India Coal Industry Report - 2015

India Coal Industry Report - 2015

This report profiles India’s coal industry, discussing market trends through 2014 and outlook for 2015 and beyond. The report also highlights leading players in the sector including Coal India Ltd, Neyveli Lignite Corporation Ltd and Adani Enterprises Ltd.

The Indian coal industry is one of the eight core industries of 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 captive use only. Mainly companies from power, steel and cement 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.

After a tough year in FY14, domestic coal production saw significant growth in FY15. The growth was primarily due to the higher capacity utilization recorded by Coal India Ltd. Despite higher production, increase in coal demand led to a 33% y/y rise in coal imports. However, the profit margins of coal players took a hit due to a decline in coal prices and simultaneous rise in operational costs. Reforms in the coal sector and faster clearances have the potential to increase the annual production of coal in India.

Key Points:

Eastern India had the largest proven coal resources in the country. The four eastern states of Jharkhand, Orissa, Chhattisgarh and West Bengal accounted for 79% of the country’s proven coal reserves as of FY14.

The mining sector contributed 2.8% to India’s GDP (at factor prices) as of FY15. The sector grew at a CAGR of 2.5% during 2012-15. Coal production accounted for 26% of the mining sector GDP, while lignite accounted for 2%.

As of FY14, 82% of the country’s total coal production came from Coal India Limited. Singareni Collieries Company Limited accounted for 9%, while others contributed around 9%.

After a strong performance in coal production during 2008-10, the sector took a beating in subsequent years, partly due to the repercussion of coal block allocation scam. However, it recorded a significant recovery in FY15, growing by 8.4% y/y.

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 production
2.3 Coal demand
2.4 Coal imports
2.5 Coal prices
2.6 Market outlook

3. Leading Players and Comparative Matrix
3.1 Leading players
3.1.1 Coal India Limited (CIL)
3.1.2 Neyveli Lignite Corporation Limited (NLC)
3.1.3 Adani Enterprises Limited (AEL)
3.2 Comparative matrix
3.3 SWOT analysis

4. Tables and Charts
Table 1: Status of coal reserves in India during last few years
Table 2: Status of coal resources by type
Table 3: Timeline of coal blocks allocation scam
Table 4: Estimated gap in demand & supply for different segments
Table 5: Key financial ratios of the leading players

Chart 1: Proven coal resources by state
Chart 2: Lignite reserves by state
Chart 3: GDP from mining and quarrying sector at current prices
Chart 4: Production output of coal sector
Chart 5: Results of Indian general elections 2014-Seat share
Chart 6: Current account deficit and fiscal deficit
Chart 7: Breakup of total energy consumption in India
Chart 8: Quarterly GDP growth rate-India
Chart 9: Average monthly USD to INR exchange rate
Chart 10: Inflation during FY14-India
Chart 11: Repo rate
Chart 12: Weights of different industries in index of industrial production
Chart 13: Y/Y change in index of industrial production
Chart 14: Annual production of coal in India
Chart 15: Breakup of coal production by companies
Chart 16: Annual demand of coal in India
Chart 17: Coal imports-India
Chart 18: Global price of thermal coal
Chart 19: Coal price index-Domestic
Chart 20: Forecast for coal demand in India
Chart 21: Annual coal production of CIL
Chart 22: Annual sales of CIL
Chart 23: Profit margins of CIL
Chart 24: Annual lignite production- NLC
Chart 25: Annual sales of NLC
Chart 26: Profit margin of NLC
Chart 27: Annual coal imports-AEL
Chart 28: Annual coal trading revenues of AEL
Chart 29: Profit margins of AEL

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