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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 $500 million nickel project in North Maluku in Indonesia.
"If the regulation is not amended, new investors will think over before investing because it will increase costs and not every mining company is capable of increasing their investment," said Soemarno of the Indonesia Mining Association.
Source: Reuters / Alibaba
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Sunday, 22 November 09
SHORT PERIOD RATES FOR SUPRAMAX WAS AT US$ 25,000/26,000 PER DAY FOR VESSELS OPENING FAR EAST / SE ASIA - VISTAAR ANALYSIS
COALspot.com (Singapore): Analyised by Capt. Radhakrishnan Reddy, Managing Director of Vistaar Shipping Services, Singapore.
BDI hits a new high ...
Friday, 20 November 09
INDONESIA UNITED TRACTORS PLANS $430 MLN CAPEX IN 2010
Reuters reported that, Indonesian heavy equipment distributor and mining contractor PT United Tractors Tbk plans capital expenditure of $430 million ...
Friday, 20 November 09
DRY BULK SHIP OWNERS HOPE RALLY WILL LAST
Boon times are still on the daily agenda of every dry bulk ship owner these days after one of the toughest year in the industry’s century-old ...
Friday, 20 November 09
NTPC LOOKING FOR LONG TERM CONTRACTS FOR COAL IMPORT
Business Standard of India reported that, State run power firm NTPC today said it is looking for long-term supply of coal from overseas market to me ...
Friday, 20 November 09
CHINESE COKING COAL SUPPLY TO BE 'TIGHT' IN 2010, KGI SAYS
Bloomberg Reported that, Stephen Wang, an analyst with KGI Securities in Taipei, comments on the outlook for Chinese steel production and demand for ...
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- Gujarat Mineral Development Corp Ltd - India
- Bayan Resources Tbk. - Indonesia
- Ind-Barath Power Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Kobexindo Tractors - Indoneisa
- Borneo Indobara - Indonesia
- Wilmar Investment Holdings
- Global Business Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Petron Corporation, Philippines
- Salva Resources Pvt Ltd - India
- CNBM International Corporation - China
- Semirara Mining and Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Therma Luzon, Inc, Philippines
- Sojitz Corporation - Japan
- Gujarat Sidhee Cement - India
- Holcim Trading Pte Ltd - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Manunggal Multi Energi - Indonesia
- Parry Sugars Refinery, India
- Port Waratah Coal Services - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Attock Cement Pakistan Limited
- Cigading International Bulk Terminal - Indonesia
- Electricity Authority, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Price Waterhouse Coopers - Russia
- Star Paper Mills Limited - India
- Ministry of Mines - Canada
- Billiton Holdings Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Electricity Generating Authority of Thailand
- Siam City Cement PLC, Thailand
- India Bulls Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Economic Council, Georgia
- OPG Power Generation Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Link Ltd, New Zealand
- Agrawal Coal Company - India
- Energy Development Corp, Philippines
- IEA Clean Coal Centre - UK
- Intertek Mineral Services - Indonesia
- Australian Coal Association
- Coastal Gujarat Power Limited - India
- Edison Trading Spa - Italy
- AsiaOL BioFuels Corp., Philippines
- Karaikal Port Pvt Ltd - India
- Indian Oil Corporation Limited
- Global Coal Blending Company Limited - Australia
- Orica Mining Services - Indonesia
- Trasteel International SA, Italy
- Thai Mozambique Logistica
- Baramulti Group, Indonesia
- Directorate Of Revenue Intelligence - India
- Interocean Group of Companies - India
- Essar Steel Hazira Ltd - India
- Bukit Baiduri Energy - Indonesia
- Bharathi Cement Corporation - India
- Formosa Plastics Group - Taiwan
- Vizag Seaport Private Limited - India
- Lanco Infratech Ltd - India
- Riau Bara Harum - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Coalindo Energy - Indonesia
- Ambuja Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Semirara Mining Corp, Philippines
- South Luzon Thermal Energy Corporation
- European Bulk Services B.V. - Netherlands
- PTC India Limited - India
- Ministry of Transport, Egypt
- Meenaskhi Energy Private Limited - India
- Coal and Oil Company - UAE
- Indian Energy Exchange, India
- Kaltim Prima Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Aditya Birla Group - India
- Jindal Steel & Power Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Cement Manufacturers Association - India
