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Ashok Jain, Managing Director, Saumya Mining Ltd
Deepak Bhattacharyya, Head – coaljunction, mjunction services ltd
Ganesan Natarajan, WT Director, President & CEO, Ennore Coke Ltd
Lawrence Metzroth, Vice President – Analysis & Strategy, Arch Coal Inc
M K Palanivel, President – All India Bulk, Samsara Group
S N Choubey, Asst. Vice President – CPC, UltraTech Cement Ltd
Sandeep Kumar, Managing Director, S & T Mining Co Pvt Ltd
Shyam Sundar Beriwala, Chairman, Shyam Steel Industries Ltd
Suresh Thawani, Managing Director, Tata Sponge Iron Ltd
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EDITORIAL
Dear Readers,
Technology, other than information technology, has not yet
become a strong point for Indian industry, and much less so for
the mining sector. Despite remarkable improvement in the last
two decades, the country still lags in comparison to the developed
world and some developing nations, particularly China. No
doubt, the Indian mining equipment industry has come a long
way since the setting up of the first unit of Bharat Earthmovers (a
defence PSU) in 1964, but it still has a long way to go.
It is indeed a strange phenomenon that India – the third
largest producer of coal and lignite, largest producer of mica
and fourth largest producer of iron ore – still has to source
sophisticated mining equipment, particularly for underground
mining, from overseas. In the words of coal minister Sriprakash
Jaiswal, “Equipment supplies are adversely affecting the growth
in production. Performance of equipment being supplied by the
manufacturers is an area of concern and the coal industry needs
amicable solutions to the issue.”
The issue of expanding indigenous coal production, which
accounts for 80 percent of all mining activity in India, is the
need of the hour. The country needs to grow its coal supplies
at 10 percent compared to current 7 percent to match up to the
demand. Fuelling the economy will be crucial for this and the
mining equipment sector is an integral part of this refuelling.
Opencast mining, contributing 90 percent of coal
production, is nearing saturation and the coal producers,
mainly Coal India Ltd, is looking at underground mining
for which they will need sophisticated and highly technical
equipment. Not only CIL, but new entrants into coal mining
sector too will need equipment in huge quantity as they start
production from captive blocks.
Also, the consumption of steel is pretty low compared to
international standards and is slated to rise at a furious pace.
This generates a huge demand for iron ore mining and the
equipment needed for that. This could be an area of concern,
as expressed by the minister, and yet a sea of opportunity.
According to some estimates, the overall market size of
Indian mining industry may grow by nearly 20 to 25 times
from the current level of around `15,000 crore by 2015. Also,
the sector is expected to witness huge investment estimated
at around `2,00,000 crore in the next five years. These are
ambitious projections, but given the dramatic pace of growth
in Indian mining production, it could be achievable.
Considering the importance of the mining equipment
industry, the editorial team of Coal Insights has attempted to
highlight various developments in this sector in India as well
as abroad in order to place before its esteemed readers a clear
picture on what is happening and what needs to be done to
improve the situation.
Hope the issues raised and information provided on
mining equipment industry in the current issue of the
magazine besides other regular features would help our
esteemed readers to plan their strategies.
Wishing you a happy and prosperous Diwali.
Warm Regards
Rakesh Dubey
Chief Editor

Contents
COVER STORY
6 Mining equipment makers need to
step up R&D
12 India, China lead global resurgence
14 HEC targets `1000 cr sales by
2011-12
16 BEML plans to double turnover
18 Global cos bank on emerging
economies
COAL MARKET FUNDAMENTALS
22 Steady demand pushes up thermal
coal
23 Coking coal contract price drops for
Q3
FEATURE
25 Competitive bidding: Will it improve
the situation
29 Coal ministry puts illegal mining
onus on state govts
31 Coke shortage may hamper steel
growth
34 India’s m-o-m cement production
falls in Aug
36 Coal ministry faces huge backlog of
linkage applications
38 NELP-IX: bidding to close on March
18
39 Forestry clearance delays may
derail growth prospects
43 India misses Sept power generation
target
GOVERNMENT
47 Coal ministry firm on profit sharing,
doesn’t rule out price rise
INTERNATIONAL
49 Forum seeks Canada-India mining
ties
50 RBCT August coal exports go down
51 Australia okays $30-bn coal gas
projects
52 New Indonesian norm on low quality
coal sales
53 EIA raises 2010 US coal
consumption and production outlook
EXPERT SPEAK
55 Heat recovery Chinese coke ovens:
Problems & Solutions
58 The menace of over-reporting in
coal companies
CORPORATE
60 Abhijeet Group focuses on core
sectors
61 Indonesian cos evince interest in
Nalco JV
62 Sandvik installs its first primary
gyratory crusher
63 CIL in top league after IPO success
64 NTPC’s first nuclear power plant
likely by 2013-14
65 Banks not tapped for captive block
funds
LOGISTICS
66 Freight rates improve strongly in
end-Oct
67 Railways traffic improves in Sept
POWER SECTOR UPDATE
68 All India energy generation
programme and PLF
SNAP SHOT
76 Chile mine rescue – a marvel of
teamwork and determination
E-AUCTION DATA
82 CIL’s August coal sales through
e-auction down
ALL INDIA COAL DATA
86 India’s coal production rises in
August
PORT DATA
90 Coal import data
COAL INSIGHTS 4 October 2010

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COAL INSIGHTS 5 October 2010
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Cover Story
Mining equipment makers need
to step up R&D
Arusha Das
As India stands on the threshold of a massive
industrial resurgence, the mining sector and
consequently the equipment manufacturers, are
benefiting directly as a consequence.
No wonder then, that domestic and foreign
mining equipment companies are looking
forward to a period of stable growth in
India during the next two to three
years. This optimism is on the back
of resurgence in demand for highend
and cost-effective mining
equipment.
Just about a year ago, the
mining sector was not spared the
effects of the recession, though
it took a milder hit compared to
several other sectors. However,
the recovery has been fast.
“The mining sector has been expanding at 3 to 4
percent yearly, and this growth is expected to continue in
many of the key mining regions of the world with India
and China providing the momentum. Coal production
in the country has moved up by 3-4 percent while
iron ore production has surged by around
4-5 percent,” managing director of
the German engineering federation
VDMA, Rajesh Nath, informed Coal
Insights.
Demand supply curve
The industrial sector registered
a growth of 7.6 percent during
April-November in 2009-
10, against 4.1 percent in the
corresponding period of last year.
The mining sector posted a growth
COAL INSIGHTS 6 October 2010

Cover Story
INDUSTRIAL GROWTH INDICATORS - Sectoral
Growth Rates based on IIP
(Growth Rate in percent)
Item
Weight
(%)
2007-08 2008-09
Apr-Nov
08-09
Apr-Nov
09-10
Overall 100 8.5 2.8 4.1 7.6
Mining and Quarrying 10.5 5.1 2.6 3.4 8.3
Manufacturing 79.4 9 2.8 4.2 7.7
Electricity 10.2 6.4 2.8 2.8 6.1
Source: Ministry of Heavy Industries and Public Enterprises &
Insights Research
Sales of equipments in India in units sold
Year International players in India Indian Players
2008-09 4200 500
2009-10 5500 600
2010-11 (Upto Sept) 2700 200
Source: Komatsu & Insights Research
of 8.3 percent during the same period compared to 3.4 percent
registered in the corresponding period of last year. Keeping
this in mind, Coal Insights took a close look at the equipment
manufacturing sector, which is poised to play a crucial role in
the mining growth that is just waiting to happen.
“The equipment industry is in good shape and there is
huge demand for mining equipment. Moreover with massive
expansion plans mapped by SAIL and CIL, mining activities
would considerably rise, the demand for mechanisation and
highly productive, safe, efficient and cost effective machinery
will increase, and thus the growth in demand is inevitable,”
said an industry expert.
The new mining policy of the government of India is also
expected to give a further boost to the mining sector. As per
industry experts, the mining sector now accounts for 2.8
percent of the GDP, and the figure is slated to go up.
“Currently, the market size of mining equipment in the
country is estimated to be over Euro 1 billion. Being a highly
competitive industry, it comprises public as well as private
sector companies including joint ventures and closely held
companies,” said Nath.
However, the Indian local equipment market is still at a
nascent stage, except for some companies like who supply to
the Indian requirements, rest is imported or purchased from
the foreign companies with units in India,” said an official of
Komatsu, an international equipment manufacturer.
Due to the present demand-supply gap, a lot of the current
demand is met by imports. “Around 70 to 80 percent of the
domestic requirement is catered by the domestic production
which is inclusive of the international players who have set
up units in India, while the rest is imported,” a market expert
said. India imports largely from Russia, Germany, China
and also North America. In addition to this, there are many
international companies in the Indian market who import on
behalf of the miners. Some of these companies do not have
manufacturing base but have technology. Thus the designing
is done by them as per market conditions and then it is
manufactured in their base units which is then imported to
India.
“India imports around Euro 600 to 650 million of mining
equipment,” noted Nath. The rationale behind increasing
imports is the perceptible shift in trend towards using larger
size, cost effective and technologically upgraded equipment to
meet the exponentially growing demand for minerals.
“With increasing activity, Indian miners are now looking
for more efficient and technologically sound machines for good
production. Thus, despite the fact that the machineries made
by the foreign companies are expensive, they are gradually
getting accepted in the Indian market. The advantage is that
although there is a high initial investment, the long term
maintenance cost is much lower. Thus, after some resistance
amidst the Indian buyers, it is slowly picking up now,” the
official of Komatsu informed.
In addition to this, most of these products are not
manufactured in India or Indian companies and thus
have to be imported, Coal Insights gathered. Around 80 to
85 percent of the equipment for underground mining are
imported while around 20 to 25 percent are imported for
opencast mining.
“Basically the earlier methods were not efficient, and
machines used to break down. Now with increasing
production, more reliable equipment is required, which will
help in better production,” said an industry expert.
Vis-à-vis the global market, India fares well in terms of price
and quality. However, Indian equipment manufacturers lag
behind their international counterparts in terms of technology,
market experts feel. “Indian equipment is cheaper but there
are limitations in capacity. High capacity equipment is not
yet available in India,” pointed out Nath. “Indian products
are competitive in terms of prices and also in terms of quality
but technological upgradation is required,” said an official of
HEC, one of the leading domestic equipment supplier and
manufacturer.
Thus, the Indian equipment manufacturers are upgrading
themselves both in terms of quality as well as capacity in
order to make themselves globally competitive. “India is
campaigning abroad to take up international mining projects,”
said an official of BEML, the public sector equipment
manufacturing biggie.
Indian equipment has found markets in the Middle East
and Africa, where cost-competitiveness is a bigger factor than
technology. It is also supplying some spares to Europe and
the US.
The sourcing
Indian mine owners generally acquire the equipment by two
routes. They either purchase it or take it on rent or lease. It will
COAL INSIGHTS 8 October 2010

Cover Story
be interesting to note that during recession, the major mine
owners opted for more and more of outsourcing, and thus
direct purchases by mine owners saw a drop.
However, as the markets recovered, the sales have also
increased. “In the coal segment 70 percent of the production
is done by CIL and its subsidiaries. They purchase equipment
along with long term service contract. This happens mainly
for large contracts.
The miners look for life warranty period for new machines
which is decided by the manufacturing companies depending
upon the conditions. Thus companies like BEML set up service
centres at the respective areas to provide the best services,”
said an official of BEML.
“The Indian mining industry generally buys 90 percent of
their mining requirement but during buying the maintenance
contract is also included. This is made as a part of the deal and
is done by OEM for the new equipment. The concept of leasing
has just started and some companies are slowly entering in
this route,” the HEC official informed.
Companies like NMDC and SAIL sometimes purchase
the machinery. However, players like Essar go for the
subcontracting route for the major part of their mining
operations. CIL also purchases equipment by either global
tendering or domestic bidding. Most steel companies
outsource just a part of their mining operations, and for certain
activities like overburden removal and wagon loading, they
take the equipment on rental lease.
Mining companies like CIL and NMDC purchase
equipment along with maintenance and repair contract
(MARC). Here the equipment manufacturer has to take the
responsibility of maintenance and repair of the equipment
during its life span.
Pain points
Although the market outlook is optimistic at present, but
very lately the industry has been plagued by the slowdown
in mining activities. “The pace of the projects is not the same
as expected due to land clearance and environmental issues.
The projects are not moving as expected and this scenario
has been continuing for the last six months. The Ministry of
Environment and Forests has modified certain issues. The
effect has been more on coal mining than the iron ore mining
therefore the sales of the equipments have gone down,” the
official of Komatsu informed.
But this is a temporary phase, and the demand is likely
to pick up soon as the Prime Minister’s Office has intervened
into the issue and thus it is likely to be resolved soon, as per
industry experts.
“In India demand for coal is increasing, but the projects
are affected due to environmental issues. The companies are
busy in land development which indirectly affected the Indian
equipment industry and sales are hit,” said Nath.
Another pain point of the industry is the volatility in steel
prices. As steel is the main raw material for manufacturing
machineries, volatility in steel prices has affected the
machinery prices. Nath noted that this has resulted in the
price of equipment rising across the globe.
The way forward
The mining equipment sector can just grow from this point.
The economy is poised to grow at 8 to 9 percent in the next
decade coupled with huge plans made in all industries,
especially steel, and the demand for raw materials is soaring.
In fact, raw material security is one of the major concerns of
the industrial sector.
The mining industry has targeted to achieve
`4,16,500 crore by 2015. Coal and iron ore mining
is expected to grow as the government has
promised ‘power for all’ in the next couple of
years and the construction of infrastructure is
expected to boom.
As per industry reports, with more and more
international players entering the sector and local
companies ramping up production capacities,
the Indian mining equipment industry is also
expected to see an investment of `22,395 crore in
the next five years.
Clearly the increasing demand would speed
up the high capacity mining and increasing
automation. Thus, the requirement for large
equipment is also expected to shoot up.
The mining sector is now looking at
highly sophisticated, efficient and customised
equipment. Thus, it is imperative for the mining
equipment companies to technologically revamp
itself and increase investment in R&D.
COAL INSIGHTS 10 October 2010

Cover Story
India, China lead global resurgence
Arusha Das
As opposed to the Indian mining sector which was
largely unaffected by the global meltdown, the global
mining sector was hit quite badly.
However, there is a gradual, albeit slow, improvement in
the global scenario. The global demand for mining machinery
and equipment began to plummet in 2008 due to the downturn.
The decline in demand continued through 2009 but some
growth although very slow has been seen in 2010.
In terms of unit sales, China represents the largest market
for mining machinery worldwide, as per industry experts.
“The mining in the European countries is still slow. But there
is growth in both India and China and these markets will be
expanding further in future.
During recession and in 2009 the global mining sector
was hit, which hit the equipment manufacturers as well. This
resulted in a drop of 15 to 20 percent in the sales turnover of
the equipment manufacturers. But in 2010 the situation is
somewhat better,” said an industry expert.
Referring to the German mining equipment industry,
managing director of German engineering federation VDMA,
Rajesh Nath, told Coal Insights that the industry has overcome
the crisis well. In 2009, the industry turnover was Euro 3.5
billion and in 2008 it was almost at the same level.
“The mining equipment industry in Germany posted better
results than any other engineering industry in the region as
a lot of supplies catered to the massive Chinese requirement
along with some backlog orders,” Nath informed.
Speaking about the current scenario, an official of HEC
said that: “In the international market, the Chinese market is
robust. In Australia, mining is growing. In addition to this,
in Brazil the steel industry is surging. Thus, there is huge
opportunity mainly from BRIC nations.”
The mining sector
However, very lately, the international commodity markets
were being influenced by near term slowing from China
and from declining momentum of industrial production in
the US.and other developed countries. Both China’s and US
steel output is down in the second half of 2010. This slowing
growth in steel production is impacting near term demand for
met coal and iron ore. Thus, demand for these raw materials is
levelling off along with softening of prices.
Meanwhile, copper imports into China also have been
impacted by significant reductions in Shanghai exchange
stocks. China’s slowing down is being offset by increased
demand in the rest of the world, and this is providing support
to pricing.
As a result, copper expansion projects are happening in
North and South America and Australia, along with future
greenfield projects in Central Africa and Mongolia.
In the seaborne thermal coal markets, it continued to be
robust through the first half of 2010, led by China and India.
Imports are expected to moderate in the second half. In
addition, India’s major new power plants are being sited in
coastal regions to enable access to seaborne markets.
Thus, future demand will continue to be driven by new
coal-fired power generating capacity scheduled to come on
line in Asia Pacific during 2010. These additions will increase
regional coal consumption.
In the interim, the US.coal market continued to improve.
Although the macroeconomic factors could impact near term
demand, but if the longer term fundamentals continue to
improve, it would trigger a positive outlook for commodity
markets. Emerging markets will continue to industrialise their
economies and the developed countries will continue to recover.
Thus, the demand for mined commodities continues to be
dominated by strong imports from the emerging markets, and
from China and India in particular, with improving but still
weak fundamentals from the industrialised countries. “India
has been growing fast in terms of mining and in China also
there is massive growth,” said an official of BEML.
Thus, India is gradually witnessing growing interest from
the international players. Nath pointed out that there has been
a number of investments made last year. “ThyssenKrupp
Materials Handling Pty Ltd. (TKMH), a subsidiary of German
based global corporation, ThyssenKrupp AG has set up a
manufacturing unit in India.
Carlisle Companies Inc, a US based manufacturer
announced the opening of its first India office in Chennai.
The company has several diversified divisions including
construction materials. Carlisle Trading and Manufacturing
India Pvt Ltd, a wholly owned subsidiary of Carlisle
Companies Inc will initially focus on India’s growing mining,
construction and power sectors.
Another mining equipment maker, Hectronic GmbH,
has launched its India operations through a wholly owned
subsidiary. The company offers “Intelligent Fuel Management
Solutions” that help cut down unaccountable fuel costs. The
solution uses globally proven robust technology of hardware
and software which provides great tool for tracking and
control on critical refuelling operation. By implementing
Intelligent Fuel Management Solution, one can achieve total
transparency in refuelling operation and can take more
responsible decisions.
Wirtgen GmbH, a member company of the Wirtgen
Group, an internationally active group of companies in the
COAL INSIGHTS 12 October 2010

Cover Story
construction equipment industry, is setting up a unit in Pune.
The unit is likely to be completed in another year.
In addition to this, German companies are also tying up
with Indian producers. For instance, HAZEMAG & EPR
GmbH is a company belonging to the renowned EPR group,
which has ventured into the mineral processing sector by
tying up with Hari Machineries. The company is now going
for licence agreement with Hari Machineries.
Thus, Hari Machineries would be manufacturing for
the company. The German companies are looking forward
for JV or tie up with Indian companies and much of such
activities would be seen soon as Germany looks at India as an
opportunity region,” Nath explained.
Market outlook
Global demand for seven major products of mining equipment
expanded by a year-on-year average rate of about 15 percent
from the fiscal year ended March 31, 2004 through the fiscal
year ended March 31, 2008. It was driven by growth of demand
centering on emerging economies.
With such positive outlook, the global mining equipment
demand is likely to grow significantly over the years. Presently,
China is a major market for mining equipment worldwide,
backed by the country’s expanding mining industry. In
addition to China, Australia and India are the other major
markets in the Asia-Pacific region, where demand related to
mining equipment is high.
HEC targets `1000 cr sales by 2011-12
Arusha Das
India is home to myriad metals and minerals with
significant reserves and the mining sector has an
optimistic outlook.
The Heavy Engineering Corporation Ltd (HEC),
manufacturer of equipment and machinery for the iron
and steel industry and mining, is all set to almost double
its sales to `1000 crore by financial year 2011-12 from the
existing `512 crore.
“We are targeting sales of around `750 crore by the end
of the current financial year and further take it forward
to `1000 crore in 2011-12,” a company official told Coal
Insights.
In order to achieve the target, the company has mapped
a multi pronged strategy. On one hand, it is trying to
diversify itself in various segments, and on the other, it is
trying to enter the export market.
“We are optimistic that with these strategies in line, we
will be able to post a profit of `35 crore by the end of the
current financial year and take it to `100 crore by the end
of next financial year, from the current profit of `27 crore,”
he added.
The PSU was also in talks with the Nuclear Power
Corporation for opportunities for products used in nuclear
reactors. The company will try to bring a foreign company
as technical and financial collaborator for making finished
products for nuclear power plants. The nuclear business
project expenditure may be around `1000 crore.
In addition to this, the company is also planning to
expand its product basket and incorporate the complete
range of large crushers in the existing product line. The
company is also in talks with international players for new
products but nothing has been finalised as of now.
“We are open to tie-ups with international partners as
the industry is now looking for technologically advanced
machines, in view of the growing demand of coal and iron
ore in the country,” the official hinted. The company is
optimistic that all this will translate into consistent year on
year growth of 20 percent.
Meanwhile, the Ranchi-based engineering PSU is
planning to list its shares on the bourses and a proposal
will be sent to the government in the next financial year.
The company can supply 25 excavators and two to three
crushers per year, in the mining segment. The company has
recently acquired an order from North eastern Coalfield,
for a key dragline after 15 years.
“We have recently got an order for one key dragline
from North Eastern Coalfield, a subsidiary of Coal India
Limited, after 15 years. This machine has a weight of 2000
tons and requires 14-15 months for manufacturing. We
are also expecting two similar orders in this segment,” the
official said.
The official informed that though the company is
working on having its footprint in the international
markets, it is not getting too many enquiries as the
international mining segment is still slow. The company
has three manufacturing units namely – Heavy Machine
Building Plant
(HMBP), Heavy Machine Tools Plant (HMTP) and
Foundry Forge Plant (FFP). The company manufactures a
wide range of equipment for steel plants, material handling
equipment like wagon tipplers and EOT cranes, heavy
machine tools including CNC Machine tools and special
purpose machine tools and various types of castings,
forgings and rolls etc.
COAL INSIGHTS 14 October 2010

Cover Story
Beml plans to double turnover
Arusha Das
With the country’s industrial sector poised for a
quantum leap, the outlook for India’s mining sector
is bright, triggered by strong domestic demand.
BEML Limited, one of the leading names that come to mind
in the Indian mining equipment industry, is all set to tap
the long-term prospects of the industry. The company plans
to penetrate further into the market both in the domestic as
well as in the global segments. For that, it intends to increase
production on one hand and on the other, tap newer markets.
The leading manufacturer of heavy earth moving
equipment has a capex plan of `180 crore this fiscal and a
similar amount next year. “We plan to double the current
turnover to `7000 crore. The fastest-growing segment will be
mining and construction and there will be some growth in
defence too,” a company official told Coal Insights.
The company has recently formed a joint venture with
Mineral Exploration Corporation (MECL). Referring to this,
the official noted that there are over 200 to 300 coal and noncoal
mines allotted to the private sector which need someone
to offer consultancy, mine planning and exploration services
to them. It was to tap these huge opportunities in the domestic
market that the JV was formed. In addition to this, the company
will also be providing drilling equipment through this JV.
BEML, along with Coal India (CIL) and Damodar Valley
Corporation (DVC), has also acquired the plant and machinery
of Mining and Allied Machinery Corporation (MAMC) in
Durgapur in August 2010. BEML will have a 48 percent stake
and 50 percent voting rights in the new joint venture. The
company will leverage the assets, technology and expertise of
MAMC in the new business. MAMC, which was 100 percent
owned by the Ministry of Heavy Industries, has now been
renamed MAMC Industries. The plant had been shut for eight
years. The West Bengal government has agreed to give BEML
BEML product basket
BD475 BD355 BD355X BD155
Crawler Dozers BD155X BD230 BD80 BD65X
BD65-1 BD65 BD50 BD31
Wheel Dozers BD46W BD30W-1 BD14W
BE1600 BE1000-1 BE1000E BE700
Excavators BE300LC BE220 BE220LC BE220X
BE200
BE71
BH100 BH90 BH85-1 BH70 BH60
Dump Trucks
BH50M BH40 BH35-2 BH35
MT4400AC MT4400 MT3700AC MT3700B MT3600B
MT3300AC MT3300 MT3000
Loaders BL200-1 BL656-1 BL636-1
Backhoe Loaders BL9H(4X4) BL9H
Source: BEML & Insights Research
land on lease for the plant, which will make equipment for the
steel and power sectors and underground mining equipment.
“We plan to restart the plant soon,” noted the official.
Meanwhile, with the intention to diversify and foray into
new segments, the company has recently opened a new plant
in Palakkad, Kerala, to manufacture components for railway
coaches. It is spread over 375 acres of land and has a builtup
area of 2 lakh sq ft. The investment on the new plant was
about `150 crore, and the project was completed in 10 months
from the day the land was handed over to the company. In
phase II, BEML will spend `140 crore, and it is now waiting
for the Kerala government to give them 600 acres before
they start work. In addition, BEML is also expanding two
facilities in Mysore and Kolar gold fields, where the company
manufactures heavy vehicles used by the army in deserts
and hilly terrain, at a cost of `180 crore. The company will
commission them in the next fiscal.
In addition to this, the company has just come out with
an 80-ton aluminium wagon for freight corridors, for which
Nalco supplies the material. BEML is also in the process of
building a 100-ton stainless steel wagon with SAIL. The
company is also looking at high-speed and medium speed
trains. The company now has four units, including the new
Palakkad one. Of these, the KGF complex and Mysore unit are
involved in producing mining equipment which account for
60 percent of the total equipment produced by the company.
The company’s earth moving division (EMD) at Kolar Gold
Fields (KGF) is located about 100 km from Bangalore. It is the
biggest manufacturing plant of BEML catering to design and
development, manufacturing, testing and after-sales service of
earth moving equipment and its aggregates.
The company is also secured in terms of raw material.
BEML’s subsidiary company, Vigyan Industries Limited,
produces casting which caters to the in house requirements,
while the remaining is sold in the open market.
The company has posted a growth of 18 percent in the
sales to `3557.67 crore in 2009-10 compared to `3013.47 crore
in the corresponding period in the previous year. The value
of production also posted a growth of 12.5 percent, reaching
`3708.66 crore in the financial year 2009-10 compared to
`3294.19 crore in the corresponding period in the previous year.
Despite the notable increase in sales volume, the profit
took a hit owing to low metro car sales, lesser quantum of
sales of spares and lesser turnover of exports coupled with
severe competition that had pressure on the margins. There
was drop in exports on the account of global recession and
also many orders could not be converted into LC owing to
fund constraints with the customers. However, the company
has increased its international presence from 55 countries to 56
countries and added Brazil to the list. It has also initiated steps
to maximise the profits.
COAL INSIGHTS 16 October 2010

Cover Story
Global cos bank on emerging economies
Arusha Das
There was a very strong commodities market correction in
2009. The collapse of US market in Q4 of 2008 has directly
impacted the demand for commodities and thus the
mining equipment market. However, the situation is improving
and the growth is driven by the emerging economies. Thus
the global mining equipment majors are now looking towards
these strategic markets which are being fuelled by the growth of
infrastructure development projects resulting from advancing
urbanization as well as the expansion of demand for commodities
and energy sources resulting from an increasing population.
KOMATSU
As the market showed signs of recovery, some economies
generated signs of recovery, reflecting positive effects of the
economic stimulus packages of their respective governments.
The positive effects of the Chinese economic growth are
reaching the surrounding Asian countries and those with
natural resources, helping their economic recovery. However,
the pace of economic recovery was dull in Japan, North
America and Europe.
Thus, Komatsu was engaged in production adjustment
around the world and achieved an appropriate level of
inventories in the first half. The company also reorganised
production of businesses of both the construction, mining and
utility equipment and the industrial machinery and others,
while realigning sales of construction equipment and forklift
trucks in Japan.
In addition to this, to ensure sales and profits, Komatsu
reinforced ICT-deployed businesses, such as the KOMTRAX
(Komatsu Machine Tracking System), strengthened operations
in China and mining equipment, in which business was
expanding, and worked to strengthen the parts and service
business. Affected by global demand the market did not come
back to the level of the pre-financial meltdown. Thus, both
sales and profits declined from the previous fiscal year.
The company is anticipating that economic growth in these
emerging countries will drive global demand. The company has
positioned Asia, Oceania, Latin America, Africa and some other
emerging economies as “strategic markets,” and is working
to drive growth. The company’s strengths are its global sales,
service and production networks. As of June 30, 2010, Komatsu
has 205 distributors in 148 countries, covering 99 percent of
global demand in units. Forty-five production facilities of its
construction, mining and utility equipment business are in
operation in Japan, China, the Americas, Europe and CIS.
India operations
The company’s manufacturing facilities are located in Chennai
and Bangalore. The Chennai facility concentrates on more of
larger size equipment, while the Bangalore facility is a joint
Percentage Share of Sales by Region for 2010
(To Outside Customers)
7%
7%
13%
22%
Source: Komatsu & Insights Research
3%
venture with Larsen & Toubro. Komatsu is targeting to run on
100 percent capacity even in the current fiscal, said a company
official. Relying on the upcoming growth in the mining sector
of India, Komatsu is planning to enhance their market position
by measures like product launchings before competitors,
expansion of local production and further reinforcement of
sales and product support operations.
Specifically, the company intends to make a decisive
difference from competitors with no downtime of customers’
machines by not only providing products with superior QCDS,
that is, quality, cost, delivery and safety but also ensuring
prompt spare parts delivery and service. The company is also
strengthening manufacturing cost reduction activities in China.
JOY GLOBAL
Joy Global Inc., a leading manufacturer and servicer of high
productivity mining equipment for the extraction of coal and
other minerals and ores, also chalked out a strategy to beat
recession. Joy opened its first Smart Services Center in South
Africa. Through the use of wireless technology, Joy engineers
can gather relevant information on machines working
underground. This provided preemptive and predictive
feedback which in turn provided better machine performance
and lower costs while maintaining focus on worker safety.
The company also delivered and commissioned the largest
capacity powered roof supports in the world. The mine in
Australia started production with a full Joy system (shearer,
armored face conveyor, powered roof supports and control
platforms), including state of the art powered roof supports.
This has set a new benchmark in lifecycle design and test, with
successful 90,000 cycle testing and a rated capacity of 1900 tons.
Joy has also delivered Top Coal Caving capability for its
armored face conveyor product in China. The company has a
significant presence in Australia, South Africa, the UK, China
and the US as well as sales offices and service facilities in India,
Poland and Russia. The company’s product basket includes
continuous miners, shuttle cars, flexible conveyor trains,
18%
11%
19%
Japan
China
North America
Asia & Oceania
Europe
Middle East & Africa
Latin America
CIS
COAL INSIGHTS 18 October 2010

