Product development
New Mines and Minerals Act
Published
9 years agoon
By
adminIn the concluding part of the article which stated from the earlier month; Dr HR Dandi now covers the new act in detail, the bidding process and its impact on the cement industry.
The Mines and Minerals (Development and Regulation) Act, 1957 regulates the mining sector in India and specifies the requirement for obtaining and granting mining leases for mining operations.
Process in brief
Rule 6: Eligibility for Mining Lease (Net Worth of Company)
(i)Value of Mineral >25 cr: Net worth shall >4 per cent of value of estimated resources
(ii)Value of Mineral <25 cr: Net worth shall >2 per cent of value of estimated resources (not being a individual applicant)
(iii)Value of Mineral <25 cr: Net worth shall >1 per cent of value of estimated resources (individual applicant)
VR = Estimated quantity of resource (tonne), X average price (tonne)
(iv)State government may reserve a mine for cement.
Rule 7: Electronic Auction
(i)Auction shall only through an online electronic auction platform.
Rule 8: Bidding parameters
(i)Reserve price as specified by State Government in tender document shall be value of mineral dispatched (= Mineral dispatched X sale price of mineral as published by IBM
(ii)The bidders shall quote, a percentage of value of mineral dispatched equal to or above the reserve price and the successful bidder shall pay to the state government, an amount equal to the product of ? percentage so quoted; and value of mineral dispatched.
Rule 9: Bidding Process
(i)Auction shall be an ascending forward online electronic auction and shall comprise two round
First Round
(ii)Bidder shall submit Technical Bid (TB) and Initial Price Offer (IPO)
(iii)Initial price offer of Technically Qualified Bidder (TQB) shall be opened
(iv)The top 50 per cent of the of TQB or 5 TQB whichever is higher shall be declared as qualified bidder (QB)
2nd round
(v)QB may submit their final price offer which shall be a percentage of value of mineral dispatched and greater than the floor price:
(vi)Qualified bidder who submits the highest final price offer shall be declared as the ?preferred bidder? immediately on conclusion of the auction.
Rule 10: Grant of Mining Lease:
(i)The preferred bidder shall submit
(a)Ist installment -10 per cent of upfront payment (UP)
(UP= 0.50 per cent of Value of Mineral (VR),
VR = Estimated quantity of resource (tonne) X average price (tonne)
(ii)LOI shall be issued Upon receipt of the first instalment of the upfront payment,
(iii)The preferred bidder shall be considered to be the ?successful bidder? upon
(a)Payment of the second instalment being ten per cent. of the upfront payment;
(b)Furnishing performance security (0.50 per cent of Value of Mineral)
(iv)Mine Development and Production Agreement (MDPA) shall be signed on obtaining all consents, approvals, permits, no-objections and the like as may be required under applicable laws for commencement of mining operations and payment of the third installment (80 per cent of the upfront payment ) subsequent to execution of MDPA
(v)ML shall be granted to the successful bidder and Mining Lease Deed shall be executed by the State Government within 30 days
Grant of Composite Licence
(a)Rule 16: Prerequisites for auction of CL
(i)Approval of the state government (Limestone being notified mineral)
(ii)At least general exploration (G3) has been completed (800 mts for regular habit 400 mts for irregular habit)
(*)Net worth shall >1 per cent of Value of estimated Resources
(b)Rule 17: Electronic Auction/ Bidding Parameters/Bidding Process – Same as for ML
(i)Auction shall only through an online electronic auction platform (c)Rule 18. Grant of CL:
(i)Upon completion of auction the preferred bidder shall submit performance security (0.25 per cent of Value of Mineral)
(ii) LOI shall be issued upon receipt of performance security
(iii) The preferred bidder shall be considered to be the ?successful bidder? upon (a)obtaining all consents, approvals, permits, no-objections and the like as may be required under applicable laws for commencement of prospecting operations; and submitting the scheme of prospecting.
