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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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Tuesday, 29 December 09
PROFIT IN COAL INDUSTRY DOWN 9.4% Y-O-Y IN JAN.- NOV.
In November, China's coal production was 289mln tons, up 26.3% year on year, an increase of 5.2% over last month. China's average daily trucks loa ...
Tuesday, 29 December 09
DHARMA HENWA EYES 20% REVENUE GROWTH
Local integrated mining services provider PT Dharma Henwa, which was earlier this year acquired by coal mining giant PT Bumi Resources, expects reve ...
Monday, 28 December 09
NEED TO IMPORT COAL COMES EARLY
Viet Nam may need to start importing coal as early as 2012, three years earlier than expected, to meet its electricity demands.
The Viet Nam Coal ...
Monday, 28 December 09
GOVT EYES $3.57B MINING, GEOTHERMAL INVESTMENT
The country can expect up to US$3.57 billion in investment in mining and geothermal energy next year, which would represent an increase by more than ...
Monday, 28 December 09
INDONESIAN MINER LINKED TO FUGITIVE FINANCIER
The Energy Ministry is unlikely to approve the transfer of ownership of coal miner PT Riau Baraharum on allegations it is indirectly owned by fugiti ...
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- GVK Power & Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Australia Pty. Ltd.
- PetroVietnam Power Coal Import and Supply Company
- Thai Mozambique Logistica
- Ind-Barath Power Infra Limited - India
- Africa Commodities Group - South Africa
- Oldendorff Carriers - Singapore
- Vedanta Resources Plc - India
- Tata Chemicals Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Bharathi Cement Corporation - India
- Mercuria Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- South Luzon Thermal Energy Corporation
- Bukit Makmur.PT - Indonesia
- Singapore Mercantile Exchange
- Star Paper Mills Limited - India
- Larsen & Toubro Limited - India
- Global Business Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Independent Power Producers Association of India
- Electricity Generating Authority of Thailand
- Salva Resources Pvt Ltd - India
- Economic Council, Georgia
- Chamber of Mines of South Africa
- Rio Tinto Coal - Australia
- Ministry of Finance - Indonesia
- LBH Netherlands Bv - Netherlands
- Essar Steel Hazira Ltd - India
- Bangladesh Power Developement Board
- Meenaskhi Energy Private Limited - India
- Georgia Ports Authority, United States
- IHS Mccloskey Coal Group - USA
- Siam City Cement - Thailand
- Sical Logistics Limited - India
- Savvy Resources Ltd - HongKong
- Grasim Industreis Ltd - India
- Ministry of Transport, Egypt
- Jindal Steel & Power Ltd - India
- Petron Corporation, Philippines
- Tamil Nadu electricity Board
- Aboitiz Power Corporation - Philippines
- Port Waratah Coal Services - Australia
- OPG Power Generation Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Makarim & Taira - Indonesia
- Binh Thuan Hamico - Vietnam
- Central Java Power - Indonesia
- Riau Bara Harum - Indonesia
- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- VISA Power Limited - India
- CIMB Investment Bank - Malaysia
- Madhucon Powers Ltd - India
- Thiess Contractors Indonesia
- Eastern Energy - Thailand
- Indian Oil Corporation Limited
- GN Power Mariveles Coal Plant, Philippines
- Standard Chartered Bank - UAE
- Parliament of New Zealand
- Australian Coal Association
- Kaltim Prima Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Romanian Commodities Exchange
- SMG Consultants - Indonesia
- Formosa Plastics Group - Taiwan
- Cigading International Bulk Terminal - Indonesia
- Orica Mining Services - Indonesia
- Indonesian Coal Mining Association
- Barasentosa Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Renaissance Capital - South Africa
- Carbofer General Trading SA - India
- GMR Energy Limited - India
- Simpson Spence & Young - Indonesia
- The Treasury - Australian Government
- Kapuas Tunggal Persada - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mjunction Services Limited - India
- Agrawal Coal Company - India
- Kideco Jaya Agung - Indonesia
- Coal and Oil Company - UAE
- Leighton Contractors Pty Ltd - Australia
