India Coal Sector Captive Mining Primer

India Coal Sector
A Primer
August 2010

Jaideep Goswami Jonas Bhutta
Tel: (91) 22 6622 1010 Tel: (91) 22 6622 1008
E-mail: jaideep.goswami@in.daiwacm.com E-mail: jonas.bhutta@in.daiwacm.com
Saurabh Mehta
Tel: (91) 22 6622 1009
E-mail: saurabh.mehta@in.daiwacm.com

Contents
Executive summary
The allocation and development of mines
– Background on mine allocation
– Mine development … timelines
– The mine-allocation process
– Key challenges in the allocation procedure
Captive coal mining
– Genesis: captive coal mining in India
– End-use industries allocated captive mines
– Allocation of captive block reserves by state
– Estimated reserves
– Reasons for the captive mine development delays
Coal washeries
Annexure

2

Executive summary
Captive mining. Introduced in 1993 for end use by the operating company (power,
cement, and steel), to meet the rising demand for coal and due to the inability of Coal
India (CIL) to ramp up production (1993-2009: 208 captive coal blocks allocated with
total reserves of about 45bn tonnes).
Current output. Twenty-five mines are operating currently, and output for FY10 was
about 35m tonnes. The government expects the ramp-up in production at the existing
mines and new production to increase output to 80m tonnes by FY12 (about 22 blocks
allocated from 1993–2003 are due to be commissioned).
Mine-development process. Geological report (two years) > mining plan (six months)
> technical committee (three months) > environment approval (EA) and forest approval
(FA) (two-to-six years) > land acquisition and mining leases (concurrent with EA and FA,
two-to-six years) > production (six-to-12 months).
Hurdles to mine development: a) lengthy processes for EA and FA, b) location of a
mine in a red-corridor area, c) a lack of mining experience, and d) the joint allocation of
mines.
3

Executive summary
Tides of change (under review by the government)
– Captive mining
» Single-window approvals. All major approvals to be handled by a central agency
before allocation to a developer
» Competitive bidding. Based on the average selling price of coal during the
lifespan of a mine (to maintain a check on coal prices)

– Industry-wide initiatives
» Coal regulator. In the 2010-11 Budget, the government suggested setting up
regulatory authorities, similar to those for the power sector (Central Electricity
Regulatory Commission [CERC] and Central Electricity Authority [CEA]
» No-go areas. The Ministry of Environment & Forestry (MOEF) demarcated no-go
areas, which we expect to speed up the process of obtaining approvals, currently
the biggest hurdle to mine development

4

Background on mine allocation
Pre Electricity Act era (1993-2003)
– CIL and its subsidiaries were the only players
– The concept of captive mines was more of a push from the government than a pull from
the private sector
» In the period many of the mines were allocated to ‘non-serious’ players
Post Electricity Act (since 2003)
– A conscious decision by the government to increase coal output, due to:
» A rising demand-supply gap. At the end of the 11th Five-Year Plan (2007-12 imports would
account for 12% of demand, according to the Planning Commission
» The inability of CIL to scale up its production growth above 5-6% YoY
» The entry of the private sector into power generation has led to more interest in captive mines
» To-date, 208 mines have been allocated, most of them from 2005-08
Increasing demand – the supply shortfall supports the case for captive mining

5

Mine development … timelines
Best-case scenario Ideal scenario Exceptional scenario

Production

Land acquisition and mining leases
Activities/Stages

Environmental & forestry approvals

Technical committee

Mining plan

Geological report

0 1 2 3 4 5 6 7 8 9 10
Years taken for completion of each stage

6

The mine-allocation process
Approvals/procedures Timeline Avg cost (Rs m) Remarks
Geological report 2-3 yrs 20-150 Prepared by CMPDIL (a subsidiary of CIL) to
estimate the proven reserves, the backbone
for preparing the mining plan

Mining plan 6 mths Negligible Prepared by recognised qualified persons in
collaboration with the applicant
Technical-committee approval 2-3 mths n.a. A group of of experts from a number of
agencies approve the mining plan

Total of 86 approvals
required
Notification to the allotted company n.a. n.a. The applicant is allocated the mine
Production
Environment & forestry approvals 2-6 yrs Negligible MOEF

Forestry & Environmental Clearance
Land acquisition and mining leases 2-6 yrs Rs0.3m/acre and Rs0.3m/family for Runs concurrently with FA & EA
relocation

Production 6 mths-1yr Rs1,600-2,400/tonne Avg cost of mining from open-cast and
underground mines
Source: Ministry of Coal, Daiwa

7

Forest approval … a backgrounder
The MOEF is the agency that awards the final approvals.
Most mines are located near rivers and forests, and the conversion of forest land for mining use can be problematic.
Brief overview of the procedure for the usage conversion of forest land
– Stage 1. Receive approval in principle to convert the forest land by adhering to the rules and regulations of the Coal Bearing
Areas Act 1957. The main agencies the application must be reviewed by are shown below
– Stage 2. Deforestation in phases by simultaneously implementing the Environment Management Plan

Forest sheriff

District forest officer In the best-case scenario,
an application has to go to
Conservator of forest
52 different desks to
receive an EC&FC.
Conservator of forest - state

Secy. Forest - state Stage-1
The minimum time to
Minister of forests - state obtain an EC&FC is two
years, but can take as
Sr. asst. inspector forest (MOEF) - central government long as six years.

