India Industry Update 20.04.2012





INDIA INDUSRY UPDATE
Dated 20th April 2012


INDUSTRY

UPDATES

STEEL, METALS AND MINING


UCIL to inaugurate new mine and processing plant in AP


Uranium Corporation of India's new 3,000 tonne per day uranium mine & and processing plant will be inaugurated at Tummalapalle in Andhra Pradesh on Friday by Dr Srikumar Banerjee, secretary, department of atomic energy & chairman Atomic Energy Commission.

With confirmed reserves of over 49,000 tonnes of uranium and indications of much larger reserves in the area, Tummalapalle could become one of the world's largest uranium deposits.
The new facility will provide a major fillip to the country's much needed uranium fuel for nuclear programme.

Built at a cost of Rs 1,106 crores and spread over 900 hectares, the mine and plant has adopted the latest systems and equipment. The hydro-metallurgical uranium purification plant has a capacity to treat 3,000 tonnes of uranium ore per day which is mined from underground mine located close to the plant.

The plant will treat the dolomite limestone based uraniferous ore and is the first in the country to adopt an alkali leaching processing method. The final product shall be sodium di uranate.
(Economic Times)
COAL
No free mines with ultra mega power plants anymore: Coal Ministry
Bidders for upcoming ultra mega power plants in Odisha and Chattisgarh will have to pay a reserve price to the state government for coal mines that come bundled with the project, ending a long established policy regime in which the mines were allotted free.

The coal ministry is in the process of finalizing norms for calculating the reserve price for the mines, bidding norms and a model agreement for which it has received expression of interest from consultants, coal secretary Alok Perti said.

The ministry plans to finalize these guidelines by September this year. The new norms will change the economics of large power projects known as ultra mega power projects as they have till now been awarded based on the electricity tariff, while the mines came free.

The coal ministry has been working on a series of policy initiatives to ensure transparency in allocation of coal blocks, particularly to industries like steel and power which are eligible for captive mines.

Earlier, blocks were nominated to projects keeping in mind fuel requirement and its location. However, this has been discontinued and the government will now give blocks on captive basis only through the auction route, Mr Petri said.

The decision to charge for the mines comes in the backdrop of the recent controversy over allocation of spectrum in the telecom sector in 2008 at prices fixed in 2001 and a controversy stirred by a leaked draft report of the Comptroller and Auditor General (CAG) over alleged losses incurred by government in giving out mines. The CAG had reportedly alleged that private companies, who had been allotted coal blocks without bidding, might have made windfall gains at the cost of government-owned Coal India.

"The supreme court judgment in the 2G case is very clear on how natural resources are to be given out and exploited. We had already adopted some of these measures in the auctioning rules and it will borne in mind for all further allocation," the coal secretary said.

ET had earlier reported that the coal ministry has identified 54 coal blocks that would be given out for mining. Apart from selected industries, mines would also be allotted to state-run mining companies, he said.

On the recent controversy over coal allocation to power projects by CIL where the government had to resort to a presidential decree to force the public sector company to fal in line, the secretary said that it was unfortunate. "The MOU and risk factors mentioned in the RHP is well documented and a public sector organization has to abide by those norms. It was known to the independent directors as well," he said.
(Economic Times)

IRON ORE
Indian iron ore mining mess - Goa tightens iron ore mining rules

Mines and Geology Department Goa has issued orders to the mining firms in the state to provide details of their daily operations, thereby making it easy for the government to keep a tab on the exports.

The newly appointed director of the Mines and Geology Department, Mr Prasanna Acharya asked the mining lease holders to submit daily reports regarding transportation of iron ore from the mining sites.

As per the order, the mines will now have to provide details like the number of trucks ferrying the iron ore on a daily basis, information about ships and their carriage capacity, among other things. The department also directed the mining firms to submit information about royalty challan payments, so that the records available at the ports could be tallied. Mr Acharya said that steps are being taken to streamline matters concerning mining, transportation and storage of ore.

In a different order, the department has asked the mining firms to keep only one exit for all trucks ferrying ore from the extraction sites to the riverfront jetties, so that transportation can also be monitored easily. According to the order, the mining lease holders will also have to submit all the documents pertaining to leases. Mining leases, signed during the Portuguese regime are written in Portuguese; Mr Acharya has asked the firms to get them translated into english before submitting them to the state government.

