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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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Saturday, 31 October 09
FLSMIDTH WINS MAJOR INDIAN COAL HANDLING PROJECT
Top global supplier of minerals processing and materials handling equipment, FL smidth, has won another important coal handling contract in India
...
Saturday, 31 October 09
INDIA OPENING POWER SECTOR TO PRIVATE INVESTMENT, COAL STILL THE FUEL OF CHOICE
Energy Tribune reported that, With coal-fired power plants as the primary source, India’s electricity generation sector space has been dominat ...
Friday, 30 October 09
MINERS TOLD TO SPEND ON LOCAL SERVICE FIRMS
The energy and mineral resources ministry has issued a ministerial regulation ordering mining firms to prioritize hiring domestic service companies ...
Friday, 30 October 09
TATA POWER MAY BUY COAL FROM RIVERSDALE'S MOZAMBIQUE MINES
Bloomberg reported that, Tata Power Ltd., India’s biggest electricity generator outside state control, may buy coal from a mine in Mozambique ...
Thursday, 29 October 09
MMTC AWARDED 12.5 MILLION TONS TO THREE INDIAN TRADERS
COALspot.com (India): State-run trading firm MMTC awarded tenders for the import of 12.5 million tonnes of coal for NTPC to three Indian coal trader ...
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- Barasentosa Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Madhucon Powers Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Coal and Oil Company - UAE
- Kohat Cement Company Ltd. - Pakistan
- ASAPP Information Group - India
- Semirara Mining and Power Corporation, Philippines
- McConnell Dowell - Australia
- Electricity Authority, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Goldman Sachs - Singapore
- Bulk Trading Sa - Switzerland
- Meenaskhi Energy Private Limited - India
- Eastern Coal Council - USA
- Indian Oil Corporation Limited
- Alfred C Toepfer International GmbH - Germany
- Ministry of Transport, Egypt
- Medco Energi Mining Internasional
- Mercator Lines Limited - India
- Essar Steel Hazira Ltd - India
- MS Steel International - UAE
- Cigading International Bulk Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Manunggal Multi Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Heidelberg Cement - Germany
- Semirara Mining Corp, Philippines
- Minerals Council of Australia
- Global Green Power PLC Corporation, Philippines
- Global Business Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Global Coal Blending Company Limited - Australia
- European Bulk Services B.V. - Netherlands
- Tata Chemicals Ltd - India
- CNBM International Corporation - China
- The University of Queensland
- Straits Asia Resources Limited - Singapore
- Samtan Co., Ltd - South Korea
- Ind-Barath Power Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- SMC Global Power, Philippines
- Toyota Tsusho Corporation, Japan
- Mercuria Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Independent Power Producers Association of India
- Neyveli Lignite Corporation Ltd, - India
- Bayan Resources Tbk. - Indonesia
- Commonwealth Bank - Australia
- Karaikal Port Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Malabar Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Salva Resources Pvt Ltd - India
- Sakthi Sugars Limited - India
- Altura Mining Limited, Indonesia
- Thai Mozambique Logistica
- Wood Mackenzie - Singapore
- Gujarat Sidhee Cement - India
- Australian Coal Association
- Banpu Public Company Limited - Thailand
- Bukit Makmur.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- GMR Energy Limited - India
- Coastal Gujarat Power Limited - India
- The State Trading Corporation of India Ltd
- Parliament of New Zealand
- Intertek Mineral Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- South Luzon Thermal Energy Corporation
- London Commodity Brokers - England
- Ceylon Electricity Board - Sri Lanka
- Orica Mining Services - Indonesia
- ICICI Bank Limited - India
- Uttam Galva Steels Limited - India
- Therma Luzon, Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- Bhatia International Limited - India
- Dalmia Cement Bharat India
- Indika Energy - Indonesia
- Georgia Ports Authority, United States
- Deloitte Consulting - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karbindo Abesyapradhi - Indoneisa
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- Aboitiz Power Corporation - Philippines
- Romanian Commodities Exchange
- International Coal Ventures Pvt Ltd - India
- Renaissance Capital - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Antam Resourcindo - Indonesia
- Central Electricity Authority - India
- AsiaOL BioFuels Corp., Philippines
- Mintek Dendrill Indonesia
- Marubeni Corporation - India
- Oldendorff Carriers - Singapore
- Tamil Nadu electricity Board
- SMG Consultants - Indonesia
- Maheswari Brothers Coal Limited - India
- Globalindo Alam Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- PTC India Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PowerSource Philippines DevCo
- Vedanta Resources Plc - India
- Metalloyd Limited - United Kingdom
- Kepco SPC Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
- Petron Corporation, Philippines
- Xindia Steels Limited - India
- Economic Council, Georgia
- Orica Australia Pty. Ltd.
- The Treasury - Australian Government
- Price Waterhouse Coopers - Russia
- VISA Power Limited - India
- CIMB Investment Bank - Malaysia
- Planning Commission, India
- Power Finance Corporation Ltd., India
- GVK Power & Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- Formosa Plastics Group - Taiwan
- Jindal Steel & Power Ltd - India
- Directorate Of Revenue Intelligence - India
- Trasteel International SA, Italy
- Coalindo Energy - Indonesia
- Vizag Seaport Private Limited - India
- Borneo Indobara - Indonesia
- Mjunction Services Limited - India
- White Energy Company Limited
- Kobexindo Tractors - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- New Zealand Coal & Carbon
- Eastern Energy - Thailand
- Krishnapatnam Port Company Ltd. - India
- Ministry of Finance - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Energy Link Ltd, New Zealand
- Electricity Generating Authority of Thailand
- Attock Cement Pakistan Limited
- Africa Commodities Group - South Africa
- India Bulls Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Latin American Coal - Colombia
- Ministry of Mines - Canada
- Merrill Lynch Commodities Europe
- Thiess Contractors Indonesia
- Bharathi Cement Corporation - India
- IHS Mccloskey Coal Group - USA
- Cement Manufacturers Association - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- SN Aboitiz Power Inc, Philippines
- Star Paper Mills Limited - India
- Binh Thuan Hamico - Vietnam
- Sarangani Energy Corporation, Philippines
- Chamber of Mines of South Africa
- Kaltim Prima Coal - Indonesia
- Indonesian Coal Mining Association
- PNOC Exploration Corporation - Philippines
- Port Waratah Coal Services - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- Meralco Power Generation, Philippines
- Indian Energy Exchange, India
- Baramulti Group, Indonesia
- Anglo American - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Indogreen Group - Indonesia
- Wilmar Investment Holdings
- Ambuja Cements Ltd - India
- Carbofer General Trading SA - India
- TNB Fuel Sdn Bhd - Malaysia
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- Riau Bara Harum - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Sojitz Corporation - Japan
- Standard Chartered Bank - UAE
- Sinarmas Energy and Mining - Indonesia
- Energy Development Corp, Philippines
- Posco Energy - South Korea
- Siam City Cement - Thailand
- Sical Logistics Limited - India
- Kapuas Tunggal Persada - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bangladesh Power Developement Board
- Central Java Power - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Edison Trading Spa - Italy
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- Agrawal Coal Company - India
- Gujarat Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- GAC Shipping (India) Pvt Ltd
- Lanco Infratech Ltd - India
- OPG Power Generation Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Singapore Mercantile Exchange
- Savvy Resources Ltd - HongKong
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