INDIA INDUSTRY UPDATES On 22nd November, 2012

On 22nd November, 2012

Coalmin deallocates mine allotted to Bihar Sponge Iron
The government has decided to deallocate a coal block allocated to Bihar Sponge IronBSE 1.12 % and deduct bank guarantee of Rs 26.5 crore in case of Jindal Steel & Power Ltd (JSPL) and Jayaswal Neco.

"As the company has been given a number of opportunities to develop the coal block and...has failed to develop the same has been decided to deallocate the Macherkunda coal block in the state of Jharkhand from Bihar Sponge Iron Ltd," Coal Ministry said in a letter dated November 20 to the company.

"In addition, it is further decided to return the full bank guarantee amount without any deduction," the letter said.

The Coal Ministry in another letter to JSPL dated November 20 said that it has decided to deduct bank guarantee amounting to Rs 16.5 crore with regard to Jitpur coal block in Jharkhand alloted to the company.

"It has been decided to deduct the proportionate bank guarantee for shortfall in production furnished by the allocatee companies. The bank guarantee to the extent of Rs 16.59 crore be deducted," the coal ministry said in a letter to JSPL.

In another letter to Jayaswal NecoBSE 2.68 %, the ministry said, "It has been decided to deduct proportionate Bank Guarantee furnished by the allocatee companies. The Bank Guarantee to the extent of Rs 10 crore be deducted."

The Inter-Ministerial Group (IMG) has completed the exercise of scrutiny of blocks alloted to both private and public sector firms, which were issued show cause notices for failing to develop mines within stipulated timeframe.

A total of 58 mines were issued show-cause notices for their failure to develop blocks within stipulated timeline.

The government had formed the IMG in July to review progress of coal blocks allocated to firms for captive use.

The CAG had estimated that undue benefits to the tune of Rs 1.86 lakh crore might accrue to private firms on account of allocation of 57 mines to them without auction.
(Economic Times)

Jindal Sees first Mozambique coal exports by January

Jindal Power & Steel has started producing coal at its mine in Mozambique this month, with first exports expected by January next year, the company's country head for Mozambique said at an industry conference on Tuesday.
The company initially plans to produce and ship 1.3 million tonnes of coal, ramping up to 10 million tonnes over three to four years, with potential to double that in the future.
"Production has already started. We expect our first shipment in the next few months, possibly by January," Manoj Gupta told a Coaltrans conference in Maputo.
The mine will produce both coking coal and thermal coal.
The company's mine is not linked to the Sena railway line which Vale and Rio Tinto are using to transport coal to the port at Beira, so Jindal plans to use trucks over 100 km (60 miles) to link up with the Sena line.
The refurbishment of the Sena line to handle 6.5 million tonnes of coal a year has been delayed, forcing Vale to curtail production and exports this year.
There are plans to upgrade the line further to eventually carry up to 18 million tonnes, but critics wonder if this will happen any time soon given already major delays to the first phase of the project.
Mozambique is a hot new destination for coal producers but the poor state infrastructure in a country that remains dirt poor despite rapid economic growth in recent years remains an obstacle to developing the industry.

(Economic Times)

Iron ore export from India in Oct at 10 year low – Macquarie

According to preliminary figures cited by Macquarie Group Ltd, export of iron ore from India came to
281,000 tonnes in October, the lowest monthly figure in 10 years.

The investment bank said that the country's shipments of the steelmaking raw material are down 55% from last year so far in 2012 to 32 million tonnes.

According to Macquarie, deliveries usually rise by 1.5 million tonnes in October from the prior month, which cut its forecast for Indian Iron ore export next year to 25 million tonnes.
(Steel Guru)
China gives fiscal support to improve domestic iron ore production

To support medium sized state run metallurgical mines to raise or stabilize Chinese iron ore production, to lift fe content and beneficiation recovery, to improve mine environment etc, China's central financial system will give special fund through budget to activities above.

Ministry of Finance in an announcement on its official website on November 19th said that declared a new version evolved from the previous policy about financial support to independent metallurgical mines.

Fund can also be used in processing tailings etc. This specifies fund usage from previous vaguely defined expansion, maintenance, technology in mining and beneficiation etc.

Qualified candidates include medium sized state run businesses that need to be independent legal entities and participants primarily engaged in iron ore mining and beneficiating. The State needs to take full stake or majority of those businesses.

