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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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Wednesday, 16 November 11
TAX OFFICE VOWS TO CRACK DOWN ON COAL MINERS - JP
The Jakarta Post reported that, the Finance Ministry’s Directorate General of Taxation says that it will strengthen its supervision of coal mi ...
Wednesday, 16 November 11
A STRONG WEEK FOR THE CAPES - BRS
A sharp bounce by the Cape market pushed the BDI up by 3% last week. This was despite a softening in the other indices with the Panamax, Supramax an ...
Monday, 14 November 11
BORL SEEKS 660K MT OF LOW SULPHUR COAL
COALspot.com - BORL India has issued a tender for around 660,000 MT of 4500 - 5500 kcal/kg sub-bituminous Coal.
Bharat Oman Refineries Ltd ...
Sunday, 13 November 11
BUNKER PRICES REMAINED FIRM
COALspot.com - The market seemed to recover this week with the BDI and Cape Index up.
The BDI was up by only about 2.86 pct closing at 1835 point ...
Saturday, 12 November 11
COALINDO ENERGY LAUNCHED INDEX FOR 3400 GAR COAL
COALspot.com - PT Coalindo Energy, in cooperation with Argus Media Limited, launched the coal index for low-rank coal with a calorific value of 3,40 ...
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Showing 4981 to 4985 news of total 6871 |
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- GN Power Mariveles Coal Plant, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meenaskhi Energy Private Limited - India
- Bhatia International Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sakthi Sugars Limited - India
- San Jose City I Power Corp, Philippines
- Coastal Gujarat Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Siam City Cement - Thailand
- Jaiprakash Power Ventures ltd
- Gujarat Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- European Bulk Services B.V. - Netherlands
- Minerals Council of Australia
- Timah Investasi Mineral - Indoneisa
- International Coal Ventures Pvt Ltd - India
- VISA Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Ministry of Transport, Egypt
- Thiess Contractors Indonesia
- Semirara Mining Corp, Philippines
- Altura Mining Limited, Indonesia
- Georgia Ports Authority, United States
- Tamil Nadu electricity Board
- Iligan Light & Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- GMR Energy Limited - India
- The Treasury - Australian Government
- Kumho Petrochemical, South Korea
- Agrawal Coal Company - India
- Medco Energi Mining Internasional
- TNB Fuel Sdn Bhd - Malaysia
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- SMC Global Power, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- Indika Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Indogreen Group - Indonesia
- Romanian Commodities Exchange
- Simpson Spence & Young - Indonesia
- Chamber of Mines of South Africa
- Goldman Sachs - Singapore
- Port Waratah Coal Services - Australia
- Thai Mozambique Logistica
- Larsen & Toubro Limited - India
- Essar Steel Hazira Ltd - India
- Commonwealth Bank - Australia
- Siam City Cement PLC, Thailand
- Interocean Group of Companies - India
- Kapuas Tunggal Persada - Indonesia
- Rio Tinto Coal - Australia
- Wood Mackenzie - Singapore
- South Luzon Thermal Energy Corporation
- Ceylon Electricity Board - Sri Lanka
- Edison Trading Spa - Italy
- Sical Logistics Limited - India
- Kaltim Prima Coal - Indonesia
- Africa Commodities Group - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Mjunction Services Limited - India
- Renaissance Capital - South Africa
- Parliament of New Zealand
- Deloitte Consulting - India
- Central Electricity Authority - India
- TeaM Sual Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Planning Commission, India
- Indian Oil Corporation Limited
- Videocon Industries ltd - India
- Indo Tambangraya Megah - Indonesia
- Uttam Galva Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Standard Chartered Bank - UAE
- Ind-Barath Power Infra Limited - India
- Banpu Public Company Limited - Thailand
- Leighton Contractors Pty Ltd - Australia
- PowerSource Philippines DevCo
- Electricity Authority, New Zealand
- Salva Resources Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- The University of Queensland
- Star Paper Mills Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Aditya Birla Group - India
- ASAPP Information Group - India
- Coalindo Energy - Indonesia
