India's largest coal handling agency - Mjunction

Chief EditorRakesh Dubey, Tel: +91 91633 48159, Email: rakesh.dubey@mjunction.inEditorial BoardAlok Srivastava, General Manager, MMTC LtdAmitabh Panda, Group Director (Shipping & Logistics Operations), Tata SteelGroupAnirudha Gupta, Director, P&H JoyMining Equipment India LtdAshok Jain, Managing Director, Saumya Mining LtdDeepak Bhattacharyya, Head – coaljunction, mjunction services ltdGanesan Natarajan, WT Director, President & CEO, Ennore Coke LtdLawrence Metzroth, Vice President – Analysis & Strategy, Arch Coal IncM K Palanivel, President – All India Bulk, Samsara GroupS N Choubey, Asst. Vice President – CPC, UltraTech Cement LtdSandeep Kumar, Managing Director, S & T Mining Co Pvt LtdShyam Sundar Beriwala, Chairman, Shyam Steel Industries LtdSuresh Thawani, Managing Director, Tata Sponge Iron LtdAdvertisingSoumitra Bose, Tel: +91 92310 00232, Email: soumitra.bose@mjunction.inArvind Saigal, Tel: +91 91633 48078, Email: arvind.saigal@mjunction.inSumit Jalan, Tel: +91 92310 65739, Email: sumit.jalan@mjunction.inSubscriptionAnustup Lahiri, Tel: +91 91633 48013, Email: anustup.lahiri@mjunction.inDesignDebal Ray, Ishawer Kumar Sriwastva, Sobhan JasFor suggestions, feedback and queries, please write tocoalinsights@mjunction.inRegistered Officemjunction services limited, Tata Centre, 43 J L Nehru Rd, Kolkata 700 071Website: www.mjunction.inCorporate Head Quarters: Godrej Waterside, 3rd Floor, Tower 1, Plot V, Block DP, Sector V, SaltLake, Kolkata 700091, Tel: +91 33 6610 6100, Fax: +91 33 6610 6187 Bokaro: Room 19, OldAdmin Bldg., Bokaro Steel Plant, Bokaro 827001, Tel/Fax: +91 654 2226132 Jamshedpur:Armoury Rd, Bistupur, Jamshedpur 831001, Tel: +91 6576519985/86/90/91, Tele/Fax:+91 657 2424432 Durgapur: Room 618, Ispat Bhavan, Durgapur Steel Plant, Durgapur713203, Tel: +91 343 6510185, Tele/Fax: +91 343 2586946 Rourkela: AdministrativeBldg., Room 624, 6th Floor, Rourkela Steel Plant, Rourkela 769011, Tel: +91 661 6514142,Fax: +91 661 2513072 Mumbai: Jolly Bhavan II, 403, 4th Floor, 7 New Marine Lines, opp.Nirmala Niketan Home Science College, Mumbai 400002, Tel: +91 22 66510662 Delhi:C127, 2nd Floor, Rex House, Naraina Industrial Area, Phase I, New Delhi 110028, Tel: +9111 25896900/25897000/65661774, Tele/Fax: +91 11 25896100 Bhilai: Room 321, 3rd Floor,Ispat Bhavan, Bhilai Steel Plant, Bhilai 490001, Tel: +91 788 6451066, Tele/Fax: +91 7882227136 Chennai: 2nd Floor, Begum Ishpani Complex, Old 44 (New 91) Armenian St, Chennai 600001, Tel: +91 44 42167417, Tele/Fax: +91 44 42051417mjunction believes that all junctionites, customers, suppliers, partners,etc should practice the highest ethical standards in their daily operations.Report a concern to ethics@mjunction.inCopyright: All rights reserved. No part of Coal Insights can be reproduced or copied in anyform or by any means without the prior permission of mjunction services limited. Pleaseinform us if any copyright has been inadvertently infringed.Disclaimer: This document is for information purpose only. Certain information herein hasbeen acquired from various external sources believed to be reliable. While we have takenreasonable care to compile this report, we in no way assume any responsibility for any erroror discrepancy in regards to information contained herein. Readers are requested to makeappropriate judgment without any prejudice or compulsion.EDITORIALDear Readers,The good news is over. Coal India Ltd (CIL), the world’sbiggest coal mining company, has successfully listed itsshares, amid much frenzy. Now it’s time to look at the issuesat hand, again.The Indian coal sector is facing multiple challenges, allrelated to one another. Increasing production is the overallobjective, but how to achieve the same throws up a numberof issues starting from environmental hurdles to inadequatelogistics and transport facility to illegal mining. One relatedshortcoming is technological inadequacy. Conveyor beltsindustry comes within the ambit of technology and logistics andrepresents the relative shortcomings in both these segments.Although the conveyor belts industry is here for quite sometime now, there was hardly any development till a few yearsback. Even today the industry is largely scattered. Most of theplayers are in the unorganised sector with small capacities andproduction volumes. The cost competitiveness of these smallplayers is on the lower side. Little wonder then, the Chinesethreat is looming large, just like in other mining equipmentmanufacturing segments.Along with this, domestic prices of rubber, a major rawmaterial, continue to be highly volatile. From around `95 perkg in April 2009, prices have surged to the level of `200 perkg in late 2010. This is largely due to the high concentrationof rubber cultivation in Kerala. The industry needs to hedgeagainst such prevailing risks. A major positive however is theescalating growth in the power and mining sectors, especiallycoal production. The domestic conveyor belt manufacturersmust ride on this wave, organically and through acquisitions.Meanwhile, the shortcomings in logistics and transportprove to be the major constraints for increasing coal productionin the country. Coal India is simply too worried to producemore in the absence of adequate number of rakes. It is hightime an alternate route, say waterways, was developed, orarrangements were made to sort it out. India cannot afford tosacrifice growth for mismanagement, not any more.Among the latest developments is a rise in higher-grade coalprices announced by CIL. For now, the rise will be restricted tohigher grades to be charged from select users. A combinationof factors has made the rise unavoidable. In fact, this could befollowed by a subsequent general price rise in 2011 also.With demand from Asian countries on the rise, prices ofinternational coal have also surged. Just to give an indication,for the 10 months ended October 2010, total imports by Asiancountries from South Africa exceeded 36.04 mt, about a 13percent increase over 31.79 mt posted till September. Nowonder then that international prices have soared.In this issue of Coal Insights, we have once again triedto give you a holistic overview of the global as well as thedomestic coal markets. The times are exciting as well as tough,and there is a lot of action in the market as all players are ontheir toes.Happy reading.Warm RegardsRakesh DubeyChief Editor

ContentsCOVER STORY6 Conveyor belt industry poised togrow 15%8 Conveyor belts: An essentiallogistics device12 Indian conveyor belt makers onexpansion binge16 Oriental Rubber firmly on expansiontrackCOAL MARKET FUNDAMENTALS20 Global thermal coal prices shoot up22 Coking coal prices on the declineFEATURE24 CIL may hike prices in 201126 CIL bids for Colombian coal asset27 PCI coal imports from SA likely torise28 Focus on Orissa as India’s power hub29 IWAI aims to win away coal cargofrom Railways31 MoEF seeks coal quality data32 IMME brings global mining industryto Indian shores33 Coal miners saved during gas leakat SCCL33 India to face manpower crunch inmining sector35 Afghanistan to open up its mining sector36 NTPC ranked no. 1 Asian powerproducer37 India misses Oct power generationtargetGovernment39 Draft Regulatory Bill to be finalisedsoon: Coal Secy40 OTC power prices higher in October40 States seek to keep coal out of GSTnetINTERNATIONAL41 Australia may extend mineral tax net42 EIA 2010 US coal consumption andproduction outlook falls43 India, US to set up joint greenresearch centre44 German mining tools import to be up15%EXPERT SPEAK45 Large diameter boring machines:Need of the hour?CORPORATE UPDATE47 Monnet Ispat posts 2% rise in netprofit in Q247 Power Grid shares to start tradingfrom Nov 2648 CIL third most powerful company inIndia49 Adani bags coal block developmentrights in Orissa50 High voltage transformer fromCrompton Greaves51 ONGC ranked world’s top oilcompanyLOGISTICS52 Freight rates tend to fluctuate54 Iron ore traffic declines 14.49%POWER SECTOR UPDATE55 Power cuts in industries in Oct 2010E-AUCTION DATA66 CIL’s e-auction m-o-m coal salesrise marginallyPORT DATA74 Coal import dataCOAL INSIGHTS 4 November 2010

India’s largest coal handling agency• Handling approximately 60 million tons of coal per annum• More than 60 years of experience• Over 50 locations across India• Dealing with all major public & private sector consumers nation-wide• Providing solutions to all your coal-related logistic requirements, including financingwww.kctcoalsales.com • info@kctcoalsales.comCOAL INSIGHTS 5 November 2010Registered Office: Thapar House | 25 Brabourne Road | Kolkata | WB | 700001 • Tel: +91 33 4005 7000 • Fax: +91 33 2242 8684

Cover StoryConveyor belt industrypoised to grow by15%Coal Insights BureauThe Indian conveyor belt industry is poised to achieve ahigh annual growth of 15 percent over the next few years,thanks to the increased mechanisation in the Indiancoal and mineral mining sectors. The `1000-crore industry islargely fragmented, with only six to seven organised playersruling the roost.However, as the industry grows in size and volume, itmay witness some structural changes going forward, as perindustry experts.In the past couple of years, the need for faster movementof mining output along with increased production hasnecessitated the adoption of advanced logistics solutions.As the stress on faster transportation has gained moreimportance, the conveyor belt industry in India hascontinued to grow from its low base. In the past few years,almost every other conveyor belt manufacturer has doubledcapacity.In fact, some of the conveyor belts manufacturers havetaken a step further from just manufacturing conveyor beltsto becoming a complete solutions provider. Oriental Rubber,COAL INSIGHTS 6 November 2010

Cover StoryConveyor belts: An essential logistics deviceCoal Insights BureauAconveyor belt is a mechanical apparatus consistingof a continuous moving belt that transportsmaterials from one place to another. The device,which has become essential equipment for the globalmining industry, was first conceived in the 19th century.In 1901, Sandvik invented and started production ofsteel conveyor belts. Four years later, Richard Sutcliffeproduced the first conveyor belts for use in coal mines.Over the years, rapid technological advancement hasresulted in extensive specialisation and customisation ofthis important logistics device.The belt forms a continuous loop which is supportedeither on rollers (for heavy loads) or on a metal slider pan(if loads are light enough to prevent frictional drag onthe belt). Motors operating through constant or variablespeedreduction gears usually provide the power. Aconveyor belt consists of two or more pulleys, with acontinuous loop of material that rotates about them. Thisloop is actually the conveyor belt. Belt conveyors can beof various sorts namely fabric, rubber, plastic, leather ormetal, and are driven by a power-operated roll mountedunderneath or at one end of the conveyor.As per the varied industrial requirements, there arebroadly three different types of conveyor belts:♦ ♦ Basic belt♦ ♦ Snake sandwich belt♦ ♦ Long beltA basic belt conveyor consists of two or more pulleyswhich hold onecontinuous lengthof material. Thesetypes of belts can bemotorised or requiremanual effort. As thebelt moves forward,all the items on the beltare carried forward.This type of device iscommonly used in packaging or parcel delivery services,which require quick relocation of materials from one placeto another with minimal human intervention. The belt istypically installed at waist height to improve the ergonomicsfor the staff that are interacting with the materials.The structure generally consists of a metal frame withrollers installed at various intervals along the length of thebelt. The belt is typically a smooth, rubber material thatcovers the rollers. As the belt moves over the rollers, theitems placed on the belt are transferred with low frictiondue to the use of multiple rollers.The snake sandwich conveyor consists of twoseparate conveyor belts,set up parallel to eachother holding the productin place while movingalong the belt. This typeof belt is used for movingitems up steep inclines, upto 90 degrees. It was firstintroduced in 1979 andwas mainly designed formoving rocks and othermaterials out of a mine.The system was designedto make use of widelyavailable hardware and used simple principles to ensurethat it was easy to repair. The system is able to move a highvolume of materials at a consistent rate. Smooth surfacedbelts allow the conveyor belts to be cleaned automaticallywith the use of belt scrapers and plows. The design isflexible enough to allow the materials redirected off theconveyor belt at any point through simple redirection.The last andfinal one, the longbelt conveyor isa system of threedrive units usedto move materialsover a longdistance. The mostimportant featureof this system is the ability of the rollers to handle bothhorizontal and vertical curves. The long belt conveyorsystem can reach up to 13.8 km (8.57 miles) in length. Thistype of conveyor belt is often used in mining operations totransport materials to remote construction or building sitelocations, such as the bottom of a mining pit.a leading manufacturer, has launched a strong conveyormaintenance product programme along with offering a widearray of products. The company, a top official said, aims toprovide a “one stop shop” for rubber related mining products.According to industry sources, this trend could become moreprominent in the coming years due to increased competitionfrom domestic as well as overseas vendors, especially fromChina.Another significant change this industry is undergoing is thechange in customer focus to cost competitiveness. AccordingCOAL INSIGHTS 8 November 2010

Cover Storyto an official of Dunlop India Ltd, a major manufacturer, theconsuming sector has become more inclined towards costeffectiveness rather than quality.“The market was not like this earlier. There was hugedemand but the number of players was just two or three. Thebargaining power we had was thus fairly good. The paymentswere made first and the products were delivered six monthslater. But now, things have changed. At present we have justsix to seven organised players and the rest of the industry isunorganised. Thus, a huge amount of material is available atcheaper rates. Now the lookout of the consuming industryis the price of the product rather than the quality which hasresulted in a loss of bargaining power for the industry,” heexplained.Competition from ChinaIncreasing imports from China is also affecting the domesticmarket as well as the Indian manufacturers of conveyor belts.Industry sources said that Chinese mining equipment makersare trying to penetrate the Indian mining sector in a big way.In many segments of the mining industry, Chinese vendorsare successfully competing against the reputed Germanequipment manufacturers.In fact, in the last two years, most of the equipment supplycontracts from Indian miners have been won by Chinese firms.The primary advantage of the Chinese, according to sources,is that “they could send their representatives and workersto stay in India for a long period and assist their clients inabsorbing technologies. Many Chinese workers had beenstationed at Singareni.”The Chinese manufacturers could outdo both domestic andother overseas equipment makers in terms of cost. However,industry sources feel the Chinese imported belts have a highmaintenance cost and need to be replaced within one or twoyears.Volatile raw material pricesYet another major challenge being faced by domestic conveyorbelt manufacturers is the volatility in raw material prices.Industry sources said volatility in prices of rubber, the mainraw material, has created pressure on the industry players,thus affecting the final product cost and margin.The rubber market has been volatile for the past oneyear. The current prices have seen a three-fold increase fromthe previous year’s level. Rubber prices continue to be veryvolatile and increased from `95 per kg in April 2009 to `165per kg in April 2010 and further to nearly `200 per kg inNovember 2010.The rubber plantation in India, which holds about 9 percentof the world’s rubber production, is located in the singletropical region of Kerala. This increases the vulnerability ofthe plantation against seasonal fluctuations.In order to cope with rubber price volatility, a number ofdomestic conveyor belt manufacturers increased their pricesin the months of November 2009 and March 2010. However,they are facing stiff resistance from the transporters againstany further increase.This may dent the profitability of these companies infuture. These escalations in prices have resulted in 6 percentto 10 percent hike in the final product prices.Banking on mining growthNotwithstanding the aforesaid challenges, the industry isbanking on the high growth expected in India’s mining sector.India’s mining sector output is expected toincrease its share in GDP from the current 2.5percent to 5 percent in the next five years.In the coal sector, in particular, thegovernment is targeting huge growth tofeed the power sector. According to someestimate, coal production in the country isexpected to increase from 533 million tons(mt) in 2009-10 to 553 mt in 2010-11. CoalIndia Ltd, which produces 80 percent oftotal coal output in the country, is aimingto increase production growth from current7 percent to 10 percent to match demandgrowth. The ever-increasing appetite forcoal in the economy is expected to resultin a domestic shortfall of 189 mt by 2015,according to KPMG.The domestic conveyor beltmanufacturers are banking on this highgrowth in the mining sector as well as otheruser industries such as steel, ferro alloy,power, cement, sugar, sponge iron andmaterial handling, among others.COAL INSIGHTS 10 November 2010

P&H MinePro Services - IndiaMining Centre85/1, Topsia Road (South)Kolkata, India 700046Phone: (91) 33 23022300Fax: (91) 33 23022333P&H and P&H MinePro Services are trademarksof Joy Global Inc. or one of its affiliates. ©2009P&H Mining Equipment Inc. All rights reserved.Customer-Inspired ValueIn 80-Cubic-Meter ClassValuable inputs from world-classdragline operations provided thefoundation for the innovative,productive and reliableP&H ® 9020 walking dragline.From tub to boom point, youwill find breakthrough solutionsapplied to help make thisoverburden prime mover one ofthe world’s outstanding machinesfor high performance coal miningoperations – along with valuableservice support provided by ourP&H MinePro Services India team.www.minepro.com

Cover StoryIndian conveyor belt makers onexpansion bingeArusha DasBuoyed by the dramatic growth in user segments,especially power, steel and mining, the Indian conveyorbelt manufacturers are planning to go on an expansionbinge to meet the growing demand. The high rate of growth canbe gauged from the fact that the size of the industry has grownmultifold in the last five years. Almost all the manufacturers,both major players and small scale manufacturers in theunorganised sector, are mulling to expand capacity.Some of the companies embarking on expansion plansinclude Dunlop India Ltd, Oriental Rubber, InternationalConveyors Ltd and others. While some of them are planningto add capacity, other are looking to foray into newgeographies.Dunlop India, one of the major players in Indian conveyorbelt industry, is struggling to meet the growing demand withits limited capacity. The company has a unit at Sahaganj, WestBengal. The company has an installed capacity of 2,44,000metres of textile and steel cord belting, 14,32,000 metres oftransmission belting and 1,42,000 metres of PVC belting.The unit has a capacity which is much lower thanthe requirement, and therefore outsources some of itsmanufacturing. According to a company official, therequirement is manufactured by other smaller manufacturersunder the name of Dunlop. “As there is good demand in themarket and our current capacity is less, we outsource a part ofour production. Thus we also have some expansion plans,” heexplained.Currently, the company is catering to the requirementsof industries like cement, steel and power plants and SMEs,among others. The company has a wide range of productincluding rubber belts, temperature belts and fireproof belts,among others.Although the company is optimistic of a positive growth, itis witnessing some major hurdles at present.The company at present buys rubber from the openmarket. “Of the total cost of production, rubber accounts for90 percent while the rest is fabric. The availability is not aproblem, but the price volatility causes an issue in the currentmarket situation,” he noted.Dunlop is doing some in-house research to optimise rubberconsumption with other products. Another raw material isfabric which at present is imported by the company.Another domestic firm having major expansion plansis Devcon Systems & Projects Pvt. Ltd. Devcon is one ofthe leading manufacturers and exporters of bulk materialhandling equipment and other conveying systems. Thecompany is almost tripling its production capacity to meetincreased demand.The company is setting up a new unit, which is almostthree times the capacity of the existing unit. The land has beenacquired and the company is optimistic about wrapping upthe project in the next 18 months, a company official said.Once the unit is in place, the company will manufacturespares in the older unit while the new unit will manufacturethe conveyor equipment, he added. The project is at its initialstage.The company intends to shape up as a complete solutionsprovider. The company’s range of conveyors belts and otherproducts are widely used in various industrial applicationsin sectors such as the steel, ferro alloy, sugar and miningindustries, thermal power plants, sponge iron, iron ore,material handling and coal handling plants.According to an estimate, the power sector accounts for 30percent of the total production, while the ferro alloys industryaccounts for 40 percent and rest of the industries 30 percent.The company generally meets the requirement of 2000 metres(22x50 metres) per year.The company manufactured the coal handling plantfor conventional and FBC boiler on turnkey basis with civildesign. In addition to this, the company is also involved inprojects like iron ore crushing, screening and conveying plant,ash handling plant with storage bunker, stone crushing,screening and conveying plant, all on a turnkey basis.For the sugarcane, molasses and sugar handling plant, thecompany manufactures on a customised basis and it is thesame for the paper and pulp handling plant as well as cementhandling plants. For coke briquetting plants, the companyworks on a turnkey basis. The company also works for ferroalloys plants for its raw material storage, weighing, batchingand handling system, for feeding system of sponge iron plantsand any type of bulk raw material handling and storage plants.COAL INSIGHTS 12 November 2010

Cover StoryThe company has been one of the pioneers in manufacturingsteep angle belt conveyor, which is an effective bulk handlingequipment based on bucket belt type technology. This issuitable for handling a variety of materials, as these beltconveyors consist of tail pulley, head pulley, press rolls andsnub pulley. This apart from being economical and practicalis effective for lifting bulk material. It is applicable for shortdistance to a height of 100 meters. The maximum inclinationof 90 degrees is possible without any spillage. The availablewidth is 400 mm to 1500 mm with a capacity of 5 ton per hourto 1500 ton per hour with a speed of 5 metres per second.Yet another major expansion comes from the stable ofInternational Conveyors Ltd (ICL). It is one of the marketleaders in the Indian PVC mine conveyor belt industry witharound 45 percent market share. The company is currentlymaking efforts to establish itself as a global Indian company.ICL is a supplier of underground PVC belting for carryingcoal and potash, and presently supplies over 150 km of PVCbelts of various widths and strengths to underground coalmines in India. With increasing focus on the undergroundmining by the domestic players, ICL is set to bag a sizeableshare of the underground PVC belting business.With a considerably good performance in 2009-10, thecompany is optimistic about the future growth. The company’stopline grew 25.62 percent from `71.84 crore in2008-09 to `90.24 crore in 2009-10. The bottomline wasup 369 percent from `2.76 crore in 2008-09 to `12.96 crore.Managing director of ICL, R. K. Dabriwala, describedthis performance as creditable as the international marketcontinued to be in a state of slowdown, affecting the capitalexpenditures of industries addressed by ICL.“If there is a single message that can be deduced from thisperformance, it is that the company has finally establisheditself as a global Indian company. The evidence is in thenumbers. There was a gradual correction in an excessiveIndia-centric presence that we created over the last decade,”Dabriwala pointed out. The company’s exports increased at aCAGR of 202 percent from 2001-02 to 2009-10. Of this, around63.77 percent of the revenue comprised exports in 2009-10. Itwill be interesting to note here that of this about 80 percentwas made to First World countries where only multinationalcorporations enjoyed a monopoly until now.According to Dabriwala, this presence was establishedowing to globally competitive costs, technologicallybenchmarked with the best in the world, and the managerialbandwidth to recognise global trends and compete with largercompanies.The company expanded annual installed capacity from5,75,000 metres in 2008-09 to 7,00,800 metres. Thus, increasedproduction from 2,70,802 metres in 2008-09 to 3,49,330 metrestranslated into increased revenue. ICL believes that the futureof competitive manufacturers lies in value addition beyondthe commodity segment, Dabriwala informed.ICL evolved its product mix through the increasingmanufacture of value-added products like 8000 lb per squareinch (lb/sq. inch) and 10,000 lb/sq. inch products and mirrorfinishPVC beltings. “As a forward-looking manufacturer, webegan to manufacture Type 8 to 10 in 2006-07, a space occupiedby only few manufacturers in the world, and reinforced ourposition in this space in 2009-10, strengthening our brandin peer and customer communities. This had a number ofbenefits: our counter competition positioning strengthenedand our average realisation increased,” Dabriwala said.This strengthened the company’s average realisation from`2411.30 per metre in 2008-09 to `2473.50 per metre.Meanwhile, the company leveraged its in-houseengineering excellence to use an optimum amount of rawmaterial while completely matching customer specifications.In addition to this, the company also shifted from Europebasedraw material providers to Korean and Chinese supplierswith corresponding cost advantages without compromisingon quality.Keeping in mind the volatility in commodity prices, thecompany derisked itself against the increasing cost of pastegrade PVC – a key input material – by booking bulk quantitythrough forward contracts. ICL also engaged in valueengineeringin its existing plant and machinery to reduceconversion costs, Dabriwala mentioned.Referring to its geographic positioning, Dabriwalaadded that the growth of ICL was derived out of an activepresence in only three countries and it expects to enter Chinaand Australia in 2010-11. Normally, only large companiespossess competencies in Type 6-plus products. ICL derivesover 50 percent of its revenues from Type 6-and-aboveproducts.In the Indian market, the Type 6 segment accounts for amere 60 km of the market as the mining practices carried outin India are not fully mechanised as most mineral reserves areextracted from as close to the surface as possible. As surfacereserves are progressively depleting, the country will needto mine deeper, and engage in longwall and continuousminers, which in turn will warrant a growing investment in ahigher type of product mix. Until this happens, ICL will focuson the developed global market like the US, Australia andChina, where the deep nature of mining and correspondingmechanisation has translated into a sustainable offtake forICL’s products.Thus, ICL intends to modernise its unit with an investmentof `400 lakh, to help produce larger volumes within the existinginfrastructure. ICL also intends to widen its geographicalpresence from three to five countries. “We expect the fullimpact of our doubled capacity to be felt in 2011-12. For now,we hope to report two years of straight growth. Our principalobjective in 2010-11 is to enhance our capacity utilisation andcapture additional market share which may require us to becontent with more modest realisations, margins and profits forthe moment,” Dabriwala said.COAL INSIGHTS 14 November 2010

