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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, 05 January 12
DRY BULK MARKET TAKES A PLUNGE OF LOW ACTIVITY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
As was widely expected the first days of the new year are characterized by significantly low chartering across the board of the dry bulk market, pus ...
Wednesday, 04 January 12
NEWBUILDING ORDERS PICKED UP IN 2011, BUT 2012 EXPECTED TO BE A DIFFERENT STORY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the BDI (Baltic Dry Index) starting the year on a sour note, losing 114 points and ending yesterday’s session, the first of the new year, ...
Wednesday, 04 January 12
MAHAGENCO TO IMPORT LOW MOISTURE COAL
COALspot.com - Maharashtra State Power Generation Co. Ltd. is the state power generation utility owned by Government of Maharashtra, intends to proc ...
Tuesday, 03 January 12
INDONESIA COAL REFERENCE PRICE FELL AGAIN
COALspot.com - Ministry of Energy and Mineral Resources of Indonesia has sets the January 2012 coal reference price at US$ 109.29 per ton or US$ 3.3 ...
Tuesday, 03 January 12
WHICH WAY WILL THE DRY BULK MARKET HEAD ON FIRST WEEK OF THE YEAR? - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Dry bulk ship owners will be wondering which way will the BDI (Baltic Dry Index), the industry’s benchmark, will head during the first days of ...
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- Heidelberg Cement - Germany
- Bharathi Cement Corporation - India
- ASAPP Information Group - India
- SMG Consultants - Indonesia
- Electricity Generating Authority of Thailand
- Indonesian Coal Mining Association
- Deloitte Consulting - India
- San Jose City I Power Corp, Philippines
- Bangladesh Power Developement Board
- Sakthi Sugars Limited - India
- Indian Oil Corporation Limited
- Wilmar Investment Holdings
- Ministry of Finance - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bhoruka Overseas - Indonesia
- SN Aboitiz Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Singapore Mercantile Exchange
- Gujarat Sidhee Cement - India
- Bahari Cakrawala Sebuku - Indonesia
- Coal and Oil Company - UAE
- Australian Commodity Traders Exchange
- Star Paper Mills Limited - India
- Eastern Energy - Thailand
- Simpson Spence & Young - Indonesia
- Straits Asia Resources Limited - Singapore
- Tamil Nadu electricity Board
- South Luzon Thermal Energy Corporation
- Antam Resourcindo - Indonesia
- European Bulk Services B.V. - Netherlands
- Videocon Industries ltd - India
- Ministry of Mines - Canada
- Standard Chartered Bank - UAE
- Port Waratah Coal Services - Australia
- Larsen & Toubro Limited - India
- Independent Power Producers Association of India
- Georgia Ports Authority, United States
- Parry Sugars Refinery, India
- Globalindo Alam Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Riau Bara Harum - Indonesia
- McConnell Dowell - Australia
- Sree Jayajothi Cements Limited - India
- Iligan Light & Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Price Waterhouse Coopers - Russia
- International Coal Ventures Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Renaissance Capital - South Africa
- Borneo Indobara - Indonesia
- OPG Power Generation Pvt Ltd - India
- Rio Tinto Coal - Australia
- Makarim & Taira - Indonesia
- Savvy Resources Ltd - HongKong
- Tata Chemicals Ltd - India
- Indian Energy Exchange, India
- CIMB Investment Bank - Malaysia
- Maheswari Brothers Coal Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ambuja Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- VISA Power Limited - India
- MS Steel International - UAE
- Sarangani Energy Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indika Energy - Indonesia
- Siam City Cement PLC, Thailand
- Miang Besar Coal Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Formosa Plastics Group - Taiwan
- PowerSource Philippines DevCo
- Goldman Sachs - Singapore
- Edison Trading Spa - Italy
- Economic Council, Georgia
- Thiess Contractors Indonesia
- Central Java Power - Indonesia
- Interocean Group of Companies - India
- Petron Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Trasteel International SA, Italy
- Latin American Coal - Colombia
- Malabar Cements Ltd - India
- Carbofer General Trading SA - India
