Investment Opportunities in India’s Coal Mining Sector

Investment Opportunities in India’s Coal Mining Sector

Coal is the most important fossil fuel in India and accounts for approximately 55% of India’s energy needs. Coal has contributed significantly to India’s industrial heritage ever since the introduction of steam locomotives in 1853 and continues to do so, due to India’s ever-increasing energy consumption and needs.

Through a sustained programme of investment and greater thrust on the application of modern technologies, it has been possible to raise the production of coal from about 70 million tonnes at the time of nationalization in the early 1970’s to about 478.18 million tonnes in 2007. It is envisaged that India’s current coal production of over 450 million tonnes would go over 600 million tonnes by 2012, requiring an investment outlay of upto approximately $15 billion.

Investment Opportunities in India’s Coal Mining Sector

Legislative History

Coal mining was brought under the public sector between 1971- 1973 with the passing of the Coal Mines (Nationalisation) Act, 1973. Nationalization was done in 2 phases; the first with coking coal mines (by The Coking Coal Mines (Nationalisation) Act, 1972, under which coking coal mines and coke oven plants other than those with the Tata Iron & Steel Company Limited and Indian Iron & Steel Company Limited, were nationalized in May 1972) and then with non-coking coal mines in 1973, with the enactment of the Coal Mines (Nationalisation) Act, 1973 (hereafter the “1973 Act”), which continues to be the Central legislation determining the eligibility of coal mining in India.

The 1973 Act categorically states that “no person, other than the central government or a government company or a corporation owned, managed or controlled by the Central Government shall carry on coal mining operation in India, in any form.”

India’s Coal Reserves

As a result of exploration carried out up to the depth of 1,200m, as on April 1 2009, India has estimated hard coal reserves of around 267.21 billion tonnes – one of the richest in the world, of which 105.82 billion tonnes are proven.

Nodal Authority

The Ministry of Coal has the overall responsibility of determining policies and strategies in respect of exploration and development of coal and lignite reserves and sanctioning of important projects. These key functions are exercised through its public sector undertakings, namely, Coal India Limited (“CIL“) and Neyveli Lignite Corporation Limited (“NLC“) and Singareni Collieries Company Limited (“SSCL“).

Coal India Limited

The Coal Mines Authority Ltd. (“CMAL“) was set up in 1973 to operate the nationalized non-coking coal mines. In September 1975, the nationalized coal industry was restructured with the establishment of CIL. CIL now has eight subsidiary companies. At present, with its monopolistic position, CIL accounts for 85% of coal production, followed by SCCL (8.5%), and captive producers (6.5%).

Private Sector Investment

The 1973 Act was amended in 1976 terminating all mining leases on coal held by private lessees to allow (a) captive mining by private companies engaged in the production of iron and steel, and (b) sub-leasing to private parties of isolated small pockets not amenable to economic development and not requiring rail transport.

In 1993, the 1973 Act was further amended to allow captive coal mining in the private sector for power generation, washing of coal obtained from a mine and such other end uses as notified by the Central Government from time to time. Coal gasification and coal liquefaction have also been notified as specified end uses.

In March 1996, the Central Government allowed captive mining of coal for the production of cement. The restriction of captive mining does not apply to state-owned coal mineral development undertakings. Commercial coal sales can legally only be undertaken by and through public sector coal companies (and their subsidiaries) and coal produced from captive mines by the private sector cannot be sold on the open market.

In February 1997, the cabinet approved a proposal to amend the 1973 Act to allow non-captive coal mining, which met with stiff opposition from trade unions, who expressed concerns that pre-nationalization ills like unscientific mining practices, environmental degradation and labour exploitation, would re-occur. Due to this, it took at least three years for the Bill to be re-formulated after taking care of the concerns of the trade unions, and it was introduced in Parliament in 2000. The Bill is, however, yet to be passed.

Foreign Direct Investment

Currently, foreign direct investment has been allowed upto 100% under the automatic route as follows:

Coal and lignite mining for captive consumption by power projects, iron, steel and cement units and other eligible activities permitted under and subject to provisions of the 1973 Act;

Setting up coal processing plants like washeries subject to the condition that the Indian company will not undertake coal mining and will not sell washed coal or sized coal from its coal processing plants in the open market. In addition, the Indian company will supply the washed or sized coal to those entities who are supplying raw coal to coal processing plants for washing or sizing.

Allocation of Coal Blocks

Under the existing provisions of the 1973 Act, coal blocks for captive mining are allocated to public/private companies engaged in the manufacture of iron and steel, generation of power, coal washery and production of cement. Allocation of captive mining blocks is decided by an inter-ministerial and intergovernmental body known as the Screening Committee, headed by the Secretary, Ministry of Coal.

Though there are detailed guidelines for the allocation of coal blocks (as well as for blocks for underground coal gasification mines), it is now proposed to introduce an auction-based system through competitive bidding as a selection process for allocation of coal blocks for mining for captive consumption.

As on December 31, 2009, the Ministry of Coal has effectively allocated 208 coal blocks, of which 84 coal blocks have been allocated to the power sector. So far production has commenced in only 25 blocks.

