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Domestic
COAL
Coal demand in India to surge by 63% in 2030, says Union minister
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Coal demand is set to peak by 63% by the year 2030. The draft Economic Survey 2021-22 projects coal demand in the range of 1.3-1.5 billion tonnes by 2030. The demand for the nonrenewable energy source is yet to peak in India. Union Minister of Coal, Mines and Parliamentary Affairs Shri Pralhad Joshi said in a written reply in Lok Sabha said that in India, transition away from coal is not happening in foreseeable future. Although there will be push for renewable/nonfossil based energy, but share of coal in the energy basket is going to remain significant in years ahead.
Joshi in his reply also assured that currently there is no scenario of transitioning away from coal affecting any stakeholders involved in coal mining. The union minister also informed that the Ministry of Coal had constituted a SubCommittee to look into holistic closure of abandoned/legacy mine sites and mines closing due to exhaustion of reserves, viability issues etc., and invoving social aspects of mine closure on principles of just transition in addition to physical and environmental closure.
India's Coal Demand is expected between 1.3 to 1.5 BT by 2030
Due consultations were held for finalizing India's approach for negotiations at COP 21 and prior to signing the Paris Agreement. As per Economic Survey, the demand for coal is expected to remain in the range of 1.3 to 1.5 billion tonnes by 2030, said Union Minister of Coal, Mines Shri Pralhad Joshi said in Lok Sabha. He further mentioned, Coal is the most
important and abundant fossil fuel in India and accounts for 55% of the country's energy need. Commercial primary energy consumption in India has grown by about 700% in the last four decades. The current per capita commercial primary energy consumption in India is about 350 kgoe/year. Coal is not only the primary source of energy in the country but is also used as an intermediary by many industries such as steel, sponge iron, cement, paper, brick-kilns etc. Similarly, with increase in growth of industries using coal, their demand for coal has also been increasing; hence, there has been an overall increase in the demand of coal over the years. Being an affordable source of energy with substantial reserve, coal is going to stay as major source of energy in the foreseeable future. Despite push for renewables, country will require base load capacity of coal-based generation for stability and also for energy security..
Pralhad Joshi assures adequate coal supply amid shortage fears
Amid concerns of a persisting supply crunch of coal in the country, Union Minister for Coal, Pralhad Joshi said in the Parliament that there is no shortage of coal in the country. In a written reply to a question in Rajya Sabha, he cited data from the Central Electricity Authority (CEA) and said the coal stock at power plants in the country was 25.14 million tonne as on March 13, 2022. "Coal stock at Coal India Limited (CIL) and Singareni Collieries Company Limited (SCCL) pithead as on 13th March, 2022 is 47.95 million tonne and 4.49 million tonne respectively. In 2021-22 (up to 10th March, 2022), Coal India (CIL) has dispatched 506.29 MT, with a 23% growth over last year," the minister said. Similarly, SCCL and captive coal blocks have dispatched 50.38 million tonne and 77.5 million tonne coal to power sector up to March 10, which is 34.2% and 40% more than the same period of last year, he added.
Coal ministry seeks to ease green norms to boost domestic production
India's coal ministry will seek a relaxation of some environmental norms to help increase the country's overall coal production, coal minister Pralhad Joshi said. Domestic demand for coal has risen considerably because of a steep hike in international prices, Joshi said, according to a press statement issued by India's Ministry of Coal. The minister underscored that sustained supply of coal to the power sector is of paramount importance. He urged CIL and the Ministry of Coal officials to deliberate upon immediate measures required to enhance coal production. Pralhad Joshi has also asked Coal India to complete 35 first mile connectivity projects as per the set deadlines. Recently Coal Secretary said Indian industries, including steel and aluminum makers, will need to continue importing expensive coal shipments to meet their requirement, as the cheaper, domestically produced fuel will be prioritized to power generators. .
Mining Sector Undergoes Reforms to Strengthen Sustainable Mining
The Ministry of Mines implemented Sustainable Mining by making provisions under Chapter-V of Mineral Conservation and Development Rules (MCDR), 2017. Accordingly Rule 35 of MCDR provides for star rating of the mining leases based on the sustainable mining practices adopted by the miners. Union Minister of Coal, Mines and Parliamentary Affairs Shri Pralhad Joshi said in a written reply in Rajya Sabha. The National Mineral Policy 2019 envisions sustainable mining as financially viable; socially responsible; environmentally, technically and scientifically sound mining practices with a long term view of development; optimal use of mineral resources and ensuring sustainable post-closure land uses.
All miners including private miners are following the Sustainable Mining provisions under Chapter V of MCDR 2017 and follow star rating system developed for evaluation of the leases. Star rating has been made mandatory under Rule 35(2) of MCDR, 2017 and every mining lease holder has to submit online self-assessment report before 1st day of July every year for the previous financial year, along with the digital images of mining lease area as per rule 34A of the said rules to the Regional Controller or the authorised officer of the Indian Bureau of Mines.
