CCAI Newsletter May-22

May 2022 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. LI No. 02 Published on : 28.05.2022

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From the Editor’s Desk

Unprecedented surge in ene rgy demand at one hand and global narrative to reduce its carbon footprin ts on the other has caught India, Asia’s second largest economy, in a parado xical situation. Since March, larg e par ts of India is shimmering under scorching heat-waves while industrial acti viti es, subdued by the deadly pandemic since 202 0, are also bubbling up- causing country’s power demand to go through the roo f.

Being a country with world’s fifth largest coal reserve, Ind ia is vastly dependent on the dry fuel to meet its power demand. While the Gov ernment is eager to meet the international goa ls on climate change by pha sing out fossil fuels and adopting clean energy tech nologies, the ongoing power crisis is leading the Centre to consider drastic mea sures to increase coal production which could turn out to be counter-productive amid the vision of reducing carbon footprint in the country.

The Ministry is leaving no ston es unturned to further boost output and dispatch of coal. National miner Coal Ind ia Limited is targeting 1-billio n tonne production target by FY ‘24 and the captive coal mines which has alre ady performed handsomely in the last year, are also encouraged to further boost its despatch to power sector. Meanwhile, CIL is set inaugurate Siarmal min es in eastern Odisha, potentially one of the countr y's biggest coal mines, where output capacity is expected to reach 50 million tonnes within the next five yea rs.

Among other initiatives, Cen tre has relaxed the mandatory compliance norms of coal mining expansion pro jects wherein coal mines wit h environmental clearances to expand by 40 per cent can now expand up to 50 per cent. India is also looking to boost its coa l output by 100-150 MT in the next two-tothree years by restarting nea rly 20 closed/discontinued min es. Moreover, the central and state PSUs are given deadline till July this yea r to surrender their non-operational coal mines to the Ministry so that those can be quickly recycled after removing technical diffi culties and offered to interest ed par ties under the recently launched commercial mining scheme.

However many environmentali sts say overdependence on coa l can be seen as a step backward against the bac kdrop of India’s active par ticip atio n in the global efforts to switch to cleaner ene rgy. There is a general consen sus among experts that extreme temperatures are directly linked to climate change and India’s hottest summer in many dec ades directly points to the wri ting on the wall. This shows India, like many other coal-dependent nations, is wal king a tight rope to meet its climate goals.

As per a recent report of United Nations Intergovernm ental Panel, India’s coal use needs to fall 75% by 2030 from the 2019 levels, to limit the global temperature rise below 1.5°C, as envisioned in the 2015 Par is Agreement.

While, boosting coal produc tion and even import of the cov eted dry fuel is necessary at this moment to avert any major power crisis or nat ionwide outages, India is ramping up more sust ainable alternatives such as sola r power as the country witness sunny days for the most par t of the year and emb race advance technologies like coal gasifica tion and green hydrogen pro jects to hit the right note of industry-environment balance.

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CONTENT Vol. LI No. 02 May 2022

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 Editor : Subhasri Nandi

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Consumers' Page

10

Power

16

Domestic

22

Global

Annual Subscription Rs. 400/(including postage) MO/DD to be made in favour of “Coal Consumers’ Association of India” CCAI do not necessarily share or support the views expressed in this Publication.

30 Monthly Summary Of

Imported Coal & Petcoke

34 Overall Domestic Coal Scenario

CCAI Monthly Newsletter May 2022

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CONSUMERS’ PAGE Present Coal Scenario: India’s total coal production has grown from 66.58 MT in April ’22 to 71.30 MT in May ‘22, registering a growth of 7%. Total coal production in FY 22-23 so far has increased by 31.5% compared to the same period in last fiscal.

CIL’s production has grown by 3.9% on an m-o-m basis in May and over 30% compared to the same month last year.

Overall coal despatch in the first two months has grown by 12.65% compared to the same period in FY 2021-22 while CIL’s despatch has increased by over 8.5%. Lion share of the coal is being despatched to Power Sector to cater to the soaring demand. So far in this fiscal, coal despatch to power sector has grown by 19.5% compared to the previous financial year. Along the industrial sectors, only despatched to Steel Sector has increased (26%) in FY 23 while other sectors have dipped significantly. CPP Sector has been most severely hit as supply of coal has dipped by nearly 32%.

Issues faced by both Power and NRS Consumers:

against expired FSAs etc. are pending since many months. Among all CIL subsidiaries, the amount of pending refund from SECL is the highest so far.

1. Submission for release of various forms of long-pending refunds from South Eastern Coalfields Limited (SECL) and MCL:

In case of strapped BGs consumers are unable to secure required credit limits from their Banks to carry out regular plant operations comfortably. As a result, huge amounts of funds of both Utilities and Industries are stuck with MCL.

Various forms of refunds from South-eastern Coalfields Limited (SECL) including refund of additional coal value advance, BGs related to financial coverage and performance security, pending credit notes on account of grade slippage, refund of security deposit

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Requests have been made to SECL, MCL and CIL to immediately start processing the long-pending refunds to the Power and Non-power sector consumers.

Both SECL & MCL have started streamlining the refund procedure.

2. Submission for coal consumers across the board for extension of empanelment period of QCI as Third-Party Sampling Agency: As requested a number of member companies availing services from Quality Council of India (QCI) to extend the empanelment period of Quality Council of India (QCI) as the third party sampling agency (TPSA) that was going to expire on 25.05.2022, request has been made to MoC and Coal India Limited regarding the same.

CIL has extended the period of empanelment of QCI by a year till 25th May 2023 at Rs 6.00 / tonne.

3. Submission to SECL regarding continuation with single LC against coal supply through Rail and Road mode:

Issues faced exclusively by Power Sector Consumers: 5. Submission by Power Sector for loading of rakes as per trigger level MSQ: Power Sector consumers have pointed out that supply of rakes from ECL to their company have been significantly lower than the trigger level MSQ in recent months despite already paying up the full coal value advance worth crores of rupees.

Restriction/curtailment of loading of rakes programmed as per trigger level MSQ during a month leads to accumulation of backlog rakes which need to be loaded in the subsequent quarters. This may lead to levy of short-lifting penalty on the consumers at the end of the year as procuring such a large number of rakes may not be possible at that point.

So far, the consumers had to provide a single Letter of Credit (LC) for the entire supply irrespective of the mode of dispatch. However, as per instructions given

by SECL, separate LC needs to be issued for separate modes of dispatch (Road or Rail mode).

Request has been made to ECL and CIL to ensure loading of rakes as per trigger level to the Power Sector so that coal requirement by the Utilities may be fulfilled.

Many consumers have to avail both modes of transport (Road/Rail) for convenience of coal supply at their respective plants. Hence, issuance of separate LC for separate modes would be financially difficult as well as cumbersome for them.

6. Submission by Power Sector for immediate release of long-pending eAuction rakes booked under Special Forward e-Auctions:

Request has been made to SECL to continue with the provision of a single LC for entire supplies irrespective of mode of dispatch (Rail/Road) to the respective companies.

4. Submission for roll back of hiked price in different grades of coal by SCCL effected from 01.06.2022: The basic prices of different grades of Run Of Mine (ROM) coal for Power Sector has been hiked seven times and for Non-power Sector six times by SCCL since August ’21. The prices of washery grade coal have also been hiked four times by SCCL during the aforementioned period. Also, Additional Facility Charges from specific shipping points and Explosive Cost Adjustment Charges were introduced while Fuel Surcharge has also been hiked multiple times.

Request has been made to SCCL so that that coal prices notified by SCCL on 01.06.2022 may be rolled back and levied additional charges on coal may also be reduced to the extent possible.

In spite of ensuring steady supply of FSA rakes from CIL Subsidiaries, a large number of e- Auction rakes are pending for a long time from various coal companies. For instance, supply of 560 rakes booked under Special Forward e-Auction (SFEA) have been halted from MCL’s Talcher area alone, Some of which are pending since September 2021. This pendency is leading to an acute coal crisis across the power plants.

Request has been made to Ministry of Coal, Power and CIL to ensure liquidation/materialization of SFEA rakes may be conducted through allotment of prorata quantity in the tune of 10%-20% of the total number of rakes despatched per day by MCL and other Subsidiary coal companies as well.

Issues faced exclusively by NRS Consumers 6. Submission by Industries to immediately improve supply of rakes from MCL: CCAI Monthly Newsletter May 2022

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MCL has dispatched 8.4 rakes to the Non-power sector per day on an average in March '22 which was only 9.6% of total rake dispatch by MCL. It is also lower than the average daily despatch in the same month last year despite the current pendency of over 1000 rakes for the NRS consumers from the coal company.

