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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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Monday, 02 January 12
THE PROMISE OF INDIA: A BRIEF INTERRUPTION? - CLARKSONS / HELLENIC SHIPPING
Future growth in Indian seaborne coal imports has sometimes been considered as one of the largest potential upsides in the currently oversupplied dr ...
Sunday, 01 January 12
IS INDIA FOLLOWING INDONESIA TO STANDARDIZE COAL PRICES TO GET MAXIMUM BENEFITS?
COALspot.com - Coal India limited, an Indian state owned and world largest coal producer has introduced gross calorific value (GCV) based pricing me ...
Saturday, 31 December 11
GLOBALCOAL NEWC INDEX SURGED 2.32 PERCENT
COALspot.com - globalCOAL index in Newcastle Port, benchmark for Asian market, ended substantially higher, surged 2.32 percent to US$115.47 per ...
Saturday, 31 December 11
BORNEO LUMBUNG TO BUY BUMI STAKE, SWAP CEO - THE JAKARTA GLOBE
The Jakarta Globe, one of the leading english news paper in Indonesia reported yesterday, shareholders of Indonesian coking coal miner Borneo Lumbun ...
Friday, 30 December 11
CENTRAL GOVERNMENT SHOULD ISSUE PERMITS - THE JAKARTA POST
The Jakarta Post reported that, business associations from both the palm oil and mining sectors have suggested that the central government should re ...
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- IHS Mccloskey Coal Group - USA
- Mintek Dendrill Indonesia
- Parliament of New Zealand
- Globalindo Alam Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Merrill Lynch Commodities Europe
- Neyveli Lignite Corporation Ltd, - India
- Dalmia Cement Bharat India
- Kideco Jaya Agung - Indonesia
- GVK Power & Infra Limited - India
- Indogreen Group - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- IEA Clean Coal Centre - UK
- Binh Thuan Hamico - Vietnam
- Malabar Cements Ltd - India
- Tamil Nadu electricity Board
- Gujarat Sidhee Cement - India
- New Zealand Coal & Carbon
- Straits Asia Resources Limited - Singapore
- Bulk Trading Sa - Switzerland
- Kobexindo Tractors - Indoneisa
- Formosa Plastics Group - Taiwan
- Sindya Power Generating Company Private Ltd
- Antam Resourcindo - Indonesia
- Edison Trading Spa - Italy
- Jorong Barutama Greston.PT - Indonesia
- Lanco Infratech Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Videocon Industries ltd - India
- European Bulk Services B.V. - Netherlands
- Intertek Mineral Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Commonwealth Bank - Australia
- Barasentosa Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Indonesian Coal Mining Association
- Sical Logistics Limited - India
- Petron Corporation, Philippines
- Bhatia International Limited - India
- South Luzon Thermal Energy Corporation
- TNB Fuel Sdn Bhd - Malaysia
- Attock Cement Pakistan Limited
- PowerSource Philippines DevCo
- Latin American Coal - Colombia
- Bangladesh Power Developement Board
- Oldendorff Carriers - Singapore
- Australian Coal Association
- Karaikal Port Pvt Ltd - India
- Heidelberg Cement - Germany
- Manunggal Multi Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sakthi Sugars Limited - India
- International Coal Ventures Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Baiduri Energy - Indonesia
- Altura Mining Limited, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Central Java Power - Indonesia
- LBH Netherlands Bv - Netherlands
- Agrawal Coal Company - India
- Kohat Cement Company Ltd. - Pakistan
- Bhushan Steel Limited - India
- PNOC Exploration Corporation - Philippines
- Ambuja Cements Ltd - India
- ASAPP Information Group - India
- Electricity Generating Authority of Thailand
- McConnell Dowell - Australia
- Uttam Galva Steels Limited - India
- San Jose City I Power Corp, Philippines
- Eastern Energy - Thailand
- Sarangani Energy Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Anglo American - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- India Bulls Power Limited - India
- Aditya Birla Group - India
- Medco Energi Mining Internasional
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Electricity Authority - India
- TeaM Sual Corporation - Philippines
- Independent Power Producers Association of India
- Pendopo Energi Batubara - Indonesia
- Indian Oil Corporation Limited
