT-III

State Sector 2

T.N.

TANGEDCO

GT-3

Delhi

PPCL

15.00

July,12

GT-3

250.00

Aug.12

Private Sector 23

Simhapuri Ph-I

A.P.

Madhucon

150.00

Spet. 12

Thammmminapatnam TPP

T.N.

Meenakshi

150.00

Aug,12

Salaya TPP

Gujarat

Essel Power

600.00

Aug,12

Adhunik Power TPP

Jharkhand

Adhunim Power

270.00

Sept, 12

Butibori TPP Ph-II

Maharashtra

RPL

300.00

Aug,12

Bela TPP-I

Maharashtra

IEPL

270.00

Sept. 12

Tirora TPP Ph-I

Maharashtra

Adani Power Ltd.

660.00

Aug, 12

Budhil

Lanco Green

35.00

July12

Bina TPP

M.P.

Bina Power

250.00

Sept. 12

Sub Total

4419.00

COAL INSIGHTS 78 may 2012

500.00

Power sector update Generation capacity addition during 2012-13 (contd.) Sl. No.

Unit Name

Unit No.

State

Company

Type

Capacity (MW) Prog.

Commissioning Schedule

Ach.

As per Prog.

Actual (A)

IIIrd Quarter (October - December 2011) CENTRAL SECTOR 32

Kundankulam

T.N.

NPCL

NCL

1000.00

Dec, 12

Indra Gandhi TPP

Haryana

APCPL

500.00

Dec, 12

Koderma TPP

Jharkhand

DVC

500.00

Dec, 12

Tripura Gas Module-I

Tripura

ONGC

Gas

363.30

Nov,12

Chemra-III

H.P.

NHPC

77.00

Oct,12

J&K

NHPC

60.00

Nov, 12

J&K

NHPC

60.00

Dec, 12

J&K

NHPC

11.00

Nov,12

J&K

NHPC

11.00

Dec,12

37 38 39 40

Uri-II Chutak

State Sector 41

Uka TPP Extn.

Gujarat

GSECL

490.00

Dec, 12

Bhawani Kattalai-III

T.N.

TANGEDCO

15.00

Oct,12

Thammmminapatnam TPP

T.N.

Meenakshi

150.00

Nov,12

Vandna Vidyut TPP

C.G.

Vandna

135.00

Dec, 12

Mundra UMTPP

Gujarat

Tata Power

800.00

Dec, 12

Maitishree Usha TPP PH

Orissa

Corporate

270.00

Dec, 12

Emco Warora TPP

Maharashtra

EMCO (GMR)

300.00

Nov, 12

Tirora TPP Ph-I

Maharashtra

Adani Power Ltd.

660.00

Nov,12

Private Sector

5402.30

Sub Total

0.00

IVth Quarter (January - March 2013) CENTRAL SECTOR 49

Kundankulam

T.N.

NPCL

NCL

1000.00

Mar,13

Vallur TPP PhI

T.N.

NTECL

50.00

Feb,12

Parbati-III

H.P.

NHPC

130.00

Mar, 13

Marwa TPP

C. G.

CSEB

500.00

Feb,13

Gujarat

GSECL

GAS

351.00

Jan, 13

M.P.

MPPGCL

250.00

Feb, 13

RPVUNL

GAS

110.00

Jan,13

T.N.

TNEB

600.00

Mar, 13

State Sector 53

Pipavav CCPP Block-2

Satpura TPS Extn.

Ramgarh GT

North Chennai Extn

Ramgarh ST

Myntdu

U.P.

RPVUNL

GAS

50.00

Feb, 13

Meghalaya

MeECL

42.00

Mar, 13

Private Sector 59

Tirora TPP Ph-II

Maharashtra

Adani Power Ltd.

660.00

Feb,13

Jalipa-Kapurdi TPP

Rajasthan

Raj West Power Ltd.

