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