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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, 19 January 10
CESC TO BUY 100,000 MT OF INDONESIAN SUB BITUMINOUS COAL
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Tuesday, 19 January 10
RISING DEMAND FROM POWER FIRMS TO PUSH COAL PRICES
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Tuesday, 19 January 10
ESSAR'S MEGA ACQUISITION PLANS
India’s Essar Group has carved a mega plan that includes a slew of acquisitions and investments in assets across various businesses. CNBC-TV18 ...
Monday, 18 January 10
INDONESIA SHIPPED 15.90 PERCENT OF TOTAL COAL EXPORTS IN 2009 TO INDIA
COALspot.com (Indonesia): Indonesia, the world largest coal exporter, exported 19.07 percent of the total coal export in 2009 to China and 15. ...
Monday, 18 January 10
BHP TO SPEND $267 MILLION ON QUEENSLAND COKING COAL
BHP Billiton Ltd, the world’s largest mining company, will spend $267 million to accelerate development of the Caval Ridge mine and the Hay Po ...
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- Georgia Ports Authority, United States
- Semirara Mining Corp, Philippines
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- Maharashtra Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- McConnell Dowell - Australia
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- Videocon Industries ltd - India
- Alfred C Toepfer International GmbH - Germany
- Vedanta Resources Plc - India
- Kapuas Tunggal Persada - Indonesia
- Bayan Resources Tbk. - Indonesia
- Cement Manufacturers Association - India
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- Pipit Mutiara Jaya. PT, Indonesia
- Kaltim Prima Coal - Indonesia
- Anglo American - United Kingdom
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- Renaissance Capital - South Africa
- Kepco SPC Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
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- Marubeni Corporation - India
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- Directorate General of MIneral and Coal - Indonesia
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- Australian Coal Association
- Thiess Contractors Indonesia
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- White Energy Company Limited
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- Tamil Nadu electricity Board
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- Rio Tinto Coal - Australia
- Metalloyd Limited - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- Energy Development Corp, Philippines
- Petron Corporation, Philippines
- Eastern Energy - Thailand
- The Treasury - Australian Government
- Sarangani Energy Corporation, Philippines
- Mintek Dendrill Indonesia
- Parry Sugars Refinery, India
- Aboitiz Power Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Baramulti Group, Indonesia
- Kumho Petrochemical, South Korea
- Central Java Power - Indonesia
- Lanco Infratech Ltd - India
- Formosa Plastics Group - Taiwan
- Economic Council, Georgia
- Indonesian Coal Mining Association
- Vijayanagar Sugar Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Sree Jayajothi Cements Limited - India
- ICICI Bank Limited - India
- Barasentosa Lestari - Indonesia
- The University of Queensland
- Leighton Contractors Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sindya Power Generating Company Private Ltd
- Agrawal Coal Company - India
- Bangladesh Power Developement Board
- Attock Cement Pakistan Limited
- Tata Chemicals Ltd - India
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- Orica Mining Services - Indonesia
- Coalindo Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Indogreen Group - Indonesia
- European Bulk Services B.V. - Netherlands
- Binh Thuan Hamico - Vietnam
- IEA Clean Coal Centre - UK
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- PetroVietnam Power Coal Import and Supply Company
- Bhushan Steel Limited - India
- Therma Luzon, Inc, Philippines
- Coal and Oil Company - UAE
- Meralco Power Generation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Minerals Council of Australia
- Independent Power Producers Association of India
- Antam Resourcindo - Indonesia
- Sakthi Sugars Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Interocean Group of Companies - India
- Bhatia International Limited - India
- Heidelberg Cement - Germany
- Grasim Industreis Ltd - India
- Power Finance Corporation Ltd., India
- Merrill Lynch Commodities Europe
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- Chettinad Cement Corporation Ltd - India
- Samtan Co., Ltd - South Korea
- Miang Besar Coal Terminal - Indonesia
- Thai Mozambique Logistica
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- Jindal Steel & Power Ltd - India
- Chamber of Mines of South Africa
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- PTC India Limited - India
- Parliament of New Zealand
- Indika Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Indian Oil Corporation Limited
- Wood Mackenzie - Singapore
- Kideco Jaya Agung - Indonesia
- Pendopo Energi Batubara - Indonesia
- GVK Power & Infra Limited - India
- Mjunction Services Limited - India
- Siam City Cement PLC, Thailand
- Gujarat Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Sojitz Corporation - Japan
- CNBM International Corporation - China
- San Jose City I Power Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Mercator Lines Limited - India
- Malabar Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Price Waterhouse Coopers - Russia
- Intertek Mineral Services - Indonesia
- Oldendorff Carriers - Singapore
- Global Green Power PLC Corporation, Philippines
- Star Paper Mills Limited - India
- Mercuria Energy - Indonesia
- Wilmar Investment Holdings
- SMG Consultants - Indonesia
- Ministry of Mines - Canada
- Electricity Generating Authority of Thailand
- Timah Investasi Mineral - Indoneisa
- Commonwealth Bank - Australia
- Planning Commission, India
- Savvy Resources Ltd - HongKong
- Riau Bara Harum - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PowerSource Philippines DevCo
- Karbindo Abesyapradhi - Indoneisa
- Uttam Galva Steels Limited - India
- MS Steel International - UAE
- Kobexindo Tractors - Indoneisa
- Siam City Cement - Thailand
- Bhoruka Overseas - Indonesia
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- SMC Global Power, Philippines
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- Petrochimia International Co. Ltd.- Taiwan
- Indian Energy Exchange, India
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- The State Trading Corporation of India Ltd
- Manunggal Multi Energi - Indonesia
- ASAPP Information Group - India
- Gujarat Sidhee Cement - India
- Xindia Steels Limited - India
- Jaiprakash Power Ventures ltd
- Indo Tambangraya Megah - Indonesia
- SN Aboitiz Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Meenaskhi Energy Private Limited - India
- Eastern Coal Council - USA
- International Coal Ventures Pvt Ltd - India
- Sical Logistics Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Posco Energy - South Korea
- Deloitte Consulting - India
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- Ministry of Transport, Egypt
- Energy Link Ltd, New Zealand
- Edison Trading Spa - Italy
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