Timely Availability of Land and Clearances Crucial for Early Production of Coal”-Coal Secretary

Amrit Lal Meena

Secretary, Ministry of Coal Shri AmritLalMeena said that the Coal ministry will be initiating all possible steps to further fast pace domestic coal production and evacuation process as timely availability of land and other clearances are of paramount importance in ensuring early production of coal from newly allocated blocks. He said the Ministry is in the process of developing a portal for timely monitoring and resolution of issues in this regard.

Additional Secretary & Nominated Authority of the Ministry, Shri M Nagaraju highlighted the policy-level initiatives carried out by the Ministry to increase coal production and facilitate ease of doing business to make the coal sector more appealing. He also underlined the key reforms which have been introduced and implemented by the Ministry in various tranches of commercial coal mines auction in order to make the auction regime more appealing and rewarding

52 coal projects to power 1-bntonne goal by 2026: CIL CMD Pramod Agarwal

National miner Coal India Limited (CIL) has set 2025-26 as the target year to achieve the ambitious 1 billion-tonne (BT) coal production target. Responding to the increasing power demand, the company has stepped on the gas. From approving the highest ever mine projects to enhanced mechanisation and outsourcing, CIL is aiming to boost production while keeping its cost in check, Pramod Agarwal, chairman and managing director of CIL said.

Systemic improvement measures initiated some time back helped in overcoming the daunting target of 700 million tonne (MT). There was support from the government in obtaining environment and forest clearances including land-related issues. Firming up contracts, subdelegating powers to managements of our sub- sidiary companies for quicker decision making, flexibility in contracts of coal production and overburden, persistent coordination with state authorities and ministries of railways, power, environment, and forests in identifying potential bottlenecks and levelling them were some of the other catalytic measures, he said.

We have approved 52 coal mining projects (the highest so far) which will incrementally contribute an aggregate 378 million tonnes per annum in a phased manner. Of these 13 are new and the balance are expansion projects. In pursuit of the 1 BT, these will contribute incremental projected production of 102 MTs in FY 2025-26, Agarwal said.

Captive mining contributed 13.7 percent to India’s total coal production in FY23

Captive mining contributed 13 percent to India’s total domestic coal production, and by the end of the current decade, this is expected to rise to 20 percent. The increase is expected to improve availability and efficiencies, but not hurt Coal India’s prospects, analysts said. Increased captive mining is expected to partially replace imported coal. This rise also faces two challenges — one is higher pricing due to auction premiums and the second is dirty-coal financing related woes.

India produced 893.08 million tonnes (MT) of coal in the last financial year. Of this, 13.7 percent or 122.72 MT was produced through captive and other means, according to Coal Ministry data. According to the experts, Output growth from captive and commercial mines will remain strongest at 4.5 percent between 2023 and 2050.

CIL’s price competitiveness has a role to play as sale or supply from captive and commercial mines will continue to remain costlier than CIL’s supply. While the increase in captive mining augurs well for improved domestic availability, Garg from IEEFA warned that if companies (that have energy requirements) invested in captive coal mines, such a move will inhibit their ability to raise funds both from international and domestic markets.

CIL Sets Roadmap for Development of Underground Coal Mines in India

Coal India Ltd. recently organized a Stakeholders Meet at its headquarters in Kolkata, focusing on the promotion of underground coal mines in India and the roadmap for the development of such mines in the country.

Shri Agrawal emphasized the need for enhancing production and productivity from existing mines and planning for new underground mines, particularly in areas where the quality of coal is good. He also stressed the importance of building an ecosystem that supports the growth of underground mining in India.

Dr. B. Veera Reddy, Director Technical CIL, urged all stakeholders to collaborate in achieving the target of 100 million tonnes of coal production through underground mining by 2027-28, utilizing advanced underground mining technologies. He highlighted that an excellent work culture, quick decision making, and indigenization of equipment manufacturing are crucial for the success of underground mining.

Train crunch to spur coal imports by Indian industries

Indian manufacturers, including aluminium smelters and paper mills, are set to boost thermal coal imports for a second consecutive year due to a shortage of trains, even as staterun Coal India plans to increase output. Higher demand from industry for seaborne coal will thwart efforts by India, the world’s second largest producer and importer of the fuel, to cut its dependence on shipments from mines in Indonesia, Australia and South Africa.

India’s demand for seaborne coal is set to peak during the summer season beginning this month, just as neighbouring China’s coal imports have jumped with the world’s No. 2 economy, supporting global prices. Logistical challenges could boost overall Indian thermal coal imports by 3% in 2023 to 169 million tonnes, said consultancy Wood Mackenzie.

Indian Railways, which delivers most of the miner’s coal on trains, will likely fail to keep up with manufacturers’ demand as it prioritises power plants and as addition of new trains has not kept pace with demand, industry officials say. Train supply to Coal India for delivering fuel to industries declined every month in the last fiscal year. This summer, India could face a daily shortage of at least 50 trains capable of carrying about 200,000 tonnes of coal for both utilities and industries, said a senior coal ministry official said

India's coking coal imports from Russia to accelerate this year

India is set to step up its purchases of Russian coking coal this fiscal year to cash in on lower prices and diversify its imports as Indian firms are keen to capitalise on lower Russian coking coal prices and faster deliveries, trade and industry officials said.

