Mining – India 1
1. Vedanta boosts share buy-back plan to $350 mln 1
2. HC directs survey of mines in Bellary 2
3. Coal India shortlists 10 parties 3
4. Hindalco net drops 80 % on weak demand 4
5. New legislation to replace existing Mines& Minerals Act 5
6. Another 660 Mw of nuclear power capacity in 6 months 6
Mining – International 7
7. BHP says Australia nickel mine hit by 2nd rockfall 7
8. South African Ruling Party Unaware of Call to Nationalize Mines 8
9. Steel demand helps nickel extend its rally 8
10. Cap & Trade: Metal Industries Very Divided on Legislation 9
11. Opposition blasts gov't over fund withdrawal 11
12. Canada seen worst of G8 not curbing climate change 12
13. Hindalco closes Novelis plant in UK, to recast capex plan 14
14. Mini gold contracts to tap household stock 15
Other News 17
15. ECB norms liberalised for Special Economic Zones 17
16. Econ survey: decontrol petrol, diesel prices 17
17. India not to sign binding agreements on environment news 18
18. PLoS Medicine: Water Should Be A Human Right 19
19. How to make the SEZ scheme more attractive 20
Mining – India
Vedanta boosts share buy-back plan to $350 mln
Wed Jul 1, 2009 6:09pm IST
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LONDON (Reuters) - India-focused mining group Vedanta Resources Plc has boosted the size of its share buy-back programme by 40 percent to $350 million, lifting the London-listed company's shares on Wednesday.
Vedanta, which announced plans in December to spend $250 million to repurchase up to 10 percent of its shares, said it was increasing the programme by $100 million.
The group -- which has operations in India, Australia and Zambia -- said it has so far bought back 16.2 million shares, equal to 5.62 percent of its shares, for $227 million.
Its shares have more than doubled in value this year and were up 8.9 percent at 1,403 pence by 1108 GMT, making it the biggest gainer in the FTSE 100. It outperformed a 3.4 percent increase in the British mining sector.
Vedanta -- which produces a range of commodities including aluminium, iron ore and copper -- posted a 75 percent drop in annual attributable profit on May 7 after commodity prices slid and the impact of minority stakes grew.
At the time, it said it had cash and liquid investments of $4.9 billion and net debt of $200 million.
Vedanta launched a $1.25 billion convertible bond on June 12 and its iron ore unit unveiled plans to boost output by more than half.
http://in.reuters.com/article/businessNews/idINIndia-40732220090701
HC directs survey of mines in Bellary
Express News Service
First Published : 02 Jul 2009 03:50:00 AM IST
Last Updated : 02 Jul 2009 11:29:18 AM IST
BANGALORE: The High Court has directed the Indian Survey department and Bureau of Mining to conduct survey of mining areas in Vyasanakere and Kallahalli of Bellary district.
While hearing a contempt petition filed by MSPL, a division bench headed by Chief Justice P D Dinakaran directed the Survey department to conduct the survey and file a report to the court within six weeks.
Though the High Court had ordered for regulating illegal mining in survey number of 64 and 71 of Vyasanakere and Kallahalli villages, the district authorities had not taken any action, the petitioner said.
While hearing the petition, the court pulled up the Deputy Commissioner of Bellary, officials of mining and geology department, forest officials and police officials for not taking action against illegal mining in the two villages.
Davanagere CMC commissioner fined
The High Court on Wednesday imposed a fine of Rs 50,000 on the former commissioner of City Municipal Council of Davanagere for regularising a private hospital in a residential area. The court has also directed the chief secretary to hold an inquiry against the erring officers.
While allowing a petition filed by Nagaraj Rao, a resident of Davanagere, Justice Rammohan Reddy directed the government to recover the fine from the salary of the then commissioner.
The petitioner argued that Dr T Omkarappa had purchased a site adjacent to the petitioner’s house and had constructed the hospital, though the area was earmarked for residential purpose.
After the petitioner raised objections, Omkarappa filed an application before the CMC on September 18, 2007 for regularisation of the said hospital.
The then commissioner regularised the hospital.
The petitioner argued that the commissioner had violated the provisions of the Municipalities Act by regularising the hospital. While imposing a fine on the commissioner, the court imposed the cost of Rs 10,000 on the doctor.
HC directs survey of mines
The High Court has directed the Indian Survey department and Bureau of Mining to conduct survey of mining areas in Vyasanakere and Kallahalli of Bellary district.
While hearing a contempt petition filed by MSPL, a division bench headed by Chief Justice P D Dinakaran directed the Survey department to conduct the survey and file a report to the court within six weeks.
Though the High Court had ordered for regulating illegal mining in survey number of 64 and 71 of Vyasanakere and Kallahalli villages, the district authorities had not taken any action, the petitioner said.
While hearing the petition, the court pulled up the Deputy Commissioner of Bellary, officials of mining and geology department, forest officials and police officials for not taking action against illegal mining in the two villages.
301 Judges transferred
In a major reshuffle in the state judiciary, the High Court on Wednesday transferred 301 judicial officers, including the cadres of district judges, ad-hoc district judges and civil judges (senior and junior division) in subordinate courts.
The HC transferred the assistant registrar and judges posted in fast track courts and few senior and junior division judges have transferred to post, which has been vacant for long time.
http://www.expressbuzz.com/edition/story.aspx?Title=HC+directs+survey+of+mines+in+Bellary&artid=2R/SrYup5ic=&SectionID=7GUA38txp3s=&MainSectionID=fyV9T2jIa4A=&SectionName=zkvyRoWGpmWSxZV2TGM5XQ==&SEO=
Coal India shortlists 10 parties
1 Jul 2009, 1657 hrs IST, ET Bureau
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KOLKATA: Coal India has shortlisted 10 parties for participating in tenders for extracting coal from abandoned mines. About 12 entities had
shown interest.
