CCAI NEWSLETTER DEC-18

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Vol. XLVI No. 21 Published on : 28.12.2018

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From the Editor’s Desk

Coal stock situation at power plants has improved in Decem ber 2018 than last few months (10 days of inventory). Power pla nts having critical or super critical levels of inventory have come dow n to 10 only. Coal Minister Piy ush Goyal said that there is no sho rta ge of coal in power plants during April-November of this fiscal.

In terms of supply to the power plants, more than 8% growth has been achieved by CIL for the period of April-November 2018 com pared to the supply in the correspon ding period of last year.

Though coal stock situation has improved sharply but invent ory levels at power plants are stil l below than the prescribed leve l of 30 days of inventory mandated

by CERC. Huge rakes are also pen ding for non-power sector as wel l.

While demand of coal from pow er sector exceeding supply in 2018, the government is hopeful of higher output from already allo cat ed mines in the new year and pla ns to fur ther allot 10 mines to CIL in 2019. Of the 85 mines already allotted, 23 have started pro duction and the coal ministry expect s 20 more mines to begin pro duc tion in the current financial year end ing March 2019 or early in the next fiscal.

To avoid shortage of coal in non-power plants, Coal India has decided to supply 25% of its planned production to the said sector and it would continue into 20 19-20 as well. The miner is exp ected to supply total 680 million ton nes of coal during the curren t fiscal.

Coal India will be able to rea ch near its aspirational goal of producing 1 billion tonne by 2022-23 if all the eight pro posed railway corridors are in place by then. Unless there can be a suppor t system to evacuate an increm ental coal production of 350 million tonne per annum, increasing mine productivity would be fruitless.

By opening the door to privat e players for commercial min ing, the coal sector this year witnes sed its biggest reform in over four decades. However, it may stil l take some five to seven yea rs bef ore coal blocks are auctioned and results become visible as explora tion and mine development for act ual production of private com mercial mines begin.

4 | CCAI Monthly Newsletter December 2018

Content Vol. XLVI No. 21 December 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.

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

08 Power

Editor : Subhasri Nandi

12 Domestic

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.

16 Global

20 |In Parliament 48 |Monthly Summary Of Domestic Coal 50 |Energy Generation Report 51 |Overall Domestic Coal Scenario 52 |Monthly Summary Of Imported Coal & Petcoke

54 |Production And Offtake Performance Of Cil And Subsidiary Companies CCAI Monthly Newsletter December 2018

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CONSUMERS’ PAGE Present Coal Scenario Production and offtake of CIL have reduced in December 2018 due to low power demand and higher coal imports. Coal production fell by 0.9% compared to 54.13 mn tonnes in the same month of last year. Total production for the period of April to December 2018 is 412.45 million tonnes, a growth of 7.4% compared to the same period last year.

Offtake stood at 52.77 million tonnes in December 2018, also down by 1.2% compared to 53.44 million tonnes in same month of 2017. Thus, total offtake for the period of April-December is 444.59 million tonnes, a growth of 5.5% compared to the same period last year.

Consumers’ Concern 1. Coal Stock Position Coal stock levels at power plants are 16.4 mn tonnes (10 days of inventory) with 10 plants having critical or super critical levels of inventory. This shows an improvement from the last month which was 12.85 mn tonnes (8 days of inventory).

However, coal stock levels are still well below than the prescribed level of 30 days of inventory mandated by CERC. Power demand likely to be higher in FY19 and FY20 than previous years and CIL need to quickly ramp up its existing expansion plans.

2. Request for conducting Special Forward e-Auction from MCL

06 | CCAI Monthly Newsletter December 2018

Due to shortfall in FSA coal, consumers are highly dependent on purchase of indigenous coal from different auctions. Though Coal India has taken several measures and initiatives to increase the quantity offered in Special Forward Auctions for Power Sector but the last Special Forward Auction was conducted in MCL on August, 2018 only. Therefore, Power Sector consumers have requested MCL to conduct Special Forward Auction with sufficient quantity from IB valley and Kulda &Basundhara Areas so that they can atleast fulfill their PPA Obligations at the earliest possible.

3. Supply of rakes from CIL Subsidiaries Coal stock situation at both Power plants and small, medium and even big industries are yet to recover completely from the crisis. Though loading of number of rakes have started increasing in comparison

to last few months, but more rakes would be required from all the Subsidiaries of CIL to clear the backlog within a reasonable timeframe.

loss to them as production process has been totally hampered and Delivery Orders (DOs) are also getting expired. Hence, consumers have requested SECL to allocate these DOs from any other source or issue fresh DOs with extended date against them.

4. Inferior quality of coal received from specific areas of SECL, MCL, 7. Request for resuming normalcy CCL, ECL & BCCL in coal supply from WCL Consumers both in the Power and Non-power Sectors are consistently receiving lower grade coal (2-3 grades slippage) than the actual allotted grade from Amadand mines of South Eastern Coalfields Limited (SECL), Lakhanpur OCP of Mahanadi Coalfields Limited (MCL), Magadh, Amrapali & KDH mines of Central Coalfields Limited (CCL), Dalurbandh colliery of Pandaveswar area and Dabor & Begunia-Gourangdih collieries of Salanpur area of Eastern Coalfields Limited (ECL) and Rajapur & CKWP sidings of Bastacolla area, Golakdih 9 siding of Lodhna area, Kusunda Khas siding of Kusunda area, Damagoria & NLOCP sidings of CV area & Kesargarha siding of Block II area of Bharat Coking Coal Limited (BCCL). Therefore, coal consumers have requested CCO, CIL and Subsidiary Coal Companies to kindly intervene into the matter so that they may receive actual grade of coal as per the contracts from the said sources.

Non-power Sector consumers are facing critical condition due to non-supply of coal from WCL since last few months. Though coal production in WCL has increased still industries are not receiving a single rake from the Subsidiary Coal Company. Therefore, they have requested WCL for resuming normal coal supply to them which would enable their plants tide over the present criticality.

8. Non-lifting of coal from Kulda mines of MCL Coal consumers are unable to lift coal from Kulda mines of MCL due to strike called by the local people.

Therefore, they have requested MCL to resolve the issue at the earliest. Further consumers have also requested to extend the validity period of their Delivery Orders (DOs) for smooth lifting of their allotted quantity.

5. Request to release of Bank Guarantee and Security Deposit from 9. Additional charge for conversion of Rail to Road mode MCL Consumers whose Fuel Supply Agreements (FSAs) expired since April 2018, have not yet received the refund of Bank Guarantee (BG) and Security Deposit (SD) from Mahanadi Coalfields Limited (MCL) against their specific consumer codes. Considering that a long time has already been wasted, they have requested MCL to take cognizance of the issue and try to resolve it at the earliest.

Though Coal India has allowed its customers to convert linked and auction quantity from Rail to Road mode on a monthly basis for better evacuation but Coal Companies are charging undue added premium when rail mode is converted to road mode. Consumers have requested to charge only the premium fixed during initial Agreements instead of additional premium being levied on the Auction consumers.

10. Request for allowing maximum 6. Non-supply of coal from Jampali period of 24 months Performance mines of South Eastern Coalfields Bank Guarantee instead of 64 months Limited (SECL) Coal is not supplied from Jampali mines and Korba area of SECL to the non-power sector since last few months as certain grades are not available in Jampali mines and there is steep decline in production in Korba area due to some conflict between contractors and SECL. Therefore, consumers who had been awarded linkages through Auction are suffering due to non-availability. This has resulted huge financial

Performance Bank Guarantee is required to be deposited by the consumers for 64 months. But recently banks are showing reluctance to issue Bank Guarantees for such a long period of time. Therefore, consumers have requested to review the clause of 64 months Performance Bank Guarantee and allow the same for a maximum period of 24 months instead of 64 months as per agreement lock in period and that can be extended year on year.

CCAI Monthly Newsletter December 2018

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POWER Power plants light up on record coal supply Record coal supply has helped power plants to replenish dwindling stockpile even after pumping up generation as electricity demand spiked 14% during the October festive season and continued to grow apace at 5.5% in November.

Government data showed coal supplies at a threemonth high in December, rising steadily since September when disruptions caused by rains had resulted in stockpiles at a large number of power plants diminishing to alarmingly low levels. But improved coal supply since then has raised the average coal stock at power plants to more than 10 days in December.

The number of ‘super critical’ power plants, where fuel stocks are down to four days or less of operation has dropped to a monthly average of nine in the first 10 days of December from 14 in November and 18 in October. Coal ministry officials said the alternatives were being examined to address pockets of problem, especially for plants located far from the coal mines.

“The coal and railway ministries followed a strategy to ramp up coal production and despatch not only to replenish fuel stock but also to build up inventory for festive season demand,” a coal ministry official told.

Inter-ministerial panels tasked with the job are meet-

8 | CCAI Monthly Newsletter December 2018

ing more frequently than before, some almost daily.

Power-for-all target shrinks in India as Narendra Modi’s deadline nears Prime Minister Narendra Modi is nearing his deadline to electrify every Indian home.

That job has become a little easier after 10 million homes, or about one-quarter of the goal, were chopped off the list of those in need of power.

The target has been narrowed after on-the-ground surveys revealed large numbers of families that had left their villages and migrated to urban areas, P.V. Ramesh, chairman of REC Ltd., which is implementing the rural electrification program, said in an interview.

As well, multiple families living under the same roof have been grouped into one household after they agreed to have a common power connection, Ramesh said.

Modi set out to electrify nearly 40 million homes last year to fulfill his campaign promise of reliable electricity for every citizen. That has been now pruned to 30 million. Nearly 72 percent of the revised number of homes have already received a connection, latest government data shows. The country is on pace to electrify all households by Dec. 31, Power Minister

R.K. Singh said last month. The next deadline is for 24x7 access to power by March 31.

Cabinet okays Power Finance Corp’s takeover of Rural Electrification Corp The Cabinet Committee on Economic Affairs (CCEA) gave an in-principle approval to the strategic sale of the Centre’s 52.63 per cent holding in Rural Electrification (REC) to the Power Finance Corporation (PFC), along with transfer of management control. The government has a total 58.3 per cent stake in REC, remainder of which is part of Bharat 22 ETF and CPSE ETF. The move will help the Centre meet its disinvestment target of Rs 800 billion for FY19.

The government said the acquisition intends to achieve “integration across the power chain, obtain better synergies, create economies of scale, and have enhanced capability to support energy access and efficiency to finance the power sector. It may allow for cheaper fundraising, with an increase in bargaining power for the combined entity.”

Finance Minister Arun Jaitley said he had announced in the Union Budget FY19 that multiple public sector enterprises working in one space should be merged or acquired. “This is on the same line. During the consultations, the committee of ministers accepted the proposal of the power ministry, which wanted PFC to be the holding company,” he said. Jaitley said the transaction would be over by the end of the financial year. However, he did not comment on the valuation.

Power crisis looming, coal-based plants key to avert it, say experts A power crisis is looming large on India and the country needs to immediately start planning coal-based power plants and transmission corridors to avert it, experts have cautioned. This is in stark contrast to statistics of the country’s electricity authority that showed planned capacity is enough to meet peak hour demand till 2026-27.

Adding only renewable generation capacity will add to the woes in tackling the unprecedented rise in demand due to higher industrial activity, new domestic connections and states’ resolve to improve power availability, industry experts have said.

According to experts, the country is already late in planning thermal capacity that have very long construction periods. Also, possibilities of the sector getting fresh investments in the near term look bleak with about 50 GW stressed capacity and coal-based plants operating at just about 60% capacity.

Close to 30 GW power assets are likely to move to bankruptcy court as banks have not been able to arrive at resolution.

While renewable projects are getting financed, thermal assets are not likely to get lenders because of banks’ over exposure, sectoral stress and fuel crunch, experts said.

CEA study finds 200 new sites for thermal power plants of 428.9GW A total 200 potential sites have been identified for setting up as many large thermal power plants of total 428.9 GW capacity, more than the existing installed capacity of 346.61 GW, according to a study by the Central Electricity Authority (CEA). The authority conducted the study for identifying large pithead and coastal sites based on satellite mapping using remote sensing technology.

An official said a total of 200 potential sites with likely gross installed capacity of 4,28,905 MW have been identified even as the country pushes ahead with green power sources.

The official explained that thermal power stations need to be set up in future because these serve as the base load and are required for grid stabilisation in view of the government’s ambitious target of having 175 GW of renewable energy by 2022.

The demand is going to increase in future as the government under the Rs 16,320 crore scheme has set a target of electrifying all households in the country by March 2019.

The government has also promised 24x7 electricity to all from April 1, 2019.

The official said in view of these targets India needs to increase the installed generation capacity which would include fossil fuels based as well as renewable energy because clean sources like wind and solar do not generate electricity round the clock

CCAI Monthly Newsletter December 2018

|9

.Power

ministry mandates use of smart prepaid meters from April 2019

The government has mandated the use of smart prepaid electricity meters in the country beginning April next year, as it looks to complete the transition over the next three years.

“This step is likely to bring revolution in power sector by way of reduction in AT&C losses, better health of DISCOMs, incentivising energy conservation, ease of bill payments and doing away with the paper bills,” ministry of power said in a statement.

Power minister R.K Singh has, in the past, made a strong pitch for smart and pre-paid metering as a means of making state utilities more efficient and bringing down their losses.

Smart meters are a part of the overall advanced metering infrastructure solutions (AMI) aimed at better demand response designed to reduce energy consumption during peak hours.

“Move towards smart meters is a poor step as consumers need not pay the whole month’s bill in one go.

Instead they can pay as per their requirements,” the statement added.

Singh in June this year had asked meter manufacturers to ramp up production of smart prepaid meters, as the increase in number of consumers being added to the electricity grid will ensure a steady demand.

Growing demand seen leading to power shortage in 4 years: Analysts The gamut of steps to improve electricity access might lead to a supply shortage scenario after FY23, warranting ‘an immediate need to restart the capex cycle in generation’, according to analysts. “Our existing capacity and pipeline can at best meet projected peak demand till FY23, post which we will start running peak deficit,” ICICI Securities said in a recent note.

Peak power demand of the country breached the 180

10 | CCAI Monthly Newsletter December 2018

giga-watt (GW) mark in October, 9.8% higher than the highest requirement recorded in FY18. Peak power demand has been increasing at a compound annual growth rate of 2.6% between FY15 and FY18. The rise in power demand coincides with the rampant addition of household connection under the government’s Saubhagya scheme and the reduction in the average duration of power cuts.

“Assuming we intend to maintain 5% reserve margin, India’s peak demand will catch up with the available peak supply by FY21,” an analyst said. Reserve margin is the excess of installed power generation capacity, over and above the expected peak demand. Currently, the installed power generation capacity stands at 346 GW. Out of 47,855 MW of the coal-based power plants currently under construction, only 6,445 MW of additional capacity would be required between FY17-22, the ‘National Electricity Plan’ published by the Central Electricity Authority had said earlier this year, taking into account the possible retirement of 22,716 MW power plants.

