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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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Saturday, 17 March 12
THE FREIGHT RATES FOR INDONESIA TO INDIA REMAINED FIRM - VISTAAR SINGAPORE
COALspot.com - The market continued to be firm and all segments were up except for Cape Index which was down by 2.46 pct closing at 1,466 points.
...
Saturday, 17 March 12
INDIAN GOVT FINALIZES DRAFT BILL FOR COAL REGULATOR - PTI
The coal sector would soon get a regulator as the government has finalised a draft bill for the purpose, Coal Minister Sriprakash Jaiswal said Wedne ...
Friday, 16 March 12
THE PACIFIC MARKET IS FIRMING UP - FEARNLEYS AS
Handy
A slightly positive trend was seen last week in the Atlantic. Skaw-Passero deliveries fixed around USD 3k to US Gulf, while US Gulf deliveres ...
Thursday, 15 March 12
RAINS AVERAGE SELLING PRICE OF COAL WENT UP BY 22 % IN 2011
COALspot.com - PT. Resource Alam Indonesia Tbk, an Indonesian CCoW (3rd Generation) holder reported Wednesday a 171 percent increase in net profits ...
Thursday, 15 March 12
RESOURCE ALAM FY11 PROFIT UP 171% - INSIDER STORIES
Insider Stories reported that, coal mining company PT Resource Alam Indonesia Tbk (KKGI) reported a 171.16% jump in net profit last year on the back ...
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- Latin American Coal - Colombia
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- Sojitz Corporation - Japan
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- Antam Resourcindo - Indonesia
- Mjunction Services Limited - India
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- Posco Energy - South Korea
- Videocon Industries ltd - India
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- South Luzon Thermal Energy Corporation
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- Holcim Trading Pte Ltd - Singapore
- Manunggal Multi Energi - Indonesia
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- Bhoruka Overseas - Indonesia
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- SMC Global Power, Philippines
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- Krishnapatnam Port Company Ltd. - India
- Ceylon Electricity Board - Sri Lanka
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- Indo Tambangraya Megah - Indonesia
- Merrill Lynch Commodities Europe
- Salva Resources Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Ministry of Mines - Canada
- Sakthi Sugars Limited - India
- IHS Mccloskey Coal Group - USA
- San Jose City I Power Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Ministry of Transport, Egypt
- The University of Queensland
- Bhatia International Limited - India
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- Sical Logistics Limited - India
- Bangladesh Power Developement Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Toyota Tsusho Corporation, Japan
- Wilmar Investment Holdings
- Gujarat Sidhee Cement - India
- ASAPP Information Group - India
- Star Paper Mills Limited - India
- Kaltim Prima Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bukit Baiduri Energy - Indonesia
- Electricity Generating Authority of Thailand
- VISA Power Limited - India
- Formosa Plastics Group - Taiwan
- PTC India Limited - India
- The Treasury - Australian Government
- Minerals Council of Australia
- International Coal Ventures Pvt Ltd - India
- Chamber of Mines of South Africa
- Georgia Ports Authority, United States
- Petrochimia International Co. Ltd.- Taiwan
- Jindal Steel & Power Ltd - India
- Price Waterhouse Coopers - Russia
- Power Finance Corporation Ltd., India
- Standard Chartered Bank - UAE
- AsiaOL BioFuels Corp., Philippines
- Barasentosa Lestari - Indonesia
- Goldman Sachs - Singapore
- TeaM Sual Corporation - Philippines
- Coal and Oil Company - UAE
- Africa Commodities Group - South Africa
- Globalindo Alam Lestari - Indonesia
- Malabar Cements Ltd - India
- Energy Development Corp, Philippines
- Thiess Contractors Indonesia
- Indonesian Coal Mining Association
- Aboitiz Power Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Central Java Power - Indonesia
- Altura Mining Limited, Indonesia
- Kartika Selabumi Mining - Indonesia
- CNBM International Corporation - China
- Parry Sugars Refinery, India
- Anglo American - United Kingdom
- PNOC Exploration Corporation - Philippines
- Carbofer General Trading SA - India
- Madhucon Powers Ltd - India
- Eastern Coal Council - USA
- Straits Asia Resources Limited - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Grasim Industreis Ltd - India
- Interocean Group of Companies - India
- Mintek Dendrill Indonesia
- Gujarat Mineral Development Corp Ltd - India
- India Bulls Power Limited - India
- Intertek Mineral Services - Indonesia
- MS Steel International - UAE
- Port Waratah Coal Services - Australia
- Planning Commission, India
- Energy Link Ltd, New Zealand
- Essar Steel Hazira Ltd - India
- Simpson Spence & Young - Indonesia
- Wood Mackenzie - Singapore
- Australian Commodity Traders Exchange
- Marubeni Corporation - India
- Romanian Commodities Exchange
- Iligan Light & Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- McConnell Dowell - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Attock Cement Pakistan Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Ministry of Finance - Indonesia
- Indogreen Group - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement PLC, Thailand
- Heidelberg Cement - Germany
- Australian Coal Association
- Thai Mozambique Logistica
- Bulk Trading Sa - Switzerland
- London Commodity Brokers - England
- Pendopo Energi Batubara - Indonesia
- Singapore Mercantile Exchange
- Kohat Cement Company Ltd. - Pakistan
- Banpu Public Company Limited - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Aditya Birla Group - India
- The State Trading Corporation of India Ltd
- Eastern Energy - Thailand
- Global Business Power Corporation, Philippines
- Cement Manufacturers Association - India
- Sarangani Energy Corporation, Philippines
- Central Electricity Authority - India
- Tata Chemicals Ltd - India
- Rio Tinto Coal - Australia
- Coastal Gujarat Power Limited - India
- Medco Energi Mining Internasional
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parliament of New Zealand
- Kepco SPC Power Corporation, Philippines
- Indian Energy Exchange, India
- Bharathi Cement Corporation - India
- Kobexindo Tractors - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Authority, New Zealand
- Larsen & Toubro Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jaiprakash Power Ventures ltd
- Metalloyd Limited - United Kingdom
- Economic Council, Georgia
- Jorong Barutama Greston.PT - Indonesia
- Mercuria Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Vedanta Resources Plc - India
- Lanco Infratech Ltd - India
- Makarim & Taira - Indonesia
- Meralco Power Generation, Philippines
- Deloitte Consulting - India
- Samtan Co., Ltd - South Korea
- Indika Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- IEA Clean Coal Centre - UK
- Alfred C Toepfer International GmbH - Germany
- Commonwealth Bank - Australia
- Tamil Nadu electricity Board
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