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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, 27 November 09
BHP SEEKS VARIABLE COKING COAL PRICE IN JAPAN, NIKKEI SAYS
Bloomberg reproted that, BHP Billiton Ltd. has asked Japanese steelmakers to move to pricing of coking coal linked to spot rates rather than negotia ...
Friday, 27 November 09
EXXARO SEES HIGH COAL DEMAND RAISING PRICES
Reuters reported that, South African diversified miner Exxaro Resources said on Thursday it expected coal prices to rise to between $70 and $75 per ...
Friday, 27 November 09
CENTENNIAL SAYS ENERGY-COAL PRICE TO RISE AS CHINA SEEKS FUEL
Bloomberg reported that, Centennial Coal Co., an Australian producer of the fuel, said contract prices are expected to rise in 2010, with Chinese co ...
Friday, 27 November 09
IN FIRST-10-MONTH OF 2009 COAL IMPORTS IN GUANGXI-FANGCHENG EXCEEDED FULL-2008 IMPORTS
According to Customs statistics, during the January-October, Fangcheng port accumulatively imported 3.676mln tons valuing U.S.$370, rising by 53.8% ...
Thursday, 26 November 09
CHINA'S COAL IMPORTS TO RISE BY 170 PERCENT IN 2009
According to the statistics released by China's General Administration of Customs on November 23, China's coal imports for October totaled 11.1 mi ...
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- Port Waratah Coal Services - Australia
- Sinarmas Energy and Mining - Indonesia
- Grasim Industreis Ltd - India
- Thai Mozambique Logistica
- Pendopo Energi Batubara - Indonesia
- Thiess Contractors Indonesia
- Lanco Infratech Ltd - India
- Binh Thuan Hamico - Vietnam
- Planning Commission, India
- Kaltim Prima Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- Savvy Resources Ltd - HongKong
- Mercuria Energy - Indonesia
- Larsen & Toubro Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Wilmar Investment Holdings
- Cement Manufacturers Association - India
- Leighton Contractors Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Ministry of Mines - Canada
- Bulk Trading Sa - Switzerland
- Metalloyd Limited - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Chamber of Mines of South Africa
- Bukit Makmur.PT - Indonesia
- Anglo American - United Kingdom
- South Luzon Thermal Energy Corporation
- Jaiprakash Power Ventures ltd
- Makarim & Taira - Indonesia
- Electricity Generating Authority of Thailand
- Gujarat Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- PTC India Limited - India
- Ministry of Finance - Indonesia
- Star Paper Mills Limited - India
- New Zealand Coal & Carbon
- Merrill Lynch Commodities Europe
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- Bangladesh Power Developement Board
- Vedanta Resources Plc - India
- Salva Resources Pvt Ltd - India
- Coal and Oil Company - UAE
- SN Aboitiz Power Inc, Philippines
- Meralco Power Generation, Philippines
- Riau Bara Harum - Indonesia
- Intertek Mineral Services - Indonesia
- San Jose City I Power Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Africa Commodities Group - South Africa
- Heidelberg Cement - Germany
- Commonwealth Bank - Australia
- Malabar Cements Ltd - India
- Sakthi Sugars Limited - India
- Aboitiz Power Corporation - Philippines
- Coalindo Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Videocon Industries ltd - India
- LBH Netherlands Bv - Netherlands
- Standard Chartered Bank - UAE
- Holcim Trading Pte Ltd - Singapore
- Indo Tambangraya Megah - Indonesia
- Banpu Public Company Limited - Thailand
- Energy Link Ltd, New Zealand
- Globalindo Alam Lestari - Indonesia
- Minerals Council of Australia
- India Bulls Power Limited - India
- Baramulti Group, Indonesia
- Kobexindo Tractors - Indoneisa
- Sical Logistics Limited - India
- MS Steel International - UAE
- Kohat Cement Company Ltd. - Pakistan
- PowerSource Philippines DevCo
- Gujarat Mineral Development Corp Ltd - India
- Indian Energy Exchange, India
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Baiduri Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Indonesian Coal Mining Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Simpson Spence & Young - Indonesia
- Barasentosa Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Power Finance Corporation Ltd., India
- Interocean Group of Companies - India