Gujarat to raise tariffs of power units hit by coal price hike The Gujarat government has directed its power distribution company to raise tariffs of the three imported coal-based power plants owned by Tata Power, Adani Power and Essar Power by amending their power purchase agreements (PPAs) and approaching the power regulators for approval.

This comes as a big relief for the three plants which together can generate about 10,000 mw but have been making heavy losses after an abrupt jump in the price of Indonesian coal and the refusal of various states to pay higher tariffs as they said the power producers were bound by the PPAs. The matter has lingered for years as it was put up to various regulators, courts, committees, appellate authorities and governments.

Gujarat Urja Vikas Nigam Ltd (GUVNL), the main power procurer from the three plants, has been directed to immediately amend the pacts and approach regulators for tariff adoption and approval, sources said.

The directive was issued late night by the state. The amended PPAs will soon be circulated among other states for cabinet approvals, they said.

Tata Power’s Coastal Gujarat Power Ltd that runs the

4,000-mw imported coal fired power plant in Mundra has PPAs with five states — Gujarat, Maharashtra, Rajasthan, Punjab and Haryana, while Adani Power’s 4,600-mw plant has contracts with Gujarat and Haryana. Essar Power’s 1,320-mw Salaya plant is better placed among the three plants as it has power supply pact only with Gujarat.

Government drops plan to install 12GW solar capacity through NTPC The government has dropped its plan to install 12GW of solar capacity out of total 15 GW envisaged through state-owned NTPC as solar tariff dipped recently, Parliament was informed.

Earlier, the government had planned to install 15 GW of solar energy capacity through NTPC, which was to be bundled with thermal power supply to specific states. The power company has already completed auction of 3GW capacity out which 2.75GW is installed and 0.25GW is under construction.

“Since the solar power price has fallen recently, it is not proposed to take up Tranche II (5GW) and III (7GW),” said Power and New & Renewable Energy Minister R K Singh.

Ministry of New & Renewable Energy had issued the guidelines for selection of 3,000 MW of Solar PV Capacity (i.e. identified quantum of Tranche-I) in March 2015. Under the scheme, it was envisaged that the then costlier solar power will be bundled with cheaper thermal power, so as to supply combined power at an affordable price. The minister told the house that the entire capacity of 3GW Tranche-I (of the NTPC) has been awarded and the capacity of 2.75 GW has already been commissioned and remaining 0.25 GW capacity is under construction.

Solar installations see 4% drop in Q3 due to lack of clarity around GST The Indian solar market installed 1,589 MW (mega watt) in the third quarter of 2018. Installations declined by four percent compared to 1,659 MW in the second quarter of 2018, while a year ago (Q3 2017) it was 2,278 MW.

Large-scale installations during the third quarter of 2018 totalled 1,154 MW compared to 1,244 MW in second quarter 2018 and 2,013 MW in Q3 2017, according to Mercom India Research report.

“Lower installation levels were not a surprise due to a slowdown in tender and auction activity last year.

The safeguard duty, lack of clarity around GST rates and land and transmission issues have all sapped the momentum from the solar market,” said Raj Prabhu, CEO and Co-Founder of Mercom Capital Group.

He added, the Indian solar industry is trying to recover from the safeguard duty announcement. “An acceptable tariff for both project developers and government agencies has been an ongoing challenge since the inception of India’s solar program,” continued Prabhu.

Solar Projects: Tariffs drop lower in UP auction A generous commissioning deadline for solar projects provided by the Uttar Pradesh government in its latest auction has resulted in surprisingly low winning tariffs.

The offer of 550 MW of projects by the UP New and Renewable Energy Development Agency attracted bids between Rs 3.04 and Rs 3.08 per unit. NTPC, the lowest bidder, quoted Rs 3.04 per unit to win 85 MW. The bids were lower than the winning tariff of Rs 3.17 a unit at the auction in October, which itself was fairly low, considering that UP’s power distribution companies are in poor financial health. Solar radiation in UP is also low compared with that in Rajasthan, Gujarat and Andhra Pradesh.

Solar tariffs have been rising ever since the finance ministry imposed safeguard duty of 25% on imported solar panels and modules for a year from end-July in an effort to support local manufacturing. The duty will be lowered to 20% for the next six months and to 15% for another six months. More than 90% of the solar panels used in Indian projects are imported because local manufacturers cannot match those in China and Malaysia on price.

The UP agency has set a project commissioning deadline of 21 months from the date of signing of the power purchase agreement. Most such deadlines vary between 13 and 21 months.

CCAI Monthly Newsletter December 2018

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DOMESTIC Coal India gets 1.5 times premium at e-auction

auction should have been increased, however, it is surprising that the quantum shows a decline leading to 50% increase in prices.”

Coal India has managed to command an average premium of one and half times the floor price for 5.99 million tonnes (mt) coal booked by consumers in the non-power sector at a recent e-auction for five-year supply term.

As coal demand exceeds supply, govt plans to allot 10 mines to CIL in 2019

Indian Captive Power Producers Association secretary Rajiv Agrawal said: “Such increase in auction premium is the result of coal shortage created due to various government actions, including stoppage of imports for blending by public sector generators and diversion of rakes from private sector coal consumers to government generators.”

On offer was 6.2 mt coal from six Coal India subsidiaries meant for sectors other than power, cement, sponge iron and steel. Sectors that participated in the auction included small fertilisers, dyes, chemicals, paints and aluminium, among others.

Highest average premium was managed by Coal India subsidiary South Eastern Coalfields at 85%. It saw around 6 lakh tonnes of coal booked by bidders. This was followed by Mahanadi Coalfields managing an average premium of 84%. Bidders booked 1.4 mt of coal from the subsidiary. Association of Power Producers director general Ashok Khurana said: “With increased demand, quantum of coal under spot e-

12 | CCAI Monthly Newsletter December 2018

With the coal demand from power sector exceeding the supply in 2018, the government is hopeful of higher output in the new year from already allocated mines and plans to further allot 10 mines to staterun behemoth Coal India Ltd (CIL) in 2019. Of the 85 mines already allotted, 23 have already started production and the Coal Ministry expects 20 more mines to begin production in the current financial year ending March 2019 or early in the next fiscal.

Moreover, the government also plans to allot 10 mines to CIL in 2019, he said. This would be in addition to 10 mines allotted to the PSU this year. “Our aim is to make all subsidiaries (of CIL) 100 million tonnes plus units in the long term,” he said. Coal India accounts for over 80 per cent of domestic coal output. Talking about the coal shortage in 2018, Coal Joint Secretary Ashish Upadhyaya said it has happened because of the power sector demand having gone up substantially and attempts were made to meet this challenge of increased demand consistently through the year.

He said the government was actually able to meet the coal demand, but fuel stocks available at the power houses at times went down to the level of 3-4 days.

Cancelled coal mines: Production still far below FY15 level About fifty months after the Supreme Court cancelled 204 captive coal block licences saying these were allocated in an illegal and arbitrary manner, production from the blocks are far below the level before the court’s decision. As the court had, in its September 2014 order, allowed 42 operational blocks of the cancelled lot to function till March 2015, these mines’ production peaked in FY15 at 43 million tonnes (MT) but has since plunged headlong.

According to official sources, 86 of the cancelled blocks have been reallocated so far and only 23 of these are currently operational. Post-reallocation, these blocks’ cumulative production till October 2018 was just 56 MT, that is, average annual production of a little over 16 MT. (Overall, 92 blocks were reallocated, but contracts for six mines have since been terminated due to non-compliance with the prescribed norms.) A waning of investor interest has forced the government to defer auction of the remaining of the cancelled blocks. In fact, it had to cancel last two auction-tranches for the coal blocks, where 15 mines were to be offered, due to the absence of the mandatory minimum number (three) of bidders. This is in sharp contrast to the aggressive bidding for the 31 blocks that went under the hammer in 2015.

The government had then claimed that coal-bearing states will get revenue to the tune of Rs 3.4 lakh crore over 30 years (about Rs 11,467 crore annually) from the 31 auctioned and 42 blocks allotted to central or state government companies. Sources say that the states have earned total revenue of `6,000 crore (excluding royalty, cess, taxes etc) till October, 2018.

Coal shortage affecting captive power plants in Odisha Coal-based industries in Odisha are facing acute shortage of the fossil fuel which is affecting operations of several captive power plants in the state, industrialists said. Speaking at a deliberation, they said that unless the issue is addressed quickly, it would hit the future of many major stakeholders and in turn affect the overall industrial climate under the long-term vision of ‘Make in Odisha’.

“Odisha is one of the largest coal producing states in

the country. However, it is unfortunate that our own coal-based industries are not getting priority in our own land. It is a serious concern for all of us and we should take it up at appropriate forums at the state and national level with the help of the key stakeholders, said UCCI president Ramesh Mahapatra.

The chamber has already flagged the issue with the Odisha Chief Secretary and requested the state government to intervene. If required, the chamber said, it would approach the Union coal minister, he added. In his address, Abhijit Pati, CEO Vedanta Ltd said: “Due to coal scarcity, power plants are operating at 60-70 per cent of their installed capacity which is ultimately hampering the interests of the state and nation.

Karnataka should handle its coal stocks more efficiently, says Goyal There is no shortage of coal in Karnataka, according to Minister of Coal and Railways, Piyush Goyal.

In a statement issued after a meeting with former Prime Minister HD Deve Gowda and Chief Minister of Karnataka HD Kumaraswamy, Goyal said there is no scarcity of coal in the State. He also said that the plants in Karnataka currently have, on an average, five days stock of coal which is equal to 2.24 lakh tonnes.

Goyal hit out at the Karnataka government and hinted at mismanagement of coal stocks. “Karnataka Power Corporation Ltd. (KPCL) sold 584.91 million units of power at the energy exchange this year till October 2018. This amounts to consuming 3.8 lakh tonnes of coal which otherwise could have been used to boost coal stocks in power plants,” he said.

“It is better that the plants maintained at least 20 days’ stock of coal for uninterrupted functioning,” he added. He pointed to the anticipated pick-up in the demand for power in February/March 2019 and asked the power plants to manage their inventory efficiently.

STEEL Further decline in steel prices not feasible at this juncture: SAIL Any further decline in the prices of steel products does not seem feasible, according to Steel Authority of India (SAIL). “Taking a cue from the international market, the domestic steel prices, particularly for flat CCAI Monthly Newsletter December 2018

| 13

products, were under pressure for some time. The recent trend, both in the Chinese and other global market, is showing stability in prices. There is also an increasing trend in raw material prices, both for coal and iron ore,” SAIL said. The company also stated there are strong indications that the domestic prices have already bottomed out for two reasons. Firstly, there is substantial de-stocking in the market and secondly, domestic demand is coming back on track with improvement in the liquidity position, it added.

Steel: Prices likely to witness further correction Regional steel prices and spreads are normalising.

Domestic steel prices have declined, but with domestic prices still at 9-10% premium to import parity, we see scope for further correction. Margins should decline, even for converters like JSW. BS metrics could worsen.

While stock prices have corrected, MTM valuation at over 8x FY20e Ebitda for JSW, SAIL appears unattractive. We reiterate Underperform rating for JSW and SAIL. We have a Hold rating on Tata.

Spreads normalising finally as expected China FOB price is down 16% at $475/ton; spreads are down $80/ton since end September. We have viewed supernormal mill spreads over last 18 months as unsustainable as Chinese output stayed elevated at over 950 mn tons annualised run rate.

Limited case for higher spreads Chinese steel demand indicators are moderating, but Chinese steel output remains elevated. Winter cut impact has been limited. While spreads are down from supernormal highs, it is still above average rather than near a trough.

Domestic prices: Expect more correction Domestic steel demand growth has been strong (7.9% YTD FY19) YTD, but domestic HRC prices are down 4% (`1,500-2,000/ton); rebar prices are down 5-6% (`2,000/ton) vs. September quarter average.

We expect further correction as domestic prices (ex mill) are still 9-10% premium to FTA import parity; and 3-4% premium to Chinese import parity. Notably, import parity implies 7-8% downside risk to our domestic HRC ex mill estimate in FY20e.

Higher steel consumption ben14 | CCAI Monthly Newsletter December 2018

efits welding industry: IIW chairman Though India is the second largest producer of steel, its per capita consumption is below the global average. Higher steel consumption will provide more job opportunities for welders in the country, said Jose P Philip, chairman of Indian Institute of Welding (IIW).

“Almost 90% of the steel consumed in the country through welding process,” he said. While India’s per capita consumption is 58 kg, the global average is 256 kg. However, India’s steel production of 130 million tonnes is second only to China which has a steel output of 803 million tonnes. “But the production cost is higher in India and Chinese are dumping steel in India,” Philip said. More steel consumption will be benficial for the welding industry. Welding technology has undergone rapid changes over the years and robot welding is getting popular now. “Robots help cut cost as it can work for 24 hours,” he said.

CEMENT

JSW Cement eyeing acquisition of stressed assets JSW Cement, which is planning to raise capacity to 20 million tonne per annum by 2020, has said it is eyeing acquisition of stressed cement assets as part of its strategy to expand capacity and capitalise on growing infrastructure spends and realisation of pent up cement demand.

Boosted by a 63% volume growth in Q2FY19 as against an industry average of 22% in the markets it operates, JSW which has already garnered a presence in South and West- where it also has manufacturing plants--said that it is now building up its presence in the East, driven by growing demand for its slag-based products. It currently markets two variants of green cement products, JSW Cement Portland Slag Cement (PSC) and Concreel HD. JSW Cement expects development of 500 cities under the new Urban Development Mission and the initiative to build 100 smart cities to benefit cement & construction sectors. “The company views improving economic growth scenario, continued thrust on boosting India’s infrastructure sector and materialization of pent-up demand as primary drivers for cement consumption,” Nilesh Narwekar, CEO, JSW Cement said.

GLOBAL US and Denmark report falling coal use The EIA expects coal consumption in the US to fall to 627 million tonnes in 2018, down 4% on 2017 and 44% lower than its peak of 1,023 million tonnes in 2007.

The fall has been attributed to coal’s declining use in the electricity power sector, the EIA said, with lower prices for renewables and natural gas reducing its utilisation. In the 11 years since its peak of 313GW of online capacity, 55GW has been retired, with a third of the number of generators closing.

Roughly 14GW of coal-fired capacity is expected to retire in 2018 alone, which would be the second highest annual total on record, despite supportive rhetoric from the federal administration. “A period of sustained, low natural gas prices has kept the cost of generating electricity with natural gas competitive with generation from coal,” the EIA noted. “Other factors such as the age of generators, changes in regional electricity demand, and increased competition from renewables have led to decreasing coal capacity,” the government body added.

