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Monday, 28 November 11
CITING CONTRACTS, MINING FIRMS ARE NOT PAYING ROYALTIES UNDER LAW - THE JAKARTA POST
 The Jakarta Post reported that, when the 2009 Law on Minerals and Coal was endorsed, hopes that Indonesia could maximize its revenue from the mineral and coal mining sector swelled.
However, today, two years after the implementation of the law, which mandated that all existing mining contracts and coal contracts of work be adjusted to accord with the law, hopes have been fading.
Despite a commitment from President Susilo Bambang Yudhoyono to renegotiate unfair mining contracts, talks have gone nowhere, particularly with giant foreign companies, such as copper and gold producers PT Freeport Indonesia (FI) and PT Newmont Nusa Tenggara (NNT).
The Energy and Mineral Resources Ministry’s minerals and coal directorate has said that 65 percent of mining companies operating in the country have agreed to renegotiations.
The directorate said 42 mining companies currently had government kontrak karya contracts and 76 companies had coal contracts of work (PKP2B).
However, the directorate has not revealed which companies have agreed to renegotiate their contracts in accordance with the law.
“We want to work first. We’ll let you know the results later. I can’t promise anything,” ministry minerals and coal chief Thamrin Sihite told The Jakarta Post over the weekend.
Although most companies agreed to renegotiate in principal, disagreements emerged and talks became tougher when it came to the details, Thamrin said.
As part of the renegotiation process, the government and miners are discussing six main issues: the size of mining areas, contract extensions, the amount of royalties, obligations to build processing plants, divestment and the use of local goods and services.
The aim is clearly to ramp up the collection of revenue from the minerals and coal mining sector, which critics say remains below expectation.
Take PT Freeport Indonesia, for example, which operates the Grasberg gold and copper mine in Timika, Papua.
According to its contract, which was extended in 1991, the company must pay the government a 1 percent royalty on its gold sales, 1 percent on its silver sales and 3.5 percent on copper sales.
The royalty amounts are below the percentages stipulated in a 2003 government regulation on tariffs for non-tax revenues for the energy and mineral resources sector.
The regulation fixed gold royalties at 3.75 percent, silver royalties at 3.25 percent and copper royalties at 4 percent.
Last year, the government earned Rp 66.82 trillion (US$6.77 billion) from the minerals and coal mining sector, up almost 30 percent from Rp 51.58 trillion in 2009.
This year, the ministry aims to make Rp 56.86 trillion from the sector.
Critics have said that renegotiations have failed to make progress not due to the small number of companies that have agreed to renegotiate, but due to the failure of giant miners, which contribute the highest revenues and productions, to comply with the 2009 law.
Despite the government’s claims that 65 percent of mining and coal companies have agreed to renegotiate, data from the ReforMiner Institute showed that the compliance of those companies, which were mostly smaller firms, had no significant impact on state revenues.
The ReforMiner Institute said that the companies that agreed in whole or in part to contract renegotiations in compliance with the 2009 Minerals and Coal Law produced less than a third of all the gold, silver, copper, nickel, doré bullion, diamond, granite and tin produced in Indonesia between 2003 and 2010.
Further, the companies that “fully disagreed” to renegotiate as required by law produced the lion’s share of the nation’s commodity production, accounted for 82.43 percent of the country’s gold production, 85.10 percent of its silver production and 100 percent of it copper.
In contrast, all coal companies have come to the bargaining table. The companies that fully agreed to renegotiate were responsible for 25.44 percent of total production, while those that partially agreed accounted for 74.56 percent.
The data, taken from a closed meeting between the Minerals and Coal Directorate General and the House of Representatives’ Commission VII overseeing mining, did not reveal the names of the companies discussed.
It is unclear why the government has tolerated noncompliance with the law. Most of the companies that have disagreed to renegotiate have continued to benefit from their original contracts, including low royalty payments, Indonesian Resource Studies (Iress) group chairman Marwan Batubara told the Post.
“They hide behind the principle of ‘the sanctity of contract’. They don’t want the content of their contracts to be revised,” he argued.
The government had to be more firm in negotiating with companies, Marwan said.
“Renegotiation” was a misleading term as the government was required to ensure that the companies complied with Indonesian law, he added.
