CCAI Newsletter Nov-19

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Vol. XLVIII No. 08 Published on : 28.11.2019

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From the Editor’s Desk

Close to the heels of India’s dec ision to float global tenders for commercial coal mining for the first tim e, the country, that has fift h largest coal reserves in the world, is pla nning to ease out mining nor ms such as lowering advance payment by around 10% of the estima ted value of blocks and offering larger min ing blocks in order to attrac t overseas players to invest in the fossil fuel sector.

The ministry has decided to auction blocks for commercia l mining on a revenue sharing basis and proposed to announce incent ives for faster production. To incentivize ear ly bidders, the government is wil ling to offer up to 20% deduction in its rev enue share. It is also planning to introduce single-window clearance sys tem for mining lease, land acquisition and other approvals for private coa l blocks.

Though no date has been fina lized yet for the global auction , it is expected to take place before 2019-en d.

Meanwhile, Coal India, which currently accounts for four fifth of the country’s coal output, has set the target to produce 750 mil lion tonnes in the next financial year. Acc ording to Coal Minister Pralha d Joshi, the PSU will produce 1 billion ton nes of coal and offer 10 thousa nd new jobs

by FY 2024. In order to boo st its production, CIL will dev elop 55 new coal mines and expand 193 existing ones in the next five years.

The Ministry also said the gov ernment will now prioritise get ting contracts for coking coal imports at com petitive prices instead of trying to buy coal mines or acquire stakes in com panies in Australia, Canada, the US and Russia as it had planned ear lier.

In the power sector, steps taken by the government and lenders to rejuvenate the stressed power plants are showing results wit h 11 coalbased projects with combin ed capacity of 12.7 giga wa tt (GW ) have started to roll.

Amid rising concerns over clim ate change around the world , India has come a long way in its pus h towards cleaner energy as the country’s installed capacity of renewa ble has risen six fold to nea rly 83 gigawatts, while solar power gen eration have grown around 12 times. India’s hydroelectricity generation also soared 16 per cent in this fina ncial year so far, the highest in five yea rs while the government has set up a total capacity of 56.34 MW for power generation from waste in last three years.

A rough estimation by Pow er Ministry says India’s ren ewable energy production will account for 55 per cent of the country’s total energy mix by 2030.

4 | CCAI Monthly Newsletter November 2019

Content Vol. XLVIII No. 08 November, 2019

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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16 Domestic

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.

22 Global 26 |In Parliament 31 |Overall Domestic Coal Scenario 32 |Monthly Summary Of Domestic Coal Monthly Summary Of Imported Coal & 34 |Petcoke

36 |Energy Generation Report And Offtake Performance 37 |Production Of Cil And Subsidiary Companies CCAI Monthly Newsletter November 2019

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CONSUMERS’ PAGE Present Coal Scenario Coal India has produced 50.02 mt of coal in November 2019, dropped by 3.9% compared to the same month (52.06 mt) last year. For the period April-November 2019, the miner has produced 330.38 mt of coal, declined by 7.8% compared to corresponding period of previous year (358.30 mt).

Coal offtake was down by 7.6% to 47.37 mt in November this year as compared to last year (51.26 mt). Total offtake for the period April-November 2019 was 363.63 mt, declined by 7.2% compared to same period last year (392.02 mt).

Consumers’ Concern 1. Coal Stock Position Coal production by CIL has started to pick up after a slowdown during monsoon. It is expected to increase further as winter sets in and will enable thermal power plants stock fuel for meeting increased power demand during summer next year. Production hike may also reduce the import of coal for industries as well.

06 | CCAI Monthly Newsletter November 2019

2. Coal Quality issues Consumers are facing the issue of grade slippages from different sidings/collieries since long. A list of mines is stated below in this regard:

Coal Company Collieries/Sidings (Declared Grades)

ECL

DBCP-Siding (G-4) of Pandaveswar Area, Parbelia (G-4), Mouthdih G-4), Patmohona (G-4), Chinakuri (G-4), Dubeswary (G-4), Narsamuda (G-4) and Bejdih (G-6) of Sodepur Area, Chitra (G-6/G-8) of SP Mines Area, SBP 1 (G-5) of Sonepur Bazari Area, Bankola -1 (G-4), Khandra (G-4), Kumardihi-A(G-4), Tilaboni (G-4) & Shyamsundarpur (G-4) of Bankola Area, Jhanjra (G-5) of Jhanjra Area, Madhabpur (G-4), Madhabpur-Patch (G-5) & Jambad OCP (G-5) of Kajora Area and Gourangdi (G-8), Bonjemahari (G-5), Dabor (G-7) & Mohanpur (G-7) and Gourangdi Begunia (G-7) collieries of Salanpur Area and Sankurpur (G-6) of Kendra Area

BCCL

Dahibari (G-6) & Dohibari OCP (G-8) of Chanch Victoria Area and Muraidih (G9) & Phularitand (WIV) collieries of Barora Area, ENA OCP (W-III) of Kusunda Area, Rajapur OCP (W-III) of Bastacola Area

SECL

Kusmunda OC (G- 11), Gevra OC (G- 11), Baroud OC (G-09), Jampali Mines (G-12 & G-15) and Govinda (G-11) & Katora Mines (G-8) and Chirimiri Sidings

CCL

Magadh Mines (G-12) and Amrapali Mines (G-11), Gridih (G-8/G-10), Central Pit Area'

WCL

Tawa- 1 & Tawa- 2 Mines (G6) and Chhattarpur- 1 Mines (G-9) of Pathakhera Area and Neharia Mines (G-7) of Pench Area CIL has been requested for formulation of a suitable policy so that such situation does not arise in future.

Therefore, consumers have requested the Coal Ministry, Coal Secretary, Coal Controller, CIL & its Subsidiaries for taking necessary action so that they may receive declared grades of coal from the above mentioned sources.

4. Price hike in WCL

3. Non-receipt of Referee Analysis Report, reconciliation and credit notes from different CIL Subsidiaries and request for formulation of a suitable policy for all Subsidiaries

WCL has increased price of coal in 11 mines of specific areas starting from 13 percent in G2 grade to even in the tune of 63 percent for power sector and more than 52 percent for nonpower sector in G15 grade of coal compared to last notified price.

In spite of depositing the required amount to the Referee Laboratory for analysing the samples consumers have challenged, they have not received Referee Analysis Reports since long. Due to non-receipt of these reports entire reconciliation procedure is held up at different Subsidiary Coal Companies resulting in enormous delay in issuance of credit notes by the Subsidiaries.

Consumers have requested to revisit the decision and continue with the earlier coal price in these mines.

5. Shortage of coal quantity in rakes Consumers both in the power and non-power sectors have witnessed shortage of 2 to 6% coal quantity in the rakes received by them CCAI Monthly Newsletter November 2019

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from almost all the CIL Subsidiaries. In a few rakes, shortages have gone up to even higher.

Authorities should intervene into the matter in order to resolve it.

Weighment sheet and RR. These result in overloading penalty to the customers in some wagons though in actual there is no overloading. This should be taken care of.

6. Issues of Railways faced by the consumers.

7. Cancellation of rakes due to nonavailability of coal from SECL & WCL and charging of wagon registration fees by Railways.

 Sick wagons: Due to supply of sick wagons the overall loadability of coal rake reduces.

Coal companies does not take this in account while allocation. Thus the coal materialization reduces.  Overloading Penalty: Coal quality and its density differs from the same siding. Thus during loading, coal companies are unable to judge the weighment of coal in specific wagon. Hence, in some wagons under loading and in some wagons overloading happen.

Consumer does not have any role in weighment procedure. Overloading penalty should be removed as the same is recovered in RR from the consumers.  Mix wagons: Now a days the rake comprises of Mix wagons i.e. N,NHL,NR. Thus in single rake the loadability of individual wagon differs. Hence, there is confusion during loading which leads to under loading/overloading of wagons.  Mis-match in Weighment sheet & RR: : Multiple times it is observed that there is mis-match between the wagon details of

08 | CCAI Monthly Newsletter November 2019

Number of rakes to the industries (including CPPs) have been cancelled from different Sidings of SECL and WCL as the loading did not commence within stipulated time due to nonavailability of coal. Railways are also charging wagon registration fees from the consumers for cancellation of these rakes.

Consumers have requested for formulating a suitable policy so that the cancelled rakes are revalidated and seniority of such long awaited rakes do not get lapsed. Wagon registration fees should not be charged by the Railways as well for no fault at the consumers’ end.

