CCAI Newsletter June-21

June 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. 03

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CCAI Monthly Newsletter 2021 1 Published on June : 28.06.2021

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From the Editor’s Desk

In a historic decision, Limited shook off its e-auctions and has for under the two auction spot e-Auction scheme.

national miner and coal beh emoth Coal India embargo on coal exports pur chased through the first time allowed the pro curers to export windows - spot e-auction sch eme and special

The Maharatna Company has amended the rules in early June ’21 to allow exports of coal sold und er future auctions, which is expected to create an opportunity for exp orting coal to the neighbour ing countries as international coal prices are on the rise.

The Ministry of Coal is hopefu l that there will be an upsurg e in auction bookings under the two schem es by the domestic players eag er to make a mark in the global coal ma rket. However, shortfall in sup ply from cer tain Subsidiaries of Coal Ind ia Limited and demand-suppl y mis match means that the domestic dem and needs to be fulfilled in conformity with the vision of the Coal Min istry.

Clocking a steady recovery fro m the slump of a pandemic-rid den 2020, country’s coal sector has wit nessed more than 50% per cen t increase in its e-auction coal sales in the first two months of the cur ren t fiscal compared to the correspondin g period a year before as dom estic demand for the dry fuel has significantly recovered in 2021.

Better volumes by CIL in Jun e has triggered hopes of improv ed prospects going ahead as the coal behem oth figures for June registered a 2% yearon-year improvement with coa l production of 40 MT while offtake has grown by a staggering 23%.

Buoyed by the increasing dem and, the national miner is also walking the path of expansion as ongoing coal projects costing Rs 20 cro re and above are under different stages of implementation at present. Com pletion of these projects depend upon crit ical extraneous factors such as possession of land, green clearances and evacuation infrastructure. The re has been persistent persuasion by CIL with state governments for exp editing land authentication in Jharkhand , Odisha, Chhattisgarh, Madhy a Pradesh and Maharashtra.

Both the domestic and global players are keen to observe how CIL would be able to strike a balance bet ween the rejuvenated produc tion figures and growing coal demand in the coming months as well.

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Content Vol. L No. 03 June 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

22

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.

29 Monthly Summary Of

Imported Coal &Petcoke

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Production And Offtake Performance Of Cil And Subsidiary Companies

33 Overall Domestic Coal Scenario

CCAI Monthly Newsletter June 2021

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CONSUMERS’ PAGE Issues faced by both Power and NRS Consumers: 1. Request for extension of lifting period of coal through Road mode: The lifting period of coal at all the Subsidiary coal companies were extended by CIL multiple times in 2021 in view of the pandemic situation which led to massive disruption in road transport, dearth of vehicles and drivers and blockade in inter-state communication due to complete or partial lockdown in different states.

Though the situation had improved further, it would have been almost impossible for many consumers to lift the allotted quantity from various CIL Subsidiaries within the extended time.

Request has been made to CIL to extend the facility to lift coal against RDOs for both Power

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and NRS consumers for FSAs and e-Auction Quantities.

2. Request for early issuance of longpending credit notes and coal value reconciliation for Road-mode consumers by SECL: CInordinate 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 by Power Sector consumers regarding huge grade slippage in coal supplied from specific ECL sidings: Despite temporary improvement in the quality of coal supplied to the Power Utilities from various ECL sidings during February-March’21, the issue of significant grade slippage started reoccurring in the rake supplied from ECL’s Salanpur and Mugma sidings where grade variation to the tune of 4-6 grades could be observed.

This led to massive financial loss to the Power sector consumers.

It has been stated by ECL that through conducting Quality Awareness Week, continuous monitoring and strict vigil on third party sampling have been implemented to eradicate the problem of grade slippage.

Representation swere given to ECL, CIL and the Ministry of coal so that measures could be taken to ensure supply of requisite grade as per FSA to the customers of ECL.

4. Submission by Power sector regarding continuous and significant shortreceipt of coal from Spur Sidings of MCL: Power Sector consumers procuring coal from MCL have been facing the issue of continuous and significant short-receipt of coal supplied from MCL’s Talcher Spur sidings for several months. There has been short receipt to the tune of around 4% in rakes supplied from Talcher area’s Spur- I & II sidings during April and May’21, while short receipt from Spur-III & IV and Spur V & VI sidings has been around 3% - 6% during the same period.

Request has been made to MCL and CIL to take up corrective steps including rectifying or replacing the existing weighbridges at the Spur sidings with the new ones as per RDSO guidelines in order to prevent the short-supply.

5. Request for not calculating compensation towards short-lifting for deemed delivered quantity against carry forward rakes of Power Utilities: Inspite of the provision to carry forward the lapse drake swhich could not be supplied to the Power sector consumers due to production issue / Railway constraints, Utilities procuring coal from SECL stated that due to continue ddemand-supply mismatch and Railway constraints including unavailability of rakes, backlog of carry forward rakes have continued to accumulate.

Thus, the consumers are not getting supply of their value paid rakes allotted to them for an indefinite period which leads to significant financial loss.

Request has been made to SECL and CIL so that option may be offered to the generators not to carry forward rakes which already have huge pendency.

Also, the carry forward rakes which are not supplied to the generators because of production issue / Railway constraints are not taken in the calculation of compensation for short-lifting against deemed delivered quantity.

Issues faced exclusively by the NRS Consumers: 6. Appeal on behalf of NRS consumers regarding urgent requirement of Tranche-V Linkage Auction for Sub-

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sectors 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 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.

7. Request by NRS consumers for inclusion of certain WCL mines in rest of Tranche-V NRS Linkage Auctions: The consumers from Cement, CPP and Other Sub-sectors procuring coal from WCL have requested for the Tranche-V of NRS Linkage Auction for their respective sub-sectors to be conducted immediately and mentioned certain WCL mines including Ballarpur, Tawa I & II, Chattarur I & II in Pathakera area, Nehariya and Urdhan sidings in Pench area and Singhori and Gondegaon sidings in Nagpur area to be including in the upcoming linkage auction.

The requests have been percolated to the WCL authorities.

8. Immediate requirement of coal from ECL for NRS consumers through Exclusive e-Auction:

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Exclusive e-Auction for the Non-power Sector (including CPPs) is generally held on a bimonthly basis by ECL. The auction was last held on 30th March, 2021 and Non-power sector consumers without having Linkage auction FSAs prefer to procure coal through Exclusive e-Auction.

Request has been made to ECL to conduct an Exclusive e-Auction for the NRS consumers at the earliest possible and also ensure that Exclusive auctions can be held regularly on a monthly/bi-monthly basis so that the Industries do not suffer from dearth of fossil fuel.

9. Submission for reviewing the provision of taking additional advance by NCL from NRS consumers availing Usance LC mode of payment: While availing the Usance LC payment option in Rail mode, NRS consumers have to deposit an advance amount equivalent to seven(7) days coal value and a Financial Coverage amount equivalent to 10 days coal value over and above the LC amount.

However, Consumers procuring coal from NCL via Rail mode have pointed out that in addition to the above payments, they also have to deposit a fresh advance to the coal company to ensure that the balanceadvance payment always remains equivalent to not less than onemonth coal value for availing Usance LC modeof payment, which is not levied on the consumers procuring coal from other CIL Subsidiaries. This practice is defeating the very purpose of Usance LC. Request has been made to NCL so that the matter of keeping aditional advance value of one month MSQ (ACQ/12 and converted to no. of rakes) fromNRS consumers procuring coal through Rail Mode from NCL may kindly be considered so that the payment schedule is in conformity with the Usance LC norms formulated by CIL.

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POWER India's actions in consonance with committed global average temperature targets: Energy minister R K Singh India’s actions are in consonance with the target of holding the increase in the global average temperature to below 2°C above pre-industrial levels, power and renewable energy minister R K Singh said.

