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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, 11 January 12
NEWBUILDING ORDERS DECLINE, AS SHIP OWNERS REALIZE OVERSUPPLY WILL "KILL" THEM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With 2012 now underway, it will be rather interesting to see how ship owners will play the "newbuilding ordering" card to their favor, as ...
Tuesday, 10 January 12
THE 4TH DEEPWATER ASIA CONGRESS 2012 WILL KICK OFF ON MAY 23 - 25
Press release - Based on the past three years’ success, SZ & W Group is excited to announce the 4th Deepwater Asia Congress will be held o ...
Monday, 09 January 12
2012: WHAT WILL IT BRING FOR THE DRY BULK MARKET? - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A further increase in dry bulk demand could be the remedy for most of the industry's oversupply issues, together of course with the high level of s ...
Sunday, 08 January 12
ICICI OUTLOOK ON INDIAN POWER, MINING,CEMENT, AND SHIPPING SECTORS PERFORMANCE IN 2012
Broking firm, ICICIdirect (India) has come out with report on sectors outlook for 2012. IRIS has collated key highlights for each sector from ...
Sunday, 08 January 12
SUPRAMAX DELIVERY SOUTH CHINA FOR TRIPS VIA INDONESIA WERE REPORTED AROUND $ 7000 PER DAY - VISTAAR
Wish You a Very Happy and Prosperous New year 2012.
COALspot.com - The last report by us was on 16th Dec 2011 and because of holidays this would ...
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Showing 4891 to 4895 news of total 6871 |
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- Bhatia International Limited - India
- Price Waterhouse Coopers - Russia
- Coastal Gujarat Power Limited - India
- White Energy Company Limited
- Energy Link Ltd, New Zealand
- Uttam Galva Steels Limited - India
- McConnell Dowell - Australia
- European Bulk Services B.V. - Netherlands
- Trasteel International SA, Italy
- Coalindo Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- The State Trading Corporation of India Ltd
- Bhushan Steel Limited - India
- Ambuja Cements Ltd - India
- Economic Council, Georgia
- London Commodity Brokers - England
- Chettinad Cement Corporation Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Australian Commodity Traders Exchange
- Essar Steel Hazira Ltd - India
- Aboitiz Power Corporation - Philippines
- Thai Mozambique Logistica
- Altura Mining Limited, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Singapore Mercantile Exchange
- Jorong Barutama Greston.PT - Indonesia
- Jaiprakash Power Ventures ltd
- PowerSource Philippines DevCo
- Indika Energy - Indonesia
- Antam Resourcindo - Indonesia
- Bangladesh Power Developement Board
- Ministry of Transport, Egypt
- Madhucon Powers Ltd - India
- Binh Thuan Hamico - Vietnam
- Savvy Resources Ltd - HongKong
- Neyveli Lignite Corporation Ltd, - India
- Latin American Coal - Colombia
- Lanco Infratech Ltd - India
- Kepco SPC Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Sindya Power Generating Company Private Ltd
- Gujarat Mineral Development Corp Ltd - India
- Parry Sugars Refinery, India
- Larsen & Toubro Limited - India
- SN Aboitiz Power Inc, Philippines
- Thiess Contractors Indonesia
- GAC Shipping (India) Pvt Ltd
- Karbindo Abesyapradhi - Indoneisa
- Ind-Barath Power Infra Limited - India
- Formosa Plastics Group - Taiwan
- Central Java Power - Indonesia
- Indogreen Group - Indonesia
- Riau Bara Harum - Indonesia
- Bayan Resources Tbk. - Indonesia
- Vedanta Resources Plc - India
- Kapuas Tunggal Persada - Indonesia
- Eastern Energy - Thailand
- MS Steel International - UAE
- Meenaskhi Energy Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Sinarmas Energy and Mining - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Independent Power Producers Association of India
- Borneo Indobara - Indonesia
- Sree Jayajothi Cements Limited - India
- Tata Chemicals Ltd - India
- Samtan Co., Ltd - South Korea
- Edison Trading Spa - Italy
- Kaltim Prima Coal - Indonesia
- Petron Corporation, Philippines
- New Zealand Coal & Carbon
- Videocon Industries ltd - India
- Sarangani Energy Corporation, Philippines
- Mjunction Services Limited - India
- Eastern Coal Council - USA
- Sojitz Corporation - Japan
- Cement Manufacturers Association - India
