CCAI Newsletter July-21

July 2021 Price: 40/w h e r e s e r v i c e a n d d e d i c at i o n j o i n h a n d s

Vol. L No. 04

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CCAI Monthly Newsletter 2021 1 Published on :July 28.07.2021

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From the Editor’s Desk

As India, along with the rest of world is looking to fight its way back to light from the crater created by the ons laught of pandemic since the last year and a half, industrial activities are gradua lly picking up pace with the help of constructive policy decisions and helpful init iatives by the Government.

The despatch of coal by stat e-owned Coal India Limited to the power sector has increased by more than 36% in the first quarter of the ongoing fiscal. The despatch of coal by the Mah aratna Company has increase d stea dily since May ’21 despite rain playing spoilsp ort in various par ts of the cou ntry.

India’s coal consumption for both Utilities and Industries are on an upward trend due to reopening of ma nufacturing units and escalati ng power demand across the nation. Despite the country’s decision to hold auc tion s for solar-plusstorage and round-the-clock renewable generation, a new high in India’s coal consumption is more likely to occur in coming months as 80% of India’s power generation still depends on the dry fuel.

In order to keep a parity betw een the rising demand and sup ply, CIL has planned to pump in over Rs. 1.22 lakh crore on projects related to coal evacuation, exploration and clean coal tech nologies by 2023-24 to bols ter its production further. Out of the proposed spen ding, Coal India may invest Rs 32, 000 crore on coal evacuation and over Rs. 25, 000 crore in developing min ing infrastructures.

As par t of its advanced policy decisions, the Centre has intr oduced the National Mineral Index (NMI) which will determine the value of the minerals including coal that will form the basis for calculation of royalty and oth er such levies of selected minerals which will embolden the path of revenue ear nin g. The rate of coal royalty which is 14% at present was last revised in 201 2.

Country’s steel sector is set to make a new record this year, reversing the performance in 2020 when demand had crashed as the pandemic upended economic activity. As per exp erts from the sector, demand for steel is expected to surge by nearly 17% in FY 2021-22.

To put a check on steel imp orts, the union cabinet clea red Rs 6,322 crore Production Linked Incentive (PLI) scheme to save forex and encourage domestic production of five categories of specialty steel. According to the New Steel Minister Ram Chandra Prasad Singh, domestic production of specialty steel is expected to go up to 42 MT from 18MT at present with the help of this scheme.

With significant economic reco very on the cards, the curren t fiscal and bolstered production in two of the ma jor sectors like coal and steel, India looks firmly on course to shake of the woes of pandemic and achieve the dre am of self-reliant India.

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Content Vol. L No. 04 July 2021

Official Organ of the Coal Consumers’ Association of India. Disseminates News and Views on Coal and all other sources of Energy.

4, India Exchange Place - 7th Floor Kolkata - 700 001 Landline : +91 33 22304488 E-mail : sec.ccai@gmail.com Website : www.ccai.co.in

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Consumers' Page

10

Power

16

Domestic

24

Global

Editor : Subhasri Nandi 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.

30 Monthly Summary Of

Imported Coal &Petcoke

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Production And Offtake Performance Of Cil And Subsidiary Companies

34 Overall Domestic Coal Scenario

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CONSUMERS’ PAGE Present Coal Scenario: Despite incessant rainfall across many parts of India, national miner Coal India Limited’s monthly production of the dry fuel for July ’21 has increased by 2.6 Million tonnes compared to previous month while monthly coal offtake has seen a slight decrease.

CIL’s total coal production for the month was 42.6 MT, which was 14.1% higher than Jul ’20. For the period of April ’21 to July ’21, CIL’s accumulative coal production has been 166.6 MT, more than 5% higher than the same period last year that was hit hard by the pandemic.

The coal behemoth’s total coal offtake for July ’21 was 50.5 MT registering a major growth of 16.9% compared to the production figures of Jul ’20. For the period of April ’21 to July ’21, CIL’s total offtake has been 210.8 MT. The offtake for this financial year has been over 28% higher than the same period previous year.

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Issues faced by both Power and Non-power Sector Consumers: 1. Request for extension of timeline for lifting of coal (RDOs) for both Power and Non-power sector: Both Utilities and Industries were not able to procure coal within the RDO validity due to various reasons including outbreak of pandemic, lack of transport vehicles and drivers, lack of manpower for loading and unloading of coal, incessant rain etc.

Multiple representations were given to the Ministry of coal and CIL for extending the validity of RDOs originally expiring in May ’21 till end of July ’21.

CIL has extended the timeline for lifting of coal till 20th July, 2021.

2. Request for early issuance of longpending credit notes and coal value reconciliation for Road- mode consumers by SECL: Inordinate delay in reconciliation of excess coal value against quantity despatched through Road mode by SECL has been a point of major financial concern for both Utilities and Industries as large amount of their fund has been stuck with SECL for a long period.

Request has been made to SECL and CIL to ensure immediate issuance of pending credit notes and reconciliation of coal bills against procurement of coal through Road mode.

Issues faced exclusively by Power Sector Consumers: 3. Submission regarding further deterioration in quality of coal supplied from Salanpur and Mugma area of ECL: As per the Power sector consumers, quality of coal supplied from ECL Salanpur and Mugma sidings through Rail mode further deteriorated during May-

June ’21 as coal supplied from these two sidings were 6-7 grades lower than the declared grade.

Though one or two collieries under Salanpur and Mugma are producing better quality coal, supply from most of the other collieries from these two areas are of much lower grade containing of high amount of shale and other substances.

Request has been made to ECL and CIL to take necessary measures to improve the coal quality supplied from these two areas as Power producers procuring coal from ECL, largely depend on supply from these sidings.

4. Request for reimbursement of idle freight on account of under-loading alongwith GST Certain Subsidiary Coal Companies (CCL, NCL & ECL) are providing refund of idle freight alongwith GST components charged by the Railways to the Power Utilities but others such as SECL, MCL and WCL are not reimbursing the GST amount during refund of idle freight.

Request has been made to CIL so that all Subsidiary coal companies reimburse the idle freights for under-loading along with the GST amount.

5. Continuous and significant shortreceipt of coal from MCL’s Talcher Spur (I-VI) Sidings: Power sector consumers have been facing difficulties due to continuous and significant short-receipt of coal from Spur (I to VI) sidings of Talcher coalfields at MCL over the last few months mostly due to faulty weighment at the bi-directional weighbridges in the areas.

Meetings have been held with MCL authorities at the headquarters and area GMs of Bhubaneswari and Jagannath mines. Request has been made for recalibration of weighbridges where the issue of shortreceipt has been frequent.

The MCL authorities have promised to look into the matter with utmost gravity. MCL has undertaken the inspection of the status of weighbridges in the Spur sidings and also made arrangement for weigh-

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ing empties and loaded rakes separately as much as possible. MCL has also requested to send the company representatives or handling agents of the affected organisations to the concerned areas of MCL to witness the weighment of rakes and hold discussions.

Tranche-V of NRS Linkage Auction for rest of the Sub- sectors at the earliest possible and announce the tentative timeline for the Linkage auction well in advance so that the Industries may plan accordingly for long-term procurement of coal.

8. Submission regarding immediate 6. Submission to SECL for refund of release of pending BGs for the termihuge coal value against lapsed quanti- nated FSAs: ties and EMD: In spite of extending the validity of RDOs and the period of coal lifting by CIL, a number of consumers especially from the Power sector procuring coal from SECL, could only manage to lift a portion of their allotted quantities while the remaining portion got lapsed due to various reasons such as, unavailability of declared grade of coal, adverse weather conditions for production of coal, less production of auctioned grade of coal due to geological disturbance in mines which are beyond the control of the consumers.

Request has been made to SECL to refund the coal value against lapsed quantity and EMD to the concerned customers at the earliest possible.

Issues faced exclusively

by Non-power Sector Consumers: 7. Appeal on behalf of NRS consumers regarding urgent requirement of Tranche-V Linkage Auction for Subsectors except Sponge-iron subsector: The Tranche-V of NRS Linkage Auction for the Sponge Iron sub-sector was conducted in December, 2019, Linkage Auction of Non-coking coal for the rest of the Sub-sectors under Tranche-IV, was last held way back in November- December, 2018.

This delay in conducting Tranche-V of NRS Linkage Auction for CPP, Cement and Others Sub-sectors has made the functioning of a large number of Industries extremely difficult due to uncertainty over long- term coal supply commitment.

Request has been made to CIL to conduct the

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For certain consumers from the Non-power sector, most of the FSAs with SECL’s Baroud OCP & MahanII OCP have been terminated in 2021 while cumulative Bank Guarantee (BG) amounts worth lakhs of rupees are yet to be released by the coal company.

Request has been made to SECL to immediately release the entire BG amount at the earliest possible.

