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Friday, 07 October 11
MINING REGULATIONS , OBSTACLES AND GROWTH : INDIA VS INDONESIA - SUNIL K KUMBHAT
 COALspot.com - The Govt of India has passed long pending Mines & Minerals (Regulation and Development) Bill, 2011, which seeks to replace 1957 act governing mining sector .The bill is now subject to final approval by Indian Parliament.
Indian New Mining Bill
This landmark draft bill that allows local people to get the financial benefits of mining activities. Bill smoothens land acquisitions through higher compensation to people displaced and simplifies relief and rehabilitation issues.
Inadequate compensation and the fear of loss of livelihood have often lead to violent protests by people displaced by mining and related industries, blocking acquisitions of land for several upcoming Mega projects.
The bill, requires coal mining companies to pay 26 per cent of their Profit after Tax to “district mineral foundations” (DMFs), to the district administrations. Funds collected by district collectors will be spent on development projects for the locals, mainly tribal communities residing in the mining areas. In the case of non-coal miners 100 % payment equivalent to royalty required to be paid to state government to affected persons.
If the bill is enacted (which is a big question mark), an estimated amount of US$ 2.04 billion (approx) will be generated per year from miners and an average amount of US$ 36.75 to $ 40.84 Million will be distributed among District Mining Foundations of 60 mineral rich districts. Undoubtedly, it’s a landmark move, to provide justice to scores of tribals who have lost and continue to lose, their land and livelihood across the country due to mining activities.
It is expected that this bill be strong enough to crush the biggest devil of all - the ill-legal mining.
The Bill addresses the burning issue of illegal mining, as it provides for setting up a regulatory authority (National Mining Regulatory Development Authority) to govern the sector. It will have powers to investigate and prosecute the offenders. The authority would also be empowered to look into the cases of organised illegal mining.
This move may not attract private investment in the mining sector, which is badly needed. The mining activity will come down so also production, which Indian economy cannot afford.
The move is all set to push down profits of major mining and power companies, mainly Coal Indian Ltd. Coal India, which will be hit the most as it will have to share 26% of its profit, which means lesser funds available for further mine development for growth, higher production, and distribution of dividends.
Coal India will be left with no Choice but to pass the burden to its customers.
Environmental Consciousness
The environmental impact of mining operations in India is under sharp scrutiny than many other countries. Environmental consciousness is increasing in India.
If environmental issues & challenges are left unmitigated, it will inevitably affect the poorest, rendering trade unsustainable. The moot point is how to ensure the benefits of trade percolate down to the bottom. There is a worldwide increase in globalised economic activity, huge environmental degradation and widening income inequality. So achieving sustainable development will critically depend on proactive resolution of the issues at domestic and international levels.
Never before India has such a high demand for coal, so also environmental consciousness been so high. Both are legitimate & serious issues But the solution is not to clamp down on coal production. India’s soaring energy need is vital for its industrial growth.
India's increasing energy needs are being hampered by regulatory delays for coal mining projects. Sometime back Govt of India (Environment and Forests Ministry) announced many Coal fields as “NO –GO” zones, which is seriously effecting Coal mining projects and Coal production.
In last 4-5 few years there is huge demand of thermal Coal and considering the planned Capacity building in Energy sector there would be hue and cry for Coal demand unless there is substantial increase of Coal Production in India.
Although India is considered as fifth-largest coal reserves in the world much of it is under protected forests and so mining projects face fierce environmental scrutiny.
There is so much hue and cries over the forest conservation. Coal is nature's gift & treasure and coal mines can’t be shifted to another area due to regulatory issues. There is a urgent need to re-examine the regulations and policies associated with exploration and production. Various government regulations concerning forestry and environmental restrictions are hindering mine development. Unless such bottlenecks are addressed, growth in domestic coal production will not match the higher demand.
Independent Regulator
The long term growth of the coal sector in India requires a confident and renewed mindset in developing coal resources through decontrol of the Coal sector, establishment of an independent regulator.
The time has come for Govt of India to establish technically-competent and independent regulators for coal, iron ore and other minerals. The regulators should draw up the necessary regulations and enforcing them strictly, de-politicise the sector and minimise violations of environmental laws and the rights of Local peoples.
