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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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Friday, 06 April 12
DRY BULK MARKET SWIFT TO HALT FALL ON RENEWED DEMAND FOR CAPESIZES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk managed to put a stop to the recent falls, which came as a result of a lacklustre demand for smaller vessel sizes. Although this trend ...
Thursday, 05 April 12
AKR COAL FIRST EXPORT SHIPMENT OF COAL SEABORNE
PT Anugrah Karya Raya (AKR Coal) subsidiary of PT AKR Corporindo Tbk., Indonesia’s leading integrated supply chain solutions provider and larg ...
Thursday, 05 April 12
DRY BULK MARKET STALLS AS TREND IS REVERSED - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has halted its month-long rally, with the BDI (Baltic Dry Index) retreating yesterday for a second consecutive session. Industry ...
Wednesday, 04 April 12
OIL MAY JUMP TO $150PB IF IRAN ATTACKED: EXPERT - KUNA / HELLENIC SHIPPING
Prices of oil will not drop below level of $100 per barrel and may jump to $150 pb in the coming two months, according to the prominent Kuwaiti expe ...
Wednesday, 04 April 12
CHURCHILL MINING TO ACCELERATE INTERNATIONAL ARBITRATION AGAINST INDONESIA
Churchill Mining plc (AIM: CHL), advises that notations on the Indonesian Supreme Court's register of cases shows the Supreme Court has rejected th ...
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- Standard Chartered Bank - UAE
- Power Finance Corporation Ltd., India
- Medco Energi Mining Internasional
- Pendopo Energi Batubara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Price Waterhouse Coopers - Russia
- Indogreen Group - Indonesia
- Savvy Resources Ltd - HongKong
- SMC Global Power, Philippines
- Tamil Nadu electricity Board
- Videocon Industries ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- Iligan Light & Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Port Waratah Coal Services - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Salva Resources Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- MS Steel International - UAE
- Edison Trading Spa - Italy
- Commonwealth Bank - Australia
- Kalimantan Lumbung Energi - Indonesia
- Romanian Commodities Exchange
- Singapore Mercantile Exchange
- Madhucon Powers Ltd - India
- Sarangani Energy Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Siam City Cement PLC, Thailand
- Toyota Tsusho Corporation, Japan
- Barasentosa Lestari - Indonesia
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
- Indian Energy Exchange, India
- Trasteel International SA, Italy
- Directorate Of Revenue Intelligence - India
- VISA Power Limited - India
- Antam Resourcindo - Indonesia
- South Luzon Thermal Energy Corporation
- Bukit Baiduri Energy - Indonesia
- Africa Commodities Group - South Africa
- AsiaOL BioFuels Corp., Philippines
- Maheswari Brothers Coal Limited - India
- Altura Mining Limited, Indonesia
- Siam City Cement - Thailand
- Meralco Power Generation, Philippines
- Simpson Spence & Young - Indonesia
- IEA Clean Coal Centre - UK
- Sojitz Corporation - Japan
- International Coal Ventures Pvt Ltd - India
- GMR Energy Limited - India
- IHS Mccloskey Coal Group - USA
- Semirara Mining Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Formosa Plastics Group - Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- India Bulls Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Central Java Power - Indonesia
- McConnell Dowell - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Borneo Indobara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Independent Power Producers Association of India
- Karbindo Abesyapradhi - Indoneisa
- Merrill Lynch Commodities Europe
- Bhushan Steel Limited - India
- Banpu Public Company Limited - Thailand
- Ministry of Transport, Egypt
- Sree Jayajothi Cements Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- The Treasury - Australian Government
- Planning Commission, India
- Star Paper Mills Limited - India
- Rashtriya Ispat Nigam Limited - India
- Aditya Birla Group - India
- Kepco SPC Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Dalmia Cement Bharat India
- New Zealand Coal & Carbon
- SMG Consultants - Indonesia
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Miang Besar Coal Terminal - Indonesia
- Latin American Coal - Colombia
- Coalindo Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Oil Corporation Limited
- Semirara Mining and Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Goldman Sachs - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Posco Energy - South Korea
- Mintek Dendrill Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- CNBM International Corporation - China
- LBH Netherlands Bv - Netherlands
- Georgia Ports Authority, United States
- Ministry of Finance - Indonesia
- Kideco Jaya Agung - Indonesia
- Bangladesh Power Developement Board
- Karaikal Port Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Intertek Mineral Services - Indonesia
- Chamber of Mines of South Africa
- Australian Commodity Traders Exchange
- Grasim Industreis Ltd - India
- Orica Mining Services - Indonesia
- Sical Logistics Limited - India
- Marubeni Corporation - India
- Coastal Gujarat Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Sidhee Cement - India
- Petron Corporation, Philippines
- Minerals Council of Australia
- Krishnapatnam Port Company Ltd. - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Sakthi Sugars Limited - India
- Heidelberg Cement - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Authority, New Zealand
- Globalindo Alam Lestari - Indonesia
- Therma Luzon, Inc, Philippines
- Central Electricity Authority - India
- White Energy Company Limited
- TeaM Sual Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Binh Thuan Hamico - Vietnam
- Attock Cement Pakistan Limited
- Baramulti Group, Indonesia
- Indika Energy - Indonesia
- Energy Development Corp, Philippines
- Bharathi Cement Corporation - India
- Australian Coal Association
- SN Aboitiz Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Thiess Contractors Indonesia
- Parry Sugars Refinery, India
- Straits Asia Resources Limited - Singapore
- Vedanta Resources Plc - India
- Vizag Seaport Private Limited - India
- Cement Manufacturers Association - India
- Mercuria Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Wilmar Investment Holdings
- ASAPP Information Group - India
- Indo Tambangraya Megah - Indonesia
- Coal and Oil Company - UAE
- Makarim & Taira - Indonesia
- Eastern Energy - Thailand
- The State Trading Corporation of India Ltd
- Deloitte Consulting - India
- Mercator Lines Limited - India
- Chettinad Cement Corporation Ltd - India
- Orica Australia Pty. Ltd.
- Jorong Barutama Greston.PT - Indonesia
- Anglo American - United Kingdom
- The University of Queensland
- Energy Link Ltd, New Zealand
- Global Coal Blending Company Limited - Australia
- Electricity Generating Authority of Thailand
- Ind-Barath Power Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- CIMB Investment Bank - Malaysia
- PNOC Exploration Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Eastern Coal Council - USA
- Global Business Power Corporation, Philippines
- Bhatia International Limited - India
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Samtan Co., Ltd - South Korea
- Larsen & Toubro Limited - India
- Bayan Resources Tbk. - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- London Commodity Brokers - England
- Tata Chemicals Ltd - India
- PTC India Limited - India
- Interocean Group of Companies - India
- Wood Mackenzie - Singapore
- Rio Tinto Coal - Australia
- Agrawal Coal Company - India
- Manunggal Multi Energi - Indonesia
- Ambuja Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Indonesian Coal Mining Association
- Oldendorff Carriers - Singapore
- ICICI Bank Limited - India
- GVK Power & Infra Limited - India
- Jindal Steel & Power Ltd - India
- Lanco Infratech Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Xindia Steels Limited - India
- Ministry of Mines - Canada
- Riau Bara Harum - Indonesia
- Carbofer General Trading SA - India
- Thai Mozambique Logistica
- Malabar Cements Ltd - India
- Renaissance Capital - South Africa
- Parliament of New Zealand
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