Cover StoryOriental Rubber firmly on theexpansion trackCoal Insights BureauOriental RubberIndustries Limitedestablished itself asone of the first producers ofrubber moulded articles inindependent India way back in1949. Having been in businessfor the past 60 years, with aworldwide base of valued andtrusted customers and partners,Oriental has been conferred theVishal Makarcoveted status of TWO STARJoint Managing DirectorEXPORT HOUSE since the year2002. In 2009, in recognition of the company’s sterling exportperformance, Oriental was conferred the status of a TRADINGHOUSE. Oriental is an ISO 9001-2008 company and has anestablished quality management systems for product qualityand valued service at affordable costs.In an exclusive interview to Coal Insights, Oriental Rubbers’Joint Managing Directors Vikram Makar and Vishal Makarshared their views on the conveyor belt Industry and thecompany’s growth plans.Excerpts:What are the main products of your company?Oriental is in a unique position since we have a product lineup comprising not only the widest array of conveyor belts,but additionally a strong Conveyor Maintenance ProductProgramme which assists us in providing a “one-stop shop”for rubber related mining products. In addition to conveyorbelts, Oriental also manufactures and supplies world classConveyor Maintenance Products including Wear resistantsheets, Pulley Lagging, Impact Bars with an aim to offercomplete solutions to our customers.Which industry is your largest client?Oriental today exports to more than 40 countries around theworld and has an impressive client list comprising blue chipcompanies in the domestic & overseas markets. Oriental’sproducts cater to critical requirements of material handlingapplications in the steel, coal, cement, power, fertilisers,mining, aggregates, quarrying and food-based industries.Oriental has scaled greater heights and created its ownniche in the Indian marketby supplying high qualityproducts in various sectorssuch as mining, steel, coalfields, power, fertiliser andcement, to name a few.Additionally, Oriental hasalso been a strong supplier toproject companies in India.What is the productioncapacity of your plant?Vikram MakarJoint Managing DirectorOriental has twomanufacturing units with a combined capacity ofmanufacturing approximately 100 kms of conveyor belts permonth. This multiple location feature gives us the leverage toexecute high volume orders with ease.How big is your company in terms of turnover?Our turnover in the last financial year was approximately `160crore.What could be your possible market size in India?About 40 percent of our production is caters to the Indianmarket. We figure in the list of top three conveyer beltmanufacturers in India, across all sectors.Do you have any expansion plans?We propose to shortly initiate an additional production lineat our factory. This will add about 20 percent to our capacitiesand will thereby enable us to offer quicker deliveries to ourcustomers and will also result in an increased market share.The expansion is scheduled to take place in 2011-12.Oriental has set itself a target to be among the top tenglobal belt producers by 2015. This growth will be possible byaddressing the Indian market more aggressively, reaching outto the global market in higher quantities and most importantly,by continuing to innovate in the products we can bring to themarket in the shortest possible time.Are you planning to introduce any new product line?Over the years, Oriental has developed products using highendtechnology and these products have resulted in enduringbenefits for the end users. Due to its rich experience, OrientalCOAL INSIGHTS 16 November 2010

Cover Storyfull fledged R&D Laboratory wherenew products are developed andstringent tests & checks are carried outas per international standards. Orientalbelieves in constant innovation and wasthe first Indian company to manufactureSynthetic Fibre Reinforced Conveyorbelts in India in the year 1978. This hasbeen consistently topped up by severalother achievements, since then. Justrecently, Oriental introduced its MAXXSTEELFLEX Belt, which offers notonly greater impact resistance but alsooffers rip protection, in steel cord beltapplications.has established several landmarks in product developmentto provide enhanced productivity, longer belt life and tominimise downtime in specific applications. Oriental has aDo you have interest in any otherareas?Oriental is responsible for offering worldclass fasteners, belt cleaners and otherallied belt maintenance products fromFlexco, USA, to customers in India, through its subsidiary,Quadrant Trades Pvt. Ltd.COAL INSIGHTS 18 November 2010

coal market fundamentalsGlobal thermal coal prices shoot upArnab MallickGlobal thermal coal prices are on fire once again. Strongdemand from the Asian markets, primarily China,along with growing supply side concerns in the twomajor thermal coal producing countries, namely Indonesiaand Australia, has pulled up global thermal coal prices to nearyear-high levels over the last one month.Chinese demand for thermal coal has been very high as thecountry, which incidentally is the world’s largest consumerof coal, is stocking up ahead of an expected chilly winter inJanuary, when demand for electricity is expected to climb.Besides, the demand for coal from the country also shot upwith China hosting the Asian Games.The demand is likely to be further bolstered ahead of thewinter months with utilities planning to increase stocks forwinter. But traders informed that so far, not many deals havebeen concluded due to constrained supply, as the Chinese staywary of paying high prices.There were rumours that Chinese buyers were buyingin the spot market. This helped global thermal coal prices,including South African thermal coal, gain some significantsupport.Price of thermal coal has been affected due to supplyside constraints as well. On the supply side, there have beenproduction losses due to rains in Indonesia which have led totightening of supplies in the region.As per reports, many producers have informed that theyhave fallen back by as much as 5 to 10 percent short of theirproduction targets. In addition to this, rains in Queensland11010510095908515-Jan29-Jan12-Feb26-Feb12-Mar26-Mar9-AprglobalCOAL NEWC Index23-Apr7-May21-May4-Jun18-Jun2-Jul16-Jul30-Jul13-Aug27-Aug10-Sep24-Sephave also hit Australian coal production in the past fewmonths, although this has not significantly affected thethermal coal market.However, market insiders are of the opinion that an intensecyclonic season this year is likely to hit thermal coal mining aswell and tighten supply significantly.According to the globalCOAL NEWC index, thebenchmark price index for the Asian market, thermal coalprices improved to $108.47 per ton for the week endedNovember 19 as compared to $96.91 per ton for the weekended October 15.A rather sharper price increase has been observed in theSouth African coal price trend. According to globalCOALRB index for South African coal, price of thermal coalimproved to $105.69 per ton for the week ended November19 as compared to $87.89 per ton for the week endedOctober 15.In this context, Richards Bay Coal Terminal (RBCT), Africa’sbiggest export facility, has reported that its shipments toucheda monthly record high in October. As per the informationfrom the port, outbound deliveries stood at 7.38 million tons(mt) as compared to the previous record set in December 2005for 7.24 mt.The terminal shipped 61.14 mt of coal last year andexpanded its capacity in the current year by 26 percent to 91mt. Higher shipments also helped to reduce the terminal’scoal stockpiles by 32 percent from a month earlier to 2.94 mtas of the end-October period.RBCT received 5.86 mt of coal lastmonth, down 3.3 percent from thelevel witnessed in September, as peravailable figures. Total import andexport tonnage of 13.38 mt, handled inOctober, exceeded 13.24 mt recordedin December 2005, the terminalreported. RBCT has exported 52.09 mtof coal so far this year.By the year end, RBCT is expectedto export around 65 mt of coal, higherthan the level achieved last year.The performance this year has beenaffected by the transport strike inMay and port workers strike in July.Also, the infrastructural bottlenecks,particularly the inadequacy of railtransport facility, has been a major8-Oct22-Oct5-Nov19-Novhurdle for increasing exports.As per latest data, coal exportsCOAL INSIGHTS 20 November 2010

coal market fundamentalsthrough Australia’s Newcastleport, the world’s largest coal exportterminal, have however, declinedfor the week ended November 8,as compared to a week ago. As perdata released by the port, NewcastlePort transported 1.99 mt of coal forthe week ended November 8 ascompared to 2.32 mt transportedthrough the port for the previousweek ended November 1.There has been a further declinein the following week as the exportdeclined to 1.96 mt for the weekended November 15.Data revealed that the numberof vessels waiting outside the porthas also increased during this weekas compared to the previous week.For the week ended November 8,there were about 15 vessels waitingoutside the port as compared to 14 vessels queued up at theend of the previous week on November 1.However, despite the marginal increase in the numberof vessels queued up at the port, the average waiting time106104102100989694929088868482805-Feb12-Feb19-Feb26-Feb5-Mar12-Mar19-Mar26-Mar2-Apr9-Apr16-Apr23-Apr30-Apr7-May14-May21-MayglobalCOAL RB Index28-May4-Jun11-Jun18-Jun25-Jun2-Jul9-Jul16-Jul23-Jul30-Jul6-Aug13-AugWeek ended20-Aug27-Aug3-Sep10-Sep17-Sep24-Sep1-Oct8-Oct15-Oct22-Oct29-Oct5-Nov12-Nov19-Novfor vessels has improved to 13.15 days for the week endedNovember 8, as compared to 13.12 days reported for the weekended November 1. Meanwhile, this number has come downsignificantly later. It is expected that coal loading in the portmight come down further in the following week.26-NovCOAL INSIGHTS 21 November 2010

coal market fundamentalsCoking coal prices on the declineArnab MallickMetallurgical coal prices with the blast furnace(BF) steel producers for the third quarter of thefiscal year 2010 (October-December) have beenfinalised for all types, reflecting worldwide loose supplyposition. It has been for the first time since the turn of thefiscal year 2010 that prices for metallurgical coal have beenreduced.As mentioned earlier in Coal Insights, out of these, for hardcoking coal, the negotiations between the BF steel producersand BHP Billiton Mitsubishi Alliance (BMA) ended inagreement on August 30.The prices of main brands of hard coking coal exported byBMA in the third quarter became $209 per ton fob each for PeakDowns and Saraji coal, $205 per ton fob each for Goonyellacoal and Riverside coal, $195 per ton fob for Norwich Parkcoal and $190 per ton fob for Gregory coal with price reductionof $16 to $20 per ton 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 withthe reduction of $40 per ton (22.5 percent) from the previousquarter.Furthermore, from end August through early September,the prices of LV PCI coal produced in Queensland Australia,have been settled one after another.The market sources said that LV PCI coal for the thirdquarter became $147 to $150 per ton fob, down $30 to $33 perton (16.7-18.3 percent) from the level witnessed in the previousquarter.On the other hand, for semi-soft coking coal, negotiationswith several independent suppliers ended in agreement andwith these suppliers, the prices for semi-soft coking coalloaded at Newcastle were settled at $138 to $140 per ton fob,down $32-$34 per ton (18.6-19.8 percent) from the previousquarter.In contrast, the negotiations with the two largestsuppliers of semi-soft coking coal, Xstrata and Rio Tinto,took longer time and the agreement on semi-soft cokingcoal exported by these suppliers could not be reachedwithin September.In mid-October, however, at long last, the price of semisoftcoking coal loaded at Newcastle by Rio Tinto was fixed.The price of semi-soft coking coal for the third quarter became$143 per ton fob. This represented a decrease of $29 per ton(around 16.9 percent) from the level reported in the previousquarter.As a result, semi-soft coking coal price of Rio Tintobecame higher by $3-$5 per ton as compared with those of theCoke under pressureThings have been getting a bit tough for coke makersacross the world and surely India as, on one hand,prices of steel are failing to cheer up the marketwhereas on the other, relatively higher coking coalprices are putting tremendous pressure on margins.Meanwhile, it has been learnt from media sourcesthat Eastern China’s Shandong Coking & ChemicalIndustry Association (SCCIA) lifted its coke referenceprice and was calling on coke producers to keep theiroutput at 30 percent of capacity. According to availablereports, the SCCIA issued a notice on October 31 andraised its reference price for first grade coke to RMB1950 per ton ($293 per ton) from September’s referenceprice of RMB 1850 per ton. The reference price forsecond grade coke also increased by RMB 100 per tonto RMB 1850 per ton.Experts are, however, of the opinion that cokeexports from China are likely to remain low in theforeseeable future and with 40 percent export tax,prices are likely to remain comparatively high.At the same time, supply reduction in China willhopefully keep prices firm. According to marketsources, Chinese coal coke market has been remainingfirm as coal coke production has been continuouslyreducing and the upward movement of the coal cokemarket is due to the increase of metallurgical coalprice with the commencement of the winter season,resulting in soaring demand for heating. Demand inmetallurgical coke in the Chinese market did not turnupward.Influenced by this movement, export price has beenincreasing. The offer price for export of metallurgicalcoal coke (with ash content of 12.5 percent) seems toincrease to around $450 per ton fob with export taxof 40 percent included during the beginning of themonth.independent suppliers. The price negotiations with the blastfurnace steel producers on Hongay anthracite of Vietnameseorigin for the third quarter of the fiscal year 2010 (October-December) was heard of having been completed during thelast week of October.The contract price for the third quarter of Hongay no.6COAL INSIGHTS 22 November 2010

coal market fundamentalscoal for PCI operation was setat $150 per ton or so, whilethat of the Hongay no.8 coalfor sintering was set at $143per ton fob or so, with pricereductions of $30 per ton (plusabout 17 percent) for no.6 coaland $27 per ton plus (about16 percent) from the first sixmonths of the fiscal year 2010(April-September).In the meantime, spotprice of hard coking coalhas been trading in line withQ3 contracted price. As peravailable information, spotprice of prime hard coking coalhas been hovering at around$205-$210 per ton fob Australiaaround November 8 on back ofweak demand from the steelmakers.Things have been slightlybetter and the prices gained around $5 per ton fob Australiain the following week.This was significantly lower than the recent high level of$222-$225 per ton fob duringthe last trading days of October,as per data available with CoalInsights.Similar movement was seenin semi-soft coking coal pricewhich has been quoting ataround $180-$190 per ton fobaround November 8 as comparedto $192-$205 per ton fob duringOctober end.A section of analysts are ofthe opinion that steel prices inChina, which have been largelyinfluenced by its monetarypolicy, will significantly impactthe price trend of crucialsteelmaking raw materials.These include coking coal andcoke.In the meantime, movingin line with its typical seasonaltrend, domestic coking coal pricesin China’s Shanxi province are expected to get steady supportas mill and coke plants have slowly started re-stocking aheadof the winter holidays.COAL INSIGHTS 23 November 2010

FeatureCIL may hike prices in 2011Coal Insights BureauAfter a year-long gap, coal prices in India are on therise. Days after the successful float of its initial publicoffering, Coal India Ltd (CIL) announced a rise in theprices of higher grade coal to be charged from select users. Thisincrease would bring parity with import prices of Indonesiancoal, and perhaps help restrict the demand for those gradesin the domestic market. For other grades too, the tremendousappetite for coal in the economy is sure to lead to an increasein prices, sometime next year.Along with demand growth, the revision of wages andCIL’s plan to increase the share of washery grade coal in totaldespatch would put pressure on its margins, thus necessitatingan increase in prices.Yet another major factor would be the introductionof the provision for profit sharing by coal companieswith project-affected communities. The distribution of 26percent of profits earned from new projects to the localpopulace will be compelling enough for CIL to seek a pricerevision.Coal minister Sriprakash Jaiswal has hinted just as much,and CIL sources indicated that a price increase could precedeor follow the retirement of chairman, P.S. Bhattacharyya,scheduled for early 2011. In such a scenario, the recent surge ininternational coal prices might look tempting enough to forcean early decision.Import parity priceIn late October, CIL decided to charge import parity price forsupplying higher grade (Grade A and B) coal from specificconsumers with immediate effect.Industry sources said they have received a communicationin this respect from Western Coalfields Ltd (WCL). Thecommunication from WCL stated that the board of its parentcompany, CIL, has directed all the subsidiaries to supplyGrade A and B coal to specified consumers under the MoU ata special price.This special price would be determined on import paritybasis in respect of coal imported from Indonesia as per themethodology suggested by the coal ministry. The special pricewill be reset and re-fixed every six months based on the latestprice of imported coal from Indonesia.The coal ministry has further directed to sell high qualitynon-coking coal at export parity price as determined by importprice at the nearest port minus 15 percent.To start with, the revised price will be in effect for somecement sector consumers of Western Coalfields Ltd (WCL),a subsidiary of CIL. These cement companies have beendirected to execute MoU with WCL for supply of Grade Bcoal at this special rate. These consumers have further beendirected to send their responses to the proposal within afortnight.However, if these companies decline the offer, this coalwill be offered to other consumers having requirement forthe same. The revision in prices is likely to impact spongeiron and cement manufacturers in particular, the sourcessaid.A price revision in 2011?CIL is also likely to increase the prices of various grades ofcoal from April-May of 2011, Coal Secretary C. Balakrishnansaid. “CIL may have to increase prices after revision of wagesof its workers sometime in February-March 2011. Once that(wage revision) is done, it may pitch for upward revision incoal prices in April-May. The chairman has already givenindications about this,” he said.Balakrishnan, however, did not elaborate on the likelyrange of the increase. CIL had last revised prices by around10 percent on an average in October 2009, after a two-yeargap.Meanwhile, Jaiswal has cited the profit-sharingproposal under the Mines and Mineral (Development andRegulation) Amendment Bill as a trigger for a possibleprice increase.“There may be a price rise,” he said, but insisted that theministry will go ahead with the proposal anyway. The draftbill, which proposes that mining companies must share26 percent of profit or 10 percent of royalty, whichever ishigher, with the displaced people, is likely to come intoforce soon.The CIL chairman, however, has cited yet another ground– increased share of washed coal - for an increase in coal pricesin India, though on a longer term.“We have already started work on setting up 20 washerieswith a combined capacity to wash 111.3 million tons of coal andall these washeries will be in place by 2017. In addition, we aresetting up linked washeries for all the existing and upcomingprojects with annually capacity of 2 mtpa,” Bhattacharyyasaid.He further said the increased supply of washed coal willenable the company to charge a premium over and above thenotified price of ROM coal and that will immensely benefit thecompany’s bottomline.“If quality coal is offered to consumers, we have to sell itat a premium, but certainly at a discount over imported coalCOAL INSIGHTS 24 November 2010

Featureprice so that the cost of generation of power remains low,” hesaid.Surge in international pricesMeanwhile, coal prices across South Africa, Australia andother places continued to surge in November on the back ofhigher demand from Asian countries, traders said.The price of AP1 grade South African coal was quoted atabout $102.50 per ton on November 11, up $1.65 comparedwith $100.85 quoted on November 10. In Australia, the pricessurged by around $1.75 per ton to $108.00 from $106.25 per tonon November 10.Firmness was also seen in Indonesian and Columbianmarkets, traders said, but exact details were not available.Though details of thermal coal export from Australia toAsian countries is not available, the data available with ICMWsuggests that South Africa’s coal export to Asian countriessurged 28 percent month-on-month in October.The total export to Asian countries form RBCT in Octoberrose to 4.25 million tons (mt) from 3.32 mt in September. Forthe 10 months ended October 2010, total imports by Asiancountries exceeded 36.04 mt, about a 13 percent increase over31.79 mt posted till September.The spurt in international coal prices, particularly ofSouth African origin, has forced a large number of Indianconsumers, especially those in the cement sector, to go slowon finalising deals for imported thermal coal, an industrysource said.“Not only have prices become slightly unattractive at over$100 per ton fob for South African coal, for a majority of Indianconsumers, higher stocks with stock-in-trade dealers is alsoleading to lower enquiries from Indian suppliers,” the sourcesaid.“There had been a moderate increase in import of thermalcoal by a number of traders in the last two months. They hadstocked the material and are now looking at opportunities tosell at higher price after the recent jump in international prices.However, most of the consumers have not yet made up theirminds to make purchases at over $100 per ton fob and theyare awaiting prices to soften before making any commitment,”said a consumer.“Very few deals have been struck by Indian buyers forSouth African coal in recent times,” he added.Coal prices started rising sharply from middle of Octoberbacked by huge demand from China and according to forecastby leading brokerage/analyst firms, are likely to go up furtherby 15 percent in 2011.COAL INSIGHTS 25 November 2010

FeatureCIL bids for Colombian coal assetCoal Insights BureauCoal India Limited (CIL) has bid for participatory stakein a thermal coal producing asset in Colombia. CILis learnt to have placed a bid for Colombian assets ofUS based Drummond Co. as the PSU looks to buyout minesoverseas as part of its `6000 crore global acquisition plans.CIL chairman, P.S. Bhattacharyya, commented on theevent, saying that, “We have bid for participatory stake in anasset in Colombia. In our estimation, the price is on the higherside. CIL would be interested in picking up stake in the assetto gain access to high calorific value equity coal to be sold inIndia. We are not interested in mere trading of coal abroad.We are interested to market this coal at a competitive price inIndia to meet the country's energy needs.”He added that “accordingly, we have to strike anequilibrium between the price of the asset versus the heatvalue of the coal so as to justify the high freight cost. In thefinal analysis, the landed cost of the equity coat should becheaper than the existing import options, to justify acquisitionof interest abroad.”According to the company, if the heat value of the coalexceeds 6500 kcal, it would compensate the high freight costfrom Colombia against the 5000 kcal thermal coal importedfrom Indonesia.With recoverable coal reserves of about 7.4 billion shorttons, Colombia accounts for about 1.1 percent of the world’stotal annual coal production. The country is the largestproducer in Latin America and accounted for around 76million tons (mt) of coal in 2009.Among the coal exporting countries, Colombia ranksfifth, after Indonesia, Australia, South Africa and Russia.According to official data, the country exported 72 mt of coallast year.The production and export of coal in Colombia is estimatedto touch 83 mt and 80 mt, respectively, this year, as per reports.Unlike some of the largest coal exporters, the Colombiancoalfields are yet to reach the maturity stage.The financial crisis in North America and Europe, theconventional buyers of Colombian thermal coal, led to aquest for untapped markets and a concurrent growth in coaldemand from China and India made the search easy.In case of Asia, the transportation time and high freightcosts of carrying coal from Colombia were thought to beoutweighing the advantages of quality or low productioncosts. This outlook, however, underwent a change undereconomic compulsions last year.Colombia, which did not export coal to Asia till 2009,started tapping the growing demand from Asian marketsfrom the start of the current year. In the first half of 2010,Colombia’s coal exports to Asia touched 5.8 million tons (mt).Total exports this year is expected to reach 9 mt to 10 mt. Ofthe total exports in the first half, 2 mt was exported to China,1.8 mt to Korea and the remaining part to Japan, Thailand,Taiwan and India.The first ever shipment of Colombian coal (about 1,40,000tons) to India occurred in the second quarter of 2010. Theconsignment was brought by Adani Enterprises and wassupplied by Coal Marketing Company (CMC) Ltd.CIL has also received offers from one private andanother public sector entity respectively, to join them indeveloping coal assets in Australia. P.S. Bhattacharyyaconfirmed that one of these offers came from Adani groupwhich had recently struck a AUS$2.9 billion (approximately` 13,000 crore) deal with Australia’s Link Energy to acquirecoal assets.“Recently, we have received another offer from anIndian public sector undertaking to participate with them indeveloping coal assets in Australia,” Bhattacharyya said.Given India’s bulging import requirements and pricevariations in global coal market, Indian consumers will have toincreasingly look at other destinations like Australia, Russia,Colombia and as far as the US, to meet their requirements ofimported thermal coal.COAL INSIGHTS 26 November 2010

FeaturePCI coal imports from SAlikely to riseCoal Insights BureauIndian steel makers may procure larger amounts of SouthAfrican Pulverised Coal Injection (PCI) coal because of afreight advantage compared to Australia, as per an officialof a leading steel making company. That Indian companies areimporting limited quantity of PCI coal from South Africa couldbe ascertained from the fact that out of the total of around 11million tons (mt) of coking coal imported by Steel Authority ofIndia Ltd (SAIL), only around 0.5 mt was from South Africa.After a 13.72 percent increase in September, India’s coalimports from Richards Bay Coal Terminal (RBCT) of SouthAfrica was up once again by 15.57 percent to 2.165 mt in October,compared to 1.873 mt recorded a month ago. India’s share inSouth Africa’s total coal exports was 29 percent for the monthof October 2010. India’s total coal imports from South Africabetween January and October 2010 stood at 17.325 mt, whichwas 14 percent higher than 15.160 mt posted till September2010. Imports during April-October of financial year 2010-11stood at 12.649 mt, which was 10.14 percent higher than 11.485mt imported during the same period of 2009-10.This year, Asia is expected to become South Africa’s primarycoal export destination, with some analysts estimating that upto 75 percent of the country’s product will go east with enquiriesfrom India far more than the first quarter. Almost all steelmakers in India are now setting up Cold Dust Induction (CDI)plants to reduce consumption of coke and keep production costof steel low. PCI coal import by Indian companies is thus likelyto see a sharp increase. Only 1 ton of PCI coal is required inplace of 1 ton of coke in the blast furnace and that significantlyreduces the cost of production of steel and is prompting moreand more steel plants to set up CDI plants.Again, India is a price rather than quality-driven market.End-users are likely to switch to South African from AustralianPCI coal also largely because the delivered cost of South Africancoal might offer a saving of several dollars per ton. SouthAfrican exports have been affected in 2009 due to rail transportlimitations, but are likely to rise this year. With the improvementin performance of rail firm, Transnet, at least one South Africancoal mining major expects that coal exports through RichardsBay Coal Terminal (RBCT) will exceed 65 mt in 2011.The Indian companies who had recently picked up stakes orsigned coal lifting agreements with South African coal minersare facing difficulties in bringing the material to India becauseof problems associated with transportation of coal from minesto RBCT. A lack of infrastructure and capacity at India’s portscould also hamper the delivery of imported coal, with anestimated 55 percent of coal imports to be handled by minorports with low draft and poor cargo offloading facilities.COAL INSIGHTS 27 November 2010