(iv)Composite Licence shall be grated to successful bidder
(v)Licence so as to ascertain evidence of mineral contents as per minerals (Evidence of Mineral Contents) Rules, 2015,
(vi)LOI for ML shall be issued a application of mining lease and 10 per cent of Upfront Payment
(vii) Mine Development and Production Agreement (MDPA) shall be signed on obtaining all consents, approvals, permits, no-objections and the like as may be required under applicable laws for commencement of mining operations and payment of the 2nd installment (10 per cent of the upfront payment)
(viii)Subsequent to execution of the MDPA, ML shall be granted to the successful bidder and Mining Lease Deed shall be signed upon payment of 3rd installment, i.e 80 per cent of upfront payment.
Dilution of regulatory objective – Execution delays on the cards
A significant dilution in achieving the objectives of framing of the law may be observed in the final enactment of the MMDR 2015. The draft rule 6 which formed part of the draft Act published in April 2014 did not see the light of the day upon enactment. Rule 6 states:
?…prior to notification for auction the Government shall (b) obtain conditional clearance on the basis of recommendation of the committee constituted for the purposes of forest clearance under the Forest (Conservation) Act, 1980 and wildlife clearance under the Wild Life (Protection) Act, 1972 or any other law for the time being in force, so as to enable commencement of operations; and (c) obtain all necessary permissions from the owners of the land and those having occupation rights?
Realising the complications in getting NOC from the land owners and various other agencies all state governments opposed this clause. Deletion of this clause has made the new Act at par with old act while it has retained the objective of fetching high revenues for the state. Auction is expected to remain limited to the bidding for the mineral wealth with certain level of exploration on geological axis of UNFC with uncertainty on feasibility or economic axis due to inherent complex nature of land acquisition and approvals for converting them to 111, 112, 221 or 222 level of UNFC.
Poor exploration quality coupled with regional variation – leading to valuation risks of the mineral reserve
Consistency in ROM limestone is depends upon accuracy of limestone evaluation through geological model representing the grade at particular place. Less core recovery coupled with structural complexities induces problems in deciphering the litho-logical boundaries and their grade behavior. In limestone there are many mechanical and geological factors in drilling which can result in poor core recovery, like structural disturbance, discontinuities, clay band, chemical composition, topographic placement, inappropriate drill size, improper anchoring of rigs, high rotation speed. A conservative approach for reserve quantification due to than a specified percentage recovery has both upside and down side effect on the evaluation of limestone, particularly when good limestone deposit is depleting. .
The limestone block which shall come for auction may not have quality drilling. Understanding of core loss, require not only the drilling data but complete structural/ depositional behavior of limestone in that particular basin. While correlating core loss of limestone in various basins, the author has experienced a very complex behavior of limestone not even to basin level, but within sub- basin and semi-basins also. Is not always clay or karst or cavity or structural unconformity but the genesis of secondary or tertiary calcite cementation or crystallisation has also equal impact on core recovery. The description of the same shall be missing in exploration data. The Model Tender document uploaded on Ministry of Mines para 1.5 provide that "The State Government, its employees and advisors have no liability on account to accuracy, adequacy, correctness, completeness or reliability of the Tender Document and any assessment, assumption, statement or information contained therein or deemed to form part of this Tender Document or arising in any way from participation in this tender process." .
This rests the accountability and risks of error in estimates and hence valuation of a reserve on the participating bidder. While this will enhance the number of reserve put under auction earlier than later – utilisation of these reserves or optimization usage remains uncertain..
Stiff competition with other end users – non captive bidder for limestone mines Cement Industry has to compete with different categories of bidder with varied perception, and risk apatite. While a category may be maximum revenue fetcher by adopting selective mining and least concerned for mineral conservation other delivering the best use of mineral a low revenue generator..
First time for cement industry
Grant of ML: Two options, 1. Cement End Use 2. No End use (i)End Use: Cement may have to competitors
(a)Green field ? New projects
(b)Brown field – Expansion of existing capacity
(ii)No End Use (ML/CL) may have following competitors for same block Cement industry
(a)Green field
(b)Brown field expansion
(c)Resource augmentation
(d)Resource optimisation
(corrective)
Chemical / lime industry
(a)100 per cent captive consumption v (b)High grade for captive and low grade for open market sale
(c)Undersize high grade be sold to cement plant as corrective
Steel industry
(a)Other industries
(b)Selective mining for a selective market
(c)Selective mining based on day to day demand
(d)Semi-mechanised for multiple product
(e)Others
Equal participation of all interested parties under the new Act in the auction for limestone reserves calls for the cement companies to build their war chest for some stiff competition from other industries. While the usage of limestone in the non cement manufacturing sector is limited and categorical – valuation of the limestone mines may vary significantly when compared across industries and methodology of mining.
