CCAI Newsletter September-21

September 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. 06

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CCAI Monthly Newsletter September 2021 1 Published on : 28.09.2021

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From the Editor’s Desk

Just when India’s economy has been picking up pace after a deadly second wave of pandemic and everyone feel s we have got the better of the calamity, a new crisis has arrived in the countr y’s horizon. More than half of Ind ia’s 135 coalfired power plants are on the brink as their coal stocks run crit ical ly low. In a country where nearly 70% of the electricity is still genera ted usin g coal, this is a major cause for concern as it threatens to derail Ind ia's post-pandemic economic recovery.

India is the world's second larg est importer of coal and also home to the four th largest coal reserves in the world. However, an already stre tched domestic supply in recent months and an all time high global coal pric es hav e caused the coal stock at the power plan ts to deplete alarmingly whi ch put s Ind ia on the verge of an unprecedented power crisis. However, nationa l min er Coa l India Limited's offtake has improv ed substantially in August-Sep tember as the dry spell has reached India after prolonged monsoon.

Meanwhile, the shortage of dry fuel has triggered panic in non -power industries like aluminum, steel, cement and paper and many industries espe cially dependent on Rail mode due to longer dist ance from the mines are on the verge of closure.

Coal despatch to the Non-po wer Sector consumers by rail mo de has come to a virtual standstill leaving the big units and plants located at faroff loca tions from the collieries, reeling for fuel . Country’s Aluminum sector, whi ch has received a huge shot in the arm wit h investments of Rs 1.2 lakh crore to double the domestic production capacit y to 4.1 mtpa, has also been significantly affected by the lack of coal supply.

In order to overcome the cris is, some bold and consequent ial moves are required from the Government as stat ed in its recently released age nda document for the ongoing fiscal, which bro adly focuses on areas like refo rms , transition and sustainability of the coal sect or. The Ministry of Coal is also set to begin the auction process for 40 new blocks for commercial mining alon gwi th blocks rolled over from the previou s tranche.

To boost production and disp atch levels Coal India Limited has estimated a capital expenditure of about 17, 000 crore for FY22 and env isages to spend more in the coming years.

The company’s capex saw a two fold increase to 1,840 crore during the first quarter of FY22, compared to the sam e quarter last year as it continued to step up investments in evacua tion infr astr ucture, land acquisition and procureme nt of heavy equipment.

The Maharatna Company had cleared 36 mining projects in FY21 with a sanctioned capacity of 332.77 million tonnes (mt) and incr eme ntal capacity of 220.12 mt. These projects wou ld add substantially to future pro duc tion growth.

In a silver lining to the coal sect or, Coal India’s overdue from gen cos have come down to Rs 16,840 crore at the end of August from Rs 22, 000 cror e at the star t of the fiscal clocking abo ve 65% recovery in the last five mo nth s.

As the relentless monsoon is finally over and power demand is set to reduce a tad with the winter approachin g, it is expected that the gloo m of uncertainty over the country’s coal sector will also be lifted and the cou ntr y will witness a new sunrise of prosperity.

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Content Vol. L No. 06 September 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

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Consumers' Page

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Power

18

Domestic

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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

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Production And Offtake Performance Of Cil And Subsidiary Companies

34 Overall Domestic Coal Scenario

CCAI Monthly Newsletter September 2021

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CONSUMERS’ PAGE Present Coal Scenario: Amid significant coal mismatch in coal demand and supply scenario affecting both Power and Non-power Sectors, national miner Coal India Limited’s production and offtake figures dwindled marginally in September compared to the previous month. Total production of CIL for the month was 40.70 MT, which was 0.4% higher than September’20.

For the period of April ’21 to September’21, CIL’s cumulative coal production has been 249.80 MT, more than 5% higher than the same period last year that was hit hard by the pandemic. Coal offtake by the Maharatna Company has also decreased marginally than August to 48.60 MT. However, the monthly offtake figure was marginally higher than September last year. Considering the period of April ’21 to September’21, CIL’s total offtake has been 307.7 MT, more than 50 MT more than the same period last year.

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Issues faced by both Power and NRS Consumers: 1. Request for refund of EMD for lapsed quantity from SECL mines for Road mode consumers: Both Power and NRS consumers procuring coal from Chhal, Dipka OC, Chirimiri, Bhatgaon, Kusmunda and other collieries of SECL by Road mode were unable to lift the entire quantity as per DO due to multiple reasons such as nonavailability of coal, unfavorable conditions for coal lifting and dispatch and frequent breakdown of weighbridges. This led to forfeiture of EMD for consumers procuring through different auctions like Exclusive, Special Forward and Spot e-Auctions.

As the reasons for non-lifting of coal are beyond the control of the consumers, request has been made to CIL and SECL to provide refund of forfeited EMD amounts against un-lifted quantity of coal.

Issues faced exclusively by Power Sector Consumers: 2. Submission by Power Sector Consumers for refund of GST amount alongwith reimbursement of idle freight on account of underloading: 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.

3. Submission regarding constant overloading of rakes from Spur sidings of Talcher Area and Sardega Mines of MCL: Power consumers have raised concern over continuous overloading of rakes from Talcher Spur sidings and Sardega mines of MCL since the last few months. Some of these consumers have to pay significant punitive charges amounting to crores of rupees to the Railways on account of overloading of rakes during August ’21. Also, rakes are detained for load adjustment for a long time.

Request has been made to MCL to ensure proper loading of rakes in order to eradicate the issue of overloading in future.

4. Submission regarding unusually higher grade of coal received by Power sector consumer as per 3rd Party analysis report from SECL: As per 3rd party analysis of a rake supplied to a Power Utility from SECL's Junadih Public-Silo during July ’21, the analyzed grade of coal was G7. However, the feeding mine of Junadih Public-Silo is Gevra OC, where the effective grade of Gevra OC is G11. Also, as per the grade/quality certificate issued by SECL for FY 2021-22, no mines in Korba region have G7 grade coal.

IT has been observed that in the process of coal quality assessment, most of the error creeps in during the sampling process but there are hardly any chances of error in the analysis of coal as it is being done through automatic bomb calorimeters. So it could be deduced that the abnormally higher grade found in the 3rd party analysis may be due to some error in the process of sample collection.

Request has been made to CSIR-CIMFER to review the sample collection process at loading end so that representative samples may be collected in a proper manner and such discrepancies may be avoided in the future..

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Issues faced exclusively

by Non-power Sector Consumers:

7. Submission for offering maximum quantity possible from CIL Subsidiaries for CPP and Others Subsector:

5. Soliciting extension of time gap of two weeks between the offer dates to commencement Tranche V NRS Linkage Auction for Cement Sub-sector:

As per the CIL Notification, NRS Linkage auction FSAs of Tranche-I of various sub-sectors will not be renewed after its initial term of five years. This may lead to discontinuation of supply for those consumers procuring coal under Tranche-I. However, the demand of coal is huge among Non-power consumers due to increased business activities.

As per the CIL notification, offer of cement auction will be uploaded by 6th September, 2021 and the auction will commence from 10th September, 2021. Ho0wever, the consumers from Cement sector have stated that such a short time between uploading of offer and commencement of auction is insufficient as it usually takes around 2 weeks to do a thorough review of the mines including physical verification for a long term commitment. Also, MSTC registration compliance with DSC and POA formalities take time.

Request has been made to the CIL and the concerned Subsidiaries including MCL, SECL, ECL and WCL to offer maximum quantity of coal possible under Tranche V NRS Linkage Auction for CPP and Others Sub-sectors, whose Linkage auction FSAs under the Tranche-I would expire in 2021 as well as those expiring till cutoff date (31.03.2022). .

Request has been made to CIL for providing at least two weeks of time between declaration of schedule and commencement of auction for the cement sub-sector.

8. Submission for rescheduling the dates of Tranche VII NRS Linkage Auction by Singareni Collieries Company Limited (SCCL) for Cement and CPP 6. Submission for increasing offer of Sub-sectors: coal from ECL, SECL, WCL and NCL It had been found that the dates for upcomin Tranche V NRS Linkage Auction for ing Tranche VII NRS Linkage Auction by SCCL for Cement Sub-sector on 20.09.2021 Cement Sub-sector: Assessment of the annual coal requirement of various cement manufacturers highlighted for the cement manufacturers from North Eastern India, the cumulative annual coal requirement stands at around 20 lakh MT. Also, coal requirement by Cement plants from rest of India is much higher than what was offered in the Tranche V NRS linkage auction.

