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