Industry Updates on 24th August,2012


INDUSTRY UPDATES
24.08.2012
STEEL, METALS AND MINING
Jairam Ramesh calls for freeze on fresh mining in worst Naxal – affected regions
Rural Development Minister Jairam Ramesh has pitched for a moratorium on new mining projects in the worst Naxal-affected regions and particularly in areas recently recaptured from insurgents, saying it was essential to quell the Maoist problem wreaking havoc across much of India's hinterland. Tribal affairs minister Kishore Chandra Deo had earlier made this suggestion. In comments certain to draw the ire of industry, parts of which already view him as anti-development, Ramesh also said mining was part of the problem, and called it one of the key issues contributing to the Maoist stranglehold over mineral-rich forest areas.

"There should be a 10-year moratorium on new mining in the worst Naxal-affected areas, particularly those areas which have recently been liberated from Maoist control and where we need to re-establish the presence of the state, improve governance and ensure that Maoists don't regain the foothold," he told ET in an interview.

Ramesh said that mining as it has been and is being undertaken was "neither ecologically sensitive nor socially inclusive". He said it had aided Maoists gain control over large swathes of central India's tribal belt, as he argued that it was essential to address issues arising from mining activities if the state is to consolidate and re-establish its presence in the Naxal-affected areas.

A moratorium on mining, Ramesh said, will buy the central and state governments time to first provide the basics in tribal areas and then help equip the local population to be able to participate in economic activities such as mining.

"What we need to do is build up the skill set of the local population, improve governance, and train the local people so that they are in a better position to participate in this economic activity," he explained.

"If you have a free for all for mining in these areas, given that our track record in mining has been so disastrous, what you will have in the initial years will be that all the jobs (skilled and semi-skilled) go to outsiders and the menial jobs will be done by the locals."

Such a situation would over time breed resentment among the locals and end up becoming a recruiting sergeant for the Naxal cause, he added. Limiting mining activity would also help cut off a key funding source for the Maoists, whom Ramesh described as being fuelled by "levy and not ideology".

"The moment you expand mining activities you will find a proliferation of groups operating under the garb of Maoist ideology, but who are basically extortionists," he said.

With his stance on mining, Ramesh is potentially placing himself once again in the firing line of detractors who blame him for a lot of the country's present economic problems.

In his previous job as environment minister, Ramesh pushed a policy demarcating forests as 'go and no-go' areas for mining, a move that made him a lightning rod of criticism both within and outside the government.

Other ministers and some in industry circles have blamed him and his policy for raw material shortages and resultantly a sharp drop in economic growth rates.
(Economic Times)

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COAL
Indian coal mining scam - CBI may register multiple FIRs in coal scam

The CBI is likely to register more than one FIRs in the alleged irregularities in allocation of coal blocks after it came across several cases of violation of norms by state government officials and allottees. CBI sources said that the agency has already questioned senior bureaucrats who were overseeing allocation of coal blocks during 2006-09. Meanwhile, the agency is also taking into cognisance the Comptroller and Auditor General report on alleged coal block scam which was tabled in Parliament on Friday.

The sources, however, made it clear that CBI would not be going into policy issues but will limit its role to aspects where criminality could be established.

The agency has also questioned members of screening committee including Secretaries and Joint Secretary in the Ministry, CBI sources said.

They said the questioning of the Coal Secretaries, who also chair the screening committee, was done to understand the issues involved in the allocation of coal blocks during the period and so far agency has not found any irregularity on their part.

They said that the agency has shortlisted nearly 15 companies which allegedly violated norms of allotment of coal blocks and questioning of their officials is going on.

The agency has registered the Preliminary Enquiry, which is the first step of initiating the CBI probe, against unknown persons in connection with a complaint referred to it by the Central Vigilance Commission.

Allocation of coal blocks is done through an inter-ministerial inter-governmental body called the Screening Committee chaired by coal secretary.

It includes the secretaries of nine ministries having interests in coal, besides heads of various PSUs, and chief secretaries of coal-supplying states.
(Steel guru)
GVK gets final green NOD for Australian coal project
In a major relief to India's GVK group and Australia's Hancock Prospecting, the Australian federal government on Thursday granted final environmental approvals to the GVK-Hancock joint venture's A$10b Alpha coal and rail project in Queensland state.


GVK owns 79% in the Alpha Coal project, while the balance 21% is held by Australia's richest person Gina Rinehart, who sold the majority stake in favour of the Indian firm in September last year.

In a setback to GVK, the project has been hanging fire for nearly three months after the federal government refused accord environmental clearances the project after the Queensland state government cleared it in May.

The Australian federal government, which had in June halted clearances following serious concerns expressed by the environmentalist led by global green watchdog Greenpeace, has now prescribed 19 conditions for GVK to protect the environment, while granting final clearances.

