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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 $500 million nickel project in North Maluku in Indonesia.
"If the regulation is not amended, new investors will think over before investing because it will increase costs and not every mining company is capable of increasing their investment," said Soemarno of the Indonesia Mining Association.
Source: Reuters / Alibaba
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Monday, 16 November 09
141 VESSELS ARE EXPECTED TO LOAD 8.833 MILLION TONS OF INDONESIAN COAL BEFORE 30 NOVEMBER 2009
COALspot.com (Indonesia): 141 vessels are expected to load or sail with 8.833 million tons of Indonesian coal before 30 November 2009.
A source f ...
Sunday, 15 November 09
NALCO SHELVES SA PROJECT- PUTS IRAN PROJECT ON HOLD
The Economic Times reported that, In a twin decision on its global operations involving about Rs 27,000-crore (US$ 5.847billions) investment, the st ...
Saturday, 14 November 09
SHORT PERIOD RATES FOR SUPRAMAX WAS AT US$ 19,000 / 20,000 PER DAY FOR VESSELS OPENING FAR EAST / SE ASIA - VISTAAR SINGAPORE
COALspot.com (Singaproe): BDI continues to rally crossing the 4,000 mark. The BDI increased this week by 718 points up by 21 pct and closed at 4,111 ...
Saturday, 14 November 09
CHINA HAS BEEN THE LARGEST SINGLE BUYER OF INDONESIAN COAL IN OCTOBER, TAKING 24.37% OF TOTAL EXPORT QUANTITY OF 22.637 MILLION TONS
COALspot.com (Indonesia): China has been the largest single buyer of Indonesian coal in October 2009, taking 24.37% of total export quantity o ...
Saturday, 14 November 09
ASIA'S POWER SECTOR IS INVESTING IN COALMINES TO SECURE SUPPLIES
COALspot.com (Press Release): Asia Coal Power conference in Jakarta pinpoints growing power demand in Asia & Power sector investments in Indones ...
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- Georgia Ports Authority, United States
- PNOC Exploration Corporation - Philippines
- Energy Link Ltd, New Zealand
- Uttam Galva Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Authority, New Zealand
- Kideco Jaya Agung - Indonesia
- CNBM International Corporation - China
- PowerSource Philippines DevCo
- Metalloyd Limited - United Kingdom
- Maheswari Brothers Coal Limited - India
- Trasteel International SA, Italy
- Dalmia Cement Bharat India
- SMG Consultants - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Larsen & Toubro Limited - India
- Petron Corporation, Philippines
- Tamil Nadu electricity Board
- Singapore Mercantile Exchange
- Planning Commission, India
- Siam City Cement - Thailand
- McConnell Dowell - Australia
- Indo Tambangraya Megah - Indonesia
- Kobexindo Tractors - Indoneisa
- Antam Resourcindo - Indonesia
- Bhoruka Overseas - Indonesia
- Directorate Of Revenue Intelligence - India
- Electricity Generating Authority of Thailand
- Parliament of New Zealand
- White Energy Company Limited
- South Luzon Thermal Energy Corporation
- European Bulk Services B.V. - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Ministry of Finance - Indonesia
- Ministry of Transport, Egypt
- Chettinad Cement Corporation Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Riau Bara Harum - Indonesia
- Australian Commodity Traders Exchange
- Attock Cement Pakistan Limited
- Intertek Mineral Services - Indonesia
- Siam City Cement PLC, Thailand
- Independent Power Producers Association of India
- Karaikal Port Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Bulk Trading Sa - Switzerland
- Wilmar Investment Holdings
- CIMB Investment Bank - Malaysia
- Globalindo Alam Lestari - Indonesia
- Vizag Seaport Private Limited - India
- Price Waterhouse Coopers - Russia
- Formosa Plastics Group - Taiwan
- Salva Resources Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Sindya Power Generating Company Private Ltd
- Australian Coal Association
- Bukit Baiduri Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Sical Logistics Limited - India
- Bhatia International Limited - India
- Ceylon Electricity Board - Sri Lanka
- Lanco Infratech Ltd - India
- Orica Mining Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Indian Energy Exchange, India
- SN Aboitiz Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- Vedanta Resources Plc - India
- Oldendorff Carriers - Singapore
- Posco Energy - South Korea
- Economic Council, Georgia
- Carbofer General Trading SA - India
- Jindal Steel & Power Ltd - India