Cover Story
complete longwall mining systems (consisting of powered
roof supports, an armored face conveyor, and a longwall
shearer, continuous haulage systems, battery haulers and roof
bolters.
Additionally, Joy also maintains an extensive network of
service and replacement parts distribution centres to rebuild
and service equipment and to sell replacement parts and
consumables in support of its installed base. This network
includes five service centres in the US and eight outside the
US, all of which are strategically located in major underground
mining regions. The surface mining equipment unit of the
company P&H Mining Equipment continued to build upon the
successful introduction of AC-drive electric mining shovels in
2009. This is applied to its wide-track P&H 4100BOSS shovels for
oil sand mining and other soft-ground operations in 2008. ACdrive
P&H 4100XPC shovels will be introduced starting in 2010.
P&H Mining Equipment introduced a new remote health
monitoring system during 2009 to help mine operations
optimize productivity and reliability performance on their
P&H shovels. This system features powerful shovel systems
health monitoring, data trending and diagnostics tools that
help mine maintenance personnel obtain faster resolution of
machine performance issues.
Meanwhile, the Continental Crushing & Conveying
completed a new coal offloading and storage facility for the
port of Tyne, UK. The fully-integrated system can deliver and
create individual 65,000-ton stockpiles of “separated coal.”
It included system monitoring using video cameras and
stockpile height and movement monitoring. This conveyor
system sequencing and pre-start and emergency stop were
installed for safe and efficient transport of material.
BUCYRUS
Although 2009 proved to be a very difficult year for many
US based companies, the situation was not the same for
Bucyrus. It was one of the only few companies which was
able to increase both revenue as well as earning. Considering
that more than 70 percent of the sales are generated outside
US and the relative strength of the international markets, the
geographic diversity has allowed the company to weather
much of the domestic turmoil.
The market uncertainty propelled the company to reevaluate
the overall plan for 2009, and as a result, the company
was able to set up a solid base for financial year 2010. The
78%
2009 Machine sales by commodity
Coal Copper Iron ore Oil Sands Other
Source: Bucyrus & Insights Research
company decided to proactively manage the $2.5-billion
backlog the company had at the end of 2008, by trying to help
the customers to defer their expenses in the face of softening
demand for their commodities.
The company removed as much of this backlog as possible
in 2010. This levelled the revenue in 2009 and gave the company
substantial backlog support in 2010. In addition to this, strong
aftermarket activity, particular in the spare parts, allowed
Bucyrus to increase the revenue as the year progressed. The
company’s continued parts initiatives in the underground
segment has also proved effective. Thus, the revenues exceed
2008 level by 6 percent and the margins improved.
Apart from the strong market strategy, the company
acquired Terex Mining of Terex Cooperation on February 19,
2010. The acquisition has made Bucyrus the premier supplier of
mining equipment. This has allowed the company to diversify
the product basket across a broader range of commodities and
double the potential market to approximately $30 billion.
This would help the company to benefit from the strong
presence of Terex Mining in the Asia Pacific region. In addition
to this, Terex Mining has a strong presence in China, whereas
Bucyrus has absolutely no market share on a standalone basis.
With this acquisition, the company’s installed base moved up
to $40 billion from $30 billion. The size of the installed base
of surface and underground mining original equipment at
December 31, 2009 was around $20 billion, which increased
to approximately $30 billion with Terex acquisition, and $10
billion respectively.
The company’s product lines include dragline, electric
mining shovels, rotary blasthole drills, longwall systems,
room and pillar machinery and belt systems. The company’s
aftermarket services include replacement parts, maintenance,
technical advice, structural and mechanical engineering,
repairs, rebuilds, refurbishments and upgrades.
1%
3%
10%
8%
2009 Total sales by product
12%
2009 Total sales by Region
7%
4%
38%
51%
49%
18%
Aftermarket
Source: Bucyrus & Insights Research
Machines
North America Europe, Russia, India South America Australia/Asia Pacific China Africa
Source: Bucyrus & Insights Research
21%
COAL INSIGHTS 20 October 2010

coal market fundamentals
Steady demand pushes up thermal coal
Arnab Mallick
The global thermal coal market is back on fire once again
with benchmark price showing significant rise over
last few weeks, primarily on back of robust demand.
Coal shipments from Australia’s Newcastle port has been
witnessing steady w-o-w growth over the last few weeks.
There has been continuing steady demand from China and
India. At the same time, demand has picked up significantly
in other Asian markets as well, including Japan. It has been
learnt that Japan’s power generation by its 10 main utilities
have gone up significantly, as heat wave continues thereby
supporting air conditioning demand. Although most of the
power generation is fuelled by crude oil, it has also resulted in
significant rise in thermal coal consumption as well.
Much of the improvement seen over the past few weeks
can be attributed to the growing demand for thermal coal from
both India and China. Besides, buying interest from China for
the fourth-quarter was also increasing, ahead of the winter
months. But though the utilities are planning to increase stocks
for winter, they are in no hurry as current stocks are still high.
According to the globalCOAL NEWC index, the benchmark
price index for the Asian market, thermal coal prices improved
to $99.03 per ton for the week ended October 22 as compared
to $94.89 per ton for the week ended September 24.
The price appreciation has been even sharper in the South
African market, thanks to fundamental improvement in
market sentiment. According to globalCOAL RB index for
South African coal, price of thermal coal improved to $93.96
per ton for the week ended October 22, as compared to $84.14
per ton for the week ended September 24.
The rising demand sentiment has been quite evident from
the steady export figures from the Nescastle port. As per latest
data, coal exports at Australia's Newcastle port, the world's
largest coal export terminal, rose 27 percent in the week ended
October 18 as compared to its previous week. According to
data available with port authority, total exports from the port,
which ships mostly thermal coal used in power plants, were
2.4 million tons (mt) in the week to October 18, climbing from
1.9 mt the previous week.
110
105
100
95
90
globalCOAL NEWC Index
85
15- 29- 12- 26- 12- 26- 9- 23- 7- 21- 4- 18- 2- 16- 30- 13- 27- 10- 24- 8- 22-
Jan Jan Feb Feb Mar Mar Apr Apr May May Jun Jun Jul Jul Jul Aug Aug Sep Sep Oct Oct
globalCOAL RB Index
98
96
94
92
90
88
86
84
82
80
15- 29- 12- 26- 12- 26- 9- 23- 7- 21- 4- 18- 2- 16- 30- 13- 27- 10- 24- 8- 22-
Jan Jan Feb Feb Mar Mar Apr Apr May May Jun Jun Jul Jul Jul Aug Aug Sep Sep Oct Oct
Week ended
Meanwhile, the vessel queue at the port fell slightly to 12
ships from 13, but the average waiting time for vessels at the
port increased slightly to 13.92 days from previous week’s
comparable level of 13.78 days. It is worth noting at this juncture
that a similar price trend has also been observed in Indonesia, the
latest exporter of thermal coal after Australia. As per available
information, the reference price for coal sales in Indonesia has
also climbed in October for the first time since June.
As per market sources, the price of coal with a gross energy
value of 6322 kilocalories a kg gained 3 percent to $92.68 per
ton this month compared with September when reference price
was $90.05 per ton. Sources said that the Directorate General
of Coal, Minerals and Geothermal at the energy ministry has
made a similar statement. Brands including Gunung Bayan
1 has been commanding highest price of around $99.79 per
ton as compared to previous month’s level of $96.94 per ton
followed by Prima Coal and Pinang 6150 at $97.55 per ton and
$87.92 per ton respectively.
In the meantime, it has also been learnt that prices are being
settled for contracts between Australian shippers and Japanese
utilities for the year from October. Prices are being set at $97 to $98
per ton, the same as the larger volume contracts which took effect
from April 2010. Media reports quoting a Citibank report noted
that domestic prices in China are more stable, however, were at
around $112 per ton for 6000 kilocalorie fob Qinhuangdao and
the arbitrage has closed as a consequence at the end of September.
China's imports for August were a robust 13.3 mt.
Citi Group said that: “Our already positive view on the
thermal coal market was reaffirmed by our recent work on
the true competitive position of Australian exports vs China’s
production. We expect the price to average $100 per ton
in 2011, and our long term price is $90 per ton.” However,
demand for thermal coal from India is likely to rise further
in the coming days as the country would have to meet its
own commercial and industrial demand. The country’s coal
imports have been growing rapidly over the past few years
and if its power production targets are to be met, then it would
have to continue to do so even this year.
COAL INSIGHTS 22 October 2010

coal market fundamentals
Coking coal contract price drops for Q3
Arnab Mallick
Contract negotiations for various categories of coking
coal were finally completed among leading miners and
steel makers. It was felt during the end of September
that negotiations for the third quarter had been partially
settled with BF steel producers. As per available information,
a number of BF steel producers fixed the semi-soft coking coal
prices loaded at Newcastle with several Australian suppliers
at $138 per ton fob to $140 per ton fob for the third quarter.
Since the price in the second quarter was set at $172 per ton
fob, the prices for the third quarter have been reduced by $32
to $34 (18.6 to 19.8 percent) from the previous quarter.
At this stage, however, negotiations with the two largest
suppliers of semi-soft coking coal loaded at Newcastle,
Xstrata and Rio Tinto had not yet been settled. In contrast, the
negotiations with the two largest suppliers of semi-soft coking
coal, Xstrata and Rio Tinto, took longer and the agreement on
semi-soft coking coal exported by these suppliers could not be
reached within September. That was because both suppliers
strongly opposed the large price reduction.
However, it finally got settled in the middle of October. Rio
Tinto Coal has settled semi-soft coking coal prices for October-
December at $143 per ton fob with its Japanese customers, a
drop of almost 17 percent from the $172 per ton achieved in
the third quarter, said informed sources. The price won by
Rio betters the $138-140 per ton fob Newcastle port that was
achieved by smaller semi-soft coking coal producers in NSW’s
Hunter Valley at the end of September.
On October 1, Wesfarmers Ltd of Australia announced
that its contract prices of metallurgical coals (hard coking coal,
semi-hard coking coal and PCI coal) produced at Curragh
coal mine under its own operation fell by an average 11
percent for the contract period between October-December
2010 as compared with those for the previous quarter (July-
September). Out of that the contract price of Curragh hard
coking coal during October-December remained $205 per ton
fob, down $20 (8.9 percent) from the previous quarter.
It is to be noted here that hard coking coal negotiations
between the BF steel producers and BHP Billiton Mitsubishi
Alliance (BMA) ended in agreement on August 30. The prices
of main brands of hard coking coal exported by BMA in the
third quarter became $209 per ton fob each for Peak Downs
and Saraji coal, $205 per ton fob each for Goonyella coal and
Riverside coal, $195 per ton fob for Norwich Park coal and $190
per ton fob for Gregory coal with price reduction of $16 to $20
COAL INSIGHTS 23 October 2010

coal market fundamentals
for every brand from the second quarter (July-September). At
the same time at the end of August, low volatile (LV) PCI coal
of Russian origin was set at $130 per ton fob with the reduction
of $40 (22.5 percent) from the previous quarter. Furthermore
from end August through early September, the prices of LV
PCI coal produced in Queensland Australia have been settled
one after another. LV PCI coal for the third quarter became
$147 per ton to $150 per ton fob, down $30 to $33 (16.7 percent
to 18.3 percent) from the previous quarter.
The price negotiations with the blast furnace steel
producers on Hongay anthracite of Vietnamese origin for the
third quarter of the fiscal year 2010 (October-December) was
also heard to have been completed. The contract price for the
third quarter of Hongay No.6 coal for PCI operation was set at
$150 or so, while that of the Hongay No.8 coal for sintering at
$143 per ton fob or so with price reductions of $30 plus (about
17 percent) for No.6 coal and $27 plus (about 16 percent) from
the first half of the fiscal year 2010 (April-September).
Meanwhile, as the quarterly contract prices are getting
settled, weakness is seen in certain crucial markets including
China. Market sources revealed that domestic coking coal
prices in China’s Shanxi province have become depressed
due to weak demand. Many feel that relatively high priced
coking coal price have impacted demand from coke makers.
Coke market lukewarm
The global coke market, which is clearly dominated by
China, has remained rather uneventful. As per available
information, domestic coke prices in China’s Shanxi
province have remained more-or-less stable over the past
month, despite weak demand from steel mills. Market
sources informed that first grade coke in Shanxi province
was selling for RMB 1800 to 1850 per ton ($270-277 per
ton) on October 11 including 17 percent VAT, the same
price as on September 17.
Prices of second grade coke from the province were
around RMB 1700 per ton ($255 per ton) including 17
percent VAT, up slightly by RMB 20-50 per ton ($3-8 per
ton) compared with 1,650-1,680 per ton on September 17.
Overall, the market has been impacted by the relatively
weak demand situation.
Things were no different back home during the first
half of October. During the first week of the month, coke
price hovered between $370 and $390 per ton depending
on requirement, which is almost the same or slightly on
the lower side compared to the rates prevailing around
a fortnight ago. At that time, Chinese coke was available
in India at around $400 per ton fob. Vietnamese coke was
also available at around the same rate ($400 per ton).
However, things have been improving of late. During
early second half of the month, coke (with ash content
12.5 percent) was selling at a minimum price of `20,500
per ton.
Sources informed that around October 19, prevailing price
of hard coking coal in northern China’s Shanxi province was
around RMB 1450 to 1500 per ton ($218-226 per ton) including
17 percent VAT, down by RMB 50 per ton ($8 per ton) from
RMB 1500 per ton on September 20.
As far as supply is concerned, it has been learnt that
Xstrata Coal saw its production of coking coal decline 5
percent in the third quarter 2010 from the same period a year
ago to 1.9 million tons (mt). Production of semi-soft coking
coal (Australia) was also lower in Q3 2010 to 1.5 mt from 1.7
mt in Q3 2009. Average received prices for coking coal were
however much higher than the previous year at $230.40 per
ton in Q3 2010 compared to $150.90 per ton in Q3 2009. Semisoft
prices were also much higher in Q3 2010 at $149 per ton
from $83.30 per ton in Q3 2009.
Russian raw materials producer Evraz also saw its
production drop. Evraz’s coking coal production fell 20.8
percent to 1524 mt in Q3 2010 from 1923 mt in Q3 2009. This
lower figure was the result of an explosion at the Raspadskaya
mine on May 9.
However, things may get tougher in the spot market on
back of supply problem from Queensland. Heavy rains in
central Queensland have caused coking coal spot prices
to jump $10 per ton and major producers to declare force
majeure on coal exports during middle of October. As a result,
Wesfarmers has reduced its 2010-11 coking coal production
guidance by around 3,00,000 tons to 6.2 to 6.7 mt because of
bad weather. Anglo American Metallurgical Coal said it was
unable to confirm that it issued a force majeure notice because
of disruptions to its Capcoal German Creek and Foxleigh
mines in Queensland. Although the impact on supply is yet to
be fully understood, it is hoped that supply would get normal
shortly. Heavy rains have also affected coking coal production
in Indonesia.
However, long term expectation remains intact. Many
analysts feel that the coking coal market is for continued
supply tightness until 2013. The proportion of coking coal that
China imports is likely to grow until 2013 as it will be unable
to meet its own additional demand for coking coal over the
period, even based on a “relatively pessimistic” forecast of
slowing steel production over the next few years.
Speaking at a recently held Dry Bulk Shipping Market
Outlook Conference, director of commodities research at
Deutsche Bank, Daniel Brebner, said that China’s attempts to
increase its domestic coking coal production, as well as imports
from neighbouring Mongolia, will suffer from infrastructure
constraints. The construction of an additional railroad to carry
coking coal and thermal coal from Inner Mongolia and Shanxi
to the northern port of Qinhuangdao will increase capacity
when it is completed in 2012, Brebner notes. However, he
believes that bottlenecks will not be eliminated.
Demand from Brazil and India, which are nearly wholly
dependent on imports of coking coal, will continue to rise over
the period, placing upward pressure on prices. On the supply
side, the major coking coal producers are unlikely to in1crease
production significantly over the next two years.
COAL INSIGHTS 24 October 2010

Feature
Competitive bidding:
Will it improve the situation
Coal Insights Bureau
The ministry of coal recently cleared all hurdles in the
way of introduction of the system of allocation of captive
coal blocks through competitive bidding route. The
main argument behind the introduction of this new system
is to speed up the process of development of such blocks by
selecting serious players or consumers.
The new system is likely to be introduced within next six
months and the notification seeking application for allotment
of coal blocks through this new system of competitive
bidding route, is likely to come sometime towards end of
current financial year 2010-11 and the first allotment might
be made anytime around first or second quarter of next
financial year.
However, certain doubts are being raised on whether this
new system will at all help the government realise its goal of
increasing the country’s coal production through captive coal
block route.
Till now, the allocation of coal blocks to private parties is
being done through the mechanism of an Inter-Ministerial and
Inter-Governmental body called the Screening Committee. The
Screening Committee is chaired by the Secretary (Coal) and
comprises representatives from the Ministry of Steel, Ministry
of Power, Ministry of Industry and Commerce, Ministry of
Environment and Forests, Ministry of Railways, Coal India
Ltd (CIL), Central Mine Planning and Design Institute Ltd
(CMPDIL) and the concerned state governments.
This committee evaluates the applications received from
various entities and then allots a single block to a single entity
or multiple entities depending upon their requirement as well
as various other parameters.
As per the Coal Ministry’s Annual Report of 2009-10, a
total of 229 coal blocks (148 existing and 81 newly identified)
had been identified for allocation to specified end users and
government companies. There are 25 remaining coal blocks
with geological reserves of about 7262.66 million tons (mt)
from the old list that is yet to be allotted.
COAL INSIGHTS 25 October 2010

Feature
Allocattees pulled up for
inordinate delay
Peeved at the dismal progress, the coal ministry has
pulled up existing coal block allocattees, both public
and private, for delay in the development of captive
blocks. Only last month, the ministry declared it has
identified as many as 93 coal blocks where almost all the
requisite milestones are pending. Of these, 45 belong
to government sector companies and the rest 48 to the
private sector.
The list of these ‘laggards’ include large companies
including NTPC, ArcelorMittal, Bhushan Steel, Monnet
Ispat, Hindalco, Usha Martin and GVK Power, among
others. Since September to date, the ministry has issued
show cause notices to at least 31 block allocattees. Four
blocks were even deallocated during the April to June
period.
“We want to enhance coal production of the country.
For this, we can snatch the coal blocks back,” coal
minister, Sriprakash Jaiswal, has said.
Recently, the coal ministry asked all captive block
allocatees and joint venture companies (JVCs) to submit
information about the status of captive blocks and
associated end-use projects, to the Office of the Coal
Controller and the ministry by October 15. This was part
of the quarterly review exercise conducted by the ministry
to examine the progress made in the development of
such blocks.
In the last review meeting held between July 20 and
July 21, 2010, it was decided that all the JVCs will collect
the status reports of coal blocks and their associated enduse
projects of individual block allocatees and submit the
same to the Office of the Coal Controller at the end of
every quarter.
It means these 25 coal blocks would now be allotted
through bidding route.
The system of allotment of captive coal blocks to private
and government companies was introduced way back in 1993
and since then, 215 such blocks with estimated geological
reserves of about 50 billion tons have been allotted to about
310 public and private sector companies in power, steel,
sponge iron, cement and fertiliser sectors.
However, of the total blocks allocated so far, around
8 blocks have been cancelled by the coal ministry as the
entities to whom these blocks were allotted had violated
various terms and conditions of the allotment. Out of the total
blocks allotted, around 100 coal blocks have been allotted to
government companies with geological reserves of about 27
billion tons and about 105 coal blocks have been allocated to
private companies with geological reserves of about 18 billion
tons. A number of blocks have also been allocated to Ultra-
Mega Power Plants (UMPPS)
At the beginning of the current Eleventh Plan or towards
the end of the Tenth Plan (2006-07), it was envisaged that
coal production from captive coal blocks would be increased
substantially to around 117 million tons per annum (mtpa)
from 2011-12 (terminal year of XIth Plan).
Incidentally, production from captive coal blocks was to
account for around 15 percent of the country’s coal requirement
of around 731 mt that was earlier envisaged in 2011-12 (now
reduced to 713 mt).
However, it has been found that out of the total blocks
allotted so far, only 26 have reached production stage and
together they are producing around 30 mt of coal annually.
The provisional production from 25 operational captive coal
blocks was around 34 mt in 2009-10.
The production in 2008-09 stood at 30.02 mt. and the
production from existing and upcoming captive coal blocks
in the terminal year of the Eleventh Plan is estimated to
be around 80.89 mt as per the mid-term appraisal held in
September 2009.
It is estimated that only about 5 more blocks would reach
production stage by March 2011 and the rest of the blocks are
far away from reaching that stage.
In such a situation, the initial target of achieving production
to the tune of around 117 mt coal from captive coal blocks in
2011-12 seems impossible.
According to an estimate of Coal Insights, the production
from captive coal blocks at best could reach 70 mt by 2011-12
even though the mid-term appraisal had put the figure at 80.89
mt. Anything beyond 75 mt looks impossible at the moment.
Reasons for delay in starting production from captive coal
blocks
It has been found out that there are primarily six to
seven reasons for delays in starting production from not
only captive coal blocks, but also from blocks in possession
of Coal India Ltd (CIL) and Singareni Collieries Company
Ltd (SCCL).
The first and foremost reason is the huge delay in
acquisition of land and associated problems of rehabilitation.
The second relates to delay in diversion of forest land and the
third pertains to delay due to non-approving or permitting
exploration in forest area.
The fourth reason comprises delay due to adverse geomining
condition and the fifth is delay due to fire. The sixth
important reason for delay in starting new projects is due to
the law and order situation.
Additionally, there are other miscellaneous problems
such as delay or discontinuance of work by contractor, non
participation in tender, DGMS permission, and so on.
It would be noteworthy to find whether this new system of
COAL INSIGHTS 26 October 2010

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allotment of captive coal blocks through competitive bidding
will help increase coal production from such blocks because
there is nothing in the new bill that will address the six to
seven issues that are affecting starting of production from
new and captive coal blocks, as mentioned above and even
acknowledged by the coal ministry.
The whole argument for introducing the system of
competitive bidding for allocation of coal blocks, as per Coal
Ministry, is to introduce a transparent system for allocation of
these blocks.
It was also argued that this new system of coal block
allocation will only invite interest from serious players and
they will try their best to start production at the earliest,
unlike previous occasions, when a number of non-serious
players were alloted blocks, but did very little to commence
production.
It was also argued that the number of applicants for each
captive coal block is increasing as the demand for coal keeps
increasing and selection of one application out of number of
eligible applicants was becoming difficult.
“Therefore, there was a need for evolving an objective and
transparent system for allocation of coal blocks,” Coal Minister
Sriprakash Jaiswal had said.
This is borne out by the fact that when about 38 coal blocks
were offered for captive use in 2006, 1422 applications were
received by the ministry. This has made the selection process
very difficult and vulnerable to criticism on the ground of lack
of transparency and objectivity.
“Therefore, there is an urgent need to bring in a process
of selection that is not only objective but also transparent.
Auctioning through competitive bidding is a time-tested and
globally accepted mechanism for such purposes,” the minister
claimed.
Towards this end, the government had moved an
amendment in Mines and Minerals (Development and
Regulation) or MMDR Act, 1957, in order to introduce
auction through competitive bidding as a selection process
for allocation of coal blocks for captive mining for specified
uses.
The proposal for auction of coal blocks through competitive
bidding by amending the Mines and Minerals (Development
and Regulation) Act, 1957 was introduced in the Rajya
Sabha during November 2008, which was further referred
to the Standing Committee on Coal and Steel for detailed
examination.
Oral evidence was given before the Standing Committee
on February 17, 2009 and the committee tabled its report to
the Parliament on February 19, 2009 with the recommendation
to have further consultations with the state governments and
stakeholders.
Consequent to this, a meeting was held on August 10,
2009 by the minister of state for coal with the coal/lignite
COAL INSIGHTS 27 October 2010

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States may benefit from competitive
bidding system
Coal Insights Bureau
In an attempt to lure the states so that they do not raise
any objections to the proposed move for allotment of
captive coal blocks through auction route, a provision
is believed to have been made in the MMDR Act under
which preference will be given to a company that proposes
to set up the end-use industry within the state in which the
coal block is located.
The provision, if at all incorporated, will benefit states
such as Orissa, Jharkhand, Chhattisgarh, Madhya Pradesh
and West Bengal, where 80 percent of the coal reserves are
located, industry experts told Coal Insights.
Incidentally, Coal Minister Sriprakash Jaiswal had
indicated that preference would be given if a bid is within
5 percent of the highest bid and the company is willing to
match the highest bid for that block.
“We need to recognise that captive coal mining
involves investment in the linked end use projects as well.
This calls for significantly large capital investment. The
relatively bigger players would be able to mobilise the
requisite capital resources of this dimension. Therefore, it
makes good economic sense to encourage the participation
of major players in this venture so that the coal blocks
and their associated end use projects get developed
expeditiously and the country stands to derive the benefits
from its rich resource wealth,” Jaiswal had earlier said.
This would adequately protect and promote the
interest of the states where coal is located, Jaiswal said,
but stressed that coal, being a precious national resource,
should be used in the larger interest of the whole country.
While proposing to incorporate the above provision,
the minister said that the proposed system of allotment of
captive coal and lignite blocks through auction route would
be framed in such a way that it brings in transparency and
fairness in the system.
“That the government is saying that the new system
would bring in transparency and fairness in itself explains
that the earlier system of allocation of blocks through
screening committee route was not so,” an official of a
sponge iron manufacturing company had earlier told Coal
Insights.
Coal Ministry officials said the system of competitive
bidding shall be adopted only for the blocks to be allocated
for captive use. The allocation to government companies
under the government company dispensation or to power
projects awarded through the tariff-based bidding process
would not fall under the purview of the new system of
competitive bidding.
They further clarified that there would not be any
dilution in the role of the state governments once the
auction system is adopted for allocation of coal blocks.
“Even now, allocation of coal blocks is made by
the Central Government and for grant of prospecting
licence and mining lease, prior approval of the Central
Government is a prerequisite. Therefore, the introduction
of auction system for allocation of coal blocks is not likely
to alter this position in any form,” the official said.
"When they get the coal blocks through auction, they
would have a more direct stake in terms of premium they
would have to pay by way of bid amount, and this, in
turn, would motivate them to develop the blocks more
expeditiously. This would generate tremendous economic
activity, which would give a big boost to the economies of
those states," Jaiswal said.
In this connection, he pointed out that in respect of
certain minor minerals, some of the state governments
have already adopted the auction system, with very good
results. "We hope to derive similar benefits from this
process," he added.
He said the receipts generated by the auction would
accrue to the state government concerned and they would
be able to utilise the revenue so generated for undertaking
developmental work in the coal producing areas.
bearing states. Most of the states had supported the proposal.
Based on the outcome of the meeting, a draft cabinet note
was sent to the ministry of mines for placing it before the
cabinet, seeking approval for passage of the said bill in the
Parliament. After the cabinet approval, the bill was passed in
the Rajya Sabha on August 17, 2010 and then in the Lok Sabha
within the next five days.
Now the bill is awaiting approval by the President after
which it will become a law and will also pave the way for
introduction of competitive bidding route for allotment of
captive coal blocks.
Despite all arguments and counter arguments, it will be
interesting to see whether the production from captive coal
blocks increases as per the expectations of the government.
COAL INSIGHTS 28 October 2010

