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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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Sunday, 23 October 11
CHINA LOOKING TO RESELL INDONESIAN COAL CARGOES - BARCLAYS
Commodity Online reported that, Anecdotal evidence has suggested that China is even looking to resell Indonesian cargoes back into the seaborne coal ...
Saturday, 22 October 11
THE SHORT-PERIOD RATES FOR PANAMAX REMAINED FIRM - CAPT. REDDY
COALspot.com - "The market seemed to slow down a bit this week, and all sectors were down by about One to five percent", said Capt. Reddy, ...
Saturday, 22 October 11
WILL THE PROPOSED 26 PERCENT PROFIT SHARING CLAUSE IN THE MINING BILL SPEED UP THE PRODUCTION OR SCARE AWAY INVESTORS? - DIPESH DIPU
A draft law has been approved by a ministerial panel headed by Finance Minister Pranab Mukherjee of India which, if passed by the Cabinet, will make ...
Saturday, 22 October 11
INDONESIA'S GOLDEN ENERGY SLASHES ITS IPO PRICE - THE JAKARTA GLOBE
The Jakarta Globe reported that, Golden Energy Mines, a coal mining company affiliated with Sinar Mas Group, lowered its target in an initial public ...
Thursday, 20 October 11
CAPESIZE - TUBARAO /QINGDAO BEING FIXED AT STRONG US$ 29.75 PMT
Handy
The Atlantic market is quite steady, and market seems to be around the same levels as last week. Fewer fixtures reported though. ...
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- South Luzon Thermal Energy Corporation
- Gujarat Mineral Development Corp Ltd - India
- Simpson Spence & Young - Indonesia
- Coalindo Energy - Indonesia
- Mjunction Services Limited - India
- Agrawal Coal Company - India
- Thiess Contractors Indonesia
- SN Aboitiz Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Electricity Authority, New Zealand
- Star Paper Mills Limited - India
- Interocean Group of Companies - India
- Salva Resources Pvt Ltd - India
- Meralco Power Generation, Philippines
- Bhushan Steel Limited - India
- Siam City Cement - Thailand
- Eastern Energy - Thailand
- Merrill Lynch Commodities Europe
- Barasentosa Lestari - Indonesia
- Indian Energy Exchange, India
- Bhoruka Overseas - Indonesia
- Standard Chartered Bank - UAE
- Bayan Resources Tbk. - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Dalmia Cement Bharat India
- Sindya Power Generating Company Private Ltd
- Coal and Oil Company - UAE
- Minerals Council of Australia
- Indogreen Group - Indonesia
- Sakthi Sugars Limited - India
- Georgia Ports Authority, United States
- Marubeni Corporation - India
- Indian Oil Corporation Limited
- Manunggal Multi Energi - Indonesia
- Heidelberg Cement - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- Borneo Indobara - Indonesia
- Goldman Sachs - Singapore
- ICICI Bank Limited - India
- Miang Besar Coal Terminal - Indonesia
- CNBM International Corporation - China
- Karbindo Abesyapradhi - Indoneisa
- SMC Global Power, Philippines
- Ministry of Finance - Indonesia
- Madhucon Powers Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Bulk Trading Sa - Switzerland
- Eastern Coal Council - USA
- Central Java Power - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Toyota Tsusho Corporation, Japan
- Tata Chemicals Ltd - India
- Medco Energi Mining Internasional
- Tamil Nadu electricity Board
- Kartika Selabumi Mining - Indonesia
- Makarim & Taira - Indonesia
- Orica Australia Pty. Ltd.