9. Submission regarding immediate release of pending rakes for NRS consumers: Consumers from the Non-power sector procuring coal from different Subsidiaries, especially ECL are not getting sufficient supply of coal as the last Exclusive e-auction was last held by the Subsidiary in March '21. Due to high demand of coal in the Power sector even auction rakes are pending for the Nonpower sector since long.

Request has been made to ECL to release the pending rakes to NRS consumers at the earliest possible.

It is also requested that the Exclusive e-Auction may be conducted on a bi-monthly basis in order to cater to the need of the Industries.

10. Requesting refund of Security Deposit against terminated FSAs: Certain NRS Consumers procuring coal from different Subsidiaries have not been getting the refund of Security Deposit made by them against their FSA by Road Mode that has been terminated earlier this year.

Request has been made to CIL and the Subsidiaries for early release of the Security Deposit to the respective companies, whose FSAs have expired.

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POWER Quality 24X7 power supply key for accelerated economic growth: R K Singh

transformed from a power deficit to a power surplus country.

Transmission network has been expanded to connect the whole country into one integrated grid with inter-regional transfer capacity of over 1 lakh MW.

Power Minister R K Singh said that providing quality and reliable power supply round-theclock is a key factor for accelerated growth of the economy. "Providing 24x7 quality and reliable power supply with enhanced consumer satisfaction is very important as this is the key ingredient for accelerated growth of economy and country at large.

Discoms to submit proposals for Rs 3.03 lakh cr scheme by Dec 31: Power Min

At the meeting, Singh said the power sector has witnessed tremendous growth over the past few years in the areas of generation, transmission and distribution. With a total installed generation capacity of 384 GW, the country has

The government has extended the deadline to states for enrolling into the Rs 3.03 lakh crore revamped electricity distribution scheme by two additional months to December 31, power minister R K Singh said. The scheme guidelines

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issued asked state power distribution companies to apply for participating in the scheme by October 31.

The deadline for detailed project reports (DPRs) submission would be December 31 2021 and no submission beyond that deadline would be accepted, Singh said at a review meeting with state power ministers.

The action plans and DPRs need to be formulated by the discoms in consultation with ministry of power REC and Power Finance Corp (PFC). The distribution utilities will indicate specific activities and reforms required to improve their performance as part of the action plans.

Power ministry seeks coal cess waiver for FGD power plants The power ministry has sought the waiver of Rs 400 GST compensation cess on coal supplied to thermal power projects that implement emission control equipment to offset the increase in power tariff to end consumers due to implementation of emission control equipment as per the directions of the environment ministry.

“The power ministry has proposed to the ministry of finance that they might consider exempting the cess on the power plants that are in compliance with the FGD (Flue-gas desulfurisation) norms. If FGD norms are complied, the power cost will go up by 35 paisa. FGD should not be penalising power companies, distribution companies or the consumers,” a senior government official said.

The power ministry has in its recent letter to the finance ministry proposed that waiver of coal cess can be provided to power plants from the date of commissioning of FGD equipment starting July next year, the official said.

Centre may introduce annual

service- based ratings for power utilities The Centre would introduce an annual serviceoriented rating programme for power utilities that would be ranked on metrics such as duration and quality of electricity supplies, billing and collection efficiency, and grievance redressal.

REC is the nodal agency for the program assessing customer centricity.

Multiple rounds of stakeholder consultations have been held with several discoms, including private distribution utilities and sectoral institutions like the Council on Energy, Environment and Water (CEEW), Prayas Energy group and Smart Power India.

Supply reliability or uninterrupted quality power is the most important parameter of the rating.

The second metric would be performance on services the consumer needs - ease and speed in new connections, metering efficiency, transparency and accuracy.

CCEA approves Rs 3.03-lakh cr scheme for power discoms The Cabinet Committee on Economic Affairs (CCEA) approved a five-year-long reform-based result-linked power distribution scheme worth Rs 3.03 lakh crore.

The Reform-Based Result-Linked Power Distribution Scheme was announced in Budget earlier this year. Finance Minister Nirmala Sitharaman again announced the scheme as part of stimulus package post second wave of COVID-19, to boost the economy.

For availing this scheme, the states will have to pre-qualify criteria like publication of audited financial reports, upfront liquidation of state government’s dues/subsidy to discoms and noncreation of additional regulatory assets.

The scheme envisages 25 crore smart meters, 10,000 feeders, four lakh km of low-tension

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overhead lines planned under the ongoing works under central government schemes.

Power demand to grow over 5% this fiscal, a three year high: Crisil Ratings Rising industry demand is expected to prop up India’s energy consumption by over 75 billion units (BUs) this fiscal, or 5 per cent on-year – the fastest growth in the past three fiscals, Crisil Ratings Ltd said.

The heightened demand will be met largely by thermal generation companies (gencos) as generation from renewable, hydro and nuclear remains small at less than 25 per cent of the overall generation mix. That should charge up plant load factor (PLFs) of thermal gencos to ~58 per cent, higher than the pre-pandemic level of 56 per cent, an official statement said.

The growth in demand and improvement in PLFs assume a gradual recovery over the rest of the fiscal year and remain sensitive to any lockdowns imposed in response to further waves of Covid-19, the statement said.

Giving efficient plants priority in coal power despatch could save Rs 9,000 cr annually: CEEW Discoms in India could save up to Rs 9,000 crore every year by prioritizing coal power despatch based on efficiency rather than the prevailing system which prioritizes based on variable costs, according to research done by Council on Energy, Environment and Water (CEEW).

This can provide much-needed respite to public discoms, which reported a loss of Rs 61,360 crore in 2018-19, CEEW said in a statement.

The study found that prioritising efficiency-

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based despatch during this time could have improved coal fleet efficiency by 1.9 per cent, resulting in annual coal savings of 42 million tonnes (MT) and a commensurate reduction in greenhouse gas emissions.

“Given that India will continue to rely on coal power in the coming decade, it must rein in wasteful coal use and improve generation efficiency. Decommissioning a part of the fleet could make coal power generation more efficient and less polluting, and accelerate decarbonisation in the power sector.

Delhi: 50 per cent of power needs may be met by green sources by 2024 By the year 2024, more than 50 per cent of the power needs of a large section of the city would be met through green energy, comprising solar, wind, water, waste to energy and hybrid power.

By the financial year 2023-24, 3,300 MW of green power will be operationalised by BSES discoms. Discom sources said that out of this, 2,291 MW will be “pure play renewable”, comprising solar, wind and waste to energy and around 1,000 MW comprising hydro power. This means that by 2024, 36 per cent of BSES’s longterm arrangements will comprise pure play renewable energy and 16 per cent, would be hydro power, adding up to a total of 52 per cent.

The BSES discoms recently inked a power sale agreement with the Solar Energy Corporation of India to procure 510 MW of solar and bundled hybrid power. Of the total quantum of 510 MW, 300 MW is solar power and 210 MW, hybrid power, including Mumbai, Nashik, Pune, Igatpuri and Nagpur, the company said in a statement.

Ladakh's power scenario changed for better in a short span of time: Lt Guv

The power scenario of Ladakh has changed for better in a short span of time, Lt Governor R K Mathur said, asserting that with solar, hydrogen and geothermal projects in the pipeline, the sector has great potential for changing the face of the union territory. Mathur said many new areas have been electrified and power consumption in the last one year has grown by more than 10 per cent, while reiterating the need for time-bound removal of all diesel generator sets to achieve carbon neutrality in the region.

The secretary power informed the meeting of upcoming projects such as installation of new transformers in Leh city to address the issue of low voltage, introduction of smart metering system, maintenance and replacement of DG sets. It was noted that smart metering systems would help strengthen the mechanism of revenue collection and the department is pacing up the implementation of the project.

'Turnaround in J&K's power transmission, distribution helps achieve sustainable electricity supply' The turnaround in the power transmission and distribution sector in the past one year in Jammu and Kashmir has helped in achieving reliable, quality, and sustainable electricity supply, Lieutenant Governor Manoj Sinha said as he dedicated seven power infrastructure projects worth Rs 10.11 crore to the public. The new projects inaugurated by Sinha target four districts of the Kashmir Valley - Pulwama, Bandipora, Ganderbal and Budgam - and would benefit 30,400 households.

The lieutenant governor (L-G) said that hardly any work was done in the past three decades to strengthen the power infrastructure in the J&K UT and the administration inherited a plethora of problems confronting the power generation, transmission, and distribution sectors.

"But, we are determined for a time-bound solution to the problems. Rs 5,000 crore has been

allocated to transform the power infrastructure and I am certain with a pragmatic approach, we will be able to mitigate the challenges of this sector," the L-G said.

