CCAI Monthly Newsletter- Jan-21 issue

January 2021 Price: 40/W H E R E S E R V I C E A N D D E D I C AT I O N J O I N H A N D S

Vol. XLIX No. 10

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From the Editor’s Desk

As the ripples of one of the dea dliest pandemic in human hist ory slowly subsides and life sweeps back to norma lcy, India’s economy is prepar ing for a turnaround and coal, the most readily ava ilable mineral in the country, may play a pivotal role in that attempt. Home Min ister Amit Shah has opined tha t the coal sector will play a very important role in fulfilling the dream of ‘Atm anir bhar Bharat’ and achieving the target of USD five trillion economy by 202 2.

By launching a single window clearance system for the coa l sector in 2020, centre has already made gian t strides to ensure that com mer cial coal mining auctions can facilitate small and medium industries to rece ive coal supplies easily. The Government is con sidering opening up coal ma rke ting whi ch would eventually loosen up all the kno ts, which have tied up coal link age s, PPAs, FSAs and bidding. Opening up of the coal sector will also ensure the buyers that they will be able to get the produc t, if they want it, without hav ing to go through multiple processes.

In a bid to mineral output of the country and reducin g imports also plans to provide incentive to min eral block allocatees for ear ly commencement of production from the auction ed mines through amendmen t of the mining rules.

India’s national miner Coal Ind ia Limited, which performed a mammoth task of ensuring uninterrupted sup ply of coal across the countr y even during the corona-induced lockdown, has recently signed a pact wit h the Centre for Railway Information System s (CRIS) for monitoring the movement of rakes laden with fossil fuel and coal despatch activity throug h through Freight Operations Information System (FOIS).

The coal behemoth’s expenditur e climbed down while the com pany clocked 6.3% output growth, 9.1% surge in coal off-take and 17.3% incr ease in overburden removal (OBR) during the thir d quarter ended December 202 0.

Meanwhile, affected by the dearth of construction acti vities during the nationwide lockdown, India’s steel production fell by more tha n 10 percent in 2020 to 99.6 MT in 2020 from 111.4 MT a year earlier .

Ind ia’s share in the global output shrunk to 5.3% in 2020 from a year ago. To bolster the domestic industry, government has am ended the policy that provide s preferences to domestically-manufactured iron & steel products (DMI&S P) over imports in government procurement, wid ening its applicability to ever y pro ject where the procurement value of iron and steel is above Rs 5 lakh, aga inst Rs 25 crore earlier.

However, buoyed by increase d rural demand, including affo rdable housing, and recovery in the infrastructure segment, Cement demand is exp ected to increase by up to 20 per cent in the next fiscal year.

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Content Vol. XLIX No. 10 January 2021

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

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Consumers' Page

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Power

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Domestic

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Global

Editor : Subhasri Nandi 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.

26 Monthly Summary Of

Imported Coal &Petcoke

28 Overall Domestic Coal Scenario 29

Production And Offtake Performance Of Cil And Subsidiary Companies

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CONSUMERS’ PAGE Present Coal Scenario: In January 2021, total coal production achieved by Coal India Limited was 60.50 million tonnes. The figures have slumped by 4.1% compared to 63.10 million tonnes lifted during January 2020. For the period spanning from April 2020 to January 2021, the national miner has produced 453.30 million tonnes, registering a growth of 0.4% over 451.50 million tonnes produced in the same period last year despite the onslaught of pandemic.

Coal India’s total offtake for January stood at 53.30 million tonnes. The offtake was reduced by 4.6% compared to January 2021 figure of 55.90 MT. Total offtake for the period of April 2020 to January 2021 has been 467.90 MT. The coal Offtake by CIL has increased by 2.2% compared to the same period last year.

Submissions made by both Power and NRS consumers: 1. Request for amendment in over loading & under loading clause of FSA and e-Auctions: The responsibility of coal loading in rakes is with the Subsidiaries Coal Companies and the consumers do not have any control over quantity of coal being load-

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ed in the rakes. However, various additional charges are levied on consumers from both Power and Nonpower sector by the Indian Railways due to over loading of rakes i.e. punitive charges for load adjustment/ detention, engine haulage charges etc. In case of under-loading, the full amount is not refunded, because according to FSA provision, coal companies give under loading charges limited to the difference of CC / stencil capacity and actual weight of coal loaded in the wagon. But the Railway charges freight as per permissible carrying capacity (PCC ) / chargeable

weight and in most cases PCC / chargeable weight is more than the stencil carrying capacity.

Request has been made to CIL for amendment of the above-mentioned clause so that the sellers bear the penalty on overloading charges and consumers pay only the cost of excess coal quantity over the chargeable weight supplied by the Subsidiaries.

2. Submission regarding issue of ungraded coal supplied to Power and NRS consumers: *Power sector have stated that in spite of the provision in their FSAs, refunds for supply of ungraded coal are still pending from different Subsidiaries even after two years or more in some cases.

Request has been made to CIL by the Power sector so that the pending refunds on account of ungraded coal may be processed at the earliest. In case of Formulation of a new policy in this regard, it may be expedited as the fund is stuck for a long time. *The NRS consumers are unable to get long pending refunds through credit notes even when the quality of coal supplied is lower than the G-17 grade because unlike the Power sector there is no provision for issuing credit notes in case of supply of ungraded coal in the FSAs for NRS consumers.

Request has been made to CIL to expedite the formulation of a suitable policy in line with the Power sector so that the NRS consumers can get their requisite refund in case of supply of ungraded coal.

Submission by Power Sector consumers: 3. Submission regarding supply of poor quality of coal from ECL: Coal supplied to power sector consumers from various ECL sidings including JHANJRA, MADHAIPUR, MANDERBANI, BEGUNIA, DABOR, MOHONPUR, BANKOLA, SHYAMSUNDARPUR during the first six months of FY2020-21 has been 2-7 grades down

from the billed grade resulting in a huge financial burden for the generators and causing power tariff to go up.

Requests have been made to ECL and CIL to immediately ensure supply of billed grade of coal to the power sector to ensure smooth operation of plants.

4. Submission by Power sector for immediate processing of long pending refund for grade slippage by WCL: Certain power sector consumers have raised repeated concerns over significant grade slippage from various sidings of the coal company and stated that large amount of refund amounting to crores of rupees is pending with the coal company in this regard for many months.

Request has been made to WCL for immediate processing of these refund amounts to the power sector at the earliest possible.

5. Representation regarding regular short-receipt of coal from various sidings of ECL and SECL: A number of power plants are suffering due to short receipt of coal as high as 3.4% to 4.2% in most of the rakes dispatched from SECL’s Dipka, Kusmunda and Gevra sidings. Power sector consumers procuring coal from ECL's Salanpur area and POCP-I siding in Jhanjra area, are also facing regular short receipt in rakes in the range of 1.5%- 5.6% in recent months.

Request has been made to CIL and concerned subsidiaries to ensure proper loading of coal in rakes by the Subsidiary coal companies so that the power plants do not suffer due to shortage in coal supply

6. Submission regarding refund of Advalorem taxes alongwith coal value in case of grade Slippage: The Subsidiary coal companies of CIL are refunding

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the difference in base price of coal alongwith differential GST amount to their customers in case of grade slippage. However, Power Sector consumers have pointed out that Ad-valorem taxes paid by them alongwith advance coal value such as Royalty, DMF, NMET are not included in the credit notes.