"Parties shortlisted are Arcellor Mitta India Ltd, Rio Tinto, Titan Mining Company, JSW Steel, JSW Energy Ltd, Monnet Ispat, Essar Mineral Reserves, SNT Mining and Sunflag Iron & Steel," said a senior CIL official close to the development.
Titan Mining Company is a member of the South Africa Angecor Group which specializes in equipment manufacturing and supply. It offers specialised contract mining services also. Rio Tinto is an UK-based mining major.
The final tenders, however, will be invited by CIL subsidiaries whose abandoned mines are being put on the block for mining. Selected parties will then have to form a JV with CIL, as CIL-subsidiaries are not allowed to form any JV.
"A draft notice inviting tender (NIT) has been sent to all these 10 parties. We have now decided to hold a meeting with them to discuss any issues involved or doubts on the draft tender. The meeting has been scheduled on the 20th of July.
Following this the NITs for respective mines will be finalised and tenders invited. The entire process of selection of final JV partners for abandoned mines is likely to be completed by the end of 2009," N C Jha, director technical, CIL told ET.
ArcelorMittal, was the first to express its keenness to extract coal from abandoned mines jointly with CIL, and had approached the government for jointly extracting coal from CIL's abandoned mines. In view of this the ministry had asked CIL to take forward the proposal. Subsequently, CIL decided to invite EoI from all interested parties and floated an EoI sometimes during August last year.
The public sector coal major had offered 18 abandoned or derelict mines with a total reserve of 1647 million tonnes from its subsidiaries including Eastern Coalfields (6 mines), Bharat Coking Coal (8 mines) and Central Coalfields (4 mines).
"We have received anything between 6 and 10 applications for every mine offered under BCCL and CCL jurisdiction, while for ECL it is between 2 and 7," said Mr Partha S Bhattacharyya, chairman CIL.
Nevertheless, CIL has decided to select only one party for a single mine. However, in case only one company is selected for more than one mine, all such mines will be the subject of a single JV with that party.
Private companies that ink JVs with CIL or its subsidiaries will have access to only 50% of the total production where CIL or its subsidiaries will hold equal stakes with private parties.
http://economictimes.indiatimes.com/News/News-By-Industry/Indl-Goods--Svs/Metals--Mining/Coal-India-shortlists-10-parties/articleshow/4724835.cms
Hindalco net drops 80 % on weak demand
Special Correspondent
Recommends Rs. 1.35 per share dividend
________________________________________
Lower LME prices and spiralling input costs squeeze margins
________________________________________
MUMBAI: Hindalco Industries reported an almost 80 per cent drop in consolidated profit for the year ended March 31, 2009, on the back of weak demand and dropping commodity prices.
The company, which bought Canadian aluminium manufacturer Novelis in 2007, reported a consolidated net profit of Rs. 485.30 crore against Rs. 2,193.30 crore in the previous year. The directors have recommended a dividend of Rs. 1.35 per share of Re. 1 each (Rs. 1.85 per share).
Net sales rose by 9 per cent to Rs. 65,625.20 crore (Rs. 60,013 crore). The consolidated profit before interest and tax is Rs. 627 crore. The result includes a non-cash unrealised derivative loss of around Rs. 2,381 crore (Rs. 12 crore). These derivatives are used to hedge exposures to aluminium, primarily related to customer fixed-price contracts, other commodities and currency. During the year, aluminium business revenue was Rs. 54,306.40 crore while that of copper was Rs. 10,760 crore.
In Novelis, the actions taken to adjust metal intake, reduce production and decrease fixed costs will deliver an estimated $140 million annualised future savings.
On a standalone basis, the company reported a net profit of Rs. 2,230 crore (Rs. 2,861 crore) on net slaes of Rs. 18,220 crore (Rs. 19,201 crore).
Aluminium business turnover was up 6.4 per cent on the back of highest-ever metal volumes. But lower LME prices and spiralling input costs squeezed margins, coupled with a shrinkage in domestic demand for value added products. In copper, revenues were 12 per cent lower at Rs. 10,624 crore. The steep depreciation of the Indian rupee against the dollar affected the copper business by an estimated Rs. 156.50 crore (Rs. 41 crore). As a result, the gross profit on copper was lower by Rs. 115.50 crore.
The brownfield expansion at Hirakud from 1.43 lakh tonnes to 1.55 lakh tonnes will be completed next month and the special alumina production expansion at Belgaum from 1.38 lakh tonnes to 3.16 lakh tonnes will be completed by end-2011. In greenfield projects, Utkal Alumina in Orissa will produce alumina and the Mahan alumium project for aluminium will see metal roll out from July 2011. The Aditya Aluminium integrated project in Orissa will see metal roll out by October 2011 while the Jharkhand Aluminium plant will produce metal from June 2013.
Hindalco has formulated a scheme of financial restructuring to deal with various costs associated with organic and inorganic growth plans. It has created a separate reserve account, Business Reconstruction Reserve (BRR), by transferring balance standing to the credit of Securities Premium Account for adjusting certain expanses. Accordingly, Rs. 8,647 crore has been transferred to BRR and Rs. 67 crore in standalone accounts and Rs. 4,616 crore in consolidated accounts have been adjusted against the same.
http://www.hindu.com/2009/07/01/stories/2009070156091400.htm
New legislation to replace existing Mines& Minerals Act
New Delhi : The Mines Ministry is in the process of finalising the draft of a new legislation to replace the existing Mines and Minerals Development and Regulation (MMDR) Act, 1957, responsible for regulating mines and development of minerals.
"The Ministry is in the process of finalising the draft of a new legislation after holding several rounds of talks with the concerned state governments. The new legislation will be in consonance with the National Mineral Policy, 2008 in order to ensure that the objectives of the new policy are met," a senior Ministry official said.
"In all likelihood the Ministry will place the draft legislation before the Parliament in its winter session. The proposed legislation will ensure scientific and sustainable mining besides taking adequate care of social development issues while attracting huge investments," the official said.
