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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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Monday, 07 November 11
CHINA'S COAL IMPORTS STEAM AHEAD
Chinese seaborne coal imports have grown greatly in recent years, up from 39.2mt in 2008 to 167.7mt in 2010, with the result that China became a net ...
Saturday, 05 November 11
DEMAND SLUMP THREATENS MORE PAIN FOR BULK VESSELS - VISTAAR
COALspot.com - The market continued to fall with BDI dropping below 2,000 points by around 10 pct and closing at 1817 points. The cape index also co ...
Saturday, 05 November 11
BERAU STARTS TO EXPLORE BINUNGAN SITE - INSIDER STORIES
Insider Stories reported that, coal miner PT Berau Coal, a 90% owned subsidiary of PT Berau Coal Energy Tbk (BRAU), is busy to hold exploration in B ...
Friday, 04 November 11
INDIAN IRON ORE MARKET REMAINS DEAD - FEARNLEYS
Handy
The Atlantic market kept its strong position from last week. Even with fewer fixtures reported. Fronthauls still around 25k, wit ...
Thursday, 03 November 11
DRY BULK MARKET OFFICIALLY IN THE RED ON LOWER CARGO DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept falling yesterday, on lower iron ore demand, which has caused the industry’s benchmark, the BDI (Baltic Dry Index) to ...
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- SMC Global Power, Philippines
- Thiess Contractors Indonesia
- Antam Resourcindo - Indonesia
- Ministry of Finance - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- Simpson Spence & Young - Indonesia
- Semirara Mining Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Agrawal Coal Company - India
- Star Paper Mills Limited - India
- IEA Clean Coal Centre - UK
- New Zealand Coal & Carbon
- Dalmia Cement Bharat India
- Kumho Petrochemical, South Korea
- Metalloyd Limited - United Kingdom
- The Treasury - Australian Government
- Madhucon Powers Ltd - India
- Rio Tinto Coal - Australia
- Romanian Commodities Exchange
- PowerSource Philippines DevCo
- Ceylon Electricity Board - Sri Lanka
- Africa Commodities Group - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Binh Thuan Hamico - Vietnam
- Essar Steel Hazira Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Barasentosa Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Tamil Nadu electricity Board
- Bayan Resources Tbk. - Indonesia
- Kaltim Prima Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Mercuria Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Videocon Industries ltd - India
- Borneo Indobara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Heidelberg Cement - Germany
- Uttam Galva Steels Limited - India
- London Commodity Brokers - England
- Semirara Mining and Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Orica Mining Services - Indonesia
- Australian Coal Association
- Parliament of New Zealand
- Renaissance Capital - South Africa
- SMG Consultants - Indonesia
- Directorate Of Revenue Intelligence - India
- Altura Mining Limited, Indonesia
- Indogreen Group - Indonesia
- Sojitz Corporation - Japan
- Ministry of Mines - Canada
- Jaiprakash Power Ventures ltd
- Maharashtra Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- PetroVietnam Power Coal Import and Supply Company
- Georgia Ports Authority, United States
- Kohat Cement Company Ltd. - Pakistan
- Economic Council, Georgia
- GAC Shipping (India) Pvt Ltd
- Ind-Barath Power Infra Limited - India
- Indian Energy Exchange, India
- Thai Mozambique Logistica
- Singapore Mercantile Exchange
- Tata Chemicals Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karaikal Port Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Bharathi Cement Corporation - India
- Independent Power Producers Association of India
- Bukit Makmur.PT - Indonesia
- Bangladesh Power Developement Board
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- Bukit Baiduri Energy - Indonesia
- GVK Power & Infra Limited - India
- Edison Trading Spa - Italy
- CIMB Investment Bank - Malaysia
- Central Electricity Authority - India
- The University of Queensland
- Jorong Barutama Greston.PT - Indonesia
- Australian Commodity Traders Exchange
- ICICI Bank Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Sidhee Cement - India
- Price Waterhouse Coopers - Russia
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Transport, Egypt
- Bhushan Steel Limited - India
- South Luzon Thermal Energy Corporation
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- Globalindo Alam Lestari - Indonesia
- White Energy Company Limited
- Sinarmas Energy and Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Merrill Lynch Commodities Europe
- San Jose City I Power Corp, Philippines
- TeaM Sual Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Global Green Power PLC Corporation, Philippines
- Central Java Power - Indonesia
- Mintek Dendrill Indonesia
- The State Trading Corporation of India Ltd
- Power Finance Corporation Ltd., India
- Carbofer General Trading SA - India
- Attock Cement Pakistan Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercator Lines Limited - India
- Goldman Sachs - Singapore
- Indian Oil Corporation Limited
- Interocean Group of Companies - India
- Savvy Resources Ltd - HongKong
- Gujarat Electricity Regulatory Commission - India
- Minerals Council of Australia
- Aditya Birla Group - India
- Anglo American - United Kingdom
- Meralco Power Generation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Parry Sugars Refinery, India
- Deloitte Consulting - India
- Orica Australia Pty. Ltd.