States cite climate worries in push to stop US coal sales 16 | CCAI Monthly Newsletter December 2018

Four states that say burning coal will hurt their residents as it makes climate change worse are trying to stop the Trump administration from selling vast reserves of the fuel that are beneath public lands. Attorneys for California, New Mexico, New York and Washington argue the coal sales have been shortchanging taxpayers because of low royalty rates and cause pollution that puts the climate and public health at risk.

The states were joined by conservation groups and Montana’s Northern Cheyenne tribe in a lawsuit that seeks to revive a coal leasing moratorium imposed under President Barack Obama. The moratorium blocked new lease sales from federal lands that hold billions of tons of the fuel.

U.S. District Judge Brian Morris is presiding over a hearing on whether the moratorium should be reinstated. The Trump administration said in court filings that ending the moratorium last year was of critical importance to the economy. That claim comes despite the slow pace of lease sales in recent years and a precipitous drop in demand for the heavily polluting fuel.

U.S. lands in Western states including Wyoming, Montana, Utah and Colorado are a major source of coal for mining companies. There are 7.4 billion tons of the fuel in roughly 300 leases administered by the Bureau of Land Management . Morris, who was appointed by Obama, recently ruled in a separate case that the administration must consider reducing coal mining in the Powder River Basin of Wyoming and

Montana to help combat climate change.

tipped earnings to reach a record high of more than $264 billion in 2018-19.

Growing US met coal beyond traAustralia may be bugging wrong ditional regions may be long shot party for power cost spike in fickle market Coal industry hopes that the U.S. can increase exports of metallurgical coal — a recent bright spot for companies with coal mines in Central Appalachia — by expanding production to untapped regions could be a long shot, as many analysts are hesitant the good times will last long enough for such an expansion to be prudent.

Much of the U.S. metallurgical coal mined comes from Central Appalachia, particularly the area in and near southern West Virginia, where high costs to mine thinning seams discourage production of thermal coal but can be justified for projects tapping into reserves of high-quality steelmaking coal. Expanding U.S. metallurgical coal production to nontraditional supply areas would be a boon to the industry, the National Coal Council wrote in a recent report completed at the request of U.S. Department of Energy Secretary Rick Perry. However, such expansion could be a tough sell for major producers or potential investors.

Coal is Australia’s most valuable export in 2018 Coal will replace iron ore as Australia’s most valuable export this financial year as supply concerns lead to a steep price rise for the core commodity.

The Department of Industry, Innovation and Science’s latest Resources and Energy Quarterly report said thermal and coking coal export values would reach $67 billion in total in 2018-19, slightly higher than iron ore’s $61 billion in value. Coal leapt over iron ore as supply concerns ratcheted up the price. It is the first time coal has overtaken iron ore in value since the mining boom five years ago.

Australia is also expected to overtake Qatar as the world’s largest LNG exporter in 2019, buoyed by increasing export values, which grew from $31 billion in 2017-18 to $50 billion this financial year.

The Department was more optimistic in its forecasts than its reports released earlier this year, broadly lifting earnings expectations across most commodities for 2018-19.

It increased total export earnings by about $12.1 billion compared to the previous quarter’s forecasts and

The Australian government hounding the gas sector to get power bills down is overlooking the surge in the price of coal, which fuels the bulk of the country’s generation.

The cost of coal power in Australia has doubled from 2016 levels, in line with seaborne spot prices of the fuel, Bloomberg NEF (BNEF) said in a report.

That’s one of the most important factors driving up power prices in the wholesale market, which gets a little over half of its electricity from black coal, a less polluting variety than brown coal, according to BNEF. Efforts to curb the gains so far have focused on gas supply, including regulations to get producers to divert resources meant for overseas customers to domestic markets. There’s no such mechanism for coal.

Black coal generators are producing more power following the closure of several brown coal plants in the past two years, forcing those operators to source more fuel from the spot market where prices have risen sharply, said Ali Asghar, lead author of the BNEF analysis. “The result is that they have to charge more for their power.”

Eskom’s Khulu Phasiwe: Anyone saying SA doesn’t have enough coal is lying Eskom national spokesperson Khulu Phasiwe took to Twitter to attempt to set the record straight on why there has been load shedding recently and how, mostly, it was not caused by coal shortages.

A theory had sprung up in some circles that coal shortages were primarily to blame for why Eskom had struggled to keep the lights on, and some South Africans expressed anger at the fact that South Africa continues to export coal, mainly through the Richards Bay coal terminal, despite the apparent supply crisis in our own country.

Phasiwe, however, said that load shedding could not be blamed on the fact that more coal is exported out of South Africa, or used by other local industries, than is used by Eskom.

CCAI Monthly Newsletter December 2018

| 17

He denied that there was a coal shortage in the country, which had been alleged by at least one energy expert in televised interviews about load shedding.

SA generally produces over 250 million tons of coal per year, of which over 110 million tons is purchased

by Eskom. The balance goes to export markets, Sasol and other users. The notion that all the coal is being shipped off to China, and Eskom is left with none, is fake news.

Phasiwe said: “Eskom is seeing competition to buy coal from India, Indonesia, Pakistan, South Korea and Sri Lanka, who are also vying for the same coal quality that Eskom uses at most of its power stations.”

Indonesia coal benchmark dips for fourth month to $92.51/t Indonesia Coal benchmark price (HBA) for December was set at $92.51 per tonne, down from $97.90 per tonne in November, mining ministry spokesman Agung Pribadi said, the fourth monthly fall in a row.

Aside from corresponding declines in prices of its component instruments, the dip in HBA for December was affected by “limitations of import quotas by the China government,” the ministry said in a statement.

The HBA is a monthly average of the Argus-Indonesia Coal Index (ICI-1), the Platts Kalimantan 5,900 assessment, the Newcastle Export Index and the globalCOAL Newcastle index from the previous month.

Indonesia coal output seen nearly 500 million T in 2019: Industry body Indonesia is expected to produce between 480 million tonnes and 500 million tonnes of thermal coal in 2019, and an estimated 500 million tonnes this year, a leading industry association told reporters.

“There is a possibility that output next year will be flat,” Indonesian Coal Mining Association chairman Pandu Sjahrir said.

However, among factors contributing to a possible decline in output are “uncertainties” surrounding the transfer of coal contract mining rights to new permit structures, Sjahrir said.

The government is also expected to make a decision

18 | CCAI Monthly Newsletter December 2018

in January on domestic market supply requirements for coal miners, he added.

Indonesian coal miners diversify into renewables Indonesia’s coal miners are slowly making the move to go greener and cleaner, announcing plans to invest in renewable energy projects. While Indonesia looks set to use coal as its base load energy source for the foreseeable future, miners are increasingly keen to diversify their portfolios as a backlash against use of the so-called black diamond grows across the world.

Three major Indonesian coal miners -- Adaro Energy, Indo Tambangraya Megah and Tambang Batubara Bukit Asam -- have all made public their forays into renewable energy, in part to diversify their portfolios and manage fluctuations in the price of coal. While Asia’s benchmark price for thermal coal reached a near seven-year high in August this year, the price has plummeted around 13% since. Miners are keen to mitigate that volatility by earning steady revenue from renewable energy power plants.

Coal production expected to exceed this year’s target Indonesian coal production reached 456 million tons or 94.02 percent of this year’s total target of 485 million tons, according to Energy and Mineral Resources Ministry data.

The ministry’s spokesperson, Agung Pribadi, estimated that this year’s production would exceed the target.

He explained that up to the end of November, production had reached 441 million tons and another 15 million tons were produced this month. “Meanwhile, the coal that was sold through the domestic market obligation (DMO) scheme, had already reached 105 million tons up to the end of November. And up to the end of this year, the figure will reach 115 million tons,” he said.

It means that coal exports in the first 11 months reached 336 million tons -- the total production up to the end of November minus the domestic consumption through the DMO scheme.

Initially, this year’s coal production target was 406 million tons as stated in the national mid-term development plan (RJPMN) for 2015 to 2019, but the ministry later revised the target to 485 million tons to try and get more foreign exchange.

IN PARLIAMENT GOVERNMENT OF INDIA MINISTRY OF COAL LOK SABHA Q. No. 286. SHORTAGE OF COAL

12.12.2018

KUMARI SHOBHA KARANDLAJE: SHRI PRATHAP SIMHA: Will the Minister of COAL be pleased to state: a) The quantum of coal required per day in Karnataka for its thermal plants; b) whether power generation is steadily declining in all the three thermal power plants of Karnataka due to severe shortage of coal supply; c) if so, whether the Government of Karnataka has requested the Ministry to ensure supply of Fuel Supply Agreement (FSA) quantity in full for sustainable power generation to the State’s thermal power plants; d) if so, the response of the Union Government thereto and the quantum of coal supplied to TPSs in Kar-

20 | CCAI Monthly Newsletter December 2018

nataka during the last three years; and e) whether coal is supplied to Karnataka from Singareni Collieries Company Ltd. (SCCL), Western Coalfields Ltd.(WCL) and Mahanadi coalfields Ltd.(MCL); and if so, the details thereof?

ANSWER MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL) (a): The daily coal requirement for the Thermal Power Plants (TPPs) in Karnataka as on 04.12.2018, based on the average consumption pattern of the last 7 days, is as under: Name of TPPs

Capacity Daily Coal Requirement (MW) (‘000 Tonnes)

Bellary TPS

1700

14.59

Raichur TPS

1720

16.55

Yermarus TPS

1600

6.86

(b): In the year 2018-19 (up to 30.11.2018), 2.595 MT coal has been supplied by Coal India Limited (CIL). Singareni Collieries Company Limited (SCCL) has supplied 3.23 MT to Raichur, Bellary and Yermarus TPPs. The power demand of Karnataka is met mainly by generation from thermal, hydro and nuclear sources apart from allocation from Central Generating Stations. The generation from coal based thermal power plants, therefore, varies depending upon demand and generation from other sources viz. when hydro power generation in monsoon season increases, the generation from coal based power plants decreases. The month-wise generation [in million units (MU)] by the three TPPs of Karnataka is as under: Name of TPS

Capacity (MW)

Apr- 18

May-18

Jun- 18

Jul-18

Bellary TPS

1700

642.1

349.5

0

0

0

436.3

360.9

Raichur TPS

1720

963.8

977.6

539.2

395.1

377.8

920.6

736.5

Yermarus TPS

1600

68.2

150.7

224.2

120.7

0

0

156.4

Aug- 18 Sep- 18

Oct-18

As per CEA report of October, 2018, the total energy demand of Karnataka for April-October, 2018 (39026 MU) has been met with 99.90% fulfillment with no notified power cuts. Further, Karnataka Power Corporation Limited had injected 584.91 MU in IEX during April to October, 2018. It is thus evident that there was no loss in generation in the power Plants of Karnataka due to shortage of coal. (c) and (d): The total quantum of coal supplied to the three Karnataka based power station by CIL & SCCL for the last three years is as under: (Fig in Million Tonnes) Total coal supply

Year

CIL

SCCL

2015-16

6.257

6.438

2016-17

4.643

7.148

2017-18

4.241

5.572

(e): Coal supplied during 2018-19 (till Nov 18) from WCL, MCL and SCCL is as under: (Fig in Million Tonnes) Period

Subsidiary Company

Supply

WCL

0.726

MCL

1.869

SCCL

3.23

2018-19 (till Nov)

Q. No. 308. RISE IN COAL IMPORTS 12.12.2018

b) the details of steps taken to address the increasing dependence on coal imports;

SHRI VINCENT H.PALA

c) the details of the latest coal production data by Coal India Limited (CIL); and

Will the Minister of COAL be pleased to state: a) the reasons for rise in India’s coal imports by 38.2% to Rs. 1,38,477 crore in 2017-18;

d) whether the target to produce one billion tonne of coal by 2020 by CIL will be achieved and if so, the details thereof?

CCAI Monthly Newsletter December 2018

| 21

ANSWER

sponding period of previous year.

MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL)

However, coking coal will continue to be imported as there is limited availability of coking coal in the country. Further, power plants designed on imported coal will also continue to import coal.

(a): The value of India’s coal imports have risen by 38.2% to Rs.1,38,477 crore in 2017-18. However, the quantity of coal imports has increased only by 9.1% from 190.95MT to 208.27MT during this period.

The increase in value of coal imports is primarily due to: Increase in international coal price leading to greater value increase as compared to absolute quantity increase in 2017-18.

Increase in value of imported coking coal. India is deficient in coking coal and as such imports of coking coal are inevitable. In 2017-18 the value of imported coking coal grew by 44%, from Rs. 41,230.06 crores to Rs.59,522.63 crores.

Many thermal power station are configured to use imported coal. As such imports by these thermal power plants are inevitable. During April-October 2018, these power plants have imported 22.27 MT of coal.

The imported quantity of 2017-18 at 208.27 MT is less than the imported quantity of 2014-15 which stood at 217.79 MT even as power generation and industrial activity grew substantially after 2014-15.

This was possible due to increased production of domestic coal, better quality management as well as improvement in availability of coal by improvement in transport infrastructure.

Thus, while there is an absolute increase in the value of the imports, the reasons are multifunctional and are not directly proportionate to domestic production alone. (b): There has been a consistent effort to increase domestic coal production so as to reduce dependence on coal imports. The all India raw coal production has increased from 565.77 MT in 2013-14 to 676.48 MT in 2017-18. Absolute increase in all India coal production from 2013-14 to 2017-18 (four years) is 110.71 MT as compared to increase of coal production of 33.73 MT from 2009- 10 to 2013-14 (four years).

Coal India Limited (CIL) has also increased its production from 462.41 MT in 2013-14 to 567.36 MT in 201718 (four years), an absolute increase of 105 MT as compared to increase of coal production of 31.15 MT between 2009-10 and 2013-14 (four years).

Further, in the current year during April-November, 2018, all India coal production was 433.90 MT with a growth rate of 9.8% and coal production of CIL was 358.32 MT with a growth rate of 8.8% over the corre-

22 | CCAI Monthly Newsletter December 2018

(c): In 2018-19 (up to 30.11.2018), CIL has achieved production of 358.32 MT with a growth rate of 8.8% over the corresponding period of previous year. (d): CIL had prepared one Billion Tonne (BT) plan of production (by 2020), which was subject to market demand for coal. However, during 2015-16 and 201617, there was less coal offtake due to improved coal quality and resultant enhanced efficiency of Power Plants. Coal despatch grew at the rate of 7.2 % against production growth of 9.2 % in 2015-16 and at the rate of 2.9 % against the production growth of 2.8 % in 2016-17. In view of this changed scenario, one Billion Tonne Plan by 2020 is being re-examined.

