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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, 19 January 12
14TH VOGP MEETING IN HO CHI MINH CITY HANDS OUT LATEST UPDATES AND DEVELOPMENTS IN VIETNAM'S ENERGY INDUSTRY
Press Release: At upcoming 14th Vietnam Oil Gas Power on 27-28 Feb in Ho Chi Minh City the industry’s most influential names including Petrovi ...
Thursday, 19 January 12
DELTA DUNIA SEALS US$820 MIO CONTRACT INSIDER STORIES
Insider Stories reported that, PT Delta Dunia Makmur Tbk (DOID) has announced that its primary operating subsidiary, PT Bukit Makmur Mandiri Utama ( ...
Wednesday, 18 January 12
WARM WINTER ACROSS EUROPE HAS IMPACTED NEGATIVELY COAL DEMAND - BRS
With the Chinese New Year just a week away, all markets are slowing down. The drop in freight rates for all sizes has been significant over the past ...
Wednesday, 18 January 12
DRY BULK MARKET'S DRAMA CONTINUES IN START OF NEW WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A flurry of newbuilding deliveries, coupled with a slow start to the new year, a typical trend for the dry bulk market, has led the industry's benc ...
Monday, 16 January 12
BUMA MINED 2.7 MILLION TONS COAL LAST MONTH
COALspot.com - BUMA has mined 2.7 million tons (-14.1% YoY) coal last month and removed 25.8 million bcm (-5.6% YoY) overburden, according to compan ...
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- Indo Tambangraya Megah - Indonesia
- Maheswari Brothers Coal Limited - India
- New Zealand Coal & Carbon
- Edison Trading Spa - Italy
- Georgia Ports Authority, United States
- Directorate Of Revenue Intelligence - India
- Marubeni Corporation - India
- Bhoruka Overseas - Indonesia
- LBH Netherlands Bv - Netherlands
- White Energy Company Limited
- Ministry of Finance - Indonesia
- Aditya Birla Group - India
- Bulk Trading Sa - Switzerland
- Deloitte Consulting - India
- VISA Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sinarmas Energy and Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Orica Mining Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Central Electricity Authority - India
- Bharathi Cement Corporation - India
- Posco Energy - South Korea
- Rio Tinto Coal - Australia
- McConnell Dowell - Australia
- Bukit Makmur.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Kobexindo Tractors - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Lanco Infratech Ltd - India
- MS Steel International - UAE
- Tata Chemicals Ltd - India
- Kideco Jaya Agung - Indonesia
- Petron Corporation, Philippines
- ICICI Bank Limited - India
- South Luzon Thermal Energy Corporation
- SMG Consultants - Indonesia
- Metalloyd Limited - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Australian Commodity Traders Exchange
- Essar Steel Hazira Ltd - India
- Dalmia Cement Bharat India
- Port Waratah Coal Services - Australia
- Central Java Power - Indonesia
- The Treasury - Australian Government
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Authority, New Zealand
- Attock Cement Pakistan Limited
- Holcim Trading Pte Ltd - Singapore
- Indian Oil Corporation Limited
- PetroVietnam Power Coal Import and Supply Company
- Coal and Oil Company - UAE
- Orica Australia Pty. Ltd.
