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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, 25 December 11
THERMAL COAL PRICES GAINED UP TO 4.32 PERCENT
COALspot.com - globalCOAL index gained 4.32 percent to US$106.36 per ton in RBCT, benchmark for South Asia and West Europe markets, for the week end ...
Saturday, 24 December 11
CHINAS LEVEL OF GROWTH TO DETERMINE COURSE OF DRY BULK MARKET IN 2012 SAYS SHIPBROKER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest report, shipbroker Intermodal attempted to find a silver lining in the tough year that was 2011, as well as what one could expect from ...
Friday, 23 December 11
SPOT PACIFIC CAPESIZE VESSELS HAVE COMMANDED HIGH PREMIUMS - FEARNLEYS
Handy
Rates in the Atlantic kept stable from last week, with a touch of negativity closer to the end. Less spot cargoes seen, and owners are ...
Friday, 23 December 11
CONTENTIOUS ISSUES IN CONTRACT RENEGOTIATION - THE JAKARTA POST
The government has been renegotiating mining contracts, especially those 30-40 years old, with almost all mining companies, including PT Freeport In ...
Friday, 23 December 11
LANCO JOINS HANDS WITH BUKIT ASAM FOR INDONESIAN POWER PROJECT
COALspot.com - PT Tambang Batubara Bukit Asam, Indonesia's state owned coal miner and Indian based Lanco Infratech Ltd plans to build steam power p ...
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Showing 4916 to 4920 news of total 6871 |
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- Formosa Plastics Group - Taiwan
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Riau Bara Harum - Indonesia
- Mintek Dendrill Indonesia
- CIMB Investment Bank - Malaysia
- Africa Commodities Group - South Africa
- Intertek Mineral Services - Indonesia
- Petron Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Kaltim Prima Coal - Indonesia
- Romanian Commodities Exchange
- Minerals Council of Australia
- Meralco Power Generation, Philippines
- Ind-Barath Power Infra Limited - India
- Borneo Indobara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- Central Electricity Authority - India
- Videocon Industries ltd - India
- The University of Queensland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Independent Power Producers Association of India
- Electricity Generating Authority of Thailand
- Aditya Birla Group - India
- Meenaskhi Energy Private Limited - India
- Essar Steel Hazira Ltd - India
- Sarangani Energy Corporation, Philippines
- Medco Energi Mining Internasional
- Kohat Cement Company Ltd. - Pakistan
- Port Waratah Coal Services - Australia
- Savvy Resources Ltd - HongKong
- GMR Energy Limited - India
- Heidelberg Cement - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhoruka Overseas - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- Alfred C Toepfer International GmbH - Germany
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- IEA Clean Coal Centre - UK
- The State Trading Corporation of India Ltd
- Rio Tinto Coal - Australia
- Goldman Sachs - Singapore
- PNOC Exploration Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Edison Trading Spa - Italy
- Maheswari Brothers Coal Limited - India
- Marubeni Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Sical Logistics Limited - India
- Renaissance Capital - South Africa
- Rashtriya Ispat Nigam Limited - India
- Banpu Public Company Limited - Thailand
- Georgia Ports Authority, United States
- Larsen & Toubro Limited - India
- Bangladesh Power Developement Board
- Planning Commission, India
- Asmin Koalindo Tuhup - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bukit Makmur.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- VISA Power Limited - India
- Bhushan Steel Limited - India
- Barasentosa Lestari - Indonesia
- Eastern Energy - Thailand
- Vizag Seaport Private Limited - India
- Iligan Light & Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- OPG Power Generation Pvt Ltd - India
- Indian Energy Exchange, India
- Indonesian Coal Mining Association
- Chamber of Mines of South Africa
- Lanco Infratech Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Attock Cement Pakistan Limited
- Antam Resourcindo - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Authority, New Zealand
- Dalmia Cement Bharat India
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Sidhee Cement - India
