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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, 06 February 10
FREIGHT WOULD CONTINUE TO BE SOFT NEXT WEEK - VISTAAR SHIPPING
COALspot.com (Singapore): The freight market continued to soften this week including the stock markets. The main reason seems to be Chinese ne ...
Saturday, 06 February 10
COAL MINISTRY SEEKS CUT IN IMPORT DUTY
The coal ministry wants the finance ministry to reduce the 5.1% import duty on thermal coal and continue with the existing zero import duty on cokin ...
Friday, 05 February 10
IN 2010, CHINA COAL OUTPUT TO REACH AROUND 3.3BLN T
It is expected that China's coal production in 2010 will reach around 3.3bln tons. It is predicted that in the first quarter of 2010, the tight coa ...
Thursday, 04 February 10
INDIA REMAINS FIRM - FEARNRESEARCH
CHARTERING - DRY BULK
Handy
The BSI has continued it´s downward movement for 2 weeks now.Nevertheless activity in the atlantic remains bu ...
Thursday, 04 February 10
INFRASTRUCTURE DEVELOPMENT & INFRASTRUCTURE ASIA 2010
ASIA-PACIFIC MINISTERIAL CONFERENCE ON PUBLIC-PRIVATE PARTNERSHIPS FOR INFRASTRUCTURE DEVELOPMENT & INFRASTRUCTURE ASIA 2010
IPFA TO JOIN INF ...
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- Attock Cement Pakistan Limited
- Semirara Mining and Power Corporation, Philippines
- Latin American Coal - Colombia
- Gujarat Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Dalmia Cement Bharat India
- Bhoruka Overseas - Indonesia
- Wilmar Investment Holdings
- Manunggal Multi Energi - Indonesia
- Ambuja Cements Ltd - India
- Renaissance Capital - South Africa
- Karaikal Port Pvt Ltd - India
- Bhushan Steel Limited - India
- Indogreen Group - Indonesia
- Barasentosa Lestari - Indonesia
- Madhucon Powers Ltd - India
- Grasim Industreis Ltd - India
- Bukit Makmur.PT - Indonesia
- Bulk Trading Sa - Switzerland
- Essar Steel Hazira Ltd - India
- White Energy Company Limited
- Meenaskhi Energy Private Limited - India
- Siam City Cement PLC, Thailand
- Sinarmas Energy and Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Eastern Energy - Thailand
- TeaM Sual Corporation - Philippines
- IEA Clean Coal Centre - UK
- Antam Resourcindo - Indonesia
- GMR Energy Limited - India
- PTC India Limited - India
- London Commodity Brokers - England
- Parry Sugars Refinery, India
- Mercuria Energy - Indonesia
- Australian Coal Association
- Kumho Petrochemical, South Korea
- Xindia Steels Limited - India
- Commonwealth Bank - Australia
- Indian Oil Corporation Limited
- Siam City Cement - Thailand
- Heidelberg Cement - Germany
- Jorong Barutama Greston.PT - Indonesia
- ICICI Bank Limited - India
- Bukit Baiduri Energy - Indonesia
- Marubeni Corporation - India
- New Zealand Coal & Carbon
- Savvy Resources Ltd - HongKong
- Electricity Authority, New Zealand
- PowerSource Philippines DevCo
- Bahari Cakrawala Sebuku - Indonesia
- Kideco Jaya Agung - Indonesia
- Globalindo Alam Lestari - Indonesia
- Parliament of New Zealand
- Toyota Tsusho Corporation, Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Electricity Authority - India
- Ministry of Finance - Indonesia
- Global Business Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Interocean Group of Companies - India
- Mercator Lines Limited - India
- Bharathi Cement Corporation - India
- South Luzon Thermal Energy Corporation
- Therma Luzon, Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Energy Development Corp, Philippines
- Indika Energy - Indonesia
- Larsen & Toubro Limited - India
- Baramulti Group, Indonesia
- Edison Trading Spa - Italy
- Star Paper Mills Limited - India
- India Bulls Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Sakthi Sugars Limited - India
- San Jose City I Power Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Malabar Cements Ltd - India
- Thai Mozambique Logistica
- Electricity Generating Authority of Thailand
- Bhatia International Limited - India
- Timah Investasi Mineral - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Standard Chartered Bank - UAE
- Simpson Spence & Young - Indonesia
- Sical Logistics Limited - India
- Krishnapatnam Port Company Ltd. - India
- Medco Energi Mining Internasional
- Sree Jayajothi Cements Limited - India