Singh said India will finalise its energy compacts going forward based on its target of 450 GW renewable energy capacity by 2030, focusing on solar, wind and bio-energy; storage systems, green hydrogen and international cooperation through the International Solar Alliance.

One of the key outcomes of the High Level Dialogue on Energy 2021 will be ‘Energy Compacts’.

Energy Compacts are voluntary commitments from Member States and non-state actors like companies, regional/local governments, non-

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governmental organisations (NGOs) and others. These stakeholders commit to an Energy Compact that includes the specific actions they commit to take to support progress on Sustainable Development Goal (SDG-7).

With about ten years left for the global target for ensuring access to affordable, reliable, sustainable and modern energy for all under the SDG- 7, there is need for strong political commitments, and innovative ways of expanding energy access, promoting renewable energy and increasing energy efficiency, he said.

Govt, industry need to ensure regulations don't hamper investment: Power Secy The government and industry must work together to ensure existing regulations are not unnecessary barriers to investment, Union Power Secretary Alok Kumar said at a virtual two-day

BRICS Green Hydrogen Summit, anchored by state-run power giant NTPC. He was of the view that trade will benefit from common international standards for safely transporting and storing large volumes of hydrogen and having appropriate certificate of origin.

"India has launched an ambitious National Hydrogen Mission to introduce hydrogen purchase obligations for fertilizers, refineries involving private sector in transparent & competitive manner to produce green hydrogen," Kumar noted.

NTPC CMD Gurdeep Singh said, "Five BRICS countries share a common vision of sustainable development and inclusive economic growth. Strengthening energy cooperation and ensuring affordable, reliable, accessible and secure energy for all, has always been a strategic area of importance in the agenda of BRICS countries."

Power consumption sees 8.2 pc growth in May amid slow recovery in commercial, industrial demand Power consumption in the country witnessed an 8.2 per cent year-on-year growth in May at 110.47 billion units (BU), indicating slow recovery in commercial and industrial demand of electricity, according to power ministry data.

The power consumption in the entire month of May last year was 102.08 BU due to the impact of the lockdown imposed to curb the COVID-19.

The slower pace of recovery in industrial demand of electricity in May can be attributed to local lockdown restrictions imposed by states to curb the spread of coronavirus amid the second wave of the pandemic, experts believe.

Moreover, the two cyclones that hit the east and west coast of the country in May resulted in power outages and lesser consumption due to rains in different areas of the country during peak summer season, they said. They are hopeful that the commercial and industrial power consumption as well as demand would rise

in coming days with many states easing local lockdown restrictions imposed to curb the second wave of coronavirus.

During May this year, peak power demand met or the highest supply in a day touched the highest level of 168.78 GW and recorded growth of over 1.5 per cent over 166.22 GW (peak met) recorded in the same month in 2020.

Average spot power price up 10% to Rs 2.83 per unit at IEX Average spot power price has increased over 10 per cent in June to Rs 2.83 per unit compared to same month a year ago at Indian Energy Exchange (IEX) due to low base effect. The average market clearing price was Rs 2.57 per unit in day ahead market (DAM) in May 2020, as per the IEX data.

The market clearing price saw a steep decline of 24 per cent on MoM (month-on-month) basis since average monthly price was Rs 3.70 in the month of April 2021. The sell-bids at 2.2 times of the cleared volume during the month (of May) ensured ample availability of power and discovery of competitive prices thereby providing optimisation opportunities to the distribution utilities, it explained.

According to the statement, IEX traded 6,540 MU of electricity volume in May 2021 achieving 9 per cent YoY (year-on-year) growth amidst continuation of the COVID-19 lockdowns as well the cyclonic disturbances which affected the overall power demand in the country. The real-time electricity (RTM) market witnessed a monthly volume of 1,436 MU with average monthly price at Rs 2.53 per unit seeing 28 per cent MoM decline, it stated.

With sell-side bids at 2.6 times of cleared volume, the market continued to have ample availability of power and competitive price discovery, it explained.

Dues & disputes: IPPs seek larger loan facility for discoms CCAI Monthly Newsletter June 2021

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With state-run electricity distribution companies’ over-dues to private power companies rising 8% on year to Rs 36,018 crore at April end despite the Rs 1.25-lakh-crore PFC-REC loan facility at the discoms’ disposal, even the latest package to bail out the power sector is threatening to come a cropper. Independent power producers (IPPs) have demanded an expansion of the loan facility, even as a large segment of their receivables are disputed by the discoms.

supplying higher or lower than promised quantum of electricity. The ancillary services will be used for maintaining the grid frequency at close to 50 hertz in the event of sudden loss of power supply scheduled from a generator.

The liquidity infusion scheme originally had a size of Rs 90,000 crore and it was meant to to cover the dues till March 2020; it was later expanded include overdue bills unpaid by discoms till the end of June 2020.

To optimise the cost of power for state-run electricity distribution companies (discoms), the Union power ministry has proposed a new electricity market design which will accumulate demand requirements from all states in a central pool, and allocate power to them from the cheapest source available.

“Considering the unfolding burden on the states’ finances at present, the extension of time coverage of liquidity window to cover dues till March 31, 2021, will provide a fallback option to needy states to provide cash liquidity in the system,” Association of Power Producers (APP) said in a letter to the Union power ministry, requesting it to expand the ambit of the PFC-REC loan scheme.

CERC proposes buying balancing power from spot markets The Central Electricity Regulatory Commission (CERC) has proposed a mechanism which allows load dispatch centres to procure a part of power to be used for ‘ancillary services’ from the spot market through electricity exchanges.

In its latest draft ancillary services regulations, CERC said that for tertiary reserve ancillary service, the national load dispatch centre will have to notify power exchanges the quantum of electricity requirement on a day-ahead basis before commencement of the day-ahead-market or the real-time-market. According to experts, demand for tertiary ancillary services from the spot market will range between 1,500 megawatt (MW) and 2,000 MW, and in extreme cases, it can rise to around 5,000 MW. Payment for the ancillary services will be made from the ‘deviation pool account’ where penalties are collected from power generators for

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New system to cut discoms’ purchase cost by Rs 12,000 crore

Under the proposed market-based economic dispatch (MBED), the estimated annual savings is seen to be more than Rs 12,000 crore for the electricity consumers, the government said and has sought stakeholders’ comments on the new mechanism by June 30.

Under the scheme a maximum of 10 companies will be selected in MSME category and a similar number in the non-MSME category. Of the 10 selected companies in the non-MSME category, at least 3 need to be domestic firms.

The pilot phase of the MBED system is proposed to begin from April 2022 and will only involve NTPC’s power plants and is seen to bring in Rs 1,825 crore per year reduction in power procurement cost. The electricity market operations reform through MBED will move towards a “One Nation, One Grid, One Frequency, One Price” framework, the government said.

Scientists develop technique that can generate electricity from vibrations for self-powered devices Scientists have fabricated a simple, cost-effective, bio-compatible, transparent Nano generator that can generate electricity from vibrations all around for use in optoelectronics, self-pow-

ered devices and other biomedical applications, the government said.

“Some of the unconventional methods to generate electricity include piezoelectric, thermoelectric, and electrostatic techniques used in devices like touch screens, electronic displays, and so forth," the statement said.

The turboelectric Nano generators (TENG) make use of mechanical energy in the form of vibrations present everywhere in different forms to generate electricity. The energy harvesting TENG works on the principle of creation of electrostatic charges via instantaneous physical contact of two dissimilar materials followed by generation of potential difference when a mismatch is introduced between the two contacted surfaces through a mechanical force, the statement said.