- Economic Council, Georgia
- Billiton Holdings Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- Vizag Seaport Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Indonesian Coal Mining Association
- Carbofer General Trading SA - India
- Miang Besar Coal Terminal - Indonesia
- Malabar Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- Petron Corporation, Philippines
- Gujarat Sidhee Cement - India
- Bangladesh Power Developement Board
- Coal and Oil Company - UAE
- Oldendorff Carriers - Singapore
- Anglo American - United Kingdom
- Orica Mining Services - Indonesia
- Parry Sugars Refinery, India
- Australian Commodity Traders Exchange
- Holcim Trading Pte Ltd - Singapore
- Indian Energy Exchange, India
- PNOC Exploration Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Chettinad Cement Corporation Ltd - India
- McConnell Dowell - Australia
- ICICI Bank Limited - India
- Marubeni Corporation - India
- MS Steel International - UAE
- Lanco Infratech Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Bhoruka Overseas - Indonesia
- Intertek Mineral Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Energy Development Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining and Power Corporation, Philippines
- Cement Manufacturers Association - India
- Sree Jayajothi Cements Limited - India
- SN Aboitiz Power Inc, Philippines
- Baramulti Group, Indonesia
- Bulk Trading Sa - Switzerland
- Bukit Asam (Persero) Tbk - Indonesia
- Makarim & Taira - Indonesia
- White Energy Company Limited
- Formosa Plastics Group - Taiwan
- Barasentosa Lestari - Indonesia
- Mintek Dendrill Indonesia
- Cigading International Bulk Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Independent Power Producers Association of India
- Jorong Barutama Greston.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Sarangani Energy Corporation, Philippines
- Merrill Lynch Commodities Europe
- Power Finance Corporation Ltd., India
- Therma Luzon, Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Madhucon Powers Ltd - India
- IHS Mccloskey Coal Group - USA
- Ministry of Mines - Canada
- Kalimantan Lumbung Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Singapore Mercantile Exchange
- Samtan Co., Ltd - South Korea
- Savvy Resources Ltd - HongKong
- Electricity Generating Authority of Thailand
- Sindya Power Generating Company Private Ltd
- London Commodity Brokers - England
- Bahari Cakrawala Sebuku - Indonesia
- Jindal Steel & Power Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- India Bulls Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Posco Energy - South Korea
- Global Business Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Bhushan Steel Limited - India
- Eastern Energy - Thailand
- GVK Power & Infra Limited - India
- Tata Chemicals Ltd - India
- Wilmar Investment Holdings
- Trasteel International SA, Italy
- Krishnapatnam Port Company Ltd. - India
- Central Java Power - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- The State Trading Corporation of India Ltd
- Heidelberg Cement - Germany
- Gujarat Mineral Development Corp Ltd - India
- Borneo Indobara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Riau Bara Harum - Indonesia
- Ambuja Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bharathi Cement Corporation - India
- Meralco Power Generation, Philippines
- Kobexindo Tractors - Indoneisa
- Toyota Tsusho Corporation, Japan
- OPG Power Generation Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Kepco SPC Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Grasim Industreis Ltd - India
- Vedanta Resources Plc - India
- Eastern Coal Council - USA
- Energy Link Ltd, New Zealand
- Bukit Baiduri Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Maheswari Brothers Coal Limited - India
- Dalmia Cement Bharat India
- New Zealand Coal & Carbon
- CNBM International Corporation - China
- IEA Clean Coal Centre - UK
- Xindia Steels Limited - India
- Orica Australia Pty. Ltd.
- PTC India Limited - India
- Australian Coal Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Straits Asia Resources Limited - Singapore
- Ministry of Finance - Indonesia
- Globalindo Alam Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Global Coal Blending Company Limited - Australia
- Mercuria Energy - Indonesia
- Metalloyd Limited - United Kingdom
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