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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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Wednesday, 31 January 24
CHINA'S INNER MONGOLIA COAL OUTPUT HIT 1.21B TONS IN 2023 - XINHUA
North China’s Inner Mongolia autonomous region churned out 1.21 billion tons of coal in 2023 as it strives to guarantee the country’s e ...
Wednesday, 31 January 24
GAS EXPORTS COST U.S. CONSUMERS MORE THAN $100 BILLION OVER 16-MONTH PERIOD - IEEFA
Limited Demand Growth Could Dampen the Dry Bulk Market in the Coming Months BIMCOStarting in late 2021—before its invasion of Ukraine—R ...
Tuesday, 30 January 24
LIMITED DEMAND GROWTH COULD DAMPEN THE DRY BULK MARKET IN THE COMING MONTHS - BIMCO
Demand
In our base scenario, we expect cargo demand to grow by 0-1% in 2024 and 0.5-1.5% in 2025. This is a 0.5 percentage point reduction for ...
Friday, 26 January 24
RED SEA DIVERSIONS ADD NEARLY A MILLION DOLLARS PER VOYAGE TO SHIPPING COSTS WHILE DOUBLING TRANSIT TIME - LSEG
The incremental costs of diverting a tanker from Asia to NW Europe via the Cape of Good Hope is accounting for an extra $932,905 USD per voyage whi ...
Friday, 26 January 24
HARD COAL GUARDIAN ANGEL OF THE ENERGY SUPPLY - GERMANY COAL IMPORTERS ASSOCIATION
- No security of supply without hard coal
- The Substitute Power Plant Provision Act (EKBG) must be extended
- Higher grid fees due to the ...
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- Sree Jayajothi Cements Limited - India
- Coal and Oil Company - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Miang Besar Coal Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- Indogreen Group - Indonesia
- Timah Investasi Mineral - Indoneisa
- Madhucon Powers Ltd - India
- Jindal Steel & Power Ltd - India
- PNOC Exploration Corporation - Philippines
- Mintek Dendrill Indonesia
- Aditya Birla Group - India
- Kepco SPC Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Electricity Authority, New Zealand
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- Latin American Coal - Colombia
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- Leighton Contractors Pty Ltd - Australia
- Parliament of New Zealand
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- India Bulls Power Limited - India
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- Africa Commodities Group - South Africa
- Binh Thuan Hamico - Vietnam
- The University of Queensland
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- Indika Energy - Indonesia
- Planning Commission, India
- Essar Steel Hazira Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Finance - Indonesia
- Barasentosa Lestari - Indonesia
- Mercuria Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Petron Corporation, Philippines
- Economic Council, Georgia
- Ministry of Transport, Egypt
- SMC Global Power, Philippines
- Marubeni Corporation - India
- McConnell Dowell - Australia
- Minerals Council of Australia
- Mercator Lines Limited - India
- IHS Mccloskey Coal Group - USA
- Holcim Trading Pte Ltd - Singapore
- Sarangani Energy Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- Georgia Ports Authority, United States
- International Coal Ventures Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Tata Chemicals Ltd - India
- Salva Resources Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Uttam Galva Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sojitz Corporation - Japan
- Siam City Cement - Thailand
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- Global Business Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Alfred C Toepfer International GmbH - Germany
- Tamil Nadu electricity Board
- OPG Power Generation Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rio Tinto Coal - Australia
- PetroVietnam Power Coal Import and Supply Company
- Indonesian Coal Mining Association
- White Energy Company Limited
- Globalindo Alam Lestari - Indonesia
- Bhushan Steel Limited - India
- Baramulti Group, Indonesia
- Energy Link Ltd, New Zealand
- Kapuas Tunggal Persada - Indonesia
- Meenaskhi Energy Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Larsen & Toubro Limited - India
- Savvy Resources Ltd - HongKong
- New Zealand Coal & Carbon
- Vedanta Resources Plc - India
- Agrawal Coal Company - India
- GVK Power & Infra Limited - India
- Price Waterhouse Coopers - Russia
- Riau Bara Harum - Indonesia
- Maheswari Brothers Coal Limited - India
- Billiton Holdings Pty Ltd - Australia
- Central Electricity Authority - India
- Pendopo Energi Batubara - Indonesia
- Star Paper Mills Limited - India
- SN Aboitiz Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Orica Australia Pty. Ltd.
