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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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Thursday, 03 December 09
COAL INDIA IPO LIKELY TO HIT MARKETS BY NOVEMBER 2010
Soon investors will get to own a slice of India's largest coal mining company. Coal India its initial public offering will hit markets in November ...
Thursday, 03 December 09
PROLONGED COAL MARGIN SQUEEZE AHEAD - WESCOAL
Mining Weekly reported that, Coal junior Wescoal foresees a continued margin squeeze ahead. The JSE AltX-listed company's gross margin was reduced ...
Tuesday, 01 December 09
COAL DEMAND REBOUNDING FROM DOWNTURN - U.S. MINING EXECS
The coal industry is slowly rebounding from last year's recession with demand and prices inching upward, although inventories at U.S. power ...
Tuesday, 01 December 09
INDONESIA COAL OUTPUT SEEN LIFTED BY CHINA, INDIA
Reuters reported that, Indonesia's coal output is expected to grow by as much as 12 percent in 2010, boosted by demand from power hungry China and ...
Monday, 30 November 09
NTPC SCOUTS FOR MORE COAL BLOCKS IN INDONESIA
State-run National Thermal Power Corporation (NTPC) today said it has identified three more coal blocks in Indonesia for acquisition.
"We ha ...
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- Siam City Cement - Thailand
- ASAPP Information Group - India
- Vizag Seaport Private Limited - India
- IEA Clean Coal Centre - UK
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GVK Power & Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- Indonesian Coal Mining Association
- Maheswari Brothers Coal Limited - India
- Mintek Dendrill Indonesia
- Uttam Galva Steels Limited - India
- Bhushan Steel Limited - India
- McConnell Dowell - Australia
- Riau Bara Harum - Indonesia
- Antam Resourcindo - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Africa Commodities Group - South Africa
- Samtan Co., Ltd - South Korea
- Sojitz Corporation - Japan
- GMR Energy Limited - India
- Timah Investasi Mineral - Indoneisa
- Indogreen Group - Indonesia
- Kideco Jaya Agung - Indonesia
- Directorate Of Revenue Intelligence - India
- Indian Oil Corporation Limited
- Essar Steel Hazira Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Standard Chartered Bank - UAE
- Price Waterhouse Coopers - Russia
- PNOC Exploration Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bayan Resources Tbk. - Indonesia
- Indo Tambangraya Megah - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Vedanta Resources Plc - India
- Kumho Petrochemical, South Korea
- Heidelberg Cement - Germany
- Krishnapatnam Port Company Ltd. - India
- Altura Mining Limited, Indonesia
- Central Java Power - Indonesia
- Iligan Light & Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Baramulti Group, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Georgia Ports Authority, United States
- Formosa Plastics Group - Taiwan
- Sakthi Sugars Limited - India
- Orica Australia Pty. Ltd.
- Electricity Generating Authority of Thailand
- Australian Commodity Traders Exchange
- Medco Energi Mining Internasional
- Trasteel International SA, Italy
- Savvy Resources Ltd - HongKong
- Singapore Mercantile Exchange
- Kohat Cement Company Ltd. - Pakistan
- Posco Energy - South Korea
- Thai Mozambique Logistica
- Kapuas Tunggal Persada - Indonesia
- Manunggal Multi Energi - Indonesia
- Intertek Mineral Services - Indonesia
- SMC Global Power, Philippines
- Renaissance Capital - South Africa
- Parliament of New Zealand
- Jaiprakash Power Ventures ltd
- Energy Link Ltd, New Zealand
- White Energy Company Limited
- Oldendorff Carriers - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Aditya Birla Group - India
- Borneo Indobara - Indonesia
- Mjunction Services Limited - India
- Attock Cement Pakistan Limited
- CNBM International Corporation - China
- TeaM Sual Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Tata Chemicals Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining Corp, Philippines
- Independent Power Producers Association of India
- Ministry of Mines - Canada
- Pendopo Energi Batubara - Indonesia
- Merrill Lynch Commodities Europe
- Star Paper Mills Limited - India
- PowerSource Philippines DevCo
