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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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Thursday, 26 April 12
BUKIT ASAMS 1Q OPERATING PROFIT MARGIN HAS INCREASED BY 6% TO RP. 1 TRILLION
COALspot.com - PT. Bukit Asam (Persero), the Indonesia’s state owned coal miner's 1Q, 2012 revenue has increased by 31% to Rp. 3.02 trillion ...
Thursday, 26 April 12
TAIPOWER TO BUY 1.15 MILLION TONS OF 5000 GAR COAL
COALspot.com - Taiwan Power Company intends to procure 1.125million tons of sub-bituminous coal for Taipower thermal power plant through open tender ...
Thursday, 26 April 12
TAIPOWER TO BUY 375,000 MT OF 4800 GAR COAL
COALspot.com - Taiwan Power Company intends to procure 375,000 metric tons of low sulfur sub-bituminous coal for Taipower thermal power plant ...
Thursday, 26 April 12
ADK SHIPPED 28,000 TONNES OF COAL THIS MONTH
COALspot.com - Orpheus Energy (ASX:OEG) has announced that four coal barges carrying a total of approximately 28,000 tonnes of ADK (Alam Duta K ...
Thursday, 26 April 12
DRY BULK CARRIERS RENTER FLEET AFTER IDLING, ON MARKETS RECOVERY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market seems to be back on track, not only solidifying the gains of the past couple of weeks, but also racing to new heights, recuperra ...
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- Siam City Cement - Thailand
- Georgia Ports Authority, United States
- Kideco Jaya Agung - Indonesia
- Chamber of Mines of South Africa
- Siam City Cement PLC, Thailand
- Kartika Selabumi Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Cement Manufacturers Association - India
- Central Java Power - Indonesia
- Madhucon Powers Ltd - India
- Bhatia International Limited - India
- Meenaskhi Energy Private Limited - India
- Ministry of Transport, Egypt
- Savvy Resources Ltd - HongKong
- Tamil Nadu electricity Board
- Coalindo Energy - Indonesia
- Power Finance Corporation Ltd., India
- Kepco SPC Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Sinarmas Energy and Mining - Indonesia
- SMC Global Power, Philippines
- Mintek Dendrill Indonesia
- Larsen & Toubro Limited - India
- Straits Asia Resources Limited - Singapore
- Rashtriya Ispat Nigam Limited - India
- Meralco Power Generation, Philippines
- Borneo Indobara - Indonesia
- Romanian Commodities Exchange
- Antam Resourcindo - Indonesia
- Dalmia Cement Bharat India
- Kobexindo Tractors - Indoneisa
- Toyota Tsusho Corporation, Japan
- Bangladesh Power Developement Board
- Bulk Trading Sa - Switzerland
- Xindia Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Baramulti Group, Indonesia
- PowerSource Philippines DevCo
- Ambuja Cements Ltd - India
- Global Business Power Corporation, Philippines
- Star Paper Mills Limited - India
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- Aboitiz Power Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Mines - Canada
- Bukit Asam (Persero) Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Interocean Group of Companies - India
- Coal and Oil Company - UAE
- Malabar Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Standard Chartered Bank - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Billiton Holdings Pty Ltd - Australia
- Goldman Sachs - Singapore
- McConnell Dowell - Australia
- Eastern Energy - Thailand
- Chettinad Cement Corporation Ltd - India
- The Treasury - Australian Government
- Asmin Koalindo Tuhup - Indonesia
- Intertek Mineral Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Petron Corporation, Philippines
- Energy Development Corp, Philippines
- Singapore Mercantile Exchange
- Coastal Gujarat Power Limited - India
- ASAPP Information Group - India
- Anglo American - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Price Waterhouse Coopers - Russia
- Gujarat Sidhee Cement - India
- Tata Chemicals Ltd - India
- Essar Steel Hazira Ltd - India
- GMR Energy Limited - India
- Posco Energy - South Korea
- Videocon Industries ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Mjunction Services Limited - India
- Sojitz Corporation - Japan
- Bukit Baiduri Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Indika Energy - Indonesia
- Electricity Authority, New Zealand
- Metalloyd Limited - United Kingdom
- Port Waratah Coal Services - Australia
- Holcim Trading Pte Ltd - Singapore
- Global Green Power PLC Corporation, Philippines
