Domestic

COAL

Govt plans new tech, digital infrastructure to support domestic coal mines operations

The government plans to implement new technologies and build digital infrastructure to support current and future coal mines operations, a move that would reduce the country's dependency on imports. Technological advancements in coal mining are also making operations more productive. This involves a strong, multi-speed backbone information technology and infrastructure system that allows rapid deployment of new technologies. To reduce the dependency on imports, it is critical for Coal India Ltd (CIL) to reach the one billion tonnes (BT) target, thereby embarking on a technological transformation journey, it said. New technologies can have a number of impacts on mining operations, including safety and productivity, environmental protection, and opportunities for women. Safer working conditions through improved underground communication, automation, more sophisticated mineral and metal transportation, and emergency response measures are achieved by integrating technology into mining projects. "The scope of this road map (is)...technology enablement in coal mines for transformation across business value chain, leveraging 'digital technology' as an accelerator for demonstrating performance enhancement from in the coal mines and increasing productivity, safety and sustainability while...reducing environmental impact by upgrading conventional technologies to new technologies," according to the draft road map.

India’s coking coal imports fall to 14-month low

India's coking coal imports in December fell to their lowest in more than a year as wetter weather in Australia slowed its Queensland coal supply chain. Imports fell by 32pc on the same month a year earlier and by 26pc on the previous month to 3.64mn t, the lowest since August 2020. Australian imports in December fell by 31pc on the year and by 34pc on the month to 2.89mn t. Previous imports from the country had increased by 46pc on the year in November after a fall in prices. Other origins partially offset Australia's slowdown as imports from the US, Mozambique, Indonesia, and Russia all increased. India's pulverized coal injection (PCI) imports stood at 959,085t in December, down by 40pc on the year and by 5pc on the month. PCI imports from Australia continued to supply the bulk of India's PCI shipments, standing at 852,157t, down by 24pc on the year. India's metallurgical coke imports totaled 170,616t in December, down by 42pc on the year and by 21pc on the month. Arrivals from Poland topped December imports again at 65,361t, followed by Colombia at 48,183t. Japan imports increased more than fivefold on the year and sevenfold on the month to 33,999t.

Coal India Says Falling Imports, Price Rise Pose Challenges

Maharatna company Coal India Limited (CIL) has said that the second half of the current financial year has been tough for the sector due to falling imports and global prices of dry fuel witnessing a three-time rise. Beside these reasons, the prolonged monsoon in the coal-bearing areas made the situation more challenging, CIL said in a statement. Despite the challenges, the company due to "meticulous planning" rose to the occasion and fulfilled the demand of additional coal for thermal power plants, the statement added. CIL supplied around 20 million tonnes of additional coal due to curtailed import of dry fuel. The company accounts for over 80 per cent of domestic coal output and is eyeing one billion tonnes of coal production by 2023-24.

Coal India stock awaits price increase trigger

Coal India Ltd (CIL) witnessed a remarkable 22% sequential growth in consolidated revenues during the December quarter (Q3FY22). One factor that drove this improvement was the strength in price realizations in coal sold through e-auctions. In Q3, e-auction realizations stood at 1,947 per tonne, a 42% premium over coal sold through fuel supply agreements (FSAs). It helps that higher global coal prices have further boosted e-auction realizations. The state-run coal producer told analysts that the e-auction premium over FSA coal stood at about 100% in January. That apart, domestic coal demand is robust, which helps volume outlook. These factors should support CIL’s earnings prospects in the near-to-medium term, at least. In Q3, e-auction realization rose by 22% vis-àvis Q2, while that of FSA fell about 1%. Note that FSA volumes rose about 23% sequentially, while e-auction volumes fell about 4%. Analysts point out CIL was not able to fully capitalize on higher e-auction realizations due to the diversion of incremental volumes to power linkages. To that extent, e-auction volume growth was impacted. But, CIL’s Ebitda (earnings before interest, taxes, depreciation and amortization) increased by 26% year-on-year to 7,385 crore, which is decent. This is Ebitda excluding stripping activity adjustment expenses. Meanwhile, CIL’s investors await potential price hikes in the FSA segment with the cost outlook posing a headwind. In a call last week, the management acknowledged the urgent need for price hikes.

