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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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Friday, 23 February 24
STRONG OUTLOOK FOR THE TANKER MARKET IN 2024 AND BEYOND - DNV
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Friday, 23 February 24
AUSTRALIAN COAL FLOWS TO ASIA HOVER ABOVE LAST YEAR’S VOLUME TONNES - SIGNAL GROUP
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Friday, 23 February 24
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Thursday, 22 February 24
BIMCO PUBLISHES SHIP FINANCING FORMS TO ENSURE UNINTERRUPTED USE OF SHIPS
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Monday, 19 February 24
METALS INVESTMENT: THE DARKEST HOUR IS JUST BEFORE THE DAWN - WOOD MACKENZIE
Things often seem at their worst just before they get better. In terms of meeting our net zero 2050 scenario, we’ve reached a watershed momen ...
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- Rio Tinto Coal - Australia
- Coal and Oil Company - UAE
- Global Coal Blending Company Limited - Australia
- PowerSource Philippines DevCo
- Australian Coal Association
- Australian Commodity Traders Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Wood Mackenzie - Singapore
- Merrill Lynch Commodities Europe
- Ambuja Cements Ltd - India
- Kobexindo Tractors - Indoneisa
- London Commodity Brokers - England
- GN Power Mariveles Coal Plant, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Meenaskhi Energy Private Limited - India
- Mintek Dendrill Indonesia
- Sree Jayajothi Cements Limited - India
- Rashtriya Ispat Nigam Limited - India
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining Corp, Philippines
- Indogreen Group - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- CIMB Investment Bank - Malaysia
- Aditya Birla Group - India
- Siam City Cement PLC, Thailand
- SMG Consultants - Indonesia
- Jaiprakash Power Ventures ltd
- Chettinad Cement Corporation Ltd - India
- Straits Asia Resources Limited - Singapore
- Simpson Spence & Young - Indonesia
- Manunggal Multi Energi - Indonesia
- New Zealand Coal & Carbon
- Indian Oil Corporation Limited
- ASAPP Information Group - India
- Heidelberg Cement - Germany
- Africa Commodities Group - South Africa
- GVK Power & Infra Limited - India
- Meralco Power Generation, Philippines
- Medco Energi Mining Internasional
- The State Trading Corporation of India Ltd
- ICICI Bank Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Bayan Resources Tbk. - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Renaissance Capital - South Africa
- SMC Global Power, Philippines
- Electricity Authority, New Zealand
- Essar Steel Hazira Ltd - India
- Videocon Industries ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sojitz Corporation - Japan
- Parliament of New Zealand
- PNOC Exploration Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Central Electricity Authority - India
- Sakthi Sugars Limited - India
- Commonwealth Bank - Australia
- Bhoruka Overseas - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Cigading International Bulk Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- Riau Bara Harum - Indonesia
- Attock Cement Pakistan Limited
- Port Waratah Coal Services - Australia
- Savvy Resources Ltd - HongKong
- Coastal Gujarat Power Limited - India
- Ministry of Transport, Egypt
- Ministry of Finance - Indonesia
- Central Java Power - Indonesia
- Xindia Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- Marubeni Corporation - India
- Kumho Petrochemical, South Korea
- Parry Sugars Refinery, India
- Carbofer General Trading SA - India
- Orica Australia Pty. Ltd.
- The Treasury - Australian Government
- Mjunction Services Limited - India
- Posco Energy - South Korea
- GMR Energy Limited - India
- Metalloyd Limited - United Kingdom
- IHS Mccloskey Coal Group - USA
- Global Green Power PLC Corporation, Philippines
- Romanian Commodities Exchange
- Tata Chemicals Ltd - India
- Barasentosa Lestari - Indonesia
- Therma Luzon, Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Formosa Plastics Group - Taiwan
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- CNBM International Corporation - China
- Chamber of Mines of South Africa
- White Energy Company Limited
- TeaM Sual Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- India Bulls Power Limited - India
- Mercuria Energy - Indonesia
- Deloitte Consulting - India
- Uttam Galva Steels Limited - India
- Grasim Industreis Ltd - India
- McConnell Dowell - Australia
- Ceylon Electricity Board - Sri Lanka
- Vizag Seaport Private Limited - India
- Agrawal Coal Company - India
- Petron Corporation, Philippines
- Cement Manufacturers Association - India
- PTC India Limited - India
- Ministry of Mines - Canada
- Tamil Nadu electricity Board
- Neyveli Lignite Corporation Ltd, - India
- Larsen & Toubro Limited - India
- Wilmar Investment Holdings
- Star Paper Mills Limited - India
- Vedanta Resources Plc - India
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- Goldman Sachs - Singapore
- Toyota Tsusho Corporation, Japan
- Anglo American - United Kingdom
- Sical Logistics Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Energy Link Ltd, New Zealand
- LBH Netherlands Bv - Netherlands
- Energy Development Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Independent Power Producers Association of India
- Aboitiz Power Corporation - Philippines
- Madhucon Powers Ltd - India
- Timah Investasi Mineral - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Makarim & Taira - Indonesia
- Kepco SPC Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Bharathi Cement Corporation - India
- Thiess Contractors Indonesia
- Bhatia International Limited - India
- Kartika Selabumi Mining - Indonesia
- VISA Power Limited - India
- Planning Commission, India
- Bhushan Steel Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Malabar Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Trasteel International SA, Italy
- Antam Resourcindo - Indonesia
- Latin American Coal - Colombia
- MS Steel International - UAE
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- Orica Mining Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bangladesh Power Developement Board
- Lanco Infratech Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Dalmia Cement Bharat India
- San Jose City I Power Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Power Finance Corporation Ltd., India
- Kalimantan Lumbung Energi - Indonesia
- Georgia Ports Authority, United States
- The University of Queensland
- Interocean Group of Companies - India
- Alfred C Toepfer International GmbH - Germany
- Mercator Lines Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indika Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Maheswari Brothers Coal Limited - India
- Coalindo Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Singapore Mercantile Exchange
- Thai Mozambique Logistica
- Standard Chartered Bank - UAE
- European Bulk Services B.V. - Netherlands
- Gujarat Sidhee Cement - India
- Gujarat Mineral Development Corp Ltd - India
- Kaltim Prima Coal - Indonesia
- Global Business Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Borneo Indobara - Indonesia
- IEA Clean Coal Centre - UK
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement - Thailand
- Price Waterhouse Coopers - Russia
- Sarangani Energy Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- Electricity Generating Authority of Thailand
- Economic Council, Georgia
- Baramulti Group, Indonesia
- Edison Trading Spa - Italy
- Indian Energy Exchange, India
- Altura Mining Limited, Indonesia
- Eastern Energy - Thailand
- Bulk Trading Sa - Switzerland
- Eastern Coal Council - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Minerals Council of Australia
- Pendopo Energi Batubara - Indonesia
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