Domestic

COAL

Coal stock position will be comfortable after monsoon: CIL Chairman

Coal stocks at power plants will be in a comfortable position post-monsoons this year and a crisis like last year's is unlikely, Coal India chairman Pramod Agrawal said At the beginning of August, power plants had 30 million tonnes (mt) of stocks, he said recently. The highest level of stocks ahead of monsoons at 45 MT was seen in FY20 beginning, but that was in the midst of Covid when coal demand plunged due to lockdown and there was a general slowdown in industrial activity. Apart from the high stocks at plants' end, around 12 MT of stock is available at private washeries, goods sheds, ports, and at CIL's sidings awaiting shipment. Coal requirement from CIL to power utilities is pegged at 137 MT for the July-September quarter, entailing a supply of 1.49 MT on an average per day while CIL is so far supplying 1.52 MT per day. Higher supplies ensured the generating plants build up their inventory to the tune of 1.04 lakh tonnes per day - a stock surge of above 3 MT in the month. The high coal output expansion at the start of the year has brought down the asking growth rate for the remainder of the year to 8% from 12.4% at the beginning of the year.

Coal India to engage MDOs in 14 mines

In a bid to ramp up its production, Coal India is implementing a plan for operationalising 14 mines

through the engagement of mine developer and operators (MDOs), a top official said. These mines have a combined capacity of 165.58 million tonne per annum. Coal India Chairman and Managing Director Pramod Agrawal said, these mines would contribute in sizable quantities towards production in the coming years. Of these, 10 are opencast projects with a total projected capacity of 161.50 million tonne per annum and four underground projects with a total capacity of 4.08 million tonne a year. A letter of acceptance has been issued to six of the successful bidders for these MDO projects, having a total capacity of 96.74 million tonne per annum. Tenders for seven more projects (five opencast and two underground) with a combined capacity of 58.84 million tonne per annum have been floated, Agrawal said. Coal India has set a target of 700 million tonne production in the 2022-23 fiscal and proposed a capital expenditure of Rs 16,500 crore. It had undertaken 117 coal projects with a sanctioned capacity of 918.86 million tonne and a capital of Rs.1, 32,634 crore. These are in various stages of implementation. Out of which, 75 projects are on schedule and 42 are delayed, the company said in its annual report for 2021-22 (FY’22). Coal ministry signs 16 agreements with successful bidders of coal mines

Union Minister of Coal, Mines and Parliamentary Affairs Pralhad Joshi said on Monday that in the near future more than 107 coal blocks will be made available for auction by the Ministry of Coal. The Minister said that during the last four months Coal India Ltd has set new record by producing around 207 million ton coal. Ministry of coal is targeting production of 900 million tonne this financial year and the target of CIL comes to 700 million tonne. By the year 2030 India’s coal requirement will be of 1.5 billion ton, the minister stated. The total annual revenue generation from these three tranches of commercial auction is estimated at Rs.4286.53 crore considering production at aggregated Peak Rate Capacity level of 23.77 million tonne per annum. Once fully operational, these coal mines are expected to generate employment for 31,954 persons directly & indirectly, a coal ministry statement said. A total investment of Rs.3565.50 crore will be incurred to operationalise these mines. The 16 mines for which coal mine/ block production and development agreements executed are Beharaband North Extn, Gondbahera Ujheni East, Tokisud Block II, Bankhui, Bijahan, Brinda & Sasai, Koilajan, Garampani, Majra, Namchik Namphuk, Utkal C, Chinora, Utkal B1 & Utkal B2 and Gare Palma IV/6. India’s plan to auction abandoned coal mines is met with scepticism

India’s plan to auction abandoned coal mines to private firms to meet rising energy demand has brought little cheer to the industry as running the mines poses financial, technological and safety risks companies are reluctant to take on, analysts said. Grappling with unprecedented energy and power demand caused by scorching heatwaves in April and May, the government announced the reopening of 20 coal mines and called on private operators to run them, with a bidding process now underway. But energy experts have called the plan short-sighted and out of touch with the green and fair transition the country should be aiming for, saying renewable sources would be a cheaper and quicker fix for India’s needs. Boosting production from underground coal mines will take several years, while potential bidders are worried about the financial viability of the plan, critics say. Indian companies swapping dollar for Asian currencies to buy Russian coal

Indian companies are using Asian currencies more often to pay for Russian coal imports, according to customs documents and industry sources, avoiding the U.S. dollar and cutting the risk of breaching Western sanctions against Moscow. Russia became India's third-largest coal supplier in July, with imports rising by over a fifth compared with June to a record 2.06 million tonnes. In June, Indian buyers paid for at least 742,000 tonnes of Russian coal using currencies other than the U.S. dollar, according to a summary of deals compiled by a trade source based in India using customs documents and shared with Reuters, equal to 44% of the 1.7 million of tonnes of Russian imports that month. Indian steelmakers and cement manufacturers have bought Russian coal using the United Arab Emirates dirham, Hong Kong dollar, yuan and euro in recent weeks, according to customs documents

