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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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Thursday, 26 November 09
CIL EYES OVERSEAS ACQUISITIONS TO BRIDGE SUPPLY GAP
Coal Minister Sriprakash Jaiswal on Wednesday said that state-run coal major Coal India is looking to acquire coal blocks in the US and
othe ...
Wednesday, 25 November 09
NAPOCOR SCRAPS AWARD OF 715,000 TONS COAL
Top Philippine electricity producer National Power Corp. (Napocor) said on Wednesday it had cancelled plans to award 715,000 tons in coal supply con ...
Wednesday, 25 November 09
RISING FREIGHT RATES HIT COAL IMPORTERS
While state-owned NTPC’s 12.5 million tonne coal import order may have been aimed at plugging the shortage of coal at its thermal power plants ...
Wednesday, 25 November 09
CSN TO BUY RIVERSDALE STAKE TO BOOST COAL SUPPLIES
Cia. Siderurgica Nacional SA plans to buy 16.3 percent of Australian coal-exploration company Riversdale Mining Ltd. for about A$190.5 million ($175 ...
Tuesday, 24 November 09
ICRA DOWNGRADES TNPL`S RATING TO LAA
Credit rating agency, ICRA has revised the long term rating for the Rs 11.25 billion long-term fund-based bank facilities and Rs 1.5 billion non-con ...
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Energy - Thailand
- CNBM International Corporation - China
- Ministry of Mines - Canada
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aboitiz Power Corporation - Philippines
- Independent Power Producers Association of India
- GN Power Mariveles Coal Plant, Philippines
- Essar Steel Hazira Ltd - India
- Renaissance Capital - South Africa
- Riau Bara Harum - Indonesia
- Binh Thuan Hamico - Vietnam
- Maharashtra Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Goldman Sachs - Singapore
- Romanian Commodities Exchange
- ASAPP Information Group - India
- GVK Power & Infra Limited - India
- Sojitz Corporation - Japan
- Asmin Koalindo Tuhup - Indonesia
- Toyota Tsusho Corporation, Japan
- Deloitte Consulting - India
- PTC India Limited - India
- Bukit Makmur.PT - Indonesia
- Tamil Nadu electricity Board
- Iligan Light & Power Inc, Philippines
- Rio Tinto Coal - Australia
- McConnell Dowell - Australia
- Karaikal Port Pvt Ltd - India
- Ministry of Finance - Indonesia
- PNOC Exploration Corporation - Philippines
- Mercuria Energy - Indonesia
- Ministry of Transport, Egypt
- Marubeni Corporation - India
- Directorate Of Revenue Intelligence - India
- Makarim & Taira - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Energy Link Ltd, New Zealand
- Xindia Steels Limited - India
- Star Paper Mills Limited - India
- Jindal Steel & Power Ltd - India
- Cigading International Bulk Terminal - Indonesia
- GMR Energy Limited - India
- Agrawal Coal Company - India
- The State Trading Corporation of India Ltd
- Merrill Lynch Commodities Europe
- Sree Jayajothi Cements Limited - India
- Kapuas Tunggal Persada - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bayan Resources Tbk. - Indonesia
- Wilmar Investment Holdings
- Krishnapatnam Port Company Ltd. - India
- Indian Oil Corporation Limited
- Ambuja Cements Ltd - India
- Barasentosa Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Bhushan Steel Limited - India
- European Bulk Services B.V. - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- Thiess Contractors Indonesia
- London Commodity Brokers - England
- VISA Power Limited - India
- Indika Energy - Indonesia
- Gujarat Sidhee Cement - India
- Chamber of Mines of South Africa
- Vizag Seaport Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Planning Commission, India
- Madhucon Powers Ltd - India
- Commonwealth Bank - Australia
- Trasteel International SA, Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Kumho Petrochemical, South Korea
- Bukit Baiduri Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Electricity Authority, New Zealand
- Samtan Co., Ltd - South Korea
- Kepco SPC Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Global Coal Blending Company Limited - Australia
- Meralco Power Generation, Philippines
- Siam City Cement - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Larsen & Toubro Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Port Waratah Coal Services - Australia
