CCAI newsletter May

Published on : 28.05.2018 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

Vol. XLVI No. 14 May 2018 CCAI Monthly Newsletter May 2018

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From the Editor’s Desk The Coal Minister has advised thermal power plants to increase the Plant Load Factor (PLF) from the current levels of 60 per cent to 100 percent to meet power demand during the summer and forthcoming seasons.

Hence, Indian Railways had to prioritize movement of coal to meet this shortage. Supply of coal to the State GENCOS, especially PSUs are being prioritized ahead of Independent as well as Captive Power Generators.

Though there is an upward movement in production and offtake of CIL in May 2018, but nearly 25 thermal plants across the country are either having critical or super-critical coal stock levels at the end of the month.

For improvement of coal movement by rakes, Coal India has planned to evaluate and formulate its own rail network to reduce dependence on railways for transporting coal. This may reduce the uncertainty of getting rakes to the consumers in time. Indian Railways is also eyeing for movement of approx two billion tonnes of coal within next five years.

To reduce environmental impact of burning the fossil fuel, Ministry of Coal is focussing on clean coal technologies as it would continue to remain as primary input for generating thermal power for years to come. The Government has also issued directives to all coal companies to set up washeries at the pit heads enabling the power utilities to use clean coal for energy generation.

On one hand extreme measures are being taken for improvement of coal supply to power plants, on the other hand Industries and Captive Power Plants (CPPs) are struggling hard to procure coal by rail and facing uncertainty as most of the Fuel Supply Agreements (FSAs) with the Subsidiary Coal Companies are expiring from 2018 onwards.

Though Tranche IV Linkage Auction is about to start from June 26 with DRI plants, still unpredictability looms large on procurement by rail from domestic sources.

Hope CIL would take adequate measures for smooth running of these plants as well.

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Content Vol. XLVI No. 14 May 2018

06 |Consumers’ Page

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

08|Power

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

14|Domestic

Editor : Subhasri Nandi

20|Global

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

24|In Parliament

34 |Monthly Summary of Domestic Coal 36 |Energy Genaration Report 37 |Monthly Summary of Imported Coal and Petcoke

38 |Global News 40 |Production and Offtake Performance of CIL and Subsidiary Companies CCAI Monthly Newsletter May 2018

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CONSUMERS’ PAGE Present Coal Scenario Coal India Ltd has increased its production by 15.7% yoy for the month of May 2018 to 47.1mn tonnes (92% of monthly target). This brings the total production for the period of April-May18 to 91.99 mn tonnes, an increase of 16.2% yoy (94% of production target).

Offtake also rose 14% yoy for May 2018 to reach 52.86mn tonnes (91% of offtake target).

Thus, offtake for April-May18 stood at 103.8mn tonnes achieving 90% of the targeted volume, an increase of 13.4% yoy

Consumers’ Concern 1. Coal Stock Position Till end of May 2018, 25 thermal plants across the country had either critical or super-critical coal stock levels.

In order to combat this shortage, the government has asked the Indian railways to prioritize shipment of coal. In addition to that shipments of coal to power generators (especially PSU power generators) are being given preference ahead of Independent as well as Captive Power Generators. This is also a concern for power-intensive industries such as metals and cement.

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2. Power Companies with and without PPAs have urged to start Auction under Shakti Scheme Power Plants without assured coal supply but with PPAs could not take part in Auction due to various reasons, have urged to commence Auction to provide them the opportunity to win long term supply assurance.

Similarly, non-PPA holders have also requested for commencing Auction for them as per provisions of Shakti Scheme.

3. Reconciliation at regular intervals is needed for refund or adjustment of balance amount Reconciliation against advance payment should be done at regular intervals otherwise it takes inordinate time to get back the adjusted amount.

For ensuring time bound efficient loading of coal, both Power and Non-power Sectors have requested CIL & Subsidiaries for loading only through Silo or rapid loading mechanism. Advanced Coal Handling Plants (CHP) should be put in place.

9. Consumers urge WCL to conduct Exclusive e-Auction for 4. Delay in issuance of credit Non-power Sector including notes against GCV slippage CPPs In case of GCV slippage in different subsidiaries, inordinate delay in issuance of credit note is resulting in stuck up of funds.

Therefore, coal consumers are requesting Subsidiary Coal Companies for timely release of credit notes as it is done in case of debit notes.

5. GCV slippage repeatedly found Power Consumers are repeatedly complaining of GCV slippage from different areas of ECL and BCCL. In spite of Third Party Sampling & Analysis, consumers are not satisfied with the quality specially from these two Subsidiary Coal Companies resulting in loss to the Power Plants.

6. Under loading of coal in rakes Under loading even in the tune of 300 to 400 tonne of coal resulting in idle freight is a direct load to the consumers. Before 2009, it had been compensated by the coal companies as under loading rebate but now this has been restricted to stencil carrying capacity only.

7. Overloading penalty Customers have to pay penalty for overloading and that is quite higher than the normal freight. Therefore loading should be done as per the chargeable carrying capacity fixed by the Railways.

8. CHP or SILO loading

Consumers in the Non-power sector are unable to run their plants smoothly due to shortage of coal as they have not been offered sufficient quantity in Spot e-Auction.

Therefore, they have urged WCL to offer more coal to Non-power Sector consumers by conducting Exclusive e-Auction.

10. Burnt and degraded coal received from Samleswari and Kulda OCP of MCL A few Linkage e-Auction consumers have complained that they are receiving degraded coal from Samleswari and Kulda OCP of MCL. This has hampered their production process and increased production cost as well.

It had been urged to provide assured quality of coal from other available sources.

11. Request for exemption against advance payment for the companies signed MOU after expiry of Linkage in the Non-power Sector Consumers, who signed MOUs with the Subsidiary Coal Companies after expiry of FSAs, have requested for exemption against advance payment of coal value.

CCAI Monthly Newsletter May 2018

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POWER Piyush Goyal wants thermal power units to ramp up Plant Load Factor to 100% There is a need to increase the Plant Load Factor (PLF) of various thermal power plants from the current levels of 60 per cent, according to Coal Minister Piyush Goyal.

The advice comes at a time when the Centre claims the demand for power has been growing.

At a meeting to review the power supply requirement during the summer and the forthcoming winter season, Goyal said all pithead plants with sufficient coal supply should run at 100 per cent PLF. The PLF is the actual power generation out of the total installed capacity of a power plant. In India, the average PLF hovers around 60 per cent, even which is accounted for by higher generation from public sector undertaking NTPC’s plants.

Private power plants, on the other hand, have much lower PLF, close to 40 per cent, which they blame on lower coal supplies.

New environmental norms for coal-based power plants could have a bearing on your electricity bill.

The Power Ministry has written to the Central Electricity Regulatory Commission (CERC) asking for thermal power plants to be allowed to pass on to consumers the cost of complying with the revised environmental standards.

Earlier this year, Power Minister RK Singh had told the Rajya Sabha that the retrofitting of old thermal plants is likely to increase their tariff by 62-93 paise a unit.

As many as 295 coal-based power plants were given a timeline of 2-4 years to meet the strict environmental norms, which were to be implemented by December 2017. These plants now have time till 2022.

A November 2017 statement from the India Energy Forum said the cost of retrofitting a power plant ranges from Rs. 1 crore to Rs. 2 crore per MW, while that for a new coal-based plant would be around Rs. 5 crore per MW. A retrofitting will involve installation of equipment for flue-gas desulfurisation and conversion of open cycle to close cycle. This will increase the cost of operation and maintenance of thermal plants, particularly those older than 25 years.

As Power Ministry seeks to make green retrofitting cost a ‘pass on’, Electricity tariffs to rise 08 | CCAI Monthly Newsletter May 2018

regulator

proposes

major change in tariff structure from FY19 The Central Electricity Regulatory Commission (CERC), which determines tariffs for plants that sell power at ‘cost-plus’ systems, has proposed to introduce a ‘three-part tariff’ structure from the existing ‘two-part’ regime. The regulator has suggested the changes in the recently launched approach paper for the tariff period between FY19-24. The existing twopart tariff structure for coal-based power plants comprise fixed and energy charges. Fixed charges represent fixed cost components, including debt service obligation and risk-free returns, while energy charges represent the fuel costs, which varies according to the market.

The new proposed design wants to introduce a “variable charge” component, which would provide incremental return above guaranteed return and balance operation and maintenance expenses. The variable component could be linked to the difference between availability of the power plant and the quantum of electricity it has dispatched.

CERC regulates 76 GW of capacity under the costplus regime and experts have pointed out that NTPC and Power Grid Corporation of India are impacted the most by change in tariff regulations.

India ranks 4th in Asia-Pacific on power index India has ranked fourth out of 25 nations in the Asia-Pacific region on an index that measures their overall power, with the country being pegged as a “giant of the future” but trails behind in indicators of defence networks and economic relationships.

by The Lowy Institute, an Australian think tank.

India is ranked fourth on the parameters economic resources, military capability, diplomatic influence and fifth on resilience.It scores well on the parameters of cultural influence and and future trends, ranking third in both. However, it scores low on the measure of economic relationships, ranking 7th and in defense networks, ranking 10th.

