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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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Tuesday, 22 May 12
NEW ONE-YEAR TIME CHARTERS FOR TWO VESSELS OF EXCEL MARITIME CARRIERS LTD.
Excel Maritime Carriers Ltd. (NYSE: EXM), an owner and operator of dry bulk carriers and an international provider of worldwide seaborne transportat ...
Tuesday, 22 May 12
DRY BULK MARKET STEADY, AWAITING FURTHER RISE IN DEMAND WHICH IS DOUBTFUL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Traditionally, the second and third quarters of the year are the strongest for the dry bulk market, but this year, things seem to be quite subdued, ...
Sunday, 20 May 12
SPOT FREIGHT RATE DIPS FURTHER - VISTAAR
COALspot.com - The BDI was marginally up by 3 points (0.26 pct) closing at 1,141 points.
The cape index was up by 1.17 pct closing at 1,633 point ...
Saturday, 19 May 12
INDONESIAN SUB-BITUMINOUS COAL SWAPS DROP US$ 2.88 PMT W-O-W
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for June deliveries have drops this week by 3.86 percent and& ...
Saturday, 19 May 12
INDONESIAN EXPORT TAX GIVES COAL MINERS A CHEAP RIDE: ANALYSTS - THE JAKARTA GLOBE
The Jakarta Globe reported that, Indonesia’s policy to exclude coal from an export tax that has been applied to 14 other mineral commodities h ...
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- Orica Mining Services - Indonesia
- Singapore Mercantile Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Lanco Infratech Ltd - India
- Electricity Generating Authority of Thailand
- Dalmia Cement Bharat India
- Maheswari Brothers Coal Limited - India
- IHS Mccloskey Coal Group - USA
- Rio Tinto Coal - Australia
- Australian Coal Association
- Central Java Power - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- LBH Netherlands Bv - Netherlands
- Karaikal Port Pvt Ltd - India
- Energy Development Corp, Philippines
- Trasteel International SA, Italy
- Cement Manufacturers Association - India
- Heidelberg Cement - Germany
- Marubeni Corporation - India
- Kapuas Tunggal Persada - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Latin American Coal - Colombia
- Karbindo Abesyapradhi - Indoneisa
- Sree Jayajothi Cements Limited - India
- Australian Commodity Traders Exchange
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- Sarangani Energy Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Attock Cement Pakistan Limited
- Star Paper Mills Limited - India
- Kobexindo Tractors - Indoneisa
- Petron Corporation, Philippines
- CIMB Investment Bank - Malaysia
- The University of Queensland
- Ministry of Mines - Canada
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Grasim Industreis Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Sical Logistics Limited - India
- San Jose City I Power Corp, Philippines
- India Bulls Power Limited - India
- Indonesian Coal Mining Association
- Larsen & Toubro Limited - India
- Samtan Co., Ltd - South Korea
- Electricity Authority, New Zealand
- Gujarat Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Anglo American - United Kingdom
- Bhatia International Limited - India
- Ceylon Electricity Board - Sri Lanka
- Orica Australia Pty. Ltd.
- Timah Investasi Mineral - Indoneisa
- Ind-Barath Power Infra Limited - India
- GMR Energy Limited - India
- Indika Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- Goldman Sachs - Singapore
- Carbofer General Trading SA - India
- Kartika Selabumi Mining - Indonesia
- Power Finance Corporation Ltd., India
- London Commodity Brokers - England
- MS Steel International - UAE
- Intertek Mineral Services - Indonesia
- Coalindo Energy - Indonesia
- Uttam Galva Steels Limited - India
- Energy Link Ltd, New Zealand
- Central Electricity Authority - India
- McConnell Dowell - Australia
- European Bulk Services B.V. - Netherlands
- Coastal Gujarat Power Limited - India
- Parliament of New Zealand
- Binh Thuan Hamico - Vietnam
- Merrill Lynch Commodities Europe
- Interocean Group of Companies - India
- Videocon Industries ltd - India
- Medco Energi Mining Internasional
- Pendopo Energi Batubara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Romanian Commodities Exchange
- Banpu Public Company Limited - Thailand
- Parry Sugars Refinery, India
- Bangladesh Power Developement Board
- Bukit Makmur.PT - Indonesia
- PowerSource Philippines DevCo
- Meralco Power Generation, Philippines
- Eastern Energy - Thailand
- Therma Luzon, Inc, Philippines
- Barasentosa Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Semirara Mining Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement - Thailand
- Indian Energy Exchange, India
- Agrawal Coal Company - India
- Oldendorff Carriers - Singapore
- TeaM Sual Corporation - Philippines
- Georgia Ports Authority, United States
- Salva Resources Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kalimantan Lumbung Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Commonwealth Bank - Australia
- Aboitiz Power Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Sojitz Corporation - Japan
- Savvy Resources Ltd - HongKong
- Borneo Indobara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Economic Council, Georgia
- Chettinad Cement Corporation Ltd - India
- Simpson Spence & Young - Indonesia
- Mercator Lines Limited - India
- Formosa Plastics Group - Taiwan
- Xindia Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Posco Energy - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ICICI Bank Limited - India
- White Energy Company Limited
- Directorate General of MIneral and Coal - Indonesia
- SMC Global Power, Philippines
- Eastern Coal Council - USA
- Tamil Nadu electricity Board
- Coal and Oil Company - UAE
- Bhushan Steel Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The Treasury - Australian Government
- IEA Clean Coal Centre - UK
- Riau Bara Harum - Indonesia
- Ministry of Finance - Indonesia
- Vedanta Resources Plc - India
- Chamber of Mines of South Africa
- Indian Oil Corporation Limited
- ASAPP Information Group - India
- Wood Mackenzie - Singapore
- Madhucon Powers Ltd - India
- Sakthi Sugars Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Planning Commission, India
- Metalloyd Limited - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- Minerals Council of Australia
- Bulk Trading Sa - Switzerland
- Sinarmas Energy and Mining - Indonesia
- Deloitte Consulting - India
- Renaissance Capital - South Africa
- Rashtriya Ispat Nigam Limited - India
- Directorate Of Revenue Intelligence - India
- OPG Power Generation Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Jaiprakash Power Ventures ltd
- Indogreen Group - Indonesia
- Thiess Contractors Indonesia
- New Zealand Coal & Carbon
- Gujarat Sidhee Cement - India
- Ministry of Transport, Egypt
- Sindya Power Generating Company Private Ltd
- Antam Resourcindo - Indonesia
- Malabar Cements Ltd - India
- VISA Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Baramulti Group, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ambuja Cements Ltd - India
- Mercuria Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Bukit Asam (Persero) Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Jindal Steel & Power Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kideco Jaya Agung - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- The State Trading Corporation of India Ltd
- Africa Commodities Group - South Africa
- Kumho Petrochemical, South Korea
- Manunggal Multi Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Straits Asia Resources Limited - Singapore
- Port Waratah Coal Services - Australia
- Iligan Light & Power Inc, Philippines
- CNBM International Corporation - China
- Global Coal Blending Company Limited - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Alfred C Toepfer International GmbH - Germany
- Independent Power Producers Association of India
- Siam City Cement PLC, Thailand
- Wilmar Investment Holdings
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mjunction Services Limited - India
- Krishnapatnam Port Company Ltd. - India
- Global Business Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Aditya Birla Group - India
- Altura Mining Limited, Indonesia
- Standard Chartered Bank - UAE
- PNOC Exploration Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- GVK Power & Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- Makarim & Taira - Indonesia
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
- Bharathi Cement Corporation - India
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