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Tuesday, 27 December 11
MINERS MAKE CASE FOR RESUMING CONTRACT NEGOTIATIONS - THE JAKARTA POST
The Jakarta Post reported that, problems with the renegotiation of mining contracts in the country are far from over, as agreements on several crucial issues are still yet to be found.
The government remains adamant that it will not compromise on its intention to ramp up state revenues by increasing royalties, while miners on the other hand insist that some points in the 2009 minerals and coal law are “irrational” and may create uncertainty in terms of the outcome of their investments.
The Indonesian Mining Association (IMA) revealed that renegotiations had stalled due to three major issues: the size of mining areas, state revenues and contract extensions.
In a bid to make progress on the stagnant talks between the government and miners, the association proposed solutions to the three issues based on what it saw as fair for both parties. With the proposals, it expected that deals would be made, which would foster an air of certainty in relation to operations.
On the issue of state revenues, the association claimed that it was hard for mining companies to adjust the amount of royalties to the level set by the government in the 2003 regulation on tariffs for non-tax revenues for the energy and mineral resources sector (3.75 percent of sales for gold, 3.25 percent for silver and 4 percent for copper).
“If the government wants to raise royalties, it also has to think about other financial obligations paid by companies, such as the corporate income tax, the amount of which is still 35 percent even though the 2008 law on income tax revised it to 25 percent,” said Syahrir AB, an executive director of the IMA, in Jakarta on Monday.
The government could not force mining companies to pay higher royalties without adjusting its other financial obligations because such economic burdens would reduce the profitability of their projects, he explained.
If the goal was to raise state revenues from the mining sector, he suggested that the government apply a threshold for mining companies’ profits. For example, if a company made a profit margin of more than 25 percent due to the soaring prices of commodities, the government could apply an additional tax, he added.
The second suggestion was related to the size of mining areas. The association said most mining companies needed at least 70,000 hectares to make a mining project “economical”. However, the 2009 law on minerals and coal determined that the maximum size for mineral mining was 25,000 hectares, with coal mining at 15,000 hectares.
“In our last meeting with the government, it understood our reasons. The government agreed that the size of an area granted to a company would be judged based on the long-term plan it proposed to the government,” Syahrir reported.
That model requires the Energy and Mineral Resources Ministry to have the human resources to review the plan and judge whether the size of area proposed by a company is reasonable or not. If the reviewers say that the proposal is unreasonable, the government can grant the permit for a smaller area.
The third suggestion was about the contract extension. Currently, mining companies can extend the contract by “two times 10 years”, but the authority to grant approval for the extension is in the hands of the head of regions by issuing mining permits. The association deems that the model creates uncertainty over the future of mining projects. It suggests that the contract extension clause is included into mining contracts (KK) and contracts of work (PKP2B).
The director general for minerals and coal at the Energy and Mineral Resources Ministry, Thamrin Sihite, said that out of 42 mining contract holders and 76 contracts of work, there were companies that agreed to all renegotiation points, and some that partially agreed and disagreed.
“About the suggestion in relation to the size of area, the government will review it first, if the proposal is in line with the government vision, we may approve it,” he said over the phone.
However, he reminded that renegotiations had to be looked at on case by case basis as each company had different problems.
IMA proposals:
•The implementation of a profit threshold to allow the government to tax mining companies if the latter’s profit margins exceed the threshold.
•Determine the mining area based on the profitability of each mining project. The IMA estimates that a company needs at least 70,000 hectares to make a project profitable.
•Contract extensions have to be included into mining contracts (KK) and contracts of work (PKP2B) to create certainty.
Source: The Jakarta Post
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Thursday, 25 January 24
THE RED SEA ESCALATION IMPLICATIONS ON GLOBAL SEABORNE TRADE - MARIA BERTZELETOU
In recent days, discussions have intensified about the potential impact on the seaborne trade and ton-miles due to the evolving dynamics of market ...
