Industry Updates on 26.09.2012


INDUSTRY UPDATES
on 26, September, 2012
STEEL, METALS AND MINING
Environment ministry denies delay in clearances to mining projects
The ministry of environment and forests (MoEF) will stick to its norms and criteria for evaluating projects and has rebuffed claims by the industry that delays in green clearances are obstructing projects, such as coal mining.

Environment Minister Jayanthi Natarajan says her ministry has not held up any mining project. "There is a perception that projects are being held up in the environment ministry, but let me make this clear, there is hardly any approval that is pending with the ministry. This perception is demonstrably wrong," said Natarajan.

"There are, however, cases where the project proponents have not submitted proper information, or are yet to provide the environmental management plan. There are 27 manuals but still project developers fail to provide all the requisite information."

Officials said that until June 2012, the ministry has cleared coal mining projects which would yield 1,009 million tonnes (MT) per year. Projects yielding another 67 MT annually are in the process of being cleared. "The ministry has given clearances to more than the production target for the Eleventh Plan. As a matter of fact, we have given clearances that would meet most of the Twelfth Plan target as well," said a senior ministry official. The target for the Eleventh Plan was 554 MT of coal a year and that for the Twelfth plan has been set at 715 MT annually.

The ministry is under pressure to expedite approvals, including forest clearances. The finance ministry had suggested that for speedier forest clearances, the MoEF should consider setting up "three or four forest advisory committees". The MoEF says that the suggestion is unnecessary and unworkable. "First, there is no pending work with the Forest Advisory Committee. Second, the Committee's meetings and deliberations have to be chaired by the director general of forests. So, even if there is more than one panel, it would still require the presence of the chief forest official for any decisions to be taken," explained a senior official.

The Forest Advisory Committee is a key statutory body which considers questions on the diversion of forest land for non-forest uses such as mining, industrial projects, townships and advises the government on the issue of granting forest clearances.

The ministry proposes to demand accountability from project proponents. This is pertinent for large projects that seek large diversions of forest land and coal mining projects and where production lags the annual permissible amount.

"Why should they be asking for clearances for new mines when they are not using what they have?" asked an official.

Last week, Planning Commission deputy chairman Montek Singh Ahluwalia announced that the proposed National Investment Approval Board will help expedite environmental, forest and other statutory clearances for "nationally important" large projects. This board, which will have representatives from key ministries, will take a "holistic" view and approve projects.

However, it is feared that the board will overrule the recommendations of the environment ministry, as was the case with the Mahan coal block. Ministry officials say such plans will undermine the role of statutory environmental and forest approval processes.

The ministry may suggest changes in the process of coal block allocations as well.
(Economic Times)
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COAL
Indian coal mining scam - Spreads to deep sea bed

Central Bureau of investigation has begun probing alleged irregularities in the country's first ever attempt to explore untapped mineral wealth worth thousands of crores lying in the deep sea bed, sensing another mega scam.

The sources said in March last year government, in a first attempt to explore offshore mineral wealth, had placed 62 blocks on offer out of which 28, nearly half, were bagged by companies owned by family members of the former Enforcement Directorate official who had also served in Mines Ministry.

Just a week after filing cases in coal block allocation scam,CBI sources said a preliminary enquiry has been registered by the agency in connection with the alleged favours extended to the companies by the unknown officials of the Indian Bureau of Mines while awarding licences for exploring minerals in the sea bed of Bay of Bengal and Arabian Sea.

It is alleged four beneficiaries companies owned by the family members of an Indian Revenue Service officer are also under the agency's scanner as they bagged nearly half of the blocks despite lacking necessary qualification

It is alleged that companies were incorporated after bids were invited from the interested parties willing to go for exploration and did not have any experience in offshore mining at the time of notification.

The final award of licences had been put on hold after aggrieved parties approached the Bombay High Court and the Andhra Pradesh High Court seeking their cancellation.
(Steel Guru)
Major setback to Mormugao Port Trust,
Goa State Pollution Control Board on Monday directed port authorities to stop coal and coke handling operations at berth Nos 10 and 11 saying that measures taken are not adequate to control pollution.

