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Domestic
The Centre on Friday said it has put a major thrust on sustainable development in coal mining and is taking multi-pronged action on both environmental and social fronts. The Ministry of Coal has moved forward with a comprehensive sustainable development plan and initiated its speedy implementation. Primary focus is on making immediate social impact through Out of Box (OoB) measures besides regular environmental monitoring and mitigation during mining operation, the coal ministry said in a statement. These OoB measures include use of surplus mine water for irrigation and drinking purpose in and around mining areas, extraction and use of sand from overburden (OB), promoting Eco-Mine Tourism, encouraging bamboo plantation, etc. Top most priority is being given to gainful utilisation of mine water for irrigation and providing treated water for drinking to rural population in and around command area of mining subsidiaries of Coal India (CIL), Singareni Collieries Company Ltd (SCCL) and NLC India Ltd (NLCIL).
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Centre to permit sale of 50% coal from captive blocks; invites comments
The Centre plans to permit sale of 50 per cent of coal/ lignite produced by captive blocks, a move aimed at augmenting the production and increasing the availability of dry fuel. The government plans to do so through incorporation of a provision in the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR). "In the note for consultation of Ministry of Mines, it is proposed to incorporate a provision in the Act to allow sale of 50 per cent of coal/lignite produced by captive mines on an annual basis. Further, an additional amount will be charged on the merchant sales of coal/lignite by the captive miners," the coal ministry said in brief note. The ministry said that it has invited comments from the state governments of coal-bearing states and stakeholders/general public on the said proposals.
The Ministry of Mines has also invited comments of the state governments, among others, on the proposals for additional amendments being considered in the MMDR Act. It is further proposed to specify the additional amount payable on such sale in the Act itself instead of leaving it to be specified under the rules framed under the Act in the same manner as will be specified for the other minerals.
Coal projected to be India's largest source of power in 2040: World Coal Association
Coal is projected to remain the largest single source of electricity in India in 2040, according to Michelle Manook, Chief Executive, and World Coal Association. She said that coal will continue to play a vital role in supporting intermittent renewable energy sources to underpin infrastructure development and industrialization. "India is choosing to prioritize economic growth enabled by a resilient energy mix, inclusive of coal and clean coal technologies," Michelle said, adding a pragmatic and collaborative focus from international governments, industry, and investors is needed to ensure policies are in place to support the deployment of clean technologies. "An Upcoming Coal Industry Advisory Board (CIAB) report, 'A Pathway to reducing emissions from coal power in India, provides a model for wider development and deployment of efficient, clean coal technologies in India to meet environmental goals," Michelle added.
Coal India to invest in 26 projects in new business areas, plans to tie up with private companies
Coal India plans to invest Rs 1.43 lakh crore in 26 projects in new business areas. The new business areas will include solar wafer manufacturing, a greenfield aluminium project along with brownfield aluminium projects in a joint venture with NALCO, solar generation projects, and thermal power plants. CNBC-TV18 Learns that the company has received approvals from NITI Aayog, DIPAM for the solar water manufacturing and the greenfield aluminium projects. The company has already prepared a draft market assessment report and plans for a special purpose vehicle (SPV) and aims to float tender for the JV by Q2 of FY22. The company plans to incorporate SPV where it will seek private partners and bid will be on the lines of the UMPP (Ultra mega power project). It also plans to participate in the solar energy corporation of India’s (SECI) for solar power generation projects in a JV with Neyveli Lignite Corporation once it gets approval. Coal India with Neyveli lignite plans to commission thermal power projects of over 8,500 MW capacity which are expected to be commissioned between FY22-28 in Odisha, Madhya Pradesh, Jharkhand, Uttar Pradesh, and Tamil Nadu. The company also plans to invest Rs 38,000 crore in clean coal technologies. It is expected that CIL may float tender for 4 coal gasification projects in May this year. Along with coal gasification, the company intends to float tender for 3 coal bed methane projects and 3 coal washeries in the first quarter of FY22.