Forest advisory committee - central government

Minister Forest - India Government

8

Key challenges in the allocation procedure
Our discussions with industry participants highlighted the following challenges.
EA and FA appears to pose the greatest hurdles in the mine-development process.
– Even if everything is in order it is still necessary for the application to go across at least 52 desks for an FC
– The involvement of a large number of agencies in the process creates redundancy
Village > Taluka > District > State > Central Government (various ministries)
– Public hearings, held by the State Pollution Board and in which all the stakeholders participate, are the most
difficult part of obtaining an EC
– Having an Environment Management Plan approved should take one-to-two years but can take up to six
Land acquisition is another sore point
– The lack of a single-window land-acquisition agency means the applicant is dependent on its relationship
with locals
Issues highlighted by Utkal Coal Co. in a joint review meeting on the progress on captive coal blocks in March 2008. The company was
allotted the mine in 1998.

However, we expect changes going forward
In order to speed up the mine-development process the government has suggested the following ideas:
– Single-window approvals. To allocate mines along similar lines to the ultra mega-power projects
– Competitive bidding. Undertake competitive bidding for the coal blocks to improve transparency. The bids
would be dependent on the average selling price of coal during the life of the mine
– Coal regulator. In the 2010-11 Budget, the government suggested setting up regulatory authorities, similar
to those for the power sector, CERC and CEA
We expect the majority of delayed mines to come on-stream by 2012. We expect many of the
captive mines that were allotted from 1993-2009 and delayed to start producing in 2011-12, raising captive
coal production from 17m t.p.a for 2007 to 81m t.p.a. for 2012. Meanwhile, mines linked to 12th Five-Year
Plan projects will go into production after 2012

90 Captive coal production 80.9
80
70
60
50
37.1
40 29.9
30 21.2
17.6
20 7.8 10.1
13.6
5.5
10 0.7 1.8 3.0 3.8 4.5
0

Source: Ministry of Coal

10

Captive Coal Mining

11

Genesis: captive coal mining in India

Captive mining is for a company’s own end use (power plant, cement, and
steel).
A captive-mining policy was introduced in 1993 to meet a rise in coal demand.
CIL and its subsidiaries were unable to meet demand.
As more than 70% of incremental power capacity is based on coal, the supply of
coal is crucial to meeting the rising demand for power.
Some 208 captive coal mines, with estimated geological reserves of more than
45bn tonnes, were approved from 1993-2009.
The first captive block was allocated in 1993 and captive-mine production began
in 1997.
Currently, 25 captive mines are in production, with output of about 30m tonnes
for 2009. For 2012, we forecast captive mines to produce more than 80m
tonnes.
12

Captive coal mining in India
Allocation of captive blocks
250

200
24

150 52

100 53 208

50 24
5
21
0
1993 - 2002 2003 2004 2005 2006 2007 2008 2009
Source: Ministry of Coal, CEA

Captive mines were first allocated in 1993, with a total of 19 blocks allocated by 2002 and 21
blocks allocated in 2003.
To date, 208 coal blocks have been allocated for captive mining to reduce the demand-supply gap.

13

End-use industries allocated captive mines
Breakdown of end-use industries
Small & Isolated UMPP's
Cement 1.0% 4.8%
Coal to liquid 3.8%
1.0%
Power
Commercial Mining 39.9%
18.8%

Iron & Steel
30.8%


Captive coal mines were allocated for companies own use in the power, iron and steel, and
cement sectors as well as others.
Coal-based capacity additions totalling 100GW are targeted in the 11th and 12th Five-Year
Plans.
14

Allocation of captive block reserves by state
Breakdown of allocated reserves by state
West Bengal Andhra Pradesh Arunachal Pradesh
6.6% 1.4% 0.3%

Chhattisgarh
Orissa
21.7%
21.4% Overall, reserves
of more than 45bn
tonnes have been
allocated

Maharashtra
13.1% Jharkhand
26.6%
Madhya Pradesh
9.0%

Most of the captive coal blocks are located in difficult operating areas (red corridor) and have
low grades of coal (high ash content).

15

Estimated reserves
Coal reserves allocated from 1993-2009 bn tonnes

units
60 20
18
50
16
14
40
12
30 10
17.6
8
20
11.9 6
4
10
3.3 3.1 3.4 4.2 2
2.2
0 0
1993 - 2002 2004 2005 2006 2007 2008 2009

Coal reserves Coal Blocks allocated


To-date, captive coal blocks with estimated reserves of more than 45bn tonnes have been
allocated.

