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Vol. XLIX No. 07 Published on : 28.10.2020

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CCAI Monthly Newsletter December 2019

From the Editor’s Desk Following months of inactivi ty and gloom caused by the deadly pandemic outbreak, India’s industrial sect or is slowly fighting its way bac k to adjust with the new normal in the post-C OVID world. Though the presen t scen ario looks far from rosy, gradual relaxation in lockdown norms across the cou ntr y, reopening of manufacturing units and sligh t rise in demand gives hope of a new beginning in the near future. Despite India being the world’s second highest producer and consumer of coal, the country’s fossil fuel sector also did not remain unaffected by the pandemic. According to India Ratings, demand for domestic coal in India is likely to be subdued in the second quarter of FY 2020-21 due to low er demand from end-user industries and high inventory-level at power stat ions . Fur ther, both thermal and coking coal imp orts at India's 12 major por ts dro pped 31 per cent to 36.7 million tonnes (MT) in April-July 2020 ove r the same period a year ago. In order to overcome the ong oing stalemate, the governmen t’s move to introduce commercial coal mining wit h liberalised bidding terms and the associated reforms announced by the Ministry to attract foreign play ers, non-mining entities and large miners are expected to play a major role in shaping the coal sector in coming years.

In order to ease the coal min ing process for the upcoming auctions, the Centre is mulling to allow land acquisition under the Coal Bearing Areas Act, 1957 which would entail the Centre acquiri ng land and then giving it on lease to the miners. The Ministry of Coal is also in conversation with the Ministr y of Environment, Forest and Climate Change (Mo EFCC) to bring down the tim e taken for getting Forest Clearances for coal min ing projects. Out of the 41 bloc ks to be offered for auction, 21 feature in the original No-Go list of the Cen tre for Science & Environment for having gross forest cover more than 30 per cent. Meanwhile, overcoming the ongoing downturn, steel com panies in India is set to increase prices from Septem ber due to rising costs and high er international prices. According to analysts, the increase could be in the ran ge of Rs 2,0003,000 a tonne as the demand was picking up in the domesti c market across sectors while the export marke t is also going steady. The country’s cement sector that was severely hit by the pandemic is expected to surge in rural areas due to higher agricultural income, a better-thanexpected monsoon and pick up in the government’s affordable hou sing initiative. According to rating agency Cris il data, V-shaped recovery tren d in the cement sector can be witnessed from a sharp contraction of 85% seen in April to an estimated 7-10% growth by the four th quarter.

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Content Vol. XLIX No. 07 October 2020

Official Organ of the Coal Consumers’ Association of India. Disseminates News and Views on Coal and all other sources of Energy. 4, India Exchange Place - 7th Floor Kolkata - 700 001 Landline : +91 33 22304488 / 22621516 E-mail : sec.ccai@gmail.com Website : www.ccai.co.in

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26 In Parliament 30 Monthly Summary Of

Imported Coal &Petcoke

32 Overall Domestic Coal Scenario 33

Production And Offtake Performance Of Cil And Subsidiary Companies

34 Energy Generation Report CCAI Monthly Newsletter October 2020

CONSUMERSâ&#x20AC;&#x2122; PAGE Submissions made by both Power and NRS consumers:

move will ensure that 33% of the trucks are sampled, which will make the results of coal quality analysis at loading end and unloading end more consistent.

1. Request to QCI to modify the procedure of sample collection under 3rd Party Sampling under Road Mode Linkage Auction FSAs:

2. Request for enabling infrastructure Facilities for Third Party Sampling & Analysis at Loading End:

Disparity between the 3rd Party coal quality analysis reportat the loading end vis-Ă -vis the unloading end/ plant end has been one of the major issues faced by the consumers under Road Mode Linkage Auction FSAs during the 3rd party sampling. This disparity mainly occurs due to the procedure of sample collection under 3rd Party Sampling where samples are taken from every 8th truck which means only 12% of the trucks are being sampled. In order to eradicate this disparity it has been requested to modify the process of sample collection so that those samples are taken from every 3rd truck. This

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Non-availability of the required infrastructure facilities at loading end for carrying out 3rd Party Sampling and Analysis such as lighting facility, manual sample preparation due to non-availability of machines, nonavailability of separate rooms for keeping 3rd party samples, no CCTV camera in the Referee labs for constant monitoring, not allowing consumers to witness the sampling and analysis process etc hampers the real purpose of 3rd Party sampling process. Request has been made to CIL and Subsidiaries to make necessary resources available at the loading end for conducting the 3rd Party Sampling process in a more effective and transparent manner.

Submissions made by Power Sector Consumers: 3. Significant variation between billed grades and received grades of coal in certain mines of ECL: The issue of grade slippage from various mines of ECL has been longstanding and rampant which has been impacting the operations of both Power and NRS consumers procuring coal from the Subsidiary. In spite of promise made by ECL authorities regarding significant improvement in the quality of coal supplied from various ECL sidings from September 2020 onwards, it has been noticed that quality of coal received by Power sector consumers from Salanpur and Bankola sidings of ECL has further deteriorated in September’20 compared to the previous five months of FY 2020-21. Request has been made to CIL and ECL to immediately minimise the instances of grade slippage and ensure supply of declared grades of coal from ECL.

4. Issue of grade slippage from Talcher sidings of MCL: Power sector consumers procuring coal from MCL are facing significant operational difficulties due torepeated instances of grade variation in coal procured from MCL’s Talcher SPUR- I, II, IV, VI, VII, VIIIsidings during June-August 2020 period. Variations in the tune of one to three grades are consistentlyoccurring in the rakes loaded from these sidings. Request has been madeto the concerned coal company along with CIL and MoC by the Power sector totake up necessary measures in order to ensure supply of declared grade of coal as consistent gradeslippage hampers the generation and increases the per unit energy cost.

Submissions made by NRS Consumers:

due to non-availability of coal at the said colliery. Hence, they were allowed to lift the FSA quantity from a tertiary source of the Subsidiary-Balarampur UG. However, instead of receiving G-13 (250 mm) ROM coal which was mentioned in the FSA, they have been receiving G-16 grade of coal from the siding. Supply of such lower grade coal is impacting the operations at the plant and also commercially unviable. Request has been made to SECL to ensure that the consumers may receive the actual grade of coal from both primary and tertiary sources of the Subsidiary.

Issues faced exclusively by NRS consumers: 6. Request for refund of security deposit and advance amount from SECL to NRS consumers: Certain NRS consumers have long-pending refund worth more than crores of rupees in form of security deposit and advance amount layingwith SECL since last year (2019) following the termination of their respective FSAs. The situation is causing further financial crisis to the affected NRS consumers and even leading some of them towards bankruptcy as they are already going an economic downturn under the COVID situation. Request has been made to SECL to immediately process the refund of security deposit and advance amount alongwith the interest to the respective consumers.

7. Pending quality claims for Nonpower sector consumers from ECL: i. Several Industries procuring coal from ECL have large amounts of compensation pending since September 2018 in form of quality claims as the Referee analysis result of received quantity revealed that the supplied grade of coal was often significantly lower than the billed grade.

5. Submission by NRS consumers regarding significant grade slippage from tertiary sources of SECL:

ii. In some cases, third party analysis results showing grade slippage, were challenged by ECL after the stipulated timeframe, which subsequently got rejected by QCI (3 rd party agency) as per the norms of tripartite agreement. However, ECL has not resolved this issueagainst any claim of those amounts so far.

NRS consumers having FSAs with SECL’s Mahan II OCP were not able to procure the allotted quantity

Submissions and deliberations are continuing for taking upthese pending claims into processing. CCAI Monthly Newsletter October 2020

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POWER PM Modi underscores 7 key pillars of India’s energy strategy Prime Minister Narendra Modi highlighted seven key pillars of India’s energy strategy going forward and stressing upon India's rise as a major consumer of energy globally. “India’s energy plan will have 7 key drivers including accelerating efforts to move towards a gas-based economy, cleaner use of fossil fuels, greater reliance on domestic fuels to drive biofuels, achieving the renewable energy target of 450 gigawatts (GW) by 230, increasing the contribution of electricity to decarbonise mobility, moving into emerging fuels like Hydrogen and digital innovation across all energy systems,” he said. He also mentioned that India has saved around Rs 24,000 crore annually through the installation of 11 million smart LED street lights which have reduced the greenhouse gas emissions by an estimated 4.5 crore or 45 MT of CO2 annually. He said that India is well on track to meet the

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commitments made to the global community on climate and that the nation has the lowest carbon emissions than the rest of the industrialized world but will continue to make efforts to fight climate change.

