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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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Thursday, 25 November 10
INDONESIAN ROUNDS ARE ACHIEVING IN THE LOW 10S, OWNERS ARE NOT KEEN FOR TRIPS TO INDIA - FEARNBULK
HANDY
Uneventful week - Supra/Panamax stems ex USG to China/Korea/Japan are the main focus + grains ex. Argentina. The Atlantic market activity re ...
Thursday, 25 November 10
JSW ENERGY BUYS CANADIAN COAL FIRM FOR $411 MN - NDTV PROFIT
NDTV Profit reported that, Sajjan Jindal-owned JSW Energy on Wednesday said it has entered into an agreement to buy out British Virgin Islands-based ...
Thursday, 25 November 10
DRY BULK MARKET STILL GOING STRONG THIS WEEK, CAPESIZE SECTOR LOSING STEAM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept its upward momentum yesterday, with the industry’s benchmark, the Baltic Dry Index (BDI) gaining a further 0.64% to e ...
Wednesday, 24 November 10
COAL PRODUCTION PREDICTED TO CLIMB IN SUNNIER 2011 - THE JAKARTA GLOBE
The Jakarta Globe reported that, Indonesia’s coal producers are expected to increase output by 13 percent in 2011, thanks to predicted better ...
Monday, 22 November 10
RUSSIA'S KTK HAS PRODUCED 4.59 MLN TONNES OF COAL IN FIRST 9 MONTHS OR AN INCREASE OF 5% YEAR-ON-YEAR
COALspot.com (Press Release) - KTK has produced 4.59 mln tonnes of coal in first nine months or an increase of 5% year-on-year.
Kuzbasskaya Topli ...
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- Renaissance Capital - South Africa
- Central Electricity Authority - India
- IHS Mccloskey Coal Group - USA
- Lanco Infratech Ltd - India
- Merrill Lynch Commodities Europe
- Eastern Energy - Thailand
- Thai Mozambique Logistica
- Bangladesh Power Developement Board
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- Neyveli Lignite Corporation Ltd, - India
- Bayan Resources Tbk. - Indonesia
- Vedanta Resources Plc - India
- Larsen & Toubro Limited - India
- Wood Mackenzie - Singapore
- Simpson Spence & Young - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Formosa Plastics Group - Taiwan
- Tata Chemicals Ltd - India
- Metalloyd Limited - United Kingdom
- Globalindo Alam Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Thiess Contractors Indonesia
- Orica Australia Pty. Ltd.
- Grasim Industreis Ltd - India
- Bukit Makmur.PT - Indonesia
- The University of Queensland
- Independent Power Producers Association of India
- Kepco SPC Power Corporation, Philippines
- Coal and Oil Company - UAE
- Maharashtra Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Mintek Dendrill Indonesia
- Posco Energy - South Korea
- Borneo Indobara - Indonesia
- Kobexindo Tractors - Indoneisa
- Parry Sugars Refinery, India
- Riau Bara Harum - Indonesia
- Mercator Lines Limited - India
- European Bulk Services B.V. - Netherlands
- MS Steel International - UAE
- Sarangani Energy Corporation, Philippines
- Cement Manufacturers Association - India
- Power Finance Corporation Ltd., India
- ICICI Bank Limited - India
- LBH Netherlands Bv - Netherlands
- Sree Jayajothi Cements Limited - India
- Uttam Galva Steels Limited - India
- Agrawal Coal Company - India
- Planning Commission, India
- Africa Commodities Group - South Africa
- Pendopo Energi Batubara - Indonesia
- Savvy Resources Ltd - HongKong
- SN Aboitiz Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Dalmia Cement Bharat India
- Billiton Holdings Pty Ltd - Australia
- New Zealand Coal & Carbon
- Indogreen Group - Indonesia
- Toyota Tsusho Corporation, Japan
- Kaltim Prima Coal - Indonesia
- McConnell Dowell - Australia
- Indika Energy - Indonesia
- Meralco Power Generation, Philippines
- Singapore Mercantile Exchange
- Antam Resourcindo - Indonesia
- Essar Steel Hazira Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- GVK Power & Infra Limited - India
- Central Java Power - Indonesia
- Anglo American - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- Sindya Power Generating Company Private Ltd
- Oldendorff Carriers - Singapore
- Banpu Public Company Limited - Thailand
- ASAPP Information Group - India
- PetroVietnam Power Coal Import and Supply Company
- Deloitte Consulting - India
- Xindia Steels Limited - India
- CNBM International Corporation - China
- IEA Clean Coal Centre - UK
- Miang Besar Coal Terminal - Indonesia
- Sical Logistics Limited - India
- Malabar Cements Ltd - India
- Ambuja Cements Ltd - India
