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