EDITORIAL

Editor
Arindam Bandyopadhyay, Tel: +91 91633 48016
Email: arindam.bandyopadhyay@mjunction.in
Editorial Board
Alok Srivastava, General Manager, MMTC Ltd
Amitabh Panda, Group Director (Shipping & Logistics Operations), Tata Steel Group
Anirudha Gupta, Mining & Metals professional and former Director, P&H Joy Mining
Equipment India Ltd Dear Readers,
Ashok Jain, Managing Director, Saumya Mining Ltd
Deepak Bhattacharyya, Chief - Horizon 1 businesses, mjunction services ltd There is a gross debate going on at various quarters, about the likely
Ganesan Natarajan, Former Whole Time Director, Ennore Coke impact of commercial coal mining on the Indian coal sector, and
K C Gandhi, Joint President (Material), Shree Cement Ltd specifically on Coal India Ltd (CIL). Generally, the argument that goes
Lawrence Metzroth, Vice President – Analysis & Strategy, Arch Coal Inc in favour of this new phenomenon is that it will bring in much-needed
P S Bhattacharyya, Former Chairman, Coal India Ltd
Sandeep Kumar, Managing Director, Tata Metaliks Ltd competition along with new technology and expertise, thus increasing
Suresh Thawani, Former Managing Director, Tata Sponge Iron Ltd the efficiency, which cannot but be desired.
News Editor The argument that particularly addresses the impact on CIL is that
Madhumita Mookerji, Tel +91 85840 08181, Email: madhumita.mookerji@mjunction.in the introduction of a market mechanism will bring in market-determined
Senior Correspondent prices, doing away with the age-old practice of subsidised sale of the
Ritwik Sinha, Tel + 85840 08234, Email: ritwik.sinha@mjunction.in commodity. The argument hinges on the assumption that CIL presently
sells coal below the notional market determined prices. Hence, in the era
Correspondent
Konica Ghosh, Tel + 85840 08190, Email: konica.ghosh@mjunction.in
of commercial mining, CIL will be free to charge higher prices, which
will result in increased topline and bottom line of the company.
Analyst
While that sounds good, the contrarian view is that the assumptions
Sanjoy Bag, Tel +91 85840 08215, Email: sanjoy.bag@mjunction.in
are not all sound. This is because, essentially, the private players are
Business Head
expected to be much more cost efficient than the coal behemoth. The
Amit Surana, Tel.:+91 83369 25976, Email: amit.surana@mjunction.in
major cost difference will be in the form of lower manpower expenses,
Advertising at about 10-15 percent of total costs for private, compared to 55 percent
Soumitra Bose, Tel: +91 92310 00232, Email: soumitra.bose@mjunction.in
Soudipto Malakar, Tel: +91 91633 48243, Email: soudipto.malakar@mjunction.in
for CIL. Also, the lower expenses on land acquisition (CIL has to give
Sumit Jalan, Tel: +91 83369 25981, Email: sumit.jalan@mjunction.in employment against land) and low CSR expenses will add to the cost
advantages of the private players. Although the private miners will have
Subscription
Shweta Gupta, Tel: +91 91633 48045, Email: gupta.shweta@mjunction.in to cough up an upfront payment to win the blocks, access to bank loans
Email: publication.vspl@mjunction.in would make life easy, the contrarians say.
Design The situation would be further complicated if the private players
Debal Ray, Sobhan Jas currently holding blocks (but not producing coal) are allowed to take
part in the hunt.
For suggestions, feedback and queries, please write to coalinsights@mjunction.in
Overall, the impact on prices may not be what is being assumed by
those in favour of the move. It could well be the case that CIL will need
to reduce its prices to compete with these smaller but more cost-efficient
players. How will CIL survive such a scenario?
As some of the contrarians put it, there could be two ways for Coal
India to prolong its existence. First, the miner may continue with its
present ways only to fade out like BSNL in some distant future. Second,
it may, finally, think seriously about a split in the family, whereby the
Published by: mjunction services limited mining subsidiaries will become individual entities, cut the flab, become
CIN: U00000WB2001PLC115841 efficient and continue to rule the roost.
Registered Office: Tata Centre, 43 J L Nehru Rd, Kolkata 700071 While it may sound bizarre to talk of such a split now, it may not
Website: www.mjunction.in sound altogether impractical in the not-so-distant future. So, will the
emerging competition compel CIL to go the BSNL way, or will it finally
Corporate Head Quarters: Godrej Waterside, 3rd & 9th Floor, Tower 1,
bring a split in the family, as was proposed a few years ago?
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Only time (and the market) will tell.

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Coal Insights, April 2018 3

Contents
26 Thermal coal offers volatile in April
27 Coking coal offers tumble in April
28 India’s Feb coal imports up 10% y-o-y
29 CIL’s FY18 production up 2.4%, Mar
output hits record
30 NLC’s lignite production down 10% in
FY18
31 SCCL to invest `12,000 cr in 5 years
33 India’s FY18 power capacity addition at
9,383 MW
35 Coking coal demand-side management
needs a look: N C Jha
37 India’s sponge iron production down
10% y-o-y in Feb
38 Will coal behemoth achieve 1 billion tons
by 2020?
41 US coal production estimated to decline
5% in 2018
46 Safety: whose baby is it anyway?
47 CASE delivers its 5,000th Vibratory
Tandem Compactor in India
48 ‘Vehicles’ end-of-life policy needs a
sustainable model’
49 Corporate Update
51 Traffic handled by major ports up 5% in
FY18
52 Indian Railways’ March coal handling up
5% y-o-y
54 E-auction data
56 Port data
4 Coal Insights, April 2018
6  |  COVER STORY
Stepping on the gas!
The Centre’s permission to CIL to extract
CBM from its leasehold areas sans petroleum
ministry’s permission, can be a game changer.
22  |  Interview
EOGEPL eyes JV with upstream
investors under OALP
Immediate focus is completion of the balance
commitment of 152 wells for EOGEPL’s
Raniganj project.
40  |  Expert speak
Can healthy power be supplied by
unhealthy power cos?
Upcoming power plants would have
unremunerative PPAs, says V K Arora.
42  |  International
US-China trade war: Could India and
Australia emerge winners?
Both warring factions may turn to India’s
lured by her gigantic market while China may
source more met coal from Australia.
44  |  Corporate
Single inspector per thousand
workers is not enough
With gaps in oversight, it remains incumbent
upon employers to ensure that they adhere to
the best practices, says Bill Shukla.
Cover Story

Stepping on the gas!

Madhumita Mookerji

An amendment in April 2018 to the 2015 regulations issued by the Ministry of Petroleum and Natural Gas will allow Coal India
to explore and extract coal-bed methane from its leasehold mining areas without the former’s permission. The move, along with free
pricing, can be a game changer for the CBM industry in India

6 Coal Insights, April 2018

Cover Story

T
he government seems to be stepping Unfortunately, there were factors that had track the exploration and exploitation of
on the gas with a host of measures! blocked CIL from going ahead with its CBM CBM in the Raniganj coalfield, through
With the freeing up of the pricing plans, a source close to the development capable and experienced CBM operators. As
and marketing mechanism of coal-bed told Coal Insights. Under that guideline, it per preliminary estimates, there is a potential
methane (CBM) last fiscal, the impending was indicated the petroleum lease would be of 3 mmscmd gas production from the
completion of the mega Urja Ganga pipeline obtained from the petroleum ministry as to CIL (ECL) leasehold areas in the Raniganj
of GAIL India and the bidding rounds under the locations from where CIL could extract coalfield area itself. And this assumed 3
the Open Acreage Licensing Policy (OALP), CBM. “There was an overlap in that case, mmscmd of gas coming on stream from CIL
and the more recent decision by the Union since CIL already had the mining lease for will offset a certain percentage from R-LNG
Cabinet (on April 11, 2018, to be precise) coal. Thus, how could the petroleum ministry imports,” says a source.
allowing exploration and exploitation of lease be applicable on a coal mining lease?
this gas from areas under the coal mining The government later realised this mistake Expected gas in CIL’s leasehold
lease allotted to Coal India Limited (CIL) and the modification had been proposed a area
are factors that are set to coalesce to bring number of times from the Coal Controller’s CIL, at present, is undertaking an exercise
down the country’s hydrocarbon import Office and the Ministry of Coal. In April, to determine the prognosticated CBM in
dependency level by 10 percent by the year thus, the government notification was issued its leasehold area, a well-informed source
2022 and secure the future of this particular and, hopefully, it is properly worded now. informs. The source says CIL’s priority is coal
unconventional gas resource. The Cabinet has approved the notification to mining – and to do it safely. The amendment
correct the guideline,” the source informed. to the 2015 regulations will serve 3 purposes
Amendment to 2015 regulations Coal mining leases are given for a period for CIL. First, mine production will increase
The government, on April 11, 2018 relaxed of 50 years by the respective state governments because CIL will be tapping premium grade
rules for state-owned Coal India in relation on the recommendations of the Ministry coking coal blocks. Secondly, the mines are
to extraction of CBM, a natural gas that of Coal while, on the recommendations of going to be rendered much safer through
lies below coal seams in its blocks in a bid the petroleum ministry, the CBM leases are the harnessing of CBM gas. Thirdly, cost
to speed up production of the same. Until issued for 20 years. of production will come down in the form
now, CIL had to apply to the Ministry of “Post this amendment to the November of reduced usage of flame proof protectors,
Petroleum and Natural Gas (MoP&NG) for 2015 regulations, it is now mentioned that if which are very expensive.
a licence to extract CBM from its coal blocks. a player has a mining lease for coal, it will be “If we need to extract that gas then the
Henceforth, the coal behemoth will not need deemed as a petroleum lease for the gas as mines will simultaneously become safer
such a permission. well, because coal itself is a reservoir of CBM. as well. We use flameproof equipment
The Cabinet Committee on Economic Wherever there is coal, there will also be this underground which are very expensive.
Affairs (CCEA), chaired by Prime Minister gas. It lies in the trough under pressure. So, Hence, if we extract the gas, then we can
Narendra Modi, approved an amendment to now CIL can extract the gas from its coal lessen use of this equipment and reduce our
the November 2015 regulations issued by the mines, under the new notification,” the mining cost. In producing the coal we need
Ministry of Petroleum & Natural Gas under source adds. to control the gas first. We dilute this gas
Section 12 of the Oil Fields (Regulation and Now, the plan of action, the source through ventilation, whose cost is also high.
Development) Act, 1948 (ORD Act, 1948). indicates, is that wherever CIL has prime And the more you dilute this gas, the longer
It may be recalled that in July 2015, the coking coal, or matured ranking coal, it will it will take to bring out the coal. The gas that
government had permitted CIL to explore tap for CBM. “The coking coal reserves that escapes automatically is around 14-18 percent
and extract CBM from its mining leasehold CIL has are of very good quality and contain but we need to restrict it to way lower than that
areas, under the CBM Policy of 1997. very high level of CBM, especially those in at 0.1 percent through ventilation to keep the
Thereafter, in November 2015, the Ministry Jharia, which are very gassy fields,” the source mining process safe. The more you break the
of Petroleum had issued a guideline on how informs. coal walls, the higher the gas escape. So, our
CIL could work out its plans for CBM Many in the industry say this is welcome production had become slower, the risk factor
extraction under the said policy. news. “With this, CIL will be able to fast had gone up and the cost of mining had also
increased in tandem. For instance, inside
any gassy coal mine, whatever equipment is
being used should be explosion-proof. But
Since the most gassy coking coal mines are located in the Jharia these equipment are far more expensive than
coalfields, CIL’s priority now is to start with the same. It has usual mining equipment, making the cost of
delineated one block under Bharat Coking Coal Limited (BCCL) production increase. CIL uses flameproof
comprising Moonidih, Jarma, Singra and Kapuria, and which light protectors (FLPs), especially in its gassy
mines. As a result, production was also low in
is spread over 24 square kilometres. The prognosticated CMB these mines,” a well-placed source informs.
reserves are a minimum of 25 billion cubic metres (bcm). Since the most gassy coking coal mines
are located in the Jharia coalfields, CIL’s

Coal Insights, April 2018 7

Cover Story
priority now is to start with the same. It
has delineated one block under Bharat
Coking Coal Limited (BCCL) comprising
Moonidih, Jarma, Singra and Kapuria and
which is spread over 24 square kilometres.
The prognosticated CMB reserves are
a minimum of 25 billion cubic metres
(bcm), the source informs. “This volume
will definitely not be lower than this, I am
confident. This block is ready for exploration
and extraction. We were just waiting for the
government notification,” the source who is
closely associated with the development of
this block tells Coal Insights.
“We have identified and delineated a
second block in the Raniganj coalfields,
which covers 57 square kilometres under
Eastern Coalfields. Here the prognosticated
reserves are lower, at 4 bcm,” the source adds.
As per reports, the Jharia block will
require an investment of around `3,000 crore.
As per a thumb rule, if the gas is more than
5 cubic metre per ton of coal embedded in
the coal seams, then it is economically viable.
And the gas that CIL expects to extract from
these two blocks are more than 8 cubic metre
per ton, rendering it as highly economically
viable and, more importantly, it will be value
8 Coal Insights, April 2018
addition for CIL, whose main function is coal
mining. “If we extract this CBM then we will
also reduce GHG emissions. If we release
methane directly into the atmosphere then it
is 21 times more damaging to the environment
than CO2,” the source also indicates.
CIL is waiting for the government
order to come out, post which it will call for
tenders. But, the source informs that it will
take around two years to start exploration and
extraction. “The entire process of preparing
the documents, tender calls, bidder meets and
negotiations, with many in-between stages
with finally the board awarding the contracts
will definitely take 2 years,” the source adds.
The Central Mine Planning and Design
Institute (CMPDI) will provide technical
support. Both international and domestic
bids will be entertained where technology
service providers for the development of the
blocks are concerned.
Current CMB scenario in India
Conventional gas production in India is
dominated by a handful of ageing fields while
a limited number of new plays have been
added over the years. There is a significant
opportunity for growth of unconventional
gas sources like CBM and, futuristically,
shale gas, according to the IEA’s India
Energy Outlook, 2015 which traces the
scenario till 2040 based on a few factors. For
instance, the current scenario unfolding is
one of expanding natural gas demand along
with the need to decarbonise the fuel mix.
Further, the contribution from conventional
gas fields is stagnated as well.
India has the fourth-largest proven coal
reserves in the world and, naturally, a huge
CBM potential. However, no assessment
about total prognosticated CBM resources
in the country, including CIL’s mining lease
areas, is readily available as per the CBM
Lok Sabha Standing Committee Report of
2015-16.
India produced 2,738 million standard
cubic meters (mmscm) of natural gas in
Cover Story
January 2017, registering a growth of 12
percent over the same month last fiscal.
Currently, CBM accounts for 3-4 percent
of the total gas production of around 65
bcm and its production in 2017-18 was
around 350 mmscm. As per sources, CBM
development is already a reality and thus may
be a “preferred future energy resource”.
India’s production of CBM grew more
than 44 percent in 2016-17 to around 565
million standard cubic metres (mmscm)
against 393 mmscm in 2015-2016. Data
from the Petroleum Planning & Analysis
Cell (PPAC) reveals that in 2016-2017
domestic production of CBM contributed
1.78 percent of India’s total natural gas
production of over 31,000 MMSCM.
The Ministry of Petroleum and Natural
Gas (MoPNG), in consultation with the
Ministry of Coal and CMPDI, had identified
26,000 square kilometres of area for CBM
operation and the total estimated CBM
resources in this identified area amounts to
about 2,600 bcm (92 TCF).
According to Essar Oil and Gas
Exploration and Production (EOGEPL),
it built 3 pilot test wells way back in 1993
in Mehsana in Gujarat with the help of
Advanced Resources International, US
to establish CBM in India. Post-this, a
CBM policy was drafted and meanwhile
2-3 nomination blocks were given away
in which ONGC secured 2-3 in 1996, one
went to Great Eastern Energy Corporation
Limited (GEECL) and to a few others. The
CBM policy was formulated in 1997 post
which a formal tendering round happened
which concluded in 2001 when the blocks
were given away to Reliance, EOGEPL etc.
IEA – India energy outlook, 2015
10 Coal Insights, April 2018
If we extract this CBM then we will also reduce GHG emissions.
If we release methane directly into the atmosphere then it is 21
times more damaging to the environment than CO2. The entire
process of preparing the documents, tender calls, bidder meets and
negotiations, with many in-between stages with finally the board
awarding the contracts will definitely take 2 years.
Since the year 2000, four international open required clearances to start operations.
bidding rounds for CBM were held in India The total recoverable reserves from these
in which 33 blocks were awarded (including 8 development blocks is envisaged at 4 TCF,
2 blocks on nomination basis to CIL and which means a volume of 10-12 mmscmd of
1 block through the Foreign Investment CBM gas upon full development of the same.
Promotion Board route) covering 16,613 sq Eighteen blocks, after initial assessment
km out of the total available coal-bearing by exploration activities, were found to be
areas for CBM exploration (of 26,000 sq having poor CBM potential and are under
km). Total prognosticated CBM resource for relinquishment/or have been relinquished.
the awarded 33 CBM blocks is about 62.4 There were some reasons why these blocks
TCF (1,767 bcm), of which, so far, 9.9 TCF were relinquished, say industry sources. One
(280.34 bcm) has been established as gas in was that the players who had been awarded
place (GIP). were not able to establish the full commercial
The CBM blocks were carved out by viability parameters of the blocks. Secondly,
the Directorate General of Hydrocarbons the pricing policy in between was not
(DGH) in close interaction with the Ministry supportive. The government subsequently,
of Coal (MoC) & Central Mine Planning in 2017, approved pricing and marketing
and Design Institute (CMPDI), Ranchi. Till freedom to producers of natural gas from
date, most CBM exploration and production CBM and also allowed them to sell the fuel
activities in India is pursued by domestic to affiliates. An official statement had said:
Indian companies. “The Cabinet Committee on Economic
Thus, among the 33 blocks awarded, 8 are Affairs, chaired by Prime Minister Narendra
in development stage, with 4 in commercial Modi,… gave its approval for marketing and
production while 18 blocks were relinquished pricing freedom to the CBM contractors
or are under relinquishment. Four blocks are to sell the CBM at arm’s length price in
in exploration stage (which includes Essar’s the domestic market,” a move that allowed
Rajmahal East and Sohagpur NE) and 3 players like ONGC and Reliance Industries
blocks are under arbitration and/or awaiting to put into production their CBM blocks,
fuelled by pricing viability.
Only 4 blocks in India are under
commercial production – namely Essar’s
Raniganj East, GEECL’s Raniganj South
and RIL’s Sohagpur East/West blocks.
Altogether, this is a volume of around 2
mmscmd as of now.
These 33 cover 64 percent of the total
available coal-bearing areas in 12 states,
including Andhra Pradesh, Chhattisgarh,
Gujarat, Jharkhand, Madhya Pradesh,
Maharashtra, Assam, Odisha, Rajasthan,
Tamil Nadu, Telangana and West Bengal.
Of the 33 blocks, progress has been slow
in that only 4 have reached commercial
production and 8 are in development and
exploration stages. One reason for the slow
Cover Story
State-wise distribution of CBM resources
Sl Prognosticated CBM
State
No resource (in BCM)
1 Jharkhand
2 Rajasthan
3 Gujarat
4 Odisha
5 Chhattisgarh
6 Madhya Pradesh
7 West Bengal
8 Tamil Nadu
9 Telengana & Andhra Pradesh
10 Maharashtra
11 North East
Total CBM Resource
Source: DGH
development was that the policy did not give
pricing and marketing freedom, says a source,
adding that, further, the blocks that had been
carved out, had been selected on very old
historical data that lay with Coal India – data
not just related to the inside of the block but
outside it as well, on prognostic basis. Hence,
the reasons for doing the explorations did
not meet the expectations of commercial
viability. Secondly, the pricing policy was
not supportive. May be some blocks were
commercially viable at $6.57 per mmbtu
but because of the lack of a proper pricing
policy the players thought it would not be
commercially viable to develop these blocks.
Third was lack of infrastructure. At
present, with the new Ganga Urja pipeline
under way, all these blocks will get connected
in this area. Earlier, this gas was not
connected to the pipeline and the only way to
sell it was in the open market. And to reach
the local market, the CBM producers needed
to lay a pipeline which would cascade into
lower margins.
Eastward ho
The eastern part of India has a unique
positioning in India’s unconventional energy
future, say experts. For one, there has been
a sharp increase in energy demand in this
region. But it has always remained a coal-
dominated belt, conspicuously lacking
in any oil and gas play. Thus, the energy
sourcing comes with a growing concern for
environment too. Direct methane emission
from coal mines is 25 times more damaging
than CO2 emissions from coal mines and
12 Coal Insights, April 2018
Panagarh,” Vilas Tawde, Managing Director
Prognosticated CBM Established CBM & CEO, EOGEPL, tells Coal Insights.
resource (in TCF) reserve (in TCF) There are several triggers for CBM
722.080 25.500 1.916 development in the Damodar Valley, as per
359.620 12.700 0 Essar sources. There is a ready market for
351.130 12.400 0
6.0 mmscmd of gas that is presently available
from Bokaro to the Panagarh region.
243.520 8.600 0
Secondly, the CBM Early Monetisation
240.690 8.500 0 Policy (April, 2017) gives marketing and
218.040 7.700 3.650 pricing freedom to CBM contractors to sell
218.040 7.700 4.330 the CBM gas at arm’s length pricing in the
104.770 3.700 0 domestic market.
99.110 3.500 0
Thirdly, GAIL’s Jagdishpur-Haldia
National Natural Gas Pipeline Grid (Urja
33.980 1.200 0
Ganga) is under commissioning and will be
8.500 0.300 0 passing across the Damodar Valley, providing
2599.480 91.800 9.900 an excellent market linkage.
Fourth, gas is proposed to be brought
under the GST regime. The industry expects
industrial CO2 from coal-based power gas to come under GST which will be a
plants, which makes the case even stronger positive. Tawde informs that at present the
for CBM.
gas industry is giving GST to its service
The Damodar Valley basin of eastern
providers but not getting credit for the same
India has been nationally and internationally
because it is under VAT. “Our customers are
accepted as one of the most prolific coal-
selling on GST but not getting credit because
bearing master basins in the country with its
CBM prospects reasonably proved by the fact they are paying VAT. There was a statement
that there are 6 CBM block developments from the finance minister that gas will come
under way. Out of these 6, 2 blocks, Raniganj under the GST scope soon,” he adds.
East (Essar) and Raniganj South (GEECL) Fifth, a unified transportation tariff, if
are actually in commercial production, approved, will provide a trans-India market
contributing to more than 50 percent of the for CBM gas. “The Petroleum & Natural
entire CBM produce in the country. ONGC Gas Regulatory Board (P&NGRB) has
has also started its development activities referred to a unified gas transportation tariff
in its Bokaro and North Karanpura CBM of $1. If that happens the gas that goes
blocks. into the pipeline has a trans-India market,”
“There is huge scope for CBM observes a source.
development especially in the eastern part of
the country, what we call the Damodar Valley. Pricing
You see, wherever there is coal, there will be When asked what business model CIL will
CBM gas. There are pockets in Tamil Nadu be adopting for selling its CBM, a source
but this is scarcely distributed. Indeed, the says that decision will have to be taken
main CBM producing area is the Damodar by the management. “It will be a policy
Valley that stretches from Sohagpur up to decision whether CIL would want to keep it
There is huge scope for CBM development especially in the eastern
part of the country, what we call the Damodar Valley. Wherever
there is coal, there will be CBM gas. There are pockets in Tamil
Nadu but this is scarcely distributed. Indeed, the main CBM
producing area is the Damodar Valley that stretches from Sohagpur
up to Panagarh.
Cover Story
for internal use or sell it. You see, one can
generate power from this gas, it can be fed to
steel and fertiliser plants or used as domestic
fuel. It can be applied in multiple industries,”
the source adds.
The government has a guideline whereby
through the Petroleum Pricing & Analysis
Cell it declares market driven gas prices
every quarter. The government, however,
allows the gas players to discover their own
prices with a stipulation that these will not
be lower than the PPAC price. In the last
quarter, the CBM price was $6.03mmbtu.
There is a 10 percent revenue share model
with the gas producers through a production-
linked contract. Whatever gas is produced,
10 percent of its value has to be given to the
government.
Sources say that initially CBM pricing
in India started on a good scale but dropped
to as low as $2.7 mmbtu subsequently,
making the venture unviable for many
players who decided to relinquish their
blocks. The PPAC pricing hovered around
$3.3 per mmbtu and there were constraints
too in the sense that that the gas retrieved
had to go to certain sectors. Thus, there
were limitations in terms of realisation of
revenues or market.
Where the new pricing norms are
concerned, parleys had started from
September 2015, with 7-8 standing
committees being formed in the MOP&NG
and in April 2017 the CBM industry got
14 Coal Insights, April 2018
complete freedom in pricing and marketing.
This move thus opened up opportunities for
India’s CBM players till then hamstrung by
price unviability.
“Earlier, when we were guided by
PPAC pricing, it was $3.5 mmbtu. Under
free pricing, against that benchmark we at
EOGEPL get $8 per mbbtu,” says Tawde
of EOGEPL. Another private player is
getting a similar pricing while for ONGC,
it is learnt to be hovering around $6.3
mbbtu. But pricing depends on the volumes
and customers in that area, basis which a
particular price level can be commanded.
Dwelling on the fiscal and socio-
economic benefits of CBM, Tawde says
every cubic meter of CBM will result in `8.00
subsidy saving to the fertiliser sector; `1.6 of
royalty to the state government; `22 of forex
saving (considering the LNG landed and
transported prices); `30 tons of equivalent
Co2 emission (CG4 is ~25 times potent
GHG than Co2); direct investment in excess
of `10,000 crore; and indirect investment of
approximately `18,000-20,000 crore.
An industry source observes that even if
CIL sells its CBM at $8 per mmbtu it would
be $4 less than the imported LNG price.
As says Tawde, the broad assumptions
are that the landed price of LNG, including
regasification and transportation, would be
$12/mmbtu on NCV (net calorific value)
basis and CBM price is at $8.0/mmbtu
(which is the discovered price of Essar and
Reliance).
Since pipeline infrastructure will revive
the fertiliser sector, there is at least a per
mmbtu differential of $4 between CBM
and re-liquefied natural gas (R-LNG), point
delivered basis, assuming that these plants
are sourcing the latter from the grid along
with the payment of transportation charges.
Thus, considering a case of 3 mmscmd
and a direct gas price pass subsidy for
fertiliser, the government stands to save a net
subsidy of $1.7 billion over 10 years.
That apart, there will be direct socio-
economic benefits to the local population.
Reliance Industries
After the government freed the pricing
and marketing mechanism, activity picked
up as well with Reliance Industries (RIL)
beginning commercial production of CBM
gas from its 2 blocks in Madhya Pradesh.
The company had deferred production due
to lack of clarity over CBM pricing, as per
reports. The 2 blocks are located in Sohagpur
East and West. RIL commenced commercial
production from March 2017 and expected
to begin sales to third party customers from
May. It had also appointed CRISIL to help
in the price discovery process based on the
Cabinet Committee on Economic Affairs’
approval in March, 2017. Reliance expected
to reach around 0.4 mmscmd of production
by June 2017. The ramp-up phase will
continue further for 15-18 months till it
reaches production plateau in CBM, sources
had indicated. The company holds another
CBM block in Sonhat, Chhattisgarh.
GEECL
Great Eastern Energy Corporation Limited
(GEECL) aims to invest around $1 billion in
unconventional energy (CBM and/or shale)
over the next 5 years. It is not interested in
getting into the conventional space.
GEECL’s first priority is its Raniganj
(South) block in West Bengal which has
about 2.40 TCF of gas in place. To exploit the
potential, it will have to drill a total of 300 wells.
It has already drilled 150 wells, and it intended
to drill another 144 wells at an investment of
`1,500- 2,000 crore, work for which was to start
soon, as per sources. The company intended
to drill around 40 wells per year. GEECL
also hoped that the ongoing arbitration in
its Mannargudi CBM block in Tamil Nadu
would get resolved soon, after which it intended
to look at investments plan there. As per the
Directorate General of Hydrocarbons (DGH)
it has 0.98 TCF gas-in-place.
The company also intended to study the
Cover Story