The Manohar Parrikar government has put a regulatory mechanism on the mining leases, which had become a hub for illegal trade over the years. The state government says that it has decided that the ore leaving the lease area should be accounted for and not a single gram of ore would be allowed to be extracted illegally.

The companies have also been instructed submit their survey number and their Global Positioning Survey coordinates, to ensure they have not gone beyond their designated geographical limits. The order, which was issued on Monday, has set a deadline of 15 days, for the lease holders, to submit these documents to the state government.
(Steel Guru)
Ore exports only after meeting local demand: SC 
First meet the local demand and then think of exporting iron ore, a Supreme Court (SC) order said recently. 
The apex Court made it clear that hereafter, available iron ore should be used to meet the requirements of steel plants and associated industries located in Karnataka and neighbouring states that have been using the material from leases located in the state.
"Exports... should be permissible only in respect of the material which the steel plants and associated industries are not willing to purchase on or above the average price realised by the monitoring committee," it said.
Similarly, iron ore produced by beneficiation plants after processing, should also not be exported, the SC order said. 
Ninety per cent of the sale price (excluding the royalty and applicable taxes) received during the e-auction may be paid by the buyer directly to the respective lease holders and the balance 10 per cent may be deposited with the monitoring committee along with the royalty, it added.
(Steel Guru)
CEMENT
Ultatech Cement in talks to buy Mozambique for 1500 Crore
Aditya Birla group's UltraTech Cement, India's largest cement maker, is in talks to acquire a large limestone mine in Mozambique for about 1,500 crore.

The negotiations between the Mumbai-based conglomerate and the mine owner which started about two months back, could subsequently result in the group building a 1-2 million tonne cement plant in the African country where demand for the building material has been growing at the rate of 8-9% annually, a person familiar with the development said.

The limestone mine is located in the Magude region in southern Mozambique near the capital city of Maputo and has reserves of more than 700-800 million tonnes of high grade limestone, said the person who is aware of the the Birla group's plans.

A spokesperson for the group did not comment on the issue due to the forthcoming earnings season.

If the talks are successful, it would be the second time in less than a year that the Aditya Birla group would progress on building a greenfield plant overseas. The group recently announced its intention to spend $500 million to build a greenfield fibre plant in Turkey.

In April 2010, UltraTech acquired Dubai-based, 2.3 million tonne, ETA Star Cement for about Rs 1,700 crore which has given them access to the construction-heavy markets of UAE, Bahrain and Bangladesh.

"Mozambique is one of the fastest growing countries in Africa and has a very industry-friendly government that promotes investments in minerals," said Devesh Sharma, group managing director of Future Focus, a consultancy that guides Indian and foreign companies in setting up businesses in the African country. "Apart from having large limestone reserves, the country is also rich in high grade coking coal which is vital for steelmaking," Sharma added.

The Tatas and the Ruias of the Essar Group, were among the first Indian companies to enter Mozambique to buy coking coal mines.

The Tatas have a 35% stake in Riversdale Energy (Mauritius), which owns coal assets in Mozambique. Tata Steel had formed a venture with Riversdale to develop the Benga coal project in Mozambique, before Riversdale was acquired by Rio Tinto.

The Birlas led by their strategy head Dev Bhattacharya have been scouting for mines in the Magude and Salamanga regions for over three months.
(Economic Times)
AGRICULTURE
FERTILISERS
India should explore buying fertilizer mineral assets in 20 Nations
Amid depleting natural resources globally, a government group has suggested that India should look at buying fertiliser mineral assets in over 20 countries including Belarus and Canada to meet the domestic shortfall.

In view of risk and huge costs involved in acquisitions, the Group also suggested that the government should create a fund with an initial corpus of USD 5 billion.

India imports about six million tonnes each of potash and urea and seven million tonnes of Di-ammonium Phosphate (DAP) every year.

"The need to secure various input (fertiliser) assets to ensure manufacturing and growth of the economy becomes more urgent given the limited availability of such inputs and their control by a few countries," said the Working Group set up by the Planning Commission for the 12 Five Year Plan (2012-17).

The Group suggested to the government to facilitate the entry of Indian firms into countries that are not able to exploit their resources optimally to explore options of ownership and sourcing of basic raw-materials like gas, rock phosphate and potash.