Under the captive dispensation framework, a company engaged in specific end use, viz. power, cement, washery, steel, etc. can apply for an allocation of a captive coal block. Further, company(ies) engaged in any of the approved end-uses can mine coal from a captive block through an associated coal company formed with the sole objective of mining coal and supplying the coal on exclusive basis from the captive coal block to the end-user company(ies), provided the end-user company(ies) has at least 26% equity ownership in the associated coal company at all times.

In addition, there can be a holding company with two subsidiaries, i.e., (i) a company engaged in any of the approved end-uses, and (ii) an associated coal company formed with the sole objective of mining coal and supplying the coal on exclusive basis from the captive coal block to the end-user company, provided the holding company has at least 26% equity ownership in both the end-user company and the associated coal company. Thus, in view of the permitted ownership structures, investors may consider several collaborative options and strategies within the guidelines.

General Conditions of Allocation

Coal blocks are generally awarded subject to compliance with several conditions including that:

the allocation is made to meet the coal requirement of the permitted end use project and is meant for captive use in the allocate company’s own specified end-use projects or that of associates/end use company(ies) in case of a mining company.

Coal production from the captive blocks is required to commence within 36 months (42 months in case the area falls under forest land) of the date of allocation in opencast mine and in 48 months (54 months in case the area falls under forest land) from the date of allocation in the underground mine.

In respect of fully explored blocks, the allocatee company will need to buy the geological report from the Central Mine Planning & Design Institute Limited within 6 weeks of the date of allocation.In respect of an unexplored block, the allocation company will need to apply for a prospecting license within 3 months of the date of issue of allotment. Exploration would need to be completed and a geological report prepared within 2 years from the date of issue of prospecting license.

In respect of explored blocks, the allocatee company would need to submit a mining plan for approval within six months.In respect of unexplored blocks, the mining plan should be submitted for approval within two years and six months from the date of issue of the letter of allocation.
The allocate company would also have to make its own arrangement for transportation of coal mined.

In addition to the above, the allocate company would need to approach the Central Government/concerned State Government for necessary permissions/clearances, etc., for attaining mining rights and related matters (for example, environmental clearance, forest clearance, land acquisition, etc.), a process that could take between 2 to 5 years. While building a coal mine and the accompanying infrastructure is indeed a time-consuming process, it should, however, be borne in mind that normative timelines for commissioning of coal blocks are far higher in India compared to international benchmarks as approvals are required at multiple stages from various agencies.

The Government is considering a slew of measures and reforms to combat this, with the objective of giving faster approval to coal projects (including providing alternative coal blocks to projects that do not get environmental clearance).

It is to be noted that the Central Government periodically monitors and reviews the development of allocated blocks as well as end-use plants by coal companies. Wherever delays are noticed, show cause notices for de-allocation or advisories are issued to the coal companies cautioning them to bring the coal blocks into production as per the guidelines and milestones chart. Allocation/mining lease of the coal block may be canceled, inter-alia, if it is determined that progress of coal mining project or implementation of specified end uses is unsatisfactory, or breach of any conditions of allocation.

Mining lease

The allocatee company will be required to obtain a coal mining lease from the concerned State Governments under the Mines and Minerals (Regulation & Development) Act, 1957. State Governments can grant coal mining leases only with the previous approval of the Central Government. Before the approval of the Central Government is accorded, the allocatee mining company is required to get its mining plan for the proposed coal mining area approved from the Central Government. Coal mining leases are now granted for 20-30 years initially and can be renewed for a further period of 20 years with the previous approval of the Central Government. Coal mining leases are ordinarily subject to a ceiling of 10 sq. kms. of area.

High Potential in Kimberley Mine Dumps

High Potential in Kimberley Mine Dumps

History of the Kimberley Diamond Fields

South Africa’s first diamond was found in 1866 in the Northern Province, along with the Orange River banks. Following the discovery of the diamond, there was an extensive diamond rush, with thousands of hopeful prospectors flooding the area in search of alluvial diamonds along the river’s banks as well as by the banks of the nearby Vaal River.

High Potential in Kimberley Mine Dumps

Within a few years, several large diamonds were found, among them one located on a farm called Jagersfontein, which later became a famous diamond mine. After a number of discoveries, the area became known as Beaconsfield, which is today a suburb of Kimberley. One year after the discovery of the Jagersfontein diamond, the Kimberley and De Beers pipes were discovered nearby Bultfontein, and similar discoveries were made at farms such as Benaauwheidsfontein, Dorstfontein, and Vooruitzicht. A fifth was found 20 years later, known as the Wesselton pipe.

While the pipes were initially worked by individuals, as the depth of the digging increased a more effective solution became necessary. In 1888 the De Beers Consolidated Mines came into being, under the ownership of Cecil John Rhodes, a combination of the Kimberley and De Beers Mines.

In 1897, the rights to dig the Kimberley Mines were bought by a new company – Kimberley Mining Limited (KML). They mined until 1914, using a method known as opencast pit mining. This continued until World War I, in 1914. After the war ended in 1918, the mine was simply maintained for the next 8 years. At that point De Beers Consolidated took charge, but other than a few samplings of the mine’s contents, once in the 1950s and again in the 1980s, the mine has lain dormant. In 2002, the New Diamond Corporation (NDC) took control, but without funding the dumps and the mine became available. Today the Meepo Investment Consortium, part of the New African mining operations, has the rights to both the Caravan Park Dumps and the Kamfersdam Dumps of the Kimberley mines.

