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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, 26 January 12
ABM INVESTAMA SEALS US$100 MIO CONTRACT - INSIDER STORIES
Insider Stories reported that, PT Reswara Minergi Hartama, a subsidary of PT ABM Investama Tbk (ABMM), has sealed a 2 million tons of coal export co ...
Thursday, 26 January 12
DRY BULK MARKETS DOWNFALL KNOWS NO LIMITS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market’s demise seems to have no visible end, as China’s Lunar Year Holidays continue this week, thus leaving demand with n ...
Wednesday, 25 January 12
CLEAN AND CLEAR MINING PERMITS TO BE COMPLETED END OF 2012 - BISNIS.COM
Bisnis.com reported that, the government plans to announce 700 mining permits with "clean and clear" status without overlapping on other p ...
Tuesday, 24 January 12
ANOTHER SEVERE DROP IN THE CAPESIZE - BRS
The lunar year celebrations and the high number of new building deliveries (more than 35 Capes so far in January as owners push 2011 deliveries into ...
Tuesday, 24 January 12
BUKIT ASAM FY11 NET PROFIT SURGES 50% - INSIDER STORIES
Insider Stories reported that, the state-controlled PT Bukit Asam Tbk (PTBA) estimated to book Rp3 trillion (approximately US$ 335,570,469) net prof ...
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- Mercuria Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Therma Luzon, Inc, Philippines
- Salva Resources Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Wood Mackenzie - Singapore
- Eastern Coal Council - USA
- Straits Asia Resources Limited - Singapore
- European Bulk Services B.V. - Netherlands
- Kartika Selabumi Mining - Indonesia
- Australian Coal Association
- Madhucon Powers Ltd - India
- Grasim Industreis Ltd - India
- Indian Energy Exchange, India
- Barasentosa Lestari - Indonesia
- Cement Manufacturers Association - India
- Oldendorff Carriers - Singapore
- Power Finance Corporation Ltd., India
- Sinarmas Energy and Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Formosa Plastics Group - Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- PowerSource Philippines DevCo
- Orica Mining Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Finance - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Star Paper Mills Limited - India
- Bhushan Steel Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Maheswari Brothers Coal Limited - India
- Minerals Council of Australia
- Africa Commodities Group - South Africa
- SN Aboitiz Power Inc, Philippines
- PTC India Limited - India
- India Bulls Power Limited - India
- Metalloyd Limited - United Kingdom
- Central Electricity Authority - India
- Kideco Jaya Agung - Indonesia
- Ministry of Transport, Egypt
- SMC Global Power, Philippines
- Commonwealth Bank - Australia
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Indian Oil Corporation Limited
- McConnell Dowell - Australia
- Meralco Power Generation, Philippines
- Bhoruka Overseas - Indonesia
- Tata Chemicals Ltd - India
- Indonesian Coal Mining Association
- MS Steel International - UAE
- Deloitte Consulting - India
- Standard Chartered Bank - UAE
- Binh Thuan Hamico - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- TeaM Sual Corporation - Philippines
- Uttam Galva Steels Limited - India
- White Energy Company Limited
- Indogreen Group - Indonesia
- Xindia Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Savvy Resources Ltd - HongKong
- Electricity Authority, New Zealand
- Ministry of Mines - Canada
- CIMB Investment Bank - Malaysia
- Sakthi Sugars Limited - India
- Trasteel International SA, Italy
- Georgia Ports Authority, United States
- Parry Sugars Refinery, India
- Iligan Light & Power Inc, Philippines
- Bhatia International Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- IEA Clean Coal Centre - UK
- Sojitz Corporation - Japan
- Videocon Industries ltd - India
- Riau Bara Harum - Indonesia
- Bayan Resources Tbk. - Indonesia
- Mercator Lines Limited - India
- Samtan Co., Ltd - South Korea
- Tamil Nadu electricity Board
- Meenaskhi Energy Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Kumho Petrochemical, South Korea
- Global Green Power PLC Corporation, Philippines
- Electricity Generating Authority of Thailand