8. Refund of CST. Though consumers have deposited ‘C’ form in time and regular follow ups with the higher authorities are going on in this regard, some of the consumers in the non-power sector have not received refund of CST amount from SECL so far. Therefore, SECL should return the amount at the earliest.

CCAI Monthly Newsletter November 2019

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POWER Power generation falls for third straight month in October Power generation in the country fell 12.7% yearon-year in October, recording the third straight month when electricity produced was less than the corresponding year-ago month.

According to provisional data from the Central electricity authority, 105.6 billion units (BU) were generated in the month compared with 121 BU in October 2018.

Thermal power plants generated 78.3 BU, 19.8% lower than October last year, indicating a further fall in their plant load factors (PLF). Renewable energy sources decreased their generation by 6.4% y-o-y in the same month to 7.3 BU, in spite of a 15% rise in its installed capacity.

The PLF data for the month has not been made available yet. PLF of coal power plants — many of which are already distressed due to lack of adequate demand and coal supply issues —

10 | CCAI Monthly Newsletter November 2019

touched an all-time low of 51.1% in September.

In August and September, electricity consumption fell in Maharashtra, Tamil Nadu and Odisha, where industrial and commercial users usually account for around 40% of electricity consumption.

Over half of India's coal-fired power plants to miss emissionnorm deadline More than half of India's coal-fired power plants ordered to retrofit equipment to curb air pollution are set to miss the deadline, private industry estimates and a Reuters analysis show, as millions in the country wake up to toxic air each day.

Thermal power companies, which produce three-quarters of the country's electricity, account for some 80% of India's industrial emis-

sions of sulphur- and nitrous-oxides in India, which cause lung diseases, acid rain and smog.

India, currently struggling with some of the worst air pollution levels on earth, has previously already extended its December 2017 deadline.

India has a phased plan for plants to comply with the emission norms, with some plants having until end-December 2019, while others have up to the end of 2022 to comply.

A total of 440 coal-fired units that produce 166.5 gigawatts (GW) have to comply with the regulations by December 2022.

An analysis of Central Electricity Authority (CEA) data indicates 267 units, which produce 103.4 GW of power, have to be compliant between December 2019 and February 2022. Of these, 224 units, which produce 84.8 GW of power, have not yet awarded contracts for installing FGD units, meaning that based on the industry's own estimates of installation timelines, they are set to be non-compliant.

That means at least 51% of all coal-fired units which have the emission targets could fail to comply with the deadlines.

Govt sets up over 56 MW power capacity from waste in last 3 yrs: R K Singh As part of its efforts to promote waste-to-energy, the government has set up a total capacity of 56.34 MW for power generation from waste in last three years.

So far 199 waste-to-energy projects for generation of biogas/bio CNG/ power based on urban, industrial, agriculture waste and municipal solid waste have been successfully established in the country as on October 31, 2019, Minister of State for Power, New and Renewable Energy R K Singh said in a reply to the Lok Sabha.

"A total capacity of 56.34 MW has been set up

for power generation from waste garbage/material during last three years and current year in the country," he said.

The MNRE, he said, is implementing a scheme 'Programme on Energy from Urban, Industrial and Agricultural Wastes/Residues' for promoting setting up waste-to-energy to recover energy in the form of biogas or bio-CNG from urban industrial and agricultural wastes.

Stressed power assets back on stream Steps taken by the government and lenders to address the stress in the power generation sector are starting to show results, with as many as 11 coal-based projects with combined capacity of 12.7 giga watt (GW) finding resolution and going on stream over the last six months. Another six stuck projects (total capacity 7.8 GW) too, are seen coming out of the abyss soon.

Two government schemes — one to get the stressed projects assured customers through power purchase agreements with state distribution entities (discoms) and the so-called Shakti scheme to provide them with coal linkages — are principally behind the turnaround.

The government had earlier identified 34 power plants of 40 GW capacity under the stressed category, including commissioned capacity of 24.4 GW. According to sources, some of the stressed plants which gained from the Shakti scheme are Adani Tiroda, GMR Kamalanga and Adhunik Power.

Electricity generation units, which were helped by the new PPAs from the power ministry’s ‘pilot scheme’ include Essar Mahan, SKS Binjkote, Avantha Korba and Jaypee’s Bina and Nigrie units. These apart, the Anpara C unit of Lanco Infratech has been resolved through the NCLT. CCAI Monthly Newsletter November 2019

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Power sector needs good dose of private investments: Amitabh Kant India needs a good dose of private investment to make power distribution viable, and a strong regulatory framework to attract foreign investment, Niti Aayog CEO Amitabh Kant said.

Foreign direct investment (FDI) in India has grown by 66% at a time when investment across the globe has fallen by 30%, but FDI in the power sector can come in only if the regulatory regime is predictable and consistent, Kant said.

In September, total overdue amount on power distribution companies, which was not cleared even after 60 days of grace period offered by generators, was estimated to be Rs 52,408 crore against Rs 34,658 crore in the same month last year.

In order to give relief to power generation companies, the Centre has enforced a payment security mechanism where discoms are required to open letters of credit (LoC) for getting power supply.

Echoing this thought, RP Singh, chairman at Uttar Pradesh Electricity Regulatory Commission (UPERC), said without smart metering, India’s power sector will remain in financial stress.

Energy Efficiency Services Ltd (EESL) has installed over 500,000 smart meters in Uttar Pradesh, Delhi, Haryana, Bihar and Andhra Pradesh during August this year. The smart meters operational in these states were set up to enhance consumer convenience and rationalise electricity consumption.

Renewables to account for 55% of energy mix by 2030: Minister Minister RK Singh said India’s renewable energy production will account for 55 per cent of the country’s total energy mix by 2030. He also said the country will exceed its target of installing

12 | CCAI Monthly Newsletter November 2019

200 GW of renewable energy capacity in 2022.

India has already installed renewable energy capacity of 83,000 MW, while another 31,000 MW is being executed and 35,000 is under bidding, he said. “So this becomes 140,000-145,000 MW. In hydro, we have installed capacity of around 45,000 MW and under installation capacity is about 13,000 MW. Which makes it around 60,000 MW. So we will cross 200,000 MW capacity of renewable energy by 2022,” he said.

Singh said India’s energy situation had changed significantly. “We have transitioned a country which had a deficit, so far as energy production capacity was concerned, to a country which is now a surplus and we are able to produce more energy than we consume and we are exporting energy to our neighbouring countries,” he said. India has aggressively expanded its wind and solar energy capacity in the past five years, helped by aggressive bidding by companies.

Coal India invites bids for 100 MW solar projects Coal India has invited bids from developers for setting up a 100 MW solar power plant in Solar Power Developer and Operator mode in Chhattisgarh. It will cater to the green energy requirement of Coal India subsidiary of South Eastern Coalfields which consumes around 850 million units of power annually. The Proposed Solar Project will be established in capex mode.

Coal India’s total annual Power requirement for coal production is around 4.5 billion units which would require setting up 3000 MW of solar power projects.

In order to achieve its goal, the company has formed a joint venture with NLC India (NLCIL), formerly Neyveli Lignite Corporation, to jointly set up 5000 MW of power generation capacity of which 3000 MW would be solar powered while the rest 2000 MW would be coal-fuelled.

Solar projects will be set up over 15,000 acres

on identified barren and reclaimed free land of Coal India and also at locations where free land is available. Estimated cost for Coal India’s solar power generation is pegged at Rs 12,000 crore.

Why India may not achieve its 2022 clean energy target India has come a long way in renewable energy in the past decade. The country’s installed capacity has risen sixfold to nearly 83 gigawatts (1 GW = 1,000 MW). And in the past 5 years, solar power, which is set to become bigger than wind energy within renewables, has seen its capacity grow around 12 times to over 31 GW, according to the Central Electricity Authority (CEA).

So for the majority of Prime Minister Narendra Modi’s first term, his government’s target of having 175 GW of installed clean energy capacity by March 2022 did not seem unrealistic. Of that, 100 GW was to be in solar energy, 60 GW in wind projects (the current capacity is 37 GW) and the rest in small hydel (up to 25 MW) and biomass plants.

However, questions about India’s ability to reach that milestone began to be raised last year, when a spate of issues related to tariff caps, land acquisition and an import duty on solar cells and modules slowed the pace of solar capacity addition. Now it seems almost certain India will fall short of its target, as delays in payments by utilities, Andhra Pradesh’s decision to renegotiate tariffs of solar and wind projects and a liquidity crunch caused by problems in the shadowbanking sector have plunged the clean energy sector into its worst crisis in recent years.

