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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, 08 May 12
DRY BULK MARKET LOOKING FOR NEW DIRECTION THIS WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the BDI (Baltic Dry Index) the main benchmark of the dry bulk shipping industry not traded at the start of this week, traders, charterers and s ...
Monday, 07 May 12
INDONESIAN HBA FALL AGAIN IN MAY 2012
COALspot.com - Indonesian HBA fall again to lowest level since January 2011 in May 2012. The monthly coal reference price for coal sales in Ma ...
Sunday, 06 May 12
INDONESIAN SUB-BITUMINOUS COAL & CFR SOUTH CHINA SWAPS SLIGHTLY DROP THIS WEEK
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for June deliveries slightly dropped this week.
According ...
Sunday, 06 May 12
S7 & S8 ROUTES LIKELY TO BE FIRM NEXT WEEK VISTAAR SINGAPORE
COALspot.com - The BDI remained flat this week and was up just by 1 point closing at 1,157 points.
The cape size index was up by 5.14 pct closing ...
Sunday, 06 May 12
EXPORT DUTY ON MINERAL FINALLY TO BECOME EFFECTIVE NEXT WEEK
COALspot.com - Mineral ore exporters of Indonesia ( only IUP holders) are required to obtain recommendation letter from the energy and mineral ...
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- Singapore Mercantile Exchange
- Central Electricity Authority - India
- Manunggal Multi Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Renaissance Capital - South Africa
- Minerals Council of Australia
- MS Steel International - UAE
- Indika Energy - Indonesia
- Eastern Coal Council - USA
- Coalindo Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Parliament of New Zealand
- McConnell Dowell - Australia
- CIMB Investment Bank - Malaysia
- Georgia Ports Authority, United States
- Global Business Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Metalloyd Limited - United Kingdom
- Gujarat Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Siam City Cement PLC, Thailand
- Orica Australia Pty. Ltd.
- Kaltim Prima Coal - Indonesia
- Karaikal Port Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Aboitiz Power Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Indo Tambangraya Megah - Indonesia
- Electricity Authority, New Zealand
- Bhushan Steel Limited - India
- Bulk Trading Sa - Switzerland
- Energy Development Corp, Philippines
- TeaM Sual Corporation - Philippines
- Romanian Commodities Exchange
- Mintek Dendrill Indonesia
- The Treasury - Australian Government
- Uttam Galva Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Power Finance Corporation Ltd., India
- Mjunction Services Limited - India
- The State Trading Corporation of India Ltd
- Salva Resources Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Tata Chemicals Ltd - India
- Maheswari Brothers Coal Limited - India
- Meenaskhi Energy Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Malabar Cements Ltd - India
- Simpson Spence & Young - Indonesia
- Straits Asia Resources Limited - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Lanco Infratech Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Star Paper Mills Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Port Waratah Coal Services - Australia
- SN Aboitiz Power Inc, Philippines
- Siam City Cement - Thailand
- IHS Mccloskey Coal Group - USA
- GMR Energy Limited - India
- Price Waterhouse Coopers - Russia
- Commonwealth Bank - Australia
- The University of Queensland
- Kumho Petrochemical, South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Therma Luzon, Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Vizag Seaport Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Carbofer General Trading SA - India
- PNOC Exploration Corporation - Philippines
- Trasteel International SA, Italy
- Petrochimia International Co. Ltd.- Taiwan
- Directorate Of Revenue Intelligence - India
- Timah Investasi Mineral - Indoneisa
- White Energy Company Limited
- Rio Tinto Coal - Australia
- Bhoruka Overseas - Indonesia
- ASAPP Information Group - India
- Borneo Indobara - Indonesia
- Bukit Baiduri Energy - Indonesia
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- India Bulls Power Limited - India
- Central Java Power - Indonesia