India proposes single spot coal auction for all consumers; CIL to export
The government proposes to allow Coal India Ltd to export surplus coal for the first time since its inception while clubbing all spot auctions held by the stateowned miner for various consumers for trading on one exchange. The state-run miner is likely to set up a special e-auction window for export of coal which cannot be sold in India. The coal ministry has also proposed a single auction trading platform for all coal consumers of Coal India. A senior government official said coal prices to power and non-power Coal India consumers who hold long term linkages will remain unchanged. “After meeting requirement of linkages of power and non-power consumers, Coal India should be allowed to sell coal on a transparent basis. Coal trading platform as a single e-auction window would enable removal of market distortions leading to one nation, one price for one grade,” an official said. The government has auctioned 19 coal blocks in the first tranche of commercial coal auctions. Another 75 mines with reserves of over 38,000 million tonnes are proposed to be offered in the current tranche of the auctions.
CIL to monitor rake movements to enhance supplies through rail mode
PSU miner Coal India (CIL) would shortly start monitoring the movements of coal loaded rakes through the Indian Railway’s Freight Operation Information System (FIOS). This would help the miner rationalise its entire coal supply matrix by obtained information of a rake’s turnaround time which down the line would enable the company push more coal via the rail mode. CIL has signed an MOU with the Centre for Railway
Information System (CRIS) to get faster and customised automated access to the FIOS data, providing CIL the details of loading, weighment and unloading along with the turnaround time of rakes. The freight operation information between the networks of CIL and CRIS would help minimise the instances of underloading and overloading while also facilitating faster billing and bill monitoring process replacing the manual entry of railway receipts with instantaneous online transfer. The pact with CRIS assumes greater significance since CIL is pushing for increased rail evacuation to gradually reduce the road movement of the dry fuel. “The real time data helps us in better planning” said a senior executive of the company. CIL’s coal movement through rail mode from its own sidings, goods sheds and private washeries was 302.51 million tonne (MT) up to February 20 this fiscal. This accounted for 61% of the total offtake quantity.
Coal India, EESL sign MoU to reduce carbon footprint
Coal India announced on February 4, 2021 that it has signed a Memorandum of Understanding (MoU) with Energy Efficiency Services Ltd (EESL) to reduce its carbon footprint and improve its overall operational efficiency and profitability. Under the agreement, the two companies will collaborate in the area of energy efficiency and resource conservation for de-carbonisation of state-owned Coal India. The Energy Efficiency Services will help Coal India with energy efficiency in processes along with decentralised captive solar plants. It will also help to improve the operational efficiencies of CIL's subsidiaries and reduce significant costs, without any upfront investment. The EESL will also help CIL conduct energy audits and undertake assignments to minimise losses on account of energy through the financial energy service company (ESCO)/renewable energy service companies (RESCO) model. Under the ESCO/RESCO model, the entire project cost will be borne by EESL against the proposed energy savings project and the payment to EESL shall be monetised through energy savings.
EOGEPL & IIT Dhanbad join hands for advanced research on CBM
With the CBM gas widely seen as green fuel of the century, both Essar and the IIT Indian School of Mines (ISM) will explore research and develop a plethora of technologies like microbial enhanced recovery, advance reservoir simulation, CBM exploitation technology from deeper coal seams and others. They will also jointly work towards finding an effective solution for various technological and operational challenges faced during CBM exploration and production. As part of the MoU, EOGEPL would propose an initial list of research topics and provide data for the same to the industry experts and researchers of IIT Dhanbad while also giving them access to its CBM wells in Ranigunj for carrying out an investigation, research experiments. Essar and the IIT ISM would jointly pursue collaborative research as well. EOGEPL’s Raniganj East CBM Block in West Bengal has already created a niche gas customer base who continue to depend on the supply of CBM gas to sustain their businesses. The block, connected with the Pradhan MantriUrja Ganga pipeline of GAIL has already invested over Rs 4,000 crore towards drilling wells, setting up supply infrastructure and laying customer pipelines to Durgapur and nearby industrial areas.
