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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, 22 March 12
DRY BULK MARKET KEEPS SURGING, CAPESIZES FALLING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In what seems to be an establishing pattern, the dry bulk market has kept its upward momentum, edging closer to the 900 point-mark, but the larger s ...
Wednesday, 21 March 12
BUMA HAS PRODUCED 2.3 MILLION TONS OF COAL IN FEBRUARY 2012
COALspot.com - PT. Delta Dunia Makmur's overburden removal in February 2012 has reached totaled 23.8 million bcm (+2.4% YoY) while coal production ...
Tuesday, 20 March 12
SMALLER DRY BULK VESSELS STILL LEADING DRY BULK MARKET TO HIGHER GROUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has been growing during the past couple of weeks, but contrary to the usual practice, it’s not the larger Capesizes which ...
Monday, 19 March 12
WEEKLY DRY MARKET OVERVIEW: SMALLER VESSELS LEAD RATES HIGHER - MARIA BERTZELETOU, HELLENIC SHIPPING
The upward trend of the Baltic Dry Index persists strong from the end of February, spurred from the supramax market that offsets the weakness in the ...
Sunday, 18 March 12
BUKIT ASAM'S NET PROFIT IN 2011 ROSE 54% TO US$ 339.56 MILLION
COALspot.com - Company revenue for the period January - December 2011 amounting to Rp 10.6 trillion (approximately US$ 1,164,835,164.84) recorded an ...
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- Asmin Koalindo Tuhup - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Electricity Authority, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Bhoruka Overseas - Indonesia
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- Sakthi Sugars Limited - India
- Semirara Mining Corp, Philippines
- The State Trading Corporation of India Ltd
- Bangladesh Power Developement Board
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- New Zealand Coal & Carbon
- Antam Resourcindo - Indonesia
- OPG Power Generation Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Bharathi Cement Corporation - India
- Marubeni Corporation - India
- Sinarmas Energy and Mining - Indonesia
- PowerSource Philippines DevCo
- Bukit Makmur.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Banpu Public Company Limited - Thailand
- Baramulti Group, Indonesia
- Chamber of Mines of South Africa
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- London Commodity Brokers - England
- Altura Mining Limited, Indonesia
- Siam City Cement PLC, Thailand
- TeaM Sual Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Australian Commodity Traders Exchange
- GN Power Mariveles Coal Plant, Philippines
- Aboitiz Power Corporation - Philippines
- Goldman Sachs - Singapore
- GVK Power & Infra Limited - India
- Sree Jayajothi Cements Limited - India
- Planning Commission, India
- CNBM International Corporation - China
- Malabar Cements Ltd - India
- Central Electricity Authority - India
- Star Paper Mills Limited - India
- Price Waterhouse Coopers - Russia
- Kideco Jaya Agung - Indonesia
- Latin American Coal - Colombia
- LBH Netherlands Bv - Netherlands
- Coastal Gujarat Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vizag Seaport Private Limited - India
- Kobexindo Tractors - Indoneisa
- Economic Council, Georgia
- Riau Bara Harum - Indonesia
- Vedanta Resources Plc - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Intertek Mineral Services - Indonesia
- Directorate Of Revenue Intelligence - India
- South Luzon Thermal Energy Corporation
- Deloitte Consulting - India
- ASAPP Information Group - India
- Singapore Mercantile Exchange
- Alfred C Toepfer International GmbH - Germany
- Electricity Generating Authority of Thailand
- PNOC Exploration Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Indian Oil Corporation Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parliament of New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Indonesian Coal Mining Association
- Bahari Cakrawala Sebuku - Indonesia
- Karaikal Port Pvt Ltd - India
- Dalmia Cement Bharat India
- Toyota Tsusho Corporation, Japan
- Leighton Contractors Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Metalloyd Limited - United Kingdom
- Thai Mozambique Logistica
- IEA Clean Coal Centre - UK
- Ministry of Transport, Egypt
- India Bulls Power Limited - India
