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Monday, 23 November 09
INDONESIA MINING RULE THREATENS INVESTMENT DRIVE
 A new Indonesian mining rule, limiting contract work that can be outsourced and favouring local players, is shaping up as a new blow to plans to boost mining investment in Southeast Asia's biggest economy.
The rule, attached to a mining law passed last year, presents an immediate challenge for new energy and mining minister Darwin Saleh, who was sworn in last month amid hopes that a new government could boost the resources sector.
The mining law, which replaced one issued 41 years ago, aims to squeeze more benefits from rich mineral reserves in Indonesia, the world's top exporter of tin and thermal coal and a key producer of zinc, copper, nickel and gold.
But Indonesia has seen little new foreign investment in metal mining in recent years and the energy and mining ministry's new rules seems likely to dampen enthusiasm among potential investors.
"It will increase costs for miners because they have to buy their own equipment and hire new people," said Priyo Pribadi Soemarno of the Indonesian Mining Association.
To contain costs, most mining firms in Indonesia, particularly coal firms, rely on contractors for work ranging from actual mining to stockpiling of minerals.
But the new regulation limits contractors to stripping away top soil and transporting mining products, while the miner itself has to extract minerals.
The move would encourage inefficiency and was out of step with global trends, said Soemarno, the executive director of the mining group. "Mining companies globally are trying to slim down their organisations," he said.
Former Mining and Energy Minister Purnomo Yusgiantoro signed the new regulation at the end of September.
His successor, a suprise pick in President Susilo Bambang Yudhoyono's cabinet last month, has not publicly commented on it and little is known of his policy stance.
Indonesia has struggled to lure foreign investment into mining in recent years, compounded by some politicians taking a nationalist line on resource exploitation and also because of uncertainty over regulations.
Major global resource firms operating in Indonesia include Freeport-McMoRan Copper & Gold Inc and Newmont Mining Corp, but much of the investment was made decades ago.
Investment in mining, including coal and geothermal, rose to $1.65 billion in 2008 from $1 billion in 2004 but mostly came from existing miners rather than new entrants.
Some foreign firms have already shelved investment plans since last year, partly due to uncertainties over the new mining law, which also includes contentious items such as shorter-term mining permits rather than longer-term contracts of work.
Miners will also have to process minerals in Indonesia and to set aside some of their coal for the domestic market.
COAL MINERS TO SUFFER MOST
The new mining services rule limits miners' use of contractors, and when allowed to use one, they must give a local contractor first preference and need the energy ministry's permission to hire affiliates.
David Kiu, an analyst at Eurasia Group, said the new rule was mainly aimed at curtailing transfer pricing, a practice rife in Indonesian mining, by which firms in the same group sell to each other at artificial prices to avoid taxes.
The new regulation applies immediately to new mining projects but allows existing miners a term of three years to adjust.
The regulation will have a bigger impact on coal producers, since they tend to use mining contractors for nearly all their mining activities, some experts said.
PT Adaro Energy Tbk, Indonesia's largest coal miner by market value, and PT Berau Coal, the fifth-biggest by volume, currently outsource their entire mining activities.
Sacha Winzenried, a mining partner at PricewaterhouseCoopers Indonesia, said coal companies would have to do more themselves and weigh up local contractors over foreigners.
"This will result in increased expenditures on capital equipment," Winzenried said.
Miners whose affiliates carry out mining activities might need to restructure their businesses after the end of the exemption period, he added.
"It's either by merging the contract mining business with the mining company or transferring the assets, or selling-off the contract mining altogether," Winzenried said.
Companies are still assesing the cost impact, although rating agency Fitch said it did not see negative rating implications for firms it covers including PT Adaro Indonesia and PT Indika Energy Tbk
But an executive at a top coal firm, who declined to be identified, said the regulation would significantly increase the requirements for capital, possibly limiting expansion.
"By employing contractors, this limits the capital requirements for heavy equipment and therefore we can expand faster."
The Indonesian Mining Association fears mining investment could fall below $1 billion this year due to uncertainty over the new law, although the government has said investment from mining -- including geothermal -- could surpass $2 billion.
