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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 $500 million nickel project in North Maluku in Indonesia.
"If the regulation is not amended, new investors will think over before investing because it will increase costs and not every mining company is capable of increasing their investment," said Soemarno of the Indonesia Mining Association.
Source: Reuters / Alibaba
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Friday, 20 November 09
INDONESIAN CO PLANS JV WITH NAGARJUNA
Economic Times reported that, Infrastructure firm Nagarjuna Constructions Company (NCC) is set to form a joint venture with an Indonesian coal minin ...
Thursday, 19 November 09
S. KOREA TO BUY COAL FROM CHINA FOR US$ 85-90/T IN 2010
Head of one S. Korea power company on November 18 unveiled that S. Korea’s power companies may purchase coal from China at the contract price ...
Thursday, 19 November 09
SNAPSHOT OF INDONESIA'S COAL INDUSTRY - FACT BOX BY REUTERS
Indonesian plans to cap coal exports to meet domestic demand will not hit global supplies in the near term, but could start to bite in three to five ...
Thursday, 19 November 09
INDONESIA COAL EXPORTS CURB WILL TAKE TIME TO BITE
Indonesia's plans to cap coal exports to satisfy demand at home are unlikely to crimp global supplies for as long as five years, when new power pla ...
Thursday, 19 November 09
THE GOVERNMENT TO GUARANTEE COAL SUPPLIES FOR POWER PLANTS
The government guarantees coal supplies for power plants under a 10,000 MW-capacity power plant construction acceleration program.
Minister of En ...
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- Energy Link Ltd, New Zealand
- Metalloyd Limited - United Kingdom
- Central Electricity Authority - India
- SMC Global Power, Philippines
- Energy Development Corp, Philippines
- Dalmia Cement Bharat India
- Cigading International Bulk Terminal - Indonesia
- Electricity Authority, New Zealand
- Bharathi Cement Corporation - India
- Meenaskhi Energy Private Limited - India
- Australian Coal Association
- Globalindo Alam Lestari - Indonesia
- Vedanta Resources Plc - India
- Barasentosa Lestari - Indonesia
- Heidelberg Cement - Germany
- Interocean Group of Companies - India
- Global Green Power PLC Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Ambuja Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Planning Commission, India
- Makarim & Taira - Indonesia
- Manunggal Multi Energi - Indonesia
- Port Waratah Coal Services - Australia
- Bangladesh Power Developement Board
- SN Aboitiz Power Inc, Philippines
- Mintek Dendrill Indonesia
- Georgia Ports Authority, United States
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- PowerSource Philippines DevCo
- Asmin Koalindo Tuhup - Indonesia
- Baramulti Group, Indonesia
- Indonesian Coal Mining Association
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- Altura Mining Limited, Indonesia
- Vizag Seaport Private Limited - India
- Deloitte Consulting - India
- Commonwealth Bank - Australia
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- Ind-Barath Power Infra Limited - India
- Price Waterhouse Coopers - Russia
- Siam City Cement PLC, Thailand
- Eastern Energy - Thailand
- Kumho Petrochemical, South Korea
- Leighton Contractors Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Kideco Jaya Agung - Indonesia
- Madhucon Powers Ltd - India
- Sakthi Sugars Limited - India
- Chamber of Mines of South Africa
- Ministry of Mines - Canada
- Antam Resourcindo - Indonesia
- Riau Bara Harum - Indonesia
- Indogreen Group - Indonesia
- Orica Mining Services - Indonesia
- Power Finance Corporation Ltd., India
- Directorate General of MIneral and Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Alfred C Toepfer International GmbH - Germany
- SMG Consultants - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Singapore Mercantile Exchange
- Sojitz Corporation - Japan
- Directorate Of Revenue Intelligence - India
- IHS Mccloskey Coal Group - USA
- Tamil Nadu electricity Board
- Wilmar Investment Holdings
- TNB Fuel Sdn Bhd - Malaysia
- Coastal Gujarat Power Limited - India
- Thai Mozambique Logistica
- Siam City Cement - Thailand
- Anglo American - United Kingdom
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- Kepco SPC Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- GVK Power & Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Ceylon Electricity Board - Sri Lanka