FeatureFocus on Orissa as India’s power hubCoal Insights BureauOrissa, a state which has 70 billiontons of coal reserves, as muchas 26 percent of India’s totalreserves of 270 billion tons, can be India’supcoming power hub if it follows a multiprongedstrategy. The mineable reservesout of this 70 billion tons may be 50 billiontons due to availability at shallow depth,J P Pandaand the reserves are slated to last for morethan 100 years.Faster forest and environment clearances, faster landacquisition with good compensation package, fasterinfrastructure development, faster training and skilldevelopment for employability and a sound corporate socialresponsibility (CSR) package are some of the strategies thatwould be crucial to turning Orissa into the country’s powerhub.According to the vice-president of Aryan Ispat and PowerPvt Ltd and former executive director of Coal India, J.P. Panda,Orissa’s coal reserves can be mined at a cost of only `200 perton against Coal India’s notified price of nearly `500 per ton.Coal is the country’s main source of energy, constitutingnearly 53 percent of the present generation, and will continueto be so for at least another 30 years, Panda said.He informed that the present power requirement of thecountry is 900 billion units and the country is producing only770 billion units, leading to a shortage of approximately 120billion units. As projected by the Integrated Energy policy ofthe government of India, the country’s requirement of powerby 2012 will be 220 GW, which will go up to 425 GW by 2022and 778 GW by 2032.The National Electricity Policy aims for a per capitaavailability of 1000 units, installed capacity of 2,00,000 MW,minimum lifeline consumption of 1 unit per household perday and inter regional transmission capacity of 37,000 MWThe aim notwithstanding, Panda feels India is headed foran impending power famine. With 9 percent GDP growth, thepower requirement will grow exponentially and India will facepower famine in a few years from now unless it takes multiplemeasures to produce the required quantity of coal and power,Panda feels. The impending disaster is acute shortage of coaland hence power in this country.A KPMG report said that: “India may face a coal shortfallof 189 mt a year by 2015, about 50 percent of the power sector’sexpected demand, leading to a two to three-fold increase inimports.” Thus, in spite of such huge reserves, India will beforced to import coal at abnormally high costs.Panda said that reports put Orissa’s investment in thepower sector at `74,000 crore, which is the highest in India andhe feels the state is well placed to meet the demand provided awell thought out policy is in place.The bottlenecksAccording to Panda, nearly 210 blocks worth 50 billion tonshave been allotted for captive mining so far, out of which only26 have started production and have produced only 30 milliontons (mt) against a target of 100 mt. Unfortunately, however,not a single private sector mine has started production inOrissa and the primary reasons for this delay is inordinatedelay in land acquisition as well as environment and forestryclearances. The time taken for such clearances in Orissa ismore than double compared to other states, Panda feels.This is in spite of the fact that Orissa is privileged to haveall the reserves within quarriable limit. The reserves also havea favourable coal and overburden ratio of 1:1 up to a depth of200 metres.If land acquisition in Chhattisgarh takes less than twoyears and less than one year in Gujarat, probably it is possibleto do the same in Orissa also, only if the government wantsto do it, Panda opined. He said just a simple cutting down onthe red tape should make the process faster, and all officialsconcerned must be made accountable as it is a question ofmassive losses for the nation. If the demand for coal can bemet from domestic supplies, the country can avoid importingit.According to Coal India’s director technical N.C. Jha’spaper at Coal Summit 2010, the country proposes to importnearly 200 mt of coal by 2015-16 at `1,30,000 crore, Pandarued. The present import figure is 67 mt, and that costs thecountry nearly `43,000 crore. Coal India produces 432 mt atDelays in land acquisition in OrissaTime taken for the various activities in the state :♦♦Application to IPICOL♦♦Scrutiny of documents at IDCO♦♦Administrative approval by mininstry♦♦Scrutiny of documents by collector♦♦Collector to RDC♦♦Section 4(1) notification♦♦Section 5,6,7,8,9,10,11,12 & 13♦♦Physical possession♦♦Total6 weeks10 weeks36 weeks10 weeks10 weeks18 weeks60 weeks24 weeks174 weeksCOAL INSIGHTS 28 November 2010

Featurean expenditure of `53,000 crore. This means that if the countryhad invested about `43,000 crore on indigenous coal mining,the production could have been nearly 400 mt, which wouldbe more than double the present production.The way outPanda feels it is unfortunate that while we are willing tospend so much on imports, we are not willing to pay theland losers even a fraction of that money. In fact, we caneven spend a fraction of that money to develop coal mines.He suggests that a massive afforestation drive can also be ananswer to concerns regarding ecological imbalances causeddue to mining. If mining destroys, say, 100 sq km of forest,we can create new forests of 200 sq km. He said that some coalcompanies like NCL, SECL, MCL, SCCL and Neyveli Lignitehave done an admirable job in afforestation. In NCL, not onlyhas the environment improved, rainfall has increased from 32inches per year to nearly 50 inches.Panda feels that economic activity should not be stalledin the name of environment protection and if needed,investments should be made on clean coal technologies.He also feels that forest clearances should not be delayed.Rather, forests should be created from part of the same moneycollected from the project proponents. A large amount ofmoney deposited by project proponents for compensatoryafforestation is lying unused by the Ministry of Environmentand Forests (MoEF) and that should be used to create moreforest cover.The role of the state govtAccording to Panda, it is almost impossible to procure landwithout the state government’s cooperation. It is essential tofix responsibility for the delays – the state government andcentral government officers, bureaucrats and even the projectproponents must be held responsible for the long delays inclearances.In view of the impending disaster due to power shortage,the government must act fast, or it will be too late, Panda feels.Environment clearances must be granted fast with strict riders.Monitoring of environment parameters needs to be done andstrict action needs to be taken against offenders. New forestsmust be added to the country’s green cover as a replacementfor the forests that will be lost to mining. Infrastructure ofrail and roads must be fast tracked, and otherwise the coalproduced will not move. Non-clearance of projects because itis falling in the forest area should be discarded as a policy andthe dynamic policy of fast compensatory afforestation mustbe taken up.Panda suggests that land losers must be providedemployment, and they must be trained on the required skillsin advance. Self-employment must be encouraged, and theymust be trained in entrepreneurship. A robust CSR policy, in anutshell, should be the key to the problem.IWAI aims to win awaycoal cargo from RailwaysArindam BandyopadhyayThe acute shortage of rail wagons for carrying coal in Indiasuddenly seems to bring hope for the perennially sickinland waterways sector. Inland Waterways Authorityof India (IWAI), the nodal agency for the development of theNational Waterways (NW), is well aware of the increasedstockpile at various coal mines and is planning big to attractthis cargo. Given the huge potential of NWs as an alternateroute, even a modest success in IWAI’s endeavour could leadto a win-win situation for Coal India Ltd (CIL), IAWI and thepower utilities, which are the biggest consumers of coal in thecountry.“We are aware of this opportunity, Indian Railway’s(IR) wagon shortage and the unmet requirements of powerutilities. We are seriously looking at developing NWs as analternate route for coal cargo,” a top official of IWAI told CoalInsights.To start with, IWAI is targeting to develop NW1 – theGarga-Bhagirathi-Hoogly river system between Haldia(Sagar) and Allahabad. This 1620-km route, once completewith loading and unloading terminals and barge facilities,will ease the logistics problem faced by power utilities fortransporting coal imported through Haldia port, the officialsaid.IWAI is holding talks with a number of power utilities,including NTPC, as well as port facility developers to kickstarta pilot project.The only question mark over the success of this projectis the how cost competitive the new route will be vis-à-visrailways and, more importantly, how soon the central agencycan take those baby steps.Haldia-Farakka route for NTPC plantsNTPC has been one of the first few companies to explore thealternate route via NW1 for carrying coal from Haldia to itspower plants at Farakka, Kahalgaon and Barh in West Bengal.IWAI in discussion with the state-owned power generatorhas appointed IL&FS as consultant to study the viability ofcarrying coal via NW1.According to sources, IL&FS is expected to float a finaltender by March 2011 for developing coal berthing, loadingand terminal facilities at Haldia and Farakka. This tendercould be limited for 12 companies who had given Expressionsof Interest (EoI) two months ago.As per the arrangement, NTPC would take a call onwhether to shift the entire coal requirements of Farakkaunit to NW1 only after comparing the cost of transport viarail and waterways. The major constraint for carrying coalCOAL INSIGHTS 29 November 2010

Featurefrom Haldia to Farakka is the shortage of rakes and portcongestion.Although intended for the 1600 MW Farakka unit ofNTPC, these facilities, once set up, could also be used byother power plants for carrying coal via waterways, thesources said.“This would help power plants procuring coal throughHaldia to avoid the delay in transportation due to shortage ofrailway rakes,” a spokesman of Kolkata port said.WBPDCL explores water routeAfter NTPC, West Bengal Power Development CorporationLtd (WBPDCL) is also exploring the possibility of carryingcoal for its Sagardighi power plant in Murshidabad fromHaldia via the river Hooghly (NW1), sources said.“One barge full of cargo will be sent from Haldia inNovember on a trial basis to see if carrying coal via NW1will be cost competitive and less time consuming,” theysaid.The 2 x 300 MW Sagardighi Super Thermal Power Planthad started commercial production in 2008. Currently, twomore coal based units (2 x 250 MW) are being added by thecompany. According to IWAI officials, more and more numberof power utilities would look for shifting their coal cargo fromrailways to waterways in future. If the cost factor is provedfavourable, NWs may attract the raw material traffic for anumber of power generators having units along the banks ofthe Hoogly.The cost of transporting cargo via waterways will dependon the charges levied by berth developers and privateagencies erecting the loading/unloading facilities. “Thesecharges will be decided by the developers and be charged tothe users of these facilities,” IWAI officials said, adding thatIWAI will restrict its role to maintaining the navigability ofthe river.CIL’s benefit from NWsAlthough CIL will not be a party to it, the state-owned coalminer will greatly benefit from such projects. CIL is overtlyconcerned with the shortage of railway wagons and increasingstockpile at its mines. According to some estimates, pitheadvendible closing stock at various mines of CIL may cross astaggering 70 million tons (mt) as on March 31, 2011.“In comparison to last year, the stockpile at various minesis at a substantially higher level. At this rate, the closing stockmay cross 70 mt by March 2011, compared to 63.3 mt in March2010,” industry sources said.As on the last day of September 2010, closing stock atvarious mines of CIL stood at 49.230 mt, against 37.90 mtreported for the last day of the same month last year. Theprimary reason for this increase in stock this year was theshortage of railway rakes, the sources said, adding: “Thisis further accentuating the problem of supply of coal in thecountry. If the problem persists, even increased importswon’t help meet the growing demand.” Among thesubsidiaries, Mahanadi Coalfields Ltd (MCL) had the highestclosing stock of 16.988 mt as on September 30 (18.498 mt ason August 31) compared with 14.193 mt in the correspondingmonth of 2009.However, over the last six months, the closing stock atvarious CIL mines has dropped steadily from 60.29 mt as onApril 30 to 49.230 mt on September 30. This drop was causedmainly by increased availability of wagons during off season(for most other sectors, including agriculture) and lowerproduction by the company.Fuel supply agreementsConcerned with the increasing stockpile of coal at variousmines, CIL is looking forward to signing fuel supply andtransport agreement (FSTA) with its coal consumers, but isconstrained by the lack of response from the Railways, CILsources said.“We are ready to sign FSTA with consumers having aminimum annual requirement, but cannot go forward in theabsence of any response from the Railways. Signing FSTA willensure faster dispatch and reduce inventory at mines,” thesources said.The FSTA is a tripartite agreement between the coalsupplier, transporter and consumer whereby any party failingto honour its commitment will have to pay compensation.However, the proposal, which was in line with the newcoal distribution policy (NCDP), has evinced little interestfrom the Railways as there is perennial shortage of rakes fortransporting coal from pithead to the plants.Earlier, the Railway’s ‘own your wagon’ scheme had alsofailed due to the Railway’s inability to ensure availability ofrakes to the rake owners during requirement, industry sourcessaid.Major hurdles for NWsThe development of NWs, however worthwhile it may sound,is not without its share of hitches. The biggest hurdle isperhaps the slow execution of projects by IWAI. The agencyhad signed a MoU with NTPC on September 24, 2008 fortransport of imported coal from Haldia to its thermal powerplants. NTPC had assured of a cargo throughput of 2 to 3 mtpaof coal on sustained/regular basis and IWAI had to ensureavailability of sufficient number of barges for transportingthe same. Two years later, IWAI is still struggling with theplanning and execution.Another major hurdle may be a lack of significant costsavings for potential users. Also, the problem of stockpileat CIL mines could be mitigated by increasing the supply ofwashed coal, something that the company is seriously lookingat. Once the proposed new washeries of CIL come up, “withsame number of wagons, around 20 percent more coal can besupplied,” CIL sources said.COAL INSIGHTS 30 November 2010

FeatureMoEF seeks coal quality dataArindam BandyopadhyayIn yet another jolt to coal-based core sector projects,the Ministry of Environment and Forests (MoEF) hasannounced that it will hold up thermal power, steel andsponge iron projects seeking environment and forest clearancetill such time as they furnish coal quality data. In a recentnotification, the ministry declared that such projects will bedeferred until information about the source and quality of coalis provided.“In order to assess the likely adverse environmentalimpacts of such projects, it is desirable to have informationabout quality of coal to be used. In the absence of correct dataon the quality of coal, the quarrying capacity may be computedwrongly, which may have adverse impact on environment,” astatement issued by MoEF said. The ministry further said thatit has come across a number of instances where substantialinvestments has been made even before the requisiteenvironmental and forestry clearance about the coal blocks isobtained. This in turn leads to avoidable delay in completionof such projects and results in blockage of financial resources.Therefore, “it has been decided that all such proposalsrelating to thermal power, steel, sponge iron which arepending with the ministry or state for consideration ofenvironmental clearance shall be deferred and delisted till thestatus of environment and forestry clearance of the coal supplysource for Indian coal or the memorandum of understandingfor imported coal is furnished,” it said.Henceforth, the ministry said, all infrastructure projectsusing coal as a raw material shall be considered only after thefirm coal linkage is available and the status of environmentand forestry clearance of the coal source is known.Projects awaiting clearanceMeanwhile, there is a huge backlog of projects waiting forenvironmental and forest clearances from MoEF. As ofNovember 16, 2010, 77 thermal power projects, 212 miningprojects and 738 industrial projects were awaiting finalisationof the terms of reference (TOR), an essential step towardsgetting environmental approval. All of these project proposalswere received after April 4, 2009, ministry data shows.Among the thermal power projects (pending TOR), themaximum number of projects (13) are proposed to come upin Maharashtra. This number is followed by 10 projects eachin Andhra Pradesh and Madhya Pradesh, six projects inTamil Nadu, six projects in Jharkhand, five projects each inRajasthan and Gujarat, four projects each in Bihar, Orissa andChhattisgarh, two projects each in Assam, Punjab, Haryanaand Uttar Pradesh, and one project each in West Bengal andDadra & Nagar Haveli. Along with this, one thermal project,namely the 1980-MW coal based thermal power plant of AdaniPower at Gondia, was awaiting forest clearance.In the mining sector, 212 projects are awaiting TOR forenvironmental clearance. These include coal, lignite, ironore, limestone, manganese ore, bauxite and minor mineralssand quarries, among others. Of these, 33 projects will beundertaken in Jharkhand, 15 in Orissa, 12 in Madhya Pradesh,11 in Gujarat and eight in Chhattisgarh.Additionally, 177 mining projects are in the pipelinefor forest clearance. Of these, 32 are slated to come up inJharkhand, 30 in Madhya Pradesh, 25 in Andhra Pradesh, 18in Chhattisgarh, 15 in Orissa, 13 in Karnataka, and nine eachin Rajasthan and Himachal Pradesh. One of the projects – astone quarry at Hut Bay – will be undertaken in Andaman &Nicobar and will require diversion of 3.13 hectares of forestland.For some of the projects, the ministry has either soughtessential details from concerned state governments or isexamining details furnished by them.The industrial projects awaiting TOR include integratedsteel plants, ferro alloy plants, clinker grinding units,induction furnace units, sponge iron units, POL terminals,ferro manganese and silico manganese projects, coal washeriesand captive power units.Coal linkage backlogEnvironment and forest clearance proves a major blockade forcoal-based projects, but the slow pace of granting linkage bythe coal ministry is no less a hurdle. As of September 2010,1,267 applications were pending before the coal ministry, ofwhich 774 are thermal power projects, 355 sponge iron unitsand 114 cement projects.Among the 774 power projects, 92 applications are fromState Electricity Boards (SEBs) and private generators,aggregating new capacity addition of over 132,000 MW.Given the sluggish pace of growth in captive mining andno-go norms imposed by MOEF, it is only natural that thelong waiting period would lead to substantial time and costoverrun for these vital core sector projects. MoEF’s latestdiktat will aggravate the situation further.MoC’s stanceAccording to an estimate, a stage-I forest clearance for a coalmining project takes about four to four and half years at thestate level and 1.9 years at the Central level – high by anystandards.This prolonged delay in getting forest clearances hasput 154 projects of CIL at a standstill. Coal India Ltd (CIL)chairman P.S. Bhattacharyya, has recently urged the MoEF toconsider issuing environmental clearance for projects comingup in “open forest” areas within a period of 300 days.COAL INSIGHTS 31 November 2010

FeatureIMME 2010 brings global mining industryto Indian shoresCoal Insights BureauAltogether 230 companies from 22 countries took part inIMME 2010, the International Mining and MachineryExhibition held in Kolkata during November 10 to 13,making it the largest ever mining congress in Asia. The biennialevent, which started off in 1984, held special significance thisyear in view of the sudden spurt in coal and minerals demandin the country and the environmental and logistics challengesfacing domestic supplies.Organised by the Confederation of Indian Industry (CII)in association with the ministry of mines, coal and steel andCoal India Ltd (CIL), the event saw the participation of 450delegates from the mining, minerals and processing industrieswho came under one roof to share knowledge and forgebusiness ties. IMME 2010 comprised a four-day exhibitionat the Salt Lake stadium, a buyer-seller meet and a two-dayglobal mining summit on November 10-11.Partner country: AustraliaAustralia, the world’s largest coal exporter and a regularparticipant at the IMME since the beginning, was the partnercountry at IMME 2010, for the third time. Australia broughtthe largest ever mining delegation of government and industryto India at IMME 2010. Around 50 Australian companies putup the most modern technologies for the mining sector ondisplay.Speaking at a seminar organised on the occasion of IMME2010, Peter Linford, senior trade and investment commissioner(south Asia) of Australian Trade Commission (Austrade) saidAustralian mineral industry’s export to India had crossedA$115 billion in 2009-10. Given the huge appetite of Indianindustries for coal and other minerals and the expansionprojects undertaken by Australian government to increaseproduction, the export of minerals was likely to see substantialgrowth in coming years. Besides, the country could providesophisticated technology to the Indian mining sector, he said.With 11 offices across India, Austrade had the mostextensive network of any trade mission in India and betterplaced to help Indian companies invest in overseas miningblocks or increasing production from domestic reserves,Linford said.Focus country: GermanyGermany, a major player in the field of mining equipmentand technologies, was accorded the status of focus countryat IMME 2010. Germany brought the largest ever delegationof 40 companies this year. Earlier, it had participated aspartner country three times in the previous editions. Germancompanies displayed a range of mining equipment andproducts at the exhibition.Representatives of German mining machinery federationVDMA, present on the occasion, stressed on increasing therelationship with Indian mining companies to thwart the fiercecompetition from Chinese mining machinery manufacturers.International presenceIMME 2010 attracted the largest ever overseas participationfrom 22 countries including Australia, South Africa, Canada,China, Czech Republic, Finland, France, Germany, Japan,Afghanistan, Ireland, Russia, UK and the US.Products on display included large tippers (up to 50 toncapacity), alternators, automotive belts, backhoe loaders,blower motors, clamshells, compactors, crushers, conveyors,dragline, drilling machines, feeders, full range of miningconstruction equipment, heavy commercial vehicles, hydrauliccomponents, industrial belts, instrumentation and analyticalequipment, excavators and dumpers, among others.Along with the exhibition, the two-day global miningsummit saw the participation of around 300 delegatesfrom India and abroad. Prominent international speakersfrom government and industry addressed the gathering,covering subjects ranging from India’s mining sector policyand regulatory imperatives for accelerating investments,environment and safety issues in mining and CSR, makingIndian mining industry globally competitive, financingoptions and strategies for supporting large investments inIndia’s mining sector and business opportunities in India.The four-day exhibition and conference was attendedby around 25,000 visitors including architects, cementmanufacturers, chamber of commerce representatives,construction material suppliers, consultants, contractors andbuilders, among others.COAL INSIGHTS 32 November 2010

FeatureCoal miners savedduring gas leak at SCCLCoal Insights BureauAbout 20 mine workers were rescued from a coal mineunder the Singareni Collieries Company Limited(SCCL), in Warangal district of Andhra Pradesh, aftera sudden gas leakage. The workers were taken by surpriseafter a sudden gas leakage when they had unknowinglyentered an abandoned mine at the Bhupalpally unit of thecompany around 12 PM, which is when the accident occurred.Thick smoke began emanating from the mine while theminers were still engaged in cutting rocks. One of them whoinhaled the smoke fell unconscious even as others immediatelyalerted higher officials who sent a rescue team to the spot andall the 20 workers were taken out.A police officer present at the spot said that they are yetto ascertain if the gas leaked was carbon monoxide or of anyother variety. He added that, “there is no loss of life andproperty. Rescue teams have safely brought out the workersfrom the mine.” SCCL has reported around 12 casualties invarious accidents till September this year. The company hastaken all possible steps to reduce the accident rate to the barestminimum, with the ultimate aim of achieving zero accidentpotential. Buoyed by a fall in the number of mining accidentslast year, the Indian coal mining industry is working towardsreducing the number of fatal accidents in the country to zerolevel, coal ministry officials said.The SCCL board noted the recommendations of the FifthConference on Safety in Mines and approved implementation ofthe Safety Policy with the following objectives: to continuouslyreview all existing safety practices and to improve and updatethem as and when the changed circumstances demand; toensure that every one in the organization is aware of the safeworking methods and adheres to them on a day-to-day basis;to develop the skills of employees as only a skilled worker canbe a safe worker; to constantly evaluate the personal protectiveequipments available in the market and supply them to ouremployees and train them in their proper use.The coal industry has further noted that there is no paucityof funds to implement measures required to achieve the goal.The CMDs of various coal companies confirmed that there isno dearth of resources for safety purposes, although there is agap in the budget provision and actual expenditure.In India, provisional data shows that mining accidentsdropped from 847 in 2008 to 709 in 2009. While this may bereassuring for the one million strong workforce in the miningsector, there however, remains a number of inadequacies thatneed to be addressed to achieve the desired results.In view of the occupational hazards and risks facing thishuge workforce, it is important that the mining industryembraces the latest mining methods and procedures, modernmachinery and equipment and advances in the management ofmining activities, which include health and safety. However,despite much improvement in mining technologies, reports offatal accidents continue to flow in from across the world.Recently, an explosion left 1 dead and 36 missing at NewZealand coking coal producer Pike River Coal’s undergroundmine. Gujarat owns a 17 percent stake in the company withIndia’s Saurashtra Fuels owning 15 percent. The two Indianshareholders are set to take 55 percent of the coal produced atPike River over the 18-year mine life.India to face manpowercrunch in mining sectorCoal Insights BureauWith a spurt in mining activities in recent years,India is likely to face a shortage of skilled humanresources in this sector in the near future. The thruston exploration activities under the National Mining Policy2008 would increase the demand for trained manpower in theindustry, which would be difficult to meet if shortcomings arenot addressed immediately. According to a study report ofCII – ICRA on “Mapping of Human Resources and Skills forthe Mining Industry in India”, there would be lack of skilledhuman resource in nearly all crucial areas, which will needimmediate attention to boost mining activities in India.The report, which was unveiled at the 10th InternationalMining & Machinery Exhibition (IMME) and Global Miningsummit recently held in Kolkata, further estimates that thereCOAL INSIGHTS 33 November 2010

Featurewould be a supply gap of about 1500-2200 geoscientificpersonnel during the period 2009-17 and 2009-2025,respectively. In mining engineering category, the demandsupply gap is likely to be around 3000 during 2009-17 and 8500during the period 2009-25. Also, the present course curriculumis not appropriate for the industry and needs revision withfocus on mine safety, environment and rock mechanics toaddress the requirements of the industry.The major area of concern for the industry is lack ofmineral specific professionals like lawyers, financial analysts,economists and so on. In such a situation, there is theimmediate need to start courses in these areas to support themining sector. The number of seats also need to be enhancedin the mining engineering and geosciences fields. To meetthis shortage, courses related to areas such as geoinformatics,climate change and advance courses in remote sensing arerequired to cater the growing needs of the industry, the reportsays. It also projects the human resource requirements of themining industry, maps the human resource skills availablecurrently in the industry and identifies skill gaps along withsuggesting measures to bridge the same.According to the report, the current situation of themining industry is not conducive for its growth becausethere is huge shortage of trained operators, such as blasters,short firers, drillers, heavy machine operators, surveyors andthe like. Also, there is lack of infrastructure to train people atthis level.The study suggests that due to changes in technologyand growing environmental concerns, the personnel alreadyemployed in the industry need to be trained in the areassuch as safety, environment, health, and surveying, throughshort term refresher courses. There is also shortage of formaltraining system for candidates at the operator level. This couldbe addressed by introducing relevant courses in the existingITI/ITC located close to mining centres.The study proposes to synchronise the efforts of industry,government and educational institutions by setting up ofindustry skills centres on the line of “Mining Industry SkillsCentres (MISC)” in Australia. Keeping in mind the structure ofthe Indian mining sector, where people move up the ranks fromthe lower level to the managerial level, it is important to optimisethe existing talent pool within the organisation by providing themwith training and various career development programmes.The education system needs to be strengthened tomeet these objectives. Regulatory processes need to bedeveloped through DGBM/IBM to ensure that requisitequality is ensured and only persons with requisite diplomaare employed with them. For the familiarisation of currentpractices and technological advancement in the industry, thetrainer initiatives should be formalised.If the recommendations of the study implemented byvarious stakeholders are implemented, the human resourceneeds will be met over the time horizon till 2025. CII believesthe measures would contribute significantly in attaining theeconomic and growth potential of the Indian mining industry.Since mining industry has contributed approximately2.5 to 3 percent to the GDP over the last few years which isexpected to increase by about 5 percent over the next fewyears, the recommendations are very crucial for the overalldevelopment of the country.The mining industry in India is the largest employer and thesector is poised for rapid expansion. India produces as manyas 86 minerals. The mineral production (excluding petroleumand natural gas) has increased from `53,713 crore in 2004-05 to`86,780 crore in 2008-09 at a CAGR of 12.7 percent.Globally, India is the fifth largest player in terms ofmineral production and has abundant reserves. The reportindicates that at present around 9,00,000 persons (direct andoutsourced) are employed only in the mining and explorationof coal alone.COAL INSIGHTS 34 November 2010

