CCAI Newsletter May-20

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Vol. XLIX No. 02 Published on : 28.05.2020

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From the Editor’s Desk Ending month’s speculation , India is finally ready to introduce commercial coal mining by ope ning up the country’s dry-fu el sector to private entities without end -use restrictions, a move tha t is expected to unlock the potential of the coal-rich nation to maximise its domestic productions and become ‘self-r eliant’ by steadily reducing imp ort.

The path-breaking initiative, set to launch by mid-June with roughly 50 coal blocks up for auction s, is also thought to be a piv otal towards freeing the coal sector from Government’s controls and ending the monopoly of national miner Coal India Limited.

The first-ever commercial auc tion process is set to introdu ce a bunch of new features including red uced upfront amount, liberal efficiency parameters to encourage flex ibility to operationalise the coa l mines, 100 percent FDI through aut omatic route, reasonable fina nci al terms and revenue sharing model bas ed on National Coal Index.

With easy entry and exit nor ms, major companies from metal, power and cement sectors are exp ected to take par t in the auc tions beside global mining giants like BH P Billiton and Rio Tinto. Am idst dying demand of coal in Europe and USA and India’s conscious tilt towards renewable energy, there is stea dy hope that the private inv estm ents in new mines is will create tho usands of jobs and fetch big rev enues for coal-rich states.

Meanwhile, Coal production by national miner Coal Ind ia Limited dropped by over 11% to 41 .43 million tonnes in May, 2020 on a Year-on-year basis while coa l offtake slumped by 23% for the same period. Tepid power demand in the country caused by the prolonged nationwide lockdown, has see n the coal behemoth’s supply to the power sector to drop. However, CIL ’s coal allocation for the non -po wer sector has rose over three-folds in April-May following a bouque t of consumer friendly initiatives by the com pany.

As industrial activities across the country heads towards normalcy amidst phased exit from the COVID-19 induced lockdown, the demand of fuel is also expected to rev ive in coming months.

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Content Vol. XLIX No. 02 May 2020

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

4, India Exchange Place - 7th Floor Kolkata - 700 001 Landline : +91 33 22304488 / 22621516 E-mail : sec.ccai@gmail.com Website : www.ccai.co.in

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Consumers' Page

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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.

27 Energy Generation Report 28 Monthly Summary Of

Imported Coal &Petcoke

30 Overall Domestic Coal Scenario 36 Monthly Summary Of Domestic Coal 31

Production And Offtake Performance Of Cil And Subsidiary Companies CCAI Monthly Newsletter May 2020

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CONSUMERS’ PAGE Common concerns faced by both Power and Non-Power sectors: 1. Suggestions from consumers’ end towards import substitution: z Presently per unit energy cost from domestic coal is not commensurate with the energy cost from imported coal. This might interest coal consumers to depend on imported coal more as global coal price has crashed following the worldwide outbreak of pandemic this year. z Under the current situation, consumers have suggested for certain measures to reduce domestic coal price including charges applicable later like withdrawal of Evacuation Facility Charges and Surface Transportation Charges (STC) for distance of 0-3 kms. z Consumers still face the issue of grade slippage in domestic coal from various subsidiaries despite several measures by the gov-

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ernment to eradicate this problem. z It is strongly urged that domestic coal price is commensurate with GCV as received at the plant end. z In order to bring in more transparency and consumer satisfaction, coal consumers have appealed for an option to choose Third Party Agency for coal quality assessment. z Coastally located plants opt for imported coal as ocean freight is significantly reasonable for them.

In order to curb the coal sourcing from imported origin, CIL may consider introducing alternative modes of transportation including a combination of Rail/Road and Waterways. CIL may also strengthen logistical parameters and better evacuation facilities to ensure uninterrupted supply of coal.

2. Time bound release of pending credit notes and refund of statutory charges:

Coal companies are liable to issue credit note within seven days of receipt of quality analysis (third party / referee / jointly signed) results.

However, in reality credit notes to be issued by Subsidiaries have been pending for even more than one to two years in many cases. Also, the credit notes are issued to the extent of difference in the Base Price of declared grade and analysed grade of coal. However, differential statutory charges like GST, Royalty, DMF, NMET etc are not refunded. Coal companies are requested to ensure issuance of credit notes within given timeline of FSA in case grade slippage is confirmed.

The concerned authorities have been requested to ensure inclusion of suitable clause in the FSA provisions regarding refund of pro-rata statutory charges.

3. Request for Change in Modalities of Usance LC : In cases of Linkage/Exclusive/Special Forward Auction by Road mode, it is required by the successful bidder to submit a BG of 30 days in addition to the LC amount. For Rail mode, there is an additional requirement of 7-days equivalent coal advance in cash/RTGS. A) CIL has been requested for withdrawal of cash advance of 7 days coal value and requirement of BG against coal value equivalent for one month in Usance LC which is not required in procurement of imported coal.

B) It has been also pointed out that discounting charges of Usance on imported coal is nominal (0.1%) compared to the discounting charges (8-9%) to be borne by consumers for procuring coal from CIL sources which will make domestic coal costlier.

easier for both the utilities and industries to plan their entire operations in a befitting manner.

5. Request for not imposing penalty for Non-lifting/short-lifting during lock down period: During the lockdown period, Power Plants and Industries have been operating under a lot of restrictions, scarce workforce and truncated capacity due to subdued demand.

Therefore, the Consumers across the board have requested that no penalty should be imposed for Non-lifting or short-lifting of quantity against FSAs during this period.

Issues faced exclusively by Power Sector consumers: 6. Deemed delivered quantity: As per the Rakes Carry forward SOP, a consumer can re-indent for the lapsed rakes for the next 3 successive months. However, if the consumer does not re-indent the rakes it is considered as deemed delivered quantity. As a result, the consumer has to pay penalty for lower lifting.

It is requested that if carry forward rakes are not re-indented then it should not be considered as deemed delivery for the consumers.

7. Request for supplying coal more than ACQ without levying PI: The Power Plants that are running with high PLF, have requested CIL to consider supplying coal beyond their annual Contracted Quantity without levying any Performance Incentives (PI).

4. Requests by both the sectors for announcing auction details in advance:

8. Request for Ramping up Production of lower grade coal by ECL:

The consumers from both Power and Non-power sectors have appealed to the concerned authorities to kindly announce the quantity, grade and source of coal to be offered in the upcoming auctions far in advance so that it becomes

TPPs are facing challenges to procure coal from ECL as it is mostly of higher grades (G4G6), which even on energy adjusted basis, is expensive. Higher grade coal pushes up the generation cost, thereby making thermal power prices uncompetitive.

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The Power sector consumers have requested to ramp up production of lower grade coal which is available in the subsidiary’s Rajmahal belt area so that it can be used for power generation.

9. Conversion of BCCL mines from non-coking to washery grades: BCCL re-graded some of the mines from noncoking to washery grades W-V & W-VI. Power plants are finding the usage of this washery grade coal unviable due to its high price difference with non-coking grade with the same GCV value.

Though BCCL slashed down its prices of washery grades IV, V & VI by an average of 10% in May, 2020, the Power plants are still struggling to procure coal as per their MSQ due to the current cash crunch. Request has been made for further reduction of price of BCCL washery grades IV, V & VI wherever possible. Consumers have also requested to fix the price of washery grade coal for power users on As-received GCV basis (ARB).

10. Request for refund of differential GST amount by NCL in case of grade slippage: Some of the CIL subsidiaries are already refunding the differential GST amount to their customers. However, according to some Power sector consumers procuring coal from NCL, the Credit notes issued by NCL does not include the amount for difference in GST. The NCL authority is requested to process refund of differential GST amounts in line with the other CIL Subsidiaries.