Key decision making factors – Access to mineral may not add cement capacity Exploration Data may be just sufficient to take a mining decision, but will not be sufficient to take investment decision for cement plant. Decision for setting up a cement plant cannot be solely made based on quality and quantity of limestone but it should have a proper quality data, because a cement plant decision will require following minimum important key decision making factors:
(i)Topographic Factors: Plain, undulating, hilly, mountainous, slope, catchment, drainage etc
(ii)Infrastructural Factors: Road, rail, power, water pre project basic amenity etc
(iii)Deposit Factors: Exploration level, quality, quantity, quality of exploration, deposit type, deposit uniformity vertical/horizontal, unconformity, parting, dolomitisation, quality and quantity of overburden, interbred etc
(iv)Mining Factors: Topography, stripping ratio, selectivity, mining dilution, bench height, ultimate pit depth, drainage, geotechnical stability, habitation, infrastructure, drainage and even mine vastu
(v)Environmental Factors: Forest, wild life, sanctuary, eco-sensitive zone, water bodies, protected area, rehabilitation, dump management
(vi)Social Factors: Population, NGO, law and order, custom, land holding etc
(vii) Logistical factors: Transportation mode, connectivity requirement , source of power, fly ash, corrective, additive, competitors, market, etc.
Concluding Remarks
If anything significant that is expected of the MMDR 2015 is the transparency in the allocation of the mineral reserves based on measurable quantitative parameters, participation of the serious end-users with sufficient financial capacity to mobilise resources for putting the natural resources to use, and time bound defined utilisation of the reserves where sufficient and reliable geological data is available for evaluation. Hoarding of reserves is expected to significantly lower.
Cost of acquisition of the mineral reserve for the cement manufacturing companies as well as the ROM cost of the mineral mines is expected to rise moderately if not significantly and hence incremental burden on the end consumer of the cement. The Act ensures government exchequer to get the fair valuation of the reserve while shedding any liability towards the extant of reserve available or accountability towards the expeditious utilisation of the reserve. It also strips the state government of its liberty to prioritise or promote any industry by discretionary allocation of the mineral blocks.
References
i. Working Group on Cement Industry for the Twelfth Five Year Plan
ii.Mines and Minerals (Development and Regulation) Amendment Act, 2015
iii.Minerals (Evidence of Mineral Contents) Rules, 2015
iv.Mineral (Auction) Rules, 2015
v.Mineral ( Non -Excusive Reconnaissance Permit) Rules , 2015
vi.National Mineral Policy -2006
vii.Theory of Auctions and Competitive Bidding- Paul R. Milgrom; Robert J. Weber
viii.Four Issues in Auctions and Market Design – R. Preston McAfee
ix.Economic Comparison of Mineral Exploration and Acquisition Strategies to Obtain Ore Reserves- R.L. Robinson and B.W. Mackenzie
x.Performance of Indian Cement Industry – L. G. Burange and Shruti Yamini
xi.Indian Minerals Yearbook – 2013
HIGHLIGHTS
Due to MMDR 2015, the transparency in allocation process is going to significantly increase.
Cost of acquisition of the mineral reserve is going to rise moderately if not significantly.
The Act ensures government exchequer to get the fair valuation of the reserve. It also strips the State Government of its liberty to prioritize any industry by discretionary allocation of the mineral blocks.
Dr Dandi is Vice President, Head – Business Development & Raw Materials, Reliance Cement.
Co-authored by SK Das, Vice President, Head – Mining & Geology and Tamal Pal, GM, Business Development, Reliance Cement.
… this article is continued from the previous issue of ICR
Advertising or branding is never about driving sales. It’s about creating brand awareness and recall. It’s about conveying the core values of your brand to your consumers. In this context, why is branding important for cement companies? As far as the customers are concerned cement is simply cement. It is precisely for this reason that branding, marketing and advertising of cement becomes crucial. Since the customer is unable to differentiate between the shades of grey, the onus of creating this awareness is carried by the brands. That explains the heavy marketing budgets, celebrity-centric commercials, emotion-invoking taglines and campaigns enunciating the many benefits of their offerings.
