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Old July 14th, 2011, 08:14 PM   #101
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Environment minister Jairam Ramesh on Wednesday cleared six coal blocks, including five in ‘no go’ areas, in Orissa. This was the second time in a week that the environment ministry has shown a softening in stance about coal blocks caught in green hurdles.

Of the six blocks, three (Meenakshi-A, B and Dipside) were allotted to the 3,960 Mw/4000 Mw ultra mega power plant (UMPP) in Orissa. Two blocks, Manoharpur and Manoharpur Dipside, were awarded to Orissa Power Generation Corporation (OPGC) for its proposed 1,320-Mw power plant in the Ib Valley, while one (Dulanga) was allotted to NTPC for its proposed 1600-Mw Darlipalli power plant.

Last Thursday, the ministry had given its approval to open up Tara, Parsa East and Kante Basan coal blocks in the Hasdeo-Arand forest region of Chhattisgarh.
Only one (Meenakshi-A) is presently in the ‘go’ area, the other five being in ‘no go’ areas...All six blocks will now be considered by the Forest Advisory Committee as ‘go’ areas,” Ramesh said in a statement.

A senior NTPC official said, “With this clearance, the company will go ahead with block development activities. The coal ministry has already approved its mining plan for a capacity of seven million tonne per annum.

OPGC Managing Director Venkatachalam Kuppusami said, “We are thankful to the minister for considering the merit of our case while changing the category to ‘go’ from the earlier ‘no go’ for the coal blocks allotted to us.”

The company had requested the environment ministry to lift the ‘no go’ status from the two coal blocks. While state energy minister Atanu Sabyasachi Nayak had written to Ramesh on the matter, state Chief Minister Naveen Patnaik had sought the intervention of Prime Minister Manmohan Singh. Nayak had again sent a letter to Ramesh on Saturday.

Under the initial ‘no go’ exercise, the environment ministry had barred mining in 203 coal blocks, with a production potential of over 660 million tonnes.

Ramesh said it was decided to take a relook at the three projects together to get a broader picture of the biodiversity impact.

Referring to a satellite imagery on the forest area to be diverted as coal blocks, Ramesh said 40 per cent of the forest area allotted to UMPP could be saved.

He said the number of trees to be felled in the case of NTPC has fallen from around 67,500 to 37,500 (a 44 per cent reduction) and in case of OPGC, about 75,000 trees were saved.

He said all the power units being put up with the coal mined in these six blocks will use supercritical technology. “This will result in a saving of around five to eight per cent in terms of carbon dioxide emissions from each of the generating units as compared to a comparable sub-critical 500 Mw unit,” Ramesh said.
since i didn't update the thread, therefore i am posting a bit old articles, apologies.
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Old July 20th, 2011, 07:19 PM   #102
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State-run mining giant Coal India today blamed early rains and inclement weather in the eastern region for playing spoilsport in achieving its 98.7 million tonnes (MT) target for the first quarter.

Already plagued by a plethora of problems like delay in green clearances to its projects hurting production in the face of ever-widening demand-supply gap, the Maharatna company missed the April-June target by 2.4 MT.

"Given the production trend in April and May, we were quite hopeful of meeting 98.7 MT target for the first quarter. However, early and heavy rains hit most of our coalfields in the eastern belt making production as well as transportation tough," Coal India Chairman N C Jha told PTI.
With more than double average rainfall recorded at Eastern Coalfields Ltd (ECL), Bharat Coking Coal Ltd (BCCL) and Central Coalfields Ltd (CCL) in the region in June this year as compared to a-year-ago period, Jha said the company could achieve only 96.3 MT production.

Out of the eight subsidiaries of CIL, five are situated in the eastern region including Mahanadi Coalfields Ltd (MCL) besides the exploration arm Coal Mines Planning and Design Institute (CMPDIL).

Jha, however, exuded confidence that the Maharatna company would achieve the 452-MT target for the current fiscal.

"Our growth in the current month is fine. From the trend it seems the company will be able to achieve the target of 452 MT for the current fiscal," he said.

