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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, 19 November 09
FAST-TRACK FOCUS ON COAL POWER MAY COST INDONESIA BILLIONS
The Jakartaglobe reported that, As it begins to tap its massive coal reserves to generate cheap electricity, Indonesia may face additional costs of ...
Wednesday, 18 November 09
THAI PTT PLANS COAL MINE INVESTMENT IN INDONESIA
* To conclude Indonesian coal mine buy in 6 months
* Sees coal output jumping to 20 mln tonnes in five years
Reuters reported that, PTT , ...
Wednesday, 18 November 09
ASIA-PACIFIC MINISTERIAL CONFERENCE ON PUBLIC-PRIVATE PARTNERSHIPS FOR INFRASTRUCTURE DEVELOPMENT
“Building Asia’s Infrastructure”
COALspot.com (Indonesia) Press Release: Infrastructure Asia 2010 is Asia’s premier infra ...
Wednesday, 18 November 09
AMBUJA COAL TENDER PRICES EQUATE TO $61.50/T FOB
Reuters reported that, coal prices achieved by Indian cement maker Gujarat Ambuja in its early November tender equate to $61.50 a tonne FOB Richards ...
Tuesday, 17 November 09
JSW STEEL MAY SPEND $500 MILLION TO ACQUIRE COAL MINES OVERSEAS
JSW Steel Ltd., India’s third- biggest producer, may spend $500 million buying coal mines overseas, securing supplies for its local expansion. ...
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- Grasim Industreis Ltd - India
- Goldman Sachs - Singapore
- Semirara Mining Corp, Philippines
- GMR Energy Limited - India
- Deloitte Consulting - India
- Globalindo Alam Lestari - Indonesia
- Agrawal Coal Company - India
- Latin American Coal - Colombia
- Heidelberg Cement - Germany
- Maheswari Brothers Coal Limited - India
- Ministry of Transport, Egypt
- Bahari Cakrawala Sebuku - Indonesia
- Ambuja Cements Ltd - India
- Romanian Commodities Exchange
- Orica Mining Services - Indonesia
- Bulk Trading Sa - Switzerland
- Vedanta Resources Plc - India
- London Commodity Brokers - England
- Sical Logistics Limited - India
- OPG Power Generation Pvt Ltd - India
- Malabar Cements Ltd - India
- GVK Power & Infra Limited - India
- Carbofer General Trading SA - India
- San Jose City I Power Corp, Philippines
- Ministry of Finance - Indonesia
- International Coal Ventures Pvt Ltd - India
- Central Electricity Authority - India
- Directorate General of MIneral and Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Lanco Infratech Ltd - India
- Vizag Seaport Private Limited - India
- Karaikal Port Pvt Ltd - India
- Rio Tinto Coal - Australia
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- Indogreen Group - Indonesia
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- Mercuria Energy - Indonesia
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- Chamber of Mines of South Africa
- Australian Coal Association
- Economic Council, Georgia
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- Iligan Light & Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- VISA Power Limited - India
- Cement Manufacturers Association - India
- Bayan Resources Tbk. - Indonesia
- Metalloyd Limited - United Kingdom
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- Sinarmas Energy and Mining - Indonesia
- Sakthi Sugars Limited - India
- Attock Cement Pakistan Limited
- Banpu Public Company Limited - Thailand
- GAC Shipping (India) Pvt Ltd
- Kideco Jaya Agung - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Xindia Steels Limited - India
- Indian Oil Corporation Limited
- Mintek Dendrill Indonesia
- Price Waterhouse Coopers - Russia
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- Edison Trading Spa - Italy
- Siam City Cement PLC, Thailand
- PNOC Exploration Corporation - Philippines
- Videocon Industries ltd - India
- Planning Commission, India
- Star Paper Mills Limited - India
- Energy Link Ltd, New Zealand
- Leighton Contractors Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Bhatia International Limited - India
- Ministry of Mines - Canada
- Jorong Barutama Greston.PT - Indonesia
- Orica Australia Pty. Ltd.
