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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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Wednesday, 11 November 09
INDONESIA ASKS DOMESTIC COAL FIRMS TO SET ASIDE 30PCT OF OUTPUT
Indonesian government said that it had asked domestic coal producers to set aside 30% of their output next year to meet demand from new coal fired p ...
Wednesday, 11 November 09
MINING ACQUISITIONS BECOMING MORE STRATEGIC - E&Y
Mining Weekly reported that, Although miners around the world are looking to position themselves for growth, companies are being more selective when ...
Tuesday, 10 November 09
THAI COAL MINER BANPU Q3 NET UP, BEATS FORECAST
Reuters reported that, Thailand's top coal miner, Banpu, said on Tuesday its third-quarter net earnings rose a higher-than-expected 22 percent, hel ...
Monday, 09 November 09
NAPOCOR DEFERS 50,000 T COAL TENDER
Top Philippine electricity producer National Power Corp. (Napocor) has indefinitely postponed a tender for supply of 50,000 tons of steam coal sched ...
Monday, 09 November 09
SAM'S SEAFOOD HOLDINGS SET TO COMMENCE DRILLING AT INDONESIAN COAL PROJECT
Proactive Investors reported that, Sam's Seafood Holdings is preparing to kick off diamond drilling at the company's Indonesian coal project after ...
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- Savvy Resources Ltd - HongKong
- Sarangani Energy Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Intertek Mineral Services - Indonesia
- Latin American Coal - Colombia
- Bharathi Cement Corporation - India
- Australian Commodity Traders Exchange
- Jaiprakash Power Ventures ltd
- Asmin Koalindo Tuhup - Indonesia
- Sojitz Corporation - Japan
- Indonesian Coal Mining Association
- Sree Jayajothi Cements Limited - India
- Global Green Power PLC Corporation, Philippines
- Renaissance Capital - South Africa
- Siam City Cement - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Bukit Makmur.PT - Indonesia
- Eastern Coal Council - USA
- Salva Resources Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Indian Oil Corporation Limited
- Sakthi Sugars Limited - India
- Anglo American - United Kingdom
- Kaltim Prima Coal - Indonesia
- Gujarat Sidhee Cement - India
- Port Waratah Coal Services - Australia
- Lanco Infratech Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- Star Paper Mills Limited - India
- SMG Consultants - Indonesia
- Semirara Mining Corp, Philippines
- Wood Mackenzie - Singapore
- Indo Tambangraya Megah - Indonesia
- Iligan Light & Power Inc, Philippines
- Posco Energy - South Korea
- Bhushan Steel Limited - India
- Dalmia Cement Bharat India
- GAC Shipping (India) Pvt Ltd
- Meralco Power Generation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Attock Cement Pakistan Limited
- Aditya Birla Group - India
- Sical Logistics Limited - India
- Riau Bara Harum - Indonesia
- Miang Besar Coal Terminal - Indonesia
- PowerSource Philippines DevCo
- Cigading International Bulk Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Cement Manufacturers Association - India
- Parliament of New Zealand
- White Energy Company Limited
- Mintek Dendrill Indonesia
- MS Steel International - UAE
- Altura Mining Limited, Indonesia
- ICICI Bank Limited - India
- Australian Coal Association
- Formosa Plastics Group - Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Binh Thuan Hamico - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Coal and Oil Company - UAE
- IHS Mccloskey Coal Group - USA
- GN Power Mariveles Coal Plant, Philippines
- Krishnapatnam Port Company Ltd. - India
- Timah Investasi Mineral - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Central Java Power - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Essar Steel Hazira Ltd - India
- Therma Luzon, Inc, Philippines
- Kumho Petrochemical, South Korea
- Goldman Sachs - Singapore
- Madhucon Powers Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Bulk Trading Sa - Switzerland
- Electricity Authority, New Zealand
- Bukit Baiduri Energy - Indonesia
- Minerals Council of Australia
- Bhatia International Limited - India
- Planning Commission, India
- Neyveli Lignite Corporation Ltd, - India
- TeaM Sual Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Orica Australia Pty. Ltd.
