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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, 07 March 12
3RD MOZAMBIQUE COAL CONFERENCE
3rd Mozambique Coal Conference
2-4 July 2012 | Joaquim Chissano International Conference Centre , Maputo, Mozambique
http://www.immevents.com/mo ...
Wednesday, 07 March 12
DRY BULK MARKET KEEPS UP TIMID REBOUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept its rising momentum yesterday, rising for the eighth straight session, on the back of renewed demand for smaller bulk c ...
Wednesday, 07 March 12
BUKIT ASAM EYES 39% RISE IN COAL SALES - INSIDER STORIES
Insider Stories reported that, PT Bukit Asam Tbk is scouting a 39% increase in coal sales volume to 18.66 million tons this year from last year with ...
Wednesday, 07 March 12
PETROSEA SEALS US$188 MIO CONTRACT - INSIDER STORIES
Insider Stories reported that, coal mining contractor PT Petrosea Tbk has secured a US$188 million additional contract from its affiliated firm PT S ...
Monday, 05 March 12
SOUTHGOBI ANNOUNCES AGREEMENT TO SELL ITS THERMAL COAL TSAGAAN TOLGOI DEPOSIT FOR US$ 30 MILLION
SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) announced today an agreement to sell its thermal coal property, the Tsagaan Tolgoi Deposit to Modun Re ...
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- Banpu Public Company Limited - Thailand
- Toyota Tsusho Corporation, Japan
- Georgia Ports Authority, United States
- Tata Chemicals Ltd - India
- Samtan Co., Ltd - South Korea
- Africa Commodities Group - South Africa
- Aditya Birla Group - India
- Metalloyd Limited - United Kingdom
- Savvy Resources Ltd - HongKong
- Directorate General of MIneral and Coal - Indonesia
- Agrawal Coal Company - India
- Rashtriya Ispat Nigam Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indonesian Coal Mining Association
- IEA Clean Coal Centre - UK
- Ceylon Electricity Board - Sri Lanka
- Sarangani Energy Corporation, Philippines
- Indian Energy Exchange, India
- Kohat Cement Company Ltd. - Pakistan
- GN Power Mariveles Coal Plant, Philippines
- Marubeni Corporation - India
- Manunggal Multi Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Anglo American - United Kingdom
- Altura Mining Limited, Indonesia
- Kaltim Prima Coal - Indonesia
- Bhushan Steel Limited - India
- Bharathi Cement Corporation - India
- Power Finance Corporation Ltd., India
- CIMB Investment Bank - Malaysia
- PTC India Limited - India
- Global Green Power PLC Corporation, Philippines
- Coal and Oil Company - UAE
- Xindia Steels Limited - India
- Ambuja Cements Ltd - India
- Trasteel International SA, Italy
- Kumho Petrochemical, South Korea
- Star Paper Mills Limited - India
- Mintek Dendrill Indonesia
- Karaikal Port Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- SN Aboitiz Power Inc, Philippines
- Indian Oil Corporation Limited
- Vijayanagar Sugar Pvt Ltd - India
- Orica Mining Services - Indonesia
- Videocon Industries ltd - India
- The Treasury - Australian Government
- Sakthi Sugars Limited - India
- PNOC Exploration Corporation - Philippines
- London Commodity Brokers - England
- Minerals Council of Australia
- Borneo Indobara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Medco Energi Mining Internasional
- Coastal Gujarat Power Limited - India
- Energy Development Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Indika Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Romanian Commodities Exchange
- Bhatia International Limited - India
- Heidelberg Cement - Germany
- Gujarat Sidhee Cement - India
- AsiaOL BioFuels Corp., Philippines
- Deloitte Consulting - India
- Price Waterhouse Coopers - Russia
- Makarim & Taira - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Barasentosa Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Commodity Traders Exchange
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- Therma Luzon, Inc, Philippines
- Directorate Of Revenue Intelligence - India
- India Bulls Power Limited - India
- Sree Jayajothi Cements Limited - India
- Mercator Lines Limited - India
- Vizag Seaport Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Coal Council - USA
- Bangladesh Power Developement Board
- Posco Energy - South Korea
- Chettinad Cement Corporation Ltd - India
- Binh Thuan Hamico - Vietnam
- Thai Mozambique Logistica
- Jindal Steel & Power Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Chamber of Mines of South Africa