Request has been made to CIL and Subsidiaries like ECL, SECL, WCL and NCL separately for offering more quantity in the upcoming linkage auctions and list of preferred mines from respective Subsidiaries were also mentioned for consideration

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and 21.09.2021 and for CPP Sub-sector on 22.09.2021 and 23.09.2021 were coinciding with the CIL Linkage auction dates for Cement Sub-sector.

Request has been made to SCCL to reschedule the date of Tranche VII NRS Linkage auction for Cement and CPP Sub-sectors after the CIL auction for Cement Sub-sector is concluded so that the NRS consumers may participate in both the auctions.

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9. Submission by NRS consumers for immediate requirement of Exclusive eAuctions across the Subsidiaries: The Non-regulated Sector has registered a steady recovery in the ongoing financial year (FY 202021) overcoming last year’s downturn. However, number of Exclusive e-Auctions held by various CIL Subsidiaries has reduced drastically and the quantities offered in those auctions are not sufficient to meet the present requirement of the NRS consumers. The offered quantity is also of comparatively lower grade and supplied via Road Mode, making it inconvenient for the big Industries and plants situated at a far-off location to procure coal seamlessly.

Due to non-commencement of Tranche V NRS Linkage Auction on time and high premium in Spot e-Auctions, the NRS consumers primarily rely on Exclusive e-Auctions for procurement.

Request has been made to MoC and CIL to hold Exclusive e-Auctions on a tri-monthly basis, offer coal as per the MSQ by Rail mode and normalise rake movement for regular supply to NRS consumers at the earliest.

10. 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 MoC and CIL 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 Nonpower 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 al-

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most no coal stock in order to save those plants from imminent shutdown.

11. Submission by NRS Consumers for immediate release of their BGs against terminated FSAs: Many NRS consumers have stated that their BGs have not been refunded even several months after termination of their FSAs. Request has been made to the concerned Subsidiary coal companies to immediately release the BGs to the NRS consumers whose FSAs have been terminated.

Issue Related to Railways: 12. Request for considering Actual Tare Weight instead of current practise of Stencilled Tare Weight during Weighment of Rakes: Tare weighment of empty wagons is not permitted by the Railways at present and designed tare weight is considered for calculation of net weight of coal loaded in the wagons. On the other hand, calculation of net weight of coal is done in the RR by considering the designed tare weight. The actual tare weight of rakes is considerably higher than the tare weight printed on the wagons due to various reasons including of repairing, weathering, deposition of coal dust and extraneous material etc. The tare difference leads to significant overcharging of freight and the consumers have to pay coal value for the quantity of coal not delivered to them.

Request has been made to the Railway Board so that empty may be measured in the in-motion weighbridges and this actual tare weight of the empty wagons measured in the real time basis may be considered for calculating the quantity of coal loaded in wagons. Also, Bi-directional weighment facility may be provided in the present inmotion weighbridges as per RDSO guidelines by replacing the older ones.

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POWER India is breaking all records on power demand front. Here is why India's power demand, a barometer of economic activity and progress, is growing at a historic pace in the current financial year. The trend, a result of a multitude of factors boosting industrial and residential load, is likely to continue for some time, say experts.

Power demand in the country usually grows in a range between 2 per cent and 7 per cent yearon-year. However, the massive lockdown imposed as a result of the coronavirus pandemic

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last year, pulled down electricity consumption to 6.6 per cent.

According to data sourced from Central Electricity Authority( CEA), the all India peak power demand in the period between April-August 2021 stood at 203,014 MW, as compared to 171,510 MW in the same period last year.

In the northern region, Uttar Pradesh recorded the highest power demand of 24,965 MW with the region's total demand at 73,461 MW. Next was Maharashtra from the western region with 25,653 MW of peak demand with the region's total demand at 60,966 MW.

R K Singh meets US Special Power ministry invokes RBI pact Presidential Envoy for Climate to recover Rs 30,087 crore dues John Kerry in Delhi from states Union Power and New & Renewable Energy Minister R K Singh has met US Special Presidential Envoy for Climate John Kerry here and discussed various issues related to climate change and energy transition.

India and the US launched the Climate Action and Finance Mobilisation Dialogue (CAFMD) under the India-US Climate and Clean Energy Agenda 2030 Partnership.

Kerry called on Singh and had a discussion on various matters related to climate change and energy transition. Later, the Kerry-led delegation deliberated on those issues with Singh and his top brass. The CAFMD is one the two main tracks of the US-India Agenda 2030 Partnership that President Joe Biden and Prime Minister Narendra Modi had announced at the Leaders Summit on Climate in April 2021.

There cannot be 'one-size-fits-all solution': India at UN high-level dialogue on energy Emphasising that energy transition has to be just, inclusive and equitable, India has stressed that there cannot be a "one-size-fits-all solution" as it underlined the importance of the need to be fully sensitive to the energy-mix and national circumstances of different countries.

In a video statement to the UN High Level Dialogue on Energy 2021 held recently on the sidelines of the 76th General Assembly session, Minister for Power and New and Renewable Energy R K Singh said India has set an ambitious target of 450 gigawatt (GW) of renewable energy capacity by 2030 and is all set to launch a National Hydrogen Energy Mission to scale up in a major way the use of green hydrogen toward decarbonisation of the economy.

Green hydrogen is created using renewable energy instead of fossil fuels. It has the potential to provide clean power for manufacturing, transportation, and the only byproduct is water.

Overdues of Central generation companies (gencos) have dropped by nearly a third to Rs 35,314 crore in August from Rs 49,780 crore a year after the power ministry invoked tripartite agreements with defaulting states and the RBI to recover outstanding amounts and asked power plants under its wings to snap supply to utilities that failed to pay their bills on time.

Under Raj Kumar Singh’s watch, the ministry has invoked tripartite agreements with Jharkhand, Karnataka and Tamil Nadu for recovery of combined overdues of Rs 30,087 crore, taking a politically non-partisan approach in tackling one of the banes of India’s power sector.

As of August 31, Jharkhand had an outstanding of Rs 3,292 crore. The ministry recovered Rs 714 crore by invoking the tripartite agreement and has served notice for recovery of Rs 1,126 crore. Karnataka discoms had an outstanding of Rs. 5,240 crore. Recovery notices have been issued for overdues of Rs 1,540 crore. Tamil Nadu discom had an outstanding of Rs 21,555 crore and notice for recovery of Rs 2,458 crore has been issued.

Tripartite agreements are a payment security mechanism for power supplied from Central gencos to states. It is signed by a state, the ministry and the RBI. In case a state discom fails to pay its bill, it becomes the state government’s liability. The ministry can then debit the amount from the state’s account with the RBI.

Power Ministry revises SHAKTI coal auction to improve Coal supply In order to make more coal available to power plants that do not have any power purchase agreement (PPA), the union power ministry agreed to changes in the guidelines for SHAKTI scheme.

SHAKTI, or Scheme for Harnessing Scheme for CCAI Monthly Newsletter September 2021

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Harnessing and Allocating Koyala Transparently in India, was launched in 2018 to provide coal to stressed power units which lack coal supply.

The power ministry in a meeting with Association of Power Producers (APP), the representative body for private gencos, agreed to three separate windows for auction--3 months, 6 months and one year.

di's agenda of a hydrogen-based economy in a clean manner.

"Ministry of Coal has constituted 2 Committees recently, one to oversee the program and another of experts to give guidance to the Ministry," the coal ministry said in a statement.

"In order to make coal available for a longer period, MoP will examine whether the duration of auction can be extended for more than one year.

Issue of Bank Guarantee is also to be examined if duration has to be extended beyond one year," said a statement by the ministry.

The task force has been constituted under the chairmanship of Coal Additional Secretary Vinod Kumar Tiwari. Its broad terms of reference include monitoring of activities towards achieving coal-based hydrogen production and usage and coordination with Coal Gasification Mission and NITI Aayog.

Sluggish power demand may pose problem for new power plants in Bengal

The broad terms of reference of the expert committee include identifying experts in India and co-opting as members, desk-based review of progress in hydrogen technology and also reviewing ongoing research projects in hydrogen technology.

As the demand for power in West Bengal is not growing as per projection, it may pose problems for the sector once under construction plants become operational, a senior official said.

The 19th Energy Power Survey Report of the Central Government had predicted that the annual power demand in the state would be 65,000 million units in 2021-22 but it was 42,000 million units in FY'21, the official said.

If a power plant fails to sell its full production, then it will earn low revenue resulting in hardship in debt servicing, the official said. Central funding in building power infrastructure is also squeezed leading to a greater fiscal burden on states, the official said.

