Companies & Sectors
Karnataka government is encouraging iron ore production

Our indigenous production of iron ore is suffering badly, as exports have come to a standstill for a couple of years now

It may be recalled that the Supreme Court had permitted mining leases in category A and B mines in April this year. There were 45 mines in category A and 49 in B. In order to facilitate work to recommence the operations, the department of mining held individual meetings with the above category lessees in Karnataka.


While the mines in Karnataka in the above categories can commence their work, subject to compliance of required formalities, mines in Goa are still under the ban.


Out of the above, as many as 15 mines had commenced their operations and have mined about five million tonnes of iron ore, in addition to the production of National Mineral Development Corporation (NMDC).


NMDC has produced 12.89 million tonnes of iron, during April-September 2013, with Karnataka contributing 4.44 million tones and Chhattisgarh 8.45 million tonnes. In order to encourage production and supply of iron ore to starving steel mils and sponge iron producers, Karnataka state government sought approval from the Central Empowered Committee (CEC) to raise iron ore production of certain category A mines, as the Supreme Court has capped it at 30 million tonnes for the year. Actually, local requirements are estimated at 32-36 million tonnes. But, so far, production is down and is estimated at 21 million tonnes only.


Since the Supreme Court had cancelled all 51 mines in Category C, CEC is awaiting the reclamation and rehabilitation plans of category A and B mines, so that a final decision can be made.


Assuming a favourable order from CEC, production could reach only 25-26 million tonnes, leaving a shortfall of 4-5 million tonnes. This will affect the overall production, and any plans for export will have to be postponed for the time being.


The Department of Mines and Geology have also found that, typically, 70% of the iron ore mined is in lumps and only 30% are minimum fines. As such, most steel mills in the state have set up sintering plants and use only iron ore fines in blast furnaces. As a result, NMDC has an unsold stock of more than 2 million tonnes of lumps. They now have to either find the means to use them, or look out for an overseas buyer to export.


Among the leading players in the iron ore mining, Sesa Goa, now part of Sesa Sterlite, stopped mining two years ago, as per Supreme Court Directive. It has now secured the work permit from the Ministry of Environment and Forests (MOEF) to commence its operations in Chitradurga district. This permit is for only year only.


We wonder, why should this be so? Why can't the permit be given to be valid, say, for 3 years or more, if necessary with some periodic inspection? Work in mines should be continuous and can not be subject to interruptions. Final approval from the monitoring committee to resume operations is awaited.


Sesa Goa has the mining capacity of 2.3 million tonnes per year. Fortunately, the MOEF has given the lease for 20 years. In the meantime, the Karnataka forest department has raised a claim for development tax based on invoice value of exports effected by them during 2008-11.They have stated that they would issue a no objection certificate (NOC) only after receiving this payment! In return, the company has disputed this claim asserting that the tax assessment should be valued at "ex-mines" and not based on export invoice.


This impasse has to be resolved urgently and Karnataka forest department should not prevent the work, as this will be detrimental to national interest. We need to bear in mind that our indigenous production is suffering badly as exports have come to a standstill for a couple of years now. Our regular buyers can not afford to "wait" for Indian iron ore supplies and we have to regain these "lost" markets.


(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)


UltraTech Cement Q2 net profit tumbles 52% as outlook remains challenging

Slowdown in infrastructure and household projects results in decrease in profit for the country’s largest cement manufacturer during the September quarter

UltraTech Cement Ltd, India’s largest cement manufacturer, reported a 52% fall in its September quarter net profit on sluggish demand coupled with rising input and energy costs. The Aditya Birla group company said it expects the outlook to remain challenging during FY14.


For the quarter to end-September, the cement maker said its net profit fell to Rs264.1 crore from Rs550 crore while its total revenues from operations declined 4.3% to Rs4521.9 crore from Rs4729.4 crore, same period last year.


"The outlook continues to remain challenging. Demand growth in FY14 is likely to be around 5%, though in the long term growth is likely to be over 8%," UltraTech said in a release.


During the second quarter, the cement producer’s total expenses, including a sharp increase in employee benefit expense and depreciation and amortisation, increased to Rs4,099.7 crore from Rs3,926.7 crore in September 2012 quarter.


At 11.15am Tuesday, UltraTech Cement was trading marginally down at Rs1944.7 on the BSE, while the benchmark Sensex was marginally up at 20,916.


A tale of two Obamacares: Which is right?

Critics of the Affordable Care Act rollout say its technology problems are overwhelming. Defenders point to the states, where the health insurance marketplaces seem to be working

This weekend, I read two very different takes on the three-week-old health insurance marketplace. One was hopeful; the other decidedly not. Both are worth your time.

Writing for the National Review, Yuval Levin explains that he spoke to several long time sources at the Centers for Medicare and Medicaid Services as he tried to understand why things have gone so wrong. This is what he discovered:

The reaction of these individuals to what has happened in the last two weeks is the reaction of people who are coming to realize that their expectations and understanding of web development were mistaken. They believed (as I did too, I admit) that whatever technical problems the exchange sites encountered at first could be cleared up quickly and simply once things got going — that the contractors developing the websites could just respond to problems on the fly, as they became apparent. It is now increasingly obvious to them that this is simply not how things work, that building a website like this is a matter of exceedingly complex programming and not “design,” and that the problems that plague the federal exchanges (and some state exchanges) are much more severe and fundamental than anything they imagined possible.

Levin acknowledges that he is an opponent of the Affordable Care Act, but it would be wrong to dismiss his observations and insights.

One key worry is based on the fact that what they’re facing is not a situation where it is impossible to buy coverage but one where it is possible but very difficult to buy coverage. That’s much worse from their point of view, because it means that only highly motivated consumers are getting coverage. People who are highly motivated to get coverage in a community-rated insurance system are very likely to be in bad health. The healthy young man who sees an ad for his state exchange during a baseball game and loads up the site to get coverage — the dream consumer so essential to the design of the exchange system — will not keep trying 25 times over a week if the site is not working.

The second piece, by the New Republic’s Jonathan Cohn, takes a glass half-full approach. While Cohn does not defend the problems plaguing the federal website, which handles enrollment for residents of 36 states, he praises the way the process is working in the remaining states, which have designed their own enrollment websites and do not rely on the feds.

But if these past two weeks appear to reflect poorly on the federal bureaucracy and the Administration managing it, they shouldn’t reflect poorly on health care reform itself — which, after all, has worked in Massachusetts and seems to be working in the states running their own operations. The success of states like Kentucky and New York and Connecticut and California are important for their own sake: By my count, they constitute about a fourth of the national population. But they are also important for what they show about how the law can work, once the technology piece is in place.

Cohn also thinks time is on the side of those signing up. After all, the open enrollment period extends to March 31 (although folks have to sign up by Feb. 15 to avoid a penalty).

The Obama administration leaked figures to the Associated Press on Saturday night that suggest nearly 500,000 people have created accounts in the state and federal exchanges.
But the selective release of data — site visitors and applications created — continues to keep under wraps information on those who actually enrolled in a health plan. This data, not visits or applications, will determine the success or failure of this venture. Dan Diamond has the best roundup of applications vs. enrollments around.



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