The country is hopeful of attracting a whopping USD 5 billion investment in the mining space with the entry of the global companies as and when the new mineral policy is implemented.
"Many countries are actually interested in investing in India and bringing new technology and it is mainly getting the policy and the legislation right that will determine that how much investment flows into India. One ballpark figure could be up to five billion dollars," Ministry of Mines Additional Secretary S Vijay Kumar had recently said.
The Ministry official said that the need for a new legislation is increasingly being felt as the existing legislation is inadequate to address the present requirements of the mineral sector.
About the possibility of amendment in existing MMDR Act the official said, "It is not possible to amend the existing Act as it requires a large number of amendments. Even the Chief Ministers of the states suggested a new legislation instead of a large number of amendments."
While reviewing the previous Mineral Policy, 1993, the Hoda Committee, headed by former member of the Planning Commission, Anwarul Hoda had also suggested for amending the Mines and Minerals (Development and Regulation) Act 1957.
However, Mines Minister Bijoy Krishna Handique while unveiling the Ministry's 100-day agenda had recently made it clear that the Ministry is not in favour of amendments as the present law is archaic and needs complete overhaul in order to meet the growing need of minerals in the country especially iron ore.
"New Act on scientific development of mines and minerals would be drafted and placed in the parliament during the winter session," Handique had said
"In the new Act the focus will be on scientific and clean mining.... This would ensure a climate conducive to private investment and exploration. We also embark on revision of royalty rates on ad valorem basis," he had said.
Handique had said that both legislative and non-legislative measures would be initiated to implement the National Mineral Policy (NMP) 2008.
"Mineral wealth, though finite and non-renewable in the long term, is a major resource for development.
"The need for a well planned programme of survey and exploration, management of resources which have already been discovered and those which are in the process of discovery and their optimal, economical and timely use are matters of national importance," the new mineral policy says.
Bureau Report
http://www.zeenews.com/news543086.html
Another 660 Mw of nuclear power capacity in 6 months
Sudheer Pal Singh / New Delhi July 02, 2009, 2:18 IST
Another 660 Mw of nuclear power capacity should become operational in another six months, from the Rajasthan Atomic Power Project (RAPP) at Kota and at the Kaiga Atomic Power Project (KAPP) in Karnataka’s Uttara Kannada district.
RAPP’s current capacity is 740 Mw, using domestic uranium. The two new units, of 220 Mw each, will run on imported uranium, for which agreements were signed this January. The supply has started. Kaiga is presently generating 500 Mw; the new unit is an additional one of 220 Mw. It will also run on imported fuel.
“We have received some consignments of uranium from Russia and France. RAPP units 5 and 6 should be commissioned in six months now, as soon as the pre-commissioning activities are over,” said a senior official from the Department of Atomic Energy (DAE). The Kaiga commissioning should follow soon after.
The Indian government has a contract with TVEL, a joint stock company of the Russian Federation, for long-term supply of 2,000 tonnes of natural uranium. In another contract, Areva, the French energy major, has also committed to supply 300 tonnes of the nuclear fuel. Both contracts were signed in January.
The two new units of 220 Mw capacity each at the RAPP will account for around 14 per cent of the 3,160 Mw of nuclear power generation capacity in the pipeline, and the first to receive the newly imported fuel.
The official, however, refused to give details of the quantum of fuel imported and the uranium requirement for nuclear plants like RAPP, citing the Atomic Energy Act, 1962, which prohibits state owned companies from divulging production and consumption details of nuclear fuel.
Experts, however, believe operation of the two RAPP generating units would require around 0.4 kg of uranium daily. The newly imported fuel would be processed at the Nuclear Fuel Complex (NFC) at Hyderabad before being fed to the two reactors.
At present, Nuclear Power Corporation of India Ltd (NPCIL) alone produces nuclear power in the country. Its 17 units have an installed generation capacity of 4,120 Mw, which is about 3-4 per cent of total power generation capacity in the country. The aim is to increase the nuclear generation capacity to 20,000 Mw by the year 2020.
NPCIL is planning to add another 3,160 Mw of capacity from three power plants in two to three years. These are all to be commissioned by 2012. This includes 2,000 Mw from two units of the Kudankulum Atomic Power Project in southern Tamil Nadu’s Tirunelveli region, 440 Mw from two units of the RAPP, one 220 Mw plant of KAPP in Karnataka and an addition of 500 Mw to the Kalpakkam atomic plant in Tamil Nadu, near Chennai (presently 440 Mw capacity).
Fuel for the Kudankulam power project has already been sourced from Russia and the newly available uranium would be partly fed to the power plants of Rajasthan and Kaiga.
This availability of imported uranium is expected to bring to an end the heavy dependence of nuclear power reactors in the country on domestic uranium. Power generated from the NPCIL-run reactors has been low due to lack of availability of fuel. The official said the company has now been able to ramp up its generation to over two-thirds of its capacity, owing to the exploration of new mines by Uranium Corporation of India Ltd (UCIL).
http://www.business-standard.com/india/news/another-660-mwnuclear-power-capacity-in-6-months/362690/
Mining – International
BHP says Australia nickel mine hit by 2nd rockfall
Wed Jul 1, 2009 8:05pm EDT
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Nikkei flat ahead of U.S. jobs data but Hitachi up
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SYDNEY, July 2 (Reuters) - For the second time in less than a month BHP Billiton Ltd (BHP.AX)(BLT.L) has temporarily closed its Perseverance nickel mine in west Australia due to rock falls around the site, the company said on Thursday.
The underground mine remains partially closed in the area affected by the incident, which occurred late on Monday, though mining resumed in other sections of the mine the next day, according to a BHP spokeswoman.
Authorities have ordered BHP Billiton to commission an independent assessment to demonstrate whether mining was safe before resuming full operations, the company said, adding it was confident it could do so.