- Romanian Commodities Exchange
- Holcim Trading Pte Ltd - Singapore
- Ceylon Electricity Board - Sri Lanka
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Sindya Power Generating Company Private Ltd
- Kalimantan Lumbung Energi - Indonesia
- Siam City Cement PLC, Thailand
- SMC Global Power, Philippines
- Globalindo Alam Lestari - Indonesia
- Singapore Mercantile Exchange
- Central Electricity Authority - India
- India Bulls Power Limited - India
- Maheswari Brothers Coal Limited - India
- Banpu Public Company Limited - Thailand
- PTC India Limited - India
- Interocean Group of Companies - India
- AsiaOL BioFuels Corp., Philippines
- Medco Energi Mining Internasional
- Ambuja Cements Ltd - India
- McConnell Dowell - Australia
- GVK Power & Infra Limited - India
- Borneo Indobara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Meenaskhi Energy Private Limited - India
- Edison Trading Spa - Italy
- Directorate Of Revenue Intelligence - India
- Tata Chemicals Ltd - India
- Indogreen Group - Indonesia
- Indian Energy Exchange, India
- Economic Council, Georgia
- Ministry of Finance - Indonesia
- Vedanta Resources Plc - India
- Eastern Energy - Thailand
- GMR Energy Limited - India
- Grasim Industreis Ltd - India
- Manunggal Multi Energi - Indonesia
- Toyota Tsusho Corporation, Japan
- Price Waterhouse Coopers - Russia
- Aboitiz Power Corporation - Philippines
- Energy Development Corp, Philippines
- Commonwealth Bank - Australia
- Merrill Lynch Commodities Europe
- Offshore Bulk Terminal Pte Ltd, Singapore
- Agrawal Coal Company - India
- International Coal Ventures Pvt Ltd - India
- Independent Power Producers Association of India
- Bangladesh Power Developement Board
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Business Power Corporation, Philippines
- Standard Chartered Bank - UAE
- The University of Queensland
- London Commodity Brokers - England
- Mercator Lines Limited - India
- Jindal Steel & Power Ltd - India
- Ind-Barath Power Infra Limited - India
- Videocon Industries ltd - India
- Pendopo Energi Batubara - Indonesia
- Energy Link Ltd, New Zealand
- Carbofer General Trading SA - India
- Uttam Galva Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PNOC Exploration Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- European Bulk Services B.V. - Netherlands
- CIMB Investment Bank - Malaysia
- Bayan Resources Tbk. - Indonesia
- Baramulti Group, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- The Treasury - Australian Government
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IEA Clean Coal Centre - UK
- VISA Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Deloitte Consulting - India
- Coalindo Energy - Indonesia
- Tamil Nadu electricity Board
- Electricity Generating Authority of Thailand
- Marubeni Corporation - India
- Power Finance Corporation Ltd., India
- SN Aboitiz Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Petron Corporation, Philippines
- Ministry of Mines - Canada
- Trasteel International SA, Italy
- Chamber of Mines of South Africa
- Chettinad Cement Corporation Ltd - India
- Barasentosa Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Larsen & Toubro Limited - India
- South Luzon Thermal Energy Corporation
- PetroVietnam Power Coal Import and Supply Company
- Vizag Seaport Private Limited - India
- Africa Commodities Group - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- ASAPP Information Group - India
- Makarim & Taira - Indonesia
- CNBM International Corporation - China
- Bhoruka Overseas - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- New Zealand Coal & Carbon
- Thiess Contractors Indonesia
- Semirara Mining and Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Malabar Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Kobexindo Tractors - Indoneisa
- Heidelberg Cement - Germany
- Xindia Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- Simpson Spence & Young - Indonesia
- Antam Resourcindo - Indonesia
- Rio Tinto Coal - Australia
- Indika Energy - Indonesia
- Wilmar Investment Holdings
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