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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, 01 March 12
INDO-INDIA, LARGE ECO SUPRA CAN FETCH CLOSE TO USD 9K DOP N.CHINA - FEARNLEYS AS
Handy
The Atlantic Handysize market did not see any signs for recovery this week. It is still a major lack of spot cargoes and an oversupply of pro ...
Wednesday, 29 February 12
69 MINERS AGREE TO RENEGOTIATE CONTRACTS - THE JAKARTA POST
The Jakarta Post, one of the leading English news papaer in Indonesia reported that, as many as 60 coal contracts-of-work (PKP2B) and nine non-coal ...
Wednesday, 29 February 12
PUTTING COAL GASIFICATION TO WORK
Clifford Reese of the SSOE Group looks at practical solutions for district energy leaders who wish to implement clean coal technology.
Coal fuels ...
Monday, 27 February 12
COAL MINING PROFITS TOO HIGH, SAYS GOVT - TEMPO INTERACTIVE
Tempo Interactive reported that, Energy and Mineral Resources Deputy Minister of Indonesia Widjajono Partowidagdo has criticized coal-mining compani ...
Monday, 27 February 12
INDONESIAN COAL EXPORTS TO CHINA DROPS 39.76 PERCENT IN JANUARY 2012
COALspot.com: Indonesia, the world largest coal exporter, shipped 28.21* mln mt of coal in January 2012, slightly lower than its December 2011 ...
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- Cement Manufacturers Association - India
- Manunggal Multi Energi - Indonesia
- Heidelberg Cement - Germany
- Ind-Barath Power Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Orica Mining Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- McConnell Dowell - Australia
- Orica Australia Pty. Ltd.
- GVK Power & Infra Limited - India
- Metalloyd Limited - United Kingdom
- Bhushan Steel Limited - India
- Antam Resourcindo - Indonesia
- Vizag Seaport Private Limited - India
- Indika Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Kumho Petrochemical, South Korea
- Salva Resources Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Samtan Co., Ltd - South Korea
- Kaltim Prima Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Agrawal Coal Company - India
- Cigading International Bulk Terminal - Indonesia
- Mjunction Services Limited - India
- Kobexindo Tractors - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Wood Mackenzie - Singapore
- PNOC Exploration Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bulk Trading Sa - Switzerland
- VISA Power Limited - India
- Coalindo Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Baramulti Group, Indonesia
- The State Trading Corporation of India Ltd
- Simpson Spence & Young - Indonesia
- Mercator Lines Limited - India
- Indian Energy Exchange, India
- Aditya Birla Group - India
- Thiess Contractors Indonesia
- Deloitte Consulting - India
- Trasteel International SA, Italy
- Sarangani Energy Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Meralco Power Generation, Philippines
- Jindal Steel & Power Ltd - India
- Parry Sugars Refinery, India
- Videocon Industries ltd - India
- Electricity Generating Authority of Thailand
- Renaissance Capital - South Africa
- SMC Global Power, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Therma Luzon, Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement PLC, Thailand
- Bharathi Cement Corporation - India
- Rashtriya Ispat Nigam Limited - India
- ICICI Bank Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rio Tinto Coal - Australia
- PTC India Limited - India
- Port Waratah Coal Services - Australia
- Binh Thuan Hamico - Vietnam
- Oldendorff Carriers - Singapore
- Jaiprakash Power Ventures ltd
- PowerSource Philippines DevCo
- PetroVietnam Power Coal Import and Supply Company
- Chettinad Cement Corporation Ltd - India
- Makarim & Taira - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kepco SPC Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sojitz Corporation - Japan
- Power Finance Corporation Ltd., India
- Gujarat Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- Bukit Makmur.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Georgia Ports Authority, United States
- Maheswari Brothers Coal Limited - India
- Ministry of Finance - Indonesia
