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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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Sunday, 17 January 10
THE FUTURES FOR THREE YEARS (2010 - 2012) FIRMED UP - VISTAAR SINGAPORE
COALspot.com (Singapore): The freight market was a bit mixed with BDI up by about 159 points and closed at 3,299 points.
BDI
The cape index cont ...
Sunday, 17 January 10
NTPC TO DOUBLE CAPACITY BY 2017
NTPC, which will launch its follow-on public offer on February 3, plans to more than double its generating capacity to over 70,000 mega watts by 201 ...
Saturday, 16 January 10
HANDY CONTINUED FIRM CONDITIONS FOR MARKET IN THE ATLANTIC
HANDY
Continued firm conditions for the Handymax / Smax market in the Atlantic with the BSI having a continued upwards momentum. US$ 45,000 ac ...
Friday, 15 January 10
INDONESIA COAL - HEAVY RAINS HAVE LITTLE IMPACT ON COAL OUTPUT
Coal shipments from Indonesia's main coal-producing area are unlikely to be hit by heavy rains during January-February as many miners are prepared ...
Friday, 15 January 10
GOVT BRINGS IN DOMESTIC COAL MARKET OBLIGATION
The Energy and Mineral Resources Ministry has issued a ministerial decree requiring producers of coal and other minerals to allocate a proportion ...
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- SMC Global Power, Philippines
- Madhucon Powers Ltd - India
- Bhatia International Limited - India
- Indika Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Semirara Mining Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- The Treasury - Australian Government
- Energy Development Corp, Philippines
- Africa Commodities Group - South Africa
- Romanian Commodities Exchange
- PTC India Limited - India
- Timah Investasi Mineral - Indoneisa
- Star Paper Mills Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- McConnell Dowell - Australia
- Formosa Plastics Group - Taiwan
- SN Aboitiz Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Attock Cement Pakistan Limited
- Samtan Co., Ltd - South Korea
- Binh Thuan Hamico - Vietnam
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Sakthi Sugars Limited - India
- Bukit Baiduri Energy - Indonesia
- Petron Corporation, Philippines
- Minerals Council of Australia
- Goldman Sachs - Singapore
- Indo Tambangraya Megah - Indonesia
- Malabar Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- Mercator Lines Limited - India
- Georgia Ports Authority, United States
- Oldendorff Carriers - Singapore
- Deloitte Consulting - India
- Ind-Barath Power Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Carbofer General Trading SA - India
- GMR Energy Limited - India
- Aditya Birla Group - India
- Intertek Mineral Services - Indonesia
- Bhushan Steel Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Jindal Steel & Power Ltd - India
- Wilmar Investment Holdings
- ICICI Bank Limited - India
- Marubeni Corporation - India
- Bhoruka Overseas - Indonesia
- Salva Resources Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Jaiprakash Power Ventures ltd
- Petrochimia International Co. Ltd.- Taiwan
- Coalindo Energy - Indonesia
- Vedanta Resources Plc - India
- Global Coal Blending Company Limited - Australia
- Banpu Public Company Limited - Thailand
- Pendopo Energi Batubara - Indonesia
- Energy Link Ltd, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Mines - Canada
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kaltim Prima Coal - Indonesia
- London Commodity Brokers - England
- Sarangani Energy Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Ambuja Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- The State Trading Corporation of India Ltd
- Metalloyd Limited - United Kingdom
- Tata Chemicals Ltd - India
- Toyota Tsusho Corporation, Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Cement Manufacturers Association - India
- Rashtriya Ispat Nigam Limited - India
- TeaM Sual Corporation - Philippines
- Port Waratah Coal Services - Australia
- Altura Mining Limited, Indonesia
- Grasim Industreis Ltd - India
- Australian Coal Association
- Latin American Coal - Colombia
- Sinarmas Energy and Mining - Indonesia
- Ministry of Finance - Indonesia
- Bangladesh Power Developement Board
- Rio Tinto Coal - Australia
- South Luzon Thermal Energy Corporation
