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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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Sunday, 19 February 12
THE SPOT FIXTURE RATES WERE REPORTED AT HIGH LEVELS - VISTAAR
COALspot.com - "The markets seems to holding back this week appears the momentum which picked up last week may slow down" - Capt. Reddy of ...
Sunday, 19 February 12
INDIKA ACQUIRES MULTI TAMBANGJAYA - INSIDER STORIES
Insider Stories reported that, PT Indika Energy Tbk (INDY) announced that wholly-owned subsidiaries have signed a conditional sale and purchase agre ...
Friday, 17 February 12
COLOMBIA COAL PRODUCTION, EXPORTS JUMP IN 2011: GOVT - COLOMBIA REPORTS
Colombia Reports reported that, colombia's coal production jumped 15.4% in 2011 to 85.8 million tonnes versus the previous year while exports rose ...
Thursday, 16 February 12
GEARING UP FOR THE EMERGING OIL & GAS OPPORTUNITIES IN MYANMAR
Press Release - Myanmar Ministry of Energy and Centre for Management Technology (CMT) to Co-host MOGP (Myanmar Oil, Gas & Power) Summit on 28 - ...
Wednesday, 15 February 12
HBA FOR FEB 2012, CLIMBS 2.09 PERCENT AND REACHED US$ 111.58 PER TON
COALspot.com - The Indonesian coal reference price for February climbs 2.09 percent to US$111.58 per ton after losing past three months. ...
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- GMR Energy Limited - India
- Directorate General of MIneral and Coal - Indonesia
- GVK Power & Infra Limited - India
- Bhoruka Overseas - Indonesia
- Tata Chemicals Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Sree Jayajothi Cements Limited - India
- Wood Mackenzie - Singapore
- Maheswari Brothers Coal Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Ambuja Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Uttam Galva Steels Limited - India
- Malabar Cements Ltd - India
- Orica Australia Pty. Ltd.
- Sakthi Sugars Limited - India
- Mjunction Services Limited - India
- Grasim Industreis Ltd - India
- The University of Queensland
- Indika Energy - Indonesia
- Carbofer General Trading SA - India
- Attock Cement Pakistan Limited
- San Jose City I Power Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Miang Besar Coal Terminal - Indonesia
- Eastern Energy - Thailand
- Maharashtra Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Aditya Birla Group - India
- London Commodity Brokers - England
- Latin American Coal - Colombia
- IHS Mccloskey Coal Group - USA
- GN Power Mariveles Coal Plant, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Cement Manufacturers Association - India
- Petron Corporation, Philippines
- Baramulti Group, Indonesia
- Kartika Selabumi Mining - Indonesia
- Indonesian Coal Mining Association
- Antam Resourcindo - Indonesia
- Indogreen Group - Indonesia
- Port Waratah Coal Services - Australia
- Barasentosa Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Tamil Nadu electricity Board
- Dalmia Cement Bharat India
- Essar Steel Hazira Ltd - India
- PowerSource Philippines DevCo
- Vedanta Resources Plc - India
- Renaissance Capital - South Africa
- Coastal Gujarat Power Limited - India
- Central Java Power - Indonesia
- Thai Mozambique Logistica
- Goldman Sachs - Singapore
- Timah Investasi Mineral - Indoneisa
- TeaM Sual Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Sical Logistics Limited - India
- Posco Energy - South Korea
- Kaltim Prima Coal - Indonesia
- Interocean Group of Companies - India
- Heidelberg Cement - Germany
- Minerals Council of Australia
- Wilmar Investment Holdings
- Xindia Steels Limited - India
- Trasteel International SA, Italy
- Star Paper Mills Limited - India
- Therma Luzon, Inc, Philippines
- Anglo American - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- Georgia Ports Authority, United States
- Electricity Authority, New Zealand
- PNOC Exploration Corporation - Philippines
- Ministry of Finance - Indonesia
- Oldendorff Carriers - Singapore
- Independent Power Producers Association of India
- GAC Shipping (India) Pvt Ltd
- Bukit Makmur.PT - Indonesia
- ASAPP Information Group - India
- Electricity Generating Authority of Thailand
- Semirara Mining Corp, Philippines
- Jindal Steel & Power Ltd - India
- IEA Clean Coal Centre - UK
- Bhatia International Limited - India
