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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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Thursday, 14 January 10
INDIANS RESUME S. AFRICA COAL BUYING AGAINST INDEX - REUTERS
Indian trade buyers have resumed buying of South African prompt coal cargoes after a two-month hiatus but are opting for index-linked pricing, hopin ...
Wednesday, 13 January 10
STEAMING COAL SUPPLY SPOT CONTRACT FOR TAEAN POWER PLANT
COALspot.com (South Korea): Korea Western Power Co., Ltd is looking for total 1.12 million tons of Bituminous Coal for TAEAN Power Plant.
Accord ...
Wednesday, 13 January 10
INDONESIA ISSUES COAL, METAL DECREE
Indonesia has issued a ministerial decree which requires metal and coal miners to set aside a certain amount of their production for domestic needs, ...
Wednesday, 13 January 10
RESTING TIME FOR INDONESIAN COAL LOADING VESSELS
COALspot.com (Indonesia): 11 - 15 vessels are waiting in anchorages of Muara Berau and Tanjung Pemancingan to load total about 700,000 – ...
Wednesday, 13 January 10
SOUTH AFRICA STEAM COAL PRICE FALLS SHARPLY
Reuters reported that South African physical coal prices fell sharply on Tuesday with a March cargo trade at USD 87.5 a tonne FOB Richards Bay and d ...
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- New Zealand Coal & Carbon
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- Economic Council, Georgia
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- Africa Commodities Group - South Africa
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- Timah Investasi Mineral - Indoneisa
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- Kumho Petrochemical, South Korea
- Marubeni Corporation - India
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- The University of Queensland
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- Uttam Galva Steels Limited - India
- Madhucon Powers Ltd - India
- VISA Power Limited - India
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- Bangladesh Power Developement Board
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- Cigading International Bulk Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Bukit Baiduri Energy - Indonesia
- Commonwealth Bank - Australia
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- PTC India Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement - Thailand
- Barasentosa Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- Kideco Jaya Agung - Indonesia
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- McConnell Dowell - Australia
- Planning Commission, India
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- Chettinad Cement Corporation Ltd - India
- Merrill Lynch Commodities Europe
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- GMR Energy Limited - India
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- Orica Australia Pty. Ltd.
- Salva Resources Pvt Ltd - India
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- Intertek Mineral Services - Indonesia
- Ministry of Mines - Canada
- Wood Mackenzie - Singapore
- Attock Cement Pakistan Limited
- Sical Logistics Limited - India
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- CNBM International Corporation - China
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- Kohat Cement Company Ltd. - Pakistan
- Indian Oil Corporation Limited
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- Ministry of Finance - Indonesia
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- Coastal Gujarat Power Limited - India
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- Global Green Power PLC Corporation, Philippines
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- Electricity Authority, New Zealand
- Altura Mining Limited, Indonesia
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- White Energy Company Limited
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- Romanian Commodities Exchange
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- Wilmar Investment Holdings
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- Gujarat Electricity Regulatory Commission - India
- Leighton Contractors Pty Ltd - Australia
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- Manunggal Multi Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- AsiaOL BioFuels Corp., Philippines
- Trasteel International SA, Italy
- Kaltim Prima Coal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Renaissance Capital - South Africa
- Indo Tambangraya Megah - Indonesia
- Indonesian Coal Mining Association
- Energy Link Ltd, New Zealand
- Coalindo Energy - Indonesia
- Ambuja Cements Ltd - India
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The Treasury - Australian Government
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- Directorate Of Revenue Intelligence - India
- SMG Consultants - Indonesia
- Posco Energy - South Korea
- Borneo Indobara - Indonesia
- Independent Power Producers Association of India
- PetroVietnam Power Coal Import and Supply Company
- Holcim Trading Pte Ltd - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Sindya Power Generating Company Private Ltd
- Kalimantan Lumbung Energi - Indonesia
- India Bulls Power Limited - India
- Singapore Mercantile Exchange
- Electricity Generating Authority of Thailand
- Videocon Industries ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Standard Chartered Bank - UAE
- Rashtriya Ispat Nigam Limited - India
- Tamil Nadu electricity Board
- Dalmia Cement Bharat India
- IHS Mccloskey Coal Group - USA
- Kobexindo Tractors - Indoneisa
- Rio Tinto Coal - Australia
- Bukit Makmur.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Georgia Ports Authority, United States
- Bharathi Cement Corporation - India
- Ceylon Electricity Board - Sri Lanka
- European Bulk Services B.V. - Netherlands
- Eastern Energy - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Straits Asia Resources Limited - Singapore
- Bhushan Steel Limited - India
- Formosa Plastics Group - Taiwan
- Orica Mining Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Indika Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Aditya Birla Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meralco Power Generation, Philippines
- Siam City Cement PLC, Thailand
- Kepco SPC Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Power Finance Corporation Ltd., India
- Grasim Industreis Ltd - India
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- Port Waratah Coal Services - Australia
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- Australian Commodity Traders Exchange
- Ministry of Transport, Egypt
- GAC Shipping (India) Pvt Ltd
- Alfred C Toepfer International GmbH - Germany
- Bhatia International Limited - India
- Antam Resourcindo - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sinarmas Energy and Mining - Indonesia
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