Indian Coal Markets – Challenges and Future Outlook in context of Power Sector By Mr. Arun Bhalla Chief Executive- Power Business Development Shree Cement Limited 28 th August 2013

O VERVIEW – E NERGY, C OAL, P OWER D EMAND & S UPPLY – S CENARIO - C OAL M ANAGING C OAL A VAILABILITY C ONCLUSION S EQUENCE B USINESS O VERWIEW – S HREE C EMENT L TD. 28 th August 2013

O VERVIEW – E NERGY, C OAL, P OWER Energy pivotal to the growth of country’s Economy. India’s robust and sustained growth has resulted in strong demand for clean and Economical Energy. Energy consumption reached level of 575 M.T.O.E (India 4 th largest energy consumer in the world) – increasing at CAGR of 8% C OAL – one of the major contributor of India’s energy basket. 5 th largest Reserves of C OAL in the world (284 BT) th August 2013

O VERVIEW cont… 3 rd largest Producer of Coal after US & China. C OAL supporting bulk of country’s Power capacity (223 G W - 57%, C OAL Fired) Dominance of C OAL as the fuel for power plants is to continue. India 5 th largest Electricity Market – 223 GW Installed Capacity. India suffers from major Power shortages th August 2013

Around 250 Million Citizens having no access to Electricity. Generating Capacity to reach 300 G W by (C OAL Fired Plants ~ 60%) C OAL shortages dragging growth of Power Sector/Economy. 100 G W of capacity addition under various stages of implementation – suffering due to C OAL shortages & 25GW-stranded. PLF of C OAL fired plants at 70% (March 2008 Plf at 79%) O VERVIEW th August 2013

O VERVIEW – E NERGY, C OAL, P OWER D EMAND & S UPPLY – S CENARIO - C OAL M ANAGING C OAL A VAILABILITY C ONCLUSION S EQUENCE B USINESS O VERWIEW – S HREE C EMENT L TD. 28 th August 2013

D EMAND & S UPPLY – S CENARIO - C OAL cont…. COAL Demand CAGR of > 6.5% over last 5 years (11 th Five Year Plan) COAL Production CAGR of 4.6% over last 5 years Shortage of COAL at 17% of total Demand (650MT/540MT/ import~100MT) Main Reason for shortages – Failure to Ramp up Production – “A Paradox of Scarcity in the Land of Plenty” COAL Demand by (12 th Five Year Plan) expected to reach 980MT COAL Production by estimated at 715MT (with Captive Mining ~ 795MT) – shortfall at 265MT/185MT Dependence on Imports to Rise th August 2013

D EMAND & S UPPLY – S CENARIO - C OAL Key challenges for sustainability of Power Sector is to manage COAL availability (Domestic/Import) 5. - India’s COAL Imports increased at a CAGR of 16% for to Imports account for 16% of Domestic COAL consumption in Year 2012 (7% in Year 2003) 28 th August 2013

O VERVIEW – E NERGY, C OAL, P OWER – Sectors D EMAND & S UPPLY – S CENARIO - C OAL M ANAGING C OAL A VAILABILITY C ONCLUSION S EQUENCE B USINESS O VERWIEW – S HREE C EMENT L TD. 28 th August 2013

Enhancing Domestic Production (R/P ratio 103) (Indonesia – 19, China- 31) OCM – contributing 90% of production; UGM – contributes 10% C OAL Product. Using Room & Pillar Technique (recovery 40%) vis-à-vis Long Wall Technique (recovery 80%) Policy Initiatives Single window Mechanism R & R policy Captive C OAL Mining JVs with Private Companies. M ANAGING C OAL A VAILABILITY cont… th August 2013

State Govt. partnering in development of C OAL sector. Incentivizing Investments in the Exploration/Infrastructure Development. Adoption of Technologies for Minimizing C OAL Consumption. Engaging of MOD’s (Mining Developers-cum-Operator) Rationalization of C OAL Linkages. Use of Washed C OAL. C OAL Blending. Imports. M ANAGING C OAL A VAILABILITY th August 2013

O VERVIEW – E NERGY, C OAL, P OWER – Sectors D EMAND & S UPPLY – S CENARIO - C OAL M ANAGING C OAL A VAILABILITY C ONCLUSION S EQUENCE B USINESS O VERWIEW – S HREE C EMENT L TD. 28 th August 2013

Power Sector growth, the main driver for the Country’s Economic Growth. ( C OAL sector contributing 1.5% of India’s GDP) C OAL Sector is critical to the Power Sector growth. C OAL Sector – Reforms lagging. Policy makers are unable to institutionalize, unbottling of bottlenecks in the development of C OAL Sector. Mining Planning not getting the required focus. Opening the sector for Private participants. Infrastructure development seamless synchronization of Rail, Road, Inland subways and Port Infrastructure is the need of the hour. C ONCLUSION th August 2013

O VERVIEW – E NERGY, C OAL, P OWER – Sectors D EMAND & S UPPLY – S CENARIO - C OAL M ANAGING C OAL A VAILABILITY C ONCLUSION S EQUENCE B USINESS O VERWIEW – S HREE C EMENT L TD. 28 th August 2013

B USINESS O VERVIEW – S HREE C EMENT L TD. Focused on Cement Manufacturing and Power Generation (Thermal) Cement Capacity 13.5 MTPA Single location largest Kiln capacity in the world. Installed Power Generation Capacity of 560 MW (Captive 260MW + Merchant IPP 300MW). 2 nd Largest producer of Green Power (WHR) of 43MW. Mining Planning not getting the required focus. Power Trading Division- (Category-I Trading Licensee) Trading 3 rd party portfolio including trading on Power Exchanges th August 2013

C EMENT O VERVIEW Capacity grew at a CAGR of 29% during FY07-FY12 Production doubled during FY07-FY12 Production doubled during FY07-FY th August 2013

P OWER O VERVIEW Installed Capacity doubled by adding 300 MW of Merchant Power Capacity in FY th August 2013

G LOBAL A LLAINCE First Indian Cement Company to join Cement Sustainability Initiative of World Business Council of Sustainable Development. Member of Cement Sector Task Force of APP-7, formed by Govt. of India, USA, China, Japan, Korea, Canada and Australia. Global Reporting Initiative to improve information sharing on Environment and Social issues. Endorsed the Global Roundtable Joint Statement on Climate Change to discuss issues for shaping public policy on climate change. 12.

T HANK Y OU ARUN BHALLA (M) – / –