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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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Friday, 18 December 09
COKING COAL SHORTAGE IN CHINA TO SPUR DEMAND FIGHT WITH JAPAN
China, the world’s largest steelmaker, faces a shortage of coking coal that may drive imports next year and spur a fight for resources with Ja ...
Thursday, 17 December 09
THE 6TH CLEAN ENERGY FORUM - CLEAN COAL 2010
COALspot.com (China) - Press Release: The 6th Clean Energy Forum--Clean Coal 2010 January 27-29, 2010 Renaissance Tianjin Teda Hotel And Conven ...
Thursday, 17 December 09
JFE STEEL INVESTS $555 MILLION IN AUSTRALIA COAL MINE
JFE Steel Corp., Japan’s second- largest producer, will invest 50 billion yen ($555 million) in a coal mine in Queensland, Australia, includin ...
Thursday, 17 December 09
CHINA, INDIA DEMAND MAY BOOST THERMAL COAL PRICE, JPMORGAN SAYS
Demand for thermal coal from China and India may boost prices of the fuel to $80 a metric ton next year amid reduced supplies and lower inventories, ...
Thursday, 17 December 09
RBCT PROBLEMS TO CAUSE STEAM COAL PRICE SPIKE IN Q1
Bugs in the new computer system at South Africa's Richards Bay Coal Terminal and persistent rail problems will make it impossible for exporters to ...
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- Kepco SPC Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Madhucon Powers Ltd - India
- Grasim Industreis Ltd - India
- Lanco Infratech Ltd - India
- Borneo Indobara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Barasentosa Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Sarangani Energy Corporation, Philippines
- Ministry of Transport, Egypt
- Australian Coal Association
- Economic Council, Georgia
- Medco Energi Mining Internasional
- Agrawal Coal Company - India
- GAC Shipping (India) Pvt Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Mercator Lines Limited - India
- OPG Power Generation Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Ministry of Finance - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- GVK Power & Infra Limited - India
- Chamber of Mines of South Africa
- Trasteel International SA, Italy
- AsiaOL BioFuels Corp., Philippines
- Thai Mozambique Logistica
- Eastern Coal Council - USA
- Rio Tinto Coal - Australia
- Star Paper Mills Limited - India
- Altura Mining Limited, Indonesia
- Karaikal Port Pvt Ltd - India
- Thiess Contractors Indonesia
- Bukit Makmur.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Ministry of Mines - Canada
- GN Power Mariveles Coal Plant, Philippines
- Eastern Energy - Thailand
- Orica Mining Services - Indonesia
- Parliament of New Zealand
- Aboitiz Power Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- Vedanta Resources Plc - India
- Port Waratah Coal Services - Australia
- Mercuria Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Bulk Trading Sa - Switzerland
- Bangladesh Power Developement Board
- CIMB Investment Bank - Malaysia
- Renaissance Capital - South Africa
- London Commodity Brokers - England
- European Bulk Services B.V. - Netherlands
- Globalindo Alam Lestari - Indonesia
- Indonesian Coal Mining Association
- Sical Logistics Limited - India
- Mjunction Services Limited - India
- Bhoruka Overseas - Indonesia
- International Coal Ventures Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Krishnapatnam Port Company Ltd. - India
- Sindya Power Generating Company Private Ltd
- Gujarat Mineral Development Corp Ltd - India
- Jindal Steel & Power Ltd - India
- Price Waterhouse Coopers - Russia
- Holcim Trading Pte Ltd - Singapore
- Vizag Seaport Private Limited - India
- Bhushan Steel Limited - India
- Alfred C Toepfer International GmbH - Germany
- The University of Queensland
- Petron Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Orica Australia Pty. Ltd.