- OPG Power Generation Pvt Ltd - India
- Bhatia International Limited - India
- Maharashtra Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Eastern Coal Council - USA
- Wood Mackenzie - Singapore
- Kartika Selabumi Mining - Indonesia
- Global Business Power Corporation, Philippines
- Interocean Group of Companies - India
- Planning Commission, India
- Indian Energy Exchange, India
- Petron Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Power Finance Corporation Ltd., India
- Mercuria Energy - Indonesia
- Siam City Cement PLC, Thailand
- Binh Thuan Hamico - Vietnam
- Bharathi Cement Corporation - India
- International Coal Ventures Pvt Ltd - India
- Parry Sugars Refinery, India
- Electricity Authority, New Zealand
- Leighton Contractors Pty Ltd - Australia
- Tamil Nadu electricity Board
- Bukit Makmur.PT - Indonesia
- Marubeni Corporation - India
- European Bulk Services B.V. - Netherlands
- Xindia Steels Limited - India
- New Zealand Coal & Carbon
- Orica Mining Services - Indonesia
- Coalindo Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Commonwealth Bank - Australia
- Bukit Baiduri Energy - Indonesia
- Ministry of Transport, Egypt
- Offshore Bulk Terminal Pte Ltd, Singapore
- Toyota Tsusho Corporation, Japan
- Thiess Contractors Indonesia
- Deloitte Consulting - India
- Chettinad Cement Corporation Ltd - India
- Meralco Power Generation, Philippines
- Rio Tinto Coal - Australia
- Aboitiz Power Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Rashtriya Ispat Nigam Limited - India
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- Bangladesh Power Developement Board
- Sree Jayajothi Cements Limited - India
- Agrawal Coal Company - India
- Wilmar Investment Holdings
- Mercator Lines Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- India Bulls Power Limited - India
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Eastern Energy - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Videocon Industries ltd - India
- Coal and Oil Company - UAE
- Minerals Council of Australia
- Bhoruka Overseas - Indonesia
- London Commodity Brokers - England
- Jorong Barutama Greston.PT - Indonesia
- Madhucon Powers Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- MS Steel International - UAE
- Kobexindo Tractors - Indoneisa
- San Jose City I Power Corp, Philippines
- Dalmia Cement Bharat India
- The University of Queensland
- Goldman Sachs - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Ambuja Cements Ltd - India
- Cement Manufacturers Association - India
- IHS Mccloskey Coal Group - USA
- Global Green Power PLC Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- Karaikal Port Pvt Ltd - India
- Central Electricity Authority - India
- Australian Coal Association
- Meenaskhi Energy Private Limited - India
- SMG Consultants - Indonesia
- VISA Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Kaltim Prima Coal - Indonesia
- Grasim Industreis Ltd - India
- Makarim & Taira - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Anglo American - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Therma Luzon, Inc, Philippines
- Salva Resources Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- Indika Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Ministry of Finance - Indonesia
- GAC Shipping (India) Pvt Ltd
- Latin American Coal - Colombia
- Economic Council, Georgia
- Port Waratah Coal Services - Australia
- The State Trading Corporation of India Ltd
- Gujarat Mineral Development Corp Ltd - India
- Bulk Trading Sa - Switzerland
- Sindya Power Generating Company Private Ltd
- Barasentosa Lestari - Indonesia
- Energy Development Corp, Philippines
- South Luzon Thermal Energy Corporation
- Kalimantan Lumbung Energi - Indonesia
- Simpson Spence & Young - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Global Coal Blending Company Limited - Australia
- ICICI Bank Limited - India
- LBH Netherlands Bv - Netherlands
- Lanco Infratech Ltd - India
- PTC India Limited - India
- Carbofer General Trading SA - India
- Petrochimia International Co. Ltd.- Taiwan
- Malabar Cements Ltd - India
- Jindal Steel & Power Ltd - India
- Romanian Commodities Exchange
- Edison Trading Spa - Italy
- Sical Logistics Limited - India
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