Mining – India 1
1. Utkal Alumina refinery work halted again 1
2. AP government targets INR 2,300 crore from mining sector 2
3. Coal India seeks faster environmental clearances 3
4. NMDC won't shop alone for mine assets abroad 4
5. Bangalore: Mining Barons Continue to Blow Hot 5
6. India imposes 10% safeguard duty on aluminum imports 6
Mining – International 7
7. Mining bill defeated: Greens applaud Coalition support 7
8. Mining 'more important' than farming 8
9. Prospects for a thaw 8
10. The revival of commodity prices has also resuscitated talk of mergers 8
11. Light at the end of the shaft 10
12. Rio tie up unlikely to alter iron ore pricing: BHP 11
13. Tom Albanese - from mining boss to salvage man 12
14. Easing the burden 12
15. Hit-and-miss bonus 13
16. Death toll in S.Africa mine tragedy rises to 76 13
Other News 14
17. India, China 'ready to rule world economy': US expert 14
18. Climate change will affect monsoon, warns Greenpeace 15
19. How green is govt's economic policy? 16
20. Nation celebrates World Environment Day 16
21. TDP wants Andhra Govt to review SEZ policy 17
Mining – India
Utkal Alumina refinery work halted again
BS Reporter / Kolkata/ Berhampur June 05, 2009, 0:00 IST
The civil construction of the Rs 5000-crore alumina refinery project of Utkal Alumina International Limited, a Aditya Birla group company, near Kasipur in Orissa’s Rayagada district has once again come to halt with the affected people locking up of the main gate of the project renewing their demands.
Hundreds of people from at least eight panchayats of three blocks, affected by the project, staged dharana in front of the gate and did not allow the company officials into the project site.
As the state government and the project authorities are not able to fulfill their demands, the protesters wanted to directly interact with the head of the company, Kumar Mangalam Birla.
“We had allowed the company to carry on with the construction on the assurance of the government and the project authorities to fulfill our demands”, said Bhagaban Majhi, the convener of the Prakutika Sampad Surakhya Parisad, an organisation spearheading the agitation. “We will not allow the company officials this time until Kumar Mangalam Biral comes here to directly discuss with us about our demands”, he said.
The project affected people (PAP) have demanded Rs 10 lakh compensation per acre of the land acquired for the project and at least one job to each of the affected families among other things.
The company sources, however, said the PAPs were given an ex-gratia in early 2005 over and above the compensation paid in 1996 according to the state guidelines. While they were paid Rs 30,000 per acre in 1995-96, an additional, Rs 80,000 was paid in 2005-06. “This time the government has directed us to pay Rs one lakh per acre as compensation and we are ready to pay Rs 50,000 per acre” the company official said.
The company has already spent about Rs 750 crore in the project and targets to start production from January 2012 next. “We are trying to convince the PAPs and expedite civil construction work to meet the deadline”, he pointed out.
Utkal Alumina refinery, which was conceived in 1992 to tap the huge deposit of bauxite in the area and produce alumina, is facing opposition from the environmentalists and affected local villagers for last 17 years. The project work was affected for about two months in 2005, 55 days in 2006 and 127 days in 2007 before being halted for about two months last year.
When the construction work was expedited this year, it faced renewed stir of the PAPs in February, this year.
http://www.business-standard.com/india/news/utkal-alumina-refinery-work-halted-again/360112/
AP government targets INR 2,300 crore from mining sector
Friday, 05 Jun 2009
BL reported that the Andhra Pradesh Government has projected revenues of INR 2,300 crore from mining operations in the sate during the year, up from INR 1,755 crore registered in 2008-09.
Mr B Srinivasa Reddy the State Minister for Mines and Geology said of the INR 1,755-crore revenue, major minerals such as coal, limestone, barytes and iron ore contributed INR 921 crore.
Referring to the general economic slowdown impacting the granite industry, Mr Reddy said the State Government had come forward to rescue the granite and stone slab industry by extending 40% waiver of seignorage fee during 2008-09 and 20% waiver during the current year.
During 2008-2009, the mines department granted 1,449 leases for minor minerals and 143 leases for major minerals. The mining leases constitute less than one per cent of the State’s geographical area.
Referring to recent discussions around Obulapuram Mining Company and allegations of favoritism to them by opposition parties, he said that there was no illegality in award of mining leases or in their operations.
He, however, said but for the stay orders issued by Supreme Court, the State would have got revenue of INR 150 crore. The State produces about 90 million tonne of major minerals and 300 million cubic meters of granites and building stones per year.
On the other hand, Andhra Pradesh occupies prominent position in limestone production contributing about 36 million tonne for the cement industry in the country.