The Greenpeace led environmentalists have been raising concerns over the adverse environmental impacts on the fragile Great Barrier Reef and threatened species in the area by GVK's Alpha coal, rail and port project.

In a statement on Thursday in Hyderabad, GVK said the Australian federal environment minister Tony Burke granted approvals to construct and operate the Alpha coal mine and a railway line between the mine and the port at Abbot Point near Bowen. GVK said the coal mine and railway line projects would provide jobs to some 6,000 people and help the Australian government earn $1.5 billion a year in royalties and taxes at peak production.

The GVK group vice chairman GV Sanjay Reddy said, "This is another important milestone for our project which will provide significant benefits to the Alpha and Bowen regions, the state and the country."

Further, Reddy said the positive decision of the Australian federal government also paves way to ensure that more than 1.4 billion people, largely in Asia, that face a major electricity shortage are provided with an additional source of coal to enhance electricity supply to the region. The development also paves way to "improving quality of life of the people and overall economic development."

In September last year, GVK had bought 79% in the Alpha Coal and Alpha West projects and 100% stake in Kevin's Corner project, the three mines having an estimated 8 billion tonnes of coal resources, in Queensland state from Hancock Prospecting for $1.26 billion. GVK group had also acquired a 100% stake in the 500km railway line and a 60 million tonne a year port as a part of the 'pit-to-port' logistics solution.

GVK said the coal mining projects with superior quality low ash, low sulphur and low gas thermal coal will be reliably exported, largely to the Asian destinations and it expects to start project works early next year expecting first coal to be produced in 2015.
(Economic Times)
IRON ORE
Indian iron ore mining mess - Karataka weeds out transport hurdles

The Karnataka government has initiated steps to resolve some of the teething problems and procedural delays coming in the way of smooth transportation of iron ore sold through e-auction by the monitoring committee.

It has decided to issue round-the-clock transit permits to NMDC’s mines in Bellary district’s Donimalai. Besides, the government will continue to issue transit permits between 6 am and 10 pm for NMDC’s Kumaraswami mining lease in Bellary district.

To ensure the availability of iron ore for the steel and allied industries, the Supreme Court had, in its order dated August 5 last year, permitted NMDC to produce one million tonnes per month in Donimalai and Kumaraswami mining leases and sell it through the e-auction route. The state’s forest department has said a system has been put in place to streamline the process. It has also decided to deploy additional foresters for this purpose. The principal chief conservator of forests is regularly reviewing this matter and additional manpower would be deployed, wherever required.

In its latest report submitted to the apex court on August 16 this year, the Central Empowered Committee said that “It is expected the production, sale and dispatch of iron ore from the two mining leases of NMDC will take place smoothly, following certain steps taken by the Karnataka government.”

At a meeting convened by CEC on August 13, the Karnataka government clarified it had taken a slew of measures to streamline the issue of transit permits by the forest department (Form 27 and 29) for the iron ore sold through e-auction from the mining leases of NMDC and other lessees, and to expedite the preparation of reclamation and rehabilitation plans.

The deputy conservator of forests, Bellary, on the basis of the bulk permits issued by the mines department, would authorise the issue of Form 27 and 29, without insisting on applications by the buyers concerned. The foresters would issue forest permits on the basis of authorisations from the DCFs. The system of endorsement of these by the range forest officers had been dispensed with, the forest officials told CEC.

In the absence of the DCFs, the assistant conservators of forests concerned would authorise the issue of forest permits. The forest permit fee for the mineral sold through e auction would be accepted from the monitoring committee (out of the contingency funds recovered from buyers), and not from individual buyers.

As regards the implementation of R&R plans, the government said the principal secretary for forests and the principal chief conservator of forests had taken steps to ensure no further problems were faced in the transportation of iron ore sold through e-auctions.

The officers concerned have been asked to ensure the R&R plans approved by the lessees are implemented immediately. CEC has also clarified that the respective lessees are responsible for the implementation of the approved R&R plans, even if the lease period has expired.

