CCAI April-20

April 2020 Price: 40/W H E R E S E R V I C E A N D D E D I C AT I O N J O I N H A N D S

CIL poised to provide domestic coal in lieu of procurement from imported sources

Most major cement manufacturers restart productions after almost a month amidst demand crunch

National lockdown prompted 36% drop in Railways cargo in April, 2020

Centre to provide liquidity of Rs.90,000 crore to struggling DISCOMs

Vol. XLIX No. 01 Published on : 28.04.2020

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CCAI Monthly Newsletter December 2019

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From the Editor’s Desk

The incessant spread of cor onavirus has wreaked havoc in economies across the globe and the dow nturn is showing no signs of wit hering away quickly. India, world’s fastestgrowing trillion-dollar econom y has come to a virtual standstill as the nation has imposed world's mo st extensive lockdown starting March 25 to foil the contagion.

Coal, the only sector to pos t a positive figure back in March, in the immediate aftermath of the pan demic outbreak, had presented a far from the reassuring picture as gro wth rate diminished. The situ atio n became grimmer with the extension of the coronavirus-induced lock dow n in April as demand from thermal gen erators and the key process ind ustries like steel and cement shrank sign ificantly.

National miner Coal India Lim ited’s sales fell by more than a quarter in April, the steepest rate of dec line in at least six years. Coa l offtake by customers, such as power gen erators, plummeted by over 25 percent to 39. 06 million tonnes while its production also dipped by mo re than 10 per cent.

The mismatch in demand and supply has led to stockpiling of coal in CIL’s inventories to its highest-ever level. The prolonged lockdow n across the world and abundance of dom estic coal stock has also caused India’s coal import to drop by nearly 29 per cent in April, even though spot prices of global coal have plunged to multi-year lows.

The Centre has urged the sta te governments not to import the dry fuel and procure coal from the dom estic supply instead. Electricit y generators are also encouraged to buy mo re coal even as stock at the pla nt ends are at record high.

In a silver lining to the coal consumers, CIL has administer ed a number of initiatives including extend ing the last date of payment against coal value, relaxing payment ter ms, rescheduling E-auction dat es which fell during lockdown, increasing the ‘trigger level’ of coal sup ply to Power plants, extending Usance LC facility to both sectors and so on.

Meanwhile, clean energy is gai ning a greater share of India’s energy mix.

Electricity generated from ren ewable sources like nuclear and hydropower has gone up by 5 percent between March-April, 2020.

For thcoming months will predict whether the gloom surrounding India’s ene rgy sector will change into a glimmer of hope.

4 | CCAI Monthly Newsletter April 2020

CONTENT Vol. XLIX No. 01 April 2020

Official Organ of the Coal Consumers’ Association of India. Disseminates News and Views on Coal and all other sources of Energy.

4, India Exchange Place - 7th Floor Kolkata - 700 001 Landline : +91 33 22304488 / 22621516 E-mail : sec.ccai@gmail.com Website : www.ccai.co.in

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Consumers' Page

10

Power

16

Domestic

22

Global

Editor : Subhasri Nandi Annual Subscription Rs. 400/(including postage) MO/DD to be made in favour of “Coal Consumers’ Association of India” CCAI do not necessarily share or support the views expressed in this Publication.

26 In Parliament 32 Overall Domestic Coal Scenario 33 Energy Generation Report

34 Monthly Summary Of Domestic Coal 36 Monthly Summary Of

Imported Coal &Petcoke

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Production And Offtake Performance Of Cil And Subsidiary Companies CCAI Monthly Newsletter April 2020

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CONSUMERS’ PAGE Present Coal Scenario State-owned Coal India Limited has produced 40.38 million tonnes of coal in April, 2020 amid the devastating crisis caused by the coronavirus pandemic. It is praiseworthy that in spite of dampening demand from all major coal consuming sectors of the country, CIL Subsidiaries have continued with their productions vigorously.

Company’s coal offtake figure stands at 39.03 million tonnes in this month. The offtake amount has slipped by 25.4 percent compared to April, 2019.

Common concerns faced by both Power and Non-Power sectors: 1. Extension of time for deposition of payment by E-auction/FSA customers: The unprecedented situation caused by the pandemic outbreak enabled the Central government to further extend the nationwide lockdown for a second term from 15th April to 3rd May, 2020. The prevailing condition increased the problems of Power utilities and Industries, who were already struggling due to sinking demand,

06 | CCAI Monthly Newsletter April 2020

lack of workforce and crisis of fund.

To tackle the situation, coal consumers across the board have requested the Ministry of Coal and CIL to extend the last date of payment against the coal allotted to them through FSA/ E-auctions.

Response: Considering the adverse situation, CIL has extended last date of deposition of payment has been considered for seven more working days, till 10th May' 2020) from the date of withdrawal of lock down in those cases where the last date as per original schedule of payment is fallen within the lock-down period.

2. Extension of Usance LC for power and NRS consumers: Provision of LC facil-

ity was already embedded in CIL’s supply contracts for Power Sector. However, this was not included in Non-power FSA as an as an alternative mode of payment for procuring coal. Later on IRLC facility was provided to NRS consumers. Under the present situation, consumers across the board had appealed for Usance LC to be implemented for both Power and Non-power FSAs.

Response: Considering the request from consumers, CIL has extended the facility of Usance LC as a mode of payment for both Power and NRS consumers in addition to advance payment and irrevocable Revolving Letter of Credit (IRLC) for sourcing coal through FSAs and various Eauction routes.

3. Request for extension of RDO validity: In view of the prevailing lockdown in the

country the consumers requested for extension of the validity of Road Delivery Orders (RDOs) which were supposed to expire within the lockdown period.

Response: A number of Subsidiary coal com-

panies of CIL have extended the validity of RDOs beyond the lockdown period so that the consumers can continue procuring coal.

4. Request for Reserve price to be kept same as notified price in the forthcoming auctions for both sectors: Due to

increase in stock at CIL Collieries and reduced dispatches the consumers have requested CIL to keep the Reserve Price same as the Notified Price for the forth- coming Spot/ Exclusive/Special Forward auctions without charging any addon as applicable before.

Response: CIL has reviewed the price of coal to be kept under various E-auction schemes in view of the difficult market conditions and prolonged period of lockdown and decided to keep the reserve price of coal, same as notified price for both sectors for the E-auctions to be held between April’20 to September’20.

5. Appeal for return of all kind of refunds by CIL Subsidiaries to the Utilities and Industries: Requests have been made by consumers from both sectors to consider immediate return of all kinds of refunds including security deposits, BGs, GST, CST, pending coal value if any etc. submitted to Subsidiaries.

Response: The national miner has urged its Subsidiaries to immediately expedite the process of releasing all kind of refunds. Most of the Subsidiaries have started taking initiatives to streamline the refunds.

6. Request for not imposing penalty on consumers for short-lifting: The on-

going lock down across the nation has compelled several Power Utilities to run at low Plant Load Factor (PLF) while many Industries are going through complete or partial closure. So the requirement of fuel has dipped drastically for coal consumers across the board. Also, unloading of coal has become difficult due to scarcity of workforce at plant ends.

It is requested that the consumers are not penalised for short-lifting of allotted quantity under the FSA during this period of crisis.

Response: As per central government’s directive, the lockdown period is considered as a Force-majeure. While discussing the matter with the coal companies it is found that penalty for short-lifting would not be applicable for the lockdown period as per force-majeure clause.

Issues faced exclusively by Power Sector Consumers: 7. Request for Waiver of Performance Incentive (PI) for coal supplied to Power Utilities: In view of financial hardship

of the consumers due to sluggish demand and difficult market conditions as well as large coal stock at the pit heads of the Subsidiary coal companies, the Power sector consumers have CCAI Monthly Newsletter April 2020

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10. Request for reviewing the assessment of Normative Coal Requirement & ACQ for CPPs under NRS Linkage Response: Considering the woes of the pow- Auction FSAs: Aluminium has a continuous requested CIL to waive off Performance Incentive (PI) under different power FSAs for coal supplies beyond the stipulated level.

er utilities, CIL has instructed all the Subsidiaries to waive off PIs under all Power FSAs towards the dispatches for the first & second quarters of the current fiscal (Apr-Sep, 2020).

manufacturing process. So the CPP plants for aluminium run at almost 95 to 99% PLF, while CEA norms assume operations at 85% PLF while assessing coal requirement. This leads to under-assessment of coal requirement of Aluminium CPPs.

8. Request for improving quality and reduce cost of coal from BCCL: Due Requests have been made to MoC, CIL and CEA

to multiple coal quality issues including Wide variation between billed coal quality and actual coal quality received at plant ends, unsatisfactory third party sampling due to various reasons and unusual variation between analysed grade of third party and that of the referee labs have made procuring coal from BCCL difficult for Power consumers. Conversion of erstwhile non-coking coal into coking coal significantly increased the price of the said grades The consumers have requested the Subsidiary to take appropriate measures to improve the quality and create a conducive environment for third party sampling & analysis and consider price rationalization to the extent possible.

