CCAI Newsletter January-22

January 2022 Price: 40/-

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Vol. L No. 10 Published on : 28.01.2022

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From the Editor’s Desk

As the sudden coal export ban imposed by Indonesia, world’s largest exporter of the dry fuel, sent shockwave s through the seaborne fuel ma rket across Asia in the beginning of the new year and caused the imported coal pric e to skyrocket amidst soaring demand, another Asia n coal giant India stands at a crucial juncture with climbing coal production and offtake figures at one hand and the global push to prune usage the of solid fuel in the other.

In the United Nations Climate Conference (COP26), Prime Min ister Narendra Modi has stated that by 2030, Ind ia – the world’s four th-largest greenhouse gas (GHG) emitter after China, the US and the EU – will generate 500 GW from non-fossil fuel sources (up from the pre vious pledge of 450 GW). As per the Government, the country is unlikely to build any new coal-based energy capacit y over the next 10 years when the country's ene rgy mix will tilt significantly towards cleaner sources with solar emerging as the top source.

Though India has opened its coal blocks to foreign players for commercial mining, according to industry experts and market observers it will take some time for the commercial miners to kick-sta rt production from the allotted blocks. Therefore as of now, par ticipation from the private sector can only be in the form of captive coal production, which has alre ady shown a healthy growth of over 32 percent year-on-year to around 62 million tons till December 202 1.

In order to attract investment s in coal mining, the govern ment has also reduced upfront payments, relaxed payment schedules and offe red rebates in revenue shared with the government for early production. India will spend Rs 500 billion for creating infrastructures around coal mining and the country is targeting gasification of 100 million ton nes of coal by 2030.

National Miner Coal India Ltd , the company which contrib utes around 80 percent to the total coal production in India is using the First Mile Connectivity (FMC) initiative to upgrade coal tran sport facilities which would help eliminate road transportation of coal from pitheads to despatch points.

The shortage of coal that the country’s power plants face d during SeptemberOctober 2021 has now ease d to some extent, primarily due to decreased power demand in winter, and increase d coal production. Meanwhile, supply to the Nonregulated Sector (Industries and their Captive Power Plan ts) has been severely hit over the past 6-7 months espe cially via Rail mode putting the sustenance of many Industries at stake.

In terms of coal supply from overseas markets, Indonesia accounts for nearly half of India’s annual coal imports , and with the country imposin g a month-long ban on January 1 on coal exports , we witnessed a sudden surg e in prices as well as shortage in supply.

As per senior officials from the Coal Ministry, high seab orne prices for coal will push India to further intensif y lifting of domestic supplies and accelerating efforts to curb imports. The countr y’s miners, including state-r un Coal India Ltd, are preparing to meet the entire coal demand from grid-conne cted power plants in the fiscal year star ting in Apr il.

Under the current scenario , Some Indian power produc ers have sought to secure coal imports after sup ply disruptions and rising dem and left the country apprehensive, although consist ently high seaborne prices ma y limit such purchases.

Those prices have swung wild ly; high import prices presen t India’s domestic miners with an opportunity to expand their market share amid the current situation.

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CONTENT Vol. L No. 10 January 2022

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 E-mail : sec.ccai@gmail.com Website : www.ccai.co.in Editor : Subhasri Nandi

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Consumers' Page

12

Power

18

Domestic

24

Global

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.

33 Monthly Summary Of

Imported Coal &Petcoke

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Performance Report of CIL

38 Overall Domestic Coal Scenario CCAI Monthly Newsletter January 2022

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CONSUMERS’ PAGE Present Coal Scenario: National Miner Coal India Limited started the New Year on a high as the coal behemoth increased its Coal production as well as despatch quantities for the month of January ’22 compared to the previous month. CIL’s total production for January was 64.50 MT, higher than 60.41 MT production in the same month last year. MCL has clocked the highest figures (17.34 MT) this month with more than 100% achievement of its target.

In terms of coal dispatch CIL achieved more than 91% of its monthly target in January with 60.85 MT significantly higher than the despatch quantity on the same month in 2021. Cumulative dispatch by CIL FY2021-22 so far has been 542.48 MT, more than 17% higher compared to the same period in the last fiscal.

Issues faced by both Power and NRS Consumers: 1. Submission for considering actual tare weight instead of designed tare weight fixed by the Railways for weighment of coal rakes:

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As per Railway Board Circular issued in August, 2012, designed tare weight of different stocks plying in Indian railways had been fixed. For calculating permissible carrying capacity (PCC), designed tare weight of wagons is considered as benchmark along with permissible axle load limit. However, designed tare weight of wagons

is lower than the actual tare weight of wagons due to various reasons such as, *Tare weight of different wagons under the same type would be different as is evident from different stencilled tare weights of the same type of wagons in a rake. *Actual tare weight of new wagons may match with designed tare weight but in case of older wagons actual tare weight may be higher than the designed weight because of repairing, weathering, deposition of coal dust and extraneous material etc.

Therefore, calculation of RR based on designed tare weight leads to significant short-receipt of coal equivalent to the tare difference on a regular basis. Also, tare difference leads to significant over-charging of freight as the delivered coal quantity is lower than the RR quantity.

Request has been made to the Railway Board to measure tare weight of the empties in the in-motion weighbridges during the time of their inward movement and consider that actual tare weight measured on a real-time basis for calculating the RR so that the consumers may get designated quantity of coal for which freight charges and coal value are paid .

2. Submission regarding complete or partial roll back of price increase of different grades of coal by SCCL as notified in January 2022: Prices of different grades of coal (G-1 to G17) supplied by SCCL including the Washery Grades have been increased multiple times in the ongoing financial year. SCCL coal prices for different grades of coal have been revised 5 (five) times in total in the FY 2021-22. Such a recurrent and steep hike in coal prices is putting a huge financial burden on the coal consumers dependent on SCCL.

Request has been made to the Ministry of Coal and SCCL to consider either complete or at least partial roll-back of the hiked coal price as notified by the company on 10.01.2022.

Issues faced exclusively by Power Sector Consumers: 3. Submission by Power sector regarding significant grade slippage in coal supplied via Rail Mode from ECL, NCL, CCL: Power sector procuring coal from various CIL Subsidiaries such as ECL, NCL, CCL are facing significant grade slippage in coal supplied via rail mode during August-October period in 2021.For instance, *Coal supplied from ECL’s POCP, Bankola, Sonepur Bazari sidings during that period have been 3-4 grade lower than the declared grades, while in a few rakes grade slippage has been as high as 7 grades. *Coal supplied from NCL’s Dudhichua, Dudhichua WW, Bina WW, Block-B sidings have been 2-3 grade lower than the declared grades during that period. *Coal supplied from CCL’s Birds Sounda, Churi sidings for those three months have been 2- 3 grade lower than the declared grades, while in a few rakes grade slippage has been as high as 5 grades.

Such consistent and significant grade slippage substantially increases the cost of generation for the power plants which directly impacts power tariff.

Request has been made to CIL and the respective Subsidiary Coal Companies to take adequate steps in order to eradicate grade slippage and ensure supply of FSA-grade of coal to the Power Sector consumers at the earliest possi-

CCAI Monthly Newsletter January 2022

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ble. Also, re-gradation of certain mines may be considered where the cases of grade variation are rampant

4. Submission by Power Sector to expedite release of e-Auction rakes: There is extremely low materialisation of rakes allotted under e-Auctions including Special Forward e-Auction for Power Sector and rakes allotted under the same e-Auction scheme are pending since long. Most of the rakes being loaded are FSA rakes. As a result, there is a huge pendency of e-Auction rakes especially from MCL and SECL. More than 600 rakes are pending from these two CIL Subsidiaries.

Irregular liquidation of e-Auction rakes does not allow the daily requirement of the Utilities to be fulfilled as the demand of coal has been soaring. On the other hand, it is also causing the working capital of consumers to be stuck for a long period.

Request has been made to Ministry of Coal, CIL, CEA and the Railway Board so that 15% - 20% of the total supply of rakes / day may be earmarked and supplied against e-Auction quantities in tandem with FSA (Linkage auction) rake as this would enable the Power houses to build up their stock levels..

Railway Board to take necessary measures in order to increase the number of rakes being loaded from these areas so that the committed FSA quantities to the Power Plants may be matched and pending quantities may be supplied as well.

6. Request by Power Sector for reimbursement of idle freight on account of short-lifting alongwith GST: While certain Subsidiary Coal Companies (CCL, NCL & ECL) are providing refund of idle freight alongwith GST components charged by the Railways, SECL, MCL and WCL are not reimbursing the GST amount during refund of idle freight. As the Generators are paying freight charges to the Railways with GST, non-refund of this amount is leading to significant financial losses to these Utilities.

CIL has been requested to intervene so that all the CIL Subsidiaries reimburse the idle freights for underloading alongwith the GST amount.

Issues faced exclusively by NRS Consumers:.

7. Submission by NRS Consumers for immediately enhancing coal supply via Rail mode:

5. Submission by Power Utilities to immediately increase supply of rakes Following a dismal coal supply situation to the NRS Consumers via Rail Mode since April '21, from SECL on a daily basis: Supply of rakes from various sidings of SECL has been significantly lesser than respective MSQs in December'21. Inadequate supply of coal from SECL's Dipka, Gevra, Kusmunda sidings under the Korba coalfields area has led to significant short-receipt of coal for the Power Plants procuring from these mines even amid soaring demand.

Request has been made to SECL, CIL and the

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owing to high demand of coal in the Power Sector, it was expected by the Industries including CPPs that the scenario would improve in 2022 and more rakes would be supplied on a regular basis. However, the number of rakes supplied to the NRS Consumers from CIL Subsidiaries like ECL and CCL has been alarmingly low while there is hardly any rake movements from Subsidiaries like NCL. This Supply crunch is causing serious threat to the sustenance of these Industries.

CCAI CCAI CCAI CCAI Monthly CCAI Monthly CCAI CCAI Monthly Monthly Monthly Monthly Monthly Newsletter Newsletter Newsletter Newsletter Newsletter Newsletter Newsletter September November January August June April May July 2021 2022 2019 2020

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Multiple representations have been given to the Ministry of Coal, CIL and the Subsidiaries to immediately augment supply of coal rakes to the NRS Consumers as the last quarter of FY 202122 is ongoing.

