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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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Wednesday, 06 June 12
INDONESIAN GOVERNMENT'S DECLARED COAL PRICES CONTINUING ITS DECLINE
COALspot.com - Indonesian HBA fell to lowest level since January 2011 in June 2012. The monthly coal reference price for coal sales this month ...
Monday, 04 June 12
MITRABAHTERA SUBSIDIARY SECURES CONTRACT FROM BERAU COAL - INSIDER STORIES
Insider Stories reported that, PT Mitra Alam Segara Sejati, a subsidiary that is 60% owned by PT Mitrabahtera Segara Sejati Tbk (MBSS), has secur ...
Sunday, 03 June 12
TTI ESTABLISHES COAL TRADING & MARKETING OFFICE
COALspot.com - TTI has officially established its coal trading, marketing-office in Jakarta, Indonesia. PT. Gunung Tinggi Coal is the TTI’s fi ...
Sunday, 03 June 12
FREIGHT MARKET CONTINUING ITS DECLINE
COALspot.com - The BDI continued to fall for the fifth straight week and the BDI fell by 2.57 pct this week closing at 904 points.
The Cape Size ...
Friday, 01 June 12
TNPL HAS SECURED 300K MT OF 6000 GAD COAL AT US$ 81 CNF TUTICORIN
COALspot.com - An India based coal trader Adani has offered the lowest price of US$ 81.00 per metric ton for calorific value of 6000 GAD and 15 perc ...
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- Indika Energy - Indonesia
- Semirara Mining Corp, Philippines
- Altura Mining Limited, Indonesia
- London Commodity Brokers - England
- Baramulti Group, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Price Waterhouse Coopers - Russia
- Global Coal Blending Company Limited - Australia
- Standard Chartered Bank - UAE
- Formosa Plastics Group - Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Vedanta Resources Plc - India
- Interocean Group of Companies - India
- Global Green Power PLC Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Electricity Authority, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sinarmas Energy and Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Bukit Makmur.PT - Indonesia
- SMG Consultants - Indonesia
- PowerSource Philippines DevCo
- Minerals Council of Australia
- Edison Trading Spa - Italy
- The University of Queensland
- Alfred C Toepfer International GmbH - Germany
- Orica Mining Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Meenaskhi Energy Private Limited - India
- Independent Power Producers Association of India
- Ministry of Finance - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kepco SPC Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Kumho Petrochemical, South Korea
- The Treasury - Australian Government
- Sakthi Sugars Limited - India
- Dalmia Cement Bharat India
- Goldman Sachs - Singapore
- Posco Energy - South Korea
- Sree Jayajothi Cements Limited - India
- Aboitiz Power Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Australian Coal Association
- Maheswari Brothers Coal Limited - India
- Lanco Infratech Ltd - India
- Energy Development Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- CNBM International Corporation - China
- Binh Thuan Hamico - Vietnam
- Bangladesh Power Developement Board
- Renaissance Capital - South Africa
- Vizag Seaport Private Limited - India
- Toyota Tsusho Corporation, Japan
- Kideco Jaya Agung - Indonesia
- Manunggal Multi Energi - Indonesia
- VISA Power Limited - India
- Malabar Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Latin American Coal - Colombia
- Bhushan Steel Limited - India
- McConnell Dowell - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Banpu Public Company Limited - Thailand
- Aditya Birla Group - India
- Kapuas Tunggal Persada - Indonesia
- Globalindo Alam Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Xindia Steels Limited - India
- Romanian Commodities Exchange
- CIMB Investment Bank - Malaysia
- Parry Sugars Refinery, India
- Power Finance Corporation Ltd., India
- Heidelberg Cement - Germany
- Siam City Cement PLC, Thailand
- Central Java Power - Indonesia
- Georgia Ports Authority, United States
- Mercuria Energy - Indonesia
- Attock Cement Pakistan Limited
- Chamber of Mines of South Africa
- Rio Tinto Coal - Australia
- Barasentosa Lestari - Indonesia
- Singapore Mercantile Exchange
- Gujarat Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- South Luzon Thermal Energy Corporation
- OPG Power Generation Pvt Ltd - India
- Indian Oil Corporation Limited
- Sarangani Energy Corporation, Philippines
- Larsen & Toubro Limited - India
- Kobexindo Tractors - Indoneisa
- Central Electricity Authority - India
- Economic Council, Georgia
- Bhoruka Overseas - Indonesia
- Salva Resources Pvt Ltd - India
- Meralco Power Generation, Philippines
- Carbofer General Trading SA - India
- San Jose City I Power Corp, Philippines
- Savvy Resources Ltd - HongKong
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- Bharathi Cement Corporation - India
- Anglo American - United Kingdom
- Indian Energy Exchange, India
- Rashtriya Ispat Nigam Limited - India
- Mercator Lines Limited - India
- Thai Mozambique Logistica
- Eastern Energy - Thailand
- Kartika Selabumi Mining - Indonesia
- Antam Resourcindo - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Uttam Galva Steels Limited - India
- Oldendorff Carriers - Singapore
- Ministry of Mines - Canada
- Agrawal Coal Company - India
- Orica Australia Pty. Ltd.
- International Coal Ventures Pvt Ltd - India
- ICICI Bank Limited - India
- Jorong Barutama Greston.PT - Indonesia
- India Bulls Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Wilmar Investment Holdings
- Borneo Indobara - Indonesia
- Indo Tambangraya Megah - Indonesia
- Indonesian Coal Mining Association
- White Energy Company Limited
- Krishnapatnam Port Company Ltd. - India
- Makarim & Taira - Indonesia
- LBH Netherlands Bv - Netherlands
- MS Steel International - UAE
- Marubeni Corporation - India
- Jindal Steel & Power Ltd - India
- IEA Clean Coal Centre - UK
- GMR Energy Limited - India
- Star Paper Mills Limited - India
- Riau Bara Harum - Indonesia
- Tamil Nadu electricity Board
- Directorate Of Revenue Intelligence - India
- Gujarat Mineral Development Corp Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sical Logistics Limited - India
- GAC Shipping (India) Pvt Ltd
- Madhucon Powers Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Sidhee Cement - India
- Ceylon Electricity Board - Sri Lanka
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement - Thailand
- Videocon Industries ltd - India
- Bukit Baiduri Energy - Indonesia
- Coal and Oil Company - UAE
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- Pendopo Energi Batubara - Indonesia
- Thiess Contractors Indonesia
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- Global Business Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Deloitte Consulting - India
- Iligan Light & Power Inc, Philippines
- Ministry of Transport, Egypt
- Planning Commission, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Cigading International Bulk Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Australian Commodity Traders Exchange
- Commonwealth Bank - Australia
- Kaltim Prima Coal - Indonesia
- Grasim Industreis Ltd - India
- SMC Global Power, Philippines
- TeaM Sual Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Petron Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Wood Mackenzie - Singapore
- SN Aboitiz Power Inc, Philippines
- Cement Manufacturers Association - India
- Sojitz Corporation - Japan
- Straits Asia Resources Limited - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- New Zealand Coal & Carbon
- Trasteel International SA, Italy
- Africa Commodities Group - South Africa
- Bulk Trading Sa - Switzerland
- Metalloyd Limited - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Ambuja Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Tata Chemicals Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mintek Dendrill Indonesia
- GVK Power & Infra Limited - India
- Parliament of New Zealand
- IHS Mccloskey Coal Group - USA
- Sindya Power Generating Company Private Ltd
- Indogreen Group - Indonesia
- Mjunction Services Limited - India
- Bhatia International Limited - India
- PTC India Limited - India
- Coalindo Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Samtan Co., Ltd - South Korea
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