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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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Tuesday, 08 December 09
RICHARDS BAY COAL SHIPMENTS FELL 11% IN NOVEMBER FROM YEAR AGO
Coal exports from South Africa’s Richards Bay, site of the continent’s largest export terminal for the fuel, fell 11 percent in November ...
Tuesday, 08 December 09
HIGH GLOBAL COAL PRICES HIT POWER PROJECTS
Spot prices for the fuel have appreciated almost 10% in November.
After a sedate year, rising coal prices could hit the coffers of import-based d ...
Monday, 07 December 09
HOW INDIA CAN CUT ITS ENERGY NEEDS BY 20%!
Using energy more efficiently can reduce our energy needs by one fifth; it is a strategy we must pursue even as we promote renewables, says Kirit Pa ...
Monday, 07 December 09
ASIA COAL POWER IN INDONESIA DISCUSSES NEW MINING LAW, COAL AND POWER SECTORS AS INVESTMENTS POUR INTO COALMINES TO SECURE SUPPLIES
COALspot.com (Singaproe): Press Release - Asia Coal Power pinpoints growing power demand in Asia & Power sector investments in Indonesia's coal ...
Monday, 07 December 09
DRY BULK RATES' VOLATILITY TO STAY, BUT RECOVERY IS UNDERWAY SAYS ION VAROUXAKIS HEAD OF FREESEAS
In an interview with Hellenic Shipping News, Mr. Ion G. Varouxakis, Chairman of the Board, President and CEO of Nasdaq-listed Freeseas, explains why ...
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- Energy Link Ltd, New Zealand
- Semirara Mining and Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Meenaskhi Energy Private Limited - India
- Sakthi Sugars Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Madhucon Powers Ltd - India
- Kideco Jaya Agung - Indonesia
- Jaiprakash Power Ventures ltd
- Manunggal Multi Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Videocon Industries ltd - India
- Africa Commodities Group - South Africa
- Alfred C Toepfer International GmbH - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Economic Council, Georgia
- VISA Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Bharathi Cement Corporation - India
- Australian Coal Association
- Mercator Lines Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining Corp, Philippines
- Formosa Plastics Group - Taiwan
- Energy Development Corp, Philippines
- Interocean Group of Companies - India
- Edison Trading Spa - Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Aboitiz Power Corporation - Philippines
- Posco Energy - South Korea
- Sojitz Corporation - Japan
- Eastern Coal Council - USA
- Altura Mining Limited, Indonesia
- Grasim Industreis Ltd - India
- Central Electricity Authority - India
- Price Waterhouse Coopers - Russia
- Orica Mining Services - Indonesia
- Tamil Nadu electricity Board
- SN Aboitiz Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Planning Commission, India
- Bangladesh Power Developement Board
- PNOC Exploration Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Tata Chemicals Ltd - India
- Vizag Seaport Private Limited - India
- PowerSource Philippines DevCo
- London Commodity Brokers - England
- The University of Queensland
- Carbofer General Trading SA - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Anglo American - United Kingdom
- Electricity Authority, New Zealand
- SMC Global Power, Philippines
- Dalmia Cement Bharat India
- Heidelberg Cement - Germany
- Chettinad Cement Corporation Ltd - India
- Bukit Baiduri Energy - Indonesia
- Gujarat Sidhee Cement - India
- San Jose City I Power Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Global Business Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Singapore Mercantile Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Agrawal Coal Company - India
- International Coal Ventures Pvt Ltd - India
- Chamber of Mines of South Africa
- TeaM Sual Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Rio Tinto Coal - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mintek Dendrill Indonesia
- The State Trading Corporation of India Ltd
- SMG Consultants - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Intertek Mineral Services - Indonesia
- Ambuja Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Commonwealth Bank - Australia
- Vedanta Resources Plc - India
- Marubeni Corporation - India
- Gujarat Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- CNBM International Corporation - China
- Riau Bara Harum - Indonesia
- Ministry of Mines - Canada
- Merrill Lynch Commodities Europe
- Ind-Barath Power Infra Limited - India
- MS Steel International - UAE
- Mjunction Services Limited - India
- Kobexindo Tractors - Indoneisa
- The Treasury - Australian Government
- Essar Steel Hazira Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- CIMB Investment Bank - Malaysia
- Minerals Council of Australia
- Australian Commodity Traders Exchange
- Petrochimia International Co. Ltd.- Taiwan
- White Energy Company Limited
- Sical Logistics Limited - India
- Indika Energy - Indonesia
- Power Finance Corporation Ltd., India
- Parliament of New Zealand
- Samtan Co., Ltd - South Korea
- Bayan Resources Tbk. - Indonesia
- Central Java Power - Indonesia
- Xindia Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Rashtriya Ispat Nigam Limited - India
- European Bulk Services B.V. - Netherlands
- LBH Netherlands Bv - Netherlands
- Toyota Tsusho Corporation, Japan
- Renaissance Capital - South Africa
- GAC Shipping (India) Pvt Ltd
- Goldman Sachs - Singapore
- Simpson Spence & Young - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Indian Energy Exchange, India
- Bukit Asam (Persero) Tbk - Indonesia
- PTC India Limited - India
- Bulk Trading Sa - Switzerland
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement - Thailand
- Therma Luzon, Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Ministry of Transport, Egypt
- IEA Clean Coal Centre - UK
- Cigading International Bulk Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bhushan Steel Limited - India
- Deloitte Consulting - India
- Directorate Of Revenue Intelligence - India
- Ceylon Electricity Board - Sri Lanka
- Independent Power Producers Association of India
- Cement Manufacturers Association - India
- Baramulti Group, Indonesia
- Standard Chartered Bank - UAE
- Barasentosa Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- Lanco Infratech Ltd - India
- Electricity Generating Authority of Thailand
- Eastern Energy - Thailand
- India Bulls Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Larsen & Toubro Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Wilmar Investment Holdings
- Mercuria Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Port Waratah Coal Services - Australia
- Attock Cement Pakistan Limited
- Global Coal Blending Company Limited - Australia
- Coalindo Energy - Indonesia
- Indogreen Group - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Sarangani Energy Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Sindya Power Generating Company Private Ltd
- Indo Tambangraya Megah - Indonesia
- IHS Mccloskey Coal Group - USA
- Global Green Power PLC Corporation, Philippines
- GVK Power & Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- ICICI Bank Limited - India
- Bhatia International Limited - India
- Indian Oil Corporation Limited
- Petron Corporation, Philippines
- Bhoruka Overseas - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Salva Resources Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- GMR Energy Limited - India
- New Zealand Coal & Carbon
- Meralco Power Generation, Philippines
- McConnell Dowell - Australia
- Maharashtra Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Ministry of Finance - Indonesia
- Thiess Contractors Indonesia
- South Luzon Thermal Energy Corporation
- Kaltim Prima Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement PLC, Thailand
- Medco Energi Mining Internasional
- Kartika Selabumi Mining - Indonesia
- Antam Resourcindo - Indonesia
- Makarim & Taira - Indonesia
- Star Paper Mills Limited - India
- Coal and Oil Company - UAE
- Trasteel International SA, Italy
- Latin American Coal - Colombia
- Uttam Galva Steels Limited - India
- Bukit Makmur.PT - Indonesia
- Romanian Commodities Exchange
- Georgia Ports Authority, United States
- Thai Mozambique Logistica
- Banpu Public Company Limited - Thailand
- Aditya Birla Group - India
- Malabar Cements Ltd - India
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