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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 $500 million nickel project in North Maluku in Indonesia.
"If the regulation is not amended, new investors will think over before investing because it will increase costs and not every mining company is capable of increasing their investment," said Soemarno of the Indonesia Mining Association.
Source: Reuters / Alibaba
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Thursday, 29 October 09
COAL OF AFRICA SEES VELE OUTPUT BY APRIL 2010
* First coal from Mooiplaats mined and sold
* Talks with Transnet on rail PPP on track
Reuters reported that, Coal of Africa (CoAL) said on Mond ...
Thursday, 29 October 09
UAE FUND EYES INDIA POWER FOR INDONESIAN COAL
Reuters reported that, the UAE's Middle East Coal (MEC) is in talks to buy equity stakes in India's power plants in exchange for long-term coal su ...
Thursday, 29 October 09
CESC POSTS RS 126 CRORE (US$ 26,655,178) NET PROFIT IN QUARTER TWO
Economic Times reported that, Energy major CESC posted a marginal increase in net profit at Rs 126 crore (US$ 26,655,178) for the quarter ended Sep ...
Thursday, 29 October 09
INDIA MMTC TENDER SET TO BOOST S.AFRICA COAL
The South African coal market is set to be boosted further by India's state-owned trading firm MMTC Ltd's tender for 12.5 million tonnes, Indian t ...
Thursday, 29 October 09
INDIA CEMENTS SET TO ACQUIRE COAL MINE IN INDONESIA
Business-Standard reported that, India Cements is set to acquire a coal mine in Indonesia for around $20 million (around Rs 100 crore). The company ...
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- Cement Manufacturers Association - India
- Eastern Coal Council - USA
- PNOC Exploration Corporation - Philippines
- Madhucon Powers Ltd - India
- Baramulti Group, Indonesia
- Ministry of Finance - Indonesia
- Agrawal Coal Company - India
- Miang Besar Coal Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- OPG Power Generation Pvt Ltd - India
- Planning Commission, India
- Maheswari Brothers Coal Limited - India
- Standard Chartered Bank - UAE
- Ministry of Mines - Canada
- Kaltim Prima Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Siam City Cement PLC, Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Mercator Lines Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petron Corporation, Philippines
- Marubeni Corporation - India
- Bhatia International Limited - India
- Kideco Jaya Agung - Indonesia
- International Coal Ventures Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Lanco Infratech Ltd - India
- Bharathi Cement Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- Carbofer General Trading SA - India
- Kalimantan Lumbung Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Chettinad Cement Corporation Ltd - India
- McConnell Dowell - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhoruka Overseas - Indonesia
- Africa Commodities Group - South Africa
- Sojitz Corporation - Japan
- Bulk Trading Sa - Switzerland
- Renaissance Capital - South Africa
- Oldendorff Carriers - Singapore
- Holcim Trading Pte Ltd - Singapore
- Bangladesh Power Developement Board
- Semirara Mining and Power Corporation, Philippines
- Orica Mining Services - Indonesia
- VISA Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Leighton Contractors Pty Ltd - Australia
- Thiess Contractors Indonesia
- Manunggal Multi Energi - Indonesia
- Parry Sugars Refinery, India
- Maharashtra Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Electricity Generating Authority of Thailand
- The State Trading Corporation of India Ltd
- White Energy Company Limited
- SMG Consultants - Indonesia
- Energy Link Ltd, New Zealand
- Sarangani Energy Corporation, Philippines
- Mjunction Services Limited - India
- Indogreen Group - Indonesia
- Grasim Industreis Ltd - India
- Indika Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- CIMB Investment Bank - Malaysia
- Pendopo Energi Batubara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Coal and Oil Company - UAE
- Uttam Galva Steels Limited - India
- Singapore Mercantile Exchange
- European Bulk Services B.V. - Netherlands
- TeaM Sual Corporation - Philippines
- SMC Global Power, Philippines
- Wilmar Investment Holdings
- Globalindo Alam Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement - Thailand
- Global Green Power PLC Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- Kohat Cement Company Ltd. - Pakistan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sree Jayajothi Cements Limited - India