16

Mines allocated (1993-2003) – 23 blocks have started production
Usha Martin Ltd. GR– 29.76m tonnes 6 years

WBPDCL/BECML GR– 8 m tonnes 6 years

KPCL GR– 152.52m tonnes 6 years

Arunachal PMDCL Commercial – 27m tonnes 4 years

Prakash Industries Ltd. GR– 34.48m tonnes 4 years

PSEB GR– 562m tonnes 5 years

RASL now SEML GR– 156m tonnes 9 years

Jayaswal Neco Ltd. GR– 125m tonnes 8 years

Jindal Power Ltd. GR– 246m tonnes 9 years
GR– 106m tonnes
Monnct Ispat Ltd. 9 years

JSPL Ltd. 3 years GR– 124m tonnes

BLA Industries 9 Years Usage – Small Isolated Dispensation, GR–
9.3m tonnes

WBPDCL/BECML 2 years GR– 125.71m tonnes

WBSEB/BECML 2 years GR– 84.47m tonnes

GR– 22.55m tonnes
INDAL/HINDALCO 10 years

CESC Ltd 10 years GR– 140.47m tonnes

1993 1995 1997 1999 2001 2003 2005 2007 2009
Achieved peak-rated capacity Usage – sponge iron Usage – power Government


17

Mines allocated (1993-2003) – 15 are due to start production in 2010
Shree Baidyanath Ayurved 7 years
GR– 36m tonnes

Bhusan GR– 80m tonnes 7 years

Gondwana Ispat GR– 31.5m tonnes 7 years

Field Mining & Ispat GR– 38m tonnes 7 years

JSPL Ltd. GR– 140.47m tonnes 7 years

TVNL GR– 140.47m tonnes 7 years

CMDC GR– 259.47m tonnes 7 years

OMDC GR– 153.31m tonnes 7 years

GVK Power GR– 92.3m tonnes 9 years

B.S Ispat Years 9 years
GR– 34.34m tonnes

Monnct Ispat Ltd. 11 years GR– 106m tonnes

Utkal Coal Ltd 12 years GR– 208.77m tonnes

WBPDCL 14 years GR– 125.71m tonnes
Years
IISCO/SAIL 14 years GR– 285m tonnes

1996 1998 2000 2002 2004 2006 2008 2010 2012
Usage – sponge iron Usage – power Usage – others Government


18

Captive coal blocks allocated in 2004
Breakdown of allocated mines Ownership of the mines allocated
Private Joint, 0%
1
20.0%

Government
4
80.0%
Individual ,
100%

Source: Ministry of Coal Source: Ministry of Coal

One coal block was allocated to National Aluminium (NACL IN, Rs430 , 5), most of the
approvals are in progress, but land acquisition is being held up by a boundary dispute.
Approvals for another three mines are in progress and the government expects the mines to
start production by FY11. For NTPC’s (NATP IN, Rs194.1, 1) mines, the lack of evacuation
infrastructure is a major hurdle to developing its mines.

Note: The details of each block are available from us

19

Breakdown of allocated mines Ownership of the allocated mines
Joint, 8%

Government
8
33.3%

Private
16
66.7% Individual , 92%

Of the eight blocks allocated to government-owned companies, one block that was allocated to
DVC (Not listed) was de-allocated by the Ministry of Coal, while four of the seven remaining
blocks are expected by the government to start production between 2010-11.
Three mines have started production, five are expected by the government to start production
in 2010-11, while approvals for the others are in progress.


20

Breakdown of the allocated mines Ownership of the allocated mines
Joint, 36%

Private
21
39.6% Government
32 Individual ,
60.4% 64%


There has been no significant progress on the approvals for most of the mines allocated to
the government companies.
Of the mines allocated in 2006 to private companies, 16 are expected by the government to
start production by 2010-11, subject to approval by MOEF.


21

Joint, 13%
Private
18
34.6%

Government
34
65.4%

Individual , 87%

There has been no significant progress in receiving approvals for most of the mines allocated
to the government companies.
Progress by the private players has been relatively better, with eight mines expected by the
government to start production between 2011 and 2013.


22

Government
4 Individual
16.7% 37.5%

Private Joint
20 56%
83.3%

No progress in any of the four mines allocated to the public-sector units as the blocks are
either unexplored or only partially explored.
There has been progress for only four of the mines allocated to the private companies
(expected to begin production between 2011 and 2014). There has been no significant
progress on the other 16 mines, most of which were jointly allocated.