SECI plans 2,000 MWh capacity standalone energy storage project The Solar Energy Corporation of India (SECI) is planning a 2,000 MWh standalone energy storage system which will be executed by the private sector. The state-owned solar energy focused corporation said the projects will be set up on a build-own-operate (BOO) basis with a 25-year agreement.

"SECI has initiated a project for 2,000 MWh standalone energy system. The detailed tender will be floated by August end. SECI has issued a notice for request for selection. SECI will enter into an agreement with the successful bidders for 25 years as per the terms, conditions, and provisions.

NTPC to halve coal plants in portfolio by 2032 Country’s largest power company NTPC Ltd will reduce coal-based generation to half of its capacity in a decade, while raising the share of renewable power under a publicly-listed arm.

The company plans to list its green subsidiary NTPC Renewable Energy Ltd in 18 months as it expects to make Rs 2,50,000crore investment toward the renewable energy generation capacity addition targets.

The company also plans to tap cheaper funds through its pact with National Investment and Infrastructure Fund (NIIF) that was signed a year ago. NTPC is exploring development of large-scale offshore wind power plants with Oil and Natural Gas Corp through a joint venture signed last year.

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India will play leadership role in area of renewable energy: Piyush Goyal Union minister PiyushGoyal said that India will play a leadership role in the area of renewable energy in the years to come. While addressing the valedictory session of the second edition of 'Aatmanirbhar Bharat- Self-Reliance for Renewable Energy manufacturing', he stated that from the hydro-power in the initial stages, we are already looking at the future & have started engaging in hydrogen technologies.

He mentioned that 'LED (light-emitting diode) Mission (lights)' have saved the country billions of dollars in electricity bills. "As a nation, it brought down our carbon emissions by over a 120 million tonnes every year," he said.

The minister projected that by 2023-24, India is going to be 20% blending ethanol in petrol products "with an ultimate target to run vehicles that can take up to 100% ethanol."

Switching to renewable energy will add 5 lakh jobs in India by 2050, finds study The refrain to justify not moving away from fossil fuels has been that it would put people out of work. Coal and petroleum are big employers.

India alone has about 8.6 lakh energy jobs now.

But a new study has found that phasing out fossil fuels would actually add 80 lakh energy sector jobs across the world by 2050, of which over 5.4 lakh would be in India.

“Climate action results in more jobs,” Dr Sandeep Pai, co-author of the paper published in ‘One Earth’ journal, told TOI. Data he shared show that if the Paris Agreement target of temperature rise staying well below 2°C werema met, the number of jobs in India’s energy sector would go up from 8.6 lakh to 14 lakh by 2050.

The rest of South Asia, meanwhile, would add about 69,000 jobs. China, on the other hand, would lose over 27 lakh jobs. “According to our study, the US and Middle East and North Africa

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are clear winners in terms of adding maximum numbers of jobs. They all add over a million jobs by 2050,” Pai said.

India and Germany sign pact for skill boost in solar power sector Rajasthan Solar Association and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH signed an agreement for the skill development in the solar segment with the help of workshops and training programmes which will be conceived and implemented by the professionals.

Indo German Vocational Education and Training Program (IGVET) under the GIZ GmbH is a joint initiative of the Ministry of Skill Development and Entrepreneurship (MSDE) and the German Ministry of Economic Cooperation and Development (BMZ).

Suman Kumar and Sunil Bansal, president and general secretary of RSA appraised GIZ executives regarding the RSA’s initiative to start a skill development institute along with a facilitation centre for the solar industry stakeholders at Bap in Jodhpur with the help of the state government.

Govt gives extension to renewable projects delayed due to Covid The government has extended relief to renewable sector amid the second wave of Covid-19 pandemic by allowing an extension of two-and-a-half months for power projects with commissioning dates between April 1 and June 15, 2021.

With the second wave of the pandemic resulting in lockdowns in different parts of the country, work on several power projects also got suspended resulting in delays in commissioning.

The power ministry has also granted an extension of three months to all interstate transmission projects under construction, with the scheduled commercial operation date (SCOD) falling after April 1, 2021, hit by the

resurgence of the Covid-19 pandemic.

India’s C&I rooftop solar segment to add 1,875 MW capacity in 2021: Report The commercial and industrial (C&I) segment in India is expected to add 1,875 megawatt (MW) of new capacity in 2021, an increase of 47 per cent compared to the previous year, according to a recent report released.

It added that the rate of rooftop solar capacity addition by C&I consumers in India was expected to accelerate this year, as new and innovative solar technology solutions provided opportunities for businesses to save on electricity costs and contribute to corporate renewable energy targets.

“Solar module and battery prices have already fallen, and with the government’s new Production-Linked Incentive (PLI) scheme to boost domestic solar manufacturing, solar technology prices are expected to drop even further.

The report added that other factors expected to boost uptake of rooftop solar by C&I consumers were more accessible financing options and corporate wanting to switch to 100 per cent renewable energy to meet their RE100 commitments.

exceed pre-pandemic levels this year. The IEA believes they could hit a record high in 2022.

While nations are increasingly committed to reaching net-zero emissions by mid-century in order to limit climate change, the IEA calculates that in order to reach that goal emissions from the power sector need to be falling now.

Total corporate funding for solar sector surges to $13.5 bn in first half 2021: Report Total corporate funding in the first half (1H) of 2021 for the solar energy sector was $13.5 billion compared to $4.6 billion in the same period previous year, a 193 per cent year-overyear (y-o-y) increase, according to a recent report.

"Funding was up across the board in the first half of 2021 compared to last year, which was severely affected by the pandemic. Corporate merger and acquisition (M&A) activity was up significantly. Solar project acquisitions reached a record high in Q2.

Solar project acquisitions in 1H 2021 reached 39.3 GW compared to 14.7 GW acquired in the same period last year.

Centre sets up solar thermal components testing facility in Electricity demand faster than Hyderabad renewables: IEA Demand for electricity is growing faster than the roll-out of renewable energies, leading to a surge in the use of heavily polluting coal and undermining efforts to reach carbon neutrality, the IEA warned.

Electricity demand is expected to grow by 5 percent this year, much more than the 1 percent drop it experienced last year as the global economy tumbled into recession thanks to restrictions to stem the coronavirus pandemic.

Coal-fired power stations whose emissions are particularly harmful to the environment and contribute to global warming, are expected to

The Union ministry of science & technology said it has set up a concentrated solar thermal (CST) based test rig facility at Hyderabad.

The facility can help the solar industry test capability and performance of solar thermal components like solar receiver tubes, heat transfer fluids, and concentrating mirrors.

The testing facility will validate indigenous components by assessing their performance at varying operating parameters such as flow rates of heat transfer fluids (HTFs), operating temperature and pressure, among others and different DNI (direct normal irradiance) conditions.

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DOMESTIC Notice inviting tender for auction of 27 mineral blocks issued by four states: Joshi Notice Inviting Tender (NIT) for sale of 27 mineral blocks have been issued by four states, including Jharkhand and Odisha, Parliament was informed.

While Odisha has issued Notice Inviting Tender for 11 mineral blocks, Madhya Pradesh has issued NIT for 10 blocks. NIT has been issued for four mineral blocks in Rajasthan and one block in Jharkhand.

Replying to a written question in the RajyaSabha, Coal and Mines Minister Pralhad Joshi said, "Currently, Notice Inviting Tender (NIT) for auction of 27 mineral are issued by four states, namely, Madhya Pradesh, Rajasthan, Odisha and Jharkhand."

The minister further said "114 mineral blocks

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are auctioned by various State Governments."

He added that various steps have been taken to reduce the imports of coal.

These include launch of commercial mining to increase availability of coal through Non-coal India (CIL) mining leases, increase in availability of the dry fuel through greater allocations of coal under different auction windows conducted by the coal behemoth, and reduction in floor price for different categories of non-power consumers by CIL. CIL accounts for over 80 per cent of domestic coal output.

Coal supply to power plants dipped in past 3 years; declined more in FY21 due to COVID: Power Min

Coal supply to power plants dipped during the last three years, but declined more in 2020-21 due to the COVID-19 pandemic, Parliament was informed.

Coal supplies to power plants stood at 643.7 million tonnes in 2018-19, 638.7 million tonnes in 2019-20 and 596.3 million tonnes in 202021.

It was 171.7 million tonnes during April to June in 2021.

"The receipt of coal has registered a slight decline during the last three years. However, during 2020-21 the decline was more due to the effect of COVID-19 pandemic prevailing in the country," Power Minister R K Singh said in a written reply in the Lok Sabha.

Moreover, he said the share of power generation from non-fossil fuels (renewable energy) has also been increasing consistently over the years, leading to reduction in plant load factor (PLF or capacity utilisation) of coal-based power plants.

CIL takes out-of-the-box initiative to produce sand from overburden at much cheaper price State-owned CIL has taken an out-of-the-box initiative to produce sand from overburden at a much cheaper price, the government said.