8. Request for commencing supply of coal to NRS customers of WCL via Rail mode: While Subsidiaries like SECL and MCL are dispatching a moderate number of rakes and even coal companies like ECL, BCCL and CCL have started supply via Rail Mode to the NRS consumers, there is hardly any supply of rakes from WCL and NCL to the Industries including CPPs which is seriously impacting the daily operations of these consumers. As per records till mid-January over 500 rakes allotted Non-regulated Sector has been pending.

Request has been made to WCL, NCL and Coal India Limited to immediately commence rake supply to the NRS Consumers so that they can run their plants.

9. Submission by NRS Consumers to regularise coal supply via Road Mode and extend RDO validity: NRS Consumers having coal linkages with SECL's Chirimiri sidings are not able to procure coal even via Road Mode due to non-availability of coal in the mines. As a result, more than 75% of the DO quantity for December '21 could not be lifted by some of the consumers. As the supply of coal to the Industries via Rail Mode is already on halt, disruption in supply via Road mode as well may seriously jeopardise the daily operations of the Industries and impact their long-term lifting programme. Many Industries are also forced to procure coal from other sources by paying a higher price which is also affecting them financially.

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Request has been made to CIL and SECL to immediately regularise coal supply to the Industries via Road mode and also extend the validity of respective RDOs so that the consumers can lift the balance quantity before their DOs get lapsed

10. Submission regarding extension of Long-lead Traffic scheme for NRS Consumers: As per Railway Notification issued on June 2020, distance-based graded concession for transportation of certain commodities including coal and coke was provided by the Railways in order to attract additional freight traffic where 20% freight concession was admissible on normal tariff rate (NTR) for movement of coal and coke for distance beyond 1400 KM. The concession was valid till 31.12.2021.

However, supply of rakes to the Non-power Sector was severely affected during this period (from April '21) due to major upsurge in coal demand in the Power Sector. At a certain point supply of rakes to the Industries was stopped as well.

As the NRS consumers could not avail the benefit of concession provided by the Railways due to lack of rake supply, request has been made to the Railway Board to extend the distance based graded concession for one more year i.e.

31.12.2022.

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POWER THERMAL Centre to release 80K cr to states for power sector reform Centre launched a programme in June this that allows additional borrowing space to State Governments sustaining specific reforms in the power sector.

The additional borrowing limit permitted for power sector reforms is 0.5% of the Gross State Domestic Product (GSDP) of the respective state. This being the first year of the current version of the scheme, the requirements of reforms and actions has been kept less onerous, with the bar raised for future years,

12 | CCAI Monthly Newslette January 2022

pushing the states towards higher level reforms, a release stated.

Under the scheme, the states may commit to reforms and be eligible for increased borrowing space of ~Rs. 80,000 Crores. This scheme adopts a novel approach to incentivize the states, to commit to reforms and in turn, take benefit in the form of availability of enhanced financial resources, it added further.

Almost 20 states have already shown interest in taking benefit under the scheme.

Based on the recommendations of Ministry of Power in respect of such proposal from Andhra Pradesh state, Ministry of Finance had accorded their approval and the state has already availed borrowings of more than 2100 Crore, to partly utilize such allowed additional borrowing space. Proposals of Manipur and Rajasthan are also under active consideration at Ministry of Finance, both of which may be eligible

for the maximum limit of 0.50% increased borrowing space, based on reforms carried out by them in the power sector. Rest of the states are also submitting their proposals.

India’s annual power consumption to grow at 6.5% during 202224 Power demand in the country is expected to grow at an annual rate of 6.5 per cent between 2022 and 2024 backed by rising consumption from residential and industrial segments, the International Energy Agency (IEA) has projected.

The projection comes as India clocked the highest 10 per cent Y-o-Y growth in power demand during the 2021 calendar year (CY), sharing the stage with China. This was achieved in a year when global consumption registered its largest ever annual increase in absolute terms, of more than 1,500 trillion watt hour (TWh) as well as the largest relative rise since recovery from the financial crisis in 2010.

“Over 2022-2024 we expect annual demand growth to remain above pre-pandemic levels at around 6.5 per cent per year,” the IEA said in its latest report on power supply-demand projections. “The majority of supply growth in the years between 2021 and 2024 is expected in China, accounting for around half of the net total increase, followed by India (12 per cent), Europe (7 per cent) and the United States (4 per cent),” the report has projected.

Surging global electricity demand peaks emissions to record levels: IEA Global electricity demand surged in 2021, creating strains in major markets, pushing prices to unprecedented levels and driving the power sector's emissions to a record high, the International Energy Agency (IEA) said.

Electricity is central to modern life and clean electricity is pivotal to energy transitions, but in the absence of faster structural change in the sector, rising demand over the next three years could result in additional market volatility and continued high emissions, said an IEA report.

Driven by the rapid economic rebound, and more extreme weather conditions than in 2020, including a colder than average winter, last year's six per cent rise in global electricity demand was the largest in percentage terms since 2010 when the world was recovering from the global financial crisis.

In absolute terms, last year's increase of over 1,500 terawatt hours was the largest ever, according to the January 2022 edition of the IEA's semi-annual Electricity Market Report.

The steep increase in demand outstripped the ability of sources of electricity supply to keep pace in some major markets, with shortages of natural gas and coal leading to volatile prices, demand destruction and negative effects on power generators, retailers and end users, notably in China, Europe and India.

India to shut down thermal power plants in phases In a bid to fufill the commitment made by the Prime Minister Narendra Modi at the Glasgow Environment Summit two months ago that India would become carbon neutral by 2070, the Centre has decided to phase out the India's thermal power plants.

While speaking at the Energy Summit organised by the Indian Chamber of Commerce that Union Energy Secretary Alok Kumar said to achieve a carbon balance, the country will have to switch to an alternative system within 50 years. All thermal power plants in the country will be shut down by 2070 to reduce carbon emissions.

Switching to renewable energy would reduce the toxicity of carbon emissions. A guideline is being prepared to make use of solar energy, compressed biogas, hydrogen and battery power instead of thermal power, which presently accounts for more than 60 percent of India’s total installed power generation capacity.

The decision to completely stop the production of coal in the power sector will be implemented. The current thermal power generation is two lakh megawatts per day. In ordert to end this completely in 50 years, at least 4000 MW of thermal power will have to be reduced every year.

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Power Ministry to Empanel Members of Committee to Resolve Contractual Disputes The Ministry of Power (MoP) has invited an expression of interest (EoI) to empanel members of the conciliation committee of independent experts (CCIE) to resolve disputes in contracts of central public sector undertakings (CPSU) or statutory bodies of the ministry.

The EoI must be submitted within 21 days.

To be eligible for empanelment as a member of the CCIE, candidates should have held the post of the rank of secretary or additional secretary to the Government of India of any of the ministries or departments. Alternatively, they must have held the post of full-time functional director (dealing with technical matters) or CMD in the board of a CPSU operating in the field of power generation, distribution, or transmission.

The candidate must have held the post of full-time functional director in the board of a state PSU or private sector company, with an annual turnover of 20 billion, operating in power generation, distribution, and transmission. Candidates who have been chairpersons or members of the Central Electricity Authority or Central Water Commission are also eligible for empanelment.

Alternatively, the candidate should have experience as a full-time functional director or CMD in a commercial bank, financial institutions, or non-banking financial companies like REC, PFC, or Indian Renewable Energy Development Agency (IREDA).

reduce or offset emissions that emerge from the industrial and commercial activity.

The minister said India's announcement of net zero at COP 26 in Glasgow in the UK is a major step considering the country is “not the cause for climate change and has not been a historical contributor to the greenhouse gas emissions."

NTPC top biomass user in India, consumes 58,000 MT, tenders 10.7 MMT: Power Ministry State-run power giant NTPC has emerged as the top biomass user, having co-fired about 58,000 MT of biomass, while tendering a total of 10.7 MMT over short-term and long-term basis, the power ministry said.

As on date, approximately 59,000 metric tonnes (MT) of biomass has been co-fired in thermal power plants in the country, while tenders for 12 million metric tonnes (MMT) are at different stages of process for short-term & long-term duration, the ministry said in a statement.

"The biomass co-fired in the NCR (national capital) region stands at 21,000 MT and tenders floated in the region are about 5.50 MMT. Contracts have already been awarded for more than 11 lakh MT of biomass pellets," it added.

Elaborating the progress of national biomass mission, SAMARTH (Sustainable Agrarian Mission on use of Agro Residue in Thermal Power Plants), the ministry said, among the state governments, Haryana State Genco has been able to co-fire around 550 MT of biomass in two of its stations and floated tenders worth 11 lakh metric tonnes.

Pvt. Sector plays important role in journey towards net-zero emissions: Minister Discoms' Outstanding Dues The private sector plays an important role in the jour- Surge 4.4% To Rs 1,21,030 Crore ney towards net zero as bulk of the emissions come from industries and it has already woken up to this In January reality, Union Environment Minister Bhupender Yadav said.

Speaking virtually at a private event, the minister said several companies have announced net-zero ambitions over the past year.

"The private sector plays an important role in our journey towards net zero. Since bulk of the emissions come from industries, any climate action will need to

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Total outstanding dues owed by electricity distribution companies (DISCOMs) to power producers rose 4.4 per cent year-on-year to Rs 1,21,030 crore in January 2022.

DISCOMs owed a total of Rs 1,15,904 crore to power generation firms in January 2021, according to portal PRAAPTI (Payment Ratification And Analysis in Power procurement for bringing Transparency in Invoicing of generators). On a sequential basis also, total

dues in January increased from Rs 1,15,462 crore in December 2021.

The PRAAPTI portal was launched in May 2018 to bring in transparency in power purchase transactions between generators and DISCOMs. In January 2022, the total overdue amount, which was not cleared even after 45 days of a grace period offered by generators, stood at Rs 1,01,357 crore as against Rs 99,650 crore in the same month a year ago. The overdue amount stood at Rs 99,981 crore in December 2021. Power producers give 45 days to DISCOMs to pay bills for electricity supply. After that, outstanding dues become overdue and generators charge penal interest on that in most cases.

Union power secretary Alok Kumar stresses on viability of distribution companies At a time the outstanding dues of the power distribution companies are on the rise, Union power secretary Alok Kumar has said there is a need for a political consensus in the interest of viability of distribution companies.

The outstanding overdue amount in January 2022 has reached Rs 1,37,363.80 crore as per the Praapti portal of the ministry of power and has been on a rise since October 2021.

