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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, 12 December 09
INDONESIA'S COAL RUSH - SOOTY SUCCESS
Rising demand from China and India is stoking Indonesia’s exports of coal
FOR power stations on the coast of China, it is often cheaper to ...
Thursday, 10 December 09
ENVIROCOAL REGISTERED IN 33 COUNTRIES
PT Adaro concerned to register the brand overseas
PT Adaro Energy Tbk has registered the Envirocoal trademark for its coal products in 33 countri ...
Thursday, 10 December 09
INDIA TO IMPORT 28 MILLION TONNE OF STEAM COAL
Faced with short supply of coal from domestic sources, the Indian power ministry has revised upwards its coal import target for the current fiscal t ...
Thursday, 10 December 09
INDONESIA'S NEW MINING LAW WILL NOT LIMIT COAL EXPORTS, SAYS GOVERNMENT
The government will allow coal producers to continue exporting even if they miss domestic sales requirements, a senior mining official said, marking ...
Wednesday, 09 December 09
INDONESIA'S RECAPITAL TO PAY $1.48 BLN FOR BERAU
Recapital Advisors, an Indonesian investment firm, will pay $1.48 billion in cash and notes to buy coal miner PT Berau Coal, $300 million of which i ...
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- Indian Energy Exchange, India
- Georgia Ports Authority, United States
- Orica Australia Pty. Ltd.
- Indian Oil Corporation Limited
- Heidelberg Cement - Germany
- Parliament of New Zealand
- Chamber of Mines of South Africa
- Madhucon Powers Ltd - India
- Indika Energy - Indonesia
- Lanco Infratech Ltd - India
- Altura Mining Limited, Indonesia
- The Treasury - Australian Government
- Economic Council, Georgia
- Holcim Trading Pte Ltd - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Cement Manufacturers Association - India
- AsiaOL BioFuels Corp., Philippines
- Sical Logistics Limited - India
- Anglo American - United Kingdom
- Ministry of Mines - Canada
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- Renaissance Capital - South Africa
- London Commodity Brokers - England
- Merrill Lynch Commodities Europe
- Indonesian Coal Mining Association
- Aboitiz Power Corporation - Philippines
- Bhushan Steel Limited - India
- SMC Global Power, Philippines
- Bukit Makmur.PT - Indonesia
- Edison Trading Spa - Italy
- San Jose City I Power Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Kobexindo Tractors - Indoneisa
- Maheswari Brothers Coal Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- OPG Power Generation Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- PowerSource Philippines DevCo
- Barasentosa Lestari - Indonesia
- Thiess Contractors Indonesia
- Energy Link Ltd, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Baramulti Group, Indonesia
- Oldendorff Carriers - Singapore
- Bulk Trading Sa - Switzerland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Mining Services - Indonesia
- New Zealand Coal & Carbon
- Billiton Holdings Pty Ltd - Australia
- Carbofer General Trading SA - India
- Kideco Jaya Agung - Indonesia
- Banpu Public Company Limited - Thailand
- Electricity Generating Authority of Thailand
- Central Electricity Authority - India
- Indo Tambangraya Megah - Indonesia
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- Ministry of Transport, Egypt
- Australian Commodity Traders Exchange
- Intertek Mineral Services - Indonesia
- PTC India Limited - India
- Aditya Birla Group - India
- Sindya Power Generating Company Private Ltd
- Pendopo Energi Batubara - Indonesia
- Standard Chartered Bank - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Wilmar Investment Holdings
- Eastern Coal Council - USA
- The State Trading Corporation of India Ltd
- ASAPP Information Group - India
- Coalindo Energy - Indonesia
- Meralco Power Generation, Philippines
- Electricity Authority, New Zealand
- Global Green Power PLC Corporation, Philippines
- Petron Corporation, Philippines
- Ambuja Cements Ltd - India
- Independent Power Producers Association of India
- Karbindo Abesyapradhi - Indoneisa
- Straits Asia Resources Limited - Singapore
- Global Business Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Kepco SPC Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Rio Tinto Coal - Australia
