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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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- Thiess Contractors Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- Jaiprakash Power Ventures ltd
- South Luzon Thermal Energy Corporation
- Indo Tambangraya Megah - Indonesia
- White Energy Company Limited
- New Zealand Coal & Carbon
- Global Green Power PLC Corporation, Philippines
- McConnell Dowell - Australia
- Aditya Birla Group - India
- Straits Asia Resources Limited - Singapore
- AsiaOL BioFuels Corp., Philippines
- Mintek Dendrill Indonesia
- Aboitiz Power Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- The Treasury - Australian Government
- India Bulls Power Limited - India
- Sindya Power Generating Company Private Ltd
- Port Waratah Coal Services - Australia
- Mercuria Energy - Indonesia
- Chamber of Mines of South Africa
- Timah Investasi Mineral - Indoneisa
- Bhushan Steel Limited - India
- Merrill Lynch Commodities Europe
- Coastal Gujarat Power Limited - India
- Barasentosa Lestari - Indonesia
- Carbofer General Trading SA - India
- Eastern Energy - Thailand
- Sakthi Sugars Limited - India
- Central Electricity Authority - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Neyveli Lignite Corporation Ltd, - India
- Australian Commodity Traders Exchange
- Asmin Koalindo Tuhup - Indonesia
- Sarangani Energy Corporation, Philippines
- CNBM International Corporation - China
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Maheswari Brothers Coal Limited - India
- MS Steel International - UAE
- Meralco Power Generation, Philippines
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Kartika Selabumi Mining - Indonesia
- Sinarmas Energy and Mining - Indonesia
- ASAPP Information Group - India
- Sojitz Corporation - Japan
- Kobexindo Tractors - Indoneisa
- Manunggal Multi Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- Baramulti Group, Indonesia
- Essar Steel Hazira Ltd - India
- Vedanta Resources Plc - India
- Heidelberg Cement - Germany
- Siam City Cement PLC, Thailand
- Gujarat Sidhee Cement - India
- Coal and Oil Company - UAE
- Sree Jayajothi Cements Limited - India
- Electricity Authority, New Zealand
- Billiton Holdings Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rio Tinto Coal - Australia
- Miang Besar Coal Terminal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Globalindo Alam Lestari - Indonesia
- Xindia Steels Limited - India
- Wood Mackenzie - Singapore
- Karaikal Port Pvt Ltd - India
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Marubeni Corporation - India
- Independent Power Producers Association of India
- Cigading International Bulk Terminal - Indonesia
- Larsen & Toubro Limited - India
- San Jose City I Power Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Economic Council, Georgia
- Lanco Infratech Ltd - India
- Bangladesh Power Developement Board
- Rashtriya Ispat Nigam Limited - India
- Parliament of New Zealand
- SMC Global Power, Philippines
- The University of Queensland
- OPG Power Generation Pvt Ltd - India
- Grasim Industreis Ltd - India
- Latin American Coal - Colombia
- Indika Energy - Indonesia
- Deloitte Consulting - India
- Kideco Jaya Agung - Indonesia
- Renaissance Capital - South Africa
- Salva Resources Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jindal Steel & Power Ltd - India
- Uttam Galva Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Indian Energy Exchange, India
- Mercator Lines Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Singapore Mercantile Exchange
- Wilmar Investment Holdings
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Coalindo Energy - Indonesia
- Dalmia Cement Bharat India
- Orica Australia Pty. Ltd.
- Pipit Mutiara Jaya. PT, Indonesia
- Cement Manufacturers Association - India
- Georgia Ports Authority, United States
- Semirara Mining Corp, Philippines
- Anglo American - United Kingdom
- Ind-Barath Power Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Attock Cement Pakistan Limited
- Metalloyd Limited - United Kingdom
- Bharathi Cement Corporation - India
- Banpu Public Company Limited - Thailand
- Bukit Baiduri Energy - Indonesia
- Power Finance Corporation Ltd., India
- LBH Netherlands Bv - Netherlands
- Tata Chemicals Ltd - India
- European Bulk Services B.V. - Netherlands
- Intertek Mineral Services - Indonesia
- Posco Energy - South Korea
- Ministry of Transport, Egypt
- Borneo Indobara - Indonesia
- Central Java Power - Indonesia
- PTC India Limited - India
- SN Aboitiz Power Inc, Philippines
- Petron Corporation, Philippines
- Star Paper Mills Limited - India
- Goldman Sachs - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Energy Link Ltd, New Zealand
- Interocean Group of Companies - India
- Australian Coal Association
- CIMB Investment Bank - Malaysia
- Therma Luzon, Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- TeaM Sual Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Standard Chartered Bank - UAE
- Ambuja Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Iligan Light & Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Planning Commission, India
- Commonwealth Bank - Australia
- Mjunction Services Limited - India
- Ministry of Mines - Canada
- Bukit Makmur.PT - Indonesia
- IEA Clean Coal Centre - UK
- Indogreen Group - Indonesia
- Indonesian Coal Mining Association
- Orica Mining Services - Indonesia
- Makarim & Taira - Indonesia
- Sical Logistics Limited - India
- Binh Thuan Hamico - Vietnam
- Medco Energi Mining Internasional
- VISA Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Simpson Spence & Young - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Trasteel International SA, Italy
- Altura Mining Limited, Indonesia
- London Commodity Brokers - England
- Bulk Trading Sa - Switzerland
- Savvy Resources Ltd - HongKong
- Holcim Trading Pte Ltd - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Global Coal Blending Company Limited - Australia
- Edison Trading Spa - Italy
- Semirara Mining and Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- PNOC Exploration Corporation - Philippines
- Madhucon Powers Ltd - India
- Indian Oil Corporation Limited
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
- ICICI Bank Limited - India
- Tamil Nadu electricity Board
- Alfred C Toepfer International GmbH - Germany
- Videocon Industries ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Leighton Contractors Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- Malabar Cements Ltd - India
- PowerSource Philippines DevCo
- GVK Power & Infra Limited - India
- Vizag Seaport Private Limited - India
- Global Business Power Corporation, Philippines
- Bhatia International Limited - India
- Bayan Resources Tbk. - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement - Thailand
- Pendopo Energi Batubara - Indonesia
- GMR Energy Limited - India
- Agrawal Coal Company - India
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- Kumho Petrochemical, South Korea
- Eastern Coal Council - USA
- Romanian Commodities Exchange
- Price Waterhouse Coopers - Russia
- Bhoruka Overseas - Indonesia
- The State Trading Corporation of India Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kaltim Prima Coal - Indonesia
- Antam Resourcindo - Indonesia
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