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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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Saturday, 12 December 09
QUEENSLAND APPROVES A$4 BILLION COAL TERMINAL PROJECT
Queensland’s state government said it has signed a mandate approving development of the A$4 billion ($3.7 billion) Wiggins Island coal termina ...
Saturday, 12 December 09
INDONESIA'S COAL RUSH - SOOTY SUCCESS
Rising demand from China and India is stoking Indonesia’s exports of coal
FOR power stations on the coast of China, it is often cheaper to ...
Thursday, 10 December 09
ENVIROCOAL REGISTERED IN 33 COUNTRIES
PT Adaro concerned to register the brand overseas
PT Adaro Energy Tbk has registered the Envirocoal trademark for its coal products in 33 countri ...
Thursday, 10 December 09
INDIA TO IMPORT 28 MILLION TONNE OF STEAM COAL
Faced with short supply of coal from domestic sources, the Indian power ministry has revised upwards its coal import target for the current fiscal t ...
Thursday, 10 December 09
INDONESIA'S NEW MINING LAW WILL NOT LIMIT COAL EXPORTS, SAYS GOVERNMENT
The government will allow coal producers to continue exporting even if they miss domestic sales requirements, a senior mining official said, marking ...
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- Riau Bara Harum - Indonesia
- Singapore Mercantile Exchange
- Gujarat Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- Australian Commodity Traders Exchange
- Jaiprakash Power Ventures ltd
- Alfred C Toepfer International GmbH - Germany
- OPG Power Generation Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Parliament of New Zealand
- Bulk Trading Sa - Switzerland
- Eastern Coal Council - USA
- Simpson Spence & Young - Indonesia
- Siam City Cement PLC, Thailand
- Neyveli Lignite Corporation Ltd, - India
- Kumho Petrochemical, South Korea
- White Energy Company Limited
- Ministry of Finance - Indonesia
- Gujarat Sidhee Cement - India
- Petron Corporation, Philippines
- Marubeni Corporation - India
- Pendopo Energi Batubara - Indonesia
- Romanian Commodities Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Heidelberg Cement - Germany
- Siam City Cement - Thailand
- Georgia Ports Authority, United States
- Eastern Energy - Thailand
- Coastal Gujarat Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Anglo American - United Kingdom
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Essar Steel Hazira Ltd - India
- GMR Energy Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Madhucon Powers Ltd - India
- Chettinad Cement Corporation Ltd - India
- Bayan Resources Tbk. - Indonesia
- MS Steel International - UAE
- Salva Resources Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Toyota Tsusho Corporation, Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Development Corp, Philippines
- Oldendorff Carriers - Singapore
- Kartika Selabumi Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Africa Commodities Group - South Africa
- Sakthi Sugars Limited - India
- Straits Asia Resources Limited - Singapore
- Uttam Galva Steels Limited - India
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- Bukit Baiduri Energy - Indonesia
- Bhushan Steel Limited - India
- Goldman Sachs - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Tata Chemicals Ltd - India
- Agrawal Coal Company - India
- Dalmia Cement Bharat India
- Indonesian Coal Mining Association
- Aboitiz Power Corporation - Philippines
- SMG Consultants - Indonesia
- Aditya Birla Group - India
- Star Paper Mills Limited - India
- International Coal Ventures Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- The University of Queensland
- ASAPP Information Group - India
- Directorate General of MIneral and Coal - Indonesia
- Bangladesh Power Developement Board
- The State Trading Corporation of India Ltd
- Maharashtra Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- Vizag Seaport Private Limited - India
- Formosa Plastics Group - Taiwan
- Baramulti Group, Indonesia
- Ministry of Mines - Canada
- Medco Energi Mining Internasional
- Orica Mining Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Binh Thuan Hamico - Vietnam
- Antam Resourcindo - Indonesia
- Deloitte Consulting - India
- Chamber of Mines of South Africa
- Gujarat Mineral Development Corp Ltd - India
- Videocon Industries ltd - India
- Wilmar Investment Holdings
- Metalloyd Limited - United Kingdom
- Mercuria Energy - Indonesia
- Standard Chartered Bank - UAE
- Timah Investasi Mineral - Indoneisa
- Mjunction Services Limited - India
- Globalindo Alam Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Coal and Oil Company - UAE
- Global Green Power PLC Corporation, Philippines
- Indogreen Group - Indonesia
- South Luzon Thermal Energy Corporation
- PowerSource Philippines DevCo
- LBH Netherlands Bv - Netherlands
- London Commodity Brokers - England
- Carbofer General Trading SA - India
- Renaissance Capital - South Africa
- Mercator Lines Limited - India
- Independent Power Producers Association of India
- San Jose City I Power Corp, Philippines
- Rio Tinto Coal - Australia
- Edison Trading Spa - Italy
- VISA Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
- GN Power Mariveles Coal Plant, Philippines
- Interocean Group of Companies - India
- Intertek Mineral Services - Indonesia
- Coalindo Energy - Indonesia
- Orica Australia Pty. Ltd.