- Global Green Power PLC Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Carbofer General Trading SA - India
- Sojitz Corporation - Japan
- Ambuja Cements Ltd - India
- Indika Energy - Indonesia
- Siam City Cement PLC, Thailand
- Global Business Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Petron Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Chettinad Cement Corporation Ltd - India
- GAC Shipping (India) Pvt Ltd
- Cigading International Bulk Terminal - Indonesia
- Bharathi Cement Corporation - India
- Oldendorff Carriers - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Marubeni Corporation - India
- Latin American Coal - Colombia
- The University of Queensland
- Semirara Mining Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Romanian Commodities Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Maheswari Brothers Coal Limited - India
- Eastern Energy - Thailand
- Ceylon Electricity Board - Sri Lanka
- Medco Energi Mining Internasional
- Dalmia Cement Bharat India
- McConnell Dowell - Australia
- International Coal Ventures Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Electricity Authority, New Zealand
- Kapuas Tunggal Persada - Indonesia
- Borneo Indobara - Indonesia
- Therma Luzon, Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Antam Resourcindo - Indonesia
- Rio Tinto Coal - Australia
- Miang Besar Coal Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Independent Power Producers Association of India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Wood Mackenzie - Singapore
- Posco Energy - South Korea
- Xindia Steels Limited - India
- Bhushan Steel Limited - India
- Mintek Dendrill Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- London Commodity Brokers - England
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parry Sugars Refinery, India
- Tata Chemicals Ltd - India
- Australian Commodity Traders Exchange
- Billiton Holdings Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Trasteel International SA, Italy
- Tamil Nadu electricity Board
- Mercator Lines Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Gujarat Sidhee Cement - India
- PNOC Exploration Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- IEA Clean Coal Centre - UK
- VISA Power Limited - India
- Siam City Cement - Thailand
- Georgia Ports Authority, United States
- Aditya Birla Group - India
- Australian Coal Association
- Kumho Petrochemical, South Korea
- Madhucon Powers Ltd - India
- Parliament of New Zealand
- Sarangani Energy Corporation, Philippines
- Renaissance Capital - South Africa
- Jindal Steel & Power Ltd - India
- Orica Australia Pty. Ltd.
- Sindya Power Generating Company Private Ltd
- Sree Jayajothi Cements Limited - India
- Meenaskhi Energy Private Limited - India
- TeaM Sual Corporation - Philippines
- Eastern Coal Council - USA
- Deloitte Consulting - India
- Agrawal Coal Company - India
- GVK Power & Infra Limited - India
- Manunggal Multi Energi - Indonesia
- The Treasury - Australian Government
- CNBM International Corporation - China
- Price Waterhouse Coopers - Russia
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining and Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Uttam Galva Steels Limited - India
- Samtan Co., Ltd - South Korea
- Essar Steel Hazira Ltd - India
- GMR Energy Limited - India
- White Energy Company Limited
- Indian Oil Corporation Limited
- Kalimantan Lumbung Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- The State Trading Corporation of India Ltd
- Indogreen Group - Indonesia
- SMG Consultants - Indonesia
- Goldman Sachs - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Attock Cement Pakistan Limited
- Kepco SPC Power Corporation, Philippines
- SMC Global Power, Philippines
- Energy Development Corp, Philippines
- Toyota Tsusho Corporation, Japan
- CIMB Investment Bank - Malaysia
- Ind-Barath Power Infra Limited - India
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Central Java Power - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Central Electricity Authority - India
- Singapore Mercantile Exchange
- Economic Council, Georgia
- ASAPP Information Group - India
- Bhatia International Limited - India
- Vizag Seaport Private Limited - India
- ICICI Bank Limited - India
- Global Coal Blending Company Limited - Australia
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