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Monday, 28 November 11
CITING CONTRACTS, MINING FIRMS ARE NOT PAYING ROYALTIES UNDER LAW - THE JAKARTA POST
 The Jakarta Post reported that, when the 2009 Law on Minerals and Coal was endorsed, hopes that Indonesia could maximize its revenue from the mineral and coal mining sector swelled.
However, today, two years after the implementation of the law, which mandated that all existing mining contracts and coal contracts of work be adjusted to accord with the law, hopes have been fading.
Despite a commitment from President Susilo Bambang Yudhoyono to renegotiate unfair mining contracts, talks have gone nowhere, particularly with giant foreign companies, such as copper and gold producers PT Freeport Indonesia (FI) and PT Newmont Nusa Tenggara (NNT).
The Energy and Mineral Resources Ministry’s minerals and coal directorate has said that 65 percent of mining companies operating in the country have agreed to renegotiations.
The directorate said 42 mining companies currently had government kontrak karya contracts and 76 companies had coal contracts of work (PKP2B).
However, the directorate has not revealed which companies have agreed to renegotiate their contracts in accordance with the law.
“We want to work first. We’ll let you know the results later. I can’t promise anything,” ministry minerals and coal chief Thamrin Sihite told The Jakarta Post over the weekend.
Although most companies agreed to renegotiate in principal, disagreements emerged and talks became tougher when it came to the details, Thamrin said.
As part of the renegotiation process, the government and miners are discussing six main issues: the size of mining areas, contract extensions, the amount of royalties, obligations to build processing plants, divestment and the use of local goods and services.
The aim is clearly to ramp up the collection of revenue from the minerals and coal mining sector, which critics say remains below expectation.
Take PT Freeport Indonesia, for example, which operates the Grasberg gold and copper mine in Timika, Papua.
According to its contract, which was extended in 1991, the company must pay the government a 1 percent royalty on its gold sales, 1 percent on its silver sales and 3.5 percent on copper sales.
The royalty amounts are below the percentages stipulated in a 2003 government regulation on tariffs for non-tax revenues for the energy and mineral resources sector.
The regulation fixed gold royalties at 3.75 percent, silver royalties at 3.25 percent and copper royalties at 4 percent.
Last year, the government earned Rp 66.82 trillion (US$6.77 billion) from the minerals and coal mining sector, up almost 30 percent from Rp 51.58 trillion in 2009.
This year, the ministry aims to make Rp 56.86 trillion from the sector.
Critics have said that renegotiations have failed to make progress not due to the small number of companies that have agreed to renegotiate, but due to the failure of giant miners, which contribute the highest revenues and productions, to comply with the 2009 law.
Despite the government’s claims that 65 percent of mining and coal companies have agreed to renegotiate, data from the ReforMiner Institute showed that the compliance of those companies, which were mostly smaller firms, had no significant impact on state revenues.
The ReforMiner Institute said that the companies that agreed in whole or in part to contract renegotiations in compliance with the 2009 Minerals and Coal Law produced less than a third of all the gold, silver, copper, nickel, doré bullion, diamond, granite and tin produced in Indonesia between 2003 and 2010.
Further, the companies that “fully disagreed” to renegotiate as required by law produced the lion’s share of the nation’s commodity production, accounted for 82.43 percent of the country’s gold production, 85.10 percent of its silver production and 100 percent of it copper.
In contrast, all coal companies have come to the bargaining table. The companies that fully agreed to renegotiate were responsible for 25.44 percent of total production, while those that partially agreed accounted for 74.56 percent.
The data, taken from a closed meeting between the Minerals and Coal Directorate General and the House of Representatives’ Commission VII overseeing mining, did not reveal the names of the companies discussed.
It is unclear why the government has tolerated noncompliance with the law. Most of the companies that have disagreed to renegotiate have continued to benefit from their original contracts, including low royalty payments, Indonesian Resource Studies (Iress) group chairman Marwan Batubara told the Post.
“They hide behind the principle of ‘the sanctity of contract’. They don’t want the content of their contracts to be revised,” he argued.
The government had to be more firm in negotiating with companies, Marwan said.
