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