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Thursday, 05 April 12
COAL EXPORT TAX: MATTER OF CONCERN FOR INDIA - SUNIL K KUMBHAT
 COALspot.com - Since the issuance of Indonesian Mining law in 2009, miners have increased their activities in exploring , exploiting and exporting all types of minerals,specially Black Gold –Coal.
In order to regulate the mining sector , the Goverment of Indonesia has announced a series of new mining regulations, including a ban on exports of some unprocessed metals and low-grade Coal from 2014 , which is designed to spur investment in mineral processing .The proposed ban on exports of coal under the 5,700-kcal/kg from Jan 2014 will change the dynamics of the global thermal coal market, which has seen spiralling demand from China and India. Such a ban will have a substantial impact on the thermal coal market, as large amounts of low-quality coal from Indonesia are exported to India and China.
Another Goverment regulation known as GR 24 of 2012 ( Amendment of GR 23 of 2010 ), signed by President of Indonesia on Feb. 21,2012 stipulates that foreign shareholders/ Companies must gradually divest 51 percent of their shares in local mining companies to local investors after the fifth year of commercial production and complete the divestment by the 10th year of production. The divestment regulation resulted from a revision to a earlier GR 23 of 2010 that required foreign shareholders in local mineral and coal mining companies to divest 20 percent of their holdings.
In a latest move The Goverment of Indonesia now plans to impose a tax of 25% on export of coal and base metals during the current year, and increase it to 50% in 2013. The step is to boost investment in the downstream industry of metal and mining sectors. It is also expected to restrict the exports of mineral and ore metal shipment.The date of implementing the regulation and calculating the Export tax is yet to announced.
Indonesian Government is capitalizing on the mining boom driven by high demand of thermal Coal from China and India . Inspite of series of Taxes , the proposed Export tax is designed to restrict the production and also share profit on the minerals being mined. Coal prices are increasing due to huge requirement and inadequate global production capacity. Govt of Indonesia is encashing the Global situation of demand and supply .Coal will remain hot commodity and Indonesia as heart of Coal Boom.
If the proposed tax is implemented , it is definitely cause of serious concern , particularly for Indian buyers. India is a major buyer of Indonesian thermal coal, along with are China, South Korea, Japan .This is a wake-up call for all the foreign miners operating in Indonesia specially for Coal, that gone are the days of soft and flexible regulations.It is also wake up call for country like India that slow environmental ,forestery clearances and land acquisition issues ,if not sorted out will led to stagnating coal production in India which will resultinto increased dependence on imports, specially from Indnonesia , Australia and south Africa.
Never before India has such a high demand for coal, so also environmental consciousness been so high. Both are legitimate & serious issues but the solution is not to clamp down on coal production. India’s soaring energy need is vital for its industrial growth.
The magnitude of growth in power generation in India will necessarily mean that coal demand will remain very strong. Coal will remain life line for Indian economy for coming many decades till identifying an alternative source that can match coal in its accessibility, availability and affordability in the context of scale of capacity addition required in India.
As the situation stands today, India could become the world’s biggest thermal coal importer by 2015 and Indonesia would be one of the Countries to take care of bulk of coal requirement.
India is today one of the fastest growing economies and also has a shortage of power supply. Indonesia is one of the countries with huge natural resources and exporting thermal coal to many countries for use in power plants for generating energy but it is paradoxical that Indonesia is short of energy. Many Indian companies are capable of sharing power technology and setting up mega power plants in Indonesia
Indonesian private companies can buy equity stakes in India’s power plants in exchange for long-term coal supply. Since India is today one of the fastest growing economies and also has a shortage of power supply then such deals can be beneficial to both parties.
Indonesia requires huge investment from foreign investors in infrastructure, Power Generation, Oil & Gas exploration, telecom sector, Port and Rapid transport system. So it is essential to have transparency in all regulations, legal system and improvement in corporate Governance. Indonesia's mining industry is undergoing a regulatory overhaul which may weaken the operating health and financial performance of many domestic mining companies.
Besides increased operating uncertainty, the new regulations of recent past & proposed may also make the mining industry less attractive to foreign investors. Foreign investor is likly to seriouly question the Safety and Security of their investment in mining sector considering the regulations of the recent past. Lack of transparency in the legal process and the risk of regulatory duplication and inconsistencies will continue to act as deterrents to substantial investment ,specially foreign direct investments (FDI).