Against a backdrop where more than 150 mining proposals by the company have been facing delays in environmental clearances, the world's largest coal miner had missed its last fiscal's production target by recording 431.325 MT output against the revised target of 440.20 MT.

CIL had blamed it to delays in clearance to its projects. The coal ministry, too, has repeatedly expressed concerns over such delays, saying green delays could result in a production loss of about 190 MT by March, 2012.

Meanwhile the demand-supply gap of the dry-fuel is projected at 142 MT this fiscal and is likely to reach 200 MT by 2016-17.

CIL, accounts for more than 82% of the domestic production
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Old August 3rd, 2011, 07:47 PM   #103
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Coal India (CIL) is likely to invest about Rs 28,000 crore in 68 mining projects having a production capacity of about 230 million tonnes per annum, Parliament was informed today.

"The estimated investment likely to be made in CIL and its subsidiaries for the purpose is Rs 27,946.42 crore and it would be mobilised from internal sources of the company," State Minister for Coal Pratik Prakashbapu Patil said in written reply in Lok Sabha.

Of the 68 projects, 16 are of Western Coalfields Ltd (WCL) in Maharashtra, 13 from Central Coalfields Ltd (CCL) in Jharkhand, and 13 of South Eastern Coalfields Ltd in Chhattisgarh and Madhya Pradesh, the minister said.

Twenty five new coal blocks of public sector firms like CCL, WCL and Singareni collieries Company Ltd (SCCL) and eight coal blocks alloted to firms like Karnataka Power Corporation Ltd and SAIL among others for captive use have been opened during the last three years, he said.

At present 560 underground and opencast working coal mines, including 471 on Coal India, are spread across the country.
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Old August 10th, 2011, 08:34 PM   #104
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Thanks to growing uncertainty over the price of imported coal, power project developers are ready to pay a premium to secure access to captive coal mines.

A case in point is the R112 per tonne coal price quoted by Lanco for developing a 2,000 mw power project in Chhattisgarh for Maha Tamil Collieries, which has been allocated a captive coal block to meet its fuel requirement.

Industry watchers are surprised by Lanco’s move and wondering if the project would be commercially viable. But a senior Lanco official maintained that the company would still make a decent profit. Some eight developers, including L&T, GVK, Jindal and GMR, had bid for the project.

Maha Tamil Collieries is a 77:23 joint venture between Tamil Nadu and Maharashtra. The captive mine, Gare Pelma Sector II, allocated to the JV is located in Chhattisgarh and has the production potential of 15 million tonne a year.

Lanco won the project by quoting a coal price of R112 a tonne. While Maharashtra will get its share of 3.45 million tonne of coal from the block, the balance will be used to fire the 2,000 mw power plant. According to an estimate, Lanco will have to make a total investment of R15,000 crore to develop the captive mine and set up the power plant. In return, it can sell 800 mw from the plant in the free market.

Back-of the-envelope calculations suggest that if Lanco has to recover its cost, it must sell electricity at R5 a unit. But according to the data released by the Central Electricity Regulatory Commission (CERC), the average weighted price of electricity in the free market during 2010-11 was R3.44 a
unit in the Day Ahead market and R3.77 a unit in the Term Ahead market.


Lanco’s coal mining cost is estimated at R900 per tonne of coal. The developer will also have to pay to Maha Tamil for every tonne of coal produced from the block. Coal price will be revised annually in line with CERC’s coal price index.

Significantly, the central government is amending law to auction captive coal blocks to consumers instead of following the existing procedure of nomination for selection of developers. If the Maha Tamil experience is anything to go by, we can expect fierce bidding in future auction of captive coal blocks.
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Old August 27th, 2011, 09:17 AM   #105
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In order to ensure that Rs 6,000 crore earmarked for acquiring mines by Coal India abroad does not remain unutilised, a Parliamentary Panel has asked the coal ministry to fast-track the acquisition process.

It has also asked the ministry to expedite the tendering process for acquisition of coal blocks in countries such as Australia, USA and Indonesia.