23


Joint, 56%
Government
1
33.3% Individual ,
44%

Private
2
66.7%


The East of Damogoria (Kalyaneshwari) block was allocated to WBPDCL.
Two coal blocks, North of Arkhapal and Ramchandi, were allocated to Tata-Sasol and Jindal
Steel & Power (JSP IN, Rs654.3 , 2), respectively, for coal-to-lignite projects. Both these
private entities have provided bank guarantees.


24

Reasons for captive-coal-mine development delays

There is a lack of mining experience on the part of the private developers
and a lack of initiative by the government companies, in our view.
The locations of the captive coal blocks.
– Mostly in the red-corridor area (impoverished regions in the east of India that
experience considerable Naxalite Maoist militant activity)
– No support from the state governments in terms of security
Land acquisition
– The relationship between the local people and the district authorities is key, in our view
– A lack of initiative from the state governments in expediting land acquisitions
Forest approvals
– Most of the mines are located on forest land and converting forest land to other uses is
a very lengthy and tedious process (it takes from five-to-seven years)
– Applications have to go pass over at least 52 desks to receive approval

25

Reasons for captive-coal-mine development delays
Environment approvals
The process is very academic in nature
A lack of on-the-ground experience for those responsible for approvals
No set standards for obtaining the approvals; it comes down to the interpretation of the
individuals responsible
A ‘public hearing’ can be the most difficult part of the environment clearances for a
miner as all stakeholders involved are party to the decision-making process of
providing the approval
Joint allocation (an obstacle to development that accounts for on 20%
of total captive allocation)
Some 44 captive mines with geological reserves of more than 12bn tonnes have been
allotted jointly
There has been no consultation among the various developers involved
Differences in the financial status (a lack of financial strength for the joint-venture
partner) and objectives and timelines for the mines use by the developers
26

A step in the right direction

The MOEF has demarcated clearly the no-go areas (require approval from the prime minister’s
office). We expect this to speed up the process of obtaining approvals, which is currently the
biggest hurdle to developing captive mines.

27

Coal washeries
India coal has a high ash content (30-45%, compared with 15-20% for that
from countries such as Australia, South Africa, the US, and Indonesia).
The cleaning of coal (coal beneficiation) assumes an importance from the
environmental and long-distance transportation point of view.
There is an emphasis on coal washing, because the MOEF and the India
Government require that washed coal be used for power plants.
After 22m t.p.a. of coal is washed, the ash content is 34-38% and 4-4.5m
t.p.a. is rejected as the ash content is 57-62%.
Handling such a large rejected amount in an environmentally-friendly
manner is one of the biggest challenges faced by the coal-washery
operators.
In coal-beneficiation plants, 15-20% of the coal is rejected.

29

Coal washeries
At the end of the 1990s, the MOEF recommended that power plants located in
urban/sensitive areas and those located more than 1,000km from the pit head
should use coal with an ash content of less than 34%.
This percentage was fixed after studies undertaken by DuetscheMortanConsult
(Germany) and Mott. Macdonald (UK) indicated that when India coal was cleaned to
a level where the ash content was 34%, it retained in general 95% or more of its
energy.
The mining and power companies have resisted the implementation of the
recommendations as the transportation costs do not offset the incremental costs
incurred from washing the coal.

30

Coal washeries – economics

Capex for setting up 1m tonnes of capacity – Rs100-150m.

Coal-washing costs.
– Power – Rs90-100/tonne
– Cement – Rs100-150/tonne
– Sponge iron – Rs150-170/tonne
– Steel – Rs250-300/tonne

The existing capacity-utilisation rate on an aggregate basis is
60%.

31

High ash content – the need for coal washing

India coal has a high ash content as it is supposed to have been formed
according to the drift theory.
In addition to the ash, there is dilution in the quality of coal due to mining
and related activities.
From 1970-71, open-cast mining accounted for only 20% of production.
Currently, about 85% of coal is produced through open-cast mining.
Due to dilution, the quality of coal (GCV) has been deteriorating.
– In the early 1960s the GCV was about 5,900 kcal/kg
– By the 1970s the GCV was about 5,250 kcal/kg
– Currently, the GCV is about 3,500 kcal/kg

32

Coal washeries in India

Existing coking coal washing capacity Existing non-coking coal washing capacity
Others
2.8% Others
Indo Unique Flame
TISCO 12.1% CIL
4.8%
15.9% 18.9%
JSPL
5.3%
DPL
4.5%

Bhatia Int
7.6%

SAIL
11.7%
CIL Aryan
65.1% Global coal
4.5% 30.0%

Gupta
Source: Ministry of Coal 16.9% Source: Ministry of Coal

Aryan Coal (Not listed) is the largest player in India’s coal-washery business with an operational
capacity of 32m t.p.a., which will be scaled up to 58m t.p.a. by 2012 (including subsidiaries and capacity
under construction).
33

Geographic spread of the coal washeries
Spread of coal washeries by state

Uttar Pradesh Andhra Pradesh
Orissa 4.0% 3.6%
6.7%

Chhattisgarh
33.6%

Maharashtra
36.9%

MP Jharkhand
0.3% 14.9%


34

Issues faced by the coal washeries

The availability of basic infrastructure: land, water, and power.
The disposal of rejected coal.
– The availability of land for setting up washeries
– Cleaning coal to lower its ash content results in a loss of heat value from the rejected
coal, ie, the quantity of rejected coal currently is far in excess of the ash percentage.
Maintaining the quality of clean coal: there are no controls on the quality of
the input coal.
The development of reliable and accurate sensors to monitor coal quality.
Cleaning and dewatering of ultra-fine coal.
The desulphurisation of high-sulphur coal. The application of dry-coal
beneficiation processes for arid regions.

