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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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Saturday, 02 January 10
INDONESIAS COAL OUTPUT RISES BY 5%
Indonesia, Asia’s largest coal exporter, produced 254 million tons of coal in 2009, a 5.8 percent increase from 2008 and well ahead of the gov ...
Saturday, 02 January 10
TAIPOWER FORECASTS COAL DEMAND TO SNAP DECLINE
Taiwan Power Co., Asia's biggest importer of thermal coal, expects its demand for the fuel to rise in 2010 after falling for two years as the islan ...
Friday, 01 January 10
COAL INDIA TO START IMPORTING DIRECTLY
According to sources, the coal major has already finalised tender document to import four million tonnes thermal grade coal for supplies to NTPC. Th ...
Thursday, 31 December 09
INDONESIA SEES 2010 MINING INVESTMENT UP 39 PCT
Reuters reported that, Indonesian mining investment is expected to hit $2.5 billion next year, up from $1.81 billion in 2009, supported by greater c ...
Thursday, 31 December 09
YANDICOOGINA BECOMES FIRST MINE IN AUSTRALIA TO PRODUCE 50 MILLION TONNES A YEAR
COALspot.com Press Release: Rio Tinto's Yandicoogina, Australia's largest-producing iron ore mine, has broken the 50 million tonne mark for annual ...
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- Chamber of Mines of South Africa
- Straits Asia Resources Limited - Singapore
- Global Green Power PLC Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coalindo Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Thiess Contractors Indonesia
- Gujarat Sidhee Cement - India
- Riau Bara Harum - Indonesia
- Simpson Spence & Young - Indonesia
- Meralco Power Generation, Philippines
- European Bulk Services B.V. - Netherlands
- Indo Tambangraya Megah - Indonesia
- Savvy Resources Ltd - HongKong
- Kartika Selabumi Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Port Waratah Coal Services - Australia
- Bharathi Cement Corporation - India
- AsiaOL BioFuels Corp., Philippines
- Bhushan Steel Limited - India
- Trasteel International SA, Italy
- Krishnapatnam Port Company Ltd. - India
- Meenaskhi Energy Private Limited - India
- Commonwealth Bank - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Economic Council, Georgia
- Africa Commodities Group - South Africa
- Jindal Steel & Power Ltd - India
- Planning Commission, India
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- Independent Power Producers Association of India
- Jorong Barutama Greston.PT - Indonesia
- Orica Australia Pty. Ltd.
- Aboitiz Power Corporation - Philippines
- Xindia Steels Limited - India
- Mercuria Energy - Indonesia
- Vedanta Resources Plc - India
- Semirara Mining and Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- The University of Queensland
- Samtan Co., Ltd - South Korea
- Formosa Plastics Group - Taiwan
- PTC India Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Global Business Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Kapuas Tunggal Persada - Indonesia
- Jaiprakash Power Ventures ltd
- Metalloyd Limited - United Kingdom
- Singapore Mercantile Exchange
- Larsen & Toubro Limited - India
- Globalindo Alam Lestari - Indonesia
- Therma Luzon, Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Indika Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- VISA Power Limited - India
- Interocean Group of Companies - India
- Borneo Indobara - Indonesia
- IHS Mccloskey Coal Group - USA
- TNB Fuel Sdn Bhd - Malaysia
- Energy Development Corp, Philippines
- Binh Thuan Hamico - Vietnam
- GVK Power & Infra Limited - India
- LBH Netherlands Bv - Netherlands
- McConnell Dowell - Australia
- Directorate Of Revenue Intelligence - India
- Essar Steel Hazira Ltd - India
- Ambuja Cements Ltd - India
- Australian Coal Association
- SMG Consultants - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Anglo American - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- Indian Energy Exchange, India
- Carbofer General Trading SA - India
- Central Java Power - Indonesia
- Bangladesh Power Developement Board
- Bhatia International Limited - India
- IEA Clean Coal Centre - UK
- Makarim & Taira - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Manunggal Multi Energi - Indonesia
- Uttam Galva Steels Limited - India
- Indian Oil Corporation Limited
- Bukit Asam (Persero) Tbk - Indonesia
- ASAPP Information Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- India Bulls Power Limited - India
- Ministry of Finance - Indonesia
- Maheswari Brothers Coal Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Orica Mining Services - Indonesia
- Wood Mackenzie - Singapore
- PNOC Exploration Corporation - Philippines
- Eastern Energy - Thailand
- Malabar Cements Ltd - India
- Star Paper Mills Limited - India
- Power Finance Corporation Ltd., India
- Mjunction Services Limited - India
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- Attock Cement Pakistan Limited
- Deloitte Consulting - India
- Toyota Tsusho Corporation, Japan
- Kohat Cement Company Ltd. - Pakistan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Videocon Industries ltd - India
- Banpu Public Company Limited - Thailand
- San Jose City I Power Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- White Energy Company Limited
- Sojitz Corporation - Japan
- Lanco Infratech Ltd - India
- Aditya Birla Group - India
- Chettinad Cement Corporation Ltd - India
- TeaM Sual Corporation - Philippines
- Eastern Coal Council - USA
- Intertek Mineral Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- New Zealand Coal & Carbon
- Sarangani Energy Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Minerals Council of Australia
- Bhoruka Overseas - Indonesia
- Ministry of Transport, Egypt
- Oldendorff Carriers - Singapore
- ICICI Bank Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Coal and Oil Company - UAE
- Australian Commodity Traders Exchange
- Edison Trading Spa - Italy
- Timah Investasi Mineral - Indoneisa
- Kaltim Prima Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Georgia Ports Authority, United States
- Vizag Seaport Private Limited - India
- SMC Global Power, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Agrawal Coal Company - India
- Indonesian Coal Mining Association
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Kideco Jaya Agung - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kobexindo Tractors - Indoneisa
- Parliament of New Zealand
- Baramulti Group, Indonesia
- Renaissance Capital - South Africa
- Latin American Coal - Colombia
- Goldman Sachs - Singapore
- Parry Sugars Refinery, India
- The Treasury - Australian Government
- Electricity Authority, New Zealand
- OPG Power Generation Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Mintek Dendrill Indonesia
- Antam Resourcindo - Indonesia
- Electricity Generating Authority of Thailand
- Romanian Commodities Exchange
- Central Electricity Authority - India
- MS Steel International - UAE
- Sakthi Sugars Limited - India
- Standard Chartered Bank - UAE
- Bulk Trading Sa - Switzerland
- PowerSource Philippines DevCo
- Tata Chemicals Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Ministry of Mines - Canada
- Iligan Light & Power Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Indogreen Group - Indonesia
- CNBM International Corporation - China
- Wilmar Investment Holdings
- Merrill Lynch Commodities Europe
- London Commodity Brokers - England
- Siam City Cement PLC, Thailand
- Siam City Cement - Thailand
- Rashtriya Ispat Nigam Limited - India
- Rio Tinto Coal - Australia
- Tamil Nadu electricity Board
- PetroVietnam Power Coal Import and Supply Company
- Pendopo Energi Batubara - Indonesia
- Kumho Petrochemical, South Korea
- Grasim Industreis Ltd - India
- Mercator Lines Limited - India
- Thai Mozambique Logistica
- Karaikal Port Pvt Ltd - India
- Madhucon Powers Ltd - India
- Dalmia Cement Bharat India
- Sical Logistics Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- Marubeni Corporation - India
- Altura Mining Limited, Indonesia
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