As the situation stands today next couple of years shall be very challening for foreign companies operating in Mining sector in Indonesia.
The present proposed tax would hit the profits of both domestic and foreign-owned companies and would heavily raise costs for importers.
The market analysts and experts in mining sector are skeptical about all the mining regulations and plans announced in recent past.
By: Sunil K Kumbhat , Jodhpur (Rajasthan) India
Views expressed herein are personal views of the author and not that of COALspot.com.
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Friday, 08 June 12
MINISTER DENIES COAL EXPORT TAX PLAN, ENDORSES RESTRICTIONS - THE JAKARTA POST
The Jakarta post, one of the leading english news paper in Indonesia reported that, Energy and Mineral Resources Minister Jero Wacik has denied that ...
Friday, 08 June 12
NO IMMEDIATE IMPACT ON ADARO'S RATING FROM BEP TRANSACTION - FITCH RATINGS
Fitch Ratings has said that PT Adaro Indonesia's (Adaro, 'BB+'/ Stable) ratings are not immediately affected by its parent PT Adaro Energy Tbk's ...
Thursday, 07 June 12
DRY BULK MARKET FALLS FOR 10 STRAIGHT SESSION ON OVERSUPPLY PROBLEMS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A resurgence of oversupply, coupled with national holidays in various parts of the world has contributed to yet another fall of the dry bulk market ...
Thursday, 07 June 12
COAL EXPORT TAX NOT RATIONAL: MINISTER - THE JAKARTA POST
Trade Minister Gita Wirjawan has criticized as irrational the idea to restrict coal exports by imposing an export tax, According to The Jakarta post ...
Thursday, 07 June 12
BY 2022 PLN IS EXPECTED TO BURN AROUND 125 MILLION TONS OF COAL
COALspot.com - Indonesia's state owned electricity company's (PLN) coal consumption is expected to reach 125.7 million tons by 2012.
Nur Pamudj ...
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- Binh Thuan Hamico - Vietnam
- Mercator Lines Limited - India
- CIMB Investment Bank - Malaysia
- Marubeni Corporation - India
- Banpu Public Company Limited - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Borneo Indobara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Posco Energy - South Korea
- Sakthi Sugars Limited - India
- Lanco Infratech Ltd - India
- Electricity Authority, New Zealand
- Samtan Co., Ltd - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indo Tambangraya Megah - Indonesia
- Global Coal Blending Company Limited - Australia
- Georgia Ports Authority, United States
- Agrawal Coal Company - India
- Mintek Dendrill Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Makarim & Taira - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Meenaskhi Energy Private Limited - India
- Savvy Resources Ltd - HongKong
- Antam Resourcindo - Indonesia
- Bangladesh Power Developement Board
- Petrochimia International Co. Ltd.- Taiwan
- Altura Mining Limited, Indonesia
- Bukit Makmur.PT - Indonesia
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- Ministry of Mines - Canada
- Bhatia International Limited - India
- Metalloyd Limited - United Kingdom
- Formosa Plastics Group - Taiwan
- Videocon Industries ltd - India
- Siam City Cement PLC, Thailand
- The University of Queensland
- Meralco Power Generation, Philippines
- Iligan Light & Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Bhushan Steel Limited - India
- Electricity Generating Authority of Thailand
- Salva Resources Pvt Ltd - India
- Riau Bara Harum - Indonesia
- OPG Power Generation Pvt Ltd - India
- Xindia Steels Limited - India
- TeaM Sual Corporation - Philippines
- Petron Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Transport, Egypt
- New Zealand Coal & Carbon
- Standard Chartered Bank - UAE
- Jaiprakash Power Ventures ltd
- Global Business Power Corporation, Philippines
- Singapore Mercantile Exchange
- Chamber of Mines of South Africa
- McConnell Dowell - Australia
- CNBM International Corporation - China
- Eastern Coal Council - USA
- Kartika Selabumi Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- White Energy Company Limited
- Aboitiz Power Corporation - Philippines
- Star Paper Mills Limited - India
- GMR Energy Limited - India
- IEA Clean Coal Centre - UK
- Vizag Seaport Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Mjunction Services Limited - India
- Aditya Birla Group - India
- Ministry of Finance - Indonesia
- Coalindo Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sojitz Corporation - Japan
- GAC Shipping (India) Pvt Ltd
- Interocean Group of Companies - India
- AsiaOL BioFuels Corp., Philippines