BHP Billiton was forced to suspend mining temporarily on June 10 when a rock fall trapped a mine worker about 1,000 metres (3,281 feet) underground and had not yet returned to full operations before the second incident occurred.
The worker was uninjured in the incident and rescued about 16 hours later.
Perseverance is part of the company's Nickel West complex in west Australia. Nickel West produced about 27,000 tonnes of nickel in the March quarter. (Reporting by James Regan)
http://www.reuters.com/article/rbssEnergyNews/idUSSYD47713720090702
South African Ruling Party Unaware of Call to Nationalize Mines
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By Garth Theunissen
July 2 (Bloomberg) -- South Africa’s ruling party, the African National Congress, said it’s unaware of an alleged call by the party’s youth league for the government to nationalize the country’s mining and manufacturing industries.
“I am not aware of that request having been made,” ANC spokeswomanJessie Duarte said by mobile phone today. “This is the first I’m hearing of it.”
The Sowetan newspaper today reported that ANC Youth League PresidentJulius Malema had urged President Jacob Zuma’s government to take control of the country’s mines and factories because of the “confusion” caused by the global financial crisis. The time has come for the government to transfer South Africa’s wealth to “the people as a whole,” the Johannesburg- basednewspaper cited Malema as saying.
South Africa, which has the highest unemployment rate of 62 countries tracked by Bloomberg, lost 179,000 non-farm jobs in the first quarter as the economy plunged into its first recession in 17 years. Gross domestic productfell an annualized 6.4 percent in the first three months of the year, following a 1.8 percent contraction in the final quarter of 2008.
ANC Youth League spokesman Floyd Shivambu didn’t immediately respond to messages left on his mobile phone when Bloomberg News called seeking comment.
To contact the reporter on this story: Garth Theunissen in Johannesburggtheunissen@bloomberg.net
http://www.bloomberg.com/apps/news?pid=20601116&sid=apPbAMd2LTX8
Steel demand helps nickel extend its rally
By Miles Johnson and Javier Blas in London
Published: July 2 2009 03:00 | Last updated: July 2 2009 03:00
Nickel prices yesterday hit their highest level in nine months, extending its 65 per cent rally in the second quarter of the year.
This came amid signs of a recovery in stainless steel production, in which the base metal is a key ingredient.
The rise in nickel prices between April and June dwarfs the increases of other base metals, including copper - 27 per cent - and aluminium - 13 per cent.
On the London Metal Exchange, nickel prices for delivery in three months surged above $16,500 a tonne, up more than 6.5 per cent on the day and the highest level since lateSeptember. But prices are well below the all-time high of more than $50,000 a tonne set in May 2007.
Analysts justified the rally on increasing demand for stainless steel - which accounts for 70 per cent of nickel consumption, according to Deutsche Bank - as consumers are restocking.
Barclays Capital noted that nickel imports in China have risen, hitting a record high in May, while mine output has declined 21 per cent so far this year when compared with 2008.
The bank cautioned, however, that prices were vulnerable. "Some of the drivers appear unsustainable and it will not be until enddemand conditions improve towards the end of the year, in our view, that there will be a concrete recovery in prices," it said, forecasting nickel prices by late-2009 at $12,800 a tonne.
Other base metals also rose boosted by stronger Chinese, US and Japanese manufacturing data. Copper rose 3 per cent to $5,120 a tonne while aluminiumrose 2.3 per cent to $1,670 a tonne. Zinc and lead gained more than 3 per cent.
Oil thrashed about in a volatile session, with crude paring its gains after closely followed weekly US government data showed a sharp rise in stocks of petroleum products.
Crude inventories fell for the fourth consecutive week, according to data from the Energy Information Agency, the statistical arm of the US Department of Energy.
But this was overshadowed by the sharp rise in gasoline, diesel and heating oil. Crude stocks dropped 3.7m barrels to 350m barrels while gasoline and distillates inventories rose on stronger imports and weaker demand, with the former rising 2.3m barrels and the latter by 2.9m barrels. Nymex August West Texas Intermediate fell 58 cents to settle at $69.31 a barrel. ICE August Brent fell 51 cents to close at $68.79 a barrel.
Michael Lewis, head of commodities research at Deutsche Bank in London, noted the continued mirroring between oil prices and other asset classes, calculated using data starting in August 2008 that each 50-point move in the US S&P 500 index is approximately a $7-a-barrel move in the West Texas oil price.
In the agriculture market, raw sugar prices hit a fresh three-year high for a front- month contract, trading as high as 18.01 cents per pound on the day.
Industry sources said Cargill, the US giant agricultural trading house, took delivery of a huge 1.3m tonnes against the ICE July raw sugar contract, which expired on Tuesday.
Sugar prices later fell after Brazil reported a large increase in sugar output. In afternoon trading, ICE October sugar was down 0.7 per cent to 17.33 cents.
http://www.ft.com/cms/s/0/645a4d80-66a0-11de-a034-00144feabdc0.html
Cap & Trade: Metal Industries Very Divided on Legislation
July 1st, 2009 • No Comments
Last week, the House passed a cap and trade bill with a vote of 219 for it and 212 against it. The bill will next go to the Senate where Senator Barbara Boxer (D-CA) hopes to introduce and vote on a bill before the August recess. But a controversial provision in the bill will likely spark huge debate both within the Senate and for President Obama in terms of whether or not he will support the bill with the provision intact. The provision calls for tariffs on all goods imported from countries that don’t have a similar carbon emissions restriction. The provision would affect many countries’ goods but would certainly take aim at Chinese and Indian origin materials. Democrats added that provision to ensure US industries do not have to face “unfair competition abroad.”
