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 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

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 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. CITU State general secretary D. Govinda Rao 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%.

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 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.