Lowy said economic relationships is measured in terms of the capacity of states or territories to exercise influence through economic interdependencies; measured in terms of trade relations, investment ties and economic diplomacy.

Demand rising: Scheme for 2,500 MW power attracts states States have evinced interest in the government’s latest pilot scheme to procure 2,500 MW electricity from plants without power purchase agreements (PPAs).

A senior PFC official told that interest for more than the offered capacity has already been shown by the states and auctions are set to be held in early July.

PFC Consulting is the nodal agency for the scheme.

It will conduct the auction and PTC India will sign three-year (mid-term) PPAs with successful bidders and and contract with power distribution companies (discoms) to sell electricity.

The development should bring some relief to the thermal power sector, where more than 15.6 gigawatt (GW) of operational coal-based power plants have been classified as stressed assets due to the absence of PPAs. A tepid rise in growth in power de-

The Lowy Institute Asia Power Index measures power across 25 countries and territories in the Asia-Pacific region, reaching as far west as Pakistan, as far north as Russia, and as far into the Pacific as Australia, New Zealand and the US. A country’s overall power is its weighted average across eight measures of power - economic resources, military capability, resilience, future trends, diplomatic influence, economic relationships, defence networks and cultural influence.

India is ranked fourth overall on the inaugural index CCAI Monthly Newsletter May 2018

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mand over the last few years, coupled with rampant capacity addition, has resulted in power plants running at low-utilisation rates. However, the scheme draws more takers, with the Central Electricity Authority reporting that there was a more than 10% annual increase in electricity demand in Uttar Pradesh, Chhattisgarh, Telangana, Arunachal Pradesh, Manipur and Tripura in FY18.

In early April, the pilot plan proposes that a single entity, which quotes or matches the lowest bid in the auction, would be allocated a maximum capacity of 600 MW. A company cannot quote part capacity from different power stations in the same bid. If PTC procures power less than 55% of contracted capacity in a month, the plant would be paid compensation, the quantum of which would be linked to spot power prices at the Indian Energy Exchange.

Thermal plants resume coal imports amid domestic shortages State-run thermal power plants in coastal states have begun buying overseas coal due to domestic coal shortages, government and utility officials said, in a setback for the country’s long-term plans to eliminate imports.

After no significant imports in 2017, government utilities in Tamil Nadu and Andhra Pradesh have ordered several cargoes of coal since the beginning of this year, two officials said. Andhra Pradesh has imported 200,000 tonnes of coal so far this year and could import as much as 1 million tonnes in 2018, said Ajay Jain, a senior official in the state energy department.

“Coal has been a real problem. If we had depended only on coal, it would have been a disaster,” Jain said.

Tamil Nadu Generation and Distribution Corp has imported about 1.4 million tonnes of coal this year, after going a year without imports starting at the end of 2016, according to Vikram Kapoor, the chairman of the utility.

An increase in coal imports by state-owned power utilities undermines a pledge by Prime Minister Narendra Modi’s government to cut thermal coal imports to zero by March 2018. But state-owned Coal India Ltd, the world’s second-biggest coal miner by production, is grappling with a shortage of trains to carry the fuel from its mines to the power plants.

Both Andhra Pradesh and Tamil Nadu are waiting for

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the wind energy season to start in June, when they expect dependence on coal to ease.

RBI rejects power min plea to relax resolution norms for stressed cos The Reserve Bank of India (RBI) has rejected the government’s demand to relax the guidelines on resolution of stressed assets for power companies, pushing over 20,000 MW projects closer to liquidation. In a letter to the power ministry, RBI has expressed its inability to provide any relaxation to power plants saying it does not look into sectoral issues.

The power ministry had written to RBI asking for extension of the 180 days resolution period for power projects to one year.

As per the revised framework, projects with interest or principal overdue starting from 1 day to 30 days will be categorised as ‘special mention accounts category-0’ (SMO-0). The most stringent change in the framework is that all the lenders have to agree upon a resolution that has to be reached in 180 days. Sector experts said while some of the power sector issues, including coal shortage and regulatory problems, could be addressed by the government, issues like lack of power purchase agreement.. (PPAs) required a pick-up of economic activity.

Relief for Indian solar producers as government reneges on import duty India has scrapped a duty on solar modules, making it easier to import the products after a sudden change in customs policy last year led to a logjam of shipments at Indian ports.

Several consignments of solar modules, worth more than $150 million in total, were held up for more than three months at ports after Indian customs’ officials in August demanded that some of them be classified as “electric motors and generators”, carrying a 7.5 percent import duty. Previously they were subject to no duty.

The finance ministry reversed the policy last month, stating in a notice seen by Reuters that most solar modules should revert to their original classification

and that no tax should be levied on them.

Indian component makers have struggled to compete with Chinese companies such as Trina Solar and Yingli and have sought anti-dumping duties as well as long-term safeguards But the logjam of shipments at ports posed a headache for solar power producers and threatened to delay Prime Minister Narendra Modi’s plan of nearly tripling the country’s total renewable energy capacity to 175 gigawatt (GW) by 2022.

Besides the fresh issue of about Rs 2,700 crore, other investors such as Goldman Sachs, Abu Dhabi Investment Authority (ADIA) and Global Environment Fund (GEF) are also selling part of their holdings in the proposed IPO. The combined size (fresh issue by the company and secondary sale by the existing shareholders) of the issue will be between Rs 6,000 crore and Rs 7,000 crore.

Government announces national wind-solar hybrid policy

Kerala and NTPC sign MoU for in- PTI creasing solar power generation With an aim to boost renewable power generation, The Kerala State Electricity Board has signed a memorandum of understanding with the National Thermal Power Corporation for increasing solar power generation in the state.

the government announced a national wind-solar hybrid policy, which seeks to promote new projects as well as hybridisation of the existing ones.

The MoU, signed, also includes an agreement to set up a 15 MW solar power unit at the NTPC complex in Kayamkulam, an official release said.

The government has set an ambitious target of achieving 175 gigawatt (gw) of installed capacity from renewable energy sources by 2022, which includes 100 gw of solar and 60 gw of wind power capacity.

Besides this, the possibility of setting up solar plants at reservoirs, open space and top of buildings also would be explored.

The total renewable power installed capacity in the country stood at about 70 gw last financial year.

The power generated would be given to KSEB at a rate fixed by the State Electricity Regulatory Commission.

The state is expected to make good strides in solar power generation with the MoU becoming operational, the release said.

ReNew Power set to buy 5 renewable power companies ReNew Power, the largest independent power producer, is set to acquire five companies in the renewable power space — solar and wind — that have a combined capacity of about 680 MW for about Rs 6,000 crore, said two people familiar with the development.

The deal, expected to conclude in the next three-four months, will be funded from internal accrual and fresh fund that the company intends to raise in the proposed IPO. The company that has Rs 2,500 crore cash in the balance sheet is raising another Rs 2,700 crore from the IPO.

12 | CCAI Monthly Newsletter May 2018

The policy provides for a comprehensive framework to promote large grid-connected wind-solar photovoltaic (PV) hybrid system for optional and efficient utilisation of transmission infrastructure and land, thereby reducing the variability in renewable power generation and achieving better grid stability, the ministry of new and renewable energy said in a release.

Besides, the policy also aims to encourage new technologies, methods and way-outs involving combined operation of wind and solar PV plants, it added.

CCAI Monthly Newsletter April 2018

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DOMESTIC Govt plans to propose nationwide West Bengal has sole operatorban on petcoke as a fuel, say ship of India’s largest coal block, sources says CM Mamata Banerjee India’s government plans to propose banning burning petroleum coke as a fuel nationwide to comply with a Supreme Court request as part of a long-running case to clean the country’s air, two government sources said. The government proposal follows a ban ordered by the Supreme Court in October on burning petroleum coke in the region around the capital of New Delhi. An oil refinery by-product, petroleum coke, or petcoke, is used as a fuel because of its higher energy content than coal, but it releases larger amounts of carbon dioxide and sulphur dioxide, which can cause lung disease and acid rain.

The government would expand the New Delhi ban across the country while still allowing petcoke to be used in the limestone and cement industries, said the sources who declined to be named. The proposal must be submitted to the court by June 30. The sulphur emissions that are usually given off when petcoke is burned are instead absorbed during the cement-making process.

The ministries did not reply to emails seeking comment. The government was ordered to submit the proposal so the Supreme Court can rule on a petition seeking steps to clear India’s air that was first raised in 1985.

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West Bengal Chief Minister Mamata Banerjee claimed to have got the Centre’s clearance for the sole operatorship of India’s largest coal block Deocha-Pachami in the state’s Birbhum district. Banerjee met Union Coal Minister Piyush Goyal at his residence after the meeting of the chief ministers on the 150 birth anniversary of Mahatma Gandhi at the Rashtrapati Bhavan. Speaking to reporters, the chief minister claimed that she had got the clearance from the Union Minister after holding discussions related to certain complications Bengal was facing regarding the coal block. “I discussed the issue with him.

We had to share the coal block with five other states earlier. Now, they all have agreed to give it to us. We were waiting for the central (government) clearance.

We have now got the clearance,” Banerjee said.