“Renegotiation” was a misleading term as the government was required to ensure that the companies complied with Indonesian law, he added.
“The government has a strong legal basis, which is the 2009 Law on Minerals and Coal, to force the companies to sit together. If they refuse to comply with the law, they can get out of the country. I believe many companies will line up to exploit our natural resources,” he said.
Marwan said that Indonesia need not worry about its image as the stipulations of the 2009 law and the 2003 regulation were common practices in other nations.
“In other countries, royalties for minerals are mostly above 4 percent. Why should we worry? If they don’t want to invest, there are many other companies that have been waiting for the opportunity to replace them,” he said.
Source: The Jakarta Post (By - Rangga D. Fadillah)
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Wednesday, 02 November 11
MMTC TO BUY 3.73 MILLION TONS OF COAL FOR 2011- 2013
COALspot.com - India’s state-owned coal and mineral trader MMTC looking for 3.73 million tons of power plant coal for the period 2011 - 2012/ ...
Wednesday, 02 November 11
PANAMAX MARKET BECAME QUIETER AFTER THE RECENT RECOVERY - BRS
There were substantial losses across the board this week: the BDI lost 6.3% to end at 2,018 and the BCI 8.2% to end 3,274. In the smaller sizes the ...
Tuesday, 01 November 11
BORNEO LUMBUNG BUYS 23.8% INTEREST IN BUMI
COALspot.com - PT. Borneo Lumbung Energi (BORN), an Indonesian coking coal producer announces that it has signed a sale and purchase agreement, cond ...
Tuesday, 01 November 11
BAKRIE FORMS STRATEGIC PARTNERSHIP WITH BORNEO - REDUCING DEBT BY USD 1 BILLION
Press Release - Enhancing the standing of “Indonesia Inc.” at the London Stock Exchange PT Bakrie & Brothers Tbk (“BNBR” ...
Tuesday, 01 November 11
ATLAS RESOURCES SETS IPO AT RP1,500 - INSIDER STORIES
Insider Stories reported that, coal miner PT Atlas Resources Tbk has set its initial public offering (IPO) at Rp1,500 (approximately US$ 0.169) per ...
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- Coalindo Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Madhucon Powers Ltd - India
- Interocean Group of Companies - India
- White Energy Company Limited
- Parry Sugars Refinery, India
- Rio Tinto Coal - Australia
- Mercuria Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Tata Chemicals Ltd - India
- CIMB Investment Bank - Malaysia
- Heidelberg Cement - Germany
- Asmin Koalindo Tuhup - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- The University of Queensland
- Kobexindo Tractors - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Videocon Industries ltd - India
- Essar Steel Hazira Ltd - India
- Malabar Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- SMG Consultants - Indonesia
- Semirara Mining Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Thiess Contractors Indonesia
- Iligan Light & Power Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Jaiprakash Power Ventures ltd
- Carbofer General Trading SA - India
- Ceylon Electricity Board - Sri Lanka
- Merrill Lynch Commodities Europe
- CNBM International Corporation - China
- Electricity Authority, New Zealand
- ICICI Bank Limited - India
- Salva Resources Pvt Ltd - India
- Minerals Council of Australia
- Riau Bara Harum - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bayan Resources Tbk. - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bhatia International Limited - India
- Jindal Steel & Power Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Independent Power Producers Association of India
- Globalindo Alam Lestari - Indonesia
- SMC Global Power, Philippines
- Aboitiz Power Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Mintek Dendrill Indonesia
- Larsen & Toubro Limited - India
- Commonwealth Bank - Australia
- Mjunction Services Limited - India
- Barasentosa Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Renaissance Capital - South Africa
- Chamber of Mines of South Africa
- Kumho Petrochemical, South Korea
- GN Power Mariveles Coal Plant, Philippines
- Coastal Gujarat Power Limited - India
- London Commodity Brokers - England
- Trasteel International SA, Italy
- McConnell Dowell - Australia
- Bhoruka Overseas - Indonesia
- Aditya Birla Group - India
- Cement Manufacturers Association - India
- Rashtriya Ispat Nigam Limited - India
- Simpson Spence & Young - Indonesia
- Coal and Oil Company - UAE
- VISA Power Limited - India
- GVK Power & Infra Limited - India
- MS Steel International - UAE
- Star Paper Mills Limited - India
