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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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Thursday, 29 March 12
DRY BULK EDGED FURTHER UP, ON HEALTHY DEMAND FOR MOST SHIP TYPES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With capesize vessels finally reappearing in demand, the dry bulk market had an easier task of rising yesterday, as the BDI (Baltic Dry Index) reach ...
Thursday, 29 March 12
ADARO FY11 NET INCOME JUMPS 124% - INSIDER STORIES
Insider Stories reported that, PT Adaro Energy Tbk (ADRO) today announced a 124% jump in net income to US$552 million last year or US$0.017 a share. ...
Wednesday, 28 March 12
CUESTA HAS RECEIVED APPLICATIONS AND FIRM BIDS IN EXCESS OF $9 MILLION FOR THE COMPANYS IPO
COALspot.com - The Directors of Cuesta Coal Limited (ASX:CQC) have announced that today it has received applications and firm bids in excess of $9 m ...
Wednesday, 28 March 12
ORPHEUS ENERGY TO COMMENCE JORC DRILLING AT ADK PROJECT
COALspot.com - Indonesian coal explorer and producer, Orpheus Energy (ASX:OEG), have today announced that the company is about to commence a drillin ...
Tuesday, 27 March 12
DRY BULK MARKET KEEP RISING FOLLOWING THE SAME TREND OF LAST WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept its upward momentum this week, on the same reasons of those last week. That is, the smaller ship types are still on the ris ...
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- Baramulti Group, Indonesia
- PowerSource Philippines DevCo
- Malabar Cements Ltd - India
- Eastern Energy - Thailand
- Carbofer General Trading SA - India
- Kalimantan Lumbung Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- AsiaOL BioFuels Corp., Philippines
- Orica Mining Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Georgia Ports Authority, United States
- Grasim Industreis Ltd - India
- Star Paper Mills Limited - India
- Chamber of Mines of South Africa
- Oldendorff Carriers - Singapore
- Barasentosa Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- Banpu Public Company Limited - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Aboitiz Power Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Toyota Tsusho Corporation, Japan
- Sinarmas Energy and Mining - Indonesia
- Mercator Lines Limited - India
- Sakthi Sugars Limited - India
- Mjunction Services Limited - India
- ASAPP Information Group - India
- Price Waterhouse Coopers - Russia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tata Chemicals Ltd - India
- Bayan Resources Tbk. - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Independent Power Producers Association of India
- SMC Global Power, Philippines
- Antam Resourcindo - Indonesia
- Ministry of Mines - Canada
- Alfred C Toepfer International GmbH - Germany
- LBH Netherlands Bv - Netherlands
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- London Commodity Brokers - England
- IEA Clean Coal Centre - UK
- Siam City Cement - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Mercuria Energy - Indonesia
- Eastern Coal Council - USA
- Edison Trading Spa - Italy
- South Luzon Thermal Energy Corporation
- Metalloyd Limited - United Kingdom
- Globalindo Alam Lestari - Indonesia
- The University of Queensland
- MS Steel International - UAE
- Standard Chartered Bank - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Kumho Petrochemical, South Korea
- Sarangani Energy Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Coal and Oil Company - UAE
- Borneo Indobara - Indonesia
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- Planning Commission, India
- Deloitte Consulting - India
- Therma Luzon, Inc, Philippines
- Trasteel International SA, Italy
- The Treasury - Australian Government
- Rio Tinto Coal - Australia
- Manunggal Multi Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- European Bulk Services B.V. - Netherlands
- Madhucon Powers Ltd - India
- Marubeni Corporation - India
- Power Finance Corporation Ltd., India
- Port Waratah Coal Services - Australia
- Aditya Birla Group - India
- TNB Fuel Sdn Bhd - Malaysia
- OPG Power Generation Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Larsen & Toubro Limited - India
- Makarim & Taira - Indonesia
- Riau Bara Harum - Indonesia
- International Coal Ventures Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Singapore Mercantile Exchange