The state government has a plan of Rs 12,000 crore to develop the huge coal block in the Deocha-Pachami belt. It can generate one lakh jobs. The state government has shown interest to develop the block that can produce coal worth more than Rs 2 lakh.

Responding to the state government’s proposal the Centre has already set up an intra-ministerial committee to explore the project. The block was originally offered jointly to West Bengal, Bihar, Punjab, Uttar Pradesh, Karnataka, Tamil Nadu and SJVNL (former-

ly the Sutlej Jal Vidyut Nigam Ltd).

plants to enable them generate ‘Swachh Coal’ or clean coal for energy generation as well as meet requirements of steel plants, he said in the release.

Water, coal shortage may hit power generation in Punjab, Haryana Finished steel exports surge 17% Power generation in Punjab, Haryana and Rajas- in FY18 thanmay face problems in near future because coal stocks are citically low at thermal plants and water level unseasonably low in reservoirs of hydropower stations in the region.

If a solution is not found in near future, the three states’ dependence on purchasing power from outside may increase in the next few days. According to the latest report by the Central Electricity Authority (CEA), coal stocks in all three private thermal plants of Punjab, Khedar and Panipat thermal plants of Haryana, and four thermal plants of Rajasthan are in “critical position”.

The coal stock at the 1,980MW Talwandi Sabo thermal plant would last three days, while the stock at the 1,400MW Rajpura thermal plant is expected to not last more than six days. In Haryana, the 1,200MW Khedar thermal plant has nil stock, while the 920MW Panipat thermal plant has coal left for two days. In Rajasthan, the 1,500MW Suratgarh thermal plant and Adani’s 1,320MW Kawai thermal plant have coal stock of three days. The 1,240MW Kota and 1,660MW Chhabra plants have stocks which last for two days and one day, respectively.

Water level at Ranjit Sagar Dam is 15 metres less than the corresponding time last year. While it was 514.59m last year, it was 499.56 when last measured for the CEA report. Water in the Bhakra reservoir is short by about 4 metres when compared to last year.

At Bhakra reservoir, the water level is 463.24m.

Govt accelerates exploration, drilling of coal in North East The government has accelerated exploration and drilling of coal in the northeastern states of the country, according to a coal ministry official.

The ministry of coal is focussing on clean coal technologies for producing clean coal as it would stay on as a primary input for producing thermal power in near future, Anindya Sinha, project adviser in the Ministry of Coal, said.

The government has also issued directives to all coal companies to set up washeries at their coal mining

India’s total export of finished steel increased by 16.7% to 9.621 million tonnes (MT) in 2017-18, according to an official data. The country had exported 8.242 MT finished steel during 2016-17 fiscal, the Joint Plant Committee (JPC) said.

Empowered by Ministry of Steel, JPC is the only institution which collects data on the Indian iron and steel industry.

In March 2018, the overall export fell sharply by 56.3% to 0.708 MT from 1.621 MT during the same month a year ago. The import has also registered a rise during the last fiscal, the figures show. Import of total finished steel rose by 3.5% to 7.482 MT in FY18 compared to 7.226 MT in the preceding fiscal.

However, the overall import during March fell by 19.7% to 0.482 MT as against 0.600 MT during the same month in 2017.

STEEL Steel industry poised for stable growth in 2018 We reviewed the commodity prices as they are likely to behave in FY19. The available indications suggest a gradual downward trend in global prices of iron ore, coking coal and scrap from the current level. This sounds good for the steel industry which sees uplift in the demand front. The short-range outlook of WSA forecasts 1.8% growth in global steel consumption in 2018 led by India (5.5%), USA (2.7%), EU (2.5%), Turkey (5.0%), Russia (2.1%) and South Korea (1.0%).

China is also likely to consume similar volume of steel as in 2017. Meanwhile, the World Economic Outlook, brought out by IMF recently, has predicted a reasonably good global GDP growth of 3.9% and this would be fuelled by GDP growth of 7.4% in India, 6.6% in China, 2.4% in EU and 2.9% growth in USA. Japan, a major steel producer is also likely to experience a GDP growth of 1.2% in the current year. Thus higher CCAI Monthly Newsletter May 2018

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global economic growth which would also require an investment growth of 11% over last year to take the share of investment as a percentage of global GDP to 26% as per IMF estimates would generate substantial steel demand in varying proportions in different countries depending on the primary focus of Fixed Asset Investment as a percentage of GDP. The vulnerability of this positive outlook, however, hinges crucially on what is going to happen in China that not only controls nearly 50% of global steel production, is also a major exporter (achieved 16% of global exports in 2017) of steel, dominates the iron ore prices (imported 1075 MT of iron ore in 2017 and would gradually close down the high priced domestic iron ore concentrate producing units). It has also a major influence on global coking coal and coke prices.

Jindal Steel and Power may offer 50% more cargo to Railways this year Jindal Steel and Power Ltd (JSPL) expects s to increase its rail freight loading by 50 per cent this year – with plans to lug 30 million tonne (mt) in the ongoing fiscal year against 20 mt in FY2018.

With this, the company’s overall spend on the rail freight will be about Rs. 3,700 crore for hauling raw material to its plants and final products to customers.

This will add Rs. 1,200 crore to the national transporter’s freight earnings kitty this year, as JSPL had a rail freight bill of about Rs. 2,500 crore last year.

Kapil Rawat, Executive Director - Group Logistics, told that the company is widening its special wagon investment portfolio by investing in flat wagons — wider than what Railways has — in order to carry wider steel plates that can be used to make pipes, windmills, boilers and construction projects.

The company, which has two plants in Raigarh and Angul, moves raw material to these plants from ports located on the east coast like Paradip, Dhamra and Visakhapatnam.

CEMENT Cement output grows 6.3 pc to 16 | CCAI Monthly Newsletter May 2018

280 MT in FY18: Icra Buoyed by improving demand, domestic cement output grew 6.3 per cent to 298 million tonne (MT) in 2017-18, according to credit rating firm Icra.

It also said that going by the prevalent trend, the growth momentum is expected to continue in the current financial year and the industry is likely to report a growth of 6 per cent.

Senior Vice President & Group Head, Icra Ratings, Sabyasachi Majumdar said: “We expect the cement demand to show a growth of around 6 per cent in FY 2018-2019. This is primarily driven by a pick-up in the affordable and rural housing segments and infrastructure - primarily road and irrigation projects. “The budget of FY’19 also provides support in this direction with higher rural credit, increased allocation for rural, agricultural and allied sectors along with continued focus on the PMAY and infrastructure investments.”

He further said the cement production increased by 10.6 per cent and 18.2 per cent respectively in the third and fourth quarter of 2017-18.

The trend was supported by demand in Andhra Pradesh and Telangana, driven by irrigation, low-cost housing and infrastructure projects.

How rise in coal, diesel prices may impact profit margins of cement companies Due to rising prices of pet coke, coal and diesel, cement firms in India may face pressure on their profit margins in the near term. In its monthly update on India’s cement sector, ratings agency said that an increase in coal and pet coke prices and increase in diesel prices in the near term are likely to continue to put pressure on the profitability margins and debt metrics of the cement companies.

“Hence, the ability of the industry players to secure increases in cement prices remains critical from the profitability perspective,” PTI reported citing ICRA’s senior vice president Sabyasachi Majumdar.

In the financial year 2017-18, diesel prices were higher by 6.9 per cent year-on-year and coal prices were higher by 24 percent. The prices of pet coke surged in Q1, Q2 and Q3 of FY18 by around 54, 16 and 20 percent, respectively, PTI reported citing report. In December last year, the central government hiked

the import duty on pet coke from 2.5 percent to 10 percent.

“The FY19 budget also provides support in this direction with higher rural credit, increased MSP, increased allocation for rural, agricultural and allied sectors, along with continued focus on the PMAY and infrastructure investments,” PTI reported citing Majumdar.

ICRA expects the demand growth to be moderate and industry’s capacity utilisation level at near to 65 percent over the medium term in wake of sand availability issues continuing to impact demand in Rajasthan, Bihar and Tamil Nadu.

RAILWAYS Railways allows investment in general-purpose wagons The Railways has opened up private investment in general-purpose wagons and will allow investors to put in funds in rail cars that can move multiple commodities, including coal, without the need for any special approval.

This had been a demand from several freight customers or wagon users of trains, and firms in the leasing space. The move will help customers deal with wagon shortage, while ensuring that multiple commodities can be carried, insulating the wagon investors from the ups and downs seen in the business of a specific commodity.

Earlier, the Railways used to allow private investment in special wagons — for instance oil firms could in-

vest in tankers, steel firms could invest in wagons specially for steel transportation, firms in automobile logistics space could invest in specially designed automobile wagons. Also, container train operators were allowed to invest in wagons that could move containers, with Railways specifying the commodities that moved in containers.

Phase 1 of railways’ game-changing freight corridor network will be ready by November The first phase of the Rs 81,000-crore dedicated rail freight corridors project is likely to be completed in November.

Once thrown open, the western and the eastern corridors will reduce travel time between Delhi and Mumbai and Delhi and Howrah, the two most congested rail routes in the country, for both passengers and goods.

