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Coal: Leap in production, improved dispatches to stave off possible fuel shortages in 2022
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The country's coal production is expected to record a "sizeable leap" in 2022 with increased output mainly from Coal India and captive mines, providing adequate firewall against any possible dry fuel shortages like the one witnessed in the latter half of this year. While coal supplies have stabilised in recent times, efforts are on to further improve the fuel dispatches and a top government official said power plants are now receiving slightly more coal compared to their requirements. Coal Secretary Anil Kumar Jain said the increase in coal output would be on account of more production from Coal India Ltd (CIL), captive coal blocks auctioned between 2015- 2020 and commercial mines put on sale last year. In the last financial year, CIL dug out about 596 million tonnes (MT) of coal, he said, adding that in the ongoing fiscal, the output is likely to be upped to 640 MT. The captive coal mines that were put on sale post cancellation of blocks by the Supreme Court produced 63 MT last fiscal. In the current financial year, their production is likely to be scaled up to 90 MT.
Coal to stay as major source of energy in foreseeable future: Pralhad Joshi
Coal will stay as a major source of energy in the foreseeable future as it is an affordable source
of energy with substantial reserve, Parliament was informed. Despite push for renewables, the country will require base load capacity of coalbased generation for stability and also for energy security, Coal Minister Pralhad Joshi said. The pact calls upon parties to accelerate the development, deployment and dissemination of technologies, and the adoption of policies, to transition towards low emission energy systems, including by rapidly scaling up the deployment of clean power generation, including accelerating efforts towards the phasedown of unabated coal power and phaseout of inefficient fossil fuel subsidies, he said.
It is evident the pact is not mandating the phasedown of coal power, and it is not setting any timelines for that, the minister noted. Further, it is only 'calling upon' parties to accelerate efforts towards the phasedown of unabated coal power in line with national circumstances and recognising the need for support towards a just transition, the minister added.
Coal PSUs paid over Rs 33,479 crore as dividend in the current fiscal
The Central Government has received Rs 3,668 crore from Coal India as dividend tranche, taking the total proceeds from dividend from PSUs to over Rs 33,479 crore for Financial Year 202122 so far. These figures were shared by Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey in a series of tweets on December 23, 2021.
In addition, the Government of India has also received Rs 21 crore, Rs 48 crore, Rs 69 crore and Rs 23 crore from Telecommunications India Ltd, IRCON, RITES and NIIFL as dividend tranches, he further added.
"Government has received about Rs 3668 crore from Coal India Ltd and Rs 21 crore from Telecommunications India Ltd as dividend tranches," he said in a twitter post. "Government has respectively received about Rs 48 crore, Rs 69 crore and Rs 23 crore from IRCON, RITES and NIIFL as dividend tranches,"
India's coal import declines 27% to 16 mn tonnes in October
India's coal import registered a decline of 26.8 per cent to 15.75 million tonnes (MT) in October over the same month a year ago. The country had imported 21.50 MT of coal in October 2020, according to data compiled by mjunction services.
"India's coal and coke imports in October 2021 through the major and non-major ports are estimated to have decreased by 26.8 per cent over October 2020," it said.
mjunction -- a joint venture between Tata Steel and SAIL -- is a B2B e-commerce company and also publishes research reports on coal and steel verticals.
However, coal import in October was up 6 per cent as compared to 14.85 MT imported during September 2021, the data show. Of the total import in October 2021, non-coking coal was at 9.47 MT, against 14.46 MT imported in October last year. Coking coal import was at 4.05 MT, lower than 4.92 MT imported in October 2020. During the April-October period of the ongoing fiscal, total coal import stood at 123.09 MT, about 5.4 per cent higher than 116.81 MT in the year-ago period.
