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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 $500 million nickel project in North Maluku in Indonesia.
"If the regulation is not amended, new investors will think over before investing because it will increase costs and not every mining company is capable of increasing their investment," said Soemarno of the Indonesia Mining Association.
Source: Reuters / Alibaba
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Monday, 16 November 09
141 VESSELS ARE EXPECTED TO LOAD 8.833 MILLION TONS OF INDONESIAN COAL BEFORE 30 NOVEMBER 2009
COALspot.com (Indonesia): 141 vessels are expected to load or sail with 8.833 million tons of Indonesian coal before 30 November 2009.
A source f ...
Sunday, 15 November 09
NALCO SHELVES SA PROJECT- PUTS IRAN PROJECT ON HOLD
The Economic Times reported that, In a twin decision on its global operations involving about Rs 27,000-crore (US$ 5.847billions) investment, the st ...
Saturday, 14 November 09
SHORT PERIOD RATES FOR SUPRAMAX WAS AT US$ 19,000 / 20,000 PER DAY FOR VESSELS OPENING FAR EAST / SE ASIA - VISTAAR SINGAPORE
COALspot.com (Singaproe): BDI continues to rally crossing the 4,000 mark. The BDI increased this week by 718 points up by 21 pct and closed at 4,111 ...
Saturday, 14 November 09
CHINA HAS BEEN THE LARGEST SINGLE BUYER OF INDONESIAN COAL IN OCTOBER, TAKING 24.37% OF TOTAL EXPORT QUANTITY OF 22.637 MILLION TONS
COALspot.com (Indonesia): China has been the largest single buyer of Indonesian coal in October 2009, taking 24.37% of total export quantity o ...
Saturday, 14 November 09
ASIA'S POWER SECTOR IS INVESTING IN COALMINES TO SECURE SUPPLIES
COALspot.com (Press Release): Asia Coal Power conference in Jakarta pinpoints growing power demand in Asia & Power sector investments in Indones ...
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- Ministry of Finance - Indonesia
- Billiton Holdings Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Karaikal Port Pvt Ltd - India
- Marubeni Corporation - India
- MS Steel International - UAE
- Maheswari Brothers Coal Limited - India
- Makarim & Taira - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Medco Energi Mining Internasional
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement PLC, Thailand
- London Commodity Brokers - England
- Deloitte Consulting - India
- Australian Coal Association
- Vijayanagar Sugar Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Malabar Cements Ltd - India
- Chamber of Mines of South Africa
- Larsen & Toubro Limited - India
- Thai Mozambique Logistica
- Trasteel International SA, Italy
- Cigading International Bulk Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- PowerSource Philippines DevCo
- CIMB Investment Bank - Malaysia
- Uttam Galva Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- PTC India Limited - India
- Iligan Light & Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- The State Trading Corporation of India Ltd
- Xindia Steels Limited - India
- Tata Chemicals Ltd - India
- PNOC Exploration Corporation - Philippines
- Bangladesh Power Developement Board
- Electricity Generating Authority of Thailand
- Directorate Of Revenue Intelligence - India
- PetroVietnam Power Coal Import and Supply Company
- Coalindo Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Georgia Ports Authority, United States
- VISA Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Interocean Group of Companies - India
- Orica Australia Pty. Ltd.