The 1,500-km western freight corridor runs from Dadri near Delhi to Jawahar Lal Nehru Port Trust in Mumbai and the 1,800-km eastern corridor is from Ludhiana in Punjab to Dankuni in West Bengal.

The Delhi-Mumbai rail route is highly congested at present because of the high volume of container traffic which slows up the passenger trains. The Delhi-Kolkata rail route, on the other hand, passes through the coal belt of Jharkhand which has a high density of coal carrying trains.

These trains evacuate coal from the mine heads in Jharkhand and bring them to the power plants in northern and western parts of the country. The 3,300 km long corridors being constructed to connect the mainland with the ports on the western and the eastern coasts of the country are scheduled to be fully completed by 2020.

CCAI Monthly Newsletter May 2018

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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

GLOBAL Trump Said to Mull 2015 Grid Emergency Law to Save Coal Plants

newable power advocates have blasted proposals for government intervention to help coal and nuclear plants, saying there is no emergency compelling such moves and arguing that they would represent unfair meddling in the power market.

The Trump administration is weighing a broad array of strategies for keeping coal and nuclear power plants online as a matter of national security, with options ranging from invoking a 68-year-old law to a three-year-old one, according to a senior Energy Department official.

The Energy Department is already working to identify electric generating units that are critical to maintain in a national emergency, the official said. It also is looking at several strategies for keeping them online, as flat power demand and competition from cheap natural gas makes it impossible for some facilities to earn enough to continue operating.

Members of the National Security Council agree that something must be done to ensure the long-term reliability and resiliency of the nation’s electric grid, said the official, who asked to speak anonymously about internal deliberations. More than 90 percent of American military installations are served by civilian utilities, and the government has an obligation to ensure those facilities are safe and supplied by electricity, the official said.

The effort is driven by concerns over the closing of many nuclear and coal plants, and the capability of systems to snap back after intense storms or cyber attacks. But the government’s analysis is not limited to any single company, region or type of power, the official added.

A final decision has not been made, and the official said there was no timetable for making one.

Environmentalists, natural gas producers and re-

20 | CCAI Monthly Newsletter May 2018

Coal Is Losing Ground Despite Trump’s Promises Say what you will about Donald Trump, but he has been keeping his promises. He promised to revive the fossil fuel industry and he has been doing his best—as he sees it—to do just that. More acreage open for lease sales for oil and gas exploration, a roll-back of environmental regulation to stimulate a revival in coal, and the import tariffs on solar panels are a few of the steps the President has taken in this direction. And yet, coal plants are getting retired at a faster pace than before. How come?

The problem of coal is a very basic market forces problem. Coal has simply lost its competitiveness against natural gas and increasingly cheaper solar and wind. No amount of pro-coal legislation can fix

that—at least not without doing some major damage to the gas and renewables industries, which is hardly something Washington wants.

Forbes’ Jeff McMahon reports estimates by analysts of coal plant capacity retirement that do not bode well for this segment of the fossil fuel industry. IHS Markit’s Max Cohen, for example, sees 100 GW of coal capacity retired over the next decade. Navigant is more cautions, expecting 73 GW of coal capacity to be retired in the period. MAKE Consulting is in the middle, forecasting the retirement of 80-90 GW of coal capacity in the coming decade.

In 2016, utilities retired or converted to natural gas some 13 GW of coal generation, and last May Reuters reported they planned to shut down or convert another 8 GW. By the end of the year, however, the retired coal generation capacity hit 22 GW, or 27 plants. The economics of coal has simply become unattractive.

US coal production expected to total 751 million st in 2018: EIA The US Energy Information Administration projects US coal production to total 751.2 million st in 2018, a 1.7% increase from the previous month’s projection, according to the agency’s monthly Short Term Energy Outlook released.

The agency did not give a reason for the higher estimate. The projected total would still be 2.7% lower than the 772 million st produced last year.

In 2019, it expects coal production to total 752 million st.

Power-sector coal consumption is projected to total 640 million st in 2018 and 633 million st in 2019, down from 665 million st in 2017. In 2018, the agency expects coal to make up 28.7% of US power generation, and 28.5% in 2019. Coal made up 30.1% of US power generation in 2017.

Power-sector gas consumption is projected to total 9.78 Tcf in 2018 and 10.2 Tcf in 2019, compared with 9.3 Tcf in 2017.Coal exports are projected to total 88.1 million st (79.9 million mt) this year, and 84.6 million st (76.7 million mt) in 2019 compared with 97 million st (88 million mt) in 2017.

Indonesia sees coal output flat in 2019 amid equipment shortage

Indonesia is targeting annual production of 481 million tonnes of coal this year and next, a mining ministry official said, as producers of the fuel are struggling to get new heavy equipment and parts.

Indonesia’s National Development Planning Board (BAPPENAS) has pushed for coal output to be capped at 400 million tonnes in 2019, but according to coal and minerals director general Bambang Gatot Ariyono that target needs to be “harmonised” with other considerations.

“Otherwise there could be idle capacity or (miners’) coal production could be sub-optimal,” he told reporters on the sidelines of the Coaltrans Asia conference.

Ariyono referred to environmental permits allowing output to reach 609 million tonnes this year and 651 million tonnes in 2019, and feasibility studies presenting other figures.

Amid concerns Indonesia could exhaust existing minable coal reserves of 13 billion tonnes 25 years, the government is considering measures to push miners to carry out exploration work before they can obtain permits to increase output.

Indonesian coal exploration has increased as “almost all” miners have increased their capital spending this year, Pandu Sjahrir, chairman of the Indonesian Coal Mining Association, told reporters.

Indonesian coal miners report healthy Q1 average selling price amid China demand Indonesian coal miners reported higher average selling prices in the first quarter of 2018, supported by strong Chinese demand and weather-related supply disruptions.

Rains have been impacting production at various producing regions in Indonesia over the past few quarters. However, miners were hopeful that they will be able to achieve their output targets for the full year 2018.

Indonesian miner Adaro Energy said first-quarter production fell 8% year on year as rains impacted output, even as average selling price during the period jumped 14% driven by strong demand in China.

Adaro produced 10.95 million mt in the first quarter and said it was on track to achieve its full-year target of 54 million mt-56 million mt.

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Sales volume for the first quarter fell 9% on the year to 10.93 million mt, the company said.

Although the company did not give details about the first-quarter average selling price, it said that Chinese demand was one of the primary factors driving prices higher.

China Considers More U.S. Coal Imports to Cut Deficit China is considering a plan to buy more American coal as part of an effort to narrow its trade deficit with the U.S., according to people with knowledge of the matter.

Chinese officials are currently looking at boosting purchases from West Virginia in particular, said the people, who asked not to be identified because they’re not authorized to speak publicly. They didn’t say whether Beijing is looking at buying more supplies from other states. A final decision hasn’t been made, they said.

The country’s top economic planner, the National Development and Reform Commission, referred questions to the National Energy Administration; officials there didn’t reply to an email seeking comment.

U.S. shipments counted for just a sliver of China’s total 2017 imports of the fuel

Coal exports dispute could inflict a $2 billion hit on Queensland’s state budget A coal exports dispute could inflict a $2 billion hit on next month’s Queensland budget, with Premier Annastacia Palaszczuk moving to reassure international steel makers ahead of her trade trip to Japan.

The stoush comes after the Queensland Competition Authority made a draft ruling in December, which would allow Aurizon to make $3.89 billion from its networks business from July 2017 to June 2021, $999 million less than Aurizon wanted.

Aurizon, which has a monopoly on the state’s coal rail network, said it would have to change its maintenance practices, leading to a reduction of up to 20 million tonnes in Queensland coal exports a year - or about 10 per cent of total exports.

It was expected the fight could cut about $500 million in Queensland government royalties each year, harming the budget bottom line.

22 | CCAI Monthly Newsletter May 2018

Impending strike at Canadian railway threatens coking coal supply Coking coal supply may be under threat as union members representing Canadian Pacific Railway staff served a notice to go on strike, the company confirmed.

In a notice filed, unions the Teamsters Canada Rail Conference-Train & Engine (TCRC) and the International Brotherhood of Electrical Workers (IBEW) issued a notice to CP of plans to strike.

“CP will continue to meet with the TCRC and the IBEW in the hopes of reaching agreements that are in the best interests of the entire CP family, its customers, shareholders and the broader North American economy,” the rail company said in a statement.

“CP has commenced its work stoppage contingency plan and will work closely with customers to ensure a smooth, efficient and safe wind down of operations.” it said.

Asia’s Energy Demand Helps America’s Coal Industry Boom While America chases windmill dreams and solar powered nightmares the rest of the world is running on coal. That’s good news for the USA because we just happen to have the largest coal reserves in the world.

Worldwide coal demand is surging and it appears the reports of the American coal industry’s death were greatly exaggerated.

Contrary to the liberal narrative of a global downturn, the U.S. coal industry has been making a comeback under the Trump administration. According to the Energy Information Administration’s newest numbers, American coal exports rose 61% in 2017. This resurgence is being fueled largely by growing demand in Asia.

With coal demand in South and East Asia set to grow steadily in the coming decades and the administration positioning itself as a strong advocate of America’s world-leading oil, coal, and gas industries, environmentalist groups are bemoaning a “climate catastrophe” in the making.