Thursday, 25 January 24
RED SEA SHIPPING DISRUPTIONS KEEP GEOPOLITICAL PREMIUM FOR COMMODITIES - FITCH RATINGS
Shipping disruptions and re-routing away from the Red Sea will maintain the geopolitical premium in the main commodity markets, including for oil a ...
Friday, 19 January 24
INDONESIA TARGETS 710 MLN METRIC TONS COAL OUTPUT IN 2024 AFTER RECORD 2023 - REUTERS
Indonesia, a major thermal coal exporter, aims to produce 710 million metric tons of coal in 2024, its mining minister said on Monday, after postin ...
Friday, 19 January 24
DRUMMOND COLOMBIA COAL OUTPUT ROSE 7.1% IN 2023 - REUTERS
Coal production from miner Drummond’s Colombia operations rose 7.1% in 2023 to 29.5 million metric tons, while exports declined by 2.6% to 27 ...
Friday, 19 January 24
CHINA'S 2023 COAL OUTPUT HITS RECORD HIGH - REUTERS
China’s coal output reached a record high in 2023, data from the statistics bureau showed on Wednesday, amid an ongoing focus on energy secur ...
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- Neyveli Lignite Corporation Ltd, - India
- Orica Mining Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- MS Steel International - UAE
- ASAPP Information Group - India
- Global Business Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- The Treasury - Australian Government
- Wood Mackenzie - Singapore
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- Mercator Lines Limited - India
- Bhoruka Overseas - Indonesia
- International Coal Ventures Pvt Ltd - India
- Videocon Industries ltd - India
- Cigading International Bulk Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Ambuja Cements Ltd - India
- Thiess Contractors Indonesia
- Marubeni Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Trasteel International SA, Italy
- AsiaOL BioFuels Corp., Philippines
- Central Java Power - Indonesia
- Star Paper Mills Limited - India
- Bhatia International Limited - India
- Kapuas Tunggal Persada - Indonesia
- Indo Tambangraya Megah - Indonesia
- Mjunction Services Limited - India
- Coastal Gujarat Power Limited - India
- Manunggal Multi Energi - Indonesia
- Ministry of Finance - Indonesia
- Singapore Mercantile Exchange
- TeaM Sual Corporation - Philippines
- Ministry of Transport, Egypt
- Ministry of Mines - Canada
- PetroVietnam Power Coal Import and Supply Company
- Sindya Power Generating Company Private Ltd
- Larsen & Toubro Limited - India
- Kepco SPC Power Corporation, Philippines
- Energy Development Corp, Philippines
- Madhucon Powers Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Agrawal Coal Company - India
- Bahari Cakrawala Sebuku - Indonesia
- Deloitte Consulting - India
- Petron Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- PTC India Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parry Sugars Refinery, India
- Commonwealth Bank - Australia
- Alfred C Toepfer International GmbH - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Holcim Trading Pte Ltd - Singapore
- Meenaskhi Energy Private Limited - India
- GMR Energy Limited - India
- Heidelberg Cement - Germany
- Latin American Coal - Colombia
- Straits Asia Resources Limited - Singapore
- Sree Jayajothi Cements Limited - India
- Georgia Ports Authority, United States
- OPG Power Generation Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- IEA Clean Coal Centre - UK
- Samtan Co., Ltd - South Korea
- Baramulti Group, Indonesia
- Central Electricity Authority - India
- Timah Investasi Mineral - Indoneisa
- Indika Energy - Indonesia
- Makarim & Taira - Indonesia
- Rashtriya Ispat Nigam Limited - India
- IHS Mccloskey Coal Group - USA
- Aboitiz Power Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Chamber of Mines of South Africa
- Semirara Mining Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Borneo Indobara - Indonesia
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- Asmin Koalindo Tuhup - Indonesia
- McConnell Dowell - Australia
- Energy Link Ltd, New Zealand
- LBH Netherlands Bv - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Eastern Coal Council - USA
- Tamil Nadu electricity Board
