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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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Wednesday, 10 August 11
KILLARA RESOURCES TO ACQUIRE SIX COAL CONCESSIONS OF TASON HOLDINGS
COALspot.com - Killara Resources Limited, an Australian listed company has formed PT Tavesco Killara Energy (TKE), a joint company with PT Tavesco I ...
Wednesday, 10 August 11
RESOURCE NATIONALISM IS MAIN BUSINESS RISK FOR MINING SECTORS, E&Y SURVEY
Resource nationalism is top of the business risk list for mining and metals companies around the world, while supply capacity constraint issues cont ...
Wednesday, 10 August 11
INDONESIAN COAL MINING ASSOCIATION OPPOSES LOW-GRADE COAL EXPORT BAN
COALspot.com - The Indonesian Coal Mining Association (ICMA) frowns on and challenges the government plan to ban the low-grade coal export inf ...
Wednesday, 10 August 11
ABM INVESTAMA TO OFFLOAD 20% IPO
Integrated coal mining PT ABM Investama, affiliated company of Tiara Marga Trakindo Group, aims to dispose 20% stake during an initial public offeri ...
Tuesday, 09 August 11
INDONESIAS COAL PRODUCTION GREW BY 19.4% LAST YEAR - BP
COALspot.com - Indonesia’s coal production grew by 19.4% last year to 305.879 million tonnes from 256.181 million tonnes in 2009, the fastest ...
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Showing 5146 to 5150 news of total 6871 |
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- Sojitz Corporation - Japan
- Ministry of Mines - Canada
- Samtan Co., Ltd - South Korea
- Wood Mackenzie - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Bhoruka Overseas - Indonesia
- Larsen & Toubro Limited - India
- Manunggal Multi Energi - Indonesia
- Gujarat Sidhee Cement - India
- San Jose City I Power Corp, Philippines
- Marubeni Corporation - India
- OPG Power Generation Pvt Ltd - India
- The Treasury - Australian Government
- Holcim Trading Pte Ltd - Singapore
- Port Waratah Coal Services - Australia
- Indonesian Coal Mining Association
- Indo Tambangraya Megah - Indonesia
- Timah Investasi Mineral - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Electricity Regulatory Commission - India
- Intertek Mineral Services - Indonesia
- Price Waterhouse Coopers - Russia
- AsiaOL BioFuels Corp., Philippines
- Xindia Steels Limited - India
- Indika Energy - Indonesia
- India Bulls Power Limited - India
- Standard Chartered Bank - UAE
- Malabar Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- Tata Chemicals Ltd - India
- Coastal Gujarat Power Limited - India
- Ministry of Transport, Egypt
- Bulk Trading Sa - Switzerland
- Trasteel International SA, Italy
- Sarangani Energy Corporation, Philippines
- Merrill Lynch Commodities Europe
- Kobexindo Tractors - Indoneisa
- Medco Energi Mining Internasional
- Global Business Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Orica Australia Pty. Ltd.