President Trump obviously doesn’t buy those warnings. He could, however, respond in a way that helps the U.S. economy and protects jobs in the energy sector: fast track the development of carbon capture technologies and start exporting those alongside American coal.

CCAI Monthly Newsletter May 2018

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IN PARLIAMENT GOVERNMENT OF INDIA MINISTRY OF COAL LOK SABHA Q. No. 526. COAL SUPPLIES TO POWER PLANTS 04.04.2018

Statement referred to in reply to parts (a) to (d) of Lok Sabha Starred Question No.526 for answered on 04.04.2018 asked by Shri G. Hari.

SHRI G. HARI::

(a) & (b): A number of important steps have been taken in the Government, in the Coal India Limited (CIL) and Singareni Collieries Company Limited (SCCL) to monitor and augment coal dispatches to the power houses. Some of the steps taken are:

Will the Minister of COAL be pleased to state: (a) whether the Government has taken up a series of measures to improve coal supplies to power plants after electricity prices crossed Rs.11 per unit at energy exchanges during last September; (b) if so, the details thereof; (c) whether the Government has decided to use dedicated rail transportation for coal movements; and (d) if so, the details thereof?

ANSWER MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL)

24 | CCAI Monthly Newsletter May 2018

i. Coal stocks at the power plants are monitored constantly on the basis of daily CEA reports, which form the basis for CIL to advice its subsidiary companies to plan the movement of rakes, with specific reference to critical/supercritical plants, in coordination with the Zonal railways. ii. In addition to the monitoring mechanism available at coal companies and CIL, coal supplies to Power Utility Sector is monitored regularly by an inter-ministerial sub-group comprising representatives of Ministry of Power, Ministry of Coal, Ministry of Railways,

Central Electricity Authority, Ministry of Shipping, NITI Aayog, CIL etc. This sub-group has been meeting periodically, at times twice every week, in order to take various operational decisions for meeting any

formation of Joint Ventures. There are 14 rail projects which will augment coal evacuation and these are regularly monitored in the Ministry.

contingent situations relating to Power Sector including critical coal stock position

Q. No. 6026. COAL PRODUCTION

04.04.2018

for power plants. iii. A committee of Secretary (Coal), Secretary (Power) and Member (Traffic), Railway Board has been jointly reviewing the coal transportation and supply on a regular basis. iv. Comprehensive monitoring has been done for coal movement through rakes from CIL sidings, Washery sidings and Goods sheds. v. There has been close monitoring of turnaround time of rakes at the loading and unloading ends. vi. An Innovative Monitoring Control Cell has been established in order to monitor supply related issues of the Power Houses and provide regular feedback to the MoC/CIL authorities. vii. In order to meet the coal requirement of thermal Power Plants, CIL has offered coal through road mode from the available pithead stock to those Plants which are located within 50 Kms to 60 Kms from the nearest mines. As a result, power plants located within 50 Kms to 60 Kms have taken coal to fulfill their immediate coal requirement. viii. Coal supplies to Power Sector from CIL have grown by 20%, 19%, 17%, 9% and 3% during the months of August-2017, September-2017, October-2017, November-2017 and December-2017 respectively over coal supplies during corresponding months of the last year. (c) & (d): To improve coal supplies to power plants, Indian Railways have augmented rakes availability for loading of coal to power plants. Turnaround time of rakes at loading end has improved. These efforts and close monitoring have resulted in increase in coal supplies to power plants from the level of 219 rakes per day from CIL sidings in September, 2017 to 270.6 rakes per day in March, 2018. Besides the rail projects which have been undertaken by the Railways, CIL has collaborated with the Indian Railways to undertake construction of railway lines on deposit basis and in the States of Jharkhand, Odisha and Chhattisgarh by

SHRI B.N. CHANDRAPPA::

Will the Minister of COAL be pleased to state: a) whether coal is a vital resource for the progress of country, if so, the details thereof; b) the total number of coal mines operating in the country as on date; c) the total capacity of the coal mines and total production of the coal during the last three years; d) whether adequate coal is being made available to the plants in the country; if so, the details thereof; e) if not, the reasons therefor and the steps taken by the Government for increasing the work efficiency of coal mines to produce more coal to supply to all the plants in the country; and f) whether any strategy has been formulated to ensure supply of coal to plants, if so, the details thereof?

ANSWER MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL) (a): Coal is the prime source of energy in India and as per draft “National Energy Policy� prepared by NITI Aayog, coal will remain as an important source of energy and electricity even in near future due to abundance of coal in India and that too at a cheaper rate. (b): The total number coal mines in Coal India Ltd. (CIL),Singareni Collieries Company Limited (SCCL), Public and Private Sectors as on 31.03.2017 and total annual production from these mines during 2016-17 is given below: (Million Tonnes) Sector

Number of collieries

Production

Public

14

9.720

Private

21

34.076

CIL

394

559.14

SCCL

48

61.34

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(c): Production of coal during the last three years is given below: (Million Tonnes) 2014-15 2015-16 2016-17

2017-18 (Prov.)

Production 609.179 639.230 662.772 676.509 (d): In the year 2017-18, against the pro-rata AAP target (Apr-Feb’18) of 408.6 MT in CIL, supply of about 411.3 MT coal is been made to power sector thereby achieving materialization of 101% during the period.

Electricity Corporation Ltd. (GSECL) and National Thermal Power Corporation (NTPC) for swapping of 1.0 MT of domestic coal with imported coal. Further, CIL has rationalized sources of coal supply to TPPs of PSUs to the tune of 30.46 MT on the basis of the requests received from them. These have resulted in annual potential savings of Rs.3354 cr. Further, Government has permitted flexibility in utilization of domestic coal by allowing central/state utilities to use coal in such power plants to achieve overall reduction in cost of generation.

Introduction of state of the art technology to improve its work efficiency with high capacity HEMMS like 42 cum shovel with 240T Rear Dumper.

In addition to the above, it has been decided that all Power Plants located within 20 km from Pithead shall construct elevated closed belt conveyor within next 2 years (up to 1st April 2020). Further, it is also decided that the power plants located within 40km from Pit- head shall construct MGR within 3 years (up to 1stApril 2021). Power plants located beyond 40 km and up to 100 km, may also consider the option of MGR depending on the financial viability.

Introduction of Surface Miners in opencast mines to improve operational efficiency & cater to environmental needs.

Q. No. 6126. PRIVATIZATION OF COAL SECTOR 04.04.2018

Introduction of In-pit crushing & conveying/in pit conveying.

SHRI LAKHAN LAL SAHU::

Introduction of mechanized mass production technology like powered support long wall technology and continuous miner in UG mines.

a) the details of production of coal during each of the last two years;

(e): CIL has taken the following measures to improve the work efficiency of coal mines: Planning for higher capacity mines with heavy mechanization to take advantage of economy of scale.

Thrust on mechanization of coal winning/loading system by gradually phasing out manual loading by SDL/LHD loading, manual drilling into UDM drilling, haulage system of transport to conveyor system wherever feasible.

Construction of silos with rapid loading system for faster loading.

For survey/check measurements, use of technology like Terrestrial Laser Scanner (TLS). (f): With a view to optimize transportation cost, an inter-Ministerial Task Force (IMTF) was constituted

by Ministry of Coal for a comprehensive review of existing coal sources as also feasibility for rationalization of these sources. The IMTF recommended rationalization of existing sources on case to case basis for 19 Thermal Power Plants (TPPs) of Public Sector Undertakings(PSUs). This has resulted in rationalization of sources of 24.238 MT of coal. In addition, an agreement was signed between Gujarat State

26 | CCAI Monthly Newsletter May 2018

b) whether there has been any increase in the coal production after allowing private companies in this sector; c) if so, the ratio of coal production of Coal India Limited along with the details thereof in comparison to coal production of the private sector; d) the manner in which the Government has utilised the coal produced by the private companies and the revenue received therefrom; and e) the State/Union Territory-wise royalty paid to the Government by the above private coal companies?

ANSWER

MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL) (a): As per Coal Controller’s Organization (CCO), all India coal production has increased from 639.23 MT in

2015-16 to 662.79 MT in 2016-17. (b): Coal production by private sector has increased from 32.55MT in 2015-16 to 34.08 MT in 2016-17. (c): The details of company-wise coal production are as under: ( in Million Tonnes) COMPANY CIL SCCL Other Public Sector Private All India

2015-16 538.75 60.38 7.55 32.55 639.23

2016-17 554.14 59.53 15.04 34.08 662.79

Coal India Limited (CIL) has produced around 84% of total coal production in 2015-16 & 2016-17. The ratio of production of coal by private sector to all India coal production was 5.09% in 2015-16 and 5.14% in 2016-17.

Q. No. 6137. ENHANCING QUALITY AND PRODUCTION OF COAL 04.04.2018 DR. HEENA VIJAYKUMAR GAVIT: DR. J. JAYAVARDHAN:

ANSWER MINISTER OF RAILWAYS AND COAL ( SHRI PIYUSH GOYAL)

a) &(b): The following research works which have been carried out in Government institute / organization to enhance the quality and production of coal in the country: Design of cost effective process flowsheet for improved washing efficiency of Indian Coking and Non-coking coals. (Implementing Agencies: IITISM, Dhanbad, CMP Division, CMPDI(HQ), Ranchi and BCCL, Dhanbad). Date of Start: 17.04.2017 and Scheduled date of Completion: 16.07.2019. Under this project, literature survey has been completed.

