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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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Thursday, 31 December 09
YANDICOOGINA BECOMES FIRST MINE IN AUSTRALIA TO PRODUCE 50 MILLION TONNES A YEAR
COALspot.com Press Release: Rio Tinto's Yandicoogina, Australia's largest-producing iron ore mine, has broken the 50 million tonne mark for annual ...
Wednesday, 30 December 09
INDIA CEMENTS TO FINALIZE 3 SHIPMENTS OF SOUTH AFRICAN COAL NEXT WEEK
COALspot.com (India): India Cements is looking for 3 shipments (150,000MT) of South African coal for January – March 2010 delivery on C ...
Wednesday, 30 December 09
BANPU EXPECTS STABLE COAL PRICES
2009 revenue growth will be hard to beat
Banpu Plc, Asean's largest coal miner, expects coal prices to stay firm at about US$80 per tonne in the f ...
Wednesday, 30 December 09
CIL DELISTS JAGUAR ENERGY FOR KODA LINKS
Coal India Ltd (CIL) has dropped Indonesia-based Jaguar Energy & Power Ltd from the list of companies, it intended to forge partnerships with to ...
Wednesday, 30 December 09
COAL PRICE RISE REQUEST DENIED
A proposal by the Viet Nam National Coal and Mineral Industries Group to double the price of coal has been turned down by the Ministry of Industry a ...
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- Renaissance Capital - South Africa
- Bangladesh Power Developement Board
- Indo Tambangraya Megah - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Antam Resourcindo - Indonesia
- Kumho Petrochemical, South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Baramulti Group, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Meenaskhi Energy Private Limited - India
- Posco Energy - South Korea
- Global Business Power Corporation, Philippines
- Australian Coal Association
- Malabar Cements Ltd - India
- Chamber of Mines of South Africa
- Barasentosa Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Commonwealth Bank - Australia
- South Luzon Thermal Energy Corporation
- Goldman Sachs - Singapore
- London Commodity Brokers - England
- GAC Shipping (India) Pvt Ltd
- Kepco SPC Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- The State Trading Corporation of India Ltd
- Siam City Cement PLC, Thailand
- Edison Trading Spa - Italy
- Mercuria Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Cigading International Bulk Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Standard Chartered Bank - UAE
- Bhatia International Limited - India
- Iligan Light & Power Inc, Philippines
- Cement Manufacturers Association - India
- Orica Australia Pty. Ltd.
- Economic Council, Georgia
- Mercator Lines Limited - India
- MS Steel International - UAE
- Thiess Contractors Indonesia
- Krishnapatnam Port Company Ltd. - India
- Makarim & Taira - Indonesia
- Indian Energy Exchange, India
- Sical Logistics Limited - India
- Salva Resources Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Merrill Lynch Commodities Europe
- European Bulk Services B.V. - Netherlands
- Vedanta Resources Plc - India
- Grasim Industreis Ltd - India
- Intertek Mineral Services - Indonesia
- Tata Chemicals Ltd - India
- Indonesian Coal Mining Association
- CNBM International Corporation - China
- Oldendorff Carriers - Singapore
- Central Java Power - Indonesia
- Aditya Birla Group - India
- SMG Consultants - Indonesia
- Directorate Of Revenue Intelligence - India
- Energy Link Ltd, New Zealand
- SMC Global Power, Philippines
- Bhoruka Overseas - Indonesia
- Kideco Jaya Agung - Indonesia
- PTC India Limited - India
- Eastern Energy - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karbindo Abesyapradhi - Indoneisa
- Interocean Group of Companies - India
- Borneo Indobara - Indonesia
- Bukit Makmur.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Tamil Nadu electricity Board
- Jaiprakash Power Ventures ltd
- Karaikal Port Pvt Ltd - India
- Romanian Commodities Exchange
- Australian Commodity Traders Exchange
- Indika Energy - Indonesia
- Anglo American - United Kingdom
- IEA Clean Coal Centre - UK
- Deloitte Consulting - India
- Bulk Trading Sa - Switzerland
- Bahari Cakrawala Sebuku - Indonesia
- Orica Mining Services - Indonesia