- Toyota Tsusho Corporation, Japan
- Economic Council, Georgia
- Star Paper Mills Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Finance - Indonesia
- Karaikal Port Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Energy Exchange, India
- PetroVietnam Power Coal Import and Supply Company
- Posco Energy - South Korea
- Bukit Baiduri Energy - Indonesia
- The University of Queensland
- Coalindo Energy - Indonesia
- Larsen & Toubro Limited - India
- Miang Besar Coal Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Pendopo Energi Batubara - Indonesia
- Kaltim Prima Coal - Indonesia
- White Energy Company Limited
- Indika Energy - Indonesia
- Romanian Commodities Exchange
- ASAPP Information Group - India
- Minerals Council of Australia
- Savvy Resources Ltd - HongKong
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jindal Steel & Power Ltd - India
- Rio Tinto Coal - Australia
- McConnell Dowell - Australia
- Jorong Barutama Greston.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Krishnapatnam Port Company Ltd. - India
- IEA Clean Coal Centre - UK
- Carbofer General Trading SA - India
- ICICI Bank Limited - India
- Jaiprakash Power Ventures ltd
- Kapuas Tunggal Persada - Indonesia
- Banpu Public Company Limited - Thailand
- Cement Manufacturers Association - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meralco Power Generation, Philippines
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Therma Luzon, Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Aditya Birla Group - India
- Bahari Cakrawala Sebuku - Indonesia
- OPG Power Generation Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Merrill Lynch Commodities Europe
- Agrawal Coal Company - India
- Holcim Trading Pte Ltd - Singapore
- PTC India Limited - India
- Medco Energi Mining Internasional
- Orica Australia Pty. Ltd.
- Chettinad Cement Corporation Ltd - India
- Sindya Power Generating Company Private Ltd
- Standard Chartered Bank - UAE
- TeaM Sual Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Africa Commodities Group - South Africa
- Timah Investasi Mineral - Indoneisa
- Iligan Light & Power Inc, Philippines
- VISA Power Limited - India
- Eastern Coal Council - USA
- Ministry of Transport, Egypt
- Thiess Contractors Indonesia
- Malabar Cements Ltd - India
- The Treasury - Australian Government
- Intertek Mineral Services - Indonesia
- Essar Steel Hazira Ltd - India
- Grasim Industreis Ltd - India
- Independent Power Producers Association of India
- LBH Netherlands Bv - Netherlands
- Bhoruka Overseas - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bhushan Steel Limited - India
- Coal and Oil Company - UAE
- Sree Jayajothi Cements Limited - India
- Semirara Mining Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- South Luzon Thermal Energy Corporation
- Bukit Asam (Persero) Tbk - Indonesia
- GMR Energy Limited - India
- PNOC Exploration Corporation - Philippines
- Videocon Industries ltd - India
- Mjunction Services Limited - India
- Xindia Steels Limited - India
- Indian Oil Corporation Limited
- Tata Chemicals Ltd - India
- Petron Corporation, Philippines
- Latin American Coal - Colombia
- Gujarat Mineral Development Corp Ltd - India
- Australian Commodity Traders Exchange
- Mercator Lines Limited - India
- Kartika Selabumi Mining - Indonesia
- Gujarat Sidhee Cement - India
- MS Steel International - UAE
- Attock Cement Pakistan Limited
- London Commodity Brokers - England
- Electricity Generating Authority of Thailand
- Uttam Galva Steels Limited - India
- New Zealand Coal & Carbon
- San Jose City I Power Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Trasteel International SA, Italy
- Lanco Infratech Ltd - India
- Sical Logistics Limited - India
- Kobexindo Tractors - Indoneisa
- Edison Trading Spa - Italy
- Global Business Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Parliament of New Zealand
- Goldman Sachs - Singapore
- Binh Thuan Hamico - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- European Bulk Services B.V. - Netherlands
- Marubeni Corporation - India
- India Bulls Power Limited - India
- The State Trading Corporation of India Ltd
- International Coal Ventures Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Indo Tambangraya Megah - Indonesia
- Bhatia International Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bulk Trading Sa - Switzerland
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