New coal-fired power plants in India likely to end up stranded: IEEFA Much of India’s 33 gigawatts (GW) of coal-fired power capacity currently under construction and another 29 GW in the pre-construction stage will end up stranded due to competition from renewables, according to the Institute for Energy Economics and Financial Analysis (IEEFA).

“Coal-fired power simply cannot compete with the ongoing cost reductions of renewables. Solar tariffs in India are now below even the fuel costs of running most existing coal-fired power plants,” said Kashish Shah, research analyst at IEEFA and author of the report.

He said that in the past 12 months no new coalfired power plants have been announced, and there has been no movement in the 29 GW of pre-construction capacity.

Despite these headwinds, the Central Electricity Authority had projected that India would reach 267 GW of coal-fired capacity by 2030 which would require adding 58 GW of net new capacity additions – about 6.4 GW annually but the report said that it is ‘highly improbable’.

Power ministry extends timeline for transmission charges waiver for RE The power ministry has announced the extension of timeline by two years for waiver on inter-state transmission charge for electricity generated from solar and wind sources.

Now, the waiver would be available till June 30, 2025. Earlier, it was applicable till June 30, 2023.

Besides, the waiver would now be available for Hydro Pumped Storage Plant (PSP) and Battery Energy Storage System (BESS) projects also.

The order promotes the development of solar, wind, Hydro Pumped Storage Plant and Battery Energy Storage System, trading of RE in the power exchanges and seamless transmission of RE power across the states. The waiver of ISTS charges has also been allowed for Hydro PSP and BESS projects to be commissioned up to June 30, 2025.

The waiver of transmission charges has also been allowed for trading of electricity generated/ supplied from Solar, wind, PSP and BESS in Green Term Ahead Market (GTAM) and Green Day Ahead Market (GDAM) for two years i.e. till 30th June 2023.

Soon, industrial units can buy 100% renewable power Industrial units and businesses across the country will soon be able to meet their entire power requirement via renewable energy (RE) sources, a move that could boost their goodwill image and help reduce their carbon footprint.

Announcing a ‘green tariff mechanism’ towards this end, Union power minister RK Singh said the necessary guidelines would be issued shortly. Currently, in most parts of the country, discoms supply power to industries from a common pool created out of purchases that include thermal and hydel power too, besides RE. However, experts pointed out that green tariffs could vary from state to state, and for discoms which had contracted substantial quantum of CCAI Monthly Newsletter June 2021

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renewable energy in the earlier years — when solar and wind power tariffs were significantly higher than the current rates — the average RE power purchase cost could even be higher than purchase cost of conventional sources of energy.

A provision for a separate green tariff is also seen to reduce the hesitation of discoms in going for power purchase from RE sources, as this mechanism will not impact general tariffs.

In order to manage the infirm nature of RE power, discoms have to make alternative arrangements to procure balancing electricity for stabilising the grid.

IREDA invites bids for setting up solar manufacturing units under PLI scheme State-owned Indian Renewable Energy Development Agency Ltd (IREDA) has invited bids from solar module manufacturers for setting up solar manufacturing units under the Centre's Rs 4,500-crore production linked incentive (PLI) scheme.

The MNRE has appointed IREDA as the implementing agency for the scheme. The Union Cabinet had approved Rs 4,500 crore scheme to boost domestic manufacturing of solar Photo Voltaic (PV) modules.

Only 9% of renewables announced since 2018 currently being installed: Report

The last date for submitting applications is June 30. The selection process for the successful bidders is to be completed by July 30.

Among the 84,408 mega-watt (MW) of largescale renewable energy projects announced since the beginning of 2018, only 8,039 MW are currently under-construction and the remaining capacities are still under various stages of implementation, a report jointly released by Ficci and Ernst & Young pointed.

Domestic manufacturers cry foul; seek additional duties on solar imports

The report, which tracked the development of 332 renewable energy projects of 84,408 MW capacity announced since 2018, found out that tariffs have already been discovered through auctions for 57,154 MW renewable energy projects, but these are under various stages of signing power purchase agreement (PPA), getting approvals from regulators, completing financial closure, land acquisition and seeking permission for grid interconnection.

Currently the installed renewable energy capacity in the country is 95,656 MW, and the report says that cumulative capacity addition in 2021 and 2022 is expected to be 17,100 MW. This pace makes it impossible to achieve the target of 1,75,000 MW of renewable energy capacity by 2022-end.

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In yet another blow to the solar developers in India, the Directorate General of Trade Remedies (DGTR) under the Ministry of Commerce has launched a probe into the dumping of solar equipment by China, Thailand, and Vietnam, based on a complaint by domestic manufacturers.

This could currently put projects with a capacity of 53.6 GW that are currently under construction at stake, out of 7 GW are due for completion by the end of FY21.

Per industry estimates, a back-of-the-envelope calculation for solar projects in India says that $500 million is required to construct per gigawatt worth of projects. This would result in projects worth over $25 billion (over Rs. 1.8 lakh crore) at risk.

Another 24.1 GW of projects were tendered, but auctions were pending as of Q1 FY21.

Currently, a safeguard duty of 14.5% exists on solar imports coming into the country, which expires at the end of July. The Ministry of New

and Renewable Energy (MNRE) has also put in place a basic customs duty (BCD) of 40% on modules and 25% on cells, which will come into effect from April, 2022.

Hydro power major SJVN earns profit of Rs 1,633 crore in 202021 Chairman and managing director (CMD) of public sector SJVN Limited NandLal Sharma has said the company had earned a net profit of Rs 1,633.04 crore during the financial year 2020-21 against Rs 1,557.43 crore earned during the previous financial year 2019-20, registering an increase of Rs 75.61 crore.

He said during the financial year 2020-21, SJVN had netted a total income of Rs 3,213.07 crore against Rs 3,095.24 crore during the past year registering an increase of Rs 117.83 crore. The Earning per share of a face value of Rs 10 has increased to Rs 4.16 against Rs 3.96. he said.

The public sector SJVN had generated 9,224 million units of electricity from its five power stations comprising of two hydro power stations in Himachal Pradesh, two wind power stations and one solar power station in Maharashtra and Gujarat against design energy of 8,700 million units. Sharma also added that SJVN had entered into an agreement with Gujarat UrjaVikas Nigam for implementing a 70 MW solar power plant in Gujarat.

market, is expected to add nearly 20.2 GW of new wind power capacity between 20212025, a growth of 50 per cent compared to the country’s current 39.2 GW installed capacity, according to a recent report.

“The impact of COVID-19 lockdowns on India’s wind energy market was more severe than anticipated, with only 1.1 GW installed out of the 3.3 GW originally forecasted for 2020,” said the report published by Global Wind Energy Council (GWEC) and MEC Intelligence.

It added that the pace of new installations was likely to double over the next two to three years compared to the average annual installations since 2017 when the market began to slow down.

India currently has a pipeline of projects of 10.3 GW in both Central and state tenders, which are expected to drive installations until 2023.

It said that over the next five years, 90 per cent of new installed wind capacity would come from central tenders, followed by corporate procurements and state markets.Wind would be the central axis of renewable energy portfolios as the country moves from renewable energy making up less than 10 per cent of its energy matrix at present, to more than 30 per cent by the end of this decade.

He said SJVN’s financial performance during the fourth quarter of the previous financial year too had been excellent as the company had earned a total income of Rs 1,081.13 crore during the fourth quarter of the financial year 2020-21 against Rs 704.70 crore during the corresponding quarter of the previous financial year registering an increase of around 53.%.

India’s wind energy sector set to register 50 per cent growth over next five years: Report India, the world’s fourth-largest wind power CCAI Monthly Newsletter June 2021

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DOMESTIC Coal sector facing some headwinds from financial markets: Govt

ditional Coal Secretary M Nagaraju said. India, he said, has large industrial groups which have financial strength and technological prowess to undertake mining in the country.