“There has to be a certain political consensus that if India has to develop, it will require robust and reliable electricity supply for households, industries, offices, shopping malls. That cannot come unless our distribution companies are viable and run on sound commercial principles.

“The key thing is regular and periodic tariff determination reflecting full cost tariff,” said Kumar at an Indian Chamber of Commerce organised event.

Electricity is a concurrent subject and determination of tariff lies with the state authorities and political considerations often prevail in determining the price of power in a state.

Govt allows use of existing power connections to charge EVs The government has revised the rules for the electric vehicle (EV) charging infrastructure and allowed their owners to charge their EVs using the existing electricity connections at homes or offices. It has also

given the go ahead for the allotment of government land to private entities through bidding for setting up public charging stations (PCS).

The Union power ministry issued the revised promulgated guidelines and standards recently and said the government plans to roll out PCS on a large scale in two phases. The first phase will cover megacities with a population of above 4 million as per the census 2011, expressways, and important highways connected to these mega cities. Big cities such as state capitals, Union Territory headquarters, and important highways connected with these cities will be covered in the second phase.

Owners may charge their EVs at their residence or offices using their existing electricity connections.

The tariff applicable for domestic consumption shall be applicable for domestic charging, the ministry said in a statement.

As per data with the ministry of road transport and highways, India has 947,876 registered electric vehicles. But only 1,028 PCS have been installed throughout the country so far.

With Cop26 goals in mind, Centre sets up new panels The Centre has begun working on its Cop26 goals, setting up panels to draw up action plans to meet its climate targets announced by Prime Minister Modi at the Glasgow conference.

Various panels have already begun meeting to detail every aspect of the scale-up -- from year-wise action plans for the increase in renewable energy, to ensuring a transmission system, storage options and purchase by discoms.

On December 30, 2021, the Ministry of New and Renewable Energy set up a committee for preparing a roadmap for 'Mission 500GW' co chaired by secretaries to the ministry of power and MNRE. It is tasked with defining state-wise and year-wise share of solar, wind and other renewable energy sources to achieve the target by 2030. The mission will look at ways to incentivise and make the storage concern affordable.

A separate Group of Officers has been created by the power ministry in November 2021, days after the Cop 26 declaration, to formulate a policy framework to promote energy storage in the power sector.

Four sub groups -- on policy and regulation, financial and taxation issues, technology and demand management -- have helped put together a draft policy CCAI Monthly Newsletter January 2022

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on energy storage which is under discussion, sources told ET. A third committee is looking at the other major issue that arises out of scaling up RE in Indiatransmission planning.

RENEWABLES Budget 2022: Industry demands incentives for Renewable Energy technologies The Union Budget 2022-23 must focus on incentivising technology adoption in the renewable energy sector through tax concessions and credit guarantee, industry chamber Federation of Indian Chambers of Commerce and Industry (FICCI) has said.

"China incentivized companies in developing green technology in solar by providing free land, concessional power cost and funding at low interest cost. Many other countries which have emerged as hubs of solar modules and components like Taiwan, Malaysia, Vietnam did so on back of huge government incentives," FICCI said.

Detailing the tax incentives that may be considered for promotion and adoption of green technology, FICCI said the government must extend concessional tax rate of 15 per cent to companies which invest in green technologies and it must allow full deduction towards investment or purchase of green technology assets.

"A credit guarantee scheme should be created, specifically for risk mitigation for customers with lower credit rating. This will enable such consumers to avail of bank financing for setting up rooftop solar projects," the chamber said.

Power Ministry clears Leh-Kaithal green energy transmission corridor The Power Ministry has cleared the proposal to lay power transmission link for evacuating renewable energy (RE) from Ladakh as part of the green energy corridor.

The proposal allows for setting up of a 5 gigawatt

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(GW ) transmission link from Pang (Leh) to Kaithal (Haryana). The project, which also includes 12 GWh of battery energy storage system (BESS), is to be completed in five years.

The estimated project cost is around 27,000 crore.

State-run transmission giant Power Grid is the implementing agency for the project. The scheme is under the regulated tariff mechanism (RTM). The proposal was cleared by the National Committee on Transmission (NCT) on January 3, 2022.

The project will provide 76 per cent utilisation of transmission capacity and will help evacuate 13 GW of RE generation (9 GWp of solar and 4 GW of wind). Out of 12 GWh battery energy storage, about 1-2 GWh will be developed as part of transmission element to keep the line charged during the period of no generation.

Besides the transmission corridor and battery storage systems, Power Grid will strengthen the AC system in Ladakh and Jammu & Kashmir to provide RE power within Ladakh as well as to Jammu & Kashmir.

Cabinet approves Rs 1,500 crore additional equity infusion in IREDA The government has approved equity infusion of Rs 1,500 crore in the Indian Renewable Energy Development Agency (IREDA), which would raise its additional lending capacity by Rs 12,000 crore.

"The enhanced lending capacity will enable IREDA to finance addition renewable energy capacity of up 4000MW. Present loan book size of IREDA is around Rs 27,000 crore," an official told PTI. The minister said the infusion of Rs 1,500 crore will enable IREDA to lend Rs 12,000 crore to the renewable sector.

As per the RBI lending norms, a lender can lend up to 20 per cent of its net worth. Thus, IREDA would now be able to lend up to Rs 900 crore in an RE projet as its net worth is increased to Rs 4,500 crore from existing Rs 3,000 crore, the official explained.

According the statement, the equity infusion will also enable IREDA to enhance its net worth which will help it in additional RE financing, thus contributing better to the government targets for RE and also to improve the capital-to-risk weighted assets ratio (CRAR) to facilitate its lending and borrowing operations.

Power and NRE Minister reviews progress of Solar Roof Top Scheme The Union Minister of Power and New & Renewable Energy Shri R.K Singh reviewed the progress of the Roof Top Scheme on 19th January 2022. After the review, the Minister gave directions for simplifying the Roof Top Scheme, so that the people are able to access it easily. He has directed that henceforth, it will not be necessary for any household to get the roof top installed by any of the listed vendors.

The intimation to the DISCOM of the installation of the roof top can be given either in the material form through a letter / application or on the designated website which has been set up by every DISCOM and by the Govt. of India for the Roof Top Scheme.

The distribution company will ensure that the netmetering will be provided within 15 days of the information being received. The subsidy to be given by the Govt. of India which is 40% for roof top of upto 3 KW capacity and 20% beyond that upto 10 KW will be credited to the account of the householder by the DISCOM within 30 days of the installation.

In order to ensure that the quality of the solar panel and the inverter is according to the prescribed standard; the Govt. of India will publish from time to time the lists of solar panel manufacturers and inverter manufacturers whose products meet the expected quality standards and the price lists thereof; and the householder can select the solar panels and inverter of his choice.

India requires 18 GW capacity addition to meet hydro purchase obligation norms by 2030: Icra

corresponds to about 39 per cent increase over the existing installed hydro power capacity in the country," said Girishkumar Kadam, Senior Vice President & Co-Group Head - Corporate ratings, Icra.

The HPO norms have been subsequently notified

by SERCs (state electricity regulatory commission) in few states only, in line with policy targets as of now, he noted. Hence, he stated that timeliness as well as consistency in the notification of HPO norms

by SERCs in other states as well as subsequent implementation of the same by the obligated entities too remain a key monitorable.

SECI invites bids for setting up 1,200 MW wind power projects The Solar Energy Corporation of India (SECI) has invited bids to set up 1,200 megawatt (MW) interstate transmission system (ISTS) connected wind power projects across the country.

The project will be bid under the tariff-based competitive bidding process under the Standard Bidding Guidelines. The last date to submit bids is 18 February, 2022, according to the tender document.

It added that the scope of work includes identifying land, installation, and ownership of the project, obtaining connectivity, long-term access, and necessary approval and interconnection with the ISTS network to supply power to SECI. Bidders can bid for a minimum capacity of 50 MW and a maximum of 1,200 MW. The document added that project developers will be responsible for the acquisition of land for the projects.

Around 18 GW hydro capacity addition is required to meet the hydro purchase obligation (HPO) norms by 2030 in the country, according to rating agency Icra To further the growth of hydro energy segment, the Centre has outlined policy measures over the last two-year period to promote the investments in the segment through notification of HPO norms, long term trajectory for HPOs as well as tariff rationalization measures.

"Based on the notified hydro purchase obligation norms & trajectory available till 2030, incremental hydro power capacity requirement is estimated to remain significant i.e. at about 18 GW, which

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DOMESTIC COAL

may limit such purchases. Those prices have swung wildly this month after Indonesia, the world’s biggest thermal coal exporter, put restrictions on exports and then recently started to ease them.

High coal prices to intensify India’s efforts to curb imports, lift domestic supplies

High import prices present India’s domestic miners with an opportunity to expand their market share, while forcing users to depend heavily on domestic supplies, Jain said..

High seaborne prices for coal will push India to lift domestic supplies and accelerate efforts to curb imports, according to a top government official.

Coal India to complete 35 FMC projects by FY 23-24

The country’s miners, including state-run Coal India Ltd., are preparing to meet the entire coal demand from grid-connected power plants in the fiscal year starting in April, federal Coal Secretary Anil Kumar Jain said in a phone interview. The government expects a sharp rise in production from Coal India’s mines as well as from captive producers — companies that produce coal for their own use.

Some Indian power producers have sought to secure coal imports after supply disruptions and rising demand left the country grappling with shortages last year, although consistently high seaborne prices

18 | CCAI Monthly Newslette January 2022

The largest coal-producing company in the world and a Maharatna public sector undertaking Coal India Limited is upgrading the coal transport facilities in its mines.

The company which contributes around 80 percent to the total coal production in India is using the First Mile Connectivity (FMC) initiative to upgrade coal transport facilities in the mines of Coal India Ltd. FMC projects are helping eliminate road transportation of coal from pitheads to despatch points. To enable FMC, CIL will Lay new railway lines, Construct new railway sidings, Construct mechanized Coal Handling Plants (CHPS) with Silos.

FMC is helping transport coal using mechanized conveyors & computerized Rapid Loading Systems (RLS). FMC will help the efficient supply of coal to the power plants.

Coal India will complete 35 FMC projects by FY 2324. These projects will help despatch 415 million tonnes of coal annually.

