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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, 16 December 09
COECLERICI EYES SECOND RUSSIA COAL MINE
* CEO says "seriously considering" mid-small size purchase
* Will use mine to increase exports to Asia
* Says delays at ports will not c ...
Wednesday, 16 December 09
INDONESIA'S FIRST PRIVATE RAILWAY TO BOOST RAK'S MINING INTERESTS
MEC infra to invest $1b in construction of 130-km transport link
A 130-kilometre railway that will ease the transport of raw materials and finish ...
Tuesday, 15 December 09
KOMIPO HAS ISSUED A NEW TENDER FOR 30000 MT OF 5200 NAR KCAL/KG COAL
COALspot.com (South Korea): South Korean state-owned utility Korea Midland Power (KOMIPO) has issued an new tender for prompt supply of 30000 M ...
Tuesday, 15 December 09
CHINA CUTS IMPORT DUTIES ON COAL, RAISES FOR OTHERS
China will lower import duties on more than 600 products next year, including coal, naphtha and phosphate ore, the Finance Ministry said on Tuesday. ...
Tuesday, 15 December 09
NTPC'S COAL WOES UNLIKELY TO END SOON
State-owned power producer NTPC’s woes over shortages of coal may not end soon. Though the company is importing 12.5 million tonnes of coal&nb ...
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- MS Steel International - UAE
- Billiton Holdings Pty Ltd - Australia
- Ministry of Transport, Egypt
- Metalloyd Limited - United Kingdom
- European Bulk Services B.V. - Netherlands
- Bhushan Steel Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Indian Energy Exchange, India
- Jindal Steel & Power Ltd - India
- Marubeni Corporation - India
- Gujarat Sidhee Cement - India
- Chamber of Mines of South Africa
- IHS Mccloskey Coal Group - USA
- Toyota Tsusho Corporation, Japan
- Riau Bara Harum - Indonesia
- Tamil Nadu electricity Board
- Rio Tinto Coal - Australia
- Sakthi Sugars Limited - India
- Meralco Power Generation, Philippines
- AsiaOL BioFuels Corp., Philippines
- ASAPP Information Group - India
- Aditya Birla Group - India
- Savvy Resources Ltd - HongKong
- Larsen & Toubro Limited - India
- Star Paper Mills Limited - India
- Kaltim Prima Coal - Indonesia
- TeaM Sual Corporation - Philippines
- Altura Mining Limited, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rashtriya Ispat Nigam Limited - India
- ICICI Bank Limited - India
- Kumho Petrochemical, South Korea
- Latin American Coal - Colombia
- Mercator Lines Limited - India
- Energy Link Ltd, New Zealand
- Bharathi Cement Corporation - India
- Orica Australia Pty. Ltd.
- Intertek Mineral Services - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- PNOC Exploration Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Malabar Cements Ltd - India
- The State Trading Corporation of India Ltd
- Orica Mining Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Independent Power Producers Association of India
- Eastern Coal Council - USA
- Simpson Spence & Young - Indonesia
- Wood Mackenzie - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Videocon Industries ltd - India
- Holcim Trading Pte Ltd - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Central Java Power - Indonesia
- PowerSource Philippines DevCo
- Iligan Light & Power Inc, Philippines
- Indian Oil Corporation Limited
- Kalimantan Lumbung Energi - Indonesia
- Goldman Sachs - Singapore
- South Luzon Thermal Energy Corporation
- Ceylon Electricity Board - Sri Lanka
- Sarangani Energy Corporation, Philippines
- Anglo American - United Kingdom
- Indika Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- GN Power Mariveles Coal Plant, Philippines
- Trasteel International SA, Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- Lanco Infratech Ltd - India
- Kideco Jaya Agung - Indonesia
- Sojitz Corporation - Japan
- Timah Investasi Mineral - Indoneisa
- Essar Steel Hazira Ltd - India
- Global Business Power Corporation, Philippines
- Carbofer General Trading SA - India
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- Power Finance Corporation Ltd., India
- Semirara Mining and Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Singapore Mercantile Exchange
- Banpu Public Company Limited - Thailand
- Oldendorff Carriers - Singapore
- The University of Queensland
- Price Waterhouse Coopers - Russia
- Renaissance Capital - South Africa
- Maheswari Brothers Coal Limited - India
- Siam City Cement PLC, Thailand
- Electricity Generating Authority of Thailand
- Commonwealth Bank - Australia
- Minerals Council of Australia
- Petron Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Ministry of Finance - Indonesia
- IEA Clean Coal Centre - UK
- Economic Council, Georgia
- Global Green Power PLC Corporation, Philippines
- Uttam Galva Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Eastern Energy - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Makarim & Taira - Indonesia
- Coalindo Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Therma Luzon, Inc, Philippines
- Bangladesh Power Developement Board
- Borneo Indobara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Deloitte Consulting - India
- Meenaskhi Energy Private Limited - India
- Agrawal Coal Company - India
- Dalmia Cement Bharat India
- Kepco SPC Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Karaikal Port Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Thiess Contractors Indonesia
- Merrill Lynch Commodities Europe
- Ind-Barath Power Infra Limited - India
- Romanian Commodities Exchange
- Coal and Oil Company - UAE
- LBH Netherlands Bv - Netherlands
- Australian Coal Association
- Standard Chartered Bank - UAE
- White Energy Company Limited
- Attock Cement Pakistan Limited
- Manunggal Multi Energi - Indonesia
- Parry Sugars Refinery, India
- CNBM International Corporation - China
- Cement Manufacturers Association - India
- Kartika Selabumi Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Sical Logistics Limited - India
- Straits Asia Resources Limited - Singapore
- Interocean Group of Companies - India
- Global Coal Blending Company Limited - Australia
- Planning Commission, India
- Semirara Mining Corp, Philippines
- Thai Mozambique Logistica
- New Zealand Coal & Carbon
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement - Thailand
- Electricity Authority, New Zealand
- Georgia Ports Authority, United States
- Vijayanagar Sugar Pvt Ltd - India
- Vedanta Resources Plc - India
- London Commodity Brokers - England
- The Treasury - Australian Government
- Bukit Makmur.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- India Bulls Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mjunction Services Limited - India
- Chettinad Cement Corporation Ltd - India
- GVK Power & Infra Limited - India
- Edison Trading Spa - Italy
- Sindya Power Generating Company Private Ltd
- Salva Resources Pvt Ltd - India
- Central Electricity Authority - India
- Indo Tambangraya Megah - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ambuja Cements Ltd - India
- Baramulti Group, Indonesia
- Xindia Steels Limited - India
- Coastal Gujarat Power Limited - India
- Directorate Of Revenue Intelligence - India
- PTC India Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Indogreen Group - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Energy Development Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Bhatia International Limited - India
- CIMB Investment Bank - Malaysia
- GAC Shipping (India) Pvt Ltd
- Aboitiz Power Corporation - Philippines
- Wilmar Investment Holdings
- Posco Energy - South Korea
- Kobexindo Tractors - Indoneisa
- Tata Chemicals Ltd - India
- Vizag Seaport Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- VISA Power Limited - India
- Medco Energi Mining Internasional
- Bhoruka Overseas - Indonesia
- SMC Global Power, Philippines
- Australian Commodity Traders Exchange
- GMR Energy Limited - India
- Bulk Trading Sa - Switzerland
- Africa Commodities Group - South Africa
- Ministry of Mines - Canada
- Parliament of New Zealand
- SMG Consultants - Indonesia
- Bayan Resources Tbk. - Indonesia
- Grasim Industreis Ltd - India
- Indonesian Coal Mining Association
- Mercuria Energy - Indonesia
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