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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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Tuesday, 01 November 11
ATLAS RESOURCES SETS IPO AT RP1,500 - INSIDER STORIES
Insider Stories reported that, coal miner PT Atlas Resources Tbk has set its initial public offering (IPO) at Rp1,500 (approximately US$ 0.169) per ...
Tuesday, 01 November 11
DRY BULK MARKETS CORRECTION SPILLS OVER ONTO NEW WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market is losing steam, as evidenced by the falls experienced last week, which were also apparent at the beginning of the new week. A l ...
Monday, 31 October 11
CHINAS HUNGER FOR INDONESIAN COAL AT THREE YEAR-HIGH AS WINTER NEARS - JOSEPH KIRSCHKE
COALspot.com - Chinese demand for power-station coal from Indonesia has soared to its highest level in three years, as central heating plants and po ...
Saturday, 29 October 11
ATLAS RESOURCES SEALS US$95 MIO LOAN - INSIDER STORIES
Insider Stories reported that, coal producer PT Atlas Resources Tbk, that is controlled by Indonesian businessman Andre Abdi, has secured US$95 mill ...
Saturday, 29 October 11
INDONESIA TO INDIA FREIGHT LIKELY TO REMAIN SOFT
COALspot.com - The market continued to slow down and all segment were down this week.
The biggest drop was in the Cape Index down by 8.19 pct&nbs ...
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Showing 5001 to 5005 news of total 6871 |
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- IHS Mccloskey Coal Group - USA
- Timah Investasi Mineral - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Mjunction Services Limited - India
- SMG Consultants - Indonesia
- Borneo Indobara - Indonesia
- Goldman Sachs - Singapore
- Krishnapatnam Port Company Ltd. - India
- Sarangani Energy Corporation, Philippines
- Posco Energy - South Korea
- Gujarat Sidhee Cement - India
- Georgia Ports Authority, United States
- Australian Coal Association
- TNB Fuel Sdn Bhd - Malaysia
- New Zealand Coal & Carbon
- Tata Chemicals Ltd - India
- Malabar Cements Ltd - India
- Grasim Industreis Ltd - India
- Orica Australia Pty. Ltd.
- Simpson Spence & Young - Indonesia
- Petron Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Savvy Resources Ltd - HongKong
- Commonwealth Bank - Australia
- Straits Asia Resources Limited - Singapore
- Carbofer General Trading SA - India
- Indika Energy - Indonesia
- Indian Energy Exchange, India
- European Bulk Services B.V. - Netherlands
- Sree Jayajothi Cements Limited - India
- Anglo American - United Kingdom
- Planning Commission, India
- London Commodity Brokers - England
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coalindo Energy - Indonesia
- Latin American Coal - Colombia
- PTC India Limited - India
- Coal and Oil Company - UAE
- Billiton Holdings Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- Bulk Trading Sa - Switzerland
- The Treasury - Australian Government
- Chamber of Mines of South Africa
- McConnell Dowell - Australia
- Orica Mining Services - Indonesia
- Lanco Infratech Ltd - India
- GVK Power & Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Aditya Birla Group - India
- PowerSource Philippines DevCo
- Bukit Makmur.PT - Indonesia
- Standard Chartered Bank - UAE
- SN Aboitiz Power Inc, Philippines
- Africa Commodities Group - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Banpu Public Company Limited - Thailand
- Wilmar Investment Holdings
- Deloitte Consulting - India
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Minerals Council of Australia
- Therma Luzon, Inc, Philippines
- Intertek Mineral Services - Indonesia
- South Luzon Thermal Energy Corporation
- Maheswari Brothers Coal Limited - India
- Toyota Tsusho Corporation, Japan
- Salva Resources Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Sakthi Sugars Limited - India
- Kumho Petrochemical, South Korea
- Heidelberg Cement - Germany
- Meralco Power Generation, Philippines
- Wood Mackenzie - Singapore
- Altura Mining Limited, Indonesia
- Uttam Galva Steels Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- Kohat Cement Company Ltd. - Pakistan
- Sindya Power Generating Company Private Ltd
- Energy Development Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Baramulti Group, Indonesia
- Ind-Barath Power Infra Limited - India
