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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, 12 March 12
DRY BULK RATES WILL REMAIN LOW IN 2012 SAYS DANISH SHIP FINANCE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its annual shipping survey Danish Ship Finance said that the current outlook for the Dry Bulk market seems unlikely to foster higher rates in any ...
Monday, 12 March 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The first days of March appear to be more encouraging for dry bulk operators, but the outlook is still gloomy for the rest of year with earnings for ...
Sunday, 11 March 12
FREIGHT RATES FOR INDONESIA TO INDIA WILL CONTINUE TO REMAIN FIRM- VISTAAR
COALspot.com - This week saw another upward trend with all indices up except for the Cape index.
The BDI was up by 6.87 pct closing at 824 points ...
Friday, 09 March 12
MINING IN INDONESIA: RESTRICTION ON FOREIGN INVESTMENT - SUNIL K KUMBHAT
COALspot.com - Recently Govt has passed regulation instructing foreign mining companies to reduce their ownership stake.
The regulation known as ...
Friday, 09 March 12
SHIP OWNERS LOOKING TO CHINA FOR REVIVAL, WHILE THEY KEEP SELLING OLD SHIPS FOR SCRAP - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With China’s economic policy plan for the future on every ship owner’s mind, at least those involved in the dry bulk industry, the lates ...
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Attock Cement Pakistan Limited
- San Jose City I Power Corp, Philippines
- Energy Link Ltd, New Zealand
- Banpu Public Company Limited - Thailand
- Commonwealth Bank - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement - Thailand
- Indo Tambangraya Megah - Indonesia
- Australian Coal Association
- Essar Steel Hazira Ltd - India
- Formosa Plastics Group - Taiwan
- Independent Power Producers Association of India
- GMR Energy Limited - India
- Agrawal Coal Company - India
- Interocean Group of Companies - India
- South Luzon Thermal Energy Corporation
- Heidelberg Cement - Germany
- Asmin Koalindo Tuhup - Indonesia
- Madhucon Powers Ltd - India
- CIMB Investment Bank - Malaysia
- European Bulk Services B.V. - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Sical Logistics Limited - India
- Mjunction Services Limited - India
- Meralco Power Generation, Philippines
- Timah Investasi Mineral - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sojitz Corporation - Japan
- Gujarat Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- Karbindo Abesyapradhi - Indoneisa
- International Coal Ventures Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Cement Manufacturers Association - India
- Oldendorff Carriers - Singapore
- Posco Energy - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- GAC Shipping (India) Pvt Ltd
- Thiess Contractors Indonesia
- Indogreen Group - Indonesia
- Eastern Coal Council - USA
- Petrochimia International Co. Ltd.- Taiwan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Renaissance Capital - South Africa
- Sinarmas Energy and Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Planning Commission, India
- Bulk Trading Sa - Switzerland
- Kobexindo Tractors - Indoneisa
- Rio Tinto Coal - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Uttam Galva Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- PNOC Exploration Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Globalindo Alam Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bharathi Cement Corporation - India
- Wood Mackenzie - Singapore
- IHS Mccloskey Coal Group - USA
- India Bulls Power Limited - India
- Sarangani Energy Corporation, Philippines
- Indian Energy Exchange, India
- PowerSource Philippines DevCo
- Trasteel International SA, Italy
- Toyota Tsusho Corporation, Japan
- Meenaskhi Energy Private Limited - India
- Larsen & Toubro Limited - India
- Economic Council, Georgia
- New Zealand Coal & Carbon
- Aditya Birla Group - India
- Deloitte Consulting - India
- Kohat Cement Company Ltd. - Pakistan
- Mercator Lines Limited - India
- Bangladesh Power Developement Board
- ICICI Bank Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jaiprakash Power Ventures ltd
- Ministry of Finance - Indonesia
- Ministry of Mines - Canada
- London Commodity Brokers - England
- Simpson Spence & Young - Indonesia
