Bumi Resources says China?s new coal import tax won?t affect export

By Cepi Setiadi

IDX-listed coal mining giant PT Bumi Resources Tbk said that China?s new import tax on lignite, considered the lowest rank of coal, will not affect coal export as its entire lignite production has been committed to other markets outside China.

Dileep Srivastava, Director and Corporate Secretary of Bumi Resources, Tbk told to Petromindo.com that his company will not be affected by such policy.

"There is no impact as all lignite coal at Bumi Resources is fully committed to non China markets," Dileep Srivastava, Director and Corporate Secretary of Bumi Resources, told Petromindo.com Wednesday. Bumi is the largest exporter of thermal coal.

The Chinese central government earlier this year announced a new policy to impose a 3 percent import tax on lignite, raising concerns among analysts that it would severely affect major producers in Indonesia such as Bumi and PT Adaro Energy (the latter could not provide immediate response when contacted). China, whose lignite imports mostly come from Indonesia, previously set a zero percent import tariff on the commodity.

Other Indonesian producers also believed that the new import tax policy is unlikely to cause significant effect on Indonesia?s lignite export to China.

Jeffrey Mulyono, Presiden Director of PT Pesona Khatulistiwa Nusantara, an Indonesia low rank coal producer told to Petromindo.com that China has signed the a free trade agreement with member nations of the Southeast Asian Nations (ASEAN) including Indonesia, which implies that coal export from Indonesia will be exempted from the new import tariff policy.

He said, however, that with the introduction of the new import tariff policy, China would require lignite exporters to provide certificate of origin when entering the Chinese market, which may create certain difficulties for small and illegal miners in obtaining the necessary certificate.

Jeffrey also said that a 3 percent import tariff is considered relatively small to cause serious impact on the China?s lignite market. Low rank coal producers in China have lobbied the government to impose the tariff for protection against cheap imports.

Edi Prasodjo, Director of Coal Business Development at the Indonesian Ministry of Energy and Mineral Resoruces in responding to the China new import tax policy said that China would be in breach of the free trade agreement if it imposes tariff on coal import from Indonesia.

The statement from the Chinese authorities regarding the import tax did not specify what particular grades of lignite, in terms of kcal/kg, would be affected. Chinese customs statistics reportedly classify coal with a calorific value of between 3800 ? 4200 kcal/kg as lignite.

Editing by Reiner Simanjuntak