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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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Tuesday, 24 January 12
BUKIT ASAM FY11 NET PROFIT SURGES 50% - INSIDER STORIES
Insider Stories reported that, the state-controlled PT Bukit Asam Tbk (PTBA) estimated to book Rp3 trillion (approximately US$ 335,570,469) net prof ...
Sunday, 22 January 12
FREIGHT MARKET DROPPED TO THE LOWEST LEVEL SINCE 2008
COALspot.com - "The markets continued to soften almost reaching 2008 levels breaking the 1,000 point mark", said Capt. Reddy of Vistaar Sh ...
Saturday, 21 January 12
ASIAS PREMIER COMPREHENSIVE OPEN CUT MINING CONFERENCE SCHEDULED FOR FEBRUARY 2012
As the only such conference in the region for miners and service providers, IBC Asia’s Open Cut Mine Planning & Operational Excellence con ...
Saturday, 21 January 12
COAL MARKETS CELEBRATES A DECADE OF BRINGING BUYERS & SELLERS TOGETHER
In 2012, IBC Asia’s premier Coal Markets conference series – Asia’s only globally focused coal import, export and supply chain eve ...
Saturday, 21 January 12
SAMIN TAN COMPLETES BUMI PLC TAKEOVER - INSIDER STORIES
Insider Stories reported that, Indonesian coking coal miner PT Borneo Lumbung Energi & Metal Tbk (BORN), that is controlled by stellar businessm ...
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- Sarangani Energy Corporation, Philippines
- Thiess Contractors Indonesia
- Planning Commission, India
- Indian Energy Exchange, India
- Salva Resources Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Cigading International Bulk Terminal - Indonesia
- Interocean Group of Companies - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thai Mozambique Logistica
- Wilmar Investment Holdings
- Krishnapatnam Port Company Ltd. - India
- South Luzon Thermal Energy Corporation
- PTC India Limited - India
- Intertek Mineral Services - Indonesia
- Borneo Indobara - Indonesia
- Independent Power Producers Association of India
- Mercuria Energy - Indonesia
- Carbofer General Trading SA - India
- European Bulk Services B.V. - Netherlands
- Global Coal Blending Company Limited - Australia
- Savvy Resources Ltd - HongKong
- Trasteel International SA, Italy
- Pendopo Energi Batubara - Indonesia
- Lanco Infratech Ltd - India
- Oldendorff Carriers - Singapore
- Orica Mining Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Rashtriya Ispat Nigam Limited - India
- New Zealand Coal & Carbon
- Cement Manufacturers Association - India
- Attock Cement Pakistan Limited
- Eastern Energy - Thailand
- Anglo American - United Kingdom
- Directorate Of Revenue Intelligence - India
- Mjunction Services Limited - India
- OPG Power Generation Pvt Ltd - India
- Central Java Power - Indonesia
- Meenaskhi Energy Private Limited - India
- Coalindo Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Aditya Birla Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Medco Energi Mining Internasional
- Uttam Galva Steels Limited - India
- Sakthi Sugars Limited - India
- Samtan Co., Ltd - South Korea
- VISA Power Limited - India
- Bulk Trading Sa - Switzerland
- Ind-Barath Power Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Economic Council, Georgia
- Xindia Steels Limited - India
- Vizag Seaport Private Limited - India
- Indo Tambangraya Megah - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bharathi Cement Corporation - India
- Timah Investasi Mineral - Indoneisa
- Riau Bara Harum - Indonesia
- San Jose City I Power Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Videocon Industries ltd - India
- Parry Sugars Refinery, India
- SMG Consultants - Indonesia
- Indika Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Sree Jayajothi Cements Limited - India
- GAC Shipping (India) Pvt Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Coal Council - USA
- MS Steel International - UAE
- Grasim Industreis Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Global Business Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Coastal Gujarat Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Kepco SPC Power Corporation, Philippines
- McConnell Dowell - Australia
- Asmin Koalindo Tuhup - Indonesia
- SN Aboitiz Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Malabar Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Sical Logistics Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Sindya Power Generating Company Private Ltd
- Africa Commodities Group - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Baramulti Group, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Singapore Mercantile Exchange
- Antam Resourcindo - Indonesia
- Chamber of Mines of South Africa
- GVK Power & Infra Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Posco Energy - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Siam City Cement - Thailand
- Tata Chemicals Ltd - India
- London Commodity Brokers - England
- Straits Asia Resources Limited - Singapore
- Gujarat Sidhee Cement - India
- Indogreen Group - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Manunggal Multi Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Sojitz Corporation - Japan
- Siam City Cement PLC, Thailand
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Agrawal Coal Company - India
- CNBM International Corporation - China
- Kumho Petrochemical, South Korea
- The State Trading Corporation of India Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Miang Besar Coal Terminal - Indonesia
- The University of Queensland
- PNOC Exploration Corporation - Philippines
- Commonwealth Bank - Australia
- Latin American Coal - Colombia
- GN Power Mariveles Coal Plant, Philippines
- IHS Mccloskey Coal Group - USA
- Bangladesh Power Developement Board
- Orica Australia Pty. Ltd.
- TeaM Sual Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Banpu Public Company Limited - Thailand
- Maheswari Brothers Coal Limited - India
- Power Finance Corporation Ltd., India
- Rio Tinto Coal - Australia
- Renaissance Capital - South Africa
- Electricity Generating Authority of Thailand
- Makarim & Taira - Indonesia
- Ministry of Mines - Canada
- IEA Clean Coal Centre - UK
- Bukit Makmur.PT - Indonesia
- Minerals Council of Australia
- Indonesian Coal Mining Association
- LBH Netherlands Bv - Netherlands
- Madhucon Powers Ltd - India
- Essar Steel Hazira Ltd - India
- Georgia Ports Authority, United States
- Meralco Power Generation, Philippines
- Deloitte Consulting - India
- Romanian Commodities Exchange
- PowerSource Philippines DevCo
- Standard Chartered Bank - UAE
- Parliament of New Zealand
- Ministry of Finance - Indonesia
- Marubeni Corporation - India
- Port Waratah Coal Services - Australia
- Petron Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Tamil Nadu electricity Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Baiduri Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Simpson Spence & Young - Indonesia
- GMR Energy Limited - India
- SMC Global Power, Philippines
- Australian Coal Association
- Kideco Jaya Agung - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Jindal Steel & Power Ltd - India
- ICICI Bank Limited - India
- Mercator Lines Limited - India
- Dalmia Cement Bharat India
- Kartika Selabumi Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Coal and Oil Company - UAE
- Australian Commodity Traders Exchange
- Mintek Dendrill Indonesia
- Vedanta Resources Plc - India
- Semirara Mining and Power Corporation, Philippines
- Ministry of Transport, Egypt
- Altura Mining Limited, Indonesia
- Bhushan Steel Limited - India
- Larsen & Toubro Limited - India
- Price Waterhouse Coopers - Russia
- Petrochimia International Co. Ltd.- Taiwan
- Globalindo Alam Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Electricity Authority, New Zealand
- The Treasury - Australian Government
- Bhatia International Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- White Energy Company Limited
- Barasentosa Lestari - Indonesia
- Heidelberg Cement - Germany
- ASAPP Information Group - India
- Star Paper Mills Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Energy Development Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Edison Trading Spa - Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- CIMB Investment Bank - Malaysia
- Central Electricity Authority - India
- Wood Mackenzie - Singapore
- International Coal Ventures Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Indian Oil Corporation Limited
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