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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, 05 March 12
SOME RESOURCE TITANS NOT THRILLED WITH INDONESIAN EXPORT BAN - THE JAKARTA GLOBE
The Jakarta Globe reported that, local representatives of major business associations in East Kalimantan have protested a government regulation that ...
Monday, 05 March 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
An air of optimism poured in the market this week for dry bulk shippers with the Baltic Dry Index recording daily gains during the end of February b ...
Sunday, 04 March 12
SE ASIA WAS FIRM FOR TRIPS TO INDIA AND CHINA - VISTAAR
COALspot.com - This week saw another upward trend with all indices up and generally market was firm.
The BDI was up by 7.38 pct closing at 771 po ...
Friday, 02 March 12
DJMBP HAS ANNOUNCED SECOND BATCH OF CLEAR N CLEAN CERTIFIED MINERS
COALspot.com - The Directorate general of mineral & coal of Indonesia has announced second batch of companies who have passed IUP Clear and Clea ...
Thursday, 01 March 12
BUKIT ASAM TARGETS EUROPEAN INVESTORS
COALspot.com - PT. Bukit Asam (persero) Tbk, Indonesian state owned coal miner is planning to conduct road show in Europe next week to target at Eur ...
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- Formosa Plastics Group - Taiwan
- Metalloyd Limited - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bukit Makmur.PT - Indonesia
- Baramulti Group, Indonesia
- Bangladesh Power Developement Board
- Makarim & Taira - Indonesia
- Bukit Baiduri Energy - Indonesia
- ASAPP Information Group - India
- Energy Development Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Parry Sugars Refinery, India
- The University of Queensland
- Attock Cement Pakistan Limited
- Posco Energy - South Korea
- Larsen & Toubro Limited - India
- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- Medco Energi Mining Internasional
- Siam City Cement - Thailand
- Economic Council, Georgia
- MS Steel International - UAE
- Maharashtra Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- CIMB Investment Bank - Malaysia
- Independent Power Producers Association of India
- Thiess Contractors Indonesia
- Goldman Sachs - Singapore
- Electricity Generating Authority of Thailand
- Edison Trading Spa - Italy
- Cigading International Bulk Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- Ministry of Finance - Indonesia
- VISA Power Limited - India
- LBH Netherlands Bv - Netherlands
- Agrawal Coal Company - India
- Sarangani Energy Corporation, Philippines
- Madhucon Powers Ltd - India
- Latin American Coal - Colombia
- TNB Fuel Sdn Bhd - Malaysia
- Australian Coal Association
- Kideco Jaya Agung - Indonesia
- Energy Link Ltd, New Zealand
- IHS Mccloskey Coal Group - USA
- Rashtriya Ispat Nigam Limited - India
- Vedanta Resources Plc - India
- Sical Logistics Limited - India
- McConnell Dowell - Australia
- Jaiprakash Power Ventures ltd
- Uttam Galva Steels Limited - India
- Trasteel International SA, Italy
- Mjunction Services Limited - India
- Ambuja Cements Ltd - India
- Central Java Power - Indonesia
- Bharathi Cement Corporation - India
- Indika Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Ministry of Transport, Egypt
- The Treasury - Australian Government
- Globalindo Alam Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Coalindo Energy - Indonesia
- Central Electricity Authority - India
- IEA Clean Coal Centre - UK
- Ceylon Electricity Board - Sri Lanka
- Indian Oil Corporation Limited
- Eastern Energy - Thailand
- Kumho Petrochemical, South Korea
- Kalimantan Lumbung Energi - Indonesia
- Malabar Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Banpu Public Company Limited - Thailand
- Videocon Industries ltd - India
- Planning Commission, India
- Sree Jayajothi Cements Limited - India
- Indonesian Coal Mining Association
- Essar Steel Hazira Ltd - India
- ICICI Bank Limited - India
- The State Trading Corporation of India Ltd
- Dalmia Cement Bharat India
- Indian Energy Exchange, India
- SMG Consultants - Indonesia
- Thai Mozambique Logistica
- Ministry of Mines - Canada
- Singapore Mercantile Exchange
- White Energy Company Limited
- Power Finance Corporation Ltd., India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tamil Nadu electricity Board