Request has been made to the Ministry of coal and CIL so that Royalty and Ad-valorem taxes are included during issuance of credit notes by the coal companies in case of grade slippage.

7. Request by consumers for aligning FSA underloading (Idle Freight) calculation with Railway Receipt: Railways charge freight as per permissible carrying capacity (PCC)/chargeable weight of the wagons.

However, as per FSA, Subsidiaries compute the underloading quantity based on stenciled carrying capacity and processes the refund accordingly. This difference in methodology for assessing the underloading of rakes often leads to huge financial loss for the consumers of when the permissible carrying capacity of a rake is more than the actual carrying capacity.

Request has been made to CIL to take necessary steps so that FSA underloading (Idle Freight) calculation can be aligned with Railway Receipt and make reimbursement on account of underloading accordingly.

8. Erratic Referee sample analysis results of coal supplied by ECL to Power sector consumers: Power sector consumers procuring coal from Eastern Coalfields Limited (ECL) have repeatedly pointed out that the Referee analysis results of sample for coal supplied by the coal company are often not in consonance with the quality of coal received at the Generating Station as indicated by the 3rd party analysis conducted by CSIR-CIMFR. Request has been made to CIMFER, CIL and ECL to ensure proper storage of referee samples and the abnormal variation in result of referee samples with the

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concerned laboratory appropriately.

Submission by Non-Power sector consumers: 9. Submission by NRS consumers regarding regular short receipt of coal and overloading from ECL: Certain NRS consumers procuring coal from ECL have stated that they are facing short-receipt as well as the issue of overloading in some rakes dispatched from the same siding (POCP-I). As a result, these consumers are suffering due to loss of quantity amounting to substantial coal value and are compelled to pay hefty punitive charges on account of overloading.

Request has been made to ECL to eradicate the issue of shortage in supply of coal to the NRS consumers.

Also, overloading from the sidings of ECL needs to be looked into.

10. Submission to WCL regarding pending refund of excess payment against coal value and Differential CST amount: For certain NRS consumers, Excess payment made towards WCL as coal value is pending since many months. Also, the refund of differential CST amount by the coal company is pending even after the consumers have submitted the ‘C form’.

Request has been made to WCL for immediate processing of the long-pending refunds considering the abject financial condition of the NRS consumers.

CCAI CCAI CCAI Monthly Monthly Monthly Newsletter Newsletter Newsletter September November January 2020 2019 2021

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POWER Higher allocation needed for power distribution infra in Budget 2021: Experts The Centre needs to come up with higher budgetary allocation for power distribution infrastructure in the upcoming Union Budget, sector stakeholders and experts said.

ICRA has recommended higher budgetary allocation to strengthen the power distribution infrastructure and improve the financial viability of the distribution segment, including the implementation of amendments to the Electricity Act. The government should take measures to augment fund availability and ease land acquisition challenges with a view to achieve the renewable capacity targets, it said.

Further, the ratings agency has also suggested support measures to promote investments in the roof-top solar segment.

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Sector experts have also sought long-term policy measures to promote domestic module manufacturing.

Recommendations have also been made to promote investments in transmission infrastructure for harnessing power from renewable projects.

India moved from power deficit to surplus under Modi govt: Union minister Union minister R K Singh said India has become power surplus under the leadership of Prime Minister NarendraModi over the past six years and is also witnessing the highest growth rate in renewable energy in the world.

"There is no power deficiency in the country. We have a maximum demand of 1.85 lakh MW of electricity but the present availability is 3.74 lakh

MW," Singh said at a function here.

The Union minister of state for power was speaking after signing of memorandum of understanding (MoU) between J&K government and NHPC for implementation of Rs 34,000 core 850 MW Ratle HEP and 930 MW Kirthai-II HEP and execution of Sawalkot HEP (1856MW), Uri-I (Stage-II-240 MW) and Dulhasti (Stage-II-258 MW) power projects here.

"Earlier, our country was deficient in power but after the Modi government took over in 2014, we have doubled the power generation to make the country a surplus in power generation," he said.

He said there is more investment from the private sector rather than the public sector in the generation of electricity.

Govt to focus on loss-making discoms for next 3-4 yrs to achieve '24X 7 powers for all': Official The government's spotlight will be on electricity distribution utilities or discoms, which are mostly state-run and cash-strapped due to losses, to achieve the goal of 24X7 power for all, a senior official said.

There is stress in the power sector due to the inability of discoms to make timely payments for supply of power by gencos (power generating firms), which affects the entire value chain.

Participating in a webinar organised by the Institute of Directors, Ashish Upadhyaya, additional secretary in the Ministry of Power, said the major focus of the central government will be on the distribution sector for the next three-four years.

India’s Power Demand Breaks Record at 185.82 GW on Jan 21: Sahai The all India power demand on Jan 21 reached an all-time high of 185.82 GW beating the previous high from December 30, 2020, at 182.89 GW. The all India power demand on Jan 21, 2021, reached an all-time high of 185.82 GW beating the proviso demand records that were set on December 30, 2020, at 182.89 GW, according to SanjivSahai, Secretary at the Ministry of Power.

In a tweet making the announcement, the secretary stated that “Power demand continues to surge. Yet another record – all India demand: 185.82 GW ie 185, 822 MW at 09:35hrs ie 20/01/21. It has crossed previous all India demand of 182.89 GW ie 182, 888 MW on December 30, 2020.”

According to data provided by the Ministry of Power, the peak power demand met (the highest supply in a day) during January last year stood at 170.97 GW. Which many believe that the rising power demand shows perk up in economic activities leading to higher commercial and industrial demand which was affected due to the coronavirus pandemic.

The power demand recovered from September 2020 onwards. Peak power demand met grew at 1.7 percent in September, 3.4 percent in October, 3.5 percent in November and then 7.3 percent in December.

Madhya Pradesh sets up maximum solar pumps under government scheme: Minister

Talking about the continuous losses of discoms, he said there is a gap between the actual rate of supply of power and the cost recovered from consumers.

Madhya Pradesh has set up largest number of solar pumps in the country under the Pradhan MantriGaribKalyanRojgarAbhiyan, state New and Renewable Energy Minister Hardeep Singh Dang said.

According to power ministry data, discoms' total outstanding dues stood at over Rs 1.42 lakh crore as of November 2020.

The scheme was launched by the central government last year for providing employment to migrant labourers who came back to their naCCAI Monthly Newsletter January 2021

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tive places during COVID-19 lockdown, he said.

"A total of 3,224 solar pumps were set up against the target of 3,490 in 24 districts of the state to achieve 92.4 per cent success under the scheme, which is maximum in the country," an official release quoting Dang said.

Power transmission projects attached to delayed generation plants are considered ‘deemed commissioned’ and are liable to compensation but the complexity in arrangement makes it difficult to claim any amount.

Under the scheme, migrant labourers in 116 districts of six states Madhya Pradesh, Rajasthan, Uttar Pradesh, Bihar, Odisha and Jharkhand were identified for providing them employment.