11. Appeal for immediate settlement of long-pending refund cases of IPPs from CCL: A number of Power Sector consumers (IPPs) procuring coal from CCL, have large amounts of refund pertaining to excess coal value, pending for settlement for several years which is lead-

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ing to blockage of funds at this crucial juncture.

The affected consumers have requested the concerned subsidiary to settle all the pending refunds without further delay.

Issues faced exclusively by NRS consumers: 12. Request for notified price of coal for NRS consumers to be reduced: Notified price of coal to NRS consumers is higher by 20% compared to Power sector consumers.

It is requested that notified price of coal for NRS consumers be brought at par with the price for Power sector consumers as it may prompt the NRS consumers to choose domestic coal over imported coal.

13. Appeal for proportionate revision of linkage quantity in case of coal grade revision: In certain mines under various Subsidiaries, the lifted coal has been downgraded but the linkage quantity remains the same. As a result, the consumers procuring coal from these mines do not get the required GCV value from the received quantity of coal. It is requested by the NRS consumers to conduct a proportionate revision in linkage quantity in case of coal grade revision by the Subsidiary.

14. Request for clubbing of contracts for large-scale NRS consumers: Major plants from the Non-regulated sector have large number of FSAs with the CIL subsidiaries. This compels the bigger entities to provide a substantial amount of working capital for payment of advances to the coal companies for existing FSAs. Amendment in FSA provision through change of respective policy guidelines is requested for Subsidiary-wise clubbing of contracts so that cash along with BG and LC are consolidated for operational convenience of the consumers as well as the coal companies.

CCAI Monthly CCAI Monthly Newsletter Newsletter November May 2019 2020

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POWER Make state-specific plans for resolving power sector issues: PM to PowerMin In his latest review of the ministries of power and new & renewable energy, Prime Minister Narendra Modi said that since power-related problems vary across regions and states, a onesize-fits-all policy should be avoided.

“The Ministry should put in place state-specific solutions to incentivize each state to improve its performance,” the PM said, according to the official statement by his office.

He also asked the two ministries to ensure the power distribution companies (discoms) publish their performance parameters periodically.

“This is so that the people know how their discoms fare in comparison to the peers,” said the statement.

The finance ministry recently announced a Rs 90,000 crore package for supporting the discoms. This would entail a special loan scheme for the discoms to pay their dues to the power generating stations. As the scheme has strin-

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gent conditions, it is to be seen which all states are able to borrow under this scheme.

The Prime Minister asked the new and renewable energy to have a holistic approach for the entire supply chain of the agriculture sector ranging from solar water pumps to decentralized solar cold storages.

Power minister R K Singh asks Rs 3 trillion from finance commission The 15th Finance Commission recently held a meeting with Power Minister R K Singh and ministry officials on reforms in the electricity sector in states. Singh highlighted the disconnect in the structures of the power system between decision-making by the state and the financial consequences thereof, which are borne by the discoms, leading to losses, an official statement said.

The minister informed the commission that the old schemes of the ministry are being amalgamated into a new scheme for which he requested Rs 3 trillion over five years. This scheme would

primarily focus on steps for reduction of losses, separate feeders for agriculture and smart prepaid meters, the statement said.

Finance Corporation (PFC) and REC against receivables of discoms backed by state government guarantees.

Thermal power plants allowed to use coal with high ash content

The Rs 90,000 crore liquidity injection into discoms, therefore, comes at an opportune time for these generation companies, and can potentially alleviate the interim risks, it stated.

The environment ministry has decided that it will no longer regulate the ash-content of coal used by thermal power plants. The ministry issued a notification that overturned its January 2014 regulation that made it mandatory for all coal-based power plants located 500 kilometres or more from the pit-head or coal mine to use raw or blended or beneficiated coal with no more than 34 per cent ash content.

Under the new norms, thermal power stations will be able to use coal irrespective of ash content and will liable for proper disposal of coal ash and meeting emission standards set by the Central Pollution Control Board.

The notification stresses on use of pollution control technologies by thermal power to meet the particulate matter emission standards. It has also set out norms for disposal of rejects at washeries, management of ash ponds and disposal of ash by power plants. The new regulation makes it compulsory to transport coal in covered vehicles—freight trains and trucks.

Limiting particulate pollution from coal ash has for the most part been the responsibility of the coal-based power plants. The 2014 notification was an attempt to ensure that power plants were best able to do this. Limiting the ash content of coal that could be used in power plants was an attempt to ensure lower levels of particulate pollution. The notification effectively made it mandatory for coal producers to remove impurities from the coal before transporting it to end users such as thermal power plants.

Govt’s Rs 90,000 cr liquidity infusion breather for power generating companies: Crisil Ratings The loans are to be provided through Power

The government’s Rs 90,000 crore liquidity infusion into cash-starved power distribution firms is a breather for generating companies and the move will help 9.4 GW private thermal coal capacities from defaulting post moratorium, CRISIL Ratings said.

The move would help clear a chunk of discoms’ obligations to generation companies (gencos), it said in a statement.

The loans are to be provided through Power Finance Corporation (PFC) and REC against receivables of discoms backed by state government guarantees.

According to the statement, the relief comes at a time when 53 GW coal-based power generation capacities of independent producers excluding 22 GW under debt resolution are facing the ramifications of the liquidity squeeze at distribution companies (discoms).

Power distribution cos in Union Territories to be privatised Focused on eight sectors, the fourth tranche of the Rs 20 lakh crore ‘Atmanirbhar’ economic package saw announcement of several structural reforms in these sectors as part of efforts to boost investments and job creation in the Indian economy.

A large part of the new measures should be seen as Government’s new emphasis of developing ‘self reliant’ country, said economy watchers.

Notable structural reforms announced by the Finance Minister Nirmala Sitharaman in a more than hour long press conference include raising of Foreign Direct Investment limit under the auCCAI Monthly Newsletter May 2020

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tomatic route in ‘defence production’ to 74 per cent from 49 per cent now; increased 30 per cent viability gap funding for social infrastructure projects such as hospitals with allocation of Rs 8,100 crore, corporatisation of ordinance factories; six more world class airports through PPP ( Rs 13,000 crore investments), developing India as global hub for MRO in aviation besides boosting private participation in space activities.

She also reiterated policy reforms in coal sector— commercial mining and focus on Coal Bed Methane Extraction for auction.

The eight sectors that got covered for the structural reforms are coal, minerals, defence production, aviation sector ( airspace management, MRO,), power distribution companies, space and atomic energy.

Households driving up power demand Rural India and urban households are driving up the consumption for electricity and liquid fuels with gradual increase in economic activity but demand remains weak in industrialised regions.

Peak-hour electricity demand in Punjab last week was 15% higher at 8,097 megawatts compared to a year ago. Consumption is higher by 3-5% in Haryana and Rajasthan also, but Gujarat, Maharashtra and Tamil Nadu, which have a high number of Covid cases, are lagging behind as industries are yet to opeerate in full capacity.

In the union territories of Dadra & Nagar Haveli, power consumption fell 48%, while in Daman & Diu it fell 37%.

Electricity demand is inching closer to last year's level but experts feel it is mostly due to hot weather, particularly in the plains of northern India. Andhra Pradesh, Madhya Pradesh, Bihar, Delhi and Uttar Pradesh are closer to last year’s electricity demand level.

Industrial demand on power exchange is substantially lower than the average level but is still about 4-5 times after lockdown restrictions

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have been eased. Prices on India Energy Exchange have been in the range of ₹2.4-2.5 per unit since March.

Power demand inching closer to pre-Covid levels India’s electricity demand is inching closer to the pre-lockdown level due to heat wave conditions across the country, a sigh of relief for thermal power plants which operated at the lowest ever capacities in the last two months.

Data available with Power System Operation Corporation (Posoco) showed that demand for power has been inching upward from below 3,000 million units per day during lockdown to about 3,400 million units now.