During opencast mining of coal, the strata lying above coal seam is known as overburden, comprising clay alluvial sand and sandstone with rich silica content.

The initiative will not only help in minimising environmental pollution due to sand siltation from overburden, but will be also an option for getting cheaper sand for construction purpose, it added.

Production of sand has already started, the coal ministry said in a statement.

A roadmap of next five years has been drawn to maximise the output of sand from different coal producing companies under Coal India Ltd (CIL) and to become one of the major suppliers of sand in near future, it added.

In this effort, CIL aims to reach a production level of around eight million tonnes of sand within the next five years by commissioning 15 major sand plants in its different coal producing subsidiaries.

By the end of current fiscal, CIL envisages to have nine out of 15 plants with a production of around three lakh cubic metres.

This effort will not only help the society at large but also help in minimising river bed mining of sand. The overburden is removed to expose and extract coal from beneath. After completion of coal extraction, the overburden is used for back filling to reclaim the land in its original shape.

CIL arm CCL seeks reconciliation on Jharkhand's Rs 56,000 cr dues demand from Coal India Jharkhand-based Coal India arm CCL has sought 'reconciliation' of amount of claims post the state government slapping the behemoth with a whopping demand of Rs 56,000 crore in lieu of land allotted to it for mining.

Jharkhand Chief Minister Hemant Soren had sought immediate payment of Rs 56,000 crore "dues" to the state from the coal giant in addition to payment of royalty on coal on 'ad valorem' basis when CIL Chairman cum Managing Director (CMD) Pramod Agarwal called on him.

The PSU - the world's largest coal miner that accounts for about 80 per cent of the domestic dry-fuel production has been at loggerheads with state for long over the dues and the state way back in 2014 had sought Rs 25,000 crore as 'preliminary' amount from Coal India Ltd for excavating coal in the state without paying any compensation to it.

"We have sought reconciliation of the amount of claims from the state government," Jharkhandbased CIL arm Central Coalfields Ltd Chairman cum Managing Director PM Prasad told PTI. Prasad, who is also the acting chief for Bharat Coking Coal Ltd (BCCL), said the amount sought by the state pertains to three of the Coal India arms - CCL, BCCL and Eastern Coalfields Ltd CCAI Monthly Newsletter July 2021

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(ECL) and CIL has given application against the claimed amount requesting for reconciliation.

The CCL chief said they were hopeful for a positive outcome as CIL is a CPSU. A state government official said that the amount has been sought in lieu of land allotted to CIL for various projects in the state over a period of time.

Jharkhand chief minister Soren has asked the CIL chairman to initiate steps for immediate payment of Rs 56,000 crore by Coal India to Jharkhand in lieu of land allotted to it for mining.

Revision of coal royalty every 3 years not mandatory: Centre Union coal minister Pralhad Joshi said there is no mandatory provision in the Mines and Mineral (Development and Regulation) (MMDR) Act to revise the coal royalty rates every three years though Odisha has been making the demand since long.

In a recent reply to RajyaSabha, Joshi said the rate of coal royalty which is 14% at present, was last revised on May 10, 2012. “Section 9(3) of the MMDR Act provides that the Centre may enhance or reduce the rate at which royalty shall be payable for any mineral provided that the Centre shall not enhance the royalty more than once during any period of three year,” he said.

Responding to a query of BJD’s Prasanna Acharya as to why royalty revision has not been made since last eight years, Joshi said a study group was constituted on July 21, 2014, for the purpose of examining the issue of revision of present royalty rates on coal and lignite.

The study group decides the formula after considering various factors. It submitted its report

SCCL’s Naini project in Odisha gets Stage-I forest nod The plans of Singareni Collieries Company Ltd. (SCCL) to commence mining of coal this financial year in the Naini project allotted to it in Odi-

18 | CCAI Monthly Newsletter July 2021

sha have gone a step ahead with the 783.275 hectares of forest land getting Stage-1 clearance from the Ministry of Environment and Forests (MoEF).

Based on the proposal sent by the Odisha government, the MoEF has given the first-stage forest approval to the project. The land allotted to SCCL in the Naini block includes 643.095 hectares of reserved forest land and 140.18 hectares of village forest land in Chendipada and Kunkurupa villages of the Angul forest division.

The first-stage forest clearance orders were received by the Forest Department of Odisha.

The land would be transferred to SCCL once the second-stage forest clearance is accorded. The total land allotted to SCCL in the Naini block is 912.799 hectares but 738.275 hectares of it is forest land.

Talcher Village Hands Over Resources To MCL For Coal Mining For the first time in the history of Mahanadi Coalfields Limited (MCL) in Odisha, a village Bhalugadia at Talcher in Angul district of Odisha has handed over its resources without any obstruction and in one go to facilitate coal mining operations.

Bhalugadia, a compact village spread over on around 17 hectare coal bearing land in Talcher coalfields, had 288 families living there.

The village was acquired under CBA (Coal Bearing Act) by Mahanadi Coalfields Limited (MCL), a subsidiary of Coal India Limited, mandated for coal mining in Odisha.

The local Hingula Area management of MCL, with an active support and guidance of Odisha state administration, was able to create an environment of mutual trust among peripheral villagers that they voluntarily handed over their homestead land to the company.

MCL, a subsidiary of Coal India, follows R&R policy of Odisha government in order to provide maximum benefits to land owners and meet local aspirations.

Recently, the General Manager of local command Hingula Area organised a thanksgiving ceremony for the residents of Bhalugadia village in his office for setting an example of “obstruction free” eviction from homestead land for coal mining purpose.

project to significantly reduce carbon emission and produce 175 gigawatts of solar power by 2022, the north central railway zone whose 97 percent of operation area is within Uttar Pradesh is expected to reduce 2.5 lakh tons of carbon foot print every year, as the zone will have 297 MWp (megawatt peak) solar power plants.

Indo-Bangla power project set to get first consignment of coal from Kolkata port: Official

Currently, the zone whose prime responsibility is to provide high speed rail operation between west to east and north to south, as 11.03 MWp solar systems in its three divisions and three workshops---including Prayagraj with 3614 kWp capacity of renewable system which helped railway to save Rs 1.09 crore in 202021 financial year. In the remaining two divisions Agra and Jhansi, the zone had 1,588 and 1,204 kWp capacity solar photovoltaic cell systems, while in the three railway workshops of Jhansi division, a total of 4624 kWp capacity solar energy systems were installed on roofs.

The first consignment of coal for a thermal power plant being developed by state-owned NTPC Ltd through a joint venture in Bangladesh is getting ready at the port here and will be shipped to Mongla Port in the neighbouring country in the next 2-3 days, an official said.

The 1,320-MW Rampal Power Plant is being built by BIFPC, the joint venture between India's NTPC Ltd and Bangladesh Power Development Board.

"The first full rake of coal has arrived at Kolkata docks from Dhanbad and is now getting unloaded. It will be shipped to Mongla Port in the next 2-3 days for Rampal Power Plant," Syama Prasad Mookerjee Port (formerly Kolkata Port Trust) Deputy Chairman A K Mehera told PTI. The is the first shipment for a trial run, he said.

"Each rake consists of about 3,800 tonnes of coal. It will be the first export of coal cargo from this port," Mehera said.

According to the railway, in total three divisions and three workshops helped the railway to reduce 9,000 tons of carbon footprint in the previous financial year and saved Rs 3.96 crore.

STEEL

Govt probing price of imported steel wire rods from China

The coal-fired unit of Bangladesh India Friendship Power Company was supposed to be completed by December 2020, but the work got delayed, sources said.

The government is probing the price of imported steel wire rods from China to assess whether it should continue with the anti-dumping duty on the item. Indian companies such as RINL, SAIL and JSW have formally stated that the withdrawal of duties would lead to more dumping.

railways

Railway targets to reduce 2.5 lakh tons of carbon emission per year in NCR zone

In a gazette notification, the Directorate General of Trade Remedies (DGTR), under the commerce & industry ministry, said: “The domestic producers namely RINL, SAIL and JSW Steel have provided the prescribed information in the application. Further, Tata Steel Long Products and Jindal Steel and Power have supported the application,” the notification said.

Following the government of India's ambitious

Domestic steel producers have said dumping

19 | CCAI Monthly Newsletter May 2021

CCAI Monthly Newsletter July 2021

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from China has continued even after the imposition of the duty and it would increase or recur if the government lifts the levy. The sunset review investigation will undertake a “likelihood analysis of dumping and injury”. A period of investigation of 18 months from October 1, 2019 to March 31, 2021, has been fixed.

PLI for specialty steel: Govt expects robust response from large firms The government expects the Rs 6,322 crore production-linked incentive (PLI) scheme for specialty steel to be received well by the industry and incentive outgo of Rs 775 crore in 202324, the year when the disbursal of the sops begins.