Feature
Coal ministry puts illegal mining
onus on state govts
Coal Insights Bureau
At a time when the Maoist threat is looming over the
mining tracts on the Red Corridor, the Coal Ministry
has seemingly washed its hands off by putting the
blame on state governments and their lacklustre police
machinery. In no unclear terms, coal minister Sriprakash
Jaiswal has said that his ministry should better be left with
policies (for instance, proposals of mining regulators and
special courts) and not be drawn into policing mines.
The states, on the other hand, are looking up to the Central
Bureau of Investigation (CBI) and central back-up for taking
any concrete steps. Caught in between, the industry fears this
social menace may actually accentuate as demand for coal in
India outstrips supply in coming years.
The coal minister, in a recent interaction with the industry,
has termed illegal mining as a “law and order problem” that
must be dealt with by the state authorities.
“Law and order is a state subject. Coal ministry does
not have any infrastructure to curb illegal mining. We don’t
have police and district administration authorities to guard
thousands of kilometres of mining areas,” Jaiswal said, adding
“If the state governments do not take adequate measures by
using its police machinery and administration, this problem
cannot be mitigated.”
Citing the instance of Maharashtra, where the law and
order situation is generally good, he said the problem of illegal
mining is pretty less. “It (illegal mining) is most rampant in
West Bengal and Jharkhand and has to be handled by the
states themselves.”
This declaration has put the onus on the state
governments, who, on their part, have remained largely
silent on the issue for long. Illegal mining provides the
livelihood for a large number of people in these states. In
Jharkhand, the largest coal producing state in the country,
an estimated 7,20,000 tons of coal is smuggled every year.
While most of it is controlled by coal mafias, poor villagers
in dozens of villages across Deogarh district are also
engaged in extracting coal from shallow village-dug coal
COAL INSIGHTS 29 October 2010

Feature
record-breaking initial public
offering (IPO). The issue was
even thought of creating a
hurdle in garnering valuations
from its IPO.
The industry believes the rise
in illegal mining goes hand in
hand with the growing demand
for coal and supply shortfall in
the country. This trend is likely
to sustain and thus increase
demand in the black market.
pits, abandoned mines and dumps of legally mined coal.
This coal is supplied to individual houses, shops and local
brickfields, among others. Sometimes, these people fall
pray to mining accidents. Reportedly, over 350 people have
lost their lives in the state in the context of illegal mining in
the last 15 years.
Commenting on this matter, Jaiswal said “Since this is a
social issue involving the livelihood of a number of persons,
the state governments concerned should seriously address
the issue for an alternative solution for engaging the affected
persons.”
Recent spurt in illegal mining
According to official data, 1,82,000 cases of illegal mining were
registered across 17 states in the past five years.
Coal India Ltd (CIL), which accounts for 82 percent of
domestic coal production, operates 471 mines in 21 coalfields
across eight states in India — Chhattisgarh, West Bengal,
Jharkhand, Maharashtra, Madhya Pradesh, Orissa, Assam and
Uttar Pradesh. Except Assam and Uttar Pradesh, for which
data is not available, the other six states reported 65,200 cases
of illegal mining in the past five years. Even in a relatively
trouble-free state like Maharashtra, the number of reported
illegal mining cases has gone up from 4919 in 2006 to 10,368
in 2010.
CIL has been a major victim of illegal mining. The issue
came up to haunt the world’s largest coal producer before its
Karnataka shows the way
The defensive stance taken by
the coal minister may not be
entirely unjustified though it
clearly signals escapism. It is the
states that earn Rs 4500 crore in
royalty charges from the coal
miners every year. Besides, there
have often been allegations over
a nexus between the coal mafia,
police and political honchos.
Recently, a media photo of a coal
mafia sharing the dais with the
chief minister of West Bengal,
Buddhadeb Bhattacharjee, has brought ignominy to the local
political leadership.
Amid such gross negligence of the issue, the pro-active
stance taken by the Karnataka judiciary and the government
to control illegal iron ore mining in the southern state may
just show the way. Under pressure from the High Court, the
government has raided iron ore stockyards at various places
in Bellary. It has also seized 3087 tons of illegal iron ore on
the Bellary-Anantapur road and 30,790 tons of ore in Hospet,
Bellary.
The Karnataka government, which had earlier been
reprieved by the court for its lackadaisical attitude, now wants
to recast the rules (framed in 2008 but not implemented till
date) to give mining authorities powers on the lines of police
to seize, raid, inspect and punish people suspected to be
involved in illegal mining.
Earlier, the Andhra Pradesh government had asked
the Centre to order a CBI probe into illegal mining in the
state. This included the activities of Obulapuram Mining
Company (OMC) promoted by Karnataka Tourism Minister
G. Janardhana Reddy.
The major coal mining states like Jharkhand and West
Bengal should follow in the footsteps of these southern
states and take immediate measures so that the problem
is contained before it reaches huge proportions like the
Maoist threats.
COAL INSIGHTS 30 October 2010

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Coke shortage may hamper steel growth
Coal Insights Bureau
India is currently the fifth largest producer of steel and
the way it is growing, the time is not too far away when
it will be counted as the second largest producer of this
important material, next only to China. However, unlike
China, India is not comfortably placed as far as availability
of low ash metallurgical (LAM) coke is concerned because of
limited availability of coking coal in the country.
India’s per capital steel consumption was 26.8 kg in 2001
and is likely to rise to 55.2 kg in 2010. In comparison, per capita
steel consumption of Germany is 464.4 kg, US 353.9 kg, China
307.3 kg, Brazil 114.6 kg, while the world average is 194.2 kg.
India’s per capita steel consumption is steadily growing as
the construction and infrastructure sectors are booming and
its use in infrastructure, railways, transport and other sectors
is growing immensely. India is slated to become the second
largest steel producer in the world by 2015-16 based on current
rate of growth of ongoing greenfield and brownfield projects.
All circumstances suggest that India will face an acute
shortage of coking coal going forward as for every 1 ton of
steel produced in the blast furnace route requires about 1.2
tons of coking coal. For the additional 150 million tons (mt)
of steel that India plans to produce by 2020, at least 120 mt
of additional coal will need to be imported, assuming that 80
percent of the new capacity will come through the BF/BoF
route. India has the fourth largest proven reserve of coal, but
Indian coal is of poor quality with high ash content. Nearly
84 percent of the Indian coal reserve is of non-coking variety
and nearly 63 percent of coal imported in 2009 accounted for
coking coal. Coking coal imports in 2009 from Australia stood
at around 27 million tons compared with 24.7 mt in 2008, 21.6
mt in 2007 and about 18 mt in 2006.
India’s coal reserve is estimated at around 287 billion tons,
but of this only around 35 billion tons is coking coal. Of the
total production of around 532 million tons of coal in Indian in
2009-10, only around 18 million tons was coking coal while the
rest all was thermal coal used for power generation.
At present, India’s coking coal imports is around 24-27
million tons annually from countries like Australia, the US,
New Zealand, South Africa and Indonesia. On the other hand,
the country’s coke production is somewhere in the region of
22-24 mt and it is importing around 2 to 4 mt of coke annually.
India’s steel production capacity in 2009-10 was estimated
at around 72 mt compared with around 56.41 mt in 2008-09 and
43.50 mt in 2004-05. This is much lower than 501 mt of China
in 2008, 119 mt of Japan, 91 mt of the US and 69 mt of Russia.
The country’s actual steel production of various types of
COAL INSIGHTS 31 October 2010

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steel was estimated at around 66 mt in 2009-10. Coke is the
crucial raw material for production of steel through the blast
furnace route. At present the country is producing around
22-26 mt of coke and importing another around 2.5 mt from
countries like Colombia, Russia, and China.
It is envisaged that India’s steel production will go up to
around 110 million tons per annum (mtpa) by 2011-12 and
further to around 200 mtpa by 2020. To achieve this production
of steel, the country will need huge amount of coking coal to
make coke that can be charged in blast furnaces.
Going by this assumption, as per a conservative estimate
the country will need around 100 mt of coking coal and around
70 mt of LAM coke by 2011-12 and around 150 mt of coking
coal and around 120 mt of coke by 2020.
From the facts available, it is clear that the country will
depend immensely on imported coking coal as well as LAM
coke to produce the planned quantity of steel.
The current global situation indicates that the country’s
planned steel production capacities might face severe
challenges largely due to non-availability of coking coal
as well as coke. Rumours are also rife in certain quarters
that India may not achieve the planned steel production
capacities due to limited availability of coking coal in the
world market.
Global situation
Global metallurgical coke production currently hovers around
500 million tons (mt) per year, 90 percent of which is used in
the steel industry. A significant proportion of this global trade
All about met coke
Coal Insights Bureau
Metallurgical coke, also known as “Met” coke,
is a carbon material manufactured by the
“destructive distillation” of various blends
of bituminous coal (coking coal or metallurgical coal).
Bituminous coal is a soft, medium grade coal that contains
a high percentage of volatile components.
Destructive distillation is performed in “coke
batteries” which are banks of large enclosed kilns. Once
the kilns are loaded, they are heated to approximately
1000 degree Celcius in the absence of air.
During the heat cycle the volatile components of
the coal are released and the solid coal goes through a
partial melt and subsequent re-solidification to a nonmelting
carbon. Volatile components include coal tar,
ammonia, and literally dozens of other “products of
decomposition”. Most volatile components are reclaimed
or recycled. The final solid is a non-melting carbon called
metallurgical coke. As a result of the loss of volatile gases
and of partial melting, Met coke has an open, porous
morphology and may appear glassy in some specimens.
As a result of the heat treatment process Met coke
has a very low volatile content. However, the “ash”
constituents, that were part of the original bituminous
coal feedstock, remain encapsulated in the resultant coke.
Met coke feedstocks are available in a wide range of sizes
from fine powder to basketball-sized lumps. Typical
purities range from 88 to 92 percent fixed carbon.
Commercial grades are available in sizes from
30-micrometer powders up to 20 cm lumps. Metallurgical
coke is used where a high quality, tough, resilient,
wearing carbon is required. Applications include but
are not limited to conductive flooring, friction materials,
foundry coatings, foundry carbon raiser, corrosion
materials, drilling applications, reducing agents, heattreatment,
ceramic packing media, electrolytic processes,
and oxygen exclusion.
Coke is made by destructive distillation of a blend
of selected bituminous coals (called Coking coal or
Metallurgical coal) in special high temperature ovens in
the absence of oxygen until a greater part of the volatile
matter is driven off. The resulting product, Coke, consists
principally of Carbon.
Traditionally, chemistry, size & strength (both cold
as well as hot) have been considered the most important
properties for use in the blast furnace. The quality of the
constituent coals determines the characteristics of the
resultant coke.
Coke is primarily used to smelt iron ore and other
bearing materials in blast furnaces, acting both as a source
of heat and as a chemical reducing agent to produce pig
iron or hot metal. Coke, iron ore and limestone are fed into
blast furnace, which runs continuously. Hot air blown
into the furnace burns the coke, which serves as source of
heat and as an oxygen reducing agent to produce metallic
iron. Limestone acts as a flux and also combines with
impurities to form slag. Coke also serves as a structural
material to support the deep bed of coke/iron oxide/
limestone that makes up much of the furnace volume.
It is in this last role that its properties are crucial. It
is important that it does not degrade (e.g. break up into
small particles) during its descent through the oxidizing
hot gases passing through the stock region of the furnace.
To produce high quality blast furnace coke, high
quality coal must be used. High quality coals are those
coals that when coked together produce the highest
stability and CSR (Coke Strength after Reactivity) to
support the blast furnace burden and allow maximum
production.
COAL INSIGHTS 32 October 2010

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How coke making evolved
Though extraction of coal happened in India for a long
time, production of coke was only developed in the last
century. The technology development has come a long
way, from the initial basic bee-hive oven to the various
present day design which create minimum pollution.
The major technical development in this had
happened during the fifties when designs were brought
in from USSR, UK and Germany to make integrated
coke plants with steel plants in India. Though those
were primarily Recovery type ovens, but in the last 30
years indigenous technologies came up both for both
recovery and non-recovery variants.
has until recently comprised the European and the US, as
well as Indian and Brazilian, imports of China's raw material
exports.
But a sharp reduction in China's export output, as it
conserves supplies for its domestic steel industry, has
altered the global balance and will have a significant impact
worldwide. Globally, the coke market is controlled by China
due to the fact that China is the largest steel producer, coke
producer, coke consumer and coke exporter in the world,
and therefore Chinese prices are considered a benchmark for
world coke prices.
However, in recent times, China has turned into a net
importer of coke. China’s contribution to seaborne trade of
coke has dropped drastically over the last two years. In 2008,
China accounted for about 60 percent of global coke exports,
and today it has become a net importer.
This is creating a severe shortfall of the commodity in
the global market. Moreover, with blast furnaces world over
restarting, the demand is set to increase further. These factors
would cause a steep increase in price of coke in the global
market.
China situation
China produces around 400 million tons (mt) of coke annually.
India is nowhere compared to China as far as steel making or
coke making facility is concerned.
China used to export around 15 to 16 mt coke annually, or
3 to 4 percent of its total production of coke, but since 2008 its
exports are down significantly and in 2009 it exported only
around 1 mt coke. It is to be noted that till 2007-08, China was
exporting around 15 to 16 mt coke, a majority or about 6 to 7
mt of which used to come to India.
But in recent times, there have been environmental issues
in China and the government there has given notices to the
industries which have batteries less than 4.5 metres tall.
So in the given situation, unless they are very badly
COAL INSIGHTS 33 October 2010

Feature
distressed, there is unlikely to be any increase in their coke
exports.
India’s coke requirement going forward
India’s coke making capacity has increased during the past five
to six years. The production capacity of merchant coke makers
has almost doubled between 2005-06 and 2009-10. But this is not
enough as India’s coke demand too is going up gradually and
in fact, the addition in coke making capacity was not matching
the increase in demand and that is a dangerous situation.
Even if India’s steel production capacity goes up from the
current level of 72 mt of crude steel to a very conservative
110 to 115 mt in the next five years’ time, there would be a
tremendous demand-supply gap, which has to be filled or
matched.
Most of the new steel plants in India which are in expansion
mode are coming up mostly in the blast furnace route. Even
Corex technology requires coke fines of 10 to 40 mm size. And
the availability of this is not going to be an easy thing.
As far as iron ore is concerned, fines can be used in sinter
plants, but availability of coking coal fines will still be a
problem. In Corex technology also, around 200 to 250 kg of
coke fines are required to produce 1 ton of steel and even that
quantity is not easily available, so things are likely to remain
tight going forward.
Not only will be the demand from steel industry for coke
be higher, there will be demand from ferro alloys industry as
well, as this industry too is doing well.
Installed capacity in India
The installed capacity of merchant coke makers in India is
around 7.5 million tons per annum (mtpa), but their actual
production had never touched more than 2.5 mtpa at any
given time because of the type and size of these merchant coke
plants.
The majority of merchant coke plants in India have a
capacity of around 2500 to 3000 tons per month. For them, it is
difficult to contract for a ship load of coking coal as that could
last as much as a year. That could lead to loss in quality and
thus it is an unfeasible practice.
The coke making capacity of integrated steel plants (ISPs)
in India is around 21 mtpa (SAIL – 12.1 mtpa, Tata Steel – 4.0
mtpa, Visa Steel – 0.4 mtpa, Bhushan Steel and Power – 0.4.
mtpa, JSPL – 0.8 mtpa, Others -3.6 mtpa)
Production in 2009-10 by merchant coke plants was around
2.0 mt and in 2009-10 it increased to 2.5 mtpa. For ISPs, the
consumption in 2009-10 was around 20.5 million tons (mt). Of
this, 18 mt was produced by the captive units and 2.5 mt by
the merchant coke plants.
How the deficit is met
India’s growing demand for coke is largely addressed through
imports. There is a shortage of coke production in India. In the
long term, India is expected to remain dependent on imports.
The coke industry will play a crucial role to help India
achieve its steel production target of 200 mt by 2020. Allocation
of more number captive coal blocks in Jharia region, where
soft and semi-soft grade coking coal is found, to steel makers
and coke makers, can be considered by the government.
Everything looks bright for Indian steel industry, including
demand prospect, but non-availability of coking coal might
become a major issue as the country depends a lot on overseas
suppliers.
India’s m-o-m cement
production falls in Aug
Coal Insights Bureau
India’s cement production by large plants stood at 15.82 million
tons (mt) in August, which was 2.28 percent lower than 16.19
mt produced in July, according to a compilation by Coal
Insights. The production in August was, however, 1.67 percent
higher than 15.56 mt produced in the corresponding month of
the previous year. With the fall in August production, India’s
cement production fell continuously for the third successive
month starting June, when production was at 17.22 mt.
“The cement plants of the country have been deliberately
producing less due to low demand and sharp decline in
prices,” an official of a cement company based out of Kolkata
said. Meanwhile, India’s cement production between April
and August by large plants, except ACC and Ambuja Cement,
stood at 69.00 mt, up 5.52 percent from 65.39 mt produced in
the corresponding period of the previous year.
Dispatches up marginally
Meanwhile, India’s cement dispatches by large plants, except
ACC and Ambuja Cement, stood at 12.82 mt in August, up
marginally from 12.34 mt produced in the corresponding
period of the previous year. The dispatches between April
and August this year stood at 68.54 mt compared with 64.76
mt last year.
Clinker production falls
India’s clinker production by large plants, except ACC and
Ambuja Cement, stood at 10.50 mt in August, which was
marginally lower than 11.12 mt produced in July.
The production in August this year was, however, 1.74
percent higher than 10.32 mt produced in the corresponding
month of the previous year. The production during the first
five months of 2010-11 stood at 55.82 mt compared with 52.03
mt produced in the corresponding period of 2009-10.
Exports
India’s export of cement and clinker increased marginally to
0.35 mt in August from 0.32 mt exported in the corresponding
period of the previous year.
COAL INSIGHTS 34 October 2010

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Cement makers to hike prices
Cement manufacturers are set to hike prices by around `20
per 50 kg bag from October 1 in Gujarat, while a similar hike
is being contemplated for Maharashtra, including the key
market of Mumbai, to cash in on the spurt in demand following
the monsoons, dealers and analysts said. Cement prices had
cracked to around `150 in August from its peak of `225 in mid-
May, owing to sluggish construction activity in the monsoons
and scarcity of sand. With the proposed hike, prices of the
commodity will be around `180 per 50 kg bag in Ahmedabad.
In Mumbai, the hike is being considered and may be
implemented in a different way by withdrawing a discount of
at least `10 per bag that is being offered to dealers. The southern
region, which witnessed two rounds of price hike in September,
despite low demand and overcapacity, is also set to witness
another round of price increase.
In Hyderabad, prices may be hiked by `30 per bag, pushing
cement prices to around `240, while in Chennai prices may
be hiked by as much as `40 per bag. However, dealers in the
central and northern regions have not been intimated about
any hike in these regions as yet. However, cement companies
may announce some hikes in these regions depending on the
response to the hikes in southern and western India.
The export of cement during the month stood
at 0.15 mt compared with 0.13 mt in August 2009,
while that of clinker stood at 0.20 mt compared with
0.19 mt in last year.
The export of cement and clinker between April
and August this year stood at 1.73 mt compared
with 1.63 mt exported during the corresponding
period of the previous year.
Capacity addition
There was no capacity addition by large plants in
the cement sector for the third consecutive month in
August. There was no capacity addition in June as
well as in July.
The total capacity, excluding ACC and Ambuja
Cement, was at 215.78 mt as on August 31, 2010.
The total capacity was at 260 mt pan India if the
capacities of ACC and Ambuja Cement were to be
included. The recent depressed conditions in the
Indian market could be the reason behind the zero
capacity addition during the past three months.
“All expansion plans by big companies are
almost on track despite current depressed trend in
the industry and slight overcapacity, as it is quite
clear that India’s cement demand will continue to
rise,” an official of a cement company said.
COAL INSIGHTS 35 October 2010

Feature
Coal ministry faces huge backlog of
linkage applications
Arindam Bandyopadhyay
At a time when the coal sector is struggling to grow its
domestic production base, India’s appetite for long
term coal linkage is increasing at a dramatic pace.
The major user segment, namely the power sector, is showing
an almost insatiable demand for secured coal supply while
cement and sponge iron units too are making a beeline for the
coal ministry, seeking new linkages.
As on September 2010, official data reveals that 1267
applications are pending before the coal ministry, which
has sent the list to the power and steel ministries and the
Department of Industrial Policy & Promotion (DIPP) for
ratification. Of these, 774 are power projects, including
applications from State Electricity Boards (SEBs), Independent
Power Producers (IPPs) and captive power units. Others
include 355 sponge iron units and 114 cement projects which
are awaiting the ministry’s approval for the same.
Although some of these cases, the ministry claims, were
considered by the Standing Linkage Committee – Long
Term or SLC (LT) in the past and deferred on account of
various reasons, the massive requirement itself puts a
heavy burden on the coal ministry and state-owned Coal
India Ltd (CIL).
Given the sluggish pace of growth in captive mining and
no-go norms imposed by the forest and environment ministry,
industry sources feel the ‘waiting period’ may prove to be
long enough for these projects, costing them precious time and
resulting in substantial cost over-run.
Power sector’s requirement
As on September 2010, as many as 774 power projects had
their applications for new coal linkages pending before the
ministry. Of these, 92 applications were from SEBs and private
power generators, aggregating new capacity addition of over
1,32,000 MW.
The preferred sources of supplies, as indicated by the
projects, are Central Coalfields Ltd (CCL), Eastern Coalfields
Ltd (ECL), Northeastern Coalfields Ltd (NECL), Southeastern
Coalfields Ltd (SECL) and Western Coalfields Ltd (WCL),
among others.
Along with this, there were 338 applications pending for
IPPs and 344 for captive power units. Companies who applied
for captive linkages include Hindalco, Nalco, Indian Oil
Corporation (IOC), JSW Steel, Jai Balaji Industries, Vedanta
Aluminium, Welspun Maxsteel, and so on. Additionally, 12
captive power units from cement manufacturers were also
awaiting coal linkage.
The skyrocketing growth in the Indian power sector, which
has the world’s fifth largest generation capacity at 1,64,000
MW, is the main driver of coal demand in
the country.
According to official data, India’s thermal
coal imports rose by about 16 percent to 44
million tons (mt) in the year ended March
2010 from 38 mt a year earlier. In 2010-11,
India’s utilities are expected to increase coal
imports by about 16 percent to 51 mt.
As on October 18, as many as 23 coalfired
generators had stockpiles of less than a
week and 11 plants had less than four days
of inventories. This is higher than 21 plants
with less than seven days of supplies, a week
earlier.
According to the Central Electricity
Authority (CEA), the power plants typically
must have coal inventory adequate to last for
15 to 30 days.
It is mainly due to the huge demand
from the power sector that India’s coal
consumption is growing at a rate of 10 percent
compared to domestic supply growth of 7
percent. The supply shortage is being met by
COAL INSIGHTS 36 October 2010

Feature
increased imports, which is likely to cross 80 mt in 2010-11. In
2009-10, total coal imports stood at 67 mt.
Requirement from sponge iron units
Altogether, 355 sponge iron projects have applied for coal
linkages with CIL subsidiaries. The major projects awaiting
coal linkage include 10 million tons per annum (mtpa) project
of Jindal Steel & Power Ltd, 1.2 mtpa plant of Visa Steel, 1
mtpa unit of Eurobond Industries, 4,40,000 tons per annum
(tpa) project of Navbharat Fuse Co. Ltd, 4 x 1,10,000 tpa unit
of IST Steel and Power, 3 x 1,50,000 tpa unit of Rathi Udyog
and 3,15,000 tpa plant of Chhattisgarh Steel & Power, among
others. The preferred sources of supply of coal for these
projects are SECL, CCL, MCL, Singareni Collieries Company
Ltd (SCCL), and similar others.
Pending applications of cement plants
Of the 114 cement projects seeking coal linkages, the majority
are located in areas adjacent to the mines of SCCL, SECL, MCL
and WCL. The major projects are coming up from the stables
of Dalmia Cement, Jai Prakash Associate, Rajshree Cement,
Electrosteel Castings, Reliance Cementation Pvt Ltd and
Sanghi Industries, among others.
New plants are being set up in Andhra Pradesh, Karnataka,
Tamil Nadu, Rajasthan, Gujarat and Madhya Pradesh.
Along with new cement plants, many cement manufacturers
are also enhancing the capacity of their existing captive
power units. Altogether, 12 such projects have coal linkage
applications pending before the ministry. These include a 50
MW capacity addition by ACC at Gulbarga in Karnataka and
48 MW additional capacity by Ambuja Cements at Bhatapara
unit in Raipur (Chhattisgarh). The latter is expanding the
captive power capacity at four units, including Bhatapara.
Additionally, three cement manufacturers are undertaking
brownfield expansion of their existing cement plants and have
sought coal linkages for the same.
A daunting task ahead
The coal sector, more particularly CIL, faces the daunting
task of meeting the ever-increasing requirement from the core
sector industries such as power, steel and cement. In the power
sector alone, there is a peaking shortage of almost 12 percent
and energy shortage of 9 to 10 percent. The government has
stated that the country can achieve only 62,000 MW during the
Eleventh Five Year Plan (2007-12) against an initial target of
78,700 MW. Even this revised target looks difficult to achieve,
contrary to what the power ministry believes. During the
Twelfth Five Year Plan, the capacity addition is pegged at
1,00,000 MW.
Maintaining growth in these user segments is critical for
the economic growth of the country. It would, therefore, be
hardly an overstatement to say that the economic progress
of the country largely hinges on the supply assurance and
improved performance of the coal sector.
COAL INSIGHTS 37 October 2010

Feature
Nelp-ix: bidding to close on March 18
Coal Insights Bureau
After tasting limited success in the last eight editions,
the government is going whole hog to draw foreign
investors to the ninth round of auction under the
New Exploration Licensing Policy (NELP). Announced on
October 15, NELP-IX will be closed for bidding on March 18.
This is expected to be the last round of NELP, which will then
graduate to a new, more flexible and investor friendly Open
Acreage Licensing Policy (OALP) from 2011.
Under NELP-IX, the government has offered 34 areas,
including 19 new and 15 relinquished blocks. This number is
much less as compared to the last three bidding rounds and
covers 88,807 sq km of area. The blocks include eight deepwater
blocks, seven shallow water blocks and 19 onland blocks. As
it is likely to be the last round of NELP, the government is
trying to put extra effort to draw the attention of overseas oil
exploration companies, many of which were conspicuous by
their absence in the previous rounds.
Limited success so far
The first round of NELP was launched in 1999. Since then, the
government has offered 326 oil and gas blocks and awarded
235 under eight rounds of bidding. Between 2000 and 2010,
total exploration coverage of Indian sedimentary basin has
been increased to about 58 percent from 11 percent.
So far, 87 oil and gas discoveries have been made in 26
blocks and accretion of in-place hydrocarbon reserves of over
640 million tons of oil equivalent has taken place.
The recent major findings were Reliance Industries’
Dhirubhai 1 and 3 gas finds in the D6 block in Krishna
Godavari basin off the east coast and Cairn Energy’s oil find
in Rajasthan. Reliance’s block is currently producing around
60 million standard cubic meters of gas per day. This has
increased the domestic gas production by about 72 percent
over that of 2008-09.
In terms of investments, the NELP rounds have secured
around $14 billion, which looks modest given the huge
investment requirement of this industry. The last round of
NELP-VIII had drawn investment commitment of $1.1 billion.
Oil minister Murli Deora expects an improved response
from foreign coil companies this year and said he has held
talks with several foreign oil firms regarding their possible
participation in auction this time around.
A change in strategy
In order to attract the global majors in oil exploration, the oil
ministry has put thrust on marketing India’s potential this
year. For the first time, the ministry has held a pre-NELP
launch meeting in London on October 8, about a week before
the formal launch on October 15, to seek the views of potential
investors. The meeting, according to oil ministry sources, was
attended by 48 companies. “We changed our (marketing)
strategy this time….for the first time we had a pre-NELP
launch meeting in London to incorporate views of investors.
The response was good,” the minister said.
Deora had also held meetings with the top executives of
ExxonMobil, Chevron, BP and Shell in the past few months
and found the response “positive’.
Additionally, the ministry planned to increase the exposure
of NELP road shows to foreign investors. Normally the road
shows are held in Bombay, London, Houston, Calgary and
Singapore. This time it was planned to hold a road show in
Moscow as well.
Another major change in strategy has been at the policy
level. The government has decided that energy explorers
would get tax incentives based on their investments in NELP-
IX and not a seven-year tax holiday on profits as given earlier.
This tax incentive will be available for gas exploration as well.
Graduating to OALP
According to petroleum secretary S. Sundareshan, the NELP
is expected to graduate to OALP next year. The government
and the directorate general of hydrocarbons are building a
National Data Repository to facilitate the shift from NELP to
OALP, he said.
OALP is expected to bring in more efficiency and flexibility
in the process of awarding blocks. Under this policy, companies
can choose any block for offer at any time without waiting for
the regular rounds. Blocks can be awarded based on the best
bid at any time of the year.
Along with a shift to OALP, the government has also
planned to bring some changes in oil exploration sector to help
explore the oil and gas resources in a more efficient manner.
These include the framing of a policy for exploration of shale
gas in Indian Basins. The measures, ministry sources said, are
aimed at achieving the objectives of India Hydrocarbon Vision
2025 which targets to bring all sedimentary basins across the
country into active exploration by 2025.
For Classified
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COAL INSIGHTS 38 October 2010

