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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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Monday, 02 January 12
THE PROMISE OF INDIA: A BRIEF INTERRUPTION? - CLARKSONS / HELLENIC SHIPPING
Future growth in Indian seaborne coal imports has sometimes been considered as one of the largest potential upsides in the currently oversupplied dr ...
Sunday, 01 January 12
IS INDIA FOLLOWING INDONESIA TO STANDARDIZE COAL PRICES TO GET MAXIMUM BENEFITS?
COALspot.com - Coal India limited, an Indian state owned and world largest coal producer has introduced gross calorific value (GCV) based pricing me ...
Saturday, 31 December 11
GLOBALCOAL NEWC INDEX SURGED 2.32 PERCENT
COALspot.com - globalCOAL index in Newcastle Port, benchmark for Asian market, ended substantially higher, surged 2.32 percent to US$115.47 per ...
Saturday, 31 December 11
BORNEO LUMBUNG TO BUY BUMI STAKE, SWAP CEO - THE JAKARTA GLOBE
The Jakarta Globe, one of the leading english news paper in Indonesia reported yesterday, shareholders of Indonesian coking coal miner Borneo Lumbun ...
Friday, 30 December 11
CENTRAL GOVERNMENT SHOULD ISSUE PERMITS - THE JAKARTA POST
The Jakarta Post reported that, business associations from both the palm oil and mining sectors have suggested that the central government should re ...
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- Globalindo Alam Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- European Bulk Services B.V. - Netherlands
- Australian Coal Association
- Kobexindo Tractors - Indoneisa
- Wilmar Investment Holdings
- IHS Mccloskey Coal Group - USA
- Banpu Public Company Limited - Thailand
- Essar Steel Hazira Ltd - India
- Rashtriya Ispat Nigam Limited - India
- SMC Global Power, Philippines
- Anglo American - United Kingdom
- Sarangani Energy Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- ASAPP Information Group - India
- Intertek Mineral Services - Indonesia
- South Luzon Thermal Energy Corporation
- Pipit Mutiara Jaya. PT, Indonesia
- Tamil Nadu electricity Board
- Indo Tambangraya Megah - Indonesia
- Meralco Power Generation, Philippines
- Therma Luzon, Inc, Philippines
- Larsen & Toubro Limited - India
- Timah Investasi Mineral - Indoneisa
- Ind-Barath Power Infra Limited - India
- Commonwealth Bank - Australia
- Tata Chemicals Ltd - India
- The University of Queensland
- Carbofer General Trading SA - India
- Grasim Industreis Ltd - India
- SMG Consultants - Indonesia
- Petron Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- PowerSource Philippines DevCo
- Indian Oil Corporation Limited
- GN Power Mariveles Coal Plant, Philippines
- Bukit Makmur.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Videocon Industries ltd - India
- Vedanta Resources Plc - India
- Asmin Koalindo Tuhup - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Latin American Coal - Colombia
- GVK Power & Infra Limited - India
- New Zealand Coal & Carbon
- PetroVietnam Power Coal Import and Supply Company
- Bharathi Cement Corporation - India
- Interocean Group of Companies - India
- CIMB Investment Bank - Malaysia
- Uttam Galva Steels Limited - India
- Romanian Commodities Exchange
- Agrawal Coal Company - India
- Rio Tinto Coal - Australia
- Energy Development Corp, Philippines
- Coastal Gujarat Power Limited - India
- Semirara Mining Corp, Philippines
- Oldendorff Carriers - Singapore
- Goldman Sachs - Singapore
- Minerals Council of Australia
- Ministry of Transport, Egypt
- Energy Link Ltd, New Zealand
- Leighton Contractors Pty Ltd - Australia
- Thiess Contractors Indonesia
- Parliament of New Zealand
- Star Paper Mills Limited - India
- Chamber of Mines of South Africa
- Kartika Selabumi Mining - Indonesia
- Kumho Petrochemical, South Korea
- PTC India Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Port Waratah Coal Services - Australia
- Wood Mackenzie - Singapore
- Bukit Baiduri Energy - Indonesia
- White Energy Company Limited
- Marubeni Corporation - India
- VISA Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Ambuja Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Orica Australia Pty. Ltd.
