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From the Editor’s Desk
An early summer, searing hea twave and post-COVID econom ic recovery have caused India’s energy demand to soar frantically, sparking apprehensions of an unprecedented power sho rtage. Average temperatures in nor thern and central India in April have been the highest in more tha n 120 years pushing the electricity demand to reco rd-levels. As a result, power cuts and outages have rippled across India. The surging power demand has cau sed India’s coal requirement to increase exp onentially as three quarter of the country’s total generation capacity is depend ent on the dry fuel. At presen t, coal stocks are said to be critically low in 108 of its 173 power plants. Meanwhile, India’s industrial sector is suffering from an unprecedented coal crisis as prioritization of sup ply to the Power sector has bro ught the rail-mode supply of coal to Industries to a virtual standstill. A severe coa l shortage has hit the industries, damaging sect ors like cement, aluminium, spo nge iron, fertilizer, paper, chemical, steel & oth ers. Starving for coal, many con sum ers are looking at overseas coal but the War in Ukraine has caused global prices of coal and natural gas to jump, making imports unaffordable for ma ny. Barring a few, most of the industries can con sume around 15-20% of the ir requirement from imported coal for blending pur poses so supply of indigenous coal is a must. For minimizing damage, the Union Government is taking several measures and is confident about tiding ove r the crisis. In a silver-lining, National Miner Coal India Limited has increased its production volume sharply by 12% in April on a y-o-y basis and has also despatched 15% more coal ove r the same month last year In a bid to transpo rt more coal to fuel-starved plan ts, Railways have cancelled more than a thousa nd passenger trains. Conside ring the severity of the situation, Singareni Coll ieries Company Ltd (SCCL) has decided to supply over 81% of its targeted pro duction during the current fisca l to thermal power generation plants in Telanga na and other States. Among many measures, the Government has allowed oth er thermal power plants to utilize their coal link ages and transmit power thr oug h tolling to reduce the need to transport coal and have urged the generation com panies (gencos) to use roadways for coal transpo rt along with Rail & RCR mo de supply.
Considering the exigency, ...th e Power Ministry has asked gencos for importing coal for blending in thermal power plants and has directed all imported coalbased power plants to operate and generate power maxim izing the capacity utilization to meet the growin g demand. With such robust initiatives to augment coal supply and mea sures to expedite the country's renewable generation , it is expected that India wou ld be able to cater to its soaring power demand which is pivotal for the countr y’s economic growth.
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CONTENT Vol. LI No. 01 April 2022
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 E-mail : sec.ccai@gmail.com Website : www.ccai.co.in Editor : Subhasri Nandi
06
Consumers' Page
10
Power
18
Domestic
26
Global
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.
33 Coal Production 34 Monthly Summary Of
Imported Coal & Petcoke
37 Overall Domestic Coal Scenario
CCAI Monthly Newsletter April 2022
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CONSUMERS’ PAGE Present Coal Scenario: National Miner Coal India Limited (CIL) has produced 53.47 MT coal in April 22 against a monthly target of 56.70 MT. The production figure has grown exponentially over (27%) compared to 41.89 MT produced in the same month last year. In the first month of the new fiscal, CIL's despatch has been 57.50 MT which is 6% higher than CIL's monthly despatch quantity of 54.24 MT. Among other coal companies, SCCL's production has also grown from 4.86 MT in April '21 to 5.32 MT in April '22 (9.5%). coal production by captive blocks has spiked to 7.79 MT this month compared to 4.87 MT during the same month in last fiscal.
Submissions for both Power and NRS consumers: 1. Submission for release of various forms of long-pending refunds from MCL and SECL:
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Various forms of long-pending refunds from Mahanadi Coalfields Limited (MCL) and South –Eastern Coalfields Limited (SECL)including refund of additional coal value advance, BGs related to financial coverage and performance security, pending credit notes on account of grade slippage, refund of security deposit against expired FSAs etc have been piled up for many months.
In case of strapped BGs consumers are unable to secure required credit limits from their Banks to carry out regular plant operations comfortably.As a result, huge amounts of funds of both Utilities and Industries are stuck with MCL.
4. Submission to SECL regarding continuation with single LC against coal supply through Rail and Road mode:
Request has been made to MCL, SECL and CIL for release of these long pending refunds.
So far, the consumers had to provide a single Letter of Credit (LC) for the entire supply irrespective of the mode of dispatch. However, as per instructions given by SECL, separate LC needs to be issued for separate modes of dispatch (Road or Rail mode).
2. Submission to prioritise loading and supply of rakes to long-distance consumers: As per the Railway circular regarding Preferential Traffic Order GO No. 96 whichcame into force for a year starting from 1st April 2022, the Zonal Railways is obligated to provide specialfacilities or preference to transport coal and coke including all variants (except petcoke) in case of a long distance (more than 600 kms) irrespective of priority and date of registration on all days of the week exceptthe two nominated days. East Central Railway (ECR) is not giving due priority to the long- distance consumers despite representations from the Power companies.
Many consumers have to avail both modes of transport (Road/Rail) for convenience of coal supply at their respective plants. Hence, issuance of separate LC for separate modes would be financially difficult as well as cumbersome for them. Request has been made to SECL to continue with the provision of a single LC for entire supplies irrespective of mode of dispatch (Rail/Road) to the respective companies.
Submissions exclusively for Power Sector Consumers:
Request has been made to ECR and Railway Board to intervene so that preferential loading and dispatch of rakes to the long distance consumers may be prioritized by ECR in accordance with the circular.
.5. Submission for continuing supply of crushed coal of (-) 100 mm size instead of (-) 250 mm to the Power plants via road Mode:
3. Submission for rectifying supply of stones and extraneous materials mixed with coal fromvarious sidings of ECL:
SECL has decided to expedite despatches of crushed coal of (-)100 mm size to the power plants via Rail mode in order to maintain sufficient coal stocks at the plant-ends ahead of the peakdemand season. However, as per SECL Circular No.SECL/BSP/M7S/ PH/RS/64, in all live Road Delivery Orders (RDOs) issued to Power sectorconsumers under their respective FSAs, the size of coal to be supplied has been changed from (-) 100 mm to (-) 250 mm coal 18.04.2022 onwards.
Consumers from both Power and Non-power Sectors have stated that poor-quality coal mixed with large-sized stones and boulders are being supplied from various sidings of ECL including UKA IV (Bankola II) sidings. Supply of large amount of extraneous materials with coal on regular intervals is causing less grade materialization and receipt of lesser quantity in terms of heat value. Request has been made to ECL and CIL to ensure supply of allotted grade of coal free of stones and boulders.
Most of the power plants are designed for pulverized coal therefore, coal crushing infrastructure at the power plants are equipped to handle (-) 100 mm coal. So, supply of bigger sized coal to the Utilities would increase power consumption at grinding mills. This will increase cost of crushing, enhance dust pollution and make downstream in-plant coal handling operations difficult. Request has been made to SECL to ensure supply of
CCAI Monthly Newsletter April 2022
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crushed coal of (-) 100 mm size to the power plants through Road mode as well.
6. Submission by Power sector regarding supply of lower grade coal and high short-receipt from ECL sidings: Certain power Utilities procuring coal from Salanpur and Mugma sidৈings of ECL has complained regarding supply of significantly lower grade coal as compared to the grade mention in the FSA (5-8 grade lower) during March and April’22. Also, there are numerous instances short-receipt in rakes dispatched from those two ECL sidings. Request has been made to ECL to atleast minimise grade slippage the problem of grade slippage in order to eradicate them and also look into the issue of consistent short-receipt so that proper quantity and quality of coal can be supplied to Power consumers as per the billed grades.
Submissions exclusively for NRS Consumers: 7. Prayer by the Industries (including CPPs) for a suitable solution to ease out ongoing scarce supply of coal: In spite of increased industrial activities and consequent upsurge in coal demand in the Industrial sector, despatch of coal to sectors like CPP, Steel, Cement and Sponge in the ongoing fiscal has reduced by more than 32%, 27%, 14% and 20% respectively compared to the previous fiscal. The supply has been further curtailed due to longpending FSA and e-Auction rakes (more than 4000 rakes), longer intervals between auctions conducted for Industries, offer of less quantity under Exclusive and Spot Auctions and supply of linkage coal as per trigger level (75% of MSQ) instead of scheduled quantity. The situation has aggravated to such a level that may compel some of the Industries to cut-down on production or force closure. Such impediments in coal procurement may adversely impact the manufacturing sector.
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Joint submissions have been made by a number of Associations including CCAI to the PMO, Ministry of Coal,Power, DIPP, Steel and Railways to expedite supply of coal to NRS consumers especially via rail mode for the smooth running of plants.
8. Submission by NRS Consumers regarding refund of EMD, Royalty and Ad-valorem taxes against lapsed DO quantities: Industries securing coal under Spot e-Auctions from SECL’s Chhal, Bijari OCP in 2021, could not procure the allotted quantities due to various reasons such as non-availability of designated grade of coal (G-10, G15), frequent breakdown of weighbridges, irregular movements of loading vehicles, poor coal evacuation arrangements etc. As a result, only a small portion of the allotted DO quantities could be lifted by these Industries and the rest quantity got lapsed despite high coal demand. However, the EMD amount submitted by the consumers has not been refunded for many months. For certain NRS consumers, coal value against the lapsed DO quantities has been refunded by SECL but Ad-valorem charges including Royalty, DMF, NMET, AVAP taxes depositedalongwith coal value has not been refunded. Request has been made to SECL and CIl to expedite refund of EMD, Royalties and other Ad-valorem charges against lapsed DOquantities.
