INDIAN DOMESTIC COAL TRANSPORT LOGISITCS AND TECHNOLOGY

1. INDIAN DOMESTIC COAL TRANSPORT LOGISITCS AND TECHNOLOGY by Sid Sridhar Seabulk Systems Inc. Richmond, British Columbia, Canada & S. K. Grover

2. Geological Coal Resources – India (as on 31.3.2012) 1

3. Existing Domestic Coal Transport: Obstacles Conveying overland a practical solution for power plants adjacent to the coalfield, say distances on the order of about 50 km. MGR ideal for handling 5 million tes/an & above. Trucking requires road upgrades and vehicle fleets and could be a transport solution for distances up to 200 km, but is likely inefficient & costly for longer haul transport. Also a pollution hazard. Railways require upgrade including new trackage and rolling stock and supporting infrastructure and would be a transport solution for distances up to 2000 km. Railway gearing up to meet the challenge. 2

4. Test Case For Transport Logistics • Ideal case study – North Karanpura Coalfield (NK) • Expected Coal Resource over 12.5 billion tes • Production Capabilities > 250 million tes/an • Need for Multi-modal Transport Logistic such as Conveyor/Road/MGR/Rail may still be a challenge for Coal evacuation from NK • Innovative Solution – Slurry Pipeline Transport • For Plants 200 km or so with more than 5 million tes/an requirement • For Plants > 200 km with Higher tonnage over longer distance – supplement Indian Railway System specially on Dedicated Freight Corridor (DFC). At an appropriate location 30 to 40 million tes/an of coal may be loaded in DFC. We can have such concepts on DFC in future from this & other coalfields like IB, Talcher, MandRaigarh, Hasdeo etc. 3

5. Alternative Coal Transport: Slurry Pipelines • In consideration of the noted transportation obstacles , slurry pipelines are proposed as an alternative/supplement approach for Indian domestic coal transport. Slurry pipeline systems have some distinct advantages over existing transport infrastructures, including: • Practical for long haul distances of 200 km or longer • Secure enclosed transport isolated from the environment • Extensive technology exists to create slurry pipeline systems • Water can be recycled • Integrates coal beneficiation such as marginal ash reduction specially clay • Spontaneous combustion risks mitigated • Storage typically in tanks • Dewatered coal may be briquetted enabling trans-loading by rail 4

6. Slurry Pipeline Systems Slurry pipelines convey many commodities world wide including coal. 5

7. Coal : Slurry Pipeline Process • Process integration at certain stages of coal transportation improves overall delivery economics by enabling: • reduction of ash and impurities at the mine • pumping a fine coal slurry through an overland pipeline • coal storage in slurry tanks at the power plant or trans-load after briquetting • dewatering by centrifuge and hyperbaric filters yields over 99% recovery of coal from the slurry • Steam atmosphere drying and briquetting can enable re-handling as a dry bulk commodity. Briquettes are stable and not susceptible to spontaneous combustion. • Water is recyclable within the system and is not discharged to the environment. 6

8. Coal Slurry Production: Sizing Coal sizing, cage impaction example shown. 2 mm minus crushed coal sample. 7

9. Coal Slurry Production: Ash Reduction Cyclones are an example of technology that may be used to separate clay from fine coal. 8

10. Pipeline Terminus: Slurry Storage Tank storage of slurry coal depicted at a thermal power plant • Highlights: • hydraulic reclaim avoids the need for tank agitation • tank storage is more contained than open stockpiles • rain and wind dispersion of the product is avoided • slurry storage avoids spontaneous combustion risk 9

11. Dewatering and Drying: Coal Moisture Coal moisture and conventional dewatering and drying of fine coal. 10

12. Coal Briquetting: Rationale Dried hot filter cake is at risk of spontaneous combustion if stored for long but this can usually be avoided by briquetting which stabilizes the agglomeration. The agglomeration of fine coal filter cake into briquettes enables it to be handled and transported as a dry bulk material by conventional means or dried coal is not fed immediately. Briquettes are compacted at high pressure and therefore potentially denser than loose fine coal, this makes for more efficient transportation. Briquettes mitigate the creation and propagation of coal dust. 11

13. Coal Briquetting: Binders • Objective - Binderless Briquetting: • Binderless briquetting avoids the cost of expensive binders. • Important variabl13es for binderless briquetting of coal are: • Moisture content • Temperature • Compaction pressure • Particle size distribution • Coal properties • The system proposed herein pushes the moisture content, temperature and compaction pressure variables all in a direction favourable for briquette production. 12

14. Coal Briquetting: Variables Variables Influencing Binderless Briquetting: Moisture Content: Surface moisture and some inherent moisture is vaporized from the fine coal as it passes through the steam atmosphere of the fluidized bed drier. Temperature: Steam atmosphere drying occurs above the boiling point of water, typically at about 120° C, so the fine coal is rapidly heated. The dried fine coal is briquetted before it cools significantly so compaction takes place at an elevated temperature. Compaction Pressure: Pressure is high and maintained by roll compaction briquetting presses specially designed for hot product. 13