Mr Reddy further added that on recent concerns about illegal mining, the mining department has set up 15 vigilance squads to check illegal mining. The department had collected INR 20 crore through penalties.
(Sourced from Business Line)
http://steelguru.com/news/index/2009/06/05/OTcwOTE%3D/AP_government_targets_INR_2%252C300_crore_from_mining_sector.html
Coal India seeks faster environmental clearances
BS Reporter / Mumbai June 05, 2009, 0:05 IST
Coal India Ltd (CIL), the world’s largest coal producer, has recommended the Ministry of Environment and Forest (MoEF) to expedite environmental clearances to both public sector and private sector coal mining companies. The recommendation was made in the light of power sector reforms the government is presently pursuing.
Speaking on the sidelines of the press meet on Thursday in Mumbai, Partha S Bhattacharyya, chairman of CIL, said environmental clearances take 5-7 years from the district and block level to the MoEF. Clearances are signed at least by 37 different cadre officials. At any stage, if an official seeks a clarification, he reaches the junior official that percolates to the block level. This means, a small clarification takes at least 2-3 months from low- to mid-level officials.
Bhattacharyya demanded that the job for environmental clearances should be assigned to industry experts and cleared within a stipulated time.
If India has to achieve coal production growth of 8-9 per cent, the rate at which demand has been increasing, speedy environment clearances are required. Last year, the company recorded 6.4 per cent production growth, first-ever since inception. The output has been growing between 4 - 5.5 per cent on y-o-y basis.
Referring to President Pratibha Patil’s address to the joint session of the Parliament on Thursday, Bhattacharyya said, “We had made some suggestions to the government to increase coal production through efficient underground mining, technological advancement in open pit mining, exploration potential in unviable mines other than increasing efficiency of borewells.”
In her address, the President had said the blueprint for coal sector reforms was ready.
According to the working group estimates India would require 731 million tonnes of coal by 2011-12 of which domestic production from both public and private sector would constitute 680 million tonnes. The remaining 51 million tonnes is proposed to be met through imports. While considering overall linkages, the overall consumption is likely to rise to 750 million tonnes of which Coal India alone would constitute 520 million tonnes and The Singareni Collieries Company Ltd will contribute 40 million tonnes and the rest by private companies.
CIL had recorded a 6.4 per cent growth in its coal output surpassing the benchmark 400 million tonnes in 2008-09.
The company’s coal production grew to 403.73 million tonnes during 2008-09 and it expects a 7 per cent growth in the present fiscal. The coal PSU’s production is projected at 520 million by 2012 about, 210 million tonnes less than the estimated demand of 730 million tonnes by then.
Meanwhile, the company may raise basic selling prices of all types of coal soon to offset the excessive burden it had borne through wage revision of employees of both executive and non-executive staffs.
Without outlining the quantum of prices rise, Partha S Bhattacharyya, chairman of CIL, said on the sidelines of a press meet in Mumbai on Thursday, “There would be a need to raise prices to compensate the additional cost on us to the tune of Rs 7,864.73 crore.” Market sources believe that the prices would increase at least between 10-15 per cent. This bout of wage revision has turned 33 mines unviable.
The company aims to import 4 million tonnes of non-coking coal this fiscal for the first time since its inception mainly to meet the demands of power-generating firms in the country.
http://www.business-standard.com/india/news/coal-india-seeks-faster-environmental-clearances/360127/
NMDC won't shop alone for mine assets abroad
K V Ramana
Friday, June 5, 2009 2:49 IST
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Hyderabad: Mining major NMDC has decided not to pursue any acquisition of coal mines overseas on its own due to unattractive asset prices. Instead, it will make use of the newly set up International Coal Ventures Ltd (ICVL) to acquire interests in mines.
Rana Som, chairman and managing director, NMDC, told DNA Money, "We don't want to go ahead and acquire coal mines abroad on our own as the asset pricing is not attractive in the current market conditions. We are a shareholder in the ICVL and we will use that as an opportunity to acquire interests in mining assets."
NMDC was close to acquiring a coking coal mine in Australia and was to invest about $15-20 million in the mine. However, it aborted the exercise when market conditions changed. "We were discouraged by the sudden rise in prices of coking coal and coal assets abroad. We were pursuing an Australian mine. But the price shot up suddenly," Som said.
NMDC also has a tie-up with Rio Tinto to scout for mining assets and the working group set up for locating these assets is on the job. However, the public sector major is keen on pursuing domestic coal mines on its own and is already in talks with some state governments for them.
Meanwhile, NMDC has decided to focus on iron ore and coal, keeping mining activity in other minerals on hold. "We don't want to get into different things. We are not so keen on other minerals," Som said.
