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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, 11 April 12
TWO PERCENT OF IBP CONCESSION CONTAINS 42 MMT OF COAL
COALspot.com - 42.35 million ton of coal found in just 2% of PT Insani Bara Perkasa’s total concession area of 24,477 hectare.
Accord ...
Wednesday, 11 April 12
DRY BULK MARKET STILL SUBDUED, RECOVERY NOT YET SEEN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market entered the new week after the past days of easter holidays in western countries in a subdued mood. The industry’s benchma ...
Monday, 09 April 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The first week of April ended with the Baltic Dry Index falling below 950 points, before Catholic Easter, and capesizes showing a modest upturn with ...
Sunday, 08 April 12
CHARTER RATES COULD CONTINUE TO BE SOFT NEXT WEEK - VISTAAR
COALspot.com - The BDI was almost at same levels closing slightly lower by 0.64 pct at 928 points.
The Cape index was up by 6.73 pct closing at ...
Friday, 06 April 12
INDONESIAN HBA FALL TO LOWEST LEVEL SINCE JANUARY 2011
COALspot.com - Indonesian HBA fall to lowest level since January 2011 this month. The monthly coal reference price for coal sales in April fal ...
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- Chettinad Cement Corporation Ltd - India
- Directorate Of Revenue Intelligence - India
- White Energy Company Limited
- Electricity Generating Authority of Thailand
- Eastern Energy - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Samtan Co., Ltd - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Aboitiz Power Corporation - Philippines
- CNBM International Corporation - China
- Sree Jayajothi Cements Limited - India
- Australian Commodity Traders Exchange
- Semirara Mining Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Sojitz Corporation - Japan
- Rashtriya Ispat Nigam Limited - India
- Planning Commission, India
- Bulk Trading Sa - Switzerland
- Ceylon Electricity Board - Sri Lanka
- IEA Clean Coal Centre - UK
- Australian Coal Association
- Cement Manufacturers Association - India
- Bangladesh Power Developement Board
- London Commodity Brokers - England
- Formosa Plastics Group - Taiwan
- Thai Mozambique Logistica
- Marubeni Corporation - India
- Minerals Council of Australia
- Malabar Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Jindal Steel & Power Ltd - India
- Salva Resources Pvt Ltd - India
- Mercuria Energy - Indonesia
- Heidelberg Cement - Germany
- The Treasury - Australian Government
- Globalindo Alam Lestari - Indonesia
- Larsen & Toubro Limited - India
- Videocon Industries ltd - India
- Straits Asia Resources Limited - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Altura Mining Limited, Indonesia
- Parliament of New Zealand
- Holcim Trading Pte Ltd - Singapore
- Sakthi Sugars Limited - India
- Port Waratah Coal Services - Australia
- Energy Development Corp, Philippines
- Price Waterhouse Coopers - Russia
- Toyota Tsusho Corporation, Japan
- SN Aboitiz Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Ministry of Transport, Egypt
- Uttam Galva Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Iligan Light & Power Inc, Philippines
- Edison Trading Spa - Italy
- Grasim Industreis Ltd - India
- The University of Queensland
- Kartika Selabumi Mining - Indonesia
- Anglo American - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Coastal Gujarat Power Limited - India
- Sindya Power Generating Company Private Ltd
- Georgia Ports Authority, United States
- Global Coal Blending Company Limited - Australia
- Commonwealth Bank - Australia
- Economic Council, Georgia
- Ind-Barath Power Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Authority, New Zealand
- Metalloyd Limited - United Kingdom
- Chamber of Mines of South Africa
- Standard Chartered Bank - UAE
- Africa Commodities Group - South Africa
- Indonesian Coal Mining Association
- Vedanta Resources Plc - India
- Central Java Power - Indonesia
- Kapuas Tunggal Persada - Indonesia
- South Luzon Thermal Energy Corporation
- Karaikal Port Pvt Ltd - India
- GMR Energy Limited - India
- India Bulls Power Limited - India
- Parry Sugars Refinery, India
- Simpson Spence & Young - Indonesia
- Attock Cement Pakistan Limited
