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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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Monday, 28 September 20
NEW LNG PROJECTS - ALL DRESSED UP AND NO PLACE TO GO - WOOD MACKENZIE
It was meant to be another boom year. After a record 70 mmtpa of new LNG capacity was sanctioned in 2019, at least as much capacity was lined up fo ...
Thursday, 24 September 20
SUPRAMAX: INDO TO INDIA FIXING AROUND US$13,000 - FEARNLEYS
Cape
Over the last week the iron ore segment from Brazil to China has picked up, and we see freight rates up USD 2 (12%) week on week Fearnleys ...
Thursday, 24 September 20
KOREA MIDLAND POWER TO BUY 1.92 MILLION TONS OF 4,300-4,700 NCV COAL FOR THREE YEARS
COALspot.com: Korea Midland Power Co. Ltd, has issued an International tender for 640,000 MT 4,300-4,700 kcal/kg NCV coal per year.
...
Wednesday, 23 September 20
VIETNAM'S NEW POWER DEVELOPMENT PLAN MUST OPTIMIZE RENEWABLES AND AVOID FOSSIL FUEL LOCK-IN: IEEFA
EVN’s financial constraints leaves the utility with little room for error
Implementing Vietnam’s soon-to-be-launched next Power De ...
Wednesday, 23 September 20
MARKET INSIGHT - INTERMODAL
Undoubtedly, this year (ongoing) will never be forgotten because in a matter of months it has managed to severely affect and shape our day to day p ...
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Showing 776 to 780 news of total 6871 |
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- Meralco Power Generation, Philippines
- Minerals Council of Australia
- Meenaskhi Energy Private Limited - India
- Antam Resourcindo - Indonesia
- Thai Mozambique Logistica
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Electricity Authority - India
- Karbindo Abesyapradhi - Indoneisa
- Indonesian Coal Mining Association
- Indika Energy - Indonesia
- White Energy Company Limited
- Sarangani Energy Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Vedanta Resources Plc - India
- Posco Energy - South Korea
- Dalmia Cement Bharat India
- IHS Mccloskey Coal Group - USA
- Global Coal Blending Company Limited - Australia
- Savvy Resources Ltd - HongKong
- Edison Trading Spa - Italy
- LBH Netherlands Bv - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Planning Commission, India
- Bharathi Cement Corporation - India
- Chettinad Cement Corporation Ltd - India
- McConnell Dowell - Australia
- TNB Fuel Sdn Bhd - Malaysia
- European Bulk Services B.V. - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Bhatia International Limited - India
- Indian Energy Exchange, India
- Deloitte Consulting - India
- Trasteel International SA, Italy
- Maharashtra Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Parry Sugars Refinery, India
- Alfred C Toepfer International GmbH - Germany
- Neyveli Lignite Corporation Ltd, - India
- Bahari Cakrawala Sebuku - Indonesia
- Indogreen Group - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Mercuria Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Sindya Power Generating Company Private Ltd
- Energy Link Ltd, New Zealand
- GAC Shipping (India) Pvt Ltd
- Karaikal Port Pvt Ltd - India
- Agrawal Coal Company - India
- Eastern Coal Council - USA
- Borneo Indobara - Indonesia
- Australian Coal Association
- Bangladesh Power Developement Board
- Price Waterhouse Coopers - Russia
- Sakthi Sugars Limited - India
- Tamil Nadu electricity Board
- Mintek Dendrill Indonesia
- Ambuja Cements Ltd - India
- Jaiprakash Power Ventures ltd
- South Luzon Thermal Energy Corporation
- GMR Energy Limited - India
- New Zealand Coal & Carbon
- PTC India Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Bhushan Steel Limited - India
- Siam City Cement PLC, Thailand
- Thiess Contractors Indonesia
- Attock Cement Pakistan Limited
- Global Business Power Corporation, Philippines
- Aditya Birla Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- ASAPP Information Group - India
- Sinarmas Energy and Mining - Indonesia
- Bulk Trading Sa - Switzerland
- SN Aboitiz Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Commonwealth Bank - Australia
- Mercator Lines Limited - India
- The Treasury - Australian Government
- Metalloyd Limited - United Kingdom
- Central Java Power - Indonesia
- Siam City Cement - Thailand
- CNBM International Corporation - China
- Binh Thuan Hamico - Vietnam
- Australian Commodity Traders Exchange