- Latin American Coal - Colombia
- Bukit Asam (Persero) Tbk - Indonesia
- Malabar Cements Ltd - India
- PTC India Limited - India
- Sindya Power Generating Company Private Ltd
- Directorate Of Revenue Intelligence - India
- Goldman Sachs - Singapore
- Minerals Council of Australia
- Neyveli Lignite Corporation Ltd, - India
- Sree Jayajothi Cements Limited - India
- Price Waterhouse Coopers - Russia
- SMC Global Power, Philippines
- Borneo Indobara - Indonesia
- Carbofer General Trading SA - India
- Romanian Commodities Exchange
- Kalimantan Lumbung Energi - Indonesia
- Electricity Generating Authority of Thailand
- Altura Mining Limited, Indonesia
- Indian Oil Corporation Limited
- Edison Trading Spa - Italy
- Marubeni Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Salva Resources Pvt Ltd - India
- Bhatia International Limited - India
- Vizag Seaport Private Limited - India
- Georgia Ports Authority, United States
- Lanco Infratech Ltd - India
- Global Green Power PLC Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Wilmar Investment Holdings
- Eastern Energy - Thailand
- Kideco Jaya Agung - Indonesia
- Electricity Authority, New Zealand
- GVK Power & Infra Limited - India
- IEA Clean Coal Centre - UK
- Port Waratah Coal Services - Australia
- Directorate General of MIneral and Coal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bhushan Steel Limited - India
- Power Finance Corporation Ltd., India
- Parry Sugars Refinery, India
- Grasim Industreis Ltd - India
- SMG Consultants - Indonesia
- Standard Chartered Bank - UAE
- Indika Energy - Indonesia
- Kumho Petrochemical, South Korea
- Energy Development Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Coalindo Energy - Indonesia
- Tata Chemicals Ltd - India
- ASAPP Information Group - India
- Chettinad Cement Corporation Ltd - India
- Manunggal Multi Energi - Indonesia
- The University of Queensland
- MS Steel International - UAE
- Orica Mining Services - Indonesia
- Mintek Dendrill Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kepco SPC Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Parliament of New Zealand
- Ministry of Transport, Egypt
- Coastal Gujarat Power Limited - India
- Metalloyd Limited - United Kingdom
- Mercuria Energy - Indonesia
- Chamber of Mines of South Africa
- Merrill Lynch Commodities Europe
- Anglo American - United Kingdom
- Maheswari Brothers Coal Limited - India
- Vedanta Resources Plc - India
- White Energy Company Limited
- Indonesian Coal Mining Association
- Kaltim Prima Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Gujarat Sidhee Cement - India
- Africa Commodities Group - South Africa
- TeaM Sual Corporation - Philippines
- Australian Commodity Traders Exchange
- Dalmia Cement Bharat India
- Jorong Barutama Greston.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Straits Asia Resources Limited - Singapore
- Krishnapatnam Port Company Ltd. - India
- Global Business Power Corporation, Philippines
- Baramulti Group, Indonesia
- Bhoruka Overseas - Indonesia
- Ambuja Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Singapore Mercantile Exchange
- Petron Corporation, Philippines
- VISA Power Limited - India
- Thai Mozambique Logistica
- Aboitiz Power Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Barasentosa Lestari - Indonesia
- The Treasury - Australian Government
- Jindal Steel & Power Ltd - India
- Bukit Baiduri Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Therma Luzon, Inc, Philippines
- Bukit Makmur.PT - Indonesia
- SN Aboitiz Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- The State Trading Corporation of India Ltd
- Kartika Selabumi Mining - Indonesia
- Pendopo Energi Batubara - Indonesia
- Antam Resourcindo - Indonesia
- Intertek Mineral Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Xindia Steels Limited - India
- Central Electricity Authority - India
- Central Java Power - Indonesia
- LBH Netherlands Bv - Netherlands
- Star Paper Mills Limited - India
- Riau Bara Harum - Indonesia
- Tamil Nadu electricity Board
- Coal and Oil Company - UAE
- PetroVietnam Power Coal Import and Supply Company
- GN Power Mariveles Coal Plant, Philippines
- Sakthi Sugars Limited - India
- CNBM International Corporation - China
- Medco Energi Mining Internasional
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