9. Submission by Industries to immediately improve supply of rakes from MCL: Despite soaring coal demand in the Industrial Sector, MCL has dispatched 8.4 rakes to the Non-power sector per day on an average in March '22 which was only 9.6% of total rake dispatch by MCL. It is also 10 rakes less than the coal company’s despatch to NRS consumers during the same period last year when the demand was relatively lower. Request has been made to MCL and CIL to supply more number of rakes to the NRS Consumers on a daily basis.
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POWER THERMAL No Need To Panic: India Has Coal Stocks For Over 30 Days, Says Report India has enough coal stocks to meet more than 30 days of demands and there is no need to panic, Government sources said. Sources said 72.5 million tonnes (mt) of coal stocks are lying with Coal India Ltd. On average, power plants in India is having coal stock of 22 mt and on an average daily 2.1 mt coal is replaced with plants. So no shortage of coal will arise in the country. Energy demand rose due to early summer and the recovery in the economy. Coal production has increased 20-22 per cent in the month of April itself. The Ministry of Railways also in-
10 | CCAI Monthly Newsletter April 2022
creased the availability of rakes by 20 per cent. Earlier All India Power Engineers Fedration has said that Thermal Power plants across the country are grappling with coal shortages, indicating a looming power crisis in the country. Shailendra Dubey, Chairman of AIPEF said that as per Central Electricity Authority's latest daily coal report, the coal stock at 81 out of a total of 150 thermal power stations using domestic coal is critical as per guidelines. The condition of the private sector thermal plants is equally bad as the coal stock of 28 out of 54 plants is in a critical stage. Andhra Pradesh, Tamil Nadu, Telangana, Madhya Pradesh, Maharashtra, Gujarat, Jharkhand and Chhattisgarh are the other states facing a coal crisis. The lack of railway rakes is also adding to the crisis. Presently, only 412 rakes are available as against the daily requirement of 453 rakes.
Govt working on electricity mission to cut oil import dependence The government is planning a mission to increase electricity penetration from 17 % to 27% in the next 10 years to reduce oil usage and cut dependence on imported crude. The government is identifying areas with low to medium heating requirements where such a shift is possible. Activities in domestic and commercial consumer sectors such as cooking and transportation, and solarising agricultural pumps are areas where the maximum focus is expected. The electrification mission targets the maximum possible shift to electricity use electrification mission targets the maximum possible shift to electricity use from diesel, petrol and LPG consumption, a senior government official told ET. Increasing renewable energy capacity can ensure decarbonisation of the electricity sector, he added. The target is in the line with the transition goals of some of the developed nations. The EU, for instance, has made a significant transition with 24% electrification of its energy needs and has an ambitious 60% electrification target by 2050.
Demand soaring: ‘Tolling’ on the table as imported coal prices heat up The Centre may soon ask states to use tolling to allow other thermal power plants to utilise their coal linkages and transmit power to reduce the need to transport coal, as per a senior government official. In a repeat of the post-monsoon shortage seen last October, high global prices have led to greater demand of domestic coal for power supply from thermal stations. Rising demand for power due to the onset of the summer season as well
as the post-Covid economic recovery is also putting pressure on thermal plants. This has led to supply concerns. States, including Andhra Pradesh, Madhya Pradesh, Telangana, Punjab and Bihar, have already faced blackouts as a result of the crunch. 72 plants that utilise domestic coal had 22.7 million tonnes of coal, or 37 per cent of normative stock levels, with 72 plants classified as having critical levels of coal inventory. Union Power Secretary Alok Kumar said Power houses can give coal to some other plant through competitive bidding” where power can be generated and transmitted to the state with the original coal linkage. Kumar added there was no shortage of domestic coal but that logistics for coal delivery were designed for “a certain amount of imported coal”.
Coal supply to power plants rises 25% in FY22 Coal supply to electricity generating plants increased by 24.5 per cent to 677.67 million tonnes in FY22 compared to that of the preceding fiscal, the government data said. Despite increased supplies, there were reports of fuel shortage at various thermal power units due to soaring energy demand The data, however, showed that the supply of coal to power utilities stood at 544.07 MT in FY21, which was less than 567.25 MT recorded in FY20. "The power utilities despatch has grown by 19.47 per cent to 677.67 MT during FY22 as compared to 567.25 MT in FY20. Fall in import prices have been observed since the end of October 2021, however, import prices are still at high level to discourage coal import," it said. The coal dispatch to the power sector increased to 65.36 MT last month from 57.97 MT during the same period in FY21. The overall dispatch of coal also rose to 818.14 MT in FY22 from 691.39 MT in FY21.
CCAI Monthly Newsletter April 2022
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Finance Ministry grants additional Rs. 28,204 Cr. for undertaking power sector reforms to 10 States The Department of Expenditure, Ministry of Finance, has granted additional borrowing permission of Rs. 28,204 crore to 10 States for undertaking the stipulated reforms in the power sector in 2021-22. States include Andhra Pradesh, Assam, Himachal Pradesh, Manipur, Meghalaya, Odisha, Rajasthan, Sikkim, Tamil Nadu, and Uttar Pradesh. The highest amount granted is Rs. 7,054 crores to Tamil Nadu. Ministry of Finance, based on the recommendations of the Fifteenth Finance Commission, had decided to grant additional borrowing space of up to 0.5 percent of the Gross State Domestic Product (GSDP) to the States every year for a four year period from 2021-to 22 to 2024-25 based on reforms undertaken by the States in the power sector. This was announced by the Finance Minister in the Budget speech of 2021-22. The objectives of granting financial incentives as additional borrowing permissions for taking up reforms in the power sector are to improve the operational and economic efficiency of the sector and promote a sustained increase in paid electricity consumption.
The power ministry has allowed IPPs to import coal to get over possible coal shortages The power ministry has allowed independent power producers (IPPs) burning imported coal to pass on the higher fuel costs till December with a view to restarting stalled capacity as domestic coal-based generation stations across the country struggle to cope with rising demand because of low fuel inventories, sources said. The decision, taken at a meeting last week to
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take stock of the power situation, is expected to switch on 7,980MW of imported coal-based generation capacity of Tata Power, Adani Power, Essar Power, ILF&S Tamil Nadu, Coastal Energen, Udupi Power and GSECL Sika Ltd. Most of the capacity was shut primarily after consumer states refused to pay for the rise in global coal prices. The imported coal cost will be benchmarked to HBA (Harba Batubara Acuan) Index for Indonesian coal and the states will be free to exit the pass-through arrangement after December 31. The index has shot up more than 30% after the Russia-Ukraine conflict. States that fail to take steps to get the stalled imported coal-based capacity up and running will face reduction in domestic coal supply after two weeks.
IEX's trade volume jumps 38% in fiscal 2021-22 Indian Energy Exchange (IEX) clocked a 38 per cent growth in trade volume at 1,02,035 million units in financial year 2021-22. In the last fiscal, the total market volume stood at 73,941 MUs (Million Units). It achieved a volume of 9,605 MUs in March. The volume comprised 8,702 MUs in the conventional power market, 392 MUs in the green power market and 511 MUs (5.11 lakh certificates) in the REC market, registering 16 per cent Y-o-Y growth across all the segments. The Day-Ahead Market volume at 5,858 MUs recorded a 4.4 per cent month-on-month growth in March. The average market clearing price in March at Rs 8.23 per unit was higher by 85 per cent on a monthly basis and 102 per cent on a YoY basis. The price increase was mainly on account of early onset of the summer season leading to increased demand for power across all the states and low generation from the imported coal and gas-based generators due to record high imported coal and gas prices, the statement said.
.SCCL
Board approves DPR of 800 MW thermal unit in STPP
2022 increased from Rs 1,17,390 crore in March 2022.
The Board of Directors of Singareni Collieries Company Ltd (SCCL) has approved the detailed project report (DPR) of the 800 megawatt super critical thermal power generation unit planned to be established by the company on the premises of 2×600 MW Singareni Thermal Power Plant in Mancherial district.
The PRAAPTI portal was launched in May 2018 to bring in transparency in power purchase transactions between generators and discoms.
Approval for the DPR of 800 MW unit of STPP was given by the 561 st Board of Directors meeting held here. The unit is being planned to be established on the premises of 1,200 MW existing thermal power project at Pegadapalli in Jaipur mandal with estimated cost of 6,790 crore. The board has also also approved the local reservation in the recruitment of SCCL in tune with the Presidential Order being implemented by the State Government to ensure local people get maximum employment. As per the revised reservation to the locals of four erstwhile districts – Adilabad, Khammam, Karimnagar and Warangal – it would go up to 95% for both the officers and workers (others) categories against the existing quota of 60% and 80%, respectively.
Discoms' outstanding dues to gencos rise 17.3 pc to Rs 1,23,244 cr in April Total outstanding dues owed by electricity distribution companies (discoms) to power producers increased by 17.3 per cent year-on-year to Rs 1,23,244 crore in April 2022, as per official data. Discoms owed a total of Rs 1,05,029 crore to power generation firms in April 2021, according to portal PRAAPTI (Payment Ratification And Analysis in Power procurement for bringing Transparency in Invoicing of generators). On a sequential basis too, total dues in April
In April 2022, the total overdue amount, which was not cleared even after 45 days of grace period offered by generators, stood at Rs 1,04,885 crore as against Rs 84,376 crore in the same month a year ago. The overdue amount stood at Rs 1,03,331 crore in March 2022. Power producers give 45 days to discoms to pay bills for electricity supply. After that, outstanding dues become overdue and generators charge penal interest on that in most cases.
