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Tuesday, 19 January 10
COAL FOR DOMESTIC USERS
 While the government is already almost a year behind schedule in issuing regulations to implement the new mining law, mineral producers have been worried about the domestic market obligation (DMO) that the Energy and Mining Resources Ministry imposed through a ruling late last month.
Their concern is not so much about the requirement to allocate a portion of their output to domestic users, but the lack of clarity regarding how the volume of domestic needs for each mineral is set, how the obligation will be distributed among the producers and how the prices will be determined.
Mineral producers (other than oil and natural gas) are fully aware that they should fulfill domestic needs. That requirement is also by and large stipulated in their mining contracts. However, the DMO will create new uncertainty if this obligation is not based on clear-cut regulations.
Unfortunately, the Dec. 31, 2009 decree by the energy and mineral resources minister is mostly about repressive measures for companies failing to meet their DMO. It stipulates that producers who fail to realize their DMO are liable to a 50 percent cut of their output for the following year.
What is encouraging to note is that a similar penalty is also imposed on domestic users failing to take up their annual quota — their annual quota will also be cut by 50 percent. This enforcement is important because the volume of the DMO is based on the domestic market demand, which in turn is based on the annual needs of domestic industrial users each year.
The most affected by the DMO policy are certainly coal producers, who have made Indonesia the world’s largest seaborne exporter of thermal coal with an estimated output of 230 million tons last year, of which only about 50 million tons was used locally. However, the domestic demand for coal is estimated to almost double this year with the coming on stream of several power plants run by state electricity company PT PLN, all fired by coal. They are part of the government’s crash program to build 10,000 megawatts in additional capacity at PLN’s plants.
The government has strived to achieve the right balance between maximizing export revenues from coal and also securing supplies for domestic users. The challenge, though, is how to make producers accept domestic prices as fair compared what they get from exports.
Put another way, there should be an Indonesian coal reference price index that is acceptable to both producers and users, taking into account such factors as the coal’s calorific value, moisture content, etc. Such a reference price index is crucial because, unlike other minerals that have commodity exchanges of their own for price formation, coal doesn’t have any exchange of its own.
In the past, the domestic purchasing price of different grades of coal was often considered arbitrary, which acted as a disincentive for some producers to produce and sell higher-quality coal to PLN, the largest single domestic user.
Commercially, as long as the prices are right, producers will happily sell their output to the domestic market as this will cut the delivery time and freight costs.
The problem, though, is that the latest ministerial decree does not touch at all on a pricing mechanism for the implementation of the domestic market obligation, and this is creating a sense of uncertainty among producers.
Obviously the government needs to address this pricing issue immediately through another clear-cut regulation so as not to adversely affect new investment in the mining sector.
Source: Editorial, The Jakarta Post
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Saturday, 13 March 10
OPTIMUM COAL AIMS TO RAISE R1,6 BILLION IN LISTING
All Africa reported that, COAL mining and exploration company Optimum Coal yesterday announced plans to list on the JSE at the end of the month ...
Thursday, 11 March 10
THE INDIAN MARKET WAS A BIT QUIET BUT STILL FIRM - FEARNLEYS AS
Handy - Atlantic activity has kept its firm tendency throughout the week for handies, with Atlantic RV´s fixed in the USD.16000 region. With s ...
Thursday, 11 March 10
COAL PRICES SET TO RISE AMID CONFUSION OVER QUARTERLY SYSTEM
Trading room reported that, Coal prices are tipped to rise in coming months amid constrained supply and ongoing Chinese demand, and analysts are con ...
Wednesday, 10 March 10
PROTECTED FORESTS NOW UP FOR GRABS FOR MINING
The Jakarta Post reported that, the government has just issued two new regulations on forests, which could allow protected forests to be used for co ...
Tuesday, 09 March 10
REGULATION NO.23 OF 2010 CONCERNING IMPLEMENTATION OF NEW MINING LAW, PROVIDES MORE CLARITY ON OBTAINING A IUP
COALspot.com: Indonesian government has recently issued another regulation related to Law number 4 of 2009 concerning mineral and coal mining. Two r ...
