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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, 17 December 09
CIL TO IMPORT 4 MILLION TONNES COAL FOR NTPC
The country's largest coal miner Coal India Ltd (CIL) will import 4 million tonnes of coal for state-run power company NTPC.
"Earlier, ther ...
Wednesday, 16 December 09
COAL MARKETS 2010 CONFERENCE - PRESS RELEASE
COALspot.com (Singapore) Press Release – Back for the 8th year, Coal Markets 2010 will be taking place in Singapore on 28 – 29 Jan ...
Wednesday, 16 December 09
CHINA 2010 COAL TERM PRICES SEEN RISING 8% ON YEAR
Term prices of thermal coal for 2010 in China are expected to rise about 8 percent from this year's levels, as demand for power has been roaring ba ...
Wednesday, 16 December 09
KANGAROO RESOURCES TO ACQUIRE INDONESIAN COAL INTERESTS
Emerging coal producer Kangaroo Resources has significantly enhanced its production pipeline in Indonesia after reaching agreement to acquire a coki ...
Wednesday, 16 December 09
UAE'S RAS AL KHAIMAH TO INVEST $5.2B IN EAST KALIMANTAN PROJECT
Shrugging off neighbor Dubai’s debt problems, the smaller United Arab Emirate of Ras Al Khaimah announced on Tuesday that it would increase it ...
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- Standard Chartered Bank - UAE
- Wilmar Investment Holdings
- Renaissance Capital - South Africa
- Kideco Jaya Agung - Indonesia
- Riau Bara Harum - Indonesia
- Globalindo Alam Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Savvy Resources Ltd - HongKong
- Rio Tinto Coal - Australia
- Indonesian Coal Mining Association
- Parry Sugars Refinery, India
- Kobexindo Tractors - Indoneisa
- IEA Clean Coal Centre - UK
- Rashtriya Ispat Nigam Limited - India
- Posco Energy - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indo Tambangraya Megah - Indonesia
- Intertek Mineral Services - Indonesia
- Madhucon Powers Ltd - India
- Commonwealth Bank - Australia
- Carbofer General Trading SA - India
- Krishnapatnam Port Company Ltd. - India
- SMC Global Power, Philippines
- San Jose City I Power Corp, Philippines
- Indian Oil Corporation Limited
- Manunggal Multi Energi - Indonesia
- Mercuria Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GMR Energy Limited - India
- PTC India Limited - India
- Oldendorff Carriers - Singapore
- Tata Chemicals Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- ASAPP Information Group - India
- Energy Development Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Heidelberg Cement - Germany
- Central Java Power - Indonesia
- The University of Queensland
- Africa Commodities Group - South Africa
- Kumho Petrochemical, South Korea
- Kartika Selabumi Mining - Indonesia
- Eastern Coal Council - USA
- Chamber of Mines of South Africa
- PowerSource Philippines DevCo
- ICICI Bank Limited - India
- TeaM Sual Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Merrill Lynch Commodities Europe
- McConnell Dowell - Australia
- MS Steel International - UAE
- Timah Investasi Mineral - Indoneisa
- Sarangani Energy Corporation, Philippines
- Mintek Dendrill Indonesia
- Toyota Tsusho Corporation, Japan
- Kalimantan Lumbung Energi - Indonesia
- Orica Australia Pty. Ltd.
