CCAI Newsletter October-21 by Sheikh Murad

October 2021 Price: 40/w h e r e s e r v i c e a n d d e d i c at i o n j o i n h a n d s

Vol. L No. 07

CCAI MonthlyPublished Newsletter on October 2021 1 : 28.10.2021

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From the Editor’s Desk

Unprecedented increase in dem and of electricity propelled by revival of economy, heavy rainfall in the coal-mining are as during peak production mo nths of August-September, inflated prices of imported coa l and non-building of adequa te coal stocks before the onset of monsoon may have led Ind ia’s Power and Industrial sect or on the brink of an acute coal crisis but the Union Gov ernment is confident of providi ng adequate supply to avert any scare of a blackout in the country. At this hour of crisis, the Ind ian coal sector is doing its best to fulfill the country’s energy demand by augmen ting coal production, while also taking various initiatives towards adopting the path of sustainable development with an emphasis on care for the environment and the host com munity. After the second wave of pan demic ebbed gradually, a surg e in economic activities led to a significant rise in demand and consumption of electric ity in India since AugustSeptember ’21. As per Power Ministry data, the daily pow er consumption in October’21 crossed beyond 4 billion unit s per day and 65-70 per cen t of this increased demand is being met by coal fired pow er generation only, thereby causing several of the countr power plants to grapple with y's coal shortages. The power consumption for the period August-September has progressively increased from 106.6 BU per month in 2019 (before the COVID-19 outbreak) to 124.2 BU per month in 2021. Consequent ly, total coal consumption by the Power Sector in AugustSeptember, 2021 has also incr eased by 18 per cent in com parison to the corresponding period in 2019. In a bid to match up the spu rt in demand, Coal India Ltd has ramped up supply to the Power Plants to rein in norma lcy. CIL's coal production registe red a marginal rise to 40.7 million tonnes in September . The National miner, which has been witnessing gradual scaling up in power generation and increased demand, is look ing to increase coal prices gradually and judiciously to ensure that it does not hur t demand. Meanwhile, country’s second largest coal producer Singare ni Collieries Company Ltd (SCCL) has also regained its strength and posted sales of 11,920 crore in the first half of the 2021-22 fiscal which is 67% higher compared to the first half of the previous (2020-21) financial year. To battle out the adversities, an inter-Ministerial sub-group led by the Ministry of Coal has been monitoring the coa l stock situation in the pow er plants twice a week. The Ministry has also constituted a Core Management Team (CM T) comprising representative from MoP, CEA, POSOCO, Rai s lways and Coal India Limited to ensure daily monitoring In order to manage the coal stoc k and ensure equitable distribu tion of coal. With an aim to augment coa l production and supply throug h regulatory reforms, India plans to come up with a sche me to permit coal block allo ttees to surrender mines tha they are not in a position to t develop due to technical rea sons which will immediately be offered for auction for com mercial mining for putting the block to production early. India’s Coal Ministry has also amended rules to allow 50 per cent sale of coal from captive mines. The move is like ly to benefit over 100 captive coal and lignite blocks with over 500 million tonnes per annum peak rated capacity as well as all coal and lignite bearing states. It would be interesting to see whether the country with the four th largest coal reserves in the world can take its arms against the sea of troubles and achieve a sustainable growth in coming years to achieve its target of producing one billion tonnes of coal by 2024.

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Content Vol. L No. 07 October 2021

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

Consumers' Page

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Domestic

Global

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

30 Monthly Summary Of

Imported Coal &Petcoke

Production And Offtake Performance Of Cil And Subsidiary Companies

34 Overall Domestic Coal Scenario

CCAI Monthly Newsletter October 2021

CONSUMERS’ PAGE Issue faced by both Power and NRS Consumers: 1. Submission regarding refund of EMD against coal procured through different auctions: Consumers from Power and Non-power sectors procuring coal from SECL were lift booked quantities till mid-October due to lack of production and adverse condition of coal evacuation infrastructure in certain mines of the Subsidiary such as Baroud, Chhal, Gevra, Dipka, Kusmunda. Request has been made to CIL and SECL so

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that the consumers are not penalised for shortlifting under the stated situation. Also, the EMD amounts submitted by the consumers may not be forfeited and kindly be refunded along with the coal value of unlifted quantity to the respective consumers.

Issues faced exclusively by Power Sector Consumers: 2. Requesting augmentation of coal supply to far-off (beyond 1400 kms) super-critical plants set up under

Section 63 of the Electricity Act: TPPs which fall under super-critical category set up under Section 63 of the Electricity Act and 100% power tied up with the state electricity boards are getting much lesser number of allotted rakes as per coal supply matrix which has led to severe depletion of coal stock at the plant ends. Hence, they are not able to generate power to their full capacity. The TPPs located at a distance of more than 1400 kilometers from the mines are already paying higher transportation costs. Request has been made to Ministry of Power to consider these super critical plants at par with central and state Gencos in terms of giving priority regarding sanctioning and dispatching of coal rakes and should be supplied with higher GCV coal in order to reduce the cost of power generation in line with the vision of affordable power tariff.

3. Submission by Power sector regarding regular and significant shortsupply from various mines of MCL: The Utilities procuring coal from MCL’s Talcher, Sardega and IB Valley sidings under Linkage auction FSA have been regularly facing shortreceipt to the tune of 1.5%-2% in rakes during October’21 while in a few rakes supplied from Talcher and Sardega sidings on the same month, the extent of short-receipt ranges from 4%-5% to a maximum of 9%.

A number of CIL subsidiaries are providing refund against idle freight alongwith GST components charged by the Railways. However for consumers procuring coal from SECL, the refund of GST amount is not happening during the reimbursement provided for idle freight. Request has been made to CIL and SECL so that adequate measures may be taken at the earliest possible in order to provide reimbursement of GST amounts along with refund on account of underloading.

Issues faced exclusively by Non-Power Sector Consumers: 5. Requesting enhancement of supply of coal to NRS Consumers including CPPs by CIL: In spite of regular requirement of coal for most of the NRS consumers, supply has been so scarce since the last few months that many of their plants are on the verge of closure. Supply by Rail mode to the Industries has been alarmingly low or halted from most of the CIL Subsidiaries. Also, Exclusive e-Auctions are hardly held at regular intervals and an insufficient quantity of coal is being offered through Spot e-Auctions by road mode causing the premiums on reserve price of coal in recent auctions to go higher.

Request has been made to CIL and MCL to take up necessary corrective measures so that the issue of short-supply may be addressed adequately.

Request has been made to Ministry of Coal and CIL for ensuring sufficient supply of coal to the NRS consumers including CPPs. Also, CIL is urged to conduct Exclusive e-Auctions for the NRS consumers at the earliest possible across the Subsidiary coal companies especially by Rail mode.

4. Submission by Power Sector Consumers for refund of GST amount alongwith reimbursement of idle freight on account of underloading:

CIL is requested to continue supply of coal to the winning bidders of the Tranches till the next Tranche of Linkage Auction is held so that the consumers do not suffer due to discontinuation of coal supply

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6. Request for supply of coal to NRS Consumers through Road mode and Road-cum-Rail (RcR) mode: The lack of coal supply to the NRS Consumers has caused coal stock at many plants to drop at an extremely critical level. Apart from FSA consumers, rakes allotted to many successful bidders in the Spot e-Auctions held in September are not being released for the Non-power sector. Request has been made to CIL to change the mode of supply temporarily to Road mode as well as Road cum Rail (RcR) mode for the willing consumers from the Non-power sector so that certain amount of coal could be supplied for their plants’ sustenance

7. Submission by NRS consumers requesting extension of the term of Tranche-I NRS Linkage Auction FSAs expiring in 2021: As per CIL directive, NRS Linkage auction FSAs of Tranche-I of various sub sectors will not be renewed after its initial term of five years. However, In order to run the manufacturing plants seamlessly, a continuous and assured supply of a specific quality of coal is necessary which can oly be obtained through Linkage Auctions as they are source-specific and mode-specific and ensure supply of a specific grade of coal. There is an uncertainty in procuring coal of required quantity and quality from a particular source through competitive bidding in the next tranche of linkage auction as and when it would be conducted. Also, Exclusive and Spot e-Auctions do not ensure assured supply of a specific grade of coal. Request has been made to MoC and CIL to consider the provision of extending the FSA term through mutual consent of both parties (CIL and the NRS consumers) as per clause 2.4 of the NRS Linkage Auction FSA.

