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