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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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Saturday, 07 January 12
COAL MARKETS SEE FALLING SPOT PRICES
COALspot.com – World’s thermal coal spot prices have slipped this week..
globalCOAL index in Newcastle Port, benchmark for Asian mark ...
Friday, 06 January 12
COAL INDIA LINKED COAL PRICES WITH INTERNATIONAL COAL PRICES
COALspot.com - Consumers of indigenous coal in India to pay International prices in the future. Coal India has recently moved from UHV pricing mecha ...
Friday, 06 January 12
CLARIDEN GLOBAL BRINGS YOU INDONESIA MINING 2012
Capitalizing Business & Investment Opportunities in an Uncertain Market.Press Release - Clariden Global brings you Indonesia Mining 2012, the dedi ...
Friday, 06 January 12
THE PANAMAX MARKET EXPERIENCED A SLOW START TO 2012 - FEARNLEYS AS
Handy
As usual after a holiday owners and charterers both try to get a feel of the market. An Armada of Supras were talking to ballast towards USG, ...
Thursday, 05 January 12
DRY BULK MARKET TAKES A PLUNGE OF LOW ACTIVITY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
As was widely expected the first days of the new year are characterized by significantly low chartering across the board of the dry bulk market, pus ...
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- Tamil Nadu electricity Board
- India Bulls Power Limited - India
- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- Parliament of New Zealand
- Bhoruka Overseas - Indonesia
- Energy Development Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Simpson Spence & Young - Indonesia
- Port Waratah Coal Services - Australia
- CNBM International Corporation - China
- Jorong Barutama Greston.PT - Indonesia
- Bulk Trading Sa - Switzerland
- Holcim Trading Pte Ltd - Singapore
- Bukit Makmur.PT - Indonesia
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- Chamber of Mines of South Africa
- Mercator Lines Limited - India
- Commonwealth Bank - Australia
- Sojitz Corporation - Japan
- Essar Steel Hazira Ltd - India
- Africa Commodities Group - South Africa
- Ministry of Finance - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- OPG Power Generation Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Videocon Industries ltd - India
- SMC Global Power, Philippines
- The State Trading Corporation of India Ltd
- Kapuas Tunggal Persada - Indonesia
- San Jose City I Power Corp, Philippines
- Standard Chartered Bank - UAE
- Straits Asia Resources Limited - Singapore
- Kumho Petrochemical, South Korea
- Jaiprakash Power Ventures ltd
- Edison Trading Spa - Italy
- Ministry of Transport, Egypt
- Malabar Cements Ltd - India
- Jindal Steel & Power Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Samtan Co., Ltd - South Korea
- Central Electricity Authority - India
- Sarangani Energy Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- McConnell Dowell - Australia
- PowerSource Philippines DevCo
- Medco Energi Mining Internasional
- Bharathi Cement Corporation - India
- Minerals Council of Australia
- Riau Bara Harum - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- Orica Mining Services - Indonesia
- Attock Cement Pakistan Limited
- AsiaOL BioFuels Corp., Philippines
- Mjunction Services Limited - India
- Interocean Group of Companies - India
- Thiess Contractors Indonesia
- Salva Resources Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Lanco Infratech Ltd - India
- Oldendorff Carriers - Singapore
- Indo Tambangraya Megah - Indonesia
- Star Paper Mills Limited - India
- Barasentosa Lestari - Indonesia
- Planning Commission, India
- Bangladesh Power Developement Board
- Coalindo Energy - Indonesia
- Wood Mackenzie - Singapore
- Ministry of Mines - Canada
- Antam Resourcindo - Indonesia
- Pendopo Energi Batubara - Indonesia
- Australian Commodity Traders Exchange
- Directorate Of Revenue Intelligence - India
- Price Waterhouse Coopers - Russia
- Deloitte Consulting - India
- Vizag Seaport Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Eastern Energy - Thailand
- South Luzon Thermal Energy Corporation
- Carbofer General Trading SA - India
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- International Coal Ventures Pvt Ltd - India
- White Energy Company Limited
