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Tuesday, 27 December 11
MINERS MAKE CASE FOR RESUMING CONTRACT NEGOTIATIONS - THE JAKARTA POST
The Jakarta Post reported that, problems with the renegotiation of mining contracts in the country are far from over, as agreements on several crucial issues are still yet to be found.
The government remains adamant that it will not compromise on its intention to ramp up state revenues by increasing royalties, while miners on the other hand insist that some points in the 2009 minerals and coal law are “irrational” and may create uncertainty in terms of the outcome of their investments.
The Indonesian Mining Association (IMA) revealed that renegotiations had stalled due to three major issues: the size of mining areas, state revenues and contract extensions.
In a bid to make progress on the stagnant talks between the government and miners, the association proposed solutions to the three issues based on what it saw as fair for both parties. With the proposals, it expected that deals would be made, which would foster an air of certainty in relation to operations.
On the issue of state revenues, the association claimed that it was hard for mining companies to adjust the amount of royalties to the level set by the government in the 2003 regulation on tariffs for non-tax revenues for the energy and mineral resources sector (3.75 percent of sales for gold, 3.25 percent for silver and 4 percent for copper).
“If the government wants to raise royalties, it also has to think about other financial obligations paid by companies, such as the corporate income tax, the amount of which is still 35 percent even though the 2008 law on income tax revised it to 25 percent,” said Syahrir AB, an executive director of the IMA, in Jakarta on Monday.
The government could not force mining companies to pay higher royalties without adjusting its other financial obligations because such economic burdens would reduce the profitability of their projects, he explained.
If the goal was to raise state revenues from the mining sector, he suggested that the government apply a threshold for mining companies’ profits. For example, if a company made a profit margin of more than 25 percent due to the soaring prices of commodities, the government could apply an additional tax, he added.
The second suggestion was related to the size of mining areas. The association said most mining companies needed at least 70,000 hectares to make a mining project “economical”. However, the 2009 law on minerals and coal determined that the maximum size for mineral mining was 25,000 hectares, with coal mining at 15,000 hectares.
“In our last meeting with the government, it understood our reasons. The government agreed that the size of an area granted to a company would be judged based on the long-term plan it proposed to the government,” Syahrir reported.
That model requires the Energy and Mineral Resources Ministry to have the human resources to review the plan and judge whether the size of area proposed by a company is reasonable or not. If the reviewers say that the proposal is unreasonable, the government can grant the permit for a smaller area.
The third suggestion was about the contract extension. Currently, mining companies can extend the contract by “two times 10 years”, but the authority to grant approval for the extension is in the hands of the head of regions by issuing mining permits. The association deems that the model creates uncertainty over the future of mining projects. It suggests that the contract extension clause is included into mining contracts (KK) and contracts of work (PKP2B).
The director general for minerals and coal at the Energy and Mineral Resources Ministry, Thamrin Sihite, said that out of 42 mining contract holders and 76 contracts of work, there were companies that agreed to all renegotiation points, and some that partially agreed and disagreed.
“About the suggestion in relation to the size of area, the government will review it first, if the proposal is in line with the government vision, we may approve it,” he said over the phone.
However, he reminded that renegotiations had to be looked at on case by case basis as each company had different problems.
IMA proposals:
•The implementation of a profit threshold to allow the government to tax mining companies if the latter’s profit margins exceed the threshold.
•Determine the mining area based on the profitability of each mining project. The IMA estimates that a company needs at least 70,000 hectares to make a project profitable.
•Contract extensions have to be included into mining contracts (KK) and contracts of work (PKP2B) to create certainty.
Source: The Jakarta Post
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Thursday, 01 March 12
BUKIT ASAM TARGETS EUROPEAN INVESTORS
COALspot.com - PT. Bukit Asam (persero) Tbk, Indonesian state owned coal miner is planning to conduct road show in Europe next week to target at Eur ...
