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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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Wednesday, 04 November 09
BINANI HOPES TO BUY INDONESIAN COAL MINE IN 2-3 MONTHS
"We are still negotiating, but hope to conclude the deal in the next two to three months," Binani Cement Managing Director Vinod Juneja to ...
Tuesday, 03 November 09
CHINA TO BE NET COAL IMPORTER IN 2009
China is accelerating its importation of coal to cope with fallen output caused by the consolidation of small coalmines, and is likely to become a n ...
Monday, 02 November 09
RIO TINTO WARNS ON CHEAP MONGOLIAN COAL
The Age reported that, Mining giant Rio Tinto has warned that cheap coal from Mongolia as well as congestion at the Port of Newcastle in NSW could u ...
Monday, 02 November 09
ESSAR SEEKS COAL ASSETS IN SOUTH AFRICA
Paguntaka reported that, Essar Group plans to acquire coal assets in South Africa to help boost its power business in India. A senior executive of E ...
Sunday, 01 November 09
MINES REGULATION AMENDMENT BILL TO BE TABLED IN PARLIAMENT
Thaindia News reported that, A bill seeking to amend the Mines and Minerals Development Regulation Act, 1957, will be introduced in the winter sessi ...
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- Alfred C Toepfer International GmbH - Germany
- Antam Resourcindo - Indonesia
- Metalloyd Limited - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Samtan Co., Ltd - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Altura Mining Limited, Indonesia
- Marubeni Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Indogreen Group - Indonesia
- White Energy Company Limited
- South Luzon Thermal Energy Corporation
- Bhoruka Overseas - Indonesia
- Energy Development Corp, Philippines
- Eastern Energy - Thailand
- San Jose City I Power Corp, Philippines
- Indika Energy - Indonesia
- Goldman Sachs - Singapore
- Manunggal Multi Energi - Indonesia
- Semirara Mining Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Bhushan Steel Limited - India
- Ministry of Mines - Canada
- Pendopo Energi Batubara - Indonesia
- Banpu Public Company Limited - Thailand
- Tata Chemicals Ltd - India
- Siam City Cement - Thailand
- Georgia Ports Authority, United States
- Jaiprakash Power Ventures ltd
- Videocon Industries ltd - India
- Savvy Resources Ltd - HongKong
- Carbofer General Trading SA - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indo Tambangraya Megah - Indonesia
- Global Coal Blending Company Limited - Australia
- Deloitte Consulting - India
- Baramulti Group, Indonesia
- Kaltim Prima Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Coalindo Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- PowerSource Philippines DevCo
- Sinarmas Energy and Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Power Finance Corporation Ltd., India
- Cement Manufacturers Association - India
- Petrochimia International Co. Ltd.- Taiwan
- Planning Commission, India
- Toyota Tsusho Corporation, Japan
- Vizag Seaport Private Limited - India
- Mercator Lines Limited - India
- Parry Sugars Refinery, India
- Vedanta Resources Plc - India
- Economic Council, Georgia
- Grasim Industreis Ltd - India
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- Orica Mining Services - Indonesia
- Star Paper Mills Limited - India
- Sakthi Sugars Limited - India
- Electricity Generating Authority of Thailand
- TeaM Sual Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Chamber of Mines of South Africa
- Posco Energy - South Korea
- Independent Power Producers Association of India
- Billiton Holdings Pty Ltd - Australia
- SMG Consultants - Indonesia
- Makarim & Taira - Indonesia
- India Bulls Power Limited - India
- GVK Power & Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Borneo Indobara - Indonesia
- Karaikal Port Pvt Ltd - India
- The Treasury - Australian Government
- Kohat Cement Company Ltd. - Pakistan
- Meralco Power Generation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Sojitz Corporation - Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Bhatia International Limited - India
- Gujarat Sidhee Cement - India
- Australian Coal Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Parliament of New Zealand
