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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, 15 December 11
DRY BULK RATES TO REMAIN AT CURRENT LEVELS FOR THE MOST PART IN THE COMING MONTHS SAYS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest research note, BIMCO said that the Capesize Time Charter Average will remain at USD 20,000-30,000 per day but the tonnage oversupply w ...
Wednesday, 14 December 11
MINER TOBA BARA SEJAHTRA PLANS IPO IN 1ST HALF OF 2012 - THE JAKARTA GLOBE
The Jakarta Globe reported that, Coal miner Toba Bara Sejahtra is aiming high next year, hoping to capitalize on renewed bullish sentiment in the lo ...
Wednesday, 14 December 11
TIMAH PLANS TO BOOST ITS COAL PRODUCTION TO TWO MILLION TONS PER ANNUM - SOURCES
COALspot.com - Timah plans to boost its coal production to two million tons per annum. The company also expects to acquire coal concession with mini ...
Wednesday, 14 December 11
BORNEO RESOURCE INVESTMENTS LTD. FINALIZES ACQUISITION OF INTEGRA PRIMA
COALspot.com - Borneo Resource Investments Ltd., announced that it has finalized the acquisition of an additional 1,300 hectare coal mining concessi ...
Tuesday, 13 December 11
BERAU COAL SCOUTS US$1.61 BIO SALES - INSIDER STORIES
Insider Stories reported that, coal mining company PT Berau Coal Energy Tbk (BRAU), that is 85% owned by London-listed company Bumi Plc, estimates a ...
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Showing 4931 to 4935 news of total 6871 |
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- GVK Power & Infra Limited - India
- Semirara Mining Corp, Philippines
- MS Steel International - UAE
- Port Waratah Coal Services - Australia
- Siam City Cement PLC, Thailand
- Asmin Koalindo Tuhup - Indonesia
- Central Electricity Authority - India
- Gujarat Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Timah Investasi Mineral - Indoneisa
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
- Maheswari Brothers Coal Limited - India
- Manunggal Multi Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Posco Energy - South Korea
- Energy Link Ltd, New Zealand
- Wood Mackenzie - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Grasim Industreis Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Mercator Lines Limited - India
- Bharathi Cement Corporation - India
- Billiton Holdings Pty Ltd - Australia
- Bhushan Steel Limited - India
- Price Waterhouse Coopers - Russia
- Eastern Coal Council - USA
- Gujarat Mineral Development Corp Ltd - India
- Altura Mining Limited, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bhoruka Overseas - Indonesia
- Meralco Power Generation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Chamber of Mines of South Africa
- The State Trading Corporation of India Ltd
- Larsen & Toubro Limited - India
- Tata Chemicals Ltd - India
- Dalmia Cement Bharat India
- Formosa Plastics Group - Taiwan
- New Zealand Coal & Carbon
- Global Coal Blending Company Limited - Australia
- Baramulti Group, Indonesia
- Siam City Cement - Thailand
- Indonesian Coal Mining Association
- Semirara Mining and Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Australian Coal Association
- Directorate Of Revenue Intelligence - India
- Oldendorff Carriers - Singapore
- Salva Resources Pvt Ltd - India
- Petron Corporation, Philippines
- Kumho Petrochemical, South Korea
- Bangladesh Power Developement Board
- IHS Mccloskey Coal Group - USA
- Pendopo Energi Batubara - Indonesia
- ASAPP Information Group - India
- Alfred C Toepfer International GmbH - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- Kaltim Prima Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Edison Trading Spa - Italy
- Electricity Generating Authority of Thailand
- Chettinad Cement Corporation Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Energy Development Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Carbofer General Trading SA - India
- Kalimantan Lumbung Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- GMR Energy Limited - India
- Commonwealth Bank - Australia
- Indo Tambangraya Megah - Indonesia
- South Luzon Thermal Energy Corporation
- London Commodity Brokers - England
- Agrawal Coal Company - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rio Tinto Coal - Australia
- Ceylon Electricity Board - Sri Lanka
- GAC Shipping (India) Pvt Ltd
- San Jose City I Power Corp, Philippines
- Parliament of New Zealand
- Samtan Co., Ltd - South Korea
- Australian Commodity Traders Exchange
