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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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Sunday, 01 November 09
THE COAL MOVEMENT TO INDIA FROM SOUTH AFRICA AND INDONESIA WOULD BE CONTINUE INCREASE - VISTAAR SINGAPORE
COALspot.com (Singapore): The BDI continued to be firm with an increase of 60 points and closed at 3,103 points.
The cape index also was firm an ...
Sunday, 01 November 09
INDONESIA ADARO Q3 NET PROFIT JUMPS ON COAL DEMAND
* Q3 net profit up 131.6 percent to 1.27 trillion rupiah
* Q3 revenue up 56.8 percent to 7.12 trillion rupiah
Reuters reported that, Indonesia' ...
Sunday, 01 November 09
PT INDIKA MAY BUY STAKES IN BHPB INDONESIA OPERATIONS
Dow Jones reported that Indonesian coal producer PT Indika Energy may buy stakes in BHP Billiton Limited's Indonesian coal operations and in local ...
Sunday, 01 November 09
ADAVALE RESOURCES MAKES COAL ACQUISITIONS IN INDONESIA
Adavale Resources Limited has entered into an agreement to acquire the rights to two thermal coal projects Tapan and Jambi in Sumatra Indonesia, hel ...
Saturday, 31 October 09
PRODUCERS BENEFIT FROM COAL'S TIGHT SUPPLY AND STRONG DEMAND
The Jakarta Post reported that, The outlook for Indonesian coal producers appears promising with strong volume growth coming from both the domestic ...
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- Planning Commission, India
- Timah Investasi Mineral - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Energy Development Corp, Philippines
- Bharathi Cement Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- Bangladesh Power Developement Board
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Thai Mozambique Logistica
- Bayan Resources Tbk. - Indonesia
- CNBM International Corporation - China
- Global Business Power Corporation, Philippines
- Tamil Nadu electricity Board
- Orica Mining Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Sree Jayajothi Cements Limited - India
- Lanco Infratech Ltd - India
- Banpu Public Company Limited - Thailand
- India Bulls Power Limited - India
- Oldendorff Carriers - Singapore
- Sindya Power Generating Company Private Ltd
- Indian Oil Corporation Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- IHS Mccloskey Coal Group - USA
- Pendopo Energi Batubara - Indonesia
- PowerSource Philippines DevCo
- VISA Power Limited - India
- European Bulk Services B.V. - Netherlands
- PTC India Limited - India
- Trasteel International SA, Italy
- Energy Link Ltd, New Zealand
- Bulk Trading Sa - Switzerland
- TNB Fuel Sdn Bhd - Malaysia
- Coalindo Energy - Indonesia
- Australian Commodity Traders Exchange
- Savvy Resources Ltd - HongKong
- Essar Steel Hazira Ltd - India
- SMG Consultants - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aboitiz Power Corporation - Philippines
- Parry Sugars Refinery, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meenaskhi Energy Private Limited - India
- Bhatia International Limited - India
- Coastal Gujarat Power Limited - India
- Posco Energy - South Korea
- Indian Energy Exchange, India
- International Coal Ventures Pvt Ltd - India
- Mjunction Services Limited - India
- MS Steel International - UAE
- GMR Energy Limited - India
- Riau Bara Harum - Indonesia
- Malabar Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Romanian Commodities Exchange
- Binh Thuan Hamico - Vietnam
- Ministry of Mines - Canada
- Baramulti Group, Indonesia
- Siam City Cement PLC, Thailand
- Uttam Galva Steels Limited - India
- Siam City Cement - Thailand
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- McConnell Dowell - Australia
- Simpson Spence & Young - Indonesia
- Commonwealth Bank - Australia
- Therma Luzon, Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Tata Chemicals Ltd - India
- Videocon Industries ltd - India
- Goldman Sachs - Singapore
- Anglo American - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Mercator Lines Limited - India
- Sinarmas Energy and Mining - Indonesia
- Ambuja Cements Ltd - India
- Africa Commodities Group - South Africa
- London Commodity Brokers - England
- The State Trading Corporation of India Ltd
- Merrill Lynch Commodities Europe
- Aditya Birla Group - India
- Karaikal Port Pvt Ltd - India
- Central Electricity Authority - India
