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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, 19 November 09
FAST-TRACK FOCUS ON COAL POWER MAY COST INDONESIA BILLIONS
The Jakartaglobe reported that, As it begins to tap its massive coal reserves to generate cheap electricity, Indonesia may face additional costs of ...
Wednesday, 18 November 09
THAI PTT PLANS COAL MINE INVESTMENT IN INDONESIA
* To conclude Indonesian coal mine buy in 6 months
* Sees coal output jumping to 20 mln tonnes in five years
Reuters reported that, PTT , ...
Wednesday, 18 November 09
ASIA-PACIFIC MINISTERIAL CONFERENCE ON PUBLIC-PRIVATE PARTNERSHIPS FOR INFRASTRUCTURE DEVELOPMENT
“Building Asia’s Infrastructure”
COALspot.com (Indonesia) Press Release: Infrastructure Asia 2010 is Asia’s premier infra ...
Wednesday, 18 November 09
AMBUJA COAL TENDER PRICES EQUATE TO $61.50/T FOB
Reuters reported that, coal prices achieved by Indian cement maker Gujarat Ambuja in its early November tender equate to $61.50 a tonne FOB Richards ...
Tuesday, 17 November 09
JSW STEEL MAY SPEND $500 MILLION TO ACQUIRE COAL MINES OVERSEAS
JSW Steel Ltd., India’s third- biggest producer, may spend $500 million buying coal mines overseas, securing supplies for its local expansion. ...
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- LBH Netherlands Bv - Netherlands
- Thai Mozambique Logistica
- Indonesian Coal Mining Association
- GMR Energy Limited - India
- Dalmia Cement Bharat India
- Ind-Barath Power Infra Limited - India
- Star Paper Mills Limited - India
- Banpu Public Company Limited - Thailand
- Tamil Nadu electricity Board
- The Treasury - Australian Government
- IEA Clean Coal Centre - UK
- Kobexindo Tractors - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Rashtriya Ispat Nigam Limited - India
- Globalindo Alam Lestari - Indonesia
- Parliament of New Zealand
- Eastern Energy - Thailand
- White Energy Company Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SN Aboitiz Power Inc, Philippines
- Romanian Commodities Exchange
- Larsen & Toubro Limited - India
- The State Trading Corporation of India Ltd
- Sakthi Sugars Limited - India
- South Luzon Thermal Energy Corporation
- European Bulk Services B.V. - Netherlands
- London Commodity Brokers - England
- India Bulls Power Limited - India
- Bhatia International Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- Indogreen Group - Indonesia
- Interocean Group of Companies - India
- Medco Energi Mining Internasional
- Sree Jayajothi Cements Limited - India
- Toyota Tsusho Corporation, Japan
- Therma Luzon, Inc, Philippines
- Wood Mackenzie - Singapore
- Mintek Dendrill Indonesia
- Sindya Power Generating Company Private Ltd
- Binh Thuan Hamico - Vietnam
- OPG Power Generation Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Eastern Coal Council - USA
- Global Green Power PLC Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Georgia Ports Authority, United States
- AsiaOL BioFuels Corp., Philippines
- Cigading International Bulk Terminal - Indonesia
- Agrawal Coal Company - India
- Gujarat Sidhee Cement - India
- Bangladesh Power Developement Board
- Sical Logistics Limited - India
- Latin American Coal - Colombia
- Meralco Power Generation, Philippines
- Wilmar Investment Holdings
- Anglo American - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Development Corp, Philippines
- Economic Council, Georgia
- Gujarat Mineral Development Corp Ltd - India
- Bharathi Cement Corporation - India
- Sarangani Energy Corporation, Philippines
- Commonwealth Bank - Australia
- Uttam Galva Steels Limited - India
- Kumho Petrochemical, South Korea
- Mjunction Services Limited - India
- IHS Mccloskey Coal Group - USA
- Mercuria Energy - Indonesia
- Barasentosa Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Intertek Mineral Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Central Java Power - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- Riau Bara Harum - Indonesia
- Electricity Authority, New Zealand
- Power Finance Corporation Ltd., India
- PNOC Exploration Corporation - Philippines
- Cement Manufacturers Association - India
- Essar Steel Hazira Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Meenaskhi Energy Private Limited - India