The government said the coal sector is facing a bit of headwind from the financial markets and that could be one of the reasons for global players not participating in commercial coal mine auctions.

Stating the second tranche of auction is the “biggest ever offer of coal mines in the country”, he said the government is offering 67 mines with total reserves of almost 36 billion tonnes.

The peak rate capacity of the explored blocks is 150 million tonnes.

This comes after Coal Minister Pralhad Joshi earlier exuded confidence that in the next round of auctions, there would be participation from global players.

“We had couple of participation with industries in the US and also Indonesia and some other places. We reached out to many people,” Ad-

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NGT directs Centre to file reply on plea against notification on use of coal with higher ash content The National Green Tribunal has granted one

more opportunity to the Centre to file response on a plea against a notification issued by the Ministry of Environment and Forests (MoEF) which allowed thermal power plants the use of coal with higher ash content than permitted earlier. A bench headed by NGT Chairperson Justice Adarsh Kumar Goel said that no response has been filed by the MoEF and the ministries of mines, power and coal even after nine months.

The NGT asked the secretaries of the four ministries to ensure the response is filed within the stipulated time.

The Central Pollution Control Board may file further response about the impact of the impugned policy on the environment, the green tribunal said while posting the matter for hearing on August 18.

The tribunal was hearing a plea filed by NGO 'Say Earth' against the May 21, 2020 notification issued by the MoEF under the Environment (Protection) Act, 1986, permitting the use of coal with ash content higher than permitted earlier which is causing damage to the environment.

Coal India Ltd's coal offtake rises 38% to 55 million tonnes in May State-owned Coal India Ltd on Tuesday said its coal offtake rose by 38 per cent to 55 million tonnes (MT) in May on the back of revival of fuel demand from the power sector.

As coal supplies surged ahead to 55 MT in May, CIL recorded a whopping 15 MT increase in volume terms against comparable month last year, logging close to 38 per cent growth, the statement said. Even compared to pre-COVID May 2019, the growth was 5.8 per cent when the company's off-take was 52 MT, it said.

With the appetite for coal signalling healthy recovery, CIL's supply to power sector at nearly 44 MT in May this year was up by 41 per cent.

The company supplied around 13 MT more to power plants compared to May last year.

Stimulated by increased activity and higher coal consumption, stock at thermal power stations fell by 5 MT in April from that of 28.9 MT at the closure of the last fiscal. However, increased supplies by CIL in May resulted in the coal stock restored to 29 MT at the coal fired plants.

CIL pulls restriction on exporting coal procured through two spot auctions State-owned CIL has removed the restriction on exporting coal procured through two spot auctions. The development assumes significance as the current inventory of coal behemoth is little over 70 million tonnes (MT).

"The country's largest coal producer and supplier has lifted the embargo on exporting coal procured through spot e-auction and special spot e-auction outlets. This is a first of its kind development since the introduction of spot eauction in 2007," it said.

The existing clause 'coal procured under e-auction is for use within the country and not for export' has now been amended, opening the door for export of the dry fuel in two auction categories.

Allocation under spot e-auction and special spot e-auction together accounted for 46 million tonnes of coal in FY21 which was 37 per cent of the total allocated quantity of 124 MT during the year. Spot e-auction at 42.5 MT was the highest allocated quantity under all the five auction windows, in FY21, fetching 25 per cent add on over the notified price.

Coal shipped overseas 'produced' more emissions than India's Coal shipped overseas was responsible for a tenth of global annual energy-related CO2 emissions in 2020. Coal exported in 2020 had the potential to produce 3.1 billion tonnes of CCAI Monthly Newsletter June 2021

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CO2 emissions, which is more than India's annual emissions, a new analysis released by Ember said on Wednesday.

The largest exporters, Australia and Indonesia, would see their domestic emissions more than double if these 'Scope 3' emissions from seaborne coal were included.

The largest exporters of seaborne coal are Indonesia, Australia, Russia, and the US. Indonesia and Australia alone are responsible for 59 per cent of global seaborne coal trade at 370 megatonnes each in 2020.

Only two per cent of exports came from countries outside the top 10 exporters. "Despite its significant contribution to the world's CO2 emissions, the coal export sector and coal exporters have largely avoided scrutiny and responsibility," continued Ember's analyst Fulghum.

Meghalaya Govt. Looks To Regulate Coal Mining In The Sate The Meghalaya Government is looking to streamline coal mining operations in the state.

This comes in the wake of the recent mining tragedy. Incidentally, this is not the first time workers have lost their lives to the gaping holes in Meghalaya’s mining policy.

The Government’s Mining Department is now pushing for the adoption of scientific methodologies while mining coal, under the provisions of Mines and Minerals (Development and Regulation) Act, 1957.

Scientific coal mining will remove unapproved and harmful methods for coal mining. It shall encourage the proprietors to adopt modern technology in mining coal reducing risks to human life during the mining operations.

The National Green Tribunal (NGT) had earlier imposed a ban on illegal coal mining projects in the state. But imposing a ban on rat-hole mining has seen a rise in clandestine and illegal mining in the state.

18 | CCAI Monthly Newsletter June 2021

STEEL

Steel prices hiked again, HRC rate up Rs 3,000/tn Domestic wholesale steel prices have seen a hike of 4.5-6.2% from the beginning ofJune’21 as the prices doubled in the last one year. Industry sources said, with effect from June 1, steelmakers have raised the wholesale price of hot-rolled coils (HRC) by up to Rs 3,000 per tonne taking it to Rs 69,000/tonne in the wholesale Mumbai market. Similarly, the price for cold-rolled coils (CRC) have also been increased by around Rs 5,000 a tonne to Rs 86,000 per tonne.

Buoyant international prices, which have also risen around the same pace in the last one year as in India is driving domestic prices upwards.

The buoyancy is largely due to less availability of the material in the international market following largest steelmaking nation China’s decision to discourage exports by withdrawing 13% duty rebates on exports.

However, despite the latest round of price hike, landed cost of imported steel will still be ruling at around 10% premium over domestic prices.

Sources in the industry said the gap will provide domestic industry a cushion to increase prices further towards the middle of the current month.

The export rebates have reduced Chinese exports in the international markets, which Indian steel players are looking to bridge. With domestic steel prices at a discount to international price, the import risk into Indian domestic market is largely contained. This has also provided optimism to the domestic steelmakers to increase prices.

railways

Indian Railways loads highest ever freight of 114.8 MT in May Indian Railways' Freight made the highest ever loading of 114.8 Metric Tonne (MT) for the month of May and earned Rs 11604.94 crores from freight loading, said Ministry of Railways.

The important items transported during May 2021 includes 54.52 million tonnes of Coal, 15.12 million tonnes of Iron Ore, 5.61 million tonnes of Foodgrains, 3.68 million tonnes of Fertilizers, 3.18 million tonnes of Mineral Oil, 5.36 million tonnes of Cement (excluding clinker) and 4.2 million tonnes of Clinker.

"Wagon Turn around time has seen an improvement of 26 per cent in this month. In May, 2021, wagon turn around time is registered at 4.81 days as compared to 6.46 in May 2019," the statement said.

The ministry said that a number of concessions or discounts are also being given in Indian Railways to make railways freight movement very attractive while the speed of freight trains has been doubled over the last 18 months, saving costs for stakeholders.

NCR putting best efforts to make Railways energy efficient Out of total 6119.55 km, North-Central Railway (NCR) has electrified 5642.91 km of rail track on which 90 per cent of trains are running in the region. The NCR has been able to save Rs 364.27corer worth of diesel oil in the year 202021 which has been considered as a big step towards environment conservation.

