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Coal Insights, February 2013 3

Dear Readers,

With the alleged coal scam still haunting the government, how could one forget the office of the Comptroller and Auditor General (CAG)? Recently, CAG Vinod Rai blasted again, this time for the limited authority given to his office. He sought power beyond that of placing audit reports in Parliament. He also suggested bringing social audits – rural health, primary education, water pollution, environment, drinking water etc. – under its purview.

That is an excellent idea, of course, if you consider the management of the economy as a whole. In our small pool of coal and energy, however, there is a different need altogether. Uncovering instances of crony capitalism is all very fine; but we also need to keep a tab on those stealing the most precious of resources. Time!

Just how many times did the ministry officials talk of a coal regulator, auctioning and pool pricing? What exactly bothers the government to install a regulator? When is the Land Acquisition Bill going to be placed? What is the status of CEPI now? Is the no-go restriction still in vogue or completely withdrawn? Who is to be held responsible for the loss of production in last couple of years?

These queries come back again and again, but the government always has all the time.

That said, let us turn our sight from what’s not happening to what’s taking place. In recent weeks, a major development has been reported from Singareni Collieries Company Ltd (SCCL). For once, the smaller miner has taken the lead and announced an increase in fuel surcharge, thereby increasing coal prices across the categories. It was widely expected that Coal India (CIL) could be tempted to follow suit, but CIL has shown restraint.

Nevertheless, due to the soft trend in international coal prices, the difference with domestic prices has narrowed down. In the absence of Chinese buying, coal miners in South Africa and Australia are finding it difficult to stick to their offers. Also, Indonesian miners are facing various problems, the latest one being an Indian government notification which may reduce the power sector’s import of low-calorie coal from that country.

The Indian economy is faltering and so is the industry. The mining sector has perhaps been the worst performer in recent months. The general slowdown and the poor demand are prompting India Inc. to take a relook into cost factors, particularly in non-core activities. Keeping this in mind, we brought conveyor belts, an essential part of coal logistics, to the focus in the current issue. As in mining, the problem with this segment is to be found in outmoded technology. The good news is that the industry recognizes that and regrets too. Only if our policymakers recognised their lassitude and sped up a little…!

Happy reading,

(Rakesh Dubey)

EDITORIAL

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Disclaimer: This document is for information purpose only. Certain information herein has been acquired from various external sources believed to be reliable. While we have taken reasonable care to compile this report, we in no way assume any responsibility for any error or discrepancy in regards to information contained herein. Readers are requested to make appropriate judgment without any prejudice or compulsion.

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Chief 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, Chief – 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, Executive Director, Deepak Fertilisers and Petrochemicals Corporation LtdS N Choubey, Head – Commercial, ABG Cement LtdSandeep Kumar, EIC (Secondary Products), Tata Steel LtdShyamji Agrawal, AVP-Central Procurement Cell, Ultratech Cement LtdSuresh Thawani, Managing Director, Tata Sponge Iron LtdAdvertisingSoumitra Bose, Tel: +91 92310 00232, Email: [email protected] Jalan, Tel: +91 91633 48243, Email: [email protected] Das, Tel: +91 91633 48045, Email: [email protected] Free No.: 1800 4192 000 1. Press 8 for publicationEmail: [email protected] Ray, Sobhan JasFor suggestions, feedback and queries, please write to [email protected]

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4 Coal Insights, February 2013

COnTEnTs

18 Somi Conveyor giving a facelift to an outmoded industry

34 Imported steam coal prices move in narrow range

35 Coking coal prices maintain firm bias in February

37 CIL’s no to Steel Ministry’s move 38 Mining sector impasse pulling down India’s

industrial growth 40 Coal quality continues to draw flak 42 India’s January power generation up 2.3%

m-o-m 44 Cement sector growth likely to be 5-8% in

2013 51 Jaypee Group looking to buy US,

Australian steam coal 53 CIL posts 9% rise in Q3 net profit on

higher sales 54 Sandvik Mining launches first Cable Bolter

in India 55 Siemens commissions gearless drive

systems for belt conveyor in Peru 56 US coal production declined by 6.9% in

2012: EIA 57 RBCT’s coal exports touch 68.4 mt in

2012 59 CIL must use CSR as investment

opportunity 61 Traffic handling by major ports down 2.8%

in April-January 62 Railways coal handling up 3.6% in January 63 Two rail projects for coal movement cleared 64 Annexure 66 E-auction data 68 Port data

46 | SPECIAL REPORTCoal import may erode India’s forex reserves by 2020At current rate of growth, India will need $290 bn till 2020 to cover coal import bill.

48 | TECHNOLOGYDull grey to sparkling blackTata Steel researchers have successfully achieved a pilot on reducing ash content in as-mined coal to 8%.

36 | FEATURESCCL hikes coal prices, CIL may not follow suitGovernment’s decision to increase diesel prices hits domestic coal market.

28 | INTERVIEWTechnology the main differentiator at Oriental RubberThe Pune-based conveyor belt maker thrives on innovation, aims to be a global brand.

6 | COVER STORYTech lag hits conveyor belt makersTechnological obsolescence makes Indian conveyor belt makers vulnerable to competition, Chinese dumping.

Call 9163348243 for more details

www.kctcoalsales.com

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6 Coal Insights, January 2013

Arindam Bandyopadhyay

Tech lag hits conveyor belt makers

If there is one sector that looks undeterred by India’s recent economic slowdown, it is the conveyor belt industry. Estimated

at around `1,200 crore, this vertical has grown at an average annual rate of 5 percent over the Eleventh Plan (2007-12) period. A reasonably good performance, given that most of the user segments failed to notch up a matching growth. But the belt manufacturers are aiming to move still faster, anticipating a 7 percent average annual growth in the next five years.

However, a ringside view of this ‘fast moving’ vertical does not look all that rosy. The industry is trailing by a decade in technology. The market remains highly fragmented. Almost all the manufacturers are dependent on imports for specialty inputs. There is a ‘telescopic’ duty structure in place. More than anything else, the Chinese vendors are eyeing the Indian market to dump their systems and steal the growth pie!




www.orientalrubber.com


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A snapshot of industry

The Indian conveyor belt sector saw a sudden growth spurt since the beginning of the last decade. The massive growth in user segments, especially mining, construction, cement and steelmaking, led to increased demand for this efficient mode of bulk transport. However, it was apprehended that the general slowdown in the economy and in some of these industries could bring down the demand in recent years. This fear was later proved largely unfounded.

The industry estimates for the overall volume varies from around `1,000 crore to `1,200 crore, including trough conveyor belts, textiles and steel. Trough conveyors have wide applications and are used in iron ore and gold, coal and fly ash, aggregates, sand and gravel, pulp and paper, chemicals, and agriculture and food processing. As mentioned, this industry recorded an average growth of 5 percent per annum during the last five years. Going forward, the industry expects a higher growth of 7 percent.

“This is due to the major investments made during the Eleventh Plan in power, mining and steel sectors,” said an official of a Kolkata-based conveyor belt manufacturer.

Material-wise, the market has two types of products, namely synthetic fabric reinforced belts and steel cord reinforced conveyor belts. The majority of the growth is expected in the fabric belt segment where the demand as well as the number of suppliers is higher.

“The basic difference between the two products is in the material used. The carcass, which is the tension bearing member of the belt, is made of fabric for synthetic reinforced belt. In steel cord, this is made of galvanised steel cord,” the official said. “The overall utility of these two products is the same. But capacity-wise, the tons per hour is higher for steel cord belts. Price-wise, a steel cord belt is 25 percent more expensive. But it has double life, lower elongation and deep trough. Thus, its material handling capacity is more.”

There, however, are diverse views on the benefits of synthetic fabric and steel cord reinforced conveyor belts. According to a senior executive of a Rajasthan-based manufacturer, the high installation and other costs of steel cord conveyor belts make it less popular in the Indian market. “Also, the new improved models of synthetic fabric belts are being offered as an alternative to steel cord belts.”

Besides meeting the demand from the domestic market, the Indian manufacturers also export the products to select markets. The major markets for exports are the Middle East, South Africa, Australia and South East Asia. The exported products are mainly synthetic fabric, used in sectors such as mining, power, cement etc.

A fragmented market

Despite having a long tradition, the Indian conveyor belt industry has remained largely fragmented over the years with a handful of players dominating the market.

In the synthetic fabric reinforced belts, there are around 25 players. The top players include Phoenix Conveyor Belt India, Oriental Rubber, MRF, Forech and Hindusthan Rubber Trading Co. These players together command almost 60 percent share of the market.

In the steel cord reinforced conveyor belts segment, Phoenix Conveyor Belt India reportedly commands 85 percent share of the

A belt for all occasions

Industry Types of belts used

Mining Multi-ply conveyor belts, fire and flame resistant conveyor belts, technical rubber sheets

Ports Multi-ply conveyor belts, self-extinguishing conveyor belts, oil and grease resistant, elevator conveyor belts, chevron conveyor belts, technical rubber sheets, sliding conveyor belts

Construction Multi-ply conveyor belts, chevron conveyor belts, technical rubber sheets

Power stationsMultiply conveyor belts, self-extinguishing conveyor belts, heat resistant conveyor belts, pipe-type conveyor belts, technical rubber sheets

Earth moving Multi-ply conveyor belts, technical rubber sheets, chevron conveyor belts, ripcheck conveyor belts

Tunnel constructionMulti-ply conveyor belts, self-extinguishing conveyor belts, pipe-type conveyor belts, technical rubber sheets

Quarries Multi-ply conveyor belts, ripcheck conveyor belts, technical rubber belts

Agriculture & food processing

Multi-ply conveyor belts, oil & grease resistant conveyor belts, elevator conveyor belts, sliding conveyor belts, supergrip conveyor belts, chevron conveyor belts, technical rubber sheets

Metallurgical industryMulti-ply conveyor belts, self-extinguishing conveyor belts, pipe-type conveyor belts, technical rubber sheets

Source: Savatech

The first conveyor system, essentially a belt which rotates continuously on two pulleys, was used in the 19th century. In 1901, Sandvik invented and started the production of steel conveyor belts. Soon afterwards, in 1905, Richard Sutcliffe invented the first conveyor belts for use in coal mines. Henry Ford introduced conveyor belt assembly lines at Ford Motor Company’s Michigan factory in 1913.

From then to now, the industry has undergone a sea change and there are several types of specialised conveyor belts for specific industries. Coal is usually transported through conveyor belts meant for bulk material handling.

The Indian conveyor belt industry has also evolved with time. In fact, the world’s longest single belt conveyor runs from Meghalaya in India to Sylhet in Bangladesh. It is about 17 km long and transports limestone and shale from a quarry in India to a cement factory in Bangladesh.

Globally, the longest belt conveyor system has been operating in Western Sahara for more than 30 years. It is used for transporting phosphate from the Bu Craa mine to the coast of El Aaiun. The system consists of 11 flights totalling a little more than 100 km conveying length.

Inveting the belt


www.volvoce.com


market. The rest is imported from Europe and South Korea. Forech has come up with its products in recent past and has garnered around 5 percent share, according to industry sources. These numbers are however contested by other manufacturers. New and emerging players such as Somi Conveyor Beltings claim to have made significant inroads into the organized market segment.

The fragmented nature of the industry has had its origin in the type of businesses that operated since the early years. A sizeable number of companies in the Indian conveyor belt market have been family-run businesses. These companies, more often than not, lacked the initiative to upgrade their products and establish their brands. Also, there was not much thrust on penetrating new market segments.

This situation however started changing for the better since the last decade. With the growth in user segments, a new crop of entities emerged with updated technology and professional management. Also, the few existing corporate entities revamped their marketing efforts and product portfolios to get a greater chunk of the growing businesses.

Outdated technology

Technology is a major pain point for the Indian conveyor belt industry, according to industry sources. The old family-owned businesses are often blamed for continuing with the production technologies of the 1960s. “What they do in the name of technology upgradation is mere patch-up work on existing processes. But the industry really needs an overhaul if it is to survive future competition from global players,” said a senior official of a leading manufacturer.

This trend is quite apparent from the fact that the vast majority of the Indian manufacturers are engaged only in synthetic belts, where the technology is “relatively easy”. In contrast, the technology used in steel cord belts is “rather complicated”. In fact, there is no indigenous technology used in this segment and the know-how comes from Europe.

The low-key technology used by a large portion of the market turns out “below average quality” products. To market the same, these manufacturers battle on the price front. This, in turn, makes things difficult for premium manufacturers that adopt

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Leading manufacturersPhoenix Conveyor Belt India Pvt Ltd, a subsidiary of Phoenix Conveyor Belt Systems GmbH, Germany, is one of the leading manufacturers of conveyor belts not only in India, but in entire south

Asia. The company is claimed to be the largest exporter of conveyor belts from India with markets in around 24 countries. It has a state-of-the-art plant at Kalyani, West Bengal and has technology tie-up with engineering institutes such as Indian Institute of Technology (IIT), Kharagpur. The company offers synthetic textile reinforced conveyor belts, steel cord conveyor belts, conveyor systems and protection systems.

Forech India Ltd, the flagship of Forech Hilton, is a leading manufacturer of fabric and steel cord reinforced conveyor belts that offer a complete range of products. With modern manufacturing units in Sonepat, Haryana, and Cheyyar (near Kanchipuram), Tamil Nadu, Forech is well positioned to cater to the Indian market. The Cheyyar facility produces steel cord belts in technical collaboration with Dunlop Belting Products, South Africa. Currently, the company has capacity to manufacture over 50,000 meters of textile belts per month (with width up to 1,800 mm, and 5,000 meters of steel cord belts per month (with width up to 2,000 mm).

Established in 1949, Oriental Rubber Industries Ltd has gained the reputation of being a world class manufacturer of rubber conveyor belts and rubber sheeting in India. Located at Pune, the company has emerged as the biggest Indian exporter of fabric reinforced conveyor belts. The company manufactures conveyor belts up to 2,000 mm width and in various grades conforming to international standards. Other than the entire range of fabric reinforced belts, Oriental Rubber produces specialised rubber products, impact bars, wheel wedge and buffers.

Hindustan Rubbers, established in 1989 at Thrissur, Kerala, provides roller conveyors, industrial conveyors, industrial elevators and conveyor systems. It enjoys a leading position in the Indian market as a full-service conveyor service organisation.

Macrame Conveyors Pvt Ltd (MCPL), a Chennai based company,

is a leading manufacturer and supplier of bulk material handling systems in India. MCPL deals in products such as belt conveyors, bucket elevators, chain conveyors, portable conveyors, screw conveyors and crushers, among others. It provides handling systems for coal, ash, fuel as well as food processing.

Other than the above mentioned manufacturers, a number of medium sized companies including Sempertrans Nirlon Ltd, Northland Rubber Mills, Krishna Belts (P) Ltd, Premier Rubber Mills, Oxford Rubber Pvt Ltd, etc. are leading names in the Indian conveyor belt market.

www.solarexplosives.com


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latest systems and set up state-of-the-art facilities. Investments made into upgrading technology often fail to fetch commensurate returns from the market.

“The backwardness in technology is caused by the fragmented nature of the market. Once the market is organised, the low-end marginal players would be forced to either merge with big players and/or close operations. This would result in improvement in both technology and quality of products as well as pricing,” said an industry insider.

A positive development in this regard is that the relatively late entrants into the market such as Somi Conveyor Beltings are trying to build their businesses based on technology and innovation. This along with the tech initiatives by larger firms that focus on exports may bring a shift in the industry’s approach towards technology in coming days.

Raw materials

Yet another significant concern for the Indian conveyor belt industry is the import-dependence for procurement of raw materials. Some raw materials are commonly used in both synthetic and steel cord belts. These include natural rubber, synthetic rubber, carbon black, rubber chemicals and adhesives. Besides, fabric is used for synthetic, while galvanized steel wires are used for steel cord belts.

Except for natural rubber, galvanised steel wires and fabric, raw materials are mostly imported from South Korea, China and Russia. Carbon black is imported from the Philippines. In India, Phillips Carbon Black and Hi-Tech Carbon (a unit of Aditya Birla Nuvo) are the largest producers of carbon black. However, the domestic price of the product, according to industry sources, is on the higher side and therefore a large part of the requirement is procured from overseas suppliers.

As for natural rubber, the primary input required for both synthetic and steel cord belts, the domestic availability is around 1 million tons (mt) whereas demand is 1.2 mt. The domestic tyre industry accounts for 90 percent of the natural rubber supply while the conveyor belt sector accounts for around 8 percent. Natural rubber in India is

mainly produced in southern Indian states or the Malabar region. Kerala is home to about 450,000 hectares of yielding rubber plantation, which produces around 750,000 tons of rubber with around 5 percent increase

estimated every year. The single location of rubber plantation increases the vulnerability of supply due to seasonal fluctuations.

Also, the volatility in prices of rubber, the main raw material, creates pressure on

An essential logistics deviceA conveyor belt is a mechanical apparatus consisting of a continuous moving belt that transports materials from one place to another. The belt forms a continuous loop which is supported either on rollers (for heavy loads) or on a metal slider pan (if loads are light enough to prevent frictional drag on the belt). Motors operating through constant or variable-speed reduction gears usually provide the power. A conveyor belt consists of two or more pulleys, with a continuous loop of material that rotates about them. This loop is actually the conveyor belt. Belt conveyors can be of various sorts namely fabric, rubber, plastic, leather or metal, and are driven by a power-operated roll mounted underneath or at one end of the conveyor.

As per the varied industrial requirements, there are broadly three different types of conveyor belts:.

• Basic belt• Snake sandwich belt• Long beltA basic belt conveyor consists of

two or more pulleys which hold one continuous length of material. These types of belts can be motorised or require manual effort. As the belt moves forward, all the items on the belt are carried forward. This type of device is commonly used in packaging or parcel delivery services, which require quick relocation of materials from one place to another with minimal human intervention. The belt is typically installed at waist height to improve the ergonomics for the staff that are interacting with the materials.

The structure generally consists of a metal frame with rollers installed at various intervals along the length of the belt. The belt is typically a smooth, rubber material that covers the rollers. As

the belt moves over the rollers, the items placed on the belt are transferred with low friction due to the use of multiple rollers.

The snake sandwich conveyor consists of two separate conveyor belts, set up parallel to each other holding the product in place while moving along the belt. This type of belt is used for moving items up steep inclines, up to 90 degrees. It was first introduced in 1979 and was mainly designed for moving rocks and other materials out of a mine. The system was designed to make use of widely available hardware and used simple principles to ensure that it was easy to repair. The system is able to move a high volume of materials at a consistent rate. Smooth surfaced belts allow the conveyor belts to be cleaned automatically with the use of belt scrapers and plows. The design is flexible enough to allow the materials redirected off the conveyor belt at any point through simple redirection.

The last and final one, the long belt conveyor is a system of three drive units used to move materials over a long distance. The most important feature of this system is the ability of the rollers to handle both horizontal and vertical curves. The long belt conveyor system can reach up to 13.8 km (8.57 miles) in length. This type of conveyor belt is often used in mining operations to transport materials to remote construction or building site locations, such as the bottom of a mining pit.



www.somiconveyor.com


the industry players, thus affecting the final product cost and margin. There was over 60 percent year-on-year jump in average prices in 2010-11, according to data provided by the Rubber Board. In order to cope with rubber price volatility, a number of domestic conveyor belt manufacturers had increased their prices in the months of November 2009 and March 2010. However, they faced stiff resistance from the transporters against any further increase. Industry sources feel that price volatility may increase with an increase in demand for natural rubber in coming years.

Another problem facing the domestic users is the “telescoping duty” imposed by the government under which the import duty for a finished product (synthetic fabric reinforced system) is 10 percent, whereas that for natural rubber is 20 percent. This high duty on natural rubber, however, impacts more the tyre manufacturers, industry sources said.

“We as a company raised this issue to the government. We don’t know if this year’s budget will address it,” said a source.

User industries

While the industry estimates a 7 percent growth in topline during the Twelfth Plan (2012-17), much of it will depend on how the user segments – core sector industries such as power, mining, steel and cement – will fare during the period.

“While the government has drawn up major expansion plans in infrastructure and the companies have made significant investments in recent years, there are

concerns over the speed of implementation,” said an official. The power ministry has chalked out a massive capacity addition plan of 88,000 MW in the next five years. But given the performance in the Eleventh Plan, the industry expects that only 60-70 percent of the Twelfth Plan target could be achieved.

The major concern is, of course, the grant of statutory approvals by various ministries and departments, primarily the ministry of environment and forests (MoEF). As of February 17, 2013, there were 30 thermal power projects (among those received after April 30, 2009) pending environmental clearance (EC) and 9 others were awaiting Terms of Reference (TOR), together having a combined capacity of nearly 50,000 MW.

Other than EC, the other major challenge for the power sector is fuel (coal) supply. Currently, Coal India Ltd (CIL) is at a loss as to how to augment production without getting approvals for mining at new sites. The coal block controversy and the proposal to restructure CIL have come to confuse things further. CIL, under the diktat of the coal ministry, has already signed fuel supply agreements (FSAs) with power utilities much beyond its projected supply. This situation,

according to company officials, looks similar to the Eleventh Plan scenario when CIL was given to sign linkage agreements much beyond its capacity to supply.

In the steel sector, two mega projects of Posco and ArcelorMittal are stuck in Odisha due to land acquisition and approval issues. Also, the demand has remained rather subdued in the domestic market for the last couple of years, which put pressure on both the topline and the bottomline.

