Domestic

CARE Ratings: Expect coal production to grow by 2-3% at 730745 mt in FY22

CARE Ratings in its latest coal update expects production to grow by 2-3% in the financial year FY22. India's coal production has risen by 19.3% yoy to 54.4 million tonnes (mt) in July 2021 over a low base.

The country's coal despatch increased by 21.7% yoy to 62.3 mt in July due to higher demand from the power and the cement sector.

"Demand for both thermal and coking coal is expected to remain strong as global economic activities improve after the covid-19 downturn in the second half of CY2021," CARE added. Further, CARE said that the "sharp uptrend in seaborne coking coal prices during the June quarter is likely to continue and we expect stronger prices in the second half of CY2021 as the global supply-demand balance continues to remain tight."

India faces twin challenges of decarbonising power sector, meeting rising energy demand: Coal Minister

The Indian economy faces twin challenges of fulfilling its commitments for decarbonising the energy sector as well as meeting the country's rising power demand, which would primarily be

reliant on coal due to its affordability and indigenous availability, the coal ministry said.

India's coal sector has to play a crucial role in the foreseeable future in fulfilling the country's energy demand for meeting various developmental needs, and at the same time, be responsible towards environment and society, the ministry said in a statement.

Against this backdrop, India's coal sector has been taking several innovative initiatives to promote sustainable mining.

One of the key initiatives has been 'Go Greening' drive in and around mining areas, thereby not only ameliorating the local ecosystem but also creating additional carbon sink to mitigate the causes of climate change. Further, coal companies are also aiming to achieve carbon neutrality through various environment-friendly measures, such as extensive plantation and adoption of clean coal technologies.

India exports 8 lakh tonnes of coal to neighbouring countries in FY’21

India exported 8 lakh tonnes of coal to its neighbouring nations, including Nepal, in the fiscal year ended March 2021. Of the said quantity, the maximum 77.20 per cent was exported to Nepal, followed by 13.04 per cent to Bangladesh, according to the Coal Ministry’s Provisional Coal Statistics 2020-21. To bridge the demand and supply gap as well as to provide high quality coal for use in various industries, the country has no option but to resort to import of coal, especially low-ash coal. In FY’21, import of raw coal of the country was 214.995 MT valued at Rs 1,16,037.2 crore against import of 248.537 MT valued at Rs 1,52,732.1 crore in 2019-20.

Thus, in the year 2020-21, import of coal decreased by 13.50 per cent over the previous year.

Coal India expects to increase in average price realisation in Q3FY22

Coal India Ltd (CIL) is expecting around 10-15 per cent increase in average price realisation on a sequential basis through the e-auction route in Q3FY22. The average price realisation is expected to be close to 1,700-1,800 a tonne in Q3 this fiscal as compared with ₹1,569 a tonne in Q2.

The country’s largest miner is also contemplating an increase in coal prices and is in talks with stakeholders for the same.

According to Pramod Agarwal, Chairman and Managing Director, CIL, the average realisation in the June quarter was about 10 per cent more than the notified tariff. However, the company has been getting 30 per cent over its notified price in August.

CIL expects premiums to increase further in the third and fourth quarter of this fiscal, because of the firming up of international coal prices.

Depending on the demand situation, CIL injects a reserve price, which is basically the floor price, over and above the notified price, at which the auctions begin. This is done based on the kind of response received at e-auctions and the amount of premium garnered. An improvement in premiums over notified value is expected to boost the company’s bottom line. Coal sold through e-auction route accounts for around 15-16 per cent of the total volume of coal sold.

Coal India's capex growth zooms twofold to Rs 1,840 cr in Q1

State-owned CIL on Friday said its capital expenditure jumped more than twofold to Rs 1,840 crore in the first quarter of 2021-22 compared to Rs 844 crore in the year-ago quarter. Coal India in a statement said the capital expenditure rose twofold in the first quarter of FY22 as it continues to step up investments in

evacuation infrastructure, land acquisition and procurement of heavy equipment.

CIL has achieved 94 per cent of the progressive target of Rs 1,960 crore, set for April-June quarter of the ongoing fiscal.

Underscoring the intent on strengthening evacuation infrastructure like setting up rail sidings and corridors, coal handling plants, (CHP), silos and haul roads CIL's capex has risen to Rs 504 crore on this account, the second highest among all capex heads.