In addition, there has been an increased utilization of three-phase electric locomotives that has further helped in conserving energy. The specially designed locomotives have ‘Regenerative Braking’ features which, when used, generate electric energy which is utilized by other

19 | CCAI Monthly Newsletter May 2021

electric-run- locomotives available in the section, an official said.

Apart from this, intensive use of solar power in the division has helped in energy conservation.

During 2020-21 a total of 11 MWp capacity of solar power plants were installed in various divisions including Jhansi, Prayagraj and Agra generating 10.73 million units of electricity and thus adding Rs.5.13 crore to the exchequer.

STEEL

India's crude steel output grows 46.9% to 9.2 mn tonnes in May: Report India registered a 46.9 per cent year-on-year growth in its crude steel output at 9.2 million tonnes (MT) in May, according to worldsteel data. The country had produced 5.8 MT steel in the same month a year ago.

The production of the 64 countries reporting to the World Steel Association (worldsteel) was 174.4 MT in May 2021, a 16.5 per cent increase compared to May 2020 in which China remained the global leader in the production of steel in May. Last month, Japan's output increased to 8.4 MT from 5.9 MT in May 2020. The US produced 7.2 MT steel in the month under review. Its output was at 4.8 MT in May 2020. While Russia's output last month was at 6.6 MT, South Korea produced 6 MT, Germany 3.5 MT, and Iran 2.6 MT. Turkey and Brazil both produced 3.2 MT of crude steel each in May 2021.

Reduction of carbon emissions from Indian steel industry to be gradual: EY Report The trajectory of carbon reduction from the Indian steel industry is likely to be gradual owing CCAI Monthly Newsletter June 2021

| 19

to the age of the blast furnaces used and lack of consolidation in the sector, according to a report by accounting and consultancy firm EY.

improvement will pay off in terms of stable or better operating margins before depreciation, and amortization.

The report said among BRIC nations, especially Russia, China and India, the trajectory of carbon reduction is likely to be more gradual than the one seen in the West. Many of the region’s BFs are less than 15 years old, making replacement uneconomical at this time.

An analyst who wished to be unnamed said, “A key reason why earnings of cement companies have been upgraded in recent times is their intention to protect the pricing.” He added that there will be some improvement in margins in the second half of FY22 but it would not be material enough to offset rising raw material costs.

“In FY23, we estimate 2-3% improvement in margins,” he said. Large cement companies operate at EBIDTA margins of 13-27%.

"Moreover, sector consolidation in China and India, the world’s two largest steel producing countries, is below global average, with many small capacity enterprises operating with less efficiency, more pollutants and a lack of investment in new technologies," the report said.

Indian steelmakers have struggled to gain approval to expand greenfield capacity – brownfield expansions will likely make up most of India’s new production coming online. Controlling emissions will be the central challenge of steelmakers over the decades to come," the report said.

CEMENT

Cement prices stay firm in May despite pandemic The trend in cement prices has remained resilient despite demand disruption amid local lockdown in various parts of the country. This is because the cement makers continue to prioritise pricing over volume gain. All India average cement price improved by 1.1% sequentially in May to Rs 356 per 50 kg bag. Compared with the year-ago level, it was a tad lower by1.3%.

Analysts are bullish on cement companies following firm prices and a gradual relaxation in lockdown across states. They believe the strategy of focusing on prices instead of volume

20 | CCAI Monthly Newsletter June 2021

Net profit of big cement firms surges 29.6% in pandemic-hit FY21: Report Pandemic-hit FY21 has turned out to be a good year for the big cement companies, as their net profits surged and market position strengthened, a report said.

The net profits of 10 major listed cement companies surged by 29.6 per cent on an average in FY21, although aggregate revenues grew modestly by 3.8 per cent, according to an analysis undertaken by Acuite Ratings.

The cement volume growth has been disrupted in the April-June quarter of FY21-22 after the second wave of COVID-19, but the sector is expected to see good a recovery post-monsoon led by the government's thrust on infrastructure activities and housing construction.

Besides, cost rationalisation and low-cost inventory played a key role in the expansion of EBITDA (earnings before interest, taxes, depreciation, and amortization) margins, which went up 349 basis points to 24.3 per cent in FY21.

Price hikes are undertaken by cement players in the latter part of the fiscal, further supported the profitability improvement.

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GLOBAL Coal Prices Hit Decade High Despite Efforts to Wean the World Off Carbon Coal prices have climbed to their highest level in a decade, making the fuel a hot commodity in a year when governments are pledging reductions in carbon emissions.

A shortfall of natural gas, rebounding electricity usage and scanty rainfall in China have lifted demand for thermal coal. Supplies have been crimped by a closed mine in Colombia, flooding in Indonesia and Australia and distorted trade flows caused by a Chinese ban on Australian coal.

Prices for thermal coal—which power plants burn to boil water into steam, spin turbines and generate electricity—have more than doubled

22 | CCAI Monthly Newsletter June 2021

over the past year as a result. Coal delivered into northwest Europe earlier this month hit its highest price since November 2011, having climbed 64% in 2021. Prices for coal exported from Newcastle in Australia, most of which heads to Asia, have risen 56%, according to Argus Media.

Both coal-price benchmarks have outstripped gains in oil, copper and other commodity markets that are benefiting from a vaccine-fired burst of economic activity. The upswing in fuel markets is contributing to higher electricity prices in the U.S. and Europe. Central banks are grappling with a jump in inflation powered in part by rising raw-material costs, though highflying commodities such as lumber have lost steam of late.

Global leaders commit to accelerate transition to clean energy by 2030

Annual investments of 35 billion dollars can bring electricity access for 759 million people who currently lack it and 25 billion dollars a year can help 2.6 billion people gain access to clean cooking between now and 2030, said delegates at the five-day UN ministerial meeting which concluded here on Friday.

The required investment represents only a small fraction of the multi-trillion-dollar global energy investment needed overall, but will bring huge benefits to one-third of the world's population, they said.

The recommendations on energy access are part of a proposed global roadmap with concrete actions to achieve clean, affordable energy for all by 2030 and net zero emissions by 2050 launched by the United Nations to set the groundwork for a large-scale mobilisation of commitments this year.

The proposed roadmap, which will inform the high-level dialogue on energy in September and be considered in the political statement resulting from the summit, is based on reports submitted by five technical working groups that have brought together over 160 experts since March.

China Has Promised To Go Carbon-Neutral By 2060, But Coal Is Still King The walls and ceiling of the Nanshan mine shimmer black, carved straight into a 200 million-year-old coal seam running 1,300 feet underground. Black veins of Jurassic-era coal deposits still thread Shanxi province in China's north, enriching public coffers and keeping generations of miners steadily employed.

Last year, China committed to going carbonneutral by 2060, an ambitious undertaking for a country that still relies on coal for more than half its energy needs. The country has invested heavily in solar, wind and nuclear energy. Yet coal-fired heavy industry still made up about

37% of all its economic activity last year, and some provinces are even planning to increase coal-fired power generation.

China's top leaders haven't specified how they plan to draw down reliance on coal.

"China will strictly control coal-fired power generation projects and limit the increase in coal consumption," China's President Xi Jinping said at an online climate summit convened by President Biden earlier this year. But he shied away from giving a more detailed energy pledge.

Europe and the US keep investing in Chinese coal China’s booming coal industry makes both goals a distant prospect. Producing and burning coal harms the environment, putting biodiversity at risk. Moreover, burning coal is still the largest source of CO2 and is responsible for about one-third of the global temperature increase so far. Coal still accounts for about 60% of China’s present electricity consumption and, with over 1,000 GW of installed capacity, China operates half of the world’s coal-fired power plants.

In 2020, 38.4 GW of new coal-fired capacity was also commissioned. A further 247 GW is under construction or planned, representing 49% of the global coal-fired power plants under development. This is in stark contrast to the repeated pleas of the UN’s secretary-general Antonio Guterres that “no new coal plants should be approved”.

