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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, 05 November 09
HMS BERGBAU AG OPENING INDIAN OFFICE
Further step on internationalization track Office in Mumbai Participation in demand for coal imports
HMS Bergbau AG, is an international coal tra ...
Thursday, 05 November 09
SAM'S SEAFOOD HOLDINGS MOVES STEP CLOSER TO COAL EXPLORATION IN INDONESIA
Sam’s Seafood Holdings Limited, which is proposed to be renamed Pan Asia Corporation Limited, is moving closer to becoming an exploration and ...
Wednesday, 04 November 09
INDONESIA CAP ON COAL EXPORTS MAY HIT INDIAN POWER SECTOR
BL reported that Karnataka power sector is likely to be partially impacted by the Indonesian Government move to restrict coal exports.
Private se ...
Wednesday, 04 November 09
SA 2010 COAL EXPORTS SEEN AT 65M TO 68M TONS - ANALYSTS
South Africa's thermal coal exports could rise to as high as 68 million tonnes in 2010 but are more likely to be 64-65 million compared to 60 milli ...
Wednesday, 04 November 09
BAKRIE MAY WIN BERAU COAL BID FROM ARMADIAN
The Bakrie group is likely to be selected as buyer of PT Berau Coal, the country’s fifth-largest coal producer, two people familiar with the m ...
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- Petron Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Chamber of Mines of South Africa
- Indian Oil Corporation Limited
- Neyveli Lignite Corporation Ltd, - India
- MS Steel International - UAE
- Commonwealth Bank - Australia
- Semirara Mining Corp, Philippines
- Riau Bara Harum - Indonesia
- Parliament of New Zealand
- Ceylon Electricity Board - Sri Lanka
- Interocean Group of Companies - India
- Semirara Mining and Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Carbofer General Trading SA - India
- Essar Steel Hazira Ltd - India
- Electricity Authority, New Zealand
- SN Aboitiz Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Mines - Canada
- Georgia Ports Authority, United States
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- CIMB Investment Bank - Malaysia
- Simpson Spence & Young - Indonesia
- Gujarat Sidhee Cement - India
- Siam City Cement - Thailand
- Baramulti Group, Indonesia
- Savvy Resources Ltd - HongKong
- Rio Tinto Coal - Australia
- Kartika Selabumi Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Makarim & Taira - Indonesia
- Straits Asia Resources Limited - Singapore
- Sinarmas Energy and Mining - Indonesia
- Indogreen Group - Indonesia
- Bangladesh Power Developement Board
- Africa Commodities Group - South Africa
- London Commodity Brokers - England
- Barasentosa Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Lanco Infratech Ltd - India
- Videocon Industries ltd - India
- Trasteel International SA, Italy
- Alfred C Toepfer International GmbH - Germany
- PetroVietnam Power Coal Import and Supply Company
- Binh Thuan Hamico - Vietnam
- Intertek Mineral Services - Indonesia
- New Zealand Coal & Carbon
- Aboitiz Power Corporation - Philippines
- Vizag Seaport Private Limited - India
- Iligan Light & Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Independent Power Producers Association of India
- Ind-Barath Power Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- Electricity Generating Authority of Thailand
- LBH Netherlands Bv - Netherlands
- International Coal Ventures Pvt Ltd - India
- Ambuja Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Singapore Mercantile Exchange
- TeaM Sual Corporation - Philippines
- Indian Energy Exchange, India
- Coalindo Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Energy Link Ltd, New Zealand
- Sical Logistics Limited - India
- Wood Mackenzie - Singapore
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- Ministry of Transport, Egypt
- Metalloyd Limited - United Kingdom
- Port Waratah Coal Services - Australia
- Edison Trading Spa - Italy
- Gujarat Mineral Development Corp Ltd - India
- McConnell Dowell - Australia
- Directorate General of MIneral and Coal - Indonesia
- Tamil Nadu electricity Board
- Dalmia Cement Bharat India
- Standard Chartered Bank - UAE
- Eastern Energy - Thailand
- Meenaskhi Energy Private Limited - India
- Madhucon Powers Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The University of Queensland
- Samtan Co., Ltd - South Korea
- Jaiprakash Power Ventures ltd
- Orica Australia Pty. Ltd.
