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