- Tamil Nadu electricity Board
- PetroVietnam Power Coal Import and Supply Company
- Mercator Lines Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Xindia Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Meralco Power Generation, Philippines
- Lanco Infratech Ltd - India
- Independent Power Producers Association of India
- Intertek Mineral Services - Indonesia
- LBH Netherlands Bv - Netherlands
- OPG Power Generation Pvt Ltd - India
- Makarim & Taira - Indonesia
- PTC India Limited - India
- Sical Logistics Limited - India
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- Sarangani Energy Corporation, Philippines
- Indian Oil Corporation Limited
- Bayan Resources Tbk. - Indonesia
- The State Trading Corporation of India Ltd
- Carbofer General Trading SA - India
- Dalmia Cement Bharat India
- GVK Power & Infra Limited - India
- Mintek Dendrill Indonesia
- Vizag Seaport Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Savvy Resources Ltd - HongKong
- Kideco Jaya Agung - Indonesia
- Eastern Coal Council - USA
- Borneo Indobara - Indonesia
- Mjunction Services Limited - India
- Bhatia International Limited - India
- Bukit Baiduri Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhushan Steel Limited - India
- Krishnapatnam Port Company Ltd. - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Central Electricity Authority - India
- Therma Luzon, Inc, Philippines
- Star Paper Mills Limited - India
- San Jose City I Power Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Barasentosa Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- SMG Consultants - Indonesia
- Rio Tinto Coal - Australia
- New Zealand Coal & Carbon
- Kepco SPC Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Posco Energy - South Korea
- MS Steel International - UAE
- Interocean Group of Companies - India
- Medco Energi Mining Internasional
- Directorate General of MIneral and Coal - Indonesia
- Madhucon Powers Ltd - India
- Siam City Cement - Thailand
- McConnell Dowell - Australia
- Asmin Koalindo Tuhup - Indonesia
- Aditya Birla Group - India
- Coalindo Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- European Bulk Services B.V. - Netherlands
- Ambuja Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Latin American Coal - Colombia
- Meenaskhi Energy Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Global Business Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Agrawal Coal Company - India
- Pipit Mutiara Jaya. PT, Indonesia
- Maheswari Brothers Coal Limited - India
- Singapore Mercantile Exchange
- Deloitte Consulting - India
- Romanian Commodities Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMC Global Power, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indogreen Group - Indonesia
- Goldman Sachs - Singapore
- Kohat Cement Company Ltd. - Pakistan
- VISA Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Petron Corporation, Philippines
- Energy Link Ltd, New Zealand
- Tata Chemicals Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Finance - Indonesia
- Global Green Power PLC Corporation, Philippines
- Indika Energy - Indonesia
- ASAPP Information Group - India
- Oldendorff Carriers - Singapore
- PowerSource Philippines DevCo
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wilmar Investment Holdings
- Jaiprakash Power Ventures ltd
- Riau Bara Harum - Indonesia
- Baramulti Group, Indonesia
- Kaltim Prima Coal - Indonesia
- Antam Resourcindo - Indonesia
- Bukit Makmur.PT - Indonesia
- Ministry of Mines - Canada
- Orica Australia Pty. Ltd.
- Cigading International Bulk Terminal - Indonesia
- Renaissance Capital - South Africa
- Kumho Petrochemical, South Korea
- Indian Energy Exchange, India
- Karbindo Abesyapradhi - Indoneisa
- ICICI Bank Limited - India
- Leighton Contractors Pty Ltd - Australia
- Trasteel International SA, Italy
- Thiess Contractors Indonesia
- Wood Mackenzie - Singapore
- TeaM Sual Corporation - Philippines
- Gujarat Sidhee Cement - India
- Banpu Public Company Limited - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Bharathi Cement Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- Essar Steel Hazira Ltd - India
- PNOC Exploration Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
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