Request has been made to MCL and CIL to immediately increase the number of rakes supplied to the Non-power Sector.

7. Prayer by the Industries (including CPPs) seeking support to improve coal supply situation: CIL Subsidiaries are allocating coal to the NRS consumers at trigger level {75% of the Monthly Scheduled Quantity (MSQ)} under Fuel Supply Agreement (FSA) since February, 2022. Though FSA quantities are not being supplied to the Industries, the coal companies are successfully conducting Spot E-auctions where the spot prices have scaled up to manifolds (around 800% above notified price) since March’22.

Also, the continuous process plants are compelled to purchase power from the exchange while keeping their CPP units almost idle which is causing power demand and tariff to increase further.

A list of submissions have been made to the Ministries of Coal, Power, Finance, Industries as well as CIL to supply coal to the NRS as per MSQ instead of restricting it to trigger level, increase despatch to NRS via Rail mode immediately, Capping spot auction prices at a certain limit till normalcy in supply resumes, supply adequate quantities to CPPs to generate at full capacity as it would allow excess power to be transmitted to the grid, consider inter plant transfer of coal within the same group company that have multiple plants with separate linkages, in case of unavailability of rakes allow change of mode from Rail to Road etc.

8. Submission by NRS FSA consumers for not taking advance payment of more than one month MSQ Due to scanty supply of NRS FSA rakes, advance amounts paid by the consumer, equivalent to Scheduled Quantity of multiple months are stuck with the coal company. Under the ongoing high-demand scenario, due to non-supply of FSA quantities, NRS consumers are compelled to procure coal via e-Auctions by paying premiums which are several times higher than the notified price or source coal from imported sources at a higher price. Therefore, blockage of fund is an added financial burden on them.

Request has been made to CIL so that supply of

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rakes to the NRS consumers could be expedited by the Subsidiaries and advance payment to be made

by NRS consumers to the Railways may not be higher than coal value equivalent to MSQ of one month.

9. Submission by NRS Consumers regarding refund of EMD, Royalty and Ad-valorem taxes against lapsed DO quantities: Industries securing coal under Spot e-Auctions from SECL’s Chhal, Bijari OCP in 2021, could not procure the allotted quantities due to various reasons such as non-availability of designated grade of coal (G-10, G15), frequent breakdown of weighbridges, irregular movements of loading vehicles, poor coal evacuation arrangements etc.

As a result, only a small portion of the allotted DO quantities could be lifted by these Industries and the rest quantity got lapsed despite high coal demand.

However, the EMD amount submitted by the consumers has not been refunded for many months.

For certain NRS consumers, coal value against the lapsed DO quantities has been refunded by SECL but Ad-valorem charges including Royalty, DMF, NMET, AVAP taxes deposited alongwith coal value has not been refunded.

Request has been made to SECL and CIl to expedite refund of EMD, Royalties and other Ad-valorem charges against lapsed DO quantities.

10. Submission by NRS consumers for revalidation of lapsed rakes from East Coast Railways: As per NRS consumers procuring coal through Exclusive e-Auction from MCL’s SPUR I & II sidings have stated that the quota of 78 rakes allotted to them for January’22 has not been sanctioned in spite of completing all payment formalities such as submission of coal value, C Form at FOIS etc. As per the letter issued by MCL dtd 17.05.2022, the rakes allotted to the Industries have been offered for timely allotment to East Coast Railways (ECoR). But a significant number of rakes are not given allotment by ECoR which has led to lapsing of those rakes.

As the offer-allotment of rakes needs to be completed within the validity period of the sanctioned rail programme and there is no separate provision of reindenting the rakes.

Request has been made to ECoR and the Railway Board to allow revalidation of the lapsed rakes so that the quantities may be supplied to the NRS consumers.

CCAI CCAI CCAI Monthly CCAI Monthly CCAI CCAI Monthly Monthly Monthly Monthly Newsletter Newsletter Newsletter Newsletter Newsletter Newsletter September November August June April May July 2021 2020 2022 2019

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POWER THERMAL Govt. jacks up thermal power output, averts major blackout

coal has more than doubled from 143 MU during the period from 66 MU registered in May last year.

Coal-fired electricity generation has registered a sharp increase this month, preventing largescale blackouts as the power, coal and railway ministries made a concerted bid to improve fuel supply to power stations from domestic sources and imports.

This vindicates the power ministry’s move to ask states and generation companies to import coal with a view to supplement availability of domestic fuel as the growth in power demand outstrips rise in production by a wide margin.

The latest available government data shows daily generation from domestic coal-fired plants rising more than 31% to 3,244 MU (million units) this month from 2,465 MU during all of May 2021.

The daily output from domestic coal-based plants that blended domestic fuel with imported

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Similarly, the push for imports and the power ministry’s intervention to resolve commercial issues between states with purchase agreements with imported coal-fired plants has pushed up generation from such plants by 10% Overall, generation based on imported coal has risen by 43% to 303 MU as compared to 211 MU in May 2021.

No penalty on imported coalbased power plants for default: Government The government clarified on Saturday that imported coal-based power plants, which were directed to operate under an emergency legislation earlier this month, would not be penalised for default in case states do not offtake electricity and the average prices on power exchanges are inadequate. This means imported coal-fired power plants now have the option to avoid selling on power exchanges if states that buy power from them refuse to offtake the electricity.

The government invoked the emergency clause on May 5, mandating 13 imported coal-fired stations to operate and either sell to states or on power exchanges.

The government move, which was aimed at increasing electricity supply and easing pressure off domestic coal, caused anxiety among imported coal-based power plants. They said selling on power exchanges when discovered tariffs were lower could result in losses.

The power companies, however, sought more clarity since these plants need to operate at technical minimum levels and cannot be shut down even in case of no power offtake.

Power generation doubles in May on imported coal blending Power generation by domestic coal-based plants that blended imported dry fuel has more than doubled to 143 million units (MU) per day in May compared to 66 MU in the same month a year ago, according to official data.

Several measures taken by the Ministry of Power in recent past have ensured increased power generation in domestic coal-based (DCB) plants as well as (imported coal-based) ICB plants.

The data showed that power generation per day during May 2022 increased as compared

to May 2021. Power generation per day from coal blending in DCB plants more than doubled from 66 MU to 143 MU while generation from imported coal-based plants rose from 145 MU to 160 MU. Total power generation per day through imported coal during May 2022 increased to 303 MU as compared to 211 MU in May 2021. Power generated per day from domestic coal has risen from 2,465 MU to 3,244 MU.

Power crisis in India: Coal import mandate might be extended beyond October, says Power Minister Indian Power Minister, Raj Kumar Singh has said it’s a major challenge to ensure adequate power supply amid the rising demand in the country.

He further added that the directive mandating the import for coal-based plants might extend beyond October.

The Power Ministry has also directed Power Finance Corporation and Rural Electrification Corporation Limited to help arrange short term loans for six months to those coal-based plants which are importing coal and are under stress.

The capacity of coal-based plants in the country was 17,500 MW and only worth 10,000 MW is operational right now. There is a crisis for around 7,500 MW. The ministry had also declared that the 20 percent power demand growth would be a challenge to meet and it needs imported coal.

Power generation companies had said that they didn’t have any money for that. After which the ministry asked RECL and PFC to arrange the short-term loans with adequate safeguards for ICB plants which are under stress in NCLT. The prices of coal has also nearly tripled in the past few months at $140-150 per ton, so the government had also allowed them to slightly spike the rates of electricity .

CCAI Monthly Newsletter May 2022

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States GENCOs, power companies seek coal imports aggregator State governments and developers of power projects have asked the Centre if coal can be imported through an aggregating agency - possibly Coal India (CIL) - for ease of purchase, cost pass-through, better prices, and faster execution.

Recovering the cost later from electricity distribution companies will be easier in such an arrangement, a power official said.

The Centre directed the Central Electricity Regulatory Commission (CERC) to allow power plants to blend up to 30% imported coal till March next year without requiring consent from electricity buyer states. This was aimed at building coal stocks at power stations that are fast depleting amid high demand for electricity.

According to sources, daily power generated from domestic coal has risen to 3,244 million units (MUs) so far in May from 2,465 MUs in the same period last year. The total generation per day through imported coal this month has increased to 303 MU compared to 211 MU in May 2021.

On April 28, the power ministry asked all power plants to import 10% of the coal they need to build stocks amid projections of record power demand.