Feature
Forestry clearance delays may derail
growth prospects
Coal Insights Bureau
At a time when India’ environment ministry is putting
its best foot forward to stop mining of minerals
from environmentally sensitive areas, the Ministry
of Coal (MoC) is trying to explain that delays or scrapping
of environmental clearances would “ultimately result in the
country missing growth opportunities.”
In fact, the coal ministry is reaching out to other ministries
to put an end to the exercise of classifying coal fields into
“go” and “no go” areas according to their forest cover and
has recently circulated a Cabinet note with an argument that
mining should be allowed across the country wherever there
are proven coal reserves.
The MoC is seeking support from power as well as steel
ministries, which are facing more or less similar situation, in
its endeavour to influence the MoEF release clearances on an
urgent basis.
The MoC note has painted a grim picture of slowing
growth prospects and at the same time argued that “paying
too much attention to environmental concerns would in effect
lead to “curtailment of energy source”.
Incidentally, Coal Insights has reported, quoting Coal
India Ltd (CIL) chairman P.S. Bhattacharyya, in its September
2010 issue, that the company has urged the Ministry of
Environment and Forests (MoEF) to expedite the clearance for
projects in “open forest’ areas within a period of 300 days.
Bhattacharyya had hinted that MoEF is not even giving
clearances for mining even in areas (open forest) where
small bushes or shrubs are found. “Currently around 150
such projects are awaiting clearance from the environment
ministry,” he said.
“We will not seek clearance for mining in “no go areas”,
but in case of “open forest” areas, clearances should be given
within around 300 days. In return, we will give back real good
forests, instead of bushes and shrubs through our afforestation
drive,” CIL Chairman had said.
He pointed out that over the past few years, CIL had
COAL INSIGHTS 39 October 2010

Feature
Major projects stuck for moef nod
Coal Insights Bureau
The delays in getting timely environmental
and forestry clearances from the Ministry of
Environment and Forest (MoEF) during the past five
to six years has not only affected a number of greenfield
projects in the coal sector, but in the aluminium, steel and
power sectors as well.
Not only it was Vedanta Resources, whose clearance
of a bauxite mining was cancelled in August this year by
MoEF, but its prior approval for a six-fold expansion of a
refinery in Orissa too was suspended.
Earlier, Supreme Court had barred public sector
undertaking, Kudremukh Iron Ore Company Ltd
(KIOCL), from mining of iron ore from hills of Kudremukh
citing environmental degradation. Tata Steel’s Gopalpur
steel project too was delayed to great extent because of
clearance related issues along with land acquisition
problems.
In addition, the ministry has delayed clearance to
Pohang Iron and Steel Company’s (POSCO) ambitious
project to set up a 12 million tons per annum integrated
steel plant near the port town of Paradip, some 100 km
from Bhubaneswar, citing various violations, including
the Forest Rights Act. POSCO has proposed an investment
of about $12 billion for the project.
NTPC’s Loharinag Para hydel project (2 x 600 MW) too
was cancelled on environmental issues, while a number
of hydel projects in North Eastern part of India had either
been delayed significantly or cancelled due to the same
reason.
On October 12, a delegation from Arunachal Pradesh
took up with External Affairs Minister S M Krishna
about his cabinet colleague Jairam Ramesh pitching for a
moratorium on clearance for hydel projects in the state.
The delegation led by Lok Sabha member Takam
Sanjoy called on Krishna in New Delhi and sought his
intervention, official sources in Itanagar said.
Ramesh, the Union Environment and Forest minister,
had recently taken up with the Prime Minister demands
for review of all hydro projects in the Northeast and a
moratorium on further clearances for hydel projects in
Arunachal Pradesh saying these were bound to be the
subject of agitation in Assam.
The delegation apprised Krishna about the impact on
Arunachal Pradesh if development and exploitation of its
natural resources was halted, media reports said.
Instead of protesting construction of a dam over
Yrlang and Sangpo rivers on the Chinese side, Ramesh
was trying to halt development in the state, the report said
quoting the delegates.
In another instance, MoEF has asked Jharkhand
government to crack down on alleged illegal bauxite
mines supplying the material the Vedanta Aluminium
Ltd.
Alleging that 11 out of these 14 mines are operating
without prior environmental clearance, the ministry has
shot off a letter to the Chief Secretary of Jharkhand, asking
for corrective action.
“Most of the mines in question appear to be operating
under the deemed renewal. As per the directions of the
Supreme Court of India and the clarification issue by the
MoEF dated July 2, 2007, all such projects which have
been operating without any environmental clearance
would obtain environmental clearance at the time of their
renewal of their mining lease”, said the MoEF letter to the
Jharkhand Chief Secretary.
“In view of the above, it is requested that all the
concerned departments may be directed that the
project proponent of the concerned mines shall obtain
environmental clearance at the time of renewal of mine
lease under the provisions of Environment Impact
Assessment (EIA) Notification of 2006. Else, punitive
action will need to be taken under the Environment
Protection Act, 1986 for violating the EIA Notification of
2006”, the letter added.
However, in Rajasthan the state government has
refused to cancel new mining leases in the Sariska range
despite Union forests minister Jairam Ramesh asking
chief minister Ashok Gehlot to put an end to mining in
the Aravali ranges and cancel all new leases. The Supreme
Court had earlier ruled: “no mining in Aravalis till further
orders”.
The mines department of Rajasthan said the order of
the Suprement Court passed on February 2, 2010 is being
fully implemented.
“The court has restrained mining in cases of such mines
where the renewal application is pending but lessees are
doing mining as per the deeming provisions of rule 24A
of Mineral Conservation Rules, 1960. The mining in such
cases has been stopped completely,” a letter from mines
department of Rajasthan said.
More than 17 mines in and around Aravalis region are
facing closure threat because of Supreme Court order.
COAL INSIGHTS 40 October 2010

Feature
embarked on a massive afforestation drive in coal mined areas
and a look at most of the mines through satellite mapping done
by CMPDI makes it abundantly clear that the afforestation
drive by CIL subsidiaries had led to development of much
more trees and forest than what used to be before it had
commenced mining in a particular area.
“This would considerably reduce the time taken for
clearance of such projects and thus bridge the gap between
domestic growth in supply at 7.5 percent and demand at 10.0
percent,” Bhattacharyya had said.
Now taking a move forward, the MoC is attempting to
influence upon the MoEF not to be unnecessarily harsh in
providing clearances for new projects.
Incidentally, the idea of demarcating coal blocks with
forest cover as “go” and “no go” was floated by the MoC and
Coal India – a fact that the Coal Ministry-piloted Cabinet note
also acknowledges.
In its Cabinet note, the coal ministry says: “Any new
criteria at this stage that causes us to reassess our resource
base will not only push the power generation growth plans
of the country but will also have its effects in the future when
the climate change issue becomes more stringent. Thus on the
whole, it will only result in precious loss of time for building up
our power generation capacity and energy supply capacity.”
The ministry has argued that the initial study of nine coal
fields put 203 of a total of 603 blocks in the “no go” category –
a move that would put 660 million tons of coal every year out
of reach.
Incidentally, all projects in areas that involve diversion
of forest land need to be considered by the Forest Advisory
Committee. The idea was that CIL would not spend time
working on plans in areas where permission for mining was
unlikely to be given.
Meanwhile, building up the pressure, the Steel Ministry
has asked that alternate coal blocks be allocated for its projects.
In a letter to Coal Secretary C. Balakrishnan earlier in October,
steel secretary P.K. Misra has asked that coal blocks allocated
in “no go” areas be swapped for blocks that can be mined. The
steel ministry has argued that most of the allottees in the steel
sector have “already made substantial investments in the enduse
projects”.
The steel ministry has argued that “any hindrance” in the
development of these coal blocks will affect the economic
viability of the projects. It has made it abundantly clear that
the forest classification exercise will have an adverse impact
on the economy.
The steel secretary wrote, “blocking the development of
these coal blocks by categorizing them under “no go” area
may not only adversely affect these on going steel projects,
but may also impact future investments in the steel sector due
COAL INSIGHTS 41 October 2010

Feature
to the shadow of uncertainty looming over the availability of
this critical raw material.”
The power ministry has said that the exercise would put
660 million tons coal out of reach every year. This would
impact 1,30,000 MW of capacity. The ministry has cited that
power developers have already spent around `27,384 crore
and committed `11,578 crore in end-use projects and `589
crore in coal-related activities.
However, it is being argued by environment sympathisers
that in its rush to maximise the production capacity of the
state-owned Coal India, the MoC appears to have forgotten
about the Forest Conservation Act, 1980.
The forest law requires that all diversion of forest cover for
uses that can be described as “non-forest” require the approval
of the Forest Advisory Committee (FAC). The ‘go’ and ‘no go’
exercise that the coal ministry is now objecting to does not do
away with the FAC process.
The exercise was more in the nature of a time and resource
saving executive device. The “no go” – “go” exercise is an
effort to ensure efficient investment decisions, which would
aid coal mining companies to focus on projects in areas that
would not be rejected by the FAC.
A senior environment ministry official was quoted as
saying in a media report that “It makes no material difference
to the outcome if the go/no-go exercise is aborted unilaterally.
All projects go through the FAC process irrespective of the
go/no-go exercise.”
A section of government is of the view that the MoC’s
objections are based on a faulty understanding of the
clearance process. “All projects involving forest areas have
to be considered by the FAC before work can begin. This is
not going to change,” an Environment Ministry official said.
Meanwhile, the environmental issues are not only affecting
the mining prospect, but transportation of coal as well.
The Jharkhand government has reportedly rejected a forest
clearance for a railway link being planned for evacuation of
coal from the North Karanpura coalfield operated by the CIL.
The coalfield can produce 24 million tons a year and is one
of the 11 major coalfields of CIL. The 11 coalfields together
account for over 92 percent of CIL’s raw coal production. North
Karanpura coalfield has reserves exceeding 4400 million tons
and is operated by Central Coalfields Ltd (CCL), one of the
seven Coal India subsidiaries.
“We have rejected the forest clearance for the Tori-Shivpur
coal evacuation link, as the project comes in a densely forested
area. There are wildlife issues,” secretary, Department of
Forests and Environment, A.K. Sarkar, Jharkhand, was quoted
as saying in a media report. “When the new application
comes, we will examine it from all angles,” he added. North
Karanpura’s contribution to Coal India’s overall production
has steadily declined from 6.1 percent in 2005-06 to 5.5 percent
in 2009-10. Coal from this coalfield is supplied primarily to
thermal power generation companies.
The state-owned company alone meets over 80 percent
of India’s annual coal demand that was estimated at around
535 million tons in 2009-10. Overall, the company operates
21 coalfields with 471 mines across eight states in the
country.
About 46 percent of CIL’s raw coal production is
despatched through Indian Railways. The company’s despatch
volumes have historically been constrained by inadequate
transportation capacities, including non-availability of
adequate rakes.
However, a senior official from East Central Railway,
which is implementing the broadgauge
line between Tori-Shivpur and
Hazaribagh, denied the rejection. “We
had applied for the clearance around
three years ago. The forest department
is refusing to give it. They have pointed
out some problems. The matter is being
pursued at the Railway Board level. We
are applying again,” he said.
Apart from the Central Coalfields
Ltd’s blocks, creation of the railway link
can affect coal evacuation from at least
two of NTPC’s eight coal blocks - Chatti
Bariatu and Kerandari.
The importance of the rail link and the
criticality of its completion can be gauged
from the fact that the government has
identified it in the mid-term appraisal of
the Eleventh Plan document as one of the
four major rail links under construction,
whose delay is acting as a major
constraint in movement of coal.
COAL INSIGHTS 42 October 2010

Feature
India misses Sept power generation target
Gargi Sahai
India’s power generation in September 2010 stood at
64315.32 GWH, falling short by 8.18 percent from the
target set for the month, as per a recent Central Electricity
Authority (CEA) report. The target set for the month was
70042.09 GWH. The energy generation for the same month last
year was 63478.63 GWH, which means India has been able to
generate 1.32 percent energy more than last year in the period.
As always thermal power generation was the highest in
the month, it stood at 47077.92 GWH which was 86.72 percent
of the planned 54288.43 GWH, thermal power generation was
followed by hydro, nuclear and Bhutan IMP at 14250.97 GWH,
2008.99 GWH and 977.44 GWH respectively.
Region wise maximum power generation, 19621.89 GWH
was done by the Western region during the month followed
by the northern region and southern region with generation of
19217.59 GWH and 14312.05 GWH respectively.
The all India energy generation for the period April to
September is 397389.47 GWH.
Capacity addition
India added a total of 742 MW of new power generation
capacity during the month of September, which was
significantly less than the target of 2571 MW for the month,
according to data of Central Electricity Authority (CEA). With
this, the total capacity addition during the first six months of
2010-11 stood at 4935 MW.
Of the total capacity added during the month, 500 MW was
in Thermal category, the addition was don at the Mejia TPS
Extn of Damodar Valley Corporation in West Bengal and 242
MW in Hydro category which included addition of 50 MW at
Kerala State Electricity Board’s Kuttiyadi Addl Extn in Kerela
and 96 MW each at Unit 1 and 2 of Allain Duhangan Hydro
Project Limited’s plant in Himachal.
As per the CEA report a total 4935 MW capacity added was
Category wise Energy Generation Sept 2010
(In percentage of GWH)
22.16%
1.52%
100
90
80
70
60
50
All India PLF For Sept 2010
(In Percentage)
76.13 75.86
68.32
53.25
Source: Central Electricity Authority
69.46
63.88
added during the first half of the current financial year, out of
which 4484 MW was in the thermal category and 451 MW in
the hydro category.
Plant load factor
The Plant Load Factor (PLF) for the country for the month of
September, 2010 stood at 63.88 percent, the plan was to achieve
69.46 percent. PLF is a measure of the output of a power plant
compared to the maximum output it could produce. Sector
wise also none of the sectors could meet their target, the PLF
for the central sector stood at 75.86 percent where the target
was of 76.13 percent, the state sector had a target of 68.32
percent and it achieved 53.25 percent and similarly the private
sector achieved 77.89 percent whereas the target set for them
was 84.20 percent.
Fifteen power stations in the central sector and 17 in the
state sector failed to achieve their target. Simahadri had
the highest shortfall in the central sector of 43.80 percent,
Badarpur was another power station which had high shortfall
of 25.65 percent.
Durgapur Projects Limited (DPL) had the highest shortfall
of 52.95 percent in the state sector, followed by Indraprastha
Power Generation Co Ltd (IPGPCL) and Maharashtra State
Power Generation Co Ltd. (MAHAGENCO) with shortfalls of
51.79 percent and 28.09 percent respectively.
84.2
77.89
Central Sector State Sector Pvt Utl Sector All India
Programme
Achievement
3.12%
Thermal Nuclear Hydro Bhutan Imp
Source: Central Electricity Authority
73.20%
Critical coal stock
Due to less receipt of coal, high generation,constraints in coal
transportation from ports to power station and non receipt of
import of coal as many as 25 power stations in the country
were left with a “critical” coal stock of less than seven days as
on September 30, 2010.
Rihand (78 percent), Obra (84 percent) and Anpara (94
percent) power stations in the northern region and Wanakbori
(68 percent) power station in the western region were the
COAL INSIGHTS 43 October 2010

Feature
2550
2050
1550
1050
550
50
Achievement vs Target In Capacity
Addition Sept 2010 (In MW)
2521.5 2571
500 242
49.5
Thermal Hydro Nuclear All India
Target
Source: Central Electricity Authority
Achievement
power stations which were left with a “critical” coal supply
due to less receipt of coal during the month.
Kota in the northern region, Paras and Parli in the western
region and Bandel and Kolaghat in the eastern region, faced
the crisis due to non receipt of import of coal during the month.
Singrauli in the northern region, Vindhyachal TPS, Gandhi
Nagar and Dhanu in the western region and Talcher and IB
Valley power station in the eastern region were some power
stations suffered due to high generation.
Power supply position
In the month of September 2010, the country’s requirement for
742
power was 68,032 MU, whereas the power availability for the
month stood at 64,023 MU, a shortage of 5.90 percent from the
requirement.
Chandigarh, Rajasthan, Sikkim Dadra& Nagar Haveli
and Lakshwadeep, did not face a shortage of power supply
during the month rest all the other states and union territories
did. Maharashtra again was the state to face the highest
power supply shortage, the requirement by the state for the
month was 9346 MU whereas the availability was 8203 MU, a
shortage of 12.20 percent.
Maharashtra was followed by Uttar Pradesh and Tamil
Nadu with deficit of 1000 MU and 339 MU respectively.
Region wise, western region faced the highest shortfall of
1,494 MU followed by northern and southern regions with
shortfall of 1448 MU and 688 MU respectively. The eastern
and north eastern regions faced a shortfall of 285 MU and 94
MU respectively.
Andaman and Nicobar had the maximum deficit of 25
percent, as far as the deficit to the requirement of power supply
percentage of a state or union territory is concerned, it had
a requirement of 20 MU of power supply during the month
but, received only 15 MU. Andaman Nicobar was followed by
Bihar and Jammu & Kashmir who had deficits of 23.10 percent
and 20 percent respectively.
The country’s power requirement in the first half of the
current financial year was 429,624 MU and the availability
during the period was 388,214 MU, a deficit of 9.6 percent.
COAL INSIGHTS 44 October 2010

government
Coal ministry firm on profit sharing,
doesn’t rule out price rise
Coal Insights Bureau
The coal ministry’s proposal of 26 percent profit-sharing
by the country’s miners with the displaced community,
has created a flutter in the generally placid Indian coal
sector. According to the proposal, the coal mining companies
(both public and private) will have to shell out 26 percent
of their annual profits or 10 percent of their yearly royalty,
whichever is higher, for the development of the displaced
community.
This has given rise to multiple possibilities which include
coal price increase, under-reporting of profits, decline in
captive production and a wrong signal to overseas mining
companies, among a few. Yet, the ministry is firm on this issue
as well as optimistic about its long term impact.
“It’s an absolute necessity at this point,” stressed the
minister-in-charge, Sriprakash Jaiswal, as he delineated
the underlying
thoughts. “If you
don’t take such
serious measures,
you won’t possibly
be able to control
local resentments
ten years hence.”
This, courtesy
the Maoist
rebellion, comes as
a new realisation
to the government.
But then, the figure
quoted (26 percent)
is perhaps too
high, argue some,
and the stance too
aggressive. Besides,
the ministry does
not sound very
clear about the
nitty-gritties of
this amendment,
industry sources
point out. Only
one thing is certain
though, that the
ministry is ready
with the proposal,
no matter what, affirmed Jaiswal.
A step long overdue
The changes, as pronounced by the minister, will be part
of the Mines and Mineral (Development and Regulation)
Amendment Bill. The ministry will place it before the cabinet
within a month for its nod. Once cleared, the bill will be placed
before Parliament in the winter session.
The proposal comes close on the heels of the Vedanta
tangle, where the forest and environment ministry cancelled
the mining clearance issued to Vedanta Resources and the
Orissa Mining Corporation and also suspended the approval
for a six-fold expansion of the company’s aluminium refinery
in Orissa.
If that came as a relief to the tribals of Niyamgiri Hills
(in Orissa) who
had been agitating
against the project
for the past few
years, the coal
ministry’s proposal
should be a toast
to the continuing
struggle of
p r o j e c t - a f f e c t e d
communities all
over the country.
India has a long
history of such
agitations, notable
among those being
the movements
against Narmada
Dam and Koel Karo
hydel power project,
none of which saw
the light of day. But
the most belligerent
ones in this regard
have been the
Maoist rebels, the
primary factor that
pushed the ministry
to the decision.
“We cannot
COAL INSIGHTS 45 October 2010

government
pacify the land users unless they are duly compensated.
Otherwise, law and order problem will continue to grow in
such places leading to rebellious activities,” conceded the
minister.
A few concerns
The ministry’s firm resolve to go ahead with the proposal
comes hand in hand with a few concerns of the domestic coal
users in the country. The major concern expressed by the
industry and not ruled out by the minister is, of course, the
possibility of an increase in domestic coal prices.
“There may be a price rise,” the minister said, but insisted
that the ministry will go ahead with the proposal anyway.
“The government has taken this bold and important decision
because it is only by compensating land losers adequately that
you can pacify the unrest created by the Maoists and other
such outfits.”
“If this issue continues to be neglected, the situation may
go out of control in the next few years,” he added.
It is to be noted that Coal India Ltd (CIL), which accounts
for 82 percent of the total domestic coal production, last
increased its prices in October 2009, after a two-year gap. The
domestic price of coal is currently quoted at about 40 percent
lower than the current global prices.
The other major concern, as pointed out by Tata Sons
chairman, Ratan Tata, is that the coal mining companies may
be tempted to under-report their profits. “This,” Jaiswal said,
“the government is aware of”. Even if the miners indulge in
misreporting their financial positions, they cannot escape the
10 percent royalty charge, he clarified.
Moreover, since the proposal will be applicable to the
captive coal block allocattees as well, this may come as a
disincentive for prospective lease holders, many of whom
expect to benefit from sale of excess coal production in
future. The ministry is already easing the norms relating to
such sale.
Yet another concern is that contrary to the government’s
hopes, such provisions may deter foreign companies who
might be looking for an entry into the sector.
Allaying such apprehensions, mines secretary, S. Vijay
Kumar, said “The new Mining Act puts emphasis on the
need for a social license to mine. We want them (the affected
community) to feel that mining is not a threat to their existence
but is possibly an opportunity for their development.”
Lacking clarity
The proposal, as it has been put forth, lacks clarity regarding
which projects will come under its purview. While the
minister asserts that “all coal mining projects – new and old”
will be brought under the proposal, questions are being raised
on how and whom to compensate in case of projects that were
taken up decades ago.
“While the government’s intention is good, it is not clear
how people, displaced long ago, will actually benefit from
this” asked the secretary-general of the Federation of Indian
Mineral Industries (FIMI), R.K. Sharma.
It is also not clear if the 26 percent profit sharing will
come from the overall balance sheet of the mining companies
or from individual projects. There is also doubt as to how
far the spending by miners will actually reach the targeted
community, they said.
Vijay Kumar, however, defers in his views. “There
is a very large set of people that now feel that the act is
sufficiently reformist, and sufficiently detailed in respect to
environmental and social issues, which the old act did not
address,” he said.
COAL INSIGHTS 48 October 2010

INTERNATIONAL
Forum seeks Canada-India mining ties
Coal Insights Bureau
In order to exchange sector specific intelligence and develop
strategies for cooperation in the mining and metals sector,
a three-day Canada-India Mining and Metals Forum was
held from September 27 to September 29, 2010, at Toronto.
The forum offered a unique opportunity to connect with
senior government and corporate executives from India and
Canada on a one-on-one basis. Senior Indian executives and
officials grabbed the opportunity to offer the latest market
intelligence & layout latest regulatory framework for attracting
Canadian mining companies.
Canada India Foundation, a non-profit organisation
dedicated to foster support for stronger bi-lateral relations
between Canada and India, organised the conference in
cooperation with the Prospectors and Developers Association
Canada (PDAC). CIF had earlier organised the highly
successful Canada India Energy Forum 2009.
The plenary and panel speakers in the conference included
the likes of S. Vijay Kumar, secretary, ministry of mines,
government of India, one of the key policy-makers behind
these regulations, along with Dr. Abdul Kalam, former
President of India, Hon. Sandra Pupatello, minister of economic
development and trade, government of Ontario, Hon. Michael
Gravelle, minister of mines, government of Ontario as well
as senior executives/officials from PDAC, Cameco, Worley
Parsons, Avalon Rare Metals, Argex Mining, SENES, Toronto
Stock Exchange, Deloitte, NRCAN, Mining Association of
Canada, CAMESE, Process Research ORTECH, Borden Ladner
Gervais LLP, Canaccord Genuity from Canada and ministry of
mines, Steel Authority of India Ltd (SAIL), Hindustan Copper,
National Aluminium Corporation (NALCO), National Mineral
Development Corporation (NMDC), Coal India Ltd (CIL),
Federation of Indian Mining Industries, Gem and Jewelry
Export Promotion Council, Dept. of Mines and Geology,
Andhra Pradesh, Kotak Mahindra, Electronics Recycling
Association and Fifth Generation from India. Speakers from
several other major Canadian and Indian companies also
graced the occasion and offered valuable advice and feedback.
The potential for trade in minerals and metals between
Canada and India still remains largely unexploited. CIF
organised the Mining and Metals Forum 2010 with a hope to
change this scenario.
The Forum sought to demystify the challenges surrounding
the emerging investment opportunities flowing in and out of
India, with Canadian mining investors and corporate leaders
expected to hear first-hand from senior Indian government
officials on the latest regulatory and policy developments
in this regard. It also aimed at promoting Canada's knowhow,
experience and technical expertise across the entire
value chain of mining activities including mining finance,
M&A, governance and sustainable development. According
to the co-chair of the Forum and Partner at Borden Ladner
Gervais LLP, Manoj Pundit, "If a Canadian mining company
or investor is seeking to better understand what the Indian
market is looking for, this is the conference for them. It offers
the necessary information as well as the connections."
He also said that “India is one of the world’s strongest
economies with a rapidly burgeoning demand for natural
resources and commodities, an emerging industrial base and
technology/knowledge-based economy. Canada and India
are natural partners within the mining sector”.
He further added, “The potential for these two countries
to share their resources and expertise for mutual benefit is
immense as evidenced by recent acquisitions of Canadian
companies Dofasco and Algoma Steel, respectively, by
ArcelorMittal and Essar Steel, two global giants with origins
in India”.
Another co-chair of the Forum and Vice-Chairman/CEO,
Process Research ORTECH Inc., Dr. V.I. Lakshmanan, said that
"India offers a burgeoning demand for non-ferrous, precious
metals, uranium, coke and potash. Indian conglomerates
are also investing globally to acquire new resource bases.
As mining leaders, Canadians need to better understand the
opportunity India offers and make the most of it."
According to him, Canada is the world’s largest repository
of end-to-end domain knowledge and expertise within the
mining and metals sector, covering the full range of resourcerelated
activities from prospecting and exploration to mining
operations, commodities and market development and
world class legal, M&A and financing capabilities. Canadian
mining history is rich with examples of explorers starting
as prospectors and becoming mining magnates controlling
and running global mining companies. The Toronto Stock
Exchange (TSE) is the leading market for mining and natural
resource stocks with more than 60 percent of the world’s
public mining companies being listed in it.
Canada India Mining and Metals Forum 2010 was an
excellent attempt to provide the framework for the development
of enabling strategies and policies by stakeholders from both
countries in the mining sector.
The Forum was preceded by an evening reception and
comprised focus sessions on iron and steel, non-ferrous and
light metals, uranium, coal, gold and diamond, metals trading,
sustainable development, recycling, governance and public
policy concluding with a panel session to develop Going
Forward strategies, which will be summarised in a report to
be presented to all stakeholders.
Canada India Foundation aims to continue to highlight
opportunities for Canada India collaboration through thematic
Forums such as the Energy Forum and the Mining and Metals
Forum, in the coming years.
COAL INSIGHTS 49 October 2010