FeatureAfghanistan to open up its mining sectorCoal Insights BureauWith Afghanistan opening up its mining sector, thecountry is all set to float tenders to give exploitationlicences of mineral resources worth $10 billion, amajor initiative to allow private sector companies to enter intothe state-controlled mining sector.The tenders for exploitation licences will be floated nextyear and that the last date of responding to the expressionof interest already floated is January 13, 2011, informed thecountry’s minister of mines, Wahidullah Shahrani, whowas in Kolkata recently to attend the International Mining& Machinery Exhibition (IMME) 2010, In fact, four leadingIndian conglomerates – Essar, Ispat, Tatas and Vedanta –have also showed interest in participating in the country’supcoming mineral mining projects in Afghanistan, Shahranisaid.Recent discoveries show that Afghanistan has hugereserves of minerals, estimated at about $3 trillion, within itsgeographic territory. He said: “This (estimate) is only for 30percent of the territory. For the remaining 70 percent, we donot know what reserves are there.”After inviting bids for the Hajigak iron ore project, theAfghan government is going to float global tenders for Aynakcopper mine and Badakhshan gold mine in the comingmonths. Shahrani said bids will be invited for the northernpart of the Aynak copper mine later this year. The remainingpart of this mine had already been given to a Chinese companyon contract three years ago.Besides, the government will also float tenders for theBadakhshan gold mine, bordering Tajikistan, sometimenext year, he said. The government is expecting around $2-4billion investment in each of these two projects. Meanwhile,the submission of bids against the tender for Hajigak iron oredeposit, which was floated in late September, would be closedin January.“We expect good response for this tender, given the hugedeposit of iron ore the mine has. In fact, we have alreadybeen approached by a number of major mining companiesfrom all over the world who showed their keen interest inparticipating in the development of our mines,” the ministersaid.In fact, the huge mining reserves in Afghanistan couldcontribute as much as 50 percent of Afghanistan’s GDP by2025, Shahrani has said. “We expect the share of the miningsector to go up to 25-30 percent of GDP by the next five toseven years. By the next 15 years, this share may go up to 50percent,” Shahrani said. The government, in order to exploitthe huge mineral reserves, has undertaken the ExtractionIndustries Excellence Programme and National & RegionalResources Corridors Programme, he added.The Afghanistan government has decided to train 7000troops to be deployed for security at mining projects, Shahranisaid. “The government takes full responsibility for providingsecurity at mines. We will train 7000 troops and also involvethe local community,” he said. Citing the instance of Aynakcopper mine, awarded to Chinese company MCC threeyears ago, he claimed: “There has not been a single securityincident there.” The Afghanistan government has decidednot to involve any state owned companies in new miningprojects.“The government is going to liquidate some stateownedcompanies. There will be no government companiesinvolved in the mining projects,” Shahrani said. He saidthe government would not make any distinction betweendomestic and foreign companies showing interest in Afghanmining projects.Asked about security concerns, he said, “Don’t look intothe negative issues of political uncertainty and instability.Look into the positive aspects of exploiting the miningpotential.” Afghanistan has $3 trillion worth of reserves underproven category and the reserves under inferred categoryare yet to be valued. “We actually intend that the companies,which get exploitation licences, also conduct explorationthrough procuring licences via the bidding route and helpAfghanistan, still a virgin area for mining companies, unleashits mining potential,” said Shahrani.Afghanistan has reserves of metals like gold, copper,chromite, iron ore, borates and rare minerals like lithiumand cobalt. In fact, Afghanistan has so far got governmentaids like India’s $1.2 billion to reconstruct the country afterthe war. It is now looking for private sector investment andwill immediately require $5-6 billion worth of investment todevelop Hajigak, an iron ore rich area north-west of Kabul,Indian ambassador to Afghanistan, Gautam Mukhopadhyay,said.“We want investment to develop transportation, powerand other infrastructural facilities at Hajigak so that exploitingiron ore there becomes feasible. Indian companies can formconsortiums to bring in investment at Hajigak,” Shahrani said,adding that his government could consider allowing Indianconsortiums invest in the region escaping the tender route andmaking it a government to government affair. Even a partialexploration of this huge natural treasure hidden under thecountry’s soil, would help generate an immense amount offoreign investment, apart from creating thousands of jobs inthe country.It has been known for a long time that Afghanistanharbours huge deposits of iron and copper. In fact, the Sovietshad mapped the country’s vast mineral wealth way back inthe 1980’s, but after that, it remained largely unexplored.COAL INSIGHTS 35 November 2010

FeatureNTPC ranked no. 1 Asianpower producerLokenath TiwaryNTPC Ltd, the first PSU in the country’s power sector tobe bestowed the coveted ‘Maharatna’ status, has beenranked the no.1 Independent Power Producer (IPP) inAsia at the prestigious Platts Global 250 Energy Awards.The largest power generating company of the country hasalso been ranked no. 10 in overall performance among theenergy companies in Asia and no. 52 in overall performanceamong energy companies across the globe, thus improvingupon its last year’s ranking of 73.These awards were received at Platts Top 250 GlobalCompany Rankings Award ceremony this month by theexecutive director (corporate planning), N.K. Sharma and thegeneral manager (business development), A.K. Gupta. Theserankings are based on four key metrics - asset worth, revenues,profits and return on investment.REC mechanism launched in IndiaIn an attempt to boost renewable energy production inthe country, India has recently launched the RenewableEnergy Certificate (REC) mechanism. REC is a marketbasedinstrument which enables the obligated entities tomeet their Renewable Purchase Obligation (RPO).Launching the REC mechanism on November 18,Union minister of power, Sushil Kumar Shinde, said,“Pertinently, the Renewable Purchase Obligation is theobligation mandated by the State Electricity RegulatoryCommission (SERC) under the Electricity Act, to purchasea minimum level of renewable energy out of the totalconsumption in the area of a distribution licensee.”The REC mechanism, he said, also aims at encouragingcompetition and eventually mainstreaming renewableenergy sources. Renewable energy resources in India arewidely dispersed and are concentrated mostly in stateswhich have already achieved high level of RPO. These statesare generally reluctant to buy energy from such sourcesbeyond their obligation mandated by SERC. Under thismechanism, a RE generator can sell the electricity componentlocally at the price of conventional electricity and trade theenvironmental attribute in the form of REC separately.The other constraint facing the renewable segment is theinability of RE resource-deficient states to fulfill their RPO.With the implementation of the REC scheme, such stateswill not be constrained to look at only the locally availableRE sources for fulfilling their RPO. As per the vision of theElectricity Act and the policy, the RPO can now be fixedkeeping in view availability of RE sources in the country asa whole. They will be able to meet their RPO by purchasingthe RECs in the Power Exchanges approved by CentralElectricity Regulatory Commission (CERC).The REC mechanism is being seen as one of thepioneering efforts in any developing country formainstreaming the renewable generation through marketmechanism. Over the period, RE generator would learnto find Market Avenues for sale of electricity componentthrough DISCOMs, traders, power exchanges and openaccess consumers. Eventually, this will reduce theirdependence on government support and they will learnto live on their own.Salient features of the REC mechanism are asfollows:♦♦The RE generators will have two options - either tosell the renewable energy at preferential tariff fixedby the concerned Electricity Regulatory Commissionor to sell the electricity component and environmentalattributes separately.♦♦On choosing the second option, the generator cansell the 'electricity component' to either the localdistribution company at its average power purchasecost, the traders and open consumers or to the powerexchanges at a mutually agreed/market determinedprice. In addition, the 'environmental attributes' canbe exchanged in the form of the REC.♦♦The Central Agency (the National Load DespatchCentre has been designated as the Central Agency)will issue the REC to RE generators.♦♦One REC will be equivalent to 1 MWh of electricityinjected into the grid.♦♦The REC will be exchanged only in the PowerExchanges approved by CERC within the band of aminimum and a maximum price to be determined byCERC. CERC has already notified the price band.♦♦The distribution companies, Open Access consumer,Captive Power Plants (CPPs) will have the option ofpurchasing the REC to meet their Renewable PurchaseObligations (RPO).♦♦There will also be compliance auditors to ensurecompliance of the requirements of REC by theparticipants of the scheme.♦♦Voluntary purchasers like NGOs, the corporatesector, individual purchasers and so on may alsopurchase REC in order to meet their Corporate SocialResponsibility (CSR) or to support the environment.COAL INSIGHTS 36 November 2010

FeatureNTPC’s current installed capacity of 32,694 megawatt(MW) is nearly 20 percent of the total installed capacity inthe country. Currently, about 17,000 MW of capacity is underconstruction, about 7000 MW is under bidding while foranother 13,000 MW, feasibility reports have been finalised.Thus, NTPC is on course to becoming a 75,000 MW companyby 2017 and 128 GW company by the year 2032 with welldiversified fuel mix. The company presently operates 28power stations across the country.“By the Eleventh Plan period, the company aims to putabout 13,000 MW capacity on stream contributing to thegovernment’s plans of adding 68,000 MW by that time,”said the chairman and managing director, NTPC, Arup RoyChoudhury.Choudhury further said that NTPC will take tariffbasedbidding with a competitive spirit and assured timelyimplementation of all its construction projects.The first 500 MW unit of Indira Gandhi Super ThermalPower Project at Jhajjar has been commissioned after achievingfull load on October 31, 2010. The unit has achieved full loadin 39 months from the date of investment approval, a newrecord for greenfield projects.The 1500 MW (3 x 500 MW) project is being set up by AravaliPower Company Private Limited (APCPL), a joint venture ofNTPC Ltd, government of Haryana and government of Delhi.The power from this project will be supplied to Haryana andDelhi on 50:50 ratio.To increase the power production capacity, NTPC Ltd hasalso cleared a `3193 crore investment on its Pakri BarwadihCoal Mining Project in Jharkhand recently.The mining project, located in Hazaribagh district ofJharkhand, is estimated to produce 15 million tons per annum(mtpa) of coal. The sanctioned investment of `3193.86 croreincludes interest costs during construction, financing chargesand working capital margins, the public sector undertakingsaid.The company is scheduled to start production from thecoal block, which was allotted to NTPC on October 11, 2004,in the year 2012. The public sector enterprise has alreadycompleted all formalities for implementation of the miningplan, including an action plan for rehabilitation of projectaffectedpersons, it said.Arrangements for power supply and notifications for landacquisitions under the CBA (Coal Bearing Areas) Act havebeen completed.However, some activities such as payment disbursementfor land and award of contract for setting up a power plant,are still in progress, the company added.The company has been granted Maharatna status thismonth. Being a Maharatna company, the Board of Directorsof NTPC are empowered to make equity investmentsto establish financial joint ventures and wholly-ownedsubsidiaries and undertake mergers & acquisitions, in Indiaor abroad, subject to a ceiling of 15 percent of the net worth,limited to `5000 crore in one project as against the earlierlimit of `1000 crore.India misses Oct powergeneration targetGargi SahaiIndia’s power generation in October 2010 stood at 70558.88GWH, lower by a marginal 0.90 percent from the target setfor the month, as per a recent Central Electricity Authority(CEA) report. The target set for the month was 71202.96 GWH.The energy generation for the same month last year was65101.09 GWH, which means India has been able to generate8.38 percent energy more than last year in the period.Thermal power generation was the highest in the month.It stood at 56778.39 GWH, which was 97.12 percent of theplanned 58463.92 GWH, thermal power generation wasfollowed by hydro, nuclear and Bhutan IMP at 10753.52 GWH,2287.98 GWH and 738.99 GWH respectively.Region wise maximum power generation, 22682.19 GWHwas done by the Western region during the month followedby the northern region and southern region with generation of20445.74 GWH and 15333.83 GWH respectively.The all India energy generation for the period April toOctober 2010 is 468321.24 GWH.Capacity additionIndia added a total of 2085 MW of new power generationcapacity during the month of October, which was more thanthe double of 742 MW added in September. The addition wasalso substantially higher than the target of 1473.50 MW forthe month, according to data of Central Electricity Authority(CEA).The capacity addition during the same month last year was1334 MW, against a target of 1019 MW.The total capacity added during the month was inThermal category. 600 MW was added at the Rajiv GandhiTPS of Haryana Power Generating Company Ltd (HPGCL) inHaryana, another 600 MW was added to the Sterlite TPP ofSterlite Energy ltd in Orissa, 135 MW was added to the WardhaWarora unit of Wardha Power Co Ltd in Maharashtra, 500All India PLF For October’10(In Percentage)Source: Central Electricity AuthorityCOAL INSIGHTS 37 November 2010

FeatureMW was added to Indra Gandhi STPP of APCPL in Haryanaand 250 MW was added Pragati CCPP GT- I unit of PPCL inDelhi.As per the CEA report, a total 7020 MW of energy generatingcapacities were added during the first seven months of thecurrent financial year.Plant load factorThe Plant Load Factor (PLF) for the country for the month ofOctober, 2010 stood at 74.84 percent and the plan was to achieve70.48 percent. PLF is a measure of the output of a power plantcompared to the maximum output it could produce.Central sector was the only one which met its target, thePLF for the state sector stood at 85.61 percent where the targetwas of 73.53 percent.The state and private sector could not achieve their settarget for the month. Where the state sector had a target of71.05 percent it achieved 65.33 percent and similarly theprivate sector achieved 81.50 percent whereas the target setfor them was 85.33 percent.10 power stations in the central sector and 13 in thestate sector failed to achieve their target. Durgapur TPS hadthe highest shortfall in the central sector of 16.15 percent,Badarpur was another power station which had high shortfallof 15.19 percent.Indraprastha Power Generation Co Ltd (IPGCL) had thehighest shortfall of 48.70 percent in the state sector, followed byDurgapur Projects Ltd (DPL) and Jharkhand State ElectricityBoard (JSEB) with shortfalls of 45.61 percent and 31 percentrespectively.Critical coal stockDue to less receipt of coal, high generation and delay and nonreceipt of import of coal as many as 27 power stations in thecountry were left with a “critical” coal stock of less than sevendays as on October 31, 2010.Obra and Anpara (96 percent) in the northern region, Sikka(78 percent), Wanakbori (89 percent) in the western region,Ennore, North Chennai, Mettur and Tuticorin in the southernAchievement vs Target In CapacityAddition October’10 (In MW)Source: Central Electricity AuthorityCategory wise Energy GenerationOctober’10 (In percentage of GWH)Source: Central Electricity Authorityregion and Talcher STPS, New Cossipore, Kolaghat andFarakka in the eastern region were some of the power stationswhich were left with a “critical” coal supply due to less receiptof coal.Obra in the northern region, Rosa TPP in the westernregion and Kahalgaon, Budge Budge faced the crisis due tonon receipt of import of coal during the month.Rihand, Dadri and Singrauli STPS in the northern regionand Gandhi Nagar, Vindhyachal STPS, Korba and Dhanu inthe western region, were some power stations left with criticalcoal stock due to high generation. Paras and Parli powerstations in the western region faced the crise due to delay insigning of MOU by MCL for new unit.Power supply positionIn the month of October 2010, the country’s requirement forpower was 74,162 MU whereas the power availability for themonth stood at 68,974 MU, a shortage of 7 percent from therequirement.Except for Chandigarh, Rajasthan, Dadra, Sikkim andLakshadweep, all the other states and union territories faceda shortage of power supply during the month. Maharashtrawas the state to face the highest power supply shortage, therequirement by the state for the month was 10,524 MU whereasthe availability was 8931 MU, a shortage of 15.10 percent.Maharashtra was followed by Madhya Pradesh and UttarPradesh with deficit of 726 MU and 698 MU respectively.Region wise, western region faced the highest shortfall of2,837 MU followed by northern and southern regions withshortfalls of 1302 MU and 675 MU respectively. The easternand north eastern regions faced a shortfall of 295 MU and 79MU respectively.Looking at the deficit to the requirement of power supplypercentage of a state or union territory, Jammu & Kashmir wasat the top again with a deficit of 26.30 percent, the state had arequirement of 1332 MU of power supply during the monthbut, received only 982 MU. Jammu & Kashmir was followedby Bihar and Mizoram who had deficits of 21.70 percent and20 percent respectively.COAL INSIGHTS 38 November 2010

governmentDraft Regulatory Bill to be finalisedsoon: Coal SecyCoal Insights BureauThe Ministryof Coal islikely tofinalise the draftCoal RegulatoryBill as proposedin the New CoalDistribution Policy2007, withinthe next threeto four months,Secretary (Coal) C.Balakrishnan, toldCoal Insights.C Balakrishnan, Coal Secretary“We havereceived comments from concerned ministries like steel andpower, and will re-draft the Bill. As soon as re-drafting isdone, we will place the bill before the Cabinet for approval,”Balakrishnan said.“I assume it will take another three to four months to redraftthe Bill as certain suggestions made by various ministriesneed to be incorporated in the final draft,” he added.Incidentally, the New Coal Distribution Policy 2007,adopted by the government as per recommendation of theShankar Committee report, had in October 2007 suggestedsetting up of a Coal Regulator in the country.The idea had been discussed time and again among thecoal producers, consumers and owners of captive coal blocks.It was felt that the country needs a Coal Regulator in orderto keep the mining activities within a specific system since alarge number of private companies are expected to start coalmining in a big way in the near future.Guidelines for competitive biddingIn addition to the Coal Regulatory Bill, the Ministry of Coalis likely to come out with guidelines for allotment of captivecoal blocks through the competitive bidding route, very soon.“We are in the process of preparing guidelines forallotment of captive coal blocks through competitive biddingroute. We are trying to complete the process at the earliest.It is likely to be ready in the next three to four months,”Balakrishnan said.Incidentally, Rajya Sabha, the Upper House of Parliamentin India, on August 17 had cleared the Bill seeking amendmentin Mines and Minerals (Development and Regulation)BCCL raises coking coalprice for SAILCoal Insights BureauBharat Coking Coal Ltd (BCCL), India’s largestcoking coal producer, has finalized a deal tosupply coking coal to the Steel Authority ofIndia Ltd (SAIL), India’s largest producer of steel, ata slightly higher rate in 2010-11 as compared with the2009-10 price.“We have agreed to supply coking coal to SAILat a price of `7500 per ton in 2010-11 compared with`6400 per ton in 2009-10,” BCCL’s chairman-cummanagingdirector T.K. Lahiry, told Coal Insights.“The final agreement is yet to be signed, but boththe parties have recently agreed at Rs 7500 per ton for2010-11. We will try to supply around 2 million tons(mt) of coking coal to SAIL in 2010-11,” Lahiry said.He said the company is planning to set up fivewasheries and if all of them are ready, BCCL’s cokingcoal supplies to SAIL will increase gradually.Lahiry said that the letter of intent (LoI) hasbeen recently issued to HEC Ltd for setting up theMadhuban washery. “We are supposed to provideenvironment clearance in the next 18 months to HEC,which in turn will set up the washery during the sameperiod,” he added.(MMDR) that paved the way for introduction of allotment ofcaptive coal block through competitive bidding route. The billwas subsequently cleared by Lok Sabha on August 22. “Thepassage of the Bill will ensure allocation of coal/lignite blocksin a more transparent manner,” the official said. Till now,captive coal/lignite blocks were being allotted by a ScreeningCommittee headed by Secretary (Coal). “The additionalrevenue earned through competitive bidding route will go tothe state where blocks are located,” the official added.Coal Minister, Sriprakash Jaiswal has already made it clearthat the competitive bidding route will be applicable only forprivate sector companies.COAL INSIGHTS 39 November 2010

governmentOTC power prices higherin OctoberLokenath TiwaryOver-the-counter (OTC) market prices of electricityduring October were at a higher level as comparedto the prices of power exchanges. According to ananalysis of all weekly reports received from licensee-tradersfor the month of October, the reason for higher OTC pricescould be attributed to the inherent nature of the contracts.The report is prepared by the Centre for Monitoring IndianEconomy & Market Monitoring Cell, CERC. OTC contracts arefor monthly, customised contracts whereas power exchangeprices are for spot standardised contracts.During September 27 to October 31, most of the contractsin OTC market were at higher prices than prices prevailing inexchanges. The minimum price in the exchange was `2.06/kWh (IEX, October 26) while that in the OTC market was `2.39/kWh. Maximum price at the exchange reached `4.01/kWh(IEX, October 1) and in the OTC market it was `6.50/kWh. InOctober, OTC contracts mostly were for a month or more andthe scheduling of contracts was generally happening from oneor two days to one month after contract date. According tothe report, two contracts have been done by a trader for eightmonths from October 1, 2010 to May 31, 2011 and six monthsfrom October 1, 2010 to March 31, 2011 of power supply. InOctober, the cumulative volume traded above `4/kwh was1179.24 MUs which is 49.20 percent of the total OTC.Price and Volume of OTC ContractsWeeksRange of SalePrice(`/kWh)MaximumMinimumWeightedAverageof SalePrice (`/kWh)TotalVolume(MU)27th September-3rd October 4.50 3.19 3.63 1156.944th-10th October 5.04 2.39 3.98 152.8811th -17th October 4.50 2.39 4.13 67.4818th-24th October 4.80 4.35 4.38 165.0025th-31st October 6.50 2.39 2.22 854.52Total 2396.83As per the report, the number of contacts for November toDecember is higher (32) than the number of contracts reportedfor January 2011 to the first week of February 2011 (13). DuringNovember, OTC sale price was `4.22/kwh which dippedmarginally to `4.21/kwh on November 16 and remained atthe same level till November 30. From December 1, 2010, itincreases to 4.40/kwh and remains at this level till Decemberend. The future price starts dropping in January 2011 to `4.38/kwh and remains at this level through the month and furtherdecreases to `4.37/kwh on February 1, 2011.The price for November-December period is different. Thisis so because contract prices for November-December executedin September (`4.73/kwh) have been higher than the contractfor the same period executed in October (`4.23/kwh).States seek to keep coalout of GST netCoal Insights BureauConcerned over a possible increase in tax on coal, thestate finance ministers have urged the Centre notto include the fuel in the list of Goods and ServicesTax (GST). In a recent letter to union finance ministry, theempowered committee of state finance ministers has soughtexemption for coal and a few other items from the purviewof this new tax regime. The Orissa government has taken alead role in this regard. The state government was buildingup a case to exclude coal from the GST list and is talking tocoal-bearing states like Jharkhand, Chhattisgarh and MadhyaPradesh for this purpose.The Orissa government has recently said that GST on coalwould have a direct effect on power cost as the effective rate oftax would go up to 12 percent from the 4 percent VAT (valueaddedtax) that is levied on coal currently. If coal was to beincluded in the GST list both state GST and central GST wouldlevy 6 percent tax each on coal.The roll-out of GST, which will subsume excise duty andservice tax at the central level and VAT on the state front, besideslocal levies, has been hanging fire, ever since it missed an initialdeadline of April 1, 2010. The new deadline for implementationof GST, fixed on April 1, 2011 is also likely to be missed. At ameeting of the Empowered Committee of State Finance Ministersin Panjim recently, panel chairman Asim Dasgupta floated aproposal that the current committee be enlarged with unionfinance minister as its chairman and one of the state financeministers as vice-chairman for making changes in the indirecttax system. This contradicted the Centre’s earlier proposal.The Centre had earlier proposed that the council be set up,chaired by the finance minister, with state finance ministersas members and any change in GST be effected only throughcomplete consensus. Some states in contrast to the Centre'sproposal had suggested a new model for the council whichwill be empowered to make changes in the fresh regime on aconsensus on the new indirect tax system-GST. This has eludeddelaying the GST rollout further, and the Centre now says thatGST may be rolled out sometime in the next financial year.This new deadline was suggested by the Centre after its earlierproposal that the council be empowered to make changes in GSTwith the approval of Union finance minister and two-third ofthe council members was rejected by states. They were skepticalof a veto power to the Centre over their fiscal autonomy.Meanwhile, India has also levied a tax on coal producersto charge companies for fossil fuel pollution. Coal, used to firemore than half of India’s electricity generation, is taxed at `50per ton to help fund clean-energy projects. This is a major step inIndia’s endeavour to promote renewable energy infrastructure.The clean-energy levy will also apply to imported coal, FinanceMinister Pranab Mukherjee had said in his budget speech.COAL INSIGHTS 40 November 2010