- Georgia Ports Authority, United States
- Semirara Mining and Power Corporation, Philippines
- Mjunction Services Limited - India
- Maheswari Brothers Coal Limited - India
- Simpson Spence & Young - Indonesia
- Bangladesh Power Developement Board
- Bayan Resources Tbk. - Indonesia
- Heidelberg Cement - Germany
- Indogreen Group - Indonesia
- Essar Steel Hazira Ltd - India
- Carbofer General Trading SA - India
- Banpu Public Company Limited - Thailand
- Siam City Cement - Thailand
- Mintek Dendrill Indonesia
- Directorate General of MIneral and Coal - Indonesia
- MS Steel International - UAE
- Jindal Steel & Power Ltd - India
- ASAPP Information Group - India
- GAC Shipping (India) Pvt Ltd
- LBH Netherlands Bv - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- PTC India Limited - India
- Globalindo Alam Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Altura Mining Limited, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sindya Power Generating Company Private Ltd
- Kumho Petrochemical, South Korea
- GVK Power & Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- London Commodity Brokers - England
- Interocean Group of Companies - India
- Dalmia Cement Bharat India
- Rashtriya Ispat Nigam Limited - India
- Aditya Birla Group - India
- Bharathi Cement Corporation - India
- IEA Clean Coal Centre - UK
- Energy Link Ltd, New Zealand
- Kapuas Tunggal Persada - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Central Electricity Authority - India
- Mercator Lines Limited - India
- Savvy Resources Ltd - HongKong
- Barasentosa Lestari - Indonesia
- Sical Logistics Limited - India
- Ambuja Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Cement Manufacturers Association - India
- Global Green Power PLC Corporation, Philippines
- Baramulti Group, Indonesia
- Uttam Galva Steels Limited - India
- Singapore Mercantile Exchange
- Chettinad Cement Corporation Ltd - India
- PowerSource Philippines DevCo
- Leighton Contractors Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Electricity Generating Authority of Thailand
- Australian Commodity Traders Exchange
- Coalindo Energy - Indonesia
- Mercuria Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Eastern Energy - Thailand
- Alfred C Toepfer International GmbH - Germany
- Australian Coal Association
- Central Java Power - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Indian Energy Exchange, India
- Energy Development Corp, Philippines
- Videocon Industries ltd - India
- Parry Sugars Refinery, India
- ICICI Bank Limited - India
- CIMB Investment Bank - Malaysia
- The University of Queensland
- Karaikal Port Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Goldman Sachs - Singapore
- Kideco Jaya Agung - Indonesia
- Siam City Cement PLC, Thailand
- Kohat Cement Company Ltd. - Pakistan
- SN Aboitiz Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Africa Commodities Group - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Thai Mozambique Logistica
- Tamil Nadu electricity Board
- Power Finance Corporation Ltd., India
- Latin American Coal - Colombia
- Straits Asia Resources Limited - Singapore
- Vedanta Resources Plc - India
- South Luzon Thermal Energy Corporation
- Cigading International Bulk Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Petron Corporation, Philippines
- SMC Global Power, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Coal Council - USA
- Thiess Contractors Indonesia
- Economic Council, Georgia
- Agrawal Coal Company - India
- Edison Trading Spa - Italy
- Bukit Asam (Persero) Tbk - Indonesia
- White Energy Company Limited
- CNBM International Corporation - China
- Lanco Infratech Ltd - India
- Vizag Seaport Private Limited - India
- Grasim Industreis Ltd - India
- Coal and Oil Company - UAE
- Sree Jayajothi Cements Limited - India
- Bukit Makmur.PT - Indonesia
- Therma Luzon, Inc, Philippines
- Attock Cement Pakistan Limited
- Minerals Council of Australia
- Planning Commission, India
- Pendopo Energi Batubara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meralco Power Generation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Renaissance Capital - South Africa
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- Borneo Indobara - Indonesia
- Parliament of New Zealand
- Posco Energy - South Korea
- Makarim & Taira - Indonesia
- TeaM Sual Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Sakthi Sugars Limited - India
- Binh Thuan Hamico - Vietnam
- Deloitte Consulting - India
- PNOC Exploration Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Rio Tinto Coal - Australia
- Chamber of Mines of South Africa
- GMR Energy Limited - India
- Antam Resourcindo - Indonesia
- Star Paper Mills Limited - India
- Electricity Authority, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Ind-Barath Power Infra Limited - India
- New Zealand Coal & Carbon
- Independent Power Producers Association of India
- GN Power Mariveles Coal Plant, Philippines
- VISA Power Limited - India
- Bhatia International Limited - India
- Ceylon Electricity Board - Sri Lanka
- Global Coal Blending Company Limited - Australia
- Wilmar Investment Holdings
- Directorate Of Revenue Intelligence - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Salva Resources Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Formosa Plastics Group - Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Anglo American - United Kingdom
- Orica Mining Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- McConnell Dowell - Australia
- Aboitiz Power Corporation - Philippines
- Commonwealth Bank - Australia
- SMG Consultants - Indonesia
- Toyota Tsusho Corporation, Japan
- Kepco SPC Power Corporation, Philippines
- Romanian Commodities Exchange
- Ministry of Finance - Indonesia
- Metalloyd Limited - United Kingdom
- Madhucon Powers Ltd - India
- IHS Mccloskey Coal Group - USA
- The State Trading Corporation of India Ltd
- Indian Oil Corporation Limited
- Semirara Mining Corp, Philippines
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