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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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Sunday, 06 December 09
NEW MANGALORE PORT GETS UPCL'S FIRST COAL PARCEL FROM INDONESIA
The Lanco Group-promoted Udupi Power Corporation Ltd (UPCL) has received the first parcel of imported coal from Indonesia at the New Mangalore Port. ...
Friday, 04 December 09
CHINA'S COAL IMPORTS PREDICTED TO DECLINE IN 2010
China's eye-catching coal import figure s are unlikely to extend into 2010 given the predicted narrow-down of the coal price spread between the hom ...
Friday, 04 December 09
SUBHASH PROJECTS BEGINS MINING AT INDONESIAN COAL BLOCK
Kolkata-based infrastructure company Subhash Projects and Marketing (SPML) has begun mining at its coal block in Indonesia and will begin despatchin ...
Friday, 04 December 09
DRY BULK MARKET IS ON THE RISE AGAIN
Proving rather resilient, compared to previous behaviors, the dry bulk market has been on a rebound mode once again, after a two-week fall, which su ...
Friday, 04 December 09
INDONESIA'S BUMI EYES MARKETING DEAL FOR BERAU COAL
Reuters reported that, Indonesian coal miner PT Bumi Resources Tbk said on Thursday it is in talks to be the exclusive marketing agent for coal prod ...
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- Vijayanagar Sugar Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Aditya Birla Group - India
- Independent Power Producers Association of India
- Marubeni Corporation - India
- Bukit Baiduri Energy - Indonesia
- Heidelberg Cement - Germany
- Merrill Lynch Commodities Europe
- The Treasury - Australian Government
- Tata Chemicals Ltd - India
- TeaM Sual Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Petron Corporation, Philippines
- Parry Sugars Refinery, India
- Madhucon Powers Ltd - India
- Trasteel International SA, Italy
- ASAPP Information Group - India
- McConnell Dowell - Australia
- Essar Steel Hazira Ltd - India
- Bhoruka Overseas - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Planning Commission, India
- Formosa Plastics Group - Taiwan
- Xindia Steels Limited - India
- Energy Development Corp, Philippines
- Romanian Commodities Exchange
- Kaltim Prima Coal - Indonesia
- Bharathi Cement Corporation - India
- Indika Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Power Finance Corporation Ltd., India
- SMG Consultants - Indonesia
- Medco Energi Mining Internasional
- Georgia Ports Authority, United States
- Price Waterhouse Coopers - Russia
- PNOC Exploration Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Indo Tambangraya Megah - Indonesia
- IHS Mccloskey Coal Group - USA
- Deloitte Consulting - India
- Bukit Makmur.PT - Indonesia
- Ministry of Mines - Canada
- Star Paper Mills Limited - India
- Ceylon Electricity Board - Sri Lanka
- CNBM International Corporation - China
- Chettinad Cement Corporation Ltd - India
- Cement Manufacturers Association - India
- Timah Investasi Mineral - Indoneisa
- Chamber of Mines of South Africa
- Sakthi Sugars Limited - India
- Wilmar Investment Holdings
- Toyota Tsusho Corporation, Japan
- Cigading International Bulk Terminal - Indonesia
- Thiess Contractors Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bayan Resources Tbk. - Indonesia
- Grasim Industreis Ltd - India
- Anglo American - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Maheswari Brothers Coal Limited - India
- Binh Thuan Hamico - Vietnam
- Iligan Light & Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- India Bulls Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Vedanta Resources Plc - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Electricity Authority - India
- The State Trading Corporation of India Ltd
- Altura Mining Limited, Indonesia
- PowerSource Philippines DevCo
- Eastern Coal Council - USA
- OPG Power Generation Pvt Ltd - India
- Ministry of Finance - Indonesia
- Global Green Power PLC Corporation, Philippines
- Makarim & Taira - Indonesia
- VISA Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Vizag Seaport Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Antam Resourcindo - Indonesia
