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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, 16 December 09
COAL MARKETS 2010 CONFERENCE - PRESS RELEASE
COALspot.com (Singapore) Press Release – Back for the 8th year, Coal Markets 2010 will be taking place in Singapore on 28 – 29 Jan ...
Wednesday, 16 December 09
CHINA 2010 COAL TERM PRICES SEEN RISING 8% ON YEAR
Term prices of thermal coal for 2010 in China are expected to rise about 8 percent from this year's levels, as demand for power has been roaring ba ...
Wednesday, 16 December 09
KANGAROO RESOURCES TO ACQUIRE INDONESIAN COAL INTERESTS
Emerging coal producer Kangaroo Resources has significantly enhanced its production pipeline in Indonesia after reaching agreement to acquire a coki ...
Wednesday, 16 December 09
UAE'S RAS AL KHAIMAH TO INVEST $5.2B IN EAST KALIMANTAN PROJECT
Shrugging off neighbor Dubai’s debt problems, the smaller United Arab Emirate of Ras Al Khaimah announced on Tuesday that it would increase it ...
Wednesday, 16 December 09
COECLERICI EYES SECOND RUSSIA COAL MINE
* CEO says "seriously considering" mid-small size purchase
* Will use mine to increase exports to Asia
* Says delays at ports will not c ...
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- Simpson Spence & Young - Indonesia
- Price Waterhouse Coopers - Russia
- Jorong Barutama Greston.PT - Indonesia
- Merrill Lynch Commodities Europe
- Tata Chemicals Ltd - India
- Xindia Steels Limited - India
- Indian Energy Exchange, India
- Iligan Light & Power Inc, Philippines
- IEA Clean Coal Centre - UK
- McConnell Dowell - Australia
- Interocean Group of Companies - India
- Dalmia Cement Bharat India
- London Commodity Brokers - England
- Kartika Selabumi Mining - Indonesia
- Larsen & Toubro Limited - India
- Essar Steel Hazira Ltd - India
- Mercator Lines Limited - India
- Rashtriya Ispat Nigam Limited - India
- Bulk Trading Sa - Switzerland
- Marubeni Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Anglo American - United Kingdom
- Heidelberg Cement - Germany
- Eastern Energy - Thailand
- Kapuas Tunggal Persada - Indonesia
- Kobexindo Tractors - Indoneisa
- Edison Trading Spa - Italy
- Manunggal Multi Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Jindal Steel & Power Ltd - India
- Economic Council, Georgia
- SMG Consultants - Indonesia
- MS Steel International - UAE
- Metalloyd Limited - United Kingdom
- GVK Power & Infra Limited - India
- Mjunction Services Limited - India
- Bukit Baiduri Energy - Indonesia
- Posco Energy - South Korea
- Attock Cement Pakistan Limited
- Orica Australia Pty. Ltd.
- AsiaOL BioFuels Corp., Philippines
- TNB Fuel Sdn Bhd - Malaysia
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- GAC Shipping (India) Pvt Ltd
- Coalindo Energy - Indonesia
- Goldman Sachs - Singapore
- Karaikal Port Pvt Ltd - India
- Meralco Power Generation, Philippines
- Bhoruka Overseas - Indonesia
- ASAPP Information Group - India
- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kumho Petrochemical, South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Green Power PLC Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Global Coal Blending Company Limited - Australia
- Sical Logistics Limited - India
- New Zealand Coal & Carbon
- Parliament of New Zealand
- Ministry of Mines - Canada
- TeaM Sual Corporation - Philippines
- Indika Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Independent Power Producers Association of India
- Ministry of Finance - Indonesia
- Lanco Infratech Ltd - India
- Electricity Generating Authority of Thailand
- Leighton Contractors Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Aditya Birla Group - India
- Mintek Dendrill Indonesia
- Billiton Holdings Pty Ltd - Australia
- San Jose City I Power Corp, Philippines
- Bangladesh Power Developement Board
- Africa Commodities Group - South Africa
- Energy Link Ltd, New Zealand
- Chamber of Mines of South Africa
- PNOC Exploration Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Australian Commodity Traders Exchange
- Bayan Resources Tbk. - Indonesia
- IHS Mccloskey Coal Group - USA
- Ind-Barath Power Infra Limited - India
- Georgia Ports Authority, United States
- Semirara Mining and Power Corporation, Philippines
- Malabar Cements Ltd - India
- Port Waratah Coal Services - Australia
- Barasentosa Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Sakthi Sugars Limited - India
