STEEL, METALS AND MINING
INDUSTRY UPDATES IN INDIA DATED 13.04.2012
Supreme court appoints panel to look into Chennai port cool ban
The Supreme Court has appointed a special committee to look into the ban on the key business of coal handling by the Chennai Port Trust, a top port official has said.
The committee has been given time till July to look into the matter and give a recommendation.
Atulya Misra, Chairman, Chennai Port Trust, said this was in response to the Special Review petition his organisation had filed against the ban, which came into effect around the middle of last year.
The Madras High Court had then banned the handling of the polluting coal at the Chennai Port, which finds itself within city limits. This has since cause a fall in volumes handled by the port and forced it to mull cleaner alternatives for the future such as cruise tourism and setting up of an LNG terminal.
The court appointed committee is made up of the Shipping Secretary, Environment Secretary, Chief Secretary of Tamil Nadu, members from the Central Pollution Control Board, Tamil Nadu Pollution Control Board, IIT Madras and National Environmental Engineering Research Institute.
West Bengal Government to earn Rs 56 crore annually from trans Damodar coal mining project
The West Bengal government will earn Rs 56 crore annually in the form of cess and royalty from Trans Damodar Coal Mining Project. The project, which has laredy started production, will start coal sale from May this year.
The company has already auctioned 60,000 tonnes of coal at Rs 2,810 per tonne which will be shipped from May. The coal will have a gross calorific value of 5,800 per kg which is equivalent to premium quality coal.
INDUSTRY UPDATES IN INDIA DATED 13.04.2012
The Trans-Damodar Coal Block only regionally explored by Geological Survey of India. has a mineable reserve of 48 million tonnes. It was allotted to West Bengal Mineral Development and Trading Corporation Ltd (WBMDTCL) by coal ministry, for extraction and distribution and marketing of coal.
The block is spread over 8 square km out of which 694 acre will be mined through open cast method. It is located in South Eastern part of Raniganj Coalfield in Bankura District of West Bengal.
This is the first project in public-private partnership mode with Govt of West Bengal for commercial mining of Coal. This project under the PPP model is taken under a competitive bidding by a joint venture of Godavari Commodities Ltd, Banowari Lal Agarwal Pvt and Calcutta Industrial Supply Corporation.
The Trans Damodar Sector Coal Block is one of the six coal blocks allocated by the Ministry of Coal, Government of India to the WBMDTCL.
CIL may import 10 MT coal in FY 13 to meet power firms needs
Coal India may import 10 million tonnes of coal this fiscal to meet the obligation of supplying a minimum assured quantity of fuel to power companies under the Presidential directive, its CMD-designate S Narsing Rao said today.
"If required, Coal India ( CIL) may import 10 million tonnes (MT)," Rao who is heading state-run Singareni Collieries, at present, told PTI. Rao said the company will first see as to how much it can increase its production and then "will do imports if that is inevitable."
The development comes in the wake of the government issuing a Presidential directive to the Maharatna firm on April 3 to sign fuel supply agreements (FSAs) with the power producers assuring them of at least 80 per cent of the committed coal delivery.
Rao said given the present position the company can easily assure 60 per cent of the committed supply and would take all steps to enhance production. In case, it is not possible then the imports "would be roughly 10 MT".
Rao, who will take the charge of the company shortly, said the PSU would weigh various options of importing coal that will include direct imports, if required.
He added that apart from imports, the company may also think of diverting coal meant for e-auction to power firms.
The company is already battling on several fronts including delays in getting regulatory clearances for expansion and has missed the target in the just-concluded fiscal by recording 435.84 MT against a revised target of 447 MT.
The PSU has fixed the output target at 470 MT for the current fiscal. Talking about the present target, Rao said that in view the past performance of the firm the "production target of 470 MT does not look to be good enough".
"470(MT) itself is a tall number given their past performance. That is around 35 MT incremental. I do not think that in any particular year they did so much," he said.
However, he added that the state-run company will not leave any stone unturned to meet it.
The PSU is the world's largest coal producer and accounts for 80 per cent of the domestic production.
It's production is almost stagnant for the last three years.
India’s first coal block auctions to test CAG’S loss figure
India's first auction of coal blocks will bring out sharp differences between calculations of the government and the national auditor, whose draft report estimated that companies which were allotted blocks free of cost received a benefit of 10.67 lakh crore.
The coal and power ministries are trying to work out a system to assess the price for the blocks to be auctioned, while the Comptroller & Auditor General (CAG) simply multiplied the estimated reserves in each block with Coal India's market price for that particular grade, government officials said.
The coal ministry is in the process of appointing a consultant to evaluate the base price for 38 coal blocks that will be bid out to steel, sponge iron, cement and surface gassification units, they said.
