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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, 08 December 11
INDIA MAY SEE 41% ANNUAL GROWTH OF ITS COAL DEMAND DURING THE NEXT 5 YEARS - ICAP SHIPPING
India’s Ministry of Coal expects that India’s coal demand may face an annual 41% rise during the next 5 years, while its coal deficit is ...
Thursday, 08 December 11
HAREDA KRIDA GETS CONTRACT FROM BAYAN - INSIDER STORIES
Insider Stories reported that, coal miner PT Bayan Resources Tbk (BYAN), through its subsidiary dubbed PT Gunungbayan Pratamacoal (GPB), has signed ...
Thursday, 08 December 11
CAPESIZES LIFT DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Capesize vessels yesterday helped lift the dry bulk market which had been falling since the start of the week on lower cargo demand. As a result the ...
Wednesday, 07 December 11
ABM INVESTAMA EYES RP6.3 TRIO REVENUE - INSIDER STORIES
Insider Stories reported that, an energy integrated company PT ABM Investama Tbk is eyeing a 1.5 folds increase in revenue this year from Rp4. ...
Tuesday, 06 December 11
DRY BULK MARKET ENDS RALLY, STARTS WEEK WITH FALL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
After a series of increases which saw the dry bulk market’s benchmark, the Baltic Dry Index (BDI) increasing close to 1,900 points and rates o ...
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- Global Green Power PLC Corporation, Philippines
- Georgia Ports Authority, United States
- Sinarmas Energy and Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Latin American Coal - Colombia
- Ambuja Cements Ltd - India
- Interocean Group of Companies - India
- Eastern Coal Council - USA
- Parry Sugars Refinery, India
- AsiaOL BioFuels Corp., Philippines
- Merrill Lynch Commodities Europe
- TNB Fuel Sdn Bhd - Malaysia
- Cigading International Bulk Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- MS Steel International - UAE
- Leighton Contractors Pty Ltd - Australia
- Medco Energi Mining Internasional
- Global Business Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Metalloyd Limited - United Kingdom
- PTC India Limited - India
- Petron Corporation, Philippines
- Central Java Power - Indonesia
- Samtan Co., Ltd - South Korea
- White Energy Company Limited
- Bayan Resources Tbk. - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining and Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Sical Logistics Limited - India
- LBH Netherlands Bv - Netherlands
- Independent Power Producers Association of India
- Borneo Indobara - Indonesia
- India Bulls Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Standard Chartered Bank - UAE
- Romanian Commodities Exchange
- SMG Consultants - Indonesia
- Electricity Authority, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Baramulti Group, Indonesia
- Commonwealth Bank - Australia
- Indian Oil Corporation Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Larsen & Toubro Limited - India
- Meralco Power Generation, Philippines
- GAC Shipping (India) Pvt Ltd
- Electricity Generating Authority of Thailand
- Kalimantan Lumbung Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- Australian Coal Association
- VISA Power Limited - India
- Kumho Petrochemical, South Korea
- Port Waratah Coal Services - Australia
- Directorate Of Revenue Intelligence - India
- Straits Asia Resources Limited - Singapore
- Binh Thuan Hamico - Vietnam
- Ministry of Transport, Egypt
- SN Aboitiz Power Inc, Philippines
- ASAPP Information Group - India
- Vizag Seaport Private Limited - India
- Manunggal Multi Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Indogreen Group - Indonesia
- Vedanta Resources Plc - India
- Formosa Plastics Group - Taiwan
- The Treasury - Australian Government
- Simpson Spence & Young - Indonesia
- Economic Council, Georgia
- Jorong Barutama Greston.PT - Indonesia
- Coal and Oil Company - UAE
- Indonesian Coal Mining Association
- Barasentosa Lestari - Indonesia
- Indika Energy - Indonesia
- Energy Development Corp, Philippines
- Deloitte Consulting - India
- South Luzon Thermal Energy Corporation
- Renaissance Capital - South Africa
- Agrawal Coal Company - India
- Bukit Makmur.PT - Indonesia
- Bangladesh Power Developement Board
- Iligan Light & Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- San Jose City I Power Corp, Philippines
