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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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- Global Green Power PLC Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Ministry of Transport, Egypt
- Renaissance Capital - South Africa
- Central Java Power - Indonesia
- Central Electricity Authority - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indika Energy - Indonesia
- Aditya Birla Group - India
- Indo Tambangraya Megah - Indonesia
- MS Steel International - UAE
- Anglo American - United Kingdom
- Coalindo Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Attock Cement Pakistan Limited
- Rashtriya Ispat Nigam Limited - India
- Leighton Contractors Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Jaiprakash Power Ventures ltd
- Gujarat Mineral Development Corp Ltd - India
- Australian Coal Association
- Maharashtra Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- Kideco Jaya Agung - Indonesia
- SMG Consultants - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Krishnapatnam Port Company Ltd. - India
- Bangladesh Power Developement Board
- TNB Fuel Sdn Bhd - Malaysia
- Maheswari Brothers Coal Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Karaikal Port Pvt Ltd - India
- Africa Commodities Group - South Africa
- Latin American Coal - Colombia
- Petron Corporation, Philippines
- Bhatia International Limited - India
- Global Business Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Indian Energy Exchange, India
- Jindal Steel & Power Ltd - India
- Bukit Makmur.PT - Indonesia
- Georgia Ports Authority, United States
- PowerSource Philippines DevCo
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- Singapore Mercantile Exchange
- SMC Global Power, Philippines
- Borneo Indobara - Indonesia
- Kaltim Prima Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- European Bulk Services B.V. - Netherlands
- Ambuja Cements Ltd - India
- CNBM International Corporation - China
- Tamil Nadu electricity Board
- Karbindo Abesyapradhi - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- White Energy Company Limited
- Thiess Contractors Indonesia
- Wood Mackenzie - Singapore
- Carbofer General Trading SA - India
- Uttam Galva Steels Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GN Power Mariveles Coal Plant, Philippines
- Sical Logistics Limited - India
- The University of Queensland
- Energy Link Ltd, New Zealand
- Australian Commodity Traders Exchange
- Standard Chartered Bank - UAE
- Heidelberg Cement - Germany
- South Luzon Thermal Energy Corporation
- Vedanta Resources Plc - India
- Kalimantan Lumbung Energi - Indonesia
- Energy Development Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Independent Power Producers Association of India
- Kepco SPC Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Mintek Dendrill Indonesia
- PTC India Limited - India
- Madhucon Powers Ltd - India
- GMR Energy Limited - India
- Barasentosa Lestari - Indonesia
- The Treasury - Australian Government
- Xindia Steels Limited - India
- Merrill Lynch Commodities Europe
- Billiton Holdings Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- India Bulls Power Limited - India
- Kumho Petrochemical, South Korea
- Ministry of Mines - Canada
- Bulk Trading Sa - Switzerland
- Binh Thuan Hamico - Vietnam
- Chamber of Mines of South Africa
- Cigading International Bulk Terminal - Indonesia
- ASAPP Information Group - India
- Aboitiz Power Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- The State Trading Corporation of India Ltd
- PetroVietnam Power Coal Import and Supply Company
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Price Waterhouse Coopers - Russia
- Planning Commission, India
- Electricity Generating Authority of Thailand
- Economic Council, Georgia
- Chettinad Cement Corporation Ltd - India
- New Zealand Coal & Carbon
- Bayan Resources Tbk. - Indonesia
- Globalindo Alam Lestari - Indonesia
- ICICI Bank Limited - India
- Baramulti Group, Indonesia
- Gujarat Sidhee Cement - India
- Vizag Seaport Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- IEA Clean Coal Centre - UK
- Mjunction Services Limited - India
- Kobexindo Tractors - Indoneisa
- Medco Energi Mining Internasional
- Oldendorff Carriers - Singapore
- Altura Mining Limited, Indonesia
- Therma Luzon, Inc, Philippines
- McConnell Dowell - Australia
- Goldman Sachs - Singapore
- Deloitte Consulting - India
- Parliament of New Zealand
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- GVK Power & Infra Limited - India
- Makarim & Taira - Indonesia
- Indian Oil Corporation Limited
- Eastern Coal Council - USA
- Essar Steel Hazira Ltd - India
- Romanian Commodities Exchange
- Manunggal Multi Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- Dalmia Cement Bharat India
- Mercator Lines Limited - India
- PNOC Exploration Corporation - Philippines
- Mercuria Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Posco Energy - South Korea
- Thai Mozambique Logistica
- Indogreen Group - Indonesia
- Port Waratah Coal Services - Australia
- Power Finance Corporation Ltd., India
- Commonwealth Bank - Australia
- TeaM Sual Corporation - Philippines
- Tata Chemicals Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Larsen & Toubro Limited - India
- Electricity Authority, New Zealand
- OPG Power Generation Pvt Ltd - India
- Parry Sugars Refinery, India
- Antam Resourcindo - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Wilmar Investment Holdings
- Agrawal Coal Company - India
- Siam City Cement PLC, Thailand
- Cement Manufacturers Association - India
- Riau Bara Harum - Indonesia
- Coal and Oil Company - UAE
- London Commodity Brokers - England
- Indonesian Coal Mining Association
- Global Coal Blending Company Limited - Australia
- Malabar Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sarangani Energy Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- San Jose City I Power Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Ministry of Finance - Indonesia
- Rio Tinto Coal - Australia
- Marubeni Corporation - India
- Banpu Public Company Limited - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement - Thailand
- Formosa Plastics Group - Taiwan
- Holcim Trading Pte Ltd - Singapore
- Intertek Mineral Services - Indonesia
- Interocean Group of Companies - India
- Sakthi Sugars Limited - India
- LBH Netherlands Bv - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Videocon Industries ltd - India
- Metalloyd Limited - United Kingdom
- Kartika Selabumi Mining - Indonesia
- Bhushan Steel Limited - India
- Minerals Council of Australia
- Orica Mining Services - Indonesia
- Trasteel International SA, Italy
- Alfred C Toepfer International GmbH - Germany
- Samtan Co., Ltd - South Korea
- Edison Trading Spa - Italy
- Directorate Of Revenue Intelligence - India
- Star Paper Mills Limited - India
- SN Aboitiz Power Inc, Philippines
- Meralco Power Generation, Philippines
- Salva Resources Pvt Ltd - India
- Bharathi Cement Corporation - India
- Sojitz Corporation - Japan
- Lanco Infratech Ltd - India
- Orica Australia Pty. Ltd.
- Eastern Energy - Thailand
- Miang Besar Coal Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Grasim Industreis Ltd - India
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