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8. Submission by NRS consumers with premature terminated Linkage Auction FSA to be permitted to participate in the ongoing Tranche (V): Several NRS Consumers procuring coal under NRS Linkage auction FSAs from Tranche-I to Tranche IV had cancelled their FSAs within lock in period of two years for various reasons. Subsequently as per the FSA provision, large amount of security deposit made by those consumers have been forfeited by the concerned coal companies and may be also disqualified from participating in the immediately subsequent tranche of any auction for the non-regulated sector conducted by CIL. Considering the log gap between the last (Tranche IV) and ongoing (Tranche V) NRS Linkage Auction and the financial penalty these consumers are facing, request has been made to CIL not to restrict the consumers from participating in the ongoing NRS Linkage auction for CPP and Other Sub-sectors (Tranche-V).

9. Request for approval of interplant transfer of coal for the NRS consumers: Halted and sluggish movement in supply of coal from various CIL Subsidiaries has led to an unprecedented coal crisis in the Non-regulated Sector. Request has been made to the concerned authorities to allow interplant transfer of coal for the same group of companies (within different units of the same organisation) for higher capacity plants in the Non-power sector in line with the power sector. Any particular plant of an organisation has a reasonable amount of coal stock, this organisation may request the quantity to be supplied to another plant within the same group of company with almost no coal stock in order to save those plants from imminent shutdown.

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POWER Power minister calls for enhanced action on energy efficiency by states Power Minister R K Singh has called for enhanced action on energy efficiency by states. Singh chaired a virtual meeting with senior officials from state governments and industry partners to review the current level of activities in the field of energy efficiency and clean energy transition being implemented by state agencies, a power ministry statement said. Singh said the government is committed to the environment and India is way ahead of the targets which it had committed to in its Nationally Determined Contributions (NDCs) declared in the Paris Climate Agreement. He stated that while the country is changing the nature of energy by adding more renewable energy, resulting in emissions reduction, it is also reducing the emissions intensity of the economy by schemes for energy efficiency such as UJALA and Perform Achieve and Trade (PAT) which have resulted in reducing millions of tonnes of CO2 per annum. He He called for

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setting up of dedicated energy efficiency institutions in states, similar to the Bureau of Energy Efficiency (BEE) at the central level. .

Power cost to remain high as imported coal prices soar: Ind-Ra Short-term power prices are likely to remain elevated in the near term on account of a continued increase in imported coal prices, according to rating agency Ind-Ra. It noted that a large part of the increased power generation would continue to be met through coal-based plants, although coal output is not increasing to the desired level. This is reflected in low inventory stocks at power plants, and therefore, a part of the increased energy demand will have to be met through imported coal, Ind-Ra said. In light of the expected high imported coal prices, the short-term power prices in India are likely to remain elevated, it stated. The speedy recovery in power demand post the second wave of COVID-19 infections, coupled

with lower than adequate domestic coal production, led to a reduction in coal inventory levels at various power plants, it said.

India's electricity demand picks up in Oct as coal shortage lingers India's electricity demand grew 4.9% during the first half of October, with supply falling short of demand by 1.4% despite a 3.2% rise in coalfired generation and 30% rise in solar output, a Reuters analysis of government data showed. Increased economic activity after the second wave of the coronavirus has driven up electricity demand, resulting in a supply deficit due to a coal shortage that has forced northern states to cut power this month for up to 14 hours a day. The rapid surge in power demand and high global coal prices have left utilities scampering for coal - India's dominant source of power generation - despite record supplies from state-run Coal India, a near-monopoly in coal production. Coal's share in India's electricity generation jumped to nearly 70% during the first fifteen days of October, compared with an average of 66.5% during the whole of September, an analysis of data from federal grid regulator POSOCO showed.

Power Crisis: Govt Looks to Revise Coal Stocking Norms for Thermal Plants In a bid to avert power crisis being triggered in the country due to fuel shortages in the months following monsoon rains, the government proposes revise the coal stocking norms for thermal power plants, based on regular shift stock limits, depending on the actual fuel requirement during a particular period. Sources said that the Central Electricity Authority will come up with revised coal stocking guidelines that will have higher stocking requirement for non-pit head power plants while lower for those located near the coal-bearing

regions of the country. As per a draft that is being discussed, against the uniform requirement of 20-22 day coal stocks to be maintained by power plants, lower coal stock of 10 days may be mandated for pithead power plants while 20 days stock may be needed for power plants farther from coal-producing areas. But in the peak summer months (April-June), non-pit head plants would still require to stock 22 days of coal while pit head plants around 12 days. The norms of stocking may change slightly in winter months.

Power ministry mandates energy accounting for discoms to curb power losses The Ministry of Power has said it has mandated energy accounting of distribution companies (discoms) to reduce electricity losses. The notification stipulates quarterly energy accounting by discoms through a certified energy manager within 60 days. There will also be an annual energy audit by an independent accredited energy auditor. Both these reports will be published in the public domain. Energy accounting reports will provide detailed information about electricity consumption by various categories of consumers and the transmission and distribution losses in various areas. It will identify areas of high losses and theft and enable corrective actions and also enable the fixation of responsibility on officers for losses and theft. The data will enable the discoms to take appropriate measures for reducing their electricity losses so that plan for suitable infrastructure up-gradation as well as demandside management (DSM) efforts in an effective manner. This initiative will further contribute towards India's climate actions in meeting our Paris Agreement goals.

R K Singh asks PFC, REC to explore cheaper fund options Power Minister R K Singh has asked stateCCAI Monthly Newsletter October 2021

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owned Power Finance Corporation (PFC) and REC to explore cheaper options for raising funds, including offshore sources. Besides, he also asked both the non-banking financial companies to focus on ensuring that the power sector value chain gets access to cheaper funds, particularly renewable energy. He stressed the need for improving the competitiveness of both institutions to increase their market share. He advised PFC and REC to explore better and cheaper options for raising funds, including from offshore sources, with an overall objective of ensuring that the power sector value chain gets access to cheaper funds. For this, he directed PFC and REC to carry out a strategic analysis to adapt to the changing business environment in the sector with an overall objective to deliver power to consumers at a reasonable cost. The minister also stressed the need for a speedy resolution of stressed assets. He also suggested a slew of measures to both the entities in this context, including ensuring that the stressed assets are resolved at a fair value with a minimal haircut for PFC and REC and in line with the national interests.

91% stock from Coal India mines being sent to power plants Over 91% of coal produced in Coal India mines are being transported to thermal plants across India as an attempt to tide over the ongoing power crisis, which has seen stocks of the fuel deplete in recent weeks. The remaining is diverted for other industries. Power plants across India are facing an acute shortage of coal, with stocks down to last mere days, due to a supply crunch and increased demand. Of the eight Coal India mining companies in the country, Mahanadi Coalfields Limited (MCL) in Odisha is supplying the highest stocks, at around 96 of the total 289 rakes per day. Out of these 91, about 88 are being sent to power plants, government data shows. Each rake is around 59 wagons of coal.

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According to power ministry data, at least 10 non-pithead thermal plants in the country of which the eight located over 1500 km away from coal sources only have stocks left for 5-7 days. Other power plants too have limited stocks of coal left.

Coal shortage: Railways ramps up coal rakes to augment supply to powerhouses Amidst coal shortage at thermal power plants, Indian Railways has ramped up the number of coal rakes carrying the dry fuel across the country from 435 rakes per day in the end of September to 487 rakes daily. The national transporter has also issued instructions to all zones to monitor the loading of coal from mines and increase the number of rakes being used to supply coal to powerhouses. According to the data, out of the 378 rakes which were ferrying coal on October 1, 280 were sent to powerhouses, however, by October 22, out of a total of 487 rakes carrying coal, 391 were destined for powerhouses across the country. The remaining was diverted to other industries. sources indicate that the Railways is mulling putting into service special trains just to ferry coal similar to the service undertaken during the shortage of oxygen at the peak of the coronavirus crisis.

Amid coal crisis, windfall for power-surplus Himachal As several states faced power shortage due to dwindling coal stocks, Himachal not only remained unaffected but also earned good profit over the last month. An Himachal Pradesh State Load Dispatch Centre (HPSLDC) official said the power rate jumped to the highest permissible limit of Rs 20 per unit on several occasions. “The price usually fluctuates between Rs 2.50 and Rs 6, but for at least 10 days in October the average price range has been Rs 11-14 a unit. The past few

weeks have indeed been profitable,” he said. Much of the surplus power is going to the energy exchange. “We don’t have many bilateral power pacts where the price remains fixed. The exchange is market driven and rates are fixed as per demand and supply on a daily basis,” the official said. Against the per day consumption of 3 lakh units, the state is currently generating 4.30 lakh units. “Though the generation is coming down gradually, we still have 1.30 lakh surplus units every day,” he said.

