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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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Monday, 30 November 09
THE FUTURES FOR THREE YEARS (2010-2012) WAS SOFT COMPARED TO LAST WEEK - VISTAAR SINGAPORE
COALspot.com (Singapore): BDI continued to drop this week and touched below 4,000 mark level. The drop in BDI was almost 12 pct and closed at 3,975 ...
Monday, 30 November 09
INDIA UTILITIES MOVE TO COAL INDEX - PRICING
Indian state utilities are leading a switch to coal index-linked pricing from fixed prices to secure imports and to be visibly paying fair market pr ...
Monday, 30 November 09
RECAPITAL TO ACQUIRE BERAU COAL
Unlisted Indonesian coal producer Berau will redeem outstanding bonds before the acquisition by Recapital Advisers is completed by the end of this y ...
Friday, 27 November 09
IMPORTING LIGNITE INTO COAL RICH KOSOVO
Balkan Insight has discovered that one of Kosovo’s biggest firms is being forced to import lignite from Malaysia and Indonesia, despite estima ...
Friday, 27 November 09
SOUTH AFRICA STILL TOPS IN COAL EXPORT RANKINGS
Mining Weekly reported that, Despite significant coal-mining capacity recently discovered in the Southern African region, according to senior coal a ...
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- Xindia Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Indian Energy Exchange, India
- Marubeni Corporation - India
- Thiess Contractors Indonesia
- The University of Queensland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Baiduri Energy - Indonesia
- Ambuja Cements Ltd - India
- Indian Oil Corporation Limited
- Planning Commission, India
- Bulk Trading Sa - Switzerland
- Sojitz Corporation - Japan
- Latin American Coal - Colombia
- Global Business Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Directorate Of Revenue Intelligence - India
- Indo Tambangraya Megah - Indonesia
- Global Coal Blending Company Limited - Australia
- VISA Power Limited - India
- Grasim Industreis Ltd - India
- Minerals Council of Australia
- Parry Sugars Refinery, India
- Timah Investasi Mineral - Indoneisa
- Ministry of Finance - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Merrill Lynch Commodities Europe
- Heidelberg Cement - Germany
- Ministry of Mines - Canada
- South Luzon Thermal Energy Corporation
- Kohat Cement Company Ltd. - Pakistan
- The Treasury - Australian Government
- Romanian Commodities Exchange
- Kobexindo Tractors - Indoneisa
- Therma Luzon, Inc, Philippines
- Singapore Mercantile Exchange
- Electricity Authority, New Zealand
- Economic Council, Georgia
- Madhucon Powers Ltd - India
- Videocon Industries ltd - India
- Siam City Cement PLC, Thailand
- Wood Mackenzie - Singapore
- Meralco Power Generation, Philippines
- GAC Shipping (India) Pvt Ltd
- ICICI Bank Limited - India
- Bangladesh Power Developement Board
- SMG Consultants - Indonesia
- Jindal Steel & Power Ltd - India
- Interocean Group of Companies - India
- Kartika Selabumi Mining - Indonesia
- Anglo American - United Kingdom
- Carbofer General Trading SA - India
- Alfred C Toepfer International GmbH - Germany
- TeaM Sual Corporation - Philippines
- Tata Chemicals Ltd - India
- Semirara Mining Corp, Philippines
- GMR Energy Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Makarim & Taira - Indonesia
- Cement Manufacturers Association - India
- Ministry of Transport, Egypt
- Sree Jayajothi Cements Limited - India
- Maheswari Brothers Coal Limited - India
- Miang Besar Coal Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Holcim Trading Pte Ltd - Singapore
- Orica Australia Pty. Ltd.
