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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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Monday, 28 December 09
SOMALI PIRATES SAY $4 MILLION RANSOM PAID FOR COAL SHIP
A helicopter dropped a $4 million ransom payment on Sunday on to the deck of a Chinese coal ship hijacked by Somali pirates in mid-October, a pirate ...
Saturday, 26 December 09
COAL INDIA, RIO TINTO MAY HOLD TALKS SOON ON TIE-UP
State owned Coal India Limited (CIL), which is in the race for acquisition of overseas coal properties to plug the demand supply shortfall of the dr ...
Saturday, 26 December 09
COKING COAL PRICES MAY RISE BY 10 - 15% FROM APRIL 2010
The price of coking coal, one of the key raw materials for steel production, is likely to increase by 10-15% in next April, the month in which m ...
Saturday, 26 December 09
COAL INDIA SECURES TWO BLOCKS IN MOZAMBIQUE
It's official now. Mozambique has awarded two coal acreages in its Maotize region with an estimated one billion tonne reserves to Coal India Ltd bu ...
Thursday, 24 December 09
DRY BULK CHARTERING - SHIPPING UPDATE
Handy
Continued firm conditions for the Handymax / Supramax market in the Atlantic despite the BSI´s downward trend. As chrs scramble to cov ...
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- Parliament of New Zealand
- European Bulk Services B.V. - Netherlands
- Orica Australia Pty. Ltd.
- Petron Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Wilmar Investment Holdings
- Formosa Plastics Group - Taiwan
- Renaissance Capital - South Africa
- Binh Thuan Hamico - Vietnam
- Samtan Co., Ltd - South Korea
- Pendopo Energi Batubara - Indonesia
- Ministry of Finance - Indonesia
- Rio Tinto Coal - Australia
- The Treasury - Australian Government
- IHS Mccloskey Coal Group - USA
- Ministry of Transport, Egypt
- CNBM International Corporation - China
- The State Trading Corporation of India Ltd
- Kartika Selabumi Mining - Indonesia
- Port Waratah Coal Services - Australia
- ICICI Bank Limited - India
- Sojitz Corporation - Japan
- Thiess Contractors Indonesia
- LBH Netherlands Bv - Netherlands
- Bhoruka Overseas - Indonesia
- Bayan Resources Tbk. - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Meralco Power Generation, Philippines
- Commonwealth Bank - Australia
- Romanian Commodities Exchange
- Manunggal Multi Energi - Indonesia
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- International Coal Ventures Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- PetroVietnam Power Coal Import and Supply Company
- Wood Mackenzie - Singapore
- Cigading International Bulk Terminal - Indonesia
- Edison Trading Spa - Italy
- Billiton Holdings Pty Ltd - Australia
- MS Steel International - UAE
- Kohat Cement Company Ltd. - Pakistan
- Alfred C Toepfer International GmbH - Germany
- Trasteel International SA, Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ASAPP Information Group - India
- Dalmia Cement Bharat India
- Gujarat Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- McConnell Dowell - Australia
- Sinarmas Energy and Mining - Indonesia
- Central Java Power - Indonesia
- Energy Link Ltd, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Eastern Energy - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Africa Commodities Group - South Africa
- Ambuja Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
- Jaiprakash Power Ventures ltd
- Semirara Mining Corp, Philippines
- Electricity Generating Authority of Thailand
- VISA Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- PowerSource Philippines DevCo
- Semirara Mining and Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Star Paper Mills Limited - India
- Energy Development Corp, Philippines
- Bangladesh Power Developement Board
- Lanco Infratech Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Price Waterhouse Coopers - Russia
- Banpu Public Company Limited - Thailand
- Kumho Petrochemical, South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TeaM Sual Corporation - Philippines
- Siam City Cement PLC, Thailand
- Bhushan Steel Limited - India
- Indian Energy Exchange, India
- South Luzon Thermal Energy Corporation
- Mjunction Services Limited - India
- CIMB Investment Bank - Malaysia
- Borneo Indobara - Indonesia
- Indogreen Group - Indonesia
