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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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Monday, 05 December 11
THE DECEMBER HBA FELL 11% FROM ITS PEAK AT US$127.05 PER TON IN FEBRUARY 2011
COALspot.com - Ministry of Energy and Mineral Resources of Indonesia has sets the December 2011 coal reference price at US$ 112.67 per ton US$ 3.98 ...
Monday, 05 December 11
SGX LAUNCHED IHS MCCLOSKEY/XINHUA INFOLINK OTC CFR SOUTH CHINA COAL CONTRACT TODAY
COALspot.com - In order to meet the demand of the coal industry for an effective coal hedging tool with counterparty credit risk mitigation facility ...
Monday, 05 December 11
DRY BULK RATES LOOKING TO EXTEND GAINS THIS WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Capesize dry bulk carrier owners have had a great week, with rates rising for six straight sessions (including the end of the week before that). As ...
Sunday, 04 December 11
SUPRAMAX TRIPS VIA INDONESIA WERE REPORTED AROUND $ 7500 - 8000 PD
COALspot.com - The BDI and Cape index recovered this week. The BDI was up by 3.26 pct and Cape index saw a big jump and closed at 3409 points (up by ...
Saturday, 03 December 11
BORNEO TO SPEND US$600 MIO CAPEX - INSIDER STORIES
Insider Stories reported that, Coking coal miner PT Borneo Lumbung Energi & Metal Tbk (BORN) plans to spend US$600 million capital expenditure ( ...
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Globalindo Alam Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Indian Energy Exchange, India
- Posco Energy - South Korea
- The Treasury - Australian Government
- PetroVietnam Power Coal Import and Supply Company
- Indika Energy - Indonesia
- White Energy Company Limited
- SMG Consultants - Indonesia
- Edison Trading Spa - Italy
- Makarim & Taira - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Electricity Generating Authority of Thailand
- Aditya Birla Group - India
- Dalmia Cement Bharat India
- European Bulk Services B.V. - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Star Paper Mills Limited - India
- Holcim Trading Pte Ltd - Singapore
- Timah Investasi Mineral - Indoneisa
- TeaM Sual Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Mintek Dendrill Indonesia
- Kumho Petrochemical, South Korea
- Asmin Koalindo Tuhup - Indonesia
- Madhucon Powers Ltd - India
- Semirara Mining Corp, Philippines
- Energy Development Corp, Philippines
- CNBM International Corporation - China
- Attock Cement Pakistan Limited
- San Jose City I Power Corp, Philippines
- Anglo American - United Kingdom
- Parliament of New Zealand
- Australian Coal Association
- Thai Mozambique Logistica
- Mercuria Energy - Indonesia
- McConnell Dowell - Australia
- ASAPP Information Group - India
- Wilmar Investment Holdings
- Africa Commodities Group - South Africa
- Metalloyd Limited - United Kingdom
- IHS Mccloskey Coal Group - USA
- Sical Logistics Limited - India
- The University of Queensland
- Therma Luzon, Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Jorong Barutama Greston.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Bukit Baiduri Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Thiess Contractors Indonesia
- MS Steel International - UAE
- Bukit Makmur.PT - Indonesia
- ICICI Bank Limited - India
- Singapore Mercantile Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Kobexindo Tractors - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Bhushan Steel Limited - India
- Ceylon Electricity Board - Sri Lanka
- Kideco Jaya Agung - Indonesia
- Iligan Light & Power Inc, Philippines
- Borneo Indobara - Indonesia
- Parry Sugars Refinery, India
- Grasim Industreis Ltd - India
- Interocean Group of Companies - India
- Coalindo Energy - Indonesia
- Trasteel International SA, Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Commodity Traders Exchange
- Gujarat Mineral Development Corp Ltd - India
- Economic Council, Georgia
- Aboitiz Power Corporation - Philippines
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- Renaissance Capital - South Africa
- Sojitz Corporation - Japan
- Cigading International Bulk Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Maheswari Brothers Coal Limited - India
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Indian Oil Corporation Limited
