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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 February 10
INDONESIA ISSUES NEW MINING REGULATIONS
Indonesia has issued two new regulations under its mining law to allow firms to start obtaining mining permits, in a move that should increase certa ...
Saturday, 13 February 10
COAL INDIA 2010/11 COAL IMPORTS TO JUMP - EXEC
Coal imports by state-run Coal India Ltd are likely to soar to 6-10 million tonnes in fiscal 2010/11 from an expected 1.5-1.7 million tonnes in the ...
Saturday, 13 February 10
RULES MAY FREE $10B OF MINING PROJECTS IN INDONESIA
The government announced on Friday that it had issued two implementing regulations for the new Mining Law that will clear the way for the developmen ...
Saturday, 13 February 10
INDONESIA OFFERS TAX INCENTIVES FOR RENEWABLE ENERGY
Indonesia is offering tax incentives to develop renewable energy projects, including geothermal energy, to cut dependency on fossil fuels, a decree ...
Friday, 12 February 10
MECHEL EYES 2010 COAL OUTPUT AT 28-29 MLN T
Russian steel and coking coal producer Mechel expects coal output to reach 28-29 million tonnes this year, returning to pre-crisis levels thanks to ...
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- Jaiprakash Power Ventures ltd
- Planning Commission, India
- Kumho Petrochemical, South Korea
- Cigading International Bulk Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- IHS Mccloskey Coal Group - USA
- Economic Council, Georgia
- European Bulk Services B.V. - Netherlands
- Sree Jayajothi Cements Limited - India
- South Luzon Thermal Energy Corporation
- Semirara Mining Corp, Philippines
- Petron Corporation, Philippines
- Tata Chemicals Ltd - India
- MS Steel International - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement - Thailand
- SN Aboitiz Power Inc, Philippines
- The Treasury - Australian Government
- Ministry of Finance - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Marubeni Corporation - India
- Straits Asia Resources Limited - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Binh Thuan Hamico - Vietnam
- Global Business Power Corporation, Philippines
- Ministry of Mines - Canada
- Offshore Bulk Terminal Pte Ltd, Singapore
- Larsen & Toubro Limited - India
- Commonwealth Bank - Australia
- Mintek Dendrill Indonesia
- Ceylon Electricity Board - Sri Lanka
- Gujarat Sidhee Cement - India
- LBH Netherlands Bv - Netherlands
- India Bulls Power Limited - India
- Altura Mining Limited, Indonesia
- TeaM Sual Corporation - Philippines
- Lanco Infratech Ltd - India
- Mjunction Services Limited - India
- Meenaskhi Energy Private Limited - India
- Agrawal Coal Company - India
- Indika Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Savvy Resources Ltd - HongKong
- Videocon Industries ltd - India
- Sakthi Sugars Limited - India
- McConnell Dowell - Australia
- Vizag Seaport Private Limited - India
- Ind-Barath Power Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Orica Mining Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Parry Sugars Refinery, India
- GAC Shipping (India) Pvt Ltd
- Rashtriya Ispat Nigam Limited - India
- Simpson Spence & Young - Indonesia
- Riau Bara Harum - Indonesia
- Renaissance Capital - South Africa
- Essar Steel Hazira Ltd - India
- Aditya Birla Group - India
- Sical Logistics Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CIMB Investment Bank - Malaysia
- Latin American Coal - Colombia
- Coal and Oil Company - UAE
- Mercuria Energy - Indonesia
- Oldendorff Carriers - Singapore
- Billiton Holdings Pty Ltd - Australia
- Australian Commodity Traders Exchange
- PTC India Limited - India
- Samtan Co., Ltd - South Korea
- Xindia Steels Limited - India
- Indogreen Group - Indonesia
- Ministry of Transport, Egypt
- VISA Power Limited - India
- Wood Mackenzie - Singapore
- Sojitz Corporation - Japan
- Georgia Ports Authority, United States
- Kobexindo Tractors - Indoneisa
- Uttam Galva Steels Limited - India
- SMC Global Power, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Central Java Power - Indonesia
- Bhatia International Limited - India
- Formosa Plastics Group - Taiwan
- Makarim & Taira - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Eastern Coal Council - USA
- SMG Consultants - Indonesia
- Energy Link Ltd, New Zealand
- Minerals Council of Australia
- Semirara Mining and Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- GMR Energy Limited - India
- Madhucon Powers Ltd - India
- Maheswari Brothers Coal Limited - India
- Orica Australia Pty. Ltd.
