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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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Tuesday, 21 February 12
THREAT ISSUED ON MINERAL FIRMS AS GOVT PLANS EXPORT BAN - THE JAKARTA POST
The Jakarta Post, one of the leading english news papaer in Indonesia reported that, the government has given mineral producers three months to subm ...
Monday, 20 February 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU
The dry market experienced one more disappointing week with tonnage oversupply and limited cargo demand that pushes earnings for shipping players to ...
Monday, 20 February 12
JATENERGY SECURES FIRST 8000-TONNE COAL SALES CONTRACT FOR JONGKANG MINES
8000-tonne contract with Singaporean buyer signed for March delivery
50% down payment due in five working days
Production continues at both Jongka ...
Monday, 20 February 12
DIAN SWASTATIKA ACQUIRES ANDALAN LESTARI - INSIDER STORIES
Insider Stories reported that, PT Dian Swastatika Sentosa Tbk (DSSA), controlled by Fuganto Widjaja, son of Indra Widjaja, reported a 99.83% takeove ...
Monday, 20 February 12
COAL BOOM AND ENVIRONMENTAL CONCERN - SUNIL K KUMBHAT
COALspot.com - The dawn of the 21st century has seen a shift in the world's commercial balance of power, with the dominance of the US, Europe and J ...
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- Intertek Mineral Services - Indonesia
- CNBM International Corporation - China
- Gujarat Sidhee Cement - India
- Metalloyd Limited - United Kingdom
- The University of Queensland
- Bhatia International Limited - India
- Iligan Light & Power Inc, Philippines
- White Energy Company Limited
- Sinarmas Energy and Mining - Indonesia
- Electricity Generating Authority of Thailand
- IEA Clean Coal Centre - UK
- South Luzon Thermal Energy Corporation
- Xindia Steels Limited - India
- Central Java Power - Indonesia
- Indika Energy - Indonesia
- Carbofer General Trading SA - India
- Gujarat Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- McConnell Dowell - Australia
- Marubeni Corporation - India
- Coalindo Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Posco Energy - South Korea
- Wilmar Investment Holdings
- GN Power Mariveles Coal Plant, Philippines
- Mercator Lines Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CIMB Investment Bank - Malaysia
- Bulk Trading Sa - Switzerland
- Binh Thuan Hamico - Vietnam
- OPG Power Generation Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Sree Jayajothi Cements Limited - India
- Planning Commission, India
- Essar Steel Hazira Ltd - India
- Kumho Petrochemical, South Korea
- GMR Energy Limited - India
- Energy Development Corp, Philippines
- Simpson Spence & Young - Indonesia
- Orica Mining Services - Indonesia
- Africa Commodities Group - South Africa
- Maheswari Brothers Coal Limited - India
- Anglo American - United Kingdom
- Central Electricity Authority - India
- Eastern Coal Council - USA
- Therma Luzon, Inc, Philippines
- The Treasury - Australian Government
- Minerals Council of Australia
- Deloitte Consulting - India
- Mintek Dendrill Indonesia
- Independent Power Producers Association of India
- Energy Link Ltd, New Zealand
- Price Waterhouse Coopers - Russia
- Ministry of Mines - Canada
- Port Waratah Coal Services - Australia
- Romanian Commodities Exchange
- Meenaskhi Energy Private Limited - India
- Orica Australia Pty. Ltd.