Privatisation is the way forward to regulate coal industry hit by price hike, shortages, say experts With a rise in coal prices and shortage of supply in the wake of disruptions from Indonesia, the private sector seems like a viable option for the country to emerge from an impending crisis, experts and industry leaders say. “The participation from the private sector is always welcome, as a larger number of participants would not only enhance supply but would also infuse competition,” Vinaya Varma, MD, mjunction Services Ltd, said.

However, at present, private sector participation can only be in the form of increased production from the captive blocks. “It will take some time for the commercial miners to kick-start production from the allotted blocks. As a matter of fact, captive coal production has already shown a healthy growth of over 32 percent year-on-year to around 62 million tons till December 2021,” he said.

Experts say private participation will help but that would take time for output to materialize. There has been interest shown by private players which should help to augment supply. However, the economic viability in the long run for use of coal as fuel is the main issue. Also given the change in focus to renewables, the interest may be limited as potential investors will weigh options.

Also, privatisation competitiveness in run, Coal India will benchmark, going competitive..

will further give a boost to the segment. “While in the short run the show since it sets price forward, prices will be more

Coal India's supplies via e-auction up 31% so far in FY22 State-owned miner Coal India's supplies via e-auction has risen 31% so far in the current financial year.

The company's actual dispatches under five e-auction windows were at 77.4 million tonne

compared with 59 million tonne a year ago, the miner said in a statement.

Special forward e-auction, the exclusive window meant for power sector, accounted for nearly 28 million tonne of total dispatches.

Coal supplied under other e-auction outlets, where predominantly non-regulated sector customers access coal, accounted for 49.5 million tonne. In this category, Coal India logged a growth of 21% compared to 41 million tonne in same period last year and a two-fold increase over 24.4 million tonne of the comparable period in 2019.

The increase in supplies under e-auction was achieved even though Coal India logged an alltime high of almost 391 million tonne of supplies to thermal power plants during April-December, clocking a 23.3% growth.

Coal India’s total offtake rose to 482 million tonne during the first nine months of the current fiscal, up 18% year-on-year. The state-run company has booked a total of 83.7 million tonne of coal under its five e-auction categories during April-December, an increase of 2.3 million tonne on year.

Coal Ministry PSUs' Capex Rises 28.33% Public sector undertakings (PSUs) under coal ministry have recorded a capital expenditure of 12,605.75 crore in the first nine months of the current financial year, a growth of 28.33 per cent over 9,822.28 crore in the corresponding period of last year.

"The ministry of coal, through its PSU’s has registered 28.33 per cent YoY growth in capex achievement for the period ending December 2021. As compared to last year achievement of 9822.28 crore for period upto December 2020," the ministry said in a statement.

The ministry said the increased capital expenditure gave impetus to the national economy that has been badly affected due to the Covid-19 pandemic.

"Coal ministry PSU's have done capex of 12605.75 crore, thereby giving a major impetus to the COVID struck economy," it said.

Pralhad Joshi seeks early resolution of South Eastern Coalfield land issues CCAI Monthly Newsletter January 2022

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Union coal, mines and Parliamentary Affairs minister Pralhad Joshi said that he has sought an early resolution of various land-related issues of South Eastern Coalfield Ltd in Chattisgarh.

This comes at a time when the global window for future coal mining is getting shorter with a shift happening towards meeting environment, sustainability and governance (ESG) compliance.

The country’ coal requirement is expected to go up to 1,123 mt by 2023 from the present level of 700 mt.

India has the world’s fourth-largest reserves and is the second-largest producer of coal. With a global shift to green energy to address growing environmental concerns, the Indian government is trying to harness coal reserves within the next three decades.

“Joshi also requested the Chief Minister to expedite auction of mineral blocks as per the recent reforms brought about in the mineral sector," the statement said.

India’s coal production went up to 74.78 million tonnes (mt) in December as compared to the same period in 2019.

MCL offers 22.5 lakh tonne coal to power consumers via roadcum-rail mode State-owned CIL arm Mahanadi Coalfields Ltd said it has offered 22.5 lakh tonnes of coal to power consumers via the road-cum-rail mode as the stock of fossil fuel rises above 12.5 million tonnes at the mines with a gradual increase in output in the last quarter of FY22.

MCL is looking for opportunities to maximise despatch as the company's coal stock is slated to increase further with an increase in production from its mines in Odisha, Mahanadi Coalfields Ltd (MCL) said in a statement.

The offer of 22.5 lakh tonne coal through the roadcum-rail (RCR) mode to consumers was made after this new initiative. A coal allocation of 18 lakh tonnes to state/ central power generation companies in November and December last year successfully helped MCL liquidate stocks.

Till date, more than 8.5 lakh tonnes of coal, equivalent to about 225 rakes, has already been lifted by the state and central power gencos to build up stocks at their power plants.

20 | CCAI Monthly Newslette January 2022

SCCL to focus on greater asset utilisation To accelerate coal production so as to achieve the set annual coal production target of 68 million tonnes of coal in the current fiscal, the Singareni Collieries Company Limited (SCCL) initiated a slew of steps to optimally use heavy machinery in opencast projects.

At a high-level review meeting held recently, SCCL Chairman and Managing Director N. Sridhar issued a set of instructions to the officials concerned to enhance utilisation of heavy machinery in open cast mines by putting them to use for at least 18 hours a day.

At present this heavy machinery/equipment are being used for only 13 to 14 hours a day in the SCCL’s OCPs. In order to maximise their usage, the SCCL management has instructed the general managers of the coal mining areas to use the heavy machinery to their full potential for meeting the coal output targets and growing demand for coal through greater asset utilisation.

This forms the crux of the key focus laid by the company management on better usage of existing assets such as Side Dump Loaders (SDL), Load Header Dumpers (LHD), shovels and other high capacity machinery..

RAILWAYS & FREIGHT

Roadmap in place for coal supply: Ministry of railways The ministry of railways said the public transporter is implementing a roadmap, prepared in consultation with the power and coal ministries, for providing coal rakes to power plants located far away from mines to build up fuel stocks.

The Ministry said the rake supply to such shorter distance plants “naturally” improves because a large number of them are equipped with mechanised unloading systems, especially the ‘hopper’ mechanism, which results in a faster turnaround time of three hours.

The ministry said many rakes had to be “stabled” after distant power plants regulated coal intake in the April-June period of 2020 to save inventory

costs and ran short once power demand picked up.

Stocks are being built up now.

Freight margins December

recover

in

Freight margins have shown some recovery in December as mining, steel and cement freight rates saw a healthy one-month increase in December, and fuel prices stabilized.

For December, CRISIL’s freight index is back to festive levels seen in October, after the extended south-west monsoons negatively affected rates in November.

With fuel prices stabilizing, the uptick in business in mining, steel and cement is translating to an increase in margins.

During December 2021, the freight industry saw a margin (free cash flow) of 20 per cent, a five-point bump from November at 15 per cent. Margins in December were the highest since February 2021.

“Industries such as mining products (coal, iron ore, and limestone), cement and steel are seeing a sequential recovery as freight rates for these applications have improved by more than 5 per cent.

A key driver for this improvement is the resumption in construction and mining activities, which were subdued in December after a slow November due to prolonged monsoon.” said the CRISIL report

STEEL

India's December steel output, consumption down on year Finished steel production declined by 5.3pc on the year to 9.39mn t in December, while consumption dropped by 15pc from the previous year to 8.73mn t, provisional data from the steel ministry's Joint Plant Committee (JPC) showed. Finished steel comprises alloyed and non-alloyed steel.

Both production and consumption inched higher on the month by 1.9pc and 2.7pc, respectively.

Consumption remained weaker in December as buyers postponed purchases in anticipation of lower prices, although the lifting of a construction ban in the northern states and subsiding rains in the south gave way to some demand.

The Argus hot-rolled coil index averaged 66,100

21 | CCAI Monthly Newsletter May 2021

rupees/t ($889/t) in December 2021, 29pc higher than the December 2020 average, but lower by 5pc from the November average, when prices hit a new record.

Finished steel output in April-December rose by 22.1pc on the year to 82.21mn t, while consumption jumped by 16pc from the previous year to 75.85mn t, the JPC data showed. Crude steel production in December fell by 3.9pc on the year, but inched up by 0.6pc on the month to 9.89mn t. Hot metal production dropped by 3.3pc on the year to 6.45mn t, but rose by 2.6pc on the month..

FICCI seeks zero customs duty on ferronickel; higher import levy on stainless steel flat products in Budget Ahead of the Union Budget, industry body FICCI has requested the government to reduce the basic customs duty (BCD) on ferronickel to zero and levy a higher duty of 12.5 per cent on the import of stainless steel flat products.

At present, while the BCD on ferronickel is 2.5 per cent, the same on stainless steel flat products is 7.5 per cent. On stainless steel scrap, zero customs duty is applicable up to March 31, 2022.

Putting its case for zero duty on ferronickel, Ficci said it is the most important raw material used in stainless steel making. The stainless steel industry meets the bulk of its nickel requirements through ferronickel and stainless-steel scrap routes, as pure nickel is very expensive.

Due to the non-availability of ferronickel in the country, domestic stainless steel producers are forced to import it from countries like Japan, South Korea and Greece. This is because India is deficient in nickel ore, and therefore, there is no production of ferronickel within the country. Besides, no customs duty is not applicable on ferronickel originating from Indonesia and Japan due to India-ASEAN FTA and India-Japan CEPA

JSW Steel banks on firm prices, auto sector demand India’s second largest private sector steel producer JSW Steel recorded a steep jump in profit in the third quarter on a year-on-year basis even though it was down on a quarter-on-quarter basis.

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The company had acceleration in demand will happen in the second half of this fiscal and it would be better than the first half. While demand grew 9 per cent in Q3 over Q2, there was 7 per cent fall yearon-year.

However, from the middle of December, news started swirling around that the cut would not happen any further. The Government nreduced interest rates, eased credit restrictions. With that, iron ore prices which slid to $87 a tonne shot up to $137 a tonne.

Coking coal prices, which dropped to $314 a tonne, went back to $445 a tonne.

This has led to a major cost push for the Steelmakers as Steel prices also moved up to $790 a tonne FOB (free on board) from $770 a tonne. These movements signal to us that steel prices will not fall further. Plus, there will be re-stocking in the market.

The company said auto sector, which was weak in Q3, is coming back and will be a major driver for the Steel industry. Passenger vehicles have picked up while demand for light commercial vehicles is also expected. Demand for appliances, packaging and the renewable sector will continue. In infrastructure, demand from pipelines is strong, be it water or petroleum..