Town of Kimberley

Kimberley itself was established in 1871 following the diamond discoveries, and the town’s growth was large as a result of the various mines built in the surrounding area. The town is named after kimberlite rocks – geologic volcanic rock formations that occur in vertical pipes, and which contain diamonds.

Over time, the formations erode and the diamonds are carried downstream by rivers and streams to collect in alluvial diamond deposits. Not all kimberlites contain diamonds, and of those found not all are of sufficient quality or quantity to attract interest. However, the alluvial diamonds found are usually of higher quality than those found inside the kimberlite pipes – because by the time the alluvial diamonds are discovered in their riverbed locations, low-quality stones have been destroyed by the river’s current and only high-quality stones remain.

One of the world’s premier areas for diamond mining, the Kimberley area is known today globally by members of the industry. It is nearly 500 km from Johannesburg and nearly 1,000 km from Cape Town.

Abandoned Mine Dumps

Today, in the area surrounding Kimberley there are a number of abandoned mine dumps that may have economic potential. Three of those dumps are: The Caravan Park dumps, the Kamfersdam dumps and the Eddie Williams Oval dumps.

The Kimberley Municipality owns the mining rights to these areas, which they hope to turn one day into low-cost housing. Diamond Recovery can be carried out at the plant which is secured and has both water and electricity. There is a perfect area for disposing of tailings. Kimberley’s infrastructure means it can be easily reached by airplane, railway or other means of public transport, a great boon to mining the area.

Reliability of Reports

While surveying has been done of late, it is not easy to judge the reliability of the resultant report. Primarily, both tailings and waste material have been lumped together, making the grades somewhat unreliable and although samples were taken from certain areas, the grades in other areas not tested could be vastly different.

Today’s successful diamond recoveries from the Kimberley tailing dumps could be indicative of poor techniques used initially in the diamond recovery plants of the previous century. Another possible explanation is that previously the material was ground too coarsely and the smaller stones were not released or that the poorer graded material was dumped along with the tailings. As an experienced investor in New Africa Mining, I would say that this material’s diamonds, through the processes of weathering, have been released and are turning up in great quantities, also increasing the number of diamonds were recovered.

Caravan Park dumps

West of the Kimberly Mine Museum, these dumps hold material originally mined from the Kimberley mine – one of the biggest mines that existed as the 19th century drew to a close – from 1871 until 1914. The diggers mined to an ultimate depth of 1,097 meters.

The caravan park sits on top of material that is between 1 and 2 meters thick, and as it contains some 595,000 tons of tailings, graded 9 cpht, there are approximately 53,550 carats worth of total diamonds located in the grounds here, with the largest diamond recovered from this dump so far weighing in at nearly 23 carats. In 2005, the dumps were mined for a total of 187 days and 1,122 hours. A total of 74,800 tons were mined and 4,874.28 carats were recovered at an average grade of 6.7 cpht.

Estimates are that some 42% of the original dump material exists, which means that there is extraordinary potential for mining and a great return on the investment it will require to bring these mines to a fully active working state.

Kamfersdam dumps

Some six kilometers north of Kimberley, the Kamfersdam dumps hold material from the Kamfersdam mine, first discovered in 1880 and mined until 1914, when World War I broke out. By that time it had been mined to 104 meters deep. The Kamfersdam tailings dumps are all situated next to the abandoned Kamfersdam Mine north of Kimberley.

The historically head grade of Kamfersdam was 28 carats per 100 tons (cpht). The two tailings of this dump total 5.2 meters or 5.4 million tons of tailings, which means there are an inferred.63 million total carats at 12 cpht. If 1 million tons are mined here per year, there should be another 4 – 6 years in which to make use of this resource. Despite the 12 cpht inferred, it is actually quite difficult to ascertain the grade of the material located in this dump, though it can be used for now.

It will be important to discover the actual grade, as well as the average value per diamond carat – especially if it is to be compared with the diamonds found in the Caravan Park dumps so that a true estimate of its economic value can be ascertained. Over the next 4-6 years,mining these dumps should be an extremely lucrative venture, well worth the investment and a reliable source of income and investment return.

New Mining Laws Year After Sago Non-Implemented

New Mining Laws Year After Sago Non-Implemented

The tragic explosion of the Sago Mine in West Virginia on January 2, 2006, which took twelve lives and permanently disabled another, still begs for a rational explanation over 1 year later. The disaster captured the interest of the American public and fostered outrage on the part of lawmakers and bureaucrats alike, while coal mining operators ran for cover.

For not only did the International Coal Group, Inc., which owns and operates the Sago Mine, become the poster-child for unsafe mining practices, it became the source of questions which had not been publicly exposed for decades, while miners’ lives remained in peril.

New Mining Laws Year After Sago Non-Implemented

And questions linger as to why existing federal and state safety laws were overlooked by government agencies and regulations bypassed by the coal industry. Still, there was a knee-jerk reaction for more federal legislation rushed through the halls of Congress and various state houses where new laws were enacted in those mining states which lost miners in 2006.