This is a quantum leap of 109 per cent over the first quarter of FY21 when the capex spend on these infra projects was Rs 241 crore.

CIL gets high premium from eauction sales to coal importers

Coal India’s (CIL) special spot e-auction meant exclusively for coal importers fetched the company a 52% add-on over the notified price for the April-June period this fiscal, owing to soaring international prices that touched an average $146 per tonne across categories as of Thursday.

Almost the entire 1.6 million tonne offered to coal importers in July was booked, giving an impetus to CIL to offer more quantity in this category.

The increasing cost of coal sourced from overseas meant that coal importers booked 70% of the 2.4 MT offered to them under the special spot e-auction during April-July.

E-auction bookings across all five windows for the first quarter fetched the PSU miner `4,700 crore, with 30.2 MT sold via e-auction as against 15.9 MT booked during the same period last fiscal. Revenue from e-auction sales witnessed a year-on-year jump of 87%, a CIL executive said.

At 35.5 MT, the company’s e-auction allocation in the first quarter under all five auction categories was higher by nearly 8 MT or 28.6% than the allocation in the same period a year ago.

Coal India’s improving realizations add to investor optimism

Coal India's performance for the June quarter came in line with expectations, being helped by the rise in power demand. The company saw its sales volume for supplies under the fuel supply agreement (FSA), rise 25% year-on-year to 127.5 million tonnes. It supplies majority of its produce to the power sector.

With good demand, FSA realizations were also up 3% year-on-year at ₹1,394 per tonne. Rising e-auction volumes, which were up 90% yearon-year to 30.2 MT, accrued further benefits and cushioned the impact of sequential decline in FSA volumes from 139.2 MT. The strong demand pulling up e-auction volumes and e-auction realization came at ₹1,569 per tonne.

Revenue was up 37% y-o-y and 6% ahead of the estimate of analysts at Motilal Oswal Financial Services Ltd. They said that the marginal beat on our estimates was on account of a better e-auction mix in volumes. Adjusted Ebitda (exOBR) was up 64% year-on-year, in line with estimates. The year-on-year jump in Ebitda comes on the back of volume growth, led by a recovery in power demand said MOFSL.

New players take lead in commercial coal auction

Into the third day of the commercial coal auction which is into its second phase, saw newer players take lead in bidding for coal blocks. For the three mines offered on Wednesday, Prakash Industries Ltd, CG Natural Resources Private Ltd and Shreesatya Mines Private Ltd were successful bidders.

Prakash Industries quoted a premium of 55.7 per cent for Bhaskarpara mine in Chhattisgarh, the highest bid of the day. Shreesatya Mines quoted 54.5 per cent premium for Burakhap mine in Jharkhand. CG quoted 4 per cent premium for Khargaon mine of Chhattisgarh.

A record high bid of 79 per cent premium was quoted by Sunflag Iron & Steel Company for the Bhivkund mine in Maharashtra.

Coal ministry has put 19 mines for auction in the second round of the auction. Out of the total mines, 10 are fully explored, 9 are partially explored mines. There are four coking coal mines and the balance 15 mines are non-coking coal mines.

States get Rs 7,930-cr royalty from coal mining in Apr-Dec 2020

A total royalty of Rs 7,930.61 crore was provided to states from coal mining during AprilDecember 2020, Parliament was informed.

A royalty of Rs 2,102.01 crore went to Jharkhand, followed by Rs 1,575.73 crore to Chhattisgarh, Rs 1,489.44 crore to Madhya Pradesh, and Rs 1,165.48 crore to Odisha, Coal Minister Pralhad Joshi said in a written reply to a question in the Rajya Sabha.

A total royalty of Rs 12,962.92 crore was paid to states during 2019-20, Rs 14,746.11 crore during 2018-19, Rs 13,126.03 crore during 201718, Rs 11,227.14 crore during 2016-17, and Rs 10,736.7 crore during 2015-16, the minister said.

The 10 states that were provided royalty are Chhattisgarh, Jharkhand, Odisha, Madhya Pradesh, Maharashtra, Telangana, West Bengal, Assam, Uttar Pradesh and Meghalaya.

