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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, 12 December 11
DRY BULK MARKET LOOKING FOR BALANCE AS WE ENTER 2012 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
During the past few months, freight rates for dry bulk carriers, especially Capesizes have increased significantly, providing ship owners with a muc ...
Sunday, 11 December 11
THE PANAMAX INDEX ENDED ON POSITIVE DIRECTION - VISTAAR
COALspot.com - The BDI and Cape index continued the upward trend this week also with BDI up by 3.00 pct closing at 1,922 points and Cape index up by ...
Saturday, 10 December 11
MAHAKAM RIVER RESUMES COAL TRANSPORTATION
COALspot.com - East Kalimantan local government has resumed limited coal barging through Mahakam River after two weeks of suspension following the c ...
Friday, 09 December 11
DRY BULK MARKET REBOUNDS ON HEALTHIER DEMAND OUTLOOK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market edged forward yesterday, at the highest rate of the past couple of weeks, as a result of stonger iron ore demand, backed by lowe ...
Thursday, 08 December 11
INDIA MAY SEE 41% ANNUAL GROWTH OF ITS COAL DEMAND DURING THE NEXT 5 YEARS - ICAP SHIPPING
India’s Ministry of Coal expects that India’s coal demand may face an annual 41% rise during the next 5 years, while its coal deficit is ...
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- Eastern Coal Council - USA
- Kumho Petrochemical, South Korea
- Xindia Steels Limited - India
- Mintek Dendrill Indonesia
- Larsen & Toubro Limited - India
- Holcim Trading Pte Ltd - Singapore
- Bukit Makmur.PT - Indonesia
- San Jose City I Power Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Maharashtra Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Bharathi Cement Corporation - India
- Energy Development Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Lanco Infratech Ltd - India
- Iligan Light & Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Deloitte Consulting - India
- Latin American Coal - Colombia
- Meralco Power Generation, Philippines
- Australian Commodity Traders Exchange
- Billiton Holdings Pty Ltd - Australia
- Parliament of New Zealand
- Alfred C Toepfer International GmbH - Germany
- Electricity Authority, New Zealand
- Bhushan Steel Limited - India
- Attock Cement Pakistan Limited
- Gujarat Sidhee Cement - India
- Cement Manufacturers Association - India
- Indika Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Videocon Industries ltd - India
- Indian Oil Corporation Limited
- Indogreen Group - Indonesia
- GAC Shipping (India) Pvt Ltd
- Asmin Koalindo Tuhup - Indonesia
- TeaM Sual Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Sical Logistics Limited - India
- Renaissance Capital - South Africa
- Intertek Mineral Services - Indonesia
- Coal and Oil Company - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Leighton Contractors Pty Ltd - Australia
- Edison Trading Spa - Italy
- Commonwealth Bank - Australia
- PetroVietnam Power Coal Import and Supply Company
- Bangladesh Power Developement Board
- New Zealand Coal & Carbon
- Posco Energy - South Korea
- Aboitiz Power Corporation - Philippines
- Eastern Energy - Thailand
- Borneo Indobara - Indonesia
- Kepco SPC Power Corporation, Philippines
- White Energy Company Limited
- Trasteel International SA, Italy
- The Treasury - Australian Government
- Power Finance Corporation Ltd., India
- Karaikal Port Pvt Ltd - India
- Wilmar Investment Holdings
- AsiaOL BioFuels Corp., Philippines
- Parry Sugars Refinery, India
- Kohat Cement Company Ltd. - Pakistan
- Kobexindo Tractors - Indoneisa
- Binh Thuan Hamico - Vietnam
- Uttam Galva Steels Limited - India
- Global Business Power Corporation, Philippines
- Australian Coal Association
- Electricity Generating Authority of Thailand
- Star Paper Mills Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- MS Steel International - UAE
- Bukit Baiduri Energy - Indonesia
- Standard Chartered Bank - UAE
- Tamil Nadu electricity Board
- Altura Mining Limited, Indonesia
- Jaiprakash Power Ventures ltd
- Central Java Power - Indonesia
- Petron Corporation, Philippines
- Carbofer General Trading SA - India
- SN Aboitiz Power Inc, Philippines
- Ambuja Cements Ltd - India
- Aditya Birla Group - India
- Semirara Mining and Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Makarim & Taira - Indonesia
