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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, 22 January 12
FREIGHT MARKET DROPPED TO THE LOWEST LEVEL SINCE 2008
COALspot.com - "The markets continued to soften almost reaching 2008 levels breaking the 1,000 point mark", said Capt. Reddy of Vistaar Sh ...
Saturday, 21 January 12
ASIAS PREMIER COMPREHENSIVE OPEN CUT MINING CONFERENCE SCHEDULED FOR FEBRUARY 2012
As the only such conference in the region for miners and service providers, IBC Asia’s Open Cut Mine Planning & Operational Excellence con ...
Saturday, 21 January 12
COAL MARKETS CELEBRATES A DECADE OF BRINGING BUYERS & SELLERS TOGETHER
In 2012, IBC Asia’s premier Coal Markets conference series – Asia’s only globally focused coal import, export and supply chain eve ...
Saturday, 21 January 12
SAMIN TAN COMPLETES BUMI PLC TAKEOVER - INSIDER STORIES
Insider Stories reported that, Indonesian coking coal miner PT Borneo Lumbung Energi & Metal Tbk (BORN), that is controlled by stellar businessm ...
Thursday, 19 January 12
SOUTHGOBI RESOURCES SELLS MORE THAN FOUR MILLION TONNES OF COAL IN 2011, 58% MORE THAN 2010
COALspot.com - SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) has successfully complets year 2011 on guidance in terms of coal sales and production.
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- Parry Sugars Refinery, India
- Videocon Industries ltd - India
- Semirara Mining Corp, Philippines
- Malabar Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Central Java Power - Indonesia
- Borneo Indobara - Indonesia
- SMC Global Power, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Wood Mackenzie - Singapore
- Agrawal Coal Company - India
- Energy Link Ltd, New Zealand
- Orica Mining Services - Indonesia
- Salva Resources Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- White Energy Company Limited
- Karaikal Port Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Barasentosa Lestari - Indonesia
- Africa Commodities Group - South Africa
- Mercuria Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- CNBM International Corporation - China
- Anglo American - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- The University of Queensland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petrochimia International Co. Ltd.- Taiwan
- PetroVietnam Power Coal Import and Supply Company
- Bangladesh Power Developement Board
- Medco Energi Mining Internasional
- Larsen & Toubro Limited - India
- Aditya Birla Group - India
- Globalindo Alam Lestari - Indonesia
- Indian Oil Corporation Limited
- Riau Bara Harum - Indonesia
- Carbofer General Trading SA - India
- Jindal Steel & Power Ltd - India
- Cement Manufacturers Association - India
- GAC Shipping (India) Pvt Ltd
- Kaltim Prima Coal - Indonesia
- Latin American Coal - Colombia
- Eastern Energy - Thailand
- Indian Energy Exchange, India
- Mintek Dendrill Indonesia
- Holcim Trading Pte Ltd - Singapore
- AsiaOL BioFuels Corp., Philippines
- MS Steel International - UAE
- Coastal Gujarat Power Limited - India
- Savvy Resources Ltd - HongKong
- SMG Consultants - Indonesia
- Straits Asia Resources Limited - Singapore
- Sinarmas Energy and Mining - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Transport, Egypt
- San Jose City I Power Corp, Philippines
- Gujarat Sidhee Cement - India
- Gujarat Mineral Development Corp Ltd - India
- Electricity Authority, New Zealand
- Jaiprakash Power Ventures ltd
- VISA Power Limited - India
- Wilmar Investment Holdings
- PNOC Exploration Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Intertek Mineral Services - Indonesia
- Xindia Steels Limited - India
- PowerSource Philippines DevCo
- Minerals Council of Australia
- Orica Australia Pty. Ltd.