- Karaikal Port Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Aditya Birla Group - India
- Mjunction Services Limited - India
- PowerSource Philippines DevCo
- The State Trading Corporation of India Ltd
- Orica Mining Services - Indonesia
- Bhatia International Limited - India
- Mercator Lines Limited - India
- Antam Resourcindo - Indonesia
- Edison Trading Spa - Italy
- Banpu Public Company Limited - Thailand
- MS Steel International - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Power Finance Corporation Ltd., India
- Deloitte Consulting - India
- Neyveli Lignite Corporation Ltd, - India
- PNOC Exploration Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Wilmar Investment Holdings
- Directorate General of MIneral and Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Eastern Energy - Thailand
- Mercuria Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- India Bulls Power Limited - India
- Oldendorff Carriers - Singapore
- Renaissance Capital - South Africa
- Indonesian Coal Mining Association
- Malabar Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indika Energy - Indonesia
- Borneo Indobara - Indonesia
- PTC India Limited - India
- Coastal Gujarat Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Larsen & Toubro Limited - India
- Ceylon Electricity Board - Sri Lanka
- Posco Energy - South Korea
- GVK Power & Infra Limited - India
- Kideco Jaya Agung - Indonesia
- OPG Power Generation Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Altura Mining Limited, Indonesia
- Chettinad Cement Corporation Ltd - India
- Iligan Light & Power Inc, Philippines
- Georgia Ports Authority, United States
- Star Paper Mills Limited - India
- Gujarat Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Rio Tinto Coal - Australia
- Central Electricity Authority - India
- Goldman Sachs - Singapore
- Billiton Holdings Pty Ltd - Australia
- Vedanta Resources Plc - India
- Sarangani Energy Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Uttam Galva Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Toyota Tsusho Corporation, Japan
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- CNBM International Corporation - China
- Krishnapatnam Port Company Ltd. - India
- SMC Global Power, Philippines
- Electricity Generating Authority of Thailand
- GN Power Mariveles Coal Plant, Philippines
- Kapuas Tunggal Persada - Indonesia
- Bharathi Cement Corporation - India
- Metalloyd Limited - United Kingdom
- Kepco SPC Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Energy Development Corp, Philippines
- Independent Power Producers Association of India
- Gujarat Sidhee Cement - India
- Kumho Petrochemical, South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- Cigading International Bulk Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thai Mozambique Logistica
- Trasteel International SA, Italy
- Barasentosa Lestari - Indonesia
- Central Java Power - Indonesia
- Manunggal Multi Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Standard Chartered Bank - UAE
- Africa Commodities Group - South Africa
- Bhoruka Overseas - Indonesia
- Sindya Power Generating Company Private Ltd
- Bhushan Steel Limited - India
- San Jose City I Power Corp, Philippines
- Jaiprakash Power Ventures ltd
- Price Waterhouse Coopers - Russia
- Rashtriya Ispat Nigam Limited - India
- Parliament of New Zealand
- Baramulti Group, Indonesia
- Aboitiz Power Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Coal and Oil Company - UAE
- Medco Energi Mining Internasional
- Port Waratah Coal Services - Australia
- Riau Bara Harum - Indonesia
- Salva Resources Pvt Ltd - India
- Petron Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- London Commodity Brokers - England
- SN Aboitiz Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- European Bulk Services B.V. - Netherlands
- Mintek Dendrill Indonesia
- Australian Commodity Traders Exchange
- Dalmia Cement Bharat India
- Maharashtra Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Indogreen Group - Indonesia
- Commonwealth Bank - Australia
- Siam City Cement - Thailand
- McConnell Dowell - Australia
- Agrawal Coal Company - India
- Coalindo Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- New Zealand Coal & Carbon
- Energy Link Ltd, New Zealand
- Sakthi Sugars Limited - India
- Tamil Nadu electricity Board
- Pipit Mutiara Jaya. PT, Indonesia
- Sical Logistics Limited - India
- Meenaskhi Energy Private Limited - India
- Chamber of Mines of South Africa
- CIMB Investment Bank - Malaysia
- Lanco Infratech Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Coal Council - USA
- Attock Cement Pakistan Limited
- Intertek Mineral Services - Indonesia
- ASAPP Information Group - India
- Bukit Makmur.PT - Indonesia
- White Energy Company Limited
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Vizag Seaport Private Limited - India
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