Q. No. 428. COAL RESERVES SHRI MALLIKARJUN KHARGE:

12.12.2018

Will the MINISTER OF COAL be pleased to state: a) whether the Government is using latest techniques to explore the fresh coal reserves; b) if so, the details of fresh coal reserves in the country State-wise since 2014; c) whether Government has slowed down the exploration of fresh coal reserves in the country; d) if so, the details thereof; and e) the reasons for Government not taking initiative to avail technical knowhow from the specialised agencies of other countries having proven record for coal exploration?

ANSWER MINISTER OF RAILWAYS AND COAL ( SHRI PIYUSH GOYAL) (a)&(b): Central Mine Planning and Design Institute (CMPDI) is the nodal agency for exploration of coal in India. It is using latest techniques to explore the fresh coal reserves like Hi-Tech Hydrostatic drills for drilling; 2D & 3D seismic survey with Vibrosis & interpretation with Paradigm software; satellite imagery for identification of forest and probable coal bearing areas & modern software such as AutoCAD, ArcGIS and Minex for preparation of Geological reports which is equivalent to industry best practices worldwide. The state wise resources as on 01.04.2018 are enclosed at Annexure-I and the upgradation

& addition of resources at Annexure-II. (c) & (d): No Madam. Government has not slowed down the exploration of fresh coal reserves in the country.

Exploration of coal resources in the country is a continuous process. Every year about 3 to 5 billion tonnes of proved (measured) resources are being added through fresh exploration to the coal inventory of India. The drilling/exploration done by CMPDI/GSI/MECL/State Government (DGMs) in last 3 years & current year to estimate the fresh resources through promotional (regional) exploration in coal are given in below table: Item

2015-16

2016-17

2017-18

2018-19 (Apr.’18-Nov.’18)

Promotional(Regional) drilling in Coal & Lignite (in Lakh Meter)

1.12

1.05

1.35

0.82

(e) CMPDI on behalf of MoC has taken initiative to avail technical knowhow and initiated to introduce Air borne survey for Regional Exploration.

ANNEXURE-I Statewise Geological Resources Of Coal In India As On 01.04.2018 Category-wise Coal Resources (in Million Tonnes) STATE

Measured (Proved)

Indicated

Inferred (Exploration)

Inferred (Mapping)

Total

WEST BENGAL

14155.57

12868.81

4642.86

0.00

31667.24

BIHAR

161.11

813.49

392.15

0.00

1366.75

JHARKHAND

45563.36

31438.52

6149.80

0.00

83151.68

MADHYA PRADESH

11958.28

12153.95

3874.67

0.00

27986.90

CHHATTISGARH

20427.71

34576.26

2201.90

0.00

57205.87

UTTAR PRADESH

884.04

177.76

0.00

0.00

1061.80

MAHARASHTRA

7177.55

3073.55

2048.14

0.00

12299.24

ODISHA

37391.10

34164.54

7739.16

0.00

79294.80

ANDHRA PRADESH

0

1149.05

431.65

0.00

1580.70

TELANGANA

10474.9

8576.13

2650.92

0.00

21701.95

SIKKIM

0.00

58.25

42.98

0

101.23

ASSAM

464.78

57.21

0.50

2.52

525.01

ARUNACHAL PRADESH

31.23

40.11

12.89

6.00

90.23

MEGHALYA

89.04

16.51

27.58

443.35

576.48

NAGALAND

8.76

0.00

103.64

298.05

410.45

GRAND TOTAL

148787.43

139164.14

30318.84

749.92

319020.33

Source: Geological Survey of India’s Inventory of Geological Resources of Indian Coal as on 1.4.18 The inventory did not take into account the mined out reserves.

CCAI Monthly Newsletter December 2018

| 23

ANNEXURE-II Year-Wise Upgradation / Addition of Geological Resources of Indian Coal (As Per GSI Report on Coal Inventory)

Sl. No.

Coal Resources As on

Proved (Million Tonne)

Indicated (Million Tonne)

Inferred (Million Tonne)

Total (Million Tonne)

1

1.4.2013

123182

142632

33101

298915

2

1.4.2014

125909

142506

33149

301564

Resources Added 3

1.4.2015

2649 131614

143241

31740

Resources Added 4

1.4.2016

5031 138087

139151

31564

Resources Added 5

1.4.2017

306595

308802 2207

143058

139311

32780

315149

Resources Added

6347

6

319020

1.4.2018

Resources Added

148787

139164

Q. No. 1395. INADEQUATE COAL TRANSPORT 19.12.2018 SHRI CHHOTE LAL: SHRIMATI MEENAKASHI LEKHI: SHRI RAM CHARITRA NISHAD: ADV. NARENDRA KESHAV SAWAIKAR: Will the Minister of COAL be pleased to state: a) whether the road as well as the rail mode of coal transport are not performing upto the expectations b) which is leading to inadequate coal stock at power plants that are located at far distances from mines; c) whether road transportation of coal faces signifi-

24 | CCAI Monthly Newsletter December 2018

31069

3871

cant issues including environmental concerns and resistance from local population; d) if so, the details thereof along with the action taken by the Government to tackle the problem and to ensure efficient transportation of coal; and e) whether it is also true that the coal companies should focus on increased use of conveyor belts of overhead ropeways, if so, the reaction of the Government thereto?

ANSWER MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL) (a): The average rake loading for power sector by CIL during April-Nov 2018 has been 251 rakes/day

in comparison to loading of 216 rakes/day during the corresponding period of last year, thereby registering a growth of 16.60 %.

In 2018-19 (up to 30.11.2018), Coal India Limited (CIL) supplied 315.94 Million Tonnes (MT) of coal achieving a growth of more than 8% in coal supply to the power sector over the supply of 291.78 MT in the corresponding period of last year. Singareni Collieries Company Limited (SCCL) has supplied 35.04 MT of coal to power plants (up to 30.11.2018).

Due to increased supply to Power Plants, coal based Power generation during the period of April-November 2018 has been 99.16 % of program with a growth of 5.5 % over the generation in the corresponding period of last year.

Due to augmented supply, coal stock at TPP end has also increased. As per Central Electricity Authority (CEA) report, coal stock at Power House end as on 16.12.2018 is 15.52 Million Tonnes (MT) as against the stock of 12.20 MT on 16.12.2017 thereby registering an increase of 27.20%.

Loading for long lead power plants has also increased as the average lead for transportation of coal during April-Nov 2018 has increased to 492 KM against 469 KM during the corresponding period of last year.

As informed by Ministry of railways, Indian railways is supplying rakes for transportation of coal as per demand placed by coal companies/consumers. The availability of wagons is adequate for meeting the demand for rail transport. However, demand-supply imbalances, which arise intermittently on account of various factors like fluctuations in demand, disruption in traffic flows, congestion on selected routes and terminals etc. are addressed in real time.

Despatch by road is sometimes disrupted due to local law and order problems in the subsidiaries of Coal India Limited (CIL), which are tackled promptly by the Colliery management as explained below at Para (b)&(c). (b)&(c): Transportation of coal from collieries/sidings is the responsibility of consumers’ carriers/Railways.

In certain fields like Talcher Area of Mahanadi Coalfield Limited (MCL) and Magadh Amrapali of Central Coalfield Limited (CCL) movement of coal by road is frequently affected due to local law and order problems. As and when local law and order issues arise, the colliery management as well as the subsidiary companies take up the matter with the local administration and also make efforts to persuade the local

population to refrain from such activities to ensure that no hindrance is made in transportation of coal. (d) : Transportation arrangement to be made by consumers for increased use of conveyor belts/ overhead ropeways is stressed. During a meeting on 25.01.2018 in the Ministry of Power, the use of captive mode of transport like Conveyor Belts, Merry-GoRound (MGR) for movement of coal was stressed upon and it was decided that the Power plants situated within 20 kms from pithead shall construct elevated closed belt conveyors within 2 years, that power plants located within 40 kms from pithead shall construct MGR within 3 years and power plants located within 40 kms and upto 100 kms may also consider the option of MGR based on financial viability.

Q. No. 1401. STOCK OF COAL

19.12.2018 SHRI GAURAV GOGOI: a) Will the Minister of COAL be pleased to state: the main reasons for shortage in coal production in the country; b) whether the number of non-pitched plants that have either ‘critical’ or ‘super critical’ stock of coal has risen during the last six months and if so, the details thereof; c) whether the Government has undertaken any measures to increase the production of coal by Coal India to help ameliorate the coal shortage; and d) if so, the details thereof?

ANSWER MINISTER OF COAL AND RAILWAYS (SHRI PIYUSH GOYAL) (a):As on 1.04.2018 the vendible stock of coal with CIL was 55.6 MT and as on 15.12.2018 coal stock was 22.93 MT with CIL. All India raw coal production has increased from 565.77 MT in 2013-14 to 676.48 MT in 2017-18. The all India coal production during April-Nov. 2018 was 433.90 MT with a growth of 9.8% over the corresponding period of the previous year 2017-18. (b): There is no shortage of coal, by and large, for the power sector. The number of non-pithead super critical/ critical plants has come down from 18 (as on 01.06.2018) to 13 (as on 11.12.2018) as per CEA report.Criticality of a power plant is not a function of coal supply alone & depends on multiple factors including installed capacity of power plants & schedulCCAI Monthly Newsletter December 2018

| 25

ing of power from these plants based on merit order dispatch.

As per Central Electricity authority (CEA) report during the period April-Nov 2018, total coal based generation has been 99.16% of the programme generation with a growth of 5.50% over the corresponding period of last year. This has been possible due to increased supply of coal to the power sectorwhich was resulted in 15.52 Million Tonnes (MT)coal stock at power house end as on 16.12.2018 as against the stock of 12.20 MT on 16.12.2017 thereby registering an increase of 27.20%. (c)&(d):There has been a consistent effort to increase domestic coal production. Coal India Limited (CIL) has increased its production from 462.41 MT in 2013-14 to 567.36 MT in 2017-18 (four years), an absolute increase of 105 MT as compared to increase of coal production of 31.15 MT between 2009-10 and 2013- 14 (four years).

Further, in the current year during April-November, 2018, the coal production of CIL was 358.32 MT with a growth rate of 8.8% over the corresponding period of previous year. However, the focus of the Government is on increasing the domestic production of coal which includes efforts to expedite Environment & Forest clearances expeditiously, pursuing with State Government for assistance in land acquisition and coordinated efforts with Railways for movement of coal.

Q. No. 1470. FREIGHT COST ON COAL 19.12.2018 SHRI DEVUSINH CHAUHAN: Will the Minister of COAL be pleased to state: (a) whether the freight cost on coal is higher than the actual coal cost resulting into higher cost of generation of power as the State of Gujarat is at a distance of 1600 km from the eastern coast and if so, the steps taken by Government to reduce cost of coal and burden of imported coal; (b) the steps taken by the Government regarding the rationalization of coal linkage; (c) the steps taken to allocate more coal to State Government/ GSECL in view of large requirement of coal; and (d) the steps initiated regarding swapping of coal to Government of Gujarat/GSECL, keeping in view the suggestion that domestic coal may be handed over at mine and imported coal at port and swapping to be based on heating value terms based on third party sampling and analysis at loading end?

ANSWER

26 | CCAI Monthly Newsletter December 2018

MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL) (a): The details of actual freight paid for coal transportation are maintained by the users. In order to reduce the cost of power generation and efficient utilisation of coal, the Government, on 04.05.2016, approved the proposal for allowing flexibility in utilization of domestic coal amongst power generating stations by using coal in efficient plants as well as by saving in transportation cost. The State/Central Gencos have flexibility to utilize their coal in most efficient and cost effective manner in their own power plants as well as by transferring coal to other State/ Central/IPP Power plants for generation of cheaper power. (b): Rationalization of Coal Linkage: An Inter-Ministerial Task Force (IMTF) was constituted in June, 2014 to undertake a comprehensive review of existing sources of coal with a view to optimize transportation cost and materialization under the given technical constraints. The linkage rationalization for State/ Central PSUs was implemented initially, based on IMTF recommendation and carried forward by Coal India Limited (CIL)/Singareni Collieries Company Limited (SCCL) based on coal availability and requests of public sector Power Plants. In addition CIL has rationalized sources (subsidiary company-wise) based on the request of public sector power plants with a view to optimize the transportation cost and materialization taking into account coal availability and logistics. Policy for Linkage rationalization for Independent Power Producers (IPPs) has also been issued on 15.05.2018.

So far, transportation of 61.08 Million Tonnes (MT) of coal has been rationalized with annual potential savings of Rs. 3,651 crore. Out of this quantity of coal rationalized, 4.2 MT has been transferred to GSECL plants. (c): Under the provisions of the Coal Mines (Special Provisions) Act, 2015, one coal mine, namely, Gare Palma Sector-I, located in the State of Chhattisgarh, has been allocated to GSECL for specified end use “Power�.

Further, Bridge Linkages have been granted and tenure extended for the two units of GSECL, namely, Ukai Unit-6 (500 MW) and Wanakbori TPS Unit-8 (800 MW). (d): In line with the recommendation of the Standing Linkage Committee (Long Term) dated 11.08.2014, an agreement for swapping of coal linkage was signed between Gujarat State Electricity Corporation Limited (GSECL) and NTPC in November, 2014 for swapping of 1.0 MT of coal. As per the agreed terms, GSECL offered its South Eastern Coalfields Limited (SECL) linked coal to NTPC Korba STPS and the coal imported by NTPC was to be supplied to GSECL plant

to avoid criss-cross movement of domestic and imported coal. This led to a potential annual savings of Rs. 458 crore to GSECL. The swapping arrangement was continued till import of coal by NTPC upto 2016-17. Coal supplied to GSECL is covered under Third Party Sampling and analysis at the loading as well as unloading points.

Q. No. 1507. COAL IMPORTS DR. K.GOPAL:

19.12.2018

Will the Minister of COAL be pleased to state: a) whether India’s coal imports rose by 7.9% to 134.46 million tones in the first seven months of the current fiscal and if so, the details thereof; b) whether India’s thermal coal demand remained high due to the coal shortage in the power sector c) c) and if so, the details thereof and the steps taken by the Government in this regard; and d) whether there was a 6.8 per cent drop in coal and coke imports in October compared to 19.77 million tonnes imports during the same month last financial year and if so, the details thereof and the reasons therefor?

ANSWER MINISTER OF COAL AND RAILWAYS (SHRI PIYUSH GOYAL) (a)&(c):As per provisional data released by Directorate General of Commercial Intelligence and Statistics (DGCI&S), during April-October, 2018 (during first seven month of current fiscal) the import of coal was136.58 MT with a growth rate of 14.91%.

