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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 $500 million nickel project in North Maluku in Indonesia.
"If the regulation is not amended, new investors will think over before investing because it will increase costs and not every mining company is capable of increasing their investment," said Soemarno of the Indonesia Mining Association.
Source: Reuters / Alibaba
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Sunday, 22 November 09
SHORT PERIOD RATES FOR SUPRAMAX WAS AT US$ 25,000/26,000 PER DAY FOR VESSELS OPENING FAR EAST / SE ASIA - VISTAAR ANALYSIS
COALspot.com (Singapore): Analyised by Capt. Radhakrishnan Reddy, Managing Director of Vistaar Shipping Services, Singapore.
BDI hits a new high ...
Friday, 20 November 09
INDONESIA UNITED TRACTORS PLANS $430 MLN CAPEX IN 2010
Reuters reported that, Indonesian heavy equipment distributor and mining contractor PT United Tractors Tbk plans capital expenditure of $430 million ...
Friday, 20 November 09
DRY BULK SHIP OWNERS HOPE RALLY WILL LAST
Boon times are still on the daily agenda of every dry bulk ship owner these days after one of the toughest year in the industry’s century-old ...
Friday, 20 November 09
NTPC LOOKING FOR LONG TERM CONTRACTS FOR COAL IMPORT
Business Standard of India reported that, State run power firm NTPC today said it is looking for long-term supply of coal from overseas market to me ...
Friday, 20 November 09
CHINESE COKING COAL SUPPLY TO BE 'TIGHT' IN 2010, KGI SAYS
Bloomberg Reported that, Stephen Wang, an analyst with KGI Securities in Taipei, comments on the outlook for Chinese steel production and demand for ...
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- CIMB Investment Bank - Malaysia
- Bukit Baiduri Energy - Indonesia
- Borneo Indobara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Trasteel International SA, Italy
- Marubeni Corporation - India
- PowerSource Philippines DevCo
- Gujarat Sidhee Cement - India
- Chettinad Cement Corporation Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Kapuas Tunggal Persada - Indonesia
- White Energy Company Limited
- Sakthi Sugars Limited - India
- Edison Trading Spa - Italy
- Siam City Cement - Thailand
- Chamber of Mines of South Africa
- Krishnapatnam Port Company Ltd. - India
- PetroVietnam Power Coal Import and Supply Company
- Kepco SPC Power Corporation, Philippines
- Malabar Cements Ltd - India
- IHS Mccloskey Coal Group - USA
- Standard Chartered Bank - UAE
- Australian Coal Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Anglo American - United Kingdom
- Indian Energy Exchange, India
- Baramulti Group, Indonesia
- Grasim Industreis Ltd - India
- McConnell Dowell - Australia
- Electricity Authority, New Zealand
- Meralco Power Generation, Philippines
- Interocean Group of Companies - India
- Meenaskhi Energy Private Limited - India
- Energy Development Corp, Philippines
- Tata Chemicals Ltd - India
- Vedanta Resources Plc - India
- Africa Commodities Group - South Africa
- Sarangani Energy Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- Renaissance Capital - South Africa
- Essar Steel Hazira Ltd - India
- Pendopo Energi Batubara - Indonesia
- Merrill Lynch Commodities Europe
- Tamil Nadu electricity Board
- Indogreen Group - Indonesia
- Therma Luzon, Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Ministry of Mines - Canada
- Romanian Commodities Exchange
- Parliament of New Zealand
- San Jose City I Power Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- Indika Energy - Indonesia
- Mjunction Services Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GMR Energy Limited - India
- Uttam Galva Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Karaikal Port Pvt Ltd - India
- Rio Tinto Coal - Australia
- The State Trading Corporation of India Ltd
- Thiess Contractors Indonesia
- Orica Australia Pty. Ltd.
