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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$600 million, and surely it's different for each commodities, dependent on the adopted technology.
Later, industry must have a business plan, prepare from now, whether they build individually or cooperate through consortium. Obviously, we must have readiness first, through studies and others.
“The issue is not easy and complex because it's necessary to prepare in an integrated manner as from the upstream to the downstream,” he went on.
Unless the condition is improved, this nation won't be able to enjoy the added value of mining products fully in 2014, five years following the enactment of the mining law.
Source: Majalah Tambang (Alamsyah Pua Saba)
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Tuesday, 21 December 10
CHINA COAL CAP TO BOOST GLOBAL M&A - FINANCIER WORLD WIDE
Financier World Wide reported that, Chinese state-run media has reported that the Central Government intends to cap domestic coal production for fea ...
Tuesday, 21 December 10
CIL TOLD TO SCOUT MINES ABROAD TO BRIDGE COAL DEFICIT - ECONOMIC TIMES
Economic Times reported that, The government asked state-owned CIL to look for acquiring assets abroad to meet the domestic shortfall of coal.
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Tuesday, 21 December 10
SHIPPING INDUSTRY RECOVERING, BUT STILL HAMPERED BY OVERSUPPLY OF VESSELS AND DEPRESSED FREIGHT RATES - UNCTAD / HELLENIC SHIPPING
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Sunday, 19 December 10
SPOT SUPRAMAX VESSELS WERE FIXED AROUND US$ 13,000 PER DAY FOR TRIP VIA INDONESIA TO INDIA - VISTAAR
COALspot.com - The freight market continued to be soft with the BDI down by 96 points and closed at 1,999 points, touching below 2,000 points on Fri ...
Friday, 17 December 10
THE PANAMAX MARKET HAS EXPERIENCED A SOFTER TENDENCY THIS WEEK - FEARNBULK
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Monotonous Atlantic markets with little fresh enquiry in Black Sea/Med/Continent. Large Supras are achieving usd 21/22k for TA rounds - 2/3 ...
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- Minerals Council of Australia
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- Sical Logistics Limited - India
- Savvy Resources Ltd - HongKong
- Jindal Steel & Power Ltd - India
- Wood Mackenzie - Singapore
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- Samtan Co., Ltd - South Korea
- Meenaskhi Energy Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Salva Resources Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Sojitz Corporation - Japan
- The State Trading Corporation of India Ltd
- Madhucon Powers Ltd - India
- Merrill Lynch Commodities Europe
- Vijayanagar Sugar Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Indika Energy - Indonesia
- South Luzon Thermal Energy Corporation
- The University of Queensland
- MS Steel International - UAE
- Riau Bara Harum - Indonesia
- Australian Coal Association
- Carbofer General Trading SA - India
- Deloitte Consulting - India
- Attock Cement Pakistan Limited
- Vizag Seaport Private Limited - India
- Indian Energy Exchange, India
- Ind-Barath Power Infra Limited - India
- Petron Corporation, Philippines
- Africa Commodities Group - South Africa
- Kohat Cement Company Ltd. - Pakistan
- GMR Energy Limited - India
- Bulk Trading Sa - Switzerland
- Oldendorff Carriers - Singapore
- Independent Power Producers Association of India
- Gujarat Sidhee Cement - India
- Pendopo Energi Batubara - Indonesia
- Tamil Nadu electricity Board
- Indian Oil Corporation Limited
- Trasteel International SA, Italy
- Sinarmas Energy and Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- London Commodity Brokers - England
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining Corp, Philippines
- Eastern Energy - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Wilmar Investment Holdings
- Borneo Indobara - Indonesia
- Electricity Authority, New Zealand
- Lanco Infratech Ltd - India
- Coastal Gujarat Power Limited - India
- Kartika Selabumi Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- Interocean Group of Companies - India
- Anglo American - United Kingdom
- Parliament of New Zealand
- Mjunction Services Limited - India
- Malabar Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Ministry of Mines - Canada
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ambuja Cements Ltd - India
- Grasim Industreis Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- ICICI Bank Limited - India
- Semirara Mining and Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Straits Asia Resources Limited - Singapore
- Tata Chemicals Ltd - India
- Power Finance Corporation Ltd., India
- Essar Steel Hazira Ltd - India
- Australian Commodity Traders Exchange
- Ministry of Finance - Indonesia
- SMG Consultants - Indonesia
- Coalindo Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- OPG Power Generation Pvt Ltd - India
- Central Java Power - Indonesia
- Sakthi Sugars Limited - India
- Leighton Contractors Pty Ltd - Australia
- Standard Chartered Bank - UAE
- Posco Energy - South Korea
- Jaiprakash Power Ventures ltd
- Orica Australia Pty. Ltd.
