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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, 27 November 09
BHP SEEKS VARIABLE COKING COAL PRICE IN JAPAN, NIKKEI SAYS
Bloomberg reproted that, BHP Billiton Ltd. has asked Japanese steelmakers to move to pricing of coking coal linked to spot rates rather than negotia ...
Friday, 27 November 09
EXXARO SEES HIGH COAL DEMAND RAISING PRICES
Reuters reported that, South African diversified miner Exxaro Resources said on Thursday it expected coal prices to rise to between $70 and $75 per ...
Friday, 27 November 09
CENTENNIAL SAYS ENERGY-COAL PRICE TO RISE AS CHINA SEEKS FUEL
Bloomberg reported that, Centennial Coal Co., an Australian producer of the fuel, said contract prices are expected to rise in 2010, with Chinese co ...
Friday, 27 November 09
IN FIRST-10-MONTH OF 2009 COAL IMPORTS IN GUANGXI-FANGCHENG EXCEEDED FULL-2008 IMPORTS
According to Customs statistics, during the January-October, Fangcheng port accumulatively imported 3.676mln tons valuing U.S.$370, rising by 53.8% ...
Thursday, 26 November 09
CHINA'S COAL IMPORTS TO RISE BY 170 PERCENT IN 2009
According to the statistics released by China's General Administration of Customs on November 23, China's coal imports for October totaled 11.1 mi ...
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- SN Aboitiz Power Inc, Philippines
- Meralco Power Generation, Philippines
- Coalindo Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Energy Development Corp, Philippines
- Thiess Contractors Indonesia
- Ambuja Cements Ltd - India
- Interocean Group of Companies - India
- Goldman Sachs - Singapore
- Thai Mozambique Logistica
- Formosa Plastics Group - Taiwan
- Indian Energy Exchange, India
- Agrawal Coal Company - India
- Global Green Power PLC Corporation, Philippines
- Altura Mining Limited, Indonesia
- Planning Commission, India
- Marubeni Corporation - India
- Meenaskhi Energy Private Limited - India
- Global Coal Blending Company Limited - Australia
- Baramulti Group, Indonesia
- Larsen & Toubro Limited - India
- Posco Energy - South Korea
- Minerals Council of Australia
- CIMB Investment Bank - Malaysia
- Coal and Oil Company - UAE
- Makarim & Taira - Indonesia
- Bhushan Steel Limited - India
- Independent Power Producers Association of India
- Eastern Coal Council - USA
- Ministry of Finance - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Intertek Mineral Services - Indonesia
- Bharathi Cement Corporation - India
- Singapore Mercantile Exchange
- Indonesian Coal Mining Association
- Wood Mackenzie - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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- White Energy Company Limited
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- Semirara Mining and Power Corporation, Philippines
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- Power Finance Corporation Ltd., India
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- India Bulls Power Limited - India
- CNBM International Corporation - China
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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- Vedanta Resources Plc - India
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- Trasteel International SA, Italy
- Directorate Of Revenue Intelligence - India
- Sree Jayajothi Cements Limited - India
- Toyota Tsusho Corporation, Japan
- The Treasury - Australian Government
- Deloitte Consulting - India
- Orica Australia Pty. Ltd.