North and Jharia. Some time back, the PSU

was mulling plans to sell off the Raniganj
The broad assumptions are that the landed price of LNG, including block and now it is on course to produce
regasification and transportation, would be $12/mmbtu on NCV (net gas from its Bokaro block in February, say
sources.
calorific value) basis and CBM price is at $8.0/mmbtu (which is the
It wanted to sell the Raniganj North
discovered price of Essar and Reliance). block since an air strip is coming up on the
same land and thus it would be difficult to
develop it. Meanwhile, 9 sites were ready for
new bidding mechanism under the Open Now that it has demonstrated that CBM drilling at Bokaro.
Acreage Licensing Policy (OALP) and the is an option for future energy requirement,
Urja Ganga pipeline: A boon for CBM
data available on National Data Repository at least for eastern India, EOGEP will
(NDR) in order to make a decision on what focus on identifying new blocks in other There is no point in producing all that gas
blocks to carve out and bid for. areas, including Tamil Nadu, Chhattisgarh, if there are no logistics to push it out to the
Jharkhand and Odisha. “Our team is working customer end. Here enters the Urja Ganga
pipeline project of GAIL at an investment
Essar on this. It is first come first serve,” reveals
of `12,940 crore which is targeted to be
EOGEPL’s Raniganj block is producing Tawde.
completed by 2019.
1.0 mmscmd, 348 wells have been drilled. This is an ambitious 2,655 km long
Further, it has 4 exploratory CBM blocks in ONGC
pipeline, also known as the ‘Pradhan
Rajmahal E, Sohagpur NE, Talcher & IB Oil & Natural Gas Corp had been allocated Mantri Urja Ganga’ project which
Valley with an estimated resource of 8.5 TCF 9 CBM blocks of which 5 are relinquished. originates at Jagdishpur in Uttar Pradesh
as per DGH estimates. Exploration phase I The remaining 4 are in Bokaro (Jharkhand), with the main trunk of the pipeline ending
is to start in Rajmahal & Sohagpur from next North Karanpura (Jharkhand), Raniganj at Haldia in West Bengal and Dhamra in
financial year.
Essar expects turnover from its CBM
business to touch `600 crore in 2018-19 and
aims to double that in the subsequent two
years, says Tawde. The company has already
invested about `4,000 crore in setting up
supply infrastructure and drilling 348 wells.
Plans include drilling another 152 wells over
the next two years, which would require
about `900 crore more.
“Now, with the price discovery and
contract with GAIL we are approaching the
vendors so that we can drill the wells very fast.
We are almost closing the financial part. Of
this `900 crore, `600 crore will be debt and
`300 crore will be funded from the revenue
we generate to drill the 152 wells. Our overall
development plan is for 500 wells of which
we have drilled 348 wells,” Tawde adds.
He also says that from 1 million
EOGEPL will go up to 2.5 mmscmd out of
which it will be able to sell 2.3 mmscmd after
internal consumption. It has signed a contract
for 2.3 mmscmd for 15 years with GAIL,
which is its sole customer up to 2.3 mmscmd.
EOGEPL is focusing on its showcase
Raniganj project because of its target etc and to
get some stability. EOGEPL feels this project
has not only helped the company but other
competitors to expedite their CBM plans in
light of the price discovery it has made.

16 Coal Insights, April 2018

Cover Story
Odisha. The pipeline passes through the
states of Uttar Pradesh, Bihar, Jharkhand,
West Bengal and Odisha and will augment
GAIL’s existing network of trunk pipelines
covering the length of around 11,000 km
by 2,540 km.
Importantly, the project is considered as
a major step towards collective growth and
development of the eastern region of India.
It will usher in industrial development in
eastern India by supplying environmentally
clean natural gas to fertiliser and power
plants, refineries, steel plants and other
industries apart from serving clean gas to
households. Seven large cities in eastern
India – Varanasi, Jamshedpur, Patna, Ranchi,
Kolkata, Bhubaneswar and Cuttack – stand
to benefit from this project. It is learnt that at
18 Coal Insights, April 2018
every 15 km there will be a point where gas
can be incorporated into the pipeline which
will cover right from Bokaro to Purulia and
Burwan etc.
Tawde says that since the eastern part
of the country does not have conventional
oil and gas play, CBM is a boon in this part
of the country and because of this, pipeline
infrastructure is being speeded up in this
region.
He says he expects the pipeline to reach
Durgapur by December 2018. Further,
there is a ready market available because
this pipeline will revive 3 fertiliser plants –
namely, Barauni, Gorakhpur and Sindri.
Matix Fertiliser’s capacity, which it at around
3 mt, can be enhanced with CBM supply
from EOGEPL.
The pipeline project has been subsidised
by the central government and GAIL says
the first phase of the 2,655-km gas pipeline
from Jagdishpur in Uttar Pradesh to West
Bengal and Odisha will be completed before
the scheduled target of December 2018.
GAIL till date has committed over `7,400
crore in the pipeline, which can carry up to
20 mmscmd plus CBM and it will stretch up
to Haldia and Dhamra as well as serve all the
LNG plants that are coming up along this
route.
Environment
CBM is a gas that is vented during coal
mining. If one does not do degasification of a
coal mine it escapes into the atmosphere. Even
if a single cubic meter of gas is extracted, it is
Cover Story

20 Coal Insights, April 2018

Cover Story
equivalent to 30 tons of Co2 emissions. CO2
leads to global warming but methane depletes
the ozone layer and so liberation of this gas
into the atmosphere is 25 times more potent
a greenhouse gas than CO2. Thus, extraction
of CBM protects the environment. Certain
countries make it mandatory to degasify coal
mines before entering.
A pre-mine gasification will lead to
several benefits to the coal mining company
both in terms of better mining economies and
environmental safety. Indeed, degasification
will reduce mining risks and possible fire
hazards.
Natural gas emission is 0.2 kg per minute
while CBM’s emission level is even lesser at
0.198. Furthermore, only 0.36 kg CO2 per
unit is emitted in CBM extraction.
Conclusion
As per industry benchmarking studies, it can
be concluded that CBM project development
in India is able to create at least 3 times more
additional investment in the region. Thus,
for an investment of say `6,000-`7,000 crore,
there will be a net investment of `20,000 crore.
In terms of gas, the thumb rule is that
for every dollar of investment made, $1.8
investments are made in peripheral or gas-
based industries. Tawde feels that if the total
direct investment in CBM amounts to say
`10,000 crore, a corpus of `18,000-`20,000
crore will be injected into ancillary or gas-
based industries like fertilisers and others.
“You see, it’s a chicken and egg scenario
in gas. Once the gas comes, gas-based
industries will also start coming up. Around
40 districts will be covered and City Gas
Distribution (CGD) will also increase. The
pipeline will give a big boost to the region,”
says an industry source.
OALP: The Directorate of Hydrocarbons
(DGH) has changed the policy from
identification of blocks to the Open Acreage
Licensing Policy (OALP) where the players
will have to identify the blocks and inform
DGH about the ones they are interested in
pursuing. Also, the block identified will not
be for any specific hydrocarbon but can be
for CBM, shale, conventional oil and gas
extraction etc.
With the changed pricing policy in place,
new pipeline infrastructure coming up and
implementation of new AOLP norms, many
believe some of the blocks which had been
surrendered or relinquished could be identified
and re-activated again. Earlier, blocks of 300-500
km had been identified and the commitments
were also high. Now, under the new mapping,
small blocks of 50-60 km can be identified. If a
block is smaller, there is lesser commitment and
development can be done faster.
The second round had concluded in
November last fiscal.
The second round of auctions will starts
from May and allow 4 months to the bidders
to submit their expressions of interest. Going
forward, demand for CBM is looking firm,
say industry sources.
As per the projections of the outlook,
total gas demand per annum in 2025 will be
90 billion cubic metres (bcm) out of which
around 50 bcm will be domestic supply and
the rest will be imported LNG supply. Thus,
wherever there is a gas shortage it will have
to be filled by LNG imports which leaves the
door ajar for increasing domestic production
to reduce the import dependency. As per the
same estimates, total gas demand is likely to
touch around 175 bcm by 2040, by when the
share of CBM is slated to touch 30 bcm.
The Indian economy, many say, is moving
towards a gas-based one. Whatever shortfall
is experienced, will have to be filled in by
LNG imports. But gas demand will also
increase. More CNG will be in use and city
gas distribution will increase across more
locations since 180 cities have been identified
which can go on the City Gas Distribution
(CGD) platform. Local industries can be
served and of course local households.
At present, CBM is 3-4 percent of the
total gas production but its share can go up to
10 percent or 7-8 mmscmd by 2022, which
is in synch with the PM’s vision of lowering
dependency on hydrocarbon energy by 10
percent by this time-frame.
“I always feel the energy life cycle
will gravitate from C to H. We call it the
decarbonisation of energy mix. So more of
gas and methane, shale gas, etc. Ultimately
it will be a hydrogen-based economy but
that is a little far off, may be by 2030-40…”
concludes a source. 
Coal Insights, April 2018 21
Cover Story

EOGEPL eyes
JV with
upstream
investors
under OALP

E
ssar Oil and Gas Exploration
and Production (EOGEPL)
is poised to seize the
opportunities that are being thrown
up by the government’s Hydrocarbon
Please give an overview of the coal-bed methane (CBM) blocks scenario in India. Exploration and Licensing Policy
What are the estimated reserves of CBM in India and what is the break-up of (HELP) and Open Acreage Licensing
reserves in the blocks? Policy (OALP), which have virtually
India, has the fourth largest proven coal reserves in the world, and naturally a huge unlocked the available sedimentary
CBM potential. However, no assessment about total prognosticated CBM resources basinal area of the country, with
in the country, including CIL’s mining lease areas, is readily available (as per the access to all the available sub-surface
CBM Lok Sabha Standing Committee Report, 2015-16). resources. Consequently, the company
The Ministry of Petroleum and Natural Gas (MoPNG), in consultation with is engaged in a detailed review of
the Ministry of Coal and CMPDI, has identified 26,000 sq km of area for CBM
technical and infrastructure data
operation. The total estimated CBM resources in this identified area is about 2,600
from a short-listed set of blocks and
BCM (92 TCF).
Essar is the pioneer in CBM exploration in India with our first CBM wells is in dialogue with a few upstream
drilled and test flowed way back in 1992-93 near Mehsana, Gujarat. investors for a joint venture model
Subsequently, the National CBM Policy was released in the year 1997. under the OALP bidding norms to
Since, the year 2000, four International Open Bidding Rounds for CBM had optimise its risk exposure, Vilas
been held in India. Thirty three CBM blocks were awarded. Total prognosticated Tawde, Managing Director & CEO,
CBM resources of 62.4TCF were prognosticated in the 33 awarded blocks. EOGEPL, tells Madhumita Mookerji.
However, till date, only about 10 TCF has been established as ‘gas in However, he adds, the immediate
place’ in the 8 development blocks. Eighteen blocks, after initial assessment by focus remains completion of the
exploration activities, were found to be having poor CBM potential and are under balance work commitment of the 152
relinquishment/or have been relinquished. wells for EOGEPL’s showcase Raniganj
The Damodar Valley Basin in eastern India has been reasonably proved to be
project for producing ~2.5 mmscmd of
the best area for CBM development with 6 of the 8 development blocks located
coal-bed methane (CBM) in the near
here. The Raniganj Coalfield in the Damodar Valley master-basin has been the best
area for CBM with 2 blocks, namely Raniganj East of Essar and Raniganj South of term. Excerpts from an interview:
GEECL, already in commercial production.