The company has its own diamond, magnetite and limestone mines in India. Its diamond mining operations were facing litigations. "We have received some directions from the Supreme Court and we will abide by them. We hope to reopen the mines shortly. There are definite kimberlite pipes in the Panna region. But, we still can't say that we have the diamond mine," he said.
Som, however, asserted that the focus of NMDC, despite having mines of other minerals, would be on bulk material.
http://www.dnaindia.com/report.asp?newsid=1262057
Bangalore: Mining Barons Continue to Blow Hot
Daijiworld Media Network - Bangalore (SP)
Bangalore, Jun 4: While Eshwarappa in a virtual volte face, distanced himself from the statements the media has been attributing to him, relating to his outbursts against Chief Minister(CM) B S Yeddyurappa, after the central leaders of the BJP held parleys with him. The energy minister seems to have lost the steam all of a sudden and the major controversy the state BJP was expected to face, seems to have been warded off, albeit temporarily.
At the same time, the mining coterie which is claimed to control the fortunes of the BJP and its government in the state, continues to be on the offensive. They are up against the Chief Minister, and it is gathered, the disgruntled BJP leaders will soon meet under their leadership to size the CM up. The group, which shocked the BJP leadership by holding a meeting of supporters in Bellary under the leadership of tourism minister Janardan Reddy, later spoke out its mind through a statement issued by MLA Somashekhar Reddy, who belongs to the Reddy family, against the arrogant behaviour and highhandedness of the Chief Minister.
Eshwarappa, who was part of a state delegation that had been to New Delhi to meet and congratulate the members of the new union cabinet including Prime Minister Manmohan Singh, continued to keep a discreet distance from the Chief Minister. It may be noted, that Yeddyurappa himself stated that he does not believe in holding dialogues with the dissatisfied party leaders. Realizing the abysmal damage the stand off might cost the party's fortunes in Karnataka, party national president Rajnath Singh and general secretary Arun Jaitley summoned Eshwarappa and held prolonged discussions with him at around 2 pm on Wednesday June 3.
It is said, during his meeting with Rajnath Singh on Tuesday, Yeddyurappa and state BJP president D V Sadanand Gowda had raised the topic of unrest caused by the statement of Eshwarappa that they said, had harmed the credibility of the party. They had claimed, by making allegations of distributing liquor and cash against his own Chief Minister, Eshwarappa had handed over a potent weapon for the opposition parties to use against the government.
Speaking at a press conference held later in the evening of Wednesday June 3, Eshwarappa said he had never said that the party could win 19 seats by distributing liquor and cash. "I had said, distributing liquor and cash is the culture of the JDS and the Congress Party. My statement has been twisted by interested quarters, culminating into a major controversy. There are no differences of opinion between myself and my Chief Minister. He is our leader. Minor controversies are natural in any family," he stated. He also said, that he had clarified to the leaders that he was worried that rather than developmental issues, distribution of liquor and cash emerged as main topics in the Lok Sabha election. He also added, that he had expressed the need for the appointment of a central party leader to officiate as the in charge of the BJP’s affairs in the state and that he had been told that Arun Jaitley would be made the in-charge of state BJP affairs soon.
It is said, the Reddy brothers want Karunakar Reddy to be made the deputy Chief Minister. Karunakar Reddy also is said to have demanded the home portfolio. It is thought, that by occupying important portfolios, the mining lobby is targetting to have a vice-like grip on the government. The meeting held in Bellary was attended by 20 to 30 legislators, while it is said, the supporters of Reddy brothers will hold another meeting in Bangalore on Friday June 5 to plan their future strategy.
http://www.daijiworld.com/news/news_disp.asp?n_id=60748
India imposes 10% safeguard duty on aluminum imports
Friday, 05 Jun 2009
PTI reported that India is contemplating 10% safeguard duty on imports of key aluminum products used in the automobile and machinery sector to protect the domestic industry against cheap shipments mainly from China, South Korea, Oman and Iran.
Endorsing the industry's concern that the surge in aluminum imports is affecting domestic units, the Directorate General of Safeguards has recommended a flat 10% duty on items like aluminum, aluminum waste and scraps.
The DGS said "On the basis of findings it is seen that increased imports of unwrought aluminum, aluminum waste and aluminum scraps have caused and threatened to cause serious injury to the domestic industry and producers."
However, these recommendations will now go to an inter-ministerial standing board, chaired by Mr G K Pillai Commerce Secretary.
The duty recommended is for 200 days. However, the standing board had last month sent back the investigation report by the Directorate General of Anti-Dumping and Allied Duties for imposition of anti-dumping duty on steel products.
