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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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Monday, 02 April 12
BANGLADESH EYEING INDONESIA FOR COAL
COALspot.com - The high level executives of Center for Environmental and Geographic Information Services (CEGIS) of Bangladesh is visiting Ind ...
Monday, 02 April 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The first quarter of the New Year ended with the BDI standing 42% above from the 26 years’ bottom low of 662 points on February 1st, and a pos ...
Saturday, 31 March 12
THE BDI CONTINUED TO MOVE UPWARD - VISTAAR
COALspot.com - The BDI continued to move upward and rose by 2.86 pct closing at 934 points.
The cape index was up by 3.14 pct closing at 1,412 po ...
Saturday, 31 March 12
SRI LANKA IMPORTS 152,555 MT OF INDONESIAN COAL IN FEBRUARY
COALspot.com: Indonesia, the world largest coal exporter, shipped 27.126* million tons of coal in February 2012, compared to 28.21* million to ...
Friday, 30 March 12
RECOND NUMBERS SURROUNDING THE SUPRAMAX DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Last year proved to be both a record year in the number of deliveries of dry bulkers between 40,000dwt and 64,000dwt, as well as a record year in th ...
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- Straits Asia Resources Limited - Singapore
- Iligan Light & Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Deloitte Consulting - India
- Goldman Sachs - Singapore
- Intertek Mineral Services - Indonesia
- Parliament of New Zealand
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- Grasim Industreis Ltd - India
- Sarangani Energy Corporation, Philippines
- SMC Global Power, Philippines
- PowerSource Philippines DevCo
- Kapuas Tunggal Persada - Indonesia
- Coal and Oil Company - UAE
- Timah Investasi Mineral - Indoneisa
- Tata Chemicals Ltd - India
- Indian Oil Corporation Limited
- Singapore Mercantile Exchange
- Posco Energy - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- Parry Sugars Refinery, India
- Central Electricity Authority - India
- Heidelberg Cement - Germany
- Merrill Lynch Commodities Europe
- South Luzon Thermal Energy Corporation
- Karaikal Port Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- ICICI Bank Limited - India
- Indian Energy Exchange, India
- Cement Manufacturers Association - India
- Independent Power Producers Association of India
- Global Coal Blending Company Limited - Australia
- Chamber of Mines of South Africa
- Orica Australia Pty. Ltd.
- Mjunction Services Limited - India
- White Energy Company Limited
- Samtan Co., Ltd - South Korea
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- Interocean Group of Companies - India
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Larsen & Toubro Limited - India
- Price Waterhouse Coopers - Russia
- Port Waratah Coal Services - Australia
- Medco Energi Mining Internasional
- Gujarat Mineral Development Corp Ltd - India
- Bukit Baiduri Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Baramulti Group, Indonesia
- Wilmar Investment Holdings
- Coastal Gujarat Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Meralco Power Generation, Philippines
- Ministry of Finance - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Mercuria Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- GVK Power & Infra Limited - India
- PNOC Exploration Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Sical Logistics Limited - India
- Indogreen Group - Indonesia
- Indo Tambangraya Megah - Indonesia
- The Treasury - Australian Government
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Edison Trading Spa - Italy
- Toyota Tsusho Corporation, Japan
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement - Thailand
- Energy Link Ltd, New Zealand
- Anglo American - United Kingdom
- The State Trading Corporation of India Ltd
- Jindal Steel & Power Ltd - India
- Bayan Resources Tbk. - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Orica Mining Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- PTC India Limited - India
- Simpson Spence & Young - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Kepco SPC Power Corporation, Philippines
- Mercator Lines Limited - India
- Agrawal Coal Company - India
- Ministry of Mines - Canada
- IHS Mccloskey Coal Group - USA
- Global Business Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Malabar Cements Ltd - India
- Electricity Authority, New Zealand
- India Bulls Power Limited - India
- Georgia Ports Authority, United States
- Australian Coal Association
- Siam City Cement PLC, Thailand
- Semirara Mining Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- MS Steel International - UAE
- Pendopo Energi Batubara - Indonesia
- Sakthi Sugars Limited - India
- Coalindo Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bulk Trading Sa - Switzerland
- Ambuja Cements Ltd - India
- VISA Power Limited - India
- Tamil Nadu electricity Board
- Aditya Birla Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Videocon Industries ltd - India
- Borneo Indobara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Savvy Resources Ltd - HongKong
- Kalimantan Lumbung Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Holcim Trading Pte Ltd - Singapore
- European Bulk Services B.V. - Netherlands
- Wood Mackenzie - Singapore
- Ministry of Transport, Egypt
- PetroVietnam Power Coal Import and Supply Company
- Romanian Commodities Exchange
- Makarim & Taira - Indonesia
- TeaM Sual Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Star Paper Mills Limited - India
- Indonesian Coal Mining Association
- Economic Council, Georgia
- Mintek Dendrill Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhatia International Limited - India
- Alfred C Toepfer International GmbH - Germany
- GMR Energy Limited - India
- Metalloyd Limited - United Kingdom
- Marubeni Corporation - India
- Kobexindo Tractors - Indoneisa
- Minerals Council of Australia
- Aboitiz Power Corporation - Philippines
- Standard Chartered Bank - UAE
- Sinarmas Energy and Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Attock Cement Pakistan Limited
- Indika Energy - Indonesia
- McConnell Dowell - Australia
- Dalmia Cement Bharat India
- Latin American Coal - Colombia
- Vedanta Resources Plc - India
- IEA Clean Coal Centre - UK
- Thai Mozambique Logistica
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petron Corporation, Philippines
- Commonwealth Bank - Australia
- Eastern Energy - Thailand
- Kaltim Prima Coal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- The University of Queensland
- Ceylon Electricity Board - Sri Lanka
- Bhoruka Overseas - Indonesia
- Madhucon Powers Ltd - India
- Carbofer General Trading SA - India
- San Jose City I Power Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Africa Commodities Group - South Africa
- SN Aboitiz Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- New Zealand Coal & Carbon
- Essar Steel Hazira Ltd - India
- Kumho Petrochemical, South Korea
- Thiess Contractors Indonesia
- Eastern Coal Council - USA
- Vizag Seaport Private Limited - India
- Sree Jayajothi Cements Limited - India
- Semirara Mining and Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Barasentosa Lestari - Indonesia
- Bharathi Cement Corporation - India
- Altura Mining Limited, Indonesia
- Antam Resourcindo - Indonesia
- Global Green Power PLC Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Australian Commodity Traders Exchange
- AsiaOL BioFuels Corp., Philippines
- Bhushan Steel Limited - India
- Formosa Plastics Group - Taiwan
- Billiton Holdings Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Energy Development Corp, Philippines
- Lanco Infratech Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Generating Authority of Thailand
- Renaissance Capital - South Africa
- Oldendorff Carriers - Singapore
- Trasteel International SA, Italy
- Manunggal Multi Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- ASAPP Information Group - India
- London Commodity Brokers - England
- Sojitz Corporation - Japan
- Xindia Steels Limited - India
- Binh Thuan Hamico - Vietnam
- Meenaskhi Energy Private Limited - India
- Central Java Power - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Jaiprakash Power Ventures ltd
- Bangladesh Power Developement Board
- Directorate Of Revenue Intelligence - India
- SMG Consultants - Indonesia
- CNBM International Corporation - China
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