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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 $500 million nickel project in North Maluku in Indonesia.
"If the regulation is not amended, new investors will think over before investing because it will increase costs and not every mining company is capable of increasing their investment," said Soemarno of the Indonesia Mining Association.
Source: Reuters / Alibaba
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Monday, 07 December 09
VEDANTA RESOURCES ISSUES TENDER TO IMPORT 2.25 MILLION COAL
COALspot.com (India): Vedanta Resources plc is a London stock exchange listed FTSE 100 diversified metals and mining major with revenues in excess o ...
Monday, 07 December 09
CHINA COKING COAL PRICE MAY RISE 14% ON DEFICIT, CITIGROUP SAYS
Coking coal prices in China, the world’s biggest steel producer, may rise 14 percent next year because of a supply deficit, Citigroup Inc. sai ...
Monday, 07 December 09
JSW STEEL TO SELL MOZAMBIQUE COAL MINE FOR RS 300 CRORE
JSW Steel may sell its coal mine in Mozambique to sister company JSW Energy as the mine has become commercially unviable for the steel producer, a t ...
Monday, 07 December 09
BLACK RIDGE MINING ENTERS AGREEMENT WITH INDONESIAN COAL PRODUCER
Australian-listed Black Ridge Mining has entered into an exclusive dealing and non-circumvention agreement with Indonesian coal producer PT. Inmas A ...
Sunday, 06 December 09
THE ECI / CHINA (S7) ROUTE SOFTENED AND WAS AT US$ 25,275 PER DAY - VISTAAR
COALspot.com (Singapore): "The market was bit soft in the beginning of the week, however towards mid week that market started to pick up and th ...
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- Gujarat Mineral Development Corp Ltd - India
- Merrill Lynch Commodities Europe
- IEA Clean Coal Centre - UK
- MS Steel International - UAE
- Lanco Infratech Ltd - India
- GAC Shipping (India) Pvt Ltd
- Kartika Selabumi Mining - Indonesia
- Siam City Cement - Thailand
- Altura Mining Limited, Indonesia
- Ministry of Finance - Indonesia
- Maheswari Brothers Coal Limited - India
- Goldman Sachs - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- European Bulk Services B.V. - Netherlands
- Renaissance Capital - South Africa
- Salva Resources Pvt Ltd - India
- Orica Mining Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- The State Trading Corporation of India Ltd
- Global Business Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Chettinad Cement Corporation Ltd - India
- Star Paper Mills Limited - India
- Simpson Spence & Young - Indonesia
- Planning Commission, India
- Timah Investasi Mineral - Indoneisa
- Parry Sugars Refinery, India
- Mercator Lines Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Samtan Co., Ltd - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Coal Association
- PetroVietnam Power Coal Import and Supply Company
- Wilmar Investment Holdings
- Directorate Of Revenue Intelligence - India
- Gujarat Sidhee Cement - India
- Kohat Cement Company Ltd. - Pakistan
- Electricity Authority, New Zealand
- London Commodity Brokers - England
- Petron Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- SMG Consultants - Indonesia
- Jaiprakash Power Ventures ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Agrawal Coal Company - India
- Dalmia Cement Bharat India
- McConnell Dowell - Australia
- CNBM International Corporation - China
- LBH Netherlands Bv - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Indian Energy Exchange, India
- SMC Global Power, Philippines
- Trasteel International SA, Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Oldendorff Carriers - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Rio Tinto Coal - Australia
- Indogreen Group - Indonesia
- The University of Queensland
- Directorate General of MIneral and Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- PowerSource Philippines DevCo
- SN Aboitiz Power Inc, Philippines
- Deloitte Consulting - India
- Eastern Coal Council - USA
- Romanian Commodities Exchange
- Thiess Contractors Indonesia
- Holcim Trading Pte Ltd - Singapore
- Orica Australia Pty. Ltd.