INTERNATIONAL
Rbct August coal exports go down
Coal Insights Bureau
The export of coal through Richards Bay Coal Terminal
(RBCT) of South Africa fell to 5.451 million tons (mt) in
August, which was nearly 9 percent lower than 5.975 mt
exported through the terminal in July, according to information
available with Coal Insights. The total coal exports through the
terminal during the first eight months (January to August) of
2010 stood at 39.386 mt, which was about 1 percent higher than
39.022 mt exported during the same period of 2009.
The coal exports through RBCT in 2009 stood at 61.064 mt
and the country’s leading coal producers are expected to end
up with a figure of around 63 mt in 2010.
“We had initially set a target to export about 65 mt coal
in 2010, but the recently held transport strike in May-June
affected exports to the tune of around 2 mt and we now
expect to export about 63 mt in 2010,” an official of one of the
promoters of RBCT told Indian Coal Market Watch (ICMW).
RBCT coal exports in 2010 (in tons)
Months 2010 2009
January 4,867,605 4,116,999
February 4,935,614 5,195,665
March 5,654,452 4,848,649
April 3,916,995 4,553,063
May 4,569,827 3,755,671
June 4,016,129 5,524,759
July 5,974,770 5,451,259
August 5,451,345 5,576,320
September 4,181,683
October 6,751,846
November 5,559,422
December 5,549,129
Total 39,386,737 61,064,465
India’s coal import from SA
India’s coal imports from Richards Bay Coal Terminal (RBCT)
of South Africa stood at 1.648 mt in August, which was 21.56
percent lower than 2.101 mt imported in July.
The increase in July imports was due to the carryover of
stocks from June imports as there was a transport strike in
June in South Africa that had affected coal exports through
RBCT.
The imports in August this year were 17.46 percent higher
than 1.403 mt imported in the corresponding month of the
previous year.
India’s total coal imports from South Africa between
January and August this year stood at 13.286 mt, which was 14
percent higher than 11.648 mt imported in the corresponding
period of 2009.
However, imports during the first five months (April-
August) of 2010-11 stood at 8.610 mt, which was 9.61 percent
higher than 7.855 mt imported during the same period of
2009-10.
Pakistan’s coal imports from SA
The imports of coal by Pakistan from South Africa’s Richards
Bay Coal Terminal (RBCT) fell 12.29 percent to 1,60,171 tons in
August from 1,82,624 tons imported in July. The country’s total
coal imports from South Africa between January and August
this year stood at 7,19,477 tons, which was substantially higher
than 5,98,197 tons imported in the same period of 2009.
China’s imports up sharply
China’s coal imports from South Africa rose more than ten
times during the first eight months of 2010. The imports by
China from RBCT between January and August 2010 stood at
4.66 mt compared with small import figures of 0.44 mt during
the same period in 2009.
A surge in Chinese demand, coupled with easing of freight
rates in recent times, have contributed to higher export of coal
from South Africa to China, industry sources said. The easing
freight rates made the landed cost of South African coal to
China much more competitive compared to Australian coal,
the sources said.
Asia’s coal imports from SA
Asia’s coal imports from RBCT of South Africa dropped
marginally by 1.05 percent in August as compared to the
previous month, largely due to a decline in imports by China
and India. The total imports into Asia dropped to 4.47 mt in
August from 4.52 mt in July. In June, coal imports from RBCT
stood at 2.96 mt.
For the eight months ended August 2010, total imports
by Asian countries exceeded 28.47 mt, amounting to an 18.67
percent increase over 23.99 mt posted till July. During August,
China, India, UAE, Turkey and Pakistan imported lower
volumes of coal while Malaysia and South Korea witnessed
higher imports. Japan and Saudi Arabia, which did not import
coal in July, brought in 3,15,970 tons in August.
Asia’s imports of South African coal
Aug ‘10 Jul ‘10 YTD’10
China 965,636 1,044,909 4,663,906
Japan 149,122 298,702
Malaysia 415,294 139,368 1,759,316
Pakistan 160,171 182,624 719,477
South Korea 301,553 280,854 1,552,951
Taiwan 164,991 144,100 1,879,718
Thailand 361,752
Saudi Arabia 166,848 166,848
COAL INSIGHTS 50 October 2010

INTERNATIONAL
UAE 269,462 331,688 1,305,355
Yemen 104,060
Israel 164,003 157,860 1,641,416
Turkey 71,486 139,714 731,999
India 1,647,522 2,102,351 13,286,373
Singapore
Hong Kong
Total 4,476,088 4,523,468 28,471,873
Europe’s Aug coal imports from SA
After a sharp decline in July, Europe’s coal imports from South
Africa surged more than 63 percent in August compared to
the previous month.
According to data available from RBCT, coal imports into
Europe rose to 0.62 mt in August from 0.38 mt posted in July.
In June, coal imports from RBCT stood at 0.55 mt.
For the period January-August 2010, total imports stood at
5.81 mt, amounting to around a 20 percent increase over 4.84
mt posted till July.
Much of the growth in August came from Spain which
nearly doubled its imports at 0.33 mt. Germany, which did not
import till July, brought in 0.12 mt in August.
However, most of the coal importing countries, including
France, Ireland, Portugal and Spain, have witnessed a drop in
import volumes this year. Belgium, Norway and Greece have
not imported any coal so far this year.
Europe’s coal imports from South Africa
Aug’10 Jul ‘10 YTD’10
Denmark 460,954
France 452,398
Ireland 43,927
Italy 71,494 215,520 2,048,111
Portugal 160,876
Slovenia 71,781
Spain 327,752 166,250 1,492,067
UK 504,658
La Reunion 104,134 455,346
Norway
Belgium
Germany 121,728 121,728
Greece
Total 625,108 381,770 5,811,846
SA coal imports by Atlantic nations down 35% in
Aug
Coal import by the Atlantic nations from South Africa declined
35 percent to 1.06 mt, compared to 1.65 mt in July, according
to information available. This followed a 46 percent increase
in July to 1.65 mt. The August figure was also lower than June
imports of 1.13 mt.
For the eight months ended August 2010, total imports
stood at 11.79 mt, compared to 10.82 mt posted till July. The
Atlantic countries include mostly European, African and Latin
American countries bordering the Atlantic Ocean.
Australia okays $30-bn
coal gas projects
Coal Insights Bureau
After much scrutiny, the Australian government has
given conditional approval to two major coal seam
gas projects in central Queensland, thereby paving
the way for export of a major source of clean fuel from the
country. The government had imposed several strict riders
for these multi-billion dollar coal gas projects, with an aim to
protect the fragile environment. These projects, experts said,
will clear the way for export of millions of tons of clean fuel.
Before allowing the BG Group and Gladstone Liquefied
Natural Gas (GLNG) joint venture to go ahead, the Australian
Environment Minister, Tony Burke, had imposed more than
300 conditions to protect natural treasures such as the Great
Barrier Reef. BG is developing Curtis LNG and GLNG in a joint
venture between Australia’s Santos, Malaysia’s Petronas and
France’s Total.
“After rigorous assessments that included public
consultation and the advice of experts, I consider that these
projects can now go ahead without unacceptable impacts on
matters protected under national environment law,” Burke
said in a recent report. The projects are worth around 30 billion
dollars. They involve 2650 coal seam gas wells being drilled
over a period of 25 years in Queensland’s Surat and Bowen
Basins, a 435-km steel pipeline from the Fairview gas fields to
Gladstone and a liquefied natural gas (LNG) plant and export
facility based on Curtis Island.
By the end of the year, the companies are expected to take a
final decision on the plants and export terminals at Gladstone on
Australia’s east cost in the lower reaches of the Great Barrier Reef.
The projects will add a new dimension to Australia’s burgeoning
liquefied natural gas sector, under which gas will be taken from
underground coal seams, cooled into liquid by using pioneering
technology and shipped abroad, mainly to Asia. With this
announcement, expectations of rival coal seam joint ventures
between Origin Energy and ConocoPhillips along with Royal
Dutch Shell and Petro-China have increased, although they
have not yet applied for environmental approval. In the
construction phase itself, GLNG will create 5000 jobs and 1000
more when the plant would become operational. Its initial
output would be 7.2 million tons per annum (mtpa). BS Group
expects to start production by 2014. The production from its
Curtis Island project would be around 8.5 mtpa.
As a potential buyer, China’s CNOOC has agreed to buy
3.6 million tons (mt) of LNG from BG’s Curtis plant. GLNG
has pledged to sell 1.5 mt to Total and 3.5 mt to Petronas. LNG
is becoming popular because it will certainly help the rising
economy of Asia to cut down on pollution. Meanwhile, the
state opposition has said that it supports the approval of the coal
seam gas projects but with the proviso that Queensland’s prime
agricultural land and underground water must be protected.
COAL INSIGHTS 51 October 2010

INTERNATIONAL
New Indonesian norm on
low quality coal sales
Coal Insights Bureau
In a move which is likely to benefit Indian utilities looking for
secure thermal coal supplies from abroad, leading thermal
coal exporter Indonesia is all set to allow miners to sell lowquality
coal below the government reference price this year.
As per recent media reports, Indonesia’s ministry of energy &
mineral resources has, on September 23, issued a decree which
affects only coal with a very low heating value. As per the report,
this kind of coal which is hard to sell at the reference price, is
likely to find buyers in the form of the Indian power utilities
who are looking to secure coal to meet their generation targets.
As per the information regulation on coal and minerals,
the reference price guidelines state that most thermal and
coking coal must be sold at or above the government's
monthly reference price. However, this does not specify what
heating value of coal will be eligible for sale at prices below
the benchmark.
Minimum sale rule
for miners
Another report stated that Indonesia will require coal
miners to sell a minimum of 24.17 percent of their
annual production to the domestic market next year,
which would be slightly less than this year despite an
increase in domestic consumption.
As per the energy and mines ministry estimates,
domestic coal consumption will reach 78.97 million
tons (mt) in 2011, reflecting a 21.6 percent increase from
64.96 mt for this year, the ministry said in the decree.
This minimum domestic sales requirement applies
to coal miners including PT Berau Coal Energy Tbk , PT
Bumi Resources Tbk , PT Adaro Energy Tbk , PT Bayan
Resources Tbk and PT Indo Tambangraya Megah.
As per the report, nearly 70 percent of domestic
sales will go to power plants run by state utility firm
PT Perusahaan Listrik Negara while the rest will
go for the metal and cement industry, including for
Freeport McMoran Copper & Gold’s Indonesia unit and
Newmont Mining Corp. The domestic sales requirement
decree flows from a mining and coal law passed in
December 2008, which aimed to squeeze more revenue
from the sector and assure supplies of minerals such as
coal, for the home market, where demand is expected to
increase as new power projects get on stream.
"It will be applied to coal which has very low heating value
and is difficult to sell because of the quality," said Witoro
Soelarno, secretary at the directorate general of minerals and
coal, at the energy and mines ministry. The report added that
though the coal can be sold without following the government
price reference, yet miners would have to give a strong reason
for the same which would be subject to approval by the ministry.
With the passing of this decree, coal for certain purposes,
such as for power plants run by state utility firm PT Perusahaan
Listrik Negara, could be sold below the benchmark price set
by the Indonesian government, if approved by the ministry.
The report further stated that according to the draft,
powder-like fine coal, reject coal and coal with certain
impurities which is used by domestic industries like cement
and textiles, would also be sold below the benchmark.
It needs to be mentioned here that Indonesia has a wide
variety of coal ranging from 3500 kcal/kg to 7000 kcal/kg.
Besides low-quality coal makes up nearly 65 percent of total
resources in Indonesia and is seen as uneconomical to extract
as it is a less viable source of fuel due to its high moisture
content and low heating value.
As per the information, the government benchmark price
is based on an accepted coal quality comprising 6322 kcal/
kg GAR, total moisture (TM) 8 percent, total sulphur (TS) 0.8
percent and ash content (AC) of 15 percent.
Besides, the regulation would also require miners to
report sales volumes, prices, and buyers every month to the
government, allowing it to ensure that the rules are being
followed. Violations can lead to revocation of mining permits,
stated the report.
Meanwhile, the Indonesian Coal Association said that it
would apply to coal with a heating value of 3000 kcal/kg, a
type that is not used by domestic utilities.
It is to be noted that the government has, since February,
issued a monthly coal price reference used as a guideline
for producers to calculate coal sales and also used by the
government itself to collect revenues.
As per the information, this planned rule change is unlikely
to affect supplies of coal from Indonesia but it would certainly
be a positive factor for power utilities in other countries who
would be now be able to get Indonesia’s low quality coal at
cheaper rates.
In this regard, Indian power utilities who currently are
one of the main buyers of Indonesia's low quality coal, which
is later blended with high-quality South African coal, would
stand to benefit greatly. India's demand for thermal coal is
likely to be over 150 million tons (mt) by 2015.
COAL INSIGHTS 52 October 2010

INTERNATIONAL
EIA raises 2010 US coal consumption
and production outlook
Chandrika Bose
The Energy Information Administration
(EIA) has increased its estimate of
coal consumption as well as that of
production in the US in 2010.
The agency, which is an independent
statistical organisation within the US
Department of Energy, said in its October
report that US coal consumption in 2010 is
likely to increase to 1068.8 million short tons
(million s.t) compared with its September
forecast of 1062.6 million s.t. The country’s coal
production, it said, is likely to go up to 1083.0
million s.t, which is higher than the September
projection of 1069.8 million s.t.
Coal production for the first six months
of 2010 fell by 3 percent despite a 5 percent
increase in US coal consumption. Projected
coal production increased in the second half
of 2010, with annual growth projected at 1
percent.
Projected 2011 coal production has also
gone up to 1094.4 million s.t in October against 1089.5 million
s.t forecast in September. Again, coal consumption for 2011
has been revised upward to 1061.8 million s.t from 1056.2
million s.t projected a month ago.
The October report projects that coal consumption in the
electric power sector in 2010 will go up to 998.8 million s.t,
US Coal Consumption Growth
(change from previous year)
US Annual Coal Production
Source: Short-Term Energy Outlook, October 2010
which is higher than the level projected in the previous month
at 994.2 million s.t,. For 2011, coal consumption in this sector
has been revised to 992.3 million s.t from 985.8 million s.t.
EIA forecasts that electric power sector coal consumption
will continue to be higher for the remainder of the year, with
the total annual increase projected at nearly 7 percent.
According to the October report, coal
consumption by other sectors such as retail
and industrial sectors would be 49.3 million
s.t. and 46.2 million s.t., respectively. These
were higher than the September projections of
47.5 million s.t for retail and 44.3 million s.t.
for the industrial sector.
Consumption by coke plants as well as for
the residential and commercial sectors in this
month’s report, was forecasted at 20.6 million
s.t and 3.0 million s.t respectively, which were
almost similar to projections in September.
Drawdowns in inventories are forecasted
to meet the majority of the increased coal
consumption in 2010.
Source: Short-Term Energy Outlook, October 2010
Electricity demand
EIA now estimates that total consumption
of electricity across all sectors is expected to
grow during 2010 to 10.76 billion kWh per
day. This is slightly more than last month’s
COAL INSIGHTS 53 October 2010

INTERNATIONAL
projection of 10.73 billion kWh per day for the current year.
Again, projections for total consumption of electricity across
all sectors in 2011 in the October report was a little more at
10.72 billion kWh per day than that in September reported at
10.69 billion kWh per day.
The latest report forecasted a little rise in the total retail
sector sale of electricity to 10.27 billion kWh per day while
forecasted sale in its last month’s report stood at 10.25 billion
kWh per day. The October report forecasted sale of electricity
for residential sector to 3.99 billion kWh per day in 2010, which
is slightly higher than 3.97 billion kWh per day projected in its
September report.
Retail sale of electricity to the industrial sector is forecast
at 2.57 million kWh per day in 2010, almost similar to that
projected in the September report.
The large year-over-year increase in cooling degree-days
should help push up total 2010 consumption of electricity by
5 percent over last year's level. Total consumption is expected
to fall slightly in 2011 as forecast temperatures return to nearnormal
levels.
Oil consumption
The latest report of the agency said that oil consumption
globally is likely to grow by 1.7 million barrels per day (bbl/d)
to 86.06 million bbl/d, which is higher than the forecast made
in its previous report at 85.95 million bbl/d.
The increase in oil consumption has been mainly in
response to stronger-than-expected growth in oil demand
during the first half of 2010 in China, as well as in the OECD.
Non-OECD regions, especially China, the Middle East and
Brazil, represent most of the expected growth in world oil
demand in 2011. While other OECD regions are showing
declines, North America is expected to show oil consumption
growth in 2011 of 0.2 million bbl/d. The agency has made
slight changes in projections on increase in oil consumption
for 2011, which is expected to grow to 87.44 million bbl/d
from 87.36 million bbl/d projected last month.
Trade
EIA’s October estimate suggests that US coal exports will
be around 76.5 million s.t in 2010 and 74 million s.t in 2011
with projected coal net exports increasing by 58 percent in
2010, then declining by 17 percent in 2011. Estimates in their
September report stood at 74 million s.t for both 2010 as well
as 2011.
Metallurgical coal exports have nearly doubled in the
first half of 2010 compared with the first half of last year.
Metallurgical coal's share of total coal exports has grown from
52 percent in 2008 to a projected 74 percent in 2010 as per EIA.
The latest report projected that 2010 coal imports by the
US will come down to 18.9 million s.t, as compared to its
2009 imports of 22.6 million s.t. which is also lower than 19.3
million s.t. forecasted in September. Also, the 2011 imports are
similar to the levels forecasted in the previous month’s report
projected at 25.9 million s.t.
COAL INSIGHTS 54 October 2010

Expert Speak
Heat recovery chinese coke ovens:
Problems & solutions
Abhijit Sen
Heat Recovery Chinese Coke Ovens made headway in
Indian Steel plants with M/s Jaiswal Neco going for
the first two Chinese bee-hive batteries with stamp
charging facilities. The contract was with Beijing Sino-Steel
Industry and Trade Group Corporation (SSIT), China and the
technology provider was SPCDI (Shanxi Provincial Chemical
Design Institute). Subsequently, VISA Steel, JSPL, BPSL, and
Hooghly Met coke have all opted for the Heat Recovery Ovens
of Chinese design of SPCDI-SSIT combination in various
capacities.
The BPSL Jharsuguda coke oven plant is one of the best
operating plants among all these Chinese plants with almost
100 percent production load consistently, since inception.
However, certain problems did occur notwithstanding its
excellent performance. Moreover, it was observed that some
of the problems were common to almost all the Chinese plants
supplied by SSIT. One such problem was of the damage of
bridge pipes which connect the battery to the branch headers
carrying gas to the chimney.
Basically all these ovens are large bee-hive ovens which
carbonise coking coal in partial presence of air near the top
layer of the coal cake. Since the charging system belongs to
the stamping category, a large coal cake weighing about 47.00
MT is introduced through the ram side door opening. The VM
released from the coal first burns in the space above the coal
cake and the concave roof of the oven arch acts as a concave
mirror reflecting the radiations from the fire ball in the oven
top space. Since the oven operates under chimney suction, the
flue gas after combustion is drawn through the four linked
arches below the sole, the vertical uptakes, the bridge pipes,
the branch headers and the main headers leading to the
chimney. Theoretically speaking, the temperature of the oven
top arch region should be 1200°C to 1250°C and that at the sole
flue should be about 1300°C to 1350°C.
The fire in the oven is to be controlled in such a way that the
entire combustion of the evolved volatile matter burns out in
the oven and the sole flue. No un-burnt coke oven gas should
escape the sole flue. In the uptake region, the temperature of
the flue gas should be below 1100°C and in the bridge pipe
also the temperature should be below 1100°C.
The Refractory
The typical refractory constitution of the oven arch, the oven
sole, the sole flue and the oven walls are all made of silica
bricks which are well suited to bear temperatures up to
1450°C. The bridge pipes are metal fabrications lined with
ceramic fibre board and ceramic fibre castable, which can
stand temperatures up to 1250°C. These bridge pipes connect
the battery to the branch headers, which are lined with folded
modules of ceramic fibre blanket.
The specified temperature in the branch header is about
1000°C and the refractory installed is also suitable to withstand
this temperature. In the Chinese design, the door linings were
also made of ceramic fibre board and ceramic fibre castable.
The use of ceramic fibre in designing the door, bridge pipe and
headers was mainly recommended to reduce the weight of the
refractory lining in these areas.
A brief history of damages
Replacement of a branch header segment is in progress in COP
1) Upper Oven Doors
The damages to the upper oven door started with a small
defect in the implementation work of the lining during the
project stage itself. It comprised the wrong erection of one row
of L-shaped bricks at the bottom of the upper door. Although
the entire linings of upper and lower doors were executed
under close supervision of Chinese experts, this small item
was overlooked. The problem was detected when all doors
were erected, the plant commissioned and was subsequently
taken on range for full load operation.
Although the first upper door replacement was done in
August 2008, the damage actually had started much earlier,
along with the lower oven doors. Due to faulty erection, the
COAL INSIGHTS 55 October 2010

Expert Speak
Internal lining work of bridge pipe is in progress in coke oven plant
bricks started coming out one by one and the castable, which
took support from these bricks, collapsed gradually, thereby
exposing the ceramic fibre board layers as well as the lower
metallic edge of the cast iron door to direct heat. The lower
edge and some portion of the exposed rib started melting
down. The molten iron falling on the lower doors started
damaging them in turn.
2) Lower Oven Doors
The damage and melting down of the upper oven doors
spread extensively to the lower oven doors also. The molten
iron falling on the refractory lining of the lower oven door first
damaged the refractory, which gave way, thereby exposing
the lower door metal to direct heat. The ribs of the lower
door melted down. Thus, a large number of lower doors also
got heavily damaged and became unserviceable. The first
replacement activity of Lower Oven Doors was started in
March 2008.
free space below the arch roof and the rest of the unburned
gas, along with the hot burnt flue gas, travels down to the
sole flue which is divided into four linked arches below the
oven sole. Additional combustion air known as secondary
air is introduced in the sole flue to complete the balance 20
percent combustion and the hot inert flue gas, devoid of any
combustible constituent, is allowed to go up the uptakes to the
bridge pipes, the branch header and finally to the chimney via
the waste heat boiler, for recovery of waste heat from the hot
flue gases for generation of power.
The damage of bridge pipes commenced from the early
days of commissioning. The commissioning of battery nos.7
and 8 started towards end of December 2007. Thereafter,
sequentially other batteries were commissioned in January
2008(nos. 5 and 6), March 2008 (nos. 3 and 4) and May 2008
(nos.1 and 2). The damage of bridge pipes started in the
months of January to February 2008 and the first replacement
was done in Oven no. 86 coke side (Battery no. 8) on February
13, 2008. It meant that the damage of the bridge pipe had
commenced within a month’s time of the first commissioning.
During subsequent months, replacement of damaged bridge
pipes went on as follows: March 2008-3 nos., April 2008-
3 nos., May 2008-6 nos., June 2008-7 nos., July 2008-8 nos.,
August 2008-5 nos., September 2008-5 nos., Oct 2008-7 nos.,
November 2008-6 nos., December 2008-10 nos., and so on.
Translated year–wise, the bridge pipe replacements were as
follows: 2008-61 nos., 2009-147 nos. and 2010 (till July)-66 nos.
There was a time when bridge pipes got damaged within a
few days of installation.
Observations and Remedial Actions
Upper Oven Doors
The first action with regard to the upper oven doors was to
make some changes in the design of the liner. The L-shaped
bricks were replaced with dense castable LC-45, cast on
L-shaped ss-anchorage. Ceramic Fibre castable of the main
3) Bridge Pipes
Bridge Pipes are breather pipes for ovens and serve as nostrils
for the oven chambers. Each oven, therefore, has two bridge
pipes connected to two separate branch headers – one at the
pusher side and the other at the coke side. These create the
necessary suction inside the oven uniformly from both ends
for inhaling combustion air into the free space above the coal
cake. The inhaled air helps in burning of volatile substances
ejected out of the coal cake and creates a fire ball which
radiates heat in all directions. The arched oven roof serves as
a concave mirror and reflects the radiations in parallel vertical
rays falling on the coal cake.
The entry of air into the oven should be so controlled that
80 percent of the combustion is completed in the oven top
Chart showing gradual decline of damaged upper doors vis-à-vis
increasing nos. in good condition
COAL INSIGHTS 56 October 2010

Expert Speak
Refractory lining work for lower oven doors in progress in COP
body was replaced with insulating castable Insulite-15. Top
surface was finished with 70 mm LC-45 dense castable. About
78 upper oven doors have been replaced with the new lining
since September 31, 2009. None of these freshly lined doors
have failed so far.
There is a proposal to use ceramic fibre modules for upper
door lining. Orders have already been placed for imported
and indigenous modules, particularly for the upper door
lining, the results of which can be seen only after installation.
Lower Oven Doors
The first instance of damage of lower oven door commenced
almost within two to three months of the first start-up of coke
oven battery nos. 7 and 8. Similar to the upper door lining,
changes were made in the lower door lining also, mainly
the peripherals, which receive maximum external abrasions.
These were lined with dense LC-45 castable on top of Hysil
boards. A pictorial representation of the extent of repairs done
almost over a year after September 31, 2009 is given herewith.
None of these freshly lined doors have failed till date.
Bridge Pipes
It was observed that the ceramic fibre lining of the bridge
pipes was failing repeatedly and fallen refractory material
was blocking the suction ports. It was also observed initially
that the temperature inside the bridge pipes was shooting up
as high as 1450°C leading to fusion and melting down of not
only the refractory material, but also the mild steel body of the
bridge pipes, thereby creating gaping holes.
It was also observed that certain amounts of combustibles
were being carried over to the bridge pipe region. The
operating procedure being followed at that point of time
(before September 31, 2009) had a flaw, although it was as
per the instructions given by the Chinese suppliers. The two
primary air windows provided in the upper oven doors were
completely closed for the initial three hours after charging of
ovens. Since the plant was being operated almost at full load,
one oven was being pushed and charged every 45 minutes. As
a result, unburnt volatiles escaped continuously to the bridge
pipe and branch headers. Another mistake which further
aggravated the problem was that a tertiary hole was made by
some agency at the bottom of the uptake just after the fourlinked
arch, which provided additional combustion air to the
unburnt volatiles.
A third observation was that when bridge pipes were
being changed, flue hole cleaning was overlooked at times and
bridge pipes were also being changed only on one side, that is,
either the coke side or the pusher side, ignoring the condition
of the other side. This resulted in more flow of gas through
one of the bridge pipes leading to higher temperature and
meltdown. The following steps were undertaken to overcome
the problem of bridge pipe failure:
a) Immediate plugging of tertiary holes with strict instructions
to never open them in future.
b) Keeping the primary air windows open right from the
time after charging, closing it fully only when the oven
is ready and regulating it in between as per combustion
requirement.
c) Keeping the levels of the combustibles in flue gas, particularly
carbon monoxide and hydrogen at trace levels.
d) To take up bridge pipe replacement either simultaneously
on both the coke side and the pusher side or at a small gap
of maximum one week.
e) Use of dense castable LC-45 in the top layer in contact with
the hot gas.
f) To do compulsory suction port cleaning with every bridge
pipe replacement.
The above mentioned steps have brought in drastic
improvements in the condition and life of the bridge pipes
and their lining. Over the last one year, more than 100 out of
a total of 192 bridge pipes have been replaced, none of which
have failed as yet. With full load operation at 36 pushing per
day, some damages temporarily resurfaced but were quickly
controlled. The key to the solution to the problem was basically
lowering the temperature of the flue gas to about 1100°C to
1150°C which is as per the design and the liner material can
withstand the same.
The author is working as Vice President in the coke manufacturing
unit of Bhushan Power and Steel Limited, Jharsuguda, Orissa.
Right from its inception in 2007, the plant has been facing problems
of massive failure of refractory lining of bridge pipes, upper oven
doors, lower oven doors and branch headers. Many trial and error
processes were carried out with different material and massive
maintenance work was taken up to combat the failures, but fruitful
results were not coming up. Finally after doing an in-depth study
of various operational and maintenance aspects, a viable solution to
this endemic problem could be found with the combined efforts of all
related disciplines.
The author is grateful to M/s K. Vijayan, S. Mukherjee, Sanjeev
Srivastav, Sanjit Kumar and the entire coke oven team for their
relentless efforts in bringing about the improvements in the operation
and maintenance of the coke oven plant.
COAL INSIGHTS 57 October 2010