Rating agency CRISIL in a recent report said India would not have 100 GW of solar capacity and 60 GW of wind capacity even by 2024, leave alone 2022. CRISIL said it expected India to only have 59 GW of solar plants and 45 GW of windmills by March 2022. The government, not surprisingly, rubbished the report and said India would not only meet the target but exceed it.

MNRE has moved to address solar developers’ concerns over bidding norms: ICRA The Ministry of New and Renewable Energy (MNRE) has recently notified amendments to the guidelines for award of solar power projects through tariff-based competitive bidding process, relaxing the timeline for land acquisition.

This is in line with the commissioning timeline (15 months for projects in solar parks and 18 months for projects outside solar parks) from 12 months earlier.

The amended guidelines state that the tariff adoption must be approved by the appropriate regulatory commission within 60 days of submission. If the commission does not decide on the tariffs within this period, the tariff is deemed to be approved. Any delay in adoption of tariff beyond 60 days would also lead to corresponding extension in scheduled commissioning date, according to ICRA.

Hydroelectricity generation jumps 16 pc this fiscal so far; share of non-fossil fuel at record high India's hydroelectricity generation soared 16 per cent this financial year so far, the highest in five years, as the share of power generated from non-fossil fuels jumped to a record high, feeding the rising energy demand of the world's fastest-growing major economy.

Power Minister R K Singh said electricity generation in India rose 7.4 per cent in the first quarter ended June 2019, and 6.7 per cent in July.

The minister said April-October 2019 has seen the highest growth in hydroelectricity generation in five years at 16 per cent (about 96 billion units).

"Some people are deducing of a slowdown from lower plant load factor (or capacity utilisation) CCAI Monthly Newsletter November 2019

| 13

of coal-fired thermal power plants. But, they forget that lower thermal PLF was made up from higher generation from non-polluting non-fossil sources," he said.

The 1,200 MW tender was issued by SECI, the central government's nodal agency responsible for conducting auctions, for the second time this week at a ceiling tariff of Rs 2.93 per unit.

Non-fossil fuel sources accounted for 27.25 per cent of the total power generation in the country in April-October.

Adani Green Energy and Italian energy company Enel submitted bids for 200MW and 66MW respectively, industry insiders said. It has been postponed to December 5. Projects can be built anywhere in India.

He said November has seen an upturn in power generation despite no demand for air conditioning.

Only two bidders interested in SECI wind energy auction Only two bidders have evinced interest in a wind energy tender floated by state-owned Solar Energy Corporation of India, alluding to the tepid response wind tenders have been receiving lately from developers.

14 | CCAI Monthly Newsletter November 2019

A senior official at the renewable energy ministry said “Discoms will not buy power today if the tariff is more than three rupees," the person said, requesting anonymity. But experts attribute the poor participation to lack of suitable land and transmission capacity, not the ceiling tariff.

NTPC's recent wind tender, issued last month, got no participation.

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DOMESTIC CIL to meet 1-billion-tonne output goal, offer 10,000 new jobs: Minister State-owned Coal India will produce 750 million tonnes of coal in the next financial year and would offer around 10,000 new jobs to boost employment, Union minister Pralhad Joshi said.

Coal India (CIL) will further produce 1 billion tonnes of coal by FY2024, the coal ministry quoted Joshi as saying.

Joshi also directed CIL to take necessary steps to achieve this goal in light of growing energy requirements of the nation and assured the PSU of all possible help from the Ministry of Coal in this regard.

The PSU is currently given the target of pro-

16 | CCAI Monthly Newsletter November 2019

ducing 660 million tonnes of coal amounting to 82 per cent of the country's coal output.

Joshi said that with the demand for power rising steeply, there is enough opportunity for both government and private sectors to produce coal without adversely impacting each other.

Referring to the government's recent decision of 100 per cent FDI under automatic route in the coal sector as one of the much-needed structural reforms, he said that it will minimise the volume of coal import and will be mutually beneficial.

The minister sought to allay fears of domestic players and labour unions by reiterating that FDI in the coal sector does not stand for FDI in Coal India

Centre changes track to focus on coal contracts, instead of buying mines The government will now prioritise getting contracts for coking coal imports at competitive prices instead of trying to buy coal mines, as it was planning earlier.

“The plan is to not acquire assets but only freeze orders in advance to get coal at competitive prices,” said Union Coal Minister Pralhad Joshi, on the sidelines of the 8th Asian Mining Congress and Exhibition.

Coal India Chairman Anil Kumar Jha said while getting the contracts is a priority, the company will consider picking up stakes in coking coal companies instead of an outright purchase.

Till now, Coal India has been considering whether to buy coking coal mines or pick up stakes in companies in Australia, Canada, the US and Russia. It is also about to float a tender to select merchant bankers who will guide Coal India through the process.

Joshi said the decision was been taken to protect the forex outflow, which stood at Rs 2.71 trillion last year. In the same year, India had imported 235 million tonnes (mt) of coal; 50 mt of it was coking coal.

“State governments’ need to take prior approval from the centre for signing mining lease with block operators after they have received environment and forest clearances from the centre delaying the process by six months to a year.

This requirement will be scrapped from the MMDR Act.,” a coal ministry official said.

CIL to develop 55 new coal mines in next 5 yrs: Minister State-owned Coal India Ltd (CIL) will develop 55 new coal mines and expand 193 existing ones in the next five years, Parliament was informed on Wednesday.

The company is also undertaking portal-based monitoring of ongoing projects to ensure their timely completion.

“Coal India has taken steps to boost its coal production, (including) opening of 55 green field projects having capacity of 92 MTPA (million tonne per annum) and expansion of 193 brown field projects having capacity of about 310 MTPA in next five years,” Coal Minister Pralhad Joshi said in a reply to the Lok Sabha.

A new project on an unused land is called a green field project while the existing one that is modified or upgraded is called a brown field project.

Single-window clearance likely for private coal blocks

During 2018-19, around 50 per cent of the opencast coal production in CIL was through surface miners.

The government plans to speed up development of coal blocks auctioned to private firms with an online application form and single-window clearance for mining lease, land acquisition and other approvals. It plans to set up a new platform with the help of a software development agency.

Further, in order to reduce import of coal, CIL is taking up source rationalisation with part supply from higher grade coal sources.

A coal sector executive said private operators of coal blocks suffered because of problems faced in various clearances.

Coal ministry to set up management unit to speed up mine operationalistion

The centre wants coal blocks to come on stream in four-five years. It wants to increase the number of coal exploration agencies, improve infrastructure for coal and amend the law to speed up approvals.

More coal from various sources was offered through e-auction schemes, particularly special forward e-auction, for power consumers, not having fuel supply agreement with CIL sources.

The government is planning to set up a project management unit for expediting the operationalisation of allotted coal blocks. The coal ministry will hire a consultant to set up the project CCAI Monthly Newsletter November 2019

| 17

management unit, the ministry said in a notice while inviting bids from eligible entities.

“Ministry of Coal plans to take services of a consulting firm to set up a project management unit to support on ‘expediting coal block operationalisation’,” the notice for Request for Bid (RFB) stated.

India in talks with Russia to buy coking coal

The coal ministry has been exhorting allottees to step up efforts for bringing allotted blocks to production as well as enhance output.

India is in talks with Russia to source coking coal as part of efforts to reduce dependence on few exporting countries like Australia, the US and Canada, according to sources. In this regard a meeting was also held here on Tuesday in which minister of steel Dharmendra Pradhan along with members of the domestic steel and mining industry met a delegation of Russian officials and industry players, official sources said.

The ministry in September had said that policy decisions have been taken to ensure early operationalisation of coal mines but their allottees should also go the extra mile along with the government to start the mines.

The meeting comes a month after Pradhan's visit to Moscow in August where he along with representatives of top Indian steel companies had met with a large number of Russian coking coal suppliers and steel companies.

The last date for submission of bid is December 19, it said.

Coking coal is a key raw material in steel pro-

100% FDI in coal mining will help duction.

India to reach 300 MT target: DeMSTC ties up with Allahabad loitte Bank to develop e-auction platIndia's move to allow 100 per cent foreign direct investment in coal mining is a "positive move" form and a good policy enabler towards the country's long-term ambition of producing 300 million tonnes of steel per annum, a Deloitte official has said.

"I think it is a positive move on the part of the government... The global macro-economic environment is softening and it is a step in the right direction," Andrew Swart, Global leader, Mining & Metal, Deloitte, told PTI. In August, the government had allowed 100 per cent foreign investment in coal mining and contract manufacturing.