NITI Aayog to release State Energy & Climate Index on April 11 The NITI Aayog will release on April 11 a 'State Energy and Climate Index' that will be useful for the states and UTs to plan better policies and efficiently manage their energy resources in view of the changing climate. "The index can be used by the states and UTs to benchmark their performance against their peers, analyze the potential challenges to develop better policy mechanisms, and efficiently manage their energy resources," said a NITI Aayog official. The State Energy and Climate Index (SECI) Round-1 aims to rank states and UTs on six parameters: (1) Discoms' Performance (2) Access, Affordability and Reliability of Energy (3) Clean Energy Initiatives (4) Energy Efficiency (5) Environmental Sustainability; and (6) New Initiatives. These parameters include a total of 27 indicators. Based on the outcome of SECI Round-1 scores, states and union territories have been categorized into three groups: 'Front Runners', 'Achievers', and 'Aspirants'. CCAI Monthly Newsletter April 2022
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The State Energy and Climate Index Round 1 will be released in the presence of secretaries of various government departments and stakeholders from the energy sector that would be invited to the release event here.
Department of Chemical Engineering, IIT Guwahati, said.
EVs present a Rs 3 lakh crore opportunity for India: Crisil
RENEWABLES
Electric vehicles (EVs) present an opportunity of almost Rs 3 lakh crore for various stakeholders in India in the five years through fiscal 2026, Crisil said.
IIT Guwahati, NTPC develop energy-efficient tech for CO2 capture from power plants
The opportunity includes potential revenue of about Rs 1.5 lakh crore across vehicle segments for original equipment manufacturers (OEMs) as well as component manufacturers and Rs 90,000 crore in the form of disbursements for vehicle financiers, with shared mobility and insurance accounting for the balance, a study by the ratings firm showed.
The Indian Institute of Technology Guwahati has partnered with NTPC Limited to design and develop a highly energy-efficient plant to capture carbon di-oxide from power plants. The premier institute claimed it has the potential to combat global climate change and will help natural gas and petroleum refineries among others. According to officials, the technology developed by IIT Guwahati researchers works on flue gas -- a mixture of gases produced by the burning of fuel or other materials in power stations -- using a newly-activated amine solvent (IITGS), consumes up to 11 per cent less energy compared to commercial activated MDEA (monoethanolamine) solvent and up to 31 per cent less energy compared to the benchmark MEA (monoethanolamine) solvent. After successful completion of test studies, the pilot plant has been shifted to NTPC's (National Thermal Power Corporation Limited) NETRA facility. IIT Guwahati team and NTPC Limited are in the process of patenting the technology. This development has the potential impact to combat global climate change. The next phase of the study will involve the testing of pilot-plant using industrial flue gas, Bishnupada Mandal,
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EV adoption continues to surge as more people shift from internal combustion engine (ICE) vehicles. Data on the Vahan portal shows the share of electric three-wheelers (3Ws) increased to almost 5% of 3Ws registered in fiscal 2022 from less than 1% in fiscal 2018. For electric two-wheelers (2Ws) and buses, the percentages rose to almost 2% and 4%, respectively. The shift is not limited to large cities. Smaller towns are also entering the fray, driven by the government’s fiscal and non-fiscal measures. As per Vahan statistics, the contribution of the top 10 districts in nationwide sales of electric cars and 3Ws dropped from 55-60% in fiscal 2021 to 25-30% in fiscal 2022. For 2Ws, the percentage declined from 40-45% to 15-20%.
Prices of EVs to be equal of petrol cars in 2 years, says Nitin Gadkari Prices of all electric vehicles (EVs) will be equal to the cost of petrol vehicles in the country within two years, Road Transport and Highways
Minister Nitin Gadkari said in Lok Sabha. Gadkari also said MPs can buy electric vehicles once a charging station is installed in Parliament premises.
with a solar power plant will mean that the dependency on coal can be reduced and more renewable energy can be supplied to homes and establishments.
"I will assure all the honourable members that within two years the cost of electric twowheelers, electric three-wheelers and electric four-wheelers will be equivalent to the cost of electric two-wheelers, electric three-wheelers and electric four-wheelers will be equivalent to the cost of petrol vehicles and the country will change," he said.
India, as part of Prime Minister Narendra Modi’s commitments at the United Nations Conference of Parties in Glasgow last year, has committed a target of 500 GW (gigawatts) of renewable energy (RE) capacity by 2030. This hinges on solar–BESS.
The minister said there is good development concerning charging stations and the Ministry of Power has issued charging infrastructure for electric vehicles. There are revised consolidated guidelines and standards to accelerate the e-mobility transition in the country, he said.
Centre issues largest tender on battery storage for solar power The Solar Energy Corporation of India Limited (SECI), a public sector body under the Ministry of New & Renewable Energy, has issued the tender for setting up 500 MW/1000–MWh Standalone Battery Energy Storage Systems (BESS). A first– of–its–kind tender in the country, it will provide power distribution companies with storage facilities to be used on an “on–demand” basis. The tender marks the first tranche of the government’s immediate target of setting up 4000 MWh of Battery Storage Capacity to inject more renewable energy in the national grid. The Central Electricity Authority (CEA)/MoP has recommended that a battery energy storage capacity of 27,000 MW/108,000 MWh (4– hour storage) ought to be part of the installed capacity in 2029–30. A BESS system is made up of batteries that can be charged by solar power during the day and then making that power available in the evening or night. As evening power demand is fulfilled by coal plants, having a battery system integrated
Tata Power gains after subsidiary commissions 300 MW solar plant Tata Power Company rose 2.51% to Rs 251.55 after the company announced that its wholly owned subsidiary, Tata Power Renewables Energy (TPREL) has commissioned a 300 megawatt project in Dholera, Gujarat. The project will generate 774 million units (MU) annually along with this it will reduce approximately 704,340 metric ton per year of carbon emission. Speaking about the commissioning of the project, Dr. Praveer Sinha, CEO & MD of Tata Power said, Commissioning of India's largest single-axis solar tracker system of 300 MW Solar plant at Dholera in Gujarat within the set timelines is a proud moment for Tata Power. With this addition, the renewables capacity in operation for Tata Power now stands at 3,400 MW with 2,468 MW of solar and 932 MW of wind. Tata Power's total renewable capacity is 5,020 MW including 1,620 MW of renewable projects under various stages of implementation.
Rajasthan again tops in green energy capacity among states As per the latest report by the Union ministry of new and renewable energy, Rajasthan has topped in the green energy capacity combining solar, wind, and smaller bio-power sector. CCAI Monthly Newsletter April 2022
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By the end of March 31 Rajasthan will have a total installed renewable energy capacity of 17,040 MW followed by Tamil Nadu (16,099MW), Karnataka (15,904 MW), Gujarat (16,587 MW) and Maharashtra (10,657 MW).
in 2019. The West Bengal government has decided to develop the third pumped storage power plant at Bandhunala project in Purulia in PPP model.
While it has lagged states like Tamil Nadu, Gujarat, Karnataka, Maharashtra in wind power coming at fifth position in the country with 4,326 MW, its leadership position in solar energy has taken its overall renewable contribution to top position in the country.
SJVN achieves financial closure for 66-MW hydro power project in Himachal
JSW Group to develop 900 MW hydel, rolling mill projects in Bengal The JSW Group has expressed interest to develop a 900 MW pumped storage hydel power project and a state of the art rolling shop for steel in West Bengal, company chairman Sajjan Jindal said. He announced the projects while addressing the inaugural session of the Bengal Global Business Summit. The Jindal Group had shown interest to set up a pumped storage energy project in West Bengal
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State-owned SJVN said the Himachal Pradesh State Co-Operative Bank will provide a loan of nearly Rs 500 crore for setting up a 66 MW hydro electric project in Himachal Pradesh. In a regulatory filing, SJVN said it "has achieved financial closure by signing of loan agreement amounting to Rs 494 crore with Himachal Pradesh State Co-Operative Bank for development of 66 MW Dhaulasidh REP (DSHEP) coming under Hamirpur and Kangra District of Himachal Pradesh." The total project cost of Rs 688 crore is to be financed through a debt equity ratio of 80:20, it added. The project has already commenced construction activities since May 2021 and will generate 304 million units on completion at a tariff of Rs 4.46/kwh (kilowatt hour).
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DOMESTIC COAL Demand for thermal coal to rise due to increase in electricity demand: Indian Coal ministry
New coal blocks are being allocated for commercial mining and prospective bidders have shown encouraging responses for these blocks. Some of these blocks have started coal production within a year of allocation, the coal ministry said in a statement.
Coal block allocatees have a golden opportunity to augment production as the demand for thermal coal will rise due to an increase in electricity demand, according to a senior government official.
“Coal block allocatees have a golden opportunity for increasing coal production as the price of imported coal is very high at the moment and demand of thermal coal will increase due to increase in electricity demand of country,” Coal Secretary Anil Kumar Jain said.
There are reports of coal shortages amid rising demand for electricity with the onset of summer season.
The production from captive coal blocks registered an increase of 35 per cent to 85 million tonnes in FY22.
