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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, 30 December 09
INDIA CEMENTS TO FINALIZE 3 SHIPMENTS OF SOUTH AFRICAN COAL NEXT WEEK
COALspot.com (India): India Cements is looking for 3 shipments (150,000MT) of South African coal for January – March 2010 delivery on C ...
Wednesday, 30 December 09
BANPU EXPECTS STABLE COAL PRICES
2009 revenue growth will be hard to beat
Banpu Plc, Asean's largest coal miner, expects coal prices to stay firm at about US$80 per tonne in the f ...
Wednesday, 30 December 09
CIL DELISTS JAGUAR ENERGY FOR KODA LINKS
Coal India Ltd (CIL) has dropped Indonesia-based Jaguar Energy & Power Ltd from the list of companies, it intended to forge partnerships with to ...
Wednesday, 30 December 09
COAL PRICE RISE REQUEST DENIED
A proposal by the Viet Nam National Coal and Mineral Industries Group to double the price of coal has been turned down by the Ministry of Industry a ...
Wednesday, 30 December 09
CHINA'S 2010 COAL DEMAND COULD RISE 4%-6%, ACCORDING TO CHINA SECURITIES JOURNAL
China, which is the world’s second-largest energy user, may consume between 4 and 6% more coal next year on continued economic growth, China S ...
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- Independent Power Producers Association of India
- LBH Netherlands Bv - Netherlands
- Siam City Cement PLC, Thailand
- Australian Coal Association
- Bhatia International Limited - India
- Coal and Oil Company - UAE
- Lanco Infratech Ltd - India
- Ministry of Finance - Indonesia
- New Zealand Coal & Carbon
- Billiton Holdings Pty Ltd - Australia
- Baramulti Group, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Oldendorff Carriers - Singapore
- Simpson Spence & Young - Indonesia
- PowerSource Philippines DevCo
- Deloitte Consulting - India
- Aboitiz Power Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- GVK Power & Infra Limited - India
- Eastern Energy - Thailand
- Miang Besar Coal Terminal - Indonesia
- Grasim Industreis Ltd - India
- Antam Resourcindo - Indonesia
- Riau Bara Harum - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Mines - Canada
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- European Bulk Services B.V. - Netherlands
- Carbofer General Trading SA - India
- Bulk Trading Sa - Switzerland
- Wilmar Investment Holdings
- Indo Tambangraya Megah - Indonesia
- Pendopo Energi Batubara - Indonesia
- IHS Mccloskey Coal Group - USA
- Vizag Seaport Private Limited - India
- Sree Jayajothi Cements Limited - India
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- Vedanta Resources Plc - India
- Latin American Coal - Colombia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Generating Authority of Thailand
- Coastal Gujarat Power Limited - India
- Merrill Lynch Commodities Europe
- Maheswari Brothers Coal Limited - India
- OPG Power Generation Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ICICI Bank Limited - India
- Indika Energy - Indonesia
- ASAPP Information Group - India
- Rio Tinto Coal - Australia
- Globalindo Alam Lestari - Indonesia
- Siam City Cement - Thailand
- Borneo Indobara - Indonesia
- Ind-Barath Power Infra Limited - India
- Therma Luzon, Inc, Philippines
- Kumho Petrochemical, South Korea
- Ceylon Electricity Board - Sri Lanka
- Petrochimia International Co. Ltd.- Taiwan
- Sojitz Corporation - Japan
- Minerals Council of Australia
- The State Trading Corporation of India Ltd
- Karbindo Abesyapradhi - Indoneisa
- Australian Commodity Traders Exchange
- Central Electricity Authority - India
- Sakthi Sugars Limited - India
- TeaM Sual Corporation - Philippines
- Altura Mining Limited, Indonesia
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
- Kepco SPC Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- CNBM International Corporation - China
- Directorate General of MIneral and Coal - Indonesia
- Orica Mining Services - Indonesia
- Power Finance Corporation Ltd., India
- Savvy Resources Ltd - HongKong
- Krishnapatnam Port Company Ltd. - India
- Jorong Barutama Greston.PT - Indonesia
- GAC Shipping (India) Pvt Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indogreen Group - Indonesia
- Agrawal Coal Company - India
- Meralco Power Generation, Philippines
- South Luzon Thermal Energy Corporation
