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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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Saturday, 07 November 09
THE STEAM COAL MOVEMENT FROM INDONESIA TO INDIA REMAINED QUITE STRONG - CAPT. REDDY
COALspot.com (Singapore): The BDI continued rising this week and was up by 290 points up by almost 9 pct and the index closed at 3,393 points.
B ...
Friday, 06 November 09
COAL INDIA ABANDONS PLAN TO BUY ASSET IN AUSTRALIA
Coal India’s efforts to acquire a mid-sized virgin thermal coal block from a private party in Australia have drawn a blank.
The effort was ...
Friday, 06 November 09
NEW ASSETS WILL INCREASE COKING AND THERMAL COAL PRODUCTION
Coal and metals processing company Coal of Africa Limited (CoAL) aims to produce 10-million tons a year of coking coal and two-million tons a year o ...
Friday, 06 November 09
NTPC TO APPOINT MERCHANT BANKER FOR S AFRICA COAL MINE
State-run power producer NTPC, which is eyeing coal mines in South Africa to meet the gap in domestic fuel supply, will appoint a merchant banker ne ...
Thursday, 05 November 09
MERCATOR LINES AIMS TO BECOME A $5 BILLION COMPANY
Mercator Lines, India’s second largest private sector shipping line, plans to invest and expand, riding India’s next wave of growth, the ...
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- Jindal Steel & Power Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Electricity Authority, New Zealand
- Manunggal Multi Energi - Indonesia
- Singapore Mercantile Exchange
- Standard Chartered Bank - UAE
- PowerSource Philippines DevCo
- Cement Manufacturers Association - India
- The Treasury - Australian Government
- Bukit Baiduri Energy - Indonesia
- SMG Consultants - Indonesia
- Jaiprakash Power Ventures ltd
- Maharashtra Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Coal and Oil Company - UAE
- Baramulti Group, Indonesia
- Iligan Light & Power Inc, Philippines
- Indogreen Group - Indonesia
- Indonesian Coal Mining Association
- Bharathi Cement Corporation - India
- Lanco Infratech Ltd - India
- Electricity Generating Authority of Thailand
- Oldendorff Carriers - Singapore
- Siam City Cement PLC, Thailand
- Central Java Power - Indonesia
- Toyota Tsusho Corporation, Japan
- Eastern Energy - Thailand
- Heidelberg Cement - Germany
- Romanian Commodities Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Straits Asia Resources Limited - Singapore
- Gujarat Mineral Development Corp Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Attock Cement Pakistan Limited
- McConnell Dowell - Australia
- Port Waratah Coal Services - Australia
- Mjunction Services Limited - India
- Altura Mining Limited, Indonesia
- India Bulls Power Limited - India
- South Luzon Thermal Energy Corporation
- Vizag Seaport Private Limited - India
- Mintek Dendrill Indonesia
- Bhoruka Overseas - Indonesia
- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Dalmia Cement Bharat India
- SN Aboitiz Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Jorong Barutama Greston.PT - Indonesia
- London Commodity Brokers - England
- Kohat Cement Company Ltd. - Pakistan
- Medco Energi Mining Internasional
- Therma Luzon, Inc, Philippines
- MS Steel International - UAE
- Kapuas Tunggal Persada - Indonesia
- Energy Link Ltd, New Zealand
- Edison Trading Spa - Italy
- Thiess Contractors Indonesia
- Sindya Power Generating Company Private Ltd
- Ministry of Transport, Egypt
- Asmin Koalindo Tuhup - Indonesia
- Kepco SPC Power Corporation, Philippines
- Australian Coal Association
- Barasentosa Lestari - Indonesia
- Orica Australia Pty. Ltd.
