DOMESTIC COAL

India’s coal production target at more than one billion tonnes for FY24: Govt

The government said that it has set a coal production target of more than one billion tonnes (BT) for the next financial year. Of the said target, state-owned CIL has been given the task to produce 780 MT of coal, followed by 75 MT for Singareni Collieries Company Ltd (SCCL) and 162 MT for captive and commercial mines.

A total of 290 mines are operational in Coal India

Ltd (CIL) out of which 97 mines produce more than one MT per year. For all 97 such coal mines, issues of land acquisition, forest clearance, environment clearance, rail connectivity and road connectivity have been discussed and timelines fixed. With continued effort of coal companies, out of 97 coal mines, there are no pending issues in 56 mines. Only 41 mines have 61 issues, for which continued co-ordination and monitoring is being carried out by top management of coal companies with concerned state government authorities and the central ministries.

CIL produced 622 MT of coal during FY22 and 513 MT have been produced so far in the cur- rent financial year. It is expected that CIL will surpass the target of 700 MT fixed for current fiscal and accordingly will achieve 780 MT for the year 2023-24..

Govt, CIL consider coal price revision

In anticipation of yet another high-demand season for electricity during April-June, the central government and state-run Coal India Ltd are considering revising the price of coal for the power sector and other industries that consume the fossil fuel.

“Prices are mostly market-driven for commercial, captive and imported coal. They are notified for the power sector. High-level talks have taken place. The revision would depend on several factors," said a source. The talks come against the backdrop of an increase in input costs over the years, with an accelerated hike in the past two years. In the past one-year, international coal prices have surged to record levels.

“Coal India has kept prices unchanged for five years now, despite the increase in various cost inputs, especially diesel and explosives. Even in this backdrop CIL’s PAT (profit after tax) for H1 was at a record high," said a Coal India official in response to an emailed query.

Coal India to reopen discontinued mines; to offer them on revenue sharing model to pvt sector

As part of its plan to increase production, Coal India Ltd (CIL) has identified 30 closed coal mines with substantial coking and non-coking coal reserves that can be reopened. CIL is planning to increase production to meet the increase in demand.

According to Pramod Agrawal, Chairman, CIL, these mines would be pursued on a revenuesharing basis with private participation. “We have floated tenders for reviving 20 such mines and efforts are on to start them at the earliest. We are also speeding up the tendering for the remaining mines,” Agrawal told Business Line.

The state-owned miner, which had sustained a double-digit growth so far during the current fiscal, is hopeful of achieving its targeted production of 700 million tonne (mt) by the end of FY23, clocking over 12 per cent growth over the high base of FY22 and 78 mt jump in volume terms. At a 10 per cent growth rate, CIL is hopeful of touching a production of 770 mt in FY24.

Power producers owe more than Rs. 19,000 crore to coal mining PSUs as of December 2022

The outstanding dues of the power sector for the coal supplied by the mining PSUs rose by 10 per cent on a M-o-M basis to Rs. 19,180 crore at the end of December 2022, of which the majority is owed to Coal India (CIL).

According to the latest data by the Coal Ministry, power generating companies owed 15,387 crore to the mining behemoth, while 3,793 crore were the outstanding dues of Singareni Collieries Company (SCCL).

With respect to the country’s largest coal miner, the outstanding dues on a month-on-month basis were higher by 5 per cent from 14,631.15 crore in November 2022. Similarly, the dues of SCCL were higher by 37 per cent from 2,764 crore during the same review period. CIL’s outstanding dues during December have been the second highest during the 2022 calendar year, after July. The dues have been inching up since November. The dues kept growing during May (13,825.20 crore), June (15,252.20 crore) and hit the highest so far in 2022 during July at 15,824.14 crore. The outstanding to CIL started to decline from August (15,143.31). .

Govt allocates 3 more coal blocks for commercial mining activities

The government has allocated three more coal mines under commercial mining to the successful bidders.With this, allocation orders have been issued for 48 coal mines so far having a cumulative peak rated capacity 89 million tonnes per annum (MTPA) under commercial mining.

