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