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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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Monday, 08 January 24
KOSPO TO BUY 80000 MT OF INDONESIAN LOW CALORIFIC VALUE COAL FOR FEB 2024
Korea Southern Power Co., Ltd. (KOSPO), is inviting bids for the supply of Indonesian Low Calorific Value Coal from qualified suppliers for Korean ...
Monday, 08 January 24
SEABORNE TRADE REACHES 12.4BN TONNES - CLARKSONS
China will establish a back-up coal production system by 2027 to stabilise prices and secure coal supply, the state planner said on Wednesday, even ...
Monday, 08 January 24
CAPESIZES START THE NEW YEAR ON POSITIVE NOTE - BALTIC EXCHANGE
Capesize
This week the capsize market has been marked by a mix of activities and challenges. Despite a slow start following the Christmas and N ...
Friday, 05 January 24
MORGAN STANLEY SEES LOWER OIL PRICES IN 2024 ON OVERSUPPLY CONCERNS - REUTERS
Morgan Stanley sees Brent crude prices anchored near $80 per barrel in the first half in 2024 before declining towards the end of the year as it ex ...
Friday, 05 January 24
INDIA'S COAL OUTPUT RISES NEARLY 11 PC IN DEC TO 92.87 MT - PTI
India’s coal production increased by 10.75 per cent to 92.87 million tonne in December 2023 as compared to the year-ago period, an official s ...
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- Global Coal Blending Company Limited - Australia
- Directorate General of MIneral and Coal - Indonesia
- Heidelberg Cement - Germany
- Altura Mining Limited, Indonesia
- Star Paper Mills Limited - India
- ICICI Bank Limited - India
- Edison Trading Spa - Italy
- Siam City Cement PLC, Thailand
- GN Power Mariveles Coal Plant, Philippines
- Agrawal Coal Company - India
- Sarangani Energy Corporation, Philippines
- SMC Global Power, Philippines
- Mercuria Energy - Indonesia
- Marubeni Corporation - India
- Energy Link Ltd, New Zealand
- Billiton Holdings Pty Ltd - Australia
- Chamber of Mines of South Africa
- Vizag Seaport Private Limited - India
- Toyota Tsusho Corporation, Japan
- Jaiprakash Power Ventures ltd
- Sakthi Sugars Limited - India
- Bangladesh Power Developement Board
- Indonesian Coal Mining Association
- Port Waratah Coal Services - Australia
- Intertek Mineral Services - Indonesia
- The State Trading Corporation of India Ltd
- Central Electricity Authority - India
- Leighton Contractors Pty Ltd - Australia
- Commonwealth Bank - Australia
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Power Finance Corporation Ltd., India
- TeaM Sual Corporation - Philippines
- Grasim Industreis Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Price Waterhouse Coopers - Russia
- Global Business Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Green Power PLC Corporation, Philippines
- Anglo American - United Kingdom
- Aboitiz Power Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Cement Manufacturers Association - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sinarmas Energy and Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Maharashtra Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Trasteel International SA, Italy
- Wilmar Investment Holdings
- Thiess Contractors Indonesia
- GVK Power & Infra Limited - India
- Indika Energy - Indonesia
- The University of Queensland
- Meenaskhi Energy Private Limited - India
- Bhushan Steel Limited - India
- Singapore Mercantile Exchange
- Semirara Mining and Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- ASAPP Information Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Authority, New Zealand
- Ministry of Transport, Egypt
- Georgia Ports Authority, United States
- Aditya Birla Group - India
- Merrill Lynch Commodities Europe
- Miang Besar Coal Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- Mintek Dendrill Indonesia
- Meralco Power Generation, Philippines
- Carbofer General Trading SA - India
- Chettinad Cement Corporation Ltd - India
- Malabar Cements Ltd - India
- Renaissance Capital - South Africa
- Vedanta Resources Plc - India
- Jindal Steel & Power Ltd - India
- Tata Chemicals Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Holcim Trading Pte Ltd - Singapore
- Larsen & Toubro Limited - India
- GMR Energy Limited - India
- Kepco SPC Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Indian Oil Corporation Limited
