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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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Tuesday, 14 November 23
CHINA'S BELT AND ROAD INITIATIVE TURNS AWAY FROM COAL - WOOD MACKENZIE
Ambitious, contentious and big spending, China’s Belt and Road Initiative (BRI) is 10 years old. In that time, China has splashed more than U ...
Friday, 10 November 23
THE COMMODITIES FEED: OIL UNDER PRESSURE - ING
Energy – Brent plummets
The oil market came under significant pressure yesterday. ICE Brent settled 4.19% lower on the day and ...
Friday, 10 November 23
COAL USE AT U.S. POWER PLANTS CONTINUES DOWNWARD SPIRAL; FULL IMPACT ON MINES TO BE FELT IN 2024 - IEEFA
This year, the use of coal by the U.S.’s power producers has been so anemic that the fuel has not achieved a 20% market share in any month so ...
Friday, 10 November 23
INDIA: NATIONAL COAL INDEX RISES 3.83 POINTS IN SEPTEMBER AMID HIGHER DEMAND - LIVEMINT
The National Coal Index (NCI) rose 3.83 points to 143.91 in September amid growing demand for coal.
The union coal ministry on Tuesd ...
Thursday, 09 November 23
WE'RE PRODUCING TOO MUCH COAL, OIL AND GAS, REPORT SAYS - WSJ
World leaders pledged in 2015 to reduce emissions in a combined effort to limit climate change.
Now they are stepping up production ...
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- Meenaskhi Energy Private Limited - India
- Baramulti Group, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Therma Luzon, Inc, Philippines
- SMC Global Power, Philippines
- Deloitte Consulting - India
- Eastern Energy - Thailand
- Meralco Power Generation, Philippines
- Borneo Indobara - Indonesia
- Pendopo Energi Batubara - Indonesia
- Madhucon Powers Ltd - India
- Barasentosa Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Ministry of Finance - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Commonwealth Bank - Australia
- Mercator Lines Limited - India
- Power Finance Corporation Ltd., India
- Petron Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Standard Chartered Bank - UAE
- Antam Resourcindo - Indonesia
- International Coal Ventures Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- Jaiprakash Power Ventures ltd
- Sinarmas Energy and Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- White Energy Company Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Goldman Sachs - Singapore
- Coal and Oil Company - UAE
- European Bulk Services B.V. - Netherlands
- Oldendorff Carriers - Singapore
- The University of Queensland
- Indo Tambangraya Megah - Indonesia
- ASAPP Information Group - India
- MS Steel International - UAE
- Kaltim Prima Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Pipit Mutiara Jaya. PT, Indonesia
- Independent Power Producers Association of India
- Heidelberg Cement - Germany
- LBH Netherlands Bv - Netherlands
- Wood Mackenzie - Singapore
- Tamil Nadu electricity Board
- Orica Mining Services - Indonesia
- India Bulls Power Limited - India
- Anglo American - United Kingdom
- Minerals Council of Australia
- PNOC Exploration Corporation - Philippines
- Electricity Generating Authority of Thailand
- Directorate Of Revenue Intelligence - India
- TeaM Sual Corporation - Philippines
- Australian Commodity Traders Exchange
- Directorate General of MIneral and Coal - Indonesia
- Star Paper Mills Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Ind-Barath Power Infra Limited - India
- Electricity Authority, New Zealand
- Cement Manufacturers Association - India
- Thai Mozambique Logistica
- Kideco Jaya Agung - Indonesia
- Samtan Co., Ltd - South Korea
- Kohat Cement Company Ltd. - Pakistan
- Parliament of New Zealand
- Posco Energy - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- New Zealand Coal & Carbon
- Banpu Public Company Limited - Thailand
- CNBM International Corporation - China
- Thiess Contractors Indonesia
- Indogreen Group - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- IHS Mccloskey Coal Group - USA
- Timah Investasi Mineral - Indoneisa
- Simpson Spence & Young - Indonesia
- ICICI Bank Limited - India
- Energy Link Ltd, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bharathi Cement Corporation - India
- Bulk Trading Sa - Switzerland
- Latin American Coal - Colombia
- Bangladesh Power Developement Board
- Global Green Power PLC Corporation, Philippines