- Samtan Co., Ltd - South Korea
- The State Trading Corporation of India Ltd
- Bahari Cakrawala Sebuku - Indonesia
- LBH Netherlands Bv - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- Medco Energi Mining Internasional
- Baramulti Group, Indonesia
- Standard Chartered Bank - UAE
- Malabar Cements Ltd - India
- Tata Chemicals Ltd - India
- Rio Tinto Coal - Australia
- Directorate General of MIneral and Coal - Indonesia
- Africa Commodities Group - South Africa
- Mintek Dendrill Indonesia
- Sarangani Energy Corporation, Philippines
- ICICI Bank Limited - India
- Bharathi Cement Corporation - India
- Ind-Barath Power Infra Limited - India
- TeaM Sual Corporation - Philippines
- IEA Clean Coal Centre - UK
- Timah Investasi Mineral - Indoneisa
- GVK Power & Infra Limited - India
- Chamber of Mines of South Africa
- Krishnapatnam Port Company Ltd. - India
- Makarim & Taira - Indonesia
- Manunggal Multi Energi - Indonesia
- Wood Mackenzie - Singapore
- New Zealand Coal & Carbon
- Kartika Selabumi Mining - Indonesia
- Thiess Contractors Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Borneo Indobara - Indonesia
- Coastal Gujarat Power Limited - India
- Toyota Tsusho Corporation, Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kaltim Prima Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- GMR Energy Limited - India
- Commonwealth Bank - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Sidhee Cement - India
- Agrawal Coal Company - India
- Alfred C Toepfer International GmbH - Germany
- Ministry of Mines - Canada
- Sree Jayajothi Cements Limited - India
- Madhucon Powers Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Eastern Coal Council - USA
- The University of Queensland
- Romanian Commodities Exchange
- India Bulls Power Limited - India
- Mercuria Energy - Indonesia
- Grasim Industreis Ltd - India
- Barasentosa Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- ASAPP Information Group - India
- Essar Steel Hazira Ltd - India
- Binh Thuan Hamico - Vietnam
- Parry Sugars Refinery, India
- Meenaskhi Energy Private Limited - India
- Latin American Coal - Colombia
- Bukit Makmur.PT - Indonesia
- Edison Trading Spa - Italy
- Bhushan Steel Limited - India
- Sakthi Sugars Limited - India
- Energy Development Corp, Philippines
- MS Steel International - UAE
- Ambuja Cements Ltd - India
- London Commodity Brokers - England
- Neyveli Lignite Corporation Ltd, - India
- Sojitz Corporation - Japan
- Heidelberg Cement - Germany
- Interocean Group of Companies - India
- Holcim Trading Pte Ltd - Singapore
- Indian Oil Corporation Limited
- Meralco Power Generation, Philippines
- Minerals Council of Australia
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining Corp, Philippines
- Bangladesh Power Developement Board
- The Treasury - Australian Government
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coalindo Energy - Indonesia
- PTC India Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Leighton Contractors Pty Ltd - Australia
- Thai Mozambique Logistica
- San Jose City I Power Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Indogreen Group - Indonesia
- Deloitte Consulting - India
- Goldman Sachs - Singapore
- Videocon Industries ltd - India
- Global Business Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Altura Mining Limited, Indonesia
- Aboitiz Power Corporation - Philippines
- Xindia Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Port Waratah Coal Services - Australia
- Aditya Birla Group - India
- SMC Global Power, Philippines
- Renaissance Capital - South Africa
- Savvy Resources Ltd - HongKong
- Indika Energy - Indonesia
- Coal and Oil Company - UAE
- Jaiprakash Power Ventures ltd
- Pendopo Energi Batubara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Marubeni Corporation - India
- Star Paper Mills Limited - India
- Eastern Energy - Thailand
- Miang Besar Coal Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Central Java Power - Indonesia
- VISA Power Limited - India
- Therma Luzon, Inc, Philippines
- Central Electricity Authority - India
- Orica Australia Pty. Ltd.
- Anglo American - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Pipit Mutiara Jaya. PT, Indonesia
- Indonesian Coal Mining Association
- Merrill Lynch Commodities Europe
- Global Coal Blending Company Limited - Australia
- Cement Manufacturers Association - India
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