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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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Thursday, 20 October 11
BRACKEN INTERNATIONAL MINING LISTS ON FRANKFURT STOCK EXCHANGE
Press Release - Bracken International Mining (Code:1BM) listed on the Deutsche Börse’s Frankfurt Stock Exchange today at €1.00 with ...
Thursday, 20 October 11
CAPESIZES, SUPRAMAXES LEAD GAINS FOR DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Struggling to find additional support, but still managing to post gains, the dry bulk market has stabilized itself on higher levels again yesterday, ...
Wednesday, 19 October 11
METALLURGICAL COAL PRICES TO DROP BELOW US$240/TONNE - WOOD MACKENZIE
Wood Mackenzie Says Metallurgical Coal Prices to Drop Below US$240/tonne by Q4 2012 But Long-term Demand Fundamentals Remain Robust
Wood Mackenzi ...
Wednesday, 19 October 11
SUPRAMAX MARKET WAS VERY FIRM LAST WEEK - BRS
With all sectors contributing positively, the BDI ended the week at 2,173 points (+8.6%), its highest level so far in 2011. The BCI stood at 3,587 ( ...
Wednesday, 19 October 11
ADARO ACQUIRES BUKIT ENIM ENERGI - INSIDER STORIES
Insider Stories reported that, Coal miner PT Adaro Energy Tbk, via its subsidiary dubbed PT Alam Tri Abadi, today revealed a 46% stake takeover of a ...
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- Coal and Oil Company - UAE
- Tata Chemicals Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- ICICI Bank Limited - India
- Maheswari Brothers Coal Limited - India
- Sarangani Energy Corporation, Philippines
- Energy Link Ltd, New Zealand
- Chettinad Cement Corporation Ltd - India
- Binh Thuan Hamico - Vietnam
- Kumho Petrochemical, South Korea
- Chamber of Mines of South Africa
- Dalmia Cement Bharat India
- Independent Power Producers Association of India
- GVK Power & Infra Limited - India
- Parliament of New Zealand
- Petron Corporation, Philippines
- Central Electricity Authority - India
- Alfred C Toepfer International GmbH - Germany
- Australian Coal Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- Maharashtra Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- ASAPP Information Group - India
- Coastal Gujarat Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Singapore Mercantile Exchange
- Thai Mozambique Logistica
- Madhucon Powers Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Star Paper Mills Limited - India
- Economic Council, Georgia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Straits Asia Resources Limited - Singapore
- Medco Energi Mining Internasional
- Directorate General of MIneral and Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Coalindo Energy - Indonesia
- Deloitte Consulting - India
- Formosa Plastics Group - Taiwan
- Mercator Lines Limited - India
- Banpu Public Company Limited - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Marubeni Corporation - India
- Meralco Power Generation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Sakthi Sugars Limited - India
- Carbofer General Trading SA - India
- Eastern Energy - Thailand
- PowerSource Philippines DevCo
- McConnell Dowell - Australia
- Mintek Dendrill Indonesia
- Sical Logistics Limited - India
- TeaM Sual Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Aboitiz Power Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Australian Commodity Traders Exchange
- The Treasury - Australian Government
- Oldendorff Carriers - Singapore
- Global Green Power PLC Corporation, Philippines
- The State Trading Corporation of India Ltd
- Kepco SPC Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Port Waratah Coal Services - Australia
- International Coal Ventures Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Jaiprakash Power Ventures ltd
- Tamil Nadu electricity Board
- Africa Commodities Group - South Africa
- LBH Netherlands Bv - Netherlands
- Manunggal Multi Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Wood Mackenzie - Singapore
- Gujarat Sidhee Cement - India
- Asmin Koalindo Tuhup - Indonesia
- Meenaskhi Energy Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- SN Aboitiz Power Inc, Philippines
- CNBM International Corporation - China
- Bhatia International Limited - India
- Mercuria Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Wilmar Investment Holdings
- VISA Power Limited - India
- Grasim Industreis Ltd - India
- Metalloyd Limited - United Kingdom
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- Energy Development Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bharathi Cement Corporation - India
- Larsen & Toubro Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Sinarmas Energy and Mining - Indonesia
- Standard Chartered Bank - UAE
- Aditya Birla Group - India
- Xindia Steels Limited - India
- Videocon Industries ltd - India
- Ambuja Cements Ltd - India
- SMC Global Power, Philippines
- PTC India Limited - India
- Mjunction Services Limited - India
- Siam City Cement - Thailand
- Posco Energy - South Korea
- Trasteel International SA, Italy
- Agrawal Coal Company - India
- Intertek Mineral Services - Indonesia
- CIMB Investment Bank - Malaysia
- Therma Luzon, Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Savvy Resources Ltd - HongKong
- Borneo Indobara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Rio Tinto Coal - Australia
- New Zealand Coal & Carbon
- Renaissance Capital - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Kartika Selabumi Mining - Indonesia
- Orica Australia Pty. Ltd.
