Coal Insights - Feb 2012

EDITORIALChief EditorRakesh Dubey, Tel: +91 91633 48159, Email: [email protected]

Executive EditorArindam Bandyopadhyay, Tel: +91 91633 48016Email: [email protected]

Editorial BoardAlok Srivastava, General Manager, MMTC LtdAmitabh Panda, Group Director (Shipping & Logistics Operations), Tata Steel GroupAnirudha Gupta, Director, P&H JoyMining Equipment India LtdAshok Jain, Managing Director, Saumya Mining LtdDeepak Bhattacharyya, Head – coaljunction, mjunction services ltdGanesan Natarajan, WT Director, President & CEO, Ennore Coke LtdLawrence Metzroth, Vice President – Analysis & Strategy, Arch Coal IncM K Palanivel, President – All India Bulk, Samsara GroupP S Bhattacharyya, Managing Director, Haldia Petrochemicals LtdS N Choubey, Head – Commercial, ABG Cement LtdSandeep Kumar, Managing Director, S & T Mining Co Pvt LtdSuresh Thawani, Managing Director, Tata Sponge Iron Ltd

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Dear Readers,

There are two ancient Indian adages which go like this – “a little more of anything is never too bad,” and (at the same time), “too much of anything can never be good”. It is difficult to imagine that the creators of these sayings had the state of Indian policymaking in mind while formulating them so many centuries ago. However, standing at the present juncture, and witnessing the strange ways of governance, one cannot but find them truly representative of the times.

Look at the Indian coal industry, for instance. There were too many developments crowding the February calendar. Among them all, the pick of the lot are two “roll-backs”, namely the GCV based price increase and the CEPI based moratorium. The first one has already been implemented; the latter is in the pipeline.

If the shift to GCV based pricing had suddenly heated up the coal market in the wintry days of January, it has cooled down with equal ease and alacrity. Coal prices that went up by an average of 12.5 percent came down at the stroke of an order. But take heart, it may rise again, barely a month later. And who knows…!

The decision of the second roll-back, ie of CEPI restirctions, was recently made public as the coal ministry released the minutes of the fifth meeting the Group of Ministers (GoM). According to the communiqué, the ministry of environment and forests (MoEF) declared that it is ready to lift CEPI restrictions (on new projects and expansion of existing ones) once the state pollution boards submit plans to mitigate pollution in heavily polluted clusters. From the MoEF declaration, it was clear the pollution in those areas is still way above the permissible limit. If it is so, one is tempted to ask, what did the MoEF achieve by the moratorium? And if it has not achieved its objective, why lift the restrictions?

It’s where the old adages fit in. You plan a lot, then do something in haste, only to face massive opposition, and then give up showing some lame excuse, waste a lot of time in the process and go back to where you started. So much for contemporary Indian governance!

That apart, developments in the coal sector were more or less along the expected lines. S. Narsing Rao, the incumbent CMD of Singareni Collieries Company Ltd (SCCL), has been tipped by Public Service Enterprises Board (PSEB) to be the next chairman of Coal India Ltd (CIL). The Prime Ministers Office has asked CIL to sign FSAs with power generators. And the Indian coal consumers continue to face scarcity of the dry fuel.

One interesting story brought out in this issue is that of why and how the Indian steel mills (ISM) should consider forming a forum to exercise the power of collective bargaining to get better deal from coking coal miners, something that Japanese Still Mills (JSM) have been doing for quite some time now.

Happy reading,

Warm RegardsRakesh DubeyChief Editor

COAL INSIGHTS 4 FebruAry 2012

30 | FEAturEGCV to boost coal testing biz in IndiaInspection agencies bullish about 20% growth year-on-year.

51 | CorporAtENarsing rao tipped to become CIL chairmanPSEB has recommended the SCCL chairman for the coveted post.

COnTEnTs

06 | CoVEr StoryCan Indian steel mills benchmark coking coal prices?It is high time the industry realises the benefits of collective barganing.

19 | INtErVIEwBCCL all set to achieve 30-mt production India’s only major coking coal miner achieved 23 mt production till January.

52 | CorporAtEAdani power hit by high coal import costThe power utility has slipped into the red in the third quarter of FY12.

20 Indian thermal coal imports remain subdued in Feb

22 Spot coking coal prices ease in February 23 CILconfidentofFY13,12thPlanproduction

targets 26 ‘Captive’woescontinue,blockstomissFY12

target 28 CILcutspricetillMarch,delinkspricesfrom

imports 32 Steam coal import market looking up 33 SCCL Jan coal production up 5.63% m-o-m 34 CIL unions hail NCWA IX, contract workers’ pact

by April 36 CoalconsumerscryforregulatorasBillhangsfire 37 MoEFtoliftCEPIafterreportofStatePCBs 38 Indian plants generate 73,396 MU power in Jan 40 PMO asks CIL to sign FSAs with power

generators 42 India’s Dec cement production up 44 Sponge iron makers slash production to tide over

crisis 45 Sponge iron Q3 production down 21% y-o-y 47 25 countries in mining show 50 CoalIndiaposts54percentjumpinQ3profit 54 Mahagenco coming up with 13,940 MW capacity 56 Jhariacoalfieldsmustbeevacuatedtoaugment

coking coal production 58 Procedureforcoalblockauctionbycompetitive

biddingnotified 59 US power sector coal consumption to decline in

2012: EIA 61 India-Australia trade to reach Rs 2,000 billion by

2015 62 IndianRailwaysApr-Jancommodityfreight

revenue up 9.7% 63 CIL toinvest `6,000cronrailinfrastructure 64 Porttrafficdown0.24%y-o-yinApril-Jan 66 All India energy generation programme 78 Major ports through which coal arrived in India


Can Indian steel mills benchmarkcoking coal prices?Can Indian steel mills benchmarkcoking coal prices?

First, some quick facts! A newly independent India produced 1 million tons

(mt) of steel in 1947. Around 40 years later, in 1991, a newly liberated economy garnered a production capacity of 14 mtpa. Another 20 years on, in 2011, an emerging super-power flaunted a capacity of 78 mtpa. Finally, 10 years from now, by 2021, the steelmaking capacity in a “developed” India would reach around 200 mtpa.

That is a long way to development. It may take around 70 years and 199 mtpa of steelmaking capacity for an under-developed nation to graduate to a developed economy. But it will also take a quantum jump in power and cement and ‘n’ number of “building” materials that lay the foundation of a developed economy; every sense of the word. And yet, most importantly, it will take abundant natural resources to fuel the

growth in them all. As every talk about economy boils down to the stock

market, every discussion on steel, in India, boils down to iron ore. Despite being abundant in reserves, this raw material captures the imagination of any project planner, primarily due to government’s flip-flop and ad hoc policies. In comparison, and strangely enough, there is hardly any botheration about coking coal, the other major input required.

Much in contrast with iron ore, India is critically short of this natural resource. The proven reserve of prime coking coal is only 4.6 billion tons, miniscule in comparison with its vast proven reserves of non-coking coal (95 billion tons). More importantly, the quality of coking coal available is quite inferior, so much so that sometimes costlier imports prove more economical.

“Let us never negotiate out of fear. But let us never fear to negotiate.”John F. Kennedy

Arindam Bandyopadhyay

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As of today, India’s coking coal consumption is around 55 million tons (mt), while 25 mt is the domestic production. As a result, around 30 mt or 55 percent of India’s coking coal requirement is met by imports, 85 percent of which comes from Australia. With the ambitious growth in steelmaking, coking coal demand in the country is set to jump by as much as 22 percent in FY12. By 2020, coking coal import by India’s expanding steel sector is expected to treble from current 30 mt to 90 mt, according to an estimate.

This would put another feather in the cap for this now desperate-for-recognition economy. With such growth in imports, India would possibly become the largest importer of coking coal a few years on, surpassing current lead runners China and Japan. Among these two, China (despite importing around 45 to 50 mt of coking coal in 2011) is much more self-sufficient, producing the vast majority (over 500 mt) of the dry fuel from its own mines to feed its giant steel plants. Japan, in contrast, is almost entirely dependent on imports.

Between the two, India should find greater resemblance to the island nation of Far East Asia. As they grow their steel output, the Indian steel mills (ISM) would increasingly face the problem of import dependence for coking coal procurement. But whether they will take a lesson from their Japanese counterparts – the well-knit Japanese Steel Mills (JSM) – in

turning their weakness into strength, and dictating terms in international price benchmarking, is a matter to wonder about.

Apparently, the India Inc. seldom displays the spirit of unity barring their fight against government policies. This is quite unlike the Chinese or Japanese firms that on numerous occasions have made joint moves in matters of national interest. But in the age of globalisation, such a lacklustre approach from Indian corporates may cost not only national interest, but more importantly, individual bottomlines!

The Japanese modelJapan, the world’s second largest steelmaker after China, produced around 107.6 mt of steel in 2011. This, of course, is way below China’s 695.5 mt of steel production, but the JSM is revered for two reasons – first, the quality of steel produced by the country; and second, the collective bargaining power that sets the benchmark for coking coal prices internationally.

As of 2011, Japan’s total coal imports were 175.2 mt, a shed below China’s 182.4 mt. Japanese coal imports dropped by 5.1 percent, in line with the fall in its steel output, in the aftermath of the tsunami strike and nuclear disaster. On the contrary, China witnessed a 10.8 percent rise in coal imports, again keeping with the trend in its steel output.

Of the total coal imports by Japan, coking coal accounted for around 74 mt. This, however, was higher than China’s import of 45 to 50 mt, making Japan the largest importer of coking coal in the world. The majority of Japan’s coking coal import is sourced from Australia. Lately, Indonesia has also started figuring in the country’s coking coal import basket.

The collective influence of JSM on coking coal price dates back to the 1980s. Leveraging on Japan’s dominant position in the regional coal market and the relative importance of coal in Australia’s export basket, the JSM started exerting influence on coal pricing arrangements.

Type and category-wise coal resources of India(in million tons)

type of Coal proved Indicated Inferred total (A) Coking

- Prime Coking 4614.35 698.71 0 5313.06 - Medium Coking 12572.52 12001.32 1880.23 26454.07 - Semi-Coking 482.16 1003.29 221.68 1707.13

Sub-Total Coking 17669.03 13703.32 2101.91 33474.26 (B) Non-Coking 95738.76 12368.44 31488.11 250895.31(C) Tertiary Coal 593.81 99.34 799.49* 1492.64Grand Total 114001.60 137471.10 34389.51 285862.21

* Includes 749.92 M.T. of inferred resources established through mapping in North-Eastern region. Source: Geological Survey of India

Japan’s coking coal imports by source (December 2011)(in tons)

Country tD Dec Dec Nov Nov M/M yr/yr ytD* ytD tD

(yr/yr %)Name tons $/tons tons $/tons % % tons $/ton tons

China 77,351 171.74 23,973 178.00 222.7 6.8 1,098,188 251.31 82.2Indonesia 1,145,693 136.19 1,444,516 150.04 -20.7 -17.0 14,655,845 133.35 -18.4Russia 141,643 214.63 204,243 255.27 -30.6 0.7 2,527,126 249.75 10.0Canada 672,571 300.59 429,324 287.53 56.7 -18.4 7,344,661 274.40 -14.2USA 362,264 319.31 682,146 294.51 -46.9 36.1 5,725,355 268.03 111.9Australia 2,577,034 244.27 3,784,261 263.13 -31.9 -33.5 36,737,577 246.97 -16.5Total 5,141,958 231.98 6,568,463 242.56 -21.7 -21.6 68,644,785 227.74 -10.5

* Japanese fiscal year runs from April to MarchSource: Japan’s customs department, ministry of finance


According to the Australian Bureau of Agricultural and Resource Economics** (ABARE), from the mid 1980s, “Coking coal prices paid by Japanese steel mills, and broadly followed by Asian steel mills more generally, were based on the Japanese benchmark pricing system. Under this system, coking coals were grouped and priced by coal category, where coal categories included hard, soft and semisoft coking coal. The absolute price of a coal brand within a given coal category was negotiated relative to the benchmark coal with known quality characteristics. After Japanese fiscal year (JFY) 1994, the soft coking coal category was merged into the traditionally lower priced semisoft coking coal category.”

In JFY1996, Japan replaced the benchmark pricing system for coking coals with the ‘fair treatment’ pricing system “whereby, it was argued, each coal brand would be valued according to the quality requirements of specific Japanese steel mills. Under this arrangement, however, coal prices and other contract details would remain confidential. The fair treatment system was introduced after substantial coking coal price increases in the JFY1995 negotiations, following several years in which coking coal prices were consistently reduced in real terms.”

The 1996 negotiation came at a time when Australia – then the world’s largest coal exporter, an honour now wrested by Indonesia – accounted for around 29 percent of world coal exports, and Japan – the then world’s largest coal importer, replaced by China in 2011 – lifted 26 percent of global coal exports.

While ABARE researchers alleged lack of transparency in the coal market and called for export diversification strategy for better price realisation, JSM was focused on extracting maximum advantage from its dominant market position. And it was not restricted to coking coal alone.

In March 2009, Japan forced Australian coal producers to take a 44 percent cut in thermal coal contract, in the first major price deal that year. This happened when Rio Tinto and Australia’s biggest thermal coal exporter, Xstrata, settled thermal coal prices at $70 to $72 a ton with Japan’s Chubu Electric. The move, according to some estimates, represented a $5 billion hit to the exporting country’s national export revenues. In fact, thermal coal is Australia’s third largest export earner after coking coal and iron ore. Japan, in this case, took advantage of reports on a slowdown in the Chinese economy.

And it was not only with Australia. In the post-earthquake and tsunami period, Japan coal buyers drove hard bargains in China as well, dragging feet to agree on new deals and thus clinching “soft” prices.

India’s compulsionsWhat if Indian steel mills choose not to toe the Japanese line? What if they prefer to stay comfortable within their own backyards, and follow benchmark prices set by JSM for all time to come? Well, if nothing else there could be a significant loss of potential benefits, industry sources suggest.

As of today, all of the major Indian steelmakers – SAIL, JSW, RINL, Tata Steel, JSPL, Essar – procure some part or their entire requirement of coking coal from overseas miners. Only the integrated steel plants – such as SAIL and RINL – get some portion from Bharat Coking Coal Ltd (BCCL), the only major producer of coking coal in India.

Tata Steel is a notable exception, having acquired coking coal mines (through joint ventures) in Australia (Bowen Basin in Central Queensland) and Mozambique (Benga Coal Project). The company mostly sources the fuel from its own overseas operations for its steel plants in Europe, Asia and elsewhere. This, however, remains a rarity in the Indian steel vertical. Except for very few players – that includes coke maker Gujarat NRE Coke Ltd – acquisition of coking coal mines have not been on the radar of the Indian corporate entities.

Nevertheless, almost all the major Indian steelmakers have embarked on very aggressive expansion plans to increase installed capacity. SAIL has aimed to increase its annual hot metal production capacity from the current 13.8 mt to 24 mt by FY13.

Accordingly, the company’s coking coal import could increase from current 13 to 14 mt to 21 mt by the next few years. Similarly, the annual coal consumption of JSW, the country’s largest private sector steelmaker, will reportedly double from current 7.4 mt to 14 mt by next two years.

Even if the Indian steel sector fails to achieve the targeted 10 percent production growth annually, coking coal consumption by all the major steel companies would grow immensely by 2020. SAIL has targeted to have a capacity of 60 mt by that year. RINL, another public sector unit, has chalked out an expansion from current 6.3 mtpa to 20 mtpa by 2020. JSW, on its part, has planned 34 mtpa production by then, from 14.3 as of March 2011. Most of this expansion would be undertaken through Blast Furnace/Basic Oxygen Furnace (BOF) route, which require coking coal as primary raw material. Attempts are being made by a few companies to adopt the Corex/Finex technology, whereby thermal coal can be directly used for ore reduction and melting work. But the initial investment

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** ‘Australia’s coking coal exports to Japan’ by Anthony Swan, Sally Thorpe and Lindsay Hogan

JhariacoalfieldsofBCCL


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requirement is substantial and there is significant technology barrier in terms of patent rights.

As a result, such prolific expansion in India’s steel making capacity cannot but be achieved without a huge surge in coking coal imports. As estimated by Mark Pervan, Head of commodity research at the Australia and New Zealand Banking Group (ANZ), India may triple coking coal imports as early as 2015. He estimates that India’s coking coal imports will go up from current 30 mt to 90 mt by 2015 surpassing Chinese coking coal imports. By comparison, China’s coking coal imports may be at most 70 mt by 2015.

“I think India will become a bigger importer than Japan and China, the current leaders in importing coking coal,” Pervan was quoted as saying.

While ANZ estimate may seem to be a little on the higher side, another estimate by Merlintrade & Consultancy Ltd put India’s coking coal imports at 90 mt in 2020.

Going forward, there will be two factors that may compel the Indian steelmakers to look for changes in their procurement strategies. Firstly, the availability may become a concern, and secondly, the pricing issue may crop up with increased global demand – the second factor essentially being an upshot of the former.

Global supply to tighten Currently, the coking coal market is ooverwhelmingly dominated by mining giants including BHP, Walter Resources, Peabody, Massey, Banpu, Xstrata, Yanzhou, Glencore, Anglo, Arch, Rio, James River. The major supplier countries are Australia, US and Canada.

The global trade of coking coal stood at around 250 mt in 2011. The big three importers – China, Japan and India – together accounted for around 155 mt or 62 percent of this market.

As estimated by Merlintrade & Consultancy, total seaborne trade would increase to around 415 mt by 2020, of which the top three importers – India, China and Japan – would claim a share of 271 mt or 65 percent. This, however, may be a conservative estimate. If India can achieve its planned

expansion, and Japan’s consumption does not come down dramatically, the share of these three countries may go up further.

On the supply side, Australia would continue to dominate the market with export of 255 mt in 2020, with a share of 61 percent, same as in 2010. While new suppliers like Mongolia, which has started feeding the Chinese market, would come up in due course, Australia’s domination would hardly wane. US, on the other hand, is likely to see a drop in exports; this however would not impact the Indian companies which do not receive much of the material from that country.

Top met coal seaborne exporters (in mt)

Country 2008 2009 2010 2020

Australia 134.3 130.0 158.8 255.0

US 35.3 29.9 47.8 25.0

Canada 25.4 20.1 27.0 50.0

Others 25.6 22.5 30.5 85.0*

Total 220.6 202.5 264.1 415.0*Including Colombia, Russia, Indonesia, Mongolia, New Zealand and Mozambique

Top seaborne met coal importers (in mt)

Country 2008 2009 2010 2020Japan 66.5 52.5 62.6 71.0China 6.9 37.0 53.0 110.0India 26.8 26.8 37.2 90.0South Korea 21.9 15.0 18.4 38.0Brazil 17.9 15.0 18.4 38.0Others 81.0 51.0 66.3 75.0Total 221.0 202.0 260.7 415.0

Source: Merlintrade & Consultancy Ltd

In coming years, experts say, the demand boom from China and India would lead to a demand-supply gap in global trade of coking coal. This is particularly feared for premium quality coking coal market, where there will be not enough resource to supply. The share of high quality coking coal, in countries having significant coal deposits, is less than 1 percent of proven reserves. The requirement however is much above that percentage.

Also, there would be limited new production from countries like Mozambique, Indonesia and Mongolia, at least until 2015-16. US may have already reached the stage of decline and is expected to see steady fall in exports, going forward. Canada may emerge as a bigger player, but Australia’s shipping constraints would pose a threat.

A major factor leading to tightened supply scenario could be the fast depletion of China’s own reserves. Coking coal

AerialviewofGujaratNREcollieryinNewSouthWales


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reserves comprise about 20 percent of the country’s total coal reserves, but in terms of production, its share is higher than that. According to industry reports, the thick coal seams in Shanxi coal mine is already showing significant thinning. If the country decides to conserve its own resources for future, there would be massive pressure on the global market. This could be a likely scenario; given that the country’s coking coal import has increased eight-fold in a gap of two years (2008-10).

The tightening of supply would intensify competition among the mining companies for tapping new sources. The recent fierce competition among mining giants for long term rights of Mongolia’s Tolgoi coal mine is a case in point. The aggressive bidding for properties coupled with growing supply gap would invariably lead to pricing pressure for this vital raw material.

Pricing implicationsCoking coal prices have shown a significant uptrend over the last seven years with periodic jerks caused by natural disasters of global economic crises. From the level of $130 per ton fob in 2005, coking coal prices have increased to around $230 per ton fob as of now. In between, there was a slight downtrend in 2006 followed by a sharp increase in 2008 and then again in 2011.

The latest of these spikes was caused by the Queensland floods. The consequent production loss had demonstrated how much such unforeseen supply disruptions can impact prices in the international market. In a matter of a few months, coking coal contract prices had shot up to $320-325 per ton fob Australia in early 2011 from the level of $230 per ton fob.

Mid-term projections for coking coal prices vary widely, starting from a firming up of prices to $350 per ton fob to a slide to below $200 per ton fob level by 2015. There however is little doubt over an upward movement in the long term.

As for the Indian buyers, average imported coking coal price has shown a 42 percent increase over the last decade. However, the periodic spike during 2008 showed a much greater impact as prices increased to as much as $460 per ton cif India in August 2008 from the level of $150 per ton cif a year ago. While prices receded to $180 per ton cif in December

2008, there has been a steady increase ever since, barring the modest corrections in early 2011.

In the international price contracts, a recent major development has been the shift by Australian miners to quarterly contract with JSM from annual contracts. Currently, Australia has finalised the price of $235 per ton for the current quarter. Going forward, industry sources said, pricing of coking coal might get changed to monthly basis from the present quarterly system.

“The shift from annual contract to quarterly contract has already made prices more volatile in nature. Further shift to monthly contract will increase the volatility factor even more,” an industry analyst said.

The tightening of supply and increased price volatility of coking coal in the international market would in turn impact the production cost of steelmakers. Given other factors, steel product prices show remarkable overlapping with movements in hard coking coal prices. Depending on the prevailing steel demand scenario, this movement in coking coal prices would affect their margins in varied degrees.

Forecasts on coking coal prices vary consirdably among market analysts ($/ton)

Source: Merlintrade & Consultancy

180

140 150180 180

230 245

190

460

265

360

255

0

50

100

150

200

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300

350

400

450

500

2001 2005 2006 2007 Aug-08 Dec-08 2009 Jan-10 Nov-10 Jan-11 Jun-11 Jan-12

YEAR

PR

ICE

IN U

S$

CIF INDIA

Average coking coal price ($/ton)

Source: Ennore Coke

Hard coking coal price

Source: resource-net.com


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Challenges for coke makers The expected tightening in coking coal market would also affect another intermediary segment of the Indian steelmaking vertical, namely the Indian coke makers.

Currently, coke plants in India have installed capacity close to 30 mt. Integrated steel plants have their coke making capacities, estimated at 19 mt. Secondary steel producers have captive installed capacity of 4 mt, while merchant cokeries have the remaining installed capacity of 7.2 mt.

As for merchant cookeries, the average capacity is around 30,000 tons per annum or below. Of the total capacity of 7.2 mt, around 5.2 mt comes through small/tiny coke plants. The majority of Indian coke plants are spread in clusters around Orissa, Dhanbad and Gujarat.

The coke making segment faces numerous challenges. Although current installed capacities are 7.2 mt, output from these plants is always around 2-2.5 mt, said Ganesan Natarajan, Whole Time Director and President, Ennore Coke Ltd.

“Coking coal is the key challenge because of the size and inventory,” he said. Any spike in coking coal price invariably

leads to an upward momentum in coke prices. For instance, during August 2008, when coking coal prices touched $460 per ton cif, coke prices had shot up to $750 per ton from $350 per ton a year ago. In line with the increase in coking coal prices from $180 per ton cif India to $255 per ton cif India over the last 10 years (2011 to January, 2012), coke prices have jumped to from $ 300 per ton $440 per ton.

Along with price increases, the availability is also becoming a concern. Deficit of met coke in expected to rise to 28 mt in 2015 from 12 mt in 2009-10, Natarajan said.

“The Indian steel industry is currently facing huge challenge to meet their coke requirements. Most of the integrated steel plants are already increasing the coke making capacities, but not equivalent to the steel capacity increase. Additionally, Chinese export of coke is not happening from 2009,” he said. Also, the logistics constraints pose a major concern for the segment. Needless to mention, the challenges would become only steeper if corrective measures are not taken at the earliest.

Benefits of a conglomerateKeeping in view the emerging scenario in the global coking coal market – the likely tightening of supply, upward pressure on prices, unavailability of too many blocks to target acquisition, and above all the unavoidable expansion in steel output – the idea of joining forces to exert market influence is not a bad idea, industry sources said. However, the doubt remains if the Indian companies can put up a show of solidarity to extract the benefits of joining forces. As of today, none of the major steelmakers seems to be forthcoming about such a united approach.

While the country’s coking coal imports may not be very substantial today, such a conglomeration will be a great tool for negotiation, going forward. A bilateral negotiation with Australia may bring significant cost advantage for the Indian steel industry in the not so distant future, say 2020, when the former would have nearly 20 percent share of global imports and over 35 percent share of Australian exports.

Spot hot rolled coil (band) price vs hard coking coal settlement prices

Source: Merlintrade & Consultancy

Bokaro 2.50

RINL 2.50

TATA Steel 3.00 Rourkela

1.20

Bhilai 2.60

Durgapur1.30

IISCO 0.60

Bokaro Durgapur Bhilai Rourkela IISCO TATA Steel RINL

Integrated steel plants with captive coke making plant (mt)

Source: Ennore Coke

300

180

320

190 195

140

350

150

750

460

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350

180

350

205

420

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430

245

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440

255

0

100

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300

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600

700

800

2001 2005 2006 2007 Aug-08

Dec-08

2009 Jan2010

Feb2010

Nov-10

Jan-11

Apr-11

Jan-12

YEAR

COKE PRICE C.COAL PRICE

Coke vs coking coal ($/ton)

Source: Ennore Coke


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Industry sources, however, point out that benchmarking prices may not be a feasible proposition, but a combined approach would definitely deliver goods.