Response: The Subsidiary has reduced the price of W-IV, W-V and W-VI grades of HMVC coal by 10 percent.

9. Request for offering coal through Special Forward E-auction from CCL directly via Rail mode: Central Coalfields

Limited (CCL) has offered coal through Special Forward e-Auction 2019-20, Phase-III by Road/ RcR Mode for Power Sector consumers. However, under the present crisis, the Power Utilities requested to supply coal directly via Rail Mode only.

Response: CCL has assured to offer coal to the consumers only via Rail Mode.

Issues faced exclusively by NRS consumers: 08 | CCAI Monthly Newsletter April 2020

so that Calculation of normative requirement of Aluminium CPPs may be based on 95% PLF instead of 85% and ACQs may be adjusted upwards accordingly. It is also requested that the energy shortfall in Aluminium CPPs due to grade slippage may be proportionate increase in linkage quantity on a quarterly basis.

11. Consumers’ issues pertaining to WCL: A. Request for safe exit option for NRS consumers: Following price hike in 11 WCL

mines on November, 2019, request has been made by the NRS consumers willing to exit from their respective FSAs due to the coal price hike that they should be immediately allowed to do so without any penal charges. Hundred percent of Performance Security, Financial Coverage and Advances deposited for availing the supply under these FSAs and the original Bank Guarantees may also be returned to the respective consumers.

B. Request to rollback the elevated coal price in WCL mines: The NRS consumers

have also appealed WCL to consider roll back the elevated price as favorable coal price may interest the Industries operating in close vicinity of those mines to continue procuring coal from the subsidiary.

C. Request not to impose restrictions regarding participating in future tranches: The Industries have also requested

WCL not to impose any restrictions on them for participating in future Tranches, including Tranche V.

Consumers’ issues related to Railways: 12. Request for Waiver of Busy Season Surcharge: The freight traffic has significant-

ly reduced due to subdued demand in several coal consuming sectors following the COVID-19 outbreak in March.

Consumers have appealed that the busy season surcharge on freight transport be waived off this year under the current circumstances.

To boost the economy, requests have been made by consumers to include coal in the bracket of essential commodities and reduce its freight rate accordingly.

14. Request for not levying penal charges on the consumers during pandemic outbreak: Several coal consumers

across the sectors are striving hard for their sustenance due to the present adverse condition dip in demand, lack of manpower and fund crunch. Therefore, the consumers across the board have collectively appealed for not levying penal charges like overloading, pushback etc on them.

13. Request for inclusion of coal freight under the classification of essential commodities: The freight rate for 15. Request for providing Usance LC almost all of coal and coal based products fall facility for payment of freights: In order under rate class of 145A which is much higher than other essential commodities. Coal is considered to be one of the most significant drivers of our economy as it is highly essential for both Power and manufacturing sectors.

to provide relief to Power Utilities It is requested that Railways may introduce Usance LC for payment of freight in line with the facility extended

by MoC as it would be of immense help to Power and Non-power sector in this hour of crisis.

CCAI Monthly Newsletter April 2020

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POWER Power ministry asks plants to reduce coal imports In a letter to power producers written the government has asked power plants which blend high quality imported coal with domestic fuel to “make best efforts to replace their imports with domestic coal”.

Out of the 198.5 giga-watt (GW) of installed coal-based power plants more than 162 GW import coal for power generation. However, 144.6 GW of this capacity import coal for blending with the local variant, while 17.6 GW are designed to run specifically on imported coal. In FY20, power plants in the country imported 69.2 million tonne (MT) coal, up 12% annually. Of this, 45.5 MT were imported by plants designed to run on imported coal.

In the wake of power demand slowing down due to muted industrial and commercial activities amid the lockdown to contain the coronavirus, power plants currently have coal stocks of about 50 MT which can sustain them for 30 days. Since power plants are not very keen to lift coal as of now, it raises the risk of Coal India’s (CIL) output coming down for the second year in a row.

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If power plants, at the government’s behest, agree to reduce imports then CIL’s FY21 production target of 710 MT might become achievable.

Bucking the upward trend of several years, CIL’s output declined 0.8% annually to 602.1 MT in FY20.

Power procurement through exchange by distribution utilities yields significant savings: IEX The Indian Energy Exchange (IEX), an energy trading platform, has stated that it has witnessed heightened activity on exchange and the distribution utilities across India since the Covid-induced lockdown on March 25.

While the peak demand declined by almost 25 per cent, the exchange has witnessed high sell side liquidity, which is almost at 2.7 times the demand side, which is helping to keep the price in the market under check.

The average price in IEX day-ahead market has been as low as ₹2.36 per unit during March 24 to April 20.

“The distribution utilities are meeting their seasonal demand as well as replacing their costlier

generation with low cost power available on the exchange, thereby optimising procurement costs and saving significantly,” Rajiv Srivastava, Managing Director and CEO, IEX, said in a statement.

IEX assures 24x7 access to its platform with the flexibility of trading in 15-minute trading block.

This allows buyers to procure power to meet the fluctuating demand during different time blocks in a single day and ensure 24x7 power to consumers.

Rs 90,000 crore scheme in offing for power companies The government is looking to arrange low-cost finance for its Rs 90,000 crore liquidity infusion plan to prevent blackouts as troubled power generation plants are running out of cash amid a nationwide lockout. The power ministry has sought bonds under special window to the sector besides funds from multi-lateral agencies and institutions like LIC, EPFO and NSSF for the scheme.

The loans are sought to be made available to Power Finance Corp (PFC) and REC Ltd, the two sectoral lending institutions in Indian power sector, for onward concessional lending to state electricity distribution utilities to help them clear bills of power generating companies.

The power ministry has also sought relaxation of exposure norms for banks and financial institutions to lend to state-run PFC and its subsidiary REC Ltd. A senior government official said the proposals are under consideration by the finance ministry and the final draft will have to be approved by the Union Cabinet.

Proposed electricity contract enforcement authority mired in confusion The Electricity Contract Enforcement Authority (ECEA) under Section 109 (A) of the proposed Electricity Bill will be set up to resolve matters relating to the contracts of sale, purchase, and transmission of power between two or more parties.

The power ministry released the amendments made to the Electricity Act, 2003 last week, and invited public comments. While sector executives welcomed this new organisation, saying it will speed up judgment, some experts have questioned the ambiguity in powers prescribed to the ECEA. “The scope of adjudicatory jurisdiction of SERCs has been reduced, and the power to adjudicate disputes and enforce performance of contracts related to the purchase, sale, or transmission of power is now vested in the ECEA. They have tried to create a central body for adjudicating disputes,” said Aditya K Singh, associate partner at HSA Advocates.

A K Khurana, director general, Association of Power Producers (representative body of private power generators), said because the ECEA has been given the power of a civil court, it will help instill discipline among contracting parties to adhere to contractual obligations.

“However we may waste great effort and time on fight for jurisdictional space between the ECEA and ERCs. For instance, on the multistate power purchase agreements (PPAs), it took three years to get clarity from the Supreme Court. There should be a clear demarcation between the two authorities,” he said.

Credit profile of Indian power utilities likely to remain steady: Fitch The credit profile of regulated Indian power utilities like NTPC will remain largely unaffected despite cash collection delays amid the coronavirus pandemic. The rating of these entities is due to favourable regulatory frameworks that ensure stable operating profits, according to Fitch Ratings.

“We believe any delays in recovering accrued revenue will be recouped with interest costs, in line with slated regulations,” the rating agency said in a statement.

The assets of NTPC Limited (BBB-/Stable) and the Adani Electricity Mumbai Limited (AEML) obligor group (US dollar bonds: BBB-) are based on a cost-plus tariff framework. This provides regulatory certainty till March 2024 from the CCAI Monthly Newsletter April 2020

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central regulator and till March 2025 under the Maharashtra regulator, when the current fiveyear tariff period ends.

These arrangements also cover most of Power Grid Corporation of India Ltd (POWERGRID, BBB- /Stable) and Adani Transmission Limited's (ATL, BBB-/Stable) projects. There is no price risk in return-based frameworks, so, if there are temporary tariff cuts, losses will be recovered in the next review, Fitch said.

The transmission assets at POWERGRID and ATL that are not covered by the framework are awarded under tariff-based competitive bidding (TBCB), with prices fixed for a duration of 25 to 30 years.

Power firms' dues to CIL rise Rs 2,000 crore in 15 days Coal India's dues from the power sector increased almost Rs 2,000 crore in the first two weeks of April to cross Rs 15,000 crore for the first time as generators are unable to pay, which will make the state firm’s cash flow negative if the situation does not change. Almost 80% of the company’s output goes to power plants, and the biggest dues were from state-owned power firms in West Bengal, Tamil Nadu and Uttar Pradesh.

Coal India is continuing supply to state power firms despite default, as advised by the government, to give states some respite from the ongoing liquidity crisis. Distribution companies are not paying power generators, which makes them unable to pay for coal.