India buys discounted Venezuelan petcoke to replace coal

Indian companies are importing significant volumes of petroleum coke from Venezuela for the first time, as the OPEC nation boosts exports not specifically targeted by U.S. sanctions. India's growing appetite for Venezuela's petcoke is being driven by a scramble for inexpensive fuel to power industries as global coal prices have surged. This could boost cash flow for the South American producer, where state and private companies have increased exports of petrochemicals and oil byproducts, and the more competitively-priced Venezuelan supplies could displace cargoes from traditional suppliers. Indian cement companies imported at least four cargoes carrying 160,000 tonnes of petroleum coke from April to June. Another 50,000-tonne cargo is expected to reach the port of Mangalore on India's south western coast in the coming days while a 30,000-tonne shipment is scheduled to depart later in August, the data showed. Green nod for 10 expansion projects of Coal India

State-owned CIL's 10 coal mining projects have got green nod so far for their expansion which would lead to additional capacity of 9.65 million tonne, Parliament was informed on Monday. The government had earlier eased the norms for coal mine expansion in the wake of supply crunch in summer months. While in five coal mining expansion projects, environment clearances (EC) was given in May, in the remaining five cases the nod was given in July. While granting EC to these projects, which are falling within and outside the severely polluted area, additional environmental safeguards have been provided as part of EC condition. This special dispensation was given to only those mines which have already obtained 40 per cent dispensation based on earlier reforms. The Centre had on May 7 issued an office memorandum, "regarding special dispensation for consideration of Environment Clearance (EC) from 40 to 50 per cent expansion in coal mining projects, within the existing premises/mine lease area, without additional land acquisition."

CIL target for Coal production 840 MT for 2023-24

National miner CIL has projected coal production of 840 MT for 2023-24.In order to ramp up domestic production of coal, several steps have been taken including MDO models, Capacity addition through Greenfield and Brownfield Projects etc. To increase production through MDO model, Coal India Ltd. has identified 15 MDO Projects having combined capacity of 168.6 Million Tonne per year while capacity addition through Greenfield and Brownfield Projects in CIL has led to 289 MTY through approval of new and expansion PRs. Advanced Technologies like surface miners, etc. for open cast mining and Power supported Longwall (PSLW), high wall Mining, continuous miner etc. for underground mines are being deployed tor efficiency and higher production of coal. CIL has also taken steps to upgrade mechanised coal transportation and loading system through CHP/Silo under 'First Mile Connectivity' Projects. This will facilitate faster evacuation of coal.

Singareni sets 100 million tonnes of coal production per annum in five years

The Singareni Collieries Company Limited has set a target of producing 100 million tonnes of coal per annum by opening 10 new projects across the country in the coming five years period, said N Sridhar, the chairman and managing director of Singareni. He said that the Singareni was playing a crucial role in the development of the country by supplying coal to over 2,000 industries in South India. Further increasing the production would ensure a Rs 50,000 crore turnover and profits of over Rs 3,000 crore. Similarly, the Singareni was also contributing for the nation’s growth by generating the thermal and solar power, he stated. Already, the Singareni was generating 1200 MWs of thermal power in the state, he said and added that the government had issued instructions to open another 800 MWs of thermal power plant, which would be taken up very soon

Expedite coal auctions to ease prices- requests power project developers

exclusive coal auctions for 13 GW of plants that neither get coal supplies from Coal India nor have power-purchase agreements. Developers said operationalisation of the plants can help ease prices in power exchanges that are currently hovering near the ceiling rate of 12 per unit in peak hours. The average price on the exchanges is 4-5 a unit. A senior coal ministry official said Coal India was giving coal to all projects in contract with the company. "The power ministry has to suggest about these projects which do not have power and coal contracts," he said. The exclusive auctions under clause B(viii)(a) of the coal supply policy (Shakti) were announced by the coal ministry in March this year, when the Cabinet Committee on Economic Affairs (CCEA) approved a single spot e-auction window by coal companies for all consumers

STEEL

India turns net steel importer in July

India turned net steel importer in July as exports plunged to a three-year low, weighed down by the 15pc export tax. Imports of finished steel in July rose by 8.4pc on the year to 444,000t, provisional data from the steel ministry's Joint Plant Committee show, while exports declined by 75pc on the year and by 41pc on the month to 380,000t. This is the first time since January 2021 that the country's finished steel imports have exceeded exports. July exports are also the lowest since June 2019. Finished steel comprises alloyed and nonalloyed steel. Finished steel exports during April-July dropped by 49.3pc on an annual basis to 2.57mn t, while imports during the same period rose by 3.1pc to 1.62mn t. The 15pc export duty on steel products imposed by the government in late May has cut down shipments owing to unviability and weak international demand. Imports on the other hand have recently picked up, especially from Russia, as cheaper steel has piqued domestic buyers' interest Steel players' hopeful of export duty withdraw; okay with capex plans

