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Vol. XLVIII No. 04 Published on : 28.07.2019
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From the Editor’s Desk
Though number of power pla nts with critical level of coal stock are very limited but supply to this sector by CIL has decline d by 2.6 per cent to 80.9 million tonnes in the first two month s of the ongoing fiscal. This comes amid coal impor ts rising 12.9 % to 235.2 MT in FY 2019 over 208.2 MT impor ted in FY 20 18. Putting pressure on the coal behemoth and railways, Union Government has asked to pri oritize fuel supply to pithead power plants irrespective of their quo ta or contracted quantity to help them run at full capacity and meet peak demand. To compensate the power pro ducers for any short supply of coal for reasons beyond their control, the Ministry of Pow er has approved a methodology which actually follows the dec ision earlier taken by CCEA to hel p the power producers.
Government has also urged rai lways to create provision of adequate number of rakes for dispatch of coal. In a major setback to the selected coal con sumers, huge number of rak es have been cancelled mainly fro m SECL and a few from WC L. Considering the constraints of supply through domestic sou rces, the Government has planned to auction of 41 new coal blo cks to improve the supply situation. In Coal Block Auction Tranch e 8, total 20 coal blocks may be put up for auction, out of wh ich 10 blocks are new addition and balance10 are from Tranche 6. To boost up interest amongst industrial players, Coal Ministr y has allowed sale of 25% coal in case of allocation for specifi ed end use plant. Additional relaxatio n is being provided in efficiency parameters including clubbing of milestones and provision of grace period. Fur ther, Coal Min istry is working on developm ent of single window scheme for faster approvals of clearance s from various central or state agenci es.
To facilitate the success of pro duction of new coal blocks, the Central Government has urg ed the State Government for whole hearted cooperation reg arding land acquisition and oth er statutory compliances includ ing grant of mining lease.
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Content Vol. XLVIII No. 04 July, 2019
06 Consumers’ Page
Official Organ of the Coal Consumers’ Association of India. Disseminates News and Views on Coal and all other sources of Energy. 4, India Exchange Place - 7th Floor Kolkata - 700 001 Landline : +91 33 22304488 / 22621516 E-mail : sec.ccai@gmail.com Website : www.ccai.co.in
08 Power
Editor : Subhasri Nandi
12 Domestic
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.
22 |In Parliament
18 Global
28 |Monthly Summary Of Domestic Coal Monthly Summary Of Imported Coal & 30 | Petcoke
32 |Overall Domestic Coal Scenario 33 |Energy Generation Report CCAI Monthly Newsletter July 2019
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CONSUMERS’ PAGE Present Coal Scenario Coal India has recorded lower coal production by 5.1% at 38.50 mt in July 2019 compared to 40.58 mt in July 2018. Total production for the period of April - July 2019 is 175.46 mt, decreased by 1.1% compared to the same period last year. Coal offtake was down by nearly 2.9 per cent to 46.82 mt in July this year as compared to last year. Total offtake for the period of April-July 2019 was marginally lower by around 0.8 per cent to 200.11 mt against 201.66 mt during the same period last year.
Consumers’ Concern 1. Coal Stock Position Power plants in the country are maintaining healthy coal stock. Hardly any power plant in the country is in critical or supercritical coal stock situation of late. Increased coal supply has reduced the coal crisis for Non-power Sector as well and Railways are trying to clear the arrear position in haste.
ENA(W-III) and Rajapur OCP (W-III) of BCCL, Jampali, Govinda & Churcha Mines and Chirimiri sidings of SECL, Hingula, Garjanbahal & Lajkura Mines and Sardega-Siding & Kanika Siding of MCL, Magadh & Amrapali, Gridih Mines of CCL and Tawa- 1 & Tawa- 2, Chhattarpur- 1 and Neharia Mines of WCL.
2. Coal Quality issues
Consumers have requested the Coal Ministry, Coal Controller, CIL & its Subsidiaries to kindly intervene into the matter so that actual grade of coal may be received as per the contracts from the said sources.
Grade slippages have been observed at DBCP Siding, Bankola-1, Khandra, Kumardihi-A, Tilaboni, Shyamsundarpur, Jhanjra, Madhabpur, Madhabpur-Patch, Jambad OCP, Gourangdi, Bonjemahari, Dabor, Mohanpur, Gourangdi Begunia, Sankurpur and Chitra mines of ECL, Dahibari, Dohibari OCP, Muraidih, Phularitand (WIV),
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3. Request to formulate a suitable methodology and implement the
approval of MoP regarding Nonlapsing of short supplies of coal to Power Plants in the lapsable category Power sector consumers have requested Coal Ministry, Railway Board and CIL for formulation of suitable methodology and implementation of the MoP approval (notice dated 08.03.2019) regarding Non-lapsing of short supplies of coal so that these consumers can maintain safe coal stock level at their plants and eventually be prepared for such difficult situation in future as well.
4. Non-receipt of Referee Analysis Report and reconciliation from CCL & NCL and request for formulation of a suitable policy for all Subsidiaries Consumers procuring coal from CCL & NCL have not received Referee Analysis Reports since long. Though they have already deposited the required amount to the Referee Laboratory for analysing the samples they have challenged but due to non-receipt of analysed reports entire reconciliation procedure is held up at the Subsidiary Coal Companies. Subsidiaries have asserted that they would release the reports shortly. CIL has been requested for formulation of a suitable policy so that such situation does not arise in future.
nadih, New Kusmunda, Gevra, Surakachar, Manikpur, Robertson and Jairamnagar Sidings of SECL as the loading did not commence within stipulated time due to non-availability of coal. Similar situation has arisen in WCL mainly from Wani and Ghugus sidings. Consumers have requested for formulating a suitable policy so that the cancelled rakes are revalidated and seniority of such long awaited rakes do not get lapsed for no fault at the consumers’ end.
7. Non issuance of DOs from SECL causing blockage of working capital Consumers are suffering badly due to pendency of huge quantity of Delivery Orders (DOs) leading to blockage of working capital. Therefore, consumers have requested to release the same as soon as possible or allot the quantity from Secondary source for the desired relief.
8. Non-supply of FSA quantity due to change of coal grade Consumers are facing shortage of coal due to discontinuation of their FSA quantity by the Subsidiary Coal Companies on account of change in coal grade at different mines in FY 2019-20. Subsidiary Coal Companies have been requested not to stop supply of FSA coal quantity of the consumers even after change of grades and the remaining quantity may be delivered with revised grades.
9. Irregularities in movement of 5. Huge backlog in issuance of rakes from Western Coalfields LimCredit notes ited There has been enormous delay in issuance of credit notes mainly due to grade slippage by the Coal Companies and even no confirmation has been received by the consumers in this regard. Early issuance of Credit notes may provide desired relief to the consumers from financial burden.
6. Cancellation of rakes due to nonavailability of coal from SECL & WCL Number of rakes to the industries (including CPPs) are getting cancelled from Dipka, Ju-
To reduce the arrear of pending rakes, non-power sector consumers are compelled to take the quantity almost 100 per cent over and above their respective MSQ while these plants are beyond their capacity of coal stock position. When they approached the authorities, railways had cancelled their rakes to reduce the arrear status without discussing the same with the consumers. Therefore, all cancelled rakes of the respective companies should be indented again and WCL/Central Railways should give timely information about the schedule for movement of rakes to facilitate timely payment of coal value and freight. CCAI Monthly Newsletter July 2019
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POWER No free power, first pay and then Government to pay damages to get electricity, says R K Singh consumers for load sheddings: India is moving towards a new regime where a Power Minister power consumer would pay first and then get power supplies, which would eventually deal with the issue of non-payment in the sector, Union minister R K Singh said.
Union Minster R K Singh said the aim of the Centre is to have “One Nation One Grid” and pay damages to consumers in case of load sheddings.
The minister also made it clear that states can give free power to certain sections of society but they would have to pay for it from their own budget.
The government will soon go ahead with structural reforms to achieve the objective of “One Nation One Grid”, Finance Minister Nirmala Sitharaman had said in her budget speech.