“The government has a strong legal basis, which is the 2009 Law on Minerals and Coal, to force the companies to sit together. If they refuse to comply with the law, they can get out of the country. I believe many companies will line up to exploit our natural resources,” he said.
Marwan said that Indonesia need not worry about its image as the stipulations of the 2009 law and the 2003 regulation were common practices in other nations.
“In other countries, royalties for minerals are mostly above 4 percent. Why should we worry? If they don’t want to invest, there are many other companies that have been waiting for the opportunity to replace them,” he said.
Source: The Jakarta Post (By - Rangga D. Fadillah)
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Tuesday, 29 November 11
DRY BULK MARKET BEGINS WEEK ON HIGHER NOTE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Contrary to what had been the case during the past few weeks, this one began on a high note for the dry bulk market, with the Capesize sector pullin ...
Monday, 28 November 11
NEW ENVIRONMENTAL MARINE REGULATIONS TO IMPACT SHIPPING IN 2012 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
August of next year will see some major changes for marine navigation. It’s when the North American ECA will come into force, introducing a 1% ...
Sunday, 27 November 11
INDIA'S KPCL TO IMPORT 50 MMT OF COAL FOR 10 YEARS
COALspot.com - Karnataka Power Corporation Limited (KPCL) will buy 5 million metric tonnes of coal annually for 10 years starting from 2015.
In a ...
Saturday, 26 November 11
INDIAN PORTS ARE BECOME COAL STOCKPILES..!!
COALspot.com - The Indian coal stocks and power tariff situation is the hot topic among the world coal producers as well as Indian coal importers.&n ...
Saturday, 26 November 11
THE FREIGHT MARKETS EXPECTED TO BE STEADY NEXT WEEK - VISTAAR
COALspot.com - The market were down probably with the sentiments of global financial markets and all segments were down.
The BDI was up down by 4 ...
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- AsiaOL BioFuels Corp., Philippines
- European Bulk Services B.V. - Netherlands
- Electricity Generating Authority of Thailand
- TeaM Sual Corporation - Philippines
- Lanco Infratech Ltd - India
- Australian Commodity Traders Exchange
- Energy Link Ltd, New Zealand
- Heidelberg Cement - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Energy - Thailand
- Manunggal Multi Energi - Indonesia
- Electricity Authority, New Zealand
- Thai Mozambique Logistica
- Goldman Sachs - Singapore
- Indo Tambangraya Megah - Indonesia
- Bangladesh Power Developement Board
- Meralco Power Generation, Philippines
- Toyota Tsusho Corporation, Japan
- Neyveli Lignite Corporation Ltd, - India
- Economic Council, Georgia
- Indogreen Group - Indonesia
- Renaissance Capital - South Africa
- Barasentosa Lestari - Indonesia
- Ministry of Transport, Egypt
- Essar Steel Hazira Ltd - India
- Kepco SPC Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- IHS Mccloskey Coal Group - USA
- Singapore Mercantile Exchange
- Edison Trading Spa - Italy
- Directorate General of MIneral and Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Orica Mining Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Orica Australia Pty. Ltd.