“A cartel or conglomerate cannot dictate price because benchmark prices will remain fixed. What it can do is only dictate better terms and conditions for procurement of coking coal from leading miners. For example, today benchmark contract price for January-March quarter is $235 per ton, but people on the sidelines are signing deals at $210 or $215 or $200 and here this cartel can play a crucial role in negotiating attractive prices,” said Natarajan.

Contrary to popular conjecture, industry sources said, it is not only small buyers, but also the big players who will benefit from this conglomerate approach. Sometimes it happens so that a buyer with good connections can negotiate at lower price and those not having not good connections are forced to buy at slightly higher price.

“If the conglomerate is formed, that thing will not happen and whether the buyer is big or small, having good contacts or not, will get the same price. Today SAIL or Tata Steel or MMTC, whoever, they are not getting at cheaper price as they are getting at benchmark prices,” they said.

But that is not all. A conglomerate would not only fetch price advantages, but may also help negotiate a better term. “For instance,” said Natarajan, “today the contract price is $235 per ton and it is falling. Now what will happen is I have taken exposure at $235 and the price fell to $210 or $205. This $30 is not ordinary change because that will have impact of around $50 a ton in coke making….Now here the conglomerate will play a critical role by negotiating to defer the deliveries.”

Right now only big buyers have this advantage of deferring deliveries if they have contracted at a higher price and then the spot prices have fallen. If there is a conglomerate, everyone will get the benefit of same terms and conditions. Such collective negotiation would not only help coking coal procurement, but that of thermal coal as well, from Australia.

This is so because after 2013, Indonesian coal prices may go up, as the government is planning to restrict export of cheaper grade of coal and fix a benchmark price for its exports. In such circumstances, Australia will become an automatic choice for thermal coal procurement. “Not only coal, today people are talking about importing iron ore as well from Australia. Not only this, companies like NMDC have already acquired iron ore mines in Australia and there have been many cases of Indian companies acquiring coal mines in that country,” the sources said.

Most of the iron ore mines in Australia have low grades of iron ore, but they do high amount of concentrates after washing in the range of 68-70% Fe. Overall, the volume of imports from Australia, including iron ore and thermal coal, will be a little too voluminous. The benefits, therefore, of a combined approach would be huge, and the potential losses equally significant, they said.

Only if the India Inc. wakes up to the threat and the opportunity!


InTERvIEW

Excerpts:

What is the current production scenario in BCCL? What is your yearly target for FY12? Do you find it achievable?The production target for the current fiscal (2011-12) is 30.2 million tons (mt). We think it is achievable. We have already produced 23.23 mt till January 2012. The balance target, although difficult, is achievable.

BCCL is an important source for coking coal in the country. What are your views and outlook on the coking coal market in India?There has always been a demand-supply gap in coking coal in India. With the finalisation of tenders for construction of new coking coal washeries at BCCL, the raw coking coal production can further be enhanced. Raw coking coal production will increase manifold on execution of Master Plan in the next 10 years.

With the commissioning of new washeries, washed coking coal production will also increase manifold, thereby reducing the demand-supply gap. We hope that dependence on import of coking coal by the Indian steel sector will reduce making them more viable.

Do you have any plan to introduce new coking coal projects in the future?Yes, we do have a number of projects at the planning stage. The future coking coal projects will mainly be from the implementation projects of Master Plan and new MDO concept based underground (UG) projects like Madhuband, Moonidih, Kapuria, among others.

What plans do you have to increase the supply of washed coking coal? What steps have been taken by BCCL to set up new washeries?Out of 20 washeries to be set up in Coal India Ltd (CIL), BCCL

has been entrusted to set up 6 washeries of 18.6 million tons per annum (mtpa) capacity. Out of these six, tenders for two, namely Madhuband and Patherdih, has been finalised. EMP clearance has been obtained.

The construction is expected to be completed within one-and-a-half years. The tender for the third one, Dugdha, is in the final stage.

With the addition of new washeries, around 20 mt of raw coking coal will be required as input and the expected quantity of washed coking coal will be around 10 mt. With the existing capacity of 2 mtpa, BCCL will be in a position to supply 12 mtpa to the steel plants.

Additionally, BCCL has tied up with different integrated steel plants (ISPs) for raw coking coal supply on year to year MoU basis. This will further enhance the availability of washed coking coal and reduce the uncertainty of steel sector as far as import of coking coal is concerned.

Your MoUs with Indian steelmakers on coking coal prices ended in March 2011. Has there been any revision in prices thereafter? Do you have any plan to command international parity price for supplies to steel makers, going forward?Memoradum of undesratnding (MoU) on year to year basis has been concluded. As for commanding international parity price for domestic coal, at this stage we can only say that we are moving towards that direction.

You were planning to introduce Rapid Loading System to speed up despatches. What is the status of the plan?The work order for 5 mtpa Rapid Loading System at Mahespur has been issued. As per work order, the job is to be completed in three years, but we are trying to expedite things. We intend to finish the work within the a period of two years.

BCCL all set to achieve 30-mt productionArindam Bandyopadhyay

Bharat Coking Coal Limited (BCCL), a subsidiary of Coal India Ltd with its headquarters in Dhanbad, is operating coking coal mines in Jharia and Raniganj Coalfields. The company, which was taken over by the government in October 1971, is the major producer of prime coking coal (raw and washed) in India.

In an exclusiveinterview to Coal Insights, CMD of BCCL, T.K. Lahiry, said the company is targeting a production of 30.2 million tons (mt) in 2011-12. With the existing capacity of 2 mtpa, BCCL will also soon be in a position to supply 12 mtpa of washed coal to the steel plants.


The Indian thermal coal market remained subdued despite a pick-up in enquiries and a couple of deals that took place in February, according to market participants.

Both consumers and traders are not bullish or ready to take a position in this market mainly because of financial problems.

The power prices are too low while coal prices are still too high, with the local currency, the Rupee hovering around 49-50 to the US dollar. Some sources said recent enquiries were not translating into deals.

Australian thermal coal of heating value of 6,300 kcal GAR is currently being offered at around $116 per ton against $119 per ton quoted at the beginning of February. Offers of South African thermal coal of heating value of 6,000 kcal NAR firmed up by $3 per ton to $107 per ton. Offers for Indonesian coal of heating value of 5,900 kcal GAR is hovering around $93 per ton, while that of heating value of 5,000 kcal GAR is at $73 per ton.

There were reports that an Indian trader bought a March Richards Bay cargo at $105 per ton. However, according to sources such deals are rare “and they don’t reflect the real market picture.”

Binani Cement and Jaypee Cement are understood to have made enquiries for South African coal in the last few days while Ambuja Cement has been reported to have booked a South African cargo, but the quantity and price was not revealed.

Traders said deals are done only if the coal is required on an urgent basis. No one is buying to stock the coal, and small power projects are also buying low grade coal with high ash.

Another reason for the lack of buying interest is players are busy closing their financial year which ends March 31 and preparing their budget allocation for 2012-13.

Coal stocks at various ports are estimated in the range of about 8 to 8.5 million tons (mt).

Indian buyers are quoting prices way below market rates, citing bids of around $100 per ton fob for prompt Richards Bay cargoes against offers of around $105 per ton.

South African market firmMeanwhile, the South African physical thermal coal market firmed slightly with producers covering short positions and Indian buying interest said to be buoying prompt March levels in particular.

However, there did not seem to be much reason for the continued strength in Richards Bay fob prices, as these levels remain too expensive for Chinese buyers.

Meanwhile, bids in China are seen at $112 per ton cfr for Colombian material and Richards Bay would have to come down to at least $99 per ton to become attractive. Sources said Chinese coal stocks were healthy with domestic prices more favourable.

Indian thermal coal imports remain subdued in Feb

Coal Insights Bureau

COAL mARkET funDAmEnTALs

Thermal coal prices Jan 2012 ($/ton)

Date South African Coal (6000 Kcal NAr)

Australian thermal coal (6300 GAr)

Indonesian (5900 Kcal GAr)

Indonesian (5000 Kcal/GAr)

Freight from SA to west Coast

From Indonesian to west Coast

From SA to East Coast

From Indonesia to East Coast

1-Feb 104.65 119.25 98.5 77.5 17.3 11.8 16.5 10

3-Feb 105.9 121 99.25 78 17.3 11.8 16.5 10

6-Feb 105.65 121.5 101 78 16.75 9.35 16.5 8.9

9-Feb 104 115.7 99.8 77.4 16.75 9.35 16.5 8.9

10-Feb 103.6 116.35 98.8 76.7 17.5 9.9 19 9.4

13-Feb 103.9 116.15 97.6 76.2 17.5 9.9 19 9.4

14-Feb 103.8 116.2 95.7 74.7 17.5 9.9 19 9.4

15-Feb 104.75 116.2 94.7 73.9 17.5 9.9 19 9.4

16-Feb 105.1 117 94.35 73.9 17.5 9.9 19 9.4

20-Feb 107.3 116.2 93 73 18.9 10.7 21 10.2


The dollar had weakened against the Indian Rupee recently, making dollar-denominated coal cheaper for Indian buyers, which would explain increased buying interest.

In the meantime, the dry bulk freight rates have continued to drift lower, with Colombian and Russian shipments looking favorable into the Pacific area and “altering coal trade dynamics.” The freight rates are expected to fall further with a surge in new vessel deliveries, which will be positive for demand, as lower rates encourage coal imports.

In the European-delivered CIF ARA market, no deals were heard, although bid and offer indications firmed by around 50 cents. Trading sources noted that there remained an oversupply of Colombian and US coal in the market.

A research note said that stockpiles at European ports remain high, with utilities still unwilling to purchase coal from ports and move it to plants despite the cold winter across Europe. It added that a continuation of the cold weather could boost spot demand, but the colder weather seems to have been factored into prices already, with the recent cold spell having little effect in bolstering levels.

Indonesian prices easeOn the other hand Indonesian thermal coal prices continued their recent descent as traders cited slack demand from China and India, despite a small step up in recent enquiries. China’s demand is still there but they still have enough stockpiles.

The trader said that the rainy season in Kalimantan had only affected production partially, and amid low demand, the effect on prices had been minimal.

Coal India offtake commitments In the meantime, Indian state-run producer Coal India Ltd. said it wants firm off-take commitments from power companies in place before it starts importing coal to cover government proposed long-term fuel supply contracts.

Last week Coal India said it had been asked by the Prime Minister’s Office to enter into the contracts with private power generators to help resolve a growing coal supply deficit in the country. Last year, CIL had to shelve a 6-mt imported coal tender after it failed to obtain firm commitments from utilities.

CIL, which meets about 80 percent of the country’s coal requirement, has been falling short of targets due to factors such as environmental hurdles and land acquisitions. As a result, it signs fuel supply agreements for only 50 percent of the required quantity.

The Prime Minister’s Office, after meeting heads of power companies last month, directed CIL to import coal if it is not able to meet the demand of the private sector estimated at around 50,000 MW of power capacity in the next three to four years. CIL aims to produce 464 mt in 2012-13. It has scaled down its production target for the current 2011-12 fiscal year to 440 mt.



Spot hard coking coal prices eased with lack of buy side interest in most part of February although there was some interest seen towards the end of the month.

Towards the end of the month the indicative bids and offers pointed to stable pricing. Premium Low Vol prices slid to $215 per ton fob Australia against $217 per ton at the beginning of February. HCC 64 Mid Vol also fell by $8 per ton to $189 per ton fob in one month’s time. The semi soft variety slid by $4 per ton to $139 per ton in one month’s time.

Though no new transactions were heard, premium HCC prices appeared to be somewhat supported by buy-side interest from large Chinese mills at $225-230 per ton cfr China. Purchasing managers at Chinese mills seemed happy to buy seaborne coking coal now, as there was no expectation of domestic prices dropping sharply.

No new firm offers were heard from Australia, but recent numbers being asked were firmly above spot prices, as producers said supply was tight due to ongoing strikes at BHP Billiton-Mitsubishi Alliance’s Queensland mines. Activity was limited, with most traders and end-users waiting for a clear outcome to next quarter’s contract prices before acting on spot.

Most sources agreed that spot demand was generally weak, with most international steel mills happy to rely on contract purchases. Traders said they would only bid $205 per ton fob at most for an Australian prime-quality low-vol because that is where talk of the lower end of the settlement is.

It is predicted spot activity in the Atlantic could pick up within three weeks, as European and Brazilian mills start shopping around for April cargoes. There is a widespread expectation in the market that many steelmakers globally could increase the proportion of HCC bought on a spot basis, starting April 1.

Some traders forecast that HCC prices would erode further, converging with potentially lower term contract prices, and more supply than demand in the market.

There were reports that annual benchmarks had been set

for US coals for contracts from January to December 2012. These prices were close to $210-215 per ton fob for US low-vols, around $200 per ton fob for A-grade high-vol, and around $170 per ton fob for B-grade high-vol. However, there did not appear to have been any settlements signed so far for Q2 2012 contracts in Asia.

The low demand from India was attributed to a scarcity of iron ore facing the steel sector. The Indian steel plants are still reeling under a shortage of iron ore and have reduced its coal consumption substantially. In 2010-11, domestic steelmakers imported close to 27 mt of the raw material. The market feels that traders and buyers are waiting for the Q2 benchmark prices for future course of action. The January to March 2012 benchmark price is $235 per ton fob Australia for top-quality material.

Spot coking coal prices ease in February Coal Insights Bureau


Met coke import prices ease in FebCoal Insights Bureau

Met coke import prices eased in February owing to lack of buying interest from coke makers and steel mills. Till now the mills in India are

faced with iron ore shortage owing to the mining ban in three districts of Karnataka and operating at lower capacity, sources said.

The import prices of met coke were hovering around $366 per ton currently, down from $383 per ton at the beginning of February. LAM coke demand, which is currently at 33 million tons per annum (mtpa) domestically, is expected to shoot up to 58 mtpa in the next five years, as steel makers increase capacity, according to industry estimates.

Coking coal price trend ($/ton)

Date HCC peak Down fob Australia

premium hard coking coal prices (premium low vol) fob Australia

HCC 64 Mid Vol fob Australia

Low Vol pCI fob Australia

Semi soft coking coal rates fob Australia

Met coke price cfr India

1-Feb 219 217.5 197 152.5 142.5 3833-Feb 216 214 195 154 144 3756-Feb 216 214 195 152 142 3769-Feb 215 213.5 197 153.5 144 37810-Feb 215 213.5 197 153.5 144 37513-Feb 215 213 196 153.5 144 37514-Feb 217 215 195 153.5 144 37215-Feb 219 217.5 195 153.5 143 36916-Feb 219 217.5 195 153.5 144 36920-Feb 217 215 189 148 139.5 366


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CIL confident of FY13, 12th Planproduction targets

Rakesh Dubey

The Coal India Ltd (CIL) interim chairperson Zohra Chatterji has said that she expects to achieve the production target of 440 million tons (mt) for 2011-12

and is confident that the company will achieve its target of 464 mt for 2012-13.

“We have targeted to produce 566.5 mt in the business as usual scenario in the terminal year of 12th Five Year Plan (2016-17) and can produce 615 mt if we get all the necessary clearances on time,” Chatterji told Coal Insights in Kolkata on the sidelines of her first press conference as interim chairperson of the world’s largest coal producing company.

She also informed that the quantity of coal to be sold

through e-auction route for non-linked consumers will be maintained at 10 percent of the total production.

“We had offered around 4 million tons of coal from the quota of e-auction to power sector on as is where is basis in October 2011 when there were severe disturbances in coal supplies due to heavy rainfall, but there was very negligible offtake from it,” she added.

Earlier, CIL’s former interim Chairman N.C. Jha had told Coal Insights that only about 500,000 tons of coal was lifted by power sector consumers in October 2011 against the offered quantity of 4 million tons.

The power sector could not lift the coal earmarked for


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e-auction as almost 80 percent of the offered quantity was meant for delivery by road and the consumers were required to make their own arrangement for lifting of coal from mine head, Jha had said.

CIL’s director (finance) A.K. Sinha said, “In 2010-11, we did sell 47 million tons of coal through e-auction route and with the increase in production, the quantity of coal to be sold through e-auction would also increase.”

The New Coal Distribution Policy (NCDP) announced in 2007 says that CIL should sell at least 10 percent of its total coal production through e-auction platform so that non-linked consumers can also have access to domestic coal.

Incidentally, the government does not grant linkages to consumers whose requirement is less than 4000 tons per annum and as such these consumers had to depend on illegal sources of domestic coal to meet their requirement, a CIL official said.

In order to streamline supplies to small and non-linked consumers, the NCDP provided for sale of up to 10 percent of total coal production through spot e-auction route in which anyone can participate. In addition, CIL conducts forward e-auction in which smaller consumers can book their quantity for entire year at slightly higher price.

On CIL’s production plans, Chatterji said: “We are in active talks with the Ministry of Environment and Forest and they have assured that they will fast track the clearances.”

“An additional 2 million tons of production can be immediately added with these clearances,” Chatterji said.

On being pointed out that CIL had been missing production targets mainly because of delays in getting environmental and forestry clearances during the last two years and the situation has not changed much, Chatterji said, “The compulsions are different now and commitment is greater on the part of the ministry of coal.”

“The PMO as well as all ministries are also monitoring the progress, and things are being done on fast track. There is a sense of urgency now,” she added.

On the targets for 2011-12, Chatterji said the company’s production had suffered during the second quarter (July-September), but was back on track in the third quarter (October-December).

“We have registered a growth of around 5 percent in January 2012 production compared with January 2011 and the trend is better even in February 2012,” she said.

Coal import not focus areaChatterji said importing coal and then supplying to consumers in India is not the focus area for CIL and they are currently focusing on expanding production to bridge the gap between demand and supply of coal in the country.

“The import business is not CIL’s USP, but if the situation arises, we have to import and then we will address the situation at that stage. Import is one of the ways by which the gap between demand and supply could be bridged. If the gap is too wide and we are legally bound to supply then we will explore the option. But our focus right now is to expand production,” Chatterji said.

“With a coal reserve of 67 billion tons, there is lots of coal out there, and it is a question of how to mine it and get to it,” she said.

Commenting on media reports that said CIL will go for import of coal, the Chairperson said, “That was stated by me on February 16 as one of options in which the gap could be bridged. It was not stated categorically that we shall import.”

Chatterji, however, said the CIL’s efforts to acquire coal assets abroad will continue as by acquiring coal assets the company would be doing mining of coal, which is its core competence.

Asked on the possibility of pooling of imported coal, Chatterji said, “We have not yet considered that. We have not even seriously considered import of coal. So I cannot comment on that.”

“Till now we have stayed away from the business of import. We had tried a little bit earlier in the past, but we could not get firm demand from the power companies and I do not know even if now they will come up with firm demand or agree to sign up agreements to accept the import at import price,” she said.

“If they (power companies) are willing to accept that

Zohra Chatterji, Chairperson, Coal India Limited


fEATuRE

(accepting the imported coal at import price), we could have agreed to supply imported coal and could consider supplying even now,” Chatterji said.

All time high rakes in FebChatterji said that the company is receiving adequate number of rakes from the Indian Railways for evacuation of coal and she is confident of supplying a much higher quantity of coal to consumers in 2011-12 compared with 2010-11 even as production is unlikely to go up significantly.

During the third quarter ending December 31, 2011, the company enhanced its offtake to 110 million tons (mt) against 93 mt of the second quarter of 2011 largely due to increased availability of rakes, she said.

“The performance in supply of rakes in any case was good till now. It has been at an all-time high. However, given the need to make up for the production loss and increase in supplies in the previous quarter (October-December), we had made special efforts and had met the Chairman, Railway Board,” she said.

Chatterji said the Railway Board chairman was able to talk to his officials to see if more rakes could be provided to CIL and how that could be provided. “So we worked out at 10-12 rakes and immediately the number of rakes went up and today it stands at 197 rakes per day and we expect to go up to 205 rakes or so per day in the balance months of 2011-12,” she added.

“Even in the January-February 2012 period, there had been increased availability of rakes by 5 percent. The average availability of rakes per day has touched an all time high in February,” Chatterji said.

CIL’s newly appointed director (technical) N. Kumar said consequent to higher availability of rakes, the pithead coal stock which was around 70 mt at the beginning of 2011-12 had come down to around 54 mt on the last day of third quarter (December 31, 2011).

As far as production is concerned, it was 335 mt till January 2012, but despatches were at 350 mt. Despatches were higher by about 15 mt compared with production during the production and this was largely due to higher availability of rakes, Kumar said.

Re-working on R&R policyIn an effort to speed up land acquisition for new projects, Coal India Ltd (CIL) is re-working on its existing Relief and Rehabilitation (R&R) policy, Chatterji said.

“CIL is re-working its R&R policy. We hope that this will make land acquisition much faster and we will be able to give better packages to the affected people,” she added.

CIL had announced its own R&R policy about three years ago with an aim to speeding up land acquisition, but the new policy did not benefit it much and the company is now re-working the policy with an aim to making it more successful.


Notwithstanding the positive trend in domestic coal production in recent months, India’s captive coal production has remained flat and is expected to miss

the annual production target yet again. As per the latest data, captive production till December 2011 is hovering below the target as well as last year’s figure. Still worse, there is hardly any sign of a turnaround in the near future.

Peeved at the slow development of the blocks, the coal ministry has de-allocated a number of blocks in the recent past, but the punitive actions helped little to improve the overall scenario. Neither the de-allotment nor the coal price hike seems to boost up the captive block holders, industry experts said.

As of February 2012, only 29 of over 200 blocks allocated (at least once) have come to production stage. This shows net addition of three new blocks in one year. At this rate, it may take half-a-century for all these blocks to come on-stream.

“Sometimes, the classical management tools just don’t work,” said a veteran mining consultant. “In this case, neither the carrot nor the stick could infuse the urgency in the block holders. But it couldn’t have, any way, because you cannot possibly drive the cart if joined before the horse,” he said.

Precisely! As the latest review of the segment shows, at least 40 blocks are held up due to forest clearance, mining lease or land acquisition issues. “The government should first decide on what to do with the statutory clearances…the fault may not always be with the rule or the ruled, but may sometimes be with the ruler,” The consultant said.

Captive production flat The production of coal from India’s captive coal blocks, including that of SAIL and Tata Steel, during the first nine months (April-December) of 2011-12 stood at 33.30 million tons (mt). This was much lower than the target of 42.00 mt and also below 34.00 mt produced during the corresponding period of the previous financial year.

In December, production by operating mines, including 29 mines that came into operation after 1991, stood at 4.09 mt, almost flat compared with 4.07 mt produced in November, according to provisional data available with Coal Insights.

The production in December was 12.42 percent lower than the target of 4.67 mt for the month and also lower by 1.21 percent compared with 4.14 mt produced in December 2010.

Given that the annual production target for captive blocks (including SAIL and Tata Steel) is 56 mt, there is little possibility that these blocks would achieve the same, industry sources said. Excluding SAIL and Tata Steel, the annual production target is 36 mt, but that too looks a distant dream.

Production target upAlthough the captive blocks are likely to miss their FY12 target, the ministry of coal has increased production target for the same by 3.05 mt for the year 2012-13. A large number of block holders are facing problems in starting production.

“The target for coal production for 2011-12 was 36.15 mt for captive coal blocks and it has been raised to 39.2 mt for 2012-13, the first year for Twelfth Plan in a meeting to review the progress of development of coal blocks allocated up to December 2011 and chaired by Additional Secretary (Coal) Zohra Chatterjee,” a ministry source said.

The Additional Secretary expressed concern over the overall progress of captive coal/lignite blocks, especially for the blocks allotted prior to 2003 and 2004 and informed that demand and supply gap of domestic coal has to be reduced by supporting the increase of captive coal production from the allocated coal blocks.

She also urged the State Governments to enhance their co-operative with the block allocated in order to clear the pending major milestones on time bound manner.

Blocks struck due to FCMeanwhile, as many as 29 captive coal blocks of 12 PSU companies and 17 private sector companies in different states are facing major constraints in the way of achieving milestones due to pendency of forest clearance at State Forest Department as well as Ministry of Environment and Forest (MoEF) levels, a coal ministry official said.

The forest clearance of all the 29 blocks is still awaited despite all blocks having environmental clearances, the official who attended the review meeting for captive coal blocks said.

“The meeting suggested that with the assistance of state governments (forest department) as well as Ministry of Environment and Forest as Central level, these blocks could be able to start coal production within the assured time frame,” the official said.

Blocks delayed Along with forest clearance, mining lease and land acquisition (LA) issues continue to affect the captive block owners. As revealed at the review meeting, the owners of at least 12 captive coal blocks are currently unable to start production because of lease and acquisition related issues.

Of the 12 blocks spread over five states (Jharkhand, Chhattisgarh, Madhya Pradesh, Maharashtra and Odisha),

‘Captive’ woes continue, blocks tomiss FY12 target


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two were allotted to PSU companies – NTPC (Pakri Barwadih) and SAIL (Chasnala), eight to private sector companies- JSPL (Gare Palma IV/6 and Utkal B1), Nalwa Sponge Iron Ltd (Gare Palma IV/6), Field Mining & Ispat Ltd (Chinor and Warora Southern Part), Chaman Metallics Ltd (Koser Dongargaon), Utkal Coal Ltd (Utkal-C), Monnet Ispat & Energy Ltd (Utkal B2), Bhusan Steel and Power Ltd (Jamkhandi); and another two (Moher and Moher Amlori Extension) to Sasan Power Ltd’s Ultra Mega Power Projects (UMPP).

“These blocks in five different states have successfully completed all the major milestones, except grant of mining lease and land acquisition. Allocates are thus not being able to start coal production,” the MoC official said.

For Pakri Barwadih block of NTPC, the official said that land acquisition is pending after Stage-II forest clearance was obtained even as it has possession of 600 acres of government land. The company has already appointed a Mine Developer and Operator (MDO) and built a coal handling plant (CHP).