Representatives of successful bidder received allocation orders from Additional Secretary

(Coal) M Nagaraju who stressed on participation of private sector for contributing towards energy security, the coal ministry said in a statement. The cumulative production capacity of the three blocks mines is 3.7 MTPA and its geological reserves is 156.57 MT.

These mines are expected to generate an annual revenue of Rs 408 crore and will attract capital investment of Rs 550 crore. It will provide employment to 5,000 people. The government launched the sixth round of commercial coal mines auction in November and has put on block 141 mines.

India Plans To Double Domestic Coking Coal Output By 2030

India is the world’s second-largest producer of crude steel. Therefore, it needs a steady supply of coking coal. Currently, India imports about 90% of its coal requirement. However, several initiatives are underway to increase local production of raw coking coal to 140 MT by 2030. In fact, the GoI has already identified four coking coal blocks in a bid to step up production.

For now, trade relations between Australia and China are sketchy at best. Therefore, Australia has started looking for other markets to ship commodities like ore and coking coke, one such market being India. However, over the past few months, the world has learned that many Indian steel mills have replaced “costlier” Australian coking coal with alternatives.

India is also banking on the state-owned Coal India Ltd (CIL) which has planned to increase raw coking coal production from existing mines by up to 26 MT. The company has identified nine new mines with a Peak Rate Capacity of about 22 MT. It hopes to step up capacity by financial year 2024-25.

Altogether, Australian coke imports dropped over 18% from April to November to 23.6 million tons (MT). Year over year, this represents a drop of 5.3 MT. In the same period, imports to India from Indonesia, Russia, and the US increased by 187%, 138%, and 163%, respectively..

Policy in works to draw private

Sector Into Coal Gasification

The coal ministry is planning a policy framework to incentivise private sector companies for developing coal-gasification projects. The policy, aimed at providing capital subsidy, tax exemption and assured availability of coal, could be ready in two months, a senior government official said.

While the current coal production in India is somewhat in line with demand, it is expected that with the augmented production at commercial coal mines, the supply of the fuel will increase in the next couple of years.

The government had launched a mission document for coal gasification of 100 million metric tonnes by 2030 since it is considered a cleaner option compared to burning of the fuel. The total mines auctioned for commercial sale of coal, under various stages of development, have a total production capacity of 600 million metric tonnes a year.

Currently, the production from the operational commercial coal mines is around 100 million metric tonnes, the official said. The production is expected to improve to 160 million metric tonnes in the financial year 2023-24 and 250 million metric tonnes in FY25, he added.

CIL sets aside Rs. 42,600 cr for cleaner coal transport, solar power

State-run miner Coal India Ltd (CIL) plans to invest around 42,600 crore in low-emission infrastructure for fossil fuel mining and green energy to help India achieve its net-zero targets, said the company’s chairman and managing director Pramod Agrawal.

Considering the growing criticism of coal use, Agrawal said CIL plans to invest 24,000 crore in first mile connectivity (FMC) projects in three phases, including 10,500 crore in phase I involving 35 projects, which will enable mechanized transportation of 415 million tonnes of coal. “We have invested very heavily on evacuation. Mechanized evacuation was just 120 million tonne in Coal India (till a few years back). By De- cember 2024, it will increase to more than 550 million tonnes," he said in an interview.

In the second phase, the company will take up nine FMC projects with investments of 2,500 crore by FY25 which would handle the mechanized evacuation of 57 million tonnes of coal. Seventy more projects have been identified in the third phase which would require an investment of 11,000 crore.

‘SCCL will reach 100 million tonnes of coal production in next five years’

Singareni Collieries Company Limited (SCCL) Chairman and Managing Director N Sridhar said the company would reach the target of 100 million tonnes of coal production in the next five years.

Speaking after unfurling the national flag on the occasion of the 74th Republic Day at SingareniBhavan here, Sridhar said the Singarenicompany had achieved a turnover of Rs 26,000 crore last fiscal year and the current fiscal year it was moving towards achieving a turnover of Rs 34,000 crore with production of about 70 million tonnes of coal.