Expert Speak
The menace of over-reporting in
coal companies
J.P. Panda
The author is the former CGM Coal India and
former COO Aditya Birla group and MJSJ Coal
Ltd. Presently, he is the Managing Director of Priya
Mining Consultancy and Services Pvt Ltd. and the Chairman
of Indian Mine Managers’ Association (Kalinga Branch)
A recent report about the Central Bureau of Investigation
(CBI) measuring coal stocks in different subsidiaries is a
stark reminder of the sad story of over-reporting currently
prevalent in the coal industry. Sadly, this problem has not
been addressed by our country’s coal behemoth, Coal India
Ltd (CIL), in the right perspective.
The stock reply to this issue is that measurement teams
from outside the company are sent to conduct the stock
measurement and the problem is confined to a select few,
against whom disciplinary action is invariably taken.
What makes the entire situation worse is that even the
measurement teams were under the CBI net, in case of one
of the subsidiaries.
In the past, there have been instances of charge sheeting
and imprisonment of CGMs of coal companies by the CBI
for over reporting. The charges usually centre around the
fact that the coal stock has been sold illegally for personal
benefit.
Why and what of over-reporting
The main reason for over-reporting relates to the personal
ambition of many executives who tend to inflate the production
figures, in a way somewhat similar to the method adopted by
SATYAM which inflated its profit figures.
These executives, in an effort to show their efficieny and
quickly climb up the corporate ladder, often simply tend to
over-report, that is, inflate the production figures and thereby
show that the overall cost has also come down. It is obvious
that for the inflated or imaginary production figures, no
revenue expenditure is incurred and therefore, the cost will
obviously be less.
Coal company officials and particularly the top brass,
are extremely concerned about this problem which has
strict legal implications.
Yet, instead of following a scientific approach, most
coal companies follow the principle of Inspector-Raj which
centres on sending a coal measurement team to nab the
culprit, often forgetting that the investigation team might
themselves be lured by the prospect of big money.
Over-reporting leads to a situation where the coal
production in the month of March goes up exponentially and
come April, it comes down very sharply, to 50 percent or even
less.
From this, one can safely conclude that other set of
machineries being the same, the sudden down slide in
production simply means that under-reporting is taking place
to make up for the over-reported production in the month of
March.
Possible solutions
There is not one, but definitely a number of solutions in sight,
if Coal India and the other coal companies are really willing
about it. It is worth noting that this menace is well known to
the top brass of the companies, including the ministry, and yet
it is not getting solved even though the methods are indeed
very simple. There is actually no need to send hundreds of
measurement teams to check this menace.
Most of the production from Coal India is from opencast
mines and it is in this category that over-reporting is most
prevalent. In order to stop this menace, there are several
solutions as listed below:
1. The coal companies can attempt to change the entire
reporting system. The entire dispatch of coal should be
treated as production and the reporting system can be
changed accordingly. Once dispatch is done, there cannot
be any doubt about the authenticity of the coal stock.
2. The stock should arrive from the in-situ measurements
taken by modern survey instruments, as tentative stock for
the purpose of financial accounting.
3. All opencast projects are being surveyed every month and
every quarter. The coal and overburden removed every
month can be measured scientifically from the plan and
sections made every month by modern survey instruments
and software that will calculate coal and OB extracted.
This will then be taken as tentative stock which will be the
actual in-situ stock of coal (bench coal) removed minus the
actual dispatch.
Since every month the survey is done and plotted in the
computer, the record will be available both in the computer
COAL INSIGHTS 58 October 2010

Expert Speak
and in a hard copy format as well. It will certainly be
better if we invest money on modern survey instruments,
computers, printers and other requisite software, as and
when needed.
4. There are many other ways to check over-reporting,namely
the consumption of diesel. It is known that more production
leads to more diesel consumption. Therefore, a sudden
spurt in production without proportionate increase in
diesel consumption pattern surely means over-reporting.
Again, use of modern software like PLANTCARE or
many others available off the shelf, which will not only
provide diesel consumption details, but also give other
useful figures such as spares consumed and availability
and utilisation of HEMM, will also prove useful in this
direction.
Permanent remedy
As a permanent remedy, coal companies can provide a few
modern survey instruments, along with necessary software
and computerised large printers (the cost of each will be
around `10 lakhs) to every opencast project.
One can also ask the colliery manager/surveyor to send
the plans and sections every month to the chief of survey of
the coal company involved, by email.
The chief of Survey at the headquarters, on the other
hand, shall provide the management with the calculated coal
extracted which can then be reconciled with the dispatch and
after deduction of dispatch, tentative stock can be calculated
then and there itself at the headquarters.
Change the work culture
If, however, the problem of over-reporting is to be weeded
out completely, the companies should opt for a sea-change in
their work cultures itself. This will involve major changes in
the performance evaluation of executives concerned based on
the dispatch of coal and not on production, and secondly, the
availability and utilisation of equipment, and not production
figures,
Instead of daily monitoring of production, daily monitoring
of dispatch and availability and utilisation of HEMM should
be carried out by the GM/CGM of the coal concerns. They
can also utilise quarterly video photographs provided by area
office/sub-area office authorities, with regard to the condition
of haul-roads and their maintenance.
In fact, all these points, if properly looked into, will
ultimately create a situation where there will be no need for
over–reporting, as the production will go up automatically.
The writer is former CGM of Coal India Ltd, former COO of Aditya Birla Group
and is present Managing Director of Priya Mining Consultancy and Services
Pvt Ltd
COAL INSIGHTS 59 October 2010

CORPORATE
Abhijeet Group focuses on core sectors
Arnab Mallick
Arun Gupta, CEO (Projects)
Abhijeet Group
growth strategies in these core sectors.
Excerpts:
Na g p u r - b a s e d
Abhijeet Group,
with interest in
diversified areas starting
from power to mining,
roads, cements, ferro alloys
and steel, is all set for a
massive growth in core
sectors including steel, ferro
alloys and power.
In a free-wheeling
discussion with Coal Insights,
CEO projects, Abhijeet
Group, Arun Gupta, shared
the company’s plans and
The group has planned major power plants in Jharkhand,
Bihar, Visakhapatnam and Maharastra. Please provide your
detailed plans for each state, status of the project, location
and investment.
The group is aggressively working upon its ‘Vision 15000’ for
expanding its power generation capacity to 15000 MW in the
states of Bihar, Jharkhand, Maharashtra and Andhra Pradesh.
In Jharkhand, the group is planning the 1080 MW ‘Matrishri
Usha Jayaswal Mega Power Plant’ of Corporate Power Ltd
(CPL) in Chandwa of the state. Order for four units of 270
MW has been placed on.Bhel, where DCPL is the detailed
engineering consultant. The first unit will become operational
by February 2012 and the second in April 2012, followed by
Unit Nos. 3 and 4 with a gap of three months respectively. The
civil work for the first two units has been fully completed. The
erection work of boiler-turbine-generator (BTG) is in progress.
As a part of expansion at the same site, one unit of 660 MW
has been planned in Phase-II. The order for that will be finalised
by November 2010 with a commissioning schedule of 39
months. The estimated project cost works out to `10,000 crore.
In Bihar, we are planning a 3960 MW (6 x 660 MW) power
plant of JAS Infrastructure Capital Ltd (JICPL) in Banka
district of the state. Fichtner Consultancy Engineering (P) Ltd.
has been appointed as owner’s detail engineering consultant
for this super critical thermal power plant. The acquisition of
required land for the project is almost done through direct
negotiations. All statutory clearances for the project have
already been obtained. Financial closure for the 2 x 660 MW
has been achieved and discussions are at a final stage for
placing the BTG package. The ‘Zero Date’ of Units 1 & 2 will be
January 1, 2011 with a commissioning schedule of 39 months
and 42 months respectively.
The financial closure for the Unit Nos. 3 and 4 is in an
advanced stage and the ordering for the critical equipment
will be completed by March 2011. The estimated project cost
works out to be `22,250 crore. Global Powmin Ltd., a group
company, has envisaged another project of 2640 MW (4 x 660
MW) in Nawada district of Bihar. The preliminary activities,
viz. submission of application for various statutory clearances,
fuel supply agreement and land acquisition activities, etc.
have already been initiated. The estimated project cost works
out to be `15,000 crore.
In Maharashtra, a 271 MW power plant is being set up by
Abhijeet MADC Nagpur Energy Pvt. Ltd (AMNEPL) for the
Multimodal International Hub Airport at Nagpur (MIHAN).
The project comprises 4 x 61.5 MW thermal along with 25 MW
diesel generator units. The commissioning activities of the
project have already been initiated. The estimated project cost
works out to be `900 crore.
A 300 MW (2 x 150 MW) power plant of Kaizen Power Ltd is
being set up near Vishakhapatnam of Andhra Pradesh. DCPL
has been appointed as owner’s detail engineering consultant
for the captive power plant. The estimated project cost works
out to be `1650 crore. Apart from the above, as a responsible
corporate, the group is venturing into eco-friendly sources
of energy generation. The 24 MW Balasone-Stage-II hydro
Project, and biomass projects with 10 MW capacities each at
Burdhaman, Murshidabad and East Midnapore districts of
West Bengal are just a few of them.
By when do you expect the power plants to get commissioned
Commissioning activities of the 271-MW MIHAN project is
already underway and the full capacity will be achieved by
February 2011. All the units of 1080 (4 x 270 MW) Matrishri
Usha Jayaswal Mega Power Plant are set to be commissioned
by the end of year 2012. The rest of the projects, which are
under various stages of execution, are scheduled to be
commissioned during the first half of the Twelfth Plan.
What will be the phase-wise coal requirement for these
power plants
For the MIHAN project we will require 1.5 million tons of
coal per annum, for which the coal linkage has already been
awarded by the Ministry of Coal. For CPL’s project, coal
requirement will be met through the coal linkage and the total
coal requirement will be approximately 5.5 million tons per
annum (mtpa). For JICPL, the coal requirement for Phase-I
will be about 4.5 to 5.5 mtpa.
The group has also initiated development activities for its
power venture in West Bengal. Can you provide the details
COAL INSIGHTS 60 October 2010

CORPORATE
We have already commissioned a 25-MW power plant in
Durgapur recently. We also did a lot of preliminary work for
setting up an integrated steel project of 2 mtpa along with
captive power project. However, it could not be happen due to
other reasons such as raw materials and land acquisition. We
will take this project forward at an appropriate time, when the
situation becomes conducive. At the moment we are mainly
focusing on the renewable energy based projects in the state.
How much of the power produced will be sold and how
much will be used for captive consumption
Most of our projects are Independent Power Plants (IPPs)
and the power generated will be sold to bulk purchasers.
Necessary agreements are already in place for the same. As
there is no end use plant, there will be no captive consumption
other than the power plant auxiliaries.
Indonesian cos evince interest in Nalco JV
Coal Insights Bureau
National Aluminium Company’s (Nalco) $4-billion
Indonesia aluminium project has received a boost
with four Indonesian coal majors showing interest
in a joint venture with the company for the project. Nalco has
received responses from four Indonesian coal companies –
MEC, Bumi Murau Coal, Energy Indonesia and Param Dwi
Jaya – to its expression of interest (EoI) tenders. Nalco had
floated tenders in August, which closed on September 30,
2010. Nalco will now evaluate the technical specifications of
the bids and short-list the firms.
According to senior officials of the company, Nalco
will ask the companies to submit the financial bids if they
meet all conditions. Nalco will be an equity partner in the
coal mining operations, officials said, adding that after the
scrutiny of technical and financial bids, talks will be held
with the selected party in this regard. But the extent of
shareholding will depend on the total volume of production
from the mine, volume required by Nalco and the valuation
of the asset. The finalisation of the JV partner will be followed
with preparation of a detailed project report (DPR) for the
venture. The JV agreement is a precursor to the DPR as this
will provide a clear picture on the cost to be borne towards
procurement of coal and transportation.
With a debt equity ratio of the `18,000 crore-project
being pegged at 70:30 and Nalco intent on having at least a
50 percent stake in it, the equity exposure of the company
is estimated at around `2700 crore. After the JV agreement
and finalisation of DPR, the company will seek the approval
of its board and the government for equity investment
and approach foreign financial institutions for financing
the project. The debt component at `12,400 crore being
a sizeable amount, the company will seek international
consortium financing.
The company had invited EoIs from coal companies
which have a minimum 500 million tons (mt) of coal
reserve with some developed infrastructure like road and
port connectivity. Nalco proposes to set up a 0.5-mt per
annum aluminium smelter and a 1250-MW coal-based
thermal captive power plant in East Kalimantan province in
Indonesia at an estimated investment of $4 billion. Alumina
of 1 mt per annum will be imported from India in bulk
shipment through sea route.
The other requirements are fresh water sources, 500
hectares of non-forest and non-litigation land within
3 to 4 km of the mines for setting up the plant, besides
preparedness of the company to start production of 10
million tons per annum coal from 2014 for the next 10 years.
Nalco needs 8-10 million tons per annum (mtpa) of thermal
grade coal, 4-5 mtpa of which is for its 1250-MW pit head
captive power plant (CPP) for East Kalimantan project
and rest for its energy requirements elsewhere. Nalco has
already opened an office in Jakarta, the capital of Indonesia,
to expedite the project activities.
The company has set an ambitious target of achieving
an annual turnover of `25,000 crore by 2020, giving a major
thrust to diversification and capacity expansion. Meanwhile,
the company has also sought coal blocks in Orissa and is
ready to establish a power plant with a capacity of up to
4000 MW if granted proper linkages.
Besides proposing to set up two independent thermal
power projects (IPPs) in Orissa, Nalco is ready to establish
a nuclear power plant in Gujarat as part of its plan to enter
the energy sector in a big way. The company has already
signed a memorandum of understanding (MoU) with
the Nuclear Power Corporation of India Ltd (NPCIL) for
setting up a nuclear power plant as a joint venture. The
central government has accorded approval for a 1400-MW
project comprising two 700-MW units.
In addition, the Navaratna PSU plans to set up a super
critical thermal power plant of 1980-MW capacity (3x660
MW) in Dhenkanal district, along with another IPP. The
company is also keen to enter into a strategic partnership
with Orissa Mining Corporation (OMC) and Orissa Hydro
Power Corporation (OHPC) for developing coal blocks to
set up power plants. Plans are also afoot to set up a joint
venture cement plant for effective utilisation of fly ash
generated from the company's captive power plant (CPP)
at Angul.
COAL INSIGHTS 61 October 2010

CORPORATE
Sandvik installs its first primary
gyratory crusher
Coal Insights Bureau
Sandvik Mining and Construction, a
unit of Sweden-based Sandvik Group,
has installed its first primary gyratory
crusher, a CG820, in a record time of only 18
days, at the iron ore mine of Tata Steel Ltd at
Noamundi, a company official said.
“This is the quickest know time for
replacement of an old crusher, including
total installation of a new primary gyratory
crusher,” the Regional Product Line Manager,
Mine Crushing, Sandvik Asia, Avijit Paul,
said.
The 18 day-period of installation
comprised dismantling the old crusher and
two feeders, assembly and installation of the
gyratory crusher, erection of apron feeders,
installation of VFD drive and complete
automation, Paul said.
A replacement and installation of this size
usually requires a minimum time of 30 days,
he claimed.
The crusher was supplied by Sandvik Mining and
Construction for the processing of ore with a maximum feed
size of 1200 mm (47.2 inches) and capacity up to 3500 mtps
(3858 stph).
The CG820 primary gyratory crusher replaced a Fuller
Trailor primary gyratory crusher in the plant. The replacement
will lead to modernisation of the primary crushing stage,
increased capacity, large feed size intake and a more power
drive, Paul said.
According to him, Tata Steel chose Sandvik as supplier
due to its ability to present a technically superior design with
such features as spherical spider bearing,
hydraulic adjustment, secured concave liners,
hydraulic tank instrumentation system and
the unique Automative Setting Regulation
System.
“In addition, delivery time was one of
the key points in securing the order. The
installation time was the shortest recorded
at Tata Steel for a job of this magnitude,” he
added.
“The Sandvik CG820 primary gyratory
crusher supply will be a reference point of
major value, since it is the first crusher of this
type to be supplied by Sandvik and has been
supplied to the world-renowned company,”
Paul said.
Moreover, the overall job of dismantling,
installation and commissioning was a success
in terms of time, he added.
Sandvik is a global industrial group
with advanced products and world-leading
positions in selected areas – tools for metal cutting, equipment
and tools for the mining and construction industries, stainless
materials, special alloys, metallic and ceramic resistance
materials as well as process systems. The company has
representation in 130 countries with annual sales of nearly
SEK 72,000 million.
Sandvik Mining and Construction is a business area within
the Sandvik Group and a leading global supplier of equipment,
cemented-carbide tools, service and technical solutions for the
excavation and sizing of rocks and minerals in the mining and
construction industries.
COAL INSIGHTS 62 October 2010

CORPORATE
Cil in top league after ipo success
Coal Insights Bureau
Coal India Ltd (CIL) is aiming at a plum position among
the top 10 valued companies when its shares get listed
in the stock exchanges on November 4, a day ahead
of Diwali. In keeping with expectations, a panel of ministers
has finalised the offer price at `245 per share, paving the
way for the listing of the company’s shares in the Bombay
Stock Exchange and National Stock Exchange. There were all
indications that the government is likely to price the IPO at the
top end of the price range, raising about $3.5 billion.
India is selling stakes in around 60 firms over the next few
years, and the strong appetite for Coal India contrasts with
the sluggish demand for some of its recent offerings and adds
pressure on the government to price future deals attractively.
SCI keen on logistics JV with CIL
Tamajit Pain
State-owned Shipping Corporation of India (SCI) is
keen to forge an alliance with Coal India Ltd (CIL) for
transporting coal. The company hopes to have the JV
unit with Coal India Ltd and it is likely to be a 50:50
partnership, according to SCI chairman and managing
director S. Hajara. SCI had already inked a JV with SAIL
for acquisition of Panamax bulk carriers.
The joint venture will look into handling CIL’s coal
import requirements. Meanwhile, CIL’s tender for import
of coal would likely be issued after the initial public
offering gets over in November, according to its chairman
Partha S. Bhattacharyya. “We will finalise the import
tenders only after the IPO. We will issue the tenders
definitely this year. How much would be imported would
be finalised only during that time,” he said. According to
senior officials in the company, the coal major will import
around 6 million tons (mt) of coal this year and around 4
mt will be earmarked for NTPC Ltd.
Meanwhile, the government has approved selling its
10 percent stake in SCI and allowed it to raise 10 percent
fresh equity, paving the way for `1300-crore public issue
that is likely to hit markets by December. After the
issue government holding in SCI will come down from
80.12 percent to 63.75 percent. The timeline for the IPO
will be drawn up in consultation with the shipping and
divestment ministries and the funds generated will be
part-utilised for SCI's acquisitions. SCI has 28 vessels
on order and around 30 more vessels are to be ordered.
The last vessel in the series is expected to be delivered by
end-October 2010. With addition of this vessel, SCI's fleet
strength will go up to 75.
Coal India's IPO, the largest in the country's history, was
subscribed more than 15 times by close on October 21, with
most bids at the top end of the 225 to 245 rupees price range.
The four-day initial public offer of Coal India Ltd (CIL)
made history by generating bids worth `2,35,290 crore. It is
expected fetch the government over `15,000 crore, the largest
sum ever garnered in India through a share sale. The IPO,
which had a price band of `225-245 per share, generated total
demand for over 960.36 crore shares, though only 63.16 crore
equities were on offer. Individual investors and Coal India
staff will get a 5 percent discount on the offer price.
At this price, Kolkata-based Coal India, which accounts
for nearly 80 percent of coal output in Asia's third-largest
economy and is the world's largest coal miner, will be worth
$35 billion, ranking it seventh among India's listed firms.
The government sold 631.6 million shares in the IPO, which
received robust response from investors seeking exposure to
an economy growing at 8.5 percent.
The institutional order book was heavily oversubscribed,
with orders worth $27 billion from foreign investors. Those
funds poured in on top of record flows from overseas into
Indian stocks this year that recently pushed the rupee to a
25-month high. Coal India's IPO will surpass Reliance Power's
$3-billion listing in 2008 as India's largest new issue, and
comes to market amid a flurry of big deals in Asia. A dominant
position in a country that is heavily reliant on coal-fired power
and a valuation considered attractive relative to peers has
made Coal India a near must-own for investors.
Demand for coal is forecast to grow at 11 percent a year in
India, which aims to halve its peak-hour power deficit of nearly
14 percent over the next two years and triple its generation
capacity over the next decade. Coal India expects profits to
rise by 25 percent this fiscal year, helped by rising demand,
and has set aside $1.2 billion for overseas acquisitions in the
year to March 2011. It is currently evaluating proposals to buy
stakes in coal firms in the US, Australia and Indonesia.
Local and foreign brokerages estimated that Coal India
could see upside of roughly 30 percent from its IPO valuation
range, given its lower earnings volatility, a large undeveloped
resource base and potential to increase prices. Morgan Stanley,
Citigroup, Kotak Mahindra Capital, Enam Securities, Deutsche
Bank and Bank of America-Merrill Lynch are managers on the
offer. The government has sold 10 percent of its stake in the
world's largest coal producer through the public offer. Prior to
the IPO, CIL was a fully government-owned entity.
CIL is the largest coal producer in the world, with 64
billion tons of reserves as of April 2010. However, CIL will not
receive any proceeds from the offer and all proceeds will go
to the selling shareholder (GoI). Post issue the government’s
stake will come down to 89.99 percent.
COAL INSIGHTS 63 October 2010

CORPORATE
Ntpc’s first nuclear power plant
likely by 2013-14
Coal Insights Bureau
The National Thermal Power Corporation Ltd (NTPC),
Asia’s largest power generator, is expected to start its
first nuclear power plant along with Nuclear Power
Corporation of India Ltd (NPCIL) by 2013-14 with a capacity
of around 1400 MW, a top official of the company said.
The company is also aiming to become the largest and best
power generator in the world and is also open to opportunities
to acquire running power plants abroad with fuel linkages.
“Two possible projects have been identified. I can only
share the information that the possible sites are in Haryana
and Madhya Pradesh. We will acquire one of these quickly,
maybe by 2013-14. It may have 2 x 700 MW capacity,” NTPC’s
newly appointed chairman and managing director, Arup Roy
Choudhury, said in October.
NTPC had singed a Memorandum of Understanding
(MoU) with NPCIL in January 2009 to form a joint venture
for setting up nuclear power projects with capacity of about
2000 MW. This meant that a joint venture company with 51
percent stake of NPCIL and 49 percent stake of NTPC was to
be formed for this purpose.
The power PSU had, in consultation with the Power Grid
Corporation of India Ltd (PGCIL), zeroed in on certain sites
for the proposed nuclear plant and a final decision would be
taken on the issue after securing the formal approval of the
Department of Atomic Energy (DAE).
NTPC has formed a Nuclear Power Cell headed by officers
trained at the Bhabha Atomic Research Centre (BARC) for
building capacity in this field. NTPC, which has an installed
capacity of over 32,000 MW from all sources of energy, plans
to raise this capacity to 75,000 MW by 2017 through a mix of
thermal, hydel and nuclear power.
Meanwhile, the company is looking at changing its
strategy for setting up hydel power plants in view of the
setbacks encountered at Loharinag Pala. “There is a re-think
but not in terms of not doing it any more. Rethinking is about
strategy. How do we avoid a situation where we get surprises
Loharinag Pala was a surprise,” Choudhury, who took charge
on August 31, said.
Incidentally, a Group of Ministers (GoM) had scrapped the
company’s 600 MW Loharinag Pala project on Bhagirathi river
in Uttarakhand which was a source of contention for religious
and environmental reasons.
The project was uncertain as the government first
suspended the work and later resumed work citing huge
financial costs. More than Rs 700 crore was already spent
when the project was scrapped.
Financially, it did not affect NTPC as the Centre
has committed to
compensate the
company, Choudhury
said. But what did
prove costly was the
amount of time and
energy wasted on the
project after which the
company was forced to
scrap it, he added.
Strategy
The company aims to
become the largest and
best power generator
in the world, the CMD
said, adding, “We are Arup Roy Choudhury, CMD NTPC
already the best in
capacity utilisation. But we are not the best globally. We are
number two or three in some aspect or the other,” Choudhury
said in an interview to a newspaper.
With just 700 unit per capita consumption, the country sees
enough possibility for growth and be the best. “Secondly, we
have to be more professional in costing and design. We must
have the best of both. You will find us competitive against the
private sector in the tariff-based (bidding) regime,” the CMD
said.
Explaining the point, he said the company is looking at two
basic components of competitiveness. One is the engineering
department, where NTPC is among the biggest and the oldest.
“We have to look at more efficient engineering rather than reengineering,”
he said.
There have been technological developments and with
change in time, NTPC has to see whether that can reduce the
company’s costs and make for more efficient designs and for
this a team is already on the job, Choudhury said.
The second point is how to reduce cost of fuel, even if it is
imported. “We are at present importing coal through STC or
MMTC, but we hope to do it ourselves going forward and that
should make it more cost-effective,” he added.
Overseas ventures
Running power plants abroad with fuel linkages is another
line of thinking. “Why can’t NTPC buy power plants in Europe
or Australia with good coal linkages” he said. Ownership in
mines abroad too are a possibility, Choudhury added.
COAL INSIGHTS 64 October 2010

CORPORATE
Banks not tapped for captive block funds
Coal Insights Bureau
Although a number of companies have been allotted
captive coal blocks and they need funds to develop the
same, surprisingly no one has approached the bankers
for funds so far. According to the chairman and managing
director of state-run Indian Bank, T.M. Bhasin, “so far they
have not approached us. We will decide, if they approach.”
Another senior official of a state-run bank said Coal
India, which produces more than 80 percent of the total coal
production in the country, is flush with funds and does not
need finance for its projects.
The captive miners also partner with leading miners for
their project and do not need initial funding for the same, he
said. However, Indian bank advances to the steel industry are
likely to rise in the coming days as the industry is likely to do
well, leading bankers felt.
“Our current portfolio in the steel industry is around `2500
crore, mainly with Integrated Steel Plants. It is doing well. We
are quite bullish on the steel industry and expect the portfolio
to rise,” Bhasin told Coal Insights.
He said if the economy is growing at the rate of around
9 to 10 percent, then “steel and cement sectors will naturally
do well”. “With focus of the government on infrastructure,
both steel and cement sectors are likely to grow,” he added.
Meanwhile, it is becoming increasingly difficult to obtain
international funding for coal-fired projects.
The US government has been stepping up pressure on the
World Bank not to fund coal-fired power plants in developing
countries, a move which was being opposed by developing
countries like India and China. Recently, Bucyrus International
Inc’s sale of coal-mining equipment for a power plant in India
won US Export-Import Bank financial approval, advancing a
project that was rejected in June amid environmental concerns.
The government-backed lender agreed to distribute $900
million in loan guarantees for Reliance Power Ltd to buy from
US companies in building a coal-fired power plant.
Bucyrus had lobbied US lawmakers to revive the deal that
was initially turned down after groups such as the Sierra Club
said that funding would undercut the Obama administration’s
pledge to limit export financing on projects that might harm
the environment. Reliance won preliminary environmental
approval in July after giving the bank a pledge to cap the
plant’s carbon emissions.
Reliance Power of Mumbai was awarded the project to
build a power plant in Sasan, central India, in July 2007, using
coal that has been mined nearby. The company expects to have
1320 MW of capacity at the plant by March 2012. Environmental
groups had alleged that the annual estimated amount of
emissions from the Sasan plant was more than double the
level from all projects funded by the US-government-backed
lender last year.
COAL INSIGHTS 65 October 2010

Logistics
Freight rates improve strongly in end-Oct
Sarbani Haldar
Dry bulk freight rates were strongly volatile throughout
September on the back of varied vessel chartering
activities. Though rates improved somewhat during
the beginning of the month, they later declined on the back of
low chartering activity as a result of less cargo to be shipped.
However, towards the end of the month, rates unexpectedly
improved, mainly in the Capesize segment, due to the rising
demand for iron ore from China. Over the next few weeks,
the rates remained at nearly the same level with the Capesize
segment witnessing very strong improvements during the
initial days of October.
With iron ore inventory in the country being low, it is likely
that China would be importing a lot of iron ore for the fourth
quarter. In the last week of October too, iron ore producer Vale
secured more than 12 vessels. Around the end of the same
week, the Capesize freight rates on the Australia to China
route were around $11.75 to $12 per ton, while freight rates
in the Brazil to China route were around $31 to $31.5 per ton.
The sentiments in this region are also upbeat at the moment
as several vessels continue to be fixed from Port Hedland and
Dampier. As per market sources, rates in the South America
to China route climbed steadily, with reports of freight rates
being fixed at $34 per ton at Itaqui/Qingdao.
China’s iron ore imports would continue to pull up rates in
the Capesize segment in the coming days as well, as presently
the iron ore stocks in the country are low and domestic rates
are also high thereby making imports favourable. Besides,
keeping in mind the winter season, demand for thermal
coal from this region too, would improve further thereby
supporting the rates.
However, rates in both the Supramax and the Panamax
segments have cooled down to some extent during this week.
Much of the weakness in the Supramax rates was owing to less
trading activity in the India to China route during this week.
4500
4000
3500
3000
2500
2000
1500
1000
2-Aug 11-Aug 20-Aug 29-Aug 7-Sep 16-Sep 25-Sep 4-Oct 13-Oct 22-Oct
Baltic Dry Index
Baltic Supramax Index
Source: Insights Research
Baltic Exchange Index
Baltic Capsize Index
Baltic Panamax Index
Tex Report data has revealed that spot freight rates in the
Brazil to China route have improved since September. For
transporting 1,60,000 tons of iron ore in a Capesize vessel
from Tubarao, Brazil to Qingdao, China, the freight rate had
been fixed at $30.60 per ton for a laycan scheduled for October
30 to November 5. Earlier, in the same route, in September,
for transporting the same quantity of iron ore for the same
destination, the freight rate was $29.50 per ton for a laycan
scheduled for October 1 to October 10.
Rates in the Western Australia to China route have also
behaved in the same manner. According to Tex Report data,
spot rates for transporting 1,70,000 tons of iron ore from Port
Hedland, Western Australia to Qingdao, China, the freight
rate was $11.80 per ton for a laycan scheduled for November
1 to November 10. Earlier, in the same route, for transporting
the same quantity from Port Hedland, Australia to Qingdao,
China, the freight rate has been fixed at $10.15 per ton for a
laycan scheduled for October 6 to October 15.
Although the present market conditions would be
conducive for improvement in the Capesize rates, the large
supply of new building vessels coming on stream during this
week could be a source of weakness in rates. As per market
sources, 20 new vessels have been handed over to the owners
as compared to 11 vessels being sent to the scrapyard. Going
by the way the dry bulk market is poised, Capesize rates could
see some improvement due to the iron ore demand, provided
China continues to source ore. Keeping everything in mind,
rates might just continue to hover at the present levels in the
coming week with a minor upward or downward correction.
Earlier, towards the end of September, rates in the Capesize
segment rose due to improving demand for chartering vessels
ahead of the long Chinese holidays. Spot rates in the Brazil to
China route were reported to be around $28 per ton. In the
Western Australia to China route, the Capesize fixture rates
stood at $10.81 per ton.
The increasing iron ore prices also supported rates to
a large extent. Besides, the rates were buoyed by growing
expectations of firm demand from Chinese steel mills, which
have been asked to resume production after a governmentimposed
shutdown. As per available information, several
mills in China’s steel production hub of Hebei province,
which have been either shut down or told to cut output by as
much as 70 percent as part of Beijing’s power-saving drive,
have been directed to restart production.
Another factor affecting rates in India, is the ban on importing
of iron ore from Karnataka, which has put pressure on the supply
of ore, thereby pulling up rates. Earlier in September, reports
of China taking measures to shut down obsolete steel mills
and other plants together with its power conservation drive,
weighed down on the market sentiments, which in turn pulled
COAL INSIGHTS 66 October 2010

