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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, 06 September 11
SEMEN GRESIK TO ACQUIRE COAL MINE FOR RP. 1 TRILLION
COALspot.com - PT Semen Gresik Tbk (SMGR) is planning to acquire a low calorific value coal concession (IUP). According to Semen Gresik, the coal mi ...
Tuesday, 06 September 11
DRY BULK MARKETS RALLY POWERS THROUGH TO NEW WEEK, BUT A CORRECTION COULD BE OVERDUE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market’s freights rates kept leaping forwards during the beginning of the week, with the industry’s benchmark, the Baltic D ...
Monday, 05 September 11
TNPL POSTPONES BID OPENING UNTIL 12 SEPTEMBER 2011
COALspot.com - TNPL has postponed submission of the offer until 12 September 2011 on request from the supplier, an Indian trader said.
Due to Ram ...
Monday, 05 September 11
INDONESIAN COAL BENCHMARK PRICE - ANALYSIS
Analyst : Sunil K Kumbhat
COALspot.com - As a part of the Government’s efforts to stop transfer pricing abuses which have resulted in the los ...
Saturday, 03 September 11
FEW SHIPS REPORTED FIXED FROM INDONESIA TO INDIA - VISTAAR
COALspot.com - The freight market continued the upward trend during last week with BDI up by about 13 pct closing at 1,740 points and cape index up ...
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Showing 5101 to 5105 news of total 6871 |
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- Madhucon Powers Ltd - India
- Bhoruka Overseas - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Planning Commission, India
- Renaissance Capital - South Africa
- Bhushan Steel Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- South Luzon Thermal Energy Corporation
- Uttam Galva Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Maharashtra Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Intertek Mineral Services - Indonesia
- Minerals Council of Australia
- Neyveli Lignite Corporation Ltd, - India
- Meralco Power Generation, Philippines
- Marubeni Corporation - India
- Vizag Seaport Private Limited - India
- GMR Energy Limited - India
- GVK Power & Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Parliament of New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Manunggal Multi Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Australian Coal Association
- PTC India Limited - India
- Wilmar Investment Holdings
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Kartika Selabumi Mining - Indonesia
- Orica Mining Services - Indonesia
- Gujarat Sidhee Cement - India
- Simpson Spence & Young - Indonesia
- Mercator Lines Limited - India
- Therma Luzon, Inc, Philippines
- Borneo Indobara - Indonesia
- Coal and Oil Company - UAE
- Economic Council, Georgia
- McConnell Dowell - Australia
- VISA Power Limited - India
- The State Trading Corporation of India Ltd
- MS Steel International - UAE
- Bukit Makmur.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- India Bulls Power Limited - India
- SMG Consultants - Indonesia
- Attock Cement Pakistan Limited
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- Posco Energy - South Korea
- Barasentosa Lestari - Indonesia
- Goldman Sachs - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- Cigading International Bulk Terminal - Indonesia
- Sree Jayajothi Cements Limited - India
- Straits Asia Resources Limited - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Australian Commodity Traders Exchange
- White Energy Company Limited
- Price Waterhouse Coopers - Russia
- Baramulti Group, Indonesia
- Bhatia International Limited - India
- Riau Bara Harum - Indonesia
- Indika Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Salva Resources Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Chamber of Mines of South Africa
- PNOC Exploration Corporation - Philippines
- Petron Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Romanian Commodities Exchange
- Altura Mining Limited, Indonesia
- Sindya Power Generating Company Private Ltd
- Bayan Resources Tbk. - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sarangani Energy Corporation, Philippines
- Medco Energi Mining Internasional
- Karaikal Port Pvt Ltd - India
- Eastern Coal Council - USA
- Wood Mackenzie - Singapore
- IEA Clean Coal Centre - UK
- Maheswari Brothers Coal Limited - India
- Tata Chemicals Ltd - India
- Independent Power Producers Association of India
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Mines - Canada
- Thiess Contractors Indonesia
- Port Waratah Coal Services - Australia
- Grasim Industreis Ltd - India
- Larsen & Toubro Limited - India
- Star Paper Mills Limited - India
- Aboitiz Power Corporation - Philippines
- CNBM International Corporation - China
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Parry Sugars Refinery, India
- Binh Thuan Hamico - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Indian Oil Corporation Limited
- Central Java Power - Indonesia
- International Coal Ventures Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Malabar Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Indonesian Coal Mining Association
- Metalloyd Limited - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Bharathi Cement Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Commonwealth Bank - Australia
- Timah Investasi Mineral - Indoneisa
- Indian Energy Exchange, India
- Lanco Infratech Ltd - India
- Coastal Gujarat Power Limited - India
- TeaM Sual Corporation - Philippines
- Electricity Generating Authority of Thailand
- Global Coal Blending Company Limited - Australia
- Edison Trading Spa - Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- New Zealand Coal & Carbon
- IHS Mccloskey Coal Group - USA
- LBH Netherlands Bv - Netherlands
- Kideco Jaya Agung - Indonesia
- Bukit Baiduri Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- Indogreen Group - Indonesia
- Rio Tinto Coal - Australia
- Latin American Coal - Colombia
- OPG Power Generation Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Directorate Of Revenue Intelligence - India
- Samtan Co., Ltd - South Korea
- Banpu Public Company Limited - Thailand
- Global Business Power Corporation, Philippines
- Central Electricity Authority - India
- Karbindo Abesyapradhi - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The Treasury - Australian Government
- Dalmia Cement Bharat India
- Anglo American - United Kingdom
- Singapore Mercantile Exchange
- Heidelberg Cement - Germany
- Sojitz Corporation - Japan
- Videocon Industries ltd - India
- SMC Global Power, Philippines
- Agrawal Coal Company - India
- Georgia Ports Authority, United States
- Standard Chartered Bank - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Carbofer General Trading SA - India
- Trasteel International SA, Italy
- Ceylon Electricity Board - Sri Lanka
- Krishnapatnam Port Company Ltd. - India
- ICICI Bank Limited - India
- Vedanta Resources Plc - India
- Globalindo Alam Lestari - Indonesia
- Eastern Energy - Thailand
- Kaltim Prima Coal - Indonesia
- London Commodity Brokers - England
- SN Aboitiz Power Inc, Philippines
- Energy Development Corp, Philippines
- Antam Resourcindo - Indonesia
- PowerSource Philippines DevCo
- Merrill Lynch Commodities Europe
- Xindia Steels Limited - India
- San Jose City I Power Corp, Philippines
- Siam City Cement PLC, Thailand
- Tamil Nadu electricity Board
- ASAPP Information Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Oldendorff Carriers - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Mintek Dendrill Indonesia
- Orica Australia Pty. Ltd.
- Sinarmas Energy and Mining - Indonesia
- Thai Mozambique Logistica
- CIMB Investment Bank - Malaysia
- Interocean Group of Companies - India
- Power Finance Corporation Ltd., India
- Ministry of Transport, Egypt
- Sakthi Sugars Limited - India
- Ambuja Cements Ltd - India
- Electricity Authority, New Zealand
- Mercuria Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Mjunction Services Limited - India
- Cement Manufacturers Association - India
- Africa Commodities Group - South Africa
- Bangladesh Power Developement Board
- Kalimantan Lumbung Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Aditya Birla Group - India
- Ministry of Finance - Indonesia
- The University of Queensland
- GAC Shipping (India) Pvt Ltd
- Essar Steel Hazira Ltd - India
- Sical Logistics Limited - India
- Jindal Steel & Power Ltd - India
- Formosa Plastics Group - Taiwan
- Makarim & Taira - Indonesia
- Coalindo Energy - Indonesia
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