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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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Friday, 04 December 09
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Friday, 04 December 09
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COALspot.com ( Press Release): Kalimantan Gold Corporation Limited ("KLG" or the "Company"), which undertook drilling and had an ...
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- Ministry of Finance - Indonesia
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- Pipit Mutiara Jaya. PT, Indonesia
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- Standard Chartered Bank - UAE
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- Maharashtra Electricity Regulatory Commission - India
- Leighton Contractors Pty Ltd - Australia
- Tata Chemicals Ltd - India
- Kepco SPC Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Gujarat Sidhee Cement - India
- GVK Power & Infra Limited - India
- Mercuria Energy - Indonesia
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- Bulk Trading Sa - Switzerland
- Essar Steel Hazira Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Xindia Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Interocean Group of Companies - India
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- Cement Manufacturers Association - India
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- IEA Clean Coal Centre - UK
- SMG Consultants - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Africa Commodities Group - South Africa
- Ministry of Transport, Egypt
- PTC India Limited - India
- Wilmar Investment Holdings
- Alfred C Toepfer International GmbH - Germany
- LBH Netherlands Bv - Netherlands
- Toyota Tsusho Corporation, Japan
- Planning Commission, India
- Iligan Light & Power Inc, Philippines
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- Eastern Energy - Thailand
- Minerals Council of Australia
- Aboitiz Power Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
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- Chamber of Mines of South Africa
- Anglo American - United Kingdom
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- Wood Mackenzie - Singapore
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- Energy Development Corp, Philippines
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- Kaltim Prima Coal - Indonesia
- Baramulti Group, Indonesia
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- Sree Jayajothi Cements Limited - India
- Latin American Coal - Colombia
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- Australian Commodity Traders Exchange
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- Formosa Plastics Group - Taiwan
- Gujarat Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Riau Bara Harum - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Ambuja Cements Ltd - India
- GMR Energy Limited - India
- Bhushan Steel Limited - India
- Straits Asia Resources Limited - Singapore
- MS Steel International - UAE
- Coastal Gujarat Power Limited - India
- Ind-Barath Power Infra Limited - India
- Georgia Ports Authority, United States
- Lanco Infratech Ltd - India
- Merrill Lynch Commodities Europe
- Savvy Resources Ltd - HongKong
- McConnell Dowell - Australia
- Bhoruka Overseas - Indonesia
- Therma Luzon, Inc, Philippines
- Parliament of New Zealand
- Rashtriya Ispat Nigam Limited - India
- Bharathi Cement Corporation - India
- Central Electricity Authority - India
- Edison Trading Spa - Italy
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- TNB Fuel Sdn Bhd - Malaysia
- Commonwealth Bank - Australia
- Global Green Power PLC Corporation, Philippines
- Star Paper Mills Limited - India
- Heidelberg Cement - Germany
- Carbofer General Trading SA - India
- Banpu Public Company Limited - Thailand
- Semirara Mining Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Indika Energy - Indonesia
- The State Trading Corporation of India Ltd
- Pendopo Energi Batubara - Indonesia
- Directorate Of Revenue Intelligence - India
- Medco Energi Mining Internasional
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ASAPP Information Group - India
- PowerSource Philippines DevCo
- Mintek Dendrill Indonesia
- SN Aboitiz Power Inc, Philippines
- Siam City Cement - Thailand
- OPG Power Generation Pvt Ltd - India
- Singapore Mercantile Exchange
- Electricity Generating Authority of Thailand
- Kartika Selabumi Mining - Indonesia
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- Petron Corporation, Philippines
- Agrawal Coal Company - India
- Asmin Koalindo Tuhup - Indonesia
- CIMB Investment Bank - Malaysia
- Goldman Sachs - Singapore
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- Marubeni Corporation - India
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- GN Power Mariveles Coal Plant, Philippines
- Binh Thuan Hamico - Vietnam
- Energy Link Ltd, New Zealand
- Altura Mining Limited, Indonesia
- Intertek Mineral Services - Indonesia
- South Luzon Thermal Energy Corporation
- Coalindo Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Economic Council, Georgia
- White Energy Company Limited
- Indonesian Coal Mining Association
- Chettinad Cement Corporation Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rio Tinto Coal - Australia
- London Commodity Brokers - England
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- New Zealand Coal & Carbon
- Grasim Industreis Ltd - India
- The University of Queensland
- Siam City Cement PLC, Thailand
- San Jose City I Power Corp, Philippines
- Barasentosa Lestari - Indonesia
- VISA Power Limited - India
- Dalmia Cement Bharat India
- Posco Energy - South Korea
- Aditya Birla Group - India
- The Treasury - Australian Government
- International Coal Ventures Pvt Ltd - India
- Indian Oil Corporation Limited
- Kumho Petrochemical, South Korea
- European Bulk Services B.V. - Netherlands
- Indian Energy Exchange, India
- Global Business Power Corporation, Philippines
- Parry Sugars Refinery, India
- Kohat Cement Company Ltd. - Pakistan
- Sical Logistics Limited - India
- PNOC Exploration Corporation - Philippines
- Deloitte Consulting - India
- Coal and Oil Company - UAE
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- TeaM Sual Corporation - Philippines
- Sakthi Sugars Limited - India
- Holcim Trading Pte Ltd - Singapore
- Australian Coal Association
- Gujarat Mineral Development Corp Ltd - India
- Kideco Jaya Agung - Indonesia
- Orica Mining Services - Indonesia
- Ministry of Mines - Canada
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Metalloyd Limited - United Kingdom
- Electricity Authority, New Zealand
- Antam Resourcindo - Indonesia
- Jaiprakash Power Ventures ltd
- Makarim & Taira - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Sojitz Corporation - Japan
- PetroVietnam Power Coal Import and Supply Company
- Salva Resources Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Trasteel International SA, Italy
- Bahari Cakrawala Sebuku - Indonesia
- Vedanta Resources Plc - India
- Romanian Commodities Exchange
- GAC Shipping (India) Pvt Ltd
- Port Waratah Coal Services - Australia
- Global Coal Blending Company Limited - Australia
- Billiton Holdings Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Independent Power Producers Association of India
- Thai Mozambique Logistica
- Bhatia International Limited - India
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