The direct cause of the Sago Mine explosion has yet to be confirmed by the state of West Virginia, the federal Mine Safety and Health Administration (MSHA), the United Mine Workers Association (UMWA) and independent commissions with reports supposedly forthcoming. 2006 saw the largest percentage increase in U.S. coal mining deaths in 107 years, the industry’s highest number since 1995, and more than double that of the 22 in 2005. Yet, explanations for such an increase are varied, depending upon which interested party provides them.

This writer wrote an extensive report one year ago regarding background on federal regulation of the mining industry, its lack of government enforcement, the industry’s deregulation over the past several decades and the industry’s accelerated recent growth which are all contributing factors to the decline in mining safety.

And although such may help give a historic context of the dysfunction, it offers no confidence whether or not coal mining is functionally in a better place 1 year after Sago. Heightened awareness of negligence, whether blind or intentional, is the first step to increased improvement, but there are many more required to assure miners and their families that their lives are in less danger and remain a priority.

Preliminary reports by the West Virginia Office of Miners’ Health, Safety and Training (WVMHST), the International Coal Group, Inc., the MSHA and independent commissioned studies such as the Mine Safety Technology and Training Commission cite contributing factors to the loss of life in Sago Mine.

But without substantial scientific evidence, 3 bolts of lightning strikes remain the official cause for igniting methane gas causing the explosion. And such remains mere speculation and without foundation to mining experts and scientists alike. At issue, is how lightning could travel over two miles and 900 feet underground through twists and turns on its way to a closed-off section where the miners were located and cause the eventual explosion.

Additionally, the underground mine seals used for the walls were manufactured with materials unable to withstand the minimally mandated 20 pounds per square inch (psi). However, the sustained blast of Sago was 95 psi. Engineers are now experimenting with new composites able to handle over 95 psi. To date, there exists no credible material to handle such an explosion although the MSHA amended the requirement for mine seals to be 50 psi in 2006.

It was the loss of life at Sago Mine as well as the two subsequent West Virginia coal mining deaths but weeks after Sago on January 19, 2006 in a fire at Aracoma Mine, followed by the disaster at Darby Mine No. 1 in Harlan County, Kentucky which took 5 more lives on May 20, 2006, that resulted in the expedited federal Mine Improvement and New Emergency Response Act of 2006. President George W. Bush signed it into law on June 15, 2006. And just weeks after the Sago Mine explosion, West Virginia Governor Joe Manchin executed new mining laws on January 26, 2006 which followed his order for a special investigation by the state of West Virginia into causes of the Sago disaster.

By February 7, 2006 the WVMHST announced the provisions of its emergency regulations mandated by the legislature. They included providing emergency shelters within 1,000 feet of where miners are digging coal; inspection of air supplies daily and reporting results to the state; installation of caches of emergency air supplies equal to 30 minutes of walking time; wireless communication devices capable of reaching the surface through text, voice and by location.

Similarly, Kentucky passed legislation which became effective July 12, 2006 as it suffered a total loss of 16 miners in 2006. The law includes such changes as requiring mine managers to report a serious injury or fatality to state officials within 15 minutes, requires 2 air packs for each miner and provides for escape drills to be conducted every 90 days. Kentucky also now has the power to fine mine operators for violations and to increase from 2 to 3 the number of underground inspections annually.

Meanwhile, the U.S. Congress swiftly cobbled together its own revised mine safety regulations, the first since 1996, after its hearings on Capitol Hill in January 2006, following the Sago Mine explosion and the Aracoma Mine fire fatalities.

The federal law revisions include providing 2 hours of emergency air supplies per miner, plus caches of air packs with an additional 2 hours of air per miner. Previously, only 1 hour of air per miner was required. Mine operators must report a disaster within 15 minutes whereas previously there was no time limit. Two separate and protected communications systems are required. Previously only one was required. Wireless communication and miner tracking systems are required to be operational within three years of June 15, 2006.

Additionally, two experienced rescue teams must respond to mining accidents within 1 hour as opposed to the previous 2 hours and the development of training of emergency response and evacuation plans have been enacted. The MSHA has also added approximately two dozen more federal mining inspectors and mandates a change in its violation fee structure. Unfortunately, there remain less federal inspectors than the U.S. had in 1997.

The federal government is also now given the authority to request an injunction to shut down those mines which have refused to pay final violations. But the appeals process remains lengthy and during such process mines may remain open indefinitely, regardless of aggravated negligence. And the aggregate fines remain benign or seemingly small for an industry which set historic revenue records in just the first nine months of 2006.

“Dramatic changes in our mine safety laws will only protect our miners if MSHA is displaying real teeth in carrying out and enforcing our new requirements,” this according to Senator Jay Rockefeller (D-WVA) on Capitol Hill with the MSHA in the first week of December 2006. He and Senator Robert Byrd (D-WVA), both predominantly responsible for the amended federal mining law of 2006, met with the MSHA and a bi-partisan committee in order to ensure industry compliance of the new law and to ask the agency if it has enough funding to implement the provisions of the new Mining Act and its safety measures.

As of January 2007, there are no new air packs available. Yet, mine operators believe they have satisfied the new regulation as the law only requires purchase orders, not receipt of air packs, as proof of compliance. Mine operators have been told that air packs are on back-order for 1 more year, although a German manufacturer has 6,500 units readily available. And the Self-Contained Self-Rescuers (SCSR) are the same type of devices used since 1977, when the first major underlying changes in mining safety laws were enacted.

