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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, 31 October 09
FLSMIDTH WINS MAJOR INDIAN COAL HANDLING PROJECT
Top global supplier of minerals processing and materials handling equipment, FL smidth, has won another important coal handling contract in India
...
Saturday, 31 October 09
INDIA OPENING POWER SECTOR TO PRIVATE INVESTMENT, COAL STILL THE FUEL OF CHOICE
Energy Tribune reported that, With coal-fired power plants as the primary source, India’s electricity generation sector space has been dominat ...
Friday, 30 October 09
MINERS TOLD TO SPEND ON LOCAL SERVICE FIRMS
The energy and mineral resources ministry has issued a ministerial regulation ordering mining firms to prioritize hiring domestic service companies ...
Friday, 30 October 09
TATA POWER MAY BUY COAL FROM RIVERSDALE'S MOZAMBIQUE MINES
Bloomberg reported that, Tata Power Ltd., India’s biggest electricity generator outside state control, may buy coal from a mine in Mozambique ...
Thursday, 29 October 09
MMTC AWARDED 12.5 MILLION TONS TO THREE INDIAN TRADERS
COALspot.com (India): State-run trading firm MMTC awarded tenders for the import of 12.5 million tonnes of coal for NTPC to three Indian coal trader ...
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- Bulk Trading Sa - Switzerland
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- ASAPP Information Group - India
- Oldendorff Carriers - Singapore
- Essar Steel Hazira Ltd - India
- Vedanta Resources Plc - India
- Metalloyd Limited - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Madhucon Powers Ltd - India
- Tata Chemicals Ltd - India
- Samtan Co., Ltd - South Korea
- Indonesian Coal Mining Association
- Merrill Lynch Commodities Europe
- Kumho Petrochemical, South Korea
- Anglo American - United Kingdom
- Independent Power Producers Association of India
- Carbofer General Trading SA - India
- CIMB Investment Bank - Malaysia
- SMG Consultants - Indonesia
- Petron Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Thai Mozambique Logistica
- Ind-Barath Power Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Economic Council, Georgia
- Price Waterhouse Coopers - Russia
- Grasim Industreis Ltd - India
- PNOC Exploration Corporation - Philippines
- Heidelberg Cement - Germany
- Siam City Cement - Thailand
- Kaltim Prima Coal - Indonesia
- Sakthi Sugars Limited - India
- Thiess Contractors Indonesia
- Planning Commission, India
- Romanian Commodities Exchange
- Agrawal Coal Company - India
- Kalimantan Lumbung Energi - Indonesia
- Deloitte Consulting - India
- Attock Cement Pakistan Limited
- Mjunction Services Limited - India
- Sojitz Corporation - Japan
- Leighton Contractors Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Borneo Indobara - Indonesia
- Global Business Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Baramulti Group, Indonesia
- Uttam Galva Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Banpu Public Company Limited - Thailand
- TeaM Sual Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Sical Logistics Limited - India
- Bhoruka Overseas - Indonesia
- Ambuja Cements Ltd - India
- Jindal Steel & Power Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement PLC, Thailand
- Binh Thuan Hamico - Vietnam
- OPG Power Generation Pvt Ltd - India
- Eastern Coal Council - USA
- Ministry of Transport, Egypt
- International Coal Ventures Pvt Ltd - India
- Coalindo Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Orica Australia Pty. Ltd.
- Port Waratah Coal Services - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Orica Mining Services - Indonesia
- Bhushan Steel Limited - India
- Indogreen Group - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Kartika Selabumi Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- White Energy Company Limited
- VISA Power Limited - India
- Aditya Birla Group - India
- London Commodity Brokers - England
- Directorate Of Revenue Intelligence - India
- Wilmar Investment Holdings
- Vijayanagar Sugar Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Energy Development Corp, Philippines
- Mintek Dendrill Indonesia
- SMC Global Power, Philippines
- Coastal Gujarat Power Limited - India
- Sree Jayajothi Cements Limited - India
- Vizag Seaport Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dalmia Cement Bharat India
- Videocon Industries ltd - India
- Coal and Oil Company - UAE
- Indo Tambangraya Megah - Indonesia
- Meralco Power Generation, Philippines
- Georgia Ports Authority, United States
- Medco Energi Mining Internasional
- GMR Energy Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Globalindo Alam Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- GN Power Mariveles Coal Plant, Philippines
- Ceylon Electricity Board - Sri Lanka
- Bangladesh Power Developement Board
- IHS Mccloskey Coal Group - USA
- Indian Energy Exchange, India
- Pipit Mutiara Jaya. PT, Indonesia
- Makarim & Taira - Indonesia
- Singapore Mercantile Exchange
- Cement Manufacturers Association - India
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- Gujarat Sidhee Cement - India
- Bhatia International Limited - India
- Bharathi Cement Corporation - India
- Riau Bara Harum - Indonesia
- GVK Power & Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- ICICI Bank Limited - India
- PowerSource Philippines DevCo
- Goldman Sachs - Singapore
- Edison Trading Spa - Italy
- Antam Resourcindo - Indonesia
- Global Coal Blending Company Limited - Australia
- Therma Luzon, Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Marubeni Corporation - India
- Commonwealth Bank - Australia
- Trasteel International SA, Italy
- Electricity Authority, New Zealand
- Standard Chartered Bank - UAE
- Pendopo Energi Batubara - Indonesia
- Indika Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Larsen & Toubro Limited - India
- Iligan Light & Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- Meenaskhi Energy Private Limited - India
- Straits Asia Resources Limited - Singapore
- Xindia Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Central Electricity Authority - India
- Kobexindo Tractors - Indoneisa
- Simpson Spence & Young - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- PTC India Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Bayan Resources Tbk. - Indonesia
- Renaissance Capital - South Africa
- McConnell Dowell - Australia
- Kideco Jaya Agung - Indonesia
- CNBM International Corporation - China
- Chamber of Mines of South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining Corp, Philippines
- Ministry of Finance - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Wood Mackenzie - Singapore
- Minerals Council of Australia
- Semirara Mining and Power Corporation, Philippines
- Ministry of Mines - Canada
- Karaikal Port Pvt Ltd - India
- The Treasury - Australian Government
- PetroVietnam Power Coal Import and Supply Company
- Formosa Plastics Group - Taiwan
- IEA Clean Coal Centre - UK
- Jaiprakash Power Ventures ltd
- Australian Commodity Traders Exchange
- LBH Netherlands Bv - Netherlands
- Africa Commodities Group - South Africa
- Cigading International Bulk Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Timah Investasi Mineral - Indoneisa
- Rio Tinto Coal - Australia
- Aboitiz Power Corporation - Philippines
- New Zealand Coal & Carbon
- Offshore Bulk Terminal Pte Ltd, Singapore
- Barasentosa Lestari - Indonesia
- MS Steel International - UAE
- Eastern Energy - Thailand
- Mercator Lines Limited - India
- Lanco Infratech Ltd - India
- Parliament of New Zealand
- Latin American Coal - Colombia
- India Bulls Power Limited - India
- Central Java Power - Indonesia
- Indian Oil Corporation Limited
- Manunggal Multi Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Australian Coal Association
- Altura Mining Limited, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Parry Sugars Refinery, India
- TNB Fuel Sdn Bhd - Malaysia
- Mercuria Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Star Paper Mills Limited - India
- The State Trading Corporation of India Ltd
- Interocean Group of Companies - India
- Maheswari Brothers Coal Limited - India
- Rashtriya Ispat Nigam Limited - India
- Malabar Cements Ltd - India
- Posco Energy - South Korea
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