It also identified at least 20 resource-rich countries including Belarus and Canada where India can explore strategic investments and secure long term supplies.The Group recommended the government to ensure financial resources for raw material assets acquisition and creation of funds for the purpose.

To accelerate the pace of acquisition, PSUs can be allowed to entertain proposals from various routes directly or indirectly subject to feasibility, it said.

The Group emphasised that the acquisition of fertiliser mineral assets abroad is "very important" considering a global scenario of depleting natural resources both energy and minerals.It also pointed out that rising global prices of raw materials and finished fertilisers is making the growing fertiliser subsidies unsustainable.

For example in Belarus, which has one billion tonne of proven deposit of potash, the Group suggested the government to explore buying stake in the state-controlled Belarus Kali, which enjoys complete monopoly on exploration.India has been in talks with the Belarus government to buy stake in potash miner Belarus Kali for quite some time. However, no progress has been made yet.

In the case of Canada, it said, "One-fifth of Indian import of potash is from Canada. Possibility of setting up joint venture projects in mining and off take of potash to India should be explored."India is estimated to consume 33.67 million tonne urea, 12.41 million tonne DAP, 4.79 million tonne potash and 11.42 million tonne of complex fertilisers by the end 2016-17 fiscal.
(Economic Times)
Iffco says it may have to shut down UP operations
Indian Farmers Fertiliser Cooperative (IFFCO), a major fertiliser supplier, fears it will be forced to shut operations in Uttar Pradesh as Reliance Industries has agreed to pay under protest a disputed tax levied by the state on natural gas, and pass the burden to customers.
"From 2 crore a month, our overall payments have now increased to 21 crore, as instead of the regular 10% VAT rate we are paying the penal rate of 26%. At this rate, we will have to close down as we cannot afford this," a senior IFFCO official told ET.
The UP government had levied VAT on Reliance's gas from April 2009. RIL secured a stay order against the state levy from the high court, but subsequently when the state approached the Supreme Court the company told the apex court in January this year that it will start paying VAT from February 1, 2012, and pass on the burden to consumers.
The company still opposes the tax and will seek a full refund if it wins the case, sources close to RIL said. RIL has argued that it was already paying central state tax on the gas produced in the KG-D6 block off the Andhra Pradesh coast.
RIL supplies gas to four fertiliser companies in the state - IFFCO's Aonla and Phulpur units, Kribhco's Shahjahanpur plant, Indo Gulf Fertiliser's Jagdishpur unit and Tata Chemicals' unit at Babrala.
The IFFCO official said RIL's move was surprising as the company itself had challenged the tax. "We cannot understand RIL's about-turn on the issue and it volunteering to pay VAT especially when earlier it had filed a writ petition in the Allahabad High Court resisting the imposition of tax. We were also party to the same petition and RIL took this step without informing or consulting us," added the official.
RIL declined comment, but a source close to the company said it had not changed its position on the tax. "The company cannot go on bearing the contingent liabilities on our books as the overall outstanding amount will go on increasing, and we are only the collectors in the end.
Sellers have to make the final VAT payments. The company has written to the state that its is paying this amount under protest and will claim a full refund in case the high court rules in its favour," the source said.
"RIL could have decided on this course of action to avoid showing any contingent liability on its books," added the IFFCO official.
"This entire issue is extremely unfair as no other state customers are forced to pay both Central Sales Tax and VAT on the supply of gas. It is completely unconstitutional as it amounts to double-taxation, it is difficult to comprehend RIL's stance," another senior IFFCO executive told ET. RIL did not respond to an email sent by ET.
The Supreme Court has asked the Allahabad High Court to decide on the plea against the VAT demand made by the state government within three months. "We are hoping that the high court will rule in our favour or else we will find it very difficult to sustain ourselves," the official added.
RIL, on the other hand, had submitted in the Supreme Court that the Uttar Pradesh government's levy amounted to double taxation as it was already paying central sales tax. Indo-Gulf Fertliser refused to comment while Tata Chemical and Kribhco were unavailable for comment.
(Economic Times)

ENERGY 
SHIPPING, TRADE AND TRANSPORT

1 comment:

  1. Thank you for sharing this post about India Industry Update. Its very informative. Those want to know about Indian industry, then they should read the post.

    ------------------------------
    Steel rebar manufacturers

    ReplyDelete