He further said, “Power has a cost and somebody has to pay for it. If you want to give free power then go ahead. But you (states) have to pay for it from your budget. That is what we are going to do.”
The ministry would seek the Union Cabinet’s nod for the power tariff policy in next few days, which would provide for penalty for unscheduled power cuts except in the case of technical faults or act of God (natural calamities), Singh had said on the day of tabling the Union budget.
Elaborating about the non-payment which was one of the main reasons for the stress in the power sector, Singh said, There was a disconnect between sustainability considerations and immediate political considerations in many states.
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Finance Minister Nirmala Sitharaman had announced in the budget that a package for the power sector would soon be brought by the government.
The government intends to provide ‘24X7 Power to All’ at affordable rates. Therefore, there would be a provision in the tariff to cap transmission and distribution losses. Once the tariff policy is approved, the distribution companies would not be allowed to pass on these losses beyond 15 per cent.
Stressed power projects await ministry implementation of Cabinet measures Though the government approved a slew of measures to address the distress of the independent power producers just before the Lok Sabha elections, the industry is still awaiting for the power ministry to formulate concrete plans and procedure to implement them. The Cabinet Committee on Economic Affairs, on March 7, had approved certain recommendations of a group of ministers and a high-level empowered committee on stressed power assets, mainly related to coal supply issues, payment discipline and sanctity of contractual agreements. However, the sector is yet to reap the benefit of the decisions. Following the Cabinet decision, the coal ministry had amended the eligibility norms for the ‘Shakti’ scheme, allowing power plants without power purchase agreements (PPAs) to apply for coal linkages. The Cabinet also allowed power plants to retain their existing coal linkages if PPAs are terminated due to payment default by power distribution companies.
Power players seek policy changes to cut transmission logjam With the power sector undergoing major transitions, the private transmission industry wants the government to initiate a number of policy changes which would give them more flexibility in network planning. The private sector accounted for 41% of total Rs 1.03 lakh crore invested in transmission asset creation since 2011. Industry leaders said in an event that the mandatory government design and technology often
do not leave enough scope of adopting new relevant technologies, which in most cases unduly increase capex, thereby increasing power tariff. According to a white paper recently launched by the Confederation of Indian Industry, the average time taken from the notification of a transmission project to the start of its construction is as many as 760 days. One of the eight suggestions advocated by the white paper was reducing this time by 40% by modifying the procedure of getting forest clearances and easing the bidding process. Since wind and solar plants can be set up much faster than the transmission network to evacuate power from these stations, the time required to set up the lines are much lower than what was warranted by thermal power plants. Recognising the challenge, the government recently identified transmission projects for 66.5 GW of upcoming renewable plants as ‘Projects of National Importance’.
State-owned gencos out of payment security mechanism: Power Ministry State-owned power generating plants would not be covered under the new payment security mechanism which mandates offering a letter of credit by distribution companies to electricity generators, the Union Power Ministry said. The ministry issued the statement after some states sought clarification on the payment mechanism under the power purchase agreements approved by the Centre last month. The payment security mechanism mandates that distribution companies would offer a letter of credit to generating firms as an assurance of payments for the supply of power. The new system would be rolled out from August 1.
Last-minute rush of discoms to meet August 1 deadline for bank guarantees Some state distribution companies are making a last-minute dash to banks for funding ahead CCAI Monthly Newsletter July 2019
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of the Centre’s August 1 deadline, after which they will not get electricity supply unless they provide bank guarantees for payment, but authorities in several states say they are confused about how to go about it. To tame defaulting distribution companies, the Centre had ordered on June 28 that in case discoms do not open or maintain the line of credit in favour of a power plant, the regional load despatch centres will not despatch power to the state. Generating companies will still be paid fixed costs — a key component of the tariff, apart from variable generation costs — but discoms will not even be able to buy from short term markets. Although a state’s own generating unit is exempted from the order, discoms are worried because they need a lot of electricity from central or private plants to fully meet demand. Some discoms are trying to maintain guarantees for short periods of time but both buyers and sellers are confused about how this will help because defaults are known only after a monthly billing cycle is completed. However, a power ministry official said all clarifications have already been made and states are getting prepared. The industry is also worried about states diverting coal and operating own inefficient power plants that are spared from the order.
State discoms open to imported coal cost pass through for Tata project State discoms buying from Tata Power’s 4,000mw Mundra project are in agreement to the plant’s requirement of imported coal cost pass through but have not yet given their formal approvals. A top government official from one of the states said every state was waiting for other states to take the plunge. “There is some hope for the project now. At a recent meeting, we gauged that everyone is interested and exchanged notes,” he said on condition of anonymity. The required approvals have not come from four
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of the five consumer states of the project though it has been seven months that the Supreme Court allowed reopening of the power purchase agreements for fuel cost pass through. At a recent meeting in the Union power ministry, representatives of Haryana, Rajasthan, Punjab and Maharashtra agreed that the 4,000-mw project should be revived in public interest convened at the behest of lender SBI. All the four states said they were examining the proposal. The states will require approvals from respective cabinets. The then power Secretary Ajay Bhalla, who chaired the meeting, asked the states to expedite the formalities to salvage the project.
Uttar Pradesh to invest Rs 20,000 cr in improving power transmission infra The Uttar Pradesh government plans to invest Rs 20,000 crore in five years for improving power transmission, seeking to provide uninterrupted electricity to industries as it aims to become a $1-trillion economy.It’s estimated that the peak hour energy demand in the state will increase by more than 35 per cent from 22,000 megawatt (mw) at present to nearly 30,000 mw by 2024. In 2016, the peak hour power demand was only 16,500 mw. The policy of electrifying all households in the urban and rural areas, coupled with incremental demand is pushing up the power consumption in the state. According to UP energy minister Shrikant Sharma, the government had already increased power transmission capacity 60% from 15,000 mega volt amp (MVA) in 2017 to the current level of 24,000 mva. “We are working on a blueprint based on projected power demand in 2032,” Sharma said at an event on ‘power and renewable energy’, which was organised as part of a foundationlaying ceremony of industrial projects totalling Rs 65,000 crore.
Renewable energy cost in India lowest in Asia Pacific region: Report India has emerged as the market leader with the lowest renewable energy cost in Asia Pacific, according to a report by research and consultancy firm Wood Mackenzie. According to the report, India’s levelised cost of electricity (LCOE) using solar photovoltaic has fallen to USD 38 per megawatt hour (MWh) this year, 14 per cent cheaper than coal-fired power. LCOE represents the average revenue per unit of electricity generated that would be required to recover the costs of building and operating a generating plant during an assumed financial life and duty cycle. Wood Mackenzie research director Alex Whitworth said India is the second-largest power market in Asia Pacific with installed power capacity of 421 gigawatts (GW) and solar capacity in the country is expected to reach 38 GW this year. High-quality solar resources, market scale and competition have pushed solar costs down to half the level seen in many other Asia Pacific countries, he added. The report further said Australia will see solar
costs – which are already competitive against gas power – breaking through the coal-fired power price barrier.