Power gencos to get easier loans for coal imports The centre will facilitate loans for coal imports to electricity generating companies through sector lenders to build coal inventories and keep projects running amid high demand.

The power ministry will ask Power Finance Corp (PFC) and REC Ltd NSE 1.33 % to waive prudential norms for lending to power companies, specifically to buy imported coal for blending

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purposes as well as for running imported coalbased plants.

All generation projects have to import 10% of their requirement. This would imply 22 million tonnes of coal imports by the State generation companies while private companies will bring in another 16 million tonnes.

The ministry will through a direction ask PFC and REC prudential norms to be waived for working capital loans for importing coal. The waiver will be for all generating companies - blending coal or imported coal-based plants.

The Association of Power Producers had said the power developers are keen to import coal but sought a bridge financing mechanism from the government to fund coal imports. Discom outstanding dues to power plants stand at a cumulative 1.03 lakh crore..

Discoms' outstanding dues to gencos rise 4% to Rs 1.21 trillion in May Total outstanding dues of electricity distribution companies to power producers rose by 4.04 per cent year-on-year to Rs 1,21,765 crore (Rs 1.21 trillion) in May 2022, according to the official data.

Discoms owed a total of Rs 1,17,026 crore to power generation firms in May 2021, according to portal PRAAPTI (Payment Ratification And Analysis in Power procurement for bringing Transparency in Invoicing of generators).

On a sequential basis too, total dues in May 2022 increased from Rs 1,20,954 crore in April 2022. The PRAAPTI portal was launched in May 2018 to bring transparency in power purchase transactions between generators and discoms.

In May 2022, the total overdue amount, which was not cleared even after 45 days of a grace period offered by generators, stood at Rs 1,06,902 crore as against Rs 94,354 crore in the same month a year ago. The overdue amount stood at Rs 1,06,071 crore in April 2022

CERC seeks feedback on 'deterrent charges' for low coal stock at thermal power plants Thermal power plants may soon have to pay 'deterrent charges' to discoms for maintaining lower-than-specified coal stocks, as the Central Electricity Regulatory Commission (CERC) has sought feedback from stakeholders on the methodology for computing these charges.

An amendment in the 2019 Tariff Regulations is proposed for computing deterrent charges on the basis of average coal stock availability for the last three months. The CERC has sought feedback from the stakeholders on the issue through a public notice issued on May 13, 2022.

All stakeholders can provide their feedback till May 27, 2022. the CERC has noted that during the recent months, coal stock at many coal-based thermal generating stations were reported as lower than the coal stocking norms specified by the Central Electricity Authority (CEA). Such low coal stock led to lower declared availability (of power) by the generating stations, which in turn forced States to purchase power from alternate sources at higher rates.

In order to recover full annual fixed charges (AFC), it is the obligation of the generating company to arrange sufficient fuel for its generating stations as per norms and maintain the availability of the plant as per the relevant regulations, the paper said. It proposed that if coalbased generating stations fail to maintain coal stock as per the revised coal stocking norms as specified by the CEA, the AFC of such generating stations is reduced.

Imported coal-based power generators ask Power ministry for higher tariff to restart units: Sources

Imported coal-based power producers have made representation to the government to revisit the tariff set by a committee as a part of the government’s plan to get power plants totalling around 8,000 MW to restart, three sources in the know said.

Tata Power Company has moved to the Central Electricity Regulatory Commission (CERC), asking for a higher tariff than the one set by the committee. The rest of the power plants have made a representation with the government asking for a revision in tariff as the producing power at these levels will not be feasible at the prevailing coal prices in international markets.

The committee has recommended a variable tariff of Rs 6 to a little over Rs 7 for these units.

These units are run by private producers like Tata Power, Essar Power, JSW Energy, and IL&FS. “At this rate, we cannot afford to import good quality coal to run our plants at 100% plant load factor. We have sought the ministry’s help. Selling on the exchanges will also not be a viable option given how the prices have fallen on the exchanges,” an official said..

Coal stock norms likely to be revised amid power crisis The government is likely to lower the minimum coal stock requirements for power stations to “realistic" levels in order to reduce the financial burden on gencos as they grapple with fuel shortages that have triggered a power crisis.

Though the number of days of coal stock at power plants is still being discussed sources close to the Ministry cited above said it may be brought down to 10 days of coal stock for pit head power plants running at 85% of capacity and around 14 days for non-pit head plants running at same capacity. A similar norm was followed prior to the pandemic, before it was moved to distance-based differential stocking limits.

CCAI Monthly Newsletter May 2022

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Currently, as per the distance-based differential stocking norms, pit head power plants (power plants that are close to coal bearing areas) are required to maintain coal stock sufficient to run power stations at 85% of their capacity for 1217 days. For non-pit head power plants, the limit varies from 20 days to 26 days depending on the distance of the plant from coal source.

RENEWABLES

Progress towards renewable energy would have averted power crisis: Analysis India could have averted the power crisis last month if progress towards the 175 GW renewable energy goal had been on track, reveals a new analysis by think tank Climate Risk Horizons.

The analysis shows that the additional generation from solar and wind would have erased the energy shortage and would have allowed power plants to conserve their dwindling coal stocks for evening peak periods when solar generation dips. The additional renewable energy generation would have translated into a saving of at least 4.4 million tonnes of coal.

Analysts also stated that the power shortage has led to calls to further augment India's coal power and mining capacity as the crisis was a result of lack of coal supply, due to logistical and cash flow reasons.

Logistical constraints in the coal supply chain are a permanent feature and will certainly recur, as will heat waves; the best safeguard is to diversify our electricity mix. This reinforces the need for the center and state governments to rapidly scale up their RE deployment and reduce

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dependence on coal, the analysts said.

Subsidy hike, easing policy norms to push solar power Aiming to incentivise installation of solar energy panels, which has seen few takers in the city so far, the Delhi government is likely to increase the subsidy and ease norms to make it more lucrative for residents.

At present, individuals get an incentive of Rs 2 per unit only if at least 1,100 units per KW are generated in a year, and none if the generation is less. According to sources, this condition could be removed in the new solar policy that is currently being formulated, thereby permitting everyone to avail the benefits.

Till the first week of May, only 3,168 households in Delhi had opted for rooftop solar plants.

Sources said only 50 of about 1,400 group housing societies had the plants installed on the terrace of their buildings.

Sources said the Delhi government could also offer subsidies on installation of rooftop solar energy plants — 40% on smaller ones of up to 3KW and a little less on bigger ones — to make them more affordable. Currently, the Union ministry of new and renewable energy provides 30% subsidy on benchmarked installation cost of solar panels.

As electricity demand soars, wind and hydropower come to the rescue A pick-up in wind speed in Karnataka and Tamil Nadu before the onset of early monsoons is helping meet electricity demand across India, said two government officials aware of the development.

With water levels going up in reservoirs due to rains and high wind speed over the last 15 days, Karnataka is meeting more than 60% of its

power demand from renewable energy sources, and selling surplus wind power to neighbouring states. This in turn has freed up its coal-fuelled power generation capacity to cater to demand in other parts of the country.

Nepal has the potential to produce 42,000MW of hydropower but now generates about 1,200MW — less than demand of about 1,750MW. The deficit is met by imports from India.

Similarly, Tamil Nadu is planning to switch to renewables to meet a large part of its power needs from 21 May, based on an assessment that suggests favourable weather and predictable wind conditions. Also, with 1 gigawatt (GW) of hydropower expected to come from the Bhakra dam in Himachal Pradesh, there may be some short-term respite to the ongoing power crisis in the country.

Himachal Pradesh invites bids to run 27 hydro power projects

With wind speed picking up before an expected early monsoon, there has been some relief in meeting the power demand. Karnataka is not using its requisite quota of coal to fire the power plants but has engaged all its wind mills to meet the shortages and even supply surpluses to neighbouring states.

India, Nepal agree to hydroelectric power plant

build

India and Nepal will build a 695MW (megawatt) hydropower plant, officials said.

India, which has an electricity trading deal with Nepal, is investing billions of dollars in infrastructure including hydropower plants, as New Delhi looks to grow its influence in its smaller neighbours, where China is also increasingly active.

The Himachal Pradesh government will allot 27 hydroelectricity projects of 722.4-megawatt combined tentative power generation capacity in Chamba, Kangra, , Lahaul-Spiti, Kullu, Shimla and Kinnaur districts. It has invited bids from the private sector for running these projects on ‘build, own, operate, and transfer (BOOT)’ basis.