Coal India arm Northern Coalfields Ltd dispatches 3.87 lakh tonnes of highest-ever coal in single day

Coal India arm Northern Coalfields Ltd dispatched the highest ever coal in a single day on August 27, the coal ministry said.

“On 27th August, 2021 the company’s offtake grew to a whopping 3.87 lakh tonnes,” the coal ministry said in a statement.

Northern Coalfields Ltd (NCL) also sent the highest ever, 38 coal rakes of Indian Railway to upcountry coal consumers of Rajasthan, Uttar Pradesh, Haryana, Gujarat, Delhi, and other states fulfilling the energy requirements of the country in this pandemic time.

In FY’21, NCL dispatched over 87 per cent of its coal through these modes of transportation. In a pro-environmental step, 24 per cent reduction in coal transportation from the road was seen in the last fiscal.

Singareni Collieries logs 102% growth in July coal production

The Singareni Collieries Company Limited (SCCL) has had good coal production and dispatch numbers during July 2021 and April to July this fiscal.

Against the target of producing 47.56 lakh tonnes (lt), Singareni achieved 48.67 lakh tonnes with a growth of 102.34 per cent against 28.5 lakh tonnes achieved in the Covid-hit July last year.

Singareni dispatched 50.29 lakh tonnes of coal against the target of 45.56 lt with a growth rate of 110.39 per cent. Last year July, it had dispatched only 28.5 lt.

In the removal of overburden (OB) at the Open cast Mines (OCPs) it achieved 296.16 lakh cubic meters of OB as against 195.2 lakh cubic meters in July last year.

The company achieved coal production of 204.36 lakh tonnes during the last four months this year as against 123.5 lakh MT last year. The coal dispatch was 217.25 lt this year when compared to 113.8 lt last year.

Aluminium companies say coal curtailment brought industry to standstill

Aluminium companies have said drastic curtailment of coal supplies by Coal India Ltd (CIL) without advance notice have brought the industry to a standstill as it has been left with no time to devise any mitigation plan to continue sustainable operations.

Coal India Ltd (CIL) has significantly reduced coal supplies and railway rakes for captive power plants (CPPs), resulting in coal crunch for the aluminium industry, Aluminium Association of India said in a press statement.

“Aluminium is a metal of strategic importance and an essential commodity for diversified sectors, crucial for the nation’s economy. Aluminium smelting requires uninterrupted and highquality power supply for production which can be met only through in-house CPPs,” it said.

The Aluminium industry CPPs have signed Fuel Supply Agreements (FSAs) with CIL and its subsidiaries for assured long-term coal supply. Any abrupt stoppage of this secured coal supply has a severe impact on the SMEs in the downstream sector resulting in increased prices of finished products and burdening end consumers.

STEEL

PLI scheme for specialty steel a game changer, to boost domestic output: Govt

The production-linked incentive (PLI) scheme for specialty steel will prove to be a “game changer” for the industry as the move is expected to increase the output of value-added steel and see introduction of new age technologies in the sector, Union minister Faggan Singh Kulaste has said.

On July 22, the Union Cabinet chaired by Prime Minister Narendra Modi approved the Rs 6,322-crore PLI scheme to boost production of specialty steel in India, attract fresh investments and create new job opportunities in the sector.

The scheme aims to attract an additional investment of about Rs 40,000 crore and lead to a capacity addition of 25 million tonnes (MT), besides generating 5.25 lakh job opportunities.

On the issues being faced by the domestic steel sector, Minister of State for Steel Kulaste told PTI, “The challenge is to develop Indian steel sector as more efficient, competitive and (to be) capable of producing quality steel including value-added steel… (as also) enhance per capita steel consumption.”

Further, other focus areas are availability of raw material at competitive price and to be a world leader in energy efficiency and sustainability, he added.

Tata Steel commissions first steel recycling plant in Haryana

The steel major has commissioned its new 0.5 MnTPA steel recycling plant at Rohtak, Haryana.

The plant has been set up in collaboration with Aarti Green Tech, as a 'Build, Own, Operate' (BOO) partner. The plant is equipped with modern & mechanised equipment such as shredder, baler, material handler etc. The scrap would be procured from various market segments such as end-of-life vehicles, obsolete households, construction & demolition, industrial etc., through an app called FerroHaat.

