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Domestic
COAL
India’s coal production hits fresh milestone of 382 mt in H1FY23
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India’s coal production for first half of FY23 reached a new milestone of 382 million tonne (mt), according to CareEdge Research. Domestic coal production has crossed 380 million tonne (MT) during H1FY23 (April–September), registering around 21% y-o-y growth over the same period in FY22, on account of a low base. This increased production by Captives has helped in meeting the demand-supply gap in the domestic market. The contribution of Captives in total domestic coal production during H1FY23 has increased to around 14% from an earlier 11% during H1FY22," the report said. The coal despatch to the power sector, which accounts for the largest coal despatch has increased by around 17% y-o-y. As of August 2022, the energy deficit in the country has come down to 0.4% (465 million units) as against 0.5% (638 million units) in August 2021. While coal production has increased, electricity requirement has declined owing to good monsoon during the months of June - August. CareEdge Research estimates the coal production to continue to rise and reach around 500 MT in the second half of FY23
Coal import to be stopped by 2024: PralhadJoshi
Coal minister Pralhad Joshi said that the import of dry fuel which has declined considerably will be stopped by 2024. Joshi also complemented CAG's office for bringing out the first ever compendium of asset account on mineral assets of the country. The minister said that the report presents comprehensive picture of the mineral resources spread across different states in the country.He said that the compendium will help in further strengthening sustainable mining process which is of great importance for ecology and future generation. Collating the information of the state asset accounts, the government accounting standards advisory board has prepared the compendium of asset accounts on mineral and energy resources in states.
Union Minister of Coal, Mines and Parliamentary Affairs Pralhad Joshi has called upon public sector undertakings (PSUs) to compete with private sector coal mine auction and early production. Addressing the National Coal Conclave and Exhibition, the minister said that despite unprecedented increase in global prices, Coal India Ltd (CIL) has not raised domestic coal prices. The state-owned miner has stepped up production substantially in recent past and managed to overcome coal shortage faced by thermal power plants. Joshi said that 64 coal mines have been successfully auctioned so far under commercial auctioning launched in 2020. “All efforts are in full swing to stop import of thermal coal by 2024 and incentives are being given for early production of coal under commercial auctioning. Captive mines are likely to produce 125-million-ton (MT) coal this year."
Amid coal imports, government says production to touch 900 million tonnes this fiscal
Even as the government has been forced to import 8 million tonnes of coal for this fiscal, Minister for Coal Pralhad Joshi said that India's dry fuel production will touch 900 million tonnes in the current fiscal. The target is ambitious, considering the fact that CIL's production in 2021-22 was 622 million tonnes.However what is more significant is the fact that owing to a huge spike in demand, for the first time ever in its history, CIL - which is the largest producer of dry fuel in the country - has been forced to import the commodity. In June, CIL had issued three tenders for importing 2.4 million tonnes and 3 million tonnes each of coal, respectively.While the tender for importing 2.4 miliontonnes of coal was for the July-September period of this fiscal, the other two tenders for seeking 6 million tonnes of dry fuel were till June 2023.Till now, CIL has imported 300,000 tonnes of coal, sources said.
CIL firms up Rs 11k-crore investment for eco friendly coal handling
To strengthen its network of eco-friendly coal transportation, Coal India Limited (CIL) has initiated 17 more first mile connectivity (FMC) projects under phase-III at an estimated cost of Rs 11,000 crore. These projects have been planned for a loading capacity of 317 million tonne per annum (MTPA). The company is preparing to float tenders for the latest projects by FY 2025. Commissioning of the projects would be in two years thereon by FY 2027. These projects are in addition to existing 44 such projects that the company is actively pursuing under two phases, a CIL executive said. Catalyzed by positive results shown by a pilot study, in two of its open cast mines, on environmental and economic benefits
of loading through FMC projects, CIL is pursuing this mode actively. Results have indicated significant reduction in particulate matter, CO2 and other gaseous emissions compared to despatch through rail sidings. Of the identified 17 projects MCL and CCL would put up 6 each followed by SECL with 3 projects. WCL and BCCL would have a solitary project each
India's 99 new coal mine projects conflict with net zero by 2070: GEM
A temporary coal shortage has emboldened the Indian government to press ahead with plans to develop 99 new coal projects with production of 427 million tonnes per year (mtpa), a briefing by Global Energy Monitor (GEM) said. Land for new coal projects continues to be auctioned despite the government's pledge to achieve net zero emissions by 2070 and despite the fact that 36 per cent of capacity at operating mines goes unused. Key findings include underutilized capacity at India's existing mines (433 mtpa) is actually greater than projected capacity from India's 99 new coal projects (427 mtpa), demonstrating that these new projects are unneeded. India's 427 mtpa of planned new coal mine capacity place it second in the world after China with 596 mtpa. In some major mining regions, like Jharkhand and Odisha, the industry has over 100 million tonnes in unused capacity at active mine sites, amounting to over 40 per cent of unused mine capacity in those states.
