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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, 26 November 09
CIL EYES OVERSEAS ACQUISITIONS TO BRIDGE SUPPLY GAP
Coal Minister Sriprakash Jaiswal on Wednesday said that state-run coal major Coal India is looking to acquire coal blocks in the US and
othe ...
Wednesday, 25 November 09
NAPOCOR SCRAPS AWARD OF 715,000 TONS COAL
Top Philippine electricity producer National Power Corp. (Napocor) said on Wednesday it had cancelled plans to award 715,000 tons in coal supply con ...
Wednesday, 25 November 09
RISING FREIGHT RATES HIT COAL IMPORTERS
While state-owned NTPC’s 12.5 million tonne coal import order may have been aimed at plugging the shortage of coal at its thermal power plants ...
Wednesday, 25 November 09
CSN TO BUY RIVERSDALE STAKE TO BOOST COAL SUPPLIES
Cia. Siderurgica Nacional SA plans to buy 16.3 percent of Australian coal-exploration company Riversdale Mining Ltd. for about A$190.5 million ($175 ...
Tuesday, 24 November 09
ICRA DOWNGRADES TNPL`S RATING TO LAA
Credit rating agency, ICRA has revised the long term rating for the Rs 11.25 billion long-term fund-based bank facilities and Rs 1.5 billion non-con ...
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- Bukit Baiduri Energy - Indonesia
- Renaissance Capital - South Africa
- Sree Jayajothi Cements Limited - India
- Simpson Spence & Young - Indonesia
- Rashtriya Ispat Nigam Limited - India
- PowerSource Philippines DevCo
- South Luzon Thermal Energy Corporation
- Carbofer General Trading SA - India
- Attock Cement Pakistan Limited
- Price Waterhouse Coopers - Russia
- Thiess Contractors Indonesia
- Energy Development Corp, Philippines
- Parry Sugars Refinery, India
- Intertek Mineral Services - Indonesia
- Indian Energy Exchange, India
- Binh Thuan Hamico - Vietnam
- Eastern Energy - Thailand
- Bukit Makmur.PT - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Anglo American - United Kingdom
- Jindal Steel & Power Ltd - India
- Borneo Indobara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Therma Luzon, Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement - Thailand
- Antam Resourcindo - Indonesia
- The University of Queensland
- Star Paper Mills Limited - India
- Directorate Of Revenue Intelligence - India
- White Energy Company Limited
- Sinarmas Energy and Mining - Indonesia
- Videocon Industries ltd - India
- Kalimantan Lumbung Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Deloitte Consulting - India
- Ministry of Finance - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Africa Commodities Group - South Africa
- Krishnapatnam Port Company Ltd. - India
- Directorate General of MIneral and Coal - Indonesia
- Eastern Coal Council - USA
- Heidelberg Cement - Germany
- Xindia Steels Limited - India
- Ministry of Mines - Canada
- LBH Netherlands Bv - Netherlands
- Gujarat Sidhee Cement - India
- Dalmia Cement Bharat India
- Wilmar Investment Holdings
- Asmin Koalindo Tuhup - Indonesia
- Ind-Barath Power Infra Limited - India
- Standard Chartered Bank - UAE
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Indogreen Group - Indonesia
- Coal and Oil Company - UAE
- Romanian Commodities Exchange
- Coalindo Energy - Indonesia
- Minerals Council of Australia
- Medco Energi Mining Internasional
- CNBM International Corporation - China
- Cigading International Bulk Terminal - Indonesia
- Trasteel International SA, Italy
- Manunggal Multi Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jaiprakash Power Ventures ltd
- TeaM Sual Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Sojitz Corporation - Japan
- GVK Power & Infra Limited - India
- MS Steel International - UAE
- Singapore Mercantile Exchange
- Ministry of Transport, Egypt
- Kohat Cement Company Ltd. - Pakistan
- Metalloyd Limited - United Kingdom
- Global Business Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Altura Mining Limited, Indonesia
- IEA Clean Coal Centre - UK
- Planning Commission, India
- Bahari Cakrawala Sebuku - Indonesia
- Latin American Coal - Colombia
- Leighton Contractors Pty Ltd - Australia
- London Commodity Brokers - England
- Timah Investasi Mineral - Indoneisa
- Tata Chemicals Ltd - India
- SN Aboitiz Power Inc, Philippines
- Agrawal Coal Company - India
- Orica Australia Pty. Ltd.
