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