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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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Friday, 02 December 11
DRY BULK CARRIERS BACK IN THE SPOTLIGHT AS MARKET SPEEDS UP - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the tanker and container markets suffering dearly, it seems that the tide has once again turned in favor of the dry bulk carriers, despite over ...
Thursday, 01 December 11
DRY BULK MARKET RISES TO NEW HEIGHTS ON RENEWED DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept on rising this week, with the industry’s benchmark, the Baltic Dry Index (BDI) climbing to 1,846 points on Wednes ...
Tuesday, 29 November 11
SOUTH AFRICAN COAL INTO CHINA, THE ACTIVITY WAS SLOW - BRS
Capesize
The Capesize market in Atlantic stayed pretty firm last week with transatlantic rounds being fixed in the high twenties. Sentiment was les ...
Tuesday, 29 November 11
GOLDEN GATE BRIDGE OF INDONESIA COLLAPSED AT KUKAR, EAST KALIMANTAN
COALspot.com - A suspension bridge in Indonesia’s east Kalimantan province over the Mahakam river collapsed on Saturday, killing at least elev ...
Tuesday, 29 November 11
BUKIT ASAM SCOUTS RP3 TRILLION PROFIT - INSIDER STORIES
The state-controlled coal miner PT Bukit Asam Tbk (PTBA) expects to post a Rp3 trillion net income this year, reaching its target which is 50% above ...
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- SMC Global Power, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Kartika Selabumi Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Singapore Mercantile Exchange
- Aboitiz Power Corporation - Philippines
- Mintek Dendrill Indonesia
- TeaM Sual Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Marubeni Corporation - India
- Commonwealth Bank - Australia
- Eastern Coal Council - USA
- Orica Mining Services - Indonesia
- Indian Oil Corporation Limited
- Anglo American - United Kingdom
- VISA Power Limited - India
- London Commodity Brokers - England
- SMG Consultants - Indonesia
- Posco Energy - South Korea
- Tamil Nadu electricity Board
- Mjunction Services Limited - India
- Africa Commodities Group - South Africa
- Karaikal Port Pvt Ltd - India
- Larsen & Toubro Limited - India
- Indo Tambangraya Megah - Indonesia
- Rio Tinto Coal - Australia
- Mercuria Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Uttam Galva Steels Limited - India
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Global Coal Blending Company Limited - Australia
- Meenaskhi Energy Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- India Bulls Power Limited - India
- Thiess Contractors Indonesia
- Straits Asia Resources Limited - Singapore
- Riau Bara Harum - Indonesia
- European Bulk Services B.V. - Netherlands
- Meralco Power Generation, Philippines
- Directorate Of Revenue Intelligence - India
- Planning Commission, India
- Intertek Mineral Services - Indonesia
- Mercator Lines Limited - India
- Indogreen Group - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Carbofer General Trading SA - India
- AsiaOL BioFuels Corp., Philippines
- Karbindo Abesyapradhi - Indoneisa
- Electricity Authority, New Zealand
- Economic Council, Georgia
- Vedanta Resources Plc - India
- Kobexindo Tractors - Indoneisa
- PTC India Limited - India
- Chamber of Mines of South Africa
- Billiton Holdings Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- GAC Shipping (India) Pvt Ltd
- Petron Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Star Paper Mills Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Power Finance Corporation Ltd., India
- Asmin Koalindo Tuhup - Indonesia
- Manunggal Multi Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Ministry of Finance - Indonesia
- Sojitz Corporation - Japan
- Australian Coal Association
- Sical Logistics Limited - India
- Cigading International Bulk Terminal - Indonesia
- Bhushan Steel Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Minerals Council of Australia
- Kumho Petrochemical, South Korea
- Savvy Resources Ltd - HongKong
- Trasteel International SA, Italy
- Gujarat Sidhee Cement - India
- Kapuas Tunggal Persada - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Price Waterhouse Coopers - Russia