18 | CCAI Monthly Newsletter April 2022
Coal crisis hits India Industry
NMET on April 13, 2022.
A severe coking coal shortage has hit Indian industry, pinching sectors like paper and pulp, cement, aluminium, engineering and steel. Supply disruption due to the war in Ukraine has led to a sharp increase in price of imported coal starving companies which run captive power plants.
Stating that as a fully autonomous body at present, funds will not be a limiting factor for NMET operations, the Minister urged the State Governments to speed up exploration and mining activities to give further fillip to Atma Nirbhar Bharat. Shri Joshi said that six mineral blocks funded by NMET were auctioned by four State Governments during 2021-22 with a revenue generation stream of Rs. 1.63 lakh crore. Rs. 880 lakh has been released as an incentive during 2021-22 in favour of 14 State Governments by the Centre.
Others that are grid dependent are facing acute power shortages for the same reason. Sector experts and consultants say a combination of factors are responsible for this latest snag in the manufacturing sector. “Imported non-coking coal pricing (Indonesian variety) has seen a pricing surge of 160% y-o-y in fiscal 2022 and is expected to see a further 7% y-o-y growth over the high base in fiscal 2023,” said Hetal Gandhi, director, Crisil Research. While better industrial activity and an overall economic rebound is driving demand sentiment, supply side constraints and the Russian-Ukrainian conflict have had an impact on imported coal supplies. Meanwhile international coal prices have shot through the roof because weather disruptions in the key mining areas of Australia, and Indonesia’s ban on coal exports to meet domestic demand. As a result, prices of Australian coal (up over 157% on-year in fiscal 2022) surpassed the $300-per tonne mark in March and was more than 35% higher sequentially in the fourth quarter, said the report. .
State Govts Auction 6 Mineral Blocks Funded by NMET During 21-22 Union Minister of Coal, Mines and Parliamentary Affairs, Shri Pralhad Joshi said that during the year 2021-22, National Mineral Exploration Trust (NMET) has received the highest ever release of funds of Rs.125 crore and approved projects cost of Rs.748 crore. Minister Shri Joshi was chairing the fourth Governing Body meeting of
During the financial year 2021-22, NMET has performed exceedingly well in terms of sanctions of projects and providing funds to exploration agencies, surpassing the performance of previous years. The National Mineral Exploration Trust (NMET) was established in 2015 with the objective to increase mineral exploration in the country. The Governing Body (GB) of NMET lays down the broad policy framework for the functioning of the Trust and reviews its work .
47 coal blocks get mine opening permission, likely to increase to 60 blocks in FY23: Coal Ministry After giving permission to 47 coal blocks for mine opening, the government now aims to scale it up to a total 60 coal blocks in 202223 out of the total 106 blocks that have been allocated to different entities for captive use, the ministry of coal said on April 12. Thermal coal still fuels around 75 percent of India’s power generation. As the domestic coal supply has not been able to catch up with the growing demand and international coal prices continue to soar, the government has been prioritising supplies to the power sector and has asked the captive coal mine owners, especially from non-power sectors, to increase their output for their own consumption.
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The Ministry of Coal said that its Nominated Authority has reviewed the production of coal with allocatees of captive coal blocks whose coal blocks have either commenced production or are likely to commence production during the financial year 2022-23 and found that coal production from captive coal blocks during 2021-22 was 85 million ton (MT), an increase of around 35 percent on year. “The enhanced coal production helped in shortening the demand-supply gap in the domestic market,” the ministry said. ..
Coal offtake likely to pick up in April-June: India Ratings Coal offtake is likely to increase in the April-June quarter of FY23 compared to the same period of the last financial year, according to India Ratings & Research. “Coal offtake is likely to be higher YoY in 1QFY23, especially from the power sector amid sustained high import prices, for pre-monsoon re-stocking at power plants up to the government mandated levels of 45 million tonnes (MT)," said statement by the ratings agency. As of end of March 2022, the closing stock was around 25 million tonne. It added that the inventory build-up shall also be supported by a lower dependence on thermal power as the contribution of renewable sources of power having the must-run status is generally higher in the first two quarter of a fiscal. It also said that India’s coal production is likely to be higher on a year-on-year (YoY) in 1QFY23 in line with pre-covid levels. During the first quarter last fiscal, coal production was 9.4% lower than that in 1QFY20.
Coal India Ramps Up Supply To Power Plants As Heat Wave Propels Demand Country's largest dry fuel producer Coal India
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Limited (CIL) said it has increased supplies by 14.2 per cent to coal-based electricity generating plants in the first half of the current month, but soaring power demand due to hotter-than-normal summer seems to have dwarfed the upsurge in supplies. CIL said that it is coordinating with the ministries of coal, power and railways to build up stocks at power plants in a synergic effort, in the wake of a decline in coal stocks at power plants. CIL's supplies have hit 1.6 million tonnes per day during this period, against 1.43 million tonnes in the corresponding period of last year. The company had ramped up its production to 26.4 million tonnes during the first half of April, registering Y-o-Y growth of 27 per cent. “The company is heading for its highest April production ever. Output expansion in volume terms was 5.7 million tones. The company's supplies are on the up so far. The pressure would ease if the imported coal-based power plants meet their requisite imports set for the year, “ the company said.
Coal India to set up 13 Coal Washeries to reduce ash and useless component Coal India Limited (CIL), a Government-owned coal mining plans to set up 12 new coking coal washeries and one non-coking coal new washery to reduce the quantity of ash and useless component from coal. All these washeries are expected to be operational by Financial Year 2026. The new washeries Commissioned in the last 5 Years are Dahibari Coking Coal Washery (1.6 MTY), and Patherdih I Coking Coal Washery (5 MTY). The Construction of Madhuband Coking Coal Washery (5 MTY) Completed in 2021-22. The planned Coking Coal Washeries under 1st Phase are Patherdih II (2.5 MTY), and Bhojudih
(2 MTY) which are under construction. LoI issued to New Kathara (3 MTY), BasantpurTapin (4 MTY). Moonidih (2.5 MTY) is under Tender evaluation. Ib Valley (10 MTY), the new Non-Coking Coal Washeries is under Construction Further, in SCCL, one washery with 1.0 MTPA operational capacity is working on BOO (Build Own Operate) basis at Manuguru area, Bhadradri Kothagudem District of Telangana. .
SCCL to supply over 81% of its coal production to thermal plants this year Singareni Collieries Company Ltd (SCCL) has decided to supply over 81%, 57 million tonnes (MT) out of its targeted 70 MT, of coal production during the current fiscal (2022-23) to thermal power generation plants in Telangana and other States, mostly in the Southern region, to meet their energy needs. The management of SCCL has recently written to the Coal Ministry assuring it of supplying 57 MT of coal to thermal power plants which have coal linkage with it (Singareni). Accordingly, the company has plans to supply 4.8 MT coal to thermal power plants this month. Till April 17, about 2.67 MT coal was supplied. To meet the demand of thermal power plants, the company has decided to mine at least 2.1 lakh tonnes (0.21 MT) of coal every day with supply of at least 1.7 lakh tonnes (0.17 MT) to thermal plants. Instruction has been given to ensure coal dispatches at least by 36 railway rakes every day. They were told to dispatch 6.5 rakes from Kothagudem, 5.5 each from Srirampur and RG-2 (Ramagundam), 5 from Manugur, 4 from Yellandu and 3.5 from RG-1. It has been decided to supply 4,000 tonnes of coal every day from Bhupalapally area to the 1,100 megawatt (MW) Kakatiya thermal power plant. .
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Private sector can get over 3,200 hectares of demined coal mine land on lease Private sector will now be eligible to take mined out or de-coaled land on lease from Coal India to develop coal and energy-related infrastructure. Over 3,200 hectares of such lands are available as on date. These are lands acquired under Coal Bearing Areas (Acquisition & Development) Act, 1957, popularly known as CBA Act for coal mining activities by Coal India and its subsidiaries. However, these are either mined out or are practically unsuitable for coal mining, prone to unauthorised encroachment, and entail avoidable expenditure on security and maintenance. The government company which owns the land would lease such land for a specific period given under the policy and the entities for leasing will be selected through a transparent, fair, and competitive bid process and mechanism in order to achieve optimal value. The lands will be considered for the activities such as setting up coal washeries/conveyor systems, establishing coal handling plants, constructing railway sidings, rehabilitation and resettlement of project affected families due to acquisition of land under the CBA Act or other land acquisition law.
Analysts bet big on Gangavaram Port; see significant expansion opportunities with APSEZ takeover In one year of APSEZ taking stake in the strategically located Gangavaram Port, analysts see immense growth for the all-weather, multipurpose port in India. After participating in a roadshow organized last week by Adani Ports and SEZ Ltd. (APSEZ) for Gangavaram Port Limited (GPL), analysts are positive that GPL will see a massive augmentation in its capacity CCAI Monthly Newsletter April 2022
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mainly due to large land availability near the port, and the strategic location of the port and its hinterland reach. The port, which handled ~30 MMT cargo in FY22, is expected to handle more than double the current cargo at 66 MMT by FY 25. The target for FY23 is to manage cargo volumes over 40 MMT. Currently, a new container facility of 0.8 MTEUs is under commissioning and is expected to complete by Jul ’22. Already, contracts for 150,000 TEUs (~2 MMT) of container cargo handing have been tied up, which is expected to go up to ~400,000 TEU (~6 MMT) of containers by FY25. The growth is tipped to various catalysts, including commencement of NMDC plant at Nagarnar in FY23, rising Steel EXIM from names such as SAIL, Rashtriya Ispat Nigam Ltd (RINL), JSW Steel and JSPL with operations in the GPL hinterland, and significant momentum being observed for export of agricultural products such as wheat from North India, and rice, tobacco, and chillies from the Guntur belt in Andhra Pradesh.
