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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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Thursday, 29 December 11
NEW VESSELS DELIVERED ARE FLOODING THE OCEANS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
As expected 2011 has been the year that newbuilding deliveries peaked and kept "flooding" the market, thus supressing freight rates and er ...
Tuesday, 27 December 11
MINERS MAKE CASE FOR RESUMING CONTRACT NEGOTIATIONS - THE JAKARTA POST
The Jakarta Post reported that, problems with the renegotiation of mining contracts in the country are far from over, as agreements on several cruci ...
Tuesday, 27 December 11
COAL SHIPMENT OF TIANJIN PORT REACHED 6.72 MLN TONNES IN NOVEMBER - STEEL HOME / HELLENIC SHIPPING
Tianjin port shipped 6.72 million tonnes of coal in November, decreasing 600,000 tonnes versus 7.32 million tonnes in October, while up 21.09% or 1. ...
Tuesday, 27 December 11
NEW CLAUSE PUBLISHED FOR SLOW STEAMING - BIMCO
Many owners and operators faced with high bunker prices are considering implementing slow steaming regimes to save fuel and to assist with capacity ...
Monday, 26 December 11
NEW EXPORT TAX PLAN GREETED WITH PRAISE AND CRITICISM - THE JAKARTA POST
The Jakarta Post, one of the Indonesia's leading english news paper reported that, both praise and criticism showered the government’s plan t ...
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Showing 4911 to 4915 news of total 6871 |
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- TNB Fuel Sdn Bhd - Malaysia
- Banpu Public Company Limited - Thailand
- Trasteel International SA, Italy
- White Energy Company Limited
- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
- Barasentosa Lestari - Indonesia
- Electricity Authority, New Zealand
- MS Steel International - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Edison Trading Spa - Italy
- Asmin Koalindo Tuhup - Indonesia
- Karaikal Port Pvt Ltd - India
- ICICI Bank Limited - India
- Meenaskhi Energy Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tamil Nadu electricity Board
- India Bulls Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indogreen Group - Indonesia
- Samtan Co., Ltd - South Korea
- Parliament of New Zealand
- Timah Investasi Mineral - Indoneisa
- CNBM International Corporation - China
- Bulk Trading Sa - Switzerland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mjunction Services Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Indika Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- IEA Clean Coal Centre - UK
- Siam City Cement - Thailand
- Manunggal Multi Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- The State Trading Corporation of India Ltd
- Sical Logistics Limited - India
- Petron Corporation, Philippines
- Orica Mining Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Wood Mackenzie - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Jorong Barutama Greston.PT - Indonesia
- Therma Luzon, Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Posco Energy - South Korea
- Formosa Plastics Group - Taiwan
- Directorate Of Revenue Intelligence - India
- Australian Commodity Traders Exchange
- CIMB Investment Bank - Malaysia
- McConnell Dowell - Australia
- Romanian Commodities Exchange
- Bukit Baiduri Energy - Indonesia
- Indonesian Coal Mining Association
- Pendopo Energi Batubara - Indonesia
- Global Business Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Chettinad Cement Corporation Ltd - India
- Salva Resources Pvt Ltd - India
- Attock Cement Pakistan Limited
- Metalloyd Limited - United Kingdom
- Grasim Industreis Ltd - India
- Uttam Galva Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Standard Chartered Bank - UAE
- LBH Netherlands Bv - Netherlands
- SN Aboitiz Power Inc, Philippines
- Bangladesh Power Developement Board
- Eastern Energy - Thailand
- Alfred C Toepfer International GmbH - Germany
- Billiton Holdings Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Energy Link Ltd, New Zealand
- Ministry of Finance - Indonesia
- SMG Consultants - Indonesia
- Tata Chemicals Ltd - India
- Mercator Lines Limited - India
- Cement Manufacturers Association - India
- Ministry of Transport, Egypt
- Simpson Spence & Young - Indonesia
- GMR Energy Limited - India
- Baramulti Group, Indonesia
- Latin American Coal - Colombia
- Power Finance Corporation Ltd., India
- Intertek Mineral Services - Indonesia
- Agrawal Coal Company - India
- Xindia Steels Limited - India
- Africa Commodities Group - South Africa
- Kobexindo Tractors - Indoneisa
- Altura Mining Limited, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Global Green Power PLC Corporation, Philippines
- PTC India Limited - India
- Straits Asia Resources Limited - Singapore
- European Bulk Services B.V. - Netherlands
- IHS Mccloskey Coal Group - USA
- Star Paper Mills Limited - India
- Orica Australia Pty. Ltd.
