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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, 25 November 11
DISPUTE BETWEEN GIANT MINING FIRMS ENDS IN LAHAT - THE JAKARTA POST
The Jakarta Post reported that, prolonged dispute taking place in the South Sumatra regency of Lahat and involving two giant mining companies PT Buk ...
Friday, 25 November 11
DRY BULK MARKET LOSING STEAM, FAST - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
It’s been a week of falls for the dry bulk market this one, leaving ship owners with a sour taste in their mouths, as evidence of a recovery i ...
Thursday, 24 November 11
INDONESIA/INDIA SPMX TC AROUND $ 7/8K AND AROUND $ 12/13.00 PMTS ON VOYAGE BASIS - FEARNLEYS
Handy
Last week ended on a positive note in the Atlantic however the activity levels are somewhat reduced. Owners are asking in excess of USD ...
Thursday, 24 November 11
DRY BULK MARKET KEEPS LOSING STEAM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market was lower once again on Wednesday, with the industry’s benchmark, the Baltic Dry Index (BDI) ending the session down by 1. ...
Tuesday, 22 November 11
NTPC TO BUY 2 MMT OF IMPORTED COAL FOR ITS FOUR PLANTS
COALspot.com - NTPC Limited, incorporated in 1975 as a public sector company wholly owned by Government of India, the largest thermal power generati ...
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- Asmin Koalindo Tuhup - Indonesia
- ICICI Bank Limited - India
- Merrill Lynch Commodities Europe
- Semirara Mining and Power Corporation, Philippines
- Carbofer General Trading SA - India
- Kartika Selabumi Mining - Indonesia
- Vizag Seaport Private Limited - India
- Kumho Petrochemical, South Korea
- Electricity Generating Authority of Thailand
- Timah Investasi Mineral - Indoneisa
- Vedanta Resources Plc - India
- GAC Shipping (India) Pvt Ltd
- Indogreen Group - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Metalloyd Limited - United Kingdom
- Medco Energi Mining Internasional
- Jaiprakash Power Ventures ltd
- Sical Logistics Limited - India
- Cement Manufacturers Association - India
- Kobexindo Tractors - Indoneisa
- Borneo Indobara - Indonesia
- Formosa Plastics Group - Taiwan
- Standard Chartered Bank - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Africa Commodities Group - South Africa
- Singapore Mercantile Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Madhucon Powers Ltd - India
- Central Java Power - Indonesia
- Toyota Tsusho Corporation, Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PetroVietnam Power Coal Import and Supply Company
- Cigading International Bulk Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Star Paper Mills Limited - India
- Petron Corporation, Philippines
- MS Steel International - UAE
- Dalmia Cement Bharat India
- Makarim & Taira - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Orica Mining Services - Indonesia
- Meralco Power Generation, Philippines
- Grasim Industreis Ltd - India
- Chettinad Cement Corporation Ltd - India
- Energy Link Ltd, New Zealand
- Coal and Oil Company - UAE
- Bukit Baiduri Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Therma Luzon, Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- International Coal Ventures Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Energy Development Corp, Philippines
- Essar Steel Hazira Ltd - India
- OPG Power Generation Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Miang Besar Coal Terminal - Indonesia
- TeaM Sual Corporation - Philippines
- Oldendorff Carriers - Singapore
- Aditya Birla Group - India
- Altura Mining Limited, Indonesia
- Tamil Nadu electricity Board
- Bangladesh Power Developement Board
- Karbindo Abesyapradhi - Indoneisa
- Kideco Jaya Agung - Indonesia
- Global Green Power PLC Corporation, Philippines
- SMC Global Power, Philippines
- Interocean Group of Companies - India
- Thai Mozambique Logistica
- Tata Chemicals Ltd - India
- Videocon Industries ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Binh Thuan Hamico - Vietnam
- Bhushan Steel Limited - India
- India Bulls Power Limited - India
- Eastern Coal Council - USA
- Sindya Power Generating Company Private Ltd
- Heidelberg Cement - Germany
- LBH Netherlands Bv - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Anglo American - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- Directorate Of Revenue Intelligence - India