Consumers top priority of govt, asserts energy minister Shrikant Sharma

In MP, 24 districts were included in the scheme, under which setting up of solar pumps, construction of community toilets, anganwadis, wells, rural mandis, domestic animal sheds, panchayat buildings and tree plantation activities were taken up for providing jobs to migrant labourers, Dang said.

UP power minister Shrikant Sharma reiterated that consumers were on the top priority of the state government and the department should strive to take all possible steps in addressing their complaints.

Government asks CERC to relieve power plants delayed due to force majeure from transmission levy The government has invoked special powers to direct electricity regulator to make changes in regulations freeing power plants delayed due to justifiable reasons from paying penalties to associated transmission projects.

The penalties would now be borne equally by all beneficiary discoms of a generation project, as per the directions issued by the Union power ministry to the Central Electricity Regulatory Commission (CERC) under section 107 of the Electricity Act 2003.

While power generation and transmission companies welcomed the relief, distribution companies said the move asking them to pay for delay in generation projects came as a shock to them.

“Penalties for delay in COD (commissioning) of generating stations, or for delay in completing transmission system, or operationalising the LTA (long-term agreement) shall invite penalties to be paid to CTU (central transmission utility),” the central government directions to CERC to amend Sharing of Inter-State Transmission Charges and Losses Regulations, 2020 said.

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Addressing a seminar organised by NTPC power management institute, Sharma said that the distribution companies should try to get Know Your Customer (KYC) done of all power consumers and take their feedback.

He also maintained that an uninterrupted power was only possible with the help of consumers.

The minister said that managing directors of the distribution companies should ensure that consumers get electricity bills on time.

He reiterated that the discoms should ensure that consumers be provided downloadable bills so that no anomaly is reported. He also asked officials to ensure tripping free power supply in the National Capital Region (NCR) as well as other districts.

CESC decides to consolidate power distribution business Notably, CESC had called off its proposal on the demerger of its power generation and distribution business two years ago. The demerger proposal was withdrawn in November 2019. Total income of the company had increased by 3.2% at Rs 11,217 crore last fiscal, while net profit grew 9% at Rs 1,306 crore.

Power utility CESC, the flagship of RP-SanjivGoenka Group, has decided to consolidate its power distribution business, other than in its op-

erations in Kolkata and adjoining areas, under a wholly-owned subsidiary of the company.

Eminent Electricity Distribution, the whollyowned subsidiary of CESC, become a subsidiary of the company with effect from July 1, 2019. In a stock exchange filing, the power utility said its board has decided to “reorient and reorganize” the power distribution business of the company under Eminent Electricity Distribution, as its distribution arm and, over some time and subject to applicable laws, consolidate in Eminent all investments of the company in distribution business (other than in its operations in Kolkata and adjoining areas).

Notably, CESC had called off its proposal on the demerger of its power generation and distribution business two years ago. The demerger proposal was withdrawn in November 2019. Total income of the company had increased by 3.2% at Rs 11,217 crore last fiscal, while net profit grew 9% at Rs 1,306 crore.

India gets a new power central transmission utility India created a central power transmission utility, separating the business from state-run Power Grid Corp of India (PGCIL).

The Central Transmission Utility of India has been incorporated and a certificate of incorporation had been issued for the same, sources said.

Hiving off of electricity transmission system planning business from PGCIL had been a long pending demand of the industry for fair bidding of transmission lines.

The move will help PGCIL diversify to other businesses and comes just in time when the government has kicked off a power distribution programme starting with the union territories.

The government had in June last year directed Power Grid NSE -0.37 % Corp to immediately set up Central Transmission utility (CTU) as a 100% subsidiary with separate accounting and board structure which would identify and plan transmission network in the country.

Private power transmission companies have alleged that PGCIL purposefully mismanages transmission planning so that the lines get delayed and are given to the state –run firm on nomination basis. On the other hand, PGCIL has been saying the transmission planning process is collaborative and transparent and there is a well-established procedure of planning of transmission system, under which transmission planning is carried out by the Central Electricity Act (CEA) in association with CTU, POSOCO and other stakeholders.

India needs to add massive amount of solar and wind power capacity this year to meet its first target The government of India has set a massive target of achieving 175 GW in renewable energy capacity by 2022. Prime Minister Narendra Modi has further increased the target to 450 GW renewable energy capacities by 2030.

With just one year to go to meet the first target, India’s renewable industry will have all eyes on Finance Minister Nirmala Sitharaman on February 1, as she presents the Union Budget with the hope of measures that will help the country achieve the target.

According to a report by the International Energy Agency, India is expected to be the largest contributor to the renewables upswing in 2021, with the country’s annual additions almost doubling from 2020. “A large number of auctioned wind and solar PV projects are expected to become operational following delays due not only to Covid-19 but also to contract negotiations and land acquisition challenges,” said the report.

To boost the adoption of solar energy across the country, the industry expects the government to withdraw the restrictions on net metering. Net metering is basically a system where credit is offered to residential and businesses, which are creating excess electricity with their solar panels and sending it back to the grid. The Indian government has proposed that there will CCAI Monthly Newsletter January 2021

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be a withdrawal of Net Metering over 10 KW load for any consumer. This would further boost the rooftop solar installations, which currently stand at just 4.6GW.

New net metering rule will deter rooftop solar adoption, says NSEFI The net metering provision under the recently notified Electricity (Amendment) Rules, 2020 has left rooftop solar developers worried. The provision restricts net metering up to 10 kW capacity in India and mandate gross metering above 10 kW, which, when implemented, will have a drastic impact on the entire rooftop solar industry, say developers. Under net metering, electricity generated by the solar rooftop system is first utilized by the consumer to meet their internal/ captive requirements. Excess electricity, if any, is exported to the grid. Subsequently, when the consumer imports power from the grid, the exports are adjusted against the imports, lowering the electricity bill.

Under gross metering, consumers are required to sell the solar electricity generated to the Discom–at a tariff (feed-in tariff) which tends to be lower than the rate at which they buy electricity from the Discom. The difference in rates for the electricity supplied to the grid and electricity purchased from the Discoms puts the consumers at a disadvantage.

Developers’ body National Solar Energy Federation of India (NSEFI) says the new net metering restriction will prevent high-load industrial consumers from switching to solar and has sought the power ministry’s intervention to withdraw the restriction of 10kW capacity for net metering under the Rules 2020.

Gujarat shows the way in solar rooftop power generation Gujarat, the home state of Prime Minister Narendra Modi, is leading the country in solar rooftop energy generation (domestic) with more

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than 50,000 such plants coming up across the state, according to the Ministry of New and Renewable Energy (MNRE).

Gujarat is the only state that offers a silver lining in this otherwise gloomy scenario. The state recently introduced a new solar energy policy for 2021 that allows the domestic electricity consumers to commercially lease their rooftops for power generation purposes.

At the beginning of 2021, Gujarat introduced a new 5-year solar power policy, which allows the consumers to rent their premises or roofs to third parties for electricity generation. The decision is likely to encourage further the installations and use of renewable energy in Gujarat. Already, Gujarat ranks top in the list of states with most number of solar rooftop plants.

Gujarat is leading the renewable energy movement in India as of today, suggests the data.