22 Coal Insights, April 2018

Cover Story
The scenario in the Damodar Valley
is slated for a further boost with ONGC
starting development activities in its Bokaro
and North Karanpura blocks. It is also
understood that Coal India, with the Union
Cabinet approval allowing it to develop
CBM in its leasehold, is also planning
its initial CBM foray in the Jharia and
Raniganj coalfields of the Damodar Valley
master-basin.
What sort of investments are required for
development, exploration and extraction of
CBM from a block?
CBM, being an unconventional play
requires drilling of a large number of wells.
In addition, CBM being a low pressure
gas, requires an elaborate gas compression
and evacuation facility. There are very
few CBM cost-specific examples in India
considering that CBM development
has been relatively nascent. So far,
CBM investments in India are around
`10,000 crore, as per the Directorate of
Hydrocarbons (DGH).
Essar, in Raniganj East, has successfully
explored, assessed and developed the
block, with it already in commercial phase
since 2016. As per our approved field
development plan (FDP) we have completed
nearly 80 percent of it. As of now, the field
has 348 wells, 5 GGS, one MCS and in
excess of 300 km of pipeline (infield to
customer). The total cost incurred so far
is around `4,000 crore. Going forward, an
additional drilling and required facilities
upgradation will cost `900 crore. In
addition, it may be mentioned here that
based on available data of cost comparison
with other successful CBM plays in the
world, Essar’s costs are very competitive and
even lower than some of our counterparts in
Australia and China.
What are the challenges in relation to CBM
extraction in India?
There are a host of challenges that have to
be endured for a CBM development effort.
This can be across the entire sub-surface to
surface and logistics handling.
Technical challenges: Despite CBM
development being declared a success, there
are several inherent operational and future
projection uncertainties due to heterogeneity
in the reservoir and a complex geological
set-up. Hence, it requires an efficient
modelling of the reservoir and proper
planning for development.
Land acquisition: Is one of the most
challenging issues considering such a large
number of wells are required for CBM
development.
Regulatory and statutory: There is
a huge list of clearances across all the
operational phases in a CBM block starting
from petroleum exploration licences (PELs)
in the exploration phase to the mining lease
(ML) in the production phase.
Presence of industries/infrastructure in
the CBM area: This is due to the fact that
such areas are normally in non-oil and gas
belt, so there is no ready gas evacuation
facility. Our Raniganj field is a genuine
example. Hence, we are ardently awaiting
commissioning of the Urja Ganga
pipeline.
Treatment and disposal of water:
Environmental-friendly disposal of huge
volumes of produced water is a challenge.
However, it is a matter of great pride
for us that we have successfully negotiated
all these challenges at Essar, the result of
which is seen by the fact that we are the first
operator to cross the coveted threshold of 1
mmscmd of CBM gas produce.
Another major challenge factor which
has been addressed by the Government
of India (GoI) in its April 2017 Early
Monetization Policy, along with some other
changes for operational ease. This has slowly
started bringing the lustre back into the
industry.
Give us an overview of the 33 CBM blocks
awarded so far?
Only four blocks in India are under
commercial production – namely Essar’s
Raniganj East, GEECL’s Raniganj South
and RIL’s Sohagpur East/West blocks.
Altogether, this is a volume of around 2
mmscmd as of now.
The outline of the status of the 33
blocks is as follows:
♦♦ 8 blocks in development (4 in
commercial production).
♦♦ 18 blocks relinquished/under
relinquishment
♦♦ 4 blocks in exploration stage (which
includes Essar’s Rajmahal East and
Sohagpur NE)
♦♦ 3 blocks are under arbitration and/or
awaiting required clearances to start
operations.
The total recoverable reserves from these
8 development blocks is envisaged at 4 TCF,
which means a volume of 10-12 mmscmd
of CBM gas upon full development of these
blocks.
Why has progress been so slow in that only
four have reached commercial production
stage?
As outlined above, the challenges have
been a dampener impeding a more
expeditious development of the CBM
resources in these blocks. From our own
experience, it was found that the prospects
initially projected in the awarded CBM
blocks were based on available data from
the surrounding coal blocks/mines and
actual CBM prospects came out to be
entirely different.
In addition, surface constraints like
forest, build-up and infrastructure within
the blocks became critical to exploring or
developing the blocks. Unlike oil and gas
plays, lack of infrastructure in the CBM
belts has been a major factor.
However, with the recent spate of
investor-friendly moves by the GoI there is
a definitive chance of recovery of the sector.
CBM development is more crucial for
eastern India which has remained a coal-
dominated belt and lacks any conventional
oil and gas play.
What is the environmental impact of CBM
extraction?
The energy sourcing comes with a growing
concern for the environment. Direct
methane emission from coal mines is ~25
times more potent GHG than CO2.
Secondly, there is industrial Co2 exhaust
from coal-based power plants. There is
an acute need to supplement the energy
demand in eastern India through CBM.
In this regard, the Cabinet nod for CIL to
start CBM in its coal leasehold areas is a big
upside.
Coal Insights, April 2018 23
Cover Story
Of late policy changes have been initiated.
A Cabinet decision had been taken last
fiscal to give marketing and pricing freedom
to CBM producers? And, more recently,
Coal India and its subsidiaries will now
be able to extract coal bed methane from
its mines without seeking approvals under
the Petroleum & Natural Gas Rules 1959
(PNG Rules, 1959). What will be the larger
implications of both policy changes?
CBM is a capital-intensive and marginal
economics play and we would heartily thank
the Government of India for providing
the much-required thrust to the sector
with the announcement of the ‘CBM
Early Monetization Policy of April, 2017’
which has helped the operators get a very
remunerative price for all their endeavours.
At this juncture, we feel there
is a significant scope for growth in
unconventional gas. CBM’s commercial
development already being a reality, it may
be considered as a ‘preferred future energy
resource’.
We remain committed towards the ’10
percent hydrocarbon import dependency
reduction by 2022’ goal set by the Prime
Minister. Thus, EOGEPL is gearing up
to leverage our CBM ‘learning curve’ for
efficient and effective development of future
unconventional pursuits. At the same time,
we are keen to work with our peer CBM
operators to help them achieve a fast tracked
and cost-effective CBM development for
the benefit of the nation.
A detailed outline of EOGEPL assets in India/abroad
Conventional Assets
Mehsana CB-ON/3
Resources: Essar share: 0.65 mmbbls
Status: 2 fields on production, 2 more fields to be on
production by December 2017
Additional CBM upside
Thick lignito-bituminous seams
CBM potential: 2 TCF (ARI, 2013)
Vietnam
Resources: Essar share- 116 mmbbls / 378 BCF
Status: Processing of 2500 sq km 3D in progress.
Nigeria
Resources: Essar share- 12.9 2C + 87.8 mmboe
Prospective status: - Preparation for drilling of 1 well
Mumbai Offshore
Resources: Essar Share - 74.1 mmboe
Phase-II drilling of 1 well, resulted in marginal gas
discovery produced at c. 47,000 M3/ day.
24 Coal Insights, April 2018
The decision by the Union Cabinet
(April 11, 2018) allowing exploration and
exploitation of coal bed methane (CBM)
from areas under the coal mining lease
allotted to Coal India Limited (CIL) and
with the amendment giving CIL freedom to
engage CBM developers is welcome news.
With this, CIL will be able to fast track the
exploration and exploitation of CBM in
the Raniganj coalfield, through capable and
experienced CBM operators.
As per preliminary estimates, there is
a potential of 3 mmscmd gas production
from the CIL (ECL) leasehold areas in the
Raniganj coalfield area. And this assumed
3 mmscmd of gas coming on stream from
CIL will offset a certain percentage from
R-LNG imports.
The fiscal and socio-economic benefits
are overwhelming.
Every cubic meter of CBM will result in
♦♦ `8.00 subsidy saving to the fertilizer
sector;
♦♦ `1.6 of royalty to the state government;
♦♦ `22 of forex saving (considering the
LNG landed and transported prices);
♦♦ 30 tons of equivalent CO2 emission
(CG4 is ~25 times potent GHG than
CO2);
♦♦ Direct investment in excess of `10,000
crore;
♦♦ Indirect investment of approximately
`18,000-20,000 crore;
♦♦ In addition, there will be direct
socio-economic benefits to the local
population
Unconventional Assets
Raniganj CBM
Resources: 1.1 TCF 3P / 1.7 TCF 2C+Prospective (NSAI,
2016)
Status: Production of 1.0 mmscmd, 348 wells drilled, 5
GGS & 1 MCS, +300 km pipeline
CBM gas price of +$8.00 under new CBM policy scenario
CBM exploratory blocks
4 blocks
(Rajmahal E, Sohagpur NE, Talcher & IB Valley)
Resources: 8.5 TCF (DGH)
Status: Exploration phase I to start in Rajmahal &
Sohagpur from next FY.
Shale (Raniganj)
Resources: 8 TCF (ARI, 2015)
Status: Shale E&P program in place
Excellent synergy with existing CBM ops.
(Broad assumptions are that the landed
price of LNG, including regasification and
transportation, would be $12/mmbtu on
NCV basis and CBM price at $8.0/mmbtu
– which is the discovered price of Essar and
Reliance).
Please give an overview of your existing
project (all existing blocks in India and
overseas) and pipeline projects.
Essar Oil and Gas Exploration and
Production (EOGEPL) is the flagship
upstream exploration and production
business arm of Essar. EOGEPL has a
portfolio of high impact conventional and
unconventional coal bed methane (CBM)
assets in India and abroad. It has established
itself as a leader in unconventional CBM in
India, with its Raniganj East CBM block
being the first to cross the 1 million cubic
meters of gas per day.
The E&P outlook is positioned on:
Unconventional
♦♦ Unique CBM learning curve exposure
gained through the Raniganj East
CBM asset’s life cycle (exploration to
development and production);
♦♦ Replicate learning for cost-effective
and reliable performances for future
unconventional development (CBM,
shales, tight reservoirs).
Conventional
♦♦ Focus on exploration by co-partnering
with operators;
♦♦ Farm-down for risk sharing and/or early
value realisation.
What are Essar’s plans, going forward?
At this stage, our Raniganj CBM asset is
poised perfectly with improved economics,
based on recent CBM gas price discovery
and agreement on the CBM gas sale and
purchase agreement (GSPA) with GAIL,
in addition to the Urja Ganga pipeline
which is to be commissioned by end of
this year. Hence, our immediate focus
remains completion of the balance work
commitment of 152 wells for Raniganj
to produce ~2.5 mmscmd in the near
term. From here we are also planning to
bring at least 2 of our other CBM blocks
to monetisation and the reserve map
of India. At the same time, on a policy
Cover Story
announcement, we also plan to start
exploration for shale gas.
The above is in line with our strong
commitment to the import dependency
reduction goal and promotion of a gas-based
clean fuel economy model set by the Prime
Minister and to maximise gas production.
Having said that, the other E&P
scope of the country is immense. The
Hydrocarbon Exploration and Licensing
Policy (HELP) and Open Acreage
Licensing Policy (OALP) regime have
virtually unlocked the entire available
sedimentary basinal area of the country,
with access to all the available sub-surface
resources. Essar’s geo-scientific team is now
engaged in a detailed review of technical
and infrastructure data from a short-listed
set of blocks. At the same time, we are in
dialogue with a few upstream investors for a
joint venture model in the OALP bidding to
optimise our risk exposure.
What more policy-level changes are needed
for further exploration, production?
The GoI has already made three milestone
announcements, which have been received
with a lot of enthusiasm by the industry.
These are the Hydrocarbon Exploration &
Licensing Policy (HELP) & Open Acreage
Licensing Policy (OALP); Policy for Early
Monetization of CBM; and the Discovered
Small Field Round.
Going forward, the government is
on the threshold of few more crucial
announcements. These include the Policy
on Simultaneous Exploration & Production.
We particularly look forward to this policy
which will open up exploration of shale
in our Raniganj block and CBM in our
Mehsana oil and gas block. That apart, there
will be the Discovered Small Field Round II
and Bid Rounds on Production from Ageing
Fields & Enhanced Oil Recovery.
The above have created an extremely
conducive investment environment in the
E&P sector and we are keen to leverage our
extensive E&P experience and expertise
for accretion of new resources and their
production in the next 3-5 years. A few
other considerations will also play a vital role
in this regard. For instance, gas is proposed
to be brought under the GST regime along
with a unified transportation tariff which
will provide a trans-India market for the gas.
Further, a mechanism of sliding scale royalty
on CBM gas produce instead of a flat rate of
10 percent across all production tranches is
also on the anvil.
What are the demand and pricing scenarios
like now after arms’ length pricing was
introduced? How much have margins
improved post this?
We have discovered the gas price as per
the April, 2017 CBM Policy Guidelines
and have established a very remunerative
price for our Raniganj CBM gas, which
is in excess of $8.00/mmbtu. It is linked
to the Brent price of the three preceding
months and as per the RasGas LNG pricing
formula. We envisage doubling our revenues
by FY20 from CBM Raniganj.
We initialled the contract at the closing
hours of the year (March 31, 2018). This
has given us the single-most important
setting, ie, establishling our credentials as
a bankable player with robust technology
and commercial standards. With improving
crude price, we foresee this as a great
achievement for the future of the company
in general and Raniganj project in particular.
What was production in 2017-18 like?
What was Essar Oil’s CBM biz share
in this? Did the production meet the
government’s target?
CBM production in 2017-18 was around
350 mmscm. We had reached 1.0 mmscmd
of gas production in September, 2017 and
successfully supplied this gas to commission
the Matix Fertiliser Plant. However, in
November, 2017 our then anchor customer,
Matix Fertilizers, undertook a planned
shutdown for internal maintenance and
upgradation. To reduce the flaring of this
valuable natural gas resource, we started
immediate gas supplies to about 25 alternate
customers in the region on fallback basis and
also undertook a host of planned activities to
temporarily reduce the production.
What do you feel about the future scenario
of CBM in India? Where will it likely find
more takers?
Conventional gas production is dominated
in India by a handful of ageing conventional
fields while a limited number of new plays
have been added over the years. The current
scenario is expanding natural gas demand-
supply gap and there is a strong need to
decarbonise the fuel mix. Therefore, the
Prime Minister has given a strong mandate
of 10 percent reduction in hydrocarbon
import dependency by 2022.
There is a significant opportunity for
growth in unconventional gas resources like
CBM and futuristically shale gas (IEA,
2015). CBM development is already a
reality and thus may be a ‘Preferred Future
Energy Resource’.
CBM is crucial for eastern India with
this part of the country experiencing a
sharp increase in energy demand and
remaining a coal-dominated belt and
lacking in conventional oil and gas play.
Thus, there is an acute need to supplement
the energy demand in eastern India
through CBM.
The commissioning of the Urja Ganga
pipeline by end of 2018 will open up the
entire customer base ineEastern India
with an offtake capacity in excess of 10
mmscmd. One of the key targets for
the Urja Ganga pipeline is revival of the
fertiliser sector with an estimated offtake
of around 8 mmscmd across four plants
namely Sindri, Barauni, Gorakhpur and
Matix. CBM is already a reality and is
a viable option for reducing our import
dependency.
Going forward, what will be share of CBM
in total gas production in the next 3 years?
There is a prolific development chance for
CBM with three main areas of inputs. One
is the existing CBM blocks with an in-place
reserve of around 4 TCF which will give
10-12 mmscmd of gas in the near term (3-5
years).
Secondly, the development of CBM
by Coal India in its leasehold areas would
be another huge upside. With the coal
occurrence and properties well known in
such areas under the CIL leasehold, the
development and production window can be
fast-tracked.
Thirdly, output from the possible
development of shale gas in the region
is also one area that needs to be looked
into. 
Coal Insights, April 2018 25
 coal market fundamentals

the higher-quality 6,000 kcal/kg coal, which

Thermal coal offers is more usually sought by utilities in Japan

and South Korea.
Falling prices would help open up

volatile in April
India to Australia’s thermal coal supplies,
although there is little sign yet that this is
happening.
The bulk of coal supplied to India from
The measures, announced on April 16, Australia is higher-quality coking coal, used
Tamajit Pain
included banning the unloading of imported to make steel.

S
team coal offers from key shippers coal at some ports and tightening customs Australian thermal coal cargoes generally
such as South Africa and Australia clearances. struggle to find buyers in India given the
rose, while that from Indonesia eased While it’s still too early to discern a higher price and transport costs when
in April owing to diverse buying trends in definitive trend, China’s seaborne coal competing against supplies from the region’s
different regions, industry sources said. imports slumped almost 30 percent on other major exporters, Indonesia and South
Prices of South African coal (6,000 kcal/ weekly basis, sources said. Africa.
kg NAR) rose to $90 per ton FOB as of April It is possible that there are other factors However, coal prices may still be too
19, 2018 as against $85.25 per ton FOB on at play in the slump in seaborne imports, high to attract significant Indian interest,
March 30, 2018. Australian coal (6,300 kcal/ including lower demand in the usually softer given that the South Asian nation generally
kg GAR) was quoted at $94.50 per ton FOB period between the northern winter and is highly price-sensitive and cuts back on
on April 19, 2018 as against $92 per ton on imports when prices are strong, as they have
summer peaks.
March 30, 2018, according to information been in recent months.
But a decline suggests that the import
available with Coal Insights. Meanwhile, rising Indonesian coal
restrictions had an immediate and profound
Indonesian coal (5,900 kcal/kg GAR) production levels and lowered Chinese
impact, sources said.
prices stood at $75.75 per ton FOB on April demand have pulled down Indonesian coal
It’s believed the authorities in Beijing
19, 2018 against $79 per ton on March 30, prices by 22 percent over the last 45 days, a
took the steps to crimp some imports as part
2018. Prices of Indonesian coal (5,000 kcal/ trend that augurs well for plants that import
of efforts to boost domestic thermal coal
kg GAR) fell to $61 per ton FOB on April fuel.
prices and production.
19, 2018 against $64 per ton FOB on March China has restricted coal imports at
Prices for seaborne thermal coal were
30, 2018. many ports and plans to phase out many
more subdued for the 5,500 kcal/kg grade
China’s decision to impose fresh thermal plants, hurting demand. Indian
at Australia’s Newcastle Port, dropping
restrictions on imports of coal at some ports power generators are likely to increase
fractionally to end at $70 a ton on April 19.
have caused a sharp fall in inbound shipments imports because they face a supply crunch.
This grade of coal is generally preferred
of coal to the country. It would also ease pressure on Coal India
by Chinese buyers, because of its discount to
although it would increase dependence on
foreign fuel.
Steam coal prices FOB South Africa, Australia & Indonesia Experts said that prices are expected
$120 / Ton to decrease further, keeping potential
buyers away from the market as they are
$110 / Ton
waiting for lower rates. Public sector power
$100 / Ton companies would continue to follow the
Centre’s directive of not importing fresh
$90 / Ton consignments.
$80 / Ton As Indonesian prices fall, power plants
within a radius of 150 km from ports will find
$70 / Ton it remunerative to import. Ash content in
$60 / Ton
Indonesian coal is, at most, 10 percent while
Indian coal contains ash of 30-40 percent.
$50 / Ton Importing Indonesian coal makes sense
1-Mar-17

1-Jun-17

9-Aug-17
16-Apr-17

9-Nov-17

25-Dec-17

4-Mar-18

19-Apr-18
24-Mar-17

24-Jun-17

1-Sep-17

17-Oct-17

17-Jan-18

9-Feb-18

27-Mar-18
9-May-17

17-Jul-17

24-Sep-17

2-Dec-17

for coastal plants even when it is costlier than

Indian.
However, for pit-head plants, it is still
South African Coal (6,000 kcal/kg NAR) Australian Coal (6,300 kcal/kg GAR) a costlier option and will continue to be so
Indonesian Coal (5,900 kcal/kg GAR) Indonesian Coal (5,000 kcal/kg GAR)
unless prices fall drastically. 

26 Coal Insights, April 2018

coal market fundamentals

feedback from market participants, also

Coking coal offers tumble pointed to narrowing price spreads between

first tier brands.
This was because buyers had many

in April
options at low prices, with even end-users
who were not usually buyers of first tier coals
or looking to procure imported coals.
However, sources said current levels were
ideal for end-users, particularly buyers in
Coal Insights Bureau In China, the market was quiet with
India, where the looming monsoon season in
no fresh trades done, and offers were heard

T
he seaborne coking coal market June may spur small mills to restock to avoid
falling further.
tumbled further in April 2018 on logistics problems.
The lowest offer was for a Panamax
higher supplies as traders sold cargoes volume of semi-premium blend with 67-69
at prices lower than previously transacted India crude steel, hot metal
percent CSR at $187 per ton CFR China for
levels, according to market sources. production up m-o-m
a May laycan cargo.
Some traders sold cargo of premium low- Another offer for a premium mid-vol Meanwhile, during the month of March,
volatility hard coking coal at $185 per ton cfr with 67-69 percent was heard at $191 per 2018, crude steel production was seen at
China. ton CFR China. 9.07 mt, an increase of 7.6 percent over the
According to information available Another semi-premium blend with production figure of February, which was
with Coal Insights, the premium variety 67-69 percent CSR was heard indicatively seen at 8.43 mt.
was quoted lower at $183 per ton FOB offered at $190 per ton for a prompt loading, Cumulative crude steel production in
Australia on April 20, 2018 as against $196 end-April laycan cargo. the April-March period of 2017-18 stood at
per ton FOB Australia on March 30, 2018. Steelmakers said they were interested in 102.19 mt, up 4.3 percent over same period
Peak Down prices were quoted at $184 per restocking a first tier coal, but wanted to wait last year.
ton FOB Australia on April 20, 2018 as when expected prices would become more In March 2018, hot metal production was
compared to $197 per ton FOB Australia on stable. 5.90 mt, a rise of 12.4 percent over February
March 30. The steelmaker said that while rebar 2018 production of 5.25 mt.
Coking coal prices saw yet another steep and iron ore prices were strengthening on Cumulative hot metal production in the
fall as sellers dropped prices to liquidate their stronger demand, met coal remained weak April-March period of 2017-18 stood at
cargoes. from the excess supply available, and prices 66.46 mt, up 2 percent over the same period
The market in Asia remained weak with were thereby moving in a different direction last year.
buyers still having bargaining power over to steel and iron ore. This indicates marginal rise in
sellers as multiple cargoes remained unsold. Several trades in the week, as well as requirement for coking coal from Indian steel
mills in March.
However, coking coal imports into
Coking coal & met coke prices FOB India during April-March, 2017-18 stood
$400 / Ton $320 / Ton
at around 46.62 mt, up from 42.04 mt in
the same period last year, according to Coal
$365 / Ton $295 / Ton
FOB Prices Premium Low Vol, Semi Soft & Met Coke

Insights estimates.
$330 / Ton $270 / Ton
FOB Prices HCC Peaks Down Region

$295 / Ton $245 / Ton

Met coke import offers down
$260 / Ton $220 / Ton
Meanwhile, metallurgical coke import
$225 / Ton $195 / Ton offers decreased in April 2018, taking a
$190 / Ton $170 / Ton cue from coking coal prices that decreased
$155 / Ton $145 / Ton
internationally.
Imported met coke prices fell to $332 per
$120 / Ton $120 / Ton
ton CFR India on April 20, 2018 as against
$85 / Ton $95 / Ton
$352 per ton CFR India on March 30.
$50 / Ton $70 / Ton According to informed sources, domestic
1-Mar-17

1-Jun-17

9-Aug-17
16-Apr-17

9-Nov-17

25-Dec-17

4-Mar-18

19-Apr-18
24-Mar-17

24-Jun-17

1-Sep-17

17-Oct-17

17-Jan-18
9-Feb-18

27-Mar-18
9-May-17

17-Jul-17

24-Sep-17

2-Dec-17

met coke prices stood at around `25,000 per

ton (ex-plant) on the east coast of India and
around `27,000 per ton (ex-plant) on the
Prem Low Vol Semi Soft Met Coke HCC Peaks Down Region west coast of the country. 