INTERNATIONALAustralia may extend mineral tax purviewCoal Insights BureauThe new Minerals Resource Rent Tax (MRRT) of theAustralian government on coal and iron ore miningprojects may be imposed on other mineral projects infuture as well, official sources said. “As of now, the MRRTwill be applicable only for coal and iron ore projects. All othercommodities are excluded from that list. But you cannot ruleout inclusion of other minerals under this tax net in future,”the sources said.MRRT, which imposes a hefty 30 percent headline tax oncompanies earning more than $50 million in profits, is slatedto come into effect from July 1, 2012. However, an extractionallowance equal to 25 percent of the otherwise taxable profitwill be deductible to recognise the profit attributable to theextraction process.The new tax will replace the Resources Super Profits Tax(RSPT), which was initially proposed on May 2, 2010. Thedesign of MRRT is significantly different compared to RSPT;in some respect MRRT will be more burdensome than RSPT,but it also has greater concessional arrangements for preexistingprojects. Global mining giants such as BHP Billiton,Rio Tinto and Xstrata, which had opposed RSPT, welcomedthe announcement of it being replaced by MRRT.While announcing the finalisation of MRRT, the Australiangovernment had said “The government will focus the resourcetax reforms on our biggest and most profitable commodities,namely iron ore, coal, oil and gas. These represent threequartersof the value of our exports and resource operatingprofits and account for an even greater share of resource rentsin the mining industry. They also represent the vast bulk ofgrowth in the sector over the coming decades.”The factors considered for choosing these sectors includedthe hike in coal and iron ore prices in the recent past. “Sincethe beginning of the mining boom, prices for iron ore haveincreased by over 400 percent and prices for black coal haveincreased over 200 percent.”The exclusion of other commodities, the government hadsaid, would reduce the number of affected companies from2500 to around 320. These commodities were not expected topay significant amounts of resource rent tax, and “excludingthem will allow many companies to remain in their existingtaxation regimes.” However, if all other minerals are broughtunder MRRT in future, the government may have to bringsuitable changes to accommodate small companies.MRRT not to affect investment, exportNotwithstanding the concerns expressed by many miningstake-holders, experts said the new tax regime would notmaterially impact the investment flows into Australia’s miningsector or the country’s position as one of the largest exportersof minerals in the world.Peter Linford, senior trade and investment commissioner,Austrade (South Asia) said the new tax system would notaffect investment flows into mining sector. “Australia presentsa world class mining sector. The strength of Australia’s miningindustry is reflective of the depth and diversity of the sectorand its abundance of natural resources,” he said.MRRT – Bulk commodity resource tax arrangements♦ ♦ Iron ore and coal will be subject to a new profits-basedMinerals Resource Rent Tax (MRRT) at a rate of 30percent. MRRT assessable profits are calculated on thevalue of the commodity, determined at its first saleableform (at mine gate), less all costs to that point.♦ ♦ Projects will be entitled to a 25 percent extraction allowancethat reduces taxable profits subject to the MRRT.♦ ♦ Small miners with resource profits below $50 millionper annum will not have an MRRT liability.♦ ♦ Miners may elect to use the book or market value asthe starting base for project assets, with depreciationaccelerated over 5 years when book value, excludingmining rights, is used; or effective life (up to 25 years)when market value at May 1, 2010, including miningrights, is used. All post May 1, 2010 capital expenditurewill be added to the starting base.♦♦A book value starting base will be uplifted with thelong term bond rate plus 7 percent. However, a marketvalue starting base will not be uplifted.♦ ♦ Investment post July 1, 2012 will be able to be writtenoff immediately, rather than depreciated over anumber of years. This allows mining projects to accessthe deductions immediately, and means a project willnot pay any MRRT until it has made enough profit topay off its up front investment.♦ ♦ The deductibility of expenditure under MRRT will bebroadly based on the categories used in the PetroleumResource Rent Tax (PRRT) regime.♦ ♦ MRRT losses will be transferable to other iron ore & coalprojects in Australia. This supports mine development.♦ ♦ Unutilised MRRT losses will be carried forward at thegovernment long term bond rate plus 7 percent.COAL INSIGHTS 41 November 2010

INTERNATIONALEIA 2010 US coal consumption andproduction outlook fallsChandrika BoseThe Energy Information Administration (EIA) of the UShas decreased its estimate of coal consumption as well asthat of production for the country in 2010. The agency,which is an independent statistical organisation within the USDepartment of Energy, said in its November report that US coalconsumption in 2010 is likely to decrease to 1062.9 million shorttons (million s.t) compared with its October forecast of 1068.8million s.t.. The country’s coal production, it said, is likely tostand at 1081.8 million s.t., which is lower than the Octoberprojection of 1083.0 million s.t. Coal production for the first 6months in 2010 fell by 3 percent despite a 5 percent increase inUS coal consumption because of draw downs in stocks held bythe electric power sector. Projected coal production increasesin the second half of 2010 as the drawdown in stocks slows,contributing to 2010 annual growth of 1 percent.Projected 2011 coal production has also gone down to1091.1 million s.t in November against 1094.4 million s.tforecasted in October. Again, coal consumption for 2011 hasbeen revised downward to 1058.3 million s.t from 1061.8million s.t projected a month ago. The November reportprojects that coal consumption in the electric power sector in2010 is estimated to be 992.5 million s.t, which is lower thanthe level projected in the previous month at 998.8 million s.t..For 2011, coal consumption in this sector has been revised to990.4 million s.t from 992.3 million s.t.. EIA forecasts that coalconsumption in the electric power sector will grow by 6 percentin 2010, primarily as a result of higher electricity consumption.According to the November report, coal consumption by othersectors such as retail and industrial areas would be 49.3 millions.t. and 46.3 million s.t., respectively. These were similar to theOctober projections for the same.US Coal Consumption Growth(change from previous year)Source: Short-Term Energy Outlook, November 2010US Annual Coal ProductionSource: Short-Term Energy Outlook, November 2010Consumption by coke plants as well as for the residentialand commercial sectors in this month’s report, was forecastedat 20.5 million s.t and 3.0 million s.t respectively, similar toprojections in October.Forecast increases in nuclear and renewable based generationcombined with a 0.1 percent drop in electricity consumption in2011 contribute to a decline in coal-fired electricity generationand related coal consumption.Electricity demandEIA now estimates that total consumption of electricity acrossall sectors during 2010 is likely to be 10.73 billion kWh perday. This is slightly less than last month’s projection of 10.76billion kWh per day for the current year. Again, projectionsfor total consumption of electricity across all sectors in 2011 inthe November report was 10.72 billion kWh per day, similar tothat reported in October.The latest report forecasted the total retail sector sale ofelectricity to 10.24 billion kWh per day while forecasted sale inits last month’s report stood at 10.27 billion kWh per day. TheNovember report forecasted sale of electricity for residentialsector to 3.96 billion kWh per day in 2010, which is slightlylower than 3.99 billion kWh per day projected in its Octoberreport. Retail sale of electricity to the industrial sector isforecasted to be 2.57 million kWh per day in 2010, similar tothat projected in the October report.Warmer temperatures contribute to a projected 3 percentdecline in US retail sales of electricity to the residential sectorover the winter months.In contrast, improvements in manufacturing output shouldlead to a 4.6 percent increase in US retail sales of electricityto the industrial sector during the same time period. On theCOAL INSIGHTS 42 November 2010

INTERNATIONALwhole, EIA expects a 4.7 percent increase in total annualconsumption of electricity across all sectors during 2010.Oil consumptionThe latest report of the agency said that oil consumptionglobally is likely to grow by 2 million barrels per day (bbl/d)to 86.33 million bbl/d, which is higher than the forecast madein its previous report of 86.06 million bbl/d.EIA has revised world oil consumption growth in 2010upward in response to stronger-than-expected growth inEuropean oil demand during the second and third quarters of2010, as well as continued strong growth in China. The non-OECD regions, especially China, the Middle East and Brazil,are the areas where most of the expected growth in world oilconsumption in 2011 is slated to take place.Among the OECD regions, EIA expects North America torecord almost all the oil consumption growth in 2011, with again of nearly 0.4 million bbl/d. In 2011, EIA expects globaloil consumption growth to the tune of 1.4 million bbl/d. Theagency has made slight changes in projections on increase inoil consumption for 2011, which is expected to grow to 87.77million bbl/d from 87.44 million bbl/d projected last month.TradeEIA’s November estimate suggests that US coal exports willbe around 76.5 million s.t in 2010 and 74 million s.t in 2011,similar to that estimated in their October report. EIA expectstotal coal exports to increase by 30 percent in 2010, but declinein 2011 as other major coal-exporting countries increase theirsupply to the global coal market. Strong global demand forcoal, particularly metallurgical coal used to produce steel,has resulted in sharp increases in the US coal exports in 2010.Metallurgical coal exports have nearly doubled in the firsthalf of this year compared with the first half of 2009, andmetallurgical coal’s share in total coal exports has grown from52 percent in 2008 to a projected 73 percent in 2010.The latest report projected that 2010 coal imports by the USwill come down to 18.9 million s.t, as compared to the previousyear’s imports of 22.6 million s.t. This month’s projection ofimports is similar to that forecasted in October. Also, the 2011imports are similar to the levels forecasted in the previousmonth’s report at 25.9 million s.t.India, US to set up joint green research centreCoal Insights BureauIndia and the US have agreed to set up a green energyresearch and development centre in India, with eachcountry funding $5 million for the next five years. Thisdeal was inked during the recent visit of US PresidentBarack Obama, to India. The focus of the centre is likely torevolve around solar energy, energy efficiency, biofuels,clean coal technology and an integrated gasificationcombined cycle project that turns coal into synthesis gas.It was in November 2009 that the concept of such acentre was first agreed upon during the Indian PrimeMinister Manmohan Singh’s state visit to Washington.Obama has been quoted as saying that: “We can pursuejoint research and development to create green jobs; giveIndia more access to cleaner, affordable energy; meet thecommitments we made at Copenhagen and show thepossibilities of low-carbon growth.”He also mentioned that with his visit, the countryis now ready to begin implementing their civil nuclearagreement which will help India to meet its growingenergy needs. The agreement between the two countriesfor cooperation on peaceful uses of nuclear energy wassigned in October 2008.During Obama’s visit both the countries also signedan agreement on shale gas cooperation. The agreementincludes a resource assessment in India conducted bythe US Geological Survey, technical studies on shale gasexploration in India and training of Indian personnel inshale gas exploration and development.Recently the minister for petroleum and naturalgas Murli Deora mentioned about huge tract of Indiansedimentary areas, yet unexplored which would createopportunities for global players to venture into the shalesector. Moreover, as 75 percent of its crude oil needs arecatered by imports in India, it is important to explore theIndian Sedimentary Basin to bridge the gap.According to recent market reports, India aims tolaunch the first round of auction of shale gas-bearingareas by the end of 2011.This is the second joint green energy research anddevelopment agreement by the US government. Last yearin November a similar agreement was made by Obamawith China during his visit to Beijing. This US-ChinaClean Energy Research Centre will facilitate joint researchand development of clean energy technologies by teamsof scientists and engineers from the US and China with abudget of $150 million over five years.This was also inclusive of carbon capture and storageand some deals with US firms such as General Electric andPeabody Energy.The former would help promote IGCC technology inChina; and the latter will invest in GreenGen, the Chineseequivalent of the FutureGen clean coal project in the US.COAL INSIGHTS 43 November 2010

INTERNATIONALGerman mining tools import to be up 15%Coal Insights BureauGermany’s export of mining machinery to India is peggedat €70 million for 2010, about a 15 percent increaseover €60.3 million achieved in 2009. This, after a yearof decline, might seem to be a satisfactory performance. Butthe closure of mines back home and competition from Chinesefirms are compelling the Germans to pull up their socks.“Germany’s export of mining machinery to India showssome fluctuations over the last few years,” said Peter Jochums,past president of VDMA Mining Equipment Association.It ranged from €13 million in 2001 to €1.36 million in 2003and €60.3 million in 2009. “In 2010, we expect exports toremain more or less at the same level as in 2009. Germanmanufacturers could stabilise the export of mining machineryafter a drop last year,” Jochums said. VDMA India managingdirector Rajesh Nath, however, said total exports are likely toreach €70 million, thereby showing a 15 percent growth overlast year. Total exports of engineering equipment, which alsoincludes construction machineries, would reach €2.9 billion,about 26 percent growth over €2.3 billion posted a year ago.During the first seven months of 2010, Germany hasdelivered mining machinery worth €34 mn to the Indiancustomers. These machines mostly comprise longwallshearers, heading and tunnelling machines, and machineryfor crushing and grinding. Among the Indian coal miners,Singareni Coalfields Company Ltd (SCCL) has the mostnumber of longwall projects, Jochums said.Chinese threatWhile exuding confidence in the international reputationand quality of German mining equipment, Jochums said:“The German machinery makers are recently facing a toughcompetition from their Chinese counterparts in the Indian coalmining projects. The Chinese companies have bagged most ofthe orders in the last two years….It is high time the Germancompanies braced up to face up this competition.”The primary advantage of the Chinese firms, he said wasthat they could send their representatives and workers to stayin India for a long period and assist their clients in absorbingtechnologies. Many Chinese workers had been stationed atSingareni. This is something very few German or Europeancompanies would possibly do. Noting that German firmscould neither outdo the Chinese in cost competitiveness norin personalised service, he said: “We must hold on to ourreliability and superior technology. Germans are still aheadof the Chinese, but the gap is closing. They are learning realfast…this is a situation similar to the one we saw 25 years agowhen the Japanese overtook Germans in camera business.”Closure of coal minesAnother major factor that may drive the sales of Germanmining machinery to India is the closure of coal mines backhome. Currently, there are six operating mines in the EUcountry, producing around 14 million tons (mt) of coal a year.All these mines have become uneconomical and are expectedto be closed by 2018. Although there are significant volumes ofcopper and lignite mining going on, closure of coal mines maydrive German equipment makers to focus more on exports.Jochums, however, said that reopening of some coppermines following an increase in international copper pricesmay mitigate the impact of closure of coal mines. Germany’sblack coal production has shrunk from 150 million tons (mt)in 1957 to 25.6 mt in 2005 and further to 14 mt in 2009. In 2010,production is likely to dip to 10 mt. The government givessubstantial amount of subsidy as mining of coal has becomeuneconomical over the years. The decision to phase out thecoal mines is likely to be reviewed by Parliament in 2012.Focus on IndiaIn order to tap the huge opportunity in the Indian miningsector, three major German mining equipment makers haveplanned to set up manufacturing facilities in the country soas to cater to the local miners. “Leading German machinemanufacturers Wirtgen, Hazemag and Allmineral are settingup their manufacturing units in India either through their ownunits or through joint ventures,” Nath said.While Wirtgen is setting up a manufacturing facility inPune, Allmineral has entered into a joint venture agreementwith Kolkata-based Jyotirmoyee International Pvt Ltd (JIPL) forsetting up a plant in Orissa. Hazemag is also coming up with aunit in eastern India, he said. VDMA, which has been presentin Kolkata for about 14 years now, is acting as a bridgeheadamong the German and Indian industries and fostering closerbusiness cooperation between the two countries, he added.Bidding for CIL projectsBesides setting up manufacturing units, German miningequipment makers are keen to participate in the tenders to befloated by Coal India Limited (CIL) for opencast mining projectsand washeries. CIL has decided to come up with in-builtwasheries in all new mining projects with annual productionof more than 2 mt. It has also embarked upon an ambitious`3000-crore plan to wash almost half of its output to improve thequality of coal and garner prices at par with international rates.“The German companies are in continuous dialogue withCIL. Many of these companies will take part in CIL tendersfor some washeries and opencast mining projects, which areexpected to be floated shortly,” a German trade official said.Meanwhile, Germany brought the largest ever delegation of 40companies for the International Mining Machinery Exhibition(IMME) 2010 held in Kolkata between November 10-13.COAL INSIGHTS 44 November 2010

Expert SpeakLarge diameter boring machines: Needof the hour?J.P. PandaThe recently conducted mission to rescue 33 minerstrapped in the San Jose mine in Chile was a remarkableexample of sheer human grit and determination.However, in the entire episode, one simply cannot ignorethe role played by technology in the form of the “SchrammT130XD” category drill employed in the plan. It was thisdrill which enabled rescuers to bore a hole a full 28 inchesin diameter, which eventually created the passage throughwhich the miners were able to come out in a specially designedcapsule.The remarkable feat of drilling a 28 inches (71 cm) diameterhole to a depth of 588 metres at the San Jose Mine is a lessonto all concerned with safety in mines and leads us to ponderwhether such equipmentshould be an integral part ofour rescue stations in India.With safety of miners beingof prime importance in theentire coal extraction process,one cannot help but wonderwhether such a drill should bepresent in the rescue stationsof Coal India Limited (CIL), orbe a part of the coal subsidiarycompanies which are into largescale underground miningsuch as Western CoalfieldsLimited (WCL), Bharat CokingCoal Limited (BCCL), EasternCoalfields Limited (ECL)and South Eastern CoalfieldsLimited (SECL).The Schramm T130XD is aheavy duty, heavy hoist, carriermounted drill rig. The T130XDutilises the latest concepts inmast design and technology.Telescoping constructionpermits long head travel andworking height to allow use ofRange III casing, yet it has shortoverall length in the transportposition. With a front overhangof less than 6 feet, the T130XDwill get you to the jobsite whenaccess roads require a compactmachine. Heavy pullback capacity makes this machine a perfectchoice for shallow oil and gas, coal bed methane drainage anddeep water well applications as well.Some of the integral features of this remarkable piece ofmachinery are listed below:♦♦1,30,000 lbs (59,090 kg) actual pull up♦♦28 inches (711 mm) table opening♦♦760 hp deck engine♦♦1350/350 – 1150/500 variable volume compressor♦ ♦ (38 cu m/min @ 24.1 bar & 32.6 cu m/min @ 35.5 bar)♦♦50 feet (15.25 m) of clear head travelCOAL INSIGHTS 45 November 2010

Expert Speak♦♦Hydraulic feed system♦♦Drill rods 4.5 inches O.D and 2.5 inches I.D and 30 ftlong♦♦Tri-cone roller bit 28 inches diametre♦♦Tool lubricator-positive displacement air pumpoperated piston type with variable delivery of 5 gallonsper hour to 18.9 gallons per hour♦♦Water Injection System 25 gpm (95 lpm) water pumpelectric foam pump.Use in ventilation shaftsRescue of trapped miners is not the only area where theT130XD proves its mettle. This drill can also be used fordrilling ventilation shafts in large underground mines. Manylarge mines have severe ventilation problems and multipleventilation shafts will reduce the cost of ventilation in a mine,which by the way is considerable. Indeed, modern thinkingprescribes that multiple shaft ventilation is a very cost effectiveprocess and also probably the only one to solve the issue ofventilation in large mines.Use as pilot shaftUse of such large diameter boreholes has the potential to beused as a pilot shaft for very fast sinking. Indeed, pulls up to3 to 4 metres can be obtained for high speed shaft sinking andthe cost of explosives will also come down sharply due to thefree face available by the pilot hole.It may be noted in this context that Coal India, which isproposing nearly 150 million tons (mt) of coal productionfrom underground mines by 2020 from its present level of 40to 50 mt, will require sinking of new shafts urgently for highlymechanised underground mines. The ambitious programmeof increasing underground coal production to such high levelswithout sinking modern shafts is just not possible unlessimmediate steps are taken to sink a few dozen shafts and fitthem with high capacity skips.Use of machines such as the Schramm T130XD is alsonecessary for deepening present shafts. One needs to installthis drill machine over a shaft by removing the headgeartemporarily and covering the shaft by heavy duty girderplatform. The drill can be mounted on the platform to drill thepilot shaft from the pit bottom to the desired level. The rockcuttings from the bore hole can be packed in an undergroundgallery.The other uses of this wonderful equipment lies indewatering of old workings by boring such holes at the dipmost points of the old workings and installing large diameterand high capacity submersible pumps in these bore holes.The writer is former CGM of Coal India Ltd, former COO of Aditya Birla Groupand is present Managing Director of Priya Mining Consultancy and ServicesPvt LtdCOAL INSIGHTS 46 November 2010

CORPORATEMonnet Ispat posts 2%rise in net profit in Q2Coal Insights BureauDomestic steel maker Monnet Ispat has reported2 percent rise in net profit for the second quarterending September 30 to `65.60 crore, as against theyear-ago period, even as high input costs took a toll on itsbottom line.The net profit declined due to maintenance shutdownsand an increase in iron ore prices, according to companyofficials.The company had posted a net profit of `64.21 crore forthe second quarter of the previous fiscal. Lower production ofsponge iron and power also hit the company bottom line. Thecompany registered net sales of `360.65 crore in the reportingquarter as against `313.98 crore in the corresponding period ofthe previous year.Monnet Ispat is in the process of establishing facilitiesto produce 1.8 million tons per annum (mtpa) of steel. Atpresent, it has a sponge iron manufacturing capacity of 1mtpa.In terms of production numbers,the sponge iron productionis 1,62,000 tons against 1,75,000 tons in the previous quarter.In terms of realisations, realisation of sponge iron is up`16,000 per ton compared to `14,500 per ton in the previousquarter.The prices have already started to look up since last monthand we hope that sponge iron prices will do better from nowon till the year end.The company will also commission a 80 mw capacitycaptive power plant by the end of FY11. Separately, itssubsidiary, Monnet Power, is working to set up a 1050 mwmerchant power plant in Orissa.The company is planning to ramp up capacity for MonnetPower. But the plans are still at the drawing board level andformal declarations are expected in due course of time.The company’s power unit, Monnet Power, may looktowards tapping the capital market next year to part fundthe construction of its upcoming power projects in Orissaand Andhra Pradesh. The power plants are expected to goonstream by 2015.The company may opt for a gas-fired power plant insteadof a coal-based thermal power plant, even though it has anannual production capacity of 1 mtpa.The company also plans to invest $100 million for purchaseof coal mines in Indonesia and South Africa. It has shortlistedtwo mines in South Africa and three in Indonesia.Coal extracted from these overseas mines could either beused for the company’s power plants or utilised for tradingpurposes. Monnet is also looking to acquire iron ore, limestone,manganese and chromite mines in Africa.The company plans to augment its present steelproduction capacity with a 1.5 mtpa capacity plant atRaigarh in Chhattisgarh district, which is expected tobecome operational by December 2011. It is also planningto set up a steel plant at Bokaro, for which it is in the processof acquiring land.According to senior company officials, the companyexpects sponge iron prices to rise in the coming months, dueto demand for long steel from infrastructure companies.PowerGrid shares tostart trading from Nov 26Coal Insights BureauState-owned PowerGrid Corporation’s new sharesallotted to the public under its recent 20 percent followonpublic offer will start trading on the bourses fromNovember 26.The government divested 10 percent of its 86.36 percentstake in PowerGrid Corporation through the follow-on publicoffer, while the company offered an equal percentage of freshequity.The government raked in about `7575 crore fromPowerGrid’s share sale programme.The funds raised from the FPO will be used for partfundingthe PSU’s `55,000-crore capex plan, whichenvisages investments worth `30,900 crore over the nexttwo years.The company had fixed the issue price of shares underthe offer at `90 per share, at the higher end of the IPO priceband of `85 to `90 per share. However, retail investors andemployees will be given equity stocks at a 5 percent discounton the issue price.The FPO received a huge response from investors andwas oversubscribed 14.83 times, garnering total demandfor 1248.48 crore shares, as against 84.17 crore shares onoffer, according to data available from the National StockExchange.SBI Capital Markets Ltd, Goldman Sachs (India) SecuritiesPvt Ltd, ICICI Securities and JP Morgan India Pvt Ltd are thebook running lead managers to the issue.The mega offer has given a boost to the government’sdisinvestment programme, which aims to garner `40,000 crorethis fiscal.PowerGrid’s public offer will be followed by stake salesby Hindustan Copper, Manganese Ore India Ltd and SAIL,among other PSUs, this fiscal.COAL INSIGHTS 47 November 2010

CORPORATECIL 3rd most powerful company in IndiaTamajit PainState-run Coal India Ltd has become the third mostpowerful Indian company with a total marketcapitalisation (m-cap) of `2,09,671 crore and is onlylagging behind Reliance Industries Ltd and ONGC. The coalbehemoth added another feather to its cap last week endedNovember 19 when it replaced IT giant Tata ConsultancyServices (TCS) to become the country's third most covetedfirm. CIL added `7611 crore to its valuation, which onNovember 19 stood at `2,09,671 crore. According to marketanalysts, investors are optimistic about the stock and lookingat the cash balance of the company it is likely that it may go foracquisitions either in the domestic space or overseas.The coal behemoth is in talks with US miners PeabodyEnergy Corp. and Massey Energy Co. to buy stakes in coalmines with long-term offtake agreements.The state-run Indian company is the world's largest coalminer by production and has been seeking to secure coal assetsoverseas to meet growing demand from local utilities, whichaim to add 113 gigawatts of power generation capacity overthe next seven years. India currently has a power generationcapacity of 164 gigawatts. The overseas plans are importantfor Coal India to meet local demand because its efforts toincrease domestic output have been stymied as variousprojects are stuck due to delays in receiving environmentaland forest clearances. Coal India, which listed its shares onlocal stock exchanges on November 4, currently does not haveany producing assets overseas.The company has invited initial bids from investment andmerchant bankers by November 15 to assist it in its venture toacquire coal resources abroad, its website showed. Coal Indiahad in August 2009 acquired prospecting licenses for two coalblocks in Mozambique. The miner has set aside $1.2 billion tobuy overseas assets in the financial year through March 2011.On April 12, Peabody and Coal India said in a jointstatement they are in a broad range of preliminary talks toexplore long-term coal supplies and other possible ventures.In June, officials had said that the company is doing duediligence on five proposals worth $1.7 billion for partnershipswith global miners in producing mines in Australia, Indonesiaand the U.S. In August, Coal India invited bids from overseasminers to enter into contracts for long-term offtake of coal.Currently, the company is studying responses from minersfor these long-term contracts. The company, the world'slargest coal producer, made a strong debut on the bourseson November 4, aided by institutional demand and robustprospects for coal demand in the country. Coal India openedtrade at `287.75 on the Bombay Stock Exchange, 17.4 percenthigher than its initial public offering price of `245.The debut of the $3.43 billion initial public offering is likelyto be a shot in the arm for the federal government's ambitiousprogramme to raise $9.02 billion this fiscal year throughMarch 2011 by selling stakes in state-owned companies. Thesuccess of the Coal India share sale came after investors coldshoulderedearlier follow-on issues by state-run iron ore minerNMDC Ltd and thermal power generator NTPC Ltd due tosteep pricing. State-run insurance companies and banks hadto step in to buy the shares.Aiding Coal India's opening is the fact that it controls 82percent of India's coal production. Coal, in turn, powers threequartersof India's electricity output and demand is expectedto grow at 10 percent a year for the next six years, whiledomestic supply will lag at 7 percent.India faces a peak-hour power deficit of nearly 14 percentand plans to triple its generation capacity over the next decade.Global brokerages have given thumbs up to the stock.Brokerages said Coal India deserved a premium to its globalpeers due to higher EBITDA growth until the fiscal yearended March 31, 2013, higher reserves in active mines, greaterpredictability in earnings, superior returns and chronic coalshortages in India – with imports constrained by infrastructure– and the average multiples of Indian companies being higherthan global ones.The issue of nearly 631.64 million shares had bids for almost9.65 billion shares, or 15.28 times the shares on offer, drawingdemand to the tune of $52.48 billion. The institutional part ofthe issue was covered 24.7 times, while the section reservedfor the wealthy individuals was covered 25.40 times and theretail tranche 2.31 times. The entire proceeds of the issue willgo into the government's coffers to help reduce the wideningfiscal deficit and fund social projects.Coal India's IPO will surpass Reliance Power's $3 billionlisting in 2008 as India's largest new issue, and comes tomarket amid a flurry of big deals in Asia.Coal India expects profits to rise by 25 percent this fiscalyear, helped by rising demand, and has set aside $1.2 billionfor overseas acquisitions in the year to March 2011. It iscurrently evaluating proposals to buy stakes in coal firms inthe US, Australia and Indonesia. Morgan Stanley, Citigroup,Kotak Mahindra Capital, Enam Securities, Deutsche Bank andBank of America-Merrill Lynch were managers on the offer.The government has sold 10 percent of its stake in theworld's largest coal producer through the public offer. Prior tothe IPO, CIL was a fully government-owned entity. Post issuethe government’s stake will come down to 89.99 percent.As of March 31, 2010, CIL operated 471 mines in 21 majorcoalfields across eight states in India, including 163 opencastmines, 273 underground mines and 35 mixed mines (whichinclude both opencast and underground mines). It producesnon-coking coal and coking coal of various grades for diverseapplications. For the year ended March 31, 2010, CIL hasreported a net profit of `9622.45 crore on a total income of`52,592.29 crore.COAL INSIGHTS 48 November 2010