The western state has more than 60% (63.68 percent) or 50,915 solar rooftop installations in the country. This account for about 177.67 MW power generation in the state each year. Similarly, Maharashtra and Tamil Nadu have higher installed capacities of about 40 MWs together. .

Government clears 8 hydropower projects on Indus in Ladakh The government has cleared eight hydropower projects of 144 MW on the Indus river and its tributaries in Ladakh, the highest so far, sources in the Jal Shakti Ministry said. At present, there are several small projects, with a collective capacity of 113 MW on Indus in Ladakh, and the new projects will have much more capacity than those constructed so far, a senior official added.

The official said the new projects have been cleared by the Central Water Commission as well as the Indus Commissioner after a separate Union Territory of Ladakh was announced last year.

These projects will come up in Kargil and Leh districts of Ladakh. Because of its topography, it is not feasible to construct big hydropower projects in the Ladakh region.

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DOMESTIC Auction of four coal mines launched by Coal Ministry The auction process of 4 coal mines (Chendipada & Chendipada-II, Kuraloi (A) North, and Seregarha) for the sale of coal was launched by the Nominated Authority, Ministry of Coal on December 09, 2020. This was the second attempt of the auction for these coal mines, for which the process was annulled in the first attempt due to a number of Technically Qualified Bidders being less than 2.

The Nominated Authority had initiated the second attempt of the auction with the same terms and conditions as in the first annulled attempt of the auction but with the highest Initial Offer of Technically Qualified Bidder received in the

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first annulled attempt of the auction as the Floor Price for the second attempt of auction.

The last date for submission of the technical bid was January 27, 2021. Technical Bids of bidders, comprising of online and offline bid documents, were opened on January 28, 2021, 12:00noon onwards at Ministry of Coal, ShastriBhawan, New Delhi, in the presence of the representative of bidders. Bidders were provided with the option of joining the meeting in-person or virtually. The online bids were decrypted and opened electronically and subsequently, sealed envelopes containing offline bid documents were also opened. One bid has been received for Kuraloi (A) north coal mine. No bids have been received for the other coal mines.

The bids will be evaluated by a multi-disciplinary

Technical Evaluation Committee and further actions shall be taken in accordance with provisions of the Tender Document, under the auction process.

Govt plans incentive for starting production early from auctioned mines The government plans to provide incentive to mineral block allocatees for early commencement of production from the auctioned mines, a move aimed at increasing mineral output of the country and reducing imports.

The mines ministry plans to do the same through amendment of the mining rules and has sought comments and suggestions from stakeholders on the same. "The Ministry of Mines has prepared the Mineral (Auction) Amendment Rules, 2021 seeking to amend Mineral (Auction) Rules, 2015.

As part of the pre-legislative consultation policy, the draft Amendment Rules is made available.

Comments / suggestions are invited from the general public, governments of states and union territories, mining industry, stakeholders, industry associations, and other persons and entities concerned, on the draft Amendment Rules," the mines ministry said in a notice. A high level committee (HLC) headed by Vice Chairman, NITI Aayog, on mines, minerals and coal sectors was constituted by the government to give recommendations for enhancing exploration and domestic production, reducing imports and achieving rapid growth in exports.

The panel in its report on the coal sector has recommended that the Ministry of Mines may also adopt the methodology for commercial auction as per the recommendation of the coal sector.

Govt planning to open up coal marketing to streamline process The Government is considering opening up coal marketing, Coal Secretary Anil Kumar Jain said, Currently, production by Coal India is allocated through a number of different methods, including multiple sector-based auctions and coal linkages based on recommendations by

the Union government, and Fuel Supply Agreements (FSAs).

India produced about 729 million tonnes of coal and imported about 248 million tonnes in the previous fiscal. Coal India accounts for over 80 per cent of domestic production. “It’s about time that coal marketing was opened up. All the knots, which have tied up coal linkages, PPAs, FSAs and bidding have to be opened up,” said the secretary, adding the freeing up of coal marketing would give an assurance to buyers that they will be able to get the product, if they want it, without having to go through multiple processes. The government, in June 2020, opened up coal mining for commercial use.

Coal sector to play vital role in achieving $5 trn economy: Amit Shah Union Home Minister Amit Shah said coal sector will play a very important role in achieving the target of USD five trillion economy by 2022, the year marking the completion of 75 years of the country's Independence.

Launching a single window clearance system for the coal sector, he said commercial coal mining auctions will now facilitate small and medium industries to receive coal supplies easily. The home minister said the coal sector has crossed an important milestone towards fulfilling the dream of 'Aatmanirbhar Bharat' (self reliant India) under the leadership of Prime Minister NarendraModi.The coal sector will play a very important role in achieving the target of USD five trillion economy by 2022, the year marking the completion of 75 years of Independence, he said at the event, also attended by Union Coal Minister Pralhad Joshi.

Shah said for a long time the need was felt to remove uncertainty in the coal sectorand bring in transparency, which has been fulfilled by the Modi government.

Current domestic coal production inadequate to meet country’s demand: Govt Currently, India is producing about 729 million CCAI Monthly Newsletter January 2021

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tonnes of dry fuel, the coal ministry said in a statement. "However, it is a fact that the domestic production is not able to meet the demand of coal in the country," the statement said.

The government said the current domestic production is unable to meet the country’s demand, even though the country is the world’s secondlargest producer of fossil fuel and the fifth-largest nation in terms of coal deposits. Currently, India is producing about 729 million tonnes of dry fuel, the coal ministry said in a statement.

“However, it is a fact that the domestic production is not able to meet the demand of coal in the country,” the statement said.

Last year, India imported 247 million tonnes (MT) of coal and spent Rs 1.58 lakh crore worth of foreign exchange. Commercial auction of coal mines along with transparent measures taken by the Centre has come at an opportune time to bridge the mismatch between demand and supply of coal in the country.

Thermal coal imports at major ports fall 16% to 55 MT in AprDec: Body Disruptions caused by the COVID-19 pandemic continued to impact cargo movement in India with thermal coal imports at 12 major ports declining 16.43 per cent year-on-year to 55.16 million tonnes in April-December 2020 period, according to ports' body IPA. Coking coal handling dropped by 12.13 per cent to 36.96 MT during the April-December period of the current fiscal.

Coal volumes at the 12 major ports declined for the ninth straight month in December 2020, as per the Indian Ports Association (IPA). These ports had handled 66 MT of thermal coal and 42 MT of coking coal in April-December period of the previous financial year. Thermal coal is the mainstay of India's energy programme as 70 per cent of power generation is dependent on the dry fuel while coking coal is used mainly for making steel. India is the third-largest producer of coal after China and the US. It has 299 billion tonnes of resources and 123 billion tonnes of proven reserves, which may last for over 100 years. In the wake of the pandemic, sharp declines were also witnessed in handling of containers, coal

18 | CCAI Monthly Newsletter January 2021

and POL (Petroleum, Oil and Lubricant), among other commodities.

STEEL

India’s steel production declines by more than 10% According to World Steel Association (WSA), crude steel production fell globally by 0.9% in 2020 to 1,864 million tonne (MT) over the previous year; but China bettered its production to 1,053 MT, up by 5.2% over 2019. China’s share of global crude steel production increased from 53.3% in 2019 to 56.5% in 2020. Russia’s production also improved by 2.6% to 70.4 MT. Toppling the US, Russia also managed to improve its ranking by one notch to the fourth position among world’s top five steel producing nations.