135.00

Mar, 13

Sub Total Grand Total

4328.00

0.00

17956.30

1760.00 Source: Central Electricity Authority

COAL INSIGHTS 80 may 2012

E-Auction

Companywise data of sold quantity through coaljunction & MSTC in Mar’12 (road & rail) Row Labels BCCL CCL ECL MCL NCL NEC SCCL SECL WCL Grand Total

Rail 0 190000 739860 355500 27500 58410 1371270

Road 231000 670020 284299 1543740 266000 17990 197759 1372900 610380 5194088

Qty. In Tons

Grand Total 231000 860020 1024159 1899240 266000 64740 197759 1431310 610380 6584608

Mar'12

Feb'12

Jan'12

Dec'11

Nov'11

Oct'11

Sept'11

4,000,000 3,000,000 2,000,000

OFFERED QTY (in tons)

Mar'12

Feb'12

Jan'12

Dec'11

Nov'11

Oct'11

Sept'11

Aug'11

July'11

SOLD QTY (in tons)

Companywise quantity offered & sold through coaljunction & MSTC in Mar’12 vs Feb12 2,500,000 2,000,000 1,500,000 1,000,000 500,000

CCL RAIL

CCL ROAD

SCCL RAIL

SCCL ROAD

WCL RAIL

ECL RAIL

WCL ROAD

ECL ROAD

SECL RAIL

0 SECL ROAD

Sold qty 47.04% -100.00% 67.70% NA 95.59% NA NA -33.33% 107.83% 50.00% 318.50% 192.31% NA NA 2.69% NA 4.40% 733.33% 105.69%

5,000,000

1,000,000

Variation (in percent) Offered qty 70.39% -78.95% 52.34% NA 95.59% NA NA -33.33% 107.12% 50.00% 324.97% 306.15% NA NA 4.82% NA -0.95% 733.33% 102.45%

6,000,000

NEC RAIL

Qty sold 157,100 59,250 920,550 136,000 41,250 660,600 38,940 67,933 253,110 192,583 641,760 22,800 3,191,876

Aug'11

7,000,000

NEC ROAD

Qty offered 204,000 75,050 1,280,000 136,000 41,250 702,250 38,940 68,000 253,110 197,000 710,600 22,800 3,729,000

July'11

8,000,000

BCCL ROAD

Qty sold 231,000 0 1,543,740 355,500 266,000 17,990 27,500 1,372,900 58,410 284,299 739,860 610,380 197,759 670,020 190,000 6,565,358

OFFERED BY RAIL

Quantity offered & sold through coaljunction & MSTC

Quantity In Tons

Qty offered 347,600 15,800 1,950,000 355,500 266,000 18,000 27,500 1,454,500 58,410 288,980 1,028,016 638,800 206,500 703,850 190,000 7,549,456

June'11

OFFERED BY ROAD

Companies Mar'12 QTY OFFERED

Mar'12 QTY SOLD

Feb'12 QTY OFFERED

Feb'12 QTY SOLD

Companywise data of sold quantity through coaljunction & MSTC in Mar’12 (road & rail) Quantity (in Tons)

BCCL ROAD BCCL RAIL MCL ROAD MCL RAIL NCL ROAD NCL RAIL NEC ROAD NEC RAIL SECL ROAD SECL RAIL ECL ROAD ECL RAIL WCL ROAD WCL RAIL SCCL ROAD SCCL RAIL CCL ROAD CCL RAIL TOTAL

Feb’12

May'11

Apr'11

1,000,000

Companywise quantity offered & sold through coaljunction & MSTC in Mar’12 vs Feb’12 via rail Qty. In Tons & road Mar'12

2,000,000

June'11

Qty. In Tons

Variation (in percent) -21.42 -21.26 -23.63 -23.11 -17.96 -29.94 -10.22 -19.17 -14.53 -34.8 -12.64 -10.06 -21.22 -21.22 -21.22

3,000,000

NCL RAIL

Sold Qty (in tons) 2,608,551 2,805,310 2,481,981 2,179,060 2,328,720 1,303,176 2,255,313 1,764,911 2,203,438 385,904 2,891,019 2,632,049 3,758,496 3,576,946 6,584,608