There is an opportunity to partner with some of the global miners specifically in the area of technology transfer, he said and added that this would be an important step in advancing the competitiveness of India's mining sector, particularly in the area of digitisation.

"At the end of the day, India has a significant base of resources which make it a very attractive place for global mining companies to invest," he noted.

18 | CCAI Monthly Newsletter November 2019

MSTC Ltd has signed an agreement with Allahabad Bank for the development of a dedicated e-Auction platform directly linked with the Indian Banking Association's portal (https://ibapi. net) for sale of non-performing assets (NPAs) through the SARFAESI (Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest) Act. "The e-Auction platform will be a one-of-a-kind solution, where a bidder once registered, will be able to participate in auctions for all banks.

This move will help the banks monetise NPAs through a streamlined process, thereby, increasing revenue generation," MSTC said in a regulatory filing.

MSTC is a Kolkata-headquartered Central Government of India company engaged in domestic and international trading. It specialises in the international trade of ferrous input materials and has imported millions of tonnes of ferrous melting scrap, old ships for breaking, sponge iron, hot briquetted iron, re-rollable scrap, etc.

Coal auctions under current round to fetch four

states Rs 43,000 crore The current round of coal block auction for the non-regulated sector is likely to fetch four states about Rs 43,000 crore over the life of the mines from the extractable reserves, analysts said.

This, however, assumes that the entire extractable reserve of the six blocks auctioned under the current round are mined by the companies that emerged winners. “States will also benefit from additional revenue streams like royalty on Coal India’s notified prices besides the auction premium to be paid by the win-ning bidder,” said Jayanta Roy of ICRA The highest revenue of about Rs 37,000 crore will go to Odisha, where Vedanta was the highest bidder at Rs 1,674 per tonne for the Jamkhani block with 222 million tonnes extractable.

Chhattisgarh will get about Rs 5,200 crore from two blocks — Gare Palma–IV/1 and Bhaskarpara. West Bengal will gain about Rs 900 crore from the Jaganathpur-B block, for which Powerplus Traders Pvt Ltd made the highest bid of Rs 185 per tonne for 50 million tonnes of extractable coal reserves. Madhya Pradesh is expected to receive Rs 490 crore as the estimated extractable reserves for its two blocks are very small.

It will be split between Bikram coal block that has 20 million tonnes and Brahampuri block that has 12 million tonnes.

Birla Corporation was the highest bidder for both. It bid Rs 154 per tonne for Bikram coal block and Rs 156 per tonne for Brahampuri coal block.

Jharkhand State Mineral Development Corporation showed interest in the Sugia Closed Mine under the seventh tranche and, along with NMDC Ltd and Madhya Pradesh State Mining Corporation, it also aimed for the Tokisud North, a Schedule-II mine. All eight assets on offer in the seventh tranche are Schedule-I blocks.

Mahanadi Coalfields to invest Rs 9000 crore on rail infra for coal movement Mahanadi Coalfields Ltd (MCL), a subsidiary of Coal India Ltd (CIL), would invest in upwards of Rs 9000 crore in the years to come to create railway infrastructure for enabling seamless movement of coal.

This was announced by Pralhad Joshi, Minister for Coal & Parliamentary affairs. The envisaged investments wold go into doubling of SardegaBarpali-Jharsuguda railway line, modernization of Jharsuguda railway station, construction of double-leg flyover and building of 204-km railway network in two phases of construction.

Wary of accidents at coal mines, the minister announced 300 per cent hike in ex-gratia amount for fatal coal mine accidents from Rs five lakh to Rs 15 lakh. This measure is expected to cover 0.35 million mine workers of CIL. He also announced that MCL which has given over 16,000 permanent jobs in lieu of land since its inception, will offer employment to more than 4000 land oustees in Odisha by 2024-25.

RAILWAYS

PSUs' tepid response to 9 coal blocks on offer Despite nixing busy season fee, Nine coal blocks that the government had of- Railways loading at 9-year low fered in two tranches with approval to sell their entire production have found only three public sector companies interested in two assets and no takers for the rest.

This was the first time that the government offered blocks to state-run non-coal companies for selling 100% output in the open market.

Despite scrapping the 15 per cent busy season surcharge, the Indian Railways has seen an eight per cent drop in cargo loading this October against the same period last fiscal. This is the sharpest decline in the last nine years.

In September, the Railways scrapped the 15 per cent busy season surcharge, which would have kicked in from October 1, to make it cheaper for customers to move cargo by the rail mode, and CCAI Monthly Newsletter November 2019

| 19

also attract more rail cargo.

sought comments on the proposed policy.

The Railways had moved 93.82 million tonne of coal, iron ore, cement, an over eight per cent dip against the same period last year. Also, the drop in net tonne kilometre — a productivity parameter that measures both the loading and distance moved by a commodity — has been sharper at over 11 per cent. This means that not only is the loading down, the distance of cargo movement was also lower.

“A cluster will be a defined region with co-located units across the steel value chain along with the provision of basic infrastructure facilities and other relevant value-added services. The clusters will primarily include units from secondary steel sector and ancillary industry,” the draft said.

Among the commodities that saw lower cargo movement in October 2019 include: coal (12.5 per cent), raw material for steel plants except iron ore (almost 8 per cent), domestic container movement (almost 14 per cent), cement (14 per cent), clinker (almost 3 per cent), foodgrain (13.5 per cent) and domestic container movement (almost 14 per cent).

The decline in total railway tonnage has resulted in almost nine per cent drop in October freight revenues. The year-on-year decline in revenues would have been much sharper (almost 11.72 per cent), if the Railways had not included money received from NTPC.

STEEL

Ministry proposes setting up integrated steel hubs The Ministry of Steel has proposed setting up integrated steel hubs similar to the ones in Korea, China and Germany. The hubs would support the growth of the steel sector.

According to a Draft Framework Policy-Development of Steel Clusters in India, “The Ministry is proposing creation of ‘Integrated Steel Hubs’ based on the principle of availability of raw material, logistics support and/or proximity to demand centres. It will enable capacity expansion through provision of a cohesive ecosystem, with presence of effective forward and backward linkages, single-window mechanism for swift approval of clearances and best-in-class logistics infrastructure.” The draft, uploaded on the Steel Ministry’s Website on Tuesday, has

20 | CCAI Monthly Newsletter November 2019

In addition, it will facilitate growth of small and medium enterprise units. On the other hand, ‘value-added steel clusters’ are likely be set up near demand centres.

UltraTech to sell its stake in Bangladesh-based units to Heidelberg Cement UltraTech Cement Ltd will sell its entire stake in Bangladesh- based Emirates Cement Bangladesh Ltd (ECBL) and Emirates Power Company Ltd (EPCL) to Germany's Heidelberg Cement for an enterprise value of USD 29.5 million (about Rs 211.48 crore).

UltraTech Cement Middle East Investments Limited (UCMEIL), UltraTech's UAE-based wholly-owned subsidiary, has entered into a "binding agreement with Heidelberg Cement Bangladesh Ltd for divesting its entire shareholding in ECBL and EPCL", the Aditya Birla Group firm said in a regulatory filing.

UltraTech Cement had a revenue of Rs 35,703.50 crore in 2018-19 financial year.

The company has a consolidated grey cement capacity of 117.35 million tonnes per annum (MTPA).

UltraTech Cement has 23 integrated plants, 1 clinkerisation plant, 27 grinding units and 7 bulk terminals, post the Century merger. Its operations span across India, UAE, Bahrain, Bangladesh and Sri Lanka.

The Ministry of Steel can provide the initial push needed to develop these clusters. A task force and a working group for setting up the clusters will also be formed. It will also monitor the SPV on a semi-annual basis, post set-up of the cluster.

GLOBAL Asia must quit ‘coal addiction’ to protect people from climate change: UN chief The UN chief on Saturday warned Asia to quit its “addiction” to coal, as climate change threatens hundreds of millions of people vulnerable to rising sea levels across the region.

The warning follows fresh research this week predicting that several Asian megacities, including Bangkok, Ho Chi Minh City and Mumbai, are at risk of extreme flooding linked to global warming.

Coal remains a major source of power across Southeast Asia, where breakneck economic development has spurred soaring energy demands — but at a cost to the environment.

22 | CCAI Monthly Newsletter November 2019

About one-third of Vietnam’s energy comes from coal power with a slew of new plants set to come online by 2050, while Thailand is investing in fossil fuels. Coastal areas across Southeast Asia have already seen major floods and seawater incursion linked to climate change.