Russia’s production also improved by 2.6% to 70.4 MT. Toppling the US, Russia also managed to improve its ranking by one notch to the fourth position among world’s top five steel producing nations. Bucking the global trend, China and Russia produced more steel in 2020 than in 2019. Among the top five nations, production declined in India, Japan and the United States by up to 17.2%.

According to World Steel Association (WSA), crude steel production fell globally by 0.9% in 2020 to 1,864 million tonne (MT) over the previous year; but China bettered its production to 1,053 MT, up by 5.2% over 2019. China’s share of global crude steel production increased from 53.3% in 2019 to 56.5% in 2020.

Reducing impact of carbon emissions one of greatest challenges for steel industry: Addl. secy In India, steel players such as Tata Steel, JSW Steel, Jindal Steel and Power Ltd, AMNS India and state-owned entities Steel Authority of India Ltd and RashtriyaIspat Nigam Ltd use the blast furnace route to make steel.

The government said reducing the impact of

carbon emissions is “one of the greatest challenges” for the steel industry, and called for collaboration among stakeholders to address the issue.

Speaking at a webinar ‘By-Product Management for Indian Steel Industry’ organised by industry body FICCI, Steel Additional Secretary RasikaChaube said it is important to adopt technologies that can capture carbon from CO2 (carbon dioxide) and prevent it from entering the atmosphere. “I must mention that reducing the impact of carbon is one of the greatest challenges which is being faced by our industry. For the steel industry like ours where there is a dominance of blast furnaces, the only way to substantially reduce associated CO2 emissions is to transit towards carbon capture and storage (CCS) and carbon capture and utilisation (CCU),” she said. In India, steel players such as Tata Steel, JSW Steel, Jindal Steel and Power Ltd, AMNS India and state-owned entities Steel Authority of India Ltd and RashtriyaIspat Nigam Ltd use the blast furnace route to make steel.

Construction workers rue hike in steel, cement prices Over 26,000 construction workers have lost their livelihood in Vizianagaram and Srikakulam districts as the real estate sector came to a grinding halt with cement and steel prices touching an all-time high.

Steel, which was available at 45,000 per tonne, is now selling for over 60,000. A cement bag which cost 260 six months ago is now costing 350. Non-availability of sand and a hike in transport charges for carrying construction material have also turned into a bane for the construction industry in the north Andhra region.

Workers rued that they are unable to get jobs in irrigation projects and road works in the last one-and-a-half years. “The government’s direct cash benefits are not enough for us as the amount is sufficient only for one week. We used to earn around 350 per day. But we have been without any work for the last two months,” said M. Appalaraju, a worker from Ayyannapeta in Vizianagarammandal.

said that the construction industry was the lone source of income for many workers in Srikakulam district. “With no work in cities like Hyderabad, Vijayawada and Visakhapatnam, many workers have returned to their native places in Srikakulam district. They are also ineligible for welfare measures of the government as they have ID proofs and ration cards at other places.

The situation will take a turn for the worse if more workers return to Srikakulam where getting work is an uphill task,” he added.

Amended steel policy to focus on bolstering domestic industry The government has buttressed the policy that provides preference to domestically-manufactured iron & steel products (DMI&SP) over imports in government procurement, widening its applicability to every project where the procurement value of iron and steel is above Rs 5 lakh, against Rs 25 crore earlier.

Domestic steel has been defined as one which has been manufactured in India and having local content ranging from 20-50%. The government has buttressed the policy that provides preference to domestically-manufactured iron & steel products (DMI&SP) over imports in government procurement, widening its applicability to every project where the procurement value of iron and steel is above Rs 5 lakh, against Rs 25 crore earlier. The steel ministry also said in a gazette notification that buyers must ensure that procurement is not split for the purpose of avoiding the provisions of this policy.

Apart from promoting the use of domesticallymanufactured steel in government projects, the amendment will also encourage local manufacturing further. Launched in 2017, the DMI&SP policy has till December led to import substitution of more than Rs 21,000 crore worth of steel, which implies that more and more domestic steel is being used in government procurement.

Domestic steel has been defined as one which has been manufactured in India and having local content ranging from 20-50%.

CITU State general secretary D. Govinda Rao CCAI Monthly Newsletter January 2021

| 19

Dharmendra Pradhan urges coal and mines minister to expedite capacity expansion of smelter plant Union petroleum and steel minister Dharmendra Pradhan urged his colleague Prahlad Joshi, who holds the portfolio of coal, mines and parliamentary affairs, to expedite capacity expansion of Nalco's Aluminium smelter plant at Angul in Odisha. Pradhan, in his letter, requested Joshi to take necessary steps for increasing Nalco smelter plant's capacity to 1 MTPA from existing 0.46 MTPA. The National Aluminium Company NSE -1.49 % is undertaking a brownfield expansion project for their aluminium smelter plant at Angul, which include construction of a 1400 MW feeder Captive Power Plant (CPP).

The cost of this project, which is presently at the land acquisition stage, is estimated to be around Rs 22,000 crore, Pradhan said in the letter. This apart, he said aluminium smelting is a highly power-intensive process and the feasibility of this brownfield expansion project is heavily dependent on a steady supply of affordable coal to the 1400 MW feeder CPP for uninterrupted generation of power.

RAILWAYS

Indian Railways line up Rs 40,000-crore spend on rolling stock in FY22 Indian Railways (IR) will target to manufacture 8000 locomotives, coaches and wagons in FY22, up from likely 5,000 in FY21 at a cost of Rs 40,000 crore. The transporter had manufactured 7,000 locomotives, wagons and coaches in FY20, but the pandemic slowed the production at its coach factories in the current financial year.

Piyush Goyal, minister of commerce & industry and railways, sought industry collaboration and investment in transforming Railways into a smart organisation. “I want Railways to be a

20 | CCAI Monthly Newsletter January 2021

modern, agile, safe, reliable part of the economy and make technology the overarching support system for logistics and transport in both passenger and freight business,” Goyal said, addressing the ‘Smart Railway Conclave’ organised by FICCI. Highlighting the opportunities for partnering with the Government, Goyal pointed out a wide range of smart solutions from industry which have helped the national transporter to complete and clear a backlog of 200 infrastructure projects held up for years.

CEMENT Cement demand expected to rise by up to 20% in fiscal 2022: Icra Cement demand is expected to increase by up to 20 per cent in the next fiscal year with volume touching FY19-FY20 levels, rating agency ICRA said. The growth would be supported by rural demand, including affordable housing, and recovery in infrastructure segment.

"ICRA expects cement demand to increase by 18-20 per cent in FY2022 over FY2021 with the volumes reaching back to around FY2019FY2020 levels," the rating agency said in a statement. The volume growth is also likely to support operating margins in FY22 at around 20 to 21 per cent, notwithstanding some cost-side pressures, it added. Capacity additions are expected to get back to around 20-22 MTPA (million tonnes per annum) in FY2022 from around 15-17 MTPA in FY2021, it said. The eastern region is likely to lead the expansion by adding around 15-17 MTPA capacity during the said period.