- Lanco Infratech Ltd - India
- Riau Bara Harum - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Merrill Lynch Commodities Europe
- London Commodity Brokers - England
- Bahari Cakrawala Sebuku - Indonesia
- Straits Asia Resources Limited - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining and Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Bhatia International Limited - India
- Holcim Trading Pte Ltd - Singapore
- Bhoruka Overseas - Indonesia
- Standard Chartered Bank - UAE
- Sakthi Sugars Limited - India
- Bayan Resources Tbk. - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Barasentosa Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- India Bulls Power Limited - India
- Sojitz Corporation - Japan
- Interocean Group of Companies - India
- Parliament of New Zealand
- Africa Commodities Group - South Africa
- Pendopo Energi Batubara - Indonesia
- Indogreen Group - Indonesia
- Mintek Dendrill Indonesia
- Oldendorff Carriers - Singapore
- GMR Energy Limited - India
- GAC Shipping (India) Pvt Ltd
- Leighton Contractors Pty Ltd - Australia
- San Jose City I Power Corp, Philippines
- Borneo Indobara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- Gujarat Mineral Development Corp Ltd - India
- Orica Mining Services - Indonesia
- Intertek Mineral Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Global Coal Blending Company Limited - Australia
- Salva Resources Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Gujarat Sidhee Cement - India
- Maheswari Brothers Coal Limited - India
- International Coal Ventures Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- PetroVietnam Power Coal Import and Supply Company
- South Luzon Thermal Energy Corporation
- Jindal Steel & Power Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Minerals Council of Australia
- Coastal Gujarat Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CNBM International Corporation - China
- Kohat Cement Company Ltd. - Pakistan
- Manunggal Multi Energi - Indonesia
- Commonwealth Bank - Australia
- Meenaskhi Energy Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- PTC India Limited - India
- OPG Power Generation Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Anglo American - United Kingdom
- Petron Corporation, Philippines
- Global Business Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Cement Manufacturers Association - India
- Vizag Seaport Private Limited - India
- Kaltim Prima Coal - Indonesia
- Renaissance Capital - South Africa
- Marubeni Corporation - India
- Star Paper Mills Limited - India
- Mercuria Energy - Indonesia
- Georgia Ports Authority, United States
- Jorong Barutama Greston.PT - Indonesia
- Wood Mackenzie - Singapore
- Romanian Commodities Exchange
- Coal and Oil Company - UAE
- Grasim Industreis Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mercator Lines Limited - India
- Simpson Spence & Young - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Miang Besar Coal Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- New Zealand Coal & Carbon
- Billiton Holdings Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Rio Tinto Coal - Australia
- Chettinad Cement Corporation Ltd - India
- Wilmar Investment Holdings
- Aboitiz Power Corporation - Philippines
- Siam City Cement PLC, Thailand
- Carbofer General Trading SA - India
- Neyveli Lignite Corporation Ltd, - India
- Orica Australia Pty. Ltd.
- Bukit Asam (Persero) Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- GVK Power & Infra Limited - India
- Electricity Authority, New Zealand
- Bhushan Steel Limited - India
- Price Waterhouse Coopers - Russia
- TeaM Sual Corporation - Philippines
- Australian Commodity Traders Exchange
- Tata Chemicals Ltd - India
- PowerSource Philippines DevCo
- Heidelberg Cement - Germany
- Toyota Tsusho Corporation, Japan
- SMC Global Power, Philippines
- Samtan Co., Ltd - South Korea
- Chamber of Mines of South Africa
- Port Waratah Coal Services - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Iligan Light & Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Antam Resourcindo - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
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