- Carbofer General Trading SA - India
- Borneo Indobara - Indonesia
- Eastern Energy - Thailand
- Interocean Group of Companies - India
- Indogreen Group - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Leighton Contractors Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Africa Commodities Group - South Africa
- Mercator Lines Limited - India
- Riau Bara Harum - Indonesia
- Videocon Industries ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- White Energy Company Limited
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Global Business Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- CIMB Investment Bank - Malaysia
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- Bulk Trading Sa - Switzerland
- Kohat Cement Company Ltd. - Pakistan
- Jorong Barutama Greston.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Indian Energy Exchange, India
- Australian Coal Association
- Pendopo Energi Batubara - Indonesia
- Sarangani Energy Corporation, Philippines
- Coalindo Energy - Indonesia
- Goldman Sachs - Singapore
- GMR Energy Limited - India
- Gujarat Sidhee Cement - India
- Minerals Council of Australia
- Meenaskhi Energy Private Limited - India
- Meralco Power Generation, Philippines
- Attock Cement Pakistan Limited
- Gujarat Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- MS Steel International - UAE
- Parliament of New Zealand
- San Jose City I Power Corp, Philippines
- Ministry of Transport, Egypt
- SMC Global Power, Philippines
- Kumho Petrochemical, South Korea
- Karaikal Port Pvt Ltd - India
- Sojitz Corporation - Japan
- Directorate Of Revenue Intelligence - India
- Globalindo Alam Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Mercuria Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Siam City Cement PLC, Thailand
- Samtan Co., Ltd - South Korea
- Renaissance Capital - South Africa
- Sindya Power Generating Company Private Ltd
- AsiaOL BioFuels Corp., Philippines
- Mjunction Services Limited - India
- Savvy Resources Ltd - HongKong
- Indian Oil Corporation Limited
- European Bulk Services B.V. - Netherlands
- Salva Resources Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Bangladesh Power Developement Board
- Sical Logistics Limited - India
- LBH Netherlands Bv - Netherlands
- Ambuja Cements Ltd - India
- Tamil Nadu electricity Board
- Larsen & Toubro Limited - India
- Coal and Oil Company - UAE
- Dalmia Cement Bharat India
- International Coal Ventures Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Central Java Power - Indonesia
- Baramulti Group, Indonesia
- Mintek Dendrill Indonesia
- Alfred C Toepfer International GmbH - Germany
- GVK Power & Infra Limited - India
- Economic Council, Georgia
- Kobexindo Tractors - Indoneisa
- Commonwealth Bank - Australia
- Standard Chartered Bank - UAE
- Jindal Steel & Power Ltd - India
- London Commodity Brokers - England
- The University of Queensland
- Wood Mackenzie - Singapore
- Orica Australia Pty. Ltd.
- Malabar Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- Intertek Mineral Services - Indonesia
- Orica Mining Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rashtriya Ispat Nigam Limited - India
- Port Waratah Coal Services - Australia
- Barasentosa Lestari - Indonesia
- Therma Luzon, Inc, Philippines
- Electricity Generating Authority of Thailand
- Manunggal Multi Energi - Indonesia
- Edison Trading Spa - Italy
- Indonesian Coal Mining Association
- Global Coal Blending Company Limited - Australia
- PTC India Limited - India
- Ind-Barath Power Infra Limited - India
- Uttam Galva Steels Limited - India
- Singapore Mercantile Exchange
- Electricity Authority, New Zealand
- Thai Mozambique Logistica
- Latin American Coal - Colombia
- New Zealand Coal & Carbon
- Jaiprakash Power Ventures ltd
- Siam City Cement - Thailand
- ICICI Bank Limited - India
- Posco Energy - South Korea
- Lanco Infratech Ltd - India
- Bhushan Steel Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Agrawal Coal Company - India
- Kapuas Tunggal Persada - Indonesia
- IEA Clean Coal Centre - UK
- Krishnapatnam Port Company Ltd. - India
- Australian Commodity Traders Exchange
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