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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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Wednesday, 10 February 10
JPMORGAN FORECASTS A 5.7% GROWTH IN SEABORNE IRON ORE SHIPMENTS, 3.8% FOR COAL AND GRAIN THIS YEAR
This year volumes of iron ore transportation by sea may grow to 5.7%, coal and grain up 3.8% over numbers in 2009, Ukrrudprom reports citing analyst ...
Wednesday, 10 February 10
ANGLO AMERICAN TIPS COAL PRICE RISE AFTER RAIN, AUSTRALIAN SAYS
Anglo American Plc expects coking coal contract prices to rise after weeks of heavy rain in Queensland state cut output by as much as 10 million met ...
Wednesday, 10 February 10
KANGAROO RESOURCES COMMENCES MINING AT MAMAHAK COKING COAL PROJECT
International coal producer Kangaroo Resources has kicked off mining at its second Indonesian coal operation, the Mamahak Coking Coal Project in Eas ...
Wednesday, 10 February 10
CHINA DENIES CLIVE PALMER'S COAL DEAL
ONE of China's biggest government-owned companies yesterday repudiated mining billionaire Clive Palmer for overstating what he said was Australia' ...
Tuesday, 09 February 10
INDIANS SAY SEEKING COAL BARGAINS VIA INDEX PRICES
* Indonesian cheaper than S.African - traders
* End-users wait for price falls before tendering
Indian coal traders responsible for the bulk of ...
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- Goldman Sachs - Singapore
- Wood Mackenzie - Singapore
- IHS Mccloskey Coal Group - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- International Coal Ventures Pvt Ltd - India
- Central Electricity Authority - India
- Anglo American - United Kingdom
- Heidelberg Cement - Germany
- South Luzon Thermal Energy Corporation
- Grasim Industreis Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Central Java Power - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Straits Asia Resources Limited - Singapore
- Malabar Cements Ltd - India
- Indian Energy Exchange, India
- MS Steel International - UAE
- Georgia Ports Authority, United States
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sakthi Sugars Limited - India
- Eastern Coal Council - USA
- Aditya Birla Group - India
- Ind-Barath Power Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Chamber of Mines of South Africa
- CIMB Investment Bank - Malaysia
- Altura Mining Limited, Indonesia
- Borneo Indobara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bangladesh Power Developement Board
- London Commodity Brokers - England
- Attock Cement Pakistan Limited
- PTC India Limited - India
- New Zealand Coal & Carbon
- Energy Link Ltd, New Zealand
- Ministry of Mines - Canada
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Orica Australia Pty. Ltd.
- Trasteel International SA, Italy
- Ambuja Cements Ltd - India
- Commonwealth Bank - Australia
- Vedanta Resources Plc - India
- Semirara Mining and Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- The State Trading Corporation of India Ltd
- The University of Queensland
- VISA Power Limited - India
- Sarangani Energy Corporation, Philippines
- Medco Energi Mining Internasional
- Binh Thuan Hamico - Vietnam
- Australian Commodity Traders Exchange
- Bukit Makmur.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- TeaM Sual Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Indonesian Coal Mining Association
- Thai Mozambique Logistica
- Coal and Oil Company - UAE
- Savvy Resources Ltd - HongKong
- Marubeni Corporation - India
- Planning Commission, India
- Indo Tambangraya Megah - Indonesia
- Wilmar Investment Holdings
- PowerSource Philippines DevCo
- Sojitz Corporation - Japan
- Gujarat Mineral Development Corp Ltd - India
- PNOC Exploration Corporation - Philippines
- Rio Tinto Coal - Australia
- Thiess Contractors Indonesia
- Gujarat Sidhee Cement - India
- OPG Power Generation Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Tamil Nadu electricity Board
- Baramulti Group, Indonesia
- Coastal Gujarat Power Limited - India
- Sree Jayajothi Cements Limited - India
- Bayan Resources Tbk. - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- Samtan Co., Ltd - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate General of MIneral and Coal - Indonesia
- Petron Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Sical Logistics Limited - India