Who supports cap and trade and who opposes it? In the broadest terms, several organizations have taken positions against cap and trade. These include the National Federation of Independent Businesses and the National Association of Wholesaler-Distributors. The NAW’s membership comprises a broad range of other industry trade associations as opposed to specific companies. The trade associations relevant to the metals industry include: American Machine Tool Distributors Association, Copper and Brass Service Center Association, National Fastener Distributors Association, Petroleum Equipment Institute, Metals Service Center Institute among many others. Both organizations have prioritized Cap & Trade legislation as “key vote,” according to Roll Call. This means, both associations will grade various legislators based on their specific votes for this legislation. Grades help determine how PAC monies are allocated and which Congressmen/Congresswomen receive support from the trade association.
Other groups also have come out publicly against Cap and Trade. These include the US Chamber of Commerce and the National Association of Manufacturers (NAM). The National Mining Association has also come out against the bill according to Roll Call yet Rio Tinto is a member of USCAP (The United States Climate Action Partnership) that supports the legislation.
From a company perspective, many of the big US steel mills and even the mini-mills (who have less to lose by the proposed legislation since they emit less carbon) have all come out opposing the bill. These firms include: US Steel, AK Steel, Arcelor Mittal and Nucor.
Supporters of the legislation appear more heavily skewed toward power companies (who will receive 60% of the pollution permits for free) and non-profit organizations. Here is a breakdown of members of USCAP, in support of legislation:
Source: USCAP Website and MetalMiner
http://agmetalminer.com/2009/07/01/cap-trade-metal-industries-very-divided-on-legislation/
Opposition blasts gov't over fund withdrawal
Published: Thursday | July 2, 2009
Daraine Luton, Staff Reporter
A NEAR wipe-out of the Capital Development Fund (CDF), mainly for budgetary support, on Tuesday left some opposition parliamentarians fuming that successive political administrations have failed to plan effectively for life after bauxite.
Following yet another withdrawal from the CDF, South Manchester Member of Parliament Michael Peart complained that enough resources have not been directed to bauxite communities.
$6.8 million remaining
Finance Minister Audley Shaw, moved a resolution for the withdrawal of $770 million from the CDF, leaving $6.8 million in the fund.
The CDF, which is financed by the bauxite levy, was intended to be used for capital and development projects in areas that are subjected to bauxite-mining activities.
The finance minister said $510 million of the amount was being taken out of the fund for budgetary areas. Another $159.4 million will go to the Jamaica Bauxite Institute for budgetary support, while $100 million has been set aside for the bauxite community development fund.
"I am amazed that this Govern-ment, at this point in time, can make a significant withdrawal from the Capital Development Fund and it is basically for housekeeping," Peart protested in the House.
The opposition MP described as "a token amount", the allocation for the bauxite community development fund, noting that, in light of the shutdown of three of the country's four alumina plants, more should be done for the areas.
"I would expect that with a dwindling resource, which is the Capital Development Fund and the dislocation being caused by the alumina plants, that some special allocation be made to assist these areas.
"Not even the crisis in the bauxite areas can jerk this Government into addressing some critical needs of these people," Peart said.
However, government MPs said the allocation to the bauxite community development fund was laudable.
Proper allocation
"It was increased from two million to four million ... . How much more does he want?" MP Everald Warmington said, noting that the allocation to each constituency had been doubled.
North Central MP Pearnel Charles said it was "the first time we are getting a proper allocation".
Meanwhile, Mining and Energy Minister James Robertson told the House that the full budget for the communities was $136 million but noted that he expected the finance minister to cover the shortfall in the future.
Meanwhile, Peart's opposition colleague, Dr Peter Phillips, said the state and use of the CDF since its inception was "an indictment on all of us and the political system".
"It was designed to prepare our society and economy for a time when the bauxite which we have been blessed with would have been exhausted," Phillips said.
"The crisis is upon us now and we have not a penny to spend on our long-term development options," Phillips added, urging that it was time for Jamaica to plan for a post-crisis economic model.
The finance minister described as "a tragedy that we have not sought to replace that depleting resource with capital that you can discern and you can see".
With demand and prices down for bauxite, and only one of the four bauxite plants still open in the country, Jamaica is projected to earn just more than $130 million from the industry this year, down from $1.5 billion in former years.
daraine.luton@gleanerjm.com
http://www.jamaica-gleaner.com/gleaner/20090702/news/news2.html
Canada seen worst of G8 not curbing climate change
Wed Jul 1, 2009 11:55am EDT
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By Daniel Flynn
ROME (Reuters) - With only five months to go until a new global pact on climate change, none of the Group of Eight nations is doing enough to curb global warming, with Canada and the United States ranking bottom, a study said on Wednesday.
The "G8 Climate Scorecards," compiled by environmental group WWF, said even the greenest members of the rich nations' club -- Germany, Britain and France -- were not on track to meet a "danger threshold" of limiting temperature rises to below two degrees Celsius.
G8 leaders gather in Italy next week to discuss the world financial crisis and climate change, hoping to make progress toward a new pact on global warming due to be signed in Copenhagen in December to replace the 1997 Kyoto deal.
They will be joined by members of U.S. President Barack Obama's Major Economies Forum in a bid to forge broad consensus.
"While there might be a bailout possibility for the financial system, no amounts of money will save the planet once climate change crosses the danger threshold," WWF head James Leape wrote in the foreword to the report.
Wednesday's annual G8 scorecard singled out Canada, saying Prime Minister Stephen Harper's conservative government had not implemented a plan to curb emissions, already among the highest in the world per capita and steadily increasing. Canada was not even close to meeting its Kyoto agreements, the WWF said.
The report praised U.S. President Obama for prioritizing clean energy in his economic recovery package and promoting green legislation, but said U.S. per capita emissions were among the highest in the world and were projected to rise.
"There has been more action in the U.S. in the last four months than in the last three decades -- a trend that will hopefully continue," the report said.
Obama's government has not embraced the 2 degree Celsius goal adopted by the European Union. Temperatures have already risen by 0.7 percent since the start of the industrial era.
