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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, 12 November 11
DRY BULK MARKET REGAINS SOME OF THE LOST GROUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market managed to edge forward yesterday, putting an end and halting the losses accumulated over the course of the past weeks, which ha ...
Friday, 11 November 11
PETROCOM ENERGY PLANS $40M TO BUILD COAL PLANT IN CILEGON - JP
The Jakarta Post reported that, Hong Kong-based Petrocom Energy Ltd has unveiled plans to invest up to US$40 million on a proposed coal-blending fac ...
Friday, 11 November 11
GOVT WAITS LEGAL DECISION ON BUKIT ASAM, ADARO DISPUTE - JP
The Jakarta Post reported that, The government says that it will not interfere in the settlement process of the dispute between state coal miner PT ...
Thursday, 10 November 11
INDONESIAN REFERENCE COAL PRICE FELL AGAIN
COALspot.com - Ministry of Energy and Mineral Resources of Indonesia has set the November 2011 Indonesian Coal Reference Price for thermal coal at U ...
Tuesday, 08 November 11
COAL MINER ABM INVESTAMA PLANS $290M PUBLIC OFFERING - JG
The Jakarta Globe reported that, ABM Investama, an Indonesian coal miner controlled by the Hamami family, plans to raise as much as Rp 2.6 trillion ...
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- Bank of Tokyo Mitsubishi UFJ Ltd
- PetroVietnam Power Coal Import and Supply Company
- Eastern Energy - Thailand
- Rashtriya Ispat Nigam Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining and Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Energy Development Corp, Philippines
- Global Business Power Corporation, Philippines
- Medco Energi Mining Internasional
- Coalindo Energy - Indonesia
- Borneo Indobara - Indonesia
- Petron Corporation, Philippines
- Port Waratah Coal Services - Australia
- Oldendorff Carriers - Singapore
- Sical Logistics Limited - India
- Xindia Steels Limited - India
- Makarim & Taira - Indonesia
- Iligan Light & Power Inc, Philippines
- Goldman Sachs - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- Tata Chemicals Ltd - India
- Karaikal Port Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Indian Energy Exchange, India
- Edison Trading Spa - Italy
- Bulk Trading Sa - Switzerland
- Petrochimia International Co. Ltd.- Taiwan
- Sindya Power Generating Company Private Ltd
- Indo Tambangraya Megah - Indonesia
- Grasim Industreis Ltd - India
- Thai Mozambique Logistica
- Coastal Gujarat Power Limited - India
- Merrill Lynch Commodities Europe
- Kobexindo Tractors - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Singapore Mercantile Exchange
- Australian Coal Association
- Samtan Co., Ltd - South Korea
- Ministry of Mines - Canada
- Karbindo Abesyapradhi - Indoneisa
- Aditya Birla Group - India
- European Bulk Services B.V. - Netherlands
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- Energy Link Ltd, New Zealand
- Tamil Nadu electricity Board
- The University of Queensland
- Trasteel International SA, Italy
- Malabar Cements Ltd - India
- GVK Power & Infra Limited - India
- White Energy Company Limited
- Madhucon Powers Ltd - India
- Kepco SPC Power Corporation, Philippines
- Mjunction Services Limited - India
- Gujarat Sidhee Cement - India
- Bukit Asam (Persero) Tbk - Indonesia
- SMG Consultants - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Antam Resourcindo - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Meralco Power Generation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- TeaM Sual Corporation - Philippines
- Indogreen Group - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bayan Resources Tbk. - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kumho Petrochemical, South Korea
- ASAPP Information Group - India
- LBH Netherlands Bv - Netherlands
- Parliament of New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Straits Asia Resources Limited - Singapore
- PTC India Limited - India
- Binh Thuan Hamico - Vietnam
- Lanco Infratech Ltd - India
- Chettinad Cement Corporation Ltd - India
- Bangladesh Power Developement Board
- Semirara Mining Corp, Philippines
- Australian Commodity Traders Exchange
- Georgia Ports Authority, United States
- Timah Investasi Mineral - Indoneisa
- Bhoruka Overseas - Indonesia
- South Luzon Thermal Energy Corporation
- Central Java Power - Indonesia
- Altura Mining Limited, Indonesia
- Barasentosa Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Jindal Steel & Power Ltd - India
- Baramulti Group, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Sree Jayajothi Cements Limited - India
- Videocon Industries ltd - India
- Independent Power Producers Association of India
- McConnell Dowell - Australia
- Central Electricity Authority - India
- Orica Australia Pty. Ltd.