Coal India’s coal grades improve 64%in April-Oct
Coal India Ltd’s emphasis on ensuring better quality coal supplies seems to be yielding results with the state-owned miner registering an improvement in grade conformity in coal supplies to 64 per cent during April-October 2021 as against 59 per cent during same period last year. The improvement is based on an analysis conducted by independent third-party sampling agencies. Grade conformity refers to the supply of declared grade of coal and above it. The improvement in coal grade conformity comes at a time when there have been conten-
tions of fall in quality of coal supplies by a certain section of Coal India’s customers.
The notion that customers were not receiving the grade of coal that they pay for was misconceived, as no customer suffers financial loss arising out of quality mismatch between the declared dispatched grade and the analysed grade. To allay apprehensions on quality issues, all Coal India customers can also opt for quality assessment of coal supplies through independent third-party sampling agencies (TPSA). To strengthen analysis of coal supplied, Coal India has engaged two third-party sampling and testing agencies —COTECNA Inspection India and SGS India — in addition to the existing CSIR-CIMFR and Quality Council of India. Further, the Ministry of Power has decided that Power Finance Corporation shall empanel TPS.
Commercial mining: 53 bids for 20 coal mines; Vedanta, Hindalco, JSW among bidders
As many as 53 bids have been received from 37 companies, including JSW, Jindal Steel & Power Ltd (JSPL), Vedanta and Hindalco Industries, for 20 coal mines that have been put up for sale for commercial mining. The auction process of 88 mines for sale of coal was launched by the Ministry of Coal on October 12, according to an official statement.
Two of these mines are coking coal blocks and the remaining 18 mines are non-coking coal blocks. Two or more bids have been received for 10 coal mines, it said.
The last date of submission of technical bid was last week. As part of the auction process, technical bids comprising online and offline bid documents were opened this month in the presence of the bidders.
A total of 37 companies have submitted their bids both offline and online in the auction process. The other companies which also submitted their bids are BALCO, Jindal Power and Sunflag Iron & Steel among others. The maximum of 12 bids were made for NamchikNamphuk coal block, followed by seven for Utkal C block, five for Bijahan mine among others.
After successful auction of 28 coal mines in the first two tranches, Ministry of Coal had in October launched the auction process of 40 new coal mines -- 21new mines under CM(SP) Act and 19 new mines under the tranche three of MMDR Act.
Coal Ministry intimates about revenue and employment generation via coal block auctioning
The Union Minister of Coal, Mines and Parliamentary Affairs Shri Pralhad Joshi in a written reply in Rajya Sabha stated that the ministry had appointed a Nominated Authority for the allocation of 204 cancelled coal blocks. Nominated Authority has appointed SBI Capital Capital Markets as Transaction Adviser through transparent bidding. Initially, in the First Round of the auction for commercial mining, 41 coal mines were offered. Later on, 6 mines were withdrawn and 3 mines were added taking the tally of coal mines offered in the First Round to 38.
In respect of the 41 coal mines initially offered in the First Round of auction, Transaction Adviser had undertaken an exercise to estimate the figures of creation of jobs and generation of revenue based on the estimated Peak Rated Capacities of the 41 coal mines. Accordingly, it was estimated that for 1 MTPA of coal production, 1352 employment [Direct plus indirect] would be generated. The aggregate peak rated capacity of 41 coal mines offered in the First Round of the auction was approximately 226 MTPA and the estimated employment was calculated as approximately 3 lakhs.
In respect of a generation of revenue, it was estimated that approximately Rs.20,578 crore would accrue to coal-bearing State Governments considering production at aggregated
Peak Rate Capacity level of approximately 226 MTPA. This estimate was based on the taxes applicable on approximately 226 MTPA of coal produced viz. Royalty, District Mineral Fund, National Mineral Exploration Trust, etc.