"In order to avoid or reduce the risk of catastrophic climate change, G8 leaders must agree to do everything they can to stay below 2 degrees," said Kim Carstensen, leader of the WWF's Global Climate Initiative.
GERMANY TOP, THEN BRITAIN
Top of the G8 rankings came Germany, followed by Britain. The WWF praised Berlin for promoting renewable energy and an ambitious target of cutting greenhouse gases by 40 percent by 2020, though said this lacked clear plans for implementation.
"There is no reason to celebrate," said Regine Guenther, director for climate change, WWF Germany, adding that emissions needed to be cut by 95 percent by 2050. "This would be essential to keep global temperature rises well below two degrees."
Britain has already more than achieved its Kyoto pact targets due to a transition from coal to gas-fired power stations in the 1990s, but there was room to cut emissions in transport, power generation and services, the report said.
France has low emissions per capita for an industrialized nation due to its reliance on nuclear power, which provides more than three-quarters of its needs. The WWF does not support nuclear power due to concerns over safety and radioactive waste.
G8 host Italy has low emissions compared to G8 partners due mainly to the structure of its economy, the WWF said, but emissions were rising and Prime Minister Silvio Berlusconi's government was not making headway to meeting Kyoto obligations.
(Editing by Elizabeth Fullerton)
http://ca.reuters.com/article/domesticNews/idCATRE5603M420090701?sp=true
Hindalco closes Novelis plant in UK, to recast capex plan
Nevin John & Abhineet Kumar / Mumbai July 2, 2009, 1:42 IST
Aditya Birla group flagship firm Hindalco Industries has decided to trim its overseas operations and is restructuring its capital expenditure in India in an effort to stabilise operations.
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As part of this overall plan, Novelis, which Hindalco acquired for $6 billion in 2007, is closing its sheet mill at Rogerstone in the UK, involving 440 job losses.
Sunirmal Talukdar, Hindalco's chief financial officer, confirmed the closure, saying the decision was forced by falling demand.
Other company sources said two Novelis mills in Canada were also facing closure.
Earlier this year, slumping copper prices and demand forced Aditya Birla Minerals, another Hindalco subsidiary, to close its Mount Gordon copper mine at Queensland in Australia.
Company sources said the factory at Mount Gordon would continue to process stockpiles of ore and was likely to produce 1,800 tonne of copper concentrate per month for about 12 months.
Novelis’ net loss widened to $1.91 billion in 2008-09 from $117 million in 2007-08, primarily on account of $1.5 billion impairment charges and unrealised mark-to-market losses of $519 million. The company's net sales dropped 9.5 per cent to $10.18 billion in the same period.
Mumbai-based analysts said Novelis' near-term profits were also under pressure from cyclical weaknesses in North America and Europe, which accounted for 70 per cent of its sales.
Can-sheets and foils and packaging, which together account for 60 per cent of Novelis’s business, are also in the shadow of a downturn, especially after customers like Ball and Rexam closed their units.
Meanwhile, Hindalco is expecting to recast it capital expenditure of Rs 25,000 – 30,000 crore over the next four years. “Since capital goods prices have come down, the company is expecting a savings of 15 to 16 per cent on its capex. But it is not reducing the capex, instead it is planning additional capacity with the same capex,” said Hindalco Managing Director Debu Bhattacharya.
The company, which plans to raise Rs 2,400 crore through a qualified institutional placement (QIP), has tied up for funds for its prestigious Rs 5,300-crore Utkal Alumina project. Bauxite mining for the Utkal project, however, has been delayed six months for want of funds.
Jharkhand Aluminium, another greenfield project, has also been delayed a year owing to financing issues.
Hindalco is now looking for a joint debt raising programme for its greenfield projects, said company officials.
Talukdar said the cash and cash equivalents of Rs 5,000 crore on the books would help the company to execute projects on time.
Analysts, however, feel that Hindalco and Novelis would be stretching the balance sheet if they draw up further fund-raising plans. The group already has a consolidated debt of $5.2 billion (about Rs 25,000 crore), of which Novelis alone accounts for $2.4 billion (about Rs 11,500 crore).
Hindalco alone has Rs 13,000 crore of debt, of which about Rs 4,800 crore is due in four years and Rs 5,000 crore is being paid in installments till 2013-14. The remainng debt is for working capital.
Hindalco shares were down 3.53 per cent at Rs 83.40 on Wednesday, when the Sensex gained over 1 per cent.
http://www.business-standard.com/india/news/hindalco-closes-novelis-plant-in-uk-to-recast-capex-plan/362666/
Mini gold contracts to tap household stock
Bloomberg / July 2, 2009, 2:45 IST
National Spot Exchange, India’s biggest bourse for trading physical gold, has launched contracts in small denominations, aimed at households in the world’s largest consumer of the precious metal.
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The exchange offered contracts in sizes from 8 gm to 1 kg starting yesterday, Anjani Sinha, managing director, said. Presently, the bourse only trades imported gold bars in sizes of 100 gm and 1 kg, he said.
The Multi-Commodity Exchange of India Ltd and the National Commodity and Derivatives Exchange Ltd, India’s biggest commodity bourses, only trades gold futures. That forces individuals to buy or sell bullion through jewellers and banks in the physical form. Households in India, where women are the biggest users of gold, have 25,000 tonnes locked away in family vaults, according to the National Spot Exchange.
“Our main aim is to tap the huge household stock,” said Sinha. “There’s no transparent, electronic market with a nationwide reach for spot gold in India,” he added.
India imports about 800 tonnes of gold a year, about a quarter of the world’s production, and more than three-quarters of which are used in jewellery. Still, the absence of a national spot market means jewellers and traders set the benchmark rate using London’s morning/afternoon “fixing”, the price used by some global mining companies to sell their output.
Small-sized gold contracts may not help India become a price-setter in the global physical bullion market as the country’s commodity exchanges are dominated by traders, producers and consuming companies, compared with the 13 million individual investors who trade stocks.
