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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, 29 October 09
PTC INDIA UNIT CHASES 2.5 MTPA INDONESIAN COAL
Reuters reported that, PTC Energy is in talks with an Indonesian firm to source 2.5 million tonnes per annum (MTPA) coal for its 350-400 MW power to ...
Thursday, 29 October 09
CHINA MAY SEEK THERMAL COAL ELSEWHERE IF AUSTRALIAN EXPORT COSTS RISE, SAYS REPORT
The Australian reported that, CHINA is likely to turn to alternative markets for thermal coal if the cost and availability of Australia's exports a ...
Thursday, 29 October 09
CURRENCIES, ASIA DEMAND TO LIFT EUROPE COAL PRICE
Supportive currency movements and strong Asian demand mean the price of coal delivered into Europe is poised to rise more than 30 percent to above $ ...
Wednesday, 28 October 09
AUSTRALIAN POWER STATION COAL PRICE TOPPED USD 73 A TONNE
Reuters reported that prices of power station coal in Australia, a benchmark for Asia, crept up for the fourth week and topped USD 73 a tonne, as a ...
Wednesday, 28 October 09
MIDDLE EAST COAL EYEING INDIAN POWER PLANTS IN EXCHANGE FOR LONG TERM COAL SUPPLY
Reuters reported that UAE's Middle East Coal is in talks to buy equity stakes in India's power plants in exchange for long term coal supply.
ME ...
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- LBH Netherlands Bv - Netherlands
- Barasentosa Lestari - Indonesia
- GMR Energy Limited - India
- IEA Clean Coal Centre - UK
- Australian Commodity Traders Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Riau Bara Harum - Indonesia
- Mjunction Services Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Marubeni Corporation - India
- Grasim Industreis Ltd - India
- Africa Commodities Group - South Africa
- Siam City Cement - Thailand
- Petron Corporation, Philippines
- Aditya Birla Group - India
- Ind-Barath Power Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Agrawal Coal Company - India
- Singapore Mercantile Exchange
- Tamil Nadu electricity Board
- Oldendorff Carriers - Singapore
- Star Paper Mills Limited - India
- Leighton Contractors Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Central Electricity Authority - India
- Cigading International Bulk Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Malabar Cements Ltd - India
- San Jose City I Power Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Energy Development Corp, Philippines
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Holcim Trading Pte Ltd - Singapore
- Coalindo Energy - Indonesia
- Mercuria Energy - Indonesia
- New Zealand Coal & Carbon
- Gujarat Sidhee Cement - India
- Global Green Power PLC Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Krishnapatnam Port Company Ltd. - India
- Ministry of Transport, Egypt
- Bukit Makmur.PT - Indonesia
- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- Bhatia International Limited - India
- Mercator Lines Limited - India
- SN Aboitiz Power Inc, Philippines
- Merrill Lynch Commodities Europe
- Romanian Commodities Exchange
- Salva Resources Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Timah Investasi Mineral - Indoneisa
- Kumho Petrochemical, South Korea
- Madhucon Powers Ltd - India
- Central Java Power - Indonesia
- Orica Mining Services - Indonesia
- Price Waterhouse Coopers - Russia
- Makarim & Taira - Indonesia
- Port Waratah Coal Services - Australia
- Kapuas Tunggal Persada - Indonesia
- Medco Energi Mining Internasional
- Altura Mining Limited, Indonesia
- Jindal Steel & Power Ltd - India
- Ambuja Cements Ltd - India
- Electricity Authority, New Zealand
- India Bulls Power Limited - India
- Xindia Steels Limited - India
- SMC Global Power, Philippines
- Chettinad Cement Corporation Ltd - India
- Indika Energy - Indonesia
- Tata Chemicals Ltd - India
- Parry Sugars Refinery, India
- GAC Shipping (India) Pvt Ltd
- Vedanta Resources Plc - India
- Bukit Asam (Persero) Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Bangladesh Power Developement Board
- Global Business Power Corporation, Philippines
- The University of Queensland
- Global Coal Blending Company Limited - Australia
- Directorate General of MIneral and Coal - Indonesia
- Mintek Dendrill Indonesia
- Sree Jayajothi Cements Limited - India
- Orica Australia Pty. Ltd.