- Ind-Barath Power Infra Limited - India
- Edison Trading Spa - Italy
- Therma Luzon, Inc, Philippines
- Kumho Petrochemical, South Korea
- Energy Development Corp, Philippines
- Mercuria Energy - Indonesia
- Coal and Oil Company - UAE
- Indogreen Group - Indonesia
- Sical Logistics Limited - India
- The Treasury - Australian Government
- Global Green Power PLC Corporation, Philippines
- Indian Energy Exchange, India
- Videocon Industries ltd - India
- Attock Cement Pakistan Limited
- ICICI Bank Limited - India
- Billiton Holdings Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Global Business Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Bulk Trading Sa - Switzerland
- Grasim Industreis Ltd - India
- Rashtriya Ispat Nigam Limited - India
- VISA Power Limited - India
- Gujarat Sidhee Cement - India
- Posco Energy - South Korea
- Commonwealth Bank - Australia
- Cement Manufacturers Association - India
- Agrawal Coal Company - India
- Power Finance Corporation Ltd., India
- Miang Besar Coal Terminal - Indonesia
- SMG Consultants - Indonesia
- Uttam Galva Steels Limited - India
- Salva Resources Pvt Ltd - India
- Tamil Nadu electricity Board
- Sarangani Energy Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Barasentosa Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Interocean Group of Companies - India
- Carbofer General Trading SA - India
- Krishnapatnam Port Company Ltd. - India
- TNB Fuel Sdn Bhd - Malaysia
- Manunggal Multi Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Wilmar Investment Holdings
- Iligan Light & Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- AsiaOL BioFuels Corp., Philippines
- Bhushan Steel Limited - India
- Anglo American - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- Aditya Birla Group - India
- Minerals Council of Australia
- Tata Chemicals Ltd - India
- Energy Link Ltd, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Independent Power Producers Association of India
- Binh Thuan Hamico - Vietnam
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- Mjunction Services Limited - India
- Formosa Plastics Group - Taiwan
- Orica Mining Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Eastern Energy - Thailand
- Jaiprakash Power Ventures ltd
- Central Java Power - Indonesia
- Semirara Mining and Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- White Energy Company Limited
- Eastern Coal Council - USA
- Rio Tinto Coal - Australia
- The University of Queensland
- Renaissance Capital - South Africa
- Australian Coal Association
- International Coal Ventures Pvt Ltd - India
- Makarim & Taira - Indonesia
- European Bulk Services B.V. - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- IHS Mccloskey Coal Group - USA
- Heidelberg Cement - Germany
- Samtan Co., Ltd - South Korea
- Thiess Contractors Indonesia
- MS Steel International - UAE
- Bhatia International Limited - India
- Medco Energi Mining Internasional
- Jorong Barutama Greston.PT - Indonesia
- Oldendorff Carriers - Singapore
- Larsen & Toubro Limited - India
- McConnell Dowell - Australia
- Georgia Ports Authority, United States
- Petron Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- PTC India Limited - India
- Chettinad Cement Corporation Ltd - India
- Xindia Steels Limited - India
- Trasteel International SA, Italy
- Africa Commodities Group - South Africa
- Romanian Commodities Exchange
- Kepco SPC Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Global Coal Blending Company Limited - Australia
- Mintek Dendrill Indonesia
- Sojitz Corporation - Japan
- Merrill Lynch Commodities Europe
- SMC Global Power, Philippines
- Simpson Spence & Young - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Ministry of Mines - Canada
- GMR Energy Limited - India
- Ambuja Cements Ltd - India
- Wood Mackenzie - Singapore
- Coalindo Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Mercator Lines Limited - India
- Kartika Selabumi Mining - Indonesia
- Port Waratah Coal Services - Australia
- Gujarat Mineral Development Corp Ltd - India
- Parry Sugars Refinery, India
- Borneo Indobara - Indonesia
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- Siam City Cement - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
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