The developers will be required to pay the government a royalty in the form of free power from the projects. Of the 27 projects, 9 are in Chamba, 7 in Kinnaur, 5 in Kullu, 2 on the border of Chamba and Kangra, and one each in Kangra, Lahaul-Spiti, and Shimla, besides on border of Lahaul-Spiti , and Shimla, besides on border of Lahaul-Spiti and Chamba. Detailed reports for 7 projects are ready, while the preliminary feasibility reports (PFRs) for the rest are available.

The developers will be free to dispose of the remaining power after meeting the royalty commitments and additional free power at 1 per cent of the deliverable energy on account of local area development fund (LADF).

The Arun IV project will be jointly built on the Arun River in Nepal's east by India's Satluj Jal Vidyut Nigam (SJVN) Limited and Nepal's state-owned Nepal Electricity Authority (NEA) owing 51% and 49% of equity respectively, NEA spokesperson Suresh Bahadur Bhattarai said.

Nepal will get 152MW of free electricity from the plant for its consumption. Cost of the project is being worked out and whatever it comes will be shared as per the above ratio.

CCAI Monthly Newsletter May 2022

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DOMESTIC COAL Country has constraints in availability of domestic coal: Govt The country is facing constraints in the domestic coal availability and the rest of the dry fuel demand needs to be met with imports, according to the coal ministry.

The ministry has also emphasised that coal block holders both captive and commercial have a major role to play in mitigating the coal shortfall situation. Domestic coal production is about 800 million tonnes, according to the coal additional secretary, who is also the chairperson

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of an inter-ministerial panel on coal linkages for the power sector.

The inter-ministerial panel met recently to consider the requests for coal linkages to central/state sector power plants and to review the status of existing coal linkages.

The additional coal secretary stated that "there are constraints in domestic coal availability and the domestic coal production is roughly about 800 MT. Therefore, the rest of the coal demand of the country has to be met through imports from other countries", according to the minutes of the meeting on fuel linkages.”

CIL will supply more coal than its commitment to electricity plants Coal India Limited, the largest coal-producing company in a bid to resolve the electricity and coal supply shortage will now supply more coal to the thermal electricity generating plants. The company has exceeded the committed limit and pushed the supply to avoid interruption or failure in the power supply.

According to the PTI data, total of 85 thermal power plants are dependent on domestic coal and have critical stock, while 11 such factories dependent on imported coal have a critical stock level. A total of eight power plants are not in operation. On average in April, Coal India Limited supplied 1.66 Million Tonnes of coal per day to power utilities.

According to the ministry Power utilities coal despatch has gone up by 18.15 % to 61.81 MT during April, 2022 as compared to 52.32 MT in April, 2020. Fall in import prices of coal have been observed since the end of October last year. However, international prices are still at high level..

Supply crunch: Coal expansion norms eased

mine

The Union Environment Ministry relaxed the mandatory compliance norms of coal mining expansion projects while citing a higher demand for coal amidst the ongoing power crisis.

According to the revised norms, coal mines with environmental clearances (EC) to expand by 40 per cent can now expand up to 50 per cent. This could be done without any environment impact assessment or public consultation.

The ministry in an office memorandum (OM) said that the change was made after the coal ministry raised an alarm on the pressure on the domestic coal supply. It has been requested that existing coal blocks should be allowed for expansion of production capacity keeping in view the available reserves in the coal block and

compliance of the conditions of the previous EC.

India looking to boost coal output by up to 100 MT, reopen closed mines India is looking to boost its coal output by 75100 million tonnes in the next two-to-three years by restarting closed mines, the country’s coal secretary A K Jain said.

As per the Ministry, extractable reserve in the closed/discontinued coal mines is around 380 million tonnes, 30-40 million tonnes of coal can be easily extracted from the mines. the continuation of mining activities will help in increasing coal supply to TPPs while creating employment opportunities for local people.

Coal India Ltd. (CIL) will offer its 20 discontinued underground coal mines to the private sector to reopen and bring into production on revenue sharing model.

India, the world’s second largest producer, importer and consumer of coal, produced 777.2 million tonnes of the fuel during the year ended March 2022 and burnt over a billion tonnes.. .

Govt PSUs to surrender nonoperational coal mines by July Central and State government companies have been given time till July this year to surrender their non-operational coal mines with the Coal Ministry.

On April 7, the government approved the policy for providing a one-time window to the Central and State PSUs to surrender non-operational mines without penalty (forfeiture of bank guarantee) and citing without any reason. As of December 2021, 45 mines out of 73 allotted to government companies remained nonoperational and the due date of commencement of operations in case of 19 coal mines is already over.

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Under this scheme, the PSUs, which have been allotted mines under the Coal Mines (Special Provisions) Act or the Mines and Minerals (Development and Regulation) Act, through allotment route, may surrender its nonoperational coal block. It is for cases where the mine opening permission could not be obtained by the allottee.

The ministry will return the performance bank guarantee upon surrender of the mine block. All pending show cause notices issued for delays would also be considered withdrawn.

India’s coal import decision to reverse 10% YTD drop and add tonne miles In a notice released on 5 May 2022, India’s Ministry of Power instructed all power plants to increase their imports of coal. Specifically, the Ministry demands that power plants designed to run on domestic coal start importing at least 10% of their requirements.

The government’s intervention comes as many states have suffered prolonged power outages since April and the country is two months into an unprecedented heatwave. Despite a year-todate increase in domestic coal production of 9% y/y there has still been a lack of coal due to a 10% y/y drop in imports.

Coal imports have been lower than pre-COVID levels since June 2021 and the recent Indonesian export ban significantly hurt volumes in early 2022. In addition, recent coal price increases have resulted in lower imports as they caused import dependent power plants to run at a loss and to cut production.

India will attempt to increase shipments from Australia and Indonesia, their main trade partners, but supply side difficulties could emerge. In Australia, recent heavy rainfall on the east coast is challenging coal logistics, and a requirement to sell 25% domestically limits Indonesian coal

18 | CCAI Monthly Newsletter May 2022

miners’ export potential, experts say.

Centre allows 50% concession in revenue share to promote coal gasification Union Minister of Coal, Mines & Parliamentary Affairs Pralhad Joshi on Friday said the government has allowed concession of 50% in revenue share for coal gasification. The minister also pitched for options like manufacturing Hydrogen from Coal to help India become energy independent.

Further, If the successful bidder consumes the coal produced either in its own plant(s) or plant of its holding, subsidiary, affiliate, associate for coal gasification or liquefaction or sells the coal for coal gasification or liquefaction on an yearly basis, subject to conditions that at least 10% of scheduled coal production as per approved mining plan for that year shall be consumed or sold for gasification or liquefaction, then the bidder can avail of concessions.

Further, the ministry highlighted that Syn-Gas produced from coal can be used to produce Gaseous Fuels such as Hydrogen (Blue coupled with CCUS), Substitute Natural Gas (SNG or Methane), Di-Methyl Ether (DME), Liquid Fuels such as Methanol, Ethanol, Synthetic diesel and Chemicals like Methanol derivatives, Olefins, Propylene, Mono-Ethylene Glycol (MEG), nitrogenous fertilizers including Ammonia, DRI, Industrial Chemicals along with Power Generation.

Indian petcoke producers raise domestic prices amid supply tightness: sources Indian petcoke producers have increased their domestic prices for May amid tight supply and elevated global thermal coal prices due to countries struggling to replace Russian coal, market sources said May 4.

India’s largest petcoke producer Reliance Industries Ltd., or RIL, increased its offer by Rupee 441/mt ($5.77/mt) from April, according to a note to traders seen by S&P Global Commodity Insights. RIL’s new petcoke offer for May is Rupee 22,257/mt.

Chennai Petroleum Corporation Ltd., or CPCL, a subsidiary of state-run Indian Oil Corp., has revised its price for domestic petcoke to Rupee 22,070/mt for May, up Rupee 40/mt from April, according to a similar note to traders.

Mangalore Refinery and Petrochemicals Ltd., or MRPL, sharply increased its petcoke price by Rupee 4,140/mt to Rupee 20,640/mt for supply by road in May and to Rupee 20,340/mt for supply by railway rake..

RAILWAYS & SHIPPING

Railways operates 237-wagon single freight train ‘SheshNaag’ to mitigate coal crisis in the country South East Central Railway (SECR) zone enhanced the swift operation by clubbing together four freight trains into one unit to ease the crisis of coal shortage faced by the thermal power plants.