According to government’s estimate, the highest outgo of the incentive is expected to be in 2025-26 at Rs 1,394 crore, followed by Rs 1,377 crore for 2026-27 and Rs 1,293 crore for 202728. For 2024-25, the outgo has been pegged at Rs 1,088 crore.

In a notification, the government said the scheme will treat 2019-20 as the base year.

The period of five years will commence from FY 2022-23 (PLI to be released in FY 2023-24).

The initial year may, however, be deferred by up to two years in case of specific product categories within the overall budgetary allocation.

The incentive, to be provided in the range of 4-15% on incremental production, will be released up to 2029-30 fiscal year.

India's steel consumption set to break records as Covid-hit economy revives India’s steel consumption is set to break records this year, reversing the performance in 2020 when demand crashed as the pandemic upended economic activity.

Economic activity in the country has revived as

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a deadly second wave of infections abates. The International Monetary Fund expects India to grow 9.5% this year. That’s in contrast to last year, when the economy tipped into an unprecedented 7.3% contraction, as a nationwide lockdown brought the country to a standstill.

Demand for steel is expected to surge 17% to 110 million tons in the year started April, according to Seshagiri Rao, joint managing director of JSW Steel Ltd. Consumption of steel in 2020 fell year-on-year for the first time in at least a decade-and-a-half.

Rising power consumption and mining activity, along with higher tractor and passenger vehicles sales is pushing up demand for the metal, Rao said in an interview.

Specialty steel PLI scheme to help save forex: Steel minister Ram Chandra Prasad Singh Last week, the union cabinet cleared a Rs 6,322 crore Production Linked Incentive (PLI) scheme to encourage domestic production of five categories of specialty steel. The scheme will be in force for five years starting from 2023-24. New steel minister Ram Chandra Prasad Singh, a bureaucrat-turned-politician, explains how the scheme would help the industry in an interview with Surya Sarathi Ray. Excerpts: How will the PLI scheme benefit the firms?

The main objective of the scheme is to enhance specialty steel production in the country and attain self-sufficiency by cutting down imports in line with the “Make in India” and “Atmanirbhar Bharat” initiatives. At present, our domestic production of specialty steel is about 18 million tonne (MT). We expect that thanks to the scheme, it will go up to 42 MT. This will not only meet our entire domestic demand, but we will also produce a surplus for remunerative export. Our products will be worldclass and the price will also be competitive.

At present, we are importing around 4 MT of specialty steel which costs us about Rs 33,000 crore in foreign exchange annually. With the ca-

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pacity expansion being planned, we will be able to export around 5.5 MT such steel.

The scheme is expected to generate about 5.25 lakh employment, out of which 68,000 will be direct employment. The scheme has been brought out after a lot of deliberations with the industry and different other stakeholders. Everybody has been taken on board.

Cabinet approves Rs 6,322 crore production-linked incentive scheme for specialty steel Yet another Production-linked Incentive (PLI) scheme has been announced by the government, with the specialty steel manufacturing sector now set to receive incentives worth Rs 6,322 crore.

To be provided over five years, the scheme is expected to bring in investment of approximately Rs 40,000 crore and capacity addition of 25 MT. India presently operates at the lower end of the value chain in the steel sector. Value-added steel grades are largely imported in India. This is because of the disabilities faced by the steel industry to the tune of $80-$100 per ton, on account of higher logistics and infra cost, higher power and capital cost, and taxes and duties.

The scheme aims to address this disability by incentivising the production of specialty steel within the country. It proposes to incentivise eligible manufacturers by paying between 4 percent and 12 percent incentive on incremental production. PLI incentive will also help the Indian steel industry mature in terms of technology and move up the value chain.

Steel price cut likely in July: Here’s why Steel stocks were under pressure as there is an expectation of a price cut in July. Two factors may be responsible for the price cut. First, Rus-

22 | CCAI Monthly Newsletter July 2021

sia will impose an export tax from August and so there is a possibility of higher exports from Russian producers. Second, Chinese prices have seen a sharp correction and in line with that Indian prices are also likely to see a correction.

There has also been a correction in export prices for India and that could reflect a lower price for steel. Moreover, India is getting into a seasonally weak quarter due to monsoons. During these months, construction activity in the country slows and as a result, long steel prices come under pressure. Also, secondary steel makers sitting on inventory would put pressure on prices.

Steel demand in India weakened due to the localised lockdown after the second COVID-19 wave. In the month ended May 2021, the consumption of finished steel recorded a sequential fall for the fifth consecutive month.

There is also an anticipation of the third COVID-19 wave and if that happens then buying could get postponed leading to more supply than demand.

CEMENT Prospects for cement industry in FY22 look bright, says Kumar Birla The Indian cement industry has been on a volume growth path led by several government initiatives and has a "bright" prospect for this financial year, said UltraTech Cement Chairman Kumar Mangalam Birla.

The government's spending on infrastructure projects and affordable housing schemes such as the Pradhan Mantri Awas Yojana (PMAY) with enhanced budgetary allocations will be the primary drivers of growth for the cement industry, said the latest annual report of the Aditya Birla group firm.

"Cement demand is closely linked to the housing and infrastructure sector. The industry has been on a volume growth path, motivated by the government's Housing for All by 2022' mission and large infrastructure projects in the pipeline," said Kumar Mangalam Birla in his address to shareholders.

Birla further noted that, "going forward, prospects for the industry in FY22 look bright."

Over the pandemic impacted FY21, Birla said though the cement industry witnessed degrowth of 10-12 per cent due to the COVID-19 pandemic, in the second half (H2FY21) it began to show signs of early recovery.

Discounts to spur cement traffic The Ministry of Railways has decided to grant concession on normal haulage charge per twenty-foot equivalent unit (TEU) for movement of empty specialised tank containers used for transportation of bulk cement, in a move aimed at encouraging shipment of the product by rail.

The concession will be given when such specialised tank containers are moved in one direction fully-loaded and returns empty. The concession will be valid for five years beginning August 1, the Ministry of Railways said in a circular issued on July 16.

The extent of concession on normal haulage charges for transportation of empty containers will be 50 per cent in the first year, 40 per cent in the second, 30 per cent in the third, 20 per cent in the fourth and 10 per cent in the fifth year.

To illustrate, for loaded movement of specialised containers from A to B, the applicable normal haulage charge will be levied. Concession will be given for empty return movement from B to A. If these specialised containers move on any other route, normal haulage charge (without discount) for empty/loaded containers will be levied.

The Ministry of Railways said that the conces-

sion is being granted “as a special case” to provide “consistency and stability in rates” to encourage customers to offer bulk cement traffic to rail.

Cement demand recovers in June; capex calls disregard second wave: Ind-Ra With the gradual easing of lockdowns and premonsoon pent-up demand, June is likely to have registered sequential growth of about 20 per cent in cement volumes, said India Ratings in its report.

The June volumes would be despite rains affecting construction in some parts of the country, resulting in 35-40 per cent year-on-year growth in Q1FY22 on a low base, the report said.

Cement volumes transported through rail rose 22 per cent month-on-month this June.

The month of April is likely to have seen a sequential moderation of around 10 per cent in volumes, owing to the dual impact of the second Covid-19 wave-led state lockdowns and a strong March base. As restrictions intensified due to rising cases, May is likely to have seen a decline of around 25 per cent compared to March, it said.

While volumes are seeing a gradual pick up, continued increase in pet coke, coal and diesel prices, cement companies are likely to see a moderation in EBITDA/tonne in Q1FY22.

Coal prices in Q1FY22 were nearly 50 per cent higher than the FY21 average while pet coke prices were 40 per cent higher.

Diesel prices were up 20-25 per cent year-onyear in Q1FY21 and around 15 per cent higher than the FY21 average.

The increase in commodity prices is likely to lead to an increase in power and fuel as well as freight and forwarding costs as companies gradually exhaust their low-cost inventory.

CCAI Monthly Newsletter July 2021

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GLOBAL Australian banks defend coal exit Australia’s banks have defended their decision to exit the thermal coal sector and pushed back against suggestions from government lawmakers that they be forced to extend financing to fossil fuels.

Senior executives from Australia’s big four banks and the head of the country’s banking association told a parliamentary hearing on July 27 that current skyhigh coal prices are masking “significant” mediumterm uncertainty and risks posed by the sector.

Australia is the world’s largest coal exporter by value, and coal miners are expected to post bumper profits during the full-year reporting season for listed companies in August.

Australia plans 527mn t/yr more coal mining capacity Australia has 26.2mn t/yr of new coal mining capacity committed for construction or under construction, with a further 399mn t/yr having been proven feasible but not yet approved and 102mn t/yr publicly an-

24 | CCAI Monthly Newsletter July 2021

nounced, according to the Australian government's commodity forecaster.

