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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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Tuesday, 09 February 10
EURO COAL-PROMPT SLIDES WITH OIL PRICES
* April S.African cargo trades at $83.50/T FOB, unchanged
* April DES cargo trades at $74.75 a tonne, down $1/T
* Russia's Kuzbassrazrezugol sees ...
Monday, 08 February 10
BLACK RIDGE MINING APPOINTS INDEPENDENT CONSULTANT
Australian-listed Black Ridge Mining has announced the appointment of David Tuit as an independent consultant to assist with the assessment of the c ...
Monday, 08 February 10
SOUTH AFRICAN EXPORT COAL RISES FOR FIRST TIME IN FOUR WEEKS
Prices for coal shipped from South Africa’s Richards Bay, the continent’s biggest export facility for the fuel, posted their first gain ...
Monday, 08 February 10
NTPC HOPES TO START ON 500-MW PROJECT IN SRI LANKA BY FEB-END
NTPC sources told Business Standard, “All formalities from our government and NTPC have been completed.
The opinion of the Sri Lankan atto ...
Sunday, 07 February 10
AN AUSTRALIAN FIRM HAS SIGNED A $60BN DEAL TO SUPPLY COAL TO CHINESE POWER STATIONS
Clive Palmer, chairman of the company, Resourcehouse, said it was Australia's "biggest ever export contract".
Under the deal, the firm ...
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- Indian Energy Exchange, India
- Barasentosa Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Borneo Indobara - Indonesia
- Latin American Coal - Colombia
- MS Steel International - UAE
- Kartika Selabumi Mining - Indonesia
- Ambuja Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- India Bulls Power Limited - India
- Energy Link Ltd, New Zealand
- Globalindo Alam Lestari - Indonesia
- New Zealand Coal & Carbon
- Wilmar Investment Holdings
- Directorate Of Revenue Intelligence - India
- Bharathi Cement Corporation - India
- Metalloyd Limited - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Star Paper Mills Limited - India
- Grasim Industreis Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The University of Queensland
- Jindal Steel & Power Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Rio Tinto Coal - Australia
- Bhatia International Limited - India
- Eastern Energy - Thailand
- Mercuria Energy - Indonesia
- Uttam Galva Steels Limited - India
- Indika Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Global Coal Blending Company Limited - Australia
- Directorate General of MIneral and Coal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Deloitte Consulting - India
- Salva Resources Pvt Ltd - India
- Australian Coal Association
- IEA Clean Coal Centre - UK
- Iligan Light & Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Renaissance Capital - South Africa
- Cement Manufacturers Association - India
- Parry Sugars Refinery, India
- Dalmia Cement Bharat India
- Commonwealth Bank - Australia
- Therma Luzon, Inc, Philippines
- Kumho Petrochemical, South Korea
- Toyota Tsusho Corporation, Japan
- Anglo American - United Kingdom
- International Coal Ventures Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sakthi Sugars Limited - India
- Tata Chemicals Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Business Power Corporation, Philippines
- Makarim & Taira - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Singapore Mercantile Exchange
- VISA Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Ministry of Transport, Egypt
- Tamil Nadu electricity Board
- Semirara Mining and Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- ASAPP Information Group - India
- White Energy Company Limited
- Africa Commodities Group - South Africa
- CIMB Investment Bank - Malaysia
- Meralco Power Generation, Philippines
- Orica Mining Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- Vedanta Resources Plc - India
- Pipit Mutiara Jaya. PT, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Price Waterhouse Coopers - Russia
- Bahari Cakrawala Sebuku - Indonesia
- Sree Jayajothi Cements Limited - India
- Siam City Cement PLC, Thailand
- Attock Cement Pakistan Limited
- Coalindo Energy - Indonesia
- Baramulti Group, Indonesia
- Banpu Public Company Limited - Thailand
- Port Waratah Coal Services - Australia
- Goldman Sachs - Singapore
