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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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Tuesday, 01 November 11
DRY BULK MARKETS CORRECTION SPILLS OVER ONTO NEW WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market is losing steam, as evidenced by the falls experienced last week, which were also apparent at the beginning of the new week. A l ...
Monday, 31 October 11
CHINAS HUNGER FOR INDONESIAN COAL AT THREE YEAR-HIGH AS WINTER NEARS - JOSEPH KIRSCHKE
COALspot.com - Chinese demand for power-station coal from Indonesia has soared to its highest level in three years, as central heating plants and po ...
Saturday, 29 October 11
ATLAS RESOURCES SEALS US$95 MIO LOAN - INSIDER STORIES
Insider Stories reported that, coal producer PT Atlas Resources Tbk, that is controlled by Indonesian businessman Andre Abdi, has secured US$95 mill ...
Saturday, 29 October 11
INDONESIA TO INDIA FREIGHT LIKELY TO REMAIN SOFT
COALspot.com - The market continued to slow down and all segment were down this week.
The biggest drop was in the Cape Index down by 8.19 pct&nbs ...
Friday, 28 October 11
RISING COAL PRICES TO WORSEN CHINA'S WINTER POWER CRUNCH - CRI ENGLISH
CRI English reported that, the rising price of coal is fueling concerns about a power crunch set to plague China this winter, analysts said.
The ...
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- Cement Manufacturers Association - India
- Makarim & Taira - Indonesia
- Edison Trading Spa - Italy
- Jorong Barutama Greston.PT - Indonesia
- CNBM International Corporation - China
- Aboitiz Power Corporation - Philippines
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Indian Oil Corporation Limited
- Baramulti Group, Indonesia
- Standard Chartered Bank - UAE
- Minerals Council of Australia
- IEA Clean Coal Centre - UK
- Port Waratah Coal Services - Australia
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- Thai Mozambique Logistica
- Vizag Seaport Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- The University of Queensland
- Medco Energi Mining Internasional
- GVK Power & Infra Limited - India
- Bangladesh Power Developement Board
- Maheswari Brothers Coal Limited - India
- Toyota Tsusho Corporation, Japan
- Sindya Power Generating Company Private Ltd
- San Jose City I Power Corp, Philippines
- Wood Mackenzie - Singapore
- White Energy Company Limited
- Therma Luzon, Inc, Philippines
- Barasentosa Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- VISA Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Larsen & Toubro Limited - India
- Bulk Trading Sa - Switzerland
- Ambuja Cements Ltd - India
- Antam Resourcindo - Indonesia
- Borneo Indobara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- GN Power Mariveles Coal Plant, Philippines
- Kumho Petrochemical, South Korea
- India Bulls Power Limited - India
- Intertek Mineral Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Singapore Mercantile Exchange
- Tata Chemicals Ltd - India
- Lanco Infratech Ltd - India
- ICICI Bank Limited - India
- Planning Commission, India
- The Treasury - Australian Government
- Petrochimia International Co. Ltd.- Taiwan
- CIMB Investment Bank - Malaysia
- LBH Netherlands Bv - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coal and Oil Company - UAE
- Power Finance Corporation Ltd., India
- Global Coal Blending Company Limited - Australia
- GMR Energy Limited - India
- Riau Bara Harum - Indonesia
- Videocon Industries ltd - India
- Commonwealth Bank - Australia
- Global Business Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Romanian Commodities Exchange
- Samtan Co., Ltd - South Korea
- Merrill Lynch Commodities Europe
- Jindal Steel & Power Ltd - India
- Bukit Baiduri Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Coalindo Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Mintek Dendrill Indonesia
- Formosa Plastics Group - Taiwan
- Kepco SPC Power Corporation, Philippines
- Heidelberg Cement - Germany
- Asmin Koalindo Tuhup - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coastal Gujarat Power Limited - India
- Metalloyd Limited - United Kingdom
- Vedanta Resources Plc - India
- Indian Energy Exchange, India
- Simpson Spence & Young - Indonesia
- Binh Thuan Hamico - Vietnam
- Billiton Holdings Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Grasim Industreis Ltd - India
- Mjunction Services Limited - India
- Rio Tinto Coal - Australia
- Central Java Power - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Electricity Authority, New Zealand
- IHS Mccloskey Coal Group - USA
- MS Steel International - UAE
- PowerSource Philippines DevCo
- Gujarat Mineral Development Corp Ltd - India
- Aditya Birla Group - India
- Bhushan Steel Limited - India
- Sakthi Sugars Limited - India
- Indika Energy - Indonesia
- Energy Link Ltd, New Zealand
- European Bulk Services B.V. - Netherlands
- Australian Commodity Traders Exchange
- SMC Global Power, Philippines
- Parry Sugars Refinery, India
- GAC Shipping (India) Pvt Ltd
- Alfred C Toepfer International GmbH - Germany
- ASAPP Information Group - India
- Semirara Mining and Power Corporation, Philippines
- Indonesian Coal Mining Association
- Ministry of Transport, Egypt
- Sree Jayajothi Cements Limited - India
- Kalimantan Lumbung Energi - Indonesia
- McConnell Dowell - Australia
- Uttam Galva Steels Limited - India
- Thiess Contractors Indonesia
- Iligan Light & Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Africa Commodities Group - South Africa
- Agrawal Coal Company - India
- Price Waterhouse Coopers - Russia
- SN Aboitiz Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Star Paper Mills Limited - India
- Mercator Lines Limited - India
- OPG Power Generation Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Malabar Cements Ltd - India
- Deloitte Consulting - India
- Renaissance Capital - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Madhucon Powers Ltd - India
- Rashtriya Ispat Nigam Limited - India
- London Commodity Brokers - England
- Globalindo Alam Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Indogreen Group - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining Corp, Philippines
- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Latin American Coal - Colombia
- Directorate General of MIneral and Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Ministry of Mines - Canada
- Kapuas Tunggal Persada - Indonesia
- The State Trading Corporation of India Ltd
- Parliament of New Zealand
- Siam City Cement PLC, Thailand
- Sical Logistics Limited - India
- Posco Energy - South Korea
- Kideco Jaya Agung - Indonesia
- Georgia Ports Authority, United States
- PTC India Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Bharathi Cement Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Finance - Indonesia
- Oldendorff Carriers - Singapore
- Central Electricity Authority - India
- Bhoruka Overseas - Indonesia
- Pendopo Energi Batubara - Indonesia
- Kobexindo Tractors - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tamil Nadu electricity Board
- Bukit Makmur.PT - Indonesia
- Independent Power Producers Association of India
- Bhatia International Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- SMG Consultants - Indonesia
- Eastern Energy - Thailand
- Mercuria Energy - Indonesia
- Energy Development Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- Trasteel International SA, Italy
- Gujarat Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- Orica Australia Pty. Ltd.
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Goldman Sachs - Singapore
- Chamber of Mines of South Africa
- Straits Asia Resources Limited - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Interocean Group of Companies - India
- Ind-Barath Power Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Dalmia Cement Bharat India
- New Zealand Coal & Carbon
- Sojitz Corporation - Japan
- Australian Coal Association
- PNOC Exploration Corporation - Philippines
- Carbofer General Trading SA - India
- Orica Mining Services - Indonesia
- Attock Cement Pakistan Limited
- Gujarat Sidhee Cement - India
- Marubeni Corporation - India
- Wilmar Investment Holdings
- Karaikal Port Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Petron Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- International Coal Ventures Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meenaskhi Energy Private Limited - India
- Electricity Generating Authority of Thailand
- Economic Council, Georgia
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