Unlike the CAG, the coal ministry does not assume that 90% of coal in each block can be extracted, nor does it think that the cost of mining is the same for each block.
Coal ministry officials say that barely 40-45% of the reserves can be extracted in an underground mine while in an open-cast operation it would not be more than 80%.
The ministry has told the power ministry that cost of production from each block depends on many factors and 'varies to a large extent' even if they are in the same area.
Cost of production from mines depends on factors such as size of the acreage, commercially extractable reserves, technology of extraction, land cost, surface features, rehabilitation and resettlement requirements and availability of infrastructure, the coal ministry said in a letter to the power ministry.
This is contrary to the CAG's method of estimating the cost of production by using the extraction cost in a similar mine of CIL. The difference between CIL's market price and extraction cost was multiplied by 90% of expected reserves of a block. The CAG recently said its reports and estimates are prepared after a thorough process, and based on reliable data.
A coal ministry official told ET the government may use the same logic in its defence when the final CAG report is made public.
Indian iron ore mining mess - New committee to map no-go areas for miners
Union ministry for environment and forests has constituted a panel that will set new criteria to demarcate no-go areas for mining.
The committee has been set up after the group of ministers on coal, headed by finance minister Pranab Mukherjee, asked the ministry to reformulate the parameters for no-go areas, though this time it is rechristened as inviolate and pristine forests.
The committee, chaired by MoEF secretary, consists of representation from the Forest Survey of India and the Wildlife Institute of India along with other senior forest officers. The committee has been tasked with setting parameters to make good forests out of bounds for extraction for commercial use.
The previous exercise to map such areas was undertaken at the behest of Coal India Limited and the coal ministry. However, the drive got mired in controversy after the coal ministry, CIL and industry lobbies balked at the concept.
The committee is expected to set norms that would measure the biodiversity values of forests, besides considering the typical measure of forest crown cover. With Supreme Court orders and Wildlife Protection Act putting national parks, wildlife sanctuaries and other 'protected areas' off-limits for miners, the committee is expected to set the norms to assess forest patches beyond these zones.
Environment minister Jayanthi Natarajan is likely take the GoM's approval on the new norms before demarcation of forest patches are carried out by ministry and its affiliate agencies.
But the fate of Mahan and Chhattrasal coal blocks, which have been mentioned in the CAG report, could get decided before the demarcation exercise since the GoM has asked the MoEF to review its decision to bar mining in these areas since they enjoy good forest cover. Mahan is jointly allotted to Hindalco and Essar and Chhattrasal is given to Reliance Power's Sasan Ultra Mega Power Project.
Indian iron ore mining mess - Panaji Port to be made accountable
Goa government run minor port at Panaji, which has allegedly been the clearing house for millions of tonnes of dubiously sourced iron ore, could be back in the news again.
A top official of Goa's only major central government run port said that on Monday, at a meeting with Chief Minister Manohar Parrikar the latter would be implored to hike the accountability norms at the Panaji minor port, which official records show has exported nearly 5 million tonnes of ore in the last few years.
Mr P Mara Pandian chairman of the Mormugao Port Trust which operates Goa's only major port located in Mormugao said that "We will be speaking to the chief minister about a lot of issues... including this.”
Rejecting outright the possibility of illegal ore being exported out of MPT premises, Mr Pandian also said there was an urgent need to increase accountability of the Panaji minor port's operations.
Mr Pandian told IANS that "Not a single gram of iron ore has been exported from our port... But the accountability of the minor port has to be improved. We have put all these issues before the state government. We will take these up again with the chief minister.”
The official had earlier engaged with the previous Digambar Kamat led government informing of illegal export of ore from the minor port and seeking setting up of checks and balances and a surveillance system to stop the pilferage. Pandian had implored the Goa government to suspend the operation of the Panaji port in national interest.
Mr Pandiyan had said in a September 2011 letter to the chief secretary Sanjiv Srivastava that "It is estimated about five million tonnes have been exported through the Panaji Port as unaccounted iron ore... As far as the Panaji Port is concerned, the whole operation is falling within the administrative ambit of the state government from the point of licensing mines, movement of iron ore by trucks to the loading point, loading of iron ore into the barges, movement of barges through the rivers and thereafter loading into the ship.”
He added that "Mormugao Port Trust has been examining the operational requirement of Panaji Port for quite some time. Panaji Port exists only for namesake on record. It does not have any berth. It operates as an 'outer anchorage port' wherein any exporter can load anything to the ship, and does not follow the security norms.”
Sluggish Chinese demand may ease iron ore prices
Global iron ore prices are projected to fall in the near term and trade between $ 115-120 per tonne due to poor demand from China, experts said.