As part of Atmanirbar Bharat, the Centre is planning to stop foreign coal imports in the next three years and has set a coal production target of 1200 million tonnes for public companies like Coal India and Singareni, he said, adding that keeping this in mind, Singareni would start 10 new projects in the next five years to meet the coal demand of the thermal power plants in the country.

Work on to have Coal-to-Methanol plants in India: Union min

Hardeep Singh Puri

Work is in progress to set up Coal-to-Methanol plants in the country using indigenous technology, Union Minister of Petroleum and Natural Gas Hardeep Singh Puri said. BHEL (Hyderabad and Trichy), Thermax, and IIT Delhi are working on the project, the Union minister said while inaugurating the demo run of an Inland Water Vessel powered by Methanol blended Diesel (MD15) on

the Brahmaputra here.

The low-carbon boat ride was done on a 50-seater motor launch marine vessel named 'SB Gangadhar' by Puri and Union Minister of State for Petroleum and Natural Gas RameshwarTeli. Methanol is a cost-effective alternative marine fuel, less expensive than other marine fuels and is economical in terms of developing shoreside storage and bunkering infrastructure, Puri said. Assam Petrochemical Limited (APL), Namrup, currently produces about 100 TPD of Methanol and is implementing a new project for the production of 500 TPD of Methanol, Puri said at the event, organised as a part of the run-up to the India Energy Week 2023 (IEW 2023) to be held in Bengaluru from February 6 to 8 next.

Railways

Railways surpasses FY22 revenue in nine months of current fiscal

With three months remaining in the current fiscal year, Indian Railways has already surpassed its total earnings of financial year 2021-22 (FY22), the railway ministry said. Tuesday

The national transporter has earned Rs 1.91 trillion so far in this fiscal year.

Union Railways Minister AshwiniVaishnaw said that revenue was “Rs 42,370 crore more” thus far this fiscal year with “71 days more to go”. The development comes less than two weeks ahead of the Union Budget, in which the Railways is expected to see a boost in allocation.

Though a break-up of the earnings was not available, it is estimated that about Rs 1.3 trillion was earned from the freight business, with approximately Rs 55,000 crore coming through passenger fare, and the rest through coaching, parcel services, and sundry receipts.

As of January 19, the Railways had ferried 1,185 million tonnes (mt) of raw materials and goods, which was 8 per cent higher than the whole of the previous fiscal year.

Railways plans to introduce multiple wagon tipplers to de-load coal

The Indian railways is planning to introduce multiple wagon tipplers to speed up the coal distribution network across the country. Along with additional wagon tipplers, the railways is also looking to have additional wagon unloading lines to de-load the coal wagons at the powerhouses.

Coal wagon tipplers are used to empty the loaded wagons from the top and sides, with the help of clamping devices. At present, one wagon tippler is used by the Indian railways for emptying coal.

“The technology of multiple wagon tipplers at once is widely used in Japan and we are working to bring it to India. Three coal wagons can be tippled at one point. This will drastically improve the supply chain of coal across the country,” said a senior Indian Railways official who did not want to be named.

With the increase of wagon tipplers, railways isanticipating swift movement of coal and a reduction in transportation time. Further, the Indian railways will be getting 50,000 wagons in 2023. One rake has 59 wagons and can carry 4,000 tonnes of coal at one time and with increasing the number of wagons railways plan to improve the number of rakes transporting coal.

lion tonnes (mt) in December, which is the highest during the current fiscal year. The volume is also 8 mt higher than the traffic over the past three months, which had been stuck at 61 mt since September. It is also the second-highest traffic volume handled by major ports in a month since the onset of Covid-19. Cumulatively, traffic at major ports reached 576 mt by December, which is nearly 9 per cent higher than the previous fiscal year.

“The entire increase in volumes in December, Quarter and year can be explained by volumes of coal. However, container volumes have come under stress,” said Mohit Kumar, a researcher with DAM Capital, who attributes the current coal surge to geopolitical tensions.

Officials and experts suggest the current surge in coal cargo has also been aided by the increased use of the rail-sea-rail (RSR) mode for the domestic transportation of thermal coal.