- Sarangani Energy Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Grasim Industreis Ltd - India
- Mintek Dendrill Indonesia
- Central Java Power - Indonesia
- Directorate Of Revenue Intelligence - India
- Port Waratah Coal Services - Australia
- Sical Logistics Limited - India
- TeaM Sual Corporation - Philippines
- Ministry of Transport, Egypt
- Semirara Mining and Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Indika Energy - Indonesia
- Eastern Coal Council - USA
- Jorong Barutama Greston.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- Borneo Indobara - Indonesia
- Economic Council, Georgia
- ICICI Bank Limited - India
- Kalimantan Lumbung Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Price Waterhouse Coopers - Russia
- New Zealand Coal & Carbon
- Ind-Barath Power Infra Limited - India
- Jaiprakash Power Ventures ltd
- Rio Tinto Coal - Australia
- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Power Finance Corporation Ltd., India
- Gujarat Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Straits Asia Resources Limited - Singapore
- Renaissance Capital - South Africa
- Electricity Generating Authority of Thailand
- Antam Resourcindo - Indonesia
- Indo Tambangraya Megah - Indonesia
- OPG Power Generation Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Wilmar Investment Holdings
- Petron Corporation, Philippines
- Medco Energi Mining Internasional
- Maheswari Brothers Coal Limited - India
- Makarim & Taira - Indonesia
- Metalloyd Limited - United Kingdom
- Thiess Contractors Indonesia
- Orica Australia Pty. Ltd.
- Meralco Power Generation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Edison Trading Spa - Italy
- Heidelberg Cement - Germany
- San Jose City I Power Corp, Philippines
- Australian Coal Association
- Vizag Seaport Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- Altura Mining Limited, Indonesia
- Interocean Group of Companies - India
- White Energy Company Limited
- Singapore Mercantile Exchange
- Sakthi Sugars Limited - India
- IEA Clean Coal Centre - UK
- Parliament of New Zealand
- Latin American Coal - Colombia
- GVK Power & Infra Limited - India
- Kumho Petrochemical, South Korea
- Wood Mackenzie - Singapore
- ASAPP Information Group - India
- Independent Power Producers Association of India
- Agrawal Coal Company - India
- Salva Resources Pvt Ltd - India
- Attock Cement Pakistan Limited
- Indogreen Group - Indonesia
- Ministry of Finance - Indonesia
- Iligan Light & Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Dalmia Cement Bharat India
- Star Paper Mills Limited - India
- AsiaOL BioFuels Corp., Philippines
- Minerals Council of Australia
- Directorate General of MIneral and Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Chamber of Mines of South Africa
- Bukit Makmur.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Xindia Steels Limited - India
- Jindal Steel & Power Ltd - India
- Vedanta Resources Plc - India
- Toyota Tsusho Corporation, Japan
- Marubeni Corporation - India
- Larsen & Toubro Limited - India
- Billiton Holdings Pty Ltd - Australia
- Cement Manufacturers Association - India
- Maharashtra Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coal and Oil Company - UAE
- Barasentosa Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- The University of Queensland
- Asmin Koalindo Tuhup - Indonesia
- PNOC Exploration Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Mercuria Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Global Coal Blending Company Limited - Australia
- Bhoruka Overseas - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bhushan Steel Limited - India
- Samtan Co., Ltd - South Korea
- Sojitz Corporation - Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Globalindo Alam Lestari - Indonesia
- Indonesian Coal Mining Association
- Karbindo Abesyapradhi - Indoneisa
- Georgia Ports Authority, United States
- LBH Netherlands Bv - Netherlands
- Madhucon Powers Ltd - India
- Gujarat Sidhee Cement - India
- The Treasury - Australian Government
- Deloitte Consulting - India
- Manunggal Multi Energi - Indonesia
- SMC Global Power, Philippines
- South Luzon Thermal Energy Corporation
- Carbofer General Trading SA - India
- Eastern Energy - Thailand
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