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24 leading coal-producing countries. In India, around 70% of the total production is used for the generation of power, while the remaining is used by the steel, cement, chemicals and heavy industries, to name a few. It is estimated that India produces 310 million tonnes of coal annually and imports around 25 million tonnes. In the last five years, commercial energy consumption in India has increased to around 68%. This, however, when seen in terms of per capita consumption, is very low, especially when one compares this with developed countries. At present, the per capita primary energy consumption in India is about 243 Kilograms Oil Equivalent (kgoe)/year. Experts believe that this consumption is very low in comparison with the per capita primary energy consumption in developed countries. One argument that strengthens this belief is the fact that energy consumption has a strong correlation with economic growth. In addition to this, limited reserves of petroleum and natural gas also grant validity to the argument that coal would emerge as a crucial natural resource in the coming years. Not to mention that it is cheap and relatively abundant than other natural resources. Despite such reigning importance of coal, there are many irregularities in terms of lack of clarity of policies of governments and local mafia (some with Marxist leanings), which have squeezed out substantial unaccounted coal from the system. ISSUES AND CHALLENGES One of the serious concerns for India’s coal industry is strong government control. This results in taxes and duties that continue to be Beyond Market 10th Oct ’11 levied on imports and distribution of coal. Besides this, there is also limited private investment in the buying of coal mines as well as supplying coal to customers. Experts believe that the privatization of the sector is important and the easiest way of providing access to this natural resource to companies and other consumers alike. Such has been irregularities in the government policies that foreign investment in the sector is permitted only on a case-to-case basis. Hence, the industry needs pointed and clear reforms. Reforms that address issues related to large-scale investment in increasing mining capacity and improve the quality of coal. Also it is believed that in order to thin the gap between demand and supply of domestic coal, the government should facilitate smooth import of coal. The government’s eleventh plan had a whole range of coal sector reforms such as setting up of a coal regulator, ramping up captive production, commercializing, auctioning of blocks and increasing the share of e-auction, among others. Hardly any of these reforms have been implemented into the system. This has given weight to the oft-repeated assertion that powerful coal lobby is preventing India from emerging as the largest energy producer in the world. Besides these issues, the one indigenous problem that has obstructed the natural production of coal and its equivalents is stiff opposition of Maoists. In India, the Southern and Eastern regions are coal-rich. In these regions in India, there are several pockets where people propagate Marxist ideology. These groups have differences over use of land ownerships, corruption and illegal mining. Due to stiff opposition from these groups, many coal mining projects - both government and private sector companies - have got derailed and stopped midway. The government has been unable to weed out these elements and, hence, these elements pop up abruptly and jeopardize many coal projects in these areas even after most governmental clearances have been acquired by the companies. Recently, a new concern that is serving as a huge obstacle in coal projects is from the government’s side itself. The environment ministry has identified ‘Go’ and ‘No-Go’ areas arguing that forests are being cut at a rapid pace, wildlife corridors are being destroyed and one should be more sensitive towards this. The environment ministry has found many captive blocks under the ‘No-Go’ category. Though corporations promise afforestation for occupying space of dense forest of a region, most of their projects just don’t take off. Industry experts believe that only special recommendations and the passing of a cogent coal bill in the parliament could remove these loopholes in the system. Special recommendations on price reforms for coal and electricity, freeing-up of commercial relations between buyers and sellers, rationalizing quality standards, increasing productivity as well as profitability, attracting investment for the coal industry, enhancing environmental performance and intensifying competition, are pointers that are gaining prominence among industry expertS. It’s simplified...
Now, Commodity Trading Is No More A Puzzle. Commodity trading can be confusing especially if one is inexperienced and lacks the necessary skills to trade successfully. At Nirmal Bang, our team of seasoned analysts with years of experience and in-depth knowledge can help you spot the underlying clues and create the investment strategies that best suit your commodity trading requirements. www.nirmalbang.com Disclaimer: Insurance is a subject matter of solicitation. Mutual Fund investments are subject to market risk. Please read the scheme related document carefully before investing. Please read the Do’s and Don’ts prescribed by Commodity Exchange before trading. The PMS Service is not oering for commodity segment. *Through Nirmal Bang Securities Pvt. Ltd. ^Distributors # For job openings at Nirmal Bang, visit http://www.nirmalbang.com/careers.aspx Prepared by Research Analyst of Nirmal Bang Commodities Pvt. Ltd. REGD. OFFICE: Sonawala Building, 25 Bank Street, Fort, Mumbai - 400 001. Tel: 022 - 39267500 / 7501; Fax: 022 - 39267510 CORPORATE OFFICE: B-2, 301/302, Marathon Innova, O Ganpatrao Kadam Marg, Lower Parel (W), Mumbai - 400 013. Tel: 022 - 39268000 / 8001; Fax: 022 - 39268010 BSE SEBI REGN No. INB011072759, INF011072759 & INE011072759, NSE SEBI REGN No. INB230939139, INF230939139 & INE230939139 DP SEBI REGN. No NSDL: IN-DP-NSDL-136-2000, CDS(I)l: IN-DP-CDSL-37-99, AMFI REGN. No. arn-49454 NCDEX REGN. NO. 00362, FMC Code-0075, MCX REGN. No. 16590, FMC Code-MCX/TCM/CORP/0490, MCX SX-INE260939139, PMS-INP000002981
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Page 4 and 5: 4 PROPHECY OF DOOM The repercussion
Page 6 and 7: 6 The IMF, in its World Economic Ou
Page 8 and 9: 8 There could be further pressure a
Page 10 and 11: 10 Movements In Key Policy Rates In
Page 13 and 14: The Reserve Bank of India has been
Page 15 and 16: Micro analysis. Mega gains. Trading
Page 17 and 18: made it clear that Gujarat is the s
Page 19 and 20: Contact: Sushmita Desai: +91 77380
Page 21 and 22: Honda Siel Cars India Ltd (HSCIL),
Page 23: Despite the immense potential of th
Page 27 and 28: (Janssen) and Lundbeck - that can h
Page 29 and 30: Dena Bank Advances V/s Industry Adv
Page 31 and 32: COMMODITY FUTURES Nickel $28,000/to
Page 33 and 34: FORTNIGHTLY OUTLOOK FOR CURRENCIES
Page 35 and 36: In accordance with the announcement
Page 38 and 39: 38 Beyond Market 10th Oct ’11 Adv
Page 40 and 41: CHANGE IN PRICE AND OPEN INTEREST 4
Page 42 and 43: 42 MOVERS AND LAGGARDS IN MUTUAL FU
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Page 46 and 47: 46 their homework and wait for clea
Page 48 and 49: LEARN THE ART OF COMMODITY INVESTIN
Page 50: Kunal Shah, Head of Commodity Resea

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