- Wilmar Investment Holdings
- Ministry of Transport, Egypt
- Power Finance Corporation Ltd., India
- Kideco Jaya Agung - Indonesia
- Parry Sugars Refinery, India
- Simpson Spence & Young - Indonesia
- CIMB Investment Bank - Malaysia
- India Bulls Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Formosa Plastics Group - Taiwan
- International Coal Ventures Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Price Waterhouse Coopers - Russia
- Agrawal Coal Company - India
- Therma Luzon, Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Mercator Lines Limited - India
- Cement Manufacturers Association - India
- Mercuria Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Orica Mining Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Marubeni Corporation - India
- Attock Cement Pakistan Limited
- Siam City Cement PLC, Thailand
- Indonesian Coal Mining Association
- Romanian Commodities Exchange
- Ceylon Electricity Board - Sri Lanka
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- Africa Commodities Group - South Africa
- Manunggal Multi Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- PowerSource Philippines DevCo
- Deloitte Consulting - India
- Anglo American - United Kingdom
- Riau Bara Harum - Indonesia
- Essar Steel Hazira Ltd - India
- Gujarat Electricity Regulatory Commission - India
- IHS Mccloskey Coal Group - USA
- VISA Power Limited - India
- Wood Mackenzie - Singapore
- Maheswari Brothers Coal Limited - India
- Savvy Resources Ltd - HongKong
- Ministry of Finance - Indonesia
- Ind-Barath Power Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- Aboitiz Power Corporation - Philippines
- MS Steel International - UAE
- Bhushan Steel Limited - India
- Cigading International Bulk Terminal - Indonesia
- SMC Global Power, Philippines
- Ambuja Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Bhatia International Limited - India
- Heidelberg Cement - Germany
- Commonwealth Bank - Australia
- Indian Oil Corporation Limited
- Bharathi Cement Corporation - India
- Planning Commission, India
- Bukit Makmur.PT - Indonesia
- Sojitz Corporation - Japan
- Rio Tinto Coal - Australia
- Electricity Authority, New Zealand
- Carbofer General Trading SA - India
- Directorate Of Revenue Intelligence - India
- The State Trading Corporation of India Ltd
- Electricity Generating Authority of Thailand
- Intertek Mineral Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- CNBM International Corporation - China
- Posco Energy - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate General of MIneral and Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Renaissance Capital - South Africa
- The Treasury - Australian Government
- Vedanta Resources Plc - India
- Globalindo Alam Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- London Commodity Brokers - England
- Indika Energy - Indonesia
- Larsen & Toubro Limited - India
- Star Paper Mills Limited - India
- San Jose City I Power Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Green Power PLC Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mintek Dendrill Indonesia
- PNOC Exploration Corporation - Philippines
- Dalmia Cement Bharat India
- Jaiprakash Power Ventures ltd
- Uttam Galva Steels Limited - India
- ICICI Bank Limited - India
- New Zealand Coal & Carbon
- Latin American Coal - Colombia
- Interocean Group of Companies - India
- Economic Council, Georgia
- Thiess Contractors Indonesia
- Minerals Council of Australia
- Leighton Contractors Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Sakthi Sugars Limited - India
- Chamber of Mines of South Africa
- GMR Energy Limited - India
- Miang Besar Coal Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Eastern Coal Council - USA
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