- Jindal Steel & Power Ltd - India
- Siam City Cement PLC, Thailand
- Iligan Light & Power Inc, Philippines
- Commonwealth Bank - Australia
- Kideco Jaya Agung - Indonesia
- Bhatia International Limited - India
- Maheswari Brothers Coal Limited - India
- Straits Asia Resources Limited - Singapore
- Kapuas Tunggal Persada - Indonesia
- Posco Energy - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Meenaskhi Energy Private Limited - India
- Standard Chartered Bank - UAE
- IHS Mccloskey Coal Group - USA
- GN Power Mariveles Coal Plant, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement - Thailand
- International Coal Ventures Pvt Ltd - India
- Larsen & Toubro Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Eastern Coal Council - USA
- Energy Development Corp, Philippines
- Eastern Energy - Thailand
- Indonesian Coal Mining Association
- Sakthi Sugars Limited - India
- VISA Power Limited - India
- Makarim & Taira - Indonesia
- Wood Mackenzie - Singapore
- Miang Besar Coal Terminal - Indonesia
- Latin American Coal - Colombia
- Trasteel International SA, Italy
- Billiton Holdings Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Bulk Trading Sa - Switzerland
- Wilmar Investment Holdings
- Port Waratah Coal Services - Australia
- Sindya Power Generating Company Private Ltd
- Malabar Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Baramulti Group, Indonesia
- Vedanta Resources Plc - India
- Aboitiz Power Corporation - Philippines
- Medco Energi Mining Internasional
- India Bulls Power Limited - India
- Electricity Authority, New Zealand
- GMR Energy Limited - India
- Riau Bara Harum - Indonesia
- Pendopo Energi Batubara - Indonesia
- CNBM International Corporation - China
- Mjunction Services Limited - India
- Toyota Tsusho Corporation, Japan
- Vijayanagar Sugar Pvt Ltd - India
- Grasim Industreis Ltd - India
- Cigading International Bulk Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Xindia Steels Limited - India
- ASAPP Information Group - India
- Indika Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Bhoruka Overseas - Indonesia
- Global Business Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Coalindo Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Ambuja Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Electricity Generating Authority of Thailand
- Coal and Oil Company - UAE
- Holcim Trading Pte Ltd - Singapore
- Banpu Public Company Limited - Thailand
- Samtan Co., Ltd - South Korea
- Oldendorff Carriers - Singapore
- PTC India Limited - India
- Rashtriya Ispat Nigam Limited - India
- Cement Manufacturers Association - India
- MS Steel International - UAE
- Karbindo Abesyapradhi - Indoneisa
- Formosa Plastics Group - Taiwan
- McConnell Dowell - Australia
- Chamber of Mines of South Africa
- Sical Logistics Limited - India
- LBH Netherlands Bv - Netherlands
- Petron Corporation, Philippines
- Planning Commission, India
- Krishnapatnam Port Company Ltd. - India
- Energy Link Ltd, New Zealand
- Salva Resources Pvt Ltd - India
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