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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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Wednesday, 18 April 12
INDONESIA TO INTRODUCE EXPORT DUTY ON MINERAL ORES BY 6 MAY 2012
The Indonesian government is scheduled to issue regulation on export duty for minerals before May 6, 2012.
According to Bisnis Indonesia, as quot ...
Sunday, 15 April 12
THE SPOT FIXTURE RATES FOR SUPRAMAX IN SE ASIA SAW SOME SOFTENING OF CHARTER RATES - VISTAAR
COALspot.com - The market seem to be holding and except for Supramax and handy size index all other index was up with BDI up by 4.74 pct closing at ...
Friday, 13 April 12
MINERS OPPOSE GOVTS EXPORT TAX PLAN - THE JAKARTA POST
The Jakarta Post reported that, Indonesian mining companies have strongly protested the government’s plan to impose a 25 percent export tax on ...
Friday, 13 April 12
S&P CAUTIONS AGAINST NEW INDONESIAN MINING REGULATIONS - THE JAKARTA GLOBE
The Jakarta Globe reported that, Investors may have expressed concerns about looming new mining regulations, but ratings agency Standard & Poor& ...
Thursday, 12 April 12
FIRST QUARTER OF 2012 SAW AN ADDITIONAL 24.2 MILLION DWT OF DRY BULK CARRIERS ENTERING THE FLEET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The inflow of newbuilt dry bulk vessels was larger than expected in the first quarter of 2012. As much as 24.2 million DWT were added to the fleet. ...
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- Energy Development Corp, Philippines
- Riau Bara Harum - Indonesia
- Indian Energy Exchange, India
- Singapore Mercantile Exchange
- Africa Commodities Group - South Africa
- Kapuas Tunggal Persada - Indonesia
- Kideco Jaya Agung - Indonesia
- Kartika Selabumi Mining - Indonesia
- Mercator Lines Limited - India
- IHS Mccloskey Coal Group - USA
- Standard Chartered Bank - UAE
- Oldendorff Carriers - Singapore
- The University of Queensland
- Deloitte Consulting - India
- Antam Resourcindo - Indonesia
- VISA Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Merrill Lynch Commodities Europe
- Ministry of Transport, Egypt
- Jorong Barutama Greston.PT - Indonesia
- MS Steel International - UAE
- Baramulti Group, Indonesia
- Gujarat Sidhee Cement - India
- Vizag Seaport Private Limited - India
- Grasim Industreis Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Parry Sugars Refinery, India
- Therma Luzon, Inc, Philippines
- Kumho Petrochemical, South Korea
- Uttam Galva Steels Limited - India
- PowerSource Philippines DevCo
- Petrochimia International Co. Ltd.- Taiwan
- AsiaOL BioFuels Corp., Philippines
- Globalindo Alam Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Renaissance Capital - South Africa
- Malabar Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- Medco Energi Mining Internasional
- Formosa Plastics Group - Taiwan
- Electricity Generating Authority of Thailand
- Karaikal Port Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- TeaM Sual Corporation - Philippines
- White Energy Company Limited
- Rashtriya Ispat Nigam Limited - India
- ASAPP Information Group - India
- Kalimantan Lumbung Energi - Indonesia
- Goldman Sachs - Singapore
- Leighton Contractors Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Chamber of Mines of South Africa
- Larsen & Toubro Limited - India
- SMG Consultants - Indonesia
- Posco Energy - South Korea
- Jaiprakash Power Ventures ltd
- Bhushan Steel Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sree Jayajothi Cements Limited - India
- Anglo American - United Kingdom
- Thiess Contractors Indonesia
- Altura Mining Limited, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Madhucon Powers Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Coalindo Energy - Indonesia
- Indian Oil Corporation Limited
- Neyveli Lignite Corporation Ltd, - India
- New Zealand Coal & Carbon
- Bayan Resources Tbk. - Indonesia
- Vedanta Resources Plc - India
- Rio Tinto Coal - Australia
- Straits Asia Resources Limited - Singapore
- Australian Coal Association
- Gujarat Electricity Regulatory Commission - India
- Coal and Oil Company - UAE
- Directorate Of Revenue Intelligence - India
- European Bulk Services B.V. - Netherlands
- Interocean Group of Companies - India
- Bharathi Cement Corporation - India
- Cement Manufacturers Association - India
