Rule change gives miners route to bypass auction
The government changed rules protecting tribal rights, forests and environment to ensure that more than 130 mines do not face fresh auctions and are retained by the miners concerned.
The changes were made to several regulations in a coordinated manner by the environment ministry, the tribal affairs ministry and the mines ministry over a year, documents show. The government had passed an amendment to the Mines and Mineral Development and Regulation Act, 2015, to facilitate auctioning of mines, generating revenue for the states concerned. Earlier, mines were only allocated, denying higher revenue to the state coffers. But the government created an exception even in the amended law.
According to Section 10(2) of the amended law, anybody with a licence to prospect or to carry out reconnaissance and had started operations would get a mining licence. But the miner had to get all permissions for mining within two years of the amended MMDR Act — by January 12, 2017.
The mines ministry calculated in October 2016 that about 317 mines across 12 states could potentially be out of the auction list under this provision. Of these, the ministry observed, 97 mine owners had not taken any action to process their licences, and faced cancellation, and 138 required environment, forests and tribal clearances. These 138 mines, thus, escaped being auctioned.
A formal mining lease is predicated on securing the statutory forest and environmental clearances. Besides meeting other criteria, the forest clearance itself is predicated on the affected tribal village councils giving consent to their traditional forests being cut down for mining and the claims of the forest-dwellers being settled under the Forest Rights Act. The miners with prospecting and reconnaissance licence had to, therefore, ensure they had forest clearance, the tribal community's consent and the environmental clearance in the two years before the deadline of January 12.
But records showed that on April 1, 2015, the environment ministry changed rules to facilitate mines being protected against the threat of auction. It passed an order to "assign" forests to these miners on lease as a general rule without full-fledged forest clearance. The ministry clarified that mining can begin only when the miners secured full-fledged forest clearance. For fresh mining, it noted that now leases could be signed based on mere assigning of forestland, instead of a detailed clearance. But the environment ministry asked that the miners pay up the levy for the forest area - previously collected only when it was decided the forests would be cut down for mining. It was not clarified how the government would return the levy if mining was not permitted after assigning the land to the miners.
This helped the miners circumvent the deadline of securing full forest clearance before the January deadline. This short-cut version continued to be predicated on the miners securing the consent of tribals under the Forest Rights Act. This was reiterated in November 2016 by the environment ministry, when it said all provisions of the Forest Rights Act had to be followed even for the assignment of forestland. This meant taking consent and settling all rights before the mining lease was signed.
However, by January 2017, this provision was diluted.
In a dated January 5, 2017, the tribal affairs ministry noted the consent of tribals was not required while assigning land but only before mining begins, based on stage-2 forest clearance. It stated that under no circumstances would the rights of tribals and other forest-dwellers be infringed upon until the FRA provisions are addressed later. It said if rights over part of the forest land were assigned to tribals later under the FRA, that part would be excluded from the lease area.
In a parallel move, the mines ministry also did away with the need for environmental clearance before signing leases for these mines. On January 4, the mines ministry said it had consulted the law and the environment ministries and decided that the mandatory environmental clearance was not required for these mines before signing the lease agreement. The clearance can be sought at a later stage by the miners, before actual mining begins.
On January 5, listing down all the changes it had helped make to save these 300-odd mines from auction, the mines ministry wrote that "such pending cases, where mining plan was sanctioned but cases were pending because of environment clearance, forest clearance and tribal rights, the states have been facilitated by the central government to be able to grant the lease expeditiously".
4 die in West Bengal mine collapse
Rescue operations are yet to commence though almost 50 persons are reported missing.
At least four persons have died and several others are missing after an illegal coal mine collapsed in the Mejhia block of Bankura district on Thursday night.
According to local people nearly three acres of the illegal coal mine in Kalikapur village, adjacent to Jharkhand, had collapsed.
Rescue work is yet to start, villagers at the desolate mining site told The Hindu as the mine is an illegal one. Both the authorites and the mafia have denied the incident.
Even as district police officials claimed that "no such incident occurred", villagers said that on Thursday, "nearly 60 workers" were inside the mine when it collapsed.