- Siam City Cement PLC, Thailand
- GVK Power & Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- TNB Fuel Sdn Bhd - Malaysia
- Meralco Power Generation, Philippines
- Uttam Galva Steels Limited - India
- Indonesian Coal Mining Association
- Barasentosa Lestari - Indonesia
- Xindia Steels Limited - India
- SMG Consultants - Indonesia
- Chamber of Mines of South Africa
- Bulk Trading Sa - Switzerland
- Iligan Light & Power Inc, Philippines
- Commonwealth Bank - Australia
- Kideco Jaya Agung - Indonesia
- Savvy Resources Ltd - HongKong
- Makarim & Taira - Indonesia
- Posco Energy - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Heidelberg Cement - Germany
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement - Thailand
- Kobexindo Tractors - Indoneisa
- Mjunction Services Limited - India
- Kumho Petrochemical, South Korea
- Global Green Power PLC Corporation, Philippines
- Global Business Power Corporation, Philippines
- India Bulls Power Limited - India
- Independent Power Producers Association of India
- Bayan Resources Tbk. - Indonesia
- CIMB Investment Bank - Malaysia
- Parry Sugars Refinery, India
- International Coal Ventures Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Wood Mackenzie - Singapore
- Electricity Generating Authority of Thailand
- Jorong Barutama Greston.PT - Indonesia
- Thiess Contractors Indonesia
- Eastern Energy - Thailand
- Mercuria Energy - Indonesia
- Lanco Infratech Ltd - India
- Bukit Makmur.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- New Zealand Coal & Carbon
- Sojitz Corporation - Japan
- Leighton Contractors Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- CNBM International Corporation - China
- San Jose City I Power Corp, Philippines
- Agrawal Coal Company - India
- Coal and Oil Company - UAE
- Mintek Dendrill Indonesia
- Krishnapatnam Port Company Ltd. - India
- VISA Power Limited - India
- Medco Energi Mining Internasional
- Dalmia Cement Bharat India
- Sical Logistics Limited - India
- IEA Clean Coal Centre - UK
- Renaissance Capital - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Interocean Group of Companies - India
- Globalindo Alam Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Edison Trading Spa - Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Gujarat Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Orica Australia Pty. Ltd.
- IHS Mccloskey Coal Group - USA
- Coastal Gujarat Power Limited - India
- Larsen & Toubro Limited - India
- Maharashtra Electricity Regulatory Commission - India
- White Energy Company Limited
- ASAPP Information Group - India
- Eastern Coal Council - USA
- Standard Chartered Bank - UAE
- Directorate General of MIneral and Coal - Indonesia
- Vizag Seaport Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Directorate Of Revenue Intelligence - India
- Orica Mining Services - Indonesia
- Australian Commodity Traders Exchange
- Meenaskhi Energy Private Limited - India
- Sindya Power Generating Company Private Ltd
- PetroVietnam Power Coal Import and Supply Company
- Antam Resourcindo - Indonesia
- Miang Besar Coal Terminal - Indonesia
- MS Steel International - UAE
- Central Java Power - Indonesia
- Indogreen Group - Indonesia
- Tamil Nadu electricity Board
- Electricity Authority, New Zealand
- Gujarat Sidhee Cement - India
- Baramulti Group, Indonesia
- Thai Mozambique Logistica
- Videocon Industries ltd - India
- PowerSource Philippines DevCo
- PNOC Exploration Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Indian Oil Corporation Limited
- Anglo American - United Kingdom
- Riau Bara Harum - Indonesia
- Bharathi Cement Corporation - India
- Singapore Mercantile Exchange
- Karaikal Port Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- The University of Queensland
- Therma Luzon, Inc, Philippines
- Trasteel International SA, Italy
- Ministry of Transport, Egypt
- Indian Energy Exchange, India
- Neyveli Lignite Corporation Ltd, - India
- Parliament of New Zealand
- Planning Commission, India
- AsiaOL BioFuels Corp., Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Straits Asia Resources Limited - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Economic Council, Georgia
- Ceylon Electricity Board - Sri Lanka
- Borneo Indobara - Indonesia
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