(Sourced from Press Trust of India)
http://steelguru.com/news/index/2009/06/05/OTcwNzQ%3D/India_imposes_10%2525_safeguard_duty_on_aluminum_imports.html
Mining – International
Mining bill defeated: Greens applaud Coalition support
Posted 9 hours 1 minute ago
Updated 8 hours 55 minutes ago
Farmers from the states north west to Parliament to support the bill. (AAP: Dean Lewins)
The New South Wales Greens say that they are glad Coalition MPs are now on the record as having supported a ban on coal mining on prime agricultural land.
The bill was defeated yesterday in the Upper House, by just one vote.
During the debate, several protesters were removed from the public gallery after causing a disturbance.
Liberal and national MPs backed the Bill - something the Greens MP Lee Rhiannon says her party will remind them of if the Coalition wins the next election.
"The Nationals and the Liberals are on the record that prime agricultural land needs to be protected from mining," she said.
The Nationals MP Duncan Gay says there will be no policy change.
"We have been of this view for a long time, and we certainly haven't changed our view and nor will we," he said.
The Shooters Party and Fred Nile voted with the Government against the bill.
http://www.abc.net.au/news/stories/2009/06/05/2590023.htm?section=business
Mining 'more important' than farming
June 5, 2009 - 10:59AM
NSW Primary Industries Minister Ian Macdonald has supported Premier Nathan Rees's assertion that mining is more important to the state than farming.
On Thursday NSW Premier Nathan Rees told reporters mining was economically more important than farming, after farmers demonstrated outside Parliament House to stress their concerns that agricultural land was being "sacrificed" to mining.
"Ultimately mines generate many, many more jobs than agricultural production," Mr Rees said.
Mr Macdonald told reporters on Friday he believed about 100,000 people were employed in farming across NSW, but that many of those jobs were part-time and seasonal.
He said the work created $5.6 billion in terms of exports.
In the mining sector, he said, around 75,000 people were directly or indirectly employed, "with an export output last year of $12.4 billion).
"You have to remember the mining communities really contribute significantly to those localities where there is significant mining," he said.
"For instance the Charles Sturt University Research Institute has shown in local government areas where there is significant mining activity, the per capita increase or above average of income is $7000 for every individual in that area, so that's a significant boost to a regional area that is fortunate enough to have a significant mining activity."
© 2009 AAP
http://news.brisbanetimes.com.au/breaking-news-national/mining-more-important-than-farming-20090605-bxuj.html
Mining mergers
Prospects for a thaw
Jun 4th 2009
From The Economist print edition
The revival of commodity prices has also resuscitated talk of mergers
Corbis
THE giants of the mining industry might be forgiven a little wistfulness. Just over 18 months ago rumours were rife that a wave of mega-mergers was on the way, the product of persistently high commodity prices. This culminated in a bid by one of the world’s biggest diversified miners, BHP Billiton, for another, Rio Tinto, in November 2007. In the wake of BHP’s approach to Rio more huge deals seemed likely. Might, for example, Vale, a Brazilian giant, bid for Xstrata, which has its headquarters in Switzerland, or could Xstrata bid for Anglo American, based in Britain?
Even as steel mills around the world fall silent, mining’s rumour mill is cranking up again. Recently talk has centred on whether BHP will revive its failed bid for Rio. A spoiling Chinese investment, restrictive competition rules, Rio’s debt burden and nervous regulators would make this difficult, though not impossible. Others moot that Xstrata and Anglo might join forces. In the biggest deal so far this year, Grupo Mexico this week offered $2.9 billion to regain control of Asarco, an American former subsidiary that is in Chapter 11 bankruptcy protection, topping rival bids from a hedge fund and Vedanta, India’s biggest mining firm.
Although the hubbub about mergers sounds familiar, almost everything else has changed for the worse for the mining industry since those heady days. Back then takeovers were tempting not least because the industry was producing shovel-loads of cash and record valuations made purchases with shares alluring. Since then, however, commodity prices have thudded back to earth as the world economy has slumped and China’s red-hot growth has cooled off.
The reversal of fortunes for miners has been staggering. Copper, which at its peak in July 2008 traded at nearly $9,000 a tonne, slumped to below $3,000 at the beginning of this year. Other metals have suffered a similar clobbering. And in late May the annual negotiations to fix a benchmark price for iron ore between its three biggest producers (Rio, BHP and Vale) resulted in Japan’s steelmakers securing a price cut of 33% from last year.
That is not enough for China’s steelmakers, which are abandoning the 40-year-old system for fixing the price of iron ore and demanding an even fiercer cut. Some steel firms have also taken advantage of the low price to invest in iron-ore mines of their own.