Construction of railway line and RR projects are going on in full swing along with exploration in unexplored area and the coal production from the block will be raised to 18 million tons per annum soon.

As far as Sitanala block is concerned, SAIL is yet to get mining lease and acquire land, but it has formed a joint venture with Tata Steel Ltd for sharing the coal on 50:50 basis after it is mined through underground route. De-gasification is required first to develop the seam.

Five blocks to reach production in Q4Amidst the gloomy scenario, a total of five captive coal blocks are likely to come to production stage during the fourth quarter (January-March) of 2011-12, the MoC official said.

He said these blocks have completed all the milestones and the owners of these blocks have assured to commence coal production during the last quarter of current financial year.

Of the five blocks, two are owned by PSU companies – WBMTDCL (Trans Damodar) and DVC (Khagra Joydev) - and three by private companies – Prism Cement Ltd (Sial Ghogri) and Topworth Urja & Metals Ltd (Marki Mangli – II and Marki Mangli – IV).

The official said that WBMTDCL has obtained all the clearances, but part of land acquisition is still pending for Trans Damodar block. The company has already started Overburden (OB) removal and assured to start coal production by February.

For Khagra Joydev block, DVC has assured to start production in 2011-12 even though land acquisition is pending, the official said, adding, no forest land is involved in the block, but land acquisition is the main problem even as 1500 hectares of land has already been acquired.

Prism Cement has already started mining operation at Sial Ghogri block and coal will start coming out from March, the official said, adding for Marki Mangli – II and IV, Topworth Urja has got all the clearances and is ready to start mining anytime.

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Coal India Ltd (CIL) on January 31 announced that it has revised its prices based on gross calorific value (GCV) system that came into effect from 00.00 hours of

January 1, 2012 with retrospective effect (i.e. with effect from January 1) and will review the impact of the revised prices after March.

“Under instruction from the government and the ministry of coal, we have reduced the prices of almost all the 17 bands of coal on January 30, but with retrospective effect. We will review the impact of the reduced prices on our revenues in the quarter January to March i.e. fourth quarter of 2011-12,” a senior official of the marketing department of the company told Coal Insights.

Explaining the rationale behind reduction in prices, the official said, the company had earlier fixed the prices of 17 bands of coal based on import parity price (after like-to-like basis comparison of imported steam coal with Indian steam coal), but they have now decided to de-link their prices from imported coal.

CIL had benchmarked prices of its non-coking coal to GCV from the earlier useful heat value (UHV) based gradation. The move evoked protests from users in cement and steel sectors as they found that instead of being revenue neutral the shift had led to sharp increase in prices.

Coal Ministry and CIL had earlier said

that shift to GCV will be “as far as possible a revenue neutral exercise”, but after the new mechanism came into effect on January 1, 2012, it was found that coal prices had gone up by

anywhere between 5 and 150 percent as the company had compared the price of heat value of imported coal with that of its own coal.

CIL chairman N.C. Jha, who retired on January 31, said in New Delhi that while the GCV pricing system would continue, domestic

prices would not be linked to global rates, a move that will make coal cheaper. Jha said delinking local prices from global rates would help offset a projected 12.5 percent rise in prices.

Revised mechanism A day after CIL rolled back the hike in coal prices, Coal Minister Sriprakash Jaiswal said the new coal pricing mechanism will be reviewed after assessing the January to March quarter revenues of CIL, which produces about 80 percent of India's coal. Jaiswal said any revised mechanism would be revenue-neutral for CIL.

Jaiswal said the shift to GCV based pricing was essentially made at the behest of the coal consumers including the power utilities. The GCV based hike was aimed at bringing more efficient grading system. However, the huge opposition from the consuming sectors led to the rollback of the increased price.

At the current scenario, he said CIL will delink the rates from international parity prices – a move aimed at reducing the prices for different grades of coal.

Low energy pricesWhile the coal ministry and CIL assured not to link domestic

CIL cuts price till March, delinksprices from imports


NCJha,formerchairman,CoalIndia

M S Ahluwalia, Deputy Chairman, Planning Commission

SriprakashJaiswal,UnionMinisterforcoal

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coal prices with international parity prices, Planning Commission deputy chairman Montek Singh Ahluwalia said the artificially low energy prices will be addressed in the next Five Year Plan (2012-17).

He said the prices of all forms of energy in India - coal, natural gas and oil - were below global levels and needed to be priced according to the “real cost of energy”. Domestic gas prices should be aligned with international rates. Similarly,

CIL also sells coal much below international rates, he noted. This was not the first time that Ahluwalia advocated for increasing energy prices, but the utterances at the time of rollback brought to fore the lack of consensus in crucial government policies. Ahluwalia said the shift in domestic energy prices would be done gradually, implying there could be a number of such withdrawals and roll-backs during the coming years.

The new and effective prices of CIL following revision

S No

GCV Bands

(Kcal/kg)

New price after revision on Jan 31,

2012 (For power Sector) but effective

from Jan 1, 2012

New price after revision on Jan 31,

2012 (for non-power sectors), but effective from Jan

1, 2012

Indicative Grades (as per previous classification)

price/range as on Feb 27, 2011 (power Sector) as per Grades and mine

to mine

price/range as on Feb 27,2011 for non-power sectors as per grades (mine to mine)

Change for power Sector

Change for other Sectors

1 7000+ * *

A 3690 4100 730 to 1180 320 to 7702 6700-7000 4870 4870

3 6400-6700 4420 4420

4 6100-6400 3970 3970B 3590 3990 (-)790 to (+) 380 (-)20 to (-)1110

5 5800-6100 2800 2800

6 5500-5800 1450 1960 C 1050 to 1500 1300 to 1860 (-)50 to (+)450 100 to 660

7 5200-5500 1270 1720D 790 to 1240 1110 to 1560 30 to 480 430 to 610

8 4900-5200 1140 1540

9 4600-4900 880 1180E 730 to 1020 870 to 1080

50 to 150 and in some cases

(-) 240100 to 180

10 4300-4600 780 1050

11 4000-4300 640 870F 570 to 610 630 to 860 30 to 70 10 to 240

12 3700-4000 600 810

13 3400-3700 550 740G 350 to 700 440 to 650 150 to 200 90 to 300

14 3100-3400 500 680

15 2800-3100 460 620

Ungraded NA NA NA16 2500-2800 410 550

17 2200-2800 360 490

Note: * For GCV exceeding 7000 Kcal/kg, the price shall be increase by Rs 150/- per ton over and above the price applicable for GCV band exceeding 6700 but not exceeding 7000 Kcal/Kg, for increase in GCV by every 100 Kcal/kg or part thereof.For WCL, there shall be a 10% add on over and above the price mentioned above for GCV bands not exceeding 5800 Kcal/Kg and below.

All other elements of the ex-colliery delivered price as are presently applicable in terms of the last coal price notification circulated vide ref. no S & M: GM(F): Pricing: 1907 Dated 26.02.2011 will continue to remain applicable.For coal produced by the coal companies of CIL including NEC other than non-coking coal, the prices as are presently applicable in terms of the coal price notification circulated vide ref no. CIL: S&M: GM (F) Pricing 1907 dated 26.02.2011 will continue to remain applicable shown as under.

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India’s recent shift to Gross Calorific Value (GCV) based coal pricing (from Useful Heat Value or UHV based pricing) is likely to give a fillip to the coal sampling and

testing business in the country. Although the initial hike and subsequent rollback in coal prices have created some uncertainty in the market, the alignment of India’s coal price fixing methods to international practices would benefit the domestic players, the sources said.

“There have been increased queries in recent months,” an official of Inspectorate Griffith, a leading testing agency, told Coal Insights. “Many companies are approaching us. These include both big and small coal consumers as well as captive miners who have suddenly realised the importance of getting their coal quality verified,” he said.

For instance, the Jai Balaji group and Rungta Mines have recently approached the company for sampling of coal at downloading point. “The talks are on,” he said.

Inspectorate has also participated in the recent tender floated by Mahagenco for testing of 36 million tons (mt) of coal supplied by Singareni Collieries Company Ltd (SCCL) and Western Coalfields Ltd (WCL), the official said.

“Besides, captive block holders who were given tapering linkage and are charged a premium by CIL are approaching us. These units, mostly power and sponge iron, get coal at a premium of 50 percent. With the tapering linkages drying out, these companies are likely to go for import in the near future. This is yet another set of potential customers approaching the agencies,” he said.

Mitra SK, another Kolkata-based leading testing agency, however, was not so positive. The company has not been approached by any new potential domestic customer post January 1, 2012.

“We do not see any major change in the scenario in the short term. However, the shift to GCV will align our pricing with the international practice. Besides, the scope for third party independent assessment of GCV, as is done for overseas cargo, will be required for domestic delivery as well,” a senior official of the company said.

He said the increasing volume of imports and the domestic

GCV to boost coal testing biz in IndiaCoal Insights Bureau

Scope of testing and inspection services

♦ Draft surveys ♦ Volumetric assessments and determination of

bulk density ♦ Loading or discharge supervision ♦ Sampling ♦ Analysis ♦ Size ♦ Moisture analysis ♦ Proximate analysis ♦ Ultimate analysis ♦ Calorific value ♦ Ash analysis including alkalies ♦ Ash fusion temperature ♦ Free swelling index ♦ Hardgrove grindability index ♦ Micum tests ♦ CSR / CRI analysis ♦ Gray King Index ♦ Fluidity ♦ Vitrinite

Source: Inspectorate Griffith

Ash Analyser


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need for GCV measurement will together drive the industry in India. “We expect the industry to grow by around 20 percent year-on-year.”

Asked if the domestic agencies will be benefited, he said, “There is enough technical talent in India. There have been reports that there is not sufficient equipment (Bomb calorimeter, auto sampler etc) at present, but that can always

be ramped up. The domestic industry is well poised to meet the increasing requirement.”

CIL offer For long, a major concern for both coal consumers and inspection agencies has been that CIL does not allow coal inspection for orders below 400,000 tons per annum. This issue was raised by the Coal Consumers Association of India (CCAI) following the GCV rollout. Lately, there has been a positive development in this regard.

Following the hue and cry over the shift to GCV and the related problems, CIL has planned to consider offering third party inspection for determination of coal to be offered for sale through e-auction route. This was recently intimated by a top official of the company while responding to a proposal from a coal consumer.

“I wish to agree to your proposal. As a supplier of coal I have to be more quality conscious to supply the right type of coal. Though currently we may find it a little bit difficult, but in the longer time frame, it will be more beneficial to both the parties. And I agree that third party sampling should be done before the lot of material is offered for e-auction,” the official said. The official, however, said that providing the facility will take some time.

“Having a third party inspection for determining the GCV before the e-auction is done can be introduced, but it will take some time to come to that because the whole process has to be restructured accordingly,” he said.

The official said in UHV system there was no incentive to coal companies or mine managers for improving the quality of coal. “In fact there was a disincentive. There was an underlying feeling that if this grade suffices then there is no initiative to improve quality,” he added.

CIL has now moved to a GCV based system and if there is a quality slippage, there is a huge penalty involved. “So as a producer and manager of a colliery, one can always question why the grading has come down. And the consumer will always raise a question regarding the drop in quality even as they pay a higher price,” the official pointed out.

Mahagenco testing agency for WCL coal by March


State-owned power utility Mahagenco is expected to appoint a coal inspection agency for sampling of coal received from Western Coalfields Ltd

(WCL) by March 2012, a company official said.“The contract is likely to be finalised by March.

The appointed agency will be given the mandate for sampling coal coming from WCL,” he said.

The company had recently floated a tender to this end, inviting bids from coal inspection agencies and has received eight bids against the tender, the official added.

In December 2011, the power utility awarded a two-year contract to Intertek for inspection of coal received from Singareni Collieries Company Ltd (SCCL). Mahagenco procures around 40 million tons (mt) of coal per year from SCCL, WCL and other sources. It also imports around 4-5 mt of coal to meet its coal requirements.

Bomb Calorimeter

AutomaticSulfurAnalyzer


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After cooling down in the first half of 2011-12, India’s demand for imported steam coal has started improving once again. The consumers are back in the

market with fresh enquiries, much to the relief of the trading circle. “Enquiries are coming from everywhere as consumers are testing prices and these will soon materialise into firm orders,” a leading coal trader told Coal Insights.

“In fact, fresh quantity of South African coal is not available for February delivery as it has already been sold out not only to Indian buyers, but Chinese companies as well. Offers are not coming even for bids of $110/ton fob for South African coal for February delivery,” he claimed early this month.

There was improvement in overall sentiment as the rupee appreciated considerably over US Dollar during the recent weeks, the trader said. The US Dollar is currently available at around `50 for one US Dollar as against `53 for a Dollar very recently. “The appreciation in the rupee will also help a large number of consumers as Letters of Credit (LCs) opened in July-August last will be due for honour in February-March,” said another trader.

“I think, steam coal prices would continue to move around current levels of $105/ton fob, with slight movement here and there, though demand will increase,” he added.

Regarding coking coal, the trader said current spot prices are hovering around $225/ton, but it should come down a bit in March when negotiations for April-June quarter would be concluded. “The indicative offers for coking coal will start coming in next 5-7 days for delivery in second quarter of 2012,” he felt.

India Inc. placing orderBuoyed by improved business sentiment, domestic companies across the industries have started showing interest in fresh

buying. Hindalco Industries Ltd, an Aditya Birla Group company, has floated an enquiry to procure one Indonesian coal cargo, but has not yet made up its mind on when to place the order.

“We have not yet decided on when to place order. It is difficult to say at this point in time, but yes coal import is in the pipeline,” an official of the company said recently. “We will take a final decision as early as possible,” he added.

Binani Industries Ltd, a Braj Binani Group company, has also initiated talks with a number of suppliers to procure at least one parcel of imported coal, an official of a coal trading company said.

UltraTech Cement Ltd is believed to have placed an order for one shipment of South African coal, an industry source said. “The cement maker had placed an enquiry for 75,000 tons of imported coal for delivery at Krishnapatnam port towards end of February and is believed to have placed the order with Swiss Singapore,” the source said.

Other major suppliers, including Adani Enterprises, were also in the contention, but Swiss Singapore appears to have clinched the deal on February 8, the source added.

Meanwhile, India’s leading cement maker ACC and Ambuja Cement Ltd are tapping a large number of miners for direct purchase of coal from them instead of buying through traders, an official of a trading company said. “They are now directly talking with mining companies in South Africa and Indonesia and looking at finalising deals on FOB basis instead of buying from traders on cif/cfr basis,” the official said.

Even the sponge iron makers, who had been going through a very rough phase, have started coming back to the imported coal market during the past three to four weeks, an official of a leading coal trader said.

“There have been a large number of enquiries from sponge iron makers during the past three or four weeks and a number of orders have been placed by them. The situation was slightly different in the fourth quarter of 2011 (October-December),” the official said.

He claimed that orders are now being placed by sponge iron makers based out of Orissa as well as the Raipur belt, but refused to divulge the names of buyers.

GCV may reduce higher grade importWhile the industry is showing renewed interest in imports, some analysts believe the shift to Gross Calorific Value (GCV) based pricing by Coal India Ltd (CIL) would lead to a cut in higher quality coal imports.

This may be the case as the new pricing system, which creates increased number of price bands, would provide incentive for producers to increase the quality of produce.

Earlier, "there was absolutely no incentive for producers to

Steam coal import market looking up Coal Insights Bureau

Coking and non-coking coal imports during Apr-Dec 2011 (in mt)Coking coal Non-coking coal total

April 3.2 6.9 10.1May 2.1 8.0 10.1June 2.9 7.4 10.3July 2.5 6.7 9.2August 2.8 7.5 10.3September 2.1 7.0 9.1October 2.6 5.9 8.5November 1.9 6.3 8.2December 2.3 6.4 8.7Total 22.4 62.1 84.5

Source: India Coal Market Watch (ICMW)


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improve the quality," N.C. Jha, CIL chairman who retired on January 31 said after implementing the new formula. "Now since we are going for 17 different bands of GCV, the producers will have the incentive to improve quality and move products to a higher band."

Under the earlier pricing formula, coal prices were divided into seven very broad categories, with the calorific value ranging from 600 kCal/kg to 1,100 kCal/kg. This offered hardly any incentive to produce better grades of coal.

However, trade circle sources averred that raising coal prices alone will not solve India's coal shortages. Additionally, the increased prices have been rolled back due to staunch opposition from the coal consuming sectors. This would have an adverse impact on CIL’s finances as the company has already agreed to offer hefty increase in wages for its 365,000 workers, taking a hit of around `6,500 crore.

The company aims to produce 464 mt of coal in 2012-13, higher than the 447 mt targeted in 2011-12. However, the higher growth in demand has seen India’s imports going up to around 114 mt in 2011-12. The import growth is likely to continue surging ahead and touch 200 mt by another five years.

The state-run Singareni Collieries Company Ltd (SCCL) produced a total of 5.78 million tons (mt) of coal in January 2012, up 5.63 percent compared with

5.47 mt produced in December 2011. Also, the January production was nearly 20 percent higher than the target of 4.83 mt set for the month. Of the total production in January 2012, 0.99 mt came from 36 underground mines and 4.79 mt from 14 open cast mines.

The production target from underground mines in

January was 1.24 mt and that from opencast mines was 3.59 mt. The cumulative production during the first 10 months of 2011-12 stood at 41.04 mt, 5.81 percent lower than the target of 43.57 mt for the period and 1.16 percent lower than 41.52 mt produced during the corresponding period of 2010-11. Of the total production during the 10 months of 2011-12, 8.46 mt came from underground mines and 32.58 mt from opencast mines against the respective target of 12.31 mt and 31.26 mt.

SCCL Jan coal production up 5.63% m-o-mCoal Insights Bureau

Production performance

y E A rNo. oF MINES proDuCtIoN (’00,000 tons)

under ground open Cast total

uNDErGrouND opENCASt totALtarget Actual target Actual target Actual

2010-11 36 16 52 158.70 116.07 354.30 397.26 513.00 513.332011-12(CurrentYear):April,2011 36 14 50 12.28 9.73 30.07 25.33 42.35 35.06May,2011 36 14 50 12.08 9.34 30.55 30.44 42.63 39.78June,2011 36 14 50 12.28 8.99 30.15 32.27 42.43 41.26July,2011 36 14 50 12.73 8.98 25.69 29.83 38.42 38.81Aug.,2011 36 14 50 12.73 9.32 26.92 30.48 39.65 39.80Sept.,2011 36 14 50 12.72 3.90 27.51 17.77 40.23 21.67Oct.,2011 36 14 50 11.55 4.51 34.04 26.06 45.59 30.57Nov.,2011 36 14 50 12.34 9.83 35.98 41.09 48.32 50.92Dec.,2011 36 14 50 11.98 10.35 35.84 44.35 47.82 54.70Jan.,2012 36 14 50 12.39 9.89 35.89 47.89 48.28 57.78Feb.,2012 0.00 0.00March,2012 0.00 0.00PROG (Jan.'12) 36 14 50 123.07 84.63 312.63 325.73 435.70 410.36PROG(LastYear) 36 16 52 131.52 96.84 291.88 318.37 423.40 415.21

Source: SCCL

0102030405060708090

100

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

In m

illio

n to

ns

Coking coal Non-coking coal Total

Growth in coal import


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Barely ten minutes before relinquishing his office, Coal India (CIL) chairman N.C. Jha signed what is being termed as an “unprecedented” wage agreement for

CIL’s 365,000 workers. It was not only about the monetary bonanza – 88 percent hike in basic, 25 percent hike in gross wage plus 4 percent special allowance – but the inclusion of social welfare benefits that made the agreement a milestone in public sector wage negotiation. The real milestone, however, is still awaiting the stamp of approval and may come into existence three months from now, trade union sources told Coal Insights.

“The National Coal Wage Agreement (NCWA) IX has been quite good, both in monetary and social welfare aspects. The agreement includes post retirement benefits (the pension scheme is strengthened), post-retirement medical benefits, improvement in service conditions, increased allowances, among others. This is quite an achievement. But there is more to come,” said a top union leader.

It could be because of time constraint – the NCWA IX was signed at 11.50 pm on January 31 – or a tentative stance taken by the unions, the issue of contract workers’ wages was kept on hold. “But the management has assured that the contract workers’ issue will be settled in three months’ time,” he said.

Meanwhile, the hike covering 3.65 lakh non-executive workforce, would be effective retrospectively from July 1, 2011, and is for a five-year period. The agreement was inked

in Delhi between central trade unions – including Congress-backed INTUC, Left backed-CITU and AITUC, and Hind Mazdoor Sabha – and the CIL management. Along with CIL, the NCWA IX also covers Singareni Collieries Company Ltd (SCCL).

Wage bill up 60%CIL’s new wage pact has seen an 88percent increase in minimum basic of its employees to `15,712 per month, as against `8,360 during the previous deal, the company said in a statement.

“The minimum basic in NCWA IX now will be `15,712 per month, an increase of 88percent from `8,360 of NCWA VIII. The other important highlights of the agreement are a special allowance of 4percent of revised basic; HRA of 2percent of the basic pay for those who have not been provided with residential accommodation in other than urban area; post retirement medicare scheme for retired non-executives and their spouses to be finalised within three months,” the statement said.

Overall, the wage hike would result in around 60 percent increase in CIL’s wage bill (salary, wages and allowances), union sources said. They said that along with the increase in basic salary, the annual increment would also go up. In line with unions’ estimates, the company said that the wage hike would put an additional burden of ̀ 6,500 crore on the firm. As

CIL unions hail NCWA IX, contractworkers’ pact by April



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of March 2011, CIL’s total outgo on employees’ salary, wages and allowances was `11,715 crore.

“As per the NCWA VIII, which came into effect from July 1, 2006 workers got a raise of 24percent in the wages, which had an impact of around `2,500 crore, so this was more than what they had expected,” R. Mohandas, director (personnel) of Coal India Ltd (CIL) had said. Initially, CIL had offered a hike of 10 percent when the talks started, while the workers unions were demanding a 50 percent hike.

Contract workers’ wageAlthough charmed by the wage increase for permanent workers, the trade unions were apparently not satisfied with the management’s proposal for the contract workers. The differences in opinion led to the postponement of contract workers’ wage agreement, which was initially planned to be signed simultaneously.

According to union sources, the management had proposed to hike the minimum daily wage for contract workers to `367 and the maximum daily wage to `440. The daily wage level varies depending on the level of skills required for a job.

“The unions have not agreed to the suggested figures. We proposed that the minimum wage of permanent workers, as per NCWA IX, be made the floor level for contact workers as well. Currently, they contribute 50 percent of CIL’s production and deserve a decent wage,” the sources said.

While the issue has remained unsettled, they said the management has pledged to finalise the wage increase as well as improvements in their service conditions by April 2012.

Asked if the management has indicated any price rise of coal to pass on the increased wage burden, the union leader said, “Earlier, they had something similar in mind, but after the roll back of price following the shift to gross calorific value (GCV), it is unlikely the management will go for another round of price hike in near future.”

CIL (consolidated) employees’ remuneration& benefits (in `crore)

For the year ended March

31, 2011

For the year ended March

31, 2010Salary, wages & allowances 11,715 10,859Normal overtime 490 438Sunday/holiday production overtime 662 624Sunday/holiday maintenance overtime 297 261Incentive 84 60Leave encashment 687 290Attendance bonus 590 600Fall back wages 122 114Contribution to PF & Other Funds 1,634 1,490Ex-gratia, PPLB, PPLR 856 703LTC/LLTC/RRF 122 140Pension 76 116Gratuity 1,484 1,481Workman compensation 30 42Lifecoverscheme 17 17VRS 36 37Others 88 78Total (A) 18,881 17,246Less:TransferredtoSocial overhead 618 551Development 19 15Power & Fuel 0.99 0.99Repairs & Maintenance 32 24Total (B) 670 591Total (A-B) 18,211 16,655

Source: Coal India Ltd * Figures are rounded off


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Amid recurrent debates over coal price hikes by state-owned Coal India Ltd (CIL), the coal consumers in India, especially the power sector, are strongly

pitching for the formation of a coal regulator. The statutory body, once established, would not only bring transparency into pricing, but also address several other issues that continue to affect the consumers but do not concern the coal monolith, industry sources believe.

The demand for a regulator has been placed time and again by the consuming sectors, but the recent increase in coal prices and its prompt roll-back has seen the most vociferous demand. It was none other than former CIL chairman Shashi Kumar who voiced concern over the delay in the formation of the proposed regulatory body.

“In the current scenario, coal regulatory authority is a must. There is a Bill pending; but we do not know when it will be placed,” said Kumar.

The monopoly position of CIL, he said, makes it absolutely necessary to have such a body in place. Echoing the concerns, Coal Consumers Association of India (CCAI) president P.K. Chand said post-listing the outlook of CIL has been changed, and the company seems to be more concerned about its shareholders rather than customers. Also, the growing importance of coal in the overall economic matrix has necessitated the formation of such a body. “This is so because a coal price hike, justified or not, will have a spiral effect across the board. Hence keeping proper checks and balances in the system is crucially important,” he said.

In a similar vein, Indian Coal Merchants Association (ICMA) president V.K. Arora said the regulator would help redress various issues that CIL apparently prefers to leave unaddressed.

The malfunctioning of weigh bridges, for instance, could be one such problem, he suggested. The issue of over-loading of vehicles, non-testing of coal quality at pitheads are similar other concerns.

Power sector most concerned While the formation of a regulator may be an universal demand, the power sector seemed to be most concerned, having the most at stake. The issue gathered momentum after CIL shifted from Useful Heat Value (UHV) to Gross Calorific Value (GCV) based pricing of coal with effect from January 1, 2012.

According to reports, the issue of establishment of a coal regulator came up for discussion during the meeting between Prime Minister Manmohan Singh and the industry CEOs held

on January 18. The power ministry strongly pitched for a regulatory mechanism for coal sector to be put in place at the earliest.

