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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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Saturday, 24 December 11
CHINAS LEVEL OF GROWTH TO DETERMINE COURSE OF DRY BULK MARKET IN 2012 SAYS SHIPBROKER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest report, shipbroker Intermodal attempted to find a silver lining in the tough year that was 2011, as well as what one could expect from ...
Friday, 23 December 11
SPOT PACIFIC CAPESIZE VESSELS HAVE COMMANDED HIGH PREMIUMS - FEARNLEYS
Handy
Rates in the Atlantic kept stable from last week, with a touch of negativity closer to the end. Less spot cargoes seen, and owners are ...
Friday, 23 December 11
CONTENTIOUS ISSUES IN CONTRACT RENEGOTIATION - THE JAKARTA POST
The government has been renegotiating mining contracts, especially those 30-40 years old, with almost all mining companies, including PT Freeport In ...
Friday, 23 December 11
LANCO JOINS HANDS WITH BUKIT ASAM FOR INDONESIAN POWER PROJECT
COALspot.com - PT Tambang Batubara Bukit Asam, Indonesia's state owned coal miner and Indian based Lanco Infratech Ltd plans to build steam power p ...
Thursday, 22 December 11
RI WILL NOT PLAY CATCH-UP WITH GLOBAL COAL DEMAND - THE JAKARTA POST
The Jakarta Post reported that, the International Energy Agency (IEA) has predicted in its Coal Market Report 2011 that over the next five years, gl ...
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- GMR Energy Limited - India
- Bhoruka Overseas - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Energy Link Ltd, New Zealand
- Indika Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Videocon Industries ltd - India
- Indonesian Coal Mining Association
- Cigading International Bulk Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- Global Business Power Corporation, Philippines
- Carbofer General Trading SA - India
- Kobexindo Tractors - Indoneisa
- Baramulti Group, Indonesia
- Oldendorff Carriers - Singapore
- The State Trading Corporation of India Ltd
- Meenaskhi Energy Private Limited - India
- Salva Resources Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Thai Mozambique Logistica
- Bukit Baiduri Energy - Indonesia
- India Bulls Power Limited - India
- Simpson Spence & Young - Indonesia
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- Australian Coal Association
- Globalindo Alam Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Orica Australia Pty. Ltd.
- Global Green Power PLC Corporation, Philippines
- London Commodity Brokers - England
- AsiaOL BioFuels Corp., Philippines
- GN Power Mariveles Coal Plant, Philippines
- Mintek Dendrill Indonesia
- Africa Commodities Group - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- IEA Clean Coal Centre - UK
- Pendopo Energi Batubara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement - Thailand
- Anglo American - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- Standard Chartered Bank - UAE
- Edison Trading Spa - Italy
- Price Waterhouse Coopers - Russia
- Port Waratah Coal Services - Australia
- Sree Jayajothi Cements Limited - India
- Rio Tinto Coal - Australia
- Independent Power Producers Association of India
- Formosa Plastics Group - Taiwan
- Coal and Oil Company - UAE
- Kumho Petrochemical, South Korea
- Madhucon Powers Ltd - India
- Bayan Resources Tbk. - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement PLC, Thailand
- Energy Development Corp, Philippines
- Riau Bara Harum - Indonesia
- Attock Cement Pakistan Limited
- Altura Mining Limited, Indonesia
- Romanian Commodities Exchange
- Tata Chemicals Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Bhushan Steel Limited - India
- San Jose City I Power Corp, Philippines
- Lanco Infratech Ltd - India
- Parry Sugars Refinery, India
- The Treasury - Australian Government
- Therma Luzon, Inc, Philippines
- Goldman Sachs - Singapore
- GAC Shipping (India) Pvt Ltd
- Coastal Gujarat Power Limited - India
- Ambuja Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- Interocean Group of Companies - India
- Commonwealth Bank - Australia
- Jaiprakash Power Ventures ltd
- Electricity Authority, New Zealand
- Bangladesh Power Developement Board
- Indian Energy Exchange, India
- Krishnapatnam Port Company Ltd. - India
- Global Coal Blending Company Limited - Australia
- PTC India Limited - India
- Marubeni Corporation - India
- Rashtriya Ispat Nigam Limited - India
- European Bulk Services B.V. - Netherlands