Government constitutes task force, expert committee on coalbased hydrogen production The Centre said it has constituted a task force and expert committee to prepare a road map for coal-based hydrogen production. This is aimed at contributing to Prime Minister Narendra Mo-

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Draft open access norms can be a tailwind for new renewable projects: CRISIL The Draft Electricity (promoting renewable energy through Green Energy Open Access) Rules, 2021, announced by the Ministry of Power, if implemented, could improve the certainty of cash flows for new renewable energy projects coming up through this route, said CRISIL Ratings.

“Given the government’s target of installing 450 GW of renewable capacity by 2030, the draft rules, if finalised, would be a timely measure as these can provide a fillip to open access renewable energy capacity addition,” said Aditya Jhaver, Director, CRISIL Ratings.

He added that considering commercial and industrial (C&I) consumers account for almost 50 per cent of all power consumption in India, and have their own go-green initiatives, the open access route can support likely strong demand pull from these consumers.

India’s coal-fired power output falls 1.5%, renewables jump in September India’s coal-fired electricity generation so far this month fell 1.5% from year earlier, while power output from renewable energy jumped 53.6%, a Reuters analysis of government data showed.

The slowdown in coal-fired power output and a pickup in renewable energy generation could provide relief to utilities across the country which are struggling with a coal shortage, forcing India to ask power plants to import coal.

Overall electricity generation growth slowed to 1% in the first half of September, a review of daily load despatch data by federal grid regulator POSOCO showed, much slower than the 16.1% growth in August which had resulted in a 23.7% increase in coal-fired output.

Renewable energy output rose 53.6% in September, driven by a more than doubling of wind power production and an 18.6% rise in solar power generation, the POSOCO data showed, making up for a 5.3% fall in hydro power output, and a 33.7% decline in gas-fired power.

Bids for 4,000 MWhr battery storage projects to be invited soon: Power Minister R K Singh India will soon invite global bids for battery storage projects totalling 4,000 MWhr (megawatt hours), Union Power Minister R K Singh said.

He made the announcement while addressing the US India Strategic Partnership Forum and industry leaders in a Virtual Energy Industry Roundtable, the Ministry of Power said in a statement.

Singh added that a battery project of 12 gigawatt hours (GWhr) will be set up in Ladakh.

India has set an ambitious target of having 175 GW renewable energy (RE) capacity by 2022 and 450 GW by 2030.

At present, India has 100 GW installed solar and

wind capacity and after adding hydro, the total installed renewable capacity is 146 MW, he said.

Another 63 GW of renewable capacity is under construction, Singh said. The minister also informed the conference that India would be inviting bids for green hydrogen in the next 3-4 months to pave the way for viable usage of hydrogen as fuel.

BHEL commissions India's largest floating solar plant in Andhra Pradesh State-owned BHEL has announced the commissioning of India's largest floating solar photovoltaic plant in Andhra Pradesh.

Located at NTPC Simhadri in Andhra Pradesh, the 25-megawatt floating SPV project covers an area of 100 acres, Bharat Heavy Electricals Limited (BHEL) said without disclosing the project cost.

BHEL said its scope of work in the project included design, engineering, procurement and construction of the solar project, which has been executed by the company's recently, formed Solar Business Division.

The project will help saving valuable land resources and conserving water by reducing evaporation, it said.

India can achieve net zero in greenhouse gases emission by 2065-70, says Montek India can achieve net zero for carbon emissions by 2065-2070 with country’s greenhouse gases peaking by 2035 and country capping coal usage in the next 10 years, said a new study co-authored by former planning commission vice-chairman Montek Singh Ahluwalia. The study said that the target could be conditional to rich countries doubling climate finance to US $ 200 billion per year in the next few years.

The paper strongly advocates that India should commit to its net zero target year, by when CCAI Monthly Newsletter September 2021

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its emissions score becomes nil, at Glasgow climate conference (CoP) starting from October 31, saying that the traditional argument of India will emit for development objective no more holds “diplomatic ground” as there are viable non-emitting energy alternatives available.

Net zero is achieved when the amount of greenhouse gases emitted equals the amount of the harmful gases removed from the atmosphere by carbon absorption or sequestration or separation. And, it is the most hotly debated proposal for CoP as the Intergovernmental Panel on Climate Change (IPCC) has said that achieving net zero by 2050 was necessary to keep global temperature rise to 1.5 degrees to pre-industrial level by the end of 2100.

India adds 4,578 MW of solar capacity in second quarter of 2021 India added 2,488 megawatts (MW) of solar in the second quarter (Q2) of the calendar year (CY) 2021, a 19 per cent increase quarter-overquarter, compared to 2,090 MW installed in Q1 2021, according to a recent report.

It added that solar energy’s share of new power capacity additions was the highest ever in the first half of any year.

In the first half (H1) of 2021, India added 4,578 MW of solar, a 251 per cent increase compared to the same period previous year. Installations exceeded 3.2 GW of solar installed in all of CY 2020.

According to the report, installations were significantly higher than the previous quarter despite various state level lockdowns because of the second wave of COVID-19.

The report has increased its forecast by 23 per cent in the medium-case scenario to about 8 GW to 9 GW in 2021. It said that by the end of Q2 2021, cumulative solar installations stood at 43.6 GW.

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Gujarat High Court issues notice on solar energy subsidy pullback The Gujarat high court has issued notice to concerned state authorities in response to a petition challenging the government’s decision to withdraw the benefits of subsidy in solar energy policy for micro, small and medium enterprises on the ground that the stoppage of the policy is in violation of the principle of promissory estoppel.

The high court was moved by a businessman from Mahisagar district, Ramanlal Patel, who submitted that he had invested in setting up a solar power project following the Gujarat Industrial Policy, 2020. He was attracted to invest in purchase of land, equipment and services to establish the solar project because of the subsidy policy for Development of Small Scale Distributed Solar Project, 2019. His unit was classified as micro enterprise.

However, the government took a decision to withdraw the subsidy policy on July 20 and later communications were issued to concerned authorities in August. The petitioner has termed the decision to withdraw subsidy benefits for the MSMEs as illegal and invalid.

Venkaiah Naidu appeals to Indian firms to become self-reliant in solar sector Vice-President M Venkaiah Naidu said the shortage of domestically manufactured solar cells and modules was the biggest hindrance that hampers the nation's growth in the solar sector and urged the Indian companies to reduce the dependence and become self-reliant in the sector.

Inaugurating a 2.4MW solar power plant at Pondicherry University, Naidu suggested ramping up production by easing the setting up of manufacturing plants and publicizing the government's subsidy programmes to encourage small players.

Naidu said the lack of a trained workforce was the other bottleneck in the exponential growth of solar and other renewable energy sources.

While pointing out that India is endowed with vast solar energy potential, Naidu said the National Institute of Solar Energy (NISE) has assessed the country's solar potential to be about 748GW assuming 3% of the wasteland area to be covered by solar photovoltaic modules.

Danish team to call on Tamil Nadu CM M K Stalin for setting up windmills at sea A business delegation from Denmark is calling on chief minister M K Stalin to explore the possibility of establishing offshore wind mills on the Tamil Nadu coast. The state’s long coast, especially between Rameswaram and Kanyakumari, offers a potential to tap 20-30 GW offshore wind energy.

Denmark is also set to establish a Centre of Excellence (CoE) for offshore wind energy in Tamil Nadu. The state has been taking efforts to establish 4-5 CoEs in emerging sectors to enlarge the potential for both manufacturing and services. The CoE for off-shore wind energy is most likely to come up in Chennai.

"Not just an opportunity to generate offshore wind energy, Tamil Nadu offers immense potential for manufacturing components for wind mills, " State Industries minister Thangam Thennarasu said, addressing the Danish delegation at a meeting organized by Guidance Tamil Nadu

India to increase nuclear power capacity three times to cut carbon footprint With India is exploring multiple options to lower its carbon footprints, the government has recently said the country would produce three times more nuclear power from its current level and called for greater India-US cooperation for clean energy sectors such as biofuels and hydrogen.

The issue of ramping up efforts to produce more nuclear power in the next 10 years was discussed in a meeting of junior minister in the PMO and minister of state (atomic energy) Jitendra Singh with the US delegation led by the country’s visiting deputy secretary of energy, David M Turk.

Singh informed the delegation that India will produce more than three times nuclear power and its installed capacity is expected to reach 22,480 MW by 2031 from the current 6,780 MW as more nuclear power plants are also planned in future.

The move will help India substantially increase its share of non-fossil fuel in total energy mix in sync with its pledges under the Paris Agreement. Though India’s share of installed capacity of non-fossil fuel-based electricity generation has already reached nearly 39% of its total power generation capacity against its existing target of 40% by 2030, the step towards nuclear energy would help it upgrade its climate action goal.