- Chettinad Cement Corporation Ltd - India
- Bhoruka Overseas - Indonesia
- Thiess Contractors Indonesia
- The State Trading Corporation of India Ltd
- Miang Besar Coal Terminal - Indonesia
- Videocon Industries ltd - India
- GVK Power & Infra Limited - India
- Medco Energi Mining Internasional
- Parliament of New Zealand
- Kepco SPC Power Corporation, Philippines
- Larsen & Toubro Limited - India
- GMR Energy Limited - India
- Maheswari Brothers Coal Limited - India
- Electricity Generating Authority of Thailand
- Australian Commodity Traders Exchange
- Kideco Jaya Agung - Indonesia
- Indian Oil Corporation Limited
- Ministry of Mines - Canada
- Indo Tambangraya Megah - Indonesia
- Simpson Spence & Young - Indonesia
- McConnell Dowell - Australia
- Bulk Trading Sa - Switzerland
- European Bulk Services B.V. - Netherlands
- Carbofer General Trading SA - India
- Gujarat Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- Vijayanagar Sugar Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Sojitz Corporation - Japan
- Madhucon Powers Ltd - India
- Altura Mining Limited, Indonesia
- Eastern Coal Council - USA
- Agrawal Coal Company - India
- Antam Resourcindo - Indonesia
- Ind-Barath Power Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Straits Asia Resources Limited - Singapore
- Semirara Mining Corp, Philippines
- Minerals Council of Australia
- PTC India Limited - India
- Aboitiz Power Corporation - Philippines
- SMG Consultants - Indonesia
- Gujarat Sidhee Cement - India
- Romanian Commodities Exchange
- Petron Corporation, Philippines
- Siam City Cement - Thailand
- Coal and Oil Company - UAE
- Bayan Resources Tbk. - Indonesia
- Mjunction Services Limited - India
- IHS Mccloskey Coal Group - USA
- Power Finance Corporation Ltd., India
- SMC Global Power, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- CNBM International Corporation - China
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Trasteel International SA, Italy
- Aditya Birla Group - India
- Sical Logistics Limited - India
- Indonesian Coal Mining Association
- Mercator Lines Limited - India
- Pendopo Energi Batubara - Indonesia
- Planning Commission, India
- Sarangani Energy Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Interocean Group of Companies - India
- Chamber of Mines of South Africa
- Meenaskhi Energy Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Binh Thuan Hamico - Vietnam
- The Treasury - Australian Government
- Lanco Infratech Ltd - India
- Heidelberg Cement - Germany
- Orica Australia Pty. Ltd.
- Indogreen Group - Indonesia
- South Luzon Thermal Energy Corporation
- Malabar Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Sindya Power Generating Company Private Ltd
- Savvy Resources Ltd - HongKong
- Georgia Ports Authority, United States
- Energy Development Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Intertek Mineral Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Economic Council, Georgia
- San Jose City I Power Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Electricity Authority - India
- Karaikal Port Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Posco Energy - South Korea
- Rashtriya Ispat Nigam Limited - India
- PowerSource Philippines DevCo
- Ministry of Finance - Indonesia
- Coastal Gujarat Power Limited - India
- Mintek Dendrill Indonesia
- Bhushan Steel Limited - India
- ICICI Bank Limited - India
- Marubeni Corporation - India
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- PetroVietnam Power Coal Import and Supply Company
- Karbindo Abesyapradhi - Indoneisa
- Timah Investasi Mineral - Indoneisa
- Vizag Seaport Private Limited - India
- Manunggal Multi Energi - Indonesia
- Central Java Power - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- Electricity Authority, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Independent Power Producers Association of India
- Petrochimia International Co. Ltd.- Taiwan
- Xindia Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- TeaM Sual Corporation - Philippines
- Standard Chartered Bank - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Bangladesh Power Developement Board
- London Commodity Brokers - England
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