Power Minister Iterates Plan To Overhaul Regulation, Enforcement Soon India’s power ministry is pushing for an overhaul of electricity regulation and enforcement of contracts in order to stem losses of the staterun distribution companies that have burdened the sector. On solar imports, plans afoot to draw up a list of approved manufacturers for allowing imports. The weak financial condition of distribution companies hurts their ability to pay producers, which in turn affects investments and credit in one of the world’s leading energy consumers. Power Minister R.K. Singh said that the sector has traditionally suffered because state governments put pressure on regulators to not

raise electricity tariffs to reflect prudent costs and they are unable to override this because they are state appointees. Singh said that regulators will be mandated to look at power tariffs every year and will be subject to scrutiny.Separately, the government will also set up a body for enforcement of contracts. Distribution companies often delay payments to producers. Already only about four to five regulators are not looking at examining power tariffs regularly. The southern state of Tamil Nadu has not raised tariffs since 2017, Singh observed. India has 30 states and all of them have their own distribution company.

NITI Aayog announces governing structure of India Energy Modeling Forum NITI Aayog has announced the governing structure of the India Energy Modeling Forum (IEMF) following its constitution in July. The Forum was jointly launched by NITI Aayog and United States Agency for International Development (USAID) under the US–India Strategic Energy Partnership. Part of the Sustainable Growth pillar of the US– India Strategic Energy Partnership (SEP), IEMF aims to engage Indian researchers, knowledge partners, think tanks and national and international government agencies and departments for modeling and long-term energy planning. The governing structure of IEMF will consist of an inter-ministerial and a steering committee. The inter- ministerial committee will be convened by NITI Aayog and headed by its CEO, and comprise senior officials from the ministries of petroleum and natural gas; power; new and renewable energy; coal; environment, forest and climate change; and department of science and technology. This committee will shortlist policy issues to be taken up for study and might form various taskforces depending on the specific studies/ modeling exercises to be carried out. India and the US have a long-standing collaboration on energy. The Sustainable Growth pillar, one of

the four of the US–India SEP, is being chaired by NITI Aayog and USAID.

India to link power grid with Middle East, SEA India is drawing up plans to link its electricity grid with Gulf countries to the west and South East Asian nations on the other side in order to export excess electricity, especially from a raft of renewable energy projects coming up in Gujarat and Rajasthan. The government, as part of the ‘One Sun, One World, One grid’ initiative, wants the Indian Grid to be connected with the Middle East, South Asia, and South East Asian grids to share solar and other renewable energy resources. “Some 40-50 GW solar power projects are in the pipeline in Rajasthan and Gujarat. These can be sold in large markets like Delhi or Maharashtra, or exported to Gulf countries which have different peak hours once a grid connecting them is established,” said Amit Jain, Senior Energy Specialist with the World Bank, which is partnering India in this initiative. Officials from the Ministry of New and Renewable Energy said they would be making an assessment of renewable energy potential of countries in the region and study how they can share power to meet even peak electricity demand.

Fresh identification of PSUs gives momentum to government's selloff plan The government proposes to start afresh the process to firm up the list of companies for strategic sale and disinvestment as changed market dynamics post the Covid-19 outbreak and the need for distinguishing between strategic and non-strategic sectors have completely changed the plan for sell-offs. Sources in the government said that NITI Aayog is spearheading the programme for identifying new set of companies for government's share sale plan and a preliminary meeting has already taken place in this regard during the week. CCAI Monthly Newsletter October 2020

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As per the initial plan, sectors such as power, coal, oil, steel, fertilizers, insurance and banking have been identified as strategic sectors where a complete sell-off of companies will not be allowed and PSU presence to a maximum of four companies may be maintained. The plan will also look at asset stripping and sale of parts of manufacturing and industrial set ups of companies in non-strategic sectors that allow the government to get better valuations. Sources said that Niti Aayog has also asked Central ministries that administer control over various PSUs to suggest names of entities that could be offered for strategic sale. This way the process could be made smoother as non-strategic entities could be pushed for sales route without difficulties.

87 per cent households have access to grid-connected power; some still don't use electricity: Survey A majority of households (87 per cent) in India have access to grid-connect electricity, while the remaining 13 per cent are either using non-grid sources for power or "do not use any electricity at all", according to a survey. The finding is part of the joint survey conducted by government think-tank NITI Aayog and the US-based philanthropic organisation Rockefeller Foundation on 'Electricity Access and Benchmarking of Distribution Utilities.' The study further showed that of all customers using non-grid sources, the majority 62 per cent of them are agricultural customers. Only four per cent of households do not have access to gridbased electricity. The survey was released by Smart Power India (SPI), a subsidiary of Rockefeller Foundation. It was conducted across 10 states with a sample size of over 25,000 respondents consisting of different consumer categories such as households, agriculture, commercial enterprises and institutions both from rural and urban areas. It mainly focused on key areas such as grid

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connectivity, electricity access, customers’ satisfaction, utilities' capacity to delivery and drivers of sustainability for utilities. The survey also showed that a total of 66 per cent of surveyed customers are satisfied with the overall services from their utility. However, there were differences in satisfaction levels between urban customers (75 per cent) and rural customers (63 per cent).

Discoms in India need to improve power quality: Survey Power distribution companies in India have to improve the power quality in the country shows a survey. A joint study by Smart Power India (SPI), NITI Aayog and the Rockefeller Foundation, showed that only 55 per cent customers were satisfied with the quality of their electricity supply. The report said that power quality was reported as the number of voltage fluctuations. Overall, 63 per cent of customers reported more than one voltage fluctuation in a week, and 10 per cent reported more than 10 voltage fluctuations per day in the past one week. Appliance damages in the past one year played an important role for the customers to decide upon the quality of supply of power, it said.

India will be the energy centre of the world: Pradhan India’s energy demand is going to surge once it steps out of the Covid-19 pandemic, according to Daniel Yergin, Vice-Chairman, HISMarkit. Speaking with Petroleum Minister Dharmendra Pradhan during the India Energy Forum, Yergin said that China’s energy demand is back to being on the rise, but India’s demand is still at 2019 levels. He said that India’s energy demand is going to surge significantly once the pandemic is over. The Indian Railways is on track to achieve net zero emissions by 2030, according to Rail Minister Piyush Goyal. Speaking at another session during the India

Energy Forum, Goyal said: “Compared to September 2019, in September 2020, the Indian Railways moved 15 per cent more freight; our exports have gone up by 5 per cent and power consumption is up by 5.5 per cent.” “We have about 65,000 route kilometers in India; we are already 40,000 route kilometers under electrification, and the balance is going on at a fast pace. By December 2023, we will be completely electrified,” said Goyal. “We are very confident that we will be the world’s first large railway that will be 100 per cent electrified. We are already embarked on 1 GW of solar along railway lines, this will be expanded to 3 GW. The land bank of the railways will also be used to set up 20 GW of solar projects to meet requirements,” he added.

Government says clean energy is topmost priority; World Bank’s 5 mantras for India’s green drive amid crisis Petroleum Minister Dharmendra Pradhan said that providing clean and reliable energy supplies to Indians is the topmost priority of the government. Dharmendra Pradhan added that India will emerge as a winner in developing green solutions and the world would admire for the decades ahead. 5 lessons for India’s green recovery during the ongoing crisis: Returning migrants can be encouraged to set up new forest-based enterprises — Given the rapidly growing demand for natural products, returning workers can be encouraged to set up MSMEs that add value to non-timber forest produce (NTFP) using their knowledge of new technologies and urban markets. The move may help in generating jobs and raising local incomes. Thriving forests can benefit agriculture — Increased forest areas can help in controlling soil erosion; improving the quality of soil, water, and

air; preventing landslides; reviving pastures; recharging aquifers; and providing food, fodder, and medicines. Promotion of nature-based tourism — Restoring India’s natural heritage and unique ecosystems can also boost opportunities for naturebased tourism. By creating safer habitats for India’s vast biodiversity, forests can help boost tourism, generating gainful employment for rural residents. Meeting international commitments towards climate change and land degradation — Restoring forests and terrestrial landscapes may help India meet its international commitments towards climate change and land degradation.