Offering Denmark’s support to Tamil Nadu, Danish minister for climate, energy and utilities, Dan Jannik Jorgensen said Denmark has established itself in green energy, especially wind energy. “With the understanding between the two nations (India and Denmark) and with the help of the investments already made by Danish companies here.

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DOMESTIC No new coal plants needed to meet 2030 demand India does not require additional new coal capacity to meet expected demand growth by financial year 2030, according to a report prepared by EMBER, an independent British energy think-tank, in collaboration with Bangalorebased Climate Risk Horizons.

According to the report, which was released recently, even if India’s power demand grows 5 per cent annually, in line with the most optimistic International Energy Agency projection, coalfired generation in the financial year 2030 will be lower than in the financial year 2020, as long as India achieves its non-coal generation targets – its renewable energy targets.

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“In effect, more coal capacity beyond what’s already under construction isn’t needed to meet the aggregate demand growth by FY 2030,” says the report, adding that the development of new coal plants will lead to “zombie” units – ones which will exist, but not be operational.

Pralhad Joshi urges states to be proactive in auctioning mining blocks Union Minister Pralhad Joshi has said that the Ministry of Mines is contemplating an amendment to the Mines and Minerals (Development and Regulation) Act to bring about tangible reforms in the mining sector of the country.

He urged the mining sector to increase the contribution of the sector to the country's GDP to 2.5 per cent and also urged the states to be proactive in auctioning mining blocks.

The Minister called upon the states that received the mining block reports to act on them without any delay to make the auction process faster.

He asked the Ministry of Mines to make more financial assistance available to the states.

Noting that a proactive approach by state governments can bring about tangible reforms in mining, he said that despite having the fourth largest coal reserves, India is still importing thermal coal.

Govt relaxes green norms for projects connecting mines The ministry has, however, cautioned that all forest clearance proposals for mining shall have an additional column for the project proponent to certify that they have critically examined the mineral extraction pathways and that no new extraction path outside the mining area shall be proposed during the next five years.

Roads, conveyor belts, railway infrastructure etc. that connect mines to ports or other destinations can now be considered as standalone projects that can be approved by the regional offices of the union environment ministry, the ministry said in a letter to state governments.

The State Government/User agency shall ensure that dispensation considered by the Ministry is not misused in any way and likely tendencies to detach linear projects from the main proposal of mining should not be encouraged.

To the extent possible, linear infrastructure such as roads/railways/conveyor belts, etc. ancillary to mining should be included in the main proposal and under inevitable circumstance only, such proposals submitted by the user agency should be considered as standalone projects,” a government statement noted.

CIL urging power houses not to regulate coal intake State-owned CIL has been writing to power generating companies since October last year urging them not to regulate the intake of coal and build up stock at their end, so that the electricity production does not suffer during summmer and monsoon seasons, according to official sources.

The development assumes significance in the wake of power houses in the country grappling with coal shortages.

“CIL has been writing to power gencos (generation companies) since October 2020 not to regulate intake of their coal and build up stock at their end, so that generation do not suffer during the summer and monsoon season of 2021-22 due to coal shortage,” one of the sources said.

Coal India Ltd (CIL) had last week said it has stepped up the supply of coal to the power sector in the first eight days of the current month, with an average of 1.39 million tonnes (MT) per day, clocking a growth of around 20 per cent yo-y..

CIL to step up spending to boost production, dispatches State-owned Coal India Ltd, which has estimated a capital expenditure of about 17,000 crore for FY22, envisages to spend more in the coming years to boost production and dispatch levels. CIL’s capex stood at13,284 crore in FY21.

According to Pramod Agrawal, Chairman and Managing Director, CIL, coal would continue to play a lead role in the country’s electricity generation as indicated by the consumption pattern.

The company’s capex saw a twofold increase to 1,840 crore during the first quarter of FY22, compared to the same quarter last year as it continued to step up investments in evacuation infrastructure, land acquisition and procurement of heavy equipment.

Procurement of heavy earth moving machinery, CCAI Monthly Newsletter September 2021

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plant and other machinery that help in ramping up output through OC (opencast) mines typically accounts for a major share of the capex followed by investments in strengthening evacuation infrastructure like setting up rail sidings and corridors, coal handling plants, (CHP), silos and haul roads.

Coal shortage deepens in India amid plunging plant inventories India’s massive fleet of coal plants are running dangerously low on stockpiles, which may force the nation to buy expensive shipments of the fuel or else risk blackouts.

Stockpiles have fallen to the lowest since November 2017, data from the Central Electricity Authority showed. The South Asian nation isn’t alone in facing a fuel crisis. Buyers from the U.K to China are grappling with energy shortages as a rebound in demand outpaces supply.

As inventories dry up, plants may be forced to buy expensive imported coal or pay hefty premiums at domestic auctions, said Debasish Mishra, a Mumbai-based partner at Deloitte Touche Tohmatsu. That may raise costs across an economy that’s already battling high petroleum fuel prices.

“A sharp rise in post-pandemic electricity demand is straining fuel supply chains across the globe,” said Mishra. “India has done well to expand its power generation capacity, but has failed to give similar attention to coal supply infrastructure.”

country's power stations grappling with depleting stocks at their end.

"Launching a multi-pronged effort to help build up stocks at power plants, CIL has offered coal on 'as is where' basis through rail-cum-road mode from sources where high stock is available.

"Twenty-three such mines carrying 40.3 MT (million tonnes) of stock as of August 16 were identified," Coal India Ltd (CIL) said in a statement. Supply to the power plants carrying stock of zero to six days has been prioritised by preparing a contingency supply plan to increase their stock, it said.

Coal India plans to increase prices 'slowly' Coal India Ltd is planning to increase the prices of coal slowly after considering the views of all stakeholders, the state-run miner's chairman said, as Asian coal prices hit all-time highs.

Asian coal prices from exporters Australia and Indonesia, and the most-traded thermal coal futures contract on China's Zhengzhou Commodity Exchange touched record highs recently due to robust power consumption.

"We cannot increase the price of coal abruptly.

It can only be increased slowly, and that we are planning (to do)," Coal India Chairman Pramod Agrawal told shareholders at the company's annual general meeting.

The world's largest coal miner, which accounts for over 80per cent of India's output of the fuel, last raised coal prices in 2018, and is generally not aggressive with pricing.

Supply to power plants carrying stock of 0-6 days prioritised: Coal India Coal India’s pending overdues State-owned CIL has said it has launched a drop from Rs 22,000 crore to Rs multi-pronged effort to help build up coal stocks 16,000 crore at power plants, and stressed that supply to the electricity units carrying stock of zero to six days has been prioritised by preparing a contingency supply plan to increase their stock.

The statement assumes in the wake of the

20 | CCAI Monthly Newsletter September 2021

Coal India’s (CIL) overdues from gencos have come down to Rs 16,840 crore as of August 31 from Rs 22,000 crore at the start of the fiscal, an above 65%% recovery in last five months.

The company’s director finance, Samiran Dutta, replying to queries at the 47th annual general meeting said overdues were reducing and were expected to considerably reduce before the end of the second quarter, the current fiscal.

Rajasthan, Karnataka, West Bengal and others had huge pending overdues and CIL had to restrict supplies to mount pressure on the state gencos, which resulted in coal shortage at the plant head.

CIL launches software for better assessment of coal resources State-owned CIL said it has launched a software which will help in identifying thin coal seams under the earth crust and improve assessment of resources of fossil fuel using seismic survey during exploration process.

The launch of software assumes significance as the present seismic survey techniques for coal resource exploration have their limitations in identifying the thin coal seams under the earth, which will now be possible as this new software helps in enhancing resolution of seismic signals leading to delineation of thinnest coal seams.

CIL's research and development (R&D) arm Central Mine Planning and Design Institute (CMPDI) has developed this first of its kind software in association with Gujrat Energy Research and Management Institute (GERMI) and the company will also file for its copyright protection.

Coal Project enhances Green Cover under Mission Mode Even as the notion is that coal mining degrades land, new projects of Coal India Ltd. (CIL), under the Ministry of Coal not only reclaiming land to its original shape but also enhancing Green cover along with Coal Mining activity. Emphasis is to have simultaneous back filling of land after opencast Coal Mining operation and dense plantation thereon to maintain environmental equilibrium.

21 | CCAI Monthly Newsletter May 2021

Out of many such greenfield projects, one of the largest project of CIL, Jayant Opencast Coal Project in Singrauli District of Madhya Pradesh is forging ahead with a mission of looking beyond coal mining with land restoration & enhancing green cover day by day. This has helped in lowering down the effect of pollution substantially & has also helped in increasing Carbon offset. The project is under Northern Coalfields Ltd. (NCL), a Subsidiary of CIL. During a detailed review of environmental & forest clearance of Jayant Project by Secretary (Coal), Ministry of Coal in New Delhi, the satellite data of the project presented by NCL revealed more Green cover than the pre-mining forest cover, which is an outstanding achievement for any mega Coal project operating in large leasehold area.

