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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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- Asmin Koalindo Tuhup - Indonesia
- Bukit Baiduri Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Wilmar Investment Holdings
- Bayan Resources Tbk. - Indonesia
- Uttam Galva Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Krishnapatnam Port Company Ltd. - India
- Electricity Generating Authority of Thailand
- Semirara Mining and Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Tata Chemicals Ltd - India
- Banpu Public Company Limited - Thailand
- Interocean Group of Companies - India
- Sical Logistics Limited - India
- Siam City Cement - Thailand
- Kartika Selabumi Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Billiton Holdings Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Manunggal Multi Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Electricity Authority, New Zealand
- Chettinad Cement Corporation Ltd - India
- GMR Energy Limited - India
- Videocon Industries ltd - India
- Miang Besar Coal Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- The University of Queensland
- Indian Energy Exchange, India
- Madhucon Powers Ltd - India
- Bukit Makmur.PT - Indonesia
- Parry Sugars Refinery, India
- Intertek Mineral Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Pendopo Energi Batubara - Indonesia
- Chamber of Mines of South Africa
- Star Paper Mills Limited - India
- Global Business Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Meenaskhi Energy Private Limited - India
- Grasim Industreis Ltd - India
- Economic Council, Georgia
- Global Coal Blending Company Limited - Australia
- Antam Resourcindo - Indonesia
- Agrawal Coal Company - India
- Coal and Oil Company - UAE
- Mercuria Energy - Indonesia
- Larsen & Toubro Limited - India
- Renaissance Capital - South Africa
- Georgia Ports Authority, United States
- Kaltim Prima Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Independent Power Producers Association of India
- Port Waratah Coal Services - Australia
- Indogreen Group - Indonesia
- Binh Thuan Hamico - Vietnam
- Coalindo Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Ministry of Mines - Canada
- Ministry of Finance - Indonesia
- European Bulk Services B.V. - Netherlands
- Oldendorff Carriers - Singapore
- Energy Link Ltd, New Zealand
- Petron Corporation, Philippines
- Bangladesh Power Developement Board
- Ambuja Cements Ltd - India
- Goldman Sachs - Singapore
- Wood Mackenzie - Singapore
- Salva Resources Pvt Ltd - India
- Australian Coal Association
- Orica Mining Services - Indonesia
- New Zealand Coal & Carbon
- Maheswari Brothers Coal Limited - India
- Sakthi Sugars Limited - India
- Semirara Mining Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Singapore Mercantile Exchange
- Tamil Nadu electricity Board
- PetroVietnam Power Coal Import and Supply Company
- Posco Energy - South Korea
- Power Finance Corporation Ltd., India
- Sindya Power Generating Company Private Ltd
- GN Power Mariveles Coal Plant, Philippines
- Mercator Lines Limited - India
- White Energy Company Limited
- Toyota Tsusho Corporation, Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cement Manufacturers Association - India
- GVK Power & Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- Global Green Power PLC Corporation, Philippines
- Edison Trading Spa - Italy
- Planning Commission, India
- Maharashtra Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Riau Bara Harum - Indonesia
- Parliament of New Zealand
- Vizag Seaport Private Limited - India
- Australian Commodity Traders Exchange
- Globalindo Alam Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bulk Trading Sa - Switzerland
- Samtan Co., Ltd - South Korea
- Essar Steel Hazira Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Trasteel International SA, Italy
- Mjunction Services Limited - India
- Deloitte Consulting - India
- Aboitiz Power Corporation - Philippines
- Eastern Energy - Thailand
- Leighton Contractors Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Bhoruka Overseas - Indonesia
- Xindia Steels Limited - India
- Baramulti Group, Indonesia
- Holcim Trading Pte Ltd - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- The State Trading Corporation of India Ltd
- Aditya Birla Group - India
- Metalloyd Limited - United Kingdom
- MS Steel International - UAE
- San Jose City I Power Corp, Philippines
- Central Java Power - Indonesia
- Africa Commodities Group - South Africa
- Commonwealth Bank - Australia
- Directorate General of MIneral and Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indo Tambangraya Megah - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Therma Luzon, Inc, Philippines
- Dalmia Cement Bharat India
- Indonesian Coal Mining Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kohat Cement Company Ltd. - Pakistan
- Iligan Light & Power Inc, Philippines
- Malabar Cements Ltd - India
- CNBM International Corporation - China
- LBH Netherlands Bv - Netherlands
- Vedanta Resources Plc - India
- SMG Consultants - Indonesia
- PTC India Limited - India
- PowerSource Philippines DevCo
- AsiaOL BioFuels Corp., Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Standard Chartered Bank - UAE
- Carbofer General Trading SA - India
- Ind-Barath Power Infra Limited - India
- Price Waterhouse Coopers - Russia
- Thiess Contractors Indonesia
- Attock Cement Pakistan Limited
- Marubeni Corporation - India
- OPG Power Generation Pvt Ltd - India
- Borneo Indobara - Indonesia
- Bharathi Cement Corporation - India
- Petrochimia International Co. Ltd.- Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sojitz Corporation - Japan
- Timah Investasi Mineral - Indoneisa
- Thai Mozambique Logistica
- Makarim & Taira - Indonesia
- TeaM Sual Corporation - Philippines
- Gujarat Sidhee Cement - India
- Eastern Coal Council - USA
- Ministry of Transport, Egypt
- Energy Development Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Indika Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Mintek Dendrill Indonesia
- VISA Power Limited - India
- London Commodity Brokers - England
- Anglo American - United Kingdom
- International Coal Ventures Pvt Ltd - India
- Rio Tinto Coal - Australia
- Romanian Commodities Exchange
- Lanco Infratech Ltd - India
- Barasentosa Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Siam City Cement PLC, Thailand
- Kepco SPC Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Latin American Coal - Colombia
- Ceylon Electricity Board - Sri Lanka
- The Treasury - Australian Government
- GAC Shipping (India) Pvt Ltd
- Central Electricity Authority - India
- Minerals Council of Australia
- Kumho Petrochemical, South Korea
- Kapuas Tunggal Persada - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Medco Energi Mining Internasional
- Sarangani Energy Corporation, Philippines
- ASAPP Information Group - India
- Bhatia International Limited - India
- IEA Clean Coal Centre - UK
- Indian Oil Corporation Limited
- Bhushan Steel Limited - India
- McConnell Dowell - Australia
- Merrill Lynch Commodities Europe
- Altura Mining Limited, Indonesia
- ICICI Bank Limited - India
- Straits Asia Resources Limited - Singapore
- Directorate Of Revenue Intelligence - India
- India Bulls Power Limited - India
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