Sunday, January 29, 2012

Indian Govt to take up Indonesia's proposal on coal tax

The government is trying to take up the issue of Indonesia proposing a tax of exports of coal at bilateral level, Coal Secretary Alok Perti said on Saturday.

"We have taken up the issues of export tax and restrictions in certain quality of coal by the Indonesian government with the Ministry of External Affairs and Finance Ministry," Perti said on the sidelines of the Fourth Asian Mining Congress and International Exhibition in Kolkata on Saturday.

"We are trying to negotiate on the issue on a bilateral level," Perti added.

Indonesia plans to impose export duty on coal and minerals from 2012 and a total ban from 2014 to discourage export without value addition and to encourage base metal and coal downstream industry development.

There was also talk of export of only value-added coal of more than 5,600 kilocalories (kcal) by Indonesia from 2014 onwards.

According to analysts, there would be an overall impact on the Indian power sector, as currently over 50 percent of the total thermal coal imports came from Indonesia.

India's coal import is likely to jump to 140 million tonnes in 2012. Perti also expressed concern over Australia's proposal to impose Mineral Resource Rent Tax (or MRRT). "Australia's proposal for a MRTT will also have an impact," he said.

Commenting on the issue, Arun Jagatramka, chairman and managing director of Gujarat NRE Coke, which has coal blocks in Australia, said: "There is still no clarity on the tax matter by Australia".

Speaking on coal shortage in the country, Perti said, "Coal India is planning to add 100 million tonne of additional production on a conservative basis during the 12th plan period (2012-17) to meet the growing demand.

He pointed out that if environmental issues were sorted out production could be increased to 150 million tonnes during the period.

"The Prime Minister's office is holding talks with coal, power and environment ministries to sort out issues," Perti said.

The Coal Ministry plans to rationalise coal linkages in the 12th plan period to meet the demand on a viability basis. Perti, however, did not elaborate on the issue.

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