- Mintek Dendrill Indonesia
- Wilmar Investment Holdings
- Interocean Group of Companies - India
- Tamil Nadu electricity Board
- Alfred C Toepfer International GmbH - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- CNBM International Corporation - China
- Economic Council, Georgia
- IHS Mccloskey Coal Group - USA
- Eastern Coal Council - USA
- Meenaskhi Energy Private Limited - India
- Marubeni Corporation - India
- Attock Cement Pakistan Limited
- Edison Trading Spa - Italy
- Tata Chemicals Ltd - India
- Medco Energi Mining Internasional
- Anglo American - United Kingdom
- Carbofer General Trading SA - India
- Neyveli Lignite Corporation Ltd, - India
- Thai Mozambique Logistica
- Star Paper Mills Limited - India
- Kartika Selabumi Mining - Indonesia
- Indogreen Group - Indonesia
- Sakthi Sugars Limited - India
- Petron Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Central Electricity Authority - India
- Sree Jayajothi Cements Limited - India
- Siam City Cement - Thailand
- Standard Chartered Bank - UAE
- New Zealand Coal & Carbon
- Leighton Contractors Pty Ltd - Australia
- Billiton Holdings Pty Ltd - Australia
- Africa Commodities Group - South Africa
- GAC Shipping (India) Pvt Ltd
- Malabar Cements Ltd - India
- Eastern Energy - Thailand
- London Commodity Brokers - England
- Directorate Of Revenue Intelligence - India
- Kalimantan Lumbung Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Independent Power Producers Association of India
- Energy Link Ltd, New Zealand
- Formosa Plastics Group - Taiwan
- Globalindo Alam Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- San Jose City I Power Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Coal and Oil Company - UAE
- AsiaOL BioFuels Corp., Philippines
- Altura Mining Limited, Indonesia
- Bhoruka Overseas - Indonesia
- Banpu Public Company Limited - Thailand
- Kapuas Tunggal Persada - Indonesia
- Global Business Power Corporation, Philippines
- Goldman Sachs - Singapore
- IEA Clean Coal Centre - UK
- Latin American Coal - Colombia
- Pendopo Energi Batubara - Indonesia
- GMR Energy Limited - India
- Dalmia Cement Bharat India
- Ceylon Electricity Board - Sri Lanka
- Central Java Power - Indonesia
- India Bulls Power Limited - India
- Minerals Council of Australia
- Mercuria Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Grasim Industreis Ltd - India
- Bhatia International Limited - India
- Vedanta Resources Plc - India
- Ministry of Transport, Egypt
- Semirara Mining Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Posco Energy - South Korea
- Chamber of Mines of South Africa
- Iligan Light & Power Inc, Philippines
- Sical Logistics Limited - India
- Gujarat Sidhee Cement - India
- Indonesian Coal Mining Association
- ASAPP Information Group - India
- MS Steel International - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Essar Steel Hazira Ltd - India
- Energy Development Corp, Philippines
- Uttam Galva Steels Limited - India
- Madhucon Powers Ltd - India
- Parliament of New Zealand
- Australian Coal Association
- SMG Consultants - Indonesia
- The Treasury - Australian Government
- Bangladesh Power Developement Board
- Coastal Gujarat Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- Ambuja Cements Ltd - India
- Riau Bara Harum - Indonesia
- Lanco Infratech Ltd - India
- Merrill Lynch Commodities Europe
- Commonwealth Bank - Australia
- Kideco Jaya Agung - Indonesia
- Xindia Steels Limited - India
- Barasentosa Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Planning Commission, India
- South Luzon Thermal Energy Corporation
- GN Power Mariveles Coal Plant, Philippines
- Global Coal Blending Company Limited - Australia
- Ministry of Mines - Canada
- Larsen & Toubro Limited - India
- TeaM Sual Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Romanian Commodities Exchange
- White Energy Company Limited
- Singapore Mercantile Exchange
- Indian Oil Corporation Limited
- Maharashtra Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Holcim Trading Pte Ltd - Singapore
- Intertek Mineral Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
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