GSPCB revoked the consent to operate in light of air pollution in Vasco town arising due to inefficient implementation of the air pollution control measures.

The order has been issued under the Air (Prevention and Control of Pollution) Act 1981, and Water (Prevention and Control of Pollution) Act 1974.
(Steel Guru)
RON ORE
Ban on iron ore mining by Goa to hit the production

The recent Goa government's move to ban iron ore mining is likely to hit the production of iron ore in the country during the current financial year. The domestic production is likely to touch 140 million tonnes in 2012-13, an 18% YoY decline. A similar production levels were seen during 2004-05 and the production had peaked in 2009-10 at 220 million tonnes.

A Citi Research report said that during the fiscal ended March 2012, the domestic production of iron ore was estimated at 170 million tonnes, a decline of 20% YoY. The country exported 60 million tonnes in FY12, down by 39% YoY. The production is likely to be affected due to ban and slower MoEF clearances. After Karnataka and Goa, the ban may be extended by other states as well.

Analysts from Citi Research said that "We expect domestic steel production to grow at about 8% CAGR between FY 2005-13 to 78 million tonnes. Domestic ore should suffice to meet India's requirements (about 125 million tonnes). But exports could potentially decline from 60 million tonnes in FY 2012 (35% of total production) to less than 30 million tonnes in FY 2013 if the mining ban in Goa stays."

The recent mining ban announced in Goa could wipe out about 30 million tonnes from the seaborne market (about 1 billion tonnes), partly offset the impact of about 50 million tonnes of new supply expected to come on stream globally in second half of 2012 calendar year and provide near term support to global prices.

The government of Goa suspended mining after the Shah Commission Report was tabled in Parliament on September 12th 2012. This was followed by the suspension of environment clearances for all 93 mining leases by the Ministry of Environment and Forests. The ban in Goa follows a blanket ban imposed by the Supreme Court in Karnataka in August 2011.

It is unclear how long the process of obtaining fresh environment clearances is likely to take. If exports out of Goa are not resumed this year, India's total exports in FY 2013 could drop to about 30 million tonnes (12 million tonnes in Q1 FY 2013). However, the suspension of mining operations will not affect trade and transportation of ore already mined and existing in the lease hold area, in transit or stocked at the port.
(Steel Guru)
NINL halts export trade of pig iron on poor demand

Neelachal Ispat Nigam Limited the largest producer of pig iron in the country, has decided to halt its export trade for the time being on poor international demand. Mr S P Padhi financial director of NINL said that "We canceled a global tender for pig iron sales last week as traders quoted only USD 400 per tonne while we wanted to sell it at USD 440 a tonne. We have decided not to float any tender till the market revives.”


In dollar terms, pig iron rates have come down by USD 90 to USD 100 a tonne to trade at $468 a tonne in the past three quarters. Even though the rupee weakness against dollar has offset some of the losses, manufacturers are reeling under rising input cost which is making it hard for them to sell at lower rates.

However, it is poor demand rather than rising cost of production, which is making it more difficult.

In 2011-12, exports of NINL contracted by a fifth to 328,771 tonnes on lower shipping orders from South Korea, Taiwan and other Southeast Asian nations. As the weak trend is continuing in the current fiscal too, the pig iron maker has slashed its monthly production by nearly 30%.

Mr Padhi said that "We used to produce 60,000 to 70,000 tonne every month three to four months ago. But now the output has come down to 50,000 tonne per month.”

NINL, jointly promoted by MMTC Ltd and the Odisha government, is the largest producer and exporter of pig iron in India since 2004-05. India produces around 5.5 million tonnes of pig iron every year.
(Steel guru)
Government bans sale or Export of Iron ore from captive mines
The central government has banned states from allowing sale or export of iron ore by companies granted mining leases for own steel production. "The entire ore produced in the mining operation (of captive mines) shall be used exclusively for own consumption in iron or steel making and cannot be either sold in India or exported to other countries," the mines ministry said in an order issued on September 19, invoking Rule 27 (3) of the Mineral Concession Rules 1960.