RAILWAYS
Indian Railways registers highest ever freight loading in January 2021; details here
Indian Railways creates new record in freight loading. The highest ever freight loading figures have been registered by Indian Railways i.e. 119.79 million tonnes (MT) in the month of January 2021. The last best freight loading figure of 119.74 MT was recorded in March 2019. According to the Railway Ministry, on mission mode, the freight loading figures of Indian Railways for the last few months have crossed the loading as well as earnings for the same period of last year. As per the statistics provided by the Railway Ministry for February 2021 (so far), the freight loading of Indian Railways was 30.54 million tonnes which include 4.15 million tonnes of iron ore, 13.61 million tonnes of coal, 1.03 million tonnes of fertilizers, 1.04 million tonnes of foodgrains, 0.96 million tonnes of mineral oil as well as 1.97 million tonnes of cement (excluding clinker). According to the Railway Ministry, several concessions or discounts are also being given in Indian Railways in order to make the movement of freight at-
tractive. Moreover, in a bid to attract new business as well as incentivize other existing clients, the Railway Ministry has conducted meetings with the top leadership of power, automobiles, iron and steel, cement, coal, and logistics service providers. Also, Business Development Units (BDUs) at Divisional and Zonal levels, as well as near doubling of freight speed, are contributing to sustainable growth momentum, the ministry added.
STEEL
Govt eases steel usage curb for highway construction; allows using steel produced by secondary steelmakers
For the construction of highways, the Modi government has allowed the usage of steel produced by secondary steel makers. Earlier, in highway construction, road developers were required to use steel produced by the primary steel producers only. The decision has been taken in the wake of rising prices of steel supplied by primary steelmakers. The minister’s concerns were partly addressed in the Union Budget for 2021-22, in which import of steel was made easier by lowering customs duty on a range of items and granting duty exemption on import of steel scrap, utilized by secondary steelmakers. As per India Ratings, domestic hot rolled coil (HRC) prices (Mumbai 2.5 mm-8 mm) inched up 45 per cent year-on-year and 3 per cent month-onmonth to Rs 57,000 per tonne in mid-January 2021. In 2019-20, 103 million tonne of finished steel was produced by India, out of which around 45 per cent was manufactured by the secondary steel producers.
Need to increase logistics arrangement for steel sector: ISA
There is an urgent need to increase and improve the logistics arrangement for the domestic steel sector, industry body Indian Steel Association (ISA) on Thursday said. Managing logistics requirements is still challenging and costly for many steel makers in India, ISA Secretary-General Bhaskar Chatterjee said in the Indian Steel Markets Conference 2021 organised by mjunction. Noting that the steel production and consumption of the metal are expected to grow on the back of government initiatives, the transportation of raw materials to steel mills and finished steel to demand centres is an area to be looked at, he said in his address. "The freight cost from Jamshedpur to Mumbai can be as high as USD 50 per tonne in comparison to USD 34 per tonne from Rotterdam to Mumbai." In India, Chatterjee said that for every 1 tonne of steel produced, roughly 3 tonnes of raw material needs to be transported. “So, even as India doubles its steel production in the next 10 years, the logistic requirement of the domestic steel industry will become virtually unmanageable unless steps are taken to improve the physical infrastructure especially by the Indian Railways,” he said. The government has set a target to increase India's total installed steel capacity to 300 million tonne by 2030.
India becomes net importer of steel in January
During January 2021, export was lower by 24.6% while import increased by 22.0% over January 2020. Month-on-month, export decreased by 15.23% and import increased by 13.66% as compared to December 2020. India became a net importer of steel for the first time in the current fiscal in January, bucking the trend of the first nine months. The net trade deficit, however, was marginal at 0.06 MT. “India was net exporter of finished steel during AprilJanuary 2020-21 with net trade surplus of 5.0 MT. However, the progressive unlocking of the economy and improving economic activities leading to better domestic demand have resulted in decline/moderation in export and increase in imports in recent months with import exceeding export for the first time during this fiscal in January 2021,” the steel ministry said in a note. During the current fiscal till January, export of finished steel from India was at 8.84 MT, up by 22.5%, while import at 3.79 MT have declined by 36.7% over the corresponding period last year (CPLY). During January 2021, export was lower by 24.6% while import increased by 22.0% over January 2020. Month-on-month, export decreased by 15.23% and import increased by 13.66% as compared to December 2020.