Coal India's despatch to power plants rise 23% in AprilFebruary’22

State-run Coal India Ltd's despatches to power plants rose 23% to 468.4 million tonne so far in the current financial year. During the corresponding period of the last fiscal, the company had supplied 381 million tonne to power plants. Overall supplies of Coal India so far in the fiscal stood at 575 MTs higher than the annual despatch of 574.5 million tonne in financial year 2021. The 9.4% growth in power generation till December FY22 was the highest in a decade on the back of a strong post-Covid economic revival. Whereas, coal imports are down to a nine-year low due to a sharp increase in international coal prices. The company has ensured higher availability of coal at a time when the domestic coal-based generation spiked up by 17% till January FY22. It aims to scale up its supplies to the regulated power sector to 548 million tonne ending 202122 as per the projection of central electricity authority. This would mean a whopping 103 million tonne volume jump compared to the power sector’s despatch of 445 million tonne in FY21..

India to be self-dependent in coal production for thermal power generation by 2024, says Coal Secretary

Coal Secretary Anil Kumar Jain said the import of coal for thermal power generation will end in India by 2024 and the domestic production of the dry-fuel is expected to rise by 10 per cent. He said 90 million tonnes of coal for thermal power plants used to be imported. There is a possibility that this year, 60-70 million tonnes of this will be achieved domestically. In 2023, there will be limited requirement of imported coal. He further said that along with good results in productivity out of commercial mining, the production of coal by Coal India Ltd will also increase by 10 per cent. Jain also said it is expected that demand for electricity will grow 10 per cent next year. Coal India Ltd’s production is expected to be 630635 million tonnes this year and will increase to 700 million tonnes during next fiscal year.

Non-power coal users claim shortage; government denies

India's aluminium smelters, textile mills, sponge iron and fertiliser-makers say they face a coal shortage as power generators take the bulk of supplies. Top miner Coal India Ltd, which accounts for more than 80% of India's production of the fuel, and the coal ministry, deny there is a problem. In a letter to the Prime Minister Narendra Modi dated February 7, eight industry associations including the Aluminium Association of India and Fertilizer Association of India urged the government to ensure a "justified ratio of coal allocation between power sector and industries". They do not give precise figures on the extent of the shortage, but industry officials said the government's policy of prioritising coal shipments to power generators rather than the non-power sector in response to high prices and reduced imports had caused panic and uncertainty. Supplies to the non-power sector have been lower than last year, and the number of trains supplying coal to it dipped to 12-14 trains per day at end-January, compared with 36 in August, the Coal Consumers Association of India said.

42 Coal Mines Auctioned Till

Date for Commercial Use: Government

A total of 42 coal blocks have been auctioned till date for commercial mining, government has said, adding that out of these, 10 reserves were auctioned last week under the third tranche. Jindal Steel and Power and Hindalco Industries were among the successful bidders during the round. On the first day of the auction held last week, five blocks were sold, where Dalmia Cement Bharat Limited had emerged as the highest bidder for two coal blocks in Jharkhand. Mahanadi Mines and Minerals had emerged as the highest bidder for a coal block in Odisha while Yazdani Steel and Power was the highest bidder for another coal mine in the eastern state. The 10 blocks sold last week are projected to generate an annual revenue of 2,858.20 crore, the ministry said. On the second and the third days of the auction, Jindal Steel and Power had bagged Utkal-C coal mine in Odisha while Hindalco Industries made the highest bid for Meenakshi mine in the state. BS Ispat Limited emerged as the highest bidder for Majra mine in Maharashtra, and Assam Mineral Development Corporation bagged Garampani coal block in Assam.

Coal Giant NCL is Moving towards Renewable to Become a Net Zero Company

In line with Nations’ Commitment towards Energy Transition and improving on the share of clean energy, Northern Coalfields Limited (NCL), a Coal India arm is responding positively to these shifts and moving swiftly towards producing Renewable energy to become a Net Zero Company under the aegis of its Sustainable Development Cell. With its robust energy strategy, Company is aggressively focusing on generating 270 MW of solar power for internal consumption by the year 2025-26, with an approx. Capital Expenditure of 440 crores. The company has already started working on the 50 MW Ground Mounted Solar Project in Nigahi Area of NCL along with 3.37 MW rooftop Solar Project in Offices and Townships of Different units of the Company including its HQ. Besides this, NCL is also adopting the energyefficient measures across Mining and other major operations like deployment of new HEMMs with state of the art technology

RAILWAYS & SHIPPING

Gangavaram port clocks record cargo handling

Gangavaram Port Ltd (GPL) said it has created a national record when it comes to steel loading with the port loading 10,854 metric tonnes (MT) of steel blooms for RINL in 24 hours using vessel cranes in February 2022, surpassing its earlier record of 9,078 MT on a 24-hour basis in November-2021. The port also achieved its highest ever loading of iron ore fines in 24 hours this month when it loaded 53,262 MT onto MV Crimson Knight for KIOCL, surpassing the previous record of 52,577MT on vessel MV African Spoonbill. The port also achieved its maiden record in sugar cargo loading of 16,020 MT from MV Jenny M that berthed at the port on February 21, in addition to the highest ever steam coal discharging of 70,000 MT in 24 hours from vessel MV Manasota for AEL in January 2022 by deploying ship unloader cranes. It also set a record in PCI coal discharging with 43,700 MT PCI coal discharged within 24 hours using harbour mobile cranes from vessel MV Atmosphere for JSPL in January this year.