- Kohat Cement Company Ltd. - Pakistan
- Maheswari Brothers Coal Limited - India
- London Commodity Brokers - England
- Global Green Power PLC Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Gujarat Sidhee Cement - India
- SMG Consultants - Indonesia
- Kaltim Prima Coal - Indonesia
- Romanian Commodities Exchange
- Goldman Sachs - Singapore
- Sakthi Sugars Limited - India
- Electricity Generating Authority of Thailand
- Larsen & Toubro Limited - India
- Singapore Mercantile Exchange
- Makarim & Taira - Indonesia
- Meenaskhi Energy Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- Indika Energy - Indonesia
- Uttam Galva Steels Limited - India
- Bhatia International Limited - India
- LBH Netherlands Bv - Netherlands
- ASAPP Information Group - India
- SN Aboitiz Power Inc, Philippines
- Dalmia Cement Bharat India
- Metalloyd Limited - United Kingdom
- Ambuja Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Bhushan Steel Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- Savvy Resources Ltd - HongKong
- Billiton Holdings Pty Ltd - Australia
- Sical Logistics Limited - India
- Global Coal Blending Company Limited - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thai Mozambique Logistica
- PNOC Exploration Corporation - Philippines
- Tata Chemicals Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Intertek Mineral Services - Indonesia
- Aditya Birla Group - India
- Global Business Power Corporation, Philippines
- PTC India Limited - India
- IHS Mccloskey Coal Group - USA
- Manunggal Multi Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Xindia Steels Limited - India
- New Zealand Coal & Carbon
- Orica Australia Pty. Ltd.
- Baramulti Group, Indonesia
- Kepco SPC Power Corporation, Philippines
- MS Steel International - UAE
- Indonesian Coal Mining Association
- Toyota Tsusho Corporation, Japan
- Grasim Industreis Ltd - India
- The Treasury - Australian Government
- Kideco Jaya Agung - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Therma Luzon, Inc, Philippines
- Renaissance Capital - South Africa
- Heidelberg Cement - Germany
- GAC Shipping (India) Pvt Ltd
- Independent Power Producers Association of India
- VISA Power Limited - India
- Indian Oil Corporation Limited
- Trasteel International SA, Italy
- Iligan Light & Power Inc, Philippines
- Wilmar Investment Holdings
- TeaM Sual Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mintek Dendrill Indonesia
- Semirara Mining Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- Borneo Indobara - Indonesia
- Madhucon Powers Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Petron Corporation, Philippines
- ICICI Bank Limited - India
- IEA Clean Coal Centre - UK
- Rio Tinto Coal - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maharashtra Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- Krishnapatnam Port Company Ltd. - India
- GMR Energy Limited - India
- Altura Mining Limited, Indonesia
- Banpu Public Company Limited - Thailand
- Australian Coal Association
- Cement Manufacturers Association - India
- Mercuria Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- Marubeni Corporation - India
- Central Java Power - Indonesia
- Power Finance Corporation Ltd., India
- Posco Energy - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Latin American Coal - Colombia
- Bukit Asam (Persero) Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Eastern Coal Council - USA
- GVK Power & Infra Limited - India
- Formosa Plastics Group - Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Meralco Power Generation, Philippines
- Vedanta Resources Plc - India
- Ceylon Electricity Board - Sri Lanka
- Bayan Resources Tbk. - Indonesia
- The University of Queensland
- Binh Thuan Hamico - Vietnam
- Electricity Authority, New Zealand
- Parry Sugars Refinery, India
- Timah Investasi Mineral - Indoneisa
- Aboitiz Power Corporation - Philippines
- Economic Council, Georgia
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement - Thailand
- Bukit Baiduri Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- TNB Fuel Sdn Bhd - Malaysia
- European Bulk Services B.V. - Netherlands
- Indogreen Group - Indonesia
- Georgia Ports Authority, United States
- Cigading International Bulk Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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