- Heidelberg Cement - Germany
- GN Power Mariveles Coal Plant, Philippines
- Larsen & Toubro Limited - India
- Dalmia Cement Bharat India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Xindia Steels Limited - India
- Bangladesh Power Developement Board
- Anglo American - United Kingdom
- Attock Cement Pakistan Limited
- Wood Mackenzie - Singapore
- Port Waratah Coal Services - Australia
- AsiaOL BioFuels Corp., Philippines
- TNB Fuel Sdn Bhd - Malaysia
- ICICI Bank Limited - India
- Asmin Koalindo Tuhup - Indonesia
- CIMB Investment Bank - Malaysia
- Indonesian Coal Mining Association
- Medco Energi Mining Internasional
- The State Trading Corporation of India Ltd
- Indian Oil Corporation Limited
- Jorong Barutama Greston.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Edison Trading Spa - Italy
- GAC Shipping (India) Pvt Ltd
- McConnell Dowell - Australia
- Sical Logistics Limited - India
- Riau Bara Harum - Indonesia
- Merrill Lynch Commodities Europe
- Therma Luzon, Inc, Philippines
- Tamil Nadu electricity Board
- Singapore Mercantile Exchange
- IEA Clean Coal Centre - UK
- GMR Energy Limited - India
- Coal and Oil Company - UAE
- Africa Commodities Group - South Africa
- Wilmar Investment Holdings
- Directorate Of Revenue Intelligence - India
- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Jindal Steel & Power Ltd - India
- Kumho Petrochemical, South Korea
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- Directorate General of MIneral and Coal - Indonesia
- Essar Steel Hazira Ltd - India
- London Commodity Brokers - England
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Thiess Contractors Indonesia
- Trasteel International SA, Italy
- Vijayanagar Sugar Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Global Business Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Barasentosa Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Straits Asia Resources Limited - Singapore
- Rio Tinto Coal - Australia
- Latin American Coal - Colombia
- Orica Australia Pty. Ltd.
- Ministry of Transport, Egypt
- CNBM International Corporation - China
- PetroVietnam Power Coal Import and Supply Company
- Bukit Makmur.PT - Indonesia
- Agrawal Coal Company - India
- Kartika Selabumi Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- SN Aboitiz Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Aboitiz Power Corporation - Philippines
- Aditya Birla Group - India
- Mintek Dendrill Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Baiduri Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Coastal Gujarat Power Limited - India
- PTC India Limited - India
- Cigading International Bulk Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- Central Java Power - Indonesia
- Chettinad Cement Corporation Ltd - India
- Price Waterhouse Coopers - Russia
- Oldendorff Carriers - Singapore
- Sree Jayajothi Cements Limited - India
- OPG Power Generation Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Standard Chartered Bank - UAE
- The University of Queensland
- Australian Commodity Traders Exchange
- Binh Thuan Hamico - Vietnam
- Madhucon Powers Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- IHS Mccloskey Coal Group - USA
- Minerals Council of Australia
- Holcim Trading Pte Ltd - Singapore
- Globalindo Alam Lestari - Indonesia
- Mjunction Services Limited - India
- Maheswari Brothers Coal Limited - India
- Malabar Cements Ltd - India
- Central Electricity Authority - India
- Timah Investasi Mineral - Indoneisa
- Bulk Trading Sa - Switzerland
- Ministry of Finance - Indonesia
- Energy Link Ltd, New Zealand
- Interocean Group of Companies - India
- VISA Power Limited - India
- Ambuja Cements Ltd - India
- MS Steel International - UAE
- Formosa Plastics Group - Taiwan
- Thai Mozambique Logistica
- New Zealand Coal & Carbon
- ASAPP Information Group - India
- Gujarat Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Sindya Power Generating Company Private Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Petron Corporation, Philippines
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Authority, New Zealand
- Renaissance Capital - South Africa
- European Bulk Services B.V. - Netherlands
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