Indian government proposes coal regulatory authority for coal sector

Friday, 02 Dec 2011

Mr Pratik Prakashbapu Patil minister of state in the ministry of coal while replying a question in Rajya Sabha said that the government proposes to set up a Coal Regulatory Authority for coal sector. In this regard, a draft Cabinet Note along with draft Bill, 2010 on setting up of a Coal Regulatory Authority was circulated to various Ministries/Departments for their comments.

The comments of concerned Ministries/Departments have been received. However, it was noticed that some major changes/suggestions have been made by various Ministries/Departments. At present, suitable incorporation of these changes/suggestions is being examined in consultation with the Ministry of Law. Once finalized the draft Bill would be submitted for the approval of the competent authority.

Setting up of a regulatory Authority for coal would require appropriate legislation to be passed by the Parliament. Hence, it may not be possible to indicate the exact time frame for setting up the said authority.

Japanese regulator clears Peabody ArcelorMittal bid for Macarthur Coal

Thursday, 25 Aug 2011

Japan's competition regulator has cleared a USD 5 billion hostile bid for Australia's Macarthur Coal by Peabody Energy and ArcelorMittal.

Macarthur is resisting the AUD 15.66 a share offer, which includes Macarthur's final dividend. Macarthur considers the offer too low and is due to respond to it by September 1.

(sourced from Reuters)

Coal Regulatory Authority proposed in Indian

Friday, 12 Aug 2011

The Coal Regulatory Authority is proposed to be set up to regulate and conserve resources in the coal sector; protect the interests of consumers and producers of coal and for matters connected therewith or incidental thereto. The proposed Regulator is expected to create a more level playing field for all the players in the coal sector and to facilitate faster resolution of issues relating to economic pricing of coal, bench marking of standards of performance, etc.

Mr Sriprakash Jaiswal minister of state in the ministry of coal and statistics and program implementations informed the Lok Sabha that the comments of concerned Ministries/Departments in this regard have been received. However, it was noticed that some major changes/suggestions have been made by various Ministries/Departments. At present, suitable incorporation of these changes/suggestions is being examined in consultation with the Ministry of Law. Once finalized the draft Bill would be submitted for the approval of the competent authority. However, it may not be possible to indicate the exact time frame by which the proposed Authority is likely to be set up.

Mr Jaiswal said that as stated above, the likely benefits of the Coal Regulatory Authority would be more optimal development of coal resources of the country, which would ensure that the Indian coal companies raise their level of competence to be at par with international competitors. As it would also deal with the issues like mining authorization, production and supply of coal, specify & determine the grades/quality of coal, price of coal, and adjudicate disputes amongst producers and consumers, it is expected to protect the interests of consumers and producers of coal and would effectively deal with the matters connected therewith or incidental thereto.

The Minister said that the proposed Coal Regulatory Authority would facilitate more standardized operational norms, establishment of bench marks in safety standards and performance, productivity etc through adoption of best mining practices, which would entail effective resolution of problems confronted by all the stakeholders including coal producing States and coal miners.

Dozens Of Coal Factories Forced To Shut Down In Response To Strict EPA Regulation

August09, 2011
By Dina Spector

Electric utilities announced the closure of dozens of coal-fired plants today in response to new EPA regulations mandating facilities to lower toxic interstate emissions. Among them:

* American Electric Power Company said it would retire nearly 6,000 MW of generating capacity.

* Duke Energy said it would retire its 862 MW factory in New Richmond, Ohio.

* Georgia Power, a subsidiary of The Southern Company, said it would close an 871 MW generator by 2018, 18 years before the end of its useful life.

The nation's utility and coal industries have been battling the EPA since July, after the the environmental agency replaced the Clean Air Interstate Rule with stricter standards requiring coal-fired power plants in 27 states to slash thousands of tons of pollutants that drift across state borders.

The Cross-State Air Pollution Rule has received nothing but negative feedback from the affected energy industry, which argues the stricter federal emission law will result in higher costs for electricity and massive loss of U.S. jobs. The plan will also require billions of dollars to retrofit power plants with clean coal technologies.

According to a study prepared by the National Economic Research Associates (NERA), the legislation is among the most expensive EPA rules ever imposed on coal-fueled power plants that will cause electric rates to skyrocket by as much as 23 percent and lead to nationwide employment losses totaling 1.4 million job-years by 2020.

Power-plant closures are expected to increase in the coming months, as utilities complete their cost analyses of complying with the Cross-State rule, according to Industrial Info Resources. The EPA rule has already forced coal facilities in Ohio, North Carolina, Georgia, and Texas to retire old units, rather burden the expense of installing pollution-control equipment.

