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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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Friday, 04 May 12
DEMOLITION KEY FOR DRY BULK MARKET RECOVERY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The overflow of newbuilding vessels which “spilled over” into 2012 from 2011 brought the dry bulk market to a near collapse level at the ...
Thursday, 03 May 12
DRY BULK MARKET REMAINS INACTIVE, POSTING MILD DECREASE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept retreating this week, although at a very low pace, on the back of a lull in demand. The industry's benchmark, th ...
Thursday, 03 May 12
MINERS DEMAND LEGAL CERTAINTY ON PRE-BAN INTERIM POLICY - THE JAKARTA POST
The Jakarta Post reported that, Mining companies represented by the Indonesian Mining Association (IMA) welcomed the government’s plan to impo ...
Thursday, 03 May 12
HANDY EAST COAST INDIA - CHINA AROUND USD 7000 - FEARNLEYS AS
Handy - Stable demand in the Atlantic offered good rates for the tonnage.
USG/Cont was worth USD 17500 and more. Baltic and Black Sea appeared to ...
Wednesday, 02 May 12
CHINA BLACKOUTS HIGHLIGHT PRICING POLICY WEAKNESS - FITCH
Fitch reported that, the likelihood of further electricity blackouts in China this summer underlines Fitch's view of the basic problem f ...
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- Indian Oil Corporation Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Attock Cement Pakistan Limited
- Chamber of Mines of South Africa
- Meralco Power Generation, Philippines
- IEA Clean Coal Centre - UK
- Bhushan Steel Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Makarim & Taira - Indonesia
- Videocon Industries ltd - India
- Kideco Jaya Agung - Indonesia
- Toyota Tsusho Corporation, Japan
- Kohat Cement Company Ltd. - Pakistan
- Global Coal Blending Company Limited - Australia
- Power Finance Corporation Ltd., India
- Electricity Authority, New Zealand
- ICICI Bank Limited - India
- Carbofer General Trading SA - India
- Mjunction Services Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Star Paper Mills Limited - India
- McConnell Dowell - Australia
- Coastal Gujarat Power Limited - India
- India Bulls Power Limited - India
- Thiess Contractors Indonesia
- Alfred C Toepfer International GmbH - Germany
- Medco Energi Mining Internasional
- Borneo Indobara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Semirara Mining Corp, Philippines
- Thai Mozambique Logistica
- Iligan Light & Power Inc, Philippines
- Eastern Energy - Thailand
- Orica Australia Pty. Ltd.
- Planning Commission, India
- Georgia Ports Authority, United States
- Timah Investasi Mineral - Indoneisa
- Baramulti Group, Indonesia
- Kepco SPC Power Corporation, Philippines
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Cigading International Bulk Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Minerals Council of Australia
- Global Business Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Singapore Mercantile Exchange
- Merrill Lynch Commodities Europe
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Xindia Steels Limited - India
- Goldman Sachs - Singapore
- Bukit Makmur.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Globalindo Alam Lestari - Indonesia
- GMR Energy Limited - India
- Oldendorff Carriers - Singapore
- Directorate Of Revenue Intelligence - India
- Ministry of Mines - Canada
- Vedanta Resources Plc - India
- Vijayanagar Sugar Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Central Java Power - Indonesia
- Tata Chemicals Ltd - India
- VISA Power Limited - India
- Essar Steel Hazira Ltd - India
- Africa Commodities Group - South Africa
- Krishnapatnam Port Company Ltd. - India
- Meenaskhi Energy Private Limited - India
- Indika Energy - Indonesia
- Larsen & Toubro Limited - India
- Kapuas Tunggal Persada - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Mercator Lines Limited - India
- SN Aboitiz Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- SMG Consultants - Indonesia
- Antam Resourcindo - Indonesia
- Bulk Trading Sa - Switzerland
- PNOC Exploration Corporation - Philippines
- Eastern Coal Council - USA
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Aboitiz Power Corporation - Philippines
- Rio Tinto Coal - Australia