- Metalloyd Limited - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Goldman Sachs - Singapore
- Minerals Council of Australia
- SN Aboitiz Power Inc, Philippines
- Tata Chemicals Ltd - India
- Electricity Generating Authority of Thailand
- Australian Commodity Traders Exchange
- India Bulls Power Limited - India
- CNBM International Corporation - China
- GAC Shipping (India) Pvt Ltd
- Electricity Authority, New Zealand
- Essar Steel Hazira Ltd - India
- Antam Resourcindo - Indonesia
- Global Coal Blending Company Limited - Australia
- New Zealand Coal & Carbon
- Maharashtra Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- Globalindo Alam Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Wilmar Investment Holdings
- TNB Fuel Sdn Bhd - Malaysia
- Coal and Oil Company - UAE
- Romanian Commodities Exchange
- Vedanta Resources Plc - India
- Riau Bara Harum - Indonesia
- SMG Consultants - Indonesia
- Salva Resources Pvt Ltd - India
- The University of Queensland
- Leighton Contractors Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- London Commodity Brokers - England
- ICICI Bank Limited - India
- Edison Trading Spa - Italy
- Siam City Cement - Thailand
- Power Finance Corporation Ltd., India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bharathi Cement Corporation - India
- Karaikal Port Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- South Luzon Thermal Energy Corporation
- Karbindo Abesyapradhi - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Sakthi Sugars Limited - India
- Sinarmas Energy and Mining - Indonesia
- Rio Tinto Coal - Australia
- Therma Luzon, Inc, Philippines
- Bangladesh Power Developement Board
- Xindia Steels Limited - India
- Sical Logistics Limited - India
- Africa Commodities Group - South Africa
- Dalmia Cement Bharat India
- Port Waratah Coal Services - Australia
- Indonesian Coal Mining Association
- Sojitz Corporation - Japan
- Malabar Cements Ltd - India
- Renaissance Capital - South Africa
- CIMB Investment Bank - Malaysia
- Simpson Spence & Young - Indonesia
- Independent Power Producers Association of India
- Banpu Public Company Limited - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Merrill Lynch Commodities Europe
- The State Trading Corporation of India Ltd
- SMC Global Power, Philippines
- Formosa Plastics Group - Taiwan
- Attock Cement Pakistan Limited
- Kaltim Prima Coal - Indonesia
- Grasim Industreis Ltd - India
- GVK Power & Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- Indogreen Group - Indonesia
- Iligan Light & Power Inc, Philippines
- Eastern Energy - Thailand
- Mercuria Energy - Indonesia
- Mintek Dendrill Indonesia
- White Energy Company Limited
- Anglo American - United Kingdom
- Directorate Of Revenue Intelligence - India
- Kobexindo Tractors - Indoneisa
- Jaiprakash Power Ventures ltd
- Carbofer General Trading SA - India
- VISA Power Limited - India
- San Jose City I Power Corp, Philippines
- Indian Energy Exchange, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Interocean Group of Companies - India
- Bukit Baiduri Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Standard Chartered Bank - UAE
- Cement Manufacturers Association - India
- Parliament of New Zealand
- Thai Mozambique Logistica
- Medco Energi Mining Internasional
- Price Waterhouse Coopers - Russia
- Krishnapatnam Port Company Ltd. - India
- Kalimantan Lumbung Energi - Indonesia
- Jindal Steel & Power Ltd - India
- PNOC Exploration Corporation - Philippines
- Lanco Infratech Ltd - India
- Indian Oil Corporation Limited
- Orica Australia Pty. Ltd.
- Siam City Cement PLC, Thailand
- Bhushan Steel Limited - India
- Savvy Resources Ltd - HongKong
- Gujarat Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Economic Council, Georgia
- Kumho Petrochemical, South Korea
- Coalindo Energy - Indonesia
- Planning Commission, India
- Meralco Power Generation, Philippines
- Sarangani Energy Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Australian Coal Association
- Gujarat Sidhee Cement - India
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