The Panel has also asked the government to constitute a "dedicated team" of Coal India Ltd (CIL) to expedite the process of production of dry fuel from overseas mines.

"...What is really needed is to accelerate the completion of various exploratory works to ensure early production from such mines, so that outlay earmarked does not remain unutilised," Standing Committee on Coal and Steel has said in its recent report.

It added, "The committee would also like the ministry to expedite the tendering process for acquiring coal blocks in Australia, Indonesia, South Africa and USA".

CIL, which accounts for over 80% of the domestic coal production, has earmarked Rs 6,000 crore for acquisition of mines abroad.

In 2009, the public sector firm had floated a global tender to select strategic partner(s) in the US, Indonesia, Australia and South Africa.

A panel was constituted, which after examining the responses and proposals, shortlisted 12 companies in the first phase. The proposals were put before the maharatna firm board. Later, the board advised for only undertaking due diligence of listed companies.

"It was also directed that the unlisted companies may be informed that they may be considered if they can get themselves listed with stock exchanges," the Parliamentary Panel report said.

A couple of day backs CIL said that it has zeroed in on two overseas coal assets, one in Australia and the other in Indonesia, for acquisition and was likely to begin serious dialogue with the owners soon.

In this regard, CIL has also approached the government for relaxation of PSU guidelines, stipulating a minimum 12% internal rate of return on investments. It has also sought to sidestep the rule that only mines of listed companies should be acquired.

The maharatna firm through its wholly-acquired subsidiary Coal India Africana Limitada has also won two coal blocks in Mozambique. The preliminary exploration activities in the blocks have recently been started, the report said.
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Old August 27th, 2011, 09:20 AM   #106
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At a time when the country is embarking on ambitious power generation programmes, the shortage of coal is expected to impact new capacity addition plans to the tune of 15,000 MW in the current fiscal.

A parliamentary panel has said that coal availability for power plants designed to run on indigenous coal would be only 417.5 MT in the current fiscal, as against the requirement of 480 MT. Out of the total, 319 MT would be supplied by Coal India.

"The Ministry of Power has stated that against the earlier indication by Coal India for supplying 360 MT of coal, it will now supply 319 MT to power sector.
"The ministry has further stated that the reduction of 41 MT of coal by Coal India would affect the new generating capacity to the extent of 15,000 MW," the Standing Committee on Energy has said in its report.

For 2011-12, the capacity addition target has been set at 17,600 MW, including 2,000 MW from nuclear power generation.

Non-availability of fuel and environmental hurdles are among the major factors adversely impacting the capacity generation targets. India has a peak power shortage of about 13%.

Even with 17,600 MW of new capacity addition in the current fiscal, the country would see only an addition of little over 52,000 MW during the 11th Plan period (2007-12), much lower than the revised target of 62,374 MW.

The panel, chaired by Mulayam Singh Yadav, has said Coal India should give first priority to the power sector in coal allocation.

Regarding fuel linkage issues, the report noted that a long-term solution should be worked out in the Group of Ministers' meetings or through "international economic tie-up/cooperation".

The Power Ministry expects to see the capacity addition of over 80,000 MW in the 12th plan period (2012-17).
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Old August 27th, 2011, 09:41 AM   #107
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Bharat Coking Coal Ltd (BCCL), a subsidiary of Coal India Ltd, can now heave a sigh of relief. The Jharkhand High Court on Friday ordered status quo on the closure of 22 operational mines of the public sector unit till August 30 for violation of green norms as ordered by the State Pollution Control Board last week.

Challenging the order in the high court, BCCL said the order does not comply with the state pollution law. It added the company had not received the closure order and, hence, the mines were not closed.

Contesting the BCCL arguments, state advocate-general Anil Kumar Sinha said the order was very much in accordance with the law and the mines in question were operating without permission. He said despite several notices, the company neither replied nor followed the pollution norms.
After hearing the arguments, justice Poonam Srivastava asked the state government to file a counter affidavit on the petition of BCCL.