Dry beneficiation of high ash Indian thermal coal.

(Implementing

Agencies:

National

Metallurgical

Laboratory (NML), Jamshedpur, CMP Division, CMPDI(HQ), Ranchi and MCL, Sambalpur). Date of Start: 01.09.2017 and Scheduled date of Completion: 31.01.2019. Under this project, literature survey has been completed. Collected samples from MCL with

Will the MINISTER OF COAL be pleased to state : a) whether any research work is being carried out in Government institutes to enhance the quality and production of coal to the country, b) if so, the details thereof along with the progress achieved including the number of personnel engaged in research/administration/services in these institutes, c) whether the amount of investment on research and development in coal sector is adequate; d) if so, the amount spent by the Government on these institutes during each of the last three years and the current year; and e) whether the Government plans to enhance investment in research and development in the coal sector and if so, the details thereof? A

more than 34% ash percentage will be analysed in the laboratory.

Design and Stability of Pillars/Arrays of Pillars for Different Mining Methods in Coal Mine Workings.

(Implementing Agencies: Central Institute of Mining and Fuel Research (CIMFR), Dhanbad, IIT-ISM, Dhanbad, CMPDI, Ranchi, South Eastern Coalfields Ltd. (SECL), Bilaspur, Bharat Coking Coal Ltd. (BCCL), Dhanbad and Singareni Collieries Co. Ltd. (SCCL), Kothagudem). Date of Start: 16.03.2018 and Scheduled date of Completion: 15.03.2020. (c): The amount of fund released for the research and development in coal sector is sufficient to meet the expenditure of the approved S&T projects. Details of funds received and expenditure incurred on R&D activities in mining sector by the Ministry of Coal & Coal India Limited during the last 3 years and the current year are as follows:

CCAI Monthly Newsletter May 2018

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(Rs. in Crores) 2014-15

2015-16

2016-17

2017-18

Funds received

Actual

Funds received

Actual

Funds received

Actual

Funds received

Actual

32.84

29.68

24.25

22.47

34.90

24.04

63.04

70.74* (till 29.03.2018)

*Utilizing unspent amount from the previous year (d): Details of funds disbursed on S&T/R&D activities by MoC and CIL on the above Institutes/Organisations during the last 3 years and the current year are as follows: (Rs. in Crores) Institutes/ Organisations

2014-15

2015-16

2016-17

2017-18

IIT-ISM

0.80

2.30

7.83

42.40

CIMFR

7.35

2.25

3.18

4.37

CMPDI

6.05

5.91

3.47

1.30

NML

Nil

Nil

Nil

1.25

(e): Government has provided a budget of Rs 10 Cr under central sector scheme in 2018-19 in S&T against the expenditure of Rs 8.8.Cr in 2017-18. (d): In case of coal mines allocated to private companies, coal is produced for captive use only and can be used only in the specified End Use Plants of the allocattee. The revenue generated from these coal mines are deposited with the respective host States where the coal mines are situated and its utilization is being done by the State Governments. (e): The information in respect of royalty paid to the State/Union Territory Government by private coal companiesis not maintained by Ministry of Coal.

28 | CCAI Monthly Newsletter May 2018

GOVERNMENT OF INDIA MINISTRY OF COAL RAJYA SABHA Q. No. 4532. Details of coal blocks 06.04.2018 SHRI T. K. RANGARAJAN:: Will the Minister of COAL be pleased to state: a) the number of coal blocks auctioned till now; b) the number of coal blocks which are operational; c) the number of coal blocks which are not operational; and d) the steps taken by Government to make the non-operational coal blocks operational?

ANSWER MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL) (a): Hon’ble Supreme Court of India had cancelled the allocation of 204 coal mines. The allocation of these 204 coal mines is being made under the provisions of the Coal Mines (Special Provisions) Act, 2015 and the Rules made thereunder. So far, the Government have allocated 31 coal mines (17 mines in Schedule II & 14 mines in Schedule III) by way of auction as per the provisions of the said Act and the Rules made thereunder. These 31 coal mines include 5 coal mines (2 Schedule II & 3 Schedule III) in respect of which Coal Mine Development and Production Agreement (CMDPA)/ Vesting Order have been terminated/notices for termination have been issued for non-compliance of various terms and conditions of the Agreement. (b) & (c): Out of the 17 Schedule II coal mines auctioned under the provisions of the Coal Mines (Special Provisions) Act, 2015 which were operational before cancellation by the Hon’ble Supreme Court, mining

operations have commenced/mine opening permission has been granted in 12 coal mines. In respect of the remaining 5 non-operational as well as one operational Schedule II coal mines, action has been taken as per the provisions of Coal Mine Development and Production Agreement. Schedule III (non-operational) coal mines were at different stages of development at the time of allocation. Out of the 14 Schedule III coal mines auctioned, mine opening permission was granted for 1 coal mine and the remaining Schedule III coal mines are scheduled to be operational from 2018 onwards. Of these14 Schedule III auctioned coal mines, CMDPA in respect of 2 coal mines have been terminated in compliance to Hon’ble High Court of Delhi Order whereas CMDPA/Vesting Order in respect one coal mine has been terminated due to violation of terms and conditions of tender document as well as CMDPA. (d): Status of all the allocated coal mines are reviewed at the highest level and meetings with Successful Bidders/Allottees and Nodal Officers of State Governments as well as other stakeholders are held regularly by Nominated Authority in Ministry of Coal.

Ministry of Coal is in constant engagement with various stakeholders for enabling expeditious commencement of mining operations. A Monitoring Committee has been constituted under the Chairmanship of Secretary (Coal) with Secretary (MoEF & CC), Chief Secretaries of respective host States, Coal Controller and representative from CMPDIL as members, to review the operationalization of the coal mines allocated so far. The Committee is mandated to review the operationalization of coal mines on monthly basis. A Committee of Secretaries has also been constituted by the Cabinet Secretariat to review the operationalization of already allocated coal mines.

CCAI Monthly Newsletter May 2018

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Q. No. 4533. Increasing coal supply to power plants

06.04.2018

SHRIMATI VIJILA SATHYANANTH:: Will the Minister of COAL be pleased to state: a) whether it is a fact that Government has asked the Railways to increase coal loading to upto 500 rakes per day to meet power demand in summer; b) if so, the details thereof; c) whether it is also a fact that more than 50 power plants have coal stock less than the stipulated level; and if so, the details thereof?

ANSWER MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL) (a) & (b): An aspirational plan for loading 342 rakes per day from Coal India Limited (CIL) Sidings, Washeries and Private Good Sheds has been formulated. Out of this, 284 rakes per day has been planned for supply to Power Sector. Against this target, the actual loading in March, 2018 for power sector has been 274.1 rakes per day and overall rake loading of 309.1 rakes per day. The overall rake loading from CIL has increased from 221.8 rakes per day in 2016-17 to 229.2 rakes per day in 201718. However, the rake loading to power sector from CIL has increased from 188.3 rakes per day in 2016-17 to 201.7 rakes per day in 2017-18, thereby achieving a growth of 7.12% in one year. (c) & (d): As per Central Electricity Authority (CEA) report dated 27.03.2018, total 26 plants have been categorized as Critical and Supercritical plants. The details of such plants are given below: STATUS OF SUPER CRITICAL/CRITICAL POWER PLANTS AS PER LIST DATED 27.03.2018 OF CEA

Srl no

State

Name of the Power House

1

Haryana

Mahatma Gandhi TPS

6

Critical

2

Haryana

Panipat TPS

1

Super Critical

3

Haryana

Rajiv Gandhi TPS

2

Super Critical

4

Rajasthan

Kota TPS

3

Super Critical

5

Uttar Pradesh

Prayagraj

4

Critical

6

Chhatisgarh

Balco

4

Critical

7

Chhatisgarh

Nawapara

4

Critical

8

Gujarat

Gandhinagar

5

Critical

9

Gujarat

Wanakbori TPS

1

Super Critical

10

Gujarat

Sabaramati TPS

1

Super Critical

11

MP

Satpura/ Sarni

3

Super Critical

12

MP

Seioni/ Jhabua Power

1

Super Critical

13

MP

Shri Singhaji TPP

6

Critical

14

Maharastra

Amaravati TPS

6

Critical

15

Maharastra

Dahanu TPS

2

Super Critical

16

Maharastra

Dhariwal TPP

1

Super Critical

30 | CCAI Monthly Newsletter May 2018

Stock as on 27.03.18 as per CEA (in days)

Super Critical/ Critical

17

Maharastra

GMR Warora TPS

2

Super Critical

18

Maharastra

Mauda TPS

0

Super Critical

19

Maharastra

Nasik TPS

5

Critical

20

Maharastra

Paras TPS

6

Critical

21

Maharastra

Parli

2

Super Critical

22

Maharastra

Solapur TPS

3

Super Critical

23

Andhra Pradesh

Dr N Tata Rao TPS

2

Super Critical

24

Andhra Pradesh

Simhadri TPS

3

Super Critical

25

Karnataka

Raichur

2

Super Critical

26

Tamil Nadu

N Chennai (Tangedco)

4

Critical

Q. No. 4535. Ensuring higher transportation of coal 06.04.2018 SHRI T. RATHINAVEL:

Will the Minister of COAL be pleased to state: (a) whether it is a fact that Government would depute its officials to coal companies in order to ensure higher transportation of coal to the siding and faster loading of rakes; (b) if so, the details thereof; (c) whether it is also a fact that coal supplies have not improved since last monsoon when some of the power plants had faced acute coal shortage; and (d) if so, the details thereof?