35

Hurdles
The development of coal washeries in India has not kept pace with the
rise in demand for coal.
– Assurances on the supply of quantity and the quality of coal (both physical and chemical
from the linked source)
– The availability of land for setting up washeries
– The availability of land for the disposal of washery waste, ie, rejected coal
– Access to the necessary infrastructure, such as power, water, and railway sidings

The sourcing of coal from one company (CIL mostly) and having it
washed by another agency has inherent risks.
— Adds to the cost of fuel, not passed through for regulated tariffs
— Private capacity that is set up already
— As a result of the possibility of the illicit transfer of coal between the coal-washing
companies and the coal suppliers, CIL would record a loss

36

Annexure I
The Red Corridor
An impoverished region in the east of India that experiences considerable Naxalite Maoist militant activity.

Source: Wikimedia Commons

37

Annexure II
Drift theory
This theory suggests that plant material was transported by stream action
from their place of growth and deposited in places such as lakes or the sea
like other sediment. The coal seams of India are of drift origin. The drift
theory may be summarised as follows.
– The plant material from the coal forest was transported by water and deposited in
lakes or the sea just like other sediment
– During transportation the various materials were sorted out as usual, in accordance
with their specific gravities.
– Pure coal seams were formed in places where only the lightest material (plant
material) had access
– A stream with shale bands was formed in places where a temporary change in the
water currents and hence the nature of sediment occurred
– Rapid and frequent oscillatory earth movements gave rise to several coal seams, one
above the other, separated by sediment
38

Appendix – coal washeries
Pre-dominant separating principles.
– Separation based on the differences in the relative density (RD) of coal and the
associated mineral matter; pure coal has an RD of about 1.3 and associated mineral
matter commonly has an RD of more than 2.2
– Separation based on differences in the surface properties of coal and the associated
mineral matter; coal is hydrophobic, while the associated mineral matter is generally
hydrophilic
Pre-dominant processes.
– Heavy/dense-media separation – based on simulating the effect of using a liquid of
appropriate density to effect a float/sink separation of coal from the associated mineral
matter
– Jig washing – a process that relies on the pulsation of water through the particle bed to
stratify particles of different density. Higher-RD shale particles form the lower layers,
and are separated from the clean coal by use of a shale-discharge system