- Ambuja Cements Ltd - India
- Electricity Generating Authority of Thailand
- Global Green Power PLC Corporation, Philippines
- Thiess Contractors Indonesia
- Therma Luzon, Inc, Philippines
- Intertek Mineral Services - Indonesia
- Edison Trading Spa - Italy
- Coalindo Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- GVK Power & Infra Limited - India
- Barasentosa Lestari - Indonesia
- Attock Cement Pakistan Limited
- Dalmia Cement Bharat India
- Standard Chartered Bank - UAE
- Deloitte Consulting - India
- Baramulti Group, Indonesia
- Price Waterhouse Coopers - Russia
- Star Paper Mills Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Kapuas Tunggal Persada - Indonesia
- Jindal Steel & Power Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Bulk Trading Sa - Switzerland
- Rio Tinto Coal - Australia
- Posco Energy - South Korea
- CNBM International Corporation - China
- GN Power Mariveles Coal Plant, Philippines
- Banpu Public Company Limited - Thailand
- Wilmar Investment Holdings
- London Commodity Brokers - England
- IEA Clean Coal Centre - UK
- Mercator Lines Limited - India
- PowerSource Philippines DevCo
- Australian Coal Association
- Chamber of Mines of South Africa
- Kaltim Prima Coal - Indonesia
- Siam City Cement PLC, Thailand
- Gujarat Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- ASAPP Information Group - India
- Sarangani Energy Corporation, Philippines
- Malabar Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Electricity Authority, New Zealand
- Cement Manufacturers Association - India
- Indian Energy Exchange, India
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Thai Mozambique Logistica
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Carbofer General Trading SA - India
- Alfred C Toepfer International GmbH - Germany
- Kideco Jaya Agung - Indonesia
- Power Finance Corporation Ltd., India
- Holcim Trading Pte Ltd - Singapore
- Indonesian Coal Mining Association
- Borneo Indobara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- San Jose City I Power Corp, Philippines
- Independent Power Producers Association of India
- Merrill Lynch Commodities Europe
- Eastern Energy - Thailand
- Pendopo Energi Batubara - Indonesia
- Goldman Sachs - Singapore
- Heidelberg Cement - Germany
- Directorate Of Revenue Intelligence - India
- Anglo American - United Kingdom
- Port Waratah Coal Services - Australia
- Bangladesh Power Developement Board
- PNOC Exploration Corporation - Philippines
- Tamil Nadu electricity Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ICICI Bank Limited - India
- Africa Commodities Group - South Africa
- Trasteel International SA, Italy
- Bayan Resources Tbk. - Indonesia
- Metalloyd Limited - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Energy Development Corp, Philippines
- Central Electricity Authority - India
- White Energy Company Limited
- Karaikal Port Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- New Zealand Coal & Carbon
- Indo Tambangraya Megah - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vedanta Resources Plc - India
- Kohat Cement Company Ltd. - Pakistan
- Kepco SPC Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Medco Energi Mining Internasional
- Global Coal Blending Company Limited - Australia
- Bhushan Steel Limited - India
- Meralco Power Generation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Romanian Commodities Exchange
- Grasim Industreis Ltd - India
- Antam Resourcindo - Indonesia
- The University of Queensland
- Indian Oil Corporation Limited
- International Coal Ventures Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Parliament of New Zealand
- Bukit Makmur.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Salva Resources Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Singapore Mercantile Exchange
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