ANSWER MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL) (a) & (b): Coal supply position has been jointly reviewed regularly by Secretary (Coal), Secretary (Power) and Member (Traffic), Railway Board with Coal India Limited (CIL) & its subsidiaries and Singareni Collieries Company Limited (SCCL) and various steps have been taken to ensure required transportation of coal to the sidings and faster loading of rakes. (c) & (d): Failure on the part of the power houses to stock adequate coal, as per Central Electricity Authority (CEA) norms, during the lean power generation period coupled with unexpected spurt in demand for thermal power arising out of drop in power generation from other sources resulted in increased demand of

coal by power plants during the second quarter of 2017-18. However, the coordinated efforts of Ministry of Coal, Ministry of Railways, CIL & it subsidiaries and SCCL ensured stepping up supplies to Power Sector.

In fact, coal supplies to Power Sector from CIL grew by 20%, 19%, 17%, 9% and 3% during the months of August’17, September’17, October’17, November’17 and December’17 respectively over the supplies during the corresponding months of 2016-17.

Q. No. 4538. Joint ventures of CIL with Railways for coal evacuation 06.04.2018 SHRI DEREK O’BRIEN Will the Minister of COAL be pleased to state: (a) whether the railway infrastructure projects are being constructed by Joint Venture companies formed

by Railways and Coal India Limited (CIL) for the growth in production of coal in future, if so, the details and the current progress thereof; (b) the status of the railway links announced by Singareni Collieries Company Limited for coal evacuation; and (c) whether there are other projects which the Ministry has collaborated with Ministry of Railways in the recent times for transportation of coal, if so, the details thereof?

ANSWER MINISTER OF COAL AND RAILWAYS ( SHRI PIYUSH GOYAL ) (a): Yes Sir. Railway infrastructure projects are conCCAI Monthly Newsletter May 2018

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structed by Joint Venture companies formed by Railways and Coal India Limited (CIL) for the growth in production and offtake of coal. Joint venture companies have been formed for development and operations of Railway Projects for the evacuation of the coal from the mines of CCL, MCL and SECL. Joint venture companies were formed by respective coal company, IRCON (participating on behalf of Railway), & Govt. of respective state i.e. Jharkhand, Odisha & Chhattisgarh with equity participation of 64:24:10 respectively.

The projects taken up by various joint venture companies are as follows: 1. Jharkhand Central Railway Limited (JCRL) in Jharkhand • Shivpur-Kathotia rail line (49.085 km) to be completed by March 2020.

2. Mahanadi Coal Railway Limited (MCRL) in Odisha

(136 km approx.) to be completed by Dec 2020.

3. Chhattisgarh East Rail Corridor: • East Rail Corridor Phase 1 - Kharsia- Dharamjaigarh with Spur to Gare-Pelma and 3 Feeder Lines, Length: 132 km at an estimated cost of Rs. 3055 Crore.

Planned completion by Sep 2018.

• East Rail Corridor Phase 2: Dharamjaigarh – Korba, length of about 62.5 km. The estimated cost is Rs. 1555 Crore. The DPR is under finalization.

4. Chhattisgarh East-West Rail Corridor: • Gevra Road to Pendra via Dipka, Katghora, Sindurgarh and Pasan has a length of 135 km. Urga- Kusmunda has a length of about 16 km and Feeder Lines of about 35 km. The estimated cost of the project is Rs. 4970 Crore. Planned completion by March 2020. (b) : Status of railway links announced by SCCL which are being executed by Railways on deposit basis:

• 1st PHASE of Angul-Balram-Jarpada-Tentuloi link at Talcher Coalfield of MCL (69.10 km) - consists of Jharpada-Kalinga-Angul link (14.22 km); Phase-I work is estimated at a cost of Rs. 1300.00 Crore (approx.) excluding the cost of land. This includes the work of single line connectivity with future provision of doubling and scheduled to be completed by Dec 2018.

Bhadrachalam Road to Sattupalli Railway line

• 2nd PHASE: Tentuloi- Budhapunk – as phase - II

• Tenders for construction of minor bridges, major

32 | CCAI Monthly Newsletter May 2018

• Total length of track: 53.20 km at a cost of Rs. 704.30 Crore. (SCCL share- Rs. 618.55 Crore & S.C.Railways share - Rs. 85.76 Crore) • Amount so far deposited by SCCL to SCR is Rs. 156.38 Crore and balance amount will be paid as and when demanded by Railways.

bridges and other related works are awarded.

Railway siding for KK1 CHP, Mandamarri:

• Land acquisition by S.C. Railways in progress.

• Total length of track: 8.50 km at a cost of Rs. 65.90 Crore.

Goleti Railway siding: • Total length of track : 3.50 km at a cost of Rs 28.00 Crore.

• Work completed.

07.02.2018.

Rolling

stock

moved

on

Status of other Railway projects being executed by SCCL currently: Railway line for 2X600MW STPP Jaipur: • Total length of track: 33.00 km at a cost of Rs. 452.65 Crore.

• Earth work formation, CD works, RoBs/ RUBs, Procurement of Permanent way materials completed.

Track linking work is in progress.

• Expected to complete by 2018-19.

Railway line from Bethampudi railway station to Koyagudem • Total length of track: 9.30 km at a cost of Rs. 81.31 Crore.

• DPR approved by Railways.

• Land acquisition including forest land is in process.

• DPR submitted to Railways for approval. (c) : CIL on behalf of MoC has also undertaken construction of railway lines on ‘deposit-basis’ with the Indian Railway other than the JVs, the details of which are as follows: • Tori- Shivpur Rail Link: Project involves rail connectivity for a length of 44.37 km for catering to North Karanpura coalfield of CCL. The estimated cost of the project is Rs. 2399 Crore (approx.). The project is being implemented by EC Railways on deposit basis. Construction of rail line upto Balumath (19.37 km) is complete and was inaugurated on 09.03.2018.

Anticipated completion of rail line upto Bukru (26.3 km from Tori) was by March 2018. EC Railway has revised the time line for completion of rail line work up to Shivpur (i.e. 44 km) i.e. by June 2018.

• Jharsuguda- Barpali- Sardega Rail Link (length of 52.412 km): Project involves rail connectivity for catering to Ib-Basundhara coalfields of MCL. The Revised Project cost is Rs. 1044 Crore (with signaling).

The project was implemented by SE Railways. All rail linking work has been completed and is likely to be commissioned shortly after statutory clearances.

CCAI Monthly Newsletter May 2018

| 33

MONTHLY SUMMARY OF DOMESTIC COAL Comparative Price of Domestic Coal: Power/Non-power. *The price shown in the Chart below is without: (a) Surface Transportation Charges. (b) State specific taxes. (c) Coal company or area wise charges if any. (d) Evacuation Facility Charges INR 50 per tonne w.e.f. 00:00 of 20.12.2017 GCV (Kcal/kg) (Mid-value)

G3-6400-6700

G5-5800-6100

G7-5200-5500

G10-4300-4600

G11-4000-4300

G12-3700-4000

Basic ROM price (Rs./te)

3144/ 3144

2737/2737

1926/2311

1024/1228

955/1145

886/1063

Tentative Ex-Mine Price*

4447/4447

3941/3941

2932/3411

1809/2063

1724/1959

1638/1858

COAL The ministry of coal is focussing on clean coal technologies for producing clean coal as it would stay on as a primary input for producing thermal power in near future.

Government has decided to augment coal supplies to centre/ state power plants and independent power producers (IPPs) from May 19 to June 30 to overcome shortage of the dry fuel and check power crisis.

The Narendra Modi-government will be putting up for auction a score of coal mines by June-end this year after tweaking some rules, besides starting work on the auctioning of around 288 iron ore and other mineral-bearing mines in the next financial year.

RAILWAYS With coal stock of some power stations in the national capital region falling to an alarming level, the Railways has drawn up an action plan to increase supply of rakes to power plants in northern India, including Dadri.

Indian Railways is committed to ensuring adequate coal supplies in power plants serving Delhi. Keeping in view the higher power demand in the last few days, supply of rakes for transporting coal to power plants (supplying power to Delhi) has been further stepped up, the Railways said in a statement replying Delhi Chief Minister Arvind Kejriwal’s claim that the power plants in the national capital were facing a shortage of coal.

34 | CCAI Monthly Newsletter May 2018

POWER As summer heats up with power demand also touching new records, the power sector fears that the coal situation might get uncomfortable in the coming days. The coal ministry has directed Coal India Limited to divert more “out-of-turn” coal to state and central power generating companies and this has made the private players uncomfortable.