- Merrill Lynch Commodities Europe
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Mining Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Toyota Tsusho Corporation, Japan
- Bayan Resources Tbk. - Indonesia
- Xindia Steels Limited - India
- Planning Commission, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Larsen & Toubro Limited - India
- Rashtriya Ispat Nigam Limited - India
- Jaiprakash Power Ventures ltd
- Formosa Plastics Group - Taiwan
- Karbindo Abesyapradhi - Indoneisa
- Karaikal Port Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Sree Jayajothi Cements Limited - India
- VISA Power Limited - India
- Essar Steel Hazira Ltd - India
- Central Electricity Authority - India
- India Bulls Power Limited - India
- Georgia Ports Authority, United States
- Intertek Mineral Services - Indonesia
- Romanian Commodities Exchange
- Miang Besar Coal Terminal - Indonesia
- Meralco Power Generation, Philippines
- Global Business Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- PowerSource Philippines DevCo
- Central Java Power - Indonesia
- Carbofer General Trading SA - India
- Binh Thuan Hamico - Vietnam
- LBH Netherlands Bv - Netherlands
- Power Finance Corporation Ltd., India
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- South Luzon Thermal Energy Corporation
- OPG Power Generation Pvt Ltd - India
- Bhatia International Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Commonwealth Bank - Australia
- Vizag Seaport Private Limited - India
- Coastal Gujarat Power Limited - India
- Chamber of Mines of South Africa
- Siam City Cement PLC, Thailand
- Ambuja Cements Ltd - India
- Uttam Galva Steels Limited - India
- Rio Tinto Coal - Australia
- Videocon Industries ltd - India
- Independent Power Producers Association of India
- Price Waterhouse Coopers - Russia
- Medco Energi Mining Internasional
- Tata Chemicals Ltd - India
- Barasentosa Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- Salva Resources Pvt Ltd - India
- Petron Corporation, Philippines
- Ministry of Finance - Indonesia
- Sakthi Sugars Limited - India
- Deloitte Consulting - India
- Siam City Cement - Thailand
- The State Trading Corporation of India Ltd
- Billiton Holdings Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Neyveli Lignite Corporation Ltd, - India
- Heidelberg Cement - Germany
- AsiaOL BioFuels Corp., Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cement Manufacturers Association - India
- GAC Shipping (India) Pvt Ltd
- PTC India Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Goldman Sachs - Singapore
- Riau Bara Harum - Indonesia
- Semirara Mining and Power Corporation, Philippines
- London Commodity Brokers - England
- Manunggal Multi Energi - Indonesia
- GVK Power & Infra Limited - India
- Eastern Coal Council - USA
- Tamil Nadu electricity Board
- Directorate Of Revenue Intelligence - India
- Indonesian Coal Mining Association
- Marubeni Corporation - India
- Ind-Barath Power Infra Limited - India
- Mercator Lines Limited - India
- Pendopo Energi Batubara - Indonesia
- Electricity Authority, New Zealand
- Agrawal Coal Company - India
- Standard Chartered Bank - UAE
- Kaltim Prima Coal - Indonesia
- Minerals Council of Australia
- Bharathi Cement Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- Port Waratah Coal Services - Australia
- Straits Asia Resources Limited - Singapore
- Gujarat Sidhee Cement - India
- International Coal Ventures Pvt Ltd - India
- Eastern Energy - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- GMR Energy Limited - India
- Sindya Power Generating Company Private Ltd
- Vedanta Resources Plc - India
- Coal and Oil Company - UAE
- Bangladesh Power Developement Board
- Altura Mining Limited, Indonesia
- Simpson Spence & Young - Indonesia
- Meenaskhi Energy Private Limited - India
- Latin American Coal - Colombia
- Lanco Infratech Ltd - India
- Savvy Resources Ltd - HongKong
- Kartika Selabumi Mining - Indonesia
- IEA Clean Coal Centre - UK
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- SMC Global Power, Philippines
- Wood Mackenzie - Singapore
- Malabar Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Energy Link Ltd, New Zealand
- Banpu Public Company Limited - Thailand
- Baramulti Group, Indonesia
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