Logistics
down rates and increased vessel supply. Going
by the way the market is poised right now,
rates might improve. There are many cargo
requirements building from the US, Gulf and
ECSA which should be good news.
But, demand for iron ore is likely to slow
down in some segments which might result
in rates to stabilise. In the long term, rates
would improve as China and other European
countries would be looking to replenish their
stocks before the end of the winter holidays.
On the whole, there is a strong chance that
rates might improve in the coming week.
Baltic Dry Index
The absence of sustained demand and low
interest in chartering vessels have resulted
in fluctuations in the freight rates which
were reflected in the way the Baltic Dry
Index (BDI) moved over the past one month.
But, rates have improved and are going
steady since the beginning of October. After
beginning on 2741 points on September 1, the
BDI improved to 2995 points on September
10. However, it displayed strong volatility
over the next few days and slid to 2452 points
on October 1, improving again to 2727 points
on October 22.
Much of the volatility in the BDI during
September was owing to high fluctuations
in the Capesize rates. The Baltic Capesize
Index (BCI) which began on 3643 points on
September 1 improved to 4024 points on
September 8. However, low demand from
China pulled down the Index over the next
few days and the BCI declined to its lowest
at 3104 points on September 23. Improving
demand for vessels later pulled up the BCI
to 3149 points on October 1 but it rebounded
strongly to record 4373 points on October 22.
The Baltic Supramax Index (BSI) too,
declined over the past one month. After
beginning on 2029 points on September
1, the Index improved to 2046 points on
September 10. Around the end of the month,
the Index slipped to 1843 points on October
1, rebounding later to 1894 points on October
8. However, it declined later to 1791 points
on October 22.
The Baltic Panamax Index (BPI) which had
began on a low of 2955 points on September
1 improved to 3396 points on September 9.
However, it declined later to 2412 points on
October 1 and slid further to 2403 points on
October 8. It declined again to 2219 points on
October 22.
Railways traffic improves in Sept
Sarbani Haldar
Traffic movement by the Indian Railways has improved in September 2010 as
compared to the same period a year ago. For this month too, coal movement
by the Indian Railways strongly improved while traffic volumes for iron ore
and other cargoes remained low. During September 2010 the traffic movement
by the Indian Railways improved 2.35 percent as it moved 71.47 million tons
(mt) of freight traffic compared to 69.83 mt moved by it during the corresponding
period of the previous year. However, with regard to the traffic volumes moved
in August, the Railways witnessed a decline in its traffic in September. In August
2010, the Indian Railways had moved 74.20 mt of freight traffic.
According to the recent data published by the Indian Railways, during
September 2010, the total coal movement improved by 7.09 percent to 31.89 mt
as compared to 29.78 mt of coal moved by it during the corresponding period
of the previous year. Incidentally, the coal traffic movement by the Indian
Railways during the month has declined by 6.86 percent as compared to 34.24
mt of coal moved by it during August 2010.
The coal movement for the washeries witnessed the strongest improvement
of 33.33 percent to 0.12 mt as compared to 0.09 mt of coal moved during the
corresponding period of the previous year. Besides, coal movement for steel
plants improved 7.69 percent to 3.64 mt as compared to 3.38 mt moved during
the corresponding period of the previous year. Other than this, coal traffic
movement for public use improved 10.91 percent to 6.81 mt as compared to
6.14 mt moved during the corresponding period of the previous year.
Meanwhile, iron ore traffic moved by the Indian Railways continued
to decline even for this month. As per the data, during September 2010, iron
ore movement by the Indian Railways declined by 20.14 percent to 8.92 mt
as compared to 11.17 mt moved by it during the corresponding period of the
previous year. During August 2010, iron ore movement by the Indian Railways
fell by a massive 23.56 percent to 9.41 mt. In terms of volumes, however, iron ore
movement by the Railways has declined. In September 2010, the Indian Railways
moved 8.92 mt of iron ore. Volumes of iron ore meant for exports, moved by the
Indian Railways, more than halved during September 2010 as compared to the
corresponding period of the previous year. As per data in September 2010, iron
ore meant for exports declined by 50.99 percent to 1.98 mt as compared to 4.04
mt moved by it during the corresponding period of the previous year.
However, pig iron and finished steel movement by the Indian Railways
improved by 6.43 percent to 2.65 mt in August 2010, as compared to 2.49 mt
moved by it during the corresponding period of the previous year. Besides,
movement of raw material for steel plants, except iron ore, have improved 3.13
percent to 0.99 mt as compared to 0.96 mt moved by it during the corresponding
period of the previous year. In September 2010, cement movement by the Indian
Railways increased 4.03 percent to 7.23 mt as compared to 6.95 mt moved
during the corresponding period of the previous year.
Container service movement during September 2010 has witnessed a
massive improvement of 29.43 percent to 3.43 mt as compared to 2.65 mt
moved during the corresponding period of the previous year. Other goods
movement by the Indian Railways during September 2010 declined by 8.70
percent to 5.14 mt as compared to 5.63 mt moved during the corresponding
period of the previous year. Meanwhil,e the total traffic movement by the
Indian Railways during the period April 1, 2010 to September 30, 2010
improved 2.34 percent to 438.20 mt as compared to 428.16 mt moved during
the corresponding period of the previous year.
COAL INSIGHTS 67 October 2010

Power sector update
ALL INDIA ENERGY GENERATION,
GENERATION (GWH)
Category
Monitored
Capacity
(MW)
Target
April 2010 to
March 2011
PROGRAMME
ACTUAL
September 2010
ACTUAL SAME
MONTH (2009-10)
% OF
PROGRAMME
% OF LAST
YEAR
PROGRAMME
THERMAL 106135.92 690856.50 54288.43 47077.92 48767.10 86.72 96.54 329362.08
NUCLEAR 4560.00 22000.00 1760.00 2008.99 1626.73 114.15 123.50 10342.00
HYDRO 37328.40 111352.00 12880.76 14250.97 12155.37 110.64 117.24 64591.81
BHUTAN IMP 0.00 6548.00 1112.90 977.44 929.43 87.83 105.17 4739.19
TOTAL 148024.32 830756.50 70042.09 64315.32 63478.63 91.82 101.32 409035.08
NORTHERN REGION
THERMAL 25505.26 171704.41 13854.65 1292.03 12114.26 81.50 93.21 80746.12
NUCLEAR 1620.00 8553.00 687.00 667.46 298.95 97.16 223.27 4000.00
HYDRO 13678.25 51044.00 5615.92 7258.10 5353.54 129.24 135.58 33813.00
TOTAL 40803.51 231301.41 20157.57 19217.59 17766.75 95.34 108.17 118559.12
WESTERN REGION
THERMAL 37026.31 238109.18 18464.99 16810.93 18057.52 91.04 93.10 113374.11
NUCLEAR 1840.00 8601.00 723.00 826.96 839.09 114.38 98.55 3972.00
HYDRO 7392.00 14193.00 1655.40 1984.00 1713.62 119.85 115.78 6373.40
TOTAL 46258.31 260903.18 20843.39 19621.89 20610.22 94.14 95.20 123719.51
SOUTHERN REGION
THERMAL 22970.80 148159.93 11341.78 10340.94 10439.15 91.18 99.06 72587.96
NUCLEAR 1100.00 4846.00 350.00 514.57 488.69 147.02 105.30 2370.00
HYDRO 11294.45 31882.00 3631.34 3456.54 3497.48 95.19 98.33 16144.88
TOTAL 35365.25 184887.93 15323.12 14312.05 14425.32 93.40 99.21 91102.84
EASTERN REGION
THERMAL 19775.05 128594.90 10273.92 8280.24 7814.74 80.59 105.96 60577.32
HYDRO 3847.70 9988.00 1458.16 969.33 1126.60 66.48 86.04 5763.21
TOTAL 23622.75 138582.90 11732.08 9249.57 8941.34 78.84 103.45 66340.53
NORTH EASTERN REGION
THERMAL 858.50 4288.08 353.09 353.78 341.43 100.20 103.62 2076.57
HYDRO 1116.00 4245.00 519.94 583.00 464.14 112.13 125.61 2497.32
TOTAL 1974.50 8533.08 873.03 936.78 805.57 107.30 116.29 4573.89
Provisional based on actual-cum-assessment
COAL INSIGHTS 68 October 2010

Power sector update
PROGRAMME AND PLANT LOAD FACTOR
PLANT LOAD FACTOR %
APRIL 2010 – September 2010 September 2010 APRIL 2010 - September 2010
ACTUAL
ACTUAL SAME
PERIOD (2009-10)
% OF
PROGRAMME
% OF LAST
YEAR
PROGRAMME
ACTUAL
ACTUAL SAME
MONTH (2009-10)
PROGRAMME
ACTUAL
ACTUAL SAME
PERIOD (2009-10)
317331.09 308928.98 96.35 102.72 69.46 63..88 71.35 71.60 72.02 75.75
10853.54 8816.18 104.95 123.11 54.81 61.19 54.84 52.80 54.19 48.72
65111.34 60599.02 100.80 107.45
4093.50 3889.89 86.38 105.23
397389.47 382234.07 97.15 103.96
78200.58 79043.04 96.85 98.93 70.91 64.97 75.23 70.62 75.44 82.36
3685.98 1581.74 92.15 233.03 62.77 57.22 35.19 59.92 51.81 30.52
35350.02 32833.34 104.55 107.67
117236.58 113458.12 98.88 103.33
111974.97 106540.16 98.77 105.10 70.14 63.67 76.41 71.32 71.04 75.88
4531.28 4395.70 114.08 103.08 54.57 62.42 63.34 49.15 56.07 54.39
7625.47 6926.35 119.65 110.09
124131.75 117862.21 100.33 105.32
70876.28 70298.77 97.64 100.82 71.64 67.57 73.09 78.71 78.71 83.39
2636.28 2838.74 111.24 92.87 44.19 64.97 61.70 49.06 54.57 58.76
14410.03 13454.65 89.25 107.10
87922.59 86592.16 96.15 101.54
54225.46 50929.46 89.51 106.47 65.46 60.09 58.94 67.50 64.43 62.75
5250.20 5303.03 91.10 99.00
59475.66 56232.49 89.65 105.77
2053.80 2117.55 98.90 96.99 0.00 0.00 0.00 0.00 0.00 0.00
2475.62 2081.65 99.13 118.93
4529.42 4199.20 99.03 107.86
Source: Central Electricity Authority
COAL INSIGHTS 69 October 2010

Power sector update
LIST OF UTILITY/ORGANISATION WHOSE
PLF ACHIEVEMENT WERE LOWER THAN THE
RESPECTIVE PROGRAMME DURING Sept 2010
Name of Power Stn.
Sector
PLF in %
Programme Achievement Shortfall
I. CENTRAL
BADARPUR TPS 87.47 61.82 25.65
FARAKKA STPS 87.24 76.05 11.19
KAHALGAON TPS 79.00 67.00 12.00
RIHAND STPS 95.14 82.28 12.86
SIMAHADRI 92.08 48.28 43.80
TALCHER STPS 92.55 70.85 21.70
RAMAGUNDAM STPS 91.45 89.77 1.68
TANDA TPS 97.22 84.01 13.21
UNCHAHAR TPS 80.03 74.28 5.75
VINDHYACHAL STPS 86.95 82.25 4.70
NEYVELI TPS-1 68.75 68.50 0.25
MUZAFFARPUR TPS 25.25 7.68 17.57
BOKARO'B' TPS 51.37 39.32 12.05
CHANDRAPURA(DVC) 44.00 41.77 2.23
DURGAPUR TPS 81.70 68.82 12.88
II. STATE
IPGPCL 76.13 24.34 51.79
PSEB 85.24 61.23 24.01
RRVUNL 73.10 62.68 10.42
UPRVUNL 59.80 50.39 9.41
GSECL 73.51 57.11 16.40
GMDCL 80.56 56.38 24.18
MAHAGENCO 68.84 40.75 28.09
APGENCO 63.48 62.93 0.55
MPPGCL 57.17 40.13 17.04
KPCL 68.69 43.92 24.77
TNEB 77.49 63.76 13.73
BSEB 6.72 0.00 6.72
TVNL 81.02 70.49 10.53
DPL 72.26 19.31 52.95
JSEB 36.62 13.00 23.62
WBPDC 67.23 52.28 14.95
OPGC 92.00 88.00 4.00
Source: Central Electricity Authority
SECTOR-WISE PLF(%) PROGRAMME
AND ACHIEVEMENTS (THERMAL)
September 2010 April 2010 - September 2010
Prog. (%) Ach. (%)* Prog. (%) Ach. (%)*
Central Sector 76.13 75.86 78.52 82.83
State Sector 68.32 53.25 69.49 62.23
Pvt.UTL Sector 84.20 77.89 83.43 82.94
All India 69.46 63.88 71.60 72.02
* Provisional based on actual-cum Assessment
Source: Central Electricity Authority
Capacity Addition & Generation During Sept 2010
Description
September 2010 September 2009
Target Achivement Target Achivement
CAPACITY ADDITION (MW)
THERMAL 2521.50 500.00 509.00 250.00
HYDRO 49.50 242.00 0.00 0.00
NUCLEAR 0.00 0.00 0.00 0.00
TOTAL 2571.00 742.00 509.00 250.00
GENERATION (MU)
THERMAL 54288.43 47077.78 51360.89 48767.10
NUCLEAR 1760.00 2008.99 1527.00 1626.73
HYDRO 12880.76 14250.89 13114.00 12155.37
BHUTAN IMPORT 1112.90 977.44 1064.00 929.43
TOTAL 70042.09 64315.10 67065.89 63478.63
TARGET/ACHIEVEMENT IN CAPACITY
ADDITION (MW) DURING September 2010
ACHIEVEMENT IN GENERATION (MU)
DURING September 2010
Source: Central Electricity Authority
ALL INDIA PLF (%) DURING September 2010
Source: Central Electricity Authority
COAL INSIGHTS 70 October 2010

Power sector update
CAPACITY ADDITION FOR September 2010 AND APRIL 2010 - September 2010 (MW)
Schemes Status of Schemes Target 2010-11
September 2010 April 2010 - September 2010 Deviation
Target Achievement Target Achievement (+) / (-)
Central 6015.00 1000.00 500.00 2240.00 1115.00 -1125.00
Thermal
State 6549.20 750.00 0.00 3137.20 1271.00 -1866.20
Pvt. 6191.00 771.50 0.00 4078.50 2098.00 -1980.50
Total 18755.20 2521.50 500.00 9455.70 4484.00 -4971.70
Central 649.00 0.00 0.00 120.00 120.00 0.00
Hydro
State 356.00 0.00 50.00 223.00 139.00 -84.00
Pvt. 461.00 49.50 192.00 241.50 192.00 -49.50
Total 1466.00 49.50 242.00 584.50 451.00 -133.50
Nuclear
Central 1220.00 0.00 0.00 0.00 0.00 0.00
Total 1220.00 0.00 0.00 0.00 0.00 0.00
Central 7884.00 1000.00 500.00 2360.00 1235.00 -1125.00
All India
State 6905.20 750.00 50.00 3360.20 1410.00 -1950.20
Pvt. 6652.00 821.00 192.00 4320.00 2290.00 -2030.00
Total 21441.20 2571.00 742.00 10040.20 4935.00 -5105.20
Source: Central Electricity Authority
PROGRAMME AND ACHIEVEMEMT OF ENERGY GENERATION (MU)
Gen. Sch.
Target
September 2010 April 2010 - September 2010
Sector-Wise (2010-11)
Programme Achievement* % Achieved Programme Achievement* % Achieved
Thermal
Central Sector 269999.11 21502.68 20231.88 94.09 130767.46 133900.09 102.40
State Sector 317092.64 24783.46 18595.49 75.03 151129.08 130328.19 86.24
Pvt. IPP Sector 76520.57 5635.90 6035.74 107.09 33188.73 38870.89 117.12
Pvt. UTL Sector 27244.18 2366.39 2214.67 93.59 14276.81 14231.78 99.68
Total 690856.50 54288.43 47077.78 86.72 329362.08 317330.95 96.35
Hydro
Central Sector 41642.00 4611.11 6570.62 142.50 26840.60 29296.80 109.15
State Sector 63990.00 7654.01 6977.38 91.16 34011.24 32172.97 94.60
Pvt. IPP Sector 4092.00 491.24 587.16 119.53 2937.57 2925.64 99.59
Pvt. UTL Sector 1628.00 124.40 115.73 93.03 802.40 715.85 89.21
Total 111352.00 12880.76 14250.89 110.64 64591.81 65111.26 100.80
Nuclear
Central Sector 22000.00 1760.00 2008.99 114.15 10342.00 10853.54 104.95
Total 22000.00 1760.00 2008.99 114.15 10342.00 10853.54 104.95
Bhutan Import 6548.00 1112.90 977.44 87.83 4739.19 4093.50 86.38
All India
Central Sector 333641.11 27873.79 28811.49 103.36 167950.06 174050.43 103.63
State Sector 381082.64 32437.47 25572.87 78.84 185140.32 162501.16 87.77
Pvt. Sector 109484.75 8617.93 8953.30 103.89 51205.51 56744.16 110.82
Total 830756.50 70042.09 64315.10 91.82 409035.08 397389.25 97.15
* Provisional based on actual-cum-Assesment Source: Central Electricity Authority
CAPACITY ADDITION TARGET &
ACHIEVEMENT (MW) APR 2010 - SepT 2010
ALL INDIA ENERGY GENERATION DURING
Apr 2010 - Sept 2010
Source: Central Electricity Authority
Source: Central Electricity Authority
COAL INSIGHTS 71 October 2010

Power sector update
POWER CUTS ON INDUSTRIES DURING August 2010
State/Region Energy Cut Demand cut
Northern Region
Chandigarh
Delhi
No Notified Power Cut
No Notified Power Cut
Haryana 0 to 0.875 MU/day on HT/LT industries on different days. 0 to 250 MW cut on HT/LT industries for different hours on different days.
HP
J&K
No notified power cut. But there is 3 hrs(from 18:30 hrs to 21:30 hrs) peak hrs restrictions on HT/LT industries.
No Cuts on essentail loads like Hospitals, Defence, PHE(Water Supplies), Irrigation etc. and on domestic,commercial and mixed load feeders that have 100%
consumer metering ; 9 Hrs and 30 minutes domestic,commercial and mixed load feeders with partial or no consumer metering ; 3 hours to 8 hours,depending on
system peak load demands and system constraints on Industrial Consumers in Organised Industrial Estates.
Punjab
Rajasthan
Uttar Pradesh
0.64 to 1.80 MU/day on HT/LT industries
No Notified Power Cut
No Notified Power Cut
600 MW cut on HT/LT industries. Restrictions timings 3 hrs (from 1830 to 2130
hrs). Upto two weekly off day on arc/induction furnaces and one weekly off day
general industry fed from feeders having predominant industrial load.
Uttarakhand 0 to 4.1 MU/day on HT/LT industries on different days. 0 to 90 MW cut on HT/LT industries for different hours on different days.
Western Region
Chattisgarh Nil Nil
Gujarat
All industries are allowed to run their units on all days of week and if they want to avail staggered holiday, then they will have to stagger on notified day only and
cannot avail as per their choice. All industries are required to keep their recess timings staggered.
Madhya Pradesh Nil Nil
Maharashtra Nil Nil
Goa Nil Nil
Southern Region
Andhra Pradesh
Karnataka
Kerala
Tamil Nadu
Puducherry
All EHT, HT and LT industries not to avail power except lighting load during peak hours (1830 hrs to 2230 hrs). However, there was load shedding of upto 998 MW
(5.96 MU for the month).It includes the power cut component also.
Nil; However, there was load shedding up to 900 MW (Total 298.6 MU for the month).
Nil; However, there was load shedding up to 200 MW during peak hours (Total
3.075 MU for the month)
20% cut on base demand for all HT industrial and commercial services under tariff I & III and 20% cut on energy for LTCT industrial and commercial services w.e.f.
27.05.10. All HT industrial and commercial consumers not to draw power from grid from 1800 hrs to 2200 hrs. There was load shedding of upto 2145 MW (Total
319.385 MU for the month). All welding sets irrespective of connected load should not work between 6 p.m. and 8:30 p.m.
There was load shedding of upto 42 MW (Total 2.37 MU)
Eastern Region
Bihar
Jharkhand
No Notified Cuts / Restrictions
No Notified Cuts / Restrictions
DVC Power cut to HT industries :NIL Power cut to LT industries :NIL
Orissa
No Statutory Cut
West Bengal
Power cut on HT industries is Nil.
Note: Although some states have reported “No Notified Power Cuts”, load shedding/restrictions are imposed on industries on day to day basis depending
upon availability of power vis-à-vis requirement.
COAL INSIGHTS 72 October 2010

Power sector update
Northern
WESTERN
SOUTHERN
EASTERN
List of critical Thermal Power Stations having critical coal stock of
less than 7 days (As on 30-09-2010)
1 Kota Import of coal during 2010-11 yet to commence.
2 Obra Due to less receipt of coal from CIL during the month of Sept 2010 i.e, 84 % of ACQ.
3 Rihand Due to less receipt of coal from CIL during the month of Sept 2010 i.e, 78 % of ACQ.
4 Singrauli Due to higher generation.
5 Anpara Due to less receipt of coal from CIL during the month of Sep., 2010 i.e, 94 % of ACQ.
6 Gandhi Nagar Due to higher generation.
7 Wanakbori Due to less receipt of coal from SECL during the month of Sept 2010 i.e, 68 % of ACQ.
8 Torrent Power AEC Due to higher generation.
9 Vindhyachal TPS Due to higher generation.
10 Korba East -V Due to higher generation.
11 Korba STPS Due to higher generation.
12 Dhanu Due to higher generation.
13 Paras Due to less receipt from CIL & delay in import of coal.
14 Ramagundem Due to higher generation.
15 Parli Due to less receipt from CIL & delay in import of coal.
16 Ennore Due to constraints in coal transportation from ports to power station.
17 North Chennai Due to constraints in coal transportation from ports to power station.
18 Tuticorin Due to constraints in coal transportation from ports to power station.
19 Kahalgaon
i) Due to inadequate coal availability in linked mine ECL (Rajmahal)
ii) Due to less receipt of coal because of transporting
20 Talcher STPS Due to higher generation.
21 IB Valley TPS Due to higher generation.
22 Mejia Due to Higher Turn around time of rakes between Raniganj and the power station due to law and order problems.
23 Bandel Due to delay in receipt of imported coal
24 Kolaghat TPS Due to less receipt from CIL & delay in import of coal.
25 Farakka Due to less receipt of coal because of transporting and unloading limitations
Source: Central Electricity Authority
COAL INSIGHTS 73 October 2010

Power sector update
POWER SUPPLY TO AGRICULTURAL SECTOR DURING September 2010
State
Average Hours of Supply
Northern Region
Chandigarh
24 hrs/day
Delhi
24 hrs/day
Haryana
Three Phase Supply: 9.30 hrs/day
HP
24 hrs/day
J&K –
–
Punjab
Three Phase Supply: 10.78 hrs/day
Rajasthan
Three Phase Supply: 4 hrs/day
Uttar Pradesh
Three Phase Supply: 10.44 hrs/day
Uttarakhand
Three Phase Supply: 21.40 hrs/day
Western Region
Chattisgarh Three Phase Supply: 18 hrs/day –
Gujarat
Only 8 hours power supply in staggered form in rotation of day and night is given to Agriculture. No supply during rest of 16 hours. Jyotigram Yojana 24 hrs.
Madhya Pradesh Three Phase Supply: 18:15 hrs/day Single phase Supply: 00:00 hrs/day
Maharashtra Three Phase Supply: 17 hrs/day Single phase Supply: 20 hrs/day
Goa
No restriction
Southern Region
Andhra Pradesh Three Phase Supply: 07 hrs/day. –
Karnataka Three Phase/ Single Phase Supply: 06 hrs/day No Supply: 12 hrs/day
Kerala
No Restrictions
Tamil Nadu Three Phase Supply: 9 hrs/day Single Phase Supply: 15 hrs/day
Puducherry
No Restrictions
Eastern Region
Bihar
About 18 hrs
Jharkhand
About 20 hrs
Orissa
About 24 hrs.
–
West Bengal
24 hrs; Average about 23 hrs
Source: Central Electricity Authority
TRANSMISSION LINES (PROG & ACHIV) Sept 2010
Fig. in ckt Kms
Voltage Level/
Sector
Prog.
2010-11
Prog. 2010-11
Incl. slipped
Sept 2010 Apr - Sept 2010
Prog. Achv. Prog. Achv.
+/- 800 kV HVDC
Central Sector 0 0 0 0 0 0
State Sector 0 0 0 0 0 0
TOTAL 0 0 0 0 0 0
+/- 500 kV HVDC
Central Sector 0 0 0 0 0 0
JV/Private Sector 0 0 0 0 0 0
TOTAL 0 0 0 0 0 0
765 kV
Central Sector 0 0 0 0 0 0
State Sector 0 0 0 0 0 0
TOTAL 0 0 0 0 0 0
400 kV
Central Sector 4408 7261 1088 502 2136 1094
State Sector 2233 2889 228 103 1300 1081
JV/Private Sector 2311 2365 373 62 1064 332
TOTAL 12515 1689 667 4500 2507
220 kV
Central Sector 168 481 69 56 201 72
State Sector 2936 5375 425 250 2419 2728
JV/Private Sector 30 192 6 349 86 358
TOTAL 6048 500 655 2706 3158
Grand TOTAL 18563 2189 1322 7206 5665
Source: Central Electricity Authority
SUB-STATIONS (PROG & ACHIV) SEPT 2010
Voltage Level/
Sector
Prog.
2010-11
Prog. 2010-11
Incl. slipped
Fig. in MVA/MW
Sept 2010 Apr - Sept 2010
Prog. Achv. Prog. Achv.
+/- 500 kV HVDC
Central Sector 0 0 0 0 0 0
State Sector 0 0 0 0 0 0
TOTAL 0 0 0 0 0 0
765 kV
Central Sector 0 0 0 0 0 0
State Sector 0 0 0 0 0 0
TOTAL 0 0 0 0 0 0
400 Kv
Central Sector 4725 5010 315 815 630 815
State Sector 5280 10320 845 630 5255 3780
JV/Private Sector 630 630 0 0 0 0
TOTAL 15960 1160 1445 5885 4595
220kV
Central Sector 0 650 0 100 300 400
State Sector 4500 11000 800 1640 5100 4570
JV/Private Sector 0 126 0 0 0 0
TOTAL 11776 800 1640 5400 4970
Grand TOTAL 27736 1960 3085 11285 9565
Source: Central Electricity Authority
COAL INSIGHTS 74 October 2010