Coal India’s sales are also down. About 40 power plants in a few states, including Haryana, Punjab and Rajasthan, have stopped lifting coal either because they have enough stocks, or to reduce inventory cost. Subsidiary, Central Coalfields is the worst hit. Almost all its power sector consumers are refusing to accept supplies and make payments.

Discoms to suffer Rs 30K cr revenue loss, face Rs 50K cr liquidity crunch due to lockdown: CII 12 | CCAI Monthly Newsletter April 2020

In its report, CII has suggested host of measures like easy credit facility for discoms (from PFC and REC) to pay off its dues to Gencos, lower tariff especially for industrial and commercial consumers and deferral of indirect taxes like electricity duty, coal cess etc.

Industry body CII said discoms are likely to suffer a net revenue loss of around Rs 30,000 crore and liquidity crunch of about Rs 50,000 crore due to the coronavirus-induced nationwide lockdown. According to government data, the discoms owe Rs 92,602 crore to Gencos as of February.

CII also suggested lower tariff especially for industrial and commercial consumers and deferral of indirect taxes like electricity duty, coal cess etc. According to the report, power sector, one of the essential services under the lockdown till May 3, is battling the twin issues of demand and liquidity compression. Latest data indicates that total demand per week seen 25-28 per cent reduction.

Further, 20 to 25 per cent of debt of renewable energy projects comes from overseas lenders, to whom the 3-month moratorium by RBI will not apply, it pointed out..

Discoms obligated to pay for electricity within 45 days: Power Ministry With its relief being construed as a moratorium on payments, the Union Power Ministry has clarified that electricity distribution companies will continue to be obligated to pay for power within 45 days of presentation of the bill. It, however, lowered late payment charges for the period between March 24 and June 30.

"It is made clear the obligation to pay for the power within 45 days of the presentation of the bill (or the period given in the power purchase agreement) remains the same," a letter addressed to heads of power/energy departments of all states, said.

As per the relief granted last month, the distribution companies will need to either deposit or give Letter of Credit (LoC) for 50 per cent of the cost of power they want to buy. The remaining

will have to be paid within the period given in the PPA, failing which the delayed payment surcharge will apply.

On March 28, the Union Government approved a financial relief package for the power sector that provided for easing of payment security mechanism for three months and reduced payment security amount by half for future power purchases..

States to allow construction activities at thermal, hydro plants outside municipal limits The power ministry has asked states to allow construction activities at thermal and hydro power plants falling outside the municipal corporation limits during the lockdown. The Ministry of Home Affairs (MHA) has allowed construction of hydro power plants outside the municipal limits in the states from April 20 in its directive issued on April 15, 2020.

In an advisory to states, the Ministry of Power stated, "It is requested to allow the construction activities in thermal/hydro power generation projects outside the limits of municipal corporations and municipalities as per para 16(i) of the MHA order on April 15."

The ministry also asked the stated to allow the intrastate and interstate movement of construction materials, equipment, spares and consumables, etc, for these under construction power projects.

The advisory has been issued to all the state/UT secretaries of power, district magistrates, police commissioners/ superintendent of police and CEOs of urban local bodies (ULBs) of all states and UTs in the country.

Renewables sector misses FY20 target due to headwinds, Covid-19 The renewable energy capacity addition fell short of its target for 2019-20, adding only about three-fourth of the target for the fiscal.

As against the capacity addition target of 11,802

MW for 2019-20, the renewable energy sector added only about 8,711 MW, or about 74 per cent. In 2018-19, the sector added 8,432 MW of new capacity to the grid.

With lower addition in FY20, the sector has missed its capacity addition target for the fourth year in a row. The sector added 11,754 MW in 2017-18 and 11,320 MW in 2016-17, its highest-ever additions. But in the last two years, new capacity addition slipped below 10,000 MW. As on March 31, 2020, cumulative grid-connected installed renewable power capacity in India stood at 87,027 MW.

Renewable energy projects get 30 days extension for commissioning beyond lockdown period The Ministry of New and Renewable Energy (MNRE) has granted an extension of 30 days for commissioning of renewable energy projects beyond the lockdown period.

This will be a blanket extension and there will be no requirement of case to case examination, as also there will be no need to ask for any evidence for extension due to lockdown, the statement aid. The ministry has also said that all implementing agencies of the MNRE will treat lockdown due to COVID-19, as force majeure.

Referring to the renewable energy departments, the ministry has asked them that they may also treat lockdown due to COVID-19, as force majeure and may consider granting appropriate time extension on account of such lockdown.

The MNRE had, earlier on March 20, 2020, issued directions to SECI, NTPC and Additional Chief Secretaries / Principal Secretaries / Secretaries of Power / Energy / Renewable Energy (RE) Departments of state governments/ UTs/ Administrations, to treat delay on account of disruption of the supply chains due to spread of coronavirus in China or any other country, as force majeure.

Covid-19: India woos renewable energy equipment makers CCAI Monthly Newsletter April 2020

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India is eyeing renewable energy equipment manufacturers looking to shift base from China following the Covid-19 outbreak.

“At a time when many companies are planning to shift their manufacturing base from China, it is an opportune time for India to bring policy changes to facilitate and catalyse manufacturing in India,” a statement from the Ministry of New and Renewable Energy (MNRE) said.

MNRE has set up the renewable energy Industry Facilitation and Promotion Board to facilitate investment in the sector. “The three power and renewable energy sector non-banking financial companies, namely, Power Finance Corporation Ltd, REC and Indian Renewable Energy Development Agency (IREDA), have reduced their repayment charges to 2 per cent to enhance funds availability for new projects,” the statement said.

MNRE has also written to state governments and port authorities to identify land parcels of 50-500 acres to set up renewable energy manufacturing parks. Tuticorin Port Trust, Madhya Pradesh and Odisha have expressed their interest in setting up these parks, the statement said.

Currently India has around 10 GW of wind equipment manufacturing capacity. It imports about 85 per cent of its solar cells and modules requirement.

States may soon get hydro power purchase targets The power ministry is soon likely to notify guidelines giving states hydro power procurement targets on the lines of renewable energy purchase obligations, a senior official said. The move comes soon after the nine-minute lightsoff feat when the grid survived 32 GW demand drop for a few minutes backed by flexible generation from hydropower resources.

“We will be notifying the quantum of obligation for hydropower till 2030 on discoms. This will be given only to projects commissioned after March 9, 2019 and those plants which did not have power purchase agreement s(PPA) on

14 | CCAI Monthly Newsletter April 2020

that date,” the official said.

Power regulator Central Electricity Regulatory Commission (CERC) is likely to issue directions on trading of hydroelectric certificates like renewable certificates that will enable discoms with more hydro generation to trade with discoms which do not have access to such plants.

Hydroeletric stations help in maintaining power grid stability with flexibility to ramp up and down generation as they take less time to start and stop as compared to other sources of power production. Hydropower stations are being considered as compliment to India’s large-scale renewable energy addition programme.

India's wind installation for 2020 likely to fall drastically The coronavirus-led lockdown has blown away India’s wind energy target for 2020, as all major turbine manufacturers, including Siemens Gamesa, Vestas, GE and Inox Wind, have suspended production.

Bloomberg NEF has lowered its expectation of how much wind energy capacity India will add in 2020 to 1.95GW from an earlier forecast of 2.56GW. “We cut that down by 24% due to the 21-day nationwide lockdown,” it said.

Siemens Gamesa’s spokesperson said, “Considering the situation, operations at our manufacturing facilities at Mamandur, Redhills, Nellore and Halol will be suspended during the 21-day lockdown period.”

This is a big blow for the sector which was already troubled by low ceiling tariffs, renegotiation of power purchase agreements (PPAs), and connectivity delays for the last two years.

Experts say it will take a few weeks for normalcy of operations to resume but the Inox executive said operations can resume quickly. “We are different from the solar industry because we do not have equipment from China entering India.

And those items we import are already us in our inventory,” he said.

CCAI Monthly Newsletter April 2020

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DOMESTIC Coal India Ltd extends deadline for EoI submission for rationalisation of coal linkages Amid nationwide coronavirus lockdown, stateowned Coal India has extended the deadline for submission of expression of interest (EoI) from power generation companies (gencos) for rationalising coal linkages.

The linkage rationalisation refers to transfer of coal supply source of a power plant from a farend mine to the nearer one.

“Due to the extension of the period of COVID-19 linked lockdown, and on receipt of the request of the power plants experiencing difficulties in collection of the data/details related to the rationalisation of linkages, the last date of submis-

16 | CCAI Monthly Newsletter April 2020

sion of the EoI…is extended from April 23 to May 10,” Coal India Ltd (CIL) said in a letter to power gencos.

Earlier, CIL had invited expression of interest from the desired state/central gencos proposing for rationalising their existing linkages.

“Based on the information provided by the coal companies regarding the availability of coal and information from power gencos through EoI, feasibility of rationalisation of linkages shall be examined and a proposed matrix in this regard would be placed in the public domain for seven days to seek comments from the stakeholders which will be then finalised after due approval,” the PSU had said.