- Vedanta Resources Plc - India
- Mercator Lines Limited - India
- Agrawal Coal Company - India
- GAC Shipping (India) Pvt Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Minerals Council of Australia
- Anglo American - United Kingdom
- Mintek Dendrill Indonesia
- Global Business Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Heidelberg Cement - Germany
- Ministry of Mines - Canada
- Meenaskhi Energy Private Limited - India
- Posco Energy - South Korea
- Sakthi Sugars Limited - India
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Offshore Bulk Terminal Pte Ltd, Singapore
- Simpson Spence & Young - Indonesia
- Malabar Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Globalindo Alam Lestari - Indonesia
- SMC Global Power, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Altura Mining Limited, Indonesia
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- Bukit Makmur.PT - Indonesia
- Indian Oil Corporation Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GVK Power & Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Chettinad Cement Corporation Ltd - India
- Directorate Of Revenue Intelligence - India
- Neyveli Lignite Corporation Ltd, - India
- Bahari Cakrawala Sebuku - Indonesia
- Deloitte Consulting - India
- Coalindo Energy - Indonesia
- Vizag Seaport Private Limited - India
- Parry Sugars Refinery, India
- Kaltim Prima Coal - Indonesia
- White Energy Company Limited
- Coastal Gujarat Power Limited - India
- Independent Power Producers Association of India
- Tata Chemicals Ltd - India
- Indika Energy - Indonesia
- The University of Queensland
- Gujarat Sidhee Cement - India
- Straits Asia Resources Limited - Singapore
- Siam City Cement - Thailand
- Kepco SPC Power Corporation, Philippines
- Latin American Coal - Colombia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Larsen & Toubro Limited - India
- Leighton Contractors Pty Ltd - Australia
- Planning Commission, India
- Grasim Industreis Ltd - India
- Global Green Power PLC Corporation, Philippines
- Carbofer General Trading SA - India
- Australian Coal Association
- Oldendorff Carriers - Singapore
- Ind-Barath Power Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Aditya Birla Group - India
- Orica Mining Services - Indonesia
- PTC India Limited - India
- Rashtriya Ispat Nigam Limited - India
- Maheswari Brothers Coal Limited - India
- Standard Chartered Bank - UAE
- Jindal Steel & Power Ltd - India
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bhatia International Limited - India
- Videocon Industries ltd - India
- Iligan Light & Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Attock Cement Pakistan Limited
- Eastern Coal Council - USA
- Intertek Mineral Services - Indonesia
- Chamber of Mines of South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Interocean Group of Companies - India
- Xindia Steels Limited - India
- Medco Energi Mining Internasional
- Economic Council, Georgia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Riau Bara Harum - Indonesia
- Global Coal Blending Company Limited - Australia
- Uttam Galva Steels Limited - India
- Mercuria Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Merrill Lynch Commodities Europe
- Therma Luzon, Inc, Philippines
- Bharathi Cement Corporation - India
- GMR Energy Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Cement Manufacturers Association - India
- Bulk Trading Sa - Switzerland
- Thai Mozambique Logistica
- Sical Logistics Limited - India
- New Zealand Coal & Carbon
- Savvy Resources Ltd - HongKong
- Metalloyd Limited - United Kingdom
- Central Electricity Authority - India
- Kobexindo Tractors - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Power Finance Corporation Ltd., India
- Sindya Power Generating Company Private Ltd
- San Jose City I Power Corp, Philippines
- Singapore Mercantile Exchange
- SMG Consultants - Indonesia
- Baramulti Group, Indonesia
- Coal and Oil Company - UAE
- London Commodity Brokers - England
- Sree Jayajothi Cements Limited - India
- Marubeni Corporation - India
- Indonesian Coal Mining Association
- Goldman Sachs - Singapore
- Ceylon Electricity Board - Sri Lanka
- Georgia Ports Authority, United States
- Maharashtra Electricity Regulatory Commission - India
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