"Four bodies were recovered from the spot, but that does not indicate the extent of tragedy. We think nearly 50 people were trapped and have died in the incident," a resident of Kalikapur alleged.
Local TMC MLA Swapan Bouri, however, confirmed that he has been "informed" about the incident and the death of the workers.
There was an eerie calm at Kalikapur with villagers hesitant to talk to outsiders. On Sunday afternoon when The Hindu visited the place most of the locals refused speak about the accident and those who spoke refused to share their names fearing repercussion from the coal mafia. They also said it was not possible to visit the mine as the mafia were not allowing journalists or villagers near the Bashulithan mine.
He also said that the coal mafias pay "an occasional amount" to the villagers "to keep mum" about the mining, which is mostly illegal.
"Despite being well aware that the mine has collapsed, villagers did not try to rescue the workers trapped inside the mine. The bodies were recovered by the family members of some of the workers from Birbhum," a local resident said. They also said that the villagers get paid by the coal mafia to stay away from the illegal mines.
"If anyone refuses to do the coal mafia's bidding they are threatened with murder," said a resident of the neighbouring village of Ardhogram, a kilometre away from Kalikapur.
According to local rights activists, there are nearly "50 illegal coal mines" in Kalikapur and adjoining areas. "These mines are run by the mafia-police-Trinamool Congress (TMC) nexus. A similar incident took place about a year back where three to four people died. But no action was taken," an activist told The Hindu. However, he spoke under conditions of anonymity fearing repercussions from the ruling party.
Contradictory statements were made about the incident by the local TMC leadership and district police. While TMC MLA from the local Saltora Assembly seat Swapan Bouri said he was aware of the incident, Superintendent of Police of Bankura Sukhendu Hira said that they "found nothing at the spot."
China's war on coal continues — the country just canceled 104 new coal plants
Because China is such a behemoth, its energy decisions absolutely dwarf anything any other country is doing right now. Case in point: Over the weekend, the Chinese government ordered 13 provinces to cancel 104 coal-fired projects in development, amounting to a whopping 120 gigawatts of capacity in all.
To put that in perspective, the United States has about 305 gigawatts of coal capacity total. The projects that China just halted are equal in size to one-third of the US coal fleet. It's potentially a very, very big deal for efforts to fight climate change.
This also shouldn't come as a huge surprise. In recent years, China, the world's largest emitter of carbon dioxide, has been making major efforts to restrain its coal use and shift to cleaner sources of energy. When Donald Trump and other conservatives in the United States complain that China isn't doing anything about climate change, they simply haven't been paying attention.
China's coal use is falling — and this may be a permanent shift
Back in 2013, China was using as much coal as the rest of the world combined, and it looked like coal use would keep growing astronomically forever. Local officials were planning hundreds of new coal plants as demand looked like it would keep soaring for decades.
Except then an odd thing happened. Since 2013, China's coal consumption has actually fallen — due in part to a major economic slowdown but also in part to sluggish output in heavy industries like steel and cement that have traditionally accounted for half the country's coal use. (The usual caveats about China's murky energy statistics apply.)
Increasingly, many analysts suspect that this slowdown in coal consumption is a lasting shift — particularly as China transitions away from heavy industry and investment-driven growth and into a modern service-oriented economy that's far less carbon-intensive. Going forward, China's economy is expected to be focused more on retail shops and hospitals, less on steel and cement plants. Energy demand will slow.
On top of that, as China's leaders start to take global warming seriously, the country has been making massive investments in clean energy. As part of the Paris climate deal, China has pledged to get 20 percent of its energy from low-carbon sources by 2030. The government is planning to install an addition 130 gigawatts of wind and solar by 2020 — equivalent to all the renewable power in France today. (China's also make big bets on nuclear power.) Some analysts suspect this growth in clean energy could be sufficient to satisfy much of the future growth in household electricity demand.
When you add those two trends together, many forecasters think China's coal growth will either flatline or fall in the years ahead. One recent paper in Nature Geoscience predicted that China's coal consumption may have already peaked in 2013. And if that's true, then many of the hundreds of coal projects that China has on the drawing board will be flatly unnecessary.