39

DISCLAIMER
This publication is produced by Daiwa Securities Capital Markets Co. Ltd. and/or its non-U.S. affiliates, and distributed by Daiwa Securities Capital Markets Co. Ltd. and/or its non-U.S. affiliates, except to the extent expressly provided herein. This publication and the contents hereof are intended for information purposes only, and may be subject to
change without further notice. Any use, disclosure, distribution, dissemination, copying, printing or reliance on this publication for any other purpose without our prior consent or approval is strictly prohibited. Neither Daiwa Securities Capital Markets Co. Ltd. nor any of its respective parent, holding, subsidiaries or affiliates, nor any of its respective
directors, officers, servants and employees, represent nor warrant the accuracy or completeness of the information contained herein or as to the existence of other facts which might be significant, and will not accept any responsibility or liability whatsoever for any use of or reliance upon this publication or any of the contents hereof. Neither this
publication, nor any content hereof, constitute, or are to be construed as, an offer or solicitation of an offer to buy or sell any of the securities or investments mentioned herein in any country or jurisdiction nor, unless expressly provided, any recommendation or investment opinion or advice. Any view, recommendation, opinion or advice expressed in
this publication may not necessarily reflect those of Daiwa Securities Capital Markets Co. Ltd., and/or its affiliates nor any of its respective directors, officers, servants and employees except where the publication states otherwise. This research report is not to be relied upon by any person in making any investment decision or otherwise advising with
respect to, or dealing in, the securities mentioned, as it does not take into account the specific investment objectives, financial situation and particular needs of any person.
Daiwa Securities Capital Markets Co. Ltd., its parent, holding, subsidiaries or affiliates, or its or their respective directors, officers and employees from time to time have trades as principals, or have positions in, or have other interests in the securities of the company under research including derivatives in respect of such securities or may have also
performed investment banking and other services for the issuer of such securities. The following are additional disclosures.
Japan
Daiwa Securities Capital Markets Co. Ltd and Daiwa Securities Group: Daiwa Securities Capital Markets Co. Ltd and Daiwa Securities Group: Daiwa Securities Capital Markets Co. Ltd is a subsidiary of Daiwa Securities Group.
Investment Banking Relationship: Within the preceding 12 months, The Affiliates of Daiwa Securities Capital Markets Co. Ltd.* has lead-managed public offerings and/or secondary offerings (excluding straight bonds) of the securities of the following companies: China Zhongwang Holdings Ltd (1333 HK); Sundart International Holdings (2288 HK);
China Automation Group (569 HK); China Kangda Food Co Ltd (834 HK); Glorious Property (845 HK); Tong Yang Life (082640 KS); China Kangda Food Co Ltd (CKANG SP); Great Group Co., Ltd (GGH SP); Patel Engineering (PEC IN); Greens Holdings Ltd (1318 HK); China High Precision Automation Group (591 HK); Mingfa Group (846 HK);
Fantasia Holding Group (1777 HK); Hontex International Holding (946 HK).
*Affiliates of Daiwa Securities Capital Markets Co. Ltd. for the purposes of this section shall mean any one or more of:
• Daiwa Capital Markets Hong Kong Limited
• Daiwa Capital Markets Singapore Limited
• Daiwa Capital Markets Australia Limited
• Daiwa Capital Markets India Private Limited
• Daiwa-Cathay Capital Markets Co., Ltd.
• Daiwa Securities Capital Markets Co. Ltd., Seoul Branch
Hong Kong
This research is distributed in Hong Kong by Daiwa Capital Markets Hong Kong Limited (“DHK”) which is regulated by the Hong Kong Securities and Futures Commission. Recipients of this research in Hong Kong may contact DHK in respect of any matter arising from or in connection with this research.
Ownership of Securities: For “Ownership of Securities” information, please visit BlueMatrix disclosure Link at http://www2.us.daiwacm.com/report_disclosure.html.
Investment Banking Relationship: For “Investment Banking Relationship”, please visit BlueMatrix disclosure Link at http://www2.us.daiwacm.com/report_disclosure.html.
Relevant Relationship (DHK): DHK may from time to time have an individual employed by or associated with it serves as an officer of any of the companies under its research coverage.
DHK market making: DHK may from time to time make a market in securities covered by this research.
Singapore
This research is distributed in Singapore by Daiwa Capital Markets Singapore Limited and it may only be distributed in Singapore to accredited investors, expert investors and institutional investors as defined in the Financial Advisers Regulations and the Securities and Futures Act (Chapter 289), as amended from time to time. By virtue of distribution
to these category of investors, Daiwa Capital Markets Singapore Limited and its representatives are not required to comply with Section 36 of the Financial Advisers Act (Chapter 110) (Section 36 relates to disclosure of Daiwa Capital Markets Singapore Limited’s interest and/or its representative’s interest in securities). Recipients of this research in
Singapore may contact Daiwa Capital Markets Singapore Limited in respect of any matter arising from or in connection with the research.
Australia
This research is distributed in Australia by Daiwa Capital Markets Stockbroking Limited and it may only be distributed in Australia to wholesale investors within the meaning of the Corporations Act. Recipients of this research in Australia may contact Daiwa Capital Markets Stockbroking Limited in respect of any matter arising from or in connection
with the research.
Ownership of Securities: For “Ownership of Securities” information, please visit BlueMatrix disclosure Link at http://www2.us.daiwacm.com/report_disclosure.html.
India
This research is distributed by Daiwa Capital Markets India Private Limited (DAIWA) which is an intermediary registered with Securities & Exchange Board of India. This report is not to be considered as an offer or solicitation for any dealings in securities. While the information in this report has been compiled by DAIWA in good faith from sources
believed to be reliable, no representation or warranty, express of implied, is made or given as to its accuracy, completeness or correctness. DAIWA its officers, employees, representatives and agents accept no liability whatsoever for any loss or damage whether direct, indirect, consequential or otherwise howsoever arising (whether in negligence or
otherwise) out of or in connection with or from any use of or reliance on the contents of and/or omissions from this document. Consequently DAIWA expressly disclaims any and all liability for, or based on or relating to any such information contained in or errors in or omissions in this report. Accordingly, you are recommended to seek your own legal,
tax or other advice and should rely solely on your own judgment, review and analysis, in evaluating the information in this document. The data contained in this document is subject to change without any prior notice DAIWA reserves its right to modify this report as maybe required from time to time. DAIWA is committed to providing independent
recommendations to its Clients and would be happy to provide any information in response to any query from its Clients. This report is strictly confidential and is being furnished to you solely for your information. The information contained in this document should not be reproduced (in whole or in part) or redistributed in any form to any other person.
We and our group companies, affiliates, officers, directors and employees may from time to time, have long or short positions, in and buy sell the securities thereof, of company(ies) mentioned herein or be engaged in any other transactions involving such securities and earn brokerage or other compensation or act as advisor or have the potential
conflict of interest with respect to any recommendation and related information or opinion. DAIWA prohibits its analyst and their family members from maintaining a financial interest in the securities or derivatives of any companies that the analyst cover. This report is not intended or directed for distribution to, or use by any person, citizen or entity
which is resident or located in any state or country or jurisdiction where such publication, distribution or use would be contrary to any statutory legislation, or regulation which would require DAIWA and its affiliates/ group companies to any registration or licensing requirements. The views expressed in the report accurately reflect the analyst’s personal
views about the securities and issuers that are subject of the Report, and that no part of the analyst’s compensation was, is or will be directly or indirectly, related to the recommendations or views expressed in the Report. This report does not recommend to US recipients the use of Daiwa Capital Markets India Private Limited or any of its non – US
affiliates to effect trades in any securities and is not supplied with any understanding that US recipients will direct commission business to Daiwa Capital Markets India Private Limited.
Taiwan
This research is distributed in Taiwan by Daiwa-Cathay Capital Markets Co., Ltd and it may only be distributed in Taiwan to institutional investors or specific investors who have signed recommendation contracts with Daiwa-Cathay Capital Markets Co., Ltd in accordance with the Operational Regulations Governing Securities Firms Recommending
Trades in Securities to Customers. Recipients of this research in Taiwan may contact Daiwa-Cathay Capital Markets Co., Ltd in respect of any matter arising from or in connection with the research.
United Kingdom
This research report is produced by Daiwa Securities Capital Markets Co., Ltd and/or its affiliates and is distributed by Daiwa Capital Markets Europe Limited in the European Union, Iceland, Liechtenstein, Norway and Switzerland. Daiwa Capital Markets Europe Limited is authorised and regulated by The Financial Services Authority (“FSA”) and is a
member of the London Stock Exchange, Chi-X, Eurex and NYSE Liffe. Daiwa Capital Markets Europe Limited and its affiliates may, from time to time, to the extent permitted by law, participate or invest in other financing transactions with the issuers of the securities referred to herein (the “Securities”), perform services for or solicit business from such
issuers, and/or have a position or effect transactions in the Securities or options thereof and/or may have acted as an underwriter during the past twelve months for the issuer of such securities. In addition, employees of Daiwa Capital Markets Europe Limited and its affiliates may have positions and effect transactions in such securities or options and
may serve as Directors of such issuers. Daiwa Capital Markets Europe Limited may, to the extent permitted by applicable UK law and other applicable law or regulation, effect transactions in the Securities before this material is published to recipients.
This publication is intended for investors who are not Retail Clients in the United Kingdom within the meaning of the Rules of the FSA and should not therefore be distributed to such Retail Clients in the United Kingdom. Should you enter into investment business with Daiwa Capital Markets Europe’s affiliates outside the United Kingdom, we are
obliged to advise that the protection afforded by the United Kingdom regulatory system may not apply; in particular, the benefits of the Financial Services Compensation Scheme may not be available.
Daiwa Capital Markets Europe Limited has in place organisational arrangements for the prevention and avoidance of conflicts of interest. Our conflict management policy is available at http://www.uk.daiwacm.com/about-us/corporate-governance-and-regulatory. Regulatory disclosures of investment banking relationships are available at
http://www.daiwausa.com/.
Germany
This document has been approved by Daiwa Capital Markets Europe Limited and is distributed in Germany by Daiwa Capital Markets Europe Limited, Niederlassung Frankfurt which is regulated by BaFin (Bundesanstalt fuer Finanzdienstleistungsaufsicht) for the conduct of business in Germany.
Dubai
This document has been distributed by Daiwa Capital Markets Europe Limited, Dubai Branch. Related financial products or services are intended only for professional clients and no other person should act upon it. Daiwa Capital Markets Europe Limited is duly licensed and regulated by the Dubai Financial Services Authority.
United States
This report is distributed in the U.S. by Daiwa Capital Markets America Inc. (DCMA). It may not be accurate or complete and should not be relied upon as such. It reflects the preparer’s views at the time of its preparation, but may not reflect events occurring after its preparation; nor does it reflect DCMA’s views at any time. Neither DCMA nor the
preparer has any obligation to update this report or to continue to prepare research on this subject. This report is not an offer to sell or the solicitation of any offer to buy securities. Unless this report says otherwise, any recommendation it makes is risky and appropriate only for sophisticated speculative investors able to incur significant losses.
Readers should consult their financial advisors to determine whether any such recommendation is consistent with their own investment objectives, financial situation and needs. This report does not recommend to U.S. recipients the use of any of DCMA’s non-U.S. affiliates to effect trades in any security and is not supplied with any understanding
that U.S. recipients of this report will direct commission business to such non-U.S. entities. Unless applicable law permits otherwise, non-U.S. customers wishing to effect a transaction in any securities referenced in this material should contact a Daiwa entity in their local jurisdiction. Most countries throughout the world have their own laws
regulating the types of securities and other investment products which may be offered to their residents, as well as a process for doing so. As a result, the securities discussed in this report may not be eligible for sales in some jurisdictions. Customers wishing to obtain further information about this report should contact DCMA: Daiwa Capital
Markets America Inc., Financial Square, 32 Old Slip, New York, New York 10005 (telephone 212-612-7000).
Ownership of Securities: For “Ownership of Securities” information please visit BlueMatrix disclosure Link at http://www2.us.daiwacm.com/report_disclosure.html.
Investment Banking Relationships: For “Investment Banking Relationships” please visit BlueMatrix disclosure link at http://www2.us.daiwacm.com/report_disclosure.html.
DCMA Market Making: For “DCMA Market Making” please visit BlueMatrix disclosure link at http://www2.us.daiwacm.com/report_disclosure.html.