- Cement Manufacturers Association - India
- San Jose City I Power Corp, Philippines
- Planning Commission, India
- Meenaskhi Energy Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Indika Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Jaiprakash Power Ventures ltd
- Bukit Makmur.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Altura Mining Limited, Indonesia
- Attock Cement Pakistan Limited
- Samtan Co., Ltd - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- PowerSource Philippines DevCo
- Bharathi Cement Corporation - India
- Gujarat Sidhee Cement - India
- Binh Thuan Hamico - Vietnam
- Directorate Of Revenue Intelligence - India
- Ind-Barath Power Infra Limited - India
- Energy Link Ltd, New Zealand
- Vizag Seaport Private Limited - India
- Videocon Industries ltd - India
- Cigading International Bulk Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Indo Tambangraya Megah - Indonesia
- OPG Power Generation Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Iligan Light & Power Inc, Philippines
- Sical Logistics Limited - India
- Chamber of Mines of South Africa
- Vedanta Resources Plc - India
- Bukit Baiduri Energy - Indonesia
- GMR Energy Limited - India
- Malabar Cements Ltd - India
- Banpu Public Company Limited - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Petron Corporation, Philippines
- Bangladesh Power Developement Board
- Deloitte Consulting - India
- ASAPP Information Group - India
- Billiton Holdings Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Kepco SPC Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- New Zealand Coal & Carbon
- Central Electricity Authority - India
- Kumho Petrochemical, South Korea
- Price Waterhouse Coopers - Russia
- Xindia Steels Limited - India
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- Parliament of New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Sarangani Energy Corporation, Philippines
- Commonwealth Bank - Australia
- Coastal Gujarat Power Limited - India
- The University of Queensland
- PNOC Exploration Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- McConnell Dowell - Australia
- SMG Consultants - Indonesia
- Oldendorff Carriers - Singapore
- Indonesian Coal Mining Association
- Asmin Koalindo Tuhup - Indonesia
- Uttam Galva Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Orica Mining Services - Indonesia
- Posco Energy - South Korea
- Karaikal Port Pvt Ltd - India
- Singapore Mercantile Exchange
- Ambuja Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- Aditya Birla Group - India
- Port Waratah Coal Services - Australia
- Australian Coal Association
- Kapuas Tunggal Persada - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Independent Power Producers Association of India
- Anglo American - United Kingdom
- TeaM Sual Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Semirara Mining Corp, Philippines
- Global Business Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Ministry of Transport, Egypt
- GVK Power & Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- PTC India Limited - India
- Riau Bara Harum - Indonesia
- VISA Power Limited - India
- Mintek Dendrill Indonesia
- Edison Trading Spa - Italy
- Rashtriya Ispat Nigam Limited - India
- Larsen & Toubro Limited - India
- India Bulls Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Ministry of Mines - Canada
- Baramulti Group, Indonesia
- Essar Steel Hazira Ltd - India
- Mercuria Energy - Indonesia
- Electricity Generating Authority of Thailand
- IHS Mccloskey Coal Group - USA
- Alfred C Toepfer International GmbH - Germany
- Kohat Cement Company Ltd. - Pakistan
- Neyveli Lignite Corporation Ltd, - India
- Antam Resourcindo - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Rio Tinto Coal - Australia
- Africa Commodities Group - South Africa
- Intertek Mineral Services - Indonesia
- The State Trading Corporation of India Ltd
- Global Coal Blending Company Limited - Australia
- Economic Council, Georgia
- Siam City Cement PLC, Thailand
- Bhatia International Limited - India
- The Treasury - Australian Government
- Wood Mackenzie - Singapore
- Trasteel International SA, Italy
- Kideco Jaya Agung - Indonesia
- Parry Sugars Refinery, India
- Chettinad Cement Corporation Ltd - India
- Romanian Commodities Exchange
- Power Finance Corporation Ltd., India
- Ceylon Electricity Board - Sri Lanka
- Savvy Resources Ltd - HongKong
- GAC Shipping (India) Pvt Ltd
- Wilmar Investment Holdings
- Australian Commodity Traders Exchange
- MS Steel International - UAE
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Mercator Lines Limited - India
- Carbofer General Trading SA - India
- Pendopo Energi Batubara - Indonesia
- IEA Clean Coal Centre - UK
- Kaltim Prima Coal - Indonesia
- London Commodity Brokers - England
- Lanco Infratech Ltd - India
- Straits Asia Resources Limited - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Renaissance Capital - South Africa
- Global Green Power PLC Corporation, Philippines
- White Energy Company Limited
- Formosa Plastics Group - Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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