SCCL aims at 100 million tonnes coal production by 2025
SCCL is aiming to attain annual production goal of 100 million tonnes by 2025 with a contribution of 10 million tonnes a 12 months from Naini block in Odisha from the subsequent monetary 12 months. A number of public sector undertakings have been began and a number of other have been closed attributable to losses over the past 100 years within the nation however SCCL goes up step by step. Stating that the corporate is poised to make report income this (2021-22) 12 months, the CMD mentioned they’re going forward in direction of the goal of reaching 68 million tonnes production and 400 million cubic meters of overburden removing. Besides, the corporate has plans to open 10 new mines within the subsequent three years and when the production reaches 100 million tonnes a 12 months, the turnover of the corporate could be within the vary of 30,000 crore to 40,000 crore a 12 months with some contribution from 1,200 megawatter thermal energy plant, 300 mw photo voltaic vegetation, 250 mw floating photo voltaic plant and others.
A Steering Leadership meeting of Global Methane Initiative (GMI) has been held virtually in which the Additional Secretary, Ministry of Coal, Shri V.K. Tiwari as the Vice Chairman of this global initiative informed the participants about the work being carried out by India to mitigate the emission of methane.Emission of methane is a big concern as it is a greenhouse gas having 25-28 times harmful effect than carbon dioxide.
Global Methane Initiative(GMI) is a voluntary Government and an informal international partnership having members from 45 countries including the United States and Canada. The forum has been created to achieve global reduction in anthropogenic methane emission through partnership among developed and developing countries having economies in transition.
The forum was created in 2004 and India is one of the members since its inception and has taken up Vice-Chairmanship for the first time in the Steering Leadership along with USA. The Chairperson of the Steering Leadership is from Canada.
Several decisions including holding of next round of meeting in near future were taken. Both Canada and the US appreciated the actions taken by India in reducing and harnessing methane gas.
The second out of seven Panamax-class ships arrived to Ukraine carrying 66,000 tons of coal brought from the United States, DTEK Energy, Ukrainian strategic holding company that owns coal and natural gas production companies, said.
"The second Panamax-class ship arrived to Ukraine carrying American coal. The total volume of the second delivery is 66,000 tons," DTEK said in a statement published on its website.
The vessel was delivered to Ukraine within a framework of agreements between DTEK and international suppliers on the import of seven shiploads of coal from the United States and Colombia.
"Despite having faced challenges with availability and record energy prices on global markets, today we are welcoming the second ship with coal from the United States.
In the coming days, it will fill the reserves of our thermal power stations and will ensure the Ukrainian energy system will stay stable during
peak periods," DTEK Energy CEO Ildar Salieiev said.
The first vessel carrying US coal arrived to Ukraine on November 20. Three more shiploads are expected to arrive to Ukraine in December. The total volume of coal that the country will be supplied with is around 470,000 tons.
STEEL
Govt may cut duty on steel, aluminium in Union budget
The government may consider reducing import duties on products such as steel, aluminium, copper and polymers in the budget to provide relief to small and medium businesses, which have been hit hard by surging input costs, two people aware of the development said. A broad understanding between the steel and finance ministries has been reached to review import duties on major metals and bring them down and, in some cases, withdraw them completely to help user industries, the people said, requesting anonymity. An announcement on this is expected in the upcoming budget, they said. The steel ministry did not respond to a query seeking comment, while a mail to the finance ministry didn’t elicit a reply. The import duty on steel is 7.5%, while aluminium attracts 10% basic customs duty, copper 5% and polymers 10%. In addition, all the products also attract 18% integrated goods and services tax to offset local levies on the products.
Arcelor Mittal Nippon Steel’s Rs 1 lakh crore steel unit approved in Odisha’s Kendrapada
The Naveen Patnaik government approved ArcelorMittal Nippon Steel India’s (AM/NS India) proposal to set up a 24 MTPA integrated steel plant at Mahakalapada block in Kendrapada district at an investment of Rs 1 lakh crore.
High-Level Clearance Authority of the Govt of Odisha, under the leadership of CM Naveen Patnaik, gave its green signal to the mega project which is expected to create employment opportunities for 16,000 persons and indirect employment opportunities through ancillary and downstream industries and services.