- TNB Fuel Sdn Bhd - Malaysia
- Videocon Industries ltd - India
- Jindal Steel & Power Ltd - India
- Semirara Mining Corp, Philippines
- GVK Power & Infra Limited - India
- SMC Global Power, Philippines
- Essar Steel Hazira Ltd - India
- Electricity Authority, New Zealand
- London Commodity Brokers - England
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Australian Commodity Traders Exchange
- Parliament of New Zealand
- Bhoruka Overseas - Indonesia
- Heidelberg Cement - Germany
- Wood Mackenzie - Singapore
- Krishnapatnam Port Company Ltd. - India
- Xindia Steels Limited - India
- Maheswari Brothers Coal Limited - India
- Borneo Indobara - Indonesia
- Tata Chemicals Ltd - India
- San Jose City I Power Corp, Philippines
- Agrawal Coal Company - India
- Kepco SPC Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Coastal Gujarat Power Limited - India
- Toyota Tsusho Corporation, Japan
- Savvy Resources Ltd - HongKong
- Indo Tambangraya Megah - Indonesia
- Miang Besar Coal Terminal - Indonesia
- GMR Energy Limited - India
- Salva Resources Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- OPG Power Generation Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Meenaskhi Energy Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Mining Services - Indonesia
- The State Trading Corporation of India Ltd
- Semirara Mining and Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Minerals Council of Australia
- Indogreen Group - Indonesia
- PNOC Exploration Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Siam City Cement - Thailand
- Price Waterhouse Coopers - Russia
- Mercuria Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Wilmar Investment Holdings
- Pipit Mutiara Jaya. PT, Indonesia
- Romanian Commodities Exchange
- Latin American Coal - Colombia
- Eastern Energy - Thailand
- Binh Thuan Hamico - Vietnam
- Intertek Mineral Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- GAC Shipping (India) Pvt Ltd
- Central Electricity Authority - India
- Metalloyd Limited - United Kingdom
- McConnell Dowell - Australia
- Marubeni Corporation - India
- Ministry of Finance - Indonesia
- PTC India Limited - India
- Bukit Baiduri Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Petron Corporation, Philippines
- Bhatia International Limited - India
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
- Samtan Co., Ltd - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Banpu Public Company Limited - Thailand
- Kobexindo Tractors - Indoneisa
- Bulk Trading Sa - Switzerland
- Edison Trading Spa - Italy
- Carbofer General Trading SA - India
- South Luzon Thermal Energy Corporation
- Sojitz Corporation - Japan
- International Coal Ventures Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Ambuja Cements Ltd - India
- Indonesian Coal Mining Association
- Kohat Cement Company Ltd. - Pakistan
- Economic Council, Georgia
- Siam City Cement PLC, Thailand
- Global Coal Blending Company Limited - Australia
- Orica Australia Pty. Ltd.
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- CNBM International Corporation - China
- Aditya Birla Group - India
- Central Java Power - Indonesia
- Planning Commission, India
- Commonwealth Bank - Australia
- Energy Link Ltd, New Zealand
- Eastern Coal Council - USA
- Ministry of Mines - Canada
- Global Green Power PLC Corporation, Philippines
- Meralco Power Generation, Philippines
- Tamil Nadu electricity Board
- Timah Investasi Mineral - Indoneisa
- Sical Logistics Limited - India
- Alfred C Toepfer International GmbH - Germany
- Aboitiz Power Corporation - Philippines
- Sakthi Sugars Limited - India
- Georgia Ports Authority, United States
- Gujarat Mineral Development Corp Ltd - India
- Thai Mozambique Logistica
- Star Paper Mills Limited - India
- Manunggal Multi Energi - Indonesia
- The Treasury - Australian Government
- Barasentosa Lestari - Indonesia
- Trasteel International SA, Italy
- Cigading International Bulk Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- Kaltim Prima Coal - Indonesia
- Independent Power Producers Association of India
- Indika Energy - Indonesia
- IEA Clean Coal Centre - UK
- Lanco Infratech Ltd - India
- Attock Cement Pakistan Limited
- Makarim & Taira - Indonesia
- Dalmia Cement Bharat India
- Power Finance Corporation Ltd., India
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