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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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Friday, 04 December 09
KALIMANTAN GOLD AGREES TO SELL IBP COAL CONCESSION
COALspot.com ( Press Release): Kalimantan Gold Corporation Limited ("KLG" or the "Company"), which undertook drilling and had an ...
Friday, 04 December 09
JSW ENERGY TO BUY OUT PARENT FIRM'S COAL BLOCK
JSW Energy plans to buy the stake held by JSW Steel in a thermal coal block in Mozambique in an attempt to become an integrated energy company with ...
Thursday, 03 December 09
JAPAN 2010 COAL IMPORTS SEEN FLAT, INDIA'S ROBUST - INDUSTRY
* Japan's demand seen steady in 2010 at 110 mln tonnes
* India's demand seen as robust, at 70 mln tonnes
Reuters reported that, Thermal coal i ...
Thursday, 03 December 09
INDONESIA MAY ALLOW COAL SALES BELOW GOVT PRICE
Reuters reported that, Indonesia is considering giving producers some flexibility to sell coal below the government's monthly benchmark price to co ...
Thursday, 03 December 09
INDONESIA SEEKS TO INCREASE COAL SHIPMENTS TO INDIA, CHINA
Bloomberg reproted that, Indonesia, Asia’s biggest coal exporter, seeks to increase shipments to India and China as the economies improve and ...
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- Bhatia International Limited - India
- Global Green Power PLC Corporation, Philippines
- Samtan Co., Ltd - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- International Coal Ventures Pvt Ltd - India
- Chamber of Mines of South Africa
- SN Aboitiz Power Inc, Philippines
- Thai Mozambique Logistica
- Semirara Mining and Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Videocon Industries ltd - India
- Alfred C Toepfer International GmbH - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Essar Steel Hazira Ltd - India
- Sindya Power Generating Company Private Ltd
- Georgia Ports Authority, United States
- Intertek Mineral Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Power Finance Corporation Ltd., India
- Posco Energy - South Korea
- Marubeni Corporation - India
- Billiton Holdings Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Mercator Lines Limited - India
- Romanian Commodities Exchange
- Deloitte Consulting - India
- Directorate General of MIneral and Coal - Indonesia
- Agrawal Coal Company - India
- Bhoruka Overseas - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Singapore Mercantile Exchange
- Africa Commodities Group - South Africa
- Energy Development Corp, Philippines
- Price Waterhouse Coopers - Russia
- Cement Manufacturers Association - India
- Riau Bara Harum - Indonesia
- Indogreen Group - Indonesia
- Bangladesh Power Developement Board
- Therma Luzon, Inc, Philippines
- Simpson Spence & Young - Indonesia
- Larsen & Toubro Limited - India
- Latin American Coal - Colombia
- Karaikal Port Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Australian Commodity Traders Exchange
- Heidelberg Cement - Germany
- Salva Resources Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Eastern Energy - Thailand
- Merrill Lynch Commodities Europe
- Meralco Power Generation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- Star Paper Mills Limited - India
- Leighton Contractors Pty Ltd - Australia
- Ministry of Transport, Egypt
- Planning Commission, India
- Parry Sugars Refinery, India
- Interocean Group of Companies - India
- Ambuja Cements Ltd - India
- Petron Corporation, Philippines
- VISA Power Limited - India
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- Altura Mining Limited, Indonesia
- Malabar Cements Ltd - India
- Rio Tinto Coal - Australia
- Globalindo Alam Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Banpu Public Company Limited - Thailand
- Oldendorff Carriers - Singapore
- Aboitiz Power Corporation - Philippines
- GMR Energy Limited - India
- SMC Global Power, Philippines
- TeaM Sual Corporation - Philippines
- MS Steel International - UAE
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sarangani Energy Corporation, Philippines
- Dalmia Cement Bharat India
- Savvy Resources Ltd - HongKong
- Central Electricity Authority - India
- Petrochimia International Co. Ltd.- Taiwan
- Pendopo Energi Batubara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Anglo American - United Kingdom
- London Commodity Brokers - England