RAILWAYS & SHIPPING India's railway ministry says to grant higher priority in loading of coal India railways ministry has decided to prioritise loading of coal for power plants from sheds, washeries to June end, it said in a notification. It has also been decided to prioritize loading of imported coal from ports, the railway ministry said. India is likely to face more power cuts this year as utilities' coal inventories are at the lowest pre-summer levels in at least nine years and electricity demand is expected to rise at the fastest pace in at least 38 years. Coal inventories at power plants had an average stock of nine days at the beginning of this
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financial year starting April 1, the lowest since at least 2014. Federal guidelines recommend power plants to have at least 24 days of stock on average.
Railways mulling 1,00,000 more wagons amid rising freight, coal demand Amid rising demand for coal freight and an aggressive push towards diversifying its freight basket, Indian Railways is planning to buy 1,00,000 more wagons over the next three financial years. The procurement plan will majorly consist of BOX N wagons, which are used to transport coal, a senior ministry of railways official said. Notably, the railways recently floated a sizable tender worth Rs 35,000 crore of wagons, which had been in the pipeline since 2018. “Our budget estimates for freight increase were conservative. With the encouraging freight numbers in this financial year, we want to attain higher numbers both in this year and in the medium-term,” the official added. According to the budget, railways aims to increase its annual freight loading to 1475 mt, with a projected revenue at Rs 1.65 trillion in 2022-23. Under the National Rail Plan (NRP), the Centre wants to significantly increase the national transporter’s freight numbers, along with its modal freight share to 45 per cent by 2030. As per government estimates, consolidated demand for freight will be over 6300 million tonne (mt) by 2026 and 8220 mt by 2031.
Core sector grows by 5.8% in February India's core sector growth grew by 5.8% in February, data released by the commerce and industry ministry showed.
The output of eight infrastructure sectors had registered a growth of 4.0% year-on-year in January 2022 while in February 2021, it had contracted by 3.3%. The index of eight core industries measures the output of eight infrastructure industries - coal, crude, natural gas, refinery products, fertilisers, cement, steel and electricity. On a sequential basis, the output of eight core sectors fell by 5.3%. Six out of the eight core sectors, viz., coal (6.6%), natural gas (12.5%), refinery products (8.8%), steel (5.7%), cement (5.0%) and electricity (4.0%) reported a growth in the month of February while crude oil (-2.2%) and fertilisers (-1.4%) contracted. The double-digit output in natural gas has continued for the 12th straight month while refinery production has posted a four-month high growth. The cumulative growth rate of the Index of Eight Core Industries (ICI) between Apr & February 2021-22 stood at 11.0% (provisional) as compared to the corresponding period of last fiscal, data showed. This double-digit growth can be attributed to the negative base of last year.
STEEL
Steel companies betting on IndiaAustralia ECTA to source coking coal cheaper The free trade agreement (FTA) signed between India and Australia last week will bring down the import cost of coking coal for steelmakers and boost their financials as coal costs account for over 50 per cent of production expenses. After negotiating for about 11 years, both countries signed a historic trade deal — the Australia-India Economic Cooperation and
Trade Agreement (ECTA). This agreement will provide, among other benefits, duty-free access to India for about 96.4 per cent of exports. Both governments expect this deal to boost bilateral trade to $45-50 billion over the next five years. Under the ECTA, the effective tariff of 2.5 per cent will be eliminated upon the agreement’s entry into force for most types of coal including coking coal, which accounts for the majority of Australia’s coal exports to India, said an Australian High Commission spokesperson. Indian steel companies are completely dependent on imported coking coal as it is not produced in India. Australia is the preferred destination compared to the US and Canada due to logistics convenience. Coking coal shipments from Australia to India have grown over five-fold to 16.5 million tonnes between last January and September, particularly after unofficial of ban of trade between China and Australia.
India: Surge in raw material cost pushes steel prices to new high in April The surge in raw material prices prompted major steel companies to increase prices in April after two successive months of hikes. The country’s largest steel producer, JSW Steel, and ArcelorMittal Nippon Steel India (AM/ NS India) and Jindal Steel & Power (JSPL), among the top private sector steelmakers, have increased prices of hot rolled coil (HRC) – a benchmark for flat steel – by Rs 4,000-5,000 a tonne. JSW Steel and JSPL which are into long products have increased rebar prices by Rs 2,250-3,000 a tonne, respectively. Data from SteelMint shows that the price of HRC after the increase stands at Rs 79,00079,500 a tonne for JSW Steel and AM/NS India ex-Mumbai. Revised JSW rebar prices are at Rs 73,000-73,500 a tonne ex-Mumbai and JSPL CCAI Monthly Newsletter April 2022
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rebar at Rs 76,000-76,500 a tonne ex-Delhi. Coking coal prices that had gone up to $670 a tonne have come off its highs in the past few weeks. However, industry sources pointed out prices were still high compared to a year back. Moreover, other raw material prices continued to be at high levels. Also, iron ore, the other key input material, was on an uptrend. NMDC also increased prices in April by up to Rs 200 a tonne.
BSL sets record in sale of secondary products The Bokaro Steel Plant (BSL) has achieved 45% more sales of its secondary products in the 2021-22 financial year as compared to the previous fiscal, it said . The Steel Authority of India (SAIL), which commands BSL, has appreciated the PSU’s performance in spite of the hurdles posed by the Covid-19 pandemic.
dropped by 3% to 7.71Mt but volumes of readymixed concrete grew by 5% to 0.87Mm3. The subsidiary of Ambuja Cement and Holcim said that its costs had been negatively affected by a global rise in fuel costs caused by ‘geopolitical events.’ The cement producer said that its new integrated plant at Ametha in Madhya Pradesh is scheduled to be commissioned in the fourth quarter of 2022. It commissioned an upgrade to its Tikaria grinding plant in Uttar Pradesh in February 2022. Waste heat recovery unit projects at its Jamul and Kymore plants are ‘on track’ and the board of ACC has approved the next phase of similar projects at its Chanda and Wadi plants.
Vedanta Jharsuguda supplies first rake consignment of fly ash to cement industry
“The sales in secondary products have increased by 45% as compared to that in the previous year. BSL has sold secondary products worth Rs 2,184 crore in the 2021-22 financial year, as against Rs 1,502 crore in 2020-21 FY.
Vedanta Aluminium, India’s largest producer of aluminium, dispatched its first rake consignment of 4,000 tonne of fly ash from Jharsuguda plant to one of the plants of Holcim India – ACC Cement, Chaibasa Cement Works, to produce low-carbon cement.
The sales in secondary products grew by three times in value during the past two years,” said Manikant Dhan, the chief of communication, BSL.
This initiative is a part of Vedanta Jharsuguda’s waste-to-wealth imperatives and ensures gainful utilisation of an industrial by-product such as fly ash in circular economy avenues, the company said in a statement.
ACC’s earnings down on lowered demand in first quarter of 2022
Fly ash is a by-product of thermal power generation using coal, which caters to electricity requirement of Vedanta’s aluminium smelters at Jharsuguda. The inherent properties of fly ash can be utilised for improving product quality, conserving energy, water, and other valuable resources, and reducing the industry's carbon footprint.
ACC’s earnings before taxation, interest, depreciation and amortisation (EBTIDA) fell by 26% year-on-year to US$83.1m in the first quarter of 2022 from US$113m in the same period in 2021. Net sales rose by 3% to US$566m from US$552m. Sales volumes of cement
Also, being voluminous in nature, fly ash comes with significant cost and energy advantages as well. In cement manufacturing, every tonne of fly ash used can help save 700-800 kg of carbon emissions, 4.2 million KJ of energy, and 341 litres of water.
CEMENT
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Start with quality, destination will be excellence. GLOBAL MINETEC LIMITED is synonymous to trust in supplying the desired quality of coal from the coal mines. With its inception in Talcher, Odisha, this company redefines the power of experience and knowledge. We take pride in the inclusive understanding of our work, its operations and incorporation of new evolved methodology to keep up with the quick paced market. GML operates in regions i.e., Jharsuguda, Ranchi, Talcher, Nagpur and Korba, and plans on expanding globally. GLOBAL MINETEC LIMITED also has extensive experience in NIT work contracts and has provided years of unadulterated services. It has undertaken numerous contracts on loading of wagons and cutting of coal and has performed flawlessly each time as endorsed by CIL.
