Cement, Energy and Environment

. REGULATION NEWS GoM APPROVES STRONG CENTRAL MINING REGULATOR The Union government has decided to provide substantive teeth to the National Mining Regulatory Authority to be set up under the new mining legislation. The draft of the Mines and Minerals (Development and Regulation) Bill 2010, finalized by a 10-member GoM after consultations over the past six months, has sought to give wide powers to the National Mining Regulatory Authority, for investigating illegal mining cases to settling disputes of jurisdiction between the Centre and the states. A final meeting of the GoM is likely soon, to formally approve the draft, after which it would be introduced in the winter session of Parliament. The Bill lists as many as 16 powers to be granted to the mm1ng regulator under the legislation. These powers include reviewing royalty rates, suggesting penal action for failure to pay royalty advising the Centre on issues of increasing transparency in grant of mineral concession, supporting investment, recommending the amount of fee levied on miners, and advising on models on competitive bidding of minerals. Courtesy: TERI(The Energy and Resources Institute) Newswire, 16-31 Oct. 2010, P3. GOVT'S LATEST MINE PROFIT SHARING PLAN fACES HEAT The provision in the new mining Bill approved by a group of minister last week for 26 per cent profit sharing by mining companies affected residents of the area they operate in hasn't been welcomed by many in the sector. The new Bill, in general, seeks to expedite the grant of mining rights in a transparent manner, aiming to attract more investments in the sector from industries such as steel. India's top three mining companies - Coal India, NMDC and Sesa Goa- will add Rs. 3,600 crore to the District Development Fund if the 26 per cent profit sharing proposal with local residents goes through . That's almost half the disinvestment proceeds from the REC, NHPC and OIL India follow-on offers in 2009-10. The proposal has already sparked stiff opposition. It's not often that a public sector company speaks out against a government proposal, but St·eel Authority of India Ltd Chairman, C S Verma, was the first to voice scepticism on the profit sharing proposal. Since then, many others have. The proposal has caused a flutter in the metals and mining circuit. The industry's take is simple: It's noble, but impractical. "The proposal is aimed at mitigating problems with land acquisition. But why should a land loser in the mineral-rich area get so much more than agricultural land losers? Mineral-rich areas have scanty population, so a lot of wealth will be distributed among a few. It will completely distort factor pricing," said a public sector mining executive. The average population in mineral-rich Jharkhand is 20-25 people for about 600 hectares. "It will just breed inequity in the system," he added. Moreover, some of the best mines in the country such as Bailadila are under the forest department. NMDC's Bailadila deposits, with one of the highest iron content, produce about 22 million tonnes. "Does it mean we should stop the corporate social responsibility work that we normally do in the Bastar region?" asked an NMDC official. Coal India Chairman Partha S Bhattachryya, however, expressed support for the proposal. "It is an effort to promote distributive justice. In principle, we fully agree with the empowerment of people affected by mining projects," he said. Officials, on condition of anonymity, said implementation of this plan would put pressure on Coal India, which sells the fuel at government-regulated prices , lower than the market norm. "If the proposal is implemented, we may have to increase the price of coal, which will have an impact on the cost of electricity and other user industries. The government should keep this in mind," the officials said. "It is important to recognize that coal mining is closely associated with the energy security of this country." The deployment mechanics is also under suspicion. "We spend around Rs. 100 crore on an annual basis on corporate social responsibility. How will the funds be used? The BEE in South Africa (Black Economic Empowerment programme, on which this plan is supposed to be based) hasn't worked. Few people have got value out of it," says Tata Steel's group chief financial officer, Koushik Chatterjee. Bhattacharyya says corporate social responsibility, which is undertaken by mining companies, can't always be monetized. "Skill development 84