CORPORATEAdani bags coal block developmentrights in OrissaCoal Insights BureauThe country's largestimporter of coal, AdaniEnterprises, has baggedthe rights to develop a coal blockin Orissa, which has estimatedreserves of 1.6 billion tons.The diversified conglomeratewill also develop a 2000-MWcapacity power plant as part of itsdeal with the PSU consortium thatselected the billionaire GautamGautam AdaniAdani-led company, as MineChairman, Adani GroupDeveloper and Operator (MDO)for the Chendipada coal block."Adani has been selected as the MDO for developmentand operation of the Chendipada coal block in Orissa throughglobal competitive bidding," the diversified group said in arecent statement.The block has estimated reserves of 1.6 billion tons andan annual production capacity of 40 million tons per annum(mtpa)."Coal production will commence within 42 to 48 months'time from these mines. This coal will be used as fuel by variousthermal power stations in Maharashtra, Uttar Pradesh,Rajasthan and Chhattisgarh," it said.The coal ministry had allotted the block in the Talchercoalfield, Orissa, jointly to Uttar Pradesh Rajya VidyutUtpadan Nigam Limited (UPRVUNL), Chhattisgarh MineralDevelopment Corporation (CMDC) and Maharashtra StatePower Generation Company (Mahagenco) for captive miningof coal."A joint venture company, UCM Coal Company Ltd (UCM),has been formed by UPRVUNL, CMDC and Mahagencofor development and mining ofthe Chendipada coal block," thecompany said, adding that the JVcompany had invited global bidsto develop the reserves. Financialdetails of the deal could not beimmediately ascertained. As partof the deal, Adani will undertakedevelopment and operation of thecoal block, it said."(The work) includes landacquisition, R&R, preparation ofmine plan, approvals and clearances, coal mining, setting upof coal washery, establish railway siding and deliver washedcoal to end-users at the designated power stations in UP,Chhattisgarh and Maharashtra," the statement added.Adani is also required to set-up a power generation projectof about 2000-MW capacity as part of the deal with UCM.Adani will hold an 89 percent stake in the power project, whilethe remaining will stay with the PSU consortium.Adani Enterprises, which is the largest coal importer inIndia, is expanding its domestic base aggressively through theMDO business model."In the recent past, Adani group has already woncompetitive bidding tenders as MDO for total mining capacityof 70 mtpa of Mahaguj Collieries, Rajasthan Rajya VidyutUtpadan Nigam and Chhattisgarh State Power GenerationCo for various coal blocks in Orissa and Chhattisgarh," itadded.Adani Enterprises further said that with the latest deal, itwill have 110 mtpa of coal mining contracts in India, "whichwill make it one of the largest mining companies in the privatesector."COAL INSIGHTS 49 November 2010

CORPORATEHigh voltage transformerfrom Crompton GreavesCoal Insights BureauCrompton Greaves Limited, part of the $4-billionAvantha Group, has despatched their first 1200 kVCapacitive Voltage Transformer (CVT) to the UHVresearch station of Power Grid at Bina, Madhya Pradesh, fromits Nasik switchgear plant.This is the first Indian product, conceived, designed andsuccessfully developed indigenously, as per a companystatement.Development of this system is expected to go a long way intackling the ever growing power demand, which is expectedto be over 400 GW by 2020.Although many countries like USSR, Japan, Americaand Italy have made great progress in the research of 1200kV ultra high voltage AC transmission system, only Chinahas recently established the commercial 1100 kV systemsuccessfully.The need for bulk transfer at ultra high voltage levelsin India in the coming years is beyond doubt. The task,spearheaded by Power Grid Corporation of India Ltd (PGCIL),involves establishing a research station with an experimental1200 kV transmission line (1 km line at Bina in MadhyaPradesh) to study the performance of the various equipment,environmental effects and operational difficulties and developthe commercial lines in due course.However the real challenge was to develop the first of itskind UHV products indigenously. Crompton Greaves willalso develop a 1200 kV, 333 MVA power transformer and a1200 kV surge arrester.The company manufactured the 1200 kV system at S1division, Nasik and tested for its performance characteristicsat the copany’s EHV laboratory at Nasik and also at CentralPower Research Institute, Hyderabad.The managing director of the company, S.M. Trehan,has said: “Leading edge technology and World classmanufacturing are the two driving forces with which CGLis forging ahead to be a world leader in the global T&Darena.This successful development of 1200 kV CVT is a milestonein our endeavour”. The company will also soon deliverthe other two products which are at an advanced stage ofdevelopment.COAL INSIGHTS 50 November 2010

CORPORATEONGC ranked world’s top oil companyCoal Insights BureauState-owned Oil and Natural Gas Corporation (ONGC)Limited has been ranked the world's top oil and gasexploration and production (E&P) firm by global energyresearch agency Platts.ONGC was last year placed at the third position in the pureE&P category, behind Encana of Canada and China NationalOffshore Oil Corporation (CNOOC) of China. CNOOC wasranked second in the list for 2010."In the pure E&P category, ONGC has achieved thedistinction of numero uno ranking not only in Asia, but evenon a global scale," Platts said in a statement.In the overall Platts Top 250 Global Energy CompanyRankings that rated world's leading oil and gas, power andcoal firms, ONGC climbed to the 18th slot from 26th positionin 2009 rankings."This is the highest ever ranking of ONGC in the list ofPlatts Top 250, ahead of global leaders like Cooco Phillips,Statoil, CNOOC, BG and others," ONGC said. Under thestewardship of R.S. Sharma, ONGC has steadily improved itsfortunes during the past four years.With revenues of $22 billion, ONGC reported a profit of$4.24 billion in 2009-10, which forms the basis for the Plattsrankings. It had assets worth $33.37 billion.Under Sharma, ONGC has been able to arrest declinein output from its ageing fields through innovative use oftechnology and has set the floor for reversing the decliningtrend of the past by fast-track development of new andmarginal fields.Sharma will retire from the positions of chairman andmanaging director of ONGC on January 31, 2011, but theinitiatives taken under him will see the company's oilproduction rise to 28 million tons (mt) in 2013-14, from thecurrent llevel of over 25 mt.Natural gas production is slated to rise to over 100 millionstandard cubic meters per day (mmscmd) by 2014-15, from thecurrent 58.86 mmscmd. Platts also ranked ONGC as the fastestgrowing company in Asia in the E&P sector.The global list headed by ExxonMobil Corp of the US,had billionaire Mukesh Ambani-run Reliance Industriesat the 13th position, Platts said. Reliance had assets worth$55.94 billion and revenues of $43.63 billion. It had a profitof $5.24 billion.Embattled British energy giant BP Plc was placed second,ahead of Gazprom OAO of Russia, Petrobras Brasileiro ofBrazil, Total SA of France, E.On AG of Germany, PetrochinaCo, China Petroleum, Chevron Corp of US and Royal DutchShell.Meanwhile, the government formally conferred the'Maharatna' status to flagship explorer ONGC on November16. The move will substantially enhance their autonomy andoperational flexibility as well as act as a booster when thecompany shortly approaches the market for a further stakesale.Conferring the Maharatna certificates, heavy industryminister, Vilasrao Deshmukh, stressed the need for a robustpublic sector and specially mentioned ONGC as an examplefor others to emulate. "Best practices of ONGC and ONGCVidesh are worth emulating by others," he remarked, whilehanding over the certificates to company chiefs.The Maharatna status will allow these entities to decide oninvestments up to `5000 crore in one project. The Maharatnastatus is granted to listed Navaratna companies with anaverage annual turnover of more than `25,000 crore, net profitof `5000 crore and net worth of `15,000 crore during the pastthree years.Analysts said the enhanced autonomy would boostinvestor sentiment. The analysts also said greater operationalflexibility will allow these companies to become world-classand compete in the international arena.The state-run oil major is likely to divest 5 percent of itsequity stake by March 2011 through a follow-on public offer(FPO), according to top officials.The company is doing a valuation of underlying reserves.Post-disinvestment, the government's holding in the country'sfirst 'Maharatna' company will be 69.14 percent from thepresent 74.14 percent.The company would not raise fresh equity, officialssaid, as its joint venture partners were raising debt from themarket, so that there is no need for the company to go to themarket.The company offered bonus issue in the ratio of 1:2, thatis, one share for every two shares, in 2006 and gave 5 percentdiscount when it went public in 2004 to retail investors andemployees.COAL INSIGHTS 51 November 2010

LogisticsFreight rates tend to fluctuateSarbani HaldarDry bulk freight rates which had witnessed a lot offluctuations throughout October, continued to displaya similar trend in the initial week of November as well.Although demand for iron ore and coal did pull up rates to agreat extent in the end of October, yet a few days later, fall inChinese demand for ore and dearth of cargoes to be shippedpulled down the rates.Rates for shipping iron ore in the major routes continuedto decline even in the middle of the month, as demand fromChina weakened and excess supply of vessels weighed downon the market. While rates in the Capesize segment felt mostof the impact, the Panamax segment was slightly betteroff due to improving thermal coal movement ahead of thewinter.The occasional improvement in rates on some days haslargely been due to China’s restocking of resources while onthe other hand, the approaching winter would mean moredemand for thermal coal from this country. Vale had bookeda number of vessels during the end of October when rates forshipping iron ore in the Tubarão to Qingdao route softenedto $30.35 per ton, while in the Western Australia to Qingdaoroute, the rates were around $12 per ton. However, activity inthe Pacific basin has continued at a good pace, riding on theback of activity from the major mining companies.Nevertheless, Indian iron ore exports recovered anda surprising number of vessels were chartered. A total of16 vessels were chartered to haul Indian iron ore aroundthe middle of November. However, there was a build-upin Capesize availability and less chartering activity due toslower Chinese ore imports, which were negatively affectingCapesize rates.Another factor which could seriously affect the dry bulkmarket in the coming weeks and months is the loomingChinese coal shortage. China is expecting a moderate shortageSource: Insights ResearchBaltic Exchange Indexof thermal coal in the upcoming months, with coal supplieslikely to be extremely tight in January 2011. Chinese coaldemand normally peaks in January due to cold temperaturesand a seasonal low in hydropower output. Chinese electricityconsumption has declined as the government intended - butgoing forward, consumption is likely to increase again as thenation prepares for the winter season.Chinese coal imports will set new records in the upcomingmonths. Leading market insiders’ conservative estimatesanticipate that Chinese coal imports will total about 16.75million tons (mt) in November and 17.25 mt in December.Around mid-October, demand for iron ore and thermalcoal improved with China resuming its restocking activitiesafter the end of the National Day Holidays. However, theoccasional weakness in rates during some weeks of the monthhas been due to varying chartering activities by the major ironore producers. At the end of the month, freight rates in theCapesize segment improved as compared to the beginning ofthe month.Tex report data has revealed that spot freight rates forCapesize vessels in the Brazil to China route have weakened,although the change has been very volatile. For transporting1,60,000 tons of iron ore from Tubarão, Brazil to Qingdao,China, the freight rate is $30 per ton for a laycan scheduled forNovember 20 to 30. Last month, however, for transporting thesame quantity of material from Tubarao, Brazil to Qingdao,China, the freight rate was fixed at more than $31 per ton for alaycan scheduled for late Novemebr.Rates in the Western Australia to China route have alsobehaved in a similar fashion. According to the Tex Report,BHP Billiton has chartered a vessel to ship 1,70,000 tons ofiron ore from Port Hedland, Western Australia to Qingdao,China at $11.50 per ton for a laycan scheduled for November28 to December 7. Earlier, for transporting 1,70,000 tons of ironore from Port Hedland, Western Australia to Qingdao, China,the freight rate had been fixed at $12.25 per ton for a laycanscheduled for November 11 to 20.The improvement in rates in the Capesize segment towardsthe end of October was due to China restocking its resourcesof both iron ore and coal before the approaching winter, whichwould mean more demand for thermal coal from this country.Besides, iron ore inventory in the country is presently low andthis would result in China importing a lot of iron ore for thefourth quarter.As per market sources, rates in the South America to Chinaroute climbed steadily. Around the end of October, Valebooked a number of vessels which saw rates in the Tubarãoto Qingdao route touch $30.35 per ton, while in the WesternAustralia to Qingdao route, the rates were around $12 per ton.Another factor which would impact rates would be domesticCOAL INSIGHTS 52 November 2010

Logisticsrates of iron ore which are presently high, thereby makingimports favourable. Riding on the robust improvement indemand from China around the middle of the month, theaverage Capesize rates nearly touched the $45,000 per daylevelDemand for both iron ore and thermal coal is likely towitness robust growth in the coming months as China startsrestocking. While in India, with Karnataka banning iron oreexports, the supply for high grade ore is tight at the momentwhich would pull up rates, the forecast of a cold winter inChina would see more demand for thermal coal, speciallykeeping in mind the recent electricity crunch that the countryhas witnessed.However, the new building vessels which are coming onstream in the coming months would continue to be a painpoint for this segment in the coming days.Baltic Dry IndexThe volatility in freight rates also reflected in the way the majorindices moved throughout October. The initial improvement infreight rates gradually peaked around the middle of the monthwith the strongest gains coming in from the Capesize segment.Although at the end of the month, the sudden disappearanceof major iron ore producers from the chartering scene broughtabout some weakness in the market, yet this segment managedto end the month on a higher note since the beginning.The Baltic Dry Index (BDI) which began the month on 2452points on October 1 improved to 2769 points on October 14.However, around the end of the month, with rates coolingdown, it ended the month on 2648 points on November 1,thereby displaying a 7.9 percent improvement month-onmonth.However, it later recorded 2313 points on November12.The Baltic Capesize Index (BCI) which began the monthon 3419 points on October 1 peaked to 4461 points inOctober 27. However, it declined later to 4231 points onNovember 1 displaying more than 30 percent month-onmonthimprovement. The BCI later recorded 3612 points onNovember 12.However, the Baltic Supramax Index (BSI) registered a6 percent month-on-month decline. Beginning the monthon 1843 points on October 1, it improved to 1905 points onOctober 12 but declined later on to end the month on 1730points on November 1. The BSI declined further to 1516 pointson November 12.In comparison to this, the Baltic Panamax Index (BPI) wentthrough the strongest fluctuations. After beginning on 2412points on October 1, it fluctuated strongly and touched 2461points on October 27. It later ended the month on 2371 pointson November 1, thereby declining by more than 1 percentmonth-on-month. However, it later touched 2365 points onNovember 12.COAL INSIGHTS 53 November 2010

LogisticsIron ore traffic declines 14.49%Sarbani HaldarIron ore volumes handled by the 12 major ports of thecountry continued to dip in line with the previous month.Together, the ports recorded a 14.49 percent decline incargo handled, as they moved 42.83 mt of cargo as comparedto 50.09 mt moved in the first seven months of the previousyear.During October alone, the ports moved 6.81 mt of iron ore.Earlier, for April to September 2010, the major ports of thecountry moved 36.02 mt of iron ore traffic. It is to be notedhere that over the past few months, the iron ore traffic throughthe major ports has been on a declining mode and this monthwas no exception. In the month of September, the iron oretraffic volumes declined by more than 14 percent to 4.52 mt. InApril to August 2010, the total iron ore volume moved by theports amounted to 31.05 mt as compared to the correspondingperiod of the previous year.The country’s 12 major ports registered a robust growth incoking coal movement in the first seven months of the presentyear. Going by the latest data published by the Indian PortsAssociation (IPA), the 12 major ports of the country witnesseda 10.44 percent improvement in coking coal traffic for theperiod April to October 2010 as compared to the correspondingperiod a year ago.Together, the 12 major ports moved 17.27 million tons (mt)of coking coal during the first seven months of 2010. In termsof volumes, too, the coking coal movement recorded a monthon-monthimprovement of 2.39 mt during April to September2010.Interestingly the Kolkata port which has seen a significantdrop in its cargo volumes for more than a year now, recordedgrowth in its cocking coal volumes for the said period.The Haldia Dock Complex recorded more than 5 percentimprovement in its coking coal volumes during the first sevenmonths of the present year, as it handled 3.7 mt of coking coalas compared to 3.5 mt handled during the same time a yearago. The Kolkata Port, too, has handled 0.7 mt of coking coalduring the period.The Paradip Port witnessed more than 38 percent growthin its coking coal volumes as it handled 3.48 mt of cargo duringApril to October 2010 as compared to 2.51 mt handled duringthe first seven months of the previous year.The Vizag Port too has seen 10 percent improvement in itscoking coal volumes during April to October 2010 as it handled5.01 mt of coking coal as compared to 4.55 mt handled by itduring the same period a year ago. During the same period,the New Mangalore port regsitered a 33 percent improvementin its coking coal volumes during the first seven months of2010 as compared to the same period a year ago.The data revealed that thermal coal movement throughthe ports declined by 2.94 percent to 24.56 mt during Aprilto October 2010 as compared to the same period a year ago.However, the extent of decline has been arrested to a greatextent and in terms of total volume, there has been a growthof 3.9 mt of thermal coal during the April to September 2010period.On the whole, total traffic movement through the 12 majorports improved by 0.47 percent during April to October 2010as compared to the same period a year ago. The 12 major portshandled 316.10 mt of cargo during this period as comparedto 314.63 mt handled by it during the same period a year ago.During October alone, the ports handled 44.80 mt of traffic.Earlier, the IPA data showed that the major ports of thecountry moved 271.295 mt of traffic as compared to 267.986mt moved by them during the same period a year ago. Trafficvolumes through the ports, too, marginally improved duringSeptember 2010, when the 12 major ports moved 44.383 mt ofcargo. In August 2010, the 12 major ports had handled 42.827mt of cargo.Container volumes during the first seven months of 2010improved 12.62 percent to 64.06 mt as compared to 56.88 mtmoved during April to October 2009. However, the othercargo movement through the major ports declined to 53.4 mtas compared to 55.50 mt handled during the same period ayear ago.In terms of volumes moved by the port, the Cochin portrecorded the strongest improvement of 14.27 percent to 103.80mt of cargo while the New Mangalore port recorded a 13.42percent dip in its cargo volumes in the first seven months of2010, as it moved 18.0 mt of cargo as compared to 20.79 mtmoved during the same period a year ago. Interestingly, theKolkata port, which has been in the red for some time, hasjust managed to overcome its decline in cargo movementas it moved nearly the same volumes during the first sevenmonths of this year as compared to the first seven months ofthe previous year.COAL INSIGHTS 54 November 2010

Power sector updatePOWER CUTS IN INDUSTRIES DURING October 2010State/Region Energy Cut Demand cutNorthern RegionChandigarhDelhiNo Notified Power CutNo Notified Power CutHaryana 0 to 1 MU/day on HT/LT industries on different days. 0 to 250 MW cut on HT/LT industries for different hours on different days.HPJ&KNo 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 onsystem peak load demands and system constraints on Industrial Consumers in Organised Industrial Estates.PunjabRajasthanUttar Pradesh0.64 to 1.80 MU/day on HT/LT industriesNo Notified Power CutNo Notified Power Cut600 MW cut on HT/LT industries. Restriction timings 3 hrs. (from 1830 to 2130hrs.). Upto two weekly off day on arc/induction furnaces and one weekly off daygeneral 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 RegionChattisgarh Nil NilGujaratAll 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 andcannot avail as per their choice. All industries are required to keep their recess timings staggered.Madhya Pradesh Nil NilMaharashtra Nil NilGoa Nil NilSouthern RegionAndhra PradeshKarnatakaKeralaTamil NaduPuducherryAll 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 1033 MW(14.57 MU for the month).It includes the power cut component also.Nil; However, there was load shedding up to 500 MW (Total 300.74 MU for the month)Nil; However, there was load shedding up to 125 MW during peak hours (Total 2.215 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 1085 MW (Total286.081 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 45 MW (Total 2.8 MU)Eastern RegionBiharJharkhandNo Notified Cuts / RestrictionsNo Notified Cuts / RestrictionsDVC Power cut to HT industries :NIL Power cut to LT industries :NILOrissaNo Statutory CutWest BengalPower 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 dependingupon availability of power vis-à-vis requirement.COAL INSIGHTS 55 November 2010

Power sector updateALL INDIA ENERGY GENERATION,GENERATION (GWH)CategoryMonitoredCapacity(MW)TargetApril 2010 toMarch 2011PROGRAMMEACTUALOctober 2010ACTUAL SAMEMONTH (2009-10)% OFPROGRAMME% OF LASTYEARPROGRAMMETHERMAL 107555.92 690856.50 58463.92 56778.39 53068.78 97.12 106.99 387826.00NUCLEAR 4560.00 22000.00 1857.00 2287.98 1727.91 123.21 132.41 12199.00HYDRO 37328.40 111352.00 10163.58 10753.52 9576.54 105.80 112.29 74755.39BHUTAN IMP 0.00 6548.00 718.46 738.99 727.86 102.86 101.53 5457.65TOTAL 149444.32 830756.50 51202.96 70558.88 65101.09 99.10 108.38 480238.04NORTHERN REGIONTHERMAL 26050.26 171704.41 14661.36 14301.03 12890.45 97.54 110.94 95407.48NUCLEAR 1620.00 8553.00 777.00 974.80 431.96 125.46 225.67 4777.00HYDRO 13678.25 51044.00 3768.49 5169.91 3651.69 137.19 141.58 37581.49TOTAL 41348.51 231301.41 19206.85 20445.74 16974.10 106.45 120.45 137765.97WESTERN REGIONTHERMAL 37161.31 238109.18 20538.29 20734.35 19890.21 100.95 104.24 133912.40NUCLEAR 1840.00 8601.00 752.00 797.02 866.73 105.99 91.96 4724.00HYDRO 7392.00 14193.00 1425.50 1150.82 1110.14 80.73 103.66 7798.90TOTAL 46393.31 260903.18 22715.79 22686.19 21867.08 99.85 103.73 146435.30SOUTHERN REGIONTHERMAL 22970.80 148159.93 11735.74 11717.51 11455.37 99.84 102.29 84323.70NUCLEAR 1100.00 4846.00 328.00 516.16 429.22 157.37 120.26 2698.00HYDRO 11294.45 31882.00 3270.36 3100.16 3505.63 94.80 88.43 19415.24TOTAL 35365.25 184887.93 15334.10 1533.83 15390.22 100.00 99.63 106436.94EASTERN REGIONTHERMAL 20515.05 128594.90 11147.42 9632.77 8461.51 86.41 113.84 71724.74HYDRO 3847.70 9988.00 1210.74 854.47 871.94 70.57 97.88 6973.95TOTAL 24362.75 138582.90 13258.16 10487.24 9334.45 84.86 112.35 78698.69NORTH EASTERN REGIONTHERMAL 858.50 4288.08 381.11 392.73 371.24 103.05 105.79 2457.68HYDRO 1116.00 4245.00 488.49 478.16 436.14 97.89 109.63 2985.81TOTAL 1974.50 8533.08 869.60 870.89 807.38 100.15 107.87 5443.49Provisional based on actual-cum-assessmentCOAL INSIGHTS 56 November 2010

Power sector updatePROGRAMME AND PLANT LOAD FACTORPLANT LOAD FACTOR %APRIL 2010 – October 2010 October 2010 APRIL 2010 - October 2010ACTUALACTUAL SAMEPERIOD (2009-10)% OFPROGRAMME% OF LASTYEARPROGRAMMEACTUALACTUAL SAMEMONTH (2009-10)PROGRAMMEACTUALACTUAL SAMEPERIOD (2009-10)374229.03 361997.76 96.49 103.38 70.48 74.84 75.23 71.43 72.49 75.6713167.17 10544.09 107.94 124.88 55.96 67.44 56.37 53.26 56.22 49.8376077.43 70175.56 101.77 108.414847.61 4617.75 88.82 104.98468321.24 447335.16 97.52 104.6992500.56 91933.49 96.95 100.62 71.46 79.17 77.70 70.75 76.14 81.694685.23 2013.70 98.08 232.67 68.71 80.88 49.20 61.19 56.31 33.2340717.85 36485.03 108.35 111.60137903.64 130432.22 100.10 105.73132739.02 126430.37 99.12 104.99 74.02 76.69 80.38 71.73 71.78 76.545329.79 5262.43 112.82 101.28 54.93 58.22 63.31 49.99 56.40 55.698793.13 8036.49 112.75 109.42146861.94 139729.29 100.29 105.1082670.89 81754.14 98.04 101.12 80.50 73.97 79.97 77.48 78.06 82.883152.15 3267.96 116.83 96.46 40.08 63.07 52.45 47.76 55.79 57.8417505.42 16960.28 90.16 103.21103328.46 101982.38 97.08 101.3263872.81 59390.97 89.05 107.55 64.98 68.38 61.60 67.10 65.17 62.586129.52 6175.97 87.89 99.2570002.33 65566.94 88.95 106.762445.75 2488.79 99.51 98.27 0.00 0.00 0.00 0.00 0.00 0.002931.51 2517.79 98.18 116.435377.26 5006.58 98.78 107.40Source: Central Electricity AuthorityCOAL INSIGHTS 57 November 2010