- Star Paper Mills Limited - India
- Toyota Tsusho Corporation, Japan
- Thai Mozambique Logistica
- IEA Clean Coal Centre - UK
- Commonwealth Bank - Australia
- Power Finance Corporation Ltd., India
- Bukit Baiduri Energy - Indonesia
- Siam City Cement PLC, Thailand
- Rashtriya Ispat Nigam Limited - India
- Alfred C Toepfer International GmbH - Germany
- GMR Energy Limited - India
- Directorate Of Revenue Intelligence - India
- Asmin Koalindo Tuhup - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Australian Coal Association
- New Zealand Coal & Carbon
- Heidelberg Cement - Germany
- Global Coal Blending Company Limited - Australia
- LBH Netherlands Bv - Netherlands
- Bhushan Steel Limited - India
- Coal and Oil Company - UAE
- Price Waterhouse Coopers - Russia
- Meenaskhi Energy Private Limited - India
- McConnell Dowell - Australia
- Merrill Lynch Commodities Europe
- Deloitte Consulting - India
- Global Green Power PLC Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Eastern Coal Council - USA
- Sakthi Sugars Limited - India
- Lanco Infratech Ltd - India
- Global Business Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Pendopo Energi Batubara - Indonesia
- Coalindo Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Iligan Light & Power Inc, Philippines
- Independent Power Producers Association of India
- Bahari Cakrawala Sebuku - Indonesia
- Sarangani Energy Corporation, Philippines
- Uttam Galva Steels Limited - India
- Petron Corporation, Philippines
- Australian Commodity Traders Exchange
- India Bulls Power Limited - India
- PTC India Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Oldendorff Carriers - Singapore
- Essar Steel Hazira Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Planning Commission, India
- Billiton Holdings Pty Ltd - Australia
- Energy Development Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Mjunction Services Limited - India
- Samtan Co., Ltd - South Korea
- Ind-Barath Power Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- TeaM Sual Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Mines - Canada
- Siam City Cement - Thailand
- Leighton Contractors Pty Ltd - Australia
- ASAPP Information Group - India
- Madhucon Powers Ltd - India
- Bulk Trading Sa - Switzerland
- Ministry of Finance - Indonesia
- Edison Trading Spa - Italy
- Dalmia Cement Bharat India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sical Logistics Limited - India
- Tamil Nadu electricity Board
- Metalloyd Limited - United Kingdom
- International Coal Ventures Pvt Ltd - India
- Bhatia International Limited - India
- The Treasury - Australian Government
- Indogreen Group - Indonesia
- Tata Chemicals Ltd - India
- Rio Tinto Coal - Australia
- European Bulk Services B.V. - Netherlands
- Aboitiz Power Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- Grasim Industreis Ltd - India
- Renaissance Capital - South Africa
- Mercator Lines Limited - India
- Posco Energy - South Korea
- Parliament of New Zealand
- Attock Cement Pakistan Limited
- Bayan Resources Tbk. - Indonesia
- Marubeni Corporation - India
- Kepco SPC Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Singapore Mercantile Exchange
- Goldman Sachs - Singapore
- Baramulti Group, Indonesia
- Binh Thuan Hamico - Vietnam
- Bharathi Cement Corporation - India
- Meralco Power Generation, Philippines
- ICICI Bank Limited - India
- Semirara Mining and Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TNB Fuel Sdn Bhd - Malaysia
- Standard Chartered Bank - UAE
- Kumho Petrochemical, South Korea
- IHS Mccloskey Coal Group - USA
- Antam Resourcindo - Indonesia
- Electricity Generating Authority of Thailand
- Kohat Cement Company Ltd. - Pakistan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Interocean Group of Companies - India
- Miang Besar Coal Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Sree Jayajothi Cements Limited - India
- Port Waratah Coal Services - Australia
- Chettinad Cement Corporation Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Vedanta Resources Plc - India
- Timah Investasi Mineral - Indoneisa
- Trasteel International SA, Italy
- Indika Energy - Indonesia
- Sojitz Corporation - Japan
- London Commodity Brokers - England
- Thiess Contractors Indonesia
- Formosa Plastics Group - Taiwan
- Banpu Public Company Limited - Thailand
- Altura Mining Limited, Indonesia
- Central Electricity Authority - India
- Makarim & Taira - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Romanian Commodities Exchange
- Georgia Ports Authority, United States
- Ambuja Cements Ltd - India
- Economic Council, Georgia
- Kartika Selabumi Mining - Indonesia
- GVK Power & Infra Limited - India
- Chamber of Mines of South Africa
- Indonesian Coal Mining Association
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