Around 150mn t/yr of the projects not committed but with proven feasibility are thermal coal project in the inland Galilee basin region of Queensland and are dependent on accessing infrastructure to export coal from mines to the coast, which is up to 450km away.

Most of the proponents are waiting to see how successful Adani is in developing the Carmichael mine before committing to their projects.

The remaining feasible projects are thermal coal projects with some having semi-soft coking coal by-products, across NSW and Queensland. Some of these projects are being held up by government approvals or by problems securing funding, as financial institutions remove services from the sector.

Firmer thermal and metallurgical coal prices have prompted some of the smaller developers to push forward with plans that were put on hold last year during the Covid-19 lockdowns, while others are waiting to see how sustainable the current price environment is.

Australia's Stanmore gets approval to develop Queensland coal project Australian coal producer Stanmore Resources (SMR. AX) said it received permits for mining leases from the Queensland state government to start work on its Isaac Downs project.

The government issued leases for the project even as Australia's coal industry faced dwindling support and access to finance due to increasing pressure on their backers to break away from fossil fuels.

Australia, the top coal exporter in the world, remains a laggard in climate change commitments, so far refusing to commit to a target for net zero emissions by 2050, citing the risk of hurting the economy.

The Brisbane-based miner said it would spend A$47 million ($34.62 million) on project development, with total estimated costs of nearly A$82 million including civil construction work.

ing areas in east Kalimantan province and consumers' concerns the outbreak could curb output at a time when prices are near historical highs because of weather-related supply disruptions.

The Indonesian coal mining association (APBI) said that its members already developed action plans last year in the event that Covid-19 cases reach coalproducing areas. These include strict and frequent temperature checks and offsite quarantine facilities for workers that are suspected to have contracted the virus.

Coal producers want operations to remain unhampered as they start increasing production for the latter half of the year to take advantage of higher coal prices. Indonesia's energy ministry (ESDM) said that it has received proposals from over 100 companies requesting revisions of their work plan and budget for the year, which it is processing.

Indonesia produced 292.87mn t of coal in the first half, according to ESDM data, or 47pc of the 2021 government-set output target of 625mn t. The government is targeting exports of 487.5mn t this year.

Indonesian Coal industry expects Indonesia to make biomass cofurther market improvement in firing mandatory in power plants Q3 Indonesian coal miners expect their financial performance to improve in the third quarter of this year, projecting that the upward trend in global coal prices will continue.

Indonesia plans to make the co-firing of biomass in power stations mandatory as part of its efforts to phase out coal power plants, which account for more than 60% of its electricity supplies, an energy ministry director said.

Indonesian Coal Mining Association (APBI) executive director HendraSinadia said growing demand for coal would come both from export markets and domestic industries as economic activity was recovering.

The Southeast Asian country is the world's biggest thermal coal exporter and relies heavily the fuel domestically, but authorities have pledged to start phasing out coal under climate change commitments.

“The [coal] price will still be good in the third quarter, which means the profitability of our coal mining companies is expected to be much higher,” he told The Jakarta Post.

The Indonesian government is preparing a regulation to implement the mandatory co-firing, which would apply to state electricity utility PT Perusahaan Listrik Negara (PLN) as well as independent power producers.

With regard to exports, Hendra added that the increase in the purchasing managers’ index (PMI) from coal-importing countries, such as China and Japan, pointed to a surge in energy demand for rising manufacturing activity.

U.S. coal gets boost from higher gas prices

Indonesian coal producers upbeat despite Covid-19

Rising gas prices are encouraging U.S. electricity generators to raise output from coal-fired units slightly this summer, providing a temporary reprieve for the beleaguered coal mining sector.

The Indonesian coal mining sector is upbeat on its prospects, despite Covid-19 cases reaching produc-

U.S. coal production, which was already in long-term decline, slumped during the first wave of coronaviCCAI Monthly Newsletter July 2021

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rus infections and lockdowns, but has been trending upward since the middle of last year as the economy has recovered.

Mine output averaged 11.7 million short tons per week over the five weeks ending on July 17, up from 9.3 million tons at the same point a year ago, though still down from 13.1 million tons in 2019.

Production is around 18% below the pre-pandemic five-year average, but that is an improvement on a deficit of 40% at the end of May last year, according to estimates prepared by the U.S. Energy Information Administration (EIA).

coal, and some U.S. mines were idled for extended periods to slow the spread of the virus among workers, with exports declining significantly in April 2020.

U.S. coal-fired generation fell 20% year-on-year and exports were 26% lower in 2020 than in 2019.

Coal production in Wyoming, where more coal is produced than in any other state, was 21% lower in 2020 than it was in 2019, while the second-largest producer West Virginia saw an annual slide of 28%, the agency said.

Coal had been the primary fuel for U.S. power plants for much of the last century, but its use has been declining since peaking in 2007.

As a result, EIA forecasts coal consumption will rise to 60-63 million short tons per month in July and August this year, up 53-54 million short tons per month at the same point last year.

US 2021 coal production estimates to rise 14.5% on year: EIA

Weekly US coal train loadings average 81.3 trains/day, up 9.8 trains/day on week: STB

The US is estimated to produce 617.3 million st of coal in 2021, the US Energy Information Administration said in a July 7 report, raising its monthly estimate by roughly 17 million st, or 2.9%, from June to its highest projection for the year.

Weekly US coal train loadings averaged 81.3 trains/ day in the week ended July 16, up 9.8 trains/day from the previous week and up 16.8 trains/day from the year-ago week, Surface Transportation Board data showed July 23.

In the Illinois Basin, loadings averaged 4.1 trains/day, down 1 train/day from the previous week and flat from the year-ago week.

Northern Appalachian loadings jumped 5.6 trains/day from the week before to 8.6 trains/day. Year on year, they rose 2.1 trains/day.

Average loadings in the Central Appalachian basin were 12.3 trains/day, up 2.9 trains/day from the previous week and up 1.2 trains/day from the year-ago week.

In other basins, loadings averaged 6.7 trains/day, up 0.2 train/day week on week and up 2.2 trains/day from the year-ago week.

EIA says U.S. 2020 coal output lowest since 1965 The Energy Information Administration (EIA) said U.S. coal production fell in 2020 to its lowest level since 1965 due to low global demand in the wake of the coronavirus pandemic.

The EIA said the pandemic slowed global demand for

26 | CCAI Monthly Newsletter July 2021

The 2021 production would also be 14.5% higher than the 55-year low 539.1 million st produced in 2020, while the 2022 production estimate rose 0.9% on the month to 610.4 million st, EIA said in its July Short-Term Energy Outlook.

Total consumption, including by petcoke plants and retail, is estimated at 569 million st in 2021 and 536.8 million st in 2022, up from 477.3 million st in 2020.

Coal exports are projected to climb to 83.8 million st in 2021, up from the four-year low of 69.1 million st in 2020. Exports are expected to increase again in 2022 to 99.1 million st.

Thermal coal export volumes are estimated at 36.9 million st in 2021 and 41.7 million st in 2022, up from 27 million st in 2020. The EIA said it assumes the “seaborne steam coal market in 2021 will be more robust with higher demand for US coal.”

The remaining 46.9 million st in 2021 are expected to be metallurgical coal exports, while 2022 exports are projected at 57.4 million st. In 2020, the US exported roughly 42.1 million st of met coal.

Cabinet approves pact with Russia on cooperation for coking coal The Union Cabinet has approved a pact between India and Russia regarding cooperation on coking

coal, a key steel making raw material, for which domestic players remain dependent on imports from a select group of countries. Around 85 per cent of India's coking coal demand is met through imports.

The cooperation with Russia will help India reduce its dependence on far-located countries like Australia, South Africa, Canada and the US for sourcing of coking coal. It will also reduce per-tonne cost of steel production, as Russia is geographically closer compared to the said countries.

The objective of the MoU is to strengthen cooperation between India and Russia in the steel sector. The activities involved in the cooperation are aimed at diversifying the source of coking coal, it said.

The pact shall benefit the entire steel sector by reducing input cost and cost of steel production in the country. It will also provide an institutional mechanism for co-operation in the coking coal sector between India and Russia, the statement said.

China’s June coal imports soar to highest so far in 2021 China’s coal imports in June rose 35% from a month earlier to their highest level in 2021, driven by robust demand from power generation and industrial activity in the country.

China brought in 28.39 million tonnes of the fossil fuel last month, up from 21.04 million tonnes in May, and 12.3% higher compared to June of 2020.

For the first six months this year, China imported a total of 139.56 million tonnes of coal, down 19.7% year-on-year, data from the General Administration of Customs showed.

Several regions in southern China, including Guangdong and Yunnan, ordered factories to stagger operations amid tighter power supply conditions in the second quarter.