“The penetration of the gold market through exchan-ges in India is still meagre compared with stocks and to that extent it’s early days to say how many households are net-savvy to trade gold electronically,” said Si Kannan, associate vice president at Kotak Commodity Services Ltd. “People in the villages may still prefer to sell to a jeweller.”
Gold climbed to more than $940 an ounce in Asia, heading for a third quarterly increase, as the weakening dollar fuelled demand for bullion as a store of value. Immediate- delivery gold dropped 0.3 per cent to $934.97 an ounce.
August-delivery bullion on the Multi Commodity Exchange in Mumbai dropped 0.6 per cent to Rs 14,515 per 10 gm. Gold traded in Indian rupees has gained 13 per cent in the past year as the currency weakened on concerns that foreign investors would withdraw funds from emerging markets.
About 25 kg of gold chan-ged hands on the first day of the new contracts, Sinha said later today.
High domestic prices and increased supply of scrap jewelry has lead to a nine-month slump in Indian imports. Purchases in the first three weeks of June were 8 to 10 tons, compared with 17 to 18 tons in the year-ago period, according to the Bombay Bullion Association Ltd.
Indian consumers recycle about 150 tons to 200 tons of gold annually, Kannan said. Scrap supply in the first quarter of 2009 surpassed the year-earlier quarter because of record domestic prices. “This year, recycled gold would range around 25 percent of gold consumption, which would be about 700 tons,” he said.
Sellers using the National Spot Exchange will take their gold to approved refineries which will turn it into bars of international standard purity, Sinha said.
http://www.business-standard.com/india/news/mini-gold-contracts-to-tap-household-stock/362701/
Other News
ECB norms liberalised for Special Economic Zones
Special Correspondent
NBFCs involved in financing infrastructure sector allowed to avail of ECBs from multilateral, other financial institutions
NEW DELHI: In a significant liberalisation, the Government has modified its policy on external commercial borrowings (ECBs) to suit the funding requirements of corporates, developers of integrated townships and special economic zones (SEZs) and non-banking financial companies (NBFCs) engaged in infrastructure development.
According to an official statement here, the changes in the ECB policy have been carried in consultation with the Reserve Bank of India (RBI) in keeping with the evolving macroeconomic environment, sectoral requirements and global developments.
As per the extant policy, while the utilisation of ECB proceeds for the real estate sector is not permitted, it is allowed for the development of integrated townships as a sector specific measure since January this year. In view of the prevailing conditions, “it has been decided to continue the existing policy of permitting development of integrated township as a permissible end-use, under the approval route, until December 2009,” the statement said.
Likewise, under the current norms, NBFCs exclusively involved in financing of the infrastructure sector are permitted to avail of ECBs from multilateral and other financial institutions and Government owned development financial institutions for on-lending to borrowers under the approval route. This, however, is subject to the condition that the direct lending portfolio of the eligible lenders vis-À-vis their total ECB lending to NBFCs, at any point of time should not be less than 3:1. On review of this policy last month, “it has now been decided to dispense with this condition with effect from July 1, 2009. The proposals, however, will continue be examined by the Reserve Bank under the Approval route, as hitherto.” the statement said.
Infrastructure
In the infrastructure sector, while ECB is permissible for power, telecommunication, railways, road including bridges, ports, industrial parks and urban infrastructure (water supply, sanitation and sewage projects), mining, refining and exploration, units in SEZs are also permitted to access ECBs for their own funding requirements.
http://www.hindu.com/2009/07/02/stories/2009070255591400.htm
Econ survey: decontrol petrol, diesel prices
Thu Jul 2, 2009 12:25pm IST
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NEW DELHI (Reuters) - India should end controls on prices of petrol and diesel and allow entry for private and foreign firms in the energy sector, a finance ministry survey said on Thursday.
Following are some of the reforms that the survey recommends:
ON REFORMS IN ENERGY SECTOR
* Decontrol petrol and diesel prices.
* Develop a policy response system and financial buffer for use when diesel price rise above the oil equivalent of $80/ barrel.
* Allow private entry into coal mining to help reverse the substitution of domestic coal by imported oil and coal.
* List two sick subsidiaries of Coal India Ltd, namely the
Eastern Coalfields Ltd (ECL) and the Bharat Coking Coal Ltd.
* 49 percent of shares of these two entities should be sold to public.
* Management control of the two entities should be transferred to a private party.
* Management control could be transferred via an auction of 26 percent shares of the two entities plus management control package.
* Sell old oil fields to private sector for application of improved/enhanced oil recovery techniques.
* Amend the Atomic Energy Act to allow private corporate investment in nuclear power.
* Frame the rules for private and foreign entry (49 percent FDI) in nuclear energy.
(For full coverage on Budget 2009 click here)
http://in.reuters.com/article/topNews/idINIndia-40751920090702?sp=true
India not to sign binding agreements on environment news
01 July 2009
Jairam Ramesh, the guardian minister for India's shockingly degraded environment, has said development will continue to be the priority over ecological concerns.
The minister of state for environment on Tuesday also asserted a central role for his ministry in global climate change negotiations as well as in the implementation of the national action plan on climate.
Giving an indication of what India's stance would be at the Copenhagen climate summit, scheduled in December to hammer out a replacement for the expiring Kyoto pact, Ramesh said, ''India will not accept any emission-reduction target period. India will not accept any legally enforceable targets. This is a non-negotiable stand.''
Ramesh iterated India's earlier position that the country's per capita emission of carbon dioxide would not exceed that of the developed countries. ''Even at a 9 per cent growth, the per capita emission will be nowhere near that of the developed countries. Per capita calculation is the way to go, as it enshrines the principle of equity,'' he said.
"India cannot and will not take emission reduction targets because poverty eradication and social and economic development are first and over-riding priorities," Ramesh said.