Coal Insights, April 2018 27

 FEATURE

India’s Feb
coal imports
up 10% y-o-y
Sanjoy Bag

I
ndia’s coal and coke imports during
February 2018 through 31 major and
non-major ports are estimated to be up
9.82 percent compared to February 2017,
according to a compilation by Coal Insights,
based on monitoring of vessels’ positions and
data received from shipping companies and
various sources.
Imports during February 2018 stood at
15.98 mt (million tons) as compared to 14.55
mt imported in February 2017.
Of the total imports during February
2018, non-coking coal was at 10.89 mt,
slightly higher than 10.02 mt imported in the
same month last year. Coking coal imports
were recorded at 3.50 mt in February 2018
beating the February 2017 figure of 3.35 mt.
Metallurgical coke imports during
February 2018 were at 0.28 mt, against 0.20
mt imported in the same month a year ago.
However, petroleum coke imports decreased
to 0.48 mt in February 2018 from 0.72 mt in
February 2017.
PCI coal imports were at 0.70 mt in
February 2018, higher than the February
2017 imported figure of 0.23 mt. Anthracite
coal imports, on the other hand, increased to
0.12 mt in February 2018 against the import
figure of 0.02 mt in February 2017.
Imports of various types of coal in April-February 2017 & 2018 (in mt)
Coal Type Feb 2017 Feb 2018
Coking Coal 3.35
Non Coking Coal 10.02 10.89
Anthracite Coal 0.02
PCI Coal 0.23
Met Coke 0.20
Pet Coke 0.72
Total 14.55
Imports in February decreased in 38.83 mt recorded in April-February, 2017.
comparison with the previous month but Metallurgical coke imports during April-
were in line with the subdued trend witnessed February, 2018 were at 3.57 mt, down against
in the preceding months. According to data April-February, 2017’s import figure of 3.84
available, imports during February 2018 mt while petroleum coke imports also fell
decreased 18.43 percent as compared to to 10.35 mt in April-February, 2018 against
19.59 mt imported in January 2018. 13.21 mt in April-February, 2017.
In April-February, 2018, non-coking coal PCI coal imports were at 5.47 mt in
imports were at 132.63 mt, which were lower April-February, 2018 higher than 4.28 mt
than 134.22 mt imported in the same period imported in April-February, 2017. In April-
last year. Coking coal imports increased to February, 2018, anthracite coal imports were
43.10 mt in April-February, 2018 against recorded at 1.46 mt against 0.94 mt recorded
in April-February, 2017.
Total coal and coke imports during March
Apr-Feb 2017 Apr-Feb 2018
2017-February 2018 stood at 214.08 mt,
down just -0.34 percent compared to 214.81
3.50 38.83 43.10 mt imported in March 2016-February 2017.
134.22 132.63 During March 2017-February 2018 coking
0.12 0.94 1.46 coal imports stood at 46.30 mt. Non-coking
coal imports were at 144.91 mt. Met coke and
0.70 4.28 5.47
pet coke imports for March 2017-February
0.28 3.84 3.57 2018 were at 3.77 mt and 11.47 mt respectively.
0.48 13.21 10.35 On the other hand, anthracite and PCI
coal imports were recorded at 1.63 mt and
15.98 195.33 196.59
6 mt during March 2017-February 2018. 

28 Coal Insights, April 2018

FEATURE
CIL’s FY18 production up
2.4%, Mar output hits record
Coal Insights Bureau
C
oal India Ltd (CIL) has achieved a 2.4
percent growth in coal production to
567.37 million tons (mt) in 2017-18,
compared to 554.14 mt reported for the last
fiscal (2016-17), according to data released by
the company. Production during April-March,
2017-18 was about 95 percent of the revised
target of 600 mt set for the year under review.
Altogether, 6 of the 8 mining subsidiaries
of CIL have recorded an increase in
production during FY17-18, while the
remaining 2 have suffered a drop on a year-
on-year basis.
In March 2018, CIL production was up
9.39 percent to 72.28 mt, compared to 66.07
mt achieved in March 2017, the data showed.
There was also an increase of 32.72 percent
on a month-on-month basis, compared to
54.46 mt achieved in February 2017.
Incidentally, the March 2018 production
was the highest ever achieved by the miner in
any single month. It was also higher than the
target of 68.68 mt set for the month.
March offtake up 5.52% y-o-y
Total offtake of Coal India Ltd (CIL) stood
at 55.19 million tons (mt) in March 2018, up
5.52 percent as compared to 52.3 mt achieved
in March 2017, according to data released by
the company. On a month-on-month basis,
CIL subsidiary-wise production for March 2018 (in mt)
12
10
8
6
4
2
0
ECL BCCL CCL NCL WCL
Target Actual
offtake in March 2018 was up by 10.44
percent compared to 49.97 mt achieved in
February 2017. The target set for March
2018 was 58.41 mt and the achievement
during the month was 95 percent.
During April-March of 2017-18,
CIL achieved total offtake of 580.28 mt,
about 6.83 percent increase over 543.17 mt
achieved during the same period last year.
Total offtake during April-March, 2017-18
was about 97 percent of the target of 580.28
mt set for the period under review.
OBR grows 2.4% y-o-y in FY18
CIL recorded 2.44 percent growth in
overburden removal (OBR) in 2017-18 over
the last year, according to data available with
Coal Insights. Total OBR stood at 1,184.64
million cubic meters (mcm) in 2017-18,
against 1,156.37 mcm reported in 2016-17.
Jharia, Raniganj Master Plan
CIL incurred an expenditure of `287.32 crore
on the Jharia and Raniganj Coalfields Master
Plan during 2017-18 (till January 1, 2018),
informed Piyush Goyal, Minister of Coal and
Railways, in a written reply to the Rajya Sabha.
As per the provisions of the Master Plan,
CIL was to contribute `350 crore per annum
from its internal resources and the expenditure
beyond `350 crore is to be provided from the
central sector schemes.
CIL subsidiary-wise offtake for March 2018 (in mt)
14
12
10
8
6
4
2
0
SECL MCL NEC
ECL BCCL
Kumar assumes
charge as CMD, CIL
S
uresh Kumar
has assumed the
additional charge as
Chairman-cum-
Managing Director
(CMD) of Coal
India Limited with
effect from April 23, 2018, the company
said in a BSE filing.
“The Ministry of Coal vide their
letter…dated 20-04 2018 has entrusted
the additional charge of CMD, CIL to
Suresh Kumar, Additional Secretary,
MoC. He has assumed the additional
charge as CMD, CIL, with effect (from)
23.04.2018 (FN),” the statement said.
Kumar succeeded Gopal Singh, the
CMD of Central Coalfields Limited
(CCL), who was given additional charge as
the CMD of the coal behemoth last year.
“Due to delay in land acquisition by state
agencies of Jharkhand and West Bengal,
the expenditure on account of the Master
Plan has not exceeded `350 crore and was
`312.93 crore in 2015-16, `271.23 crore in
2016-17 and `287.32 crore in 2017-18 (till
1.1.2018) which was funded from CIL,”
Goyal said.
The Master Plan deals with expenditure
on fire, subsidence, rehabilitation and
diversion of surface infrastructure in Jharia
and Raniganj Coalfields within the leasehold
areas of ECL and (BCCL. s
CCL NCL WCL SECL MCL NEC
Target Actual
Coal Insights, April 2018 29
FEATURE

Month-wise lignite production in

NLC’s lignite production 2017-18 and 2016-17 (in mt)

Month 2017-18 2016-17

down 10% in FY18

April 0.38 0.4
May 0.88 1.41
June 2.52 2.26
July 0.85 1.95
August 2.44 2.06
September 2.65 2.91
October 1.82 1.98
November 1.73 2.21
December 2.74 2.78
January 2.63 3.14
February 2.55 2.78
March 3.54 3.68
Total 24.73 27.56

Valley Corporation (DVC) for the latter’s

Coal Insights Bureau
Raghunathpur project. The impasse over
the ` 5,500-crore joint venture (JV) between
DVC and South India-based power major
NLC India (NLCIL) for the 1,200-MW
Raghunathpur thermal power plant thus has
ended.
NLCIL, last month, had informed the
stock exchanges that DVC had communicated
that the company was no more interested in
pursuing the JV agreement and would like
to call it off on mutually agreed basis. Both
percent lower than the month’s target of
companies had announced around two years
2,061.25 MU.

L
ignite production by NLC India
during 2017-18 stood at 24.73 mt,
down 10.26 percent as against 27.56
mt produced in 2016-17, according to official
data.
Meanwhile, lignite production by NLC
in March 2018 was down 3.8 percent at
3.54 million tons (mt) compared to 3.68 mt
achieved in the same month of last year.
However, the March production was
higher than the monthly target of 3.35 mt set
for the month, the data showed.
Similarly, on a month-on-month basis,
production in March 2018 was higher than
2.55 mt in February 2018.
Meanwhile, total power generation by
NLC was down by 4.25 percent to 1,880
million units (MU) in March 2018, compared
to 1,963.53 MU in the corresponding month
of last year.
The March generation was also 8.79
8% drop in OBR in March
NLC India (formerly Neyveli Lignite
Corporation) has posted 8.18 percent decline
in overburden removal (OBR) in March 2018
over the same period last year, according to
official data.
Total OBR in March 2018 stood at
18.84 million cubic metre (mcm), compared
to 20.52 mcm achieved in March 2017, the
data show.
On a monthly basis, total OBR in March
2018 was up 19.46 percent compared with
15.77 mcm in February 2018.
Meanwhile, the achievement in March
2018 was 18.42 percent higher than the
target of 14.09 mcm set for the month.
Co walks out of DVC JV
Meanwhile, NLC has officially walked
out of the joint venture with Damodar
back that they had signed an agreement for
the formation of a JV company for acquiring
Kolkata-based DVC’s Raghunathpur
thermal power station.
Under the JV scheme, NLC India
was to acquire 74 percent stake in the
Raghunathpur power project with DVC
retaining the remaining 26 percent. The JV
had been a survival route for DVC which had
been incurring losses due to its much-touted
Raghunathpur power plant.
However, due to a delay in getting
clearance for the proposal from the West
Bengal government, the JV could not get a
head start, ultimately coaxing NLC to walk
out. The Centre, West Bengal and Jharkhand
are equal shareholders of DVC.
While both the Centre and Jharkhand
government had approved the JV scheme, the
Bengal government held back its approval
since it wanted DVC to resolve a pay-related
dispute with a section of its employees. 

30 Coal Insights, April 2018

FEATURE

Performance of SCCL before and

SCCL to invest `12,000 cr

after formation of Telangana
Before
In
Department formation of Growth

in 5 years
2017-18
Telangana

Coal 47.9 million 64.6 million

34.80%
Dispatch tons tons

Coal 50.4 million 62.0 million

22.90%
Production tons tons

169 million 396 mn

O.B dispatch 134.60%
cubic mtrs cubic mtrs

`22,667
Sales `11,298 crore 90%
crore

`1,200
Profits `419 crore 186.40%
crore

Source: SCCL

Meanwhile, the Jaipur TPP has achieved

91.1 percent PLF in 2017-18, ranking 5th in
the thermal power sector in the country.
“Out of more than 500 Thermal power
plants nationally it may be noted that the 18
month old STPP stood in 5th position,”
Singareni thermal power plant produced
9,575 million units (MU) of power in 2017-
18, out of which 9,004 MU of power was
supplied to Gajwel power grid.

Performance gets a boost

Coal Insights Bureau
be accompanied by a substantial investment
of `12,000 crore on development activities
post-Telangana
The performance of SCCL has showed
a remarkable improvement following the
formation of a separate state in Telangana,
according to a release issued by the company.
“After the formation of Telangana state,
Singareni stood out as one of the leading

B
uoyed by the healthy growth in
revenues and margins, Singareni
Collieries Company Ltd (SCCL) has
earmarked an investment of `12,000 crore for
development activities and aims to open 13
new projects over the next 5 years, according
to information available with Coal Insights.
The new projects would increase the coal
production capacity to around 85 million
tons (mt) within the timeline from the
current level of around 62 mt.
The miner, which has increased its
turnover by `5,000 crore to `22,667 crore in
2017-18, has also planned to reach a topline
of `34,000 crore by 5 years.
Company Chairman N Sridhar said in a
statement that the increase in turnover would
over the next 5 years.
SCCL achieved a record despatch of 64.6
mt of coal in 2017-18, a 6.2 percent increase
over 60.8 mt recorded for 2016-17.
Co to add 1,300 MW capacity in 5
years
SCCL, which has successfully commenced
its 2x600 MW thermal power plant at Jaipur,
Telangana, has planned to add 1,300 MW
capacity within the next 5 years.
The miner is going to start construction
work for an 800 MW thermal power plant
in May 2018 and has also planned to come
up with a 500 MW solar power plant by 5
years, taking the total capacity to 2,500 MW,
a company statement said.
companies in the country… Under the
leadership of the company’s Chairman and
Managing Director, N Sridhar, the entire
staff and workers worked hard with a sense
of togetherness and this is the reason that
Singareni could achieve this growth,” the
statement said.
Comparing the company’s performance
after and before the formation of Telangana
in 2013-14, it said that coal despatches
increased by 34.8 percent during the last 4
years, while production went up by 22.9
percent.
Also, sales jumped by 90 percent to
`22,667 crore, while profit increased by
186.4 percent to `1,200 crore during the
period under consideration.

Coal Insights, April 2018 31

FEATURE
`292.52 cr spent to improve coal
evacuation
SCCL has spent `292.52 crore in 2017-18
for upgrading transport infrastructure within
its command area to improve coal evacuation
by various rail projects, said Piyush Goyal,
Minister of Coal and Railways, in a written
reply to the Lok Sabha.
The investments made by SCCL in
FY18 showed a healthy rise over `98.96 crore
recorded for 2016-17, official data showed.
The projects being executed by Railways
in the command area of SCCL on deposit
basis are the Bhadrachalam Road to Sattupalli
railway line and Goleti railway siding.
The railway projects currently being
executed by SCCL are the tacks for the
2X600-MW STPP at Jaipur, and the
Bethampudi railway station to the Koyagude
railway siding for KK1 CHP, Mandamarri.
Co achieves production, off-take
targets in FY18
SCCL has achieved a record production
of 62.01 million tons (mt) in 2017-18,
registering a 1.11 percent growth over 61.34
mt achieved during 2016-17, according to
data released by the company.
Production in March 2018 stood at 7.37
mt, about 2.63 percent increase over 7.18 mt
achieved during the same month last year,
the data showed.
The miner achieved 100 percent of the
production target set for the year under
review.
Likewise, the Telangana-based miner
also put up a great show in its offtake
performance. Total coal offtake during 2017-
18 stood at 64.62 mt, a 6.23 percent increase
over 60.83 mt achieved during last year.
The offtake achieved during 2017-18
was 104 percent of the target of 62 mt set
for the year.
However, total offtake during March
Offered and sold quantities in SCCL’s linkage auctions (in mt)
Offered
Tranche I 7.43
Tranche II 13.46
Supplementary 1.76
Tranche III 2.31
32 Coal Insights, April 2018
SCCL CMD bags award
C hairman and Managing Director
of Singareni Collieries Company
Ltd (SCCL) N Sridhar has been
conferred the prestigious “Asia Pacific
Entrepreneurship – 2018” award in
recognition of his “astute leadership and
business development” initiatives.
The award, instituted by Enterprise
Asia Company, is a regional award given
for outstanding entrepreneurship in both
private and government sectors. Sridhar
is the first CMD in the coal industry to
receive this award, a company statement said.
Previously, Sridhar won various prestigious awards for his leadership and efficiency,
including the Golden Peacock International award at Dubai in 2016, National
Performance Award in 2015, Excellence in Cost Management Award in 2016 and
2017.
Sridhar took over as the CMD of SCCL in 2015 after the formation of Telangana
state.
During this tenure, SCCL achieved 15 percent growth in production in 2015-16.
Also, in 2017-18, SCCL achieved 6.2 percent growth in coal despatches, 26.9 percent
growth in overburden removal, 203.8 percent growth in profits at `1,200 crore, and
27.8 percent growth in turnover at `22,667 crore.
He was also instrumental in the launch of the Singareni Thermal Power plant
which was dedicated to the nation in 2016.
2018 was 6.36 mt, marginally lower than 76% allotment in tranche III
6.47 mt achieved during the same month last linkage auctions
year. SCCL has achieved a high 76.41 percent
Apart from achieving the annual targets allotment in the tranche III linkage auctions
for production and offtake, SCCL achieved conducted recently for the non-regulated
a record turnover of `22,667 crore and total sectors, according to information available
profit of `1,200 crore during 2017-18, a with Coal Insights.
company statement said. SCCL, which conducted Tranche III
In 2016-17, total turnover stood at auctions on March 20-29, 2018, offered 2.31
`17,743 crore, implying a growth of `5,000 million tons (mt) of linkages for cement,
crore (or 27.8 percent) in the topline during captive power (CPP) and Others sectors. Of
2017-18. The profit growth this year was the total offering, 1.76 mt was sold, company
a stupendous 203 percent over `395 crore sources said. This was the highest percentage
recorded for 2016-17. of allotment in any linkage auction by SCCL
so far, the sources said.
Earlier, the Telangana-based miner had
witnessed 20 percent allotment in Tranche I,
Sold % 41 percent in Tranche II, and 46.5 percent in
1.49 20.1
Supplementary Tranche.
Altogether, SCCL has so far offered
5.52 41.0 24.96 mt of linkages to 4 sectors, ie cement,
0.82 46.6 CPP, sponge iron and Others, in four
tranches. Of this, 9.589 mt (or 38.4 percent)
1.77 76.6
has so far been sold. 
FEATURE

India’s
FY18 power
capacity
addition at
9,383 MW
Coal Insights Bureau Meanwhile, the country had added 3,740 on March 31, 2018), Mejia STPP unit 1
MW power generation capacity during (thermal) of 660 MW (commissioned on

I
ndia has added 9,383 MW (provisional) March 2018, according to a report released March 31, 2018), Lara TPP unit 1 (thermal)
power generation capacity during April- by the Central Electricity Authority (CEA). of 800 MW (commissioned on March 23,
March, 2017-18, according to a report Power generation capacity addition during 2018), Rayal Seema TPP unit 6 (thermal)
released by the Central Electricity Authority March 2017 stood at 4,454 MW. The power of 600 MW (commissioned on March 12,
(CEA). generation capacity addition target for March 2018), Baruni Ext TPP unit-9 (thermal)
Power generation capacity addition 2018 was set at 270 MW. of 250 MW (commissioned on March 28,
during the 2017-18 fiscal was down 30 Seven power projects were added during the 2018), Binjikote TPP unit-2 (thermal) of 300
percent at 9,383 MW (provisional), compared period under review, which included 6 thermal MW (commissioned on March 28, 2018)
to 13,466 MW (provisional) recorded for the and 1 hydro. These are: Kudgi STPP PH-1 and KishanGanga HEP unit 1, 2, 3 (hydro)
corresponding period of 2016-17. unit 3 (thermal) of 800 MW (commissioned of 110 MW, commissioned on March 13, 21,
30, 2018, respectively. There was no nuclear
Monthly capacity addition during FY13 to FY18 (in MW) project added during March 2018.
Of the total installed capacity of
Months 2017-18 2016-17 2015-16 2014-15 2013-14 2012-13
344,002.39 MW in the country as of March
April 2,256 1,260 965 535* 282 1,760 31, 2018, thermal power generation capacity
May 1,056 250 - 2,716 1,570 1,070# stood at 222,906.59 MW (197,171.50 MW
coal-fired, 24,897.46 MW gas-fired and
June 170 65 2,315 979 660 2,376
837.63 MW diesel-fired). Nuclear power
July NA 540 500 769 - 950 generation capacity stood at 6,780 MW,
August NA 406 871 3,320 921 550 while hydro generation stood at 45,293.42
MW and renewables at 69,022.39 MW.
September NA 730 1,951 660 1,365 870
October NA NIL 1,444 600 530 1,400 Power generation up 4% in FY18
November 157 1,535 - 364 1,635 803 India’s total power generation increased by
December - 1,960 2,280 669 1,765 15 Power generation for 2017-18
and 2016-17
January 850 1,112 2,296 2,020 700 877
Generation (in billion units)
February 1,154 1,154 660 2,305 2,711 2,864 Type
2017-18 2016-17
March 3,740 4,454 9,795 6,631 5,286 7,028
Thermal 1,036.68 994.23
Total 9,383 13,466++ 23,976* 21,566 17,425 20,563 Hydro 126.130 122.378
# Figures may not tally due to revision of data by CEA. Nuclear 38.247 37.915
* As per CEA data, the total capacity addition in April-November was 8,346 MW.
* As per CEA data, the total capacity addition in April-July, 2016 was 2,340 MW. Bhutan Import 0.486 0.562
++ As per CEA data, the total capacity addition in April-January, 2016 was 7,858 MW.
All India 1,201.543 1,155.085
+++ As per CEA data, the total capacity addition in April-November, 2015 was 8,346 MW.

