coal [compatibility mode]
TRANSCRIPT
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Introduction
Formation of Coal
Coal Basics
Types of Coal
Coal Benefication
Coal Mining
Indian coal scenario
Coal pricing
International Coal Scenario
Summary
Coal is areadily combustibleblack or brownish-black sedimentaryrock normallyoccurring in rockstrata inlayers orveinscalled coal beds.
It is composed primarilyof carbon along with
variable quantities ofother elements,chiefly sulphur, hydrogen, oxygenand nitrogen.
Coal is acombustible,sedimentary, organicrock, formed from
vegetation.
Coal is a fossil fuelcreated from theremains of plants thatlived and died about100-400 millionsyears ago.
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Most abundant of fossil fuels.
Worlds largest energy source.
Type of rock composed of organic matter
having been trapped and compressed
underground.
Classified into four varieties.
Constraints to future use.
More environmental concerns.Mmmmmm,
Coal. Doh!
There are four types of coal:
i. Anthracite
ii. Bituminous
iii. Sub-bituminous
iv. Lignite
Anthracite is a type of
coal with the highest
carbon content, between
86 and 98 percent.
Heat value of nearly
15,000 BTUs-per-pound.
Its the highest rank; aharder, glossy, black coal
used primarily for
residential and
commercial space
heating.
Bituminous coal is
dense mineral, black
but sometimes dark
brown, often with
well-defined bands of
bright and dull
material. It is used primarily as
fuel in steam-electric
power generation.
Its properties rangefrom those of lignite to
those of bituminous
coal.
It is used primarily as
fuel for steam-electric
power generation.
Lignite is alsoreferred to as brown
coal, is the lowest
rank of coal and used
almost exclusively as
fuel for electric
power generation.
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It is the cleaning of coal prior
to its use.
It includes sizing, removal of
rock originating from mining
roof, removal of ash and sulfur
minerals, drying to remove
surface moisture and blending
of different coals to achieve
desired physical and chemical
properties.
Crushed coal is put in a liquid media whose specific
gravity is adjusted to separate the lighter coal (low in
ash) from the heavier coal (high in ash).
There are the two basic methods of mining.Open surface miningUnder ground mining
The choice of mining method dependsprimarily on depth of burial and thickness ofthe coal seam.
Seams relatively close to the surface (depthsless than 55 m) are usually surface mined.
Coals that occur at depths of 180 to 300 feet(91 m) are usually deep mined
Surface Mining
Area Mining
Contour Mining
Mountaintop removal mining
Room & Pillar Mining
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Underground Mining
Drift Mining
Slope Mining
Shaft Mining
Most of the coal production in India comes fromopen pit mines contributing over 81% of thetotal production.
Underground mining currently accounts foraround 19% of national output. Most of theproduction is achieved by conventional Boardand Pillar mining methods.
o COAL INDIA LTD( CIL) AND ITS SUBSIDIARIES
o NEYVELI LIGNITE CORPORATION (NLC)
o SINGRAENI COLLIERY COMPANY LIMITED
(SCCL)
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91.69156.15 247.84
30.0322.21 52.24
0%
20%
40%
60%
80%
100%
CIL Other s Total
Extractable Reserves
Total Reserves
As on Geological Resources of Coal
Proved Indicated Inferred Total
1.1.2002 87320 109377 37417 234114
1.1.2003 90085 112613 38050 240748
1.1.2004 91631 116174 37888 245693
1.1.2005 92960 117090 37797 247847
1.1.2006 95866 119769 37666 253301
1.1.2007 97920 118992 38260 255172
1.4.2007 99060 120177 38144 257381
1.4.2008 101829 124216 38490 264535
1.4.2009 105820 123470 37920 267210
- In Million Tonnes (Source Coal India Ltd)
Formation Proved Indicated Inferred Total
GondwanaCoals105343 123380 37414 266137
Tertiary Coals477 90 506 1073
Total
105820 123470 37920 267210
- In Million Tonnes (Source C oal India Ltd)
Type of Coal Proved Indicated Inferred Total
(A) Coking :-
-Prime Coking4614 699 0 5313
-Medium Coking12449 12064 1880 26393
-Semi-Coking482 1003 222 1707
Sub-Total Coking17545 13766 2102 33413
(B) Non-Coking:-87798 109614 35312 232724
(C) Tertiary Coal477 90 506 1073
Grand Total105820 123470 37920 267210
- In Million Tonnes (Source C oal India Ltd)
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Coal Consumption inCoal Consumption inIndiaIndia
The private Indian companies setting up or
operating power projects as well as coal or
lignite mines for captive consumption in such
projects may be allowed foreign equity up to
100% provided that the coal or lignite
produced by them is meant entirely for captiveconsumption in power generation.