Non-power sectors seek government help for adequate coal supply A coal shortage has triggered panic in nonpower industries like aluminium, steel, cement and paper with companies claiming they are left with an average 4-5 days’ stock and that coal despatches by rail have been stopped.

Companies and associations have written to coal minister Pralhad Joshi and coal secretary Anil Jain. Uttar Pradesh minister Kapil Dev Aggarwal has also written to Joshi, representing paper manufacturing units in Muzaffarnagar that have fuel agreement with CIL’s Northern Coalfields Ltd (NCL), alleging that there is a complete diversion of coal rakes to power sector.

Industry executives said the panic has set in due to the fact that captive power plants attached to aluminium smelters need to operate continuously. If there is a power cut for more than two hours, the molten metal starts freezing and it takes up to four months to restore normalcy.

Another official said on account of default in CCAI Monthly Newsletter September 2021

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payment by the thermal power plants, coal rake despatches to non-power industries were increased irrespective of their consumption and storage capacity. These industries had to cancel their rakes due to storage issues.

MCL records highest 102 rakes coal dispatch in single day Mahanadi Coalfields Limited (MCL) , a subsidiary of Coal India Limited, has recorded the highest ever coal despatch by rail-mode, with 102 rakes chugging from Ib Valey and Talcher Coalfields to various power stations in a single day.

Mr PK Sinha, Chairman-cum-Managing Director, MCL has complimented the teams involved in achieving the record despatch through environment-friendly rail-mode.

“It is an impressive performance by the Team MCL, with equally great coordination and support from Indian Railways,” said Mr Sinha, congratulating all the team leaders and their teams for their work with great sense of responsibly to meet energy requirements of the Nation.

Recording the highest ever 61 rakes despatched from Talcher coalfields, MCL, on August 30, 2021, supplied 5.3 lakh tonne coal to consumers, including more than four lakh tonne coal to the various power stations.

Commerce Ministry for extending anti-dumping duty on certain steel products The commerce ministry’s arm DGTR has recommended the extension of anti-dumping duty on imports of certain steel products from countries like China, Japan and Korea to protect the domestic industry from cheap inbound shipments.

In separate notifications, the Directorate General of Trade Remedies (DGTR) has recommended the duty after conducting a sunset review

22 | CCAI Monthly Newsletter September 2021

investigation on the imports of ‘cold rolled/cold reduced flat steel products of iron or non-alloy steel or other alloy steel of all width and thickness – not clad, plated or coated from China, Japan, Korea and Ukraine.

It has also suggested extension of the duty on imports of hot-rolled flat products of alloy or non-alloy steel from China, Japan, Korea, Russia, Brazil and Indonesia.It concluded that there is a likelihood of continuation and recurrence of injury to the domestic industry if the existing duty is removed.On both the products, the directorate has recommended the continuation of anti-dumping duty on imports.

STEEL

India's steel output expected to jump 18% to 120 MT in FY22: MoS Steel India's crude steel output is expected to soar about 18 per cent to 120 million tonnes (MT) by the end of the ongoing financial year, Minister of State (MoS) for Steel Faggan Singh Kulaste said.

The demand is expected to cross 100 MT during the current financial year, he said.

According to official data, the country produced around 102 MT steel in the financial year 202021, registering a fall of 6.1 per cent over FY20, due to the COVID-19 pandemic and the lockdown necessitated to contain its spread.

"India's production of crude steel was at 37.527 MT, a growth of 44.6 per cent, in April-July 2021.

This gives me confidence that we will produce around 115 MT-120 MT in FY 2021-22," Kulaste told PTI sharing his estimates for the current financial year.

High coking coal prices to impact gross margins of steel mills, says Ind-Ra

It takes an investment of up to Rs 8-10 crore to set up one MW WHRS, and the overall cost for the 175 MW for FY21 and FY22 will come at Rs 1,400-1,700 crore, it said.

High coking coal prices are likely to impact gross margins of steel mills, says India Ratings and Research (Ind-Ra).

The agency said domestic cement companies in recent years have been investing in alternative/renewable energy sources, replacing known sources such as fuel in the form of coal as well as thermal power generation which has afforded the players multiple benefits apart from reducing carbon dioxide footprint.

Accordingly, coking coal prices were up 5 per cent MoM and 103 per cent YoY to $222 per MT in mid-August 2021.

Australian coking coal prices are receiving support from a strong demand from Asian countries, ex-China. The limited availability of prompt coking coal cargoes for near-term deliveries due to logistical issues, including freight and container unavailability and high freight rates, could support coking coal prices over the near term.

While China's imports are from ex-Australia suppliers, these countries are not likely to be able to bridge the supply deficit, especially when the domestic consumption within these ex-Australia supplier countries is also increasing with resumption in economic activities, further restricting supply.

CEMENT

Cement companies to invest up to Rs 1,700 crore in waste heat recovery system to save power cost Major cement companies will invest up to Rs 1,700 crore in two fiscal years ending March 2022 to set up 175 MW of waste heat recovery system (WHRS) capacities for saving power cost, an Icra report said.

The usage of renewable sources of energy such as solar energy, wind energy and WHRS has been gaining momentum, in particular the latter has emerged as one of the cheapest sources of power generation given the negligible input costs. manufacturing is an energy intensive process and power and fuel accounts for 25-28 per cent of the overall costs for a cement company, it said

Ambuja Cements launches Concrete Future Laboratories Ambuja Cements has launched Concrete Futures Laboratories, a one-stop solution for the architecture, engineering and construction (AEC) professionals. Eight laboratories across India will enable them to test various aspects of cement and concrete.

CEO Neeraj Akhoury said "Our strong credentials in research and development and innovation have helped us develop new products and services tailored to our customers' needs. We consistently work towards developing cuttingedge solutions for our stakeholders, and the Concrete Futures Laboratory is a testament to our efforts. We aim to create an ecosystem that is focused on collaboration and inclusive growth to build a better and sustainable tomorrow."

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GLOBAL Coal exports to plunge 80pc if world stays below 1.5 degrees, RBA says

Using climate scenarios that have been developed by a consortium of central banks trying to improve climate risk management, the Reserve Bank’s analysis maps out four possible worlds.

As per the analysts, coal exports and, to some extent, gas shipments could plunge by as much as 80 per cent if China, Japan and South Korea take an aggressive approach to decarbonising their economies by mid-century.

They are: net zero where global warming is limited to 1.5 degrees; a world in which warming is allowed to reach 2 degrees; a scenario in which all the pledges to cut emissions by countries as of December become reality; and the current set of policies of countries around the globe.

That figure would be consistent with keeping the planet’s temperatures from heating by more than 1.5 degrees, the level at which scientists say the effects of climate change become irreversible and catastrophic.

The report highlights both the costs and opportunities to Australia of the pledged shift away from fossil fuels by the world’s biggest emitters, as well as huge question marks about the different potential trajectories.

24 | CCAI Monthly Newsletter September 2021

Chinese coal firms meet to address winter supply challenges Major Chinese coal producers are trying to resolve supply shortages and curb price rises as the country’s winter consumption peak approaches, an industry association said.

The China Coal Transportation and Distribution Association said in a notice that the state-owned China

Energy Investment Corp met with several other top producers to discuss ways to guarantee winter power supplies.

es, and that say regulators will suspend the activities of any price providers failing to comply with certain rules.

The association said rising market prices had put buyers under pressure, but suppliers were also facing “operating difficulties” as they try to fulfil contracted deliveries at a discount.

Yulin Coal Trading Centre Corp, founded in 2009, is mainly involved in physical coal trading, logistics and consulting business. Until the ban, it published daily spot coal prices for Yulin city and nearby regions.

Coal production in Yulin accounts for about 13% of China's total coal output.

With coal demand set to surge as temperatures drop, China’s state planning body said that it would send investigators to the regions to ensure that supply and price stabilization measures were implemented properly.

Coking coal price hits record highs as Chinese steel-makers face pain The price of metallurgical coal has risen to record levels as trade tensions and border problems push the cost for Chinese importers sky-high.

Coal for coking purposes has soared despite declines in iron ore values attributed to Chinese steelmakers abiding by a government directive to avoid buying from Australia.

The value has surged to $US410 a tonne in the past week, representing a more than tripling in price since early 2020.

Coking coal is now overtaking iron ore as the largest input cost for many of the world’s steel mills.