Perhaps the best indication of the shifting balance of power within the industry is the endless upheaval at Rio. Chinalco, an aluminium company controlled by China’s government, at first bought 9% of Rio to foil BHP’s takeover bid, which steelmakers feared would leave a single firm with a near-monopoly in iron ore. BHP later abandoned the bid, at the height of the credit crunch, because of concerns about financing its target’s vast debts. That crushing debt forced Rio to strike a further deal with Chinalco in February: in return for $19.5 billion the Chinese firm would receive shares in some of Rio’s most profitable mines and convertible bonds that would allow it to raise its stake in the parent firm to 18%.
Uproar from shareholders, who were not given the chance to participate in the fund-raising, forced a renegotiation to limit Chinalco’s stake. The wrangling may even cause the deal to collapse. It was struck when commodity prices were near their trough and looks too generous now that they have recovered somewhat (seeButtonwood).
Copper now trades at nearer $5,000 a tonne. The price of iron ore may be falling, but this year’s drop in benchmark prices is the first since 2002. Even if China forces through a 40% cut, that will merely bring the price back to 2007 levels. Mining firms’ shares, which plummeted in response to the credit crunch, have perked up a lot since the beginning of the year. Rio’s have doubled in price since January and almost trebled from their low point late last year.
Light at the end of the shaft
The barren landscape of an open-cast mine is unlikely ground to nurture green shoots, but most analysts and industry insiders reckon that they can see plenty. Growth may have slowed in China and India, but the urbanisation that drives demand for copper and steel seems bound to resume before long. Meanwhile, many governments’ attempts to revitalise their economies involve big infrastructure schemes that will require lots of metal. Senior executives at mining firms say that the rise of China and other developing countries means that the industry will not suffer a flashback to the 1980s and 1990s, when supply and demand remained in balance and commodity prices stayed low.
In part, that is because supply looks surprisingly tight. Mining companies dashed to raise production while prices were soaring. But rapidly rising earnings masked huge cost increases, particularly in fuel and wages. So when the fall in commodity prices hit earnings, mining firms responded with swift and deep cuts, closing mines and deferring new projects. Anglo has said that it will halve capital expenditure this year. McKinsey, a consultancy, expects that investment across the industry, at $62 billion, will be roughly half what it was last year and will fall again in 2010.
Cutting capital expenditure causes the pipeline of new projects to dry up faster. Lower exploration budgets mean that the big miners are less likely to unearth the “tier one” assets they crave—long-lived and low-cost deposits that are nearly certain to remain profitable no matter what happens in fickle commodity markets in the seven to ten years it takes to bring them into full production. And politics tends to compound these problems. Mining giants were enraged by forced renegotiations of existing deals last year by governments in such places as Congo, Guinea and Mongolia and are now warier of making big investments in risky parts of the world.
“Junior” miners, exploration companies that provide another source of future assets by taking on the risky discovery and early development of new mines, have been brought to a standstill by the dearth of debt to finance their activities. Perhaps wisely, big miners have eschewed using their precious resources to mop up medium-sized companies on the cheap, as some had predicted. Many of these firms, which tend not to produce ore as cheaply as the “majors”, could go out of business.
The proportion of existing mines in flabby middle-age is growing as the rate of discovery of new tier-one assets has slowed over recent years. For example, BHP reckons that 35% of Chile’s copper production capacity is from mines that are more than 50 years old and 70% from those more than 20 years old. As mines age, ore grades decline, since the best stuff is usually dug up first.
The big mining companies all believe that high commodity prices will return, although no one is prepared to say when. The easiest way of acquiring more tier-one assets to exploit during the next boom, while stripping out costs into the bargain, may be the revival of the mega-merger.
http://www.economist.com/business/displaystory.cfm?story_id=13788658
Rio tie up unlikely to alter iron ore pricing: BHP
Fri Jun 5, 2009 12:50am EDT
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SYDNEY (Reuters) - A tie up between world No. 2 and No.3 iron ore miners, Rio Tinto Ltd/Plc and BHP Billiton Ltd/Plc, is unlikely to trigger a change in the controversial annual benchmark pricing, BHP's chief executive said on Friday.
Marius Kloppers told a media conference BHP continued to endorse a move to price indexing of iron ore over a once-a-year mechanism that sets prices through negotiations, but said he was not expecting a sudden change in pricing.
At stake is how the around $88 billion a year of seaborne iron ore is priced. BHP has stood alone in pursuing the demise of current benchmark pricing, saying a continually adjusted price for iron ore better reflects market fundamentals.
BHP's drive to dismantle benchmark pricing suffered a setback last week when Japanese and Chinese steel mills agreed to another year of fixed pricing.
Chinese mills, representing the lion's share of growth in iron ore sales for BHP, Rio and the largest miner, Vale have so far refused to adopt the Japanese and South Korean terms, which call for a 33 percent price drop over last year.
Rio earlier on Friday said it was dumping plans for a $19.5 billion tie-up with China's Chinalco and agreed to set up an iron ore joint venture with BHP.
