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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, 13 November 09
API4 IGNORES LOW COAL TRADES - SWISS SINGAPORE
* Jan, Feb S.Africa coal prices hit 12-month highs
* Indian trader says deals done dollars below index
Reuters reported that, the physical coal ...
Thursday, 12 November 09
INDONESIA'S BUMI COAL PRODUCTION TO INCREASE
The sale is predicted to jump 14 percent to 58 million tons.
Viva News reported that, PT Bumi Resources Tbk. (BUMI) projected that the company's ...
Thursday, 12 November 09
INDIA'S BHEL IS IN INDONESIA NOW WITH THE COST EFFECTIVE CFBC BASED BOILER TURBINE PACKAGES
COALspot.com(Indonesia): BHEL, the largest engineering and manufacturing enterprise in India in the energy-related / infrastructure sector, is now f ...
Thursday, 12 November 09
NTPC FARAKKA AND KAHALGAON UNITS SHUT DOWN ON COAL SHORTAGE
Operations at two units each of power major NTPC Ltd’s 1600 MW Farakka and the 2340 MW Kahalgaon stations have ground to a halt due to an acut ...
Thursday, 12 November 09
GANGAVARAM PORT SETS RECORD BY DISCHARGING 80,514 TONNE OF COAL CARGO
Gangavaram Port, the deepest port in the country with water depth of 20 meters, has achieved an unprecedented milestone by discharging 80,514 metric ...
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- Anglo American - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Mjunction Services Limited - India
- Directorate Of Revenue Intelligence - India
- Oldendorff Carriers - Singapore
- Bangladesh Power Developement Board
- Port Waratah Coal Services - Australia
- Parry Sugars Refinery, India
- Global Coal Blending Company Limited - Australia
- India Bulls Power Limited - India
- Wood Mackenzie - Singapore
- Semirara Mining and Power Corporation, Philippines
- Romanian Commodities Exchange
- Chettinad Cement Corporation Ltd - India
- McConnell Dowell - Australia
- Salva Resources Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mintek Dendrill Indonesia
- Mercuria Energy - Indonesia
- Australian Coal Association
- IHS Mccloskey Coal Group - USA
- The University of Queensland
- Iligan Light & Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Baiduri Energy - Indonesia
- Thiess Contractors Indonesia
- Ministry of Mines - Canada
- Orica Mining Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Finance - Indonesia
- VISA Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Manunggal Multi Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Antam Resourcindo - Indonesia
- PTC India Limited - India
- Global Green Power PLC Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Directorate General of MIneral and Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Economic Council, Georgia
- Xindia Steels Limited - India
- Lanco Infratech Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- Merrill Lynch Commodities Europe
- Commonwealth Bank - Australia
- Sakthi Sugars Limited - India
- Aditya Birla Group - India
- Coal and Oil Company - UAE
- Indogreen Group - Indonesia
- CIMB Investment Bank - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Heidelberg Cement - Germany
- Baramulti Group, Indonesia
- MS Steel International - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Timah Investasi Mineral - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Karbindo Abesyapradhi - Indoneisa
- New Zealand Coal & Carbon
- GVK Power & Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Tata Chemicals Ltd - India
- Goldman Sachs - Singapore
- Samtan Co., Ltd - South Korea
- Star Paper Mills Limited - India
- Kartika Selabumi Mining - Indonesia
- Dalmia Cement Bharat India
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Transport, Egypt
- Krishnapatnam Port Company Ltd. - India
- International Coal Ventures Pvt Ltd - India
- Central Java Power - Indonesia
- Petron Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bharathi Cement Corporation - India
- Electricity Authority, New Zealand
- Bhushan Steel Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- OPG Power Generation Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Makarim & Taira - Indonesia
- European Bulk Services B.V. - Netherlands
- Australian Commodity Traders Exchange
- Gujarat Sidhee Cement - India