With poor domestic supplies of metallurgical coal, Chinese buyers were racing to source shipments from across Asia, North America and as far afield as Columbia as a result.

Australia’s coal mines risk becoming stranded after 2030 Australia’s coal mines are at risk of becoming stranded assets under three out of four scenarios that consider how the global energy transition will unfold, according to a report by the country’s central bank.

Australia is the world’s biggest exporter of coal and liquefied natural gas, with fossil fuels accounting for around a quarter of its total exports, worth AUS$71 billion (US$51.9 billion) in the last financial year according to government figures.

Around two-thirds of the country’s fossil fuel exports are shipped to three big customers, Japan, China and South Korea, all of which have set net zero emissions targets; Japan and South Korea by 2050 and China a decade later.

Under three scenarios, the volume of Australian coal exports falls, with the sharpest falls seen under Net Zero and Below 2°C scenarios, in which Australia’s coal exports fall by 80per cent by mid-century.

Under the fourth scenario, which incorporates only current government policies with limited progress in reducing emissions, coal exports increase gradually to be 17per cent higher in 2050.

China bans coal trading firm from Chinese coal imports from Auspublishing daily price indexes tralia drop 98.6% as restrictions The National Development and Reform Commis- bite sion (NDRC) said Yulin Coal Trading Centre Corp was publishing untrue pricing information, and that the company was not authorised to collect, edit and publish news and information.

The NDRC has shut down Yulin's pricing indexes and two Wechat accounts it managed, and asked the firm not to publish any untrue coal market information on any channel.

The move follows new guidelines from Beijing for managing price indexes for commodities and servic-

In the first seven months of the year Chinese coal imports from Australia have totalled just 780,000 tonnes as Chinese restrictions on Australian coal have started to hurt, according to Oceanbolt. This represents a 98.6% drop compared with 56.8 million tonnes in the same period in 2020.

In the first seven months of 2020, 697 voyages were made carrying coal between Australia and China. Out of these, 59.1% were on Panamax ships while Capesize ships proved the second most popular, accountCCAI Monthly Newsletter September 2021

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ing for 35.3%. So far this year, only 14 journeys have been carried out, of which eight were on Panamax ships.

On the other hand, imports of coal from Indonesia have grown 45.2%, from 76.4 million tonnes in the first seven months of last year to 110.9m tonnes in 2021, resulting in the share of total Chinese coal imports from Indonesia jumping to 60.4%. The share from Australia on the other hand has fallen to just 0.4% in the first seven months of 2021.

Despite the steep drop in exports to China, total Australian coal exports are up by just under 400,000 tonnes compared with the first seven months of last year, representing a growth rate of 0.2%. Exports to India and South Korea have grown the most, up by 22.3 million tonnes (+96.3%) and 15.0 million tonnes (+72.2%) respectively.

Coal to continue help powering Australian economy Minister for Resources and Water Keith Pitt says Australian coal will not be staying in the ground while it continues to provide thousands of jobs and bring significant economic benefits both here and across the world.

Minister Pitt said coal remains Australia’s second largest export and that won’t be changing any time soon despite suggestions otherwise from Londonbased academics.

“Australia accounts for approximately 8 per cent of the world’s thermal and metallurgical coal production, which is exported to over 25 countries including the UK, Germany and New Zealand.

“Our coal is providing the power and steel-making capability to developed and developing nations throughout Asia, creating economic and social opportunities for millions of people,” Minister Pitt said.

“That translates to around $50 billion in exports and the industry provides direct jobs for over 50,000 Australians and supports the jobs of another 300,000.

“Over $3 billion in royalties last financial year made a significant contribution to the New South Wales and Queensland Governments’ ability to pay for the health services, schools and other essential services Australians rely on.

Australian coal mine approved despite climate ruling 26 | CCAI Monthly Newsletter September 2021

This is the first coal mine approval by the Australian minister for the environment Sussan Ley since the Federal Court of Australia ruled in May that she may breach her duty of care to protect Australian children if she failed to consider the effects of climate change when approving coal mines. She took into account China's capacity to buy coal elsewhere in the world after Beijing disrupted imports of Australian coal when deciding to approve Russell Vale.

The argument that Australian coal mines will simply be replaced by alternate sources if they are not approved, could lead to further approvals including Whitehaven Coal's 10mn t/yr Vickery mine, which was at the centre of the Federal Court ruling in May. The Russell Vale approval allows Wollongong, which delisted from the Australian Securities Exchange a year ago, to extract 3.7mn t over five years after a previous plan to extract 4.7mn t was rejected. The firm has been under financial pressure for several years and was forced to close the Wongawilli coking coal mine in NSW in April 2019 following safety breaches.

Jindal Steel, which took control of Wollongong from Indian firm Gujarat NRE Coke in 2013, has issued a cash advance of A$550mn ($408mn) to its Australian affiliate. Wollongong had drawn down A$486.8mn as of 30 June 2020.

Indonesia sets Sep thermal coal HBA at record high $150.03/mt on strong China demand Indonesia's Ministry of Energy and Mineral Resources set its September thermal coal reference price -- also known as Harga Batubara Acuan, or HBA -- at $150.03/mt, the highest since the government started tracking prices in January 2009, helped by strong China demand, a ministry spokesperson said Sept. 8.

"This is quite a phenomenal number in the last decade. China's high demand exceeds its domestic production capacity," ministry spokesperson Agung Pribadi told S&P Global Platts.

The HBA was also influenced by increasing demand from South Korea and Europe, along with high natural gas prices, Pribadi said.

The HBA is a monthly average price based 25% each on Platts Kalimantan 5,900 kcal/kg GAR assessments, Argus-Indonesia Coal Index 1 (6,500 kcal/kg GAR), Newcastle Export Index (6,322 kcal/kg GAR),

and globalCOAL Newcastle (6,000 kcal/kg NAR). In August, the daily FOB Kalimantan 5,900 kcal/kg GAR coal assessment averaged $126.276/mt, up from $106.476/mt in July, Platts data showed.

Indonesian rains shake up thermal coal market Heavy rainfall in the past few days in parts of Indonesia's main Kalimantan coal-producing region has caused flooding at several mines, creating the potential for supply tightness and further price gains. The downpour could well be a precursor to the upcoming monsoon season in the south-east Asian nation that could keep availability tight.

A number of coal producers are seeking changes to loading schedules for shipments, while others have declared force majeure on shipments. A rough estimate suggests the current situation will disrupt 4mn5mn t/month, mainly from South Kalimantan, an Indonesia-based trader said. The country, which is the biggest thermal coal exporter in the world, shipped 36.7mn t of coal in June, according to customs data.

A state of emergency has been declared in South Kalimantan's Tanah Bumbu regency until 17 September because of heavy rains and flooding. The rains have also disrupted coal logistics in other parts of Kalimantan. The diversion of cargoes to the domestic Indonesian market after authorities enforced producers' supply obligations is adding to the squeeze.

The support to current market fundamentals also stems from China's ban on Australian coal imports, which has distorted thermal coal trade flows and created unprecedented price imbalances in the market. And the latest supply tightness, particularly for the popular low-calorific-value (low-CV) GAR 4,200 kcal/kg, is propelling interest in ultra-low-CV and some off-spec mid-CV cargoes, according to another Indonesian trader. .US

coal demand is rising, but supplies remain tight

Coal demand and prices are booming as natural gas prices soar, but U.S. mining companies have not ramped up production to meet the new market conditions.

Since climbing from a sharp drop in the early weeks of the COVID-19 pandemic, the overall U.S. coal supply response has been conservative. There are numerous reasons mines in the long-struggling sector have not ramped up production, including limited

access to capital, uncertain demand outlook, labor shortages and the time it takes to increase supply.

The U.S. Energy Information Administration recently said it expects coal demand from the U.S. electric power sector to increase by 100 million tons in 2021 and export demand to rise by 21 million tons compared to 2020. However, the agency also warned that constraints in capacity and transportation will limit the ability of producers to meet that demand.

Analysts said the market would most likely be corrected by a drop in demand brought on by lower gas prices, not more coal supplies.

Recognizing that lower summer demand slowed gas-to-coal switching that may have otherwise occurred, Piper said if fuel economics remain supportive, it could lead to increased coal shipments.

US coal exports plummet 42.2% on week of Hurricane Ida: cFlow Weekly US coal ship departures plummeted in recent weeks due to Hurricane Ida and its aftermath.

Twenty-nine coal ships carrying nearly 1.48 million dwt of coal departed the US, down 42.2% from 2.55 million dwt on 41 ships the previous week.