New research this week showed that at least 300 million people worldwide are living in places at risk of inundation by 2050, a much bleaker picture than previous data predicted.

Destructive storm surges fuelled by increasingly powerful cyclones and rising seas will hit Asia hardest, according to the study in the journal Nature Communications.

German Coal Consumption Continues to Crash Lignite and bituminous coal produced 50 percent less energy than renewables in Germany during the first three quarters of 2019, a new report by the Centre for Solar Energy and Hydrogen Research Baden-Württemberg (ZSW) and the German Association of Energy and Water Management (BDEW) reveals.

According to the document, coal generated 125 billion kWh, down from the 171.1 billion kWh produced during the same period last year. Solar, wind and other renewable sources, on the other hand, generated around 183 billion kWh of electricity between Q1 and Q3, 2019, which covered 42.9 percent of gross electricity consumption in the country and represented a 5 percent increase over the same period last year.

In 2018, renewables and coal accounted for close to the same share in energy production, with Germany still sitting as the top eighth consumer of the black fuel.

But Chancellor Angela Merkel is on a quest to phase out coal, having set the goal of withdrawing from coal-fired power production by 2038.

Based on the results of a government-commissioned report, she also proposed the idea of producing 65 percent of Germany’s electricity through renewable sources by 2030 so that CO2 emissions could be lowered by 61 percent over 1990 levels.

China is Likely to Cap Annual Coal Imports at 300 Million Tons China will likely hold annual coal imports at between 200 million and 300 million tons, according to the president of a top industry body, suggesting that the pace of shipments so far in 2019 could tail off in the last two months and

establishing a cap on expectations for subsequent years.

Imports at this level are necessary to supplement domestic miners and maintain balanced trade with exporting nations, Yang Xianfeng of the China Coal Transportation & Distribution Association told a conference in Shanghai.

China regularly tries to control imports to help local miners by limiting the amount of competing coal. In 2018, foreign purchases were held at 281 million tons, with cargoes shut out almost entirely in the last weeks of the year.

Weaker prices were highlighted by Indonesia, China’s top supplier, which now expects its coal output to rise to over 500 million tons this year, exceeding a target of 489 million tons.

China will exceed the target of total coal consumption control during the 13th five-year Plan In 2020, China's total coal consumption and primary energy share will reach 3.8 billion tons and 55.8% respectively, can exceed the "13th fiveyear Plan" target.

2020 is the end of the 13th five-year Plan. According to the requirements of the 13th five-year Plan for Energy Development, by 2020, China's total coal consumption should be controlled within 4.1 billion tons, and the proportion should be reduced to 58 percent.

However, it is still difficult to achieve the target of 3.5 billion tons of total coal consumption and 55% of coal consumption put forward by the coal control research project.

In 2017 and 2018, China's coal consumption rebounded for two years in a row. From 2019 to 2020, it will be the key year for the realization of coal control goals.

CCAI Monthly Newsletter November 2019

| 23

The U.S. coal producers plowing ahead with new mines in a Rout

and changes in public policy, but coal and renewables are rapidly headed in opposite directions in terms of market share.

As coal prices tumble and bankruptcies rise, a few U.S. miners are still pushing ahead with plans to expand.

Two of the largest coal-fired power plants in the U.S.—the three-unit, 2,250-megawatt (MW) Navajo Generating Station in northeast Arizona and the three-unit, 2,490MW Bruce Mansfield Station in western Pennsylvania—closed this month, the latest behemoths to fall in the rapid reconfiguring of the U.S. electric power generation sector.

Arch Coal Inc. and Consol Energy Inc. remain on track to open new mines to dig steelmaking, or metallurgical, coal from the West Virginia hills.

That’s even as the market is already glutted, with prices down about 30% in 12 months.

They’re betting they can produce coal cheaply enough to profit even as their rivals retrench.

Arch, the second largest U.S. miner, has already started digging small amounts of coal from its Leer South project, which won’t reach full production of 3 million tons annually until the third quarter of 2021. The company announced the project in February, when metallurgical coal prices were around $190 per ton. Now they’re at about $137.

Consol, the eighth-largest U.S. miner, expects to begin extracting some coal next quarter from its Itmann mine in West Virginia before ramping up to full capacity in 2021. Excavation is already underway, and the company is working to hire miners.

Renewable generation in U.S. is set to surpass coal in 2021 for first time It now seems likely that annual renewable energy generation in 2021 will surpass coal-fired output in the U.S. for the first time.

Recent trends for coal, which has been rapidly declining, and for renewables, which have been rapidly growing, indicate that by 2021 powergeneration totals for both will run at least neckand-neck, and the odds favor renewables.

The balance, it turns out however, will be affected by unpredictable factors, such as weather

24 | CCAI Monthly Newsletter November 2019

As a result of these closures and others (IEEFA sees a total of at least 24,000MW of coal-fired capacity closing from 2019 through 2021), the Energy Information Administration (EIA) is projecting that coal’s share of the electric generation market will drop to 25 percent this year (from 28 percent in 2018) and will continue falling in 2020, to just under 22 percent. .

Australia poised to benefit from global energy constraints Australian Resources Minster Matt Canavan said that the latest World Energy Outlook had reinforced opportunities for Australia to strengthen its role as a growing, reliable and competitive supplier of high quality coal and gas to Asia, including the fast-growing Indian economy.

In the Stated Policies Scenario, energy demand increases by 1% per year to 2040. Low-carbon sources, led by solar PV, supply more than half of this growth, and natural gas accounts for another third. Oil demand flattens out in the 2030s, and coal use edges lower. Some parts of the energy sector, led by electricity, undergo rapid transformations.

Some countries, notably those with “net zero” aspirations, go far in reshaping all aspects of their supply and consumption.

Australia is well placed to help India meet its growing demand for coal as it continues to develop and extend electricity supplies across the country. India has been identified as a hotspot

for Australian thermal coal exports, with its potential demand creating up to 4 000 new jobs in regional Australia.

plants to 80 percent of their capacity starting in December in a broader effort to deal with a spike in fine dust here.

By 2040, Australian net coal exports are forecast to have grown by 65-million tonnes of coal equivalent, or 18%, reaffirming the important role Australia plays in supplying high quality resources, including coal, to our international trading partners, Canavan said.

The ceiling will come into effect from December to February 2020, according to the Ministry of Trade, Industry and Energy. It marks the first time for South Korea to limit the operation of coal power plants over the winter.

On liquefied natural gas (LNG), the World Energy Outlook 2019 said Australia had short-term challenges to maintain supplies for domestic consumption growth and exports. However, global natural gas demand is expected to increase by 40% by 2040.

Canavan said that Australia could play a key role in supplying this demand especially if states remove restrictions on gas development.

S. Korea to scale down operation of coal plants over winter South Korea's industry ministry said Thursday it will scale down the operations of local coal

The move came as South Korea has been making efforts to reduce the emission of fine dust, in part caused by automobiles and coal power plants.

Fine dust particles are more likely to penetrate deeper into the lungs, while ultra-fine particles can be absorbed directly into the blood stream, posing serious health risks.

The industry ministry already had local coal power plants scale down their operations over spring this year, as South Korea usually experiences the highest level of fine dust over the season.

The amount of fine dust emitted from local coal power plants reached around 23,000 tons in 2018, down 25 percent from 30,700 tons posted in 2016, according to the ministry.

CCAI Monthly Newsletter November 2019

| 25

IN PARLIAMENT GOVT. OF INDIA MINISTRY OF COAL LOK SABHA Q. No. 121 . DECLINE IN COAL OUTPUT

27.11.2019

(SHRI PRALHAD JOSHI)

SHRIMATI MEENAKASHI LEKHI:

STATEMENT IN REPLY TO LOK STARRED QUESTION NO. 121 FOR

Will the Minister of COAL be pleased to state:

(a)to(c): A statement is laid on the table of the House.

SABHA

(a) the reasons for the decline in coal output;

ANSWER ON 27/11/2019 ASKED BY SHRIMATI MEENAKASHI LEKHI,

(b) the manner in which such decline will affect the thermal power sector; and

M.P. REGARDING “DECLINE IN COAL OUTPUT”.

(c) the steps taken to increase the coal output, considering the current economic situation?

ANSWER MINISTER OF PARLIAMENTARY COAL AND MINES

AFFAIRS,

26 | CCAI Monthly Newsletter November 2019

(a):All India raw coal production increased from 565.77 MT in 2013-14 to 730.35 MT (Prov.) in 2018-19, an absolute increase of 164.58 MT as compared to increase of coal production of 73.01 MT between 2008-09 and 2013-14.

