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