NEWS ANALYSIS
RAJESH DESAI
INFRASTRUCTURE
Essar Power’s 1,200-MW Mahan project idling for want of coal
· Four months after the Group of Ministers (GoM) gave its nod for mining at Essar Power’s Mahan coal block and providing tapering linkage till production starts at the 1,200-MW power plant, the project is yet to get coal supplies. Generally, tapering linkage is provided for three years, where supplies decrease with every following year.
· The Ministry of Environment and Forests (MoeF) is yet to give its go-ahead for mining at Mahan. The power plant in Singrauli, Madhya Pradesh, set up after an investment of Rs 7,200 crore, is idling for want of fuel. The Coal Ministry is not sure if any coal will be available for tapering linkages even if the Power Ministry sends its recommendation.
Voltas employees submit memo to Labour Minister
· In protest against ‘growing contracterisation and non-settlement of bilateral agreements’, employees of Voltas India, a Tata company, sat on a day-long dharna at Jantar Mantar here on Saturday. Trade union leaders from CITU, AITUC, NTUI and HMS visited the workers and offered their solidarity. He said the Mumbai-based Voltas Ltd had 8,000 contract workers, 3,000 management staff and only 600 permanent general staff.
· The management, however, said in a statement that the company had over 9,700 employees, of who over 3,000 worked in India and over 6,500 in overseas operations. A large number of contract workers were being paid a paltry sum and made to do production work in gross violation of the Contract Labour Guidelines.
METALS & MINING
Hindalco faces Vedanta’s mining fate in Odisha |
· Even when the protest against Vedanta over mining in Niyamgiri was at its peak, Hindalco Industries quietly carried on with its work in Mali Parbat, just miles away from the Vedanta project. But not anymore. · With locals protesting against Hindalco’s move to mine Mali Parbat, the contractor who was working on making the mine operational has left. All work at the mine has stopped. However, at the Aditya smelter site, in Lapanga and away from the mine, work is on in full swing and the company hopes to complete the 359-kilo tonne aluminum smelter and a 900Mw power plant in 2013. · The Utkal alumina refinery of 1.5 million tonnes in Kansariguda is expected to be completed by March 2013. However, with the mining of bauxite under a cloud, the fate of the project is hanging by a thread. Vedanta, in the same region, has already faced the ire of locals and NGOs. The Union environment ministry has cancelled its mining licence and the company relies on bauxite from Gujarat and Chhattisgarh. · Owing to the non-availability of captive bauxite, Vedanta has been posting losses quarter after quarter. It has decided to shut the refinery. The locals are upset with Hindalco’s bauxite mining plans in Mali Parbat, saying it will make the water in the area disappear and jeopardise the livelihood of tribal people in the region. Hindalco refused to comment on issues with the locals in Odisha. · While Vedanta stayed in the limelight, Hindalco continued its work, though the local people protested against its mining activities from 1996. While in Vedanta’s case it was the Lado Sikaka spearheading the movement, in Hindalco’s it has been Prakrutik Sampad Surakshya Parishad. |
Permit delays stalled nearly 45% of Coal India’s projects
· Coal India Ltd has set itself the target of augmenting production by 420.85 million tonnes during the 12th Plan (2012-17) by developing 133 projects. But the company will have to overcome environmental and forestry clearance hurdles if it is to achieve its goals.
· The annual report for 2011-12 states that the public sector miner had started on the implementation of 147 projects at the end of the 11th Plan period. Of these, only 80 received both environment and forestry clearances. The PSU was still awaiting environmental clearances for 13 projects and forestry clearances for 34 projects. In addition, both environmental and forestry clearances were pending for 20 projects.
· Delays in the grant of environment and forestry clearances for projects could upset the applecart for CIL. The 147 projects have an ultimate capacity of 437.08 million tonnes per year. Of these, the coal miner expects to achieve a 228.67-million-tonne increase in output during FY2012-13 through the implementation of 100 projects.
· The Annual Report says CIL was able to boost output by 211.39 million tonnes during 2011-12, with contributions from 85 ongoing projects. CIL produced a total of 435.84 million tonnes of coal during 2011-12, slightly higher than the preceding year. The growth in production could have been higher, had it not been for delays in the grant of new mining clearances and problems caused by heavy rain.
· With power plants and other industries already starved for coal, delays in ramping up output could have implications for economic growth. Demand for coal is estimated at 980.5 million tonnes by 2016-17, whereas indigenous availability is projected at 795 million tonnes, at the maximum.
Power Ministry opposes Coal India's new pact; seeks modifications
· The Power Ministry has opposed the new pact that Coal India has proposed to sign with power producers saying that they will not ink the agreement unless it is "modified". In the new pact, CIL, the world's largest coal producer, is committing to meet minimum 80 per cent of the power firms' coal requirements, a part of which would be through imported coal. Failing of the minimum supply commitment, it will have to pay a small penalty.
· Power companies will have to make advance payments for imported fuel and can't reject the coal once the order is placed. State-owned CIL would initially make up 15 per cent of the minimum promised quantity through imported coal. This is to be progressively reduced to 5 per cent by 2016-17. They would also have to pay 2 per cent service charge to Coal India and the imported coal's volume would be considered 1.5 times the volume of domestic coal due to imported coal having less waste or ash content than domestic coal.
· The new fuel supply agreement has excluded the controversial force majeure clauses that exempt CIL from meeting its obligations in case of unforeseen circumstances. CIL will pay penalties of 1.5-40 per cent depending on the extent it fails to supply the committed quantity of coal to power plants.
· Moily said the issue will not derail the government's plan of adding over 88,000 MW of power generation capacity in the five years ending March 31, 2017. "We are sure about the 12th five year plan target... 82,000 MW of projects are already under various stages of construction and coal has been provided to power projects of about 60,000 MW capacity," he said. "Our target for the 12th five year plan will not be affected. The target is 88,000 MW and I am confident as of now that we can do it," he added.
SAIL likely to begin work on Rs 35,000 crore Jharkhand project soon
· Steel Authority of India (SAIL) is likely to begin work soon on its Rs 35,000-crore steel-cum-fertiliser complex at Sindri in Jharkhand. The PSU is in the process of beginning work on its Sindri project comprising a 5.6 million tonne per annum (MT) steel plant, 1.5 MTPA urea plant and 1,000 MW power plant at the erstwhile Fertiliser Corporation of India complex.
· The project envisages investment to the tune of Rs 35,000 crore, of which Rs 26,000 crore would be spent on the steel mill and about Rs 4,500 crore on the urea unit, the official said adding the rest amount would be utilised for setting up the power project. SAIL has already formed a special purpose vehicle - SAIL Sindri Projects Ltd (SSPL) with 89 per cent stake in it while the remaining 11 per cent is held by the FCIL.
· The PSU has in its possession 5,800 acres of land out of which about 4,500 acres is encumbrance free. The project, which is likely to be completed within four years after construction begins, is likely to provide direct and indirect employment to about 20,000 people.
Regards,
Team Microsec Research
Microsec Capital Limited
Tel: 91 33 30512100
Fax: 91 33 30512020
--
CA. Rajesh Desai