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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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- Australian Coal Association
- Samtan Co., Ltd - South Korea
- Ministry of Finance - Indonesia
- Ministry of Mines - Canada
- New Zealand Coal & Carbon
- MS Steel International - UAE
- CNBM International Corporation - China
- White Energy Company Limited
- Electricity Authority, New Zealand
- Mjunction Services Limited - India
- Singapore Mercantile Exchange
- Banpu Public Company Limited - Thailand
- Latin American Coal - Colombia
- Price Waterhouse Coopers - Russia
- Madhucon Powers Ltd - India
- Orica Mining Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Electricity Generating Authority of Thailand
- The Treasury - Australian Government
- San Jose City I Power Corp, Philippines
- Eastern Energy - Thailand
- LBH Netherlands Bv - Netherlands
- PowerSource Philippines DevCo
- Commonwealth Bank - Australia
- Chamber of Mines of South Africa
- Planning Commission, India
- Formosa Plastics Group - Taiwan
- Trasteel International SA, Italy
- Deloitte Consulting - India
- Bukit Baiduri Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- Carbofer General Trading SA - India
- Thiess Contractors Indonesia
- Cement Manufacturers Association - India
- Iligan Light & Power Inc, Philippines
- Standard Chartered Bank - UAE
- Barasentosa Lestari - Indonesia
- Global Business Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Petrochimia International Co. Ltd.- Taiwan
- Tata Chemicals Ltd - India
- Marubeni Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Indo Tambangraya Megah - Indonesia
- Bharathi Cement Corporation - India
- Vedanta Resources Plc - India
- Kalimantan Lumbung Energi - Indonesia
- Vizag Seaport Private Limited - India
- Sindya Power Generating Company Private Ltd
- Indian Oil Corporation Limited
- SMG Consultants - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Simpson Spence & Young - Indonesia
- PTC India Limited - India
- Kaltim Prima Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Australian Commodity Traders Exchange
- GMR Energy Limited - India
- Kobexindo Tractors - Indoneisa
- Sakthi Sugars Limited - India
- Globalindo Alam Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Independent Power Producers Association of India
- Jaiprakash Power Ventures ltd
- Makarim & Taira - Indonesia
- Karaikal Port Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Ministry of Transport, Egypt
- Bhushan Steel Limited - India
- Economic Council, Georgia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Altura Mining Limited, Indonesia
- Timah Investasi Mineral - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Sojitz Corporation - Japan
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Aditya Birla Group - India
- Georgia Ports Authority, United States
- Wilmar Investment Holdings
- Metalloyd Limited - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Renaissance Capital - South Africa
- India Bulls Power Limited - India
- Interocean Group of Companies - India
- Cigading International Bulk Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Central Electricity Authority - India
- Energy Development Corp, Philippines
- Indika Energy - Indonesia
- Mercator Lines Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Malabar Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- Ind-Barath Power Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Posco Energy - South Korea
- Baramulti Group, Indonesia
- Xindia Steels Limited - India
- Tamil Nadu electricity Board
- Sree Jayajothi Cements Limited - India
- Thai Mozambique Logistica
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sarangani Energy Corporation, Philippines
- Coal and Oil Company - UAE
- Chettinad Cement Corporation Ltd - India
- McConnell Dowell - Australia
- Indonesian Coal Mining Association
- Asmin Koalindo Tuhup - Indonesia
- SN Aboitiz Power Inc, Philippines
- VISA Power Limited - India
- Directorate Of Revenue Intelligence - India
- Coastal Gujarat Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Heidelberg Cement - Germany
- Bayan Resources Tbk. - Indonesia
- Bhoruka Overseas - Indonesia
- Ceylon Electricity Board - Sri Lanka
- CIMB Investment Bank - Malaysia
- Borneo Indobara - Indonesia
- Africa Commodities Group - South Africa
- Central Java Power - Indonesia
- Anglo American - United Kingdom
- Meenaskhi Energy Private Limited - India
- Straits Asia Resources Limited - Singapore
- Bangladesh Power Developement Board
- Kapuas Tunggal Persada - Indonesia
- Star Paper Mills Limited - India
- Binh Thuan Hamico - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- Parry Sugars Refinery, India
- Kohat Cement Company Ltd. - Pakistan
- Orica Australia Pty. Ltd.
- Bukit Makmur.PT - Indonesia
- Edison Trading Spa - Italy
- Toyota Tsusho Corporation, Japan
- Maheswari Brothers Coal Limited - India
- Savvy Resources Ltd - HongKong
- Gujarat Sidhee Cement - India
- London Commodity Brokers - England
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Goldman Sachs - Singapore
- Lanco Infratech Ltd - India
- TeaM Sual Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- The University of Queensland
- Jorong Barutama Greston.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rio Tinto Coal - Australia
- Agrawal Coal Company - India
- Uttam Galva Steels Limited - India
- Energy Link Ltd, New Zealand
- Merrill Lynch Commodities Europe
- Gujarat Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- ASAPP Information Group - India
- GAC Shipping (India) Pvt Ltd
- Global Green Power PLC Corporation, Philippines
- Minerals Council of Australia
- ICICI Bank Limited - India
- Pendopo Energi Batubara - Indonesia
- Manunggal Multi Energi - Indonesia
- Petron Corporation, Philippines
- Parliament of New Zealand
- Indian Energy Exchange, India
- Coalindo Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Medco Energi Mining Internasional
- Larsen & Toubro Limited - India
- IEA Clean Coal Centre - UK
- Mercuria Energy - Indonesia
- Videocon Industries ltd - India
- Bhatia International Limited - India
- GVK Power & Infra Limited - India
- Global Coal Blending Company Limited - Australia
- Ambuja Cements Ltd - India
- Kumho Petrochemical, South Korea
- Grasim Industreis Ltd - India
- Salva Resources Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Antam Resourcindo - Indonesia
- Essar Steel Hazira Ltd - India
- Wood Mackenzie - Singapore
- Romanian Commodities Exchange
- PNOC Exploration Corporation - Philippines
- Dalmia Cement Bharat India
- Siam City Cement - Thailand
- Bulk Trading Sa - Switzerland
- Bukit Asam (Persero) Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- SMC Global Power, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Power Finance Corporation Ltd., India
- AsiaOL BioFuels Corp., Philippines
- Eastern Coal Council - USA
- Semirara Mining Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Indogreen Group - Indonesia
- IHS Mccloskey Coal Group - USA
- Attock Cement Pakistan Limited
- Sical Logistics Limited - India
- Leighton Contractors Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Riau Bara Harum - Indonesia
- Kideco Jaya Agung - Indonesia
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