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Given India's dependence on coal for 70% of the power sector's need, the 50% non-fossil fuel sourcing by 2030 itself will be quite challenging and coal will continue to feed the growing energy need of India for the next five decades, according to industry experts. Coal will continue to feed the growing energy need of India in next five decades and only going to peak in the 2040s- hence we need to continue investment in coal mines and infrastructure going forward, else we will face fuel side challenges like in October," Debasis Mishra, partner at Deloitte Touche Tohmatsu in India said. India’s thermal coal capacities are increasing from current 210 GW to 267 GW projected by CEA by 2030. Also there will be retirement of old capacities. Therefore, while coal share may go down but it terms of quantity and in terms of capacity it will perhaps go up from the current levels. Imported energy may be the first casualty compared to domestic coal. "However, the fourth
commitment related to reducing energy intensity of the economy so sharply, will pose a challenge for steel, aluminium and cement sectors. Coal's demise is not a foregone conclusion, especially in the power sector. What happens to coal will be a function of India's growth, overall energy demand in India, Niladri Bhattacharjee, Partner, Metals & Mining said. CIL despatches grow; coal stocks rise
Coal India Ltd (CIL) despatched a total of 364.4 million tonnes (MTs) of coal during the first seven months of the ongoing fiscal, the highest ever for this period so far, posting 19% growth over corresponding period last year, a senior company official said. The increase in volume terms is 58.6 MTs compared to 305.8 MTs of same period last fiscal. Overall coal supplies for October’21 reached 56.7 MTs with nearly 12% jump against October of last year when the despatch was 50.7 MTs. During the last week of October, the average per day stock accumulation at thermal power plants has been over 3 Lakhs tonnes touching almost 4 lakh tonnes on four days. Against coal consumption of around 1.8 MTs per day, by the power sector, the supply from CIL and other sources has been around 2.2 MTs during the last week of October. On October 28, CIL’s despatch to power plants peaked to 1.8 MTs the highest ever recorded for a single day since the inception of the company. CIL expects to further boost up the stocks to 12 MTs by Diwali. Coal Minister announced reimbursement of transaction advisor fee for mineral auctions
Union Coal Minister Shri Pralhad Joshi addressed the 5th national conclave on mines and minerals on November 23, 2021. At National Conclave he announced reimbursement of transaction advisor fee for mineral auctions. 100% transaction advisor fee to be reimbursed in case of successful auctioning 50% fee to be reimbursed in case of unsuccessful auctioning He further handed over 52 mineral blocks to various State Govts in the 5th National Conclave On Mines And Minerals today. These G4level blocks have been identified by the Geological Survey of India and can be put up for auction by States. These mineral blocks are located across 15 States, comprising several types of mineral deposits. Coal mines auction: Govt devises plans to seek interests, participation of private sector
In view of acute requirement of dry-fuel in downstream sectors, the government has laid down a plan to auction coal blocks which will also be a major boost for increasing the revenue streams for the mine bearing states. The development assumes significance in the wake of the Ministry of Coal launching the third round of commercial coal mining for 88 coal mines last month. The coal ministry is planning to organise road shows in different parts of the country to create sensitisation on the amendments made in Acts and Rules and generate private sector interest and participation. These road shows will be organised in Ranchi, Hyderabad and Ahmedabad, according to a notice by the coal ministry. In this regard, the Ministry of Coal will appoint a Programme Management Partner to organise and manage this event successfully. The country has an estimated 350 billion tonnes of coal deposits, which is third largest in the world. However, 25 per cent of coal demand is still catered through imports. Coal gasification: Ministry proposes tax sops for syngas tech; 15% methanol blending with petrol
A blueprint for the ‘National Coal Gasification Mission’ prepared by the Union coal ministry has proposed 15% methanol-blending target with petrol to encourage investments in the
sector. It also proposes massive tax waivers to incentivise coal gasification, which can lead to eco-friendly alternate utility of the fuel abundantly available in the country. Prime Minister Narendra Modi had said in June 2020 that Rs 20,000 crore will be invested in coal gasification projects by 2030 to utilise 100 million tonne of coal. Most of India’s known coal deposits are nonrecoverable. Underground coal gasification could help extract those plentiful reserves that are deep, scattered and covered by forests. Coal can be gasified to turn it into a cleaner syngas or synthesis gas—a mixture of hydrogen and carbon monoxide — which constitutes the basic building block of the chemical industry and can be converted into a wide range of downstream products such as methanol and olefins of which India is at present a net importer. The syngas technology allows conversion of non-mineable coal/lignite into combustible gases through in situ gasification of the material. The mission document, reviewed by FE, pointed out that if levies such as GST compensation cess and additional duties on coal are removed, the tentative reduction on aggregate price of methanol may be in the range of Rs 1,450-1,650 per MT "Coal India Aims 40,000-Rs 50,000 Crore Capex In Next 4-5 Years": Chairman
