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