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining and Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Vizag Seaport Private Limited - India
- Romanian Commodities Exchange
- Banpu Public Company Limited - Thailand
- Standard Chartered Bank - UAE
- Parliament of New Zealand
- Australian Coal Association
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Manunggal Multi Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Edison Trading Spa - Italy
- Ambuja Cements Ltd - India
- Anglo American - United Kingdom
- Georgia Ports Authority, United States
- Antam Resourcindo - Indonesia
- Australian Commodity Traders Exchange
- Dalmia Cement Bharat India
- South Luzon Thermal Energy Corporation
- Xindia Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Indian Oil Corporation Limited
- Karbindo Abesyapradhi - Indoneisa
- Eastern Coal Council - USA
- Agrawal Coal Company - India
- Gujarat Sidhee Cement - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ind-Barath Power Infra Limited - India
- Indonesian Coal Mining Association
- Metalloyd Limited - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Toyota Tsusho Corporation, Japan
- Ministry of Finance - Indonesia
- Sojitz Corporation - Japan
- Central Electricity Authority - India
- Bahari Cakrawala Sebuku - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Goldman Sachs - Singapore
- Bukit Baiduri Energy - Indonesia
- Posco Energy - South Korea
- Meenaskhi Energy Private Limited - India
- Bulk Trading Sa - Switzerland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PowerSource Philippines DevCo
- Billiton Holdings Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- European Bulk Services B.V. - Netherlands
- Directorate Of Revenue Intelligence - India
- LBH Netherlands Bv - Netherlands
- Marubeni Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Global Green Power PLC Corporation, Philippines
- Bangladesh Power Developement Board
- Binh Thuan Hamico - Vietnam
- Petron Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Deloitte Consulting - India
- Sree Jayajothi Cements Limited - India
- Global Business Power Corporation, Philippines
- Singapore Mercantile Exchange
- Africa Commodities Group - South Africa
- Samtan Co., Ltd - South Korea
- GAC Shipping (India) Pvt Ltd
- Orica Australia Pty. Ltd.
- Price Waterhouse Coopers - Russia
- Mercator Lines Limited - India
- Vedanta Resources Plc - India
- Wood Mackenzie - Singapore
- Makarim & Taira - Indonesia
- Sakthi Sugars Limited - India
- Borneo Indobara - Indonesia
- Tamil Nadu electricity Board
- Savvy Resources Ltd - HongKong
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meralco Power Generation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- Kaltim Prima Coal - Indonesia
- Ministry of Transport, Egypt
- Karaikal Port Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- Oldendorff Carriers - Singapore
- Ministry of Mines - Canada
- AsiaOL BioFuels Corp., Philippines
- Uttam Galva Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- OPG Power Generation Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Pendopo Energi Batubara - Indonesia
- Medco Energi Mining Internasional
- Sical Logistics Limited - India
- Lanco Infratech Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Latin American Coal - Colombia
- Energy Development Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Altura Mining Limited, Indonesia
- Port Waratah Coal Services - Australia
- Indika Energy - Indonesia
- Wilmar Investment Holdings
- Energy Link Ltd, New Zealand
- Indo Tambangraya Megah - Indonesia
- Bharathi Cement Corporation - India
- The Treasury - Australian Government
- Chettinad Cement Corporation Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- PTC India Limited - India
- Grasim Industreis Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Bhushan Steel Limited - India
- Indogreen Group - Indonesia
- IEA Clean Coal Centre - UK
- Attock Cement Pakistan Limited
- Directorate General of MIneral and Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Planning Commission, India
- Therma Luzon, Inc, Philippines
- Siam City Cement - Thailand
- Electricity Generating Authority of Thailand
- Economic Council, Georgia
- Thai Mozambique Logistica
- Global Coal Blending Company Limited - Australia
- Baramulti Group, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indian Energy Exchange, India
- Intertek Mineral Services - Indonesia
- New Zealand Coal & Carbon
- Eastern Energy - Thailand
- GMR Energy Limited - India
- Central Java Power - Indonesia
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