The underground and open cast mines, which were ordered for closure are Phularitarh, Muraidih, Shatabdi, Govindpur, Gajlitarh, Mudidih, Tetulmari, Senara, Bansjora, Gondudih, Khas, Khushanda, Ena, Kujama, Ginagarha, Bahra South, Gopalichak, Muridih, Dhaibari and Bahra North.

Source said the company would lose production of 40,000 tonnes each day if the order was implemented. BCCL had made a turnover of Rs 5,000 crore in 2009-10 and posted a profit of Rs 800 crore, which was the highest ever since its inception in 1972.
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Old August 27th, 2011, 09:42 AM   #108
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Originally Posted by Suncity View Post
Coal India Looks to Boost Underground Mining Operations

http://online.wsj.com/article/SB1000...433251674.html
from WB thread
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Old August 27th, 2011, 02:24 PM   #109
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GVK Power & Infra will pay about Rs 10,091 crore ($2.2 billion) for two Australian coal mines owned by Hancock Prospecting, a financial daily reported today.

As part of the deal, the company will pay about Rs 4,100 crore ($900 million) to develop transport infrastructure to carry the coal to the port, the report said citing lenders and company officials.
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Old October 16th, 2011, 07:36 PM   #110
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Against the backdrop of the government mulling over the allocation of more coal to state-run NTPC, private power producers like Reliance and the Tatas have asked the Coal Ministry to allocate the dry fuel on the basis of project merits, rather than ownership.

In a letter to the Coal Ministry, the Association of Power Producers (APP) has also stressed on the need for a level-playing field in the allocation of coal.

Coal should be allocated based on the merits of projects and not on the basis of ownership, APP Director General Ashok Khurana in a letter to Coal Secretary Alok Perti.

APP is a grouping of many power generators, including Reliance, the Tatas, Essar, Adani Group and GMR Energy.

Khurana also said that coal is a scarce natural resource and it must be distributed on the basis of its efficient use and in a manner to maximise the benefit to end-consumers of power.

In the wake of power supply disruptions in different parts of the country, the Coal Ministry recently said that it would make efforts to provide more coal to the country's largest power producer, NTPC.

Coal shortages due to factors like the Telangana agitation and Orissa floods have hurt power generation at many NTPC plants, which are operating at sub-optimal levels.

Last Wednesday, Coal Minister Sriprakash Jaiswal said his ministry will make efforts to provide more coal to NTPC.

"We will try to make available more coal to NTPC through e-auction," he had said. However, further details on the proposal were not available.

E-auction is a process under which coal is sold at market prices through an online bidding process.

According to Khurana, importing coal is not a solution to the country's fuel supply problems.

"Supply of low and varied quantities of indigenous coal may have serious functional ramifications for power plants.

"...The boilers here can accept only a blend of not more than 15-20% of the imported with domestic coal," he wrote in the letter.

This technical constraint makes it difficult for the existing thermal plants to provide an undertaking for accepting unspecified quantities of imported coal, he noted.

Fuel Supply Agreements (FSAs) are granted for a period of five years, whereas the commitment for supply of energy under Power Purchase Agreements (PPAs) is between 25-30 years, he added.

Khurana pointed out that for a developer to meet its obligations to procurers, there cannot be any disconnect between the PPA and FSA.

The lenders would also be extremely reluctant to finance a project which has no sustained and assured supply of fuel, he said in the letter.
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Old October 16th, 2011, 07:39 PM   #111
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State-run Coal India today blamed adverse weather for its inability to meet production targets in the first half of the 2011-12 financial year, with output falling short of the mark by about 20 million tonnes.

The company could produce only about 176 MT of coal in the April-September, 2011, period, as against the target of 196 MT, due to heavy rains in mining areas.

"Because of heavy rainfall in the month of August and September, the company could not achieve its production target," Coal India Ltd (CIL) Chairman N C Jha told PTI.

However, he exuded confidence that the company will meet its 452 MT production target for the entire financial year despite adverse factors like delays in the grant of environmental clearance to its projects.

