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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, 01 January 12
IS INDIA FOLLOWING INDONESIA TO STANDARDIZE COAL PRICES TO GET MAXIMUM BENEFITS?
COALspot.com - Coal India limited, an Indian state owned and world largest coal producer has introduced gross calorific value (GCV) based pricing me ...
Saturday, 31 December 11
GLOBALCOAL NEWC INDEX SURGED 2.32 PERCENT
COALspot.com - globalCOAL index in Newcastle Port, benchmark for Asian market, ended substantially higher, surged 2.32 percent to US$115.47 per ...
Saturday, 31 December 11
BORNEO LUMBUNG TO BUY BUMI STAKE, SWAP CEO - THE JAKARTA GLOBE
The Jakarta Globe, one of the leading english news paper in Indonesia reported yesterday, shareholders of Indonesian coking coal miner Borneo Lumbun ...
Friday, 30 December 11
CENTRAL GOVERNMENT SHOULD ISSUE PERMITS - THE JAKARTA POST
The Jakarta Post reported that, business associations from both the palm oil and mining sectors have suggested that the central government should re ...
Thursday, 29 December 11
NEW VESSELS DELIVERED ARE FLOODING THE OCEANS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
As expected 2011 has been the year that newbuilding deliveries peaked and kept "flooding" the market, thus supressing freight rates and er ...
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- Australian Commodity Traders Exchange
- Timah Investasi Mineral - Indoneisa
- Uttam Galva Steels Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Iligan Light & Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- Formosa Plastics Group - Taiwan
- Pendopo Energi Batubara - Indonesia
- CNBM International Corporation - China
- Eastern Energy - Thailand
- Larsen & Toubro Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indogreen Group - Indonesia
- Tata Chemicals Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Georgia Ports Authority, United States
- Wood Mackenzie - Singapore
- Sinarmas Energy and Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Xindia Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Global Business Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Coalindo Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Anglo American - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Thai Mozambique Logistica
- Africa Commodities Group - South Africa
- GVK Power & Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- Pipit Mutiara Jaya. PT, Indonesia
- Borneo Indobara - Indonesia
- Vedanta Resources Plc - India
- Central Java Power - Indonesia
- India Bulls Power Limited - India
- Sakthi Sugars Limited - India
- Trasteel International SA, Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- Marubeni Corporation - India
- Australian Coal Association
- Baramulti Group, Indonesia
- Rio Tinto Coal - Australia
- Therma Luzon, Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Banpu Public Company Limited - Thailand
- Alfred C Toepfer International GmbH - Germany
- OPG Power Generation Pvt Ltd - India
- ASAPP Information Group - India
- Meenaskhi Energy Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- The University of Queensland
- Malabar Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Standard Chartered Bank - UAE
- Latin American Coal - Colombia
- Kohat Cement Company Ltd. - Pakistan
- Bharathi Cement Corporation - India
- Coastal Gujarat Power Limited - India
- GMR Energy Limited - India
- IEA Clean Coal Centre - UK
- LBH Netherlands Bv - Netherlands
- Jindal Steel & Power Ltd - India
- Star Paper Mills Limited - India
- McConnell Dowell - Australia
- Toyota Tsusho Corporation, Japan
- Petron Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Siam City Cement - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Deloitte Consulting - India
- Lanco Infratech Ltd - India
- Bulk Trading Sa - Switzerland
- Sojitz Corporation - Japan
- Riau Bara Harum - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Edison Trading Spa - Italy
- Mjunction Services Limited - India
- Energy Link Ltd, New Zealand
- Antam Resourcindo - Indonesia
- Coal and Oil Company - UAE
- Indika Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Carbofer General Trading SA - India
- Medco Energi Mining Internasional
- Directorate General of MIneral and Coal - Indonesia
- Thiess Contractors Indonesia
- Gujarat Sidhee Cement - India
- Sree Jayajothi Cements Limited - India
- Heidelberg Cement - Germany
- GN Power Mariveles Coal Plant, Philippines
- Electricity Generating Authority of Thailand
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- Ceylon Electricity Board - Sri Lanka
- European Bulk Services B.V. - Netherlands
- Agrawal Coal Company - India
- ICICI Bank Limited - India
- Bayan Resources Tbk. - Indonesia
- Sarangani Energy Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Power Finance Corporation Ltd., India
- Jorong Barutama Greston.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- The Treasury - Australian Government
- Aboitiz Power Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Mining Services - Indonesia
- SMG Consultants - Indonesia
- New Zealand Coal & Carbon
- Posco Energy - South Korea
- Tamil Nadu electricity Board
- Holcim Trading Pte Ltd - Singapore
- Romanian Commodities Exchange
- Singapore Mercantile Exchange
- Grasim Industreis Ltd - India
- Semirara Mining Corp, Philippines
- Port Waratah Coal Services - Australia
- Ind-Barath Power Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
- Indian Oil Corporation Limited
- Independent Power Producers Association of India
- GAC Shipping (India) Pvt Ltd
- Goldman Sachs - Singapore
- Kobexindo Tractors - Indoneisa
- Barasentosa Lestari - Indonesia
- Mercator Lines Limited - India
- Metalloyd Limited - United Kingdom
- Karaikal Port Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Wilmar Investment Holdings
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- VISA Power Limited - India
- Mintek Dendrill Indonesia
- International Coal Ventures Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Jaiprakash Power Ventures ltd
- PTC India Limited - India
- Merrill Lynch Commodities Europe
- Price Waterhouse Coopers - Russia
- Bhoruka Overseas - Indonesia
- Planning Commission, India
- Bhushan Steel Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- AsiaOL BioFuels Corp., Philippines
- The State Trading Corporation of India Ltd
- Attock Cement Pakistan Limited
- Ministry of Transport, Egypt
- TeaM Sual Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bangladesh Power Developement Board
- Indonesian Coal Mining Association
- PowerSource Philippines DevCo
- Minerals Council of Australia
- Electricity Authority, New Zealand
- Binh Thuan Hamico - Vietnam
- Essar Steel Hazira Ltd - India
- Commonwealth Bank - Australia
- PNOC Exploration Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Energy Development Corp, Philippines
- Oldendorff Carriers - Singapore
- Kepco SPC Power Corporation, Philippines
- Dalmia Cement Bharat India
- Orica Australia Pty. Ltd.
- Cement Manufacturers Association - India
- TNB Fuel Sdn Bhd - Malaysia
- Meralco Power Generation, Philippines
- Chamber of Mines of South Africa
- Samtan Co., Ltd - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Videocon Industries ltd - India
- Maheswari Brothers Coal Limited - India
- Kumho Petrochemical, South Korea
- Rashtriya Ispat Nigam Limited - India
- Vizag Seaport Private Limited - India
- Kideco Jaya Agung - Indonesia
- Chettinad Cement Corporation Ltd - India
- Economic Council, Georgia
- Straits Asia Resources Limited - Singapore
- Parliament of New Zealand
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
- Renaissance Capital - South Africa
- Mercuria Energy - Indonesia
- Central Electricity Authority - India
- Maharashtra Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- Kaltim Prima Coal - Indonesia
- Bhatia International Limited - India
- Ambuja Cements Ltd - India
- White Energy Company Limited
- Interocean Group of Companies - India
- MS Steel International - UAE
- Kartika Selabumi Mining - Indonesia
- Savvy Resources Ltd - HongKong
- Madhucon Powers Ltd - India
- Makarim & Taira - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Eastern Coal Council - USA
- London Commodity Brokers - England
- Ministry of Finance - Indonesia
- Sindya Power Generating Company Private Ltd
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