No cut in solar tariff: SECI to APSPDC State-run Solar Energy Corporation (SECI) has refused to lower tariff for 400 MW electricity supplied from a solar park at Galiveedu Mandal in district Kadapa to Andhra Pradesh South Power Distribution Company Ltd (APSPDCL). SECI has also refused to attend a tariff negotiation meeting called by the discom (July 22), as per a letter shot off by the corporation to the APSPDCL earlier this month. The discom had asked SECI to reduce tariff for the 400MW supply to Rs 2.44 per unit from Rs 4.5 fixed earlier. In its letter, SECI stated that the tariff of Rs 4.5 was fixed after a competitive bidding as per provisions of the Electricity Act. It said the tariff of Rs 2.44 per unit was arrived at in a separate auction for a solar project in different circumstances. SECI explained that the tariff cannot be negotiated as the power purchase agreement has been signed. APSPDCL had claimed that no tariff based competitive bidding was held and the tariff fixed was detrimental to public interest
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DOMESTIC Coal India clears over 44% rake CIL and Railways advised to backlog to non-power sector prioritize fuel supply to pithead consumers plants After supplying enough coal to the state-owned power plants in the country, Coal India, in the last three and a half months, accelerated rake loading to the non-power sector consumers, thereby reducing its backlog to this sector by more than 44 per cent. Out of a total dispatch of 33.7 million tonnes (mt) of coal to the non-power sector during April to late July, around 8.75 mt backlog volume was cleared. The total backlog volume to non-power sector is estimated at around 19.38 mt. Out of a backlog of 5,100 rakes, which were committed to the non-power sector, the miner was able to clear 2,300 rakes during the first quarter of the current fiscal year. Company sources estimate that this entire backlog of rake allocation can be cleared in the next 3-4 months. The bulk of non-power consumers constitute captive power plants (CPPs), and the steel and cement sectors besides others.
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The government has asked Coal India Limited (CIL) and the railways to prioritize fuel supply to pithead power plants irrespective of their quota or contracted quantity to help them run at full capacity and meet peak demand. CIL normally supplies a maximum of 90% of the requirement for running a plant at 85% capacity. In peak season, higher demand for coal congests the railways, making it easier to stock up pithead plants. Not all coalfields have enough production to meet the demand of a pithead plant while some mines also cater to other customers. Seventeen plants are located near coal mines. They have a total capacity of 33.18 GW comprising 21% of the total thermal capacity. In April-May this year, 13 out of them ran at 82100% capacity. Their fuel stocks are sufficient for 12 days on average.
Demand has risen with rapid electrification of all villages and the Centre’s Saubhagya scheme, which offers connections to all willing households. The demand is likely to increase further as the government aims to supply uninterrupted power to all, although farmers would get seveneight hours a day. As part of the plan, central and state-owned plants are to be given additional responsibility and facilitated to step up generation to provide uninterrupted power at appropriate price to consumers during the peak demand period. These plants have been asked to maintain plant availability and adequate coal stocks as per the norms. In May, power demand breached last year’s record three months before the demand usually peaks.
Govt. to auction 41 new coal blocks ‘very shortly’ The government plans to auction more than 41 new coal blocks “very shortly”, Union minister Prahlad Joshi said. He told the Lok Sabha that a number of important steps have been taken to augment and monitor coal dispatches to power plants. In 2018-19, all commodities loading by the Indian Railways was 1,223.29 million tonnes, out of which coal loading was 605.82 MT, which is almost 50 per cent, the Coal and Mines minister said. A committee, comprising coal and power secretaries, and Member (Traffic) of Railway Board reviews coal transportation and supply on a regular basis.
The Union ministry of coal is also looking at a proposal to privatise and split Bharat Coking Coal (BCCL) that holds lease to the Jharia coalfields. The lease areas of the Coal India subsidiary could be divided into five to six parts, each held by a different company. Each of these companies could be privatised. The privatisation could take place through a profit-sharing model. The proposal is to ask existing captive mining lease holders, which have not yet started production, to surrender their blocks and pay a penalty of 10 per cent of the bid security.
Captive coal production inches up 2.3% in April-May Coal production from captive mines in the first two months of the ongoing fiscal have increased by 2.3% year-on-year to 4.12 million tonnes (MT) from the corresponding period in FY19. However, as many as 13 of the 29 allocated blocks remain stranded due to local agitations, lack of clearances from the appropriate authorities, inadequate transportation infrastructure and conflicts with mining contractors. Output has increased in 12 coal blocks, which includes three mines which were not producing any coal in April-May 2018. The 29 coal blocks comprise 13 auctioned and 16 allotted mines to government companies. Production in four captive coal mines—allocated to Hindalco Industries, Rajasthan Rajya Vidyut Utpadan Nigam (two blocks), Jaiprakash Power Ventures and NTPC — have actually dipped in these two months.
Coal mine auctioning may be Demand to raise royalty on coal restricted to commercial use to in Rajya Sabha Demands to raise royalty on coal, roll back of boost output With miners, which took coal blocks for own use, performing poorly, the government is planning not to auction mines to captive users. Instead, it will allot or auction rights only for commercial use of coal. The allocation would be decided based on the production plan and revenue share to the government.
steep hike in airfares between Kerala and Gulf region and government intervention to help release fishermen captured by Pakistan were among issues raised during the Zero Hour in Rajya Sabha. Amar Patnaik (BJD) said the rate of royalty paid to state governments on coal produced in states was last changed in April 2012 and as per rule was due to be revised in CCAI Monthly Newsletter July 2019
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April 2015 but was not done. The issue was placed before the GST Council but is yet to be approved, he said, adding instead a cess was imposed which goes to indivisible pool that is not devolved to states. He demanded that royalty on coal should be raised to 20 per cent from the current 12 per cent. K K Ragesh (CPM) demanded roll back in steep hike in airfares in the Kerala-Gulf sector which, he said, was“loot” by airlines by exploiting migrant workers.
21 States have framed rules to curb illegal mining: Minister Twenty one States, including mineral-rich Jharkhand and West Bengal, have framed rules to check illegal mining, Parliament was informed. “As per information provided by the Indian Bureau of Mines, 21 State governments... have framed rules to curb illegal mining under Section 23C of the MMDR Act, 1957,” Coal and Mines Minister Pralhad Joshi said in a written reply in the Lok Sabha. State governments, he said, are empowered to make rules for the prevention of illegal mining, transportation and storage of major and minor minerals, the Minister said. In fiscal 2018-19, there were 1.1 lakh cases of illegal mining for both major and minor minerals.
STEEL
India’s crude steel output grows this much in June India’s crude steel output rose by 4 per cent to 9.336 million tonne (MT) in June 2019 compared to the year-ago month, according to the World Steel Association. The country had produced 8.976 MT of crude steel in June 2018, the global steel body said in its report. Global steel production increased by 4.6 per cent to 158.978 MT in June 2019 compared to 152.002 MT in June 2018, it said. China’s crude steel production for June 2019 was at 87.533 MT, an increase of 10 per cent compared to 79.585 MT in June 2018. Japan produced 8.789 MT of crude steel in June
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2019 compared to 8.750 MT in June 2018. South Korea’s crude steel production was 5.958 MT in June 2019 as against 6.116 MT in June 2018. The US produced 7.3 MT of crude steel in June 2019, an increase of 3.1 per cent compared to June 2018. In the EU, Germany’s production was at 3.4 MT, Italy’s at 2.1 MT, France’s at 1.3 MT while Spain produced 1.2 MT in June this year. In June, while Brazil and Turkey produced 2.8 MT and 2.7 MT, respectively, the crude steel production in Ukraine was at 1.7 MT the said month.
Government support must for competitive steel industry In a deregulated economy, the commodities prices are based on interplay of demand and supply forces. In the present market structure indicating a veiled similarity of actions by the major players prompted by the market activities, the need for policy intervention by the government remains strong. Irrespective of the economic stages the country is passing through, public investment, popularly termed as stimulus measures have been and continue to be announced by the respective governments. In some of the major steel producing countries, namely, China, USA, Japan, South Korea, Russia, Germany, Turkey, Vietnam, the state intervention is not only confined to providing budgetary support to the infrastructure binge being undertaken by these countries, these also include adopting suitable trade measures against surge in imports from countries abroad and announcement of other policy measures aimed to promote the domestic manufacturing capabilities. These trends have become inseparable engines of growth perspective of all the countries characterised by dominant share of manufacturing and industry. The positive encouragements to the industry sector are guided by concern of employment and income growth, improvement in logistic chain culminating in balanced regional growth, the critical factor in eliminating income disparity.