CEC also impressed upon the Karnataka government to speed up the process of the preparation of R&R plans, as the current pace of progress was disappointing. It said that “The Karnataka state has agreed to take urgent remedial measures in this regard, including, if found necessary, identification of an alternative agency.”
(Steel Guru)
CEMENT
AGRICULTURE
Brace for spike in pulses, edible oil import bill: Experts 
EXPERTS have cautioned that there will be a rise in the annual edible oil and pulses import bill due to an expected domestic shortfall, following the deficit monsoon and a spike in global commodity prices. 
Imports are expected to jump by 10 per cent in the current fiscal. A senior official of the Commission for Agricultural Costs and Prices (CACP) stressed on the need to develop domestic availability of edible oil. While pointing out that the country had imported pulses and edible oil worth Rs 55,000 crore in 2011-12, he said the figure could exceed Rs 60,000 crore in the current year. 
Besides, an official of the Solvent Extractors' Association of India (SEA) said he expects edible oil imports in the next crop season, commencing from November, to touch 9.5-10 million tonnes, as against the earlier estimate of 9.1-9.2 million tonnes. He pointed out that pulses amounted to about Rs 8,767 crore of the Rs 55,000 crore worth of edible oil and pulses imported in 2011-12. 
The SEA official expects the pulses import bill to touch Rs 10,000 crore and that of edible oil around Rs 50,000 crore in 2012-13.
(Exim India)
FERTILISERS
Paradeep Phosphates investing Rs. 600 Crore on New Projects
Fertiliser major Paradeep Phosphates Ltd has said it is investing around Rs 600 crore on new projects for raising capacity.

A number of projects are underway for de-bottlenecking of the Phosphoric acid and DAP plants, PPL Managing Director S S Nandurdikar told reporters here.

Besides, projects like a new Sulphuric Acid plant with 2,000 tonne a day capacity and Zypmite plant for granulated phosphogypsum are at different stages of implementation.

"These projects are expected to be completed in the next three years. Estimated investment in these projects will be around Rs 600 crore and on completion we plan to achieve a capacity of 15 lakh MT of DAP and NPK complexes annually," Nandurdikar said yesterday.

On the company's performance, he said, PPL made Rs 259.26 crore as profit before tax during 2011-12 compared to Rs 239.18 crore in the previous year - up 8.39 per cent. However, profit after tax last fiscal was flat at Rs 177.71 crore, as against Rs 177.08 crore in the previous year, up 0.35 per cent.

The rise, Nandurdikar said, was small due to factors like tax credit and certain relief available in 2010-11, but the company's performance was encouraging. The turnover last fiscal stood at Rs 4,700.14 crore despite problems in raw materials availability due to logistic issues, he said.

PPL produced 10.2 lakh tonne fertilisers as against 6 lakh tonne of DAP and 4.2 lakh tonne of complexes of NPK.  Among intermediary products, sulphuric acid and phosphoric acid production was 6.3 lakh tonne and 2.1 lakh tonne respectively. Referring to sales, Nandurdikar said, the company sold 10.2 lakh tonne of its own manufactured DAP and complexes and five lakh tonne of Gypsum during 2011-12.

Besides, as part of its traded products PPL sold 0.88 lakh tonne of imported MOP, 3.53 lakh tonne of imported DAP and complexes.  Though timely declaration of subsidy under the new nutrient-based subsidy policy ensured adequate availability of fertilisers during 2011-12, there was big distortion in urea price vis-a-vis phosphatic fertilisers, Nandurdikar said.

While overall agricultural scenario in the country was favourable in 2011-12 with good rainfall, drought conditions in several regions this year would be disturbing for the fertiliser industry, particularly phosphatic sector, he added.  Referring to corporate social responsibility, the PPL MD said the company's efforts continued in developing areas in neighbourhood of Paradip particularly in two gram panchayats of Bagadia and Mangarajpur in partnership with an NGO.
(Economic Times)
ENERGY 
SHIPPING, TRADE AND TRANSPORT
River-sea vessel rules could boost coastal shipping 
THE new river-sea vessel rules are likely to give a fillip to coastal shipping and industrial development. 
The objective of the new rules, which facilitate lower cost of construction and operation, is to seamlessly integrate seaborne trade from inland waters to coastal waters and to provide a standard for construction, safe operation, and certification of river-sea vessels exclusively engaged in trade between nearby ports. 
While India was until recently adhering to the Merchant Shipping (MS) Act for building and operating ships for coastal transportation, experts believe that the new rules could result in significantly bringing down the construction cost by doing away with the requirements under MS Act regulations. 
Earlier, the MS Act had been adopted uniformly for ships in the coastal and foreign-going trades. 
Meanwhile, the Directorate-General of Shipping had recently ordered the upgrading of the requirements for inland vessels to enable them to operate with cargo within 12 nautical miles of the coast. 
As the development of river-sea container movement would entail a number of floating assets to meet the requirement, which, in turn, would lead to construction of more vessels, analysts believe that the increasing number of 2,000-tonne capacity river-sea container vessels would throw open more job opportunities for engineers and designers. 
While pointing out that some of the private shipyards had already begun venturing into construction of river-sea vessels, they highlighted that ships capable of carrying 6,000 tonnes of cargo could also be built under these rules, facilitating lower cost of construction and operation. 
It was also pointed out that a single river-sea container vessel could take 100 trailers off the roads, thereby reducing congestion and preventing accidents.
(Exim India)

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