The Odisha government said Arcelor Mitta Nippon Steel’s approved project of setting up a 24 MTPA integrated Steel plant in Odisha’s Kendrapara will be the largest project in the manufacturing sector in the country. Besides, the plant is also expected to churn out 18.75 MT of cement annually, making it one of the biggest cement manufacturing facilities in the country and thereby, providing a boost to the infrastructure development in the region. In addition to the Steel plant, the company will also be developing a downstream industry park to assist the MSMEs and helo import substitution. AMNS’ plant is expected to attract a plethora of auxiliary companies in the region to support the country’s biggest steel manufacturing unit, the Odisha government said.
Steel producers to benefit on account of raw material availability, says chairman, SAIL
Steel trade in the global market will see a significant change with China cutting down production and the Chinese government withdrawing various support it provided to its steel industry. “The Chinese government, which has been providing support to its steel industry in terms of various policies, recently has been withdrawing the same so as to ease the environmental concerns. The decision to cut down production has a tremendous impact on the input materials such as iron ore and coking coal. The demand for these are expected to come down and the prices will follow the path also,” Soma Mondal, chairman, SAIL said.
She said although Indian producers were not much dependent on iron ore inputs, international price movement of iron ore could have a “bearing on the domestic iron ore prices”. On the other hand, coking coal, imported in huge quantities, especially by the branded producers, would have improvement in availability down the line, correcting prices. This would help producers in sustaining margins and “steel trade in the international market will see a significant change”, Mondal said. Coking coal prices surged from $100 per tonne to $ 400 per tonne but there has been some recent softening with prices coming down to $ 320 per tonne. Meanwhile, China’s total domestic steel output has been cut down by 21.4% year-on-year in October and China has been aggressively cutting down steel output during the second half of the fiscal.
The second out of seven Panamax-class ships arrived to Ukraine carrying 66,000 tons of coal brought from the United States, DTEK Energy, Ukrainian strategic holding company that owns coal and natural gas production companies, said.
"The second Panamax-class ship arrived to Ukraine carrying American coal. The total volume of the second delivery is 66,000 tons," DTEK said in a statement published on its website.
The vessel was delivered to Ukraine within a framework of agreements between DTEK and international suppliers on the import of seven shiploads of coal from the United States and Colombia.
In the coming days, it will fill the reserves of our thermal power stations and will ensure the Ukrainian energy system will stay stable during peak periods," DTEK Energy CEO Ildar Salieiev said.
The first vessel carrying US coal arrived to Ukraine on November 20. Three more shiploads are expected to arrive to Ukraine in December. The total volume of coal that the country will be supplied with is around 470,000 tons.
CEMENT
Indian cement sales rise in first half of 2022 financial year
Finance company ICRA reported all-India cement sales in the first half of the 2022 financial year of 124Mt, up by 22% year-on-year. Mint News has reported that the total value of cement sales rose by 5% in the period compared to the first half of the 2021 financial year. Producers’ raw materials costs rose by 16%, while power, coal and petcoke costs rose by 26% and freight costs rose by 7%. Granulated blast furnace slag (GBFS) and gypsum prices also rose. ICRA corporate ratings assistant vice president and sector head Anupama Reddy said "Despite some easing in the cost-side pressures, the input costs are likely to remain elevated in the near term, and are expected to exert pressure on operating margins, which are likely to decline by 200 to 230 basis points (BPS) in the 2022 financial year as a whole. While the capacity additions are expected to increase year-on-year in the 2022 financial year, the reliance on debt is likely to be lower owing to the healthy cash generation and strong liquidity of the cement companies. The debt coverage metrics are expected to remain strong in the 2022 financial year." The current steel price is stable as Indian steel demand is good and improving month on month. “I, therefore, don’t see any structural reason for a price correction. On the contrary, the steel stocks levels are low across channels,” he said. “We are, however, supporting MSMEs (micro, small and medium enterprises) with a specific initiative via NSIC (National Small Industries Corporation) and hypermart.