100% foreign investment in the equity of anIndian subsidiary of a foreign company or inthe equity of an Indian company for setting upof coal processing plants in India may beallowed subject to the conditions that such anIndian subsidiary or the Indian company(a) shall not do coal mining(b) shall not sell the washed coal or sized coalfrom their Coal Processing Plants in the openmarket and shall supply the washed coal orsized coal from their Coal Processing Plants tothe respective parties sending raw coal to suchCoal Processing Plants for washing or sizing.
The other private Indian companiesengaged in exploration or mining of coal
and lignite for captive consumption for
production of iron and steel and
production of cement may be allowed
foreign equity up to 74%
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Coal Pricing ,at present , is fixed by coal
ministry in consultation with Coal India
Ltd. ( CIL ) & Singareni Collieries
Company ( SCCL ) . The price are
determined on the basis of cost incurred
in Coal Production from different mines.
The expert committee on Integrated
Energy Policy headed by Kirit Parikh, has
recommended setting up of an
independent Coal Regulator to replace
government committees for determine
coal prices for different user industries.
Component Symbol Rs/ tonne
(effective
from 1.4.
1997)
Rs/ tonne
(effective
from
1.4.2001)
Basic Raw coal Price (BP)
+ Crushing Charges (CR)
PR 332
20
431
20
Statutory Charges on Raw Coal (Ro)
=Royalty
+ (SE)= SED
PSr 50
3.50
50
3.50
Add: Adjustment due to Yield Factor (Yc) Extra 83.78 154.97
Total Raw Coal Component Price 489.28 659.47
Washing charges =
+ Wage Revision Adjustment
PW 225.72 268.48
+2.04
Total Price of Washed Coal (P) 715.00 930.00
Functions of Regulators :-
Ensure price revisions.
Suggest measures for Setting Coal prices.
Regulate trading margins.
Ensure that price discovery through e- auctions
is free of distortions.
Ensure coal supply to the power sectors under
commercially driven Long term Fuel Supply &
Transport Agreements ( FSTAs)
Annual prices quoted include the Northwest
Europe marker price, Japan steam and coking
coal import prices, and the US Central
Appalachian coal spot price index.
Coal prices except for the US Central
Appalachian price are calculated as cif prices,
where cif = cost + insurance + freight (average
freight prices). The US Central Appalachian price
is fob = free on board. Prices are quoted in US
dollars per tonne.
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Coal prices take off in recent years (US$/tonne fob)
20
30
40
50
60
70
80
90
100
110
120
130
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
$/tonnefob
Hard CC Thermal - contractT he rm al - S.A fric an s po t S em i- So ftULV PCI
fob (free on board) basis is the price loaded onboard a ship at the portof origin and thusexcludes carriage insurance and freight (cif).
Spot and contract thermal coal prices from Australia and SouthAfrica (US$/tonne fob)
20
25
30
35
40
45
50
55
60
65
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
$/tonnefobAustralia Spot (Asian
Tender)Japan AnnualContract
20
24
2832
36
40
44
48
52
56
60
64
68
72
2001 2002 2003 2004 2005
$/tonnefob
fob RichardsBay
fob Newcastle
Source:Tex Report,GlobalCoal.com,October 2005
Monthly spot South African prices since 1981, with and withoutfreight charge
10
20
30
40
50
60
70
80
90
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005
$/tonne
fob S.Africa (RBCT)
CIF Rotterdam (incl. freight)
Price gap between domestic Chinese coal prices andimport prices has been closed in 2005
20
30
40
50
60
70
8090
Jan-02
Mar-02
May-02
Jul-02
Sep-02
Nov-02
Jan-03
Mar-03
May-03
Jul-03
Sep-03
Nov-03
Jan-04
Mar-04
May-04
Jul-04
Sep-04
Nov-04
Jan-05
Mar-05
May-05
Jul-05
Sep-05
$/tfob
Aust - cif Japan
China - Datong premiumfob main port
Forecast Japanese thermal contract coal prices in
historical context
20
25
30
35
40
45
50
55
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006f
2008f
2010f
$/tonnefob
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The present system of royalty charging is likelyto change to combined royalty rates ( fixedplus ad valorem ) to balance the aspirations ofthe coal producing states and apprehensions ofthe consumers.This new system of royalty would jack up coalprices by 10 to 15 % taking up the overallroyalty components on coal prices to 15 -20 %level .