India re-elected as president of International Solar Alliance India and France were re-elected as president and co-president of the International Solar Alliance (ISA) for a term of two years at its third assembly, an official statement said. The Third Assembly of the ISA was attended by 34 members’ ministers. As many as 53 member countries and five signatory and prospective member countries participated in the assembly, the ministry of new and renewable energy said. India and France were re-elected as the president and co- president of the ISA for a term of two years at the virtual meeting of the third ISA assembly. The assembly also approved the initiatives of the ISA Secretariat in institutionalising ISA’s engagement with the private and public corporate sector through the Coalition for Sustainable Climate Action (CSCA), it said.

Solar tariffs may reach a new record-low once again: Experts In a greatly encouraging response, over 5000 MW of bids were received for the 1070 MW solar tender issued by the Solar Energy Corporation of India, which analysts said may lead to record low tariffs. SECI is the nodal agency through which the ministry of new and renew-

CCAI Monthly Newsletter October 2020

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able energy conducts wind and solar auctions. In the bid submission that took place, almost all the major developers in the country expressed interest in taking part, sources said. “We expect aggressive bidding and possibly a new tariff low in this auction,” said Vinay Rustagi, managing director of renewable energy consultancy firm, Bridge To India.

"We are proud to be selected to execute this flagship project. It is one of the largest wind projects ever awarded in India and will significantly contribute to the country's renewable aspirations.

India’s JSW Energy plans $1.2bn investment in two wind projects

Experts said that during the early solar auction years (between 2015 and 2017), tenders were heavily oversubscribed in a similar manner. “The past two years were a bit of an exception as many developers exited the market in the face of various execution and financing challenges,” Rustagi said.

Indian power generation company JSW Energy reportedly plans to make a $1.2bn (INR88.6bn) investment in two wind power plants in the state of Karnataka.

GE Renewable Energy to install 121 turbine sets for SB Energy in MP

The first wind facility will use an investment of $531m (INR88.6bn) across a 1,350-acre land area across Ballari and Davangere. This site has 600MW of energy capacity.

GE Renewable Energy said it will install 121 sets of wind turbines for SB Energy in Madhya Pradesh. The project was bagged by SB Energy during the tranche-VI auction of wind projects by Solar Energy Corporation of India (SECI) and will produce green energy for 2.50 lakh households, the company said in a statement.

JSW’s second wind facility will use an investment of $668m (INR49bn) to develop 800MW of capacity on 1,800 acres in Ballari, Dharwad, Gadag, and Davangere.

"It has been selected by SB Energy (Soft Bank Group) to supply, install and commission 121 sets of its 2.7-132 onshore wind turbines, cumulating 327 megawatt (MW), to be installed at Pritam Nagar wind farm in Madhya Pradesh," GE Renewable Energy added.

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According to the Karnataka Commerce and Industries Department, the two wind farms will have a combined capacity of nearly 1.4GW.

Over the last two months, the state government has approved investments of up to $2.9bn (INR216.11bn), according to the department. The investments will form part of the state’s plan to lower reliance on conventional sources to generate power. Last month, JSW Energy’s subsidiary JSW Solar secured contracts for 810MW of blended wind energy project.

CCAI CCAI CCAI Monthly Monthly Monthly Newsletter Newsletter Newsletter September November October 2020 2019

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DOMESTIC Ministry of Coal initiative to introduce State of Art Technology in Coal Exploration

new technology will fasten the growth of exploration in coal blocks which is also in synchronization with Govt. of India's Open Acreage Policy for offering coal blocks to the investors.

The Ministry of Coal takes a major initiative of introducing the implementation of the State of Art Modern Technology, such as 2D/3D Seismic Survey in coal exploration will prove to be a major milestone.

With this intention, CMPDI has awarded work for 2D Seismic Survey in Kartala & Puta-Parogia blocks and 3D Seismic in Taulipali and Rajadahi blocks through outsourcing. These four blocks will cover about 168 sq km in totality with a total coal resource of more than 10 billion tonnes. The total cost of the project is Rs.106 crore.

This initiative of the Ministry of Coal is in line with the vision of the Hon'ble Prime Minister for "Atmnirbhar Bharat" to fulfill the energy requirement of the country. With this intention, CMPDIthe technical arm of Coal India Limited introduces the 2D/3D Seismic Survey in coal exploration under the guidance of the Ministry of Coal. In comparison to the previously used technology of drilling by deploying drill machines which are comparatively more time-consuming, this

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Coal India revisiting SOPs, rule books amid changing times: CMD All standard operating procedures, manuals and rule books of state-owned Coal India are being revisited to make them more effective and conducive to meet the challenges thrown by the

changing times, according to its chairman and managing director Pramod Agrawal. In a message, Agrawal said that in recent times, Coal India (CIL) and its subsidiaries have embarked on transformative paths by embracing several IT initiatives like Intelligent Vehicle Tracking System (IVTS), use of modern technology for coal/overburden measurement, eprocurement and other measures to eliminate the potential vulnerabilities in the process flow. Stating that coal is the prime mover of the national economy and a major contributor to the exchequer and national GDP, he said that CIL is shouldering the responsibility of providing the primary source of energy to the nation at an affordable cost with due regard to the environment and conservation. Coal India accounts for over 80 per cent of domestic coal production. CIL is eyeing one billion tonnes of coal output by 2023-24. .

CIL coal supply to power sector drops 10 per cent in first half of FY2020-21 The supply of coal by state-owned Coal India Ltd (CIL) to the power sector dropped by 10 per cent to 197.89 million tonnes (MT) in the first half of the ongoing fiscal. Coal India had supplied 219.85 MT of coal in the April-September period of the previous fiscal, according to official data. However, the supply of fuel by the coal behemoth to the power sector increased by 22.4 per cent to 35.74 million tonnes (MT) in September compared to 29.20 MT in the corresponding month of previous fiscal. The country's power consumption registered a growth of 11.45 per cent to 55.37 billion units (BU) in the first half of October this year, mainly driven by buoyancy in industrial and commercial activities. The government had imposed nationwide lockdown on March 25 to contain the spread of CO-

VID-19. Power consumption started declining from March onwards due to fewer economic activities in the country. Power consumption on year-on-year basis declined 8.7 per cent in March, 23.2 per cent in April, 14.9 per cent in May, 10.9 per cent in June, 3.7 per cent in July and 1.7 per cent in August.

CIL MCL Tests Robots to Control Fire Dust in Coal Mine Coal India Limited’s subsidiary Mahanadi Coalfields Limited has made a robotic intervention in mining operations to control dust pollution and combat fire. Continuing with a series of innovations for making the mining operations safer, environment-friendly and efficient, MCL successfully tested the remotely-controlled mechanized swivel nozzle, popularly known as Robotic Nozzle, with variable cone mist and straight throw capacity to deal with fire and dust suppression in an effective way. The introduction of “Robotic Nozzle” will be of great help to fire-fighting operations in coal mines besides effective dust suppression using conical mist function. Being a remotely-controlled system to operate from a safe distance, the “robotic nozzle” throws mist with variable cone envelope with a solid angle from 0 to 120 degree with additionally covering 360 degree horizontal pan and 180 degree vertical pitch. Two more such systems will be retrofitted in 28 KL tankers at Basundhara OCP in Sundergarh district and Lingaraj OCP, Talcher in Angul district. .

Coal Ministry launches website for research endeavors in coal sector The website will help in disseminating and promoting the knowledge and research work in the coal sector”, said. CCAI Monthly Newsletter October 2020

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Shri Jain complemented the efforts of CMPDI in developing the website and suggested to put the web links of the efforts made by various esteemed organizations for R&D in coal sector on the website. Ministry of Coal has launched the website to promote Research & Development (R&D) activities of the ministry and attract research institutes for R&D endeavors in coal sector. Shri Anil Jain launched the website (https://scienceandtech.cmpdi.co.in/) during the 56th meeting of Standing Scientific Research Committee of the Ministry. Coal India R&D arm, Central Mines Planning & Design Institute Limited (CMPDI) has designed and developed this website. The website broadly displays the guidelines for implementing coal research projects with different forms so that anybody can submit proposals in requisite manner. It also has lists and outcomes of completed projects and ongoing research projects to have a transparency and avoid repetitive nature of projects. It showcases photos, videos and news clippings related to the coal and lignite sector and different publications are also available on the website.