While there was a positive growth in production in the first quarter of the current year (April-June

19), production has been slipping since July.

This is largely because of heavy rainfall witnessed in coal mining areas of the country. This year rainfall has continued in the month of October also which hampered the growth in production during this month that normally taken place after the rainy session. (b): During the current year (April-October 2019), though there has been a decline in dispatch to Power sector, it has not affected the coal availability position at the Power House end. Presently, stock at Power House end stands at 22.78 MT as on 19.11.2019, equivalent to 14 days’ consumption with 5 power plants under critical list, as against last year same day’s stock of 11.68 Million tonnes, equivalent to 7 days’ consumption, with 25 Power plants reeling under criticality. (c): The coal production of CIL and its subsidiaries is being reviewed regularly at the highest level of Ministry. CIL has been asked to make all out efforts to reach the target by improving production in the remaining months of the current year. The focus of the Government is on accelerating domestic production of coal through allocation of more coal blocks, pursuing with State Government for assistance in land acquisition and coordinated efforts with Railways for movement of coal.

Prior to ongoing tranche of coal allocation, coal blocks were allocated to private companies for captive use purpose only and not for sale of coal. In the current tranche of auction, 25% of coal production has been allowed for sale of coal for private companies. In order to enhance coal production, CIL has taken the following steps: • Opening of 55 greenfield projects having capacity of 92 MTPA and expansion of 193 brownfield projects having capacity of about 310 MTPA in next five years.

• Portal based monitoring of on-going projects to ensure timely completion of projects.

• Introduction of state of the art technology to

improve its work efficiency with high capacity Heavy Earth Moving Machinery (HEMM), like 42 cum Shovel and 240 T Rear Dumpers in Gevra Expansion, Dipka & Kusmunda open cast mines.

• Introduction of Surface Miners in opencast mines to improve operational efficiency & to cater to environmental needs. During 2018-19 in CIL, around 50% of the opencast coal production was through Surface miners.

• Introduction of Mass Production Technology in underground coal mines, 2 mines are worked with Powered Support Longwall technology and 9 mines are worked with Continuous Miner technology.

Q. No. 504. FDI IN COAL SECTOR

20.11.2019 SHRI VINAYAK RAUT: SHRI SHRIRANG APPA BARNE: SHRI HEMANT SRIRAM PATIL: DR. DNV SENTHILKUMAR S.: DR. HEENA GAVIT:: Will the Minister of COAL be pleased to state: (a) whether the Government has approved 100 per cent foreign direct investment under the automatic route in mining, processing and sale and if so, the details thereof; (b) the advantage of opening 100 per cent foreign direct investment in coal sector; (c) whether this move would end monopoly of Coal India Ltd. and encourage competition and if so, the details thereof; (d) whether the Government has consulted other stakeholders including workers’ union before going for 100 per cent foreign direct investment and if so, the details thereof; (e) whether around half a million coal mine workers has gone on strike recently against FDI in coal thereby affecting the coal production in Coal India and also steep revenue loss;

CCAI Monthly Newsletter November 2019

| 27

(f) if so, whether the Government has held discussion with unions of coal mine workers on this issue and if so, the outcome thereof; and (g) the other steps taken by the Government to boost coal production in the country and reduce its import from other countries?

ANSWER MINISTER OF PARLIAMENTARY AFFAIRS, COAL AND MINES (SHRI PRALHAD JOSHI) (a) to (f): Government has reviewed the Foreign Direct Investment (FDI) policy in the coal mining, and a Press Note dated 18.09.2019 has been issued by Department for Promotion of Industry & Internal Trade, intimating allowing 100% FDI under automatic route for sale of coal, coal mining activities including associated processing infrastructure subject to the provisions of Coal Mines (Special Provisions) Act, 2015 and the Mines and Minerals (Development and Regulation) Act, 1957 as amended from time to time and other relevant Acts on the subject. Associated Processing Infrastructure includes coal washery, coal handling and separation (magnetic and non-magnetic). For sale of coal, allowing 100% FDI for coal mining activities including associated processing infrastructure is expected to attract international players and create efficient and competitive coal market.

Various Central Trade Unions (CTUs), namely, Indian National Mines Workers Federation, Hind Khadan Mazdoor Federation, Indian Mines Workers Federation, All India Coal Workers Federation and Coal Mines Workers’ Union had given one day strike notice for 24.09.2019 and Bhartiaya Mazdoor Sangh had given strike notice for five days (23rd to 27th September, 2019) to stop work in all subsidiaries of Coal India Limited (CIL) opposing the decision of the Government to allow 100% FDI in coal mining and associated processes via automatic route, for sale of coal. As per the status of production given by CIL, percentage of coal production in CIL and its subsidiaries was 81.25% of normal production on 23.09.2019, 43.38% of

28 | CCAI Monthly Newsletter November 2019

normal production on 24.09.2019 and 87.14% of normal on 25.09.2019. Ministry of Coal and CIL made efforts to persuade the CTUs to withdraw the proposed strike. A meeting was called

by Ministry of Coal on 19.09.2019 with the representatives of CTUs, however, CTUs did not attend the meeting. (g): In order to enhance coal production, Government has taken a number of steps, namely, a number of coal mines under CM (SP) Act, 2015 and MM (DR) Act, 1957 have been allocated by way of auction and allotment, coal block development and operationalization is intensely and regularly monitored, efforts are made for expeditious Environmental and Forest clearances of allocated coal blocks, coordination with State Governments are made for timely land acquisition etc. Besides these, CIL has taken the following steps to boost its coal production: • Opening of 55 greenfield projects having capacity of 92 MTPA and expansion of 193 brownfield projects having capacity of about 310 MTPA in next five years.

• Portal based monitoring of on-going projects to ensure timely completion of projects.

• Introduction of state of the art technology to improve its work efficiency with high capacity Heavy Earth Moving Machinery (HEMM), like 42 cum Shovel and 240 T Rear Dumpers in Gevra Expansion, Dipka & Kusmunda open cast mines.

• Introduction of Surface Miners in opencast mines to improve operational efficiency & to cater to environmental needs. During 2018-19 in CIL, around 50% of the opencast coal production was through Surface Miners.

• Introduction of IT enabled Operator Independent Truck Dispatch System (OITDS) in 11 nos. of mines of CIL, • Introduction of Mass Production Technology in underground coal mines, 2 Mines are worked with Powered Support Longwall technology and 9 mines are worked with Continuous Miner technology.

• For rapid coal evacuation, 19 nos. Coal Handling Plants with silos and rapid loading system

having existing capacity of 152.5 million tonne are in operation.

particularly special forward e-auction for power consumers, not having FSA with CIL sources.

Further, in order to reduce import of coal, some of the steps taken by CIL are as under:

iii. The provisions of SHAKTI policy of the Government of India for meeting the demand of various categories of power utilities are being implemented.

i. Source rationalization with part supply from higher grade coal sources. ii. More coal from various sources was offered through various types of e-auction schemes

iv. Implementation of Linkage auction for nonregulated sectors.

RAJYA SABHA Q. No. *3. COAL RESERVES IN INDIA

18.11.2019

Statement refers to reply part (a) to (e) in respect of Rajya Sabha question no *3 for reply on 18.11.2019 asked by SHRI SUKHENDU SEKHAR RAY regarding coal reserves in India:

SHRI SUKHENDU SEKHAR RAY:

(a): The total estimated coal resources in the country is 326.496 billion tonnes as per “The inventory of Geological Resources of Indian Coal� (as on 01.04.2019), prepared by the Geological Survey of India.

Will the MINISTER OF COAL be pleased to state: a. the amount of coal reserves in India has at present; b. details of amount of coal in tons produced

by Coal India Ltd. during each of last three financial years; c. details of amount of coal in tons imported to India during last three financial years, details thereof; d. details of amount of imported coal which was non-coking and/or thermal coal; and e. details of specific measures adopted by Coal India Ltd. to increase coal production, details thereof?

ANSWER MINISTER OF PARLIAMENTARY COAL AND MINES

AFFAIRS,

(SHRI PRALHAD JOSHI) (a) to (e): A statement is laid on the table of the house.

