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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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Monday, 28 May 12
COAL EXPORTS ARE JUMPING HIGHER, BUT PRICES ARE FALLING LOWER
COALspot.com: Indonesia, the world largest coal exporter, shipped 31.86* million tons of coal in April 2012, compared to 30.64* million tons i ...
Sunday, 27 May 12
THE FREIGHT MARKET FROM INDONESIA TO INDIA WAS WEAK - VISTAAR
COALspot.com - The BDI continued to fall for the fourth straight week and the BDI fell by 9.38 pct this week closing at 1,034 points.
The Cape Si ...
Sunday, 27 May 12
INDONESIAN SUB-BITUMINOUS COAL SWAPS HEADING TO SOUTH DIRECTION
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for July deliveries have dropped this week by 5.43 percent an ...
Saturday, 26 May 12
DRY BULK SHIP OWNERS LOOKING TO CUT BACK ON TONNAGE SUPPLY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The oversupply of dry bulk carriers has been the most prominent problem in the market today, pushing down rates and ‘strangling’ profita ...
Thursday, 24 May 12
DRY BULK MARKET RETREATS ON LACK OF CHINA DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market retreated yesterday on the back of lower Chinese demand for commodities such as coal and iron ore, typically hauled by dry bulk ...
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- Thai Mozambique Logistica
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Mining Services - Indonesia
- Lanco Infratech Ltd - India
- Trasteel International SA, Italy
- Antam Resourcindo - Indonesia
- PowerSource Philippines DevCo
- White Energy Company Limited
- Electricity Authority, New Zealand
- Edison Trading Spa - Italy
- Holcim Trading Pte Ltd - Singapore
- Independent Power Producers Association of India
- Minerals Council of Australia
- Tata Chemicals Ltd - India
- Anglo American - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Mineral Development Corp Ltd - India
- Chamber of Mines of South Africa
- Bhushan Steel Limited - India
- IHS Mccloskey Coal Group - USA
- Ind-Barath Power Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Vedanta Resources Plc - India
- Chettinad Cement Corporation Ltd - India
- Rashtriya Ispat Nigam Limited - India
- SMC Global Power, Philippines
- Jindal Steel & Power Ltd - India
- Kumho Petrochemical, South Korea
- MS Steel International - UAE
- Iligan Light & Power Inc, Philippines
- Attock Cement Pakistan Limited
- Goldman Sachs - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bangladesh Power Developement Board
- Karaikal Port Pvt Ltd - India
- Australian Commodity Traders Exchange
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- Ministry of Transport, Egypt
- Maheswari Brothers Coal Limited - India
- Globalindo Alam Lestari - Indonesia
- Central Java Power - Indonesia
- Bukit Makmur.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Meralco Power Generation, Philippines
- Deloitte Consulting - India
- Indonesian Coal Mining Association
- Africa Commodities Group - South Africa
- Sical Logistics Limited - India
- Economic Council, Georgia
- Jorong Barutama Greston.PT - Indonesia
- Coastal Gujarat Power Limited - India
- India Bulls Power Limited - India
- Georgia Ports Authority, United States
- Makarim & Taira - Indonesia
- Global Coal Blending Company Limited - Australia
- Oldendorff Carriers - Singapore
- Bayan Resources Tbk. - Indonesia
- Semirara Mining Corp, Philippines
- Merrill Lynch Commodities Europe
- Samtan Co., Ltd - South Korea
- Mercator Lines Limited - India
- Sindya Power Generating Company Private Ltd
- Planning Commission, India
- OPG Power Generation Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Global Green Power PLC Corporation, Philippines
- SMG Consultants - Indonesia
- Wood Mackenzie - Singapore
- London Commodity Brokers - England
- Grasim Industreis Ltd - India
- Parry Sugars Refinery, India
- Cement Manufacturers Association - India
- Krishnapatnam Port Company Ltd. - India
- Baramulti Group, Indonesia
- Formosa Plastics Group - Taiwan
- Port Waratah Coal Services - Australia
- Manunggal Multi Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- Semirara Mining and Power Corporation, Philippines