The coal industry maintains that the EPA doesn't seem to care about the economic damage new regulations will cause.

“Many of these severe impacts would hit families living in states already facing serious economic challenges,” said Steve Miller, president of the American Coalition for Clean Coal Electricity.

The EPA believes the annual costs to clean up the coal industry and improve air quality throughout the eastern United States are worth the health rewards. The organization estimates that by 2014, the new legislation will have achieved up to $280 billion in annual health benefits, in addition to preventing up to 34,000 premature deaths, 26,000 hospital and emergency room visits, and 240,000 cases of aggravated asthma.

Along with automobile exhaust, The Department of Environmental Conservation (DEC), lists out-of-state emissions as one of the Northeast's most serious air pollution problems, according to a report by City Limits.

The EPA regulations are set to go into effect Oct. 7, 2011, with the first emissions reductions to be phased in as early as 2012.

sourced BusinessInsider

Regulatory uncertainty puts investors off SA mine assets

Feb18, 2011
By Londiwe Buthelezi

Uncertainty about the regulatory framework and the outcome of the nationalisation debate is set to hinder mergers and acquisitions (M&As) in the local mining sector this year, compounding the outlook for the industry.

Investment analysts say the country is unlikely to see any jockeying by investors to plough money into deal making until there is clarity on key policy issues and power supply concerns are tackled.

Major mining companies, on the other hand, are increasingly considering disposals of non-strategic assets. That push partly reflects a bid by some companies to pare back some of the exposure to the risks now associated with the industry.

BHP Billiton Energy Coal South Africa is putting up some of its undeveloped coal assets for sale, and has invited tenders from parties interested in the assets.

Anglo American announced earlier this month that it had completed the sale of its Black Mountain Mining zinc interests in South Africa to Vedanta Resources for cash proceeds of $346 million (R2.5 billion).

Toby Mannock, the head of investment banking at Renaissance Capital, said asset disposals would be commonplace in 2011, if the investment climate was perceived to be increasingly risky, particularly to capital-intense, long-term projects.

He said international mining companies would undertake an extensive risk analysis when deciding to either acquire assets or dispose of interests in any geography.

“However, in South Africa, considerations will likely include technical mining risks like deep level mining, the rand’s volatility, local cost inflation and the political climate (for example, the nationalisation debate).”

Analysts say the country could lose out as investors are swayed by the emergence of new mineral wealth in the western parts of Africa.

Investment analysts say that, with other African countries increasingly revealing commodities in high demand, attention is gradually being diverted away from South Africa, which used to be the magnetic pole for investment in the continent’s mining sector.

South Africa has not seen a major deal in its mining sector since 2007, when Gold Fields acquired all the remaining Western Areas and the South Deep gold mine for R22.2bn.

According to a Zephyr report published by Bureau van Dijk, there were only 38 M&A transactions to the tune of e3.4bn (R33.5bn) in the South African mining sector last year, compared with 28 deals worth e2.71bn in 2009. In terms of value, the 2010 deals put South Africa in the bottom half of the top 10 biggest mining deals by value, behind Canada, Australia, Russia, China, US, Papua New Guinea and Brazil.

Rishon Chimboza, a senior consultant at pan-African investment consulting firm africapractice, said he expected a slowdown in mining M&As because shareholders did not appear to have much appetite to pursue major deals, with all the regulatory approval and price regulation they had to go through.

On the other hand, the picture is more encouraging for junior companies.

Percy Takunda, an analyst at Imara SP Reid, said: “In the junior platinum space there is always room for consolidation. But the problem is that they (junior companies) do not come widely discounted anymore.”

Peter Leon, a partner at Webber Wentzel, said the existence of regulatory uncertainty in the form of a more interventionist revised Mining Charter and the uncertainty around the proposed amendments to the Mineral and Petroleum Resources Development Act were some of the factors already pushing investors to look elsewhere.

This was not only detrimental to the M&A outlook but to investor confidence as well.

“The pending decision of the ANC with regard to mine nationalisation, coupled with the continuing difficulty that some foreign investors have in understanding and complying with black economic empowerment requirements, could hinder investment in the (local) mining industry,” he said.

Leon said clarity was necessary for investors to commit money in mining, particularly with its long lead times and massive capital expenditures. - (sourced:Business Report, www.iol.co.za)

Tags:high-vol (high volatility) met coal, political climate, Pan- African investment, Africanpractice, Mining Charter, technical mining risks, long-term projects, risk analysis, acquire assets,Anglo American Plc, Black Mountain Mining zinc, Renaissance Capital, capital-intense,