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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 $500 million nickel project in North Maluku in Indonesia.
"If the regulation is not amended, new investors will think over before investing because it will increase costs and not every mining company is capable of increasing their investment," said Soemarno of the Indonesia Mining Association.
Source: Reuters / Alibaba
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Thursday, 12 November 09
FOREIGN INVESTMENT IN RUSSIAN COAL SECTOR
Reuters reported that, Russia's coal mines, particularly in the Arctic and Far East, are attracting interest from foreign investors as commodity pr ...
Thursday, 12 November 09
BANPU TO INVEST US$ 466 M
Plan targets 33.5m tonnes of coal per year
Bangkok Post reported that, Banpu Plc, Asean's largest coal miner, is planning capital investments of ...
Wednesday, 11 November 09
NORTHSTAR TAKES 40 PER CENT OF INDONESIAN MINING COMPANY
AltAssets reported that, PT Northstar Pacific Partners, the Indonesian affiliate of US private equity firm TPG, has taken a 40 per cent stake in Ind ...
Wednesday, 11 November 09
INDONESIAN COAL MINERS SOLD BIG VOLUMES OF 2010 TO CHINA
* China has scooped up large volumes of Indonesian coal
* Total exports to China in 2010 seen to exceed 20 million T
* Chinese, Indian demand may ...
Wednesday, 11 November 09
INDIAN COAL IMPORT FROM SA IN OCTOBER
Reuters reported that India imported 2.4 million tonnes of coal from South Africa's Richards Bay Coal Terminal in October 2009, 35% of the total of ...
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- Globalindo Alam Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Chamber of Mines of South Africa
- Carbofer General Trading SA - India
- Mintek Dendrill Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kideco Jaya Agung - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Indian Energy Exchange, India
- Power Finance Corporation Ltd., India
- Electricity Authority, New Zealand
- Kepco SPC Power Corporation, Philippines
- Tamil Nadu electricity Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Essar Steel Hazira Ltd - India
- Ind-Barath Power Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- OPG Power Generation Pvt Ltd - India
- Grasim Industreis Ltd - India
- Deloitte Consulting - India
- The Treasury - Australian Government
- Larsen & Toubro Limited - India
- Anglo American - United Kingdom
- Bangladesh Power Developement Board
- Mercator Lines Limited - India
- Jindal Steel & Power Ltd - India
- Kumho Petrochemical, South Korea
- The University of Queensland
- LBH Netherlands Bv - Netherlands
- Rio Tinto Coal - Australia
- Riau Bara Harum - Indonesia
- Global Business Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Agrawal Coal Company - India
- Jorong Barutama Greston.PT - Indonesia
- Xindia Steels Limited - India
- ICICI Bank Limited - India
- Trasteel International SA, Italy
- Energy Link Ltd, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Madhucon Powers Ltd - India
- Latin American Coal - Colombia
- Parliament of New Zealand
- Antam Resourcindo - Indonesia
- Chettinad Cement Corporation Ltd - India
- GAC Shipping (India) Pvt Ltd
- Miang Besar Coal Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- PNOC Exploration Corporation - Philippines
- Sojitz Corporation - Japan
- Central Java Power - Indonesia
- Kartika Selabumi Mining - Indonesia
- Economic Council, Georgia
- Star Paper Mills Limited - India
- IHS Mccloskey Coal Group - USA
- Singapore Mercantile Exchange
- Leighton Contractors Pty Ltd - Australia
- Heidelberg Cement - Germany
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Australian Coal Association
- Baramulti Group, Indonesia
- Samtan Co., Ltd - South Korea
- Thai Mozambique Logistica
- Siam City Cement - Thailand
- Aboitiz Power Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Independent Power Producers Association of India
- Oldendorff Carriers - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Indogreen Group - Indonesia
- Binh Thuan Hamico - Vietnam
- Bayan Resources Tbk. - Indonesia
- Wilmar Investment Holdings
- Planning Commission, India
- Africa Commodities Group - South Africa
- Banpu Public Company Limited - Thailand
- Bulk Trading Sa - Switzerland
- Wood Mackenzie - Singapore
- Eastern Energy - Thailand
- Ministry of Transport, Egypt
- Bhushan Steel Limited - India
- White Energy Company Limited
- Cement Manufacturers Association - India
- Gujarat Mineral Development Corp Ltd - India
- Directorate Of Revenue Intelligence - India
- GN Power Mariveles Coal Plant, Philippines
- Kobexindo Tractors - Indoneisa
- Orica Australia Pty. Ltd.
