Cement Energy and Environment

Mining MINING BILL MAKES PROFIT SHARING MANDATORY The Union Cabinet on 30 1 h September 2011 approved a landmark mining Bill mandating miners to share their profits for the well-being of project-affected people. The Bill also envisages setting up a regulator to monitor the mining sector's growth, while allowing states to invite bids for known mineralised areas. The Mines and Minerals (Development & Regulation) Bill , 2011, approved by the Cabinet under the Chairmanship of Prime Minister Manmohan Singh, will replace a 54-year old law governing the sector. The Bill, which mandates coal companies to share 26 per cent of their net profits towards people residing in their project areas and non-coal miners to shell out money equivalent to royalty, has, however, triggered sharp reactions from industry chambers and miners. The Mines Ministry, which pushed for the legislation, expects it to effectively check maladies in the sector, regulate its growth and attract the much– needed investments. But, industry bodies like the FICCI, Cll and Federation of Indian Mineral Industries (FIMI)---the apex body of miners - expressed apprehensions that the profit– sharing mechanisms might adversely affect investments in the sector. FICCI Secretary General Rajiv Kumar said that the proposed contribution of 26 per cent of profit in case of coal and 1 00 per cent for other minerals will make mining NEWS BRIEF unattractive for organised investors including foreign play– ers. He argued that India's mining sector is already one of the highly taxed ones in the world and the new Act will further increase tax incidence on coal to 61 per cent and iron ore to 55 per cent. Secretary General of FIMI , RK Sharma, too, said that the profit sharing mechanism would imply a revenue outgo of nearly Rs 5,000 crore for merchant miners. He warned that foreign investors are likely to shy away from investing in India as they are likely to find resource-rich Mica more lucrative for investment. Cll National Committee on Mining chairman Rana Sam said that there was a need to examine concerns rai sed by the mining industry over royalty, profit sharing and the mecha– nism on providing assistance to project affected persons before the Bill is finally rolled out. Reacting cautiously to the cabinet decision, Coal India Lim– ited chairman N C Jha said, "It is a government decision, we will have to implement it." CIL sources said that the company would have to pass on the burden to its buyers, implying that power prices could shoot up further high with the fuel' becoming costly. Mines secretary S Vijay Ku– mar said that the Cabinet's ap– proval to the proposed National Mineral Regulatory Authority (NMRA) is a major step in com– bating illegal mining. "It will have powers to investigate and prose– cute offenders. The authority will be empowered to look into cases of illegal mining," Kumar said. As many as 82,000 cases were reported in 2010 and about 25,000 cases in first three months of this year. according to official data. Other major provisions of the Bill include imposition of a Central cess and state cess, setting up of Mineral Funds at national and state level for capacity creation and consu lting local community before notifying an area for grant of mining leases. Courtesy: The Indian Express, October 1, 2011 , New Delhi Energy RISING FUEL COST MAY IMPACT CEMENT PROJECTS Coal is the basic fuel used for manufacturing cement. A hike in coal cost increases the cost of cement production, which in turn increases cement prices. The upturn in cement prices directly impacts prices of basic human need - housing. In recent times, the country has been facing acute shortage of coal, and cement companies' production has been down by 50 per cent. This worsening situation is due to delay in getting environmental and forest clearances, opposition by ecologists, environmentalists and local people, besides political turmoil in coal-sufficient states such as Andhra Pradesh, where in recent times coal production in the Singareni Collieries was affected by the Telagana agitation. To improve the worsening coal supply situation, Coal India (CIL) has decided to offer coal through e– auction. 15