- Marubeni Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karbindo Abesyapradhi - Indoneisa
- Attock Cement Pakistan Limited
- Krishnapatnam Port Company Ltd. - India
- India Bulls Power Limited - India
- Directorate Of Revenue Intelligence - India
- Maheswari Brothers Coal Limited - India
- PowerSource Philippines DevCo
- Asmin Koalindo Tuhup - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Central Java Power - Indonesia
- Coal and Oil Company - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- Formosa Plastics Group - Taiwan
- Anglo American - United Kingdom
- Eastern Coal Council - USA
- The Treasury - Australian Government
- Vijayanagar Sugar Pvt Ltd - India
- ASAPP Information Group - India
- Gujarat Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Grasim Industreis Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- European Bulk Services B.V. - Netherlands
- Sree Jayajothi Cements Limited - India
- Meralco Power Generation, Philippines
- Borneo Indobara - Indonesia
- Pendopo Energi Batubara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Antam Resourcindo - Indonesia
- Mintek Dendrill Indonesia
- AsiaOL BioFuels Corp., Philippines
- Wilmar Investment Holdings
- Coastal Gujarat Power Limited - India
- GMR Energy Limited - India
- Sarangani Energy Corporation, Philippines
- Agrawal Coal Company - India
- Medco Energi Mining Internasional
- Bahari Cakrawala Sebuku - Indonesia
- Kobexindo Tractors - Indoneisa
- Kepco SPC Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Bukit Makmur.PT - Indonesia
- Posco Energy - South Korea
- Bhatia International Limited - India
- Billiton Holdings Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Romanian Commodities Exchange
- Orica Mining Services - Indonesia
- Oldendorff Carriers - Singapore
- IHS Mccloskey Coal Group - USA
- White Energy Company Limited
- Karaikal Port Pvt Ltd - India
- Sakthi Sugars Limited - India
- Indo Tambangraya Megah - Indonesia
- Thai Mozambique Logistica
- Kaltim Prima Coal - Indonesia
- CNBM International Corporation - China
- Jorong Barutama Greston.PT - Indonesia
- Renaissance Capital - South Africa
- Indonesian Coal Mining Association
- Deloitte Consulting - India
- Power Finance Corporation Ltd., India
- Cigading International Bulk Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- Mercator Lines Limited - India
- Sindya Power Generating Company Private Ltd
- ICICI Bank Limited - India
- South Luzon Thermal Energy Corporation
- PTC India Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Thiess Contractors Indonesia
- SMC Global Power, Philippines
- Bharathi Cement Corporation - India
- Bhoruka Overseas - Indonesia
- SMG Consultants - Indonesia
- IEA Clean Coal Centre - UK
- Chettinad Cement Corporation Ltd - India
- Altura Mining Limited, Indonesia
- Goldman Sachs - Singapore
- Tata Chemicals Ltd - India
- Salva Resources Pvt Ltd - India
- Australian Commodity Traders Exchange
- Parry Sugars Refinery, India
- Economic Council, Georgia
- Vedanta Resources Plc - India
- Petrochimia International Co. Ltd.- Taiwan
- Larsen & Toubro Limited - India
- VISA Power Limited - India
- Mercuria Energy - Indonesia
- Aditya Birla Group - India
- Latin American Coal - Colombia
- Heidelberg Cement - Germany
- Bukit Baiduri Energy - Indonesia
- Cement Manufacturers Association - India
- Global Business Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Merrill Lynch Commodities Europe
- Siam City Cement PLC, Thailand
- Minerals Council of Australia
- OPG Power Generation Pvt Ltd - India
- Star Paper Mills Limited - India
- Central Electricity Authority - India
- Australian Coal Association
- Kumho Petrochemical, South Korea
- GVK Power & Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Uttam Galva Steels Limited - India
- Energy Development Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Indika Energy - Indonesia
- Planning Commission, India
- Bulk Trading Sa - Switzerland
- Maharashtra Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- Kideco Jaya Agung - Indonesia
- Bhushan Steel Limited - India
- Price Waterhouse Coopers - Russia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mjunction Services Limited - India
- Jindal Steel & Power Ltd - India
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