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