- CNBM International Corporation - China
- Ceylon Electricity Board - Sri Lanka
- Kalimantan Lumbung Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Bhoruka Overseas - Indonesia
- McConnell Dowell - Australia
- Electricity Generating Authority of Thailand
- Power Finance Corporation Ltd., India
- Australian Commodity Traders Exchange
- Siam City Cement PLC, Thailand
- Madhucon Powers Ltd - India
- Bulk Trading Sa - Switzerland
- Eastern Energy - Thailand
- PNOC Exploration Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Sojitz Corporation - Japan
- London Commodity Brokers - England
- Meenaskhi Energy Private Limited - India
- Altura Mining Limited, Indonesia
- Electricity Authority, New Zealand
- Price Waterhouse Coopers - Russia
- Indogreen Group - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Malabar Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Central Java Power - Indonesia
- Indonesian Coal Mining Association
- Heidelberg Cement - Germany
- The State Trading Corporation of India Ltd
- Jaiprakash Power Ventures ltd
- Billiton Holdings Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- Economic Council, Georgia
- Bangladesh Power Developement Board
- Renaissance Capital - South Africa
- Trasteel International SA, Italy
- Siam City Cement - Thailand
- Merrill Lynch Commodities Europe
- Maheswari Brothers Coal Limited - India
- Holcim Trading Pte Ltd - Singapore
- Orica Mining Services - Indonesia
- India Bulls Power Limited - India
- Binh Thuan Hamico - Vietnam
- GAC Shipping (India) Pvt Ltd
- Metalloyd Limited - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Attock Cement Pakistan Limited
- Cigading International Bulk Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Medco Energi Mining Internasional
- Planning Commission, India
- Coalindo Energy - Indonesia
- Makarim & Taira - Indonesia
- Global Green Power PLC Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Toyota Tsusho Corporation, Japan
- Alfred C Toepfer International GmbH - Germany
- Gujarat Sidhee Cement - India
- Global Business Power Corporation, Philippines
- Africa Commodities Group - South Africa
- OPG Power Generation Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Neyveli Lignite Corporation Ltd, - India
- Aditya Birla Group - India
- GMR Energy Limited - India
- Barasentosa Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Xindia Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Bhushan Steel Limited - India
- Simpson Spence & Young - Indonesia
- Ministry of Mines - Canada
- Georgia Ports Authority, United States
- Cement Manufacturers Association - India
- Indika Energy - Indonesia
- Posco Energy - South Korea
- ICICI Bank Limited - India
- Ministry of Finance - Indonesia
- Riau Bara Harum - Indonesia
- Manunggal Multi Energi - Indonesia
- MS Steel International - UAE
- Pendopo Energi Batubara - Indonesia
- Eastern Coal Council - USA
- Mintek Dendrill Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Singapore Mercantile Exchange
- Bhatia International Limited - India
- Kideco Jaya Agung - Indonesia
- Deloitte Consulting - India
- Parry Sugars Refinery, India
- Maharashtra Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- Sree Jayajothi Cements Limited - India
- Directorate Of Revenue Intelligence - India
- Antam Resourcindo - Indonesia
- IEA Clean Coal Centre - UK
- Semirara Mining and Power Corporation, Philippines
- Thai Mozambique Logistica
- Aboitiz Power Corporation - Philippines
- Coal and Oil Company - UAE
- The Treasury - Australian Government
- Vijayanagar Sugar Pvt Ltd - India
- Mercuria Energy - Indonesia
- Borneo Indobara - Indonesia
- Jindal Steel & Power Ltd - India
- Sical Logistics Limited - India
- Dalmia Cement Bharat India
- Straits Asia Resources Limited - Singapore
- Gujarat Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Indian Energy Exchange, India
- Central Electricity Authority - India
- Samtan Co., Ltd - South Korea
- International Coal Ventures Pvt Ltd - India
- Mjunction Services Limited - India
- Iligan Light & Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- San Jose City I Power Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chettinad Cement Corporation Ltd - India
- Mercator Lines Limited - India
- Sakthi Sugars Limited - India
- Independent Power Producers Association of India
- Standard Chartered Bank - UAE
- Edison Trading Spa - Italy
- Lanco Infratech Ltd - India
- Formosa Plastics Group - Taiwan
- Salva Resources Pvt Ltd - India
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