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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, 09 December 09
INDONESIA'S RECAPITAL TO PAY $1.48 BLN FOR BERAU
Recapital Advisors, an Indonesian investment firm, will pay $1.48 billion in cash and notes to buy coal miner PT Berau Coal, $300 million of which i ...
Wednesday, 09 December 09
COAL INDIA YET TO IMPLEMENT IMPORT LINKED PRICES
Coal India Ltd is adopting a conservative approach in pricing despite being allowed to charge import-linked price for the country's minuscule reser ...
Wednesday, 09 December 09
INDIA NEEDS TO IMPORT 29 MILLION TONNE STEAM COAL IN 2009 - 10
Mr Sriprakash Jaiswal Indian minister of state (Independent Charge) for coal informed the Rajya Sabha that Central Electricity Authority has estimat ...
Tuesday, 08 December 09
VOLATILE COAL PRICES SPUR ASIAN HEDGING
Volatile coal prices are forcing staid Asian power firms to change the way they buy fuel, setting the scene for a hedging boom as a growing array of ...
Tuesday, 08 December 09
MEC TO SHIP 2M T INDONESIA COAL TO INDIA IN 2010 - REUTER'S INTERVIEW
The UAE's Middle East Coal plans to start operation of coal mines in Indonesia's East Kalimantan province next year with initial production of 2 m ...
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- Holcim Trading Pte Ltd - Singapore
- Aditya Birla Group - India
- Africa Commodities Group - South Africa
- Salva Resources Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Australia Pty. Ltd.
- Vizag Seaport Private Limited - India
- Siam City Cement - Thailand
- Rashtriya Ispat Nigam Limited - India
- PNOC Exploration Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- South Luzon Thermal Energy Corporation
- Kumho Petrochemical, South Korea
- Directorate Of Revenue Intelligence - India
- Aboitiz Power Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Baramulti Group, Indonesia
- Metalloyd Limited - United Kingdom
- Altura Mining Limited, Indonesia
- Agrawal Coal Company - India
- Ministry of Finance - Indonesia
- SN Aboitiz Power Inc, Philippines
- Georgia Ports Authority, United States
- Merrill Lynch Commodities Europe
- Global Business Power Corporation, Philippines
- GMR Energy Limited - India
- Rio Tinto Coal - Australia
- Larsen & Toubro Limited - India
- IHS Mccloskey Coal Group - USA
- GAC Shipping (India) Pvt Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PTC India Limited - India
- Ministry of Mines - Canada
- Ind-Barath Power Infra Limited - India
- Australian Coal Association
- Simpson Spence & Young - Indonesia
- Globalindo Alam Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Xindia Steels Limited - India
- Attock Cement Pakistan Limited
- Electricity Generating Authority of Thailand
- Siam City Cement PLC, Thailand
- AsiaOL BioFuels Corp., Philippines
- Minerals Council of Australia
- Binh Thuan Hamico - Vietnam
- Indian Energy Exchange, India
- Sarangani Energy Corporation, Philippines
- Meralco Power Generation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- PetroVietnam Power Coal Import and Supply Company
- Vijayanagar Sugar Pvt Ltd - India
- Wood Mackenzie - Singapore
- Sindya Power Generating Company Private Ltd
- New Zealand Coal & Carbon
- Wilmar Investment Holdings
- The Treasury - Australian Government
- GN Power Mariveles Coal Plant, Philippines
- Toyota Tsusho Corporation, Japan
- Sree Jayajothi Cements Limited - India
- MS Steel International - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Riau Bara Harum - Indonesia
- Economic Council, Georgia
- Kapuas Tunggal Persada - Indonesia
- Bharathi Cement Corporation - India
- Global Green Power PLC Corporation, Philippines
- Orica Mining Services - Indonesia
- Standard Chartered Bank - UAE
- Intertek Mineral Services - Indonesia
- Sakthi Sugars Limited - India
- Indika Energy - Indonesia
- Mjunction Services Limited - India
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- Bukit Makmur.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Ambuja Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TNB Fuel Sdn Bhd - Malaysia
- India Bulls Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Antam Resourcindo - Indonesia
- Bayan Resources Tbk. - Indonesia
- Timah Investasi Mineral - Indoneisa
