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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, 09 September 10
DRY BULK MARKET IS LOOKING TO INCREASE GAINS ON OCTOBER IRON ORE CONTRACTS
The “success” story that the dry bulk market has been displaying during the past couple of weeks is being materialized as we head toward ...
Tuesday, 07 September 10
INDIA IMPORTS 1.63 MLN T OF COAL FOR THE PERIOD 30 AUGUST - 5 SEPTEMBER - SOURCES
COALspot.com: India has imported 1.07 million tons of power plant coal, 0.520 mln tons of coking coal and around 41,000 mt of Anthracite coal for th ...
Tuesday, 07 September 10
GOVERNMENT DECLARED INDONESIAN COAL PRICE REFERENCE DECLINE FOR THIRD-STRAIGHT MONTH
COALspot.com: Indonesian thermal coal price reference, a monthly benchmark price declared by Ministry of Energy and mineral resources of Repub ...
Tuesday, 07 September 10
MERCATOR TO BUY COAL MINE IN INDONESIA THIS FISCAL
Mercator Lines, India’s second-largest shipping company which has diversified into coal mining, will buy a coal mine in Indonesia with more th ...
Monday, 06 September 10
DRY BULK MARKET GAINS 6.05% ON WEEK, BOOSTED BY CAPESIZE VESSELS
The dry bulk market is looking to capitalize last week’s gains of more than 6 percent in this week, as the capesize segment seems to be on a h ...
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- PTC India Limited - India
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- Bangladesh Power Developement Board
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- Kumho Petrochemical, South Korea
- Indika Energy - Indonesia
- Chamber of Mines of South Africa
- Romanian Commodities Exchange
- GAC Shipping (India) Pvt Ltd
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- Power Finance Corporation Ltd., India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
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- Banpu Public Company Limited - Thailand
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- Semirara Mining and Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Sindya Power Generating Company Private Ltd
- IEA Clean Coal Centre - UK
- IHS Mccloskey Coal Group - USA
- Karaikal Port Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Orica Mining Services - Indonesia
- Posco Energy - South Korea
- Globalindo Alam Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- Toyota Tsusho Corporation, Japan
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- Siam City Cement PLC, Thailand
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Economic Council, Georgia
- Gujarat Sidhee Cement - India
- SMG Consultants - Indonesia
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- Mercator Lines Limited - India
- Heidelberg Cement - Germany
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- Ministry of Finance - Indonesia
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- Ceylon Electricity Board - Sri Lanka
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- Energy Development Corp, Philippines
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- Coal and Oil Company - UAE
- Vedanta Resources Plc - India
- Kartika Selabumi Mining - Indonesia
- Global Business Power Corporation, Philippines
- Australian Coal Association
- Straits Asia Resources Limited - Singapore
- Binh Thuan Hamico - Vietnam
- Kobexindo Tractors - Indoneisa
- Sakthi Sugars Limited - India
- Semirara Mining Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Timah Investasi Mineral - Indoneisa
- Trasteel International SA, Italy
- Indian Oil Corporation Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Altura Mining Limited, Indonesia
- Vizag Seaport Private Limited - India
- White Energy Company Limited
- Directorate General of MIneral and Coal - Indonesia
- Planning Commission, India
- Bukit Makmur.PT - Indonesia
- Videocon Industries ltd - India
- Iligan Light & Power Inc, Philippines
- Agrawal Coal Company - India
- Dalmia Cement Bharat India
- Essar Steel Hazira Ltd - India
- Marubeni Corporation - India
- Attock Cement Pakistan Limited
- Africa Commodities Group - South Africa
- Aboitiz Power Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Minerals Council of Australia
- Simpson Spence & Young - Indonesia
- Port Waratah Coal Services - Australia
- Mercuria Energy - Indonesia
- The University of Queensland
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- Antam Resourcindo - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- PNOC Exploration Corporation - Philippines
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- Wood Mackenzie - Singapore
- Therma Luzon, Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Latin American Coal - Colombia
- Central Java Power - Indonesia
- Carbofer General Trading SA - India
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- Sinarmas Energy and Mining - Indonesia
- Riau Bara Harum - Indonesia
- Kideco Jaya Agung - Indonesia
- Leighton Contractors Pty Ltd - Australia
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- Interocean Group of Companies - India
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- Meralco Power Generation, Philippines
- Savvy Resources Ltd - HongKong
- Parry Sugars Refinery, India
- Madhucon Powers Ltd - India
- Jaiprakash Power Ventures ltd
- McConnell Dowell - Australia
- Ind-Barath Power Infra Limited - India
- New Zealand Coal & Carbon
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- GMR Energy Limited - India
- LBH Netherlands Bv - Netherlands
- Singapore Mercantile Exchange
- The State Trading Corporation of India Ltd
- Merrill Lynch Commodities Europe
- TeaM Sual Corporation - Philippines
- Eastern Coal Council - USA
- Krishnapatnam Port Company Ltd. - India
- Mjunction Services Limited - India
- OPG Power Generation Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Jindal Steel & Power Ltd - India
- Standard Chartered Bank - UAE
- Star Paper Mills Limited - India
- Sarangani Energy Corporation, Philippines
- Rio Tinto Coal - Australia
- Siam City Cement - Thailand
- Sical Logistics Limited - India
- Renaissance Capital - South Africa
- Ministry of Transport, Egypt
- Alfred C Toepfer International GmbH - Germany
- Bhushan Steel Limited - India
- Asmin Koalindo Tuhup - Indonesia
- San Jose City I Power Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Rashtriya Ispat Nigam Limited - India
- Eastern Energy - Thailand
- Indonesian Coal Mining Association
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- Mintek Dendrill Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Baramulti Group, Indonesia
- GVK Power & Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Independent Power Producers Association of India
- Edison Trading Spa - Italy
- Bulk Trading Sa - Switzerland
- Xindia Steels Limited - India
- Energy Link Ltd, New Zealand
- Parliament of New Zealand
- Cement Manufacturers Association - India
- Bukit Baiduri Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- India Bulls Power Limited - India
- SMC Global Power, Philippines
- Indian Energy Exchange, India
- Maheswari Brothers Coal Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- The Treasury - Australian Government
- Electricity Generating Authority of Thailand
- ASAPP Information Group - India
- Larsen & Toubro Limited - India
- AsiaOL BioFuels Corp., Philippines
- Price Waterhouse Coopers - Russia
- Sojitz Corporation - Japan
- Ambuja Cements Ltd - India
- Electricity Authority, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Lanco Infratech Ltd - India
- London Commodity Brokers - England
- Commonwealth Bank - Australia
- Coastal Gujarat Power Limited - India
- Medco Energi Mining Internasional
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- European Bulk Services B.V. - Netherlands
- Georgia Ports Authority, United States
- Grasim Industreis Ltd - India
- Samtan Co., Ltd - South Korea
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