Indian Steel Association seeks restoration of import duties The Indian Steel Association (ISA) has proposed anti-dumping and countervailing duties are restored on certain imports of finished steel.

Among these is the countervailing duty on some hot and cold rolled stainless steel flat products from China. It also wants anti-dumping duties on imports of aluminium and zinc coated flat products originating in or exported from China, Vietnam and Korea, and on straight-length alloy bar and rod imports from China. It has asked the finance ministry to restore these measures by 31 January, Kallanish notes.

These duties were all suspended 12 months ago to help steel users amid then surging prices (see Kallanish passim).

ISA has also requested the ministry extend antidumping duties on hot-rolled, cold-rolled and colourcoated flat steel, as well as wire rod, in order to safeguard the domestic steel industry from “dumped imports at predatory prices”. Authorities revoked these measures earlier this month.

22 | CCAI Monthly Newslette January 2022

RSP steel to be used by Indian Navy for making submarines The Rourkela Steel Plant, a unit of Maharatna public sector undertaking SAIL, has received a certificate from the Indian Navy for producing high-strength steel for making submarines, a statement said.

As a policy, the Indian Navy is using indigenous steel for its ship and submarine manufacturing. The RSP is fulfilling the needs of a tough and meticulous customer like the Indian Navy for the last 10 years... commencement of commercial production of the submarine grade steel will further strengthen our association.

The RSP has so far supplied more than 7,000 tonne of steel, adhering to stringent quality specifications for use in various naval applications, a source of the unit said.

The special plate plant of the RSP that is dedicated for making steel for the defence sector has been relentlessly working towards developing new grades of customised products that can absorb high ballistic impact, the statement said.

The high-quality steel is being developed with years of research and several rounds of testing, it added.

Tata Steel’s India sales drop in October-December Steel sales dropped by 5.2pc on the year to 4.41mn t during the October-December quarter, while production rose by 4.3pc to 4.80mn t, according to provisional data released by the company.

The firm's India production during the first nine months of the financial year ending March 2022 rose by 16pc on the year to 14.16mn t, while sales during the same period gained by 4pc to 13.15mn t as a result of continued economic recovery. Exports accounted for 14pc of total sales.

India's finished steel production and consumption dropped on the year in December, but rose on the month, pointing to an improving steel demand scenario in the country. The country's exports in November fell to their lowest in the current fiscal year ending 31 March on uncompetitive Indian offers.

Deliveries for automotive and special products rose by about 50pc on the quarter, while branded products and retail rose by 2pc from the previous quarter, and industrial products and projects rose by 3pc.

CEMENT

components. Other areas might even see a low single-digit YoY volume decline.

November slowdown

Cement volume likely to be lower in Q3FY22 on seasonal weaknesses Seasonal weaknesses that embrace prolonged monsoons, primarily in south India, a ban on development actions in the Delhi-NCR area and different components like subdued demand, would possibly lead to Indian cement corporations witnessing a 4–6 per cent decline in volume for the quarter-ending December 2021 (Q3FY22).

Although realisations are up by 5–7 per cent on a pan-India foundation, these could not be sufficient to cowl enter value improve. Thus, value hikes from January are anticipated, sellers and cement firm executives say.

Pan-India costs are likely up 5 per cent, led by a ten per cent rise in the West and 5-7 per cent improve throughout the remainder of the areas, besides in the South the place costs are likely flat.

Sources say the Eastern area might even see a low double-digit volume decline YoY owing to the transporters’ strike in Chhattisgarh, sand unavailability in Bihar, amongst different

While demand gained tempo in October 2021, it slowed down considerably in November due to the development ban in the NCR, prolonged monsoons in the South and some states in the North, sand points in the Eastern area in addition to in elements of UP, and the Diwali vacation season, Axis Securities mentioned in a report.

UltraTech Cement to expand Birla White cement production capacity UltraTech Cement plans to invest US$129m in capacity expansion projects in order to increase the production capacity of its Birla White brand white cement by 93% to 12.5Mt/yr from 6.5Mt/yr.

The Aditya Birla subsidiary says that it will commission the new capacity in a phased manner.

The investment aims to strengthen Birla White cement’s presence in the growing white cement market and to reduce its dependence on high-cost imports.

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GLOBAL Global seaborne coal trade rose 5.7% in 2021, importers say Global seaborne coal trade rose by 5.7% last year, driven by rising demand from steelmakers for coking coal and its products as economies began to recover from the coronavirus crisis, Germany’s VDKi coal importers lobby group said.

Imports and exports of hard coal across the globe stood at 1.180 billion tonnes in 2021, up from 1.116 billion in 2020, the Verein der Kohlenimporteure (VDKi) estimated.

Trade in coking coal rose by 6% to 903 million tonnes while that of steam coal for power

24 | CCAI Monthly Newslette January 2022

stations was up 4.9% at 277 million tones. Strong demand came out of Asia, with notable growth rates in smaller economies such as Malaysia, Thailand and Vietnam, adding to China and India’s overriding hunger for imported energy.

Among exporters, Russia and the United States exceeded export volumes of pre-pandemic 2019. Only 17% of hard coal consumed globally is traded internationally.

In Germany, Europe’s biggest importer, shipments in 2022 could rise by 7.7% to 42 million tonnes after rising by 24.5% last year, VDKi noted.

Global coal-fired power generation to reach an all-time high in 2021: IEA With electricity demand outpacing low-carbon supply, and with steeply rising natural gas prices, global coal-fired power generation is estimated to have increased by 9 percent in 2021 to hit an all-time high, the International Energy Agency (IEA) said in its latest report.

Paris-headquartered IEA estimated global coalbased power generation at 10,350 terawatthours (TWh). However, coal’s share of the global power mix in 2021 is expected to be 36 percent, around 5 percentage points below its 2007 peak. In the United States and the European Union, coal power generation is forecast to increase by almost 20 percent in 2021 but will not reach 2019 levels.

By contrast, the estimated growth of 12 percent in India and 9 percent in China will push coal power generation to record levels in both countries. Taking into account the rebound in global industrial output, overall coal demand worldwide is expected to grow by 6 percent in 2021, bringing it close to the record levels it reached in 2013 and 2014.

Meanwhile, the decline in global coal-fired power generation in 2019 and 2020 led to expectations that it might have peaked in 2018.

But 2021 dashed those hopes, the IEA report said.

Coking coal futures hit record high as prompt contract sees contango Coking coal futures on the Singapore Exchange hit all-time record highs supported by stronger Australian and global prices for the crucial steelmaking commodity around tight coal supplies and recent disruptions to logistics in North America.

Contracts surged Jan. 14 with prompt February 2022 rebounding to $415.75/mt at the close

in Singapore, from $412.75/mt in the previous session.

Front-month futures continued to exceed the benchmark S&P Global Platts spot premium HCC FOB Australia index, at a record of $409/mt on Jan. 14, with futures outpacing spot physical index prices for the sixth straight session.

The forward curve has seen more support in front-month contracts, moving into a prompt contango structure from backwardation at the front of the curve earlier this month and in December. In a contango, later-dated prices are higher than prices for prompt loading, or delivery, with the inverse of higher prompt prices seen in a backwardated market.

Demand for Canadian, US and Russian coking coal had earlier tightened up Atlantic and Asian markets during lower availability from Australia, as miners adjusted production to meet contracts and BHP conduced maintenance at coal processing plants in the second half of 2021. .

Indonesia's coal ban sends prices soaring, other exporters fail to step up: Russell Indonesia's short-lived ban on exporting coal has sent frictions through the seaborne market for the fuel in Asia, with the fallout likely to last beyond the initial shortage of available cargoes.

The short-term impact of the sudden ban announced on Jan. 1 by the world's largest exporter of the polluting fuel was to send prices for cargoes from other major shippers soaring back toward last year's record highs. The longer-term impact is that the key planks of being cheap and reliable, promoted by the coal industry in its battle for survival against cleaner energy alternatives, are seriously undermined.

With coal in short supply it's not surprising that prices have rallied, with the benchmark Australian thermal coal price, the Newcastle Port Weekly Index , as assessed by commodity price reporting agency Argus, surging to CCAI Monthly Newsletter January 2022

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$243.97 a tonne in the week to Jan. 21.

This is up 59% from the recent low of $153.10 a tonne in the week to Nov. 12, and the price is closing in on the record high of $252.72, reached in the week to Oct. 15.

at $60.66/t fob Kalimantan. The prices hit a historical high of $154.21/t fob Kalimantan on 22 October 2021, from a historical low of $22.40/t on 11 September 2020.

There have been reports of a Newcastle cargo changing hands at more than $300 a tonne, which if confirmed would show the desperation of some buyers to secure coal.

Indonesia’ s Domestic coal utilization to reach 166 mln tons in 2022

Russian coal prices at the eastern port of Vostochny have also surged, with IHS McCloskey assessing cargoes at $233 a tonne last week, up from recent lows around $155 in mid-November. South African thermal coal for export from Richards Bay has also gained, rising to $162.58 a tonne last week from the recent low of $125.35 at the start of 2022.

Jakarta - The Ministry of Energy and Mineral Resources has projected that domestic coal utilization will increase by 33 million tons to reach 166 million tons in 2022 from 133 million tons in 2021.

Indonesia allows more producers to export coal As many as 32 coal producers have been permitted to export coal, the country's energy ministry (ESDM) said. These producers have agreed to fully meet the domestic market obligation (DMO) norms for the last year and pay a penalty for the failure to comply with the regulation, the ESDM said. Under the DMO, suppliers have to dispatch at least 25pc of their output to the domestic market.

The permission accorded to these producers is the result of an ongoing evaluation on the fulfilment of DMO rules by Indonesian miners over the last year. The ESDM is evaluating 2021 sales of over hundreds of more miners.

At least 166 million tons of coal will be mostly used for electrical power plants, the ministry's Secretary General Ego Syahrial informed.

"The coal produced will mostly be converted to electric power. It will also be used in industries and households, he said at the Indonesia Economic Outlook 2022 event.

Coal utilization must pay attention to environmental issues, such as high-carbon emissions that have a deteriorating impact if mining regulations are not carried out properly, he added.

