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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, 24 December 09
DRY BULK CHARTERING - SHIPPING UPDATE
Handy
Continued firm conditions for the Handymax / Supramax market in the Atlantic despite the BSI´s downward trend. As chrs scramble to cov ...
Thursday, 24 December 09
EUROSEAS LTD. ANNOUNCES TWO-YEAR TIME CHARTER AGREEMENT FOR PANAMAX BULK CARRIER
Euroseas Ltd., an owner and operator of drybulk carriers and container vessels and provider of seaborne transportation for dry bulk and containerize ...
Wednesday, 23 December 09
INDONESIA POWER CHIEF TO BUILD PLANTS OUTSIDE JAVA
Indonesia's state electricity firm plans to build new power plants outside Java island with a combined capacity of around 2,000 megawatts to resolv ...
Wednesday, 23 December 09
BUKIT ASAM SEES CHINA COAL DEMAND BOOST
* Rebound in prices to have pushed up 2009 revs
* To more than double Tarahan port capacity
Reuters reported that, Indonesian state-owned coal m ...
Wednesday, 23 December 09
MACARTHUR COAL OFFERS TO BUY RIVAL GLOUCESTER
Queensland-based Macarthur Coal will offer to buy fellow Australian Gloucester Coal, in a move to add two new mines and increase coal resources.
...
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- Petrochimia International Co. Ltd.- Taiwan
- Metalloyd Limited - United Kingdom
- Ambuja Cements Ltd - India
- MS Steel International - UAE
- Thai Mozambique Logistica
- Binh Thuan Hamico - Vietnam
- Mercuria Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Attock Cement Pakistan Limited
- Aditya Birla Group - India
- Gujarat Sidhee Cement - India
- Directorate Of Revenue Intelligence - India
- Ministry of Mines - Canada
- Rio Tinto Coal - Australia
- Directorate General of MIneral and Coal - Indonesia
- Power Finance Corporation Ltd., India
- Bharathi Cement Corporation - India
- McConnell Dowell - Australia
- Larsen & Toubro Limited - India
- Billiton Holdings Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Vedanta Resources Plc - India
- Maheswari Brothers Coal Limited - India
- Mjunction Services Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Agrawal Coal Company - India
- IHS Mccloskey Coal Group - USA
- Minerals Council of Australia
- Alfred C Toepfer International GmbH - Germany
- Bangladesh Power Developement Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Global Coal Blending Company Limited - Australia
- Aboitiz Power Corporation - Philippines
- Barasentosa Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Banpu Public Company Limited - Thailand
- Makarim & Taira - Indonesia
- Anglo American - United Kingdom
- Kaltim Prima Coal - Indonesia
- Mercator Lines Limited - India
- Sical Logistics Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Posco Energy - South Korea
- TeaM Sual Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Commonwealth Bank - Australia
- Manunggal Multi Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Wilmar Investment Holdings
- Sindya Power Generating Company Private Ltd
- Samtan Co., Ltd - South Korea
- Lanco Infratech Ltd - India
- Bayan Resources Tbk. - Indonesia
- Australian Coal Association
- CNBM International Corporation - China
- White Energy Company Limited
- Wood Mackenzie - Singapore
- Sree Jayajothi Cements Limited - India
- Port Waratah Coal Services - Australia
- Straits Asia Resources Limited - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Medco Energi Mining Internasional
- Heidelberg Cement - Germany
- Indian Oil Corporation Limited
- GVK Power & Infra Limited - India
- Altura Mining Limited, Indonesia
- Salva Resources Pvt Ltd - India
- SMG Consultants - Indonesia
- Bulk Trading Sa - Switzerland
- IEA Clean Coal Centre - UK
- Standard Chartered Bank - UAE
- Bhatia International Limited - India
- Indonesian Coal Mining Association
- Leighton Contractors Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Intertek Mineral Services - Indonesia
- Sakthi Sugars Limited - India
- Bukit Baiduri Energy - Indonesia
- Thiess Contractors Indonesia
- Interocean Group of Companies - India
- Jaiprakash Power Ventures ltd
- Siam City Cement - Thailand
- Economic Council, Georgia
- Singapore Mercantile Exchange
