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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, 26 October 11
INDIAN MARKET WAS REMAINED TIGHT THE WHOLE LAST WEEK - BRS
The market once more seems to be at a crossroads. The indices last week remained fairly stable (except for the Panamax sector), ending the week as f ...
Tuesday, 25 October 11
DRY BULK MARKET STEADY, ANALYSTS LOOKING FOR ADDED PRESSURE ON THE MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market was unchanged on Monday, with the industry’s benchmark, the BDI (Baltic Dry Index) ending the session at 2,153 points, exa ...
Monday, 24 October 11
NEW HEAD OF INDONESIA'S MINING MINISTRY GETS RAKED OVER THE COALS - JOSEPH KIRSCHKE
COALspot.com - Following Indonesia’s presidential cabinet shakeup last week, many are questioning the qualifications of Energy and Mineral Res ...
Monday, 24 October 11
CHINA QINHUANGDAO COAL PRICE RISES TO HIGHEST IN THREE YEARS - BUSINESSWEEK
Business week reported that, China’s power-station coal price rose to the highest level in three years as power stations and central heating p ...
Monday, 24 October 11
CAPESIZE RENTAL RATES RISE FOR THIRD DAY AS MORE SHIPS HIRED - HELLENIC SHIPPING
Rates to hire capesize vessels advanced for a third day on signs of increased demand to transport iron ore, used to make steel.Daily rates for the s ...
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- Planning Commission, India
- Meenaskhi Energy Private Limited - India
- Mintek Dendrill Indonesia
- International Coal Ventures Pvt Ltd - India
- Bhushan Steel Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Thai Mozambique Logistica
- Tamil Nadu electricity Board
- San Jose City I Power Corp, Philippines
- Bharathi Cement Corporation - India
- Minerals Council of Australia
- European Bulk Services B.V. - Netherlands
- Aboitiz Power Corporation - Philippines
- Mjunction Services Limited - India
- SMG Consultants - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Bukit Makmur.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coal and Oil Company - UAE
- Australian Coal Association
- Xindia Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- New Zealand Coal & Carbon
- Binh Thuan Hamico - Vietnam
- SMC Global Power, Philippines
- Chamber of Mines of South Africa
- Kaltim Prima Coal - Indonesia
- Economic Council, Georgia
- Romanian Commodities Exchange
- TeaM Sual Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Bukit Baiduri Energy - Indonesia
- Edison Trading Spa - Italy
- Deloitte Consulting - India
- Sinarmas Energy and Mining - Indonesia
- Oldendorff Carriers - Singapore
- Karaikal Port Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Jindal Steel & Power Ltd - India
- Metalloyd Limited - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PTC India Limited - India
- The University of Queensland
- Singapore Mercantile Exchange
- Parliament of New Zealand
- Ministry of Finance - Indonesia
- Eastern Energy - Thailand
- Bulk Trading Sa - Switzerland
- Port Waratah Coal Services - Australia
- Ambuja Cements Ltd - India
- Uttam Galva Steels Limited - India
- Mercuria Energy - Indonesia
- Larsen & Toubro Limited - India
- Kumho Petrochemical, South Korea
- Straits Asia Resources Limited - Singapore
- Sindya Power Generating Company Private Ltd
- AsiaOL BioFuels Corp., Philippines
- Merrill Lynch Commodities Europe
- Indogreen Group - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Dalmia Cement Bharat India
- Wood Mackenzie - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Transport, Egypt
- Globalindo Alam Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- Energy Development Corp, Philippines
- Coalindo Energy - Indonesia
- Vedanta Resources Plc - India
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Ceylon Electricity Board - Sri Lanka
- Grasim Industreis Ltd - India
- GMR Energy Limited - India
- Semirara Mining Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining and Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Madhucon Powers Ltd - India
- Electricity Authority, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Rio Tinto Coal - Australia
- Toyota Tsusho Corporation, Japan
- IEA Clean Coal Centre - UK
- Central Electricity Authority - India
- Standard Chartered Bank - UAE
- Posco Energy - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Mining Services - Indonesia
- Sakthi Sugars Limited - India
- Latin American Coal - Colombia
- Bhoruka Overseas - Indonesia
- GAC Shipping (India) Pvt Ltd
- VISA Power Limited - India
- Antam Resourcindo - Indonesia
- Gujarat Sidhee Cement - India
- Petrochimia International Co. Ltd.- Taiwan
- Vizag Seaport Private Limited - India
- Bangladesh Power Developement Board
- Commonwealth Bank - Australia
- Riau Bara Harum - Indonesia
- Sical Logistics Limited - India
- Global Business Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Energy Link Ltd, New Zealand
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- Orica Australia Pty. Ltd.
