CCAI Newsletter August-20

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

Inside: Coal & Renewables; not Coal vs Renewables - by Devendra N. Arolkar

Vol. XLIX No. 05 Published on : 28.08.2020

JINDAL STEEL & POWER LIMITED PARALLEL FLANGE BEAMS & COLUMNS | PLATES | RAILS ANGLES | CHANNELS | COILS | TMT REBARS CUT & BEND BARS | WELDED WIRE MESH | WIRE RODS CRANE RAILS | FABRICATED STRUCTURAL STEEL

JSPL DEVELOPS HEAVY CRANE RAILS OF UPTO 150 KG PER METER

RAIL TRACKS

PARALLEL FLANGE BEAMS & COLUMNS

ANGLES

PLATES

FABRICATED SECTIONS

TMT REBARS

CUT & BEND

HOT ROLLED COILS

Our wide range of products demonstrates our capability to consistently add value in line with evolving customer aspirations, and be a part of the nation’s socio-economic development. Our products are a result of pioneering initiatives that have been made possible by deploying futuristic technologies blended with a culture of consistent innovation.

2 | CCAI Monthly Newsletter December 2019 jsplcorporate

Jindal Steel & Power Ltd.

jsplcorporate

jsplcorporate

CCAI Monthly Newsletter December 2019

|3

From the Editor’s Desk Following months of inactivi ty and gloom caused by the deadly pandemic outbreak, India’s industrial sect or is slowly fighting its way bac k to adjust with the new normal in the post-C OVID world. Though the presen t scen ario looks far from rosy, gradual relaxation in lockdown norms across the cou ntr y, reopening of manufacturing units and sligh t rise in demand gives hope of a new beginning in the near future.

Despite India being the world’s second highest producer and consumer of coal, the country’s fossil fuel sector also did not remain unaffected by the pandemic.

According to India Ratings, demand for domestic coal in India is likely to be subdued in the second quarter of FY 2020-21 due to low er demand from end-user industries and high inventory-level at power stat ions. Fur ther, both thermal and coking coal imp orts at India's 12 major por ts dropped 31 per cent to 36.7 million tonnes (MT) in April-July 2020 ove r the same period a year ago.

In order to overcome the ong oing stalemate, the governmen t’s move to introduce commercial coal mining wit h liberalised bidding terms and the associated reforms announced by the Ministry to attract foreign players, non-mining entities and large miners are expected to play a major role in shaping the coal sector in coming years.

In order to ease the coal min ing process for the upcoming auctions, the Centre is mulling to allow land acquisition under the Coal Bearing Areas Act, 1957 which would entail the Centre acquiri ng land and then giving it on lease to the miners.

The Ministry of Coal is also in conversation with the Ministr y of Environment, Forest and Climate Change (Mo EFCC) to bring down the tim e taken for getting Forest Clearances for coal min ing projects. Out of the 41 bloc ks to be offered for auction, 21 feature in the original No-Go list of the Cen tre for Science & Environment for having gross forest cover more than 30 per cent.

Meanwhile, overcoming the ongoing downturn, steel com panies in India is set to increase prices from Septem ber due to rising costs and high er international prices. According to analysts, the increase could be in the ran ge of Rs 2,0003,000 a tonne as the demand was picking up in the domesti c ma rket across sectors while the export marke t is also going steady.

The country’s cement sector that was severely hit by the pandemic is expected to surge in rural areas due to higher agricultural income, a better-thanexpected monsoon and pick up in the government’s affordable housing initiative.

According to rating agency Cris il data, V-shaped recovery tren d in the cement sector can be witnessed from a sharp contraction of 85% seen in April to an estimated 7-10% growth by the four th quarter.

4 | CCAI Monthly Newsletter August 2020

Content Vol. XLIX No. 05 August 2020

06

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

Coal & Renewables; not Coal vs Renewables

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

12

Consumers' Page

16

Power

22

Domestic

28

Global

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

34 Monthly Summary Of

Imported Coal &Petcoke

36 Energy Generation Report 37 Overall Domestic Coal Scenario 38

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

|5

Coal & Renewables; not Coal vs Renewables 3rd September 2020 Abstract: In my enthusiasm to present a wellrounded case, I have ended up lengthening the article inordinately, at the risk of driving away potential readers. So providing an abstract is in order.

T

he general impression that renewables will displace coal in the near future does not appear to have a sound basis. I have cited the experience of Germany in renewables and that of China in coal to drive home the point. Several forecasts indicate that in 2030 and 2040, our installed capacities of coal based generation will be significantly higher than the current one. Further, despite intense push by the Government, we will fall short on the renewable energy targets due to sticky issues like land acquisition, signing of PPAs/PSAs by DISCOMs, lending by the Banks who are already stressed and power sector being a significant contributor, accumulated losses as well as debt of DISCOMs etc. Also, due to economic and political reasons, exiting coal is next to impossible.

There is a need to protect the current installed capacity as well as be responsive to any new capacity requirement due to sudden increase in demand. Creating capacity takes long time and we have no idea of unmet demand or how demand will grow/gallop, else we may end up importing electricity like we import thermal coal.

Please read on‌..

6 | CCAI Monthly Newsletter August 2020

Background It is believed that use of coal dates back to 3490 BC; however, it was only during the Industrial Revolution of 18th Century that coal began to dominate the economic environment and continues to dominate till date, it is presently the largest source of energy. Notwithstanding the same, since the last few years, obituaries are being written about the imminent/impending demise of coal. Such a negative bias is strengthened when one imagines green energy with wind mills and solar panels in pristine pastures as against dusty environment in the coal mining areas in India. Just a reminder to the RE enthusiasts, while drop in generation prices of solar is a recent phenomenon, wind mills have been in existence for centuries, yet coal prospered.

The current narrative of Coal vs Renewables gives an impression that the renewables are loaded with only positives and coal is nothing but a black villain and we should kill this villain, soonest the best. Also a fond belief that scaling up of renewables will be easy needs to be revisited.

Despite 75% of electricity being generated by thermal sources, it hardly gets its due recognition. This conundrum is sought to be evaluated objectively in the following paragraphs, specifically with respect to solar power which is expected to have higher growth trajectory, considering that we are blessed with abundant sunshine as well as coal.

1.0 Renewable Energy targets: Year

RE Target

Solar Target

2022

175 GW

100 GW

2030

450 GW

280 GW

Solar Capacity Fructification Estimates CRISIL estimate of Aug 18: 80 GW, Mar 19: 70 GW FITCH estimate of June 19: 54.7 GW No visibility, target appears to be aspirational

1.1 Status of Solar projects in India: As per the report released by CEA in August 2020, SECI has tendered 18.9 GW of solar capacity out of which 13.8 GW is under construction. Out of 61 projects under this, Financial Closure has been achieved in 8 cases, Land Acquisition has been completed in 2 cases and orders for Plant and Machinery have been placed in 2 cases. PPAs/PSAs have not been signed in most cases.

At this rate, the capacity addition could be lower than 54.7 GW estimated by Fitch in June 2019 against the much publicized target of 100 GW by 2022. We can expect the current pandemic of Covid 19 to cause further delay.

1.2 Hurdles for Renewables (Solar in particular) taking off in India: 1. Intermittency of generation: This will continue to be a major problem till long awaited storage battery technologies reach a point of strategic inflection and drive down the costs as well as prolong the useful life. Scrapping batteries after their useful life of 5 to 10 years is in itself will cause pollution on a large scale. Going by the experience of Narmada Bachao Aandolan, pumped storage of meaningful scale is a pipe dream in our country, notwithstanding CEA estimate of 96 GW of pumped storage potential.

2. Humungous land requirement: 5 acres per MW of solar is a mammoth requirement, and when you add the impact of low CUF of 20% (against upwards of 85% for TPPs), this land requirement gets magnified dramatically. This is the single biggest hurdle in scaling up of solar capacity in the country.

3. Funding by Banks: With massive exposure of Rs. 5.9 Lakh Cr to power sector, with rampant haircuts up to 80% and the looming threat of more loans becoming NPAs, expecting Banks to fund renewable projects of Private Sector on a large scale is unrealistic.

4. PPAs/PSAs by DISCOM: With commitments through PPAs already in excess of their requirement and the resulting outgo of fixed costs/capacity charges (without even drawing commensurate power), payment of salaries and pension obligations to staff even when their plants are shut down/backed down, ever burgeoning subsidies wherein large part goes unfunded; it is but natural that the DISCOMs are unwilling/reluctant to sign further PPAs/PSAs. Hope they learn something from the past excesses in signing PPAs as well as withstand the pressure from vested interests. Regulators too need to pitch in to ensure that viability of the DISCOMs is not further compromised and the sector has some chance of survival/revival.

5. Sunk cost of coal based plants: In the event of materialization of large capacity addition in renewables and viability of storage becomes a reality, TPPs may shift to marginal costing, with variable cost in the range of Rs 1.3 (for pit head plant) to Rs 2.5 for a load center plant and still outcompete renewables. This possibility cannot be ruled out.

Considering the above, achieving renewables target of 450 GW by 2029-30 looks difficult.

CCAI Monthly Newsletter August 2020

|7

2.0 Electricity demand: 2.1 CEA, in its January 2020 “Report on Optimal Generation Capacity for 2029-30” has estimated coal based generation of 1358 BU in 2029-30, requiring 892 million tons of coal at specific consumption of 0.65 kg/kWh, with PLF at 66%. Coal based capacity is forecasted at 267 GW in 2029-30 against current capacity of 199.6 GW. With several coal based plants becoming due for retirement in the intervening years , significant addition to coal based capacity is inevitable. Total generation is pegged at 2325 BU in 2029-30. It would be appropriate to mention that while CEA has given due attention to seasonality and variability of renewables and modeled accordingly, intermittency appears to have been overlooked.