Amid the ongoing coal crisis this is the first time, a single long haul freight train was operated by the Railways as ‘Super Shesh-Naag’—powered by 4 electric locomotives & amalgamating four freight trains comprising of 237 wagons is supplying the coal to power plants with critically low stock.

Korba happens to be India’s biggest coal and power-producing district and alone produces 16.56 percent of the country’s coal.

19 | CCAI Monthly Newsletter May 2021

The Chhattisgarh-based South Eastern Coalfield Limited (SECL), an undertaking of Coal India Limited, has been pressed into action to further increase daily production by 1.25 lakh ton.

85% of wagons allocated for coal transportation The Indian Railways has allocated 85% of its open wagons in the country to transport coal in order to cater to the high demand from states, senior officials said.

According to one of the officials, of the 131,403 open wagons owned by the railways, 113,880 have been put into service for coal transport.

A coal train usually gets up to 84 wagons. On a daily basis, railways is loading around 28,470 wagons with coal to meet the demand from power plants.

According to this official, the railways is running three to five trains together at 122 locations across Madhya Pradesh, Jharkhand, Odisha, Chhattisgarh.Railways ministry data shows that nearly 95% of coal transported by them comes from Coal India’s reserves, while the remaining is imported.

The national transporter has already increased the operating duration of rakes by 2,500km.

Coal transport on KothagudemSathupally railway line to begin soon Newly laid railway line from Kothagudem to Sathupalli would be made operational from May 20 for coal transportation from SCCL’s coal mines at Sathupalli, informed the company Director (Finance) N Balram.

Speaking to media here on Tuesday he said the 55 kilometre long railway was laid at a cost of Rs 650 crore. Singareni Collieries Company Limited (SCCL) provided 70 per cent of the

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project funding and remaining by the railways.

The first coal load from Sathupalli was expected on May 20. The railway line would stop coal transportation by road and around 600 trips of lorries that were transporting coal every day would be off road. It would reduce pollution, traffic and accidents.

It was expected to produce 10 million tonnes of coal from Sathupalli. Public hearing for VK-7 OC was over and the coal production might commence in Sept or Oct. Environmental and forest clearance for the Naini project was given and production would begin in Oct. Public hearing for the Rompedu project at Yellandu was yet to be conducted, Balram said..

STEEL

Centre waives import duty on some raw materials for steel industry The government has waived customs duty on the import of some raw materials, including coking coal and ferronickel, used by the steel industry, a move which will lower the cost for the domestic industry and reduce the prices.

Duty on pig iron and spiegeleisen in pigs, blocks, or other primary formats; flat-rolled products of iron or non- alloy steel, of a width of 600 mm or more, hot- rolled, not clad, plated or coated; Flat-rolled products of iron or non-alloy steel, of a width of 600 mm or more, cold- rolled (coldreduced), not clad, plated or coated, Flat-rolled products of iron or non-alloy steel, of a width of 600 mm or more, clad, plated or coated have been hiked to 15 per cent from 'Nil' currently.

Steel ministry in regular talks with railways, coal ministries for smooth fuel supply: Kulaste The steel ministry is in regular talks with other ministries, including the railways and coal, to ensure smooth supply of coal to steel manufacturers, Union minister Faggan Singh Kulaste said.

“We are regularly speaking to various states and ministries especially railways and coal,” he said, replying to a question related to coal supplies being impacted to steel plants.

Integrated steel players use coal to run their power units which supply electricity for captive use, while secondary players make steel using Directly Reduced Iron (DRI). About 70 per cent of the DRI is made using thermal coal, supply of which is in constraint in the country.

Also, to increase domestic availability, the duty on exports of iron ore has been hiked up to 50 per cent, and a few steel intermediaries to 15 per cent, according to a notification.

On the rising prices of steel, the minister said the rates are market-driven and will calm down accordingly. As per industry estimates, rates of hot rolled coil are trading in the range of Rs 73,000-Rs 75,000 per tonne.

The import duty on ferronickel, coking coal, PCI coal has been cut from 2.5 per cent, while the duty on coke and semi-coke has been slashed from 5 per cent to 'nil'.

Desperate for coal, India’s metal makers hunt for fuel overseas

The tax on the export of iron ores and concentrates has been hiked to 50 per cent, from 30 per cent, while that on iron pellets a 45 per cent duty has been imposed.

A coal crisis in India has forced the country’s sponge iron producers to scour the planet for supplies to keep their mills running as they are deprived of the fossil fuel at home.

In the central state of Chhattisgarh, a hub for

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iron ore and steelmaking, sponge iron makers are running at about 60% of usual levels and could be forced to shut down completely if they cannot get more coal, the Chhattisgarh Sponge Iron Manufacturers Association said in April.

CEMENT

India’s sponge iron industry, the world’s biggest, may ship in as much as 35-million tonnes of coal this financial year, 30% more than a year earlier. Jindal Steel & Power, which is running its sponge iron plants at 40% capacity as it does not have enough fuel, has contracted orders for 150,000 tonnes of thermal coal each for May and June from SA and Mozambique.

GCCA India releases report promoting blended cement

SA and Australian traders have been flooding the industry group with queries on the quality and prices of coal that mills need, as .they know that India will have to import a lot of coal because of the energy crisis

The report is a collation of the information about blended cement and its advantages.

It highlights the performance improvement possible through this replacement, making blended cement an attractive means to achieve sustainable infrastructure development.

Indian steelmakers face heat on Europe deals over export tax

It also showcases the benefits of different blended types of cement over OPC based on hydration, microstructure and permeability, rheology and workability, strength development, shrinkage (chemical, autogenous, and drying) and cracks, leaching, alkali-aggregate reactivity, sulphate attack, reinforcement corrosion, longterm durability of construction and usage in preparation of high strength concrete

Indian steel firms could be forced to cancel European orders and suffer losses after an overnight decision to impose export taxes on steel products, V R Sharma, managing director at Jindal Steel and Power said.

India imposed an export tax of 15% on eight steel products at a time steelmakers are looking to make up for tepid local demand by increasing market share in Europe, whose supplies have been hit by Russia's invasion of Ukraine.

The Global Cement & Concrete Association (GCCA) India has released a report entitled ‘Blended Cement – Green, Durable & Sustainable’ to promote the advantages of different types of blended cement over Ordinary Portland Cement (OPC).

Sharma said Indian steelmakers have about 2 million tonnes in pending export orders, mostly to Europe, which are stuck in ports or in various stages of production.

"This could possibly lead to force majeures. And the customer has done no wrong here and he doesn't deserve to be treated that way," he said.

Russia and Ukraine exported 46.7 million tonnes in 2020, mostly to the European Union, the world's second biggest importer of steel, according to the World Steel Association. The decision could raise industry costs by as much as $300 million.

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GLOBAL China’s coal production achieves double-digit growth for four consecutive months: official data

Inner Mongolia Autonomous Region accounted for 80.9 percent of the total output, according to data from the National Energy Administration on Wednesday.

China’s coal production has maintained a strong momentum since the beginning of 2022, with the domestic output of raw coal from January to April reaching a 10.5 percent year-on-year growth and achieving a double-digit growth for four consecutive months, new official data showed.

The National Development and Reform Commission (NDRC), China’s top economic planner, has been strengthening supervision and implementing targeted policies to ensure a stable energy supply and prices.

Among the 10.5 percent growth, the production from the nation’s major coal producing provinces and regions including Northwest China’s Shaanxi Province and Xinjiang Uygur Autonomous Region, North China’s Shanxi Province and

22 | CCAI Monthly Newsletter May 2022

Officials from the NDRC held a video conference recently with a number of coal enterprises in Shanxi on the back of pricing coal sales prices exceeding a reasonable range, the NDRC said on Wednesday. Involved enterprises have made written commitments on strict implementation of relevant policies and keeping the coal prices within the normal range.

China in focus — Expenditure on Russian imports hits $6bn in April

That has hit both trading volume and open interest in the coal futures, two key gauges of activity in derivatives.

China spent a significant sum on Russian imports despite Western countries drifting away from purchases. Coal imports in the country almost doubled between March and April.

Open interest on the most-traded September contract was 479 lots, equivalent to 47,900 tonnes of coal, down from a peak of 294,273 lots on April 29 last year.

In addition to this, Apple Inc announced that it intends to boost production outside the Asian country due to slowing production and slumping demand.

Meanwhile, The People’s Bank of China has cut its five-year loan prime rate to help alleviate the country’s struggling housing market.