But strengthening seals, improving breathing technology, building refuge chambers and creating communications and tracking technologies have thus far only been appropriated $10 million for the necessary research and engineering evaluations and thus remain to be implemented. And again, a new round of Congressional hearings on mining safety has been called for in 2007, this time by Congressman George Miller (D-CA), the new Chairman of the House Committee on Education and the Workforce.

Idly standing by waiting for the federal government to fund the necessary changes in the law or waiting for mine operators to police themselves in the meantime are both unrealistic and foolish premises. J. Davitt McAteer, former had of the MSHA (1994-2000) and now an expert advisor to West Virginia Governor Manchin, believes that, “Default steps or common sense while the industry waits for technology to be improved have not been taken.” What caused the explosion and what caused the disaster, according to McAteer, are distinct.

The lack of explosion proof seals, defective air packs, lack of communication devices, delay in rescue response and non-existent tracking capabilities were preventative measure which could have been put in place long ago. And Cecil E. Roberts, President of the UMWA, has called upon the MSHA to regulate evacuations during the approach of electrical storms, as long as questions remain as to the exact cause of the Sago Mine explosion.

Sadly, on September 7, 2006, Sago Mine’s operator, ICG, Inc., was again cited by the WVMHST for providing its miners with defective SCSR breathing apparatus. The devices had faulty heating indicators. 6 out of 50 had been exposed to temperatures over 130° F. Disturbingly, said violations only became public knowledge three months after they were served.

The Benefits and Compromises of Living in a Mining Community

The Benefits and Compromises of Living in a Mining Community

Mining is a job of real men. It pays well but it requires toughness of heart and character because it necessitates great skills aside from a lot of risks and plenty of moments in seclusion involved.

There are three conditions that are applicable to a mining employment contract. These are the residential mining, Fly In – Fly Out (FIFO), and Drive-In Drive-Out (DIDO) terms. In residential mining, you will be working in the mine while you reside in a house that you own or rent. If your house is very far from the site, you need to rent a house in a community near the mine so that you can report for work and go home to your own place every day or as your shift ends.

The Benefits and Compromises of Living in a Mining Community

FIFO and DIDO are different. In FIFO, your company will fly you into the site to work during the period of your roster. During this time, you will be made to stay in local accommodation that you have to share with fellow mine workers. As your work period ends, the company flies you back to your place for your week off. FIFO rosters can last for two to three weeks with one week off.

A DIDO condition allows you to drive into the site at the start of each roster and drive out of the site when your roster ends.

Many mine workers prefer residential mining because it can keep their families intact. But there are setbacks that lay on the way, and these are the elements that you need to evaluate carefully if you are interested to work in a mining site. Here are the advantages and compromises of living in a mining community:

1. It allows you to live in your own home.

This is the number one advantage of residential mining. You can always go home to your family, rest in your own bed, and enjoy your privacy each day.

2. Residential mining enables you to perform standard working hours.

If you can report for work and go home everyday, you will be allowed a standard 40-hour work week with two days off. This is different from the conditions given to FIFO workers. They are required to work for two to three weeks before they are granted one week off. The availability of standard working hours and rest periods is the number one reason why mine workers choose to move to mining communities.

3. It allows you to establish relationships.

Mining towns are small and they usually make their residents close to each other. Lasting friendships are not uncommon in these places.

4. It is financially rewarding.

Living in the vicinity of the mine site you work for can save you some money which you could have spent on transportation and unnecessary expenses.

5. Residential mining increases your chances for continuous work.

Companies, most especially mines, prefer workers that are always available. It is one of the top reasons why people living near the site almost always find permanent jobs in mining companies.

These are some of the advantages of living in a mining village. They can be well enough for some. Yet, it has a few setbacks which include:

1. High Housing Rentals

Small mining communities are often flooded with workers looking for a place to stay. This sudden influx of people creates an imbalance of supply and demand for living quarters. This can surely result in expensive accommodation costs.

2. Expensive Commodities

Prices of commodities will also multiply because of the abrupt rise of demand against their limited supply.

3. Absence of Educational Facilities

Sending your children to school is a big problem if you choose to live in a remote area where your mining site is located. The same problem is also true with medical facilities. You will find life in a mining community difficult if someone in your family has a medical issue.

4. Harsh Environmental Conditions

Most mine sites are located at the heart of a mountain where rainfall is high and roads are muddy. You should expect to live a less comfortable life when you choose to reside in a mining community.

The Key To Working Capital Financing – Asset Based Lenders

The Key To Working Capital Financing

Wondering how your competition seems to have all the working capital financing they need and you don’t – the key to that answer might just be asset-based lenders and the asset-based lines of credit they offer to Canadian businesses such as yours.

Let’s examine how this relatively new and unique method of business financing can totally alter your business financing success.

The Key To Working Capital Financing

The acronym for this type of financing is A B L; simply speaking its daily cash flow provide against your current, and sometimes now so current assets. What do we mean by that? Simply that this facility allows you to margin your receivables, inventory, and in most cases, should you choose, fixed assets and real estate. You are probably saying to yourself that you could arrange financing on your own are those fixed assets and real estate – but we are talking about using those assets as collateral for your daily revolving line of credit. So you aren’t borrowing, you are not bringing debt on to your balance sheet, you are just leveraging your ‘ assets ‘ (that’s the ‘A’ in ABL!) for daily cash flow and working capital.