- Indian Energy Exchange, India
- Posco Energy - South Korea
- Indo Tambangraya Megah - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Merrill Lynch Commodities Europe
- GAC Shipping (India) Pvt Ltd
- Thai Mozambique Logistica
- Global Business Power Corporation, Philippines
- Central Java Power - Indonesia
- Semirara Mining and Power Corporation, Philippines
- ICICI Bank Limited - India
- Trasteel International SA, Italy
- Sinarmas Energy and Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- New Zealand Coal & Carbon
- Semirara Mining Corp, Philippines
- Kideco Jaya Agung - Indonesia
- IEA Clean Coal Centre - UK
- Manunggal Multi Energi - Indonesia
- Attock Cement Pakistan Limited
- Electricity Authority, New Zealand
- Cement Manufacturers Association - India
- Grasim Industreis Ltd - India
- TeaM Sual Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Indian Oil Corporation Limited
- Central Electricity Authority - India
- Ambuja Cements Ltd - India
- Ministry of Transport, Egypt
- Offshore Bulk Terminal Pte Ltd, Singapore
- Wood Mackenzie - Singapore
- Thiess Contractors Indonesia
- Sical Logistics Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Kapuas Tunggal Persada - Indonesia
- CNBM International Corporation - China
- Kalimantan Lumbung Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Samtan Co., Ltd - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- Australian Coal Association
- Petrochimia International Co. Ltd.- Taiwan
- Lanco Infratech Ltd - India
- Kaltim Prima Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Ind-Barath Power Infra Limited - India
- Malabar Cements Ltd - India
- Bharathi Cement Corporation - India
- Borneo Indobara - Indonesia
- Sarangani Energy Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Minerals Council of Australia
- The Treasury - Australian Government
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vedanta Resources Plc - India
- McConnell Dowell - Australia
- Meralco Power Generation, Philippines
- Sree Jayajothi Cements Limited - India
- Therma Luzon, Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Banpu Public Company Limited - Thailand
- Mintek Dendrill Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Price Waterhouse Coopers - Russia
- Indika Energy - Indonesia
- Commonwealth Bank - Australia
- Krishnapatnam Port Company Ltd. - India
- Kepco SPC Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- PTC India Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parry Sugars Refinery, India
- AsiaOL BioFuels Corp., Philippines
- Bhatia International Limited - India
- India Bulls Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Economic Council, Georgia
- Savvy Resources Ltd - HongKong
- GVK Power & Infra Limited - India
- Tamil Nadu electricity Board
- Larsen & Toubro Limited - India
- SMC Global Power, Philippines
- Makarim & Taira - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Energy Link Ltd, New Zealand
- PNOC Exploration Corporation - Philippines
- Planning Commission, India
- Altura Mining Limited, Indonesia
- Latin American Coal - Colombia
- Directorate Of Revenue Intelligence - India
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