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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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Wednesday, 14 March 12
GLOBAL THERMAL TRADE FLOW CHANGES WILL ENSURE SECURITY OF THERMAL COAL SUPPLY, ALBEIT AT A HIGH PRICE - WOOD MACKENZIE
Wood Mackenzie Says Global Thermal Trade Flow Changes Will Ensure Security of Thermal Coal Supply, Albeit At a High Price Seaborne thermal demand by ...
Wednesday, 14 March 12
COKAL TAKES ANOTHER STEP IN DEVELOPING INFRASTRUCTURE TO FACILITATE METALLURGICAL COAL PRODUCTION
Global coal group, Cokal Limited (ASX-CKA), has signed Memorandums of Understanding (MoU’s) to develop two river ports and two small scale coa ...
Tuesday, 13 March 12
CLARIFICATION OF GR 24 OF 2012 REQUIRING DIVESTMENT OF FOREIGN OWNERSHIP OVER TIME
ASX Announcement
Global metallurgical coal group, Cokal Limited (ASX-CKA), is responding to the recent announcement of the Indonesian Ministry of ...
Tuesday, 13 March 12
EUROPEAN COAL CONTANGO: FURTHER STEEPNESS REQUIRED TO MAKE LARGE SCALE PHYSICAL TIME SPREAD ARBITRAGE MORE ATTRACTIVE - MISWIN MAHESH, BARCLAYS CAPITAL
COALspot.com - "With the contango between the Y+1 and M+1 ARA delivered contract now averaging above the $14/t level, there is an increasing in ...
Monday, 12 March 12
DELTA DUNIA 1M OVERBURDEN DROPS 3.1% - INSIDER STORIES
Insider Stories reported that, Indonesia's second largest coal mining contractor PT Delta Dunia Makmur Tbk (DOID) reported a 25 million bank ...
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- Straits Asia Resources Limited - Singapore
- Sical Logistics Limited - India
- Cement Manufacturers Association - India
- Ceylon Electricity Board - Sri Lanka
- Bukit Makmur.PT - Indonesia
- Kaltim Prima Coal - Indonesia
- Aditya Birla Group - India
- ICICI Bank Limited - India
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- Borneo Indobara - Indonesia
- Vedanta Resources Plc - India
- Kapuas Tunggal Persada - Indonesia
- Central Electricity Authority - India
- Commonwealth Bank - Australia
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- Merrill Lynch Commodities Europe
- Directorate Of Revenue Intelligence - India
- White Energy Company Limited
- Minerals Council of Australia
- Bulk Trading Sa - Switzerland
- Chamber of Mines of South Africa
- Gujarat Sidhee Cement - India
- Neyveli Lignite Corporation Ltd, - India
- Energy Link Ltd, New Zealand
- Grasim Industreis Ltd - India
- Medco Energi Mining Internasional
- Latin American Coal - Colombia
- Orica Australia Pty. Ltd.
- Meenaskhi Energy Private Limited - India
- TeaM Sual Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Wood Mackenzie - Singapore
- Central Java Power - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Global Coal Blending Company Limited - Australia
- Kohat Cement Company Ltd. - Pakistan
- Pipit Mutiara Jaya. PT, Indonesia
- Kobexindo Tractors - Indoneisa
- London Commodity Brokers - England
- Coastal Gujarat Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Videocon Industries ltd - India
- Sindya Power Generating Company Private Ltd
- Bharathi Cement Corporation - India
- Siam City Cement PLC, Thailand
- Kideco Jaya Agung - Indonesia
- Mercator Lines Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Goldman Sachs - Singapore
- Semirara Mining and Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Wilmar Investment Holdings
- Indian Oil Corporation Limited
- Karaikal Port Pvt Ltd - India
- PowerSource Philippines DevCo
- Thiess Contractors Indonesia
- Ind-Barath Power Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Aboitiz Power Corporation - Philippines
- Simpson Spence & Young - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Energy Development Corp, Philippines
- PTC India Limited - India
- Tamil Nadu electricity Board
- Global Business Power Corporation, Philippines
- Ministry of Transport, Egypt
- Globalindo Alam Lestari - Indonesia
- Xindia Steels Limited - India
- Manunggal Multi Energi - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Lanco Infratech Ltd - India
- Jindal Steel & Power Ltd - India
- Trasteel International SA, Italy
- Jaiprakash Power Ventures ltd
- Essar Steel Hazira Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Indian Energy Exchange, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sarangani Energy Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Carbofer General Trading SA - India
