Cement, Energy and Environment

INDIA'S GROWING APPETITE FOR COAL Coal powers more than half of India's electricity plants and demand for the commodity is expected to rise sharply as the third-largest Asian economy expands at a fast clip. New steel and cement industries coming up in India are also hungry for the 'black gold', pushing up its imports. Here are some facts, projections and issues surrounding India's coal industry: • India produced 526.16 million tonnes of coal in 2009/10, up 6. 78% from 492.76 million tonnes of coal in the previous year • Imports of coal were 73.25 million tonnes in 2009/10, up 24% from 59 million tonnes in the previous year • Coking coal, used mainly in steel, is mostly imported from Australia Non-coking coal that is consumed by power and cement plants is imported from Indonesia and South Africa • There are 556 coal mines in India, mostly owned by the government and located primarily in east and south central regions of the country • State-owned Coal India, with its seven subsidiaries, is the largest miner holding over 80% of India's coal market. Projections & Issues India's coal production is expected to reach 675 million tonnes by 2012, with 459 million tonnes available for power firms. Coal imports will continue to get bigger with acquisitions and collaborations seen with coal mines in Australia, Indonesia and Mozambique Import requirement is seen at 135 million tonnes by 2012, but it may be hampered by congested ports and problems of rail linkages from ports to plants. Courtesy: The Financial Express, New Delhi, 22.09.2010. PROFILE OF COAL INDIA LIMITED (CIL) * World's largest producer of coal based on raw coal production of 431.26 million tonnes in fiscal 2010 (Source: CRISIL Research) * * As of April1 , 2010 (Source: CRISIL Research) • Accounted for 81 .9% of India's total coal production in fiscal 2009 (Source: CRISIL Research , Coal Outlook: 2009-2010 to 2013- 2014, Annual Review, November 2009) • Coal resources of 64.218 million tonnes as of April 1, 2010 (Audited & Classified as per JORC code) • 6 of 11 subsidiaries accorded Mini Ratna status • Operates 471 mines across 8 states in India & exploring opportunities in Australia, Indonesia, South Africa & USA • Our raw coal prices are significantly lower than the landed cost of imported coal in India • Allocates 5% of retained earnings of previous fiscal year, subject to a minimum of Rs. 5/- per tonne of raw coal production, for Corporate Social Responsibility budget. Courtesy: The Indian Express, September 30, 2010. NATIONAL CLEAN ENERGY FUND The Stimulus to Mainstream Renewables GM Pillai & Surendra Pimparkhedkar In the Union Budget 2010- 11, the Finance Minister proposed to levy a cess on coal, the revenues from which will go towards the creation of a National Clean Energy Fund (NCEF). The clean energy cess of Rs. 50 per metric tonne will be levied on all coal , lignite and peat produced in India, as also on imports from abroad. On 24 June 2010, the Union Finance Ministry issued formal orders for levy of the cess as a duty of excise w.e.f. 1 July 2010. The NCEF is proposed to be utilized for the development and deployment of clean energy technologies in India. The magnitude of the Indian NCEF In order to assess the magnitude of the fund that will be generated over the 12th and 13 1 h five years plans i.e. 2012 - 17 and 2017-22, the sector-wise (power utility, captive power, steel, cement, fertilizer) coal demand projections made in the 'Report of the Working Group on Coal and Lignite for Formulation of the XI Five Year Plan 2007- 12', prepared by the Ministry of Coal, Govt. of India, have been used (Table 1 and Figure 1). This analysis shows that coal availability will have to increase at a CAGR of 9 per cent over the 1 ih and 13 1 h five year plans in order to cope with the rising demand from the power and industry sectors and therefore, a corpus of Rs.67,531crore will accu-mulate in the NCEF. 61