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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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- Bank of Tokyo Mitsubishi UFJ Ltd
- Savvy Resources Ltd - HongKong
- Vijayanagar Sugar Pvt Ltd - India
- Indogreen Group - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sical Logistics Limited - India
- Chamber of Mines of South Africa
- Economic Council, Georgia
- Orica Mining Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Wood Mackenzie - Singapore
- New Zealand Coal & Carbon
- Iligan Light & Power Inc, Philippines
- Vizag Seaport Private Limited - India
- PNOC Exploration Corporation - Philippines
- Meralco Power Generation, Philippines
- International Coal Ventures Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Kumho Petrochemical, South Korea
- Sindya Power Generating Company Private Ltd
- Maharashtra Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Indonesian Coal Mining Association
- Australian Commodity Traders Exchange
- Tamil Nadu electricity Board
- Indika Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Antam Resourcindo - Indonesia
- Independent Power Producers Association of India
- Bharathi Cement Corporation - India
- Goldman Sachs - Singapore
- Makarim & Taira - Indonesia
- South Luzon Thermal Energy Corporation
- Eastern Energy - Thailand
- Toyota Tsusho Corporation, Japan
- Semirara Mining Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Gujarat Sidhee Cement - India
- Xindia Steels Limited - India
- Indian Energy Exchange, India
- Uttam Galva Steels Limited - India
- Metalloyd Limited - United Kingdom
- Kideco Jaya Agung - Indonesia
- Meenaskhi Energy Private Limited - India
- Eastern Coal Council - USA
- Edison Trading Spa - Italy
- Mercator Lines Limited - India
- Binh Thuan Hamico - Vietnam
- Siam City Cement - Thailand
- The University of Queensland
- Bulk Trading Sa - Switzerland
- Petron Corporation, Philippines
- Riau Bara Harum - Indonesia
- Bukit Makmur.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Agrawal Coal Company - India
- Borneo Indobara - Indonesia
- OPG Power Generation Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- San Jose City I Power Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- VISA Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- ASAPP Information Group - India
- Power Finance Corporation Ltd., India
- Oldendorff Carriers - Singapore
- Bhoruka Overseas - Indonesia
- GVK Power & Infra Limited - India
- Planning Commission, India
- Leighton Contractors Pty Ltd - Australia
- Sojitz Corporation - Japan
- Australian Coal Association
- Bhatia International Limited - India
- Ministry of Mines - Canada
- Miang Besar Coal Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- LBH Netherlands Bv - Netherlands
- Simpson Spence & Young - Indonesia
- Indian Oil Corporation Limited
- Directorate General of MIneral and Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Jindal Steel & Power Ltd - India
- Trasteel International SA, Italy
- Kalimantan Lumbung Energi - Indonesia
- Anglo American - United Kingdom
- Gujarat Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- GMR Energy Limited - India
- Vedanta Resources Plc - India
- Banpu Public Company Limited - Thailand
- Ministry of Transport, Egypt
- Timah Investasi Mineral - Indoneisa
- Baramulti Group, Indonesia
- Merrill Lynch Commodities Europe
- PetroVietnam Power Coal Import and Supply Company
- Parry Sugars Refinery, India
- Star Paper Mills Limited - India
- Rio Tinto Coal - Australia
- Orica Australia Pty. Ltd.
- McConnell Dowell - Australia
- Cigading International Bulk Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Mjunction Services Limited - India
- Africa Commodities Group - South Africa
- Bukit Baiduri Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Electricity Authority, New Zealand
- Videocon Industries ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Cement Manufacturers Association - India
- Coastal Gujarat Power Limited - India
- Romanian Commodities Exchange
- Electricity Generating Authority of Thailand
- TeaM Sual Corporation - Philippines
- Thai Mozambique Logistica
- The Treasury - Australian Government
- Minerals Council of Australia
- Mintek Dendrill Indonesia
- IEA Clean Coal Centre - UK
- Georgia Ports Authority, United States
- Chettinad Cement Corporation Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Attock Cement Pakistan Limited
- CNBM International Corporation - China
- ICICI Bank Limited - India
- Wilmar Investment Holdings
- Commonwealth Bank - Australia
- Sinarmas Energy and Mining - Indonesia
- PowerSource Philippines DevCo
- Mercuria Energy - Indonesia
- Central Java Power - Indonesia
- CIMB Investment Bank - Malaysia
- Renaissance Capital - South Africa
- Lanco Infratech Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Tata Chemicals Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Heidelberg Cement - Germany
- White Energy Company Limited
- Sakthi Sugars Limited - India
- Holcim Trading Pte Ltd - Singapore
- Bangladesh Power Developement Board
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhushan Steel Limited - India
- Formosa Plastics Group - Taiwan
- The State Trading Corporation of India Ltd
- London Commodity Brokers - England
- Siam City Cement PLC, Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thiess Contractors Indonesia
- MS Steel International - UAE
- Global Green Power PLC Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Aditya Birla Group - India
- Singapore Mercantile Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- Ministry of Finance - Indonesia
- Marubeni Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- SMC Global Power, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Indo Tambangraya Megah - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Interocean Group of Companies - India
- Energy Development Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Deloitte Consulting - India
- Rashtriya Ispat Nigam Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Port Waratah Coal Services - Australia
- Carbofer General Trading SA - India
- Grasim Industreis Ltd - India
- India Bulls Power Limited - India
- Kobexindo Tractors - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Parliament of New Zealand
- PTC India Limited - India
- Medco Energi Mining Internasional
- Kaltim Prima Coal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Price Waterhouse Coopers - Russia
- Coalindo Energy - Indonesia
- Larsen & Toubro Limited - India
- IHS Mccloskey Coal Group - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Latin American Coal - Colombia
- SN Aboitiz Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Central Electricity Authority - India
- SMG Consultants - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Manunggal Multi Energi - Indonesia
- Therma Luzon, Inc, Philippines
- Jaiprakash Power Ventures ltd
- Energy Link Ltd, New Zealand
- Barasentosa Lestari - Indonesia
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- Global Coal Blending Company Limited - Australia
- Posco Energy - South Korea
- Coal and Oil Company - UAE
- Altura Mining Limited, Indonesia
- Dalmia Cement Bharat India
- Neyveli Lignite Corporation Ltd, - India
- Intertek Mineral Services - Indonesia
- Straits Asia Resources Limited - Singapore
- Kapuas Tunggal Persada - Indonesia
- Ambuja Cements Ltd - India
- Salva Resources Pvt Ltd - India
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