The scrap would then be processed through mechanised equipment and the processed

scrap would be supplied for downstream steel making. The steel produced through the recycled route entails lower carbon emissions, resource consumption & energy utilisation.

SAIL Plans Next Phase Of Expansion In 2023-24, To Double Its Crude Steel Production Capacity To 50 MT Per Annum

The Steel Authority of India (SAIL) will undertake expansion plans and accordingly augment its total installed crude steel production capacity by more than two times to 50 million tonne per annum (MTPA) in the coming 15-18 months.

As of now, the government-run entity is rounding up a modernization program worth Rs 70,000 crore that will increase its capacity to 21.4 MTPA.

The aforementioned proposed expansion plan will kick off in 2023-24 and the overall capacity will be enhanced by 12-14 MTPA at its units in Rourkela, Bokaro and Burnpur (IISCO) in the first phase.

SAIL seems to be working towards realising the National Steel Policy’s target of building an installed capacity of 300 MTPA by 2030-31.

In fact, the steel production company has already done its land surveys in Rourkela and Bokaro. It also has certain land parcels available in order to carry out a brownfield expansion.

CEMENT

India’s ever-expanding cement capacity

Dalmia Bharat managing director Puneet Dalmia characterised India’s cement industry as one of ‘many regions and many players. It is equally an industry of many plants – which are seemingly larger and more numerous by the week.

Orient Cement announced an investment of US$215m to increase its Devapur, Telangana, cement plant’s capacity by 53% to 11.5Mt/yr from 7.5Mt/yr. Another Southeast Indian producer, Ramco Cements, plans to invest a total of US$135m in upgrades in the 2022 financial year; it completed US$53.9m (40%) of the planned investments in the first quarter alone.

Nationally, investments in on-going cement plant projects total US$1.81bn. What is remarkable here is the continued drive to expand despite existing overcapacity. Puneet Dalmia estimates that Indian capacity utilisation will be 70% in 2021. Despite this, his company plans to increase its installed capacity by 17% to 36.0Mt/yr in the (current) 2022 financial year and by 57% to 48.5Mt/yr with the realisation of all on-going projects by the 2024 financial year, from 30.8Mt in August 2021.

India Cements posts 121% rise in Q1 net profit, revenue jumps 37%

India Cements posted a 121 per cent rise in consolidated net profit for the first quarter of the current financial year (Q1FY22) to Rs 43.05 crore as compared to Rs 19.47 crore during the the corresponding period last year.

The company's consolidated revenue from operations during the period under review also saw a spike of 37 per cent from Rs 763.46 crore last year to Rs 1045.25 crore this fiscal. The company's cement production saw an increase of 41 per cent during the Q1FY22 to 1.88 million tons, as against 1.34 million tonnes during the same period last year. Similarly, the overall volume also increased by 36 per cent from 1.43 million tonnes during Q1 last fiscal to 1.95 lakh tonnes this year. However, sequentially, the vol-

ume was lesser by nearly 35 per cent mainly due to the second wave of the Coronavirus (Covid-19) pandemic.

‘Fly ash ideal for manufacturing cement, concrete, bricks and tiles’

Sustainable utilization of fly ash, a by-product of power generation with coal, is one of the key areas of concern at the Singrauli unit of NTPC in Sonbhadra district. The unit is ensuring sustainable solutions for complete utilization for it.

The fly ash generated at the NTPC is ideal for manufacturing cement, concrete, concrete products, bricks and tiles, claimed the general manager (ash handling) K Gopala Krishna. According to him, in order to promote the use of fly ash bricks in building construction, NTPC Singrauli has set up five fly ash brick manufacturing plants. Besides, NTPC Singrauli is also supplying 9.75 lakh metric tons (LMT) pond ash for free to National Highway Authority of India (NHAI) National Highway Road Project NH-7 (Rewa-Varanasi). It will also supply free two lakh cubic meters (LCM) pond ash to NHAI road project -bypass to Varanasi’.

Fly ash is being supplied to brick manufacturers at different locations for free of cost in a radius of 100 km. Indian Railways’ sprawling network is leveraged to transport fly ash in an economical and environment-friendly manner. These initiatives are in line to achieve 100% utilization of fly ash at the power station and therefore by effectively adapting environment friendly power generation methods for sustainable growth, said Krishna.