- India Bulls Power Limited - India
- Sojitz Corporation - Japan
- Indian Oil Corporation Limited
- Australian Commodity Traders Exchange
- Karaikal Port Pvt Ltd - India
- Edison Trading Spa - Italy
- London Commodity Brokers - England
- Vizag Seaport Private Limited - India
- Star Paper Mills Limited - India
- Bhatia International Limited - India
- Siam City Cement PLC, Thailand
- Electricity Authority, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Krishnapatnam Port Company Ltd. - India
- Jorong Barutama Greston.PT - Indonesia
- Port Waratah Coal Services - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Electricity Regulatory Commission - India
- Global Green Power PLC Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhushan Steel Limited - India
- Bharathi Cement Corporation - India
- Ministry of Finance - Indonesia
- Marubeni Corporation - India
- Coastal Gujarat Power Limited - India
- Ind-Barath Power Infra Limited - India
- South Luzon Thermal Energy Corporation
- Carbofer General Trading SA - India
- Baramulti Group, Indonesia
- Intertek Mineral Services - Indonesia
- Orica Mining Services - Indonesia
- San Jose City I Power Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Salva Resources Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Indonesian Coal Mining Association
- Sakthi Sugars Limited - India
- Samtan Co., Ltd - South Korea
- Goldman Sachs - Singapore
- Ministry of Transport, Egypt
- Bukit Baiduri Energy - Indonesia
- Chamber of Mines of South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cigading International Bulk Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Videocon Industries ltd - India
- Maheswari Brothers Coal Limited - India
- Alfred C Toepfer International GmbH - Germany
- TeaM Sual Corporation - Philippines
- Ministry of Mines - Canada
- The Treasury - Australian Government
- Price Waterhouse Coopers - Russia
- Kartika Selabumi Mining - Indonesia
- GMR Energy Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Barasentosa Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Makarim & Taira - Indonesia
- Gujarat Sidhee Cement - India
- GAC Shipping (India) Pvt Ltd
- Timah Investasi Mineral - Indoneisa
- Jaiprakash Power Ventures ltd
- White Energy Company Limited
- Iligan Light & Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Minerals Council of Australia
- Trasteel International SA, Italy
- AsiaOL BioFuels Corp., Philippines
- PTC India Limited - India
- International Coal Ventures Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Standard Chartered Bank - UAE
- Heidelberg Cement - Germany
- Energy Development Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Bhoruka Overseas - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Electricity Generating Authority of Thailand
- Sinarmas Energy and Mining - Indonesia
- Altura Mining Limited, Indonesia
- Rio Tinto Coal - Australia
- Madhucon Powers Ltd - India
- Attock Cement Pakistan Limited
- Leighton Contractors Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- Indian Energy Exchange, India
- Commonwealth Bank - Australia
- Tamil Nadu electricity Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Petron Corporation, Philippines
- PowerSource Philippines DevCo
- VISA Power Limited - India
- Romanian Commodities Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Mjunction Services Limited - India
- CIMB Investment Bank - Malaysia
- Latin American Coal - Colombia
- Interocean Group of Companies - India
- Kohat Cement Company Ltd. - Pakistan
- Georgia Ports Authority, United States
- Eastern Coal Council - USA
- PNOC Exploration Corporation - Philippines
- Wilmar Investment Holdings
- Mercuria Energy - Indonesia
- Parliament of New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Economic Council, Georgia
- Aboitiz Power Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Australian Coal Association
- Global Coal Blending Company Limited - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining Corp, Philippines
- Siam City Cement - Thailand
- Aditya Birla Group - India
- Medco Energi Mining Internasional
- Energy Link Ltd, New Zealand
- SMC Global Power, Philippines
- Straits Asia Resources Limited - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Directorate Of Revenue Intelligence - India
- Jindal Steel & Power Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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