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Monday, 23 November 09
INDONESIA MINING RULE THREATENS INVESTMENT DRIVE
 A new Indonesian mining rule, limiting contract work that can be outsourced and favouring local players, is shaping up as a new blow to plans to boost mining investment in Southeast Asia's biggest economy.
The rule, attached to a mining law passed last year, presents an immediate challenge for new energy and mining minister Darwin Saleh, who was sworn in last month amid hopes that a new government could boost the resources sector.
The mining law, which replaced one issued 41 years ago, aims to squeeze more benefits from rich mineral reserves in Indonesia, the world's top exporter of tin and thermal coal and a key producer of zinc, copper, nickel and gold.
But Indonesia has seen little new foreign investment in metal mining in recent years and the energy and mining ministry's new rules seems likely to dampen enthusiasm among potential investors.
"It will increase costs for miners because they have to buy their own equipment and hire new people," said Priyo Pribadi Soemarno of the Indonesian Mining Association.
To contain costs, most mining firms in Indonesia, particularly coal firms, rely on contractors for work ranging from actual mining to stockpiling of minerals.
But the new regulation limits contractors to stripping away top soil and transporting mining products, while the miner itself has to extract minerals.
The move would encourage inefficiency and was out of step with global trends, said Soemarno, the executive director of the mining group. "Mining companies globally are trying to slim down their organisations," he said.
Former Mining and Energy Minister Purnomo Yusgiantoro signed the new regulation at the end of September.
His successor, a suprise pick in President Susilo Bambang Yudhoyono's cabinet last month, has not publicly commented on it and little is known of his policy stance.
Indonesia has struggled to lure foreign investment into mining in recent years, compounded by some politicians taking a nationalist line on resource exploitation and also because of uncertainty over regulations.
Major global resource firms operating in Indonesia include Freeport-McMoRan Copper & Gold Inc and Newmont Mining Corp, but much of the investment was made decades ago.
Investment in mining, including coal and geothermal, rose to $1.65 billion in 2008 from $1 billion in 2004 but mostly came from existing miners rather than new entrants.
Some foreign firms have already shelved investment plans since last year, partly due to uncertainties over the new mining law, which also includes contentious items such as shorter-term mining permits rather than longer-term contracts of work.
Miners will also have to process minerals in Indonesia and to set aside some of their coal for the domestic market.
COAL MINERS TO SUFFER MOST
The new mining services rule limits miners' use of contractors, and when allowed to use one, they must give a local contractor first preference and need the energy ministry's permission to hire affiliates.
David Kiu, an analyst at Eurasia Group, said the new rule was mainly aimed at curtailing transfer pricing, a practice rife in Indonesian mining, by which firms in the same group sell to each other at artificial prices to avoid taxes.
The new regulation applies immediately to new mining projects but allows existing miners a term of three years to adjust.
The regulation will have a bigger impact on coal producers, since they tend to use mining contractors for nearly all their mining activities, some experts said.
PT Adaro Energy Tbk, Indonesia's largest coal miner by market value, and PT Berau Coal, the fifth-biggest by volume, currently outsource their entire mining activities.
Sacha Winzenried, a mining partner at PricewaterhouseCoopers Indonesia, said coal companies would have to do more themselves and weigh up local contractors over foreigners.
"This will result in increased expenditures on capital equipment," Winzenried said.
Miners whose affiliates carry out mining activities might need to restructure their businesses after the end of the exemption period, he added.
"It's either by merging the contract mining business with the mining company or transferring the assets, or selling-off the contract mining altogether," Winzenried said.
Companies are still assesing the cost impact, although rating agency Fitch said it did not see negative rating implications for firms it covers including PT Adaro Indonesia and PT Indika Energy Tbk
But an executive at a top coal firm, who declined to be identified, said the regulation would significantly increase the requirements for capital, possibly limiting expansion.
"By employing contractors, this limits the capital requirements for heavy equipment and therefore we can expand faster."
The Indonesian Mining Association fears mining investment could fall below $1 billion this year due to uncertainty over the new law, although the government has said investment from mining -- including geothermal -- could surpass $2 billion.