The move comes after the Jharkhand government allowed one time sale of iron ore fines by Usha Martin and Steel Authority of IndiaBSE -0.81 % last year in a controversial move. The two are among six captive mining leases granted to steel makers in Jharkhand, where there are 40 iron ore miners.

Indian steel makers traditionally use iron ore lumps from mines, leaving out ore fines smaller than 10 mm. As mines grow older, only about 30% of their outputs are lumps with fines comprising the rest.

One way of using iron ore fines is removing moisture, beneficiating the ore and baking it into tight balls or pellets, which are easier to transport and less polluting. Pellets are a more efficient feed in steel making than fines and help reduce coal requirement. Although most steelmakers can use pellet feeds, only a few domestic steel makers have facilities to make pellets.

Jharkhand in August last year had relaxed a ban on exports of iron ore from captive mines to allow Usha Martin and SAIL sell nearly 20 million tonnes of ore fines through a one-time domestic sale. It led to much uproar in the state despite a safeguard clause that required the sale to prioritise Jharkhand-based industries. In February this year, the High Court in Ranchi stayed the order, saying only the Centre was empowered to issue such notifications, amend laws or introduce rules under the Mines and Minerals (Development and Regulation) Act.
(Economic Times)
CEMENT
AGRICULTURE
FERTILISERS
India likely to ink DAP, MOP import contract only in February – March 13
India is likely to firm up imports of key fertilisers, di-ammonium phosphate (DAP) and muriate of potash (MoP) only in February-March next year due to sufficient stocks to meet requirement for the forthcoming rabi (winter sowing) season.

The country imports almost 100 per cent of its domestic requirement of MoP and around 90 per cent of DAP.

"India has sufficient stocks of DAP and MoP till about December-end. Any new contracts for these fertilisers are likely to be signed by February-March 2013," Indian Potash Ltd (IPL) Managing Director P S Gahlaut said.

IPL is the country's biggest importer of fertilisers. The country has a huge inventory of DAP and MoP due to a decline in sales in the ongoing kharif (summer) season, he added.

Industry body Fertiliser Association of India (FAI) Chairman A Vellayan said sale of phosphatic and potassic (P&K) fertilisers have been hit due to high prices of the crop nutrients, delayed monsoon rains and low prices of urea.

"Farmers opted for urea due to its low price hurting P&K fertiliser sales. This will also impact the fresh contracts to be signed for DAP and MoP," Vellayan, who is also the Chairman of the Murugappa group that owns leading fertiliser producer Coromandel International, said.

FAI expects the country to import about 2.5-3 million tonnes of MoP and around 5 million tonnes of DAP in 2012-13 fiscal, he added.

India imported about 4.24 million tonnes of DAP and 2.68 million tonnes of MoP in the last fiscal. This is against 7.41 million tonnes of DAP and 4.5 million tonnes of MoP imported during 2010-11. Sharing similar concerns, FAI Director General Satish Chander said it is estimated that for the April-August 2012 period, urea sales fell by 3 per cent, DAP by 29 per cent, NPK by 25 per cent and SSP by 14 per cent compared to the same period of previous year.

The decline is sales of MoP could not be made up as during April-August 2011 the industry had declared 'potash holiday' (non-use of the crop nutrient), he added.

Leading fertiliser manufacturer IFFCO's Managing Director U S Awasthi said "rising fertiliser prices coupled with erratic monsoon has led to a drop in demand by over 30 per cent this kharif season and we have a huge stock".

Till August 2012 in the current season, the unsold stock of DAP with IFFCO was 1.24 lakh tonnes against 18,000 tonnes last year while 2.63 lakh tonnes of NPK stock remained unsold as against 22,500 tonnes in the review period, he said.

"However, late revival of monsoons has kindled hopes of a better off take in upcoming rabi (winter) season," he added.

The fertiliser industry has 8.35 lakh tonnes of unsold DAP till August this year as against 73,000 tonnes in the same time last year, while, 6.83 lakh tonnes of stocks of NPK fertilisers were unsold as against 1.60 lakh tonnes in the same period.
(Economic Times)
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