And why are we claiming that this type of working capital financing just might be your key to business success? Simply because you have probably found it has been challenging to get the full amount of business credit you need. In some cases, you might have discovered it been a challenge to get business lines of credit of any manner.

So if your competitors are using this type of financing today, who exactly is eligible for it, and is your firm a candidate. The answer is simply that if your firm has a combination of 250k in working capital assets you are immediately eligible for asset-based lines of credit. We would add that firms with smaller asset sizes can still monetize those receivables via invoice financing or discounting, but that’s not our key focus for today’s information exchange.

So now you now the offering are out there. But why should you consider it? Simply because your firm might be in one of a number of special situations – that includes issues such as your need for increased daily operating cash, you wish to merge with or finance an acquisition, you have been unable to obtain inventory financing elsewhere, you are growing too quickly for traditional Canadian chartered banking financing, etc! We are pretty sure you get the picture now!

The benefits of this type of business financing must by now be pretty obvious. It’s all about access to working capital financing and cash flow that you couldn’t access before. Assets that couldn’t be financed are now financeable, and inventory financing, previously limited or unavailable now looms on your growth horizon.

Who are these asset-based lenders, and what is the cost of this financing? We’ll leave that one for another day, but if you want to investigate asset-based lines of credit for your firm ( remember, your competitor probably already has ) then speak to a trusted, credible, and experienced Canadian business financing advisor who will assist you with identifying benefits and the best solution for your current strained needs in business finance.

Yahoo! Finance | What Sets This Finance Website Apart?

Yahoo! Finance

“What Obama Must Say Tonight,” “10 Tax Moves to Make in 2010,” and “Ailing Banks Favor Salaries Over Shareholders,” are all examples of the dozens of articles that could be found today at Yahoo! Finance. Yahoo! Finance is a finance website that offers lots of free information and tools all related to finance. There are many websites today that offers resources and tools related to personal finance and investing, so what does Yahoo! Finance have to offer?

*Free- Although there are some services available for a fee, accessing the Yahoo! Finance website is free and so is the use of many tools.

Yahoo! Finance

*Personalized Updates- If you choose to set up an account, you can get personalized updates when you log on about stocks or companies that you’re interested in.

*Up to Date- This is one of the best things that sets Yahoo! Finance apart. Market indexes and updates are updated frequently and the “news” is fresh.

*At a Glance- You can see Market index averages for the day including the DOW, NASDAQ, S&P 500 and more, as well as graphs showing the trend in these averages for the most recent working day.

What’s Up at Yahoo! Finance?

In addition to the Yahoo! Finance home page, you can find helpful pages on:


-News and Opinion

-Personal Finance

-My Portfolios (if you choose to organize your financial information here)

– A Tech Ticker

On the Investing Pages at Yahoo! Finance:

Find out about “Today’s Markets,” including recent earnings statements, recent stock splits and more.

Mutual Funds, Stocks, ETFs, Options, Industries and Currencies are all explored furher. Find research, converters, calculators, articles and more.

You can also learn more about world stock index levels, world news and exchange rates are under “International.”

“Research and Education” offers a business term glossary, personal tutorials on finance and investing and more.

Of course Yahoo! Finance also offer “Community,” a section where you can chat, ask questions or join groups.

On the Personal Finance Pages at Yahoo! Finance:

Get your personal finances organized at “Banking and Budgeting.” Free trials of online bill pay are available. Frequent offers include free for 6 months and $4.95 thereafter.

More under Personal Finance…




*Real estate

* Family and Income


On the News and Opinion Pages at Yahoo! Finance:

Look for articles on…

*Industry news

*New technology

*Top picks by experts

Creating a Yahoo! Finance Account:

Creating an account at Yahoo! Finance is easy and free. Once you’ve created an account, you can personalize your logon so that the information that is important to you will be displayed including stock prices and relevant news pertaining to companies you are interested in.

The Perks of Yahoo! Finance:

Yahoo! Finance visitors and members enjoy that there’s so much financial information in one place and that the articles and financial charts on Yahoo! Finance are kept up to date. They also like that so many of the services available are free. Visitors also applaud Yahoo! for having limited ads.

Popular Tools at Yahoo! Finance:

There are rate charts and calculators for Mortgage, Home Equity, Savings, Auto Loans and Credit Cards for fixed loans and ARMs. You can see rates across the country as well view rates in your area.

What’s not to love about Yahoo! Finance?

While many users like the non-nonsense format at Yahoo! Finance, others find the finance web sites look to be drab, boring and unexciting with little more than two colors, black and blue, a limited photos.

Still, Yahoo! Finance is recommended as a finance website that has a lot of helpful tools and resources that are well organized, up to date and more than not, free.

How to Choose a Car Finance Broker | Some Useful Tips

How to Choose a Car Finance Broker

Financing a car is a very important process and today with the availability of numerous car finance brokers it has become an easy option to get secure car loans. Today these car finance brokers are also playing a vital role in assisting car buyers.

In fact, consulting and taking help of car broker can definitely be most appropriate option if you don’t have any clue about what to look at according to your budget. A finance broker is the most experienced personnel and clued-up on how to approach the financiers in a way that can persuade them to approve the loan. They usually have good relations and reputation with the lenders as being reliable, and so they know which lenders are likely to be open to a client.