- Sojitz Corporation - Japan
- Chettinad Cement Corporation Ltd - India
- McConnell Dowell - Australia
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Transport, Egypt
- Indogreen Group - Indonesia
- Sakthi Sugars Limited - India
- Planning Commission, India
- SN Aboitiz Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- Eastern Energy - Thailand
- Trasteel International SA, Italy
- Sinarmas Energy and Mining - Indonesia
- ICICI Bank Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- CNBM International Corporation - China
- Malabar Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Singapore Mercantile Exchange
- Kaltim Prima Coal - Indonesia
- Petron Corporation, Philippines
- Economic Council, Georgia
- Ministry of Finance - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Xindia Steels Limited - India
- Tamil Nadu electricity Board
- Sical Logistics Limited - India
- Meralco Power Generation, Philippines
- Vizag Seaport Private Limited - India
- The University of Queensland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mjunction Services Limited - India
- Iligan Light & Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Ministry of Mines - Canada
- Intertek Mineral Services - Indonesia
- Grasim Industreis Ltd - India
- Directorate Of Revenue Intelligence - India
- Cement Manufacturers Association - India
- Kalimantan Lumbung Energi - Indonesia
- Bhatia International Limited - India
- Orica Mining Services - Indonesia
- Minerals Council of Australia
- PetroVietnam Power Coal Import and Supply Company
- South Luzon Thermal Energy Corporation
- Chamber of Mines of South Africa
- Antam Resourcindo - Indonesia
- Gujarat Sidhee Cement - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GVK Power & Infra Limited - India
- Latin American Coal - Colombia
- Bharathi Cement Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Indian Oil Corporation Limited
- Merrill Lynch Commodities Europe
- Kapuas Tunggal Persada - Indonesia
- Mercator Lines Limited - India
- Renaissance Capital - South Africa
- Eastern Coal Council - USA
- Indo Tambangraya Megah - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TNB Fuel Sdn Bhd - Malaysia
- Metalloyd Limited - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- MS Steel International - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Aboitiz Power Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Star Paper Mills Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- Maheswari Brothers Coal Limited - India
- Central Electricity Authority - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Makarim & Taira - Indonesia
- Mercuria Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Power Finance Corporation Ltd., India
- Wood Mackenzie - Singapore
- White Energy Company Limited
- Deloitte Consulting - India
- Barasentosa Lestari - Indonesia
- Parliament of New Zealand
- Vedanta Resources Plc - India
- LBH Netherlands Bv - Netherlands
- SMC Global Power, Philippines
- Posco Energy - South Korea
- TeaM Sual Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- IHS Mccloskey Coal Group - USA
- Gujarat Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Central Java Power - Indonesia
- New Zealand Coal & Carbon
- Banpu Public Company Limited - Thailand
- Coalindo Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Medco Energi Mining Internasional
- Bukit Asam (Persero) Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- Karaikal Port Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Georgia Ports Authority, United States
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Billiton Holdings Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Sindya Power Generating Company Private Ltd
- Uttam Galva Steels Limited - India
- VISA Power Limited - India
- Bukit Makmur.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- Aditya Birla Group - India
- SMG Consultants - Indonesia
- Dalmia Cement Bharat India
- Kohat Cement Company Ltd. - Pakistan
- Offshore Bulk Terminal Pte Ltd, Singapore
- ASAPP Information Group - India
- Agrawal Coal Company - India
- Samtan Co., Ltd - South Korea
- Borneo Indobara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Electricity Generating Authority of Thailand
- Wilmar Investment Holdings
- Heidelberg Cement - Germany
- Australian Commodity Traders Exchange
- Kepco SPC Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Thiess Contractors Indonesia
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