- Merrill Lynch Commodities Europe
- Sree Jayajothi Cements Limited - India
- Mercator Lines Limited - India
- Bangladesh Power Developement Board
- Standard Chartered Bank - UAE
- Larsen & Toubro Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- European Bulk Services B.V. - Netherlands
- Intertek Mineral Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- PNOC Exploration Corporation - Philippines
- Parry Sugars Refinery, India
- Formosa Plastics Group - Taiwan
- Directorate General of MIneral and Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- The State Trading Corporation of India Ltd
- Riau Bara Harum - Indonesia
- Eastern Coal Council - USA
- Star Paper Mills Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Africa Commodities Group - South Africa
- Jindal Steel & Power Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Cement Manufacturers Association - India
- Sojitz Corporation - Japan
- Chamber of Mines of South Africa
- Xindia Steels Limited - India
- Heidelberg Cement - Germany
- Leighton Contractors Pty Ltd - Australia
- Borneo Indobara - Indonesia
- Oldendorff Carriers - Singapore
- Electricity Generating Authority of Thailand
- Australian Coal Association
- Neyveli Lignite Corporation Ltd, - India
- The University of Queensland
- Power Finance Corporation Ltd., India
- Madhucon Powers Ltd - India
- Samtan Co., Ltd - South Korea
- SMC Global Power, Philippines
- Grasim Industreis Ltd - India
- Global Business Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- ASAPP Information Group - India
- Iligan Light & Power Inc, Philippines
- Bhatia International Limited - India
- Indian Energy Exchange, India
- Videocon Industries ltd - India
- Miang Besar Coal Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Karaikal Port Pvt Ltd - India
- Trasteel International SA, Italy
- Uttam Galva Steels Limited - India
- Baramulti Group, Indonesia
- Altura Mining Limited, Indonesia
- Kaltim Prima Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- India Bulls Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Commonwealth Bank - Australia
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- Energy Development Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- GMR Energy Limited - India
- Agrawal Coal Company - India
- Semirara Mining Corp, Philippines
- Indika Energy - Indonesia
- Meralco Power Generation, Philippines
- Wood Mackenzie - Singapore
- Eastern Energy - Thailand
- Mercuria Energy - Indonesia
- Carbofer General Trading SA - India
- Kepco SPC Power Corporation, Philippines
- Wilmar Investment Holdings
- Energy Link Ltd, New Zealand
- Coalindo Energy - Indonesia
- Siam City Cement PLC, Thailand
- Sical Logistics Limited - India
- Romanian Commodities Exchange
- Jaiprakash Power Ventures ltd
- Malabar Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Minerals Council of Australia
- IHS Mccloskey Coal Group - USA
- AsiaOL BioFuels Corp., Philippines
- Manunggal Multi Energi - Indonesia
- Latin American Coal - Colombia
- Thai Mozambique Logistica
- Singapore Mercantile Exchange
- London Commodity Brokers - England
- Rashtriya Ispat Nigam Limited - India
- Globalindo Alam Lestari - Indonesia
- Barasentosa Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Kumho Petrochemical, South Korea
- Interocean Group of Companies - India
- Makarim & Taira - Indonesia
- CNBM International Corporation - China
- Bayan Resources Tbk. - Indonesia
- Sindya Power Generating Company Private Ltd
- Independent Power Producers Association of India
- CIMB Investment Bank - Malaysia
- Ministry of Mines - Canada
- San Jose City I Power Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- PowerSource Philippines DevCo
- Salva Resources Pvt Ltd - India
- Economic Council, Georgia
- Pipit Mutiara Jaya. PT, Indonesia
- Planning Commission, India
- Vedanta Resources Plc - India
- Coastal Gujarat Power Limited - India
- Bhushan Steel Limited - India
- Ambuja Cements Ltd - India
- Siam City Cement - Thailand
- Billiton Holdings Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- Sakthi Sugars Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mintek Dendrill Indonesia
- GVK Power & Infra Limited - India
- Savvy Resources Ltd - HongKong
- Vizag Seaport Private Limited - India
- Renaissance Capital - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sarangani Energy Corporation, Philippines
- Tamil Nadu electricity Board
- Straits Asia Resources Limited - Singapore
- Indogreen Group - Indonesia
- Timah Investasi Mineral - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- IEA Clean Coal Centre - UK
- TeaM Sual Corporation - Philippines
- Indonesian Coal Mining Association
- Toyota Tsusho Corporation, Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Goldman Sachs - Singapore
- Banpu Public Company Limited - Thailand
- Medco Energi Mining Internasional
- PTC India Limited - India
- Krishnapatnam Port Company Ltd. - India
- Gujarat Sidhee Cement - India
- Anglo American - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- Kartika Selabumi Mining - Indonesia
- Parliament of New Zealand
- Thiess Contractors Indonesia
- Global Green Power PLC Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Antam Resourcindo - Indonesia
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