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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, 18 May 12
EXPORT TAX WILL ERODE PROFITS, INDONESIAN COAL EXEC COMPLAINS - THE JAKARTA GLOBE
The Jakarta Globe reported that, A 20 percent export duty the government has imposed on 14 mineral ore products will not only take a toll on mining ...
Friday, 18 May 12
KOREA EAST WEST POWER LOOKING FOR TOTAL 2.6 MILLION TONS OF 4600 NAR COAL AT FIXED PRICE FOR 5 YEARS
COALspot.com - Korea East West Power Co., Ltd is inviting bids to supply of 520,000 Metric Tons (per annum) of minimum 4,600 kcal/kg coal of N ...
Friday, 18 May 12
NICKEL ORE CARGOES ARE NOT SEEN IN MARKET ANYMORE DUE TO ON-GOING INDONESIAN BAN - FEARNLEYS AS
Handy
The market remained variable.
Fronthaul voyages both from Baltic and Black Sea paid over USD 18k/day. From USG to Cont tonnage would get ...
Thursday, 17 May 12
COAL MINERS OPPOSE EXPORT TAX, SUGGEST OUTPUT QUOTA - THE JAKARTA POST
The Jakarta Post reported that, coal miners have suggested that the government apply a production quota instead of implementing an export tax in ord ...
Thursday, 17 May 12
DRY BULK MARKET STILL LOOKING FOR NEW DIRECTION - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept on moving sideways during this week, with the mixed performance across all segments. Yesterday, the industry’s be ...
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- Kaltim Prima Coal - Indonesia
- Sical Logistics Limited - India
- PTC India Limited - India
- Thai Mozambique Logistica
- Tata Chemicals Ltd - India
- Siam City Cement - Thailand
- Rio Tinto Coal - Australia
- VISA Power Limited - India
- South Luzon Thermal Energy Corporation
- Dalmia Cement Bharat India
- OPG Power Generation Pvt Ltd - India
- Carbofer General Trading SA - India
- Port Waratah Coal Services - Australia
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- Toyota Tsusho Corporation, Japan
- Africa Commodities Group - South Africa
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
- Bharathi Cement Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Gujarat Sidhee Cement - India
- Global Green Power PLC Corporation, Philippines
- Parry Sugars Refinery, India
- McConnell Dowell - Australia
- Timah Investasi Mineral - Indoneisa
- Grasim Industreis Ltd - India
- Karaikal Port Pvt Ltd - India
- Indonesian Coal Mining Association
- Banpu Public Company Limited - Thailand
- The State Trading Corporation of India Ltd
- Intertek Mineral Services - Indonesia
- GMR Energy Limited - India
- Economic Council, Georgia
- Ind-Barath Power Infra Limited - India
- Kumho Petrochemical, South Korea
- Anglo American - United Kingdom
- CNBM International Corporation - China
- Straits Asia Resources Limited - Singapore
- Sinarmas Energy and Mining - Indonesia
- Bhatia International Limited - India
- Riau Bara Harum - Indonesia
- SN Aboitiz Power Inc, Philippines
- Indika Energy - Indonesia
- Altura Mining Limited, Indonesia
- Interocean Group of Companies - India
- Wilmar Investment Holdings
- Neyveli Lignite Corporation Ltd, - India
- Aditya Birla Group - India
- Karbindo Abesyapradhi - Indoneisa
- Global Coal Blending Company Limited - Australia
- Kobexindo Tractors - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Baramulti Group, Indonesia
- Independent Power Producers Association of India
- Pipit Mutiara Jaya. PT, Indonesia
- Jaiprakash Power Ventures ltd
- Ambuja Cements Ltd - India
- Indogreen Group - Indonesia
- London Commodity Brokers - England
- Electricity Authority, New Zealand
- Meenaskhi Energy Private Limited - India
- Oldendorff Carriers - Singapore
- Bulk Trading Sa - Switzerland
- Heidelberg Cement - Germany
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Transport, Egypt
- Asmin Koalindo Tuhup - Indonesia
- Chamber of Mines of South Africa
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Bayan Resources Tbk. - Indonesia
- Binh Thuan Hamico - Vietnam
- Antam Resourcindo - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Metalloyd Limited - United Kingdom
- Cement Manufacturers Association - India
- Gujarat Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- Malabar Cements Ltd - India
- Vizag Seaport Private Limited - India
- Energy Development Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Posco Energy - South Korea
- India Bulls Power Limited - India
- Eastern Energy - Thailand
- Price Waterhouse Coopers - Russia
- Australian Coal Association
- Indian Oil Corporation Limited
- Orica Australia Pty. Ltd.