Assam cabinet nod to improve power connectivity in the state The Assam cabinet has given its nod to various measures for improving power connectivity in the state, including expansion of the electrification network, an official statement said. The cabinet approved the electrification of 4,80,249 households, mainly under on-grid mode, and sanctioned Rs 1718.18 crore for the purpose and allowed electrification of 48,231 anganwadi centres and 13,120 primary schools at the cost of Rs 161.42 crore. It decided to install 9,000 distribution transformers, 70 pre-fabricated compact substations and 11 power transformers, besides repairing 4,200 damaged transformers for Rs 250.08 crore for improving voltage stability and reducing power distribution losses, the statement said. Approval was also given for installing 6,20,100 smart meters to improve billing process and energy accounting, thereby reducing commercial losses. The cabinet further decided to release Rs 120 crore as grant-in-aid to Moitri Society under the Mission for Overall Improvement of Thana for Responsive Image (Moitri) scheme for 2021-22.

NTPC invites bids for importing 2 million tonne coal India's largest thermal power producer, NTPC, has issued an 'invitation for bids' (IFB) for pro-

curing 2 Million Tonne (MT) of imported coal. In two separate notices, the generating company (genco) has invited bids for its own power plants and for DVC, 1 MT each. The move comes in wake of ongoing coal shortage in the country with the average coal stock level at power units being 4 days. The cost of coal in the global market has shot up with current rates around Rs 12,000 per tonne. According to industry calculation, this increases power generation cost by Rs 0.50-0.75 per unit The company in its IFB mentioned it has requirement of 1MT imported coal of for its power plants - Talcher-Kaniha, Mouda, Farakka-Kahalgaon, Simhadri, Dadri, Solapur, Kudgi, Unchahar, Tanda, Korba, Sipat, Lara, Darlipalli, Barh, Bongaigaon, Barauni, Gadarwara, Vindhyachal, Rihand, Singrauli, Khargone, Ramagundam.

Centre committed to providing all possible support to make J&K power surplus: Singh The Centre is committed to providing all possible support to Jammu and Kashmir across generation, transmission and distribution segments to make the Union Territory power surplus, remove all supply constraints and provide round-the-clock quality power to all citizens, said Union Minister for Power and New & Renewable Energy R K Singh. The minister also emphasised the commitment of the government to provide 24X7 quality power supply across the UT of J&K for improving the 'Ease of Living of citizens' and the 'Ease of doing business for the industries'. A strong power sector means ease of living, industrialisation, and employment generation. We are strengthening J&K's power infrastructure that remained dilapidated for the last several decades," said the lieutenant governor. Sinha also outlined how the UT had attained remarkable progress not just in adding over 150 per cent transformation capacity but also succeeding in increasing revenues by over 23 per cent. CCAI Monthly Newsletter October 2021

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As power generation falls, transmission companies, private producers make a killing on exchanges Private power producers and some state transmission utilities appear to be making a killing by selling electricity on the exchanges where rates have tripled owing to lower generation as a result of coal shortage, even as power secretary Alok Kumar asked states to watch out for generators gaming the market and take legal action if imported coal-based power plants refused capacity on any pretext. Data from the power exchanges for October 13 show producers and state transmission companies selling electricity at Rs 16-18 per unit against the usual rate of Rs 4-6 prevalent before the coal shortage hit generation units. Transmission Corporation of Telangana Ltd and Karnataka Power Transmission Corporation Ltd were the top two sellers, commanding a tariff of Rs 16 and Rs 15 per unit, respectively. Sembcorp was the third-largest seller overall and first among private power producers, commanding a price of Rs 16 per unit. Jaypee Nigre Thermal Power Plant, Raipur Energen, Raigarh Energy Generation Ltd and Jindal Power Ltd got a tariff of Rs 17 per unit.

India set to hit 450 GW renewable energy installed capacity by 2030: MNRE The Ministry of New and Renewable Energy (MNRE) has said that India is set to achieve 450 GW renewable energy installed capacity by 2030. RK Singh, Minister of Power, New and Renewable Energy, emphasised that the world is on the cusp of transformation, and immediate corrective steps are needed to mitigate climate change. He highlighted that energy transition needs to be the first step in this direction. He said that India is already ahead of what

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"we pledged in our Nationally Determined Contributions (NDCs)" and added that, "already 39 per cent of our installed capacity is from nonfossil based sources. By 2022 we will reach our target of 40 per cent. India is launching the Green Corridor Phase 2 and are generally expanding transmission to put in place systems for renewable power evacuation from sites where irradiation is high, or wind speed is high. Singh also said that intermittency of renewable power is another challenge for the entire world highlighting that battery storage per unit currently is high and needs to come down. He added that the government is also coming out with bids for battery storage.

Solar panel prices up a quarter in 2 months Prices of the imported solar panels have shot up 23% in the last two months since China’s power shortage crippled the delivery schedule from manufacturing plants. The price of solar panels is being quoted at over 28 to 32 cents per watt peak, compared to 26 cents before the crisis. The price increase is “adversely affecting” the commercial viability of projects where panels are yet to be procured, said EPC players importing panels for developers. There is a perception among the global community that the power shortage due to coal supply issues in China will continue till March 2022. On the other hand, India plans to introduce 40% basic customs duty (BCD) from April 1, 2022, on imported solar panels. Together the two issues will compound the problems further for developers whose projects were already delayed by Covid-19. Chinese module manufacturers have stopped giving any commitment to the production or pricing of modules. When forced, suppliers quote absurdly high prices between 28-32 cents per watt peak compared to 26 cents in July-August.

Corporate funding in solar sector BHEL completes renovation surges to $22.8 bn in Jan-Sept of Baira Siul hydro project, 2021: Report commissions third unit The total corporate funding in the solar energy sector increased 190 per cent in the first nine months of 2021, with $22.8 billion in 112 deals compared to $7.9 billion in 72 deals in the corresponding period previous year, according to a recent report. The report by clean energy consultancy, Mercom Capital added that the total solar corporate funding in the third quarter (Q3) of 2021 came to $9.3 billion in 41 deals, a 72 per cent increase compared to $5.4 billion in 35 deals in Q2 2021. According to the report, global venture capital (VC) funding in the solar sector totaled $593 million in 13 deals in Q3 2021, a 2 per cent decrease compared to $608 million in 12 deals in Q2 2021. Funding increased 224 per cent year-over-year compared to $183 million in 15 deals in Q3 2020.

India most cost-effective globally in rooftop solar power: Report A global study has found that India is the most cost-effective country for generating rooftop solar energy at USD 66 per megawatt-hour, while the cost in China is marginally higher at USD 68 per megawatt-hour. Due to the lower cost, rooftop solar photovoltaics (RTSPV) technology, such as roof-mounted solar panels used in homes, and commercial and industrial buildings, is currently the fastest deployable energy generation technology. This, according to this global study, is projected to fulfil up to 49 per cent of the global electricity demand by 2050. Over the past decade, the massive drop in deployment cost coupled with policy-driven initiatives has led to a rapid uptake of RTSPV globally. Between 2006 and 2018, the installed capacity of the RTSPV has grown from 2.5 gigawatts (GW) to 213 GW.

State-run engineering firm BHEL has revealed that it has completed the renovation and modernization of the 3×60 MW Baira Siul Hydro Power Station located at Chamba, in Himachal Pradesh. Bharat Heavy Electricals Limited (BHEL) has successfully completed R&M (Renovation & Modernization) and commissioned the third and final unit of the 3×60 MW Baira Siul Hydro Power Station located in Chamba district of Himachal Pradesh. The first and second units of the station have already been renovated and commissioned in December, 2019 and October, 2020 respectively. BHEL’s hydro plants are successfully performing in India and across the world, including countries such as Afghanistan, Azerbaijan, Bhutan, Malaysia, Taiwan, Tajikistan, Rwanda, Thailand, New Zealand, Nepal and Vietnam. Within India, BHEL sets account for 46 per cent of the country’s total installed hydro power capacity. Currently, BHEL is carrying out comprehensive R&M of 14 hydro sets across the country, aggregating to 639 MW.

GE to supply 810 MW onshore wind turbines to JSW Energy GE Renewable Energy has said it has received an order from JSW Energy to supply 810 megawatt (MW) of onshore wind turbines for their upcoming wind farms in Tamil Nadu. The turbines will produce enough green energy to meet the annual electricity requirements of more than 2.1 million households in the country, according to the official press release. “Our company has set a target to reach 20 GW of power generation capacity by 2030, by which the share of green and renewable energy projects will increase to 85 per cent of the total portfolio. The under-construction project is our first large-scale wind power project,” said Prashant Jain, joint managing director and chief executive officer (CEO), JSW Energy. CCAI Monthly Newsletter October 2021

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DOMESTIC Govt to Ramp up Per Day Coal Production From 1.94 Million Tonnes to 2 Million Tonnes in Next 5 days The Ministry of Power has requested all states and Union Territories to use unallocated power only to supply electricity to its consumers in the State and not impose load shedding or sell it in power exchanges at higher prices.This came amid reports of possible power disruptions in some states due to coal shortage. The ministry said in a memorandum, “It has been brought to the notice of Ministry of Power that some States are not supplying power to their consumers and imposing load shedding. At the same time, they are also selling power in the power exchange at a high price.” “The States have therefore been requested to use the

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unallocated power for supplying electricity to the consumers of the State,” the power ministry said in its memo.