The power sector, on its part, has put in place not only the regulator but also an appellate tribunal. The petroleum sector has a Petrolum & Natural Gas Regulatory Board (PNGRB). The telecom sector and insurance industry have their own full fledged regulators. On the other hand, there is no regulator in the coal sector.

“Coal regulator is an imperative to bring about transparency in pricing, benchmarking of production and laying down procedural framework for moving from UHV to GCV mechanism,” said Ashok Khurana, director general, Association of Power Producers made a strong case for coal regulator.

Status of BillIn 2007, the TL Sankar committee had recommended the setting up a Coal Governance and Regulation Authority. This proposed committee was seen as a development and regulation organisation which would help develop the sector as a whole. The issue was brought under focus in the Integrated Energy Policy.

Later on, the government formulated a draft Bill for the setting up of Coal Regulatory Authority through consultation with different ministries and departments. The proposed authority was expected to facilitate, among other things, standardised operational norms, establishment of benchmarks in safety standards and performance, productivity through adoption of best mining practices, and effective resolution of problems facing the coal miners.

The Coal Regulatory Authority Bill was supposed to be placed before Parliament in the Budget session of 2011, but was delayed by a year as the Ministry of Law had to examine and incorporate changes and suggestions made by various ministries and departments. Once finalised, the draft Bill would be submitted for the approval of the competent authority before being tabled in the Parliament.

“Setting up of a regulatory Authority for coal would require appropriate legislation to be passed by the Parliament. Hence, it may not be possible to indicate the exact time frame for setting up the said authority,” said P.P. Patil, minister of state for coal, on November 29, 2011.

There were reports that the Bill may finally be placed in the coming Budget session (2012), but going by the minister’s response, it seems the regulator has a long way to go before coming to fruition.

Coal consumers cry for regulator asBill hangs fire



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Nearly two years after the introduction of the controversial Comprehensive Environmental Pollution Index (CEPI), the ministry of environment

and forests (MoEF) has finally decided to lift the restrictions placed with CEPI’s implementation in the coalfield areas. At a recent meeting of the Group of Ministers (GoM), the MoEF declared it was ready to lift the restrictions once the state pollution control boards (SPCB) submit suitable pollution mitigations plans for the affected areas.

Environment minister Jayanthi Natarajan stated that the CEPI restrictions have already been lifted in seven out of the nine coalfields. “In the remaining coalfields also, coal projects with mitigation plans are considered on priority basis even though pollution levels in those areas are double the permissible limits,” she said at the fifth meeting of GoM.

According to a communiqué of the meeting released recently, the MoEF further stated that “once the mitigation plans are formulated by the concerned state pollution control boards, the ministry would lift moratorium from the other coalfields also.”

Introduced in March 2010, the CEPI index took into account all kinds of pollution and debarred new projects or expansion of units in heavily polluted zones. This affected CIL production significantly, as the company lost nearly 100 million tons (mt) of annual production and failed to kick-start major expansion projects in various collieries.

On the issue of “go/no-go”, the minister agreed with recommendations of the committee that it should not form the basis for clearance or rejection of coal blocks. However, she argued that in any case the classification was the initiative of the ministry of coal (MoC) and not the MoEF. She said that the MoEF will revert to its original practice of examining projects by FAC on a case by case basis. The projects will be cleared

on merit, and these would include projects rejected earlier on the “no-go” approach. Montek Singh Ahluwalia, deputy chairman of the Planning Commission, supported the move to do away with the approach of “go/no-go”. The GoM accepted the recommendation to do away with the “no-go” concept.

But at the same breath, the MoEF maintained that the Forest Act provides diversion of forest land for non-forest purposes as “exception rather than rule”. Home minister P. Chidambaram supported the view regarding importance of dense forests and suggested that identified pristine forests should be barred from any kind of non-forest activity. Finance minister Pranab Mukherjee, who headed the GoM, stated that all such forests which can never be regenerated to the desired quality should be protected. He further suggested that a committee comprising experts in the field can be constituted to identify such forests.

e-filing of applicationsMeanwhile, in order to reduce delay in forest and environment clearances, the GoM was considering strict monitoring of new applications and outright rejection of “incomplete” applications through the use of e-filing.

According to the communiqué of the fifth GoM meeting, Natarajan claimed that in many cases, delay in processing of applications takes place “due to incomplete submission of application forms.” In this regard, Ahluwalia suggested the use of e-filing of applications “where system will not accept any incomplete application”. Addressing the meeting, the finance minister said that “suitable directions may be issued to the concerned agencies for a proper scrutiny of application and essential documents at the submission stage and incomplete applications have to be rejected straightaway.”

MoEF to lift CEPI after report of State PCBsCoal Insights Bureau


Power generation by Indian power plants in January 2012 stood at 73,396 MU, marginally higher than the target of 73,377.66 MU set for the month, according to

provisional data made available by the Central Electricity Authority (CEA). The total generation in January 2012 was also higher as compared to 71,654.73 MU generated during the corresponding month of the previous year. The target set for January 2011 was 72,401.56 MU, the data revealed.

Electricity generation in December 2011 was 72,717.69 MU against a target of 71,241.6 MU, whereas total generation in November 2011 stood at 71,033.06 MU against a target of 69,671.27 MU. Of the total generation in January 2012, the thermal sector accounted for 63,175.41 MU, while 2,903.94 MU was generated by the nuclear sector. The hydro sector contributed 7,190.33 MU and Bhutan imports accounted for the remaining 126.32 MU.

The target for generation in thermal sector for the month was 63,966 MU, while that for the nuclear and hydro sectors was 2,126 MU and 7,192.66 MU, respectively. The target for Bhutan import stood at 93 MU.

In January 2011, power generation achieved by the various power sectors stood at 61,149.91 MU for thermal, 2,806.51 MU for nuclear and 7,573.3 MU for the hydro sector. The remaining 125.01 MU was contributed by Bhutan imports during the month. During the first 10 months (April-January) of 2011-12, the Indian power utilities had generated 726,279.93 MU whereas the figure stood at 669,898.41 MU during the corresponding period of the previous year.

Capacity additionThe power utilities in India added 895 MW of generation

capacity in January 2012 taking the total capacity addition during the first 10 months of 2011-12 to 12,360.5 MW, according to provisional data released by CEA. The capacity addition in January 2011 was 480 MW and that during the first 10 months of 2010-11 was 11,404.5 MW, the data revealed.

In December 2011, total capacity addition was 1,158 MW, much higher than the lowly target of 71 MW. In November 2011, the capacity addition stood at 2,807 MW against the target of 1,877 MW, the data revealed. In January 2012, total generation capacity added in the thermal sector was 795 MW, while capacity addition in the hydro and nuclear sectors stood at 100 MW and nil, respectively. The capacity addition target was 2,185 MW for thermal sector, 60 MW for hydro sector and nil for nuclear sector, the data showed.

In January 2011, total capacity added in the thermal sector was 260 MW, against the target of 2,932.5 MW. The capacities added in hydro and nuclear sectors stood at nil and 220 MW, against respective targets of 66 MW and nil.

Critical coal stock Inadequate coal supplies by domestic coal companies and lower imports by power utilities led to critical coal stock position at a number of Indian power plants during the month.

According to data available with Coal Insights, a total of 37 plants of the total 89 in the country were faced with critical coal stock position of less than seven days as of January 30.

The data further shows that out of the 37 plants facing

Categorywise energy generation inJanuary 2012 (in %)

Source: Cental Electricity Authority

Indian plants generate 73,396 MUpower in Jan


All India PLF factor – Jan 2012 (in %)


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‘critical coal stock’ position, 21 were facing ‘super critical’ coal stock position of less than four days. On January 15, out of the 43 plants facing critical coal stock position of less than seven days, 20 were facing ‘super critical’ coal stock position of less than four days. Plants in Andhra Pradesh, Orissa, Rajasthan, Tamil Nadu and West Bengal were the worst sufferers.

Plant load factorThe Plant Load Factor (PLF), a measure of the output of

a power plant compared to the maximum output it could produce, for the country for the month of January 2012 stood at 76.38 percent against the planned 70.04 percent. The PLF was 75.83 percent and 70.69 percent for December 2011 and November 2011, respectively.

The PLF of power plants of central sector-run companies such as NTPC and DVC stood at 86.39 percent in January 2012, compared with 82.98 percent in December 2011. The plants in the private sector recorded a PLF of 72.82 percent against the planned 67.7 percent. The worst performer was GMDCL which recorded a PLF of 28.5 percent against a target of 75.27 percent. JSEB recorded a PLF of 5.18 percent against a target of 27.06 percent continued to be a poor performer.

Power supply positionIn the month of January 2012, the country’s peak power demand was estimated at 81,061 MU, but actual availability was only 73,498 MU, reflecting a shortfall of 7,563 MU or 9.3 percent.

Earlier, in the month of December 2011, the country’s peak power demand was estimated at 81,381 MU, but actual availability was only 72,195 MU, reflecting a shortfall of 9,186 MU or 11.3 percent.

An interesting observation is that despite overall peak shortage of power in the country in January 2012, Lakshadweep, Andaman & Nicobar islands and Sikkim did not have any peak power shortages, according to data made available by CEA.

Maharashtra, however, faced the highest shortfall among all states during peak period with total shortfall of 2,295 MU.

Tamil Nadu recorded the second highest shortfall during the month under review. The state recorded total shortfall of 942 MU in January 2012, against 804 MU in December 2011. Madhya Pradesh continued to be a worse performer recording a shortfall of 892 MU against 1,216 MU in December 2011. Uttar Pradesh (933 MU versus 1062 MU in December) was also another state facing major peak period shortfall during the month.

Achievement vs target in capacity addition (in MW)


Mixed Q3 results from power utilities

The leading power utilities in India have shown mixed results in terms of operational and financial performances in the quarter ended December 31,

according to information available with Coal Insights.NTPC Limited, the country’s largest power

producing company, has recorded a drop in net profit as it fell to `21.3 billion for the quarter ended December, from `23.7 billion a year earlier, even as sales rose 14 percent from a year earlier to `153.32 billion.

During the quarter, Tata Power’s results reflected a strong financial and operational performance. Revenues for the quarter were up by 35 percent and stood at `2,161.05 crore as compared to `1,595.87 crore in Q3 FY11. PAT increased by 178 percent to `425.88 crore as against `153.07 crore registered in the corresponding quarter last year.

On a consolidated basis, Tata Power’s revenues were up by 51 percent and stood at `6,645.87 crore as compared to `44.12 billion in the corresponding period last year owing to the robust performance of both power and coal business.

“Our strong financial and operational performance for the quarter is driven by all our business divisions. All Tata Power operations and subsidiaries have done well this quarter as compared to the corresponding period last year,” said Anil Sardana, Managing director of Tata Power.

“Our key projects under implementation are progressing well. We have successfully synchronized India’s first 800 MW sized super critical Unit 1 of our 4,000 MW Mundra Ultra Mega Power Project; commissioned Unit 1 of 1,050 MW Maithon Power Project and also synchronized our 25 MW solar plant at Mithapur, one of the largest in the country. Our growth opportunities continue to be on course,” he added.

Another power major, Reliance Power’s Q3 net profit was up at `204 crore against `144 crore, y-o-y. The company’s net sales were up at `457 crore against `251 crore, y-o-y and its Q3 consolidated other income was up at ̀ 217 crore against ̀ 104 crore on an year on year basis.

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Coal India Limited (CIL) will sign fuel supply agreements (FSAs) with power plants that have entered into long-term power purchase agreements with power

distribution companies and have been commissioned/ would get commissioned on or before March 31, 2015.

For power plants that were commissioned up to December 31, 2011, FSAs will be signed before March-end, a PMO statement said on February 15.

“The FSAs will be signed for full quantity of coal mentioned in the Letters of Assurance (LoAs) for a period of 20 years with trigger level of 80 percent for levy of disincentive and 90 percent for levy of incentive,” the release read.

As per the directive of Prime Minister Manmohan Singh, in the event of a short supply of coal as committed by CIL, the public sector firm will arrange for supply of coal through imports or through arrangement with state/Central PSUs who are allotted coal blocks.

“These arrangements would provide relief to power plants with estimated capacity of more than 50,000 MW. The proposed set of arrangements is being seen as a major step forward in solving the problems of power sector in the country and is likely to boost investors’ confidence in India’s power sector,” the PMO statement said.

This will help in achieving power generation capacity targeted in the 12th Plan and assist in achieving the targeted growth of GDP, it said.

No PMO directive yet: CILMeanwhile, Zohra Chatterji, acting chairperson of CIL, said on February 17 in Kolkata that the company is yet to get a directive from the government (Ministry of Coal and Prime Ministers’ Office) to sign FSAs with power companies for supply of minimum of 80 percent of total coal requirement of these companies.

“I would say let us not be speculative on what has come in the news because the directive from the Ministry of Coal is yet to come. Let that come and then we will react to it. Let’s not speculate on that. Let the directive come,” Chatterji, who is also additional secretary (coal) said while responding to a query on media reports on PMO directive.

She, however, said, “The government is the major owner of CIL and we will abide by the mandate. The directive of the government is binding on CIL and that is for sure.”

Chatterji said given the gap between demand and supply, CIL was willing to sign FSAs. “It is not that FSAs were not signed at all. FSAs have been signed by a few companies, but all companies have not signed. It will have to be a question of sitting down, discussing and considering the figures and we will do that,” she added.

CIL’s director finance, A.K. Sinha said, “Up to March 2009 we have signed FSAs with penalty clause below 90 percent and there is discussion on FSAs for the plants coming after March 2009, but the details of what would be the terms and conditions, what would be the penalty etc is to be worked out and then only we can come to a conclusion on whether this 80 percent or 90 percent can be accepted or not.”

Sinha said as per New Coal Distribution Policy (2007), CIL was to supply 50 percent domestic coal and if necessary, 50 percent imported coal. “So let us see what direction comes from the ministry. If it is 100 percent, then we will see in the FSA provision what would be the penalty clause or bonus

PMO asks CIL to sign FSAs with power generators


Coal crisis causes 5.32 BU generation loss


Power Minister Sushilkumar Shinde has said that a generation loss of 5.32 billion units (BU) was caused in India between April and October 2011

due to inadequate availability of coal.The generation loss in entire 2010-11 was brought

down to 8.39 BU from 14.49 BU in 2009-10, he said, adding the generation loss stood at 10.92 BU in 2008-09.

He, however, said, “No operating thermal power station in India reported shutdown due to non-availability of coal during the last three years as well as till October of 2010-11.

Less transportation of coal from coal mines to railway sidings, inadequate crushing capacity at the coal mines, law and order problems in the Central Coalfields Limited and Mahanadi Coalfields Limited and excessive rains of the coal fields of Northern Coalfields Limited, Central Coalfields Limited and Mahanadi Coalfields Limited were the four main reasons for short supply of coal by the subsidiaries of Coal India Ltd during the current year, Shinde said.


Coal shortfallIndia’s coal demand is estimated to touch 980.50 million tons (mt) by the terminal year (2016-17) of the Twelfth Five Year Plan while indigenous availability is projected at only 715 mt leaving a shortfall of 265.50 mt that is likely to be met by imports, Coal Minister Sriprakash Jaiswal had said in December 2011.

Quoting a draft report of the working group on coal and lignite for formulation of Twelfth Plan (2012-17), Jaiswal said of the total demand of 980.50 mt, the demand for thermal/steam coal is projected at 913.30 mt while that of coking coal is projected at 67.20 mt.

Against these demands, the production of thermal coal and coking coal is projected at 683.30 mt and 31.70 mt respectively in the terminal year of Twelfth Plan leaving a shortfall of 230 mt for thermal coal and 35.50 mt for coking coal, the minister said.

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Estimated shortage of supply to various industries in the terminal year of Twelfth Plan

in million tons

Sl.No. Sector Demand(prov).

Indigenousavailability

(prov.)

Gap(prov.)

1. Steel 67.20 31.70 (-)35.50

2. Power Utilities 682.08 562.47 (-)119.61

3. Power Captive 56.36 48.57 (-)7.79

4. Cement 47.31 40.30 (-)7.01

5. Sponge Iron 50.33 37.05 (-)13.28

6. Others 77.22 65.21 (-)12.01

Total 980.50 715.00 (-)265.50

clause. At present, we are signing LoAs with 50 percent trigger norm and discussion is going on. Let us see what happens.”


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Though there does not seem to be any marked change in the demand scenario, the Indian cement industry has seen a moderate increase in production in December 2011

over the same month a year ago. Industry sources said that in the coming months, the hike in raw material prices, especially of fuel and power, may put some pressure on the margins.

Production and despatchIndia’s cement production by large plants, except ACC and Ambuja Cement, moved up 14.99 percent to 15.72 million tons (mt) in December 2011, compared to 13.67 mt in the corresponding month of 2010, according to information made available to Coal Insights by a member of the Cement Manufacturers’ Association (CMA). Cement production in December 2011 was also 12.45 percent higher as compared to 13.98 mt reported for November 2011.

Production by ACC and Ambuja in December 2011 was 2.03 mt and 1.91 mt, respectively. Taking into account the combined production of these two companies, total cement production in the country was 19.66 mt.

Total production (except ACC and Ambuja) during the first nine months (April-December) of 2011-12 stood at 128.53 mt, up 5.06 percent from 122.34 mt during the same period of 2010-11.

Meanwhile, India’s clinker production by large plants, except ACC and Ambuja Cement, in December 2011, stood at 11.96 mt, up 12.51 percent over 10.63 mt produced in the corresponding month of the previous year. Clinker production in November 2011 was 11.28 mt. Clinker production during the first nine months (April-December) of 2011-12 stood at 99.02 mt, up marginally by 0.98 percent from 98.06 mt during the corresponding period of 2010-11.

Despatch scenarioIndia’s cement despatches by large plants, except ACC and Ambuja Cement, in December 2011 stood at 15.76 mt, up 15.12 percent as compared to 13.69 mt in the corresponding month of 2010, according to information received from CMA. Total despatches in November 2011 were 14.08 mt.

Despatches by ACC in December stood at 2.09 mt and that by Ambuja Cement at 1.93 mt. Total cement despatches or sales in the country in December stood at 19.78 mt.

Despatches (except ACC and Ambuja) during the first nine months (April-December) of 2011-12 stood at 127.69 mt, up from 121.45 mt during the corresponding period of 2010-11.

Cement majorsUltraTech Cement Ltd, an Aditya Birla Group company, reported December cement production of 3.57 mt, up 17.43 percent compared with 3.04 mt produced in November.

The company’s production in December was also higher by 10.8 percent as compared to 3.21 mt produced during the same month of 2010. Cement production during the first nine months (April-December) of 2011-12 stood at 28.48 mt against 27.99 mt produced during the same period of 2010-11.

UltraTech’s cement despatches or sales in December stood at 3.62 mt, up 17.15 percent compared with 3.09 mt despatched in November. Despatches in December were 10.5 percent higher as compared to 3.23 mt despatched in December 2010.

Cement despatches during the first nine months (April-December) of 2011-12 stood at 28.51 mt, up 1.97 percent compared with 27.96 mt despatched during the corresponding period of 2010-11.

Another leading cement manufacturer, ACC Ltd’s cement

India’s Dec cement production up Coal Insights Bureau


Despite taking a hit from increased coal prices, the leading Indian cement makers have witnessed significant growth in profits during the quarter

ended December 31, 2011. The higher demand offset the impact of the cost rise and is expected to pay dividend in coming months.

UltraTech Cement’s profit after tax (PAT) stood at `617 crore during Q3 of FY12, up 93.41 percent compared with `319 crore in the corresponding quarter of FY11. The company’s net sales stood at `4,572 crore as compared to `3,715 crore in the same period of the previous year.

Profit before Interest, Depreciation and Tax (PBIDT) stood at ̀ 1,120 crore versus ̀ 768 crore in the same quarter of the previous year.

However, variable cost of the company rose by 16 percent, mainly on account of increase in energy cost as there had been 30 percent rise in the price of domestic coal by Coal India Limited (CIL), the company said in a statement.

Ambuja Cements has reported a 17 percent jump in net profit (year-on-year) for the October-December quarter. The company’s PAT rose to `302.40 crore in the third quarter ending December 31, 2011 as against `258.12 crore in the corresponding quarter of last fiscal.

Sales jumped 30 percent (y-o-y) to `2,329.11 crore, against `1,788.47 crore.

ACC Limited recorded net profit of `463.2 crore against `248.87 crore earned during the corresponding period of the previous year.

“While economic growth during the year was not robust, we are seeing some positive signs during the last few months. In the near term, we expect that the economic development will accelerate as India plans to invest about $1 trillion in infrastructure in the Twelfth Plan period,” an ACC Cement official said.

“This makes us optimistic about healthy growth in demand for cement which we are well place to serve. As regards, raw materials coal pricing is volatile and we also anticipate a rise in the costs of other critical inputs,” he added.

According to market sources, demand is likely to grow by around 8 percent in the coming fiscal year. However, the surplus scenario is likely to continue over the next three years. At the same time, growing input costs is likely to result in a squeeze in margins.

On an average, depending on quality, about 0.225 mt of coal is required to produce 1.0 mt of cement and this means that coal requirement will go up substantially if cement production actually goes up in the country.

Cement makers post healthy growth in Q3 profit Coal Insights Bureau

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production surged by 10.93 percent to 2.03 mt in December compared with 1.83 mt in November. Production in December was 6.28 percent higher as against 1.91 mt produced in December 2010, the company said in a release.

The company’s cement production during January-December of 2011 stood at 23.66 mt, up 11.55 percent against 21.21 mt produced during the same period of 2010, the release added.

The company’s despatches or sales in December rose by 14.21 percent to 2.09 mt from 1.83 mt in November. Despatches in December were 8.85 percent higher compared with 1.92 mt despatched in December 2010.

Total despatches during January-December of 2011 stood at 23.68 mt, up 11.86 percent compared with 21.17 mt despatched during the corresponding period of 2010, the release said.

Ambuja Cement Ltd’s December cement production stood at 1.91 mt, up by 5.52 percent as compared to 1.81 mt produced in November, and 6.7 percent higher compared with 1.79 mt produced in December 2010.

The company’s cement production during January-December of 2011 stood at 20.97 mt, up 4.22 percent against

20.12 mt produced during the same period of 2010. The company’s despatches or sales during the month of December stood at 1.93 mt, registering an increase of 5.46 percent over 1.83 mt produced in November 2010.

Total despatches during January-December of 2011 stood at 20.96 mt, up 4.17 percent as compared to 20.12 mt despatched during the corresponding period of 2010.

December cement exports India’s cement export, except ACC and Ambuja Cement, in December 2011 stood at 0.13 mt, the same as it was during the corresponding month of 2010, according to information available to Coal Insights.

The exports during the first nine months (April-December) of 2011-12 stood at 1.23 mt, up 7.89 percent compared with 1.14 mt exported during the same period of 2010-11.

Export of clinker in December 2011 fell by 14.29 percent to 0.18 mt from 0.21 mt in December 2010. The exports during the first nine months of 2011-12 stood at 1.34 mt, down 33 percent from 2 mt during the corresponding period of 2010-11.


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Facing strong headwinds during the last few months, the sponge iron sector in India is resorting to production cuts to survive the difficult market scenario. Increased

raw material prices and short supply of materials are also driving them to reduce production. To address these issues, a number of meetings have been held in the recent weeks. However, there has been very little positive outcome so far, industry sources said.

Coal, one of the essential raw materials for the direct reduced iron (DRI) industry is becoming increasingly difficult to obtain. The quantity of the material actually supplied by Coal India Limited (CIL) for the sector is far below the level of adequacy. Domestic coal availability issues coupled with price hike have toughened the situation.

At a juncture when higher prices of imported coal has almost pushed it beyond the reaches of medium to small sized sponge iron makers, domestic coal price hike has caused the industry to bleed profusely. However, CIL’s recent decision to roll back the increased prices has eased the situation to some extent. The other problems however still remain unresolved, the sources said. In addition to coal, availability of iron ore continues to be a grey area for the industry as lower availability

of the material has caused the prices to shoot up. “We mainly procure iron ore from Odisha region. But at present, only nine mines in the Keonjhar area of Odisha are operating while no mining is being done in the other mines,” a West Bengal based sponge iron maker complained.

“However, recently the cabinet is taking a few decisions to ease the availability of iron ore by opening up more mines which might solve the problem to some an extent. But, this might come into effect only after April,” he added.

Sinking demand In India, the monsoon is long over; but infrastructural development is still taking a backseat. This has proved to be another dampener for the industry. Unlike other years, the industry has failed to push up demand for sponge iron. The possibility of any major change in demand in the near future also looks dim, industry experts told Coal Insights.

In West Bengal, the industry is reeling under great pressure due to acute dearth of raw materials and slumping demand, said S. Bhattacharjee, Secretary of West Bengal Sponge Iron Manufacturers’ Association (WBSIMA).

“Throughout the country, the situation is dull for the sponge iron industry. But in West Bengal, the industry is operating at only 30 to 35 percent capacity,” he said. Currently, the total installed capacity of sponge iron production in West Bengal stands at 13,400 tons/day.

“Availability of raw materials is worsening with iron ore availability becoming poorer by each passing day,” he added.

Echoing his views, a senior official of Jai Balaji group, one of the leading direct reduced iron (DRI) manufacturers of the country, said the Indian market is absolutely dull with demand showing hardly any growth over the last few months.

According to a Raipur based sponge iron manufacturer, the current market of sponge iron is in deep distress in the current times. Dearth of new projects alongside skyrocketing input costs are dampening the sponge iron industry. Moreover, the ban on iron ore mining by the Karnataka government is leading to massive fall in iron ore production; and this has become the biggest evil of the DRI industry at present.

With CIL reducing their jacked up prices to some an extent and the government considering certain policy decisions to improve iron ore supplies to the sector, business may not remain as dull as ever in the coming months. The sponge iron makers are, however, keeping their fingers crossed. The good days will be greeted as they come. But right now, the struggle for existence continues.