- Price Waterhouse Coopers - Russia
- Makarim & Taira - Indonesia
- Anglo American - United Kingdom
- SN Aboitiz Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Economic Council, Georgia
- Sindya Power Generating Company Private Ltd
- Aboitiz Power Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Formosa Plastics Group - Taiwan
- Wood Mackenzie - Singapore
- GMR Energy Limited - India
- Gujarat Sidhee Cement - India
- Indian Energy Exchange, India
- Kepco SPC Power Corporation, Philippines
- Interocean Group of Companies - India
- Energy Development Corp, Philippines
- Deloitte Consulting - India
- Global Coal Blending Company Limited - Australia
- Binh Thuan Hamico - Vietnam
- Bhushan Steel Limited - India
- Port Waratah Coal Services - Australia
- Savvy Resources Ltd - HongKong
- Global Business Power Corporation, Philippines
- PTC India Limited - India
- Barasentosa Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- Essar Steel Hazira Ltd - India
- Jindal Steel & Power Ltd - India
- Chamber of Mines of South Africa
- Romanian Commodities Exchange
- The University of Queensland
- Alfred C Toepfer International GmbH - Germany
- Karaikal Port Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Georgia Ports Authority, United States
- Australian Coal Association
- Mintek Dendrill Indonesia
- Ceylon Electricity Board - Sri Lanka
- Goldman Sachs - Singapore
- Mercuria Energy - Indonesia
- CNBM International Corporation - China
- Tata Chemicals Ltd - India
- Kartika Selabumi Mining - Indonesia
- Sakthi Sugars Limited - India
- Australian Commodity Traders Exchange
- Medco Energi Mining Internasional
- Coalindo Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- South Luzon Thermal Energy Corporation
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Salva Resources Pvt Ltd - India
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- The Treasury - Australian Government
- Kumho Petrochemical, South Korea
- Gujarat Mineral Development Corp Ltd - India
- Orica Australia Pty. Ltd.
- Samtan Co., Ltd - South Korea
- Dalmia Cement Bharat India
- Bayan Resources Tbk. - Indonesia
- Ambuja Cements Ltd - India
- Electricity Authority, New Zealand
- Commonwealth Bank - Australia
- Minerals Council of Australia
- Videocon Industries ltd - India
- Straits Asia Resources Limited - Singapore
- Simpson Spence & Young - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tamil Nadu electricity Board
- Bukit Makmur.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asmin Koalindo Tuhup - Indonesia
- Indonesian Coal Mining Association
- Vedanta Resources Plc - India
- Indo Tambangraya Megah - Indonesia
- MS Steel International - UAE
- Independent Power Producers Association of India
- Sical Logistics Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Attock Cement Pakistan Limited
- Thai Mozambique Logistica
- Star Paper Mills Limited - India
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- London Commodity Brokers - England
- Meenaskhi Energy Private Limited - India
- Power Finance Corporation Ltd., India
- Latin American Coal - Colombia
- IHS Mccloskey Coal Group - USA
- Karbindo Abesyapradhi - Indoneisa
- Rio Tinto Coal - Australia
- Antam Resourcindo - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Gujarat Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Central Electricity Authority - India
- Toyota Tsusho Corporation, Japan
- Edison Trading Spa - Italy
- Malabar Cements Ltd - India
- Riau Bara Harum - Indonesia
- Parliament of New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- New Zealand Coal & Carbon
- IEA Clean Coal Centre - UK
- ICICI Bank Limited - India
- Bukit Baiduri Energy - Indonesia
- Central Java Power - Indonesia
- Aditya Birla Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Intertek Mineral Services - Indonesia
- Larsen & Toubro Limited - India
- Ministry of Transport, Egypt
- Kapuas Tunggal Persada - Indonesia
- Banpu Public Company Limited - Thailand
- San Jose City I Power Corp, Philippines
- Vizag Seaport Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Heidelberg Cement - Germany
- PowerSource Philippines DevCo
- Eastern Energy - Thailand
- Therma Luzon, Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Trasteel International SA, Italy
- Indian Oil Corporation Limited
- GVK Power & Infra Limited - India
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