- SMC Global Power, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- IHS Mccloskey Coal Group - USA
- GVK Power & Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- The State Trading Corporation of India Ltd
- San Jose City I Power Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate Of Revenue Intelligence - India
- Jaiprakash Power Ventures ltd
- Sakthi Sugars Limited - India
- Ceylon Electricity Board - Sri Lanka
- Toyota Tsusho Corporation, Japan
- PNOC Exploration Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Australian Commodity Traders Exchange
- Maharashtra Electricity Regulatory Commission - India
- Miang Besar Coal Terminal - Indonesia
- Rio Tinto Coal - Australia
- Sical Logistics Limited - India
- Videocon Industries ltd - India
- Salva Resources Pvt Ltd - India
- Thai Mozambique Logistica
- Banpu Public Company Limited - Thailand
- Sarangani Energy Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Savvy Resources Ltd - HongKong
- Makarim & Taira - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- Indian Energy Exchange, India
- International Coal Ventures Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Mjunction Services Limited - India
- Standard Chartered Bank - UAE
- Bharathi Cement Corporation - India
- Eastern Energy - Thailand
- Antam Resourcindo - Indonesia
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Petron Corporation, Philippines
- Malabar Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Timah Investasi Mineral - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Meralco Power Generation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- PTC India Limited - India
- Bukit Baiduri Energy - Indonesia
- Merrill Lynch Commodities Europe
- Offshore Bulk Terminal Pte Ltd, Singapore
- Formosa Plastics Group - Taiwan
- New Zealand Coal & Carbon
- Kideco Jaya Agung - Indonesia
- Indian Oil Corporation Limited
- Rashtriya Ispat Nigam Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Cement Manufacturers Association - India
- Parry Sugars Refinery, India
- Kaltim Prima Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- London Commodity Brokers - England
- Riau Bara Harum - Indonesia
- Bhushan Steel Limited - India
- Semirara Mining and Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- VISA Power Limited - India
- Siam City Cement - Thailand
- SN Aboitiz Power Inc, Philippines
- Medco Energi Mining Internasional
- Global Business Power Corporation, Philippines
- Singapore Mercantile Exchange
- Star Paper Mills Limited - India
- GAC Shipping (India) Pvt Ltd
- Coastal Gujarat Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Aditya Birla Group - India
- SMG Consultants - Indonesia
- Global Green Power PLC Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Kepco SPC Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Thiess Contractors Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Manunggal Multi Energi - Indonesia
- Chettinad Cement Corporation Ltd - India
- Georgia Ports Authority, United States
- Kalimantan Lumbung Energi - Indonesia
- Attock Cement Pakistan Limited
- Altura Mining Limited, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bhoruka Overseas - Indonesia
- Semirara Mining Corp, Philippines
- Bangladesh Power Developement Board
- Indonesian Coal Mining Association
- Economic Council, Georgia
- Asmin Koalindo Tuhup - Indonesia
- Indogreen Group - Indonesia
- Australian Coal Association
- Madhucon Powers Ltd - India
- Mercuria Energy - Indonesia
- Ministry of Finance - Indonesia
- Edison Trading Spa - Italy
- Karaikal Port Pvt Ltd - India
- Vedanta Resources Plc - India
- Petrochimia International Co. Ltd.- Taiwan
- Oldendorff Carriers - Singapore
- Coal and Oil Company - UAE
- Vizag Seaport Private Limited - India
- Kobexindo Tractors - Indoneisa
- Commonwealth Bank - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Renaissance Capital - South Africa
- Cigading International Bulk Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- ICICI Bank Limited - India
- Uttam Galva Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Power Finance Corporation Ltd., India
- Kartika Selabumi Mining - Indonesia
- Chamber of Mines of South Africa
- Straits Asia Resources Limited - Singapore
- Grasim Industreis Ltd - India
- Siam City Cement PLC, Thailand
- Agrawal Coal Company - India
- ASAPP Information Group - India
- Ministry of Transport, Egypt
- India Bulls Power Limited - India
- Sindya Power Generating Company Private Ltd
- Sojitz Corporation - Japan
- Goldman Sachs - Singapore
- Barasentosa Lestari - Indonesia
- Tata Chemicals Ltd - India
- Ambuja Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Electricity Authority, New Zealand
- Dalmia Cement Bharat India
- PetroVietnam Power Coal Import and Supply Company
- Samtan Co., Ltd - South Korea
- Latin American Coal - Colombia
- Alfred C Toepfer International GmbH - Germany
- Tamil Nadu electricity Board
- Lanco Infratech Ltd - India
- Heidelberg Cement - Germany
- AsiaOL BioFuels Corp., Philippines
- Trasteel International SA, Italy
- Globalindo Alam Lestari - Indonesia
- Baramulti Group, Indonesia
- Borneo Indobara - Indonesia
- MS Steel International - UAE
- Larsen & Toubro Limited - India
- PowerSource Philippines DevCo
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