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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, 30 December 09
CHINA'S 2010 COAL DEMAND COULD RISE 4%-6%, ACCORDING TO CHINA SECURITIES JOURNAL
China, which is the world’s second-largest energy user, may consume between 4 and 6% more coal next year on continued economic growth, China S ...
Tuesday, 29 December 09
PROFIT IN COAL INDUSTRY DOWN 9.4% Y-O-Y IN JAN.- NOV.
In November, China's coal production was 289mln tons, up 26.3% year on year, an increase of 5.2% over last month. China's average daily trucks loa ...
Tuesday, 29 December 09
DHARMA HENWA EYES 20% REVENUE GROWTH
Local integrated mining services provider PT Dharma Henwa, which was earlier this year acquired by coal mining giant PT Bumi Resources, expects reve ...
Monday, 28 December 09
NEED TO IMPORT COAL COMES EARLY
Viet Nam may need to start importing coal as early as 2012, three years earlier than expected, to meet its electricity demands.
The Viet Nam Coal ...
Monday, 28 December 09
GOVT EYES $3.57B MINING, GEOTHERMAL INVESTMENT
The country can expect up to US$3.57 billion in investment in mining and geothermal energy next year, which would represent an increase by more than ...
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indika Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Marubeni Corporation - India
- Eastern Coal Council - USA
- Miang Besar Coal Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Star Paper Mills Limited - India
- Bangladesh Power Developement Board
- Maheswari Brothers Coal Limited - India
- Thai Mozambique Logistica
- Maharashtra Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- The State Trading Corporation of India Ltd
- Sree Jayajothi Cements Limited - India
- GAC Shipping (India) Pvt Ltd
- Commonwealth Bank - Australia
- Samtan Co., Ltd - South Korea
- Chamber of Mines of South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Barasentosa Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Anglo American - United Kingdom
- Global Coal Blending Company Limited - Australia
- VISA Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining and Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Coal and Oil Company - UAE
- Altura Mining Limited, Indonesia
- Latin American Coal - Colombia
- Petrochimia International Co. Ltd.- Taiwan
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
- PetroVietnam Power Coal Import and Supply Company
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- IHS Mccloskey Coal Group - USA
- Heidelberg Cement - Germany
- Rio Tinto Coal - Australia
- TeaM Sual Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Romanian Commodities Exchange
- Renaissance Capital - South Africa
- Sojitz Corporation - Japan
- CIMB Investment Bank - Malaysia
- European Bulk Services B.V. - Netherlands
- Baramulti Group, Indonesia
- PNOC Exploration Corporation - Philippines
- Electricity Authority, New Zealand
- Global Business Power Corporation, Philippines
- Medco Energi Mining Internasional
- Bank of Tokyo Mitsubishi UFJ Ltd
- Banpu Public Company Limited - Thailand
- Kumho Petrochemical, South Korea
- Iligan Light & Power Inc, Philippines
- Bharathi Cement Corporation - India
- PowerSource Philippines DevCo
- India Bulls Power Limited - India
- Coastal Gujarat Power Limited - India
- Toyota Tsusho Corporation, Japan
- Attock Cement Pakistan Limited
- Kobexindo Tractors - Indoneisa
- Power Finance Corporation Ltd., India
- The Treasury - Australian Government
- Kalimantan Lumbung Energi - Indonesia
- Mercator Lines Limited - India
- Videocon Industries ltd - India
- IEA Clean Coal Centre - UK
- Bhushan Steel Limited - India
- Merrill Lynch Commodities Europe
- Deloitte Consulting - India
- Essar Steel Hazira Ltd - India
- Singapore Mercantile Exchange
- Eastern Energy - Thailand
- The University of Queensland
- Petron Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Ministry of Transport, Egypt
- Bahari Cakrawala Sebuku - Indonesia
- Kartika Selabumi Mining - Indonesia
- Uttam Galva Steels Limited - India
- Madhucon Powers Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- PTC India Limited - India
