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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, 24 October 11
CAPESIZE RENTAL RATES RISE FOR THIRD DAY AS MORE SHIPS HIRED - HELLENIC SHIPPING
Rates to hire capesize vessels advanced for a third day on signs of increased demand to transport iron ore, used to make steel.Daily rates for the s ...
Sunday, 23 October 11
CHINA LOOKING TO RESELL INDONESIAN COAL CARGOES - BARCLAYS
Commodity Online reported that, Anecdotal evidence has suggested that China is even looking to resell Indonesian cargoes back into the seaborne coal ...
Saturday, 22 October 11
THE SHORT-PERIOD RATES FOR PANAMAX REMAINED FIRM - CAPT. REDDY
COALspot.com - "The market seemed to slow down a bit this week, and all sectors were down by about One to five percent", said Capt. Reddy, ...
Saturday, 22 October 11
WILL THE PROPOSED 26 PERCENT PROFIT SHARING CLAUSE IN THE MINING BILL SPEED UP THE PRODUCTION OR SCARE AWAY INVESTORS? - DIPESH DIPU
A draft law has been approved by a ministerial panel headed by Finance Minister Pranab Mukherjee of India which, if passed by the Cabinet, will make ...
Saturday, 22 October 11
INDONESIA'S GOLDEN ENERGY SLASHES ITS IPO PRICE - THE JAKARTA GLOBE
The Jakarta Globe reported that, Golden Energy Mines, a coal mining company affiliated with Sinar Mas Group, lowered its target in an initial public ...
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Showing 5016 to 5020 news of total 6871 |
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- Edison Trading Spa - Italy
- Neyveli Lignite Corporation Ltd, - India
- Aditya Birla Group - India
- Economic Council, Georgia
- San Jose City I Power Corp, Philippines
- Bhushan Steel Limited - India
- Heidelberg Cement - Germany
- Cement Manufacturers Association - India
- Ministry of Finance - Indonesia
- Bulk Trading Sa - Switzerland
- CIMB Investment Bank - Malaysia
- OPG Power Generation Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining and Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- Posco Energy - South Korea
- CNBM International Corporation - China
- Uttam Galva Steels Limited - India
- Port Waratah Coal Services - Australia
- Oldendorff Carriers - Singapore
- Chettinad Cement Corporation Ltd - India
- Energy Development Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Antam Resourcindo - Indonesia
- GVK Power & Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- Kartika Selabumi Mining - Indonesia
- White Energy Company Limited
- Grasim Industreis Ltd - India
- PTC India Limited - India
- Romanian Commodities Exchange
- SMC Global Power, Philippines
- Samtan Co., Ltd - South Korea
- Kapuas Tunggal Persada - Indonesia
- Singapore Mercantile Exchange
- Jaiprakash Power Ventures ltd
- Power Finance Corporation Ltd., India
- Indian Energy Exchange, India
- Sinarmas Energy and Mining - Indonesia
- Africa Commodities Group - South Africa
- Coal and Oil Company - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sindya Power Generating Company Private Ltd
- Madhucon Powers Ltd - India
- Ministry of Mines - Canada
- Coalindo Energy - Indonesia
- Semirara Mining Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Iligan Light & Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Goldman Sachs - Singapore
- Binh Thuan Hamico - Vietnam
- Price Waterhouse Coopers - Russia
- SMG Consultants - Indonesia
- Independent Power Producers Association of India
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Parry Sugars Refinery, India
- SN Aboitiz Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Australian Coal Association
- Ministry of Transport, Egypt
- Commonwealth Bank - Australia
- Petrochimia International Co. Ltd.- Taiwan
- International Coal Ventures Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Makarim & Taira - Indonesia
- Indo Tambangraya Megah - Indonesia
- Directorate Of Revenue Intelligence - India
- Timah Investasi Mineral - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Maheswari Brothers Coal Limited - India
- PNOC Exploration Corporation - Philippines
- Mintek Dendrill Indonesia
- Therma Luzon, Inc, Philippines
- Riau Bara Harum - Indonesia
- Pendopo Energi Batubara - Indonesia
- MS Steel International - UAE
- Formosa Plastics Group - Taiwan
- Maharashtra Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Energy Link Ltd, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Altura Mining Limited, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bukit Asam (Persero) Tbk - Indonesia
