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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, 15 May 12
POTENTIAL BOOM OF CHINAS COAL IMPORTS COULD PROVIDE FURTHER SUPPORT TO DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has been moving sideways during the past week with the industry’s benchmark, the Baltic Dry Index (BDI) losing 0.53% on th ...
Saturday, 12 May 12
THE SHIPPING MARKET IS UNLIKELY TO SEE A REBOUND ANYTIME SOON - VISTAAR SINGAPORE
COALspot.com - The BDI softened this week and it was down by 1.64 pct closing at 1,138 points.
The cape index was up by 2.41 pct closing at 1,61 ...
Friday, 11 May 12
POLITICAL CHANGES COULD LEAD TO TEMPORARY HALT IN SHIPPING INVESTMENTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The potential of changes of political leadership in many of the world’s leading economies could very well lead to significant shifts in the di ...
Thursday, 10 May 12
DRY BULK ERRATIC ON LACK OF DIRECTION - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept up its erratic behavior as it went down again during yesterday’s session, on a lack of direct guidance in terms o ...
Wednesday, 09 May 12
COAL INDIA SIGNS FSAS WITH 13 POWER UNITS SO FAR - PTI
Press Trust of India has reported that, coal India has so far entered into fuel supply pacts with 13 power units, including Reliance Power's Rosa P ...
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- Sakthi Sugars Limited - India
- Medco Energi Mining Internasional
- Oldendorff Carriers - Singapore
- Gujarat Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- Economic Council, Georgia
- Petrochimia International Co. Ltd.- Taiwan
- Indogreen Group - Indonesia
- Trasteel International SA, Italy
- Tata Chemicals Ltd - India
- Mercator Lines Limited - India
- Timah Investasi Mineral - Indoneisa
- Cement Manufacturers Association - India
- GMR Energy Limited - India
- Semirara Mining and Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- OPG Power Generation Pvt Ltd - India
- White Energy Company Limited
- AsiaOL BioFuels Corp., Philippines
- SN Aboitiz Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Kobexindo Tractors - Indoneisa
- The Treasury - Australian Government
- South Luzon Thermal Energy Corporation
- Bukit Asam (Persero) Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- ASAPP Information Group - India
- Ind-Barath Power Infra Limited - India
- Vizag Seaport Private Limited - India
- Videocon Industries ltd - India
- Standard Chartered Bank - UAE
- Energy Link Ltd, New Zealand
- Sindya Power Generating Company Private Ltd
- Thiess Contractors Indonesia
- Africa Commodities Group - South Africa
- Uttam Galva Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- CNBM International Corporation - China
- GN Power Mariveles Coal Plant, Philippines
- Chettinad Cement Corporation Ltd - India
- Romanian Commodities Exchange
- Baramulti Group, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Sarangani Energy Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Jaiprakash Power Ventures ltd
- Power Finance Corporation Ltd., India
- Globalindo Alam Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Mercuria Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Maheswari Brothers Coal Limited - India
- Barasentosa Lestari - Indonesia
- Ambuja Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Renaissance Capital - South Africa
- Thai Mozambique Logistica
- Directorate Of Revenue Intelligence - India
- Attock Cement Pakistan Limited
- Iligan Light & Power Inc, Philippines
- Central Java Power - Indonesia
- Orica Australia Pty. Ltd.