The cement industry, another major user of conveyor belts, has suffered a major jolt from the punitive action by the Competition Commission of India (CCI) last year. Besides, market sources estimate the current capacity could become redundant if the construction demand fails to match expectations. As of now, the industry has a production capacity of 324 million tons per annum

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Rubber production (in tons)2008-09 2009-10

Natural rubber 864,500 831,400

Synthetic rubber 96,739 106,743

Reclaim rubber 86,390 93,535

Total 1,047,629 1,031,678

Rubber consumption (in tons)2008-09 2009-10

Natural rubber 871,720 930,565

Synthetic rubber 292,950 347,710

Reclaim rubber 86,030 92,250

Total 1,250,700 1,370,525

Source: Rubber India

Coal demand and supply (in mt)

Year Demand (BE)

Supply (Despatch) Gap

2009-10 604.33 513.792 90.53

2010-11 656.31 523.465 132.84

2011-12 (P) 696.03 535.152 160.87

Source: Ministry of Coal (MoC)

Another problem facing the domestic users is the “telescoping duty” imposed by the government under which the import duty for a finished product (synthetic fabric reinforced system) is 10 percent,

whereas that for natural rubber is 20 percent. This high duty on natural rubber, however, impacts more the tyre manufacturers.

World’s longest conveyor belt system in western Sahara (totalling more than 100 km)


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(mtpa) with 148 large and 365 mini cement plants (including public sector facilities) in operation. However, when it comes to capacity utilisation, the industry operates at a low 75-80 percent level, compared to around 100 percent in 2006-07.

The other major user industries such as paper, chemicals, food processing and retail could also suffer a slowdown due to the general weakness in the economy. India’s GDP growth is expected to drop to 5 percent level in 2012-13, the lowest in a decade, according to various estimates.

Chinese threat

A major threat that looms on the Indian conveyor belt sector is that of cheaper imports.

“If the situation does not improve, i.e. if the industry fails to embrace better technology, reduce costs and improve quality en masse, there would be a real threat of cheaper foreign products stealing our growth pie,” said an industry source.

“Tomorrow, China may start dumping its products in the Indian market. Chinese

products will undercut our prices. We may move the government for imposing an anti-dumping duty,” the source said.

The Chinese manufacturers could outdo both domestic and other overseas equipment makers in terms of cost. In fact, in recent years, the Chinese vendors have made significant inroads into the Indian mining sector. Many equipment supply contracts from Indian miners including Singareni Collieries Company Ltd (SCCL) have been won by the Chinese firms. However, industry sources feel that the Chinese imported belts have a high maintenance cost and need to be replaced within one or two years.

Besides cost issues, the overseas vendors could grab the market by offering improved services as well. “There is much to be desired in after sales services; in laying, jointing, splicing of belt conveyor systems and overall maintenance which is not up to the mark. This is true even in case of some bigger firms,” he added.

Opportunities beckon

Despite the threats and concerns, the Indian conveyor belt industry has a bright prospect in terms of demand growth in the domestic market. Also, the cost compulsions of user segments would drive companies to optimise their logistics operations. Besides, the increasing environmental concerns and

stringent measures by government, while affecting the new projects of user industries, should favour conveyor belt systems to conventional transport.

“The scope for conveyor belt in the Indian market is quite huge in terms of volume growth. Overall, the market penetration of these systems is relatively less as compared to the developed markets. In the Indian mining sector, however, the penetration level is quite significant. This is so because conveyor belts save on costs and substitutes road transport or rail transport,” an official said.

Along with costs, the environmental benefits associated with conveyor belts come as a big plus. “It has lower costs and also pollutes less compared to dumpers and dozers. Carbon emission is one-sixth for conveyor belts compared to road transport,” he said.

The industry must highlight such benefits, he insisted. It should also take a decisive call to discard outdated technology and go for technical tie-ups. Any new investment made should give priority to technological upgrade rather than to capacity expansion.

“Setting the priority right will help the industry both ways. First, it would be able to thwart the threat from cheaper imports, if any. Second, it would be able to achieve its targeted goal, 7 percent or more,” the official added.

Tomorrow, China may start dumping its products in the

Indian market. Chinese products will undercut our prices. We

may move the government for imposing an anti-dumping duty.

Market price of RSS 4 Grade Natural Rubber (`/100 kg)

Year Price (Rs)

2001-02 3,228

2002-03 3,919

2003-04 5,040

2004-05 5,571

2005-06 6,699

2006-07 9,204

2007-08 9,085

2008-09 10,112

2009-10 11,498

2010-11 19,003

Source: Rubber Board

A single belt conveyor between Meghalaya (India) and Sylhet (Bangladesh)


www.nkcpl.com


InTERvIEW

Excerpts:

How big is the Indian conveyor belt industry? Where does Somi Conveyor figure in this market?Conveyor Belts are integral to the

basic transportation needs in any Bulk Material Handling/Transportation Plant and is the lifeline of any continuous process industry. The Indian conveyor belting industry is quite substantial in terms of size and especially, its growth

The conveyor belting industry in India moves on outdated wheels. The technology

used is said to be a decade old compared to the latest systems in use elsewhere. Also, the market though sufficiently old still remains highly fragmented. In such a scenario, Somi Conveyor Beltings Ltd (SCBL), a Rajasthan-based manufacturer, is making bold moves to battle the market’s apathy towards new polymer sciences.

Incorporated in 2000, SCBL has set up two state-of-the-art facilities at Jodhpur. From the very beginning, the company aspired to build its business based on research, engineering and innovation. In fact, SCBL came up to be different in many respects. Unlike many family owned ventures, SCBL was promoted by a first generation entrepreneur. The company was listed within a decade of its incorporation. It increased capacity at a break-neck speed, from 36,000 metres per annum (mpa) in 2002 to 900,000 mpa (up to 2,000 mm wide beltings) in 2012.

In an exclusive interview with Coal Insights, O P Bhansali, chairman and managing director, Vimal Bhansali, director (marketing) and B P Singh, AVP (projects-marketing) of SCBL, spoke about the company’s growth plans and its sharp focus on innovation.

Somi Conveyor giving a facelift to an outmoded industry

O P Bhansali, CMD, SCBL

www.carlislecbf.com


InTERvIEW

potential. There are various types of products catering to different end user segments. The demand for fabric conveyor belting is huge in India both in the replacement market as well as new projects. It can be estimated at more than Rs 700 crore and above.

Somi Conveyor holds nearly 20 percent share of the market.

Over the years, the Indian belting industry has remained grossly unorganised and under-penetrated. What is your take on this?Yes, the Indian conveyor belt manufacturing sector has been more or less unorganized and it is only in the last eight to 10 years that the companies have started to market their brands and tried to achieve more penetration in market like their foreign counterparts.

Somi being a listed company works 100 percent on corporate norms, through delegation of authority to all departments for their specified roles, to achieve targeted goals and monthly audit of performances.

We have a handpicked team of 15 marketing professionals headed by B.P. Singh who has rich national and international marketing experience of 20 years. Due to our focused approach and thrust on establishing our brand,

the company’s market share has grown rapidly over the last few years.

One major USP of the company is the designing of special utility beltings for critical applications in the industry. For instance, we have developed the SEHR 36 250 DEG hot clinker carrying belt which is patronised by all the major cement giants across the country.

What in your view is the most crucial drawback facing the Indian conveyor belt industry?First and foremost, it is the lack of technical upgradation at the manufacturers’ end and the knowledge about conveyor belting at the user end. The old first generation companies are still carrying on with the production technology of the 1950s and 1960s, which is adversely affecting the pricing as well as quality of the domestic market.

However, of late the organised

sector players are continuously striving to change this picture. But the number of such players is still very few.

We at Somi Conveyor are consistently engaged in conducting extensive research to keep ourselves updated with the changing technology and overcome the drawbacks of existing product range and engineer new products. Customisation is another strength that we offer our clients with the help of our team of well-qualified professionals.

Our latest fully PLC/SCADA system machinery which has a reasonable pricing but exceptional quality gives extra-long life beltings. We have also developed special utility grades including oil resistant, energy saving belt, STA (bullet proof Aramid fabric) belts.

Talking about technology, could you elaborate on the prevalent technologies in the conveyor belting segment in India? How well placed is Somi in imparting technical efficiencies?As I already said, India lags in technology upgrading in this segment. In fact, lack of technological advancement in equipment and manufacturing processes as well as ignorance towards polymer sciences has pushed back the Indian conveyor belt industry at least by a decade. The industry still runs like a cottage industry banking only on IS:1891 standards.

SCBL, on the other hand, is a BSE listed and ISO 9001:2008 certified organisation. We have a unique blend of the latest state-of-the-art PLC controlled and comprehensively automised plant. We also have the best of human resource in the field of polymer technology and R&D backed with one of the best testing facilities available

Lack of technological advancement in equipment and manufacturing processes as well as ignorance towards polymer sciences has pushed

back the Indian conveyor belt industry at least by a decade. The industry still runs like a cottage industry banking only on IS:1891

standards.

SCBL’s Jodhpur plant


www.adhunikgroup.com


InTERvIEW

in-house. Overall, the company has a distinct edge over its competitors who have been using conventional methods and re-furbished outdated machines.

Today SCBL, with constant user interaction and up-gradation of technology has many new developments to its wings like SEHR-36®; SAR-36® (FR&AS); Rock 2007 (M-28); STA Beltings (which is an alternative to Steel Cord Belts). These new developments have translated into rich dividends to our customers in terms of productivity; almost zero hassles at a price which is almost 35 percent less than conventional belts taking life; breakdown cost; inventory carrying cost and escalated rates. At Somi, we treat our buyers like our business partners, helping them to take decisions and giving them all support in imparting technical expertise, better productivity and cost effective solutions.

Could you please elaborate about the distinct range of conveyor belts used in the Indian industrial sector? Which are the major segments catered to by Somi Conveyor Beltings and which sectors

have drawn the maximum demand inflow?The most sought after grades used in Indian diversified industrial sector are:

♦ Heat Resistant - HRT-1, HRT-2 and UHR

♦ Fire Resistant - FR; ♦ General Grade - M-24; N-17

The major sectors catered by Somi Conveyor include cement manufacturing, mining (iron ore, coal, lime stone, bauxite, manganese, copper, uranium, gold and other ores), steel, copper and aluminum manufacturing plants, thermal power generation plants for coal handling, fertilizers, minerals and heavy chemicals, salt & hygienic food processing industry, ports and dockyards, crushers and infrastructure industry, among others.

It is claimed that Somi conveyor belts are outlined with abilities to even replace Steel Cord conveyor belts. Could you please brief us about the latest technologies imparted while manufacturing your products?Steel Cords are conventional belts

which are very heavy in weight. It has phenomenal installation cost and requires special heavy structure to support such bulky belts; it is also very difficult to handle. Since we are supported by DuPont, USA on polymer sciences, a continuous flow of technological upgradation is something SCBL enjoys. Further, we were approached by MEP-Olbo GmbH, Germany for a new technology that was proven in European Nations, Australia and USA where for cross country, extremely heavy belts of Steel Cords were replaced by Aramid Belting in single ply structure.

SCBL’s STA belts will have the same strength as the existing steel cord belts, but will be 40 percent lighter. The remaining technical parameters, life span, productivity and durability will be the same as the steel cord belts. However, the STA belts will have an edge over the steel cord belts in terms of troughability. Also, there will be no problem of corrosion as opposed to the steel belts. Jointing will also be more economical and less cumbersome against the very expensive jointing of

The manufacturing site at the Jodhpur plant


www.mining.sandvik.com


InTERvIEW

steel cords. That results in substantial energy loss, productivity loss, inventory carrying loss and frequent breakdowns along with huge cost of installation as far as the steel cord belts are concerned.

These STA Belts are a result of a technical collaboration with MEP-Olbo GmbH of Germany and polymer technology from DuPont, USA. A special fabric has been developed as a result of this collaboration which is five times stronger than steel.

Can you brief us on the industries you serve with your hybrid conveyor belts? Also please give us the details about the higher capacity conveyor belts that you manufacture? How much is your current installed capacity?

The installed capacity for Somiflex Range of Rubber Conveyor Beltings (2200 mm wide) is 900,000 meters per annum (mpa). Currently, we have seven manufacturing lines. Apart from Regular Grades falling under IS-1891, we offer value addition to our customers by offering new technology through our innovations and developments that are now proven. The details are as under;

♦ Heat Resistant - SEHR-36® & 72® For Temperature Resistance Upto 250 & 300 Deg C

♦ Fire Resistant - SEHR 36® (FR & AS) Approved by DGMS for Underground Coal Mining Confirming to IS 15143 which is for first time any Textile Rubber Belt has passed this stringent Tunnel Fire Test under Propane Gas.

♦ Spl. Grades - Tiger-27®, Rock-2007®, STA®, SEFR-81®

♦ Super Spl. Belts - Food Grade; Pipe Conveyor; Metaflex SAR-36®

♦ Profiles - Plain; Chevron; Wavy; Rough; Cleat

Please describe the efficiency of Somi Conveyor belts in aiding heat and fire resistance? What is the maximum operational temperature sustained by Somi Conveyor belts?

♦ Heat Resistant - SEHR-36® & 72® For

Temperature Resistance up to 250 & 300 Deg C

♦ Fire Resistant - SEHR 36® (FR & AS) Approved by DGMS for Underground Coal Mining Confirming to IS 15143 which is for first time any Textile Rubber Belt has passed this stringent Tunnel Fire Test under Propane Gas.

Somi is the only company in India whose product SAR-36® (FR&AS) is approved by DGMS, Dhanbad under IS 15143 for underground mining. Till date no other competitor has been able to achieve this FR standard in rubber compounding for textile belts. Hence till date only PVC Belts were used. This is possible because of our R&D team backed with polymer engineers who have worked endlessly to achieve such distinction. This belt was tested and demonstrated at CIMFR on request of DGMS, Dhanbad and has passed all stringent tests.

Somi outlines its research and development department as an active component in enhancing the company’s operational presence. Can you brief us on the R&D support assured for your customers?We have a separate R&D section with total in-house testing facility comprising two separate sections namely Physical

We have replaced almost all the major machines bought in 2008

in 2011, as part of a massive technological upgradation and capacity enhancement

exercise, by purchasing the latest technology with patented design

from global resources.

A conveyor belt installed by SCBL


www.irclgroup.com


InTERvIEW

and Chemical Section. All equipment are duly calibrated and periodically checked. SCBL has very stringent QAP (Quality Approval Plan) confirming to ISO 9001:2008.

Somi enjoys testing facility that is equipped with all testing machines to undergo any tests confirming to IS; BIS; ASTM; CAN; DIN or any other standards the customer desires to follow. Furthermore, regular third party inspections are being carried out by Central Mine Planning & Design Institute Ltd (CMPDIL), Tata Projects Limited, Rajasthan Rajya Vidyut Utpadan Nigam Ltd (RRVUNL), RITES, TUV (which provides certification of management systems), SGS (an inspection agency) apart from the Customer QA team directly.

Based on Quality Assurance Programme (QAP), 100 percent traceability is assured to customer and each and every conveyor belt is tested right from raw material to finished stage including in-process tests.

How does PLC based fully automatic and computerised machineries enhance the potential of your manufacturing unit? We have installed 16 Channel SCADA Based Thermal Scanners which monitor the continuous flow of heat at every stage of manufacturing. PLC System is supported with closed loop PDI signals which accurately monitor the gates

of the microprocessor circuit thereby eliminating any humane error. It also enhances productivity as we have cut off any dependence on manual lethargic system. This, in other words, means that there is no possibility of malfunctioning due to human error of judgement.

We have installed the latest technology with brand new machines from Germany, USA and China. These machineries are supported by optical sensors and guiding systems for Equipment from E&L, Germany, Auto Tensioning Devices, System Analyzers, SCADA Based Scanners and Closed Loop Touch Screen Equipment with One Touch Monitoring & Sensing. We have replaced almost all the major

machines bought in 2008 in 2011, as part of a massive technological upgradation and capacity enhancement exercise, by purchasing the latest technology with patented design from global resources. Discarding machines within three years of use needs firm determination, quality commitment and well-defined vision and mission.

By using PLC, the productivity in terms of productivity per employee (PPE) has increased by 37.2 percent. The biggest achievement is that with the same employees Somi has achieved 105 percent increase in productivity (Reference 2011-12 and 2012-13 till December 31, 2012). This enhanced productivity has enabled us to offer products at much more economical rates that no competitor can match, while maintaining consistent superlative quality and timely deliveries.

How has been the order inflow for Somi Conveyor Beltings in 2012 and what are your expectations from the current fiscal? The year 2012 was the year for setting the goals and 2013 is the year of achieving our targets. As per our set goals, we expect to cross Rs 70 crore as sales revenue in the current financial year (2012-2013). In 2013-2014, our targeted sales revenue is Rs 135 crore. We are confident of achieving our annual targets.

‘No rough surface’

0525

75

95

100




Oriental Rubber Industries Limited (ORIL) established itself as one of the first

producers of rubber moulded articles in independent India way back in 1949, and has now set a target of being among the top 10 conveyor belt producers globally.

With its strong history and proven track record as a conveyor belt manufacturer, Oriental Rubber has been providing

Vishal Makar and Vikram Makar, Joint MD, Oriental Rubber Industries Limited

Technology the main differentiator at Oriental Rubber

InTERvIEW


www.allmineral.com


products of lasting value and hence the company is already recognised as a preferred choice for quality conveyor belts in the domestic scene. However, with its current focus on expanding its footprint globally, the company has now acquired global scale manufacturing capacities. This will enable the company to fulfill its objectives to be a leading and preferred source by 2015.

Talking about this target and other plans of the company, Oriental Rubber’s joint managing directors Vishal Makar and Vikram Makar spoke to Coal Insights in an exclusive interview.

Excerpts:

What is your current production capacity and targeted capacity for the Twelfth Plan? Do you have any new investments or facilities in the pipeline?Oriental Rubber has a current capacity of 1.2 million metres per annum of belting capacity, thus making us the largest textile reinforced belt producer in the country. We have grown at a CAGR of 25 percent per annum over the last five years and expect to maintain

this over the coming years. This is of course dependent on the extremely competitive market and the national and global economic scenario in our target segments – mining, construction and industrial.

What is the current global footprint for your belting solutions? What has been your export performance in recent years?Oriental has a clear focus to supply a harmonised and consistent quality of products to our customers and we maintain this quality irrespective of the location of our customer. With this approach, we have been able to carve a global presence which is recognised even among our peers. Oriental Rubber is India’s largest manufacturer exporter, with sales to more than 30 countries.

What is your outlook on the Indian and global markets for belting solutions? How has the economic slowdown in Europe and US affected your global ambitions?As will be appreciated, the core sector performs differently in different economies and product segments. For example, the consumption of thermal coal is mainly dependent on its use in thermal power plants while that of coking coal is dependent on the steel sector. Similarly, in the case of platinum, the production is affected and linked directly to the automotive sector. Thus, one does witness fluctuations in these individual product segments from time to time and our business model adapts to changing scenarios.

In the Indian context, while there was an upsurge of new thermal power plants being launched over the last five years (and this would have a direct impact on the coal conveying industry), this has been followed by an incessant delay in completion of the projects. As a result, there is now an overcapacity in the BOP (Balance of Plant) equipment in general and the conveyor belt industry in particular since the anticipated growth has not happened at the desired levels. In this context, one has to look at the replacement requirements of

InTERvIEW

We believe that merely price and low costs are not sustainable advantages, especially if one looks at the inflation levels prevailing in India and the

almost paradoxical shortage of skilled manpower.

The manufacturing unit of ORIL


http://mjunction.in/downloads/ICMW.pdf


the market as a means to survive as a belting producer, with new projects being few and far between at the moment.

“Conventional” overseas markets like Europe and the US are witnessing flat, if not recessionary, conditions but with our company’s established credentials and supplier-customer relations, we are confident of maintaining our position in these markets as well.

How competitive is the company internationally in terms of price, cost and technology?We believe that merely price and low costs are not sustainable advantages, especially if one looks at the inflation levels prevailing in India and the almost paradoxical shortage of skilled manpower which we encounter.

Therefore that leaves technology as the main driver for Oriental Rubber and since inception this is one feature which has differentiated us from the competition. Being driven by technology, we have always striven to produce belts and related products which impart not only lasting value, but are customised to suit specific applications.

This will continue to be the key differentiator in both the global and more increasingly also in the national market since, with the increasing focus on TCO (Total Cost of Ownership), users and buyers are aware that an initial cost saving (by buying a cheaper conveyor belt) in fact reduces the overall reliability and durability of the entire conveyor system and more so their production stream itself.

We will continue to expand our

already diverse portfolio of belting and wear protection products and keep offering improvements for specific belt applications.

What were your latest product launches? Are you planning any new launches in 2013?Our market research shows that in conveyor belt usage, the product is mainly replaced due to abuse and not due to normal wear and tear. This means that there is a latent demand for superior performance and higher strength conveyor belts.

Secondly, any initiative which results in cost savings by way of enhanced life, energy savings, weight reduction should be an attractive proposition. Thirdly, reducing the carbon footprint is a key focus area in the mining industry and any product which can bring this about will have an edge over the rest.

Oriental Rubber has a range of conveyor belts under its MAXX range of products. To this effect, we have launched our MAXX ROCK, MAXX POWERSAVE, MAXX TRAK and MAXX ARMOUR products which will benefit the coal conveying and other industries. In 2013-14, we will consolidate our initiatives with these products for the benefit of our Indian customers.

Some feel that the Indian belting industry faces a potential threat from cheaper imports by China. What is your view on this and how can it be pre-empted?Oriental Rubber, as a globally present producer, is always respectful of its competition and we reserve making generic comments against any country. That said, it is an admitted fact that some imports of belts are taking place, but it is important for our customers to know two facts – one that Indian conveyor belt industry is technologically a much older and more capable producer and secondly that the cheaper belts which are being imported are at a

InTERvIEW

Select product range of ORIL


lower price which is directly identifiable with lower quality!

Therefore, it is very important to send a message to users and buyers – ‘please do not buy just any cheap belt from a factory with no quality control. You have a good base of manufacturers in India to select from and obtain the service levels required for a technical product like a conveyor belt’.