The exercise aims to reduce the distance by

which the coal is transported, thus, easing up the railway infrastructure for gainful utilisation of other sectors.

The linkage rationalisation is considered only for IPPs having linkages through allotment route.

CIL to produce 710 MT coal in current FY: Pralhad Joshi Coal India Limited (CIL) will produce 710 million tonnes (MT) of coal in the current financial years and the company’s coal offtake target will be at the same level. CIL's pithead stock was at 75 MT as on March 31. The company closed fiscal 2019-20 with coal production of 602.14 MT, against the target of 660 MT. “The demand of coal will pick up again after coronavirus lockdown, so I have directed CIL to keep the production and offtake targets at 710 MT for financial year 2020-21 in line with its goal to achieve one billion tonne coal production by year 2023-24," Coal Minister Prallhad Joshi said.

The company’s Over Burden (OB) or top soil removal target for financial year 2020-21 was set in the meeting at 1580 million cubic meters.

Joshi instructed CIL management to make all necessary preparations so that production doesn’t get affected during monsoon season.

He asked CIL authorities to provide quality coal to all consumers and make sure that sufficient coal is available at power plant during the year.

Coal India signs pact with BEML Coal India Ltd (CIL) has signed an agreement with BEML Ltd for procuring as many as 15 dumpers amounting to ₹400 crore.

Under the purchase pacts signed, CIL will procure seven 150 tonne dumpers at an estimated ₹150 crore and eight 190 tonne dumpers at ₹250 crore.

Dumpers used in opencast coal mines play a

critical role in hauling coal and the top soil.

“The 150 T dumpers would be deployed on trial basis in the Gevra opencast project of South Eastern Coalfields Ltd, whereas, four each of 190 T dumpers would be put to use on trial basis in Amlohri and Nigahi OC projects of Northern Coalfields Ltd which operates out of Madhya Pradesh and partly Uttar Pradesh,” the release said.

Mines ministry writes to states for annualisation of auction dues The Centre has recommended to states that upfront payment and stamp duty for auctioned mines be annualised in view of the coronavirus pandemic.

In its April 22 letter addressed to the environment ministry secretary and all state chief secretaries, the mines ministry has also sought annualisation – or payment over the year instead of a single installment – of the net present value (NPV) for diversion of forests. ET has reviewed a copy of the letter.

Quoting the finance ministry’s February 19, 2020 order, which specifically included Covid-19 as force majeure, and the March 25, 2020 recommendations of the home ministry bringing mining under the Essential Services Maintenance Act, 1985, the Centre has asked state governments to take “urgent action” in this regard.

Covid-19 impact: Demand, pricing pressures to weigh on Coal India After hitting all-time lows last month, shares of Coal India (CIL) have recovered by about 10 per cent. While a part of these gains were led by stock valuations hitting a trough, some relief for CIL was also expected with the resumption of business and industrial activity, leading to some CCAI Monthly Newsletter April 2020

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uptick in coal demand from thermal power generators and other end-user industries.

However, the benefits are likely to be limited, and the persisting challenges will likely limit significant upside. This is also a reason why the 10 per cent gain in CIL’s share price since March lows is lower than the 23 per cent rise in Sensex during this period.

The coronavirus disease (Covid-19)-induced lockdown started at a time when power demand was already soft — it was up just 1.5 per cent during the first 11 months of 2019-20 (FY20).

Further, given the ‘must-run’ status for renewable power, the brunt of demand decline was being borne by coal-based plants. Analysts say generation from thermal plants fell 40 per cent year-on-year (YoY) between March 25 and March 30.

In fact, the demand-supply mismatch has already led to CIL’s inventory swelling to its highest-ever level of 74 million tonnes (mt) at the end of March. Against this backdrop, and with thermal power plants having 43 mt inventory (28 days of consumption), the forward journey is challenging.

Analysts estimate per tonne e-auction realisations to average at Rs 2,000 in 2020-21 (FY21), compared to about Rs 2,200 in FY20 and Rs 2,632 in 2018-19.

Lockdown: India's avoidable coal imports to be brought down to zero India is planning to bring 'avoidable coal imports' to zero by 2023-24 amid abundance of fuel stock due to subdued demand by the power sector in the wake of the coronavirus-driven lockdown, according to a source.

This comes at a time when the country's coal imports increased marginally by 3.2 per cent to 242.97 million tonnes (MT) in the just-concluded financial year 2019-20. Of the total, 110 MT of

18 | CCAI Monthly Newsletter April 2020

fuel was unavoidable import, while the remaining nearly 130 MT is avoidable import, the source said.

The government is planning to reduce "this avoidable coal import by 25-30 per cent in the ongoing fiscal', the source said. This unavoidable coal import consisted of coking coal and coal with low-ash content. Coal Minister Pralhad Joshi recently wrote to chief ministers of all states asking them to not import dry fuel and take domestic supply of fuel from state-owned CIL, which has the fossil fuel in abundance.

To give a boost to coal demand hit by the ongoing lockdown, the government has also announced a slew of measures like increased dry fuel supply for linkage consumers. The ministry also approved relaxation in quantity of coal for linkage consumers.

Coal India hikes fuel supply commitment level to power utilities to 80% For the ongoing fiscal year, Coal India Limited (CIL) has increased the minimum assured commitment level of coal supply – called the trigger level – to 80 per cent from the existing 75 per cent of Annual Contracted Quantity (ACQ) to power sector consumers covered under Fuel Supply Agreements (FSA).

“Raising the trigger level to 80 per cent is targeted towards power generating companies requiring more coal. The aim is to encourage power plants to opt for domestic supply of coal and steer them away from imports to the extent possible”, the official added.

CIL's FSAs with power utilities stand at around 560 million tonne (mt). Of this, 270 mt of FSAs belong to power plants commissioned prior to New Coal Distribution Policy (NCDP) regime, whose trigger level was 90 per cent of the ACQ. And for those FSAs amounting to 290 mt commissioned post NCDP the trigger level was 75

per cent of the ACQ which has now been increased to 80 per cent.

According to a CIL official, if all eligible power utilities agree for increase to 80 per cent trigger level, then FSAs for the ongoing fiscal year could see a spike of over 14 mt.

Coal stock is currently at an all-time high of 75 mt at pitheads, increased production planned for 2020- 21, to assure more domestic coal to the power plants operating on higher level of plant load factor and to offer relief to the power sector during the Corona pandemic, prompted CIL to increase the trigger level..

RAILWAYS

Covid-19 impact: 36 percent drop in Railways cargo in early April The national lockdown prompted by Covid-19, which ate away part of the Indian Railways’ business in March, has shown its full blown impact in April.

In the first 10 days of April this year, when the otherwise busy tracks of Indian Railways were free to move only goods, Railways registered a 36 per cent drop in year-on-year cargo loading, which is an indication of the impact that the national lockdown is having on goods moved by Indian Railways, as per provisional estimates of the Railways.

The total goods earnings of Indian Railways, at ₹1,865 crore, were down 41 per cent, against the same time last year on account of the unprecedented pandemic.

During the first 10 days, the zone that saw the sharpest growth as compared to the same time last year was the Northern Zone - from which food grains were lifted for public distribution system - and the North Eastern zone. All other

zones loaded lesser cargo against last year.

Indian Railways hauled 14 per cent lesser cargo in March against the same time last year, according to Indian Railways’ data. The Railways has registered an almost 19 per cent dip in one of its productivity parameter NTKM (net tonne kilometre) in March this year. NTKM measures both the loading and distance over which cargo is moved.

CE ME NT

Coronavirus impact: Cement sector to see double digit dip in volumes The cement sector is projected to witness a double digit decline in volumes in FY21 after the outbreak and the rapid spread of Covid-19 pandemic.

Industrial and manufacturing lockdowns imposed to contain the spread of the lethal virus have led to shrinkage in household income and sluggish business conditions, apart from posing risk of a cut in government spending on infrastructure since the fiscal deficit is widening.

Earlier, ratings agency CRISIL had forecast cement demand to tumble by 10-15 per cent in this fiscal owing to the extension of the lockdown and social distancing measures till April end, indicating a washout in Q1FY21. Demand for the cement sector is likely to gain some steam in Q2, or the July-September period.

Contracting demand from consuming industries is poised to pull down the cement sector’s capacity utilisation level to 56-58 per cent, magnifying pain for the cement companies from the weakness seen in last fiscal. However, despite muted demand, the cement sector was able to record a firm price hike of Rs 25 per bag in FY20, partly aided by the continued consolidation in regional markets by the largest player.

CCAI Monthly Newsletter April 2020

| 19

STEEL

India’s crude steel output declines 14 pc to 8.65 MT in March: World Steel Association IThe country’s crude steel output decline 14 per cent to 8.65 million tonne (MT) during March, according to a report by the World Steel Association. India has been observing a nationwide lockdown since March 25, which has impacted production, demand and supplies of steel in the country.

