This action might not be possible to undo. Are you sure you want to continue?
POTENTIAL OF STEAM COAL IN INDIAN MARKET
Graduate School of Business & Administration
Global Coal Industry Overview
The world currently consumes over 5522 Mt of hard coal. Coal is used by a variety of sectors – including power generation, iron and steel production, cement manufacturing and as a liquid fuel. The majority of coal is either utilised in power generation – steam coal or lignite – or iron and steel production – coking coal. From the 1980s to the early 21st century, the global coal industry succeeded in increasing hard coal production by 97%. However, most of the coal produced is used for domestic consumption and only 15% of the production reaches the global coal market. In 2006, the total production of the global coal industry stood at 6,152 million tons (MT). Of this, the production of hard coal stood at 5,205 MT and that of brown coal was pegged at 937 MT. In 2007, the production of hard coal and brown coal rose to 5,543 MT and 945 MT, respectively. The production of brown coal rose by 0.85% in 2007, with Germany being the largest producer. Brown coal is used primarily for the generation of electricity.
World Coal Reserves
The United States Energy Information Administration (EIA) estimated the world coal reserves at 998 billion short tons. As per the findings of the World Coal Institute, coal reserves are expected to last for a period of 133 years at the current production rate. Coal reserves are available almost across the globe. The world’s largest coal reserves are in the USA, Russia, Australia, China, India and South Africa. At the end of 2006, their respective shares in global coal reserves were estimated at:
• • • • •
USA - 27.1% Russia - 17.3% China - 12.6% India - 10.2% Australia - 8.6%
In 2007, coal catered to 26% of the global energy needs and almost 41% of the global electricity requirements. Coal is also used for producing heat through combustion. At the current consumption rate, the coal reserves are sufficient to
generate electricity for a period of 300 years. Countries such as Poland, South Africa, Australia, China and Israel depend primarily on coal for their electricity generation. The contribution of coal in their total electricity generation is as follows:
• • • • •
Poland - 93% South Africa - 93% Australia - 93% China - 78% Israel - 71%
Approximately, 17% of the total hard coal production is used by the steel industry. Nearly 70% of the global steel production depends on coal. Aggressive research is being undertaken to increase efficiency in the coal industry, with focus on new strategies for gasification and CO2 capture. These efforts are aimed primarily at reducing the carbon content and greenhouse gas emissions responsible for global warming.
Coal was the key energy source for the industrial revolution that has provided most of amenities to us as granted today— including electricity, materials (steel, plastics, cement and fertilizers), fast transportation, and advanced communications. Coal replaced wood combustion because of coal’s abundance, its higher volumetric energy density (1) and the relative ease of transportation for coal. India have fourth largest proven coal reserve in the world. We have four types of coal available-lignite (2), sub-bituminous (3), bituminous (4), and anthracite (5). This type of specification depends on the amount and type of carbon it contains and amount of heat energy it can produce. In each type there have a lot of differences in their specification like moisture content, sulphur, hard grove index (6), carbon content, volatile material, ash content, calorific value (7), etc. Coal in India is used for different purposes in different industries like power industry, sugar industry, sponge iron industry, and many more. Each industry needs coal with particular specification according to their requirements. As the demand increases uses of coal increases so the environmental threats. In general term we use two types of coal: Coking coal: bituminous coal is cooked (heated) to remove volatile component such as propane, benzene, and other aromatic hydrocarbon and some sulphur gases. Coking coal is widely used in the manufacture of steel where carbon must be volatile free and ash free.
The energy density of coal is 32 MJ/kg and 42 GJ/m3, by weight and volume, respectively; similarly, energy density for dry wood is15 MJ/kg and 10 GJ/m3 (Sorensen, 1984). These numbers will vary depending coal rank and wood quality.
2,3,4,5 6 7
Please see: http://www.ket.org/Trips/Coal/AGSMM/agsmmtypes.html
used as a guideline for sizing the grinding equipment in a coal-preparation plant the amount of heat released during the combustion of a specified amount of it
Non-coking coal: Such coal which do not have caking properties are called non-coking coal. Widely used for power generation, manufacturing process of fertilizer, cement, brick, and other heating purposes. Steam coal often referred as non-coking coal is derived from mines. India has the reserve of coal in eastern belt. The country having highest coal reserves include India, china, Australia, Indonesia and south Africa. Indian coal because of high ash and volatile material content is not preferred for industrial usage. In India the widely accepted steam coal is Indonesian and South African steam coal. Coal from Australia are of coking grade and require coking process as a result sold at high cost.
Grades & Pricing
We have seven grades of steam coal from A to G in India. Grades of coal are defined on the basis of UHV (useful heat value) or energy content and corresponding ash and moisture content. In international market unit for coal grades is GCV (Gross calorific value). UHV: It is an expression derived from ash and moisture content for noncoking coal as per government of India notification. UHV is defined by the formula UHV kcal/kg = (8900-138*[percentage of ash content]) Formula for gross calorific value GCV = (UHV+3645-75.4M)/1.466NCV In GCV system of grading of non-coking coal, it is possible to determine the exact value of non-coking coal grades supplied to the consumer whereas in the existing UHV system, the heat value cannot be determine directly but computed by using an empirical formula (8) based on ash and moisture content. The band variation in GCV grades of non-coking coal is narrower than the existing variation of heat value in UHV system. Although ministry of coal had directed Coal India Limited to fix their coal price on GCV basis but due to the opposition from power sector, which accounts for nearly 75% of total coal off take, it is not been materialized till yet. Now Coal India Limited is planning to sub grade the coal within UHV basis. According to Coal India Limited they are planning to invest approx Rs 18,000 crore in eleventh plan to increase the production of coal, which is not possible without better price realization.
India is third largest producer of coal followed by China and USA with total production of approx 309.51 MT in year 08 (April - December) of which contribution from CIL and its subsidiaries is about 83%, about 10% from SCCL (Singareni Collieries Company Limited) and rest from others. But still we are not able to fulfill our domestic requirement and need to import. According to XIth plan by planning commission India is likely to import approx 54 MT of coal. Out of these share of non-coking coal is 10.15 MT.
Of total production of coal in India, power sector consumes about 75 %, which require steam coal. Steam coal is also being consumed by industries like sugar industry, sponge iron industry, cement industry, brick and many more. There are many reasons to use imported coal: The policy of the Government of India stipulates use of only washed domestic coal by power plants located at distances of 1,000 km or more from coalmines. Although the availability of washed coal is a question mark. We must take care of transportation cost which matters a lot as in southern India the only coal field is in Talcher and transportation cost from Talcher-Paradip-western coast location amounts to multi-handling of coal at various locations apart from very high transportation and handling cost. Compared to this, transportation cost from South Africa, Indonesia and Australia is significantly low. The quantity of coal that to be transported in nearly half (due to high calorific value), thereby reducing transportation cost. On GCV basis Indian coal price is nearly 10-12% higher than imported coal. The above written reasons are supporting the forecasted increasing demand of imported steam coal in India. Government is also providing a lot of flexibility in their policies for import of coal and small industries like
brick, cookeries who have a dispute with CIL regarding coal distribution again support that steam coal has great potential in Indian market. I also believe that industries located at the port area will prefer to have imported steam coal because of its high efficiency and low respective price.
