STEEL, METALS AND MINING
Rashtriya Ispat Nigam to get mining rights at Bhilwara
The government is close to granting mining rights toRashtriya Ispat Nigam at Bhilwara in Rajasthan, two people directly involved in the development said. The world's largest steelmaker, ArcelorMittal, had also applied for a mining lease in Bhilwara, but there is no information on the progress of the global major's application. Queries toArcelorMittal remained unanswered.
Rashtriya Ispat, which operates the coast-based steel plantVizag Steel, will get 350 million tonnes of iron ore, a lion's share of the reserves. Earlier this year, the OP Jindal group's pipe business,Jindal Saw entered into an agreement withRajasthan giving it rights to at least 180 million tonnes of ore with a ferrous content of about 30%. The company has also expressed its intention to build a steel plant in the state. SAIL, which has been eyeing Rajasthan's reserves for two years, is expected to become the third beneficiary.
RINL chairman PK Bishnoi, who is scheduled to retire by July-end, returned from Jaipur last week after prolonged negotiations with the Rajasthan government. Iron ore in Bhilwara has a ferrous content of about 45-50%, which is lower than that mined in Karnataka and other states. Higher ferrous content indicates purity of the ore. Rashtriya Ispat's 3.3-million tonneVishakapatnam Steel Plant in Andhra Pradesh has been scouting for ores to reduce costs. Its iron ore requirements are being currently met by NMDC. RINL plans to expand the plant's capacity to 7.3 million tonnes by 2013. It has plans for an additional 4 million tonne plant, including an electrograde steel unit, for which it will partner withBharat Heavy Electricals and SAIL.
Consultants and equipment and hardware providers are being finalised. Rashtriya Ispat owns about 20,000 acres at its existing location. According to Rashtriya Ispat Nigam chairman PK Bishnoi, the land is adequate to accommodate up to 20 million tones of steelmaking facility.
RINL currently has iron ore leases in Orissa, belonging to subsidiaries of theBird Group of Companies, which it now owns through a majority stake in the holding company.
Mines closure in Karnataka may force JSW, Tatas to halt work
Last week, when Sesa Goa, India's largestiron ore exporter, cut its revenue guidance for the current fiscal year due to tight ore supply from Karnataka, it spoke volumes about production problem at one of the largest mineral producing states of the country.
Karnataka, which accounts for a third of India's iron ore output, had to suspend operations in about 50 mines affecting supplies to a host of steelmakers and prompting large players such asJSW Steel andTata Metaliks to consider a stoppage in production.
The shuttering of the mines followed a survey by a court-appointed panel that found most of these mines, owned by private owners, operating without clear boundary sites, encroaching on forest land and dumping mineral waste outside their mines. This was in addition to an earlier directive by the state government to ban exports.
The closure has led to uncertainity about supplies of about 40 million tonnes of iron ore that comes from the region.Karnataka supplies iron ore to severalsteel plants such as JSW Steel, Tata Metaliks,Jindal Saw,Kirloskar Ferrous Industries andKalyani Steel. In his representation to the Karnataka government, JSW Steel CEO Vinod Nowal said that as the company's daily iron ore requirements is 53,000 tonnes and the company has stock of only 150,000 tonnes, operations at the plant could likely be stopped.
Tata Metaliks, the largest producer of foundry grade pig iron which supplies to automobile and engineering companies, said the closure notices issued by the department of mines and geology is ultra vires the Supreme Court order dated May 6, 2011, which did not stipulate stoppage of mining activities. "Iron ore has no substitute for the production of pig iron and our stock level will last for a very short period. The abrupt closure of mining in Bellary will result in complete stoppage of production at the plant," vicepresident Sudhin Mitter wrote to Central Empowered Committee chairman PV Jayakrishnan.
According to the Federation of Indian Mineral Industries, iron ore shipments from India, the world's third-largest exporter of the mineral, will fall to 64 million tones in the current fiscal year. Karnataka has 9 billion tonnes of reserves accounting for nearly 38% of India's deposits. The crackdown on illegal mining has come at a time when Karnataka has emerged as a much sought-after location for major global steel sector companies planning to make inroads into India.
The world's largest steelmaker ArcelorMittal and South Korea's Posco, which have faced delays in the progress of their greenfield projects in other states, have been considering Karnataka due to its pro-industrial policies. Several medium-size companies such asAdhunik Metaliks andVarun Industries too have laid out plans to set up steel and pig iron plants in the state. According to an Assocham report the Indian steel industry has invested about .`70,000 crore based on supplies of ore from the Bellary-Hospet region.
The tight supplies of iron ore have already led to a steep rise in the prices of iron ore. This will put a pressure on the margins of the steel and consumer goods companies which are grappling with expensive coking coal, another key element for steelmaking.
Coal India not afraid of losing monopoly: NC Jha
Brushing off fears that commercial mining in coal sector may erode its monopoly and profitability, CIL on sunday said it is geared up to face the challenge and would welcome any such move to open up the sector for private investment. The government is considering re-introduction of a bill to amend the existing Act governing coal mining for allowing private sector in the space and is likely to convene a meeting of a ministerial panel soon.
