India Coal Industry Report - H1, 2013

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India Coal Industry Report - H1, 2013

The Indian coal industry is one of core industries in the country and is dominated by public sector undertakings, particularly Coal India Ltd. The industry involves coal and lignite mining, production and trading. Despite the presence of abundant resources, India has been facing persistent coal shortage in the last few years and has become a net importer of coal to meet its growing energy requirements. The Ministry of Coal allows production of coal from allocated coal blocks for some stipulated use only. Generally, companies in the power, steel and cement sectors own coal blocks in India. The coal mines are a property of the government and it has the sole right to mine and produce coal from it which sometimes results in inefficient use of available resources.

FY13 was a difficult year for the Indian coal industry owing to controversies surrounding coal blocks allocation scam. The supply of coal from domestic sources was not able to meet the huge demand for coal. In FY13, the demand for coal exceeded its supply by around 192 MT. The situation was more acute in the case of coking coal where the demand was nearly 1.5 times that of supply. However, the drop in demand for coal in China led to a decline in global coal prices during the fiscal year 2013 which made coking coal imports cheaper.

India’s growing energy requirements and rising per capita consumption, coupled with the reforms in land acquisition and environment clearances, bode well for the sector.

Key Points:

• During the past three years, the demand for coal has superseded the total supply, which has resulted in a wide demand-supply gap. In FY13, the demand-supply gap increased by 19.2% year on year.

• The total coal production in FY13 grew by 3.3% over FY12 production. The Ministry was able to achieve 97% of the targeted production.

• In FY13 budget, the government waived off customs duty of 5% on non-coking coal. It also decreased countervailing duty to 1% from 5% to ease import of non-coking coal. As a result of duty exemption, non-coking coal imports grew by 75% year on year to exceed a figure of 97MT.

• The coal production index slipped in the second half of FY13. The index recorded an average growth rate of 0.2% in 2HFY13 against 9.3% recorded in 1HFY13.

Table of Contents

1. Industry Profile
1.1 Sector overview
1.2 Sector size
1.3 Competitive landscape
1.4 Environmental scanning

2. Market Trends and Outlook
2.1 Key economic indicators-India
2.2 Coal demand
2.3 Coal production
2.4 Coal imports
2.5 Coal prices
2.6 Industry forecast

3. Leading Players and Comparative Matrix
3.1 Leading players
3.1.1 Coal India Limited (CIL)
3.1.2 Neyveli Lignite Corporation Ltd (NLC)
3.1.3 Gujarat NRE Coke Ltd (GNCL)
3.2 Comparative matrix
3.3 SWOT analysis

4. Tables and Charts

Table 1: Status of coal reserves in India during the last few years
Table 2: Status of coal resources by type as of April 1, 2012
Table 3: Coal public sector undertakings
Table 4: Coal blocks allocation scam timeline
Table 5: Demand supply gap as per ministry of coal
Table 6: Estimated gap in demand & supply for different segments
Table 7: Balance sheet parameters
Table 8: Valuation matrix

Chart 1: Proven coal resources by state
Chart 2: Lignite reserves by state
Chart 3: Market share of leading players
Chart 4: Position of constituent parties in lower house of parliament
Chart 5: Current account deficit and fiscal deficit
Chart 6: Breakup of total energy consumption in India
Chart 7: Quarterly GDP growth rate-India
Chart 8: Average monthly USD to INR exchange rate
Chart 9: Inflation during FY13-India
Chart 10: Weights of different industries in index of industrial production
Chart 11: Index of industrial production
Chart 12: Y/Y change in index of industrial production-FY13
Chart 13: Coal production in India
Chart 14: Breakup of coal production by companies
Chart 15: Coal imports-India
Chart 16: Global price of thermal coal
Chart 17: Coal price index-Domestic
Chart 18: Forecast for coal production
Chart 19: Forecast for coal demand in India
Chart 20: Annual coal production of CIL
Chart 21: Net sales of CIL
Chart 22: Profit margin of CIL
Chart 23: Neyveli Lignite Corporation Limited- Shareholding
Chart 24: Annual lignite production- NLC
Chart 25: Net sales of NLC
Chart 26: Profit margin of NLC
Chart 27: GNCL- Shareholding
Chart 28: Annual metallurgical coke production-GNCL
Chart 29: Net sales of GNCL
Chart 30: Profit margin of GNCL

Number of pages: 28
Release Date: Fri, 31 May 2013