- Energy Development Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Bukit Makmur.PT - Indonesia
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- Global Business Power Corporation, Philippines
- PTC India Limited - India
- PNOC Exploration Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Coal and Oil Company - UAE
- Planning Commission, India
- Heidelberg Cement - Germany
- Price Waterhouse Coopers - Russia
- Ministry of Transport, Egypt
- Tamil Nadu electricity Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Banpu Public Company Limited - Thailand
- IEA Clean Coal Centre - UK
- Global Green Power PLC Corporation, Philippines
- Meralco Power Generation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- CIMB Investment Bank - Malaysia
- Bhushan Steel Limited - India
- Mjunction Services Limited - India
- Posco Energy - South Korea
- Alfred C Toepfer International GmbH - Germany
- Ministry of Finance - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bharathi Cement Corporation - India
- MS Steel International - UAE
- Straits Asia Resources Limited - Singapore
- Savvy Resources Ltd - HongKong
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rashtriya Ispat Nigam Limited - India
- Therma Luzon, Inc, Philippines
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- Georgia Ports Authority, United States
- Antam Resourcindo - Indonesia
- Australian Commodity Traders Exchange
- GVK Power & Infra Limited - India
- Port Waratah Coal Services - Australia
- Coalindo Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- VISA Power Limited - India
- Anglo American - United Kingdom
- Siam City Cement PLC, Thailand
- Simpson Spence & Young - Indonesia
- Kepco SPC Power Corporation, Philippines
- The University of Queensland
- Ministry of Mines - Canada
- Mintek Dendrill Indonesia
- Gujarat Sidhee Cement - India
- PowerSource Philippines DevCo
- TeaM Sual Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Kaltim Prima Coal - Indonesia
- The State Trading Corporation of India Ltd
- Wood Mackenzie - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kumho Petrochemical, South Korea
- Independent Power Producers Association of India
- Metalloyd Limited - United Kingdom
- Deloitte Consulting - India
- Kartika Selabumi Mining - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Indika Energy - Indonesia
- Electricity Generating Authority of Thailand
- Edison Trading Spa - Italy
- Indian Energy Exchange, India
- Kohat Cement Company Ltd. - Pakistan
- Central Electricity Authority - India
- Eastern Coal Council - USA
- Goldman Sachs - Singapore
- Parliament of New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Electricity Authority, New Zealand
- European Bulk Services B.V. - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aditya Birla Group - India
- Kalimantan Lumbung Energi - Indonesia
- McConnell Dowell - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- Bhoruka Overseas - Indonesia
- Chamber of Mines of South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- London Commodity Brokers - England
- Vedanta Resources Plc - India
- Malabar Cements Ltd - India
- Wilmar Investment Holdings
- San Jose City I Power Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Agrawal Coal Company - India
- Manunggal Multi Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Carbofer General Trading SA - India
- Star Paper Mills Limited - India
- Toyota Tsusho Corporation, Japan
- Orica Mining Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- ICICI Bank Limited - India
- Indian Oil Corporation Limited
- TNB Fuel Sdn Bhd - Malaysia
- Borneo Indobara - Indonesia
- Indonesian Coal Mining Association
- Pendopo Energi Batubara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Grasim Industreis Ltd - India
- Larsen & Toubro Limited - India
- Australian Coal Association
- Semirara Mining Corp, Philippines
- Intertek Mineral Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Makarim & Taira - Indonesia
- Merrill Lynch Commodities Europe
- Petron Corporation, Philippines
- Sical Logistics Limited - India
- Rio Tinto Coal - Australia
- Samtan Co., Ltd - South Korea
- Xindia Steels Limited - India
- Parry Sugars Refinery, India
- Eastern Energy - Thailand
- SMG Consultants - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Altura Mining Limited, Indonesia
- Commonwealth Bank - Australia
- Jindal Steel & Power Ltd - India
- Interocean Group of Companies - India
- Bayan Resources Tbk. - Indonesia
- Essar Steel Hazira Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Dalmia Cement Bharat India
- Global Coal Blending Company Limited - Australia
- New Zealand Coal & Carbon
- Billiton Holdings Pty Ltd - Australia
- Sojitz Corporation - Japan
- Siam City Cement - Thailand
- Formosa Plastics Group - Taiwan
- Singapore Mercantile Exchange
- Minerals Council of Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- Binh Thuan Hamico - Vietnam
- Latin American Coal - Colombia
- India Bulls Power Limited - India
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