Meanwhile, the Indonesian government will encourage coal downstreaming as the country's coal potential is considerable, he added. One of the projects for coal downstreaming involves the development of dimethyl ether as a replacement for liquefied petroleum gas (LPG), he noted.

The latest decision follows last week's move to permit 139 coal producers, which fully met the DMO norms for last year, to export coal. The decision could increase supplies in the seaborne coal market in coming weeks. But uncertainties surrounding Indonesia coal's price outlook may continue until a final decision is taken.

China releases Australian coal from its ports

Argus last assessed Indonesian GAR 4,200 kcal/kg (NAR 3,800 kcal/kg) coal on 21 January

The data released by the General Administration of Customs of China on January 21 shows that

26 | CCAI Monthly Newslette January 2022

China has cleared most of the Australian coal that had been held at Chinese ports due to a coal import ban, according to Fengkuang Coal Logistics.

5.6 million tonnes of Australian coking coal that was detained in Hong Kong – including 706,000 tonnes in October, 2.67 million tonnes in November, and 2.42 million tonnes in December – has been released.

China has historically been reliant on Australian high-grade coking coal, however, in the wake of the import ban, China has turned its sights to North America.

Throughout 2021, China imported 9.29 million tonnes of US coking coal, a 977.4 per cent increase on the previous year, taking its coking coal imports to 18.7 per cent of China’s imports, according to Fengkuang Coal Logistics.

In December, the import volume of Canadian coking coal increased by 23 per cent from the previous month to 1.11 million tonnes.

In 2021, the cumulative import of Canadian coking coal was 8.4 million tonnes, an increase of 98.62 per cent from 2020. The import volume almost doubled, and the import share of Canadian coking coal accounted for 16.9 per cent, whereas Australia’s coking coal imports accounted for 11.3 per cent.

China’s met coal prices seen bearish, demand to dip on year – sources China’s metallurgical coal prices are expected to remain bearish in 2022, with demand falling 2.9% below 2021 levels, industry sources said.

Guangdong-based Hongyuan Futures said China’s 2022 average met coal prices are expected to dip below Yuan 2,000/mt ($314/ mt).

In the early part of 2022, prices will likely remain soft mainly because of the Winter Olympics that starts in February, while prices will continue to be volatile ahead of two important national meetings occurring in the year, according to Hongyuan Futures.

Price volatility is likely throughout the year amid

fluctuating demand from the infrastructure sector, which could be impacted by the steel industry’s production cap measures, according to Hongyuan Futures.

Guotai Junan Futures sees 2022 domestic coking coal futures prices moving in the range of Yuan 1,200-2,200/mt, and added that met coal demand would not rise much in 2022 on a potential output cap in China’s crude steel sector.

Vietnam: Coal sector positive prospect in 2022

sees

With many signs of rising demand for coal in various economic sectors in 2022, the Vietnam National Coal – Mineral Industries Group (Vinacomin) will capitalise on advantages and turn challenges into opportunities, said its Chairman of Member Council Le Minh Chuan.

Vinacomin will push ahead with set plans to carry out the Government’s action programme for the implementation of the Politburo’s Resolution No.55-NQ/TW dated February 11, 2020 on strategic orientations to national energy development till 2030 with a vision to 2045.

This year, Vinacomin sets the goals of earning 131.6 trillion VND (5.72 billion USD) in revenue, up 2 percent from 2021, contributing 18.1 trillion VND to the State budget and raking in 3.5 trillion VND in profit.

It will also strive to sell 43 million tonnes of coal, including 41.2 million tonnes at home and 1.8 million tonnes for export, exploit 39.1 million tonnes of coal and generate 9.6 billion kWh of electricity

Philippine chamber urges government deals for coal, more renewable The Philippines’ largest business group said the government should look into negotiating deals CCAI Monthly Newsletter January 2022

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with other governments to ensure a sufficient supply of coal for the country’s energy needs.

PCCI also called the development of alternative sources of power supply, specifically solar and biomass, which could be deployed in viable sites, especially in the Visayas and Mindanao.

George Barcelon, PCCI president, said Indonesia’s recent move to restrict its coal exports showed how vulnerable the Philippines was to coal supply disruption. PCCI noted that the country imports nearly 70 percent of its coal.

He said policymakers should look into proposals for a government-to-government procurement or agreement, similar to the Reciprocity Agreement in 1973 where the Philippines helped Indonesia develop its geothermal technology in exchange for cheaper coal.

The business group however added that while renewable energy resources could be rapidly deployed in certain areas, coal is still critical to fuel the country’s economy because it is the most stable source of energy. .

South32 warns of labour issues from pandemic as quarterly coking coal output falls Australia's South32 (Jan 24) warned of potential impact from workforce restrictions due to the coronavirus pandemic at its flagship Illawarra project in the second half, as it reported about a 15 per cent drop in second-quarter coking coal output.

The diversified miner follows heavyweights BHP Group and Rio Tinto in warning of disruptions from coronavirus-induced labour shortages as Australia faces a surge of Omicron cases.

"The COVID-19 pandemic continues to impact our operations and supply chains in different ways, across our global portfolio," the miner said.

While it maintained its fiscal 2022 metallurgical

28 | CCAI Monthly Newslette January 2022

coal output guidance of 6.3 million tonnes (Mt), it said it will provide an update to its financial year 2022 and financial year 2023 forecast with its half-year results next month. .

Glencore updates on Valeria coal resource option Glencore is undertaking a range of studies related to the Valeria coal resource option in Queensland.

These studies and assessments will support the state and federal approvals process for the project, which is still yet to reach a final investment decision.

The development of any coal project, including Valeria, will take into account Glencore’s climate change strategy and stated emission reduction targets.

Glencore has committed to reducing emissions by 15% by 2026, 50% by 2035 and an ambition of being a net zero total emissions business by 2050.

In Australia, its Liddell, Integra and Newlands mines will be closed and rehabilitated within the next five years, and the majority of the company’s coal assets in Colombia and South Africa will come to the end of their economic lives in the early 2030s.

World’s largest coal port to be 100% powered by renewable energy Port of Newcastle says move is part of plan to decarbonise the business by 2040 and ‘we don’t really have a choice’ The world’s largest coal port has announced it will now be powered entirely by renewable energy.

The announcement from Port of Newcastle comes as coal power generation in Australia’s

national electricity market fell to its lowest level in the final three months of 2021.

Though the port continues to export an average of 165Mt of coal a year, the move is part of a plan to decarbonise the business by 2040, and to increase the non-coal portion of its business so that coal only makes up half its revenue by 2030.

It has signed a deal with Iberdrola, which operates the Bodangora windfarm near Dubbo in inland New South Wales, for a retail power purchase agreement that provides the port with large scale generation certificates linked to the windfarm.

Stretched supply chains European coal availability

hit

Strained coal supply chains in northwest Europe could limit deliveries to utilities during the peak winter heating season and spark a flurry of arbitration disputes relating to nonperformance of contracts.

Amsterdam-Rotterdam-Antwerp (ARA) market participants have warned that contractual obligations might not being fulfilled, either as a direct result of, or a knock-on effect from, rail constraints in Russia — Europe's largest coal supplier.

The exact tonnage under threat of nonperformance is unclear, but several supply chains are affected, including coal for some German utilities, participants said.

Russian producers have been struggling to access rail capacity to the northwestern ports that supply Europe's coal market for several reasons. These include freezing temperatures and storms, extended maintenance by staterun Russian Railways (RZD) and a shortage of railcars. The prioritisation of eastbound export deliveries to higher-paying Asia-Pacific buyers is another factor.

What limited Russian spot cargoes are available are changing hands at significant premiums to

30 | CCAI Monthly Newslette January 2022

the API 2 index. Premiums for February-loading NAR 6,000 kcal/kg coal are in the low-$30s/t, with a cargo trading at a premium of $30.50/t on 18 January. A NAR 5,500 kcal/kg offspecification February-loading cargo changed hands at a premium of $34.90/t this week, although the destination is unclear.

Russia’s commodity exports in spotlight amid standoff with West Russia’s exports of oil, natural gas and coal, a key source of revenue for the Kremlin’s coffers, have been in the spotlight in recent months against the backdrop of Moscow’s broader standoff with the West over military alliance NATO’s expansion.

According to Russian Energy Ministry, Russian coal output rose by 9% to 439 million tonnes in 2021. Russia exports around half of its coal production.

TASS news agency said, citing official data, Russian coal exports rose by 5.7% in 2021 to 214.37 million tonnes. Russia was the world’s third-largest coal after Australia and Indonesia in 2020. Its share in global coal trade accounted for 16% in 2020.

Key importer of Russian coal are China, South Korea and Japan, accounting for more than a half of Russia’s total coal imports.

German transport minister says we can’t exit coal without stepping up gas use Germany cannot phase out coal-fired electricity generation without using gas to fuel the transition, transport minister Volker Wissing said at an energy conference recently.

“This is a challenge of similar dimension to moving to zero-neutral mobility,” the politician of the business-friendly FDP said during the annual Handelsblatt Energy Conference, adding there were no easy solutions for decarbonising individual sectors.

“Voters expect us resolve these questions and therefore everybody is responsible for

addressing and living up to the energy transition challenges,” said Wissing.

Polish coal production up in 2021 Lignite production in Poland increased by 13.1 percent year on year in 2021, while production of hard coal grew by 1.2 percent, the Central Statistical Office (GUS) reported this month.

In total, Poland produced 51.9 million tonnes of brown coal and 55.2 million tonnes of hard coal in 2021.

Around 70 percent of electricity in Poland comes from coal. In December last year, Poland's state assets ministry reported that, within ten months of 2021, the production of electricity in the country's coal-fired power plants grew by 31 percent year on year.

This month, trade unions from the Polish Mining Group (PGG), Europe's biggest hard coal producer, managed to reach an agreement with the company's management on a wage rise, which they demanded in return for their increased work-load which resulted from an increased demand for hard coal.

capital, will be closed by 2033.

Zasavje and Savinjska-Saleska regions will have access to 248.4 million euro ($284.5 million) in financing from the Fair Transition Fund by 2027 to cushion the social impact of the coal phaseout, the government said.

Coal to make up 85% of total U.S. power capacity to be retired in 2022 – EIA Coal-fired plants will account for about 85% of total U.S. power capacity scheduled for retirement this year with natural gas and renewables taking a greater share of the supply, the U.S. Energy Information Administration said this week.