The country had produced 10.04 MT of crude steel during the same month a year ago, the World Steel Association (world steel) said in its latest report. In March 2020, the global steel output was also down by 6 per cent to 147.05 MT as compared with 156.51 MT in March 2019.

“India estimates 8.65 MT of crude steel production in March 2020, down 13.9 per cent from 10.042 MT in March 2019,” WSA said. In March, the United States produced 7.22 MT of crude steel, registering a fall of of 6 per cent as compared with 6.68 MT in year-ago month.

Japan estimates 8.20 MT of crude steel production in March 2020, down 9.7 per cent from 9.08 MT in March 2019. Global steel giant China also, for the first time in many months, has reported a fall in its output. The country which has a sizeable share in global output, has produced 78.97 MT steel in March- down 1.7 percent compared to 80.34 MT in the corresponding month of 2019.

Coronavirus lockdown: SAIL rings alarm bells over financial position With inventory levels at a record high and borrowings having crossed Rs 52,000 crore, public sector steel major Steel Authority of India (SAIL) is looking at renegotiating contracts and purchase orders to tide over the Covid-19 crisis.

In a letter to plant and unit heads, SAIL said the

20 | CCAI Monthly Newsletter April 2020

slowdown has affected offtake since the beginning of March.

Cash collections have fallen to record lows, without any let-up in the expenditures, the letter said. “The result is that the borrowing has crossed Rs 52,000 crore (as of date) and is likely to go up further. This is an unsustainable situation. Among the many threats that it poses, stoppage of operations, ratings downgrade and debt trap are the most imminent,” it added.

SAIL’s saleable inventory level has crossed 2 million tonnes (mt) and another 0.8 mt is in process. However, company executives said this was a temporary situation and once the commodity starts selling as customers resume operations, SAIL would be able to tide over this.

SAIL is now planning to undertake urgent measures to conserve cash. All purchase orders and contracts are to be reviewed and wherever possible, the delivery period is to be deferred. It is also being advised that high-value purchase orders and contracts are to be re-negotiated.

Where sufficient rebates are not forthcoming, the purchase orders and contracts may be considered for closure and fresh tender floated to capture the benefit of reduced prices in the market.

Stainless steel sector's growth in production to fall during 2020 India’s stainless steel industry has clocked a domestic melt production of 3.92 million tonnes with growth falling to 5% in 2019 as compared to 7-8% achieved in the previous years. It is estimated to further come down in 2020 due to the nationwide lockdown, said the Indian stainless steel development association (ISSDA) in a statement.

“This slowdown in production, despite adequate capacity, can be attributed to a surge of almost 50% in imports of stainless steel flat products last year,” said ISSDA’s president, K K Pahuja.

The global stainless steel melt production in the current year 2019 was recorded at 52.5 MT, registering an increase of 2.9% year-on-year as per latest data released by Indian stainless steel forum. For CY2019, China’s production figure accounted for more than 50% of the global stainless steel production and stood at 29.4 MT.

With Best Compliments From:

Sharda Ma

( )

COAL MERCHANTS, IMPORTERS & HANDLING AGENTS INDIA SOUTH AFRICA INDONESIA SINGAPORE HONG KONG NIGERIA

UGF 1& 2, Kanchenjunga Building, 18 Barakhamba Road, New Delhi-110001, India P : +91 11 23354046/47 F : +91-11-23354047 E : corporate@shardamaa.com W : www.shardamaa.com

GLOBAL SA mining firms work together against covid-19 as mines reopen South African mining companies are setting up shared quarantine facilities for miners testing positive for COVID-19 and are discussing other ways to cooperate, as the vital national industry gradually restarts operations halted since late March.

President Cyril Ramaphosa agreed last week to partially ease a national lockdown that temporarily shut all mines, except for some production of coal, the main fuel used for power generation in Africa’s most industrialised nation.

All mines can resume activities from May 1 under regulations to ease the lockdown, gradually resuming work in an industry that accounts for 8% of South Africa’s economic output and employs about 500,000 people.

22 | CCAI Monthly Newsletter April 2020

The new rules allow coal mines and open cast mines, also known as open pit mines, to resume full operations, while underground mines can only operate at 50% capacity to make it easier to maintain social distancing, the Minerals Council said.

Eskom issues coal suppliers with force majeure warning Eskom sent a letter to its suppliers on 17 April to inform them that it will not necessarily be taking the full contractually agreed coal volumes.

This will apply from 16 April until one month after the national lockdown has been completely lifted.

Electricity demand has dropped by 7,5009,000MW since the government implemented an economy wide lockdown on 27 March to contain the spread of the Covid-19 virus. Exxaro and Wescoal have notified their shareholders of Eskom's warning. As the utility did not indicate

the extent of the reduced offtake, the potential impact is not yet quantifiable.

A decision by Eskom to lower its offtake would affect Exxaro's supply of 22mn t/yr coal to the Medupi and Matimba power plants from its Grootegeluk mine. Based on counsel from its legal advisers, Exxaro said the event that triggered Eskom's warning does not constitute force majeure as stipulated in the coal supply agreements.

Exxaro also said Eskom's move is not in the spirit of President Cyril Ramaphosa's call on businesses to continue paying contractors. "Exxaro will engage with Eskom to discuss this matter and seek a mutually acceptable resolution," it said.

sis suggests a weak federal policy framework would lead to wholesale prices rising for a period after 2030. RepuTex’s latest outlook for the national energy market finds investment driven by state policies, including renewable energy targets in Victoria and Queensland, will help keep wholesale electricity prices down throughout the 2020s.

But it says wholesale prices would rise again in the 2030s without federal policy to encourage investment in new clean energy generation before ageing coal-fired power stations close.

Under current policies, Australia would reach 50% renewable energy by 2030 and 75% by 2040, despite the absence of a federal policy framework beyond the underwriting of new generation investment scheme.

S. Africa coal export supply sufAustralian term coking coal deficient despite lockdown liveries deferred

South Africa has extended its 21-day lockdown by two weeks – until 30 April – raising concerns about the survival of smaller coal-mining firms, yet participants said on Tuesday export supply levels remain sufficient amid weak demand.

Most major miners have obtained government permission to continue exporting, albeit at reduced volumes, and those supplying stateowned energy firm Eskom are permitted to maintain production.

As such, a dry bulk strategist with a European trading firm said while the lockdown might impact smaller mining operations, there was no shortage of availability for export.

Australia could get 90% of electricity from Renewables by 2040 with no price increase Australia could get 90% of its electricity from renewable energy by 2040 without an increase in power prices, according to an analysis by the energy and carbon consultancy RepuTex. Under current government policies, the country is on track to have 75% of its electricity generated by renewables within 20 years, but the analy-

Stanmore said it will now make no sales in June, after around 250,000t of contracted sales were deferred until later in the year. The firm is still likely to ship around 250,000t in April-June, despite the deferral, after it maintained its production guidance of 2.35mn t for the year to 30 June. But it has cut its guidance for earnings before tax and interest to A$80mn-85mn ($52mn55mn) from A$92mn-100mn to reflect the absence of June sales.

The deferrals come as spot coking coal prices have been hit weak demand from steelmakers because of lockdowns imposed to combat the coronavirus pandemic. Other buyers are likely to look to defer shipments or buy at the bottom of their contracted volume range, potentially pushing more coking coal supplies on to the spot market.

Argus last assessed the premium hard low-vol coking coal price at $117.50/t fob Australia on 24 April, down by 24pc from $154.15/t a month earlier. Argus assessed the semi-soft mid-vol coking coal price at $80/t fob Australia and PCI low-vol price at $78.30/t, down from $104.60/t and $98.30/t, respectively, in the same comparison.

CCAI Monthly Newsletter April 2020

| 23

Pandemic Shutdown is speeding up the collapse of Coal in US Since the coronavirus hit the U.S., coal mines across

the country have begun shutting down, laying off workers and slowing production. Bankruptcies loom everywhere in the industry.

Coal has been struggling for many years. Now there's a drop in demand because of the economic shutdown (as well as warmer weather), but coal is being pummeled more than other sources of energy. Preston says that right now, coal is more expensive than natural gas, wind or solar in many parts of the country. So when demand slows, coal plants are the first to shut down.

In fact, over three days earlier this month, wind and solar actually produced more electricity than coal in the U.S., the first time that has happened, according to a new research note from the Rhodium Group. Rhodium found that coal accounted for just 16.4% of the U.S. electric power from mid-March to mid April, compared with 22.5% for a similar period last year.

Andrew Blumenfeld, an IHS Markit research analyst, says coal stockpiles at power plants were "basically double what it should be at this time of year." He also suspects excess inventory is forcing some mining companies to shut down.

We're seeing coal production numbers and power generation numbers from coal going back to roughly late 1960s, mid-1970s levels," he says..

Virus to tighten US petroleum coke supply The coronavirus pandemic may reduce US Gulf petroleum coke supply as refiners cut production on dwindling refined products demand.

A number of US Gulf refiners have recently cut runs by an estimated 20pc because of poor margins and lack of storage capacity. US gasoline and jet margins went negative earlier this week as international and local travel restrictions reduced demand.

