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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, 07 November 11
CHINA'S COAL IMPORTS STEAM AHEAD
Chinese seaborne coal imports have grown greatly in recent years, up from 39.2mt in 2008 to 167.7mt in 2010, with the result that China became a net ...
Saturday, 05 November 11
DEMAND SLUMP THREATENS MORE PAIN FOR BULK VESSELS - VISTAAR
COALspot.com - The market continued to fall with BDI dropping below 2,000 points by around 10 pct and closing at 1817 points. The cape index also co ...
Saturday, 05 November 11
BERAU STARTS TO EXPLORE BINUNGAN SITE - INSIDER STORIES
Insider Stories reported that, coal miner PT Berau Coal, a 90% owned subsidiary of PT Berau Coal Energy Tbk (BRAU), is busy to hold exploration in B ...
Friday, 04 November 11
INDIAN IRON ORE MARKET REMAINS DEAD - FEARNLEYS
Handy
The Atlantic market kept its strong position from last week. Even with fewer fixtures reported. Fronthauls still around 25k, wit ...
Thursday, 03 November 11
DRY BULK MARKET OFFICIALLY IN THE RED ON LOWER CARGO DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept falling yesterday, on lower iron ore demand, which has caused the industry’s benchmark, the BDI (Baltic Dry Index) to ...
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- Semirara Mining and Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Africa Commodities Group - South Africa
- Indian Energy Exchange, India
- Sindya Power Generating Company Private Ltd
- Deloitte Consulting - India
- Port Waratah Coal Services - Australia
- Directorate General of MIneral and Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Siam City Cement - Thailand
- GVK Power & Infra Limited - India
- Electricity Authority, New Zealand
- Ministry of Mines - Canada
- Posco Energy - South Korea
- Coastal Gujarat Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Mercator Lines Limited - India
- Toyota Tsusho Corporation, Japan
- Minerals Council of Australia
- Kapuas Tunggal Persada - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- ASAPP Information Group - India
- Neyveli Lignite Corporation Ltd, - India
- SMC Global Power, Philippines
- Indika Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Independent Power Producers Association of India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Anglo American - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- South Luzon Thermal Energy Corporation
- Ind-Barath Power Infra Limited - India
- Carbofer General Trading SA - India
- Alfred C Toepfer International GmbH - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- VISA Power Limited - India
- Energy Link Ltd, New Zealand
- Riau Bara Harum - Indonesia
- IEA Clean Coal Centre - UK
- PTC India Limited - India
- Manunggal Multi Energi - Indonesia
- McConnell Dowell - Australia
- Indonesian Coal Mining Association
- Ministry of Finance - Indonesia
- Parliament of New Zealand
- White Energy Company Limited
- Sarangani Energy Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- The University of Queensland
- Vizag Seaport Private Limited - India
- Bangladesh Power Developement Board
- Kartika Selabumi Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Metalloyd Limited - United Kingdom
- Marubeni Corporation - India
- Intertek Mineral Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Tata Chemicals Ltd - India
- Therma Luzon, Inc, Philippines
- Romanian Commodities Exchange
- Holcim Trading Pte Ltd - Singapore
- PowerSource Philippines DevCo
- Madhucon Powers Ltd - India
- LBH Netherlands Bv - Netherlands
- Orica Australia Pty. Ltd.