Coal fired-power plants are building up inventory as peak summer season kicks off in the country. The Chinese state planner has also been urging power plants, coal miners and transportation hubs to build around 100 million tonnes of deployable coal reserves by the year end.

China will release more than 10 million tonnes of coal from state reserves to ensure steady supply to the market, the state planner said in a statement.

The fifth such release this year will come from dozens of reserve hubs and key ports nationwide, the National Development and Reform Commission said, adding that the government would arrange further releases in line with market demand.

The state planner in April urged power plants, coal miners and major coal transport hubs to boost reserves of the fuel because of concerns over tight supplies and an expected demand surge.

China also increased coal imports in June to the highest level so far this year.

Power loads in several eastern and southern regions, including the business hub of Shanghai, hit historic highs this week as hot weather boosted use of airconditioning and analysts expect that average coal inventories at six coal-fired power plants in eastern China have fallen to less than 15 days worth of consumption.

Africa's top emitter seeks $10 bln for shift from coal South African state power utility Eskom, Africa's biggest greenhouse gas emitter, is pitching a $10 billion plan to global lenders that would see it shut the vast majority of its coal-fired plants by 2050 and embrace renewable energy.

Discussions have already started with development finance institutions like the World Bank and the African Development Bank.

“South Africa can offer you the biggest point source of carbon emissions reduction in the world," said Mandy Rambharos, general manager at Eskom's Just Energy Transition office.

Eskom, which generates more than 90% of the country's electricity chiefly by burning coal, is looking for around $7 to $8 for every tonne of carbon dioxide equivalent it cuts from its greenhouse gas emissions.

Eskom currently emits around 213 million tonnes of CO2 equivalent a year.

China to release more than 10 China’s banks going cool on coal million tonnes of coal from re- power plants in Africa Coal developers in Africa may be forced to find alserves ternative sources of financing or shift into solar and CCAI Monthly Newsletter July 2021

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hydro, as Chinese lenders gradually shy away from plants powered by the fossil fuel, according to observers.

Coal projects worth more than US$20 billion in Africa have either been shelved or cancelled in recent years as environmental activists have piled pressure on lenders. The number could be much higher if distressed projects are added, according to data compiled by the Green Belt and Road Initiative Centre (Green BRI Centre) at the International Institute of Green Finance.

The latest casualty is a US$3 billion coal-fired power plant in Zimbabwe, which China’s biggest bank, Industrial and Commercial Bank of China, reportedly said it would not fund after pressure from green groups.

Yun Sun, director of the China programme at the Stimson Centre in Washington, said other than hydropower, China traditionally had not been a big player in renewable energy in Africa.

Sun said China was speeding up its green finance to belt and road projects in recent years, There will be renewable energy projects and their number could even be increasing. But the traditional projects will play a bigger role for the foreseeable future.

80 per cent of planned coal power plants in India, four Asian nations Asian countries are responsible for 80 per cent of the world’s planned new coal-fired power plants, with India being the second-largest coal power producer with around 250 gigawatt (GW) of operating capacity and 60 GW in the pipeline.

This was revealed in the latest report ‘Do Not Revive Coal’ released by the financial think-tank Carbon Tracker. According to the report, China, India, Indonesia, Japan and Vietnam plan to build more than 600 new units with a combined capacity of over 300GW, ignoring calls from United Nations secretary general Antonio Guterres for all new coal plants to be cancelled.

Stating that around 80 per cent of the operating global coal fleet could be replaced with new renewables with an immediate cost saving, the report added, “By 2024, new renewables will be cheaper than coal in every major region, and by 2026 almost 100 per cent of global coal capacity will be more expensive to run

28 | CCAI Monthly Newsletter July 2021

than building and operating new renewables.”

Spain joins campaign to phase out coal by 2030 as races to renewables Spain joined an international campaign to set a date for closing all coal plants by 2030, signing up to a target it looks well-placed to beat by a wide margin.

The Powering Past Coal Alliance now counts 23 national governments among 133 members united by the desire to speed up the demise of coal-fired power generation and contribute to reining in planet-warming carbon emissions.

The United States and European Union pledged last month to develop green technologies but steered clear of setting a firm end-date for burning coal.

Spain's Energy and Environment Minister Teresa Ribera has long argued that coal will fade out as the costs of emissions permits climb and other sources become ever cheaper. A national climate plan submitted to Brussels last year foresees coal capacity dwindling to zero by 2030.

UK brings forward end to coal power target Britain will bring forward its target to end the use of coal in electricity generation by a year to October 2024, the government said, as part of efforts to spur other nations to move more quickly to cut emissions before a climate summit.

Stopping the use of coal to generate electricity is a major step to limit the rise in global temperatures to 1.5 degrees Celsius above pre-industrial times, which scientists say would avoid the most devastating impacts of climate change.

In a bid to help meet its climate targets Britain has reduced its use of coal in the power sector to less than 2% of the electricity mix in 2020 compared with around 25% five years ago.

Since Britain completed its exit from the European Union last year, Prime Minister Boris Johnson hopes to build London's influence on the world stage by getting countries back on track to meet global climate targets at the United Nations' Climate Change Conference (COP26) in November.

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

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

Monthly Price - FOB USD 115.35 USD 85.91 USD 87.13 USD 92.88 USD 66.99

Monthly Price- FOB INR 9127 INR 7335 INR 6500 INR 6928 INR 4997

Monthly Change (USD) 7.00 12.43 12.97 9.70 6.43

Indicative Pet Coke Price PET COKE

Sulphur

Price

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

-5% + 8.5%

INR 12783 INR 10622 ($142)

Monthly Change ($) INR 1294.00 11.15

USA (CIF)

- 6.5%

INR 12263 ($164)

18.90

Exchange Rate

Change (Monthly)

INR 74.59

0.89

Indicative Coking Coal Price Current Month Monthly Change (USD)

Premium Low Vol FOB CFR China 207.55 311.50 36.02

21.94

HCC 64 MID Vol Semi Soft Low Vol PCI Mid Tier PCI MET COKE 62% CSR FOB Aus CFR China FOB Aus FOB Aus FOB Aus CFR India FOB N China 179.50 272.23 143.28 149.80 148.75 395.50 442.80 4.19

47.41

South African Coal News: * South Africa-origin thermal coal prices, primarily used in sponge iron manufacturing in the steel sector, increased by 9%-11% mom at end-June 2021 on continued supply disruptions in the transportation services to the Richards Bay Coal Terminal in South Africa amid stricter lockdowns post rising infections, limited cargo availability, limited stocks on Indian ports and a sustained high Chinese demand. * One of the main coal export rail lines to South Africa's Richards Bay Coal Terminal (RBCT) has partially reopened following a 31car derailment on 3 July, but the other main line remains closed. The derailment comes at a complicated time for South African coal shippers as South African fob coal prices were

30 | CCAI Monthly Newsletter July 2021

17.09

17.86

17.56

16.50

5.43

already trading at around decade-highs before the derailment with the price of NAR 6000 Kcal/ kg raising to over $115 in July. *The departure of several major coal mining giants has resulted in a shift in the historic ownership trends of South Africa's coal mining operators, and is presenting opportunities for smaller operators to break into the market as coal is set to remain an integral part of South Africa's energy landscape for some time to come. *South African coal companies continue to experience significant rail availability issues and delays. South African coal prices are playing catchup as European power and carbon prices fell a little after significant gains. Eskom is being encouraged to review its timeline of coal plant shutdowns suggesting that the Presidential

Climate Commission and NEDLAC should facilitate stakeholder engagement regarding a Just Transition with the coal value chain.

sky-high coal prices are masking “significant” medium-term uncertainty and risks posed by the sector.

Australian Coal News:

* Record shipments from Australia's port of Gladstone in Queensland to Japan bolstered coal exports from the port to a 17-month high in June even as Beijing continued to disrupt imports of Australian coal. Gladstone shipped a record 2.51mn t of coal to the highgrade market of Japan in June. This, together with strong exports to South Korea and India, underpinned a 23pc increase in total shipments compared to May’21. *Australia’s Whitehaven Coal narrowly beat its annual coal production forecast this week, helped by a record output at its Maules Creek mine, and said it expects strong demand and prices in the coming months. The company was forced to cut its full-year output guidance twice in the last four months due to downtime at its Narrabri mine in New South Wales for additional long-wall equipment repairs. *Australian mining firm Stanmore Coal expects to ramp coal production back up to a rate of at least 2.4mn t/yr during July-December, after cutting sales in April-June to just 293,000t in response to weak coal prices. Stanmore plans to start building its A$82mn Isaac Downs semisoft coking and thermal coal extension to its Isaac Plains mine next month, giving it access to more economic coal and extending the life of the operation by at least 10 years at a maximum operating rate of 2.5mn t/yr. *Australia’s banks have defended their decision to exit the thermal coal sector and pushed back against suggestions from government lawmakers that they be forced to extend financing to fossil fuels. Senior executives from Australia’s big four banks and the head of the country’s banking association told a parliamentary hearing on July 27 that current

Indonesian

Coal

News:

* Global decarbonisation will likely weaken Indonesia's coal exports in the medium to long term, but this could be mitigated by a pickup in exports of base metals. Although Indonesia's coal export destinations have announced plans to shift away from coal, many have ongoing coal power projects that will only begin operating in the years ahead, which could support demand for Indonesian coal in the short term. * Indonesian coal prices have been supported by strong demand from China, which is being boosted in part by the country’s ban on Australian coal imports. Coal demand in Asia-Pacific is expected to increase as more countries start to recover from the effects of the pandemic. Indonesian producers are looking to maximise revenue from their coal sales this year to offset the losses incurred in 2020 when Covid-19 first hit the region. *Rising demand in both domestic and international markets has caused the Indonesian thermal coal price to soar to a record high. Demand from Indonesian power producers have gone up significantly in recent weeks due to low inventory at plant-ends while increased interest from Indian buyers coupled with strong Chinese trading activity has helped high and mid-CV Kalimantan coal prices to boost further. .