- Kalimantan Lumbung Energi - Indonesia
- Ambuja Cements Ltd - India
- Aditya Birla Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Sidhee Cement - India
- Mjunction Services Limited - India
- Aboitiz Power Corporation - Philippines
- Petron Corporation, Philippines
- Interocean Group of Companies - India
- PNOC Exploration Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Pendopo Energi Batubara - Indonesia
- Chamber of Mines of South Africa
- Mintek Dendrill Indonesia
- Global Coal Blending Company Limited - Australia
- Independent Power Producers Association of India
- ASAPP Information Group - India
- Miang Besar Coal Terminal - Indonesia
- GVK Power & Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- CNBM International Corporation - China
- Offshore Bulk Terminal Pte Ltd, Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Carbofer General Trading SA - India
- Vizag Seaport Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement PLC, Thailand
- Rio Tinto Coal - Australia
- Asmin Koalindo Tuhup - Indonesia
- Intertek Mineral Services - Indonesia
- San Jose City I Power Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Agrawal Coal Company - India
- Coal and Oil Company - UAE
- Timah Investasi Mineral - Indoneisa
- Baramulti Group, Indonesia
- Singapore Mercantile Exchange
- Jindal Steel & Power Ltd - India
- Global Business Power Corporation, Philippines
- Vedanta Resources Plc - India
- Central Java Power - Indonesia
- Australian Commodity Traders Exchange
- Semirara Mining Corp, Philippines
- Siam City Cement - Thailand
- Port Waratah Coal Services - Australia
- Medco Energi Mining Internasional
- Thiess Contractors Indonesia
- Holcim Trading Pte Ltd - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The Treasury - Australian Government
- Planning Commission, India
- Attock Cement Pakistan Limited
- Bukit Makmur.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Antam Resourcindo - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Petrochimia International Co. Ltd.- Taiwan
- Leighton Contractors Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Makarim & Taira - Indonesia
- Ind-Barath Power Infra Limited - India
- Renaissance Capital - South Africa
- Semirara Mining and Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- Energy Link Ltd, New Zealand
- Romanian Commodities Exchange
- Latin American Coal - Colombia
- Anglo American - United Kingdom
- Price Waterhouse Coopers - Russia
- Kobexindo Tractors - Indoneisa
- Bharathi Cement Corporation - India
- Essar Steel Hazira Ltd - India
- OPG Power Generation Pvt Ltd - India
- Bangladesh Power Developement Board
- Orica Australia Pty. Ltd.
- Toyota Tsusho Corporation, Japan
- SMG Consultants - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Posco Energy - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- IHS Mccloskey Coal Group - USA
- AsiaOL BioFuels Corp., Philippines
- Jorong Barutama Greston.PT - Indonesia
- Edison Trading Spa - Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Manunggal Multi Energi - Indonesia
- Altura Mining Limited, Indonesia
- Sree Jayajothi Cements Limited - India
- Thai Mozambique Logistica
- Goldman Sachs - Singapore
- GMR Energy Limited - India
- The State Trading Corporation of India Ltd
- LBH Netherlands Bv - Netherlands
- ICICI Bank Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Indika Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- London Commodity Brokers - England
- Larsen & Toubro Limited - India
- New Zealand Coal & Carbon
- Directorate Of Revenue Intelligence - India
- Merrill Lynch Commodities Europe
- Marubeni Corporation - India
- Kepco SPC Power Corporation, Philippines
- Energy Development Corp, Philippines
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Parliament of New Zealand
- Economic Council, Georgia
- Heidelberg Cement - Germany
- Wilmar Investment Holdings
- Simpson Spence & Young - Indonesia
- Dalmia Cement Bharat India
- South Luzon Thermal Energy Corporation
- Cigading International Bulk Terminal - Indonesia
- Sical Logistics Limited - India
- Coalindo Energy - Indonesia
- Borneo Indobara - Indonesia
- The University of Queensland
- Rashtriya Ispat Nigam Limited - India
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