Mon Jun 4, 2012
* Govt to curb exports to conserve coal for domestic use
* Indonesia still considering an export tax for coal
* Move could hurt trade balance, investor sentiment-analyst
* Coal stocks slide, Bumi down 11 pct vs index down 3 pct
By Fayen Wong and Fergus Jensen
NUSA DUA, Indonesia, June 4 (Reuters) - Indonesia plans to control coal exports and is considering a tax on shipments from the world's top thermal coal exporter, the mining minister said on Monday, comments that pushed shares in the country's top coal miners down by more than 10 percent.
Indonesia has introduced a series of regulations aimed at squeezing more state revenues from the mining industry, including on ownership and export taxes, but had steered clear of coal.
An export curb from the world's top exporter of thermal coal is not likely to boost prices in the short-term for a well supplied market, but could push up global costs in the long-run as it would force Indonesia's top coal buyers India and China to seek alternatives.
"Indonesia is the biggest supplier of seaborne thermal coal, and if everyone has to pay 20 percent more to get Indonesian tonnes, it will have a real impact for sure," said Lachlan Shaw, commodities analyst at Commonwealth Bank of Australia in Melbourne.
Energy and Minerals Minister Jero Wacik said on Monday the country needed to conserve coal for domestic use, in a G20 economy seeing strong growth and surging demand for power generation.
The comments, which follow a series of new rules, drove down shares in the country's leading coal miners Bumi Resources and Adaro Energy by over 10 percent.
Indonesian officials have previously talked about a possible tax on coal but have so far exempted it from a flurry of mining regulations this year that have included a 20 percent tax on the export of unprocessed metals. Indonesia's coal exports were worth $27 billion last year, or 13 percent of the total.
Indonesia's coal demand is seen growing 10 percent next year to 63.2 million tonnes and then to about 68 million tonnes by 2014, state utility PLN said on Monday. It forecasts consumption will surge to 125.7 million tonnes by 2022.
"Indonesia's need for coal will increase strongly, so exports will need to be controlled," mining minister Wacik told the Coaltrans conference in Bali, without giving any details on the possible scope of export curbs or a timeframe.
Thamrin Sihite, a director general in the energy and minerals ministry, said the country is still considering a tax on exports, while another official at the ministry said it could impose a quota on production and higher royalties.
Indonesia already has a domestic supply obligation for coal, but miners have so far been easily able to meet this and ship growing volumes each year to meet regional demand, particularly to India.
"The key question is, if the government requires coal producers to set aside a larger amount of tonnes for domestic consumption, can the coal producers expand production faster than those domestic obligations? If they can, exports will grow as well," said Shaw.
Officials say new mining policies are aimed at helping the country conserve its resources and increase state revenue, though they have been criticised for creating uncertainty in the sector and hurting investor sentiment.
Southeast Asia's top economy imposed a rule earlier this year requiring foreign companies to sell down stakes in mines and increase domestic ownership to at least 51 percent by the 10th year of a mine's production.
Indonesia's move towards limiting mineral exports is adding to worries by global investors already looking for safety in the dollar. The country's rupiah currency, emerging Asia's worst performer so far this year, fell 1 percent on Monday.
"The policy would have adverse implications for trade, investment and growth," said Jakarta-based political risk analyst Kevin O'Rourke in a report.
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