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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, 26 March 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The Baltic Dry Index follows its upward incline for fourth consecutive week by rising to more than 900 points, up by 37% from the bottom low in the ...
Monday, 26 March 12
GOLDEN MINES FY11 REVENUE JUMPS 209% - INSIDER STORIES
Insider Stories reported that, coal miner PT Golden Energy Mines Tbk (GEMS), that is controlled by Sinar Mas Group, recorded a 209% jump in revenue ...
Saturday, 24 March 12
AUSTRALIA'S MINERAL TAX : BENCHMARK FOR OTHER COUNTRIES - SUNIL K KUMBHAT
COALspot.com - Natural resources rich counties like Australia , Indonesia , South Africa , Brazil etc are going through a spectacular resources boom ...
Saturday, 24 March 12
THE AVERAGE CHARTER RATES WAS AT CAPESIZE $ 4,546 PER DAY VS SUPRAMAX / $ 10,819 PER DAY - VISTAAR
COALspot.com - The BDI crossed 900 points this week closing at 908 points up by 3.89 pct. All other sectors were up except for cape index whic ...
Thursday, 22 March 12
ECI-CHINA HANDY RATES ARE AROUND US$ 8000 - FEARNLEYS
Handy
Another positive trend was seen last week with more cargoes entering the market. Skaw-Passero/US Gulf climbed slowly up to USD 3700, while US ...
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- Ministry of Transport, Egypt
- CIMB Investment Bank - Malaysia
- Price Waterhouse Coopers - Russia
- Renaissance Capital - South Africa
- Oldendorff Carriers - Singapore
- Siam City Cement - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Africa Commodities Group - South Africa
- Aditya Birla Group - India
- South Luzon Thermal Energy Corporation
- Sinarmas Energy and Mining - Indonesia
- Independent Power Producers Association of India
- Indika Energy - Indonesia
- MS Steel International - UAE
- LBH Netherlands Bv - Netherlands
- SMG Consultants - Indonesia
- Pendopo Energi Batubara - Indonesia
- Thiess Contractors Indonesia
- Medco Energi Mining Internasional
- Bahari Cakrawala Sebuku - Indonesia
- Coalindo Energy - Indonesia
- Uttam Galva Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Standard Chartered Bank - UAE
- Coastal Gujarat Power Limited - India
- Heidelberg Cement - Germany
- Bhushan Steel Limited - India
- Meralco Power Generation, Philippines
- Eastern Coal Council - USA
- Port Waratah Coal Services - Australia
- Thai Mozambique Logistica
- Kalimantan Lumbung Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Attock Cement Pakistan Limited
- Australian Coal Association
- Asmin Koalindo Tuhup - Indonesia
- Therma Luzon, Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- ICICI Bank Limited - India
- Power Finance Corporation Ltd., India
- Borneo Indobara - Indonesia
- Riau Bara Harum - Indonesia
- Bhatia International Limited - India
- The Treasury - Australian Government
- Billiton Holdings Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- New Zealand Coal & Carbon
- GVK Power & Infra Limited - India
- Semirara Mining Corp, Philippines
- Parry Sugars Refinery, India
- Latin American Coal - Colombia
- Binh Thuan Hamico - Vietnam
- The State Trading Corporation of India Ltd
- Altura Mining Limited, Indonesia
- Gujarat Sidhee Cement - India
- VISA Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Star Paper Mills Limited - India
- PNOC Exploration Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- IHS Mccloskey Coal Group - USA
- Rashtriya Ispat Nigam Limited - India
- The University of Queensland
- Minerals Council of Australia
- Indian Oil Corporation Limited
- Economic Council, Georgia
- Gujarat Mineral Development Corp Ltd - India
- Xindia Steels Limited - India
- Samtan Co., Ltd - South Korea
- GMR Energy Limited - India
- Wood Mackenzie - Singapore
- Semirara Mining and Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Planning Commission, India
- Ministry of Finance - Indonesia
- Carbofer General Trading SA - India
- Australian Commodity Traders Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Posco Energy - South Korea
- Siam City Cement PLC, Thailand
- GAC Shipping (India) Pvt Ltd
- Energy Development Corp, Philippines
- Lanco Infratech Ltd - India