24 | CCAI Monthly Newsletter April 2020

The Colonial Pipeline, which supplies gasoline, diesel and jet fuel from the US Gulf up to New York Harbor, also announced yesterday that it would cut capacity by 20pc because of the pandemic's effect on demand.

Argus' US Gulf coker yield, a metric that shows the profitability of running a coker based on feedstock and refined products prices, has collapsed in recent weeks. It fell to $202/t as of 13 March, down from $263/t on 6 March and $309/t on 21 February. The drop in profitability suggests refiners will lower coker operations and decrease coke production.

China's benchmark power coal price remains flat China's benchmark power coal price remained flat during the past week.

The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of coal prices in north China's major ports, stood at 530 yuan (about 74.84 U.S. dollars) per tonne last week, according to the Qinhuangdao Ocean Shipping Coal Trading Market Co. Ltd. Analysts said that high inventories at ports and power plants during the offseason have led to further declines in spot coal prices while the improved daily consumption of coastal power plants and the grim situation of coal imports made the index stop falling.

In addition to stimulating coal demand, appropriate adjustment to the production capacity of coal mines and coal imports are key to fundamentally balance supply and demand thus stabilize coal prices, according to analysts.

China relaxes restrictions on coal power expansion for third year running China has lowered the risk ratings for coal-power overcapacity in many parts of the country for the third year in a row. The move opens the door for more regions to build coal power in 2021-23 and has been interpreted by experts as a signal that coal will be a key part of the 14th Five Year

Plan, which will start next year.

Every year the National Energy Administration (NEA) releases a “risk alert for coal power capacity planning and construction”, which looks ahead three years.

Coal-fired power generation slumped to an average of just 6.9GW across Germany, Spain, the UK and France in the first quarter, down by 5.6GW or approximately 6.3mn t of NAR 5,800 kcal/kg-equivalent coal burn in 40pc efficient plants on the year.

The 2023 Risk Alert, published on 26 February, gave a red rating for capacity adequacy – meaning there’s a high risk of coal power overcapacity – to just three regions. Orange ratings increased from two to three, and all other regions were rated green.

Weak EU coal demand weighed heavily on imports from Russia in February and could force exporters to push more forcefully into new markets this summer if demand continues to sag.

The alert’s resource constraint assessment, which tracks coal and water availability, remained unchanged from last year, with the same 12 regions rated as red. As for profitability, ten regions were rated red – meaning operations are likely to be unprofitable – and the number of orange regions dropped from two to one.

Russia eyes big plans for coal production and exports

Over the past three years, the risk alerts have seen the number of regions with red or orange warnings for capacity adequacy and resource constraint fall from 26 to 17 to 13 for the years 2021, 2022 and 2023.

EU coal demand to fall as imports reach 30-year low Net thermal coal imports among EU members from countries outside of the bloc fell by 5.3mn t or 59pc on the year to a mere 3.7mn t in February, according to Eurostat data released this week.

The latest data covers the current EU-27 membership and excludes the UK, following its exit from the bloc at the end of January. UK customs data show that the country imported a net total of around 60,000t in February.

The steep drop in imports at the start of 2020 is the result of months of almost uninterrupted price weakness in Europe and record low coal burn, and does not reflect any impact from recent measures to stop the spread of Covid-19 in Europe, which now presents an additional headwind to coal demand this summer.

Russia plans to increase its domestic coal production up to 448-530 million tonnes annually until 2024 and up to 485-668 million tonnes annually until 2035, according to the recently presented draft of state strategy for Energy Development of Russia until 2035.

The new strategy was designed by the Russian Ministry of Energy. In addition to a significant increase of domestic production within the next 15 years, plans call for a doubling of exports during this time.

Russia has seen success in its coal sector in recent years. For example, in 2019 coal production in the country was expected to exceed 440 million tonnes which would be the highest figure for the country in the last 11 years. This, however, is just the beginning. In accordance with the new strategy, domestic coal consumption in Russia will increase by over 12% by 2035 compared to the current figures (up to 196 million tonnes) while the share of Russian coal in the global export market grows from the current 11% to 25%.

The major markets for Russian coal will continue to be the Asia-Pacific states, Southeast Asia, the Middle East and Africa. The Russian government, together with leading domestic coal producers, places big hopes on these markets, despite the recently announced plans of some major global coal consumers and producers to reduce their share in the coal sector in their overall energy structure within the next decade.

CCAI Monthly Newsletter April 2020

| 25

IN PARLIAMENT GOVT. OF INDIA MINISTRY OF COAL LOK SABHA

Q. No. 566. PENDING COAL MINING PROJECTS 05.02.2020

b) the details of the amount of coal production in different mines in Jharkhand in the past five years, district-wise;

Will the Minister of COAL be pleased to state:

c) and the details of the amount of metallurgical coal used for steel production produced in different mines in Jharkhand in the past three years?

a) whether there are coal mining projects pending for approval for production in Jharkhand and if so, the details thereof;

MINISTER OF PARLIAMENTARY AFFAIRS, COAL AND MINES (SHRI PRALHAD JOSHI)

SHRI JAYANT SINHA:

26 | CCAI Monthly Newsletter April 2020

ANSWER

a) : The coal mining projects pending for approval for production in Jharkhand, are as under: S. No.

Name of the Mine

Allocate

Operational Status

Annual Capacity (million tonne)

1

Badam

NTPC Ltd

Non-operational

3

2

Banhardih

Patratu Vidyut Utpadan Nigam Ltd

Non-operational

11

3&4

Brinda and Sasai

Tata Steel Long Products Ltd.

Non-operational

0.68

5

Dumri

Hindalco Industries Ltd

Non-operational

1

6

Jitpur

Adani Power Mudra Limited

Non-operational

2.5

7

Lohari

Araanya MinesS Pvt.Ltd.

Non-operational

0.2

8

Meral

Trimula Industries Limited

Non-operational

0.44

9

Moitra

JSW Steel Ltd

Non-operational

1

10

Pachhwara Central

Punjab State Power Corp Ltd

Non-operational

7

11

Rajbar D & E

Tenughat Vidyut Nigam Ltd

Non-operational

10

12

Saharpur Jamarpani

15

13

Patal East

Uttar Pradesh Rajya Vidyut Utpadan Non-operational Nigam Ltd Jharkhand State Mineral Non-operational Devlopment Corporation Ltd

14

Tubed

Damodar Valley Corporation Ltd

Non-operational

6

15 &16

Kotre Basantpur & Pachmo Amarkonda Murga Dangal Brahmini & Chichro Parsimal

CCL

Non-operational

5

ECL

Non-operational

30

ECL

Non-operational

45

17 18 &19

1.6

b) : District-wise raw coal production in different mines of Coal India Limited in Jharkhand in the past five years is given below: (Figures in Million Tonne) District

2018-19

2017-18

2016-17

2015-16

2014-15

Godda

17.00

14.86

14.43

15.55

15.91

Deoghar

2.03

1.56

1.18

1.64

1.74

Dhanbad

31.58

32.78

36.18

35.13

35.09

Ramgarh

11.58

10.71

8.21

8.18

7.80

Hazaribagh

1.75

2.14

4.82

3.85

3.68

Bokaro

15.33

13.22

15.83

16.14

16.57

Giridih

0.38

0.70

0.37

0.56

0.85

Ranchi

4.09

4.46

4.66

4.62

4.05

Chatra/ Latehar

35.60

32.17

33.21

28.00

22.83

Total

119.34

112.59

118.88

113.68

108.52

CCAI Monthly Newsletter April 2020

| 27

Further, in respect of coal mines owned by companies other than CIL, mine-wise district-wise raw coal production for last 5 years is as mentioned below: (Figures in Million Tonne) Company Blocks/Mines

District

2014-15

2015-16

2016-17

2017-18

2018-19

DVC

Bermo

Bokaro

0.066

0.403

0.152

0.047

IISCO

Chasnala

Dhanbad

0.420

0.497

0.481

0.323

0.354

IISCO

Jitpur

Dhanbad

0.075

0.085

0.093

0.092

SAIL

Tasra

Dhanbad

0.025

JSMDCL

Shikni OC

Latehar

0.415

WBPDCL

Panchwara North

Pakud

4.000

PSEBPANEM

Pachwara Central

Pakud

3.433

TSL

Jharia Division

Dhanbad

1.397

1.459

1.310

1.178

1.243

TSL

West Bokaro

Hazaribagh

4.646

4.769

5.006

5.046

5.303

NTPC

Pakri Barwadih

Hazaribagh

0.228

2.679

6.810

HIL

Kathautia

Daltonganj

0.800

0.798

ESCL

Parbatpur Central

Bokaro

0.433

UML

Kathautia

Daltonganj

0.790

0.185 0.190

0.297

0.351

0.228

C): The total coking (metallurgical) coal dispatched to steel sector for use from the state of Jharkhand in the last three years is as under: (Fig in Million Tonne) Year

Coking Coal Despatch for Steel production during past three years

20 16- 17

9.853

2017-18

10.498

2018-19 (Provisional)

16.553

28 | CCAI Monthly Newsletter April 2020

RAJYA SABHA

Q. No. 12. MASTER PLAN FOR REHABILITATION OF PEOPLE AT JHARIA COAL AREA, JHAR KHAND 03.02.2020 SHRI MAHESH PODDAR:

Will the MINISTER OF COAL be pleased to state: (a) whether it is a fact that Government has approved a master plan to be implemented within ten years for the rehabilitation of the people affected by the underground fire and land subsidence in the Jharia coal area of Jharkhand; (b) if so, the amount earmarked under various heads for the said master plan and the amount released against it; and (c) the details of the projects being implemented under the master plan and the status thereof, till date?

