We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Friday, 08 August 14
MINING DISPUTE IS CRIPPLING LOCAL ECONOMIES IN EASTERN INDONESIA - JG
 - By Iwan Harsono -
It seems as if there’s no end in sight to the series of negotiations between the government and mining companies about the Law on Mineral and Coal Mining (No. 4/2009), especially when taking into consideration the fact that Newmont Nusa Tenggara has opted to file for arbitration against the government of Indonesia. Geographically speaking, most mining giants, like Newmont and Freeport Indonesia, are operating in the Eastern Indonesia Region (KTI), comprising Papua, Maluku, Nusa Tenggara and Sulawesi, and the legal uncertainty surrounding mining operations has therefore led to a regional dip in economic growth.
Principally, the purpose of the Mining Law is noble, since it aims to increase the quality of the nation’s mineral exports for the benefit of its citizens, as stated in Article 33 of the 1945 Constitution. To complicate matters, however, several parties have argued that the Indonesian government isn’t ready yet to implement the law. Such circumstances have in turn led to the shutdown of several mineral mining companies across the country, particular in the east, a region rich in lucrative resources such as gold, copper and nickel.
Economic resilience
Currently, Eastern Indonesia is facing major developmental challenges and lately the investment climate has been less than helpful in increasing the region’s economic resilience. Eastern Indonesia has become a region that has suffered the most following the implementation of the Mining Law. At the macro level, this policy has resulted in a significant decrease in economic resilience. For instance, the region’s economic growth in the first quarter of 2014 fell to 4.6 percent (year on year), from 6.6 percent in the fourth quarter of 2013. Economic growth has struggled in several provinces, the majority of which rely heavily on the mining sector, especially Southeast Sulawesi, Papua, West Papua, West Nusa Tenggara, and West Kalimantan.
West Nusa Tenggara saw its economic growth decrease by 3.94 percent, with the mining industry suffering one of the sharpest declines at 9.82 percent in the first quarter of 2014. To make matters worse, an imbalance in the export-import rate often also leads to an even sharper overall economic decline.
There have been many changes following the implementation of the export ban in January earlier this year, and companies in the mining industry have struggled to cope. Strong sales overseas and the availability of only a limited number of smelters has influenced the production of copper (in Papua and Nusa Tenggara), nickel (in Sulawesi) and bauxite (in Kalimantan), and recently it has even threatened the coal industry as well.
Domino effect
Companies that didn’t see any way to sell their extracted resources were forced to shut down, send their employees home with limited pay or in some cases, dismiss them outright. Based on data from the Indonesia Mining Association, approximately 133,000 employees have been dismissed so far.
Newmont, for instance, sent home 6,400 of its employees in June because stockpiles have been full since last May due to the export ban. As one of the most important contributors to the local economy in West Sumbawa, Newmont’s production halt has impacted both the local and regional economies.
And there will be a domino effect on all other sectors that depend on the mining operations, for instance by providing services, and on the government, which will see a drop in tax and royalty income.
While those who were sent home are still receiving their salaries — albeit not the full amount — the economic impact has affected the communities surrounding the mining site the most, as most of them rely heavily on Newmont’s operations. Most of the small shop owners have complained of having excess stock as spending power continues to fall.
Handayani, a local diner owner, said that before the current economic struggles she often earned as much as Rp 10 million ($850) in a single day, though these days she claims she’s lucky if she can earn Rp 1 million by noon. Consequently, she has been forced to cut the number of her employees down from 12 to six.
When we look at the bigger picture, Newmont claims that the West Sumbawa region stands to lose as much as $726 million per year, the most of which comes from decreasing CSR investment, salaries and domestic purchases. If we take tax and royalties into consideration as well, the number would rise to $887 million annually.
Possible solutions
To strengthen the economy of Eastern Indonesia we will need to improve the regional infrastructure for transportation, specifically through the renovation of ports and airports in strategic cities. Unfortunately, at the moment the fear of losing employment has been on everyone’s mind.
With hindsight being 20/20, in retrospect the government should have prepared a mitigation plan prior to implementing the current regulation. Fear, anxiety and uncertainty have miners and surrounding communities worried. They have no other option but to hope the government steps in and lends a helping hand.
Renegotiations have to be finalized sooner rather than later.
For its part, the government has to be wise if it wants to solve the dispute with those involved. From both a macro and a micro economic perspective, the current mining dispute presents a major obstacle to development in Eastern Indonesia.