US Coal News:

* The surge in the post-pandemic U.S. economy is driving an unexpected boom in coal which is also the latest sign that demand for the dry fossil fuel remains resilient. Key exporters of coal CCAI Monthly Newsletter July 2021

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including Australia and Colombia are currently facing supply problems which have helped lift global prices to a 10-year high and added to international demand for U.S. coal exports. * American coal production this year will swell 15% to meet stronger demand for electricity at home and abroad, according to the newly elected Biden Government in the USA. The growth would be the most since at least 1990 and nearly double the 8% increase projected in May, when the economic rebound was still in earlier stages of recovery. The growing appetite for coal overseas will help boost U.S. exports of the fuel by 21% this year, and another 19% in 2022, the Energy Department has predicted. *As per a recent report published by EIA, U.S. coal production fell in 2020 to its lowest level since 1965 due to low global demand in the wake of the pandemic. The federal agency said that U.S. coal production totaled 535 million short tons (MMst) in 2020, a 24% decrease from the 706 MMst mined in 2019. U.S. coal-fired generation fell 20% year-on-year and exports were 26% lower in 2020 than in 2019. *Rising gas prices are encouraging U.S. electricity generators to raise output from coal-fired units slightly this summer, providing a temporary reprieve for the beleaguered coal mining sector. Mine output averaged 11.7 million short tons per week over the five weeks ending on July 17, up from 9.3 million tons at the same point a year ago, though still down from 13.1 million tons in 2019. .

Pet Coke News: * High prices of US-origin petcoke coupled with extensive freight rates has caused the Indian petcoke buyers to shy away from bidding despite having strong demand in the rejuvenated cement market. Most of the cement manufacturers from India are forced to rely on domestic supply of high- CV seaborne coal as alternatives. However, steep rise in

32 | CCAI Monthly Newsletter July 2021

thermal coal prices in recent weeks have left them with fewer options. * Following the recent trend, US petcoke prices have remained upbeat this week as well supported by tight supply on the Gulf Coast amid consistent demand. While Indian buyers have so far refrained from bidding owing to high freight rates, Chinese and Latin American demand for US Gulf-Coast petcoke has been steady. .

Shipping Update: * India has sent its first export consignment of coal to Bangladesh, after Coal India’s (CIL) policy amendment last month allowing traders, lifting coal from e-auction, to export. The first coal-laden rake left for Bangladesh on July 2 and the coal send was of below 2,200 gross calorific value (GCV), meant for the 1,320 MW Rampal thermal power station, an NTPC and Bangladesh Power Development Board (BPDB) JV, at Khulna in Bangladesh. *Coal shipments to India rose by more than 20 per cent in May compared to the same period previous year but witnessed a slump since then. The import volumes of dry-fuel are expected to remain subdued in the ongoing monsoon season on account of firm prices in the seaborne market coupled with higher availability of domestic coal and higher freight rates. *A recent study by Ricardo and Environment Defense finds that South Africa holds an untapped opportunity to supply the global shipping industry with zero carbon fuels. The production of green hydrogen-derived fuels can help to meet de-carbonization targets and act as a catalyst for the country’s economy – opening new export markets, supporting an equitable transition, and creating the jobs of the future.

PRODUCTION AND OFFTAKE PERFORMANCE OF CIL AND SUBSIDIARY COMPANIES COAL PRODUCTION (Figs in Mill Te) JUL'21

SUB CO.

APR'20 - JUL'21

ACTUAL THIS YEAR

ACTUAL SAME PERIOD LAST YEAR

ACTUAL SAME PERIOD LAST YEAR

% GROWTH

ECL

2.20

2.50

-14.20

10.10

12.60

-19.90

BCCL

2.20

1.60

38.50

8.00

6.40

25.10

CCL

4.10

NCL

9.00

3.10

32.20

17.00

11.70

45.70

8.50

5.50

34.80

35.00

-0.70

ACTUAL % GROWTH THIS YEAR

WCL

2.70

2.00

36.80

13.10

12.40

5.90

SECL

10.00

9.40

5.90

37.70

36.80

2.38

MCL

12.40

10.20

21.90

45.90

43.50

5.60

0.00

0.00

166.60

158.40

NEC CIL

0.00 42.60

37.30

14.10

5.20

OFFTAKE (Figs in Mill Te) JUL'21

SUB CO.

APR'20 - JUL'21

ACTUAL THIS YEAR

ACTUAL SAME PERIOD LAST YEAR

ECL

2.60

3.10

-14.80

13.60

13.30

2.70

BCCL

2.70

1.90

42.00

10.30

5.70

80.80

CCL

4.80

4.70

3.20

23.60

16.10

46.50

NCL

10.00

8.30

20.60

38.40

31.50

22.00

% ACTUAL GROWTH THIS YEAR

ACTUAL SAME PERIOD LAST YEAR

% GROWTH

WCL

4.00

3.00

36.40

20.30

12.30

64.40

SECL

12.60

10.90

15.60

51.50

40.90

26.00

MCL

13.70

11.50

19.50

53.10

44.30

19.90

0.00

0.10

50.50

43.30

16.70

210.80

164.10

NEC CIL

0.00

28.40

CCAI Monthly Newsletter July 2021

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Overall Domestic Coal Scenario Coal Production (in MT) Company CIL SCCL

June, 2021 40.01 5.27

June, 2020 39.23 3.27

% Growth 2.0% 61.0%

April- June, 2021 123.98 15.56

April- June, 2020 121.04 9.50

% Growth 2.4% 63.7%

Overall Offtake (in MT) Company

June, 2021

June, 2020

% Growth

April- June, 2021

April- June, 2020

% Growth

CIL SCCL

51.24 5.46

41.69 2.88

22.9% 89.5%

160.29 16.70

120.80 8.47

32.7% 97.1%

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

June, 2021

June, 2020

% Growth

April- June, 2021

April2020

% Growth

CIL SCCL

39.79 4.59

31.15 2.27

27.7% 101.6%

127.31 13.86

93.89 7.28

35.6% 90.5%

Company

Coal Qty. Allocated June, 2021

Coal Qty. Allocated June, 2020

Increase over notified price

Coal Qty. Allocated April- June, 2021

Coal Qty. Allocated April- June, 2020

Increase over notified price

CIL

2.17

3.62

38%

6.73

7.00

30%

Spot E-auction of Coal (in MT)

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

Coal Qty. Allocated June, 2021

Coal Qty. Allocated June, 2020

Increase over notified price

Coal Qty. Allocated April- June, 2021

Coal Qty. Allocated April- June, 2020

Increase over notified price

CIL

1.59

0.74

13%

7.69

4.84

13%

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

Coal Qty. Allocated June, 2021

Coal Qty. Allocated June, 2020

Increase over notified price

Coal Qty. Allocated April- June, 2021

Coal Qty. Allocated April- June, 2020

Increase over notified price

CIL

0.26

0.56

39%

11.03

6.66

13%

Company

Coal Qty. Allocated June, 2021

Coal Qty. Allocated June, 2020

Increase over notified price

Coal Qty. Allocated April- June 2021

Coal Qty. Allocated April- June 2020

Increase over notified price

CIL

1.72

0.95

15%

1.75

1.48

15%

Special Spot E-auction (in MT)

Special Spot E-auction Scheme 2020 For Import Substitution Company

Coal Qty. Allocated June, 2021

Coal Qty. Allocated June, 2020

Increase over notified price

CIL

0.02

-

10%

34 | CCAI Monthly Newsletter July 2021

Coal Qty. Allocated April- June 2021 0.09

Coal Qty. Allocated April- June 2020 -

Increase over notified price 10%

CCAI Monthly Newsletter July 2021

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