During October, 2018 the coal and coke import was 22.17MT as compared to 18.72 MT during October, 2017 with a growth rate of 18.42%.This increase is largely due to growth of coking coal imports in which India is deficient & also imports by certain thermal power plants which were designed to run on imported coal.The imported quantity of 2017-18 at 208.27 MT is less than the imported quantity of 2014-15 which stood at 217.79 MT even as power generation and industrial activity grew substantially after 2014-15. (b):There is no shortage of coal for the power plants of the Country. As per Central Electricity authority (CEA) report during the period April-Nov 2018, total coal based generation has been 99.16% of the programme generation with a growth of 5.50% over the corresponding period of last year. This has been possible due to increased supply of coal to the power sector.

During April-Nov 2018, Coal India Ltd.(CIL) has supplied 315.94 MT of coal to power sector at a growth of more than 8% compared to the supply of 291.78 MT in the corresponding period of last year.

As per CEA report coal stock at Power House end as on 16.12.2018 is 15.52 MT as against the stock of 12.20 MT on 16.12.2017 thereby registering an increase of 27.20%.

Q. No. 55. REVERSE AUCTION OF COAL BLOCKS IN ODISHA 14.12.2018 SHRI PRATAP KESHARI DEB: Will the Minister of COAL be please to state: a) how much money was earned through the reverse auction of coal blocks in the State of Odisha; and b) how much, out of the total money earned, has been shared with the State?

ANSWER MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL) (a) In the State of Odisha, Rs. 51.57 Crore has been generated through Reverse Auction.

In case of reverse bidding, a Ceiling price of CIL notified price for each coal block is fixed and bidders are mandated to quote lower than this ceiling price. The Ceiling price is fixed at Run-of- Mine(ROM) price of equivalent grade of coal , as specified by CIL for the power sector. The bidder quoting the lowest in ‘reverse bidding’ is the successful bidder. This quote is taken as the transfer price of coal from coal block to the plant and is passed through in determination of tariff for electricity. This method ensures that benefit of lower bid price is passed through to the consumers. A Fixed Reserve Price of Rs. 100/- per tonne of coal is payable to the State Government, as per actual production by the successful bidder.

In case the bidding continues and the quotes in the bidding reaches Rs. 0(Zero) per tonne then the bidders are required to quote the ‘Additional Premium’ which they are willing to pay over and above Fixed Reserve Price of Rs.100/- per tonne. Thus, the bidding continues in ‘forward bidding’ mode and the bidder quoting the highest ‘Additional Premium’ is declared Successful Bidder. In such case of ascending ‘forward bidding’ CCAI Monthly Newsletter December 2018

| 27

also, only the aforementioned Rs.100/- per tonne is taken as input for computation of energy charge for the purpose of determination of electricity tariff and the ‘Additional Premium’ is not included for the purposes of determination of tariff for electricity. (b) Entire amount of Rs. 51.57 Crore generated through reverse e-auction has been transferred to State of Odisha.

Q. No. 133. RISE IN COAL IMPORTS 21.12.2018 SHRI N.GOKULAKRISHNAN: Will the Minister of COAL be pleased to state: a) whether it is a fact that the country’s coal imports rose by 7.9% to 134.46 million tonnes in the first seven months of the current fiscal; b) whether it is also a fact that the country’s thermal coal demand remained buoyant due to the coal shortage in the power sector: and c) whether it is also fact that there was a 6.8 per cent drop in coal and coke imports in October as compared to 19.77 million tonnes imported during the same month last financial year?

ANSWER MINISTER OF COAL AND RAILWAYS (SHRI PIYUSH GOYAL) (a)to(c): A statement is laid on the Table of the House.

STATEMENT IN REPLY TO RAJYA SABHA STARRED QUESTION NO. 133 FOR ANSWER ON 21.12.2018 BY SHRI N.GOKULAKRISHNAN REGARDING “RISE IN COAL IMPORTS”. (a)&(c):As per provisional data released by Directorate General of Commercial Intelligence and Statistics (DGCI&S), during April-October, 2018 (during first seven month of current fiscal) the import of coal was136.58 MT with a growth rate of 14.91%.

The entire demand of coking coal is not met from domestic production as the supply of high quality coal/ coking coal (low-ash-coal) in the country is limited and thus no option is left but to resort to import of coking coal.The increase in import is largely due to growth of coking coal imports in which India is deficient as well as imports by certain thermal power plants which were designed to run on imported coal.

The imported quantity of coal in 2017-18 at 208.27

28 | CCAI Monthly Newsletter December 2018

MT is less than the imported quantity of coal in 201415 which stood at 217.79 MT even as power generation and industrial activity grew substantially after 2014-15. (b):. As per Central Electricity authority (CEA) report during the period April-Nov 2018, total coal based generation has been 99.16% of the programme generation with a growth of 5.50% over the corresponding period of last year. This has been possible due to increased supply of coal to the power sector. Even though there has been substantial growth in power generation, imports by Thermal Power Plants have increased marginally by 0.9% during April-Oct 2018.

During April-Nov 2018, Coal India Ltd.(CIL) has supplied 315.94 MT of coal to power sector at a growth of more than 8% compared to the supply of 291.78 MT in the corresponding period of last year.

As per CEA report coal stock at Power House end as on 16.12.2018 is 15.52 MT as against the stock of 12.20 MT on 16.12.2017 thereby registering an increase of 27.20%.

GOVERNMENT OF INDIA MINISTRY OF COAL RAJYA SABHA Q. No. 536. AVERAGE RATE OF PRODUCTION OF COAL 14.12.2018 SHRI BINOY VISWAM: Will the Minister of COAL be pleased to state: A) the total number of coal mines presently functioning in the country along with the details of each coal mine; b) the details of the private enterprises, if any, involved in mining; c) the average rate of production of coal in the last two years in the country and whether this production level is more than the requirement of the country; d)the average amount of coal exported along with the details thereof; and e) whether the country imports coal from any other country, if so, the details thereof?

ANSWER MINISTER OF COAL AND RAILWAYS (SHRI PIYUSH GOYAL) (a)&(b):The details of coal mines functioning in the country in Coal India Limited (CIL), Singareni Collieries Company Limited (SCCL) and private mines are given in Annexure-I and Annexure-II. (c): The coal demand estimated by NITI Aayog and domestic coal production during last two years is given below:(in Million Tonnes) Year

Demand

Production

difference

1

2

3

(2-3)

2016-17

884.87

657.87

227.00

2017-18

908.40

676.48

231.92

Average of two years

896.64

667.17

229.46

On account of a number positive initiatives taken by Ministry as well as CIL with an emphasis on quality, safety and environment protection, all India raw coal production increased from 565.77 MT in 2013-14 to 676.48 MT in 2017-18 (4 years), an absolute increase of 110.71 MT as compared to increase of coal production of 33.73 MT between 2009-10 and 2013-14 (4 years).

The gap between demand and supply of coal is met through import of coal. (c)&(d): Import and Export of coal during the last two years i.e. 2016-17 to 2017-18 is given below:(in Million Tonnes) Year

Import

Export

2016-17

190.95

1.77

2017-18 (Provisional)

208.27

1.50

It is pertinent to mention that the imported quantity of 2017-18 at 208.27 MT is less than the imported quantity of 2014-15 which stood at 1.79 MT even as power generation & industrial activity substantially in the intervening period.

grew

CCAI Monthly Newsletter December 2018

| 29

NUMBER OF WORKING MINES AS ON 1.04.2018 ( Eastern Coalfields Limited) Annexure-I SL. NO.

1

AREA

UG MINES

OC MINES BONJEMEHARI MOHANPUR GOURANDIH EXTN DABAR GOURANDIH BEGUNIA OC

SALANPUR

NINGAH COLLIERY 2

KALIPAHARI ( R) UG & KALIPAHARI A& C PATCH BHANORA W/B UG & BHANORA WEST OC PATCH (H)

SRIPUR S. S. INCLINE

3 4

5

JHANJRA SONEPUR BAZARI

KAJORA

6A

SATGRAM

6B

SATGRAM

7

KUNUSTORIA

MIXED MINES

JHANJRA PROJECT SONEPUR BAZARI MADHUSUDANPUR 7 PIT & INCLINE COLLIERY PARASCOLE(EAST) PARASCOLE(WEST) JAMBAD JAMBAD UG KHAS KAJORA CENTRAL KAJORA NABAKJORA

MADHABPUR UG & MADHABPUR OC

SATGRAM PROJECT

NIMCHA UG & OC (AMKOLA) (H)

SATGRAM INCLINE CHAPUIKHAS COLLIERY J K NAGAR PURE SEARSOLE JEMEHARI KALIDASPUR PROJECT AMRITNAGAR NORTH SEARSOLE EGARA & NARAYANKURI KUNUSTORIA UNDER BELBAID

30 | CCAI Monthly Newsletter December 2018

MAHABIR COLLIERY

PARASEA BANSRA

8

BANKOLA

KHANDRA SHYAMSUNDERPUR KUMARDIH A KUMARDIH B TILABONI SANKARPUR NAKRAKUNDA BANKOLA CHORA BLOCK INCLINE, SHANKARPUR OC & BONBAHAL OC(H) NEW KENDA UG & OC (H)

CL JAMBAD

9

KENDA

LOWER KENDA CHORA 10 PIT BAHULA CHORA 7&9 PIT

SIDULI

10A

SODEPUR

CHINAKURI-III CHINAKURI I SODEPUR (R) METHANI BEJDIH NARSUMUDA PATMOHONA DHEMOMAIN PIT DHEMOMAIN INCLINE

10B

SODEPUR

PARBELIA DUBESWARI MANDERBONI & SOUTH

11

PANDAVESWAR

SAMLA AMALGATED. MINE

RAJMAHAL

13

S P MINES

14

MUGMA

MADHAIPUR

PANDAVESWAR KOTTADIH UG

12

KHOTADIH OC

DALURBANDH RAJMAHAL SIMLONG HURRA ‘C’

BADJNA HARIAJAM LAKHIMATA SHYAMPUR B KUMARDHUBI KHOODIA

CHITRA RAJPURA (D) BARMURI (D) GOPINATHPUR (D)

CHAPAPUR II

KAPASARA (H)

CCAI Monthly Newsletter December 2018

| 31

BHARAT COKING COAL LIMITED Sl.No.

Area

UG Mines

OC Mines

Mixed Mines PHULARITAND

1

BARORA

MURAIDIH

2

BLOCK-II

AMALGAMATED BOCP MINE

3

GOVINDPUR

JOGIDIH

NEW AKASH KINAREE

KHARKAREE MAHESHPUR

AMALGAMTED BLOCK-IV GOVINDPUR COLLIERY AMALGAMATED KESHALPUR WEST MUDIDIH COLLIERY (AKWMC) TETULMARI

4

KATRAS

SALANPUR

AMALGAMATED GAZLITAND KATRAS CHOITUDIH COLLIERY

5

SIJUA

MUDIDIH

NICHITPUR SENDRA BANSJORA KANKANEE GONDUDIH KHAS KUSUNDA

6

NEW GODHUR - KUSUNDA ALKUSA

KUSUNDA

E. BASSURIYA AMALGAMATED DHANSAR - INDUSTRY - COLLIERY ENA 7

P.BALIHARI

BHAGABAND P. B. PROJECT KB 10/12 PITS UG

8

BASTACOLLA

BASTACOLLA

9

LODNA

10

E.JHARIA

11A

C. V.

11B

C. V.

12

W.JHARIA

GOPALICHUCK

GHANOODIH KOCP ROCP DOBARI AMALGAMATED N.T.S.T. JEENAGORA COLLIERY

BHOWRAH(NORTH) COLLIERY

AMALGAMATED SUDAMDIH PATHERDIH COLLIERY

BHOWRA(SOUTH) COLLIERY BASANTIMATA-DAHIBARI

DAMAGORIA MOONIDIH

32 | CCAI Monthly Newsletter December 2018

CENTRAL COALFIELDS LIMITED Sl.No. AREA

1

BARKASAYAL

UG MINES BHURKUNDA

BHURKUNDA

SAUNDA

URIMARI

C. SAUNDA URIMARI

2

3

4

OC MINES

N. URIMARI (Birsa)

ARGADA

SIRKA GIDI ‘A’ GIDI ‘C’ RELIGARA

KUJU

SARUBERA

SARUBERA/CHAINPUR ARA KARMA PUNDI PINDRA (O/S) TOPA KUJU (O/S) HESAGARA (O/S)

KEDLA

KEDLA

HAZARIBAG

LAIYO

MIXED MINES

PAREJ EAST JHARKHAND TAPIN TAPIN SOUTH (O/S)

5

RAJRAPPA

6

KATHARA

RAJRAPPA GOVINDPUR

KATHARA JARANGDIH GOVINDPUR PH-II BOKARO

KARO SPL 7

B&K

KARO - I KARGALI AKK OCP KABRIBAD GIRIDIH

8

DHORI

9

N. K.

DHORI KHAS

CHURI

A A D OCM SEL. DHORI TARMI (O/S) DAKRA KDH ROHINI PURNADIH

10

PIPARWAR

11

RAJHARA

12

M&A

PIPARWAR ASHOKA RAJHARA TETARIA KHAR AMRAPALI (O/S) MAGADH (O/S)

CCAI Monthly Newsletter December 2018

| 33

NORTHERN COALFIELDS LIMITED SL.NO. 1 2 3 4 5 6 7 8 9 10

AREA

UG MINES

OC MINES

MIXED MINES

JHINGURDA JAYANT AMLOHRI NIGAHI BLOCK - B DUDHICHUA BINA KAKARI KHADIA KRISHNASHIL

NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL

JHINGURDA JAYANT AMLOHRI NIGAHI BLOCK - B DUDHICHUA BINA KAKARI KHADIA KRISHNASHILA

NIL NIL NIL NIL NIL NIL NIL NIL NIL

WESTERN COALFIELDS LIMITED Sl.No.