- Lanco Infratech Ltd - India
- Iligan Light & Power Inc, Philippines
- Indika Energy - Indonesia
- Attock Cement Pakistan Limited
- Marubeni Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Kepco SPC Power Corporation, Philippines
- The Treasury - Australian Government
- Medco Energi Mining Internasional
- GN Power Mariveles Coal Plant, Philippines
- IHS Mccloskey Coal Group - USA
- Aditya Birla Group - India
- Essar Steel Hazira Ltd - India
- Banpu Public Company Limited - Thailand
- Billiton Holdings Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Carbofer General Trading SA - India
- Cigading International Bulk Terminal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Indian Energy Exchange, India
- Georgia Ports Authority, United States
- Baramulti Group, Indonesia
- Malabar Cements Ltd - India
- White Energy Company Limited
- Trasteel International SA, Italy
- Eastern Coal Council - USA
- India Bulls Power Limited - India
- Intertek Mineral Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Electricity Generating Authority of Thailand
- Siam City Cement PLC, Thailand
- Holcim Trading Pte Ltd - Singapore
- Renaissance Capital - South Africa
- Ind-Barath Power Infra Limited - India
- The State Trading Corporation of India Ltd
- Ministry of Mines - Canada
- Sarangani Energy Corporation, Philippines
- Wilmar Investment Holdings
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- Indian Oil Corporation Limited
- Kideco Jaya Agung - Indonesia
- Therma Luzon, Inc, Philippines
- Coastal Gujarat Power Limited - India
- Meralco Power Generation, Philippines
- LBH Netherlands Bv - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Goldman Sachs - Singapore
- ASAPP Information Group - India
- McConnell Dowell - Australia
- Jaiprakash Power Ventures ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Anglo American - United Kingdom
- Sojitz Corporation - Japan
- Jorong Barutama Greston.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- SN Aboitiz Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Kobexindo Tractors - Indoneisa
- Tata Chemicals Ltd - India
- Thiess Contractors Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indonesian Coal Mining Association
- Central Java Power - Indonesia
- Siam City Cement - Thailand
- OPG Power Generation Pvt Ltd - India
- Borneo Indobara - Indonesia
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- Interocean Group of Companies - India
- ICICI Bank Limited - India
- PNOC Exploration Corporation - Philippines
- Power Finance Corporation Ltd., India
- Heidelberg Cement - Germany
- Kohat Cement Company Ltd. - Pakistan
- Bukit Asam (Persero) Tbk - Indonesia
- Videocon Industries ltd - India
- Independent Power Producers Association of India
- CNBM International Corporation - China
- Altura Mining Limited, Indonesia
- Simpson Spence & Young - Indonesia
- PowerSource Philippines DevCo
- GVK Power & Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Timah Investasi Mineral - Indoneisa
- Africa Commodities Group - South Africa
- Barasentosa Lestari - Indonesia
- Parry Sugars Refinery, India
- Indo Tambangraya Megah - Indonesia
- Savvy Resources Ltd - HongKong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Australian Commodity Traders Exchange
- Mercator Lines Limited - India
- Bayan Resources Tbk. - Indonesia
- Cement Manufacturers Association - India
- London Commodity Brokers - England
- Salva Resources Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Petron Corporation, Philippines
- Agrawal Coal Company - India
- Manunggal Multi Energi - Indonesia
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