- Global Business Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Intertek Mineral Services - Indonesia
- Sical Logistics Limited - India
- South Luzon Thermal Energy Corporation
- Rashtriya Ispat Nigam Limited - India
- Ministry of Transport, Egypt
- The State Trading Corporation of India Ltd
- Georgia Ports Authority, United States
- Toyota Tsusho Corporation, Japan
- VISA Power Limited - India
- PTC India Limited - India
- Bayan Resources Tbk. - Indonesia
- CIMB Investment Bank - Malaysia
- Kumho Petrochemical, South Korea
- Lanco Infratech Ltd - India
- Eastern Coal Council - USA
- Kobexindo Tractors - Indoneisa
- Planning Commission, India
- Bukit Makmur.PT - Indonesia
- Africa Commodities Group - South Africa
- Port Waratah Coal Services - Australia
- Mercuria Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Agrawal Coal Company - India
- Dalmia Cement Bharat India
- San Jose City I Power Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Romanian Commodities Exchange
- Wilmar Investment Holdings
- Gujarat Electricity Regulatory Commission - India
- Xindia Steels Limited - India
- Larsen & Toubro Limited - India
- Globalindo Alam Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Leighton Contractors Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Australian Coal Association
- Coalindo Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Mjunction Services Limited - India
- Krishnapatnam Port Company Ltd. - India
- Chamber of Mines of South Africa
- Price Waterhouse Coopers - Russia
- SMG Consultants - Indonesia
- Coastal Gujarat Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Central Electricity Authority - India
- Semirara Mining and Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Maheswari Brothers Coal Limited - India
- Bhushan Steel Limited - India
- Semirara Mining Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Altura Mining Limited, Indonesia
- Singapore Mercantile Exchange
- Bukit Baiduri Energy - Indonesia
- Ministry of Mines - Canada
- IEA Clean Coal Centre - UK
- Maharashtra Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Malabar Cements Ltd - India
- The Treasury - Australian Government
- PowerSource Philippines DevCo
- Gujarat Mineral Development Corp Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Makarim & Taira - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Parry Sugars Refinery, India
- Vizag Seaport Private Limited - India
- Sindya Power Generating Company Private Ltd
- Marubeni Corporation - India
- GVK Power & Infra Limited - India
- Vedanta Resources Plc - India
- Indonesian Coal Mining Association
- Energy Development Corp, Philippines
- Economic Council, Georgia
- Kalimantan Lumbung Energi - Indonesia
- GMR Energy Limited - India
- Sojitz Corporation - Japan
- GAC Shipping (India) Pvt Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Sakthi Sugars Limited - India
- Essar Steel Hazira Ltd - India
- Grasim Industreis Ltd - India
- Interocean Group of Companies - India
- Holcim Trading Pte Ltd - Singapore
- Uttam Galva Steels Limited - India
- Renaissance Capital - South Africa
- Indika Energy - Indonesia
- Gujarat Sidhee Cement - India
- Petrochimia International Co. Ltd.- Taiwan
- Salva Resources Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Siam City Cement - Thailand
- Karaikal Port Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Trasteel International SA, Italy
- Manunggal Multi Energi - Indonesia
- Edison Trading Spa - Italy
- Vijayanagar Sugar Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Metalloyd Limited - United Kingdom
- Riau Bara Harum - Indonesia
- Indian Energy Exchange, India
- Straits Asia Resources Limited - Singapore
- Indian Oil Corporation Limited
- Bhoruka Overseas - Indonesia
- London Commodity Brokers - England
- Aditya Birla Group - India
- Siam City Cement PLC, Thailand
- Iligan Light & Power Inc, Philippines
- Tata Chemicals Ltd - India
- Carbofer General Trading SA - India
- McConnell Dowell - Australia
- Rio Tinto Coal - Australia
- Ambuja Cements Ltd - India
- Merrill Lynch Commodities Europe
- Central Java Power - Indonesia
- Mintek Dendrill Indonesia
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- Medco Energi Mining Internasional
- Billiton Holdings Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- Formosa Plastics Group - Taiwan
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