- Kideco Jaya Agung - Indonesia
- Edison Trading Spa - Italy
- Goldman Sachs - Singapore
- London Commodity Brokers - England
- Cement Manufacturers Association - India
- Asmin Koalindo Tuhup - Indonesia
- Australian Coal Association
- PNOC Exploration Corporation - Philippines
- Coal and Oil Company - UAE
- Gujarat Sidhee Cement - India
- Globalindo Alam Lestari - Indonesia
- Deloitte Consulting - India
- Toyota Tsusho Corporation, Japan
- Dalmia Cement Bharat India
- Planning Commission, India
- Latin American Coal - Colombia
- Kaltim Prima Coal - Indonesia
- Renaissance Capital - South Africa
- Merrill Lynch Commodities Europe
- Independent Power Producers Association of India
- Bukit Asam (Persero) Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Indian Oil Corporation Limited
- Siam City Cement - Thailand
- Economic Council, Georgia
- Coastal Gujarat Power Limited - India
- Orica Mining Services - Indonesia
- Thiess Contractors Indonesia
- Kapuas Tunggal Persada - Indonesia
- Anglo American - United Kingdom
- Central Electricity Authority - India
- Energy Link Ltd, New Zealand
- Trasteel International SA, Italy
- ASAPP Information Group - India
- Timah Investasi Mineral - Indoneisa
- Chettinad Cement Corporation Ltd - India
- IHS Mccloskey Coal Group - USA
- Bharathi Cement Corporation - India
- Pendopo Energi Batubara - Indonesia
- Romanian Commodities Exchange
- Grasim Industreis Ltd - India
- San Jose City I Power Corp, Philippines
- Oldendorff Carriers - Singapore
- Sarangani Energy Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Kalimantan Lumbung Energi - Indonesia
- VISA Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Malabar Cements Ltd - India
- Orica Australia Pty. Ltd.
- Ceylon Electricity Board - Sri Lanka
- Intertek Mineral Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Manunggal Multi Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- Power Finance Corporation Ltd., India
- Bayan Resources Tbk. - Indonesia
- Bukit Baiduri Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- The Treasury - Australian Government
- Minerals Council of Australia
- Madhucon Powers Ltd - India
- ICICI Bank Limited - India
- Directorate Of Revenue Intelligence - India
- Sinarmas Energy and Mining - Indonesia
- Tamil Nadu electricity Board
- The State Trading Corporation of India Ltd
- Simpson Spence & Young - Indonesia
- Energy Development Corp, Philippines
- MS Steel International - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Neyveli Lignite Corporation Ltd, - India
- SMC Global Power, Philippines
- Ind-Barath Power Infra Limited - India
- Carbofer General Trading SA - India
- Directorate General of MIneral and Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Thai Mozambique Logistica
- Bulk Trading Sa - Switzerland
- Semirara Mining and Power Corporation, Philippines
- Medco Energi Mining Internasional
- Parliament of New Zealand
- Baramulti Group, Indonesia
- Barasentosa Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- SN Aboitiz Power Inc, Philippines
- Indika Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vedanta Resources Plc - India
- Sindya Power Generating Company Private Ltd
- Wilmar Investment Holdings
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Essar Steel Hazira Ltd - India
- Sical Logistics Limited - India
- Central Java Power - Indonesia
- Africa Commodities Group - South Africa
- Heidelberg Cement - Germany
- GN Power Mariveles Coal Plant, Philippines
- India Bulls Power Limited - India
- Straits Asia Resources Limited - Singapore
- Indogreen Group - Indonesia
- Larsen & Toubro Limited - India
- PTC India Limited - India
- Kobexindo Tractors - Indoneisa
- Indian Energy Exchange, India
- Port Waratah Coal Services - Australia
- SMG Consultants - Indonesia
- Eastern Energy - Thailand
- Semirara Mining Corp, Philippines
- Commonwealth Bank - Australia
- European Bulk Services B.V. - Netherlands
- Krishnapatnam Port Company Ltd. - India
- Ambuja Cements Ltd - India
- Mercuria Energy - Indonesia
- Uttam Galva Steels Limited - India
- Tata Chemicals Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rio Tinto Coal - Australia
- GVK Power & Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- Leighton Contractors Pty Ltd - Australia
- Indonesian Coal Mining Association
- Parry Sugars Refinery, India
- Wood Mackenzie - Singapore
- Maheswari Brothers Coal Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Commodity Traders Exchange
- PowerSource Philippines DevCo
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