- Aditya Birla Group - India
- Coastal Gujarat Power Limited - India
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bulk Trading Sa - Switzerland
- Pendopo Energi Batubara - Indonesia
- Coal and Oil Company - UAE
- PetroVietnam Power Coal Import and Supply Company
- Aboitiz Power Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Chamber of Mines of South Africa
- Ministry of Finance - Indonesia
- Goldman Sachs - Singapore
- Africa Commodities Group - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Marubeni Corporation - India
- Semirara Mining Corp, Philippines
- Bhushan Steel Limited - India
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Vedanta Resources Plc - India
- Bukit Baiduri Energy - Indonesia
- Makarim & Taira - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bayan Resources Tbk. - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Petron Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Mercator Lines Limited - India
- ICICI Bank Limited - India
- Electricity Generating Authority of Thailand
- Semirara Mining and Power Corporation, Philippines
- Xindia Steels Limited - India
- ASAPP Information Group - India
- Parry Sugars Refinery, India
- Karbindo Abesyapradhi - Indoneisa
- New Zealand Coal & Carbon
- Maheswari Brothers Coal Limited - India
- Metalloyd Limited - United Kingdom
- PTC India Limited - India
- CIMB Investment Bank - Malaysia
- Sojitz Corporation - Japan
- Directorate Of Revenue Intelligence - India
- Deloitte Consulting - India
- Independent Power Producers Association of India
- PowerSource Philippines DevCo
- San Jose City I Power Corp, Philippines
- Ministry of Mines - Canada
- Madhucon Powers Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Planning Commission, India
- TeaM Sual Corporation - Philippines
- Minerals Council of Australia
- The University of Queensland
- Kaltim Prima Coal - Indonesia
- SMC Global Power, Philippines
- Altura Mining Limited, Indonesia
- Indo Tambangraya Megah - Indonesia
- Coalindo Energy - Indonesia
- Carbofer General Trading SA - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Borneo Indobara - Indonesia
- Vizag Seaport Private Limited - India
- Trasteel International SA, Italy
- Ambuja Cements Ltd - India
- Renaissance Capital - South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Edison Trading Spa - Italy
- Simpson Spence & Young - Indonesia
- Australian Coal Association
- Neyveli Lignite Corporation Ltd, - India
- Indian Oil Corporation Limited
- Antam Resourcindo - Indonesia
- Videocon Industries ltd - India
- Oldendorff Carriers - Singapore
- Jindal Steel & Power Ltd - India
- Singapore Mercantile Exchange
- Salva Resources Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Jorong Barutama Greston.PT - Indonesia
- SMG Consultants - Indonesia
- Thiess Contractors Indonesia
- Price Waterhouse Coopers - Russia
- Bukit Makmur.PT - Indonesia
- Ministry of Transport, Egypt
- Grasim Industreis Ltd - India
- Standard Chartered Bank - UAE
- McConnell Dowell - Australia
- Baramulti Group, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Iligan Light & Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Orica Australia Pty. Ltd.
- Asmin Koalindo Tuhup - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Posco Energy - South Korea
- Heidelberg Cement - Germany
- Kideco Jaya Agung - Indonesia
- Straits Asia Resources Limited - Singapore
- Samtan Co., Ltd - South Korea
- Energy Link Ltd, New Zealand
- Tata Chemicals Ltd - India
- Global Business Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Formosa Plastics Group - Taiwan
- Attock Cement Pakistan Limited
- Indika Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rio Tinto Coal - Australia
- Lanco Infratech Ltd - India
- Siam City Cement PLC, Thailand
- Central Electricity Authority - India
- Australian Commodity Traders Exchange
- GVK Power & Infra Limited - India
- MS Steel International - UAE
- Global Coal Blending Company Limited - Australia
- Malabar Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Merrill Lynch Commodities Europe
- VISA Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Orica Mining Services - Indonesia
- Savvy Resources Ltd - HongKong
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