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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, 05 January 12
DRY BULK MARKET TAKES A PLUNGE OF LOW ACTIVITY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
As was widely expected the first days of the new year are characterized by significantly low chartering across the board of the dry bulk market, pus ...
Wednesday, 04 January 12
NEWBUILDING ORDERS PICKED UP IN 2011, BUT 2012 EXPECTED TO BE A DIFFERENT STORY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the BDI (Baltic Dry Index) starting the year on a sour note, losing 114 points and ending yesterday’s session, the first of the new year, ...
Wednesday, 04 January 12
MAHAGENCO TO IMPORT LOW MOISTURE COAL
COALspot.com - Maharashtra State Power Generation Co. Ltd. is the state power generation utility owned by Government of Maharashtra, intends to proc ...
Tuesday, 03 January 12
INDONESIA COAL REFERENCE PRICE FELL AGAIN
COALspot.com - Ministry of Energy and Mineral Resources of Indonesia has sets the January 2012 coal reference price at US$ 109.29 per ton or US$ 3.3 ...
Tuesday, 03 January 12
WHICH WAY WILL THE DRY BULK MARKET HEAD ON FIRST WEEK OF THE YEAR? - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Dry bulk ship owners will be wondering which way will the BDI (Baltic Dry Index), the industry’s benchmark, will head during the first days of ...
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- Petron Corporation, Philippines
- Riau Bara Harum - Indonesia
- McConnell Dowell - Australia
- Ministry of Finance - Indonesia
- Gujarat Sidhee Cement - India
- San Jose City I Power Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Parry Sugars Refinery, India
- Simpson Spence & Young - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- Global Green Power PLC Corporation, Philippines
- Baramulti Group, Indonesia
- Agrawal Coal Company - India
- Deloitte Consulting - India
- Trasteel International SA, Italy
- GAC Shipping (India) Pvt Ltd
- Kepco SPC Power Corporation, Philippines
- Ministry of Transport, Egypt
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Link Ltd, New Zealand
- GVK Power & Infra Limited - India
- Orica Mining Services - Indonesia
- South Luzon Thermal Energy Corporation
- Directorate Of Revenue Intelligence - India
- Pendopo Energi Batubara - Indonesia
- CIMB Investment Bank - Malaysia
- Antam Resourcindo - Indonesia
- Marubeni Corporation - India
- Jindal Steel & Power Ltd - India
- Coal and Oil Company - UAE
- Wood Mackenzie - Singapore
- Merrill Lynch Commodities Europe
- Miang Besar Coal Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- ASAPP Information Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Kapuas Tunggal Persada - Indonesia
- London Commodity Brokers - England
- Parliament of New Zealand
- Sical Logistics Limited - India
- Independent Power Producers Association of India
- Siam City Cement PLC, Thailand
- Goldman Sachs - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Indian Energy Exchange, India
- Kideco Jaya Agung - Indonesia
- Grasim Industreis Ltd - India
- Heidelberg Cement - Germany
- Indika Energy - Indonesia
- Indogreen Group - Indonesia
- Ceylon Electricity Board - Sri Lanka
- PTC India Limited - India
- Salva Resources Pvt Ltd - India
- Anglo American - United Kingdom
- Minerals Council of Australia
- Global Business Power Corporation, Philippines
- Bhushan Steel Limited - India
- Thai Mozambique Logistica
- Holcim Trading Pte Ltd - Singapore
- Africa Commodities Group - South Africa
- Cigading International Bulk Terminal - Indonesia
- Latin American Coal - Colombia
- Australian Coal Association
- Bhatia International Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Sree Jayajothi Cements Limited - India
- Straits Asia Resources Limited - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Commonwealth Bank - Australia
- Interocean Group of Companies - India
- Siam City Cement - Thailand
- Larsen & Toubro Limited - India
- Indonesian Coal Mining Association
- Mintek Dendrill Indonesia
- Ind-Barath Power Infra Limited - India
- Sakthi Sugars Limited - India
- Madhucon Powers Ltd - India
- Oldendorff Carriers - Singapore
- Semirara Mining and Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Kumho Petrochemical, South Korea