- Romanian Commodities Exchange
- Karbindo Abesyapradhi - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- Salva Resources Pvt Ltd - India
- Petron Corporation, Philippines
- The University of Queensland
- Aboitiz Power Corporation - Philippines
- Singapore Mercantile Exchange
- Agrawal Coal Company - India
- ASAPP Information Group - India
- Indian Energy Exchange, India
- CNBM International Corporation - China
- Vizag Seaport Private Limited - India
- Iligan Light & Power Inc, Philippines
- Australian Commodity Traders Exchange
- Directorate General of MIneral and Coal - Indonesia
- Semirara Mining Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Wood Mackenzie - Singapore
- Straits Asia Resources Limited - Singapore
- Tamil Nadu electricity Board
- Indo Tambangraya Megah - Indonesia
- Binh Thuan Hamico - Vietnam
- The Treasury - Australian Government
- Makarim & Taira - Indonesia
- Altura Mining Limited, Indonesia
- Videocon Industries ltd - India
- Sojitz Corporation - Japan
- Kohat Cement Company Ltd. - Pakistan
- Mintek Dendrill Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Neyveli Lignite Corporation Ltd, - India
- Rio Tinto Coal - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Cement Manufacturers Association - India
- Economic Council, Georgia
- Global Green Power PLC Corporation, Philippines
- Lanco Infratech Ltd - India
- GAC Shipping (India) Pvt Ltd
- Ceylon Electricity Board - Sri Lanka
- Jaiprakash Power Ventures ltd
- McConnell Dowell - Australia
- Global Coal Blending Company Limited - Australia
- Oldendorff Carriers - Singapore
- Leighton Contractors Pty Ltd - Australia
- Trasteel International SA, Italy
- Uttam Galva Steels Limited - India
- Kaltim Prima Coal - Indonesia
- VISA Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Independent Power Producers Association of India
- Cigading International Bulk Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- Indonesian Coal Mining Association
- Ministry of Transport, Egypt
- The State Trading Corporation of India Ltd
- Orica Australia Pty. Ltd.
- Tata Chemicals Ltd - India
- Vedanta Resources Plc - India
- Kalimantan Lumbung Energi - Indonesia
- Anglo American - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- SN Aboitiz Power Inc, Philippines
- Orica Mining Services - Indonesia
- Energy Link Ltd, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Planning Commission, India
- Coal and Oil Company - UAE
- Aditya Birla Group - India
- Africa Commodities Group - South Africa
- Maheswari Brothers Coal Limited - India
- SMG Consultants - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- MS Steel International - UAE
- Banpu Public Company Limited - Thailand
- Chamber of Mines of South Africa
- Chettinad Cement Corporation Ltd - India
- Port Waratah Coal Services - Australia
- AsiaOL BioFuels Corp., Philippines
- Eastern Coal Council - USA
- Posco Energy - South Korea
- Kobexindo Tractors - Indoneisa
- Coastal Gujarat Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Georgia Ports Authority, United States
- CIMB Investment Bank - Malaysia
- GVK Power & Infra Limited - India
- Sarangani Energy Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- European Bulk Services B.V. - Netherlands
- Metalloyd Limited - United Kingdom
- Meralco Power Generation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Central Java Power - Indonesia
- Ministry of Mines - Canada
- GN Power Mariveles Coal Plant, Philippines
- IHS Mccloskey Coal Group - USA
- Mjunction Services Limited - India
- Carbofer General Trading SA - India
- Goldman Sachs - Singapore
- Coalindo Energy - Indonesia
- Power Finance Corporation Ltd., India
- Borneo Indobara - Indonesia
- Thiess Contractors Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Sidhee Cement - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMC Global Power, Philippines
- Riau Bara Harum - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Kapuas Tunggal Persada - Indonesia
- Ind-Barath Power Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- Minerals Council of Australia
- Alfred C Toepfer International GmbH - Germany
- Deloitte Consulting - India
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