2.2 Forecast of Electricity demand on the basis of per capita consumption: Based on the current trend of growth in population (1.2% pa) and growth in per capita consumption of electricity (4.3% pa), capacity of 584 GW is required in 2029-2030. If we aspire to reach the level that China was in 2010, capacity of 913 GW is required in 2029-30. Base year is taken as 2014-15, since generation capacity was quite constrained then. Ratio of BU/GW has been extrapolated.

Year

Population Cr *

Population Growth CAGR

Elec consUnits per capita *

CAGR Elec cons- Units per capita *

BU required

Total BU/GW Capacity factor GW

2014-15

130

Base

957 (A)

Base

1244 (A)

268 (A)

4.64

2019-20

136

1.20%

1181 (A)

4.30%

1606 (A)

356 (A)

-

1877 (E)

4.30%

2709 (E)

584 (E)

-

2943 (E)

Match China per capita consumption of 2010

4238 (E)

913 (E)

-

Scenario

A B

202930

144

1.20%

*the three parameters are showing some discrepancy with respect to correlation.

It is high time that we move away from competing with the likes of Nigeria, Congo, Ivory Coast, Ghana on the basis of per capita GDP and set the bar higher. Considering that a good 25% of the population doesn’t have access to electricity, we should move away from the mindset of incremental growth in per capita consumption of electricity. Believing that in 2030 we can match China of 2010 need not be preposterous, rather we need to do so.

3.0 Experience of the poster boy for renewables-Germany: Non-renewables

Renewables

Source

Coal+ Lignite

Natural Gas

Nuclear

Bio mass

Solar

Wind

Hydro

Waste

Share in Generation in 2018

35.4%

12.9%

11.8%

7.0%

7.2%

17.3%

2.6%

1%

As can be seen from the above table, solar and wind are supplying only 24.5% of electricity, despite enjoying subsidies for the past 18 years. Bio-mass that is contributing 7% is also a polluting fuel, though renewable. It is also reported that cost of power has gone up by 50% in Germany ever since

8 | CCAI Monthly Newsletter August 2020

renewables were given push. California has similar experience in terms of pushing up of costs. On the contrary, in the case of France where 80% of power is from nuclear, power is cheaper and the cost is going down continuously.

4.0 Experience of China, an equally populous, but much more developed country: From per capita consumption of 993 Units in 2000, the usage galloped to 2943 Units in 2010 and 3927 Units in 2014, mirroring their economic development. China has capped their coal based capacity at 1300 GW against projected coal based capacity 267 GW 2029-30 in our case. Presently, China burns over 3 billion tons of coal, whopping 50% of global share. It may be pertinent to note that @ 1990, India and China were at comparable level on the economic development parameters.

We cannot aspire to emulate Chinese economic miracle without emulating their energy transformation. High time we called this carbon imperialism bluff of the developed world. We should also remember that Chinese banks are funding 101 GW capacity in 24 nations.

Indonesia too continues to ramp up its coal production and exports; has set 609 million tons target for production in 2021 against 550 million tons target of 2020.

5.0 Challenges posed by DISCOMs: Ultimately, success of the renewable capacity that is being added will be determined by the DISCOMs through which this power will have to be sold. And the fate is going to be no different than the humungous coal based capacity that was added between 2011 and 2017, primarily in Private sector, at a CAGR of over 12%. Rather, the fate may be worse than thermal plants since most DISCOMs have already contracted long term capacity far in excess of their requirements and are bleeding through payment of capacity charges even where they don’t draw power. As an example, Maharashtra has contracted capacity of 35,000 MW, currently drawing 14,500 MW and would rarely have drawn beyond 20,000 MW. On top, the gap between Average Cost of Supply (ACS) and Average Revenue Realized (ARR) on all India basis was Rs 0.52 per unit in 2018-19, this is not going away despite UDAY schemes and several initiatives of Ministry of Power. In 2018-19, DISCOMs have accumulated losses of Rs 4.88 Lakh Crore and AT&C losses of 22.01%, this doesn’t inspire confidence that the house will be put in order anytime soon. This has also resulted in some States like AP wanting to renegotiate the PPAs as also some successful solar Bidders line ACME, Azure, Renew cancelling some of the PPAs.

6.0 Future of coal in India: In view of the aforesaid, future of coal , at least for the next few decades in the context of our country, is definitely not bleak as it is made out to be. It will be meaningful to take note of the following in respect of coal.

6.1 Thermal (coal) power, a favorite whipping boy: Bad name: Despite generating 75% of electricity, thanks to concerted campaign by the Greens, thermal power is getting ostracized. There is hardly any objective evaluation of its contribution.

High taxes: Along with heavily taxed “sin” products like cigarettes, coal is getting increasingly taxed day by day. For common grade of thermal coal (G11), direct taxes and levies are almost equal to selling price. It may be borne in mind that this selling price in itself has lot of hidden taxes; on diesel, CCAI Monthly Newsletter August 2020

|9

on salaries, on profits of coal companies, on profits of contractors and host of indirect taxes paid in the course of consuming various products and services by the individuals and entities involved. On the contrary, renewables are heavily subsidized, including waiver on ISTS charges (almost a rupee per unit) and AT&C losses. Also, subsidizing railway passengers increases the cost of coal.

Image as a highly polluting fuel: It is ironical that bio mass which is also a polluting fuel is being included in the “green energy” bucket, thereby helping the propaganda. If one analyses the decrease in pollution during the recent lockdowns, it is clear that bulk of the pollution is caused by vehicles, dust produced at construction sites and factories/kilns with inefficient combustion processes. Following table provides an indication.

Decrease in Pollution level in Mumbai during the lockdown: PM 10

Reduction

PM 2.5

Reduction

Thermal PLF

Reduction

May 2020

27-68 µg

68%

12-40 µg

69%

47.9 %

25%

May 2019

94-205 µg

-

48-127 µg

-

63.6 %

-

PLF reduction was moderate, at 25; pollution reduced significantly.

6.2 Why it is difficult to move away from coal?

1. Economic value added: The economy of the coal bearing States is heavily dependent on coal, be it collection of taxes and royalties by the State, employment provided by Coal Companies and its subcontractors/transporters, driving supporting business activities, Railways etc. People seem to be oblivious to this contribution. Can’t imagine how this can be compensated if coal mining is reduced (closing for the next several decades is out of question). Remember, exiting any activity in India is next to impossible. By one reckoning, more than 70 lakh persons are employed/engaged in coal sector, Coal companies and Railways are amongst the largest employers.

2. Abundance: Country is blessed with abundant reserves, which can be mined cheaply (if done more efficiently). Minus taxes and inefficiencies, energy cost of Rs 0.6 per unit is feasible at pithead, which is indeed very low.

3. Subsidizing of passenger traffic of Indian Railways: Coal freight is overpriced by one third to subsidize passenger traffic.

4. Limitations on Installed and effective capacity of Renewables: Despite massive push by the Government and the infatuated Media, Institutes, Academia gloating about the impending demise of coal and breakneck rise of renewables, capacity creation is not moving at the intended pace. Once economy revives, coal will have to supply even more power.

5. Stage of development: With a quarter of our population not having access to electricity and 40% still using firewood/kerosene/dung for cooking and lighting; we need energy from all the sources that we can muster. With negligible oil and gas reserves, it is the coal that has to shoulder the burden of the development of the economy.

6. Grid balancing: The Grid starts experiencing issues when renewables exceed 20% to 30% of the power generation mix. Without storage of peaking plants, integration would be challenging.

10 | CCAI Monthly Newsletter August 2020

Way forward: 1. Accept that both coal and renewables have to co-exist, with the former taking lion’s share for few more decades. Do not put coal on euthanasia through excessive taxes and uncharitable narratives. Continue to keep the installed capacity of TPPs in “Ready to Operate” condition, else we may have ignominy of importing electricity too.

2. Be ready to revive stalled coal projects in case desired capacity of the renewables doesn’t materialize. We need power, source may not matter in case of shortage. Don’t throw out the baby with the bath tub. Forecast of coal based capacity rising to the level of 330-441 GW in 2040 may be closer to reality than RE enthusiasts believe.

3. Promote even faster adoption of EVs to control pollution in the cities. We are way off from the target of 7 million hybrid/electric vehicles on roads by 2020.

4. Stand up to the carbon imperialism of the developed world. Our economic development has to go hand in hand with emission controls. FGD adoption could be an area that may be reviewed critically; whether spending so much money and replacing one type of pollution with another type is meaningful.

5. To meet emission targets, targeting coal need not be the only option; go for low hanging fruits like control on emissions from kilns, ovens, chemical factories, minimizing burning of wood, stopping burning of crop residue, minimize household use of kerosene, avoiding coal transportation by road etc.

6. Be realistic about actual installations of RE and contribution in terms of generation from RE. Allow the ever reliable and dependable workhorse-coal to do its work.

7. Realize that the Tax payers money is stuck in stranded assets in thermal power, no need to throw more money in renewables if they are likely to get stranded likewise. No amount of diktats can override economic logic.

8. Be realistic about reforming the DISCOMs, it will take time, rather lot of time. Faster adoption of solar pumps can reduce the subsidy burden. Smart prepaid meters can reduce leakage and improve collection. Overhauling the Regulatory framework can improve the working.

9. The model that may be appropriate for developed Western Nations with a small population base may not be suitable for us. China could be a better example to emulate for our economic development considering our current level of development.

10. Promote clean coal technologies and coal gasification so that adverse impact on the environment can be reduced.

11. Continue investing in coal mining, processing/beneficition and evacuation infrastructure and upgrading the technologies.