- Bhushan Steel Limited - India
- Merrill Lynch Commodities Europe
- Vijayanagar Sugar Pvt Ltd - India
- MS Steel International - UAE
- Bhoruka Overseas - Indonesia
- Uttam Galva Steels Limited - India
- Wilmar Investment Holdings
- Sojitz Corporation - Japan
- Chettinad Cement Corporation Ltd - India
- PowerSource Philippines DevCo
- SN Aboitiz Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Metalloyd Limited - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Sree Jayajothi Cements Limited - India
- Manunggal Multi Energi - Indonesia
- Attock Cement Pakistan Limited
- Straits Asia Resources Limited - Singapore
- Power Finance Corporation Ltd., India
- Borneo Indobara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Kepco SPC Power Corporation, Philippines
- Parry Sugars Refinery, India
- PTC India Limited - India
- Marubeni Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Minerals Council of Australia
- Heidelberg Cement - Germany
- Trasteel International SA, Italy
- Holcim Trading Pte Ltd - Singapore
- AsiaOL BioFuels Corp., Philippines
- Kobexindo Tractors - Indoneisa
- IEA Clean Coal Centre - UK
- Sinarmas Energy and Mining - Indonesia
- Coalindo Energy - Indonesia
- White Energy Company Limited
- India Bulls Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Samtan Co., Ltd - South Korea
- Sakthi Sugars Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Mercator Lines Limited - India
- San Jose City I Power Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Mines - Canada
- Directorate Of Revenue Intelligence - India
- London Commodity Brokers - England
- Banpu Public Company Limited - Thailand
- Indika Energy - Indonesia
- Dalmia Cement Bharat India
- Latin American Coal - Colombia
- TeaM Sual Corporation - Philippines
- Vizag Seaport Private Limited - India
- Electricity Authority, New Zealand
- ASAPP Information Group - India
- Medco Energi Mining Internasional
- GAC Shipping (India) Pvt Ltd
- Commonwealth Bank - Australia
- Gujarat Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Australian Commodity Traders Exchange
- Goldman Sachs - Singapore
- Meralco Power Generation, Philippines
- The University of Queensland
- European Bulk Services B.V. - Netherlands
- Malabar Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Energy Development Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- PNOC Exploration Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Lanco Infratech Ltd - India
- Pendopo Energi Batubara - Indonesia
- Planning Commission, India
- Neyveli Lignite Corporation Ltd, - India
- Sarangani Energy Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Coal Council - USA
- Intertek Mineral Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Jaiprakash Power Ventures ltd
- Baramulti Group, Indonesia
- Mintek Dendrill Indonesia
- Gujarat Sidhee Cement - India
- Bayan Resources Tbk. - Indonesia
- Indogreen Group - Indonesia
- Price Waterhouse Coopers - Russia
- Anglo American - United Kingdom
- The State Trading Corporation of India Ltd
- Central Electricity Authority - India
- McConnell Dowell - Australia
- Maharashtra Electricity Regulatory Commission - India
- Xindia Steels Limited - India
- Siam City Cement PLC, Thailand
- ICICI Bank Limited - India
- Videocon Industries ltd - India
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- International Coal Ventures Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Ambuja Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Cement Manufacturers Association - India
- Toyota Tsusho Corporation, Japan
- Bhatia International Limited - India
- Kumho Petrochemical, South Korea
- Aditya Birla Group - India
- Indian Energy Exchange, India
- New Zealand Coal & Carbon
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Interocean Group of Companies - India
- Therma Luzon, Inc, Philippines
- Edison Trading Spa - Italy
- Jorong Barutama Greston.PT - Indonesia
- Wood Mackenzie - Singapore
- Energy Link Ltd, New Zealand
- Altura Mining Limited, Indonesia
- Karaikal Port Pvt Ltd - India
- Posco Energy - South Korea
- SMC Global Power, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Billiton Holdings Pty Ltd - Australia
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