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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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Sunday, 01 November 09
THE COAL MOVEMENT TO INDIA FROM SOUTH AFRICA AND INDONESIA WOULD BE CONTINUE INCREASE - VISTAAR SINGAPORE
COALspot.com (Singapore): The BDI continued to be firm with an increase of 60 points and closed at 3,103 points.
The cape index also was firm an ...
Sunday, 01 November 09
INDONESIA ADARO Q3 NET PROFIT JUMPS ON COAL DEMAND
* Q3 net profit up 131.6 percent to 1.27 trillion rupiah
* Q3 revenue up 56.8 percent to 7.12 trillion rupiah
Reuters reported that, Indonesia' ...
Sunday, 01 November 09
PT INDIKA MAY BUY STAKES IN BHPB INDONESIA OPERATIONS
Dow Jones reported that Indonesian coal producer PT Indika Energy may buy stakes in BHP Billiton Limited's Indonesian coal operations and in local ...
Sunday, 01 November 09
ADAVALE RESOURCES MAKES COAL ACQUISITIONS IN INDONESIA
Adavale Resources Limited has entered into an agreement to acquire the rights to two thermal coal projects Tapan and Jambi in Sumatra Indonesia, hel ...
Saturday, 31 October 09
PRODUCERS BENEFIT FROM COAL'S TIGHT SUPPLY AND STRONG DEMAND
The Jakarta Post reported that, The outlook for Indonesian coal producers appears promising with strong volume growth coming from both the domestic ...
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- Antam Resourcindo - Indonesia
- Tata Chemicals Ltd - India
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- Globalindo Alam Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Central Electricity Authority - India
- Global Green Power PLC Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Ministry of Transport, Egypt
- Kohat Cement Company Ltd. - Pakistan
- Ambuja Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Mercator Lines Limited - India
- Kaltim Prima Coal - Indonesia
- Carbofer General Trading SA - India
- Energy Development Corp, Philippines
- Ministry of Mines - Canada
- South Luzon Thermal Energy Corporation
- The Treasury - Australian Government
- Straits Asia Resources Limited - Singapore
- Coal and Oil Company - UAE
- Karaikal Port Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Grasim Industreis Ltd - India
- Wilmar Investment Holdings
- Mintek Dendrill Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Maheswari Brothers Coal Limited - India
- PNOC Exploration Corporation - Philippines
- Bhoruka Overseas - Indonesia
- GAC Shipping (India) Pvt Ltd
- Parliament of New Zealand
- Jindal Steel & Power Ltd - India
- Posco Energy - South Korea
- MS Steel International - UAE
- Indika Energy - Indonesia
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- Renaissance Capital - South Africa
- Price Waterhouse Coopers - Russia
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- Kumho Petrochemical, South Korea
- Sarangani Energy Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Alfred C Toepfer International GmbH - Germany
- Asmin Koalindo Tuhup - Indonesia
- Eastern Coal Council - USA
- White Energy Company Limited
- Indian Oil Corporation Limited
- Orica Australia Pty. Ltd.
- Coalindo Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Singapore Mercantile Exchange
- Samtan Co., Ltd - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Commonwealth Bank - Australia
- Rashtriya Ispat Nigam Limited - India
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- Kartika Selabumi Mining - Indonesia
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- Tamil Nadu electricity Board
- Interocean Group of Companies - India
- CIMB Investment Bank - Malaysia
- Thai Mozambique Logistica
- PowerSource Philippines DevCo
- SMC Global Power, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Port Waratah Coal Services - Australia
- Meenaskhi Energy Private Limited - India
- Kepco SPC Power Corporation, Philippines
- ASAPP Information Group - India
- Aditya Birla Group - India
- Anglo American - United Kingdom
- Electricity Authority, New Zealand
- Trasteel International SA, Italy
- Orica Mining Services - Indonesia
- Sical Logistics Limited - India
- VISA Power Limited - India
- IEA Clean Coal Centre - UK
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement PLC, Thailand
- Australian Coal Association
- Ministry of Finance - Indonesia
- Global Business Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Bayan Resources Tbk. - Indonesia
- Energy Link Ltd, New Zealand
- Goldman Sachs - Singapore
- Lanco Infratech Ltd - India
- Chettinad Cement Corporation Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Malabar Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- GMR Energy Limited - India
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Mercuria Energy - Indonesia
- Central Java Power - Indonesia
- Heidelberg Cement - Germany
- Sojitz Corporation - Japan
- Directorate Of Revenue Intelligence - India
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- Banpu Public Company Limited - Thailand
- Metalloyd Limited - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- Independent Power Producers Association of India
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Edison Trading Spa - Italy
- Meralco Power Generation, Philippines
- New Zealand Coal & Carbon
- Videocon Industries ltd - India
- Africa Commodities Group - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Riau Bara Harum - Indonesia
- Larsen & Toubro Limited - India
- Sakthi Sugars Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indogreen Group - Indonesia
- European Bulk Services B.V. - Netherlands
- Economic Council, Georgia
- Deloitte Consulting - India
- Bangladesh Power Developement Board
- Latin American Coal - Colombia
- Romanian Commodities Exchange
- Aboitiz Power Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Sinarmas Energy and Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
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- Semirara Mining Corp, Philippines
- Intertek Mineral Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Siam City Cement - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petron Corporation, Philippines
- Bharathi Cement Corporation - India
- International Coal Ventures Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- McConnell Dowell - Australia
- Baramulti Group, Indonesia
- The State Trading Corporation of India Ltd
- Oldendorff Carriers - Singapore
- Therma Luzon, Inc, Philippines
- Madhucon Powers Ltd - India
- Bulk Trading Sa - Switzerland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Minerals Council of Australia
- Mjunction Services Limited - India
- Timah Investasi Mineral - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Sidhee Cement - India
- Binh Thuan Hamico - Vietnam
- Agrawal Coal Company - India
- India Bulls Power Limited - India
- SMG Consultants - Indonesia
- Essar Steel Hazira Ltd - India
- Barasentosa Lestari - Indonesia
- Thiess Contractors Indonesia
- Bhushan Steel Limited - India
- Simpson Spence & Young - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vedanta Resources Plc - India
- Uttam Galva Steels Limited - India
- Indonesian Coal Mining Association
- Parry Sugars Refinery, India
- Sree Jayajothi Cements Limited - India
- San Jose City I Power Corp, Philippines
- ICICI Bank Limited - India
- Australian Commodity Traders Exchange
- GVK Power & Infra Limited - India
- Eastern Energy - Thailand
- The University of Queensland
- Global Coal Blending Company Limited - Australia
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining and Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- PTC India Limited - India
- OPG Power Generation Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Indian Energy Exchange, India
- Bukit Asam (Persero) Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Planning Commission, India
- CNBM International Corporation - China
- Cigading International Bulk Terminal - Indonesia
- Marubeni Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Merrill Lynch Commodities Europe
- Iligan Light & Power Inc, Philippines
- Wood Mackenzie - Singapore
- Dalmia Cement Bharat India
- Krishnapatnam Port Company Ltd. - India
- Ind-Barath Power Infra Limited - India
- Chamber of Mines of South Africa
- Coastal Gujarat Power Limited - India
- Medco Energi Mining Internasional
- Kobexindo Tractors - Indoneisa
- London Commodity Brokers - England
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- IHS Mccloskey Coal Group - USA
- Xindia Steels Limited - India
- SN Aboitiz Power Inc, Philippines
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