Power sector updateLIST OF UTILITY/ORGANISATION WHOSEPLF ACHIEVEMENT WERE LOWER THAN THERESPECTIVE PROGRAMME DURING Oct 2010Name of Power Stn.I. CENTRALPLF in %Programme Achievement ShortfallBADARPUR TPS 91.7 76.51 15.19FARAKKA STPS 90.22 77.8 12.42KAHALGAON TPS 82.67 74.46 8.21SIMAHADRI 98.39 97.90 0.49TALCHER STPS 88.58 88.16 0.42RAMAGUNDAM STPS 77.49 76.39 1.10VINDHYACHAL STPS 91.41 89.30 2.11MUZAFFARPUR TPS 25.66 24.65 1.01BOKARO’B’ TPS 74.24 65.09 9.15Capacity Addition & Generation During October 2010DescriptionOctober 2010 October 2009Target Achivement Target AchivementCAPACITY ADDITION (MW)THERMAL 1300.00 2085.00 980.00 1334.00HYDRO 173.50 0.00 39.00 0.00NUCLEAR 0.00 0.00 0.00 0.00TOTAL 1473.50 2085.00 1019.00 1334.00GENERATION (MU)THERMAL 58463.92 56778.07 22002.41 53068.78NUCLEAR 1857.00 2287.99 1623.00 1727.91HYDRO 10163.58 10753.37 10536.00 9576.54BHUTAN IMPORT 718.46 738.99 746.00 727.86TOTAL 71202.96 70558.42 67907.41 65101.09TARGET/ACHIEVEMENT IN CAPACITYADDITION (MW) DURING October 2010DURGAPUR TPS 87.76 71.61 16.15II. STATEIPGPCL 79.65 30.95 48.70RRVUNL 83.45 75.25 8.20UPRVUNL 64.00 56.85 7.15GSECL 76.26 75.54 0.72GMDCL 80.11 56.60 23.51MAHAGENCO 68.33 60.13 8.20MPPGCL 80.58 53.54 27.04ACHIEVEMENT IN GENERATION (MU)DURING October 2010KPCL 75.05 45.54 29.51BSEB 13.01 1.53 11.48DPL 70.52 24.91 45.61JSEB 35.96 4.96 31.00WBPDC 67.63 62.76 4.87OPGC 92.00 90.71 1.29Source: Central Electricity AuthoritySectorSECTOR-WISE PLF(%) PROGRAMMEAND ACHIEVEMENTS (THERMAL)October 2010 April 2010 - October 2010Prog. (%) Ach. (%)* Prog. (%) Ach. (%)*Central Sector 73.53 85.61 77.75 83.37State Sector 71.05 65.33 69.73 62.68Pvt.UTL Sector 85.33 81.50 83.71 82.74All India 70.48 74.84 71.43 72.49* Provisional based on actual-cum AssessmentSource: Central Electricity AuthoritySource: Central Electricity AuthorityALL INDIA PLF (%) DURING October 2010Source: Central Electricity AuthorityCOAL INSIGHTS 58 November 2010

Power sector updateCAPACITY ADDITION FOR October 2010 AND APRIL 2010 - October 2010 (MW)Schemes Status of Schemes Target 2010-11October 2010 April 2010 - October 2010 DeviationTarget Achievement Target Achievement (+) / (-)Central 6015.00 500.00 500.00 2740.00 1615.00 -1125.00ThermalState 6549.20 500.00 850.00 3637.20 2121.00 -1516.20Pvt. 6191.00 300.00 735.00 4378.50 2833.00 -1545.50Total 18755.20 1300.00 2085.00 10755.70 6569.00 -4186.70Central 649.00 0.00 0.00 120.00 120.00 0.00HydroState 356.00 39.00 0.00 262.00 139.00 -123.00Pvt. 461.00 134.50 0.00 376.00 192.00 -184.00Total 1466.00 173.50 0.00 758.00 451.00 -307.00NuclearCentral 1220.00 0.00 0.00 0.00 0.00 0.00Total 1220.00 0.00 0.00 0.00 0.00 0.00Central 7884.00 500.00 500.00 2860.00 1735.00 -1125.00All IndiaState 6905.20 539.00 850.00 3899.20 2260.00 -1639.20Pvt. 6652.00 434.50 735.00 4754.50 3025.00 -1729.50Total 21441.20 1473.50 2085.00 11513.70 7020.00 -4493.70Source: Central Electricity AuthorityPROGRAMME AND ACHIEVEMEMT OF ENERGY GENERATION (MU)Gen. Sch.TargetOctober 2010 April 2010 - October 2010Sector-Wise (2010-11)Programme Achievement* % Achieved Programme Achievement* % AchievedThermalCentral Sector 269999.11 22355.74 23502.31 105.13 153123.20 157479.70 102.85State Sector 317092.64 26926.88 23607.63 87.67 178055.96 153963.40 86.47Pvt.IPP Sector 76520.57 6707.63 7294.70 108.75 39896.36 46177.53 115.74Pvt.UTL Sector 27244.18 2473.67 2373.43 95.95 16750.48 16608.08 99.15Total 690856.50 58463.92 56778.07 97.12 387826.00 374228.71 96.49HydroCentral Sector 41642.00 3266.68 4196.38 128.46 30107.28 33579.21 111.53State Sector 63990.00 6455.52 6065.77 93.96 40466.76 38337.97 94.74Pvt.IPP Sector 4092.00 305.88 417.91 136.63 3243.45 3357.02 103.50Pvt.UTL Sector 1628.00 135.50 73.31 54.10 937.90 803.08 85.63Total 111352.00 10163.58 10753.37 105.80 74755.39 76077.28 101.77NuclearCentral Sector 22000.00 1857.00 2287.99 123.21 12199.00 13167.18 107.94Total 22000.00 1857.00 2287.99 123.21 12199.00 13167.18 107.94Bhutan Import 6548.00 718.46 738.99 102.86 5457.65 4847.61 88.82All IndiaCentral Sector 333641.11 27479.42 29986.68 109.12 195429.48 204226.09 104.50State Sector 381082.64 33382.40 29673.40 88.89 218522.72 192301.37 88.00Pvt. Sector 109484.75 9622.68 10159.35 105.58 60828.19 66945.71 110.06Total 830756.50 71202.96 70558.42 99.09 480238.04 468320.78 97.52* Provisional based on actual-cum-Assesment Source: Central Electricity AuthorityCAPACITY ADDITION TARGET &ACHIEVEMENT (MW) APR 2010 - OcT 2010ALL INDIA ENERGY GENERATION DURINGApr 2010 - Oct 2010Source: Central Electricity AuthoritySource: Central Electricity AuthorityCOAL INSIGHTS 59 November 2010

Power sector updateNORTHERNList of critical Thermal Power Stations having critical coal stock ofless than 7 days (As on 31-10-2010)1 Kota Import of coal during 2010-11 yet to commence.2 Obra Due to less receipt of coal from CIL & delay in import of coal3 Rihand Due to higher generation4 Singrauli Due to higher generation5 Anpara Due to less receipt of coal from CIL during the month of Octp., 2010 i.e, 96 % of ACQ.6 Dadri(NCTPP) Due to higher generationWESTERN7 Gandhi Nagar Due to higher generation.8 Sikka Due to less receipt of coal from CIL during the month of Octp., 2010 i.e, 78 % of ACQ.9 Rosa TPP Import of coal yet to commenced10 Wanakbori Due to less receipt of coal from SECL during the month of Oct., 2010 i.e, 89 % of ACQ.11 Rajiv Gandhi Due to unloading problem in coal handling plant12 Vindhyachal TPS Due to higher generation.13 Korba STPS Due to higher generation.14 Dhanu Due to higher generation.15 Paras Due to delay in signing of MOU by MCL for new unit16 Parli Due to delay in signing of MOU by MCL for new unitSOUTHERN17 Ennore Due to less receipt of coal from CIL during the month of Oct., 201018 North Chennai Due to less receipt of coal from CIL during the month of Oct., 201019 Mettur Due to less receipt of coal from CIL during the month of Oct., 201020 Tuticorin Due to less receipt of coal from CIL during the month of Oct., 2010EASTERN21 Kahalgaon i. Due to inadequate coal availability in linked mine ECL (Rajmahal) ii)Due to less receipt of imported coal because of22 Talcher STPS Less receipt due to transportation condtraints in MCL23 Budge Budge Due to higher generation and less receipt of imported coal24 Mejia Due to Higher Turn around time of rakes between Raniganj and the power station due to law and order problems25 New Cossipore Due to less receipt of coal from CIL during the month of Oct., 2010 from i.e. ECL26 Kolaghat TPS Due to less receipt from CIL & delay in import of coal.27 Farakka ii)Due to less receipt of coal because of transporting and unloading limitationsSource: Central Electricity AuthorityCOAL INSIGHTS 60 November 2010

Power sector updateState / System / RegionPower Supply Position (Provisional)October 2010 APRIL 2010 - October 2010(Figures in net MW)Requirement Availability Surplus / Deficit (-) Requirement Availability Surplus / Deficit (-)( MU ) ( MU ) ( MU ) ( % ) ( MU ) ( MU ) ( MU ) ( % )Chandigarh 120 120 0 0.0 981 981 0 0.0Delhi 2,101 2,099 -2 -0.1 17,163 17,107 -56 -0.3Haryana 3,194 3,076 -118 -3.7 21,211 19,803 -1,408 -6.6Himachal Pradesh 675 672 -3 -0.4 4,362 4,276 -86 -2.0Jammu & Kashmir 1,332 982 -350 -26.3 7,918 5,820 -2,098 -26.5Punjab 3,769 3,644 -125 -3.3 29,925 27,824 -2,101 -7.0Rajasthan 4,035 4,035 0 0.0 24,641 24,320 -321 -1.3Uttar Pradesh 6,524 5,826 -698 -10.7 45,190 37,846 -7,344 -16.3Uttarakhand 825 819 -6 -0.7 5,722 5,297 -425 -7.4Northern Region 22,575 21,273 -1,302 -5.8 157,113 143,274 -13,839 -8.8Chattisgarh 908 902 -6 -0.7 6,102 5,981 -121 -2.0Gujarat 7,163 6,674 -489 -6.8 41,368 38,927 -2,441 -5.9Madhya Pradesh 4,012 3,286 -726 -18.1 24,122 19,663 -4,459 -18.5Maharashtra 10,524 8,931 -1,593 -15.1 73,513 60,006 -13,507 -18.4Daman & Diu 190 172 -18 -9.5 1,246 1,155 -91 -7.3Dadar Nagar Haveli 360 358 -2 -0.6 2,543 2,539 -4 -0.2Goa 264 261 -3 -1.1 1,837 1,797 -40 -2.2Western Region 23,421 20,584 -2,837 -12.1 150,731 130,068 -20,663 -13.7Andhra Pradesh 6,690 6,651 -39 -0.6 45,926 43,792 -2,134 -4.6Karnataka 3,889 3,574 -315 -8.1 27,604 24,725 -2,879 -10.4Kerala 1,477 1,469 -8 -0.5 10,276 10,121 -155 -1.5Tamil Nadu 6,727 6,418 -309 -4.6 47,634 44,528 -3,106 -6.5Puducherry 189 185 -4 -2.1 1,287 1,208 -79 -6.1Lakshadweep # 2 2 0 0 14 14 0 0Southern Region 18,972 18,297 -675 -3.6 132,727 124,374 -8,353 -6.3Bihar 1,307 1,023 -284 -21.7 7,583 6,474 -1,109 -14.6DVC 1,295 1,294 -1 -0.1 9,631 8,705 -926 -9.6Jharkhand 516 515 -1 -0.2 3,508 3,413 -95 -2.7Orissa 1,883 1,881 -2 -0.1 13,200 13,136 -64 -0.5West Bengal 3,240 3,233 -7 -0.2 22,900 22,314 -586 -2.6Sikkim 32 32 0 0.0 193 193 0 0.0Andaman- Nicobar# 20 15 -5 -25 140 105 -35 -25.0Eastern Region 8,273 7,978 -295 -3.6 57,015 54,235 -2,780 -4.9Arunachal Pradesh 44 37 -7 -15.9 286 239 -47 -16.4Assam 506 473 -33 -6.5 3,329 3,064 -265 -8.0Manipur 49 44 -5 -10.2 324 285 -39 -12.0Meghalaya 156 141 -15 -9.6 887 749 -138 -15.6Mizoram 30 24 -6 -20.0 200 165 -35 -17.5Nagaland 52 45 -7 -13.5 349 306 -43 -12.3Tripura 84 78 -6 -7.1 549 480 -69 -12.6N. Eastern Region 921 842 -79 -8.6 5,924 5,288 -636 -10.7All India 74,162 68,974 -5,188 -7.0 503,510 457,239 -46,271 -9.2# Lakshadweep and A & N Islands stand-alone systems, power supply position of these, does not form part of regional requiremene and availabilityNote: Both peak met and energy availability represent the net consumption (including the transmission losses) in the various States. Net export has beenaccounted for in the consumption of importing States.Source: Central Electricity AuthorityCOAL INSIGHTS 61 November 2010

Power sector updateState / System / RegionPeak Demand / Peak Met (Provisional)October 2010 April 2010 - October 2010(Figures in net MW)Peak Demand Peak Met Surplus / Deficit (-) Peak Demand Peak Met Surplus / Deficit (-)(MW) (MW) (MW) (%) (MW) (MW) (MW) (%)Chandigarh 243 243 0 0.0 301 301 0 0.0Delhi 3,756 3,723 -33 -0.9 4,810 4,739 -71 -1.5Haryana 5,092 4,972 -120 -2.4 6,142 5,574 -568 -9.2Himachal Pradesh 1,171 1,164 -7 -0.6 1,171 1,164 -7 -0.6Jammu & Kashmir 2,200 1,557 -643 -29.2 2,200 1,557 -643 -29.2Punjab 6,891 6,473 -418 -6.1 9,399 7,938 -1,461 -15.5Rajasthan 6,022 6,022 0 0.0 6,821 6,203 -618 -9.1Uttar Pradesh 10,273 9,236 -1,037 -10.1 10,731 10,181 -550 -5.1Uttarakhand 1,567 1,417 -150 -9.6 1,567 1,417 -150 -9.6Northern Region 33,829 31,087 -2,742 -8.1 37,431 34,101 -3,330 -8.9Chattisgarh 2,822 2,717 -105 -3.7 2,913 2,759 -154 -5.3Gujarat 10,786 9,947 -839 -7.8 10,786 9,947 -839 -7.8Madhya Pradesh 6,911 6,106 -805 -11.6 7,068 6,106 -962 -13.6Maharashtra 18,046 14,620 -3,426 -19.0 19,766 15,402 -4,364 -22.1Daman & Diu 353 328 -25 -7.1 353 328 -25 -7.1Dadar Nagar Haveli 535 523 -12 -2.2 594 594 0 0.0Goa 469 438 -31 -6.6 544 453 -91 -16.7Western Region 38,602 32,763 -5,839 -15.1 39,560 32,763 -6,797 -17.2Andhra Pradesh 10,681 10,428 -253 -2.4 12,018 10,428 -1,590 -13.2Karnataka 6,651 6,259 -392 -5.9 7,642 6,627 -1,015 -13.3Kerala 2,826 2,799 -27 -1.0 3,052 2,916 -136 -4.5Tamil Nadu 10,909 10,048 -861 -7.9 11,728 10,048 -1,680 -14.3Puducherry 307 296 -11 -3.6 318 296 -22 -6.9Lakshadweep # 6 6 0 0 6 6 0 0Southern Region 30,228 28,954 -1,274 -4.2 32,214 29,054 -3,160 -9.8Bihar 2,351 1,659 -692 -29.4 2,351 1,659 -692 -29.4DVC 2,056 1,840 -216 -10.5 2,059 2,046 -13 -0.6Jharkhand 871 845 -26 -3.0 1,012 1,012 0 0.0Orissa 3,285 3,285 0 0.0 3,355 3,340 -15 -0.4West Bengal 5,736 5,712 -24 -0.4 6,162 6,112 -50 -0.8Sikkim 81 80 -1 -1.2 81 81 0 0.0Andaman- Nicobar# 40 32 -8 -20 40 32 -8 -20Eastern Region 13,961 13,030 -931 -6.7 13,961 13,085 -876 -6.3Arunachal Pradesh 101 72 -29 -28.7 101 84 -17 -16.8Assam 955 937 -18 -1.9 971 937 -34 -3.5Manipur 115 101 -14 -12.2 118 105 -13 -11.0Meghalaya 255 202 -53 -20.8 281 212 -69 -24.6Mizoram 76 59 -17 -22.4 76 61 -15 -19.7Nagaland 100 93 -7 -7.0 118 102 -16 -13.6Tripura 220 197 -23 -10.5 220 197 -23 -10.5N -Eastern Region 1,913 1,560 -353 -18.5 1,913 1,560 -353 -18.5All India 118,533 107,394 -11,139 -9.4 119,437 107,394 -12,043 -10.1# Lakshadweep and A & N Islands stand-alone systems, power supply position of these, does not form part of regional requiremene and availabilityNote: Both peak met and energy availability represent the net consumption (including the transmission losses) in the various States. Net export has beenaccounted for in the consumption of importing States.Source: Central Electricity AuthorityCOAL INSIGHTS 62 November 2010

Power sector updatePOWER SUPPLY TO AGRICULTURAL SECTOR DURING October 2010StateAverage Hours of SupplyNorthern RegionChandigarh24 hrs/dayDelhi24 hrs/dayHaryanaThree Phase Supply: 6.50 hrs/dayHP24 hrs/dayJ&K ––PunjabThree Phase Supply: 23.82 hrs/dayRajasthanThree Phase Supply: 6.45 hrs/dayUttar PradeshThree Phase Supply: 09.28 hrs/dayUttarakhandThree Phase Supply: 21.40 hrs/dayWestern RegionChattisgarh Three Phase Supply: 18 hrs/day –GujaratOnly 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: 10:30 hrs/day Single phase Supply: 00:00 hrs/dayMaharashtra Three Phase Supply: 16 hrs/day Single phase Supply: 20 hrs/dayGoaNo restrictionSouthern RegionAndhra Pradesh Three Phase Supply: 07 hrs/day. –Karnataka Three Phase/ Single Phase Supply: 06 hrs/day No Supply: 12 hrs/dayKeralaNo RestrictionsTamil Nadu Three Phase Supply: 9 hrs/day Single Phase Supply: 15 hrs/dayPuducherryNo RestrictionsEastern RegionBiharAbout 18 hrsJharkhandAbout 20 hrsOrissaAbout 24 hrs.–West Bengal24 hrs; Average about 23 hrsSource: Central Electricity AuthorityTRANSMISSION LINES (PROG & ACHIV) Oct 2010Fig. in ckt KmsVoltage Level/ Prog. 2010-11 Including Oct 2010 Apr - Oct 2010Sector Slipped Prog. 2009-10 Prog. Achv. Prog. Achv.+/- 800 kV HVDCCentral Sector 0 0 0 0 0State Sector 0 0 0 0 0TOTAL 0 0 0 0 0+/- 500 kV HVDCCentral Sector 0 0 0 0 0JV/Private Sector 0 0 0 0 0TOTAL 0 0 0 0 0765 kVCentral Sector 0 0 0 0 0State Sector 0 0 0 0 0TOTAL 0 0 0 0 0400 kVCentral Sector 7261 1108 2051 3244 3145State Sector 2889 329 187 1629 1268JV/Private Sector 2365 220 0 1284 332TOTAL 12515 1657 2238 6157 4748220 kVCentral Sector 481 0 0 201 72State Sector 5375 443 194 2862 2922JV/Private Sector 192 0 0 86 358TOTAL 6048 443 194 3149 3352Grand TOTAL 18563 2100 2432 9306 8097Source: Central Electricity AuthoritySUB-STATIONS (PROG & ACHIV) SEPT 2010Voltage Level/Sector+/- 500 kV HVDCProg. 2010-11 IncludingSlipped Prog. 2009-10Fig. in MVA/MWOct 2010 Apr - Oct 2010Prog. Achv. Prog. Achv.Central Sector 0 0 0 0 0State Sector 0 0 0 0 0TOTAL 0 0 0 0 0765 kVCentral Sector 0 0 0 0 0State Sector 0 0 0 0 0TOTAL 0 0 0 0 0400 KvCentral Sector 5010 315 945 945 1760State Sector 10320 630 0 5885 3780JV/Private Sector 630 0 0 0 0TOTAL 15960 645 645 6830 5540220kVCentral Sector 650 0 0 300 400State Sector 11000 510 50 5610 4620JV/Private Sector 126 0 0 0 0TOTAL 11776 510 50 5910 5020Grand TOTAL 27736 1455 995 12740 10560Source: Central Electricity AuthorityCOAL INSIGHTS 63 November 2010

Power sector updateSl.No.GENERATION CAPACITY ADDITION DURING 2010-11 (Programme & Achievement)Unit Name Unit No. State Company TypeCapacity (MW)Commissioning ScheduleProg. Ach. As per Prog. Actual (A)1st Quarter (April - June 2010)CENTRAL SECTOR1 Barsingsar Lignit 1 Rajasthan NLC TH 125.00 125.00 Apr 2010 28.06.10 (A)21 J&K NHPC HY 40.00 40.00 May 2010 22.06.10 (A)3 Sewa - II2 J&K NHPC HY 40.00 40.00 Jun 2010 23-07-10 (A)4 3 J&K NHPC HY 40.00 40.00 Jun 2010 01.07.10 (A)STATE SECTOR51 Kerala KSEB HY 50.00 50.00 Apr 2010 25.05.10 (A)Kuttiyadi Addl. Extn.6 2 Kerala KSEB HY 50.00 50.00 Apr 2010 23.09.10 (A)7 Myntdu(Leishka) St-I 1 Meghalaya MeSEB HY 42.00 May 20108 Priyadarshini Jurala 4 AP APGENCO HY 39.00 39.00 May 2010 28.08.10 (A)9 Lawka Waste Heat Unit ST Assam APGCL ST 37.20 Jun 201010GT-1 250.00 May 2010Pragati CCGT- III GT-1 Delhi PPCL11 GT-2 250.00 Jun 2010123125.00 125.00 Apr 2010 12.04.10 (A)Surat Lignite TPP ExtnGujarat GIPCL TH13 4 125.00 125.00 Apr 2010 23.04.10 (A)14 Rajiv Gandhi TPS, Hissar 2 Haryana HPGCL TH 600.00 600.00 Jun 2010 01.1010(A)15 Raichur 8 Karnatka KPCL TH 250.00 250.00 Jun 2010 26.06.10 (A)16 Chabra TPS 2 Rajasthan RRVUNL TH 250.00 250.00 Apr 2010 04.05.10 (A)PrivATE SECTOR17 Konaseema CCPP ST AP Konaseema gas power ltd ST 165.00 165.00 Apr 2010 30.06.10 (A)18 Lanco Kondapalli Ph II ST AP Lanco Kondapalli ST 133.00 133.00 May 2010 19.07.10 (A)19GT-1 Delhi NDPL GT-1 35.75 Jun 2010Rithala CCPP20 GT-2 Delhi NDPL GT-2 35.75 Jun 2010213 Gujarat Adani Power ltd TH 330.00 330.00 May 2010 02.08.10 (A)Mundra TPP Ph-I22 4 Gujarat Adani Power ltd TH 330.00 Jun 2010231 Maharashtra JSW Energy (Ratnagiri) Ltd TH 300.00 330.00 May 2010 24.08.10 (A)JSW Ratnagiri TPP24 2 Maharashtra JSW Energy (Ratnagiri) Ltd TH 300.00 Jun 201025 Sterlite TPP 1 Orissa Sterlite Energy Ltd TH 600.00 600.00 Jun 2010 14.10.10(A)262 Rajasthan Raj West Power Ltd (JSW) TH 135.00 135.00 May 2010 08.07.10 (A)Jallipa-Kapurdi TPP27 3 Rajasthan Raj West Power Ltd (JSW) TH 135.00 Jun 201028 Rosa TPP Ph - 1 2 UP Rosa Power Supply Co. Ltd TH 300.00 300.00 Apr 2010 26.06.10 (A)29 Allain Duhangan 1 H.P ADHPL HY 96.00 96.00 Jun 2010 16.09.10 (A)30 Wardha Warora 1 Maharashtra Wardha Power Ltd. TH 135.00 05.06.10 (A)Sub Total 5208.70 4063.00IInd Quarter (July - September 2010)CENTRAL SECTOR31 Indra Gandhi TPP 1 Haryana APCPL TH 500.00 Sep 2010 31.10.10(A)32 Barsingsar Lignit 2 Rajasthan NLC TH 125.00 Aug 201033 NCP Project St II 6 UP NTPC TH 490.00 490.00 Jul 2010 30.07.10 (A)341 WB DVC TH 500.00 500.00 Jul 2010 30.09.10 (A)Mejia TPS Extn35 2 WB DVC TH 500.00 Sep 2010State Sector36 Myntdu (Leishka) St-I 2 Meghalaya MeSEB HY 42.00 Aug 201037 Kakatiya TPP 1 AP APGENCO TH 500.00 500.00 Jul 2010 27.05.10 (A)38GT-3 Delhi PPCL GT-3 250.00 Sep 2010Pragati CCGT- III39 ST-1 Delhi PPCL ST-1 250.00 Sep 201040 Baramura GT Extn 5 Tripura TSECL GT-5 21.00 03.08.10 (A)41 Paricha Extn 5 UP UPRVUNL TH 250.00 Sep 2010PrivATE Sector42 Allain Duhangan 2 H.P ADHPL HY 96.00 96.00 Jul 2010 18.09.10 (A)43 Chujachen 1 Sikkim Gati HY 49.50 Sep 201044 Rithala CCPP ST Delhi NDPL ST 36.50 Sep 201045 Udupi TPP 1 Karnatka UPCL TH 507.50 600.00 Jul 2010 23.07.10 (A)46 Sterlite TPP 2 Orissa Sterlite Energy Ltd TH 600.00 Sep 201047 Jallipa-Kapurdi TPP 4 Rajasthan Raj West Power Ltd (JSW) TH 135.00 Sep 2010Sub Total 4831.50 2707.00COAL INSIGHTS 64 November 2010