Coal Insights, April 2018 33

FEATURE

Indian power plants’ coal stocks The number of plants facing critical coal stocks position of
less than 7 days stood at 11, 12, 11 and 2 as on April 18, 2018,
up 7% m-o-m April 12, 2018, March 18, 2018 and April 18, 2017, respectively.
The number of plants facing super-critical coal stocks position
of less than 4 days stood at 11, 15, 16 and 1 as on April 18, 2018,
C oal stocks at about 100 thermal power plants (TPS)
monitored by the Central Electricity Authority (CEA)
were up 6.63 percent on a month-on-month (m-o-m) basis on
April 12, 2018, March 18, 2018 and April 18, 2017, respectively.
In terms of days, stocks of coal on April 18, 2018, April 12,
2018, March 18, 2018 and April 18, 2017, respectively were 11,
April 18, 2018.
10, 10 and 17 respectively.
The stocks of coal at the 100 TPS stood at 16.71 million tons
(mt) as on April 18, 2018, an increase of 1.15 percent compared Coal stocks position at power plants
to 16.52 mt as on April 12, 2018 on a w-o-w basis but were on various days
down 34.13 percent compared to 25.37 mt recorded a year ago,
April 18, April 12, March 18, April 18,
on April 18, 2017. Meanwhile, coal stocks at these power plants Date
2018 2018 2018 2017
as on April 18, 2018 were up by 6.63 percent from 15.67 mt
Stock (in mt) 16.71 16.52 15.67 25.37
recorded a month ago on March 18, 2018.
Of the total stocks at the TPS as on April 18, 2018 domestic Days 11 10 10 17
coal stocks stood at 16.168 mt, up 1.62 percent from 15.909 mt as Imported (in mt) 0.543 0.611 0.423 1.301
on April 12, 2018, on a w-o-w basis. The stocks as on April 18, Domestic (in mt) 16.168 15.909 15.251 24.075
2018 were down 32.8 percent from 24.075 mt as on April 18, 2017
Critical plants (no. of
on a year-on-year (y-o-y) basis, and were up 6 percent from 15.251 11 12 11 2
plants)
mt as on March 12, 2018 on a month-on-month (m-o-m) basis.
The stocks of imported coal at the TPS were down 11.12 Super critical plants
11 15 16 1
(no. of plants)
percent at 0.543 mt as on April 18, 2018 against at 0.611 mt
as on April 12, 2018. On a y-o-y basis, stocks were down 58 Critical plants pit head
0 0 0 0
(no. of plants)
percent from 1.301 mt as on April 12, 2017. The imported
stocks on April 18, 2018 were up 28.36 percent from 0.423 mt Super critical plants pit
0 0 0 0
on March 18, 2018 m-o-m. head (no. of plants)

All India month-wise PLF (%) Power generation for select months in 2016 and 2017 (in BU)
Month 2016-17 2017-18 Monthly generation
Type
April 66.81 65.59 March 2018 February 2018 March 2017

May 62.15 64.39 Thermal 92.64 82.58 90.33

June 73.24 70.15 Hydro 9.387 5.70 7.91

Nuclear 3.670 3.27 3.77
July 67.21 68.45
Bhutan Import 0.141 0.062 0.69
August 69.91 66.17
All India 105.835 91.609 102.7
September 57.93 60.69
October 59.93 59.69
percent compared to 102.7 BU during March higher than 62.59 percent recorded for
November 60.5 59.47
2017. February 2018. Sector-wise break-up of
December 59.97 59.05 On a month-on-month basis, India’s March 2018 stood at 78.47 percent for
January 60.14 62.47 thermal power generation during March central, 68.66 percent for states and 52.29
February 61.53 62.59
2018 was up 15.52 percent compared to percent for private plants.
91.609 BU in February 2018. During February 2018, the sector-wise
March 63.12 65.33
break-up stood at 76.59 percent for central,
PLF of thermal plants up in March 61.76 percent for states and 52.55 percent for
4 percent to 1,201.543 billion units (BU) The plant load factor (PLF) of thermal power private plants.
during 2017-2018, compared to 1,155.085 plants in March 2018 was 65.33 percent, Meanwhile, a year ago, during March
BU in 2016-17, according to CEA data. against 63.12 percent in the same month of 2017, sector-wise break-up stood at 77.52
Meanwhile, March 2018 power the previous fiscal, as per provisional CEA percent for central, 56.09 percent for states
generation stood at 105.835 BU, up 3.05 data. PLF for March 2018 was marginally and 58.48 percent for private plants. 

34 Coal Insights, April 2018

FEATURE
Coking coal demand-side
management needs a look: N C Jha
W
ith limited availability of domestic
coking coal in the required
quality and its spiraling prices in
the international markets, it is necessary to
look at the demand-side management. It is
particularly more important to do so when
we look at the current consumption rate of
coke in the Indian steel plants vis-à-vis the
global best practices.
“The National Steel Policy endeavours
to pursue with the integrated steel plants to
reduce their coking coal consumption to bring
them at par with the global best practices
by resorting to auxiliary fuel injection
technologies like pulverized coal injection
(PCI) coal dust injection (CDI) or natural
gas/syngas injection along with PCI/CDI,”
N C Jha, Advisor (Coal), Steel Authority
of India Limited (SAIL) and former CMD
of Coal India Limited, indicated on the
sidelines of a coking coal summit.
Price concerns
Historically, prices of coking coals have seen a
downward trend since 2012 ($252.1 per ton)
till 2015 ($90 per ton). However, from the
second half of 2016, there has been a steep
rise in prices, at times touching $260 per ton.
Coking coal prices in international markets
continue to tread higher since December
2017 on the back of supply tightness in
Queensland, Australia. Difficulty in securing
loading slots in Queensland for contract
cargoes continued to tighten global supplies
till late 2017. In March 2018, prices hovered
in the range of $220-225 per ton.
Soaring prices of internally traded coking
coal is a cause for concern for the Indian steel
producers due to their competitiveness in the
world market for steel products.
Hence, due to the limited availability of
the material, it is important to look at the
demand management side.
Need for coking coal
India has become the second-largest steel
producer in the world with a production of 91
million tons (mt) and a capacity of 125 mt in
FY2015-16. The low per capita consumption
of steel, at 61 kg against the global average of
208 kg proves there is significant potential for
growth in steel demand and consumption. As
per the National Steel Policy (NSP), 2017,
crude steel demand will grow three-fold in
the next 15 years to reach a demand level
of 255 mt by 2030-31 and it is anticipated
that a crude steel capacity of 300 mtpa will
be required by that same period, based on the
demand projections. Even with this demand
of crude steel by 2030-31, India’s per capita
finished steel consumption would reach
only 158 kg. However, in order to achieve
the targeted 300 mt of crude steel output by
the stipulated period will require extensive
mobilization of raw materials, funding,
manpower and infrastructure, including land.
As per the NSP, 2017, the demand for
coking coal is expected to touch 161 mtpa –
that of non-coking coal PCI is estimated to
be around 31 mtpa and the non-coking coal
requirement through the direct reduced iron
(DRI) route will be 105 mtpa by 2030-31.
Coal Insights, April 2018 35
FEATURE
Coking coal availability
The current dependence on imported coal is
about 85 percent, which, as per the NSP, is
supposed to be brought down to 65 percent
by 2030-31. “This indicates that 35 percent
of the total requirement of the 161 mtpa, ie
56.35 mtpa, needs to be met from domestic
sources by this time period of 2030-31,” says
Jha, adding that “this is a great challenge
for both the steel and coal producers of the
country”.
The NSP aims to increase the availability
of coking coal through overseas assets
acquisition, establishing a sufficient number
of coking coal washeries, facilitating allocation
of indigenous coking coal reserves exclusively
to the coking coal sector, with no diversion
of such coal to any other sector, facilitating
exploration and optimal utilisation of deep-
seated coking coal reserves, expeditious
implementation of the Jharia Action Plan to
improve the domestic availability of coking
coal and taking suitable fiscal measures to
meet the rising requirement in the steel
sector.
Though India is fortunate to have the
third largest share of coal resources in the
world, the quantity is very limited. The
commodity is categorized into 3 segments,
prime, that can form coke for metallurgical
purposes without blending with other coals;
medium coking coal, that require blending
with prime coking coal for coke-making;
and semi coking coal that is weak in coking
properties but can be blended in small
proportions with prime coking coal for the
purpose of coke-making.
Prime coking coals are available only in
the upper seams (seams IX and above) of the
Jharia coalfields which have been exploited
and only the remnants are now available.
CIL's production plans (in mtpa)
Subsidiary Total
ECL 62 0.25
BCCL 53 45.78
CCL 133.5 24.4
NCL 110
WCL 60 0.52
SECL 239.6 0.14
MCL 250
Total 908.1 71.12
36 Coal Insights, April 2018
Substantial resources of medium coking coals
with high ash content are available in various
coalfields in the lower seams of Jharkhand
(Jharia coalfields, East Bokaro, West Bokaro,
Ramgarh, north and south Karanpura), West
Bengal (Ranigunj), Madhya Pradesh (Pench,
Kanha and Sohagpur). Semi coking coals are
sourced from limited areas in West Bengal
(Ranigunj), Jharkhand (Ramgarh) and
Chhattisgarh (Sonhat).
Total coking coal reserves, as per GSI
data, are at 34.53 billion tons (bt) with prime,
medium and semi being at 5.21 bt, 27.51 bt
and 1.71 bt respectively.
Coal India plans
Coal India (CIL) plans to increase its
production to 908 mt by 2019-20.
As can be seen from the above table,
around 71 mt of coking coal is planned to
be produced, but due to non-availability of
adequate washing capacity in CIL, most of
these are being supplied to the power plants
and this scenario is likely to continue until
CIL’s washery construction programme
gains ground, observes Jha.
Coking coal washing scenario
Most of the coking coals produced currently
and projected to be produced in the future
are of inferior grade with an ash content
generally exceeding 35 percent. The current
washing capacity of CIL for coking coals is
around 23.3 mtpa. The company has plans
to set up new coking coal washeries to meet
the requirement of coking coal for steel
producers. But, as the Indian coking coals
have very poor washability characteristics,
the planned washeries will be able to wash at
18-19 percent ash content.
“At present, the total installed capacity of
Non-coking coal
Coking coa
G10 and superior G11 and inferior
44.75 17
7.22
45.57 63.5
96 14
59.48
20.42 219
1.5 248
274.94 562.04
the coking coal washeries in India is about
31 mtpa and these units operate at a mere
20-30 percent capacity utilization because
most of these were set up 4-5 decades ago
and no improvements were made in them
with the changing quality of feed over the
years. These washeries were planned with
feed from superior grade,” says Jha.
CIL plans to set up 18 new coking coal
washeries with a total throughput capacity
of 48.2 mtpa in its various subsidiaries under
the built-operate-maintain (BOM)/build-
own-operate (BOO) concepts. Three of
these washeries at BCCL, with a combined
capacity of 11.6 mtpa, are likely to be
commissioned shortly.
Another three coking coal washeries,
with a total capacity of 7 mtpa, are in various
stages of construction and are likely to be
commissioned by 2019-20. Additionally, one
new coking coal washery with a throughput
capacity of 3.5 mtpa is planned to be set up at
the Tasra project of SAIL.
Taken together the above installed
capacity and the existing washeries of Tata
Steel, it would amount to 59.4 mtpa, which,
at an average yield of 45-50 percent, can
provide clean coals at 18 percent ash to the
extent of 27-30 mtpa.
As most of the existing washeries would
be replaced with new ones, there still remains
much gap between the estimated demand of
coking coal from indigenous sources and its
likely availability.
“Further, it is also important to examine
whether all the domestic coal with 18-19
percent ash can be blended with imported
coal at the steel plants from the point of
view of blast furnace productivity and related
costs,” Jha indicates. 
FEATURE

India’s
sponge iron
production
down 10%
y-o-y in Feb
Coal Insights Bureau an average 5.27 percent month-on-month Durgapur, Raigarh, Raipur and Rourkela by
in all major markets, according to the data 6.40 percent, 1.99 percent, 8.01 percent and

T
he gross production of sponge iron has available with Coal Insights. 4.52 percent respectively. 
declined by 10 percent in February Offers increased in the market of
2018 as compared to February 2017,
according to provisional steel ministry data. Prices of sponge iron in various markets during the past six months
The same trend is reflected in the (Rs/ton)(Prices are basic, exclusive of taxes)
cumulative period of April-February 2018
Price Rs./Ton Price Rs./Ton Price Rs./Ton Price Rs./Ton Price Rs./Ton
where the overall production of sponge iron Name of the as on as on as on as on as on
has shown a decline of 3.5 million tons (13.4 market
25 April 2018 24 April 2018 17 April 2018 26 March 2018 27 October 2017
percent) compared to the cumulative period
last year. Mandi
- - - - -
Partially compensating this fall, imports Govindgarh
of sponge iron in April-February 2018 have Durgapur 21,600 21,300 21,000 20,300 17,100
increased by 0.069 million tons compared to Jaipur - - - - -
the same period last year, the data showed.
Raigarh 20,500 20,200 20,700 20,100 15,900
April prices increase 5.27% on Raipur 22,900 22,800 23,200 21,200 16,900
average m-o-m Rourkela 20,800 20,700 20,800 19,900 16,000
Sponge iron offers in India increased on Source: Compilation from various sources & Coal Insights data

Sponge iron production data (in ‘000 tons)

February 2018 February 2018 vis-à-vis January 2017 April-February
Production 2017-18 2016-17 Variation February 2018 January 2018 Variation 2017-18 2016-17 Variation
(Provisional) (Final) % (Provisional) (Provisional) % (Provisional) (Final) %
ESSAR 385 326 18.1 385 380 1.3 3792 2904 30.6
JSW 212 186 14 212 240 -11.7 2219 2092 6.1
JSPL 109 150 -27.3 109 115 -5.2 1204 1629 -26.1
Others 1406 1688 -16.7 1406 1419 -0.9 15621 19750 -20.9
Gross
2112 2350 -10.1 2112 2154 -1.9 22836 26375 -13.4
production
Less: IPT 883 904 -2.3 883 896 -1.5 9295 10334 -10.1
Production for
1229 1446 -15 1229 1258 -2.3 13541 16041 -15.6
Sale
Source: Steel Ministry

Coal Insights, April 2018 37

 EXPERT SPEAK

The time left is hardly two years and a

Coal India's dismal performance massive jump of 450 mt, which means
increasing the production by 80 percent,

Will coal behemoth achieve is impossible to achieve.

♦♦ The acute power shortage shall leave this
country in perpetual darkness and how

1 billion tons by 2020?

can the government promise that whole
of India shall be electrified by 2019
when there will be minimum thermal
power generation? The NITI Aayog
says that in the coming 25 years, thermal
J P Panda the 32.63 mt deficit, it will be approximately
power will be still the dominant power
7,000 MW. The growth is even less than last

F
ailure to achieve source with nearly 60 percent of the
year’s which was 2.9 percent.
the target for 2 total generation’s share. Renewables will
Let us compare the performance of
consecutive years ultimately contribute to about 40 percent
Coal India in the year 2016-17. The salient
in a row shows how the of the power generation. Meanwhile, the
features are that against a target of 598.61
coal ministry and Coal country is being led to bankruptcy with
mt Coal India achieved only 554.13 mt and
India are crumbling. The more and more imports of thermal coal,
the shortfall of 43.48 mt against the target
public sector maharatna was 7.26 percent. The growth in production huge unemployment due to stagnancy in
company is being in 2016-17 over 2015-16 (538.75 mt) was a coal and thermal power generation.
systematically allowed to collapse, similar negligible 2.9 percent.
to Air India, so that the private sector takes CIL is failing to achieve its target year What does it means in terms of power
over again. Indeed the signs are imminent as after year. The reasons are thus: generation loss if CIL does not reach the
the Cabinet, in the name of competition, has target in 2 consecutive years?
♦♦ The non-appointment of CMDs of
permitted commercial mining. Continuous production shortfall of
subsidiary companies and Coal India
If commercial mining is being allowed nearly 80 mt at CIL against the target in the
in time has cost this nation very dearly.
on the basis of per ton tariff, why didn’t the last 2 years means that in terms electricity
Most of the subsidiaries and Coal India
government do the same to captive blocks? generation nearly 16,000 MW of power
have remained headless from time to
They could have earned huge money from could not be produced. Or we have to import
time. Even today CIL is being managed
the per-ton cess and the catastrophe of de- as much thermal coal of equivalent GCV
by an acting chairman. Hardly any
allocation could have been avoided. The captive to sustain our power houses to produce the
minister is currently functioning at the
industries would have grown and we would not same amount of electricity. In either case
Centre as everyone is in election mode,
have lost employment to Indian workers and what a colossal loss to the nation!
be it UP, the North East or Karnataka.
there would have been less non-performing The minister, Piyush Goyal, must explain
♦♦ Indeed, what has happened to the
assets (NPAs) of banks. Our import coal bill to the nation how much we have lost and
promise of 1 billion tons of production by
would have come down sharply. how much more we will be losing.
2020? It is sad that even after 4 years in
From table 1, it is clear that there was Why the repeated failure through
power and that promise of 1 billon tons
a shortfall of 32.63 million tons (mt) from consecutive years: Are we deliberately and
of coal production by 2020, the NDA
the target which is nearly 5.44 percent. In systematically killing Coal India so that
government coal ministry/Coal India are
terms of power generation shortfall, due to privatisation takes place?
still near half the mark, ie, nearly 550 mt.
Coal India subsidiaries and their
Table 1: Coal India’s production subsidiary-wise in 2017-18 (Provisional) performance: If we go through the
(Figs in Mill Te)
performance of different subsidiaries it will
be evident that only 2, namely NCL and
March 2018 April 2017 - March 2018
Subsidiary NECL, achieved their production targets.
Companies % %
AAP Target Actual
Achieved
AAP Target Actual
Achieved
% Growth The biggest shortfall is from SECL and
MCL. Both of these might be contributing to
ECl 4.84 6.01 124 47.00 43.57 93 7.5
nearly 25 mt shortfall and other subsidiaries
BCCl 4.27 4.00 94 40.50 32.61 81 -12.0
nearly 10 mt. The only silver lining is NCL
CCL 11.00 12.96 118 70.50 63.40 90 -5.4
which exceeded target to achieve 105 percent.
NCL 8.57 9.07 106 89.00 93.02 105 10.6
The reasons for the shortfall are many:
WCL 8.26 7.95 95 48.50 46.22 95 1.3
♦♦ Environment and forestry clearance
SECL 16.76 15.47 92 153.80 144.71 94 3.4 could not be obtained on time;
MCL 14.81 16.70 113 150.00 143.06 95 2.8 ♦♦ Frequent disruptions by villagers over
NEC 0.17 0.128 76 0.70 0.78 112 30.2 employment and R&R issues, especially
CIL 68.68 72~28 105 600.00 567.37 95 2.4 in the Talcher coalfield;

