The Chinese Government has announced a 3% tax on imports of thermal coal with low calorific value, following a meeting of China’s State Council.
The announcement follows weeks of posturing as to whether the tax would be introduced or not. Many market analysts were concerned the tax would negatively impact Indonesian exports of thermal coal, with the country accounting for 97% of China’s lignite imports from January to July 2013.
There remains uncertainty over the impact the tax will have on Indonesia. Reuters has reported sales of coal from Indonesian miners, such as Bumi Resources and Adaro Energy, could be dented by the tax, while the tax could also spark defaults of existing contracts. However, a trade deal with Southeast Asian nations has also been cited as ensuring Indonesian shipments continue to enjoy zero import tariffs.
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