1

Area

CHANDRAPUR

UG Mines

OC Mines

NANDGAON INCL MAHAKALI D. RAYATWARI

DURGAPUR PADMAPUR DEEP BHATADI EXPANSION

MANNA INCLINE CHANDA RAYATWARI HLC NO.1

HINDUSTAN LALPETH

BALLARPUR

BALLARPUR SASTI

2

BALLARPUR

GOURI EXPN (A) SASTI

GOURI DEEP PAONI PAONI-II

3

MAJRI

NEW MAJRI - II (A) EXPN. TELWASA YEKONA PHASE-II NEW MAJRI UG TO OC DHORWASA NAVIN KUNADA (A) JUNA KUNADA PENGANGA NILJAI EXPANSION DEEP

4

WANI

NAIGAON MUNGOLI NIRGUDA EXTN. DEEP KOLGAON

34 | CCAI Monthly Newsletter December 2018

Mixed Mines

RAJUR/BHANDEWADA INC UKNI DEEP 5

WANI NORTH

KUMBARKHANI

SILEWERA

NAGPUR

JUNAD PIMPALGAON KAMPTEE DEEP

PIPLA

AMALGAMATED GONDEGAON GHATROHANA INDER UG to OC

PATANSAONGI

BHANEGAON

AB INCLINE

6

KOLARPIMPRI GHONSA

SAONER-I SAONER-II SAONER-III

SINGHORI

WAGHODA ADASA

7

UMRER EXPN. (AMB RIVER DIVERSION PHASE - IV) MAKARDHOKRA-I MAKARDHOKRA-III / DINESH GOKUL

UMRER MURPAR

8

9

PATHAKHERA

PENCH

SHOBHAPUR SARNI TAWA-I CHHATARPUR-I CHHATARPUR-II TAWA-II NEHERIYA

NEW SETHIA

MATHANI

CHHINDA

VISHNUPURI-I

SHIVPURI

VISHNUPURI-II

BARKUI

GANPATI MAHADEVPURI

URDHAN

JAMUNIA GHORAWARI No.1 TANDSI 10

KANHAN NANDAN-II AMBARA

GHORAWARI MINE No.-2 (BHARAT)

MOHAN (MOHAN UG & MOHAN No. 5&6 OC PHASE-III)

CCAI Monthly Newsletter December 2018

| 35

SOUTH EASTERN COALFIELDS LIMITED SL.NO.

AREA

UG MINES

OC MINES

MIXED MINES

1

BAIKUNTHPUR

CHURCHA RO KATKONA 1&2 KATKONA 3&4

NIL

NIL

PANDAVPARA

NIL

NIL

JHILIMILI BHATGAON MAHAMAYA 2

BHATGAON

SHIWANI NAWAPARA

MAHAN

NIL

MAHAN-II

3

4

BISRAMPUR

CHIRIMIRI

KUMDA 7&8

BISRAMPUR

BALRAMPUR KETKI REHAR GAYATRI

AMGAON

BARTUNGA HILL

CHIRIMIRI

KURASIA NCPH OLD NCPH R6 NEW

WEST CHIRIMIRI

NIL AMERA

NIL

VIJAY WEST RANI ATARI

5

HASDEO

RAJNAGAR R.O. JHIRIA BIJURI BEHERABAND KURJA/ SHEETALDHARA KAPILDHARA

RAJNAGAR

NIL

WEST JKD HALDIBARI

NIL

NIL

6

JAMUNA&KOTM

JAMUNA 1 & 2 JAMUNA 9&10 MEERA BARTARAI BHADRA 7 / 8

AMADAND

NIL

7

JOHILLA

PALI NOWROZABAD(W) PINOURA UMARIA PIPARIA VINDHYA

KANCHAN

NIL

36 | CCAI Monthly Newsletter December 2018

8

DHANPURI UG RAJENDRA BANGWAR DAMINI KHAIRAHA SHARDA HIGHWALL

SOHAGPUR

AMLAI

NIL

DHANPURI RAJGAMAR 4&5

MANIKPUR

SURAKACHHAR MAIN SURAKACHHAR 3&4 9

BALGI

KORBA

SARAIPALLI

DHELWADIH

NIL

SINGHALI BAGDEVA 10

KUSMUNDA

NIL

KUSMUNDA

NIL

11 12

GEVRA DIPKA

NIL NIL

GEVRA DIPKA

NIL NIL

CHHAL BAROUD JAMPALI BIJARI GAREPALMA IV/1 GAREPALMA IV/2&3

NIL

13

RAIGARH

MAHANADI COALFIELDS LIMITED

SL.NO.

AREA

UG MINES

OC MINES

1

TALCHER

TALCHER NANDIRA DEULBERA HANDIDHUA

2

IB-VALLEY

LAJKURA SAMALESWARI

3

LAKHANPUR

BELPAHAR LAKHANPUR *LILARI

4

ORIENT

5

BHARATPUR

BHARATPUR CHHENDIPARA

6

HINGULA

HINGULA BALRAM

7

JAGANNATH

JAGANNATH BHUBANESWARI ANANTA

MIXED

MINE NO. 1&2 MINE NO. 3 HIRAKHAND BUNDIA INCLINE MINE NO. 4

8

LINGRAJ

LINGRAJ

9

KANIHA

KANIHA

CCAI Monthly Newsletter December 2018

| 37

10

BASUNDHARA (W) KULDA GARJANBAHAL

BASUNDHARA

NORTH EASTERN COALFIELDS SL.NO.

AREA

UG MINES

OC MINES

MIXED

TIPONG 1

TIRAP

MARGHERITA

TIKAK LEDO NAMCKIK NAMPHUK

Annexure -II S.NO

NAME OF THE MINE

AREA

UG/OC

1

Padmavathikhani-5 Incline

KGM

UG

2

Venkateshkhani-7 Incline

KGM

UG

3

Gouthamkhani OC

KGM

OC

4

JVR OC-I Exp.

KGM

OC

5

JVR OC-II

KGM

OC

6

21 Incline

YLD

UG

7

Jawaharkhani 5 OC

YLD

OC

8

Koyagudem OC-II

YLD

OC

9

Kondapuram

MNG

UG

10

PK-OC

MNG

OC

11

Manuguru OCP

MNG

OC

12

BPA OC - II Extn.

BPA

OC

13

Khairagura OC

BPA

OC

14

Dorli OC-I

BPA

OC

15

Kasipet -1

MM

UG

16

Shanthikhani UG

MM

UG

17

Kalyanikhani-1 Incline

MM

UG

18

Kalyanikhani-5 Incline

MM

UG

19

Ravindrakhani-1A Incline

MM

UG

20

Ramkrishnapur OC

MM

OC

21

Kalyankhani OC

MM

OC

22

Ravindrakhani-5 Incline

SRP

UG

38 | CCAI Monthly Newsletter December 2018

List of Operating Mines other than CIL and SCCL 23

Ravindrakhani-6 Incline

SRP

UG

24

Ravindrakhani-7 Incline

SRP

UG

25

Ravindrakhani-NT

SRP

UG

26

Ravindrakhani-8 Incline

SRP

UG

27

Sreerampur-1 Incline

SRP

UG

28

Sreerampur-3 & 3A Incline

SRP

UG

29

Indaramkhani-1A Incline

SRP

UG

30

Srirampur OC II

SRP

OC

31

Godavarikhani-1 & 3

RG I

UG

32

Godavarikhani-2&2A

RG I

UG

33

Godavarikhani-5 Incline

RG I

UG

34

Godavarikhani-11 Incline

RG I

UG

35

Medapalli OC Exp.

RG I

OC

36

Godavarikhani - 7 LEP

RG II

UG

37

Vakilpalli

RG II

UG

38

RG OC - III Extn.

RG II

OC

39

Godavarikhani-10 Incline

APA

UG

40

Adriyala Shaft Project (ALP)

APA

UG

41

Ramagundam OC-I Exp. Ph-II

RG III

OC

42

Ramagundam OC-II Extn.

RG III

OC

43

Kakatiyakhani-1 & 1A Incline

BHPL

UG

44

Kakatiyakhani-5 &5A Incline

BHPL

UG

45

Kakatiyakhani-6 & 6A Incline

BHPL

UG

46

Kakatiya Longwall Project (KLP)

BHPL

UG

47

KTK OC Sector- I

BHPL

OC

48

KTK OC – II

BHPL

OC

SCCL TOTAL

(29UG+19OC=48)Mines

CCAI Monthly Newsletter December 2018

| 39

S.NO

NAME OF THE MINE

Company

1

(GP-IV/2&3)

SECL

2

(GP-IV/1)

SECL

3

Kakakote, Metka Modhia

JKML

4

Sikni

JSMDCL

5

Bermo

DVC

6

Chasnala Jitpur,Ramnagar,Noodih

IISCO

7

Tasra

SAIL

8

Parsa East & Kanta Basan

PRVUNL

9

Pakri-Barwadih

NTPC

10

West Bokaro & Jharia

TISCO

11

Garo, Khasi, Jayanti

MEGHALYA

12

Sarshatali

CESC

13

Gare Palma IV/5,IV/4,Kathautia

HIL

14

Moher and Moher Amlohri Extn.

SPL

15

Talabira-I

GMR

16

Chotia

BALCO

17

Belgaon

SIL

18

Amelia (North)

JPVL

19

Sial Gjogri Coal Mine

RCCPL

20

Marki Mangli -I

TUML

Total = 20 Q. No. 537. COAL STOCKS IN POWER PLANTS 14.12.2018 SHRI MAJEED MEMON: Will the Minister of COAL be pleased to state: whether it is a fact that the shortfall in production as well as transportation issues have affected the coal stocks in power plants across the country; whether it is also a fact that the country would need 615 million tones of coal in 2018-19; and if so, the manner in which Government proposes to fill up the gap between the requirement of supply of 288 rakes per day through Railways to the current supply of 270.8 rakes per day?

GOYAL) (a): Adequate coal is available for Power Houses linked with Coal India Limited (CIL). As a result of the steps taken for augmentation of supplies, stock at Power House end have improved from 9.48 Million Tonnes (MT) on 22.10.2018 to 14.44 MT as on 10.12.2018. The increased dispatch has helped coal based power generation to achieve a positive growth of 5.50 % during April-Nov 2018 as compared to the same period of last year and coal based generation has been 99.16% of the programme. Further, the overall PLF during this period has also grown by 4.0 % in comparison to the average PLF achieved during the same period of last year.

ANSWER

As per CEA report, there has been reduction in the total coal import by imported coal based power plants during April-Oct 2018 from a level of 24 MT (2017-18) to 22.27 MT (2018-19).

MINISTER OF COAL AND RAILWAYS (SHRI PIYUSH

(b): As per the target provided by Ministry of Power

40 | CCAI Monthly Newsletter December 2018

for the year 2018-19, total coal requirement of Power Sector from Domestic sources is stated to be 615 MT (out of which CIL 513 MT, SCCL 53 MT, E-auction 12 MT and Captive mines 37 MT) for the current fiscal. (c): In the month of November 2018, Coal India Limited has supplied a total of 282.0 rakes/day against the requirement of 288 rakes/day through Railways.

In the month of December 2018(till 9th Dec), total supply of 286.8 rakes/day has been achieved against the above stated requirement. With the upcoming production months ahead, CIL is geared up to fulfill the requirement and narrow down the requirement and supply gap.

Q. No. 541. SELLING OF CAPTIVE COAL IN OPEN MARKET 14.12.2018 SHRI T.G. VENKATESH: SHRI DHARMAPURI SRINIVAS: Will the Minister of COAL be pleased to state: a) whether it is a fact that Government has taken a decision to allow captive coal block owners to sell a part of the coal produced by them in the open market; b) if so, the details thereof; and the other relaxations being given to captive coal block owners?

ANSWER MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL) (a) & (b) On the basis of recommendations of High Power Expert Committee (HPEC) and subsequent recommendations of Committee of Secretaries (CoS), the Central Government has given in principle approval to the Nominated Authority, Ministry of Coal vide O.M. dated 12.10.2018 that in case of coal mines earmarked for specified end uses or own consumption, the future allocatees are mandated to utilize a minimum of 75% of its actual production (ROM basis) in specified end use plants and are allowed to sell upto 25% in open market. This flexibility is proposed keeping in view the factors that may affect the consumption of coal in the end use plants viz change in economic situation, business cycle and end use plant requirements etc. Further, this would help in increasing the levels of availability of domestic coal which will further reduce coal imports and will lead to savings of valuable foreign exchange. As prospective bidders would factor the provision of such sale of coal while bidding for the coal mine, additional premium has also not been proposed for such sale.

(c) The other conditions have been modified for allocation of captive block to end users in ongoing as well as future allocations vide OM dated 12.10.2018.

This has been done with a view to encourage more participation in auction for these blocks. These include changes in efficiency parameters and flexibility in production conditions.

Q. No. 542. ALLOCATION OF COAL BLOCKS THROUGH ALLOTMENT AND AUCTION ROUTE SHRI VIVEK K. TANKHA:

14.12.2018

Will the Minister of COAL be pleased to state: a) the number of coal blocks that have been allotted through the auctions route (with details of annual peak mining capacity and total estimated reserves), after the cancellation of coal blocks pursuant to Supreme Court order of September, 2014; b) the details of the respective one-time and annual revenues accrued to State Governments from such auctioned coal blocks; and c) the number of coal blocks that have been allocated to Public Sector Companies through the allotment route from 2014 till date and details of the respective one-time and annual revenues accrued to State Governments from such allotted coal blocks?

ANSWER MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL) (a): The allocation of coal mines are made under the provisions of the Coal Mines (Special Provisions) Act, 2015 [CM(SP) Act, 2015] and the Mines and Minerals (Development and Regulation) Act, 1957 [MM(DR) Act, 1957]. So far, 25 coal blocks stand allocated through auction route under the provisions of the CM(SP) Act, 2015. Out of the 31 coal blocks which were auctioned, Coal Mine Development and Production Agreements (CMDPA) of 6 coal mines have been terminated. Details of the 25 auctioned coal mines along with their peak rated capacity and total extractable reserves are at Annexure-A. No coal block has been auctioned under the provisions of the MM(DR) Act, 1957. (b): The Successful Bidders are required to submit upfront amount which is 10% of the intrinsic value, payable upfront in 3 installments of 5%, 2.5% and 2.5%, as one-time payment. The Successful Bidders are also required to make monthly payments with

CCAI Monthly Newsletter December 2018

| 41

respect to the coal extracted from the coal mine.

The entire revenue through auction of coal mines shall devolve to the coal bearing State Government concerned during the life of mine/lease period. The details of the upfront amount as well as monthly payment actually made by the Successful Bidders are at Annexure-B. (c): i. From 2014 till date, 60 coal mines have been allocated to public sector companies through the allotment route under the provisions of CM(SP) Act, 2015 and the Rules made thereunder.

Out of the originally 61 allotted coal blocks, Coal Mine Development and Production Agreements (CMDPA) has been terminated in respect of 1 coal mine. The entire revenue through allotment of coal mines shall devolve to the coal bearing State Government concerned during the life of mine/lease period. The details of the upfront amount as well as monthly payment actually made by the allottee companies are at Annexure-B. ii. From 2014 till date, 13 regionally explored coal blocks currently stand allocated to Central/State Government Companies under the provisions of

MM(DR) Act, 1957 and the Rules made thereunder.

One time or annual revenues have not accrued so far to the State Governments from such allotted coal blocks since these are regionally explored coal blocks. 6 coal blocks have also been allotted to CIL/its subsidiaries under the MM(DR) Act, 1957.

Revenues to the State Governments will accrue only after production begins after detailed exploration and start of mining operations in these coal blocks.