Experts said the demand could have reached about 3,550 million units per day but due to Cyclone Amphan consumption from eastern region was reduced over last two days. On May 23, the demand was 3,656 million units against 3,944 million units on May 25, 2019.

The total peak-hour electricity demand has touched 157 GW, similar to pre -Covid level but 12% lower than last year. The peak hour demand could have surpassed the pre-lockdown level of 165 GW but for the cyclone.

Post the nation-wide lockdown, the demand in energy terms had dropped by 30%.

NTPC to enter distribution space, eyes ADAG's two BSES discoms in Delhi State-owned power giant NTPC has decided to foray in electricity distribution business by evincing interest to buy 51 per stake in Anil Dhirubhai Ambani Group's (ADAG) two utilities in Delhi.

The ADAG has two discoms namely BSES Rajdhani Power Ltd (BRPL) and BSES Yamuna Power Ltd (BYPL).

This assumes significance because NTPC is primarily power generation company.

In a letter written to Delhi Electricity Regulatory Commission (DERC) on May 26, 2020, the power giant said, "NTPC has decided to foray into power distribution sector and keen on acquiring the distribution assets (BRPL and BYPL)".

"We have learnt from media reports that ADAG wants to divest its 51 per cent stake in BRPL and BYPL." The company also said, "NTPC is keen to explore the opportunities for acquiring 51 per cent stake in BRPL and BYPL, which are on sale, provided that the equity sale is done through a transparent process".

IEX introduces real-time trading, will help renewable energy companies The Indian Energy Exchange (IEX) will allow real-time trading of electricity from June 1, a move that will facilitate better use of renewable energy.

Under the ‘real time market’ (RTM) product, auctions will be held 48 times a day. Every half an hour, auctions IEX “will run a market for 1 hour and 15 minutes” in which generators and purchasers of electricity will engage. Electricity producers who may see generation more than their committed demand, will offer to sell the surplus energy in the market.

In the absence of this opportunity, they would have to back down generation. Likewise, buyers of electricity will offer to purchase. This is particularly useful to electricity distribution companies who may suddenly be faced with a shortage of supply because of, say, a turbine failure at a power plant.

IEX will take 15 minutes to clear the bids and will then hand over the results to the National Load Dispatch Centre—which (along with State Load Dispatch Centres) routes electricity from various supply sources to consumption points.

NLDC would take another 15 minutes to effect delivery of electricity.

The RTM therefore makes way for better utilization of renewable energy—particularly wind— which is more prone to fluctuations in generation. Ever since renewable energy entered the market the need for a market close to real time was being felt.

PM Modi makes case for each state to have at least one ‘solar city’ Prime Minister Narendra Modi on called for each state to have at least one ‘solar city’ whose electricity needs would be met entirely through rooftop solar power.

The call came in the course of a review of the work of the ministries of power and new and renewable energy, a government statement said.

“He (PM) also emphasized on an innovative model for rooftop solar and desired that each state should have at least one city (either a capital city or any renowned tourist destination)" that will be a “fully solar city through rooftop solar power generation", the statement said.

The move could add heft to India’s image as a global clean energy champion, as the review also focused on creating an ecosystem in India for manufacturing of ingots, wafers, cells and modules.

India is home to the world’s largest clean energy programme, which aims to have 175GW of clean energy capacity by 2022, including 100GW from solar projects. The current capacity is 33GW of solar power.

One Sun One World One Grid’: India initiates talks on West to SE Asia solar grid India has come up with a ‘One Sun One World One Grid’ (OSOWOG) initiative to set up a framework for facilitating global cooperation in this regard aiming at building a global ecosystem of interconnected renewable energy resources that can be seamlessly shared.

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The Union Ministry of New and Renewable energy (MNRE), through this initiative, plans to build global consensus about sharing solar resources among more than 140 countries of West Asia and South East Asia. At a later stage, the project envisages getting this grid interconnected with the African power pools.

ers and global capital providers who despite some policy headwinds are willing to invest in the sector despite some of the lowest real solar tariffs in the world. The tumbling tariffs of solar power, however, have slashed the expectations of returns by investors from 14 per cent to 12 per cent.

The idea is to utilise solar power when the sun is not shining in other parts of the world by building a common transmission system.

India is Making Consistent & Measurable Progress in Energy Transition Since 6 Years: WEF

The MNRE has invited proposals from consulting firms for making a long-term OSOWOG road map, and identify two or three cross-border projects that can be initiated within one or two years, “preferably one with each of Middle East, South East and Africa regions considering India as the grid fulcrum for these identified pilots.”

Prime Minister Narendra Modi, in October 2019, had floated the idea of cross-border solar connectivity. India has already initiated the International Solar Alliance (ISA) which aims to deploy over 1,000 GW of solar generation capacity globally and mobilise investment of over $1 trillion towards by 2030.

Boost for zero-emission sources as global capital backs Indian solar Indian solar power continues to draw foreign capital as plunging tariffs offer ample opportunities to invest in clean, zero-emissions energy sources.

A study jointly commissioned by US-based think tank Institute for Energy Economics & Financial Analysis (IEEFA) and JMK Research & Analytics shows that the current solar tariffs hovering at Rs 2.50-2.87 per unit is 20-30 per cent cheaper than the cost of power generated by existing thermal power stations. Also, the prevailing cost of solar power is nearly half the generation cost of new coal-fired power in the country.

These numbers (as on March 31, 2020) are a testament to the response from solar develop-

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The World Economic Forum (WEF) has released its Energy Transition Index (ETI) report for 2020, which sheds light on the energy system performance and clean energy transition readiness of 115 countries.

The report found that while there have been improvements in energy systems in many countries, they have not been consistent across countries over time. Only 94 of the 115 countries have improved their ETI score in the last six years. These countries represent over 70% of the global population and 70% of global carbon dioxide emissions from fossil fuels. This attests to the overall positive trajectory of the global energy transition, although progress is not smooth and pockets of underperformance exist, WEF noted.

India’s rank now stands at 74, up two places from 76 in 2019. The report noted that India was one of the countries that made consistent and measurable progress in its energy transition in the last six years. Other countries that achieved this are Argentina, Bulgaria, China, the Czech Republic, the Dominican Republic, Ireland, Italy, the Slovak Republic, Sri Lanka, and Ukraine.

The report stated that emerging energy demand centers like India and China have been able to perform better in their energy transition process with strong and steady improvement.

Countries like Brazil, Canada, Iran, and the United States were either stagnant or declining.

Sweden, Switzerland, and Finland were the top three countries according to the WEF’s Index.

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DOMESTIC CIL's coal quota under e-auction Lockdown effect: Core sector for non-power sector up 3-folds output crashes record 38.1% in in Apr April State-owned Coal India's fuel allocation under the exclusive e-auction scheme for the nonpower sector rose over three-folds to 3.91 million tonnes (MT) in April.

Coal India Ltd (CIL) had allocated 1.20 MT of dry fuel to the sector under the scheme in April 2019, as per latest government data.

This growth comes amid CIL looking to tap the non-power sector to consume its coal in the wake of a slump in demand for the dry fuel.

For the entire fiscal (2019-20), the PSU's coal allocation under the scheme dropped to 8.03 MT from 11.36 MT in the previous year.No dry fuel was allocated in March 2020, whereas in the same month of 2019, 1.93 MT of coal was booked under the scheme, data showed.

CIL, which has sufficient stock coal, is grappling with a slump in demand for the dry fuel. The power sector is one of the major consumers of Coal India.

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The output of India's eight core sectors shrank by a record 38.1 per cent in April after a nine per cent contraction in March, as factories remained shut nationwide and production came to a virtual halt amid the coronavirus lockdown.

The core sector contraction in April represented the worst performance in the current series, but experts say the fall was expected and would slowly give way to lower rates of contraction in coming months.

