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