In conclusion, the irrational exuberance about Renewables displacing coal in large measures will have to be taken with a pinch of salt. Banks need to watch out for lending, retail investors need to be cautious on subscribing to the IPOs that would be in the pipeline, else we will have a repeat of the last binge in power sector IPOs wherein most people were loser. We also should not show undue hurry in administering euthanasia to coal based power plants, we need them for the development of the Country. Lastly, investors in the stock market, coal blocks and coal mining/ transportation/processing/beneficiation infrastructure would do well to reflect on the wise words of the Oracle of Omaha, Mr. Warren Buffet- “Be fearful when others are Greedy and be Greedy when others are Fearful”. ___________ Opinions and recommendations in this article are exclusively of the author and not of any other individual or institution.

CCAI Monthly Newsletter August 2020

| 11

CONSUMERS’ PAGE

Issues faced by the Power Sector Consumers:

sidings Salanpur and Sonepor Bazari area of ECL in recent months where variation of three to five grades have been observed in the coal received by the Utilities.

1. Recurrent issue of grade-slippage faced by Power sector consumers from various CIL Subsidiaries

SECL: Grade variation in the tune of one to

Power consumers procuring coal from various CIL Subsidiaries have repeatedly expressed concerns over the recurrent issue of coal grade slippage in their representations. Significant variation between the billed and received grade of coal procured from a number of CIL Subsidiaries- especially in ECL, along with certain collieries of SECL, WCL, MCL and CCL in recent months have led to severe loss to the Utilities even amid the financial crisis caused by the pandemic situation.

WCL: Significant grade variation in the tune of

ECL: The issue of grade variation has consis-

tently occurred in Bankola, Ukhra, POCP Railway

12 | CCAI Monthly Newsletter August 2020

four grades has been reported during supply of -250 mm coal from Gevra & Kusmunda mines of SECL in both Rail and Road mode in recent months. Instances of grade slippage have been as high as 86%- 100% in certain rakes supplied from these areas.

two to five grades have been observed in the rakes loaded for Power sector consumers from the Ghughus siding of WCL’s Wani area during July-August 2020.

MCL: According to Utilities procuring coal from MCL’s Talcher sidings in June, July and August 2020, grade slippage in the tune of one to

three grades have occurred in the Subsidiary’s Talcher SPUR- I, II, IV, VI, VII, VIII sidings.

CCL: Grade slippage is recurrent in CCL’s Magadh and Amrapali mines in recent months.

It has been requested to MoC, CIL and the concerned Subsidiaries that the declared grade of the mines where issues with coal quality are frequently reported may be reassessed and taken up with the Coal Controller for re-gradation so that the customers may receive the actual grades of coal.

2. Immediate processing of longpending refunds against supply of ungraded coal to Power sector: As per the provisions in Fuel Supply Agreements (FSAs), if supplied coal to Power sector consumers is declared ungraded, the buyers are eligible to limit the payment of cost of coal to Rs. 1 per tonne apart from paying Royalty, cess etc.

However, many Power Utilities are yet to get the refund for supply of ungraded coal by a number of CIL subsidiaries. In many cases refunds are pending for even more than two years.

Request has been made to CIL and the concerned Subsidiaries for immediate processing of those long-pending refunds for supply of ungraded coal as the prevalent FSA provisions or if formulating a new policy, it may be expedited to provide relief to the Generators immediately.

3. Request for compensation against huge shortage in rakes received from CCL & SECL: Power Utilities often struggle due to significant shortage in received quantity of coal from various CIL Subsidiaries. Power sector consumers having valid FSAs with CCL has suffered major financial loss due to shortage in received quantity in the tune of 18% compared to the RR quantity in rakes from Birds Sounda-D Colliery of the Subsidiary in July, 2020.

Meanwhile, TPPs procuring coal from SECL has also suffered due to significant shortage in the tune of (8.9% -11%) in received quantity compared to the RR quantity in the rakes received from Dipka, Gevra and especially Old Kusmunda siding of SECL in July, 2020. Some Utilities procuring coal from of SECL’s Kusmunda siding had to pay significant penal charges for overloading in these rakes in spite of the shortage in supply. This might have been caused by faulty weighment at the weighbridges in the area.

It is requested by the consumers to reimburse the loss either by adjusting the amount with the coal value paid by Power companies or by offering additional quantity from the aforesaid sources. Faulty weighbridges at the sidings may often lead to shortage in coal quantity due to incorrect weighment of rakes. Therefore, periodic recalibration of the faulty weighbridges is urged upon.

4. Request for supply of crushed coal to the Power sector from alternative sources of SECL mines: Lumpy/ bigger size coal is not suitable for usage in the power sector. Utilities are not getting their allotted quantity from SECL’s Kusmunda and Junadihsidings since May 2020. Though (-250 mm)coal is presently being offered from the Subsidiary’s New Kusmunda-2 and Old Kusmunda sidings temporarily to supplement the coal supply, Utilities are struggling to use the coal without crushing because of its relatively bigger size..

Issues faced by Non-Regulated Sector consumers: 5. Formulation of policy for issuing credit notes to NRS consumers for supply of ungraded coal: NRS consumers suffer major financial losses in case of supply of ungraded as there is no provision for issuing credit notes to them in CCAI Monthly Newsletter August 2020

| 13

this regard. Formulation of a suitable policy in line with the Power sector is requested to CIL and MoC so that the NRS consumers can get their requisite refund from the coal companies against supply of ungraded coal.

6. Request for not supplying consecutive rakes to NRS consumers: Industries procuring coal from various CIL Subsidiaries have stated that long-pending rakes are being sent to them by the coal companies at one go resulting in supply of coal quantity, much above their Monthly Scheduled Quantity (MSQ) even as most of the Industries are running their plants at low capacity and are suffering due to lack of workforce and amid the pandemic. This has led to hazards at the plant end including fire, damaging of equipment and plant infrastructure etc. CIL and its subsidiaries have been requested not to supply consecutive rakes to NRS consumers much above their MSQs.

Mahan II colliery have already made the payment for issuance of RDOs for the month of July 2020 but still the same has not been issued by the concerned Subsidiary.

Immediate issuance of RDOs from the said colliery is requested so that the consumers can start the lifting process and get their allotted quantity within the stipulated time period.

9. Request by NRS consumers for immediate execution of tripartite agreement: Request has been made on behalf of the NRS consumers procuring coal from CCL for immediate execution of the tripartite agreement against Special spot E-auction Phase –II held on 30.06.2020 between the coal company, consumers and the third party agency (QCI) so that the consumers are able to start procuring coal by availing the facility of 3rd Party Sampling & Analysis.

7. Early processing of refunds for supply of lower grade coal from SECL’s Ba- 10. Request for immediate reconciliation of Referee results and settlement roud OCM: of credit/debit notes by CCL: Due to the non-availability of allotted G-9 grade of coal in SECL’s Baroud OCM, NRS consumers were supplied with G-14 grade of coal. The differential coal value of the received quantity from August to December 2019 is due to be refunded to the consumers. Also, certain NRS consumers were supplied with G-10 grade coal from SECL’s Jampali mines since January 2020 as an alternative of G-9 from Baroud OCM. Refunds in this regard are also pending.

Considering the acute financial crisis the NRS consumers are going through in the COVID period, it is requested to CIL and the concerned Subsidiary immediately expedite the processing of pending refund amounts.

8. Request for issuance of RDOs from SECL’s Mahan II Colliery: The NRS consumers procuring coal from SECL’s

14 | CCAI Monthly Newsletter August 2020

NRS consumers procuring coal from CCL have stated that reconciliation over undisputed, challenged and non challenged referee analysis results are pending since long and in many case, settlement of debit/credit notes are due for more than two years.

Request has been made to CIL and CCL for urgent reconciliation of Referee results and settlement of credit/debit notes in order to reduce the financial burden from the Industries.

CCAI CCAI Monthly Monthly Newsletter Newsletter November August 2020 2019

| 15

POWER India's dependence on thermal power to dip to 50% by FY22: Report India's dependence on thermal power will reduce to 50 per cent by 2021-22 and 43 per cent by 2026-27 on the back of renewable energy (RE) capacity additions, a report said.

Thermal power includes diesel, gas and coalbased electricity generation which contributes 63 per cent of total electricity generation capacity in India as per the report.

"India is chasing ambitious RE targets and enhancing its T&D (Transmission & Distribution) infrastructure. Increasing RE use is decreasing dependence on coal. Contribution of the thermal sector will reduce to 50 per cent by FY22 and 43 per cent by FY27," said a report by Praxis Global Alliance and Zetwerk.

16 | CCAI Monthly Newsletter August 2020

The recent study by Praxis Global Alliance, a leading management consulting and advisory firm, and Zetwerk, an Indian B2B marketplace for manufacturing products and services, highlights the impact of COVID-19 on the overall power sector including key segments - generation, transmission, and distribution.

According to the report the installed power generation capacity has increased at 8.6 per cent CAGR over the period FY12FY19 and renewable energy is growing at the fastest pace.New private investment in the generation sector is expected to be largely in the renewable sector, it added.

The report showed that owing to past bad experiences, long-term PPAs (power purchase agreement) in thermal power are unlikely to pick-up in the future.Renewables sector is likely to continue with long-term PPAs, it added.

India's power output rises 2.6% in early August for first time in five months India's electricity generation in the first 15 days of August rose for the first time since early March, provisional government data showed, as the country opened up industries and lifted restrictions to control the spread of coronavirus.

Power generation rose 2.6% in the first 15 days of August compared with the same period of last year, a Reuters analysis of daily load despatch data from federal grid operator POSOCO showed, compared with a 1.8% fall in July. In the second half of last month, electricity generation declined 3.1%.

Power use has picked up from previous months when India was under a strict lockdown, mainly because of higher demand in the northern states and rising consumption in the highly industrialized western states of Gujarat and Maharashtra.

Rajasthan, India's largest state by area, saw a 15.7% growth in electricity use. Other states including Bihar, Uttar Pradesh, Chhattisgarh and Madhya Pradesh also saw an uptick in power demand.

Renewable energy generation, which fell by nearly a fifth in July, rose 2.3% in the first half of August. Solar-powered electricity production grew 19.3%, while wind-powered generation fell over 10%.