- Leighton Contractors Pty Ltd - Australia
- Ministry of Mines - Canada
- Semirara Mining Corp, Philippines
- Coalindo Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Finance - Indonesia
- The State Trading Corporation of India Ltd
- McConnell Dowell - Australia
- Chamber of Mines of South Africa
- Sojitz Corporation - Japan
- Marubeni Corporation - India
- Gujarat Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Pendopo Energi Batubara - Indonesia
- Iligan Light & Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- White Energy Company Limited
- Indian Oil Corporation Limited
- Independent Power Producers Association of India
- Savvy Resources Ltd - HongKong
- Central Electricity Authority - India
- Aboitiz Power Corporation - Philippines
- Edison Trading Spa - Italy
- Georgia Ports Authority, United States
- Jindal Steel & Power Ltd - India
- Maheswari Brothers Coal Limited - India
- Bhoruka Overseas - Indonesia
- Ministry of Transport, Egypt
- San Jose City I Power Corp, Philippines
- Malabar Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Attock Cement Pakistan Limited
- New Zealand Coal & Carbon
- Rio Tinto Coal - Australia
- Romanian Commodities Exchange
- Eastern Energy - Thailand
- Price Waterhouse Coopers - Russia
- Salva Resources Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Ambuja Cements Ltd - India
- Mercuria Energy - Indonesia
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- The Treasury - Australian Government
- GMR Energy Limited - India
- Orica Australia Pty. Ltd.
- Petrochimia International Co. Ltd.- Taiwan
- Kepco SPC Power Corporation, Philippines
- Minerals Council of Australia
- European Bulk Services B.V. - Netherlands
- Xindia Steels Limited - India
- South Luzon Thermal Energy Corporation
- Port Waratah Coal Services - Australia
- Power Finance Corporation Ltd., India
- Straits Asia Resources Limited - Singapore
- Renaissance Capital - South Africa
- Commonwealth Bank - Australia
- Banpu Public Company Limited - Thailand
- IEA Clean Coal Centre - UK
- Indonesian Coal Mining Association
- GN Power Mariveles Coal Plant, Philippines
- Latin American Coal - Colombia
- Wood Mackenzie - Singapore
- Sinarmas Energy and Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Trasteel International SA, Italy
- Planning Commission, India
- Parliament of New Zealand
- IHS Mccloskey Coal Group - USA
- Deloitte Consulting - India
- Alfred C Toepfer International GmbH - Germany
- Meenaskhi Energy Private Limited - India
- Siam City Cement PLC, Thailand
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- Bharathi Cement Corporation - India
- Billiton Holdings Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Baramulti Group, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- SMG Consultants - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- ASAPP Information Group - India
- Krishnapatnam Port Company Ltd. - India
- Posco Energy - South Korea
- Agrawal Coal Company - India
- Australian Commodity Traders Exchange
- Simpson Spence & Young - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indika Energy - Indonesia
- VISA Power Limited - India
- Wilmar Investment Holdings
- PowerSource Philippines DevCo
- Indian Energy Exchange, India
- Mjunction Services Limited - India
- PNOC Exploration Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Electricity Authority, New Zealand
- The University of Queensland
- Global Coal Blending Company Limited - Australia
- Sakthi Sugars Limited - India
- Mintek Dendrill Indonesia
- Coastal Gujarat Power Limited - India
- Riau Bara Harum - Indonesia
- CNBM International Corporation - China
- Siam City Cement - Thailand
- GVK Power & Infra Limited - India
- Parry Sugars Refinery, India
- Bayan Resources Tbk. - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Australian Coal Association
- Karaikal Port Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Goldman Sachs - Singapore
- Ind-Barath Power Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Larsen & Toubro Limited - India
- PTC India Limited - India
- Bulk Trading Sa - Switzerland
- Barasentosa Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Mercator Lines Limited - India
- London Commodity Brokers - England
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