Although these blocks were allocated in 2015 and afterwards, mining activities in these blocks could not progress at desired pace as it involved transfer of EC/FC, renewal of leases, approval of modification in mining plans, renewal of statutory permissions/ approvals, acquisition of land, development of infrastructure etc. However, coal production from these coal blocks has picked up due to close monitoring by Ministry. The total coal production from these coal blocks has been 12.83 MT during April-October 2018 at a growth rate of 40.5 % over the same period last year. As production from this blocks will grow in future, the quantum of monthly revenue to

State Government will also increase substantially.

Annexure – A Sl. No.

Name of Mine/Coal Block

Total Extractable Reserve (MT)

1

Sial Ghoghri

5.69

0.3

2

Belgaon

7.14

0.27

3

Kathautia

23.96

0.8

4

Marki Mangli III

3.58

0.21

5

Ardhagram

18.93

0.4

6

Chotia

18.49

1

7

Gare Palma IV‐5

42.43

1

8

Bicharpur

29.12

0.75

9

Gare Palma IV‐4

12.30

1

10-11

Brinda and Sasai

25.4

0.68

12

Moitra

29.91

1.00

13

Meral

12.67

0.44

14

Nerad Malegaon

10.62

0.36

15

Dumri

46.138

1

16

Gare‐Palma Sector‐IV/8

45.85

1.2

17

Lohari

9.05

0.20

42 | CCAI Monthly Newsletter December 2018

Peak Rated Capacity (MTPA)

18

Marki Mangli I

9.78

0.30

19

Talabira‐I

10.785

3

20

Sarisatolli

51.03

3.50

21

Trans Damodar

47.32

1.00

22

Amelia North

70.28

2.8

23

Tokisud North

51.97

2.32

24

Jitpur

65.535

2.5

25

Ganeshpur

91.8

4

Annexure – B (in crore Rs.) 2014-15 State

2015-16

2016-17

2017-18

18-19 (till Nov. 18)

Mode

Upfront Amt

Upfront Amt

Mthly Payment

Upfront Amt

Mthly Payment

Upfront Amt

Mthly Payment

Upfront Amt

Mthly Payment

Auction

33.08

37.94

33.17

6.60

688.75

0.00

517.06

3.70

312.49

Alltoment Total

66.21 99.28

339.65 377.59

54.56 87.73

30.54 37.14

80.01 768.76

34.99 34.99

84.13 601.20

11.26 14.96

86.62 399.11

Auction Allotment

62.55 96.29

133.72 273.79

0.00 0.00

18.63 36.56

0.00 0.00

0.00 410.45

266.71 0.00

0.00 12.16

62.81 0.00

Total

158.84

407.51

0.00

55.19

0.00

410.45

266.71

12.16

62.81

Auction Allotment

59.49 0.00

56.79 0.00

183.95 0.00

6.11 49.62

189.53 0.00

0.00 0.00

192.66 0.00

0.00 0.00

160.04 0.00

Total Auction

59.49 1.97

56.79 11.54

183.95 25.73

55.74 2.75

189.53 26.54

0.00 0.00

192.66 49.72

0.00 0.00

160.04 43.04

Allotment Total Auction

12.61 14.58 12.52

12.61 24.15 12.52

0.00 25.73 11.58

0.00 2.75 0.00

0.00 26.54 9.49

0.00 0.00 0.00

0.00 49.72 5.47

0.00 0.00 0.00

0.00 43.04 0.00

Allotment Total Auction Allotment Total Auction Allotment

0.00 12.52 0.00 9.51 9.51 71.69 35.05

177.00 189.51 0.00 0.00 0.00 69.13 71.18

0.00 11.58 0.00 0.00 0.00 87.70 0.00

101.17 101.17 0.00 25.00 25.00 1.28 0.00

0.00 9.49 0.00 0.00 0.00 68.43 0.00

265.53 265.53 0.00 9.51 9.51 1.28 0.00

0.00 5.47 0.00 0.00 0.00 82.12 0.00

29.84 29.84 0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00 61.47 0.00

Total

106.73

140.31

87.70

1.28

68.43

1.28

82.12

0.00

61.47

Chhatisgarh

Jharkhand

Madhya Pradesh

Maharashtra

Odisha

Telangana

West Bengal

CCAI Monthly Newsletter December 2018

| 43

Q. No. 1804. INCREASE IN SUPPLY TO POWER SECTOR. 28.12.2018 SHRIMATI SHANTA CHHETRI: Will the Minister of COAL be pleased to state: a) whether Coal India claims to have increased supplies to the power sector by nine per cent between 1 April to 12 October, 2018; b) if so, the details thereof; c) whether increased demand for coal has forced some 11,500 MW generation capacity to remain idle for several days; d) whether 3,300 MW generation capacity has been lying idle due to lack of power purchase agreements; and e) if so, the steps Ministry is taking to improve the coal supply to the power plants and to conclude power purchase agreements so that plants do not remain idle?

ANSWER MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL) (a) & (b): Yes sir. In 2018-19 (up to 12.10.2018), coal supply of 247.69 Million Tonnes (MT) has been made

by Coal India Limited (CIL) to the Power sector, thereby achieving a growth of more than 9.4% over the supply of 226.39 MT in the corresponding period of last year same period. (c). The programme for coal based power generation in 2018-19 (April-Nov) was 663.60 BU , against which actual generation was 658 BU. Further, the generation by domestic coal based plants was 605.01 BU, which was 101% of programme generation. Therefore, sufficient coal was provided to the coal based power plants to generate power as per programme. & (e): As per Central Electricity Authority (CEA), 2576 MW capacity has been affected due to no Power Purchase Agreement. The steps taken by Government to improve coal supply to the power plants and to conclude power purchase agreement is as under: SHAKTI Scheme: The Government has approved a new coal linkage allocation policy in May 2017,

44 | CCAI Monthly Newsletter December 2018

named SHAKTI (Scheme for harnessing & allocating koyla (coal) transparently in India) for allocation of coal to various categories of power plants.

So far, 35,655 MW capacity has been allocated coal linkage under various categories.

Pilot project for procurement of 2500 MW: In order to address the problem of lack of Power Purchase Agreements (PPAs) in the country, Ministry of Power has notified a scheme for procurement of 2500 MW on competitive basis for a period of 3 years from the generators with commissioned projects having untied capacity.

The Power Houses in close vicinity of the coalfields are advised to move coal through road mode.

For proper utilization of goods sheds, the power houses are advised to move coal through road-cumrail mode.

The captive modes of transport like MGR, Belts, Ropes are fully utilized to their capacity to move coal to the concerned units.

As a result of the steps taken for augmentation of supplies, as per CEA report, coal stocks at Power House end have improved from 12.92 MT on 25.12.2017 to 15.86 MT as on 25.12.2018 thereby registering an increase of 22.75 %.

Q. No. 1805. PRODUCTION OF COAL BY REALLOCATED COAL MINES 28.12.2018 SHRI SANJAY SETH Will the Minister of COAL be pleased to state: a) whether it is a fact that less than 15 of the 33 coal mines re-allocated in 2014 have started production, if so, the reasons therefor; b) whether such a long delay is attributable to bureaucratic lethargy and lengthy clearance processes; c) whether it is also a fact that the country had to import 10 per cent the total domestic coal demand in the current fiscal despite having adequate reserves, and d) the steps being taken by Government to plug the shortfall and cut down on import dependency?

ANSWER MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL)

(a)&(b) Out of 85 coal blocks allocated under Coal

Mine(Special Provisions) Act’ 2015(33 are Schedule II mines,18 Schedule I mines & 34 Schedule III mines), 24 mines are presently operational which includes 17 mines under Schedule II category and balance 7 mines under Schedule I & III. Out of these 24 operational mines, 16 mines are coal producing mines of which 13 are Schedule II mines.

The Milestones are mentioned in the Schedule-E of CMPDA (Coal Mine Production and Development Agreement), where time lines are present for the clearances required. In case of Schedule-II coal mines, all the clearances were in place & it was expected that it would be transferred to new allottee in 3 months but mainly due to the change in Land status/ exist-

ing Law, it did not happen. The following issues were identified as the major reasons for non- operationalization /delay in operationalization of coal mines: Procedural delay in transfer of clearances existing with Prior allottees like ECs, FCs and Mining Leases.

Litigation related to land.

Processes are not standard across states that added to delays.

However, due to close monitoring by the Ministry, the total coal production from these blocks has been 14.71 MT during April-November 2018 at a growth rate of 34.70 % over the same period last year. (c) &(d) The all India demand of coal, production, supply and import of coal during last two years and current year i.e. 2018 upto November 2018 is given below:

Year

2016-17

2017-18

2018-19

Total demand (Mte) ^

884.87

908.40

991.35

Total domestic Production (Mte)

657.87

676.48

433.90@

Total domestic supply (Mte)

644.56

691.42

471.70@

Total Import (Mte)

190.95

208.27

111.60#

^All India Estimated by NitiAayog ; @Upto November, 2018; # upto September,2018

The imported coal quantity of 2017-18 at 208.27 MT is less than the imported quantity of 2014-15 which stood at 217.79 MT even as power generation and industrial activities grew substantially after 2014-15.

As per the current import policy, coal is kept under Open General License (OGL) and consumers are free to import coal from the source of their choice as per their contractual prices on payment of applicable duty. There has been a consistent effort to increase domestic coal production so as to reduce dependence on coal imports. The all India raw coal production has increased from 565.77 MT in 201314 to 676.48 MT in 2017-18. Absolute increase in all India coal production from 2013-14 to 2017-18( four years) is 110.71 Mt as compared to increase of coal production of 33.73 MT from 2009-10 to 2013-14( four years).

Coal India Limited (CIL) has also increased its production from 462.41 MT in 2013-14 to 567.36 MT in 2017-18(four years), an absolute increase of 105 MT

as compared to increase of coal production of 31.15 MT between 2009-10 and 201314 (four years). Further, in the current year during April-November, 2018 all India coal production was 433.90 MT with a growth rate of 9.8% and coal production of CIL was 358.32 Mt with a growth rate of 8.8% over the corresponding period of previous year.

To reduce import dependence and facilitate the Power consumers for procuring coal under Special Forward E-Auction, CIL has planned to offer about 41.54 MT of coal in 2018-19. During Apr-Sep 2018, around 27.68MT coal was offered under Special Forward E-Auction by different coal companies against which around 20.38 MT coal was booked by Power consumers.

For Non-regulated sector, CIL is conducting linkage auctions for Sponge Iron, Cement, CPP, ‘Other (noncoking)’, Steel (coking) and ‘Others (coking)’ sub sectors under Non- Regulated Sector. In the three tranches of linkage auction which have been concluded,

CCAI Monthly Newsletter December 2018

| 45

45.18 MT of annual col linkages have been booked.

In the fourth tranche, up to now, 26.54 MT of annual coal linkages have been booked by CPP, Cement and Sponge Iron Sector consumers. For linkages of coking coal, CIL has offered a total quantity of 6.99MT in the linkage auctions against which only 0.22 MT has been booked by Steel sector consumers.

However, coking coal will continue to be imported as there is limited availability of coking coal in the country. Further, power plants designed on imported coal will also continue to import coal.

Q. No. 1808. EFFICIENT TRANSPORTATION OF COAL 28.12.2018 DR. VIKAS MAHATME: Will the MINISTER OF COAL be pleased to state : a) the new technologies being used by the Ministry to transport coal from one place to another which are more efficient than the usual ways of transport; and whether the new technologies used are cost efficient and reliable, if so, the details thereof?

ANSWER MINISTER OF RAILWAYS AND COAL ( SHRI PIYUSH GOYAL) & (b): In order to ensure faster evacuation of coal, Rapid Loading System (RLS) is being introduced in coal companies (like CIL, SCCL) at different loading points, where coal loading is more than 1 million tonne (MT) to minimize the loading time and enhance dispatch with a view to increase the efficiency and effectiveness of the operation.

It has been decided by Ministry of Power that all Power Plants located within 20 km from Pithead shall construct elevated closed belt conveyors within next 2 years (up to 1st April 2020). Further, it was also decided that power plants located within 20 to 40 km from pithead should construct MGR (MerryGo-Round) system within 3 years (upto 1st April 2021) and plants located within 40-100 km from pithead should also consider to construct MGR based

46 | CCAI Monthly Newsletter December 2018

on financial viability. The decision of supply of coal, to the power plants located within 20 km through elevated closed belt conveyor, was taken in order to free up railway rake to supply coal to far-away power plants more efficiently and in an effective manner.

Normally, the supply of coal from CIL to its customers is done through the Road or Rail mode or a combination of both. For faster evacuation of coal from Pit Head, Coal Handling Plants (CHP) with Rapid Loading Systems (RLS) are in place in 19 mines of CIL. As per need, construction of CHP and SILO in further 9 mines is in process. To implement modern technology like Belt Pipe Conveyors, CIL has taken initiative to construct the same in two mines of MCL in the state of Odisha for transportation of coal from its coal stock yard to their new under construction CHP and SILO. Coal companies are taking following steps for efficient transport of coal: In-pit Crushing and conveying technology is being used for transportation of coal and Overburden.

CHPs are planned near to the mines.

Rail mode is cheaper, safer & more eco-friendly compared to road mode. The coal companies are taking steps to convert road mode to rail wherever possible.

Coal supply to nearby Thermal Power Plants is being planned by belt conveyor system directly from the new and upcoming mines nearby.

Due to developments in the loading and transport systems in CIL & SCCL, in the year 201819 (up to 30.11.2018), there has been a growth of 9.4% in coal loading through railways as the average daily loading has been 303.6 rakes in this year in comparison to the average daily loading of 277.5 rakes in the corresponding period of last year (2017-18).

------

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

CCAI Monthly Newsletter December 2018

| 47

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 Eight million tonnes of domestic coal extracted by private producers is expected to be commercially available for the first time in the open market after five-six years, a move that will end Coal India’s monopoly which has been the sole domestic supplier of the dry fuel for the past four decades after the sector was nationalised in the 1940s. The government has already set the ball rolling this year, iron & steel, cement and captive power plants were to submit technical bids for 18 coal blocks from which they can sell 25% of their production in the open market at Coal India prices.

India’s coal imports rose 9.7 per cent to 156.08 million tonne (MT) in the April-November period of the ongoing fiscal, as against 142.25 MT in the year-ago period, according to a report by mjunction services.

Coal imports in November increased 10.1 per cent to 19.47 MT, over 17.68 MT in the same period a year ago.

A shortage of coal, coupled with a shortfall in rail rakes, is significantly pushing up production costs for domestic primary aluminium manufacturers. The cost of power accounts for 45% of the total cost for the industry. Amid falling prices of aluminium and pressure to keep costs low, cheap scrap import has been breaking the industry’s backbone, according to a leading aluminium company official.

