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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, 08 December 11
HAREDA KRIDA GETS CONTRACT FROM BAYAN - INSIDER STORIES
Insider Stories reported that, coal miner PT Bayan Resources Tbk (BYAN), through its subsidiary dubbed PT Gunungbayan Pratamacoal (GPB), has signed ...
Thursday, 08 December 11
CAPESIZES LIFT DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Capesize vessels yesterday helped lift the dry bulk market which had been falling since the start of the week on lower cargo demand. As a result the ...
Wednesday, 07 December 11
ABM INVESTAMA EYES RP6.3 TRIO REVENUE - INSIDER STORIES
Insider Stories reported that, an energy integrated company PT ABM Investama Tbk is eyeing a 1.5 folds increase in revenue this year from Rp4. ...
Tuesday, 06 December 11
DRY BULK MARKET ENDS RALLY, STARTS WEEK WITH FALL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
After a series of increases which saw the dry bulk market’s benchmark, the Baltic Dry Index (BDI) increasing close to 1,900 points and rates o ...
Monday, 05 December 11
THE DECEMBER HBA FELL 11% FROM ITS PEAK AT US$127.05 PER TON IN FEBRUARY 2011
COALspot.com - Ministry of Energy and Mineral Resources of Indonesia has sets the December 2011 coal reference price at US$ 112.67 per ton US$ 3.98 ...
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- GVK Power & Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Indian Oil Corporation Limited
- Indian Energy Exchange, India
- Georgia Ports Authority, United States
- Oldendorff Carriers - Singapore
- Gujarat Sidhee Cement - India
- Parliament of New Zealand
- Energy Development Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Banpu Public Company Limited - Thailand
- Kepco SPC Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Chamber of Mines of South Africa
- VISA Power Limited - India
- Sical Logistics Limited - India
- Global Coal Blending Company Limited - Australia
- Neyveli Lignite Corporation Ltd, - India
- Power Finance Corporation Ltd., India
- Karaikal Port Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Sakthi Sugars Limited - India
- Sree Jayajothi Cements Limited - India
- Standard Chartered Bank - UAE
- Meenaskhi Energy Private Limited - India
- The State Trading Corporation of India Ltd
- Renaissance Capital - South Africa
- Holcim Trading Pte Ltd - Singapore
- The Treasury - Australian Government
- Intertek Mineral Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- Gujarat Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Sojitz Corporation - Japan
- Manunggal Multi Energi - Indonesia
- Star Paper Mills Limited - India
- Coal and Oil Company - UAE
- OPG Power Generation Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Pendopo Energi Batubara - Indonesia
- Bhushan Steel Limited - India
- Eastern Coal Council - USA
- Central Java Power - Indonesia
- Cement Manufacturers Association - India
- AsiaOL BioFuels Corp., Philippines
- Ambuja Cements Ltd - India
- Ministry of Mines - Canada
- GMR Energy Limited - India
- SMG Consultants - Indonesia
- Meralco Power Generation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Chettinad Cement Corporation Ltd - India
- Timah Investasi Mineral - Indoneisa
- Australian Commodity Traders Exchange
- Grasim Industreis Ltd - India
- Marubeni Corporation - India
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- Savvy Resources Ltd - HongKong
- Kobexindo Tractors - Indoneisa
- Wilmar Investment Holdings
- Mjunction Services Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Bangladesh Power Developement Board
- Commonwealth Bank - Australia
- Kideco Jaya Agung - Indonesia
- Binh Thuan Hamico - Vietnam
- Central Electricity Authority - India
- Bulk Trading Sa - Switzerland
- Madhucon Powers Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Samtan Co., Ltd - South Korea
- Heidelberg Cement - Germany
- Maheswari Brothers Coal Limited - India
- Miang Besar Coal Terminal - Indonesia
- Riau Bara Harum - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Sindya Power Generating Company Private Ltd
- India Bulls Power Limited - India
- Directorate Of Revenue Intelligence - India
- Therma Luzon, Inc, Philippines
- Africa Commodities Group - South Africa