The infrastructure segment experienced the biggest production shocks. Steel production tumbled by a massive 83.9 per cent after March's 24 per cent fall. Cement production shrank by an equally large margin of 86 per cent, following a 25 per cent fall in March. Both sectors have been in the grips of volatility even before the lockdown but strict social distancing norms have meant that construction activities have been suspended across the country.

While it was the sole sector experiencing growth

(4 per cent) in March, coal output reduced by 15.5 per cent in April.

The pace of contraction in electricity demand has narrowed to 14.9 per cent on a Year-on-Year basis in the ongoing month (till May 27, 2020) from the considerable 24 per cent in the previous month.

Elsewhere in the energy space, crude oil production continued its downward spiral for the 19th straight month. However, production saw a relatively small hit in April, contracting 6.4 per cent.

Production of refinery products, a key export item, fell by a major 24.2 per cent. Contraction jumped from just 0.5 per cent in March. Finally, fertiliser output has reduced by 4.5 per cent after reducing 11.9 per cent in March.

Coal supply by Coal India to power sector dips 22% to 32 MT in April State-owned Coal India's supply to the power setor has dropped 22 per cent to 31.95 million tonnes in April amid slump in the fuel demand in the country on account of Covid-19-induced lockdown.

Coal India (CIL) had supplied 40.90 million tonnes (MT) of April, 2019, the coal ministry said in a report.

The coal supply by state-owned Singareni Collieries Company Ltd (SCCL) to the power sector also dropped by 38.6 per cent to 2.86 MT in April, from over 4.66 MT in the year-ago period, the report said.

With the power sector, a major consumer of the dry fuel, witnessing a drop in fuel consumption amid the lockdown, CIL has shifted its focus to overburden removal. The PSU removed 114.43 million cubic metres of overburden in its open cast mines in April 2020, as compared to 104.22 million cubic metres a year ago, registering an increase of 9.7 per cent.

A Central Electricity Authority (CEA) report said that as on April 30, 2020, there were 50.89 MT of coal stocked up at the power houses in India, enough to last for 31 days.

Govt may launch coal blocks auction under commercial mining on Jun 11 The Centre is likely to launch the process of auctioning coal blocks for commercial mining on June 11, pickng around 50 mines for the hammer.

An official on the condition of anonymity said the "government will come out with the notice inviting tender (NIT) for auction of coal mines for sale of coal on June 11."

The coal ministry proposes to launch the auction of coal mines through an event in the national capital followed by a series of events in different parts of the country to create sensitisation on the amendments made in Acts and Rules by the Centre and generate private sector interest and participation, according to a government notice.

The government in May approved a methodology for commercial mining of coal on revenue sharing basis. The decision was taken during a meeting of the Cabinet Committee on Economic Affairs (CCEA) under the chairmanship of Prime Minister Narendra Modi.

The methodology approved by CCEA provides that bid parameter will be revenue share, the government had said adding that bidders would be required to bid for a percentage share of revenue payable to the government.

Indian Thermal Coal Imports in April Shrink 30% The Indian Ports Association, which maintains cargo data handled by these 12 ports, in its latest report said that thermal coal imports at India's 12 major ports saw a 30.5 per cent plunge at 7.8 million tonnes in the first month of the current fiscal as compared to 11.27 million tonnes of thermal coal in the same month of 2018-19.

Imports of coking and other coal too declined 17.07 per cent at 4.27 million tonnes during the month as compared to 5.15 million tonnes of coking coal in the corresponding month last fiscal. Ports like JNPT, Chennai, Cochin and Kamrajar witnessed huge decline in cargo handling.

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Chennai Port saw a massive 38.17 per cent fall in cargo handling to 2.44 million tonnes and JNPT by 33.97 per cent to 3.95 million tonnes in April. Cargo handling at Cochin port slipped 33.73 per cent to 1.87 million tonnes, and Kamrajar Port 30.03 per cent to 2.08 million tonnes.

Govt's commercial coal mining may halve India's import bills; can save up to Rs 45,000cr annually The recent announcement by Finance Minister Nirmala Sitharaman to revamp coal sector by introducing commercial mining move is expected to save massive in regards to India's import bills.

CRISIL says, “Government’s move to open up commercial coal mining can halve the annual expenditure incurred on importing non-coking coal because of substitution through domestic production."

Sachin Gupta, Senior Director said, CRISIL Ratings, “The decision to liberalise coal mining will engender a significant substitution effect by improving the availability of coal, and help meet rising domestic demand. Around half of India’s humongous reserves – most of which are noncoking coal – has not yet been allocated for mining so the potential is substantial.”

As of March 2020, India imported an estimated 180-190 million tonne (MT) of non-coking coal costing over Rs90,000cr. Once commercial mining picks up, independent thermal power plants and captive power plants can substitute their annual imports of 80-90 MT. However, 45-50 MT would continue to be imported by the thermal plants designed to operate only on such feedstock.” Overall, CRISIL expects the move to save up to Rs45,000cr worth import bills.

Niti Aayog warns mines ministry against cancellation of pending claims Niti Aayog vice-chairman Rajiv Kumar has said that any policy change without deciding on pending mining applications will have an adverse impact on investors’ confidence.

As part of major reforms announced recently,

18 | CCAI Monthly Newsletter May 2020

the Centre is reported to be considering deletion of a provision in the Mines and Minerals (Development and Regulation) Act, 2015 that guarantees a successful explorer the right to move ahead --from a reconnaissance permit to a prospecting licence, or from a prospecting licence to a mining lease.

In a recent letter to mines minister Prahlad Joshi, Kumar wrote, “Any move to delete the provisions of 10(A)2(b) without deciding these pending cases will defeat the very purpose for which these provisions were brought in when the amendment to the MMDR was introduced in 2015. Otherwise also, any such move will adversely impact investors’ confidence in policy predictability and judicious implementation of provisions of the Act in a definitive time frame."

Kumar’s letter also refers to media reports to highlight the “serious repercussion such a move may cause on the investment climate of the country”. It points out that the industry has made several representations on applications saved under this provision that states and the Centre had refused to process in the last five years.

Rs 50k-crore investment in coal infra According to finance minister Nirmala Sitharaman, not just fully explored coal blocks, but even partially explored ones will now be auctioned, and 50 assets will go under the hammer soon.

The move is in recognition of the fact that staterun Coal India is expected to ramp up production to 1 billion tonne by 2023-24.

Going the whole hog in ushering in unrestricted commercial terms in India’s long-state-dominated coal mining business, the government has sought to buttress the policy liberalisation steps announced for the sector over the past couple of years, with a host of additional incentives for potential Indian and foreign investors.

Also, early production and in situ coal gasification (syngas) and liquefaction projects will be incentivised through rebates in revenue-share.

Private investors could also seek to grab Coal

Bed Methane (CBM) extraction rights for even the mines owned by public sector Coal India. Additionally, the government seeks to make/facilitate infrastructure investments to the tune of Rs 50,000 crore in the sector, to ease evacuation of coal from pitheads. The proposed investments will include `18,000 crore worth of investments in mechanised transfer of coal (conveyor belts) from mines to railway sidings, the minister said.

RAILWAYS

Derailed by lockdown, Railways sees April revenue tumble by ₹10,000 crore The Railways registered earnings of ₹5,247.25 crore for April, the first full month after the nationwide lockdown was imposed. This was approximately ₹10,000 crore lower than the ₹15,378.45 crore seen in April 2019, Railway data show. The revenue from the freight segment stood at ₹6,016.33 crore, reflecting a 41 per cent drop against the ₹10,285.79 crore seen in the same period last fiscal.

Cargo loading hit Though there were no curbs on rail freight movement during the lockdown, there was a drop in loading of cargo due to various reasons. “The demand for power collapsed, leading to a drop in coal production, which in turn led to a drop in coal loading,” a Railway official explained to BusinessLine.