What are the major raw materials used by the industry? Is the Indian market self-sufficient in supply of raw materials? If not, which inputs are imported and from where?The major raw materials required for manufacturing belts include rubber of various grades e.g. NR, SBR, special polymers, carbon, rubber chemicals and of course the main reinforcement material being fabric. While India is generally self-sufficient in production of the bulk raw materials, certain special polymers and chemicals need to be sourced from reputed sources overseas from time to time.

With the demand for specialised applications increasing, the local availability of synthetic rubbers is expected to improve.

How innovative is the Indian belt conveyor industry? How much focus does your company have on R&D and new product development?Unfortunately, the Indian conveyor belt industry has not shown much innovation due to various factors. A lack of direct interaction with the end users, a tender based purchasing system and a plethora of manufacturers of different scales and sizes are some of the reasons that most producers have preferred to make only a standard, “plain vanilla” range of belts.

Oriental, on the other hand, has always innovated and developed a specialised range of belts and wear-protection products in order to be in the forefront and to enable us to not only compete, but to be the best in class, worldwide. The benefits of this are now being felt gradually in several segments and we expect that the coal industry can also derive substantial benefits from these endeavours.

What are the major hurdles facing the industry in India? While competition in any mature market is a global reality, the Indian belting industry is characterised by a multitude of producers ranging from Indian MNCs, MNCs, old medium sized players and smaller sized manufacturers.

This results in a product quality and capacity which covers a wide band of variability. Due to the bulk of the purchases still being in the public sector, this variability is often overlooked while procurement is being done.

As a result, often the largest purchasers get the supplies from the smallest producers having a very basic infrastructure. A case in point would be Coal India Limited (CIL) and its constituent units – none of the large producers of belts are able to supply or compete due to the broad based (and weak) prequalification criteria of the purchasing companies. Thus the quality evaluation gets somewhat diluted and as a result, larger qualified producers (like Oriental and few others) miss on the opportunity of catering to some of the bulk purchasing PSUs in the country.

InTERvIEW


COAL mARkET funDAmEnTALs

Coal Insights Bureau

Imported steam coal prices moved in a narrow range in February with prices of South African coal easing, while that of

Australian and Indonesian coal prices rising marginally amid scant buying interest.

South African coal (6000 kcal/kg NAR) prices eased to $84 per ton fob on February 15 compared to $85.7 per ton fob on January 31. Australian coal (6300 kcal/kg GAR) prices rose marginally to $95.5 per ton fob on February 15 compared to $94 per ton fob on January 31.

Indonesian coal (5900 kcal GAR) prices remained firm at $75.4 per ton fob on February 15 compared to $74 per ton fob on January 31. Prices of Indonesian coal (5000 kcal/GAR) also rose marginally to $59.2 per ton fob on February 15 compared to $57.6 per ton fob on January 31.

The main reason for the muted price is oversupply in the Chinese thermal coal market as traders closed for the holiday season, the Lunar New Year break, amid sluggish demand from end-users, sources said.Australian prices

Australian thermal benchmark prices rose as heavy rains in the country’s east coast stoked

supply worries after two major coal producers declared force majeure on their deliveries.

But after a year in which global coal prices dropped due to plentiful inventories, some industry sources said concerns about a major supply shortage due to the rains were overblown.

Rio Tinto and Xstrata both declared force majeure on coal deliveries from Australia’s Queensland state after flooding shut a key rail link to ports which was reopened later on.

Rio Tinto declared force majeure on shipments out of its Kestrel coking and thermal coal mine, while Xstrata said only thermal coal shipments were affected.

But the fact that miners in Australia’s Hunter Valley, the country’s biggest thermal coal producing region, were not as hard hit, indicated that the impact on prices will be short-lived, market sources said.

Meanwhile, the supply shock dealt to the Australian thermal coal market by the weekend coal train drivers’ strike continued to reverberate, though its effect was muted by the absence of Chinese buying interest which kept Australian and Indonesian prices mostly stable, the sources said.

Australian producers and traders have mostly refrained from offering cargoes into the spot seaborne market, as they see little point in doing so without Chinese buying.

Imported steam coal prices move in narrow range

Indonesian spot trading

Trading activity in the Indonesian spot market was slow, and there was an expectation this would remain the case until Chinese buyers return to the fold.

Meanwhile, the continued crackdown by Indonesian authorities on illegal mining activity in South Kalimantan is starting to affect the export trade.

Nearly 70 percent of jetties in South Kalimantan have been closed due to the current crackdown on illegal mines, leading to disruptions in vessel loading, market sources said.

Steam coal FOB ($/ton)

Dates SOUTH AFRICA (6000 NAR)

AUSTRALIA (6300 GAR)

INDONESIA 5900 GAR

INDONESIA 5000 GAR

INDONESIA 4200 GAR

INDONESIA 3800 Kcal GAR

1 February 84.5 95 74.15 58.1 39.8 34

4 February 84.2 96.7 74.2 58.2 40 34

5 February 83.6 97.2 75.2 58.9 40.4 34.4

6 February 83.4 97.3 75.3 59 40.5 34.5

7 February 83.7 97.8 75.3 59 40.5 34.5

8 February 83.7 98 75.5 59 40.5 34.5

11 February 85 97.75 75.5 59 40.5 34.5

12 February 85 97 74.5 58.5 40.2 34.2

13 February 84.5 96.5 75 58.5 40.2 34.2

14 February 84.4 95.8 75.25 59 41 35

15 February 84 95.5 75.4 59.2 41 35

Indian environment notice to curb

Indonesian importsIndian power generators and coal importers have expressed shock at a recently-issued environment ministry notice declaring that ultra mega power projects (UMPP) will not receive environmental clearance if they use lower calorific value imported coal, effectively ruling out the use of Indonesian sub-bituminous material, market sources said.

“The proposals for environmental clearance of imported coal-based ultra-mega thermal power projects would be considered taking into consideration the following quality parameters of imported coal, namely gross calorific value (5,000 kcal/kg minimum); ash content (12 percent maximum) and sulfur content (0.8 percent maximum),” the notice issued by the ministry of environment and forests (MoEF) said.

The government has plans to build 16 UMPPs and has so far approved four projects through a competitive tariff based bidding process, under the public-private-partnership (PPP) scheme.

These are Mundra UMPP of Tata Power in the state of Gujarat, Sasan UMPP of Reliance Power in Madhya Pradesh, Krishnapatnam UMPP of Reliance Power in Andhra Pradesh and Tilaiya UMPP of Reliance Power in Jharkhand.


COAL mARkET funDAmEnTALs


Spot prices of hard coking coal in Australia maintained its firmness in February because of low availability of

the material from Mongolia and Australia but the rise in prices was somewhat restricted due to the Chinese New Year holidays, industry sources in India said.

The main spot buyer, China, was away on its week-long Lunar New Year break resulting in low demand conditions.

Both premium and standard-quality hard coking coal saw very limited movement. According to information available with Coal

Insights, the premium variety was quoted at $173 per ton fob Australia on February 13, up $3 per ton from $170 per ton on January 31. Peak downs prices firmed up to around $172.50 per ton on February 13, up from $169.50 per ton on January 31. The semi-soft variety was quoted at $125 per ton on February 13 compared to $122 per ton on January 31.

With China having accounted for more than three quarters of Asian spot coking coal deals so far in 2013, the country’s absence dramatically impacted activity levels. And while some spot appetite was observed in India, volumes being transacted remained limited.

Coking coal prices maintain firm bias in February

A derailment on the Blackwater rail system in Queensland shut the line for almost a week, just two days after it had reopened following heavy rains in late January. This, however, did not affect buyers’ behavior in any significant way, miners said, implying no new spot demand had been created by the extended rail disruption.

Contractual negotiations

With time on their hands, market participants speculated about the outcome of the April-June 2013 quarterly contract negotiations, which are set to take place over the next two or three weeks.

Suppliers cited recent strength in spot prices as evidence of improved demand, and universally predicted an increase in term prices from the $165 per ton fob price struck for January-March 2013. A price of $175 per ton was commonly forecast.

On the buy-side, while some buyers hoped for a rollover in prices, most appeared hopeful of a small increase from last quarter.

Met coke demand

Despite slight improvement seen in imported metallurgical coke prices during January, the price of both imported and domestic material continued to remain subdued on sluggish demand from steel makers in February.

The price of imported met coke eased by around $2 per ton to $300 per ton as on February 13 compared with around $302 per ton as on January 31, as per information available with Coal Insights.

According to a coke maker in India, the price of sized met coke is currently quoted between `18,000 and `20,000 per ton, depending on quality.

The offers for metallurgical coke from Chinese traders have started coming in from the middle of January after the government in that country decided to withdraw 40 percent export duty on the material, an official of an Indian coke manufacturer said.

“The offers from China has started coming or at least people are now offering Chinese coke,” the official said.

“But I don’t think China will export too much of met coke and even if it export in large quantities, the prices would not fall below $290 a ton,” the official added.

Coking coal FOB Australia ($/ton)

Dates

Peaks Down (CSR 74%, VM-20.7%,

Ash-9.7%, S-0.6%, P-0.03%, TM-9.5%)

Prem Low Vol (CSR-71%, VM-

21.5%, Ash-9.3%, S-0.50%, P-0.045%,

TM-9.7%)

HCC 64 Mid Vol (CSR-64%, VM-

25.5%, Ash-9.0%, S-0.6%, P-0.050%,

TM-9.5%)

Semi Soft Coking Coal Met Coke

22 January 167.5 168 153 117.5 302.00

23 January 168.5 169 153.3 118.5 302.00

24 January 169.5 170 155 120 302.00

25 January 169.5 170 155.5 121.5 302.00

28 January 168 168.5 154.6 121.5 302.00

29 January 168.5 169 154.6 121.5 302.00

30 January 169.5 170 154.5 122 302.00

31 January 169.5 170 154.5 122 302.00

1 February 172 172.5 156.5 125 302.00

4 February 172 172.5 156.5 125 302.00

5 February 172.5 173 156 125.5 300.00

6 February 172.75 173.5 156 125.5 300.00

7 February 172.75 173.5 156.5 125.5 300.00

8 February 173 173.5 156.5 125.5 300.00

11 February 173 173.5 156.5 125.5 300.00

12 February 172 172.5 155 125 300.00

13 February 172.5 173 155 125 300.00

14 February 172.5 173 155 125 298.00

15 February 172 172.5 155 123.5 298.00


Rakesh Dubey

In what could signal a price spiral in the energy sector, the government’s decision to hike diesel prices has prompted an

increase in domestic coal prices in India. Although Coal India Ltd, the major supplier of the dry fuel, has so far shown restraint, Singareni Collieries Company Ltd (SCCL) announced a hike across various coal categories. Bharat Coking Coal Ltd (BCCL), the coking coal mining subsidiary of CIL, has also revealed its plans to go for a revision in coking coal contract prices.

Industry analysts, however, said the coal price scenario in India has remained largely sedate in the last one year. Even though SCCL has increased its price, there is not much to worry about. That is because CIL, in spite of having valid ground to go for another round of price increase, may not really opt for it.

“The price rise by SCCL will have only limited impact. If CIL does not increase prices, there will not be any substantial impact on consuming sectors,” an analyst said.

CIL increased its prices in 2011 and 2012. The last increase resulted from the shift to Gross Calorific Value (GCV) based pricing and came into effect on January 1, 2012.

SCCL hikes fuel surcharge

SCCL, a state-owned coal miner, has hiked its fuel surcharge levied on coal prices by `65 per ton with effect from January 18, 2013, a company spokesperson told Coal Insights.

The fuel surcharge was increased from `86 per ton to `151 per ton to offset the negative impact of bulk diesel price hike by oil companies.

The increase in prices will be applicable to all grades of coal and for all kinds of sale orders including e-auction and cost plus. Also, the price difference for all pending orders (date of delivery on or after January 18) will be duly adjusted.

Earlier, SCCL had increased the fuel surcharge from `48 per ton to `86 per ton with effect from September 14, 2012.

According to industry sources, the latest hike in fuel surcharge will lead to around 2-8 percent increase in prices for various grades of coal supplied by the miner.

CIL shows restraint

CIL chairman S. Narsing Rao, when asked to comment on SCCL’s move, said there is

no proposal to increase coal prices despite the roughly `12 per litre hike in bulk diesel prices from January 2013.

“Obviously our cost of production has gone up following increase in diesel prices for bulk consumers, but at the moment there is no proposal to increase coal prices,” Rao said after announcing CIL’s third quarter physical and financial performance in

fEATuRE

Kolkata.He said with every `1 increase in diesel

prices, the company’s production cost goes up by around `120 crore and with `12 per litre hike announced in January 2013 on the back of nearly `4 per litre increase announced earlier during 2012-13, CIL’s cost of production is likely to go up substantially

during the last two months of the financial year.

According to a rough estimate, CIL’s production cost increase on account of diesel price hike in February and March alone, would be around `240 crore

Asked if the company is planning to collect fuel surcharge from its consumers to offset the impact of increased diesel prices as has been done by SCCL, CIL’s director (finance) A. Chatterjee said, “We are not thinking along this line at present.”

Commenting on the issue, the analyst said, “We don’t think CIL will go for another round of price increase in the near term. The company had raised prices last year. That round of hike helped it to absorb the increase in wage costs. Currently, the company is comfortable with its finances and, in our view, may not go for any hike right away.”

In fact, as of December 31, 2012, CIL had a total cash reserve of ̀ 65,325 crore. The company posted a 8.85 percent growth in its consolidated net profit for the third quarter of 2012-13 to `4,395.11 crore compared to `4,037.76 crore in the corresponding period previous year.

The company reported a 10.84 percent rise in its consolidated net profit for the nine months ended December 31, 2012 at `11,942.45 crore compared to `10,774.79 crore during the same period last year.

“The increase in profit was achieved without any increase in coal prices and only on a sizable increase in volume growth,” Rao said.

There, however, remains a mild concern

SCCL hikes coal prices, CIL may not follow suit


over any possible retort from the minority shareholders, especially The Children’s Investment Fund (TCI), UK, which sued the government and the company and dragged its directors to court for rollback on price rise last year.

BCCL demands higher price from SAIL, RINL

Meanwhile, BCCL, which supplies coking coal to Steel Authority of India Ltd (SAIL) and Rashtriya Ispat Nigam Ltd (RINL) under a Memorandum of Understanding (MoU), has demanded around 10 percent increase in price of its material from this year, a top official of the company told Coal Insights.

“We have asked SAIL and RINL to increase the price of our coking coal as we have brought in significant improvement in quality of our material because of washing etc.,” the official said.

BCCL is currently supplying coking coal to SAIL at a discount of 30 percent to international coking coal prices and the company has sought to supply the material at 20 percent discount to international coking coal prices because of significant improvement in the quality, he said.

BCCL supplies around 2-3 million tons

per annum (mtpa) of coking coal to steel majors like SAIL and RINL.

The official said that till 2010, the supply of coking coal by BCCL to SAIL and RINL was not linked with international prices, but from 2011 onwards, the coal miner had linked the prices with international benchmark prices.

“As our coking coal had inherent high ash content, it was agreed that we will sell the

material under MoU to steel makers at 70 percent of the benchmark international prices. But this year we have told them that our quality has improved since then because we are now doing more of washing and thus the price should also be increased to 80 percent of the benchmark international prices,” the official added.

“This will be discussed and the final agreement will be signed soon,” the official added. Industry sources said that the steel makers will take a huge hit if the price of coking coal is increased by BCCL, especially at a time when benchmark quarterly contract prices are falling because of low demand world over.

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CIL’s no to Steel Ministry’s moveThe steel ministry has called for the auctioning of all unused coking coal mines in the country to steel makers in view of the paucity of the fuel, triggering sharp reactions from Coal India Ltd.

In its revised draft National Steel Policy 2012, the steel ministry has proposed that Bharat Coking Coal Ltd (BCCL), which is the custodian and operator of coking coal mines, should be de-merged from its parent firm CIL and its idle mines should be offered to home-grown integrated steel plants for commercial exploitation, with suitable terms and conditions.

At present, BCCL operates 81 coal mines, including 40 underground, 18 opencast and 23 mixed mines. It has registered over 30 million tons (mt) of coal production and has targeted nearly 40 mt by the end of the 12th Plan period. The company, which is a subsidiary of CIL, was declared sick in 2009.

Both the coal ministry and CIL see “no merit” in the steel ministry’s proposal, claiming, instead, that steel PSUs like SAIL or Rashtriya Ispat Nigam Ltd or even their private counterparts do not have the technological wherewithal to operate underground mines.

“How does the de-merger help the steel firms? Do they have the technological strength for operating these mines, especially the underground ones, most of which are in the BCCL zone? They do not mind spending crores of rupees for importing coking coal, but shy away from investing money to set up washeries back home,” CIL chairman S. Narsing Rao said.

BCCL CMD Tapas Kumar Lahiry said his company has a target to produce nearly 40 mt by 2016-17, which it further plans to increase to nearly 50 mt by 2019-20. “First of all we do not have any idle coking coal mine. There is no credible reason to keep any mine idle if it can be made operational for production. Where is the question of BCCL having idle mines?” he asked.

“We have told these steel companies a number of times to invest in washeries because they need washed coal, but they have not ventured ahead. We are already operating two washeries and the third is slated to operate soon. We are trying our best within our limitations,” Lahiry said.

He said it is because of the apathy of steel companies that the coal ministry had earlier warned of auctioning their contracted coal, which are lying at the pitheads.

According to a rough estimate, CIL’s production cost increase

on account of diesel price hike in February and March alone, would

be around `240 crore

* See Annexure on Pg 64 for SCCl’s new price.


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Mining sector impasse pulling down India’s industrial growth


The prolonged deadlock and raging controversies over India’s mining sector expansion is taking its toll

on the country’s industrial growth, and in turn the GDP growth numbers. While the policymakers are seriously concerned at the recurring negative growth in the Index of Industrial Production (IIP) and a fall in GDP growth, little focus is being trained to ensure positive growth in mining activity.

The mining and quarrying sector has a weight of 141.57 (14.1 percent) in the General Index, the second highest after manufacturing. Although the manufacturing sector has a substantially higher weight of 755.27, its increased linkage with mining is making the economy vulnerable, experts said.

“Shortage in energy fuels as well as other raw materials necessitates imports at higher costs. Be it coking coal or lead or crude oil, imports put pressure on margins. This, coupled with slack demand conditions, lead to reduced growth or negative growth in production,” they said.

Along with the indirect influence, the mining sector and energy fuels have a direct

impact on downstream industries like coke, refined petroleum products and basic metals which are listed as separate groups in the

General Index and have individual weights. If the mining sector’s performance dwindles, so does the performance of these industries, in turn pulling down the General Index.

On the whole, the mining sector

accounts for around 3 percent of India’s GDP. However, the indirect impact on user segments make mining performance a crucial element in overall economic growth, the experts said.

Last but not the least

According to data released by the Central Statistical Office (CSO) of the ministry of planning and programme implementation, the mining and quarrying sector has put up the worst performance among the major sectors, having a weight of 100 or more in the General Index.

This is evident from the monthly growth performances during the nine months ended December 2012. Out of the nine months, the IIP General Index has shown negative growth in six months and the manufacturing sector witnessed a drop in five months, while mining & quarrying has declined in eight months. Only in October, the sector reported a flat growth.

In December 2012, the mining and quarrying sector suffered a negative growth of 4 percent, while manufacturing posted 0.7 percent decline and General Index dropped by 0.6 percent.

On a cumulative basis, the mining sector posted a negative growth of 1.9 percent during the nine-month period (April-December) vis-à-vis last year. This again was worse than a 0.7 percent increase in manufacturing and a 0.7 percent growth in General Index.

A small consolation could be that the

141.57

755.27103.1672.7661.64

67.15

100.59

113.35339.76 Mining & Quarrying

Manufacturing

Electricity

Food products & beverages

Textiles

Coke, refined petro products etc.

Chemicals & chemical products

Basic metals

Others

Weight of different sectors in General Index

Source: CSO

-6

-5

-4

-3

-2

-1

0

1

2

3

Apr May Jun Jul Aug Sep Oct Nov Dec

Growth rate in mining & quarrying in 2012 (% y-o-y)

Source: CSO


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current year’s performance in mining has been a shade better than the 2.6 percent decline posted during April-December 2011, the data showed. In 2011-12, the mining sector was the largest contributing factor in lowering the overall GDP forecast. In 2010-11, however, the sector achieved a 5 percent growth as the GDP achieved over 8 percent rise.

Commenting on the current year’s performance, a coal industry source said, “The fall in mining growth this year is primarily because of lack of growth in minerals and ore, as coal production has shown steady growth in recent months. Hopefully, once the government takes a decisive stand on iron ore and production rebounds, the trend will reverse.”

Power sector growth slips

Unlike the mining industry, the electricity sector has posted positive growth in 2012-13. The sector reported an increase in production in each of the nine months ended December

2012. On a cumulative basis, electricity sector posted a 4.6 percent growth during April-December 2012 over the same period last year.

Industry sources said the power sector’s performance reflected the improvement in coal production in the country. However, the cumulative growth this year was still way below the 9.4 percent growth recorded during the same period last year.

On a month-on-month basis, the sector’s growth in December 2012 was 5.2 percent, nearly half the growth of 9.1 percent reported for December 2011.

The slower growth in electricity could be attributed to the general slowdown in the economy which reduces demand for power, the sources said. While there is nothing wrong in increasing the generation capacity, this alone cannot guarantee growth in generation. A healthy growth in overall industrial activity is a must, they said.

At the same time, the clearance obstacles facing mining and power sectors pose a

concern for future growth. As of now, there are about 25 major power projects which are stuck because of lack of coal linkages. Also, coal mining projects worth 69.6 million tons (of Coal India Limited) are stuck because of pending environment and forestry clearances.

Since all the sectors are inter-linked with each other, any individual sector’s performance tends to have a multiplier effect. However, since the core sectors hold the maximum weight, directly and indirectly, the government needs to train special focus on reviving growth in these areas through effective intervention.