How to Choose a Car Finance Broker

In general, they act as the key source and offer services such as finding a used or brand new car model that the customer wants and within a budget range. At times, these car brokers even assist car buyers in negotiating with a used car seller. However, these days there are many car finance services and making a proper selection is turning out to be a very complicated process. You need to understand that not all car finance services are fair. Therefore, if you are looking to finance a car or choose a car financing service then here are a few important points that you should keep in mind while making a selection:


You must confirm whether your car finance consultant or broker is a member of FBAA or COSL or both of these industry associations. While Finance Brokers’ Association of Australia Ltd. (FBAA) is one of Australia’s leading membership bodies for finance broking professionals, the Credit Ombudsman Service Limited (COSL) is an independent organization that is mainly indulged in handling complaints about finance brokers.

You can easily confirm finance consultant’s membership by searching through their member list. Adding to this, WA Finance Broker License is yet another additional requirement for finance brokers serving in Western Australia. Nevertheless, if you are looking for a finance broker and residing in the state of WA or other states of Australia, it is essential that the broker must hold a WA Finance Broker License. A broker holding WA Finance Broker License entails passing a comprehensive range of checks, educational requirements, and operational requirements.


While selecting a car finance broker also ensure you know about their range of lender accreditations. The range of accreditations held by a broker governs the range of options they can offer. You must note that a broker’s accreditation can not just change the range of finance options available to you, but it may even affect the quality of those options.

Experienced Staff

You must choose car finance service that recruits and retains professional and knowledgeable staff. The broker must be an experienced professional who can demonstrate and explain about why a particular product is highly recommended or even suites your specific circumstance. If possible make sure you even ask for testimonials from previous clients that in turn may help you in the confirmation of their experience.

Services Offered

As mentioned earlier, today there are many financial services available in the market. Therefore, you must find out more about any extra service that a broker can provide. You should expect your financial consultant to supply detailed information about timeframes, and any fees or extra charges related to your finance. The key point is if a broker is being able to clarify the comparison rate of your recommended vehicle finance and the overall cost of your finance package then it is a quality sign of a good finance broker.

These are some important points that can help you in choosing your car finance services easily. Today a lot of responsibility goes along with buying a car and taking financial help through car broker. Just taking care of few essential steps can help you select your car broker and further purchase a nice new or used car.

Lawsuit Financing Companies

Lawsuit Financing Companies

Attorneys, law firms, lawyers, beneficiaries or clients usually form lawsuit-financing companies. Lawsuit financing companies can also provide appeal finance, firm finance, custom finance or estate finance.

Many lawyers and attorneys create lawsuit financing companies based on their experience and the types of cases they encounter the most. Attorneys and lawyers with expertise in personal injury lawsuits or patent lawsuits help by providing cash advances and support in their fields.

Lawsuit financing companies provide many financing options. With a significant monthly fee, a few lawsuit financing companies may help to settle the case faster. Though a large variety of options are available, the plaintiff has to discuss with the attorney which option is best suited to him.

Lawsuit Financing Companies

The lawsuit financing company and the plaintiff can make an agreement of the amount of share the lawsuit financers would obtain after the settlement or the verdict is known. This is called “flat fee”. Apart from the flat fees, the plaintiff has to pay a minimum fee every month, called “recurring fees”, to the lawsuit financing company. This recurring fee can be as low as 2.9% in the case of a few lawsuit financing companies or could be as high as 15% with other companies.

It is the financing company’s decision as to how much to pay as the cash advance. Lawsuit financing companies pay from $1000 to about a million dollars depending on the case.

Every lawsuit financing company would have a team of lawyers to assess the strength of the case. The key is to avoid funding frivolous complaints. Thus the financing companies will scrutinize the complaint and decide the chances of success of the case.

Lawsuit financing companies do not term their cash advances as loans but as investments. The applicant has to repay after the verdict. Usually, the monetary settlement that is obtained after the settlement by the court is larger than the company’s advance. The lawsuit financing company should be paid the principal and the predetermined share of the monetary verdict.

Bad Credit Car Loan Vs Guaranteed Auto Financing – Will You Save Money?

Bad Credit Car Loan Vs Guaranteed Auto Financing – Will You Save Money?

You’re in the market to buy a new car and that’s great. Today most everyone buying a new vehicle will need some form of auto financing and if you find your personal finances or credit are less than perfect, you can still get a very affordable car financing if you know how.

An informed car buyer is a smart car buyer. When you know your auto financing options and you have your car financing set up and approved before you talk to any salesperson, you can walk into a car dealership and negotiate a better deal on your terms without feeling intimidated, regardless of your financial situation.

Bad Credit Car Loan Vs Guaranteed Auto Financing – Will You Save Money?

If you know that you have certain credit challenges, you should understand the differences between bad credit car loans and guaranteed auto financing.

Bad Credit Car Loans…

Bad Credit Car Loans typically have been available through new car dealerships on the purchase of a new car or a pre-owned certified used vehicle. The actual auto loan financing paper-work is handled at the dealership but in general, the bad credit car loan finance contract is sold off to another lender. That lender will maintain and service your loan. Loans typically have a term of 24 months up to 60 months. The downsides to a bad credit car loan are that many franchise car dealerships are not set up to arrange these type loans in-house, interest rates and cost can vary widely and limit your auto purchase choices.