- Leighton Contractors Pty Ltd - Australia
- The Treasury - Australian Government
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Romanian Commodities Exchange
- Central Electricity Authority - India
- Australian Commodity Traders Exchange
- Bayan Resources Tbk. - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Coalindo Energy - Indonesia
- Larsen & Toubro Limited - India
- Kumho Petrochemical, South Korea
- MS Steel International - UAE
- Globalindo Alam Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Agrawal Coal Company - India
- Banpu Public Company Limited - Thailand
- Indo Tambangraya Megah - Indonesia
- Aboitiz Power Corporation - Philippines
- Indian Energy Exchange, India
- Toyota Tsusho Corporation, Japan
- Mercator Lines Limited - India
- Kapuas Tunggal Persada - Indonesia
- Parliament of New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Energy Development Corp, Philippines
- Economic Council, Georgia
- CNBM International Corporation - China
- Meralco Power Generation, Philippines
- Medco Energi Mining Internasional
- AsiaOL BioFuels Corp., Philippines
- Indian Oil Corporation Limited
- Parry Sugars Refinery, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Planning Commission, India
- Semirara Mining and Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- SN Aboitiz Power Inc, Philippines
- Ministry of Transport, Egypt
- Sarangani Energy Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Bharathi Cement Corporation - India
- Global Green Power PLC Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Metalloyd Limited - United Kingdom
- Mintek Dendrill Indonesia
- Samtan Co., Ltd - South Korea
- Riau Bara Harum - Indonesia
- Standard Chartered Bank - UAE
- Sojitz Corporation - Japan
- Bangladesh Power Developement Board
- ICICI Bank Limited - India
- Bukit Baiduri Energy - Indonesia
- Australian Coal Association
- India Bulls Power Limited - India
- European Bulk Services B.V. - Netherlands
- Krishnapatnam Port Company Ltd. - India
- Marubeni Corporation - India
- South Luzon Thermal Energy Corporation
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Intertek Mineral Services - Indonesia
- Rio Tinto Coal - Australia
- Jaiprakash Power Ventures ltd
- Kohat Cement Company Ltd. - Pakistan
- Neyveli Lignite Corporation Ltd, - India
- Videocon Industries ltd - India
- Salva Resources Pvt Ltd - India
- Siam City Cement - Thailand
- Madhucon Powers Ltd - India
- Merrill Lynch Commodities Europe
- Lanco Infratech Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Power Finance Corporation Ltd., India
- White Energy Company Limited
- Energy Link Ltd, New Zealand
- Africa Commodities Group - South Africa
- Vizag Seaport Private Limited - India
- Singapore Mercantile Exchange
- CIMB Investment Bank - Malaysia
- Cigading International Bulk Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Kobexindo Tractors - Indoneisa
- Orica Mining Services - Indonesia
- Altura Mining Limited, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rashtriya Ispat Nigam Limited - India
- Commonwealth Bank - Australia
- Holcim Trading Pte Ltd - Singapore
- Mercuria Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Makarim & Taira - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Deloitte Consulting - India
- Chamber of Mines of South Africa
- Price Waterhouse Coopers - Russia
- SMG Consultants - Indonesia
- Sindya Power Generating Company Private Ltd
- PTC India Limited - India
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- Global Coal Blending Company Limited - Australia
- Karaikal Port Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Siam City Cement PLC, Thailand
- Iligan Light & Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Ministry of Mines - Canada
- Meenaskhi Energy Private Limited - India
- The State Trading Corporation of India Ltd
- LBH Netherlands Bv - Netherlands
- Borneo Indobara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Edison Trading Spa - Italy
- Bhushan Steel Limited - India
- SMC Global Power, Philippines
- Kepco SPC Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- VISA Power Limited - India
- New Zealand Coal & Carbon
- Coal and Oil Company - UAE
- Gujarat Sidhee Cement - India
- Thiess Contractors Indonesia
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