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