It is well known that China is the EU’s largest trading partner; therefore, many European goods are produced using Chinese coal power.

Less obvious are the global financial flows: even though China’s coal companies are mainly domestically funded, foreign financiers also support the Middle Kingdom’s coal industry.

One-tenth of the money that has flowed into the Chinese coal sector in the last two years

CCAI Monthly Newsletter June 2021

| 23

has come from abroad. Forty-eight international banks have provided USD 21.7 billion for the Chinese coal industry. The lion’s share of this sum was provided in the form of underwriting, namely by issuing shares and bonds.

By far the largest foreign financiers are from the UK and the US. English banks such as HSBC and Standard Chartered have lent USD 5 billion. US banks such as JPMorgan Chase and Citigroup are close behind with USD 4.9 billion. Banks from Japan, Switzerland and France have also sunk over USD 2 billion each into the Chinese coal sector.

Russia is ready supply at least 40 mln tonnes of coking coal to India India asked Russia to supply at least 40 mln tonnes of coking coal annually and Russia is ready to provide this volume, Deputy Energy Minister Anatoly Yanovsky told reporters on the sidelines of the Russian Coal and Mining exhibition.

“We have prepared a draft memorandum of cooperation between the Ministry of Energy of the Russian Federation and the Ministry of Steel Industry of India. While preparing this document, we held several meetings via videoconferencing because of the pandemic and our Indian partners said, that they would like to purchase at least 40 mln tonnes of coking coal from Russia.

Of course, we have the opportunity to ensure such supplies, “Yanovsky said, noting that coal exports from Russia are growing.

According to him, in 2020, despite losses in coal production, Russia managed to increase exports.

“This year, our exports continue to grow following the results of 4-5 months,” the deputy minister said.

Vietnam’s May coal imports decline 24 | CCAI Monthly Newsletter June 2021

Vietnam's coal imports nearly halved in May from a year earlier, as a steady rise in hydropower and renewable energy output pressured coal burn.

Seaborne receipts declined for a sixth straight month in May from a year earlier to 3.81mn t, provisional customs data show, falling from a record monthly high of 7.19mn t in May 2020.

Imports were also down from 3.94mn t in April.

Vietnamese customs data do not differentiate between coking and thermal coal.

The drop comes off a high base in May 2020 when Vietnam's strategy to curb the spread of Covid-19 ensured broad business continuity and supported demand for seaborne coal, helping to take the country's overall 2020 imports to an all-time high. The decline last month underscores softness in the country's demand for imported coal amid stable growth in generation from alternative sources such as hydropower and renewables.

Coal-fired generation of 12.65TWh in May was flat on the year but rose from April's 11.7TWh amid a surge in demand because of hot weather conditions. It accounted for the biggest portion of the country's generation mix. Coal may continue to meet the bulk of Vietnam's energy needs in the coming years despite the country's renewable energy push. Vietnam's government has pared its 2030 target for installed coal-fired capacity, although imported-coalfired generation capacity is still expected to more than triple.

Australia exports record high thermal coal to India Australia exported record high volumes of thermal coal to India in April, as changing trade flows reflect Beijing's ban on imports of Australian coal.

Australia's thermal coal exports of 15.24mn t in

April increased by 14pc from the eight-year low in March but declined by 7pc from April 2020, according to data from the Australian Bureau of Statistics (ABS) supplied through GTT. There were no shipments to China for the fourth consecutive month, with initial shipping data suggesting this continues into early June. Shipments to Vietnam have also declined this year, and together these two factors have lowered January-April total shipments by 10pc on the year.

India, which is in the midst of a Covid-19 surge, has more than compensated for lower imports in the first half of 2020 and Australian exports to the nation hit a record high of 2.46mn t in April.

This may reflect a larger than average discount for low grade 5,500 kcal/kg NAR Australian coal export prices compared to similar grade South African export prices in April. This premium widened in early to mid-May but has since shrunk.

Australian exports continued to move to smaller markets for its coal such as Indonesia, Thailand, the Netherlands, Malaysia, United Arab Emirates, the Philippines and Pakistan, as suppliers continue to look to diversify in response to Beijing's import ban.

Adani group to begin coal export from Australia mine this year The Adani group will export first coal from its Australian mining project this year, riding out a series of lawsuits and public litigation initiated by environmental activists.

The group’s Australian business arm Bravus Mining & Resources on Thursday said it has exposed the first of the coal seams for mining at the Carmichael mine in Australia’s Queensland province.

India will be a ‘foundation customer’ for Carmichael coal and Bravus has already secured the market for 10 million tonnes per annum pro-

duction, agencies quoted company CEO David Boshoff as saying.

“The coal will be sold at index pricing and we will not be engaging in transfer pricing practices, which means that all of our taxes and royalties will be paid here in Australia. India gets the energy they need and Australia gets the jobs and economic benefits in the process,” Boshoff was quoted as saying.

Carmichael coal will contribute to the Adani group's burgeoning energy portfolio that is designed to create a sustainable energy mix, incorporating, thermal power, solar power, wind power and gas.

Anglo American coal spin-off may not be beneficial, says short seller Mining company Anglo American has “massively underestimated” the environmental liabilities associated with a South African coal business that it is spinning off, according to short seller Boatman Capital Research.

Boatman, which has also waged a long-running campaign against engineer Babcock International, claimed in a report published that the clean-up costs for Thungela’s seven mines could be as much as $1.36bn, or nearly three times the amount of money it has currently set aside, because of proposed regulations.

Major miners are under pressure from investors to divest from coal because of its contribution to climate change. Thermal coal is burnt in power stations to generate electricity, a process that is responsible for about 30 per cent of global carbon dioxide emissions.

Rio Tinto sold its last coal mine in 2018, while BHP is also looking to divest its thermal coal business. The demerger will allow Anglo to focus on producing metals that will be in demand during the shift towards clean energy such as copper and platinum.

CCAI Monthly Newsletter June 2021

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It will also test the appetite of London-based investors for coal mining stocks. In a report published last week, the company’s corporate broker Liberum said Thungela could command a market value of $440m to $950m.

Glencore snaps up BHP, Anglo stakes in Colombian coal mine Diversified miner Glencore will become the sole owner of the Cerrejon thermal coal mine in Colombia by buying out partners BHP and Anglo American, boosting its coal assets at a time when others are looking to exit the sector.

Glencore said on Monday it expects to pay $230 million for the combined 66% stake owned by BHP Group and Anglo when the deal completes in the first half of 2022. It sees production volumes at the mine declining materially by 2030.

Mining companies have been reviewing their ownership of thermal coal assets as they transition out of polluting fossil fuels to meet emissions targets and shift towards sustainable investments.

But global demand for coal is expected to jump 4.5% in 2021, after a record pandemic-led drop last year. An increase in coal-fired power generation in Asia, where many countries including China are still building new capacity, accounts for three-quarters of the rebound, the International Energy Agency (IEA) said recently.

Grassy Mountain coal mine in Alberta Rockies not in public interest A joint federal-provincial review has denied an application for an open-pit coal mine in Alberta’s Rocky Mountains, saying its impacts on the environment and Indigenous rights aren’t worth the economic benefits it would bring.

In its 680-page report released Thursday, the panel questioned the ability of Benga Mining,

26 | CCAI Monthly Newsletter June 2021

owned by Riversdale Resources, to control the release of selenium from its proposed Grassy Mountain mine.

“In some cases the claimed effectiveness of the proposed measures was overly optimistic and not supported by the evidence,” the report says. “As a result, we are not confident about the technical and economic feasibility of some proposed mitigation measures.