- Ministry of Mines - Canada
- Manunggal Multi Energi - Indonesia
- Posco Energy - South Korea
- Gujarat Electricity Regulatory Commission - India
- CNBM International Corporation - China
- Semirara Mining and Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Vizag Seaport Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Coal and Oil Company - UAE
- Meralco Power Generation, Philippines
- Anglo American - United Kingdom
- Aboitiz Power Corporation - Philippines
- Videocon Industries ltd - India
- Star Paper Mills Limited - India
- Edison Trading Spa - Italy
- Heidelberg Cement - Germany
- Rashtriya Ispat Nigam Limited - India
- Merrill Lynch Commodities Europe
- Samtan Co., Ltd - South Korea
- SMG Consultants - Indonesia
- Bharathi Cement Corporation - India
- Sojitz Corporation - Japan
- Globalindo Alam Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Semirara Mining Corp, Philippines
- Madhucon Powers Ltd - India
- Romanian Commodities Exchange
- Essar Steel Hazira Ltd - India
- Jindal Steel & Power Ltd - India
- ICICI Bank Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Africa Commodities Group - South Africa
- Global Coal Blending Company Limited - Australia
- Grasim Industreis Ltd - India
- Planning Commission, India
- The University of Queensland
- Indian Energy Exchange, India
- Energy Development Corp, Philippines
- Parliament of New Zealand
- White Energy Company Limited
- Alfred C Toepfer International GmbH - Germany
- Tamil Nadu electricity Board
- IHS Mccloskey Coal Group - USA
- Eastern Energy - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Kartika Selabumi Mining - Indonesia
- Siam City Cement - Thailand
- Aditya Birla Group - India
- Attock Cement Pakistan Limited
- Maharashtra Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- LBH Netherlands Bv - Netherlands
- Toyota Tsusho Corporation, Japan
- Bhoruka Overseas - Indonesia
- International Coal Ventures Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Thiess Contractors Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Altura Mining Limited, Indonesia
- Electricity Authority, New Zealand
- Straits Asia Resources Limited - Singapore
- Petron Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bulk Trading Sa - Switzerland
- Parry Sugars Refinery, India
- Cement Manufacturers Association - India
- Neyveli Lignite Corporation Ltd, - India
- Singapore Mercantile Exchange
- SMC Global Power, Philippines
- Mintek Dendrill Indonesia
- Kobexindo Tractors - Indoneisa
- Savvy Resources Ltd - HongKong
- Agrawal Coal Company - India
- Therma Luzon, Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Independent Power Producers Association of India
- Eastern Coal Council - USA
- Borneo Indobara - Indonesia
- Australian Commodity Traders Exchange
- Mercator Lines Limited - India
- Meenaskhi Energy Private Limited - India
- Wood Mackenzie - Singapore
- Formosa Plastics Group - Taiwan
- Commonwealth Bank - Australia
- Oldendorff Carriers - Singapore
- Standard Chartered Bank - UAE
- Kepco SPC Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Lanco Infratech Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- The Treasury - Australian Government
- Bukit Makmur.PT - Indonesia
- Port Waratah Coal Services - Australia
- Goldman Sachs - Singapore
- Kaltim Prima Coal - Indonesia
- Indogreen Group - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Sakthi Sugars Limited - India
- Sindya Power Generating Company Private Ltd
- New Zealand Coal & Carbon
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vedanta Resources Plc - India
- Simpson Spence & Young - Indonesia
- Ministry of Transport, Egypt
- Ambuja Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- Kumho Petrochemical, South Korea
- Kalimantan Lumbung Energi - Indonesia
- Jaiprakash Power Ventures ltd
- San Jose City I Power Corp, Philippines
- Salva Resources Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Metalloyd Limited - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Coastal Gujarat Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- TeaM Sual Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Chettinad Cement Corporation Ltd - India
- Sical Logistics Limited - India
- Banpu Public Company Limited - Thailand
- Gujarat Sidhee Cement - India
- Latin American Coal - Colombia
- Orica Mining Services - Indonesia
- Indonesian Coal Mining Association
- Bayan Resources Tbk. - Indonesia
- Energy Link Ltd, New Zealand
- Mercuria Energy - Indonesia
- Bhushan Steel Limited - India
- Mjunction Services Limited - India
- OPG Power Generation Pvt Ltd - India
- ASAPP Information Group - India
- SN Aboitiz Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- GVK Power & Infra Limited - India
- Barasentosa Lestari - Indonesia
- Renaissance Capital - South Africa
- Central Java Power - Indonesia
- Bhatia International Limited - India
- Carbofer General Trading SA - India
- Indian Oil Corporation Limited
- Minerals Council of Australia
- Central Electricity Authority - India
- Rio Tinto Coal - Australia
- Krishnapatnam Port Company Ltd. - India
- Sinarmas Energy and Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Indika Energy - Indonesia
- McConnell Dowell - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Antam Resourcindo - Indonesia
- Sarangani Energy Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- GMR Energy Limited - India
- Ind-Barath Power Infra Limited - India
- Economic Council, Georgia
- Baramulti Group, Indonesia
- Global Business Power Corporation, Philippines
- Wilmar Investment Holdings
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Dalmia Cement Bharat India
- European Bulk Services B.V. - Netherlands
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