- Savvy Resources Ltd - HongKong
- Madhucon Powers Ltd - India
- Energy Link Ltd, New Zealand
- CIMB Investment Bank - Malaysia
- Coastal Gujarat Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Parliament of New Zealand
- Planning Commission, India
- Georgia Ports Authority, United States
- Romanian Commodities Exchange
- Larsen & Toubro Limited - India
- Orica Mining Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Central Java Power - Indonesia
- Meralco Power Generation, Philippines
- Bukit Makmur.PT - Indonesia
- Samtan Co., Ltd - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Jindal Steel & Power Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Rashtriya Ispat Nigam Limited - India
- ASAPP Information Group - India
- Uttam Galva Steels Limited - India
- Coal and Oil Company - UAE
- Attock Cement Pakistan Limited
- Sojitz Corporation - Japan
- Sakthi Sugars Limited - India
- GAC Shipping (India) Pvt Ltd
- Goldman Sachs - Singapore
- The University of Queensland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maharashtra Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Videocon Industries ltd - India
- Xindia Steels Limited - India
- Singapore Mercantile Exchange
- Therma Luzon, Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- LBH Netherlands Bv - Netherlands
- PowerSource Philippines DevCo
- Salva Resources Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Marubeni Corporation - India
- Mjunction Services Limited - India
- Latin American Coal - Colombia
- Essar Steel Hazira Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Makarim & Taira - Indonesia
- Global Business Power Corporation, Philippines
- Vedanta Resources Plc - India
- Sarangani Energy Corporation, Philippines
- TeaM Sual Corporation - Philippines
- SMG Consultants - Indonesia
- Aboitiz Power Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Renaissance Capital - South Africa
- Ministry of Finance - Indonesia
- Agrawal Coal Company - India
- European Bulk Services B.V. - Netherlands
- Thiess Contractors Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Globalindo Alam Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Indian Energy Exchange, India
- Barasentosa Lestari - Indonesia
- Tamil Nadu electricity Board
- White Energy Company Limited
- Bangladesh Power Developement Board
- Medco Energi Mining Internasional
- Star Paper Mills Limited - India
- Semirara Mining Corp, Philippines
- Siam City Cement PLC, Thailand
- Kartika Selabumi Mining - Indonesia
- SMC Global Power, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Minerals Council of Australia
- San Jose City I Power Corp, Philippines
- Petron Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Coalindo Energy - Indonesia
- GVK Power & Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- IHS Mccloskey Coal Group - USA
- Petrochimia International Co. Ltd.- Taiwan
- Wood Mackenzie - Singapore
- Central Electricity Authority - India
- International Coal Ventures Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Trasteel International SA, Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- New Zealand Coal & Carbon
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Deloitte Consulting - India
- Formosa Plastics Group - Taiwan
- Chettinad Cement Corporation Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Standard Chartered Bank - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- The Treasury - Australian Government
- Commonwealth Bank - Australia
- Mintek Dendrill Indonesia
- Ministry of Mines - Canada
- Kohat Cement Company Ltd. - Pakistan
- Bukit Asam (Persero) Tbk - Indonesia
- Borneo Indobara - Indonesia
- ICICI Bank Limited - India
- Indo Tambangraya Megah - Indonesia
- Simpson Spence & Young - Indonesia
- Australian Commodity Traders Exchange
- Vijayanagar Sugar Pvt Ltd - India
- MS Steel International - UAE
- Sindya Power Generating Company Private Ltd
- Edison Trading Spa - Italy
- PNOC Exploration Corporation - Philippines
- Lanco Infratech Ltd - India
- Mercator Lines Limited - India
- Electricity Generating Authority of Thailand
- Bahari Cakrawala Sebuku - Indonesia
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