- Energy Development Corp, Philippines
- Georgia Ports Authority, United States
- Anglo American - United Kingdom
- Bukit Makmur.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Australian Commodity Traders Exchange
- Binh Thuan Hamico - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Wood Mackenzie - Singapore
- Uttam Galva Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Parliament of New Zealand
- Sojitz Corporation - Japan
- Larsen & Toubro Limited - India
- Indian Energy Exchange, India
- TNB Fuel Sdn Bhd - Malaysia
- IHS Mccloskey Coal Group - USA
- Therma Luzon, Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Borneo Indobara - Indonesia
- Port Waratah Coal Services - Australia
- Indo Tambangraya Megah - Indonesia
- India Bulls Power Limited - India
- Dalmia Cement Bharat India
- Bhushan Steel Limited - India
- Altura Mining Limited, Indonesia
- Indonesian Coal Mining Association
- White Energy Company Limited
- MS Steel International - UAE
- IEA Clean Coal Centre - UK
- Electricity Authority, New Zealand
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- Bhoruka Overseas - Indonesia
- Global Green Power PLC Corporation, Philippines
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- Kobexindo Tractors - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Medco Energi Mining Internasional
- Thiess Contractors Indonesia
- Jaiprakash Power Ventures ltd
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- Mjunction Services Limited - India
- Ind-Barath Power Infra Limited - India
- Salva Resources Pvt Ltd - India
- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
- Eastern Coal Council - USA
- Meenaskhi Energy Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Manunggal Multi Energi - Indonesia
- Merrill Lynch Commodities Europe
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
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- Trasteel International SA, Italy
- Jindal Steel & Power Ltd - India
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- Wilmar Investment Holdings
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sarangani Energy Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The State Trading Corporation of India Ltd
- SMG Consultants - Indonesia
- Independent Power Producers Association of India
- The University of Queensland
- Minerals Council of Australia
- Global Business Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Singapore Mercantile Exchange
- Bharathi Cement Corporation - India
- New Zealand Coal & Carbon
- Meralco Power Generation, Philippines
- Oldendorff Carriers - Singapore
- McConnell Dowell - Australia
- Electricity Generating Authority of Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Bangladesh Power Developement Board
- European Bulk Services B.V. - Netherlands
- Aboitiz Power Corporation - Philippines
- Mercator Lines Limited - India
- The Treasury - Australian Government
- SMC Global Power, Philippines
- Alfred C Toepfer International GmbH - Germany
- Commonwealth Bank - Australia
- Eastern Energy - Thailand
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- SN Aboitiz Power Inc, Philippines
- Posco Energy - South Korea
- Siam City Cement - Thailand
- Coalindo Energy - Indonesia
- ASAPP Information Group - India
- Holcim Trading Pte Ltd - Singapore
- Cigading International Bulk Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- CNBM International Corporation - China
- Indika Energy - Indonesia
- Makarim & Taira - Indonesia
- Straits Asia Resources Limited - Singapore
- Kartika Selabumi Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Coal and Oil Company - UAE
- Standard Chartered Bank - UAE
- Renaissance Capital - South Africa
- Gujarat Sidhee Cement - India
- ICICI Bank Limited - India
- South Luzon Thermal Energy Corporation
- Bank of Tokyo Mitsubishi UFJ Ltd
- Samtan Co., Ltd - South Korea
- Ceylon Electricity Board - Sri Lanka
- TeaM Sual Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Kepco SPC Power Corporation, Philippines
- Interocean Group of Companies - India
- GN Power Mariveles Coal Plant, Philippines
- Global Coal Blending Company Limited - Australia
- Kohat Cement Company Ltd. - Pakistan
- Billiton Holdings Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- Central Java Power - Indonesia
- Riau Bara Harum - Indonesia
- Tamil Nadu electricity Board
- Tata Chemicals Ltd - India
- Barasentosa Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- PTC India Limited - India
- Toyota Tsusho Corporation, Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- Petron Corporation, Philippines
- Sree Jayajothi Cements Limited - India
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