Power generation from coal - India's primary source of electricity - rose 4.2% in the first fifteen days of August, the data showed.

Coal India's fuel supply to power sector drops about 20% in AprilJuly State-owned Coal India's fuel supply to the power sector registered a decline of 19.5 per cent to 126.30 million tonnes (MT) in the April-July period of the ongoing fiscal in the wake of slump in coal demand.

Coal India Ltd (CIL) had despatched 156.86 MT

of fuel in April-July last year, according to the latest data of the coal ministry. The despatch of coal by CIL in July fell 12.4 per cent to 32.76 MT, from 37.41 MT supply in the corresponding month of the previous fiscal, it said.

The coal despatch by Singareni Collieries Company Ltd (SCCL) almost dropped by 47.2 per cent to 9.68 MT in the first four months of the current financial year, from 18.32 MT of fuel supplied in the corresponding period a year ago.

The coal supply by SCCL last month dropped to 2.40 MT from 4.33 MT in July 2019.

Demand for domestic coal is likely to be subdued in the second quarter of the current financial year due to lower demand from end-user industries amid the COVID-19 pandemic along with high inventory at power stations, India Ratings had said in a report.

Thus, coal offtake reduced in June 2020 yearon-year but improved month-on-month with the gradual relaxation in lockdown norms, it had said.

Coal Ministry's go-ahead for 100% supply to thermal power units by CIL Given the excessive coal stock available with Coal India Limited (CIL), the ministry of coal has approved the company’s plan to supply 100 per cent of the normative requirement of the thermal power units.

The ministry has recommended increasing the ‘annual contracted quantity’ (ACQ) of coal to 100 per cent of the normative requirement of a non-coastal plants. It was 90 per cent earlier.

The ACQ has been increased to 70 per cent for coastal plants.

The decision of the coal ministry pertains to coal supply both under long term agreement signed with CIL and coal supply linkage via the auction route. CIL periodically holds auctions of coal for the power and non-power sector for short-term and medium-term coal supply contracts.

This is in line with the recent Centre’s directive to reduce coal import. Last month, CIL launched a CCAI Monthly Newsletter August 2020

| 17

special category of e-auction of coal for those companies and traders which import coal to meet their requirements.

The company also informed the ministry that around 700 million tonne of coal would be available with CIL in the current financial year. It further said, the production from next financial year shall be as per the plans to achieve the 1 billion tonne coal production target by 2024.

Rs 68K crore of loans released under discoms liquidity package As much as Rs 68,000 crore worth of loans under Rs 90,000 liquidity package announced for the stressed power distribution utilities have been sanctioned so far which is expected to create buoyancy in the sector.

Finance Minister NirmalaSitharaman in May announced the Rs 90,000 crore liquidity infusion into cash-strapped discoms, facing demand slump due to the lockdown to contain COVID-19.

"State-run non-banking finance firms REC Ltd and Power Finance Corporation (PFC) have sanctioned loans worth about Rs 68,000 crore so far under the Rs 90,000 crore liquidity infusion package for discoms announced in May," a source said.

The loans under the package will be co-funded

by PFC and REC in equal proportion. The loans would be sanctioned in two equal tranches. The package was announced on May 13, 2020.

While announcing the package, the government had said, "At present the discoms have a total outstanding of Rs 94,000 crore towards power generation firms (gencos). However, later states demanded to expand the package to include outstanding dues towards power generation and transmission firms for the month of April and May as well.

Smart metering will improve discoms' efficiency, high cost a hurdle: Crisil 18 | CCAI Monthly Newsletter August 2020

Smart metering will help empower discoms by improving billing efficiencies and reducing leakages, however, the scale of financial investment required is a major roadblock in its path, according to a report.

India's traditional power metering system is inadequate, resulting in MBC (metering, billing and collection) inefficiencies, high commercial losses and revenue leakages, Crisil Ratings said in a report.

Smart metering could empower discoms by improving billing efficiencies, enhancing customer services and reducing leakages, thus enabling financially distressed discoms to maximise revenues, it added.

The report also noted that smart metering could also help meet the need for robust metering systems, given the rising dependence on renewable energy will result in a growing tribe of distributed generators with net metering requirements.However, it added that there are several stumbling blocks, including the scale of financial investment required.

While the need for smart metering provides an opportunity for domestic manufacturers, they will have to ramp up production to compete with cheaper Chinese imports, the report said.

Despite the benefits, only 3 million smart meters are operational in India compared with 270 million traditional meters, it said.

After 73 years of wait for power, 3 J&K villages along LOC on national grid Negotiating months of heavy snowing and the Covid-19 lockdown, the Kupwara district administration connected three villages located along the Line of Control in Jammu and Kashmir's Keran area to the national electricity grid, ending a wait since Independence for power supply.

The job was not easy, officials said, recalling the acute shortage of manpower for the work after restrictions were imposed following the abroga-

tion of Article 370 and the imposition of lockdown due to the Covid-19 pandemic It is an arduous five hours journey to Keran from here on a fair-weather road that meanders through apple and walnut orchards of the Kashmir Valley and the Pherkian Pass at 10,000 feet in the Shamasbari Ranges.

The job was not easy as the administration was faced with acute manpower shortage after the abrogation of Article 370 followed by seven months of snow in winters and the coronavirus pandemic, officials said.

Expressing confidence in the power sector’s revival, RK Singh said that the power consumption has gone up in 2020 despite coronavirus pandemic and shutdowns in activities. “We are already where we were (last year), despite the fact that we know all industries have not opened fully and, despite the fact that, in many parts of the country, there are still restrictions,” he said. In fact, it is expected that the pent up demand will release itself in coming months and the power consumption will grow again at the same rate as it was growing, if not faster.

Make in India renewable ener- Massive investment expected in gy to help government not just India’s power transmission segmeet, but exceed power target, ment by FY25 says minister Sabyasachi Majumdar, group head and senior While the nationwide lockdown hampered economic activities and caused a dip in power usage as well, the demand for energy will boom in coming months as economic activities start with full force.

vice-president (corporate ratings) of ICRA, said the Centre has lined up 14 transmission projects under the tariff-based competitive bidding (RBCB) route for evacuating power from 25-gigawatt RE projects.

While the nationwide lockdown hampered economic activities and caused a dip in power usage as well, the demand for energy will boom in coming months as economic activities start with full force. “Any apprehension that that demand will go down just no longer holds water as of now. I will say (the demand) will increase because the economy has not started full tilt as yet, and when it (does) … we are bound to grow,” Minister of Power and New and Renewable Energy RK Singh told. Further, the government will continue to push for Make in India in ramping up its renewable energy capacity despite it meaning a slowdown, if any, in adding to the country’s renewable capacity, he added. Meanwhile, the government is clear on its agenda to build power capacity and expects that it will not merely meet its target but also exceed it. “We believe that we have to switch over to renewables and we will not only meet our commitment, we will exceed it,” RK Singh said.

The domestic power transmission segment is expected to attract investments worth Rs 1.8 lakh crore in the next five years, according to a report by rating agency ICRA. It said evacuation infrastructure for renewable energy (RE) projects will drive investments in the power transmission segment.

It added that in line with a shift in policy focus from conventional sources (coal and gas) to renewable power sources (wind and solar), the focus of the transmission segment is towards augmenting infrastructure for evacuation of power generated by RE projects.

The government has also lined up another six projects in the intra-state segment, providing healthy pipeline for private sector players, he added. There is likely to be a slowdown in electricity demand and investments in the sector in 2020-21 amid the COVID-19-induced disruption but recovery is expected from 2021-22 onwards, he said.

CCAI Monthly Newsletter August 2020

| 19

Power Ministry proposes RPO for round the clock renewable energy Power Minister R K Singh has proposed renewable purchase obligation (RPO) mechanism for round the clock (RTC) renewable energy, which will promote storage of electricity in the country.

Under RPO, bulk purchasers like discoms, open access consumers and capacitive users are required to buy a certain proportion of renewable energy or RECs (renewable energy certificates) in lieu of clean energy.

Once the RPO is mandatory for RTC renewable energy, it would encourage investments in renewable electricity storage projects.

Solar capacity addition in Covidhit second quarter fell to a sixyear low of 205 MW Solar capacity addition in Covid-hit second quarter of 2020 fell to a six-year low of 205 MW, plummeting 86% year-on-year, a report by consulting firm Mercom India Research showed.

Large-scale installations accounted for 59%, while the rest was from rooftop projects.

Total power capacity added since January was 2.3 GW, out of which about 85% came from renewable energy. Coal-fired plants accounted for 13% of new projects in the first half of the year, while wind energy's share was 14%.Rajasthan and Karnataka together accounted for 68% of solar installations in the quarter, it said.

All India Solar Industries Association (AISIA) on Thursday urged the government to impose at least 50 per cent BCD (basic custom duty) on solar equipment for sustenance of domestic manufacturers.

AISIA in a statement said that following the coronavirus-related disruption, the Indian solar manufacturing sector has witnessed a major downfall with exports witnessing a decline.

"AISIA urges the government of India for immediate implementation of BCD for sustenance," AISIA said. It further added that, this is also the time when the government can further give impetus to the Prime Minister's Vocal for Local movement and help the local manufacturers strengthen their position in the domestic market.

While Safeguard Duty and the recent decision by the government to provide land near ports to set up manufacturing units has been a step in the right direction, solar manufacturers are imploring for an immediate respite, it said.

Greenko, NTPC partner for energy storage, flexible, despatchable RE power supply solutions Greenko Energies (Greenko) and NTPC VidyutVyapar Nigam Ltd. (NVVN), a wholly owned subsidiary of NTPC Ltd, have entered into a Memorandum of Understanding (MoU) to explore the possibility of development of Renewable Energy based round-the-clock (RTC), flexible and despatchable power.

