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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, 08 March 12
INDONESIA'S COAL SECTOR CAN BENEFIT FROM CLEARER REGULATIONS - FITCH RATINGS
Fitch Ratings says Indonesia's coal mining sector should continue to see strong growth prospects but can benefit from clearer and more predictable ...
Thursday, 08 March 12
DRY BULK MARKET ON THE RISE; CHINAS COAL IMPORTS COULD INCREASE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept on rising back to healthier levels yesterday, with the BDI (Baltic Dry Index) the industry’s benchmark, marking its 8 ...
Wednesday, 07 March 12
INDONESIA COAL BENCHMARK PRICE GAINS FOR SECOND MONTH
COALspot.com - Indonesia raised the monthly coal reference price for sales in March by 1.15 percent, the second increase since February.
The Mini ...
Wednesday, 07 March 12
INDONESIA TO LIMIT FOREIGN OWNERSHIP IN MINES TO 49 PERCENT WITHIN 10 YEARS OF PRODUCTION
COALspot.com - Foreign holders of mining licenses in Indonesia have to divert 51% of their stakes to Indonesian government or domestic entitie ...
Wednesday, 07 March 12
ASSESS ASIAS POTENTIAL, DEVELOPMENTS AND APPETITE FOR SHALE AT SHALE GAS SUMMIT
Press Release - Assess Asia’s Potential, Developments and Appetite for Shale at Shale Gas Summit on 23-24 Apr, 2012 in Beijing
China is rep ...
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- Videocon Industries ltd - India
- Bukit Makmur.PT - Indonesia
- Goldman Sachs - Singapore
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- Lanco Infratech Ltd - India
- Siam City Cement - Thailand
- Tata Chemicals Ltd - India
- Bayan Resources Tbk. - Indonesia
- Indian Oil Corporation Limited
- Madhucon Powers Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Karaikal Port Pvt Ltd - India
- Mjunction Services Limited - India
- Planning Commission, India
- Kaltim Prima Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Grasim Industreis Ltd - India
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- Savvy Resources Ltd - HongKong
- Australian Commodity Traders Exchange
- Posco Energy - South Korea
- SN Aboitiz Power Inc, Philippines
- Meralco Power Generation, Philippines
- Eastern Energy - Thailand
- Kalimantan Lumbung Energi - Indonesia
- ICICI Bank Limited - India
- Heidelberg Cement - Germany
- Carbofer General Trading SA - India
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- Ministry of Mines - Canada
- Edison Trading Spa - Italy
- Metalloyd Limited - United Kingdom
- CNBM International Corporation - China
- TNB Fuel Sdn Bhd - Malaysia
- Thiess Contractors Indonesia
- Bharathi Cement Corporation - India
- Vedanta Resources Plc - India
- Energy Link Ltd, New Zealand
- Cement Manufacturers Association - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chettinad Cement Corporation Ltd - India
- Ministry of Finance - Indonesia
- CIMB Investment Bank - Malaysia
- Formosa Plastics Group - Taiwan
- Agrawal Coal Company - India
- Latin American Coal - Colombia
- Medco Energi Mining Internasional
- Merrill Lynch Commodities Europe
- Semirara Mining and Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
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- Central Java Power - Indonesia
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- SMG Consultants - Indonesia
- Wood Mackenzie - Singapore
- Globalindo Alam Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- PowerSource Philippines DevCo
- PNOC Exploration Corporation - Philippines
- Uttam Galva Steels Limited - India
- Ministry of Transport, Egypt
- Mintek Dendrill Indonesia
- White Energy Company Limited
- Minerals Council of Australia
- Coal and Oil Company - UAE
- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
- Port Waratah Coal Services - Australia
- Malabar Cements Ltd - India
- Vizag Seaport Private Limited - India
- PTC India Limited - India
- South Luzon Thermal Energy Corporation
- Kohat Cement Company Ltd. - Pakistan
- Directorate General of MIneral and Coal - Indonesia
- Trasteel International SA, Italy
- Parliament of New Zealand
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- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- Independent Power Producers Association of India
- Altura Mining Limited, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Borneo Indobara - Indonesia
- Aboitiz Power Corporation - Philippines
- The University of Queensland
- Directorate Of Revenue Intelligence - India
- LBH Netherlands Bv - Netherlands
- Indonesian Coal Mining Association
- Orica Australia Pty. Ltd.