“A good example of effective governmental intervention could be the Vajpayee government’s decision to go for massive spending on inter-state highway projects to tide over the then prevailing recessionary trends. The present government should also need to chalk out certain programmes and stick to fast implementation to bring back growth in the ailing core sector industries, especially mining,” the sources added.

Index of Industrial Production – Sectoral (Base: 2004-05 = 100)

Month Mining (141.57) Manufacturing (755.27) Electricity (103.16) General (1000.00)

2011-2012 2012-2013 2011-2012 2012-2013 2011-2012 2012-2013 2011-2012 2012-2013

Apr 128.4 124.8 176.1 173.0 146.0 152.7 166.2 164.1

May 130.9 130.0 174.5 179.0 153.3 162.3 166.2 170.3

Jun 123.5 122.1 184.0 178.1 144.3 157.0 171.4 168.0

Jul 124.1 119.7 177.4 177.4 152.1 156.3 167.2 167.1

Aug 115.0 114.6 171.7 175.8 149.4 152.2 161.4 164.7

Sep 108.8 111.2 177.4 174.6 144.1 149.7 164.3 163.1

Oct 122.6 122.6 165.9 182.2 152.1 160.5 158.3 171.5

Nov 128.8 121.7 177.8 176.8 145.6 149.1 167.5 166.1

Dec* 136.8 131.3 192.6 191.3 149.8 157.6 180.3 179.3

Jan 138.0 188.6 151.1 177.6

Feb 135.0 186.8 145.1 175.2

Mar 149.6 198.7 158.6 187.6

Average Apr-Dec 124.3 122.0 177.5 178.7 148.5 155.3 167.0 168.2

Growth over the corresponding period of previous year

Dec -3.3 -4.0 2.8 -0.7 9.1 5.2 2.7 -0.6

Apr-Dec -2.6 -1.9 4.0 0.7 9.4 4.6 3.7 0.7

* Indices for Dec 2012 are Quick Estimates. Note: Indices for the months of Sep ’12 and Nov ’12 incorporate updated production data.


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proactive policies. Efficiency improvement and energy conservation are the critical areas in achieving this objective,” he said.

He further added that India is closely following the global trends in adopting energy efficient technologies. The policy of government to have 100 percent super-critical technology based plants for additional capacity from Thirteenth Plan onwards in itself will bear testimony of the efforts in this direction. Having entered into international protocols for addressing climate change issues, it is all the more important for a country like India to address all areas of energy efficiency improvements irrespective of the sectors, he pointed out.

Passing the buck

For long, these complaints were made by the power utilities, the biggest consumer of coal companies, including CIL. A few months ago, NTPC even alleged that it was supplied a rake full of boulders. However, it is the generation companies that are currently facing the ire for shifting the burden of CIL’s inferior coal supplies on to consumers.

Consumer body Consumer Education Research Society (CERS) has lodged a complaint in this regard with the Gujarat Electricity Regulatory Commission (GERC). It alleged that electricity generation companies in the state are transferring the financial burden of receiving inferior coal on consumers by charging them illegally.

CERS urged GERC to direct generation companies to claim losses from CIL and other suppliers. The power generating companies in Gujarat have been receiving inferior quality coal from CIL which has reportedly led to 25 percent increase in the requirement of coal (from 0.6 kilogram per kilo watt hour to 0.75 kilogram per kWh). The losses thus incurred due to increased consumption are being offset by charging the electricity consumers, CERS alleged. CERS has further stated that power companies resort to this malpractice as they find it easier to pass on the buck to consumers than to recover their claims from coal suppliers.

Earlier, the generating companies collected a huge amount from consumers for 6 percent to 8 percent loss of coal in railway transit, but this has now been restricted to only 0.8 percent after the implementation of the Electricity Act.

Coal quality continues to draw flak


The inferior quality of coal supplied by the miners, including Coal India Ltd (CIL), continues to draw flak

from consumers and environmental groups alike, even as the government assured “steps” to tackle the menace. The industry, however, remains sceptical about any possible redress to this long standing issue.

Noting that coal quality has become a nagging concern for a large section of coal consumers, Coal minister Sriprakash Jaiswal said the ministry was working to address the same.

“The ministry of coal has been taking steps to improve the energy efficiency programmes including improving the quality of coal supplies for consistency of quality of coal being despatched to various consumers. The move of the Government towards adopting Gross Calorific Value (GCV) based grading and pricing of thermal coals in place of the earlier Useful Heat Value (UHV) based system is a step forward to improve the quality of coal as well as efficient use of coal in the country,” the minister said.

“In this direction, coal companies are also taking different steps for proper crushing, sizing and preparation of coal for

ensuring consistency in quality of supplies. However, we need to enhance use of washed coal particularly for power sector which is consuming almost 70 percent of the country’s coal production,” Jaiswal said.

However, industry sources pointed out that the problem of grade slippage has accentuated after the domestic coal miners shifted to GCV based system and the domestic coal prices witnessed a corresponding increase.

“This is perhaps so because now it is more profitable for a miner to supply lower grade coal for higher grades. Also, there is hardly any proper infrastructure for inspection and testing the quality of coal supplied,” the sources said.

The minister, meanwhile, said that environmental concerns and economic considerations are the main drivers for improving the efficient use of energy worldwide. “We should address the issue of Climate Change through various actions for emissions reduction. Prime Minister’s National Action Plan on Climate Change is a voluntary step in this direction. India has decided that is will reduce the emissions intensity of GDP by 20-25 percent by the year 2020 on a 2005 reference level through


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Mahagenco pulled up

While many of the generation companies are facing the consumers’ wrath, Mahagenco, the state-owned utility of Maharashtra, has invited trouble from the green brigade as well. Excessive emissions from Koradi and Khaparkheda power plants of Mahagenco have come under the scanner of environmental activists.

It has been alleged that Mahagenco plants rarely use coal whose fly-ash content is below the maximum permissible limit of 34 percent. In fact, an RTI activist has alleged that coal supplied to Koradi and Khaparkheda plants had over 50 percent ash content on an average. Also, on many days coal in Nasik plant had over 50 percent ash. The coal quality at Paras is marginally better.

Sudhir Paliwal of Vidarbha Environmental Action Group (VEAG) said that even China, which is infamous for pollution, did not use such high ash content coal. “If coal has such high ash content the emissions are bound to be far higher than permissible limit.

Moreover, the pollution control equipment of Mahagenco do not work properly and this exacerbates the problem. The company also illegally discharges sludge having high ash content into streams,” he rued.

Coinciding with this development, the Appellate Tribunal for Electricity (ATE), headed by a Supreme Court judge, has told it in no uncertain terms that coal quality was its responsibility.

Mahagenco had filed an appeal in ATE challenging Maharashtra Electricity Regulatory Commission’s (MERC’s) decision not to allow it to burden consumers for poor quality of coal.

While deciding the tariff for new 250 MW units of Paras and Parli power plants, the commission penalized Genco for not achieving minimum production efficiency. It rejected the company’s contention that poor coal was responsible for low generation.

MERC ruled that it had to enforce the condition provided in fuel supply agreements (FSAs) with coal companies and ensure that the coal quality was as per norms.

AAP calls for infra upgrade

Meanwhile, the Association of Power Producers (APP) has called for an upgrade of the coal-handling infrastructure in the country.

APP, which conducted a study on the existing set up, has sought the development of coal storage facilities on port premises, coastal-based coal preparation hubs, augmentation of rail routes on which coal is transported and the establishment of a specialised logistics agency to facilitate efficient sourcing and transportation of coal to various plants.

According to the study, only 114 million tons (mt) of imported coal could be absorbed by the domestic power sector. It also revealed that while the coal handling capacity of existing and planned ports in India appeared to be adequate, first mile connectivity of ports with the main railway network was still a concern.

Commenting on the issue, AAP director general, Ashok Khurana said there was an urgent need to improve coal logistics to handle both imported and domestic coal supplies meant to meet the demand from generation companies.

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India’s power generation in January 2013 stood at 78,298.06 million units (MU), up 2.32 percent from 76,525.80

MU generated in December, according to provisional statistics of the Central Electricity Authority (CEA).

The generation in January was significantly lower than the target of 81,560 MU, the data revealed.

The power generation in January 2012 or the corresponding month of previous financial year was 73,396 MU against the target of 73,377.66 MU, which means year-on-year generation was up.

The country’s power generation during the first ten months (April-January) of 2012-13 stood at 762,050.96 MU, down 1.27 percent compared with the target of 771,866 MU for the period, and up 4.76 percent compared with 727,427.57 MU generated during the corresponding period of 2011-12.

Of the total generation in January 2013, 69,036.45MU (63,175.41 MU in January

2012 ) was from thermal sector, 2,785.35MU (2,903.94 MU in January 2012) from nuclear sector, 6,428.45MU (7,190.33 MU in January 2012) from Hydro sector and Bhutan imports was 47.81MU (126.32 MU).

Capacity addition

A total of 814.5 MW of power generation capacity was added in India during the month of January 2013 taking the total installed generation of the country to 211,766.22 MW, the CEA data showed.

The capacity addition in December was only 15 MW.

With this, total power generation capacity added during the first ten months of 2012-13 (April-January) stood at 10,668.5 MW, as per CEA’s revised data.

During January, capacity addition in the thermal sector stood at 737.5 MW. However, for the hydro sector 77 MW was added whereas in case of nuclear sector, achievement stood at nil.

During the month, 800 MW was added at Mundra UMPP Unit-4 which was

commissioned on January 16, 2013 in Gujarat by Coastal Gujarat Power Limited (CGPL). Besides this, Teesta Low Dam III HEP Unit 1 & 2 were c o m m i s s i o n e d in West Bengal on January 30 and January 20, respectively by NHPC Limited. Chutak HEP Unit 4 with a capacity of 11 MW was commissioned in Jammu & Kashmir on January 28, 2013 by NHPC Limited.

India’s January power generation up 2.3% m-o-m

8%

4%

0%

88%

Thermal Nuclear Hydro Bhutan Import

Categorywise energy generation in January 2013 (in %)

Source: Central Electricity Authority

FSAs for 66 GW capacity to be signed in 2-3

months: ScindiaFuel supply agreements (FSA) between power utilities and coal miners are expected to be signed for around 66 GW capacity within the next two-three months, Jyotiraditya Madhavrao Scindia, Minister of State (Independent Charge), Ministry of Power, said

“Fuel Supply Agreements of close to 66 GW are likely to be signed in the next two-three months. Also work is in progress to set up an independent coal regulator and implement the process of price pooling through coal imports,” the minister said.

On the generation front, he said, “Targets for the Twelfth and Thirteenth Five Year Plans are 88 and 93 GW respectively. This will be primarily be driven by the private sector which will account for 55 percent of these investments by end of the Twelfth Plan. By 2032, we must have a portfolio of close to 800 GW.”

Speaking on the occasion, Anil Sardana, Chairman, CII National Committee on Power said, “We should try and maximise supplies from the Indian fuel suppliers and more importantly identify the basket of fuels that will be used by regulators for determining bulk tariff. On the distribution front, almost 85 percent of the electricity distriution is in the hands of the government where the discipline to ensure the discoms are run like a viable commercial entity is rarely seen.

It is therefore critical to declutch the regulators and move to regional rather than state regulators.”


However, during December, 15 MW was added at Bhawani Kattalai Barrage-III (Unit-I) in Tamil Nadu by TANGEDCO.

Critical coal stock

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

According to data available with Coal Insights, a total of 33 plants of the total 92 in the country were faced with critical coal stock position of less than seven days as on January 31.

The data further shows that out of the 33 plants facing ‘critical coal stock’ position, 18 were facing ‘super critical’ coal stock position of less than four

days.On January 15, out of the 32 plants

(out of 90 plants) facing critical coal stock position of less than seven days, 24 were facing ‘super critical’ coal stock position of less than four days. Plants in Maharashtra, Bihar, Tamil Nadu and West Bengal were the worst sufferers.

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0%9%

91%

Thermal Hydro Nuclear

Capacity addition in January 2013 (in MW)

Source: Central Electricity Authority

Capacity addition during FY13 and FY12 (in MW)

Months 2012-13 2011-12April 1760 735

May 1070# 550

June 2376 2224

July 950 1660

August 550 1200

September 870 786.5

October 1400 345

November 803 2807

December 15 1158

January 814.5 895

February 972

March 5482*

Total (Apr-Sept) 9794 6369

Total (Apr-March) 10608.5## 18814.5*

*As reported by CEA, the capacity for 2011-12 was increased by them to 20501.70 MW instead of 18814.50 MW. # CEA had earlier reported that capacity addition in May (2012-13) was 1070 MW, but it appears that the figures have been revised to 1130 MW.## As per the consolidated data provided by CEA, total capacity added during April-January 2013 period stood at 10668.5 MW although addition of individual month’s capacity addition figure shows the total April-January capacity addition figure to be 10608.5 MW.

EUROTIRE_COAL INSIGHTS_AD2.indd 4 12/6/11 9:43 AM


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Cement sector growth likely to be 5-8% in 2013

Sanjukta Ganguly

The cement sector in India, one of the core industrial sectors of the economy, is likely to face a sharp

slowdown in demand in the coming days and may register a growth of around 5-8 percent in calendar year 2013. This would be a rather modest performance if compared with the most of 2011-12 (FY12) when the sector witnessed double digit growth despite difficult economic conditions.

According to market analysts, the slow progress in infrastructure projects had started affecting the industry since 2008. In fact, since April 2008, cement production was primarily driven by activities in housing and commercial real estate. The following years witnessed diverse trends depending on demand from user segments.

The high growth rate in most of FY12 was driven by two factors: a low base effect and robust activity in realty sector.

FY11 was a bad year where the production growth had almost been negative. But the housing related activity and commercial real estate activity was very robust during the

year. From September 2010 to March 2012, housing sector loan rose by an average of 15 percent.

Commercial real estate credit grew by 16 percent between the period September 2010 and March 2012.

Post March 2012, loan to housing sector grew by a lower rate of 13 percent, a 3 percentage point fall, whereas commercial real estate had an incremental growth of around 5-6 percent.

In 2013, the analysts said, the overall production growth is likely to drop further due to slowing of industrial growth. The Index of Industrial Production (IIP) registered a marginal growth of 0.7 percent during April-December 2012 and the slowing trend is likely to continue in the coming quarters.

This coupled with the recent controversy over the imposition of penalty by the Competition Commission of India (CCI) on the bottomlines of major producers is expected to bring down the cement sector growth to around 5-8 percent in the current year, they said. Later on, however, demand may start picking up once the economic growth stabilises.

SECL cuts coal supply to Birla Corp


Normal operations of Birla Corporation Ltd’s cement plant at Satna and captive

power plant at Chanderia are likely to be affected to a great extent in February 2013 due to shortage of coal, an industry source said.

The coal supply shortage is likely to come up as the South Eastern Coalfields Ltd (SECL) has curtailed the quota of coal supply to Birla Corporation by two-thirds for the month of February 2013, the source said.

The company has Fuel Supply Agreement (FSA) with SECL for 479,000 tons per annum (tpa) coal for its cement plants and another 420,000 tpa for its captive power plant as per a long term linkage.

“SECL has given consent for only one-third of the quota for February 2013 against the FSA. This means the company will get only around 25,000 tons of coal in February against the projected supply of 75,000 tons as per FSA,” the source said.

The cut in FSA supplies was believed to be under instruction from Coal Controllers, a wing of the Ministry of Coal, as the company has been allotted a captive coal block and it has not yet started production from the same.

As per existing rules, a plant gets coal under tapering coal linkage till the block is developed.

The source, however, said that Birla Corporation had been allotted captive coal block for the proposed expansion of cement and power plants, but because of some miscommunication, the Coal Controller had asked SECL to supply coal to the company under tapering linkage instead of normal FSA.


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Service tax

The government has further toughened the scenario by imposing a service tax of 30 percent on the total chargeable freight inclusive of all charges like busy season charge, development charge, etc., the implication of which comes to 3.708 percent of the total freight charges.

Moreover, the busy season charge has been increased from 10 percent to 12 percent by the Railways.

Consequently, the transportation cost of cement, clinker, etc. by rail has become dearer with effect from October 1, 2012 which has put further pressure on the margins of the cement industry.

Signing of FSAs

According to a report by the Cement Manufacturers Association (CMA), there has been inordinate delay in signing of Fuel Supply Agreements (FSAs) against Long Term Coal Linkages sanctioned to cement plants.

The long term linkages (LTLs) were

sanctioned to cement plants long ago in November 2007 against which Letters of Assurance (LoAs) were issued in 2008.

However, there had been prolonged delay in signing the FSAs by the coal miners, especially the South Eastern Coalfields Ltd (SECL). This, in turn, has posed one of the major roadblocks for mainly the medium sized cement companies.

Diesel price hike

The government’s decision to hike diesel price for bulk consumers is likely to impact the non-integrated players, especially the smallest cement players who would have not got assured linkages or don’t have well-established fuel or power supply or the ability to generate it.

In contrast, the top five or six players are likely to experience only a very limited impact because of this ruling. “It would not be zero, but the impact would be limited,” said an analyst.

“For the medium sized players, the ability to pass on the price would be very

limited. They would be competing with well-established player who would not be hit by this specific cost item. So, one can actually see the bigger firms grabbing more market share possibly at the cost of smaller companies,” he added.

Demand might pick up

According to reports, the industry may look forward to an up-cycle, later this year, as demand picks up and economic growth rebounds.

Although cement prices across India are down 5 percent compared to last year after the CCI’s verdict on cartelisation, which will have an impact on earnings, higher utilisation levels should come to the rescue.

Bank of America Merrill Lynch (BofA-ML) expects pan-India capacity utilisation to improve from 71 percent in FY13 to 76 percent in FY15. Between FY10 and FY12, 110 million tons (mt) of capacity was added (on a base of 220 mt). However, over FY13-15, only 62 mt of fresh capacity addition is anticipated.


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spECIAL REpORT

Coal import may erode India’s forex reserves by 2020


India’s bulging coal import, if not restricted, may erode the country’s current foreign exchange reserves of $294

billion by 2020, according to an estimate by consulting major McKinsey & Co.

At the current rate of growth, India would need to import around 340 million tons (mt) of the dry fuel (300 mt for thermal coal and 40 mt for metallurgical coal) by 2020.

“This can create heavy pressure on India’s forex reserves. With present forex reserves base of USD 294 billion, India will need a cumulative of around $290 billion till 2020 to cover the coal import bill,” the consultancy firm said in a recent report ‘Global mining trends: Imperatives for Indian mining sector’.

“We have calculated the figures on the basis of an 8 percent growth in GDP. However, if the economy falters, this estimate may come down a little from the projected level,” said an analyst who was part of the team that prepared the report.

While the figures look to be on the higher side, a recent data published by the coal ministry points to a similar, risky scenario. According to minister of state for coal, Pratik P. Patil, India’s coal import bill touched $29 billion for the past three years. This figure was the combined expense for 245 mt of coal imported during the period and implied an average annual forex outgo of nearly $9

billion on coal import by the country.However, analysts estimate reportedly

indicate that the annual bill would shoot up to $18-20 billion per annum by 2017. This is based on the Planning Commission’s projection of 185 mt of yearly import of coal by the end of the Twelfth Plan (2012-17). The amount could go up further if there is significant uptrend in international coal prices, going forward.

Slowdown not to affect coal

Despite a slowdown in GDP growth, India’s coal demand is expected to remain robust, driven by high power demand and higher power purchase agreement (PPA) rates. However supply of indigenous coal is likely to be constrained and import requirement could reach 290 million tons per annum (mtpa) in 2016. Post that, some unlocking of supply in India is likely.

The Indian government has projected total capacity addition of 88,000 MW during the Twelfth Plan (2012-17) which would boost the coal demand further in the country. However, Coal India Ltd (CIL) has expressed its annoyance at the signing of fuel supply agreements (FSA) that far exceeds its projected increase in production. As a result, the gap in supply would remain robust, leading to higher and higher imports.

To go by McKinsey’s estimate, India’s thermal coal demand would increase to

around 1,350 mtpa by 2020, driven by high power demand and higher PPA rates. However even in 2020, supply is likely to fall short by 460 mtpa, which is about one-third the total demand.

While the domestic economy would not substantially affect

coal demand, the pricing in the international market may have some impact. According to analysts, in the non-coking coal market, seaborne market is expected to tighten by 2015 due to current depressed outlook.

Major countries are cutting back on thermal coal production and hence the market is likely to see undersupply of 40 mtpa in 2015–16. However, seaborne market will be balanced by 2020.

In coking coal, global coking coal demand growth is expected to slow to less than 3 percent per annum compared to around 6

293

293.5

294

294.5

295

295.5

296

296.5

297

$ b

n

Source: Reserve Bank of India (RBI)

India’s foreign exchange reserves ($ bn)

Seaborne thermal coal demand (in mt)

2011 2015 2020

India 72 165 225

Europe 132 152 142

China 161 206 261

Other Asia 321 361 419

Rest of World (RoW) 46 71 88

Total 732 955 1135

Seaborne thermal coal supply

2011 2015 2020

SSA 68 93 108

Russia 91 106 121

Americas 104 145 215

Australia 165 195 265

Indonesia 280 320 350

RoW 27 52 77

Total 735 910 1135

Coking coal domestic supply and imports

2011 2015 2020

SAIL & others 1 2 7

Tata 8 8 9

CIL 8 13 19

Net imports 24 32 43

Total 41 55 78

1. Others include several small private players like Electrosteel Castings, MESCO Steel, who have been allotted coking coal blocks for captive use

2. Assuming a 75 percent probability of CIL achieving 2012–17 growth target

Source: Ministry of Steel, McKinsey Integrated Steel Making Raw Materials Demand model Q3/2012


spECIAL REpORT

percent during the last decade. Significant capacity expansions in China, Australia, and new major producing regions (Mongolia, Mozambique) will ensure sufficient global supply. Indian coking coal demand is expected to be 85 mtpa by 2020. India’s share in seaborne demand will increase from 11 percent in 2011 to 18 percent in 2020 with imports doubling to reach 50 mtpa.