Earlier, CIL had blamed early rains and inclement weather in the eastern region for its inability to achieve the 98.7 million tonnes (MT) target for the first quarter of the current fiscal as well.

The public sector firm had missed its April-June target by 2.4 MT.

The Planning Commission has asked the Coal Ministry to chalk out an action plan to ensure that CIL meets its production target for the current financial year.

"Negative growth (in output) of Coal India is a matter of grave concern... It is requested a quick review may be undertaken at the ministry level and a plan of action worked out to realise the overall production target in the remaining period of the year," the Planning Commission had said in a letter to the Coal Ministry.

CIL accounts for 80 per cent of domestic coal production in the country. It had registered a decline of about 2.6 per cent in production to 152.4 MT in April-August, 2011, vis-a-vis the corresponding period of the previous fiscal. It produced 156.6 MT of coal in the first five months last fiscal.

The letter further said, "We are aware of the difficulties in enhancing the production level due to environmental concerns, but with relaxation of CEPI norms imposed earlier, CIL should be able to increase its production level."

The Comprehensive Environmental Pollution Index (CEPI) captures various health dimensions of the environment and acts as a warning tool to facilitate early intervention by the government. In 2009, the Environment Ministry had introduced CEPI to ascertain environmental quality at specific locations and conducted a nation-wide assessment of industrial clusters.

CIL missed its production target last fiscal, recording an output of 431 MT, as against the revised target of 440 MT.
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Old October 16th, 2011, 07:43 PM   #112
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The operations of Bhubaneswari open cast mine under the command area of Mahanadi Coalfields Limited (MCL), a subsidiary of Coal India Ltd (CIL), has been outsourced to Essel Mining, an Aditya Birla group firm.

It is for this first time in the history of CIL that operations of a coal mine has been fully outsourced to a private firm even though the ownership remains with MCL. The Bhubaneswari open cast mine has a capacity of 20 million tonnes per annum.

According to a government decision, three coal mines in MCL have been offered for outsourcing- Bhubaneswari and Kaniha, both in Talcher coalfields and Kulda mines under Basundhara coalfield in Sundergarh district.
While full outsourcing activities have begun in Bhubaneswari, other two mines are still to adopt the same though contracts have been awarded, according to an MCL official.

Essel Mining, which has been awarded the contract for 15 years for the Bhubaneswari mines, performed the ground breaking ceremony at a site near Jilinda village in the presence of MCL chairman and managing director (CMD) A N Sahay.

However, the ground breaking ceremony was disrupted by affected villagers who held demonstrations at the site. Later, they were pacified after the MCL CMD assured to look into their demands relating to rehabilitation.

All works related to the Bhubaneswari mines including production, removal of over burden and street lighting will be done by Essel Mining. The private company has been given a target to produce eight million tonnes in the first year.
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Old October 16th, 2011, 07:47 PM   #113
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State-run Coal India today said it might invest up to Rs 40,000 crore in the 12th Plan period ending 2017 towards development of mines for augmenting production. “We will spend between Rs 35,000 and Rs 40,000 crore in the 12th Plan period for development of new projects, buying machinery and building washeries, among others,” CIL Chairman N C Jha said.

Jha said against the investment target of Rs 35,000 crore during the 11th Plan period, CIL might end the five-year period with an actual investment of less than Rs 25,000 crore.

“There were lot of bottlenecks because of which we could not move ahead with our entire investment proposals in the 11th Plan period,” he said, adding during the 12th Plan, the production target is more which warrants more investment.

He said CIL had set a production target of 556 million tonne by 2016-17 against the country’s projected demand of 965 million tonnes in the terminal year of the 12th Plan period.

Overall, country’s coal production, including by captive miners, is likely to be 700 million tonne by 2016-17. So, we will have to import the remaining to meet demand,” he said.

The CIL chief said overseas coal assets acquisition programme of the company was not moving ahead as was expected and hence, the focus of the company in the next Plan period would be on developing mines within the country.

CIL had earlier announced that it planned to put up 20 new washeries with a combined capacity of 111.1 MT. It has 17 such washeries now.