38 Coal Insights, April 2018

EXPERT SPEAK
♦♦ Infrastructure development for coal
evacuation lagging behind; and
♦♦ There is lethargy in the ministry as most
ministers are in election mode all the
time.
Can anyone in the coal ministry explain
why the growth in coal production was only
1 percent in spite of engaging a large number
of hired machinery contractors and MDOs?
Why has departmental production gone
down badly? Why was the availability and
utilization of heavy earthmoving machinery
(HEMM) at CIL poor?
It is obvious that Coal India has failed on
both fronts, like production and overburden
removal. Can anyone in the ministry explain
why it has failed in certain areas?
Land acquisition: The land value has increased
nearly 4 times under the land acquisition Act
and yet land availability is a major problem.
The explanation could be non-cooperation
of non-NDA ministries of the BJD and
TMC-ruled state governments of Odisha
and Bengal, but the problem is equally bad
in the NDA-ruled states like Jharkhand,
Chhattisgarh and Madhya Pradesh.
Infrastructural development for evacuation
of coal: The railway ministry is also headed
by Piyush Goyal and yet the Tori-Shivpur
(Kathautia) link for north Karanpura–
Auranga coalfields of CCL that started
in 1990 is still under construction and is
delayed due to forest clearance issues. The
Jharsuguda-Barpalli track was supposed to
be completed by June 2016 but is yet to be
finished. Rail tracks in the three corridors
of Mand-Raigarh, Talcher and Korba
coalfields of SECL are progressing slowly.
These projects are languishing for more than
20 years. The present government came to
power on the slogan of good governance?
The government which talks about bullet
trains does not act fast on small patches of
railway tracks for coal evacuation in the
Ib valley, north Karanpura, Talcher and
Mand Raigarh rail corridors, causing loss of
production, revenues to Railways and India.
On the R&R front: There are frequent
stoppages of work by land-losers. The
government, which speaks about 100 Smart
Cities, cannot make a single smart township
for rehabilitation of land-losers which results
in frequent law and order situation and work
stoppages (Talcher coalfield is a burning
example). It seems that CIL is expecting a
miracle to happen and villagers will part with
their land without proper rehabilitation.
Funds usage: It may be recalled that
thousands of crores of district development
funds and CSR funds are available with
state governments and Coal India which
are not being used at all to produce some
Smart Townships in non-coal bearing areas
to rehabilitate the land losers. The district
development fund, which should have been
utilised for building infrastructure and smart
townships, has not yet been touched.
Employment generation: This government
talks of skill development of land-losers
but, shockingly, the land-losers whose main
demand is employment, are not being trained
in the number of central workshops under
it. The author had suggested converting
hundreds of vocational training centres of
Coal India into skill development centres in
previous articles published in this paper. Yet,
there is hardly any initiative.
Now it seems the development of Coal
India has gone awry. How else would CIL’s
coal production in this country, which aspires
for 8-9 percent GDP growth, remain almost
stagnant for 2 consecutive years? The failure to
achieve 1 billion tons by 2020, with utilisation
of solar energy etc as poor justification for the
same, and rationalising repeated failures on
the coal front, the government is leading this
country to power famine and poor industrial
growth. Time is indeed running out. And
good governance is a big question mark.
CSR: It did not use the massive CSR work
done by it to better B2C and C2B (business-
to-community and community-to-business
relations). All the CSR efforts made by Coal
India are laudable but unfortunately it has not
concentrated on the key result areas (KRA)
like employment generation which would have
resulted in better B2C and C2B (business-
to-community and community-to-business
benefits). In spite of large-scale expenditure
on CSR in the form of grants to schools,
construction of medical college etc the land-
losers and villagers have a grouse against the
company because for them the main problem
is their rehabilitation and employment.
Innovation: Coal India must invest money in
the following areas:
♦♦ Articulated dump trucks so that rainy season
production does not go down sharply;
♦♦ Construction of concrete haul roads by pre-
fabricated concrete slabs manufactured in
special manufacturing units;
♦♦ Use of GPS technology like OITDS
(operator-independent truck despatch
system) for monitoring all operations;
♦♦ Use of drones for surveying and
monitoring;
♦♦ Construction of prefabricated smart
townships to rehabilitate land losers;
♦♦ Use of continuous miners for high
underground production;
♦♦ Sinking of new shafts with high speed
shaft boring machines;
♦♦ Use of surface miners for OB removal;
♦♦ Use of pipe conveyors and silos for rapid
loading; and
♦♦ Use of slurry transport to make available
washed coal at affordable transport costs.
If CIL has to survive, it has to undertake
all the above measures in the near future.
Conclusion
The non-governance is so glaring that CIL
might indeed be sold out within a shorter
time than expected. Or is it being deliberately
sabotaged to bring in private ownership like
what was done as in the case of Air India?
The ministry might give lame excuses
that India is going for solar and other
renewable energy in the future, But Niti
Aayog has said that India will have 40 percent
renewable and 60 percent thermal energy in
the coming 30 years. Hence, coal has to be
produced at an accelerated rate and non-
performance of CIL will be suicidal for the
development of this country. Increased coal
production will generate huge employment
opportunities. We need not import thermal
coal by spending taxpayers’ money and create
employment in Indonesia, Australia and
South Africa instead of in India.
Non-performance of Coal India and too
much reliance on renewables will result in
poor growth of GDP and the biggest sufferers
will be the poor and middle classes in this
country. The present policy is definitely not
conducive to growth and it needs immediate
course correction. 
The author is managing director of Priya Mining
Consultancy and Services Ltd.
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.
Coal Insights, April 2018 39
EXPERT SPEAK
Can healthy power be supplied
by unhealthy power cos?
V K Arora
T
here is nothing
to cheer about
the financial
health of power
companies.
There was a time,
about 6-7 years ago,
when any player
who had a project to produce power with
an assured coal linkage could sell it at a
premium to a number of buyers who were
hungry for such projects. All you needed
was political patronage to corner a license
to produce power. This stage was followed
by investments in mega and ultra mega
power plants based on coal. All these had
come with power purchase agreements
(PPAs) which were inherently non-viable.
Investment in power was expected to be the
next big thing. Unfortunately, the sector has
not performed along expected lines. All the
power companies, big or small, have ended
up with balance sheets, which are in the red.
Today, 50,000 MW of power plants are
work in progress. If they are completed, they
would have to have PPAs at prices which shall
not be remunerative. The future of a total
investment of `2 lakh crores is suspect. Such
projects, if completed, will not be a viable
proposition and shall never make money. If
left as it is, the entire investment becomes
entirely as non-performing assets (NPAs).
The entire thermal power industry is under
stress. The independent power producers
(IPPs) which were established with lot of
enthusiasm and pomp and show with public
money borrowed from banks are finding it
difficult to survive. They should have been
working at a plant load factor (PLF) of 70
but are now just about surviving at a PLF of
around 55. PPAs were signed with discoms
which are themselves in acute financial
trouble. The rate at which the power is being
sold in the market, especially to the subsidised
sector, is totally unremunerative. Nobody
would like to touch the subsidised sector, as
40 Coal Insights, April 2018
it is a political hot potato. Distribution losses
continue to be in the range of 20-25 percent,
despite tall claims made in UDAY which has
turned out to be more of a one-time bailout,
like many such schemes earlier.
Net result of all this is that the survival
of the power sector is facing a big question
mark.
Role of renewables in the emerging
scenario: Renewables, ie, both solar and
wind have sprung pleasant surprises during
course of reverse e-auctions. It was pleasant
to have discovered a price of `2.44 per
kwh for solar and `2.64 for the wind. The
technology seems to be improving every year.
The forecast is that by 2025, the average cost
of energy of solar PV system would fall by
59 percent from 2015 levels. A tremendous
amount of research is being done in storage
of electricity by lithium-powered batteries
which has revealed that prices would fall by
over 70 percent in the next few years and
by 2025, the cost of storage would reach `3
per kwh. At this cost, utility-scale electricity
storage would become economically viable,
and batteries could act as large base load
power plants as well as peaking power plants.
India’s first utility scale storage project of
1.25 MWH was commissioned last year in
Puducherry. Tesla commissioned the world’s
largest battery storage facility to provide
power back-up to Western Australia in 2017.
The automobile industry is banking heavily
on low-cost battery e-vehicles (EV) of the
future. E-vehicles would become the most
dominant segment in passenger vehicles.
Shape of things to come: A lot of research
is being done in energy efficiency and it is
expected that the efficiency of domestic
appliances available in India would be
doubled in the next 5 years. Energy efficiency
in the new buildings would be improved
manifold by using Green technology. The
future of cooking would lie in induction
cooking by electricity and not LPG.
In the next 20 years, 80 percent of the
country’s installed capacity would be based on
non- fossil fuels. Coal and gas-based power
plants would only provide balancing power
to offset the variability of renewable energy.
No more coal-based power plants would be
set up. The new solar and wind plants will
come with their own battery storage and will
sell power to the consumers on competitive
basis. The discoms would be dismantled and
would be replaced by Distribution Network
Operators (DNOs) who would maintain and
operate the distribution network. Smart grids
would become common and the distribution
network will become bi-directional. There
would be millions of prosumers (producers-
consumers) producing electricity using solar
rooftops and feeding excess to the distribution
grids. Virtual power firms, with no assets of
their own, would collect power generated
from individual rooftops and renewable
power plants and sell to consumers. The
same way as Uber has done with taxis.
There would be multiple electric-power-
charging firms, where the car batteries would
get charged or swapped in less than 10 minutes.
Millions of consumers, would depend on their
own supply from the roof tops.
What does the future hold for us?
Medium-sized power companies would
find it difficult to survive, so as to produce
power at market-accepted rates. They will be
merged into large power companies which
would have to find innovative ways to reduce
their costs. Such innovative ways would
also include doing coal mining, so that this
fuel would be available to power companies
at cost price. Renewable power will further
reduce its cost as a result of research done all
over the world. There may not be a need for
full-scale discoms and they will be replaced
by smart grids managed by independent
operators, working on a two-way system.
All in all, we have to be ready for quite a
few surprises. 
The author is a graduate in mining engineering from the
Indian School of Mines, Dhanbad. While managing the
operations of coal mines belonging to the erstwhile Thapar
Group, he collected extensive experience in both opencast
and underground mines in some of the most efficiently
run units. After having worked as President and putting
in 50 years of service with Karam Chand Thapar &
Bros. (Coal Sales) Ltd, he is presently designated as Chief
Mentor of the company. KCT has a sizeable presence in
the logistics of domestic coal, handling about 70 million
tons a year.
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.
 INTERNATIONAL

US coal production estimated

to decline 5% in 2018
Coal Insights Bureau

C
oal production by the US is
expected to decrease by 5 percent
to 738 million short tons (MMst)
in 2018. The production decrease is largely
attributable to lower forecasts of coal use in
the electric power sector (down 4 percent in
2018), said an EIA report. Lower expected
global demand for US coal exports in 2018
and 2019 also contributes to the forecast
of lower coal production. EIA expects

production to increase slightly to 748 MMst

in 2019.
Coal exported by the US during 2017 stood
at 97 MMst, up 61 percent over 36.7 MMst
in 2016. Meanwhile, exports to Asia in 2017
more than doubled from 15.7 MMst in 2016
to 32.8 MMst, although Europe continued to
be the largest recipient of US coal exports.
Growth in coal exports during 2017 was
mostly contributed by steam coal demand.
The top three importers of US steam coal
during 2017 were India, South Korea and
Japan. India, the largest importer of steam
coal from the US, imported 7.6 MMst, nearly
three times as much as in 2016, mainly to fuel
growing electricity capacity in the country.
South Korea was the third-largest recipient
of US steam coal in 2017, importing 5.9
MMst, up from 1.3 MMst in 2016.
Further, metallurgical coal exports by
the US also increased in 2017, reaching 55.3
MMst and accounting for 57 percent of total
coal exports, up more than a third from 2016.
Metallurgical coal is mainly used in steel
production. Europe was the top importer of
metallurgical coal in 2017 accounting for 45
percent of total US exports.
The top six countries (Brazil, Japan,
Ukraine, Canada, India, and South Korea)
importing metallurgical coal from the United
States accounted for more than half of all
metallurgical exports in 2017. Five of these
six countries, with the exception of Ukraine,
were also among the top ten countries that
exported steel to the United States in 2017. 

Coal Insights, April 2018 41

INTERNATIONAL
US-China trade war: Could
India and Australia emerge
winners?
I
t is commonly said that no one wins a
trade war but global media has guessed
that India and Australia could emerge
winners if the spat between the US and
China, the world’s two biggest economies,
prolong in the longer run.
Experts say, if contractors of US mobile
handsets in China suffer from the trade
conflict, Vietnam may benefit as it is a major
production base for a Korean handsets major,
whose phones are leading competitor to US
brands. Moreover, multinationals might
hedge their risks by reducing production in
China and South East Asia would be the
logical destination for this rebalance.
Aussie benefits
China is a massive importer of metallurgical
coal or met coal, which is used in blast
furnaces to produce steel. Now, with the US
imposing a 25 percent tariff on steel imports
from China, Beijing might decide to source
more of its met coal from elsewhere. As one
of the world’s top exporters of coal, Australia
could reap the rewards.
In fact, China and Australia inked a
bilateral free trade agreement in 2012 to
remove the then existing 3-6 percent import
tariffs on metallurgical coal.
Australia sends 30 percent of its exports
to China. Each year’s exports include some
700 million tons of iron ore and metallurgical
coal, the main ingredients in steel, as well
as copper for electronics. As per Australian
Bureau of Statistics, Australia’s coal export
values have hit a new peak of $56.5 billion
in 2017. This valuation is 35 percent higher
than in 2016 and beats the previous record of
$46.7 billion in 2011, by nearly $10 billion.
The $56.5 billion is split between 200
million tons (mt) of thermal coal valued at
$20.8 billion, and 172 mt of coking coal
valued at $35.7 billion.
Interestingly, South East Asia seems a
42 Coal Insights, April 2018
particularly important emerging market for
coal, where exports accounted for roughly
$2 billion in 2017. As per experts, South
East Asia is emerging as a significant new
market for Australian coal owing to its recent
investments in high efficiency, low emission
coal-fired power plants which are significantly
reducing greenhouse gas emissions.
China, traditionally Australia’s largest
coal export market, also saw record Australian
coal imports for the year with a full year rise
of 5 percent to 1.075 billion tons.
The situation underwent a sea change
too. Earlier, it was thought that China’s
decision to decrease its steel production
would have a significant impact on Australia’s
met coal export prices. Actually, Australian
apprehension was of moderate Chinese steel
production growth and output was forecast
to decline marginally by 0.4 percent in 2017.
As per Canberra’s estimates, declining
exports, industry consolidation, cutting
to old and inefficient capacity – with a
50 million ton target for 2017 – and the
enforcement of environmental restrictions,
all would be expected to contribute to the
marginal decline in steel production. Even
beyond 2017, the Australian outlook was
subdued that steel production would be
declining by 0.6 percent in both 2018 and
2019, weighed down by relatively subdued
domestic demand. But this trade war has
altered all earlier assumptions.
Cyclone Debbie aftermath
It is to be noted that in the aftermath of
tropical cyclone Debbie, which caused nearly
$3 billion damage in 2017 in Australia, the
global seaborne metallurgical coal market
saw a sea change with China emerging as
the top seller in the spot market from being
the single largest buyer a year ago. With
huge supply disruptions seen in the seaborne
market, leading spot prices doubled within
three weeks from $151.50/mt on March
24 to their highest point at $304/mt FOB
Australia on April 17.
More interestingly China emerged as a
key swing supplier, by switching immediately
from being the single largest met coal
importer in 2016 to the largest spot seller.
China was not only selling just domestic
coal, but also its import supply either through
re-export or reselling China-bound cargoes.
As per estimates, China sold 2.8 mt over
March 27 to April 14, accounting for 51
percent of all spot trades concluded during
the period. Of this, Chinese domestic
materials comprised just around 355,000 mt
or 12.7 percent of Chinese sales.
The experts guessed that sale of import
materials by China can be in the form of
reselling on-the-water cargoes, or re-export
of materials sitting in bonded warehouses or
have been discharged.
According to experts, China turning seller
is driven mainly by a wide spread between
domestic and export prices, sufficient met
coal inventories at Chinese steel-makers and
the proximity of China as an export hub.
And for Chinese miners and steelmakers,
that meant the arbitrage window was wide
open to ship out both Chinese domestic
supply and imported tonnages.
China could also afford to re-sell its
imports as steelmakers had bought heavily
post the Lunar New Year, as import coal
prices were highly competitive at that time.
China accounted for 85 percent of global
spot trades from January-March, 2017,
which was considerably high in view of the
66 percent share it had in full-year 2016.
All these developments show Beijing
could change its stand quickly if its interest
was in jeopardy. It is to be noted here that
in the aftermath of the cyclone another new
feature emerged in the Asian met coal market.
As per media reports, the Central Asian
landlocked nation of Mongolia has emerged
as one of Beijing’s met coal suppliers.
Actually, it’s a win-win situation for both
as enhanced Chinese demand for met coal
tagged with higher prices has provided the
much-needed relief for gasping Mongolian
coal mines. Mongolia has secured almost
50 percent of China's 10-mt year-on-year
imports in the first six months of 2017 as
seaborne supply tightened following the
effects of Cyclone Debbie on Australian
production.
INTERNATIONAL

As per industrial data, Mongolia exported 11.87 mt of met coal to

China during January-May, 2017, a 72 percent increase compared to
6.91 mt exported in the same period in 2016.

Indian market lures?

Beijing would need India’s huge market as the US is bent on raining
punitive measures against Chinese manufacturers and US firms that
produce goods offshore. As per experts’ estimates, the requirement for
Beijing to maintain economic growth and domestic political stability
would also give New Delhi geo-political leverage as it would seek to
counteract China’s inroads into South Asia, including in Pakistan.
Experts say, China’s production strength would require a market,
and the US would no longer provide that. But as China at this stage
cannot risk a meltdown in its economy, it would badly need a big market
and India, with its huge appetite for the fuel, is there.
On the other hand, as per another expert, if the US-China
relationship "were to implode", India would not be the only country
trying to profit. Still, India’s vast domestic market means it has an
advantage with both countries. He feels the consuming class in India
actually presents a huge market and that could be Delhi’s big leverage
which could give it a handle to demand concessions in return for Indian
“goods and services” and the movement of personnel.
Another view is that both the warring factions would turn towards
India lured by her gigantic market. As per another expert, if the US and
China would not get along, the US would increasingly turn to India as
a large Asian actor and China, if its US market contracts, will need to
diversify into other markets and investment outlets, including India.
Actually, the US and China are duelling it out by slapping spiralling
retaliatory tariffs on each other’s goods. China announced up to 25
percent tariffs on 128 American agriculture products in response to the
US’s punitive tariffs on the Chinese steel and aluminium imports there,
blaming Beijing’s subsidies and overcapacity.
The White House then announced a retaliatory 25 percent tariff on
1,300 Chinese products. Moreover, the US could impose tariffs on more
than $70 billion of cutting-edge Chinese goods after an investigation
into Beijing’s alleged intellectual property misappropriation.
Naturally, China, while denying US accusations of technology theft
or pressuring foreign companies to hand over technology, clarified that
the tariffs on US goods it unveiled were in response to the duties on
aluminium and steel imports, but not the investigation.

Increasing collateral damages

But it goes without saying, trade wars do not have any winner. Western
media is already apprehending the collateral damage of this conflict.
One Japanese expert said, “It’s not just the combatants themselves who
suffer damage, it’s the other countries too.”
Some of the effects of US-China trade tension are already being
felt. As the US had said of hiking tariffs of up to 30 percent on solar
panels, aiming mainly for low cost Chinese solar panel makers, but
this move would hurt some other panel makers such as Singaporean
solar panel makers too. One Singapore company which runs one of
the largest solar cell factories outside of China and sent almost a third
of its solar panel shipments through the first three quarters of 2017 to
the US, now is full of apprehension. 

Coal Insights, April 2018 43

 Safety
Conveyor issues and solutions Part II
Single inspector per thousand
workers is not enough
Bill Shukla
O
ccupational
safety experts
and government
healthcare officials from
across India gather every
year to assess India’s
workplace safety. In
conjunction with the
National Institute of Occupational Health,
the meeting’s 2017 report contends that safety
oversight remains inadequate: “A total of 4,047
factories needed welfare officers and a total of
3,705 welfare officers are appointed in these
factories as per the provisional data of 2014.” [1]
Health and safety experts suggest that
a single inspector per thousand workers
is not enough to ensure a compliant work
environment. With gaps in oversight, it
remains incumbent upon employers to ensure
that they adhere to the best practices and have
the proper mechanisms (switches, sensors,
detectors and alarms) to stay compliant with
current government safety standards.[2] In
light of recent research showing 88 percent
of workplace incidents in India take place
because of human error,[3] installing modern
automated warning mechanisms and updated
equipment is critical to maintaining a safe
and efficient workplace.
44 Coal Insights, April 2018
Safety mechanisms
Using Foundations™ for Conveyor Safety
– one of the most comprehensive conveyor
safety training manuals in the world – as
a guide, there are many essential safety
mechanisms that employers can install to
detect issues before they become catastrophic
and life threatening. These often detect
problems and halt the system before workers
need to manually use emergency stop
switches and pull ropes.
Best practices for emergency stop switches
include mounting the pull ropes at a proper
height. Mistracking is a potentially expensive
issue and major cause of devastating belt fires.
Belt-alignment or wander switches warn
against a drifting belt. Without them, the
belt can experience excessive spillage and
may come in contact with the mainframe
and shred the edges. Friction heats it quickly,
potentially igniting flammable cargo or the
belt itself. Installed on either side of the belt
near the head and tail pulleys, these switches
shut down the system prior to contact with
the mainframe. However, this can cause
significant downtime. Many operators have
found benefit in modern tracking systems
that detect belt drift and make immediate
adjustments prior to shutdown to improve
production and reduce downtime.
Belt-slip (zero-speed) switches detect
when a mechanical pulley is spinning under
a stuttering or immobile belt. Similar to
mistracking, the friction can raise the heat of
a belt and create a fire hazard. This can be
an indication of fouled pulley faces or fugitive
material migrating to the inside of the belt
from spillage or carryback. By installing
rotation sensors, automated systems can
detect whether the rotation speed of the pulley
or belt speed is more than ±10 percent of the
designated range, shutting down the system.
These should be checked every month. To
reduce shutdowns due to slippage caused by
fouling, operators often install heavy-duty
belt cleaners at the discharge zone and plows
at the tail pulley to minimise fugitive material.
Bin-level and plugged-chute detectors
alert operators to clogging and ratholing
in bins, hoppers and discharge chutes, the
weight of which can create a potential
safety hazard or even buckle a structure.
Ordinarily caused by the build-up of fines or
wet material, if there is a clog, the operation
typically must be shut down, followed by
labour to clear the obstruction. Removing the
accumulation is commonly done by hitting
the structural walls with mallets, poking at the
discharge spout or in some cases entering the
chute to dig out the obstruction. The result
can be expensive damage to equipment and
potential harm to workers. To alleviate build-
up, industrial vibrators and air cannons clear
adhered material before it builds up, ensuring
consistent cargo flow, reducing downtime and
labour costs, while improving production.
For outdoor or tower mounted conveyors,
high wind warning sensors tell operators
when there is a potential for spillage and dust
emissions due to extreme weather conditions.
Even in covered belts, powerful gusts can lift
the belt, cause it to mistrack and shake the
mainframe. Dust emissions can be carried
long distances and spillage can drop from
heights, causing a potential hazard.
Safety