- Bharathi Cement Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- Kobexindo Tractors - Indoneisa
- Barasentosa Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Makarim & Taira - Indonesia
- Alfred C Toepfer International GmbH - Germany
- TeaM Sual Corporation - Philippines
- IEA Clean Coal Centre - UK
- Ceylon Electricity Board - Sri Lanka
- Petrochimia International Co. Ltd.- Taiwan
- Cigading International Bulk Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- MS Steel International - UAE
- Kideco Jaya Agung - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Thai Mozambique Logistica
- Independent Power Producers Association of India
- Power Finance Corporation Ltd., India
- Samtan Co., Ltd - South Korea
- AsiaOL BioFuels Corp., Philippines
- Riau Bara Harum - Indonesia
- Bhushan Steel Limited - India
- Gujarat Electricity Regulatory Commission - India
- Ministry of Transport, Egypt
- Jorong Barutama Greston.PT - Indonesia
- Tamil Nadu electricity Board
- Parry Sugars Refinery, India
- Meenaskhi Energy Private Limited - India
- Electricity Authority, New Zealand
- SMC Global Power, Philippines
- Marubeni Corporation - India
- GMR Energy Limited - India
- OPG Power Generation Pvt Ltd - India
- VISA Power Limited - India
- Agrawal Coal Company - India
- Ministry of Finance - Indonesia
- Eastern Coal Council - USA
- Renaissance Capital - South Africa
- Economic Council, Georgia
- Directorate Of Revenue Intelligence - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Antam Resourcindo - Indonesia
- Mercuria Energy - Indonesia
- Star Paper Mills Limited - India
- Holcim Trading Pte Ltd - Singapore
- Bukit Baiduri Energy - Indonesia
- Central Electricity Authority - India
- Dalmia Cement Bharat India
- Karbindo Abesyapradhi - Indoneisa
- Formosa Plastics Group - Taiwan
- Ministry of Mines - Canada
- Australian Commodity Traders Exchange
- Kalimantan Lumbung Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement PLC, Thailand
- Siam City Cement - Thailand
- Vizag Seaport Private Limited - India
- Eastern Energy - Thailand
- India Bulls Power Limited - India
- Jindal Steel & Power Ltd - India
- The University of Queensland
- Edison Trading Spa - Italy
- Thiess Contractors Indonesia
- ASAPP Information Group - India
- Jaiprakash Power Ventures ltd
- PetroVietnam Power Coal Import and Supply Company
- Rio Tinto Coal - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Mintek Dendrill Indonesia
- Bangladesh Power Developement Board
- Aboitiz Power Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- CNBM International Corporation - China
- Leighton Contractors Pty Ltd - Australia
- Kapuas Tunggal Persada - Indonesia
- Romanian Commodities Exchange
- Bhoruka Overseas - Indonesia
- International Coal Ventures Pvt Ltd - India
- Singapore Mercantile Exchange
- Larsen & Toubro Limited - India
- Bhatia International Limited - India
- The State Trading Corporation of India Ltd
- Price Waterhouse Coopers - Russia
- Vedanta Resources Plc - India
- Sical Logistics Limited - India
- Kepco SPC Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Directorate General of MIneral and Coal - Indonesia
- White Energy Company Limited
- Attock Cement Pakistan Limited
- Kartika Selabumi Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- ICICI Bank Limited - India
- Trasteel International SA, Italy
- Essar Steel Hazira Ltd - India
- Semirara Mining Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Sojitz Corporation - Japan
- Cement Manufacturers Association - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Coal Blending Company Limited - Australia
- Metalloyd Limited - United Kingdom
- Ambuja Cements Ltd - India
- Indian Oil Corporation Limited
- Manunggal Multi Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Central Java Power - Indonesia
- Mercator Lines Limited - India
- Port Waratah Coal Services - Australia
- Indogreen Group - Indonesia
- Globalindo Alam Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Parliament of New Zealand
- Xindia Steels Limited - India
- Global Business Power Corporation, Philippines
- Madhucon Powers Ltd - India
- CIMB Investment Bank - Malaysia
- Videocon Industries ltd - India
- Interocean Group of Companies - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Link Ltd, New Zealand
- Merrill Lynch Commodities Europe
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