Domestic Coal Imports Down Around 3.90% On Year In This Fiscal
Ministry of Coal stated in a latest update that the entire demand of coal is not met from domestic production as the supply of high quality coal / coking coal (low-ash-coal) in the country is limited and thus no option is left but to resort to import of coking coal. Further, coal imported by power plants designed on imported coal and high grade coal required for blending purposes cannot be substituted by domestic coal. However, due to increased availability of coal on account of policy measures taken to increase domestic coal production, total coal import declined from 248.54 MT in 2019-20 to 215.25 MT in 2020-21. Further, during April 2021-January 2022, coal import has further decreased to the level of 173.32 MT as compared to 180.56 MT during the corresponding period of previous year, recording a drop of 3.90%.
Coal buyers in India are paying 300% premiums to secure fuel
Indian coal prices have surged in auctions held by the country’s state-run miner, with domestic buyers rushing to secure supplies as global disruptions push up the cost of imported fuels. Customers paid Coal India Ltd. an average premium of more than 340% above baseline prices in two sales this month, according to people familiar with the results, who requested anonymity as they are not permitted to speak publicly. That compares to premiums of about 100% in auctions in January. Coal India, the world’s top producer of the fuel, sells about 15% to 20% of its output through an online auction system in which consumers make offers above a minimum set price. Rates paid are typically far higher than the long-term contracts that account for the majority of sales. Thermal coal loaded at Australia’s Newcastle port, a benchmark for seaborne supply in Asia, soared to a record last week as buyers shun Russian shipments and seek alternatives to pricey natural gas. That’s tightening a global market that was already squeezed by disruptions in other exporter nations.
India’s Russian coal imports could be highest in over two years in March
India’s coal imports from Russia in March could be the highest in more than two years, data from research consultancies showed, as Indian buyers continue buying the fuel from a market that is now increasingly isolated by sanctions. Vessels carrying at least 1.06 million tonnes of coking coal, mainly used for steelmaking, and thermal coal, used primarily for electricity generation, are set to deliver the fuel at Indian ports in March, the highest since January 2020, data from consultancy Kpler showed. Russia, usually India’s sixth largest supplier of coking and thermal coal, could start offering more competitive prices to Chinese and Indian buyers as European and other customers spurn Russia because of sanctions, traders said, adding that the trade could also be boosted by a rouble-rupee trading arrangement.
About 870,000 tonnes of Russian coal have already delivered or are expected to be delivered at Indian shores until March 20, the highest since April 2020, Indian consultancy Coalmint says.
Non-power sector cries foul over downwards revision of coal supplies
Coal India, subsidiaries cut down supplies from 3.6 lakh tonnes per day to 2.75 LTPD, against a daily average requirement of 5 lakh tones. As coal mining PSUs gear up to meet the country’s electricity demand from coal-fired power plants ahead of the peak summer season, non-power sector (NPS) industries have again sounded alarm bells over the constant reduction in their supplies from 3.6 lakh tonnes per day (LTPD) to 2.75 LTPD, against a daily average requirement of 5 lakh tonnes. This comes at a time when the power and NPS sector have cut down on imports due to surging international prices. Besides, industry players said online auctions by the State-run Coal India (CIL) in recent months have witnessed record premiums of more than 100 per cent, thereby escalating cost of the crucial commodity. Aluminium Association of India (AAI), in a letter to PK Mishra, Principal Secretary to the Prime Minister, had said the coal supply crisis has adversely impacted NPS industries, particularly the captive power plants (CPPs) of the highly power intensive aluminium industry, which continues to struggle for un-interrupted coal supplies and is facing depleted stocks of 3-4 days against the prescribed level of over 15 days. Overall coal imports have been consistently heading south since FY20. From the peak of 248.54 mt in FY20, imports fell to 215.25 mt in FY21. During April-January period in FY22, it fell further to 173.32 mt.
Coal India Limited, the largest coal producer in the world has planned to increase all India coal production to the level of 1 BT by 2023-24 and coal production by Coal India Limited to 1 BT by 2024-25 has been prepared. As per the draft report of Niti Aayog, the coal demand is expected to remain in the range of 1,192-1,325 million tonnes by 2030. The following action has also been taken by Government to further enhance the production of coal in the country. -Commercial Auction of coal on revenue share mechanism: Since the Launch of the auction of coal mines for commercial mining in June 2020, a total of 4 rounds of auction have been conducted in which total 292 coal mines were offered. In 3 rounds, 42 coal mines have been successfully auctioned. Further, in respect of 4th round of auction, bids were opened on 02.03.2022 and 2 or more bids have been received in respect of 5 coal mines and 6 coal mines have fetched single bids. -Allowed sale of excess coal production: The Ministry of Coal has amended Mineral Concession Rules, 1960 with a view to allowing sale of coal or lignite, on payment of additional amount to the State Government, by the lessee of a captive mine up to 50 percent of the total coal or lignite produced in a financial year, after meeting the requirement of the end use plant linked with the mine.
Coal India outstanding dues at Rs 15,293.17 crore but no cash crunch in company, subsidiary: Coal Minister
Coal India Ltd and its subsidiaries are not facing any cash crunch even as their outstanding dues were provisionally pegged at Rs 15,293.17 crore as on February 28, the Ministry of Coal said on March 16.