Marketing strategies of cement companies have undergone gradual transformation owing to the change in consumer behaviour. While TV commercials are high on humour and emotions to establish a fast connect with the customer, social media campaigns are focussed more on capturing the consumer’s attention in an over-crowded virtual world. Branding for cement companies has become a holistic growth strategy with quantifiable results. This has made brands opt for a mix package of traditional and new-age tools, such as social media. However, the hero of every marketing communication is the message, which encapsulates the unique selling points of the product. That after all is crux of the matter here.
While cement companies are effectively using marketing tools to reach out to the consumers, they need to strengthen the four Cs of the branding process – Consumer, Cost, Communication and Convenience. Putting up the right message, at the right time and at the right place for the right kind of customer demographic is of utmost importance in the long run. It is precisely for this reason that regional players are likely to have an upper hand as they rely on local language and cultural references to drive home the point. But modern marketing and branding domain is exponentially growing and it would be an interesting exercise to tabulate and analyse its impact on branding for cement.
Concrete
Indian cement industry is well known for its energy and natural resource efficiency
Published
2 years agoon
November 18, 2022By
adminDr Hitesh Sukhwal, Deputy General Manager – Environment, Udaipur Cement Works Limited (UCWL) takes us through the multifaceted efforts that the company has undertaken to keep emissions in check with the use of alternative sources of energy and carbon capture technology.
Tell us about the policies of your organisation for the betterment of the environment.
Caring for people is one of the core values of our JK Lakshmi Cement Limited. We strongly believe that we all together can make a difference. In all our units, we have taken measures to reduce carbon footprint, emissions and minimise the use of natural resources. Climate change and sustainable development are major global concerns. As a responsible corporate, we are committed with and doing consistent effort small or big to preserve and enrich the environment in and around our area of operations.
As far as environmental policies are concerned, we are committed to comply with all applicable laws, standards and regulations of regulatory bodies pertaining to the environment. We are consistently making efforts to integrate the environmental concerns into the mainstream of the operations. We are giving thrust upon natural resource conservation like limestone, gypsum, water and energy. We are utilising different kinds of alternative fuels and raw materials. Awareness among the employees and local people on environmental concerns is an integral part of our company. We are adopting best environmental practices aligned with sustainable development goals.
Udaipur Cement Works Limited is a subsidiary of the JK Lakshmi Cement Limited. Since its inception, the company is committed towards boosting sustainability through adopting the latest art of technology designs, resource efficient equipment and various in-house innovations. We are giving thrust upon renewable and clean energy sources for our cement manufacturing. Solar Power and Waste Heat Recovery based power are our key ingredients for total power mix.
What impact does cement production have on the environment? Elaborate the major areas affected.
The major environmental concern areas during cement production are air emissions through point and nonpoint sources due to plant operation and emissions from mining operation, from material transport, carbon emissions through process, transit, noise pollution, vibration during mining, natural resource depletion, loss of biodiversity and change in landscape.
India is the second largest cement producer in the world. The Indian cement industry is well known for its energy and natural resource efficiency worldwide. The Indian cement industry is a frontrunner for implementing significant technology measures to ensure a greener future.
The cement industry is an energy intensive and significant contributor to climate change. Cement production contributes greenhouse gases directly and indirectly into the atmosphere through calcination and use of fossil fuels in an energy form. The industry believes in a circular economy by utilising alternative fuels for making cement. Cement companies are focusing on major areas of energy efficiency by adoption of technology measures, clinker substitution by alternative raw material for cement making, alternative fuels and green and clean energy resources. These all efforts are being done towards environment protection and sustainable future.
Nowadays, almost all cement units have a dry manufacturing process for cement production, only a few exceptions where wet manufacturing processes are in operation. In the dry manufacturing process, water is used only for the purpose of machinery cooling, which is recirculated in a closed loop, thus, no polluted water is generated during the dry manufacturing process.
We should also accept the fact that modern life is impossible without cement. However, through state-of-the-art technology and innovations, it is possible to mitigate all kinds of pollution without harm to the environment and human beings.
Tell us about the impact blended cement creates on the environment and emission rate.
