India’s Tata Power, one of the country’s largest conglomerates which also manufactures cars, has put on ice all projects that rely on coal, its chief financial officer told Reuters, warning that it would be difficult for the company to “meet its target of a five-fold increase in generating capacity by 2017” Gulf Today reports:
A change in Indonesia’s mineral export rules has pushed up the cost of coal for Indian buyers, who source 70 per cent of their coal imports from the southeast Asian nation, making about 9,000 MW of imported coal-based projects in the country economically unviable, including Tata’s Gujarat plant.
As Indonesia tries to get more revenues from its vast wealth of minerals, mining companies are becoming increasingly frustrated by the country’s mining policies.
Earlier this year, South-East Asia’s top economy surprised the global mining community with a new rule, Government Regulation No. 24 of 2012, which compels all foreign mining companies to sell majority stakes in their mining operations to locals by the tenth year of production.
A few weeks later, Indonesian officials suggested a possible 20% tax on mining exports, which would include coal, was in process.
Indonesia will also not be righting the perception that it’s a place safe for miners after the country’s supreme court said it will not hear Churchill Mining’s appeal in its two-year legal battle to get compensation for a $2 billion coal project that the company says was unfairly seized.