Sponge iron makers slash productionto tide over crisis

Sanjukta Ganguly

Sponge iron makers importing coal again: Trader

A large number of Indian sponge iron makers have started coming back to the imported coal market, an official of a leading coal trader told

Coal Insights.“There have been a large number of enquiries from

sponge iron makers during the past three or four weeks and a number of orders have been placed by them. The situation was slightly different in the fourth quarter of 2011 (October-December),” the official said.

He claimed that orders are now being placed by sponge iron makers based out of Orissa as well as the Raipur belt, but refused to divulge the names of buyers.

“On an average we have sold around 100,000 tons of imported coal to various sponge iron makers during the last few days,” the official said, adding, there had been practically nil enquiries for imported coal from the sponge iron sector before this revival, which started from the middle of January 2012.


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Production of sponge iron in India has declined by 21.36 percent in Q3 of 2011-12, as compared to the production of the material during the corresponding period last

year, according to the data made available to Coal Insights by a member of the Sponge Iron Manufacturers’ Association of India (SIMA). During Q3 of 2011-12, total production of sponge iron stood at 4,510,459 tons whereas in Q3 of 2010-11, the figure was at 5,735,347 tons, as per the available data.

Out of the total sponge iron production during October-December 2011, gas based production accounted for 977,754 tons (1,473,008 tons in October-December 2010) whereas the remaining coal based production of sponge iron stood at 3,532,705 tons (4,262,339 tons in Q3 of 2010-11).

Exports of sponge iron by three major sponge iron manufacturers – namely Welspun Maxsteel Limited, Tata Sponge Iron Limited and Monnet Ispat & Energy Limited – has dipped by 70.53 percent in the third quarter of 2011-12 as compared to the corresponding period of 2010-11, according to the data. In Q3 (October-December) of 2011-12, total exports of sponge iron by these companies stood at 13,583 tons whereas

the exports were 46,092 tons during the corresponding period of last year.

Export of sponge iron (in tons)Company oct-Dec (2011-12) oct-Dec (2010-11)

Tata Sponge Iron Limited 0 4,900Welspun Maxsteel Ltd 3,540 41,192Monnet Ispat & Energy Limited 10,043 NATotal 13,583 46,092

*Note: Sponge iron export figures of Monnet Ispat & Energy Limited for Q3 of 2010-11 is not available.

Source: Sponge Iron Manufacturers Association (SIMA)

DRI Production in Q3 of 2011-12 (in tons) oct Nov DecTOTAL GAS BASED 341,718 311,031 325,005TOTAL COAL BASED 1,168,241 1,150,631 1,213,833GRAND TOTAL 1,509,959 1,461,662 1,538,838

Sponge iron Q3 production down 21% y-o-yCoal Insights Bureau

SPONGE IRON MANUFACTURERS ASSOCIATIONDRI Production 2011-2012

CptyL/t Apr MAy JuNE JuLy AuG SEpt oCt NoV DEC totAL

A. GAS BASEDESSAR STEEL LTD. 70.00 375834 329878 357746 404956 351275 267557 208613 181845 205147 2682851JSW ISPAT STEEL LIMITED 16.00 105682 104632 88570 99348 121087 102534 96970 77761 75328 871912WELSPUN MAXSTEEL LTD. 10.00 80360 66930 67635 55297 53430 34550 36135 51425 44530 490292 TOTAL GAS BASED 96.00 561876 501440 513951 559601 525792 404641 341718 311031 325005 4045055B. CoAL BASEDAARTI SPONGE & POWER LTD. 0.60 4799 3049 2853 3786 2171 2651 3502 2907 1960 27678ACTION ISPAT & POWER LTD. 2.50 10456 11512 12836 9368 7592 7564 4980 5623 5707 75638ADHUNIK CORPORATION LTD. 0.60 3926 3514 3669 3762 4062 2638 3109 2131 0 26811ADHUNIK METALIKS LTD. 2.70 16537 14465 3669 14090 8277 22107 18248 5719 12286 115398AKSHARA INDUSTRIES LTD. 0.60 4763 5044 4133 4375 4162 3705 4371 4202 4483 39238AMBEYIRONPVTLTD. 0.45 0 0 0 0 0 0 0 0 0 0AMBEYMETALLICLTD 0.36 0 0 0 0 0 0 468 3198 2152 5818ARYAVRATASTEELPVTLTD. 0.36 705 715 713 606 662 631 547 760 882 6221BALAJI SWAMI PREMIUM LTD. 0.20 1081 951 1049 1087 1269 152 600 500 450 7139BALDEVALLOYSPVTLTD. 0.30 2854 2323 2616 1873 1172 2072 2558 1852 3089 20409BELLARYISPATPVTLTD. 0.20 516 843 439 772 441 1294 650 540 600 6095BENAKA SPONGE IRON LTD. 0.60 1272 1757 1932 835 1045 452 760 750 800 9603BIHAR SPONGE IRON LTD. 1.86 5180 4638 11894 6821 10835 9504 5138 3917 4818 62745CRACKERS INDIA LTD. 0.60 3585 3227 3115 2564 1683 1702 1650 1500 1600 20626DHANALAKSHMI SPONGE IRON 0.60 3554 532 473 0 0 0 1303 2681 2499 11042DIVYAJYOTISTEELSLTD. 0.30 1115 1759 1048 0 0 0 0 0 0 3922DINABANDHU STEEL LTD. 0.60 0 0 0 0 602 2268 1898 370 1466 6604DROLLIA ELECTRO STEEL LTD. 0.66 5069 3559 3616 2762 3764 3357 3500 3400 3600 32627ELECTROTHERM INDIA LTD. 0.75 11759 15330 12042 10852 6789 5897 2901 3869 4093 73532SCAN STEELS LIMITED 0.60 3000 2600 2400 2200 2100 1900 1600 1800 1700 19300GALLANTT METAL LTD. 1.70 8687 8895 7165 5223 3876 7017 10370 9853 8858 69944


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GAYATRIMETALSLTD. 0.30 595 0 562 203 209 0 0 0 0 1569GANESH SPONGE PVT LTD. 0.90 5220 4960 3965 3460 3690 1870 3135 2570 2505 31375GODAWARI POWER & ISPAT 4.95 26107 34656 29957 31985 31015 17759 29369 28098 19131 248077HI-TECH POWER & STEEL LTD. 0.60 3279 4304 3949 3221 2312 3227 3167 2837 3802 30098HOSPET ISPAT PVT LTD. 0.60 0 0 0 0 0 0 0 0 0 0HOTHUR ISPAT LTD. 0.90 0 0 0 738 1443 1203 1200 1100 1250 6934HOWRAH GASES LTD. 0.60 2428 2714 2735 2291 1738 2593 2167 2710 1890 21266HARYANASTEEL&POWER 0.35 2000 1900 1800 1500 1300 1100 1200 1350 1250 13400HARE KRISHNA METALLICS 0.75 7210 5092 8044 4733 8988 9450 8056 9350 8453 69376JAI BALAJI SPONGE/HEG 3.45 18560 17299 15198 19365 14761 14578 14490 17592 17812 149655JANKI CORP. LTD. 1.80 7974 7377 7032 9862 11305 10940 18255 12060 12235 97040JINDAL STEEL & POWER LTD. 13.70 126834 128459 108360 117554 115595 106660 100030 100557 111577 1015626JAI DURGA IRON PVT LTD. 0.36 1281 1208 1365 1351 1207 768 627 1245 1335 10387JAYASWALSNECOINDUSTRIES 2.55 17344 16748 21130 19037 19529 14252 15667 4147 18055 145909JAYIRON&STEELLTD. 0.60 768 448 712 631 489 345 116 534 518 4561KANISHK STEEL INDUS. LTD. 0.60 2363 2885 1220 2294 2753 1886 1332 1333 2185 18251MINERA STEEL & POWER PVT LTD. 1.20 6590 5942 5034 5588 8614 8018 7510 8018 8349 63663LLOYDSMETAL&ENGG.LTD. 3.00 12604 13455 16743 17122 17064 13754 14885 7660 9349 122636MONNETISPAT&ENERGYLTD. 8.00 58889 55842 51126 71262 71135 67705 76433 70316 73580 596288NALWA STEEL & POWER LTD. 1.98 14820 15264 13734 14857 15617 15173 13166 14955 14606 132192NOBLE DISTILLERIES LTD. 0.72 0 0 0 0 0 0 0 0 0 0OCL IRON AND STEEL LTD. 1.20 9201 9601 8272 8149 8007 7013 8333 9868 7670 76114ORISSA SPONGE & POWER 2.50 3946 4804 1938 0 0 3284 1446 4103 6189 25710PGM FERRO STEELS LTD. 0.60 3000 2750 2500 2000 1800 1700 1600 1500 1800 18650POPURI STEELS LTD. 0.45 672 1544 1295 1100 1100 1100 1200 1150 1250 10411RAYENSTEELLTD. 0.60 2370 1132 1104 78 984 512 439 460 669 7748SARDAENERGYLTD. 2.10 19395 20832 21687 21879 18820 16187 19462 21646 19130 179038RANGINENI STEEL LTD. 0.25 1057 787 1455 1130 956 335 0 0 0 5720RASHMI ISPAT LTD. 0.60 2288 1635 1489 1650 2115 1662 1235 1392 2921 16387RUNGTA MINES LTD.(Est.) 6.30 35000 35000 35000 35000 35000 35000 35000 35000 35000 315000SKS ISPAT LTD. 2.70 12922 10329 11212 11509 13613 11533 10231 12766 11600 105715NARBHERAM POWER 1.00 8193 5746 180 8969 2948 0 0 7973 4775 38784SCAN SPONGE IRON (Est.) 0.24 1200 1100 1000 1000 1000 1000 1200 1150 1000 9650SHRADDHA ISPAT LTD. 0.60 3372 3440 3049 2640 3092 3034 3200 2369 2584 26780SHRI BAJRANG & POWER 2.10 9305 10891 12385 7340 11645 9092 6726 7708 7637 82729SHYAMSELLTD. 1.60 11914 12252 11504 10993 11903 9832 10811 9327 13055 101591SINGHAL ENTERPRISES LTD. 2.50 13875 13983 15064 11363 13959 9242 11250 12703 15542 116981SURANA INDUSTRIES LTD. 1.28 1242 619 2205 963 1952 2680 737 51 127 10576SURENDRA MINING INDS. LTD. 1.20 3514 2945 2983 3111 3514 1249 2914 2542 3147 25919SREE METALIKS LTD 1.74 13325 11239 8548 7771 5700 4668 4448 5923 4894 66516SUNFLAG IRON & STEEL CO. 2.55 5034 13032 13699 7982 11992 14096 15316 15287 9327 105765SURAJ PRODUCTS LTD 0.36 2655 3016 2714 2576 2529 2560 2467 2500 1776 22793SURYAASPONGEIRONLTD. 0.84 900 3036 2286 2665 1283 340 0 0 0 10510TATA SPONGE IRON LTD. 3.90 27364 23272 20469 22684 27802 23530 8876 13042 31455 198494TOPWORTH STEELS LTD. 1.65 12482 15605 14052 14081 11448 13981 11785 11496 16232 121162VANDANA GLOBAL LTD. 2.31 14368 11147 16300 15369 16435 10285 14894 13925 10441 123164VISA STEEL LTD. 3.00 10376 11734 13733 18301 15922 4490 3756 2861 24408 105581MPL Cement & Sponge Pvt Ltd. 0.09 240 200 192 248 216 216 194 775 258 2539WELSPUN STEEL LTD. 1.20 12000 11840 10179 10060 9037 7842 11763 10911 11996 95628YESHASHVISTEELLTD. 0.30 306 12 287 1633 726 50 0 199 25 3238OTHER UNITS (Est.) 140.00 850000 850000 850000 800000 700000 650000 600000 600000 600000 6500000 TOTAL COAL BASED 250.60 1495240 1496789 1455109 1430274 1324764 1212705 1168241 1150631 1213833 11947586 GRAND TOTAL (A+B) 346.60 2057116 1998229 1969060 1989875 1850556 1617346 1509959 1461662 1538838 15992641EXportS 2010-2011WELSPUN MAXSTEEL LTD. 10.00 7754 15278 2591 3102 1852 1570 500 0 3040 35687TATA SPONGE IRON LTD. 3.90 0 2500 2500 2451 869 7500 0 0 0 15820MONNETISPAT&ENERGYLTD. 8.00 2601 2576 2607 5252 7616 10275 10043 40970Total 10355 20354 7698 10805 10337 19345 500 0 13083 92477

CptyL/t Apr MAy JuNE JuLy AuG SEpt oCt NoV DEC totAL


More than 800 delegates from over 25 countries took part in the 2012 edition of the International Mining Exhibition (IME 2012). Concurrent to the 4th Asian

Mining Congress, the 2012 edition of IME was organised by MGMI in association with Tafcon Projects (I) Pvt. Ltd. at the Salt Lake Stadium, Kolkata.

The event provided an ideal forum for miners, planners and policy makers to discuss the various issues affecting the mining industry in the Asian region as well as in the rest of the world. The event provided good business opportunities for the manufactures of mining and allied industries to showcase their products, technologies, new initiatives and services to the global audience.

The earlier three editions of the event held in January 2006, 2008 and 2010 had also been highly successful. A large number of delegates and exhibitors from India and 20 other countries had participated in these events, offering excellent networking and business opportunities. Over the years, IME has turned out to be a unique platform for entrepreneurs, decision makers, senior government officials, investors, industry members, traders, equipment buyers and suppliers, academia, miners, engineers and trade delegation to congregate, brainstorm, showcase and forge meaningful partnership for business.

25 countries take part in mining showCoal Insights Bureau

World clean coal week, 2012 in Delhi

The World Clean Coal Week (WCCW), India Focus will be held on June 14-15, 2012 in Delhi, India, according to information available with

Coal Insights. Over 300 leaders and experts from more than 30 countries are about to attend the event.

The theme of this year's conference is ‘Roadmap to Active Deployment of Cleaner Coal Technologies’. This covers a wide spectrum of important topics on gasification, coal to liquid, syngas, clean power generation and environmental issues.

In 2010 and 2011, WCCW was held at Beijing, China and attracted more than 700 attendees from 50 countries. This year the event is expected to be attended by an even larger audience and is likely to exceed the previous two editions in terms of business generated.

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2012


State-owned Coal India Ltd (CIL) has posted a 54 percent jump in net profit to `4,037 crore for the quarter ended

December 2011, compared to `2,626 crore in the corresponding period last year.

The company, which is 90 percent owned by the government, registered a 21 percent growth in sales to `15,349 crore in the December quarter against `12,686 crore in the same period last year. CIL also reported other income of `1,856 crore largely due to the cash pile that it holds. This was almost a third of the profit before tax of the company.

The company's stand-alone net profit grew over 10-fold for the third quarter at `1,219.33 crore. It reported a stand-alone profit of `115.37 crore during corresponding year last fiscal. CIL’s total income increased nearly four times to `1,566.23 crore for the quarter from `400.56 crore for the quarter ended December 31, 2010.

CIL said it has made an additional provision of `333 crore in third-quarter results for the new wage agreement signed on January 31. In the September quarter, the company had provided for `750 crore towards the wage increase.

The new wage agreement, signed with its five recognised trade unions, provides for 25 percent rise in gross salaries, and is expected to add about `4,000 crore the company's annual wage bill of `20,000 crore. CIL plans to make the rest of the provision in the March quarter, a company statement said. CIL employee benefit expenses in December quarter rose 20 percent to `5,622 crore.

About 3.65 lakh employees stand to benefit from the 25 per

cent increase in gross salaries that will be effective from July 2011 running until June 2016.

Output The company reported production of 114.6 million tons (mt) for the December 2011 quarter as expected, while the offtake during the quarter was 110.27 mt. It has given a guidance of production of 440 mt for the full year ending March 2012. For the nine months ended December 2011, production was at 291.24 mt, while the offtake was 310.25 mt.

The company had raised coal prices in February 2011. Last month, CIL buckled under pressure from the government and rolled back another round of price increase under the Gross Calorific Value (GCV) based mechanism effective January 1 after customers protested. The company had switched to the GCV based mechanism in line with the international norms and had proposed a 12.5 percent hike in prices. The new pricing is likely to be reviewed early next financial year. Meanwhile, the Coal India Board has approved the Amarapali coal project in the North Karanpura mines of the Central Coalfields Ltd (CCL). This project has an annual production capacity of 12 mt. It is expected to contribute 1.5 mt in the next financial year.

OutlookBased on CIL’s nine-month production figure of 291 mt, analysts estimate that the company is unlikely to meet its revised FY2012 production target of 440 mt. Further, infrastructural bottlenecks (mainly availability of railway rakes) are likely to result in only 2.5 percent and 4.9 percent y-o-y growth in sales volumes during FY2012 and FY2013, respectively. Additionally, higher staff costs are expected to hit CIL’s operating margins during the next fiscal.

Coal India performance highlights

(rs crore) Q3Fy12 Q3Fy11%

Change y-o-y

Q2Fy12%

Change q-o-q

Total operating income 15,349 12,687 21 13,148 17EBIDTA 4,875 3,466 40.6 2,750 77EBIDTA margin % 31.8 27.3 444 bp 20.9 1,085 bpAdjusted PAT 4,043 2,634 53.5 2,588 56Production (mln tons) 115 113 1.4 96 19Sales (mln tons) 110 110 -0.2 106 4

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The Public Enterprises Selection Board (PESB) has recommended Singareni Collieries Company's Chairman and

Managing Director S.S. Narsing Rao, IAS, for the top position of Coal India (CIL), the world's largest coal producer.

The search-cum-selection committee of PESB interviewed 19 aspirants including heads of a clutch of state-run firms and CIL's director (personnel) R. Mohan Das.

According to information available on the PESB website, Rao was found the most suitable among the candidates. A 1986-batch IAS officer of the Andhra Pradesh cadre, Rao is heading Singareni Collieries since 2006. Following the recommendation of the PESB, the coal ministry would refer its choice to the Appointments Committee of the Cabinet, which will have the final say on the appointment.

Rao would have to face lots of challenges in the face of growing demand for coal in the country, which is grappling with a severe coal crunch amid a widening demand-supply gap. The gap is pegged at 114 million tons (mt) this fiscal and is likely to exceed 200 mt by 2016-17. In the face of huge demand growth, CIL is battling to augment production amid regulatory and other hurdles.

Currently, the state-run coal monolith is headed by Zohra Chatterji, an additional secretary in the Coal Ministry. Chatterji assumed the charge of CMD with effect from February 1, 2012 following the retirement of N.C. Jha.

The CIL CMD’s position was lying vacant after the retirement of P S Bhattacharyya on superannuation in February 2011. Jha was acting CMD of the company from March 2011 to January 2012 till his retirement and the position

is currently held (on temporary basis) by Zohra Chatterji.

A tough choiceSelecting the most suitable candidate was a tough choice for PESB given that the list of interested candidates was a pretty long one.

The persons who were interviewed in the selection meeting were R. Mohan Das, DIR (P & IR), CIL, D.C. Garg, CMD, WCL, T.K. Lahiry, CMD, BCCL, V.K. Singh, CMD, NCL, Rakesh Sinha, CMD, ECL, A.N. Sahay, CMD, MCL, B.L. Bagra, Dir (Fin), NALCO, R.B. Misra, Dir (Fin) HECL,

I.S. Jha, Dir (Project), PGCIL, Ansuman Das, Dir (Comm), Nalco, S.K. Tripathi, CMD, MSTC, K. Hari Kumar, CMD, HIL, A.K. Mathur , ED, SAIL, Dr Nandita Chatterjee, IAS, As, MoEF, Shreemat Pandey, IAS, G/o Rajasthan, Raj Pal Singh Kahlon, IAS 1984, G/o West Bengal, Rakesh Kumar Tandon, IRTS, 1978, Ministry of Railways, S. Narsing Rao, IAS, CMD, SCCL and Mukund Prasad, Dir (CS), WELSPUNH.

Rao, an IAS officer, is currently working as CMD of Singareni Collieries Company Ltd (SCCL), a joint venture of Andhra Pradesh Government and Government of India. He is credited with bringing SCCL back on the revival path after it was referred to the BIFR years ago.

SCCL had produced 51.33 mt of coal in 2010-11, marginally higher than the target of 51.3 mt for the year. For the year 2011-12, the company has set a production target of 53.4 mt. It is to be noted that SCCL had never missed its production target during the past nine successive financial years beginning 2002-03.

However, the major challenge before Rao as CMD of CIL, which meets around 70 percent of country’s total coal

demand, will be to achieve the production target set for the company for the coming years.

CIL had missed its production target of 440 mt in 2010-11 and is also on the verge of missing its revised production target of 447 mt for 2011-12. The actual production target for 2011-12 was initially fixed at 520.5 mt, but was subsequently reduced to 485 mt and then further to 460 mt and the current target is only 447 mt.

Narsing Rao tipped to become CIL chairmanCoal Insights Bureau

Narsing Rao, Chaiman, SCCL

P S Bhattacharyya Zohra ChatterjiN C Jha

Grand predecessors


The high cost of imported coal has claimed yet another victim in India’s sprawling power sector. Adani Power Limited, the energy arm of the `45,000-crore Adani

Group, has slipped into the red in the third quarter of FY12. This, despite the group’s prolific coal import business and overseas assets, shows the expected impact of the import-dependent expansion drive in a controlled power tariff regime, said analysts. Incidentally, Adani Power depends entirely on imports for its current coal requirements.

Apart from the increased coal costs, non-availability of transmission lines and foreign exchange losses drained the company’s coffers. Adani Power reported a net loss of `358 crore for the October-December quarter against a net profit of `109 crore in the same period a year ago.

“These results are a reflection of price increase on imported coal and non-availability of transmission line for evacuation of power,” company chairman Gautam Adani said.

The company’s net sales more than doubled to `1,059 crore. Its average PLF for the third quarter was 66 percent for FY12 as against 85 percent of the corresponding quarter in the last fiscal. The company said it could not operate its 1,320 MW of generation capacity, as the state power utility did not commission transmission grid in time.

Adani Power posted a mark-to-market loss of `205 crore on derivatives during the quarter. The rupee fell 7.7 percent against the dollar in the period and has rebounded nearly as much in January.

CFO Prabal Banerjee stated that loss worth `295 crore was

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Adani Power hit by high coal import cost Coal Insights Bureau


incurred on account of fluctuations in the foreign exchange values and claimed that over `200 crore of the same will be recovered during the current quarter. “Since the rupee has recovered since December-end, almost 90 percent of these losses have been reversed,” Banerjee said.

Its average cost of coal doubled during the fiscal under review while its average realisation stood at `3.51 per unit, which was at ̀ 3.62 per unit in the second quarter of the current fiscal. The merchant tariff, which refers to prices outside long-term agreements, rose to `4.09 per unit in the quarter from `3.88 per unit in the year-ago period.

The company operates 3,300 MW of imported coal-fired power generation capacity at Mundra in Gujarat. By July, the company is aiming to add 1,320 MW of capacity at Mundra and 660 MW at Tiroda in Maharashtra.

Adani sounds positiveThe current trend, analysts said, could continue unless the government took some measure to address the coal issue. Adani, however, was hopeful about an improvement in the overall scenario, going forward.

“Coal availability and price, both have now become important national issue and since Government of India is now involved at the highest level in finding solution, the power industry is hoping for an early and positive solution,” Adani, also chairman of the Adani Group, said.

Recently, an industry delegation led by Ratan Tata recently met prime minister Manmohan Singh to press for measures to help the power sector. Adani was a member of the delegation. Subsequent to the meeting, the prime minister announced the government’s commitment to redress the situation and urged Coal India Ltd (CIL) to deliver goods.

India holds 10 percent of the world's coal reserves but has struggled to meet power producers' needs because of stagnating output due to delays in environmental clearance and land acquisition and poor investment in mining, forcing generators to import.

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Adani finalising $1.5-bn port loan

Adani Enterprises is finalising a A$1.4-billion ($1.51 billion) project finance loan with a group of lenders to replace a US$2-billion bridge loan

raised to buy an Australian coal terminal last year, according to reports.

Adani could sign the deal by end March and is in talks with Commonwealth Bank of Australia, National Australia Bank , Westpac Banking Corp and a couple of the Japanese mega banks for the debt, reports said.

The one-year bridge, provided by Standard Chartered Bank and State Bank of India, falls due at end May.

The bridge was raised to fund the acquisition of the Abbot Point coal terminal in Queensland State. Adani’s port operating arm Mundra Port & Special Economic Zone bought the port in May last year in one of the largest acquisitions by an Indian company in Australia.

The tenure of the new facility is split into three and five years. The loan margin has not been set, reports said, and there is still some room for it move up as banks’ funding costs continue to soar.

Located in North Queensland in Australia, the Abbot terminal services three mines in the Bowen Basin. The port also helps Adani ship coal from Galilee in Australia to its power plants in India. Reports said Macquarie Capital Advisers and Standard Chartered are advising Adani on the refinancing.

Adani port reports profit

The group’s port operations performed better. Adani Port & SEZ Limited (APSEZ) reported that net profit rose 36 percent to `311 crore for

the third quarter. Income for the third quarter stood at `693 crore, registering a 53 percent growth over the same period of 2010-11.

During the period under review, APSEZ emerged as fourth largest commercial port in India by cargo. CFO B. Ravi said that the flagship Mundra Port registered a 29 percent jump in cargo while all the major ports grew by 3 percent in the past nine months.

“We will consolidate the results of Abbot Port of Australia and the newly commissioned facility at Hazira by March. Today, we have the capacity to handle 165 mt of cargo a year and it will increase to 225 mt in the next 3-5 years,” said Ravi.