4,000,000

NCL ROAD

Offered Qty (in tons) 3,319,686 3,562,770 3,249,800 2,834,160 2,838,672 1,860,004 2,512,015 2,183,370 2,578,082 591,910 3,309,434 2,926,557 4,771,008 4,129,350 7,568,706

5,000,000

May'11

Month Jan'11 Feb'11 Mar'11 Apr'11 May'11 June'11 July'11 Aug'11 Sept'11 Oct'11 Nov'11 Dec'11 Jan'12 Feb'12 Mar'12

6,000,000

MCL RAIL

Monthwise quantity offered & sold through coaljunction & MSTC E-Auction

7,000,000

Apr'11

Offered by Rail 328,366 738,520 326,950 367,390 273,884 135,535 275,070 92,040 315,350 79,060 225,852 220,400 252,812 431,150 1,675,226

BCCL RAIL

Offered by Road 2,991,320 2,824,250 2,922,850 2,466,770 2,564,788 1,724,469 2,236,945 2,091,330 2,262,732 512,850 3,083,582 2,706,157 4,518,196 3,698,200 5,874,230

Qty Offered In Tons

Month

Quantity in Tons

Jan'11 Feb'11 Mar'11 Apr'11 May'11 June'11 July'11 Aug'11 Sept'11 Oct'11 Nov'11 Dec'11 Jan'12 Feb'12 Mar'12

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

Qty. In Tons

MCL ROAD

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

2000000 1500000 1000000 500000 0 BCCL

CCL

ECL

MCL

NCL

NEC

SCCL

SECL

WCL

SUBSIDIARY NAME RAIL

ROAD

Note: Data for the period January 2011 - December 2011 and February 2012 is for e-auction through coaljuntion only, while data for January and March 2012 includes data of MSTC

COAL INSIGHTS 82 may 2012

E-Auction

CIL’s sale via e-auction sharply up in FY12 Coal Insights Bureau

5000

Notified and bid price of total alloted quantity in 2011-12

4500

4000

3500

in Rs Crore

3000

2500

2000

1500

1000

500

0 ECL

BCCL

CCL

NCL

Notified Price of Total Allocated Qty( In Rs Cr.)

WCL

SECL

MCL

NEC

Bid Price of Total Allocated Qty 2011-12

Ltd (SECL) offered higher quantity as compared to the previous year. On contrary, Mahanadi Coalfields Ltd (MCL) saw a signficant drop in quantity offered in 2011-12. Also, Eastern Coalfields Ltd (ECL), Central Coalfields Ltd (CCL), Northern Coalfields Ltd (NCL) and North Eastern Coalfields Ltd (NECL) witnessed a fall in quantity offered in 2011-12 as compared to the previous year. The average realisation in 2011-12 was 66.6 percent higher than the notified price as compared to a premium of 80.7 fetched in 2010-11. In 2009-10 a premium of 59.8 percent was fetched over the notified price. CIL earned a total of `1,3826.88 crore from sale of coal through e-auction in 2011-12 against a notified price of `8,300 crore. During 2010-11, the company had earned `9,120.92 crore from sale of coal through e-auction in 2010-11 against the notified price of `5,048.86 crore while in 2009-10 CIL’s earning stood at around `7,238.47 crore against the notified price of `4,528.95 crore.

E-auction by CIL subsidiaries for 2011-12 vs 2010-11 200

180

160

140

in lakh tons

120

100

0 ECL

BCCL

CCL

Total Qty offered 2011-12

NCL

Total Qty offered 2010-11

WCL

SECL

Total Qty allocated 2011-12

MCL

NEC

Total Qty allocated 2010-11

Out of the eight CIL subsidiaries, MCL offered the maximum amount of coal in the auction of around 17.547 mt out of which almost 15.393 mt got sold. This was followed by 14.215 mt of coal offered by SECL out of which 12.753 mt was sold. The next highest quantity was offered by WCL which sold 6.414 mt against the offered quantity of 7.047 mt. The highest amount of revenue was earned by BCCL whose average realisation stood at around 121 percent at `1,397.87 crore over the notified price of `632.45 crore. SECL earned the next best revenue during the year 201112 realising 79.3 percent over the notified price of `1,558.73 crore. The company’s total bid price stood at around `2,795.5 crore. This was followed closely by 78.3 percent profit of Central Coalfields Ltd (CCL) over their notified price of `1,019.77 crore. Revenue earned through e-auction in 2011-12 vs 2010-11 3000.00

