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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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Wednesday, 16 November 11
A STRONG WEEK FOR THE CAPES - BRS
A sharp bounce by the Cape market pushed the BDI up by 3% last week. This was despite a softening in the other indices with the Panamax, Supramax an ...
Monday, 14 November 11
BORL SEEKS 660K MT OF LOW SULPHUR COAL
COALspot.com - BORL India has issued a tender for around 660,000 MT of 4500 - 5500 kcal/kg sub-bituminous Coal.
Bharat Oman Refineries Ltd ...
Sunday, 13 November 11
BUNKER PRICES REMAINED FIRM
COALspot.com - The market seemed to recover this week with the BDI and Cape Index up.
The BDI was up by only about 2.86 pct closing at 1835 point ...
Saturday, 12 November 11
COALINDO ENERGY LAUNCHED INDEX FOR 3400 GAR COAL
COALspot.com - PT Coalindo Energy, in cooperation with Argus Media Limited, launched the coal index for low-rank coal with a calorific value of 3,40 ...
Saturday, 12 November 11
BBJ WILL RELEASE A COAL CONTRACT
Jakarta Futures Exchange will soon release a coal futures contracts during the quarter 1 / 2012.
Director of the Jakarta Futures Exchange (BBJ) S ...
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- Indian Oil Corporation Limited
- Medco Energi Mining Internasional
- Alfred C Toepfer International GmbH - Germany
- IEA Clean Coal Centre - UK
- Bukit Baiduri Energy - Indonesia
- Tamil Nadu electricity Board
- Sical Logistics Limited - India
- Deloitte Consulting - India
- VISA Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Coal and Oil Company - UAE
- Directorate General of MIneral and Coal - Indonesia
- Trasteel International SA, Italy
- Kumho Petrochemical, South Korea
- Mercator Lines Limited - India
- Formosa Plastics Group - Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Coalindo Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Rio Tinto Coal - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Africa Commodities Group - South Africa
- Australian Coal Association
- SN Aboitiz Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Miang Besar Coal Terminal - Indonesia
- SMC Global Power, Philippines
- ICICI Bank Limited - India
- Economic Council, Georgia
- Essar Steel Hazira Ltd - India
- Uttam Galva Steels Limited - India
- MS Steel International - UAE
- Sakthi Sugars Limited - India
- Attock Cement Pakistan Limited
- Bharathi Cement Corporation - India
- Planning Commission, India
- GMR Energy Limited - India
- Borneo Indobara - Indonesia
- Independent Power Producers Association of India
- Toyota Tsusho Corporation, Japan
- International Coal Ventures Pvt Ltd - India
- Energy Link Ltd, New Zealand
- PNOC Exploration Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Mintek Dendrill Indonesia
- Parliament of New Zealand
- PowerSource Philippines DevCo
- South Luzon Thermal Energy Corporation
- Cement Manufacturers Association - India
- Savvy Resources Ltd - HongKong
- Antam Resourcindo - Indonesia
- Posco Energy - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indonesian Coal Mining Association
- Star Paper Mills Limited - India
- Baramulti Group, Indonesia
- Ambuja Cements Ltd - India
- Standard Chartered Bank - UAE
- Merrill Lynch Commodities Europe
- Orica Australia Pty. Ltd.
