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.”