SnapShot
Chile mine rescue – a marvel of
teamwork and determination
J.P. Panda
Located in the Atacama region of
Chile, the San José Mine is a minor
copper-gold mine. However, of
late, the San José mine had been all over
the newspapers and the Internet, due to its recent collapse on
August 5 this year, which trapped as many as 33 miners at
2257 feet underground. It all happened when a massive and
catastrophic collapse of nearly 7,00,000 tons of rocks happened,
thereby blocking the mine entrance, trapping all 33 miners
underground. What followed was a modern-day epic about
the sheer grit, determination and will-power of the miners as
well as rescuers overground, which led to the former’s rescue
from the jaws of death. The tale of 33 miners trapped for as
many as 69 days prior to their rescue is a stark reminder of
what we all can do, if we concentrate and do not lose courage.
What made the entire episode particularly complicated and
pain-staking was the fact that the mine can be reached only by
a long sloping roadway with many spiral turns and not by a
vertical mineshaft.
The miners somehow reached a rescue shelter in the mine
where some emergency provisions such as drinking water
and food were provided which helped them survive for a few
days. During their ordeal, the miners used an underground
excavator to dig a channel for water which helped them
survive for 17 days. From the Aug. 5 cave-in until they
established contact with the surface 17 days later, the miners
rationed themselves to two spoonfuls of tuna, half a cookie
and a half-full glass of milk every 48 hours. In the tunnel near
the shelter where the men initially took refuge, they set up
a chemical toilet and latrines, along with a duct providing
potable water.
What made the situation particularly grim was that many
men have been trapped underground in mines the world over,
but only a few have been rescued in recent history.
a narrow perforation drill, they had begun to send them
hydration gel, soup and medication in narrow plastic tubes
called "doves." Once they were discovered, the men quickly
established a regular meal schedule including breakfast, lunch,
dinner and an afternoon tea. The smokers satisfied themselves
with patches and nicotine gum.
Once the first bore hole established a lifeline to the men,
letters began to pass between loved ones via the "doves."
Later came a fiber optic line enabling phone calls and
videoconferencing.
Doctors were also able to pass down a biometric belt which
allowed the miners to monitor and transmit their vital signs to
the surface using wireless technology.
A video camera lowered soon after beamed pictures of
some of the miners, bare-chested in the underground heat,
waving cheerfully. Authorities and relatives of the miners
hugged, then climbed a nearby hill and planted 33 flags and
sang the national anthem of Chile after the discovery that the
miners have survived.
The hole already drilled was used for sending small
capsules with food, water and oxygen to the miners. Audio
and video equipment were also sent down the bore hole, so
that the miners could better communicate with their loved
ones and the rescuers. One of the miners' most relished gifts
was a small high-definition video camera with which they
recorded a large part of their ordeal. Despite the hazards they
confronted, the men maintained high spirits and the most
distinguished humourists among them despatched eight hours
of their favorite jokes on film. This two-way communication
was crucial in motivating them as well.
Trial lowering of the capsule
Initial success
At the San Jose mine, rescuers drilled repeatedly in an attempt
to reach the shelter, but failed up to seven times. They blamed
these failures on the faulty maps of the mining company. The
eighth attempt finally succeeded on the 17th day namely on
August 22 when it was established that all 33 miners were
still alive. The first sign of life from the miners came when
knocking was heard on a drill head as it reached the depths of
the mine. Rescuers withdrew the drill to find a note attached
reading, "The 33 of us in the shelter are well," much to the
relief of their family and friends waiting outside.
Once rescuers on the surface discovered the men with
COAL INSIGHTS 76 October 2010

Snap Shot
The concern areas
The miners were trapped at approximately 5 kilometres (3.1
miles) from the mine entrance. What was more worrying was
that the mine had a history of roof instability that had led to
previous roof collapse accidents, including one death. In fact,
a government report warned in July 2010 that the mine owners
had failed "to reinforce the roof". The lack of reinforcement
"had led to [an earlier] collapse of the roof." Till the present
collapse, there had been persistent controversy as to why the
mine was not closed down.
Now, with the discovery of 33 men found alive after 17
days trapped in the mine, the biggest challenge now was the
preservation of their mental health in the months that it could
take to bore a shaft large enough for them to get out.
The rescue plan
With the discovery of the miners being alive, the authorities
put into action the next big plan – that of rescuing the trapped
miners. The President of Chile swung into action and appointed
the man who ran the world's most productive underground
mine, El Teniente, for Chile’s state owned CODELCO copper
company, Andre Sougarret, as the person in charge of the
rescue operation.
The rescue team mobilised three powerful drills, soon to
be known as Plan A, Plan B and Plan C, each with different
methods of pounding through the rock. Plan A was to
drill through the large diameter hole up to the workshop
underground. Plan B was to drill a large diameter hole up
to the refuge chamber, while Plan C focused on drilling a
large diameter hole in between the workshop and the refuse
chamber. The rescuers made it a point to talk to the trapped
miners every day, at first using a phone dropped down the
hole, and eventually by video conference calls.
With three drills advancing towards the men, it was only
a matter of time, before they would have been brought back
Miner coming out of the capsule
to safety. Sougarret calculated the potential speed of each drill
and zeroed in on three dates - December 1 for Plan A to reach
the refuge, October 10 for Plan B to reach the workshop and
October 30 for the shaft in-between for Plan C. In recent weeks,
the miners began to help with the drilling process, taking
shifts to clear away debris that fell into the tunnel of the mine.
Finally, at 8.05 am on October 9, Plan B broke through. The
widened borehole which was 28 inches in diametre was drilled
by the “Schramm T130XD” category drill employed in the
plan and was completed on Saturday, October 9, even though
it was stopped for approximately 10 hours due to a drill-bit
(Tri-cone roller bit used) change. Incidentally, the Schramm
T130XD is a heavy duty, heavy hoist, carrier mounted drill
rig. The T130XD utilises the latest concepts in mast design and
technology. As on October 8, the others namely the Strata 950
had reached 598 metres deep which was equal to 85 percent.
The RIG-422, the only machine which drills a shaft wide
enough immediately, reached 372 metres or 62 percent.
The drilling was done by U.S.-Chilean drilling company
Geotec. A team from Center Rock Inc. of Berlin had built
and managed the piston-driven hammers that pounded the
hole through quartz and silica, some of the hardest and most
abrasive rock in the world.
Health of trapped miners
One of the main concerns was to prevent nausea among the
miners as the rescue capsule was expected to rotate 350 degrees
some 10 to 12 times through curves in the 28-inch-diametre
escape hole on its way up. Physiologists set up obligatory
exercise schedules to keep the men fit for their trying passage
up the escape shaft, when they may have to hold the same
posture for as much as an hour.
A small video camera in the escape capsule was provided,
to be trained on each miner's face so that the person can be
watched as he ascends. The capsule had oxygen cylinders and
masks and also had a two-way voice communication system.
A day after drillers broke through to where the miners had
been huddled together, officials began detailed monitoring
of their health and working out every detail of the half-mile
ascent that was expected to last about 20 minutes for each man.
Special equipment was sent down to measure their heart
rate, their respiration rate and skin temperature.
During the week before the breakthrough, all the miners
underwent underground stress tests to assess their health.
The Chilean authorities called in Dr. J.D. Polk from NASA,
whose expertise lay in treating astronauts in confined spaces.
He instructed the miners to do leg squats, take salt tablets and
protein fluids. Later, doctors transitioned the men to a solid
diet including meat and rice, with a strict 2200-calorie diet to
keep them slim enough to fit in the evacuation shaft just two
feet (66 cm) in diameter.
Officials were concerned about acute hypertension in some
of the miners as well as the opposite, namely sudden drops
in blood pressure in others, due to the speed at which they
would be ascending nearly half a mile to the surface.
COAL INSIGHTS 78 October 2010

Snap Shot
It was finalised that the miners will wear sweaters because
they will experience a shift in climate from about 90 degrees
Fahrenheit underground to temperatures hovering near
freezing point if they ascend at night. Those coming out during
daylight hours were instructed to wear sunglasses. At the
beginning after their discovery, the miners installed lights to
simulate day and night to diminish the impact of their eventual
return to the surface, supported by a 500-watt power line.
The escape capsule
In the last stage, three capsules were built to bring back each
miner at a time, corresponding to the three rescue plans. The
capsules had a common name, “Phoenix”, after the mythical
bird which rose from the ashes, symbolising a sort of rebirth
for the trapped miners. As per the plans, they were called
Phoenix 1, 2 and 3. It was Phoenix 2 which finally rescued the
trapped miners.
The escape capsule, equipped with spring-loaded wheels
to press against the hole's walls, was to be lowered into the
hole by an slow speed electric winch and the trapped miners
brought up one by one. The spring loaded wheels ensured
that the capsule would not be jammed in the hole. The weight
of each capsule was approximately 924 pounds or 420 kg.
The safety department of the Chilean government had insisted
on casing the whole shaft. But a technical decision, based on
the evidence and the expertise of a team of eight geologists
and mining engineers, was taken whether to line the whole
shaft or part of it.
Encasing the full shaft would have added another week
or so before the rescue could begin and there was the added
danger of pipes getting jammed.
The political consequences of the pipe getting jammed
were inescapable. Chile's success story would evaporate if a
miner should get stuck on the way up for reasons that might
have been avoided.
Some miners' families wanted the entire shaft lined with
pipe, but some engineers involved said the risk of the capsule
getting jammed in the unreinforced hole was less than the risk
of the pipes getting jammed and ruining their hard-won exit
route. It was ultimately decided to encase only first 100 metres
of the shaft.
The trial run of the capsule was done a few times before
men were allowed to enter the capsule.
As it travelled down and up, down and up, the rescue
capsule was not rotating as much inside the 2041-foot escape
shaft as officials had expected, thereby allowing for faster
trips.
The final moment
Eager family members and anxious strangers from around
the world bit their lips in anticipation as the rescue operations
began in the intense chill of the desert night.
Sixteen minutes later, they broke out in cheers and chants
of "Chile! Chile!" were heard as Florencio Avalos was the
first to step out from the capsule. Avalos beamed as his
feet touched the surface under which he was trapped for
more than two months. He cradled his son and wife before
Chilean President Sebastian Pinera bear-hugged him. Avalos
appeared strong, walking without help and embracing many
of the rescue workers who witnessed his arrival. He was then
put on a gurney and wheeled away for an examination by
doctors.
In Chile’s capital Santiago, hundreds wept and embraced
as they watched the rescue on a flickering big screen TV set
up in a square. Champagne flowed at the Chilean embassy in
Washington, D.C., too.
The scene repeated itself several times as more and
more miners arrived. Around the world, people, who were
otherwise completely unrelated to the miners, sat glued to
their television sets.
Each round trip in the 924-pound Fenix capsule took
about 50 minutes, and the last miner emerged on Wednesday,
October 13.
As the second miner, Mario Sepulveda, exited the rescue
hole, he reached into a large yellow bag and handed out what
appeared to be rocks to officials and rescue workers.
Amid the sea of Chilean flags greeting the emerging miners
was a collection of small, handheld Bolivian flags for Carlos
Mamani, the lone Bolivian miner.
His family back home was restrained for much of the
morning while watching the rescue on TV. But they jumped
up and clapped when they saw him kneel on the ground
Next up was the youngest of the lot, Jimmy Sanchez, a
19-year-old who worked as an environmental assistant and
the father of a newborn girl.
The first miners to come to the surface were deemed the
most fit, but also possessed the most technical know-how so
that they could advise the rescue teams.
The next five were the physically weakest, a term perhaps
not appropriate for anyone who has survived more than two
months in the bowels of the earth. But one of the miners had
diabetes; another had black lung.
The last to come out was Luis Alberto Iribarren, 54 years
of age. Like the captain of a sinking ship, the shift supervisor
volunteered to stay behind until all his men were safe.
"It's extremely exciting for us. ... It's a very emotional
moment for us," said Jeff Hart, one of the lead drillers who
assisted with the rescue efforts. "We worked real long and hard
on that, and to actually see the capsule come through the first
time through the hole that we drilled was just unbelievable."
For the 33 men, the only contact with the outside world
since August 5 was through a small bore hole through which
they were sent food, water and other supplies. A letter sent by
one of them said they would take a vow of silence, to never to
fully reveal the details of their underground misery.
High above the miners, about 1500 journalists from 39
nations and family members held their collective breath, as
the rescue effort went on. In the end, man won over the whims
of nature, in an episode that will be remembered for a long
time to come.
COAL INSIGHTS 80 October 2010

E-Auction data
CIL’s August coal sales through e-auction down
Coal Insights Bureau
The eight coal producing subsidiaries of Coal India Ltd
(CIL) sold a total of 3.64 mt of coal through e-auction
route during the month of August, according to
information available with ICMW.
The subsidiaries had offered 3.95 mt coal for sale through
the system and almost 92% of the quantity offered was sold,
indicating good demand from consumers.
In July, the CIL subsidiaries had offered 4.08 mt and nearly
90% or 3.66 mt was sold.
The CIL earned a total of `681.74 crore in August from sale
through the auctions, which was 80% higher than notified
price of Rs 379.11 crore for the same quantity and 38.33% more
than floor price or reserve price of `492.84 crore.
In July, it had earned `652.26 crore from sale through the
auctions, which was 70% higher than notified price of `384.01
crore.
For the period April-Aug, CIL subsidiaries offered a total
of 18.51 mt coal for sale through e-auction route and managed
to sell 16.60 mt helping them earn a revenue of `2959.55 crore,
183% higher than value of notified price of `1047 crore of the
same quantity.
In other words, CIL earned additional revenue of about
`1912.55 crore by selling a portion of its production through
e-auction between April and August.
Following are the details of e-auction of CIL in August.
COMPANYWISE PERFORMANCE OF E-AUCTION OF RAW COAL IN CIL FOR AUG 2010 (PROVISIONAL)
Coal company No of bidders No of successful bidders
Total quantity offered
(L. Tons)
Total quantity allocated
(L. Tons)
% increase over
notified price
ECL 274 220 2.01 0.63 46.9
BCCL 2764 1510 2.50 2.43 71.3
CCL 1281 613 5.30 4.55 57.6
NCL 149 93 0.85 0.78 127.5
WCL 829 480 5.65 5.65 82.6
SECL 815 380 6.77 6.07 125.2
MCL 235 176 16.46 16.26 68.9
NEC 0 0 0.00 0.00 0.0
CIL 6347 3472 39.54 36.37 79.8
COMPANYWISE PERFORMANCE OF E-AUCTION OF RAW COAL IN CIL FOR APRIL 2010 To AUG 2010 (PROVISIONAL)
Coal company No of bidders No of successful bidders
Total quantity offered
(L.Tons)
Total quantity allocated
(L.Tons)
% increase over
notified price
ECL 1152 882 5.03 2.33 46.4
BCCL 12830 8150 12.82 12.26 57.9
CCL 4984 2475 21.82 16.20 62.1
NCL 849 514 6.13 6.06 87.1
WCL 3273 2163 29.05 28.23 59.7
SECL 3382 1869 32.66 31.95 112.4
MCL 1218 900 75.96 68.67 60.4
NEC 68 50 1.62 0.26 45.9
CIL 27756 17003 185.10 165.97 70.3
COAL INSIGHTS 82 October 2010

E-Auction data
Month
Details of e-Auction
Offered Quantity
(In Tons)
Sold Quantity
(In Tons)
Variation
(In Percent)
Aug 2009 5,048,619 3,752,225 -25.68
Sep 2009 4,927,901 3,103,123 -37.03
Oct 2009 3,260,580 3,080,738 -5.52
Nov 2009 6,999,080 5,659,042 -19.15
Dec 2009 5,453,411 4,236,653 -22.31
Jan 2010 6,576,301 5,757,565 -12.45
Feb 2010 6,151,869 5,049,310 -17.92
Mar 2010 7,929,689 4,778,310 -39.74
Apr 2010 4,260,583 3,555,683 -16.54
May 2010 6,490,803 3,088,019 -52.42
Jun 2010 4,491,718 2,993,635 -33.35
Jul 2010 4,727,689 3,724,154 -21.23
Aug 2010 4,337,154 3,723,656 -14.15
TOTAL 70,655,397 52,502,113 -25.69
Monthly Data of Offered Quantity (Road & Rail)
Qty. In Tons
Month Offered by Road Offered by Rail
Aug 2009 3828344 1220275
Sep 2009 4466500 461401
Oct 2009 2617350 643230
Nov 2009 5483390 1515690
Dec 2009 4666980 786431
Jan 2010 4669131 1907170
Feb 2010 4913280 1238589
Mar 2010 6110014 1819675
Apr 2010 3999550 261033
May 2010 5366085 1124718
Jun 2010 3870500 621218
Jul 2010 4004021 723668
Aug 2010 3826889 510265
Total 57822034 12833363
Quantity in Tons
Qty Offered In Tons
9,000,000
8,000,000
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
7000000
6000000
5000000
4000000
3000000
2000000
1000000
0
Quantity Offered & Sold
Feb'10 Mar'10 Apr'10 May'10 Jun'10 Jul'10 Aug'10
OFFERED QTY (in tons)
SOLD QTY (in tons)
Monthly Data of Offered Quantity
(Road & Rail)
Feb'10 Mar'10 Apr'10 May'10 Jun'10 Jul'10 Aug'10
OFFERED BY ROAD
OFFERED BY RAIL
Quantity Offered & Sold In Aug ’10 v/s Jul ’10 by
Various Subsidiaries Rail & Road
Qty. In Tons
August 2010 July 2010 Variation (In Percent)
Qty Offered Qty Sold Qty Offered Qty Sold Offered Qty Sold Qty
BCCL ROAD 393,200 266,550 386,600 228,750 1.71% 16.52%
BCCL RAIL 35,550 0 51,283 0 -30.68% 0.00%
MCL ROAD 1,290,000 1,270,110 1,390,000 1,238,400 -7.19% 2.56%
MCL RAIL 355,500 355,500 355,500 355,500 0.00% 0.00%
NCL ROAD 75,000 74,980 95,000 94,940 -21.05% -21.02%
NCL RAIL - - - - NA NA
NEC ROAD 10,000 3,500 20,000 10,130 -50.00% -65.45%
NEC RAIL - - NA NA
SECL ROAD 565,800 439,800 318,600 318,600 77.59% 38.04%
SECL RAIL 111,215 111,215 118,885 118,885 -6.45% -6.45%
ECL ROAD 200,689 62,916 68,626 39,759 192.44% 58.24%
ECL RAIL - - - - NA NA
WCL ROAD 553,750 553,030 566,050 553,220 -2.17% -0.03%
WCL RAIL 8,000 8,000 8,000 8,000 0.00% 0.00%
SCCL ROAD 100,000 99,995 - - NA NA
SCCL RAIL - - - - NA NA
CCL ROAD 638,450 478,060 1,159,145 567,970 -44.92% -15.83%
CCL RAIL - - 190,000 190,000 NA NA
TOTAL 4,337,154 3,723,656 4,727,689 3,724,154 -8.26% -0.01%
Quantity In Tons
1,800,000
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
BCCL ROAD
BCCL RAIL
Quantity Offered & Sold In
Aug ’10 v/s Jul ’10
MCL ROAD
MCL RAIL
NCL ROAD
NCL RAIL
NEC ROAD
NEC RAIL
SECL ROAD
SECL RAIL
ECL ROAD
ECL RAIL
WCL ROAD
WCL RAIL
SCCL ROAD
SCCL RAIL
CCL ROAD
CCL RAIL
Companies
Aug-10 QTY OFFERED Aug-10 QTY SOLD Jul-10 QTY OFFERED Jul-10 QTY SOLD
Note: The figures for March’10 are for only one service provider the rest all are from two service providers.
COAL INSIGHTS 84 October 2010

All India coal data – August 2010
India’s coal production rises in August
Coal Insights Bureau
India’s coal production in August 2010 stood at 38.168 million
tons (mt), lower than the targeted 39.811 mt, but higher than
37.8 mt posted in July and also in August 2009.According to
official data, of the total production in August, about 30.891 mt
came from Coal India Ltd (CIL) while the remaining part was
contributed by Singareni Collieries Company Ltd (SCCL) and
others. Among the CIL subsidiaries, South Eastern Coalfields Ltd
(SECL) achieved the highest production of 8.115 mt, followed by
Mahanadi Coalfields Ltd (MCL) and Northern Coalfields Ltd
(NCL) which clocked 7.407 mt and 4.726 mt, respectively.
For the April to August period, total production was
194.888 mt, lower than the targeted 208.289 mt. This, however,
was slightly higher than 193.221 mt reported during the same
period last year. For CIL, total production during the period
was 156.632 mt, compared to 154.692 mt last year.
Coking coal production exceeds target
India’s coking coal production in August 2010 has exceeded
both the target set for the month and the production achieved
during the same month last year. Total production of coking
coal was 3.582 mt in August, while targeted production was
2.909 mt. Production during August 2009 was 3.181 mt and
in July 2010 was 3.285 mt. The August production of CIL was
2.921 mt, against target of 2.184 mt.
During the period April to August 2010, production of
coking coal was 18.006 mt, higher than the target of 15.010
mt. During the corresponding period last year, coking coal
production stood at 15.658 mt. Of the total production
during April-August 2010, CIL’s share was 14.675 mt while
others contributed the remaining 3.331 mt. Among the CIL’s
subsidiaries, Bharat Coking Coal Ltd (BCCL) produced 1.879
mt and Central Coalfields Ltd (CCL) produced 0.991 mt.
Captive coal production falls below target
Captive coal production in India was 3.492 mt in August,
slightly below the targeted 3.861 mt and last year’s (August
2009) production figure of 3.684 mt. Total captive production
during April-August 2010 was 19.295 mt. This was higher
than 18.306 mt achieved during the same period last year, but
marginally lower than the target of 19.305 mt. The yearly target
for captive coal production has been set at 46.330 mt.
Washed coal production at 0.266 mt
India’s production of washed coal in August 2010 was 0.266
mt, marginally higher than the targeted 0.263 mt, and also
higher than 0.239 mt achieved in August last year. The August
production, however, was lower than 0.268 mt achieved in
the previous month. BCCL achieved the highest production
of 0.132 mt while CCL produced 0.121 mt and Western
Coalfields Ltd (WCL) 0.013 mt. During April to August 2010,
washed coal production stood at 1.296 mt, lower than 1.451
mt targeted for the period, but higher than 1.217 mt achieved
during the same period last year.
Coal dispatches miss target
Total dispatch of coal in August stood at 41.336 mt, falling short
of 43.852 mt targeted for the month, largely because CIL failed
to ensure delivery of planned quantity. The dispatches in July
amounted to 40.875 mt, against the target of 44.073 mt for the
month. In August, CIL reported total dispatches of 33.962 mt,
substantially lower than the targeted 36.415 mt, while SCCL
exceeded the target of 3.576 mt and despatched 3.808 mt.
Other coal companies, primarily captive coal blocks,
despatched a total of 3.566 mt coal, which was lower than
the target of 3.861 mt. Among the CIL subsidiaries, SECL
despatched the highest volume of 9.008 mt while MCL
achieved 8.548 mt. During the period April to August 2010,
total dispatches were 206.736 mt, against targeted 226.523 mt and
last year’s corresponding figure of 200.354 mt.
Coal Production (Company-wise) August, 2010 (Provisional)
Annual
During the Month
Corresponding month
of Previous year
Upto the Month
(Million Tons)
Corresponding period
of Previous year
Name of the Company
Target Target Achievement Actual Target Achievement Actual
ECL 33.000 1.882 2.174 1.773 11.257 10.532 10.520
BCCL 29.000 2.210 2.174 1.938 11.725 11.170 10.187
CCL 50.000 3.505 3.401 3.231 18.018 14.903 14.688
NCL 72.000 5.500 4.726 5.066 27.650 23.615 25.442
WCL 46.500 3.242 2.865 3.342 17.689 17.447 17.700
SECL 112.000 8.275 8.115 8.121 42.230 41.859 40.286
MCL 116.750 7.910 7.407 6.675 41.575 36.894 35.663
NEC 1.250 0.040 0.029 0.041 0.208 0.212 0.206
CIL 460.500 32.564 30.891 30.187 170.352 156.632 154.692
SCCL 46.000 3.386 3.785 3.929 18.632 18.961 20.223
OTHERS* 46.330 3.861 3.492 3.684 19.305 19.295 18.306
ALL INDIA TOTAL 552.830 39.811 38.168 37.800 208.289 194.888 193.221
COAL INSIGHTS 86 October 2010

All India coal data – August 2010
Name of the
Company
Annual
COAL PRODUCTION AUGUST 2010 PROVISIONAL (Company-wise)
During the Month
Corresponding Month
of Previous Year
Upto the Month
(Million Tons)
Corresponding Period
of Previous Year
Target Target Achievement Actual Target Achievement Actual
ECL 33.000 1.882 2.174 1.773 11.257 10.532 10.520
BCCL 29.000 2.210 2.174 1.938 11.725 11.170 10.187
CCL 50.000 3.505 3.401 3.231 18.018 14.903 14.688
NCL 72.000 5.500 4.726 5.066 27.650 23.615 25.442
WCL 46.500 3.242 2.865 3.342 17.689 17.447 17.700
SECL 112.000 8.275 8.115 8.121 42.230 41.859 40.286
MCL 116.750 7.910 7.407 6.675 41.575 36.894 35.663
NEC 1.250 0.040 0.029 0.041 0.208 0.212 0.206
CIL 460.500 32.564 30.891 30.187 170.352 156.632 154.692
SCCL 46.000 3.386 3.785 3.929 18.632 18.961 20.223
OTHERS* 46.330 3.861 3.492 3.684 19.305 19.295 18.306
ALL INDIA TOTAL 552.830 39.811 38.168 37.800 208.289 194.888 193.221
Name of the
Company
Annual
COAL DESPATCHES AUGUST 2010 PROVISIONAL (Company-wise)
During the Month
Corresponding month of
Previous year
Upto the Month
(Million Tons)
Corresponding period of
Previous year
Target Target Achievement Actual Target Achievement Actual
ECL 32.601 2.434 2.251 1.777 12.721 11.358 11.584
BCCL 28.760 2.409 2.432 2.064 12.502 12.146 10.444
CCL 49.990 4.109 3.876 3.573 21.193 17.424 17.380
NCL 72.000 5.456 4.750 4.904 28.563 24.510 25.664
WCL 46.477 3.539 3.050 3.531 18.549 17.279 18.191
SECL 111.980 9.044 9.008 8.254 45.773 43.677 41.723
MCL 116.750 9.364 8.548 7.585 48.381 41.737 37.762
NEC 1.250 0.060 0.047 0.054 0.404 0.265 0.329
CIL 459.808 36.415 33.962 31.742 188.086 168.396 163.077
SCCL 46.930 3.576 3.808 3.814 19.132 19.574 19.583
OTHERS* 46.330 3.861 3.566 3.596 19.305 18.766 17.694
ALL INDIA TOTAL 553.068 43.852 41.336 39.152 226.523 206.736 200.354
* Excluding Meghalaya
Name of the
Company
WASHED COKING COAL PRODUCTION AUGUST 2010 PROVISIONAL (Company-wise)
Annual
During the Month
Corresponding month of
Previous year
Upto the Month
(Million Tonnes)
Corresponding period of
Previous year
Target Target Achievement Actual Target Achievement Actual
BCCL 1.702 0.126 0.132 0.105 0.668 0.637 0.526
CCL 2.000 0.120 0.121 0.115 0.700 0.582 0.593
WCL 0.211 0.017 0.013 0.019 0.083 0.077 0.098
CIL 3.913 0.263 0.266 0.239 1.451 1.296 1.217
COAL INSIGHTS 88 October 2010

Tear along the dotted line Tear along the dotted line

port DATA
Major Ports Through Which Coking Coal
Arrived in India - August 2010
Port
Quantity (in Tons)
Chennai 28448.55
Kolkata 530547.5
Paradip 270641
Vizag 365339
Grand Total 1194976.05
Major Coking Coal Supplier Countries To India
(Through Mentioned Ports) - August 2010
Country of Origin
Quantity (in Tons)
Australia 959752.55
New Zealand 128186
USA 96370
Russia 10580
UK 87.5
Grand Total 1194976.05
Major Ports Through Which Coking Coal
Arrived In India - August 2010
2.4%
30.6%
44.4%
Major Coking Coal Supplier Countries To India
(Through Mentioned Ports) - August 2010
10.82%
8.14%
22.6%
Chennai Kolkata Paradip Vizag
AUSTRALIA NEW ZEALAND USA
81.04%
Major Ports Through Which Non Coking Coal
Arrived in India - August 2010
Port
Quantity (in Tons)
Chennai 987227
Kolkata 77831
Mumbai 176981
Paradip 358613
Vizag 69370.998
Grand Total 1670022.998
Major Non Coking Coal Supplier Countries To
India (Through Mentioned Ports) - August 2010
Country of Origin
Quantity (in Tons)
INDONESIA 1380458.998
SOUTH AFRICA 289564
Grand Total 1670022.998
Major Ports Through Which Non Coking Coal
Arrived In India - August 2010
21.5%
21.5%
21.5%
4.2%
4.2%
4.2%
Major Non Coking Coal Supplier Countries To
India (Through Mentioned Ports) - August 2010
17%
10.6%
10.6%
10.6%
4.7%
4.7%
4.7%
Chennai Kolkata Mumbai Paradip Vizag
Chennai Kolkata Mumbai Paradip Vizag
Chennai Kolkata Mumbai Paradip Vizag
59.1%
59.1%
59.1%
INDONESIA
83%
SOUTH AFRICA
Note: Name of importers for coal and coke will be provided on request.
COAL INSIGHTS 90 October 2010