Last year, mining giant BHP Billiton scrapped a study to develop an integrated nickel project in eastern Indonesia and decided not to go ahead with a coal mine in Central Kalimantan. Tsingshan Mineral Company Ltd had scrapped a $500 million nickel project in North Maluku in Indonesia.
"If the regulation is not amended, new investors will think over before investing because it will increase costs and not every mining company is capable of increasing their investment," said Soemarno of the Indonesia Mining Association.
Source: Reuters / Alibaba
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Wednesday, 06 January 10
SAS 2009 COAL EXPORTS THROUGH RBCT FLAT AT 61MT
Exports through South Africa’s Richards Bay Coal Terminal (RBCT) remained flat in 2009, as the terminal faced “critical business challen ...
Wednesday, 06 January 10
BUMI SHARES UP AS OVERALL PERFORMANCE BEATS PREDICTIONS
The world’s largest thermal coal exporter PT Bumi Resources saw its shares jump 10 percent to Rp 2,675 ($29 US cents) on Tuesday after the com ...
Wednesday, 06 January 10
INDIA MAY HAVE BECOME TOP BUYER OF SOUTH AFRICAN COAL
India may have overtaken Europe for the first time as the biggest purchaser of South African coal in 2009, according to Raymond Chirwa, Richards Bay ...
Wednesday, 06 January 10
COAL PEAK RECEDES INTO THE FAR DISTANCE
COALspot.com (German): Coal will be available to mankind as an energy source for the next 120 years.
The German Coal Importer Association has ca ...
Tuesday, 05 January 10
SUPRAMAX MARKET REMAINED QUIET OVER THE LAST 10 DAYS BRS - DRY BULK
Despite a damp end to the year for bulk rates, shipping has weathered the storm far better than was initially expected in the wake of the financ ...
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- Aditya Birla Group - India
- Bukit Makmur.PT - Indonesia
- Australian Commodity Traders Exchange
- Standard Chartered Bank - UAE
- Deloitte Consulting - India
- TeaM Sual Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GMR Energy Limited - India
- Ministry of Mines - Canada
- SN Aboitiz Power Inc, Philippines
- Ambuja Cements Ltd - India
- Bukit Baiduri Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Gujarat Sidhee Cement - India
- Xindia Steels Limited - India
- Lanco Infratech Ltd - India
- Global Business Power Corporation, Philippines
- Economic Council, Georgia
- Thai Mozambique Logistica
- Siam City Cement PLC, Thailand
- Energy Link Ltd, New Zealand
- International Coal Ventures Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Banpu Public Company Limited - Thailand
- White Energy Company Limited
- Price Waterhouse Coopers - Russia
- Power Finance Corporation Ltd., India
- Kapuas Tunggal Persada - Indonesia
- Merrill Lynch Commodities Europe
- Bulk Trading Sa - Switzerland
- PNOC Exploration Corporation - Philippines
- Africa Commodities Group - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- Kideco Jaya Agung - Indonesia
- OPG Power Generation Pvt Ltd - India
- Attock Cement Pakistan Limited
- Central Electricity Authority - India
- Meenaskhi Energy Private Limited - India
- Tamil Nadu electricity Board
- Krishnapatnam Port Company Ltd. - India
- Coastal Gujarat Power Limited - India
- Chamber of Mines of South Africa
- Borneo Indobara - Indonesia
- Orica Mining Services - Indonesia
- Latin American Coal - Colombia
- Salva Resources Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Siam City Cement - Thailand
- Heidelberg Cement - Germany
- Electricity Authority, New Zealand
- PowerSource Philippines DevCo
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Transport, Egypt
- Madhucon Powers Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Indo Tambangraya Megah - Indonesia
- Maheswari Brothers Coal Limited - India
- Larsen & Toubro Limited - India
- Eastern Energy - Thailand
- Thiess Contractors Indonesia
- Barasentosa Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Minerals Council of Australia
- Vijayanagar Sugar Pvt Ltd - India
- CNBM International Corporation - China
- Kaltim Prima Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- ICICI Bank Limited - India
- Essar Steel Hazira Ltd - India
- Samtan Co., Ltd - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Goldman Sachs - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Oldendorff Carriers - Singapore
- European Bulk Services B.V. - Netherlands
- McConnell Dowell - Australia
- Straits Asia Resources Limited - Singapore
- IHS Mccloskey Coal Group - USA