State-run Coal India has recently said that the company is aiming at investing 40,000-50,000 crore as capital expenditure in the next 4-5 years. The 17,000-crore capital expenditure for the current fiscal is "on track", said Coal India's chairman Pramod Agrawal, according to news agency PTI. He also highlighted that the price revision is "inevitable" and may happen soon. "We have spent 7,000 crore capex so far and our 17,000-crore target for the current fiscal is on track. We will invest around 40,000-50,000 crore in the next 4-5 years. Most of the incremental capex will go into coal production and evacuation'', he said. On the mismatch between EBITDA (earnings before interest, taxes, depreciation, and amortisation) and the increased capex of the miner, the chairman said that the mining industry is not like any manufacturing entity in which an increase in capital expenses will translate into higher EBITDA
The government said state-owned Coal India Ltd (CIL) is quietly engaged in further consolidating its sustainable development goals. In many of the backward and remote hamlets of the country, CIL and its subsidiaries are bringing about tangible improvements in basic amenities and the living standards of the villagers, the coal ministry said in a statement. Eastern Coalfields Ltd (ECL), one of the subsidiaries of CIL, is further strengthening the hands of the PSU to provide solar energy, other environmental friendly amenities and quality education facility in the remote villages of Purulia district of West Bengal. CIL, being aware of its role in sustainable development in coal mining, decided to take up the challenge in converting 38 villages of Neturia Block into a model, it added. Joshi asks CIL to make efforts to ensure 18 days stock with power plants by Nov-end
Union minister Pralhad Joshi asked stateowned Coal India Ltd and its subsidiaries to make all out efforts to ensure at least 18 days of coal stock with thermal power plants by the end of the month. He directed the CMDs of coal PSUs to formulate revised targets and detailed strategy to attain this goal. The minister pointed out that international coal prices have increased more than three times recently which resulted in 38 per cent decrease in coal imports to India. At the same time, electricity demand has gone up by more than 24 per cent indicative of robust economic growth.
CIL had stepped up the fuel supply to meet the increased demand of the power sector and arrest shortages at thermal power plants caused due to the rising cost of the imported coal. As per a report of the Central Electricity Authority (CEA), the coal stock with power plants stood at 9.03 million tonnes as of October 26. Coal India's price hike plan likely to be delayed
Coal India's plan to raise prices, which has been pending for some time, is likely to be delayed further as the mining major has failed to secure the nod of key stakeholders amid an outstanding of Rs 24,000-25,000 crore pushing the company in a tough situation, a source close to the development said. The agenda of price hike is unlikely to be placed before the upcoming board meeting on November 12 as the board has not yet received the goahead from important stakeholders in the wake of the chaos of coal shortage since last month, though the global price of coal had risen significantly. Unrestricted supply of the dry fuel amid crisis in power plants has resulted in a further jump in dues that has already reached around Rs 24,000-25,000 crore. Coal dispatch to the power sector has increased by 27.13 percent to 59.73 million tonnes in October, owing to a spurt in power demand amid an unprecedented rise in import prices. The coal major was attempting to reach 2 million tonne per day production but till November 6 the average production was 1.6 million tonne. Coal India, other production units set to ramp up output as imports decline
Coal India and other coal producing units are all set up to ramp up domestic production as the country has reduced its dependence on imports for non-coking coal. The Coal Ministry said in a statement that although coking coal is nonsubstitutable, India has substantially reduced the imports of various grades non-coking coal during the current financial year. The country has reduced imports of high gross calorific value (GCV) thermal coal meant for industrial purposes and low GCV coal for power generation, the ministry added. Coal Ministry said it has not taken financial year 2020-21 for comparison purpose due to industrial production getting severely affected during this year because of Covid-19 related restrictions where the decline observed is 21 per cent. The reduction of imports of low GCV of noncoking coal, which is mainly used in power sector, is even more significant, the ministry stated. During FY 2021-22, up to August 2021, the imports of such grades of coal have decreased by about 47 per cent to 15.24 MT from 28.69 MT during the same period of FY 2019-20, it added.