- Renaissance Capital - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Pendopo Energi Batubara - Indonesia
- Singapore Mercantile Exchange
- Oldendorff Carriers - Singapore
- Global Coal Blending Company Limited - Australia
- Vedanta Resources Plc - India
- Commonwealth Bank - Australia
- Semirara Mining and Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- SMC Global Power, Philippines
- Indian Oil Corporation Limited
- Straits Asia Resources Limited - Singapore
- Star Paper Mills Limited - India
- Gujarat Electricity Regulatory Commission - India
- Parliament of New Zealand
- Manunggal Multi Energi - Indonesia
- Interocean Group of Companies - India
- Chettinad Cement Corporation Ltd - India
- Bhatia International Limited - India
- Tamil Nadu electricity Board
- Thiess Contractors Indonesia
- Jorong Barutama Greston.PT - Indonesia
- VISA Power Limited - India
- Mercator Lines Limited - India
- Borneo Indobara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Videocon Industries ltd - India
- Formosa Plastics Group - Taiwan
- Carbofer General Trading SA - India
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- Independent Power Producers Association of India
- Energy Link Ltd, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Bangladesh Power Developement Board
- The University of Queensland
- Kartika Selabumi Mining - Indonesia
- Lanco Infratech Ltd - India
- IEA Clean Coal Centre - UK
- Essar Steel Hazira Ltd - India
- Samtan Co., Ltd - South Korea
- Indo Tambangraya Megah - Indonesia
- Jindal Steel & Power Ltd - India
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
- Malabar Cements Ltd - India
- Tata Chemicals Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- LBH Netherlands Bv - Netherlands
- Petron Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Eastern Coal Council - USA
- Coalindo Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Chamber of Mines of South Africa
- Karaikal Port Pvt Ltd - India
- Dalmia Cement Bharat India
- PowerSource Philippines DevCo
- Marubeni Corporation - India
- Indonesian Coal Mining Association
- Bhushan Steel Limited - India
- SMG Consultants - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Karbindo Abesyapradhi - Indoneisa
- Romanian Commodities Exchange
- Power Finance Corporation Ltd., India
- Trasteel International SA, Italy
- Iligan Light & Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Bulk Trading Sa - Switzerland
- Grasim Industreis Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Anglo American - United Kingdom
- Coastal Gujarat Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- ASAPP Information Group - India
- Therma Luzon, Inc, Philippines
- Deloitte Consulting - India
- Parry Sugars Refinery, India
- Energy Development Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- GVK Power & Infra Limited - India
- Uttam Galva Steels Limited - India
- Coal and Oil Company - UAE
- Central Electricity Authority - India
- Posco Energy - South Korea
- White Energy Company Limited
- Central Java Power - Indonesia
- ICICI Bank Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Barasentosa Lestari - Indonesia
- Electricity Authority, New Zealand
- Cement Manufacturers Association - India
- Kaltim Prima Coal - Indonesia
- Madhucon Powers Ltd - India
- Thai Mozambique Logistica
- Krishnapatnam Port Company Ltd. - India
- Jaiprakash Power Ventures ltd
- Directorate General of MIneral and Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Latin American Coal - Colombia
- Medco Energi Mining Internasional
- Sinarmas Energy and Mining - Indonesia
- Mintek Dendrill Indonesia
- Australian Commodity Traders Exchange
- Edison Trading Spa - Italy
- Mercuria Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining Corp, Philippines
- McConnell Dowell - Australia
- CNBM International Corporation - China
- International Coal Ventures Pvt Ltd - India
- Planning Commission, India
- Ministry of Transport, Egypt
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Sidhee Cement - India
- Ceylon Electricity Board - Sri Lanka
- London Commodity Brokers - England
- Goldman Sachs - Singapore
- Makarim & Taira - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Eastern Energy - Thailand
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