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