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