Renegotiations should offer a solution that is beneficial for both mining companies and the government in order to ensure that operations can be resumed as soon as possible. And it is crucial that the government prepare a safety net for local communities that depend on mining operations. Finally, a mitigation plan should be included in future mining regulations, specifically one that keeps the welfare of the locals in mind. These steps should be taken quickly if we want to fulfil the promises of our constitution.
Iwan Harsono, a member of the Advisory Board for Economic Resources in West Lombok, is a lecturer in economics at the University of Mataram.
This article was originally published in The Jakarta Globe
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Monday, 11 August 14
INDONESIAN THERMAL COAL SWAPS SEEING SOME POSITIVE TREND
COALspot.com: Indonesian coal swaps for average September 2014 increased US$ 0.20 (+0.36%) day on day and US$ 1.30 (+2.41%) per mt week on week. Th ...
Monday, 11 August 14
SGX CFR SOUTH CHINA COAL SWAPS DIRECTION HEADING TO NORTH
COALspot.com: API 8 CFR South China Coal swap for delivery in September 2014 increased US$ 0.50 (+0.74%) day on day and US$ 1.55 (+2.33%)&nbs ...
Monday, 11 August 14
A TALE OF TWO TRADES - EVA TZIMA
COALspot.com: It has without a doubt been “a cruel, cruel summer” for the Dry Bulk market so far and with second hand values still stan ...
Sunday, 10 August 14
FREIGHT RATES FROM INDONESIA TO INDIA IS EXPECTED TO BE STEADY NEXT WEEK - VISTAAR
COALspot.com: This week the BDI and other segments saw some improvements. The BDI increased by 3.46 pct week on week and closed at 777 points.
...
Friday, 08 August 14
CAPESIZE RATES ARE REMAINING MORE OR LESS UNCHANGED AT BOTTOM LOW LEVELS - FEARNLEYS AS
Handy
An improving sentiment with stronger rates and fair demand for prompt tonnage in the Atlantic, both on the Continent and in the Med for the ...
|
|
|
Showing 3551 to 3555 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Jindal Steel & Power Ltd - India
- Commonwealth Bank - Australia
- Straits Asia Resources Limited - Singapore
- Siam City Cement - Thailand
- Iligan Light & Power Inc, Philippines
- Rio Tinto Coal - Australia
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Neyveli Lignite Corporation Ltd, - India
- Mercuria Energy - Indonesia
- McConnell Dowell - Australia
- Ministry of Mines - Canada
- Kideco Jaya Agung - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Development Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Sinarmas Energy and Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Sree Jayajothi Cements Limited - India
- Vedanta Resources Plc - India
- Kumho Petrochemical, South Korea
- Semirara Mining and Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Anglo American - United Kingdom
- Madhucon Powers Ltd - India
- Singapore Mercantile Exchange
- Wood Mackenzie - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karbindo Abesyapradhi - Indoneisa
- Carbofer General Trading SA - India
- Cement Manufacturers Association - India
- Antam Resourcindo - Indonesia
- Aditya Birla Group - India
- Electricity Authority, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Indonesian Coal Mining Association
- Global Business Power Corporation, Philippines
- Ambuja Cements Ltd - India
- PTC India Limited - India
- India Bulls Power Limited - India
- Attock Cement Pakistan Limited
- Tamil Nadu electricity Board
- Goldman Sachs - Singapore
- Aboitiz Power Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Bhushan Steel Limited - India
- Pendopo Energi Batubara - Indonesia
- Minerals Council of Australia
- Interocean Group of Companies - India
- Salva Resources Pvt Ltd - India
- Orica Mining Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Africa Commodities Group - South Africa
- GMR Energy Limited - India
- Coalindo Energy - Indonesia
- GVK Power & Infra Limited - India
- Chamber of Mines of South Africa
- Rashtriya Ispat Nigam Limited - India
- Latin American Coal - Colombia
- Tata Chemicals Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sical Logistics Limited - India
- Directorate General of MIneral and Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Jaiprakash Power Ventures ltd
- Wilmar Investment Holdings
- Bukit Baiduri Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Banpu Public Company Limited - Thailand
- Therma Luzon, Inc, Philippines
- MS Steel International - UAE
- Indo Tambangraya Megah - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Vizag Seaport Private Limited - India
- Intertek Mineral Services - Indonesia
- Gujarat Sidhee Cement - India
- Heidelberg Cement - Germany
- Bayan Resources Tbk. - Indonesia
- Semirara Mining Corp, Philippines
- Star Paper Mills Limited - India
- Ministry of Finance - Indonesia
- Medco Energi Mining Internasional
- Price Waterhouse Coopers - Russia
- Gujarat Electricity Regulatory Commission - India
- Sakthi Sugars Limited - India
- Eastern Energy - Thailand
- Sarangani Energy Corporation, Philippines
- Planning Commission, India
- Mintek Dendrill Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- SMC Global Power, Philippines
- Makarim & Taira - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Mercator Lines Limited - India
- Orica Australia Pty. Ltd.