- Intertek Mineral Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Grasim Industreis Ltd - India
- Toyota Tsusho Corporation, Japan
- Global Business Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Videocon Industries ltd - India
- Antam Resourcindo - Indonesia
- London Commodity Brokers - England
- Orica Mining Services - Indonesia
- Interocean Group of Companies - India
- Merrill Lynch Commodities Europe
- Global Coal Blending Company Limited - Australia
- Mercator Lines Limited - India
- Central Java Power - Indonesia
- International Coal Ventures Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Metalloyd Limited - United Kingdom
- Edison Trading Spa - Italy
- AsiaOL BioFuels Corp., Philippines
- McConnell Dowell - Australia
- Kartika Selabumi Mining - Indonesia
- Electricity Generating Authority of Thailand
- Indo Tambangraya Megah - Indonesia
- Bharathi Cement Corporation - India
- Coal and Oil Company - UAE
- Wilmar Investment Holdings
- Sojitz Corporation - Japan
- Tata Chemicals Ltd - India
- Jaiprakash Power Ventures ltd
- Orica Australia Pty. Ltd.
- Ministry of Mines - Canada
- India Bulls Power Limited - India
- Essar Steel Hazira Ltd - India
- Indogreen Group - Indonesia
- Marubeni Corporation - India
- PowerSource Philippines DevCo
- Electricity Authority, New Zealand
- Cement Manufacturers Association - India
- Bhoruka Overseas - Indonesia
- Kideco Jaya Agung - Indonesia
- Petron Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Central Electricity Authority - India
- Madhucon Powers Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tamil Nadu electricity Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Romanian Commodities Exchange
- PTC India Limited - India
- Georgia Ports Authority, United States
- Banpu Public Company Limited - Thailand
- Kobexindo Tractors - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Sakthi Sugars Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Commonwealth Bank - Australia
- Singapore Mercantile Exchange
- Manunggal Multi Energi - Indonesia
- Malabar Cements Ltd - India
- Simpson Spence & Young - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- TeaM Sual Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- CNBM International Corporation - China
- Anglo American - United Kingdom
- Globalindo Alam Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Alfred C Toepfer International GmbH - Germany
- Directorate General of MIneral and Coal - Indonesia
- Makarim & Taira - Indonesia
- Chamber of Mines of South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Sical Logistics Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mjunction Services Limited - India
- White Energy Company Limited
- Bulk Trading Sa - Switzerland
- Baramulti Group, Indonesia
- SMC Global Power, Philippines
- Ambuja Cements Ltd - India
- Mintek Dendrill Indonesia
- Sindya Power Generating Company Private Ltd
- ASAPP Information Group - India
- SN Aboitiz Power Inc, Philippines
- Parliament of New Zealand
- Kumho Petrochemical, South Korea
- Indonesian Coal Mining Association
- Global Green Power PLC Corporation, Philippines
- Deloitte Consulting - India
- Sree Jayajothi Cements Limited - India
- Larsen & Toubro Limited - India
- Timah Investasi Mineral - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Trasteel International SA, Italy
- Salva Resources Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Holcim Trading Pte Ltd - Singapore
- Straits Asia Resources Limited - Singapore
- Goldman Sachs - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Indian Energy Exchange, India
- Kaltim Prima Coal - Indonesia
- Savvy Resources Ltd - HongKong
- Karaikal Port Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Leighton Contractors Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Neyveli Lignite Corporation Ltd, - India
- Vizag Seaport Private Limited - India
- IEA Clean Coal Centre - UK
- TNB Fuel Sdn Bhd - Malaysia
- Bangladesh Power Developement Board
- Jindal Steel & Power Ltd - India
- Mercuria Energy - Indonesia
- Vedanta Resources Plc - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dalmia Cement Bharat India
- Eastern Energy - Thailand
- Agrawal Coal Company - India
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