- Jindal Steel & Power Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Thai Mozambique Logistica
- PetroVietnam Power Coal Import and Supply Company
- VISA Power Limited - India
- Grasim Industreis Ltd - India
- Energy Link Ltd, New Zealand
- Vedanta Resources Plc - India
- Posco Energy - South Korea
- Riau Bara Harum - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Eastern Coal Council - USA
- Borneo Indobara - Indonesia
- Savvy Resources Ltd - HongKong
- Standard Chartered Bank - UAE
- Deloitte Consulting - India
- Meralco Power Generation, Philippines
- Ind-Barath Power Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Trasteel International SA, Italy
- Parry Sugars Refinery, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Star Paper Mills Limited - India
- SN Aboitiz Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jaiprakash Power Ventures ltd
- Vijayanagar Sugar Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Maharashtra Electricity Regulatory Commission - India
- The Treasury - Australian Government
- Krishnapatnam Port Company Ltd. - India
- PTC India Limited - India
- Bukit Makmur.PT - Indonesia
- Tata Chemicals Ltd - India
- London Commodity Brokers - England
- Ministry of Transport, Egypt
- CNBM International Corporation - China
- Bhoruka Overseas - Indonesia
- Xindia Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Vizag Seaport Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Siam City Cement PLC, Thailand
- Sojitz Corporation - Japan
- Energy Development Corp, Philippines
- MS Steel International - UAE
- Siam City Cement - Thailand
- Orica Mining Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Australian Commodity Traders Exchange
- ICICI Bank Limited - India
- Africa Commodities Group - South Africa
- Coalindo Energy - Indonesia
- Semirara Mining Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Indika Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Rashtriya Ispat Nigam Limited - India
- Cement Manufacturers Association - India
- Chettinad Cement Corporation Ltd - India
- Electricity Authority, New Zealand
- GMR Energy Limited - India
- Goldman Sachs - Singapore
- Toyota Tsusho Corporation, Japan
- Georgia Ports Authority, United States
- White Energy Company Limited
- The University of Queensland
- Port Waratah Coal Services - Australia
- Meenaskhi Energy Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Rio Tinto Coal - Australia
- Price Waterhouse Coopers - Russia
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Economic Council, Georgia
- Renaissance Capital - South Africa
- Wilmar Investment Holdings
- Wood Mackenzie - Singapore
- The State Trading Corporation of India Ltd
- Alfred C Toepfer International GmbH - Germany
- GAC Shipping (India) Pvt Ltd
- Mercuria Energy - Indonesia
- Interocean Group of Companies - India
- Carbofer General Trading SA - India
- Miang Besar Coal Terminal - Indonesia
- Planning Commission, India
- Makarim & Taira - Indonesia
- Singapore Mercantile Exchange
- SMG Consultants - Indonesia
- Simpson Spence & Young - Indonesia
- Minerals Council of Australia
- Salva Resources Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Coal and Oil Company - UAE
- Thiess Contractors Indonesia
- Gujarat Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- Sree Jayajothi Cements Limited - India
- Romanian Commodities Exchange
- Ministry of Finance - Indonesia
- Ministry of Mines - Canada
- Global Green Power PLC Corporation, Philippines
- Marubeni Corporation - India
- SMC Global Power, Philippines
- Indian Energy Exchange, India
- Indo Tambangraya Megah - Indonesia
- Samtan Co., Ltd - South Korea
- Kumho Petrochemical, South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Australia Pty. Ltd.
- Metalloyd Limited - United Kingdom
- Baramulti Group, Indonesia
- Timah Investasi Mineral - Indoneisa
- Power Finance Corporation Ltd., India
- Mercator Lines Limited - India
- Mjunction Services Limited - India
- Directorate Of Revenue Intelligence - India
- Banpu Public Company Limited - Thailand
- Global Business Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Chamber of Mines of South Africa
- Maheswari Brothers Coal Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
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