Thursday, 01 March 12
INDO-INDIA, LARGE ECO SUPRA CAN FETCH CLOSE TO USD 9K DOP N.CHINA - FEARNLEYS AS
Handy
The Atlantic Handysize market did not see any signs for recovery this week. It is still a major lack of spot cargoes and an oversupply of pro ...
Wednesday, 29 February 12
69 MINERS AGREE TO RENEGOTIATE CONTRACTS - THE JAKARTA POST
The Jakarta Post, one of the leading English news papaer in Indonesia reported that, as many as 60 coal contracts-of-work (PKP2B) and nine non-coal ...
Wednesday, 29 February 12
PUTTING COAL GASIFICATION TO WORK
Clifford Reese of the SSOE Group looks at practical solutions for district energy leaders who wish to implement clean coal technology.
Coal fuels ...
Monday, 27 February 12
COAL MINING PROFITS TOO HIGH, SAYS GOVT - TEMPO INTERACTIVE
Tempo Interactive reported that, Energy and Mineral Resources Deputy Minister of Indonesia Widjajono Partowidagdo has criticized coal-mining compani ...
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- Aboitiz Power Corporation - Philippines
- Anglo American - United Kingdom
- Bhushan Steel Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indian Energy Exchange, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GMR Energy Limited - India
- Price Waterhouse Coopers - Russia
- PNOC Exploration Corporation - Philippines
- Orica Australia Pty. Ltd.
- Vedanta Resources Plc - India
- Sical Logistics Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tamil Nadu electricity Board
- Oldendorff Carriers - Singapore
- Rashtriya Ispat Nigam Limited - India
- GAC Shipping (India) Pvt Ltd
- Directorate Of Revenue Intelligence - India
- Orica Mining Services - Indonesia
- Power Finance Corporation Ltd., India
- Holcim Trading Pte Ltd - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karbindo Abesyapradhi - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Bulk Trading Sa - Switzerland
- Alfred C Toepfer International GmbH - Germany
- GN Power Mariveles Coal Plant, Philippines
- Global Coal Blending Company Limited - Australia
- South Luzon Thermal Energy Corporation
- Banpu Public Company Limited - Thailand
- Vizag Seaport Private Limited - India
- International Coal Ventures Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Altura Mining Limited, Indonesia
- Commonwealth Bank - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Ministry of Mines - Canada
- Billiton Holdings Pty Ltd - Australia
- Bayan Resources Tbk. - Indonesia
- IEA Clean Coal Centre - UK
- Ministry of Transport, Egypt
- Sinarmas Energy and Mining - Indonesia
- Grasim Industreis Ltd - India
- Kapuas Tunggal Persada - Indonesia
- The University of Queensland
- Posco Energy - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Indika Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Parliament of New Zealand
- Central Electricity Authority - India
- SMC Global Power, Philippines
- ICICI Bank Limited - India
- Sree Jayajothi Cements Limited - India
- Miang Besar Coal Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Carbofer General Trading SA - India
- Trasteel International SA, Italy
- Gujarat Sidhee Cement - India
- Dalmia Cement Bharat India
- Mercuria Energy - Indonesia
- New Zealand Coal & Carbon
- Agrawal Coal Company - India
- Singapore Mercantile Exchange
- Bhoruka Overseas - Indonesia
- Karaikal Port Pvt Ltd - India
- Madhucon Powers Ltd - India
- India Bulls Power Limited - India
- Africa Commodities Group - South Africa
- Siam City Cement - Thailand
- Planning Commission, India
- Thai Mozambique Logistica
- Port Waratah Coal Services - Australia
- Coastal Gujarat Power Limited - India
- Xindia Steels Limited - India
- Global Business Power Corporation, Philippines
- Electricity Authority, New Zealand
- CIMB Investment Bank - Malaysia
- Bukit Baiduri Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kartika Selabumi Mining - Indonesia
- Deloitte Consulting - India
- Independent Power Producers Association of India
- Petron Corporation, Philippines
- VISA Power Limited - India
- Jindal Steel & Power Ltd - India
- Meenaskhi Energy Private Limited - India
- Formosa Plastics Group - Taiwan