Currently, businesses that are relatively held and share held by the state or invested by central government owned companies are excluded.

New policy said that the new policy also clarifies fund usage. For mine construction, fund should be no more than 20% of investment in the year, for new technology in mining and beneficing and environment improvement, fund should be no more than 30% of expenditure in the year.

Ministry of Finance added that it can 'further improve capital support in the development of state run metallurgical mines and to improve efficiency of financial capital.
(Steel Guru)
Indian iron ore export to China may fall to 32 million - Mr UN Redkar

Mr UN Redkar China representative of Essel Mining & Industrie, Indian iron ore shipments to China in 2012 is likely to fall 30 million tonnes from a year before to around 32 million tonnes and will move India from the third largest oversea supplier to China.

Mr Redkar said that iron ore export limits is ongoing and will continue to impact.

Indian was the second biggest supplier to China in terms of iron ore especially in 2009 when export to China peaked 107 million tonnes till it was replaced by Brazil in 2008.

Iron ore shipment to China has been falling for two consecutive years from 65 million tonnes in 2011 the year when Indian announced limits on iron ore exports.

In 2012, India export 73 million tonnes of iron ore to China, taking 10.65% in seaborne deliveries to China. If export in 2012 is 32 million tonnes as expected by Mr Redkar, it represents a decline of around 44% on annual basis and a revision from 65 million tonnes estimated earlier in April.
(Steel Guru)

Government to approve NMDC’s 50PC stake buy in legacy Iron ore
The government will soon approve NMDC's acquisition of 50 per cent stake in Australia's Legacy Iron Ore at the next meeting of the Cabinet slated later this week, sources said. The state-owned iron ore miner has already announced acquisition of 50 per cent equity in Legacy Iron Ore, a listed entity in the Australian Stock Exchange, for AUD 18.9 million (Rs 108.31 crore at current exchange rates).

Legacy Iron Ore is endowed with more than one billion tonne of magnetite resource. This is the first acquisition by NMDC, which aims to raise its iron ore production capacity to 48 million tonnes per annum (mtpa) by 2014-15 from current installed capacity of 32 mtpa.

NMDCBSE 1.17 % has been pursuing the Perth-based iron ore explorer having both thermal and coking coal and mines.

The company has been actively pursuing the acquisition of overseas strategic mineral assets with the aim of meeting its own requirements and also towards raw material security for the country's steel and fertiliser industries.

Following the acquisition of Legacy, NMDC is also eyeing more acquisitions in Brazil, Mozambique, Russia, USA and South Africa. Company's Technical Director N K Nanda recently visited Brazil and the US to scout for opportunities for acquisition.
(Economic Times)

Adani & Essar vying for Chennai’s mega container terminal 
THE Union Home Ministry’s approval of bids by Essar Ports and Adani Ports, to build Chennai’s mega container terminal, has cleared the path for the Shipping Ministry to begin the awarding process. With only two bidders remaining, the higher bid should win the Rs 4,000-crore project. 
Chennai Port’s second attempt at awarding the project has come after the Home Ministry rejected Adani Ports bid in 2011, citing the meagre 1.5 per cent revenue share offered to the Port. 
While Adani Ports, the sole bidder in 2011, had secured the clearance then, Essar Ports had to seek clearances from the Home, Defence and External Affairs Ministries after the merger with its holding company. 
The latest development is of significance as Adani Ports has been consistently denied security clearance from the Home Ministry for various projects at JNPT, and in Kerala and Tamil Nadu since 2010. 
Once commissioned, the mega container terminal would boast a capacity of 4 million TEUs and be able to handle ultra-large vessels, becoming the largest container facility on the country’s east coast. 
The proposed container terminal would be developed to the north of the existing Bharathi Dock at Chennai Port, with 2 new breakwaters and a quay length of 2 km.
(Exim India)
Kolkata Port Trust to start re-tendering of ABG berths 
MERELY 3 weeks after the ABG Haldia Bulk Terminals pull-out, the Kolkata Port Trust (KoPT) plans to kickstart the re-tendering process of berth numbers 2 and 8 at the Haldia Dock Complex (HDC) by holding a pre-bid meeting. 
"We are holding it there as it may help bidders to have a first-hand view of the location. The entire bidding process will take at least 6-8 months to complete. The price bid submission date is kept as December 3. We will issue the letter of intent by December or January only," said an official of HDC. However, the port has not kept any reserve price.
(Exim India)

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