- Mjunction Services Limited - India
- Ministry of Mines - Canada
- Posco Energy - South Korea
- South Luzon Thermal Energy Corporation
- Videocon Industries ltd - India
- Sakthi Sugars Limited - India
- SN Aboitiz Power Inc, Philippines
- Attock Cement Pakistan Limited
- GMR Energy Limited - India
- Vedanta Resources Plc - India
- Australian Commodity Traders Exchange
- Billiton Holdings Pty Ltd - Australia
- Renaissance Capital - South Africa
- The State Trading Corporation of India Ltd
- Krishnapatnam Port Company Ltd. - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Merrill Lynch Commodities Europe
- Iligan Light & Power Inc, Philippines
- Meralco Power Generation, Philippines
- Metalloyd Limited - United Kingdom
- International Coal Ventures Pvt Ltd - India
- Romanian Commodities Exchange
- Salva Resources Pvt Ltd - India
- Aditya Birla Group - India
- SMC Global Power, Philippines
- India Bulls Power Limited - India
- Ministry of Finance - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petron Corporation, Philippines
- Indika Energy - Indonesia
- Port Waratah Coal Services - Australia
- Savvy Resources Ltd - HongKong
- Medco Energi Mining Internasional
- Bhatia International Limited - India
- Kapuas Tunggal Persada - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Electricity Generating Authority of Thailand
- CIMB Investment Bank - Malaysia
- Simpson Spence & Young - Indonesia
- Ambuja Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Sarangani Energy Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- MS Steel International - UAE
- Asmin Koalindo Tuhup - Indonesia
- Coal and Oil Company - UAE
- Eastern Coal Council - USA
- Sindya Power Generating Company Private Ltd
- Uttam Galva Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Dalmia Cement Bharat India
- Makarim & Taira - Indonesia
- Central Electricity Authority - India
- Altura Mining Limited, Indonesia
- PTC India Limited - India
- Vizag Seaport Private Limited - India
- Bharathi Cement Corporation - India
- Manunggal Multi Energi - Indonesia
- Marubeni Corporation - India
- Tata Chemicals Ltd - India
- Orica Mining Services - Indonesia
- Sical Logistics Limited - India
- Coastal Gujarat Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Maharashtra Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- San Jose City I Power Corp, Philippines
- Intertek Mineral Services - Indonesia
- Toyota Tsusho Corporation, Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Sidhee Cement - India
- Indian Oil Corporation Limited
- Interocean Group of Companies - India
- Malabar Cements Ltd - India
- Indonesian Coal Mining Association
- Global Green Power PLC Corporation, Philippines
- Mercuria Energy - Indonesia
- Lanco Infratech Ltd - India
- New Zealand Coal & Carbon
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining Corp, Philippines
- SMG Consultants - Indonesia
- Standard Chartered Bank - UAE
- Meenaskhi Energy Private Limited - India
- VISA Power Limited - India
- Bhoruka Overseas - Indonesia
- Parry Sugars Refinery, India
- Maheswari Brothers Coal Limited - India
- Timah Investasi Mineral - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- TeaM Sual Corporation - Philippines
- Thiess Contractors Indonesia
- Georgia Ports Authority, United States
- Borneo Indobara - Indonesia
- Straits Asia Resources Limited - Singapore
- Formosa Plastics Group - Taiwan
- Barasentosa Lestari - Indonesia
- IEA Clean Coal Centre - UK
- ASAPP Information Group - India
- Commonwealth Bank - Australia
- Kaltim Prima Coal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coalindo Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Edison Trading Spa - Italy
- PetroVietnam Power Coal Import and Supply Company
- Bahari Cakrawala Sebuku - Indonesia
- Jaiprakash Power Ventures ltd
- Neyveli Lignite Corporation Ltd, - India
- CNBM International Corporation - China
- Indo Tambangraya Megah - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Goldman Sachs - Singapore
- McConnell Dowell - Australia
- PowerSource Philippines DevCo
- London Commodity Brokers - England
- Therma Luzon, Inc, Philippines
- Minerals Council of Australia
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