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