Impact on CAD

The bulging coal import bill, according to the analysts, would put significant pressure on India’s already worsening current account deficit (CAD). The increased forex outgo on coal would add to the oil import bill, making the economy vulnerable due to import dependence for two critical sources of energy required to run a growing economic system.

The recent worsening of CAD is attributed to the rising oil prices in the international market and a steady increase in gold import volume. According to official estimates, India’s CAD jumped to $78.2 billion (4.2 percent of GDP) in 2011-12 due to increased imports of gold and oil. In 2011-12, gold import stood at $62 billion while oil import surged 40 percent to more than $140 billion.

In coming years, increased import of coal would put further pressure on CAD. Along with coal, the McKinsey report said, India may also need to import iron ore by 2020.

“Iron ore demand will reach around 200 mtpa by 2020….While India’s demand growth is likely to remain robust, certain developments constraining supply are not very encouraging. Iron ore production and exports have sharply declined (30-50 percent) due to Supreme Court imposed mining bans in various states, and discussions around capping EC limits is likely to further constrain supply. There is a possibility that

India may have to import iron ore by 2020,” the report noted.

Unlock mining growth

To mitigate the growing imports and pre-empt substantial forex outgo, India needs to focus on unlocking the mining sector growth, the report said.

“There is a tremendous potential in unlocking India’s mining sector. Metals and mining sector can contribute $150 billion to GDP in 2020 if adequate support measures are provided. It has a potential to generate employment for additional 2.3 million people (both direct and indirect) by 2020, and contribute $40 billion to government revenue in 2020,” it added.

However, to revive the mining sector and capture its full potential, both the government and the industry need to take key measures.

The report recommended the following eight initiatives to ensure robust growth of the Indian mining sector:

♦ Declare mining as a strategic sector, which is critical to the nation’s manufacturing growth, creating employment in the hinterland, preventing drain of valuable forex, and propelling growth in some of the most backward states Implement progressive and enabling mineral policy to extract and use the mineral wealth (e.g., pass a progressive MMDR act, reduce permit delays in mineral grants, expedite coal block allocation);

♦ Build robust infrastructure (e.g., enhanced track capacity on key steel and iron ore corridors) to cater to increasing mining needs;

♦ Proactively address skilled mining labour gap by augmenting capacity in educational institutions and partnering with industry

and NSDC;

♦ Improve mining efficiency and productivity through use of technology and better operating practices;

♦ Galvanise all the stakeholders around mining (e.g., community on CSR and government on sustainable mining);

♦ Significantly ramp up investment in pre exploration and exploration to sustain and enhance the future growth;

♦ Embrace model sustainable mining practices and implement Sustainability Development Framework (SDF);

♦ Aggressively pursue select international assets and secure supplies as India has a significant untapped mining potential.

Key messagesIron ore » Total global iron ore demand driven

by China’s steel demand is expected to increase by 2.7 percent p.a. till 2020, with ~60 percent reliance on seaborne demand; likely scenario of oversupply

» Regulatory changes pose uncertainty to merchant and captive miners; India may need to import iron ore to meet demand

Non-coking coal » Seaborne market expected to tighten

by 2015 due to current depressed outlook. However, seaborne market will be balanced by 2020

» India’s thermal coal demand likely to increase to ~1,350 mtpa by 2020, driven by high power demand and higher PPA rates

» However, even in 2020, supply likely to fall short by ~460 mtpa, which is about one-thirds of the total demand

Coking coal » Global coking coal demand growth

expected to slow to <3 percent p.a. compared to ~6 percent p.a. during last decade

» Significant capacity expansions in China, Australia, and new major producing regions (Mongolia, Mozambique) will ensure sufficient global supply

» Indian coking coal demand is expected to be ~85 mtpa by 2020

» India’s share in seaborne demand will increase from 11 percent in 2011 to 18 percent in 2020 with imports doubling to reach ~50 mtpa

Source: McKinsey analysis

6

7

8

9

10

11

12

13

14

15

60

65

70

75

80

85

90

95

100

105

2009-10 2010-11 2011-12

Fore

x O

utg

o (

in $

bn

)

Imp

ort

Volu

me (

in m

t)

Import volume Forex outgo

Coal import volume and bill


TEChnOLOgy

Dr P K Banerjee & Dr Pratik Swarup Dash

Researchers at Tata Steel India have developed a breakthrough technology that will produce clean coal having

just 8 percent ash from the as-mined coal of its own mines which contains 30-35 percent ash.

In order to maintain high productivity in their blast furnaces, Indian steel companies are forced to import low ash coking coal. This is because the coking coal available in domestic mines contains as much as 30 to 35 percent of mineral matter which is finely disseminated in the coal matrix and, therefore, difficult to remove in conventional washing processes. With the international price of premium coking coal going through the roof in recent years, the coal import option is hitting the cost competitiveness of Indian steel makers.

Tata Steel already imports half of its coking coal requirement for its Jamshedpur steelworks, despite owning mines in West Bokaro and Jharia in Jharkhand. Not only that, while the company is increasing its

capacity at Jamshedpur to reach 10 million tons per annum (mtpa), it also has a massive 6 mtpa greenfield plant coming up in Odisha that will substantially push up its need for coal. In order to maintain its competitiveness, the company has to source more of its coal needs in the future from its captive mines.

This has given an urgency to tackle the problem of high ash in domestic coal. A team from the R&D division of Tata Steel, led by Dr. P K Banerjee, commenced work a few years ago on a radically new method of removing the mineral matter in coal from the West Bokaro mine. This promised to yield coal of mineral content as low as eight percent, a significant i m p r o v e m e n t from the present

achievement of 13 to 15 percent ash in conventionally washed coal. This clean coal technology is the first-of-its-kind to be developed by an Indian company and promises low ash coal at a cost substantially lower than the price of imported premium coking coal. The project has now reached an advanced stage of pilot plant scale trials.

The seed for the new technology was laid

Dull grey to sparkling black

Fig 1: Possible with existing technology


TEChnOLOgy

in 2006 when the management, under the then Managing Director, B Muthuraman, looked for solutions to increase the productivity of captive mines amidst rising prices and demand. A baseline study was carried out for achieving the objective set by the management and, based on this study, a broad research strategy was developed.

The objective of the research programme was to develop a cost-effective beneficiation flow sheet, including new technologies for producing clean coal with eight percent ash, and yet maintaining current yield from the captive collieries. This could be either by changing the design parameters of existing processes or by developing the new technology. Achieving the ambitious target of eight percent ash level using the current physical washing techniques implemented at West Bokaro was not a practically viable option as it brought down the yield to a very low value of 10 percent (Fig. 1). Hence, the alternative was to develop a new technology based on chemical beneficiation.

The unique process flow sheet (Fig. 2) developed for this technology is mainly focused and designed to suit the peculiar

property of Indian coals having a high content of mineral matter finely disseminated inside the coal matrix. The process involves the use of chemicals which selectively react with and remove the dispersed mineral matter, leaving behind the clean coal. After obtaining encouraging results with this leaching process during laboratory and bench scale experiments, the Raw Materials & Coke Making (RM&CM) research group has designed, erected and commissioned a pilot plant (Fig. 3) at Visakhapatnam for further studying the process.

The pilot plant, with a capacity of 500 kg of feed coal per batch, has a dedicated utility section, reactors, a causticizer and a chemical reagent recovery unit. Coal slurry and reagents prepared in the feed preparation tanks are processed inside two

alkali reactors at atmospheric and elevated pressure followed by treatment inside two acid reactors. After the final treatment with acid, coal slurry is filtered and then washed with water to produce low ash clean coal. The filtrate is first regenerated/recycled and concentrated using a triple effect evaporator and then recycled. The plant is designed to operate using a PLC-based semi-automated control system.

Fig 2: Process flow diagram

mailto:saraogiudyog.eth.net


The pilot trial results show that the ash content of captive coals of Tata Steel can be reduced by about 60-65 percent with more than 70 percent yield without any deterioration in the coking properties. A few trial results with coal from the company’s West Bokaro mine are depicted in Fig. 4. Further, the newly-developed regeneration process yields very high efficiency of more than 95 percent regeneration compared with 80 percent achieved by the conventional regeneration using lime alone. This is a very important factor in the cost competitiveness of the process.

Experiments are being conducted on leaching physically washed coal as well as run-of-the-mine coal in order to establish the economics of the process. Using physically

washed coal as a feed, it is possible to produce leached coal with six percent ash, whereas with as-mined coal, the leaching yields coal with eight percent ash.

The existing washing process enables a yield of only 390 kg of clean coal of 13-15 percent ash from one ton of as-mined raw coal. The new technology promises to produce 700 kg clean coal with half the ash content (Fig. 5). This, in essence, means a doubling of mine life. At present, Tata Steel’s production capacity at its Jamshedpur works is 6.8 mtpa. It is estimated that even a one percent drop of ash content in the coking

coal from the captive mine, maintaining the same clean coal yield, could benefit the company to the tune of `100 crore per year due to reduced coke rate and increased blast furnace productivity. The overall economics of the leaching process as well as capital costs involved for a full-scale plant will be worked out after more pilot plant studies.

The technology

will also help Tata Steel achieve its target of reducing its carbon footprint from the present two tons of CO2 (carbon dioxide) emission per ton of steel produced to 1.5 tons by 2020. The leaching technology will enable this by producing low ash clean coal for coke, and by consuming CO2 for alkali reagent, regeneration and during the acid leaching.

As the chemical leaching process technology includes the regeneration of chemical reagents and conversion of waste into value added products, the waste discharge to the environment is negligible and hence environmental hazards associated with rejects generated during conventional physical beneficiation route can be eliminated. The waste materials from chemical coal cleaning process are environmentally benign. During chemical leaching of coal, alumino-silicates and pure silica are generated as by-products.

Alumino-silicates are utilised for making low-grade zeolite, which is used for agricultural applications as a controlled release fertiliser that offers considerable advantages.

TEChnOLOgy

Note: The article is reprinted with permission from the publishers of Tata Steel World.

Fig 4: Pilot results for different coal sources from West Bokaro Colliery

Dr P K BanerjeeChief ResearcherRaw Materials & Coke Making Research Group, R&DTata Steel Ltd

Dr Pratik Swarup DashPrincipal ScientistRaw Materials & Coke Making Research Group, R&DTata Steel Ltd

About the authors

Fig 3: Production area of chemical leaching pilot plant at Visakhapatnam

Fig 5: Difference that new technology is promising to yield


Jaypee Group looking to buy US, Australian steam coal


Jaiprakash Group (Jaypee), India’s third largest cement producer, is exploring the opportunity to bring in high sulphur,

high calorific value US steam coal as well as low calorific value Australian steam coal for its captive power plants (CPP) and cement making, a company source told Coal Insights.

Jaypee Groups’ cement production capacity as on September 2012 stood at 27.05 million tons per annum (mtpa), next only to Ambuja Group’s 49.98 mtpa and UltraTech Cement’s 48.75 mtpa.

“Currently we are bringing in RBCT coal for cement making, but we are exploring the opportunity to bring in US and Australian coal as well, besides buying domestic coal from e-auction,” the source said.

Jaypee Group currently needs around 4-5 mt of imported steam coal for cement making as well as for its captive power plants (CPP), almost in equal proportion, he said.

In 2013-14, the company is anticipating to bring in about 2 mt of imported coal for captive power plants and another about

3-5 mt for cement making as some new capacities are likely to be commissioned, the source said.

He said that the current price of US steam coal is quite competitive as they are comparable to RB1 or lower by about 10 percent.

“We are doing technical evaluation as to what type of US coal would be better for us as we are also using petroleum coke with sulphur of up to 6 percent. So probably in another six months we will be able to find out what type of US steam coal would be suitable for blending with pet coke and then we will start using such coal,” the source added.

“Obviously, the next logical thing would be to bring in Australian steam coal. We understand that a number of mines in Australia are coming up, which will supply 5,000-5,200 Kcal/kg GAR/NAR coal and as these mines come up, there will be pressure on RB2 coal of South Africa,” he said.

The source said that Jaiprakash started using petroleum coke very recently but over the last almost one year, it has purchased around 40,000 tons of pet coke month. “But

CORpORATE

with the new capacities coming in, our pet coke requirement will be about 0.6 to 0.8 million tons this year,” he added.

Deal for imported coal

Meanwhile, taking advantage of the current softness in South African coal prices due to absence of Chinese buyers, Jaypee Group on January 11 finalised a deal to procure a total of around 0.9 mt of South African coal.

“We had initially floated the enquiry for one cape size cargo, but as the prices were attractive a decision has been made to procure six cape size cargo, including one cargo of off-specification material of 5500 Kcal/kg NAR,” the company source said.

“The orders were placed with Visa Resources, Adani Enterprises and Swiss Singapore on February 11,” the source said.

According to information available with Coal Insights, the cement producer had placed the order for five cape size vessels of standard 6000 Kcal/kg NAR material at less than $93 per ton CFR. The order for 5500 Kcal/kg NAR material was placed at less than $83 per ton CFR.

The price of South African coal has been ruling soft for quite sometime now and was quoted on February 11 at $85 per ton fob for 6000 Kcal/kg NAR material and the freight rate for cape size vessel as on that date was around $11.50 to $12.00 per ton.

Considering the then prevailing price of South African steam coal, Jaypee appears to have got a good deal or managed to seal the


CORpORATE

deal at a discount of $3.50 to $4.00 per ton to the market price.

“The despatches of the material will start immediately and will be completed by April,” the source said, adding “Of the six vessels, four would be unloaded at Eastern Coast port of Gangavaram and one vessel each would be unloaded at Western Coast ports of Kandla and Navlakhi.”

Asked about their future procurement plants, the source said, “We will enter market at opportune time for new contracts.” The company had in November 2012 booked five capsize cargo of South African coal.

Indonesian coal

Earlier, it was learnt in late January that Jairprakash Associates is in the final stages of negotiation to purchase one Panamax cargo of low calorific value Indonesian steam coal, even as it is regularly visiting the market for quarterly purchases.

“The company is in talks with some traders, but is yet to finalise the deal for around 3800 Kcal/kg GAR coal from Indonesia,” a company official said.

The official further said that the company has not signed any bid deal in recent months after the one in late November 2012 for five Capesize cargoes of South African origin for delivery between January and March 2013.

“We will be regularly visiting the market not only for spot cargos, but also for quarterly contracts as we need around 4-5 million tons (mt) of imported coal annually,” he said and added that the company will be looking to procure one or one and a half Panamax vessels every month during the current year.

Customs issue unlikely to affect importMeanwhile, the recent imbroglio over classification of steam coal either as bituminous coal or coking coal for collection of customs duty or countervailing duty (CVD) is unlikely to affect India’s coal imports, officials of three cement companies told Coal Insights.

The Customs department, based on an initiative by the Directorate of Revenue Intelligence (DRI), had recently asked Shree Cement Ltd to pay CVD on higher assessed price of US steam coal imported by it.

In fact, the steam coal from the US was assessed as coking coal and thus the cement maker had to pay a differential CVD of around Rs 16 crore on two cargos of US steam coal imported through Navlakhi port.

Coal Insights learnt that it is not only Shree Cement which was forced to pay differential duty, but other cement companies like ACC, Ambuja Cement as well as leading supplier Adani Enterprises have been issued notices to pay high CVD.

“It all started at ports in Gujarat, but it is just a matter of time when all ports would get affected as customs officials will start demanding either higher CVD of 6 percent or customs duty of 5 percent and the CVD if the material is qualified as bituminous coal,” the official said.

“The problem is of classification of coal by customs department. Even as all steam coal is bituminous coal, the customs notification says that any coal with VM of more than 14 and calorific value of more than 5863 Kcal/kg would be classified as bituminous coal and a duty of 5 percent would be imposed in addition to CVD,” the official added.

However, an official of a leading cement maker with headquarter in Mumbai said, “Even if the ambiguity over classification of steam coal under Chapter 27 of customs notification is not solved, I don’t think India’s coal imports will be affected to a great extent.”

“There may be 5-10 percent fall in coal imports, but overall imports will not get impacted because domestic coal is not available in abundance in India,” the official said.

An official of a third cement company with headquarters in Delhi said that in view of the ambiguity on classification, there may be shift in Indian buying pattern as people would prefer buying 5500-5800 Kcal imported coal to avoid duty and if that happens overall imports may not get affected too much.

“In any case, there used to be 5 percent import duty on steam coal till very recently and still consumers were using imported coal because of shortage of indigenous material,” the official added.

International prices

International coal prices are likely to remain largely flat at around the current levels in the absence of any major demand trigger, the source said. “Chinese demand is unlikely to rise sharply and even in India, the demand is not that huge and thus prices are likely to move around current levels,” the source felt.

He pointed out that demand of imported coal from the sponge iron sector of India is subdued because the plants are either closed or operating at low capacities. That is happening due to high cost of iron ore and their inability to increase prices as the Indian steel industry is going through a lean phase.


CORpORATE


India’s largest coal miner Coal India (CIL) reported close to 9 percent rise in consolidated net profit for the third

quarter ended December 2012 at `4,395 crore on the back of higher coal sales.

The company’s net profit was at `4,037 crore in the corresponding period of the last fiscal, CIL Chairman S Narsing Rao said.

The consolidated net sales from operations of CIL for the period stood at at `17,325.04 crore, registering an increase of close to 12.8 percent over the year-ago period, he said. CIL’s net sales in the October-December period was at `15,349 crore, he added.

The total expenses of the company during the period also went up to `13,457 crore on account of higher expenses on employee benefits and others expenditure.

Wage bill rise was due to normal annual wage revision of employees and dearness adjustment which comes to 15 percent rise, Rao said.

The total production of the company during the quarter stood at 117 million tons (mt), registering an increase of 2 percent over the year-ago period. Coal offtake during the period also went up to 120 mt, as against 110 mt in the corresponding quarter of the previous year.

The coal PSU produced 114.6 mt in October-November period of last fiscal.

Rao said third quarter faced a decline in e-auction coal sales to 10.48 mt down 8.7

CIL performance highlights for Q3 & nine months

Particulars Oct-Dec 12 Oct-Dec 11 Growth Apr-Dec 12 Apr-Dec 11 Growth

Production 117.37 mts 114.62 mts 2.40% 308.91 mts 291.24 mts 6.10%

Coal off-take 120.45 mts 110.27 mts 9.20% 335.23 mts 310.25 mts 8%

Coal supplies to power utilities 90.64 mts 80.81 mts 12.20% 246.78 mts 222.14 mts 11.10%

Coal supply to NTPC TPPs 35.13 mts 29.91 mts 17.50% 94.98 mts 80.43 mts 18.10%

Average loading of rakes/day 190.3 171.8 10.80% 177.5 160.1 10.90%

Source: CIL

percent from the corresponding period last year sale of 11.48 mt. In the nine month period in 2012-13 the decline was 5.34 percent to 34.24 mt.

However, the realisation was higher at `2,647 per ton during the current fiscal compared to realisation of `2,497 per ton from e-auction coal sale in the corresponding nine months of 2011-12.

According to analysts, CIL’s better-than-expected performance for the December 2012 quarter was due to higher other income and lower tax rate.

Operating profit of `4,288 crore for the quarter was not only lower than expectations of `4,444 crore but lower than that of the December 2011 quarter of `4,554 crore, despite a 13 per cent rise in sales. Operating

profit margin fell from 29.7 per cent to 24.75 per cent during the period. Employee and welfare expenses, along with contractual expenses increased from `7,215 crore to `8,526 crore.

Despite the rise in cost, CIL has been prevented from taking a price hike in recent months due to reasons ranging from political to inability of its consumers to bear the increase. But, more than the results, the market is looking at the coal pricing issue, expected to be decided soon.

Reports say the government is considering pooling of prices of coal produced by Coal India and of imported coal. While independent directors, along with the second largest shareholder, The Children’s Investment Fund, are reportedly opposed to such a move, the outcome will decide the future movement of the stock.

The other factor that will influence the stock is the likely liquidity overhang, as the government plans to further dilute its stake in CIL to meet its divestment target in 2013-14. Sentiment could get a boost if CIL is allowed to offset cost pressures / higher cost of imported coal through price hikes and if it gets approval to start production at new mines.

CIL posts 9% rise in Q3 net profit on higher sales


CORpORATE


Sandvik Mining, a leading global supplier of equipment and tools, service and technical solutions for

the mining industry, has launched its first Cable Bolter ‘DS421’ in the Indian market. DS421, the next generation fully mechanized cable bolting rig in the mining industry, was launched at Rampura Agucha Mines of Hindustan Zinc Ltd (HZL), Udaipur.

Speaking on the occasion, Soumitra Banerjee, president, Sandvik Mining said, “Sandvik has always been recognised for its innovative calibre. DS421 is one of its best innovations for bolting products in the industry. The product is for sure going to upgrade the mining future.”

R.R. Kumar, vice president, HZL, said, “It has always been a pleasure to be associated with Sandvik Mining and we are really looking forward to this new innovation.”

Arjit Nirvan, Project Head, HZL RA-

UG Mines, further added, “DS421 is one of its kind. We are hoping that its automatic safe features will really simplify our operation.”

Sandvik DS421 is a self-contained efficient cable bolting rig for rock re-enforcement in underground mines and tunnels with small and medium cross sections. The product’s unique modular design simplifies training, operating and maintenance of the rig and helps in making it more efficient.

The product is exquisitely designed with the best of conventional and automatic method which can execute the whole operation safely by a single operator. Its innovative carrier layout specifically contributes in the safety of accessibility and sets a cutting edge in the industry.

The onboard instrumentation with depth measurement for whole length, cement hose and steel strand ensures high quality and integrity of cable bolts. DS421 is well equipped with automatic grout hose washing,

bolting head oiler, and easy mixer cleaning which helps in reducing the time involved in maintenance and also helps in the longevity.