- McConnell Dowell - Australia
- Price Waterhouse Coopers - Russia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Neyveli Lignite Corporation Ltd, - India
- Central Electricity Authority - India
- Romanian Commodities Exchange
- Indonesian Coal Mining Association
- Sojitz Corporation - Japan
- Tata Chemicals Ltd - India
- Ministry of Transport, Egypt
- Singapore Mercantile Exchange
- Goldman Sachs - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ICICI Bank Limited - India
- Mjunction Services Limited - India
- Port Waratah Coal Services - Australia
- London Commodity Brokers - England
- Riau Bara Harum - Indonesia
- Simpson Spence & Young - Indonesia
- Baramulti Group, Indonesia
- International Coal Ventures Pvt Ltd - India
- Indian Energy Exchange, India
- Formosa Plastics Group - Taiwan
- Salva Resources Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Thiess Contractors Indonesia
- CIMB Investment Bank - Malaysia
- Kaltim Prima Coal - Indonesia
- Barasentosa Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Interocean Group of Companies - India
- Sakthi Sugars Limited - India
- Bayan Resources Tbk. - Indonesia
- Madhucon Powers Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Samtan Co., Ltd - South Korea
- Malabar Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Medco Energi Mining Internasional
- Jorong Barutama Greston.PT - Indonesia
- Grasim Industreis Ltd - India
- The State Trading Corporation of India Ltd
- PTC India Limited - India
- Dalmia Cement Bharat India
- Sree Jayajothi Cements Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Orica Mining Services - Indonesia
- Marubeni Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhoruka Overseas - Indonesia
- Bulk Trading Sa - Switzerland
- Bukit Asam (Persero) Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- VISA Power Limited - India
- PNOC Exploration Corporation - Philippines
- Mercuria Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Siam City Cement PLC, Thailand
- IHS Mccloskey Coal Group - USA
- Savvy Resources Ltd - HongKong
- OPG Power Generation Pvt Ltd - India
- Thai Mozambique Logistica
- Minerals Council of Australia
- Anglo American - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Miang Besar Coal Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Heidelberg Cement - Germany
- Bhatia International Limited - India
- Ministry of Mines - Canada
- Merrill Lynch Commodities Europe
- ASAPP Information Group - India
- Energy Link Ltd, New Zealand
- IEA Clean Coal Centre - UK
- Kapuas Tunggal Persada - Indonesia
- Ind-Barath Power Infra Limited - India
- Siam City Cement - Thailand
- Jindal Steel & Power Ltd - India
- Maheswari Brothers Coal Limited - India
- Wood Mackenzie - Singapore
- Metalloyd Limited - United Kingdom
- Globalindo Alam Lestari - Indonesia
- Africa Commodities Group - South Africa
- Coastal Gujarat Power Limited - India
- Sarangani Energy Corporation, Philippines
- Semirara Mining Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- SMC Global Power, Philippines
- India Bulls Power Limited - India
- Sindya Power Generating Company Private Ltd
- Pendopo Energi Batubara - Indonesia
- Meenaskhi Energy Private Limited - India
- LBH Netherlands Bv - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- European Bulk Services B.V. - Netherlands
- The University of Queensland
- Oldendorff Carriers - Singapore
- Cigading International Bulk Terminal - Indonesia
- PowerSource Philippines DevCo
- Timah Investasi Mineral - Indoneisa
- Manunggal Multi Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Toyota Tsusho Corporation, Japan
- Planning Commission, India
- Mercator Lines Limited - India
- Chamber of Mines of South Africa
- Ministry of Finance - Indonesia
- CNBM International Corporation - China
- GVK Power & Infra Limited - India
- Antam Resourcindo - Indonesia
- Coalindo Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- GMR Energy Limited - India
- Orica Australia Pty. Ltd.
- Rio Tinto Coal - Australia
- Economic Council, Georgia
- Karbindo Abesyapradhi - Indoneisa
- Essar Steel Hazira Ltd - India
- Agrawal Coal Company - India
- Georgia Ports Authority, United States
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- SMG Consultants - Indonesia
- Vizag Seaport Private Limited - India
- Vedanta Resources Plc - India
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