2500.00

2000.00

in Rs Crore

he eight coal producing subsidiaries of Coal India Ltd (CIL) sold a total of 49.721 million tons (mt) of coal via e-auction in the financial year 2011-12, a rise of 6.8 percent over 46.557 mt sold during entire 2010-11. During the financial year 2009-10, around 45.73 mt of coal was sold through e-auction by CIL subsidiaries. CIL had offered 57.479 mt of coal for sale through e-auction platform, of which around 86.6 percent was actually booked during the year, while 84.23 percent of the 55.279 mt of coal offered was booked in 2010-11. This indicates a slightly better response from the buyers and increased appetite for the fuel. Among the subsidiaries, Bharat Coking Coal Ltd (BCCL), Western Coalfields Ltd (WCL) and South Eastern Coalfields

1500.00

1000.00

500.00

0.00

COAL INSIGHTS 84 may 2012

ECL

BCCL

CCL

NCL

Bid Price of Total Allocated Qty 2011-12

WCL

SECL

MCL

Bid Price of Total Allocated Qty 2010-11

NEC

port data Major ports through which Coking Coal arrived in India Jan’12 - Mar’12 Port VIZAG MORMUGAO PARADIP KOLKATA NEW MANGALORE MUNDRA KANDLA CHENNAI

Qty (in Tons) 2,183,279 1,433,333 1,257,805 903,876 444,175 407,386 92,771 454

Grand Total

Country of Origin

5,022,123

UNITED STATES

834,305

SOUTH AFRICA

316,820

NEW ZEALAND

220,537

OTHERS

329,294

Grand Total

Major ports through which Coking Coal arrived in India Jan’12 - Mar’12 6%

6,723,080

Major Coking Coal supplier countries to India (through mentioned ports) - Jan’12-Mar’12

33%

13%

Qty (in Tons)

AUSTRALIA

6,723,080

Major Coking Coal supplier countries to India (through mentioned ports) Jan’12 - Mar’12

5% 3%

12%

19% 21% VIZAG

MORMUGAO

PARADIP

KOLKATA

NEW MANGALORE

MUNDRA

KANDLA

75%

CHENNAI

Major ports through which Steam Coal arrived in India Jan’12-Mar’12 22%

VIZAG PARADIP MUMBAI MUNDRA NEW MANGALORE

OTHERS

SOUTH AFRICA

Qty (in Tons) 2,114,747 1,887,422 1,139,319 1,037,498 754,149

KANDLA

753,525

MORMUGAO

515,517

INDONESIA

6,434,764

KOLKATA

476,212

SOUTH AFRICA

1,940,207

COCHIN Grand Total

INDONESIA

SOUTH AFRICA

74%

Country of Origin

Qty (in Tons)

22%

7,000

AUSTRALIA

8,685,388

Grand Total

310,416 8,685,388

74%

AUSTRALIA

INDONESIA

Major ports through which Steam Coal arrived in India Jan’12 - Mar’12 6%

UNITED STATES

NEW ZEALAND

Major Steam Coal supplier countries to India (through mentioned ports) Jan’12-Mar’12

Port

AUSTRALIA

SOUTH AFRICA

AUSTRALIA

Major Steam Coal supplier countries to India (through mentioned ports) - Jan’12 - Mar’12

0% 24%

4% 22%

22% 12% 13%

74%

VIZAG

PARADIP

MUMBAI

MUNDRA

NEW MANGALORE

KANDLA

MORMUGAO

KOLKATA

COCHIN

INDONESIA

SOUTH AFRICA

AUSTRALIA

Note: Name of importers for coal and coke will be provided on request. Figures are based on consignment lifted from these ports for which price details/break-up is available with Coal Insights team

COAL INSIGHTS 85 may 2012

Tear along the dotted line

COAL INSIGHTS 86 May 2012 Tear along the dotted line