Domestic

Competitive pricing of coal to help cut imports, bring efficiency in sector: Official

The participation of private players in the coal mining sector will bring efficiency and lead to competitive pricing of the dry fuel, Coal Joint Secretary M Nagaraju said recently. He also said that non-competitive pricing of coal has seen imports of dry fuel rising constantly over the last five to six years. "One reason why imports have been rising regularly in the last 5-6 years is not very competitive pricing in the coal industry in the country," Nagaraju said during the second stakeholders'' consultation on auction of coal mines for commercial mining, organised by Ficci. With the private sector, he said, there will be efficiency and lowering of prices of fossil fuel, which may lead to either completely stop coal imports or drastically reduce it. "There is no reason why we should be importing thermal coal into the country, spending huge amount of money," he said. He noted that India is a country which has fourth largest reserves of coal and still it is importing dry fuel. The country imported about 247 million tonnes of coal last fiscal, spending almost around 1.57 lakh crore of foreign exchange, the official said. Nagaraju said once the proposed coal blocks on auction are operationalised, almost 220 million tonnes of dry fuel will be produced every year. Launching the auction of mines for commercial mining, that is expected to garner Rs 33,000 crore of capital investment in the country over next 5-7 years, Modi had said India will win the coronavirus war and turn this crisis into an opportunity, and the pandemic will make India selfreliant. Better quality, supply resulted in gains of over Rs 3,125 cr: Coal India

State-owned CIL has said supply of improved quality coal over committed grades and supply beyond annual contracted quantity have resulted in the PSU gaining over Rs 3,125 crore. "Coal India Ltd's (CIL) concentrated efforts on

supply of improved quality coal over committed grades and supply beyond annual contracted quantity (ACQ) have paid off as the company on whole gained a tidy amount over these twin attributes," the maharatna firm said in a statement. An amount of around Rs 1,365 crore provisioned under coal quality variance in the earlier years has been withdrawn, in the last fiscal, which is the net gain to CIL on whole, it said. The PSU's coal supplies, above agreed ACQ to its customers, having fuel supply agreement (FSA), also netted the company a substantial amount of over Rs 1,760 crore under performance incentive during the previous two fiscals combined, it said. CIL arms Eastern Coalfields and Northern Coalfields bagging Rs 408 crore and Rs 358 crore, respectively were major contributors towards the performance incentive for 2019-20. Both the arms together accounted for around 88 per cent of the company's total incentive gain. Now, with Covid-19 induced slowdown when the demand for coal is low and the floor prices for coal are relatively lower some of the customers are moving away citing reasons that are not sound. Coal India might consider stopping further FSAs for a period with such customers, who renege on committed agreements and decide to terminate their contracts on frivolous grounds, it said. Coal India launches special category of e-auction for coal importers

State-owned coal miner Coal India Limited (CIL) has launched a special category of e-auction of coal for those companies and traders which import coal to meet their requirements. This is in line with the government’s declaration to bring down coal imports to zero. Any coal buyer, who imported coal during the current and any of the last two financial years, is eligible for participating in this new version of e-auction, CIL said. The minimum bid quantity is pegged at 25,000 tonne for a company which uses road transportation. For those using rail transportation, it is 50,000 tonne, which is equivalent to 12 rakes. One rake is equivalent to 59 rail wagons. The company said customers can bid for further incremental quantities of coal if they so require. “This move is a bid to realise the government’s thrust on reducing coal import dependency of the country under Aatma Nirbharta plan. It would also open a new avenue for our coal companies to step up their sales,” said a CIL executive. The e-auction would take place on the website of MSTC Limited and Mjunction Services Limited. CIL will soon announce the auction calendar for August 2020-March 2021 period. Commercial mines auction: Government devising single window clearance mechanism

The coal ministry is devising a single window clearance mechanism for faster online application processing for various approvals, including environmental clearance, required for operationalisation of coal blocks. On queries related to standard tender document for coal block auction for commercial mining, the coal ministry said, "A single window clearance is being devised for faster online processing of applications for clearances". However, it will be the responsibility of the bidders to obtain clearances and approvals as per applicable laws, it added. According to an official, the coal ministry is planning to take state government departments on board for single window clearance. Delays in getting approvals, including environment and forest clearance, by the successful bidder after winning coal mine often leads to deferment in production. In order to attract bidders in auction of commercial mines, the Centre recently announced the launch of a project monitoring unit to facilitate early operationalisation of coal blocks. The government move aims to promote ease of

doing business in India as it will facilitate coal mines allocatees to obtain timely approvals for operationalising the mines. KPMG has been appointed as the consultant in project monitoring unit (PMU) through a transparent bidding process. Coal Ministry withdraws Bander mine of Maharashtra from auction list of 41 coal blocks