Meanwhile, Jha said the 452 million tonne production target of the company for current fiscal would be met despite lower production till September, compared to the same period last year, because of excessive rains. “I hope things will be better after October and there will be no shortfall,” he said.
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Old October 16th, 2011, 07:51 PM   #114
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With falling coal production, state-run miner Coal India (CIL) is planning to approach the government for relaxation in norms so that fuel supply pacts with consumers, barring power and fertilisers firms, are not mandatory on its part.

The PSU is unable to ensure a steady supply of coal to sectors such as power, steel, cement, aluminium among others under Fuel Supply Agreement (FSA).

"The company is thinking to enter into FSAs with only power and fertiliser sectors. We have a proposal that other sectors should be alloted coal through e-auction route," a source in the company said.

Currently, CIL allots 10% of its total coal production to smaller consumers through e-auction route.

"If sectors, including steel, cement and sponge iron, are brought under e-auction route, then instead of present 10%, CIL will have to sell 28% of its production through the e-auction route," the source added.

The FSA is a long-term pact between coal producers and consumers aimed at ensuring assured supply of fuel.

The relaxation in present norms could be given only after amendment in the New Coal Distribution Policy (NCDP), the source said.

"After the proposal gets a go-ahead from the company board, it would go to the committee formed for revisiting NDCP," the source added.

NCDP mandates CIL to meet the entire demand under the FSA even by import of coal if feasible while the company is of the view that it needs to be changed as CIL is not in a position to meet the entire demand.

CIL as on April 30, 2011, had 1,599 fuel supply agreements with various firms for 391 million tonnes (MT)of coal supply.

As far as power companies are concerned, 118 FSA pacts were executed for 298 MT of coal.

Around 78% of the total coal offtake from Coal India goes to power sector, while less than one% goes to the fertiliser industry, according to company officials.

Earlier in June, the Planning Commission had asked the PSU to sign pacts with power companies to ensure sufficient supply of dry fuel even if the coal miner has to import it as the companies facing coal shortages found their projects were becoming "unfinanciable".

The country faced shortage of about 70 million tonnes of coal last fiscal, which is likely to touch 137 million tonne in the current financial year.

CIL, which accounts for over 80% of the domestic demand, had earlier said that even after imports, it would be "practically impossible" for it to meet the total demand of the country.

The coal giant has been unable to achieve its planned production targets. It has attributed shortage in production to various constraints like delay in obtaining environmental and forestry clearances, land acquisition and local law and order problems.

It missed its production target last fiscal, and produced 431.325 million tonnes of coal even after the target was revised to 440.20 million tonne.
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Old October 16th, 2011, 07:54 PM   #115
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Maharatna PSU Coal India today said it expects to start 5 million tonnes per annum (MTPA) production from two blocks in Mozambique by 2015 and would look at acquiring more mines in the African nation.

CIL had won the two blocks in August 2009 through a global tender floated by the government of Mozambique.

"We are mulling to start production in two Mozambique blocks in 2015. The company is targeting to produce five MTPA from both the mines there," Coal India (CIL) Chairman N C Jha told reporters here today on the sidelines of a conference on Coal.

"Both the mines in Mozambique have an estimated reserves of 1 billion tonnes," he said, adding the PSU was eyeing on more such blocks there.

The coal major has already handed over the programme for drilling to the Mozambique government in January.

Earlier Coal Minister Sriprakash Jaiswal had said India was seeking infrastructural support from the Mozambique government to make the two blocks operational and the African nation, in turn, had assured India of full cooperation.

CIL, which accounts for over 85 per cent of the domestic production, is scouting for coal properties abroad to bridge the widening demand-supply gap, which is projected at 114 MT this fiscal.

A Parliamentary Panel last month had also asked the Coal Ministry to ensure fast-tracking of the acquisition process by CIL in order to ensure that Rs 6,000 crore earmarked by it for overseas acquisitions does not remain unutilised.