- Gujarat Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- LBH Netherlands Bv - Netherlands
- Barasentosa Lestari - Indonesia
- Romanian Commodities Exchange
- PNOC Exploration Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Maharashtra Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- International Coal Ventures Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Bukit Baiduri Energy - Indonesia
- Makarim & Taira - Indonesia
- Electricity Generating Authority of Thailand
- Kalimantan Lumbung Energi - Indonesia
- Indian Oil Corporation Limited
- Coalindo Energy - Indonesia
- PowerSource Philippines DevCo
- Ambuja Cements Ltd - India
- Intertek Mineral Services - Indonesia
- TeaM Sual Corporation - Philippines
- Sojitz Corporation - Japan
- Posco Energy - South Korea
- Malabar Cements Ltd - India
- Planning Commission, India
- Ministry of Mines - Canada
- Sarangani Energy Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Central Java Power - Indonesia
- SMG Consultants - Indonesia
- Renaissance Capital - South Africa
- Rio Tinto Coal - Australia
- Sinarmas Energy and Mining - Indonesia
- Dalmia Cement Bharat India
- The Treasury - Australian Government
- OPG Power Generation Pvt Ltd - India
- Chamber of Mines of South Africa
- Australian Commodity Traders Exchange
- Videocon Industries ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Maheswari Brothers Coal Limited - India
- IEA Clean Coal Centre - UK
- Power Finance Corporation Ltd., India
- Meenaskhi Energy Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Electricity Authority, New Zealand
- Toyota Tsusho Corporation, Japan
- Vizag Seaport Private Limited - India
- Eastern Energy - Thailand
- Mercator Lines Limited - India
- Mercuria Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Kobexindo Tractors - Indoneisa
- Port Waratah Coal Services - Australia
- Xindia Steels Limited - India
- Orica Australia Pty. Ltd.
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- Georgia Ports Authority, United States
- Vijayanagar Sugar Pvt Ltd - India
- The State Trading Corporation of India Ltd
- VISA Power Limited - India
- Central Electricity Authority - India
- Singapore Mercantile Exchange
- Borneo Indobara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- MS Steel International - UAE
- Bangladesh Power Developement Board
- European Bulk Services B.V. - Netherlands
- New Zealand Coal & Carbon
- Pipit Mutiara Jaya. PT, Indonesia
- Vedanta Resources Plc - India
- Kaltim Prima Coal - Indonesia
- Eastern Coal Council - USA
- Bayan Resources Tbk. - Indonesia
- Global Coal Blending Company Limited - Australia
- The University of Queensland
- Cement Manufacturers Association - India
- Carbofer General Trading SA - India
- GMR Energy Limited - India
- Edison Trading Spa - Italy
- Thiess Contractors Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Medco Energi Mining Internasional
- Chettinad Cement Corporation Ltd - India
- Lanco Infratech Ltd - India
- White Energy Company Limited
- Aditya Birla Group - India
- Economic Council, Georgia
- Iligan Light & Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Price Waterhouse Coopers - Russia
- Therma Luzon, Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Attock Cement Pakistan Limited
- SN Aboitiz Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Formosa Plastics Group - Taiwan
- Tata Chemicals Ltd - India
- Kartika Selabumi Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Leighton Contractors Pty Ltd - Australia
- Mjunction Services Limited - India
- Standard Chartered Bank - UAE
- India Bulls Power Limited - India
- Karaikal Port Pvt Ltd - India
- Bharathi Cement Corporation - India
- Meralco Power Generation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Timah Investasi Mineral - Indoneisa
- SMC Global Power, Philippines
- Bukit Makmur.PT - Indonesia
- Jaiprakash Power Ventures ltd
- Wilmar Investment Holdings
- Tamil Nadu electricity Board
- Aboitiz Power Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Coastal Gujarat Power Limited - India
- Uttam Galva Steels Limited - India
- CNBM International Corporation - China
- Altura Mining Limited, Indonesia
- ICICI Bank Limited - India
- Energy Development Corp, Philippines
- Star Paper Mills Limited - India
- Rashtriya Ispat Nigam Limited - India
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