LONDON: Turkey imposed a tax this week on imports of thermal coal from Colombia, Russia and other major exporters, for use in power generation, to support domestic coal production.
The Turkish cabinet decided to impose the tax of $15/tonne on imports from the United States, Colombia, Russia and South Africa on July 18 and announced it in the Official Gazette this week.
The tax hits the biggest exporters of thermal coal but does not apply to imports from the European Union, Israel, Macedonia, Bosnia, Morocco, West Bank, Tunisia, Egypt, Georgia, Albania, Jordan, Chile, Serbia, Kosovo, South Korea, Mauritius and Malaysia, the government said.
The levy is equal to around a quarter of the current month's physical South African coal price of around $63.65 a tonne.
"The tax is be paid by power producers and is levied on a GAR (gross as received) basis for imported coal," said WoodMackenzie analysts.
"The law is an attempt to curb imports and deliver a stronger contribution from Turkey's domestic market. However, given weak alternatives (poor domestic supply, more costly gas) we do not see an immediate impact," they added.
Turkey represents around 4 percent of global seaborne thermal coal demand.
Some commentators have suggested that President Tayyip Erdogan believes ramping up coal production will boost tax revenues and help curb Turkey's budget deficit.
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