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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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Tuesday, 29 November 11
DRY BULK MARKET BEGINS WEEK ON HIGHER NOTE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Contrary to what had been the case during the past few weeks, this one began on a high note for the dry bulk market, with the Capesize sector pullin ...
Monday, 28 November 11
NEW ENVIRONMENTAL MARINE REGULATIONS TO IMPACT SHIPPING IN 2012 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
August of next year will see some major changes for marine navigation. It’s when the North American ECA will come into force, introducing a 1% ...
Sunday, 27 November 11
INDIA'S KPCL TO IMPORT 50 MMT OF COAL FOR 10 YEARS
COALspot.com - Karnataka Power Corporation Limited (KPCL) will buy 5 million metric tonnes of coal annually for 10 years starting from 2015.
In a ...
Saturday, 26 November 11
INDIAN PORTS ARE BECOME COAL STOCKPILES..!!
COALspot.com - The Indian coal stocks and power tariff situation is the hot topic among the world coal producers as well as Indian coal importers.&n ...
Saturday, 26 November 11
THE FREIGHT MARKETS EXPECTED TO BE STEADY NEXT WEEK - VISTAAR
COALspot.com - The market were down probably with the sentiments of global financial markets and all segments were down.
The BDI was up down by 4 ...
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- European Bulk Services B.V. - Netherlands
- Bangladesh Power Developement Board
- Kideco Jaya Agung - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- Kartika Selabumi Mining - Indonesia
- Thiess Contractors Indonesia
- Sical Logistics Limited - India
- Jaiprakash Power Ventures ltd
- Siam City Cement PLC, Thailand
- SN Aboitiz Power Inc, Philippines
- Rio Tinto Coal - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- MS Steel International - UAE
- Globalindo Alam Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Sree Jayajothi Cements Limited - India
- Central Electricity Authority - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhatia International Limited - India
- Riau Bara Harum - Indonesia
- Power Finance Corporation Ltd., India
- Tata Chemicals Ltd - India
- The University of Queensland
- Iligan Light & Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Trasteel International SA, Italy
- Cement Manufacturers Association - India
- Barasentosa Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Renaissance Capital - South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tamil Nadu electricity Board
- Eastern Energy - Thailand
- Energy Link Ltd, New Zealand
- CNBM International Corporation - China
- GN Power Mariveles Coal Plant, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Anglo American - United Kingdom
- Australian Coal Association
- Heidelberg Cement - Germany
- Global Business Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Samtan Co., Ltd - South Korea
- AsiaOL BioFuels Corp., Philippines
- TeaM Sual Corporation - Philippines
- Marubeni Corporation - India
- Makarim & Taira - Indonesia
- New Zealand Coal & Carbon
- Pipit Mutiara Jaya. PT, Indonesia
- Carbofer General Trading SA - India
- Economic Council, Georgia
- Bahari Cakrawala Sebuku - Indonesia
- OPG Power Generation Pvt Ltd - India
- PowerSource Philippines DevCo
- Baramulti Group, Indonesia
- Meenaskhi Energy Private Limited - India
- Minerals Council of Australia
- Central Java Power - Indonesia
- Bayan Resources Tbk. - Indonesia
- GAC Shipping (India) Pvt Ltd
- The Treasury - Australian Government
- Edison Trading Spa - Italy
- Petron Corporation, Philippines
- Indian Oil Corporation Limited
- Independent Power Producers Association of India
- Agrawal Coal Company - India
- Energy Development Corp, Philippines
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Lanco Infratech Ltd - India
- Ind-Barath Power Infra Limited - India
- Intertek Mineral Services - Indonesia
- Commonwealth Bank - Australia
- Coastal Gujarat Power Limited - India
- Mjunction Services Limited - India
- Cigading International Bulk Terminal - Indonesia
- White Energy Company Limited
- GMR Energy Limited - India
- Singapore Mercantile Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Latin American Coal - Colombia
- Malabar Cements Ltd - India