To deliver a sustained growth of 8% through
2031, India would, in the very least, need to
grow its primary energy supply by 3 to 4 times
and electricity supply by 5 to 7 times of todays
consumption. By 2031 -32 power generation
capacities would have to increase to 778095MW and annual coal requirement would be
2040 mt.
473.18
629.63
828.16
1078.54
1267.01
0
200
400
600
800
1000
1200
1400
06-07 11-12 16-17 21-22 24-25
Coal Demand (Mill Tes)
Coal Demand (Mill Tes)
365
537 554
756
840
0
100
200
300
400
500
600
700800
900
2006-07
2011-12
2016-17
2021-22
2024-25
Coal Supply Million Tes)
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33 2
30 1
31
50 548 4
21
69 0
60 3
87
0
100
200
300
400
500
600
700
800
Demand Availability Shortage
10th Plan
11th Plan
12 Th Plan
Stepping up domestic coal production by allottingblocks to central and state public sector units andfor captive mines to notified end users
Coal Import needs creation of necessaryinfrastructure. Will also put pressure on domesticcoal industry to be efficient. NTPC has importedabout3 million tes of coal in 2005-06.
Amendment in Coal Mines Act to facilitate (a)private participation in coal mining for purposesother than those specified and (b) offering offuture coal blocks to potential entrepreneurs.
Technology for economic exploitation of coal lyingat greater depths
Pricing
70% of the domestic coal is dedicated to powergeneration.
Fuel cost constitutes about 65% of the total cost ofgeneration
Since the dismantling of APM,coal prices have beentaken for arbitrary escalation with no transparency
The opening of the sector to private players willbring in competition and prices will be determinedby market dynamics
Till such time, a regulatory mechanism needs to beput in place to put a check on arbitrary price hike.
Infrastructural Limitations- Burdened transportation
network - calls for following measures:
Transportation capacity to be increased.
Rationalization of linkages to cut down on
transportation distance and better utilization of
existing infrastructure Cut down on criss-cross rail movement
Coastal stations to be run on imported coal
Environmental Issues :
More emphasis on use of washed coal
Use of clean coal technology like IGCC
Strict implementation of MOEF stipulations
Proper restoration of degraded land due to open
cast mining.
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Recognizing the Vision of Government of India
& that economies of scale leading to cheaper
power can be secured through development of
large size power projects using latest super
critical technologies, Ministry of Power, CEA
and Power Finance Corporation are proposing
to facilitate setting up of Five Ultra Mega power
Project with capacity of 4000 MW each in the
first phase through Tariff based competitive
bidding rout .
The Project will be developed based on theprinciples ofBuild Own and Operate (BOO).It included construction, execution andmaintenance of 4000 MW coal based PowerProject for its life cycle.
It will facilitate setting up of large sizedprojects with economies of scale leading tocheaper power. Utilization of higher efficiencycan be achieved by using Super CriticalTechnology with unit size of 800 MW each (5x800).
Project also includes development of dedicated
coal-mines, thus free from coal availability
risks.
Mining and transportation of coal to the Power
Project itself is a sub-project thus will generate
employment opportunities for the local
population.
