INDUSTRY UPDATES STEEL, METALS AND MINING ( 12.10.2011 )

INDUSTRY UPDATES
STEEL, METALS AND MINING
on 12th October 2011



COAL

India going on non green path for coal mining

Environment is holding up growth and economic development. This is the common refrain in circles that matter. So, when the Group of Ministers tasked to resolve the issue of coal mining in forests asked for a report on what needed to be done, it was told that the best would be to dismantle green conditions, almost completely, so that development could be pursued.

The BK Chaturvedi Committee recommends all coal mining projects be given automatic clearance, with exceptions only for projects in dense areas. There is no definition of dense or an understanding of the importance of protecting forests for water or livelihood security.

Then, the committee wants all provisions that seek to protect rights of local people or the environment to be relaxed. It recommends that the gram sabha required to give consent to the project be held without a quorum, in other words, democracy be sidelined. People should not be heard.

Similarly, public hearings should be done away with when it comes to projects for expansion of the current mine. It also recommends that even in areas identified as critically polluted, new projects be allowed without check. It has no time to waste on such minor considerations as the health of people who live in these regions. The horrendous cumulative impacts of these massive projects must be ignored, because we are a nation in a hurry.



(Steel Guru)

Indonesia set to tighten coal export norms further

It is reported that Indonesia has circulated a draft decree seeking comments on imposing a ban on export of coal below 5,100 gross kilo calories per kilogram from 2014.

A few months ago Jakarta brought in regulations that called for all coal exports to be benchmarked to international prices. The regulation also set aside all prior agreements and understanding mining companies had entered into. This put Indian power companies such as TATA Power and Reliance Power in a quandary as they had bid aggressively for thermal plants here based on their deals in Indonesia.

Mr James O Connell of Platts International said the Indonesian decree would bring down exports by 120 million tonnes to 130 million tonnes if implemented and India would have to bear the brunt of the scarcity. Indonesia exported 270 million tonnes in 2010.

He said India imports coal grades from 5,000 Kilocalories per kilogram to as low as 3,500 Kilocalories per kilogram from Indonesia. As Indonesia wants about 82 million tonnes or a fourth of the production in the country for its own plants in 2012 such a move will cap exports to ensure a greater availability for domestic consumption.

He added that the Centre wants add 16 GW in 2011-12 while it added nine GW in 2010-11 which calls for 40 million tonnes of additional imports.

Mr O'Connell said the state-owned company has registrations from buyers for 721 million tonnes up to March 2012, by far more than its production target. Coal India has received about 27 offers for its 10 year long term offtake tender for imported thermal coal.

(Steel Guru)

Coal ministry to pull up CIL for missing production targets in Q1

Coal India Limited has blamed its failure to keep to production targets in Q1 this fiscal on rains and delays in securing green clearances, but the Indian coal ministry is in no mood for excuses and has called a meeting this week on the issue, where it is likely to berate the Navratna PSU's top brass.

An official in the coal ministry said “Coal India will be pulled up for missing its output target in the production target review meeting to be held this week.”

The meeting, to be chaired by Indian coal minister Mr Sriprakash Jaiswal, will be attended by officials of the coal ministry, CIL CMD Mr NC Jha and the CMDs of all the subsidiaries of CIL.

CIL had blamed early rains and inclement weather in the eastern region for playing spoilsport in achieving its 98.7 million tonne coal production target for the first quarter. In addition, a plethora of problems like delays in the grant of green clearances for its projects hurt production by CIL, which missed the April-June target by 2.4 million tonnes.

(Steel Guru)

IRON ORE
NMDC to auction 3 lakh tones of Iron ore in Karnataka on October 14
State-owned NMDC will conduct an e-auction on Friday for the sale of 3 lakh tonnes of iron ore to steel and allied industries in Karnataka, which are struggling to keep their units operational due to an acute shortage of the raw material. "On October 14, we are going to auction about 3 lakh tonnes of ore," NMDC Chairman Rana Som said.

