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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, 18 November 11
MMTC SEEKS 1.365 MMT OF IMPORTED COAL
COALspot.com - India's MMTC, the largest trading company of India and a major trading company of Asia, has issued a term supply tender for 1.365Mt ...
Friday, 18 November 11
KPC, ARUTMIN OUTPUT REACHED 47.1 MIO TONS - INSIDER STORIES
PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia, reported 47.1 million tons of coal production in 9M 2011, according to Indiser Stories.
Insi ...
Friday, 18 November 11
THE ATLANTIC SUPRAMAX MARKET EXPERIENCED A STEADY AND FIRM TENDENCY
Handy
The Atlantic Supramax market experienced a steady and firm tendency this week. Especially the North Atlantic and Mediterranean position ...
Friday, 18 November 11
BERAU COAL 9M PROFIT SOARS 194.46% - INSIDER STORIES
Insider Stories reported that, PT Berau Coal Energy Tbk (BRAU), which is 84.7% owned by Bumi Plc, reported a 194.46% jump in net profit by end of Se ...
Thursday, 17 November 11
DRY BULK MARKET INCHES FORWARD AND INTO HIGHER GROUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market edged higher yesterday, on the back of stronger demand for Capesize vessels and general improvement of sentiment on most of the ...
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- Star Paper Mills Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Mjunction Services Limited - India
- Australian Coal Association
- Attock Cement Pakistan Limited
- Salva Resources Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- ASAPP Information Group - India
- International Coal Ventures Pvt Ltd - India
- Deloitte Consulting - India
- European Bulk Services B.V. - Netherlands
- PTC India Limited - India
- Standard Chartered Bank - UAE
- Kumho Petrochemical, South Korea
- Ministry of Transport, Egypt
- Mintek Dendrill Indonesia
- Ministry of Finance - Indonesia
- Eastern Energy - Thailand
- Directorate Of Revenue Intelligence - India
- Maheswari Brothers Coal Limited - India
- Vedanta Resources Plc - India
- Sojitz Corporation - Japan
- Asmin Koalindo Tuhup - Indonesia
- Makarim & Taira - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Carbofer General Trading SA - India
- Sindya Power Generating Company Private Ltd
- Marubeni Corporation - India
- Kepco SPC Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Central Electricity Authority - India
- Ministry of Mines - Canada
- Bulk Trading Sa - Switzerland
- Dalmia Cement Bharat India
- Chamber of Mines of South Africa
- Samtan Co., Ltd - South Korea
- Economic Council, Georgia
- Trasteel International SA, Italy
- Kaltim Prima Coal - Indonesia
- Romanian Commodities Exchange
- Kapuas Tunggal Persada - Indonesia
- GMR Energy Limited - India
- PowerSource Philippines DevCo
- London Commodity Brokers - England
- Jindal Steel & Power Ltd - India
- Cement Manufacturers Association - India
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- Agrawal Coal Company - India
- Jaiprakash Power Ventures ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indogreen Group - Indonesia
- Bharathi Cement Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Larsen & Toubro Limited - India
- Anglo American - United Kingdom
- Gujarat Sidhee Cement - India
- Banpu Public Company Limited - Thailand
- Malabar Cements Ltd - India
- Petron Corporation, Philippines
- The University of Queensland
- Leighton Contractors Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- Semirara Mining Corp, Philippines
- Wood Mackenzie - Singapore
- Ceylon Electricity Board - Sri Lanka
- Global Green Power PLC Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Savvy Resources Ltd - HongKong
- Directorate General of MIneral and Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Global Business Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- GAC Shipping (India) Pvt Ltd
- SMC Global Power, Philippines
- Billiton Holdings Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Thiess Contractors Indonesia
- Karaikal Port Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- OPG Power Generation Pvt Ltd - India
- White Energy Company Limited
- Edison Trading Spa - Italy
- LBH Netherlands Bv - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- Ambuja Cements Ltd - India
- ICICI Bank Limited - India
- Price Waterhouse Coopers - Russia
- Commonwealth Bank - Australia
- Cigading International Bulk Terminal - Indonesia
- Heidelberg Cement - Germany
- Antam Resourcindo - Indonesia
- Siam City Cement - Thailand
- Chettinad Cement Corporation Ltd - India
- Oldendorff Carriers - Singapore
- Madhucon Powers Ltd - India
- Medco Energi Mining Internasional
- McConnell Dowell - Australia
- Globalindo Alam Lestari - Indonesia
- Parry Sugars Refinery, India
- Altura Mining Limited, Indonesia
- Borneo Indobara - Indonesia
- SMG Consultants - Indonesia
- Manunggal Multi Energi - Indonesia
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Development Corp, Philippines
- Bhatia International Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Kobexindo Tractors - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aditya Birla Group - India
- Rio Tinto Coal - Australia
- Coalindo Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Central Java Power - Indonesia
- Energy Link Ltd, New Zealand
- Uttam Galva Steels Limited - India
- Africa Commodities Group - South Africa
- Planning Commission, India
- MS Steel International - UAE
- Barasentosa Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- Orica Australia Pty. Ltd.
- Bukit Makmur.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Parliament of New Zealand
- Formosa Plastics Group - Taiwan
- Sinarmas Energy and Mining - Indonesia
- Merrill Lynch Commodities Europe
- IEA Clean Coal Centre - UK
- Lanco Infratech Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Baramulti Group, Indonesia
- Wilmar Investment Holdings
- Eastern Coal Council - USA
- Alfred C Toepfer International GmbH - Germany
- Coastal Gujarat Power Limited - India
- PNOC Exploration Corporation - Philippines
- Port Waratah Coal Services - Australia
- Xindia Steels Limited - India
- Ind-Barath Power Infra Limited - India
- Vizag Seaport Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- India Bulls Power Limited - India
- Electricity Authority, New Zealand
- Posco Energy - South Korea
- Minerals Council of Australia
- CNBM International Corporation - China
- Holcim Trading Pte Ltd - Singapore
- Krishnapatnam Port Company Ltd. - India
- Orica Mining Services - Indonesia
- The State Trading Corporation of India Ltd
- Renaissance Capital - South Africa
- South Luzon Thermal Energy Corporation
- Simpson Spence & Young - Indonesia
- Tamil Nadu electricity Board
- Australian Commodity Traders Exchange
- Rashtriya Ispat Nigam Limited - India
- SN Aboitiz Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Videocon Industries ltd - India
- Sical Logistics Limited - India
- Mercuria Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Straits Asia Resources Limited - Singapore
- San Jose City I Power Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- VISA Power Limited - India
- Mercator Lines Limited - India
- TeaM Sual Corporation - Philippines
- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- New Zealand Coal & Carbon
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Goldman Sachs - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Kideco Jaya Agung - Indonesia
- Sree Jayajothi Cements Limited - India
- Indian Energy Exchange, India
- Metalloyd Limited - United Kingdom
- Sakthi Sugars Limited - India
- Essar Steel Hazira Ltd - India
- Bhoruka Overseas - Indonesia
- Tata Chemicals Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- The Treasury - Australian Government
- Toyota Tsusho Corporation, Japan
- Electricity Generating Authority of Thailand
- Singapore Mercantile Exchange
- Grasim Industreis Ltd - India
- Intertek Mineral Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- Iligan Light & Power Inc, Philippines
- Georgia Ports Authority, United States
- Therma Luzon, Inc, Philippines
- GVK Power & Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Bhushan Steel Limited - India
- Global Coal Blending Company Limited - Australia
- Thai Mozambique Logistica
- Riau Bara Harum - Indonesia
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