- Economic Council, Georgia
- Renaissance Capital - South Africa
- Singapore Mercantile Exchange
- Bulk Trading Sa - Switzerland
- Tata Chemicals Ltd - India
- Posco Energy - South Korea
- Mintek Dendrill Indonesia
- Vizag Seaport Private Limited - India
- Barasentosa Lestari - Indonesia
- Parliament of New Zealand
- ICICI Bank Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Mining Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Edison Trading Spa - Italy
- Meralco Power Generation, Philippines
- Bhushan Steel Limited - India
- Global Business Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Oldendorff Carriers - Singapore
- Deloitte Consulting - India
- India Bulls Power Limited - India
- Metalloyd Limited - United Kingdom
- Meenaskhi Energy Private Limited - India
- Iligan Light & Power Inc, Philippines
- Carbofer General Trading SA - India
- Chettinad Cement Corporation Ltd - India
- Jaiprakash Power Ventures ltd
- Larsen & Toubro Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Petrochimia International Co. Ltd.- Taiwan
- Maheswari Brothers Coal Limited - India
- Salva Resources Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Kobexindo Tractors - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Videocon Industries ltd - India
- Therma Luzon, Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Vijayanagar Sugar Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement PLC, Thailand
- Krishnapatnam Port Company Ltd. - India
- Formosa Plastics Group - Taiwan
- Standard Chartered Bank - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Coalindo Energy - Indonesia
- Energy Development Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kaltim Prima Coal - Indonesia
- Agrawal Coal Company - India
- Romanian Commodities Exchange
- Aboitiz Power Corporation - Philippines
- Mercator Lines Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Electricity Authority, New Zealand
- GVK Power & Infra Limited - India
- Latin American Coal - Colombia
- Bharathi Cement Corporation - India
- Power Finance Corporation Ltd., India
- Dalmia Cement Bharat India
- IEA Clean Coal Centre - UK
- Riau Bara Harum - Indonesia
- Cement Manufacturers Association - India
- LBH Netherlands Bv - Netherlands
- Australian Coal Association
- Siam City Cement - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Mjunction Services Limited - India
- Electricity Generating Authority of Thailand
- Antam Resourcindo - Indonesia
- Bhoruka Overseas - Indonesia
- San Jose City I Power Corp, Philippines
- Bhatia International Limited - India
- Ministry of Transport, Egypt
- Xindia Steels Limited - India
- Interocean Group of Companies - India
- Toyota Tsusho Corporation, Japan
- Karbindo Abesyapradhi - Indoneisa
- Kideco Jaya Agung - Indonesia
- Minerals Council of Australia
- Independent Power Producers Association of India
- Alfred C Toepfer International GmbH - Germany
- SMC Global Power, Philippines
- Uttam Galva Steels Limited - India
- Simpson Spence & Young - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- The Treasury - Australian Government
- SN Aboitiz Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- White Energy Company Limited
- European Bulk Services B.V. - Netherlands
- Indika Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Port Waratah Coal Services - Australia
- Parry Sugars Refinery, India
- McConnell Dowell - Australia
- CNBM International Corporation - China
- GAC Shipping (India) Pvt Ltd
- Rashtriya Ispat Nigam Limited - India
- AsiaOL BioFuels Corp., Philippines
- Gujarat Electricity Regulatory Commission - India
- Madhucon Powers Ltd - India
- Kumho Petrochemical, South Korea
- Banpu Public Company Limited - Thailand
- Sinarmas Energy and Mining - Indonesia
- Indogreen Group - Indonesia
- Global Coal Blending Company Limited - Australia
- Karaikal Port Pvt Ltd - India
- Makarim & Taira - Indonesia
- Lanco Infratech Ltd - India
- Eastern Energy - Thailand
- SMG Consultants - Indonesia
- Timah Investasi Mineral - Indoneisa
- ASAPP Information Group - India
- Kapuas Tunggal Persada - Indonesia
- Globalindo Alam Lestari - Indonesia
- GMR Energy Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Africa Commodities Group - South Africa
- Ministry of Finance - Indonesia
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