GLOBAL MINETEC LIMITED also takes strict measures when it comes to safety of its employees, machineries and tools and ensures that all government safety parameters are adhered to, and no deviation of any kind is tolerated. GLOBAL MINETEC LIMITED starts off its logistics from moving the coal from mine stock. The coal is loaded and transported through tippers and subsequently loaded to wagons to be carried to the respective thermal power plants. GLOBAL MINETEC LIMITED is a brand that believes in strengthening its innate competence and growing better each passing day. With numerous new ideas out of its pandora box GLOBAL MINETEC LIMITED strives at becoming a giant business conglomerate. With strong core values and impeccable services GLOBAL MINETEC LIMITED is the name you can count on. CCAI Monthly Newsletter April 2022
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GLOBAL Indonesia raises coal royalty rate to range of 14% to 28% Indonesia raised its royalty rate for coal miners from a single tariff of 13.5% to a range of 14% to 28% dependent on government-set coal benchmark prices, a change miners said could impact future investment. The maximum royalty applies to general sales when prices breach $100 per tonne, Lana Saria, a director at the Energy and Mineral Resources Ministry said. Coal sold under the so-called domestic market obligation (DMO) to power plants and some
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other industries will be charged the 14% royalty, as those prices are capped at $70 and $90 per tonne. The new scheme was set as coal miners convert their licenses into a new special mining permits (IUPK) system when their contracts expire. The new royalty rate takes effect immediately for IUPK issued prior to 2022, while those issued this year will be charged the new rates in 2023. Under the new scheme, miners holding a special permit converted from older, so-called "first generation" contracts will be charged production royalties of 14% to 28% depending on the price brackets.
Indonesia's Adaro sells coal to European buyers ahead of Russia sanctions Indonesia's second biggest coal miner PT Adaro Energy Indonesia Tbk (ADRO.JK) said it has shipped roughly 300,000 tonnes of coal to some buyers in Europe, where countries are seeking a new source of the fuel due to sanctions on Russia.
and Coal Mining Concession Work Agreement (PKP2B) holders. Meanwhile, in the second part, the regulation stipulates that the PNBP rate for coal production will be implemented progressively on the holders of IUPK as Continuation of Contract/ Agreement Operations in accordance with the Coal Reference Price (HBA). .
The coal was sold via the spot market, chief finance officer Lie Luckman said.
Australia’s Whitehaven Coal Says Output Forecast Holding Up
Demand from Europe would likely increase, but markets such as Japan, China, South Korea and India, which are among Adaro's biggest buyers, would remain priorities. the firm had sold to buyers in the Netherlands and Spain, he said.
Australia’s Whitehaven Coal reiterated its annual production view even as wet weather and a labour shortage exacerbated by Covid-19 dented third-quarter output.
Coal prices have surged over the invasion, which Russia calls a "special military operation". That helped top thermal coal exporter Indonesia to post record high exports in March.
Indonesian Government issues coal mining taxes regulation to boost state revenues The government had issued Governmental Regulation Number 15 of 2022 on Enforcement of Taxes and/or Non-Tax State Revenue (PNBP) in Coal Mining that was stipulated on April 11, 2022. It has been issued to complement Law Number 3 of 2020 on the Amendments to Law Number 4 of 2009 on Mineral and Coal Mining. Law Number 4 of 2009 stipulates that expiring mining contracts can be extended with a Special Mining Business Permit (IUPK), by considering the condition of state revenues. The first part of the government regulation describes the implementation of income tax payments for coal mining business actors, including the Mining Business Permit (IUP) holders, IUPK holders, IUPK as Continuation of Contract/Agreement Operations holders,
Managed run-of-mine coal production fell to 5.2 million tonnes (Mt) in the three months ended March 31, from 5.5 Mt a year ago. Still, Whitehaven maintained its full-year runof-mine coal production projection of 19 Mt to 20.5 Mt. That implies a June quarter output of between 5.4 Mt and 6.9 Mt, which would be higher than year-ago figures. Australia’s largest independent coal miner also left its annual managed coal sales outlook unchanged at 17.2 Mt to 17.8 Mt. Whitehaven stands to benefit from a move by several nations to reduce their dependence on Russian coal following Moscow’s invasion of Ukraine. The company said this month it was approached by prospective customers ahead of an expected ban on Russian coal imports by the European Union. Whitehaven, which expected to be debtfree by the March quarter, also said it held A$161 million ($118.91 million) in net cash as at April 19.
Australia face limits in coal exports to Europe ahead of Russian ban Australia, among the world's top coal exporters, CCAI Monthly Newsletter April 2022
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have hit their production limits and are unlikely to meet Europe's demand for additional supplies if the European Union bans Russian coal imports, mining executives said.
It expects to increase Australia's export capacity, deliver more coking coal to international buyers, and generate up to $10 billion in economic activity in the next eight decades.
producers have fielded calls from buyers reliant on Russian coal and have been approached by the government to help coal buyers in allied countries, such as Poland, to replace Russian supply.
Construction will create around 700 jobs and an estimated 1000 positions will be required at full production, expected to start in 2023
While benefiting from soaring prices for metallurgical coal used in steel mills as well as thermal coal used in power generation, Australian miners are unable to boost output quickly, and most of their volumes are tied up in contracts to existing customers. Australian output has been hit by floods in New South Wales and Queensland, COVID-19 outbreaks and labour shortages, holding output below full capacity. Total thermal coal exports for the year to June 2022 are expected to rise about 7per cent from a year earlier, when output was hit by China's unofficial ban on Australian coal, to 206 million tonnes, then slip to 204 million tonnes in 2023
Construction starts on new Qld coal mine The first sod has been turned on a new coal mine which has an expected operating life of nearly 80 years. The Olive Downs coal mine is a new project to produce metallurgical coal, used for steel making, located near Moranbah in central Queensland. The federal government provided a $167.5 million loan to support the mine's first stage of development, including rail and transmission lines, water pipelines, access roads and a coalhandling preparation plant.
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South Africa's Exxaro gets 'numerous' European requests for coal South Africa's Exxaro Resources (EXXJ.J) has received "numerous" requests from European countries wanting to sign supply contracts after the European Union proposed sanctions on Russian coal, the coal miner said. The EU sanctions against Russia, imposed after the latter invaded Ukraine, have put European countries under "severe pressure" to diversify their coal supply, Exxaro said. Exxaro said it has the right quality of coal for the European market, but that current production has already been allocated, and South Africa's struggling rail network means miners will not be able to export more to meet the increased demand. "South African coal producers are able to produce more coal, but significant work will need to be done to improve logistics in order to ramp up coal supply for export," Exxaro said. State-owned rail company Transnet's capacity to haul mineral exports has been limited by cable theft and vandalism, which resulted in a 14% decline in volumes in the year to March 2021, compared to the previous year. South Africa's coal exporters expect a 10 million tonne increase in Transnet capacity this year, following the introduction of 40 additional locomotives by the utility in March 2022.
South Africa’s Transnet declares force majeure on coal contracts, Thungela says South Africa’s state-owned logistics firm Transnet has declared force majeure and is seeking to terminate long-term coal transportation agreements, thermal coal producer and exporter Thungela Resources TGAJ.J said.
after last year's power shortages, analysts said. It also underscores China’s rising energy demand and declining coal imports amid uncertainties caused by the war in Ukraine, they said. The cabinet’s vow to increase coal production indicates that China will maintain an expansion of output that started in the fourth quarter of 2021.
Despite Thungela saying the development would not materially impact its 2022 production forecast, its shares fell 7.8% by 0945 GMT, their biggest fall in a month.
China has set ambitious long-term climate goals and renewable energy development plans, but coal is still the top priority for the country’s energy security and generates about 60% of electricity nationwide
Thungela said Transnet on April 8 notified coal exporters of force majeure and “expressed a desire” to terminate its long-term coal transportation agreements.
China’s March coal imports from Russia plunge 30% yr/yr
The coal exporters are engaging with Transnet to “clarify the contractual position” and ensure the stability of coal deliveries to take advantage of strong demand for South African coal, Thungela said. Coal producer Exxaro Resources last week said it had received “numerous” requests from European countries wanting to sign supply contracts, after the European Union proposed sanctions on Russian coal.
China to Add 300 Million Tons of Coal Capacity This Year Top Chinese policymakers reiterated the importance of coal for the country’s energy security and laid out a plan to add 300 million tons of coal production capacity this year. The State Council, China’s cabinet, pledged to support coal production and projects to ensure the country’s energy supplies in a meeting chaired by Premier Li Keqiang. The expansion would represent about 7% of China’s projected coal consumption for this year. The official spotlight on coal reflects policymakers’ concerns about energy supplies
China’s coal imports from Russia in March fell 30% from a year earlier, as fears of sanctions impeded purchases and China generally bought less foreign coal. The world’s biggest coal consumer imported 3.12 million tonnes from Russia last month, data from the General Administration of Customs showed recently. That was down from 4.43 million tonnes in March 2021. China’s total coal imports in March slid by 40% from a year earlier, as record-high domestic output and government-capped prices made overseas supply less attractive. Chinese traders also scaled back imports of Russian coal as they struggled to secure financing from state banks that worried about potential foreign sanctions after Russia invaded Ukraine. Refinitiv’s trade flows data shows that, as of April 20, 3.23 million tonnes of seaborne Russian coal was expected to arrive in China in April. Analysts estimated that China could import 20 million tonnes more Russian coal in 2022 than last year
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Vietnam to raise annual coal imports to 46.5 million tonnes by 2025, confirms trade ministry Vietnam plans to raise its annual coal imports to 46.5 million tonnes by 2025 and to 123.7 million tonnes by 2045 from 36 million tonnes last year, the Ministry of Industry and Trade has announced. The South-East Asian country, a regional manufacturing powerhouse, turned from a net coal exporter to a net importer nearly a decade ago and has been increasingly reliant on imported coal for its power generation. Indonesia and Australia have been its key coal suppliers. The ministry said Vietnam is seeking to import more coal from South Africa, adding such imports totalled 7.5 million tonnes last year. Its coal imports in the first quarter fell 24.5% year-on-year to 6.43 million tonnes, but the value of those imports more than doubled to US$1.48 billion, according to the government's customs data. The first sod has been turned on a new coal mine which has an expected operating life of nearly 80 years .