- Mjunction Services Limited - India
- Attock Cement Pakistan Limited
- Straits Asia Resources Limited - Singapore
- San Jose City I Power Corp, Philippines
- Sakthi Sugars Limited - India
- Bangladesh Power Developement Board
- South Luzon Thermal Energy Corporation
- Aditya Birla Group - India
- Global Business Power Corporation, Philippines
- Coal and Oil Company - UAE
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Formosa Plastics Group - Taiwan
- IHS Mccloskey Coal Group - USA
- Economic Council, Georgia
- Medco Energi Mining Internasional
- Price Waterhouse Coopers - Russia
- Jaiprakash Power Ventures ltd
- Eastern Coal Council - USA
- The Treasury - Australian Government
- TNB Fuel Sdn Bhd - Malaysia
- SMC Global Power, Philippines
- Orica Mining Services - Indonesia
- Standard Chartered Bank - UAE
- CIMB Investment Bank - Malaysia
- Mercator Lines Limited - India
- Posco Energy - South Korea
- Anglo American - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- Grasim Industreis Ltd - India
- Heidelberg Cement - Germany
- Miang Besar Coal Terminal - Indonesia
- Wood Mackenzie - Singapore
- Sinarmas Energy and Mining - Indonesia
- Central Electricity Authority - India
- Intertek Mineral Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Cement Manufacturers Association - India
- Vedanta Resources Plc - India
- Directorate General of MIneral and Coal - Indonesia
- Orica Australia Pty. Ltd.
- OPG Power Generation Pvt Ltd - India
- Indogreen Group - Indonesia
- Indian Energy Exchange, India
- Parliament of New Zealand
- Borneo Indobara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- White Energy Company Limited
- Power Finance Corporation Ltd., India
- Savvy Resources Ltd - HongKong
- Kaltim Prima Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Timah Investasi Mineral - Indoneisa
- The University of Queensland
- Georgia Ports Authority, United States
- Interocean Group of Companies - India
- Baramulti Group, Indonesia
- Lanco Infratech Ltd - India
- ICICI Bank Limited - India
- Australian Commodity Traders Exchange
- Meenaskhi Energy Private Limited - India
- Carbofer General Trading SA - India
- IEA Clean Coal Centre - UK
- Indonesian Coal Mining Association
- Salva Resources Pvt Ltd - India
- Malabar Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- Alfred C Toepfer International GmbH - Germany
- Energy Development Corp, Philippines
- Coalindo Energy - Indonesia
- Mintek Dendrill Indonesia
- Manunggal Multi Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- New Zealand Coal & Carbon
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement PLC, Thailand
- Bulk Trading Sa - Switzerland
- Latin American Coal - Colombia
- GAC Shipping (India) Pvt Ltd
- Electricity Generating Authority of Thailand
- Metalloyd Limited - United Kingdom
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- Oldendorff Carriers - Singapore
- LBH Netherlands Bv - Netherlands
- Petron Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- International Coal Ventures Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Tata Chemicals Ltd - India
- Chettinad Cement Corporation Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Singapore Mercantile Exchange
- Australian Coal Association
- Holcim Trading Pte Ltd - Singapore
- Bhoruka Overseas - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Ind-Barath Power Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- Therma Luzon, Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Pendopo Energi Batubara - Indonesia
- Altura Mining Limited, Indonesia
- Indo Tambangraya Megah - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Uttam Galva Steels Limited - India
- Central Java Power - Indonesia
- Sarangani Energy Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- India Bulls Power Limited - India
- SMG Consultants - Indonesia
- Parry Sugars Refinery, India
- SN Aboitiz Power Inc, Philippines
- Minerals Council of Australia
- Bhatia International Limited - India
- Banpu Public Company Limited - Thailand
- MS Steel International - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Videocon Industries ltd - India
- Dalmia Cement Bharat India
- Bharathi Cement Corporation - India
- PowerSource Philippines DevCo
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