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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, 22 December 11
RI WILL NOT PLAY CATCH-UP WITH GLOBAL COAL DEMAND - THE JAKARTA POST
The Jakarta Post reported that, the International Energy Agency (IEA) has predicted in its Coal Market Report 2011 that over the next five years, gl ...
Thursday, 22 December 11
DRY BULK MARKET KEEPS LOSING TRACTION AHEAD OF HOLIDAY SEASON - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept retreating in the middle of the week, as charterers seem to be looking towards the holiday season and the start of the new ye ...
Tuesday, 20 December 11
THE COAL IMPORT INTO CHINA WAS QUIETER AS COAL STOCKS WERE AT HIGH LEVELS - BRS
The BDI ended the week at 1888 points (-1.8%), the BCI corrected to 3572 (-3.4%), the BPI was up at 1,775 (+3.6%), the BSI dropped to 1193 (-3.0%) a ...
Tuesday, 20 December 11
INDIA IMPORTS 66.41 PERCENT MORE COAL FROM INDONESIA LAST MONTH - SOURCES
COALspot.com: Indonesia, the world largest coal exporter, shipped 33.476* mln mt of coal in November, which is slightly higher than its Octobe ...
Monday, 19 December 11
KOPEX COMMITS ADDITIONAL ONE MILLION DOLLAR FOR PT TRANSCOAL MINERGY
COALspot.com - Mining contractor Kopex has agreed to extend a further US$1 million to finance the remainder of the expanded drill program at PT Tran ...
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Showing 4921 to 4925 news of total 6871 |
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- European Bulk Services B.V. - Netherlands
- ASAPP Information Group - India
- Indo Tambangraya Megah - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Thiess Contractors Indonesia
- Orica Mining Services - Indonesia
- CIMB Investment Bank - Malaysia
- Wood Mackenzie - Singapore
- Banpu Public Company Limited - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Attock Cement Pakistan Limited
- Holcim Trading Pte Ltd - Singapore
- Minerals Council of Australia
- Tata Chemicals Ltd - India
- GVK Power & Infra Limited - India
- Simpson Spence & Young - Indonesia
- Meralco Power Generation, Philippines
- Romanian Commodities Exchange
- PTC India Limited - India
- Indogreen Group - Indonesia
- Binh Thuan Hamico - Vietnam
- Karaikal Port Pvt Ltd - India
- Independent Power Producers Association of India
- Global Coal Blending Company Limited - Australia
- Lanco Infratech Ltd - India
- Marubeni Corporation - India
- Mercator Lines Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Australian Coal Association
- Anglo American - United Kingdom
- Sakthi Sugars Limited - India
- Renaissance Capital - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Agrawal Coal Company - India
- Pendopo Energi Batubara - Indonesia
- Thai Mozambique Logistica
- Maheswari Brothers Coal Limited - India
- Dalmia Cement Bharat India
- CNBM International Corporation - China
- Siam City Cement PLC, Thailand
- Georgia Ports Authority, United States
- Indian Energy Exchange, India
- Port Waratah Coal Services - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Madhucon Powers Ltd - India
- International Coal Ventures Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- PowerSource Philippines DevCo
- Parry Sugars Refinery, India
- PNOC Exploration Corporation - Philippines
- Mjunction Services Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Vizag Seaport Private Limited - India
- Sical Logistics Limited - India
- ICICI Bank Limited - India
- Aditya Birla Group - India
- Jaiprakash Power Ventures ltd
- London Commodity Brokers - England
- LBH Netherlands Bv - Netherlands
- Eastern Coal Council - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Savvy Resources Ltd - HongKong
- Electricity Generating Authority of Thailand
- Karbindo Abesyapradhi - Indoneisa
- Bukit Baiduri Energy - Indonesia
- MS Steel International - UAE
- Salva Resources Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Malabar Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Straits Asia Resources Limited - Singapore
- Indonesian Coal Mining Association
- Riau Bara Harum - Indonesia
- Altura Mining Limited, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Vedanta Resources Plc - India
- Gujarat Mineral Development Corp Ltd - India
- McConnell Dowell - Australia
- The University of Queensland
- Ceylon Electricity Board - Sri Lanka
- Bhatia International Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Singapore Mercantile Exchange
- Siam City Cement - Thailand