“Construction stopped, prompting a drop in demand for cement movement. Automobile makers (like Maruti and Tata Motors) did not sell any vehicle, which in turn led to a drop in demand for steel movement. And, as steel factories (including SAIL, RINL and Tata Steel) stared at unsold stocks, there was a drop in demand for iron ore movement to those factories.”

“Open rakes which loaded coal did not face much difficulty in loading and unloading, as they use equipment. But there were challenges in labour availability and, even if labourers were available, there were challenges in moving la-

bourers to goods sheds. This led to challenges in loading and unloading sacks and packets from covered wagons, which are required to move cement, fertiliser and food grain.”

Shortage of Labour and Containers at Ports Leading to Fall in India’s Exports A report by Indian Port Association revealed that country’s 12 major ports witnessed a 21% decline in cargo volumes to 47.42 million tonnes (MT) in April due to the pandemic. These include Deendayal; Mumbai, JNPT; Mormugao New Mangalore; Cochin, Chennai, Kamarajar (earlier Ennore), V O Chidambarnar, Visakhapatnam, Paradip and Kolkata (including Haldia). Of these, Chennai and JNPT ports saw the biggest decline of 38.17% and 33.97% in cargo handling respectively. Rating agency ICRA projects contraction of 5-8% in general cargo and 12-15% in container segment throughout 2020-21.

Indian ports are facing a 50%-60% shortage in cargo containers. Import containers have not been emptied at the ports due to a shortage of labour. Consequently, the freight of containers has spiked by 32%.

The India Cellular & Electronics Association stated that though it expects 30% normalcy by May end, getting labour will turn out to be a big challenge. The cargo shipment restarted in lockdown 1.0, 2.0 and 3.0. However, it again came to a halt as labourers started returning. As a result, Shipments stuck at CFS for 10-15 days due to lockdown.

STEEL

Sharp fall in Indian auto sales to hit steel demand The automobile sector contributes to 10-12pc of India's total steel demand. In the year ending March, automobile output fell by 14.73pc on the year to 26.3mn vehicles. This includes more than 34mn passenger vehicles and 752,022 commercial vehicles. The remainder was dividCCAI Monthly Newsletter May 2020

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ed between two-wheelers, three-wheelers and quadricycles. Total auto sales in the same period dropped by 18pc on the year to more than 23.54mn units.

In March, India's automobile sales fell to its lowest on record as a result of Covid-19 and the lockdown, declining by 33.6pc on the year to 1.44mn vehicles. Passenger vehicle sales fell by 51pc year on year to 143,014 units and commercial vehicles by 88pc year on year to 13,027 units. Automotive steel demand is expected to remain muted for the year ending March 2021 because of low income levels and consumer sentiment following on from the coronavirus.

India's major automobile producers — which include Tata Motors, Maruti Suzuki, Mahindra, Hyundai, India and Nissan India — recorded zero domestic sales in April. Production at these automakers came to a standstill in April following the announcement of a nationwide lockdown on 25 March.

The auto component industry is likely to witness a double-digit decline in the 2020-21 fiscal year on account of disrupted operations due to the pandemic and lockdown, according to a forecast by Mumbai-based ratings agency India Ratings and Research.

Global industry research agency Crisil estimates that auto component production revenue growth will decline by 15-17pc during the financial year. In addition to dampened consumer sentiment and production cuts, lower freight demand will the limit the movement of trucks, weighing on commercial vehicle demand.

India's crude steel output slips 65% to 3.13 MT in Apr: World Steel report India's crude steel output declined over 65 per cent to 3.13 million tonnes (MT) during April, according to the World Steel Association.

The government imposed a nationwide lockdown on March 25 to prevent the spread of the coronavirus pandemic which has impacted production, demand and supply of steel in India.

The country had produced 9.02 MT of crude

20 | CCAI Monthly Newsletter May 2020

steel during the same month a year ago, the World Steel Association (worldsteel) said in a report.

India had posted a 14 per cent decline in steel output at 8.65 MT in March as compared with 10.04 MT in March 2019.

Global steel output also declined 13 per cent to 137.09 MT as compared with 157.67 MT in April 2019. "Due to the ongoing difficulties presented by the Covid-19 pandemic, many of this month's (April) figures are estimates that may be revised with next month's production update," the global industry body said.

China, which had for the first time in many months reported a 1.7 per cent fall in its output in March at 78.97 MT, has started showing growth in production, the data showed. US produced 4.96 MT of crude steel in April, 32 per cent lower than 7.35 MT in the year-ago month.

Japan registered a 23 per cent fall in crude steel production at 6.61 MT in April 2020 as against 8.64 MT in April 2019. South Korea produced 5.50 MT crude steel, down 8.4 per cent from 6 MT in April 2019.

In the EU, worldsteel said, Germany estimated 3 MT of crude steel production in April 2020, down 10.7 per cent from April 2019. Italy's production was down by 30.7 per cent at 1.35 MT.

Steel units to gain as NMDC reduces iron ore prices NMDC on May 9 reduced the price of iron ore by ₹400 per tonne and that of DRCLO (directly reduced calibrated lump ore) by ₹470 per tonne.

On April 4, the mining major had reduced the price of iron ore by ₹500 per tonne and DRCLO by ₹580 per tonne. In a span of one month, it has reduced the iron ore price by ₹900 per tonne and DRCLO by ₹1,050 per tonne.

The main customers of DRCLO are based in Chhattisgarh. The price cuts offer a lot of relief to steel companies, especially the sponge ironbased ones of Chhattisgarh, said the firm.

NMDC said it considered the current iron and steel market scenario before taking an informed decision to rationalising prices.

It may be noted that all the major steel mills are running at reduced capacity because of depleted demand for end-products. Some of the merchant miners at Odisha including OMC reduced iron ore prices by ₹500 per tonne in their recently concluded auctions and could still not dispose of the entire quantity.

CEMENT

India's cement production to fall 25-30% in FY21 as Covid-19 saps demand Cement production in the country is slated to fall by 25-30 per cent this fiscal as Covid pandemic has sucked demand from end user industries. This is billed as the steepest fall for the industry in any year. Capacity utilisation in FY21 is seen at 40-45 per cent.

Even before the onset of Covid-19, cement producers were wrestling with an economic slump.

In the last fiscal, cement output fell by 0.8 per cent as against a growth of 13.3 per cent registered in FY19.

The nationwide lockdown has come at the time when construction activities is at its peak and it will be followed by the monsoon season where again the construction activity will be impacted thereby affecting entire dynamics of demandsupply for cement”, said a report from CARE Ratings.

Due to bleak outlook and unfavourable business conditions, cement companies are unlikely to make fresh additions to existing Capex (Capital expenditure) as demand stays muted. Besides, some of the players are likely to defer Capex spends.Flagging demand in the domestic market has unnerved cement makers as India is the world’s second-largest cement market, both in production and consumption.

The Cement Manufacturers Association, India accounts for eight per cent of the world’s installed capacity. The nameplate capacity of cement manufacturers has increased at a Com-

pounded Annual Growth Rate (CAGR) of 7.1 per cent during FY16-FY20. But prolonged rains and government-enforced nationwide lockdown shrunk the capacity utilisation rate from 70 per cent in FY19 to 61 per cent in FY20.

Cement firms pin hopes on rural demand revival Indian cement companies anticipate revival of demand in the rural areas, paced by sales to individual home building and government-led affordable housing, even as bigger infrastructure and swanky home projects in metro cities remain suspended due to the lockdown curbs and migration of hard-hatted personnel to the hinterland.

But even in the villages, there is no consistency yet in demand. Shree Cement is running at 3540% capacity, and is able to sell only 45-50% of their usual sales. And it’s mostly towards rural consumption. Tier-2 and -3 cities are better placed than metros with less number of cases and limited labour availability issues.