EU embargo on Russian coal would raise prices worldwide Europe’s coal futures prices have surged to a record high in real terms over the last month as traders anticipate an EU embargo on Russian exports will disrupt supplies globally. EU policymakers may decide higher electricity and gas bills for households and industry are the necessary price to respond to Russia’s invasion of Ukraine. But EU decisions will have significant spill-overs for other coal-importing countries in Asia, Africa and Latin America, likely raising coal, gas and electricity prices for all consumers.
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Europe now depends on imports to meet more than 40% of its coal consumption, up from less than 30% at the start of the century, according to data from BP (“Statistical review of world energy”, 2021). Russia supplied roughly 50% of coal imports in both 2019 and 2020, accounting for more than 20% of the region’s total consumption.
Balkans turns to coal as energy crisis trumps climate commitments. North Macedonia - Balkan nations in southeast Europe are turning to coal as they try to tackle a global surge in energy prices, raising fears among environmentalists that countries are rowing back on commitments to phase out the most polluting fossil fuel. North Macedonia, once a frontrunner in attracting renewable energy investors, said earlier this month it planned to open two new coal mines to supply power stations. The new coal mines are Zivojno, close to the Bitola power plant in the south of the country, and Gushterica, near the Oslomej plant in the west. Serbia has said it is increasing coal production due to insufficient rain for hydro-electric plants, and that it will import 500 tonnes of coal per day from Montenegro. Bosnia, the only Balkan country that exports electricity, says it will delay plans to shut down coal-fired power plants due to high energy prices and the impact of war in Ukraine .
After Russian coal ban, Poland faces substantial deficit Poland will have to compensate for a shortfall of up 8 million tonnes of hard coal after the country decided to ban Russian coal owing to Russia's invasion of Ukraine, Jacek Sasin, the state assets minister, has said.
To make up for the difference, Poland will increase domestic coal extraction and import the commodity from other countries, Sasin said recently. Sasin, who is also a deputy prime minister, said 2049 was still valid as the final date of terminating coal extraction in Poland, but the phasing out curve will be different from original plans as "for the time being we have to keep coal extraction at an increased level." Sasin also said previous ideas to replace coal with gas are now "outdated" due to surging gas prices.
US coal exports to reach 3-year high amid war in Ukraine: EIA Pointing to supply disruptions amid Russia’s war in Ukraine, the Energy Information Administration April 12 revised upward their 2022 US coal export projections to three-year high 89 million st. The estimated volume is 4.5% higher than 2021 exports and the highest since 92.9 million st in 2019, according to the EIA’s April Short-Term Energy Outlook. Domestic coal consumption is projected to increase 14.2 million st on the year in 2022 as Henry Hub spot prices climb to $5.43/MMbtu in 2022, compared with $4.06/MMbtu in 2021. The EIA estimates 2022 coal consumption at 560.1 million st, up 2.6% from 2021, with electric power consumption at 517 million st, up 3.1% from 2021. Coal is expected to gain generation share at 22.9% of the stack in 2022, up 0.4% from 2021. The opposite is anticipated for natural gas as the share is expected to fall from 37.2% in 2021 to 35% in 2022 amid high prices.
32 | CCAI Monthly Newsletter April 2022
West Virginia coal production on the rise for 2022 Charleston — The world market for coal is changing and West Virginia is poised to benefit from the opportunity, but a top official in the industry cautions it will take some teamwork and planning. Chris Hamilton, President of the West Virginia Coal Association agreed there is an opportunity for West Virginia’s coal industry which has been beleaguered for quite a while to enjoy a nice rebound. According to Hamilton, Europe’s desire to rotate away from Russian energy, the soaring coast of natural gas, and what he called failures in the green energy sector have pushed up demand and the price for coal. “We have an opportunity, but the question is can we capitalize on that opportunity today. In order to do that there’s going to have to be some obstacles and logistical issues identified and responded to,” Hamilton said in an appearance on MetroNews Talkline. Teck provides steelmaking coal sales and pricing update Canada based Teck Resources Ltd has provided unaudited 1Q22 steelmaking coal sales volumes and realised prices in light of the impacts of recent logistics disruptions in British Columbia, Canada. The recent CP work stoppage interrupted rail service to the company’s steelmaking coal operations in the Elk Valley in Southeastern British Columbia. As a result, the realised 1Q22 steelmaking coal sales were 6 million t, slightly below the low end of the previously announced guidance of 6.1 – 6.5 million t. Record steelmaking coal FOB prices resulted in an increase in the average realised steelmaking coal price in 1Q22 to US$357/t. The increase in steelmaking coal prices from 4Q21 further resulted in positive pricing adjustments of approximately CAN$88 million. Teck’s 1Q22 financial results are scheduled for release on 27 April 2022.
COAL PRODUCTION Sl. No.
Subsidiary
Monthly Target
Production During APRIL'22
FY'23
Achmt. (%)
Production upto APRIL'22
FY'22
Growth (%) (FY23FY22)
FY'23
FY'22
Growth % (FY'23FY'22)
1
ECL
3.60
3.00
83.33
2.94
2.04
3.00
2.94
2.04
2
BCCL
2.70
2.47
91.48
1.96
26.02
2.47
1.96
26.02
3
CCL
6.30
5.00
79.37
4.84
3.31
5.00
4.84
3.31
4
NCL
10.50
10.81
102.95
8.56
26.29
10.81
8.56
26.29
5
WCL
5.40
5.00
92.59
3.64
37.36
5.00
3.64
37.36
6
SECL
13.95
12.88
92.33
9.31
38.35
12.88
9.31
38.35
7
MCL
14.25
14.31
100.42
10.64
34.49
14.31
10.64
34.49
Overall CIL
56.70
53.47
94.30
41.89
27.64
53.47
41.89
27.64
5.84
5.32
91.10
4.86
9.59
5.32
4.86
9.59
7.79
4.87
59.98
7.79
4.87
59.98
66.58
51.62
29.00
66.58
51.62
29.00
9
SCCL
10
Captives/ others
Grand Total
CCAI Monthly Newsletter April 2022
| 33
MONTHLY SUMMARY OF IMPORTED COAL & PETCOKE Indicative Imported Coal Price COAL South Africa South Africa Australia Indonesia Indonesia
(kcal/kg) 6000 NAR 5500 NAR 5500 NAR 5000 GAR 4200 GAR
Monthly Price - FOB USD 244.78 USD 203.54 USD 160.06 USD 115.33 USD 72.95
Monthly Price- FOB INR 18681 INR 15534 INR 12215 INR 8801 INR 5567
Monthly Change (USD) -71.22 -78.90 -76.24 -43.46 -37.74
Indicative Pet Coke Price PET COKE
Sulphur
Price
India-RIL(Ex-Ref.) Saudi Arabia (CIF)
-5% + 8.5%
INR 21816 INR 18737 ($245.50)
Monthly Change ($) INR 3760.40 1.10
USA (CIF)
- 6.5%
INR 19271 ($252.50)
-12.90
Exchange Rate
Change (Monthly)
INR 76.32
0.03
Indicative Coking Coal Price Current Month
Premium Low Vol FOB CFR China 481.50 510.63
Monthly Change (USD)
-103.10
73.93
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 445.00 476.63 377.31 433.88 431.88 669.63 662.13 -107.10
71.43
South African Coal News: * Thungela Resources Ltd, South Africa’s largest exporter of coal burned in power stations, extended its share-price rally after a report that the European Union is working to end imports of the fuel from Russia. The EU plans to propose a mandatory phaseout of Russian coal supplies in response to reports that Russian forces committed apparent war crimes in Ukraine. Thungela could benefit as nations scramble to arrange alternative sources of thermal coal. Shortcomings in South Africa’s rail network may hobble the Minerals Council South Africa. Last year, more than $2 billion in potential coal, iron ore and chrome exports were lost because contracted volumes couldn’t reach ports, according to the Minerals Council South Africa. * South Africa is turning to coal-powered plants to meet growing energy demands despite the environmental impact. The continent’s growing energy needs has led some governments to turn to
34 | CCAI Monthly Newsletter April 2022
-82.59
-111.63
-111.63
-14.58
23.23
coal-powered plants. Critics have opined that is not a smart move in times of climate change and point to the continent’s renewable energy resources. * Mining giant Anglo American Plc will separate its South African coal mines into a new business this year, as the company accelerates its response to investor pressure over the most-polluting fuel. Anglo has been plotting an exit from thermal coal for more than a year and has always said separating its South African business was the most likely outcome.