- Iligan Light & Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Mintek Dendrill Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Heidelberg Cement - Germany
- Indonesian Coal Mining Association
- Karaikal Port Pvt Ltd - India
- Orica Mining Services - Indonesia
- Star Paper Mills Limited - India
- Coal and Oil Company - UAE
- Minerals Council of Australia
- Tamil Nadu electricity Board
- Siam City Cement - Thailand
- Marubeni Corporation - India
- Georgia Ports Authority, United States
- SMG Consultants - Indonesia
- PTC India Limited - India
- South Luzon Thermal Energy Corporation
- Intertek Mineral Services - Indonesia
- Renaissance Capital - South Africa
- Global Coal Blending Company Limited - Australia
- CIMB Investment Bank - Malaysia
- LBH Netherlands Bv - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Malabar Cements Ltd - India
- Standard Chartered Bank - UAE
- Medco Energi Mining Internasional
- ASAPP Information Group - India
- Ministry of Mines - Canada
- Agrawal Coal Company - India
- Africa Commodities Group - South Africa
- Toyota Tsusho Corporation, Japan
- Cigading International Bulk Terminal - Indonesia
- Xindia Steels Limited - India
- Jindal Steel & Power Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- CNBM International Corporation - China
- Carbofer General Trading SA - India
- Goldman Sachs - Singapore
- Therma Luzon, Inc, Philippines
- Salva Resources Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Electricity Authority, New Zealand
- Sical Logistics Limited - India
- Bhoruka Overseas - Indonesia
- Gujarat Sidhee Cement - India
- Vizag Seaport Private Limited - India
- Australian Coal Association
- Deloitte Consulting - India
- Mercuria Energy - Indonesia
- Makarim & Taira - Indonesia
- Simpson Spence & Young - Indonesia
- Pendopo Energi Batubara - Indonesia
- Interocean Group of Companies - India
- Manunggal Multi Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- GVK Power & Infra Limited - India
- Barasentosa Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- Meralco Power Generation, Philippines
- Kideco Jaya Agung - Indonesia
- Merrill Lynch Commodities Europe
- Aditya Birla Group - India
- Bukit Makmur.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
- SMC Global Power, Philippines
- Commonwealth Bank - Australia
- IHS Mccloskey Coal Group - USA
- Rashtriya Ispat Nigam Limited - India
- The University of Queensland
- Central Electricity Authority - India
- Dalmia Cement Bharat India
- PNOC Exploration Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- San Jose City I Power Corp, Philippines
- Orica Australia Pty. Ltd.
- Kobexindo Tractors - Indoneisa
- Baramulti Group, Indonesia
- Grasim Industreis Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- Bharathi Cement Corporation - India
- Bukit Baiduri Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining Corp, Philippines
- Kumho Petrochemical, South Korea
- Planning Commission, India
- Indian Energy Exchange, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Anglo American - United Kingdom
- Romanian Commodities Exchange
- Mercator Lines Limited - India
- Parliament of New Zealand
- Ministry of Finance - Indonesia
- Indian Oil Corporation Limited
- Port Waratah Coal Services - Australia
- Chamber of Mines of South Africa
- Electricity Generating Authority of Thailand
- Power Finance Corporation Ltd., India
- Attock Cement Pakistan Limited
- Bahari Cakrawala Sebuku - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vijayanagar Sugar Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- ICICI Bank Limited - India
- The Treasury - Australian Government
- Indo Tambangraya Megah - Indonesia
- Timah Investasi Mineral - Indoneisa
- Maheswari Brothers Coal Limited - India
- Holcim Trading Pte Ltd - Singapore
- Rio Tinto Coal - Australia
- Wilmar Investment Holdings
- Leighton Contractors Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- IEA Clean Coal Centre - UK
- OPG Power Generation Pvt Ltd - India
- VISA Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Sakthi Sugars Limited - India
- GMR Energy Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- India Bulls Power Limited - India
- Metalloyd Limited - United Kingdom
- Wood Mackenzie - Singapore
- Posco Energy - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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