- Formosa Plastics Group - Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Cement Manufacturers Association - India
- Parliament of New Zealand
- Vizag Seaport Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- The Treasury - Australian Government
- Ministry of Transport, Egypt
- Africa Commodities Group - South Africa
- Attock Cement Pakistan Limited
- Bukit Makmur.PT - Indonesia
- Bharathi Cement Corporation - India
- Indo Tambangraya Megah - Indonesia
- Latin American Coal - Colombia
- Iligan Light & Power Inc, Philippines
- Heidelberg Cement - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Cigading International Bulk Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- Globalindo Alam Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- Intertek Mineral Services - Indonesia
- Price Waterhouse Coopers - Russia
- PTC India Limited - India
- Commonwealth Bank - Australia
- Thai Mozambique Logistica
- New Zealand Coal & Carbon
- Sical Logistics Limited - India
- Kobexindo Tractors - Indoneisa
- Larsen & Toubro Limited - India
- Meralco Power Generation, Philippines
- Bangladesh Power Developement Board
- Rashtriya Ispat Nigam Limited - India
- Kapuas Tunggal Persada - Indonesia
- Sojitz Corporation - Japan
- Marubeni Corporation - India
- Eastern Energy - Thailand
- Toyota Tsusho Corporation, Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhushan Steel Limited - India
- Videocon Industries ltd - India
- Leighton Contractors Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- Barasentosa Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Bukit Baiduri Energy - Indonesia
- GMR Energy Limited - India
- Coastal Gujarat Power Limited - India
- VISA Power Limited - India
- Port Waratah Coal Services - Australia
- Economic Council, Georgia
- Sakthi Sugars Limited - India
- Electricity Generating Authority of Thailand
- Ministry of Mines - Canada
- Aboitiz Power Corporation - Philippines
- Xindia Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- Georgia Ports Authority, United States
- Minerals Council of Australia
- Alfred C Toepfer International GmbH - Germany
- White Energy Company Limited
- Banpu Public Company Limited - Thailand
- Savvy Resources Ltd - HongKong
- AsiaOL BioFuels Corp., Philippines
- Grasim Industreis Ltd - India
- Edison Trading Spa - Italy
- Binh Thuan Hamico - Vietnam
- Therma Luzon, Inc, Philippines
- India Bulls Power Limited - India
- Energy Development Corp, Philippines
- Borneo Indobara - Indonesia
- Interocean Group of Companies - India
- Siam City Cement PLC, Thailand
- Riau Bara Harum - Indonesia
- Sarangani Energy Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coalindo Energy - Indonesia
- ICICI Bank Limited - India
- TeaM Sual Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Mintek Dendrill Indonesia
- Karaikal Port Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Straits Asia Resources Limited - Singapore
- Coal and Oil Company - UAE
- Energy Link Ltd, New Zealand
- Pendopo Energi Batubara - Indonesia
- Indian Oil Corporation Limited
- Central Java Power - Indonesia
- Carbofer General Trading SA - India
- Chamber of Mines of South Africa
- Madhucon Powers Ltd - India
- Posco Energy - South Korea
- Metalloyd Limited - United Kingdom
- Malabar Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Central Electricity Authority - India
- Kepco SPC Power Corporation, Philippines
- Aditya Birla Group - India
- Singapore Mercantile Exchange
- Global Coal Blending Company Limited - Australia
- Uttam Galva Steels Limited - India
- Medco Energi Mining Internasional
- Jindal Steel & Power Ltd - India
- Tata Chemicals Ltd - India
- Indika Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bayan Resources Tbk. - Indonesia
- GVK Power & Infra Limited - India
- Independent Power Producers Association of India
- Ambuja Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Wood Mackenzie - Singapore
- Bhoruka Overseas - Indonesia
- Mjunction Services Limited - India
- Tamil Nadu electricity Board
- IHS Mccloskey Coal Group - USA
- Meenaskhi Energy Private Limited - India
- Kumho Petrochemical, South Korea
- Baramulti Group, Indonesia
- Standard Chartered Bank - UAE
- Krishnapatnam Port Company Ltd. - India
- San Jose City I Power Corp, Philippines
- Semirara Mining Corp, Philippines
- Anglo American - United Kingdom
- Sree Jayajothi Cements Limited - India
- Indonesian Coal Mining Association
- Antam Resourcindo - Indonesia
- Bhatia International Limited - India
- Semirara Mining and Power Corporation, Philippines
- Makarim & Taira - Indonesia
- OPG Power Generation Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Vedanta Resources Plc - India
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