CCAI Monthly Newsletter July 2019
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No control over steel price: Government The government has no control over the steel price but keeps a tab on it to ensure there is no monopoly on trading of the metal, Union Steel Minister Dharmendra Pradhan said in the Lok Sabha. Pradhan said steel is a free commodity and it is being imported too. “The government has no control over steel price. Our role is to see that there is no monopoly in steel trade. The price is determined by market demands,” he said during the Question Hour. The minister said steel is a deregulated sector and the matters of procurements, operations, sales, marketing and investments etc., are taken by companies concerned based on commercial considerations, market dynamics, etc.
meeting, Sajjan Jindal, chairman and managing director, said the company is in the midst of a large organic growth programme to expand capacity from 18 to 24 MPTA (million tonne per annum) by 2020-2021. With the Vijayangar capacity upgradation project, JSW Steel will increase capacity from 12 MTPA to 13 MTPA. The expansion project in Dolvi, which is currently underway, will increase the capacity from 5 MPTA to 10 MPTA. These will result in an increase of JSW Steel’s overall steel making capacity from 18 MTPA to 24 MTPA. The company has also expanded its domestic retail presence with over 9,500 direct and indirect outlets.
CEMENT
Cement firms use waste in fuel SAIL gets nod to manufacture mix as they look to rejig their special shipbuilding grade plates sourcing State-run steel maker SAIL said it has got approval from the Indian Register of Shipping (IRS) to manufacture special shipbuilding grade plates. The plates will be used for making diving support vessels (DSV) used by the India Navy, the Steel Authority of India Ltd (SAIL) said in a statement. “The plates will be supplied to Hindustan Shipyard Limited for making the vessels. Such vessels are used the Navy for search, rescue and repair of undersea submarines and other vessels/structures,” SAIL said. The certification requires stringent monitoring and review of the entire systems from steelmaking to testing, it said.
JSW Steel plans to hike domestic capacity to 45 MT by 2030 JSW Steel is looking to increase the domestic capacity to 45 million tonne by 2030, with a global capacity footprint of 10 million tonne over the same time period. Addressing shareholders at the company’s 25th annual general
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The fuel mix of cement manufacturers is going through a churn. The last decade saw cement companies partially substitute coal with pet coke. However, the fuel mix now includes plastics and tyres, as companies look to rejig their sourcing. “Our fuel mix currently comprises alternative fuels at 7 per cent. According to Geocycle (a waste management solution), the estimated amount in the long-term will be 13 per cent,” an official from Ambuja Cements had said last month. The company has adopted Geocycle as a coprocessing technique for industrial and other wastes at its kilns. Co-processing refers to the use of waste materials in industrial processes as alternative fuel or raw material. Due to the high temperature in the cement kiln, different types of wastes can be effectively disposed of without harmful emissions, according to the Central Pollution Control Board. Others like UltraTech, Nirma’s Nuvoco, JK Lakshmi and Madras Cement, are among companies which are burning waste ranging from tyre chips, rubber dust to rice husk and cashew nut shells in their kilns to generate heat.
GLOBAL Eskom needs more support from South African coal miners Canyon coal executive chairman, Vuslat Bayoglu made the case for improved relations between South Africa’s coal producers and Eskom, the debt-laden power utility. Previously a critic of Eskom’s preference for closed contracts, Bayoglu told a coal mining conference in Johannesburg that coal miners “needed to support Eskom”. “It is easy to blame Eskom for its past failings, but the reality is that we, as coal miners, need to support Eskom,” said Bayoglu. “We can do so by providing it with the correct quality coal at a cheap price,” he said. “Selling coal to Eskom at inflated prices is selfdefeating as it has serious negative financial consequences for the utility, and the South African economy broadly,” he added.None of Canyon Coal’s operations supply Eskom, but the company is part of a consortium – Sibambene Coal – that is thought to have been shortlisted for coal mines that South32 wants to sell. A portion of South32’s 27 million tons a year (Mt/y)
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to 30Mt/y South African coal production is supplied to Eskom.
China’s benchmark power coal price remains flat The Bohai-Rim Steam-Coal Price Index, a gauge of coal prices in northern China’s major ports, stood at 577 yuan (about 84 U.S. dollars) per tonne, according to Qinhuangdao Ocean Shipping Coal Trading Market Co. Ltd. Analysts said coal prices showed signs of stabilizing as the downward pressure weakened. The hot summer weather has been driving up coal consumption at power plants, with the stockpiles equaling to less than 24 days of consumption and thus limiting the coal price declines, analysts said. Meanwhile, there are market expectations of policy restraint on coal imports in the second half after imports in the first half far exceeded the amount a year earlier.
Bangladesh wants Australia’s coal for new power stations
Bangladesh is urging Australia to take advantage of an “enormous opportunity” to export coal and liquefied natural gas to the developing country, which is experiencing surging demand for the fossil fuels.The country of about 165 million people has a slew of coal-fired power stations coming online over the next five years and will be importing about 45 million tonnes of coal by 2025, worth a predicted $4 billion to $5 billion annually. “There is enormous opportunity for export of Australian coal and LNG to Bangladesh given Bangladesh’s sustained energy demand,” the Bangladesh high commissioner to Australia, Sufiur Rahman, said. “If these are added to the traditional traded items, Bangladesh could emerge as a major trading partner of Australia soon.”Mr Rahman called for a greater policy focus from the Australian government on the export opportunity and stronger private sector relationships to facilitate the trade. According to figures provided by the Bangladeshi high commission, about 40 million tonnes of the country’s predicted demand in 2025 will be for thermal coal while 5 million will be coking coal, used in steel production.Bangladesh currently sources the bulk of its coal from Indonesia, South Africa and India but Australia is seen as a supplier of a high-quality, efficient product. The Bangladeshi market could present a valuable opportunity for the coal industry as exports to China falter. The Chinese government has been subjecting Australian coal to tighter import restrictions, with some analysts fearing political tensions between Beijing and Canberra are to blame.Australia’s coal exports were worth almost $70 billion in 2018-19, with Japan, China and South Korea the major destinations. The growing demand for coal in Bangladesh is also notable given the country is among the most vulnerable to the effects of global warming.
Retirements of U.S. coal-fired power plants continue but slow slightly
Energy companies plan to retire another 17 gigawatts of coal-fired capacity in the United States by 2025, according to the U.S. Energy Information Administration.Among the planned retirements is the Bruce Mansfield Plant in Shippingport, Beaver County, in June 2021. FirstEnergy Solutions, a subsidiary of Akron-based FirstEnergy Corp., announced the closing at the same time it announced the potential closing of the Beaver Valley Power Station, a neighboring nuclear power plant. However, FirstEnergy said it will defer its closing of the W.H. Sammis Plant in Stratton, Ohio, about 22 miles downriver from Bruce Mansfield. The Sammis deactivation, originally scheduled for 2022, will be rescinded in light of Ohio Gov. Mike DeWine’s signing last week of a coal and nuclear bailout bill. Coal-fired power plants in the United States remain under significant economic pressure, according to EIA, and many plant owners have retired their coal-fired units because of increased competition from natural gas and renewables. The annual number of retired U.S. coal units has declined since 2015, EIA said.
The disappearing case for coal in the US Coal supplied half of the total US power genera-
tion as recently as 2008, but after a decade of retirements now accounts for just a bit more than a quarter. A long wave of plant closures was driven by a mix of factors including the rise of natural gas, combined wind and solar, some policy tightening and pit depletion. Most observers have long believed that a smaller, leaner coal industry would emerge by now; largely safe, and economically viable. But a string of recent reports suggests that even younger coal plants may succumb to closure. Eric Gimon is a senior fellow at EnergyInnovation.org in San Francisco and is a co-author of The Coal Cost Crossover (March, 2019), which finds that as much as three-quarters of the remaining coal industry could be replaced with CCAI Monthly Newsletter July 2019
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wind and solar, while delivering savings to customers. The calculation can be hard for many to accept, given the associated closure and newbuild costs. However, he notes that the running costs of coal plant could ultimately be greater than building an alternatively fueled alternative. .Petroleum,
natural gas, and coal continue to dominate U.S. energy consumption
Fossil fuels—petroleum, natural gas, and coal— have accounted for at least 80% of energy consumption in the United States for well over a century. Overall energy consumption in the United States reached a record high in 2018 at 101 quadrillion British thermal units (Btu), of which more than 81 quadrillion Btu were from fossil fuels. Despite the increase, the fossil fuel share of total U.S. energy consumption in 2018 increased only slightly from 2017 and was the second-lowest share since 1902. The increase in fossil fuel consumption in 2018 was driven by increases in petroleum and natural gas consumption. Coal consumption fell by 4.3% in 2018, the fifth consecutive annual decline. U.S. consumption of coal peaked in 2005 and has declined nearly 42% since then. U.S. coal consumption fell to 687 million short tons in 2018, the lowest level of coal consumption in the United States since the 1970s. Natural gas consumption increased in 2018, reaching a new record consumption level of 82.1 billion cubic feet per day. Natural gas consumption has increased in 8 of the past 10 years. Growth in natural gas consumption has largely been driven by increased consumption in the electric power sector. Overall, U.S. consumption of natural gas has increased by 37% since 2005.