- Ceylon Electricity Board - Sri Lanka
- Coalindo Energy - Indonesia
- Semirara Mining Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Goldman Sachs - Singapore
- Posco Energy - South Korea
- Electricity Authority, New Zealand
- Minerals Council of Australia
- Indogreen Group - Indonesia
- Wood Mackenzie - Singapore
- London Commodity Brokers - England
- San Jose City I Power Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- CIMB Investment Bank - Malaysia
- Independent Power Producers Association of India
- Kalimantan Lumbung Energi - Indonesia
- Indonesian Coal Mining Association
- Larsen & Toubro Limited - India
- Borneo Indobara - Indonesia
- Thai Mozambique Logistica
- Semirara Mining and Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Jaiprakash Power Ventures ltd
- Kartika Selabumi Mining - Indonesia
- Rio Tinto Coal - Australia
- Bharathi Cement Corporation - India
- Planning Commission, India
- PNOC Exploration Corporation - Philippines
- Carbofer General Trading SA - India
- Kumho Petrochemical, South Korea
- Altura Mining Limited, Indonesia
- Interocean Group of Companies - India
- Metalloyd Limited - United Kingdom
- Globalindo Alam Lestari - Indonesia
- Vizag Seaport Private Limited - India
- Parry Sugars Refinery, India
- Ind-Barath Power Infra Limited - India
- PowerSource Philippines DevCo
- Dalmia Cement Bharat India
- Economic Council, Georgia
- Anglo American - United Kingdom
- Barasentosa Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Makmur.PT - Indonesia
- PTC India Limited - India
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- Mintek Dendrill Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- LBH Netherlands Bv - Netherlands
- Lanco Infratech Ltd - India
- Coastal Gujarat Power Limited - India
- Baramulti Group, Indonesia
- European Bulk Services B.V. - Netherlands
- Indo Tambangraya Megah - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Medco Energi Mining Internasional
- Vijayanagar Sugar Pvt Ltd - India
- ICICI Bank Limited - India
- Electricity Generating Authority of Thailand
- Cigading International Bulk Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- Orica Mining Services - Indonesia
- Sarangani Energy Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Agrawal Coal Company - India
- International Coal Ventures Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- New Zealand Coal & Carbon
- Bukit Baiduri Energy - Indonesia
- Tamil Nadu electricity Board
- Bayan Resources Tbk. - Indonesia
- Siam City Cement PLC, Thailand
- Malabar Cements Ltd - India
- Mercator Lines Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Makarim & Taira - Indonesia
- Australian Coal Association
- Bhoruka Overseas - Indonesia
- Energy Link Ltd, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- White Energy Company Limited
- IEA Clean Coal Centre - UK
- Indika Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Aditya Birla Group - India
- GAC Shipping (India) Pvt Ltd
- Xindia Steels Limited - India
- Mercuria Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- McConnell Dowell - Australia
- Global Business Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Bhatia International Limited - India
- Edison Trading Spa - Italy
- Kaltim Prima Coal - Indonesia
- ASAPP Information Group - India
- Toyota Tsusho Corporation, Japan
- Latin American Coal - Colombia
- Trasteel International SA, Italy
- Ministry of Transport, Egypt
- CNBM International Corporation - China
- Petron Corporation, Philippines
- SMC Global Power, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Finance - Indonesia
- TeaM Sual Corporation - Philippines
- Orica Australia Pty. Ltd.
- MS Steel International - UAE
- Singapore Mercantile Exchange
- Port Waratah Coal Services - Australia
- Tata Chemicals Ltd - India
- Siam City Cement - Thailand
- Thiess Contractors Indonesia
- Romanian Commodities Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- The University of Queensland
- Sinarmas Energy and Mining - Indonesia
- Attock Cement Pakistan Limited
- Petrochimia International Co. Ltd.- Taiwan
- Formosa Plastics Group - Taiwan
- Videocon Industries ltd - India
- Merrill Lynch Commodities Europe
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