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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, 17 November 11
KOMIPO INVITES BIDS FOR 500K MT OF COAL
COALspot.com - Korea Midland Power Co. Ltd.(KOMIPO) is inviting bids for the supply of 500,000 Metric Tons of minimum 5700 kcal/kg coal of NAR bases ...
Thursday, 17 November 11
INDONESIAN GOVERNMENT PLANS TO ISSUE MORATORIUM ON COAL MINING LICENSE
COALspot.com - Energy and mineral resources ministry is plans to issue a moratorium on the issuance of coal mining licenses, after the anti-graft co ...
Wednesday, 16 November 11
KRISHNAPATNAM PORT BECOMES DEEPEST DRAFT PORT IN INDIA
COALspot.com - Krishnapatnam Port in its quest to be the best port in India has increased its draft to 17.5 meters, according to E-Mail statement fr ...
Wednesday, 16 November 11
CHINA'S INDONESIA COAL IMPORTS RISE IN OCTOBER
COALspot.com: Indonesia, the world largest coal exporter, shipped 31,162,688 MT of coal in October 2011.
China was a largest importer of Indonesi ...
Wednesday, 16 November 11
TAX OFFICE VOWS TO CRACK DOWN ON COAL MINERS - JP
The Jakarta Post reported that, the Finance Ministry’s Directorate General of Taxation says that it will strengthen its supervision of coal mi ...
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- Indonesian Coal Mining Association
- The University of Queensland
- Essar Steel Hazira Ltd - India
- Bhushan Steel Limited - India
- Antam Resourcindo - Indonesia
- International Coal Ventures Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Star Paper Mills Limited - India
- Sree Jayajothi Cements Limited - India
- Gujarat Sidhee Cement - India
- Mjunction Services Limited - India
- Binh Thuan Hamico - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Deloitte Consulting - India
- Merrill Lynch Commodities Europe
- Siam City Cement PLC, Thailand
- Posco Energy - South Korea
- Parliament of New Zealand
- GVK Power & Infra Limited - India
- India Bulls Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Indian Oil Corporation Limited
- Bulk Trading Sa - Switzerland
- Neyveli Lignite Corporation Ltd, - India
- The State Trading Corporation of India Ltd
- Georgia Ports Authority, United States
- Baramulti Group, Indonesia
- PowerSource Philippines DevCo
- Dalmia Cement Bharat India
- TNB Fuel Sdn Bhd - Malaysia
- LBH Netherlands Bv - Netherlands
- Edison Trading Spa - Italy
- Agrawal Coal Company - India
- MS Steel International - UAE
- Vizag Seaport Private Limited - India
- Ind-Barath Power Infra Limited - India
- Rio Tinto Coal - Australia
- Global Coal Blending Company Limited - Australia
- Orica Mining Services - Indonesia
- Petron Corporation, Philippines
- Eastern Energy - Thailand
- Meenaskhi Energy Private Limited - India
- Aditya Birla Group - India
- Jorong Barutama Greston.PT - Indonesia
- Carbofer General Trading SA - India
- Kumho Petrochemical, South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Vedanta Resources Plc - India
- Ministry of Transport, Egypt
- SMG Consultants - Indonesia
- Standard Chartered Bank - UAE
- Price Waterhouse Coopers - Russia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercuria Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Larsen & Toubro Limited - India
- ASAPP Information Group - India
- SN Aboitiz Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Toyota Tsusho Corporation, Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indika Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Coalindo Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- ICICI Bank Limited - India
- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
- Economic Council, Georgia
- Heidelberg Cement - Germany
- SMC Global Power, Philippines
- Central Electricity Authority - India
- Orica Australia Pty. Ltd.