- Coastal Gujarat Power Limited - India
- Sojitz Corporation - Japan
- Independent Power Producers Association of India
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- Georgia Ports Authority, United States
- Parliament of New Zealand
- Straits Asia Resources Limited - Singapore
- Holcim Trading Pte Ltd - Singapore
- Parry Sugars Refinery, India
- Uttam Galva Steels Limited - India
- Attock Cement Pakistan Limited
- Marubeni Corporation - India
- Wood Mackenzie - Singapore
- ASAPP Information Group - India
- Planning Commission, India
- Toyota Tsusho Corporation, Japan
- Formosa Plastics Group - Taiwan
- Kartika Selabumi Mining - Indonesia
- Port Waratah Coal Services - Australia
- Ministry of Transport, Egypt
- Timah Investasi Mineral - Indoneisa
- Sindya Power Generating Company Private Ltd
- Indogreen Group - Indonesia
- Bharathi Cement Corporation - India
- India Bulls Power Limited - India
- Kaltim Prima Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Larsen & Toubro Limited - India
- CIMB Investment Bank - Malaysia
- Gujarat Sidhee Cement - India
- Minerals Council of Australia
- Trasteel International SA, Italy
- Rio Tinto Coal - Australia
- Binh Thuan Hamico - Vietnam
- The University of Queensland
- Price Waterhouse Coopers - Russia
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Medco Energi Mining Internasional
- Star Paper Mills Limited - India
- Therma Luzon, Inc, Philippines
- Petron Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Madhucon Powers Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Metalloyd Limited - United Kingdom
- PNOC Exploration Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Singapore Mercantile Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Mines - Canada
- Ambuja Cements Ltd - India
- Coal and Oil Company - UAE
- Neyveli Lignite Corporation Ltd, - India
- GN Power Mariveles Coal Plant, Philippines
- Mjunction Services Limited - India
- Siam City Cement - Thailand
- LBH Netherlands Bv - Netherlands
- Indian Oil Corporation Limited
- Jindal Steel & Power Ltd - India
- Videocon Industries ltd - India
- White Energy Company Limited
- Gujarat Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Pendopo Energi Batubara - Indonesia
- Riau Bara Harum - Indonesia
- IHS Mccloskey Coal Group - USA
- Ind-Barath Power Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Africa Commodities Group - South Africa
- Sarangani Energy Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Xindia Steels Limited - India
- Eastern Coal Council - USA
- Global Green Power PLC Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Sinarmas Energy and Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Heidelberg Cement - Germany
- ICICI Bank Limited - India
- Thai Mozambique Logistica
- Dalmia Cement Bharat India
- Bayan Resources Tbk. - Indonesia
- The Treasury - Australian Government
- Coalindo Energy - Indonesia
- VISA Power Limited - India
- Latin American Coal - Colombia
- TeaM Sual Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Leighton Contractors Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Meralco Power Generation, Philippines
- Banpu Public Company Limited - Thailand
- GMR Energy Limited - India
- PowerSource Philippines DevCo
- Electricity Generating Authority of Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- New Zealand Coal & Carbon
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Carbofer General Trading SA - India
- Ceylon Electricity Board - Sri Lanka
- Kalimantan Lumbung Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Sakthi Sugars Limited - India
- Bhushan Steel Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Central Electricity Authority - India
- Mintek Dendrill Indonesia
- Electricity Authority, New Zealand
- GVK Power & Infra Limited - India
- McConnell Dowell - Australia
- Vizag Seaport Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- Lanco Infratech Ltd - India
- Simpson Spence & Young - Indonesia
- Savvy Resources Ltd - HongKong
- Agrawal Coal Company - India
- Asmin Koalindo Tuhup - Indonesia
- SN Aboitiz Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Finance - Indonesia
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