A spokesman for Riversdale Resources or Benga Mining was not immediately available for comment. Riversdale first filed its environmental impact assessment on the mine in 2016.

Public hearings on the project in southern Alberta’s Crowsnest Pass region were held last fall.

The mine, said Riversdale, would create about 500 jobs during two years of construction and 400 over its 23-year life. The company said it would pay $1.7 billion in royalties and $35 million in municipal taxes over that time.

Weekly US coal train loadings reach 18-month high with 82 trains/d: STB Weekly US coal train loadings averaged 82 trains/day, up 1.8 trains/d from the previous week and up 25.4 trains/d from the yearago week, Surface Board Transportation data showed June 18.

Loadings were at their highest level since the fourth week of 2020.

Only Central Appalachian loadings dipped 0.5 train/d week on week to 12.2 trains/d. From the year-ago week, loadings were up 3.9 trains/d.

Illinois Basin loadings rose the most from the week before, up 2 trains/d to 6 trains/d. Loadings jumped 3.1 trains/d year on year.

In the Powder River Basin, loadings averaged 46.5 trains/d, up 0.4 train/d from the previous week, and up 9.5 trains/d from the year-ago week.

Loadings in the Northern Appalachian basin averaged 10.7 trains/d, up 1.7 trains/d week on week, and up 6 trains/d year on year. In other regions, loadings averaged 6.7 trains/d, up 0.3 train/d from the previous week, and up 3 trains/d from the year-ago period.

US coal exports ticking higher, pushed by high petcoke prices, China US coal exports in April were 24.3% higher year on year at 6.2 million mt, which was down 10.2% from March, according to US Census data released June 9.

The upward trend was also noticeable in the year-to-date comparison, which is up 8.1% compared with the same four-month period in 2020.

On an annualized basis, US coal exports in 2021 would total 74.9 million mt, up 20% from last year.

Exports of bituminous coal, from the Illinois Basin, Northern Appalachia and Central Appalachia, totaled 2.5 million mt in April, down 27.3% from March but up 70.4% from the year-ago month. On a year-to-date basis, bituminous coal exports are up 35.7%.

The top destinations for bituminous coal in April were India, at 1 million mt compared with 436,458 mt in the year-ago month; the Netherlands, at 258,021 mt compared with 163,507 mt last year; and Egypt, at 232,369 mt compared with zero in the year-ago month.

Canada will not approve new thermal coal mining projects Canada will not approve new thermal coal mining projects or plans to expand existing mines because of the potential for environmental damage, Environment Minister Jonathan

Wilkinson said on Friday.

"The government considers that these projects are likely to cause unacceptable environmental effects within federal jurisdiction and are not aligned with Canada's domestic and international climate change commitments," he said.

In a statement, Wilkinson said thermal coal primarily used for generating electricity - was the single largest contributor to climate change.

Canada produced 57 million tonnes of coal in 2019, just 1% of the overall global total. Canadian output in 2019 comprised 47% thermal coal and 53% metallurgical coal, which is used for steel manufacturing, according to official data.

Bangladesh govt scraps plans for 10 coal plants, pursues green options The Bangladesh government has scrapped plans to build 10 coal power plants as it investigates alternative energy sources, including liquefied natural gas.

Among the major projects cancelled by the government is a 1,320-megawatt coal-based power plant on the Moheshkhali Island in southeastern Bangladesh, according to State Minister for Power and Energy Nasrul Hamid.

Bangladesh had approved the construction of 18 coal power plants since 2008.

“It’s now essential for us to generate electricity through more environment-friendly sources,” Hamid said at a media briefing in Dhaka on Sunday, referring to Bangladesh’s role in combating climate change.

Bangladesh chairs the Climate Vulnerable Forum, whose 48 member states represent the 1.2 billion people most threatened by climate change.

CCAI Monthly Newsletter June 2021

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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 74.17 USD 83.18 USD 60.57

Monthly Price- FOB INR 8501 INR 6332 INR 5466 INR 6130 INR 4464

Monthly Change (USD) 10.61 13.04 15.88 5.50 5.42

Indicative Pet Coke Price PET COKE

Sulphur

Price

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

-5% + 8.5%

INR 11489 INR 9655 ($131)

USA (CIF)

- 6.5%

INR 10760 ($146)

Monthly Change ($) INR 132.00 5.50

Exchange Rate

Change (Monthly)

INR 73.70

0.70

12.00

Indicative Coking Coal Price Current Month Monthly Change (USD)

Premium Low Vol FOB CFR China 171.53 289.56 45.35

27.94

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 175.31 224.81 126.19 131.94 131.19 379.00 437.38 59.19

-10.94

South African Coal News: * Seriti Resources has announced in a statement that all conditions of its acquisition of South32 SA Coal Holdings Proprietary Limited (SAEC) have been fulfilled and the sale is expected to be completed on 1 June 2021. South Africa’s main power utility Eskom and Seriti have also agreed to a number of proposals to improve the long-term, sustainable and cost-effective supply of coal to Eskom. * South Africa’s second largest coal export destination Pakistan is planning to bring coal imports to an end. The decision may cause South Africa’s coal imports to drop drastically

24.72

24.09

24.34

2.88

18.63

given that its top export destination India is also working significantly in replacing the import quantity with domestic coal. *The London-listed energy company Kibo Energy PLC, which holds shares in three coal power plant projects in Mozambique, Botswana and Tanzania in Africa has stated that its primary focus going forward will be on renewable energy and that it intends to develop and implement a disposal strategy for its coal assets. * The profitability of South Africa’s mining sector will be negatively affected when the European Union (EU) imposes carbon taxes on imports, which could entail levies on goods imported

CCAI Monthly Newsletter June 2021

| 29

from countries with heavy carbon reliance from 2023. This is owing to South Africa’s reliance on coal-fired electricity. South African president, Cyril Ramaphosa has recently said that a more nuanced approach to carbon taxes ought to be adopted for developing economies.

Australian Coal News: * Despite the worldwide trend of moving towards renewable energy and banning coal, Australia is set to make huge expansion in the dry fuel segment. The country has 31 mtpa under construction and 435 mtpa in planning at present. * The third and final report in the Minerals Council of Australia(MCA) outlines the qualities of Australian thermal coal including higher rank and higher delivered specific energy that enables less coal to be burnt per kilowatt hour of power station output and lower levels of carbon dioxide (CO2) emissions, Superior combustion properties and boiler efficiency because of lower moisture, moderate ash, higher ash fusion temperature, and satisfactory fuel ratio. * The Australian government needs to help fund coal-fired power producers because finance and insurance for coal plants is becoming unaffordable or too hard to secure, experts say.

The issue is coming to a head as investors and activists pressure banks and insurers to stop backing coal-fired plants while the country still needs at least some coal plants for steady power supply. *Overcoming the woes of Corona virus pandemic and the bitter trade war with China that imposed indefinite ban on Australian coal, the country has emerged as world’s second largest exporter of thermal coal, behind Indonesia, having exported some 213-million tonnes in 2019/20 worth around A$20-billion.

30 | CCAI Monthly Newsletter June 2021

Indonesian

Coal

News:

* Indonesia, the world's largest thermal coal exporter, has decided to stop approving new coal-fired power plants with an aim of cutting emissions and expanding renewable energy sources. Jakarta will only allow the completion of plants that are under construction and those that have achieved financial closure, Indonesia's energy ministry (ESDM) said. * Indonesian coal exports are expected to fall 10% from current levels by 2025, analysts say.