Import duty removal hurting business, say Met Coke producers
Indian manufacturers of metallurgical coke, a key raw material for iron and steel manufacturing, are crying foul over the removal of import duty on the product as it makes them less competitive with overseas players. The Indian Government removed the 5% import duty on coke in May this year to reduce the input costs for steelmakers in its wider efforts to arrest steel prices and the resultant domestic inflation. A 2.5% import duty on coking coal, which is processed to make metallurgical coke, was also removed.
The Indian Metallurgical Coke Manufacturers’ Association (IMCOM), a lobby for the industry, said that while the move reduced their input cost by 2.5%, it suppressed their selling price by a larger quantum of 5% given the competition from imports.Coke manufacturers still have to pay a cess of Rs 400 per tonne on the import of coking coal, which is not applicable on the direct import of coke, further tipping the balance in the favour of overseas coke makers, the lobby group group said
‘Govt committed to 100 MT gasification by 2030’
Union Minister of Coal and Mines Prahlad Joshi has stated that the Centre is committed to gasification of 100 million tonnes of coal by 2030 for quality power generation. A memorandum of understanding was signed recently for the purpose wherein 50% rebate would also be given in commercial coal mining for it and the Centre had earmarked Rs. 6,000 crore in the budget for performance-linked incentive scheme. The government was planning to showcase it as a success story, he said.
On the road for coal and energy with sustainability, he said coal imports were coming down for the last six-seven years and the production was going up. He explained that from 572 million tonnes of production in 201415, it had reached 817 MT in 2021-22 and it was expected to be 900 MT for 2022-23.
RAILWAYS & SHIPPING
Coal Ministry Takes up 68 First Mile Connectivity Projects for Seamless Evacuation of Coal
To strengthen India’s energy security and to realiseAtmaNirbhar Bharat by replacing imported coal with domestically mined coal, the Ministry of Coal has set a target to produce 1.3 billion ton (BT) in FY25 and 1.5 BT by FY30. The development of coal transportation that is costefficient, fast and environmentally friendly is an important goal of the country. Ministry of Coal has formulated a strategy to develop an integrated approach for eliminating road transportation of coal in mines and has taken steps to upgrade mechanized coal transportation and loading system under 'First Mile Connectivity' projects. Coal Handling Plants (CHPs) and SILOs with Rapid Loading Systems will have benefits like crushing, sizing of coal, and speedy computer-aided loading. Ministry of Coal has undertaken 51 first mile connectivity (FMC) projects (44 – CIL, 4- SCCL & 3 – NLCIL) of 522 million ton per annum (MTPA) capacity, out of which 8 Projects (6CIL & 2-SCCL) of 95.5 MTPA capacity have been commissioned. These 51 projects will cost Rs 18000 crores and all of them will be commissioned by FY2025. Since CIL has taken up new projects in production of coal, it has been proposed to take up additional 17 FMC projects with capacity 317 MT to be implemented during FY20-27.
With focus on freight, railways plans 90,000 wagons additions by 2025
Indian Railways plans to add 90,000 wagons by 2025, a move that will provide a fillip to the domestic wagon manufacturing industry, a report by rating agency Icra said. “With the commissioning of dedicated freight corridors, along with a target to increase the share of freight transport through the railways, the Indian Railways plans to add 90,000 wagons," the report said. According to an Icra study on the rail infrastructure sector, the combined manufacturing capacity of rail wagons in India is estimated at 35,000–40,000 units per annum, which has faced challenges related to the underutilisation of capacities in the past. This will provide ample orders for the wagon manufacturers, resulting in an improvement in the overall capacity utilisation to 70-80% in the medium term from a modest sub 40% in the past. The bulk procurement of wagons is expected to provide a cost advantage to the government and better revenue visibility to the wagon manufacturers.
Indian Railways weighs stricter wagon-booking rules
The Indian Railways is proposing to tighten wagon booking norms for freight movement, in a crackdown against 'indent mafia'. An indent is a booking demand raised by a customer seeking to use the railway wagons for transporting commodities. The Railways is now proposing to penalise those furnishing false information. It had earlier made submission of Letter of Credit (LC) details mandatory for placing indent for goods traffic for Bangladesh. "It was brought to our notice that indents were placed well in advance to corner wagon availability. These 'indent mafia' of sorts would then sublet the wagons, at a premium, to exporters desperately seeking to move their goods to Bangladesh," a senior government official said. The move comes following representations from exporters about large pendency of indents with the railways for Bangladesh. The ministry of commerce and industry had also taken up the issue and sought a review of the policy.