It had also asked the Ministry to expedite the tendering process for acquiring coal blocks in Australia, Indonesia, South Africa and USA.
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Old October 16th, 2011, 07:58 PM   #116
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Coal India (CIL) today said it expects to review the price of regulated coal meant for core industries in the next three months.

"Within the next three months we will be able to get indications of the wage hike impact on us and then we will look into price of regulated coal price," CIL chairman NC Jha said here today at the AGM of Indian Coal Merchants' Association.

Regulated coal for the core sector accounts for almost 77% of total coal offtake for CIL. The world's largest miner will take up coal price for all grades except A and B.

In February, the price of grade A and B coal was hiked by 150% and some other grades for non-regulated consumers.

Jha said coal price for the regulated sector was not touched for the last two years.

Reacting to the Cabinet approval for 26% profit sharing for mining, Jha said, "If it is a government decision then we will have to implement it."
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Old October 16th, 2011, 08:08 PM   #117
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Other miners to share royalty, as cabinet clears draft mining Bill; industry frets.

In a landmark decision that will impact the entire mining and mineral-based industry in the country, the government on Friday announced an overhaul of the law governing the sector.

The new framework will introduce a benefit-sharing regime while laying down the policy contours for leases given out by state governments. The changes are aimed at dealing with popular resistance to mining projects on the grounds of corruption and adverse social and environmental impact. The industry fears it will make mining unattractive in the country.
The government plans to repeal the existing Mines and Minerals (Development and Regulation) Act, 1957 and instead place a new Bill in Parliament in the Winter session. To tackle illegal mining, the Bill proposes punitive action, as well as creation of special courts at the state level for speedier disposal of cases.(Click here for table)

It will also make it compulsory for all non-coal mining companies to share an amount equal to their royalty payment to state governments for the benefit of project-affected people. In the case of coal companies, the amount will be equal to 26 per cent of their profit. This will directly impact purely mining companies like Coal India, Sesa Goa and NMDC, as well as companies like Tata Steel, SAIL, NTPC and RPower that have captive mines associated with their projects. Besides, it will increase the cost of companies into the businesses of cement, aluminium and other mineral-based produce.

The industry had opposed the benefit-sharing proposal, saying it would squeeze their margins. In the case of coal, the effective rate of taxation will rise to 61 per cent from 43 per cent at present. On iron ore, it will increase to 55 per cent from 43 per cent. “Indian mining is already one of the highly taxed sectors in the world and this new Act will increase tax incidence,” said Rajiv Kumar, Ficci secretary general. It is estimated Rs 15,000 crore will come from the benefit-sharing levy annually into the District Mineral Development Fund.

Citing the example of South Africa, Kumar said since the implementation of the Black Empowerment Act (BEE) of South Africa that required companies to have ownership by ‘Historically Disadvantaged South Africans’ at a level of 15 per cent and increasing it to 26 per cent by 2014, the mining industry had witnessed a decline. “The real capital expenditure in South Africa’s mining industry has shrunk over the years. Hence, the current proposals in the draft MMDR Act need to be relooked, to avoid similar negative impacts on Indian mining industry.”

Industry also sees the proposal would create problems for existing mines where affected persons are not easily identifiable. Besides, the increased revenues collected with District Mineral Development Fund will be frittered away as the absorptive capacity does not exist.

Though mining activities are controlled by the states, the Centre’s overarching legislation, MMDR Act set the rules of the game.

As per the Bill, a Mineral Development Fund will be created in every district, in which profit and royalty shared by miners will be deposited and spent on the local population and area development, according to mines secretary S Vijay Kumar.

Apart from compensating the project-affected people through profit-sharing and royalty, the new Bill also obligates mining companies to pay a Central cess equivalent to 2.5 per cent of excise or customs duty. The activities of an independent National Mining Tribunal and National Mining Regulatory Authority at the Central level, and the expenditure involved in the capacity building of the Indian Bureau of Mines would be met from the cess levy. Besides, there will be a state cess of 10 per cent of total royalty.

