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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, 31 January 12
THERE ARE MANY GOOD REASONS FOR COAL IN GERMANY - DR CIESLIK
COALspot.com - "The year 2011 was again marked by many changes on the markets and energy policies, at times in line with expectations, but at o ...
Tuesday, 31 January 12
DRY BULK MARKET KEEPS FALLING FOR WORST MONTH IN YEARS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market didn't manage to put a halt in its downfall, with the industry's benchmark, the BDI (Baltic Dry Index), posting yet another fa ...
Monday, 30 January 12
CHINA'S HUNGER FOR COAL LEAVES DENT IN PENNSYLVANIA'S SUPPLY - THOMAS LESKIN
With the price of heating oil on the rise, one of Pennsylvania's greatest natural resources - coal - is in high demand, and not just locally.
Et ...
Saturday, 28 January 12
WILL FREIGHT MARKET STABILIZE FROM NEXT WEEK?
COALspot.com - The markets continued to soften with BDI at 663 points down by 15.78 pct closing at 726 points and cape index was down by 5.73 pct cl ...
Friday, 27 January 12
DEMOLITION ACTIVITY NEEDS TO INCREASE SIGNIFICANTLY THIS YEAR AS WELL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The oversupply of vessels in most shipping sectors is so intense that it’s become clear to ship owners that unless they scrap as many of their ...
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- CNBM International Corporation - China
- SMG Consultants - Indonesia
- Port Waratah Coal Services - Australia
- Ambuja Cements Ltd - India
- Renaissance Capital - South Africa
- Trasteel International SA, Italy
- PetroVietnam Power Coal Import and Supply Company
- Borneo Indobara - Indonesia
- Ministry of Mines - Canada
- Electricity Authority, New Zealand
- ICICI Bank Limited - India
- Eastern Energy - Thailand
- Straits Asia Resources Limited - Singapore
- SN Aboitiz Power Inc, Philippines
- Barasentosa Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- Rio Tinto Coal - Australia
- Wilmar Investment Holdings
- Bangladesh Power Developement Board
- Coal and Oil Company - UAE
- GMR Energy Limited - India
- Pendopo Energi Batubara - Indonesia
- The State Trading Corporation of India Ltd
- Price Waterhouse Coopers - Russia
- Ministry of Transport, Egypt
- LBH Netherlands Bv - Netherlands
- PowerSource Philippines DevCo
- The Treasury - Australian Government
- Wood Mackenzie - Singapore
- Leighton Contractors Pty Ltd - Australia
- Independent Power Producers Association of India
- Mercuria Energy - Indonesia
- Larsen & Toubro Limited - India
- McConnell Dowell - Australia
- Krishnapatnam Port Company Ltd. - India
- Billiton Holdings Pty Ltd - Australia
- Minerals Council of Australia
- Gujarat Sidhee Cement - India
- Central Java Power - Indonesia
- Indogreen Group - Indonesia
- Kepco SPC Power Corporation, Philippines
- Carbofer General Trading SA - India
- Simpson Spence & Young - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Videocon Industries ltd - India
- Thiess Contractors Indonesia
- Bulk Trading Sa - Switzerland
- Goldman Sachs - Singapore
- Meenaskhi Energy Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Tamil Nadu electricity Board
- Malabar Cements Ltd - India
- Marubeni Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vizag Seaport Private Limited - India
- Thai Mozambique Logistica
- Agrawal Coal Company - India
- Sakthi Sugars Limited - India
- Siam City Cement PLC, Thailand
- Bhatia International Limited - India
- Attock Cement Pakistan Limited
- Coastal Gujarat Power Limited - India
- Makarim & Taira - Indonesia
- Indika Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- India Bulls Power Limited - India
- Star Paper Mills Limited - India
- Parry Sugars Refinery, India
- Siam City Cement - Thailand
- Meralco Power Generation, Philippines
- White Energy Company Limited
- Singapore Mercantile Exchange
- Global Coal Blending Company Limited - Australia
- London Commodity Brokers - England
- Eastern Coal Council - USA
- San Jose City I Power Corp, Philippines
- Chamber of Mines of South Africa
- CIMB Investment Bank - Malaysia
- Orica Australia Pty. Ltd.