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cement Manufacturers Association - India
- The University of Queensland
- Commonwealth Bank - Australia
- Leighton Contractors Pty Ltd - Australia
- White Energy Company Limited
- Rashtriya Ispat Nigam Limited - India
- Indonesian Coal Mining Association
- Semirara Mining Corp, Philippines
- GMR Energy Limited - India
- Sindya Power Generating Company Private Ltd
- Bulk Trading Sa - Switzerland
- Altura Mining Limited, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Riau Bara Harum - Indonesia
- Indika Energy - Indonesia
- Georgia Ports Authority, United States
- Romanian Commodities Exchange
- Antam Resourcindo - Indonesia
- Bukit Baiduri Energy - Indonesia
- Vedanta Resources Plc - India
- San Jose City I Power Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- European Bulk Services B.V. - Netherlands
- PNOC Exploration Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Billiton Holdings Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Price Waterhouse Coopers - Russia
- South Luzon Thermal Energy Corporation
- Latin American Coal - Colombia
- Karaikal Port Pvt Ltd - India
- India Bulls Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Merrill Lynch Commodities Europe
- Vizag Seaport Private Limited - India
- Indian Oil Corporation Limited
- Global Coal Blending Company Limited - Australia
- Heidelberg Cement - Germany
- Directorate Of Revenue Intelligence - India
- Edison Trading Spa - Italy
- Eastern Coal Council - USA
- Makarim & Taira - Indonesia
- Siam City Cement PLC, Thailand
- PetroVietnam Power Coal Import and Supply Company
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Kaltim Prima Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- MS Steel International - UAE
- Toyota Tsusho Corporation, Japan
- AsiaOL BioFuels Corp., Philippines
- GAC Shipping (India) Pvt Ltd
- Bhoruka Overseas - Indonesia
- Global Business Power Corporation, Philippines
- Ministry of Mines - Canada
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Mining Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Finance - Indonesia
- Bhushan Steel Limited - India
- Power Finance Corporation Ltd., India
- Electricity Authority, New Zealand
- Essar Steel Hazira Ltd - India
- Kobexindo Tractors - Indoneisa
- Ministry of Transport, Egypt
- Goldman Sachs - Singapore
- Anglo American - United Kingdom
- Bangladesh Power Developement Board
- Attock Cement Pakistan Limited
- London Commodity Brokers - England
- Bukit Asam (Persero) Tbk - Indonesia
- Parry Sugars Refinery, India
- SMG Consultants - Indonesia
- Samtan Co., Ltd - South Korea
- Baramulti Group, Indonesia
- Minerals Council of Australia
- Thiess Contractors Indonesia
- Krishnapatnam Port Company Ltd. - India
- Planning Commission, India
- Globalindo Alam Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Energy Exchange, India
- Malabar Cements Ltd - India
- Interocean Group of Companies - India
- Central Java Power - Indonesia
- Uttam Galva Steels Limited - India
- Lanco Infratech Ltd - India
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