Mercom pegs cumulative solar projects online at 37 GW, with an additional 42 GW under construction. Data from the Central Energy Agency (CEA) showed renewable energy generation fell 24% year-on-year.

This arrangement will be for the round-the-clock supply and be based on integration of renewable energy (RE) sources and Pumped Storage projects. The value proposition of the potential offering will be to meet the evolving bespoke requirements of Discoms and other power consumers in India in real-time.

AISIA urges government to impose 50% basic custom duty on solar equipment

Affordable energy storage is critical to the sustained growth of renewables, grid balancing and address limited generation flexibility in the Indian energy market.

20 | CCAI Monthly Newsletter August 2020

With Best Compliments From:

Sharda Ma

( )

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

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

DOMESTIC India plans deep cut in thermal coal imports in coming years

He said increasing local coal production would help to improve the economies of states in central India, where most coal mines are located.

India plans to significantly reduce its thermal coal imports in “the next few years” to save foreign exchange and create jobs through the development of existing and new coal blocks, a senior official in the federal coal ministry said.

Domestic coal demand may be subdued in Q2 on lower demand: Report

Coal is among the top five commodities imported by India, the world’s largest consumer, importer and producer of the fuel after China.

India spent 1.58 trillion rupees ($21.28 billion) on importing 247 million tonnes of coal, including 197 million tonnes of thermal grade, in the fiscal year to March 2020, M. Nagaraju, a joint secretary in the coal ministry, told a seminar.

“As per our assessment, we can actually substitute between 110-120 million tonnes of coal.

We will not be able to do this year, but certainly we will do in the next few years,” Nagaraju said, without giving more detail on the timeframe.

22 | CCAI Monthly Newsletter August 2020

Demand for domestic coal is likely to be subdued in the second quarter of the current financial year, due to lower demand from end-user industries amid the COVID-19 pandemic along with high inventory at power stations, according to a report by India Ratings.

The rating agency said domestic coal production remained subdued for the third consecutive month in June 2020 year-on-year as well as month-on-month due to low power demand and higher inventory at power stations.

Thus, the coal offtake reduced in June 2020 year-on-year but improved month-on-month with the gradual relaxation in lockdown norms,

the agency said.

for power generation

"Despite gradual relaxation in lockdown norms, demand over the second quarter of FY21 shall be further dampened by the onset of the monsoon season. Overall, domestic coal imports are also likely to be lower in Q2 FY21 year-on-year," it said.

Mines ministry comes out with reform proposals

According to IndRa, domestic coal imports are likely to have been lower in July 2020 due to the low domestic demand from end-user industries amid the COVID-19 outbreak. .

Commercial mining: UN secretary general expresses concern over ongoing coal auctions Expressing his concerns about the “continued support for fossil fuels in so many places around the world”, Guterres said that “we have seen countries doubling down on domestic coal and opening up coal auctions”.

After the government recently launched the maiden auction for 40 coal blocks for commercial mining, Antonio Guterres, secretary general of the United Nations, said that such a “strategy will only lead to further economic contraction and damaging health consequences”. While delivering the 19th Darbari Seth Memorial Lecture organised by Teri, Guterres said, “In India, 50% of coal capacities will be uncompetitive in 2022, reaching 85% by 2025.” He added that “the coal business is going up in smoke”. Expressing his concerns about the “continued support for fossil fuels in so many places around the world”, Guterres said that “we have seen countries doubling down on domestic coal and opening up coal auctions”.

The government has recently amended several rules to make the coal mines more attractive for private players in the upcoming auctions, and has offered some blocks falling in areas which had been earlier designated as ‘no-go zones’.

This would also be the first set of coal assets to be auctioned off for selling the fuel in the open market. The government estimates that the country will need 892 million tonne of the fuel in FY30 — around 40% higher than current levels —

The mines ministry has come out with a slew of reforms proposals, including amending the contentious provisions of 10A(2)(b) and 10A (2)(C) of the Mines and Minerals (Development and Regulation) Act, to pave the way for auctioning of around 500 potential leases stuck in legacy issues now.

Section 10A(2)(b) deals with leases where reconnaissance permit or prospecting licence were granted; while 10A(2)(c) relates to grant of mining leases (ML). The mines ministry has sought comments from the stakeholders on these proposals till September 3.

“These (blocks) can neither be granted because the time period to grant them is already over, nor can they be brought to auction because of legal impasse. These cases coming under section 10A (2)(c) of the Act which stood extinguished in January 12, 2017, as per the law, but are still litigated or pursued unnecessarily at various level, need to be brought to a closure to end the policy stalemate,” the ministry said in its proposal.

The cases coming under Section 10A (2)(b) of the Act are still disputed in the absence of a specific sun set clause in the Act, and they have not reached closure till date. Section 7 of the MMDR Act provides for maximum period of five years for completing the prospecting operations.

These amendments came in effect on January 12, 2015, and the maximum period of five year for prospecting has also lapsed on January 12, 2020. .

Coal India to create additional board level post to push business development The board of Coal India Ltd has approved creating an additional board level post in the PSU and its subsidiaries.

CCAI Monthly Newsletter August 2020

| 23

According to a Coal India report, the post of Director (Business Development) will be created to identify and develop new business opportunities.

"The board of directors...had approved creation of board level post of Director (Business Development) in CIL (Coal India) and its subsidiaries as per Companies Act, 2013, Listing Regulations and DPE guideline," the world's largest coal miner said in its latest report.

The business scenario in which CIL operates is rapidly changing globally in the current times.

To cater to futuristic business models, there is a need for an additional board level post that can drive the company's future business, increase its revenue, identify and develop new business opportunities, build and expand the presence of the company both locally as well as in the global markets, it said.

All the said tasks are strategic in nature and it can be managed only by a separate board level post to lead the organisation, as all other board level posts basically meet the existing functional needs of the organisation

are eligible for the freight concession presently.

This prompted CIL to approach the railways to seek distance-based freight concession in a bid to bring in more customers under the ambit of the import substitution scheme, the statement said.

Close to 70 per cent of CIL's overall supply consists of "G9 to G13" grades of coal for which the freight price is around 40 to 45 per cent of the total landed cost at consumption point.

For distance above 701 km the freight cost climbs up further. If concession in freight price is offered to customers falling in this range, it would be beneficial to coal producers to step up domestic supplies substituting imported quantities.

CIL's coal would then be competitive with the landed price of imported coal and customers may opt for domestic coal.

State Bank of India plans coalloan policy before key auctions, could put 41 mines in private Coal India seeks 15% concession hands from Railways for coal transpor- State Bank of India is creating a policy to lend to coal miners before landmark auctions that tation would end decades of state monopoly on the State-owned CIL said it has sought 15 per cent distance-based freight concession from Indian Railways for transportation of domestic coal to customers located at a distance of 701 to 1,400 km from its mines.

The move is aimed at broadening the client base and bring in more customers under import substitution plans, Coal India Ltd (CIL) said in a statement.

"Extension of freight concession also to customers located in 701 to 1,400 Km could result in substantial domestic coal lifted by them in place of coal sourced from abroad due to lesser cost in coal conveyance," a senior executive of the company said.

Out of 126 coal-based thermal plants linked with CIL, 14 plants located over 1,400 km distance

24 | CCAI Monthly Newsletter August 2020

fuel, according to a person with knowledge of the matter.

Long-term offtake contracts assuring demand will be central to any lending decision, the person said, asking not to be identified before terms are finalized. The nation’s biggest bank would prefer a loan tenor closer to five years, the person added.

The planned policy suggests SBI is open to providing some of the financing required to put 41 coal mines with a combined annual production capacity of 225 million tons into private hands.

The giant bank has flagged concerns about the sector, and Indian banks are reining in loans to corporate borrowers as the coronavirus pandemic pressures asset quality.

RAILWAYS

Indian Railways pulls freight traffic ahead of last year level On mission mode, Indian Railways achieved a significant milestone of pulling freight traffic ahead of last year's level despite of COVID-19 related challenges.

According to a release, on August 19, the freight loading was 3.11 million tonnes which is higher than last year for the same date (2.97 million tonnes). On the day Indian Railways earned Rs. 306.1 crore from freight loading which is Rs. 5.28 crore higher than last year for the same date (300.82 crore). In the month of August till August 19 the total freight loading is 57.47 million tonnes which is higher than last year for the same period (53.65 million tonnes). The Indian Railways earned Rs. 5461.21 crore from freight loading which is Rs. 25.9 Cr. higher than last year for the same period (5435.31 crore). NFR also managed to increase it goods earnings for the month of July to Rs. 178.37 crore which is significantly higher than last year's earning of Rs 143.40 crore during the same month. It may be noted that in line with the Prime Minister's call to improve logistics in the country, Indian Railways has been making huge strides in increasing the speed and volume of goods carried. The Indian Railways is going to promote Railways' freight service, making traders, businesses and suppliers aware of the benefits associated with transportation through Indian Railways.

STEEL

Steel firms set to raise prices from Sept on higher costs, global prices Steel companies are set to increase prices from September due to rising costs and higher international prices,

Jayant Acharya, director – marketing, commercial & corporate strategy at JSW Steel, said, the difference between domestic and international prices currently is about 8 per cent. “An increase in prices from September is on the cards. The amount will be decided, he added.

Acharya explained that iron ore prices were at a 6-year high. “International steel prices in August, too, have increased," he said.

The average FoB China for hot rolled coil (HRC) in April 2019 was $532 a tonne. At the beginning of August 2020, it was at $495 a tonne and currently is at Rs $515, indicating an increase of nearly $20 a tonne. However, the current price is yet to breach last year's April-level.

The increase from September could be in the range of Rs 2,000-3,000 a tonne. While a major primary steel producer said that an increase of Rs 3,000 a tonne in steel prices was being contemplated, a secondary steel producer, said that the increase could be Rs 2,000 a tonne. In the second quarter, so far, steel prices have increased by about Rs 3,000 a tonne.