The mines secretary added the Bill also had punitive provisions to prevent illegal mining. An official statement said the new Bill would introduce a better legislative environment for attracting investment and technology into the mining sector.

Prospecting licences for notified areas of known mineralisation will be given out after calling for applications. Thereafter, financial bids will be called from companies selected on the basis of technical knowledge, value addition, end use, proposed ore linkage etc. There is still no clarity on what would be the basis of bidding since it has been left to the state governments to work out the details.
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Old October 16th, 2011, 08:10 PM   #118
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Coal India (CIL), the government’s near-monopoly producer, is planning to again try to interest major firms, here and abroad, into reviving some of its abandoned mines. Its first attempt, in 2008, finally had no takers.

The idea was to develop 18 abandoned underground mines, with estimated reserves of 1,600 million tonnes of coking and thermal coal, under joint ventures with international players. “After a pre-notice inviting tender (NIT) meeting with the shortlisted parties, the government had approved the model NIT document. However, in the first round of limited tendering, none of the shortlisted parties responded. We are looking to go for a second round of tendering in another two months,” said N C Jha, chairman and managing director, on the sidelines of the firm’s 37th annual general meeting here on Tuesday.

This was the first AGM of the company after its initial public offer got it listed on the Bombay Stock Exchange. The firm had invited expressions of interest from global mining giants in 2008 for abandoned mines owned by three subsidiaries — Eastern Coalfields, Bharat Coking Coal and Central Coalfields.
According to reports, the shortlisted firms during the first round included ArcelorMittal, Rio Tinto, Reliance Natural Resources, JSW Steel and Essar Steel. The mines had been abandoned for reasons related to a lack of safety measure and the technology to develop those.
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Old October 16th, 2011, 08:13 PM   #119
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The Coal Minister Mr Sriprakash Jaiswal met visiting Minister of Industry and Trade of the Czech Republic Mr. Martin Kocourek here on Tuesday.

The issues discussed include the scope for technical cooperation in the development of coal mining in India, particularly underground mines, Government officials said.

The delegation from the Czech Republic was informed about the possibilities for establishing manufacturing facilities in India for underground mining machinery.

The other areas of interests for technical cooperation with the Czech Republic include deep coal mining, lignite mining, clean coal technologies including coal mine methane extraction, underground coal gasification.
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Old October 16th, 2011, 08:24 PM   #120
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GVK Power & Infrastructure today said it was looking at Australian as well as international banks for raising funds to make investment of about $6-7 billion in coal assets that it was acquiring from Hancock.

"We will tap Australian banks for funds and we will tap international banks. Indian banks, I really don't know if they would like to take non-recourse finance risks in a country which is other than India.

"I think possibly, they will shy away a little bit, but European and Australian banks [for project finance] these are the targets are far as debt is concerned," GVK Power's Chief Financial Officer Issac George said.
Last week, GVK Power, part of diversified GVK group, said that it would acquire coal assets and related logistics in Australia from Hancock for $1.26 billion.

"Typically what happens is that the $6-7 billion what I talked about will be funded in a debt-equity ratio of 30:70. So, $1.8 billion will be in equity and $4.2 billion will be debt," he noted.

George said GVK had already tied up finances to fund acquisition of Hancock assets.

"Indian banks have funded it. I cannot name them. They were very particular that their names should not come out. So there are four big Indian banks that had actually funded this," he added.

According to him, a Indonesian coal company is in talks with GVK Power for partnership to jointly develop the mines in Australia.

"But we have not taken a call because we have too many options with us at this moment. So we will evaluate this.

"I just want this transaction [Hancock deal] to be closed. After that we will have ample time of 18 months for financial closure," George noted.

Hancock coal assets have resources to the tune of 7.9 billion tonne and would help in providing GVK group with fuel supplies for its proposed power projects in India.

GVK would acquire 79% stake in Alpha Coal as well as Alpha West Coal projects located in Queensland, Australia, while the 21% would be retained by Hancock Propsecting Pty Ltd.

Further, it would buy out Kevin's Corner Coal project and proposed rail and port projects, related to these coal assets.
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