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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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Friday, 13 November 09
API4 IGNORES LOW COAL TRADES - SWISS SINGAPORE
* Jan, Feb S.Africa coal prices hit 12-month highs
* Indian trader says deals done dollars below index
Reuters reported that, the physical coal ...
Thursday, 12 November 09
INDONESIA'S BUMI COAL PRODUCTION TO INCREASE
The sale is predicted to jump 14 percent to 58 million tons.
Viva News reported that, PT Bumi Resources Tbk. (BUMI) projected that the company's ...
Thursday, 12 November 09
INDIA'S BHEL IS IN INDONESIA NOW WITH THE COST EFFECTIVE CFBC BASED BOILER TURBINE PACKAGES
COALspot.com(Indonesia): BHEL, the largest engineering and manufacturing enterprise in India in the energy-related / infrastructure sector, is now f ...
Thursday, 12 November 09
NTPC FARAKKA AND KAHALGAON UNITS SHUT DOWN ON COAL SHORTAGE
Operations at two units each of power major NTPC Ltd’s 1600 MW Farakka and the 2340 MW Kahalgaon stations have ground to a halt due to an acut ...
Thursday, 12 November 09
GANGAVARAM PORT SETS RECORD BY DISCHARGING 80,514 TONNE OF COAL CARGO
Gangavaram Port, the deepest port in the country with water depth of 20 meters, has achieved an unprecedented milestone by discharging 80,514 metric ...
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- Electricity Authority, New Zealand
- SN Aboitiz Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Meralco Power Generation, Philippines
- Lanco Infratech Ltd - India
- Australian Coal Association
- Indian Oil Corporation Limited
- Dalmia Cement Bharat India
- White Energy Company Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Aditya Birla Group - India
- Kideco Jaya Agung - Indonesia
- Globalindo Alam Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- Formosa Plastics Group - Taiwan
- Sojitz Corporation - Japan
- Therma Luzon, Inc, Philippines
- The Treasury - Australian Government
- Directorate General of MIneral and Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Interocean Group of Companies - India
- Meenaskhi Energy Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tata Chemicals Ltd - India
- Jaiprakash Power Ventures ltd
- Sinarmas Energy and Mining - Indonesia
- Commonwealth Bank - Australia
- Neyveli Lignite Corporation Ltd, - India
- Maheswari Brothers Coal Limited - India
- Makarim & Taira - Indonesia
- Ambuja Cements Ltd - India
- Power Finance Corporation Ltd., India
- Economic Council, Georgia
- Bukit Asam (Persero) Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- Indo Tambangraya Megah - Indonesia
- Riau Bara Harum - Indonesia
- Sree Jayajothi Cements Limited - India
- Coalindo Energy - Indonesia
- Port Waratah Coal Services - Australia
- Jindal Steel & Power Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Chettinad Cement Corporation Ltd - India
- Thai Mozambique Logistica
- Edison Trading Spa - Italy
- Siam City Cement PLC, Thailand
- Mercuria Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate Of Revenue Intelligence - India
- Bharathi Cement Corporation - India
- Sindya Power Generating Company Private Ltd
- Malabar Cements Ltd - India
- McConnell Dowell - Australia
- SMG Consultants - Indonesia
- Eastern Energy - Thailand
- Bangladesh Power Developement Board
- Sical Logistics Limited - India
- Videocon Industries ltd - India
- Kumho Petrochemical, South Korea
- Ministry of Mines - Canada
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Finance - Indonesia
- Goldman Sachs - Singapore
- Parry Sugars Refinery, India
- Gujarat Mineral Development Corp Ltd - India
- GVK Power & Infra Limited - India
- Central Java Power - Indonesia
- Thiess Contractors Indonesia
- Coastal Gujarat Power Limited - India
- Global Business Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Bulk Trading Sa - Switzerland
- Posco Energy - South Korea
- CNBM International Corporation - China
- Kepco SPC Power Corporation, Philippines
- Tamil Nadu electricity Board
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining Corp, Philippines
- Minerals Council of Australia
- PTC India Limited - India
- Bukit Makmur.PT - Indonesia
- Singapore Mercantile Exchange
- Simpson Spence & Young - Indonesia
- Billiton Holdings Pty Ltd - Australia
- ICICI Bank Limited - India
- Parliament of New Zealand
- Iligan Light & Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- Deloitte Consulting - India
- Marubeni Corporation - India
- OPG Power Generation Pvt Ltd - India
- SMC Global Power, Philippines
- Bhatia International Limited - India
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Indogreen Group - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Savvy Resources Ltd - HongKong
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- GAC Shipping (India) Pvt Ltd
- Wood Mackenzie - Singapore
- Indonesian Coal Mining Association
- PowerSource Philippines DevCo
- Chamber of Mines of South Africa
- Africa Commodities Group - South Africa
- Semirara Mining and Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Planning Commission, India
- Agrawal Coal Company - India
- VISA Power Limited - India
- Sarangani Energy Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Borneo Indobara - Indonesia
- Orica Australia Pty. Ltd.
