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