Our country started cement production in 1914. However, it was introduced in the year 1904 at a small scale, earlier. Initially, the manufacturing of cement was only for Ordinary Portland Cement (OPC). In the 1980s, the production of blended cement was introduced by replacing fly ash and blast furnace slag. The production of blended cement increased in the growth period and crossed the 50 per cent in the year 2004.
The manufacturing of blended cement results in substantial savings in the thermal and electrical energy consumption as well as saving of natural resources. The overall consumption of raw materials, fossil fuel such as coal, efficient burning and state-of-the-art technology in cement plants have resulted in the gradual reduction of emission of carbon dioxide (CO2). Later, the production of blended cement was increased in manifolds.
If we think about the growth of blended cement in the past few decades, we can understand how much quantity of , (fly ash and slag) consumed and saved natural resources like limestone and fossil fuel, which were anyhow disposed of and harmed the environment. This is the reason it is called green cement. Reduction in the clinker to cement ratio has the second highest emission reduction potential i.e., 37 per cent. The low carbon roadmap for cement industries can be achieved from blended cement. Portland Pozzolana Cement (PPC), Portland Slag Cement (PSC) and Composite Cement are already approved by the National Agency BIS.
As far as kilogram CO2 per ton of cement emission concerns, Portland Slag Cement (PSC) has a larger potential, other than PPC, Composite Cement etc. for carbon emission reduction. BIS approved 60 per cent slag and 35 per cent clinker in composition of PSC. Thus, clinker per centage is quite less in PSC composition compared to other blended cement. The manufacturing of blended cement directly reduces thermal and process emissions, which contribute high in overall emissions from the cement industry, and this cannot be addressed through adoption of energy efficiency measures.
In the coming times, the cement industry must relook for other blended cement options to achieve a low carbon emissions road map. In near future, availability of fly ash and slag in terms of quality and quantity will be reduced due to various government schemes for low carbon initiatives viz. enhance renewable energy sources, waste to energy plants etc.
Further, it is required to increase awareness among consumers, like individual home builders or large infrastructure projects, to adopt greener alternatives viz. PPC and PSC for more sustainable
resource utilisation.
What are the decarbonising efforts taken by your organisation?
India is the world’s second largest cement producer. Rapid growth of big infrastructure, low-cost housing (Pradhan Mantri Awas Yojna), smart cities project and urbanisation will create cement demand in future. Being an energy intensive industry, we are also focusing upon alternative and renewable energy sources for long-term sustainable business growth for cement production.
Presently, our focus is to improve efficiency of zero carbon electricity generation technology such as waste heat recovery power through process optimisation and by adopting technological innovations in WHR power systems. We are also increasing our capacity for WHR based power and solar power in the near future. Right now, we are sourcing about 50 per cent of our power requirement from clean and renewable energy sources i.e., zero carbon electricity generation technology. Usage of alternative fuel during co-processing in the cement manufacturing process is a viable and sustainable option. In our unit, we are utilising alternative raw material and fuel for reducing carbon emissions. We are also looking forward to green logistics for our product transport in nearby areas.
By reducing clinker – cement ratio, increasing production of PPC and PSC cement, utilisation of alternative raw materials like synthetic gypsum/chemical gypsum, Jarosite generated from other process industries, we can reduce carbon emissions from cement manufacturing process. Further, we are looking forward to generating onsite fossil free electricity generation facilities by increasing the capacity of WHR based power and ground mounted solar energy plants.
We can say energy is the prime requirement of the cement industry and renewable energy is one of the major sources, which provides an opportunity to make a clean, safe and infinite source of power which is affordable for the cement industry.
What are the current programmes run by your organisation for re-building the environment and reducing pollution?
We are working in different ways for environmental aspects. As I said, we strongly believe that we all together can make a difference. We focus on every environmental aspect directly / indirectly related to our operation and surroundings.
If we talk about air pollution in operation, every section of the operational unit is well equipped with state-of-the-art technology-based air pollution control equipment (BagHouse and ESP) to mitigate the dust pollution beyond the compliance standard. We use high class standard PTFE glass fibre filter bags in our bag houses. UCWL has installed the DeNOx system (SNCR) for abatement of NOx pollution within norms. The company has installed a 6 MW capacity Waste Heat Recovery based power plant that utilises waste heat of kiln i.e., green and clean energy source. Also, installed a 14.6 MW capacity solar power system in the form of a renewable energy source.
