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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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Wednesday, 22 February 12
RAW COMMODITY EXPORT BAN SPARKS SMELTER BUILDING BOOM IN INDONESIA ANTARA / THE JAKARTA GLOBE
Antara / The Jakarta Globe reported that, as the government gears up to ban all exports of unprocessed commodities, Indonesia will see 12 new ...
Tuesday, 21 February 12
THREAT ISSUED ON MINERAL FIRMS AS GOVT PLANS EXPORT BAN - THE JAKARTA POST
The Jakarta Post, one of the leading english news papaer in Indonesia reported that, the government has given mineral producers three months to subm ...
Monday, 20 February 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU
The dry market experienced one more disappointing week with tonnage oversupply and limited cargo demand that pushes earnings for shipping players to ...
Monday, 20 February 12
JATENERGY SECURES FIRST 8000-TONNE COAL SALES CONTRACT FOR JONGKANG MINES
8000-tonne contract with Singaporean buyer signed for March delivery
50% down payment due in five working days
Production continues at both Jongka ...
Monday, 20 February 12
DIAN SWASTATIKA ACQUIRES ANDALAN LESTARI - INSIDER STORIES
Insider Stories reported that, PT Dian Swastatika Sentosa Tbk (DSSA), controlled by Fuganto Widjaja, son of Indra Widjaja, reported a 99.83% takeove ...
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- SN Aboitiz Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Holcim Trading Pte Ltd - Singapore
- Electricity Generating Authority of Thailand
- Timah Investasi Mineral - Indoneisa
- Agrawal Coal Company - India
- Mercator Lines Limited - India
- Coastal Gujarat Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Indika Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Ambuja Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- CNBM International Corporation - China
- Romanian Commodities Exchange
- International Coal Ventures Pvt Ltd - India
- Bharathi Cement Corporation - India
- Globalindo Alam Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Ind-Barath Power Infra Limited - India
- Interocean Group of Companies - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMG Consultants - Indonesia
- GVK Power & Infra Limited - India
- IEA Clean Coal Centre - UK
- ASAPP Information Group - India
- Heidelberg Cement - Germany
- Tamil Nadu electricity Board
- Baramulti Group, Indonesia
- Sree Jayajothi Cements Limited - India
- Binh Thuan Hamico - Vietnam
- Kobexindo Tractors - Indoneisa
- Parry Sugars Refinery, India
- SMC Global Power, Philippines
- Electricity Authority, New Zealand
- Semirara Mining and Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Meenaskhi Energy Private Limited - India
- Marubeni Corporation - India
- Economic Council, Georgia
- Larsen & Toubro Limited - India
- PetroVietnam Power Coal Import and Supply Company
- CIMB Investment Bank - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The Treasury - Australian Government
- Therma Luzon, Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Australian Commodity Traders Exchange
- Posco Energy - South Korea
- PowerSource Philippines DevCo
- Bukit Asam (Persero) Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Aditya Birla Group - India
- Vizag Seaport Private Limited - India
- The University of Queensland
- Meralco Power Generation, Philippines
- OPG Power Generation Pvt Ltd - India
- Dalmia Cement Bharat India
- Eastern Energy - Thailand
- Rio Tinto Coal - Australia
- Ministry of Finance - Indonesia
- Mintek Dendrill Indonesia
- VISA Power Limited - India
- Iligan Light & Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Ministry of Mines - Canada
- London Commodity Brokers - England
- Barasentosa Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Neyveli Lignite Corporation Ltd, - India
- Power Finance Corporation Ltd., India
- Bangladesh Power Developement Board
- Energy Development Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Africa Commodities Group - South Africa
- Salva Resources Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Kohat Cement Company Ltd. - Pakistan
- Energy Link Ltd, New Zealand
- Gujarat Sidhee Cement - India
- Xindia Steels Limited - India
- Renaissance Capital - South Africa
- PTC India Limited - India
- Grasim Industreis Ltd - India
- Deloitte Consulting - India
- Metalloyd Limited - United Kingdom
- ICICI Bank Limited - India
- Indonesian Coal Mining Association
- Price Waterhouse Coopers - Russia
- Alfred C Toepfer International GmbH - Germany
- Goldman Sachs - Singapore
- Indian Energy Exchange, India
- Australian Coal Association
- Tata Chemicals Ltd - India
- Chamber of Mines of South Africa
- Sakthi Sugars Limited - India
- Semirara Mining Corp, Philippines
- Central Electricity Authority - India
- Singapore Mercantile Exchange
- Borneo Indobara - Indonesia
- New Zealand Coal & Carbon
- Siam City Cement PLC, Thailand
- MS Steel International - UAE
- IHS Mccloskey Coal Group - USA
- LBH Netherlands Bv - Netherlands
- Jaiprakash Power Ventures ltd
- Krishnapatnam Port Company Ltd. - India
- Kepco SPC Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Mercuria Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Sarangani Energy Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Orica Mining Services - Indonesia
- Georgia Ports Authority, United States
- Edison Trading Spa - Italy
- Merrill Lynch Commodities Europe
- European Bulk Services B.V. - Netherlands
- Minerals Council of Australia
- Straits Asia Resources Limited - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Bukit Makmur.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Wood Mackenzie - Singapore
- Ministry of Transport, Egypt
- Simpson Spence & Young - Indonesia
- Eastern Coal Council - USA
- Port Waratah Coal Services - Australia
- Petron Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Sojitz Corporation - Japan
- Latin American Coal - Colombia
- Indogreen Group - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- White Energy Company Limited
- Independent Power Producers Association of India
- Mjunction Services Limited - India
- Carbofer General Trading SA - India
- Attock Cement Pakistan Limited
- Central Java Power - Indonesia
- The State Trading Corporation of India Ltd
- TNB Fuel Sdn Bhd - Malaysia
- GAC Shipping (India) Pvt Ltd
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
- Commonwealth Bank - Australia
- GMR Energy Limited - India
- Ceylon Electricity Board - Sri Lanka
- Makarim & Taira - Indonesia
- Bhushan Steel Limited - India
- McConnell Dowell - Australia
- Gujarat Mineral Development Corp Ltd - India
- Trasteel International SA, Italy
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karaikal Port Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Videocon Industries ltd - India
- Bayan Resources Tbk. - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Thai Mozambique Logistica
- Cement Manufacturers Association - India
- Antam Resourcindo - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bhatia International Limited - India
- Indian Oil Corporation Limited
- Thiess Contractors Indonesia
- Uttam Galva Steels Limited - India
- Global Business Power Corporation, Philippines
- Parliament of New Zealand
- Bhoruka Overseas - Indonesia
- Directorate Of Revenue Intelligence - India
- Global Coal Blending Company Limited - Australia
- Pendopo Energi Batubara - Indonesia
- Planning Commission, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vedanta Resources Plc - India
- Sindya Power Generating Company Private Ltd
- Oldendorff Carriers - Singapore
- Orica Australia Pty. Ltd.
- Jindal Steel & Power Ltd - India
- Formosa Plastics Group - Taiwan
- TeaM Sual Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Medco Energi Mining Internasional
- Star Paper Mills Limited - India
- Bulk Trading Sa - Switzerland
- Riau Bara Harum - Indonesia
- Coalindo Energy - Indonesia
- Malabar Cements Ltd - India
- India Bulls Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Coal and Oil Company - UAE
- Anglo American - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Standard Chartered Bank - UAE
- Leighton Contractors Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Siam City Cement - Thailand
- South Luzon Thermal Energy Corporation
- Global Green Power PLC Corporation, Philippines
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