He added that NMDC is looking to increase the quantum of iro ore to be sold through the e-auction route in the coming days. This will be second auction conducted by the mining major in a span of 10 days, having sold about 2 lakh tonnes of ore on October 4. In addition, the company has also requested the apex court-appointed monitoring committee to "at least" double the number of auctions in a week, so that piling up of iron ore stocks can be avoided, Som said.

The auction of iron ore mined by the state-owned company was necessitated following an apex court order last month, wherein NMDC was directed to sell all iron ore produced from Karnataka exclusively through the competitive bidding route. The directive was made applicable irrespective of the long-term contracts NMDC has entered into with various firms. The company is the only firm that has been kept out of the purview of a mining ban imposed in the state by the Supreme Court.

NMDC currently produces about 20,000 tonnes of iron ore per day from its two mines in Karnataka, Som said, adding that the company has resorted to some production cuts due to increased inventories. "After the auctions, we will resort to our daily production levels of 30,000 tonnes, as the stocks will have eased out," he said. The move is expected to bring some respite to the steel industry and allied units like sponge and pig iron manufacturers in the state, which are grappling with acute shortfalls following the apex court's ban on mining in the state, industry sources said.

Sources added that including the quantity sold by NMDC on October 4, so far about 3.54 lakh tonnes of iron ore has been sold through competitive bidding since September 14, when the first auction was conducted. Of this, JSW Steel, the largest steel producer in Karnataka, with a total production capacity of 10 million tonnes in a year, has bought over 1.80 million tonnes, about 55 per cent of the total quantity put up for auction.

The company had resorted to a massive 70 per cent cut in steel production late last month due to the continuous shortage of iron ore.

"The situation has improved slightly, but delivery of the ore is still a big concern. Less than one lakh tonnes of iron ore have been delivered to us so far, although our purchase was more than 1.8 million tonnes," a senior JSW official said.
(Economic Times)
Indian iron ore mining mess - People fear mines shutdown in Goa

State of uncertainty looms large in Goa's mining belt, as people fear closure of several mines, which may spell doom for many dependent on this industry in the coastal state. The mining belt, which runs across seven out of 12 talukas of the state, is prominently dependent on extraction and transportation of ore to earn money.

A total 90 odd leases scattered over these talukas has 20,000 trucks plying between the mining sites and jetties where the ore is dumped into smaller ships which carry it forward to the harbor.

A detailed probe by Public Accounts Committee has pointed out that almost 50% of mining leases have violated norms, which means the ore extracted from them is illegal.

Worst fears are now being expressed that Justice MB Shah Commission, which is investigating into illegal iron ore scam, will recommend shutting down of these illegal mines, unleashing crisis on the people in this belt.

Mr Prasanna Ghodge, promoter of PVG Group, one of the biggest transporters for Sesa Goa, told PTI that "There were only 5,000 trucks a decade back. But now their number has gone up to 20,000."

Mr Ghodge, who has been in this business for last 20 years, said that that people are not supporting illegal mining but many of them do not know whether the ore that they carry in their trucks are legal or illegal. He added that "How are we supposed to know it? Its for the government to decide it. The trucks ply on the mines once they start. The truck owner will not know whether the mine has exceeded its permissible limit or not."

Mr Vinayak Gawas, Dharbandora Taluka Truck Owners Association member, said that "Imagine what will happen to the coastal belt, if government stops tourists from arriving here. Same thing will happen to rural belt, if mining is stopped."

Dharbandora, a newly notified Taluka, is one amongst the talukas having maximum density of mining leases.

Admitting that too much of iron ore extraction has spoilt the industry, Mr Govind Sawant, a truck owner and local politician, said there should be ban on any further purchase of trucks in the mining belt. He said that "Each truck costs INR 1.5 million. These trucks are useless, if there is no mining. We can't use them for any other activity."

The people who are dependent on mining industry has now decided to have a street protests in Panaji on October 12th 2011, when Shah Commission will re arrive in the state.

Mr Sawant said they will be handing over a memorandum to the chief minister Mr Digambar Kamat and leader of Opposition Mr Manohar Parrikar seeking their intervention in protecting legal mining industry.
(Steel Guru)
Indian iron ore mining mess - BJP seeks CBI probe in Orissa

BJP has urged the Odisha government to order a CBI probe into the illegal transportation of iron ore.