Government thru its regulator should ensure that its policy framework attracts large, organised, technologically well-equipped and socially - and environmentally-conscious mining companies which are more susceptible to public pressure and less prone to corrupt and illegal business operating practices. Such companies could effectively develop those mineral reserves which lie either under forest cover or lands populated by local peoples without causing environmental or social damage.
The regulator will have the responsibility of allocating coal mines, price fixation and revision; and performance standards-setting and enforcement, pricing of coal washing, washed coal and by-products generated during the process among other things.
The magnitude of growth in power generation in India will necessarily mean that coal demand will remain very strong. Coal will remain life line for Indian economy for coming many decades till identifying an alternative source that can match coal in its accessibility, availability and affordability in the context of scale of capacity addition required in India .
Ban on Export of Unprocessed Coal from Indonesia
Recently Govt of Indonesia announced its plan to ban the export of unprocessed and unrefined Coal / Mining products from January 2014.
In its current form, the Draft Value Added Regulation envisages that, starting from January 2014, it will no longer be possible to export Coal from Indonesia having calorific value of 5700 kcal/kg GAD or below.
The proposed ban on exports of coal under the 5,700-kcal/kg will change the dynamics of the global thermal coal market, which has seen spiraling demand from China and India. Such a ban will have a substantial impact on the thermal coal market, as large amounts of low-quality coal from Indonesia are exported to India and China.
Coal quality of 4500 and 5,700 kcal/kg, constitutes a significant portion of exports out of Indonesia and, considering the country accounts for about 30 per cent of the global thermal coal supply, an export ban could reduce worldwide supplies by at least 10-15 per cent.
India is already one of the largest buyers of coal from Indonesia, and continue to maintain this position considering the growth in domestic demand and stagnating production of major miners such as Coal India Ltd. There will be an overall impact on the Indian power sector, as currently about 60 per cent of the total thermal coal imports are coming from Indonesia.
The Draft Regulation raises many challenging issues including, most importantly, how appropriate and realistic is a tough domestic processing and refining obligation in a country like Indonesia. The 5700 kcal/kg GAD minimum upgrading requirement only makes sense if, by 2014, coal upgrading will be a proven technology, widely available to all Indonesian producers of low grade coal.
In the absence of widespread coal upgrading cost effective technology, this could prevent the export from Indonesia of up to 150-175 million metric tons of low grade coal and Govt’s true policy objectives behind the proposed Draft Value Added Regulation requires detailed & critical analysis.
Role of Indonesia
As the situation stands today, India could become the world’s biggest thermal coal importer by 2015 and Indonesia would be one of the Countries to take care of bulk of coal requirement.
India is today one of the fastest growing economies and also has a shortage of power supply. Indonesia is one of the peaceful countries with huge natural resources and exporting coal to many countries for use in power plants for generating energy but it is paradoxical that Indonesia is short of energy. Many Indian companies are capable of sharing power technology and setting up mega power plants in Indonesia
Indonesian private companies can buy equity stakes in India’s power plants in exchange for long-term coal supply. Since India is today one of the fastest growing economies and also has a shortage of power supply then such deals can be beneficial to both parties
Indonesia requires huge investment from foreign investors in infrastructure, Power Generation, Oil & Gas exploration, telecom sector, Port and Rapid transport system. So it is essential to have transparency in all regulations, Legal system and improvement in corporate Governance.
Indonesia's mining industry is undergoing a regulatory overhaul which may weaken the operating health and financial performance of many domestic mining companies.
Besides increased operating uncertainty the new regulations of recent past & proposed may also make the mining industry less attractive to foreign investors. lack of transparency in the legal process and the risk of regulatory duplication and inconsistencies will continue to act as deterrents to substantial investment ,specially foreign direct investments (FDI).
While developed economies struggle with global financial crisis and slowdown of demand, Indonesia (together China and India) could be the consumer market for the future. Similar to China and India, urbanisation is an important driver of Indonesia’s growth. Indonesia is ready to rise in the world economic hierarchy and take its place alongside China and India. Indonesia is now perceived as one of new Asian Tigers , even altering the term of BRIC into BRIIC ( Brazil , Russia , Indonesia , India and China)
Whether BRIC will become BRIIC is yet to be seen. Indonesia is the third fastest growing economy in Asia, behind India and China. It has passed through the economic crisis with firmness unmatched elsewhere in the region and indeed in the world. (cs)
Views expressed herein are personal views of the author and not that of COALspot.com.