- IHS Mccloskey Coal Group - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Sarangani Energy Corporation, Philippines
- Electricity Generating Authority of Thailand
- Metalloyd Limited - United Kingdom
- Meralco Power Generation, Philippines
- Pendopo Energi Batubara - Indonesia
- Sindya Power Generating Company Private Ltd
- Orica Mining Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Mintek Dendrill Indonesia
- Indogreen Group - Indonesia
- Attock Cement Pakistan Limited
- Indian Energy Exchange, India
- Georgia Ports Authority, United States
- Manunggal Multi Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Mercuria Energy - Indonesia
- Semirara Mining Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Eastern Coal Council - USA
- Kalimantan Lumbung Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Toyota Tsusho Corporation, Japan
- Alfred C Toepfer International GmbH - Germany
- Standard Chartered Bank - UAE
- Coal and Oil Company - UAE
- South Luzon Thermal Energy Corporation
- Australian Commodity Traders Exchange
- Mercator Lines Limited - India
- Bhushan Steel Limited - India
- Electricity Authority, New Zealand
- San Jose City I Power Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Sojitz Corporation - Japan
- Krishnapatnam Port Company Ltd. - India
- Orica Australia Pty. Ltd.
- Altura Mining Limited, Indonesia
- Goldman Sachs - Singapore
- Kepco SPC Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Directorate Of Revenue Intelligence - India
- India Bulls Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Port Waratah Coal Services - Australia
- ICICI Bank Limited - India
- Madhucon Powers Ltd - India
- Xindia Steels Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Videocon Industries ltd - India
- Antam Resourcindo - Indonesia
- Grasim Industreis Ltd - India
- Indika Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Global Coal Blending Company Limited - Australia
- Ambuja Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Kaltim Prima Coal - Indonesia
- Posco Energy - South Korea
- Bukit Makmur.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Ministry of Finance - Indonesia
- Formosa Plastics Group - Taiwan
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Chettinad Cement Corporation Ltd - India
- The State Trading Corporation of India Ltd
- Aboitiz Power Corporation - Philippines
- Chamber of Mines of South Africa
- Medco Energi Mining Internasional
- PNOC Exploration Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhoruka Overseas - Indonesia
- Simpson Spence & Young - Indonesia
- SMG Consultants - Indonesia
- Planning Commission, India
- LBH Netherlands Bv - Netherlands
- London Commodity Brokers - England
- Banpu Public Company Limited - Thailand
- Indonesian Coal Mining Association
- Wood Mackenzie - Singapore
- Borneo Indobara - Indonesia
- Siam City Cement - Thailand
- Aditya Birla Group - India
- Vizag Seaport Private Limited - India
- Parliament of New Zealand
- SMC Global Power, Philippines
- Therma Luzon, Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Romanian Commodities Exchange
- International Coal Ventures Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Gujarat Sidhee Cement - India
- Vedanta Resources Plc - India
- Karbindo Abesyapradhi - Indoneisa
- Parry Sugars Refinery, India
- Ministry of Transport, Egypt
- Uttam Galva Steels Limited - India
- Sakthi Sugars Limited - India
- ASAPP Information Group - India
- Merrill Lynch Commodities Europe
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Coalindo Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Timah Investasi Mineral - Indoneisa
- McConnell Dowell - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Savvy Resources Ltd - HongKong
- Ministry of Mines - Canada
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Star Paper Mills Limited - India
- Wilmar Investment Holdings
- Interocean Group of Companies - India
- Kohat Cement Company Ltd. - Pakistan
- IEA Clean Coal Centre - UK
- Deloitte Consulting - India
- Indo Tambangraya Megah - Indonesia
- Jindal Steel & Power Ltd - India
- Oldendorff Carriers - Singapore
- Dalmia Cement Bharat India
- Maheswari Brothers Coal Limited - India
- Kapuas Tunggal Persada - Indonesia
- Larsen & Toubro Limited - India
- Jorong Barutama Greston.PT - Indonesia
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