Coal ministry to augment fuel supply to power sector from captive mines The coal ministry has said it has taken various measures, including diverting the output from captive coal mines, to augment fuel supply to the power sector. The development assumes significance in the wake of country's power plants grappling with coal shortages. The ministry offered coal supply from NLC India's Talabira II & III mines in Odisha to NTPC. In this connection, both the companies worked

together to commence the supply of coal from Talabira II & III open cast project (OCP) to NTPC (Darlipali & Lara Power Plants). NLC India Limited, a navratna company under the administrative control of the Ministry of Coal is operating Talabira II & III coal mines having annual capacity of 20 million tonnes in in Odisha. Talabira II& III OCP has commenced production from the financial year 2020-21. State-owned NLC India this week said it is making efforts to ramp up coal output from one of its mines in Odisha to up to 10 million tonnes per annum this year.

Govt launches next tranche of auction of coal mines The Ministry of Coal has launched the auction process of 40 new coal mines after the successful auction of 28 coal mines in the first two tranches. With coal mines rolling over from the previous tranche, there shall be a total of 88 coal mines on offer. Total geological resources of about 55 billion tonnes of coal are on offer from these 88 mines, of which 57 are fully explored mines and 31 are partially explored mines with 4 coking coal mines on offer. Mines are spread across 10 coal-bearing states of Jharkhand, Chhattisgarh, Odisha, Madhya Pradesh, Maharashtra, West Bengal, Andhra Pradesh, Telangana, Arunachal Pradesh, and Assam. From this tranche onwards, the Ministry of Coal has introduced provisions in the Agreement related to sustainable mining operations, including mine closure; Mechanised evacuation of coal; and Surrender of a coal mine by successful bidder upon encountering difficult mining conditions. The list of mines has been finalized post detailed deliberations and mines falling under protected areas, wildlife sanctuaries, critical habitats, having forest cover greater than 40 percent, heavily built-up area, etc. have been excluded.

Govt amends rules to allow 50% sale of coal from captive mines The government has said it has amended rules with a view to allow 50 per cent sale of coal from captive mines. The move is likely to benefit over 100 captive coal and lignite blocks with over 500 million tonnes per annum peak rated capacity as well as all coal and lignite bearing states. This is applicable for both the private and public sector captive mines. With this amendment, the government has paved the way for releasing of additional coal in the market by greater utilisation of mining capacities of captive coal and lignite blocks, which were being only partly utilised owing to limited production of coal for meeting their captive needs. Availability of additional coal will ease pressure on power plants and will also aid in importsubstitution of coal. The allowance for sale prescribed quantity of coal or lignite shall also motivate the lessees to enhance the production from the captive mines. Further, payment of additional premium amount, royalty and other statutory payments in respect of the quantity of coal or lignite sold shall boost the revenue of the state governments.

India considering strategic reserves for gas, imported coal India is considering maintaining strategic reserves of natural gas and imported coal to address future supply shocks, a senior power ministry official said. Considering the recent coal supply crunch to the Power sector, Alok Kumar, India's power secretary, said the country should start thinking and discussing about keeping a strategic reserve of gas and imported coal, so that economies are able to tide over these supply shocks for about

CCAI Monthly Newsletter October 2021

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a month or so. He said other countries are increasingly diversifying meet their own needs first when there is a supply crunch, citing the example of Russia curtailing supplies to European nations because they wanted more gas locally. Most of India's 135 coal-fired power plants have fuel stocks of less than three days. Coal accounts for over 70% of India's electricity generation.

Coal India supply to power sector grows by 12% to 118 MT in Sep qtr

NLCIL, erstwhile Neyvelli Lignite Corporation, has offered 11,00,000 tonne of coal from its Talabira -2 &3 open cast mines in Odisha on Mjunctions’s e-market place as a measure to make some coal available to consumers at a time when Coal India ( CIL) has suspended eauctions for traders and non-power consumers. NLCIL had offered coal between a gross calorific value of 3,101 and 3,400 at a reserve price of Rs 2,492.93 per tonne. Although neither NLCIL nor Mjunction wanted to disclose the amount lifted off the offered quantity or the premium fetched from the auction, a ministry official said only NLCIL has supported with supplies at the hour of crisis.

State-owned Coal India Ltd supplied 117.6 million tonnes (MT) of coal to power utilities during July-September of the current fiscal, registering a growth of 12.3 per cent. "Coal India Ltd (CIL) supplied 117.6 million tonnes to power utilities during July- September 2021 quarter, the highest for Q2 of any year, posting 12.3 per cent growth," the PSU said in a statement.

NLCIL has supplied additional 50,000 tonne each to NTPC’s Darlipali thermal power station in Odisha and NTPC’s Lara TPS in Chhattisgarh. But there are no reports of any of the 43 captive mines augmenting production despite the Centre allowing sale of 50% of their excess production in the open market.

This is a volume jump of 13 MT compared to 104.7 MT in the same quarter last year. The growth is even higher at 17.2 per cent when matched against 100.3 MT of COVID-free second quarter of FY'20.

Pralhad Joshi directs coal PSUs to increase production, dispatch

CIL's total offtake shot up to 147.3 MT at the quarter ending September which is 9.7 per cent more against comparable quarter of last year when the offtake was 134.3 MT. In fact, during the first half of this financial year CIL's offtake to power sector at nearly 246 MT was highest ever for this period so far but the demand from this sector was even higher as an outcome of a sudden spike in coal-based generation to unprecedented levels.

Mjunction auctions 11,00,000 tonne of NLCIL coal to supplement CIL supplies 18 | CCAI Monthly Newsletter October 2021

Union minister for coal, mines, and parliamentary affairs Pralhad Joshi held talks with coal companies and sort out the coal crisis, which has affected power production in India. He chaired a meeting at the headquarters of the Central Coalfields Limited (CCL) with officials of the CCL, the Bharat Coking Coal Limited, the Eastern Coalfields Limited and the Central Mine Planning and Design Institute. Additional secretary in coal ministry VK Tiwary and CIL chairman Pramod Agarwal also attended the meeting. He directed officials to ensure sustained coal production and dispatch to power plants and ensure that there is no shortage. “The festive season has begun and it’s our duty to provide an uninterrupted supply of coal to power plants,” he said, stressing that coal firms should take

steps to clear the bottlenecks in coal production and transport. Joshi also assured power plants that they would continue to get their requisite supply.

Mahanadi Coalfields Dispatched 5.4 Lakh Tonnes of Coal In October Amid fuel crisis faced by many states earlierin October, Mahanadi Coalfields Limited (MCL) has dispatched more than 5.47 lakh tonnes of dry fuel across the country till October 17, 2021, which it claimed was a record as the company broke its own record of dispatching 5.45 lakh tonnes of coal within a fortnight. The company also dispatched the highest ever 103 rakes of coal to various plants. The company's chairman P K Sinha said that MCL has sufficient coal stock for the month of October and in fact the coal production, dispatch and overburden removal have registered a growth of 26.5 per cent, 34.3 per cent and 71 per cent respectively as against the same period during the previous fiscal. The company said that in order to maximise supplies led to an average dispatch of 5.17 lakh tonnes of coal per day during October.

SCCL to scale up coal production Chairman and Managing Director of the Singareni Collieries N. Sridhar has stated that sufficient coal is being transported to the thermal generation units on daily basis, hence, there is no question of scarcity. The units have not faced any scarcity for the past seven years, and the same trend will be continued in future too, he assured. Apart from local consumption, coal is also being exported to Andhra Pradesh, Karnataka, Maharashtra and Tamil Nadu, which have supply agreements with SCCL. The supply will be

19 | CCAI Monthly Newsletter May 2021

scaled up in the coming days, Sridhar said. Measures are being taken to meet targets of coal supply from all open cast and underground mines, and Singareni is prepared to supply 1.9 lakh tonnes of coal every day. Starting from next month, the supply will be scaled up to two lakh tonnes, he informed, and asked the officials concerned to gear up for meeting the targets.