Apart from this the use of coal also has many negative impacts. Coal mining historically has been a dangerous occupation, with workers toiling under often-inhuman conditions. Mining has leached hazardous chemicals into water sources and destroyed forests and habitats. Coal use has severely degraded air quality and human health because of high particulates and sulfur dioxide (SO2) emissions. Carbon dioxide (co2) emission from the combustion of coal increases the concentration of co2 in atmosphere. Fly ash, hot water, and oxygen-poor effluents are released into the sea, by our industries that spell doom of fisheries affecting thousand of fishermen. Our government is trying to minimize the environmental pollution in regard of that it had taken few step also like: The government has issued environmental notification on 14.9.2006 as per which the proposal of coal mining projects are being processed for environmental clearance. There are provisions in the law, which allow shutting down the plants if they do not meet environment standards.
Coal is a fossil fuel found in seams, which vary from a few inches to 100 or more in thickness. Depending upon the amount of the ground cover or overburden, the coal can be mined by the surface method (complete removal of overburden) or the deep (underground) method. India is third largest producer of coal in the world. Rapid increase in the country’s future power generation to meet the growing demand of the domestic, industrial and an agriculture sector will be based on this fuel. In India we have majority of non-coking coal reserve which are inferior in quality because of drift origin. Steam coal (non-coking coal) having high ash content about 40-45 %, which obviously correlated with poor calorific value. However, the advantages of Indian coals are low sulphur, low chloride, low phosphorous, less toxic elements, high ash fusion temperature and refractory nature of ash. Steam coal is a type of coal widely used for power generation and other industries like sponge iron, cement, brick etc. Growing economy of India needs greater source of energy for all its industry to move smoothly; Sponge iron is emerging as important route for steel making in India and also real estate sector as per investment commission is likely to grow fast which means demand of cement, brick, and energy will increase, ultimately consumption of noncoking coal increases this is to count few but there are many more factor because of which requirement of coal is supposed to increase. If we talk about the alternatives of energy then we may think of alternative technologies like, nuclear and wind. We do not have enough technology so that we can use it efficiently. India’s coal reserve under the proven, indicated and inferred category primarily up to the depth of 600 meters has increased to 264.54 billion tons as of the beginning of the current financial year. According to the data available from geological survey of India, Central Planning and designing institute, Mineral Exploration Corporation Ltd, Singareni Colliery Company and director general of mines (DGM) of Maharashtra and Chhattisgarh, proven reserve were 100.16 billon tons, indicated reserve were 112.56 billion tons and inferred reserve were 32.44 billion tons, of the total reserve up to 300 meters. However proven reserves between 600 and 1,200 meters were only 1.67 billion tons and those under the indicated and inferred category were 11.66 billion tons and 6.05 billion tons, respectively.
Detailed list of coal reserves in various parts of the country as on 01.04.2008 is as under:
State Andhra Pradesh Arunachal Pradesh Assam Bihar Chhattisgarh Jharkhand Madhya Pradesh Meghalay Nagaland Orissa Sikkim Uttar Pradesh West Bengal Geological resources of Coal Proved Indicated Inferred Total
9007.13 31.23 314.59 10419.32 37492.92 7895.96 88.99 101391.3 19221.59 0 765.98 11584.09
6710.65 40.11 26.83 160 29272.15 31628.9 9882.37 69.73 124080.7 31728.09 58.25 295.82 11680.05
2978.81 18.89 34.01 160 4442.57 6338.32 2781.63 300.71 38120.84 14313.66 42.98 0 5070.7
18696.59 90.23 375.43 44134.04 75460.14 20559.96 459.43 263592.8 62263.34 101.23 1061.8 28334.84
Demand of coal is expected to grow at the CAGR of 7.58% in the next two year. All India demand for 2007-08 estimated at 492.50 MT by planning commission. This denotes growth about 18 million tones over 2006-07. Steam Coal is the key primary energy source for all including Steel Sector. Projected demand of non-coking coal for captive power plants of steel sector alone is 29.72 million ton.
The Working Group (WG) for Coal & Lignite for formulation of XI Plan has assessed the coal demand of 731.00 MT in the terminal year of XI Plan i.e. 2011 – 12. The annualized growth rate of coal demand is expected to be about 9 % over X Plan terminal year demand (BE) of 474.18 MT. The All India coal demand for the year 2007 – 08 and 2008 – 09 have been assessed as 492.50 MT and 555.00 MT respectively. In the terminal year of XII Plan (2016-17), projected demand works out to 1125 Mt (105 Mt. coking and 1020 Mt. non-coking). Whereas Indigenous availability to be 1055 Mt (35 Mt. coking and 1020 Mt. non-coking). The demand for the non-coking coal is supposed to go high may be because of the growing demand for the power and taking advantage of availability of non-coking coal, sponge iron emerging as important route for steel making in India.
Nearly 75% of the coal produced in the world is used for electricity generation only. In India, out of the total capacity, coal accounts for 54.8% electricity production. India’s coal demand is expected to increase manifold within the next 5 to 10 years due to the completion of on-going coal-based power projects, and demand from metallurgical and other industries. Coal demand from the Indian cement industry looks bright and it is expected that coal requirement by the industry will rise steadily from 2007-08 to 2011-12. Coal requirement for the power utility will grow at a CAGR of around 10% during 2007-08 to 2011-12. Although we don’t have so much improved technology to handle high heat producing coal (with high calorific value). Our power sector is showing good scope for the importers, as consumption is likely to grow. Coal demand from Indian Sponge iron and others is likely to grow with a good pace
The indigenous coal supply projection in the year of XI plan is projected to be 680.00 MT. Out of which share of CIL, SCCL and others (Includes PSU’s, State enterprise etc.,) source is 520.50 MT, 40.80 MT and 118.70 MT. The demand supply gap estimated as 51.00 MT, which will be met by imports To meet this demand-supply gap, the Government is looking at various alternatives e.g. FDI, acquisition of overseas coal block, captive mining, faster project approvals, better technology etc. Current policy allows foreign investment in coal and lignite mining for captive consumption for power generation (100 percent), steel and cement (74 percent). In coal processing (Washing and sizing), 100percent foreign investment is allowed
The coal industry is a highly regulated industry, which gives it a monopolistic character. Only government-owned/managed/controlled companies are eligible to mine and trade coal without the restriction of captive consumption. Coal India Limited (CIL) and Singareni Collieries Company Limited (SCCL) account for nearly 92 percent of the total coal produced in the country. Coal Mining is predominantly a public sector activity - Coal India Ltd. (CIL) accounts for approx 85% of total coal production. In 2006-07 Coal India Ltd had produced approx 84% of coal; SCCL and rest captive collieries had produced 9 %of coal. It is expected that up to year 2011-12 CIL will produce 520.5 million tones of coal with a growth of 44.2 % over the year 2006-07. Government has allotted a number of new captive blocks, besides taking up a number of new coal projects under coal PSU’s to augment coal production in short and medium term to bridge the gap between demand and supply. Distribution through E-auction was introduced to provide access to coal for such consumers who are not able to source coal through the available institutional mechanism.