While stating that the industry was not expecting iron ore prices to climb from the present level owing to the slowdown in demand from China, a senior official of the Federation of Indian Mineral Industries, however, maintained that prices could soften a bit or remain at the current level, considering that there was sufficient supply in the global market.
Alluding to the dip in supply from India, the official said that New Delhi was a fringe player in the global iron ore market as regards pricing, and that countries like Australia, South Africa and Brazil were the market leaders in the commodity and, therefore, determined the prices. With regard to the impact of the Australian tax on iron ore, the official averred that it would not push up prices in the near future.
SHIPPING, TRADE AND TRANSPORT
Shipping ministry pares capacity addition targets
The shipping ministry has scaled down the targets for capacity addition and planned investments in the current fiscal after a dismal 2011-12. It plans to award 18 projects with an estimated cost of 6,750 crore adding 103 million tones to the existing capacity in the current fiscal.
This is a sharp drop vis-a-vis previous year when the ministry had envisaged awarding 24 projects with an investment of about 17,000 crore which would have lead to capacity addition of 232 million tones.
The ministry had awarded just three projects last year and hence 14 of the 18 projects, which are planned for award in the current fiscal, are spill over from the previous year. Four of the new projects planned for award have an estimated cost of 3,000 crore at Haldia and Cochin Ports.
When contacted, port companies expressed caution in the prevailing scenario but declined to comment on the targets being set out.
"Since the port sector derives demand from all industrial sectors relying on international trade and given the GDP growth projection, decline in the port sector seems to be inconceivable," said Samir Kanabar, Partner, Tax and Regulatory services at Ernst and Young. He added that there is enough scope for expansion at existing non-major or greenfiled ports, and this seems to be reflected in the projections.
As a result, there is likely to be a consolidation in the sector, which will allow bigger players to invest and expand the capacity at existing ports.
Projects having cost of more than Rs 300 crore are appraised by Public Private Partnership Approval Committee and then approved by Cabinet Committee on Infrastructure.
Since most projects are smaller ones, there would be multiple approval layers. Secretaries of shipping and finance ministry would be appraise the project first and subsequently the ministers from two ministries would approve the project. After this, the project is sent to cabinet for final approval.
"Things have become worse now. Each of these projects would need approval from cabinet now because of land issues," said a senior official of shipping ministry.
"Delays in permits and approvals also have a role to play, however the economic scenario and reduced global trade have a significant impact as well," said Kanabar.
New Mangalore Port handles 5 pc more cargo in 2011-12
New Mangalore Port handled 32.94 million tonnes of cargo in 2011-12, as against 31.55 million tonnes in 2010-11, registering a growth of 4.42 per cent over fiscal 2010-11.
The number of vessels that called at the Port also increased to 1,136 from 1,097.
A Port Trust release attributed the growth to the increase in the handling of coal, POL, edible oil, timber, granite, containers, etc.
The Port handled a record 2.07 million tonnes of LPG, in the process emerging as the largest LPG handling port in the country. Container traffic surged 12.08 per cent to a record 45,009 TEUs, as against 40,158 TEUs in 2010-11.
SCI boosts offshore operations by inducting AHTS vessel
The Shipping Corporation of India (SCI) accepted delivery of an Anchor Handling, Towing and Supply (AHTS) vessel, m. v. SCI Kundan, last week.
This was as per its contract for the acquisition of 2 newbuilding, 120-tonne AHTS vessels with Cochin Shipyard, signed on February 9, 2011. The first vessel, m. v. SCI Pawan, was delivered in November last year.
m. v. SCI Kundan has bollard pull capacity of 120 tonnes, which allows it to operate in deep sea. The vessel, having gross tonnage of 2,067 tonnes and deadweight of 1,994 tonnes, has been classed with IRS, is equipped with Dynamic Positioning-I (DP-I) system, Reverse Osmosis Plant, Firefighting (FIFI) equipment, and partial UKOOA (C) compliance. It has been built to adhere to the latest and most stringent international regulations.
According to an SCI release, this vessel will be able to offer the essential support services for the growth of the Indian offshore industry.
SCI presently has a fleet of 13 offshore vessels, of which 9 were acquired in the eighties. As a national carrier, it has been striving to increase its presence in the country's offshore sector, the release stressed, adding that the vessels delivered and those on order would be crucial to the E&P operators in this sector. Besides serving the nation's interest, the new vessel would strengthen SCI's fleet base and facilitate the start of a new era in its offshore operations, the release pointed out.
With the addition of this vessel, SCI's fleet strength stands at 77 totalling 5.56 million DWT, which includes 13 offshore supply vessels. Such acquisitions are in line with SCI's strategy of maintaining a modern and young fleet. It has 26 vessels on order at present, 15 of which are scheduled for delivery this year, the release said.
Attachment – Circular received from ports of captain - Goa