With shipments delayed by Hurricane Ida, coal ship departures from the Gulf Coast dropped 64.7% week on week. Gulf Coast coal ship departures fell to a 10-week low of six carriers. At 119,041 dwt of coal, Turkey was the top destination for US coal shipped from the Gulf Coast. Brazil followed with 63,474 dwt of Gulf Coast-shipped coal destined for its shores.

Rounding out the top three was Guatemala, set to receive 37,685 dwt of coal from the US Gulf Coast.

Similarly affected by severe weather, Atlantic Coast coal shipments decreased 30% week on week to 14 ships. Destined to receive 274,385 dwt of US coal, Gibraltar was the top destination for coal shipped from the Atlantic Coast. The United Kingdom followed, set to receive 114,890 dwt of US coal. The country importing the third-largest amount of US Atlantic Coast coal was Sweden, scheduled to receive 84,000 dwt.

Russia’s Coal Exports Up 9.8% Year-on-Year To 107.3Mln Tonnes In H1 Russia’s coal exports increased by 9.8% year-onyear to 107.3 million tonnes in the first half of 2021,

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the country’s energy ministry said.

“Consumption of Russian coal in the world is growing. In the first half of 2021, the total exports of Russian coal amounted to 107.3 million tonnes, which is 9.8% more than in the same period last year,” the statement says.

UK fires up coal power plant as gas prices soar Warm, still autumn weather has meant wind farms have not generated as much power as normal, while soaring prices have made it too costly to rely on gas.

In particular, exports to Europe during this period increased by 2.4%, to 22.5 million tonnes, and shipments to China grew by half, to 24.15 million tonnes.

As a result, National Grid ESO - which is responsible for balancing the UK's electricity supply - confirmed coal was providing 3% of national power.

Special presidential envoy Anatoly Chubays told the Eastern Economic Forum that the strategy for the development of the Russian coal industry, which was adopted last year, could not be implemented in a situation of falling coal consumption in China.

It said it asked EDF to fire up West Burton A, which had been on standby. A National Grid ESO spokesman said there had been a three-day coal-free run in mid-August.

Germany: Coal tops wind as primary electricity source Despite efforts to boost renewable energy sources, coal unseated wind power as the biggest energy contributor to the German network in the first six months of 2021, according to official statistics.

The data comes as Germany looks to speed up its exit from coal-powered plants after years of mounting pressure from climate experts and activists over the country's dependence on coal and its detrimental impact in fueling the climate crisis.

But the latest figures also reveal the challenges that lie ahead with the country's energy shift. Data published by the Federal Statistics Office (Destatis) found that the production of electricity from "conventional" energy sources rose by 20.9% this year, compared to the first half of 2020.

In total, conventional energy sources — including coal, natural gas and nuclear energy comprised 56% of the total electricity fed into Germany's grid in the first half of 2021. Coal was the leader out of the conventional energy sources, comprising over 27% of Germany's electricity.

Wind power's contribution to the electric grid, on the other hand, dropped significantly compared to the previous year — from 29% to 22%.

28 | CCAI Monthly Newsletter September 2021

However, the country had relied on some coal power every day since then.

Last year, coal contributed 1.6% of the country's electricity mix. That was down from 25% five years ago.

Both the government and National Grid ESO have committed to phasing out coal power completely by 2024 to cut carbon emissions. However, coal is currently still used when it is better value than gas.

Cal generation in NZ already outstripping previous years New Zealand used more than one million tonnes of coal in just the first half of this year, more than any full year since 2012, as low hydrolake levels and gas shortages continued through the quarter.

Between April and June, the burning of coal accounted for 12 percent of the country's electricity, according to figures released this week by the Ministry of Business, Innovation and Employment.

More electricity was generated from coal in the June quarter than any since June 2008.

Coal imports were the highest on record, with 632,000 tonnes coming into the country in three months.

Renewable energy generation in the June quarter fell to the lowest level since 2013, at 75 percent. This is six percentage points lower than the June quarter last year, and was as high as 85.7 percent in December 2019.

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 163.83 USD 132.56 USD 108.03 USD 119.91 USD 86.17

Monthly Price- FOB INR 12072 INR 9768 INR 7960 INR 8835 INR 6349

Monthly Change (USD) 26.02 21.82 12.11 16.94 12.71

Indicative Pet Coke Price PET COKE

Sulphur

Price

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

-5% + 8.5%

INR 14851 INR 12422 ($169)

USA (CIF)

- 6.5%

INR 13329 ($181)

Monthly Change ($) INR 937.20 10.10

Exchange Rate

Change (Monthly)

INR 73.68

-0.45

9.90

Indicative Coking Coal Price Current Month

Premium Low Vol FOB CFR China 345.80 535.18

Monthly Change (USD)

119.46

169.18

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 297.40 474.00 223.93 232.65 231.65 520.30 608.10 98.71

146.63

South African Coal News: *The Sub-Saharan Africa’s pipeline of new coal projects has fallen by 47 per cent since 2015 amid the growing clamor to move away from coal to cleaner, greener fuel. Yet, 13 countries have decided to stick to coal to meet energy requirements. *South Africa’s thermal coal exports in the first seven months of 2021 has declined by nearly 13% on the year due to logistical constraints, social unrest and a sharp drop in demand from the Indian buyers. Country’s thermal coal exports in 2021 have dropped to 35 MT, down from 41 MT in the January-July period last year. *South Africa’s state-owned electricity utility, Eskom, is considering the utilization of carbon capture technology at a number of its coal-fired power plants, pending financial viability. With

30 | CCAI Monthly Newsletter September 2021

62.18

66.09

66.46

98.55

116.85

the country pursuing cleaner energy sources in the transition to a greener future, carbon capture will enable the utilization of coal in a more sustainable manner. *South Africa’s coal exports slowed in the first half of the year due to security problems and a lack of rail capacity by state-owned Transnet SOC Ltd. As thermal coal prices surpassed $100 a ton during the period, about 9 million tons of producers’ shipments were “lost” due to transport issues. Locomotive unavailability, coal line shutdown disruptions, derailments, and other operational challenges combined with vandalism and sabotage of rail infrastructure resulted in one of the worst export rail performances for the industry, according to miner Exxaro Resources Ltd. *South African coal price is steadily going up in the recent weeks amid increasing export

demand. High CV coal (6000kcal/kg) is hovering in the range of ($160-$170) per tonne as per the analysts. Ocean freight rate as well has also gone up to a great extent.

Australian Coal News:

* Australia has vowed to keep mining coal for export and said global demand was rising.

Prime Minister Scott Morrison said Australia's energy exports were needed to power developing countries, and predicted technology would enable them to be burned "in a much more climate-friendly way" in the future. *In the first seven months of the year Chinese coal imports from Australia have totaled just 780,000 tons as Chinese restrictions on Australian coal have started to hurt. This represents a 98.6% drop compared with 56.8 million tonnes in the same period in 2020.

Meanwhile, total Australian coal exports are up by just less than 400,000 tons compared with the first seven months of last year, representing a growth rate of 0.2%. Exports to India and South Korea have grown the most, up by 22.3 million tonnes (+96.3%) and 15.0 million tonnes (+72.2%) respectively. *Australian producer Whitehaven Coal's planned 10mn t/yr Vickery metallurgical and thermal coal project in the Gunnedah basin in northern New South Wales (NSW) has received approval from the federal and state governments of Australia. Whitehaven already received approval to extract 4.5mn t/yr of coal from Vickery but the firm expanded the scope of the mine in 2016 to extract 10mn t/yr. *After China unofficially boycotted Australian coal in last October, the flow of coal in the global world has undergone many radical changes.

Australia is the world’s largest exporter of coking coal, used in making steel and also the world’s second latest exporter of Thermal coal, while China is the world's largest importer of coal, and is followed by India and Japan. But the Asian giant had boycotted Australian coal as a part of major escalation of the two countries' trade conflict.

Indonesian Coal News:

* Indonesia recently brought forward its goal for net zero emissions from 2070 to 2060 or sooner, ahead of the United Nations Climate Change Conference in Glasgow in November.

But the country is wrestling with how to balance its environmental targets with the cost of pulling the plug on an industry that contributed $38 billion in export earnings in the first seven months of 2021. *Indonesian producers grappled to meet demand as heavy rainfall impacted operations in the Kalimantan province while supply tightness pushed up offer prices. The sellers who have cargoes are commanding prices as per their will and as the power plants are configured for a certain type of coal, the utilities are compelled to pay high prices to secure the cargoes. *Indonesia has set its coal benchmark price at the highest in over a decade, supported by surging demand in China, South Korea and Europe. The ministry set the benchmark coal price (HBA) at US$150.03 per ton in September, up 14.53 percent from the $130.99 per ton in August, and the highest since $116.65 per ton in November 2011. The rising power demand in China is exceeding the capacity of its domestic coal production. *The Indonesian government has walked back an earlier pledge to phase out all coalfired power plants, saying now that it will keep them running but fit them with carbon capture technology. The government’s “Long-term Strategy on Low Carbon and Climate Resilience 2050” says coal-fired power plants will still generate a large percentage of the country’s electricity over the next three decades, although it does bring forward the date for achieving carbon neutrality to 2060, a decade earlier than previously announced.