guarding and insist that workers follow aging systems. Operators throughout India
the proper lock-out/tag-out procedure who have implemented these measures have
when stopping or starting the system. realised a positive return on investment,
Used on main bearings and critical verifying that safety and efficiency are
pieces of equipment, vibration sensors intrinsically linked. 
provide a proactive indication of
impending failure. Bearing failure caused
by fouling and abrasion from fugitive Research
dust or crushing from excessive cargo [1] Swaminathan, Soumya, MD; Katoch
weight can lead to idler seizure and high- V.M., et al. “Occupational Health & Safety
Belt drift leading to contact with the mainframe heat friction, increasing the chance of Profile – India, 2017”. pg. 35-36. Indian
can shred the belt and destroy the splice a fire. It can also result in catastrophic Council of Medical Research, National
failures of shafts, pulleys and reducers, Institute of Occupational Health. Ahmedabad,
Some of the most essential components with significant safety consequences. If Gujarat, India. 2017. http://www.nioh.org/
in any safe workplace are heat sensors and fire dust is suppressed using either modern chute publications/OHS_Profile_India.pdf
detection devices. Due to high belt speeds, sealing technology and/or dust suppression
a conveyor fire can be quickly transported methods, the failure rate of bearings and [2] Staff. “National Policy On Safety,
throughout a facility, transferred onto other other sensitive equipment can be reduced. Health And Environment At Work Place.”
conveyors and spread over long distances. Ministry of Labour and Employment,
Concentrations of combustible dust in Government of India. Nov. 2015.
chutes, bins and hoppers can contribute to https://labour.gov.in/sites/default/files/
the risk of explosions, as well. Safety experts SafetyHealthandEnvironmentatWorkPlace.pdf
urge operators to install point-detection [3] Verma, Shikha; Chaudhari, Sharad. “Safety
heat sensors on main bearings of tail pulleys, of Workers in Indian Mines: Study, Analysis,
head pulleys, bend and take-up pulleys, as and Prediction.” Safety and Health at Work
well as on gearboxes, brakes and electrical Journal. 8(3): 267–275. September, 2017.
devices. https://www.ncbi.nlm.nih.gov/pmc/articles/
To decrease the chance of a worker being PMC5605840/
inside a danger zone when the conveyor starts
up, capacitance/proximity sensors detect the [4] Swinderman, Todd; Marti, Andrew D.;
presence of a worker near the equipment and A split shaft air cannon system can control Marshall, Daniel. “Foundations for Conveyor
clogging and promote cargo flow Safety”. Ch. 4, pgs 36-48. Martin Engineering.
reduce the risk of injury. These sensors detect
changes in the capacitance – the electricity Beyond fouling of components, dust Worzalla Publishing Company, Stevens Point,
storage capacity – of the surrounding area. sensors are an important component Wisconsin. 2016. https://www.martin-eng.
The range of capacitance sensors is affected of protecting worker health. Silicosis, com/content/product/690/safety-book
by the environment around a conveyor, so, pneumoconiosis (black lung) and other
generally, a person must be within one meter chronic lung issues caused by dust exposure The author is Managing Director, Martin Engineering
[≈40 in.] of the sensor to generate a signal. can drastically affect worker health. Testing India.
Safety experts recommend that operators and addressing air quality at the point of Note: The views expressed here are those of the
author and not of Coal Insights. The publication
protect the danger zone with industrial emission through the use of modern dust does not take any responsibility for the article in
control technology improves compliance, part or in full.
extends equipment life, raises staff morale and
© 2018 Martin Engineering Company. All
reduces the cost of operation by decreasing rights reserved. Martin Engineering products
maintenance and health hazards. are protected by US and foreign patents and
patents pending. Additional intellectual property
Conclusion information is provided at www.martin-eng.com/
trademarks.
Having sensors in place improves safety
For product information, contact:
conditions, but they are also intended to Martin Engineering
prevent serious breakdowns in the system Plot No. 191,192,193,
Vadu Khurd, Alandi-Markal Road,
that can lead to expensive downtime and
Phulgaon, Pune 412216
severe production losses. The best way to Tel: +91 20 66788270
protect a conveyor system and the personnel Email: salesindia@martin-eng.com
Website: www.martin-eng.in
working around it is to have a sealed system
– free from dust emissions and spillage – For editorial assistance, contact:
Rick Felde
Rotator tabs monitor pulley speed and that is well monitored and maintained. This (541) 306-4815 or (309) 852-2384, x348
detect slippage technology exists and can be retrofitted onto rickf@martin-eng.com

Coal Insights, April 2018 45

 OPINION
Safety: whose baby is it
anyway?
‘Safety” is one of the most eulogized, beleaguered and
hackneyed terms in the mining industry’
Nandini Chakravarty
S
afety and its synonyms are bandied
about in seminars, training manuals,
and workshops, only to be ignored at
the first instance where it is needed the most.
In practical terms, do we really practice what
we preach? Safety is considered mainly to be
the responsibility of the statutory bodies. As
stake-holders, we often feel most comfortable
to ignore even the most basic precincts. I feel
as a nation we have a certain apathy towards
finding a sustainable balance between safety
and productivity, at least in our mining
activity. It does not take much to realise they
go hand in hand. History shows that it takes
an incident, a near-miss or an accident, to lay
down a statute, more often to be relegated
to the pages of some circular, ending up in a
manual. To be repeated all over again, after
sometime, by committing the same mistakes.
The omnipresent apathy, absentee
landlord attitude, and corruption prevailing
at certain levels, have helped to turn a blind
eye when rules are observed to be violated,
sometimes in a blatant fashion. This make
accountability very difficult even for the most
diligent of the managers, the blame game
steps in, diluting the very idea. Upholding
of safety cannot be just the responsibility of
the statutory authorities, it is every individual
who is associated with the industry, who must
come forward to do their share for ensuring a
safer work place environment. The motivation
can be created by the senior-most officers.
I remember having impassioned arguments
with two engineers, working in a multinational
company, and belonging to a certain state, who
felt that police crackdown on motorcyclists for
not wearing helmets was initiated by a bribe
to the police by the helmet companies. We
have grown cynical, we are challenging time-
tested perceptions, guidelines, sometimes even
laid-down procedures, when it suits us. Our
46 Coal Insights, April 2018
regulatory bodies need to have a stronger leash
on their inspection procedures to stem this rot.
On the other hand, we have to accept our own
challenges towards our own responsibility, for
compliance with the norms for safety. The
case of passing the buck must stop, here and
now. Otherwise, we are leading ourselves
more and more into the trap of complacency,
perhaps creating serious problems for the
future, by setting bad precedence. The most
horrifying fact is that we are perpetuating this
culture by bringing up generations of kids who
continue to be physically un-smart, callous to
authority, and dismissive and ignorant of even
basic safety practices.
Whilst we are world leaders in so many
of our areas of expertise, we talk incessantly
about our glorious ancient cultures and past, it
is bewildering to note why our basic attitude
to safety is so minimal. Rampant government
apathy is sometimes the reason why the
common man mistrusts such procedures, and
I don’t mean just in mining. This is present
on our roads, our hospitals, our highrises,
highways, factories, flyovers etc... the list goes
on. It takes an incident to result in a knee-jerk
reaction, for example, the fire at the AMRI
hospital led to highlighting of the deficiencies
in the management where administrative
procedures were not being followed. This
in turn led to the arrest of the promoters and
court cases. My question is, why were not the
various inspectors who visited the premises
(or were supposed to visit) to ensure that the
statutory safety practices were upheld, and
are the ones who are supposed to regulate
procedures from the fire department not
jailed and prosecuted in the same fashion?
Some exemplary punishment with equal
share of responsibility, publicly, with media
statements will go a long way. Even pecuniary
punishments, coupled with jail terms, will
help towards returning public confidence in
public administration. It will also instill a
sense of accountability amongst the inspectors
themselves. The statutory bodies cannot keep
protecting each other’s back for much longer,
by filing falsehood in the form of reports. At
the end of the day it does not fool anyone.
Barring a few exceptions, in the industry
I represent, coal mining at times is engaged in
running cat and mouse game played between
the mine operators/owners and the DGMS
inspectors who regularly visit. The DGMS
Inspectors are responsible for monitoring
the safety in the underground, and open cast
mines. Here again, with the exception of
a dedicated few, the seriousness is lacking.
The recent attempts to change the regulatory
culture from prescriptive to self-regulatory,
is based on the assumption of responsible
ownership. But it is common knowledge for
anyone dealing with the mining industry
that the sense of ownership is absent. And
therefore this move is likely to create greater
safety hazards (but more on this later). The
Department of Mines simply does not have
the manpower, and the penetration to keep
ensuring that safe operating practices are being
followed at each and every site. This is nothing
new and has been happening since inception at
various levels. Sometimes, it helps to pause at
the level of the senior mine management. At
the end of the day, who are we short changing?
I remember an incident at one of the
gassiest and oldest mines in India, some
time back, where I was directed to wear a
safety belt on the car I was traveling in, by
the security guards manning the gate, when I
had to drive down the path from the gate of
the project office, to the room of the manager
(a distance of less than 500 metres). This led
to the belief that the best safety practices are
observed by the company. A year down the
road it was discovered that the very same
mines operate with flameproof equipment
that did not have even the basic protective
devices, fitted in their underground mines.
Sadly enough, any suggestions from our
side were construed as criticism, and swept
under the carpet. So what is the lesson
learnt from this incident? Some companies
are keen to project themselves as following
the best practices, publicly, for keeping
up appearances, but do not take the same
concept of safety with equal zeal, when it
comes to the less visible areas of their mines.
As it was said, in tongue in cheek fashion,
if the safety horse is flogged any more, it
might just drop down and die!
 Corporate

CASE delivers its

5,000th Vibratory
Tandem Compactor
in India

Coal Insights Bureau gives us the confidence to further … aim for response times and best-in-class fuel economy,
ever greater milestones.” a company release said, among other qualities.

C
ASE Construction Equipment, a
brand of CNH Industrial, reached
a milestone in India by delivering
the 5,000th Vibratory Tandem Compactor,
manufactured locally in Pithampur. It is the
only manufacturer in the construction sector
to have achieved this landmark in India, the
company claimed.
On reaching the milestone, Abhijit
Gupta, Brand Leader, CASE Construction
Equipment India, said: “CASE India is the
market leader in the compactor segment,
and holds a leadership position across the
entire range of products… We at CASE
India always ensure that our customers get
the right match for their requirements and
are provided with the after-sales service and
parts support they need. Such an achievement
The key was handed over by Ajay Aneja,
National Head, Sales & Export, to Suhan
Shetty from the Uday Shetty Group of
Companies. On receiving the key, Shetty
commented, “We own more than 25 CASE
equipment, including backhoe loaders and
graders… “.
CASE India launched the CASE 752EX
Vibratory Tandem Compactor at EXCON
2017, which is equipped with a fuel-efficient
3.9-litre four-cylinder engine, along with
a mechanical injection system and internal
exhaust gas recirculation, which delivers 76 hp
at 2,200 rpm and 332 Nm of torque at 1,300
rpm. This new-generation engine, developed
by sister brand FPT Industrial, a leading
manufacturer of powertrain, transmissions
and axles for industrial vehicles, provides fast
In the last 28 years of operation in India,
CASE has won multiple awards, including, the
“Fastest Growing Construction Equipment
Company” a title bestowed during the 8th
annual Construction World awards in 2010.
CASE Construction Equipment sells
and supports a full line of construction
equipment around the world, including
loaders/backhoes, excavators, motor graders,
wheel loaders, vibratory compaction rollers,
crawler dozers, skid steers, compact track
loaders and rough-terrain forklifts.
CASE Construction Equipment is
a brand of CNH Industrial NV, a world
leader in capital goods, listed on the
New York Stock Exchange and on the
MercatoTelematicoAzionario of the
BorsaItaliana. 

Coal Insights, April 2018 47

CORPORATE
‘Vehicles’ end-of-life policy
needs a sustainable model’
Coal Insights Bureau
A
US study released last year revealed
that India’s sulphur dioxide emissions
have increased by 50 percent since
2007 while China’s have fallen by 75 percent
during the same period. Sulphur dioxide is
emitted when coal is burnt and its impact can
lead to haze, acid rain and health hazards like
asthma and other lung diseases.
According to the 2017 Global Burden of
Disease, around 1.1 million people in India
die prematurely each year from diseases
directly related to air pollution, making it the
fifth leading cause of death in the country.
Transportation sources account for about a
third of particulate matter (PM) pollution in
India, and a somewhat higher proportion of
nitrogen oxides, another set of compounds
harmful to human health. Because the vehicle
fleet is small in relation to the large population,
India has very low per capita transportation
emissions. But that fleet is growing rapidly:
As per statistics, total vehicle sales (including
motorcycles) increased from about 10 million
in 2007 to over 21 million in 2016, and the
total number of vehicles on the road is expected
to nearly double to about 200 million by 2030.
Against such a backdrop, the vehicle end-
48 Coal Insights, April 2018
of-life policy or voluntary fleet modernization
policy needs a relook, it needs to be made
more inclusive, so as to benefit the customer,
opined Y S Malik, Secretary, Ministry of Road
Transport & Highways, Government of India,
while speaking at the 7th Mahindra Transport
Excellence Awards, earlier this month.
Mahindra & Mahindra’s (M&M’s) heavy
duty trucks are built to serve the coal and
steel industries amongst other heavy-duty
bulk materials like rigs, tankers, borewells,
cement etc. As per its Truck and Bus
Division website, in a business as demanding
as construction, timely delivery of cement,
fly-ash and other construction material is
critical. To journey everyday through rough
terrains and unpredictable conditions is a
tough ask. But to do this while transporting
heavy-duty steel is even tougher.
In India, the scrapping and dismantling
industry poses a serious environmental threat.
The vehicle end-of-life policy aims to encourage
vehicle owners to scrap the old automobile,
replacing them with more modern and less
polluting ones. The 7th Mahindra Transport
Excellence Awards saw several experts debating
on the “Commercial Vehicle End-of-Life
Policy in India”. Speaking on the topic, Malik
said India has almost 4 million BS1, BS2 and
BS3 commercial vehicles on the road, which
were highly fuel consuming, inefficient and
emission polluting, which adversely impacted
the environment. “So the question arises,
should there be end-of-life prescription for
every vehicle,” wondered Malik.
Adding his views, Professor G Raghuram,
Director, IIM Bangalore, was concerned
about how to determine the parameters for
formulating the vehicle end-of-life policy, since
India has high variance in the way vehicles are
used unlike in the developed countries where it
is not mandatory to scrap older vehicles.
Rakesh Batra, Partner, Automotive
Practice, Ernst & Young, said one needs to
look at the entire value chain for introducing
a major policy change like this, starting with
the customer first. When these vehicles come
off the road, there is the need for companies
that would recycle these into scrap while
Vinod Sahay, CEO, Mahindra Truck &
Bus and Mahindra Construction Equipment
Division, said pulling out the old commercial
vehicles would lead to major disruptions, and
freight rates could increase because of the
vehicle pullouts and that the resale value of
5-10 year vehicles could increase.
The consensus of the panel was that
India’s solution lay in creating a sustainable
business model and that the removal of the
vehicles should be done in a phased manner.
The 7th awards programme had some
firsts to its credit. These included:
♦♦ SCV, LCVs and ICV segment
stakeholders for various awards
categories;
♦♦ Customised Application Builder category
for SCV and LCV; and
♦♦ Come Home Papa – Stories on Road
Safety by truck drivers’ daughters. Girls
writing stories on road safety, based on
their father’s experiences on the road;
Over 1300 entries were received.
The Ministry of Road Transport
& Highways has supported the awards
programme for the fifth consecutive year.
Speaking on the occasion, Anand
Mahindra, Executive Chairman, Mahindra &
Mahindra, said, “…With the inclusion of the
SCV, LCV and ICV segment stakeholders
this year, this Rise initiative now caters to
the entire spectrum of the road transport
ecosystem. The Come Home Papa initiative
brings into focus the education of the girl
child and the value of human life…”  
CORPORATE
BP, Reliance sanction
2nd phase of KG D6
development
Coal Insights Bureau
B P and Reliance Industries Limited (RIL)
on April 20 announced the sanctioning
of the ‘satellite cluster’ project in Block KG
D6, which is the second of three projects in
the block’s integrated development.
“The companies are moving forward to
develop the block’s discovered deep-water
gas fields in an integrated series of projects,
bringing new gas production for India,” a
statement issued by RIL said.
The first of the projects, development
of the ‘R-Series’ deep-water gas fields, was
sanctioned in June 2017.
“Together the three projects will develop a
total of about 3 trillion cubic feet of discovered
gas resources with a total investment of
around `40,000 crore ($6 billion). They are
expected to bring a total 30-35 million cubic
metres (1 billion cubic feet) of gas a day of
new domestic production onstream, phased
over 2020-22,” the statement said.
Earlier, in 2011, BP took a 30 percent
stake in multiple oil and gas blocks in India
operated by RIL, including the producing
Block KGD6. Currently, the participating
interests in Block KGD6 are 60 percent for
RIL (operator), 30 percent for BP and 10
percent for NIKO.
Prism Cement
rechristened as Prism
Johnson
P
rism Cement Ltd was rechristened as
Prism Johnson Limited with effect
from April 18, 2018, the company said in an
announcement on BSE.
“We wish to inform you that the Registrar
of Companies, Telangana, has issued a fresh
Certificate of Incorporation consequent
upon change in the name of the company
from ‘Prism Cement Limited’ to ‘Prism
Johnson Limited’ with effect from April 18,
2018,” the company said.
Earlier, on January 18, 2018, the board
of directors of Prism Cement had decided to
seek consent of shareholders for the change
in the name of the company.
TNPL to procure
180,000 tons of
imported steam coal
T
amil Nadu Newsprint and Papers Ltd
(TNPL) has floated a tender to procure
180,000 tons (+/-5 percent) of steam (non-
coking) coal in bulk (imported) on delivered
TNPL factory basis.
Of the total quantity of 180,000 tons (+/-
5 percent), 120,000 tons would be procured
for Unit-I and 60,000 tons for Unit-II.
The procurement would be done through
tender-cum-auction method and the lowest
offer received either through e-auction or in
the price bid, whichever is lower, will only be
considered for placement of order.
Coal Insights, April 2018 49
CORPORATE

According to the tender document, the
material should be of Indonesian/Australian/
South African/Russian/Chinese origin.
The technical specifications are: GCV
(Kcal/Kg) 5,000-4,800 (min) (ARB), total
moisture (ARB) 26 percent, ash (ADB) 6-8
percent, sulphur less than 1 percent, volatile
matter (ADB) 38-42 percent.
The due date for submission of technical-
cum-commercial bid and price bid is April
18, 2018 before 3.00 pm.
Cabinet approves
Goa and Bengaluru, to Nashik, Nagpur, On the issue of shifting of a transmission
Aurangabad, Indore and Hyderabad, to line in Meghalaya for laying a new railway
Ahmednagar and to local regions in and line, Singh emphasised that this shifting
around Mumbai. A meeting of these bidders should be done without any disruption of
was held at JNPT last week to take stock of supply to the consumers.
the preparedness for the rollout of the new
system from May 2018,” the release said.
DPD is increasingly being accepted NTPC commissions
as the optimal way of transporting cargo
directly from the port to the importers and unit 1 of 660-MW
accounts for close to 39 percent of the total
cargo traffic from JNPT at present. About Meja plant
1,600 importers who have opted for the
DPD mode of transport will benefit from

agreement between this process. An exporter or importer will be

able to book his cargo sitting in his office,

India, ISA through a technology-backed platform.