- Meenaskhi Energy Private Limited - India
- Karaikal Port Pvt Ltd - India
- Marubeni Corporation - India
- Planning Commission, India
- Kaltim Prima Coal - Indonesia
- Siam City Cement PLC, Thailand
- Miang Besar Coal Terminal - Indonesia
- Sical Logistics Limited - India
- Bukit Baiduri Energy - Indonesia
- Rio Tinto Coal - Australia
- Chamber of Mines of South Africa
- Savvy Resources Ltd - HongKong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wilmar Investment Holdings
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The Treasury - Australian Government
- Tamil Nadu electricity Board
- Videocon Industries ltd - India
- Global Green Power PLC Corporation, Philippines
- Bhatia International Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Orica Mining Services - Indonesia
- South Luzon Thermal Energy Corporation
- Simpson Spence & Young - Indonesia
- Malabar Cements Ltd - India
- Indonesian Coal Mining Association
- Kobexindo Tractors - Indoneisa
- Mercator Lines Limited - India
- Attock Cement Pakistan Limited
- Eastern Energy - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Coastal Gujarat Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Dalmia Cement Bharat India
- Bukit Makmur.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Kumho Petrochemical, South Korea
- Holcim Trading Pte Ltd - Singapore
- Banpu Public Company Limited - Thailand
- Global Coal Blending Company Limited - Australia
- Siam City Cement - Thailand
- Central Java Power - Indonesia
- Latin American Coal - Colombia
- Indika Energy - Indonesia
- ASAPP Information Group - India
- IHS Mccloskey Coal Group - USA
- Larsen & Toubro Limited - India
- ICICI Bank Limited - India
- The University of Queensland
- Wood Mackenzie - Singapore
- Straits Asia Resources Limited - Singapore
- Mercuria Energy - Indonesia
- VISA Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Medco Energi Mining Internasional
- Karbindo Abesyapradhi - Indoneisa
- Mjunction Services Limited - India
- McConnell Dowell - Australia
- European Bulk Services B.V. - Netherlands
- Merrill Lynch Commodities Europe
- Ambuja Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sakthi Sugars Limited - India
- PowerSource Philippines DevCo
- Parliament of New Zealand
- Sojitz Corporation - Japan
- TeaM Sual Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Trasteel International SA, Italy
- Salva Resources Pvt Ltd - India
- Renaissance Capital - South Africa
- New Zealand Coal & Carbon
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Georgia Ports Authority, United States
- Interocean Group of Companies - India
- Deloitte Consulting - India
- IEA Clean Coal Centre - UK
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Carbofer General Trading SA - India
- Tata Chemicals Ltd - India
- Toyota Tsusho Corporation, Japan
- Indian Oil Corporation Limited
- GN Power Mariveles Coal Plant, Philippines
- Vizag Seaport Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Thai Mozambique Logistica
- Anglo American - United Kingdom
- Agrawal Coal Company - India
- The State Trading Corporation of India Ltd
- Sree Jayajothi Cements Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Kideco Jaya Agung - Indonesia
- GAC Shipping (India) Pvt Ltd
- Borneo Indobara - Indonesia
- Xindia Steels Limited - India
- India Bulls Power Limited - India
- London Commodity Brokers - England
- Bharathi Cement Corporation - India
- Baramulti Group, Indonesia
- Standard Chartered Bank - UAE
- Eastern Coal Council - USA
- Electricity Authority, New Zealand
- Gujarat Sidhee Cement - India
- Alfred C Toepfer International GmbH - Germany
- Bhoruka Overseas - Indonesia
- Manunggal Multi Energi - Indonesia
- Central Electricity Authority - India
- Lanco Infratech Ltd - India
- Vedanta Resources Plc - India
- Ind-Barath Power Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Petron Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Minerals Council of Australia
- Barasentosa Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Thiess Contractors Indonesia
- Electricity Generating Authority of Thailand
- Jindal Steel & Power Ltd - India
- Australian Commodity Traders Exchange
- GMR Energy Limited - India
- Orica Australia Pty. Ltd.
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