Acharya said that demand was improving across the world and average sales in August were at par with pre-Covid-19 levels. However, prices were still not back to pre-Covid-19 levels of March.

India's crude steel output falls over 24 pc in July, global production shrinks 2.5 pc: worldsteel India's crude steel output fell 24.6 per cent to 7.150 million tonnes (MT) during July 2020, according to global body worldsteel. The country had produced 9.485 MT crude steel during the same month in 2019, World Steel Association (worldsteel) said in its latest report.

Global steel production also registered a fall during the month under review, the data showed.

"World crude steel production for the 64 countries reporting to the worldsteel was 152.694 MT in July 2020, a 2.5 per cent decrease compared to 156.679 MT in July 2019.

CCAI Monthly Newsletter August 2020

| 25

"Due to the ongoing difficulties presented by the COVID-19 pandemic, many of this month's figures are estimates that may be revised with next month's production update," it said.

While domestic steel producers have made steel lighter, stronger, and more heat resistant, he said the industry was working towards making it infection proof.

According to worldsteel data, China registered a 9.1 per cent year-on-year growth in its steel output at 93.359 MT during July 2020.

.

Help govt in providing low-cost homes for migrants: Pradhan to steel firms The Minister of Steel & Petroleum and Natural Gas Dharmendra Pradhan has appealed to steel industry leaders to partner the central government in providing low-cost housing for migrant labourers. The Covid-19-induced nationwide lockdowns have highlighted the poor housing arrangement for migrant labourers in urban regions, he said.

He said the government has set a target of providing 100,000 such houses, but the industry should build many more steel-intensive, lowcost houses, which will be a model for others to emulate.

Speaking at a webinar organised by the Ministry of Steel in association with the Confederation of Indian Industry on Atmanirbhar Bharat: Fostering Steel Usage in Housing & Construction & Aviation Sector, Pradhan said lower costs will make steel more lucrative for infrastructure development.

The domestic industry should focus on increasing volumes instead of excessive profiteering to boost the growth of the steel sector, he said.

Pradhan further added that there is no shortage of good-quality steel products in the country, and giving priority to indigenously produced steel will help the industry become a preferred destination.

Seshagiri Rao, joint managing director and group chief financial officer at Sajjan Jindal-led JSW Steel, who was at the webinar, said the government should support the steel sector in creating awareness about steel-use across sectors.

26 | CCAI Monthly Newsletter August 2020

Steelmakers hike prices by Rs 2,000 per tonne as demand improves Indian steel sector seems to be on the road to recovery with companies increasing prices by around Rs 2,020 per tonne across all products this month on the back of better demand and rising global prices, industry officials said.

This is the second hike in less than a month after companies raised the metal price by about Rs 745 per tonne in July.

Jayant Acharya, commercial and marketing director at JSW Steel attributed it to “a combination of global price hike, supply correction that has happened overall in the system, and a pentup demand as several segments are trying to make up for the lost quarters”.

V R Sharma, managing director of Jindal Steel & Power, said, “In June the demand was very low and there were no margins, thus the price hike is well absorbed.”

State-run Steel Authority of India said its bookings remain strong even after the recent price hike.

Domestic steel prices are following the international price trajectory that saw a strong recovery on increasing demand from China, said Anil Kumar Chaudhary, chairman of SAIL. Domestic demand is also on the rise.

Chhattisgarh CM urges PM to reconsider Nagarnar steel plant privatisation Chhattisgarh Chief Minister Bhupesh Baghel has written to Prime Minister Narendra Modi, urging him to revisit decision on privatisation of NMDC's under-construction steel plant in Nagarnar, Bastar.

In a letter to the prime minister, Baghel said the privatisation move will deeply hurt the expectations of lakhs of tribals and Naxalites might take undue advantage of the situation.

The country's largest iron ore miner NMDC, under the Ministry of Steel, is setting up its first steel plant with a capacity of 3 million tonnes per annum (MTPA) in Nagarnar. The plant was in the list of public sector enterprises lined up by the Department of Investment and Public Asset Management (DIPAM) for strategic divestment.

However, the proposal for strategic divestment of the steel plant was later deferred by an InterMinisterial Group for Divestment until the unit becomes operational.

CEMENT Cement demand to surge on the back of strong recovery from the rural segment, say analysts Higher agricultural income, a better-than-expected monsoon and pick up in the affordable housing segment will lead to a surge in India’s cement demand in the rural segment, analysts said.

Rural demand is likely to help contain the onyear drop in cement sales volume to 12-14% this fiscal as against an average annual growth of 6% during the last three fiscals, said analysts from rating agency Crisil in a sector research report.

“Demand recovery, however, has not been uniform across regions and bears a likeness to the intensity of the pandemic – East and Central regions are more resilient, while West and South are more impacted,”said, Crisil Research’s Director Isha Chaudhary.

Data shows a a V-shaped recovery in the cement sector from a sharp contraction of 85% seen in April to an estimated 7-10% growth by the fourth quarter.

Rural demand will also ride on a sharp rise in spending under the Mahatma Gandhi National Rural Employment Guarantee Act to engage migrant workers who have returned home following the Covid-19 pandemic.

UltraTech Cement expects subdued performance as economy slows down Leading cement maker UltraTech Cement expects a "subdued performance" in the wake of weak real estate and overall slowdown in the economy coupled with the impact of the coronavirus pandemic, according the company's annual report for 2019-20.

The nationwide lockdown, amid the coronavirus outbreak, will have a significant near-term impact on the cement industry, however, the Aditya Birla Group firm is "confident of its ability to weather the storm" and come out stronger given its healthy credit profile.

Besides, the company also expects "significant near-term impact" on the cement industry on account of the nationwide lockdown, amid the coronavirus outbreak, which disrupted the production, market and supply chain.

"Increase in government spends on health and public welfare; weak real estate and an overall slowdown in the economy is expected to reflect in a subdued performance of your company in the current financial year.

Nonetheless, given your company's healthy credit profile, it is confident of its ability to weather the storm and come out stronger, said UltraTech Cement in the Directors' Report and Management Discussion and Analysis'.

According to the company - with anticipated pick-up in private investment, financial sector reforms, resolution of stressed assets under IBC and positive interventions by the government, the outlook for fiscal 2020-21 was seen to remain largely positive.

CCAI Monthly Newsletter August 2020

| 27

GLOBAL Indonesia targets 609 MT coal Indonesia sets August HBA theroutput in 2021 mal coal price at $50.34/mt, Indonesia's government is targeting coal out- down 30.7% on year put of 609 million tonnes in 2021, up from this year's output target of 550 million tonnes, a senior energy ministry official told parliament.

Next year, the government is also targeting 441 million tonnes of coal exports, Ridwan Djamaluddin, director general of coal and minerals at the Energy and Mineral Resources Ministry said.

The energy minister ArifinTasrif in June said output in 2020 will likely be below target due to low demand.

28 | CCAI Monthly Newsletter August 2020

Indonesia's Ministry of Energy and Mineral Resources set its August thermal coal reference price -- also known as Harga Batubara Acuan, or HBA -- at $50.34/mt, down 3.5% on month and 30.7% on the year.

Receive daily email alerts, subscriber notes & personalize your experience.

The HBA is a monthly average price based 25% each on Platts Kalimantan 5,900 kcal/kg GAR

assessments, Argus-Indonesia Coal Index 1 (6,500 kcal/kg GAR), Newcastle Export Index (6,322 kcal/kg GAR) and globalCOAL Newcastle (6,000 kcal/kg NAR).

Germany launches first auction of coal-exit compensation payments

"The coronavirus pandemic has reduced some imported coal demand, while stockpiles remained high, with China and India prioritizing domestic coal procurements rather than making seaborne purchases," according to a ministry spokesman.

Coal power generation in Germany is coming to an end,” said JochenHomann.

China delays import licences for Australian coal China's commerce ministry has delayed issuing import licences for Australian coal and iron ore amid worsening trade relations between the two countries, although the move is likely to have only a limited impact on thermal coal because of reduced Chinese demand.

The issuing of import licences for Australian coal and iron ore now takes 11 days compared with one or two days previously, market participants told Argus.

But the impact on Chinese demand for Australian coal is likely to be limited, at least for the rest of this year, because the market is already muted because of expiring import quotas and delayed customs clearances for Australian coal.

An east China-based state-controlled utility and importer of Australian coal said that it has almost used up its entire import quota for all of 2020. The company plans to postpone any remaining cargoes that it had previously bought through term contracts with Australian producers once its quota expires.

Even without the quota issue, the delayed licensing is unlikely to significantly affect China's imports of Australian coal. Importers can apply for the licences when vessels start to load at Australian ports. As the sailing time is around two weeks, licences should be granted before cargoes arrive at Chinese ports.

The president of federal network agency the Bundesnetzagentur made the statement while announcing the first auction to determine compensation payments to coal plant operators under pending legislation designed to drive a national exit from the polluting fuel.

The agency said 4 GW of coal-fired generation capacity would be decommissioned as a result of the tender, which has a bidding date of September 1. Under the auction rules, the owners of hard coal plants and small-scale, brown-coalfired power sites will bid a sum per megawatthour of electricity generated by their facilities which reflects a compensation payment they will accept in return for not burning the fossil fuel.

Carbon savings The Bundesnetzagentur – which has excluded southern German facilities from the first round of the tender program to focus on more damaging hard coal plants – will also consider CO2 emission benefits from each bidding plant in the event of over-subscription of the tender.

Coal plant operators who lodge successful bids will receive a one-off payment of the amount of their bid multiplied by the historic production level of their facilities.

Tender rounds The law would enact several bidding rounds up to 2027 with all hard coal plants eligible to take part, together with small brown-coal plants, with a generation capacity of up to 150 MW. The Bundesnetzagentur’sHomann said: “The tenders create an incentive to quickly remove the most climate-damaging hard coal power CCAI Monthly Newsletter August 2020

| 29

plants. At the same time, security of [energy] supply remains guaranteed.” .