- Electricity Generating Authority of Thailand
- Tata Chemicals Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Coal and Oil Company - UAE
- Miang Besar Coal Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Global Business Power Corporation, Philippines
- Vedanta Resources Plc - India
- Asmin Koalindo Tuhup - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Electricity Authority, New Zealand
- Coastal Gujarat Power Limited - India
- Kumho Petrochemical, South Korea
- Indian Oil Corporation Limited
- Trasteel International SA, Italy
- Bukit Baiduri Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Minerals Council of Australia
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- Jaiprakash Power Ventures ltd
- PetroVietnam Power Coal Import and Supply Company
- ASAPP Information Group - India
- Holcim Trading Pte Ltd - Singapore
- Indo Tambangraya Megah - Indonesia
- Straits Asia Resources Limited - Singapore
- Carbofer General Trading SA - India
- Krishnapatnam Port Company Ltd. - India
- Barasentosa Lestari - Indonesia
- Parliament of New Zealand
- Renaissance Capital - South Africa
- Indian Energy Exchange, India
- Goldman Sachs - Singapore
- GN Power Mariveles Coal Plant, Philippines
- IHS Mccloskey Coal Group - USA
- Ministry of Mines - Canada
- Kartika Selabumi Mining - Indonesia
- Economic Council, Georgia
- Vijayanagar Sugar Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Energy Link Ltd, New Zealand
- Grasim Industreis Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Antam Resourcindo - Indonesia
- Mintek Dendrill Indonesia
- Binh Thuan Hamico - Vietnam
- Makarim & Taira - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- New Zealand Coal & Carbon
- Karbindo Abesyapradhi - Indoneisa
- Formosa Plastics Group - Taiwan
- Bharathi Cement Corporation - India
- Australian Coal Association
- ICICI Bank Limited - India
- Bayan Resources Tbk. - Indonesia
- Borneo Indobara - Indonesia
- Independent Power Producers Association of India
- Iligan Light & Power Inc, Philippines
- Lanco Infratech Ltd - India
- Sical Logistics Limited - India
- Indika Energy - Indonesia
- The University of Queensland
- Attock Cement Pakistan Limited
- Wood Mackenzie - Singapore
- Gujarat Sidhee Cement - India
- Port Waratah Coal Services - Australia
- Siam City Cement - Thailand
- White Energy Company Limited
- Bhushan Steel Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- PTC India Limited - India
- Global Coal Blending Company Limited - Australia
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- Edison Trading Spa - Italy
- Jindal Steel & Power Ltd - India
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Coalindo Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Madhucon Powers Ltd - India
- Kaltim Prima Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- Commonwealth Bank - Australia
- Eastern Coal Council - USA
- Orica Mining Services - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bukit Makmur.PT - Indonesia
- South Luzon Thermal Energy Corporation
- CIMB Investment Bank - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GVK Power & Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Timah Investasi Mineral - Indoneisa
- Directorate Of Revenue Intelligence - India
- Neyveli Lignite Corporation Ltd, - India
- San Jose City I Power Corp, Philippines
- Orica Australia Pty. Ltd.
- CNBM International Corporation - China
- Aditya Birla Group - India
- Baramulti Group, Indonesia
- Ministry of Finance - Indonesia
- Wilmar Investment Holdings
- Xindia Steels Limited - India
- SMG Consultants - Indonesia
- Medco Energi Mining Internasional
- The Treasury - Australian Government
- Maheswari Brothers Coal Limited - India
- Mercuria Energy - Indonesia
- McConnell Dowell - Australia
- Uttam Galva Steels Limited - India
- The State Trading Corporation of India Ltd
- OPG Power Generation Pvt Ltd - India
- PowerSource Philippines DevCo
- Bulk Trading Sa - Switzerland
- LBH Netherlands Bv - Netherlands
- Meenaskhi Energy Private Limited - India
- Manunggal Multi Energi - Indonesia
- IEA Clean Coal Centre - UK
- Bahari Cakrawala Sebuku - Indonesia
- Chettinad Cement Corporation Ltd - India
- Sakthi Sugars Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sojitz Corporation - Japan
- Mjunction Services Limited - India
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