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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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Saturday, 24 December 11
CHINAS LEVEL OF GROWTH TO DETERMINE COURSE OF DRY BULK MARKET IN 2012 SAYS SHIPBROKER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest report, shipbroker Intermodal attempted to find a silver lining in the tough year that was 2011, as well as what one could expect from ...
Friday, 23 December 11
SPOT PACIFIC CAPESIZE VESSELS HAVE COMMANDED HIGH PREMIUMS - FEARNLEYS
Handy
Rates in the Atlantic kept stable from last week, with a touch of negativity closer to the end. Less spot cargoes seen, and owners are ...
Friday, 23 December 11
CONTENTIOUS ISSUES IN CONTRACT RENEGOTIATION - THE JAKARTA POST
The government has been renegotiating mining contracts, especially those 30-40 years old, with almost all mining companies, including PT Freeport In ...
Friday, 23 December 11
LANCO JOINS HANDS WITH BUKIT ASAM FOR INDONESIAN POWER PROJECT
COALspot.com - PT Tambang Batubara Bukit Asam, Indonesia's state owned coal miner and Indian based Lanco Infratech Ltd plans to build steam power p ...
Thursday, 22 December 11
RI WILL NOT PLAY CATCH-UP WITH GLOBAL COAL DEMAND - THE JAKARTA POST
The Jakarta Post reported that, the International Energy Agency (IEA) has predicted in its Coal Market Report 2011 that over the next five years, gl ...
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- Sakthi Sugars Limited - India
- The University of Queensland
- Madhucon Powers Ltd - India
- Anglo American - United Kingdom
- Vedanta Resources Plc - India
- TeaM Sual Corporation - Philippines
- Uttam Galva Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Latin American Coal - Colombia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Videocon Industries ltd - India
- Makarim & Taira - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Renaissance Capital - South Africa
- Toyota Tsusho Corporation, Japan
- Goldman Sachs - Singapore
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- Indian Oil Corporation Limited
- Kepco SPC Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Larsen & Toubro Limited - India
- San Jose City I Power Corp, Philippines
- Medco Energi Mining Internasional
- Semirara Mining Corp, Philippines
- VISA Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Lanco Infratech Ltd - India
- Altura Mining Limited, Indonesia
- Ambuja Cements Ltd - India
- Thai Mozambique Logistica
- Orica Australia Pty. Ltd.
- Krishnapatnam Port Company Ltd. - India
- New Zealand Coal & Carbon
- PTC India Limited - India
- Australian Commodity Traders Exchange
- GN Power Mariveles Coal Plant, Philippines
- Central Electricity Authority - India
- IHS Mccloskey Coal Group - USA
- Asmin Koalindo Tuhup - Indonesia
- Parliament of New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Romanian Commodities Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bharathi Cement Corporation - India
- Bulk Trading Sa - Switzerland
- London Commodity Brokers - England
- SMG Consultants - Indonesia
- Marubeni Corporation - India
- Salva Resources Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- Thiess Contractors Indonesia
- Savvy Resources Ltd - HongKong
- Bhatia International Limited - India
- Energy Development Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Georgia Ports Authority, United States
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- Oldendorff Carriers - Singapore
- Maheswari Brothers Coal Limited - India
- Xindia Steels Limited - India
- Planning Commission, India
- Tamil Nadu electricity Board
- Electricity Authority, New Zealand
- GVK Power & Infra Limited - India
- Economic Council, Georgia
- Commonwealth Bank - Australia
- Baramulti Group, Indonesia
- Intertek Mineral Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Neyveli Lignite Corporation Ltd, - India
- AsiaOL BioFuels Corp., Philippines
- Sinarmas Energy and Mining - Indonesia
- Ministry of Transport, Egypt
- Posco Energy - South Korea
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- Ind-Barath Power Infra Limited - India
- Straits Asia Resources Limited - Singapore
- Manunggal Multi Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Petron Corporation, Philippines