On this commencement, Prabhat Mittal, VP UGHR Sandvik Mining, India said, “It’s really been a challenge for us; as DS421 is the first cable bolter which is sold by Sandvik. We hope it’s once again will make Sandvik proud for its innovation.”

The Sandvik Group is a global high technology enterprise with 50,000 employees in 130 countries. Sandvik’s operations are concentrated on five core businesses: Sandvik Mining, Sandvik Machining Solutions, Sandvik Materials Technology, Sandvik Construction & Sandvik Venture – areas in which the group holds leading global positions in selected niches.

Sandvik’s mining division focuses on global leadership on products, solutions and services for high-performing hard rock and soft rock underground and surface mining operations and is headquartered in Netherlands.

Sandvik Mining launches first Cable Bolter in India


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Siemens commissions gearless drive systems for belt conveyor in Peru


The Siemens Drive Technologies Division has commissioned a gearless belt conveyor system outside

Germany in the Antapaccay copper mine in Peru. The system is only the second of its kind in the world and the gearless drives will help to boost the efficiency and reliability of the conveyor system and cut down on maintenance requirements when compared with conventional systems.

The mine, which is 4,200 metres above sea level, belongs to Xstrata Copper and is scheduled to produce an average of 160,000 tons of copper-in-concentrate per annum in the initial years of its more than 20-year projected mine life.

Siemens’ scope of supply includes additionally the entire switchgears and gearless drive systems for a 40 ft SAG mill and two 26 ft ball mills with the associated power supply.

Gearless drive system for Antapaccay’s overland conveyor

The belt system in the Antapaccay copper mine was supplied by ThyssenKrupp and transports ore from the mine to the processing plant over a distance of around 6.5 km, according to an official communication from Siemens.

With a belt width of 1,370 mm and a conveyor speed of 6.2 metres per second, approximately 5,260 tons of ore can be transported in an hour. The first belt system with gearless drives was installed way back in 1986 by Siemens and ThyssenKrupp (previously O&K) in the Prosper-Haniel pit of Deutsche Steinkohle AG.

The Siemens drive system for the belt conveyor, which was commissioned on February 18, 2013, consists of two slow speed running synchronous motors, each with a power rating of 3,800 kilowatts, and the associated cycloconverters Sinamics SL150 and convertor transformers. Compared with

the combination of high-speed motor and gear units otherwise used in belt conveyor systems, this gearless drive solution offers a range of benefits.

The size of the motor is not limited by the size of gearbox available, thus eliminating the necessity to install multi-motor drives. The required belt driving power can be provided with one drive per drive pulley. This means that the number of switchgear enclosure could also be scaled down, saving space and weight.

The elimination of a whole series of mechanical and electrical components increases the reliability and efficiency of the overall system by between 3 and 4 percent.

Another important factor is that the maintenance requirements of the drive system have been significantly reduced. This is important as gear maintenance work alone can account for up to 5 percent per year of the original investment volume for the gears.

In addition, the company supplied the high-voltage and gas-insulated medium-voltage switchgear for the main distribution, as well as the low-voltage switchgear for the overall plant. The equipment enables safe and reliable power distribution under the harsh environmental conditions typical for high altitude mountainous regions – a decisive criterion for mining. The maintenance-free long-term operation of these products is also noteworthy.

Xstrata Copper, based in Brisbane, Australia, is part of Xstrata plc and operates mines and production plants in Argentina, Australia, Chile, Canada and Peru. The company is the fourth largest copper producer in the world. The Antapaccay copper mine in the south of Peru began production in the fourth quarter of 2012.

Siemens was entrusted with the conveyor belt project in 2010, having already been awarded the contract to supply the electrical equipment for three grinding mills of the mine in 2008. These have also been fitted with gearless drive systems.

In a separate release, Siemens said its Drive Technologies division was commissioned by CAP Mineria to supply the entire electrical system for the Cerro Negro Norte iron ore mine in the Chilean Atacama region.

The plant, situated about 700 km north of Santiago de Chile, is designed for an annual output of about 4 million tons of iron ore concentrate.


US coal production declined by 6.9% in 2012: EIA

Chandrika Mitra

US coal consumption is estimated to fall to 889.8 million short tons (MMst) in 2012 but might increase

to 922.2 MMst in 2013, according to the latest report by US Energy Information Administration (EIA). Coal consumption may further rise to 938.0 MMst in 2014.

EIA estimates coal consumption in the electric power sector at 824.3 MMst in 2012, the lowest since 1992. Lower natural gas prices paid by electric generators led to a significant increase in the share of natural gas-fired generation last year. Coal consumption in the electric power sector may increase over the forecast period, as electricity demand and natural gas prices rise, but might still remain significantly lower than the 1,003 million short tons (MMst) averaged during 2000-09. EIA expects that coal consumption in the electric power sector in 2013 and 2014 to be 858.7 MMst and 870.1 MMst respectively.

As estimated by EIA, coal production declined by 6.9 percent in 2012 to 1,020.5 MMst, due to a fall in domestic consumption. Coal production is expected to decline by an additional 1.2 percent in 2013 to 1,008.5 MMst because primary and secondary inventory draws and a small increase in coal imports will meet growth in consumption. Coal production is forecast to grow by 2.0 percent in 2014 to 1,028.2 MMst.

Coal trade

EIA estimates coal exports totaled a record 124 MMst in 2012. EIA expects coal exports to decline to 108 MMst in 2013 and 112 MMst in 2014 with continuing economic weakness in Europe which takes most of US coal exports, falling international coal prices, and increasing production in other coal-exporting countries. US coal exports could be higher if there are significant supply disruptions from any of the major coal-exporting countries.

US coal imports totaled 9.7 MMst in 2012 while imports might increase to 11 MMst in 2013 and to 10.8 MMst in 2014 as per the agency’s latest report.

Coal prices

Delivered coal prices to the electric power industry increased steadily over an 11-year period though 2011, when the delivered coal price averaged $2.39 per MMBtu which was a a 5-percent increase from a year earlier. EIA estimates that the delivered coal price averaged $2.40 per MMBtu in 2012, and

forecasts that the average d e l i v e r e d prices of coal might record around $2.41 per MMBtu in 2013 and $2.45 per MMBtu in 2014.

EIA in its February report expects changing market

conditions, including weaker domestic demand for coal and higher coal inventories, to slow increases in coal prices and contribute to the shut-in of higher-cost production.

Electricity

US residential electricity sales during December 2012 and January 2013 are estimated to have averaged 1.3 percent more than the same months a year ago. EIA is assuming that temperatures during the upcoming summer will be milder than last summer’s record-breaking heat that took total electricity consumption in the country to 10.45 billion kilowatt hours per day in 2012.

US cooling degree days during June, July, and August 2013 are expected to total about 13 percent lower than last summer and about 6 percent lower than the prior 10-year

average. EIA projects US residential sales of electricity during the upcoming summer will average 6 percent below the summer of 2012.

Overall, US residential electricity sales decline by 0.4 percent during 2013 to 3.75 billion kilowatt hours per day but then grow by 0.4 percent in 2014 to 3.76 billion kilowatt hours per day.

EIA expects total generation of electricity across all sectors will grow by 0.5 percent in 2013 and by 0.8 percent in 2014. EIA expects the share of generation fueled by coal to rise from 37.4 percent in 2012 to 39.1 percent in 2014.

Rising costs of infrastructure upgrades continue to drive increases in residential electricity rates, although lower fuel prices in recent years have kept growth in retail rates relatively modest. Retail residential electricity prices increased 1.3 percent during 2012 and EIA expects it to grow by 1.7 percent in 2013 and by 2.0 percent in 2014.

InTERnATIOnAL



Coal exports through Richards Bay Coal Terminal (RBCT) of South Africa, one of the world’s leading

coal terminals, rose by 5.88 percent in 2012 to 68,440,477 tons as compared to 64,638,515 tons in 2011. This rise was mainly on account of continuous increase in imports by India.

According to data available with Coal Insights, coal exports through the terminal witnessed a steady increase in successive months of 2012. Exports stood at 4,463,987 tons in January, increased to 6,087,111 tons in February and further to 6,339,413 tons in March.

However, in April, exports were down by 18.37 percent to 5,174,739 tons as compared to March. June coal exports out of RBCT stood at 5,454,166 tons up from 4,627,648 tons in May.

Overall, coal exports through the terminal during the first half (January-June) of 2012

stood at 32,147,064 tons, up 17.22 percent compared with 27,424,063 tons during the same period of 2011 attributed to sharp rise in export to India and China.

The second half of the year showed a diverse trend as export of coal from RBCT fell by 6.31 percent in August to 5,883,215 tons from 6,279,244 tons in July. Earlier, July exports were up 15.13 percent on month-on-month basis. Coal exports in September fell by 10.95 percent to 5,239,216 tons over August. In November, coal exports out of RBCT rose 16.76 percent to 6,496,279 tons from 5,563,800 tons in October while export in December also rose by 5.16 percent to 68,31,659 tons over November. The late pick up in the fourth quarter was driven by continuous increase in imports by India and China.

India imports 21.4 mt

India’s coal imports from RBCT soared to a record 21.45 million tons (mt) in 2012

from 16.13 mt in 2011 on the back of a record volume of 6.75 mt of coal imported in the fourth quarter of 2012 (October-December).

India’s coal imports from South Africa had fallen in 2011 from 20.99 mt in 2010, which was attributed to a firm price trend prevailing during the previous year.

The higher imports in 2012 was attributed to the softness in South African coal prices, especially during the period of September-December 2012, which led to a spurt in Indian imports during the last quarter to 6.75 mt. India’s imports during each of the three months of the fourth quarter stood above 2.0 mt, and peaked at 2.40 mt in December.

During the year, India accounted for 31.34 percent of the total coal exported through RBCT compared with a share of 24.95 percent in 2011.

India’s coal imports from RBCT rose by 27.28 percent to 9,609,558 tons during the first six months of 2012 compared with

RBCT’s coal exports touch 68.4 mt in 2012

InTERnATIOnAL


7,549,859 tons during the corresponding period of 2011 and accounted for 29.89 percent of total coal exported through the terminal between January and June 2012. The share was 27.53 percent during the same period of 2011.

Chinese imports down

Another major importer of South African coal, China witnessed a drop in coal imports from RBCT during the year.

China’s total coal imports during 2012 fell by 2.16 percent as compared to the quantity imported in 2011. Total coal imports by China from RBCT during 2012 stood at

12,920,328 tons, compared to 13,205,829 tons imported in the previous year.

During the first half of 2012, China’s imports of coal from RBCT stood at 6,427,118 tons, up 104.75 percent as compared to 3,138,987 tons imported during the same period of 2011.

Although China’s coal import from RBCT fell sharply in August and September, it rose for the third consecutive month in December.

The import of coal from South Africa’s RBCT by African and Asian countries, excluding India, fell slightly by 0.51 percent during 2012 and stood at 27,563,725 tons as

compared to 27,704,718 tons imported in 2011. Asian countries between January and June 2012 imported 14,950,559 tons of coal.

Coal imports during 2012 as compared the previous year were majorly up for countries like UAE, Taiwan, Pakistan, Morocco and Malaysia. While countries like Ethiopia, Maputo, Djibouti, Singapore and Kenya, which did not import any coal from the terminal in 2011, imported coal from RBCT in 2012; others like Sri Lanka and Lebanon, which imported coal in 2011, did not report any import last year.

Exports to Atlantic nations down

The export of coal from RBCT to Atlantic countries fell by 6.12 percent in 2012 as compared to the quantity exported in 2011.

The total exports from RBCT to Atlantic countries during January-December 2012 stood at 19,426,725 tons, down from 20,693,874 tons exported during the corresponding period of 2011.

The decline was attributed to lower imports by Denmark, Italy, Spain, UK, Mexico, France, Argentina and Romania. In contrast, imports by countries like Brazil, Israel, ARA, Greece and Turkey registered a handsome growth. Portugal and Belgium which imported coal from RBCT in 2011 did not bring in any coal in 2012.

Commenting on the yearly export performance, an official of a leading South African coal miner said, “We have finished the year with a positive story in December or you can say it was a bullish finish to the year as far as export to India and China is concerned.”

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

5,500,000

6,000,000

6,500,000

7,000,000

7,500,000

8,000,000

in to

ns

Total 2012 Total 2011

Coal exports from RBCT

China19%

India31%Asia &

Africa (except India & China)22%

Atlantic28%

Countrywise share of RBCT exports in 2012

Richards Bay port map

InTERnATIOnAL


EXpERT spEAk

CIL must use CSR as investment opportunity

J.P. Panda

Em p l o y m e n t generation will be a burning

need for Coal India in the coming years as it embarks on its production growth path. The minimum requirement of skilled

workmen for the coal industry by 2025 will be roughly 250,000 for a production target of nearly 1500-1600 million tons (mt).

Though it all looks very well on paper, the question is where the workforce will come from. Thus the core issue is bound to be employment and training for employment. Even if all the manpower is obtained from the different ITIs and polytechnics all over India, with the economy growing at 8-9 percent, there will be acute shortage of skilled manpower everywhere.

Coal India is likely to make a profit of nearly `15,000 crore per annum, out of which if 5 percent is earmarked for corporate social responsibility (CSR), it works out to `750 crore.

In the CSR policy of CIL, there are numerous heads like education, water supply including drinking water, health care, environment, social empowerment, infrastructure for village electricity/solar/pawan chaki, and sports and culture which can be covered by CSR activities, but unless the core issue of employment or employment generation is addressed, the money spent on CSR will be taken for granted by the villagers. And the company, in spite of spending the money, will hardly be able to enter new mine/project areas.

In this scenario, the only solution perhaps is to recruit only from the land losers and train them. If an honest effort is made, all the eligible land losers can be employed as the requirement, and that should address at least some of the huge need.

Along the way, it is essential to foster a healthy relationship with the villagers, without which a CIL project cannot succeed. The emotional bond that land losers have with their land cannot be snapped overnight with only the compensation. The future of the land losers must be addressed in a manner which is beneficial to both the company and the land loser.

Unless the land losers are trained and gainfully employed, they will carry a false notion that the job and salary offered to them is in lieu of the land is an honorarium and they are not supposed to work. Indeed many villagers who have been employed by the coal companies in lieu of their land holding, are taking home their salaries without working.

The notion that once the government has acquired the land and compensation has been paid, it is the business of the government to allow the coal mine/industry to run, is faulty. Also, this approach has failed completely.

Therefore the alternative is to win the faith of the land losers. However, this is easier said than done as the requirement differs from village to village. But one thing, that is common, is the demand for employment. This is the single most important need or the core issue for most land losers.

However, most of them are unskilled people and employing them is a problem. The solution thus is to train them in advance.

A socio-economic study can be conducted to find out the employable age group, their gender and their education standard and classify them into, say, graduates, intermediates, matriculates and non-matriculates. Similarly their skill levels can be classified as highly skilled, semi-skilled and non-skilled etc.

Training

Hostels must be built for villagers around all central workshops and the process must begin as soon as possible. All the employable

youth must be trained in different trades like dumper/shovel operators, fitter, mechanic, welder, driver, electricians and auto electricians, foundry shop moulders etc. depending on their education and skill levels.

Simulators can be used for training of HEMM operators. They are now available for training of dumper operators in this country.

If there is no central workshop, ITI/Polytechnic can be built with full workshop facilities like lathe shop, welder shop, electric shop, hydraulic shop, pipe fitting, masonry, carpentry, foundry and forging shop and auto electric shop. The hostel should preferably be in the campus itself.

The whole cost of an ITI complex will be around `10 to `12 crore. This infrastructure must be created for all land losers with guarantee for employment much in advance, that is, much before the project is started. Training them free of cost with hostel facility will keep the youth under control and their loyalty will be towards the company.

A similar strategy can be employed for women land losers as well. They can be trained in lathe, welding and motor rewinding. As far as my experience goes, I have seen a number of women workers trained in these skills and I feel they are fast learners and do their jobs seriously.

Some of the women were trained by CISF in BCCL as security staff and guards and they did a very effective job as a women’s force.

If central hospitals are nearby, the eligible women can be trained as nurses. Nurses’ hostels can be set up in all central hospitals and all those who are educated enough to be nurses can be trained. There is a huge demand for nurses both in India and abroad.

Training for self employment should also be one of the training programmes under the scheme, especially for women land losers.

Non land losers

As a CSR policy, CIL has already declared that 15 km radius of the project will be covered by CSR.

Therefore for the non land losers, for around 15 km around the project, the training facility can be extended without employment guarantee. For those around in the 15 km


zone, facilities can be created for ancillary industries relevant to the mother industry and an infrastructure fund can be created for ancillary industries out of the CSR fund.

Tieups with the entrepreneurs of the area for supply of spares and consumables is possible and loans may be given to the entrepreneurs against guarantees similar to banks. Even if a few default on the loan repayment, at least there will be no work stoppages, as is happening today on flimsy grounds.

Another vital aspect not included in the CSR is development module for the farmers who may constitute the bulk of people in the 15 km zone, whose main source of income is from agriculture which is dependent on guaranteed water resources.

Therefore creation of water reservoirs, canals and irrigation facilities will be highly appreciated by villagers. Coal India should develop water harvesting and irrigation modules for those villages dependent on agriculture only.

Agriculture module

As part of its CSR policy, the coal industry should prepare a blueprint for agricultural development around the area. It will be roughly a `10-crore water harvesting and irrigation module.

The suggested machineries are a back hoe shovel 1.5 -2.0 Cu m, one 350/400 HP dozer like of BEML D 155/355, four to five dumpers 6-8 cu m capacity each, one trailer for shifting the machinery from one location to other, two utility vehicles – one used for diesel filling and the other for the engineer and tents and other necessities for the crew.

The manpower required, roughly, will be

around 27 – one engineer, one foreman and one assistant foreman, two mechanics, two electricians, 15 operators and drivers and five non-skilled workers.

The above set of equipment will be exclusively used for development of ponds, water reservoirs, rain water harvesting schemes and irrigation facilities for the villages around the project.

Extension of this `10-crore module can be done for a large number of villages in a taluka and even a district. Retired Coal India employees on contract can be utilised for such a module as operators and mechanics. This module of development will be much

better than MGNREGA for providing water management and irrigation facilities. What MGNREGA workers cannot do in months the heavy earth moving equipment will do in hours and days.

Indeed my suggestion is to extend this module to all the coalfields of India. Ten such modules will cost only ̀ 100 crore, which is reasonable. The CSR funds available with Coal India is huge which can be effectively utilised by hundreds and thousands of villagers.

The quarry and underground water pumped out from the underground coal mines in India is in billions of gallons per hour, and this water can be used for irrigating the neighbouring villages.

The result will be fantastic as three crops can be harvested from the same field and the villagers will always be grateful. The only cost is the cost of pipeline, some water reservoirs and small irrigation canals which can be taken care of by CSR funds available with CIL.

Note: The views expressed here are those of the author and not of Coal Insights. The publication does not take any responsibility for the article in part or in full.

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. He is presently senior advisor at the Rampia Coal Mine project of Rampia Coal Mines and Energy Pvt Ltd. The author can be contacted at [email protected]

CIL CSR policy preamble

“Industry must be proactive in offering employment to the less privileged class at all levels of job ladder. In this regard focus should be given to the scheduled castes, scheduled tribes, other backward classes, minorities and women in the work force.

There should be proper investment for the people and their skills. Scholarships must be offered to promising young people. High rates of growth mean nothing for those who are unable to find employment. Investment must be there in skill building and education to make our youth employable. Indian industry must allocate sufficient resources to skill development, either managing it is or setting up a network of green field skill development centres across the country”.

EXpERT spEAk


http://mjunction.in/publications


LOgIsTICs


The 12 major Indian ports have handled 453.73 million tons (mt) of traffic during the first 10 months

(April-January) of 2012-13, about 2.86 percent lower than 467.09 mt recorded during the same period last year.

According to data released by the Indian Ports Association (IPA), the country’s major ports handled a total of 24.12 mt of coking coal in April-January period, up 0.24 percent as compared with 24.06 mt handled in the same period last year.

However, the movement of thermal coal through the major ports was up 15.60 percent

Traffic handled at major ports(During Apr-Jan, 2013* vis-a-vis Apr-Jan, 2012)

(*) Tentative (in '000 tons)

PortsApril to January traffic % variation against

prev. year traffic2013* 2012

Kolkata

Kolkata dock system 9609 10230 -6.07

Haldia dock complex 22793 26495 -13.97

Total: Kolkata 32402 36725 -11.77

Paradip 46610 45540 2.35

Visakhapatnam 49153 57943 -15.17

Ennore 14264 12064 18.24

Chennai 44336 47084 -5.84

V.O. Chidambaranar 23560 22915 2.81

Cochin 16536 16711 -1.05

New Mangalore 30494 26964 13.09

Mormugao 15934 31994 -50.20

Mumbai 48522 45151 7.47

JNPT 53765 55443 -3.03

Kandla 78154 68563 13.99

Total 453730 467097 -2.86

Source: IPA

to 47.60 mt during April-January, compared to 41.17 mt achieved in the same period last year.

Movement of iron ore through the major ports showed a significant drop of

54.68 percent in April-January due to restrictions imposed on mining and a hike in export duty on iron ore. The major ports together handled 23.67 mt of iron ore in the April-January period compared to 52.23 mt handled in the same period last year.

Vishakhapatnam port handled the highest volume of 10.01 mt of iron ore in April-January. This volume, however, was about 15.17 percent lower than the iron ore traffic moved through the port in the same period last year.

Movement of container traffic in terms of tonnage fell

in the April-January period, while that of TEUs also dropped during the period. The major ports handled 99.90 mt of tonnage and 6.43 million TEUs in April-January period compared to 100.59 mt of tonnage and 6.52 million TEUs in the same period last year.