- ICICI Bank Limited - India
- Ambuja Cements Ltd - India
- VISA Power Limited - India
- Straits Asia Resources Limited - Singapore
- Carbofer General Trading SA - India
- Wilmar Investment Holdings
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- Vizag Seaport Private Limited - India
- PTC India Limited - India
- TeaM Sual Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Bhoruka Overseas - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMG Consultants - Indonesia
- Eastern Coal Council - USA
- Goldman Sachs - Singapore
- Gujarat Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Sakthi Sugars Limited - India
- Formosa Plastics Group - Taiwan
- Directorate Of Revenue Intelligence - India
- Altura Mining Limited, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Malabar Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Kaltim Prima Coal - Indonesia
- CNBM International Corporation - China
- Neyveli Lignite Corporation Ltd, - India
- London Commodity Brokers - England
- Chettinad Cement Corporation Ltd - India
- Indian Energy Exchange, India
- Wood Mackenzie - Singapore
- Gujarat Sidhee Cement - India
- Singapore Mercantile Exchange
- LBH Netherlands Bv - Netherlands
- Electricity Generating Authority of Thailand
- Medco Energi Mining Internasional
- Mjunction Services Limited - India
- Borneo Indobara - Indonesia
- Indian Oil Corporation Limited
- Therma Luzon, Inc, Philippines
- Australian Coal Association
- Bharathi Cement Corporation - India
- Sinarmas Energy and Mining - Indonesia
- Attock Cement Pakistan Limited
- Ministry of Mines - Canada
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Chamber of Mines of South Africa
- Parry Sugars Refinery, India
- Bhatia International Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- Samtan Co., Ltd - South Korea
- GMR Energy Limited - India
- Commonwealth Bank - Australia
- Kohat Cement Company Ltd. - Pakistan
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
- Energy Development Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Karbindo Abesyapradhi - Indoneisa
- Simpson Spence & Young - Indonesia
- South Luzon Thermal Energy Corporation
- Heidelberg Cement - Germany
- Manunggal Multi Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Trasteel International SA, Italy
- Asmin Koalindo Tuhup - Indonesia
- Metalloyd Limited - United Kingdom
- Kartika Selabumi Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- The Treasury - Australian Government
- Global Coal Blending Company Limited - Australia
- Cement Manufacturers Association - India
- Renaissance Capital - South Africa
- Kobexindo Tractors - Indoneisa
- Romanian Commodities Exchange
- Antam Resourcindo - Indonesia
- IEA Clean Coal Centre - UK
- Bukit Makmur.PT - Indonesia
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
- MS Steel International - UAE
- Coalindo Energy - Indonesia
- Power Finance Corporation Ltd., India
- Bayan Resources Tbk. - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Coastal Gujarat Power Limited - India
- Orica Mining Services - Indonesia
- Videocon Industries ltd - India
- Eastern Energy - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Australian Commodity Traders Exchange
- Indo Tambangraya Megah - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Grasim Industreis Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Deloitte Consulting - India
- Posco Energy - South Korea
- Makarim & Taira - Indonesia
- Semirara Mining Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Karaikal Port Pvt Ltd - India
- Bangladesh Power Developement Board
- Xindia Steels Limited - India
- Banpu Public Company Limited - Thailand
- Intertek Mineral Services - Indonesia
- Central Java Power - Indonesia
- Independent Power Producers Association of India
- Thiess Contractors Indonesia
- European Bulk Services B.V. - Netherlands
- Thai Mozambique Logistica
- ASAPP Information Group - India
- Edison Trading Spa - Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Lanco Infratech Ltd - India
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