China is now putting a hard limit on coal capacity — but there's a catch
So that brings us to the recent cancellations. China currently has around 920 gigawatts of installed coal capacity — and many of those plants are already running at lower-than-expected capacity because of weak demand. But there are also hundreds of new coal plants in various phases of planning around the country that would bring total coal capacity nationwide up to 1,250 gigawatts.
That seems excessive, given recent trends. So in China's latest five-year plan, Chinese officials put a hard cap on future coal capacity at 1,100 gigawatts. Then last week, they ordered provinces to cancel 104 coal projects in the works. About half of those projects were already under construction.
That said, there are a whole bunch of asterisks here. Even under the new cap, Chinese coal capacity still has some room to expand going forward — which is why environmental groups like Greenpeace are calling on the government to go even further and cancel the rest of the dozens of new coal projects still in various stages of planning.
Second, while any slowdown in Chinese coal demand is good news for climate change, it's not great news for climate change. If the world wants to avoid drastic global warming — typically defined as 2°C or more — then it's not enough for China's CO2 emissions to simply plateau. They have to fall, very dramatically. Doing that will require more than simply canceling any future coal plants. It will mean either retiring existing coal plants and replacing them with cleaner sources (as the United States is currently doing) or retrofitting the plants with carbon capture technology and burying their emissions underground.
Finally, there's an important political angle here. China's struggle to curtail coal use is putting thousands and thousands of miners out of work, and if it moves too fast, it risks unrest in key coal-producing regions (something US politicians are familiar with). Last year, Prime Minister Li Keqiang announced the central government would need to set aside $15.3 billion for areas ravaged by unemployment. He also promised that future job growth in other sectors would help absorb losses in the declining coal and steel sectors. But no one knows if China can pull off this tightrope act.
Which is all to say that this week's big coal plant cancellation is just one (important) chapter in a story that's going to unfold over many decades, with plenty of twists and reversals still to come.
Further reading:
Here's a longer piece laying out the Chinese government's war on coal in much more detail.
Note that China's slumping coal demand isn't just a China story. It's also walloping US coal companies that bet heavily on exporting metallurgical coal, used by steel mills, to China. This is the key reason for all the US coal bankruptcies of late.
http://www.vox.com/energy-and-environment/2017/1/17/14294906/china-cancels-coal-plants
Chinese Coal Mine Caves in, Killing 9 Workers
The partial collapse of a coal mine in northern China has left nine people dead, state media reported Wednesday, reflecting the stubborn persistence of safety problems despite years-long efforts to reduce deaths in the sprawling sector.
The people killed were doing maintenance work inside the mine shaft when it collapsed Tuesday morning, the state-run Xinhua News Agency said. Rescuers were able to save one person, who is now in stable condition at a hospital.
The cause of the accident on the outskirts of Shuozhou city in coal-rich Shanxi province was under investigation. Local government officials did not immediately return phone calls from The Associated Press.
China is the world's largest producer and consumer of coal. Its mining industry has long been one of the world's deadliest, even as the government has strived to improve safety inside the mines and phase out older operations with outdated safety standards. A heavy reliance on coal is also blamed for the serious air pollution and smog that routinely smother northern cities in winter.
China's work safety administration reported 931 coal mine accident deaths in 2014, the last year for which figures were available, although official statistics are often questioned for their accuracy. The head of the agency has acknowledged that some mines cut corners on safety standards under financial pressure, while operators sometimes cover-up deadly accidents to avoid prosecution.
Government regulators have said they will shutter as many as 1,000 outdated and underperforming mines in coming years, even as China also tries to keep energy prices in check and prevent economic devastation in regions dominated by mining.
http://abcnews.go.com/International/wireStory/chinese-coal-mine-caves-killing-workers-44842324
Jharkhand's default raises questions over UDAY impact
When it was launched in November 2015, the Ujwal Discom Assurance Yojana (UDAY) was touted as a scheme that would nurse State-owned power distribution companies back to health. Now, however, doubts are rising about whether States are using the scheme as another window to pile up fresh debt.
