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Tuesday, 02 November 10
ADDED VALUE REMAINS STAGNANT - MAJALAH TAMBANG
 The improvement of added value of mining products in accordance with mandate of the mining law has not been visible. Minerals and coal are still exported in the form of raw materials. Added value of Indonesia's mining products remains in the course of pilot project.
As reported by Majalah Tambang, Energy and Mineral Resource Minister Darwin Zahedy Saleh surely knows that the added value of mining products remains unchanged. The spirit rumbling some time ago seems clueless. For the purpose, the economist graduating from Jakarta-based University of Indonesia needs to pump it by affirming again the commitment of the government. “We will boost it (smelter development),” he said after inaugurating a seminar on the Enhancement of Mining Added Value in Jakarta on October 6,2010.
As a concrete measure to support the acceleration, the Ministry of Energy and Mineral Resources plans to issue a ministerial regulation regarding the enhancement of added value of mining products. The ministerial regulation constitutes part of the application of Mining Law Number 4 Year 2009 and Government Regulation Number 23 Year 2010 regarding the Execution of Mineral and Coal Mining Business Activities.
“Hopefully, it would have been issued in November and the draft is being prepared,” he said.
In addition, he would also convince the Finance Ministry that the added value would contribute great economic benefit to this nation and the people's welfare so that the activity deserves tax incentive as stimulus to attract investors.
What is disclosed by the Minister with regards to the political will of the government and policies to be applied to enhance added value become panacea for uneasiness of many people because added value of mining products owned by Indonesia is mostly enjoyed by other countries.
Data presented by the Directorate General of Minerals, Coal and Geothermal in 2009 also show that mining products are mostly destined to the export. The share of the export is 70% in coal, 70% in copper and 100% in nickel.
Mineral commodities have been proceeded so that they can be used by other sectors, such as industry, defense and health. For instance, tin ores have been processed to become tin metal, nickel ores have been proceeded to become ferro-nikel and nickelmatte or copper has been proceeded to become copper concentrates, mainly coppoer containing copper, gold and silver. However, the quantity is not higher than 30%, while the remainder is exported in the form of raw materials.
Ironically, in the country having abundant natural resources, even a senior official of the ESDM ministry once joked that all Indonesian mining products have their number, the people still strive to come out of poverty.
Data presented by the Investment Coordinating Board (BKPM) in 2009, show that Indonesia has the second largest tin potential in the world. In the meantime, the copper reserves in Papua, Maluku and Nusa Tenggara also ranks second in the world. Nickel comes into the fifth place, gold is the seventh place and coal ranks eight globalwide.
Ambiguity of Mining Products
The country faces an ambiguous condition as several minerals, such as iron ores and bauxites are exported in the form of raw materials but the country imports iron sponge or pellet to fulfill the need of domestic stell industry or alumina for aluminium industry.
Coal is still treated like charcoal whereas in other countries, South Africa, for instance, coal has been converted into fuel, gasification, coal liquefaction or carbon and several deri-vative products.
The condition encourages the government to include added value into Mining Law Number 4 Year 2009.
Data presented by BKPM in 2010 try to compare added value resulting from bauxite. Based on the data, every ton of bauxite is priced for US$17.
However, after the mineral is processed to become alumina, the price increases eight times to US$350 per ton. If the product is further processed to become alumunium, the price becomes US$2,500/ton, rising 30 times.
In the case of nickel, the price is only US$250 per ton of nickel ore, but the price increases seven times to US$2,574 per ton if the mineral is processed to become FeNi and rises 19 times to US$2,627 per ton after the product is sold in the form of stainless steel.
The description shows that price hike results from every kind of further processing. Other parties have enjoyed the largest profit of Indonesia's mining products for decades, while the prosperity Indonesian people enjoys from mineral resources as mandated by the constitution has never materialized.
Director of the International Business Community Cooperation of BKPM Lily Herawaty said that Indonesia has the seventh largest bauxite reserves in the world and the bauxite is wholly exported in the from of raw material, while importing ferronickel from Australia to fulfill the need of aluminium smelter.Lily also said that Indonesia needs to enhance capacity of aluminium smelter because it constitutes a strategic upstream industry potential to support numerous downstream industries.