- Mjunction Services Limited - India
- Indian Energy Exchange, India
- Bulk Trading Sa - Switzerland
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Australian Coal Association
- OPG Power Generation Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Jorong Barutama Greston.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Alfred C Toepfer International GmbH - Germany
- Vedanta Resources Plc - India
- Cement Manufacturers Association - India
- Karbindo Abesyapradhi - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Price Waterhouse Coopers - Russia
- Holcim Trading Pte Ltd - Singapore
- Sindya Power Generating Company Private Ltd
- Posco Energy - South Korea
- Standard Chartered Bank - UAE
- Grasim Industreis Ltd - India
- Siam City Cement PLC, Thailand
- Electricity Generating Authority of Thailand
- Timah Investasi Mineral - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jaiprakash Power Ventures ltd
- Indogreen Group - Indonesia
- MS Steel International - UAE
- Ministry of Mines - Canada
- Chettinad Cement Corporation Ltd - India
- New Zealand Coal & Carbon
- Riau Bara Harum - Indonesia
- Central Electricity Authority - India
- Edison Trading Spa - Italy
- Aditya Birla Group - India
- GMR Energy Limited - India
- Straits Asia Resources Limited - Singapore
- Ministry of Finance - Indonesia
- Makarim & Taira - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Tamil Nadu electricity Board
- Orica Mining Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Sakthi Sugars Limited - India
- Vizag Seaport Private Limited - India
- Minerals Council of Australia
- Directorate Of Revenue Intelligence - India
- Simpson Spence & Young - Indonesia
- Indonesian Coal Mining Association
- Bukit Asam (Persero) Tbk - Indonesia
- ICICI Bank Limited - India
- Kaltim Prima Coal - Indonesia
- Energy Link Ltd, New Zealand
- Georgia Ports Authority, United States
- Trasteel International SA, Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Oil Corporation Limited
- Bhoruka Overseas - Indonesia
- Bukit Baiduri Energy - Indonesia
- Wilmar Investment Holdings
- Bhatia International Limited - India
- Tata Chemicals Ltd - India
- Karaikal Port Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Malabar Cements Ltd - India
- Africa Commodities Group - South Africa
- Larsen & Toubro Limited - India
- Thiess Contractors Indonesia
- Bukit Makmur.PT - Indonesia
- Independent Power Producers Association of India
- Rashtriya Ispat Nigam Limited - India
- Bayan Resources Tbk. - Indonesia
- Coalindo Energy - Indonesia
- Planning Commission, India
- Borneo Indobara - Indonesia
- Siam City Cement - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ambuja Cements Ltd - India
- Parliament of New Zealand
- South Luzon Thermal Energy Corporation
- Sical Logistics Limited - India
- Formosa Plastics Group - Taiwan
- CNBM International Corporation - China
- GVK Power & Infra Limited - India
- SMG Consultants - Indonesia
- Economic Council, Georgia
- Savvy Resources Ltd - HongKong
- Australian Commodity Traders Exchange
- Salva Resources Pvt Ltd - India
- Mercuria Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Sarangani Energy Corporation, Philippines
- Interocean Group of Companies - India
- Vijayanagar Sugar Pvt Ltd - India
- White Energy Company Limited
- Mintek Dendrill Indonesia
- Meenaskhi Energy Private Limited - India
- Wood Mackenzie - Singapore
- Oldendorff Carriers - Singapore
- Xindia Steels Limited - India
- Goldman Sachs - Singapore
- Meralco Power Generation, Philippines
- Lanco Infratech Ltd - India
- Energy Development Corp, Philippines
- Central Java Power - Indonesia
- Global Green Power PLC Corporation, Philippines
- Antam Resourcindo - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Ind-Barath Power Infra Limited - India
- ASAPP Information Group - India
- Parry Sugars Refinery, India
- Jindal Steel & Power Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- London Commodity Brokers - England
- Agrawal Coal Company - India
- Carbofer General Trading SA - India
- Dalmia Cement Bharat India
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