The coal ministry has withdrawn Bander mine in Chandrapur district of Maharashtra from the list of 41 coal blocks put up for auction for commercial mining as the mine lies in the eco sensitive zone of Tadoba Andhari Tiger Reserve. In the withdrawal notice dated July 21, the coal ministry said, "bidders may kindly note that Bander coal mine is now part of the Tadoba- -Andhari Tiger Reserve as per the notification declaring the area as eco sensitive zone issued by the Ministry of Environment, Forests & Climate Change." Accordingly, the Ministry of Coal has decided to withdraw the Bander coal mine from the auction process under the Coal Mines (Special Provisions) Act, 2015, it said. "In view of the above,Bander coal mine is withdrawn from the 11th tranche of auction....," it said. The block having geological reserves of 126.105 million tonnes has tentative peak rated capacity of two million tonne per annum. NGT asks CPCB to ensure states, UTs ban use of petcoke, furnace oil

The National Green Tribunal (NGT) has asked the Central Pollution Control Board (CPCB) to ensure that states and Union Territories (UTs) ban the use of petcoke and furnace oil as fuel to prevent damage to the environment and public health. A bench of the NGT, headed by its chairperson AK Goel, has sought an action taken report (ATR) from the CPCB within four months and listed the matter for further hearing on January 15, 2021. The tribunal was hearing two petitions, filed by Sumit Kumar and Amarjeet Kumar, seeking regulations and to control the use of petcoke and furnace oil as fuel to prevent damage to the environment and public health. The tribunal has observed that the Supreme Court, in its order dated October 24, 2017, banned the use of petcoke and furnace oil in the national capital. On November 17, 2017, the top court had suggested other states and UTs take similar measures. The green tribunal had noted there are huge emissions of SO2 (sulphur dioxide) and other pollutants on account of the use of petcoke and furnace oil by the industries. It also noted that some states are continuing using it. The tribunal has directed the industries to switch over to alternatives and cleaner fuels. Cabinet to consider changes in Mining Act

The Union Cabinet is expected to soon take up the Ministry of Mines proposal to repeal a Section in the Mining and Minerals Development (Regulation) Act that protects miners’ right to own leases indefinitely without developing the mines. The amendment will cancel leases of about 500 mines which will then be put under auction to facilitate the government’s ‘Atmanirbhar Bharat’ mission, said sources. The mines, which are largely held by Merchant Miners, have been lying idle for the last few decades. Despite having huge reserves, Indian companies import huge quantity of raw material such as iron ore, bauxite, limestone and manganese ore. The industry suggested the government insert a sunset clause for mandatory development of a mine within a certain period of time. However, that did not find favour with the Government as getting necessary statutory approvals itself is a time-consuming process. Following this, sources said the Ministry of Mines decided to repeal the Sections 10A2(b) of MMDR Act. If auctioned, the mines will not only unlock one billion tonnes of mineral reserves but also add over ₹40 lakh crore to the exchequer and ₹5 lakh crore revenue to State governments. As

per the Mines Ministry Auction summary report, 97 mineral blocks have been auctioned since 2015, adding a revenue of ₹8 lakh crore to the State exchequer.

STEEL

India's crude steel production at 6.8 MT in June, says Steel Ministry

The steel sector in India has started showing signs of improvement and in the month of June the country's crude steel production stood at 6.8 million tonne (MT), according to the Ministry of Steel. At, 6.8 MT, the production was 17.7 per cent higher over May, 2020, but on a year-on-year basis it was lower by 27.2 per cent over June 2019, the ministry said in an update. It noted that economic activities, after hitting the nadir in April 2020 due to spread of COVID-19 pandemic and nationwide lockdown, have started showing signs of improvement from May 2020. "This was reflected in the performance of eight core industries (with a weight of 40.27 per cent in IIP) which as against a decline of 37 per cent in April 2020 registered a decline of 23.4 per cent in the month of May 2020. Similarly the Index of steel production which fell sharply by 83.9 per cent in April 2020 registered a decline of 48.4 per cent in May 2020," the ministry said. The ministry further said the production of finished steel in June 2020 at 5.9 MT, was up 15.6 per cent compared to 5.1 MT in May 2020. However, on year-on-year basis, the output of finished steel in June 2020 was lower by 33.3 per cent. India's large steel export volumes not sustainable in near term: Icra