Record coal exports continues to drive Queensland economy Queensland has set a record in metallurgical and thermal coal exports in June with 21.43 million tonnes of the commodity sent from the state. The result represents an 11 per cent increase
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on the same month last year, highlighting the increase in demand from world markets for Queensland’s coal. It has contributed to the state’s exports from all resources totalling over $70 billion for the 12 months to May this year for the first time. Queensland resources sector exports, including coal, minerals and gas, are worth over $190 million every day, highlighting the importance of the industry to the Australian economy, according to Queensland Resources Council (QRC) chief executive Ian Macfarlane. “Queensland’s coal is the commodity of choice with our high quality thermal coal needed to power high efficient, low emissions coal-fired power plants in Asia and our metallurgical coal used to make steel is building the bridges and skyscrapers in modern cities,” he said.
Coal Demand Rises, But Remains Below Peak Levels This article is the third in a series on BP’s recently-released Statistical Review of World Energy 2019. The Review provides a comprehensive picture of supply and demand for major energy sources on a country-level basis. In the first article of the series, I discussed the trends in global carbon dioxide emissions. In the second article, I went over the supply and demand picture for petroleum. I want to cover the production and consumption of coal. The previous article on carbon dioxide emissions noted that the world is at an all-time high for carbon emissions. The biggest culprit is global consumption of coal, which is being largely driven by development in the Asia Pacific region. In 2018, global coal consumption rose for the second straight year, but remains about 2.5% below the peak level in 2013. Asia Pacific coal consumption did reach a new all-time high, but con-
sumption growth there has sharply slowed from the torrid pace of 2000-2010.
With Best Compliments From:
Sharda Ma
( )
COAL MERCHANTS, IMPORTERS & HANDLING AGENTS INDIA SOUTH AFRICA INDONESIA SINGAPORE HONG KONG NIGERIA
UGF 1& 2, Kanchenjunga Building, 18 Barakhamba Road, New Delhi-110001, India P : +91 11 23354046/47 F : +91-11-23354047 E : corporate@shardamaa.com W : www.shardamaa.com
IN PARLIAMENT GOVT. OF INDIA MINISTRY OF COAL LOK SABHA Q. No. 248. TRANSPORTATION OF COAL 10.07.2019 SHRI SUNIL KUMAR SINGH: Will the Minister of RAILWAYS be pleased to state: (a) the details of the railway freight charges for transportation of coal in the country along with the names of railway stations in the country including Jharkhand where siding facility has been provided for transportation of coal;
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(b) whether the Government is aware that local residents of certain cities are facing difficulties due to fly ash during transportation of coal from the railway station located adjacent to these cities and if so, the details thereof; (c) the details of steps being taken by the Government to shift the work of transportation of coal from the said railway stations to some other stations; and
(d) whether the Government has received any complaints of corruption in the railways relating to transportation of coal, if so, the details thereof and the action taken by the Government on the said complaints?
ANSWER MINISTER OF RAILWAYS AND COMMERCE & INDUSTRY (SHRI PIYUSH GOYAL) (a) to (d) A Statement is laid on the Table of the House. STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (d) OF STARRED QUESTION NO.248 BY SHRI SUNIL KUMAR SINGH TO BE ANSWERED IN LOK SABHA ON 10.07.2019 REGARDING TRANSPORTATION OF COAL (a) The latest freight rates for Coal & Coke are published in Goods Tariff No.49, Part-I (Vol.II) & Part II and the same is available at Indian Railway official website http://www.indianrailways. gov.in/railwayboard/uploads/directorate/traffic_comm/GOODS%20TARIFF%20NO_49%20 %20PART%20I%20VOL_PART%20-%20II_ Rev_120219.pdf. Freight is charged according to distance-slabs. The tariff is uniform throughout the country. There are 3490 number of sidings and railway goods sheds currently open for handling of coal traffic in the country, including 317 sidings and railway goods sheds in Jharkhand. However, during 2018-19, loading was done from only 668 sidings and railway goods sheds, including 104 in State of Jharkhand. List of Coal sidings and railway goods sheds are available at Indian Railway official website http://www. indianrailways.gov.in/railwayboard/uploads/ directorate/traffic_comm/downloads/Freight_ Rate_2019/List_Coal_Siding_090719.pdf (b) Fly ash is not transported in loose condition by rail and, therefore, there is no pollution during the transportation by rail. However, as far as coal is concerned, by and large, the loading & unloading points are mostly situated away from the residential areas. However Railways have taken a series of measures to control pollution. Detailed guidelines have been issued to Zonal
Railways, whereby ‘consent to establish’ for new sidings and railway goods sheds and ‘consent to operate’ for the existing sidings is required to be obtained from respective State Pollution Control Board (SPCB), in accordance with the provisions of Pollution Act. Measures to control pollution include water sprinkling systems, adequate green cover and dust screen walls along periphery of premises. (c) In cases where complaints have been received regarding pollution due to coal dust, Railway Administration have either enforced pollution control measures or shifted/closed the coal handling points. Details are appended. (d) No, Sir. APPENDIX REFERRED TO IN REPLY TO PART (c) OF STARRED QUESTION NO.248 BY SHRI SUNIL KUMAR SINGH TO BE ANSWERED IN LOK SABHA ON 10.07.2019 REGARDING TRANSPORTATION OF COAL Action Taken by Zonal Railway for shifting/closure of coal handling points 1. Western Railway: Restriction for coal handling at Chaltan Goods shed was received from Gujarat Control Pollution Board. The same has been closed for handling of traffic of coal. 2. South Western Railway: Due to public protests by the residents of the town of Vasco, the Goa Pollution Control Board imposed restriction for loading of coal during the year 2018-19. On satisfactory compliance by Mormugao Port Trust authorities with the stipulations of Pollution Control Board, loading of coal had been suspended, and since resumed subject to strict precautions to avoid coal dust pollution, including covering of wagons by tarpaulins. 3. Northern Railway: A notice was served to M/s Nabha Power Ltd./Rajpura by Pollution Control Board due to pollution on account of unloading of coal at Mandi Gobindgarh. The coal handling was withdrawn from Mandi Gobindgarh to their own siding in power house. In respect of unloading of coal at Ayodhya, the residents of nearby locality filed a writ petition in Hon’ble High Court who ordered that water sprinkling may be done regularly during unloading of coal. The orders CCAI Monthly Newsletter July 2019
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are being strictly followed. 4. South East Central Railway: Resident near Uslapur Public Siding complained regarding pollution, hence, this public siding has been closed.
Q. No. 2739. Demand and Supply of Coal 10.07.2019 SHRI JANARDAN SINGH SIGRIWAL: DR. NISHIKANT DUBEY: Will the Minister of COAL be pleased to state: (a) the details of demand and supply of coal in the country; (b) whether there is huge gap between demand and supply of coal in the country and domestic supply of coal is facing shortfall; (c) if so, the details thereof and the reasons therefor; (d) whether the Government has any plan to tackle the situation and discourage imports in this regard; and (e) if so, the details thereof and if not, the reasons therefor?