China Iron and Steel Association, the country's lead negotiator in benchmark price talks, has repeatedly opposed an iron ore index.
(Reporting by James Regan)
http://www.reuters.com/article/reutersComService_3_MOLT/idUSTRE55414O20090605
Tom Albanese - from mining boss to salvage man
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o Nils Pratley
o guardian.co.uk, Thursday 4 June 2009 23.42 BST
o Article history
It was inevitable. Rio Tinto's fundraising deal with Chinalco of China was a stinker. It was conceived in desperation by a board that realised it had made a terrible mistake at the top of the commodities cycle in 2007 by betting the balance sheet on the $38bn purchase of Alcan.
The logic of letting China buy large stakes in operating subsidiaries was commercially wrong-headed and politically inflammatory in Australia. The financial terms were poor in February, and quickly became dreadful. The deal could not survive warmer breezes blowing through commodity markets.
Is it also goodbye to Tom Albanese? Rio's hapless, though likeable, chief executive faces a long charge sheet. He was the inspiration behind the Alcan purchase, which looks in retrospect like an attempt to escape predatory noises from arch-rival BHP Billiton. The bid came anyway. When it fell away, Chinalco was the result. On the way, Albanese lost his chairman-designate, Jim Leng, who recognised the madness and walked away. Albanese ploughed on, putting his name to a 66-page submission arguing the merits of partnership with China.
Can he now argue with credibility that, actually, a rights issue is the way to go, and don't worry that China might be mighty peeved to find its largest overseas investment is a non-runner? Albanese will not be a popular man in Beijing. Put it this way: his survival prospects are roughly the same as Gordon Brown's.
Ultimately, his fate may be determined by what can be salvaged. Enter from the side door BHP, which will have enjoyed Rio's suffering. Some form of side deal involving iron ore assets in western Australia is expected. It had better be good for Rio. If BHP gets the better end of such an arrangement, Albanese's position may be impossible.
Mind you, other Rio directors might also ask themselves a few questions. Isn't the presence on the board of JP Morgan Cazenove's David Mayhew, the most plugged-in corporate broker in London, meant to save companies from this type of long-running skirmish with their own shareholders?
Easing the burden
Borrowings of £900m have been towering over Debenhams for the past 18 months, so anything that knocks about a third off the total is likely to win applause. That assessment remained broadly correct yesterday as Debenhams bit the bullet and launched a fund raising. But what a price the company is paying to "take the leverage issue off the agenda", in chief executive Rob Templeman's ugly terminology.
It turns out that raising £323m, and expanding the number of shares in issue by nearly 40%, will reduce Debenhams' interest bill by only £10m this year – and that's before you count the fees involved in the fundraising. Debenhams' banks are charging the company a higher rate of interest on the remaining debt in exchange for granting easier covenants. Welcome to the "improving" credit market – terms are indeed better than they were a couple of months ago but it's still a lender's market.
Yet it's hard to dispute Templeman's decision to accept the bargain. If the department store group can continue to generate cash at the rate of £100m a year, it should be in a far stronger position once the real debt action starts in 2011, the year of the big renegotiation. The other piece of good news is that current trading remains robust, suggesting that the debt has not been a distraction.
One grumble remains – the messy structure of the fundraising. A conventional rights issue would have been preferable to a placing and open offer in which shareholders can choose to "claw back" 60%. Still, from the company's point of view, the job is done, even if it was alarming to see Debenhams' private equity backer CVC sell 51m shares a day before its lock-up agreement kicks in.
Hit-and-miss bonus
Bonuses are paid to directors for good performance, right? That's why they are called performance-related bonuses.
This principle seems to have become lost at Marks & Spencer, where the remuneration report sets out the terms of the bonus scheme for the current year. The main measure is profit before tax. Targets are established on the basis of City analysts' expectations and the company's internal plans.
Fair enough, but a bonus for 45% of salary is payable merely for hitting the consensus figure. That's hardly out performance – it's only what is expected. Worse, a bonus of 11.25% of salary can be paid if profits are "90% of 'on-target'", as the report puts it cutely.
In other words, profits can be 10% below target and bonuses can still be awarded. Surely that would be an underperformance-related bonus.
nils.pratley@guardian.co.uk
http://www.guardian.co.uk/business/2009/jun/04/tom-albanese-mining-rio-tinto
Death toll in S.Africa mine tragedy rises to 76
17 hours ago
JOHANNESBURG (AFP) — The bodies of another 15 people have been recovered at an abandoned gold shaft in South Africa, bringing the toll from a deadly fire last month to 76, police said Thursday.
"The bodies were recovered this morning at about 8 am (0600 GMT). They were discovered by other miners," police spokesman Sam Makhele said.