- Thiess Contractors Indonesia
- Salva Resources Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Cement Manufacturers Association - India
- European Bulk Services B.V. - Netherlands
- Straits Asia Resources Limited - Singapore
- Price Waterhouse Coopers - Russia
- Indogreen Group - Indonesia
- OPG Power Generation Pvt Ltd - India
- London Commodity Brokers - England
- Therma Luzon, Inc, Philippines
- Siam City Cement - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- Sical Logistics Limited - India
- Banpu Public Company Limited - Thailand
- Asmin Koalindo Tuhup - Indonesia
- White Energy Company Limited
- PNOC Exploration Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Gujarat Mineral Development Corp Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- The State Trading Corporation of India Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Georgia Ports Authority, United States
- LBH Netherlands Bv - Netherlands
- Indian Energy Exchange, India
- Bhushan Steel Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Borneo Indobara - Indonesia
- Samtan Co., Ltd - South Korea
- Mjunction Services Limited - India
- Mercator Lines Limited - India
- Agrawal Coal Company - India
- Sojitz Corporation - Japan
- International Coal Ventures Pvt Ltd - India
- Baramulti Group, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Port Waratah Coal Services - Australia
- Altura Mining Limited, Indonesia
- Kaltim Prima Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Goldman Sachs - Singapore
- Energy Link Ltd, New Zealand
- Ministry of Finance - Indonesia
- Australian Commodity Traders Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Business Power Corporation, Philippines
- Bhatia International Limited - India
- Aditya Birla Group - India
- Thai Mozambique Logistica
- Interocean Group of Companies - India
- Essar Steel Hazira Ltd - India
- Bharathi Cement Corporation - India
- Marubeni Corporation - India
- Meralco Power Generation, Philippines
- Sakthi Sugars Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Electricity Authority, New Zealand
- Bukit Baiduri Energy - Indonesia
- Australian Coal Association
- Ind-Barath Power Infra Limited - India
- Romanian Commodities Exchange
- Gujarat Sidhee Cement - India
- Deloitte Consulting - India
- Central Electricity Authority - India
- Orica Mining Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Antam Resourcindo - Indonesia
- Kepco SPC Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Bukit Makmur.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Wood Mackenzie - Singapore
- Iligan Light & Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Global Coal Blending Company Limited - Australia
- Global Green Power PLC Corporation, Philippines
- Ambuja Cements Ltd - India
- Metalloyd Limited - United Kingdom
- Malabar Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Economic Council, Georgia
- Xindia Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Star Paper Mills Limited - India
- Maheswari Brothers Coal Limited - India
- Sree Jayajothi Cements Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Power Finance Corporation Ltd., India
- Trasteel International SA, Italy
- Barasentosa Lestari - Indonesia
- Medco Energi Mining Internasional
- Eastern Energy - Thailand
- Karaikal Port Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Sinarmas Energy and Mining - Indonesia
- Makarim & Taira - Indonesia
- Coalindo Energy - Indonesia
- Bangladesh Power Developement Board
- Sindya Power Generating Company Private Ltd
- Semirara Mining and Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Bulk Trading Sa - Switzerland
- Indika Energy - Indonesia
- Planning Commission, India
- Anglo American - United Kingdom
- Simpson Spence & Young - Indonesia
- Grasim Industreis Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- CNBM International Corporation - China
- Alfred C Toepfer International GmbH - Germany
- Coal and Oil Company - UAE
- Directorate Of Revenue Intelligence - India
- AsiaOL BioFuels Corp., Philippines
- Formosa Plastics Group - Taiwan
- Lanco Infratech Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Miang Besar Coal Terminal - Indonesia
- Ministry of Mines - Canada
- GVK Power & Infra Limited - India
- Binh Thuan Hamico - Vietnam
- Uttam Galva Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- Latin American Coal - Colombia
- Vijayanagar Sugar Pvt Ltd - India
- Tamil Nadu electricity Board
- Electricity Generating Authority of Thailand
- Singapore Mercantile Exchange
- Vedanta Resources Plc - India
- Parliament of New Zealand
- Edison Trading Spa - Italy
- Independent Power Producers Association of India
- Meenaskhi Energy Private Limited - India
- Minerals Council of Australia
- Aboitiz Power Corporation - Philippines
- Videocon Industries ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The Treasury - Australian Government
- IHS Mccloskey Coal Group - USA
- Petron Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- VISA Power Limited - India
- Dalmia Cement Bharat India
- Jindal Steel & Power Ltd - India
- New Zealand Coal & Carbon
- Semirara Mining Corp, Philippines
- Vizag Seaport Private Limited - India
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- Bhoruka Overseas - Indonesia
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