ANSWER MINISTER OF PARLIAMENTRY AFFAIRS, COAL AND MINES (SHRI PRALHAD JOSHI) (a) to (c) : A statement is laid on the Table of the House.

Statement referred to in reply to parts (a) to (c) in respect of Rajya Sabha Starred Question No. 12 for reply on 3rd February 2020 asked

by Shri Mahesh Poddar regarding Master Plan for Rehabilitation of people at Jharia coal area, Jharkhand.

Reply (a): Yes Sir. Government has approved a Master Plan to be implemented within ten (10) years + 2 years for Pre-implementation activities for the rehabilitation of the people affected by the underground fire and land subsidence in (a) to (c) : A statement is laid on the Table of the House.

12th position Statement referred to in reply to parts (a) to (c) in respect of Rajya Sabha Starred Question No. 12 for reply on 3rd February 2020 asked

by Shri Mahesh Poddar regarding Master Plan for Rehabilitation of people at Jharia coal area, Jharkhand.

Reply (a): Yes Sir. Government has approved a Master Plan to be implemented within ten (10) years + 2 years for Pre-implementation activities for the rehabilitation of the people affected by the underground fire and land subsidence in the Jharia Coal area of Jharkhand.

Reply (b): The amount earmarked in various heads for the said master plan and the amount released is given below :CCAI Monthly Newsletter April 2020

| 29

In Rs. Crore) Sl. No. Head/Activity

Amount Provisioned

Amount Released

1

Fire Mitigation

2311.50

0.37

2

Rehabilitation and resettlement

4780.60

1476.22

3

Surveying & Planning for diversion of railway / major roads/ utility from unstable sites

20

20

Reply (c): Details of the projects identified and status thereof under Master Plan are as under:(I) Dealing with fires: Surface fire area extent in 1996 was 8.9 sq km (World Bank study). Bharat Coking Coal Limited (BCCL) had prepared 45 fire schemes for dousing off the fire. Out of these, active fire at 17 schemes has been doused off.

In the remaining locations, the fire dealing is affected by non-shifting of Dhanbad-Chandrapura Railway line and also due to non-shifting of LTH (Legal Title Holder) and non-LTH families.

(II) Rehabilitation & Resettlement of persons from the affected areas: As per Master Plan approved in 2009, 54159 families were to be rehabilitated from 595 locations. In recent de-

30 | CCAI Monthly Newsletter April 2020

mographic survey, Jharia Rehabilitation and Development Authority (JRDA), a State Govt. authority of Jharkhand has identified 104946 families (32064 LTH and 72882 non-LTH) to be rehabilitated. JRDA has started construction of 18352 houses out of which 6352 houses were constructed and 2152 non-BCCL families have been shifted so far.

(III) Survey for diversion of surface infrastructure: JRDA awarded work to M/s RITES for preparation of Detailed Project Report (DPR) for diversion of Rail, Road, Transmission lines & Water supply lines from the earmarked fire & subsidence prone unstable areas. The DPR has been submitted to Railways.

OVERALL DOMESTIC COAL SCENARIO Coal Production (in MT) % Growth

April – March 2020

April - March, 2019

% Growth

79.19

6.5%

602.13

606.89

-0.8%

6.47

-8.5%

64.02

64.41

-0.6%

March, 2019

% Growth

April – March 2020

April - March,2019

% Growth

Company

March, 2020

March, 2019

CIL

84.35

SCCL

5.92

Overall Offtake (in MT) Company

March, 2020

CIL

53.38

59.6

-10.4%

581.66

608.14

-4.4%

SCCL

5.03

6.38

-21.2%

62.50

67.66

-7.6%

April – January, 2020

April – January, 2019

% Growth

Coal Despatch to Power (Coal and Coal Products) (in MT) Company

January, 2020

January, 2019

% Growth

CIL

42.30

45.84

-7.7

463.0

491.5

-5.8%

SCCL

4.35

5.35

-18.7%

52.95

55.38

-4.4%

Spot E-auction of Coal (in MT) Company

Coal Qty. Allocated January, 2020

Coal Qty. Allocated January, 2019

Increase over notified price

Coal Qty. Allocated April - January, 2020

Coal Qty. Allocated April - January, 2019

Increase over notified price

CIL

2.53

4.18

36%

29.83

34.34

63%

Special Forward E-auction for Power (in MT) Company

Coal Qty. Allocated January, 2020

Coal Qty. Allocated January, 2019

Increase over notified price

Coal Qty. Allocated April - January, 2020

Coal Qty. Allocated April - January, 2019

Increase over notified price

CIL

0.89

4.52

9%

27.12

30.53

29%

Exclusive E-auction for Non- Power (in MT) Company

Coal Qty. Allocated January, 2020

Coal Qty. Allocated January, 2019

Increase over notified price

Coal Qty. Allocated April January,2020

Coal Qty. Allocated April - January, 2019

Increase over notified price

CIL

0.00

1.93

-

8.03

11.36

33%

Company

Coal Qty. Allocated January, 2020

Coal Qty. Allocated January, 2019

Increase Over notified price

Coal Qty. Allocated April - January, 2020

Coal Qty. Allocated April - January, 2019

Increase Over notified price

CIL

0.08

0.00

30%

1.04

3.58

31%

Special Spot E-auction (in MT)

32 | CCAI Monthly Newsletter April 2020

CCAI Monthly Newsletter April 2020

| 33

60.18

77.11

78.56

52.55

14

13

Mar- 2020

1,330,000.00

6,218.00

ACTUAL*

NUCLEAR

Source CEA

44,720.00

136,932.00

PROGRAM

283,922.29

THERMAL

Category

TOTAL

0.00

HYDRO

BHUTAN IMP

6,780.00

45,699.22

NUCLEAR

2

1,142,130.00

1

231,443.07

Target Apr 2019 to Mar 2020

Monitored Capacity (MW)

THERMAL

Category

SUMMARY- ALL INDIA

97,698.77

102.01

9,100.19

3,962.99

84,533.58

4

ACTUAL*

66.53

62.89

15

ACTUAL SAME MONTH 2018-19

5

107,135.57

53.10

8,687.37

3,355.95

95,039.15

86.86

47.23

105.64

93.60

85.03

74.28

59.48

16

77.88

56.08

17

PROGRAM ACTUAL*

6

% OF PROGRAM (4/3)

63.67

60.30

18

ACTUAL SAME PERIOD 2018-19

APRIL 2019 - Mar 2020

PLANT LOAD FACTOR (%)

112,480.00

216.00

8,614.00

4,234.00

99,416.00

3

PROGRAM

ACTUAL SAME MONTH 2018-19

MAR-2020

AN OVERVIEW

91.19

192.11

104.75

118.09

88.95

7

% OF LAST YEAR (4/5)

1,330,000.00

6,218.00

136,932.00

44,720.00

1,142,130.00

8

PROGRAM

GENERATION (GWH)

1,252,610.90

5,814.00

155,970.03

46,381.11

1,044,445.76

9

ACTUAL*

1,249,336.70

4,406.62

134,893.61

37,812.59

1,072,223.88

10

ACTUAL SAME PERIOD 2018-19

PERIOD : MARCH, 2020

94.18

93.50

113.90

103.71

91.45

11

100.26

131.94

115.62

122.66

97.41

12

% OF LAST % OF PROGRAM YEAR (9/10) (9/8)

APRIL 2019 -Mar 2020

ENERGY GENERATION REPORT

MONTHLY SUMMARY OF DOMESTIC COAL Comparative Price of Domestic Coal: Power/Non-power. *The price shown in the Chart below is without: (a) Surface Transportation Charges. (b) State specific taxes. (c) Coal company or area wise charges if any. (d) Evacuation Facility Charges INR 50 per tonne w.e.f. 00:00 of 20.12.2017 GCV (Kcal/kg) (Mid-value)

G3-6400-6700

G5-5800-6100

G7-5200-5500

G10-4300-4600

G11-4000-4300

G12-3700-4000

Basic ROM price (Rs./te)

3144/ 3144

2737/2737

1926/2311

1024/1228

955/1145

886/1063

Tentative Ex-Mine Price*

4447/4447

3941/3941

2932/3411

1809/2063

1724/1959

1638/1858

COAL Coal India has decided to ease payment terms for its customers, particularly for those in the stressed power sector, and be lenient in dealing with defaults. It will also accept ‘Usance’ letters of credit, which will allow consumers in the power sector to get deferred payment option for coal value by paying service charge to its banker. Coal India plans to auction 60% of its inventory by May to liquidate stocks that touched a record 75 million tonnes in March.