- Economic Council, Georgia
- Semirara Mining Corp, Philippines
- Xindia Steels Limited - India
- Rio Tinto Coal - Australia
- Lanco Infratech Ltd - India
- Sree Jayajothi Cements Limited - India
- Latin American Coal - Colombia
- Goldman Sachs - Singapore
- Indogreen Group - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Generating Authority of Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Dalmia Cement Bharat India
- Cigading International Bulk Terminal - Indonesia
- White Energy Company Limited
- Borneo Indobara - Indonesia
- Thai Mozambique Logistica
- PowerSource Philippines DevCo
- Directorate Of Revenue Intelligence - India
- Indian Energy Exchange, India
- Krishnapatnam Port Company Ltd. - India
- MS Steel International - UAE
- Bukit Baiduri Energy - Indonesia
- IEA Clean Coal Centre - UK
- TNB Fuel Sdn Bhd - Malaysia
- GAC Shipping (India) Pvt Ltd
- Medco Energi Mining Internasional
- Sical Logistics Limited - India
- PTC India Limited - India
- Kideco Jaya Agung - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Mjunction Services Limited - India
- Kumho Petrochemical, South Korea
- Ministry of Finance - Indonesia
- Ministry of Mines - Canada
- Wood Mackenzie - Singapore
- Indo Tambangraya Megah - Indonesia
- Essar Steel Hazira Ltd - India
- CNBM International Corporation - China
- Samtan Co., Ltd - South Korea
- Bhatia International Limited - India
- Bulk Trading Sa - Switzerland
- Madhucon Powers Ltd - India
- Savvy Resources Ltd - HongKong
- Gujarat Sidhee Cement - India
- Videocon Industries ltd - India
- Bukit Makmur.PT - Indonesia
- Bhoruka Overseas - Indonesia
- Kaltim Prima Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Eastern Energy - Thailand
- Salva Resources Pvt Ltd - India
- The Treasury - Australian Government
- SN Aboitiz Power Inc, Philippines
- Romanian Commodities Exchange
- LBH Netherlands Bv - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tamil Nadu electricity Board
- Parliament of New Zealand
- Sindya Power Generating Company Private Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Barasentosa Lestari - Indonesia
- Eastern Coal Council - USA
- Kohat Cement Company Ltd. - Pakistan
- Formosa Plastics Group - Taiwan
- Kartika Selabumi Mining - Indonesia
- Central Java Power - Indonesia
- Mercator Lines Limited - India
- Bharathi Cement Corporation - India
- IHS Mccloskey Coal Group - USA
- India Bulls Power Limited - India
- Siam City Cement - Thailand
- Coastal Gujarat Power Limited - India
- Baramulti Group, Indonesia
- Standard Chartered Bank - UAE
- Uttam Galva Steels Limited - India
- VISA Power Limited - India
- Kobexindo Tractors - Indoneisa
- European Bulk Services B.V. - Netherlands
- Interocean Group of Companies - India
- Orica Australia Pty. Ltd.
- Coalindo Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Australian Commodity Traders Exchange
- Alfred C Toepfer International GmbH - Germany
- Africa Commodities Group - South Africa
- OPG Power Generation Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- Therma Luzon, Inc, Philippines
- London Commodity Brokers - England
- Independent Power Producers Association of India
- PNOC Exploration Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Manunggal Multi Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Makarim & Taira - Indonesia
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Petron Corporation, Philippines
- New Zealand Coal & Carbon
- Banpu Public Company Limited - Thailand
- Parry Sugars Refinery, India
- Jorong Barutama Greston.PT - Indonesia
- Energy Development Corp, Philippines
- Riau Bara Harum - Indonesia
- Posco Energy - South Korea
- Attock Cement Pakistan Limited
- Coal and Oil Company - UAE
- Asmin Koalindo Tuhup - Indonesia
- Planning Commission, India
- Deloitte Consulting - India
- Sojitz Corporation - Japan
- Karbindo Abesyapradhi - Indoneisa
- Australian Coal Association
- Metalloyd Limited - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Binh Thuan Hamico - Vietnam
- Ceylon Electricity Board - Sri Lanka
- SMG Consultants - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- PetroVietnam Power Coal Import and Supply Company
- Minerals Council of Australia
- Ambuja Cements Ltd - India
- Antam Resourcindo - Indonesia
- Maheswari Brothers Coal Limited - India
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