- Therma Luzon, Inc, Philippines
- Bharathi Cement Corporation - India
- Siam City Cement - Thailand
- Makarim & Taira - Indonesia
- Goldman Sachs - Singapore
- Electricity Generating Authority of Thailand
- Xindia Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Chettinad Cement Corporation Ltd - India
- Port Waratah Coal Services - Australia
- Kumho Petrochemical, South Korea
- Maharashtra Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Ministry of Transport, Egypt
- Price Waterhouse Coopers - Russia
- Mintek Dendrill Indonesia
- Vedanta Resources Plc - India
- Planning Commission, India
- Kideco Jaya Agung - Indonesia
- Baramulti Group, Indonesia
- Altura Mining Limited, Indonesia
- VISA Power Limited - India
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- Metalloyd Limited - United Kingdom
- Mercator Lines Limited - India
- Latin American Coal - Colombia
- Energy Link Ltd, New Zealand
- Gujarat Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Banpu Public Company Limited - Thailand
- Bukit Baiduri Energy - Indonesia
- Bhatia International Limited - India
- Kobexindo Tractors - Indoneisa
- Maheswari Brothers Coal Limited - India
- IEA Clean Coal Centre - UK
- Timah Investasi Mineral - Indoneisa
- Coal and Oil Company - UAE
- IHS Mccloskey Coal Group - USA
- Formosa Plastics Group - Taiwan
- Cigading International Bulk Terminal - Indonesia
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- Rio Tinto Coal - Australia
- Global Coal Blending Company Limited - Australia
- Aditya Birla Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement PLC, Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Indonesian Coal Mining Association
- Parry Sugars Refinery, India
- Economic Council, Georgia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Energy Development Corp, Philippines
- Intertek Mineral Services - Indonesia
- Star Paper Mills Limited - India
- Singapore Mercantile Exchange
- Indogreen Group - Indonesia
- Chamber of Mines of South Africa
- Bhoruka Overseas - Indonesia
- Binh Thuan Hamico - Vietnam
- Orica Mining Services - Indonesia
- CNBM International Corporation - China
- Larsen & Toubro Limited - India
- Sindya Power Generating Company Private Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Coal Council - USA
- International Coal Ventures Pvt Ltd - India
- Agrawal Coal Company - India
- Manunggal Multi Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- The Treasury - Australian Government
- GVK Power & Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bayan Resources Tbk. - Indonesia
- CIMB Investment Bank - Malaysia
- Thiess Contractors Indonesia
- Cement Manufacturers Association - India
- New Zealand Coal & Carbon
- Videocon Industries ltd - India
- San Jose City I Power Corp, Philippines
- Thai Mozambique Logistica
- Bhushan Steel Limited - India
- AsiaOL BioFuels Corp., Philippines
- PetroVietnam Power Coal Import and Supply Company
- Antam Resourcindo - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Heidelberg Cement - Germany
- Uttam Galva Steels Limited - India
- Aboitiz Power Corporation - Philippines
- India Bulls Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Romanian Commodities Exchange
- Simpson Spence & Young - Indonesia
- White Energy Company Limited
- SN Aboitiz Power Inc, Philippines
- Edison Trading Spa - Italy
- Barasentosa Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Georgia Ports Authority, United States
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Medco Energi Mining Internasional
- GN Power Mariveles Coal Plant, Philippines
- LBH Netherlands Bv - Netherlands
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- Mercuria Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Business Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- PowerSource Philippines DevCo
- Sarangani Energy Corporation, Philippines
- Renaissance Capital - South Africa
- Central Electricity Authority - India
- Marubeni Corporation - India
- PTC India Limited - India
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