Coal-dependent Eskom calls for battery-power storage South Africa’s state-owned power utility, which relies on coal to generate most of the nation’s electricity, issued a request for bids to build its first battery-energy storage system, according to a tender document seen by Bloomberg.

Eskom Holdings SOC Ltd. has received funding from institutions including the World Bank and African Development Bank, which it will use for the project, the utility said in a request for bids issued July 31. The funding will include design and construction of the system at the Sere Wind Farm Facility in Western Cape province.

South Africa has plans to diversify its energy mix in a move away from coal, which is used for about 85% of the country’s power generation.

Eskom is specifically considering green funding to offset debt and to re-purpose coal plants.

Battery storage can save fuel costs and reduce grid congestion, according to the International Renewable Energy Agency. It can also balance a greater use of renewable sources that provide intermittent power.

The bids will close Sept. 11, according to the documents. The request refers to the Eskom Investment Support Project and Eskom Renewables Support Project.

South Africa sees worst power cuts on record in 2020, research shows South Africa has endured its worst power cuts on record this year, research by the country’s national science council showed.

30 | CCAI Monthly Newsletter August 2020

The power cuts by ailing state utility Eskom are one of the biggest challenges facing President Cyril Ramaphosa as he tries to revive investor confidence in Africa’s most industrialised economy.

Analysis by South Africa’s Council for Scientific and Industrial Research (CSIR) found that 1,498 Gigawatt hours (GWh) of energy had been shed so far in the first eight months of 2020, more than 1,352 GWh in the whole of last year and 1,325 GWh in 2015, the previous two worst years on record.

The CSIR estimates planned power cuts, known locally as load-shedding, cost the economy up to 120 billion rand ($7.2 billion) last year.

Eskom generates more than 90% of South Africa’s power but has struggled to meet demand for years because of faults at its coal-fired power stations. Some of these stations have not been properly maintained and two new ones have been hobbled by design flaws.

Ramaphosa has promised to break up Eskom to make it more efficient and has granted it a series of mammoth bailouts to stabilise its finances, but its problems have persisted.

Eskom last implemented planned power cuts last week

Whitehaven profit slumps 95% as Australia's coal prices collapse Whitehaven, one of Australia's largest coal miners, has seen its profits nearly wiped out as coal prices collapse around the world.

Following a record-breaking result a year earlier, Whitehaven's earnings have crashed 95 per cent from $564.9 million to $30 million in the year to June 30, causing investors to flee. Whitehaven's shares tumbled 18 per cent to finish the day at $1.02, its lowest level in several years.

A growing number of global fund managers are pledging to exit their investments in thermal coal.

The profit crash comes as the virus-driven economic downturn weighs on global energy demand and prices of coal, one of Australia's largest export commodity exports. The benchmark price for top-quality New South Wales thermal coal exports has fallen from $US68 a tonne to $US55 in the June quarter, well below the yearly average of nearly $US100 a tonne in the 2019 financial year.

Whitehaven chief executive Paul Flynn said he was seeing "signs of life" in the export market and believed the worst of the price falls could be over for metallurgical coal – the coal used in steelmaking – but he could not predict how much longer the price pressure would last.

"The crystal ball is a little foggy in that regard," he said. "And no matter how much you'd like to polish it, I think it's not going to be any clearer in the short term."

Although Whitehaven itself does not sell coal into China, Mr Flynn said the thermal coal market was being affected by Chinese government policies to avoid Australian coal.

South32 to lift 2020-21 Australian coking coal output Australian mining firm South32 plan to produce 6.4mn t of metallurgical coal from its mines in the Illawarra region of New South Wales in the 2020-21 fiscal year to 30 June before easing back to 6.3mn t in 2021-22, which are up from the 5.55mn t produced in 2019-20.

Operating costs at Illawarra are forecast to fall to $84/t in 2020-21 from $93/t in 2019-20, which are down from $142/t in 2017-18. The firm also expects sustaining capital expenditure to fall to $150mn in 2020-21 from $185mn in 2019-20 as underground mine development

drops following substantial investment previously.

Thermal coal production from the Illawarra mines is forecast to drop to 1.3mn t in 2020-21 and to 1mn t in 2021-22, down from 1.46mn t in 2019-20.

South32 plans to lift metallurgical coal production from the Illawarra mines to 7.6mn t/yr beyond 2021-22

Coking coal prices may rise slowly after breaching marginal costs: sources All signs point to coking coal prices moving up, at least eventually, according to coal market executives and analysts.

Receive daily email alerts, subscriber notes & personalize your experience.

Met coal demand is recovering, especially in India, and some Australian and US supply has fallen this year, leaving the market in better shape as benchmark prices fell below marginal cost.

The Platts TSI Premium HCC price settled around their lows at $107/mt FOB Australia this week, averaging just below $133/mt FOB for the year to date, and compared with $157.30/mt a year earlier.

Bank of America this month revised down hard coking prices for 2020 to $126/mt FOB, from $129/mt. This would imply imply prices for the rest of the year averaging around $115.75/mt, based on S&P Global Platts calculations.

Met coal prices are "geared to world-outsideChina steel production," and affected by soft demand, Bank of America said, noting expectations for a recovery in demand in the medium term.

The latest BHP spot trade this week pricing Peak Downs premium coal at just below $109/ mt FOB Hay Point may reflect the seaborne market is still searching for a bottom, ahead of CCAI Monthly Newsletter August 2020

| 31

a stronger global economic recovery, a coal mining executive said.

US miner Warrior Met coal said in a quarterly report Aug. 5 that it may be "premature to forecast when the economies of the countries in which its customers are located will reopen on a sustained basis and lead to a return to more normalized demand for met coal."

Global miner Peabody Energy's CEO Glenn Kellow during an Aug. 5 call with analysts highlighted uncertainty persisting in the met coal market and tough conditions for miners. Peabody cited low demand and volumes in the second quarter translating into high unit met coal costs, above current spot prices.

Sri Lanka imposes daily electricity cuts after nation-wide power outage Sri Lanka's electricity board decided to impose one-hour power cut daily for a period of four days to meet the shortfall caused by the breakdown of a major power plant that led to a nationwide power outage.

A massive power outage hit Sri Lanka, plunging the entire country into darkness for around seven hours and disrupting essential services and businesses following a technical failure at Chinese built Norochcholai coal power plant in the north western region.

The state power entity Ceylon Electricity Board (CEB) said power cuts have been introduced as a measure to meet the shortfall caused by the breakdown of the coal power station.

"We are short of about 300 mega watts and to meet this shortage there will be power cuts lasting for an hour from 6 pm till 10 pm based on 4 zones", VijithaHerath the chief of the CEB told reporters.

The Norochcholai coal power plant is currently off-grid due to a rise in the temperature and requires to be reset after the temperature drops to the assigned level, he said.

32 | CCAI Monthly Newsletter August 2020

Petroleum coke price strength bolsters demand for coal Firmness in global petroleum coke prices has bolstered industrial demand for seaborne coal in Asia-Pacific, and the trend could expand to other regions should coal continue to hold competitiveness.

The two fuels typically compete for industrial users, mainly cement makers, but also in other sectors such as iron and steel.

But the fundamentals of each commodity have moved in opposite directions, working to coal's advantage. Coal supplies remain abundant amid high stocks, and as supply could not adjust to the weaker demand environment in the second quarter because of the Covid-19 slowdown.

Conversely, coke availability has tightened significantly over the same period because of lower runs at refineries. Refineries in the US — the world's largest producer and exporter of coke — have been running at 70-75pc utilisation rates even after demand for crude and products started to gradually recover in the second quarter, and are expected to remain at similar levels for at least a few more months. This has significantly reduced spot coke availability in the market, lifting the US Gulf coast 6.5pc fob coke price to one-year highs.

One refiner estimates that there is 300,000350,000t of coker feed out of the US market at current utilisation rates, which translates to a 15,000t/d decrease in coke production, or 450,000t less output per month — equivalent to nine or 10 standard cargoes. And as spot coke availability remains tight, refiners report buying interest at least four to five times higher than cargo availability. This is primarily demand from users with less flexibility to switch fuels.

Further on the upside, a sharp rise in freight rates has supported delivered coke prices to key consuming regions, namely Asia-Pacific, the Mediterranean and Latin America.

MONTHLY SUMMARY OF IMPORTED COAL & PETCOKE

Coal Price Index COAL

(kcal/kg)

Monthly Price - FOB

Monthly Price- FOB

Monthly Change (USD)

South Africa

6000 NAR

USD55.30

INR 4121

0.54

South Africa

5500 NAR

USD 41.82

INR 3115

3.33

Australia

5500 NAR

USD 36.57

INR 2725

-1.52

Indonesia

5000 GAR

USD 36.68

INR 2749

-0.01

Indonesia

4200 GAR

USD 23.31

INR 1737

-1.06

USA

6000 NAR

USD 49.70

INR 3725

-0.22

Indicative Pet Coke Price PET COKE

Sulphur

Price

Monthly Change (INR)

India-RIL(Ex-Ref.)

-5%

INR 7268

1053.00

Saudi Arabia (CIF)

+ 8.5%

INR 5829 ($78)

223

USA (CIF)

- 6.5%

INR 6127 ($82)

342

Exchange Rate

Change (Monthly)

INR 74.51

0.43

Indicative Coking Coal Price Premium Low Vol Current Month

Monthly Change (USD)

HCC 64 MID Vol

Semi Soft

CFR China FOB Aus

Low Vol PCI

Mid Tier PCI

FOB Aus

FOB Aus

CFR India

FOB N China

MET COKE 62% CSR

FOB

CFR China

FOB Aus

106.94

118.15

86.10

98.88

61.47

66.44

64.44

255.75

272.12

-5.79

-6.23

-4.47

-2.95

0.31

-3.22

-2.97

1.15

1.52

South African Coal News: * South Africa’s thermal coal exports in the first half of 2020 fell 9% amid a sharp downturn in demand from the country’s main customer, India, customs data showed. Seaborne shipments by the world’s fourth-largest thermal coal exporter totalled 34.9m tonnes, with June loadings down 6.5% on the year at 6.2m tonnes. India remained the largest customer, accounting for 40% of the first-half export total, but shipments were still down sharply, by 36% to 14.1m tonnes.