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Thursday, 20 October 11
CAPESIZE - TUBARAO /QINGDAO BEING FIXED AT STRONG US$ 29.75 PMT
Handy
The Atlantic market is quite steady, and market seems to be around the same levels as last week. Fewer fixtures reported though. ...
Thursday, 20 October 11
BRACKEN INTERNATIONAL MINING LISTS ON FRANKFURT STOCK EXCHANGE
Press Release - Bracken International Mining (Code:1BM) listed on the Deutsche Börse’s Frankfurt Stock Exchange today at €1.00 with ...
Thursday, 20 October 11
CAPESIZES, SUPRAMAXES LEAD GAINS FOR DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Struggling to find additional support, but still managing to post gains, the dry bulk market has stabilized itself on higher levels again yesterday, ...
Wednesday, 19 October 11
METALLURGICAL COAL PRICES TO DROP BELOW US$240/TONNE - WOOD MACKENZIE
Wood Mackenzie Says Metallurgical Coal Prices to Drop Below US$240/tonne by Q4 2012 But Long-term Demand Fundamentals Remain Robust
Wood Mackenzi ...
Wednesday, 19 October 11
SUPRAMAX MARKET WAS VERY FIRM LAST WEEK - BRS
With all sectors contributing positively, the BDI ended the week at 2,173 points (+8.6%), its highest level so far in 2011. The BCI stood at 3,587 ( ...
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Showing 5021 to 5025 news of total 6871 |
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- Straits Asia Resources Limited - Singapore
- Trasteel International SA, Italy
- Iligan Light & Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Attock Cement Pakistan Limited
- Heidelberg Cement - Germany
- Kartika Selabumi Mining - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coastal Gujarat Power Limited - India
- Australian Coal Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Baramulti Group, Indonesia
- Planning Commission, India
- Bukit Makmur.PT - Indonesia
- New Zealand Coal & Carbon
- The Treasury - Australian Government
- Indogreen Group - Indonesia
- Australian Commodity Traders Exchange
- Orica Australia Pty. Ltd.
- Oldendorff Carriers - Singapore
- Interocean Group of Companies - India
- Bulk Trading Sa - Switzerland
- Madhucon Powers Ltd - India
- Standard Chartered Bank - UAE
- AsiaOL BioFuels Corp., Philippines
- Kumho Petrochemical, South Korea
- Posco Energy - South Korea
- McConnell Dowell - Australia
- Gujarat Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Toyota Tsusho Corporation, Japan
- Indonesian Coal Mining Association
- Bukit Asam (Persero) Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Deloitte Consulting - India
- Vizag Seaport Private Limited - India
- PTC India Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Wood Mackenzie - Singapore
- International Coal Ventures Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Vedanta Resources Plc - India
- Tamil Nadu electricity Board
- Edison Trading Spa - Italy
- Parry Sugars Refinery, India
- Savvy Resources Ltd - HongKong
- IEA Clean Coal Centre - UK
- Altura Mining Limited, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Africa Commodities Group - South Africa
- PNOC Exploration Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Formosa Plastics Group - Taiwan
- The State Trading Corporation of India Ltd
- Siam City Cement PLC, Thailand
- SN Aboitiz Power Inc, Philippines
- Barasentosa Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Transport, Egypt
- Timah Investasi Mineral - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Merrill Lynch Commodities Europe
- Petrochimia International Co. Ltd.- Taiwan
- Singapore Mercantile Exchange
- Renaissance Capital - South Africa
- Tata Chemicals Ltd - India
- LBH Netherlands Bv - Netherlands
- Pendopo Energi Batubara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Latin American Coal - Colombia
- Carbofer General Trading SA - India
- GMR Energy Limited - India
- Central Java Power - Indonesia
- Uttam Galva Steels Limited - India
- Lanco Infratech Ltd - India
- Chettinad Cement Corporation Ltd - India
- Riau Bara Harum - Indonesia
- Medco Energi Mining Internasional
- Sojitz Corporation - Japan
- Directorate General of MIneral and Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Economic Council, Georgia
- GVK Power & Infra Limited - India
- Dalmia Cement Bharat India
- Global Coal Blending Company Limited - Australia
- Coal and Oil Company - UAE