In a recent sector report by Crisil, analysts pointed out that recovery in urban areas will take longer due to higher dependence on migrant workers as against rural areas, where engagement of migrant labourers is just 30% compared with 80-85% for urban regions.

In a recent sector report by Crisil, analysts pointed out that recovery in urban areas will take longer due to higher dependence on migrant workers as against rural areas, where engagement of migrant labourers is just 30% compared with 80-85% for urban regions.

Right after cement companies resumed operations mid-April, dealers and individuals started stocking up on cement in rural areas. However, Narwekar is doubtful if this euphoria will continue.

Even for government-led projects, rural India is better. Affordable housing and NHAI projects are continuing, and the government is also building new hospitals and facilities in rural areas, a positive for cement companies.

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GLOBAL EU's greenhouse gas emissions continue to fall as coal ditched Greenhouse gas emissions in the EU continued their fall in 2018, the latest year for which comprehensive data is available, according to a new report from Europe’s environment watchdog.

Emissions fell by 2.1% compared with 2017, to a level 23% lower than in 1990, the baseline for the bloc’s emission cuts under the UN’s climate agreements. If the UK is excluded, the decline since 1990 was smaller, standing at 20.7%.

The continuing fall, revealed in a report by the European Environment Agency, came as the result of EU-wide and country-specific policies, with energy generation showing the biggest decline in emissions as coal was phased out further and renewable power increased.

Carbon dioxide emissions from transport flattened off in 2018, after rising for the previous four years, giving hope that this major source of emissions may be brought under control.

22 | CCAI Monthly Newsletter May 2020

However, emissions must be brought down much further and faster to satisfy the EU’s obligations under the Paris agreement, campaigners said. Annual falls of about 7% are estimated to be needed to keep global heating within the Paris upper limit of 2C above pre-industrial levels.

The economic turmoil and disruption caused by the coronavirus is likely to result in a short-term drop in emissions, as it has so far this year across the world, but the longer-term impact is unknown.

Coal supply investment still driven by price: IEA Price, not policy, continues to be the key driver impacting investment in coal supply infrastructure, as coal project financing grew by 15pc last year, the Paris-based IEA said in its World Energy Investment 2020 report.

The agency said that coal supply investment follows typical commodity boom and bust cycles, citing Australia as an example. Changes in investment spending between 2011 and 2019 in the world's largest coal

exporter by value are closely aligned to price signals from the preceding period, whereby a decrease in the coal price results in reduced investment, and vice versa.

"On this basis, downward pressure on the coal price in 2020 is likely to be a primary factor affecting investment decisions in 2021," the IEA said.

But economic signals continue to encourage investment in new coal projects, with China and India leading the way in sanctioning new infrastructure. This is because coal still represents more than a third of global electricity generation, remains the secondlargest fuel in the global energy mix after oil and is the second-largest traded bulk commodity after iron ore, the IEA said.

Investment in the coal supply sector — mining and related infrastructure but not coal-fired power plants — grew by 15pc in 2019 to $90bn (€81.8bn). China was the key contributor to this growth, followed by Australia.

China's National Energy Administration and the National Development and Reform Commission approved 201mn t/yr of new coal mining capacity last year, up from 68mn t/yr in 2018 and 28mn t/yr in 2017.

South Africa’s biggest emitters to be exposed to public scrutiny This, he said, would result in large corporates having to face public scrutiny of their air pollution data and anti-pollution plans, in addition to tax on excess carbon emission.

“With two of the largest polluters accountable for 40% of South Africa’s GHG emissions alone, it’s time for businesses and individuals alike to acknowledge that the urgency of the situation requires everyone to accurately quantify, assess and reduce their contributions in order to prevent catastrophic climate change,” Zollner stated in the release to Mining Weekly.

Once lockdown had been lifted, information on 16 of South Africa’s biggest polluters would be released for public examination, including information relating to their annual emissions, their plans to reduce those over five years and audited reports on target progress. This would also serve to emphasise Carbon Tax Act obligations.

Failing to show that they were taking sufficient steps would, Zollner stated, result in a public outcry in addition to an increased tax burden.

“While businesses might feel pressured to reassess their emissions and lower their carbon footprint, quantifying their contribution in order to determine an appropriate decarbonisation framework isn’t that difficult.

“Technology solutions that monitor carbon footprint as well as showing tax liability have made it a simple matter of generating an accurate visualisation and report based on the input of emissions or process data, breaking tax liability down into its relevant emissions sources per emitter site.

The case for turning South Africa's coal fields into a renewable energy hub South Africa is currently one of the world's largest carbon emitters. And it's increasingly being viewed as a pariah that isn't contributing as much as it could to the international fight against global warming and climate change. With a lot of other countries now moving away from fossil fuel-based electricity, there's considerable pressure for South Africa to follow.

More than half of the carbon and associated greenhouse gas emissions in the country are associated with coal power production. Of the 15 large coal plants in operation, 12 are located on the plateau regions of the province of Mpumalanga in the northeast of the country.

In addition to their contribution to global warming, these emissions are also recognised as a major source of air pollution and associated health risk.

Satellite images have identified Mpumalanga as the region with some of the highest and most deadly nitrogen dioxide and sulphur dioxide production in the world.

Coal power plants were preferentially erected adjacent to vast coal deposits. As a result the coal-rich plateau also became South Africa’s electricity generating hub.

But, as elsewhere in the world, South Africa is increasingly looking at alternative energy sources.

In its most recent Integrated Resource Plan for electricity, the government has set out a power generation road-map that foresees the addition of about 20 000 MW of solar and wind farms. This amounts to 25% of the projected total power generated in South Africa in 2030.

CCAI Monthly Newsletter May 2020

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China to Finance & Build a Massive New Coal Power Plant in Zimbabwe

cent between February and May as pandemic lockdowns crimped demand, but prices have been steady between $US113 per tonne and $US120 per tonne for the past three weeks.

The Zimbabwean government announced last month that construction of the new $3 billion Sengwa coal power plant will proceed after years of negotiation.

Renewable energy eats into coal's share of electricity grid in Australia

The new 2,800 megawatt plant will be a joint effort between Zimbabwe’s Rio Energy and a consortium of Chinese state-owned enterprises led by the Wuhanbased infrastructure contracting giant China Gezhouba Group.

Australia's reliance on coal-fired electricity is waning as new figures reveal renewable energy now accounts for more than 20 per cent of the nation's power, passing a new record.

Gezhouba will be the lead contractor and will also be responsible for raising additional capital. Separately, Power China will build a 250km water pipeline for the plant along with transmission lines. And on the financing side, the Industrial Bank of China will be involved and Sinosure is already on board to provide risk insurance.

While coal and gas-fired power remain dominant in the energy mix, together accounting for 77 per cent, the latest data from the Energy Department shows renewable energy's share of total power generation has continued to surge on the back of a 46 per cent rise in solar output last year and a 19 per cent increase in wind power.

Officials say everything’s line up and ready to go which could be good news for electricity starved Zimbabwe that currently produces just over half of the 2,200 megawatts that Zimbabwe needs every day.

Renewable energy - including wind power, hydro power, large-scale solar and rooftop solar panels - rose from a combined 19 per cent share in 2018 to 21 per cent in 2019.

Australia: Coal prices find a floor as mines face outages

Gas-fired power generation increased 6 per cent, with a 21 per cent share of the energy mix.

Coal supply from Australia is poised to dip with as many as three local mines facing outages in coming months.

Confirmation from Peabody Energy and New Hope that winter disruptions were likely at three Australian mines could provide some much needed support for coal prices, which slumped dramatically during April.

New Hope said its flagship Bengalla thermal coal mine in NSW would shut down in July for 80 days to enable maintenance to go ahead on a major piece of mining equipment called a dragline.