The issue of coal pricing is being looked into by a Committee of Planning Commission to evolve guiding principles to fix coal prices. The Committee is yet to submit the report. Please see annex I.
The Indigenous coal supply projection in the terminal year of XI Plan is projected to be 680.00 MT. Out of these, share of CIL and SCCL sources are 520.50 MT and 40.80 MT respectively. The scenario of supply may be summarized as in table below.
XI Plan 20072008Project(20112007-08(BE) 08(RE) 09(BE) 12) 385.9 385.9 405 520.5 38.04 40.508 41.5 40.8 37.95 36.85 50.79 118.7 461.89 20 10.61 30.61 0 463.258 19 10.45 29.45 0 497.29 17.8 40.36 58.16 0.45 680 40.85 10.15 51 0
CIL SCCL OTHERS Total Indigenous Supply Import-coking Non-coking Total Import Gap
The demand-supply gap estimated as 51.00 MT, which will be met by import. In April 2009 we imported 2.0 million tons of coal. From Jan 2009 - April 2009, India imported 10 millions tons of coal. In April, the country imported 46% of the total quantity (0.9 million tons) from Indonesia followed by 29% from Australia, 21% from South Africa and the rest 4 % of the smaller cargoes were imported from Mozambique and New Zealand. The bulk of the imported coal in April 2009 got discharged into Calcutta, Madras and Mundra followed by Kandla In April, 69% of the total imported coal was non-coking and the balance 31% was coking coal.
The government should go for the New Coal Distribution Policy (NCDP) announced in October 2007 according to which the industry will have to procure coal at market driven prices. The off take of coal by different sectors is governed by coal distribution policy. In October 2007, the new coal distribution policy was introduced. As per this policy, 100 percent requirement of sectors like power (noncaptive), fertilizer, defence and railways will be met at pre-determined prices. For other sectors, 75 percent of the requirement will be met at the pre-determined prices. Companies having an annual requirement of more than 4,200 tones will need to enter into Fuel Supply. Under New Coal distribution Policy it was decided to introduce the concept of “Letter of Assurance” (LOA), which provides for assured supply of coal to developers, provided they meet stipulated milestones. Once the milestones as stipulated in the LoA are met by the developers, LoA holders would be entitled to enter into Fuel Supply Agreements (FSAs) for long-term supply of coal. According to Mr. Goel chief general manager of CIL “the planning commission and ministry of coal & mines should immediately review the policy of 2007 as it was full of faults. It discouraged the lead company to produce coal and at the same time, ensure assured supplies to all stakeholders. Why review is required: Price difference between imported coal and domestic coal is huge therefore hardly any industry import because of which 1. Mandatory lifting of 20% of coal through E-auction is not met. 2. Most of the industry already entered into the Fuel Supply Agreement (FSA). CIL had not been allocated with any reasonable coal blocks of potential reserve since 2001 and as predicted that the demand supply is going to increase at the rate of 5.5 percent each year therefore if this policy is not revised soon then private player would have to come forward for coal exploration. E-auction of coal has been reintroduced for the benefit of small consumers who cannot enter into long-term contract due to small
requirements. Therefore, an interim arrangement captioned “E-booking” was introduced to ensure supply of coal to such consumers.
Quantity Offered VS Quantity Sold
Quantity in tons
MAY JUNE JULY AUG
offered quantity(in tons)
No. Of Bidder VS No. Of Winner
4500 4000 3500 3000 2500 2000 1500 1000 500 0 APR JUNE
no of bidders
no of winners
Five force analysis Competitive rivalry:
Coal industry is highly regulated giving it a monopolistic character. In India only government controlled companies like CIL and SCCL are allowed to mine and most of the domestic demand for coal is being fulfilled by these two. But as the demand for the coal is increasing at the CAGR of 7.8 % and the demand supply gap is likely to grow up to 100 MT by 2011-12 which will be fulfilled by the import gives this sector an attractive look for private players. There is no threat of substitute in near future because we still need high technology to handle nuclear power. Although we have substitutes like wind, hydel but they are not so much efficient and we cannot depend on them. Again government is liberalizing policy for trade boosting private player to jump into this sector. High capital cost is required to jump into this business of steam coal import. • Warehouse: We need to have warehouse where we can store our coal for the distribution. • Logistic: In this business logistic cost like warefage, freight cost, dam rage, licensing and many other. • Cost of coal at mine: We need money to pay the cost of coal at mine. • Taxes: We are required to pay taxes to the government. • Others: For intermediaries and lots of hidden cost.
CIL is planning to import coal from Indonesia, Mozambique, and Australia to meet domestic demand. And some of the big companies are also planning to import coal. The product may be differentiated and we don’t have the efficient substitute till yet. In this kind of business switching to other business is easy as we had not invested any thing on buying land, warehouse etc. There exist alternative source of supply but cost will vary so we need to be very careful while talking to any mine owner.
The supplying industry is comprises of a large number of small operators. Switching cost from one supplier to other may vary according to the situation. Jaguar Overseas Limited has less barrier of entry as this company is already in the business of trading and have good channel for trading.
Threats to new entrants
High initial investment Brand loyalty of customer. Scarcity of important resources like qualified expert staff. Distribution channels are controlled by existing player. Legislation and government action.
Threats of substitute
There is no threat of substitute in near future because we still need high technology to handle nuclear power. Although we have substitutes like wind, hydel but they are not so much efficient and we cannot depend on them.
Major coal mines
Barrier to Entry
1. Major Player like CIL and SCCL are in the market. 2. Pricing issues: Committee of Planning Commission is looking into the matter of price fixation but the report is yet to be submitted. 3. Private captive mine owners are not allowed to sell coal in the open market 4. Information: No proper information channel is there in this sector 5. Capital required: A huge capital is required to enter into the business 6. Facility at port is not up to mark: Facilities at the port is not sufficient to handle the heavy traffic. 7. Technology: We still lag in the technology part like: Clean coal technology, Gasification, Underground mining etc., 8. In land transport infrastructure
9. Government policies: Trade regime liberalized No import quota Duties reduced
10. Coal in India is still measured in useful heat value unit whereas in other countries the unit is Gross calorific value. 11. 100 % FDI is allowed is allowed in captive mining of coal and lignite for permitted end-uses 12. Under automatic route- no prior approval is required.