Thermal, coking coal imports at major ports dip 25 per cent to 55 MT in Apr-Sept: IPA Disruptions caused by the COVID-19 pandemic continued to impact cargo movement in India, with thermal and coking coal imports at 12 major ports falling 25.13 per cent year-on-year to 55.41 million tonnes (MT) in April-September, according to the apex ports' body IPA. Coal volumes at the 12 major ports declined for the sixth straight month in September 2020, as per the Indian Ports Association (IPA). Thermal coal imports dropped 23.24 per cent to 34.52 MT during April-September, while coking coal shipments fell 28.04 per cent to 20.89 MT, IPA said. These ports had handled 44.98 MT of thermal

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coal and 29.03 MT of coking coal in April-September period of the previous financial year. Together, thermal and coking coal handling saw a decline of 25.13 per cent at these ports in the April-September period at 55.41 MT, the IPA, which maintains cargo data handled by these ports, said in its latest report. Shipping Minister Mansukh Mandaviya last month said cargo traffic at 12 major ports declined considerably March onwards, adversely impacted by the COVID-19 pandemic. India has 12 major ports under the control of the central government -- Deendayal (erstwhile Kandla), Mumbai, JNPT, Mormugao, New Mangalore, Cochin, Chennai, Kamarajar (earlier Ennore), V O Chidambarnar, Visakhapatnam, Paradip and Kolkata (including Haldia).

STEEL

SAIL exploring new markets to source coking coal: Chairman Anil Chaudhary State-run steel maker SAIL is exploring new markets for the sourcing of coking coal with a view to reducing dependence on select countries for the raw material, its chairman Anil Kumar Chaudhary said. According to official data, the country imports about 56 million tonne (MT) of coking coal worth around Rs 72,000 crore. Out of this, about 45 MT is imported from Australia alone, and the remaining from South Africa, Canada and the US. "Domestic steelmakers depend heavily on imported coking coal. For SAIL as well metallurgical coal (coking coal) is largely procured through imports apart from some domestic sourcing. We are looking at developing new destinations and vendors for sourcing coking coal from the international market to avoid dependence on limited sources," the SAIL chairman told.

Raw material security holds significance for the steelmaker which plans to more than double its capacity to 50 MTPA by 2030. Chaudhary further said that SAIL is part of a joint venture International Coal Ventures Limited (ICVL) with the aim to acquire mining assets abroad. PSUs like RINL, NMDC, CIL and NTPC are partners in the JV. According to the company data, during 2019-20, requirement of about 1.53 MT coking coal was met from indigenous sources like Coal India Limited and captive sources while the balance 13.70 MT was met through imports.

RAILWAYS

Rail freight revenue up 11% in October 2020 Freight revenue of Indian Railways jumped 11% in the first 13 days of October from a year earlier to 4,124 crore, underscoring renewed economic activity and rising demand after the disruptions from the coronavirus pandemic. Freight volume during the period rose 18% from a year earlier to 43.46 million tonnes (mt), according to data released by the railway ministry. Volumes grew amid increased loading of commodities such as coal, cement, fertilizers, steel and food grains. Cement and coal comprise more than half of freight movement volumes for Indian Railways. During 1-13 October, the railways carried 19.13 mt of coal, rising from 17.20 mt a year ago. A total of 4.36 mt of cement was transported during the period, up from 3.28 mt a year ago. According to the ministry, the average loading of 53,774 wagons per day marked a 16.5% increase from a year ago. Freight traffic in the fiscal first half fell 9% from a year earlier to 533 mt, while earnings declined 17% to 50,185 crore. Freight loading and revenue began to rise gradually from August, after a sharp drop in the fiscal first quarter due to the nationwide lockdown

and turbulence from covid-19. Freight traffic is considered an important macroeconomic indicator, highlighting the broader trend of economic activity. Earlier this month, the government said economic recovery gained momentum in September.

Revival in Steel and Capital Goods Manufacturing will create crosssector economic growth: To achieve a higher and faster economic growth for India, the expansion of manufacturing sector is critical and that in turn requires high quality and low-cost capital goods. This reinforces the need for high quality steel as a crucial raw material. Steel and capital goods have a strong interrelation as the demand in one sector implies the growth in demand for the other, states the latest EY and Indian Steel Association (ISA) joint study, ‘Steel and capital goods: journey map for future growth’. “Capital goods manufacturers and steel companies need to work in tandem to develop customized solutions to manufacture products with domestic steel. The sector is currently dominated by SMEs with limited research and development (R&D) spend. The government and steel manufacturing firms needs to collaborate with these enterprises to set up a nodal body to help move the SME sector up the value chain and manufacture high quality equipment rather than just assembling imported parts,” said Saurabh Bhatnagar, Partner and National Leader, Metals & Mining, EY India India is aiming to double its installed capacity of crude steel in the next 10 years to 300 million tonnes (mt). To achieve these numbers, it requires capital goods worth US$136b. Indigenous production of capital goods for steel projects is likely to bring down steel companies’ capital expenditure, aiding growth and global competitiveness in the steel industry in long term. In addition, there is a strong requirement of advanced high-strength steel (AHSS), electrical and cold-rolled grain-oriented (CRGO) steel in the capital goods sector.

CCAI Monthly Newsletter October 2020

| 17

Indian domestic steel demand showing steady growth

UltraTech Cement’s Q2 profit surges over twofold

As per a report by financial firm Motilal Oswal, higher steel prices and lower coking coal prices ensured Indian primary steel producers’ margins remained strong. In addition, the report noted there were signs of domestic steel demand recovering gradually in the country.

UltraTech Cement’s consolidated net profit more than doubled to Rs 1,234 crore on a yearon-year (y-o-y) basis for the quarter ended September 30, on the back of operational efficiencies and lower finance cost.

The Motilal Oswal report also pointed out that India’s finished steel consumption, too, is recovering gradually. India’s finished steel consumption registered a drop of as much as 85% year over year in April 2020. What’s more, a renewed demand in the largest steel consuming market in China also boosted the bullish steel market in India. Steel trade data by China shows demand remains strong there. China’s net steel exports declined to 10-year lows in September 2020. In addition, China saw a spurt in passenger car sales in September. Because of these developments in China, its fallout was also seen in the Indian markets. Steel prices have also firmed up and have shown consistent increases over the last four months since July. Meanwhile, seeing the greenshoots of steel recovery, India’s Steel Minister Dharmendra Pradhan asked industry body Confederation of Indian Industry (CII) to submit a report on how to enhance per-capita steel consumption in India. The minister made this announcement in a webinar. He said the objective is clear: to increase per-capita steel consumption in the country. Currently, per-capita consumption in India is at 74 kg. Now, Indian steel mills look with hope to the infrastructure sector, especially the construction segment, hoping it starts to recover.

CEMENT

18 | CCAI Monthly Newsletter October 2020

The company’s consolidated net sales rose 7.8% y-o-y. The consolidated Ebitda was aided by higher volumes, competitive cement prices, lower energy costs and stable logistics. The volumes during the quarter surged a good 20% y-o-y to 19.21 million tonne from 16 million tonne in the corresponding quarter last year, led by strong rural demand and government spends on infrastructure. The company reported volume growth in the north, central, Gujarat and East regions, whereas volume contracted in south and Maharashtra. Going forward, UltraTech expects demand for cement to grow on the back of the government’s thrust on infrastructure and the expanding rural economy. The recent policy measures announced by the Reserve Bank of India to support the real estate sector will also aid demand. .

JK Cement’s volume outlook improves but risks remain Latest dealers channel checks by various brokerages show that cement demand has started to improve. In this backdrop, completion of a 4.2mtpa grey cement expansion is timely for JK Cement Ltd. Recently, the company commissioned a 0.7mtpa grey cement grinding capacity in Gujarat and also began commercial dispatches. This expansion takes JK Cement’s total grey cement capacity to 14.67mtpa across Rajasthan, Uttar Pradesh and Gujarat. Cement demand in north India is said to be relatively less impacted by the pandemic. Even so, the north is a crowded market and foraying into other regions will give a fillip to the company’s volumes in the long-term, analysts said.

With Best Compliments From:

Sharda Ma

( )

COAL MERCHANTS, IMPORTERS & HANDLING AGENTS INDIA SOUTH AFRICA INDONESIA SINGAPORE HONG KONG NIGERIA

UGF 1& 2, Kanchenjunga Building, 18 Barakhamba Road, New Delhi-110001, India P : +91 11 23354046/47 F : +91-11-23354047 E : corporate@shardamaa.com W : www.shardamaa.com

GLOBAL Glencore beats production estimates but trims coal guidance Glencore reported stronger third-quarter production but its shares fell after it lowered its 2020 coal production guidance by 5.7% as a strike at the Cerrejon mine in Colombia entered its 60th day on last week. Cerrejon, owned equally by Glencore, BHP Group and Anglo American, has been in negotiations with its largest union and said that "significant advances" had been made. With Glencore's year-to-date coal production down 20% at 83.5 million tonnes, partly owing to the Cerrejon strike, the company downgraded its full-year output guidance to 109 million tonnes from 114 million tonnes.