Two longest Railway flyovers being built in Katni for smooth movement of coal-laden trains

Two longest railway flyovers in the country, with a total length of 34.9 km, are being built at the estimated cost of Rs 1,250 crore in Madhya Pradesh's Katni district for smooth movement of trains carrying coal, an official said. The two flyovers, one each on the up and down directions, are being built on the Bina-KatniBilaspur route under the Katni grade separation project, said Rahul Jaipuriyar, the chief public relations officer of the West Central Railway (WCR) said. The project will help in the smooth movement of coal-laden trains from mines in the eastern parts of Madhya Pradesh and Chhattisgarh. Coal trains running on the Katni-Singrauli route will have direct access to these flyovers, he said. The Rs 1,250-crore project was started in 2020 and is expected to be completed by 2023-24, the official said, adding that 25 per cent of the work has been completed. The flyovers will comprise eight Rail-Over-Rail (ROR) bridges on two existing railway routes, including six other bridges on rivers, he said. The Jabalpur-Katni-Manikpur and Bina-KatniBilaspur routes have separate infrastructure that crosses Katni,

STEEL

4QFY22 Spreads For Steel Sector Could Moderate Due To Higher Coking Coal Prices

India Ratings and Research has published its January 2022 credit news digest on India's steel sector. The report highlights the demandsupply scenario, price trends, imports/exports in both India and China encompassing finished steel products (both flat and long), scrap, iron ore, coking coal and others, while also evaluating the impact of end-user industries on India's steel sector. The agency has also covered its recent rating actions. Production improves in 2021 Ind-Ra opines India's steel production growth in 2HFY22 will be supported by strong consumption growth and preparedness of the sector participants with new capacities. India's crude steel production improved 0.9% year on year (yoy) and 6% month on month (mom) to 10.4 million tonnes (MnT) in December 2021. During 2021, India's crude steel output was 118.1MnT, up 17.8% yoy. The global crude steel production was 158.7MnT in December 2021, 10.8% mom higher month on month (mom) but 3% yoy lower. Chinese crude steel production was 86.2MnT in December 2021, 24% higher mom, but 6.8% lower yoy. In 2022, Chinese production is likely to reduce with the government focus of regulating steel output to reduce the environmental impact. In 2021, the global crude steel production was 1,911.9MnT, 3.6% higher yoy.

MoEF panel gives green nod to JSW’s steel plant project

An expert appraisal committee of the Union ministry of environment and climate change (MoEF&CC) has recommended grant of environment clearance (EC) for JSW Utkal Steel Ltd’s proposed steel plant near Paradip in Jagatsinghpur district. The committee that had deferred granting environment clearance to the company seeking more information, has set a series of conditions while giving its nod. The Sajjan Jindal-led group has planned a 13.2 MTPA crude steel plant along with 900 MW captive power and 10 MTPA cement grinding unit. It also plans to set up a captive jetty near the plant. While the state government is in the process of handing over of land for the project, the project has been facing stiff resistance from

some locals. At least three petitions relating to the project have also been pending in the Orissa high court. The committee has also set a condition that the project proponent shall not construct any steel plant facility on north-eastern portion of high tide line and sand dunes in the vicinity of the project site. The company has also laid the condition that no filling and raising of land beyond 2950.10 acres (constituting 973.533 acres of green belt) shall be permitted to the project proponent. As an area of 209.34 acres (84.72 hectares) of the forest land is located in between the proposed integrated steel plant and jetty, the MoEF&CC said the forest area will remain untouched and separated from the plant and jetty.