- Indika Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- PNOC Exploration Corporation - Philippines
- Mjunction Services Limited - India
- Australian Coal Association
- Vizag Seaport Private Limited - India
- Indogreen Group - Indonesia
- Central Electricity Authority - India
- Kepco SPC Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Eastern Energy - Thailand
- The Treasury - Australian Government
- Bahari Cakrawala Sebuku - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- Intertek Mineral Services - Indonesia
- Energy Development Corp, Philippines
- Wilmar Investment Holdings
- Star Paper Mills Limited - India
- IEA Clean Coal Centre - UK
- Petrochimia International Co. Ltd.- Taiwan
- Videocon Industries ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Dalmia Cement Bharat India
- TNB Fuel Sdn Bhd - Malaysia
- Standard Chartered Bank - UAE
- Siam City Cement PLC, Thailand
- Gujarat Sidhee Cement - India
- Indian Energy Exchange, India
- Binh Thuan Hamico - Vietnam
- Thiess Contractors Indonesia
- Bulk Trading Sa - Switzerland
- Pendopo Energi Batubara - Indonesia
- Carbofer General Trading SA - India
- Siam City Cement - Thailand
- Meenaskhi Energy Private Limited - India
- Directorate Of Revenue Intelligence - India
- Kobexindo Tractors - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Essar Steel Hazira Ltd - India
- Madhucon Powers Ltd - India
- Kapuas Tunggal Persada - Indonesia
- GMR Energy Limited - India
- Rio Tinto Coal - Australia
- Posco Energy - South Korea
- Interocean Group of Companies - India
- Sinarmas Energy and Mining - Indonesia
- Banpu Public Company Limited - Thailand
- TeaM Sual Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- San Jose City I Power Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Barasentosa Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- New Zealand Coal & Carbon
- Romanian Commodities Exchange
- Mercuria Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Mintek Dendrill Indonesia
- Ambuja Cements Ltd - India
- The University of Queensland
- Bukit Asam (Persero) Tbk - Indonesia
- CNBM International Corporation - China
- Orica Australia Pty. Ltd.
- Agrawal Coal Company - India
- Altura Mining Limited, Indonesia
- Larsen & Toubro Limited - India
- Commonwealth Bank - Australia
- Sarangani Energy Corporation, Philippines
- Sojitz Corporation - Japan
- Bukit Baiduri Energy - Indonesia
- Bhatia International Limited - India
- Eastern Coal Council - USA
- Power Finance Corporation Ltd., India
- GN Power Mariveles Coal Plant, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Mines - Canada
- Electricity Generating Authority of Thailand
- Alfred C Toepfer International GmbH - Germany
- SN Aboitiz Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Metalloyd Limited - United Kingdom
- ASAPP Information Group - India
- Malabar Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Indo Tambangraya Megah - Indonesia
- South Luzon Thermal Energy Corporation
- GVK Power & Infra Limited - India
- Renaissance Capital - South Africa
- Billiton Holdings Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- Savvy Resources Ltd - HongKong
- Global Business Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Latin American Coal - Colombia
- Straits Asia Resources Limited - Singapore
- Parliament of New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Singapore Mercantile Exchange
- McConnell Dowell - Australia
- Aditya Birla Group - India
- Maharashtra Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Petron Corporation, Philippines
- The State Trading Corporation of India Ltd
- Aboitiz Power Corporation - Philippines
- Bharathi Cement Corporation - India
- Sakthi Sugars Limited - India
- European Bulk Services B.V. - Netherlands
- PTC India Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Borneo Indobara - Indonesia
- Xindia Steels Limited - India
- VISA Power Limited - India
- Coal and Oil Company - UAE
- Marubeni Corporation - India
- Energy Link Ltd, New Zealand
- Indian Oil Corporation Limited
- Vijayanagar Sugar Pvt Ltd - India
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