Stagnant
Director General of Mineral and Coal Bambang Setiawan said that there is no progress in the enhancement of added value of mining products, either processing or refining.
The statement is also justified by Director of Mineral and Coal Exploitation Development Bambang Gatot Ariyono. ”For the new one, following the issuance of the mining law, the added value has not increased,” he said. Only the existing one, such as smelter, intends to increase the added value but it has not been realized.
Sharing of the same view, Ir. Lily Herawaty,MM, Director of Manufacturing Industry Planning of BKPM said that none of the companies apply for a license to establish smelter after the domestic refining obligation is stipulated in the mining law. New investment in the smelter business is nil either. The existing is only PT. Smelter Gresik, but it has operated before the new mineral and coal law was issued. No company comes into the sector following the enactment of the law.
Head of the Metal, Machine, Textile and Multifarious Industries Sub-Directorate of teh Industry Ministry Wisnu Wijaya Soedibjo also justified the statement.
The existing is only foreign investment, PT Smelting Gresik, belonging to Mitsubishi and it has operated since 1990s. Next is PT Inalum Ashan. In the meantime, the new one, PT. Nusantara Smelting will start the construction in 2011. Reportedly, another smelter PT. Indosmlet in Makassar has secured license form BKPM.
"The new ones are only the companies, while the other has not come," he went on.
Bambang Gatot Ariyono suggested mining companies to cooperate with the gobernment, submit the results of their studies to the government so that solution can be found, whether incentive or other.
“Actually the government also wants to know complaints and expectations of the companies so that both parties could find the best solution because it constitutes a mandate of the law,” he said upon meeting TAMBANG.
However, he conceded none of the companies have submitted input to the government after the companies studied scale of economy and other issues. He also asked the compa-nies to abide by the provision of the law. At least, the companies respect the rule by starting to think about the processing and purification of mining products.
According to him, the government is very open to inputs from parties, including industries, after studying scale of economy of the enhancement of added value.
However, no input has come from companies as if they do not care or concern about the added value issue. He asked companies to not commit it intentionally thus becoming home-work of the government.
“We could talk if they have studied but it is not fulfilled. However, none leads to the extent, whether it's economical or not cannot be proved,” he went on.
In view of the condition, it's not wrong if Presidium Chairman of the Indonesia Mining Society [MPI] Herman Afif Kusumo said firmly that the added value of Indonesia's mining products remains stagnant. The mining specialist has not seen the firmness of the government so that mining business communities have not been obedient wherease the law clearly stipulates that the development of smelter constitutes an obligation.
In the meantime, General Chairman of the Mining Specialist Association (Perhapi) Prof. Irwandy Arief said that the added value of Indonesia's mining products remain in the course of pilot project and has not become an industry whereas the develpment of a smelter, mainly metal smelteer needs around eight years. Unless we prepare from now, the five-year target stipulated in the law won't be fulfilled.
“I am afraid that the five year deadline will elapse unless we take an integrated measure from the upstream to down-stream, ” he said.
Besides costlier, techology still copies other countries. The utilization of the smelter technology will be analyzed from the scale of economy for certain capacity.
In addition, each commodities have different characteristic so that thorough study is needed. Consumers of the products resulting from the enhancement of the added value also needs assesment and attention.
“As a profession organization, Perhapi wants to abridge industry and the government so as to be able to seek the best solution to the enhancement of the added value,” he went on.
In relation thereto, he asked the government to issue policies facilitating investment in the field because investment in smelter is very costlier. According to him, the amount of investment needed for building a smelter is around US$600 million, and surely it's different for each commodities, dependent on the adopted technology.
Later, industry must have a business plan, prepare from now, whether they build individually or cooperate through consortium. Obviously, we must have readiness first, through studies and others.
“The issue is not easy and complex because it's necessary to prepare in an integrated manner as from the upstream to the downstream,” he went on.
Unless the condition is improved, this nation won't be able to enjoy the added value of mining products fully in 2014, five years following the enactment of the mining law.