The company has decided to reduce floor price for bidding, from 20%-30% above notified price, to the notified prices and bulk of the offer would be for auctions allowing consumers to lift booked quantities over several months. Coal India Limited (CIL) will produce 710 million tonnes (MT) of coal in the current financial years and the company’s coal offtake target will be at the same level.Coal Minister Pralhad Joshi set these targets for the staterun company while reviewing its performance through video conference, an official statement said.

34 | CCAI Monthly Newsletter April 2020

RAILWAYS In the first 10 days of April this year, when the otherwise busy tracks of Indian Railways were free to move only goods, Railways registered a 36 percent drop in year-on-year cargo loading, which is an indication of the impact of national lockdown. Coal India Limited (CIL) has asked the government to lower railway freight rates for coastal and southern regions to make its fuel viable and encourage importers to switch to domestic supply. The state-owned miner also sought use of railways instead of waterways to transport coal. Due to high freight rates, coastal plants use a mix of waterways and trucks or import the fuel. The Railways has decided to fine its freight clients for undue delay in loading and unloading their goods as it wants more rakes to be available for moving essential items across the country during the lockdown period. The Railways had earlier waived off the two types of charges for such delays -- Demurrage and Wharfage -- for the duration of the lockdown.

POWER In view of the looming payment crisis, private sector electricity generation companies have approached the Central Electricity Regulatory Commission (CERC) for a 90-day extension for payment of all transmission charges. Forty thermal power units with a capacity of at least 30 gigawatt, mostly from northern India, have stopped lifting coal as demand has fallen sharply during the lockdown. This has led to an increase in stocks at pitheads by nearly 20 million tonnes to about 75 million tonnes. Thermal power plant load factor or capacity utilisation could fall below the ideal 55 percent level in the current fiscal due to the impact of COVID-19, India Ratings and Research (Ind-Ra) said in a report.

CEMENT Cement demand in India is estimated to fall by at least 20-25% If the lockdown due to pandemic Coronavirus extends to May, as per analysts from rating agency Crisil Current demand shock might dent the capacity addition plans of the industry and may stall projects in medium term.

 Cement manufacturers are looking to resume their respective operations in a phased manner starting from April 20, 2020 after Ministry of Home Affairs announced continuation of works in construction projects, within the limits of municipal corporations and municipalities, where workers are available on site and no workers are required to be brought from outside from April 20.

STEEL India’s crude steel production fell 23 percent to 7.38 million tonne (mt) in March as compared to the previous month, while export and import also took a beating due to the Covid-19 pandemic and the subsequent lockdown.

Ministry of steel has extended the deadline for certification of steel products to three months from April 23rd as the Bureau of Indian Standards (BIS) has shut operations and closed laboratories due to the ongoing lockdown and travel ban. Steel Minister Dharmendra Pradhan has asked all the Steel PSUs to deposit unspent CSR funds of the current fiscal and the CSR funds of the next fiscal into the PM CARES Fund. 8 steel PSUs including SAIL, RINL, NMDC, MOIL, MECON, KIOCL, MSTC, and FSNL, will deposit a total of Rs 267.55 crore in the PM CARES fund.

CCAI Monthly Newsletter April 2020

| 35

MONTHLY SUMMARY OF IMPORTED COAL & PETCOKE Coal Price Index COAL

(kcal/kg)

Monthly Price - FOB

Monthly Price - FOB

Monthly Change (USD)

South Africa

6000 NAR

USD 59.02

INR 4490

-7.31

South Africa

5500 NAR

USD 39.02

INR 2968

-12.26

Australia

5500 NAR

USD 50.62

INR 3851

-4.24

Indonesia

5000 GAR

USD 41.49

INR 3156

- 5.81

Indonesia

4200 GAR

USD 27.66

INR2104

-4.78

USA

6900 NAR

USD 50.60

INR 3849

-1.47

PET COKE

Sulphur

Price

India-RIL(Ex-Ref.)

-5%

INR 6870

Saudi Arabia (CIF)

+ 8.5%

INR 4839 ($64)

USA (CIF)

- 6.5%

INR 4991 ($66)

Exchange Rate

Change (Monthly)

USD/INR 76.08

1.55

Coking Coal Price: Premium Low Vol

FOB Aus CFR China 128.60

136.90

HCC 64 MID Vol

Semi Soft

Low Vol PCI

Mid Tier PCI

MET COKE 62% CSR

FOB Aus

CFR China

FOB Aus

FOB Aus

FOB Aus

CFR India

FOB N China

115.73

120.85

67.65

76.65

75.31

260.90

247.00

South African Coal News: *South African coal exports fell by 14pc on the year in March, and the short-term outlook for loadings appears bleak amid severe demandside curbs. The Richards Bay Coal Terminal (RBCT) exported 5.8mn t last month, down by 950,000t on the year and 12pc below the March average in 2015-19. And exports are poised to fall further. * South Africa will allow mines to operate at up to 50% capacity during a nationwide lockdown to curb the spread of the new coronavirus. The amended rules say mines will be allowed to restart and increase capacity

36 | CCAI Monthly Newsletter April 2020

subject to conditions, including the screening of employees for COVID-19 symptoms.

Australian Coal News: * Australian coal quarterly production figures for January-March have been largely unaffected

by Covid-19 to date but the outlook for both thermal and coking coal prices has mining firms worried. * Australian thermal coal production for export accounted for 45% of the total output – reaching 14.5m tonnes in January-March, albeit 3% lower on the year, Glencore said in its interim results.

Indonesian Coal News: * The Indonesian government set its coal benchmark price (HBA) for April at $65.77 per tonne, down from $67.08 per tonne last month, Energy and Mineral Resources Ministry said in a statement. The benchmark price COAL-HBAID dropped from a month earlier due to lower electricity consumption in importing countries. * Indonesian low-cv thermal coal prices fell on lower offers amid scant seaborne procurement, market sources said. The best offer for 55,000 mt for Supramax. April-loading cargoes of the Indonesian 4,200 kcal/kg GAR – or 3,800 kcal/ kg NAR – coal was heard at $30.15/mt FOB Kalimantan, down 35 cents/mt on the day, while the best bid was heard at $30/mt FOB, down according to traders.

*US coal carload originations fell to a 10-year low of 52,468 in the week ended April 11, down 8.8% from 57,504 a week earlier and 36.1% lower than the year-ago week. The latest total was also down 34.8% from the five-year average and was the lowest for the corresponding week in over 10 years.

Pet Coke News: * With India’s lockdown extending over a month coupled with low crude oil prices amid the coronavirus pandemic, petroleum coke market has become sluggish as Indian buying interest remained at low. A Singapore-based trader reported an offer for a Supramax vessel cargo of US 7,500 kcal/kg NAR petcoke with 6.5% sulfur at $65/mt CFR.

Shipping Update: US Coal News: * U.S. coal production will fall even more sharply than expected this year as the coronavirus forces businesses to close down, dragging down demand for electricity. Mines will supply about 537 million tons of coal this year, down 22% from 690 million tons last year, the U.S. Energy Information Administration said.

* This quarter can’t end soon enough for dry bulk, the largest freight market in the world by cargo volume. Rates for Capesizes — bulkers of around 180,000 deadweight tons (DWT) that carry iron ore and coal — have wallowed disastrously in the $2,500-$5,000-per-day range since January. This will be the second-worst quarter ever for Capes after the first quarter of 2016.

CCAI Monthly Newsletter April 2020

| 37

PRODUCTION AND OFFTAKE PERFORMANCE OF CIL AND SUBSIDIARY COAL COMPANIES COAL PRODUCTION (Figs in Mill Te) SUB CO.

APR'20 ACTUAL THIS YEAR

ACTUAL SAME PERIOD LAST YEAR

% GROWTH

ECL

3.39

4.02

-15.7

BCCL

1.70

2.27

-24.9

CCL

2.26

3.19

-29.2

NCL

8.73

8.72

0.03

WCL

3.45

4.22

-18.3

SECL

9.30

11.11

-16.2

MCL

11.53

11.74

-1.8

NEC

0.02

0.03

-33.3

CIL

40.38

45.30

-10.9

OFFTAKE (Figs in Mill Te) APR'20

SUB CO. ACTUAL THIS YEAR

ACTUAL SAME PERIOD LAST YEAR

% GROWTH

ECL

3.69

4.53

-18.6

BCCL

1.03

2.84

-63.6

CCL

2.89

6.42

-55.0

NCL

7.17

8.20

-12.6

WCL

2.82

4.94

-42.9

SECL

9.76

12.88

-24.2

MCL

11.65

12.53

-7.0

NEC

0.05

0.07

-26.1

CIL

39.06

52.41

-25.5

38 | CCAI Monthly Newsletter April 2020

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