US Coal News:

* Coal demand and prices are booming as natural gas prices soar, but U.S. mining companies have not ramped up production to meet the new market conditions. Since climbing from a sharp drop in the early weeks of the COVID-19 pandemic, the overall U.S. coal supply response has been conservative. There are numerous CCAI Monthly Newsletter September 2021

| 31

reasons mines in the long-struggling sector have not ramped up production, including limited access to capital, uncertain demand outlook, labor shortages and the time it takes to increase supply. * Coal production in the US totaled 12.01 million st in this week up by 1% week on week and 11% from year-ago levels. US coal production stood at 415.98 million st, up 8.4% from the corresponding period of 2020. *US Gulf petroleum coke production may be disrupted for weeks after a Category 4 hurricane made a direct hit on the refining and shipping hub of New Orleans, Louisiana in Early September. This may disrupt the procurement planning of the petcoke buyers, who have been eager for US Gulf coke production to return to normal levels following the Covid-19 pandemic's impact on refined product demand.

Although refinery throughputs have risen in recent months, US Gulf high-sulphur coke production has remained lower than normal, in part because of a switch to lighter crudes.

Pet Coke News: * Adverse weather conditions in the US are having an ongoing effect on petcoal supply with loading at ports largely affected. Petcoke cargoes delivered into the Mediterranean region have been scarce in number during this week. Such tight supply and high demand among Mediterranean buyers have caused the US petcoke price to scale up significantly and the upward trend will continue till the supply becomes abundant. * The US petcoke export fell by more than 27% this week compared to the week before due to devastation caused by Hurricane Ida. Most of the petcoke was exported from the Gulf Coast region and some quantity was shipped from the West Coast. The low-sulfur West Coast petcoke traded at a record-high price amid robust demand in September. * Though import of thermal coal to the Power Utilities in the country increased by 3% on a m-o-m basis, import of petcoke by Indian cement companies declined significantly in August due to due to higher prices. The elevated

32 | CCAI Monthly Newsletter September 2021

prices of foreign-origin coal and petcoke is likely to push Indian cement companies to buy petcoke from domestic refiners instead of importing.

Shipping Update: *Ocean Conservancy releases a new report that makes the case for how major ports along the west coast of North America can lead the shipping industry’s transition away from fossil fuels to zero-carbon fuels such as green hydrogen and ammonia. The five ports featured in the new report – Los Angeles, Port of Oakland, Port of Tacoma, Port of Vancouver and Unalaska – accounted for over 300 billion U.S. dollars of trade. *The Ministry of Ports, Shipping and Waterways has approved the Shipping Corporation of India's Draft Scheme of Arrangement for the demerger of its non-core assets. The scheme mandates the formation or incorporation of a new wholly-owned subsidiary as a 'resulting company' for the demerger of non-core assets of the company. The state-owned Shipping Corporation of India had reported a 52.94 per cent decline in consolidated net profit to Rs 158.51 crore for the first quarter of the current fiscal. *Cargo traffic at the country’s major ports rose by 11.43 per cent to 57.59 million tons in August over the year-ago period. India has 12 major ports under the control of the central government — Deendayal (erstwhile Kandla), Mumbai, JNPT, Mormugao, New Mangalore, Cochin, Chennai, Kamarajar (earlier Ennore), VO Chidambarnar, Visakhapatnam, Paradip and Kolkata (including Haldia) had handled 51.68 million tons of cargo in August last fiscal, Indian Ports Association (IPA) said in a statement. * Strong rates across dry bulk vessel segments drove the Baltic Exchange’s main sea freight index to their highest since 2009. The overall index, which factors in rates for capesize, panamax, supramax and handysize vessels, rose 91 points, or 2%, to 4,651, to hit its near 12-year peak. Shipping analysts have attributed the recent rally in the dry bulk market to global shipping constraints, including port congestion in China, and an overall rebound in commodities.

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

SUB CO.

APR'20 - SEPT'21

ACTUAL THIS YEAR

ACTUAL SAME PERIOD LAST YEAR

ACTUAL SAME PERIOD LAST YEAR

% GROWTH

ECL

2.10

2.80

-24.50

14.30

18.00

-20.70

BCCL

2.10

2.00

5.70

12.40

10.10

22.60

% ACTUAL GROWTH THIS YEAR

CCL

4.10

4.80

-15.40

25.40

20.30

25.10

NCL

9.60

9.30

3.30

53.40

53.50

-0.20

WCL

2.50

2.50

0.80

18.50

16.50

12.00

SECL

8.00

8.50

-5.60

55.10

53.70

2.66

MCL

12.20

10.60

15.50

70.80

63.90

10.80

0.00

0.00

249.80

236.00

NEC CIL

0.00 40.70

40.50

0.40

5.80

OFFTAKE (Figs in Mill Te) SEPT'21

SUB CO. ACTUAL THIS YEAR

ACTUAL SAME PERIOD LAST YEAR

APR'20 -SEPT'21 % ACTUAL GROWTH THIS YEAR

ACTUAL SAME PERIOD LAST YEAR

% GROWTH

ECL

2.60

2.90

-11.30

18.60

19.20

-2.90

BCCL

2.50

2.40

3.80

15.50

10.40

49.10

CCL

5.00

5.90

-14.10

33.70

27.00

24.90

NCL

9.90

9.30

7.30

57.60

50.00

15.20

WCL

4.00

3.80

7.20

28.60

19.10

50.30

SECL

10.50

10.40

0.90

72.80

61.70

18.00

MCL

13.70

12.00

14.20

80.90

67.80

19.30

0.00

0.10

48.30

46.70

3.60

307.70

255.10

NEC CIL

0.00

20.60

CCAI Monthly Newsletter September 2021

| 33

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

August, 2021 42.60 4.96

August 2020 37.16 2.44

% Growth 14.6% 103.4%

April- August, 2021 209.16 25.40

April- August, 2020 195.54 14.79

% Growth 7.0% 71.7%

Overall Offtake (in MT) Company

August, 2021

August, 2020

% Growth

April- June, 2021

April- June, 2020

% Growth

CIL SCCL

48.63 4.99

44.40 2.80

9.5% 77.9%

259.33 26.71

208.48 14.18

24.4% 88.4%

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

August, 2021

August, 2020

% Growth

April- August, 2021

April- August, 2020

% Growth

CIL SCCL

38.61 4.08

34.64 2.36

11.4% 73.2%

205.90 22.16

161.87 12.03

27.2% 84.2%

Company

Coal Qty. Allocated August, 2021

Coal Qty. Allocated August, 2020

Increase over notified price

Coal Qty. Allocated April-August, 2021

Coal Qty. Allocated April-August, 2020

Increase over notified price

CIL

2.69

3.44

74%

12.23

14.23

42%

Spot E-auction of Coal (in MT)

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

Coal Qty. Allocated August, 2021

Coal Qty. Allocated August, 2020

Increase over notified price

Coal Qty. Allocated April- August, 2021

Coal Qty. Allocated April- August, 2020

Increase over notified price

CIL

6.38

0.00

31%

17.34

8.04

22%

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

Coal Qty. Allocated August, 2021

Coal Qty. Allocated August, 2020

Increase over notified price

Coal Qty. Allocated April- August, 2021

Coal Qty. Allocated April- August, 2020

Increase over notified price

CIL

7.98

6.47

45%

19.75

13.44

25%

Special Spot E-auction (in MT) Company

Coal Qty. Allocated August, 2021

Coal Qty. Allocated August, 2020

Increase over notified price

Coal Qty. Allocated April- August, 2021

Coal Qty. Allocated April- August, 2020

Increase over notified price

CIL

0.00

0.00

-

1.75

1.82

15%

Special Spot E-auction Scheme 2020 For Import Substitution Company

Coal Qty. Allocated August, 2021

Coal Qty. Allocated August, 2020

Increase over notified price

CIL

0.61

-

29%

34 | CCAI Monthly Newsletter September 2021

Coal Qty. Allocated April- August, 2021 2.28

Coal Qty. Allocated April- August, 2020 -

Increase over notified price 44%

CCAI Monthly Newsletter September 2021

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