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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, 22 June 11
BOOMING INDONESIAN COAL EXPORTS - BLEEDING INDIAN POWER INDUSTRY
COALspot.com - Indonesia shipped 28.962 Million tons of coal in May 2011, up by 15.86 percent compared to April export of about 24.995 m ...
Tuesday, 21 June 11
SURGE IN PRODUCTION AND PRICES TO PUSH BUKIT ASAMS NET PROFITS ABOVE RP 3T - THE JAKARTA GLOBE
State-owned coal company Perusahaan Tambang Batubara Bukit Asam expects its net income to increase about 50 percent this year on the back of rising ...
Tuesday, 21 June 11
COURT BATTLE PUTS MASSIVE COAL PROJECT IN JEOPARDY - KOREA JOONGANG DAILY
As Korean companies race to exploit Indonesia’s abundant natural resources, two companies have been locked in a court case that has become so ...
Tuesday, 21 June 11
DRY BULK MARKET TURNS RED AGAIN ON VESSEL OVERSUPPLY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk entered this week on a negative turn, with the industry’s benchmark the Baltic Dry Index (BDI) retreating by 0.35% to end the ses ...
Monday, 20 June 11
KPCL SETS ALL INDIA & POSSIBLY A WORLD RECORD FOR COAL DISCHARGING
COALspot.com - Krishnapatnam Port has set an all India record for discharging 95,528 tons of steam coal in just 24 hrs using the conventional unload ...
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Showing 5216 to 5220 news of total 6871 |
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- Jorong Barutama Greston.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- CNBM International Corporation - China
- OPG Power Generation Pvt Ltd - India
- Grasim Industreis Ltd - India
- Sindya Power Generating Company Private Ltd
- Rio Tinto Coal - Australia
- Samtan Co., Ltd - South Korea
- Globalindo Alam Lestari - Indonesia
- Ministry of Transport, Egypt
- Savvy Resources Ltd - HongKong
- Indian Oil Corporation Limited
- Australian Coal Association
- Goldman Sachs - Singapore
- Metalloyd Limited - United Kingdom
- Formosa Plastics Group - Taiwan
- London Commodity Brokers - England
- Semirara Mining and Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- McConnell Dowell - Australia
- Bhatia International Limited - India
- Georgia Ports Authority, United States
- Eastern Coal Council - USA
- Riau Bara Harum - Indonesia
- Electricity Generating Authority of Thailand
- Directorate General of MIneral and Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Banpu Public Company Limited - Thailand
- Indogreen Group - Indonesia
- Romanian Commodities Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- LBH Netherlands Bv - Netherlands
- Bangladesh Power Developement Board
- Kobexindo Tractors - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Java Power - Indonesia
- Cement Manufacturers Association - India
- Kartika Selabumi Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Videocon Industries ltd - India
- New Zealand Coal & Carbon
- Singapore Mercantile Exchange
- Pendopo Energi Batubara - Indonesia
- Mintek Dendrill Indonesia
- Altura Mining Limited, Indonesia
- Heidelberg Cement - Germany
- Makarim & Taira - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Medco Energi Mining Internasional
- Vizag Seaport Private Limited - India
- Bayan Resources Tbk. - Indonesia
- TeaM Sual Corporation - Philippines
- Ministry of Finance - Indonesia
- Uttam Galva Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Borneo Indobara - Indonesia
- Parliament of New Zealand
- Parry Sugars Refinery, India
- Standard Chartered Bank - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Barasentosa Lestari - Indonesia
- Sical Logistics Limited - India
- India Bulls Power Limited - India
- Baramulti Group, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Aditya Birla Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Development Corp, Philippines
- Bharathi Cement Corporation - India
- Kumho Petrochemical, South Korea
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- Anglo American - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- Vedanta Resources Plc - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Larsen & Toubro Limited - India
- Antam Resourcindo - Indonesia
- PNOC Exploration Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Oldendorff Carriers - Singapore
- GMR Energy Limited - India