Coal India deploys additional third party samplers to lessen grade slippage
Even as quality issues have started cropping up with Coal India (CIL) enhancing supplies to the power sector, CIL says it has been able to achieve improved grade conformity even after the monsoons when there are increased chances of grade slippages. As per CIL, till August this year the grade conformity was 63%, up from 60% during the same month last year. But a section of power engineers are of the view that power plants’ present average 7 days stock position with around 13.4 million tonne have a lot of basalt and soil mixed in it. Plants mainly linked with the ECL are facing the problem, though most of the mines in other CIL subsidiaries are basalt free. The PSU miner has engaged two more globally reputed third party sampling and testing agencies including COTECNA Inspection India and SGS India to ensure lesser grade slippage. This engagement has been done in addition to the existing agencies namely CSIR-CIMFR and Quality Council of India. CIL ascertained the quality of supplies during the last fiscal, sampling and analysing 487 MT compared to 448 MTs in FY20. “Sampling to production was higher in FY21 and is likely to be higher at the end of the current fiscal, though
total production this fiscal is expected to surpass the FY20 level at 602 MTs,” the CIL executive said Captive coal output rises 35% in H1
Coal production from captive mines have recorded an impressive growth rate of 34.8% year-on-year in the first half of the current fiscal year, with these blocks producing 33.2 MT of the key fuel. Though captive coal still constitutes only 10.5% of the total domestic coal production, recent steps by the government such as allowing sale of 50% captive coal in the open market will likely encourage these miners to ramp up production further. Captive coal production has seen a steady rise since the nadir hit in FY16 due to the Supreme Court’s cancelation of 214 blocks in 2014, following an adverse CAG report that highlighted arbitrariness in allocation. In April-September this fiscal, the coal production by captive mines maintained the accelerated pace gathered in recent years, while the country’s overall coal output (read production by Coal India and its subsidiaries) declined. Captive coal mines are increasing output at a time when scarcity of coal has led to electricity supply shortages across several states. The government claimed that the move to allow sale of 50% captive coal in the open market is likely to benefit over 100 captive coal and lignite blocks with over 500 MT per annum peak rated capacity. Singareni Collieries Company Limited records 68% growth in coal transport
The Singareni Collieries Company Limited (SCCL) has revealed that the company has achieved a record 68% growth in coal transport and 60% growth in coal production in the last seven months ending October in this financial year when compared with last year ensuring that there is no shortage of coal supply. that last year in the first seven months 220 lakh tonnes of coal was produced whereas this year in the first seven months 352 lakh tonnes of coal was produced with a growth of 60%, SCCL noted. In same period last year 156 million cubic meters of Over Burden (OB) was removed whereas in the same period this year in the first seven months 201 million cubic meters of OB was removed with a growth of 28%. Target has been set to achieve 330 lakh tonnes of coal production and transport in the remaining five months.