Source: Majalah Tambang (Alamsyah Pua Saba)
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Tuesday, 04 January 11
BALI, INDONESIA HOST OF WORLD RENEWABLE ENERGY AND ENERGY EFFICIENCY CONFERENCE
Press Release - Indonesian Renewable Energy Society (METI – IRES) has launched the plan for organizing the international gathering ...
Tuesday, 04 January 11
DRY BULK MARKET TO RANGE BETWEEN 1,700 AND 2,600 POINTS IN THE FIRST QUARTER OF 2011, ANALYSTS SAY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
As we entered 2011, ship owners and analysts, as well as shipbrokers are looking into their “crystal balls” to try to decode the dry bul ...
Monday, 03 January 11
TAXATION FOR COAL MINING COMPANIES IN INDONESIA - A TAX EXPERTS VIEW
COALspot.com - Mrs. Sri Wahyuni Sujono, managing partner of SF Consulting has wrote an exclusive report regarding taxation for coal mining companies ...
Sunday, 02 January 11
JAISWAL TO SEEK COAL MINES IN AFRICA - HINDUSTAN TIMES
Coal Minister Sriprakash Jaiswal will talk with his counterparts in South Africa and Mozambique during his visit from January 5 to secure coal asset ...
Saturday, 01 January 11
COAL PRODUCTION EXPECTED TO EXCEED 340 MILLION TONS THIS YEAR - THE JAKARTA POST
The Jakarta Post reported that, Indonesian coal miners expect to produce 340 million tons of coal in 2011, an increase of 23 percent from 275 millio ...
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- Bharathi Cement Corporation - India
- Bulk Trading Sa - Switzerland
- AsiaOL BioFuels Corp., Philippines
- Bhatia International Limited - India
- Edison Trading Spa - Italy
- Merrill Lynch Commodities Europe
- Therma Luzon, Inc, Philippines
- Antam Resourcindo - Indonesia
- Sree Jayajothi Cements Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Deloitte Consulting - India
- Lanco Infratech Ltd - India
- Renaissance Capital - South Africa
- Global Coal Blending Company Limited - Australia
- ASAPP Information Group - India
- Karaikal Port Pvt Ltd - India
- Mercuria Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Eastern Energy - Thailand
- Intertek Mineral Services - Indonesia
- Mintek Dendrill Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Oil Corporation Limited
- Sakthi Sugars Limited - India
- Cigading International Bulk Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kartika Selabumi Mining - Indonesia
- India Bulls Power Limited - India
- McConnell Dowell - Australia
- Neyveli Lignite Corporation Ltd, - India
- TNB Fuel Sdn Bhd - Malaysia
- Marubeni Corporation - India
- Directorate Of Revenue Intelligence - India
- PTC India Limited - India
- Gujarat Sidhee Cement - India
- Savvy Resources Ltd - HongKong
- Anglo American - United Kingdom
- Formosa Plastics Group - Taiwan
- Mjunction Services Limited - India
- Carbofer General Trading SA - India
- Orica Mining Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Trasteel International SA, Italy
- Maharashtra Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Vizag Seaport Private Limited - India
- Coal and Oil Company - UAE
- Cement Manufacturers Association - India
- Electricity Authority, New Zealand
- Metalloyd Limited - United Kingdom
- Borneo Indobara - Indonesia
- Bukit Baiduri Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Bhushan Steel Limited - India
- Manunggal Multi Energi - Indonesia
- Energy Development Corp, Philippines
- Standard Chartered Bank - UAE
- Xindia Steels Limited - India
- Banpu Public Company Limited - Thailand
- Salva Resources Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Mines - Canada
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- Energy Link Ltd, New Zealand
- Commonwealth Bank - Australia
- Australian Commodity Traders Exchange
- Medco Energi Mining Internasional
- Petrochimia International Co. Ltd.- Taiwan
- Samtan Co., Ltd - South Korea
- Larsen & Toubro Limited - India
- Rashtriya Ispat Nigam Limited - India
- Holcim Trading Pte Ltd - Singapore
- Billiton Holdings Pty Ltd - Australia
- PowerSource Philippines DevCo
- Barasentosa Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- London Commodity Brokers - England
- CNBM International Corporation - China
- Semirara Mining Corp, Philippines
- Central Java Power - Indonesia
- Siam City Cement PLC, Thailand
- Port Waratah Coal Services - Australia
- VISA Power Limited - India