In a resolution adopted at the extended executive body meeting held here under the chairmanship of the state party president Mr Jual Oram, the party alleged that though the state had suffered loss to the tune of crores in revenue due to clandestine transportation, the State Vigilance had utterly failed to nail the culprits.

Since the railways, ports under the Central government, the forest and the mining department authorities of the state government were involved in the mineral export racket, the state government should hand over the entire matter to the CBI for the interest of the state.

Briefing newsmen on the political resolution adopted at the meeting, Mr Oram condemned the dissolution of the elected cooperative bodies by the state government and alleged that this smacked of political motif of the ruling BJD. He dubbed the dissolution of cooperative bodies undemocratic and autocratic.

Alleging that the state government had created a political flood in the Mahanadi system last month due to mismanagement of water at the Hirakud reservoir, the meeting demanded formation of a special committee comprising experts to forge a permanent solution to the oft-repeated mistakes, considering the safety of the earth dam and related flood havoc in the down stream.

Mr Oram said that the executive meeting slammed the state government for utterly failing in flood management as well as the relief and post flood restoration and reconstruction. He alleged that the ruling BJD was doing petty politics out of the misery of the flood affected by announcing expenditure of INR 1,208 crore during the next 45 days, keeping in view the panchayat elections.

The meeting also demanded constitution of an expert committee to find out permanent solution to the frequent floods in the state. Besides, the party also urged the Centre to convene an all party meeting to fix the quantum of minimum income for identification of the BPL and urged for early completion of the BPL survey.

The meeting, held at the state party office, was attended by BJP national general secretary Mr Bijay Goel, office bearers and presidents of district units and frontal organizations.
(Steel Guru)
Sesa Goa iron ore volume declining in Goa

Iron ore sales from Goa declined 10% YoY to 0.83 million tonnes on account of seasonal factors and logistical issues.

The company has environmental approvals to mine 15 million tonne per annum from Goa.

Saleable iron ore inventory at Karnataka is 0.8 million tonnes which will be sold eventually in E auction. Iron ore mining in Goa is being examined at two different levels as mentioned below.

The company believes that its mines are operating within the legal framework and does not believe it to be adversely affected.

1. Shah Commission inquiry by Ministry of mines which aims to find irregularities in the Goa mining sector and which is likely to submit its report to the parliament by month end.

2. PAC report which is a state level probe on illegal mining. It is believed to be attempting to highlight the nexus of politicians and irregularities in obtaining mining leases.
(Steel Guru)

AGRICULTURE
CEMENT
FERTILISERS
ENERGY
SHIPPING, TRADE AND TRANSPORT.
Malabar Ports bags PPP contract to develop Ponnani Port

Ponnani has emerged as the first port in Kerala to be taken up for development through the public private partnership route even though the proposal was confirmed relatively late, compared to similar projects that have been hanging fire since a long time. The state government has inked a concession pact with Malabar Ports Pvt Limited from Chennai for constructing Ponnani port on build operate transfer basis.

Malabar Ports was adjudged the winner of the contract by the Swiss Challenge method, which was adopted for the first time in the state to identify private investors for a PPP project. The pact is for a period of 30 years and Malabar Ports will pay royalty of 2.75% to the state during the first 15 years and 4.5% in the next 15 years.

Although awaiting environment clearance from the Union government, the project is envisaged to be concluded within four years after the commencement of work.

The port was originally planned to be developed in three phases, at an estimated outlay of INR 2,000 crore. The pact with Malabar Ports is for constructing the first phase, which, according to Port Department officials, could cost INR 763 crore.

While the existing port is situated in the estuary where the river Bharatapuzha meets the Arabian Sea, the all weather facility proposed to be developed has been designed to handle vessels with capacity of up to 50,000 DWT.

Once operational, the port is expected to accelerate the all round development of districts like Malapuram, Palakkad and Thrissur, besides complementing the Palakkad Coimbatore industrial belt.
(Steel Guru)

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