Police are trying to determine whether the latest victims were also illegal miners hoping to find gold in the abandoned shaft, he added.
"At this stage we are not sure if they are also illegal miners. We are asking people to come and identify the bodies, although they are badly decomposed," he said.
The bodies were recovered after a fire reportedly broke out on May 18 in the disused shaft owned by Harmony Gold, the world's fifth-largest gold producer, in central Free State province.
Harmony chief executive Graham Briggs said most miners appeared to have died from smoke inhalation.
It was the second major accident in South Africa this year, after 20 illegal miners died in March at another mine.
Illegal mining deep inside South Africa's abandoned pits has long plagued the world's third-largest gold producing nation, with diggers living sometimes for months underground to smuggle the precious metal.
http://www.google.com/hostednews/afp/article/ALeqM5hp1ZtRNLnKfcY-fRSfqwHrpjYHcQ
Other News
India, China 'ready to rule world economy': US expert
Washington (IANS): After the fall General Motors, "once the embodiment of US economic might," Americans should get used to the fact that "upstarts" like China and India are "ready to rule world economy," a US commentator said.
"We may not like to admit it, but it's time to get used to this fact: emerging markets such as China and India are quickly becoming the world's new economic powerhouses," Paul R. La Monica, CNNMoney.com editor at large wrote in a commentary Wednesday.
He noted that the Centre for Economics and Business Research (CEBR), a London-based economic consulting firm, had predicted emerging market economies may overtake the US and the rest of the Western world this year instead of 2015 as predicted earlier.
However, "This doesn't necessarily mean that the United States is doomed to a massive economic fall from grace," La Monica said. "In fact, it does not appear to be a coincidence that hopes of a US economic recovery have helped lead a surge in stocks in China, India, Latin America and other emerging markets."
Noting that with the United States showing some signs of economic stabilisation, emerging markets to have snapped back, he said: "So rather than bemoaning the West's inevitable slip in economic importance, investors need to embrace emerging markets and realize that interdependence is key to the global economy."
"China and other emerging markets have tied themselves intricately to the US economic system," he said citing James Swanson, chief investment strategist with MFS Investment Management in Boston. "As the US recovers, that means that there will be a lot of earnings growth coming out of China and other emerging markets like India and Brazil."
With that in mind, Swanson said investors need to be thinking more about buying shares of multinational US construction firms that will benefit from increased demand in emerging markets, as well as mining, energy and manufacturing companies in China, India and Brazil.
"So if companies such as Alcoa, Ford Motor and ExxonMobil are in your portfolio, you might also want to take a look at Aluminum Corp. of China (ACH), India's Tata Motors (TTM) and Brazil's Petrobras (PBR) as well," he said.
"US investors can't have 80 percent to 90 percent of their portfolio in the US anymore," Swanson said. "The old notion of having 5 percent to 10 percent in international stocks is outdated. Americans should increase their weight in emerging markets."
http://www.hindu.com/thehindu/holnus/006200906040951.htm
Climate change will affect monsoon, warns Greenpeace
New Delhi (PTI) The monsoon in the country will be significantly affected by climate change resulting in enoromous adverse social and economic consequences, NGO Greenpeace has warned on the eve of World Environment Day.
"The stability and predicability of the monsoon are critical to India's economy, society and ecology and changes in the monsoon will have far reaching social and economic impacts," the NGO said in its study titled "Monsoon Wager: Climate Change and the Indian Monsoon" said.
A compilation of current climate science on the Indian monsoon, the paper concludes that climate change could bring about significant change to the intensity, geographic distribution and inter seasonal breaks in the monsoon, which would have enormous social consequences.
"The lives of millions of Indians, farmers, city dwellers, even those trading on the Mumbai Sensex, depend on the monsoon.
"Mumbai and India cannot allow the delicate balance of the monsoon to be thrown awry; we cannot afford to adapt if the monsoons are impacted, we simply have to stop that from happening", said Vinuta Gopal, Climate and Energy campaigner Greenpeace while referring to recent Mumbai flood.
The predictions made by the IPCC in the 4th Assessment Report suggest that warming is likely to be above the global average for South Asia, with an increase in summer precipitation and an increase in the frequency of intense precipitation in some parts.
http://www.hindu.com/thehindu/holnus/000200906041714.htm
How green is govt's economic policy?
Shweta Kapur
Friday, June 05, 2009 (Mumbai)
The past year has seen climate change hit the world hard with a series of serious natural disasters globally. In fact, even prices for crude oil, the most popular source of conventional energy source, shot up sending global economies into a spin.
So as a run-up to World Environment Day on Friday, with these issues beginning to play a pivotal part in our societies and economies, it's time to ask if our leaders are taking a hard look at what needs to be done.