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- Chamber of Mines of South Africa
- Salva Resources Pvt Ltd - India
- Aditya Birla Group - India
- Tata Chemicals Ltd - India
- Energy Link Ltd, New Zealand
- Rio Tinto Coal - Australia
- Power Finance Corporation Ltd., India
- Chettinad Cement Corporation Ltd - India
- Wilmar Investment Holdings
- Attock Cement Pakistan Limited
- Parliament of New Zealand
- San Jose City I Power Corp, Philippines
- McConnell Dowell - Australia
- Semirara Mining Corp, Philippines
- Georgia Ports Authority, United States
- Meenaskhi Energy Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Altura Mining Limited, Indonesia
- Ambuja Cements Ltd - India
- MS Steel International - UAE
- Global Coal Blending Company Limited - Australia
- Coastal Gujarat Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Edison Trading Spa - Italy
- Australian Coal Association
- Wood Mackenzie - Singapore
- Ind-Barath Power Infra Limited - India
- Riau Bara Harum - Indonesia
- Trasteel International SA, Italy
- Indika Energy - Indonesia
- Australian Commodity Traders Exchange
- Antam Resourcindo - Indonesia
- Intertek Mineral Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- India Bulls Power Limited - India
- Port Waratah Coal Services - Australia
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement - Thailand
- VISA Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Medco Energi Mining Internasional
- Kalimantan Lumbung Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Gujarat Sidhee Cement - India
- TeaM Sual Corporation - Philippines
- Bharathi Cement Corporation - India
- Bukit Makmur.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Star Paper Mills Limited - India
- European Bulk Services B.V. - Netherlands
- Jindal Steel & Power Ltd - India
- Mercator Lines Limited - India
- PTC India Limited - India
- Bhushan Steel Limited - India
- Sinarmas Energy and Mining - Indonesia
- Ministry of Transport, Egypt
- Parry Sugars Refinery, India
- Borneo Indobara - Indonesia
- Videocon Industries ltd - India
- Ministry of Mines - Canada
- Jorong Barutama Greston.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- Madhucon Powers Ltd - India
- Mintek Dendrill Indonesia
- Alfred C Toepfer International GmbH - Germany
- Electricity Authority, New Zealand
- Karaikal Port Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- The State Trading Corporation of India Ltd
- Indo Tambangraya Megah - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sojitz Corporation - Japan
- ICICI Bank Limited - India
- Manunggal Multi Energi - Indonesia
- Makarim & Taira - Indonesia
- Agrawal Coal Company - India
- GVK Power & Infra Limited - India
- Singapore Mercantile Exchange
- Sindya Power Generating Company Private Ltd
- Siam City Cement PLC, Thailand
- Asmin Koalindo Tuhup - Indonesia
- IEA Clean Coal Centre - UK
- Karbindo Abesyapradhi - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Barasentosa Lestari - Indonesia
- SMG Consultants - Indonesia
- Tamil Nadu electricity Board
- Xindia Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- AsiaOL BioFuels Corp., Philippines
- Cigading International Bulk Terminal - Indonesia
- Lanco Infratech Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- Orica Mining Services - Indonesia
- Bhoruka Overseas - Indonesia
- Heidelberg Cement - Germany
- Sarangani Energy Corporation, Philippines
- Coalindo Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Standard Chartered Bank - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Therma Luzon, Inc, Philippines
- Dalmia Cement Bharat India
- Bangladesh Power Developement Board
- Sakthi Sugars Limited - India
- Uttam Galva Steels Limited - India
- Marubeni Corporation - India
- Iligan Light & Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- New Zealand Coal & Carbon
- Aboitiz Power Corporation - Philippines
- The Treasury - Australian Government
- Eastern Coal Council - USA
- White Energy Company Limited
- Gujarat Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- Kepco SPC Power Corporation, Philippines
- Renaissance Capital - South Africa
- Bukit Baiduri Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Indian Energy Exchange, India
- LBH Netherlands Bv - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Kumho Petrochemical, South Korea
- Samtan Co., Ltd - South Korea
- Sical Logistics Limited - India
- ASAPP Information Group - India
- Directorate Of Revenue Intelligence - India
- Larsen & Toubro Limited - India
- Electricity Generating Authority of Thailand
- Binh Thuan Hamico - Vietnam
- PNOC Exploration Corporation - Philippines
- Cement Manufacturers Association - India
- Bhatia International Limited - India
- SMC Global Power, Philippines
- Mjunction Services Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GMR Energy Limited - India
- Coal and Oil Company - UAE
- Indogreen Group - Indonesia
- Carbofer General Trading SA - India
- Metalloyd Limited - United Kingdom
- Anglo American - United Kingdom
- Kobexindo Tractors - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Ministry of Finance - Indonesia
- PowerSource Philippines DevCo
- Bank of Tokyo Mitsubishi UFJ Ltd
- Oldendorff Carriers - Singapore
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Banpu Public Company Limited - Thailand
- Timah Investasi Mineral - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Vedanta Resources Plc - India
- Independent Power Producers Association of India
- GAC Shipping (India) Pvt Ltd
- Semirara Mining and Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Central Electricity Authority - India
- Latin American Coal - Colombia
- Central Java Power - Indonesia
- Deloitte Consulting - India
- Straits Asia Resources Limited - Singapore
- Malabar Cements Ltd - India
- IHS Mccloskey Coal Group - USA
- Planning Commission, India
- Krishnapatnam Port Company Ltd. - India
- SN Aboitiz Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Minerals Council of Australia
- Indian Oil Corporation Limited
- Billiton Holdings Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Merrill Lynch Commodities Europe
- Maharashtra Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Commonwealth Bank - Australia
- Africa Commodities Group - South Africa
- Leighton Contractors Pty Ltd - Australia
- Indonesian Coal Mining Association
- Eastern Energy - Thailand
- CIMB Investment Bank - Malaysia
- Romanian Commodities Exchange
- Jaiprakash Power Ventures ltd
- Baramulti Group, Indonesia
- Pendopo Energi Batubara - Indonesia
- Economic Council, Georgia
- Global Business Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Thiess Contractors Indonesia
- CNBM International Corporation - China
- Price Waterhouse Coopers - Russia
- Savvy Resources Ltd - HongKong
- Orica Australia Pty. Ltd.
- Energy Development Corp, Philippines
- London Commodity Brokers - England
- Global Green Power PLC Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Thai Mozambique Logistica
- Petron Corporation, Philippines
- Posco Energy - South Korea
- The University of Queensland
- Vizag Seaport Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Interocean Group of Companies - India
- Goldman Sachs - Singapore
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