- Riau Bara Harum - Indonesia
- Parliament of New Zealand
- Kartika Selabumi Mining - Indonesia
- Tamil Nadu electricity Board
- International Coal Ventures Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Siam City Cement - Thailand
- Trasteel International SA, Italy
- Toyota Tsusho Corporation, Japan
- Power Finance Corporation Ltd., India
- SMC Global Power, Philippines
- Bharathi Cement Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Altura Mining Limited, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Madhucon Powers Ltd - India
- The State Trading Corporation of India Ltd
- Jaiprakash Power Ventures ltd
- ICICI Bank Limited - India
- Indian Energy Exchange, India
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- Holcim Trading Pte Ltd - Singapore
- Carbofer General Trading SA - India
- PowerSource Philippines DevCo
- Global Coal Blending Company Limited - Australia
- Singapore Mercantile Exchange
- Attock Cement Pakistan Limited
- Mercuria Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Aditya Birla Group - India
- Antam Resourcindo - Indonesia
- Mercator Lines Limited - India
- Siam City Cement PLC, Thailand
- Gujarat Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- TeaM Sual Corporation - Philippines
- Minerals Council of Australia
- Ministry of Mines - Canada
- Sakthi Sugars Limited - India
- Africa Commodities Group - South Africa
- Uttam Galva Steels Limited - India
- Jindal Steel & Power Ltd - India
- Lanco Infratech Ltd - India
- Savvy Resources Ltd - HongKong
- Bhatia International Limited - India
- Therma Luzon, Inc, Philippines
- Videocon Industries ltd - India
- Wood Mackenzie - Singapore
- Grasim Industreis Ltd - India
- Energy Link Ltd, New Zealand
- Marubeni Corporation - India
- Billiton Holdings Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Thiess Contractors Indonesia
- Karaikal Port Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Bhushan Steel Limited - India
- Miang Besar Coal Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Ceylon Electricity Board - Sri Lanka
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhoruka Overseas - Indonesia
- Malabar Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- Gujarat Sidhee Cement - India
- Pipit Mutiara Jaya. PT, Indonesia
- CIMB Investment Bank - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Gujarat Mineral Development Corp Ltd - India
- European Bulk Services B.V. - Netherlands
- GVK Power & Infra Limited - India
- Posco Energy - South Korea
- Oldendorff Carriers - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Salva Resources Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Anglo American - United Kingdom
- Planning Commission, India
- Sree Jayajothi Cements Limited - India
- Edison Trading Spa - Italy
- Price Waterhouse Coopers - Russia
- Bulk Trading Sa - Switzerland
- Rashtriya Ispat Nigam Limited - India
- Pendopo Energi Batubara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Chamber of Mines of South Africa
- Sarangani Energy Corporation, Philippines
- Mjunction Services Limited - India
- PNOC Exploration Corporation - Philippines
- Goldman Sachs - Singapore
- Makarim & Taira - Indonesia
- Xindia Steels Limited - India
- Mintek Dendrill Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dalmia Cement Bharat India
- Semirara Mining Corp, Philippines
- Aboitiz Power Corporation - Philippines
- GMR Energy Limited - India
- Chettinad Cement Corporation Ltd - India
- McConnell Dowell - Australia
- Karbindo Abesyapradhi - Indoneisa
- Orica Australia Pty. Ltd.
- Orica Mining Services - Indonesia
- New Zealand Coal & Carbon
- Coalindo Energy - Indonesia
- Tata Chemicals Ltd - India
- Thai Mozambique Logistica
- Kepco SPC Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Ministry of Finance - Indonesia
- Sojitz Corporation - Japan
- Star Paper Mills Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kohat Cement Company Ltd. - Pakistan
- Rio Tinto Coal - Australia
- The University of Queensland
- Heidelberg Cement - Germany
- PetroVietnam Power Coal Import and Supply Company
- London Commodity Brokers - England
- Cement Manufacturers Association - India
- Essar Steel Hazira Ltd - India
- Central Electricity Authority - India
- Wilmar Investment Holdings
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