Coal India Ltd (CIL) will develop its first-ever thermal power plant in the country in Odisha, a top company official said. The project, which will have a capacity of 1,600 MW (2x800 MW), will be implemented through CIL’s subsidiary, Mahanadi Coalfields Ltd (MCL).

Increased demand for thermal power and less-than-adequate coal supply have pushed spot power prices to a two-year high of Rs 6.20 per unit on Tuesday and this spike is likely to be passed on to citizens of some states.

CEMENT Due to rising prices of pet coke, coal and diesel, cement firms in India may face pressure on their profit margins in the near term. In its monthly update on India’s cement sector, ratings agency said that an increase in coal and pet coke prices and increase in diesel prices in the near term are likely to continue to put pressure on the profitability margins and debt metrics of the cement companies.

STEEL India’s total export of finished steel increased by 16.7% to 9.621 million tonnes (MT) in 2017-18, according to an official data. The country had exported 8.242 MT finished steel during 2016-17 fiscal, the Joint Plant Committee (JPC) said in a report.

CCAI Monthly Newsletter May 2018

| 35

36 | CCAI Monthly Newsletter May 2018

Source CEA

TOTAL

BHUTAN IMP

HYDRO

60.9

56.51

61.33

65.34

14

13

NUCLEAR

ACTUAL*

MAY-2018

1265000

PROGRAM

274821.51

THERMAL

Category

TOTAL

5000

130000

0

45403.42

BHUTAN IMP

HYDRO

38500

6780

1091500

222638.09

2

NUCLEAR

1

107730

325

11820

2716

110608.6

297.49

10637.61

3093.51

96579.99

4

3 92869

ACTUAL*

PROGRAM

55.67

63.55

15

ACTUAL SAME MONTH 2017-18

107294.92

292.3

12417.88

2807.94

91776.8

5

ACTUAL SAME MONTH 2017-18

MAY-2018

102.67

91.54

90

113.9

104

6

% OF PROGRAM (4/3)

AN OVERVIEW

55.24

61.03

16

PROGRAM

64.48

65.14

17

ACTUAL*

60.58

64.06

18

ACTUAL SAME PERIOD 2017-18

APRIL 2018 - MAY-2018

PLANT LOAD FACTOR (%)

Monitored Target Capacity Apr 2018 to (MW) Mar 2019

THERMAL

Category

SUMMARY- ALL INDIA

103.09

101.78

85.66

110.17

105.23

7

% OF LAST YEAR (4/5)

209227

500

20477

5224

183026

8

PROGRAM

GENERATION (GWH)

ACTUAL*

10

ACTUAL SAME PERIOD 2017-18

214499.45

320.8

18194.42

6399.95

210454.68

492.4

22602.88

6013.04

189584.28 181346.36

9

PERIOD : MAY 2018

102.52

64.16

88.85

122.51

103.68

11

101.92

65.15

80.5

106.43

104.54

12

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

APRIL 2018 - MAY-2018

ENERGY GENERATION REPORT

MONTHLY SUMMARY OF IMPORTED COAL & PETCOKE Coal Price Index COAL

(kcal/kg)

Price - FOB

Price - FOB

Monthly Change (USD)

South Africa

6000 NAR

USD 99.71

INR 6731

7.89

South Africa

5500 NAR

USD 87.42

INR 5902

7.92

Australia

5500 NAR

USD 76.22

INR 5145

5.81

Indonesia

5000 GAR

USD 63.25

INR 4270

1.81

Indonesia

4200 GAR

USD 45.06

INR 3042

3.88

PET COKE

Sulphur

India-RIL(Ex-Ref.)

-5%

INR 9050

Price

Saudi Arabia (CIF)

+ 8.5%

INR 7223 ($107)

USA (CIF)

- 6.5%

INR 7629 ($113)

Exchange Rate

Change (Monthly)

USD/INR 67.509

1.75

Coking Coal Price: Premium Low Vol

HCC 64 MID Vol

Semi Soft

Low Vol PCI

Mid Tier PCI

MET COKE 62% CSR

FOB Aus

CFR China

FOB Aus

CFR China

FOB Aus

FOB Aus

FOB Aus

CFR India

FOB N China

185.48

195.48

170.40

182.93

117.98

138.65

137.65

343.20

327.20

CCAI Monthly Newsletter May 2018

| 37

South Africa: Coal is abundant across Africa. South Africa alone has around 200 billion tonnes – enough to keep the lights on for at least 200 years, according to figures by government electricity utility Eskom, which wants to be able to use the resource for more power generation.

South African thermal coal prices rose as lingering supply issues coupled with talk of increased buying from national utility Eskom kept sentiment bullish in the market.

Australia: The Australian government said in its fiscal 20182019 (July-June) budget released that it expected Newcastle basis 6,000 kcal/kg NAR thermal coal to stay above $93/mt FOB through 2019-2020.

Coal exports from Australia’s North Queensland hit a one-year low in April due to Tropical Cyclone Iris and scheduled maintenance at one of the three ports in the region, data from the North Queensland Bulk Ports Corporation showed.

Indonesia: Indonesia’s coal industry is enjoying a resurgence, driven both by rising demand from China—the world’s biggest consumer of the fossil fuel—and a push by the government in Jakarta to build more coal-fired power plants.

Indonesia’s Ministry of Energy and Mineral Resources set its May thermal coal reference price, also known as Acuan HBA, at $89.53/mt, down 5.5% month on month, but up 7% year on year. The ministry had set the price for April at $94.75/mt, and for May 2017 at $83.81/mt.

USA: As demand for coal in the U.S. declines, miners depend increasingly on overseas markets. Yet

38 | CCAI Monthly Newsletter May 2018

Wyoming and Montana’s Powder River Basin, home to the nation’s largest reserves, is largely cut off from the world market without West Coast ports.

The US Energy Information Administration projects US coal production to total 751.2 million st in 2018, a 1.7% increase from the previous month’s projection, according to the sources.

Pet Coke: The global petcoke market is waiting for certainty from India, as well as a possible tax on imports in Turkey, but bullish sentiment and higher coal prices have pushed up US FOB prices.

Indian Government plans to propose banning burning petroleum coke as a fuel nationwide to comply with a Supreme Court request as part of a long-running case to clean the country’s air,

Shipping: Freight rates for shipping coal from northern China’s Qinhuangdao port to the other Chinese ports of Zhangjiagang, Shanghai and Guangzhou in eastern and southern China fell in the week to Tuesday, May 29, port operator Qinhuangdao Port said.

The Oakland City Council voted unanimously Monday to block the handling and storage of coal in Oakland, effectively halting a developer’s controversial plan to ship coal from the port.

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

MAY'18

APR'18 - MAY'18

AAP TARGET

ACTUAL

% ACH

AAP TARGET

ECL

4.17

3.8

91

8.21

7.62

93

27.4

BCCL

2.97

2.94

99

5.94

5.38

91

19.1

CCL

5.22

4.1

79

9.72

7.71

79

12.2

NCL

8.3

8.44

102

16.34

16.41

100

16.8

WCL

3.56

3.5

98

6.69

6.9

103

25.1

ACTUAL

% ACH

% GROWTH

SECL

14

13.94

100

25.39

26.8

106

27.4

MCL

12.9

10.37

80

25.61

21.09

82

-0.3

NEC

0.05

0.045

100

0.09

0.09

100

83.5

CIL

51.16

47.14

92

97.99

91.99

94

16.2

OFFTAKE (Figs in Mill Te) MAY'18

SUB CO.

APR'18 - MAY'18

AAP TARGET

ACTUAL

% ACH

AAP TARGET

ACTUAL

% ACH

% GROWTH

4.36

4.31

99

8.61

8.48

98

32.6

BCCL

3.8

3.2

84

7.51

6.25

83

15.4

CCL

7.26

6.4

88

14.35

12.38

86

15.9

NCL

8.59

8.44

98

16.96

16.57

98

15.2

ECL

WCL

5.1

4.63

91

10.08

9.05

90

23.4

SECL

14.57

13.85

95

28.78

26.89

93

7.5

MCL

14.44

11.98

83

28.53

24.09

84

8.4

NEC

0.05

0.05

120

0.11

0.13

119

0.8

CIL

58.18

52.86

91

114.92

103.84

90

13.4

40 | CCAI Monthly Newsletter May 2018

WELCOME TO A FUTURE OF SEAMLESS LOGISTICS

INDIA'S BEST COAL HANDLING AGENCY We handle by rail annually

20 million tonnes of coal

We transport annually

25 million tonnes of materials

We operate from

48 locations all over india

We employ

1700 experienced personnel

Equipment & machinery

456 trucks / 161 dumpers etc.

52 excavators 52 loaders 14 cranes

Our three stockyards handle

3 million tonnes of steel annually

We have

over 50 years of experience

We enjoy

a spotless reputation

NARESH KUMAR & COMPANY PVT. LTD. 9B, WOOD STREET (5TH FLOOR), KOLKATA-700 016, INDIA Phone: + 91-33-22838070/ 71 / 72 / 73 / 74 / 76 /77 Fax: + 91-33-2283 8079 E-mail: headoffice@nkcpl.com Website: http://www.nkcpl.com

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44