- Salva Resources Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Billiton Holdings Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- Independent Power Producers Association of India
- Bayan Resources Tbk. - Indonesia
- White Energy Company Limited
- Latin American Coal - Colombia
- Gujarat Mineral Development Corp Ltd - India
- Grasim Industreis Ltd - India
- The State Trading Corporation of India Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parliament of New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Commonwealth Bank - Australia
- Ind-Barath Power Infra Limited - India
- Mercuria Energy - Indonesia
- Parry Sugars Refinery, India
- Karbindo Abesyapradhi - Indoneisa
- Uttam Galva Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Altura Mining Limited, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Heidelberg Cement - Germany
- Vizag Seaport Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Sakthi Sugars Limited - India
- GVK Power & Infra Limited - India
- New Zealand Coal & Carbon
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- MS Steel International - UAE
- Deloitte Consulting - India
- Pendopo Energi Batubara - Indonesia
- Kumho Petrochemical, South Korea
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- Mintek Dendrill Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Banpu Public Company Limited - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- Holcim Trading Pte Ltd - Singapore
- Therma Luzon, Inc, Philippines
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Indian Energy Exchange, India
- Indonesian Coal Mining Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Port Waratah Coal Services - Australia
- Edison Trading Spa - Italy
- Straits Asia Resources Limited - Singapore
- Manunggal Multi Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Romanian Commodities Exchange
- GN Power Mariveles Coal Plant, Philippines
- The Treasury - Australian Government
- Tamil Nadu electricity Board
- Aditya Birla Group - India
- Intertek Mineral Services - Indonesia
- PowerSource Philippines DevCo
- TNB Fuel Sdn Bhd - Malaysia
- European Bulk Services B.V. - Netherlands
- Semirara Mining and Power Corporation, Philippines
- The University of Queensland
- Sindya Power Generating Company Private Ltd
- Maharashtra Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Australian Commodity Traders Exchange
- PTC India Limited - India
- Chettinad Cement Corporation Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Wilmar Investment Holdings
- Petrochimia International Co. Ltd.- Taiwan
- Malabar Cements Ltd - India
- Anglo American - United Kingdom
- ASAPP Information Group - India
- Marubeni Corporation - India
- Cement Manufacturers Association - India
- Central Electricity Authority - India
- Ministry of Finance - Indonesia
- Siam City Cement - Thailand
- Maheswari Brothers Coal Limited - India
- Posco Energy - South Korea
- Kaltim Prima Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Sinarmas Energy and Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Siam City Cement PLC, Thailand
- Energy Link Ltd, New Zealand
- Madhucon Powers Ltd - India
- Orica Mining Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Petron Corporation, Philippines
- London Commodity Brokers - England
- Ceylon Electricity Board - Sri Lanka
- Samtan Co., Ltd - South Korea
- Energy Development Corp, Philippines
- Gujarat Sidhee Cement - India
- CNBM International Corporation - China
- Miang Besar Coal Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- South Luzon Thermal Energy Corporation
- Renaissance Capital - South Africa
- LBH Netherlands Bv - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Ministry of Transport, Egypt
- Sical Logistics Limited - India
- Price Waterhouse Coopers - Russia
- Sree Jayajothi Cements Limited - India
- Dalmia Cement Bharat India
- Coal and Oil Company - UAE
- Bharathi Cement Corporation - India
- Lanco Infratech Ltd - India
- Jaiprakash Power Ventures ltd
- Standard Chartered Bank - UAE
- Economic Council, Georgia
- Bukit Baiduri Energy - Indonesia
- Bhatia International Limited - India
- Metalloyd Limited - United Kingdom
- Interocean Group of Companies - India
- SMC Global Power, Philippines
- Bhoruka Overseas - Indonesia
- Ambuja Cements Ltd - India
- Indogreen Group - Indonesia
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