- IEA Clean Coal Centre - UK
- Miang Besar Coal Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Meralco Power Generation, Philippines
- Power Finance Corporation Ltd., India
- Maheswari Brothers Coal Limited - India
- Renaissance Capital - South Africa
- LBH Netherlands Bv - Netherlands
- Global Green Power PLC Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- San Jose City I Power Corp, Philippines
- Deloitte Consulting - India
- South Luzon Thermal Energy Corporation
- Lanco Infratech Ltd - India
- Energy Link Ltd, New Zealand
- Indian Energy Exchange, India
- Bangladesh Power Developement Board
- Altura Mining Limited, Indonesia
- Directorate Of Revenue Intelligence - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- New Zealand Coal & Carbon
- PowerSource Philippines DevCo
- Xindia Steels Limited - India
- Romanian Commodities Exchange
- OPG Power Generation Pvt Ltd - India
- Trasteel International SA, Italy
- Kohat Cement Company Ltd. - Pakistan
- Bharathi Cement Corporation - India
- Baramulti Group, Indonesia
- Holcim Trading Pte Ltd - Singapore
- CNBM International Corporation - China
- Indika Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Global Coal Blending Company Limited - Australia
- TeaM Sual Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Larsen & Toubro Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Formosa Plastics Group - Taiwan
- Central Java Power - Indonesia
- Borneo Indobara - Indonesia
- Grasim Industreis Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Binh Thuan Hamico - Vietnam
- White Energy Company Limited
- Gujarat Mineral Development Corp Ltd - India
- Indogreen Group - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Metalloyd Limited - United Kingdom
- Bukit Makmur.PT - Indonesia
- Malabar Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Mjunction Services Limited - India
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- Eastern Coal Council - USA
- Parry Sugars Refinery, India
- Electricity Generating Authority of Thailand
- The University of Queensland
- Essar Steel Hazira Ltd - India
- Sindya Power Generating Company Private Ltd
- Manunggal Multi Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- VISA Power Limited - India
- SMG Consultants - Indonesia
- Indian Oil Corporation Limited
- Thiess Contractors Indonesia
- Agrawal Coal Company - India
- Kaltim Prima Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bhoruka Overseas - Indonesia
- Parliament of New Zealand
- Globalindo Alam Lestari - Indonesia
- Videocon Industries ltd - India
- Kobexindo Tractors - Indoneisa
- ICICI Bank Limited - India
- Central Electricity Authority - India
- Independent Power Producers Association of India
- Kartika Selabumi Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Sojitz Corporation - Japan
- Thai Mozambique Logistica
- European Bulk Services B.V. - Netherlands
- SN Aboitiz Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- ASAPP Information Group - India
- PetroVietnam Power Coal Import and Supply Company
- Barasentosa Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Petron Corporation, Philippines
- Uttam Galva Steels Limited - India
- Coastal Gujarat Power Limited - India
- Edison Trading Spa - Italy
- Economic Council, Georgia
- Posco Energy - South Korea
- Bhatia International Limited - India
- Kepco SPC Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Dalmia Cement Bharat India
- Merrill Lynch Commodities Europe
- Meenaskhi Energy Private Limited - India
- CIMB Investment Bank - Malaysia
- Karaikal Port Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Georgia Ports Authority, United States
- International Coal Ventures Pvt Ltd - India
- London Commodity Brokers - England
- The Treasury - Australian Government
- Australian Commodity Traders Exchange
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- Australian Coal Association
- Ministry of Transport, Egypt
- Jorong Barutama Greston.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Standard Chartered Bank - UAE
- Cigading International Bulk Terminal - Indonesia
|
| |
| |
|