"The proposal if approved will only strengthen us removing whatever inefficiencies we have as CIL will have to face competition from other players. We are well prepared for it and are not scared of losing our monopoly," Coal IndiaChairman N C Jha told PTI in an interview. Power, Steel etc sectors have already been opened up for private sector and the PSUs are performing well there, he said adding, under such circumstances any such move to bring about reforms in the sector would benefit CIL.
"With the market getting competitive there would be no restrictions on us and we can sell the coal at competitive rates, increasing prices too if required," Jha said. The government has already constituted a Group of Ministers (GoM), headed byFinance Minister Pranab Mukherjee, to consider re-introduction of a bill to amend the Coal Mines (Nationalisation) Act, 1973.
The Act governing the sector allows only PSUs to undertake mining besides permitting private firms to extract coal for captive use. The bill to amend the Act to allow private participation has been pending in Parliament for the last 10 years for want of political consensus amid opposition by trade unions. Earlier, Coal Minister Jaiswal had said the government, as part of the energy sector reforms, is trying to evolve a consensus on commercial coal mining to promote development of the sector.
After nationalisation of the coal mines in 1973, the mining in the sector is done exclusively by the public sector companies, with Coal India accounting for over 82 per cent of the production. The private sector is allowed coal mining for meeting their captive requirements in sectors like power, steel and cement etc.
The need to liberalise the sector was also felt in the wake of widening demand-supply gap of the dry-fuel. According to government estimates, India faces a supply shortage of142 million tonnes of coal, with the requirement of 696 million tonnes in the current financial year.
In the next 20 years, import dependence can go up to 55 per cent of the demand, as per Coal Ministry estimates.
Sesa Goa taking steps to prevent mining mishaps
Sesa Goa, a subsidiary of Vedanta Resources admitted that consent under the Air and Water (Prevention and Control of Pollution) Act was not granted for its mine at Mulgao village, whose tailing wall collapsed last week inundating several fields.
A company statement said that “The company had applied for renewal of consent from the Goa State Pollution Control Board and the same is under process.”
Around 500 paddy growers and 30 horticulture plantations were affected after silt rushed through the farms. One person was washed away due to the flow of water but was later rescued by locals.
A company spokesman said the company will be preparing a detailed report to avoid mining mishaps during monsoons.
The spokesman referring to the mishap at Mulgao on July 16 said that “Our company is committed to ensuring a speedy resolution in a transparent manner. Despite following our best mine management practices, owing to the extraordinarily heavy rains that the State received recently, a settling pond breached.”
He said that “Our teams have been working fervently, right after the incident, to ensure fast and effective assistance is offered to those affected.”
Company officials have said that adequate measures have been taken to contain the situation and to ensure that similar incidents do not recur in future at any of Sesa Goa’s mines.
The spokesman further said that “Presently, technical experts are conducting an extensive study and will submit a comprehensive report along with an infallible plan for the future. The damage to agricultural property is being assessed in consultation with the local community and state government officials. In addition to adequate compensation for crop loss, Sesa Goa will assist the local community in cultivation activities and will aid in the restoration of the affected agricultural properties.”
Goa mining industry not averse to mining corridor – Association
The iron ore exporters in Goa on Saturday said they were not averse to funding the construction of mining corridors dedicated roads for the transport of ore, bypassing villages and towns provided that the state government linked them with jetties.
Mr Glenn Kalavampara secretary of Goa Mineral Ore Exporters Association said that the industry was not averse to funding the project, but it needed an assurance that the entire stretches of corridors, up to the jetties, would be built.
Mr Kalavampara said that "The state government also needs to take various permissions from the Union Ministry of Environment and Forests and other ministries, which is expected to take some time... This has possibly made investors cautious.”
The Goa government recently said the industry had not shown any interest in backing the corridors financially. The government has planned two corridors in South Goa. The work of initial phase of the first project has already been awarded.
According to GMOEA, if the industry were to invest in the project, it should be given a time frame for completion. Also, the toll collection system should be in place.
The mining companies have also said their consent for corridors does not come with the condition of expediting industry's various applications for approvals, which are pending with the state government.
Indian iron ore mining mess - Lokayukta likely to disclose names
The final report of the Karnataka Lokayukta is likely to disclose names of the high and mighty behind the iron ore theft at Belekeri and Karwar ports in 2010.
According to sources, the Lokayukta has dug out names of some influential politicians and mine owners who illegally shipped seized iron ore worth several crores of rupees from these ports abroad. The Lokayukta’s revelation will come as a major embarrassment to the CID, which has failed to expose the real culprits behind the theft.
The CID, after conducting an investigation into the case, found workers of some mining companies responsible for the act. But its charge sheet against these workers was struck down by the court.
The Lokayukta team headed by Mr UV Singh had raided the ports and seized about 800,000 tonnes of iron ore that was illegally mined and transported in March 2010. However, about 500,000 tonnes of seized ore was shipped out illegally in two months.
The then DCF of Karwar Gokul had taken steps to file a case in the court. But a cabinet minister prevented him from doing so, besides bringing pressure on the government to suspend the officer. The government, in the meanwhile, ordered a CID probe into the issue.
