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