Shipments from the world’s biggest thermal coal exporter are expected to fall by 40 million tonnes or around 10% by 2025 as Chinese imports are seen to fall 45%. The country may divert its exports to other growing regions such as India and other Southeast Asian countries, but will face stiff competition from Russia and Australia. * Indonesian officials have cast doubts on a government plan that would somehow see Indonesia phase out all its coal-fired power plants while at the same time build more than a hundred new ones as the plan remains inconclusive regarding what to do with the 117 under-construction or planned coal plants, with a combined capacity of 21 gigawatts, that will come online over the next few years. * Prices of essential commodities such as coal and copper have roughly doubled from a year earlier in Indonesia, helping the resource-rich country book a $2.37 billion trade surplus, the statistics bureau said, which was the highest in six months. * Japanese trading house Mitsui & Co has agreed to sell its stake in Indonesia’s PT Paiton Energy, which operates coal power plants, to RH International (Singapore), a unit of Thai energy firm Ratch group PCL. The move is in line with Mitsui’s plan to sell its remaining stakes in coalfired power stations by the end of the decade and a growing global trend to move away from coal to cut carbon dioxide emissions..

US Coal News:

* The U.S. coal sector has limited access to capital, in large part due to concerns about the industry's environmental impacts and its longterm viability, but some companies have found ways to tap into alternative financing. Increased investor focus on environmental, social, and governance issues has been increasing the pressure on the U.S. coal sector. * According to the U.S. Energy Information Administration (EIA), increase in economic activity and easing of the COVID-19 pandemic have contributed to rising energy use in the United States.EIA expects U.S. coal production to total 600 million short tons (MMst) in 2021, which is 61 MMst (11%) more than in 2020. The increase is driven primarily by rising electricity demand. In 2022, EIA expects coal production to grow by an additional 5 MMst (1%). *US and Canadian coking coal exports to China and Europe rose in the first quarter of 2021. US first-quarter coking coal exports fell by 11.3pc to 9.39mn tones while US exports to China rose by more than fivefold to 2.11mn tones as per latest data. .

Pet Coke News: *Tight tonnage supply and shortage of ships in the Mediterranean region in recent weeks has caused the freight rates soar high in recent weeks resulting in inflated price of imported petcoke. The price may go further up due to the supply of petcoke from Spain and Russia continues to be absent in the coming weeks. *Export of US fuel-grade petcoke has been the highest since 12 months in April’21 at nearly 2.7 million mt. the figure is up by 3% from March. Calcined petcoke export has also reached a 17-month high this year overcoming the downward trends in 2020. China has been the largest importer so far. * The price of US Gulf coast petcoke has

surged upwards in recent week despite low-key interest from the Indian buyers in recent weeks, report shows. The high sulfur petcoke from the US market is in high demand in the market primarily because of a lack of spot supply due to lower refinery utilization but the extensive freight rates are keeping many buyers at bay. .

Shipping Update: *Cargo handled at India’s dozen State-owned major ports soared 31.23% during April-May period to 121.976 million tonnes (mt) from 92.951 mt a year ago. All the major port trusts with the exception of New Mangalore Port Trust handled much higher volumes during the first two months of the fiscal year that began in April from a year earlier. * The Baltic Exchange’s main sea freight index soared to its highest in 11 years in June’21 as rates across all vessel segments were lifted by strong demand for dry bulk commodities. The Baltic dry index, which tracks rates for capesize, panamax and supramax vessels, added 91 points, or 2.9%, to 3,267, its highest level since June 2010. * The Chennai Port is facing a 25 per cent shortage of containers due to supply and demand gap sparking concern among exporters who now have to pay double rates to send consignments as the pandemic has triggered a worldwide shipping crisis. *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.

CCAI Monthly Newsletter June 2021

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

SUB CO.

APR'20 - JUN'21

ACTUAL THIS YEAR

ACTUAL SAME PERIOD LAST YEAR

ACTUAL SAME PERIOD LAST YEAR

% GROWTH

ECL

2.20

3.20

-33.60

7.90

10.10

-21.30

BCCL

1.80

1.60

12.40

5.80

4.80

20.70

ACTUAL % GROWTH THIS YEAR

CCL

3.80

3.40

13.30

12.90

8.50

50.60

NCL

8.00

8.50

-6.90

25.80

26.50

-2.70

WCL

3.20

3.00

4.30

10.40

10.40

-0.10

SECL

9.20

8.90

2.70

27.70

27.40

1.16

MCL

12.00

10.60

13.60

33.50

33.30

0.60

0.00

0.00

124.00

121.00

NEC CIL

0.00 40.00

39.20

2.00

2.40

OFFTAKE (Figs in Mill Te) JUN'21

SUB CO. ACTUAL THIS YEAR

ACTUAL SAME PERIOD LAST YEAR

APR'20 - JUN'21 % ACTUAL GROWTH THIS YEAR

ACTUAL SAME PERIOD LAST YEAR

% GROWTH

ECL

3.10

3.10

0.30

11.00

10.20

8.30

BCCL

2.50

1.50

63.60

7.60

3.80

101.30

CCL

5.60

4.50

25.00

18.70

11.40

63.80

NCL

9.30

7.90

18.30

28.40

23.20

22.50

WCL

4.80

3.50

37.70

16.20

9.40

73.30

SECL

12.70

10.30

23.00

38.90

30.00

29.90

MCL

13.20

10.90

21.60

39.30

32.80

20.10

0.00

0.10

51.30

41.70

23.00

160.30

120.80

NEC CIL

0.00

32 | CCAI Monthly Newsletter June 2021

32.70

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

May, 2021 42.08 5.44

May, 2020 41.39 3.23

% Growth 1.7% 68.5%

April- May, 2021 83.97 10.30

April- May, 2020 81.81 6.23

% Growth 2.6% 65.4%

Overall Offtake (in MT) Company

May, 2021

May, 2020

% Growth

April- May, 2021

April- May, 2020

% Growth

CIL SCCL

55.07 5.79

40.02 2.55

37.6% 127.2%

109.13 11.24

79.11 5.59

37.9% 101.1%

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

May, 2021

May, 2020

% Growth

April- May, 2021

April- May, 2020

% Growth

CIL SCCL

43.53 4.80

31.08 2.15

40.1% 123.5%

86.48 9.28

62.74 5.00

37.8% 85.4%

Company

Coal Qty. Allocated May, 2021

Coal Qty. Allocated May, 2020

Increase over notified price

Coal Qty. Allocated April-May. 2021

Coal Qty. Allocated April-May, 2020

Increase over notified price

CIL

2.03

1.24

29%

4.56

3.38

26%

Spot E-auction of Coal (in MT)

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

Coal Qty. Allocated May, 2021

Coal Qty. Allocated May,2020

Increase over notified price

Coal Qty. Allocated April-May. 2021

Coal Qty. Allocated April-May, 2020

Increase over notified price

CIL

3.92

1.06

10%

6.10

4.09

13%

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

Coal Qty. Allocated May, 2021

Coal Qty. Allocated May, 2020

Increase over notified price

Coal Qty. Allocated April- May 2021

Coal Qty. Allocated April- May 2020

Increase over notified price

CIL

0.42

2.19

33%

10.77

6.10

11%

Company

Coal Qty. Allocated May, 2021

Coal Qty. Allocated May, 2020

Increase over notified price

Coal Qty. Allocated April- May 2021

Coal Qty. Allocated April- May 2020

Increase over notified price

CIL

0.01

0.38

35%

0.03

0.53

26%

Special Spot E-auction (in MT)

Special Spot E-auction Scheme 2020 For Import Substitution Company

Coal Qty. Allocated May, 2021

Coal Qty. Allocated May, 2020

Increase over notified price

CIL

0.00

0.00

0%

Coal Qty. Allocated April- May, 2021 0.06

Coal Qty. Allocated April- May, 2020 0.00

Increase over notified price 10%

CCAI Monthly Newsletter June 2021

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Note

34 | CCAI Monthly Newsletter June 2021

CCAI Monthly Newsletter June 2021

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