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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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Friday, 10 February 12
TONNAGE KEEPS ON COMING - DREWRY
Drewry Maritime Research’s latest edition of its Dry Bulk Forecaster pulls no punches in its assessment of a market that looks certain to cont ...
Friday, 10 February 12
GIVE PERMIT POWERS TO GOVERNORS: MINERS - THE JAKARTA POST
The Jakarta Post reported that, following clashes between mining companies and local residents, the Indonesian Mining Association (IMA) wants to tra ...
Thursday, 09 February 12
AUSTRALIA'S EPIC TO ACQUIRE 15,500 HA COAL EXPLORATION LICENCES IN EAST KALIMANTAN, INDONESIA
COALspot.com - Epic Resources Limited to acquire two coal concessions in Kutai Barat regency, East Kalimantan, Indonesia.
According to company's ...
Thursday, 09 February 12
RESOURCE ALAM BUYS 28,521HA CONCESSIONS - INSIDER STORIES
Insider Stories reported that, PT Resource Alam Indonesia Tbk (KKGI), owned by Adijanto family, today announced acquisition of 75% interest in PT Ka ...
Tuesday, 07 February 12
DRY BULK MARKET FINALLY STOPS DECLINE, POSTS FIRST RISE IN MORE THAN A MONTH - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
After falling to near record lows, not seen since the mid-80s the dry bulk market has finally stopped its path to "hell", with the industr ...
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- Chettinad Cement Corporation Ltd - India
- Mintek Dendrill Indonesia
- Vizag Seaport Private Limited - India
- New Zealand Coal & Carbon
- Pipit Mutiara Jaya. PT, Indonesia
- Bhushan Steel Limited - India
- PTC India Limited - India
- Global Coal Blending Company Limited - Australia
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement - Thailand
- Semirara Mining and Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Thiess Contractors Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Chamber of Mines of South Africa
- Binh Thuan Hamico - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Australian Commodity Traders Exchange
- Alfred C Toepfer International GmbH - Germany
- PetroVietnam Power Coal Import and Supply Company
- Africa Commodities Group - South Africa
- Semirara Mining Corp, Philippines
- Bhatia International Limited - India
- Riau Bara Harum - Indonesia
- Videocon Industries ltd - India
- Barasentosa Lestari - Indonesia
- Economic Council, Georgia
- Aditya Birla Group - India
- Agrawal Coal Company - India
- GAC Shipping (India) Pvt Ltd
- Interocean Group of Companies - India
- Rashtriya Ispat Nigam Limited - India
- Energy Development Corp, Philippines
- Salva Resources Pvt Ltd - India
- MS Steel International - UAE
- Thai Mozambique Logistica
- Attock Cement Pakistan Limited
- European Bulk Services B.V. - Netherlands
- IEA Clean Coal Centre - UK
- Jorong Barutama Greston.PT - Indonesia
- Bangladesh Power Developement Board
- Sojitz Corporation - Japan
- Orica Australia Pty. Ltd.