- Energy Link Ltd, New Zealand
- Borneo Indobara - Indonesia
- Goldman Sachs - Singapore
- SN Aboitiz Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Central Electricity Authority - India
- Cement Manufacturers Association - India
- Australian Commodity Traders Exchange
- Siam City Cement PLC, Thailand
- Standard Chartered Bank - UAE
- Bharathi Cement Corporation - India
- Tata Chemicals Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Essar Steel Hazira Ltd - India
- Deloitte Consulting - India
- Petrochimia International Co. Ltd.- Taiwan
- Global Green Power PLC Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Global Business Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Malabar Cements Ltd - India
- Ministry of Mines - Canada
- Georgia Ports Authority, United States
- Indian Energy Exchange, India
- Bangladesh Power Developement Board
- Altura Mining Limited, Indonesia
- Coalindo Energy - Indonesia
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Siam City Cement - Thailand
- Agrawal Coal Company - India
- Miang Besar Coal Terminal - Indonesia
- IEA Clean Coal Centre - UK
- Parliament of New Zealand
- Maheswari Brothers Coal Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Energy - Thailand
- Binh Thuan Hamico - Vietnam
- Salva Resources Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- The Treasury - Australian Government
- Bulk Trading Sa - Switzerland
- Samtan Co., Ltd - South Korea
- The State Trading Corporation of India Ltd
- Madhucon Powers Ltd - India
- Antam Resourcindo - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- White Energy Company Limited
- LBH Netherlands Bv - Netherlands
- Wilmar Investment Holdings
- McConnell Dowell - Australia
- Coastal Gujarat Power Limited - India
- New Zealand Coal & Carbon
- Bayan Resources Tbk. - Indonesia
- CNBM International Corporation - China
- Attock Cement Pakistan Limited
- GMR Energy Limited - India
- Metalloyd Limited - United Kingdom
- Semirara Mining Corp, Philippines
- Banpu Public Company Limited - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Therma Luzon, Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Thai Mozambique Logistica
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Transport, Egypt
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Dalmia Cement Bharat India
- Ceylon Electricity Board - Sri Lanka
- MS Steel International - UAE
- Indonesian Coal Mining Association
- Baramulti Group, Indonesia
- Electricity Generating Authority of Thailand
- Chettinad Cement Corporation Ltd - India
- PowerSource Philippines DevCo
- Xindia Steels Limited - India
- Sakthi Sugars Limited - India
- Bhatia International Limited - India
- Formosa Plastics Group - Taiwan
- Holcim Trading Pte Ltd - Singapore
- Edison Trading Spa - Italy
- Kideco Jaya Agung - Indonesia
- The University of Queensland
- Coal and Oil Company - UAE
- Makarim & Taira - Indonesia
- Grasim Industreis Ltd - India
- ASAPP Information Group - India
- Interocean Group of Companies - India
- Neyveli Lignite Corporation Ltd, - India
- South Luzon Thermal Energy Corporation
- San Jose City I Power Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Central Java Power - Indonesia
- Sindya Power Generating Company Private Ltd
- Latin American Coal - Colombia
- Sarangani Energy Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Pendopo Energi Batubara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- ICICI Bank Limited - India
- IHS Mccloskey Coal Group - USA
- Renaissance Capital - South Africa
- Parry Sugars Refinery, India
- Timah Investasi Mineral - Indoneisa
- Wood Mackenzie - Singapore
- Port Waratah Coal Services - Australia
- Lanco Infratech Ltd - India
- Romanian Commodities Exchange
- Medco Energi Mining Internasional
- Barasentosa Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Aditya Birla Group - India
- Oldendorff Carriers - Singapore
- Videocon Industries ltd - India
- Bukit Baiduri Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Merrill Lynch Commodities Europe
- Kaltim Prima Coal - Indonesia
- Independent Power Producers Association of India
- GVK Power & Infra Limited - India
- Iligan Light & Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
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