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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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Thursday, 04 March 10
BANPU KEEPS JORONG OUTPUT AT 2M TONNES
Bangkok Post reported that, Banpu Plc, Asean's largest coal miner, is maintaining an output target of 2 million tonnes this year from its Jorong mi ...
Thursday, 04 March 10
THE INDIAN MARKET WAS STILL STRONG - FEARNRESEARCH
HANDY
Activity has gradually improved in the Atlantic throughout the week. All areas&n ...
Thursday, 04 March 10
GLOBAL COAL PRICES GETS SUPPORT FROM EM DEMAND
Commodity Online reported that, AP12 coal prices look well supported in 2010 thanks to positive outlook for Chinese coal demand whereas coal demand ...
Thursday, 04 March 10
THREE NEW GLOBAL PRICES INDEXES FOR COKING COAL
Commodity Online reported that, On February 26, Energy Publishing Co. broke new ground in the coal-marketing industry when it began publishing three ...
Tuesday, 02 March 10
INDIA WAS AGAIN THE WINNER IN THE EAST, WITH SUPRAMAXES FIXING CLOSE TO US$40,000/DAY FROM THE WEST COAST
There was little movement in the BDI this week but behind the scenes, the Supramax and Handy size segments posted significant gains, correcting the ...
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- Semirara Mining Corp, Philippines
- Electricity Authority, New Zealand
- Thiess Contractors Indonesia
- Vizag Seaport Private Limited - India
- Trasteel International SA, Italy
- Antam Resourcindo - Indonesia
- IEA Clean Coal Centre - UK
- San Jose City I Power Corp, Philippines
- TeaM Sual Corporation - Philippines
- Coal and Oil Company - UAE
- Bhoruka Overseas - Indonesia
- Vedanta Resources Plc - India
- Price Waterhouse Coopers - Russia
- Deloitte Consulting - India
- Kobexindo Tractors - Indoneisa
- Planning Commission, India
- London Commodity Brokers - England
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhushan Steel Limited - India
- Sojitz Corporation - Japan
- Indonesian Coal Mining Association
- Bangladesh Power Developement Board
- Bulk Trading Sa - Switzerland
- Baramulti Group, Indonesia
- Renaissance Capital - South Africa
- Thai Mozambique Logistica
- TNB Fuel Sdn Bhd - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Malabar Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Larsen & Toubro Limited - India
- Marubeni Corporation - India
- Agrawal Coal Company - India
- Kideco Jaya Agung - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Carbofer General Trading SA - India
- Semirara Mining and Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Bayan Resources Tbk. - Indonesia
- Kaltim Prima Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- Edison Trading Spa - Italy
- Jorong Barutama Greston.PT - Indonesia
- Uttam Galva Steels Limited - India
- SMG Consultants - Indonesia
- SN Aboitiz Power Inc, Philippines
- GVK Power & Infra Limited - India
- Jaiprakash Power Ventures ltd
- Straits Asia Resources Limited - Singapore
- Petron Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Dalmia Cement Bharat India
- OPG Power Generation Pvt Ltd - India
- White Energy Company Limited
- Star Paper Mills Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Global Green Power PLC Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Oldendorff Carriers - Singapore
- Savvy Resources Ltd - HongKong
- PowerSource Philippines DevCo
- Indogreen Group - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Wilmar Investment Holdings
- Pipit Mutiara Jaya. PT, Indonesia
- Kepco SPC Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement PLC, Thailand
- Attock Cement Pakistan Limited
- Madhucon Powers Ltd - India
- Mjunction Services Limited - India
- Directorate Of Revenue Intelligence - India
- Manunggal Multi Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Tata Chemicals Ltd - India
- Latin American Coal - Colombia
- Binh Thuan Hamico - Vietnam
- Intertek Mineral Services - Indonesia
- Mintek Dendrill Indonesia
- Kumho Petrochemical, South Korea
- Coastal Gujarat Power Limited - India
- Posco Energy - South Korea
- Sree Jayajothi Cements Limited - India
- CIMB Investment Bank - Malaysia
- Sical Logistics Limited - India
- Economic Council, Georgia
- Energy Link Ltd, New Zealand
- Bukit Baiduri Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The Treasury - Australian Government
- Meenaskhi Energy Private Limited - India
- Siam City Cement - Thailand
- Central Java Power - Indonesia
- Orica Australia Pty. Ltd.