15. Coal Briquetting: Variables Particle Size Distribution: The PSD that is optimal for conveyance of coal by slurry may not be exactly the same as the PSD that is optimal for briquette production. PSD at 2 mm minus for coal slurry enables the material to be easily suspended in turbulent pipeline flow. Briquetting specialists estimate that this PSD is a possible for binderless briquette production, however, testing would be required to confirm. 14

16. Coal Briquetting: Production Double Roll Press Briquette Machine (Koppern Photo) A number of firms specialize in coal briquette production and have roll compaction presses designed for the purpose. 15

17. Coal Briquetting: Quality Quality Factors: Briquettes are typically pillow shaped and the size can be specified. Typical dimensions are 40 mm square pillow briquettes. A multitude of tests are available to assess the robustness of briquettes for handling as a conventional dry bulk material. Briquettes should avoid breakage during handling and storage and resist absorption of moisture. 16

18. Why Slurry Pipelines? • 1. Economics • Slurry pipelines have attractive economics for longer haul distances and large tonnage. • 2. Scalability • Slurry pipeline systems can be scaled with single pipes handling about 10 Mtpa of commodity. • 3. Implementable • The technology required to implement slurry pipeline systems exists and is with well established companies and with proven installations worldwide. 17

19. Why Slurry Pipelines? 4. Beneficiation The use of slurry systems and the use of fine coal integrates with existing beneficiation technologies. 5. High RecoveryThe system utilizes fine coal which means more coal recovery from the mine. 6. Ash Mitigation Ash is marginally reduced at the mine. 7. Isolation From the Environment The slurry system is fully enclosed from the environment, securely buried beneath the overland transport route and process water is recycled within the system without discharge to the environment. 18

20. Why Slurry Pipelines? 8. Spontaneous Combustion Mitigation Transport of coal as slurry and production of coal briquettes after drying avoids spontaneous combustion risk. 9. Power Plant Feed Dewatered and dried slurry filter cake can also be fed directly into the power plant. 10. Trans-loadable Commodity Briquettes are a stable beneficiated dry bulk fuel that can be trans-loaded by rail for example. 19

21. Example Transport System: Costs and Financial • Key assumptions: • Annual transport of 6 Mtpa briquettes at 25% TM • Coal sizing and scrubbing at the mine • Overland transport by 220 km long slurry pipeline • Positive displacement pumping • Coal slurry at 48% weight concentration • Slurry and return water pipe diameter 610 mm • Storage, reclaim, dewatering, drying, briquetting, stockpiling • 2. Static financial calculation and cost assumptions: • Costs million $USD • Interest rate 7% • Period 25 years • Fixed Asset IRR 12% • Depreciating Asset IRR 20% • All estimates are exclusive of import duties, brokerage or taxes 20

22. Example Slurry System: Costs and Financial * to exclude when no briquetting For plants about 200km away from coal source cost/te would be about USD 9.79 i.e. Rs. 525 without briquetting etc. & with briquetting the cost/te would be about USD 13.50 i.e. Rs. 725. Longer the distance, higher the tonnage more cost effective since terminal costs are high. 21

23. Implementation and Operation • The slurry pipeline proposal shown here has multiple systems to implement and operate, these include: • Coal sizing, slurry production and scrubbing • Overland slurry pipeline • Coal slurry storage and reclaim • Coal slurry dewatering and drying • Coal filter cake briquetting • Briquette stockpiling and reclaim & loading into Railway System 22

24. Implementation: Management • The scale and complexity of the type of integrated transportation system proposed is fairly significant. Successful implementation requires the management of a design/ build contractor or a joint venture team comprised of specialist firms in these key areas: • Coal preparation • Slurry pipeline • Dewatering and drying filter cakes upto 200/250 kms. • * Briquetting • * Materials handling and loading into railway wagons • * for various end users situated at long distance from Coal Source 23

25. Implementation: Bankability • A novel approach that integrates existing technologies. • Major technology suppliers are qualified companies with proven capability in their fields. • Studies and tests are required to refine the system design and assess issues and risks. • A tonnage guarantee would be required. • Implementation under the control of a design-build-operate contract for commodity transport from the mine to end users would enable a ‘take or pay’ contract model to be implemented – totally bankable. 24

26. Implementation: Business Plan • Tonnage guarantee required to support financial plan. • Coal handled on a rate per tonne basis. • Take or pay form of contract if project implemented as a single design-build-operate venture. • Operation subcontracted to regional firms. 25

27. Conclusions • Slurry pipelines used to transport Indian domestic coal: • Avoid the issues and bottlenecks existing transport systems face • Have high utilization of mine output as it uses fine coal • Transport a beneficiated coal product • Isolate the coal transport from the environment • Offer a competitive capital and operating cost in comparison to the alternatives • Can be implementable as a design-build-operate venture • Can be set up contractually to be bankable • Studies including coal testing is required to affirm feasibility and economics 26

28. Thank you Questions?