- Cement Manufacturers Association - India
- GN Power Mariveles Coal Plant, Philippines
- Kohat Cement Company Ltd. - Pakistan
- VISA Power Limited - India
- Mercuria Energy - Indonesia
- Siam City Cement - Thailand
- PowerSource Philippines DevCo
- Star Paper Mills Limited - India
- Rio Tinto Coal - Australia
- Videocon Industries ltd - India
- Petron Corporation, Philippines
- Coal and Oil Company - UAE
- Indogreen Group - Indonesia
- Power Finance Corporation Ltd., India
- Romanian Commodities Exchange
- Savvy Resources Ltd - HongKong
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- LBH Netherlands Bv - Netherlands
- Tamil Nadu electricity Board
- The State Trading Corporation of India Ltd
- Timah Investasi Mineral - Indoneisa
- Sindya Power Generating Company Private Ltd
- Deloitte Consulting - India
- Intertek Mineral Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Baramulti Group, Indonesia
- Riau Bara Harum - Indonesia
- Standard Chartered Bank - UAE
- Directorate Of Revenue Intelligence - India
- PetroVietnam Power Coal Import and Supply Company
- International Coal Ventures Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Therma Luzon, Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Planning Commission, India
- The Treasury - Australian Government
- Indonesian Coal Mining Association
- Petrochimia International Co. Ltd.- Taiwan
- Energy Development Corp, Philippines
- The University of Queensland
- Vedanta Resources Plc - India
- Kalimantan Lumbung Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- Orica Mining Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Toyota Tsusho Corporation, Japan
- Medco Energi Mining Internasional
- OPG Power Generation Pvt Ltd - India
- Trasteel International SA, Italy
- Altura Mining Limited, Indonesia
- Pendopo Energi Batubara - Indonesia
- CNBM International Corporation - China
- Bukit Makmur.PT - Indonesia
- Siam City Cement PLC, Thailand
- Miang Besar Coal Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Latin American Coal - Colombia
- Borneo Indobara - Indonesia
- Indo Tambangraya Megah - Indonesia
- Minerals Council of Australia
- Globalindo Alam Lestari - Indonesia
- Oldendorff Carriers - Singapore
- Antam Resourcindo - Indonesia
- Wilmar Investment Holdings
- Samtan Co., Ltd - South Korea
- Singapore Mercantile Exchange
- Karbindo Abesyapradhi - Indoneisa
- Ambuja Cements Ltd - India
- Agrawal Coal Company - India
- PTC India Limited - India
- Global Business Power Corporation, Philippines
- Electricity Authority, New Zealand
- Central Electricity Authority - India
- Bhushan Steel Limited - India
- India Bulls Power Limited - India
- Bhatia International Limited - India
- Renaissance Capital - South Africa
- Sojitz Corporation - Japan
- Cigading International Bulk Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- Kaltim Prima Coal - Indonesia
- Thiess Contractors Indonesia
- Gujarat Sidhee Cement - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Coal Council - USA
- Maheswari Brothers Coal Limited - India
- Gujarat Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Salva Resources Pvt Ltd - India
- Commonwealth Bank - Australia
- Central Java Power - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- SN Aboitiz Power Inc, Philippines
- Indian Oil Corporation Limited
- Wood Mackenzie - Singapore
- White Energy Company Limited
- Maharashtra Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Formosa Plastics Group - Taiwan
- GMR Energy Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Sarangani Energy Corporation, Philippines
- Uttam Galva Steels Limited - India
- Bharathi Cement Corporation - India
- Aboitiz Power Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Vijayanagar Sugar Pvt Ltd - India
- Madhucon Powers Ltd - India
- ICICI Bank Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coastal Gujarat Power Limited - India
- Meenaskhi Energy Private Limited - India
- Ministry of Transport, Egypt
- Chettinad Cement Corporation Ltd - India
- Parry Sugars Refinery, India
- Carbofer General Trading SA - India
- Grasim Industreis Ltd - India
- Australian Coal Association
- Binh Thuan Hamico - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Makarim & Taira - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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