- Malabar Cements Ltd - India
- Independent Power Producers Association of India
- MS Steel International - UAE
- Kartika Selabumi Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- The Treasury - Australian Government
- Sree Jayajothi Cements Limited - India
- Carbofer General Trading SA - India
- Price Waterhouse Coopers - Russia
- Minerals Council of Australia
- Bukit Makmur.PT - Indonesia
- Mercuria Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Meralco Power Generation, Philippines
- Formosa Plastics Group - Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Therma Luzon, Inc, Philippines
- Grasim Industreis Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Vizag Seaport Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- McConnell Dowell - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Aditya Birla Group - India
- Dalmia Cement Bharat India
- Interocean Group of Companies - India
- Gujarat Sidhee Cement - India
- Cement Manufacturers Association - India
- Merrill Lynch Commodities Europe
- Bukit Baiduri Energy - Indonesia
- Standard Chartered Bank - UAE
- Binh Thuan Hamico - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Mercator Lines Limited - India
- Bhushan Steel Limited - India
- International Coal Ventures Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Mjunction Services Limited - India
- Kumho Petrochemical, South Korea
- Agrawal Coal Company - India
- Essar Steel Hazira Ltd - India
- Sical Logistics Limited - India
- Rio Tinto Coal - Australia
- Kideco Jaya Agung - Indonesia
- Africa Commodities Group - South Africa
- Orica Mining Services - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bangladesh Power Developement Board
- Ceylon Electricity Board - Sri Lanka
- Directorate Of Revenue Intelligence - India
- Sojitz Corporation - Japan
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Chamber of Mines of South Africa
- Port Waratah Coal Services - Australia
- European Bulk Services B.V. - Netherlands
- Timah Investasi Mineral - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Bhoruka Overseas - Indonesia
- Heidelberg Cement - Germany
- Bayan Resources Tbk. - Indonesia
- GAC Shipping (India) Pvt Ltd
- Metalloyd Limited - United Kingdom
- Indian Energy Exchange, India
- Indogreen Group - Indonesia
- Barasentosa Lestari - Indonesia
- Siam City Cement - Thailand
- Sindya Power Generating Company Private Ltd
- Riau Bara Harum - Indonesia
- ICICI Bank Limited - India
- Ministry of Finance - Indonesia
- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- Parry Sugars Refinery, India
- Cigading International Bulk Terminal - Indonesia
- Trasteel International SA, Italy
- Star Paper Mills Limited - India
- Simpson Spence & Young - Indonesia
- Deloitte Consulting - India
- Australian Coal Association
- Billiton Holdings Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Siam City Cement PLC, Thailand
- Semirara Mining and Power Corporation, Philippines
- Central Java Power - Indonesia
- CIMB Investment Bank - Malaysia
- The State Trading Corporation of India Ltd
- South Luzon Thermal Energy Corporation
- GMR Energy Limited - India
- Mintek Dendrill Indonesia
- Energy Link Ltd, New Zealand
- White Energy Company Limited
- Global Coal Blending Company Limited - Australia
- Antam Resourcindo - Indonesia
- Eastern Coal Council - USA
- ASAPP Information Group - India
- Coalindo Energy - Indonesia
- Tata Chemicals Ltd - India
- Meenaskhi Energy Private Limited - India
- PowerSource Philippines DevCo
- Attock Cement Pakistan Limited
- CNBM International Corporation - China
- Singapore Mercantile Exchange
- Eastern Energy - Thailand
- Samtan Co., Ltd - South Korea
- Wilmar Investment Holdings
- Petrochimia International Co. Ltd.- Taiwan
- Wood Mackenzie - Singapore
- Power Finance Corporation Ltd., India
- Bahari Cakrawala Sebuku - Indonesia
- Kobexindo Tractors - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Electricity Generating Authority of Thailand
- Alfred C Toepfer International GmbH - Germany
- Maharashtra Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- Global Business Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Edison Trading Spa - Italy
- Indika Energy - Indonesia
- Coal and Oil Company - UAE
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