Gautam Adani, Chairman, Adani Group


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Maharashtra State Power Generation Company Limited (Mahagenco), a state-owned power utility of the country, has embarked upon a number of

new power projects to increase its generation capacity by 13,940 MW. This additional capacity would add to its current installed base of 9,996 MW and help the utility meet the future energy needs of the state as well as the country. Some of the projects are already in the stage of implementation while others are in the pipeline.

The existing projects of the utility include seven thermal power projects (Koradi, Nashik, Bhusawal, Paras, Parli, Khaparkheda, Chandrapur) with combined capacity of 6,800 MW. The hydro power capacity (Koyna and small projects) is 2,344 MW, while gas based projects (Uran G.T. and waste heat recovery) have total capacity of 852 MW.

Projects in the pipelineOne of the major projects that Mahagenco has undertaken is the Uran Gas Based Combined Cycle Power Plant. This project would have a total capacity of 1,220 MW with 406 MW coming up under block-I and 814 MW under block-II. Tender for Lump sum turnkey contract for installation of 1,220 MW advance class gas turbine based CCPP was invited on January 28, 2011. Bids were received on July 8, 2011 and Cover-I opened on the same day. Letter of award for lump sum turnkey contract was planned by December 2011. To this extent, the commissioning (COD) of Block I (406 MW) is expected by June 2014 followed by Block II (814 MW) by August 2014. Land, Water and other statutory clearances are available. Tying up of gas for

the project is in progress. The group of ministers (GoM) has accorded approval for implementation of 1,220 MW Combined Cycle Power Project at Uran, according to company sources.

The second project in the pipeline is the Bhusawal TPS Unit 6 with capacity of 1x660 MW. Land necessary for the project has already been acquired. Water required for the project can be made available from Hatnur Dam and Sudhgaon Bandhara as well as the balance water requirement of 7 MM3/year can be made from Ozerkheda Dam, informed company sources. Fuel supply has been assured by MahaGuj from Machhakata coal blocks.

As far as environmental clearance is concerned, the Terms of Reference (TOR) was received from the Ministry of Environment & Forests, Govt. of India on August 27, 2010. Accordingly, Environment Impact Assessment (EIA) study has been carried out and application made to MPCB for public hearing. To expedite the process, NIT was issued on November 5, 2011 for Bhusawal Thermal Power Station (1x660 MW) on EPC basis. In fact, Government of Maharashtra has accorded approval for implementation of this project and the project is expected to be commissioned by October 2016.

The third project on the list is the Nasik Thermal Power Station Unit 6 (1x660 MW) which is planned to install one coal based super critical unit of 660 MW capacity at Nasik TPS premises. Land for setting of this project is being made available by suitable readjustment of land in possession of Mahagenco. Fuel will be supplied to the project by from Mahanadi coal blocks.

Environment Clearance entailing the Terms of Reference (TOR) has been received from the Ministry of Environment &

Mahagenco coming up with 13,940 MW capacitySanjukta Ganguly


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Forests, Govt. of India on June 9, 2011 whereas the Environment Impact Assessment study is in progress. The Government of Maharashtra has accorded approval for implementation of this project in its cabinet meeting held on November 9, 2011.

Currently land acquisition is in progress for another TPP named the Paras Thermal Power Project Unit 5 (1x660 MW) which is planned to install one coal based super critical unit of 660 MW capacity at Paras. Allocation of water for this project has already taken place with Water Reservation department whereas coal supply has been assured from Mahanadi coal blocks.

As for the Latur Coal Based Unit 1&2 (2x660 MW) or Gas based CCPP Block-I & II (2x750 MW) is concerned, MSPGCL signed Memorandum of Understanding (MoU) with BHEL in 2009 for formation of Joint Venture Company to set up 2x660 MW super critical Power Plant or 1,500 MW gas based combined cycle power plant at Latur. The JV agreement with BHEL was signed on November 11, 2010.

The activities for land acquisition for 1,500 MW gas based project are in progress. The Divisional Commissioner has accorded approval for rates of the land required to be acquired whereas action for fuel linkage is in progress. It is envisaged to place the LOA for Main Plant by April 2012. To this extent the commissioning of the project is expected as under:

(i) Gas based: Block-I by April 2015 and Block-II by June 2015 or

(ii) Coal based: Unit 1 by April 2016 & Unit 2 by September 2016.

After finalisation of coal based or gas based projects, Mahagenco will submit the proposal of this project to GoM for approval. The type and capacity of the project will be decided by Latur Power Company Ltd.

The Dhopawe TPS Project Unit – 1 to 3 (3x660 MW), the fourth project on the cards of Mahagenco, is proposed to be implemented by way of JV structuring. The proposal for acquisition of land has been submitted to the Collector, Ratnagiri. Joint measurement for 194.81 Ha was completed in February 2009, whereas Joint measurement of the remaining land has been started from June 8, 2011. Water required for the project is available from Koyna tailrace whereas supply of coal will take place from Machakkata coal block.

The Terms of Reference (TOR) has been issued by the Ministry of Environment & Forests, Government of India for carrying out Environment Impact Assessment (EIA) studies. For carrying out Marine EIA study in line with TOR, work order is placed on National Institute of Oceanography, Mumbai. The proposal has been submitted to GoM for in principle approval for JV structure, ownership and equity participation. In case of the Dondaicha TPS Unit – 1, 2, 3, 4 & 5 (5x660 MW), based on the reconnaissance survey, proposal for acquisition of 885 Ha of land at Vikharan, Methi, Kampur & Varjhari was submitted to the Collector, Dule in 2009.

Joint measurement of 533.06 Ha land at Vikharan (238.11 Ha) & Methi (294.95 Ha) was completed in the month of June 2009. Due to the protest of land owners at Kampur & Varjhari, balance land of 315.49 H (private) & 112.21 H (Govt.) at Vikharan for ash disposal was identified and proposal for

its acquisition submitted to the Collector. Coal required for Unit 1&2 (Stage-I) will be made available from Chendipada coal block, Orissa. The U.C.M (Uttarpradesh-Chattisghad-Maharashtra) JV company who has been allotted the coal block have appointed MDO to develop the said mine.

Coal needed for Unit 3, 4 & 5 (Stage-II) is proposed to be made available from Machhakata coal block in Orissa. However, if Dhopawe 3x660 MW project is approved by GoM, the coal available from this coal block will be diverted to Dhopawe project and the coal required for Dondaicha Stage-II project will be made available from Mahanadi coal block in Orissa. In case of delay in availability of coal from Mahanadi coal block, coal will be made available from tapered linkage.

The Terms of Reference (TOR) has been received from Ministry of Environment & Forests, government of India on May 5, 2011 and Environment Impact Assessment study is in progress, according to company sources.

Another coal based Thermal Power Project near Kanpa (2x660 MW) has been proposed for implementation by way of JV structuring. Preliminary activities for land acquisition are in progress. For grant of long term coal linkages, follow up is going on with Ministry of Coal as well as the Central Electricity Authority.

The coal based thermal power project in Mendki with a capacity of 2x660 MW has been proposed for implementation by way of JV structuring. Preliminary activities for land acquisition are in progress. For grant of long term coal linkages, follow up is going on with Ministry of Coal.

Lastly, the coal based Thermal Power Project near Manora has been proposed for implementation by Mahagenco near Manora in Gondia District. Preliminary activities for land acquisition are in progress. For grant of long term coal linkages, follow up is going on with Ministry of Coal/ CEA.

Mahagenco moves HC The Maharashtra State Power Generation Company Limited (Mahagenco) has moved the judiciary challenging a lower court's order of January 6 directing it to lift 2.15 tons coal from Western Coalfields Limited (WCL) mines to transport it to a nearby thermal power station. According to the petitioner, WCL had expertise in this task and it was an important part of fuel supply agreement between the two entities. Terming the lower court order as "impractical", the generation company contended that it ignored the coal transportation practice including difficulty in transporting coal from pit head to the railway siding.

In their appeal filed under Section 37 of the Arbitration and Conciliation Act, Mahagenco argued that it had already obtained consent of former Chief Justice of India V.N. Khare to act as an arbitrator while WCL had failed to do so. The generation company has prayed for modification of a lower court order and also a direction to the coal company to transport the same from their mines to railway siding. The petitioner had accused WCL of misusing its position to deny legitimate supply of coal to its thermal power station, leading to loadshedding in the state.


Coking coal is one of the most critical steel making raw materials and domestic

availability is limited. Steel makers thus have no option but to import coking coal.

Total coking coal reserves in the country is 34 billion tons, approximately 12 percent of the total reserves of 285 billion tons. Occurrence is also limited to mostly

Jharkhand and the Jharia coal basin is the biggest coking coal reserve of this country.

If the country has to augment its own coking coal production and reduce dependence on imports, it does not have any alternative but to go for evacuating the Jharia Coalfields. Apart from reducing dependence, the import bill may also become very high as global coking coal price is moving up daily and may touch as much as $500 per ton in the near future.

Therefore if we conduct a cost benefit analysis of importing 100 million tons (mt) of coal at $500 per ton at the port plus transportation charges to the steel plant and cost of infrastructure to handle to handle 100 mt of coking coal and compare it with the cost of evacuation of townships, building of new townships and the mining cost of working at a very high coal:overburden ratio, we will find the latter option will be far more economical.

Problems of Jharia coalfieldsThe Jharia coalfield is one of the oldest coalfields of India which started mining in the mid 18th century and is also one of the biggest problematic areas from the mining point of view. It has been exploited for more than 150 years leaving behind a landscape riddled with fire, subsidence etc. There are 65 surface and underground fires in the coalfield and billion tons of coal locked up due to fire.

Depillaring of pillars cannot be done in the area due to problem of blocked reserves under townships, underground and surface fire, waterlogged workings etc. There are townships like Jharia , Kirkend, Katras etc, under which huge coking coal reserves are blocked.

Unfortunately, nearly 60 percent of the prime coking coal has been lost due to poor extraction technology. The whole of Jharia coalfields has on the surface a habitation of nearly 12 lakh people who need to be evacuated. In any case they are

in the danger zone because of the fire underneath and have to be evacuated in course of time. A Jharia Action Plan is in operation for the evacuation of endangered persons.

Planning for Jharia coal basinImmediately after nationalization of coking coal in the year 1971, Polish mining engineers planned for an integrated development of the whole coal basin, dividing it into 10 to 11 opencast blocks and five to six underground blocks.

Somehow the management was so shortsighted at that point of time that it did not approve such a balanced integrated approach. The result is that we are facing acute shortage of coking coal at an exorbitant cost to the nation. However, I believe it is not too late even now.

I believe the shortage of coking coal in the country can be met by subdividing the Jharia coal basin into mega opencast projects

This assumes a lot of importance at a stage when the coking coal import may touch 100 million tons per annum (mtpa) by 2020 at an astronomical cost of nearly $50,000 million. Even if a fraction of this amount is utilised, then Jharia and its neighbouring townships can be evacuated. A cost benefit analysis, as I mentioned earlier, will show that evacuation of the townships will be a cheaper alternative.

The upper seams of Jharia coalfield are prime coking coal, i.e seams XVIII to IX seam and semi coking are VIII to V seam and the rest are non coking.

Mega washeries may be set up for washing the run of mine. The washed coal is used by steel plants. The Damodar river and a few rivulets are passing through the Jharia coalfields and a lot of coal is blocked under the river and the rivulets. As I already mentioned, a lot of prime coking coal which has been lost due to poor extraction rate of the upper coking coal seams can be taken out once the surface is freed from townships.

Once the fire is dug out, huge quantities of prime coking coal will be released for extraction. Also, the Damodar and the rivulets should be diverted if necessary for releasing the coal underneath.

Fire and subsidence is threatening a large population of the Jharia Basin. Even the townships of Jharia, Kirkend and Katras etc are threatened. An approved project, the Jharia master plan of approximately `10,000 crore envisages that 79,159 houses will be rehabilitated. Since the DGMS has already mentioned that most of the areas are unsafe for be living, it will be prudent for the government to act before any disaster happens.

Jharia coalfields must be evacuated to augment coking coal production

J.P. Panda

ExPERT sPEAk


ExPERT sPEAk

The master plan can be extended further to evacuate the Jharia, Kirkend and Katras townships in a phased manner and make the whole area free from habitation. After that, the entire BCCL operations can be converted into a few mega projects of 40 to 50 mtpa capacity mines.

Mega project planning should include infrastructure planning of the whole coalfield/coal basin or the mega coal mine, involving the Planning Commission, ministry of coal, ministry of railways, ministry of power and ministry of environment.

All coal mega projects should be treated at par with UMPPs of the power sector. A single window clearance should be aimed for all the mega projects. Comprehensive mine planning including R & R package and mine closure plan can be sanctioned at one go. New and modern townships can be built to settle the PAPs (Project Affected People) and employment opportunities can be created by building skill development centres.

Some advantages of mega opencast projects are: ♦ All the coal lost due to underground mining can be

recovered; ♦ All fires can be dug out and environ can be made very

clean; ♦ The time taken for all clearances, like environment and

forests, is the same as that of small project. Indeed it is always advisable to go for environment clearance for the whole Jharia coal basin;

♦ The infrastructure such as rail, road etc. can be planned much in advance;

♦ Large coal washeries can be built in the peripheries for beneficiation of coal;

♦ The mechanisation level can be very high and manpower requirement will be much less;

♦ The environment management can be managed by a highly skilled team and indeed zero pollution level can be easily achieved and maintained;

♦ The backfilling and post mining restoration of ecology or the mine closure plan can be done in a much better way;

♦ The CSR (corporate social responsibility) and other needs of local population can be met due to higher profit;

♦ Very high capacity HEMM (heavy Earth Moving Machinery) like Draglines of 122 m3 bucket capacity with 128 m boom length, rope shovels of up to 63 m3 capacity, hydraulic shovels with 50 m3 bucket capacity and dumpers with 360 to 400 t payload and dozers up to 860 HP are the maximum sizes presently available in the market. Coal India has already procured and inducted 42 Cum shovel and 240 ton dumpers at Gevra OCP producing currently 35 mt that is likely to go up to 50 mt. The necessary expertise is available with Coal India, which can be of huge advantage in mining mega projects.

(The author is managing director of Priya Mining Consultancy and Services Ltd, which provides consultancy on both underground and opencast coal mines, including EMP-EIA, forest clearance etc. The company has also produced CDs on a wide variety of subjects including all DGMS circulars from 1957 till December 2010, a history of disasters in coal mines for the last 100 years and safety and productivity improvement in both opencast and underground mining. The author can be contacted at [email protected].)


GOvERnmEnT

The government will fix a “floor price” and “reserve price” for auctioning captive coal blocks through competitive bidding route to private sector companies

and government sector companies respectively, but will fix a separate procedure for allotting blocks to power projects under competitive bids for tariff,

The procedure for allotment of coal blocks were announced by a notification by Ministry of Coal, on February 2, nearly six months after the ministry came out with four sets of drafts inviting suggestions from stakeholders to finalise the rules and regulations for the auction.

According to the notification, “floor Price” will be the minimum price fixed by the Central Government for an area containing coal offered for auction by competitive bidding whereas “reserve price” will be applicable price for an area containing coal which is to be allotted otherwise than through auction by competitive bidding.

Competitive biddingThe notification says that the Central Government will identify the area containing coal for allocation through auction by competitive bidding and will earmark areas containing coal for each specified end use separately for the purpose of auction.

The government will invite offers through auction from the companies engaged in the business of specified end uses as mentioned in Section 11A of the Mines and Minerals (Development and Regulation) Act, 1957 for the allocation of coal or lignite blocks in the areas identified and then notify a floor price for each identified area.

The companies intending to participate in competitive bidding would be required to submit their offers in two parts i.e. technical bid; and commercial bid, and the successful bidder would be allocated the area containing coal, the notification said.

Government companiesThe notification says that Central government will identify the area containing coal for allocation to the Government company or corporation and will also earmark the area containing coal for mining or other specified end use, separately for the purpose of allocation after fixing a reserve price for each of the areas.

The Central Government will then circulate to the State Government and concerned Ministries of the Central Governmental list of the areas containing coal identified inviting applications from the government companies or

corporations for allocations. The applications received would be considered in consultation with concerned state governments and the ministries of the Central Government, it said.

The notification further said that the company or corporation for allocation of area containing coal would be selected from amongst the eligible applicants and the areas would be allotted to the selected Government company or corporation.

Competitive bids for tariffDetailing the procedure for allocation of area containing coal to a company or corporation awarded a power project on the basis of competitive bids for tariff, the notification said that the Central Government will identify the area containing coal for allocation to a company or corporation awarded a power project on the basis of competitive bids for tariff for the purpose of reconnaissance permit, prospecting licence or mining lease from the State Government.

The central government will also fix a reserve price for each area and circulate to the State Government and the Ministry of Power of the Central Government a list of the areas for inviting applications from eligible Government companies and corporations for allocation, it said.

The notification further said that the applications received would be considered in consultations with the concerned State Governments and the Ministry of Power of the Central Government.

Thereafter, the Central government shall earmark the area containing coal to the selected State Governments for allocation to the company or corporation awarded a power project on the basis of competitive bids for tariff.

It further said that the State Governments shall select a company or corporation on the basis of competitive bids for tariff and recommend for allocation of area containing coal to such company or corporation and the allocation would be made to selected company or corporation.

The notification said that the proceeds of the auction and reserve price shall be transferred to the concerned State Government where the area is located.

The notification said that the Central Government shall enter into an agreement with the allocatee company. In case of contravention or non-fulfillment of the obligations under the agreement or the terms and conditions of allocation, government reserves the right to take appropriate action, including the right to de-allocate the area containing coal after giving reasonable opportunity of being heard.

Procedure for coal block auction by competitive bidding notified



US power sector coal consumption to decline in 2012: EIA


InTERnATIOnAL

The Energy Information Administration (EIA) of the US has estimated that US coal consumption for electricity generation fell by 4 percent to 40 million short tons

(million s.t) in 2011. The agency, which is an independent statistical organisation

within the US Department of Energy, further said that electric power sector coal consumption in the US is expected to decline by an additional 2 percent in 2012. This is so because generation from natural gas, nuclear and wind would register significant growth while electricity consumption would grow by less than 1 percent, going forward.

Electric power sector coal consumption would continue to decline in 2013 as increased output from other generation sources would help meet growing demand for electricity. The marginal drop in consumption and continued inventory withdrawal would lead to a decline in production as well.

On the price front, the agency said, delivered coal prices to the electric power sector have increased steadily over the last 10 years and this trend continued in 2011, with an average delivered coal price of $2.40 per MMBtu (5.8 percent increase from 2010). Looking forward, several factors are exerting downward pressure on the average delivered coal price, including lower demand for coal to generate electricity due to lower natural gas prices and concerns about the effects of the implementation of pending environmental requirements. EIA forecasts the average delivered coal price to be slightly lower than the 2011 level in 2012 and 2013.

Electricity demandThe agency expects that the total US consumption of electricity will rise slightly during 2012 and grow by 1.8 percent during

2013. Much of the growth in consumption during 2012 will come from the commercial and industrial sectors. In contrast, moderate weather this year leads to reduced consumption in the residential sector. Temperature during January was much warmer than normal, particularly in the Southeast, where a large proportion of homes heat with electricity.

This lower winter consumption of electricity combined with projected lower summer temperatures is expected to push electricity sales to the residential sector down 1.2 percent in 2012. However, the total number of US households is expected to grow 1.3 percent during 2013, which would be the highest growth rate since 1998. The increased number of households is projected to lead to a relatively strong 2.1 percent increase in residential electricity consumption in 2013.

Source: EIA

US coal production(million short tons)

A mountain top mine in West Virginia


InTERnATIOnAL

Oil consumptionIn 2011, total US liquid fuels consumption fell by 340,000 bbl/d (1.8 percent) from 2010. Motor gasoline consumption accounted for much of that decline, shrinking by 250,000 bbl/d (2.8 percent). In contrast, distillate fuel oil consumption rose by 60,000 bbl/d (1.5 percent), brought about by recovery in industrial output and freight transport.

Despite the prospects for continued economic recovery and projections of slight increases in petroleum product prices, the next two years are expected to see only small increases in total liquid fuels consumption, with growth of about 30,000 bbl/d (0.1 percent) in 2012 and 90,000 bbl/d (0.5 percent) in 2013.

Motor gasoline consumption, constrained by slowing driving age population growth and the improving fuel economy of new vehicles, is forecast to fall slightly in both 2012 and 2013. Distillate fuel consumption, however, would continue to rise by an annual average of 60,000 bbl/d through 2013.

TradeOn the export front, the agency said that US coal export of 107 million s.t in 2011 was the highest since 1991. In anticipation of continued strong exports, several North American ports have announced plans to expand facilities to export coal. Facilities have been upgraded in the Hampton Roads, VA area, and

significant terminal upgrades to Gulf Coast coal handling facilities are currently underway.

Canada’s Pacific coal terminals are undergoing expansion to meet Asian demand for coal and to help facilitate increasing exports from the US Western Region. Several potential sites for new coal export facilities have been identified in the Pacific Northwest (Oregon and Washington), but no final decisions have been made.

Source: EIA

US coal consumption(million short tons)


InTERnATIOnAL

India’s trade relationship with Australia is set to hit a new milestone as the bilateral trade between the two countries is expected to reach `200,000 crore (A$40 billion) in the

next three years, according to a recent report by Grayson Perry, Australian trade and investment commissioner.

Indian investment in Australia has already reached an estimated `50,000 crore (A$10 billion) due to the country’s abundance of natural resources, economic and political stability as well as the world class infrastructural facilities available in the country. This has led to major Indian investments in Australia in coal, gas, minerals, agricultural production and processing sectors to support India’s need for energy and food security, Perry said while addressing a seminar organised by the Australian Trade Commission in collaboration with Gujarat NRE Coke Limited.

Taking a step forward, further investment particularly in the mining sector is expected in the coming days as the country boasts of a huge reserve of coking coal which will be able to meet the requirement of the Indian steelmakers to a large extent.

Speaking at the seminar, Arun Kumar Jagatramka, Chairman and Managing Director of Gujarat NRE Coke Limited said, “We are the only Indian company to own and operate hard coking coal mines in Australia. Our hard coking coal production is being increased from 2 million tons per annum (mtpa) to 6 mtpa by 2015, making us one of the top ten hard coking coal producers in the world.”

“The coking coal assets in Australia provide us with the security of supply of the raw material for the met coke plants in India,” he added.

In fact, assessing the opportunities and advantages of holding coking coal mines in Australia, many other Indian

firms including GVK Power, GMR Infrastructure, JSW Steel and Essel Mining of the Aditya Birla group are also coming forward to own such assets there.

Companies which are already negotiating deals for strategic equity in coking coal mines in Australia include state-owned Steel Authority of India Limited (SAIL) JSW Steel, Adani group etc., as per the report.

Indian companies, particularly steel manufacturers, have been looking to shore up supplies of coking coal to meet their current needs and obtain future reserves that would be essential to feed steel capacities that have been planned for the near future. Moreover, the demand for coking coal is expected to increase further as new capacities are being commissioned, according to an analysis by Coal Insights.

India, Australia’s fourth largest trading partner, is all geared up to tap the immense business opportunities that exist in the latter and hence has embarked upon a number of initiatives to enhance its business activities in Australia, Perry said.

“On the other hand, eastern India is also a significant business destination for Australian companies. Sectors of potential Australian involvement in Eastern India include across mining, education based learning and skill development, food and beverage, agribusiness, infrastructure, clean energy solutions for energy generation as well as other areas,” he added.

Hence, the two-way trade between the two countries which has already reached ` 110,000 crore (A$22 billion) in 2010-11 and is showing a steady growth till now, is likely to take an exponential jump in the days to come as more and more business houses are ready to invest. The buoyant India-Australia bilateral trade in turn is likely to act as the key driver in the Australia-India relationship as well.

India-Australia trade to reach` 2,000 billion by 2015

Sanjukta Ganguly

For Classified Advertisementscontact

Sumit Jalan, +91 91633 48243or [email protected]


LOGIsTICs

Indian Railway’s revenue earnings from commodity wise freight traffic moved up by 9.70 percent to `55,382.80 crore during the first 10 months (April-January) of 2011-12 from

`50,487.91 crore during the corresponding period of 2010-11, according to information available with Coal Insights.

The commodity-wise freight traffic volume during the period increased by 4.76 percent to 791.84 million tons (mt), compared to 755.86 mt during the corresponding period last year. The Net Tonne Kilo Metres (NTKM) went up from 498,014 million during April 2010 to January 2011 to 524,186 million during April 2011 to January 2012, showing an increase of 5.26 percent.

The data revealed that the Railways’ revenue earnings in January 2012 was `6,173.57 crore while freight traffic volume stood at 87.03 mt and NTKM at 57218 million. The Railways earned `2,583.54 crore from transportation of 41.35 mt of coal in January 2012, marginally higher than ̀ 2,548.54 crore earned from transportation of 41.01 mt coal in December 2011.

However, earnings from transportation of iron ore for exports, steel plants and other domestic users fell to `481.60 crore (8.25 mt) in January 2012 from `543.64 crore (8.94 mt) in December 2011. Earnings from transportation of cement increased to ̀ 615.32 crore (9.92 mt) in January 2012 from ̀ 562.73 crore (9.37 mt) in December 2011, while that from foodgrains was up to `434.18 crore (4.24 mt) from `403.71 crore (3.94 mt).

According to the data, earnings from transportation of petroleum oil and lubricant (POL) in January 2012 fell to ̀ 322.21 crore (3.46 mt) from `328.89 crore (3.52 mt) in December 2012. Earnings from transportation of pig iron and finished steel from steel plants and other points increased to ̀ 403.34 crore (3.23 mt) in January 2012 from `369.32 crore (3.10 mt).

Revenues earned from transportation of fertilizers fell to `462.01 crore (5.32 mt) in January 2012 from ̀ 484.77 crore (5.61 mt) in December, while earnings from transportation of raw material for steel plants, except iron ore, by container service increased to `312.78 crore (3.45 mt) from `100.41 crore (1.12

mt). Earnings from other goods remained flat at `458.62 crore (6.60 mt) in January 2012, compared with `456.80 crore (6.74 mt) in December 2011.