- Salva Resources Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Minerals Council of Australia
- Thiess Contractors Indonesia
- AsiaOL BioFuels Corp., Philippines
- Larsen & Toubro Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Orica Mining Services - Indonesia
- GVK Power & Infra Limited - India
- Eastern Coal Council - USA
- White Energy Company Limited
- Sindya Power Generating Company Private Ltd
- Global Coal Blending Company Limited - Australia
- Bhushan Steel Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Sojitz Corporation - Japan
- Kohat Cement Company Ltd. - Pakistan
- Wilmar Investment Holdings
- Mjunction Services Limited - India
- Meralco Power Generation, Philippines
- Thai Mozambique Logistica
- Kepco SPC Power Corporation, Philippines
- Commonwealth Bank - Australia
- Vedanta Resources Plc - India
- Barasentosa Lestari - Indonesia
- New Zealand Coal & Carbon
- Interocean Group of Companies - India
- Chamber of Mines of South Africa
- Vizag Seaport Private Limited - India
- GAC Shipping (India) Pvt Ltd
- PetroVietnam Power Coal Import and Supply Company
- Edison Trading Spa - Italy
- Semirara Mining and Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Mercuria Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Billiton Holdings Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Wood Mackenzie - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Therma Luzon, Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Globalindo Alam Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Riau Bara Harum - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The University of Queensland
- OPG Power Generation Pvt Ltd - India
- Electricity Authority, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- European Bulk Services B.V. - Netherlands
- Maheswari Brothers Coal Limited - India
- Metalloyd Limited - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Siam City Cement PLC, Thailand
- Anglo American - United Kingdom
- Ministry of Transport, Egypt
- Singapore Mercantile Exchange
- Intertek Mineral Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Heidelberg Cement - Germany
- Kideco Jaya Agung - Indonesia
- Petron Corporation, Philippines
- Central Java Power - Indonesia
- Binh Thuan Hamico - Vietnam
- India Bulls Power Limited - India
- Latin American Coal - Colombia
- Carbofer General Trading SA - India
- Port Waratah Coal Services - Australia
- Directorate Of Revenue Intelligence - India
- Bayan Resources Tbk. - Indonesia
- McConnell Dowell - Australia
- Electricity Generating Authority of Thailand
- Romanian Commodities Exchange
- IHS Mccloskey Coal Group - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Goldman Sachs - Singapore
- Ceylon Electricity Board - Sri Lanka
- Malabar Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- CIMB Investment Bank - Malaysia
- Chettinad Cement Corporation Ltd - India
- Ind-Barath Power Infra Limited - India
- Bhatia International Limited - India
- Indika Energy - Indonesia
- Indian Energy Exchange, India
- TeaM Sual Corporation - Philippines
- Dalmia Cement Bharat India
- Simpson Spence & Young - Indonesia
- Price Waterhouse Coopers - Russia
- Coastal Gujarat Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Cigading International Bulk Terminal - Indonesia
- Xindia Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Tata Chemicals Ltd - India
- Aboitiz Power Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Bangladesh Power Developement Board
- Jaiprakash Power Ventures ltd
- Manunggal Multi Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Energy Development Corp, Philippines
- CNBM International Corporation - China
- Parry Sugars Refinery, India
- Neyveli Lignite Corporation Ltd, - India
- London Commodity Brokers - England
- Videocon Industries ltd - India
- Aditya Birla Group - India
- Global Business Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Rashtriya Ispat Nigam Limited - India
- San Jose City I Power Corp, Philippines
- Central Electricity Authority - India
- Banpu Public Company Limited - Thailand
- Marubeni Corporation - India
- Renaissance Capital - South Africa
- LBH Netherlands Bv - Netherlands
- Ministry of Mines - Canada
- Georgia Ports Authority, United States
- Agrawal Coal Company - India
- Madhucon Powers Ltd - India
- Eastern Energy - Thailand
- Bulk Trading Sa - Switzerland
- Gujarat Sidhee Cement - India
- Indogreen Group - Indonesia
- The Treasury - Australian Government
- The State Trading Corporation of India Ltd
- Kobexindo Tractors - Indoneisa
- PTC India Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Grasim Industreis Ltd - India
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- SMG Consultants - Indonesia
- Bukit Makmur.PT - Indonesia
- Samtan Co., Ltd - South Korea
- Lanco Infratech Ltd - India
- Kaltim Prima Coal - Indonesia
- Australian Commodity Traders Exchange
- ASAPP Information Group - India
- Asmin Koalindo Tuhup - Indonesia
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