India's coal demand is expected to increase manifold within the next 5 to 10 years due to the completion of on-going coal-based power projects, and demand from metallurgical and other industries. Demand for coal has been rising at an annual rate of 6 per cent since 1992-93 and CIL and its subsidiaries will be unable to meet the projected demand alone. The investment needed to bridge the gap----400 million tones, between the level of production in the public sector (290 million tones in 1995-96) and the projected demand of 690 million tones (2009-10) ----is estimated to be US$ 18 billion. The public sector corporations----are expected to increase their production by about 250 million tones by 2009-10, subject to their making an additional investment of US$ 8-10 billion. The balance requirement of 150 million tones will have to be met by imports in the short run and by new investments in the long run.
Coal requirement by power sector
The latest figures available from CEA reveal India's total generation capacity in June, 2008 to be 143,061 MW of which 91,907 MW comes from thermal power stations. If all of this generation capacity operates at an ideal PLF of 80 per cent, total coal requirement per year will work out to be 405 million tone! Achieving a PLF of 80 per cent is not a Herculean task and many thermal projects in India are already operating at a higher PLF. There are plans to add another 78577 MW of power by the year 2012. Around 58664 MW would come from thermal power projects, 45000 MW from coal based plants and the rest from gas based plants. This in turn indicates an additional coal require-ment of 200 million tones per year. By 2012, only thermal projects would need the 605 million tone coal and allowing for a normal wastage and loss of 20 per cent, the coal requirement would shoot up to 726 million tones. It would also mean that apart from the thermal projects located on coal pits, 550 trains carrying coal shall be running across the length and breadth of our country every day!
sponge iron sector
Sponge iron is a generic name of metallic product obtained through reduction of iron oxide (haematite) in solid state. The external shape of the ore is retained with 30% reduction in weight due to oxide reduction resulting in change in true density from 4.4 gm/cc to 7.8 gm/cc in this product. This paves the way for 54% reduction in volume which is manifested in pore formation through out the interior of reduced product and hence the name “Sponge Iron”. This material offer benefits like guaranteed uniform and predictable composition containing low amounts of sulphur, phosphorous & tramp elements along with environmental friendliness during usage. Its usage permits application of even low grade scrap as part of the charge in electric steel making without affecting the steel quality. Due to known chemical composition, it enables accurate prediction of end point analysis beginning with continuous feeding of sponge iron. Also, the productivity is increased due to uniformity of size. The iron present as oxide in this material reacts with bath carbon resulting in vigorous boiling action promoting better heat transfer and accelerated slag/metal interactions during electric steel making. Due to this, the bath homogeneity improves resulting in achievement of lower hydrogen and nitrogen contents in steel. Sponge iron has also partially substituted scrap as coolant in oxygen steel making. Even in blast furnace iron making, it has been successfully used to the tune of 150 kg/ton of hot metal without affecting the bed permeability. It has better improved productivity, lowered coke consumption and yielded techno-economics. The price of sponge iron is 1/3rd of the price of coke.
Coal based process
Here, rotary kiln is used as a reactor where iron ore lumps/ pellets are treated with non-coking coal, the in situ gasification of coal in the latter generates CO gas which reduces iron ore to sponge iron. There are various methods presently in use in India which include CODIR (Krupp), SL/RN (Lurgi), DRC (Davy), TDR (Tata Steel) & ACCAR (Allis Chalmer). Though all these processes started with different original concepts, the ACCAR process is somewhat different in the sense that it uses the ported kiln concept against use of air tubes in order designs. The major raw materials for sponge iron production through this route are the iron ore and non-coking coal. About 1.4 tons of calibrated lump
ore (5 mm - 18 mm) is required for production of one ton of sponge iron wherein 2.5 tons of iron ore lumps are required to produce one ton of calibrated lump ore. Non-coking coal requirement is about 1.2 tons per ton of sponge iron produced. However, whenever low grade coals (Grade D/E/ F) depending upon the source are used, about 2.5 tons of these coals are required which necessitates washing before use for one ton sponge iron production. The non-coking coal characteristics needed for sponge iron making are fixed carbon exceeding 40%, ash preferably below 25%, ash fusion temperature exceeding 12000C, reactivity of 2 CC or CO/gm of C/sec, volatile matter of 28% to 32%, moisture of 6% max, and swelling index below 0.5 Coal needs to be crushed and screened to get 0 mm to 15 mm. The sponge iron produced has metallization to the tune of 88% - 90%, carbon about 0.15 - 0.25%, S & P about 0.03% and gangue content about 6% - 8%. The sponge iron sector consumes near about 3 % of coal produced in the country. Allotment of about 19 million ton of coal to this sector by union ministry of coal is not adequate to meet the requirement according to Mr.Rakesh Jain member of Sponge Iron Association of India. Procurement of coal through e-Auction is difficult for sponge iron producer as average actual price was 111 per cent higher than the notified price. "After Coal India Limited reintroduced the process of eauction in November 2007, the sponge iron manufacturers had to buy coal at Rs 2,050 per ton Sponge iron units in the country cannot survive on coal at such price" according to Mr. Jain.
Unavailability of gas in other part of country except west coast belt limits the use of natural gas for sponge iron production in near future. As far as non-coking coal is concerned the ministry of coal has been steadily increasing the linkage to the sponge iron sector.
Sugar is one of the oldest commodities in the world and traces its origin in 4th century AD in India and China. In those days sugar was manufactured only from sugarcane. But both countries lost their initiatives to the European, American and Oceanic countries, as the eighteenth century witnessed the development of new technology to manufacture sugar from sugar beet. However, India is presently a dominant player in the global sugar industry along with Brazil in terms of production. India is the largest consumer of sugar in the world and the second largest producer next only to Brazil. The sugar industry is a major supplier of by-products like molasses for alcohol, ethanol and chemical industries, bagasse for paper industry and has the potential to generate over 5000mw of power from bagasse. Every 100 tons of sugarcane crushed on an average gives 10 tons of sugar, 4.5 tons of molasses, 33 tons of Bagasse and 2.5 tons of Press Mud. Currently, the sugar industry in India is dominated by the cooperative sector, which accounts for more than 55 percent in terms of the number of factories, installed capacity and production. Six states - Maharashtra, Uttar Pradesh, Tamil Nadu, Karnataka, Gujarat and Andhra Pradesh account for over 90 percent of total sugarcane and sugar production in the country with Maharashtra and Uttar Pradesh alone accounting for 60 percent of Indian's total sugar production. India is second largest country in term of sugar cane production. 30 % of the total sugar produced goes to Gur and Khandri, 45% goes for sugar production. And 25% goes for alcohol production (Ethanol). India produces 26 MT on an average but the production for the FY 09 is expected to go below by 20 %. Global contribution by India is 3% and Brazil alone does 36 % and other countries give a total of 45% and the rest is done by China, Cuba, Indonesia, Thialand, UK and USA. World consumption of sugar 150.3MMT for 2007-08, projected to become 160MMT by 2010.