"With the revival in demand in FY2022 by around 20 per cent, the utilisation is likely to improve to around 64 per cent during the fiscal from the low levels of 56 per cent in the previous year...," it said.

On input costs, it said, while coal prices continue to remain soft, pet coke prices have increased in the recent months.

GLOBAL Germany needs to double its renewable energy output –grids Germany may need to double its renewable energy capacity by 2035 as Europe's biggest economy goes electric in heating, transport and other sectors, grid operators said.

Presenting their capacity planning through to 2035, the four high voltage transmission grid firms (TSOs) said that Germany will need to have renewable power capacity of between 233 and 261 gigawatts (GW) by 2035, compared with just under 130 GW recently forecast for end-2021.

"The rising share of renewable energies in power production is the central driver of network development," they said, adding that all the scenarios they had discussed assumed increasing power

22 | CCAI Monthly Newsletter January 2021

demand and Germany becoming a net importer.

Germany needs to meet a target of renewable energy contributing at least 65 per cent of power output in 2030 as part of the country's overall goal to cut CO2 emissions by at least 55 per cent compared with 1990 levels.

Green power could provide between 70 per cent an 74 per cent of the total by 2035, led by more wind power generation especially from offshore parks, the TSOs said.

Photovoltaic capacity would also increase strongly.

Meanwhile, German is planning to close its nuclear plants by 2022 and coal power stations by 2038 in its decarbonisation drive, which will require grid extensions to connect the industrial south with more wind power farms in the north.

Richards Bay Coal Terminal sees coal exports decline in 2020 for third straight year South Africa’s Richards Bay Coal Terminal exported 70.2 million mt of coal in 2020, down 2 million mt on the year, a third straight year of declines, the terminal announced Jan. 28.

Despite the decline in volume, which could somewhat be excused owing to the significant drop in seaborne demand following the coronavirus pandemic in 2020, the terminal – which handles roughly 95% of all South African coal exports – said it would keep its export target for 2021 at 77 million mt, 500,000 mt higher than the record set in 2017.

The reasoning behind this optimism could likely be the strong demand for South African coal exhibited by Asian Markets.

Asia accounted for the vast majority of exports from the terminal last year, at around 92%. In Asia, India is by some margin the largest single market for South African coal, taking roughly half of all exports, while Pakistan is also a major export destination for South African coal.

While these two key markets will likely remain the biggest buyers of coal leaving the terminal in 2021, the terminal did make not of a more recent development where coal leaving the terminal had been sold to China. .

Japan’s coking coal imports rise in December Japan's coking coal imports rose in December to an eight-month high on increased shipments from Indonesia, underpinned by the strong recovery of Japan's steel industry.

Japan imported 5.63mn t of coking coal in December, up by 1pc from November but down by 10pc from a year earlier, according to finance ministry data. January-December imports fell by 9pc from a year earlier to 63.3mn t.

Shipments from the largest supplier Australia fell by 5pc to 2.84mn t in December from

3mn t last month but increased by 13pc from a year earlier. Arrivals from Indonesia surged to 1.64mn t in December, an increase of 71pc from the previous month and by 5pc from a year earlier, as Japanese steel producers sought to diversify their coking coal import sources to minimise risk exposure. December crude steel output also continued to increase as steel demand from the car industry recovered, despite continuing pressure from the country's Covid-19 emergency measures.

Japan's metallurgical coke imports hit an 18-month high of 119,412t in December, the largest monthly intake since July 2019 with 140,307t. The December imports were an increase of 261pc from the previous month and 255pc from a year earlier. Almost all of Japan's met coke imports came from China.

Trump’s promise to put coal miners back to work was a failure In 2016, Republican presidential candidate Donald Trump made a promise to coal miners at a rally in West Virginia. “For those miners, get ready because you’re going to be working your asses off,” he told them, wearing a white hard hat. “We’ll be winning, winning, winning.”

After four years of the Trump administration, coal has been losing, losing, losing. Not that Trump can take the blame (or the credit). Dismal economics have been inexorably displacing coal as the fuel of choice in the US and around the world. But, the data tell a different story. The number of people employed by the coal mining industry has fallen 15% since Trump took office in January 2017. Despite job losses that temporarily stabilized during his years in office, according to US Bureau of Labor Statistics Data, the trend is continuing.

Production has followed suit. Despite coal prices remaining stable around $35 per ton over the last decade, production fell during Trump’s years in office to just 706 million short tons, the lowest amount since 1978, according to the US Energy Information Administration.

Coal still generates 38% of global electricity, CCAI Monthly Newsletter January 2021

| 23

the largest share of any fuel. But that is falling in many countries as the price of solar, wind, and natural gas dips below coal, cutting into the industry’s profits. During the first half of 2020, global coal capacity fell for the first time since at least the 1950s, reports the nonprofit Global Energy Monitor.

Australia’s Whitehaven Coal sees recovery in prices, sales in 2021 Australia’s Whitehaven Coal forecast a rebound in coal prices and sales volume in 2021, as the miner posted a 29% jump in quarterly output boosted by a recovery in key Asian economies.

The company said the improved pricing environment reflects increased demand for thermal coal as economies recover from the pandemic’s hit and supply cuts.

“During the latter part of the December quarter there was a strong rebound in pricing and we are increasingly optimistic that underlying market dynamics are supportive of continued improvement in this area,” said Paul Flynn, chief executive officer. The company tightened its full-year managed coal sales forecast to a range of 19 mt to 20 mt from prior expectations of 18.5 mt to 20 mt and said it expects sales volumes in 2021 to return to pre-COVID-19 levels.

The country’s biggest independent coal miner’s managed saleable coal production for the December quarter was 3.9 million tonnes (mt), up from 3.1 mt a year ago.

Source: Reuters (Reporting by ShrutiSonal and Arundhati Dutta in Bengaluru; Editing by Amy Caren Daniel)

German hard coal imports set to continue steep decline in 2021 industry group Last year's sharp drop in Germany's hard coal imports is set to continue this year as the country has started to phase out the fossil fuel, the

24 | CCAI Monthly Newsletter January 2021

country's coal importer association VDKi has said. Imports will drop by 19 percent to around 27 million tonnes, the lobby group predicted.

Imports for power generation will even fall by 27 percent to 15.5 million tonnes, while imports for steelmaking will only show a minor decline, the group said.

Hard coal-fired power generation fell 26 percent in 2020 to a third of the 2015 volume. The association criticised the design of Germany's tenders for the withdrawal of coal generation capacity in the framework of its coal exit, because not the oldest power plants are taken offline first as a result but the youngest and most modern ones.

Last year, renewables produced more power than all fossil fuels combined in Germany for the first time. In combination with record-low energy consumption due to the coronavirus pandemic, higher CO and lower gas prices, plus a mild winter, this has led to a 10 percent decrease in emissions. According to the think tank Agora Energiewende. Germany has decided to exit coal by 2038 at the very latest. Following its first phase-out auction for hard coal, plants commissioned as recently as 2015 were taken off the grid at the end of the year, illustrating the difficult economic conditions faced by operators.

Indonesia to revise royalty rates on coal, gold in bid to boost revenue Indonesia plans to adjust its royalty payment policies on sales of gold and coal in an effort to boost state revenues as prices of the two commodities recover, an official said.