DISCLAIMER (Cont’d)
Research Analyst Conflicts: For updates on “Research Analyst Conflicts” please visit BlueMatrix disclosure link at http://www2.us.daiwacm.com/report_disclosure.html. The principal research analysts who prepared this report have no financial interest in securities of the issuers covered in the report, are not (nor are any members of their household)
an officer, director or advisory board member of the issuer(s) covered in the report, and are not aware of any material relevant conflict of interest involving the analyst or DCMA, and did not receive any compensation from the issuer during the past 12 months except as noted: no exceptions.
Research Analyst Certification: For updates on “Research Analyst Certification” and “Rating System” please visit BlueMatrix disclosure link at http://www2.us.daiwacm.com/report_disclosure.html. The views about any and all of the subject securities and issuers expressed in this Research Report accurately reflect the personal views of the research
analyst(s) primarily responsible for this report (or the views of the firm producing the report if no individual analysts[s] is named on the report); and no part of the compensation of such analyst(s) (or no part of the compensation of the firm if no individual analyst[s)] is named on the report) was, is, or will be directly or indirectly related to the specific
recommendations or views contained in this Research Report.
The following explains the rating system in the report as compared to relevant local indices, based on the beliefs of the author of the report.
"1": the security could outperform the local index by more than 15% over the next six months.
"2": the security is expected to outperform the local index by 5-15% over the next six months.
"3": the security is expected to perform within 5% of the local index (better or worse) over the next six months.
"4": the security is expected to underperform the local index by 5-15% over the next six months.
"5": the security could underperform the local index by more than 15% over the next six months.
Additional information may be available upon request.