Coking coal imports from Australia, New Delhi's biggest supplier of the key raw material for steelmaking, have traditionally constituted 75% to 80% of India's annual shipments. But during the first 11 months of the previous fiscal year to March 2023, Australia's share dropped to 54% due to higher imports from the United States and Russia.

Recent Russian coking coal prices were 15% to 30% lower than Australian metallurgical coal supplies that averaged around $350 per tonne. Russian supplies are likely to continue to be cheaper during the June quarter. Moscow emerged as the fourth-biggest coking coal supplier to India between April 2022 and February 2023, by exporting 3.9 million tonnes, more than double than a year earlier and may emerge as the second-biggest supplier this year, analysts said

Govt to introduce policy on coal gasification by June

The Government of India is set to introduce a new policy on coal gasification by June, aimed at boosting the country's domestic coal gas production and reducing its dependence on imports.

According to sources, the policy will include several incentives to encourage private sector participation in coal gasification projects. These include exemptions from revenue sharing, capital support in the form of viability gap funding (VGF), tax incentives, and assured availability of coal.

To encourage companies to adopt this technology, the new policy will provide exemptions in revenue sharing for the first few years of operation. This will help reduce the financial burden on companies and encourage them to invest in this technology, as the cost of producing gas would be around 19$ per MGBTU, which is high. So, needed financial assistance for producing gas from coal. Currently, the spot is trading around 12$ per MGBTU, which reached 57$ last year. Furthermore, the policy will also provide tax incentives to companies adopting coal gasification technology

India’s Steel Sector Booming Amidst Global Shift from West to East

Minister of Civil Aviation and Steel, Jyotiraditya

M. Scindia highlighted India’s rapid growth in the steel industry. The minister disclosed that India’s steel production has grown by 6% CAGR in the last decade, and experts anticipate an 1112% increase in the coming years.

India ranks second in global steel production, with per capita consumption rising from 57kg to 78kg over nine years. Scindia said it shows the country’s mandate to boost manufacturing and raise the steel industry’s GDP share from 2% to 5%. The minister attributed the sector’s growth to four key factors: government-industry collaboration, strengthening of national infrastructure, focus on green steel production, and adoption of new technologies.

The government has recently signed 57 MoUs with 27 companies under the Production Linked Incentive (PLI) Scheme for speciality steel, expected to generate an investment of about Rs. 30,000 Crores, create an additional capacity of 25 Million Tonnes of speciality steel within the next five years, and provide over 60,000 job opportunities. Centre has formed two Advisory Committees. Moreover, one is for Integrated Steel Producers, and the other is for Secondary Steel Producers, to ensure stakeholder participation in decision-making.

Govt not keen on imposing higher import duty on steel

The Centre is unlikely to relent to the domestic steel industry's demand for increasing basic customs duty (BCD) on the import of steel, or levy any additional safeguard duty on the alloy, in the near term, said two officials in the know. The government believes that such an intervention could result in the crucial alloy getting more expensive in the domestic market.

The Indian Steel Association (ISA), a group representing the interests of manufacturers such as Tata Steel and JSW Steel, has made multiple representations to the government seeking intervention against alleged predatory pricing of overseas steelmakers. It has sought measures like increasing the BCD on steel to 12.5% from 7.5% currently for flat steel products, and 10% for long products from 7.5% at present.

The industry body has also sought 25% safeguard duty on steel imports from countries that have a free-trade agreement with India, thus bypassing the BCD. Such countries account for more than 60% of steel imports into India. The industry body has also sought 25% safeguard duty on steel imports from countries that have a free-trade agreement with India, thus bypassing the BCD. Such countries account for more than 60% of steel imports into India.

India’s total steel imports went up by 45% in FY23 to 7 million tonnes, preliminary data from

Joint Plant Committee show. Countries such as South Korea, Japan, Russia, China and Vietnam are the top exporters of steel to India.

Steel sector PLI may include capital goods

The government is considering widening the scope of the production-linked incentive (PLI) scheme for steel manufacturing to include more products under it, a senior industry official said.

Capital goods companies that manufacture machinery for the steel industry could be one of the segments that can be included within the ambit of the PLI scheme for steel, the official said. It currently covers only specialty, or valueadded, products in the steel sector. The steel ministry has asked industry representatives for their opinion on what they think should be included and sought their responses by the end of May, he said.

The production-linked incentive scheme was launched in 2020, initially targeting only a few sectors. It has now been extended and covers as many as 14 sectors, including specialty steel. The government has earmarked 6,322 crore for speciality steel under PLI scheme for five years to promote local manufacturing of these grades of steel. These products include coated and plated steel products, high-strength steel, specialty rails, alloy steel products and electrical steel that are used in sectors like automobile, defence and power.

