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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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- Bulk Trading Sa - Switzerland
- Dalmia Cement Bharat India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Timah Investasi Mineral - Indoneisa
- Sree Jayajothi Cements Limited - India
- Agrawal Coal Company - India
- Holcim Trading Pte Ltd - Singapore
- Deloitte Consulting - India
- The State Trading Corporation of India Ltd
- Ministry of Mines - Canada
- Cement Manufacturers Association - India
- Indogreen Group - Indonesia
- Merrill Lynch Commodities Europe
- Chamber of Mines of South Africa
- Bhoruka Overseas - Indonesia
- South Luzon Thermal Energy Corporation
- Anglo American - United Kingdom
- Orica Australia Pty. Ltd.
- Jindal Steel & Power Ltd - India
- Bukit Baiduri Energy - Indonesia
- Commonwealth Bank - Australia
- Attock Cement Pakistan Limited
- Orica Mining Services - Indonesia
- IHS Mccloskey Coal Group - USA
- Billiton Holdings Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Meralco Power Generation, Philippines
- Economic Council, Georgia
- Heidelberg Cement - Germany
- Mjunction Services Limited - India
- Bayan Resources Tbk. - Indonesia
- Indian Energy Exchange, India
- Kumho Petrochemical, South Korea
- Kapuas Tunggal Persada - Indonesia
- Binh Thuan Hamico - Vietnam
- The University of Queensland
- Maheswari Brothers Coal Limited - India
- Semirara Mining and Power Corporation, Philippines
- PowerSource Philippines DevCo
- Mercator Lines Limited - India
- Globalindo Alam Lestari - Indonesia
- Australian Commodity Traders Exchange
- Coal and Oil Company - UAE
- Gujarat Sidhee Cement - India
- GMR Energy Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Tata Chemicals Ltd - India
- Sarangani Energy Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Grasim Industreis Ltd - India
- Essar Steel Hazira Ltd - India
- Simpson Spence & Young - Indonesia
- Kobexindo Tractors - Indoneisa
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Global Green Power PLC Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Aditya Birla Group - India
- Maharashtra Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Aboitiz Power Corporation - Philippines
- Thai Mozambique Logistica
- Vizag Seaport Private Limited - India
- VISA Power Limited - India
- Bhushan Steel Limited - India
- Banpu Public Company Limited - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Indonesian Coal Mining Association
- Mercuria Energy - Indonesia
- Malabar Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Madhucon Powers Ltd - India
- Singapore Mercantile Exchange
- Energy Link Ltd, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Uttam Galva Steels Limited - India
- Australian Coal Association
- Neyveli Lignite Corporation Ltd, - India
- Indian Oil Corporation Limited
- White Energy Company Limited
- Videocon Industries ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- Minerals Council of Australia
- CNBM International Corporation - China
- Georgia Ports Authority, United States
- Global Business Power Corporation, Philippines
- McConnell Dowell - Australia
- International Coal Ventures Pvt Ltd - India
- Wood Mackenzie - Singapore
- Global Coal Blending Company Limited - Australia
- Ceylon Electricity Board - Sri Lanka
- Directorate Of Revenue Intelligence - India
- Baramulti Group, Indonesia
- SMG Consultants - Indonesia
- Semirara Mining Corp, Philippines
- Indika Energy - Indonesia
- Central Electricity Authority - India
- Siam City Cement - Thailand
- Goldman Sachs - Singapore
- LBH Netherlands Bv - Netherlands
- Interocean Group of Companies - India
- Wilmar Investment Holdings
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Bukit Asam (Persero) Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- ICICI Bank Limited - India
- Sical Logistics Limited - India
- Parry Sugars Refinery, India
- Borneo Indobara - Indonesia
- Karaikal Port Pvt Ltd - India
- Posco Energy - South Korea
- Eastern Coal Council - USA
- Altura Mining Limited, Indonesia
- Latin American Coal - Colombia
- Gujarat Mineral Development Corp Ltd - India
- Makarim & Taira - Indonesia
- Chettinad Cement Corporation Ltd - India
- Energy Development Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Tamil Nadu electricity Board
- GAC Shipping (India) Pvt Ltd
- Riau Bara Harum - Indonesia
- Parliament of New Zealand
- Ministry of Transport, Egypt
- Therma Luzon, Inc, Philippines
- Jaiprakash Power Ventures ltd
- Pendopo Energi Batubara - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Petron Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Sojitz Corporation - Japan
- Carbofer General Trading SA - India
- India Bulls Power Limited - India
- Savvy Resources Ltd - HongKong
- Salva Resources Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Bhatia International Limited - India
- Manunggal Multi Energi - Indonesia
- Renaissance Capital - South Africa
- Cigading International Bulk Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Vijayanagar Sugar Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- European Bulk Services B.V. - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- Xindia Steels Limited - India
- Star Paper Mills Limited - India
- Krishnapatnam Port Company Ltd. - India
- Kaltim Prima Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Africa Commodities Group - South Africa
- Samtan Co., Ltd - South Korea
- GVK Power & Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Sakthi Sugars Limited - India
- Eastern Energy - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Trasteel International SA, Italy
- TeaM Sual Corporation - Philippines
- Port Waratah Coal Services - Australia
- Asmin Koalindo Tuhup - Indonesia
- Barasentosa Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- Romanian Commodities Exchange
- Coalindo Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Thiess Contractors Indonesia
- Siam City Cement PLC, Thailand
- The Treasury - Australian Government
- Ambuja Cements Ltd - India
- PTC India Limited - India
- Independent Power Producers Association of India
- Intertek Mineral Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Price Waterhouse Coopers - Russia
- IEA Clean Coal Centre - UK
- Medco Energi Mining Internasional
- Larsen & Toubro Limited - India
- Straits Asia Resources Limited - Singapore
- Leighton Contractors Pty Ltd - Australia
- MS Steel International - UAE
- London Commodity Brokers - England
- Rio Tinto Coal - Australia
- Mintek Dendrill Indonesia
- Central Java Power - Indonesia
- Ministry of Finance - Indonesia
- Vedanta Resources Plc - India
- Bukit Makmur.PT - Indonesia
- Antam Resourcindo - Indonesia
- ASAPP Information Group - India
- New Zealand Coal & Carbon
- GN Power Mariveles Coal Plant, Philippines
- Coastal Gujarat Power Limited - India
- Oldendorff Carriers - Singapore
- Alfred C Toepfer International GmbH - Germany
- SMC Global Power, Philippines
- Standard Chartered Bank - UAE
- Directorate General of MIneral and Coal - Indonesia
- Marubeni Corporation - India
- Kepco SPC Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Bangladesh Power Developement Board
- Electricity Authority, New Zealand
- Planning Commission, India
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