- Interocean Group of Companies - India
- SN Aboitiz Power Inc, Philippines
- Eastern Coal Council - USA
- Singapore Mercantile Exchange
- CIMB Investment Bank - Malaysia
- Petron Corporation, Philippines
- Eastern Energy - Thailand
- Maheswari Brothers Coal Limited - India
- AsiaOL BioFuels Corp., Philippines
- India Bulls Power Limited - India
- Standard Chartered Bank - UAE
- San Jose City I Power Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Romanian Commodities Exchange
- Samtan Co., Ltd - South Korea
- Economic Council, Georgia
- Star Paper Mills Limited - India
- Marubeni Corporation - India
- Indika Energy - Indonesia
- Australian Commodity Traders Exchange
- Indo Tambangraya Megah - Indonesia
- Renaissance Capital - South Africa
- SMG Consultants - Indonesia
- Parry Sugars Refinery, India
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- Attock Cement Pakistan Limited
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- The Treasury - Australian Government
- Power Finance Corporation Ltd., India
- The State Trading Corporation of India Ltd
- Africa Commodities Group - South Africa
- PNOC Exploration Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rio Tinto Coal - Australia
- Alfred C Toepfer International GmbH - Germany
- Chettinad Cement Corporation Ltd - India
- Siam City Cement - Thailand
- Metalloyd Limited - United Kingdom
- Sojitz Corporation - Japan
- Bangladesh Power Developement Board
- Malabar Cements Ltd - India
- Sakthi Sugars Limited - India
- Dalmia Cement Bharat India
- Tata Chemicals Ltd - India
- Electricity Authority, New Zealand
- Vizag Seaport Private Limited - India
- Formosa Plastics Group - Taiwan
- Bhushan Steel Limited - India
- Ambuja Cements Ltd - India
- Australian Coal Association
- Baramulti Group, Indonesia
- Bhatia International Limited - India
- Agrawal Coal Company - India
- IHS Mccloskey Coal Group - USA
- MS Steel International - UAE
- Sinarmas Energy and Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Uttam Galva Steels Limited - India
- Port Waratah Coal Services - Australia
- Georgia Ports Authority, United States
- Leighton Contractors Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Deloitte Consulting - India
- GMR Energy Limited - India
- Ministry of Mines - Canada
- The University of Queensland
- Kumho Petrochemical, South Korea
- McConnell Dowell - Australia
- Therma Luzon, Inc, Philippines
- Mercuria Energy - Indonesia
- Larsen & Toubro Limited - India
- Global Green Power PLC Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- Salva Resources Pvt Ltd - India
- Makarim & Taira - Indonesia
- Orica Mining Services - Indonesia
- Semirara Mining Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Indonesian Coal Mining Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- Anglo American - United Kingdom
- Timah Investasi Mineral - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Banpu Public Company Limited - Thailand
- New Zealand Coal & Carbon
- Cigading International Bulk Terminal - Indonesia
- Planning Commission, India
- Pendopo Energi Batubara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- VISA Power Limited - India
- Mintek Dendrill Indonesia
- Toyota Tsusho Corporation, Japan
- Bahari Cakrawala Sebuku - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Mjunction Services Limited - India
- Meralco Power Generation, Philippines
- Price Waterhouse Coopers - Russia
- Rashtriya Ispat Nigam Limited - India
- Indogreen Group - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GVK Power & Infra Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Thai Mozambique Logistica
- IEA Clean Coal Centre - UK
- Gujarat Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Electricity Generating Authority of Thailand
- Heidelberg Cement - Germany
- Holcim Trading Pte Ltd - Singapore
- Savvy Resources Ltd - HongKong
- Independent Power Producers Association of India
- SMC Global Power, Philippines
- Kepco SPC Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Antam Resourcindo - Indonesia
- ASAPP Information Group - India
- CNBM International Corporation - China
- Coal and Oil Company - UAE
- Edison Trading Spa - Italy
- Kalimantan Lumbung Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- Intertek Mineral Services - Indonesia
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