INDUSTRY UPDATES On 27th September, 2012


INDUSTRY UPDATES
On 27th September, 2012
STEEL, METALS AND MINING
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COAL
RON ORE
PIL filed un supreme court for ban on mining of Iron, Manganese in Goa
A PIL was filed in the Supreme Court on Wednesday seeking a court direction to stop illegal mining of iron and manganese ores in Goa. The PIL filed by the Goa Foundation, an NGO active in the state, also sought a ban on all trade activities of the illegally mined ores.

The PIL sought a Bellary-type inquiry into all mining leases sanctioned in the state. The state has banned all mining pending a review of all licences. The ban was declared on September 10, 2012. But the NGO insisted that the illegal mining continued in the state.

The PIL was filed through activist lawyer Prashant Bhushan. The PIL alleged that illegal mining was going on in Goa in violation of the provisions of the Forest Conservation Act 1980, the Indian Forest Act, 1927, national forest policy, the Mines and Minerals (Development & Regulation Act, 1957 (MMDR) Act and Mineral Concession Rules, 1960. This raises serious concerns about damage caused to the ecology of the state as also issues concerning transparency and accountability in governance, the PIL said.

"When compared to Bellary, where this court has had sufficient grounds to pass stringent directions in public interest, the situation in Goa is far worse in terms of extent of illegal mining, plunder of public resources, collusion of authorities at all levels and total degeneration of the environment," the petition said.

"It appears as if rule of law no longer exists as the concerned departments, including the Indian Bureau of Mines, Ministry of Environment and Forests and Departments of State viz. the Forest Department, the Goa Pollution Control Board and the Department of Mines and Geology are all complicit in permitting the illegality to continue unabated," the PIL said.

The PIL also cited the Shah Commission report to press for a Bellary-type inquiry into encroachment and lease violations.

The PIL claimed that ban order had not affected "trade and transportation of ore already mined and existing in the lease-hold area, in transit or stores or stocked on the jetties." It also expressed unhappiness with the proposal to permit trade in existing stocks when the commission had unambiguously questioned the validity of every working mine. The proper course of action is to carry out a survey and seize the stocks, the PIL said.

It sought an independent committee to go into the issues raised by the Shah Commission. In the alternative, the court could direct the Central Empowered Committee (CEC) to undertake this function.
(Economic Times)

CEMENT
Cement sector continues to face headwinds, Says ICRA
Credit rating agency IcraBSE -0.25 % today said the outlook for the cement sector continues to remain challenging due to rising input costs, unfavourable demand- supply scenario and overcapacity.

"In view of rising input costs, unfavorable demand- supply scenario and continuance of fundamental issues plaguing the cement industry, the outlook for the sector seems challenging," Icra said in a report.

The fundamental issues affecting cement demand in FY11 and H1 FY12 continue to persist, it said.

"Subdued demand and significant capacity addition had put pressures on capacity utilisation of the cement industry. Apart from unfavorable demand-supply scenario, the industry is also reeling under the pressure of rising input costs."

Prices of key raw materials like limestone and gypsum have increased, it said. "Besides, the increase in domestic coal prices and non-availability of low cost linkage coal has increased the power and fuel cost for cement manufacturers."

Cement companies depending on imported coal have seen some easing in cost pressures due to decline in price of imported coal, the rating agency said.

"However, the benefit of declining prices has been off -set by rupee decline to some extent. In addition, the freight costs have increased due to increase in surcharge and cess by the Railways last year and hike in freight rates for some commodities in March. The recent hike in diesel prices will further escalate the cost of production for cement companies."

In the long-term, however, the agency expects the sector to see higher demand from residential and commercial space, huge investments planned in the infrastructure sector and Government expenditure under various schemes.

However, it cautioned that since cement demand is correlated with economic development, the extent to which the issues affecting investment in projects are addressed would be critical.
(Economic Times)

AGRICULTURE
FERTILISERS
Fertiliser Ministry to expedite proposal to hike urea prices
Concerned over rising subsidies, the Finance Ministry has asked the Fertiliser Ministry to expedite the proposal to hike urea prices. "The Finance Ministry has asked (the Fertiliser Ministry) to accelerate the proposal to raise urea prices...," sources said.


Urea is the only fertiliser that remains under full price control. Its current retail price is Rs 5,310 per tonne. In 2011-12, urea subsidy was Rs 24,500 crore. In June, the Cabinet Committee of Economic Affairs (CCEA) had deferred the decision on urea price increase and had asked the Ministry to make certain changes in view of opposition from various quarters.

The government mainly provides subsidy on fertilisers, fuels and food. To encourage the balanced use of fertiliser and reduce its subsidy burden, the Fertiliser Ministry has proposed to modify the New Pricing Scheme (NPS) Stage-III instead of decontrolling the urea sector, which has been opposed by various ministries.

Besides urea price policy, sources said, that the Fertiliser Ministry has been asked to expedite the proposed urea investment policy, aimed at attracting an investment of about Rs 45,000 crore to boost urea production.

The policy aims at adding production of 7-8 million tonnes to country's existing urea production capacity of 22 million tonnes against the annual demand of 28 million tonnes.
(Economic times)
ENERGY 
Iran finally accepts oil export drop

Iranian authorities have several times rejected the idea that oil exports have dropped, Mr Mohammad Reza Bahonar Vice Parliamentary Speaker have finally announced that oil exports have dropped to around 1 million barrels per day during H1 of solar year averagely while this figure for June and July has fallen to around 800,000 barrels per day.

Earlier, US Treasury Department announced that Iran is losing monthly USD 5 billion in oil revenues due to western sanctions and restrictions over its oil export and banking system. Iran's oil export during last year was 2.3 million barrels per day and according to OPEC statistics it gained about USD 110 billion in 2011 from oil crude export.

Mr Bahonar said that Iran's budget bill for current solar year was approved at IRR 5, 660 trillion but only IRR 1000 trillion of that has been realized during 6 months of current solar year. This means, about 20% of Iranian government's total revenues according to budget bill has been realized during a half of year.

About 20% to 25% of Iranian government's revenues rely directly on crude oil export, then finalizing about 20% of Iranian budget bill during 6 months indicates that addition to oil export other sources of Iranian government revenues have been affected.

Deficit in Iran's current solar year's budget is occurring while Mr Mohamamd Reza Khabbaz who served as a former member of the economic committee of Parliament until May 2012 announced in January 2012 that Ahmadinejad's government faced USD 15 billion deficit during last solar year and borrowed the deficit amount from banks.

The Iranian Central Bank issued a report in May 2012, saying government debts to internal banks until the last solar year have increased four times during 6 years and reached IRR 400 trillion and the head of the Supreme Audit Court, Mr Abdolreza Rahmani Fazli confirmed in June 2011 that the Iranian government borrowed USD 15 billion from banks during first eight months of starting the subsidy reform plan.

It is not clear what Iranian President Mahmoud Ahmadinejad would do with current situation, but regarding increase of USD rate in Iran from IRR 10,400 to IRR 25,500 during 18 months shows a great challenge for Iran's economy.
(Steel Guru)
SHIPPING, TRADE AND TRANSPORT
Please find attached herewith circular received from Mormugao port for coal and coke vessel.


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