STEEL
State panel begins groundwork for Deocha-Pachami coal project
The state-appointed apex committee, formed a week ago to supervise pre-mining activities and initiate confidence-building measures among residents, has begun talking to stakeholders for acquisition of land for the Deocha-Pachami coal block in Birbhum. Compensation will soon be announced for 3,012 families living in 24 villages and the package promises to be one of the most lucrative for any coal block land acquisition so far The Deocha-Pachami coal block, which has an estimated reserve of 2.1 billion tonnes, was allocated to Bengal by the Centre in June 2018. Spread over 9.7km, the block in south-western Birbhum is estimated to bring an investment of Rs 12,000 crore. The government has also proposed a feedback system to thrash out an action plan for development of infrastructure through social welfare activities. “Based on what people need, projects on healthcare, education, drinking water and sanitation and community infrastructure will be started,” said an official close to the development. The committee will also liaison with the block and district administrations. Cheaper Coking Coal May Not Bring Cheer For Indian Steelmakers Just Yet
Prices of a key raw material in steelmaking have declined but that may not lift margin for Indian mills. Australian coking coal fell $50 a tonne over the preceding month to $383 in November, according to data released by SteelMint. That, it said, came as demand for the metallurgical coal and steel dropped in the world’s top consumer China, and production increased. Input costs for Indian steel producers surged as a shortage of coal in the nation forced them to compete with other industrial consumers for supply. Domestic mills are paying more than four times the normal cost. However, the companies’ margin may not benefit much. Any reduction in variable cost (coking coal) will be directly passed on to the consumers in the form of price cuts within a period of 45 days or two months. Coking coal prices have cooled to $360 a tonne from the peak of $430-plus levels—savings of $70 a tonne. But steelmakers would pass this benefit mostly in the fourth quarter. margin would remain steady, he said, adding the impact of a price rise would reflect only in the fourth quarter of the ongoing financial year. A fall in global steel prices may impact domestic rates, dragging down realisation, or the average selling price per unit of the product. That would offset any benefit from reducing cost pressures. Indian hot-rolled coil export offers fell about $25 a tonne, weighing on buying sentiments, SteelMint said in a report.. Steel players increase prices by Rs 1,500-3,500 a tonne from Nov 1
Indian steel companies have raised prices across different grades of the alloy by Rs 1,5003,500 a tonne from November 1. Following the hike, which comes on the back of hardening raw material costs, especially coking coal which all domestic companies mostly import, hot rolled (HR) prices are in the range of Rs 70,000 a tonne. The increase had a rub-off effect on steel stocks which outperformed the benchmark indices by a wide margin. Sources confirmed that JSW Steel and Tata Steel, the country’s top two private steel makers, had raised prices for November both for the flat category, which goes into consumer durables and cars, and the long segment, which finds uses in the construction sector. The latest round of hike comes after a brief period of lull during July-September. Steelmakers had intermittently raised prices in October both in the long (rebar) and flat steel (hot rolled and cold rolled coils) categories. However, despite the spate of hikes, Indian prices remain at a discount vis-a-vis United States and Europe but on a par with Asia, indicating domestic manufacturers will still be competitive vis-a-vis imports
CEMENT
Cement price will rise as cost of coal is up, says India Cements
The India Cements Ltd said price of cement would increase as every cement factory faces "pressure on cost" and the industry was suffering from the huge impact of rise in coal price. "The rise in cost (of coal) has taken place the price of coal we were getting was about USD 70-80 per tonne and went up to USD 105; and from there it went to USD 135. Now, it is USD 250 per tonne," said vice-chairman and managing director of the cement-making company N Srinivasan. Elaborating on this, he said the company was prudent as it has coal of about four lakh tonne which can produce 27 lakh tonne of cement clinkers. "We have four months of stock, but beyond that we are looking at the higher costs of coal. This will apply to everybody (every cement-maker) not only us (The India Cements)," Srinivasan, also managing director of the company, told reporters. Noting that the rise in cost of coal affects cost of power generation and cost of fuel at the kilns, he said