ANSWER MINISTER OF PARLIAMENTARY AFFAIRS, COAL AND MINES (SHRI PRALHAD JOSHI) (a) to (c): Demand of coal is higher than the current level of supply of coal in country. During the year 2018-19, as against a total actual demand of coal of 969.46 MT, the domestic supply was 734.23 MT (Provisional) and coal import was 235.24 MT (Provisional). Coal is imported to bridge the gap between domestic demand and domestic supply. As per coal import policy, the import of coal has been kept under Open General License (OGL) and users are free to import coal from the sources of their choice as per their contractual prices on payment of applicable duty. It may be mentioned that in India,
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the supply of high quality coal (low-ash coal)/ Coking coal is limited. Therefore, to bridge this demand-supply gap, there is no option but to resort to import of low-ash coal. Superior quality non-coking coal is imported mainly by imported coal based power plants and other industrial users viz., paper, sponge iron, cements and captive power plants, on consideration of transport logistics, commercial prudence, export entitlements and inadequate availability of such superior coal from indigenous sources. (d) to (e): There has been a consistent effort to increase domestic coal production. The all India raw coal production has increased from 565.77 MT in 2013-14 to 730.35 MT (Provisional) in 2018-19. Absolute increase in all India coal production from 2013-14 to 2018-19 is 164.58 MT as compared to an increase of coal production of 73.01 MT between 2008-09 and 2013-14. During the current year 2019-20 (April-Jun 2019), all India coal production was 169.09 MT with a growth rate of 2.4%. In order to augment supply, a total of 84 coal blocks has been allotted under Coal Mines (Special Provision Act, 2015) so far. Further, the focus of the Government is on increasing the domestic production of coal which includes pursuing with State Government for assistance in land acquisition and coordinated efforts with Railways for movement of coal. In addition, to maximize the use of indigenous coal, the following steps are taken/being taken for promotion of import substitution through the following steps: Source rationalization with part supply from higher grade coal sources. More coal from various sources including higher grade were offered through various types of e-auction schemes particularly special forward e-auction for power consumers, not having Fuel supply Agreement (FSA) with CIL sources. The provisions of SHAKTI policy of the Government of India for meeting the demand of various categories of power utilities are being implemented.
Supply of additional coal to power plants to meet the shortfall within the Annual Contracted Quantity (ACQ). Implementation of Linkage auction for nonregulated sectors
(b) the views of the World Coal Association in this regard; (c) whether the coal production in India is lesser in comparison to the coal production in China; (d) if so, the details thereof; and
Spot E-auction – For any Indian buyer (consumers & Traders) suitable for short-term planning
(e) the reasons for the shortfall in coal production in India thereby failing to meet the demand of coal in the country?
Exclusive E-auction -- exclusively for the nonpower consumers (including Captive Power Plant (CPPs)) suitable for medium term planning.
ANSWER
Streamlining environment clearances & forestry clearances process to expedite operationalization of coal blocks.
Q. No. 2769. Coal Reserves 10.07.2019 SHRI JAGDAMBIKA PAL: SHRI GAUTAM GAMBHIR: Will the MINISTER OF COAL be pleased to state: (a) whether the quantum of coal reserves in the country has been assessed and found to be the same as that of the coal reserves in China and if so, the details thereof;
MINISTER OF PARLIAMENTARY AFFAIRS, COAL AND MINES (SHRI PRALHAD JOSHI) (a) & (b): The total estimated coal resources in India is 319.02 billion tonnes (Bt) out of which 148.789 Bt is in Proved category as on 1.4.2018 as assessed by the Geological Survey of India. Data on coal resource of China is not maintained in Ministry of Coal. World Coal Association has not shared its views with Ministry of Coal. (c) & (d): As compared in the report of International Energy Agency, raw coal production in India and China during 2017 was 676.479 million tonnes and 3158.630 million tonnes respectively. (e): Despite the efforts made by coal sector, there is a shortfall in coal production due to reasons like problems in land acquisition owing to unclear land records, physical possession of land, rehabilitation and resettlement issues, evacuation and logistics constraints and Law & Order problem in coalfield areas.
CCAI Monthly Newsletter July 2019
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RAJYA SABHA Q. No. 1576. Subsidiaries of Q. No. 1574. Challenges 08.07.2019 before CIL to ramp up pro- CIL duction 08.07.2019 SHRI A.K.SELVARAJ: SHRI A. K. SELVARAJ:
Will the Minister of COAL be pleased to state:
Will the Minister of COAL be pleased to state:
(a) whether it is a fact that Coal India Limited (CIL) is chasing a target of 660 million tonne stipulated in MoU;
(a) whether it is a fact that land acquisition environmental and forestry clearances, law and order situation and Resettlement and Rehabilitation (R&R) issues are major challenges to ramp up production by Coal India Limited (CIL); (b) if so, the details thereof, (c) whether it is also a fact that Coal India Limited is also beset with evacuation issues; and (d) if so, the details thereof?
ANSWER MINISTER OF PARLIAMENTARY AFFAIRS, COAL AND MINES (SHRI PRALHAD JOSHI) (a) & (b): Coal India Limited (CIL) has apprised to achieve 880 MT production by 2023-24 subject to major enabling conditions/constraints such as physical possessions of land, timely grant of forestry clearances, law & order situation in command areas of Bharat Coking Coal Limited, Central Coalfields Limited & Mahanadi Coalfields Limited and Rehabilitation & Resettlement issues across all subsidiaries of CIL. (c) & (d): Major coal reserves of CIL are in Greenfield areas where CIL is usually the sole stakeholder. These areas are bereft of any evacuation infrastructure. Hence, in order to establish an effective outlet of the coal produced, CIL has collaborated with the Indian Railways and its subsidiaries to undertake construction of railway lines in the State of Jharkhand, Odisha and Chhattisgarh.
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(b) whether it is also a fact that many subsidiaries of CIL have taken measures to keep production during the monsoon months on an even level; (c) whether it is also a fact that CIL is facing problem in some of its subsidiary companies; and (d) if so, the details thereof?
ANSWER MINISTER OF PARLIAMENTARY AFFAIRS, COAL AND MINES (SHRI PRALHAD JOSHI) (a): Yes, Sir. (b): Yes, Sir. Subsidiaries of Coal India Limited (CIL) have taken following initiatives for ensuring desired production on an even level during the monsoon months: ďƒ• Major monsoon activities such as preparation of sump of adequate capacity, cutting of garland drain around the periphery of mine to prevent inrush of water from outside mine boundary, cleaning of internal drains and approach road to pump/sumps. ďƒ• Installation of pumps of desired capacity, where essential in Opencast (OC) mines pumps have been installed over pontoons for smooth operation of pumps, laying of pipeline range, maintenance of Over Head (O/H) line & electrical appliances.
Major civil works/activities such as Haul road & Coal Transportation road repairing, Laying of Hume pipes as per requirement, cleaning of sidings & weighbridges on a regular basis during monsoon. Establishment of Control rooms at company HQ, as well as in all areas and units to function round the clock to deal with any eventuality arising during monsoon. Ensuring 100% availability of Road and Rail Weight Bridges. (c) & (d): Some subsidiary companies of CIL are facing problems which include Land acquisition, Physical possession of land, Rehabilitation & Resettlement (R&R), Encroachers, Forestry Clearance, Environmental Clearance , Evacuation & logistics constraints, Law & Order problem etc.
Q. No. 1577. Shortage in production of coal 08.07.2019 SHRI SANJAY SINGH: Will the Minister of COAL be pleased to state: (a) whether it is a fact that the production of coal in financial Year 2018- 19 has been recorded at 606.89 MT which is around 3MT short of its planned production target of 610MT; (b) if so, the reasons therefor; (c) whether it is also a fact that the production was 92MT in the first quarter of financial year 2019-20 as well as production was negative in the months of April and May; and (d) if so, action plan of Ministry to achieve the envisaged production target of 660MT in financial year 2019-20?