Last year, mining giant BHP Billiton scrapped a study to develop an integrated nickel project in eastern Indonesia and decided not to go ahead with a coal mine in Central Kalimantan. Tsingshan Mineral Company Ltd had scrapped a $500 million nickel project in North Maluku in Indonesia.
"If the regulation is not amended, new investors will think over before investing because it will increase costs and not every mining company is capable of increasing their investment," said Soemarno of the Indonesia Mining Association.
Source: Reuters / Alibaba
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Friday, 04 December 09
KALIMANTAN GOLD AGREES TO SELL IBP COAL CONCESSION
COALspot.com ( Press Release): Kalimantan Gold Corporation Limited ("KLG" or the "Company"), which undertook drilling and had an ...
Friday, 04 December 09
JSW ENERGY TO BUY OUT PARENT FIRM'S COAL BLOCK
JSW Energy plans to buy the stake held by JSW Steel in a thermal coal block in Mozambique in an attempt to become an integrated energy company with ...
Thursday, 03 December 09
JAPAN 2010 COAL IMPORTS SEEN FLAT, INDIA'S ROBUST - INDUSTRY
* Japan's demand seen steady in 2010 at 110 mln tonnes
* India's demand seen as robust, at 70 mln tonnes
Reuters reported that, Thermal coal i ...
Thursday, 03 December 09
INDONESIA MAY ALLOW COAL SALES BELOW GOVT PRICE
Reuters reported that, Indonesia is considering giving producers some flexibility to sell coal below the government's monthly benchmark price to co ...
Thursday, 03 December 09
INDONESIA SEEKS TO INCREASE COAL SHIPMENTS TO INDIA, CHINA
Bloomberg reproted that, Indonesia, Asia’s biggest coal exporter, seeks to increase shipments to India and China as the economies improve and ...
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- Star Paper Mills Limited - India
- Chamber of Mines of South Africa
- Karbindo Abesyapradhi - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Indonesian Coal Mining Association
- Thai Mozambique Logistica
- Samtan Co., Ltd - South Korea
- Bhoruka Overseas - Indonesia
- Kobexindo Tractors - Indoneisa
- Ministry of Mines - Canada
- Maharashtra Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Baramulti Group, Indonesia
- Minerals Council of Australia
- Directorate Of Revenue Intelligence - India
- Global Business Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Indian Energy Exchange, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Economic Council, Georgia
- TeaM Sual Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wood Mackenzie - Singapore
- Romanian Commodities Exchange
- Metalloyd Limited - United Kingdom
- Agrawal Coal Company - India
- Sojitz Corporation - Japan
- GMR Energy Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Barasentosa Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Heidelberg Cement - Germany
- Jindal Steel & Power Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Ministry of Transport, Egypt
- Semirara Mining Corp, Philippines
- The University of Queensland
- Iligan Light & Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Sinarmas Energy and Mining - Indonesia
- Wilmar Investment Holdings
- The State Trading Corporation of India Ltd
- Xindia Steels Limited - India
- Planning Commission, India
- Carbofer General Trading SA - India
- Parry Sugars Refinery, India
- Cement Manufacturers Association - India
- Vijayanagar Sugar Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Intertek Mineral Services - Indonesia
- Kumho Petrochemical, South Korea
- TNB Fuel Sdn Bhd - Malaysia
- ICICI Bank Limited - India
- Billiton Holdings Pty Ltd - Australia
- Central Java Power - Indonesia
- Petron Corporation, Philippines
- Rio Tinto Coal - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Savvy Resources Ltd - HongKong
- Orica Australia Pty. Ltd.