Govt eases curbs on steel for highway construction to reduce cost
Doing away with restrictive conditions for use of steel in highways construction, the government on Sunday announced that all kinds of steel will be allowed for highways provided these meet the quality parameters. Earlier, the contract provisions required use of steel produced by primary/integrated steel producers only. The move is aimed at ensuring cost reduction in highways construction using steel. "The Ministry of Road Transport and Highways has issued orders that all steel whether produced from ore, billets, pellets or melting of scrap - would be allowed to be used for National Highway construction, as long as it meets the standards required for specific grades of steel," the Ministry said in a statement.
Govt reduces customs duty on certain steel items to provide relief to MSMEs
The government on Monday announced slashing of import duties on a number of steel items in order to provide relief to MSMEs which have been hit hard by high cost of raw materials. Finance Minister NirmalaSitharaman in her Budget speech for 2021-22 said the anti-dumping duty (ADD) and countervailing duty (CVD) have also been revoked on certain steel products."MSMEs and other user industries have been severely hit by a recent sharp rise in iron and steel prices. Therefore, we are reducing customs duty uniformly to 7.5 per cent on semis, flat, and long products of non-alloy, alloy, and stainless steels.The minister also announced increasing duty on steel screws and plastic builder wares from 10 per cent to 15 per cent.
CEMENT
Resuming cement capex plans is good, but pricing concerns remain
Cement manufacturers have resumed their organic growth plans. Thanks to the recovery in rural and infrastructure demand, companies are reviving their earlier announced expansion plans and committing fresh infusions. For instance, UltraTech Cement Ltd, which has a pan-India presence, announced 12.8 of new capacity expansion in the central and eastern regions. ACC Ltd expects its central India expansion to be commissioned in 2022. The Ambuja Cement Ltd management said its Marwar-Mundwa expansion is likely to be commissioned in mid-2021. Shree Cement Ltd expects its grinding units in Cuttack and Pune to go on stream this quarter. Regional cement makers such as JK Cement Ltd, Orient Cement Ltd, JK Lakshmi Cement Ltd and The Ramco Cements Ltd have also announced capacity expansions. “India’s cement companies (14 listed; 67% of overall capacity share) reported consolidated volume growth of 8.6% year-on-year in Q3FY21. Growth expectations have been upgraded significantly on robust recovery in demand. We expect the cement demand to grow by 20-22% cumulatively over FY21-23E,” JM Financial Institutional Securities Ltd said in report. However, muted prices amid rising cost pressure remain a concern. While cement makers are yet to pass on the burden of rising cost pressures to partially offset the impact of cost inflation, they have reduced dealer discounts.
Cement stocks in demand; Dalmia Bharat, JK Cement, Ramco Cement at new high
Shares of cement companies were in demand
on Friday with Dalmia Bharat, JK Cement, and Ramco Cement hitting their respective new highs, while Ambuja Cements, Birla Corporation and Prism Johnson touched their respective 52-week highs on the BSE in intra-day trade. The stocks climbed up to 7 per cent, as compared to 0.18 per cent rise in the S&P BSE Sensex, at 51,625 points, at 10:32 am. The government’s thrust on infrastructure spending and affordable housing bodes well for cement demand. Analysts expect cement demand to remain flat in FY21, but grow 11 per cent year on year in FY22 – on the back of government spending on infrastructure and affordable housing. We prefer companies that are moving down the cost curve, have the potential to gain market share, and provide valuation comfort, MotilalOswal Securities said in Union Budget 2021-22 update. Among the individual stocks, Dalmia Bharat surged 7 per cent to Rs 1,500, also its new high on the BSE. In the past one week, it has rallied 21 per cent after recording strong volume growth of 14 per cent in the December quarter (Q3FY21). Earnings before interest, taxes, depreciation, and amortization (EBITDA) grew 51 per cent year on year (YoY) at Rs 691 crore, EBITDA/T increased of 32 per cent YoY and capacity utilization of 81 per cent.