- Price Waterhouse Coopers - Russia
- Intertek Mineral Services - Indonesia
- Standard Chartered Bank - UAE
- Carbofer General Trading SA - India
- Energy Development Corp, Philippines
- Vedanta Resources Plc - India
- Australian Commodity Traders Exchange
- Gujarat Sidhee Cement - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Grasim Industreis Ltd - India
- Bhoruka Overseas - Indonesia
- South Luzon Thermal Energy Corporation
- Kaltim Prima Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Orica Mining Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ASAPP Information Group - India
- Romanian Commodities Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Eastern Coal Council - USA
- Altura Mining Limited, Indonesia
- Medco Energi Mining Internasional
- Ind-Barath Power Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Energy Link Ltd, New Zealand
- IEA Clean Coal Centre - UK
- Star Paper Mills Limited - India
- Petron Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Madhucon Powers Ltd - India
- The University of Queensland
- Asmin Koalindo Tuhup - Indonesia
- Baramulti Group, Indonesia
- Ministry of Transport, Egypt
- PNOC Exploration Corporation - Philippines
- Anglo American - United Kingdom
- Bhushan Steel Limited - India
- New Zealand Coal & Carbon
- Attock Cement Pakistan Limited
- LBH Netherlands Bv - Netherlands
- Timah Investasi Mineral - Indoneisa
- Sakthi Sugars Limited - India
- GMR Energy Limited - India
- Kobexindo Tractors - Indoneisa
- Banpu Public Company Limited - Thailand
- Independent Power Producers Association of India
- Wilmar Investment Holdings
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Binh Thuan Hamico - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- Mercator Lines Limited - India
- TeaM Sual Corporation - Philippines
- Cement Manufacturers Association - India
- Trasteel International SA, Italy
- Electricity Generating Authority of Thailand
- Essar Steel Hazira Ltd - India
- MS Steel International - UAE
- Mjunction Services Limited - India
- Rio Tinto Coal - Australia
- Indika Energy - Indonesia
- CIMB Investment Bank - Malaysia
- India Bulls Power Limited - India
- Coal and Oil Company - UAE
- Vizag Seaport Private Limited - India
- Antam Resourcindo - Indonesia
- Mintek Dendrill Indonesia
- Aboitiz Power Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Barasentosa Lestari - Indonesia
- Oldendorff Carriers - Singapore
- Manunggal Multi Energi - Indonesia
- Uttam Galva Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Georgia Ports Authority, United States
- Heidelberg Cement - Germany
- Xindia Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Larsen & Toubro Limited - India
- Renaissance Capital - South Africa
- Karaikal Port Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Energy Exchange, India
- Toyota Tsusho Corporation, Japan
- Siam City Cement - Thailand
- Pendopo Energi Batubara - Indonesia
- Latin American Coal - Colombia
- The State Trading Corporation of India Ltd
- Straits Asia Resources Limited - Singapore
- Global Coal Blending Company Limited - Australia
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