- Ind-Barath Power Infra Limited - India
- IEA Clean Coal Centre - UK
- Australian Commodity Traders Exchange
- Cigading International Bulk Terminal - Indonesia
- Aditya Birla Group - India
- Posco Energy - South Korea
- ICICI Bank Limited - India
- Pendopo Energi Batubara - Indonesia
- New Zealand Coal & Carbon
- Kepco SPC Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Interocean Group of Companies - India
- Neyveli Lignite Corporation Ltd, - India
- Merrill Lynch Commodities Europe
- Electricity Generating Authority of Thailand
- Eastern Energy - Thailand
- Parry Sugars Refinery, India
- Deloitte Consulting - India
- Goldman Sachs - Singapore
- Antam Resourcindo - Indonesia
- LBH Netherlands Bv - Netherlands
- Miang Besar Coal Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Mercator Lines Limited - India
- Barasentosa Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Planning Commission, India
- Oldendorff Carriers - Singapore
- Banpu Public Company Limited - Thailand
- Medco Energi Mining Internasional
- CNBM International Corporation - China
- Coastal Gujarat Power Limited - India
- Thiess Contractors Indonesia
- South Luzon Thermal Energy Corporation
- Bangladesh Power Developement Board
- Edison Trading Spa - Italy
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Sidhee Cement - India
- Petron Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Wood Mackenzie - Singapore
- Indian Energy Exchange, India
- PTC India Limited - India
- Bharathi Cement Corporation - India
- Indian Oil Corporation Limited
- Tamil Nadu electricity Board
- Videocon Industries ltd - India
- Larsen & Toubro Limited - India
- Semirara Mining Corp, Philippines
- Samtan Co., Ltd - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhatia International Limited - India
- Ambuja Cements Ltd - India
- Australian Coal Association
- Ministry of Transport, Egypt
- Dalmia Cement Bharat India
- Sindya Power Generating Company Private Ltd
- Holcim Trading Pte Ltd - Singapore
- Leighton Contractors Pty Ltd - Australia
- Cement Manufacturers Association - India
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Kideco Jaya Agung - Indonesia
- Toyota Tsusho Corporation, Japan
- Standard Chartered Bank - UAE
- Jindal Steel & Power Ltd - India
- Orica Mining Services - Indonesia
- SMC Global Power, Philippines
- GVK Power & Infra Limited - India
- Indogreen Group - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Coal and Oil Company - UAE
- Krishnapatnam Port Company Ltd. - India
- Marubeni Corporation - India
- Global Coal Blending Company Limited - Australia
- Thai Mozambique Logistica
- Chettinad Cement Corporation Ltd - India
- Sakthi Sugars Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Meralco Power Generation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Independent Power Producers Association of India
- Ministry of Mines - Canada
- Sree Jayajothi Cements Limited - India
- Sical Logistics Limited - India
- Vedanta Resources Plc - India
- Karbindo Abesyapradhi - Indoneisa
- Altura Mining Limited, Indonesia
- SMG Consultants - Indonesia
- Grasim Industreis Ltd - India
- Agrawal Coal Company - India
- Kalimantan Lumbung Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Africa Commodities Group - South Africa
- Attock Cement Pakistan Limited
- Kapuas Tunggal Persada - Indonesia
- Sinarmas Energy and Mining - Indonesia
- PowerSource Philippines DevCo
- VISA Power Limited - India
- Intertek Mineral Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Baramulti Group, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Madhucon Powers Ltd - India
- Riau Bara Harum - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- London Commodity Brokers - England
- Energy Link Ltd, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Wilmar Investment Holdings
- Anglo American - United Kingdom
- Latin American Coal - Colombia
- GN Power Mariveles Coal Plant, Philippines
- Xindia Steels Limited - India
- Heidelberg Cement - Germany
- Chamber of Mines of South Africa
- Essar Steel Hazira Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Economic Council, Georgia
- Makarim & Taira - Indonesia
- Iligan Light & Power Inc, Philippines
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