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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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Sunday, 28 August 11
FREIGHT MARKET COULD BE FIRM NEXT MONTH - VISTAAR
COALspot.com - The freight market continued the upward trend first half of the week . However, towards the end of the week lost momentum and the BDI ...
Saturday, 27 August 11
JAPANESE BULK CARRIER SETS RECORD ON NORTHERN SEA ROUTE - BARENTS OBSERVER
The Northern Sea Route will see its third record in less than a month when the largest ever bulk carrier to take the route leaves Murmansk next week ...
Saturday, 27 August 11
RBCT-INDIA ROUNDS FIXED AT AROUND US$ 12K - FEARNBULK
Handy
Stable but very positional markets across all segments in the Atlantic: the gap between owners and charterers rate ideas is building up as o ...
Friday, 26 August 11
TUAH TURANGGA AGUNG ACQUIRES AN ADDITIONAL 40% SHARES IN BARA PRIMA AGUNG
COALspot.com - PT Tuah Turangga Agung, a subsidiary of PT United Tractors Tbk, has signed an acquisition agreement to acquire 40% of PT Bara Prima A ...
Friday, 26 August 11
INTRACO EYES US$200 MIO COAL TAKEOVER - INSIDER STORIES
Heavy equipment distributor PT Intraco Penta Tbk, that was founded by Halex Halim, is scouting a coal acquisition with the valuation above US$200 mi ...
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Showing 5111 to 5115 news of total 6871 |
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- Bhatia International Limited - India
- LBH Netherlands Bv - Netherlands
- Grasim Industreis Ltd - India
- Global Green Power PLC Corporation, Philippines
- Indika Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Trasteel International SA, Italy
- The Treasury - Australian Government
- Aboitiz Power Corporation - Philippines
- Indonesian Coal Mining Association
- Agrawal Coal Company - India
- Port Waratah Coal Services - Australia
- Eastern Coal Council - USA
- Vizag Seaport Private Limited - India
- Medco Energi Mining Internasional
- ICICI Bank Limited - India
- Alfred C Toepfer International GmbH - Germany
- Ceylon Electricity Board - Sri Lanka
- PetroVietnam Power Coal Import and Supply Company
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- SMG Consultants - Indonesia
- SMC Global Power, Philippines
- Kideco Jaya Agung - Indonesia
- Semirara Mining Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- San Jose City I Power Corp, Philippines
- Lanco Infratech Ltd - India
- Jaiprakash Power Ventures ltd
- Gujarat Sidhee Cement - India
- Xindia Steels Limited - India
- Thai Mozambique Logistica
- Standard Chartered Bank - UAE
- IHS Mccloskey Coal Group - USA
- Kumho Petrochemical, South Korea
- Wood Mackenzie - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jindal Steel & Power Ltd - India
- Ministry of Transport, Egypt
- Latin American Coal - Colombia
- Pendopo Energi Batubara - Indonesia
- Banpu Public Company Limited - Thailand
- Minerals Council of Australia
- Bayan Resources Tbk. - Indonesia
- GVK Power & Infra Limited - India
- Australian Coal Association
- Coalindo Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Vijayanagar Sugar Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Electricity Authority, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Formosa Plastics Group - Taiwan
- Globalindo Alam Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Georgia Ports Authority, United States
- Kobexindo Tractors - Indoneisa
- Star Paper Mills Limited - India
- Renaissance Capital - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Metalloyd Limited - United Kingdom
- Energy Development Corp, Philippines
- Sakthi Sugars Limited - India
- Mercuria Energy - Indonesia
- Riau Bara Harum - Indonesia
- Central Electricity Authority - India
- Africa Commodities Group - South Africa
- Larsen & Toubro Limited - India
- Madhucon Powers Ltd - India
- Deloitte Consulting - India
- Economic Council, Georgia
- Miang Besar Coal Terminal - Indonesia
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- Leighton Contractors Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parliament of New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Kaltim Prima Coal - Indonesia
- Bhushan Steel Limited - India
- AsiaOL BioFuels Corp., Philippines
- Kalimantan Lumbung Energi - Indonesia
- Petron Corporation, Philippines
- Uttam Galva Steels Limited - India
- Meralco Power Generation, Philippines
- Planning Commission, India
- Binh Thuan Hamico - Vietnam
- Interocean Group of Companies - India
- Sarangani Energy Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Power Finance Corporation Ltd., India
- Goldman Sachs - Singapore
- Coal and Oil Company - UAE
- Borneo Indobara - Indonesia
- Parry Sugars Refinery, India
- Thiess Contractors Indonesia
- Meenaskhi Energy Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Indogreen Group - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- IEA Clean Coal Centre - UK
- London Commodity Brokers - England
- Toyota Tsusho Corporation, Japan
- Ind-Barath Power Infra Limited - India
- Sojitz Corporation - Japan
- Posco Energy - South Korea
- White Energy Company Limited
- Ambuja Cements Ltd - India
- Ministry of Finance - Indonesia
- CIMB Investment Bank - Malaysia
- Global Coal Blending Company Limited - Australia
- Orica Mining Services - Indonesia
- Orica Australia Pty. Ltd.