- Economic Council, Georgia
- Ambuja Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Planning Commission, India
- IEA Clean Coal Centre - UK
- Bukit Makmur.PT - Indonesia
- Makarim & Taira - Indonesia
- Coal and Oil Company - UAE
- Krishnapatnam Port Company Ltd. - India
- ICICI Bank Limited - India
- Rashtriya Ispat Nigam Limited - India
- Intertek Mineral Services - Indonesia
- Vizag Seaport Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Sidhee Cement - India
- International Coal Ventures Pvt Ltd - India
- Vedanta Resources Plc - India
- Renaissance Capital - South Africa
- Goldman Sachs - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- CIMB Investment Bank - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- SMG Consultants - Indonesia
- OPG Power Generation Pvt Ltd - India
- Independent Power Producers Association of India
- Africa Commodities Group - South Africa
- Simpson Spence & Young - Indonesia
- Bulk Trading Sa - Switzerland
- Deloitte Consulting - India
- Therma Luzon, Inc, Philippines
- Minerals Council of Australia
- Thai Mozambique Logistica
- Jorong Barutama Greston.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Attock Cement Pakistan Limited
- Wilmar Investment Holdings
- PTC India Limited - India
- Kohat Cement Company Ltd. - Pakistan
- SMC Global Power, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Central Java Power - Indonesia
- Meenaskhi Energy Private Limited - India
- Singapore Mercantile Exchange
- McConnell Dowell - Australia
- Barasentosa Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- Orica Mining Services - Indonesia
- Ministry of Finance - Indonesia
- Global Business Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- CNBM International Corporation - China
- Parry Sugars Refinery, India
- GN Power Mariveles Coal Plant, Philippines
- Sical Logistics Limited - India
- Lanco Infratech Ltd - India
- Indogreen Group - Indonesia
- Marubeni Corporation - India
- SN Aboitiz Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- Trasteel International SA, Italy
- Sakthi Sugars Limited - India
- Merrill Lynch Commodities Europe
- VISA Power Limited - India
- Mintek Dendrill Indonesia
- Uttam Galva Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Georgia Ports Authority, United States
- The Treasury - Australian Government
- Star Paper Mills Limited - India
- Latin American Coal - Colombia
- Electricity Authority, New Zealand
- Thiess Contractors Indonesia
- The University of Queensland
- Bank of Tokyo Mitsubishi UFJ Ltd
- TeaM Sual Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Ministry of Mines - Canada
- White Energy Company Limited
- Jindal Steel & Power Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Mercuria Energy - Indonesia
- Antam Resourcindo - Indonesia
- European Bulk Services B.V. - Netherlands
- Malabar Cements Ltd - India
- PowerSource Philippines DevCo
- Karaikal Port Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Sojitz Corporation - Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indika Energy - Indonesia
- Standard Chartered Bank - UAE
- Sree Jayajothi Cements Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Global Green Power PLC Corporation, Philippines
- Anglo American - United Kingdom
- Iligan Light & Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Toyota Tsusho Corporation, Japan
- India Bulls Power Limited - India
- Binh Thuan Hamico - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- Medco Energi Mining Internasional
- Essar Steel Hazira Ltd - India
- Bhatia International Limited - India
- Interocean Group of Companies - India
- Power Finance Corporation Ltd., India
- Coalindo Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Heidelberg Cement - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Sarangani Energy Corporation, Philippines
- Romanian Commodities Exchange
- Tamil Nadu electricity Board
- Eastern Energy - Thailand
- Borneo Indobara - Indonesia
- Banpu Public Company Limited - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mjunction Services Limited - India
- Aditya Birla Group - India
- Xindia Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- Madhucon Powers Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Indian Oil Corporation Limited
- Videocon Industries ltd - India
- Straits Asia Resources Limited - Singapore
- Miang Besar Coal Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Cement Manufacturers Association - India
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