Cement Demand Seen Rising 8-9% In Current Financial Year

Continued government push to build infrastructure will drive cement demand further this fiscal by 8-9 per cent on top of a 9 per cent growth in FY22, which will help the sector see some recovery in profitability, a report said.Recovery in profitability despite the inflationary pressure and healthy balance sheets will keep the sector in good stead despite the large capex pipeline. Softening fuel cost to drive recovery in operating margins even as the industry is likely to increase prices only in low single digit. The agency expects operating margins to recover to Rs 950-1,000/MT in FY24 on the back of softening power and fuel cost. Downside risks could arise from a rebound in coal and petcoke prices, though.

However, the large expansion plans will keep capacity utilisation below 70 per cent, up from 65 per cent in FY23. It expects 75 per cent of the announced expansion of around 150 million tonnes is actually likely to come on stream during FY23-25.

India’s cement makers announce capacity expansions

Indian cement firms have added about 7mn t/ yr of manufacturing capacity during the past month as part of their broader expansion plans. Higher cement output typically raises demand for petroleum coke and thermal coal, the two key fuels for cement makers.

India's largest cement maker private-sector Ultratech recently commissioned an additional cement grinding capacity of 2.2mn t/yr at its unit in the eastern province of Bihar. The company aims to raise its cement capacity to 200mn t/yr by 2030 through organic and inorganic expansions. Private-sector cement maker Dalmia Bharat added capacity of 2.5mn t/yr at its unit in the eastern province of Jharkhand. Fellow private-sector producer JK Cement raised its capacity by 2mn t/yr to 20.67mn t/yr in late March. It had announced plans to expand capacity by 5.5mn t/yr in November 2022 over two years through brownfield and greenfield projects.

The cement sector is likely to witness increased consolidation in the near-to-medium term, given the widening gap between larger and smaller players given a tough environment, India Ratings added. The aggressive medium-term capacity targets of large players are unlikely to be achieved organically

Railways

Indian Railways plans to operate 600 trains daily to transport 75 MT of coal in June

Anticipating increased demand for power in the coming summer, Indian Railways has created a roadmap to use nearly 600 freight trains per day only to transport coal to thermal power projects by June.

"We expect peak coal demand to rise to 75 million tonnes (MT) by June and have created a roadmap according to which we are increasing the freight trains being used for coal transportation by 35-40 trains every month," a senior railways ministry official adding that Indian Railways is on course to add nearly 4,000 wagons or 80 freight trains by June to carry coal.

In case demand rises any more, the Railways has created a plan to allot another 3,000 wagons or 60 freight trains to be used for coal transportation in June and July.

Consumers seek tariff rationalisation on dedicated freight corridor

Stakeholders using the Dedicated Freight Corridor (DFC) are calling for rationalising tariff to attract more consumers on to the railway network. Container train operators and port players say while the DFC has lowered the time taken for moving goods and ensures predictability, the cost is an impediment to adoption.

APM Terminals, a unit of Danish shipping giant Maersk, is seeking the rationalisation. Their Pipavav terminal on the Gujarat coast has immediate access to key markets in northwest India and the largest sea food export belt in India through road and rail, including direct electrified access to the Western Dedicated Freight Corridor.

Commenting on the need to rationalise rail tar- iffs, Manish Puri, president, Association of Container Train Operators (ACTO) said, "Rail is more expensive than road in the light cargo category. This is because charging is done directionally in road. So light cargo in export direction on road is cheaper than the rail route."

Shipping

India's major ports handled highest ever cargo of 795 million tonne in FY23: Sarbananda Sonowal

India's major ports handled the highest ever cargo at 795 million tonne in 2022-23, registering an increase of 10.4 percent over the previous year, Union Minister SarbanandaSonowal said. major ports recorded the highest ever output per day of 17,239 tonne in last fiscal year, a growth of six percent as compared to 2021-22. The minister also said that 21,846 vessels were handled last financial year by major ports.

India has 12 major ports namely, Deendayal (Kandla), Mumbai, Mormugao, New Mangalore, Cochin, Chennai, Ennore (Kamarajar), Tuticorin (V O Chidambaranar), Visakhapatnam, Paradip and Kolkata (including Haldia) and Jawaharlal Nehru Port. Sonowal said that by leveraging data analytics and artificial intelligence, India can optimise operations and make its ports more efficient.

According to Sonowal, major ports are being developed as hydrogen hubs for handling, storage and transportation of green hydrogen. Under National Hydrogen Mission, green hydrogen / ammonia bunkers and refuelling facilities are to be established in all major ports by 2035, he added. Deendayal, Paradip and VO Chidambaranar ports are developing infrastructure for establishment of hydrogen bunkering.

Noting that the development of smart ports is crucial for the growth of India's economy, Sonowal said about 95 percent of India's trading by volume and 70 percent by value is done through maritime transportation.