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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, 05 December 11
SGX LAUNCHED IHS MCCLOSKEY/XINHUA INFOLINK OTC CFR SOUTH CHINA COAL CONTRACT TODAY
COALspot.com - In order to meet the demand of the coal industry for an effective coal hedging tool with counterparty credit risk mitigation facility ...
Monday, 05 December 11
DRY BULK RATES LOOKING TO EXTEND GAINS THIS WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Capesize dry bulk carrier owners have had a great week, with rates rising for six straight sessions (including the end of the week before that). As ...
Sunday, 04 December 11
SUPRAMAX TRIPS VIA INDONESIA WERE REPORTED AROUND $ 7500 - 8000 PD
COALspot.com - The BDI and Cape index recovered this week. The BDI was up by 3.26 pct and Cape index saw a big jump and closed at 3409 points (up by ...
Saturday, 03 December 11
BORNEO TO SPEND US$600 MIO CAPEX - INSIDER STORIES
Insider Stories reported that, Coking coal miner PT Borneo Lumbung Energi & Metal Tbk (BORN) plans to spend US$600 million capital expenditure ( ...
Friday, 02 December 11
DRY BULK CARRIERS BACK IN THE SPOTLIGHT AS MARKET SPEEDS UP - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the tanker and container markets suffering dearly, it seems that the tide has once again turned in favor of the dry bulk carriers, despite over ...
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- South Luzon Thermal Energy Corporation
- White Energy Company Limited
- Electricity Authority, New Zealand
- Coalindo Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- SMC Global Power, Philippines
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- Jaiprakash Power Ventures ltd
- McConnell Dowell - Australia
- Kepco SPC Power Corporation, Philippines
- Tamil Nadu electricity Board
- Cigading International Bulk Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- New Zealand Coal & Carbon
- The Treasury - Australian Government
- CIMB Investment Bank - Malaysia
- Mercuria Energy - Indonesia
- Makarim & Taira - Indonesia
- Binh Thuan Hamico - Vietnam
- Bangladesh Power Developement Board
- Rio Tinto Coal - Australia
- Vizag Seaport Private Limited - India
- The University of Queensland
- Antam Resourcindo - Indonesia
- Eastern Energy - Thailand
- Bharathi Cement Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Central Electricity Authority - India
- Energy Development Corp, Philippines
- IEA Clean Coal Centre - UK
- Interocean Group of Companies - India
- Timah Investasi Mineral - Indoneisa
- Romanian Commodities Exchange
- Standard Chartered Bank - UAE
- Mintek Dendrill Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement - Thailand
- Petron Corporation, Philippines
- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- Videocon Industries ltd - India
- Australian Coal Association
- Global Green Power PLC Corporation, Philippines
- Madhucon Powers Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Trasteel International SA, Italy
- Asmin Koalindo Tuhup - Indonesia
- MS Steel International - UAE
- Sical Logistics Limited - India
- Aboitiz Power Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Parry Sugars Refinery, India
- Independent Power Producers Association of India
- LBH Netherlands Bv - Netherlands
- CNBM International Corporation - China
- Kalimantan Lumbung Energi - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhushan Steel Limited - India
- Orica Australia Pty. Ltd.