Jharkhand, the first state to sign up for the UDAY scheme, is a case in point. On December 6, 2015, Union Power Minister Piyush Goyal thanked the BJP-ruled State for taking the lead, tweeting: "24x7 power is not far."
The State raised a loan and cleared historic dues of ₹5,553 crore, accumulated between 2001 and September 2015 — paying ₹4,770 crore to statutory generation utility Damodar Valley Corporation (DVC) and ₹783 crore to Coal India.
A year later, however, Jharkhand has piled up ₹1,300 crore in fresh dues to DVC and ₹32 crore to Coal India. It has simply stopped paying dues to DVC for the purchase of roughly 700 MW a day. Repeated efforts to seek clarifications from Jharkhand Chief Secretary Raj Bala Verma and Additional Chief Secretary – Energy RK Srivastava were unsuccessful.
Same old story
UDAY is the third debt-restructuring programme introduced to help discoms. The first was in 2001 and another one followed in 2012.
While launching UDAY, the Centre had said that discoms were trapped in a vicious cycle, with operational losses being funded by debt. "Outstanding debt of Discoms has increased from about ₹2.4 lakh crore in 2011-12 to about ₹4.3 lakh crore in 2014-15, with interest rates up to 14-15 per cent," it had said in a November 2015 release.
The Central government had claimed that UDAY would be a "permanent resolution of past as well as potential future issues of the sector." So far, 90 per cent of the States have joined the scheme, the last being Tamil Nadu, a State that had an aggregate debt of ₹75,000 crore.
Under UDAY, State governments and their discoms entered into a tripartite agreement with the Union Power Ministry to turn around discoms.
The States would commit to reduce aggregate technical and commercial losses. Discoms would be allowed to revise tariffs quarterly to offset fuel price increases, if any.
State governments would take over 75 per cent of the total outstanding discom debt as on September 30, 2015 by the end of fiscal year 2017 and issue bonds. Discoms would use the funds raised through these bonds to discharge three-fourths of their outstanding debt.
Sector experts confirm that UDAY will improve the affordability of discoms in the short and medium term. However, they are apprehensive if this will bring any long-term solution as States have always found a way to pile up dues.
"Increasing efficiency of discoms is a purely management issue. I don't see any structural reform in UDAY that will make discoms more efficient in the long term," a senior executive at a prominent private utility told BusinessLine.
More demand constraint than production constraint now in Indian coal sector: Partha S Bhattacharyya, Coal India
In a chat with ET Now, Partha S Bhattacharyya, Fomer Chairman, Coal India says that Coal India has achieved about a 6.5% kind of growth so things should look up from now on but primarily it is now more demand constraint than production constraint.
Edited excerpts:
A lot was promised when Coal India went public like coal washery, coal production, better infrastructure but frankly Coal India has not lived up to its promise.
There are so many factors which determine whether a company of the size of Coal Infdia and of the complexity of Coal India can meet its promises or not. First off all the production growth that was promised was based on timely clearances, forest clearances and environment clearance and just about at the same time in 2010 when the IPO came up the Ministry of Environment & Forest came out with the blanket ban on all kinds of industrial expansion in those areas which they call the critically polluted and unfortunately most of the coal projects were in those areas. Although the coal projects were not the cause of that pollution because we clearly demonstrated that the comprehensive environment pollution index for coal mines was much lower than the critical pollution levels. But still then it took more than two years to argue it out and for Coal India to come out of that problem so there was one factor which really came in the way of continuing with the 6% to 7% kind of production increase. But once those issues have been sorted out you must appreciate that from 2014-2015 onwards Coal India has turned back. 2014-2015 they gave a growth of 7%, 2015-2016 was an unprecedented growth of close to 9% which Coal India has given.
Certainly, the ministry of coal and other state governments have acted in some sort of a coordination and as a result environment forest clearances and land acquisition things have become a little easier to that extent. Coal India has definitely done its bit. 2015-2016 was a stellar year. Now this year unfortunately there is a demand problem Coal India would have continued with the same kind of momentum in production growth but the demand was suddenly very muted and Coal India found that if it produces the coal will end up in stocks so naturally we had to curtail production based on demand. Now of course very lately, the last one or two months things have started looking up and the production growth has resumed. Last month I am told that they achieved about a 6.5% kind of growth so things should look up from now on but primarily it is now more demand constraint than production constraint.