- Independent Power Producers Association of India
- Binh Thuan Hamico - Vietnam
- Aditya Birla Group - India
- Chamber of Mines of South Africa
- Kobexindo Tractors - Indoneisa
- Borneo Indobara - Indonesia
- CNBM International Corporation - China
- Ind-Barath Power Infra Limited - India
- Indian Oil Corporation Limited
- Grasim Industreis Ltd - India
- Malabar Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parry Sugars Refinery, India
- The State Trading Corporation of India Ltd
- Leighton Contractors Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- ASAPP Information Group - India
- Price Waterhouse Coopers - Russia
- Bank of Tokyo Mitsubishi UFJ Ltd
- CIMB Investment Bank - Malaysia
- Larsen & Toubro Limited - India
- San Jose City I Power Corp, Philippines
- Petron Corporation, Philippines
- Eastern Coal Council - USA
- Anglo American - United Kingdom
- Holcim Trading Pte Ltd - Singapore
- Gujarat Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- Riau Bara Harum - Indonesia
- Bhatia International Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Coalindo Energy - Indonesia
- Indian Energy Exchange, India
- Bhushan Steel Limited - India
- Madhucon Powers Ltd - India
- Simpson Spence & Young - Indonesia
- Indo Tambangraya Megah - Indonesia
- Central Electricity Authority - India
- Videocon Industries ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Carbofer General Trading SA - India
- Meralco Power Generation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Mines - Canada
- Renaissance Capital - South Africa
- Vedanta Resources Plc - India
- TeaM Sual Corporation - Philippines
- Minerals Council of Australia
- Antam Resourcindo - Indonesia
- ICICI Bank Limited - India
- Marubeni Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- Interocean Group of Companies - India
- Bukit Makmur.PT - Indonesia
- Thai Mozambique Logistica
- Bahari Cakrawala Sebuku - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Sidhee Cement - India
- Wilmar Investment Holdings
- Ministry of Finance - Indonesia
- Banpu Public Company Limited - Thailand
- Star Paper Mills Limited - India
- Sinarmas Energy and Mining - Indonesia
- The University of Queensland
- AsiaOL BioFuels Corp., Philippines
- Formosa Plastics Group - Taiwan
- GN Power Mariveles Coal Plant, Philippines
- European Bulk Services B.V. - Netherlands
- Meenaskhi Energy Private Limited - India
- PTC India Limited - India
- Bangladesh Power Developement Board
- Parliament of New Zealand
- Trasteel International SA, Italy
- Wood Mackenzie - Singapore
- Posco Energy - South Korea
- Merrill Lynch Commodities Europe
- GAC Shipping (India) Pvt Ltd
- Globalindo Alam Lestari - Indonesia
- Energy Development Corp, Philippines
- GVK Power & Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Commonwealth Bank - Australia
- Global Coal Blending Company Limited - Australia
- Karaikal Port Pvt Ltd - India
- Deloitte Consulting - India
- Agrawal Coal Company - India
- Rio Tinto Coal - Australia
- Makarim & Taira - Indonesia
- Planning Commission, India
- Cigading International Bulk Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Uttam Galva Steels Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sarangani Energy Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Kumho Petrochemical, South Korea
- Indika Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Essar Steel Hazira Ltd - India
- Australian Commodity Traders Exchange
- PNOC Exploration Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Billiton Holdings Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Sical Logistics Limited - India
- Semirara Mining and Power Corporation, Philippines
- GMR Energy Limited - India
- Georgia Ports Authority, United States
- Sojitz Corporation - Japan
- Metalloyd Limited - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining Corp, Philippines
- White Energy Company Limited
- Bayan Resources Tbk. - Indonesia
- Savvy Resources Ltd - HongKong
- IEA Clean Coal Centre - UK
- Karbindo Abesyapradhi - Indoneisa
- Power Finance Corporation Ltd., India
- Directorate General of MIneral and Coal - Indonesia
- Tamil Nadu electricity Board
- Economic Council, Georgia
- Ambuja Cements Ltd - India
- Siam City Cement - Thailand
- Coastal Gujarat Power Limited - India
- Mercuria Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Kaltim Prima Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Goldman Sachs - Singapore
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bulk Trading Sa - Switzerland
- Mercator Lines Limited - India
- LBH Netherlands Bv - Netherlands
- VISA Power Limited - India
- Latin American Coal - Colombia
- Sakthi Sugars Limited - India
- Africa Commodities Group - South Africa
- Tata Chemicals Ltd - India
- Kideco Jaya Agung - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Mining Services - Indonesia
- Xindia Steels Limited - India
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