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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, 15 February 12
HBA FOR FEB 2012, CLIMBS 2.09 PERCENT AND REACHED US$ 111.58 PER TON
COALspot.com - The Indonesian coal reference price for February climbs 2.09 percent to US$111.58 per ton after losing past three months. ...
Monday, 13 February 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The current sentiment in the dry market resembles memories from the end of 2008, when the Baltic Dry Index closed at the level of 663 points on Dece ...
Sunday, 12 February 12
INDONESIA HAS ISSUED A REGULATION TO BAN THE EXPORT OF UNPROCESSED MINERALS AND METALS BY 2014
COALspot.com - The Indonesian government has finally issued a ministerial decree (7 Year 2012 dated 6 February 2012) to ban the export of unpro ...
Sunday, 12 February 12
THE BALTIC DRY INDEX CLIMBS 10.51%
COALspot.com - "The markets touched record lows not seen since mid 80’s. However there was some good news with signs of market recovery a ...
Saturday, 11 February 12
A SNAPSHOT ON THE ECONOMIC AND SHIPPING ENVIRONMENT - GOLDEN DESTINY
The week was highlighted with intense worries in the eurozone for Greece to secure its second bailout of $130billion by applying a ...
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- Planning Commission, India
- Energy Development Corp, Philippines
- Edison Trading Spa - Italy
- Maharashtra Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Bukit Makmur.PT - Indonesia
- Aditya Birla Group - India
- Goldman Sachs - Singapore
- Meenaskhi Energy Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Interocean Group of Companies - India
- Savvy Resources Ltd - HongKong
- Bhatia International Limited - India
- SN Aboitiz Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Singapore Mercantile Exchange
- Commonwealth Bank - Australia
- Chamber of Mines of South Africa
- McConnell Dowell - Australia
- Gujarat Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Anglo American - United Kingdom
- Wilmar Investment Holdings
- Krishnapatnam Port Company Ltd. - India
- Leighton Contractors Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- Vizag Seaport Private Limited - India
- Altura Mining Limited, Indonesia
- Renaissance Capital - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Rio Tinto Coal - Australia
- Lanco Infratech Ltd - India
- Ministry of Finance - Indonesia
- Independent Power Producers Association of India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bharathi Cement Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- Mercuria Energy - Indonesia
- Thai Mozambique Logistica
- Coastal Gujarat Power Limited - India
- LBH Netherlands Bv - Netherlands
- Mjunction Services Limited - India
- The University of Queensland
- Madhucon Powers Ltd - India
- Kepco SPC Power Corporation, Philippines
- Ministry of Transport, Egypt
- Port Waratah Coal Services - Australia
- Globalindo Alam Lestari - Indonesia
- Barasentosa Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Central Java Power - Indonesia
- International Coal Ventures Pvt Ltd - India
- Tamil Nadu electricity Board
- Bahari Cakrawala Sebuku - Indonesia
- Wood Mackenzie - Singapore
- Eastern Energy - Thailand
- European Bulk Services B.V. - Netherlands
- Australian Commodity Traders Exchange
- SMC Global Power, Philippines
- Bhushan Steel Limited - India
- Agrawal Coal Company - India
- Mercator Lines Limited - India
- Electricity Authority, New Zealand
- Kapuas Tunggal Persada - Indonesia
- Tata Chemicals Ltd - India
- Riau Bara Harum - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Mines - Canada
- Global Green Power PLC Corporation, Philippines
- Cement Manufacturers Association - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ambuja Cements Ltd - India
- Antam Resourcindo - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- San Jose City I Power Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Siam City Cement PLC, Thailand
- GN Power Mariveles Coal Plant, Philippines
- Uttam Galva Steels Limited - India
- The Treasury - Australian Government
- Coal and Oil Company - UAE
- GAC Shipping (India) Pvt Ltd
- Attock Cement Pakistan Limited
- Rashtriya Ispat Nigam Limited - India
- Metalloyd Limited - United Kingdom
- Orica Australia Pty. Ltd.