Though weak domestic demand has prompted Indian steel producers to look at exporting the commodity, rating agency Icra is of the view that large volumes of steel exports from India are not sustainable in the near term. India’s finished steel exports grew 76 per cent during April-May 2020 and stood at 1.71 million tonne, as against the domestic demand, which contracted by 69 percent during the same period. In fact, export of semis from India has also risen significantly by 281 per cent to 1.29 million tonne during April-May 2020 with China being the largest beneficiary (78 per cent share). If both finished steel and semis are combined China became the largest export destination for India during Apr-May 2020 with a nearly 48 per cent share, said Icra. Lack of domestic demand following the countrywide lockdown amid the Covid-19 pandemic has prompted Indian steelmakers to look at the export markets, it said. Meanwhile, when compared with China’s average import purchase price of $972 per tonne, India’s export realisation to China remain much lower at $357 per tonne, implying low valueadded products such as semis being majorly exported by India. Despite low export realisations, domestic steel mills have remained profitable due to low iron ore prices, said Icra.

CEMENT

Cement demand likely to de-grow by up to 25% in FY21, says Icra

Cement demand is likely to de-grow by up to 25 per cent this fiscal on account of the coronavirus lockdown and subsequent specific restrictions disrupting construction activities, ratings agency Icra said. It further said cement manufactures may witness a compression in operating profitability by 150-200 basis points (bps) in the current financial year. While rural housing and infrastructure projects in remote areas would support cement consumption, urban-led demand is headed for a slowdown, it said. “ICRA expects cement demand to de-grow by

22-25 per cent in FY2021 given the prolonged nationwide lockdown and subsequent state/ city specific restrictions disrupting construction activities,” the credit rating firm said in its quarterly update on the sector. However, it added that despite the expected decline in demand, cement prices are likely to remain stable or get only marginally corrected. As per estimates, housing, including the lowcost and affordable housing segment, accounts for around 65-70 per cent of the cement demand, followed by infrastructure at 20-23 per cent and rest by commercial and industrial capex. The residential real estate sector, which has already been under stress for a prolonged period due to weak affordability, subdued demand conditions, a high inventory overhang and more recently, a liquidity crisis, has been further impacted by the pandemic.

RAILWAYS

Tonnage at 95% of normal: Rail freight loading stages recovery

After a steep fall in April, Indian Railways’ freight loading recovered smartly in May-June, reflecting the resilience of core industries like coal, cement, iron ore & fertilisers and the undisrupted food grain supply chain. Goods loading by the transporter fell steeply from 103.1 million tonne (MT) in March to just 65 MT in April, but with the easing of lockdown curbs, the tonnage improved to 82 MT in May, and further to 93.3 MT in June. With the June cargo being 92% of the goods transported via the rail network in the year-ago month (101.3 MT), it appears normalcy has nearly been restored. In the April-June quarter of FY21, railways carried 241.5 MT of cargo against 307.4 MT in the same quarter of FY20. The first quarter of FY21 saw freight earnings of Rs 22,266 crore as compared to Rs 32,403 crore in the year-ago quarter, a sharp drop of 31%. Freight receipts stood at Rs 1,13,481 crore in FY20, which was 64% of total revenue of the transporter during the year. The target for freight earnings for the current financial year is Rs 1,47,000 crore, apparently a tall order owing to the Covid-19 outbreak, but officials say the target is still achievable. Official sources also claim that last fiscal year’s tonnage level could be exceeded in the current year. On its part, the railways is taking a number of steps aimed at boosting freight movement and revenues with focus on transportation of essentials, especially food grains. Loading of food grains during the April-June quarter of this year shot up 83% year–on-year to 13.63 MT. Paradip Port dislodge Deendayal Port as top state-owned cargo handler in Q1

Paradip Port caters to the vast industrial hinterland of Orissa, Chhattisgarh, Jharkhand, West Bengal and the entire northeast. Central government-owned Paradip Port Trust has overtaken Deendayal Port Trust to wrest the top slot by cargo handled during the April to June quarter among the 12 government-run ports in the country. The port located in Orissa’s Jagatsinghpur district, close to the coal belt of Orissa, handled 25.734 million tonnes (mt) of cargo in the first quarter of FY21. The Q1 cargo volumes were 8.76 per cent lower than the 28.205 mt handled during the same period last year, according to the Shipping Ministry. Yet, it edged past Deendayal Port Trust (formerly Kandla Port Trust) which handled 25.049 mt of cargo during the first quarter, a drop of 19.51 per cent from the 31.120 mt it handled during the corresponding period last year. Paradip Port Trust and Deendayal Port Trust are two of the three ports in the country that handle over 100 mt a cargo a year. The third is the privately-run Mundra Port, which was the first to reach the three-figure mark in FY14, a milestone for ports.