Coal Requirement: Coal requirmrnt by this industry is not available public ally but if any way we can able to find this information then this may be a good information for the company in these ways: Total requirement
Some of the most popular sugar factories in Maharashtra
• • • • • • • • • • • • • • •
Adivasi S.S.K. Navapur Nandurbar Vibhag Ltd (Tal. Navapura, Dist. Nandurbar) Bahganga Sahkari Sakhar Karkhana Ltd. (Bhum, Dist.- Usmanabad) Chhatrapati Sambhaji Raje Sakhar Udyog Ltd. (Sambhajinagar (Aurangabad)) Dongarai Sagreshwar Shetkari SSK Ltd (Kadepur (Raigaon)) Gurudatta Sugars Limited (Takliwadi, Tal. Shirol, Dist. Kolhapur) Jai Mahesh Sugar Industries Ltd. (Pawarwadi, Tal. Majalgaon, Dist. Beed) Khandoba Prasanna Sakhar Karkhana Ltd. (Tal. Karad, Dist Satara) Mahadik Sugar And Agro Product (Radhanagri, Dist. Kolhapur) Nira Bhima S.S.K. Ltd. (Tal:Indapur Dist.:Pune) Priyadarshini Shetkari SSK Ltd (Shivaji Chowk, Udgir, Dist. Latur) Saibaba SSK Ltd (Tal.Jintur, Dist.Parbhani, At Mankeshwar, Teh.Jintur, Dist.Parbhani) Sarvodaya S.S.K. Ltd (Karandwadi, Tal. Walwa, Dist. Sangli) Shree Ambadevi SSK Ltd (Nityanandnagar, Dahigaon (Recha) Road, Tal. Anjangaon, Dist. Amaravati) Sidhapana S.S.K. Ltd (Patoda Dist. Beed) Yogeshwari Sugar Industries limited (Limba, Tq. Pathri Dist. Parbhani)
Major players in this industry • • • • • Balrampur chini mills Ltd Bajaj Hindustan Ltd Andhra sugar Ltd Thiru Arooran Sugar Ltd Dhampur Sugar Ltd
The cement industry is one of the main beneficiaries of the infrastructure boom. With robust demand and adequate supply, the industry has bright future. The Indian Cement Industry with total capacity of 165 million tones is the second largest after China. Cement industry is dominated by 20 companies who account for over 70% of the market. Individually no company accounts for over 12% of the market. The major players like L&T and ACC have been quiet successful in narrowing the gap between demand and supply. Private housing sector is the major consumer of cement (53%) followed by the government infrastructure sector. Similarly northern and southern region consume around 20%-30% cement while the central and western region are consuming only 18%-16%. The overall outlook for the industry shows significant growth on the back of robust demand from housing construction, Phase-II of NHDP (National Highway Development Project) and other infrastructure development projects. Domestic demand for cement has been increasing at a fast pace in India. Cement consumption in India is forecasted to grow by over 22% by 2009-10 from 2007- 08.Among the states, Maharashtra has the highest share in consumption at 12.18%,followed by Uttar Pradesh, In production terms, Andhra Pradesh is leading with 14.72% of total production followed by Rajasthan. Cement production grew at the rate of 9.1 per cent during 2006-07 over the previous fiscal's total production of 147.8 mt (million tons). Due to rising demand of cement the sales volume of cement companies are also increasing & companies reporting higher production, higher sales and higher profits. The net profit growth rate of cement firms was 85%. Cement industry has contributed around 8% to the economic development of India. Outsiders (foreign players) eyeing India as a major market to invest in the form of either merger or FDI (Foreign Direct Investment). Cement industry has a long way to go as Indian economy is poised to grow because of being on verge of development.
Cement demand is likely to remain quite robust for the next five years mainly driven by housing and infrastructure sectors. Higher disposable income, rising population, changing demographics and reduction in average size of household will aid housing demand. We expect ~584mnte of cement to be consumed by the housing sector over the next five years. Roads, ports, power, urban infrastructure and irrigation are likely to boost infrastructure demand. Historically, cement demand has high correlation with GDP. Over the past 10 years, cement-to-GDP has been 1.3x. However, with planned infrastructure investment in the XI FYP to be more-than-double vis-à-vis X FYP, we expect the ratio to increase. Also, we expect cement demand to post CAGR of 11.6% over the next five years.
Power and fuel constitute a significant 18-22% of cement companies’ revenues. The cement industry is dependant on domestic coal, imported coal and pet coke as the main fuels used in kilns and CPPs. While Coal India (CIL) has raised prices of domestic coal 10-15% on an average since December ’07, prices of international coal have seen sharp rise since September ’08 (~70%, currently higher than September ’07 levels). This coupled with rising bulk freight rates would result in substantial increase in landed cost of imported coal. Companies such as India Cements (ICL), ACL and UTCL would be impacted by imported coal prices. Similarly, pet coke prices have risen in line with crude oil prices, thereby affecting companies such as SCL, Grasim and JK Cement (JKCL). However, cement companies have endeavored to moderate impact of higher fuel costs by shifting to captive power sources. The consumption of coal in a typically dry process system ranges from 20-25% of clinker production. This means for per ton clinker produced 0.20-0.25 ton of coal is consumed. This contributes 35-40% of the production cost. The cement industry consumes about 10mn tons of coal annually. Since coalfields like BCCL supply a poor quality of coal, NCL and CCL the industry has to blend high-grade coal with it. The Indian coal has a low calorific value (3,500-4,000 kcal/kg) with ash content as high as 25-30% compared to imported coal of high calorific
value (7,000-8,000 kcal/kg) with low ash content 6-7%. Lignite is also used as a fuel by blending it with coal. However this process is not very common.
Cement companies such as ACL, ICL and UTCL use imported coal. Lower cost of captive power for both ACL and UTCL would partly offset impact of fuel costs. ICL has endeavored to minimize international freight rates via purchase of two bulk freight carriers. Other companies such as SCL, Grasim and JKCL that use pet coke are also likely to face steep rise in fuel costs. However, both Grasim and JKCL will manage offsetting this impact through commissioning of CPPs. Companies such as ACC that have high dependence on domestic coal are likely to face lower cost escalation compared with peers. However, due to the current coal shortage, cement companies are entitled to only 70% of the linkages. For the remaining requirement, they have to purchase the fuel from open markets, where costs are 30-40% higher than linkage coal.