- New Zealand Coal & Carbon
- Riau Bara Harum - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Development Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Rio Tinto Coal - Australia
- Aboitiz Power Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Makarim & Taira - Indonesia
- Ministry of Finance - Indonesia
- Dalmia Cement Bharat India
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- San Jose City I Power Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- PTC India Limited - India
- Simpson Spence & Young - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- Mintek Dendrill Indonesia
- Petron Corporation, Philippines
- India Bulls Power Limited - India
- Indian Oil Corporation Limited
- Therma Luzon, Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Kobexindo Tractors - Indoneisa
- VISA Power Limited - India
- Planning Commission, India
- Pipit Mutiara Jaya. PT, Indonesia
- Globalindo Alam Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Ind-Barath Power Infra Limited - India
- Bhushan Steel Limited - India
- Singapore Mercantile Exchange
- Bhoruka Overseas - Indonesia
- Grasim Industreis Ltd - India
- Indogreen Group - Indonesia
- Cigading International Bulk Terminal - Indonesia
- IEA Clean Coal Centre - UK
- Marubeni Corporation - India
- Karaikal Port Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Binh Thuan Hamico - Vietnam
- Timah Investasi Mineral - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Renaissance Capital - South Africa
- Manunggal Multi Energi - Indonesia
- Tata Chemicals Ltd - India
- Malabar Cements Ltd - India
- Videocon Industries ltd - India
- Commonwealth Bank - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercuria Energy - Indonesia
- Sical Logistics Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Georgia Ports Authority, United States
- Jorong Barutama Greston.PT - Indonesia
- SMG Consultants - Indonesia
- Sakthi Sugars Limited - India
- The State Trading Corporation of India Ltd
- Semirara Mining Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- ASAPP Information Group - India
- Cement Manufacturers Association - India
- Carbofer General Trading SA - India
- Sree Jayajothi Cements Limited - India
- Star Paper Mills Limited - India
- Intertek Mineral Services - Indonesia
- London Commodity Brokers - England
- Mercator Lines Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Wood Mackenzie - Singapore
- Orica Australia Pty. Ltd.
- Port Waratah Coal Services - Australia
- Posco Energy - South Korea
- Holcim Trading Pte Ltd - Singapore
- Wilmar Investment Holdings
- Semirara Mining and Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Mjunction Services Limited - India
- Indika Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Gujarat Mineral Development Corp Ltd - India
- Antam Resourcindo - Indonesia
- Australian Coal Association
- Parliament of New Zealand
- Parry Sugars Refinery, India
- Indonesian Coal Mining Association
- Interocean Group of Companies - India
- GN Power Mariveles Coal Plant, Philippines
- Sojitz Corporation - Japan
- The Treasury - Australian Government
- Bhatia International Limited - India
- Romanian Commodities Exchange
- Bharathi Cement Corporation - India
- Edison Trading Spa - Italy
- Central Java Power - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Vizag Seaport Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- South Luzon Thermal Energy Corporation
- Coalindo Energy - Indonesia
- Altura Mining Limited, Indonesia
- Sinarmas Energy and Mining - Indonesia
- SMC Global Power, Philippines
- Vedanta Resources Plc - India
- Directorate Of Revenue Intelligence - India
- Jaiprakash Power Ventures ltd
- The University of Queensland
- Formosa Plastics Group - Taiwan
- Agrawal Coal Company - India
- Billiton Holdings Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Trasteel International SA, Italy
- Baramulti Group, Indonesia
- Electricity Generating Authority of Thailand
- Indian Energy Exchange, India
- MS Steel International - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Coal Council - USA
- Kumho Petrochemical, South Korea
- Independent Power Producers Association of India
- GVK Power & Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- Anglo American - United Kingdom
- Sarangani Energy Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Medco Energi Mining Internasional
- Bangladesh Power Developement Board
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