China has spent a total of $6 billion on imports from Russia during the month of April including oil, gas, and coal. Liquified natural gas imports surged 80 percent when compared to a year ago to reach 463,000 tons, Bloomberg reported, citing Chinese customs data. On the other hand, crude imports increased 4 percent year-on-year to reach 6.55 million tons. China’s coal imports surged by around 50 percent between March and April to reach 4.42 million metric tons.

China’s thermal coal futures mute as Beijing reins in commodity inflation Trade in China’s thermal coal futures has almost come to a halt, after Beijing stepped up its control of coal prices to rein in the soaring costs of energy and raw materials.

.

Indonesia sets May HBA thermal coal price at $275.64/mt, down $12.76/mt on month Indonesia’s Ministry of Energy and Mineral Resources has set its May thermal coal reference price — also called Harga Batubara Acuan, or HBA — at $275.64/mt, down $12.76/ mt from April, due to an increase in world coal supply.

China and India, the world’s two biggest coal consumers, increased their domestic coal production to reduce imports.

“In addition to the increase in production, China’s decision to reduce coal power plants and develop green energy has also contributed to the decline in world coal prices,” Ministry of Energy and Mineral Resources Spokesperson Agung Pribadi said.

The decision by the United States and the North Atlantic Treaty Organization, or NATO, to embargo Russian energy supplies led to an increase in the reference coal price in April to $288.40/mt.

The flagship product for Zhengzhou Commodity Exchange (ZCE) has at times seen as many as 1 million lots exchange hands in a day but recorded a turnover of just 27 lots on Monday.

TNB remains cautious about higher coal prices

That was down 99.9% from a year ago and the lowest daily volume since the contract launched in 2015, showed ZCE data. Liquidity started drying up after Beijing intervened in the world’s biggest coal consuming market last September to cool runaway prices.

Malaysia (Petaling Jaya) - Tenaga National Bhd (TNB) remains cautious on the prolonged increase in coal price and impact from increased customers’ credit risk outlook, although it foresees a reasonable performance for the year 2022 with the implementation of the Regulatory Period 3, effective from Feb 1.

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In a filing with Bursa Malaysia, the group said for its first quarter ended March 31, 2022 (1Q22), it saw resilient performance underpinned by electricity demand growth of 4%, consistent with the overall improvement of Malaysia’s gross domestic product of 5% year-on-year.

However, the first quarter also saw the group continuing to face challenges arising from the global increase in coal price and increase in customer’s credit risk.

“On-going risks to growth remain, in particular on the expectation of higher core inflation arising from global commodity price surge amid heighten geopolitical conflicts and the on-going Russia Ukraine conflict could have an impact on the country’s economic growth,” said TNB. For 1Q22, the group’s revenue grew 36.4% yearon-year to RM15.658bil while net profit dropped 6.84% year-on-year to RM893.1mil.

Japan’s coking coal imports fall in April Japan's coking coal imports declined in April on tight global supplies and a slowdown in Japanese automobile production.

The country imported 4.74mn t of coking coal in April, down by 16pc from March and by 7pc compared to a year earlier, according to data from Japan's finance ministry.

Shipments from the largest supplier Australia fell by 11pc on the month to 2.43mn t in April, and decreased by 14pc on the year. Japan's April crude steel output fell by 6.1pc on the month, hampered by persistent car production cuts.

Imports from Canada and the US also decreased by 42pc and 48pc on the month to 395,120t and 369,987t, respectively.

Covid-19-related lockdowns in China continued to weigh on global steel production, resulting in Toyota implementing further cuts to MayJune production by 100,000 units. The country's largest car manufacturer has faced renewed struggles to procure semi-conductor and auto parts since March.

24 | CCAI Monthly Newsletter May 2022

Vietnam seeks to boost domestic coal production amid rising import prices Vietnam's state-owned coal miner Vinacomin will boost domestic production to meet rising demand for the fossil fuel amid surging global prices, the Ministry of Industry and Trade has announced.

The Southeast Asian country, a regional manufacturing powerhouse, earlier this year warned of electricity shortages due to tight coal supplies.

"Domestic demand for coal is at high levels, especially coal for power generation during the hot months of summer," Vinacomin Chief Executive Officer Dang Thanh Hai said in a statement.

Vinacomin, formally known as Vietnam National Coal-Mineral Industries Corp, produced 14.9 million tonnes of coal in the first four months of this year, up 10% from a year earlier, according to the statement. This accounted for 90% of the country's total coal output in the period.

South Africa needs $250B to dump coal South Africa requires $250 billion in 30 years to shift from its coal-dominated economy onto a greener footing, a report released on the sidelines of the World Economic Forum said on Thursday.

Around half of the total investment, $125 billion, is needed to ramp up wind and solar power projects as the country mothballs coalfired plants that currently supply the bulk of its energy needs, the report said.

The report was produced by academics at South Africa’s Stellenbosch University in conjunction with the Blended Finance Taskforce.

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large-scale private capital in a bid to end poverty in line with the United Nations’ Sustainable Development Goals.

South Africa is the world’s 12th biggest emitter of climate warming gases and the biggest in Africa.

Benchmark prices for high-grade Australian coal traded through the Newcastle port continues to climb. Brussels overnight provided its tick of approval for the EU to burn more coal over the next decade, a move that further supports the price boost of coal.

In November, the United States, Britain, France, Germany and the European Union agreed to offer an $8.5 billion package to help South Africa accelerate its transition from coal.

Countries like Japan unveiled its ban on Russian coal in April. While South Korea has stopped Russian coal imports in recent months. It wouldn’t be surprising if other countries mirror this move and scramble to find new sources.

Australia’s climate direction threatens coal

China is Russia’s biggest customer when it comes to buying coal, followed by Japan and South Korea combined. Elsewhere, India's favourite coal importers are from Australia and Indonesia, accounting for over 70 per cent of overall coal imports, according to Bloomberg.

policy

Australian producer New Hope has moved closer to reopening its 4.8mn t/yr New Acland coal mine in Queensland, although a change in the federal government may disrupt its plans as pressure for a shift in climate policy threatens coal mining.

The Queensland Coordinator General has issued a change report for New Acland, which New Hope's management hopes provides a clear pathway for the Queensland state government to approve within weeks the reopening of the mine, which shipped its last coal in December 2021. But the formation of a Labor government in Canberra could at least slow the process, after it was elected on a mandate of reducing carbon emissions.

The Labor federal government will govern with a slim majority in the lower house of parliament, after it reached the key 76 seat majority on 30 June. But it will still be reliant on the Greensdominated opposition in the upper house, the Senate, to pass legislation. The Greens campaigned to halt all new coal mines in Australia.

Australian coal on a tear as decoupling from Russia continues As countries decouple themselves from Russia, the price of coal has reset record highs as major importers turn to Australia for their shipments.

26 | CCAI Monthly Newsletter May 2022

Amid this structural shift, Whitehaven Coal is now debt free, Yancoal reinstated its dividend after strong cash earnings while Terracom paid a lump sum of debt, boding well for a future dividend payment.

BUMA Australia signs contract with Bowen Coking Coal PT Delta Dunia Makmur Tbk has announced that its subsidiary, PT Bukit Makmur Mandiri Utama (BUMA), through its Australian subsidiary, BUMA Australia Pty Ltd, will immediately commence new mining services for Bowen Coking Coal’s (BCC) Broadmeadow East metallurgical coal project. The new Broadmeadow East contract is valued at AUS320 million, over a three-year term, with the option to extend for a further year (the contract).

The project is located 25 km northeast of the township of Moranbah, within the Central Bowen Basin in Queensland. BUMA Australia has successfully operated in the immediate vicinity for 14 years at the BHP Billiton and Mitsubishi Alliance’s (BMA) Goonyella project.

The project is expected to produce 4.8 million tpy of ROM coal over four years.

The contract also confirms Delta Dunia

Makmur’s strategy of remaining committed to providing end-to-end mining services and adjacent businesses in Indonesia and Australia.

Total supplies of Russian thermal and metallurgical coal to China in April reached 4.37 mio t, twice the level of the previous month.

2021 reflected a transformational year for Delta Dunia Makmur and established a strong foundation for the Company’s continued growth.

Revenues and EBITDA increased by 51% and 43%, respectively, y/y to USS$911 million and US$234 million.

Chinese traders, who settled financing and lending issues with their banks, boosted purchases of Russian coal amid soaring prices in Australia.

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Europe admits it’ll have to burn more coal as it tries to wean itself off Russian energy The European Commission has fleshed out details of a plan to ramp up the EU’s renewable energy capacity and reduce its reliance on Russian fossil fuels, at the same time acknowledging that existing coal facilities may have to be used for “longer than initially expected.”

