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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, 01 June 12
COKAL ACCEPTED ON THE CLEAN AND CLEAR LIST FOR ITS BORNEO BARA PRIMA AND BUMI BARITO MINERAL PROJECTS
- Borneo Bara Prima (BBP) Project confirmed on the Clean and Clear List 9th May 2012
- Bumi Barito Mineral (BBM) Project confirmed on the Clean and ...
Friday, 01 June 12
ADARO BUYS MAJORITY STAKE IN AFFILIATED BHAKTI ENERGI - INSIDER STORIES
Insider Stories reported that, PT Adaro Energy Tbk entered into an option to provide a convertible loan of up to US$500 million for a period of 3 ye ...
Thursday, 31 May 12
DRY BULK MARKET UNABLE TO FIND NEW SUPPORT TO REACH HIGHER LEVELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has been unable to find new support and recover to higher levels during these past few days. As a result, the Baltic Dry Index ( ...
Wednesday, 30 May 12
ORPHEUS RAISES $2.24M TO ADVANCE INDONESIAN COAL PRODUCTION ASSETS
• $2.24 million raised from a placement to new and existing institutional and sophisticated investors from Australia and overseas
• Funds ...
Wednesday, 30 May 12
ARPENI SECURES TRANSSHIPMENT CONTRACT FROM BARUNA DIRGA
Insider Stories reported that, shipping operator PT Arpeni Pratama Ocean Line Tbk (APOL) has secured a 1-year coal transhipment contract of 4 millio ...
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- Edison Trading Spa - Italy
- Bharathi Cement Corporation - India
- IEA Clean Coal Centre - UK
- SMG Consultants - Indonesia
- Aboitiz Power Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Bulk Trading Sa - Switzerland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karaikal Port Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Kohat Cement Company Ltd. - Pakistan
- Georgia Ports Authority, United States
- Port Waratah Coal Services - Australia
- Deloitte Consulting - India
- Trasteel International SA, Italy
- Medco Energi Mining Internasional
- Power Finance Corporation Ltd., India
- Vedanta Resources Plc - India
- White Energy Company Limited
- Sindya Power Generating Company Private Ltd
- SMC Global Power, Philippines
- Toyota Tsusho Corporation, Japan
- Economic Council, Georgia
- Commonwealth Bank - Australia
- Straits Asia Resources Limited - Singapore
- Kideco Jaya Agung - Indonesia
- Siam City Cement - Thailand
- Central Electricity Authority - India
- Merrill Lynch Commodities Europe
- Coastal Gujarat Power Limited - India
- Directorate Of Revenue Intelligence - India
- San Jose City I Power Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Chettinad Cement Corporation Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- PTC India Limited - India
- Mercator Lines Limited - India
- The State Trading Corporation of India Ltd
- Sical Logistics Limited - India
- Renaissance Capital - South Africa
- Global Coal Blending Company Limited - Australia
- Sree Jayajothi Cements Limited - India
- Mintek Dendrill Indonesia
- Indo Tambangraya Megah - Indonesia
- Attock Cement Pakistan Limited
- Bukit Baiduri Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Kumho Petrochemical, South Korea
- Xindia Steels Limited - India
- Thai Mozambique Logistica
- Sarangani Energy Corporation, Philippines
- Ambuja Cements Ltd - India
- Bangladesh Power Developement Board
- Kaltim Prima Coal - Indonesia
- Intertek Mineral Services - Indonesia
- CIMB Investment Bank - Malaysia
- International Coal Ventures Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Alfred C Toepfer International GmbH - Germany
- Vijayanagar Sugar Pvt Ltd - India
- VISA Power Limited - India
- Bukit Makmur.PT - Indonesia
- Energy Development Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Videocon Industries ltd - India
- European Bulk Services B.V. - Netherlands
- Indian Energy Exchange, India
- Petron Corporation, Philippines
- Indonesian Coal Mining Association
- Latin American Coal - Colombia
- Kepco SPC Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- GMR Energy Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Baramulti Group, Indonesia
- Heidelberg Cement - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wilmar Investment Holdings
- MS Steel International - UAE
- The University of Queensland
- Uttam Galva Steels Limited - India