- Commonwealth Bank - Australia
- Gujarat Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- TeaM Sual Corporation - Philippines
- Siam City Cement - Thailand
- Billiton Holdings Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Oldendorff Carriers - Singapore
- Bayan Resources Tbk. - Indonesia
- The Treasury - Australian Government
- Ministry of Mines - Canada
- Grasim Industreis Ltd - India
- Thiess Contractors Indonesia
- Sojitz Corporation - Japan
- Kalimantan Lumbung Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Rashtriya Ispat Nigam Limited - India
- Globalindo Alam Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Cement Manufacturers Association - India
- Renaissance Capital - South Africa
- Maheswari Brothers Coal Limited - India
- Romanian Commodities Exchange
- Krishnapatnam Port Company Ltd. - India
- Electricity Generating Authority of Thailand
- Power Finance Corporation Ltd., India
- Malabar Cements Ltd - India
- Medco Energi Mining Internasional
- Uttam Galva Steels Limited - India
- Bangladesh Power Developement Board
- Kaltim Prima Coal - Indonesia
- Tamil Nadu electricity Board
- Singapore Mercantile Exchange
- Jindal Steel & Power Ltd - India
- Intertek Mineral Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Madhucon Powers Ltd - India
- McConnell Dowell - Australia
- Xindia Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bharathi Cement Corporation - India
- Aboitiz Power Corporation - Philippines
- Meralco Power Generation, Philippines
- Borneo Indobara - Indonesia
- Bukit Makmur.PT - Indonesia
- London Commodity Brokers - England
- GN Power Mariveles Coal Plant, Philippines
- Samtan Co., Ltd - South Korea
- Marubeni Corporation - India
- Planning Commission, India
- IHS Mccloskey Coal Group - USA
- Bhoruka Overseas - Indonesia
- South Luzon Thermal Energy Corporation
- Chamber of Mines of South Africa
- New Zealand Coal & Carbon
- Wood Mackenzie - Singapore
- Coal and Oil Company - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- VISA Power Limited - India
- Attock Cement Pakistan Limited
- Banpu Public Company Limited - Thailand
- Karaikal Port Pvt Ltd - India
- Bhatia International Limited - India
- Kartika Selabumi Mining - Indonesia
- Energy Development Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Videocon Industries ltd - India
- Timah Investasi Mineral - Indoneisa
- Anglo American - United Kingdom
- Iligan Light & Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Central Java Power - Indonesia
- Mintek Dendrill Indonesia
- Metalloyd Limited - United Kingdom
- White Energy Company Limited
- OPG Power Generation Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Wilmar Investment Holdings
- Goldman Sachs - Singapore
- Indogreen Group - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- GMR Energy Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Authority, New Zealand
- Ministry of Finance - Indonesia
- Australian Commodity Traders Exchange
- Thai Mozambique Logistica
- Mercator Lines Limited - India
- Bukit Baiduri Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Tata Chemicals Ltd - India
- Formosa Plastics Group - Taiwan
- Lanco Infratech Ltd - India
- Port Waratah Coal Services - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Minerals Council of Australia
- Independent Power Producers Association of India
- Leighton Contractors Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Trasteel International SA, Italy
- Asmin Koalindo Tuhup - Indonesia
- Directorate Of Revenue Intelligence - India
- Sical Logistics Limited - India
- CNBM International Corporation - China
- Sindya Power Generating Company Private Ltd
- European Bulk Services B.V. - Netherlands
- Australian Coal Association
- AsiaOL BioFuels Corp., Philippines
- Manunggal Multi Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Ambuja Cements Ltd - India
- Semirara Mining Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Chettinad Cement Corporation Ltd - India
- Barasentosa Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Global Business Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Jaiprakash Power Ventures ltd
- Petrochimia International Co. Ltd.- Taiwan
- PTC India Limited - India
- Indian Energy Exchange, India
- Sakthi Sugars Limited - India
- Eastern Coal Council - USA
- Simpson Spence & Young - Indonesia
- Africa Commodities Group - South Africa
- Interocean Group of Companies - India
- Kideco Jaya Agung - Indonesia
- Latin American Coal - Colombia
- Makarim & Taira - Indonesia
- CIMB Investment Bank - Malaysia
- Parry Sugars Refinery, India
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