Bengalla was on track to produce about 8 million tonnes of coal in the year to June 30, and a further 2.2 million tonnes of annual coal production capacity could also be idled if Peabody goes ahead with curtailment of the nearby Wambo underground mine.

After slumping 27 per cent between February and early May, prices for top quality NSW thermal coal steadied in the past three weeks, and were incrementally higher on May 26 at $US51.90 per tonne.

Prices for premium hard coking coal slumped 30 per

24 | CCAI Monthly Newsletter May 2020

Although coal's share declined from 60 per cent to 56 per cent, Energy and Emissions Reduction Minister Angus Taylor said the figures demonstrated the "continuing importance of coal" in Australia's energy mix and also highlighted a "growing reliance on gas".

Australian coal seeks alternate markets to China Australian coal mining firms are looking for alternate markets for their thermal and coking coals, as the threat of a trade dispute with China ramps up with the imposition of an 80.5pc tariff on imports of Australian barley.

Diplomatic relations between China and Australia have been strained in recent weeks after Canberra called for an investigation into the early stages of the Covid-19 outbreak. Beijing argues that the barley tariffs are part of an anti-dumping investigation that was started prior to the emergence of the pandemic.

Canberra said it will not respond to the new tariff, but the industry is concerned about a ramping up of trade tensions, particularly given reports that China is clamping down on import quotas of Australian cok-

ing coal and may be planning to suspend imports of Australian thermal coal from 1 July.

China is better able to use coal as a trading threat to Australia than iron ore because it has alternate sources of supply, both domestically and from other exporting nations, for coal.

Australian coal mining firms are looking to diversify cargoes to southeast Asia, particularly Vietnam, and to try to build market share in more mature markets in north Asia, in case access to China becomes more difficult. Many do not think that China will be able to stop delivery of Australia coal, but are concerned about its ability to curtail it.

According to statistics, coal stocks at ports have dropped by more than 8 million tonnes from last month’s high. A short-term mismatch between supply and demand in ports has rapidly taken shape, according to analysts.

Indonesian coal miners suffer impact from India’s lockdown Indonesian coal miners are struggling with slow demand this year as businesses in India, one of the country’s major coal markets, hit the brakes due to a prolonged lockdown to contain the COVID-19 outbreak, a data firm has said.

China's imports of Australian thermal and coking coal were strong in the January-March quarter, as the market reopened following a filling of Chinese import quotas in the second half of 2019, according to the latest Australian Bureau of Statistics data.

April also seems to have been a reasonably strong month, according to port data. But initial shipping data show fewer ships being loaded at some key ports in the first half of May.

The South Asian country’s coal imports, a commodity mostly used for power generation, is projected to decrease by 19.1 percent year-on-year (yoy) to 149 million tons, according to IHS Markit.

China’s benchmark power coal price edges up

The consultancy initially projected Indonesian coal exports at 419 million tons before India announced an extended lockdown and before market conditions worsened in Southeast and East Asia, which are Indonesia’s other major coal export markets.

The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of coal prices in north China’s major ports, stood at 528 yuan (about 74.3 U.S. dollars) per tonne, up 2 yuan week on week, according to Qinhuangdao Ocean Shipping Coal Trading Market Co. Ltd. Analysts said that a rebound in the index came due to factors including the limited domestic raw coal production, a year-on-year increase in power plant coal consumption demand, the expected tightening of coal import policies and a jump in spot coal prices at ports.

As India’s demand slows, IHS Markit projects a 10 percent yoy decline in Indonesian coal exports to 406 million tons this year, from last year’s figure of 451 million tons.

Indonesia’s trade balance recorded a deficit of US$350 million in April, as exports fell 7.02 percent, on the back of falling commodity prices and plummeting global demand due to the pandemic.Indonesia’s two most profitable coal miners last year, privately owned PT Adaro Energi and state-owned PT Bukit Asam (PTBA), previously highlighted India’s lockdown as notable risks going into the second quarter, aside from declining local demand.

CCAI Monthly Newsletter May 2020

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CCAI Monthly Newsletter May 2020

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66.21

57.68

79.07

42.17

14

13

APR- 2020

1,330,000.00

7,230.00

ACTUAL*

NUCLEAR

Source CEA

43,880.00

140,357.00

PROGRAM

283,012.29

0.00

THERMAL

Category

TOTAL

BHUTAN IMP

6,780.00

45,699.22

NUCLEAR

HYDRO

2

1,138,533.00

1

230,533.07

APR 2020 TO MAR 2021

Monitored Capacity (MW)

THERMAL

Category

SUMMARY- ALL INDIA

81,045.22

258.00

10,121.42

3,860.08

66,805.72

4

ACTUAL*

67.34

63.12

15

ACTUAL SAME MONTH 2019-20

5

109,263.44

239.70

11,072.61

3,287.32

94,663.81

69.80

49.05

104.17

139.15

64.80

57.68

66.21

16

79.07

42.17

17

PROGRAM ACTUAL*

6

% OF PROGRAM (4/3)

67.34

63.12

18

ACTUAL SAME PERIOD 2019-20

APRIL 2020 - Apr-2020

PLANT LOAD FACTOR (%)

116,116.00

526.00

9,716.00

2,774.00

103,100.00

3

PROGRAM

ACTUAL SAME MONTH 2019-20

APR-2020

AN OVERVIEW

74.17

107.63

91.41

117.42

70.57

7

% OF LAST YEAR (4/5)

116,116.00

526.00

9,716.00

2,774.00

103,100.00

8

PROGRAM

GENERATION (GWH)

ACTUAL*

81,045.22

258.00

10,121.42

3,860.08

66,805.72

9

PERIOD : APRIL, 2020

109,263.44

239.70

11,072.61

3,287.32

94,663.81

10

ACTUAL SAME PERIOD 2019-20

69.80

49.05

104.17

139.15

64.80

11

74.17

107.63

91.41

117.42

70.57

12

% OF LAST % OF PROGRAM YEAR (9/10) (9/8)

APRIL 2020 -Apr-2020

ENERGY GENERATION REPORT

MONTHLY SUMMARY OF IMPORTED COAL & PETCOKE

Coal Price Index COAL

(kcal/kg)

Weekly Price - FOB

Weekly Price

Monthly Change (USD)

- FOB

Weekly Change (USD)

USD 54.81

INR 4146

-11.52

South Africa

5500 NAR

USD 40.80

INR 3086

-10.48

Australia

5500 NAR

USD 42.84

INR 3240

-12.02

Indonesia

5000 GAR

USD 38.53

INR 2914

-8.77

Indonesia

4200 GAR

USD 27.13

INR 2052

-5.31

USA

6000 NAR

USD 49.64

INR 3755

-2.43

PET COKE

Sulphur

Price

Weekly Change (INR)

India-RIL(Ex-Ref.)

-5%

INR 5892

-978.00

Saudi Arabia (CIF)

+ 8.5%

INR 4349 ($58)

-6.50

USA (CIF)

- 6.5%

INR 4481 ($59)

-6.75

Exchange Rate

Change (Weekly)

INR 75.64

-0.44

Coking Coal Price: Premium Low Vol Current Week

Weekly Change (USD)

HCC 64 MID Vol

Semi Soft

CFR China FOB Aus

Low Vol PCI

Mid Tier PCI

FOB Aus

FOB Aus

CFR India

FOB N China

MET COKE 62% CSR

FOB

CFR China

FOB Aus

114.00

122.06

90.31

98.13

61.81

67.56

63.78

250.75

254.75

-14.60

-14.84

-25.42

-22.73

-5.84

-9.09

-11.54

-10.15

7.75

South African Coal News: *Coal miner MC Mining said limited activities had commenced at its Uitkomst colliery in South Africa after the government there started easing lockdown measures. Uitkomst would ramp-up to 50% capacity within seven-to-10 days, the company said, in line with government restrictions. * The development of mines in sub-Saharan Africa by Chinese firms will slow in the coming quarters due to logistical challenges posed by the global Covid19pandemic. The activities may pick up again in 2021, experts say. * Eskom plans to delay the closure of three of its

28 | CCAI Monthly Newsletter May 2020

oldest coal-fired power plants in order to maintain generation capacity. The state owned company submitted documents to the Centre for Environmental Rights (CER) of Grootvlei, Camden and Hendrina mines so that they may operate until as late as 2030.