- Interocean Group of Companies - India
- White Energy Company Limited
- Renaissance Capital - South Africa
- India Bulls Power Limited - India
- Energy Development Corp, Philippines
- Oldendorff Carriers - Singapore
- Aboitiz Power Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Borneo Indobara - Indonesia
- Posco Energy - South Korea
- MS Steel International - UAE
- European Bulk Services B.V. - Netherlands
- McConnell Dowell - Australia
- Indika Energy - Indonesia
- Mjunction Services Limited - India
- Mintek Dendrill Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Grasim Industreis Ltd - India
- Orica Mining Services - Indonesia
- SMG Consultants - Indonesia
- Kaltim Prima Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- Kideco Jaya Agung - Indonesia
- Coal and Oil Company - UAE
- IHS Mccloskey Coal Group - USA
- Manunggal Multi Energi - Indonesia
- Parliament of New Zealand
- SMC Global Power, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- PTC India Limited - India
- ASAPP Information Group - India
- Standard Chartered Bank - UAE
- Energy Link Ltd, New Zealand
- Malabar Cements Ltd - India
- Trasteel International SA, Italy
- Mercuria Energy - Indonesia
- Marubeni Corporation - India
- London Commodity Brokers - England
- CIMB Investment Bank - Malaysia
- Eastern Energy - Thailand
- Georgia Ports Authority, United States
- Global Green Power PLC Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Australian Commodity Traders Exchange
- IEA Clean Coal Centre - UK
- Chettinad Cement Corporation Ltd - India
- Formosa Plastics Group - Taiwan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Larsen & Toubro Limited - India
- Attock Cement Pakistan Limited
- Electricity Generating Authority of Thailand
- Jaiprakash Power Ventures ltd
- Independent Power Producers Association of India
- Coalindo Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Africa Commodities Group - South Africa
- Ministry of Finance - Indonesia
- Uttam Galva Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- Eastern Coal Council - USA
- Bulk Trading Sa - Switzerland
- Siam City Cement - Thailand
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Port Waratah Coal Services - Australia
- Coastal Gujarat Power Limited - India
- Tata Chemicals Ltd - India
- Therma Luzon, Inc, Philippines
- Essar Steel Hazira Ltd - India
- Goldman Sachs - Singapore
- South Luzon Thermal Energy Corporation
- Latin American Coal - Colombia
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- AsiaOL BioFuels Corp., Philippines
- International Coal Ventures Pvt Ltd - India
- Tamil Nadu electricity Board
- Edison Trading Spa - Italy
- Australian Coal Association
- Globalindo Alam Lestari - Indonesia
- Thiess Contractors Indonesia
- Lanco Infratech Ltd - India
- GAC Shipping (India) Pvt Ltd
- Gujarat Sidhee Cement - India
- Leighton Contractors Pty Ltd - Australia
- Vedanta Resources Plc - India
- Indogreen Group - Indonesia
- New Zealand Coal & Carbon
- Krishnapatnam Port Company Ltd. - India
- Sindya Power Generating Company Private Ltd
- Electricity Authority, New Zealand
- Videocon Industries ltd - India
- Power Finance Corporation Ltd., India
- Madhucon Powers Ltd - India
- CNBM International Corporation - China
- Directorate General of MIneral and Coal - Indonesia
- Bhatia International Limited - India
- PowerSource Philippines DevCo
- SN Aboitiz Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Singapore Mercantile Exchange
- Vizag Seaport Private Limited - India
- Bhushan Steel Limited - India
- Bayan Resources Tbk. - Indonesia
- Mercator Lines Limited - India
- Toyota Tsusho Corporation, Japan
- Kepco SPC Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Holcim Trading Pte Ltd - Singapore
- Ceylon Electricity Board - Sri Lanka
- Anglo American - United Kingdom
- Riau Bara Harum - Indonesia
- Timah Investasi Mineral - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Commonwealth Bank - Australia
- Central Electricity Authority - India
- Ambuja Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- Medco Energi Mining Internasional
- Sical Logistics Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Meenaskhi Energy Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Antam Resourcindo - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Sakthi Sugars Limited - India
- Meralco Power Generation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Makmur.PT - Indonesia
- GVK Power & Infra Limited - India
- Aditya Birla Group - India
- Ind-Barath Power Infra Limited - India
- Makarim & Taira - Indonesia
- Global Coal Blending Company Limited - Australia
- Sarangani Energy Corporation, Philippines
- Indian Oil Corporation Limited
- Gujarat Mineral Development Corp Ltd - India
- The Treasury - Australian Government
- Banpu Public Company Limited - Thailand
- Bharathi Cement Corporation - India
- Deloitte Consulting - India
- Merrill Lynch Commodities Europe
- Dalmia Cement Bharat India
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