Volume of freight and earnings by the Railways in January 2012 vs January 2011

CommodityQuantity (in mt) Earning (in rs

crore)Jan'11 Jan'12 Jan'11 Jan'12

Coal i)forsteelplants 4.02 3.92 167.38 179.91ii)forwasheries 0.17 0.12 2.4 0.96iii)forthermalpowerhouses 25.44 28.11 1527.13 1809.14iv)forpublicuse 8.38 9.2 498.09 593.53v) Total 38.01 41.35 2195 2583.54Rawmaterialforsteelplantsexceptironore 1.31 1.21 100.87 99.97Pigironandfinishedsteel-i)fromsteelplants 2.38 2.49 284.61 342.66ii)fromotherpoints 0.67 0.74 61.21 60.68iii) Total 3.05 3.23 345.82 403.34Iron ore - i)forexport 1.92 0.32 400.81 90.2ii)forsteelplants 3.97 4.94 118.98 181.21iii)forotherdomesticusers 4.21 2.99 234.3 210.19iv) Total 10.1 8.25 754.09 481.6Cement 8.77 9.92 529.82 615.32Foodgrains 4.03 4.24 400.5 434.18Fertilizers 4.21 5.32 343.33 462.01Mineral Oil (POL) 3.48 3.46 303.85 322.21Container Service - i) Domestic containers 0.9 0.8 85.09 80.91ii) EXIM containers 2.39 2.65 207.45 231.87iii) Total 3.29 3.45 292.54 312.78Balance other goods 6.3 6.6 432.54 458.62Totalrevenueearningtraffic. 82.55 87.03 5698.36 6173.57

Indian Railways Apr-Jan commodity freight revenue up 9.7%



LOGIsTICs

Coal India Ltd (CIL) has proposed to invest a total of around `5,000 to `6,000 crore on a number of railway projects in its mining areas in Jharkhand and Chhattisgarh for

smooth evacuation of coal from its mines and transportation to consumers, the company’s director (finance) A.K. Sinha said. As part of this initiative, CIL has identified projects in MaanRaigadh coalfields in Chhattisgarh and North Karanpura coalfields in Jharkhand where it will set up rail tracks, he said. He said that around `1,600 crore will be spent only for SECL’s MaanRaigadh field, adding that the company plans to lay a 130 km rail line between Barood and Anuppur and another 91 km between Bhoopdevpur to Barood in North Karanpura.

In addition, there are two to three projects like Karanpura-Hazaribagh, Angul- Kalinganagar, Jharsuguda-Sardega and Macluskygunge-Piparwar line of 31 km for doubling of track. The Angul-Kalinganagar rail track will help evacuate coal from Talcher coalfields while Jharsuguda-Sardega line will be in Ib Valley. CIL has already proposed investment of `350 crore for Barood and Anuppur section that will connect to Katni line and `1,200 crore for Bhoopdevpur to Barood section which will connect to Howrah-Mumbai line for which they are carrying out survey for laying down the rail line, Sinha said.

He said the Railways had been trying to get forestry clearances for the last three-four years for Tori-Shivpur line in North Karanpur and they have got the forest clearance recently. Around 100 million tons (mt) of coal can be evacuated from this line, he added.

“We have potential in these two coalfields, but the main problem that we are facing is in evacuation of coal and we are also facing some problem in Relief and Rehabilitation (R&R). We are carrying out some exercises to solve both these problems and once that is done, we will be able to produce more coal,” Sinha said.

He said the Prime Ministers’ Office has recently directed them that if the company is not able to spend their planned investment amount on new projects due to delays in getting clearances, then it can invest on infrastructure projects in and around coalfields so that infrastructure could be made ready.

CIL’s interim chairperson and additional secretary (coal) Zohra Chatterji said this is a very important development which is going to help production and transportation of coal.

“These projects are being monitored intensively by the coal ministry. On February 29, the coal secretary will hold a meeting and these will all work as an important link for increased coal production,” Chatterji said.

Sinha said he had meetings with Secretary of Chhattisgarh and Jharkhand and they have agreed to work on the project

“Both MaanRaigadh and North Karanpura coalfields have huge potential, but they are far away from railways sidings or main corridor of the railways. So we proposed that we are ready to invest in that. The railway ministry has called other

senior officials of other PSUs like SAIL who are operating in these areas. We have agreed to form a special purpose vehicle to that the corridors can be utilized by everybody,” he said.

Sinha feels that the plans for developing the corridors could be formulated in the next one or two months. “We have already carried out a survey in the MaanRaigadh area, for the proposed railway line and that has already been placed to the Railway Board. Once we get the approval from the Railway Board, we will give the award to RITES for development of the corridor,” he said. Asked who will have majority stake in the proposed railway corridors, Sinha said all the PSUs (SAIL, RINL, CIL, Indian Railways) and other private sector steel companies operating in those areas will sit together and decide on the quantum of investment and the shares or stakes will be decided as per the discussions at the meetings.

“We may sit again in Chhattisgarh in March to take the matter forward. Even if the matter is finalised fast, it will take a couple of years to lay the railway line because there are issues like acquisition of land and forestry clearances,” Sinha added.

Sinha said CIL has already chalked out investment plans, after discussion with PMO, of whatever surplus fund it has. “We have some plans for investment, particularly in the infrastructure area because the government of India envisaged for the Eleventh and Twelfth Plans a growth of 9.5 percent. “To achieve this kind of growth, we have to invest on railways, ports and other infrastructure. We also need electricity to achieve this kind of growth for which we need coal,” he added.

Capex plans Dwelling on the subject of capital expenditure for 2012-13, Sinha said the company has plans to invest ̀ 4,275 crore during the year on business as usual scenario, but it may increase. “In 2012-13, we will do some aggressive investment of about `4275 crore, particularly in different projects so that production picks up,” Sinha said. The capex will be primarily on plant and machinery, HEMM, land acquisition and land development, he said.

Sinha said the company on an average spends at least 6-8 percent of its total expenditure on land and that will go up as land value in different states goes up. Around 66 percent of expenditure will be on HEMM and plant and machinery and that will also go up because they are now purchasing high capacity equipment like 240-ton dumpers, he added.

For 2011-12, the capex plan was around `4220 crore and it has already spent around `2,500 crore till December 2011 and perhaps in the next three months, it will be able to spend around `1,700 crore to achieve the target, he said. The company has cash reserve of `55,000 crore as on December 31, 2011, Sinha said. He said CIL has planned to invest a total of around `25,000 crore during the five years of the Twelfth Plan (2012-13 to 2016-17) besides a separate provision for foreign acquisitions.

CIL to invest `6,000 cr on rail infrastructureCoal Insights Bureau


LOGIsTICs

Port traffic down 0.24% in Apr-JanCoal Insights Bureau

The 12 major Indian ports have handled 467.098 million tons (mt) of traffic during the April-January period of the current financial year, 0.24 percent lower than 468.199

mt recorded during the corresponding period last year.According to data released by the Indian Ports Association

(IPA), the movement of thermal coal through the major ports was up 14.42 percent to 41.178 mt during April 2011-January 2012, compared to 35.988 mt achieved during the same period last year.

The volume of coking coal, however, fell marginally by 1.29 percent to 23.978 mt during the same period, the data showed. Among the major ports, Paradip port had the distinction of handling the highest quantum of thermal coal of around 13.283 mt during the period. Visakhapatnam port, on the other hand, shipped the highest quantity of 5.836 mt of coking coal during the period.

Movement of coking coal through Paradip, Kolkata, Chennai and Kandla ports declined during the period when compared to the corresponding period last year.

Movement of iron ore through the major ports showed a significant drop of 25 percent during the period under review. The major ports together handled 52.147 mt of iron ore during the April-January period compared to 69.525 mt in

the corresponding period last year. Mormugao port handled the highest volume of 24.219 mt of iron ore during the April-January period of the current fiscal. This volume, however, was about 6.895 mt less than the iron ore traffic moved during the same period last fiscal. The port has shown a negative growth of 17.53 percent during the period.

Movement of container traffic both in terms of tonnage and TEUs showed an increase during the April-January period. The major ports handled 100.597 mt, besides 6.530 million TEUs during the period under review compared to 93.128 mt of tonnage and 6.256 mt of TEUs respectively.

Six major ports showed positive growth in traffic handling during the April-January period of the current fiscal, while the remaining six showed negative growth on a year-on-year basis.

In terms of growth, Ennore port topped the list with a record 43.94 percent increase in cargo throughput. New Mangalore port’s growth was lowest at about 3.44 percent during the period. In terms of traffic volume, Kandla port clinched the top rank with a cargo volume of over 68.563 mt recorded for the period.

The Mormugao port registered the highest decline of 17.53 percent in traffic handling during the period.


Source: Central Electricity Authority

List of critical thermal power stations having critical coal stock ofless than 7 days (as on 31-01-2012)

NORTHERN1 Badarpur DuetolessreceiptofcoalfromCCLduringthemonthofJanuary,20122 Indira Gandhi DuetolessreceiptofcoalduringthemonthofJanuary,20123 Kota TPS DuetoinadequateavailabilityofcoalatChabbraTPSrakeswerediverted.4 Suratgarh DuetoinadequateavailabilityofcoalatChabbraTPSrakeswerediverted.5 Anpara TPS Due to higher generation6 Harduaganj TPS DuetolessreceiptofcoalduringthemonthofJanuary,20127 Panipat Duetoinadequateavailabilityofcoal8 Chabbra Duetoinadequateavailabilityofcoal9 Dadri (NCTPP) DuetolessreceiptfromCCLduringthemonthofJanuary,201210 Rihand STPS Duetoinadequateavailabilityofcoal11 Tanda Due to higher generation12 Unchahar Due to less import13 Anpara C DuetoinadequateavailabilityofcoalWESTERN14 Koradi DuetolessreceiptofcoalduringthemonthofJanuary,201215 Bhusawal TPS DuetolessreceiptofcoalduringthemonthofJanuary,201216 Sikka DuetolessreceiptofcoalduringthemonthofJanuary,201217 Sanjay Gandhi Due to higher generation18 Parli TPS DuetolessreceiptfromSCCLandMCLduringthemonthofJanuary,2012SOUTHERN19 Dr. N. Tata Rao Due to higher generation20 Tuticorin DuetolessreceiptofcoalfromMCLduringthemonthofJanuary,201221 Rayalaseema DuetolessreceiptfromSCCL/MCLduringthemonthofJanuary,201222 Simhadri Due to higher generation23 Ramagundem STPS Due to higher generation24 Raichur DuetolessreceiptfromWCL/MCLduringthemonthofJanuary,201225 Bellary DuetolessreceiptofcoalfromcaptiveblockduringthemonthofJanuary,2012EASTERN26 MuzaffarpurTPS CoalsupplyregulatedasBihardeclinedtotakeitselectricityduetofinancialviability.27 Kahalgaon DuetoinadequatecoalavailabilityinlinkedmineECL(Rajmahal)andinabilityofrailwaystosupplymoreimportedrakesduetochangeintracks.28 Bokaro-B Due to higher generation29 Talcher STPS DuetolessreceiptofcoalduringthemonthofJanuary,201230 Durgapur steel TPS Coal supply yet to start by CIL31 Kodarma TPS Coal supply yet to start by CIL32 Bandel Duetohugeoutstandingduescoalsupplyaffected.33 Sterlite TPP Duetolessavailabilityofcoal34 Kolaghat Duetohugeoutstandingduescoalsupplyaffected.35 Bakreswar TPS Duetohugeoutstandingduescoalsupplyaffected.36 Sagardighi Due to higher generation37 Santaldih Duetohugeoutstandingduescoalsupplyaffected.38 Farakka Due to inadequate coal availability in linked mine ECL (Rajmahal)39 Mejia DuetoHigherTurnaroundtimeofrakesbetweenRaniganjandthepowerstationandnoimport

POWER sECTOR uPDATE


Provisional based on actual-cum-assessment

ALL INDIA ENERGY GENERATION,

THERMAL 123416.92 712234.00 63966.00 63175.41 61149.91 98.76 103.31 588382.00 580793.95 546010.15 98.72 106.37 70.04 76.38 80.17 68.39 72.17 73.59

NUCLEAR 4780.00 25130.00 2126.00 2903.94 2806.51 136.59 103.47 21077.00 26715.20 20660.52 126.75 129.31 61.06 81.66 81.72 61.32 76.10 61.59

HYDRO 38748.40 112050.00 7192.66 7186.66 7573.30 99.96 94.93 97547.82 114734.45 97742.64 117.62 117.38

BHUTAN IMP 0.00 5586.00 93.00 126.32 125.01 135.83 101.05 5454.00 5182.90 5485.10 95.03 94.49

TOTAL 166945.32 855000.00 73377.66 73395.36 71654.73 100.02 102.43 712406.82 727426.50 669898.41 102.11 108.59

NORTHERN REGION

THERMAL 30733.26 173757.00 15723.00 16244.34 15504.26 103.32 107.77 143631.00 146761.77 135973.17 102.18 107.93 71.35 81.30 84.62 71.27 77.15 77.57

NUCLEAR 1620.00 8760.00 782.00 999.09 981.14 127.76 101.83 7351.00 8998.44 7642.71 122.41 117.74 69.15 82.89 81.40 65.85 75.63 64.24

HYDRO 14978.25 53474.07 2603.90 2932.16 2541.46 112.61 115.37 47491.80 57109.36 49300.18 120.25 115.84

TOTAL 47331.51 235991.07 19108.90 20175.59 19026.86 105.58 106.04 198473.80 212869.57 192916.06 107.25 110.34

WESTERN REGION

THERMAL 42554.31 246627.00 22307.00 21508.60 21750.19 96.42 98.89 203323.00 203918.99 193955.35 100.29 105.14 70.71 74.11 81.00 69.43 71.16 73.60

NUCLEAR 1840.00 9874.00 864.00 1269.91 1192.53 146.98 106.49 8250.00 11368.48 8288.40 137.80 137.16 63.11 92.77 87.11 61.05 84.13 61.34

HYDRO 7392.00 14644.91 1315.30 1170.99 1597.56 89.03 73.30 12372.04 17013.05 12311.37 137.51 138.19

TOTAL 51786.31 271145.91 24486.30 23949.50 24540.28 97.81 97.59 223945.04 232300.52 214555.12 103.73 108.27

SOUTHERN REGION

THERMAL 24780.80 156395.00 14207.00 14080.88 13649.10 99.11 103.19 128898.00 129353.17 119700.72 100.35 108.06 77.62 87.68 88.09 72.27 80.26 78.12

NUCLEAR 1320.00 6496.00 480.00 634.94 632.84 132.28 100.33 5476.00 6348.28 4729.41 115.93 134.23 48.88 64.65 73.15 56.49 65.49 58.12

HYDRO 11372.45 30493.04 2510.22 2590.50 2617.25 103.20 98.98 25696.57 28174.88 24659.39 109.64 114.26

TOTAL 37473.25 193384.04 17197.22 17306.32 16899.19 100.63 102.41 160070.57 163876.33 149089.52 102.38 109.92

EASTERN REGION

THERMAL 24490.05 131047.00 11356.00 10913.53 9817.97 96.13 111.19 108820.00 97000.99 92763.68 89.14 104.57 61.79 65.59 67.57 62.44 61.78 65.74

HYDRO 3847.70 9305.99 540.83 361.91 623.31 66.92 58.06 8243.13 8868.07 7881.48 107.58 112.52

TOTAL 28337.75 140352.99 11896.83 11278.44 10441.28 94.80 108.02 117063.13 105869.06 100645.16 90.44 105.19

NORTH EASTERN REGION

THERMAL 858.50 4408.00 373.00 425.32 428.39 114.03 99.28 3656.00 3759.29 3617.23 102.83 103.93 0.00 0.00 0.00 0.00 0.00 0.00

HYDRO 1158.00 4131.99 222.41 134.25 193.72 60.36 69.30 3711.28 3569.21 3590.22 95.32 99.41

TOTAL 2016.50 8539.99 595.41 559.57 622.11 93.98 89.95 7400.28 7328.50 7207.45 99.03 101.68

Category / Regions

MONITORED CAPACITY

(MW)

GENERATION (GWH) PLANT LOAD FACTOR %

TARGETApril 2011 to March 2012

JANUARY 2012 APRIL 2011 – JANUARY 2012 JANUARY 2012 APRIL 2011 - JANUARY 2012

PROGRAMME ACTUAL*ACTUAL SAME

MONTH (2010-11) % OF

PROGRAMME% OF LAST

YEARPROGRAMME ACTUAL

ACTUAL SAME PERIOD (2010-11)

% OF PROGRAMME

% OF LAST YEAR


MONTH (2010-11) PROGRAMME ACTUAL*


POWER sECTOR uPDATE



POWER sECTOR uPDATE

PROGRAMME AND PLANT LOAD FACTOR

THERMAL 123416.92 712234.00 63966.00 63175.41 61149.91 98.76 103.31 588382.00 580793.95 546010.15 98.72 106.37 70.04 76.38 80.17 68.39 72.17 73.59

NUCLEAR 4780.00 25130.00 2126.00 2903.94 2806.51 136.59 103.47 21077.00 26715.20 20660.52 126.75 129.31 61.06 81.66 81.72 61.32 76.10 61.59

HYDRO 38748.40 112050.00 7192.66 7186.66 7573.30 99.96 94.93 97547.82 114734.45 97742.64 117.62 117.38

BHUTAN IMP 0.00 5586.00 93.00 126.32 125.01 135.83 101.05 5454.00 5182.90 5485.10 95.03 94.49

TOTAL 166945.32 855000.00 73377.66 73395.36 71654.73 100.02 102.43 712406.82 727426.50 669898.41 102.11 108.59

NORTHERN REGION

THERMAL 30733.26 173757.00 15723.00 16244.34 15504.26 103.32 107.77 143631.00 146761.77 135973.17 102.18 107.93 71.35 81.30 84.62 71.27 77.15 77.57

NUCLEAR 1620.00 8760.00 782.00 999.09 981.14 127.76 101.83 7351.00 8998.44 7642.71 122.41 117.74 69.15 82.89 81.40 65.85 75.63 64.24

HYDRO 14978.25 53474.07 2603.90 2932.16 2541.46 112.61 115.37 47491.80 57109.36 49300.18 120.25 115.84

TOTAL 47331.51 235991.07 19108.90 20175.59 19026.86 105.58 106.04 198473.80 212869.57 192916.06 107.25 110.34

WESTERN REGION

THERMAL 42554.31 246627.00 22307.00 21508.60 21750.19 96.42 98.89 203323.00 203918.99 193955.35 100.29 105.14 70.71 74.11 81.00 69.43 71.16 73.60

NUCLEAR 1840.00 9874.00 864.00 1269.91 1192.53 146.98 106.49 8250.00 11368.48 8288.40 137.80 137.16 63.11 92.77 87.11 61.05 84.13 61.34

HYDRO 7392.00 14644.91 1315.30 1170.99 1597.56 89.03 73.30 12372.04 17013.05 12311.37 137.51 138.19

TOTAL 51786.31 271145.91 24486.30 23949.50 24540.28 97.81 97.59 223945.04 232300.52 214555.12 103.73 108.27

SOUTHERN REGION

THERMAL 24780.80 156395.00 14207.00 14080.88 13649.10 99.11 103.19 128898.00 129353.17 119700.72 100.35 108.06 77.62 87.68 88.09 72.27 80.26 78.12

NUCLEAR 1320.00 6496.00 480.00 634.94 632.84 132.28 100.33 5476.00 6348.28 4729.41 115.93 134.23 48.88 64.65 73.15 56.49 65.49 58.12

HYDRO 11372.45 30493.04 2510.22 2590.50 2617.25 103.20 98.98 25696.57 28174.88 24659.39 109.64 114.26

TOTAL 37473.25 193384.04 17197.22 17306.32 16899.19 100.63 102.41 160070.57 163876.33 149089.52 102.38 109.92

EASTERN REGION

THERMAL 24490.05 131047.00 11356.00 10913.53 9817.97 96.13 111.19 108820.00 97000.99 92763.68 89.14 104.57 61.79 65.59 67.57 62.44 61.78 65.74

HYDRO 3847.70 9305.99 540.83 361.91 623.31 66.92 58.06 8243.13 8868.07 7881.48 107.58 112.52

TOTAL 28337.75 140352.99 11896.83 11278.44 10441.28 94.80 108.02 117063.13 105869.06 100645.16 90.44 105.19

NORTH EASTERN REGION

THERMAL 858.50 4408.00 373.00 425.32 428.39 114.03 99.28 3656.00 3759.29 3617.23 102.83 103.93 0.00 0.00 0.00 0.00 0.00 0.00

HYDRO 1158.00 4131.99 222.41 134.25 193.72 60.36 69.30 3711.28 3569.21 3590.22 95.32 99.41

TOTAL 2016.50 8539.99 595.41 559.57 622.11 93.98 89.95 7400.28 7328.50 7207.45 99.03 101.68

Category / Regions

MONITORED CAPACITY

(MW)

GENERATION (GWH) PLANT LOAD FACTOR %

TARGETApril 2011 to March 2012

JANUARY 2012 APRIL 2011 – JANUARY 2012 JANUARY 2012 APRIL 2011 - JANUARY 2012


MONTH (2010-11) % OF

PROGRAMME% OF LAST

YEARPROGRAMME ACTUAL


% OF PROGRAMME

% OF LAST YEAR


MONTH (2010-11) PROGRAMME ACTUAL*



POWER sECTOR uPDATE

Sector-wise PLF(%) programmeand achievements (thermal)

SECtorJanuary 2012 April 2011 - January 2012

proG. (%) ACH. (%)* proG. (%) ACH. (%)*

Central Sector 77.27 86.39 73.59 80.82

State Sector 67.70 72.82 64.93 66.73

Pvt. UTL Sector 61.26 63.15 75.34 76.58

All India 70.04 76.38 68.39 72.17

* Provisional based on actual-cum Assessment

List of utility/organisation whose PLF achievement were lower than the respective

programme during January 2012

Name of power StationpLF in %

programme Achievement Shortfall

I. CENtrAL

KOBRA STPS 87.73 62.29 25.44

KAHALGAON TPS 87.14 72.87 14.27

RIHAND STPS 95.43 93.16 2.27

TALCHER STPS 96.24 88.01 8.23

UNCHAHAR TPS 95.62 94.85 0.77

BARSINGSAR LIGNITE 60.22 51.73 8.49

II. StAtE

GMDCL 75.27 28.50 46.77

TNGDCL 81.51 75.23 6.28

JSEB 27.06 5.18 21.88

BSEB 21.68 6.49 15.19



All India PLF (%) during January 2012


Capacity Addition & Generation during Jan 2012

DescriptionJanuary 2012 January 2012

target Achivement target AchivementCAPACITYADDITION(MW)THERMAL 2185.00 795.00 2932.50 260.00HYDRO 60.00 100.00 66.00 0.00NUCLEAR 0.00 0.00 0.00 220.00TOTAL 2245.00 895.00 2998.50 480.00GENERATION (MU)THERMAL 63966.00 63175.41 62959.77 61149.91NUCLEAR 2129.00 2903.94 2006.00 2806.51HYDRO 7192.66 7190.33 7262.62 7573.30BHUTAN IMPORT 93.00 126.32 173.17 125.01TOTAL 73377.66 73396.00 72401.56 71654.7.

Note: Generation (MU) achieved in December 2011 is provisional.