Answer MINISTER OF PARLIAMENTARY AFFAIRS, COAL AND MINES (SHRI PRALHAD JOSHI) (a): Coal India Limited (CIL) produced 606.89 Million Tonne (MT) (Provisional) against the target of 610 MT in financial year 2018-19 which is short by around 3 MT of the production target of 610 MT. (b): The major reasons for short fall in production of CIL are Land acquisition, Physical possession of land, Rehabilitation & Resettlement (R&R) issues, Encroachers, Forestry Clearance, Environmental Clearance, Evacuation & logistics constraints, Law & Order problems etc. (c): CIL produced 91.88 MT of coal during the month April – May 2019 compared to 91.98 MT in the corresponding period of previous year showing a negative growth of 0.1% (d): The Ministry of Coal has fixed the target of coal production at 660 MT by CIL for 2019-20. To achieve this target, the focus of the Government is on pursuing with State Government for assistance in land acquisition and law and order issues and coordinated efforts with Railways for movement of coal. In addition CIL has taken the following steps to increase domestic coal production: CIL and its subsidiaries are going for higher capacity mega mines (Capacities > 10 MTY) with high mechanization. CIL has already introduced state of the art technology to improve its work efficiency. High capacity Heavy Earth Moving Machinery (HEMMs) like 42 cum Shovel with 240 T Rear Dumper have been introduced for this purpose. Surface Miners have been introduced in opencast mines in a big way to improve operational efficiency & to cater environmental needs by CIL. During 18-19, in CIL, around 50% of the opencast coal production wasthrough Surface miners and is likely to further increase in subsequent years.
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MONTHLY SUMMARY OF DOMESTIC COAL Comparative Price of Domestic Coal: Power/Non-power. *The price shown in the Chart below is without: (a) Surface Transportation Charges. (b) State specific taxes. (c) Coal company or area wise charges if any. (d) Evacuation Facility Charges INR 50 per tonne w.e.f. 00:00 of 20.12.2017 GCV (Kcal/kg) (Mid-value)
G3-6400-6700
G5-5800-6100
G7-5200-5500
G10-4300-4600
G11-4000-4300
G12-3700-4000
Basic ROM price (Rs./te)
3144/ 3144
2737/2737
1926/2311
1024/1228
955/1145
886/1063
Tentative Ex-Mine Price*
4447/4447
3941/3941
2932/3411
1809/2063
1724/1959
1638/1858
coal
The government has asked Coal India Limited (CIL) and the railways to prioritize fuel supply to pithead power plants irrespective of their quota or contracted quantity to help them run at full capacity and meet peak demand. CIL normally supplies a maximum of 90% of the requirement for running a plant at 85% capacity. In peak season, higher demand for coal congests the railways, making it easier to stock up pithead plants. The government plans to auction more than 41 new coal blocks “very shortly�, Union minister Prahlad Joshi said. He told the Lok Sabha that a number of important steps have been taken to augment and monitor coal dispatches to power plants. In 2018-19, all commodities loading by the Indian Railways was 1,223.29 million tonnes, out of which coal loading was 605.82 MT, which is almost 50 percent, the Coal and Mines minister said. Coal India clears over 44% rake backlog to non-power sector consumers After supplying enough coal to the state-owned power plants in the country, Coal India, in the last three and a half months, accelerated rake loading to the non-power sector consumers, thereby reducing its backlog to this sector by more than 44 percent. Out of a total dispatch of 33.7 million tonnes (mt) of coal to the non-power sector during April to late July, around 8.75 mt backlog volume was cleared. The total backlog volume to non-power sector is estimated at around 19.38 mt
power Power companies will mandatorily have to snap supplies to state electricity distribution companies that fail to open or maintain bank guarantees with effect from August 1. Financially weaker distribution companies can open letters of credit for even one day, one week or a fortnight of electricity supply and keep renewing them, said the order issued by the power ministry. It seeks to curb addition to the outstanding bills of Rs 41,747 crore by discoms. Nonpayment of dues by discoms is one of the key reasons for stress in the power sector. State-owned power generating plants would not be covered under the new payment security mechanism which mandates offering a letter of credit by distribution companies to electricity generators, the Union Power Ministry said. The ministry issued the statement after some
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states sought clarification on the payment mechanism under the power purchase agreements approved by the Centre last month.
CEMENT
Cement sales muted in Apr-Jun. After robust growth in the second half of the financial year 2018-19, the cement sector is likely to have seen subdued growth in Apr-Jun quarter on account of muted demand, and Lok Sabha election 2019 may be a reason for it. The slowdown in government spending, labour scarcity, decreased water supply and lack of private capital expenditure are key factors for soft demand, according to analysts. The Indian cement industry is the second largest cement producer in the world. The Government of India is focussing on developing affordable housing. However, due to high GST rate of 28%, the cement industry is not being able to work on low economies of scale resulting in a higher cost for the affordable housing sector. The government should take serious note of reducing the GST rate from 28% to 18% to boost the cement industry which would provide an ultimate boost to the infrastructure and housing sectors.
steel The government has estimated the country’s steel output to hit 128.6 million tonne (MT) by 2021 and consumption of the same to reach 140 MT by 2023, on the back of investments in infrastructure, construction and automobile sectors, according to the Economic Survey 201819. Crude steel production in 2018-19 stood at 106.56 MT, a growth 3.3 per cent over 103.13 MT in 2017-18, said the Survey, tabled by Finance Minister Nirmala Sitharaman in Parliament. The government has no control over the steel price but keeps a tab on it to ensure there is no monopoly on trading of the metal, Union Steel Minister Dharmendra Pradhan said in the Lok Sabha. Pradhan said steel is a free commodity and it is being imported too. The minister said steel is a deregulated sector and the matters of procurements, operations, sales, marketing and investments etc., are taken by companies concerned based on commercial considerations, market dynamics, etc. JSW Steel said its crude steel output grew 3 percent to 4.24 million tonne (MT) in the quarter ended June 30. The Sajjan Jindal-led company had produced 4.12 MT during the corresponding period a year ago. During the April-June 2019 period, the company said its production of flatrolled products grew marginally by 1 percent. Domestic steel giant Tata Steel said its consolidated steel production rose by 9.18 percent to 7.61 million tonnes (MT) in the first quarter of the current fiscal. The company’s output in the year-ago period was at 6.97 MT, Tata Steel Ltd said in a BSE filing. During April-June 2019, Tata Steel India produced 4.37 MT as against 3.64 MT in the same quarter a year ago. State-owned SAIL said it supplied special-quality stainless steel from its Salem Steel Plant for the country’s moon mission Chandrayaan-2. “Steel Authority of India Ltd (SAIL) has supplied special-quality stainless steel from its Salem Steel Plant for India’s moon mission Chandrayaan-2 meeting the ISRO’s requirements for stringent specifications, superior surface finish and close tolerances,” SAIL said in a statement. CCAI Monthly Newsletter July 2019
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MONTHLY SUMMARY OF IMPORTED COAL & PETCOKE Coal Price Index COAL
(kcal/kg)
Monthly Price - FOB
Monthly Price - FOB
Monthly Change (USD)
South Africa South Africa Australia Indonesia Indonesia USA
6000 NAR 5500 NAR 5500 NAR 5000 GAR 4200 GAR 6900 NAR
USD 65.29 USD 53.90 USD 53.37 USD 49.16 USD 35.34 USD 51.74
INR 4487 INR 3704 INR 3667 INR 3378 INR 2428 INR 3555
3.03 3.48 0.13 -0.64 -0.35 -1.97
PET COKE
Sulphur
India-RIL(Ex-Ref.) Saudi Arabia (CIF) USA (CIF)
-5% + 8.5% - 6.5%
Price INR 7100 INR 5515 ($80) INR 5669 ($83)
Exchange Rate
Change (Monthly)
USD/INR 68.718
-0.72
Coking Coal Price: Semi Soft
Low Vol PCI
Mid Tier PCI
FOB Aus
Premium Low Vol CFR China
FOB Aus
HCC 64 MID Vol CFR China
FOB Aus
FOB Aus
FOB Aus
CFR India
FOB N China
183.13
191.88
170.74
183.94
89.46
114.27
111.74
307.75
305.63
South Africa: * Coal critical to enabling South Africa’s stability and growth. High input costs to power generation, including coal, ultimately cause higher electricity prices which is detrimental to South Africa’s economy, says Menar MD, Vuslat Bayoglu. He was speaking during a panel discussion on how the sector can assist Eskom in resolving its power generation challenges at the inaugural Coal Industry Day in Johannesburg.