A document outlining the Commission’s aims for the REPowerEU plan was published on Wednesday, highlighting the importance of energy savings, the diversification of energy imports and speeding up what it called “Europe’s clean energy transition.”

Coal trade between China and Russia came to a standstill in late February, when international banks suspended issuing letters of credit under the threat of Western sanctions.

However, as some Chinese banks eased restrictions on financial assets for certain customers, coal trade with Russia resumed in March, although some obstacles, such as shipping and insurance, remain.

Russian premium coking coal at seaports in northern China traded at an average of 386 USD/t in April, compared to 473 USD/t for Australian coking coal of similar quality. .

Germany puts coal phaseout on hold to prepare for possible Russian gas supply cut

In total, it envisages extra investment of 210 billion euros ($220.87 billion) between 2022 and 2027. When it comes to renewables’ share in the EU’s energy mix, the Commission has proposed that the current target of 40% by 2030 should be increased to 45%.

European countries are canceling the closure of coal-fired power plants and getting open-cast mines back to business to prevent a collapse in the energy system if Russia decides to stop supplying them with gas. Germany will keep the power generation fleet in the sector in reserve after the operating permits expire.

The Commission’s proposals came on the same day the governments of Denmark, Germany, the Netherlands and Belgium said they would aim for a combined target of at least 65 gigawatts of offshore wind capacity by 2030. By the middle of the century, they are aiming for 150 GW of capacity.

Germany is preparing the legal framework for the reactivation of the power plants running on fossil fuels which are due to be closed this year and next, according to media outlets that saw the plans. The emergency measure is aimed at offsetting the potential shortage at gas-fired power plants if Russia cuts off supply.

Russia doubles coal exports to China in April 2022

Unnamed sources said the government in Berlin would nevertheless remain committed to its 2030 coal phaseout deadline. At the same time, Germany is accelerating the projects for terminals for liquefied natural gas (LNG) and CCAI Monthly Newsletter May 2022

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gas infrastructure and pushing consumers to save energy.

US Coal’s comeback perseveres through mid-2022 American coal prices in the aftermath of the coronavirus have reached unprecedented highs and world events are notching prices even higher see “Russia-Ukraine war likely to bolster U.S. coal imports,” Trains News Wire, March 28, 2022.

While coal supply remains tight, continued favorable pricing may increase miningcompany confidence to tap into reserves made cost-effective by today’s spot-market prices, potentially leading to new railroad opportunities.

Coal prices continue reaching new highs in most markets. Powder River Basin coal has receded from its December 2021 peak but is still $3 higher per ton than 10-year averages.

Compared to the same period a year ago, spot prices per short ton of Illinois Basin coal are up a staggering 255%; Central Appalachia up 110%; Northern Appalachia up 84%, Powder River Basin up 28%; and Uinta Basin up 22%.

U.S. railroads have hauled more than 1.1 million coal carloads through May 7, according to Association of American Railroads data, a near 7% increase year-over-year. Year to date, Union Pacific’s coal traffic is up 24% and BNSF Railway’s is up 8%. In the East, CSX’s coal business is down 6% and Norfolk Southern’s is down almost 3% year-over-year.

Warrior Met Coal resumes development of its Blue Creek reserves US - Warrior Met Coal, Inc. is relaunching the development of its Blue Creek reserves into a new, world-class longwall mine located in Alabama, near its existing mines.

28 | CCAI Monthly Newsletter May 2022

Once completed, this transformational growth investment will reinforce Warrior’s position as the premier US pure-play producer of premium metallurgical (met) coal products that are sought by customers throughout the global steel industry. Met coal, unlike thermal coal, has unique physical properties and is used solely for the production of steel.

Previously, the company had delayed the development of the Blue Creek reserves due to the uncertainty of Covid-19, as well as market conditions and the labour strike. As market conditions have significantly improved and the company’s cash generation and cash on hand have significantly increased, the company has decided now to move forward with the development

Coal prices are surging, but Appalachian boom unlikely David Byrd, of Sulphur, Kentucky, is one of the few people left who sell coal for household uses. Think heaters and blacksmiths. And after doing it for 62 years, he can tell the quality of each piece just by feeling them.

“See how smooth that is?” he said, picking up a piece he says is high-quality and “pure oil.” Then he finds a piece that flakes apart in his hands — which he says means it’s “kind of trash.”

Byrd says he sells one ton of coal (about the amount that could go in the bed of a normalsized pickup truck) for about $185. But with recent changes in the coal market, he could sell it for a lot more. One ton of coal was valued at about $85 last May. Now, it’s worth nearly four times as much, hovering at about $320.

What Byrd means is that companies want to ship their coal abroad, on trains just like the one rolling by his house. That’s because European countries boycotting Russian natural gas still need a reliable energy source, says Bill Wolf, a market analyst at mining consulting firm John T. Boyd.

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We provide at supplying quality coal, being environmentally responsive and community friendly attracts our customers and retains them. We understand ardently the need to be extremely aware and responsible corporate citizens GLOBAL MINETEC LIMITED also takes strict measures when it comes to safety of its employees, machineries and tools and ensures that all government safety parameters are adhered to, and no deviation of any kind is tolerated.

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The coal is loaded and transported through tippers and subsequently loaded to wagons to be carried to the respective thermal power plants. GLOBAL MINETEC LIMITED is a brand that believes in strengthening its innate competence and growing better each passing day. With numerous new ideas out of its pandora box GLOBAL MINETEC LIMITED strives at becoming a giant business conglomerate. With strong core values and impeccable services GLOBAL MINETEC LIMITED is the name you can count on.

Contact details: Mail ID: gmtltalcher2018@gmail.com Mobile No: 9133537132,7972717847 CCAI Monthly Newsletter May 2022

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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 324.00 USD 262.05 USD 207.42 USD 144.83 USD 90.86

Monthly Price- FOB INR 24997 INR 20217 INR 16002 INR 11173 INR 7010

Monthly Change (USD) 79.22 58.51 47.36 29.50 17.91

Indicative Pet Coke Price PET COKE

Sulphur

Price

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

-5% + 8.5%

INR 22257 INR 19133 ($248.00)

Monthly Change ($) INR 441.00 2.50

USA (CIF)

- 6.5%

INR 19789 ($256.50)

4.00

Exchange Rate

Change (Monthly)

INR 77.15

0.83

Indicative Coking Coal Price Current Month Monthly Change (USD)

Premium Low Vol FOB CFR China 501.47 458.88 19.97

-51.75

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 464.97 417.88 427.63 483.75 481.75 635.38 578.88 19.97

-58.75

South African Coal News: * A group of the world’s richest nations offered South Africa debt guarantees as part of a proposed $8.5 billion deal designed to cut the nation’s reliance on coal for power generation.

The guarantees would enable South Africa or companies such as state power utility Eskom Holdings SOC Ltd. to borrow money needed to close down coal-fired power plants and enable the generation of renewable energy.

Concessional loans and grant funding would be included in the support, which was announced at the COP26 climate summit last year, and may be extended over the next three to five years. * Mining companies in South Africa have resorted to trucking coal to ports to meet a surge in European demand since the war in

30 | CCAI Monthly Newsletter May 2022

50.31

49.88

49.88

-34.25

-83.25

Ukraine started, bypassing the deteriorating rail infrastructure they blame for billions of dollars in lost revenue. Transporting coal via trucks costs about four times more than the Rail transport. As a whole, South African coal miners are putting about 400 trucks on the road a day, trucking some 6 million tonnes of coal on an annualised basis, according to the industry source. * South Africa’s Botswana has been inundated with inquiries to supply coal to Europe and estimates that demand from Western countries could top a million tonnes a year as the Ukraine war forces Europe to pivot more to Africa for energy resources. Botswana has seen demand from both governments and the private sector in Europe and estimates that demand from

Europe could reach more than 50,000 tonnes a month. Coal prices have more than doubled since the beginning of the year and mining companies in South Africa are scrambling to pump up production and benefit from high prices.

Australian Coal News: * Rapidly phasing out coal power plants and mines will be vital for Australia's new government to meet its more ambitious carbon emissions targets, environmentalists said, while urging renewable energy investments for mining communities. A phase-out of coal power is "crucial" to meet the Labor government's new climate goals, analysts say as Australia's dependence on coal-fired power makes it one of the world's largest carbon emitters per capita. * As the Ukraine war upends global commodity markets and triggers a scramble for resources, the crisis is redrawing the Asia-Pacific region’s energy map. With similar trade profiles, Russia and Australia compete in many key markets, from gas and coal. The country’s coal miners have been scrambling to keep up with record demand, which has sent prices soaring.

