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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, 30 November 09
THE FUTURES FOR THREE YEARS (2010-2012) WAS SOFT COMPARED TO LAST WEEK - VISTAAR SINGAPORE
COALspot.com (Singapore): BDI continued to drop this week and touched below 4,000 mark level. The drop in BDI was almost 12 pct and closed at 3,975 ...
Monday, 30 November 09
INDIA UTILITIES MOVE TO COAL INDEX - PRICING
Indian state utilities are leading a switch to coal index-linked pricing from fixed prices to secure imports and to be visibly paying fair market pr ...
Monday, 30 November 09
RECAPITAL TO ACQUIRE BERAU COAL
Unlisted Indonesian coal producer Berau will redeem outstanding bonds before the acquisition by Recapital Advisers is completed by the end of this y ...
Friday, 27 November 09
IMPORTING LIGNITE INTO COAL RICH KOSOVO
Balkan Insight has discovered that one of Kosovo’s biggest firms is being forced to import lignite from Malaysia and Indonesia, despite estima ...
Friday, 27 November 09
SOUTH AFRICA STILL TOPS IN COAL EXPORT RANKINGS
Mining Weekly reported that, Despite significant coal-mining capacity recently discovered in the Southern African region, according to senior coal a ...
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- Medco Energi Mining Internasional
- Heidelberg Cement - Germany
- Formosa Plastics Group - Taiwan
- Ind-Barath Power Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- Sindya Power Generating Company Private Ltd
- International Coal Ventures Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Electricity Generating Authority of Thailand
- Kohat Cement Company Ltd. - Pakistan
- Global Coal Blending Company Limited - Australia
- Agrawal Coal Company - India
- Dalmia Cement Bharat India
- Borneo Indobara - Indonesia
- Altura Mining Limited, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- McConnell Dowell - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mercator Lines Limited - India
- MS Steel International - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Attock Cement Pakistan Limited
- PetroVietnam Power Coal Import and Supply Company
- Sical Logistics Limited - India
- Kobexindo Tractors - Indoneisa
- Coal and Oil Company - UAE
- OPG Power Generation Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Baramulti Group, Indonesia
- Banpu Public Company Limited - Thailand
- Gujarat Sidhee Cement - India
- Kideco Jaya Agung - Indonesia
- Electricity Authority, New Zealand
- Sojitz Corporation - Japan
- Energy Link Ltd, New Zealand
- Africa Commodities Group - South Africa
- PTC India Limited - India
- Mjunction Services Limited - India
- Indo Tambangraya Megah - Indonesia
- Standard Chartered Bank - UAE
- Grasim Industreis Ltd - India
- SMG Consultants - Indonesia
- Petron Corporation, Philippines
- Larsen & Toubro Limited - India
- Kepco SPC Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bangladesh Power Developement Board
- Petrochimia International Co. Ltd.- Taiwan
- Globalindo Alam Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bulk Trading Sa - Switzerland
- Rio Tinto Coal - Australia
- Coalindo Energy - Indonesia
- Riau Bara Harum - Indonesia
- Aditya Birla Group - India
- Cement Manufacturers Association - India
- Bhatia International Limited - India
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- Sinarmas Energy and Mining - Indonesia
- Oldendorff Carriers - Singapore
- Romanian Commodities Exchange
- Directorate Of Revenue Intelligence - India
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- London Commodity Brokers - England
- Vedanta Resources Plc - India
- Ceylon Electricity Board - Sri Lanka
- Singapore Mercantile Exchange
- Thai Mozambique Logistica
- Australian Commodity Traders Exchange
- Intertek Mineral Services - Indonesia
- The State Trading Corporation of India Ltd
- CNBM International Corporation - China
- Independent Power Producers Association of India
- Central Java Power - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Goldman Sachs - Singapore
- IEA Clean Coal Centre - UK
- Samtan Co., Ltd - South Korea
- IHS Mccloskey Coal Group - USA
- Sree Jayajothi Cements Limited - India
