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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, 05 November 09
HMS BERGBAU AG OPENING INDIAN OFFICE
Further step on internationalization track Office in Mumbai Participation in demand for coal imports
HMS Bergbau AG, is an international coal tra ...
Thursday, 05 November 09
SAM'S SEAFOOD HOLDINGS MOVES STEP CLOSER TO COAL EXPLORATION IN INDONESIA
Sam’s Seafood Holdings Limited, which is proposed to be renamed Pan Asia Corporation Limited, is moving closer to becoming an exploration and ...
Wednesday, 04 November 09
INDONESIA CAP ON COAL EXPORTS MAY HIT INDIAN POWER SECTOR
BL reported that Karnataka power sector is likely to be partially impacted by the Indonesian Government move to restrict coal exports.
Private se ...
Wednesday, 04 November 09
SA 2010 COAL EXPORTS SEEN AT 65M TO 68M TONS - ANALYSTS
South Africa's thermal coal exports could rise to as high as 68 million tonnes in 2010 but are more likely to be 64-65 million compared to 60 milli ...
Wednesday, 04 November 09
BAKRIE MAY WIN BERAU COAL BID FROM ARMADIAN
The Bakrie group is likely to be selected as buyer of PT Berau Coal, the country’s fifth-largest coal producer, two people familiar with the m ...
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- Economic Council, Georgia
- GN Power Mariveles Coal Plant, Philippines
- GVK Power & Infra Limited - India
- Iligan Light & Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indogreen Group - Indonesia
- GAC Shipping (India) Pvt Ltd
- Coalindo Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Carbofer General Trading SA - India
- The State Trading Corporation of India Ltd
- Romanian Commodities Exchange
- Altura Mining Limited, Indonesia
- Essar Steel Hazira Ltd - India
- Sojitz Corporation - Japan
- Mintek Dendrill Indonesia
- Meralco Power Generation, Philippines
- Chettinad Cement Corporation Ltd - India
- Coastal Gujarat Power Limited - India
- Makarim & Taira - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- McConnell Dowell - Australia
- Deloitte Consulting - India
- Standard Chartered Bank - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Energy - Thailand
- Bhushan Steel Limited - India
- Timah Investasi Mineral - Indoneisa
- Aditya Birla Group - India
- Tamil Nadu electricity Board
- Bharathi Cement Corporation - India
- IHS Mccloskey Coal Group - USA
- London Commodity Brokers - England
- Jindal Steel & Power Ltd - India
- Port Waratah Coal Services - Australia
- Toyota Tsusho Corporation, Japan
- Edison Trading Spa - Italy
- Formosa Plastics Group - Taiwan
- Karbindo Abesyapradhi - Indoneisa
- Intertek Mineral Services - Indonesia
- Parry Sugars Refinery, India
- Pipit Mutiara Jaya. PT, Indonesia
- The Treasury - Australian Government
- Directorate General of MIneral and Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- IEA Clean Coal Centre - UK
- PNOC Exploration Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Kapuas Tunggal Persada - Indonesia
- Price Waterhouse Coopers - Russia
- Australian Commodity Traders Exchange
- Mercator Lines Limited - India
- Posco Energy - South Korea
- Siam City Cement PLC, Thailand
- Kartika Selabumi Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bulk Trading Sa - Switzerland
- Wood Mackenzie - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Thiess Contractors Indonesia
- Therma Luzon, Inc, Philippines
- Bhoruka Overseas - Indonesia
- Straits Asia Resources Limited - Singapore
- Ind-Barath Power Infra Limited - India
- VISA Power Limited - India
- Thai Mozambique Logistica
- Krishnapatnam Port Company Ltd. - India
- Gujarat Sidhee Cement - India
- Barasentosa Lestari - Indonesia
- Xindia Steels Limited - India
- Star Paper Mills Limited - India
- Grasim Industreis Ltd - India
- ICICI Bank Limited - India
- Holcim Trading Pte Ltd - Singapore
- Global Green Power PLC Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Meenaskhi Energy Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Rio Tinto Coal - Australia
- Commonwealth Bank - Australia
- TeaM Sual Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Larsen & Toubro Limited - India
- Antam Resourcindo - Indonesia
- Independent Power Producers Association of India
- Marubeni Corporation - India
