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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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- Madhucon Powers Ltd - India
- Borneo Indobara - Indonesia
- Essar Steel Hazira Ltd - India
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Mercuria Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Coalindo Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Ministry of Transport, Egypt
- Bukit Asam (Persero) Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Medco Energi Mining Internasional
- PNOC Exploration Corporation - Philippines
- IEA Clean Coal Centre - UK
- Toyota Tsusho Corporation, Japan
- Sarangani Energy Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Orica Australia Pty. Ltd.
- Indian Oil Corporation Limited
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- GMR Energy Limited - India
- Renaissance Capital - South Africa
- Miang Besar Coal Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Indogreen Group - Indonesia
- Trasteel International SA, Italy
- Siam City Cement PLC, Thailand
- Thiess Contractors Indonesia
- ASAPP Information Group - India
- Altura Mining Limited, Indonesia
- Electricity Authority, New Zealand
- International Coal Ventures Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Singapore Mercantile Exchange
- CNBM International Corporation - China
- Rio Tinto Coal - Australia
- Power Finance Corporation Ltd., India
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Central Electricity Authority - India
- Sindya Power Generating Company Private Ltd
- Romanian Commodities Exchange
- The State Trading Corporation of India Ltd
- Bukit Baiduri Energy - Indonesia
- Larsen & Toubro Limited - India
- Attock Cement Pakistan Limited
- The University of Queensland
- Wood Mackenzie - Singapore
- Port Waratah Coal Services - Australia
- PetroVietnam Power Coal Import and Supply Company
- Rashtriya Ispat Nigam Limited - India
- Mercator Lines Limited - India
- Indonesian Coal Mining Association
- Heidelberg Cement - Germany
- Kohat Cement Company Ltd. - Pakistan
- Ceylon Electricity Board - Sri Lanka
- Tamil Nadu electricity Board
- Formosa Plastics Group - Taiwan
- Independent Power Producers Association of India
- Malabar Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Economic Council, Georgia
- Siam City Cement - Thailand
- Georgia Ports Authority, United States
- Cigading International Bulk Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- Deloitte Consulting - India
- Parliament of New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vizag Seaport Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Standard Chartered Bank - UAE
- Banpu Public Company Limited - Thailand
- Energy Development Corp, Philippines
- Cement Manufacturers Association - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sinarmas Energy and Mining - Indonesia
- Thai Mozambique Logistica
- OPG Power Generation Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Iligan Light & Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Savvy Resources Ltd - HongKong
- Orica Mining Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Merrill Lynch Commodities Europe
- Latin American Coal - Colombia
- Planning Commission, India
- New Zealand Coal & Carbon
- Videocon Industries ltd - India
- Leighton Contractors Pty Ltd - Australia
- Bhushan Steel Limited - India
- Carbofer General Trading SA - India
- Globalindo Alam Lestari - Indonesia
- Coal and Oil Company - UAE
- Ministry of Finance - Indonesia
- European Bulk Services B.V. - Netherlands
- Bayan Resources Tbk. - Indonesia
- Sakthi Sugars Limited - India
- AsiaOL BioFuels Corp., Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Neyveli Lignite Corporation Ltd, - India
- Dalmia Cement Bharat India
- Anglo American - United Kingdom
- Simpson Spence & Young - Indonesia
- Australian Commodity Traders Exchange
- Baramulti Group, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Metalloyd Limited - United Kingdom
- Bhoruka Overseas - Indonesia
- Wilmar Investment Holdings
- VISA Power Limited - India
- CIMB Investment Bank - Malaysia
- PowerSource Philippines DevCo
- McConnell Dowell - Australia
- Ind-Barath Power Infra Limited - India
- Edison Trading Spa - Italy
- Vijayanagar Sugar Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Intertek Mineral Services - Indonesia
- Manunggal Multi Energi - Indonesia
- Australian Coal Association
- Aditya Birla Group - India
- Mintek Dendrill Indonesia
- Straits Asia Resources Limited - Singapore
- Meralco Power Generation, Philippines
- Mjunction Services Limited - India
- Ministry of Mines - Canada
- Makarim & Taira - Indonesia
- Indo Tambangraya Megah - Indonesia
- Energy Link Ltd, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- MS Steel International - UAE
- SMC Global Power, Philippines
- San Jose City I Power Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kobexindo Tractors - Indoneisa
- Uttam Galva Steels Limited - India
- Marubeni Corporation - India
- Eastern Coal Council - USA
- Posco Energy - South Korea
- Lanco Infratech Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Central Java Power - Indonesia
- Xindia Steels Limited - India
- Bukit Makmur.PT - Indonesia
- Salva Resources Pvt Ltd - India
- Bharathi Cement Corporation - India
- Binh Thuan Hamico - Vietnam
- Indian Energy Exchange, India
- Eastern Energy - Thailand
- ICICI Bank Limited - India
- GVK Power & Infra Limited - India
- Star Paper Mills Limited - India
- GAC Shipping (India) Pvt Ltd
- Bhatia International Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Kaltim Prima Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Chamber of Mines of South Africa
- Karbindo Abesyapradhi - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- LBH Netherlands Bv - Netherlands
- Bulk Trading Sa - Switzerland
- The Treasury - Australian Government
- India Bulls Power Limited - India
- Grasim Industreis Ltd - India
- Global Business Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Ambuja Cements Ltd - India
- Electricity Generating Authority of Thailand
- PTC India Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Global Coal Blending Company Limited - Australia
- Bangladesh Power Developement Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- London Commodity Brokers - England
- Sree Jayajothi Cements Limited - India
- Sical Logistics Limited - India
- Riau Bara Harum - Indonesia
- Price Waterhouse Coopers - Russia
- Minerals Council of Australia
- Interocean Group of Companies - India
- Therma Luzon, Inc, Philippines
- SMG Consultants - Indonesia
- Vedanta Resources Plc - India
- Commonwealth Bank - Australia
- Barasentosa Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Indika Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Agrawal Coal Company - India
- Africa Commodities Group - South Africa
- Gujarat Sidhee Cement - India
- Parry Sugars Refinery, India
- Antam Resourcindo - Indonesia
- IHS Mccloskey Coal Group - USA
- Petron Corporation, Philippines
- Oldendorff Carriers - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Meenaskhi Energy Private Limited - India
- Aboitiz Power Corporation - Philippines
- Goldman Sachs - Singapore
- Kumho Petrochemical, South Korea
- Kepco SPC Power Corporation, Philippines
- White Energy Company Limited
- Kideco Jaya Agung - Indonesia
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