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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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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Uttam Galva Steels Limited - India
- Standard Chartered Bank - UAE
- Bhushan Steel Limited - India
- Wood Mackenzie - Singapore
- OPG Power Generation Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Indogreen Group - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Binh Thuan Hamico - Vietnam
- India Bulls Power Limited - India
- Ministry of Mines - Canada
- McConnell Dowell - Australia
- Xindia Steels Limited - India
- Sakthi Sugars Limited - India
- Siam City Cement - Thailand
- Star Paper Mills Limited - India
- TeaM Sual Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- Electricity Authority, New Zealand
- Global Coal Blending Company Limited - Australia
- Cigading International Bulk Terminal - Indonesia
- Goldman Sachs - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Edison Trading Spa - Italy
- Videocon Industries ltd - India
- GMR Energy Limited - India
- Posco Energy - South Korea
- Australian Coal Association
- Timah Investasi Mineral - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Finance - Indonesia
- Trasteel International SA, Italy
- Gujarat Sidhee Cement - India
- Cement Manufacturers Association - India
- Dalmia Cement Bharat India
- Mercuria Energy - Indonesia
- White Energy Company Limited
- Kapuas Tunggal Persada - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bharathi Cement Corporation - India
- Eastern Coal Council - USA
- Kepco SPC Power Corporation, Philippines
- SMG Consultants - Indonesia
- Price Waterhouse Coopers - Russia
- Leighton Contractors Pty Ltd - Australia
- Latin American Coal - Colombia
- Pendopo Energi Batubara - Indonesia
- Vizag Seaport Private Limited - India
- Coastal Gujarat Power Limited - India
- Orica Mining Services - Indonesia
- Intertek Mineral Services - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Heidelberg Cement - Germany
- Bayan Resources Tbk. - Indonesia
- The Treasury - Australian Government
- Power Finance Corporation Ltd., India
- Kumho Petrochemical, South Korea
- Australian Commodity Traders Exchange
- Savvy Resources Ltd - HongKong
- Indo Tambangraya Megah - Indonesia
- New Zealand Coal & Carbon
- VISA Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Commonwealth Bank - Australia
- Sojitz Corporation - Japan
- Madhucon Powers Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Parliament of New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Billiton Holdings Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- International Coal Ventures Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Maheswari Brothers Coal Limited - India
- Straits Asia Resources Limited - Singapore
- Mjunction Services Limited - India
- Planning Commission, India
- ASAPP Information Group - India
- Global Green Power PLC Corporation, Philippines
- Deloitte Consulting - India
- Directorate General of MIneral and Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Kartika Selabumi Mining - Indonesia
- Vedanta Resources Plc - India
- Sical Logistics Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Neyveli Lignite Corporation Ltd, - India
- Indian Energy Exchange, India
- South Luzon Thermal Energy Corporation
- Petron Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Interocean Group of Companies - India
- Parry Sugars Refinery, India
- GVK Power & Infra Limited - India
- Ind-Barath Power Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Thiess Contractors Indonesia
- Minerals Council of Australia
- San Jose City I Power Corp, Philippines
- Indonesian Coal Mining Association
- London Commodity Brokers - England
- The University of Queensland
- Bhoruka Overseas - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Lanco Infratech Ltd - India
- Aboitiz Power Corporation - Philippines
- Indian Oil Corporation Limited
- AsiaOL BioFuels Corp., Philippines
- LBH Netherlands Bv - Netherlands
- Eastern Energy - Thailand
- Indika Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Transport, Egypt
- Globalindo Alam Lestari - Indonesia
- Makarim & Taira - Indonesia
- Central Electricity Authority - India
- PNOC Exploration Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Economic Council, Georgia
- Renaissance Capital - South Africa
- Banpu Public Company Limited - Thailand
- Barasentosa Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Altura Mining Limited, Indonesia
- Meralco Power Generation, Philippines
- Mintek Dendrill Indonesia
- Jaiprakash Power Ventures ltd
- Toyota Tsusho Corporation, Japan
- PTC India Limited - India
- Wilmar Investment Holdings
- Mercator Lines Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Development Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Ceylon Electricity Board - Sri Lanka
- Sarangani Energy Corporation, Philippines
- Marubeni Corporation - India
- ICICI Bank Limited - India
- Oldendorff Carriers - Singapore
- Medco Energi Mining Internasional
- Petrochimia International Co. Ltd.- Taiwan
- Tata Chemicals Ltd - India
- Ambuja Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- CNBM International Corporation - China
- Africa Commodities Group - South Africa
- Malabar Cements Ltd - India
- The State Trading Corporation of India Ltd
- IHS Mccloskey Coal Group - USA
- Karbindo Abesyapradhi - Indoneisa
- Anglo American - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Makmur.PT - Indonesia
- Tamil Nadu electricity Board
- Baramulti Group, Indonesia
- Port Waratah Coal Services - Australia
- Bangladesh Power Developement Board
- Directorate Of Revenue Intelligence - India
- Georgia Ports Authority, United States
- SN Aboitiz Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Kobexindo Tractors - Indoneisa
- SMC Global Power, Philippines
- Larsen & Toubro Limited - India
- Electricity Generating Authority of Thailand
- Bhatia International Limited - India
- Coal and Oil Company - UAE
- Central Java Power - Indonesia
- Kaltim Prima Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Samtan Co., Ltd - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Independent Power Producers Association of India
- Borneo Indobara - Indonesia
- Rio Tinto Coal - Australia
- Grasim Industreis Ltd - India
- Carbofer General Trading SA - India
- Chettinad Cement Corporation Ltd - India
- Coalindo Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Romanian Commodities Exchange
- Asmin Koalindo Tuhup - Indonesia
- Merrill Lynch Commodities Europe
- MS Steel International - UAE
- Simpson Spence & Young - Indonesia
- Chamber of Mines of South Africa
- Miang Besar Coal Terminal - Indonesia
- Aditya Birla Group - India
- Jindal Steel & Power Ltd - India
- CIMB Investment Bank - Malaysia
- Antam Resourcindo - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Riau Bara Harum - Indonesia
- Singapore Mercantile Exchange
- Therma Luzon, Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Orica Australia Pty. Ltd.
- PowerSource Philippines DevCo
- European Bulk Services B.V. - Netherlands
- Energy Link Ltd, New Zealand
- Formosa Plastics Group - Taiwan
- IEA Clean Coal Centre - UK
- Attock Cement Pakistan Limited
- Thai Mozambique Logistica
- Agrawal Coal Company - India
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