(b): Raw coal production in tonnes of Coal India Limited (CIL) during last three financial years is given below: Year Production (Tonne) 2016-17 554140000 567370000 2017-18 2018-19 606890000 Total 1728400000 (c ): The amount of coal imported in tonnes to India during the last three financial years is as follows: Year Coal Imported (Tonnes) 2016-17 190950000 2017-18 208270000 2018-19 235240000 Total 634460000 (d): The amount of coal imported in tonnes to India of non-coking and/or thermal coal variety during the last three financial years is as follows: CCAI Monthly Newsletter November 2019

| 29

Year Non Coking and/or

Thermal Coal Imported (Tonne) 149310000 2016-17 161270000 2017-18 2018-19 183400000 Total 493980000

Will the Minister of COAL be pleased to state:

(e): In order to enhance coal production, CIL has taken the following steps:

(c) the estimate of the coal to be produced by CIL during current year?

• Opening of 55 greenfield projects having capacity of 92 MTPA and expansion of 193 brownfield projects having capacity of about 310 MTPA in next five years.

• Portal based monitoring of on-going projects to ensure timely completion of projects.

• Introduction of state of the art technology to improve its work efficiency with high capacity Heavy Earth Moving Machinery (HEMM), like 42 cum Shovel and 240 T Rear Dumpers in Gevra Expansion, Dipka & Kusmunda open cast mines.

• Introduction of Surface Miners in opencast mines to improve operational efficiency & to cater to environmental needs. During 2018-19 in CIL, around 50% of the opencast coal production was through Surface miners.

• Introduction of IT enabled Operator Independent Truck Dispatch System (OITDS) in 11 nos. of mines of CIL. • Introduction of Mass Production Technology in underground coal mines, 2 Mines are worked with Powered Support Longwall technology and 9 mines are worked with Continuous Miner technology.

• For rapid coal evacuation, 19 nos. Coal Handling Plants with silos and rapid loading system having existing capacity of 152.5 million tonne are in operation.

Q. No. 5. ALLOCATION OF COAL BLOCKS 18.11.2019 DR. SANTANU SEN::

30 | CCAI Monthly Newsletter November 2019

(a) whether some of the coal blocks for which auction had been cancelled earlier have been allocated to Coal India Limited (CIL); (b) if so, the details thereof; and

ANSWER MINISTER OF PARLIAMENTARY COAL AND MINES

AFFAIRS,

(SHRI PRALHAD JOSHI) (a) to (c): A statement is laid on the Table of the House.

Statement referred to in reply to parts (a) to (c) of Rajya Sabha Starred Question No. 5 for answer on 18.11.2019 asked by Dr. Santanu Sen regarding Allocation of Coal Blocks. (a) & (b): The auction of coal mines commenced under Coal Mines (Special Provisions) Act, 2015 and the Rules made thereunder. 24 mines stand allocated through auction as on date (as Coal Mine Development and Production Agreements (CMDPA) in respect of 7 mines have been terminated out of the 31 mines that had been auctioned). None of these 7 mines has been allotted to CIL. However, for one mine, namely, Gare Palma IV/7, Chairman, CIL has been appointed as Designated Custodian on 21.03.2018 to manage and operate the coal mine. (c): As per Memorandum of Understanding between Coal India Limited and Ministry of Coal, the target of coal production of Coal India Limited for the year 2019-20 is 660 Million Tonnes (MT) and CIL has produced 302.41 MT coal up to 14.11.2019. In 2018-19, CIL had produced 606.89 MT coal.

OVERALL DOMESTIC COAL SCENARIO Coal Production (in MT) Company

October, 2019

October, 2018

% Growth

April - Oct, 2019

April - Oct, 2018

% Growth

CIL

39.4

49.8

-21.0%

280.4

306.2

-8.5%

SCCL

5.1

5.3

-4.0%

25.6

33.8

5.4%

% Growth

Overall Offtake (in MT) Company

October, 2019

October, 2018

% Growth

April –Oct, 2019

April – Oct, 2018

CIL

40.5

50.0

-18.9%

316.3

340.8

-7.2%

SCCL

4.9

5.9

-16.7%

35.4

36.9

-4.1%

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

October, 2019

October, 2018

% Growth

April – Oct, 2019

April – Oct, 2018

% Growth

CIL

33.8

41.9

-19.4%

253.0

276.8

-8.6%

SCCL

4.2

4.8

-12.1%

29.8

30.2

-1.1%

Company

Coal Qty. Allocated Oct, 2019

Coal Qty. Allocated Oct, 2018

Increase over notified price

Coal Qty. Allocated April - Oct,2019

Coal Qty. Allocated April - Oct, 2018

Increase over notified price

CIL

1.35

0.16

62%

12.60

17.84

67%

Spot E-auction of Coal (in MT)

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

Coal Qty. Allocated October, 2019

Coal Qty. Allocated Oct, 2018

Increase over notified price

Coal Qty. Allocated April - Oct, 2019

Coal Qty. Allocated April - Oct, 2018

Increase over notified price

CIL

1.97

0.00

39%

12.90

20.38

32%

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

Coal Qty. Allocated October, 2019

Coal Qty. Allocated October, 2018

Increase over notified price

Coal Qty. Allocated April - Oct, 2019

Coal Qty. Allocated April - Oct, 2018

Increase over notified price

CIL

2.53

0.00

32%

4.84

7.30

32%

Coal Qty. Allocated October, 2018

Increase Over notified price

Coal Qty. Allocated April - Oct, 2019

Coal Qty. Allocated April - Oct, 2018

Increase Over notified price

-

0.66

0.50

30%

Special Spot E-auction (in MT) Company

Coal Qty. Allocated October, 2019

CIL

-

CCAI Monthly Newsletter November 2019

| 31

MONTHLY SUMMARY OF DOMESTIC COAL Comparative Price of Domestic Coal: Power/Non-power. *The price shown in the Chart below is without: (a) Surface Transportation Charges. (b) State specific taxes. (c) Coal company or area wise charges if any. (d) Evacuation Facility Charges INR 50 per tonne w.e.f. 00:00 of 20.12.2017

GCV (Kcal/kg) (Mid-value)

G3-6400-6700

G5-5800-6100

G7-5200-5500

G10-4300-4600

G11-4000-4300

G12-3700-4000

Basic ROM price (Rs./te)

3144/ 3144

2737/2737

1926/2311

1024/1228

955/1145

886/1063

Tentative Ex-Mine Price*

4447/4447

3941/3941

2932/3411

1809/2063

1724/1959

1638/1858

COAL

* The coal ministry will auction coal blocks for commercial mining on a revenue sharing basis and proposes to announce incentives for faster production. To incentivise bidders to begin early, the government proposes to offer up to 20% deduction in its revenue share. * Raw coal production in the country has increased from 567.77 million tons (MT) in 2013-14 to 730.35 MT in 2018-19, Union Coal and Parliamentary Affairs Minister Pralhad Joshi said. He said that India had to import 234 MT coal last year for which it lost Rs 1.7 lakh crore foreign exchange. * Coal India has firmed up plans to spend Rs 56,000 crore on 66 coal projects with an annual peak production capacity of 500 million tonnes.

32 | CCAI Monthly Newsletter November 2019

RAILWAYS

* Indian Railways' freight business has grown seven times in nearly fifty years. From 1970-71 to 2017-18, the business has increased from 167.39 million tonnes to 1,159.55 million tonnes, the Financial Express reported. Responding to a question in Lok Sabha recently, Railway Minister Piyush Goyal had said that the national transporter has been taking various steps to increase its freight business. Some of the key measures it took comprise the adoption of rake load concept, containerisation, designing new wagons with higher payload, own your wagon scheme, private freight terminal policy, freight incentive schemes and long term contract policy.

CEMENT * Higher rainfall during in October 2019 has led to a reduction in the power demand across the agriculture sector and in the cooling requirement of the domestic and commercial sectors according to the Ministry of Power. * Real-time power market is expected to kick in from April 1 next year, following which consumers including discoms or captive users can buy power at exchanges just one hour before delivery. * Utilisation levels of many thermal power plants would fall to 35-40% if the country sets up 130 gigawatt of renewable energy capacity by 2022, a latest report by KPMG India has pointed out. Instead of their current role of “being the bulwark of supply”, coal-based power plants’ “new role will be akin to storage, having energy content available on tap for balancing grid variability when the need arises”, the report, titled ‘The electric future and its implications for India’, said.

* Due to the General Elections, economic slowdown, labour shortage and the advent of monsoon- the domestic cement demand hardly got a chance to bounce back this year. Cement prices also dropped during June-October in most markets. The combined effect of all this is that cement demand growth would taper to around 4 per cent in FY20 from 13.3 per cent in the previous fiscal.

