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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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Wednesday, 06 January 10
BUMI SHARES UP AS OVERALL PERFORMANCE BEATS PREDICTIONS
The world’s largest thermal coal exporter PT Bumi Resources saw its shares jump 10 percent to Rp 2,675 ($29 US cents) on Tuesday after the com ...
Wednesday, 06 January 10
INDIA MAY HAVE BECOME TOP BUYER OF SOUTH AFRICAN COAL
India may have overtaken Europe for the first time as the biggest purchaser of South African coal in 2009, according to Raymond Chirwa, Richards Bay ...
Wednesday, 06 January 10
COAL PEAK RECEDES INTO THE FAR DISTANCE
COALspot.com (German): Coal will be available to mankind as an energy source for the next 120 years.
The German Coal Importer Association has ca ...
Tuesday, 05 January 10
SUPRAMAX MARKET REMAINED QUIET OVER THE LAST 10 DAYS BRS - DRY BULK
Despite a damp end to the year for bulk rates, shipping has weathered the storm far better than was initially expected in the wake of the financ ...
Tuesday, 05 January 10
WINTER WEATHER SPIKES COAL PRICES - CHINA UPDATE
Cold weather is driving coal prices higher and will lend the advantage in annual negotiations to suppliers, analysts said, predicting that the risin ...
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- The University of Queensland
- Billiton Holdings Pty Ltd - Australia
- Indogreen Group - Indonesia
- SMC Global Power, Philippines
- Manunggal Multi Energi - Indonesia
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- Sarangani Energy Corporation, Philippines
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- Thiess Contractors Indonesia
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- Romanian Commodities Exchange
- Krishnapatnam Port Company Ltd. - India
- The State Trading Corporation of India Ltd
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- Vizag Seaport Private Limited - India
- Carbofer General Trading SA - India
- GAC Shipping (India) Pvt Ltd
- Indonesian Coal Mining Association
- Australian Commodity Traders Exchange
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- Coastal Gujarat Power Limited - India
- Anglo American - United Kingdom
- Kaltim Prima Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- AsiaOL BioFuels Corp., Philippines
- CIMB Investment Bank - Malaysia
- IHS Mccloskey Coal Group - USA
- Semirara Mining and Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Eastern Energy - Thailand
- Tamil Nadu electricity Board
- Bhatia International Limited - India
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- The Treasury - Australian Government
- Bahari Cakrawala Sebuku - Indonesia
- Chamber of Mines of South Africa
- Cement Manufacturers Association - India
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- PNOC Exploration Corporation - Philippines
- Wood Mackenzie - Singapore
- Antam Resourcindo - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Simpson Spence & Young - Indonesia
- Barasentosa Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meralco Power Generation, Philippines
- Marubeni Corporation - India
- Videocon Industries ltd - India
- Mercuria Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- White Energy Company Limited
- Goldman Sachs - Singapore
- Straits Asia Resources Limited - Singapore
- Bukit Makmur.PT - Indonesia
- Mercator Lines Limited - India
- Siam City Cement PLC, Thailand
- Larsen & Toubro Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Holcim Trading Pte Ltd - Singapore
- Bharathi Cement Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Planning Commission, India
- Petrochimia International Co. Ltd.- Taiwan
- South Luzon Thermal Energy Corporation
- Sical Logistics Limited - India
- Formosa Plastics Group - Taiwan
- Aboitiz Power Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Cigading International Bulk Terminal - Indonesia
- Agrawal Coal Company - India
- Indian Energy Exchange, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Altura Mining Limited, Indonesia
- Jaiprakash Power Ventures ltd
- Kartika Selabumi Mining - Indonesia
- New Zealand Coal & Carbon
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- Jindal Steel & Power Ltd - India
- Merrill Lynch Commodities Europe
- Bulk Trading Sa - Switzerland
- London Commodity Brokers - England
- Vijayanagar Sugar Pvt Ltd - India
- Energy Development Corp, Philippines
- Tata Chemicals Ltd - India
- Bhushan Steel Limited - India
- Ministry of Finance - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Global Business Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Attock Cement Pakistan Limited
- GMR Energy Limited - India
- San Jose City I Power Corp, Philippines
- Standard Chartered Bank - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Bayan Resources Tbk. - Indonesia
- Sakthi Sugars Limited - India
- Coal and Oil Company - UAE
- Coalindo Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wilmar Investment Holdings
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- ASAPP Information Group - India
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
- Mintek Dendrill Indonesia
- Banpu Public Company Limited - Thailand
- Sindya Power Generating Company Private Ltd
- VISA Power Limited - India
- Indian Oil Corporation Limited
- Posco Energy - South Korea
- McConnell Dowell - Australia
- Indika Energy - Indonesia
- Ambuja Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Port Waratah Coal Services - Australia
- Rashtriya Ispat Nigam Limited - India
- Iligan Light & Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Energy Link Ltd, New Zealand
- Heidelberg Cement - Germany
- Ind-Barath Power Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PowerSource Philippines DevCo
- Trasteel International SA, Italy
- Binh Thuan Hamico - Vietnam
- OPG Power Generation Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- International Coal Ventures Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Thai Mozambique Logistica
- Grasim Industreis Ltd - India
- Independent Power Producers Association of India
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- Dalmia Cement Bharat India
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- India Bulls Power Limited - India
- ICICI Bank Limited - India
- Semirara Mining Corp, Philippines
- Petron Corporation, Philippines
- Medco Energi Mining Internasional
- Uttam Galva Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Africa Commodities Group - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Star Paper Mills Limited - India
- Directorate Of Revenue Intelligence - India
- Sree Jayajothi Cements Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Electricity Authority - India
- Edison Trading Spa - Italy
- Aditya Birla Group - India
- Interocean Group of Companies - India
- Commonwealth Bank - Australia
- TeaM Sual Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Orica Australia Pty. Ltd.
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Minerals Council of Australia
- Electricity Authority, New Zealand
- Parliament of New Zealand
- Gujarat Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- GVK Power & Infra Limited - India
- Central Java Power - Indonesia
- IEA Clean Coal Centre - UK
- Singapore Mercantile Exchange
- Salva Resources Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Sinarmas Energy and Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Orica Mining Services - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Georgia Ports Authority, United States
- Chettinad Cement Corporation Ltd - India
- Kepco SPC Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Maheswari Brothers Coal Limited - India
- Vedanta Resources Plc - India
- Borneo Indobara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Generating Authority of Thailand
- CNBM International Corporation - China
- Global Coal Blending Company Limited - Australia
- Meenaskhi Energy Private Limited - India
- Madhucon Powers Ltd - India
- Ministry of Mines - Canada
- Globalindo Alam Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Maharashtra Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Savvy Resources Ltd - HongKong
- Baramulti Group, Indonesia
- MS Steel International - UAE
- Lanco Infratech Ltd - India
- Samtan Co., Ltd - South Korea
- Economic Council, Georgia
- PTC India Limited - India
- Bukit Baiduri Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Essar Steel Hazira Ltd - India
- Kobexindo Tractors - Indoneisa
- Xindia Steels Limited - India
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- Bhoruka Overseas - Indonesia
- Renaissance Capital - South Africa
- Australian Coal Association
- Malabar Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
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