- Edison Trading Spa - Italy
- Ambuja Cements Ltd - India
- Energy Development Corp, Philippines
- Eastern Coal Council - USA
- Kepco SPC Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Tata Chemicals Ltd - India
- Parry Sugars Refinery, India
- Timah Investasi Mineral - Indoneisa
- Mintek Dendrill Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Medco Energi Mining Internasional
- Therma Luzon, Inc, Philippines
- Sojitz Corporation - Japan
- McConnell Dowell - Australia
- Marubeni Corporation - India
- Wilmar Investment Holdings
- Larsen & Toubro Limited - India
- Energy Link Ltd, New Zealand
- Global Green Power PLC Corporation, Philippines
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
- Mercator Lines Limited - India
- Kideco Jaya Agung - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Interocean Group of Companies - India
- Kaltim Prima Coal - Indonesia
- Semirara Mining Corp, Philippines
- Makarim & Taira - Indonesia
- Cement Manufacturers Association - India
- Central Java Power - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- OPG Power Generation Pvt Ltd - India
- Meralco Power Generation, Philippines
- Heidelberg Cement - Germany
- Economic Council, Georgia
- Rio Tinto Coal - Australia
- Ceylon Electricity Board - Sri Lanka
- TeaM Sual Corporation - Philippines
- Sakthi Sugars Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- European Bulk Services B.V. - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coal and Oil Company - UAE
- Jaiprakash Power Ventures ltd
- SMG Consultants - Indonesia
- ASAPP Information Group - India
- London Commodity Brokers - England
- Chettinad Cement Corporation Ltd - India
- GVK Power & Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Indogreen Group - Indonesia
- Pendopo Energi Batubara - Indonesia
- Renaissance Capital - South Africa
- Videocon Industries ltd - India
- The Treasury - Australian Government
- Binh Thuan Hamico - Vietnam
- Standard Chartered Bank - UAE
- Chamber of Mines of South Africa
- Samtan Co., Ltd - South Korea
- Malabar Cements Ltd - India
- Baramulti Group, Indonesia
- IHS Mccloskey Coal Group - USA
- Minerals Council of Australia
- Metalloyd Limited - United Kingdom
- Attock Cement Pakistan Limited
- Maharashtra Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- Riau Bara Harum - Indonesia
- Bukit Makmur.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Indian Oil Corporation Limited
- White Energy Company Limited
- Maheswari Brothers Coal Limited - India
- Goldman Sachs - Singapore
- Sarangani Energy Corporation, Philippines
- Eastern Energy - Thailand
- Manunggal Multi Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Thiess Contractors Indonesia
- Australian Coal Association
- PowerSource Philippines DevCo
- Uttam Galva Steels Limited - India
- MS Steel International - UAE
- Directorate General of MIneral and Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Australian Commodity Traders Exchange
- Merrill Lynch Commodities Europe
- Kobexindo Tractors - Indoneisa
- Toyota Tsusho Corporation, Japan
- PTC India Limited - India
- Coalindo Energy - Indonesia
- CNBM International Corporation - China
- Romanian Commodities Exchange
- Aditya Birla Group - India
- Georgia Ports Authority, United States
- Leighton Contractors Pty Ltd - Australia
- Borneo Indobara - Indonesia
- Indonesian Coal Mining Association
- Star Paper Mills Limited - India
- Ind-Barath Power Infra Limited - India
- Bhatia International Limited - India
- LBH Netherlands Bv - Netherlands
- Salva Resources Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Kumho Petrochemical, South Korea
- Latin American Coal - Colombia
- Electricity Generating Authority of Thailand
- Simpson Spence & Young - Indonesia
- Wood Mackenzie - Singapore
- Savvy Resources Ltd - HongKong
- San Jose City I Power Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Antam Resourcindo - Indonesia
- Lanco Infratech Ltd - India
- Ministry of Finance - Indonesia
- Siam City Cement PLC, Thailand
- AsiaOL BioFuels Corp., Philippines
- Kohat Cement Company Ltd. - Pakistan
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