Power sector updateGENERATION CAPACITY ADDITION DURING 2010-11 (contd.)Sl.No.Unit Name Unit No. State Company TypeIIIrd Quarter (October - December 2010)CENTRAL SECTOR47 Koteshwar 1 Uttranchal THDC HY 100.00 Dec 201048 Korba STPP 7 Chattisgarh NTPC TH 500.00 Oct 201049 Kodarma TPP 1 Jharkhand DVC TH 500.00 Dec 201050 Neyveli TPS-II Exp 1 TN NLC TH 250.00 Nov 201051 Kaiga 4 Karnatka NPC Nucl. 220.00 Dec 201052 Durgapur Steel TPS 1 WB DVC TH 500.00 Dec 2010State Sector53 Priyadarshini Jurala 5 AP APGENCO HY 39.00 Oct 201054 Rayalseema TPP St-III 5 AP APGENCO TH 210.00 Nov 2010551 Delhi PPCL GT-1 250.00 250.00 Dec 2010 24.10.10(A)Pragati CCGT- I56 ST-2 Delhi PPCL ST-2 250.00 Dec 201057 Hazira CCPP Extn GT+ ST Gujarat GSECL GT+ ST 351.00 Dec 201058 Khaperkheda TPS Expn 5 Maharashtra MSPGCL TH 500.00 Oct 201059 Santaldih TPP Extn Ph-II 6 WB WBPDCL TH 250.00 Nov 2010PrivATE Sector601 HP LANCO HY 35.00 Oct 2010Budhil61 2 HP LANCO HY 35.00 Nov 2010621 HP Everest PC HY 50.00 Oct 2010Malana-II63 2 HP Everest PC HY 50.00 Nov 201064 Chujachen 2 Sikkim Gati HY 49.50 Oct 201065 JSW Ratnagiri TPP 3 Maharashtra JSW Energy (Ratnagiri) Ltd TH 300.00 Oct 2010665 Rajasthan Raj West Power Ltd (JSW) TH 135.00 Nov 2010Jallipa-Kapurdi TPP67 6 Rajasthan Raj West Power Ltd (JSW) TH 135.00 Dec 2010Sub Total 4709.50 250.00IVth Quarter (January - March 2011)CENTRAL SECTOR68 Chamera-III 1 HP NHPC HY 77.00 Mar 2011691 J&K NHPC HY 60.00 Feb 2011Uri-II70 2 J&K NHPC HY 60.00 Mar 201171 Koteshwar 2 Uttranchal THDC HY 100.00 Mar 2011721 WB NHPC HY 33.00 Jan 201173 2 WB NHPC HY 33.00 Jan 2011Teesta Low Dam-III74 3 WB NHPC HY 33.00 Feb 201175 4 WB NHPC HY 33.00 Feb 201176 Simhadri STPP Extn 3 AP NTPC TH 500.00 Jan 201177 Maithon RB TPP 1 Jharkhand DVC TH 525.00 Jan 201178 Durgapur Steel TPS 2 WB DVC TH 500.00 Mar 201179 Farakka STPS-III 6 WB NTPC TH 500.00 Feb 201180 Kudankulam 1 TN NPC Nucl. 1000.00 Mar 2011State Sector81 Priyadarshini Jurala 6 AP APGENCO HY 39.00 Feb 201182 Nagarjuna Sagar TR 1 AP APGENCO HY 25.00 Mar 201183 Pulichintala 1 AP APGENCO HY 30.00 Mar 201184 Pipavav CCPP Block-1 Gujarat GSECL TH 351.00 Feb 201185 Bhusawal TPS Expn 4 Maharashtra MSPGCL TH 500.00 Mar 2011868 UP UPRVUNL TH 250.00 Jan 2011Harduaganj Extn87 9 UP UPRVUNL TH 250.00 Mar 201188 Paricha Extn 6 UP UPRVUNL TH 250.00 Jan 2011PrivATE SectorCapacity (MW)89 Udupi TPP 2 Karnatka UPCL TH 507.50 Jan 201190 JSW Ratnagiri TPP 4 Maharashtra JSW Energy(Ratnagiri)ltd TH 300.00 Jan 201191 Jallipa-Kapurdi TPP 7 Rajasthan Raj West Power ltd(JSW) TH 135.00 Mar 201192 Anpara-C 1 UP Lanco Anpara Power TH 600.00 Jan 2011Sub Total 6691.50 0.00Grand Total 21441.20 7020.00Commissioning ScheduleProg. Ach. As per Prog. Actual (A)Source: Central Electricity AuthorityCOAL INSIGHTS 65 November 2010

E-Auction dataCIL’s e-auction m-o-m coal salesrise marginallyCoal Insights BureauThe eight coal producing subsidiaries of Coal IndiaLtd (CIL) sold a total of 3.67 million tons (mt) of coalthrough e-auction route during the month of September.The subsidiaries had offered 3.84 mt coal for sale throughthe system during the month and almost 95.5 percent of thequantity offered was sold, indicating good demand fromconsumers. In August, the CIL subsidiaries had offered 3.95mt and nearly 92 percent or 3.64 mt was sold.The CIL earned a total of `705.15 crore in September fromsale through the auctions, which was nearly 90 percent higherthan notified price of `371.75 crore for the same quantity and46 percent higher than floor price or reserve price of `483.28crore. The realisations were up in September due to rise ininternational prices of coal, industry sources said.The company had earned a total of `681.74 crore in Augustfrom sale through the auctions, which was 80 percent higherthan notified price of `379.11 crore for the same quantity and38.33 percent more than floor price or reserve price of `492.84crore. For the period April-September or first half of 2010-11,CIL subsidiaries offered a total of 22.35 mt coal for sale throughe-auctioon route and managed to sell 20.27 mt that helped themearn a revenue of `3664.70 crore, 174 percent higher than valueof notified price of `2109.44 crore for the same quantity.In other words, CIL earned additional revenue of `1555.26crore by selling a portion of its production through e-auctionroute between April and September.Name ofsubsidiarySept CIL e-auction detailsQty offered(In lakhtons)Qty sold(in lakhtons)Notifiedprice (InRs Cr)Floor Price(In Rs Cr)RealisedPrice (InRs Cr)ECL 1.97 0.58 11.79 15.33 16.88BCCL 2.76 2.58 36.36 47.26 62.32CCL 4.76 4.76 67.11 87.25 106.62NCL 1.25 1.19 17.01 22.12 35.77WCL 3.09 3.09 44.21 57.48 101.01SECL 8.58 8.58 77.43 100.65 180.99MCL 15.96 15.96 117.84 153.19 201.56NEC 0 0 0 0 0CIL 38.37 36.74 371.75 483.28 705.15coaljunctionA total of 1.95 mt coal of various types and grades was sold byseven subsidiaries of Coal India Ltd (CIL) through e-auctionplatform of coaljunction, a division of mjunction services ltd,during the month of September. In August, the subsidiarieshad sold 1.83 mt coal and in July had sold 1.73 mt coal throughthe same platform. The total offering through coaljunction inSeptember stood at 2.16 mt compared with 2.06 mt offered inAugust and 2.29 mt offered in July. Of the total offering inSeptember, 69,856 tons was through rail mode of which only42,185 tons could be sold, while the offering through roadmode stood at 2.09 mt of which 1.91 mt got sold.Coking coalAll varieties of coking coal, except a small quantity ofW1 Slurry, offered for sale through e-auction platform ofcoaljunction in September met with good demand.A total of 1,50,550 tons of W2, W3, W4, W4 tailings, WRejects, W1 Slurry and W2 Slurry was offered from variousmines of Bharat Coking Coal Ltd (BCCL) and Central CoalfieldsLtd (CCL) during the month. Of the total offering, 1,26,040 tonswas sold to various consumers at zero to moderate premium.“A” grade coalA small quantity of “A” grade coal (GCV exceeding 6454 Kcal/kg) offered by two subsidiaries of Coal India Ltd (CIL) for salethrough e-auction platform of coaljunction in September metwith moderate to good demand.The total offering by Eastern Coalfields Ltd (ECL) andSouth Eastern Coalfields Ltd (SECL) in September stood at32,500 tons and the entire quantity was sold. In August, onlyone subsidiary – ECL – had offered 26,216 tons of “A” gradecoal for sale through coaljunction’s platform.“B” grade coalThere was no bid from any of the consumers of traders for a totalof 20,000 tons of “B” grade (GCV exceeding 6049 Kcal/kg, but notexceeding 6454 Kcal/kg) offered by Eastern Coalfields Ltd (ECL)for sale through e-auction platform of coaljunction in September.However, the offerings from South Eastern Coalfields Ltdand that from Western Coalfields Ltd (WCL) continued toattract good demand, which together had offered 77,385 tonsof “B” grade coal from various mines as the entire quantitywas sold. Compared to 97,385 tons of “B” grade coal offeredin September, only 19,000 tons was offered for sale throughcoaljunction’s platform in August. In July, SECL and WCLhad offered 50,250 tons of “B” grade coal.“C” grade coalThe offering of “C” grade coal (GCV exceeding 5597 Kcal/kg,but not exceeding 6049 Kcal/kg) by subsidiaries of Coal IndiaLtd (CIL) for sale through coaljunction platform in SeptemberCOAL INSIGHTS 66 November 2010

E-Auction dataincreased sharply after a low offering in August. According toinformation available, a total of 2,62,590 tons of “C” grade coalwas offered by five subsidiaries of CIL for delivery through roadmode compared with 70,639 tons offered by four subsidiariesin August. In July also five subsidiaries had offered to sell “C”grade coal, but the total quantity was 1,95,114 tons.“D” grade coalA total of four subsidiaries of Coal India Ltd (CIL) offered tosell around 1,05,790 tons of “D” grade coal (GCV exceeding5089 Kcal/kg, but not exceeding 5597 Kcal/kg), which wassubstantially higher than only 1000 tons of same grade coaloffered for sale through coaljunction platform in August.In July, the total offering of “D” grade coal from foursubsidiaries of CIL stood at 87,450 tons. Of the total offeringfor delivery through road in September, 66,192 tons wassold, which was substantially more than 980 tons sold inAugust.“E” grade coalA total of 4,14,750 tons of “E” grade coal (GCV exceeding4324 Kcal, but not exceeding 5089 Kcal/kg) was offered forsale through e-auction platform of coaljunction by threesubsidiaries of Coal India Ltd (CIL) in September.Of this, around 3,96,750 tons was sold at zero to 112 percentpremium over the reserve price.In August, a total of 6,80,500 tons of “E” grade coal wasoffered by two subsidiaries – Northern Coalfields Ltd (NCL)and Mahanadi Coalfields Ltd (MCL).“F” grade coal“F” grade coal (GCV exceeding 3865 Kcal/kg, but notexceeding 4324 Kcal/kg) continued to meet with good demandat e-auction held on coaljunction platform in September.The offering by two subsidiaries of Coal India Ltd (CIL)during the month stood at 6,05,000 tons compared with4,11,700 tons offered in August by three subsidiaries.The entire quantity offered in September was sold atattractive premium on higher demand. In August, only 3,96,700tons of the total offering was sold. In July, a total of 5,50,000tons of “F” grade coal was offered by three subsidiaries of CIL,and around 5,30,000 tons was sold.“G” grade coalNone of the Coal India Ltd (CIL) subsidiaries offered to sell “G”grade coal (GCV exceeding 3113 Kcal/kg, but not exceeding3865 Kcal/kg) through e-auction platform of coaljunctionduring the month of September. However, a small quantityof 8000 tons of G Rejects were offered by Bharat Coking CoalLtd (BCCL) from its Dugda mine during the month, whichwas sold at an average price of `941 per ton, a premium of 19percent of the reserve price of `788 per ton.In August, a total of 40,000 tons of “G” grade coal wasoffered by Mahanadi Coalfields Ltd (MCL) from its Belpaharmine, but only 9990 tons was sold and that too by oneconsumer at a reserve price of `455 per ton. In July also, onlyMCL had offered around 20,000 tons of coal of this grade forsale through e-auction, but there were no takers and the entireoffering remained unsold.COMPANYWISE PERFORMANCE OF E-AUCTION OF RAW COAL IN CIL FOR SEPT’10 (PROVISIONAL)CoalCompanyNo ofBiddersNo of SuccessfulbiddersTotal Qty offered(L.Ton)Total Qty allocated(L.Ton)Average Notified Price ofAllocated Qty( In Rs./ Ton)Average Bid Price of AllocatedQty( In Rs / Ton)% increase overNotified PriceECL 248 194 1.97 0.58 2042.56 2925.13 43.2BCCL 2826 1523 2.76 2.58 1407.01 2411.90 71.4CCL 1190 668 4.76 4.76 1410.31 2240.47 58.9NCL 191 124 1.25 1.19 1426.06 2998.12 110.2WCL 632 327 3.09 3.09 1432.48 3272.63 128.5SECL 724 433 8.58 8.58 901.96 2108.38 133.8MCL 313 262 15.96 15.96 738.58 1263.32 71.0NEC 0 0 0.00 0.00 0.00 0.00 0.0CIL 6124 3531 38.38 36.74 1011.88 1919.38 89.7COMPANYWISE PERFORMANCE OF E-AUCTION OF RAW COAL IN CIL FOR APRIL’10 To SEPT’10 (PROVISIONAL)CoalCompanyNo ofBiddersNo of SuccessfulbiddersTotal Qty offered(L.Ton)Total Qtyallocated (L.Ton)Average Notified Price ofAllocated Qty( In Rs./ Ton)Average Bid Price ofAllocated Qty( In Rs / Ton )% increase overNotified PriceECL 1400 1076 7.01 2.91 2082.30 3034.86 45.7BCCL 15656 9673 15.59 14.85 1416.36 2269.78 60.3CCL 6174 3143 26.58 20.96 1367.19 2206.20 61.4NCL 1040 638 7.38 7.26 1239.86 2374.04 91.5WCL 3905 2490 32.13 31.32 1403.41 2337.74 66.6SECL 4106 2302 41.25 40.54 969.46 2099.91 116.6MCL 1531 1162 91.92 84.62 734.85 1193.69 62.4NEC 68 50 1.62 0.26 2987.75 4357.91 45.9CIL 33880 20534 223.47 202.71 1040.64 1807.88 73.7COAL INSIGHTS 68 November 2010

E-Auction dataDetails of e-AuctionMONTH OFFERED QTY (in tons) SOLD QTY (in tons) Variation (In Percent)Sep'09 4,927,901 3,103,123 -37.03Oct'09 3,260,580 3,080,738 -5.52Nov'09 6,999,080 5,659,042 -19.15Dec'09 5,453,411 4,236,653 -22.31Jan'10 6,576,301 5,757,565 -12.45Feb'10 6,151,869 5,049,310 -17.92Mar'10 7,929,689 4,778,310 -39.74Apr'10 4,260,583 3,555,683 -16.54May'10 6,490,803 3,088,019 -52.42Jun'10 4,491,718 2,993,635 -33.35Jul'10 4,727,689 3,724,154 -21.23Aug'10 4,337,154 3,723,656 -14.15Sep'10 8,554,997 3,831,854 -55.21TOTAL 74,161,775 52,581,742 -29.10Quantity in Tons9,000,0008,000,0007,000,0006,000,0005,000,0004,000,0003,000,0002,000,0001,000,000Quantity Offered & SoldMar'10 Apr'10 May'10 Jun'10 Jul'10 Aug'10 Sep'10OFFERED QTY (in tons)SOLD QTY (in tons)Monthly Data of Offered Quantity (Road & Rail)Qty. In TonsMONTH OFFERED BY ROAD OFFERED BY RAILSep'09 4466500 461401Oct'09 2617350 643230Nov'09 5483390 1515690Dec'09 4666980 786431Jan'10 4669131 1907170Feb'10 4913280 1238589Mar'10 6110014 1819675Apr'10 3999550 261033May'10 5366085 1124718Jun'10 3870500 621218Jul'10 4004021 723668Aug'10 3826889 510265Sep'10 5827401 2727596Total 59821091 14340684Qty Offered In Tons70000006000000500000040000003000000200000010000000Monthly Data of Offered Quantity(Road & Rail)Mar'10 Apr'10 May'10 Jun'10 Jul'10 Aug'10 Sep'10Quantity Offered & Sold In Sept’10 VS Aug’10 BYVarious Subsidiaries Rail & RoadQty. In TonsSepember 2010 August 2010 Variation (In Percent)QTYOFFEREDQTYSOLDQTYOFFEREDQTYSOLDOFFEREDQTYBccl Road 907,500 283,750 393,200 266,550 130.80% 6.45%Bccl Rail 2,119,371 0 35,550 0 5861.66% 0.00%Mcl Road 2,804,000 1,240,000 1,290,000 1,270,110 117.36% -2.37%Mcl Rail 474,000 355,500 355,500 355,500 33.33% 0.00%2,500,0002,500,000Ncl Road 105,000 104,980 75,000 74,980 40.00% 40.01%Ncl Rail - - - - NA NA2,000,000Nec Road 20,000 14,320 10,000 3,500 100.00% 309.14%2,000,0001,500,000Nec Rail - - - - NA NASecl Road 724,200 724,200 565,800 439,800 28.00% 64.67%1,000,000Secl Rail 134,225 134,225 111,215 111,215 20.69% 20.69%1,500,000Ecl Road 197,301 57,719 200,689 62,916 -1.69% -8.26%500,000Ecl Rail - - - - NA NAWCL Road 308,900 308,650 553,750 553,030 -44.22% -44.19%0WCL Rail - - 8,000 8,000 NA NA1,000,000SCCL Road 56,750 56,750 100,000 99,995 -43.25% -43.25%SCCL Rail - - - - NA NACCL Road 703,750 551,760 638,450 478,060 10.23% 15.42%500,000CCL Rail - - - - NA NATotal 8,554,997 3,831,854 4,337,154 3,723,656 97.25% 2.91%0Note: The figures for March’10 are for only one service provider the rest all are from two service providers.SOLDQTYQuantity In Quantity Tons In TonsBCCL ROADCOAL INSIGHTS 70 November 2010BCCL RAILMCL ROADMCL RAILOFFERED BY ROADNCL ROADNCL RAILNEC ROADNEC RAILSECL ROADSECL RAILCompaniesOFFERED BY RAILQty Offered & Sold In Sep’10 Vs Aug’10BCCL ROADBCCL RAILMCL ROADMCL RAILNCL ROADNCL RAILNEC ROADNEC RAILSECL ROADSECL RAILCompaniesSep-10 QTY OFFERED Sep-10 QTY SOLD Aug-10 QTY OFFERED Aug-10 QTY SOLDECL ROADECL ROADECL RAILECL RAILWCL ROADWCL ROADWCL RAILWCL RAILSCCL ROADSCCL ROADSCCL RAILSCCL RAILCCL ROADCCL ROADCCL RAILCCL RAIL

All India coal data – September 2010COAL PRODUCTION SEPTEMBER’10 PROVISIONAL (Company-wise)Name of theCompanyAnnualDuring the MonthCorresponding monthof Previous yearUpto the Month(Million Tons)Corresponding period ofPrevious yearTarget Target Achievement Actual Target Achievement ActualECL 33.000 1.977 2.157 1.894 13.234 12.688 12.413BCCL 29.000 2.195 2.103 1.800 13.920 13.274 11.990CCL 50.000 3.499 3.078 2.877 21.517 17.972 17.565NCL 72.000 5.560 4.258 5.102 33.210 27.874 30.544WCL 46.500 3.435 2.540 3.457 21.124 19.987 21.157SECL 112.000 8.979 7.946 8.143 51.209 49.805 48.429MCL 116.750 7.660 6.921 6.366 49.235 43.815 42.029NEC 1.250 0.103 0.054 0.102 0.310 0.266 0.307CIL 460.500 33.408 29.057 29.741 203.759 185.681 184.434SCCL 46.000 3.436 3.582 3.597 22.068 22.543 23.822OTHERS* 46.330 3.861 3.373 3.411 23.166 22.675 21.714ALL INDIA TOTAL 552.830 40.705 36.012 36.749 248.993 230.899 229.970Name of the CompanyCOAL DESPATCHES SEPTEMBER’10 PROVISIONAL (Company-wise)AnnualDuring the MonthCorresponding month ofPrevious yearUpto the Month(Million Tons)Corresponding period ofPrevious yearTarget Target Achievement Actual Target Achievement ActualECL 32.601 2.391 2.114 1.781 15.112 13.432 13.365BCCL 28.760 2.154 2.297 1.777 14.656 14.447 12.221CCL 49.990 3.880 3.426 3.174 25.074 20.864 20.554NCL 72.000 5.352 4.359 4.866 33.915 28.860 30.530WCL 46.477 3.439 2.796 3.393 21.988 20.076 21.584SECL 111.980 9.035 8.192 8.303 54.808 51.558 50.026MCL 116.750 9.179 8.430 7.474 57.560 50.168 45.236NEC 1.250 0.100 0.060 0.092 0.504 0.325 0.421CIL 459.808 35.530 31.674 30.860 223.617 199.730 193.937SCCL 46.930 3.526 3.565 3.567 22.658 23.139 23.154OTHERS* 46.330 3.861 3.308 3.421 23.166 22.084 21.111ALL INDIA TOTAL 553.068 42.917 38.547 37.848 269.441 244.953 238.202* Excluding MeghalayaName of theCompanyWASHED COKING COAL PRODUCTION SEPTEMBER 2010 PROVISIONAL (Company-wise)(Million Tonnes)AnnualDuring the MonthCorresponding monthof Previous yearUpto the MonthCorresponding period ofPrevious yearTarget Target Achievement Actual Target Achievement ActualBCCL 1.702 0.126 0.106 0.090 0.793 0.745 0.616CCL 2.000 0.140 0.122 0.108 0.840 0.700 0.699WCL 0.211 0.017 0.019 0.015 0.100 0.097 0.113CIL 3.913 0.283 0.247 0.213 1.733 1.542 1.428COAL INSIGHTS 72 November 2010

Tear along the dotted line Tear along the dotted line

port DATAMajor Ports Through Which Coking Coal Arrivedin India-(Apr’10-Sept’10)PortQty (in Tons)Kolkata 3128971.54Vizag 3014487.12Paradip 2721069.79Marmagao 501466.82Chennai 223528.55Mundra 183370.00Mangalore 138004.16Kandla 116994.40Grand Total 10027892.39Major Ports Through Which Coking CoalArrived In India (Apr’10-Sept’10)5.0% 2.2%1.8%1.4%1.2%31.2%Major Coking Coal Supplier Countries To India(Through Mentioned Ports) (Apr’10-Sept’10)Country of OriginQty (in Tons)Australia 8214925.03USA 831533.92New Zealand 547684.00Indonesia 187084.35South Africa 122148.00Russia 109250.38Iran 14286.72UK 980.00Grand Total 10027892.39Major Coking Coal Supplier Countries To India(Through Mentioned Ports)-(Apr’10-Sept’10)5.46%1.87%1.22%1.09%0.01%0.14%8.29%27.1%30.1%Kolkata Vizag Paradip Marmagao Chennai Mundra Mangalore KandlaMajor Ports Through Which Non Coking CoalArrived in India - (Apr’10-Sept’10)PortQty (in Tons)Chennai 3402750.18Vizag 3006098.00Paradip 2713999.38Mundra 1957660.00Mumbai 1481785.00Kolkata 729367.74Kandla 725509.00Mangalore 624415.19Tuticorin 281608.00Marmagao 146078.20Cochin 30140.00Grand Total 15099410.69Major Ports Through Which Non Coking CoalArrived In India (Apr’10-Sept’10)Australia USA New Zealand IndonesiaSouth Africa Russia Iran UK81.92%Major Non Coking Coal Supplier Countries ToIndia (Through Mentioned Ports) (Apr’10-Sept’10)Country of OriginQty (in Tons)Indonesia 10993713.12South Africa 3844716.00Philippines 202971.56Colombia 40010.00Australia 18000.00Grand Total 15099410.69Major Non Coking Coal Supplier Countries ToIndia (Through Mentioned Ports)(Apr’10-Sept’10)9.8%4.8%4.8%4.1%1.9%1.0%0.2%22.5%25.46%1.34%0.26%0.12%13.0%18.0%19.9%Chennai Vizag Paradip Mundra Mumbai KolkataKandla Mangalore Tuticorin Marmagao CochinNote: Name of importers for coal and coke will be provided on request.72.81%Indonesia South Africa Philippines Colombia AustraliaCOAL INSIGHTS 74 November 2010