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Metal & Mining Newsletter - 06 May to 09 May, 2013

India Infoline News Service/ Mumbai 18:07 , May 09, 2013

The Minister of Steel, Beni Prasad Verma has said that Iron ore and steel are in deregulated sector. Prices of iron ore and steel are fixed by the individual companies based on commercial prudence and general market condition.

Top Stories 

18 Coal India projects get MoEF nod: Reports

18 mining projects of the state miner Coal India received a go-ahead from the government on Monday. Out of these, 14 have received environmental clearances while 4 got forestry clearances.

Ministry of Environment and Forests (MoEF) gave environmental clearances to 14 projects after the Cabinet Committee on Investment meeting convened, reports say.  Coal Ministry and MoEF are working to clear issues remaining on environmental and forestry clearances.

Issues related to land acquisition and rehabilitation and resettlement are being worked out with the concerned state governments.

Reports say that the Coal Ministry estimates these projects to contribute 39.97mn tonnes of production and an investment of Rs. 1347 crore.

Coal supply increases 6.2% in FY13

Domestic News

Coal India FSA has certain clauses

The new Fuel Supply Agreement (FSA) document prepared by Coal India Limited (CIL) had certain clauses which were not acceptable to power developers including NTPC. The issues have been taken up with Ministry of Coal at levels and most of the issues stand resolved. However issues pertaining to supply of coal of GCV below 3,100 Kcal/kg. And Sampling and Analysis Procedure are being actively pursued for resolution.

Ministry of Coal has issued a directive to CIL on 11.04.2013 to sign FSAs with power plants without waiting for Power Purchase Agreements (PPAs).

This information was given by MoS (I/C) Power Sh. Jyotiraditya M. Scindia in the Rajya Sabha.

NMDC fixes domestic prices

The Minister of Steel, Beni Prasad Verma has said that Iron ore and steel are in deregulated sector. Prices of iron ore and steel are fixed by the individual companies based on commercial prudence and general market condition. NMDC Limited is one of the many iron ore producers in the country. Besides NMDC Limited, there are many other public and private sector iron ore mining companies, which supply iron ore to the iron and steel industry in the country.

As per the pricing policy being followed by NMDC Limited, the prices of various products of the mines of NMDC Limited are kept in sync with the prevailing domestic iron ore prices in other sectors. NMDC is fixing its domestic prices keeping in view prevailing iron ore prices in other sectors and demand supply scenario for its iron ore.

In a written reply in the Lok Sabha Verma said, some representations have been received in the Ministry of Steel regarding pricing mechanism of NMDC Limited. Being a Navratna Public Sector Enterprise, the commercial and financial decisions of the company are taken by the Board of Directors of NMDC Limited. Read more...

International News

Fitch revises Yanzhou Coal's outlook to negative

Fitch Ratings has revised China-based Yanzhou Coal Mining Company Limited's (Yancoal) Outlook to Negative from Stable. Its Long-Term Issuer Default Rating (IDR) have been affirmed at 'BBB-'.

The dual tranche USD1bn notes issued by Yancoal International Resources Development Co., Limited and guaranteed by Yancoal were also affirmed at 'BBB-'.

Key Rating Drivers

Weakened credit metrics: The Negative Outlook reflects Yancoal's weakened credit metrics due to deteriorating coal market conditions since Q312. Funds from operations (FFO) gross interest coverage weakened to 4.9x at end-2012 (end-2011: 17.9x), and FFO adjusted net leverage to 3.8x (1.1x), levels which are weak for its current rating of 'BBB-'. Yancoal's earnings in 2012 were also affected by its acquisition of Gloucester Coal in Australia and related integration costs.

However, even after adjusting for any exceptional items in 2012, Fitch is of the view that Yancoal's credit metrics are unlikely to recover to levels that are comfortable for its current ratings before 2015, given the agency's expectations for low coal prices and remaining acquisition-related payments in 2013. Read more...

 



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