The DPD transport solution will
facilitate easy co-ordination between port

T he Union Cabinet chaired by Prime

Minister Narendra Modi has given
its ex-post facto approval for entering into
and customers, end-to-end delivery, faster
evacuation of containers from the port area,
24X7 vehicle tracking and container tracking
‘Headquarters (host country) Agreement’ through mobile phones.
between India and the International Solar

Alliance (ISA) and authorizing the Ministry
of External Affairs for signing the above
agreement, said a government release. The
agreement was signed on March 26, 2018.
The ‘Headquarters Agreement’ will
institutionalise the functional arrangements
between India and ISA. It will help in the
smooth transition of ISA as an international
inter-governmental organisation. Creation
of the ISA will lead to accelerated solar
technology development and deployment in
ISA member countries, including India.
JNPT to integrate direct
port delivery system
from May
J awaharlal Nehru Port Trust (JNPT) aims
to integrate direct port delivery (DPD)
transport solution from May 2018, which
would facilitate seamless and faster movement
of cargo, said a government release.
“JNPT has been working on an innovative
transport solution to achieve seamless and
faster movement of cargo from the port to
respective destinations through DPD. Four
successful bidders have won the mandate
for five routes – from JNPT to Gujarat, to
Meghalaya to launch
Saubhagya scheme
M eghalaya Chief Minister Conrad
Kongkal Sangma met Union Power
and New and Renewable Energy Minister
R K Singh and discussed various matters
such as uninterrupted electricity supply to
the north-eastern state, an official statement
said.
The chief minister assured to electrify all
the villages in the state which intended to
launch the Saubhagya scheme on April 20,
2018.
Various issues pertaining to the power
sector in Meghalaya and measures to be
taken to ensure round the clock supply for
each household in the state were discussed,
the power ministry said in a statement.
Apart from the projects sanctioned for
the state, if it requires any additional project
for strengthening the distribution system,
the proposal may be sent and thus will be
sanctioned by the Government of India, it
added.
Sangma said that “if freight subsidy was
provided for the coal meant for power plants,
it might help in reducing the electricity rates
in the state.”
N
TPC has commissioned first unit
of the 660-megawatt (MW) Meja
thermal power project (2x660 MW) of the
Meja Urja Nigam (a JV company of NTPC)
on March 31, 2018, the company said in a
BSE filing.
With this, the total commissioned
capacity of the NTPC Group has increased
to 53,651 MW.
RINL floats global
tender for 150,000 tons
of met coke
R ashtriya Ispat Nigam Ltd (RINL)
has floated a global tender to procure
150,000 tons (+/-10 percent) of imported
low ash metallurgical coke to be delivered
before June 2018.
The technical specifications for the
material are: moisture 5-10 percent (max),
ash 12.5-13.5 percent (max), volatile matter
1.0-1.5 percent (max), sulphur 0.55-0.60
percent (max), phosphorous 0.03-0.035
percent (max).
The last data and time for submission of
bids is April 20, 2018 at 10.30 am. 

50 Coal Insights, April 2018

 Logistics

Traffic
handled by
major ports
up 5% in
FY18
Coal Insights Buureau

T
he 12 major Indian ports handled
679.36 million tons (mt) of total
traffic during 2017-2018, about 4.77 March, 2018. Movement of thermal coal March, 2018, up 8.60 percent compared
percent higher than 648.39 mt recorded through these ports increased to 95.26 mt 46.58 mt during the same period last year.
during April-March, 2017, according to during April-March, 2018, compared 92.7 Among the major ports, Paradip Port
data released by the Indian Ports Association mt achieved in the corresponding period of had the distinction of handling the highest
(IPA). the previous fiscal. volume of thermal coal, at around 29.18 mt,
Thermal coal handling by the major The major ports handled a total of 50.59 during 2017-18. The port had handled 25.85
ports was up 2.76 percent during April- mt of coking coal during the period April- mt during April-March, 2017.
Movement of iron ore through the major
Traffic handled at major ports (during April to March, 2018* ports showed a decline of 2.75 percent
vis-a-vis April to March, 2017) during 2017-2018. The major ports together
(in ‘000 tons) handled 48.59 mt of iron ore during April-
April to March traffic % variation against
March, 2018 compared to 49.96 mt handled
Ports in the corresponding period of 2017. Paradip
2018* 2017 prev. year traffic
Port handled the highest volume of iron
KOLKATA
ore, at 12.18 mt, during April-March, 2018,
Kolkata Dock System 17390 16810 3.45 up 10.32 percent against 11.04 mt handled
Haldia Dock Complex 40496 34141 18.61 during April-March, 2017. Movement
TOTAL: KOLKATA 57886 50951 13.61 of container traffic in terms of tonnage
increased 7.26 percent to 133.62 mt during
PARADIP 102013 88955 14.68
April-March, 2018, compared to 124.57 mt
VISAKHAPATNAM 63537 61020 4.12
during the corresponding period of 2017.
KAMARAJAR (ENNORE) 30446 30020 1.42 Altogether, 9 major ports showed positive
CHENNAI 51881 50214 3.32 growth in traffic handling during April-
V.O. CHIDAMBARANAR 36575 38463 -4.91 March, 2018, while the remaining 3 showed
negative growth on a year-on-year basis.
COCHIN 29138 25007 16.52
In terms of growth, Cochin Port topped
NEW MANGALORE 42055 39945 5.28 the list with 16.52 percent increase in cargo
MORMUGAO 26897 33181 -18.94 throughput, while Mormugao’s growth was
MUMBAI 62828 63049 -0.35 the lowest at 18.94 percent, during April-
JNPT 66004 62151 6.20 March, 2018. In terms of traffic volumes,
Deendayal (Kandla) Port clinched the top
KANDLA 110099 105442 4.42
rank with container tonnage volumes of
TOTAL 679359 648398 4.77 110.09 mt recorded during April-March,
(*) Tentative 2018. 

Coal Insights, April 2018 51

Logistics

down 8.6 percent from 13.37 mt in March

Indian Railways’ March coal 2017.

Further, revenue earnings of Railways
from transportation of iron ore for exports,

handling up 5% y-o-y
steel plants and for other domestic use were
down 7.65 percent to `784.03 crore in March
2018, compared to `848.94 crore in the
corresponding month of last year.
During FY18, transportation of iron ore
Coal Insight Bureau 2017. Revenue earnings of Railways from for exports, steel plants and for other domestic
transportation of coal during 2017-18 use by Railways stood at 139.80 mt, up 1.59

I
ndian Railways in March 2018
transported 55.89 million tons (mt) of
coal, up 10.11 percent from 50.76 mt
handled in March 2017.
Revenue earnings of Railways from
transportation of coal were up 18.15 percent
to `5,338.85 crore in March 2018, compared
to `4,518.52 crore in March 2017, as per
provisional information available with Coal
Insights.
During April-March, 2018,
transportation of coal by Railways stood
at 555.23 mt, up 4.10 percent as compared
to 533.35 mt clocked during April-March
stood at `51,294.97 crore, up 11.34 percent
compared to `46,069.58 crore in the
corresponding period of 2016-17.
Meanwhile, Railways transported
112.34 mt of various commodities in March
2018, up 3.91 percent compared to 108.11
mt in March 2017. Revenue earnings of
`11,138.25 crore from transportation of
these commodities in March 2018 were
also up 8.32 percent from `10,282.34 crore
earned in March 2017.
Apart from coal, Railways transported
12.22 mt of iron ore for exports, steel plants
and for other domestic use in March 2018,
percent from 137.61 mt in FY17. Revenue
earnings of Railways from transportation of
iron ore for exports, steel plants and for other
domestic use during financial year 2017-18
stood at `8,856.32 crore, up 5.5 percent as
compared to `8,394.25 crore earned in the
corresponding period of 2016-17.
Cement transported through railways
stood at 11.79 mt in March 2018, down
1.17 percent from 11.93 mt in March
2017. Revenue earnings of Railways from
transportation of cement were also down
1.37 percent to `1,040.84 crore in March
2018 from `1,055.34 crore in March 2017. 

Commodity-wise revenue earnings of Railways Commodity-wise revenue earnings of Railways

(March 2018) (April to March, 2018)
Tonnage (in million) Earnings (` in cr) Tonnage (in million) Earnings (` in cr)
Commodity Commodity
2016-17 2017-18 2016-17 2017-18 2016-17 2017-18 2016-17 2017-18
Coal Coal
Total for steel plants 4.40 5.36 362.19 467.25 Total for steel plants 48.11 56.27 3642.42 4515.20
Coal for washeries 0.12 0.03 9.38 0.71 Coal for washeries 1.25 0.29 69.52 6.04
Total for power houses 32.09 25.28 2,953.14 2,391.89 Total for power houses 341.10 243.90 31,237.59 22,885.92
Total for public use 14.15 25.22 1193.81 2479.00 Total for public use 142.89 254.77 11,120.05 23,887.81
Total 50.76 55.89 4,518.52 5,338.85 Total 533.35 555.23 46,069.58 51,294.97
Pig iron and finished steel Pig iron and finished steel
i) from steel plants 3.38 2.93 559.81 557.12 i) from steel plants 33.61 35.44 5,689.87 5,900.38
ii) from other points 1.88 1.85 178.90 206.01 ii) from other points 14.80 17.74 1,431.90 1,837.57
Total 5.26 4.78 738.71 763.13 Total 48.41 53.18 7,121.77 7,737.95
Iron ore Iron ore
i) for export 0.91 0.64 86.82 56.13 i) for export 7.50 8.19 645.57 690.10
ii) for steel plants 7.34 8.05 380.49 462.37 ii) for steel plants 80.35 86.60 4,156.89 4,992.73
iii) for other domestic users 5.12 3.53 381.63 265.53 iii) for other domestic users 49.76 45.01 3,591.79 3,173.49
Total 13.37 12.22 848.94 784.03 Total 137.61 139.80 8,394.25 8,856.32
Cement 11.93 11.79 1,055.34 1,040.84 Cement 104.15 114.18 8,765.66 9,613.94
Foodgrains 4.15 3.57 770.16 708.16 Foodgrains 44.93 44.09 7,816.46 8,208.74
Fertilizers 3.25 3.33 385.46 398.03 Fertilizers 48.92 48.58 5,939.87 5,997.64
Mineral Oil (POL) 3.89 3.81 529.97 528.98 Mineral Oil (POL) 42.93 43.62 5,839.35 5,755.48
Container Service Container Service
i) Domestic containers 1.06 1.08 145.54 136.66 i) Domestic containers 9.79 10.97 1,358.90 1,429.14
ii) EXIM containers 3.48 4.16 331.90 382.98 ii) EXIM containers 37.81 43.34 3,854.43 4,081.72
iii) Total 4.54 5.24 477.44 519.64 Total 47.60 54.31 5,213.33 5,510.86
Balance other goods 8.99 9.21 788.34 828.93 Balance other goods 79.93 85.73 7,537.72 7,927.63
Total revenue earning traffic 108.11 112.34 10,282.34 11,138.25 Total revenue earning traffic 1,108.79 1,161.66 104,563.37 113,024.98

52 Coal Insights, April 2018

 ADVERTORIAL

Volvo’s quality
and premier
service package
delivers 90%
uptime on
Indian mine

I
ndian mining customer Hilltop Hirise
was targeting 5,000 hours of operation
per year with the Volvo EC480DL —
but the machine delivered around 7,000
hours per year. For four years, the excavator
worked up to 22 hours a day in the toughest of environments,
On the Kankanee Colliery Coal Mines, potential problems
averaging an uptime of more than 90 percent thanks to Volvo’s
on the Volvo machine were identified at an early stage, enabling
superior design and an industry-leading service package.
relevant repairs to take place with minimal disruption to
Dhanbad is the ‘coal capital’ of India, and some of the largest
operations. “The experience of Volvo-trained technicians means
coal mines in the country can be found in the city. With production
they know what to look for in any particular machine,” said
levels on the rise, local mine operators need heavy-duty machines
Dimitrov Krishnan, Vice-President and head of Volvo CE India.
that are durable enough to withstand the punishing conditions
“Customers love Volvo machines for their high performance, but
and productive enough to meet rising targets.
maintaining that performance is all about taking a professional
One mine in the area is the Kankanee Colliery Coal Mines, run
attitude to machine support. To limit an EC480DL to minor
by Hilltop Hirise. The company purchased an EC480DL to handle
stoppages over 24,000 working hours at a mine is a great
overburden removal back in November 2014, and to ensure the
achievement, and the whole team at Infra Equip deserves a lot of
machine produced maximum uptime, it signed a Gold Customer
credit. In addition, we calculated that the Gold CSA saved Hilltop
Support Agreement (CSA). This Volvo agreement guarantees the
Hirise about ` 31 lakh ($47,923) in spare parts costs.”
highest levels of maintenance, inspection, repair and service for
Analysis tools and services like Care Track, Volvo Oil Analysis
all parts. This is executed by the local dealer – in this case, Infra
and MATRIS analysis can also be included in a Gold CSA. All
Equip, the Volvo dealer for the states of Jharkand and Bihar.
CSAs are managed by Volvo CE and executed in partnership with
As part of a Gold CSA, all dealer technicians working on
its distributors.
the machine must have completed a comprehensive Volvo
With a much better understanding of the EC480DL, Hilltop
training programme. As soon as the Gold CSA was effective,
Hirise has now opted for periodic machine inspections and
the technicians from Infra Equip worked daily if necessary to
preventive maintenance, to be managed locally by the dealer.
ensure the EC480DL enjoyed near-uninterrupted production. As
The EC480DL is the best-selling high capacity excavator in
a result, it avoided major breakdowns and recorded impressive
India. Its 265-kW engine features an automatic idling system
performance figures.
which reduces engine speed to idle when the levers and pedals
Working up to 22 hours a day, seven days a week, the
are not activated, lowering fuel consumption. The reinforced
EC480DL chalked up 24,000 hours of operation in its first three-
heavy-duty boom and arm are built from high-strength steel for
and-a-half years. Considering Hilltop Hirise was targeting
added reliability in severe applications.
5,000 hours per year, this represents a dramatic increase over
Hilltop Hirise was incorporated in 2010, and provides various
anticipated productivity.
coal mining services, including overburden removal, coal
“The preventive maintenance schedule devised by Volvo
extraction, drilling, site levelling and grading, and transportation.
helped us push our output above 150 percent at times,” said
Navin Tulsyan, Director at Hilltop Hirise. “The machine has Visit http://www.thenewsmarket.com/volvogroup to access
performed flawlessly with an average availability of over 93 broadcast-standard video from the Volvo Group. You can preview
percent, and the Gold CSA support provided by Infra Equip has and request video material as MPEG2 files or on Beta SP tapes.
proven very good value.” Registration and video material are free for the media.

Coal Insights, April 2018 53

 E-AUCTION

Monthly data of offered quantity through Monthwise quantity offered & alloted through
coaljunction & MSTC (road & rail) Qty. In Tons
Coaljunction & MSTC e-Auction Qty. In Tons

MONTH OFFERED BY ROAD OFFERED BY RAIL OFFERED QTY ALLOTED QTY Variation
MONTH
(in tons) (in tons) (In Percent)
Mar-17 14,622,000 1,191,962
Mar-17 15,813,962 5,757,696 -63.59%
Apr-17 3,924,340 1,073,952
Apr-17 4,998,292 4,118,314 -17.61%
May-17 7,679,340 695,588
May-17 8,374,928 4,764,642 -43.11%
Jun-17 5,966,770 410,460
Jun-17 6,377,230 3,412,235 -46.49%
Jul-17 6,021,560 632,828
Jul-17 6,654,388 4,125,243 -38.01%
Aug-17 4,345,070 403,722
Aug-17 4,748,792 3,631,534 -23.53%
Sep-17 3,758,400 225,852
Sep-17 3,984,252 3,217,567 -19.24%
Oct-17 5,254,480 136,290 Oct-17 5,390,770 4,720,539 -12.43%
Nov-17 6,272,400 513,714 Nov-17 6,786,114 5,822,990 -14.19%
Dec-17 9,746,730 888,474 Dec-17 10,635,204 9,629,698 -9.45%
Jan-18 6,146,680 172,000 Jan-18 6,318,680 5,078,216 -19.63%
Feb-18 7,062,650 751,542 Feb-18 7,814,192 6,244,595 -20.09%

Monthly data of offered quantity Quantity offered & sold through

through coaljunction & MSTC (road & rail)* coaljunction & MSTC
18,000,000
16,000,000
16,000,000

12,800,000 14,000,000
Qty Offered In Tons

12,000,000
Quantity in Tons

9,600,000 10,000,000

8,000,000
6,400,000
6,000,000

4,000,000
3,200,000
2,000,000

0 0

Jul-17
Jun-17

Aug-17

Sep-17
Mar-17

Apr-17

Oct-17

Nov-17

Dec-17

Jan-18
May-17

Feb-18
Jul-17
Jun-17

Aug-17

Sep-17

Jan-18
Mar-17

Apr-17

Oct-17

Nov-17

Dec-17
May-17

Feb-18

OFFERED BY ROAD OFFERED BY RAIL

OFFERED QTY (in tons) ALLOTED QTY (in tons)

Companywise quantity offered & alloted through

coaljunction & MSTC in Jan’18 vs Feb’18 via rail & road Companywise quantity offered & sold through
Qty. In Tons coaljunction & MSTC in Jan’18 vs Feb’18
January 2018 February 2018 Variation (In Percent)
Company
3,800,000
Qty Qty Qty Qty Offered Alloted
Offered Alloted Offered Alloted Qty Qty
BCCL RAIL
BCCL ROAD 202,700 196,700
CCL RAIL 2,850,000

CCL ROAD 2,019,680 1,238,580 1,977,100 1,186,350 2.15% 4.40%

ECL RAIL 576,312 440,022
Quantity In Tons

ECL ROAD 280,850 274,798

MCL RAIL 1,900,000

MCL ROAD 1,200,000 1,134,690 2,536,000 2,291,550 -52.68% -50.48%

NCL RAIL 175,230 175,230
NCL ROAD 400,000 400,000
NEC RAIL 24,000 24,000 950,000

NEC ROAD 34,000 34,000

SCCL RAIL
SCCL ROAD 572,000 330,586 549,000 167,485 4.19% 97.38%
SECL RAIL -
CCL RAIL

SECL RAIL
BCCL ROAD

ECL ROAD

MCL ROAD

NCL RAIL

NEC ROAD

SCCL ROAD

WCL ROAD
BCCL RAIL

ECL RAIL

MCL RAIL

NEC RAIL
CCL ROAD

NCL ROAD

SCCL RAIL

SECL ROAD

WCL RAIL

SECL ROAD 1,555,600 1,550,600 887,000 886,000 75.38% 75.01%

WCL RAIL 148,000 148,000
WCL ROAD 562,700 421,060 432,700 423,160 30.04% -0.50%
Companies

Jan-18 QTY OFFERED Jan-18 QTY ALLOTED Feb-18 QTY OFFERED Feb-18 QTY ALLOTED
TOTAL 6,318,680 5,078,216 7,814,192 6,244,595 -19.14% -18.68%
E-auction data through coaljuntion and MSTC for the period ended January’18 Vs February’18
* For details break-up, subscribe to India Coal Market Watch (ICMW)

54 Coal Insights, April 2018

 port data

Major ports through which coking coal arrived in Major coking coal supplier countries to India
India – February 2018 (through select ports)– February 2018

Port Qty (in Tons) Port Qty (in Tons) Country of Origin Qty (in Tons) Country of Origin Qty (in Tons)
PARADIP 1,201,174 MAGDALLA 25,000 AUSTRALIA 2,231,605 NEW ZEALANDS 56,249
VIZAG 494,753 PIPAVAV 14,000
KOLKATA 449,470 UNITED STATES 253,951 INDONESIA 19,980
CHENNAI 38
GANGAVARAM 279,220
HAZIRA 38 CANADA 148,600 UNITED KINGDOM 76
KRISHNAPATNAM 161,515
MARMAGOA 136,016 MUMBAI 0.49
Grand Total 2,844,462 MOZAMBIQUE 134,001 Grand Total 2,844,462
KARAIKAL 83,237

Major ports through which coking coal arrived Major coking coal supplier countries to India
in India – February 2018 (through select ports) – February 2018
5.2%

9.8% 5.7%
15.8%
9.1% 8.9%
7.4%
17.4% 78.5%

42.2%

PARADIP VIZAG KOLKATA

GANGAVARAM KRISHNAPATNAM OTHERS
AUSTRALIA UNITED STATES CANADA OTHERS

Major ports through which non-coking coal Major non-coking coal supplier countries to India
arrived in India – February 2018 (through select ports) – February 2018
Port Qty (in Tons) Port Qty (in Tons) Country of Origin Qty (in Tons) Country of Origin Qty (in Tons)
MUNDRA 2,604,014 KARAIKAL 325,252
KRISHNAPATNAM 1,298,631 HAZIRA 271,515 INDONESIA 5,270,389 RUSSIA 202,730
GANGAVARAM 717,403 KOLKATA 209,231
VIZAG 634,936 SOUTH AFRICA 2,400,812
MUMBAI 184,191 MOZAMBIQUE 77,073
PARADIP 556,333
KAKINADA 110,737 OTHERS 972,422
ENNORE 538,423
KANDLA 103,511 COLOMBIA 246
TUTICORIN / VOC 525,377 AUSTRALIA 335,782
MAGDALLA 487,841 MARMAGOA 100,122
NEW MANGALORE 450,876 CHENNAI 298 Grand Total 9,520,995
UNITED STATES 261,542
DAHEJ 402,304 Grand Total 9,520,995

Major ports through which non-coking coal Major non-coking coal supplier countries to India
arrived in India – February 2018 (through select ports) – February 2018
2.1%
11.0%
3.5%

6.7% 5.8% 5.7%

7.5% 5.5% 2.7%

13.6% 25.2% 55.4%

27.8%

27.4%

MUNDRA KRISHNAPATNAM GANGAVARAM

VIZAG PARADIP ENNORE
TUTICORIN / VOC OTHERS
INDONESIA SOUTH AFRICA AUSTRALIA

UNITED STATES RUSSIA OTHERS

Note: Figures are based on consignment lifted from these ports for which price details/break-up is available with ICMW team
*For details break-up, subscribe India Coal Market Watch (ICMW)

56 Coal Insights, April 2018

58 Coal Insights, April 2018
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