Guaranteed Auto Financing…

Guaranteed Auto Financing differs from a bad credit car loan primarily in that this type financing is offered directly by smaller or independent auto facilities. Your finance contract is provided by the actual auto wholesale dealer and the loan is paid directly to the auto dealer that sold you the car. In other words, you would be financing your car purchase from the company that owns it and sold you the vehicle. Guaranteed auto financing is used for the purchase of used or pre-owned vehicles and not typically for purchasing a brand new car or truck. Loan terms are shorter than more conventional auto loans and they rarely offer terms over 36 months.

The big advantage to guaranteed auto financing is that often no credit check is required to obtain this financing. Payments are normally made weekly and sometimes in person. One disadvantage to this type of auto loan is that many car dealers providing guaranteed auto financing will never report your credit to the credit bureaus. So if you’re making payments regularly and establishing an excellent payment history, this will not be reflected in improving your personal credit profile or your credit score.

Your best approach would be to start now and see what financing options are available for you. There are excellent specialized auto financing services available online today that offer a whole range of affordable car loan programs even if you’ve been turned down for financing or you have poor credit, bad credit or other financial considerations, you’ll be surprised at how they can help you to buy a new car.

You see now that there are major differences between a bad credit car loan and guaranteed auto financing and there are other financing options besides these. Get approved for the best car loan for you first, then walk into the car dealers and negotiate on your terms.

Beyond Aristotelian Monetary Properties

Beyond Aristotelian Monetary Properties

According to Aristotle, money must have the following properties:

  • Durability
  • Portability
  • Divisibility
  • Intrinsic value
  • Intrinsic Monetary Value

So Aristotle regarded intrinsic value — the exchange value money would always have even without being money — as a property without which money became impossible, or at least unsound. However, not only his idea of sound money was wrong as it was also the opposite of the truth: intrinsic value is precisely what makes money unsound. To understand why let us begin by defining money in the least controversial way possible:

Beyond Aristotelian Monetary Properties


Then, let us notice the different meanings that money being “accepted as payment for goods and services and repayment of debts” has to buyers or debt redeemers and sellers or creditors:

  • To sellers and creditors, it means their accepting the money respectively of buyers and debt redeemers.
  • To buyers and debt redeemers, it means the acceptance of their money respectively by sellers and creditors.
  • Finally, let us notice that any buyers or debt redeemers ignoring the acceptance of their money respectively by sellers and creditors would be the same as the lack of that acceptance. Money must already be known even by merely possible buyers and debtors to be “accepted as payment for goods and services and repayment of debts”: it must be socially rather than individually accepted as money. Then, we can complete its definition:


From Aristotle to Adam Smith to Marx to Milton Friedman, we have never made such a distinction between accepting money and knowing about its acceptance by others. Instead, by assuming that monetary acceptance does not require its own social awareness, we have long been sharing the false belief on individually rather than socially accepted money.

While, despite acceptance depending on evaluation, the resulting absence of any actual (socially accepted) form of money makes monetary evaluation unnecessary, whether by sellers, buyers, creditors, or debt redeemers. This possible absence of any evaluation of money then reduces its required exchange value to an intrinsic property of the monetary object itself, hence to just another preexisting reason for its acceptance as money — Aristotle’s “intrinsic” monetary value.

So requiring money to have an intrinsic value results from confusing between individually and socially accepted money: actual monetary value requires no longer individual but instead already social (reciprocally aware) acceptance of its own representation by an object, being thus never intrinsic to that object.

Indeed, monetary history overwhelmingly shows that anything can be money, whether being otherwise valuable or not. So whoever advocates “intrinsic value” as a means of “restoring” monetary soundness must either completely abandon that idea or find something else to “back” it — other than the requirement for money to have such an extrinsic monetary value.

Beyond Aristotle

Additionally, since Aristotle, money has conceptually acquired a myriad of new required properties, like transmissibility, fungibility, or scarcity.


The idea of money being transmissible was alien to Aristotle. This is because money was to him just a physical object, something usually portable but hardly transmissible. Today, money can be a number electronically or optically recorded, something both portable and electronically or optically transmissible.


Unlike transmissibility, fungibility was not alien to Aristotle, despite absent from his required monetary properties. It only means that money must not vary qualitatively, but only quantitatively.


Scarcity was also not alien to Aristotle, despite absent from his required monetary properties. It only means that money must be hard enough to find or produce for preventing the monetary unit from losing value too rapidly, if ever.

Relative Monetary Requirements

Finally, there are historical examples of money partially lacking not only transmissibility, but also each single one of Aristotle’s three first required monetary properties (durability, portability, and divisibility), or even fungibility — as in seashells or feathers — and scarcity — as in bank notes. Indeed:

All those properties are quantifiable.

Money must have only a minimum of durability, portability, divisibility, transmissibility, fungibility, and scarcity, variable according to social development — and sometimes negligible, like the transmissibility of sheer gold.
The quantitatively variable nature of those properties makes them relative monetary requirements. Other such requirements include making theft or counterfeiting difficult and storage easy, none of which mentioned by Aristotle.