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Lanco Infratech Ltd - India
- Marubeni Corporation - India
- Ministry of Finance - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Interocean Group of Companies - India
- Star Paper Mills Limited - India
- Meenaskhi Energy Private Limited - India
- Mercuria Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Global Business Power Corporation, Philippines
- Trasteel International SA, Italy
- VISA Power Limited - India
- San Jose City I Power Corp, Philippines
- Indian Energy Exchange, India
- Kaltim Prima Coal - Indonesia
- Videocon Industries ltd - India
- Bukit Baiduri Energy - Indonesia
- Sakthi Sugars Limited - India
- Kartika Selabumi Mining - Indonesia
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Xindia Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- South Luzon Thermal Energy Corporation
- TeaM Sual Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Siam City Cement - Thailand
- Savvy Resources Ltd - HongKong
- Bhushan Steel Limited - India
- Anglo American - United Kingdom
- Essar Steel Hazira Ltd - India
- Latin American Coal - Colombia
- PowerSource Philippines DevCo
- Ministry of Mines - Canada
- Eastern Energy - Thailand
- Toyota Tsusho Corporation, Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- GMR Energy Limited - India
- Planning Commission, India
- Alfred C Toepfer International GmbH - Germany
- Indogreen Group - Indonesia
- Aboitiz Power Corporation - Philippines
- Renaissance Capital - South Africa
- Bayan Resources Tbk. - Indonesia
- Indian Oil Corporation Limited
- Posco Energy - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Carbofer General Trading SA - India
- The University of Queensland
- Bank of Tokyo Mitsubishi UFJ Ltd
- LBH Netherlands Bv - Netherlands
- Parliament of New Zealand
- Salva Resources Pvt Ltd - India
- Economic Council, Georgia
- SN Aboitiz Power Inc, Philippines
- Tata Chemicals Ltd - India
- Wood Mackenzie - Singapore
- Price Waterhouse Coopers - Russia
- Semirara Mining Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Coal Association
- Tamil Nadu electricity Board
- Indonesian Coal Mining Association
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- PNOC Exploration Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Merrill Lynch Commodities Europe
- TNB Fuel Sdn Bhd - Malaysia
- Maheswari Brothers Coal Limited - India
- Port Waratah Coal Services - Australia
- SMC Global Power, Philippines
- Cigading International Bulk Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Deloitte Consulting - India
- Bukit Makmur.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Minerals Council of Australia
- European Bulk Services B.V. - Netherlands
- Binh Thuan Hamico - Vietnam
- Siam City Cement PLC, Thailand
- Central Electricity Authority - India
- Power Finance Corporation Ltd., India
- Vizag Seaport Private Limited - India
- Malabar Cements Ltd - India
- Makarim & Taira - Indonesia
- Edison Trading Spa - Italy
- GVK Power & Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Ambuja Cements Ltd - India
- Metalloyd Limited - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Simpson Spence & Young - Indonesia
- Antam Resourcindo - Indonesia
- Chamber of Mines of South Africa
- Ministry of Transport, Egypt
- Indika Energy - Indonesia
- ICICI Bank Limited - India
- White Energy Company Limited
- Commonwealth Bank - Australia
- Holcim Trading Pte Ltd - Singapore
- Manunggal Multi Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Kumho Petrochemical, South Korea
- The Treasury - Australian Government
- AsiaOL BioFuels Corp., Philippines
- Energy Development Corp, Philippines
- Eastern Coal Council - USA
- Gujarat Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Uttam Galva Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Sarangani Energy Corporation, Philippines
- India Bulls Power Limited - India
- Therma Luzon, Inc, Philippines
- Georgia Ports Authority, United States
- Global Green Power PLC Corporation, Philippines
- Mintek Dendrill Indonesia
- Meralco Power Generation, Philippines
- New Zealand Coal & Carbon
- Barasentosa Lestari - Indonesia
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