Major players in this Industry
1. 2. 3. 4. 5. 6. 7. 8. Associated Cement Company Ltd. (ACC), Grasim Industries Ltd., Ambuja Cements Ltd., UltraTech Cement Ltd., J.K. Cement Limited, Madras Cements Ltd., Jaypee Group. Binani Cement Limited
9. Prism Cement Limited
The paper industry occupies an important place, as paper can be put to many uses. It contributes not only to economic development but also to cultural development. The spread of education and literacy is bound to increase demand for paper. The Indian paper industry has been historically divided on a three dimensional matrix identified by size, grades manufactured and raw material utilized. Generally, tariff rates have protected smaller units utilizing “unconventional” raw material. Over the years, the growth of various segments, investments levels in specific segments, technological changes, industry fragmentation and intensity of competition have been significantly influenced by the Government tariff policy. The present Excise duty on Paper is 12 %. The Government of India from time to time has given some benefits to small industries in order to protect them i.e. the first 3500 tones produced by a mill is chargeable only @ 8 % and thereafter it is @ 12 %. The three main grades of paper manufactured in India are:1. Newsprint 2. Writing and printing. 3. Industrial Variety ( Craft paper and Duplex Board ) The Indian Paper Industry accounts for about 1.6% of the world’s production of paper and paperboard. The estimated turnover of the industry is Rs 25,000 crore (USD 5.95 billion) approximately and its contribution to the exchequer is around Rs. 2918 crore (USD 0.69 billion). The industry provides employment to more than 0.12 million people directly and 0.34 million people indirectly. The industry was delicenced effective from July, 1997 by the Government of India; foreign participation is permissible. Most of the paper mills are in existence for a long time and hence present technologies fall in a wide spectrum ranging from oldest to the most modern.
With added capacity of approximately 0.8 million tons during 2007-08 the operating capacity of the industry currently stands at 9.3 million tons. During this fiscal year, domestic production of paper and paperboard is estimated to be 7.6 million tons. As per industry guesstimates, over all paper consumption (including newsprint) has now touched 8.86 million tons and per capita consumption is pegged at 8.3 kg. Demand of paper has been hovering around 8% for some time. During the period 2002-07 while newsprint registered a growth of 13%, Writing & Printing, Containerboard, Cartonboard and others registered growth of 5%, 11%, 9% and 1% respectively. So far, the growth in paper industry has mirrored the growth in GDP and has grown on an average 6-7 per cent over the last few years. India is the fastest growing market for paper globally and it presents an exciting scenario; paper consumption is poised for a big leap forward in sync with the economic growth and is estimated to touch 13.95 million tons by 2015-16. The futuristic view is that growth in paper consumption would be in multiples of GDP and hence an increase in consumption by one kg per capita would lead to an increase in demand of 1 million tons. As per industry an estimate, paper production is likely to grow at a CAGR of 8.4% while paper consumption will grow at a CAGR of 9% till 2012-13. The import of pulp & paper products is likely to show a growing trend.
Cost of coal is escalating and prospect of availability of quality coal is diminishing. The imported coal price (Indonesian Origin – GCV 6000Kcal/Kg) had crossed USD 100/MT; such steep price rise had resulted in escalation of cost of production of those mills which happened to be dependent on imported coal for generation of steam/power. Also, power purchased from the grid is proving expensive for the industry.
Major Players in Paper Industry:
Company Name TNPL Hindustan newsprint MPM NEPA Capacity in Million TPA 0.18 0.11 0.09 0.09
The public sector units (PSUs) control a major share of domestic production by supplying 60 to 65 percent of total industrial production. Private sector players have very small capacity in comparison to PSUs.
Future Prospect of paper industry
Strong demand from packaging segment will drive demand growth for industrial paper.
Establishment of new business area such as telecom and power will lead to increasing literacy levels, thus improving the low per capita consumption of paper (3.2 KGS per annum). Besides rapid growth in population, enhanced literacy levels, growing quality consciousness and changing consumer preferences will drive paper demand. In view of the high capital costs, expansion of existing units and revival of sick units remain the practical option for capacity additions. Also, paper mills in India have to look for ways to cut down costs to compete with imports. International paper prices are not expected to rise substantially over the short-medium term. Domestic paper companies will thus continue to reel under the pressure of reduced margins. However, a app `preciating rupee will marginally protect domestic companies from imports. Due to increased supply, some of the companies have put their expansion plans on hold or have reduced their investment opting for lesser capacity expansions.
Month wise coal import in MT
3 676 406
IM P O R T
31 164 69 3238440 2748815 2333838 2990610 2827327 261 251 7 2361920 2184897 1915241
33 064 98
2500000 Quantity in ton
J an-'0 8 F eb -'0 8 M ar-'0 8 A p r-'0 8 M ay-'0 8 J un- '0 8 J ul-'0 8 A ug - '0 8 S ep -'0 8 O ct-'0 8 N o v- '0 8 D ec- '08 J an- '0 9 F eb - '0 9 M ar- '0 9 A p r-'0 9
M o n th
Import of coal from January 2008 to April 2009 is shown in the graph above.
India's coal imports are expected to rise sharply in coming years and decades — from 30 million tones at present to around 60 million tones by 2011-2012 and 300 million tones by 2030—to cater to the growing demand from the power, cement, steel and other critical sectors.
30 25 Million Tonnes 20 15 10 5 0 FY03 FY0 4 FY05 FY06 12.95 10.3 1 12.99 8.69 1 6.93 12.03 16.89 21.7 17.88
28.5 25.2 21.5
C oking Co al N on coking C ola
12 10 8 6 4 2 0
Import as proportion of domestic production
In % 5.3 1.99 2.79 3.03 2.79 2.87 2.27 2.9
6 FY 0
Estimated contribution of import in meeting non-coking coal demand will increase from 5.2 % in FY07 to 10.1 % by FY12.Coal imports have recorded a compounded annual growth rate of 17.1% between 2003 and 2008. Simultaneously, exports of coal have come down during this period with a CAGR of (-) 0.1%.
7 FY 08 P FY 12 E
Grade wise coal import in MT April 2009
Cookin Coal, g 616647, 31%
N -Cookin on g Coal, 1386850, 69%
Import of non coking coal is increasing greatly and expected to have a good future demand.
Origin wise coal import in MT April 09
Australia, 575407, 29%
New Zealand, 39645, 2%
S.Africa, 428400, 21% Mozanbique, 42511, 2%
Indonesia, 917533, 46%
India imported 2.0 million tons of coal in April 2009. From Jan 2009 April 2009, India imported 10 millions tons of coal. In April, the country imported 46% of the total quantity (0.9 million tons) from Indonesia followed by 29% from Australia, 21% from South Africa and the rest 4 % of the smaller cargoes were imported from Mozambique and New Zealand. The bulk of the imported coal in April 2009 got discharged into Calcutta, Madras and Mundra followed by Kandla In April, 69% of the total imported coal was non-coking and the balance 31% was coking coal.
Port wise coal import in MT April 09
Mundra, 557866, 28%
Culcutta, 776679, 38%
Madras, 571253, 29%
Kandla, 97698, 5%
For India, coal is the dominant fuel, accounting for 51.4% of 2007 primary energy demand (PED),followed by oil at 31.8%, gas at 8.9% and hydro-power with a 6.8% share of PED. The new India Power Report forecasts that the country will account for 12.17% of Asia Pacific regional power generation by 2013, with a Potentially growing generation shortfall that implies a rising dependence on imports In FY08, India imported approximately 50 Mn tones of coal, of which coking coal constituted 57 percent. The major source of imported coking coal is Australia while for non coking coal Indonesia is the dominant source. Small Industries like brick, sugar can not able to get coal through e-Auction as the cost is high also imported coal is costly but if logistic cost can be minimized then this also can be our target market. Technical issues at ports, many of our ports are still lags in technology part and don’t have so much facility to handle commodities like coal.As the average waiting time at the Indian ports reaching 4.12 days and 4.89 days in FY07 for non-coking and coking coal, respectively. Most of the coking coal is being imported from Australia whereas for steam or non-coking coal Indonesia and South Africa is taken into consideration.