- Meenaskhi Energy Private Limited - India
- Electricity Authority, New Zealand
- TeaM Sual Corporation - Philippines
- VISA Power Limited - India
- Energy Development Corp, Philippines
- Indian Energy Exchange, India
- Bhatia International Limited - India
- Indika Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Mintek Dendrill Indonesia
- Dalmia Cement Bharat India
- Latin American Coal - Colombia
- San Jose City I Power Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Indo Tambangraya Megah - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Uttam Galva Steels Limited - India
- The Treasury - Australian Government
- Kaltim Prima Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Coalindo Energy - Indonesia
- Central Java Power - Indonesia
- LBH Netherlands Bv - Netherlands
- Georgia Ports Authority, United States
- Posco Energy - South Korea
- Essar Steel Hazira Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Anglo American - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- India Bulls Power Limited - India
- Directorate Of Revenue Intelligence - India
- Siam City Cement - Thailand
- Kapuas Tunggal Persada - Indonesia
- Planning Commission, India
- Edison Trading Spa - Italy
- Carbofer General Trading SA - India
- Leighton Contractors Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Minerals Council of Australia
- Gujarat Sidhee Cement - India
- Tata Chemicals Ltd - India
- Deloitte Consulting - India
- Kumho Petrochemical, South Korea
- PNOC Exploration Corporation - Philippines
- Ambuja Cements Ltd - India
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- Parry Sugars Refinery, India
- Jorong Barutama Greston.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Tamil Nadu electricity Board
- Semirara Mining Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Meralco Power Generation, Philippines
- Attock Cement Pakistan Limited
- Indian Oil Corporation Limited
- Global Coal Blending Company Limited - Australia
- Heidelberg Cement - Germany
- Pendopo Energi Batubara - Indonesia
- Energy Link Ltd, New Zealand
- Miang Besar Coal Terminal - Indonesia
- SMG Consultants - Indonesia
- Ind-Barath Power Infra Limited - India
- Romanian Commodities Exchange
- Global Green Power PLC Corporation, Philippines
- Malabar Cements Ltd - India
- Jaiprakash Power Ventures ltd
- ASAPP Information Group - India
- South Luzon Thermal Energy Corporation
- Coal and Oil Company - UAE
- Baramulti Group, Indonesia
- Oldendorff Carriers - Singapore
- MS Steel International - UAE
- ICICI Bank Limited - India
- Timah Investasi Mineral - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Savvy Resources Ltd - HongKong
- New Zealand Coal & Carbon
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wood Mackenzie - Singapore
- Intertek Mineral Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Manunggal Multi Energi - Indonesia
- Sakthi Sugars Limited - India
- Commonwealth Bank - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate General of MIneral and Coal - Indonesia
- Riau Bara Harum - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- Videocon Industries ltd - India
- Straits Asia Resources Limited - Singapore
- Metalloyd Limited - United Kingdom
- Salva Resources Pvt Ltd - India
- Makarim & Taira - Indonesia
- Bharathi Cement Corporation - India
- Central Electricity Authority - India
- Global Business Power Corporation, Philippines
- Interocean Group of Companies - India
- Banpu Public Company Limited - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Wilmar Investment Holdings
- Indogreen Group - Indonesia
- Gujarat Electricity Regulatory Commission - India
- CNBM International Corporation - China
- Formosa Plastics Group - Taiwan
- Merrill Lynch Commodities Europe
- Kalimantan Lumbung Energi - Indonesia
- Bukit Baiduri Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Larsen & Toubro Limited - India
- Cement Manufacturers Association - India
- Goldman Sachs - Singapore
- Cigading International Bulk Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Marubeni Corporation - India
- Australian Commodity Traders Exchange
- Samtan Co., Ltd - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Singapore Mercantile Exchange
- Xindia Steels Limited - India
- Siam City Cement PLC, Thailand
- SN Aboitiz Power Inc, Philippines
- SMC Global Power, Philippines
- IHS Mccloskey Coal Group - USA
- Rashtriya Ispat Nigam Limited - India
- Aditya Birla Group - India
- PTC India Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- PowerSource Philippines DevCo
- Coastal Gujarat Power Limited - India
- White Energy Company Limited
- Standard Chartered Bank - UAE
- McConnell Dowell - Australia
- Antam Resourcindo - Indonesia
- GMR Energy Limited - India
- Kobexindo Tractors - Indoneisa
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