Cargo handled at India’s major ports grew 14.6% in September on a year-on-year basis to 61.7 million tonnes. The government data released by the ministry of ports, shipping and waterways showed that coastal cargo – from an Indian port to another – handled at major ports during September increased by 11.5% to 13.64 million tonnes from the previous year. The overseas cargo handled at major ports also increased by 16% to 48 million tonnes from last year. In the release, the ministry said, “Maritime transport activity is driven by developments in the world economy, viz, growth in world output and trade. Thus, volume of seaborne cargo traffic handled by ports is mainly shaped by the levels and changes in both the global and domestic activity. The maximum cargo traffic in September came from petroleum products, thermal coal, iron ore, LPG/LNG, edible oil, fertilizer, iron & steel, food grains, sugar and others
STEEL
India's steel industry now 2nd biggest, target is to double crude steel output in 10 years: PM
Prime Minister NarendraModihas said India has set a target to double the crude steel production capacity from 154 million tonnes per annum now to 300 million tonnes per annum in the next 9 to 10 years in an order to boost indigenous capabilities. In his virtual address as the chief guest at the "bhoomipujan" of expansion of ArcelorMittal Nippon Steel India's flagship plant at Hazira in Gujarat's Surat district, Modi said in the past, India had to import high grade steel for the defence sector, but scenario has changed now. Now, however, steel used in making 'INS Vikrant' (first indigenous aircraft carrier) was made in India, said the prime minister.Due to everybody's efforts in the last eight years, the Indian steel industry has become the second biggest in the world, he said
Steel exports slump in September
Engineering exports fell 10.85 per cent in September to $8.4 billion because of a fall in demand from the EU and China and the imposition of duties on steel. Engineering exports to the EU registered a 6.3 per cent year-on-year decline in September to $1.611 billion, while shipments to China slumped 64.5 per cent to $202.61 million. Germany, Italy, Belgium and Spain were among the countries in Europe which registered a decline in imports. “This decline can be majorly explained by the falling steel exports — in September alone exports of iron and steel came down more than 60 per cent and in cumulative terms, the drop was more than 30 per cent,” EEPC India chairman Arun Kumar Garodia said. He said this decline had been a direct result of the 15 per cent export duty on iron and steel products applicable since May 21, 2022
To maintain higher capacity utilisation, exports are necessary for local steel players expanding their capacities, as demand is not directly proportional to production, according to a top industry executive. “Since expansion happens… there will be a certain stage where you necessarily will have to export, if we have to be on high capacity utilisation,” DilipOommen, CEO of ArcelorMittal Nippon Steel (AMNS) India
told PTI. His comments assume significance as steel players are looking up to the government for relief in the form of roll back of the duties levied on steel exports. On May 21, the government hiked the duty on exports of iron ore by up to 50 per cent and for a few steel intermediaries to 15 per cent. In line with the government’s 300 MT steel making capacity target, other steel players like Tata Steel, JSW Steel, SAIL and JSPL are also expanding their capacities to meet the goal. AMNS India has commenced aRs 60,000-crore expansion project to scale up its Hazira plant capacity to 15 million tonne (MT) from 9 MT at present. The project will add another 6 MT capacity and suddenly one can not increase its market share proportionally, the CEO said. “Till then you need to export. I imagine the government of India will take care of the export duty on steel,” Oommen, who is also the President of the apex Indian Steel Association (ISA), said
CEMENT
Cement makers’ net slips on rising fuel & power costs, falling demand in Sept quarter
Costlier fuel and power supply along with a decline demand hit the cement sector in the September quarter, with manufacturers posting lower net profit and some even slipping into losses. With demand picking up, however, as construction activity resumes after the monsoon, the next two quarters are expected to be good for the sector. “The second quarter is a traditionally weak quarter due to the rains, and this time construction activities were also impacted due to the extended monsoon. Further, the rise in power and fuel costs, which contributes to about 25% of the total costs, also played its part. So, both the levers impacted the sector,” NileshNarwekar, CEO of JSW Cement said. The fall in demand is generally about 15-20% in Q2, but this time it was “much higher”, another sectoral expert said.While companies such as Ambuja Cements, UltraTech Cement and Shree Cement posted lower net profits, ACC posted a net loss during the second quarter Operating and net profit for cement producers fell sharply year-on-year in the second quarter, owing primarily to higher power and fuel costs and only a marginal increase in prices and realisations. Imported coal (FOB Australia) and domestic petcoke prices have risen by over 125% and 35% on-year, respectively, in Q2, leading to power and fuel costs surging through the roof
JSW Cement to invest Rs 3,200 crore to set up 5 MTPA capacity in central India
JSW Cement said it will invest more than Rs 3,200 crore to set up two greenfield cement manufacturing facilities having a total manufacturing capacity of 5 million tonnes per annum in central India. The company, part of the USD 22 billion JSW Group, will set up an integrated greenfield cement manufacturing facility in Madhya Pradesh as well as a split grinding unit in Uttar Pradesh. "The combined cement capacity across both these units will be 5 MTPA," the company said in a statement.It plans to invest more than Rs 3,200 crore to set up the greenfield cement manufacturing facilities. The proposed investment will be for an integrated cement plant with 2.5 MTPA (Million Tonnes Per Annum) clinker capacity, 2.5 MTPA grinding capacity, 15 MW Waste Heat Recovery System, a modern residential colony in Madhya Pradesh and a 2.5 MTPA grinding unit in Uttar Pradesh.