Among the major ports, Paradip port had the distinction of handling the highest volume of thermal coal of around 17.30 mt in April-January period. Visakhapatnam port handled the highest quantity of 5.90 mt of coking coal during the period.

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

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

In terms of growth, Ennore port topped the list with 18.24 percent increase in cargo throughput. Paradip port’s growth was lowest at about 2.35 percent during the period. In terms of traffic volume, Kandla port clinched the top rank with a cargo volume of 78.15 mt recorded for the period.

The Mormugao port registered the highest decline of 50.20 percent in traffic handling during the period due to a fall in iron ore export.

Traffic handling by major ports down 2.8% in April-January


LOgIsTICs

freight traffic during January 2013 stood at `7,903.35 crore, up 5.49 percent compared with `7,491.74 crore earned in December.

Revenue from transportation of iron ore for exports, steel plants and for other domestic user in January rose to `670.85 crore, up 15.32 percent from `581.75 crore in December. The quantity of iron ore transported rose to 10.02 mt as compared to 9.46 mt in the previous month.

Revenue from transportation of cement in January stood at `745.23 (9.64 mt) as compared to `674.78 (8.72 mt) in December, while that from food grains transportation increased to `660.77 (4.65 mt) in January from `596.54 (4.24 mt) in December.

The Railways revenue from transportation of fertilizers in January rose to `485.74 crore (4.45 mt) from `480.23 crore (4.38 mt) in December.

Revenue from transportation of petroleum oil and lubricant (POL) in January stood at `425.52 (3.52 mt), while the same from pig iron and finished steel from steel plants and other points was `477.58 crore (3.2 mt). Revenue from container services was ̀ 360.54 crore (3.79 mt) and from transportation of other goods was `515.51crore (5.92mt).


The Indian Railways transported 46.12 million tons (mt) of coal in January 2013, up by 3.64 percent

from 44.5 mt in December 2012, according to information available with Coal Insights.

Railways’ revenue earnings from

transportation of coal also increased to `3,457.96 crore in January from `3,347.27 crore in December.

Overall, the Indian Railways’ revenue earnings from commodity-wise freight traffic rose month-on-month in January, mainly due to higher transportation of coal and iron ore. Revenue earnings from commodity-wise

Commodity-wise revenue

CommodityQuantity (in mt) Earning (in ` cr)

Jan’12 Jan’13 Jan’12 Jan’13

Coal

i) for steel plants 3.92 3.87 179.91 213.88

ii) for washeries 0.12 0.09 0.96 1.31

iii) for thermal power houses 28.11 29.57 1,809.14 2,403.92

iv) for public use 9.2 12.59 592.58 838.85

v) Total 41.35 46.12 2,582.59 3,457.96

Raw material for steel plants except iron ore 1.21 1.26 99.97 103.65

Pig iron and finished steel

i) from steel plants 2.49 2.47 342.76 410.88

ii) from other points 0.74 0.73 60.68 66.7

iii) Total 3.23 3.2 403.44 477.58

Iron ore

i) for export 0.32 0.49 90.2 127.07

ii) for steel plants 4.94 5.44 181.21 234.69

iii) for other domestic users 2.99 4.09 210.09 309.09

iv) Total 8.25 10.02 481.5 670.85

Cement 9.92 9.64 615.31 745.23

Foodgrains 4.24 4.65 434.18 660.77

Fertilizers 5.31 4.45 462.01 485.74

Mineral Oil (POL) 3.46 3.52 322.21 425.52

Container Service

i) Domestic containers 0.79 0.89 79.7 94.61

ii) EXIM containers 2.65 2.9 231.7 265.93

iii) Total 3.44 3.79 311.4 360.54

Balance other goods 6.62 5.92 460.96 515.51

Total revenue earning traffic 87.03 92.57 6173.57 7903.35

Railways coal handling up 3.6% in January


Similarly, the rail link between Gevra Road and Pendra Road was necessitated by the substantial growth in anticipated traffic and development activities in this area. At present, the movement of coal traffic is being done through Gevra Road and Champa Branch line.

Considering the additional traffic generated for coal from Sendurgarh, Hasdeo Arrand, Dipka, Gevra and Kroba coalfields of SECL, this additional rail link is required for smooth movement of coal. Gevra Road-Pendra Road link will also help meet the coal requirements of western Uttar Pradesh, Delhi, Haryana and Punjab, the statement said.

Two rail projects for coal movement cleared


The Cabinet Committee on Economic Affairs (CCEA) has approved the construction of two major railway

line projects in Chhattisgarh which would significantly improve coal transportation from the mines of South Eastern Coalfields Ltd (SECL), a subsidiary of Coal India Ltd.

The projects that have been approved are the construction of new broad gauge lines between Raigarh (Mand Colliery) and Bhupdeopur Railway Station, and between Gevra Road and Pendra Road.

The projects would cover a total distance of 184.7 km and involve a total investment of around `1,217.10 crore, according to an official communique.

The Raigarh-Bhupdepur line will be spread over 63 km and cost around `379.08 crore, whereas the Gevra Road-Pendra Road line will cover a distance of 121.70 km and is expected to cost around `838.02 crore.

Both the projects will be funded through a joint venture consisting of IRCON International Ltd. (a Railway PSU) and other stakeholders, namely SECL and the government of Chhattisgarh.

IRCON will spearhead the process of formation of a Special Purpose Vehicle (SPV) with 26 percent equity and the Chhattisgarh government will transfer government land free of cost. The state government will thus

participate with 10 percent equity, either through capitalisation of land or through cash contribution, and SECL will take the balance stake.

Both the projects are likely to be completed within the next five years or in the second year of the Thirteenth Plan period beginning 2017-18.

Power plants

The Mand-Raigarh coal belt is a virgin coalfield with reserves of mostly power grade coal and is strategically located to bridge the gap between demand and supply of coal to western India. The total geological reserve of the Mand-Raigarh coalfield is estimated at around 16,000 million tons (mt). This indicates that there is huge potential reserve suitable for opencast mining and there are prospects for sustained production growth in future.

Currently, the coalfield is connected by road. However, given the steep growth in demand expected for the Twelfth Plan period, it would not be possible to meet the growing demand by road only.

In view of this, the stakeholders felt it an absolute necessity to lay rail tracks to connect this coal belt. The new broad gauge link between Raigarh (Mand Colliery) and Bhupdeopur Railway station (on Howrah-Mumbai Main Line) is expected to be able to cope with the demand for additional traffic generated by SECL.

LOgIsTICs

Suggestions invited on rail terminals at

private portsThe Ministry of Railways has invited suggestions/comments on its proposed policy on ‘Rail Terminals at Private Ports’ from zonal railways and prospective investors, ministry sources said.

The draft policy formulated by the ministry is already available on the website of the Ministry of Railway (Railway Board), www.indianrailways.gov.in.

The objective of the policy is to set forth the framework of guidelines for the development of Rail Terminals and associated logistics facilities for cargo handling and other value added services at privately developed ports.

Such Private Port Terminals (PPT) will be permitted to handle all types of freight traffic transported in freight trains, container trains, privately owned special freight trains operating on Indian Railways system.

Connectivity from the nearest suitable railhead to the terminal will be provided as per the extant policy on the subject. The PPT will be a multi-user facility; therefore no separate co-use permission shall be required.


AnnEXuRE

ROAD MODE - MINE WISE REVISED PRICE LIST WITH EFFECT FROM 18.01.2013 (NOTIFIED PRICE LIST)

Mine name Mine code Grade GCV GR Basic Rom Sizing Total Premium Fixed royalty

Royalty on basic Rom price

Roylaty on premium

Stowing excise duty

Addl crushing charges

Forst land adjustment charges

Forest permit fee

Surface transport charges ( STC)

Addl. STC

Pre weigh bin charges

Fuel surcharges

Clean energy cess

Lifting charges ED Taxable

amount VAT 5% Total price with VAT 5% CST 2% Total price with

CST 2%GDK-1 2101 A-ROM G2 ROM 3733 0.00 3,733.00 746.60 0 522.62 104.52 10 0 15 10 0 0 0 151 50 0 317.56 5,660.31 283.02 5,943.32 113.21 5,773.51

KTK-1 2401 B-ROM G5 ROM 3319 0.00 3,319.00 995.70 0 464.66 139.40 10 0 15 10 0 0 0 151 50 0 306.29 5,461.04 273.05 5,734.10 109.22 5,570.26

KTK-2 2402 B-ROM G5 ROM 3319 0.00 3,319.00 995.70 0 464.66 139.40 10 0 15 10 0 0 0 151 50 0 306.29 5,461.04 273.05 5,734.10 109.22 5,570.26

KTK-5 2403 B-ROM G5 ROM 3319 0.00 3,319.00 995.70 0 464.66 139.40 10 0 15 10 0 0 0 151 50 0 306.29 5,461.04 273.05 5,734.10 109.22 5,570.26

KTK-6 2404 B-ROM G5 ROM 3319 0.00 3,319.00 995.70 0 464.66 139.40 10 0 15 10 0 0 0 151 50 0 306.29 5,461.04 273.05 5,734.10 109.22 5,570.26

KTK-8&8A 2405 B-ROM G5 ROM 3319 0.00 3,319.00 995.70 0 464.66 139.40 10 0 15 10 0 0 0 151 50 0 306.29 5,461.04 273.05 5,734.10 109.22 5,570.26

KONDAPUR: MNG 1309 B-CRR G5 CRR 3319 60.00 3,379.00 1013.70 0 464.66 141.92 10 0 15 10 0 45 0 151 50 8 314.30 5,602.57 280.13 5,882.70 112.05 5,714.63

VK-7 1103 C-RND G7 RND 1840 220.00 2,060.00 824 0 257.6 115.36 10 0 15 10 0 0 0 151 50 0 206.58 3,699.54 184.98 3,884.51 73.99 3,773.53

PK-1 1301 C-RND G7 RND 1840 220.00 2,060.00 1030 0 257.6 144.20 10 0 15 10 0 0 0 151 50 0 220.67 3,948.47 197.42 4,145.89 78.97 4,027.44

KCHP-MNG 1388 C-RND G7 RND 1840 220.00 2,060.00 824 0 257.6 115.36 10 0 15 10 45 0 0 151 50 0 209.28 3,747.24 187.36 3,934.60 74.94 3,822.18

RK-7 3403 C-RND G7 RND 1840 220.00 2,060.00 824 0 257.6 115.36 10 0 15 10 0 0 0 151 50 0 206.58 3,699.54 184.98 3,884.51 73.99 3,773.53

GDK-5 2103 C-RND G7 RND 1840 220.00 2,060.00 824 0 257.6 115.36 10 0 15 10 0 0 0 151 50 0 206.58 3,699.54 184.98 3,884.51 73.99 3,773.53

SRP3&3A 3407 C-RND G7 RND 1840 220.00 2,060.00 824 0 257.6 115.36 10 0 15 10 0 0 0 151 50 0 206.58 3,699.54 184.98 3,884.51 73.99 3,773.53

GK:OC 1104 C-CRR G7 CRR 1840 60.00 1,900.00 570 0 257.6 79.80 10 0 15 10 0 0 25 151 50 0 181.10 3,249.50 162.48 3,411.98 64.99 3,314.49

KCHP-MNG 1388 C-CRR G7 CRR 1840 60.00 1,900.00 570 0 257.6 79.80 10 0 15 10 45 0 25 151 50 0 183.80 3,297.20 164.86 3,462.06 65.94 3,363.15

MOCP 2108 C-CRR G7 CRR 1840 60.00 1,900.00 570 0 257.6 79.80 10 0 15 10 0 0 25 151 50 0 181.10 3,249.50 162.48 3,411.98 64.99 3,314.49

RK-8 3404 C-ROM G7 ROM 1840 0.00 1,840.00 552 0 257.6 77.28 10 0 15 10 0 0 0 151 50 0 174.77 3,137.65 156.88 3,294.54 62.75 3,200.41

VK-7 1103 C-SLK G7 SLK 1840 20.00 1,860.00 558 0 257.6 78.12 10 0 15 10 0 0 0 151 50 0 176.38 3,166.10 158.31 3,324.41 63.32 3,229.43

PVK-5 1101 D-ROM G9 ROM 1500 0.00 1,500.00 450 0 210 63.00 10 0 15 10 0 0 0 151 50 0 144.54 2,603.54 130.18 2,733.72 52.07 2,655.61

GDK:2A 2102 D-ROM G9 ROM 1500 0.00 1,500.00 450 0 210 63.00 10 0 15 10 0 0 0 151 50 0 144.54 2,603.54 130.18 2,733.72 52.07 2,655.61

RK-6 3402 D-ROM G9 ROM 1500 0.00 1,500.00 450 0 210 63.00 10 0 15 10 0 0 0 151 50 0 144.54 2,603.54 130.18 2,733.72 52.07 2,655.61

RK-5 3402 D-ROM G9 ROM 1500 0.00 1,500.00 450 0 210 63.00 10 0 15 10 0 0 0 151 50 0 144.54 2,603.54 130.18 2,733.72 52.07 2,655.61

SRP:1 3406 D-ROM G9 ROM 1500 0.00 1,500.00 450 0 210 63.00 10 0 15 10 0 0 0 151 50 0 144.54 2,603.54 130.18 2,733.72 52.07 2,655.61

GDK-11A 2107 D-CRR G9 CRR 1500 60.00 1,560.00 468 0 210 65.52 10 0 15 10 0 0 0 151 50 0 149.37 2,688.89 134.44 2,823.34 53.78 2,742.67

GDK-OCP-III-6 CHP 2291 D-CRR G9 CRR 1500 60.00 1,560.00 468 0 210 65.52 10 0 15 10 72.14 0 0 151 50 0 153.70 2,765.36 138.27 2,903.63 55.31 2,820.67

GDK:10A 2302 D-CRR G9 CRR 1500 60.00 1,560.00 468 0 210 65.52 10 0 15 10 0 0 0 151 50 0 149.37 2,688.89 134.44 2,823.34 53.78 2,742.67

JVR: OC: SATTUPALLI 1105 D-CRR G9 CRR 1500 60.00 1,560.00 468 0 210 65.52 10 0 15 10 0 0 25 151 50 0 150.87 2,715.39 135.77 2,851.16 54.31 2,769.70

DORLI:OC 3104 D-CRR G9 CRR 1500 60.00 1,560.00 468 0 210 65.52 10 0 15 10 0 0 25 151 50 0 150.87 2,715.39 135.77 2,851.16 54.31 2,769.70

SRP:OC2 3410 D-CRR G9 CRR 1500 60.00 1,560.00 468 0 210 65.52 10 0 15 10 0 0 25 151 50 0 150.87 2,715.39 135.77 2,851.16 54.31 2,769.70

COC:MNG 1302 E-CRR G11 CRR 1130 60.00 1,190.00 357 0 158.2 49.98 10 0 15 10 0 0 0 151 50 0 116.47 2,107.65 105.38 2,213.03 42.15 2,149.80

BPA:OC-II EXT 3102 E-CRR G11 CRR 1130 60.00 1,190.00 357 0 158.2 49.98 10 0 15 10 0 0 0 151 50 0 116.47 2,107.65 105.38 2,213.03 42.15 2,149.80

KHAIRGURA:OC 3103 E-CRR G11 CRR 1130 60.00 1,190.00 357 0 158.2 49.98 10 0 15 10 0 0 25 151 50 0 117.97 2,134.15 106.71 2,240.86 42.68 2,176.83

KK5 (3A) SECTION 3205 E-ROM G11 ROM 1130 0.00 1,130.00 339 0 158.2 47.46 10 0 15 10 0 0 0 151 50 0 111.64 2,022.30 101.11 2,123.41 40.45 2,062.75

JVR:OC 1105 F-CRR G13 CRR 690 60.00 750.00 300 0 96.6 42.00 10 0 15 10 0 0 25 151 50 0 83.98 1,533.58 76.68 1,610.25 30.67 1,564.25

KOY:OC-II 1204 F-CRR G13 CRR 690 60.00 750.00 300 0 96.6 42.00 10 6 15 10 0 0 25 151 50 0 84.34 1,539.94 77.00 1,616.93 30.80 1,570.73

MNG-IV LINE 1388 F-CRR G13 CRR 690 60.00 750.00 300 0 96.6 42.00 10 15 10 45 0 25 151 50 0 86.68 1,581.28 79.06 1,660.34 31.63 1,612.90

JK:OC 1202 G-CRR G15 CRR 510 60.00 570.00 171 0 71.4 23.94 10 0 15 10 0 0 0 151 50 0 61.34 1,133.68 56.68 1,190.36 22.67 1,156.35

KHAIRGURA:OC 3103 G-ROM G15 ROM 510 0.00 510.00 153 0 71.4 21.42 10 0 15 10 0 0 0 151 50 0 56.51 1,048.33 52.42 1,100.75 20.97 1,069.30

KOY:OC-II 1204 UNGRD G17 420 0.00 420.00 0 0 58.8 0.00 10 6 15 10 0 0 0 151 50 0 40.25 761.05 38.05 799.10 15.22 776.27

RGM (GLB)-WASHERY 2297 WG-D WG-G9 2778 0.00 2,778.00 0 207.15 0 0.00 10 6 15 10 72.14 0 0 151 71 0 194.96 3,515.25 175.76 3,691.01 70.30 3,585.55

MNG-WASHERY 1394 WG-D WG-G9 2778 0.00 2,778.00 0 207.15 0 0.00 10 0 15 10 15.46 0 0 151 71 0 191.20 3,448.81 172.44 3,621.25 68.98 3,517.78

MNG-WASHERY 1394 WG-R WG-R 738 0.00 738.00 0 0 0 0.00 10 0 15 10 15.46 0 0 151 0 0 56.37 995.83 49.79 1,045.62 19.92 1,015.74

RGM (GLB)-WASHERY 2297 WG-R WG-R 738 0.00 738.00 0 0 0 0.00 10 0 15 10 72.14 0 0 151 0 0 59.77 1,055.91 52.80 1,108.70 21.12 1,077.03

RGM WASHERY 2297 WG-SL WG-SL 427 0 427.00 0 0 0 0.00 10 0 15 10 72.14 0 0 151 0 0 41.11 726.25 36.31 762.56 14.52 740.77

MNG-WASHERY 1394 WG-SL WG-SL 427 0 427.00 0 0 0 0.00 10 0 15 10 45 0 0 151 0 0 39.48 697.48 34.87 732.35 13.95 711.43

Note: Pre-wighbin charges added at GK OC from 01.01.2013 and at Koyagudem (G13-CRR) from 03.01.2013

ZSNT RAIL PRICES W.E.F.18.01.2013

CHP Basic Sizing Basic total Premium Royalty variable SED Royalty on Pre Engine shntg

chgs + addl. cr FLS STC Forest permit charges PWB FSC Clean energy

cess ED Taxablae amount VAT 5% Total price with VAT 5% CST 2% Total price with

CST 2%RCHP G7 CRR 1,840.00 60.00 1,900.00 570 257.6 10 79.8 15 15 83 10 0 151 50 185.48 3,326.88 166.34 3,493.23 66.54 3,393.42

RCHP G13 CRR 690 60.00 750.00 300 96.6 10 42 15 15 83 10 0 151 50 88.36 1,610.96 80.55 1,691.50 32.22 1,643.18

YLD CHP G13 CRR 690 60.00 750.00 300 96.6 10 42 15 15 96 10 0 151 50 89.14 1,624.74 81.24 1,705.97 32.49 1,657.23

YLD CHP G15 CRR 510 60.00 570.00 171 71.4 10 23.94 15 15 46 10 0 151 50 65.00 1,198.34 59.92 1,258.26 23.97 1,222.31

KCHP IV Line G7 CRR 1,840.00 60.00 1,900.00 570 257.6 10 79.8 15 15 45 10 25 151 50 184.70 3,313.10 165.66 3,478.76 66.26 3,379.37

KCHP IV Line G13 CRR 690 60.00 750.00 300 96.6 10 42 15 15 45 10 25 151 50 87.58 1,597.18 79.86 1,677.03 31.94 1,629.12

KCHPII Line G11 CRR 1,130.00 60.00 1,190.00 357 158.2 10 49.98 15 15 45 10 25 151 50 121.57 2,197.75 109.89 2,307.64 43.96 2,241.71

GDK I CSP G7 CRR 1,840.00 60.00 1,900.00 570 257.6 10 79.8 15 15 72.14 10 25 151 50 186.33 3,341.87 167.09 3,508.97 66.84 3,408.71

GDK OC 3 CHP G11 CRR 1,130.00 60.00 1,190.00 357 158.2 10 49.98 15 15 72.14 10 25 151 50 123.20 2,226.52 111.33 2,337.85 44.53 2,271.05

RKP CSP G11 CRR 1,130.00 60.00 1,190.00 357 158.2 10 49.98 21 15 133 10 25 151 50 127.21 2,297.39 114.87 2,412.26 45.95 2,343.34

SRP CSP G9 CRR 1,500.00 60.00 1,560.00 468 210 10 65.52 15 15 90 10 25 151 50 157.17 2,826.69 141.33 2,968.03 56.53 2,883.23

RGM (GLB) WASHERY WG- G9 2778.00 0.00 2778.00 0 207.15 10 0 21 15 72.14 10 0 151 71 195.86 3,531.15 176.56 3,707.70 70.62 3,601.77


ROAD MODE - MINE WISE REVISED PRICE LIST WITH EFFECT FROM 18.01.2013 (NOTIFIED PRICE LIST)

Mine name Mine code Grade GCV GR Basic Rom Sizing Total Premium Fixed royalty

Royalty on basic Rom price

Roylaty on premium

Stowing excise duty

Addl crushing charges

Forst land adjustment charges

Forest permit fee

Surface transport charges ( STC)

Addl. STC

Pre weigh bin charges

Fuel surcharges

Clean energy cess

Lifting charges ED Taxable

amount VAT 5% Total price with VAT 5% CST 2% Total price with

CST 2%GDK-1 2101 A-ROM G2 ROM 3733 0.00 3,733.00 746.60 0 522.62 104.52 10 0 15 10 0 0 0 151 50 0 317.56 5,660.31 283.02 5,943.32 113.21 5,773.51