- VISA Power Limited - India
- Central Java Power - Indonesia
- The State Trading Corporation of India Ltd
- MS Steel International - UAE
- Kepco SPC Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Rio Tinto Coal - Australia
- Wilmar Investment Holdings
- Electricity Generating Authority of Thailand
- Romanian Commodities Exchange
- Price Waterhouse Coopers - Russia
- Dalmia Cement Bharat India
- Kartika Selabumi Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Global Business Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Vedanta Resources Plc - India
- Sical Logistics Limited - India
- Holcim Trading Pte Ltd - Singapore
- Edison Trading Spa - Italy
- Makarim & Taira - Indonesia
- Merrill Lynch Commodities Europe
- Sree Jayajothi Cements Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Makmur.PT - Indonesia
- Singapore Mercantile Exchange
- Ministry of Mines - Canada
- Tamil Nadu electricity Board
- Altura Mining Limited, Indonesia
- PTC India Limited - India
- GMR Energy Limited - India
- Malabar Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Indian Energy Exchange, India
- Siam City Cement PLC, Thailand
- TeaM Sual Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chamber of Mines of South Africa
- Manunggal Multi Energi - Indonesia
- Aditya Birla Group - India
- Krishnapatnam Port Company Ltd. - India
- Antam Resourcindo - Indonesia
- Tata Chemicals Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Carbofer General Trading SA - India
- Maheswari Brothers Coal Limited - India
- Mjunction Services Limited - India
- Cement Manufacturers Association - India
- Semirara Mining and Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- CNBM International Corporation - China
- Bangladesh Power Developement Board
- PowerSource Philippines DevCo
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sinarmas Energy and Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Baramulti Group, Indonesia
- ASAPP Information Group - India
- SN Aboitiz Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Iligan Light & Power Inc, Philippines
- Videocon Industries ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Karbindo Abesyapradhi - Indoneisa
- Marubeni Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Therma Luzon, Inc, Philippines
- The University of Queensland
- Mercator Lines Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Salva Resources Pvt Ltd - India
- Indian Oil Corporation Limited
- Australian Commodity Traders Exchange
- Sindya Power Generating Company Private Ltd
- Heidelberg Cement - Germany
- Attock Cement Pakistan Limited
- Anglo American - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Coastal Gujarat Power Limited - India
- Savvy Resources Ltd - HongKong
- Bulk Trading Sa - Switzerland
- Commonwealth Bank - Australia
- Oldendorff Carriers - Singapore
- Eastern Energy - Thailand
- Mintek Dendrill Indonesia
- India Bulls Power Limited - India
- Simpson Spence & Young - Indonesia
- Bukit Baiduri Energy - Indonesia
- McConnell Dowell - Australia
- Bharathi Cement Corporation - India
- Essar Steel Hazira Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- Siam City Cement - Thailand
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