The world’s top exporter of thermal coal expects a recovery in prices and exports this year after scoring a $1.5-billion trade deal with China.

Home to the world’s biggest gold mine, Indonesia also ranks among the top producers of the precious metal, benefiting from a price rally last year.

chosen not to.

Turkish coal burn to remain firm in 1Q Turkish coal-fired power output is likely to remain firm in the first quarter as coal units have extended their price advantage against gasfired plants.

Output from the country's 8.9GW coal-fired fleet almost reached technical capacity at some points in 2020, with utilisation rates surpassing 90pc for extended periods, boosted by firm power demand and strong fundamentals for coal burn.

And power-sector coal demand is also likely to remain strong in the coming months amid rising costs for gas-fired plants. State-owned gas distribution company Botas has slightly increased its tariff for power utilities to 1,414 lira/'000m³ ($18.04/MWh) in January, from TL1,400/'000m³ in December, widening coal's cost advantage against gas.

This was the first increase in the monthly gas tariff since July 2019, and is in line with higher first-quarter import costs for Botas. The firm's import costs from Russia and Iran will fall by 32¢/MWh to $16.07/MWh and by 58¢/MWh to $15.45/MWh, respectively, but overall costs are set to increase because of a rise in prices for Azeri gas to $16.92/MWh, from $15.32/MWh in the fourth quarter, according to Argus calculations (see chart).

UK Government gives new coal mine the go ahead Secretary of State Robert Jenrick has given the go-ahead to a controversial new coal mine in Cumbria. The mine, which will be situated in Whitehaven, West Cumbria will remove coking coal from beneath the Irish Sea for the production of steel in Europe and the UK. Cumbria County Council approved the £165m mine in October, but the government could have called in plans for an inquiry, however, they have

In September 2020, Robert Jenrick rejected plans for an opencast coal mine at Druridge Bay in Northumberland, saving there is ‘limited objective evidence that the demand for coal for industrial purposes will remain at current levels beyond the very short term.’

Campaigners hoped that a similar decision would be made over the Cumbrian coal mine.

Friends of the Earth coal campaigner Tony Bosworth said: ‘Mr Jenrick’s refusal to ‘call-in’ this unnecessary and climate-wrecking coal mine shows jaw-dropping inconsistency.

UK government won’t block first deep coal mine in three decades Despite pressure from green groups, the UK Government has said it will not intervene in a county council’s decision to approve a deep coal mine – the first facility of its kind to gain planning approval in 30 years, reports EURACTIV’s media partner, edie.net.Cumbria County Council approved plans put forward by West Cumbria Mining (WCM) late last year, but was told that the Government had the right to call in the decision under planning laws. In a statement (6 January), the local authority said it had received confirmation from Whitehall that this course of action would not be taken.

Communities Secretary Robert Jenrick reportedly sent a letter to councillors stating that the Government is “committed to giving more power to councils to make their own decisions on planning issues”.

He wrote that he was “content that [the application for the coal mine] should be determined by the local planning authority”.

West Cumbria Mining claims that the mine will be able to open 24 months after construction begins. It hopes to extract 2.5 million tonnes of coal from the undersea mine every year, for use in the UK and European steel industry.

The coal will not be used to generate electricity, given that coal-powered electricity generation must be brought offline by 2024.

CCAI Monthly Newsletter January 2021

| 25

MONTHLY SUMMARY OF IMPORTED COAL & PETCOKE Indicative Imported Coal Price COAL

(kcal/kg)

Monthly Price - FOB

Monthly Price- FOB

Monthly Change (USD)

South Africa

6000 NAR

USD 90.38

INR 6612

-0.28

South Africa

5500 NAR

USD 62.62

INR 4581

3.81

Australia

5500 NAR

USD 56.21

INR 4112

1.73

Indonesia

5000 GAR

USD 74.85

INR 5476

16.09

Indonesia

4200 GAR

USD 47.67

INR 3487

7.94

Indicative Pet Coke Price PET COKE

Sulphur

Price

Monthly Change INR 0.00

India-RIL(Ex-Ref.)

-5%

INR 9432

Saudi Arabia (CIF)

+ 8.5%

INR 7901 ($108)

-4.00

USA (CIF)

- 6.5%

INR 8194 ($112)

-6.00

Exchange Rate

Change (Monthly)

INR 73.16

-0.43

Indicative Coking Coal Price Premium Low Vol Current Month

Monthly Change (USD)

HCC 64 MID Vol

Semi Soft

CFR China FOB Aus

Low Vol PCI

Mid Tier PCI

FOB Aus

FOB Aus

MET COKE 62% CSR

FOB

CFR China

FOB Aus

126.66

216.03

109.94

196.31

91.81

101.94

96.00

408.75

431.75

25.11

25.58

16.51

22.78

12.96

19.29

15.35

63.35

45.55

South African Coal News: *In spite of the Government’s move to replace coal with renewable and the near impossible situation to finance the dry fuel with only a handful of backers in the country, the next five to 10 years will likely still see coal play an important role in South Africa’s energy sector, according to South Africa based exploration and production company Wentworth Resources. *South African coal exports were always one of the dry bulk market’s most important trades. In 2019,the country exported a total of 67.4mln tonnes of coal by sea. South Africa’s economically recoverable coal reserves are estimated at between 15 and 55billion tonnes of which 96% of reserves are bituminous coal at present. *The overwhelming volume of South African coal –70-million-tonnes-plus of coal exported a year – is

26 | CCAI Monthly Newsletter January 2021

CFR India FOB N China

continuing to go to India, with notable demand also continuing from Pakistan and Sri Lanka. The South African coal was trading around the $100/t mark this week.

Australian Coal News:

* Hopes of an early resumption in the Australian coal trade to China have been dashed after it was found that about 50 ships carrying Australian coal still stranded off the Chinese coast as of last month, and amid unresolved political and trade tensions between the two countries. *China is considering accepting some stranded Australian coal cargoes, an effort that would help easea logjam of vessels that have stacked up off its coast for months. The shipments that could be cleared

are those that arrived before a ban onAustralian coal went into effect even as the broader prohibition on Australian coal remains in place. *The value of Australia’s coal exports increased by 26% in the month of December, compared with November, despite the ongoing trade tensions with China. Data from the Australian Bureau of Statistics (ABS) has shown that coal exports were worth A$3.7-billion to the Australian economy in the month of December, as exporters looked to fill gaps in international markets.

Indonesian Coal News:

* Indonesia’s monthly coal benchmark price (HBA) is set at $75.84 per tonne for January, up from $59.65 a month earlier Refinitiv data showed, it was the highest pricing since June 2019. Demand from China, Indonesia’s second biggest coal export destination, has helped prices recover. * Indonesia’s Ministry of Energy and Mineral Resources has set the country’s coal production target at 550 million tonnes for next year, a figure unchanged from this year, due to the raging pandemic. The Indonesian Coal Mining Association (APBI) previously said it expected coal demand to really start recovering in the second half of next year. *In spite of currently having abundant coal resources, especially thermal coal, Indonesia is potentially losing state revenue of around USD 1.64-2.5 billion per year from the coal tax and non-tax revenues as the dry fuel market is gradually shrinking.