- Sical Logistics Limited - India
- Uttam Galva Steels Limited - India
- Savvy Resources Ltd - HongKong
- Sinarmas Energy and Mining - Indonesia
- Interocean Group of Companies - India
- CNBM International Corporation - China
- Therma Luzon, Inc, Philippines
- Anglo American - United Kingdom
- Siam City Cement PLC, Thailand
- Meenaskhi Energy Private Limited - India
- ICICI Bank Limited - India
- Maheswari Brothers Coal Limited - India
- MS Steel International - UAE
- White Energy Company Limited
- European Bulk Services B.V. - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Carbofer General Trading SA - India
- The State Trading Corporation of India Ltd
- Bhoruka Overseas - Indonesia
- South Luzon Thermal Energy Corporation
- TeaM Sual Corporation - Philippines
- Wilmar Investment Holdings
- ASAPP Information Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Renaissance Capital - South Africa
- Kepco SPC Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- AsiaOL BioFuels Corp., Philippines
- Kaltim Prima Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Economic Council, Georgia
- Electricity Generating Authority of Thailand
- Baramulti Group, Indonesia
- PowerSource Philippines DevCo
- PTC India Limited - India
- Videocon Industries ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Minerals Council of Australia
- Latin American Coal - Colombia
- Bulk Trading Sa - Switzerland
- Miang Besar Coal Terminal - Indonesia
- The Treasury - Australian Government
- Indogreen Group - Indonesia
- Australian Coal Association
- London Commodity Brokers - England
- Coastal Gujarat Power Limited - India
- Indian Energy Exchange, India
- Globalindo Alam Lestari - Indonesia
- McConnell Dowell - Australia
- Semirara Mining Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- SMG Consultants - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Borneo Indobara - Indonesia
- Metalloyd Limited - United Kingdom
- Bayan Resources Tbk. - Indonesia
- VISA Power Limited - India
- Attock Cement Pakistan Limited
- CIMB Investment Bank - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- IHS Mccloskey Coal Group - USA
- Chamber of Mines of South Africa
- Edison Trading Spa - Italy
- Samtan Co., Ltd - South Korea
- Bhushan Steel Limited - India
- Binh Thuan Hamico - Vietnam
- Wood Mackenzie - Singapore
- Coal and Oil Company - UAE
- Indian Oil Corporation Limited
- PNOC Exploration Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Simpson Spence & Young - Indonesia
- Banpu Public Company Limited - Thailand
- Indo Tambangraya Megah - Indonesia
- Power Finance Corporation Ltd., India
- Antam Resourcindo - Indonesia
- Iligan Light & Power Inc, Philippines
- Ministry of Finance - Indonesia
- Standard Chartered Bank - UAE
- Kartika Selabumi Mining - Indonesia
- Heidelberg Cement - Germany
- Billiton Holdings Pty Ltd - Australia
- Vizag Seaport Private Limited - India
- Formosa Plastics Group - Taiwan
- Deloitte Consulting - India
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jaiprakash Power Ventures ltd
- Ceylon Electricity Board - Sri Lanka
- Bharathi Cement Corporation - India
- Trasteel International SA, Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Sindya Power Generating Company Private Ltd
- Cement Manufacturers Association - India
- Toyota Tsusho Corporation, Japan
- International Coal Ventures Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Goldman Sachs - Singapore
- Directorate Of Revenue Intelligence - India
- Ministry of Mines - Canada
- Georgia Ports Authority, United States
- Thiess Contractors Indonesia
- Lanco Infratech Ltd - India
- Meralco Power Generation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Posco Energy - South Korea
- OPG Power Generation Pvt Ltd - India
- Sojitz Corporation - Japan
- Indonesian Coal Mining Association
- Independent Power Producers Association of India
- Larsen & Toubro Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Commonwealth Bank - Australia
- Karaikal Port Pvt Ltd - India
- Planning Commission, India
- Dalmia Cement Bharat India
- Parliament of New Zealand
- Intertek Mineral Services - Indonesia
- Sakthi Sugars Limited - India
- Thai Mozambique Logistica
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