All material transfer points are equipped with a dust extraction system. Material is stored under a covered shed to avoid secondary fugitive dust emission sources. Finished product is stored in silos. Water spraying system are mounted with material handling point. Road vacuum sweeping machine deployed for housekeeping of paved area.
In mining, have deployed wet drill machine for drilling bore holes. Controlled blasting is carried out with optimum charge using Air Decking Technique with wooden spacers and non-electric detonator (NONEL) for control of noise, fly rock, vibration, and dust emission. No secondary blasting is being done. The boulders are broken by hydraulic rock breaker. Moreover, instead of road transport, we installed Overland Belt Conveying system for crushed limestone transport from mine lease area to cement plant. Thus omit an insignificant amount of greenhouse gas emissions due to material transport, which is otherwise emitted from combustion of fossil fuel in the transport system. All point emission sources (stacks) are well equipped with online continuous emission monitoring system (OCEMS) for measuring parameters like PM, SO2 and NOx for 24×7. OCEMS data are interfaced with SPCB and CPCB servers.
The company has done considerable work upon water conservation and certified at 2.76 times water positive. We installed a digital water flow metre for each abstraction point and digital ground water level recorder for measuring ground water level 24×7. All digital metres and level recorders are monitored by an in-house designed IoT based dashboard. Through this live dashboard, we can assess the impact of rainwater harvesting (RWH) and ground water monitoring.
All points of domestic sewage are well connected with Sewage Treatment Plant (STP) and treated water is being utilised in industrial cooling purposes, green belt development and in dust suppression. Effluent Treatment Plant (ETP) installed for mine’s workshop. Treated water is reused in washing activity. The unit maintains Zero Liquid Discharge (ZLD).
Our unit has done extensive plantations of native and pollution tolerant species in industrial premises and mine lease areas. Moreover, we are not confined to our industrial boundary for plantation. We organised seedling distribution camps in our surrounding areas. We involve our stakeholders, too, for our plantation drive. UCWL has also extended its services under Corporate Social Responsibility for betterment of the environment in its surrounding. We conduct awareness programs for employees and stakeholders. We have banned Single Use Plastic (SUP) in our premises. In our industrial township, we have implemented a solid waste management system for our all households, guest house and bachelor hostel. A complete process of segregated waste (dry and wet) door to door collection systems is well established.
Tell us about the efforts taken by your organisation to better the environment in and around the manufacturing unit.
UCWL has invested capital in various environmental management and protection projects like installed DeNOx (SNCR) system, strengthening green belt development in and out of industrial premises, installed high class pollution control equipment, ground-mounted solar power plant etc.
The company has taken up various energy conservation projects like, installed VFD to reduce power consumption, improve efficiency of WHR power generation by installing additional economiser tubes and AI-based process optimisation systems. Further, we are going to increase WHR power generation capacity under our upcoming expansion project. UCWL promotes rainwater harvesting for augmentation of the ground water resource. Various scientifically based WHR structures are installed in plant premises and mine lease areas. About 80 per cent of present water requirement is being fulfilled by harvested rainwater sourced from Mine’s Pit. We are also looking forward towards green transport (CNG/LNG based), which will drastically reduce carbon footprint.
We are proud to say that JK Lakshmi Cement Limited has a strong leadership and vision for developing an eco-conscious and sustainable role model of our cement business. The company was a pioneer among cement industries of India, which had installed the DeNOx (SNCR) system in its cement plant.
Concrete
NTPC selects Carbon Clean and Green Power for carbon capture facility
Published
2 years agoon
October 12, 2022By
adminCarbon Clean and Green Power International Pvt. Ltd has been chosen by NTPC Energy Technology Research Alliance (NETRA) to establish the carbon capture facility at NTPC Vindhyachal. This facility, which will use a modified tertiary amine to absorb CO2 from the power plant’s flue gas, is intended to capture 20 tonnes of CO2) per day. A catalytic hydrogenation method will eventually be used to mix the CO2 with hydrogen to create 10 tonnes of methanol each day. For NTPC, capturing CO2 from coal-fired power plant flue gas and turning it into methanol is a key area that has the potential to open up new business prospects and revenue streams.