Newcastle coal futures, the commodity’s benchmark for Asia, rocketed to more than $400 per tonne in early March and currently remain about $350. Some producers reported in April that Australian coal sold out due to the rush. * The resilience of seaborne premium low volume coking coal prices from Australia has squeezed margins for metallurgical coke makers in countries like India in the face of lower global steel prices and stoked working capital concerns among steel mills. Limited coking coal supply from Australia has contributed to limited participation from steel mills in spot trade. On top of that China's refusal to buy Australian coals has failed to free spot tonnages amid supply disruptions.

Indonesian Coal News: * Indonesia's Ministry of Energy and Mineral Resources has set its May thermal coal reference price -- also called Harga Batubara Acuan, or HBA -- at $275.64/mt, down $12.76/ mt from April, due to an increase in world coal supply. Indonesia's HBA continued to climb over January-April, starting at $158.5/mt in January, $188.38/mt in February and $203.69/mt in March. Only this month the graph has dropped slightly. *Indonesian thermal coal continued to reel from China's absence in another thinly-traded session, as its price advantage reversed against Chinese domestic cargoes. Indonesian 4,700 Kcal/kg NAR coal has lost its price edge over same-CV Chinese coal for nine weeks in a row.

Only 3,800 Kcal/kg NAR Panamax cargo for June delivery was sold by a large coal mine based in Kalimantan. Demand from India and South Korea was stable with trading levels close to $90/t FOB for Supramax 3,800 Kcal/kg NAR, while Europe's buying enthusiasm abated as their stockpiles have improved recently. * A surge in coal prices is driving a wave of bank loans to miners in Indonesia, the world’s fifth-largest coal producer and top exporter.

Data from Indonesia’s financial regulator, the OJK, show that lenders channelled 26.83% more money to the country’s mining industry in January 2022 compared to the same period in 2021. The increase is much higher than the year-on-year growth in overall loans of 5.79%.

US Coal News: * Tight coal supplies and increased demand have driven up prices, allowing U.S. coal producers to reap profits after many faced bankruptcy and large debt loads in recent years. And with U.S. coal consumption on a path of long-term decline, coal companies are not investing in new production, but are instead returning much CCAI Monthly Newsletter May 2022

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of their windfall gains to shareholders. With coal company share prices increasing as much as 986.2% in one year, some investors may now also collect the rewards of betting on the sector. The share price of Alpha Metallurgical Resources Inc. jumped 986.2% year over year while the nation’s largest coal producer, Peabody Energy Corp., recorded a 485.0% increase. * US coal production is forecast to increase this year, buoyed by a strong export market and inventory replenishment in the power generation sector, says the US Energy Information Administration (EIA). In its ‘Short-Term Energy Outlook’, the EIA states that US coal production will increase by 20- million short tons (3%) in 2022 to 598-million short tons and by sevenmillion short tons (1%) in 2023. *U.S. coal employment swelled alongside higher demand since the summer of 2021, but total production volumes were flat for the past three quarters as producers struggled to make coal shipments. Production has been climbing along with an increase in demand amid higher natural gas prices, leading to an uptick in hiring.

The average number of employees in the U.S. coal sector has grown over the past three quarters, rising 3.5% between the second and third quarter of 2021 alone.

Pet Coke News: * Petroleum coke market size is expected to grow from $21.56 billion in 2021 to $24.44 billion in 2022 at a compound annual growth rate (CAGR) of 13.3% and to $34.36 billion in 2026 at a CAGR of 8.9%. The rise in the production of steel is expected to propel the petroleum coke market growth going forward. The petroleum coke market consists of sales of petroleum coke by entities (organizations, sole traders, and partnerships) that is a carbonaceous material produced by coke-units in oil refineries or other cracking processes. * Indian petcoke producers have increased their domestic prices for May amid tight supply and elevated global thermal coal prices due to countries struggling to replace Russian

32 | CCAI Monthly Newsletter May 2022

coal. India’s largest petcoke producer Reliance Industries Ltd. increased its offer by Rupee 441/ mt ($5.77/mt) from April. Chennai Petroleum Corporation Ltd., or CPCL, a subsidiary of staterun Indian Oil Corp., has revised its price for domestic petcoke to Rupee 22,070/mt for May ’22.

Shipping Update: * The Baltic Exchange’s main sea freight index rose this week due to higher rates for all vessels.

The overall index, which factors in rates for capesize, panamax, supramax and handy size shipping vessels, was up 100 points, or 3.1%, at 3,289 points, the highest since December ’21. The capesize index gained 221 points, or 5.31%, to 4,385 points. Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, were up $1,837 at $36,368. Strong demand for vessels in the far-East, with increased activity in both West Australia and Indonesia, is impacting nearby laycans out of South Africa which see limited amounts of tonnage available, analysts say. * Global supply chain problems look set to worsen as China's COVID-19 lockdowns, Russia's invasion of Ukraine and other strains cause even longer delays at ports and drive up costs in the dry bulk market including coal and other essentials. The study by analysts at Royal Bank of Canada (RBC) found that one-fifth of the global container ship fleet was currently stuck in congestion at various major ports. In China, ships awaiting berth at the Port of Shanghai now tally 344, a 34% increase over the past month.

In Europe too, ships from China are showing up an average of four days late causing a shortage of empty containers to take European-made goods to the U.S. east coast. * Australia’s Graincorp, the country’s top grains handler, said disruptions to exports from the Black Sea because of the Ukraine conflict could potentially last several years. “Whilst it’s very difficult to predict exactly what’s going to happen in the Black Sea, it’s certainly our view that it’s going to be disrupted for a significant period of time,” Graincorp Managing Director Robert Spurway said. “It could run to several years, given the very disruptive hostilities on the ground in Ukraine, the infrastructure in that country that’s been damaged.”

OVERALL DOMESTIC COAL SCENARIO Coal Production (in MT) Company CIL SCCL

April 2022 53.47 5.32

April 2021 41.89 4.86

% Growth 27.64 9.59

Apr-Mar 2022 53.47 5.32

Apr-Mar 2021 41.89 4.86

% Growth 27.64 9.59

Overall Offtake (in MT) Company

April 2022

April 2021

% Growth

Apr-Mar 2022

Apr-Mar 2021

% Growth

CIL SCCL

57.5 5.74

54.24 5.44

6.01 5.46

57.5 5.74

54.24 5.44

6.01 5.46

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

April 2022

April 2021

% Growth

Apr-Mar 2022

Apr-Mar 2021

% Growth

CIL SCCL

49.72 4.82

42.32 4.48

17.50 7.65

49.72 4.82

42.32 4.48

17.50 7.65

Company

Coal Qty. Allocated April 2022

Coal Qty. Allocated April 2021

Increase over notified price

Coal Qty. Allocated Apr-Mar 2022

Coal Qty. Allocated Apr-Mar 2021

Increase over notified price

CIL

16.16

25.26

345%

16.16

25.26

345%

Spot E-auction of Coal (in MT)

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

Coal Qty. Allocated April 2022

Coal Qty. Allocated April 2021

Increase over notified price

Coal Qty. Allocated Apr-Mar 2022

Coal Qty. Allocated Apr-Mar 2021

Increase over notified price

CIL

0

21.88

0

0

21.88

0

Increase over notified price

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

Coal Qty. Allocated April 2022

Coal Qty. Allocated April 2021

Increase over notified price

Coal Qty. Allocated Apr-Mar 2022

Coal Qty. Allocated Apr-Mar 2021

CIL

0

103.46

0

0

103.46

Company

Coal Qty. Allocated April 2022

Coal Qty. Allocated April 2021

Increase over notified price

Coal Qty. Allocated Apr-Mar 2022

Coal Qty. Allocated Apr-Mar 2021

CIL

0

0.13

0

0

0.13

Special Spot E-auction (in MT) Increase over notified price

Special Spot E-auction Scheme 2020 For Import Substitution Company CIL

Coal Qty. Allocated April 2022 0

Coal Qty. Allocated April 2021 0.64

34 | CCAI Monthly Newsletter May 2022

Increase over notified price 0

Coal Qty. Allocated April-March, 2022 0

Coal Qty. Allocated April- March, 2021 0.64

Increase over notified price

CCAI Monthly Newsletter May 2022

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REGISTERED

36

KOL RMS/022/2022-2024