- Ceylon Electricity Board - Sri Lanka
- Bukit Baiduri Energy - Indonesia
- CNBM International Corporation - China
- Thiess Contractors Indonesia
- Minerals Council of Australia
- Banpu Public Company Limited - Thailand
- Karaikal Port Pvt Ltd - India
- Eastern Coal Council - USA
- PTC India Limited - India
- Toyota Tsusho Corporation, Japan
- Pendopo Energi Batubara - Indonesia
- Borneo Indobara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- VISA Power Limited - India
- Indogreen Group - Indonesia
- Kartika Selabumi Mining - Indonesia
- The State Trading Corporation of India Ltd
- Therma Luzon, Inc, Philippines
- SMG Consultants - Indonesia
- Straits Asia Resources Limited - Singapore
- Sojitz Corporation - Japan
- Star Paper Mills Limited - India
- Jindal Steel & Power Ltd - India
- Indika Energy - Indonesia
- Baramulti Group, Indonesia
- Georgia Ports Authority, United States
- Power Finance Corporation Ltd., India
- IHS Mccloskey Coal Group - USA
- Meralco Power Generation, Philippines
- Carbofer General Trading SA - India
- Malabar Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- AsiaOL BioFuels Corp., Philippines
- Kideco Jaya Agung - Indonesia
- Global Business Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- ICICI Bank Limited - India
- Mintek Dendrill Indonesia
- Cigading International Bulk Terminal - Indonesia
- Posco Energy - South Korea
- Latin American Coal - Colombia
- Grasim Industreis Ltd - India
- ASAPP Information Group - India
- Directorate General of MIneral and Coal - Indonesia
- Sakthi Sugars Limited - India
- Deloitte Consulting - India
- MS Steel International - UAE
- Chettinad Cement Corporation Ltd - India
- Energy Link Ltd, New Zealand
- New Zealand Coal & Carbon
- Parliament of New Zealand
- IEA Clean Coal Centre - UK
- Trasteel International SA, Italy
- Sarangani Energy Corporation, Philippines
- Heidelberg Cement - Germany
- India Bulls Power Limited - India
- Essar Steel Hazira Ltd - India
- Kumho Petrochemical, South Korea
- Bangladesh Power Developement Board
- Petron Corporation, Philippines
- Siam City Cement - Thailand
- Africa Commodities Group - South Africa
- Oldendorff Carriers - Singapore
- Alfred C Toepfer International GmbH - Germany
- PowerSource Philippines DevCo
- Maheswari Brothers Coal Limited - India
- Sinarmas Energy and Mining - Indonesia
- Gujarat Sidhee Cement - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Jaiprakash Power Ventures ltd
- Medco Energi Mining Internasional
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bulk Trading Sa - Switzerland
- Semirara Mining and Power Corporation, Philippines
- Videocon Industries ltd - India
- Vedanta Resources Plc - India
- Indo Tambangraya Megah - Indonesia
- White Energy Company Limited
- Coalindo Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Indian Oil Corporation Limited
- Electricity Generating Authority of Thailand
- Indonesian Coal Mining Association
- Sical Logistics Limited - India
- Dalmia Cement Bharat India
- Global Coal Blending Company Limited - Australia
- Bayan Resources Tbk. - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Manunggal Multi Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- Economic Council, Georgia
- Directorate Of Revenue Intelligence - India
- Romanian Commodities Exchange
- Merrill Lynch Commodities Europe
- Holcim Trading Pte Ltd - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Xindia Steels Limited - India
- Bhoruka Overseas - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Larsen & Toubro Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Central Electricity Authority - India
- Makarim & Taira - Indonesia
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- GMR Energy Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- London Commodity Brokers - England
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Indian Energy Exchange, India
- Kobexindo Tractors - Indoneisa
- Simpson Spence & Young - Indonesia
- PNOC Exploration Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining Corp, Philippines
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- Standard Chartered Bank - UAE
- Price Waterhouse Coopers - Russia
- TeaM Sual Corporation - Philippines
- Orica Mining Services - Indonesia
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