- Ceylon Electricity Board - Sri Lanka
- Thai Mozambique Logistica
- Siam City Cement PLC, Thailand
- Energy Development Corp, Philippines
- Simpson Spence & Young - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Ambuja Cements Ltd - India
- Heidelberg Cement - Germany
- Aditya Birla Group - India
- Georgia Ports Authority, United States
- Straits Asia Resources Limited - Singapore
- Star Paper Mills Limited - India
- Karaikal Port Pvt Ltd - India
- London Commodity Brokers - England
- Banpu Public Company Limited - Thailand
- MS Steel International - UAE
- Grasim Industreis Ltd - India
- Mercuria Energy - Indonesia
- Altura Mining Limited, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kaltim Prima Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Oldendorff Carriers - Singapore
- Savvy Resources Ltd - HongKong
- Formosa Plastics Group - Taiwan
- Salva Resources Pvt Ltd - India
- Makarim & Taira - Indonesia
- Rio Tinto Coal - Australia
- Australian Commodity Traders Exchange
- Australian Coal Association
- Borneo Indobara - Indonesia
- Electricity Generating Authority of Thailand
- Bhatia International Limited - India
- Global Coal Blending Company Limited - Australia
- Chettinad Cement Corporation Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Standard Chartered Bank - UAE
- Tamil Nadu electricity Board
- Goldman Sachs - Singapore
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Trasteel International SA, Italy
- OPG Power Generation Pvt Ltd - India
- Vedanta Resources Plc - India
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- San Jose City I Power Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Coalindo Energy - Indonesia
- Merrill Lynch Commodities Europe
- Videocon Industries ltd - India
- Commonwealth Bank - Australia
- Chamber of Mines of South Africa
- Malabar Cements Ltd - India
- IHS Mccloskey Coal Group - USA
- Iligan Light & Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Global Green Power PLC Corporation, Philippines
- Parry Sugars Refinery, India
- Miang Besar Coal Terminal - Indonesia
- Eastern Energy - Thailand
- AsiaOL BioFuels Corp., Philippines
- Orica Mining Services - Indonesia
- Ministry of Transport, Egypt
- Attock Cement Pakistan Limited
- Timah Investasi Mineral - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mintek Dendrill Indonesia
- Dalmia Cement Bharat India
- Vijayanagar Sugar Pvt Ltd - India
- Wood Mackenzie - Singapore
- The State Trading Corporation of India Ltd
- Jaiprakash Power Ventures ltd
- Sojitz Corporation - Japan
- Mjunction Services Limited - India
- Meenaskhi Energy Private Limited - India
- Latin American Coal - Colombia
- Essar Steel Hazira Ltd - India
- Medco Energi Mining Internasional
- Bayan Resources Tbk. - Indonesia
- Kobexindo Tractors - Indoneisa
- Kideco Jaya Agung - Indonesia
- Baramulti Group, Indonesia
- The Treasury - Australian Government
- Thiess Contractors Indonesia
- GMR Energy Limited - India
- Power Finance Corporation Ltd., India
- CIMB Investment Bank - Malaysia
- Xindia Steels Limited - India
- Kumho Petrochemical, South Korea
- Wilmar Investment Holdings
- Barasentosa Lestari - Indonesia
- Indian Oil Corporation Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Sidhee Cement - India
- Meralco Power Generation, Philippines
- Globalindo Alam Lestari - Indonesia
- Coal and Oil Company - UAE
- New Zealand Coal & Carbon
- Gujarat Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Singapore Mercantile Exchange
- Renaissance Capital - South Africa
- Bharathi Cement Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- Rashtriya Ispat Nigam Limited - India
- Indogreen Group - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bhushan Steel Limited - India
- Cigading International Bulk Terminal - Indonesia
- Larsen & Toubro Limited - India
- Maheswari Brothers Coal Limited - India
- Bhoruka Overseas - Indonesia
- International Coal Ventures Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Kepco SPC Power Corporation, Philippines
- Central Java Power - Indonesia
- Sakthi Sugars Limited - India
- Petron Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Price Waterhouse Coopers - Russia
- GAC Shipping (India) Pvt Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Electricity Authority - India
- Cement Manufacturers Association - India
- CNBM International Corporation - China
- Antam Resourcindo - Indonesia
- Sical Logistics Limited - India
- Global Business Power Corporation, Philippines
- Planning Commission, India
- Interocean Group of Companies - India
- Lanco Infratech Ltd - India
- SMG Consultants - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Aboitiz Power Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Jindal Steel & Power Ltd - India
- Sree Jayajothi Cements Limited - India
- ICICI Bank Limited - India
- Eastern Coal Council - USA
- Edison Trading Spa - Italy
- European Bulk Services B.V. - Netherlands
- Uttam Galva Steels Limited - India
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- Economic Council, Georgia
- Bank of Tokyo Mitsubishi UFJ Ltd
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