Stressing that the National Action Plan on Climate Change was a domestic effort, the minister said that these efforts would not be subject to international monitoring. ''We reject the notion that what we have decided on domestically requires international monitoring or verification,'' he said.
http://www.domain-b.com/environment/20090701_environment.html
PLoS Medicine: Water Should Be A Human Right
July 2, 2009
In this months PLoS Medicine Editorial, the editors argue that—despite recent international objections— access to clean water should be recognised as a human right.
At the March 2009 United Nations (UN) meetings, coinciding with the World Water Forum, Canada, Russia, and the United States refused to support a declaration that would recognize water as a basic human right. But this flies in the face of considerable evidence that access to water, which is essential for health, is under threat, argue the editors. According to the World Health Organization, 1.2 billion people worldwide do not have access to clean drinking water, and a further 2.6 billion lack adequate sanitation services, and these numbers are expected to rise. The UN has estimated that 2.8 billion people in 48 countries will be living in conditions of water stress or scarcity by 2025.
Three reasons are outlined for why access to clean water should be declared a basic human right. Firstly, access to clean water can substantially reduce the global burden disease caused by water-borne infections. Millions of people are affected each year by a range of water-borne diseases including diarrhea, which is responsible for 1.8 million potentially preventable deaths per year, mostly among children under the age of five. Secondly, the privatization of water—as witnessed in Bolivia, Ghana and other countries—has not effectively served the poor, who suffer the most from lack of access to clean water. As Maude Barlow, senior advisor on water issues to the president of the General Assembly of the UN, has argued, "high water rates, cut-offs to the poor, reduced services, broken promises and pollution have been the legacy of privatization."
Thirdly, the prospect of global water scarcity—exacerbated by climate change, industrial pollution, and population growth—means that no country is immune to a water crisis. The United States is facing the greatest water shortages of its history, and in Australia severe drought has caused dangerous water shortages in the Murray-Darling river basin, which provides the bulk of its food supply.
A human rights framework, argue the Editors, offers what the water situation needs—international recognition from which concerted action and targeted funding could flow; guaranteed standards against which the protected legal right to water could be monitored; and accountability mechanisms that could empower communities to advocate and lobby their governments to ensure that water is safe, affordable, and accessible to everyone.
SOURCE: Public Library of Science
http://www.wateronline.com/article.mvc/PLoS-Medicine-Water-Should-Be-A-Human-Right-0001
How to make the SEZ scheme more attractive
D. Murali
Chennai: While it may be urgent for the IT sector that the Government announces an extension of the tax holiday under the Income Tax Act, 1961 beyond March 31, 2010, to help in mitigating the impact of the economic slowdown and maintaining the competitive edge of this sector, it will be beneficial to the industry if the tax holiday is extended by a block of 2-3 years as compared to piecemeal extension, says Naveen Aggarwal, Executive Director, ICE Tax, KPMG.
This will give enough room to the players in the industry to plan their business and would attract long-term investments, he explains, during a pre-Budget interaction. “Even if the government wants to bring this sector in the tax net, it would be worthwhile to do so in a phased manner. A sudden climb in the tax rate from 11.33 per cent (at present applicable under MAT) to 33.99 per cent may be too steep for the industry to bear.”
The income-tax holiday has been one the industry’s saviour over the years and has played a pivotal role in its success, and one of the sectors that has been worst affected in India by the global recession is the IT/ITES sector, Aggarwal observes.
“This sector has perhaps been one of the biggest success stories in India post the economic reforms of 1991. While a lot of credit for the success of this sector goes to the technical brilliance and the entrepreneurial spirit of a young, ambitious India, eager to take on the world, the Government policies have also played a key role in catalysing its growth.”
Excerpts from the interview.
On SEZ issues.
Relaxation on use of old plant and machinery: To make the SEZ scheme more attractive, the Government should consider relaxing the existing stringent conditions for transition of STP/ EOU units to SEZs. It is suggested that the limit of 20 per cent for transfer of used machinery or plant to the new SEZ unit be increased to 40 per cent. This would grant some flexibility to the industry while preserving the intention of law, in the sense that the majority of the total machinery or plant used in the SEZ unit would still be new.
Government SEZs: In the current scenario, SEZs are not a commercially viable option for small and medium sized enterprises (SMEs), as the minimum space available and investment required in the SEZ are substantially high. As a result, these SMEs are largely deprived of the benefits of the SEZs. In order to address this issue the Government may consider setting up SEZs developed/ operated by it that allow SMEs to acquire space and invest as per their requirements.
Alternatively, the Government may introduce regulations that make it mandatory for the private SEZ developers to reserve a certain portion of their SEZ space exclusively for SMEs.
Formula anomaly: As per recent news articles, the matter of formula anomaly under section 10AA of the Act is reportedly taken care of. Relevant legislative amendments need to be carried out as soon as possible to avoid confusion on this issue.
On other issues.
Refund of taxes and duties: The industry looks forward to expeditious disposal and simplification in the procedures for claiming refund of service tax paid on input services. Alternative schemes such as fixing drawback rates may be introduced which would help in simplifying the procedures.
Applicability of service-tax and VAT: At present both service-tax and VAT are being charged by the tax authorities on development and sale of software in India. It is essential that this controversial issue of dual taxation is resolved at the earliest.
Refund of additional customs duty to countervail VAT: Credit/ refund of additional custom duties paid on imports is available to manufacturers/ traders. This benefit is not available to service providers. Extension of such provisions to service companies would be a welcome move.
While the IT/ITES industry is at the crossroads, awaiting the Budget with bated breath, the present adversity still holds a few opportunities. As some of the biggest companies in the West battle for survival, outsourcing is one of the best ways in which they can achieve further economies in these challenging times. However, in order to help the industry exploit this situation to its advantage, the Government must play its part and fulfil the industry’s wish list. It’s over to the Finance Minister.
http://www.hindu.com/thehindu/holnus/006200907021213.htm
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