Industry Updates on 4th September, 2012


INDUSTRY UPDATES
4th September, 2012

STEEL, METALS AND MINING
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COAL
Reliance power starts coal mining for sasan 4000 MW ultra mega power project.
Reliance Power has started producing coal at two mines attached to its 4,000-megawatts ultra mega power project at Sasan, Chief Executive JP Chalasani said on Monday.
Mining operations began at a time when the government is reviewing the progress of captive coal mines allocated to various companies. Blocks that have not met milestones for development face government penalties, which may include encashing of bank guarantees or cancellation. "Coal production has commenced ahead of schedule at Reliance Power's Moher and Moher-Amlohri Extension coal mine, part of the Sasan Ultra Mega Power Project," he told reporters, but did not comment on the Chhatrasal blocks, also linked to the Sasan project, the allocation of which the Comptroller and Auditor General (CAG) says must be reviewed.
"The investment in these coal mines will be around 5,000 crore which included investment in state-of-the-art mining equipment and technology. Over 70 lakh cu m of over burden (sand) was removed to start production of coal," Chalasani said.
In its recent report, CAG said permission to use excess coal from the three mines allocated to the Sasan unit for other projects vitiated the bidding process and led to undue benefit to Reliance Power. The company has strongly denied these allegations.
Analysts said shareholders may seek further clarity on the issue on Tuesday when they meet Anil Ambani at the annual meeting of shareholders. "These are interesting developments but investors would be more interested in getting a status report on various projects, detail of what exactly is happening on the ground and where is it that these projects are hitting road blocks," Arun Kejriwal, director of Kejriwal Research & Investment Services said.
(Economic Times)

Delay in green NOD to coal projects can impact economy: Panel
A Parliamentary committee has said delay in obtaining environmental clearance for coal projects has led to an "alarming situation" and it could impact the economy.

"The delay in obtaining environment clearances has led to an alarming situation...If the present scenario is allowed to continue, the production targets set for coal and lignite companies would come down drastically affecting the energy sector in particular and Indian economy at large," the Standing Committee on Coal and Steel said in a report tabled in Rajya Sabha today.

Production of coal has been seriously affected and it is "nation's loss," the panel said, strongly recommending that the forest clearance and environment clearance should be given as quickly as possible. As on date, there are a total of 178 forestry proposals that are awaiting clearances at various levels, including 125 that are awaiting stage 1 clearances and 53 which are awaiting stage II clearances, the government said in the report.

"At stage I level, the forest area involved is about 15,400 hectares and the projected production from the projects involved is about 128 million tonnes (MT) during 2011-12...An area of 14,000 hectare and a projected production of about 79 MT are involved at the stage II for 2011-12," it added.

Observing that "nothing concrete" has happened despite the Coal Ministry taking up the matter with the Prime Minister's Office (PMO) and with different Ministries, including Power, Coal and Steel, besides the Planning Commission, it said Coal Ministry should make all efforts to make progress in the projects.

Noting that the concept of controversial "go" and "no go" classification which had affected 203 coal blocks has been done away by a ministerial panel it added, "Though the Committee are sanguine to note that the controversial concept of 'go and no go areas' for coal mining has been done away with but still much is needed to realise this objective.
(Economic Times)
IRON ORE
Supreme court allows 18 Karnataka Iron ore mines to resume operations
The Supreme Court on Monday allowed 18 mines to resume mining in Karnataka, partially easing a 16-month old ban on iron ore mining due to environment concerns.
The move is expected to add five million tonnes of iron ore supply to steel companies, who have been starved of this crucial raw material for more than a year.
But the decision may not lift the industry out of its gloom as the so-called 18 'category A mines' in Karnataka's Chitradurga, Bellary and Tumkur districts can resume operations only after getting necessary government approvals, a process likely to take many months.
The SC banned mining in the state last year, acknowledging severe environmental damage due to large-scale illegal mining. During the course of the case, its panel on forest matters had divided the leases as per their involvement in illegality; Category A mines is those that have a clean chit.
The court's decision may, however, not pave way for iron ore exports immediately. Miners, equipped with far more stringent R&R (relief and rehabilitation) guidelines will also have to get all their regular clearances from the ministry of environment and forests, the Indian Bureau of Mines and the local pollution control board.
Mining in India has become controversial due to the operation of many illegal mines and the unhealthy manner of their operations. The Reddy brothers of Karnataka, who operated many mines in the state by remote control, were alleged by various investigative bodies to have flouted environmental and mining laws. Their name has become synonymous with corruption in the mining industry leading to the humiliating resignation of their patron and then Karnataka chief minister, BS Yeddyurappa last year.
In Karnataka, the Central Empowered Committee or CEC has also recommended cancellation of licences of as many as 49 iron ore miners, falling into category C. it has further suggested that they then be auctioned off. But the court is yet to decide the fate of these mines. It is also yet to clear those miners, who the CEC had recommended be fined for operating mining pits and burden dumps outside sanctioned areas. JSW Steel, an important stakeholder having a significant exposure in Karnataka declined to comment. "Our legal team is studying the verdict," the spokesperson said.