US Coal News:

* Annual energy consumption from renewable sources in the United States in 2020 exceeded coal consumption for the first time since 1885, according to the U.S. Energy Information Administration’s (EIA) ‘Monthly Energy Review’. The change reflects the continued decline in the amount of coal used for electricity generation over the past decade and growth in renewable energy, mostly from wind and solar. * The Biden administration ordered a 60-day halt on issuing new oil and gas leasing and drilling permits, as well as new coal mining permits, for federal land and waters. The order doesn’t limit preexisting operations under valid leases. * US coal carload originations rose to a six-week high 63,474 in the week that ended Jan. 23, up 10.1% from the 57,665 a week earlier. However, the latest week was down 7.2% from the year-ago week and

21% lower than the five-year average. It was also the lowest total for the corresponding week in over 11 years.

Pet Coke News: * With the cement makers in India being keen on using Australian thermal coal as the fuel alternative, Indian pet coke prices moved upward in 2021 amid tight supply with limited offers. The petcoke price of India’s Reliance Industries Limited and Chennai Petroleum Corporation has seen a surge in January’21. * US petcoke market has remained stable in 2021 with a slight pickup in spot activity expected to come over the next few weeks. US Gulf Coastspot activity has remained largely subdued, keeping prices flat, cargoes are being traded from the West Coast. *In spite of limited supply, the US petcoke demand is expected to firm up in the coming weeks, keeping prices at a high, even as supply continues to be limited. While production is expected to remain stable, demand is pushing up, notably in India several sources said this week.

Shipping Update: *Ocean carriers are taking all available measures to improve the speed and efficiency of cargo movement including employing all available vessel tonnage after overcoming the unprecedented downturn during the COVID period when demand dropped some 20-30% in Q2 2020. However, as cargo volume rose, carriers redeployed those assets as quickly as possible with inactive fleet numbers at just 2.5% at the end of 2020. *Visakhapatnam Port appears to be all set to retain its third rank in handling cargo after Kandla and Paradip during the current financial year. The port handled a throughput of 51.95 million tonne as on December 31, 2020, as against 53.54 mt during the corresponding period last year. * The spread between freight rates on the spot market has reached an “unprecedented” level, with wideranging implications for container shippers this year.

Freight rate benchmarking firm Xeneta showed how the average spot price had jumped some 2,000% over the past five years. However, as in previous years the spread between the lowest and highest short-term freight rate was around $1,000, the current spread ranges between $6,000 and $11,000.

CCAI Monthly Newsletter January 2021

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OVERALL DOMESTIC COAL SCENARIO Coal Production (in MT) Company CIL SCCL

December, 2020 58.33 5.72

December, 2019 58.02 5.71

% Growth 0.5% 0.2%

AprilDecember, 2020 392.85 32.66

April- December, 2019 388.43 46.75

% Growth 1.1% -30.1%

Overall Offtake (in MT) Company

December, 2020

December, 2019

% Growth

April- December, 2020

April- December, 2019

% Growth

CIL SCCL

52.56 5.27

53.68 5.59

-2.1% -5.6%

409.70 31.79

417.54 46.35

-1.9% -31.4%

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

December, 2020

December, 2019

% Growth

April- December, 2020

April- December, 2019

% Growth

CIL SCCL

40.25 4.50

43.04 4.88

-6.5% -7.8%

318.04 26.87

335.92 39.32

-5.3% -31.7%

Company

Coal Qty. Allocated December, 2020

Coal Qty. Allocated December, 2019

Increase over notified price

Coal Qty. Allocated AprilDecember, 2020

Coal Qty. Allocated AprilDecember, 2019

Increase over notified price

CIL

3.22

5.07

40%

29.00

21.25

23%

Spot E-auction of Coal (in MT)

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

Coal Qty. Allocated December, 2020

Coal Qty. Allocated December, 2019

Increase over notified price

Coal Qty. Allocated AprilDecember, 2020

Coal Qty. Allocated AprilDecember, 2019

Increase over notified price

CIL

5.05

0.51

12%

23.01

17.46

5%

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

Coal Qty. Allocated December, 2020

Coal Qty. Allocated December, 2019

Increase over notified price

Coal Qty. Allocated AprilDecember, 2020

Coal Qty. Allocated AprilDecember, 2019

Increase over notified price

CIL

2.43

2.00

23%

19.83

6.84

9%

Company

Coal Qty. Allocated December, 2020

Coal Qty. Allocated December, 2019

Increase over notified price

Coal Qty. Allocated AprilDecember, 2020

Coal Qty. Allocated AprilDecember, 2019

Increase over notified price

CIL

0.00

0.00

0%

2.29

0.66

13%

Special Spot E-auction (in MT)

Special Spot E-auction Scheme 2020 For Import Substitution Company

CIL

Coal Qty. Allocated December, 2020

0.00

Coal Qty. Allocated December, 2019

0.00

28 | CCAI Monthly Newsletter January 2021

Increase over notified price

Coal Qty. Allocated AprilDecember, 2020

Coal Qty. Allocated AprilDecember, 2019

Increase over notified price

0%

0.00

0.00

0.00

PRODUCTION AND OFFTAKE PERFORMANCE OF CIL AND SUBSIDIARY COMPANIES COAL PRODUCTION (Figs in Mill Te) JAN'21

SUB CO. ACTUAL THIS YEAR

APR'20 - JAN'21

ACTUAL SAME % PERIOD GROWTH LAST YEAR

ACTUAL THIS YEAR

ACTUAL SAME PERIOD LAST YEAR

% GROWTH

ECL

4.40

5.20

-14.40

34.50

38.50

-10.50

BCCL

2.30

2.70

-14.10

19.90

21.40

-7.10

CCL

7.00

7.80

-9.90

46.80

47.00

-0.50

NCL

10.40

9.50

9.00

94.60

89.10

6.20

WCL

6.20

6.60

-5.30

34.80

39.60

-12.00

SECL

15.50

15.50

0.10

106.30

110.70

-4.00

MCL

14.50

15.70

-7.40

116.40

104.90

10.90

0.00

0.30

453.30

451.50

NEC CIL

0.10 60.50

63.10

-4.10

0.40

OFFTAKE (Figs in Mill Te) SUB CO.

JAN'21

APR'20 - JAN'21

ACTUAL ACTUAL THIS SAME % YEAR PERIOD GROWTH LAST YEAR

ACTUAL THIS YEAR

ACTUAL SAME PERIOD LAST YEAR

% GROWTH

ECL

3.80

4.90

-22.50

33.30

39.40

-15.50

BCCL

1.80

2.60

-33.20

18.60

23.40

-20.40

CCL

5.80

6.00

-2.60

51.30

55.60

-7.70

NCL

9.70

9.90

-2.00

89.30

89.80

-0.50

WCL

5.50

5.20

5.20

38.70

42.10

-8.10

SECL

13.50

13.90

-3.00

111.90

115.30

-2.90

MCL

13.20

13.30

-0.20

119.60

107.40

11.30

0.10

0.40

462.90

473.40

NEC CIL

0.10 53.30

55.90

-4.60

-2.20

CCAI Monthly Newsletter January 2021

| 29

Note

30 | CCAI Monthly Newsletter January 2021

CCAI Monthly Newsletter January 2021

| 31

REGISTERED

32 | CCAI Monthly Newsletter January 2021