- Rio Tinto Coal - Australia
- Banpu Public Company Limited - Thailand
- Semirara Mining and Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Uttam Galva Steels Limited - India
- Semirara Mining Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Baramulti Group, Indonesia
- OPG Power Generation Pvt Ltd - India
- Petron Corporation, Philippines
- Parliament of New Zealand
- Lanco Infratech Ltd - India
- Aditya Birla Group - India
- Kepco SPC Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- SMG Consultants - Indonesia
- Vedanta Resources Plc - India
- Power Finance Corporation Ltd., India
- Riau Bara Harum - Indonesia
- Australian Commodity Traders Exchange
- Kartika Selabumi Mining - Indonesia
- Kumho Petrochemical, South Korea
- Larsen & Toubro Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Authority, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- PTC India Limited - India
- Kaltim Prima Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- Mercator Lines Limited - India
- Meralco Power Generation, Philippines
- Salva Resources Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Kobexindo Tractors - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Mjunction Services Limited - India
- Coastal Gujarat Power Limited - India
- Ambuja Cements Ltd - India
- The State Trading Corporation of India Ltd
- India Bulls Power Limited - India
- Economic Council, Georgia
- Gujarat Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Oldendorff Carriers - Singapore
- ASAPP Information Group - India
- Bulk Trading Sa - Switzerland
- Bhushan Steel Limited - India
- Savvy Resources Ltd - HongKong
- GMR Energy Limited - India
- Sindya Power Generating Company Private Ltd
- Karbindo Abesyapradhi - Indoneisa
- SMC Global Power, Philippines
- Makarim & Taira - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mintek Dendrill Indonesia
- The Treasury - Australian Government
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- Merrill Lynch Commodities Europe
- Central Java Power - Indonesia
- Independent Power Producers Association of India
- Vizag Seaport Private Limited - India
- Sakthi Sugars Limited - India
- Madhucon Powers Ltd - India
- Energy Link Ltd, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Oil Corporation Limited
- Holcim Trading Pte Ltd - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- Wood Mackenzie - Singapore
- Edison Trading Spa - Italy
- ICICI Bank Limited - India
- Malabar Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Bangladesh Power Developement Board
- Grasim Industreis Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Tamil Nadu electricity Board
- Maheswari Brothers Coal Limited - India
- Alfred C Toepfer International GmbH - Germany
- Billiton Holdings Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- Cement Manufacturers Association - India
- Aboitiz Power Corporation - Philippines
- Bhatia International Limited - India
- Sical Logistics Limited - India
- Meenaskhi Energy Private Limited - India
- Mercuria Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Globalindo Alam Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Miang Besar Coal Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- Port Waratah Coal Services - Australia
- Indonesian Coal Mining Association
- Kideco Jaya Agung - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Indo Tambangraya Megah - Indonesia
- Goldman Sachs - Singapore
- Pendopo Energi Batubara - Indonesia
- European Bulk Services B.V. - Netherlands
- Iligan Light & Power Inc, Philippines
- Bharathi Cement Corporation - India
- Global Green Power PLC Corporation, Philippines
- Posco Energy - South Korea
- Orica Mining Services - Indonesia
- Indika Energy - Indonesia
- Central Electricity Authority - India
- Chamber of Mines of South Africa
- Barasentosa Lestari - Indonesia
- Georgia Ports Authority, United States
- Thai Mozambique Logistica
- Electricity Generating Authority of Thailand
- CIMB Investment Bank - Malaysia
- Australian Coal Association
- Interocean Group of Companies - India
- New Zealand Coal & Carbon
- Ceylon Electricity Board - Sri Lanka
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