- Globalindo Alam Lestari - Indonesia
- Electricity Generating Authority of Thailand
- PowerSource Philippines DevCo
- Eastern Coal Council - USA
- Port Waratah Coal Services - Australia
- Planning Commission, India
- Independent Power Producers Association of India
- Thiess Contractors Indonesia
- Indian Energy Exchange, India
- Global Coal Blending Company Limited - Australia
- Anglo American - United Kingdom
- Oldendorff Carriers - Singapore
- Videocon Industries ltd - India
- Bhoruka Overseas - Indonesia
- Wilmar Investment Holdings
- Chamber of Mines of South Africa
- Merrill Lynch Commodities Europe
- Kumho Petrochemical, South Korea
- Sinarmas Energy and Mining - Indonesia
- The University of Queensland
- Aboitiz Power Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- GVK Power & Infra Limited - India
- Larsen & Toubro Limited - India
- Mintek Dendrill Indonesia
- Neyveli Lignite Corporation Ltd, - India
- London Commodity Brokers - England
- Energy Development Corp, Philippines
- Malabar Cements Ltd - India
- Interocean Group of Companies - India
- GN Power Mariveles Coal Plant, Philippines
- Jaiprakash Power Ventures ltd
- Kalimantan Lumbung Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Coal and Oil Company - UAE
- Sojitz Corporation - Japan
- VISA Power Limited - India
- Vedanta Resources Plc - India
- Ind-Barath Power Infra Limited - India
- Riau Bara Harum - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kideco Jaya Agung - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- Sakthi Sugars Limited - India
- Leighton Contractors Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- International Coal Ventures Pvt Ltd - India
- Mercuria Energy - Indonesia
- Australian Coal Association
- Gujarat Mineral Development Corp Ltd - India
- Minerals Council of Australia
- Carbofer General Trading SA - India
- Ambuja Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Vizag Seaport Private Limited - India
- Commonwealth Bank - Australia
- San Jose City I Power Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bharathi Cement Corporation - India
- Bhushan Steel Limited - India
- Rio Tinto Coal - Australia
- Thai Mozambique Logistica
- Parry Sugars Refinery, India
- Deloitte Consulting - India
- Semirara Mining Corp, Philippines
- Meralco Power Generation, Philippines
- Sindya Power Generating Company Private Ltd
- PNOC Exploration Corporation - Philippines
- Aditya Birla Group - India
- Savvy Resources Ltd - HongKong
- SMC Global Power, Philippines
- Gujarat Sidhee Cement - India
- Toyota Tsusho Corporation, Japan
- Krishnapatnam Port Company Ltd. - India
- Georgia Ports Authority, United States
- Holcim Trading Pte Ltd - Singapore
- Renaissance Capital - South Africa
- Dalmia Cement Bharat India
- Madhucon Powers Ltd - India
- Semirara Mining and Power Corporation, Philippines
- New Zealand Coal & Carbon
- Coalindo Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Makarim & Taira - Indonesia
- Central Java Power - Indonesia
- Goldman Sachs - Singapore
- Lanco Infratech Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Economic Council, Georgia
- Maheswari Brothers Coal Limited - India
- Binh Thuan Hamico - Vietnam
- Siam City Cement PLC, Thailand
- Ministry of Mines - Canada
- Kapuas Tunggal Persada - Indonesia
- The Treasury - Australian Government
- Singapore Mercantile Exchange
- Bhatia International Limited - India
- Indian Oil Corporation Limited
- Central Electricity Authority - India
- South Luzon Thermal Energy Corporation
- Price Waterhouse Coopers - Russia
- Coastal Gujarat Power Limited - India
- ASAPP Information Group - India
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