- Chamber of Mines of South Africa
- Toyota Tsusho Corporation, Japan
- Ministry of Finance - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Tata Chemicals Ltd - India
- London Commodity Brokers - England
- Trasteel International SA, Italy
- Electricity Authority, New Zealand
- Meenaskhi Energy Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- Georgia Ports Authority, United States
- OPG Power Generation Pvt Ltd - India
- Star Paper Mills Limited - India
- Sojitz Corporation - Japan
- Merrill Lynch Commodities Europe
- Kohat Cement Company Ltd. - Pakistan
- Renaissance Capital - South Africa
- LBH Netherlands Bv - Netherlands
- Energy Link Ltd, New Zealand
- Savvy Resources Ltd - HongKong
- Sinarmas Energy and Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Meralco Power Generation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- ASAPP Information Group - India
- The State Trading Corporation of India Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Marubeni Corporation - India
- Parliament of New Zealand
- Ind-Barath Power Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- CIMB Investment Bank - Malaysia
- Parry Sugars Refinery, India
- Independent Power Producers Association of India
- Videocon Industries ltd - India
- Coastal Gujarat Power Limited - India
- Central Electricity Authority - India
- GMR Energy Limited - India
- Ceylon Electricity Board - Sri Lanka
- Kapuas Tunggal Persada - Indonesia
- Carbofer General Trading SA - India
- AsiaOL BioFuels Corp., Philippines
- Ministry of Transport, Egypt
- Rashtriya Ispat Nigam Limited - India
- Karaikal Port Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Mining Services - Indonesia
- Energy Development Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Kartika Selabumi Mining - Indonesia
- Malabar Cements Ltd - India
- Indika Energy - Indonesia
- Grasim Industreis Ltd - India
- Price Waterhouse Coopers - Russia
- Goldman Sachs - Singapore
- PTC India Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Chettinad Cement Corporation Ltd - India
- Vizag Seaport Private Limited - India
- PowerSource Philippines DevCo
- Central Java Power - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- New Zealand Coal & Carbon
- Planning Commission, India
- SMC Global Power, Philippines
- Gujarat Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Simpson Spence & Young - Indonesia
- Mintek Dendrill Indonesia
- Bhoruka Overseas - Indonesia
- International Coal Ventures Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Bhushan Steel Limited - India
- Xindia Steels Limited - India
- India Bulls Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Pendopo Energi Batubara - Indonesia
- Tamil Nadu electricity Board
- Coal and Oil Company - UAE
- Romanian Commodities Exchange
- Dalmia Cement Bharat India
- Africa Commodities Group - South Africa
- Oldendorff Carriers - Singapore
- Madhucon Powers Ltd - India
- Cement Manufacturers Association - India
- Latin American Coal - Colombia
- Bukit Makmur.PT - Indonesia
- Therma Luzon, Inc, Philippines
- Petron Corporation, Philippines
- Electricity Generating Authority of Thailand
- European Bulk Services B.V. - Netherlands
- Krishnapatnam Port Company Ltd. - India
- GN Power Mariveles Coal Plant, Philippines
- Riau Bara Harum - Indonesia
- Borneo Indobara - Indonesia
- Indian Energy Exchange, India
- Indogreen Group - Indonesia
- Kumho Petrochemical, South Korea
- ICICI Bank Limited - India
- Semirara Mining Corp, Philippines
- The Treasury - Australian Government
- Orica Australia Pty. Ltd.
- Baramulti Group, Indonesia
- VISA Power Limited - India
- Kobexindo Tractors - Indoneisa
- Australian Commodity Traders Exchange
- Uttam Galva Steels Limited - India
- Antam Resourcindo - Indonesia
- The University of Queensland
- PNOC Exploration Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Kepco SPC Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Deloitte Consulting - India
- Eastern Coal Council - USA
- Cigading International Bulk Terminal - Indonesia
- Eastern Energy - Thailand
- Edison Trading Spa - Italy
- Globalindo Alam Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
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