Aryan Coal::Takeaways Motilal Oswal Annual Global Investor Conferences

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Key Takeaways
ACB to boost coal washing capacity to 102mt by FY15
 A new policy putting restrictions on the ash content in coal to less than 34% is
expected to boost coal washing in India.
 Washed coal saves costs of transport and increases thermal coal efficiency.
 Over the years coal washing capacity has been in deficit and the Planning Commission
estimates coal washing demand of 502mt from the power sector.
 ACB, formerly known as Aryan Coal Benefications, has coal washing capacity of
65mt and is working to expand its capacity by 37.3mt. It plans to have a CAGR of
~16% to 102mt over the next three years with the commissioning of its project.
Backward integration strategy by way of equipment manufacturing
 In sync with its backward integration strategy, ACB fabricates clean coal equipment
including barrel washers and has installed capacity of 1,500tpa.
 Increased demand to set up more coal washeries would provide a strong domestic
growth opportunity.
Sponge iron capacity ~0.2mt a year
 ACB has sponge iron capacity of 165k tons a year and captive power capacity of
18MW.
Power generation capacity synergized by washery rejects
 ACB entered the power generation industry and has operational capacity of 63MW
(15MW wind, 30MW thermal plant based on coal rejects and 18MW on the waste
heat recovery mechanism).
 ACB highlighted its coal washery generates 20-30% of reject, which in a coal deficit
scenario, can help to generate power. This would provide continued supply of fuel
to the projects.
 The company has 400MW of power projects (based on a mix of coal and washery
rejects) under construction with EPC and financial closure in place. It plans to
commission the projects over FY12 and FY13.
 ACB is also working on ~3.7GW of thermal power projects.