- Toyota Tsusho Corporation, Japan
- Maheswari Brothers Coal Limited - India
- European Bulk Services B.V. - Netherlands
- Latin American Coal - Colombia
- Dalmia Cement Bharat India
- Tata Chemicals Ltd - India
- Posco Energy - South Korea
- Vedanta Resources Plc - India
- IEA Clean Coal Centre - UK
- Sindya Power Generating Company Private Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Bangladesh Power Developement Board
- Semirara Mining and Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Jindal Steel & Power Ltd - India
- Electricity Generating Authority of Thailand
- Coalindo Energy - Indonesia
- Meralco Power Generation, Philippines
- Thiess Contractors Indonesia
- Straits Asia Resources Limited - Singapore
- Grasim Industreis Ltd - India
- GVK Power & Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Price Waterhouse Coopers - Russia
- Interocean Group of Companies - India
- Australian Coal Association
- Altura Mining Limited, Indonesia
- Eastern Coal Council - USA
- Timah Investasi Mineral - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- OPG Power Generation Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
- Bukit Makmur.PT - Indonesia
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- Ministry of Finance - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Attock Cement Pakistan Limited
- Aboitiz Power Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- White Energy Company Limited
- Binh Thuan Hamico - Vietnam
- Agrawal Coal Company - India
- Malabar Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Sojitz Corporation - Japan
- Madhucon Powers Ltd - India
- Wood Mackenzie - Singapore
- Sarangani Energy Corporation, Philippines
- The State Trading Corporation of India Ltd
- The Treasury - Australian Government
- Siam City Cement - Thailand
- Global Business Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Orica Australia Pty. Ltd.
- Independent Power Producers Association of India
- Kapuas Tunggal Persada - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coastal Gujarat Power Limited - India
- Rio Tinto Coal - Australia
- Kepco SPC Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Star Paper Mills Limited - India
- Jaiprakash Power Ventures ltd
- Goldman Sachs - Singapore
- Economic Council, Georgia
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- Parliament of New Zealand
- Gujarat Electricity Regulatory Commission - India
- Planning Commission, India
- Kideco Jaya Agung - Indonesia
- Aditya Birla Group - India
- Indonesian Coal Mining Association
- Essar Steel Hazira Ltd - India
- Uttam Galva Steels Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ICICI Bank Limited - India
- Makarim & Taira - Indonesia
- Pendopo Energi Batubara - Indonesia
- Riau Bara Harum - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Indogreen Group - Indonesia
- Thai Mozambique Logistica
- Indika Energy - Indonesia
- Mercator Lines Limited - India
- Georgia Ports Authority, United States
- Wilmar Investment Holdings
- Indian Energy Exchange, India
- Kumho Petrochemical, South Korea
- Globalindo Alam Lestari - Indonesia
- Parry Sugars Refinery, India
- PNOC Exploration Corporation - Philippines
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- TeaM Sual Corporation - Philippines
- Tamil Nadu electricity Board
- Central Electricity Authority - India
- Kalimantan Lumbung Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMG Consultants - Indonesia
- Heidelberg Cement - Germany
- Minerals Council of Australia
- Romanian Commodities Exchange
- IHS Mccloskey Coal Group - USA
- Chettinad Cement Corporation Ltd - India
- Petron Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Singapore Mercantile Exchange
- Videocon Industries ltd - India
- Africa Commodities Group - South Africa
- Kohat Cement Company Ltd. - Pakistan
- SN Aboitiz Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Ind-Barath Power Infra Limited - India
- GMR Energy Limited - India
- Sical Logistics Limited - India
- New Zealand Coal & Carbon
- Ambuja Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- San Jose City I Power Corp, Philippines
- Oldendorff Carriers - Singapore
- The University of Queensland
- Ceylon Electricity Board - Sri Lanka
- SMC Global Power, Philippines
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