STEEL * According to the Steel Authority of India, the sector will achieve the target of 300 million tonne production by 2030, if certain impediments on raw materials, finance and logistics are addressed. The country requires about Rs 13 lakh crore and 600 million tonne of raw material to meet the target. * The Ministry of Steel has proposed setting up integrated steel hubs similar to the ones in Korea, China and Germany. The hubs would support the growth of the steel sector.

POWER

CCAI Monthly Newsletter November 2019

| 33

MONTHLY SUMMARY OF IMPORTED COAL & PETCOKE Coal Price Index COAL

(kcal/kg)

Monthly Price - FOB

Monthly Price - FOB

Monthly Change (USD)

South Africa

6000 NAR

USD 73.49

INR 5261

8.56

South Africa

5500 NAR

USD 58.08

INR 4158

6.62

Australia

5500 NAR

USD 51.67

INR 3698

-0.37

Indonesia

5000 GAR

USD 48.88

INR 3499

0.31

Indonesia

4200 GAR

USD 33.77

INR 2417

-0.52

USA

6900 NAR

USD 50.71

INR 3630

2.62

PET COKE

Sulphur

Price

India-RIL(Ex-Ref.)

-5%

INR 6172

Saudi Arabia (CIF)

+ 8.5%

INR 4563 ($64)

USA (CIF)

- 6.5%

INR 4742 ($66)

Exchange Rate

Change (Monthly)

USD/INR 71.58

0.59

Coking Coal Price: Premium Low Vol

FOB Aus CFR China 134.38

147.19

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

121.67

133.88

78.42

88.11

84.11

257.25

South Africa: * South African coal prices have surged to eightmonth highs amid a lack of prompt-loading material, with index levels reaching the highest in 10 months amid “aggressive bidding” by one or several large players in the market. The Global Coal Richards Bay index was assessed last at USD 91.25/t, a premium of nearly USD 40/t above the Atlantic-basin benchmark Des ARA index and more than USD 20/t over the Asia-Pacific’s Newcastle index.

34 | CCAI Monthly Newsletter November 2019

FOB N China 263.88

Australian Coal News:

* Regional Australians, including those in coal mining regions, could be the biggest beneficiaries of Australia's transition to renewable energy generation. According to one of the country's leading economists Professor Ross Garnaut says the cost of taking action to address climate change has dropped dramatically in the decade since, leaving Australia well positioned to capitalise on the rapid transition to a zero emissions future and become a global energy superpower.

Indonesian Coal News:

*Indonesia’s energy minister Arifin Tasrif said his ministry plans to maintain a price cap on coal being sold to state electricity utility, PT Perusahaan Listrik Negara (PLN) next year. The government capped the price of coal sold to PLN at $70 per tonne from early 2018 after the utility was told not to raise electricity tariffs for certain customers.

US Coal News:

*The US Energy Information Administration said that it expected the US to produce 697.9 million st of coal in 2019, raising its estimate from a month ago by 3.6%. 2019 production would be 7.4% lower than the 753.7 million st produced in 2018, while 2020 production is estimated at 607.1 million st, the EIA said in its November Short-Term Energy Outlook. The 697.9 million st expected in 2019 would be the lowest production since 670.16 million st was produced in 1978. *Coal, long the king of America's electric grid, will soon get toppled by renewable energy. Solar and wind power are growing so rapidly that for the first time ever, the United States will likely get more power in 2021 from renewable energy than from coal, according to projections from the Institute for Energy Economic and Financial Analysis.

Pet Coke News: * The competitive global market of Petcoke currently witnesses the presence of several major vendors, contributing toward the market growth. However, the market is observing an influx of local vendors. The vendors can consider targeting key regions North America, and Europe to gather maximum customer attention. Countries such as China, India, and Japan among others are expected to display significant growth prospects in the future due to high economic growth forecasts along with huge population statistics. * Sluggish economic growth in India coupled with air pollution in its capital city was casting a dark cloud over fresh petcoke trades, market sources said. No trades for imported petcoke were heard this week. A north Indiabased trader bemoaned poor Indian demand for both seaborne and domestic petcoke and said delivered prices of US petcoke to India could hit $60/mt CFR India West.

Shipping Update: * Chinese buyers of seaborne thermal coal have been cancelling deals or trying to defer delivery cargoes to the end of December amid ongoing curbs on imported material, market sources said. An international trader said a Chinese buyer walked away from a deal when the cargo was loading last week. As such, the trader had to resell the cargo, incurring a loss of about $1.75-$2.00/mt.

CCAI Monthly Newsletter November 2019

| 35

36 | CCAI Monthly Newsletter November 2019

57.46

75.56

Source CEA

74.51

51.62

14

13

NOV-2019

1330000.00

6218.00

ACTUAL*

NUCLEAR

HYDRO BHUTAN IMP TOTAL

44720.00

136932.00

PROGRAM

281514.14

THERMAL

Category

TOTAL

0.00

HYDRO

BHUTAN IMP

6780.00

45399.22

NUCLEAR

1142130.00

2

1

229334.92

Target Apr 2019 to Mar 2020

Monitored Capacity (MW)

THERMAL

Category

SUMMARY- ALL INDIA

93540.75

345.26

10127.3

3637.3

79430.89

4

ACTUAL*

66.15

60.53

15

ACTUAL SAME MONTH 2018-19

99776.95

119.83

8147.42

3229.28

88280.42

5

288.12 93.75

90.2

73.24

59.62

16

PROGRAM

80.54

56.01

17

ACTUAL*

124.3

112.64

89.98

7

% OF LAST YEAR (4/5)

63.94

60.20

18

ACTUAL SAME PERIOD 2018-19

ACTUAL*

5374.66

120757.79

31976.19

693400.59

9

PERIOD : NOVEMBER, 2019

849091.3

4289.97

103939.69

25385.32

715476.32

10

ACTUAL SAME PERIOD 2018-19

94.67

107.24

112.8

111.61

91.39

11

100.28

125.28

116.18

125.96

96.91

12

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

APRIL 2019 -NOV 2019

899473.00 851509.23

5012.00

107059.00

28651.00

758751.00

8

PROGRAM

GENERATION (GWH)

63.23

122.87

100.09

87.02

6

% OF PROGRAM (4/3)

APRIL 2019 - NOV 2019

PLANT LOAD FACTOR (%)

103703.00

546.00

8242.00

3634.00

91281.00

3

PROGRAM

ACTUAL SAME MONTH 2018-19

NOV-2019

AN OVERVIEW

ENERGY GENERATION REPORT

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

NOV'19

APR'19 - NOV'19

ACTUAL ACTUAL THIS SAME % YEAR PERIOD GROWTH LAST YEAR

ACTUAL THIS YEAR

ACTUAL SAME PERIOD LAST YEAR

% GROWTH

ECL

4.34

4.12

5.4

28.41

28.34

0.2

BCCL

2.47

2.14

15.3

15.93

18.92

-15.8

CCL

5.82

6.39

-8.9

32.78

34.95

-6.2

NCL

9.6

8.6

11.7

69.93

65.63

6.6

WCL

5.44

5.17

5.1

27.06

26.55

1.9

SECL

11.64

13.2

-11.8

81.24

98.23

-17.3

MCL

10.69

12.37

-13.5

74.86

85.33

-12.3

NEC

0.03

0.08

-63

0.17

0.35

-50

CIL

50.02

52.06

-3.9

330.38

358.3

-7.8

OFFTAKE (Figs in Mill Te) SUB CO.

NOV'19

APR'19 - NOV'19

ACTUAL ACTUAL THIS SAME % YEAR PERIOD GROWTH LAST YEAR

ACTUAL THIS YEAR

ACTUAL SAME PERIOD LAST YEAR

% GROWTH

ECL

4.21

4.06

3.9

29.94

30.27

-1.1

BCCL

2.35

2.5

-6.3

18.14

22.06

-17.8

CCL

5.87

5.95

-1.3

43.34

43.21

0.3

NCL

9.52

8.51

11.8

70.13

66.64

5.2

WCL

4.37

4.76

-8.2

31.81

34.72

-8.4

SECL

11.02

13.46

-18.1

88.13

102.49

-14

MCL

10.01

11.96

-16.3

81.88

92.28

-11.3

NEC

0.03

0.07

-56.5

0.26

0.36

-28.8

CIL

47.37

51.26

-7.6

363.63

392.02

-7.2

CCAI Monthly Newsletter November 2019

| 37

Note

38 | CCAI Monthly Newsletter November 2019

REGISTERED

40 | CCAI Monthly Newsletter October 2019