- Sarangani Energy Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Australian Commodity Traders Exchange
- Mercuria Energy - Indonesia
- Electricity Authority, New Zealand
- The University of Queensland
- Madhucon Powers Ltd - India
- Dalmia Cement Bharat India
- Coalindo Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Straits Asia Resources Limited - Singapore
- Coastal Gujarat Power Limited - India
- Essar Steel Hazira Ltd - India
- Mjunction Services Limited - India
- Star Paper Mills Limited - India
- Tata Chemicals Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Iligan Light & Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- MS Steel International - UAE
- Indian Energy Exchange, India
- Siam City Cement PLC, Thailand
- Agrawal Coal Company - India
- Aboitiz Power Corporation - Philippines
- Siam City Cement - Thailand
- Karaikal Port Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Karbindo Abesyapradhi - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IEA Clean Coal Centre - UK
- Orica Mining Services - Indonesia
- Eastern Energy - Thailand
- ASAPP Information Group - India
- Ministry of Mines - Canada
- Bukit Baiduri Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- PetroVietnam Power Coal Import and Supply Company
- Sree Jayajothi Cements Limited - India
- Minerals Council of Australia
- SMC Global Power, Philippines
- Indika Energy - Indonesia
- Edison Trading Spa - Italy
- Chettinad Cement Corporation Ltd - India
- Salva Resources Pvt Ltd - India
- Interocean Group of Companies - India
- Central Electricity Authority - India
- The Treasury - Australian Government
- Sojitz Corporation - Japan
- Gujarat Sidhee Cement - India
- Timah Investasi Mineral - Indoneisa
- Bukit Makmur.PT - Indonesia
- SMG Consultants - Indonesia
- Posco Energy - South Korea
- Holcim Trading Pte Ltd - Singapore
- GAC Shipping (India) Pvt Ltd
- Attock Cement Pakistan Limited
- Maheswari Brothers Coal Limited - India
- Planning Commission, India
- Thai Mozambique Logistica
- South Luzon Thermal Energy Corporation
- Carbofer General Trading SA - India
- VISA Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Orica Australia Pty. Ltd.
- Therma Luzon, Inc, Philippines
- Merrill Lynch Commodities Europe
- Commonwealth Bank - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Cigading International Bulk Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Sinarmas Energy and Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- Meenaskhi Energy Private Limited - India
- ICICI Bank Limited - India
- Global Green Power PLC Corporation, Philippines
- Port Waratah Coal Services - Australia
- IHS Mccloskey Coal Group - USA
- Mercator Lines Limited - India
- Renaissance Capital - South Africa
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Independent Power Producers Association of India
- Toyota Tsusho Corporation, Japan
- Sakthi Sugars Limited - India
- PTC India Limited - India
- PowerSource Philippines DevCo
- Intertek Mineral Services - Indonesia
- Wood Mackenzie - Singapore
- Price Waterhouse Coopers - Russia
- White Energy Company Limited
- Kalimantan Lumbung Energi - Indonesia
- Tamil Nadu electricity Board
- Kideco Jaya Agung - Indonesia
- Thiess Contractors Indonesia
- Economic Council, Georgia
- GVK Power & Infra Limited - India
- Chamber of Mines of South Africa
- Bhushan Steel Limited - India
- Meralco Power Generation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Deloitte Consulting - India
- Africa Commodities Group - South Africa
- European Bulk Services B.V. - Netherlands
- Latin American Coal - Colombia
- The State Trading Corporation of India Ltd
- Binh Thuan Hamico - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- Simpson Spence & Young - Indonesia
- Coal and Oil Company - UAE
- Kaltim Prima Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Malabar Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- San Jose City I Power Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Xindia Steels Limited - India
- Lanco Infratech Ltd - India
- Ind-Barath Power Infra Limited - India
- Marubeni Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Petron Corporation, Philippines
- Trasteel International SA, Italy
- Wilmar Investment Holdings
- Ambuja Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Global Business Power Corporation, Philippines
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