Pricing of the coal in international market is not very clear as the data is not available public ally. Also coal requirement (Include specification) by different industry is not very clear. Target market for the imported coal is mainly the factories located on the costal area so that the logistic cost may be minimized. We need to be very careful while entering into the market as players like CIL is already into this field.
As the coal industry is a highly-regulated industry so we need to be very careful while entering into the market we must have good information about the industry like: 1. Pricing 2. Industry requiring coal (with full specification) 3. Competitors 4. Policies 5. Information channel Logistic cost plays a very important role for the trading of coal so need to minimize our cost so that we can compete our competitors. Target on the industry which are on the costal region. Emphasize on the bidder of e-auction as they can pay high cost and need coal. At initial stage we must target to small industries like Sponge Iron, Cement, Sugar, Brick etc as they are showing a great raise in their demand in near future.
Source of information Ministry of coal Coal India Limited Director General of Foreign Trade Export import data bank Coal explore Coal Insight World Coal Institute Energy Information Administration Alibaba.com Various Sites like:
1.http://www.financialexpress.com/old/fe/daily/20000811/fec11042.html 2.http://scclmines.com/downloads/coalprice.htm 3.http://www.economicexpert.com/a/Calorific:Value:of:Coal.htm 4.http://www.intlcoal.com/ 5.http://www.coaltrade.org/industrystan.html 6.http://coal.nic.in/welcome.html 7.http://www.indopedia.org/Indian_coal.html
8.http://www.financialexpress.com/news/coal-ministry-scraps-plan-tofinalise-prices-on-gcv-basis/198087/ 9.http://www.infomine.com/ 10.http://coalindia.nic.in/ 11.http://www.kseboa.org/news/723-30-thermal-power-plants-running-atcritical-stock-level-of-coal.html 12.http://www.india-reports.com/RNCOS/coal-india.aspx 13.http://www.eia.doe.gov/emeu/cabs/India/pdf.pdf 14.http://commerce.nic.in/eidb/Default.asp 15.http://www.indianyellowpages.com/india/importers/c/coal.htm 16.http://www.indianindustry.com/coalcarbon/10728.html 17.http://www.indianindustry.com/coalcarbon/10728.html 18.http://www.scribd.com/doc/6577668/Indian-Power-Sector 19.http://dir.indiamart.com/indianimporters/me_coal.html 20.http://www.thehindubusinessline.com/2009/01/09/stories/2009010950 780300.htm 21.http://www.infodriveindia.co.in/india-trade-import-data.html 22.http://www.ita.doc.gov/td/energy/November_Coal%20News%20and %20Trends.pdf 23.http://www.projectsmonitor.com/detailnews.asp?newsid=14136 24.http://www.pewclimate.org/docUploads/india-coal-technology.pdf coal charecteristics 25.http://pmindia.nic.in/nac/concept %20papers/coal_sector_review_17oct07.pdf presentation
26.http://www.egcfe.ewg.apec.org/publications/proceedings/CFE/Hanoi_ 2007/2-1_Kropha.pdf 27.http://coalindia.nic.in/pricing.htm 28.http://www.mjunction.in/download/coal/CoalImportJuly07.pdf 29.http://epubl.luth.se/1404-5508/2003/027/LTU-SHU-EX-03027-SE.pdf 30.http://www.iea.org/textbase/nppdf/free/2008/key_stats_2008.pdf 31.http://www.worldcoal.org/pages/content/index.asp?PageID=188 coal exporting countries Panorama 2008 : Coal in India: current status and outlook
32.http://www.teriin.org/opet/articles/art2.htm power sector 33.http://www.equitymaster.com/research-it/sector-info/power/ 34.http://www.business-standard.com/india/storypage.php? autono=357795 GRADES 35.http://www.cea.nic.in/thermal/Special_reports/Report%20of%20the %20expert%20committee%20on%20fuels%20for%20power %20generation.pdf 36.http://www.investmentcommission.in/power.htm size Important 37.http://www.cea.nic.in/power_sec_reports/Generation_Review0809.pdf 38.http://www.pewclimate.org/docUploads/india-coal-technology.pdf important
39.http://stock-report.blogspot.com/search?q=import+of+coal 40.http://business.gov.in/outerwin.htm? id=http://shipping.gov.in/index1.asp?linkid=151&langid=1 41.http://business.gov.in/outerwin.htm? id=http://shipping.gov.in/index1.asp?linkid=151&langid=1 42.http://www.ipa.nic.in/faci1.htm
43.http://www.australiancoal.com.au/publications.aspx Soth Africa 44.http://www.mbendi.com/indy/ming/coal/af/sa/p0005.htm
45.http://www.economywatch.com/business-and-economy/paperindustry.html 46.http://www.iloveindia.com/economy-of-india/paper-industry.html 47. 48.http://mjunction.in/market_news/coal_1/cil_indicates_rise_in_coal_pri. php 49.http://pubs.acs.org/cen/coverstory/86/8611cover.html 50.http://www.indianchemicalportal.com/chemical-industryoverview/index.html
51. 52.http://newsblaze.com/story/2008121606070300002.ew/topstory.html 53.http://tonto.eia.doe.gov/ask/coal_faqs.asp#coal_prices
54.http://science.jrank.org/pages/1538/Coal-Uses.html 55.http://www.coalindia.nic.in/customer3.htm#NON%20COKING %20COAL 56.http://www.geocities.com/envis_ism/coal_06.doc 57.http://epubl.ltu.se/1402-1757/2006/54/index-en.html 58.http://www.energymanagertraining.com/cement/Cement_india.htm 59.file:///C:/Documents%20and%20Settings/Rohits/Local %20Settings/Temporary%20Internet %20Files/Content.IE5/2RMRI1IV/BE_Ch12%5B1%5D.ppt#292,3,Slide 3 60.http://www.coalindia.nic.in/pricing.htm 61.http://papers.ssrn.com/sol3/papers.cfm?abstract_id=907252 62.http://www.constructionupdate.com/products/powertoday/december20 08/010.html
Domestic Price Fixation
Government of India deregulated the prices of Non-Coking Coal of grades A, B & C, Coking coal and Semi/Weakly coking coal on 22.03.1996. Subsequently, on 12.03.1997, Government of India deregulated the prices of non-coking coal of grade D, Hard Coke and Soft Coke and also allowed Coal India Ltd. to fix coal prices for grades E, F & G till Jan'2000 once in every six months by updating cost indices as per escalation formula contained in the 1987 report of the Bureau of Industrial Cost & Prices. With effect from 01.01.2000, CIL was free to fix the prices of such grades of coal in relation to the market prices. Pursuant of the above, CIL fixed the prices of deregulated coal from time to time and last such revision has been made on 12.12.2007 Grade wise Basic Price of coal at the Pit-head excluding statutory levies for Run-of-mine (ROM) Non-Long-Flame Coal ,Long flame Coal, Coking Coal, Semi Coking Coal& Weakly Coking Coal ,direct feed Coal, Assam Coal for various subsidiaries of CIL are tabled below : Table-I Basic Price of Run of Mine Non-Long-Flame Non-Coking Coal (In Rupees/ Tonne) Field/ Co. ECL(for 8 units vide Annex II) ECL/ Mugma(for 16 units vide Annex IV) ECL/ Rajmahal BCCL CCL NCL SECL MCL A 1490 1710 1440 1470 1350 1190 1160 B 1340 1520 1310 1330 1220 1110 1030 C 1120 1300 1090 1110 1000 950 860 D 900 1080 900 910 840 800 720 E 680 860 890 720 720 670 660 560 F 530 640 760 570 570 530 520 440 G 370 420 610 410 410 390 390 320