20 | CCAI Monthly Newsletter October 2020

Copper production was up 17.6% from the previous quarter at 347,000 tonnes, partly because of an end to coronavirus-related mine shutdowns in various countries. "Glencore has bettered our estimates in Q3, a trend we have been generally seeing as companies recover from COVID-19 impacts from Q2," RBC analysts said. Year-to-date copper production was 934,700 tonnes, 8% lower than a year earlier, while cobalt output was down 37% at 21,600 tonnes owing to the shuttering of its Mutanda mine in the Democratic Republic of Congo (DRC). Glencore subsidiary Katanga Mining's Kamoto Copper Company mine in DRC is ramping up to full production and should produce 270,000 tonnes of copper as cathode this year, head of Africa copper Mark Davis said last month.

South Africa’s MC Mining Reports Output Growth In Third Quarter But Lower Coal Sales MC Mining Ltd said coal production at its South African mine increased in the third quarter of 2020 but sales reduced due to operating challenged faced by its larges client. The producer of thermal and coking coal said Uitkomst, which is located on in South Africa, generated 137,284 tonnes of run-of-mine coal in the three months to the end of September compared to 135,675 tonnes a year earlier, 1% improvement. Coal sales were 25% lower than a year earlier, at 57,616 tonnes versus 77,243 tonnes year-on-year. MC Mining explained that Uitkomst produces high-grade metallurgical, thermal and high-ash middlings coal and the colliery's largest customer, experienced operational challenges at its Newcastle furnaces during September, which limited volumes purchased from Uitkomst. "The progressive easing of lockdown measures, allowed the Uitkomst Colliery to return to steady-state production, while international coal prices trended positively during September and October," said Chief Executive Brenda Berlin.

Cleaner coal tech to help South Africa reduce emissions, says Minerals Council Coal is integral to South Africa, economically and socially, and will continue to play a pivotal role for many years to come; therefore, technology and innovation in the industry should be pursued to mitigate carbon emissions as part of the country’s just energy transition journey. This was indicated by speakers during Minerals Council South Africa’s ‘Advancing the just transition: coal technology and innovation’ webinar, held on October 21 − the day on which the council was also observing Global Ethics Day.

Anglo American Coal South Africa CEO and World Coal Association chairperson July Ndlovu emphasised that coal was beneficial to the country, with its multitude of uses, including its importance in the energy mix, the number of jobs it supports directly and indirectly and its role in supporting the economy. He noted that 70% of energy use in the country – for both electricity and liquid fuels – was derived from coal. Moreover, with the country being a signatory of the Paris Agreement and needing to meet its targets, he said this has left a policy gap between the country’s aspirations to reach a low-carbon future, and the reality that coal is very much a part of its social and economic fabric.

Banks Don't Want to Lend to Australia's Coal Miners Any More Financing options open to Australia’s coal operators dwindled further after another of the country’s largest banks said it would end almost all investment in thermal mines and power stations by 2030. The move by Australia and New Zealand Banking Group will add to the increasing difficulty miners face in funding new operations or expanding their existing assets in the nation, the world’s second-biggest exporter of thermal coal. Financial institutions across the globe are bowing to pressure from shareholders and lobby groups to avoid investments in the fuel. Meanwhile, Australia’s mining lobby forecasts a booming market, said that it expects Asian demand to rise 35 per cent over the next decade. As of now, ANZ will not take on any new business customers with thermal coal exposure amounting to more than 10 per cent of total revenue, and will work with existing clients which have over 50 per cent exposure to support their diversification plans, the bank said in its 2020 climate statement published recently. It will also limit financing in power generation to natural gas and renewable projects by 2030. CCAI Monthly Newsletter October 2020

| 21

ANZ is the last of Australiaâ&#x20AC;&#x2122;s big four banks to set a date for exiting direct thermal coal investments, after Westpac Banking and Commonwealth Bank of Australia said they plan to be out by 2030 and National Australia Bank targeted a 2035 exit.

China coking coal import rules to have low impact on Australia: Teck Canadian mining firm Teck Resources does not expect China's recent import restrictions on Australian coal to have a significant effect on global trade flows, with Australian supply likely to be flat for 2020 and any near-term Chinese coal shortage covered by domestic inventories or Mongolian supplies. But the company says it has increased sales to China as a result of recent developments. "We are starting to see a few sales to China above original expectations, and that is coinciding well with our operations ramping up through the quarter," said senior vice-president of marketing and logistics, Real Foley. Two cargoes of Teck's Elkview coking coal for December-loading were heard sold to two separate Chinese steel mills today at $135-137/t cfr China. But the miner still does not expect a marked change to trade flows in the longer term. "The first thing I guess to say is there has been no official announcement on those restrictions," Foley added. Despite a number of Australian cargoes being offered for resale over the past two weeks, pushing down the Argus-assessed Australian premium low-volatile coking coal price to $111.80/t today from $136/t fob Australia at the start of October, it remains unclear whether any diversions or potential cargo swaps with US suppliers will materialise. Teck estimates Chinese coking coal invento-

22 | CCAI Monthly Newsletter October 2020

ries at 45mn-50mn t, equivalent to around four weeks of supply given Chinese mills' consumption rate.

Atlantic coking coal: US prices flat, talks ongoing US coking coal prices held steady today as negotiations between US miners with available fourth quarter cargoes and Chinese buyers are largely still ongoing, while European mills with any spot requirements continue to focus on resale cargoes offered by Australian miners. Despite the $4.50/t spike in the Australian premium low-volatile price to $112/t, the limited liquidity in US coals and uncertainty over the sustainability of the strength in Asia-Pacific today meant US prices stayed flat. But there is expectation among some Atlantic market participants that Chinese mills will return to purchasing The Argus daily fob Hampton Roads assessment for low-volatility coking coal was unchanged at $107/t today, having lost $2/t last week, weighed down by weakness in the Australian low-volatility segment. The high-volatility A price is flat at $115.50/t fob Hampton Roads, as limited spot availability continues to prop prices up. The high-volatility B price is similarly assessed to be steady at $103/t fob Hampton Roads. The limited availability of US coals in the fourth quarter, with most volumes tied up in term contract commitments and miners having cut production earlier this year, will no doubt cap any surge in US-China trade in the near term. "There are only some US spot volumes still remaining for this year, maybe some of these cargoes will go to China but nothing significant," said one Atlantic buyer.

BHP looks to South32 model for coal asset sale UK-Australian resources firm BHP is likely to spin out its thermal and lower-grade coking coal assets into a new firm, similar to the formation of South32 in 2015, as diplomatic tensions be-

tween Australia and China make a trade sale of the assets even more difficult. BHP has been trying to sell its thermal coal operations for several years and added its lower grade coking coal assets in August, setting a two-year deadline for divesting them. By doing so, BHP has created an entity that could support a standalone company by combining the Hunter Valley thermal coal assets and the BHP Mitsui (BMC) Queensland coking coal assets. The company has not taken a trade sale off the table, but would need to sell everything on offer or risk being left with too small a group of assets to create a new firm. It is most likely to instead pursue an in-specie distribution of shares in the new company to existing shareholders in around 18 months' time, according to Glynn Lawcock, analyst at Swiss bank UBS. That echoes the 2015 creation of South32, which BHP span off to hold non-core assets including some metals operations and its Illawarra metallurgical coal business. Fellow UK-Australian firm Rio Tinto sold its thermal and coking coal assets in 2017-18, timing its exit from coal well, Lawcock said. But other producers, including BHP, UK-South African mining firm Anglo American and

Indonesia coal exports at 232.3 mln T by October -minister Indonesia’s chief economic minister Airlangga Hartarto said coal exports this year had reached 232.3 million tonnes by October, or only around 58.8% of the full-year target due to slower demand amid the coronavirus pandemic. In comparison, the government has targeted 395 million tonnes export this year, Airlangga told an virtual industry event. Domestic coal consumption this year is estimated at 141 million tonnes, compared to a target of 155 million tonnes due to lower elec-

tricity demand.