- MS Steel International - UAE
- Salva Resources Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Indian Oil Corporation Limited
- Barasentosa Lestari - Indonesia
- PTC India Limited - India
- Parliament of New Zealand
- Makarim & Taira - Indonesia
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
- Indian Energy Exchange, India
- Latin American Coal - Colombia
- India Bulls Power Limited - India
- Merrill Lynch Commodities Europe
- Wood Mackenzie - Singapore
- Australian Coal Association
- Independent Power Producers Association of India
- Jaiprakash Power Ventures ltd
- Uttam Galva Steels Limited - India
- Bukit Makmur.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Attock Cement Pakistan Limited
- Cigading International Bulk Terminal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Indo Tambangraya Megah - Indonesia
- VISA Power Limited - India
- Deloitte Consulting - India
- Sindya Power Generating Company Private Ltd
- South Luzon Thermal Energy Corporation
- PNOC Exploration Corporation - Philippines
- Aditya Birla Group - India
- Sakthi Sugars Limited - India
- Vizag Seaport Private Limited - India
- Oldendorff Carriers - Singapore
- Altura Mining Limited, Indonesia
- Electricity Generating Authority of Thailand
- Global Coal Blending Company Limited - Australia
- Indonesian Coal Mining Association
- Krishnapatnam Port Company Ltd. - India
- GAC Shipping (India) Pvt Ltd
- Kohat Cement Company Ltd. - Pakistan
- IHS Mccloskey Coal Group - USA
- Iligan Light & Power Inc, Philippines
- Medco Energi Mining Internasional
- PetroVietnam Power Coal Import and Supply Company
- Riau Bara Harum - Indonesia
- The State Trading Corporation of India Ltd
- Manunggal Multi Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- White Energy Company Limited
- CNBM International Corporation - China
- Semirara Mining Corp, Philippines
- Agrawal Coal Company - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Renaissance Capital - South Africa
- Australian Commodity Traders Exchange
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Africa Commodities Group - South Africa
- Binh Thuan Hamico - Vietnam
- Maheswari Brothers Coal Limited - India
- Ministry of Finance - Indonesia
- Carbofer General Trading SA - India
- Thiess Contractors Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indogreen Group - Indonesia
- International Coal Ventures Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- London Commodity Brokers - England
- Marubeni Corporation - India
- OPG Power Generation Pvt Ltd - India
- Parry Sugars Refinery, India
- Wilmar Investment Holdings
- Gujarat Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Jindal Steel & Power Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Minerals Council of Australia
- AsiaOL BioFuels Corp., Philippines
- Edison Trading Spa - Italy
- Kapuas Tunggal Persada - Indonesia
- Mercator Lines Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Vedanta Resources Plc - India
- GN Power Mariveles Coal Plant, Philippines
- Samtan Co., Ltd - South Korea
- Globalindo Alam Lestari - Indonesia
- Bhushan Steel Limited - India
- Directorate Of Revenue Intelligence - India
- Bharathi Cement Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- The University of Queensland
- Central Electricity Authority - India
- Gujarat Mineral Development Corp Ltd - India
- Orica Australia Pty. Ltd.
- LBH Netherlands Bv - Netherlands
- Energy Link Ltd, New Zealand
- Leighton Contractors Pty Ltd - Australia
- Heidelberg Cement - Germany
- Directorate General of MIneral and Coal - Indonesia
- SMG Consultants - Indonesia
- Eastern Coal Council - USA
- Lanco Infratech Ltd - India
- Trasteel International SA, Italy
- Thai Mozambique Logistica
- Petrochimia International Co. Ltd.- Taiwan
- Karaikal Port Pvt Ltd - India
- Grasim Industreis Ltd - India
- European Bulk Services B.V. - Netherlands
- Orica Mining Services - Indonesia
- Economic Council, Georgia
- Sarangani Energy Corporation, Philippines
- Mercuria Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Planning Commission, India
- Semirara Mining and Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- New Zealand Coal & Carbon
- IEA Clean Coal Centre - UK
- Commonwealth Bank - Australia
- Sical Logistics Limited - India
- Bhoruka Overseas - Indonesia
- GVK Power & Infra Limited - India
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