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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, 25 January 24
THE RED SEA ESCALATION IMPLICATIONS ON GLOBAL SEABORNE TRADE - MARIA BERTZELETOU
In recent days, discussions have intensified about the potential impact on the seaborne trade and ton-miles due to the evolving dynamics of market ...
Thursday, 25 January 24
RED SEA SHIPPING DISRUPTIONS KEEP GEOPOLITICAL PREMIUM FOR COMMODITIES - FITCH RATINGS
Shipping disruptions and re-routing away from the Red Sea will maintain the geopolitical premium in the main commodity markets, including for oil a ...
Friday, 19 January 24
INDONESIA TARGETS 710 MLN METRIC TONS COAL OUTPUT IN 2024 AFTER RECORD 2023 - REUTERS
Indonesia, a major thermal coal exporter, aims to produce 710 million metric tons of coal in 2024, its mining minister said on Monday, after postin ...
Friday, 19 January 24
DRUMMOND COLOMBIA COAL OUTPUT ROSE 7.1% IN 2023 - REUTERS
Coal production from miner Drummond’s Colombia operations rose 7.1% in 2023 to 29.5 million metric tons, while exports declined by 2.6% to 27 ...
Friday, 19 January 24
CHINA'S 2023 COAL OUTPUT HITS RECORD HIGH - REUTERS
China’s coal output reached a record high in 2023, data from the statistics bureau showed on Wednesday, amid an ongoing focus on energy secur ...
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- Coastal Gujarat Power Limited - India
- Karaikal Port Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- European Bulk Services B.V. - Netherlands
- Coal and Oil Company - UAE
- Marubeni Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhatia International Limited - India
- Australian Commodity Traders Exchange
- Gujarat Sidhee Cement - India
- Africa Commodities Group - South Africa
- White Energy Company Limited
- McConnell Dowell - Australia
- South Luzon Thermal Energy Corporation
- Australian Coal Association
- Bukit Makmur.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Therma Luzon, Inc, Philippines
- Thiess Contractors Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- SMG Consultants - Indonesia
- Indian Energy Exchange, India
- Manunggal Multi Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Larsen & Toubro Limited - India
- Directorate Of Revenue Intelligence - India
- CNBM International Corporation - China
- ASAPP Information Group - India
- PNOC Exploration Corporation - Philippines
- Ministry of Transport, Egypt
- Georgia Ports Authority, United States
- Central Electricity Authority - India
- Vizag Seaport Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- VISA Power Limited - India
- TeaM Sual Corporation - Philippines
- Bhushan Steel Limited - India
- Star Paper Mills Limited - India
- Salva Resources Pvt Ltd - India
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- Latin American Coal - Colombia
- Anglo American - United Kingdom
- Borneo Indobara - Indonesia
- Baramulti Group, Indonesia
- Goldman Sachs - Singapore
- Cement Manufacturers Association - India
- Vijayanagar Sugar Pvt Ltd - India
- SMC Global Power, Philippines
- Siam City Cement PLC, Thailand
- Kobexindo Tractors - Indoneisa
- Medco Energi Mining Internasional
- Sical Logistics Limited - India
- Uttam Galva Steels Limited - India
- Eastern Energy - Thailand
- Globalindo Alam Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Thai Mozambique Logistica
- ICICI Bank Limited - India
- The State Trading Corporation of India Ltd
- Kumho Petrochemical, South Korea
- Bulk Trading Sa - Switzerland
- Bayan Resources Tbk. - Indonesia
- IEA Clean Coal Centre - UK
- Energy Development Corp, Philippines
- Tata Chemicals Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Sojitz Corporation - Japan
- Chettinad Cement Corporation Ltd - India
- Planning Commission, India
- Antam Resourcindo - Indonesia
- Malabar Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Orica Mining Services - Indonesia
- The University of Queensland
- Simpson Spence & Young - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Port Waratah Coal Services - Australia
- Toyota Tsusho Corporation, Japan
- LBH Netherlands Bv - Netherlands
- Economic Council, Georgia
- GAC Shipping (India) Pvt Ltd
- Indian Oil Corporation Limited
- Central Java Power - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Finance - Indonesia
- Standard Chartered Bank - UAE
- Intertek Mineral Services - Indonesia
- Meralco Power Generation, Philippines
- Heidelberg Cement - Germany
- Bhoruka Overseas - Indonesia
- Timah Investasi Mineral - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Madhucon Powers Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Minerals Council of Australia
- Barasentosa Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Ambuja Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Independent Power Producers Association of India
- Mercuria Energy - Indonesia
- Energy Link Ltd, New Zealand
- Riau Bara Harum - Indonesia
- Agrawal Coal Company - India
- Price Waterhouse Coopers - Russia
- Xindia Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indo Tambangraya Megah - Indonesia
- Romanian Commodities Exchange
- Videocon Industries ltd - India
- Power Finance Corporation Ltd., India
- Kalimantan Lumbung Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- India Bulls Power Limited - India
- Oldendorff Carriers - Singapore
- Cigading International Bulk Terminal - Indonesia
- Trasteel International SA, Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chamber of Mines of South Africa
- Ministry of Mines - Canada
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PTC India Limited - India
- Aditya Birla Group - India
- Sakthi Sugars Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- PowerSource Philippines DevCo
- IHS Mccloskey Coal Group - USA
- Sarangani Energy Corporation, Philippines
- Semirara Mining Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Semirara Mining and Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Samtan Co., Ltd - South Korea
- Merrill Lynch Commodities Europe
- Straits Asia Resources Limited - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercator Lines Limited - India
- Jaiprakash Power Ventures ltd
- Renaissance Capital - South Africa
- Indika Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- New Zealand Coal & Carbon
- GN Power Mariveles Coal Plant, Philippines
- Sree Jayajothi Cements Limited - India
- Mintek Dendrill Indonesia
- Coalindo Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- Banpu Public Company Limited - Thailand
- Indogreen Group - Indonesia
- Electricity Authority, New Zealand
- OPG Power Generation Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Savvy Resources Ltd - HongKong
- Iligan Light & Power Inc, Philippines
- Lanco Infratech Ltd - India
- Petron Corporation, Philippines
- Interocean Group of Companies - India
- GMR Energy Limited - India
- Jindal Steel & Power Ltd - India
- Wood Mackenzie - Singapore
- Carbofer General Trading SA - India
- Jorong Barutama Greston.PT - Indonesia
- Metalloyd Limited - United Kingdom
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
- MS Steel International - UAE
- Essar Steel Hazira Ltd - India
- CIMB Investment Bank - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The Treasury - Australian Government
- GVK Power & Infra Limited - India
- Electricity Generating Authority of Thailand
- Formosa Plastics Group - Taiwan
- Tamil Nadu electricity Board
- Ind-Barath Power Infra Limited - India
- Eastern Coal Council - USA
- Vedanta Resources Plc - India
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- Asmin Koalindo Tuhup - Indonesia
- Makarim & Taira - Indonesia
- Kideco Jaya Agung - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Kapuas Tunggal Persada - Indonesia
- Bharathi Cement Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Edison Trading Spa - Italy
- Orica Australia Pty. Ltd.
- Aboitiz Power Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Singapore Mercantile Exchange
- Attock Cement Pakistan Limited
- Petrochimia International Co. Ltd.- Taiwan
- London Commodity Brokers - England
- Billiton Holdings Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Global Business Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Indonesian Coal Mining Association
- SN Aboitiz Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Parliament of New Zealand
- Deloitte Consulting - India
- Siam City Cement - Thailand
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