China’s carbon pledge sets path for deep energy changes China's transition to a low-carbon economy could require reducing coal's share of the energy mix to as little as 5pc by mid-century, while leaving little room for oil, according to the most aggressive scenarios drawn up by China's leading environmental institute. But even if that proves too ambitious, president Xi Jinping's pledge to achieve "carbon neutrality" by 2060 looks unachievable without major changes in energy policy. A road map for the energy transition drawn up by Tsinghua's Institute of Climate Change and Sustainable Development, sets out four scenarios. The research was started after Beijing in 2017 set out a low-carbon strategy for 2050 and designed to support China's pledge under the UN Paris climate agreement for its CO2 emissions to peak by 2030. The scenarios cover two periods — from now to 2030, and then until 2050. In the ‘current policy' scenario, China is unable to meet its Paris commitments or its new 2060 pledge (see table). China should follow a moderate but strengthened policy scenario under which carbon emissions peak before 2030, in line with current government policies and China's nationally determined contribution (NDC) target under the Paris deal. That would cut the share of coal in China's primary energy mix to 51pc by 2025 and 46pc by the end of this decade from 57pc now, while oil use declines only marginally, to 17pc.

China’s Coal Ban May Cost Australia $15 Billion a Year China’s coal ban may cost Australia US$15 billion a year.” As many foreign media hyped the news that “China suspends coal imports from Australia”, “Australia News Network” 18th issue published an article by Tariq Brook, a wellknown Australian journalist. According to the article, if China announces the ban, it will mark the “biggest escalation” in the China-Australian CCAI Monthly Newsletter October 2020

| 23

trade conflict. The article said that after China successively announced anti-dumping investigations on Australian beef, imported barley, wine, and hit Australian related industries, in recent weeks, a more worrying sign has appeared-Beijing may be moving to a large scale. Larger and more important industries for the Australian economy are added to its “target list”, namely coal exports. The article stated that although the Australian government has not yet received an official written notice of the ban if the ban comes true, it will mark the “biggest escalation of the conflict so far” as the China-Australian trade relations continue to be tense. Subsequently, Brooke worried that just as Australia was trying to recover from the economic shock brought by the new coronavirus epidemic to the country, through this move, Beijing would “effectively” cause Australia to cost $15 billion per year.

Japanese coal imports fall amid record low gas prices Record low natural gas prices in Japan cut coal's cost advantage over gas for power generation, paring Japanese demand for seaborne coal imports in September. Japanese thermal coal imports fell by 7pc — or 607,000t — on the year to 8.5mn t in September, according to provisional finance ministry data. Coal imports in January-September fell to at least a seven-year low of 78.5mn t, down from 82.5mn t during the same period last year and the 2016-18 average of 83.5mn t. But Japanese LNG imports rose by 1pc on the year in September and were more robust than coal receipts in the third quarter, with import costs softening significantly as oil-linked prices continued to fall. Thermal coal imports fell by 11pc on the year in July-September, while LNG arrivals were down by only 4pc. This contrasted with the first half of 2020, when coal and LNG receipts fell by 2pc and 5pc, respectively.

24 | CCAI Monthly Newsletter October 2020

The average value of Japanese LNG imports dropped to $5.51/mn Btu in September, according to customs data, which was down by 8pc on the month and 42pc on the year. But the value of Japanese coal imports fell less sharply, dropping by 4pc on the month and 29pc on the year to $71.97/t.

South Korea’s move away from coal leaves a Philippine power plant in limbo State-run Korea Electric Power Corporation (KEPCO) will be cleaning up its widely criticized overseas coal energy investments, putting in limbo two projects in the pipeline in the Philippines and South Africa. In a state audit on Oct. 15, KEPCO president Kim Jong-gap said the company will finance two existing projects: the Jawa 9 and 10 plants in Indonesia, which were approved in June; and the Vung Ang 2 plant in Vietnam, which the board approved in early October. “Out of the four [overseas coal power plants] projects, we decided to go ahead with two, and transition the other two to gas or cancel them at this point,” Kim said. “KEPCO and its subsidiaries will not be pursuing new overseas coal power projects.” Sual 2 in Pangasinan province is among KEPCO’s four overseas coal-fired power plant projects that have met international criticism for contradicting the Korean Green New Deal, a government plan to spend fiscal stimulus on renewable and clean energy technologies and prohibit state coal investments, both local and overseas. South Korea has invested about $10 billion in overseas coal power projects since 2008, making it one of the top three public financiers of coal. Global investors including BlackRock, Legal & General Investment Management, APG, and the Church Commissioners for England have warned KEPCO to drop overseas coal power projects, citing financial and environmental concerns.

IN PARLIAMENT GOVT. OF INDIA MINISTRY OF COAL LOK SABHA Q. No. 600. TRANSPORTATION OF COAL 16.09.2020 SSHRI BASANTA KUMAR PANDA: Will the Minister of COAL be pleased to state: (a) whether the coal transportation by road and railways is not performing as expected and as a result of which sufficient quantity of coal is not made available to power plants located far from the mines and if so, the details thereof;

26 | CCAI Monthly Newsletter October 2020

(b) whether transportation of coal by road faces challenges such as environmental and opposition by local people; and (c) if so, the details thereof and the action taken by the Government to deal with this problem and ensure efficient transportation of coal?

ANSWER MINISTER OF PARLIAMENTARY COAL AND MINES

AFFAIRS,

(SHRI PRALHAD JOSHI) (a): There is sufficient coal at the Coal based

Thermal Power Plants of the country. As per Central Electricity Authority (CEA), the coal stock at thermal power plants end increased from 20.41 MT on 10.09.2019 to 35.96 MT on 10.09.2020 which is sufficient for 20 days consumption. Further, Coal stock at Non-Pithead Plants increased from 16.95 MT on 10.09.2019 to 30.11 MT on 10.09.2020 which is sufficient from 22 days coal consumption by the NonPithead power plants. (b): There have been sporadic instances of resistance from local population for movement of coal through road mode due to various issues including environmental concerns. It is mandatory for the coal company to obtain consent under Air (Prevention & Control of Pollution) Act, 1981 from the concerned State Pollution Board. (c): Coal companies have planned to minimize movement of coal through road mode in a phased manner and substitute the same by conveyor belts, ropeways etc. In the first stage of First Mile Connectivity (FMC), 39 big mines, which produce more than 4 Million Tonnes coal per annum, have been identified for creating infrastructure for mechanized movement of coal up to the loading point. Ministry of Power in a meeting on 25.01.2018 has directed for use of captive mode of transport for coal movement like elevated closed belt conveyors for Power plants within 20 kilometers from pithead, Merry-Go-Round (MGR) for plants located within 40 Kms from pithead and the option of MGR based on financial viability for power plants upto 100 Kms.

Q. No. 679. COKING COAL 16.09.2020 SHRI REBATI TRIPURA: SHRI GAUTHAM SIGAMANI PON: SHRI GAJANAN KIRTIKAR: Will the Minister of COAL be pleased to state: (a) the details of coking coal produced in the

country during the last three years and the current year; (b) whether there is any sharp any decline in the coking coal reserves in the country and if so the details thereof and reasons therefor; (c) whether the Government has recently igned MoU to import coking coal and if so, the details thereof; (d) the target set for production of coking coal during the last three years; (e) whether there is a huge difference in the demand and production of coking coal; and (f) if so, the steps taken/proposed to be taken by the Government to fill this gap?

ANSWER MINISTER OF PARLIAMENTARY AFFAIRS, COAL AND MINES (SHRI PRALHAD JOSHI) (a):The details of coking coal production during last three years are given below:201718

201819

201920

2020-20 #

Production of 4 0.15 Coking Coal (MT

42.72

52.84

11.77

Year

# upto July, 2020 (b):No. Sir, There is no decline in coking coal resource in the country. As per GSI Coal Inventory of Coking-Coal resources in India as on 01.04.2019 is about 35.004 billion tonnes as compared to 29.35 billion tonnes as on 01.04.2012 (c):In the presence of Honâ&#x20AC;&#x2122;ble Prime Minister of India and Honâ&#x20AC;&#x2122;ble President of the Russian Federation, a bilateral Memorandum of Understanding (MoU) was executed on 4-Sep-2019 between Coal India Limited and Far East Investment & Export Agency (FEIEA - a Russian Govt. CCAI Monthly Newsletter October 2020

| 27

agency). This relationship is aimed to leverage the bilateral relations to venture into the business of acquisition, development and operation of coking coal assets in the Far East Region of Russia. (d): the target set for production of coal in Coal India Limited (CIL) during the last three years is given below:(in MT) Year

2017-18

2018-19

2019-20

CIL

38.74

32.96

56.62

(e):Though total coking coal demand was 62.54 MT and domestic production 52.84 MT in 201920, most of it had a very high ash content making it redundant in the manufacture of steel which resulted in import of 51.83 MT of coking coal during the year.