Australian Coal News: * Australia's Coronado Global Resources Inc has flagged heightened requests for metallurgical coal from existing and new European customers ahead of a European Union (EU) ban on Russian coal imports. Coronado said it expects met coal demand to remain
positive in 2022, though improved supply from Australia and Mongolia should balance the market. Fellow Australian producers Whitehaven Coal and New Hope Corp had said earlier that they were also approached by prospective customers but that their priority was to serve existing customers. * Australian coal producers' earnings are on the way up as emerging markets decide to live with the virus and begin to demand more energy, one of many factors sending coal prices higher. The Port of Newcastle in Australia, responsible for exporting a large section of their dry fuel exports, is expected to get busier now that Russia's invasion of Ukraine is adding to the upward pressure on coal prices. * Australian coal producers' earnings are on the way up as emerging markets decide to live with the virus and begin to demand more energy, one of many factors sending coal prices higher. The Port of Newcastle in Australia, responsible for exporting a large section of their dry fuel exports, is expected to get busier now that Russia's invasion of Ukraine is adding to the upward pressure on coal prices. * Australia’s coal export boom will come to an abrupt end because of an “imminent and substantial” drop in purchases by China, and local coal mining communities should brace for the change, experts say. China’s thermal coal imports will contract at least a quarter from 2019 levels of 210m tonnes by 2025, mostly as improved transport links will give local suppliers an edge. If China pursues more ambitious efforts to cut carbon emissions, the decline of Aussie coal will be almost twice as fast, with imports sinking to 115m tonnes by 2025. Shipments of coking coal used in steelmaking face a similar downward trajectory.
Indonesian Coal News: * Indonesia's largest coal producer Bumi Resources and US chemical company Air Products and Chemicals will start developing a new Indonesian coal gasification facility by May. This will be the second coal gasification facility being developed in Indonesia, the first being a joint venture project between Air Products, state-owned coal producer Bukit Asam and oil firm Pertamina. The $2bn project is expected to consume at least 6mn t/yr of coal to produce 1.8mn t/yr of methanol once operational, Bumi said. The facility is targeted for completion by late 2025 or early 2026.
* Indonesian coal mining company Bayan Resources has challenged the government’s decision to revoke its permits and effectively shrink its concession area. The legal challenge is the latest in an ongoing battle over mining concessions in Indonesian Borneo between Bayan and another mining company, PT Senyiur Sukses Pratama (SSP). Earlier this month, five Bayan subsidiaries filed a lawsuit at the state administrative court in Jakarta against the head of the national investment agency, Bahlil Lahadalia, for revoking their mining permits. The announcement was made in a filing to the stock exchange regulator. * Indonesia aims to produce about 663 million tons of coal this year with around 166 million tons for the domestic market and about 497 million tons for exports. The number of Indonesia's thermal coal shipments overseas is rising following Europe's ban on Russian coal amid the ongoing conflict in Ukraine. Indonesia’s exports climbed 44.36% yy at $26.5B last month. Last week, Indonesian President Joko Widodo signed new government regulation on coal tariffs, increasing the country's royalty rate for miners from a single tariff of 13.5 percent to a range of 14 to 28 percent, depending on the country's benchmark coal prices. * Indonesia’s HBA benchmark coal price that saw a correction of 4% last month, has recovered by 2.6% in April’21 on m-o-m basis amid improved demand from China. Coal trade between China and Indonesia has increased manifolds in recent months on the back of the country’s decision to ban coal import from Australia.
US Coal News: * The US energy market may be up for another wave of coal to gas switching this year as potential replacement for fuel demand from Western Europe is driving the global coal price upwards. Weekly US coal demand has dropped by 65% this week coming down below 10 million ST for the first time since January this year. * U.S. utilities and startup firms are trying to convince lawmakers, regulators and customers that they can convert aging coal power plants to house small nuclear reactors. The burgeoning idea would place fleets of small modular nuclear reactors at or near the former coal fired power plants. * U.S. utilities and startup firms are trying to convince CCAI Monthly Newsletter April 2022
| 35
lawmakers, regulators and customers that they can convert aging coal power plants to house small nuclear reactors. The burgeoning idea would place fleets of small modular nuclear reactors at or near the former coal fired power plants. * Indian demand for US mid-volatile matter and premium hard coking coal imports grew in 2020 as strong steel and met coke fundamentals support India consumption rising to a new high in 2021 and 2022. India's US mid-vol imports have been higher than 2020 levels so far this year, with 236,165 mt in January and 282,423 mt imported in February, it said. In January, India imported 76,143 mt of US high-vol HCC.
Pet Coke News: * India's imports of petcoke are expected to more than double this year, industry officials say, as competitive prices are driving cement makers to switch to the fuel as an alternative to coal. Traders say they are expecting 10 million tonnes of petcoke to come into India in 2022. Imported petcoke accounted for nearly half the total consumption during the quarter, with Saudi Arabia and the United States accounting for the bulk of shipments, data from trading firm Iman Resources showed. * Significantly reduced prices of Russian coal as a result of the sanctions imposed on the country has affected the US petcoke market in recent weeks as certain traditional buyers of petcoke are now opting for Russian cargoes as they are getting high discounts. Consequently, demand for US Gulf Coast petcoke has fallen though supply is available. Meanwhile, supply of petcoke in the Mediterranean region has remained short this week due to tighter tonnage. The US Gulf Coast has faced some impediments in supplying petcoke to this region due to higher freight rates. * High prices, limited supply and instable freight rates have caused the US petcoke market to be subdued. Spot activities in US gulf market has also been limited while activities in West coast has been limited due to high freight rates but the price of petcoke has remained flat since last few weeks..
Shipping Update: * Both dry and liquid bulk shipping markets will be reshaped this year on the back of supply chain friction and the war in Ukraine, while
supply chain problems are expected to “drag on through” 2022. Analysts at ING expect trade growth of between 1% and 2%, but with notable differences in dominant good flows. The general trade outlook has deteriorated because of the war, but there are also mitigating effects as commodity flows are being redirected and routes are reshaped which is expected to turn into more tonne-miles. * The pace with which the EU has been importing LNG by sea is tremendous so far this year, as a result of the situation in Ukraine. In a recent report, shipbroker Banchero Costa said that “in 2021, the European Union (27) was the third largest seaborne importer of LNG in the world, with a 15.8% share. It followed Mainland China with 20.2% and Japan with a 19.7% share. LNG imports into Europe seriously jumped in 2019, with the start of a number of projects." * India’s coal imports are starting to reflect shifting world trade and pricing dynamics in the wake of Russia’s invasion of neighbouring Ukraine. India, the world’s second-biggest coal importer behind China, has long been viewed as a price-sensitive buyer of coal. India hasn’t been a major buyer of Russian coal, but it will still be affected by the loss of Russian cargoes as other importers seek to replace Russian volumes with supplies from exporters such as Australia, Indonesia and South Africa. These three exporters are India’s major suppliers and are likely to see increasing demand for cargoes in coming months. * Freight traffic handled by 12 major ports in the country contracted 4.6 percent year on year to 672.61 million tonne in FY 2020-21 due to disruptions caused by the COVID-19 pandemic mainly in the first half of the year, data released on April 5 by the Indian Ports Association showed. Ports’ freight traffic showed a yearon-year increase for the fifth consecutive month in March. Ports’ freight traffic boomed in March, rising 16.4 percent on year, the largest in at least a year .
36 | CCAI Monthly Newsletter April 2022
OVERALL DOMESTIC COAL SCENARIO Coal Production (in MT) Company CIL SCCL
March, 2022 80.26 6.45
March, 2021 81.13 6.38
% Growth -1.1% 1.0%
April-March, 2022 622.64 65.02
April-March, 2021 596.22 50.58
% Growth 4.4% 28.6%
Overall Offtake (in MT) Company
March, 2022
March, 2021
% Growth
April-March, 2022
April-March, 2021
% Growth
CIL SCCL
62.04 5.95
60.06 5.92
3.3% 0.6%
661.89 65.53
574.48 48.51
15.2% 35.1%
Coal Despatch to Power (Coal and Coal Products) (in MT) Company
March, 2022
March, 2021
% Growth
April-March, 2022
April-March, 2021
% Growth
CIL SCCL
52.24 4.75
46.98 4.93
11.2% -3.6%
540.14 53.65
444.97 40.90
21.4% 31.2%
Company
Coal Qty. Allocated March, 2022
Coal Qty. Allocated March, 2021
Increase over notified price
Coal Qty. Allocated April- March, 2022
Coal Qty. Allocated April- March, 2021
Increase over notified price
CIL
7.89
5.30
290%
35.90
42.51
150%
Spot E-auction of Coal (in MT)
Special Forward E-auction for Power (in MT) Company
Coal Qty. Allocated March, 2022
Coal Qty. Allocated March, 2021
Increase over notified price
Coal Qty. Allocated April- March, 2022
Coal Qty. Allocated April- March, 2021
Increase over notified price
CIL
-
6.31
-
41.25
39.33
35%
Exclusive E-auction for Non- Power (in MT) Company
Coal Qty. Allocated March, 2022
Coal Qty. Allocated March, 2021
Increase over notified price
Coal Qty. Allocated April-March, 2022
Coal Qty. Allocated April- March, 2021
Increase over notified price
CIL
-
5.48
-
25.66
31.23
49%
Special Spot E-auction (in MT) Company
Coal Qty. Allocated March, 2022
Coal Qty. Allocated March, 2021
Increase over notified price
Coal Qty. Allocated April- March, 2022
Coal Qty. Allocated April- March, 2021
Increase over notified price
CIL
-
1.08
-
2.86
3.45
81%
Special Spot E-auction Scheme 2020 For Import Substitution Company CIL
Coal Qty. Allocated March, 2022 -
Coal Qty. Allocated March, 2021 -
Increase over notified price -
Coal Qty. Allocated April-March, 2022 2.33
Coal Qty. Allocated April- March, 2021 7.53
Increase over notified price 50%
CCAI Monthly Newsletter April 2022
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NOTE
38 | CCAI Monthly Newsletter April 2022
CCAI Monthly Newsletter April 2022
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REGISTERED
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KOL RMS/022/2022-2024