- GMR Energy Limited - India
- International Coal Ventures Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Indian Oil Corporation Limited
- Wilmar Investment Holdings
- Leighton Contractors Pty Ltd - Australia
- Parliament of New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Pendopo Energi Batubara - Indonesia
- Kobexindo Tractors - Indoneisa
- Grasim Industreis Ltd - India
- Kartika Selabumi Mining - Indonesia
- Commonwealth Bank - Australia
- Krishnapatnam Port Company Ltd. - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhoruka Overseas - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kideco Jaya Agung - Indonesia
- Globalindo Alam Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Orica Mining Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Georgia Ports Authority, United States
- Deloitte Consulting - India
- Gujarat Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Semirara Mining and Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Coal and Oil Company - UAE
- ASAPP Information Group - India
- Uttam Galva Steels Limited - India
- Meenaskhi Energy Private Limited - India
- SN Aboitiz Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Essar Steel Hazira Ltd - India
- Salva Resources Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Africa Commodities Group - South Africa
- TeaM Sual Corporation - Philippines
- Siam City Cement PLC, Thailand
- Sakthi Sugars Limited - India
- SMG Consultants - Indonesia
- Energy Link Ltd, New Zealand
- Directorate Of Revenue Intelligence - India
- Chamber of Mines of South Africa
- Australian Commodity Traders Exchange
- Borneo Indobara - Indonesia
- Malabar Cements Ltd - India
- Dalmia Cement Bharat India
- Bhatia International Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Merrill Lynch Commodities Europe
- Offshore Bulk Terminal Pte Ltd, Singapore
- Heidelberg Cement - Germany
- Miang Besar Coal Terminal - Indonesia
- Ministry of Finance - Indonesia
- Anglo American - United Kingdom
- Meralco Power Generation, Philippines
- PTC India Limited - India
- Toyota Tsusho Corporation, Japan
- Rashtriya Ispat Nigam Limited - India
- Xindia Steels Limited - India
- Planning Commission, India
- PowerSource Philippines DevCo
- Metalloyd Limited - United Kingdom
- Central Java Power - Indonesia
- Intertek Mineral Services - Indonesia
- Formosa Plastics Group - Taiwan
- Wood Mackenzie - Singapore
- Electricity Generating Authority of Thailand
- Mercator Lines Limited - India
- Maharashtra Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Aditya Birla Group - India
- Price Waterhouse Coopers - Russia
- Jorong Barutama Greston.PT - Indonesia
- Agrawal Coal Company - India
- Simpson Spence & Young - Indonesia
- Thai Mozambique Logistica
- Neyveli Lignite Corporation Ltd, - India
- Ceylon Electricity Board - Sri Lanka
- Minerals Council of Australia
- Oldendorff Carriers - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Larsen & Toubro Limited - India
- The State Trading Corporation of India Ltd
- Medco Energi Mining Internasional
- Indika Energy - Indonesia
- Star Paper Mills Limited - India
- Bayan Resources Tbk. - Indonesia
- Lanco Infratech Ltd - India
- San Jose City I Power Corp, Philippines
- Vedanta Resources Plc - India
- Mjunction Services Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ambuja Cements Ltd - India
- Gujarat Sidhee Cement - India
- Sindya Power Generating Company Private Ltd
- Sinarmas Energy and Mining - Indonesia
- Renaissance Capital - South Africa
- Sojitz Corporation - Japan
- European Bulk Services B.V. - Netherlands
- Singapore Mercantile Exchange
- Indian Energy Exchange, India
- Ind-Barath Power Infra Limited - India
- Edison Trading Spa - Italy
- GVK Power & Infra Limited - India
- Tata Chemicals Ltd - India
- Jindal Steel & Power Ltd - India
- Marubeni Corporation - India
- Altura Mining Limited, Indonesia
- London Commodity Brokers - England
- Karbindo Abesyapradhi - Indoneisa
- Thiess Contractors Indonesia
- Barasentosa Lestari - Indonesia
- Carbofer General Trading SA - India
- Attock Cement Pakistan Limited
- Cement Manufacturers Association - India
- Bukit Makmur.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Power Finance Corporation Ltd., India
- Port Waratah Coal Services - Australia
- Bulk Trading Sa - Switzerland
- Baramulti Group, Indonesia
- Samtan Co., Ltd - South Korea
- Alfred C Toepfer International GmbH - Germany
- Petrochimia International Co. Ltd.- Taiwan
- Billiton Holdings Pty Ltd - Australia
- Ministry of Mines - Canada
- PNOC Exploration Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Indogreen Group - Indonesia
- Economic Council, Georgia
- ICICI Bank Limited - India
- Karaikal Port Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- GAC Shipping (India) Pvt Ltd
- Semirara Mining Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Kaltim Prima Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- VISA Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- Latin American Coal - Colombia
- GN Power Mariveles Coal Plant, Philippines
- Posco Energy - South Korea
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