- Kaltim Prima Coal - Indonesia
- Commonwealth Bank - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Madhucon Powers Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karbindo Abesyapradhi - Indoneisa
- Planning Commission, India
- Salva Resources Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- New Zealand Coal & Carbon
- VISA Power Limited - India
- Minerals Council of Australia
- Directorate General of MIneral and Coal - Indonesia
- Australian Commodity Traders Exchange
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
- Latin American Coal - Colombia
- International Coal Ventures Pvt Ltd - India
- India Bulls Power Limited - India
- Formosa Plastics Group - Taiwan
- Aditya Birla Group - India
- Mercuria Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- London Commodity Brokers - England
- Jindal Steel & Power Ltd - India
- Bhatia International Limited - India
- Carbofer General Trading SA - India
- Billiton Holdings Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Deloitte Consulting - India
- PNOC Exploration Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Jaiprakash Power Ventures ltd
- Sojitz Corporation - Japan
- Bulk Trading Sa - Switzerland
- Asmin Koalindo Tuhup - Indonesia
- PTC India Limited - India
- The University of Queensland
- Wilmar Investment Holdings
- Wood Mackenzie - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Manunggal Multi Energi - Indonesia
- Coalindo Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Lanco Infratech Ltd - India
- Ind-Barath Power Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Savvy Resources Ltd - HongKong
- Power Finance Corporation Ltd., India
- Kohat Cement Company Ltd. - Pakistan
- Sical Logistics Limited - India
- Sindya Power Generating Company Private Ltd
- Orica Mining Services - Indonesia
- Makarim & Taira - Indonesia
- Globalindo Alam Lestari - Indonesia
- Singapore Mercantile Exchange
- Energy Link Ltd, New Zealand
- Oldendorff Carriers - Singapore
- Price Waterhouse Coopers - Russia
- South Luzon Thermal Energy Corporation
- Jorong Barutama Greston.PT - Indonesia
- Central Electricity Authority - India
- The Treasury - Australian Government
- Metalloyd Limited - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- SMC Global Power, Philippines
- Independent Power Producers Association of India
- CNBM International Corporation - China
- MS Steel International - UAE
- Kideco Jaya Agung - Indonesia
- Bangladesh Power Developement Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Goldman Sachs - Singapore
- Straits Asia Resources Limited - Singapore
- Samtan Co., Ltd - South Korea
- Bhoruka Overseas - Indonesia
- Mercator Lines Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Agrawal Coal Company - India
- Timah Investasi Mineral - Indoneisa
- Xindia Steels Limited - India
- Coal and Oil Company - UAE
- Central Java Power - Indonesia
- Antam Resourcindo - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Binh Thuan Hamico - Vietnam
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining and Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Banpu Public Company Limited - Thailand
- TeaM Sual Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Dalmia Cement Bharat India
- Georgia Ports Authority, United States
- Heidelberg Cement - Germany
- Altura Mining Limited, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Miang Besar Coal Terminal - Indonesia
- ASAPP Information Group - India
- Thai Mozambique Logistica
- Riau Bara Harum - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMG Consultants - Indonesia
- Bukit Makmur.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Larsen & Toubro Limited - India
- Eastern Coal Council - USA
- Aboitiz Power Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Port Waratah Coal Services - Australia
- OPG Power Generation Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Barasentosa Lestari - Indonesia
- Cement Manufacturers Association - India
- Posco Energy - South Korea
- Petron Corporation, Philippines
- Mintek Dendrill Indonesia
- GVK Power & Infra Limited - India
- Indonesian Coal Mining Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- Vizag Seaport Private Limited - India
- Eastern Energy - Thailand
- Bhushan Steel Limited - India
- Maheswari Brothers Coal Limited - India
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- Siam City Cement PLC, Thailand
- Bayan Resources Tbk. - Indonesia
- ICICI Bank Limited - India
- Semirara Mining Corp, Philippines
- Medco Energi Mining Internasional
- Maharashtra Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Electricity Generating Authority of Thailand
- Coastal Gujarat Power Limited - India
- Indian Oil Corporation Limited
- Directorate Of Revenue Intelligence - India
- Attock Cement Pakistan Limited
- Videocon Industries ltd - India
- European Bulk Services B.V. - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Star Paper Mills Limited - India
- GAC Shipping (India) Pvt Ltd
- Sinarmas Energy and Mining - Indonesia
- Kobexindo Tractors - Indoneisa
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