- GVK Power & Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Aditya Birla Group - India
- Jindal Steel & Power Ltd - India
- Gujarat Electricity Regulatory Commission - India
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- Wilmar Investment Holdings
- Kartika Selabumi Mining - Indonesia
- SMG Consultants - Indonesia
- ICICI Bank Limited - India
- Orica Mining Services - Indonesia
- Global Business Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Merrill Lynch Commodities Europe
- Oldendorff Carriers - Singapore
- Kobexindo Tractors - Indoneisa
- Mercator Lines Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Central Electricity Authority - India
- Carbofer General Trading SA - India
- Bangladesh Power Developement Board
- London Commodity Brokers - England
- Semirara Mining Corp, Philippines
- New Zealand Coal & Carbon
- Medco Energi Mining Internasional
- Siam City Cement - Thailand
- Bhatia International Limited - India
- Indian Oil Corporation Limited
- Timah Investasi Mineral - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vizag Seaport Private Limited - India
- Indogreen Group - Indonesia
- Tamil Nadu electricity Board
- Gujarat Mineral Development Corp Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Videocon Industries ltd - India
- Eastern Energy - Thailand
- Savvy Resources Ltd - HongKong
- Jaiprakash Power Ventures ltd
- Kalimantan Lumbung Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Cigading International Bulk Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- Madhucon Powers Ltd - India
- Australian Commodity Traders Exchange
- Barasentosa Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- San Jose City I Power Corp, Philippines
- Grasim Industreis Ltd - India
- European Bulk Services B.V. - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Borneo Indobara - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Chamber of Mines of South Africa
- Standard Chartered Bank - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- VISA Power Limited - India
- Central Java Power - Indonesia
- TeaM Sual Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Uttam Galva Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Lanco Infratech Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- PTC India Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Romanian Commodities Exchange
- Kideco Jaya Agung - Indonesia
- Renaissance Capital - South Africa
- Gujarat Sidhee Cement - India
- Attock Cement Pakistan Limited
- PowerSource Philippines DevCo
- GAC Shipping (India) Pvt Ltd
- The University of Queensland
- Therma Luzon, Inc, Philippines
- Simpson Spence & Young - Indonesia
- Star Paper Mills Limited - India
- Sakthi Sugars Limited - India
- Metalloyd Limited - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Samtan Co., Ltd - South Korea
- Dalmia Cement Bharat India
- Electricity Authority, New Zealand
- PNOC Exploration Corporation - Philippines
- Ministry of Transport, Egypt
- Georgia Ports Authority, United States
- Bulk Trading Sa - Switzerland
- Bukit Baiduri Energy - Indonesia
- Mercuria Energy - Indonesia
- Parliament of New Zealand
- Binh Thuan Hamico - Vietnam
- Sojitz Corporation - Japan
- Tata Chemicals Ltd - India
- Commonwealth Bank - Australia
- Mjunction Services Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Mines - Canada
- Miang Besar Coal Terminal - Indonesia
- Heidelberg Cement - Germany
- Chettinad Cement Corporation Ltd - India
- Siam City Cement PLC, Thailand
- Karaikal Port Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Globalindo Alam Lestari - Indonesia
- Africa Commodities Group - South Africa
- Indika Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Mintek Dendrill Indonesia
- Edison Trading Spa - Italy
- Aboitiz Power Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Cement Manufacturers Association - India
- Indo Tambangraya Megah - Indonesia
- Petron Corporation, Philippines
- Australian Coal Association
- Latin American Coal - Colombia
- GMR Energy Limited - India
- Anglo American - United Kingdom
- Malabar Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- International Coal Ventures Pvt Ltd - India
- Antam Resourcindo - Indonesia
- McConnell Dowell - Australia
- Holcim Trading Pte Ltd - Singapore
- Essar Steel Hazira Ltd - India
- Xindia Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- MS Steel International - UAE
- Price Waterhouse Coopers - Russia
- Salva Resources Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IEA Clean Coal Centre - UK
- TNB Fuel Sdn Bhd - Malaysia
- The State Trading Corporation of India Ltd
- Krishnapatnam Port Company Ltd. - India
- SMC Global Power, Philippines
- Alfred C Toepfer International GmbH - Germany
- IHS Mccloskey Coal Group - USA
- GN Power Mariveles Coal Plant, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Energy Link Ltd, New Zealand
- Sical Logistics Limited - India
- Parry Sugars Refinery, India
- AsiaOL BioFuels Corp., Philippines
- Electricity Generating Authority of Thailand
- ASAPP Information Group - India
- Port Waratah Coal Services - Australia
- Sindya Power Generating Company Private Ltd
- Economic Council, Georgia
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