- Planning Commission, India
- Rashtriya Ispat Nigam Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Tata Chemicals Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Edison Trading Spa - Italy
- Ceylon Electricity Board - Sri Lanka
- Karbindo Abesyapradhi - Indoneisa
- Indian Energy Exchange, India
- Uttam Galva Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Semirara Mining Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Jaiprakash Power Ventures ltd
- Pipit Mutiara Jaya. PT, Indonesia
- South Luzon Thermal Energy Corporation
- Bayan Resources Tbk. - Indonesia
- AsiaOL BioFuels Corp., Philippines
- European Bulk Services B.V. - Netherlands
- Kobexindo Tractors - Indoneisa
- Global Business Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Bhushan Steel Limited - India
- Holcim Trading Pte Ltd - Singapore
- Vedanta Resources Plc - India
- IHS Mccloskey Coal Group - USA
- Globalindo Alam Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Interocean Group of Companies - India
- Manunggal Multi Energi - Indonesia
- PTC India Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Directorate Of Revenue Intelligence - India
- Kartika Selabumi Mining - Indonesia
- Bharathi Cement Corporation - India
- Heidelberg Cement - Germany
- Mintek Dendrill Indonesia
- Oldendorff Carriers - Singapore
- Kumho Petrochemical, South Korea
- Economic Council, Georgia
- Anglo American - United Kingdom
- Ministry of Finance - Indonesia
- Deloitte Consulting - India
- Metalloyd Limited - United Kingdom
- Sarangani Energy Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Medco Energi Mining Internasional
- Kohat Cement Company Ltd. - Pakistan
- VISA Power Limited - India
- SMC Global Power, Philippines
- OPG Power Generation Pvt Ltd - India
- Sojitz Corporation - Japan
- Xindia Steels Limited - India
- New Zealand Coal & Carbon
- Dalmia Cement Bharat India
- Essar Steel Hazira Ltd - India
- Bukit Baiduri Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Timah Investasi Mineral - Indoneisa
- Sical Logistics Limited - India
- Posco Energy - South Korea
- Miang Besar Coal Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Petron Corporation, Philippines
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Commonwealth Bank - Australia
- Parliament of New Zealand
- Power Finance Corporation Ltd., India
- GAC Shipping (India) Pvt Ltd
- Bukit Makmur.PT - Indonesia
- Romanian Commodities Exchange
- Maharashtra Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Georgia Ports Authority, United States
- Energy Link Ltd, New Zealand
- Indonesian Coal Mining Association
- Australian Commodity Traders Exchange
- Grasim Industreis Ltd - India
- ASAPP Information Group - India
- Jindal Steel & Power Ltd - India
- Maheswari Brothers Coal Limited - India
- Antam Resourcindo - Indonesia
- Africa Commodities Group - South Africa
- Coalindo Energy - Indonesia
- Madhucon Powers Ltd - India
- Kaltim Prima Coal - Indonesia
- Karaikal Port Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- TeaM Sual Corporation - Philippines
- IEA Clean Coal Centre - UK
- Savvy Resources Ltd - HongKong
- Directorate General of MIneral and Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Standard Chartered Bank - UAE
- Merrill Lynch Commodities Europe
- Therma Luzon, Inc, Philippines
- Aditya Birla Group - India
- MS Steel International - UAE
- Sree Jayajothi Cements Limited - India
- Riau Bara Harum - Indonesia
- Iligan Light & Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Mjunction Services Limited - India
- Bhoruka Overseas - Indonesia
- GVK Power & Infra Limited - India
- Australian Coal Association
- Sinarmas Energy and Mining - Indonesia
- Baramulti Group, Indonesia
- Lanco Infratech Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Formosa Plastics Group - Taiwan
- Kideco Jaya Agung - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- GN Power Mariveles Coal Plant, Philippines
- Orica Mining Services - Indonesia
- Electricity Generating Authority of Thailand
- Ind-Barath Power Infra Limited - India
- Central Electricity Authority - India
- The University of Queensland
- Aboitiz Power Corporation - Philippines
- Mercator Lines Limited - India
- Latin American Coal - Colombia
- Banpu Public Company Limited - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- PNOC Exploration Corporation - Philippines
- Indian Oil Corporation Limited
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