- Metalloyd Limited - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Toyota Tsusho Corporation, Japan
- Kaltim Prima Coal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- TeaM Sual Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Aditya Birla Group - India
- GVK Power & Infra Limited - India
- Siam City Cement - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Central Electricity Authority - India
- Bayan Resources Tbk. - Indonesia
- Posco Energy - South Korea
- India Bulls Power Limited - India
- Lanco Infratech Ltd - India
- Mjunction Services Limited - India
- Kartika Selabumi Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Sical Logistics Limited - India
- Intertek Mineral Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Samtan Co., Ltd - South Korea
- PTC India Limited - India
- PNOC Exploration Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- The State Trading Corporation of India Ltd
- Chamber of Mines of South Africa
- Bhushan Steel Limited - India
- Merrill Lynch Commodities Europe
- Indogreen Group - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Anglo American - United Kingdom
- Holcim Trading Pte Ltd - Singapore
- Orica Mining Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Bukit Makmur.PT - Indonesia
- Grasim Industreis Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Australian Coal Association
- Rashtriya Ispat Nigam Limited - India
- Kobexindo Tractors - Indoneisa
- Barasentosa Lestari - Indonesia
- Baramulti Group, Indonesia
- Essar Steel Hazira Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Alfred C Toepfer International GmbH - Germany
- Bhatia International Limited - India
- Bukit Baiduri Energy - Indonesia
- SMC Global Power, Philippines
- Altura Mining Limited, Indonesia
- Madhucon Powers Ltd - India
- London Commodity Brokers - England
- Oldendorff Carriers - Singapore
- Parliament of New Zealand
- Sinarmas Energy and Mining - Indonesia
- Meralco Power Generation, Philippines
- Therma Luzon, Inc, Philippines
- Mintek Dendrill Indonesia
- Minerals Council of Australia
- Medco Energi Mining Internasional
- Kepco SPC Power Corporation, Philippines
- Energy Development Corp, Philippines
- Eastern Coal Council - USA
- Ministry of Transport, Egypt
- The University of Queensland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karaikal Port Pvt Ltd - India
- Cement Manufacturers Association - India
- CNBM International Corporation - China
- IHS Mccloskey Coal Group - USA
- Global Business Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Mercuria Energy - Indonesia
- Vedanta Resources Plc - India
- Mercator Lines Limited - India
- Jaiprakash Power Ventures ltd
- Billiton Holdings Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Attock Cement Pakistan Limited
- White Energy Company Limited
- Semirara Mining and Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Planning Commission, India
- Kumho Petrochemical, South Korea
- Wood Mackenzie - Singapore
- Manunggal Multi Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sojitz Corporation - Japan
- Aboitiz Power Corporation - Philippines
- Coalindo Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Africa Commodities Group - South Africa
- Bulk Trading Sa - Switzerland
- Directorate Of Revenue Intelligence - India
- ICICI Bank Limited - India
- Xindia Steels Limited - India
- New Zealand Coal & Carbon
- Energy Link Ltd, New Zealand
- Leighton Contractors Pty Ltd - Australia
- GMR Energy Limited - India
- GAC Shipping (India) Pvt Ltd
- Kideco Jaya Agung - Indonesia
- Uttam Galva Steels Limited - India
- Romanian Commodities Exchange
- Salva Resources Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining Corp, Philippines
- Power Finance Corporation Ltd., India
- Electricity Authority, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- The Treasury - Australian Government
- Thai Mozambique Logistica
- Vizag Seaport Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Agrawal Coal Company - India
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Commonwealth Bank - Australia
- Marubeni Corporation - India
- Dalmia Cement Bharat India
- Jorong Barutama Greston.PT - Indonesia
- Orica Australia Pty. Ltd.
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