- Maheswari Brothers Coal Limited - India
- Kobexindo Tractors - Indoneisa
- Iligan Light & Power Inc, Philippines
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- Bayan Resources Tbk. - Indonesia
- MS Steel International - UAE
- Orica Mining Services - Indonesia
- Gujarat Sidhee Cement - India
- Grasim Industreis Ltd - India
- IEA Clean Coal Centre - UK
- Independent Power Producers Association of India
- Economic Council, Georgia
- Straits Asia Resources Limited - Singapore
- Lanco Infratech Ltd - India
- Bukit Makmur.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- TeaM Sual Corporation - Philippines
- Aboitiz Power Corporation - Philippines
- Larsen & Toubro Limited - India
- Billiton Holdings Pty Ltd - Australia
- Coal and Oil Company - UAE
- Marubeni Corporation - India
- The State Trading Corporation of India Ltd
- The University of Queensland
- SMC Global Power, Philippines
- GVK Power & Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- London Commodity Brokers - England
- Renaissance Capital - South Africa
- Sojitz Corporation - Japan
- Coalindo Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Heidelberg Cement - Germany
- Sical Logistics Limited - India
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Kumho Petrochemical, South Korea
- Gujarat Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Africa Commodities Group - South Africa
- Global Green Power PLC Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Baramulti Group, Indonesia
- Madhucon Powers Ltd - India
- Directorate Of Revenue Intelligence - India
- Semirara Mining Corp, Philippines
- Georgia Ports Authority, United States
- Malabar Cements Ltd - India
- Electricity Generating Authority of Thailand
- Rashtriya Ispat Nigam Limited - India
- PowerSource Philippines DevCo
- International Coal Ventures Pvt Ltd - India
- Anglo American - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Banpu Public Company Limited - Thailand
- Kapuas Tunggal Persada - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Samtan Co., Ltd - South Korea
- Standard Chartered Bank - UAE
- Indian Oil Corporation Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Electricity Authority, New Zealand
- Star Paper Mills Limited - India
- Romanian Commodities Exchange
- VISA Power Limited - India
- Manunggal Multi Energi - Indonesia
- Ministry of Transport, Egypt
- Kaltim Prima Coal - Indonesia
- Chamber of Mines of South Africa
- India Bulls Power Limited - India
- Energy Development Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Videocon Industries ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Finance - Indonesia
- Parliament of New Zealand
- Ind-Barath Power Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petron Corporation, Philippines
- Singapore Mercantile Exchange
- Intertek Mineral Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Formosa Plastics Group - Taiwan
- CIMB Investment Bank - Malaysia
- Salva Resources Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Globalindo Alam Lestari - Indonesia
- Wood Mackenzie - Singapore
- Oldendorff Carriers - Singapore
- Uttam Galva Steels Limited - India
- Cement Manufacturers Association - India
- ICICI Bank Limited - India
- Rio Tinto Coal - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate General of MIneral and Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Simpson Spence & Young - Indonesia
- Kepco SPC Power Corporation, Philippines
- Goldman Sachs - Singapore
- Medco Energi Mining Internasional
- Bukit Asam (Persero) Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Interocean Group of Companies - India
- Jindal Steel & Power Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Carbofer General Trading SA - India
- Ministry of Mines - Canada
- Krishnapatnam Port Company Ltd. - India
- Barasentosa Lestari - Indonesia
- Xindia Steels Limited - India
- Power Finance Corporation Ltd., India
- Riau Bara Harum - Indonesia
- Orica Australia Pty. Ltd.
- Tata Chemicals Ltd - India
- Merrill Lynch Commodities Europe
- Kideco Jaya Agung - Indonesia
- Wilmar Investment Holdings
- Port Waratah Coal Services - Australia
- Indo Tambangraya Megah - Indonesia
- Mjunction Services Limited - India
- Leighton Contractors Pty Ltd - Australia
- San Jose City I Power Corp, Philippines
- Makarim & Taira - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
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