Steel

Steel industry saw rise in output, consumption in Apr-Dec: Report

Shipping

India: Dec traffic at major ports sails to highest in FY23, rises 10.4 per cent

After three months of stagnant growth, cargo traffic at state-owned ports rose 10.4 per cent in December year-on-year (YoY), signaling a strong rebound in a year that has fared slower than expected.

Twelve major ports handled cargo of 69.5 mil-

India’s steel production and consumption grew 5.7% and 11.5%, respectively, during the first nine months of FY23 (April to December), CareEdge Research said in a report. The rating agency estimates India’s steel production to be in a range of 117-119 million tonne, up 3-5% year-on-year in FY23.

CareEdge Research said that the consumption growth rate is expected to be healthy at 10-12% in FY23, backed by a pick-up in investment in the infrastructure sector and policy support by the government.

“The healthy domestic demand outlook is likely to benefit steel players. To serve the growing domestic demand, local steel production will grow backed by sustained high capacity utilisation levels," it added.

Steel exports declined sharply by 54% y-o-y in the first nine months of FY23 due to weak glob- al demand and an export duty of 15% imposed on steel products from May 2022 to November 2022. India became a net importer of steel with a 38% decline in exports y-o-y during Q3FY23. During the same period, imports grew by 70%," the report stated.

Steel mills eye interim price hike in January

India’s steel mills are looking at an interim price hike of ₹1,500 - ₹3,000 per tonne (/t) across select offerings which include benchmark hot rolled coils (HRCs), TMT bars and some other categories like HR strips.

Prices are hovering at around 57,000/t for HRCs - the highest in three months since October- and hikes come on the back of better performance by end-user industries and a rise in coking coal costs apart from improved domestic demand.

This will be the second time this fiscal that mills see an interim price rise, after the April - May period when high coal cost and strong export bookings initiated the move. Mills raised their prices in January, after a prolonged eight-month lull because of poor export demand, sluggish domestic orders, rise in imports and imposition of export duty.

Larger steel players raised list prices of flat products by 1,500 - 2,000/t in the first week of January. The revised prices were in the 55,50056,500 range for HRCs and in 62,500-63,000 for cold rolled coils (CRCs). Reportedly, the increase was absorbed.

India to seek easing of EU steel quotas, tarrifs in trade talks

India will seek an easing of European Union steel import quotas and tarrifs in talks for a new trade deal as Indian steelmakers struggle to sell the alloy in one of world's big markets, a senior government official said.

Last year, India and the EU relaunched negotiations for a free trade agreement with the aim of completing talks by the end of 2023. The two sides previously launched talks in 2007, but they were frozen in 2013 due to a lack of progress.

India's steel and trade ministries did not immediately reply to a Reuters email seeking comment. The EU uses a system of quotas and tariffs to protect its steelmakers. Other than India, the main exporters of steel to the EU are China, Russia, South Korea, Turkey and Ukraine.

As Indian steel mills struggle with raw material supply disruptions triggered by the war in Ukraine, the official said New Delhi was looking at securing the supply of coking coal from new markets such as Mongolia. The Ministry of Steel has also requested The Ministry of Finance to axe coking coal import duty, the official said.

Global steel prices set to stabilise in 2023, says CRISIL Ratings

Global steel prices (free-on-board, China) are set to stabilise in calendar 2023 on-year, after falling over 40% to $570-590 per tonne in December 2022 from the early-April peaks of $1,000 per tonne on tepid steel demand, according to CRISIL Ratings.

Following the global trend, domestic steel prices are expected to soften only a minimal 2-4% on-year (for flat steel) in fiscal 2024, after seeing a decline of over 30% last December from the historical highs of April. Flat steel prices had climbed 25% in just two months at the onset of the conflict between Russia and Ukraine, but cooled off due to a drop in raw material prices, imposition of export duty by the Government of India, and rising stock levels.

However, prices are once again set to turn the corner as steel producers face rising input costs.

A large part of this is because the Indian steel industry imports ~90% of its coking coal requirement, majorly from Australia. While coking coal prices were on a declining trend for majority of this fiscal, short-term volatility was observed in anticipation of supply chain disruptions.