- Central Java Power - Indonesia
- Uttam Galva Steels Limited - India
- Bhushan Steel Limited - India
- Price Waterhouse Coopers - Russia
- Directorate Of Revenue Intelligence - India
- Miang Besar Coal Terminal - Indonesia
- Borneo Indobara - Indonesia
- Toyota Tsusho Corporation, Japan
- Bahari Cakrawala Sebuku - Indonesia
- Manunggal Multi Energi - Indonesia
- Makarim & Taira - Indonesia
- Africa Commodities Group - South Africa
- Xindia Steels Limited - India
- Bharathi Cement Corporation - India
- Bukit Makmur.PT - Indonesia
- Wilmar Investment Holdings
- Gujarat Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Mintek Dendrill Indonesia
- India Bulls Power Limited - India
- TeaM Sual Corporation - Philippines
- Star Paper Mills Limited - India
- Bulk Trading Sa - Switzerland
- Bhoruka Overseas - Indonesia
- Samtan Co., Ltd - South Korea
- Chettinad Cement Corporation Ltd - India
- Bangladesh Power Developement Board
- Timah Investasi Mineral - Indoneisa
- Tamil Nadu electricity Board
- Videocon Industries ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Carbofer General Trading SA - India
- Neyveli Lignite Corporation Ltd, - India
- GN Power Mariveles Coal Plant, Philippines
- Petron Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- IEA Clean Coal Centre - UK
- Jorong Barutama Greston.PT - Indonesia
- Coalindo Energy - Indonesia
- Ministry of Mines - Canada
- Directorate General of MIneral and Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Electricity Authority, New Zealand
- VISA Power Limited - India
- Merrill Lynch Commodities Europe
- Kumho Petrochemical, South Korea
- Semirara Mining Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Krishnapatnam Port Company Ltd. - India
- Kaltim Prima Coal - Indonesia
- White Energy Company Limited
- GMR Energy Limited - India
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Kepco SPC Power Corporation, Philippines
- SMC Global Power, Philippines
- Medco Energi Mining Internasional
- Bukit Asam (Persero) Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- Ministry of Finance - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Oldendorff Carriers - Singapore
- Standard Chartered Bank - UAE
- The Treasury - Australian Government
- Energy Link Ltd, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Transport, Egypt
- Power Finance Corporation Ltd., India
- Iligan Light & Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Ambuja Cements Ltd - India
- Parliament of New Zealand
- Eastern Energy - Thailand
- IHS Mccloskey Coal Group - USA
- Global Business Power Corporation, Philippines
- New Zealand Coal & Carbon
- Larsen & Toubro Limited - India
- Posco Energy - South Korea
- OPG Power Generation Pvt Ltd - India
- Coal and Oil Company - UAE
- Sindya Power Generating Company Private Ltd
- Trasteel International SA, Italy
- Baramulti Group, Indonesia
- SMG Consultants - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Orica Australia Pty. Ltd.
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercuria Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kobexindo Tractors - Indoneisa
- Sarangani Energy Corporation, Philippines
- Central Electricity Authority - India
- Edison Trading Spa - Italy
- Deloitte Consulting - India
- Antam Resourcindo - Indonesia
- Commonwealth Bank - Australia
- AsiaOL BioFuels Corp., Philippines
- Maharashtra Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Interocean Group of Companies - India
- Globalindo Alam Lestari - Indonesia
- Chamber of Mines of South Africa
- The State Trading Corporation of India Ltd
- Jindal Steel & Power Ltd - India
- SN Aboitiz Power Inc, Philippines
- Latin American Coal - Colombia
- Formosa Plastics Group - Taiwan
- Australian Commodity Traders Exchange
- Sinarmas Energy and Mining - Indonesia
- Kartika Selabumi Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Economic Council, Georgia
- Kideco Jaya Agung - Indonesia
- Gujarat Sidhee Cement - India
- Heidelberg Cement - Germany
- San Jose City I Power Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Energy Development Corp, Philippines
- Indika Energy - Indonesia
- Planning Commission, India
- Pipit Mutiara Jaya. PT, Indonesia
- Goldman Sachs - Singapore
- Cement Manufacturers Association - India
- Leighton Contractors Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Intertek Mineral Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Indian Oil Corporation Limited
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