- MS Steel International - UAE
- Chettinad Cement Corporation Ltd - India
- Global Green Power PLC Corporation, Philippines
- Posco Energy - South Korea
- Alfred C Toepfer International GmbH - Germany
- CIMB Investment Bank - Malaysia
- Deloitte Consulting - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- GVK Power & Infra Limited - India
- Vedanta Resources Plc - India
- Bhoruka Overseas - Indonesia
- Bhatia International Limited - India
- Pendopo Energi Batubara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Altura Mining Limited, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- PowerSource Philippines DevCo
- Rio Tinto Coal - Australia
- PNOC Exploration Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Chamber of Mines of South Africa
- Siam City Cement - Thailand
- Independent Power Producers Association of India
- Medco Energi Mining Internasional
- McConnell Dowell - Australia
- Toyota Tsusho Corporation, Japan
- Sindya Power Generating Company Private Ltd
- The University of Queensland
- Bulk Trading Sa - Switzerland
- Dalmia Cement Bharat India
- International Coal Ventures Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Minerals Council of Australia
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- ASAPP Information Group - India
- Kartika Selabumi Mining - Indonesia
- Power Finance Corporation Ltd., India
- SN Aboitiz Power Inc, Philippines
- Georgia Ports Authority, United States
- Central Electricity Authority - India
- Barasentosa Lestari - Indonesia
- Antam Resourcindo - Indonesia
- Straits Asia Resources Limited - Singapore
- Mintek Dendrill Indonesia
- Sakthi Sugars Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Videocon Industries ltd - India
- Orica Australia Pty. Ltd.
- Metalloyd Limited - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- Wood Mackenzie - Singapore
- New Zealand Coal & Carbon
- Eastern Energy - Thailand
- Madhucon Powers Ltd - India
- Goldman Sachs - Singapore
- Iligan Light & Power Inc, Philippines
- Bangladesh Power Developement Board
- Marubeni Corporation - India
- TeaM Sual Corporation - Philippines
- Standard Chartered Bank - UAE
- Malabar Cements Ltd - India
- Eastern Coal Council - USA
- Indo Tambangraya Megah - Indonesia
- Oldendorff Carriers - Singapore
- Jaiprakash Power Ventures ltd
- SMC Global Power, Philippines
- Krishnapatnam Port Company Ltd. - India
- Parliament of New Zealand
- Tata Chemicals Ltd - India
- Mjunction Services Limited - India
- Kepco SPC Power Corporation, Philippines
- Heidelberg Cement - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Australian Commodity Traders Exchange
- San Jose City I Power Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Latin American Coal - Colombia
- Sree Jayajothi Cements Limited - India
- GAC Shipping (India) Pvt Ltd
- Mercuria Energy - Indonesia
- Ministry of Finance - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Indogreen Group - Indonesia
- GMR Energy Limited - India
- Aboitiz Power Corporation - Philippines
- Larsen & Toubro Limited - India
- Indika Energy - Indonesia
- VISA Power Limited - India
- Uttam Galva Steels Limited - India
- Tamil Nadu electricity Board
- ICICI Bank Limited - India
- Singapore Mercantile Exchange
- White Energy Company Limited
- Indonesian Coal Mining Association
- Kideco Jaya Agung - Indonesia
- Thiess Contractors Indonesia
- Africa Commodities Group - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maheswari Brothers Coal Limited - India
- Bhushan Steel Limited - India
- Mercator Lines Limited - India
- Commonwealth Bank - Australia
- Globalindo Alam Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- SMG Consultants - Indonesia
- Savvy Resources Ltd - HongKong
- Sical Logistics Limited - India
- Carbofer General Trading SA - India
- London Commodity Brokers - England
- Ceylon Electricity Board - Sri Lanka
- Xindia Steels Limited - India
- Kumho Petrochemical, South Korea
- Gujarat Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Samtan Co., Ltd - South Korea
- Sarangani Energy Corporation, Philippines
- Planning Commission, India
- Leighton Contractors Pty Ltd - Australia
- Renaissance Capital - South Africa
- Central Java Power - Indonesia
- Romanian Commodities Exchange
- Bukit Makmur.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- The Treasury - Australian Government
- Grasim Industreis Ltd - India
- Banpu Public Company Limited - Thailand
- Anglo American - United Kingdom
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