Environment ministry relaxes expansion norms for certain mines The Union environment ministry has relaxed the environmental norms for the expansion of certain iron, manganese, bauxite, and limestone mines. According to an office memorandum (OM) issued on October 20, expansion of up to 20% capacity for mines of these four minerals with a 5-star rating can be allowed only based on public consultation. The OM said the ministry of mines and other stakeholders sent representations to the environment ministry to simplify the procedure for issuing environmental clearance for these minerals. The request was referred to the joint expert appraisal committee (coal and non-coal mining sector) of the environment ministry. The panel decided that mines with a 5-star rating, which had been granted environmental clearance based on a public hearing, can expand their capacity by up to 20%. They can do so after conducting a public consultation.

Indian Railways’ Trishul& Garuda long haul freight trains: Effective solution for capacity constraints Indian Railways has run two long haul freight trains “Trishul” and “Garuda” over the South Central Railway network successfully. These long haul freight trains which are twice or multiple times longer than the normal composition of Indian Railways’ freight trains provide a very CCAI Monthly Newsletter October 2021

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effective solution to the problem of capacity constraints in critical rail sections including saving of path across congested routes, maximizing the throughput of critical sections, quicker transit time, saving in crews.

pensive power from the national grid and adding to pressure on utilities with low coal stock, the Aluminium Association of India (AAI) told Reuters, as state-run Coal India has curbed supplies.

the long haul train- Trishul is South Central Railways’ first long haul train comprising of three freight trains, i.e., a total of 177 wagons while The South Central Railway followed it up with the running of yet another similar one named Garuda on 8 October 2021 from Raichur of Guntakal Division to Manuguru of Secunderabad Division.

Indian aluminium producers such as Hindalco Industries Ltd and Vedanta Ltd largely use power generated from the so-called captive utilities - which are not connected to the national grid - where the companies generate electricity for self-use. AAI estimates aluminium production to annually account for 5-6% of India's total power demand met through the national grid.

The bulk of the South Central Railway zone’s freight traffic moves in certain arterial routes such as Ballarshah – Kazipet – Vijayawada, Kazipet – Secunderabad – Wadi, Visakhapatnam – Vijayawada – Gudur – Renigunta, Vijayawada – Guntur – Guntakal sections.

Aluminium producers says fuel procurement challenges were being exacerbated by by Coal India's decision last week to cancel auctions and curtail supplies under long-term contracts.

ECoR Records Highest-Ever Coal-Loading In Single Day From Talcher The East Coast Railway (ECoR) has carried 66 rakes of coal from Talcher Loading points to various States of the country which is the highest ever loading in a single day. East Coast Railway has loaded 2.6 lakh tonne of coal towards Delhi, Punjab, UP Maharashtra, Tamil Nadu, Karnataka, West Bengal, Andhra Pradesh from Talcher loading points. Altogether, East Coast Railway has loaded 181 rakes of freight on lastweek; that includes 107 rakes of coal, 31 rakes of minerals and ores, 14 rakes of Iron & Steel and 21 rakes of other freight carried from its jurisdiction.

India aluminium producers draw costly power from grid, hurting utilities low on coal India's aluminium producers are drawing ex-

20 | CCAI Monthly Newsletter October 2021

"Under long-term fuel supply agreements, we were getting full supplies in June, in September that reduced to 60% and in October we are getting as low as 50%," AAI said. .

STEEL

India to buy coking coal from Russia; Steel firms look to diversify imports India has opened up yet another door in cooperation with its strategic energy partner Russia. Union Minister of Steel, Ram Chandra Prasad Singh, has signed a memorandum of understanding (MoU) with Russia’s minister of energy Nikolay Shulginov, for collaboration in the mining and steel sectors, with special focus on coking coal. The move is part of India’s National Steel Policy 2017 under which the country is aiming to reach 300 million tonne steel production by 2030 while simultaneously working on forward and backward integration.

The MoU between the two countries signed in Moscow envisages implementation of joint projects and commercial activities in coking coal, including long-term supplies of high-quality coking coal to India, development of coking coal deposits and logistics development, sharing of experience in coking coal production management, technologies of mining, beneficiation and processing as well as training, said the steel ministry in its release. .

Sponge iron sector might report negative growth due to coal crisis: SIMA The domestic sponge iron industry might report a negative growth in the ongoing December quarter “if the shortage of coal is allowed to continue”, according to apex industry body SIMA. Sponge Iron Manufacturers Association (SIMA) Executive Director Deependra Kashiva said India is expected to report a 60 per cent quarteron-quarter (q-o-q) fall in its sponge iron output during the July-September 2021 period, amid the ongoing coal crisis. As per the JPC data, the sponge iron production growth in April-June 2021 was 70 per cent, compared with January-March 2021. This is expected to come down by 60 per cent to a level of 10 per cent in the second quarter ended September 30, 2021, due to the coal crisis, he said without providing any figures. Sponge iron or direct reduced iron (DRI) is used in producing semi-finished steel items, ingots and billets, which are further used to make various finished steel items. Coal is a key raw material used to produce sponge iron.

ma, Secretary General, Federation of Indian Mineral Industries, said the current acute coal crunch due to various factors has created a precarious situation for coal consumers mainly for steel and aluminium industry falling under non-regulated sector (NRS). The industry is almost at a standstill and is left with no time to devise any mitigation plan to sustain operations, it said. The power plants are running at critically low coal stocks and forced to operate at much reduced capacity with huge risk of facing plant closure and threat of job losses looming, besides threatening domestic value addition, the letter added. Since September 2018, no exclusive coal linkage auction for CPP has been held, while quantity of coal being offered through spot e-auction by road mode is insufficient. Following this, the premium in recent auction has skyrocketed making it unviable for the NRS coal consumers. FIMI also requested expedite exclusive e-auction for NRS consumers through rail mode to provide some relief for consumers and increase rake allocation on priority.

JSW Steel says group combined output grew 29% to 5 MT in JulSep JSW Steel posted a 29 per cent year-on-year growth in group combined steel production at 5.07 million tonne (MT) during the quarter ended September 30, 2021. In a statement, it said it had produced 3.92 MT in the July-September period of financial year 2020-21.

FIMI writes to govt for coal allocation, industry at near standstill, it says

JSW Steel's standalone output rose by 6 per cent 4.10 MT, from 3.85 MT in the year-ago quarter. The capacity utilization at standalone level was at 91 per cent in second quarter of ongoing 2021-22 fiscal, the statement said.

In a letter written to Ministry of Coal, RK Shar-

Vijayanagar works has taken planned shut-

CCAI CCAI Monthly Monthly Newsletter Newsletter September October 2021

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down for campaign repairs of two of its convertors and Salem works has taken an annual shutdown of one of its blast furnaces, due to which the capacity utilisation remained at an average of 91 per cent in this quarter.

velopers’ Associations of India (CREDAI) Tamil Nadu Chapter has always accused cement manufacturers of collusion in fixing prices. Leading cement makers, however, have rejected CREDAI’s claims. Cement, according to them, formed a minuscule part of the building cost. Much of the rise in building cost, according to them, is due to consistently rising land costs.

CEMENT

ACC increases sales and profit Cement Prices set to go up fur- in third quarter of 2022 financial ther year With the recently-formed South Indian Cement Manufacturers’ Association (SICMA) flagging fresh concerns over rising input cost, the ground is being prepared for yet another rise in cement prices.

ACC's third-quarter sales in the 2022 financial year were US$501m, up by 6% year-on-year from US$472m in the third quarter of the 2021 financial year.Its cement sales were 6.57Mt, up by 1.2% from 6.49Mt, while its costs rose by 5.3% to US$428m from US$406m. Press Trust of India News has reported that the company's net profit in the quarter rose by 24% to US$60.1m. The company attributed its 'solid' quarterly performance to its focus on sustainability while meeting customers' needs.