- Lanco Infratech Ltd - India
- Ministry of Mines - Canada
- GMR Energy Limited - India
- The Treasury - Australian Government
- Central Java Power - Indonesia
- Indika Energy - Indonesia
- Parry Sugars Refinery, India
- Gujarat Mineral Development Corp Ltd - India
- Meralco Power Generation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Anglo American - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Bharathi Cement Corporation - India
- McConnell Dowell - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kideco Jaya Agung - Indonesia
- Madhucon Powers Ltd - India
- Ambuja Cements Ltd - India
- Oldendorff Carriers - Singapore
- Edison Trading Spa - Italy
- Posco Energy - South Korea
- Kartika Selabumi Mining - Indonesia
- Xindia Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- San Jose City I Power Corp, Philippines
- CIMB Investment Bank - Malaysia
- Kobexindo Tractors - Indoneisa
- ASAPP Information Group - India
- Global Green Power PLC Corporation, Philippines
- India Bulls Power Limited - India
- Jaiprakash Power Ventures ltd
- Ministry of Transport, Egypt
- Manunggal Multi Energi - Indonesia
- Bulk Trading Sa - Switzerland
- Straits Asia Resources Limited - Singapore
- Toyota Tsusho Corporation, Japan
- Baramulti Group, Indonesia
- Samtan Co., Ltd - South Korea
- Global Business Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Carbofer General Trading SA - India
- Neyveli Lignite Corporation Ltd, - India
- The University of Queensland
- Standard Chartered Bank - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- Kumho Petrochemical, South Korea
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- Kalimantan Lumbung Energi - Indonesia
- Savvy Resources Ltd - HongKong
- SMC Global Power, Philippines
- Parliament of New Zealand
- Ind-Barath Power Infra Limited - India
- Planning Commission, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The State Trading Corporation of India Ltd
- Gujarat Sidhee Cement - India
- Kapuas Tunggal Persada - Indonesia
- VISA Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- GVK Power & Infra Limited - India
- Cigading International Bulk Terminal - Indonesia
- Antam Resourcindo - Indonesia
- Aboitiz Power Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Trasteel International SA, Italy
- Makarim & Taira - Indonesia
- Eastern Coal Council - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Star Paper Mills Limited - India
- Maheswari Brothers Coal Limited - India
- Minerals Council of Australia
- Goldman Sachs - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Orica Mining Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Mjunction Services Limited - India
- Indonesian Coal Mining Association
- Mercator Lines Limited - India
- Sree Jayajothi Cements Limited - India
- Rio Tinto Coal - Australia
- Grasim Industreis Ltd - India
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Independent Power Producers Association of India
- Banpu Public Company Limited - Thailand
- ICICI Bank Limited - India
- Sical Logistics Limited - India
- Meenaskhi Energy Private Limited - India
- IHS Mccloskey Coal Group - USA
- Latin American Coal - Colombia
- Renaissance Capital - South Africa
- Altura Mining Limited, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Wood Mackenzie - Singapore
- Singapore Mercantile Exchange
- Energy Link Ltd, New Zealand
- Bhoruka Overseas - Indonesia
- Bayan Resources Tbk. - Indonesia
- Indo Tambangraya Megah - Indonesia
- Borneo Indobara - Indonesia
- PowerSource Philippines DevCo
- Indogreen Group - Indonesia
- Medco Energi Mining Internasional
- International Coal Ventures Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Power Finance Corporation Ltd., India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercuria Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Georgia Ports Authority, United States
- Kepco SPC Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Leighton Contractors Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- Coalindo Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Essar Steel Hazira Ltd - India
- Therma Luzon, Inc, Philippines
- Tamil Nadu electricity Board
- Indian Oil Corporation Limited
- Bukit Baiduri Energy - Indonesia
- CNBM International Corporation - China
- Maharashtra Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Australian Coal Association
- SMG Consultants - Indonesia
- Siam City Cement PLC, Thailand
- Deloitte Consulting - India
- Ministry of Finance - Indonesia
- PNOC Exploration Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Indian Energy Exchange, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Merrill Lynch Commodities Europe
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Romanian Commodities Exchange
- Heidelberg Cement - Germany
- Wilmar Investment Holdings
- Port Waratah Coal Services - Australia
- LBH Netherlands Bv - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- Larsen & Toubro Limited - India
- Commonwealth Bank - Australia
- Malabar Cements Ltd - India
- White Energy Company Limited
- Petrochimia International Co. Ltd.- Taiwan
- Simpson Spence & Young - Indonesia
- Price Waterhouse Coopers - Russia
- Marubeni Corporation - India
- Petron Corporation, Philippines
- Cement Manufacturers Association - India
- Dalmia Cement Bharat India
- Electricity Generating Authority of Thailand
- Kaltim Prima Coal - Indonesia
- Eastern Energy - Thailand
- Timah Investasi Mineral - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Globalindo Alam Lestari - Indonesia
- London Commodity Brokers - England
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- Bukit Makmur.PT - Indonesia
- Tata Chemicals Ltd - India
- OPG Power Generation Pvt Ltd - India
- Vedanta Resources Plc - India
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