Australia: * * Australia’s exports of coking coal to Europe increased in May, on the back of higher volumes shipped to Belgium, data from the Australian Bureau of Statistics show. Australia shipped 1.42mn t of coking coal to Europe in May, up by 14.5pc on the year, with shipments to Belgium overtaking key destinations, including the
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MET COKE 62% CSR
Netherlands, France, Sweden and Turkey. * Queensland has set a record in metallurgical and thermal coal exports in June with 21.43 million tonnes of the commodity sent from the state. The result represents an 11% increase on the same month last year, highlighting the increase in demand from world markets for Queensland’s coal. It has contributed to the state’s exports from all resources totalling over $70 billion for the 12 months to May this year for the first time.
Indonesia: * * Indonesia regulatory changes to bring more uncertainty to coal sector. Indonesian coal miners said upcoming regulatory changes are putting added pressure on their businesses amid depressed prices and rising competition from other energy sources. The Indonesian government is in the process of amending coal
mining rules to enforce implementation of a 2009 mineral law that require miners to convert their mining permits to a licensing system upon the expiration of their current contracts. * Bids and offers for low-calorific value (CV) Indonesian coal were little changed again, although details began to emerge of deals that may have been concluded at lower prices than similar transactions last week. Spot deals involving August-loading geared Supramax cargoes of GAR 4,200 kcal/kg coal were possibly done at around $35-35.30/t.
USA: * Coal’s share of US power generation may fall to 11% by 2030. Moody’s. Demand for US thermal coal will “erode significantly” between 2020 and 2030 as total use for US power generation could fall to as little as 11% based on scheduled and likely retirements, Moody’s Investors Service wrote in a report released. Mines in the Powder River Basin are expected to be the hardest hit as thermal coal generation declines.
Pet Coke: * Seaborne US petcoke prices dip to 29-month low amid sagging Indian demand. Withered
Indian demand amid the seasonal monsoon brought US 7,500 kcal/kg NAR petcoke prices to a 29-month low, market sources said. A trade for US 7,500 kcal/kg NAR petcoke was heard at $78/mt CFR India by an Indian cement producer. “FOB prices are falling, you can get the US 7,500 kcal/kg NAR petcoke at $38/mt FOB but freight is around $40/mt,” said a west India-based trader.
Shipping: Coal exports from the Port of Gladstone in Queensland, Australia, rose to a five-month high in June aided by a surge in volumes to China, which helped offset a slump in total Chinese coal imports, data from the Gladstone Ports Corp. showed. A total of 6.43 million mt were exported from Gladstone, up 2% year on year and 8% month on month, and the highest monthly volume since the 6.45 million mt seen in January. * International coal prices have fallen sharply over recent months. The spot free on board (FOB) price of coal shipped from Australia’s Newcastle export terminal stood at $72.50/t on 13 June 2019, 40pc below a peak of $120/t reached in July 2018. By the end of last year 30 countries had joined the Powering Past Coal Alliance, a group committed to moving from coal power generation to clean energy.
CCAI Monthly Newsletter July 2019
| 31
Overall Domestic Coal Scenario Coal Production (in MT) Company
June, 2019
June, 2018
% Growth
April - June, 2019
April - June, 2018
CIL
45.1
SCCL
5.7
% Growth
44.9
0.5%
137.0
136.9
0.1%
5.0
15.2%
17.1
14.6
17.3%
Overall Offtake (in MT) Company
June, 2019
June, 2018
% Growth
April-June, 2019
April – June, 2018
% Growth
CIL
48.9
49.6
-1.6%
153.3
153.5
-0.1%
SCCL
5.5
5.3
4.6%
16.8
16.9
-0.2%
Coal Despatch to Power (Coal and Coal Products) (in MT) Company
June, 2019
June, 2018
% Growth
April June,2019
April - June,2018
% Growth
CIL
38.7
40.2
-3.9%
119.6
123.5
-3.2%
SCCL
4.6
4.2
8.9%
14.0
13.8
1.2%
Company
Coal Qty. Allocated June, 2019
Coal Qty. Allocated June, 2018
Increase over notified price
Coal Qty. Allocated April - June, 2019
Coal Qty. Allocated April June, 2018
Increase over notified price
CIL
2.07
3.62
55%
7.42
10.50
61%
Spot E-auction of Coal (in MT)
Special Forward E-auction for Power (in MT) Company
Coal Qty. Allocated June, 2019
Coal Qty. Allocated June, 2018
Increase over notified price
Coal Qty. Allocated April June, 2019
Coal Qty. Allocated April June, 2018
Increase over notified price
CIL
0.88
-
128%
6.65
14.17
33%
Coal Qty. Allocated April June, 2018
Increase over notified price
Exclusive E-auction for Non- Power (in MT) Company
Coal Qty. Allocated June, 2019
Coal Qty. Allocated June, 2018
Increase over notified price
Coal Qty. Allocated April June, 2019
CIL
1.00
1.50
24%
2.20
Company
Coal Qty. Allocated June, 2019
Coal Qty. Allocated June, 2018
Increase Over notified price
Coal Qty. Allocated April - June, 2019
Coal Qty. Allocated April - June, 2018
CIL
-
-
-
-
-
3.38
33%
Special Spot E-auction (in MT)
32 | CCAI Monthly Newsletter July 2019
Increase Over notified price
-
CCAI Monthly Newsletter July 2019
| 33
45399.22
HYDRO
75.66
Source CEA
TOTAL
941.09
15824.46
4226.48
87378.11
4
ACTUAL*
1034.92
15778.87
3600.96
82286.83
5
71.39
83.79
15
ACTUAL SAME MONTH 2018-19
105.52
99.64
72.42
60.95
16
PROGRAM
77.31
60.96
17
ACTUAL*
68.5
60.52
18
ACTUAL SAME PERIOD 2018-19
APRIL 2019 - JUL 2019
PLANT LOAD FACTOR (%)
90.93
100.29
117.37
106.19
7
111.77
96.56
112.41
99.55
6
1858.49
55322.20
15348.12
375098.57
9
ACTUAL*
453842.00 447627.38
1857.00
53089.00
14164.00
384732.00
8
PROGRAM
421686.59
1884.24
47354.18
13599
358849.17
10
98.63
100.08
104.21
108.36
97.5
11
106.15
98.63
116.83
112.86
104.53
12
% OF % OF LAST PROGRAM YEAR (9/8) (9/10)
ACTUAL SAME PERIOD 2018-19
% OF LAST YEAR (4/5)
ACTUAL SAME MONTH 2018-19 % OF PROGRAM (4/3)
APRIL 2019 -JUL 2019
GENERATION (GWH)
PERIOD : July, 2019
JUL-2019
AN OVERVIEW
108761.0 108370.14 102701.58
842.00
16389.00
3760.00
54.53
14
13
NUCLEAR
BHUTAN IMP
3
55.6
ACTUAL*
JUL-2019
PROGRAM
54.32
HYDRO
6218.00
136932.00
44720.00
279757.06 1330000.0
THERMAL
Category
TOTAL
0.00
6780.00
BHUTAN IMP
2
PROGRAM
227577.84 1142130.00 87770.00
1
Target Monitored Capacity Apr 2019 to (MW) Mar 2020
NUCLEAR
THERMAL
Category
SUMMARY- ALL INDIA
ENERGY GENERATION REPORT
Note
34 | CCAI Monthly Newsletter July 2019
CCAI Monthly Newsletter July 2019
| 35
REGISTERED
36