(f):Following steps are being taken by CIL for augmenting coking coal production: i) Implementation of Jharia Master Action Plan by Jharia Rehabilitation & Development Authority (JRDA). ii) Sifting of encroachers under the Bharat Coking Coal Limited (BCCL) command area iii) Capacity expansion/modernization of mines of Central Coalfields Limited (CCL) like Karo OC iv) Opening of 4 Coking /Washery grade coal producing mines of CCL in near future as given below: v) Further, in an effort to bring more coal under the coking coal category, coal beyond 35% ash content which had some coking properties were brought into the coking fold by a Government of India notification wherein 2 new grades were added, namely Washery V (ash content 35â&#x20AC;&#x201C; 42%) and Washery VI (ash content 42 â&#x20AC;&#x201C; 49%).

RAJYA SABHA Q. No. 803. LAND ACQUISITION UNDER COAL BEARING AREAS ACT, 1957 19.9.2020 SHRI BINOY VISWAM: Will the Minister of COAL be pleased to state: (a) whether Government is considering a proposal to acquire land under the Coal Bearing Areas Act, 1957 and to subsequently lease it to private coal mining companies; (b) if so, the details thereof; and (c) the details of land already acquired by Government under the CBA Act, 1957 during the last three years, State-wise?

28 | CCAI Monthly Newsletter October 2020

ANSWER MINISTER OF PARLIAMENTARY COAL AND MINES

AFFAIRS,

(SHRI PRALHAD JOSHI) (a) & (b): Yes, Sir. Government is considering to provide for leasing of land and coal mining rights acquired under the Coal Bearing Areas (Acquisition & Development) Act, 1957 by the Central Government or a Government Company to any company (including private sector company) which has become successful bidder in the auction of coal blocks. The proposal is at the stage of consultation with State Governments having coal/lignite bearing areas. (c): The details of land already acquired by Government under the CBA Act, 1957 during the last three years by subsidiaries of Coal India Limited in different states are as under:-

(Land acquired in Ha.)

Eastern Coalfields Limited (ECL) Year

Jharkhand

West Bengal

Total

2017-18 16.7

Nil

16.7

2018-19 Nil

30.0

2019-20 Nil

Nil

Central Coalfields Limited (CCL) Year

Jharkhand

Total

2017-18 7590.47

7590.47

2018-19 31.93

31.93

2019-20 Nil

Nil

Western Coalfields Limited (WCL) Madhya Pradesh

Total

2017-18 163.86

Nil

163.86

2018-19 17.05

Nil

17.05

2019-20 71.77

Nil

71.77

Year

Maharashtra

South Eastern Coalfields Limited (SECL) Madhya Pradesh

Total

2017-18 1990.630

1926.080

3916.710

2018-19 1050.593

427.993

1478.586

2019-20 183.186

37.866

221.052

Year

Chhattisgarh

India Ltd. and SCCL have not acquired any land under CBA Act, 1957 in the last three years i.e. 2017-18, 2018-19 and 201920.

BCCL, NCL, MCL, NLC

Q. No. 812. PRODUCTION OF WESTERN COALFIELDS LIMITED 19.09.2020 SHRI P.L. PUNIA:

Will the Minister of COAL be pleased to state:

(a) whether it is a fact that Western Coalfields Limited, a subsidiary of Coal India Limited, has decided to provide coal to various power plants on cheaper rates of landed price; (b) if so, by when this coal would be made available at the cheaper landed price; (c) the details of coal orders received by Western Coalfields Limited, power plant-wise; and (d) the details of quantum of the production of Western Coalfields Limited and the plan to increase the production level in the next five years in terms of million tonnes?

ANSWER MINISTER OF PARLIAMENTARY COAL AND MINES

AFFAIRS,

(SHRI PRALHAD JOSHI) (a) & (b): The landed cost of coal includes basic price of coal, taxes and duties and the transportation cost. Coal India Limited (CIL) has informed that Western Coalfields Limited (WCL), a subsidiary of CIL, has proposed to provide coal to various power plants located in central, southern & Western India at cheaper landed price. Interested Power consumers, who are in the vicinity of WCL, may apply to CIL for shifting of their Fuel Supply Agreement (FSA) from other subsidiaries of CIL to WCL. Coal shall be made available to interested Power Sector consumers after shifting of their FSA from other coal companies. (c): At present no FSA has been shifted to WCL from other coal companies. (d): In 2019-20, 57.64 Million Tonne (MT) coal was produced by WCL. WCL plan to increase the production level in the next five year is given below:Year Production (in MT)

2020-21 2021-22 2022-23 2023-24 2024-25 62

CCAI Monthly Newsletter October 2020

| 29

MONTHLY SUMMARY OF IMPORTED COAL & PETCOKE

Coal Price Index COAL South Africa South Africa Australia Indonesia Indonesia

(kcal/kg) 6000 NAR 5500 NAR 5500 NAR 5000 GAR 4200 GAR

Monthly Price - FOB USD 59.98 USD 45.08 USD 40.58 USD 40.88 USD 28.42

Monthly Price- FOB INR 4414 INR 3318 INR 2986 INR 3009 INR 2092

Monthly Change (USD) 2.96 0.63 1.49 4.27 5.26

Indicative Pet Coke Price PET COKE

Sulphur

Price

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

-5% + 8.5%

INR 8596 INR 6999 ($95)

Monthly Change INR 702.00 $8.10

USA (CIF)

- 6.5%

INR 7235 ($98)

$8.30

Exchange Rate

Change (Monthly)

INR 73.60

0.08

Indicative Coking Coal Price Premium Low Vol Current Month

Monthly Change (USD)

HCC 64 MID Vol

Semi Soft

CFR China FOB Aus

Low Vol PCI

Mid Tier PCI

MET COKE 62% CSR

FOB

CFR China

FOB Aus

125.50

137.56

108.51

119.94

66.55

78.45

75.45

282.50

302.13

4.44

5.88

9.19

8.94

1.88

4.76

4.26

9.63

13.63

South African Coal News: *The spread between China's domestic coal prices and values of similar quality Australian coal hit a record high this month with Chinese import curbs. This arbitrage is prompting Chinese buyers to purchase more Australian coal. The CFR south China price of NAR 5,500 kcal/kg imported coal, which is mainly from Australia, was $39.35/t lower compared with the price of China's domestic NAR 5,500 kcal/kg coal. *South African power utility Eskom, which generates 90% of South Africa's power, is still seeking funding for its shift from coal to greener fuels, but hopes to announce a deal at next year's COP26 climate conference after talks with lenders including the World Bank. *SOUTH32 forecast thermal coal production from its South African assets is at low this year compared to its previously guided 10.5 to 12.5 million tons (Mt) for the 2020 financial year. Saleable coal production from SAEC increased a fifth, or a million tons, to 6.3Mt in the first quarter. Production guidance from other operations, which include the Mozal and Hillside aluminum smelters in Mozambique and South Africa respectively, was unchanged.

30 | CCAI Monthly Newsletter October 2020

CFR India FOB N China

Australian Coal News:

*Australiaâ&#x20AC;&#x2122;s Queensland state gave final approvals for a large coking coal mine in the Bowen Basin this month as it acts to shore up jobs in the resources industry amid coronaviruslinked disruptions. At peak output, Olive Downs should produce up to 15 million tonnes a year of metallurgical coal. This would be sent to markets in Japan, China, India and South Korea, among others. * Australia is trying to clarify reports of a Chinese ban on its coal imports. Industry sources have said Beijing told energy providers and steel firms to stop buying Australian coal. Trade tensions between the Asia-Pacific partners have deteriorated in recent years. Coal is one of the major Australian commodity exports to China, behind iron ore and liquefied natural gas. So, any disruption to this multi-billion trade would hurt. * Anglo American has confirmed it will slash hundreds of jobs from its Grosvenor coal mine in central Queensland amid the deadly impact of the COVID on the countryâ&#x20AC;&#x2122;s economy and the subsequent downsizing across all sectors. * Australian coal shipments are holding up in October

despite Chinese restrictions on imports and wild weather that has buffeted the east coast of Australia over the past four days. Queensland coal shipments are tracking in line with September and those from New South Wales (NSW) are ahead of September, according to initial shipping data.