SICMA said the rise in input costs in the last couple of months alone would result in the production cost of cement going up by at least Rs 60 a bag. “It is difficult to predict either further increase in the fuel cost or the capacity utilisation that can be achieved by the cement industry Managing director and chief executive officer in South India in the near future,” SICMA said in Sridhar Balakrishnan said "Despite a steep ina release. crease in fuel costs, our cost efficiency meaAccording to SICMA, the last two months have sures under Project Parvat have enabled us to maintain robust performance." seen an unprecedented increase in the cost of imported coal. SICMA is apprehensive that the Regarding the full-year outlook, he added "We cost of coal and petcoke could rise further in the are positive that the cement sector will benefit from increasing demand in various sectors such coming days. as housing, commercial and industrial construcCement price has been a politically sensitive tion." subject. The Confederation of Real Estate De-

22 | CCAI Monthly Newsletter October 2021

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GLOBAL China coal prices mark worst week since May on govt intervention China's thermal coal futures plunged in the 3rd week of October and turned in their worst week in five months, following Beijing's strongest intervention in years to boost supply and cool runaway prices of the commodity amid a widespread power crunch. The most-traded contract on Zhengzhou Commodity Exchange, for delivery in January , hit the lower daily trading limit of 14% and settled at 1,408.4 yuan ($220) a tonne. That was nearly 30% below a record high hit and down nearly 15% for the week, the biggest weekly drop since May. Coking coal was down 11% and coke futures fell 9% on the Dalian Commodity Exchange, extending losses from prior sessions. "We're now seeing the fruits of China's supply response, as the government has given miners carte blanche to produce at full tilt - even permitting the relaxation of safety inspections

24 | CCAI Monthly Newsletter October 2021

in some cases," said Atilla Widnell, managing director at Navigate Commodities in Singapore. The parabolic pricing action largely represented the fear of buyers being unable to source sufficient volumes to feed power plants and coke ovens.”

China coal futures slump as gov't signals intervention to ease power crisis China's thermal coal futures fell the maximum permitted 11%, extending losses since last week when Beijing signaled it might intervene to cool surging prices that have led to a power crunch across much of the country. China is pushing miners to ramp up coal production and is increasing imports so that power stations can rebuild stockpiles before the winter heating season, but analysts say shortages are likely to persist for at least another few months. The country's most-active thermal coal futures tumbled the limit-down amount to 1,587.4 yuan

($248.07) per tonne. They closed down almost 20% from the record high of 1,982 yuan per tonne, but are still up about three-fold for the year-to-date. Coking coal and coke futures on Dalian Commodity exchange also fell by their maximum permitted limits of 12%. Coking coal closed at 3,109 yuan/tonne and coke futures plunged to 3,663.5 yuan /tonne.

China’s raw coal output drops in September China’s raw coal output dropped 0.9 percent year on year to 330 million tonnes last month, data from the National Bureau of Statistics (NBS) showed. The September output represented a 1.8 percent decrease compared with the same period in 2019, the NBS said. The country imported 32.88 million tonnes of coal in September, up 76 percent year on year. In the January-September period, China produced 2.93 billion tonnes of raw coal, up 3.7 percent year on year, or up 3.6 percent from the same period in 2019. In the past nine months, China imported 230.4 million tonnes of coal, down 3.6 percent year on year.

Indonesia to miss 2021 coal output target, minister official says Indonesia is likely to miss its coal output target this year, an energy ministry official said. Heavy rains are slowing mine and port operations in Indonesia, the world's biggest exporter of coal used for power generation, mining executives have told Reuters. Production is expected to be 610 million tonnes in 202, which is 2.4per cent below the ministry's target of 625 million tonnes.

In January to September, coal production was around 450 million tonnes, 72per cent of target. Output was up 8.7per cent to 456.77 million tonnes from 420.29 million in January-September 2020, ministry data showed.

Indoinesia to Prioritize Solar Energy, Increase Power Plant Capacity The Ministry of Energy and Mineral Resources (ESDM) has started to execute the plan to increase the capacity of new and renewable energy plants or clean energy. The additional capacity would reach 38 Gigawatts (GW) until 2035. ASEAN Power Grid is an interconnection of electricity cooperation to increase the supply in the ASEAN regions. This cooperation will enable cross-regional electricity trade in the future. As quoted from the official website setnas-asean.id, one of the collaborations that has been achieved was the construction of the Sarawak, Malaysia-West Kalimantan interconnection network since 2016. The clean energy power plant plan is part of Indonesia's commitment to implement the Paris Agreement. It also includes Indonesia’s target to reduce greenhouse gas emissions by 29-41 percent by 2030. The energy sector was expected to reduce 314 to 398 million tons of CO2 emissions. The government had designed the net zero emission roadmap for 2021-2060. The main strategy is that the clean energy mix in 2060 could be achieved at 100 percent.

Indonesia's higher coal output target thwarted by heavy rains Indonesia, the world's biggest exporter of coal used for power generation, is facing challenges in hitting its output target for the fuel because of heavy rains that have slowed activity at key mines in recent months. CCAI Monthly Newsletter October 2021

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Global coal prices have soared to records this year on a recovery in industrial fuel demand and constrained mine output in top coal consumer China. Indonesia targeted a jump in output and exports to capitaliae on the boom, but heavy rains have slowed mine and port operations, mining executives told Reuters. The Energy and Mineral Resources Ministry in April raised its 2021 output target to a record 625 million tonnes, 11 per cent higher than 2020 output, from an initial target of 550 million tonnes, with the higher supply intended primarily for exports. But through September output has risen by only 8.7 per cent from a year earlier to an estimated 456.77 million tonnes, energy ministry data showed, while exports dropped 4.6 per cent to 230.45 million tonnes compared to last year.

South Korean coal prices dip but cold limits downside China's main economic planning agency the NDRC announced a plan to regulate thermal coal prices, in an effort to cool domestic prices that are at historic highs amid tight availability. This weighed on global coal prices this week. Argus assessed NAR 5,800 kcal/kg coal at $185.83/t fob Newcastle and $223.74/t cfr South Korea this week, down by $22.98/t and $4.90/t on the week, respectively. The delivered price fell less sharply as demand remains firm in South Korea amid an early winter cold spell, while increasing exposure to spiralling spot LNG prices prompted the government to roll back autumn coal-fired capacity restrictions last week. The temperature in South Korea's capital Seoul dropped to as low as 1.3°C on 17 October, a 64-year low for the time of year, according to data published by the Korea Meteorological Administration (KMA). Based on up-to-date daily peak power demand and 17.6GW of scheduled nuclear availabil-

26 | CCAI Monthly Newsletter October 2021

ity in October, South Korea's power demand could grow by more than 7.5pc on the year this month, which could boost thermal generation by more than 10.5pc on the year, according to Argus analysis.

Weak coal demand outlook to persist in Japan Weakness in regional coal prices also weighed on implied landed coal prices for Japan this week, while there was more thermal power capacity added in recent times amid colder weather across northeast Asia. Daily power demand in Japan fell by 7pc on the week to 90.6GW over the 18-20 October period, although this was still up by 5pc compared with the same period a year earlier. Japanese power demand has trended higher on the year since mid-September amid early cold weather, although it largely remained within the prepandemic range. Temperatures in Japan were forecast to remain below the seasonal average for most days during the next fortnight by as much as 5.01°C, according to Speedwell weather data. Cooler weather year-on-year encouraged the country to add around 2.7GW more thermal generation capacity for the 18-24 October period on the week, but coal-fired availability increased by only 30MW as recent strength in spot coal prices continued to erode the fuel's competitive advantage over utilities' oil-linked LNG term supply.

Australia's South32 says Q1 met coal output drops 15%, sees prices rising Australian diversified miner South32 Ltd (S32. AX) said higher metallurgical coal prices would help offset a 15% drop in first-quarter production of the steelmaking material. A power crunch, environmental curbs and a debt crisis gripping China's property market

has clouded the outlook for the steelmaking material, sending prices higher. However, supply outside China has so far remained inelastic to the sharp price increases. "While the lower total volumes are expected to adversely impact Operating unit costs, realised prices will benefit due to fewer sales of the lower-priced product and the current strong metallurgical coal market," the company said. Production of metallurgical coal fell to 1.6 million tonnes (Mt) in the three months to Sept. 30 from 1.9 Mt a year earlier, missing RBC's estimate of 1.7 Mt. Metallurgical coal sales, however, rose 1% to 1.5 Mt.

S. Africa's Banks Say They Can't Cut off Funding for Coal Just Yet South African banks say they have to keep funding at least some coal projects for now because an immediate halt would put huge political and economic strains on a nation that relies on the most polluting of fossil fuels. The top four banks have started to withdraw financing, with Nedbank and FirstRand setting deadlines of 2025 and 2026 respectively to end funding for new thermal coal mines. Both have stopped lending to new coal-fired power plants. But the banks still finance existing coal mines and power stations. Absa and Standard Bank, South Africa's other two leading lenders, have left the door open to funding some new coal mining or power projects.

plants this year as a result of significantly higher natural gas prices and relatively stable coal prices. This year, 2021, will yield the first yearover-year increase in coal generation in the US since 2014. Coal and natural gas have been the two largest sources of electricity generation in the US. In many areas of the country, these two fuels compete to supply electricity based on their relative costs. US natural gas prices have been more volatile than coal prices, so the cost of natural gas often determines the relative share of generation provided by natural gas and coal. The overall decline in US electricity demand in 2020 and record-low natural gas prices led coal plants to significantly reduce the percentage of time that they generated power. In 2020, the utilisation rate (known as the capacity factor) of US coal-fired generators averaged 40%. Before 2010, coal capacity factors routinely averaged 70% or more. This year’s higher natural gas prices have increased the average coal capacity factor to about 51%, which is almost the 2018 average. .