- Sindya Power Generating Company Private Ltd
- Binh Thuan Hamico - Vietnam
- Uttam Galva Steels Limited - India
- Metalloyd Limited - United Kingdom
- Simpson Spence & Young - Indonesia
- Maheswari Brothers Coal Limited - India
- SMG Consultants - Indonesia
- ICICI Bank Limited - India
- PNOC Exploration Corporation - Philippines
- Minerals Council of Australia
- Chamber of Mines of South Africa
- Banpu Public Company Limited - Thailand
- Kumho Petrochemical, South Korea
- Siam City Cement - Thailand
- Rashtriya Ispat Nigam Limited - India
- Formosa Plastics Group - Taiwan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ind-Barath Power Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Attock Cement Pakistan Limited
- PowerSource Philippines DevCo
- Carbofer General Trading SA - India
- Indian Energy Exchange, India
- The Treasury - Australian Government
- Cigading International Bulk Terminal - Indonesia
- Borneo Indobara - Indonesia
- San Jose City I Power Corp, Philippines
- Eastern Energy - Thailand
- Toyota Tsusho Corporation, Japan
- Altura Mining Limited, Indonesia
- Cement Manufacturers Association - India
- Eastern Coal Council - USA
- Interocean Group of Companies - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Georgia Ports Authority, United States
- Pendopo Energi Batubara - Indonesia
- South Luzon Thermal Energy Corporation
- Bahari Cakrawala Sebuku - Indonesia
- Indonesian Coal Mining Association
- Sical Logistics Limited - India
- Riau Bara Harum - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- Jaiprakash Power Ventures ltd
- Straits Asia Resources Limited - Singapore
- Energy Link Ltd, New Zealand
- Intertek Mineral Services - Indonesia
- Singapore Mercantile Exchange
- Electricity Generating Authority of Thailand
- Gujarat Mineral Development Corp Ltd - India
- Planning Commission, India
- Malabar Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Central Electricity Authority - India
- Barasentosa Lestari - Indonesia
- Parliament of New Zealand
- Meralco Power Generation, Philippines
- Renaissance Capital - South Africa
- Therma Luzon, Inc, Philippines
- Wilmar Investment Holdings
- Indian Oil Corporation Limited
- Trasteel International SA, Italy
- Aboitiz Power Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Coalindo Energy - Indonesia
- London Commodity Brokers - England
- Orica Australia Pty. Ltd.
- Independent Power Producers Association of India
- Alfred C Toepfer International GmbH - Germany
- Sarangani Energy Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Africa Commodities Group - South Africa
- Miang Besar Coal Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- LBH Netherlands Bv - Netherlands
- Thai Mozambique Logistica
- Ambuja Cements Ltd - India
- GMR Energy Limited - India
- Vizag Seaport Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Globalindo Alam Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- Global Business Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Bhoruka Overseas - Indonesia
- Meenaskhi Energy Private Limited - India
- Power Finance Corporation Ltd., India
- Tamil Nadu electricity Board
- Kaltim Prima Coal - Indonesia
- Sojitz Corporation - Japan
- Price Waterhouse Coopers - Russia
- Energy Development Corp, Philippines
- Deloitte Consulting - India
- Bayan Resources Tbk. - Indonesia
- Larsen & Toubro Limited - India
- CNBM International Corporation - China
- Rio Tinto Coal - Australia
- Medco Energi Mining Internasional
- Indo Tambangraya Megah - Indonesia
- Semirara Mining Corp, Philippines
- Grasim Industreis Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Posco Energy - South Korea
- Latin American Coal - Colombia
- SMC Global Power, Philippines
- Savvy Resources Ltd - HongKong
- Edison Trading Spa - Italy
- Madhucon Powers Ltd - India
- ASAPP Information Group - India
- Siam City Cement PLC, Thailand
- Kepco SPC Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Standard Chartered Bank - UAE
- Marubeni Corporation - India
- Videocon Industries ltd - India
- White Energy Company Limited
- Indika Energy - Indonesia
- Agrawal Coal Company - India
- Asmin Koalindo Tuhup - Indonesia
- Kalimantan Lumbung Energi - Indonesia
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