- Rashtriya Ispat Nigam Limited - India
- Cement Manufacturers Association - India
- Kideco Jaya Agung - Indonesia
- TeaM Sual Corporation - Philippines
- Electricity Authority, New Zealand
- Energy Link Ltd, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Sojitz Corporation - Japan
- Ministry of Transport, Egypt
- Uttam Galva Steels Limited - India
- GVK Power & Infra Limited - India
- Jaiprakash Power Ventures ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wood Mackenzie - Singapore
- Economic Council, Georgia
- Karbindo Abesyapradhi - Indoneisa
- Bharathi Cement Corporation - India
- Straits Asia Resources Limited - Singapore
- Medco Energi Mining Internasional
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dalmia Cement Bharat India
- Minerals Council of Australia
- Latin American Coal - Colombia
- Parry Sugars Refinery, India
- Maharashtra Electricity Regulatory Commission - India
- VISA Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- White Energy Company Limited
- Bangladesh Power Developement Board
- Thai Mozambique Logistica
- Bhoruka Overseas - Indonesia
- Africa Commodities Group - South Africa
- McConnell Dowell - Australia
- Lanco Infratech Ltd - India
- Pendopo Energi Batubara - Indonesia
- PNOC Exploration Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Commonwealth Bank - Australia
- Xindia Steels Limited - India
- Intertek Mineral Services - Indonesia
- Videocon Industries ltd - India
- Bukit Makmur.PT - Indonesia
- Altura Mining Limited, Indonesia
- Bhatia International Limited - India
- GMR Energy Limited - India
- Orica Australia Pty. Ltd.
- The State Trading Corporation of India Ltd
- Global Coal Blending Company Limited - Australia
- Essar Steel Hazira Ltd - India
- Maheswari Brothers Coal Limited - India
- Chettinad Cement Corporation Ltd - India
- Kepco SPC Power Corporation, Philippines
- Interocean Group of Companies - India
- Agrawal Coal Company - India
- Kartika Selabumi Mining - Indonesia
- Attock Cement Pakistan Limited
- Posco Energy - South Korea
- Semirara Mining Corp, Philippines
- Romanian Commodities Exchange
- IHS Mccloskey Coal Group - USA
- Indika Energy - Indonesia
- Ambuja Cements Ltd - India
- PTC India Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sical Logistics Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Development Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Anglo American - United Kingdom
- Indian Energy Exchange, India
- Iligan Light & Power Inc, Philippines
- Central Electricity Authority - India
- Vedanta Resources Plc - India
- ICICI Bank Limited - India
- Electricity Generating Authority of Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Indonesian Coal Mining Association
- Goldman Sachs - Singapore
- Central Java Power - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Simpson Spence & Young - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Global Green Power PLC Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Bulk Trading Sa - Switzerland
- Heidelberg Cement - Germany
- GAC Shipping (India) Pvt Ltd
- Merrill Lynch Commodities Europe
- Meralco Power Generation, Philippines
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- GN Power Mariveles Coal Plant, Philippines
- Wilmar Investment Holdings
- Renaissance Capital - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- CNBM International Corporation - China
- Karaikal Port Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- India Bulls Power Limited - India
- Meenaskhi Energy Private Limited - India
- Sree Jayajothi Cements Limited - India
- New Zealand Coal & Carbon
- Jindal Steel & Power Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Kobexindo Tractors - Indoneisa
- Vizag Seaport Private Limited - India
- Parliament of New Zealand
- Australian Commodity Traders Exchange
- Indogreen Group - Indonesia
- Petron Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Ministry of Finance - Indonesia
- Bhushan Steel Limited - India
- SMG Consultants - Indonesia
- CIMB Investment Bank - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Australian Coal Association
- Indian Oil Corporation Limited
- Savvy Resources Ltd - HongKong
- Gujarat Sidhee Cement - India
- Ind-Barath Power Infra Limited - India
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