US: Union Pacific coal volumes climb to two-year high in Q3: company Union Pacific's third-quarter coal and renewable volumes rose 8.9% year on year to a twoyear high on strong domestic coal demand, high natural gas prices, and an increase in coal exports, the railroad said

Although coal-related lending makes up a small portion of their loan portfolios, the financing is vital for keeping the lights on and tens of thousands of people employed in Africa's most industrialised economy.

The Omaha, Nebraska-based company said in its Q3 earnings statement that coal and renewable carloads totaled 232,000 in Q3, up 17.2% from the prior quarter and up 8.9% from the year-ago quarter. It was the highest quarterly volume since 271,000 in Q3 2019.

US coal-fired electricity generation on the rise in 2021

Generated revenues from the coal and renewables segment also climbed to a two-year high of $531 million in Q3, up from $423 million in Q2 and $387 million in the year-ago quarter.

The US electric power sector has been generating more electricity from coal-fired power

CCAI Monthly Newsletter October 2021

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The average revenue per unit for coal and renewables rose to $2,298/car in Q3, up from $2,134/car in Q2 and $1,820/car in the yearago quarter. The railroad no longer reports stand-alone volume and revenue metrics for its coal segment.

US Coal production is increasing in Montana and Wyoming as demand in the Asia Pacific ratchets up Coming off a volatile year in 2020, which saw mine closures and furloughs, Montana’s mining industry has turned out 20.3 million tons of coal in the first nine months of 2021. That’s a 2% increase of 524,000 tons over 2020, when the state had two more mines operating than it does currently. Production numbers through Oct. 2 are reported by the U.S. Energy Information Administration. Wyoming production is up 11.8 million tons compared to the first nine months of 2020, a 7% increase. Exports have been a main driver in Montana coal production, explained Steve Read, who manages coal sales for Signal Peak. Exports are the mine’s bread and butter. If there’s coal on a train from Signal Peak, it’s on its way to British Columbia for shipping and most likely bound for Japan. Exports of U.S. steam coal, the kind used in power plants, were up 46.9% through the first half of the year compared to the first six months of 2020. It’s the kind of coal Montana and Wyoming produce.

Russia to export more coal to beat shortage in India Russia’s Energy Ministry signed an agreement this week with India’s Steel Industry Ministry to increase Russian coking coal supply to India up to 40 million tonnes per year. The deal was inked at the Russian Energy Week

28 | CCAI Monthly Newsletter October 2021

Forum, held from October 13 to 15 in Moscow, reported the Russian media. According to Russian Energy Minister Nikolay Shulginov, Russia currently supplies around 80 lakh tonnes of all types of coal to India. The agreement is also meant to stimulate enterprises in Russia and India in the development of coal deposits, the development of coal logistics and infrastructure, the promotion of R&D in production, as well as education and training for the coal industry. The world’s third-largest coal importer, India, is currently struggling with coal shortages. Coal accounts for around 70 per cent of the nation’s electricity generation. Most of India’s coal-fired power plants have critically low levels of inventory amid growing electricity demand.

Bulgaria will not exit coal until 2040 The Bulgarian government has announced that it will not phase out coal until 2040. This makes it the twentieth European country to announce a coal exit date but like other nations such as Germany (2038) and Montenegro (2035), the date is considered far too long away to have the required impacts needed for climate change. That’s the view of green campaigners such as Greenpeace Bulgaria and Europe Beyond Coal, which have already pointed to the fact the Bulgarian coal industry is on the brink of collapse and out of date. Reportedly, an estimated €1 billion (£845m) of upgrades are required to align the country’s coal industry with EU emission standards, with its largest coal power plant in more than €760 million (£642m) of debt. Bulgaria’s date for a coal exit puts it far behind its neighbours – with Greece, North Macedonia and Romania having all announced dates between 2025 and 2032..

MONTHLY SUMMARY OF IMPORTED COAL & PETCOKE Indicative Imported Coal Price COAL South Africa South Africa Australia Indonesia Indonesia

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

Monthly Price - FOB USD 209.75 USD 170.40 USD 156.88 USD 186.06 USD 141.48

Monthly Price- FOB INR 15740 INR 12787 INR 11773 INR 13963 INR 10617

Monthly Change (USD) 45.92 37.83 48.85 66.15 55.31

Indicative Pet Coke Price PET COKE

Sulphur

Price

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

-5% + 8.5%

INR 16360 INR 16509 ($220)

Monthly Change ($) INR 1508.80 51.40

USA (CIF)

- 6.5%

INR 17109 ($228)

46.60

Exchange Rate

Change (Monthly)

INR 75.04

1.36

Indicative Coking Coal Price Current Month Monthly Change (USD)

Premium Low Vol FOB CFR China 398.97 611.35 53.17

76.17

HCC 64 MID Vol Semi Soft Low Vol PCI Mid Tier PCI MET COKE 62% CSR FOB Aus CFR China FOB Aus FOB Aus FOB Aus CFR India FOB N China 334.85 537.94 273.50 275.56 274.56 615.75 644.50 37.45

63.94

South African Coal News: * South Africa is seeking cheap finance for more than 400 billion rand (27.6 billion USD) of electricity infrastructure as part of its plans to move away from coal. Through a funding facility backed by rich nations and development finance institutions, South Africa hopes to build more than 180 billion rand of cleaner power generation, 120 billion rand of transmission equipment as well as substations, transformers and distribution technology to endorse a greener future for the country. * The coal production and transport in South Africa’s Richard’s Bay terminal may face a possible impact amid more transport woes in the country. Though South African transport company Transnet had not specified the impact on commodity exports when it declared

30 | CCAI Monthly Newsletter October 2021

49.58

42.91

95.45

36.40

force majeure at the Richards Bay bulk terminal. Anglo American spin-off, thermal coal miner Thungela Resources was last week forced to cut production guidance due to issues with Transnet's freight rail network, which has been beset by incidents of theft and vandalism. * South Africa must manage its transition away from coal-fired power generation systematically and not rush a switch to renewable energy sources, Mining and Energy Minister Gwede Mantashe said. The minister pointed to China's current energy crisis as an example of what could go wrong if a transition is attempted too fast. South Africa aims to cut coal's share of the energy mix to less than 60% by 2030 from around 75% now while increasing the share of renewable energy. * The Energy Minister of South Africa said that rich nations shouldn’t force South Africa to ban

new coal-power projects and impose other conditions as a requirement for funding to help reduce its environmental footprint, Gwede Mantashe last month skipped a meeting with climate envoys from the U.K., U.S., Germany, France and the European Union, where an initial amount of almost $5 billion in concessional loans and grants was discussed.

Australian Coal News:

* An estimated one million tonnes of Australian coal have stayed in bonded warehouses along China's coast for months, uncleared by customs after Beijing's unofficial ban last October. However, China is releasing Australian coal from bonded storage, despite a nearly year-long unofficial import ban on the fuel, as it scrambles to ease a national power crunch stemming from a coal shortage. * Australia has approved its third coal mine extension in the past month in the lead up to a global climate summit next month even as its high court ruled the government must consider the harm of climate change when approving new mines and extensions. Meanwhile, Australia is setting up a government-run A$250 billion ($180 billion) lending facility for the country's coal industry in return for supporting a net zero carbon emissions target for 2050. * China’s ban on Australian coal imports has proved to be a boon for Sydney-listed Coronado Global Resources, one of the world’s top producers of metallurgical coal. While the company’s giant Curragh mine in Australia is currently locked out of Asia’s biggest market due to a diplomatic spat between Beijing and Canberra, Coronado is more than making up for that with shipments to the US. India has become the top destination for the company’s coal from Curragh in Queensland state, with solid demand also coming from across Asia. * Australian coal mining firms are turning to Asia to fund growth options. The country’s thermal and metallurgical coal producer Whitehaven Coal is confident that it will be able to raise up to A$1bn in Asian bonds to support its growth plans, yet fellow producer TerraCom has

been forced to accept backup financing for its operations after it failed to secure new sources of debt to sustain its existing operations.