- Bukit Makmur.PT - Indonesia
- Madhucon Powers Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Coalindo Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Bayan Resources Tbk. - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TNB Fuel Sdn Bhd - Malaysia
- Semirara Mining Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Neyveli Lignite Corporation Ltd, - India
- Cigading International Bulk Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- OPG Power Generation Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- GAC Shipping (India) Pvt Ltd
- Electricity Authority, New Zealand
- Globalindo Alam Lestari - Indonesia
- Economic Council, Georgia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Salva Resources Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Commonwealth Bank - Australia
- Tamil Nadu electricity Board
- Planning Commission, India
- SMG Consultants - Indonesia
- CNBM International Corporation - China
- Asmin Koalindo Tuhup - Indonesia
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- Wilmar Investment Holdings
- LBH Netherlands Bv - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Ministry of Transport, Egypt
- Singapore Mercantile Exchange
- Kartika Selabumi Mining - Indonesia
- ASAPP Information Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Dalmia Cement Bharat India
- Simpson Spence & Young - Indonesia
- The State Trading Corporation of India Ltd
- Kideco Jaya Agung - Indonesia
- Central Electricity Authority - India
- White Energy Company Limited
- Billiton Holdings Pty Ltd - Australia
- Malabar Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Meralco Power Generation, Philippines
- MS Steel International - UAE
- Orica Australia Pty. Ltd.
- Ind-Barath Power Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Sojitz Corporation - Japan
- Riau Bara Harum - Indonesia
- Antam Resourcindo - Indonesia
- Rio Tinto Coal - Australia
- Timah Investasi Mineral - Indoneisa
- Thiess Contractors Indonesia
- San Jose City I Power Corp, Philippines
- Australian Coal Association
- Indo Tambangraya Megah - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PowerSource Philippines DevCo
- Port Waratah Coal Services - Australia
- Lanco Infratech Ltd - India
- Petron Corporation, Philippines
- Parry Sugars Refinery, India
- Bulk Trading Sa - Switzerland
- Larsen & Toubro Limited - India
- Interocean Group of Companies - India
- New Zealand Coal & Carbon
- The University of Queensland
- Independent Power Producers Association of India
- Pendopo Energi Batubara - Indonesia
- TeaM Sual Corporation - Philippines
- Ministry of Finance - Indonesia
- Uttam Galva Steels Limited - India
- Intertek Mineral Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- ICICI Bank Limited - India
- Gujarat Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Mjunction Services Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- Indogreen Group - Indonesia
- Edison Trading Spa - Italy
- Kepco SPC Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Merrill Lynch Commodities Europe
- European Bulk Services B.V. - Netherlands
- GMR Energy Limited - India
- Kapuas Tunggal Persada - Indonesia
- Cement Manufacturers Association - India
- Global Coal Blending Company Limited - Australia
- Sical Logistics Limited - India
- Parliament of New Zealand
- Wood Mackenzie - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Baramulti Group, Indonesia
- Global Business Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Siam City Cement - Thailand
- Vedanta Resources Plc - India
- Latin American Coal - Colombia
- Central Java Power - Indonesia
- Renaissance Capital - South Africa
- Ministry of Mines - Canada
- Siam City Cement PLC, Thailand
- Bukit Baiduri Energy - Indonesia
- Essar Steel Hazira Ltd - India
- VISA Power Limited - India
- Meenaskhi Energy Private Limited - India
- Mercuria Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kobexindo Tractors - Indoneisa
- Eastern Energy - Thailand
- Attock Cement Pakistan Limited
- Electricity Generating Authority of Thailand
- Jorong Barutama Greston.PT - Indonesia
- Goldman Sachs - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karbindo Abesyapradhi - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Carbofer General Trading SA - India
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