KTK-1 2401 B-ROM G5 ROM 3319 0.00 3,319.00 995.70 0 464.66 139.40 10 0 15 10 0 0 0 151 50 0 306.29 5,461.04 273.05 5,734.10 109.22 5,570.26

KTK-2 2402 B-ROM G5 ROM 3319 0.00 3,319.00 995.70 0 464.66 139.40 10 0 15 10 0 0 0 151 50 0 306.29 5,461.04 273.05 5,734.10 109.22 5,570.26

KTK-5 2403 B-ROM G5 ROM 3319 0.00 3,319.00 995.70 0 464.66 139.40 10 0 15 10 0 0 0 151 50 0 306.29 5,461.04 273.05 5,734.10 109.22 5,570.26

KTK-6 2404 B-ROM G5 ROM 3319 0.00 3,319.00 995.70 0 464.66 139.40 10 0 15 10 0 0 0 151 50 0 306.29 5,461.04 273.05 5,734.10 109.22 5,570.26

KTK-8&8A 2405 B-ROM G5 ROM 3319 0.00 3,319.00 995.70 0 464.66 139.40 10 0 15 10 0 0 0 151 50 0 306.29 5,461.04 273.05 5,734.10 109.22 5,570.26

KONDAPUR: MNG 1309 B-CRR G5 CRR 3319 60.00 3,379.00 1013.70 0 464.66 141.92 10 0 15 10 0 45 0 151 50 8 314.30 5,602.57 280.13 5,882.70 112.05 5,714.63

VK-7 1103 C-RND G7 RND 1840 220.00 2,060.00 824 0 257.6 115.36 10 0 15 10 0 0 0 151 50 0 206.58 3,699.54 184.98 3,884.51 73.99 3,773.53

PK-1 1301 C-RND G7 RND 1840 220.00 2,060.00 1030 0 257.6 144.20 10 0 15 10 0 0 0 151 50 0 220.67 3,948.47 197.42 4,145.89 78.97 4,027.44

KCHP-MNG 1388 C-RND G7 RND 1840 220.00 2,060.00 824 0 257.6 115.36 10 0 15 10 45 0 0 151 50 0 209.28 3,747.24 187.36 3,934.60 74.94 3,822.18

RK-7 3403 C-RND G7 RND 1840 220.00 2,060.00 824 0 257.6 115.36 10 0 15 10 0 0 0 151 50 0 206.58 3,699.54 184.98 3,884.51 73.99 3,773.53

GDK-5 2103 C-RND G7 RND 1840 220.00 2,060.00 824 0 257.6 115.36 10 0 15 10 0 0 0 151 50 0 206.58 3,699.54 184.98 3,884.51 73.99 3,773.53

SRP3&3A 3407 C-RND G7 RND 1840 220.00 2,060.00 824 0 257.6 115.36 10 0 15 10 0 0 0 151 50 0 206.58 3,699.54 184.98 3,884.51 73.99 3,773.53

GK:OC 1104 C-CRR G7 CRR 1840 60.00 1,900.00 570 0 257.6 79.80 10 0 15 10 0 0 25 151 50 0 181.10 3,249.50 162.48 3,411.98 64.99 3,314.49

KCHP-MNG 1388 C-CRR G7 CRR 1840 60.00 1,900.00 570 0 257.6 79.80 10 0 15 10 45 0 25 151 50 0 183.80 3,297.20 164.86 3,462.06 65.94 3,363.15

MOCP 2108 C-CRR G7 CRR 1840 60.00 1,900.00 570 0 257.6 79.80 10 0 15 10 0 0 25 151 50 0 181.10 3,249.50 162.48 3,411.98 64.99 3,314.49

RK-8 3404 C-ROM G7 ROM 1840 0.00 1,840.00 552 0 257.6 77.28 10 0 15 10 0 0 0 151 50 0 174.77 3,137.65 156.88 3,294.54 62.75 3,200.41

VK-7 1103 C-SLK G7 SLK 1840 20.00 1,860.00 558 0 257.6 78.12 10 0 15 10 0 0 0 151 50 0 176.38 3,166.10 158.31 3,324.41 63.32 3,229.43

PVK-5 1101 D-ROM G9 ROM 1500 0.00 1,500.00 450 0 210 63.00 10 0 15 10 0 0 0 151 50 0 144.54 2,603.54 130.18 2,733.72 52.07 2,655.61

GDK:2A 2102 D-ROM G9 ROM 1500 0.00 1,500.00 450 0 210 63.00 10 0 15 10 0 0 0 151 50 0 144.54 2,603.54 130.18 2,733.72 52.07 2,655.61

RK-6 3402 D-ROM G9 ROM 1500 0.00 1,500.00 450 0 210 63.00 10 0 15 10 0 0 0 151 50 0 144.54 2,603.54 130.18 2,733.72 52.07 2,655.61

RK-5 3402 D-ROM G9 ROM 1500 0.00 1,500.00 450 0 210 63.00 10 0 15 10 0 0 0 151 50 0 144.54 2,603.54 130.18 2,733.72 52.07 2,655.61

SRP:1 3406 D-ROM G9 ROM 1500 0.00 1,500.00 450 0 210 63.00 10 0 15 10 0 0 0 151 50 0 144.54 2,603.54 130.18 2,733.72 52.07 2,655.61

GDK-11A 2107 D-CRR G9 CRR 1500 60.00 1,560.00 468 0 210 65.52 10 0 15 10 0 0 0 151 50 0 149.37 2,688.89 134.44 2,823.34 53.78 2,742.67

GDK-OCP-III-6 CHP 2291 D-CRR G9 CRR 1500 60.00 1,560.00 468 0 210 65.52 10 0 15 10 72.14 0 0 151 50 0 153.70 2,765.36 138.27 2,903.63 55.31 2,820.67

GDK:10A 2302 D-CRR G9 CRR 1500 60.00 1,560.00 468 0 210 65.52 10 0 15 10 0 0 0 151 50 0 149.37 2,688.89 134.44 2,823.34 53.78 2,742.67

JVR: OC: SATTUPALLI 1105 D-CRR G9 CRR 1500 60.00 1,560.00 468 0 210 65.52 10 0 15 10 0 0 25 151 50 0 150.87 2,715.39 135.77 2,851.16 54.31 2,769.70

DORLI:OC 3104 D-CRR G9 CRR 1500 60.00 1,560.00 468 0 210 65.52 10 0 15 10 0 0 25 151 50 0 150.87 2,715.39 135.77 2,851.16 54.31 2,769.70

SRP:OC2 3410 D-CRR G9 CRR 1500 60.00 1,560.00 468 0 210 65.52 10 0 15 10 0 0 25 151 50 0 150.87 2,715.39 135.77 2,851.16 54.31 2,769.70

COC:MNG 1302 E-CRR G11 CRR 1130 60.00 1,190.00 357 0 158.2 49.98 10 0 15 10 0 0 0 151 50 0 116.47 2,107.65 105.38 2,213.03 42.15 2,149.80

BPA:OC-II EXT 3102 E-CRR G11 CRR 1130 60.00 1,190.00 357 0 158.2 49.98 10 0 15 10 0 0 0 151 50 0 116.47 2,107.65 105.38 2,213.03 42.15 2,149.80

KHAIRGURA:OC 3103 E-CRR G11 CRR 1130 60.00 1,190.00 357 0 158.2 49.98 10 0 15 10 0 0 25 151 50 0 117.97 2,134.15 106.71 2,240.86 42.68 2,176.83

KK5 (3A) SECTION 3205 E-ROM G11 ROM 1130 0.00 1,130.00 339 0 158.2 47.46 10 0 15 10 0 0 0 151 50 0 111.64 2,022.30 101.11 2,123.41 40.45 2,062.75

JVR:OC 1105 F-CRR G13 CRR 690 60.00 750.00 300 0 96.6 42.00 10 0 15 10 0 0 25 151 50 0 83.98 1,533.58 76.68 1,610.25 30.67 1,564.25

KOY:OC-II 1204 F-CRR G13 CRR 690 60.00 750.00 300 0 96.6 42.00 10 6 15 10 0 0 25 151 50 0 84.34 1,539.94 77.00 1,616.93 30.80 1,570.73

MNG-IV LINE 1388 F-CRR G13 CRR 690 60.00 750.00 300 0 96.6 42.00 10 15 10 45 0 25 151 50 0 86.68 1,581.28 79.06 1,660.34 31.63 1,612.90

JK:OC 1202 G-CRR G15 CRR 510 60.00 570.00 171 0 71.4 23.94 10 0 15 10 0 0 0 151 50 0 61.34 1,133.68 56.68 1,190.36 22.67 1,156.35

KHAIRGURA:OC 3103 G-ROM G15 ROM 510 0.00 510.00 153 0 71.4 21.42 10 0 15 10 0 0 0 151 50 0 56.51 1,048.33 52.42 1,100.75 20.97 1,069.30

KOY:OC-II 1204 UNGRD G17 420 0.00 420.00 0 0 58.8 0.00 10 6 15 10 0 0 0 151 50 0 40.25 761.05 38.05 799.10 15.22 776.27

RGM (GLB)-WASHERY 2297 WG-D WG-G9 2778 0.00 2,778.00 0 207.15 0 0.00 10 6 15 10 72.14 0 0 151 71 0 194.96 3,515.25 175.76 3,691.01 70.30 3,585.55

MNG-WASHERY 1394 WG-D WG-G9 2778 0.00 2,778.00 0 207.15 0 0.00 10 0 15 10 15.46 0 0 151 71 0 191.20 3,448.81 172.44 3,621.25 68.98 3,517.78

MNG-WASHERY 1394 WG-R WG-R 738 0.00 738.00 0 0 0 0.00 10 0 15 10 15.46 0 0 151 0 0 56.37 995.83 49.79 1,045.62 19.92 1,015.74

RGM (GLB)-WASHERY 2297 WG-R WG-R 738 0.00 738.00 0 0 0 0.00 10 0 15 10 72.14 0 0 151 0 0 59.77 1,055.91 52.80 1,108.70 21.12 1,077.03

RGM WASHERY 2297 WG-SL WG-SL 427 0 427.00 0 0 0 0.00 10 0 15 10 72.14 0 0 151 0 0 41.11 726.25 36.31 762.56 14.52 740.77

MNG-WASHERY 1394 WG-SL WG-SL 427 0 427.00 0 0 0 0.00 10 0 15 10 45 0 0 151 0 0 39.48 697.48 34.87 732.35 13.95 711.43

Note: Pre-wighbin charges added at GK OC from 01.01.2013 and at Koyagudem (G13-CRR) from 03.01.2013

AnnEXuRE

ZSNT RAIL PRICES W.E.F.18.01.2013

CHP Basic Sizing Basic total Premium Royalty variable SED Royalty on Pre Engine shntg

chgs + addl. cr FLS STC Forest permit charges PWB FSC Clean energy

cess ED Taxablae amount VAT 5% Total price with VAT 5% CST 2% Total price with

CST 2%RCHP G7 CRR 1,840.00 60.00 1,900.00 570 257.6 10 79.8 15 15 83 10 0 151 50 185.48 3,326.88 166.34 3,493.23 66.54 3,393.42

RCHP G13 CRR 690 60.00 750.00 300 96.6 10 42 15 15 83 10 0 151 50 88.36 1,610.96 80.55 1,691.50 32.22 1,643.18

YLD CHP G13 CRR 690 60.00 750.00 300 96.6 10 42 15 15 96 10 0 151 50 89.14 1,624.74 81.24 1,705.97 32.49 1,657.23

YLD CHP G15 CRR 510 60.00 570.00 171 71.4 10 23.94 15 15 46 10 0 151 50 65.00 1,198.34 59.92 1,258.26 23.97 1,222.31

KCHP IV Line G7 CRR 1,840.00 60.00 1,900.00 570 257.6 10 79.8 15 15 45 10 25 151 50 184.70 3,313.10 165.66 3,478.76 66.26 3,379.37

KCHP IV Line G13 CRR 690 60.00 750.00 300 96.6 10 42 15 15 45 10 25 151 50 87.58 1,597.18 79.86 1,677.03 31.94 1,629.12

KCHPII Line G11 CRR 1,130.00 60.00 1,190.00 357 158.2 10 49.98 15 15 45 10 25 151 50 121.57 2,197.75 109.89 2,307.64 43.96 2,241.71

GDK I CSP G7 CRR 1,840.00 60.00 1,900.00 570 257.6 10 79.8 15 15 72.14 10 25 151 50 186.33 3,341.87 167.09 3,508.97 66.84 3,408.71

GDK OC 3 CHP G11 CRR 1,130.00 60.00 1,190.00 357 158.2 10 49.98 15 15 72.14 10 25 151 50 123.20 2,226.52 111.33 2,337.85 44.53 2,271.05

RKP CSP G11 CRR 1,130.00 60.00 1,190.00 357 158.2 10 49.98 21 15 133 10 25 151 50 127.21 2,297.39 114.87 2,412.26 45.95 2,343.34

SRP CSP G9 CRR 1,500.00 60.00 1,560.00 468 210 10 65.52 15 15 90 10 25 151 50 157.17 2,826.69 141.33 2,968.03 56.53 2,883.23

RGM (GLB) WASHERY WG- G9 2778.00 0.00 2778.00 0 207.15 10 0 21 15 72.14 10 0 151 71 195.86 3,531.15 176.56 3,707.70 70.62 3,601.77


E-AuCTIOn

Monthwise quantity offered & sold through coaljunction & MSTC e-auction Qty. In Tons

MONTH OFFERED QTY (in tons) SOLD QTY (in tons) Variation (In Percent)Apr'11 2,834,160 2,179,060 -23.11%May'11 2,838,672 2,328,720 -17.96%June'11 1,860,004 1,303,176 -29.94%July'11 2,512,015 2,255,313 -10.22%Aug'11 2,183,370 1,764,911 -19.17%Sept'11 2,578,082 2,203,438 -14.53%Oct'11 591,910 385,904 -34.80%Nov'11 3,309,434 2,891,019 -12.64%Dec'11 2,926,557 2,632,049 -10.06%Jan'12 4,771,008 3,758,496 -21.22%Feb'12 4,129,350 3,576,946 -13.38%Mar'12 7,568,706 6,584,608 -13.00%Apr'12 5,882,172 5,183,850 -11.87%May'12 5,254,880 4,456,357 -15.20%June'12 4,058,198 3,605,700 -11.15%July'12 3,639,567 2,979,323 -18.14%Aug'12 3,705,563 2,924,489 -21.08%Sep'12 3,451,848 3,091,583 -10.44%Oct'12 3,550,650 3,177,658 -10.50%Nov'12 5,571,163 4,871,200 -12.56%Dec'12 6,066,394 4,069,700 -32.91%

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

Nov'1

1

Dec'1

1

Jan'1

2

Feb'1

2

Mar'1

2

Apr'1

2

May'1

2

June

'12

July'

12

Aug'1

2

Sept'

12

Oct'1

2

Nov'1

2

Dec'1

2

Qty O

ffere

d In T

ons

OFFERED BY ROAD OFFERED BY RAIL

Monthly data of offered quantitythrough coaljunction & MSTC (road & rail)

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

Dec'1

1

Jan'1

2

Feb'1

2

Mar'1

2

Apr'1

2

May'1

2

June

'12

July'

12

Aug'1

2

Sep'1

2

Oct'1

2

Nov'1

2

Dec'1

2

Quan

tity in

Ton

s

OFFERED QTY (in tons) SOLD QTY (in tons)

Quantity offered & sold throughcoaljunction & MSTC

0

250,000

500,000

750,000

1,000,000

1,250,000

1,500,000

1,750,000

BCCL

ROA

D

BCCL

RAI

L

MCL

ROAD

MCL

RAIL

NCL

ROAD

NCL

RAIL

NEC

ROAD

NEC

RAIL

SECL

ROA

D

SECL

RAI

L

ECL

ROAD

ECL

RAIL

WCL

ROA

D

WCL

RAI

L

SCCL

ROA

D

SCCL

RAI

L

CCL

ROAD

CCL

RAIL

Companies

Quan

tity In

Ton

s

Dec'12 QTY OFFERED Dec'12 QTY SOLD Nov'12 QTY OFFERED Nov'12 QTY SOLD

Companywise quantity offered & sold through coaljunction & MSTC

in Dec 2012 vs Nov 2012

Monthly data of offered quantity through coaljunction and MSTC (road & rail) Qty. In Tons

MONTH OFFERED BY ROAD OFFERED BY RAILApr'11 2,466,770 367,390May'11 2,564,788 273,884June'11 1,724,469 135,535July'11 2,236,945 275,070Aug'11 2,091,330 92,040Sept'11 2,262,732 315,350Oct'11 512,850 79,060Nov'11 3,083,582 225,852Dec'11 2,706,157 220,400Jan'12 4,518,196 252,812Feb'12 3,698,200 431,150Mar'12 5,874,230 1,675,226Apr'12 5,014,680 867,492May'12 4,927,850 327,030June'12 3,818,650 239,548July'12 3,444,100 195,467Aug'12 3,541,130 164,433Sept'12 3,226,580 225,268Oct'12 3,313,820 236,830Nov'12 5,329,723 241,440Dec'12 5,787,610 278,784

Dec'12 Nov'12 Variation (In Percent)

QTY OFFERED QTY SOLD QTY

OFFERED QTY SOLD OFFERED QTY SOLD QTY

BCCL ROAD 1,234,950 260,450 420,900 284,300 193.41% -8.39%

BCCL RAIL - - 7,800 0 NA NA

MCL ROAD 1,790,000 1,328,080 1,595,000 1,233,500 12.23% 7.67%

MCL RAIL - - - - NA NA

NCL ROAD 208,000 208,000 151,000 151,000 37.75% 37.75%

NCL RAIL - - - - NA NA

NEC ROAD 18,000 18,000 - - NA NA

NEC RAIL 41,250 41,250 - - NA NA

SECL ROAD 1,431,750 1,115,150 1,143,300 1,102,850 25.23% 1.12%

SECL RAIL - - - - NA NA

ECL ROAD 138,660 131,349 107,233 106,080 29.31% 23.82%

ECL RAIL 237,534 237,534 233,640 233,640 1.67% 1.67%

WCL ROAD 716,250 543,400 517,240 455,375 38.48% 19.33%

WCL RAIL - - - - NA NA

SCCL ROAD 250,000 186,487 402,000 371,395 -37.81% -49.79%

SCCL RAIL - - - - NA NA

CCL ROAD - - 993,050 933,060 NA NA

CCL RAIL - - - - NA NA

TOTAL 6,066,394 4,069,700 5,571,163 4,871,200 8.89% -16.45%

Companywise quantity offered & sold through coaljunction & MSTC in Dec 2012 vs Nov 2012 via rail & road Qty. In Tons

Note: Data for the period January 2011 - December 2011 and February 2012 is for e-auction through coaljuntion only, while data for January 2012, and March 2012 - December 2012 includes data of MSTC

www.coaltrans.com/india



MUNDRA 3,348,862

PARADIP 2,898,231NEW MANGALORE 2,021,272GANGAVARAM 1,799,031VIZAG 1,279,269KANDLA 1,004,931

MUMBAI 967,320

ENNORE 767,175

KOLKATA 500,129

MORMUGAO 215,708

Grand Total 14,801,929

pORT DATA

Port Qty (in Tons) Port Qty (in Tons)VIZAG 1,513,353MORMUGAO 1,137,575GANGAVARAM 862,268KOLKATA 819,441PARADIP 742,334MUNDRA 446,406

NEW MANGALORE 176,398

KANDLA 85,120

ENNORE 21,441

CHENNAI 209


Major Coking Coal supplier countries to India (through mentioned ports) October ’12 - December ’12

Country of Origin Qty (in Tons)

AUSTRALIA 4,636,439

UNITED STATES 537,881

NEW ZEALAND 202,531

MOZAMBIQUE 176,321

OTHERS 251,372


Major ports through which Coking Coal arrived in India October ’12 - December ’12

26.1%

19.6%14.9%

14.1%

12.8%

7.7%3.0%

1.5%0.4%

0.0%

VIZAG MORMUGAO GANGAVARAMKOLKATA PARADIP MUNDRANEW MANGALORE KANDLA ENNORECHENNAI

Major ports through which Coking Coal arrivedin India – October ’12 - December ’12

81%

9%

3%3%

4%

AUSTRALIA UNITED STATES NEW ZEALANDMOZAMBIQUE OTHERS

Major Coking Coal supplier countries to India(through mentioned ports) October ’12 - December ’12

Note: Figures are based on consignment lifted from these ports for which price details/break-up is available with Coal Insights team

Major Steam Coal supplier countries to India (through mentioned ports) October ’12 - December ’12

Country of Origin Qty (in Tons)INDONESIA 12,231,416SOUTH AFRICA 1,898,156UNITED STATES 396,136AUSTRALIA 198,712CANADA 66,485MOZAMBIQUE 11,025Grand Total 14,801,929

Major ports through which Steam Coal arrived in India October ’12 - December ’12

Port Qty (in Tons) Port Qty (in Tons)

22.6%

19.6%

13.7%12.2%

8.6%

6.8%

6.5%5.2%

3.4%

1.5%

MUNDRA PARADIP NEW MANGALOREGANGAVARAM VIZAG KANDLAMUMBAI ENNORE KOLKATAMORMUGAO

Major ports through which Steam Coal arrivedin India October ’12 - December ’12

0.1%0.4%1.3%2.7%

12.8%

82.6%

INDONESIA SOUTH AFRICA UNITED STATESAUSTRALIA CANADA MOZAMBIQUE

Major Steam Coal supplier countries to India (through mentioned ports) October ’12 - December ’12




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70 Coal Insights, February 2013 Tear

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