U.S. power plant operators were scheduled to retire about 12.6 gigawatt (GW) of coal-fired generating capacity in 2022 out of the total 14.9 GW capacity set to be retired.

When it comes to coal production, in December alone, GUS reported that lignite production jumped by 48.3 percent year on year, while for hard coal it fell by 3.3 percent year on year.

The largest coal power plant scheduled to go out of service in 2022 is the 1,305-megawatt (MW) William H. Zimmer plant in Ohio, the EIA said.

Slovenia adopts strategy to complete coal phase-out by 2033

In 2022, 1.2 GW of U.S. natural gas-fired capacity is due for retirement, while at 0.8 GW, nuclear capacity retirements represent 5% of expected shutdowns this year, the EIA said.

Slovenia's government adopted a national strategy to stop using coal for electricity production by 2033, it said.

The strategy envisages the closure of the Velenje coal mine, as well as a comprehensive social and economic restructuring of the Zasavje and Savinjska-Saleska regions, the government said in a statement recently.

Under the strategy, the 884 MW Sostanj coalfired power plant TES and the 123 MW Ljubljana coal-fired heat and power station which delivers 90% of the remotely generated heat in Slovenia's

The retiring natural gas capacity is made up of older steam and combustion turbine units. The largest U.S. natural gas plant due to close in 2022 is the Meramec power plant in Missouri, the agency said.

US Hampton Roads coal exports fall to nine-month low in December Coal exports from the Hampton Roads CCAI Monthly Newsletter January 2022

| 31

terminals in Virginia fell 16% on the month to 2.38 million in December, a nine-month low, Virginia Maritime Association data released Jan. 24 showed.

December's coal exports were the lowest since 2.35 million st in March and 16% lower than 2.83 million st in November, when exports had hit a 20-month high.

FOB Hampton Roads 6,000 kcal/kg thermal coal fell to an average $126.77/mt in December, down from $128.23/mt in November, the highest price on record since S&P Global Platts began assessing it April 6, 2018. The December average was the second highest price on record.

The CIF ARA price also fell from the previous month to $143.13/mt, down for the second month in a row after hitting a 14-year high in October 2021.

US East Coast low-vol metallurgical coal averaged $317.14/mt in December, down from $385.46/mt in the previous month. Full-year exports from the terminals through December totaled 29.67 million st, up from 26.64 million st in 2020.

The Hampton Roads region saw 37 coal ships set sail in December, down from 29 in the previous month. Total departures in 2021 were 398 ships, up from 375 ships in 2020.

DTEK accepting two more vessels with 158,000 tonnes of American coal in ports DTEK Energy is accepting two more Panamax class ships from the United States in Ukrainian ports.

According to the company’s press release, the seventh vessel with 75,500 tonnes of American coal on January 9 moored in the TIS port, and the eighth vessel with 82,500 tonnes of coal will moor in Pivdenny port on January 11.

Coal from the next Panamax ships will replenish the warehouses of DTEK Energy TPPs.

32 | CCAI Monthly Newslette January 2022

“These days we are accepting the seventh and eighth Panamax ships, which deliver 158,000 tonnes of fuel. Also, in January, we expect the arrival of the ninth ship with imported coal. In total, this is 215,000 tonnes for the needs of Ukrainian thermal power plants,” CEO of DTEK Energy Ildar Saleev said.

As the company recalled, DTEK has contracted nine ship supplies with 618,000 tonnes of coal for the needs of Ukrainian thermal power plants.

The first vessel contracted by the company for the needs of state-owned PJSC Centrenergo arrived in Ukraine on November 20, 2021.

In December, another five Panamax ships with 350,000 tonnes of coal arrived in Ukraine for the needs of DTEK Energy TPPs. Three more ship deliveries are in January 2022.

Brazil extends coal use to 2040 under new 'just transition' law Brazil will continue to use and subsidize coal as an energy source until at least 2040, according to a so-called "just energy transition" law published, which policy experts said goes against the climate and consumers.

Broadly, "just transition" is a process aimed at ensuring the benefits of a green economy shift are shared widely, while supporting those who may lose out economically, whether nations, regions, industries, communities, workers or consumers.

But Brazil's new law - far from promoting the adoption of climate-friendly clean fuels - benefits coal producers in southern Santa Catarina state by prolonging the activities of coal-based power plants in the region for a further 18 years.

Under previous policies, Brazilian subsidies for thermal coal-powered plants were supposed to end by 2027, and the authorization for three large plants in Santa Catarina to operate was meant to expire in 2025.

MONTHLY SUMMARY OF IMPORTED COAL & PETCOKE Indicative Imported Coal Price COAL South Africa South Africa Australia Indonesia Indonesia

(kcal/kg) 6000 NAR 5500 NAR 5500 NAR 5000 GAR 4200 GAR

Monthly Price - FOB USD 176.00 USD 140.08 USD 128.66 USD 98.50 USD 67.42

Monthly Price- FOB INR 13125 INR 10446 INR 9595 INR 7345 INR 5028

Monthly Change (USD) 40.80 29.77 26.69 -0.68 -1.30

Indicative Pet Coke Price PET COKE

Sulphur

Price

India-RIL(Ex-Ref.) Saudi Arabia (CIF)

-5% + 8.5%

INR 13984 INR 11523 ($155)

Monthly Change ($) INR -1696.00 -7.50

USA (CIF)

- 6.5%

INR 12772 ($171)

-12.75

Exchange Rate

Change (Monthly)

INR 74.58

-0.70

Indicative Coking Coal Price Current Month Monthly Change (USD)

Premium Low Vol FOB CFR China 409.25 389.22 69.40

39.57

HCC 64 MID Vol Semi Soft Low Vol PCI Mid Tier PCI MET COKE 62% CSR FOB Aus CFR China FOB Aus FOB Aus FOB Aus CFR India FOB N China 362.78 352.16 269.81 277.44 275.38 575.50 515.69 71.08

30.41

South African Coal News: * South African department of Mine management has recently started a cleanup operation. Coal mining wastewater spilled near a historic South African game park last month, raising community concerns about the environmental effects. An estimated 1,500 cubic metres of liquid known as slurry leaked after a dam collapsed. Though there have been no confirmed reports of human, domestic livestock casualties, the incident has caused concern over people living in the proximity of coal mines in the country. * South African power utility Eskom Holdings SOC Ltd. will burn more coal than it planned over the this year amid delays to government program to procure electricity from private producers. State-owned Eskom expects to generate 2% more energy from coal for the ongoing financial year. South Africa is struggling to solve a power crisis caused by Eskom’s aging coal-burning generation fleet, which is prone

50.56

43.04

42.18

9.50

54.89

to breakdowns that result in electricity outages. The government’s plans to address the problem by adding supply from private producers has been prone to delays including court challenges. * According to Statistics South Africa, the domestic mining production increased by 5.2% year-on-year in 2021. Coal production suffered a blow as production of the dry fuel had gone down by 7.9%, contributing -2.2 percentage points. South Africa’s mineral sales at current prices increased by 22.2% year-on-year in November 2021. Sale of coal was up by29.7%, contributing 5.6 percentage points.

Australian Coal News: * The Australian economy is largely dependent on coal. It is the second-biggest exporter of coal in the CCAI Monthly Newsletter January 2022

| 33

world (behind Indonesia) and coal is the nation’s second-biggest export. The nation still relies on coal for the majority of its energy mix despite its pledge on climate change. Australia aims to cut emissions by just 26% from 2005 levels by 2030 which is almost half of the US and UK. Canberra has also resisted joining of two-thirds of countries who have pledged net zero emissions by 2050. Australian coal markets have recently been buoyed by Asian markets desperate for coal amid a global energy crunch. * Australia accounted for bulk of coking coal imports

by India as the country’s demand for coking coal hit 8 months high towards the end of 2021. Australia’s export to India in November last year had jumped by 46pc on the year and by 30pc on the month to 4.35mn t, as per the latest data available. Australian premium hard coking coal prices on a fob basis rose to an all-time high of $410/t in September. The price stood at $390/t this month. * China's ban on Australian coal clearly benefited North American coals in 2021. While Australia remained the largest seaborne met coal spot supplier at 63% in 2021, other origins including Indonesia and Mozambique recorded steady increases. Spot market liquidity could rebound if China starts to import Australian coal once again according to analysts. * Australia's thermal coal market is expected to see rising interest in the near term even as Indonesia eases its export ban amid increasing omicron cases and persistent rains leading to supply tightness, sources said this month. Market participants had expected Australian prices to soften after Indonesia relaxed its export ban from Jan, 20, 2022, anticipating an easing of some pressure from the Australian coal in the global supply chain. However, prices have remained elevated and sources expect the trend to continue in the near term as wet weather conditions and omicron spread have limited production at mines, leading to berthing delays at Newcastle..

Indonesian Coal News: *Indonesia has allowed 37 vessels loaded with coal to depart, as the world's biggest thermal coal exporter relaxes its ban on shipments. The ban implemented on 1st January has been eased for miners that have met a requirement to sell a portion of their output for local power generation, after the state utility procured enough coal to ensure 15 days of operation, the

34 | CCAI Monthly Newslette January 2022

Ministry said. There were about 120 vessels either loading or waiting to load off Indonesia's coal ports in Kalimantan on the island of Borneo following the uncertainty over export ban. *Indonesia's state utility Perusahaan Listrik Negara (PLN) said that together with the energy ministry it was strengthening a coal delivery monitoring system to ensure enforcement of domestic sales rules and energy security. Coal deliveries to local power plants will be monitored throughout the supply chain by PLN and the energy ministry's mineral and coal department and miners would receive automated warnings for any late shipments. * Indonesian President Joko Widodo launched construction of a $2.3 billion coal gasification plant earlier this month in a bid to slash the country's liquefied petroleum gas (LPG) imports while optimising its coal resources. The plant is designed to utilise 6 million tonnes of low rank coal to produce 1.4 tonnes of dimethyl ether (DME) annually, which can reduce Indonesia's LPG import by 1 million tonnes per year. * The Indonesian coal industry is well refined and it can provide coal to Pakistan for power projects being developed under the China-Pakistan Economic Corridor (CPEC). Indonesian Ambassador to Pakistan Adam M Tugio said a large chunk of Pakistan’s coal demand could easily be met through a consortium of Indonesian exporters, who would trade with local businessmen. The envoy stressed that Indonesia had the potential to increase its coal exports to Pakistan to around $1 billion.