Nevertheless, the Lokayukta team continued its own investigation into the issue. The team is learnt to have found the involvement of an influential legislator and some close aides of a cabinet minister in the case.
MMTC allowed to renew iron ore supply contracts with Japanese, South Korean and Chinese mills news 22 July 2011
The union cabinet has approved a proposal to renew long-term agreements for supply of iron ore and has authorised Metals and Minerals Trading Corporation (MMTC) to supply iron ore to Japanese, South Korean and Chinese steel mills.
The renewal of the long-term agreement authorises MMTC to export iron ore (lumps and fines) of grade +64 per cent Fe content to Japanese steel mills and POSCO of South Korea for another 3 years (ie till 2014).
The cabinet at its meeting on 30 March 2006 had authorised MMTC to engage in fresh long-term agreements (LTAs) with Japanese steel mills, South Africa's POSCO and Chinese steel mills for supply of iron ore for a period of five years (2006-2011).
The long-term agreements entered into by MMTC during the year 2006-11 expired on 31 March 2011. Japanese steel mills have, meanwhile, formally requested to renew these agreements with effect from 1 April 2011.
Coffee exports up 55 pc in June
Coffee exports soared by nearly 55 per cent in June this year to 40,000 tonnes owing to robust international demand.
In comparison, data released by the Coffee Board showed that shipments of the bean totalled 25,710 tonnes in the same month of 2010.
Govt nod for importing 40,000 t of rubber
The Union government has permitted the import of 40,000 tonnes of natural rubber at a concessional duty of 7.5 per cent, it is learnt.
It may be recalled that a similar quantity of rubber import was allowed last year.
Although the government has fixed Customs duty of 20 per cent or Rs 20 a kg, whichever is lower, for imports in excess of 40,000 tonnes, rubber growers have taken exception to the move on the grounds that it would bring down retail prices.
SHIPPING, TRADE AND TRANSPORT.
Kolkata Port Trust to seek bids for terminal at Diamond Harbour
The Kolkata Port Trust will invite bids for the container terminal facility at Diamond Harbour. The development follows the recent settlement of land issues between the Centre and the port authorities.
Mr ML Meena chairman of CPT on the sidelines of an event organised by the Confederation of Indian Industry said that “We are issuing the request for qualification documents for the container terminal facility at Diamond Harbor.”
He said the facility would have a natural depth of nine metres without dredging. This will substantially reduce the freight cost and turnaround time for vessels.
The terminal will constitute four ship jetties and three barge jetties, with an estimated capacity to handle 1.6 million TEUs annually.
The INR 1,233 crore projects got stuck when defense authorities refused to part with 43 acres that was critical for the project. Garden Reach Shipbuilders and Engineers the local shipbuilder under the defense ministry was planning to utilize the land to set up its own facilities.
Regulator hikes dry-docking, safety survey fees for ships
India’s maritime regulator has sharply increased a processing fee collected from shipowners seeking extensions for dry-docking and other mandatory safety surveys on ships. Apart from the routine annual maintenance, a ship has to undergo dry-docking twice in five years and a special survey every four years to be allowed to operate, under rules framed by the International Maritime Organization, the global maritime regulator.
But with the shipping market in the doldrums due to overcapacity and rising costs, shipowners have been deferring such dry-docking and surveys, which cost Rs.5-6 crore depending on the condition, type, size and age of the ship, said a Mumbai-based shipping industry executive, who declined to be named. “Timely completion of mandatory surveys is essential for the safety of the ship,” wrote Aji Vasudevan, a deputy chief ship surveyor and senior deputy director general, technical, at the directorate general of shipping, in a 20 July circular.
The directorate, he wrote, is flooded with requests from shipowners seeking to postpone dry-docking or surveys in a “routine manner and without proper justification”.“Some of these applications are ineligible for consideration and processing of these cases and related correspondence take away considerable time and resources of the directorate,” Vasudevan wrote, adding that extension requests for dry-docking or surveys due to “commercial or unjustified reasons are to be discouraged/eliminated”.
Processing fee for an application seeking an extension of up to one month for ships of up to 500 gross tonnage (gt) will now cost Rs.25,000. This used to be Rs.1,500 earlier. For heavier ships, the fee will be Rs.25,000 plus Rs.10,000 for every additional 500 gt or part thereof, subject to a maximum of Rs.1 lakh.
For extensions beyond one month, the fee will be twice the above subject to a maximum of Rs.2 lakh, the circular said. The Indian National Shipowners’ Association, or Insa, a local lobby group of shipowners, says lack of adequate dry-docking slots in India was the main reason behind requests seeking extensions.
“Our main problem is that adequate dry-docking facilities are not available in India. This becomes a major hurdle for us,” said Anil Devli, chief executive of Insa. “In fact, regardless of the market conditions, shipowners will do everything to ensure that their ships are dry-docked and surveyed on time to get employment. Otherwise, the ships will lose insurance cover and they become non-tradable.”
J.C. Anand, chairman of the Indian Register of Shipping, which verifies ships for their seaworthiness, too, said India is short of dry docks. “Ships are taken from here to Colombo and Dubai for dry-docking and repairs,” he said.