Action in the global arena is heating up when it comes to climate change. As emission targets get reviewed and carbon credits are cashed in, India, one of the largest emerging economies, is an important player in the eco-friendly pack.
But the question is—how green is our government, which is back at work for Term 2 and what are its policies to go green?
Dr Leena Srivastava, executive director at TERI, said, "We have a regulatory framework in place but what we lack most is implementation and management of existing resources."
Although during its previous regime, the UPA government's agenda included issues like renewable energy, it did not address pollution levels or wildlife management. The new minister at the helm, Jairam Ramesh, has already made clear that if India is to grow at 8-9 per cent, energy consumption is likely to go up 7 per cent, making it essential to improve environmental clearance protocol for industries.
But experts say that there are other burning issues that have taken a back seat.
Well, the balancing act between economy and ecology is quite a tightrope for a government at a time when propelling economic growth has become the biggest political agenda and if India has to make its presence felt as a world economy, it needs to sit up and make other nations go green with envy.
http://profit.ndtv.com/2009/06/05000115/How-green-is-govts-economic-p.html
Nation celebrates World Environment Day
5 Jun 2009, 1105 hrs IST, ANI
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NEW DELHI: The nation will commemorate the World Environment Day on Friday along with all the nations of the
World.
The theme this year reflects the urgency for nations to take adaptation and mitigation measures to addressclimate change consistence with the policy of sustainable development and reach agreed outcomes at the crucial climate convention meeting slated in Copenhagen in December 2009.
The day has been marked by the United Nations to observe as World Environment Day to give a human face to environmental issues, empower to become agents of sustainable and equitable development, promote to change attitude regarding the environment and advocate partnership between each human being and each society to ensure a safer and more prospers future.
The World Environment Day is being celebrated since 1974 every year.
Different themes have been declared to tackle various issues to protect environment. For international exposition, a host city has also been selected since 1987.
Jairam Ramesh, Minister of Environment and Forests (Independent charge) will preside over the function. Dr Ashok Khosla, Chairman, Development Alternatives and President, IUCN and Club of Rome will deliver keynote address.
The Ministry of Environment and Forests has organized a function where the President will give awards for conservation and preservation of environment, Indira Gandhi Paryavaran Puraskars (IGPP) , Young environmentalist of the year award- 2009 on this occasion.
This environmental hero has been selected by the National Museum of Natural History (NMNH) from the class 8th to 12th who often go unrecognized after competitions. The prize recognize individual for sustain and significant affords to protect and Hanes environment
The IGPP will be also given to individual and to organizations. This award is given in recognition to those who had made major impact of environment this year. IGPP award will be given for the year 2006 and 2007.The ministry has awarded 35 IGPP awards since 1987.
New discoveries of flora and fauna recorded during the year 2008 will be released today.
The scientists of Botanical Survey of India and other institutions discovered 3 genera, 108 Species 48 sub species, 12 verities, and 1 forma and new to science and 24 spices and 3 verities as new records for Indian flora.
Scientists at Zoological Survey of India discovered 37 new species and 9 new records from India, Nepal and Sri Lanka. These books are Plant Discoveries- 2008 and Animal Discoveries -2008.
To encourage original writing in Hindi on environmental subject, the ministry gives 4 annual awards since 1987. The first, the second, and the third winners are given Rs. 31000 and 25000 and Rs 20000 respectively. One consolation award is also given with Rs 15000. The awardees also get citation
http://timesofindia.indiatimes.com/India/World-Environment-Day-today/articleshow/4619900.cms
TDP wants Andhra Govt to review SEZ policy
Fri, May 29 04:57 AM
The two-day conference of the Telugu Desam Party
, 'Mahanadu', held to discuss the poll outcome and chalk out the party's roadmap for next five years, concluded on Thursday.
The party passed a resolution, asking the state to reassess its SEZ policy and to safeguard the interests of farmers, fishermen and other communities that are being uprooted due to land acquisition.
Chairing the conference, TDP president N Chandrababu Naidu said that over one lakh acres of land were taken over by the Government for SEZs, displacing farmers, coastal fishing communities and villagers. "Andhra has been sanctioned 90 SEZs for which the Government has acquired so much land. But the SEZs have failed to generate any employment for the locals. The Government policy on SEZs needs to be reviewed," the TDP resolution stated.
On the party's poor poll performance, Naidu blamed the Praja Rajyam Party for splitting votes, but also admitted that the Telangana sentiment was not tapped adequately despite the TDP and TRS coming together under the 'Grand Alliance' umbrella.
Naidu, however, clarified that the party will not reconsider its stand on Telangana. "We took a decision to support the cause of a separate Telangana state and we will stand by it. There is no need to rethink that stand," he said.
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