- Sinarmas Energy and Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Metalloyd Limited - United Kingdom
- Ind-Barath Power Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Port Waratah Coal Services - Australia
- Gujarat Sidhee Cement - India
- Essar Steel Hazira Ltd - India
- Indian Oil Corporation Limited
- Minerals Council of Australia
- Eastern Coal Council - USA
- OPG Power Generation Pvt Ltd - India
- Malabar Cements Ltd - India
- Sical Logistics Limited - India
- Star Paper Mills Limited - India
- Agrawal Coal Company - India
- San Jose City I Power Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Antam Resourcindo - Indonesia
- Price Waterhouse Coopers - Russia
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement - Thailand
- Eastern Energy - Thailand
- Grasim Industreis Ltd - India
- Meralco Power Generation, Philippines
- Jindal Steel & Power Ltd - India
- Mercuria Energy - Indonesia
- Indian Energy Exchange, India
- CIMB Investment Bank - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- SMG Consultants - Indonesia
- Globalindo Alam Lestari - Indonesia
- London Commodity Brokers - England
- Rashtriya Ispat Nigam Limited - India
- Global Green Power PLC Corporation, Philippines
- Parliament of New Zealand
- Borneo Indobara - Indonesia
- Chamber of Mines of South Africa
- Thiess Contractors Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Karaikal Port Pvt Ltd - India
- SMC Global Power, Philippines
- Mintek Dendrill Indonesia
- Salva Resources Pvt Ltd - India
- Wilmar Investment Holdings
- Indo Tambangraya Megah - Indonesia
- Meenaskhi Energy Private Limited - India
- ICICI Bank Limited - India
- Orica Mining Services - Indonesia
- Energy Link Ltd, New Zealand
- Sarangani Energy Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Sree Jayajothi Cements Limited - India
- Goldman Sachs - Singapore
- Larsen & Toubro Limited - India
- PowerSource Philippines DevCo
- Marubeni Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Xindia Steels Limited - India
- The University of Queensland
- Bukit Baiduri Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Independent Power Producers Association of India
- Central Electricity Authority - India
- ASAPP Information Group - India
- Cigading International Bulk Terminal - Indonesia
- Ambuja Cements Ltd - India
- South Luzon Thermal Energy Corporation
- Ministry of Finance - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bangladesh Power Developement Board
- PetroVietnam Power Coal Import and Supply Company
- Kapuas Tunggal Persada - Indonesia
- Petron Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Bhushan Steel Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Coalindo Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Energy Development Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Ceylon Electricity Board - Sri Lanka
- TeaM Sual Corporation - Philippines
- Cement Manufacturers Association - India
- Intertek Mineral Services - Indonesia
- Sakthi Sugars Limited - India
- Aditya Birla Group - India
- Holcim Trading Pte Ltd - Singapore
- India Bulls Power Limited - India
- Manunggal Multi Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Rio Tinto Coal - Australia
- Anglo American - United Kingdom
- Mjunction Services Limited - India
- Makarim & Taira - Indonesia
- Commonwealth Bank - Australia
- Power Finance Corporation Ltd., India
- Directorate Of Revenue Intelligence - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Videocon Industries ltd - India
- Kideco Jaya Agung - Indonesia
- Global Business Power Corporation, Philippines
- Indika Energy - Indonesia
- Electricity Authority, New Zealand
- MS Steel International - UAE
- European Bulk Services B.V. - Netherlands
- Bhoruka Overseas - Indonesia
- Georgia Ports Authority, United States
- Therma Luzon, Inc, Philippines
- Thai Mozambique Logistica
- Samtan Co., Ltd - South Korea
- VISA Power Limited - India
- Maheswari Brothers Coal Limited - India
- Romanian Commodities Exchange
- Bhatia International Limited - India
- Binh Thuan Hamico - Vietnam
- White Energy Company Limited
- CNBM International Corporation - China
- Vijayanagar Sugar Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Bharathi Cement Corporation - India
- Alfred C Toepfer International GmbH - Germany
- Ministry of Mines - Canada
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