- Central Electricity Authority - India
- The University of Queensland
- IHS Mccloskey Coal Group - USA
- International Coal Ventures Pvt Ltd - India
- Eastern Energy - Thailand
- Sarangani Energy Corporation, Philippines
- CNBM International Corporation - China
- GAC Shipping (India) Pvt Ltd
- Goldman Sachs - Singapore
- Essar Steel Hazira Ltd - India
- LBH Netherlands Bv - Netherlands
- Bharathi Cement Corporation - India
- Singapore Mercantile Exchange
- Port Waratah Coal Services - Australia
- PNOC Exploration Corporation - Philippines
- Energy Development Corp, Philippines
- Power Finance Corporation Ltd., India
- Grasim Industreis Ltd - India
- Banpu Public Company Limited - Thailand
- Coalindo Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Aboitiz Power Corporation - Philippines
- Videocon Industries ltd - India
- Independent Power Producers Association of India
- Gujarat Sidhee Cement - India
- Formosa Plastics Group - Taiwan
- Ministry of Finance - Indonesia
- Africa Commodities Group - South Africa
- Tamil Nadu electricity Board
- Anglo American - United Kingdom
- ICICI Bank Limited - India
- Aditya Birla Group - India
- Toyota Tsusho Corporation, Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- McConnell Dowell - Australia
- Wood Mackenzie - Singapore
- Timah Investasi Mineral - Indoneisa
- European Bulk Services B.V. - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Xindia Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- PTC India Limited - India
- Simpson Spence & Young - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Standard Chartered Bank - UAE
- Heidelberg Cement - Germany
- Merrill Lynch Commodities Europe
- Indian Oil Corporation Limited
- GN Power Mariveles Coal Plant, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PetroVietnam Power Coal Import and Supply Company
- Karaikal Port Pvt Ltd - India
- Bhatia International Limited - India
- Eastern Coal Council - USA
- Krishnapatnam Port Company Ltd. - India
- Lanco Infratech Ltd - India
- VISA Power Limited - India
- Ministry of Mines - Canada
- Medco Energi Mining Internasional
- Jindal Steel & Power Ltd - India
- Salva Resources Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Australian Coal Association
- Rio Tinto Coal - Australia
- Maheswari Brothers Coal Limited - India
- Billiton Holdings Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Bukit Makmur.PT - Indonesia
- Meralco Power Generation, Philippines
- MS Steel International - UAE
- Samtan Co., Ltd - South Korea
- Kartika Selabumi Mining - Indonesia
- Parry Sugars Refinery, India
- SMC Global Power, Philippines
- Indo Tambangraya Megah - Indonesia
- Riau Bara Harum - Indonesia
- GMR Energy Limited - India
- ASAPP Information Group - India
- Mercator Lines Limited - India
- Metalloyd Limited - United Kingdom
- The State Trading Corporation of India Ltd
- Cement Manufacturers Association - India
- Mercuria Energy - Indonesia
- Georgia Ports Authority, United States
- Indian Energy Exchange, India
- Kapuas Tunggal Persada - Indonesia
- Chamber of Mines of South Africa
- Parliament of New Zealand
- Ind-Barath Power Infra Limited - India
- Romanian Commodities Exchange
- Global Coal Blending Company Limited - Australia
- Makarim & Taira - Indonesia
- Minerals Council of Australia
- Sakthi Sugars Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Transport, Egypt
- Asmin Koalindo Tuhup - Indonesia
- Indika Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Neyveli Lignite Corporation Ltd, - India
- AsiaOL BioFuels Corp., Philippines
- Australian Commodity Traders Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- New Zealand Coal & Carbon
- Interocean Group of Companies - India
- Therma Luzon, Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Ambuja Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- India Bulls Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Generating Authority of Thailand
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