While the gross debt of Coal India and its subsidiaries continues to remain high, it has come down significantly from Rs 22,165.85 crore as of March 31, 2021. In February, Coal India Chairman Pramod Agrawal had said that there was an urgent need to increase prices, and without it, certain subsidiaries will find it difficult to survive. Coal India has faced the challenging task of scaling up production and dispatch amid disruptions due to the pandemic and heavy rains in the fiscal as demand picked up. The company has huge receivables on one hand and on the other hand is unable to increase prices despite rising costs. “At present, there is no cash crunch in Coal India Limited and its subsidiaries. However, gross debtors of Coal India Limited (ClL) and its subsidiaries stood at Rs. 22165.85 crore and Rs. 15293.17 crore (Provisional) as on 31.03.2021 and 28.02.2022,” the ministry said in the statement
RAILWAYS & SHIPPING
More rakes to power sector poised to hit key infrastructure: Railways
With the summer months approaching and power and coal demand expected to touch a record high, the ministry of railways has said it is unable to increase rakes for coal supply. Since last year, the railways has been curtailing rake supply to non-regulated sectors to meet the enhanced demand of the power sector. The ministry is of the view that “any more curtailing will cause crucial infrastructure industries to suffer.” According to the National Power Portal, the current average coal stock at power units stands at 9.4 days, almost close to the critical level stock of seven days. Several non-regulated sectors — ranging from metals to paper — have claimed to have seen low coal supply to the tune of 30-40 per cent of their demand. A senior official said the railways is close to hitting the ceiling of its rake supply to the power sector. “We want the ministry of coal to sort out its issues that are causing supply bottlenecks of approximately 76,000 tonnes of coal every day,” said the official.
STEEL
Indian aluminum mills get fewest coal rail rakes in six months
Railway rakes supplying coal to India’s aluminum plants have dropped to the lowest since the peak of an energy crisis in September, forcing the industry to import more amid rising cost pressures. The industry got an average of 18.4 coalladen carriages a day in the first half of March, the lowest since the 17.8 rakes it received in September, according to data provided by Coal Minister Pralhad Joshi in a written reply to Parliament. Coal is supplied to power plants in India through railways and roads, but buyers located far from mines prefer the trains as road transport is costlier.
Tighter supplies of coal to the aluminum industry, the biggest consumer among nonpower producers in India, comes at a time when the sector is already reeling under surging oil and gas prices. State-run monopoly Coal India Ltd. is diverting more supplies to power plants to avoid a repeat of last year’s shortage, prioritizing citizens over industries. An uninterrupted power supply is critical
for the aluminum mills as it is a continuous process industry, and an outage can cause the molten metal in the pot line to become solid, causing months of shutdowns. The Aluminum Association of India has been seeking government intervention to normalize the situation by earmarking atleast 25-30 coal rakes a day to the sector.
India’s steel exports hit fivemonth peak in February
India's finished steel exports in February surged by 77pc from a year earlier on higher demand from international markets and amid China's absence from the export market early last month on account of the lunar new year holiday. Exports of finished steel also rose by 42.1pc on the month to 1.16mn t, provisional data from the steel ministry's joint plant committee (JPC) show. Finished steel exports during April 2021-February 2022 rose by 30pc compared to the same period a year earlier, to 12.3mn t. Finished steel comprises alloyed and nonalloyed steel. Vietnam was the top export destination for finished steel in February with about 192,000t, followed by Turkey at 129,000t and the UAE at 104,000t, according to Argus calculations. Demand for Indian steel rose in the international market last month with China being away from the export market in early February because of the lunar New Year holiday. Interest from the EU and Turkey also rose.
CEMENT
Cement company assure state to contain costs
South Indian Cement Manufacturers Association (SICMA) has assured the state government to contain cost of cement. They also sought the government’s support to tide over the coal shortages that is affecting the operations and resulting in higher cost of operations. The assurance comes in the wake of reports over an unprecedented spike in the cost of various construction materials including cement in the past two years and adversely impacting individual builders and developers. Earlier this week. SICMA representatives including Ramco Cements, India Cements and others met state industries minister Thangam Thennarasu. In a statement, SICMA president N Srinivasan said there has been a steep increase in the cost of every input material for cement, particularly coal. “In spite of the commodity prices having spiked and the Ukraine crisis affecting petroleum products, transport costs and packing materials, the industry will strive to contain costs,” he said. Compared to prices that were prevailing one year ago, the wholesale price index of cement shows a decline of 3%, he added
Shree Cement commences trial production at Raipur cement plant’s new clinker line
Shree Cement has fired up the kiln of a new clinker line at its Raipur cement plant in Baloda Bazar, Chhattisgarh. The Business Standard newspaper has reported that the company funded the project, involving the reactivation of the Raipur plant’s Kiln 3, from its internal accruals. It has also installed a new waste heat recovery (WHR) plant alongside the kiln. The line will augment Shree Cement’s supply of clinker to its grinding plants in Eastern India. It hopes thereby to contribute to growth and development in Chhattisgarh and beyond.