International Scenario ofInternational Scenario of
CoalCoal
Coal provides 26.5% of global primary energy
needs and generates 41.5% of the world's
electricity
Total Global Hard Coal Production 5845Mt (2008e)
5442Mt (2007)
3489Mt (1990)
Total Global Brown Coal/Lignite Production 951Mt (2008e)
956Mt (2007)
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Proved reserves at end of 2008Thousand million tonnes (anthracite and bituminous coal shown in brackets)
Proved Coal ReserveProved Coal Reserve -- 20082008
Projected exports to 2010
Queensland ports and rail links
Location of Elk Valley Coal mines and rail and ports ofWest Coast Canada
Location of Xstratas coal mines in South
Africa
PR China2761Mt Indonesia 246Mt
USA 1007Mt South Africa 236Mt
India 490Mt Kazakhstan 104Mt
Australia 325Mt Poland 84Mt
Russia 247Mt Colombia 79Mt
Top Ten Hard Coal ProducersTop Ten Hard Coal Producers Worldwide Coal Production
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ProductionMillion tonnes oil equivalent
ConsumptionMillion tonnes oil equivalent
Coal Production &Coal Production &ConsumptionConsumption -- 20082008
Top Ten Hard Coal ConsumersTop Ten Hard Coal Consumers
CoalCoal As an Energy SupplierAs an Energy Supplier
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SouthAfrica
94% Israel 71% Morocco 57%
Poland 93% Kazakhstan 70% Greece 55%
PR China 81% India 68% USA 49%
Australia 76% Czech Rep 62% Germany 49%
CoalCoal In Electricity GenerationIn Electricity Generation
Export & Import
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Steam Coking Total Trade
1990 299Mt 199Mt 498Mt
2000 421Mt 187Mt 608Mt
2008 676Mt 262Mt 938Mt
International Hard Coal Trade(Source: IEA -www.iea.org)Steam Coal Coking Coal
Atlantic Pacific Atlantic Pacific
1986 74Mt 59Mt 61Mt 81Mt
1996 125Mt 139Mt 70Mt 103Mt
2006 240Mt 330Mt 72Mt 129Mt
Developmentof Seaborne Trade(Source: SSY - www.ssyonline.com)
Projected supply/demand balance in thermal coal
seaborne market to 2010
24
32
2522 22
272623
25
29
26 27
0
510
15
20
25
30
35
2005f 2006f 2007f 2008f 2009f 2010f
m
illiontonnes
Supply
Demand
Total of which Steam Coking
Australia252Mt 115Mt 137Mt
Indonesia 203Mt 173Mt 30Mt
Russia 101Mt 86Mt 15Mt
Colombia 74Mt 74Mt -
USA 74Mt 35Mt 39Mt
South Africa 62Mt 61Mt 1Mt
PR China 47Mt 43Mt 4Mt
Top Coal Exporters (2008)Total of which Steam Coking
Japan 186Mt 128Mt 58Mt
Korea 100Mt 76Mt 24Mt
Chinese Taipei 66Mt 60Mt 6Mt
India 60Mt 31Mt 29Mt
Germany 46Mt 37Mt 9Mt
PR China 46Mt 35Mt 11Mt
UK 44Mt 37Mt 7Mt
Top Coal Importers (2008)
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Indonesia dominates supply growth in recent years to become theworlds largest exporting country in 2005(million tonnes)
0
20
40
60
80
100
120
140
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
milliontonnes
Australia Indonesia South Africa
China Colombia Russia
Source:Coal Information 2004(IEA),McCloskeyCoal,October 2005
Summary of Chinese coal market by end use (million
tonnes)
Chinese Coal Demand 2004
Power
52%Constn/
cement
17%
Others
(heating)
11%Cokel/steel
14%
Chemicals
6%
Chinese coal demand by use
0
200
400
600
800
1000
1200
1400
1600
1800
2000
1995
2000
2001
2002
2003
2004
2005f
2006f
2007f
2008f
2009f
2010f
mt
Power
Construction/cement
Metallurgical/steel
Chemicals
Others (heating,etc)
0
20
40
60
80
100
120
140
160
180
200
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
milliontonnes
Australia Indonesia South Africa
China Colombia Russia
Coal shall remainmainstay for power generation.
Allocation of captive blocks to end users. Allowing private participation
This will also create a competitive environment and which will
enablemarket drivenpricing structure.
Till such time, regulator to be put in place to ensure fair
pricing of coal, proper development of infrastructure &
efficient utilization of resources in the coal sector.
Keeping in view the longer gestation period of coal mines,
faster clearances of coal projects needs to be undertaken so
as to be commensurate with the commissioning of power
plants.
Coal washing and use of clean coal technology to be
promoted.
Transportation network bottlenecks to be reduced by
judiciousrationalization of linkages.
Conclusion & Way Forward
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Queries