- SMG Consultants - Indonesia
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Metalloyd Limited - United Kingdom
- Wilmar Investment Holdings
- Bukit Makmur.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMC Global Power, Philippines
- Bulk Trading Sa - Switzerland
- Mintek Dendrill Indonesia
- Sindya Power Generating Company Private Ltd
- Cement Manufacturers Association - India
- Kaltim Prima Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Minerals Council of Australia
- Semirara Mining Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- GVK Power & Infra Limited - India
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Jorong Barutama Greston.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- GAC Shipping (India) Pvt Ltd
- Uttam Galva Steels Limited - India
- Global Coal Blending Company Limited - Australia
- PNOC Exploration Corporation - Philippines
- Videocon Industries ltd - India
- ASAPP Information Group - India
- Interocean Group of Companies - India
- Therma Luzon, Inc, Philippines
- MS Steel International - UAE
- Planning Commission, India
- Altura Mining Limited, Indonesia
- CNBM International Corporation - China
- Port Waratah Coal Services - Australia
- PetroVietnam Power Coal Import and Supply Company
- Cigading International Bulk Terminal - Indonesia
- Xindia Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- New Zealand Coal & Carbon
- Ceylon Electricity Board - Sri Lanka
- Borneo Indobara - Indonesia
- Commonwealth Bank - Australia
- Mjunction Services Limited - India
- Holcim Trading Pte Ltd - Singapore
- Ind-Barath Power Infra Limited - India
- Medco Energi Mining Internasional
- Aboitiz Power Corporation - Philippines
- Indika Energy - Indonesia
- Marubeni Corporation - India
- Carbofer General Trading SA - India
- ICICI Bank Limited - India
- Directorate Of Revenue Intelligence - India
- Ambuja Cements Ltd - India
- London Commodity Brokers - England
- Siam City Cement PLC, Thailand
- Billiton Holdings Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Star Paper Mills Limited - India
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Mercuria Energy - Indonesia
- White Energy Company Limited
- PowerSource Philippines DevCo
- Bukit Baiduri Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Attock Cement Pakistan Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Straits Asia Resources Limited - Singapore
- Coastal Gujarat Power Limited - India
- IEA Clean Coal Centre - UK
- Bhoruka Overseas - Indonesia
- Posco Energy - South Korea
- Central Java Power - Indonesia
- Australian Coal Association
- Georgia Ports Authority, United States
- Standard Chartered Bank - UAE
- Sical Logistics Limited - India
- Maharashtra Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Gujarat Sidhee Cement - India
- Formosa Plastics Group - Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Kumho Petrochemical, South Korea
- PTC India Limited - India
- Oldendorff Carriers - Singapore
- Indonesian Coal Mining Association
- Leighton Contractors Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- Chamber of Mines of South Africa
- Trasteel International SA, Italy
- Aditya Birla Group - India
- Global Business Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Bhushan Steel Limited - India
- Grasim Industreis Ltd - India
- Makarim & Taira - Indonesia
- Iligan Light & Power Inc, Philippines
- Deloitte Consulting - India
- Kideco Jaya Agung - Indonesia
- Latin American Coal - Colombia
- Eastern Coal Council - USA
- Price Waterhouse Coopers - Russia
- Tata Chemicals Ltd - India
- Savvy Resources Ltd - HongKong
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- Mercator Lines Limited - India
- Africa Commodities Group - South Africa
- Ministry of Finance - Indonesia
- Thiess Contractors Indonesia
- Intertek Mineral Services - Indonesia
- Coal and Oil Company - UAE
- Semirara Mining and Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Parry Sugars Refinery, India
- CIMB Investment Bank - Malaysia
- Sinarmas Energy and Mining - Indonesia
- Malabar Cements Ltd - India
- Energy Development Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Timah Investasi Mineral - Indoneisa
- Vedanta Resources Plc - India
- Anglo American - United Kingdom
- Bharathi Cement Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- Petron Corporation, Philippines
- Madhucon Powers Ltd - India
- Central Electricity Authority - India
- TNB Fuel Sdn Bhd - Malaysia
- Indian Oil Corporation Limited
- Coalindo Energy - Indonesia
- Larsen & Toubro Limited - India
- Vizag Seaport Private Limited - India
- Meenaskhi Energy Private Limited - India
- Maheswari Brothers Coal Limited - India
- Indian Energy Exchange, India
- Parliament of New Zealand
- Alfred C Toepfer International GmbH - Germany
- Karaikal Port Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- South Luzon Thermal Energy Corporation
- GN Power Mariveles Coal Plant, Philippines
- Wood Mackenzie - Singapore
- Power Finance Corporation Ltd., India
- Chettinad Cement Corporation Ltd - India
- SN Aboitiz Power Inc, Philippines
- VISA Power Limited - India
- Dalmia Cement Bharat India
- Tamil Nadu electricity Board
- The Treasury - Australian Government
- Rio Tinto Coal - Australia
- Jaiprakash Power Ventures ltd
- The State Trading Corporation of India Ltd
- Sakthi Sugars Limited - India
- International Coal Ventures Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- The University of Queensland
- Karbindo Abesyapradhi - Indoneisa
- Jindal Steel & Power Ltd - India
- Banpu Public Company Limited - Thailand
- Antam Resourcindo - Indonesia
- Ministry of Mines - Canada
- McConnell Dowell - Australia
- Bhatia International Limited - India
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