Annexure Table-IA Basic Price of Run of Mine of Other Coal (In Rupees/ Tonne) Field/ Co. A B 1800 1840 1580 1500 1380 1380 C 1580 1620 1360 1280 1280 1180 D 1360 1400 1140 1070 1210 1010 E 850 940 900 990 790 F 630 720 680 780 570 G 420 500 460 590 400 ECL/ Raniganj(for 104 1910 units vide Annex I) ECL/ SP Mines(for 2 units vide Annex III) CCL ( for 7 units vide Annex VI) 2060 1760
CCL( for 16 units vide 1650 Annex VII) WCL SECL Premium Collieries Coal produced in Korea Rewa Coalfields) Annexure Table-IB 1450 1460
Basic Price of Run of Mine Long-Flame Non-Coking Coal (In Rupees/ Tonne) Field/ Co. ECL/ Rajmahal BCCL Long Flame Coal SECL Long Flame Coal of Korba & Raigarh Coalfields A 1610 B 1460 1380 1240 C 1240 1160 1070 D 1160 1050 980 920 E F G -
NCL Long Flame Coal 1520 1320
MCL Long Flame Coal 1300 Annexure Table-II
Coking Coal (Run of Mine) (Rs. /Tonne) Washary Washary Washary Washary Grd I GrdII GrdIII Grd IV 2380 1760 2080 1780 1550 1720 1460 1730 1470 1280 1290 1080 1280 1090 1170 1190 1000 1190 1020 -
SUBSIDIARY BCCL(for 53 units vide Annex VIII) BCCL ECL CCL WCL Annexure Table-III
Steel Grd Steel I Grd II 3260 2730 -
Semi Coking & Weakly Coking Coal (Run Of Mine) Rs./Tonne SUBSIDIARY Semi Coking Grd I Semi Coking Grd II Eastern Coalfields 1870 1560 Limited(Raniganj) South Eastern 1580 1320 Coalfields Limited Annexure
Direct feed Coking Coal (Run of Mine) (Rs../Tonne.) Grade of Coal Direct feed Coking Coal of Collieries Listed in Annexure IX (14 Units) (Ash exceeding 20% but not exceeding 21%) (Note:Bonus/penalty @Rs.110/te. per percent decrease/increase in Ash) Annexure Table V (Revised) (w.e.f 00.00 hrs of 9th march2008 ) Assam Coal (Run of Mine) (Rs. /Tonne.) Price 2280.00 3230.00
Unit /Grade of Coal North Eastern Coalfields "A" North Eastern Coalfields "B" Annexure NOTE:-
UHV range ((K Cal/Kg.) Exceeding 6200 K cal/ Kg,,But not exceeding 6299 K. Cal./Kg. Exceeding 5600 K cal/ Kg,,But not exceeding 6200 K. Cal./Kg.
1.In Grade "A" for every additional UHV of 100K Cal /Kg. exceeding 6299 K Cal /Kg. ,Additional Rs.82.00 /M Te. shall be added to the price of " A "Grade. 2.For UHV exceeding 7099 k. Cal./ kg. ,the price of coal shall be Rs.3345 per tonne for ROM Coal and the price difference among the steam ,slack and run of mine coal shall remain same. General Remarks:-
PRICE NOTIFICATION NO CIL : S&M: GM(F) : Pricing 1124 dated 12th Dec.07
In super session of this office price notification no. CIL: S&M:GM(F): Pricing: 289 dated 15.06.04, the pit head prices of all grades of coal produced by Coal Companies of Coal India Limited are being revised with effect from mid night of 12th December,2007 i.e. Zero Hours of 13th December.,2007. The revised pithead prices of all varieties of Run of Mine Coals have been given in tables I to V. Notes : 1.Additional Rs.15 shall be charged on pithead price of Run of Mine coal for the supply of Slack Coal. 2. Additional Rs.165 shall be charged on pithead price of Run of Mine Coal for the supply of Steam Coal. 3.Where the top size is being limited to any maximum limit within the range of 200 mm – 250 mm through manual facilities or mechanical means, a charge at the rate of Rs.35.00 per tonne will be levied, in addition to the price applicable for Run of Mine coal. 4.Where the top size is being limited to 100 mm through manual facilities or mechanical means, a charge at the rate of Rs.55.00 per tonne will be levied, in addition to the price applicable for Run of Mine coal. 5.Where the top size is being limited to 50 mm through manual facilities or mechanical means, a charge at the rate of Rs.70.00 per tonne will be levied, in addition to the price applicable for Run of Mine coal. 6.Where coal is loaded, either into Indian Railways system or into the purchasers’ own system of transport, through high capacity loading system with a nominal capacity of 3500 tonnes per hour or more, additional charge of Rs.18.00 per tonne shall be levied for such loading.
7.While the coal is transported beyond a distance of 3 kms to the loading point, the coal companies shall be entitled to charge additional transport costs from the purchasers at the following rates, namely: 1. For a distance of more than 3 kms but not more than 10 kms Rs.40.00 per tonne. 2. For a distance of more than 10 kms but not more than 20 kms Rs.70.00 per tonne.
In cases, where coal is transported for more than 20 kms to the loading points, transport charges will be payable on actual basis, to be borne by the purchaser. 8.The pit head prices fixed are exclusive of Royalty, Cess, Taxes and Levies, if any, levied by the Govt., Local Authorities or any other bodies of Excise and Sales Tax from time to time. 9.Grading/ classification of coal and the definitions relating to the same have been given in Annexure –X. 10.The prices given in this notification are either FOR or FOB, as the case may be . Surface transportation applicable, would be levied extra . 11.The prices do not apply to coal sold for export . 12For undertaking special additional charges as may be negotiated between the purchaser and the producer may be realised over and above the pithead prices . 13 A rebate of 5% for supply of wahsery grade coking coal will be given to power houses other than captive ones . sizing or beneficiation of coal, charges, where
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue reading from where you left off, or restart the preview.