Target/Achievement in capacity addition (MW) during January 2012


Achievement in generation (MU)during January 2012


POWER sECTOR uPDATE

Capacity Addition for December 2011 and April 2011 - January 2012 (MW)

Schemes Status ofSchemes

target2011-12

January 2012 April 2011 - January 2012 Deviationtarget Achievement target Achievement (+) / (-)

Thermal

Central 3570.00 500.00 0.00 3570.00 2820.00 -750.00State 4101.00 500.00 0.00 3851.00 1500.00 -2351.00Pvt. 6965.00 1185.00 795.00 6965.00 6759.50 -205.50Total 14636.00 2185.00 795.00 14386.00 11079.50 -3306.50

Hydro


NuclearCentral 1000.00 0.00 0.00 0.00 0.00 0.00Total 1000.00 0.00 0.00 0.00 0.00 0.00

All India



Capacity addition target & achievement (MW) April 2011 - January 2012

Source: Central Electricity Authority Source: Central Electricity Authority

All India energy generation duringApril 2011 - January 2012

Programme and Achievememt of Energy Generation (MU)Gen. Sch. target

20011-2012January 2012 April 2011 - January 2012

Sector-wise programme Achievement* % Ach. programme Achievement* % Ach.ThermalCentral Sector 279561.00 25398.00 25162.26 99.07 231316.00 230304.75 99.56State Sector 297818.00 26645.00 27189.11 102.04 245605.00 243729.07 99.24Pvt.IPP Sector 108835.00 10105.00 8968.51 88.75 89756.00 84884.44 94.57Pvt.UTL Sector 26020.00 1818.00 1855.53 102.06 21651.00 21875.69 101.04Total 712234.00 63966.00 63175.41 98.76 588328.00 580793.95 98.72HydroCentral Sector 42779.02 2229.56 2191.04 98.27 37866.58 45404.89 119.91State Sector 61941.98 4496.14 4630.09 102.98 53277.39 61283.09 115.03Pvt.IPP Sector 5764.00 310.19 221.93 71.55 5077.90 6638.61 130.74Pvt.UTL Sector 1565.00 156.77 147.27 93.94 1325.95 1408.93 106.26Total 112050.00 7192.66 7190.33 99.97 97547.82 114735.52 117.62NuclearCentral Sector 25130.00 2126.00 2903.94 136.59 21077.00 26715.20 126.75Total 25130.00 2126.00 2903.94 136.59 21077.00 26715.20 126.75Bhutan Import 5586.00 93.00 126.32 135.83 5454.00 5182.90 95.03All IndiaCentral Sector 347470.02 29753.56 30257.24 101.69 290259.58 302424.84 104.19State Sector 359759.98 31141.14 31819.20 102.18 298882.39 305012.16 102.05Pvt. Sector 142184.00 12389.96 11193.24 90.34 117810.85 114807.67 97.45Total 855000.00 73377.66 73396.00 100.02 712406.82 727427.57 102.11

* Provisional based on actual-cum-Assesment Source: Central Electricity Authority


POWER sECTOR uPDATE

Power Supply Position (Provisional) (Figures in net MU)

State/System/region

January 2012 April 2011 - January 2012requirement Availability Surplus/Deficit (-) requirement Availability Surplus/Deficit (-)

(Mu) (Mu) (Mu) (%) (Mu) (Mu) (Mu) (%)Chandigarh 112 112 0 0.0 1,356 1,352 -4 -0.3Delhi 1,924 1,917 -7 -0.4 23,299 23,227 -72 -0.3Haryana 2,936 2,845 -91 -3.1 31,211 29,903 -1,308 -4.2Himachal Pradesh 719 753 34 4.7 6,785 6,734 -51 -0.8Jammu & Kashmir 1,365 1,024 -341 -25.0 11,645 8,936 -2,709 -23.3Punjab 2,829 2,756 -73 -2.6 38,926 37,677 -1,249 -3.2Rajasthan 5,003 4,776 -227 -4.5 41,761 40,064 -1,697 -4.1Uttar Pradesh 6,965 6,032 -933 -13.4 67,550 59,943 -7,607 -11.3Uttarakhand 947 945 -2 -0.2 8,740 8,506 -234 -2.7Northern Region 22,800 21,160 -1,640 -7.2 231,273 216,342 -14,931 -6.5Chattisgarh 1,204 1,178 -26 -2.2 12,224 11,864 -360 -2.9Gujarat 6,350 6,333 -17 -0.3 62,269 62,038 -231 -0.4Madhya Pradesh 5,372 4,480 -892 -16.6 41,052 34,586 -6,466 -15.8Maharashtra 13,529 11,234 -2,295 -17.0 118,415 98,265 -20,150 -17.0Daman & Diu 210 191 -19 -9.0 1,846 1,657 -189 -10.2Dadar Nagar Haveli 461 460 -1 -0.2 3,791 3,760 -31 -0.8Goa 280 271 -9 -3.2 2,569 2,534 -35 -1.4Western Region 27,406 24,147 -3,259 -11.9 242,166 214,704 -27,462 -11.3Andhra Pradesh 7,486 7,205 -281 -3.8 74,178 69,614 -4,564 -6.2Karnataka 5,744 4,987 -757 -13.2 48,762 43,615 -5,147 -10.6Kerala 1,713 1,663 -50 -2.9 16,254 15,919 -335 -2.1Tamil Nadu 6,818 5,876 -942 -13.8 70,469 65,070 -5,399 -7.7Puducherry 143 141 -2 -1.4 1,796 1,769 -27 -1.5Lakshadweep # 3 3 0 0 31 31 0 0Southern Region 21,904 19,872 -2,032 -9.3 211,459 195,987 -15,472 -7.3Bihar 1,286 982 -304 -23.6 11,889 9,263 -2,626 -22.1DVC 1,463 1,384 -79 -5.4 13,530 13,005 -525 -3.9Jharkhand 490 473 -17 -3.5 5,065 4,938 -127 -2.5Orissa 1,903 1,819 -84 -4.4 18,981 18,778 -203 -1.1West Bengal 2,880 2,815 -65 -2.3 32,094 31,710 -384 -1.2Sikkim 24 24 0 0.0 300 296 -4 -1.3Andaman- Nicobar# 21 21 0 0 202 162 -40 -20Eastern Region 8,046 7,497 -549 -6.8 81,859 77,990 -3,869 -4.7Arunachal Pradesh 53 49 -4 -7.5 500 458 -42 -8.4Assam 496 474 -22 -4.4 5,133 4,854 -279 -5.4Manipur 40 36 -4 -10.0 477 436 -41 -8.6Meghalaya 162 118 -44 -27.2 1,609 1,225 -384 -23.9Mizoram 35 32 -3 -8.6 331 296 -35 -10.6Nagaland 42 38 -4 -9.5 479 438 -41 -8.6Tripura 77 75 -2 -2.6 800 758 -42 -5.3N. Eastern Region 905 822 -83 -9.2 9,329 8,465 -864 -9.3All India 81,061 73,498 -7,563 -9.3 776,086 713,488 -62,598 -8.1

# Lakshadweep and A & N Islands stand-alone systems, power supply position of these, does not form part of regional requirement and availability.



POWER sECTOR uPDATE

Peak Demand/Peak Met (Provisional)(Figures in net MW)

State/System/region

January 2012 April’11 - January 2012peak Demand peak Met Surplus/Deficit (-) peak Demand peak Met Surplus/Deficit (-)

(Mu) (Mu) (Mu) (%) (Mu) (Mu) (Mu) (%)Chandigarh 112 112 0 0.0 1,356 1,352 -4 -0.3Delhi 1,924 1,917 -7 -0.4 23,299 23,227 -72 -0.3Haryana 2,936 2,845 -91 -3.1 31,211 29,903 -1,308 -4.2Himachal Pradesh 719 753 34 4.7 6,785 6,734 -51 -0.8Jammu & Kashmir 1,365 1,024 -341 -25.0 11,645 8,936 -2,709 -23.3Punjab 2,829 2,756 -73 -2.6 38,926 37,677 -1,249 -3.2Rajasthan 5,003 4,776 -227 -4.5 41,761 40,064 -1,697 -4.1Uttar Pradesh 6,965 6,032 -933 -13.4 67,550 59,943 -7,607 -11.3Uttarakhand 947 945 -2 -0.2 8,740 8,506 -234 -2.7Northern Region 22,800 21,160 -1,640 -7.2 231,273 216,342 -14,931 -6.5Chattisgarh 1,204 1,178 -26 -2.2 12,224 11,864 -360 -2.9Gujarat 6,350 6,333 -17 -0.3 62,269 62,038 -231 -0.4Madhya Pradesh 5,372 4,480 -892 -16.6 41,052 34,586 -6,466 -15.8Maharashtra 13,529 11,234 -2,295 -17.0 118,415 98,265 -20,150 -17.0Daman & Diu 210 191 -19 -9.0 1,846 1,657 -189 -10.2Dadar Nagar Haveli 461 460 -1 -0.2 3,791 3,760 -31 -0.8Goa 280 271 -9 -3.2 2,569 2,534 -35 -1.4Western Region 27,406 24,147 -3,259 -11.9 242,166 214,704 -27,462 -11.3Andhra Pradesh 7,486 7,205 -281 -3.8 74,178 69,614 -4,564 -6.2Karnataka 5,744 4,987 -757 -13.2 48,762 43,615 -5,147 -10.6Kerala 1,713 1,663 -50 -2.9 16,254 15,919 -335 -2.1Tamil Nadu 6,818 5,876 -942 -13.8 70,469 65,070 -5,399 -7.7Puducherry 143 141 -2 -1.4 1,796 1,769 -27 -1.5Lakshadweep # 3 3 0 0 31 31 0 0Southern Region 21,904 19,872 -2,032 -9.3 211,459 195,987 -15,472 -7.3Bihar 1,286 982 -304 -23.6 11,889 9,263 -2,626 -22.1DVC 1,463 1,384 -79 -5.4 13,530 13,005 -525 -3.9Jharkhand 490 473 -17 -3.5 5,065 4,938 -127 -2.5Orissa 1,903 1,819 -84 -4.4 18,981 18,778 -203 -1.1West Bengal 2,880 2,815 -65 -2.3 32,094 31,710 -384 -1.2Sikkim 24 24 0 0.0 300 296 -4 -1.3Andaman- Nicobar# 21 21 0 0 202 162 -40 -20Eastern Region 8,046 7,497 -549 -6.8 81,859 77,990 -3,869 -4.7Arunachal Pradesh 53 49 -4 -7.5 500 458 -42 -8.4Assam 496 474 -22 -4.4 5,133 4,854 -279 -5.4Manipur 40 36 -4 -10.0 477 436 -41 -8.6Meghalaya 162 118 -44 -27.2 1,609 1,225 -384 -23.9Mizoram 35 32 -3 -8.6 331 296 -35 -10.6Nagaland 42 38 -4 -9.5 479 438 -41 -8.6Tripura 77 75 -2 -2.6 800 758 -42 -5.3N. Eastern Region 905 822 -83 -9.2 9,329 8,465 -864 -9.3All India 81,061 73,498 -7,563 -9.3 776,086 713,488 -62,598 -8.1

# Lakshadweep and A & N Islands stand-alone systems, power supply position of these, does not form part of regional requirement and availability.



Power supply to agricultural sector during January 2012State/region Average hours of supply

Northern RegionChandigarh 24 hrs./day

–

Delhi N/AHaryana Three Phase Supply : average 10.40 hrs/dayHP 24 hrs./dayJ & K –Punjab Three phase supply: 4.94 hrs/dayRajasthan Three phase supply: 06.00 hrs/dayUttar Pradesh Three phase supply: average 10.03 hrs/dayUttarakhand 23.43 hrs./dayWestern RegionChattisgarh Three phase supply: 18 hrs/day –

Gujarat Only8hourspowersupplyinstaggeredforminrotationofdayandnightisgiventoAgriculture.Nosupplyduringrestof16hours.JyotigramYojana24hrs.

Madhya Pradesh Three phase supply: 13:10 hrs /day (average) Single phase supply: 00:00 hrs./Day (average)Maharashtra Three phase supply: 8 hrs/day (average) Single phase supply: 16 hrs/day (average)Goa No restrictionSouthern RegionAndhra Pradesh Three phase supply: 07 hrs/day. –Karnataka Three phase/single phase supply: 06 hrs/day No supply: 6-12 hrs/dayKerala No restrictionsTamil Nadu Three phase supply: 9 hrs/day Single phase supply: 15 hrs/dayPuducherry No restrictionsEastern RegionBihar About 18 hrs

–Jharkhand About 20 hrsOrissa 24 hrs.West Bengal Average about 23 hrs

* Data not furnished for current month.

Sub-Stations (Prog & Achiv) January 2012 Fig. in MVA/MW

VoltageLevel/Sector programme 2011-12

Jan 2012 Apr 2011-Jan 2012prog. Achv. prog. Achv.

+/- 500 kV HVDCCentral Sector 0 0 0 0 0State Sector 0 0 0 0 0TOTAL 0 0 0 0 0765 kVCentral Sector 3315 0 0 0 3000State Sector 1000 0 0 1000 0TOTAL 4315 0 0 1000 3000400 kVCentral Sector 2630 0 1945 2000 7225State Sector 5780 315 630 5235 4760JV/Private Sector 0 0 0 0 0TOTAL 8410 315 2575 7235 11985220 kVCentral Sector 940 0 0 840 180State Sector 13715 460 3335 9100 12090JV/Private Sector 0 0 0 0 127TOTAL 14655 460 3335 9940 12397GrAND totAL 27380 775 5910 18175 27382


Transmission lines (prog & achiv) January 2012Fig. in ckt Kms

VoltageLevel/Sector programme 2011-12 Jan 2012 Apr 2011-Jan 2012

prog. Achv. prog. Achv.+/- 800 kV HVDCCentral Sector 0 0 0 0 0State Sector 0 0 0 0 0TOTAL 0 0 0 0 0+/- 500 kV HVDCCentral Sector 0 0 0 0 0JV/Private Sector 0 0 0 0 0TOTAL 0 0 0 0 0765 kVCentral Sector 822 0 343 13 356State Sector 2 0 0 2 1TOTAL 824 0 343 15 357400 kVCentral Sector 6762 1538 1015 6007 6160State Sector 2626 280 64 2346 1333JV/Private Sector 3013 1566 0 3037 988TOTAL 12401 3384 1079 11390 8481220kVCentral Sector 575 46 30 575 155State Sector 5992 1140 165 5982 3617JV/Private Sector 0 0 0 0 2TOTAL 6567 1186 195 6557 3774GrAND totAL 19792 4570 1617 17962 12612


POWER sECTOR uPDATE


POWER sECTOR uPDATE

Power cuts on industries during January 2012

State/region Energy Cut Demand Cut

NORTHERN REGION

Chandigarh Nonotifiedpowercut

Delhi Nonotifiedpowercut

Haryana* 0.90 MU/day and 400MW ( Restriction timings :18:00 hrs to 20:15 hrs)

HP 2.00 MU / day on HT/LT industries 0MWcutfrom18:30hrsto21:30hrs.(peakhrs.)onHT/LTindustries.

J & KNoCuts on essentail loads likeHospitals,Defence,PHE(WaterSupplies),Irrigation etc. and on domestic,commercial andmixed load feeders that have 100%consumermetering;9Hrsand30minutesdomestic,commercialandmixedloadfeederswithpartialornoconsumermetering;3hoursto8hours,dependingonsystem peak load demands and system

Punjab* 1.8 MU/day on HT/LT industries 600MWcutonHT/LTindustriesfrom18:00to21:00hrs.

Rajasthan NoNotifiedPowerCut

Uttar Pradesh NoNotifiedPowerCut

Uttarakhand* 0.52MU/dayonHT/LTindustriesondifferentdays. 70MWcutonHT/LTindustriesfordifferenthoursondifferentdays.

WESTERN REGION

Chattisgarh Nil Nil

Gujarat Allindustriesareallowedtoruntheirunitsonalldaysofweekandiftheywanttoavailstaggeredholiday,thentheywillhavetostaggeronnotifieddayonlyandcannot avail as per their choice. All industries are required to keep their recess timings staggered.

Madhya Pradesh Nil Nil

Maharashtra Nil Nil

Goa Nil Nil

SOUTHERN REGION

Andhra Pradesh Onedaypowerholidaysinaweekalongwitheveningpeakrestrictions(0630pmto1030pm).(ExceptHyderabad)w.e.f.04.01.12.From1stto3rdJanuary2012.IndustriesinHyderabadalsoincluded.However,therewasloadsheddingofupto1120MW(209.0211MUforthemonth)

Karnataka OnedayPowerHolidaytoindustries(BangaloreCity);However,therewasloadsheddingupto2075MW(711.29MUforthemonth)

Kerala Nil;However,therewasloadsheddingupto250MW(33.04MUforthemonth)

Tamil Nadu 20%powercutforHTandCommercialconsumers.1hourLoadsheddingforChennai,2/3HoursforUrbanandRuralareas;However,therewasloadsheddingupto3071MW(875.903MUforthemonth).

Puducherry Nil;However,therewasloadsheddingupto0MW(0MUforthemonth)

EASTERN REGION

Bihar Nonotifiedcuts

Jharkhand Nonotifiedcuts

Orissa Nonotifiedcuts

West Bengal Nonotifiedcuts

Note: Although some states have reported “No Notified Power Cuts”, load shedding/restrictions are imposed on industries on day.

*Data not furnished for current month.


Generation capacity addition during 2011-12 (Programme & Achievement)

Sl. No. unit Name unit No. State Company type

Capacity (Mw) Commissioning Schedule

prog. Ach. As per prog. Actual (A)

1st QuArtEr (AprIL - JuNE 2011)

CENtrAL SECtor

1 Koderma # 1 Jharkhand DVC TH 500.00 500.00 June, 11 20.07.11 (A)

StAtE SECtor

2 Priyadarshini Jurala 6 AP APGENCO HY 39.00 39.00 June,11 09.06.11(A)

3 Myntdu 1 Meghalaya MeECL HY 42.00 42.00 June,11 23.11.11(A)

4 Khaperkheda TPS Expn # 5 Maharashtra MSPGCL TH 500.00 500.00 June,11 05.08.11(A)

5 Kothagudem TPP - VI 11 A.P. APGENCO TH 500.00 500.00 June,11 26.06.11(A)

prIVAtE SECtor

6Malana-II

1 H.P. Everest PPL HY 50.00 50.00 May,11 06.08.11(A)

7 2 H.P. Everest PPL HY 50.00 50.00 June,11 14.08.11(A)

8 Karcham Wangtoo 1 H.P. JKHCL HY 250.00 250.00 May,11 24-05-11(A)

9 JSW Ratnagiri TPP # 3 Maharashtra JSW Energy (Ratnagiri) ltd TH 300.00 300.00 May,11 06-05-11 (A)

10 Maithon RB TPP # 1 Jharkhand DVC- Tata JV TH 525.00 525.00 June,11 30.06.11 (A)

11 Udupi TPP # 2 Karnatka UPCL TH 600.00 600.00 April, 11 17-04-11 (A)

12 Wardha Warora @ 4 Maharashtra Wardha Power Co. Ltd (KSK) TH 135.00 135.00 April, 11 30-04-11 (A)

Sub total 3491.00 3491.00

IInd QuArtEr (JuLy - SEptEMBEr 2011)

CENtrAL SECtor

13Chamera-III

1 H.P. NHPC HY 77.00 Aug,11

14 2 H.P. NHPC HY 77.00 Sep,11

15 Sipat -1 * 1 C.G. NTPC TH 660.00 660.00 July,11 28.06.11 (A)

16 Durgapur Steel TPS # 1 WB DVC TH 500.00 500.00 Aug,11 29.07.11 (A)

StAtE SECtor

17 Myntdu 2 Meghalaya MeECL HY 42.00 July,11

18 Harduaganj Extn # 8 UP UPRVUNL TH 250.00 250.00 Sep,11 27.09.11(A)

19 Bhusawal TPS Expn # 4 Maharashtra MSPGCL TH 500.00 July,11

20 Santaldih TPP Extn Ph-II # 6 WB WBPDCL TH 250.00 250.00 July,11 29.06.11(A)

21 Hazira CCPP Extn # GT+ST Gujarat GSECL GT+ST 351.00 Aug,11

22 Pragati CCGT- III # GT-3 Delhi PPCL GT-3 250.00 Sep,11

prIVAtE SECtor

23Karcham Wangtoo

2 H.P. JKHCL HY 250.00 250.00 July,11 21.06.11(A)

24 3 H.P. JKHCL HY 250.00 250.00 Aug,11 08.09.11(A)

25 Jallipa-Kapurdi TPP # 3 Rajasthan Raj West Power ltd TH 135.00 135.00 Aug,11 02.11.11(A)

26 Anpara-C TPS # 1 UP Lanco Anpara Power Pvt. Ltd TH 600.00 600.00 July,11 15.11.11(A)

27 Mundra UM TPP 1 Gujarat Tata Power Ltd TH 800.00 Aug,11

28 Mundra TPP Ph-II 2 Gujarat Adani Power Ltd TH 660.00 660.00 Aug,11 20.07.11 (A)

Sub total 5652.00 3555.00

POWER sECTOR uPDATE

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IIIrd QuArtEr (oCtoBEr - DECEMBEr 2011)CENtrAL SECtor

29

Chutak

1 J&K NHPC HY 11 Oct,1130 2 J&K NHPC HY 11 Nov,1131 3 J&K NHPC HY 11 Nov,1132 4 J&K NHPC HY 11 Dec,1133 Koteshwar 3 Uttranchal THDC HY 100.00 Nov,1134 Chamera-III 1 HP NHPC HY 77.00 Oct,1135

Uri-II1 J&K NHPC HY 60.00 Nov,11

36 2 J&K NHPC HY 60.00 Dec,1137 Indra Gandhi TPP 2 Haryana APCPL TH 500.00 500.00 Nov,11 05.11.11(A)38 Sipat -2* 1 C.G. NTPC TH 660.00 600.00 Nov,11 24.12.11(A)39 Neyveli TPS Exp # 1 T.N. NLC TH 250.00 Oct,11

StAtE SECtor40 Bellary TPP St-II 2 Karnatka KPCL TH 500.00 Nov,1141 Pragati CCGT- III ST-1 # ST-1 Delhi PPCL ST-1 250.00 Oct,11

prIVAtE SECtor42

Budhil1 HP LANCO HY 35.00 Oct,11

43 2 HP LANCO HY 35.00 Nov,1144 Karcham Wangtoo 4 H.P. JKHCL HY 250.00 250.00 Oct,11 13.09.11(A)45 JSW Ratnagiri TPP # 4 Maharashtra JSW Energy (Ratnagiri) ltd TH 300.00 300.00 Oct,11 08.10.11(A)46 Anpara-C TPS # 2 UP Lanco Anpara Power Pvt. Ltd. TH 600.00 600.00 Oct,11 12.11.11(A)47 Sterlite (Jharsugda)* 3 Orissa Sterlite Energy Ltd. TH 600.00 600.00 Oct,11 16.08.11(A)48 Rithala CCPP ST Delhi NDPL TH 36.50 04.09.11 (A)49 Khamberkhera IPP 1 Gujrat Bajaj Energy Pvt. Ltd. TH 45.00 17.10.11(A)50 Jallipa-KapurdiTPP # 4 Rajasthan Raj West Power Ltd. TH 135.00 Aug11 23.11.11(A)51 Maqssodpur IPP 1 U.P. Bajaj Energy Ltd. TH 45.00 03.11.11(A)52 Barkhera TPP 1 U.P. Bajaj Energy Ltd. TH 45.00 06.11.11(A)53 Mundra TPP Ph-II 1 Gujrat Adani Power ltd. TH 660.00 07.11.11(A)54 Khamberkhera IPP 2 U.P. Bajaj Energy Pvt. Ltd. Th 45.00 28.11.11(A)

55 Kasaipalli 1 C.G. ACB India Ltd. TH 135.00 13.12.11(A)56 SVL 1 C.G. SV Power Ltd. TH 63.00 07.12.11(A)57 Rosa 3 U.P. Rosa Power Co. Ltd. TH 300.00 28.12.11(A)Sub total 4321.00 4419.50

IVth QuArtEr (JANuAry - MArCH 2012)CENtrAL SECtor

58Kudankulam

1 TN NPC Nucl. 1000.00 Feb,1259 2 TN NPC Nucl. 1000.00 Feb1260 Uri-II 3 J&K NHPC HY 60.00 Jan,1261 Koteshwar 4 Uttranchal THDC HY 100.00 Mar,12 25.01.12(A)

StAtE SECtor62 Myntdu 3 Meghalaya MeECL HY 42.00 Feb,1263 Harduaganj Extn # 9 UP UPRVUNL TH 250.00 Feb,1264 Bhusawal TPS Expn 5 Maharashtra MSPGCL TH 500.00 Jan,12

prIVAtE SECtor65 Maithon RB TPP 2 Jharkhand JVofDVC-Tata TH 525.00 Jan,1266 Tirora TPP Ph-1 1 Maharashtra Adani Power Ltd. TH 660.00 Jan,1267 Maqsoodpur IPP 2 U.P. Bajaj Energy Pvt, Ltd TH 45.00 21.01.12(A)68 Barkhera TPP 2 U.P. Bajaj Energy Pvt, Ltd TH 45.00 28.01.12(A)69 Kundarki 1 U.P. Bajaj Energy Pvt, Ltd TH 45.00 10.01.12(A)70 Mahatma Gandhi TPP 1 Haryana Jhajjar Power Ltd. TH 660.00 12.01.12(A)

Sub total 4137.00 895.00Grand total 17601.00 12360.50

Generation capacity addition during 2011-12 (contd.)

Sl. No. unit Name unit No. State Company type

Capacity (Mw) Commissioning Schedule

prog. Ach. As per prog. Actual (A)


POWER sECTOR uPDATE

Note : * - 11th Plan Best effort Units; # - Units slipped from 2010-11 Target; @ - Additional Units not included in 11th Plan Target


7%6%

10%

10%

12%

23%

24%8%

MUNDRA VIZAG PARADIP MUMBAI KANDLA NEW MANGALORE KOLKATA OTHERS

8%

5%

8%

11%

12%

21%

27%8%

MUNDRA VIZAG KANDLA MUMBAI KOLKATA PARADIP CHENNAI OTHERS

5%

9%

81%

4% 1%

AUSTRALIA UNITED STATES NEW ZEALAND SOUTH AFRICA OTHERS

19%1%

80%

INDONESIA SOUTH AFRICA AUSTRALIA

Note: Name of importers for coal and coke will be provided on request. Figures are based on consignment lifted from these ports for which price details/break-up is available with Coal Insights team

Major ports through which steam coal arrived in India (through mentioned ports) Oct-Dec ‘11

Major coking coal supplier countries to India (through mentioned ports) - Oct-Dec ‘11

Major steam coal supplier countries to India (through mentioned ports) - Oct-Dec‘11

0%0%

16%

19%

21%

38%

5% 1%

VIZAG PARADIP KOLKATA MORMUGAOMUNDRA KANDLA NEW MANGALORE CHENNAI

Major ports through which coking coalarrived in India - Oct-Dec ‘11

port Qty (in tons)

MUNDRA 2179411

VIZAG 2138632

PARADIP 1113233MUMBAI 975666

KANDLA 922216

NEW MANGALORE 770286

KOLKATA 591997

OTHERS 693134Grand Total 9384575

Country of origin Qty (in tons)INDONESIA 7565711

SOUTH AFRICA 1761491

AUSTRALIA 57373

Grand Total 9384575

port Qty (in tons)VIZAG 2574823PARADIP 1397866KOLKATA 1315507MORMUGAO 1081397MUNDRA 348111KANDLA 85500NEw MANGALorE 15000CHENNAI 437Grand total 6818642

Country of origin Qty (in tons)AUSTRALIA 5511453

UNITED STATES 615736

NEW ZEALAND 323338

SOUTH AFRICA 303852

OTHERS 64263

Grand total 6818642

Major ports through which steam coalarrived in India Oct-Dec ‘11

Major steam coal supplier countries to India (through mentioned ports) Oct-Dec ‘11

Major coking coal supplier countries to India (through mentioned ports) Oct-Dec ‘11

Major ports through which coking coal arrivedin India Oct-Dec ‘11

PORT DATA

Documents

Coal Insights - Feb 2012