Japan - additional notification items pursuant to Article 37 of the Financial Instruments and Exchange Law
(This Notification is only applicable where report is distributed by Daiwa Securities Capital Markets Co. Ltd.)
If you decide to enter into a business arrangement with us based on the information described in materials presented along with this document, we ask you to pay close attention to the following items.
In addition to the purchase price of a financial instrument, we will collect a trading commission* for each transaction as agreed beforehand with you. Since commissions may be included in the purchase price or may not be charged for certain transactions, we recommend that you confirm the commission for each transaction.
In some cases, we may also charge a maximum of ¥ 2 million (including tax) per year as a standing proxy fee for our deposit of your securities, if you are a non-resident of Japan.
For derivative and margin transactions etc., we may require collateral or margin requirements in accordance with an agreement made beforehand with you. Ordinarily in such cases, the amount of the transaction will be in excess of the required collateral or margin requirements.
There is a risk that you will incur losses on your transactions due to changes in the market price of financial instruments based on fluctuations in interest rates, exchange rates, stock prices, real estate prices, commodity prices, and others. In addition, depending on the content of the transaction, the loss could exceed the amount of the collateral or
margin requirements.
There may be a difference between bid price etc. and ask price etc. of OTC derivatives handled by us.
Before engaging in any trading, please thoroughly confirm accounting and tax treatments regarding your trading in financial instruments with such experts as certified public accountants.
* The amount of the trading commission cannot be stated here in advance because it will be determined between our company and you based on current market conditions and the content of each transaction etc.
When making an actual transaction, please be sure to carefully read the materials presented to you prior to the execution of agreement, and to take responsibility for your own decisions regarding the signing of the agreement with us.
Corporate Name: Daiwa Securities Capital Markets Co. Ltd.
Financial instruments firm: chief of Kanto Local Finance Bureau (Kin-sho) No.109
Memberships: Japan Securities Dealers Association, Financial Futures Association of Japan

India Coal Sector Captive Mining Primer

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (20)

Similar to India Coal Sector Captive Mining Primer

Similar to India Coal Sector Captive Mining Primer (20)

India Coal Sector Captive Mining Primer