- Interocean Group of Companies - India
- Siam City Cement PLC, Thailand
- AsiaOL BioFuels Corp., Philippines
- TeaM Sual Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Bhushan Steel Limited - India
- Standard Chartered Bank - UAE
- European Bulk Services B.V. - Netherlands
- Kartika Selabumi Mining - Indonesia
- VISA Power Limited - India
- Singapore Mercantile Exchange
- Makarim & Taira - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- OPG Power Generation Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Larsen & Toubro Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jindal Steel & Power Ltd - India
- Global Green Power PLC Corporation, Philippines
- Chamber of Mines of South Africa
- Orica Mining Services - Indonesia
- Essar Steel Hazira Ltd - India
- Anglo American - United Kingdom
- Meenaskhi Energy Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Petron Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- MS Steel International - UAE
- New Zealand Coal & Carbon
- Bukit Baiduri Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Wilmar Investment Holdings
- The Treasury - Australian Government
- Leighton Contractors Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Indian Energy Exchange, India
- Kumho Petrochemical, South Korea
- ASAPP Information Group - India
- London Commodity Brokers - England
- Jaiprakash Power Ventures ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Central Electricity Authority - India
- IEA Clean Coal Centre - UK
- Dalmia Cement Bharat India
- Intertek Mineral Services - Indonesia
- Rio Tinto Coal - Australia
- Samtan Co., Ltd - South Korea
- San Jose City I Power Corp, Philippines
- Xindia Steels Limited - India
- Maheswari Brothers Coal Limited - India
- Iligan Light & Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Manunggal Multi Energi - Indonesia
- Renaissance Capital - South Africa
- Commonwealth Bank - Australia
- Bhatia International Limited - India
- The State Trading Corporation of India Ltd
- McConnell Dowell - Australia
- Mercator Lines Limited - India
- Barasentosa Lestari - Indonesia
- Sical Logistics Limited - India
- Star Paper Mills Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vijayanagar Sugar Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Thai Mozambique Logistica
- Sarangani Energy Corporation, Philippines
- Semirara Mining Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ambuja Cements Ltd - India
- Global Business Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Africa Commodities Group - South Africa
- Gujarat Sidhee Cement - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coalindo Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Indika Energy - Indonesia
- Deloitte Consulting - India
- Eastern Coal Council - USA
- Electricity Authority, New Zealand
- Holcim Trading Pte Ltd - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Indo Tambangraya Megah - Indonesia
- Banpu Public Company Limited - Thailand
- Sojitz Corporation - Japan
- Ceylon Electricity Board - Sri Lanka
- Mercuria Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Tamil Nadu electricity Board
- Energy Development Corp, Philippines
- Parry Sugars Refinery, India
- Aditya Birla Group - India
- Price Waterhouse Coopers - Russia
- Attock Cement Pakistan Limited
- Georgia Ports Authority, United States
- Bhoruka Overseas - Indonesia
- Binh Thuan Hamico - Vietnam
- Electricity Generating Authority of Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Riau Bara Harum - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Cigading International Bulk Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Kobexindo Tractors - Indoneisa
- GVK Power & Infra Limited - India
- SMC Global Power, Philippines
- Baramulti Group, Indonesia
- Australian Coal Association
- Bangladesh Power Developement Board
- Economic Council, Georgia
- Romanian Commodities Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rashtriya Ispat Nigam Limited - India
- Oldendorff Carriers - Singapore
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