Indonesian Coal News:

*A new Indonesian government law will slash royalties for companies expanding in the country's downstream coal industry. With the amendment, coal producers that invest in the downstream industry will enjoy a 0% rate on royalties for coal produced compared with the current 13.5%. The reduction is aimed at attracting coal producers to invest in the emerging downstream industry, such as coal gasification projects. *Indonesia is heavily reliant on coal to generate electricity. Its coal-fired power plants produce a third of the country’s emissions. To minimise its future greenhouse gas emissions, Indonesia is gearing up to develop its vast renewable energy resources – including solar, wind, and geothermal. *Indonesian President Joko Widodo has ordered his cabinet ministers to set a target to reduce exports of unprocessed coal and accelerate plans to develop derivative industries for processing the fuel. He has also asked his ministers to determine how much of Indonesia’s coal should be processed into gas, petrochemical products, and to pick locations for such industries. * Indonesia’s chief economic minister Airlangga Hartarto said coal exports this year had reached 232.3 million tonnes by October, or only around 58.8% of the full-year target due to slower demand amid the coronavirus pandemic. In comparison, the government has targeted 395 million tonnes export this year. * Indonesian President Joko Widodo has ordered his cabinet ministers to set a target of reducing exports of unprocessed coal and accelerate plans to develop derivative industries for processing the fuel in Southeast Asia’s biggest economy. Indonesia, the world’s biggest thermal coal exporter, should quickly develop a local industry to upgrade, liquefy and gasify its coal, the president said.

US Coal News:

*US railroad coal volumes are expected to jump over the next year following better demand conditions, albeit only temporarily. On the utility coal side, 2021 volumes is expected to increase by 12.5% due to better natural gas prices, normal winter weather, and improved electric demand. *US coking coal exports declined by nearly 40% year on year to 2.64mn t in August, driven by a significant fall in shipments to Japan and India, as steel production in these two key US export destinations. The US exported 108,012t of coking coal to Japan in August, down by 86.4pc compared with the same month last year when Japan.

*Amid the heightened push towards decarbonising the environment, a number of US based miners including Contura is already the biggest U.S. producer of met coal and Black Thunder mine in Wyoming that’s the secondbiggest in the U.S seeking to shed its thermal assets to also concentrate on metallurgical coal. * A Democratic victory in the approaching U.S. elections would accelerate the decline of U.S. thermal coal, Moody’s Investors Service opines. With Democratic Presidential nominee Joe Biden promises to promote clean energy like never before, coal-fired power plants would be hit harder and more quickly than other fossil fuels, the analysts say.

Pet Coke News: *Due to limited supply and very few spot deals, the prices of US based pet coke has risen several dollars in recent weeks. The traders have pointed out that due to ongoing tepid market demand, suppliers have largely rolled over their contracts into next year and plan to start over from the next financial year for new contracts. * The price difference between Saudi Arabian pet coke and US gulf origin pet coke has further increased on a CFR India basis this week making the Indian traders more interested in the former. The price of Arabian pet coke with 6.5% sulphur has gone down significantly since the market reopened after lockdown while US based pet coke price remained firm due to scarce supply. * Limited supply of US petcoke continues to keep the prices on the higher side in US gulf and west coast region. Alongwith that impending Hurricane Zeta that may hit the West coast this week, will further impact the production causing the supply to remain tight in the coming weeks. The high price of petcoke may push the buyers to buy from alternative sources.

Shipping Update: *The coronavirus pandemic led to an 11.6% year-on-year contraction in air and sea freight forwarding volumes in the first half of the year. The sea freight sector has looked comparatively more robust, recording a decline of 7.6% in the first six months of 2020, with a predicted full-year contraction of 6.4%. * The World Shipping Council (WSC) has filed an agreement with the U.S. Federal Maritime Commission (FMC) in Early October to ensure that its continued container shipping advocacy work complies with the 1984 Shipping Act. WSC is also taking up serious measures in increasing government and public awareness on the importance of container shipping to the global economy. * The shipping industry is faced with more stringent environmental measures around the world, while also having to cope with a slowdown in seaborne trade, which is having an adverse effect on revenues. In fact, it is estimated that the industry’s freight rates won’t rebound for the next 12 months.

CCAI Monthly Newsletter October 2020

| 31

OVERALL DOMESTIC COAL SCENARIO Coal Production (in MT) Company

August, 2020

August, 2019

% Growth

April- August, 2020

April- August, 2019

% Growth

CIL

37.16

34.70

7.1%

195.54

210.15

-7.0%

SCCL

2.44

4.05

-39.8%

14.79

26.28

-43.7%

% Growth

April- August, 2020

April- August, 2019

% Growth

Overall Offtake (in MT) Company

August, 2020

August, 2019

CIL

44.36

40.57

9.3%

208.37

240.65

-13.4%

SCCL

2.80

4.20

-33.3%

14.18

26.16

-45.8%

% Growth

April- August, 2020

April- August, 2019

% Growth

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

August, 2020

August, 2019

CIL

33.86

33.47

1.2%

160.63

190.33

-15.6%

SCCL

2.35

3.53

-33.3%

12.03

21.85

-44.9%

Spot E-auction of Coal (in MT) Company

Coal Qty. Allocated August, 2020

Coal Qty. Allocated August, 2019

Increase over notified price

Coal Qty. Allocated April August, 2020

Coal Qty. Allocated AprilAugust, 2019

Increase over notified price

CIL

3.36

0.61

18%

13.86

9.27

15%

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

Coal Qty. Allocated August, 2020

Coal Qty. Allocated August,2019

Increase over notified price

Coal Qty. Allocated AprilAugust, 2020

Coal Qty. Allocated AprilAugust, 2019

Increase over notified price

CIL

0.00

0.62

7.94

7.32

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

Coal Qty. Allocated. August, 2020

Coal Qty. Allocated August, 2019

Increase over notified price

Coal Qty. Allocated April- August, 2020

Coal Qty. Allocated AprilAugust, 2019

Increase over notified price

CIL

6.47

0.11

13.44

2.31

Company

Coal Qty. Allocated August, 2020

Coal Qty. Allocated August, 2019

Increase over notified price

Coal Qty. Allocated April -August, 2020

Coal Qty. Allocated April -August, 2019

Increase over notified price

CIL

0.00

0.66

1.79

0.66

10%

Special Spot E-auction (in MT)

32 | CCAI Monthly Newsletter October 2020

PRODUCTION AND OFFTAKE PERFORMANCE OF CIL AND SUBSIDIARY COMPANIES COAL PRODUCTION (Figs in Mill Te) OCT'20

SUB CO. ACTUAL THIS YEAR

APR'20 - OCT'20

ACTUAL SAME % PERIOD GROWTH LAST YEAR

ACTUAL THIS YEAR

ACTUAL SAME PERIOD LAST YEAR

% GROWTH

ECL

3.50

3.20

7.00

21.50

24.10

-10.70

BCCL

2.20

1.80

21.00

12.30

13.50

-9.10

CCL

5.80

4.40

33.70

26.10

27.00

-3.20

NCL

10.20

9.30

8.80

63.70

60.30

5.60

WCL

3.50

4.20

-15.70

20.00

21.60

-7.40

SECL

10.60

8.90

19.70

64.30

69.60

-7.60

MCL

11.10

7.70

44.80

74.90

64.20

16.80

0.00

0.10

282.90

280.40

NEC CIL

0.00 46.80

39.50

18.70

0.90

OFFTAKE (Figs in Mill Te) SUB CO.

OCT'20

APR'20 - OCT'20

ACTUAL ACTUAL THIS SAME % YEAR PERIOD GROWTH LAST YEAR

ACTUAL THIS YEAR

ACTUAL SAME PERIOD LAST YEAR

% GROWTH

ECL

2.88

2.81

2.7

19.15

22.59

-15.2

BCCL

2.42

2.02

20.3

10.40

13.96

-25.5

CCL

5.73

4.36

31.5

26.81

32.70

-18.0

NCL

9.27

7.97

16.3

49.98

51.27

-2.5

WCL

3.77

2.36

60.2

19.07

23.52

-18.9

SECL

10.40

8.39

24.0

61.69

67.74

-8.9

MCL

11.98

7.35

63.0

67.75

63.96

5.9

0.09

0.20

254.93

275.93

NEC CIL

0.04 46.46

35.28

31.7

-7.6

CCAI Monthly Newsletter October 2020

| 33

34 | CCAI Monthly Newsletter October 2020

53.49

74.18

77.01

55.51

OCT- 2020

1,330,000.00

7,230.00

ACTUAL*

NUCLEAR

Source CEA

43,880.00

140,357.00

PROGRAM

283,733.44

THERMAL

CCAI Newsletter October-20

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