34 | CCAI Monthly Newsletter August 2020

Australian Coal News:

*Australia's thermal coal exports during January-June were slightly ahead of the same period in 2019, although the outlook for the second half is for lower sales as mining firms react to loss-making weaker prices. Australia exported 17.67mn t of thermal coal in June, up from a revised 15.95mn t in May but down from 18.07mn t in June 2019, according to data from the Australian Bureau of Statistics (ABS).

* Whitehaven, one of Australia's largest coal miners, has seen its profits nearly wiped out as coal prices collapse around the world.

Following a record-breaking result a year earlier, Whitehaven's earnings have crashed 95 per cent from $564.9 million to $30 million in the year to June 30.

Indonesian Coal News:

*An imbalance between Indonesian coal output and sales during January-July has raised the prospect of a supply glut, which could put even more pressure on coal prices that are already hovering near all-time lows. Indonesia produced 324.4mn t of coal at an average rate of 46.3mn t/month during January-July, according to energy ministry figures. This was slightly ahead of the necessary 45.8mnt/month pace needed to achieve the government's 550mn t annual target. *Indonesia's government is targeting coal output of 609 million tonnes in 2021, up from this year's output target of 550 million tonnes, a senior energy ministry official told parliament.

Next year, the government is also targeting 441 million tonnes of coal exports.

US Coal News:

*US coking coal prices tracked downwards in August, weighed down by the absence of spot demand in Europe and continued weakness in Asia-Pacific. Recent assessment for low-volatile coking coal edged down by 50¢/t to $102.50/t, as limited interest has pushed down market indications. The high-volatile assessment fell by $1.50/t to $106.50/t, retaining a substantial spread with high-volatile B, which is stable today at $89/t after a significant drop at the end of last week. *US coal stocks have raised to three-year highs amid unexpectedly weak domestic and export

demand, the country’s Energy Information Administration (EIA) said. “After reaching their lowest level in more than a decade in March 2019, US coal stockpiles steadily increased to 152m tons (137m metric tonnes) in April 2020,” it said in a note.

Russian Coal News:

*Russian coal exports in August jumped 5% on the year to a multi-year high amid some increased demand and efforts to shift surplus stocks. Last month’s total of 0.577m tonnes/ day – for all coal types – was 2.7% higher than in July 2020.

Pet Coke News: *Firmness in global petroleum coke prices has bolstered industrial demand for seaborne coal in Asia Pacific, and the trend could expand to other regions should coal continue to hold competitiveness. The two fuels typically compete for industrial users, mainly cement makers, but also in other sectors such as iron and steel. * Pet coke trade remained thin in India in August 2020, as the buyers preferred high CV thermal coal as an alternative. A relatively high bid ask spread coupled with rising ocean freight rate impacted the seabourne petcoke market.

Shipping Update: * Systemic declines for coal plus a sluggish energy market contributed to an almost 18% decline in U.S. carloads in July, according to the Association of American Railroads (AAR). U.S. carload volumes in July totalled 1.04 million, down 17.6% from July 2019, while intermodal volumes slipped 1.4% to nearly 1.3 million containers and trailers. Total U.S. traffic was 2.34 million carloads and intermodal units, a 9.3% drop from July 2019.

CCAI Monthly Newsletter August 2020

| 35

36 | CCAI Monthly Newsletter August 2020

53.18

74.03

69.88

49.01

14

13

JUNE- 2020

1,330,000.00

7,230.00

ACTUAL*

NUCLEAR

Source CEA

43,880.00

140,357.00

PROGRAM

283,868.44

THERMAL

Category

TOTAL

0.00

HYDRO

BHUTAN IMP

6,780.00

45,699.22

NUCLEAR

2

1,138,533.00

1

231,389.22

TARGET APR 2020 TO MAR 2021

Monitored Capacity (MW)

THERMAL

Category

SUMMARY- ALL INDIA

103,403.93

1,640.25

19,356.02

3,524.85

78,882.81

4

ACTUAL

85.23

51.36

15

ACTUAL SAME MONTH 2019-20

5

106,200.23

1,187.40

19,928.38

4,302.32

80,782.13

92.80

183.06

101.70

86.71

90.22

6

% OF PROGRAM (4/3)

67.83

61.25

16

PROGRAM

73.53

48.46

17

ACTUAL

79.56

59.17

18

ACTUAL SAME PERIOD 2019-20

APRIL 2020 - June-2020

PLANT LOAD FACTOR (%)

111,423.00

896.00

19,033.00

4,065.00

87,429.00

3

PROGRAM

ACTUAL SAME MONTH 2019-20

AUG-2020

AN OVERVIEW

97.37

138.14

97.13

81.93

97.65

7

% OF LAST YEAR (4/5)

583,682.00

4,029.00

72,189.00

17,345.00

490,119.00

8

PROGRAM

GENERATION (GWH)

PERIOD : JUNE, 2020

489,361.54

5,437.35

78,441.76

18,305.71

387,176.72

9

ACTUAL

553,865.02

2,980.80

75,203.47

19,806.24

455,874.51

10

ACTUAL SAME PERIOD 2019-20

83.84

134.96

108.66

105.54

79.00

11

88.35

182.41

104.31

92.42

84.93

12

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

APRIL 2020 -AUG-2020

ENERGY GENERATION REPORT

OVERALL DOMESTIC COAL SCENARIO Coal Production (in MT) Company

July, 2020

July, 2019

% Growth

April-July, 2020

April-July, 2019

% Growth

CIL

37.36

38.51

-3.0%

158.37

175.46

-9.7%

SCCL

2.85

5.15

-44.6%

12.35

22.23

-44.4%

% Growth

April-July, 2020

April-July, 2019

% Growth

Overall Offtake (in MT) Company

July, 2020

July, 2019

CIL

43.39

46.59

-6.9%

164.02

200.09

-18%

SCCL

2.90

5.12

-43.3%

11.38

21.96

-48.2%

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

July, 2020

July, 2019

% Growth

April- July, 2020

April-July, 2019

% Growth

CIL

32.76

37.41

-12.4%

126.30

156.86

-19.5%

SCCL

2.40

4.33

-44.6%

9.68

18.32

-47.2%

Spot E-auction of Coal (in MT) Company

Coal Qty. Allocated July, 2020

Coal Qty. Allocated July, 2019

Increase over notified price

Coal Qty. Allocated April July, 2020

Coal Qty. Allocated AprilJuly, 2019

Increase over notified price

CIL

3.20

0.05

2%

7.94

6.70

1%

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

Coal Qty. Allocated July, 2020

Coal Qty. Allocated July, 2019

Increase over notified price

Coal Qty. Allocated AprilJuly, 2020

Coal Qty. Allocated AprilJuly, 2019

Increase over notified price

CIL

3.20

0.05

2%

7.94

6.70

1%

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

Coal Qty. Allocated July, 2020

Coal Qty. Allocated July, 2019

Increase over notified price

Coal Qty. Allocated AprilJuly, 2020

Coal Qty. Allocated AprilJuly, 2019

Increase over notified price

CIL

0.32

0.00

8%

6.97

2.20

3%

Special Spot E-auction (in MT) Company

Coal Qty. Allocated July, 2020

Coal Qty. Allocated July, 2019

Increase over notified price

Coal Qty. Allocated AprilJuly, 2020

Coal Qty. Allocated AprilJuly, 2019

Increase over notified price

CIL

0.33

0.00

1%

1.79

0.00

10%

CCAI Monthly Newsletter August 2020

| 37

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

AUG'20

APR'20 - AUG'20

ACTUAL ACTUAL THIS SAME % YEAR PERIOD GROWTH LAST YEAR

ACTUAL THIS YEAR

ACTUAL SAME PERIOD LAST YEAR

% GROWTH

ECL

2.66

3.21

-17

15.24

18.03

-15.5

BCCL

1.68

1.81

-7.5

8.08

9.95

-18.8

CCL

3.77

3.89

-2.9

15.44

19.33

-20.1

NCL

9.27

8.61

7.6

44.28

43.34

2.2

WCL

1.58

1.61

-2.2

13.99

15.7

-10.9

SECL

8.41

8.83

-4.8

45.19

53.48

-15.5

MCL

9.81

6.73

45.6

53.29

50.23

6.1

0.04

0.08

195.54

210.15

NEC CIL

0.01 37.17

34.7

7.1

-7

OFFTAKE (Figs in Mill Te) SUB CO.

AUG'20

APR'20 - AUG'20

ACTUAL ACTUAL THIS SAME % YEAR PERIOD GROWTH LAST YEAR

ACTUAL THIS YEAR

ACTUAL SAME PERIOD LAST YEAR

% GROWTH

ECL

3

3.32

-9.8

16.25

19.78

-17.9

BCCL

2.29

2.07

10.4

7.98

11.94

-33.2

CCL

4.94

5.19

-4.8

20.97

28.35

-26

NCL

9.23

9.11

1.3

40.72

43.3

-6.0

WCL

2.96

2.98

-0.5

15.29

21.16

-27.7

SECL

10.43

9.69

7.6

51.29

59.35

-13.6

MCL

11.5

8.2

40.40

55.77

56.61

-1.5

0.09

0.16

44.34

40.57

9.3

208.36

240.65

NEC CIL

0.01

38 | CCAI Monthly Newsletter August 2020

-13.4

CCAI Monthly Newsletter June 2020

| 39

REGISTERED

40