- Kartika Selabumi Mining - Indonesia
- Vedanta Resources Plc - India
- Xindia Steels Limited - India
- Cement Manufacturers Association - India
- Directorate General of MIneral and Coal - Indonesia
- SMC Global Power, Philippines
- Kideco Jaya Agung - Indonesia
- Thai Mozambique Logistica
- Grasim Industreis Ltd - India
- Trasteel International SA, Italy
- Vijayanagar Sugar Pvt Ltd - India
- Wood Mackenzie - Singapore
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Eastern Coal Council - USA
- Latin American Coal - Colombia
- Posco Energy - South Korea
- ASAPP Information Group - India
- Indo Tambangraya Megah - Indonesia
- GAC Shipping (India) Pvt Ltd
- Australian Coal Association
- Manunggal Multi Energi - Indonesia
- New Zealand Coal & Carbon
- Karaikal Port Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- LBH Netherlands Bv - Netherlands
- International Coal Ventures Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- India Bulls Power Limited - India
- Interocean Group of Companies - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indogreen Group - Indonesia
- Toyota Tsusho Corporation, Japan
- Tata Chemicals Ltd - India
- Sree Jayajothi Cements Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Merrill Lynch Commodities Europe
- Sojitz Corporation - Japan
- Indian Oil Corporation Limited
- Bharathi Cement Corporation - India
- Bhatia International Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Economic Council, Georgia
- European Bulk Services B.V. - Netherlands
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- London Commodity Brokers - England
- Straits Asia Resources Limited - Singapore
- Leighton Contractors Pty Ltd - Australia
- Mercator Lines Limited - India
- IHS Mccloskey Coal Group - USA
- Tamil Nadu electricity Board
- Chettinad Cement Corporation Ltd - India
- MS Steel International - UAE
- Kumho Petrochemical, South Korea
- AsiaOL BioFuels Corp., Philippines
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining Corp, Philippines
- Mercuria Energy - Indonesia
- The Treasury - Australian Government
- PetroVietnam Power Coal Import and Supply Company
- Altura Mining Limited, Indonesia
- PTC India Limited - India
- Makarim & Taira - Indonesia
- Wilmar Investment Holdings
- White Energy Company Limited
- Holcim Trading Pte Ltd - Singapore
- Deloitte Consulting - India
- Jaiprakash Power Ventures ltd
- Coastal Gujarat Power Limited - India
- South Luzon Thermal Energy Corporation
- Miang Besar Coal Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Global Coal Blending Company Limited - Australia
- Parliament of New Zealand
- Semirara Mining and Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Agrawal Coal Company - India
- Ambuja Cements Ltd - India
- Carbofer General Trading SA - India
- TeaM Sual Corporation - Philippines
- Power Finance Corporation Ltd., India
- Malabar Cements Ltd - India
- Sakthi Sugars Limited - India
- Cigading International Bulk Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Anglo American - United Kingdom
- Central Java Power - Indonesia
- Directorate Of Revenue Intelligence - India
- Ministry of Transport, Egypt
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Link Ltd, New Zealand
- CNBM International Corporation - China
- Bukit Asam (Persero) Tbk - Indonesia
- Indika Energy - Indonesia
- Baramulti Group, Indonesia
- Orica Australia Pty. Ltd.
- ICICI Bank Limited - India
- Coal and Oil Company - UAE
- Pendopo Energi Batubara - Indonesia
- Star Paper Mills Limited - India
- Orica Mining Services - Indonesia
- Siam City Cement PLC, Thailand
- Aboitiz Power Corporation - Philippines
- Australian Commodity Traders Exchange
- Thiess Contractors Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Siam City Cement - Thailand
- Standard Chartered Bank - UAE
- Madhucon Powers Ltd - India
- Energy Development Corp, Philippines
- Mjunction Services Limited - India
- PowerSource Philippines DevCo
- SN Aboitiz Power Inc, Philippines
- GVK Power & Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Singapore Mercantile Exchange
- SMG Consultants - Indonesia
- Bukit Baiduri Energy - Indonesia
- Global Business Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Therma Luzon, Inc, Philippines
- Binh Thuan Hamico - Vietnam
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