- Global Coal Blending Company Limited - Australia
- Essar Steel Hazira Ltd - India
- Sakthi Sugars Limited - India
- Eastern Energy - Thailand
- Kaltim Prima Coal - Indonesia
- Medco Energi Mining Internasional
- Trasteel International SA, Italy
- Therma Luzon, Inc, Philippines
- Attock Cement Pakistan Limited
- Uttam Galva Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Jaiprakash Power Ventures ltd
- International Coal Ventures Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Coastal Gujarat Power Limited - India
- Port Waratah Coal Services - Australia
- Kumho Petrochemical, South Korea
- Star Paper Mills Limited - India
- CIMB Investment Bank - Malaysia
- SN Aboitiz Power Inc, Philippines
- Australian Coal Association
- Tamil Nadu electricity Board
- Larsen & Toubro Limited - India
- Sree Jayajothi Cements Limited - India
- TeaM Sual Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- GAC Shipping (India) Pvt Ltd
- CNBM International Corporation - China
- GVK Power & Infra Limited - India
- Siam City Cement - Thailand
- Toyota Tsusho Corporation, Japan
- Semirara Mining Corp, Philippines
- Samtan Co., Ltd - South Korea
- Singapore Mercantile Exchange
- Coal and Oil Company - UAE
- Leighton Contractors Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Malabar Cements Ltd - India
- MS Steel International - UAE
- GN Power Mariveles Coal Plant, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Gujarat Sidhee Cement - India
- Bangladesh Power Developement Board
- Bukit Baiduri Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Romanian Commodities Exchange
- GMR Energy Limited - India
- Xindia Steels Limited - India
- The University of Queensland
- PetroVietnam Power Coal Import and Supply Company
- Videocon Industries ltd - India
- India Bulls Power Limited - India
- ICICI Bank Limited - India
- Grasim Industreis Ltd - India
- Dalmia Cement Bharat India
- Directorate General of MIneral and Coal - Indonesia
- Mercator Lines Limited - India
- Bhatia International Limited - India
- Planning Commission, India
- Ceylon Electricity Board - Sri Lanka
- Price Waterhouse Coopers - Russia
- Meenaskhi Energy Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- IEA Clean Coal Centre - UK
- Marubeni Corporation - India
- Salva Resources Pvt Ltd - India
- McConnell Dowell - Australia
- Indogreen Group - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Cigading International Bulk Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate Of Revenue Intelligence - India
- Siam City Cement PLC, Thailand
- Vedanta Resources Plc - India
- Chettinad Cement Corporation Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Borneo Indobara - Indonesia
- PNOC Exploration Corporation - Philippines
- Antam Resourcindo - Indonesia
- Simpson Spence & Young - Indonesia
- Agrawal Coal Company - India
- IHS Mccloskey Coal Group - USA
- Ind-Barath Power Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Mintek Dendrill Indonesia
- Bhoruka Overseas - Indonesia
- Latin American Coal - Colombia
- Formosa Plastics Group - Taiwan
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Parry Sugars Refinery, India
- Deloitte Consulting - India
- Mjunction Services Limited - India
- Bharathi Cement Corporation - India
- SMG Consultants - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Metalloyd Limited - United Kingdom
- Wood Mackenzie - Singapore
- White Energy Company Limited
- Gujarat Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- Minerals Council of Australia
- Iligan Light & Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Ministry of Finance - Indonesia
- Posco Energy - South Korea
- Globalindo Alam Lestari - Indonesia
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- Power Finance Corporation Ltd., India
- Asmin Koalindo Tuhup - Indonesia
- Goldman Sachs - Singapore
- VISA Power Limited - India
- Interocean Group of Companies - India
- Karaikal Port Pvt Ltd - India
- Makarim & Taira - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sojitz Corporation - Japan
- Bayan Resources Tbk. - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
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