POWER After recording a massive 14% year-on-year (y-o-y) surge in electricity demand in October, the country’s electricity requirement registered a 5.5% y-o-y growth in November. Power generation from conventional sources such as thermal, nuclear and hydro went up by 4.6% y-o-y in the month to 99.9 billion units (BUs).

Renewable energy-based power plants produced 8 BU in November, 16% more than the corresponding period last year. Since electricity cannot be stored, generation is the most robust indicator of demand.

A power crisis is looming large on India and the country needs to immediately start planning coal-based power plants and transmission corridors to avert it, experts have cautioned. This is in stark contrast to statistics of the country’s electricity authority that showed planned capacity is enough to meet peak hour demand till 2026-27. Adding only renewable generation capacity will add to the woes in tackling the unprecedented rise in demand due to higher industrial activity, new domestic connections and states’ resolve to improve power availability, industry experts have said.

48 | CCAI Monthly Newsletter December 2018

Record coal supply has helped power plants to replenish dwindling stockpile even after pumping up generation as electricity demand spiked 14% during the October festive season and continued to grow apace at 5.5% in November. Government data showed coal supplies at a three-month high in December, rising steadily since September when disruptions caused by rains had resulted in stockpiles at a large number of power plants diminishing to alarmingly low levels. But improved coal supply since then has raised the average coal stock at power plants to more than 10 days in December.

CEMENT Cement makers may raise prices by ₹10-15 per 20kg bag by March, an industry association said.

According to the Cement Manufacturers Association (CMA), the wholesale price of ₹300-350 per 20 kg bag will be ideal for the cement sector.

Shares of cement companies rallied by up to 13% on BSE in early morning trade on the expectations of higher demand going forward due to higher investments in infrastructure and affordable housing projects. The fall in coal/pet-coke and diesel prices from their peak is expected to benefit the companies in the forthcoming quarter. Further, busy season surcharge withdrawal and axle load norms relaxation will benefit the cement players going forward.

STEEL India’s crude steel output grew 3.8 per cent to 8.92 million tonne (MT) in November 2018, according to the Joint Plant Committee (JPC).The country produced 8.60 MT crude steel during the same period a year ago, JPC said in its latest report.”Crude steel production stood at 8.92 MT in November 2018, up 3.8 per cent over November 2017, and was up 1.7 per cent over October 2018,” the report said.

Regional steel prices and spreads are normalising. Domestic steel prices have declined, but with domestic prices still at 9-10% premium to import parity, we see scope for further correction. Margins should decline, even for converters like JSW. BS metrics could worsen. While stock prices have corrected, MTM valuation at over 8x FY20e Ebitda for JSW, SAIL appears unattractive. We reiterate Underperform rating for JSW and SAIL. We have a Hold rating on Tata

CCAI Monthly Newsletter December 2018

| 49

50 | CCAI Monthly Newsletter December 2018

6780

BHUTAN IMP

0

Source CEA

DEC-2018

58.55

60.48

14

69.97

TOTAL

5000

1265000

13

NUCLEAR

BHUTAN IMP

38500

130000

ACTUAL*

58.49

HYDRO

2

1091500

PROGRAM

274640.27

THERMAL

Category

TOTAL

45487.42

NUCLEAR

HYDRO

222372.85

1

103876

392

7165

3363

92956

3

PROGRAM

100541.7

86.66

7684.98

2953.37

89816.69

4

ACTUAL*

78.49

58.72

15

ACTUAL SAME MONTH 2017-18

97020.31

87.13

6898.45

3959.36

86075.37

5

ACTUAL SAME MONTH 2017-18

DEC-2018

99.46 103.63

22.11

64.81

59.02

16

PROGRAM

63.33

61.12

17

ACTUAL*

111.4

74.59

104.35

7

% OF LAST YEAR (4/5)

62.02

58.96

18

ACTUAL SAME PERIOD 2017-18

950876

4330

107966

27633

810947

8

PROGRAM

GENERATION (GWH)

96.79

107.26

87.82

96.62

6

% OF PROGRAM (4/3)

AN OVERVIEW

APRIL 2018 - DEC-2018

PLANT LOAD FACTOR (%)

Monitored Target Capacity Apr 2018 to (MW) Mar 2019

THERMAL

Category

SUMMARY- ALL INDIA

ACTUAL*

10

ACTUAL SAME PERIOD 2017-18

949633

4376.63

111624.67

28338.69

906638.34

4696.34

106829.61

27752.96

805293.01 767359.43

9

PERIOD : DECEMBER-2018

99.87

101.08

103.39

102.55

99.3

11

104.74

93.19

104.49

102.11

104.94

12

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

APRIL 2018 - DEC-2018

ENERGY GENERATION REPORT

OVERALL DOMESTIC COAL SCENARIO Coal Production (in MT) Company

November 2018

November 2017

% Growth

April- November 2018

April- November 2017

% Growth

CIL

52.1

SCCL

5.8

51.3

1.6%

358.3

329.3

8.8%

4.5

28.4%

39.5

36.3

8.9%

Overall Offtake (in MT) Company

November 2018

November 2017

% Growth

April - November 2018

April November2017

% Growth

CIL

51.0

50.7

0.6%

391.8

368.0

6.5%

SCCL

6.1

5.7

7.1%

43.0

40.7

5.7%

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

November 2018

November 2017

% Growth

April – November, 2018

April – November, 2017

CIL

42.5

41.1

3.3%

315.9

291.8

8.3%

SCCL

4.9

4.7

4.1%

35.0

33.9

3.5%

% Growth

Spot E-auction of Coal (in MT) Company

Coal Qty. Allocated November, 2018

Coal Qty. Allocated November, 2017

Increase over notified price

Coal Qty. Allocated April - November, 2018

Coal Qty. Allocated April-November, 2017

Increase over notified price

CIL

1.00

5.24

111%

18.84

31.71

89%

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

Coal Qty. Allocated November, 2018

Coal Qty. Allocated November, 2017

Increase over notified price

Coal Qty. Allocated April - November, 2018

Coal Qty. Allocated April - November, 2017

Increase over notified price

1.53

3.17

262%

21.91

27.43

79%

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

Coal Qty. Allocated November, 2018

Coal Qty. Allocated November, 2017

Increase over notified price

Coal Qty. Allocated April - November, 2018

Coal Qty. Allocated April - November, 2017

Increase over notified price

CIL

0.00

2.25

-

7.30

10.78

70%

Company

Coal Qty. Allocated November, 2018

Coal Qty. Allocated November, 2017

Increase over notified price

Coal Qty. Allocated April - November, 2018

Coal Qty. Allocated April - November 2017

Increase over notified price

CIL

0.50

-

-

0.50

0.35

54%

Special Spot E-auction (in MT)

CCAI Monthly Newsletter December 2018

| 51

MONTHLY SUMMARY OF IMPORTED COAL & PETCOKE Coal Price Index COAL

(kcal/kg)

Monthly Price - FOB

Monthly Price - FOB

Monthly Change (USD)

South Africa South Africa Australia Indonesia Indonesia USA

6000 NAR 5500 NAR 5500 NAR 5000 GAR 4200 GAR 6900 NAR

USD 94.73 USD 67.61 USD 61.52 USD 46.36 USD 30.13 USD 72.00

INR 6699 INR 4782 INR 4351 INR 3279 INR 2131 INR 5092

-0.18 5.15 -1.96 -2.75 -2.02 -4.46

PET COKE

Sulphur

India-RIL(Ex-Ref.) Saudi Arabia (CIF) USA (CIF)

-5% + 8.5% - 6.5%

Price INR 8550 INR 6445 ($91) INR 6763 ($96)

Exchange Rate

Change (Monthly)

USD/INR 70.725

-1.37

Coking Coal Price: Semi Soft

Low Vol PCI

Mid Tier PCI

FOB Aus

Premium Low Vol CFR China

FOB Aus

HCC 64 MID Vol CFR China

FOB Aus

FOB Aus

FOB Aus

CFR India

FOB N China

222.94

208.69

186.09

197.75

117.15

121.44

119.53

374.31

358.04

South Africa: • South Africa is exporting 77 million tons of coal to countries in Asia, despite the nation’s power utility, Eskom, complaining of dire shortages. This issue has recently blazed through social media like an anthracite powered inferno. Satellite images showing mountains of coal waiting to be loaded onto ships docked at the Richards Bay Harbour have caused outrage among frustrated citizens.

Australia:

MET COKE 62% CSR

valuable export this financial year as supply concerns lead to a steep price rise for the core commodity. The Department of Industry, Innovation and Science’s latest Resources and Energy Quarterly report said thermal and coking coal export values would reach $67 billion in total in 2018-19, slightly higher than iron ore’s $61 billion in value. Coal leapt over iron ore as supply concerns ratcheted up the price. It is the first time coal has overtaken iron ore in value since the mining boom five years ago.

Indonesia:

• The outlook for costs in Australia’s thermal coal mining sector is mixed, with rising explosives and equipment costs balanced by falling diesel prices, a slight strengthening in the Australian dollar and increased automation. Three years of steady cost declines are now over, with several mining firms expecting unit costs to increase or stabilise over the next year as wage growth, equipment shortages and higher consumables costs outweigh any remaining productivity improvements and the impact of the diesel price decline.

• Indonesian thermal coal prices held steady, with details of physical trades emerging at similar levels to recent transactions. A 20,000t block of December contracts traded late in the day in the ICI 4 derivatives market. The 20,000t block of ICI 4 derivatives changed hands at $30/t, brokered by Singaporebased Evolution. The latest trades mean that around 1.73mnt has been cleared on the CME since the contract launched in February.

• Coal will replace iron ore as Australia’s most

• Indonesia is expected to produce between 480

52 | CCAI Monthly Newsletter December 2018

million tonnes and 500 million tonnes of thermal coal in 2019, and an estimated 500 million tonnes this year. Indonesian Coal Mining Association chairman Mr Pandu Sjahrir said that “There is a possibility that output next year will be flat.”Mr Sjahrir however, said that among factors contributing to a possible decline in output are “uncertainties” surrounding the transfer of coal contract mining rights to new permit structures. The government is also expected to make a decision in January on domestic market supply requirements for coal miners.

USA: • The EIA expects coal consumption in the US to fall to 627 million tonnes in 2018, down 4% on 2017 and 44% lower than its peak of 1,023 million tonnes in 2007. The fall has been attributed to coal’s declining use in the electricity power sector, the EIA said, with lower prices for renewables and natural gas reducing its utilisation. In the 11 years since its peak of 313GW of online capacity, 55GW has been retired, with a third of the number of generators closing.

• Despite a record rate of US coal-fired power plant closures in 2018, domestic coal prices are unlikely to come under significant pressure, according to sources, partly because exports are currently providing an outlet for excess supply. A lack of downside pressure will be welcomed by producers.

Despite promises by US President Donald Trump to put coal miners back to work and his efforts to repeal Obama-era legislation seen as hostile to the industry, use of the fuel has continued to decline in the power sector.

Pet Coke: • India petcoke buyers are on the lookout for cheaper domestic alternatives amid wide bid-and-offer gaps from the US petcoke market, sources said. While petcoke offers in India are still around $98/mt CFR India levels, bid prices are now close to $90/mt CFR India, an India-based trader said. South African 4,800 kcal/kg NAR coal is available in India at $60$65/mt CIF and essentially, petcoke prices have to come below $90/mt CFR India for end-users to find it “economical,” he added.

Shipping: • A spurt in coal traffic ramped up cargo volumes at major ports during April-November this fiscal.

Thermal or steam coal shipments in the period were up 20.92 per cent. Coking coal, too, recorded a firm growth of 15.44 per cent. Overall cargo traffic at major ports rose 4.83 per cent in this period. In terms of overall cargo shipments, Kamarajar (Ennore) port was the biggest gainer, logging sharp rise of 20.15 per cent. Rise in coal traffic is likely due to a spike in electricity demand. As supply bottlenecks constrain domestic coal supplies, especially to non-regulated sectors like aluminium and cement, dependence on imported coal has shot up. Also, steel makers are importing more of coking coal as domestic supplies have become scarce, an industry insider said. * The Chinese authorities appear to be making good on a commitment to try and limit the country’s imports of the polluting fuel to levels the same as 2017. The restrictions have led to a sharp drop in the daily import of coal so far in December, according to vessel-tracking and port data compiled by Refinitiv.

Seaborne imports in the first five days of the month stood at 1.5 million tonnes, or a daily rate of just 300,000 tonnes. This compares to total seaborne imports of 226.2 million tonnes in the first 11 months of 2018, a daily rate of about 677,000 tonnes.

CCAI Monthly Newsletter December 2018

| 53

PRODUCTION AND OFFTAKE PERFORMANCE OF CIL AND SUBSIDIARY COMPANIES COAL PRODUCTION (Figs in Mill Te) DEC’18

SUB CO. ACTUAL THIS YEAR

APR’18 - DEC’18

ACTUAL SAME % PERIOD LAST GROWTH YEAR

ACTUAL THIS YEAR

ACTUAL SAME PERIOD LAST YEAR

% GROWTH 17.2

ECL

4.56

4.36

4.6

32.93

28.09

BCCL

2.57

3.22

-20.2

21.49

21.97

-2.2

CCL

6.7

5.69

17.8

41.65

37.29

11.7

NCL

9.03

8.65

4.4

74.65

67.45

10.7

WCL

5.61

4.71

19.1

32.16

27.75

15.9

SECL

12.52

14.41

-13.1

110.75

101.71

8.9

MCL

13.05

13.49

-3.2

98.38

99.31

-0.9

NEC

0.1

0.11

-11.2

0.45

0.36

26.2

CIL

54.13

54.63

-0.9

412.45

383.92

7.4

OFFTAKE (Figs in Mill Te) DEC’18

SUB CO. ACTUAL THIS YEAR

APR’18 - DEC’18

ACTUAL SAME % PERIOD LAST GROWTH YEAR

ACTUAL THIS YEAR

ACTUAL SAME PERIOD LAST YEAR

% GROWTH

ECL

4.46

4.25

5.1

34.71

29.66

17

BCCL

2.51

2.91

-13.5

24.57

23.74

3.5

CCL

5.7

6.06

-5.9

48.97

49.34

-0.7

NCL

9.23

8.97

2.8

75.84

70.97

6.9

WCL

5.04

4.75

6.2

39.76

35.19

13

SECL

12.95

13.71

-5.5

115.43

110.93

4.1

MCL

12.79

12.7

0.7

104.86

101.11

3.7

NEC

0.09

0.09

-5.6

0.45

0.5

-10.5

CIL

52.77

53.44

-1.2

444.59

421.43

5.5

54 | CCAI Monthly Newsletter December 2018

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