Demerger of Nagarnar plant will be completed by June 2022: NMDC

The country’s largest iron-ore producer NMDC Ltd is expecting to complete the demerger process of its upcoming 3 million tonne per annum Nagarnar iron and steel plant by “late March or around April-June”. and the value unlocking will happen once the steel plant gets listed “in another two to three months”. According to Amitava Mukherjee, Director (Finance), NMDC Ltd, the State-run company has requested for waiver of creditors meeting. If the Ministry of Corporate Affairs (MCA) accedes to the request, then the demerger process could be completed by March-end or end-of-April. Necessary clearances from SEBI and the stock exchanges have already been received. In case, the MCA “directs” NMDC to go ahead with a creditors meeting (there are two creditors), then there could be a delay of “a month or a month-and-a-half”. The commissioning of 3 mtpa steel plant in Chattisgarh has begun and commercial production is expected around July. The management indicated that coke oven heating process has begun and production is expected “maybe in the end-of-March” or “beginning-ofApril”. Nearly 19500 crore has been invested till Q3 FY22 in the project.

Aluminium players say captive power plants facing alarmingly depleted coal stock, seeks govt help

Seeking the government’s intervention, the Aluminium Association of India (AAI) has said the sector’s captive power plants are facing "alarmingly" depleted coal stock of only threefour days as against the prescribed level of 15 days. The aluminium industry has also made a plea to earmark at least 25-30 coal rakes per day for economically viable and sustainable industry operations. "The captive power plants (CPPs) of the aluminium industry are facing alarmingly depleted coal stocks of only 3-4 days as compared to the prescribed level of 15 days,” the AAI said in a recent letter to the coal secretary. There is a backlog of over 6,000 coal rakes as most of the available coal and rakes are being diverted to the power sector as "priority coal supplies", the AAI stated and urged the government to earmark at least 25-30 coal rakes per day for economically viable and sustainable industry operations.

CEMENT

Cement prices likely to stay firm in Q4 after staying buoyant in January

Cement prices were buoyant in January. Analysts expect the trend to continue for the remainder of the fourth quarter given rising input costs and improving demand trend as construction activities gain momentum. This

augurs well for cement companies, which have been through a period of demand uncertainty over the past few quarters due to the impact of the pandemic coupled with an extended monsoon season. In the recent past, cement prices did not see any major increase as companies were unable to peg the demand trend. However, this is likely to change given a sustained push to demand. In January, companies increased prices by 2-5% compared with the previous month. All India average cement price increased by 5% year-onyear to Rs365 per 50 kg bag in January. It was 2.1% higher than the month-ago average price. One of the major reasons for the price increase is the rising construction activities amid falling Covid cases and abating intensity of cold weather. In addition, increasing construction of government-funded infrastructure projects (including election spending) will boost demand. Another major factor is the rising prices of key raw materials – pet coke price has increased by over 50% while diesel price is up 14.4% year-onyear. Cement companies will have to undertake price increases to retain profitability amid rising input costs.

India Cements reports drop in profits owing to 'coal crisis' and poor prices

India Cements reported a sharp decline in net profit for the quarter ended December 31 with profits slumping to Rs 3.3 crore as opposed to Rs 62 crore in the same quarter last year. The company attributed this decline to poor prices and higher cost of production. It said that the heavy rainfall and subsequent flooding in a number of southern states too played spoilsport as it led to stalling of construction activities, which in turn impacted the company. "Our main markets were flooded," N Srinivasan, Vice Chairman and Managing Director of India Cements said. "And what used to give us some succor was the East - where the prices were very low. So, we had to choose whether to supply there or not and we chose not to. On top of this, for the first time we had a coal crisis. The cost of coal went up from $60 to $290." He said that American coal was unavailable, Australian coal was priced high while Indonesian coal's supply was erratic. He also added that the quality of South African coal does not match that of American coal. Hence, those who bought coal earlier at low prices were the ones who could sustain.

Ambuja Cements to invest Rs 3,500 Cr. for raising cement grinding capacity

Ambuja Cements Ltd, part of Swiss building material major Holcim group (earlier LafargeHolcim), announced an investment of Rs 3,500 crore for expansion of its cement grinding capacity. "The board has approved in principle an investment of Rs 3,500 crore for a cement grinding expansion plan of potential 7.0 million tonnes across our existing grinding units at Sankrail and Farakka and at a greenfield (fresh) location at Barh, in Bihar," Neeraj Akhoury, CEO of Holcim India and MD & CEO of Ambuja Cements, said in an earnings statement. This is supported by a 3.2-million tonne brownfield (existing) clinker expansion at the company's existing integrated plant in Bhatapara, Chhattisgarh, he added. Currently, Ambuja Cement has an annual cement production capacity of 31 million tonnes with six integrated cement manufacturing plants and eight cement grinding units across the country. Its consolidated revenue from operation stood at Rs 28,965.46 crore in 2021.