Indonesian Coal News:

* The world’s largest thermal coal exporter, Indonesia, has set its October coal reference price at a record high of USD 161.63/t, driven by weather-related production disruptions and still rising regional demand, the energy ministry data has revealed. * Coal shipped from Indonesia — China’s biggest supplier — jumped sharply last week. Medium quality Indonesian coal was changing hands at a record high of $166.5 a tonne. Provinces including Jilin have in recent days called for increased imports of coal from Indonesia. * Indonesia is likely to miss its coal output target this year an Energy Ministry official said. Heavy rains in recent weeks are slowing mine and port operations in Indonesia. Coal production is expected to be 610-million tonnes in 2021, which is 2.4% below the ministry's target of 625 million tonnes. In January to September, coal production was around 450 million tonnes making up for 72% of the annual target. * Indonesia is now overwhelmingly China’s biggest overseas supplier of coal, with shipments hitting a record last month after Beijing loosened curbs on imports to tackle its power crisis. Cargoes of coking, thermal and brown coal from the Southeast Asian nation surpassed 21 million tonnes in September, from just over 17 million tonnes in August, and now account for about two-thirds of China’s total imports, according to customs data.

US Coal News:

* The price of coal has exploded this year as worldwide demand has surged, but mining operations in the United States are struggling to keep up. The price of central Appalachia coal averaged $73.25 per short ton, according to the U.S. Energy Information Administration’s most recent report. That is an increase of $2.20 from the week before, $7.45 from a month ago, and a 35% increase from earlier this year. CCAI Monthly Newsletter October 2021

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* Just when the world is clamouring for more coal, US suppliers are facing a shortage of miners. The number of coal miners in the US has been sliding for years, and is down about 8.6% from before the pandemic. People who have left are reluctant to come back and young people are even more wary about taking a job in an industry that they have consistently been told has no future given the global push toward clean energy. * US coking coal prices stayed firm this week, supported by the lack of spot availability for the rest of the fourth quarter, with loading dates for fresh spot offers shifting into January 2022 or later. low-volatile coking coal price has gone up on certain days of the week while the highvolatile coal price has also edged up by nearly $2.50/t reflecting increased supplier confidence to offer $400/t and above for spot availability. * Coal-fired electricity generation in the United States is expected to be higher this year compared to 2020 due to soaring natural gas prices and relatively stable coal prices, the U.S. Energy Information Administration (EIA) said in a statement. Coal production in the US has gone up significantly since last year and is expected to continue in the same trend even as thermal coal prices across the globe are skyrocketing.

Pet Coke News: * Petcoke Price in the US has gone up significantly in September following the cyclone. The price hike was also supported by limited green anode coke availability. Meanwhile, exports of US petroleum coke rose 19.2% week on week to 395,635 mt. Panama was the top destination as it is set to receive the most US petcoke shipments followed by Japan and South Korea. * Indian petcoke demand has gone up as alternative fuels became more expensive even as prices of seaborne petcoke have remained high. The US petcoke price was indicated to be nearly $220/mt while new offers for

32 | CCAI Monthly Newsletter October 2021

India-delivered petcoke is $260/mt. Cement companies, among the largest importers of petcoke, are expected to import the product as the Indian government has directed coal supplies towards power plants due to high demand of the energy sector.

Shipping Update: * Coal-starved power stations received another shock as the capesize index, the main dry bulk sea freight index of The Baltic Exchange sailed past the 10,000 points mark this week, a first in more than 13 years, making the rates for shipping dry bulk commodities such as coal costlier. Experts say that the upward trend will continue for some time. The overall index rose 4.4 per cent to 5,647 points. * Shipping container prices may be leveling off after a year of worsening service, threats of regulation, and complaints from retailers as prices skyrocketed. The cost of a 40-foot container declined modestly from $10,377 the previous week to 10,360 last week, or 0.2%, according to the World Container Index by Drewry, a London-based maritime research firm that tracks East-West routes. * Union Pacific’s third-quarter coal and renewable volumes rose 8.9% year on year to a two-year high on strong domestic coal demand, high natural gas prices, and an increase in coal exports. The Omaha, Nebraska-based company said in its Q3 earnings statement that coal and renewable carloads totaled 232,000 in Q3, up 17.2% from the prior quarter and up 8.9% from the year-ago quarter. * About 40% of all shipping containers entering the U.S. come through the Los Angeles and Long Beach ports where the logjam caused by long lines of cargo containers waiting to be unloaded, has interrupted the global supply chain and last week prompted the Biden administration to allow the port complex to operate 24 hours a day to try to get goods unloaded and out to consumers.

PRODUCTION AND OFFTAKE PERFORMANCE OF CIL AND SUBSIDIARY COMPANIES COAL PRODUCTION (Figs in Mill Te) OCT'21

SUB CO.

APR'20 - OCT'21

ACTUAL THIS YEAR

ACTUAL SAME PERIOD LAST YEAR

% GROWTH

ECL

1.80

3.40

-46.70

16.10

21.50

-24.80

BCCL

2.30

2.20

6.60

14.70

12.30

19.80

% ACTUAL GROWTH THIS YEAR

CCL

5.30

5.80

-9.60

30.60

26.10

17.40

NCL

10.90

10.20

6.90

64.30

63.70

0.90

WCL

4.60

3.50

29.80

23.00

20.00

15.10

SECL

10.30

10.60

-2.90

65.40

64.30

1.74

MCL

14.70

11.10

32.20

85.40

74.90

13.90

0.00

299.60

282.80

NEC CIL

0.00 49.80

46.80

6.40

5.90

OFFTAKE (Figs in Mill Te) OCT'21

SUB CO.

APR'20 -OCT'21

ACTUAL THIS YEAR

ACTUAL SAME PERIOD LAST YEAR

ECL

2.30

3.50

-34.30

20.90

22.70

-7.70

BCCL

2.40

2.30

4.10

17.90

12.70

41.10

% ACTUAL GROWTH THIS YEAR

ACTUAL SAME PERIOD LAST YEAR

% GROWTH

CCL

5.80

6.10

-3.80

39.60

33.00

19.80

NCL

11.40

10.00

14.20

68.90

59.90

15.00

WCL

5.60

4.60

20.50

34.20

23.70

44.50

SECL

12.80

11.90

7.70

85.60

73.60

16.30

MCL

16.40

12.40

32.80

97.30

80.20

21.40

0.00

0.10

56.70

50.70

11.80

364.40

305.80

NEC CIL

0.00

19.20

CCAI Monthly Newsletter October 2021

| 33

Overall Domestic Coal Scenario Coal Production (in MT) Company CIL SCCL

September, 2021 40.65 4.54

September, 2020 40.48 3.34

% Growth 0.4% 36.2%

April- September, 2021 249.81 29.94

April- September, 2020 236.02 18.13

% Growth 5.8% 65.2%

Overall Offtake (in MT) Company

September, 2021

September, 2020

% Growth

April- September, 2021

April- September, 2020

% Growth

CIL SCCL

48.30 4.58

46.65 3.68

3.5% 24.6%

307.63 31.29

255.13 17.86

20.6% 75.2%

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

September, 2021

September, 2020

% Growth

April- September, 2021

April- September, 2020

% Growth

CIL SCCL

40.38 3.77

36.71 3.12

10.0% 20.8%

245.58 25.93

198.59 15.15

23.7% 71.1%

Company

Coal Qty. Allocated September, 2021

Coal Qty. Allocated September, 2020

Increase over notified price

Coal Qty. Allocated April- September, 2021

Coal Qty. Allocated April- September, 2020

Increase over notified price

CIL

2.88

2.40

133%

15.11

16.63

59%

Spot E-auction of Coal (in MT)

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

Coal Qty. Allocated September, 2021

Coal Qty. Allocated September, 2020

Increase over notified price

Coal Qty. Allocated AprilSeptember, 2021

Coal Qty. Allocated AprilSeptember, 2020

Increase over notified price

CIL

0.00

2.03

17.34

10.07

22%

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

Coal Qty. Allocated September, 2021

Coal Qty. Allocated September, 2020

Increase over notified price

Coal Qty. Allocated AprilSeptember, 2021

Coal Qty. Allocated AprilSeptember, 2020

Increase over notified price

CIL

0.41

0.00

137%

20.16

13.44

28%

Special Spot E-auction (in MT) Company

Coal Qty. Allocated September, 2021

Coal Qty. Allocated September, 2020

Increase over notified price

Coal Qty. Allocated April- September, 2021

Coal Qty. Allocated April- September, 2020

Increase over notified price

CIL

0.92

0.20

223%

2.66

2.01

81%

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

Coal Qty. Allocated September, 2021 0.00

Coal Qty. Allocated September, 2020 -

34 | CCAI Monthly Newsletter October 2021

Increase over notified price -

Coal Qty. Allocated April- September, 2021 2.28

Coal Qty. Allocated April- September, 2020 -

Increase over notified price 44%

CCAI Monthly Newsletter October 2021

| 35

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CCAI Newsletter October-21

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Monthly Summary Of Imported Coal &Petcoke

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