- PNOC Exploration Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Iligan Light & Power Inc, Philippines
- Ambuja Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- Essar Steel Hazira Ltd - India
- Larsen & Toubro Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Petron Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- Indonesian Coal Mining Association
- Tamil Nadu electricity Board
- TNB Fuel Sdn Bhd - Malaysia
- Meenaskhi Energy Private Limited - India
- Central Java Power - Indonesia
- Bharathi Cement Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Jaiprakash Power Ventures ltd
- Kartika Selabumi Mining - Indonesia
- Electricity Authority, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- SMG Consultants - Indonesia
- IEA Clean Coal Centre - UK
- Star Paper Mills Limited - India
- AsiaOL BioFuels Corp., Philippines
- Kapuas Tunggal Persada - Indonesia
- Madhucon Powers Ltd - India
- The University of Queensland
- Bukit Baiduri Energy - Indonesia
- Thiess Contractors Indonesia
- Makarim & Taira - Indonesia
- Banpu Public Company Limited - Thailand
- Intertek Mineral Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Interocean Group of Companies - India
- Thai Mozambique Logistica
- Heidelberg Cement - Germany
- Coalindo Energy - Indonesia
- Energy Development Corp, Philippines
- Semirara Mining Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Aditya Birla Group - India
- Cement Manufacturers Association - India
- Kobexindo Tractors - Indoneisa
- Parry Sugars Refinery, India
- Price Waterhouse Coopers - Russia
- SN Aboitiz Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Metalloyd Limited - United Kingdom
- Dalmia Cement Bharat India
- Global Coal Blending Company Limited - Australia
- Uttam Galva Steels Limited - India
- Wood Mackenzie - Singapore
- Cigading International Bulk Terminal - Indonesia
- White Energy Company Limited
- Holcim Trading Pte Ltd - Singapore
- Bayan Resources Tbk. - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Kideco Jaya Agung - Indonesia
- Georgia Ports Authority, United States
- Jindal Steel & Power Ltd - India
- GMR Energy Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- McConnell Dowell - Australia
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Transport, Egypt
- Gujarat Sidhee Cement - India
- VISA Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Port Waratah Coal Services - Australia
- Indian Energy Exchange, India
- Renaissance Capital - South Africa
- Attock Cement Pakistan Limited
- Maharashtra Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Anglo American - United Kingdom
- Posco Energy - South Korea
- Indian Oil Corporation Limited
- MS Steel International - UAE
- Leighton Contractors Pty Ltd - Australia
- SMC Global Power, Philippines
- Bukit Makmur.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Xindia Steels Limited - India
- Bhoruka Overseas - Indonesia
- Sindya Power Generating Company Private Ltd
- PTC India Limited - India
- Global Business Power Corporation, Philippines
- Eastern Coal Council - USA
- Africa Commodities Group - South Africa
- CIMB Investment Bank - Malaysia
- Chettinad Cement Corporation Ltd - India
- Videocon Industries ltd - India
- Romanian Commodities Exchange
- Economic Council, Georgia
- Vijayanagar Sugar Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Standard Chartered Bank - UAE
- Medco Energi Mining Internasional
- India Bulls Power Limited - India
- Manunggal Multi Energi - Indonesia
- Marubeni Corporation - India
- Orica Australia Pty. Ltd.
- Goldman Sachs - Singapore
- Tata Chemicals Ltd - India
- London Commodity Brokers - England
- Mercator Lines Limited - India
- Planning Commission, India
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- The Treasury - Australian Government
- Bhushan Steel Limited - India
- Gujarat Electricity Regulatory Commission - India
- Global Green Power PLC Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Mintek Dendrill Indonesia
- Karaikal Port Pvt Ltd - India
- Sical Logistics Limited - India
- Straits Asia Resources Limited - Singapore
- Salva Resources Pvt Ltd - India
- Singapore Mercantile Exchange
- Parliament of New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Malabar Cements Ltd - India
- Edison Trading Spa - Italy
- Mercuria Energy - Indonesia
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