- Kepco SPC Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Heidelberg Cement - Germany
- MS Steel International - UAE
- Singapore Mercantile Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Planning Commission, India
- Petron Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- White Energy Company Limited
- Sinarmas Energy and Mining - Indonesia
- Orica Mining Services - Indonesia
- Samtan Co., Ltd - South Korea
- Global Business Power Corporation, Philippines
- Anglo American - United Kingdom
- Oldendorff Carriers - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- International Coal Ventures Pvt Ltd - India
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- GMR Energy Limited - India
- Electricity Authority, New Zealand
- Eastern Coal Council - USA
- Power Finance Corporation Ltd., India
- Madhucon Powers Ltd - India
- Trasteel International SA, Italy
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- Sakthi Sugars Limited - India
- Kumho Petrochemical, South Korea
- Baramulti Group, Indonesia
- New Zealand Coal & Carbon
- Alfred C Toepfer International GmbH - Germany
- Interocean Group of Companies - India
- Karaikal Port Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Africa Commodities Group - South Africa
- Electricity Generating Authority of Thailand
- Orica Australia Pty. Ltd.
- Bangladesh Power Developement Board
- Energy Development Corp, Philippines
- PTC India Limited - India
- Uttam Galva Steels Limited - India
- Sical Logistics Limited - India
- Banpu Public Company Limited - Thailand
- Jaiprakash Power Ventures ltd
- Wilmar Investment Holdings
- Kobexindo Tractors - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Coal and Oil Company - UAE
- Kalimantan Lumbung Energi - Indonesia
- Mercuria Energy - Indonesia
- Indian Oil Corporation Limited
- Parliament of New Zealand
- Indo Tambangraya Megah - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Tata Chemicals Ltd - India
- Merrill Lynch Commodities Europe
- Manunggal Multi Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Cement Manufacturers Association - India
- PowerSource Philippines DevCo
- Indian Energy Exchange, India
- Australian Coal Association
- Siam City Cement - Thailand
- Bayan Resources Tbk. - Indonesia
- Savvy Resources Ltd - HongKong
- Sindya Power Generating Company Private Ltd
- Bhatia International Limited - India
- Vedanta Resources Plc - India
- Lanco Infratech Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Ministry of Mines - Canada
- Vizag Seaport Private Limited - India
- SMG Consultants - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Malabar Cements Ltd - India
- San Jose City I Power Corp, Philippines
- Ambuja Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Central Java Power - Indonesia
- Mjunction Services Limited - India
- Central Electricity Authority - India
- Aboitiz Power Corporation - Philippines
- Borneo Indobara - Indonesia
- Medco Energi Mining Internasional
- Minerals Council of Australia
- Globalindo Alam Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Kaltim Prima Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- The University of Queensland
- Semirara Mining Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Riau Bara Harum - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Indika Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- SMC Global Power, Philippines
- Energy Link Ltd, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ASAPP Information Group - India
- Chamber of Mines of South Africa
- Georgia Ports Authority, United States
- CNBM International Corporation - China
- Maheswari Brothers Coal Limited - India
- Videocon Industries ltd - India
- Simpson Spence & Young - Indonesia
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- India Bulls Power Limited - India
- Attock Cement Pakistan Limited
- Binh Thuan Hamico - Vietnam
- Dalmia Cement Bharat India
- Bukit Makmur.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Neyveli Lignite Corporation Ltd, - India
- Latin American Coal - Colombia
- Ceylon Electricity Board - Sri Lanka
- Renaissance Capital - South Africa
- OPG Power Generation Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Goldman Sachs - Singapore
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