- Global Business Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- New Zealand Coal & Carbon
- Timah Investasi Mineral - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Formosa Plastics Group - Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Metalloyd Limited - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Oldendorff Carriers - Singapore
- GVK Power & Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Altura Mining Limited, Indonesia
- OPG Power Generation Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Mjunction Services Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Simpson Spence & Young - Indonesia
- Larsen & Toubro Limited - India
- Electricity Generating Authority of Thailand
- Goldman Sachs - Singapore
- Mercuria Energy - Indonesia
- Coal and Oil Company - UAE
- Ministry of Mines - Canada
- Vizag Seaport Private Limited - India
- McConnell Dowell - Australia
- Minerals Council of Australia
- Salva Resources Pvt Ltd - India
- Ministry of Transport, Egypt
- Carbofer General Trading SA - India
- Sakthi Sugars Limited - India
- Madhucon Powers Ltd - India
- Manunggal Multi Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Sojitz Corporation - Japan
- LBH Netherlands Bv - Netherlands
- SN Aboitiz Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- ASAPP Information Group - India
- TNB Fuel Sdn Bhd - Malaysia
- CNBM International Corporation - China
- Romanian Commodities Exchange
- Riau Bara Harum - Indonesia
- Lanco Infratech Ltd - India
- Parry Sugars Refinery, India
- London Commodity Brokers - England
- Cement Manufacturers Association - India
- Bukit Asam (Persero) Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Price Waterhouse Coopers - Russia
- Maharashtra Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Meralco Power Generation, Philippines
- Central Java Power - Indonesia
- Rio Tinto Coal - Australia
- Dalmia Cement Bharat India
- Bhushan Steel Limited - India
- Energy Link Ltd, New Zealand
- Therma Luzon, Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Kobexindo Tractors - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- PowerSource Philippines DevCo
- Krishnapatnam Port Company Ltd. - India
- Interocean Group of Companies - India
- PetroVietnam Power Coal Import and Supply Company
- Sinarmas Energy and Mining - Indonesia
- Indian Oil Corporation Limited
- Aditya Birla Group - India
- Tata Chemicals Ltd - India
- Planning Commission, India
- Bahari Cakrawala Sebuku - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bayan Resources Tbk. - Indonesia
- Indogreen Group - Indonesia
- Essar Steel Hazira Ltd - India
- IHS Mccloskey Coal Group - USA
- Star Paper Mills Limited - India
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- Coalindo Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Malabar Cements Ltd - India
- India Bulls Power Limited - India
- Grasim Industreis Ltd - India
- Ministry of Finance - Indonesia
- Agrawal Coal Company - India
- Ind-Barath Power Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Borneo Indobara - Indonesia
- Iligan Light & Power Inc, Philippines
- Makarim & Taira - Indonesia
- Samtan Co., Ltd - South Korea
- South Luzon Thermal Energy Corporation
- Australian Coal Association
- Australian Commodity Traders Exchange
- GN Power Mariveles Coal Plant, Philippines
- Meenaskhi Energy Private Limited - India
- Electricity Authority, New Zealand
- Siam City Cement PLC, Thailand
- Wood Mackenzie - Singapore
- Semirara Mining and Power Corporation, Philippines
- Anglo American - United Kingdom
- Parliament of New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Indika Energy - Indonesia
- Orica Australia Pty. Ltd.
- Standard Chartered Bank - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Singapore Mercantile Exchange
- Karbindo Abesyapradhi - Indoneisa
- Eastern Coal Council - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- The Treasury - Australian Government
- ICICI Bank Limited - India
- Eastern Energy - Thailand
- Billiton Holdings Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Gujarat Sidhee Cement - India
- Chamber of Mines of South Africa
- Posco Energy - South Korea
- Miang Besar Coal Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Antam Resourcindo - Indonesia
- TeaM Sual Corporation - Philippines
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