US Coal News: * Supply setbacks weighed on US and Canadian coking coal exports in recent month. US exports of coking coal had risen by almost 1mn t or 31.9pc from a year earlier in October ’21 but have fallen since then November shipments from the US to China more than trebled from a year earlier to 1.12mn t, a monthly increase of 8.59pc. But December and January shipments plummeted as Chinese port authorities started to clear pre-ban Australian coal cargoes. The same factors affected US exports to Brazil, where exports fell by 21% and Turkey, with shipments falling by 70%. * Decreased coal output was the principal reason for the decline in U.S. emissions between 2005

and 2019, with power-sector emissions falling by a third over that period. Conversely, increased coal generation was the chief reason for the increase in American emissions last year. Natural gas prices nearly doubled in 2021, prompting more coal generation. U.S. coal retirements also fell sharply last year. America was on track to retire less than 5 gigawatts of coal capacity in 2021. * The year 2021 managed to be the second-best year for U.S. intermodal volumes, with year-over-year gains in the first half of 2021 offsetting volume losses in the second half of the year. Coal carloads were up substantially because of sharply higher natural gas prices, while carloads of motor vehicles suffered as microchip shortages forced automakers to cut output. U.S. carload traffic was 6.6% higher in 2021, totalling 12 million carloads, amid gains for coal, metals and chemicals, among other commodities. * Coal exports from the Hampton Roads terminals in United States’ Virginia fell 16% on the month to 2.38 million in December ‘21, a nine-month low, Virginia Maritime Association data released this month showed. December's coal exports were the lowest since 2.35 million st in March and 16% lower than 2.83 million st in November, when exports had hit a 20-month high.

* US petcoke market has remained highly active this month with a few trade deals being reported especially from the West Coast markets.US Gulf coast market also reported significant activities in the petcoke market as the high-sulfur petcoke are in high demand. Meanwhile, Indian petcoke buyers largely rely on domestic petcoke due to rise in seaborne prices.

Shipping Update: * The dry bulk market had one of its best years in 2021 and the success story could repeat itself in 2022 as well. In its latest monthly report, shipbroker Allied said that the dry bulk sector, undoubtedly, began the new year with a strong start. It has been at a 12-year high levels in average returns for all dry segments, with Panamax, Supramax and Handysize finishing the year well above their respective levels of 2009.

Pet Coke News:

* Demand for second hand vessels, in terms of enquiries, seems to be on a high at the start of 2022, even if this isn’t currently translated to more S&P deals concluded. In its latest monthly report, shipbroker Intermodal noted that “while it is logical that most of the S&P reports of the first weeks of the year are linked to very limited activity as reflected in the weekly tables with the concluded deals in the dry market – a phenomenon common in the first months of the year characterised by low seasonality.

* Indian delivered petcoke prices fell this month due to low demand and reduced price of Indonesia, Australia, and South African thermal coal.

Construction activities in and around Delhi were halted in November and December due to adverse air quality and environmental concerns, causing cement demand to dwindle that which depends heavily on petcoke. Traders said that weak petcoke import demand from China also led traders to lower offer prices for India.

* The Baltic Exchange’s dry bulk sea freight index fell for the eleventh straight session, en route to its second consecutive weekly decline, tracking weaker rates across all vessel segments. The overall index, which factors in rates for capesize, panamax and supramax vessels, fell 59 points, or 4%, to 1,415, its lowest since mid-February 2021. The index has lost nearly 19.8% this month. The capesize index dropped 140 points, or 13.6%, to 891, it’s lowest since June 2020. The index is down 40.4% this month.

* As the petcoke sellers targeted Asia as their preferred destination due to low prices, the price of petcoke delivered into the Mediterranean region has plummeted over the month, even as the product availability rose compared to earlier this month.

“Despite the longer transit journey, petcoke is still cheaper to sell there than it is in Europe and the Mediterranean region. Meanwhile, US Gulf Coast petcoke saw high levels of spot tonnage supply compared with grains and petcoke demand.

* Data from China this past month, seems to support the positive narrative, regarding a potential swift rebound of the dry bulk market moving forward. In its latest monthly report, shipbroker Allied Ship broking said that it has been a slow start to the year for the dry bulk market so far, albeit it is just halfway through the first month. The trend seems to be a direct continuation of what was witnessed during the final months of 2021, while it seems that this trend is in direct correlation with the Chinese economy during these months.

CCAI Monthly Newsletter January 2022

| 35

PERFORMANCE REPORT OF CIL COAL PRODUCTION OF ALL SUBSIDIARIES OF CIL (PROVISIONAL DATA) FY - 2021 - 2022 Sl. No.

Subsidiary

Monthly

Production During Jan'22

Fig. in Mill. Te. Achmt (%)

Production Apr'21 to JAN'22

Production Growth % (FY-22 Apr'20 to (FY-22-21) FY-20) JAN'21

Target (MT)

19.52

1

ECL

4.12

3.53

85.68

24.77

34.44

-28.08

-26.95

2

BCCL

3.47

3.26

93.95

23.35

19.86

17.57

-28.94

3

CCL

9.15

7.08

77.38

49.86

46.78

6.58

-14.94

4

MCL

11.94

12.08

101.17

98.44

94.62

4.04

-21.14

5

NCL

7.29

6.37

87.38

40.58

34.84

16.48

40.08

6

SECL

19.84

14.84

74.80

106.68

106.27

0.39

15.98

7

WCL

17.05

17.34

101.70

134.46

116.38

15.54

8

Overall CIL

72.86

64.50

88.53

478.14

453.19

5.51

9

SCCL

6.39

6.03

94.37

52.54

38.61

36.08

10

Captives

9.07

71.26

54.09

31.74

Grand Total :

79.60

601.94

545.89

10.27

36 | CCAI Monthly Newslette January 2022

COAL DESPATCH FROM ALL SUBSIDIARIES OF CIL Sl. No.

Subsidiary

Monthly Target

Fig. in Mill. Te.

Despatch during JAN'22

Despatch Up to Jan

Target

FY'22

Achmt. (%)

FY'21

FY'2021-22

FY'2020-21

Growth % (FY-22-21)

1

ECL

3.26

2.99

91.72

3.75

29.41

33.11

-11.17

2

BCCL

2.95

2.96

100.34

1.76

26.00

18.63

39.56

3

CCL

7.13

6.55

91.87

5.87

57.90

51.07

13.37

4

NCL

12.09

11.47

94.87

9.66

103.64

88.92

16.55

5

WCL

6.98

5.87

84.10

5.49

51.82

38.70

33.90

6

SECL

16.74

14.51

86.68

13.48

127.84

111.91

14.23

7

MCL

17.67

16.49

93.32

13.24

145.87

119.61

21.95

TOTAL CIL

66.82

60.84

91.05

53.25

542.48

461.95

17.43

8

SCCL

6.29

5.99

95.23

5.59

54.17

37.38

44.92

9

Captives

8.71

6.69

73.12

54.22

34.86

Grand Total

75.54

65.53

669.77

553.55

21.00

COAL DESPATCH TO DIFFERENT SECTORS Despatch during January

Sector

Growth (%)

Fig. in Mill. Te. Despatch Up to January

Growth (%)

FY'22

FY'21

FY'20

(FY-22 - FY-20)

FY'22

FY'21

FY'20

(FY-22 - FY-20)

Power

63.22

51.52

53.26

18.70

553.37

436.4

463

19.52

CPP

4.28

4.24

4.98

-14.06

31.58

38.18

43.23

-26.95

Steel

0.73

0.71

0.90

-18.89

6.31

7.15

8.88

-28.94

Cement

0.69

0.77

0.87

-20.69

5.98

5.34

7.03

-14.94

Sponge Iron

0.66

0.94

0.93

-29.03

6.49

7.65

8.23

-21.14

Others

5.97

7.33

7.23

-17.43

66.05

58.91

47.15

40.08

Total :

75.55

65.51

68.17

10.83

669.78

553.63

577.52

15.98

CCAI Monthly Newsletter January 2022

| 37

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

December, 2021 60.22 5.65

December, 2020 58.28 5.72

% Growth 3.3% -1.2%

April- December, 2021 413.63 46.52

April- December, 2020 392.80 32.66

% Growth 5.3% 42.4%

Overall Offtake (in MT) Company

December, 2021

December, 2020

% Growth

April- December, 2021

April- December, 2020

% Growth

CIL SCCL

60.67 5.70

52.46 5.27

15.7% 8.1%

481.78 48.18

409.59 31.79

17.6% 51.6%

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

December, 2021

December, 2020

% Growth

April- December, 2021

April- December, 2020

% Growth

CIL SCCL

51.25 4.62

39.92 4.50

28.4% 2.6%

390.68 39.95

317.36 26.87

23.1% 48.7%

Company

Coal Qty. Allocated December, 2021

Coal Qty. Allocated December, 2020

Increase over notified price

Coal Qty. Allocated April- December, 2021

Coal Qty. Allocated April- December, 2020

Increase over notified price

CIL

4.25

3.22

141%

23.78

29.00

82%

Spot E-auction of Coal (in MT)

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

Coal Qty. Allocated December, 2021

Coal Qty. Allocated December, 2020

Increase over notified price

Coal Qty. Allocated April- December, 2021

Coal Qty. Allocated April- December, 2020

Increase over notified price

CIL

5.02

5.05

45%

29.45

23.01

36%

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

Coal Qty. Allocated December, 2021

Coal Qty. Allocated December, 2020

Increase over notified price

Coal Qty. Allocated April- December, 2021

Coal Qty. Allocated April- December, 2020

Increase over notified price

CIL

1.95

2.43

130%

25.28

19.83

47%

Special Spot E-auction (in MT) Company

Coal Qty. Allocated December, 2021

Coal Qty. Allocated December, 2020

Increase over notified price

Coal Qty. Allocated April- December, 2021

Coal Qty. Allocated April- December, 2020

Increase over notified price

CIL

-

-

-

2.86

2.29

81%

Special Spot E-auction Scheme 2020 For Import Substitution Company CIL

Coal Qty. Allocated December, 2021 -

Coal Qty. Allocated December, 2020 2.40

38 | CCAI Monthly Newslette January 2022

Increase over notified price -

Coal Qty. Allocated April- December, 2021 2.33

Coal Qty. Allocated April- December, 2020 7.30

Increase over notified price 50%

CCAI Monthly Newsletter January 2022

| 39

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