This was domestic situation what about competition Indian coal industry faces from Chinese imports?
Lets look at the market for coal in India. The market for coal is mostly utility, power utilities and that consumes about 75% to 77% of the total coal. Most of the power stations are actually used to Indian coal, their boilers have been designed for using high ash Indian coal so from that perspective the market is defined and though that cluster of power stations which is quite huge the total capacity is anywhere more than 150,000 MW they are going to remain with Indian coal as long as Indian coal is available. Now they have been moving to imports only when the domestic coal availability has been under pressure so if you look at let us say after 2006-2007, 2005-2006 there were hardly too much of import of thermal coal. The imports used to be only in the metallurgical coal segment.
From 2010-2011 the kind of problems that was created from the environmental regulations side that added to the problem and that is how India has gone into this 200 million tonne kind of imports. But with the passage of time things will definitely start moving in the right direction, imports have already started coming down and if the coal demand side is properly handled and that should be handled it is basically because of the Indian power generators operating at a very low PLF unprecedented low PLF. We were used to 79-80% kind of PLF gone down to 60% so if it moves by from 60% to 80% that is 300 billion units of extra power and that 300 billion units of extra power means 200 million tonnes of extra coal demand. So once that happens the momentum of growth of coal production will continue as 89% for next three-four years.
Why Coal India has hiked prices?
There is a general price revision for coal of all grades and there are specific revisions for certain grades of coal. Those are mostly in the nature of corrections. These corrections were required for various reasons and the corrections have been done. Now whether it is high or low that is another question but definitely, for example BCCL coal price increase, as long as it is a correction it was required to be done. The general price revisions Coal India has been very conservative and very pragmatic.
State govts asked to utilise DMF for big projects
The union ministry of mines has asked state governments to come out with big projects to utilise district mineral foundation (DMF) funds to help the affected and for rebuilding infrastructure in mining affected areas.
"There is a good amount of fund under DMF and we have asked state governments to come out with big projects for infrastructure development in the affected mining districts," secretary to the ministry of mines Balvinder Kumar said.
Kumar, who visited Noamundi iron mine of Tata Steel in Jharkhand's West Singhbhum district for a pilot launch of drone application in mine monitoring, told newsmen yesterday that big hospitals, private and government schools and roads can be constructed with the DMF fund aimed to benefit persons affected by mining activities.
Each mining district is likely to get Rs 200 crore to Rs 400 crore in a year's time for the purpose, he said adding Keonjhar district of Odisha would get more than Rs 600 crore.
A CAG audit will be mandatory and expenditure details of the fund will also be evaluated, he said.
Asked to comment on diversion of funds by some state governments to carry out development projects in other districts, Kumar said rules have been framed and details of expenditure from the fund will be uploaded on web portals and will be in public domain in the next two to three months.
Asked about the action that would be taken against those who have already manipulated and diverted the fund, Kumar said the problem will arise only in the absence of the system.
However, a system has been developed and every detail will be on website, which would help end all such issues, he said adding Indian Bureau of Mines would develop a system in the next couple of months to grant mining plan approval.
People can upload all related documents online to get mining plan approval as well as other clearances in a year's time, he said adding all mining activities including sanction of mining plan, production, dispatch, import and export and collection of VAT will be maintained online.
Asked about the government's action plan for iron-ore mines whose mining lease will expire in 2020, Kumar said the government was working to ensure that they are auctioned in time so that mining activities could start soon after the expiry of lease renewal.
These mining areas will be auctioned by respective state governments so that start mining activities begin immediately after the expiry of mining lease, Kumar said.
Kumar said the government had auctioned mining areas including three each in Odisha and Jharkhand and collected Rs 94,000 crore.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
Warm Regards
Anurag Singal
Sr Manager –Business Development
Essel Mining & Industries Ltd
14th Floor, Industry House
10,Camac Street –Kol-71
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