The export duty imposed on certain steel products recently will not force steel makers to review their capital expenditure plans as top producers expect it to be a "short-term" move to stabilise inflation. On May 21, the government hiked the duty on exports of iron ore by up to 50 per cent and for a few steel intermediaries to 15 per cent. It also waived customs duty on the import of some raw materials, including coking coal and ferronickel, used by the steel industry. The Indian Steel Association had said India may lose export opportunities and the decision may also impact the overall economic activity in the country. According to the steel ministry, the sector's exports in FY22 increased by 25.1 per cent to 134.94 lakh metric tonnes (LMT), while imports dipped 1.7 per cent to 46.69 LMT. Senior industrialists hoped that export duty will be a short-term measure by the government and will be withdrawn once inflation moderates. They said prolonging this duty even after steel prices have settled at much lower levels is detrimental to the profitability of the industry. The Ministry of Steel publishes steps to reduce steel prices

In a written reply to the Rajya Sabha, Shri Faggan Singh Kulaste, Minister of State for Steel, detailed the government's efforts to make raw materials and steel more affordable. To regulate the now-deregulated sector, the government has taken a number of measures to mitigate the effects of demand and supply; global market conditions; trends in raw material prices; logistic costs; power costs; fuel costs; and so on: (i) Reduction in Custom Duty on Semis, Flat and Long products of non-alloy, alloy and stainless steel to 7.5%, in Union Budget 2021-22. (ii) Extension of exemption in Custom Duty on steel scrap up to 31.3.2023 along with revocation of AntiDumping Duties (ADD) and Countervailing Duties (CVD) on steel products, in Union Budget 2022-23. (iii) Modifications in tariffs on raw materials of steel and other steel products vide notification dated 21.05.2022 wherein the import duty on Anthracite/ Pulverized Coal Injection (PCI) Coal, Coke, Semicoke and Ferro-Nickel has been reduced to zero. SAIL plans to raise crude steel production capacity to 35 MT per annum

The current crude steel production capacity of Steel Authority of India Ltd.(SAIL) is 20.63 Million Tonne per annum. In line with the envisaged enhancement of crude steel production to 300 Million Tonne by 2030, SAIL has planned to raise their crude steel production capacity to 35 Million Tonne per annum by 2030-31. The proposed scale of indicative investment by SAIL to reach the capacity of around 35 Million Tonnes per annum of crude steel will be around Rs 1,10,000 crore. The projects for expansion of capacity for SAIL are financed through a combination of debt and equity which is normally in the ratio of 1:1. The project planning has to go through the preparatory stage before arriving the stage of execution, where the expenditure is incurred. Since these projects are at preparatory stage, expenditure towards execution of these projects has not incurred. The land bank study is in progress. However, preliminary study indicates availability of land for the expansion project envisaged in the first phase.

RAILWAYS & SHIPPING

Railways freight transport up 8% in July as it carries coal nationwide

Indian Railways transported 122.14 million tonnes (mt) freight in July, marking an 8.25 per cent increase against the same period last year as it ferries coal to power plants. The year-on-year (YoY) growth of 9.3 MT was largely due to a near one-fourth increase in coal supply, which was railways its top priority during the fuel crisis in the country. Indian Railways has achieved an incremental loading of 11.54 MT in Coal, followed by 1.22 MT in Balance other goods, 0.56 MT each in Cement & Clinker and Containers and 0.47 MT in POL (petroleum products), a statement by the railways ministry showed. The ministry said that loading of coal (both domestic and imported) to thermal power plants increased by 13.2 mt in July, with 47.98 coal being moved to powerhouses as against 34.74 mt last year. That is a growth of 38 per cent. With the July volumes, the transporter has recorded a near 11 per cent increase in cumulative freight loading this financial year. Notably, the ministry’s internal target for the year is 1700 mt, roughly 20 per cent more than what it achieved in 2021-22..

Freight rates firm up, transporters’ liquidity improve

With fuel prices easing up in a few states and freight availability improving, transporters have seen a month-on-month increase in cash flows, says a latest report by Crisil Research. In other words, transporters have better liquidity to invest in new vehicles and upgrade their fleet. According to the report, freight availability was healthy for agri-products, auto carriers, fast-moving consumer goods/durables (FMCG/FMCD), parcel/ loose goods, and textiles. Commodities such as petroleum tankers, steel, cement, mining products (largely coal) and container applications saw slightly lower freight availability, but was still better than in June. Tamil Nadu freight rates largely mirrored pan India freight rates with marginal difference in certain periods. Pan India freight index peaked in April 2022 at 129 while for TN the index was at 134 during the same period. The index value for pan India and TN is 123 and 128 in July 2022 respectively. Railways shelves plan to move imported coal from ports

The Indian Railways has put in abeyance the logistics plan drawn up to transport imported coal from ports during the peak demand months, even as the dry fuel's stock improved at power plants. The decision came after the power ministry asked coalfired electricity generation companies to halve the blending percentage of imported coal in their total mix to 5%. As the availability of coal improved at power plants, it was decided that state government-owned gencos and independent power plants may decide the blending percentage after assessing the availability of domestic coal supplies. In another advisory on August 1, the power ministry asked NTPC and Damodar Valley Corporation to bring down the blending percentage to 5% at their generation units and keep monitoring the situation closely.