The three mines have the capacity to produce about 4,600MW.

Australian Coal News:

* At current spot thermal coal prices most of Australia's producers are struggling to make profit, including some of the biggest mining firms. UKAustralian mining firm BHP has guided for an average

operating cost of $55-61/t at its New South Wales energy coal division The NAR 6,000 kcal/kg price is assessed at $50.75/t fob. Newcastle and the lowergrade NAR 5,500 kcal/kg price at $40.39. * Glencore has greeted 2020 with a steep decline to its Australian coking coal production, but its thermal coal portfolio offset the blow.

The company produced 1.8 million tonnes of coking coal in the first quarter of this year, a drop of 31 percent from the prior corresponding period. * Australia’s coal exporters are bracing for a slump in shipments to China, making it somewhat ironic that May is likely to be the strongest month in nearly two years for Chinese imports from Down Under. Traders are expecting that China’s coal imports may fall in coming months amid moves by Beijing to restrict cargoes to protect the domestic mining industry and prices.

Indonesian Coal News:

* Chairman of the Indonesian Mining and Energy Forum (IMEF) Singgih Widagdo, said that coal price will continue to deteriorate. Pressure towards the sector will continue in Q2 od 2020 as the industry and power plant sector experienced a slow down as export destination countries decrease their energy consumption by around 10 to 20 percent. * Indonesia’s parliament has passed a new bill that effectively gives miners bigger concessions and longer contracts, with fewer environmental obligations including removal of a limit on the size of mining operations under a single permit, capped by the previous law to 15,000 hectares (37,000 acres).

US Coal News:

* US coking coal prices edged up on indications of stronger demand for the third quarter and signs that suppliers are less willing to offer discounts that were available in March and April. Fob Hampton Roads low-volatile coking coal price remained stable at $111.50/t over the past week, supported by strong demand in Asia-Pacific. The high-volatile a price increased by $1. * The U.S. got more energy from renewables in 2019 than it did from coal, a year sooner than that same milestone is expected for the electricity sector on its own. Last year, the U.S. consumed 11.3 quadrillion

British thermal units of coal, the lowest level since 1964. By comparison, total consumption of renewable energy hit a record-high 11.5 quads.

.

Pet Coke News: * As seaborne traders struggled with the pandemicinduced lockdown in India, Petroleum coke prices delivered to the country remained within the range this week. According to market analysts, certain cement plants along the east coast of India may lean on Saudi Arabian petcoke instead of US varieties. *In the first month of 2020-21 fiscal, India's petroleum coke consumption almost halved to 1.13mn t from 2.25mn compared to a year earlier, according to data from the country’s oil ministry. The figure was also 33% lower than March levels, when consumption had already begun falling sharply from a year earlier as effect of the deadly pandemic began to be felt in the country.

Shipping Update: * Ridley Terminals in Prince Rupert, British Columbia, exported over 1.1 million MT of thermal and metallurgical coal in March, up 42.8% from the previous month, Analysts said. Combined metallurgical and thermal exports were at their highest since March 2013 with 1.9 million MT. The jump was largely driven by a peak in monthly thermal exports. * Australia's Queensland coal ports are easing Covid-19 restrictions on foreign crews, as vessel queues dwindle and the mining industry seeks ways to ease access to the seaborne market as it faces an anticipated period of sustained lower demand. * Australian coal mining firms are looking to diversify cargoes to Southeast Asia, particularly Vietnam, and to try to build market share in more mature markets in north Asia, in case access to China becomes more difficult. Many do not think that China will be able to stop delivery of Australian coal, but are concerned about its ability to curtail it. *Asia’s dry bulk shipping market has found support from robust coal demand from Vietnam and China as well as plentiful iron ore flows to China, despite COVID-19 pulling down consumption in other pockets, said Vivek Kumar, managing director of Western Bulk Pte Ltd. CCAI Monthly Newsletter May 2020

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OVERALL DOMESTIC COAL SCENARIO Coal Production (in MT) Company

April, 2020

April, 2019

% Growth

CIL

40.38

45.3

-10.9%

SCCL

3.00

5.51

-45.5%

Company

April, 2020

April, 2019

% Growth

CIL

39.06

52.41

-25.5%

SCCL

3.04

5.57

-45.4%

Overall Offtake (in MT)

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

April, 2020

April, 2019

% Growth

CIL

31.95

40.90

-21.9%

SCCL

2.86

4.66

-38.6%

Spot E-auction of Coal (in MT) Company

Coal Qty. Allocated April,2020

Coal Qty. Allocated April,2019

Increase over notified price

CIL

2.02

2.95

22%

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

Coal Qty. Allocated April, 2020

Coal Qty. Allocated April, 2019

Increase over notified price

CIL

3.04

3.05

1%

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

Coal Qty. Allocated April, 2020

Coal Qty. Allocated April,2019

Increase over notified price

CIL

3.91

1.20

0%

Special Spot E-auction (in MT) Company

Coal Qty. Allocated April, 2020

Coal Qty. Allocated April,2019

Increase Over notified price

CIL

0.15

0.00

0%

30 | CCAI Monthly Newsletter May 2020

PRODUCTION AND OFFTAKE PERFORMANCE OF CIL AND SUBSIDIARY COMPANIES COAL PRODUCTION (Figs in Mill Te) SUB CO.

MAY'20

APR'19 - MAY'20

ACTUAL ACTUAL THIS SAME % YEAR PERIOD GROWTH LAST YEAR

ACTUAL THIS YEAR

ACTUAL SAME PERIOD LAST YEAR

% GROWTH

ECL

3.45

3.92

-12.1

6.84

7.94

-13.9

BCCL

1.56

2.12

-26.6

3.26

4.39

-25.7

CCL

2.91

4.13

-29.5

5.17

7.32

-29.4

NCL

9.20

8.86

3.8

17.93

17.59

2.0

WCL

3.94

4.10

-3.9

7.39

8.32

-11.2

SECL

9.15

11.90

-23.1

18.45

23.00

-19.8

MCL

11.22

11.64

-3.7

22.75

23.38

-2.7

NEC

0.02

0.02

-31.8

0.04

0.05

-32.7

CIL

41.43

46.69

-11.3

81.81

91.99

-11.1

OFFTAKE (Figs in Mill Te) SUB CO.

MAY'20

APR'19 - MAY'20

ACTUAL ACTUAL THIS SAME % YEAR PERIOD GROWTH LAST YEAR

ACTUAL THIS YEAR

ACTUAL SAME PERIOD LAST YEAR

% GROWTH

ECL

3.38

4.36

-22.5

7.07

8.89

-20.5

BCCL

1.21

2.56

-52.7

2.25

5.40

-58.4

CCL

3.99

5.74

-30.6

6.87

12.16

-43.5

NCL

8.16

8.83

-7.6

15.33

17.03

-10.0

WCL

3.06

4.64

-34.0

5.88

9.58

-38.6

SECL

9.88

13.13

-24.7

19.64

26.01

-24.5

MCL

10.25

12.82

-20.7

21.90

25.35

-13.6

NEC

0.03

0.03

-21.3

0.08

0.10

-24.5

CIL

39.95

52.10

-23.3

79.02

104.52

-24.4

CCAI Monthly Newsletter May 2020

| 31

Note

32 | CCAI Monthly Newsletter May 2020

CCAI Monthly Newsletter March 2020

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REGISTERED

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