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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, 24 October 09
ADANI, MMTC IN RACE TO SUPPLY COAL TO GSECL
Business-Standard reported that, as many as five companies are in fray to supply 15 lakh (1.5 million) metric tonnes of non-coking steam (ther ...
Saturday, 24 October 09
INDONESIA STATE POWER FIRM PLANS TO DELAY COAL SUPPLIES
Indonesia's state-controlled electricity company is negotiating with two coal producing firms to delay plans to supply coal to a power plant in Wes ...
Friday, 23 October 09
MONGOLIA LISTS 8 POTENTIAL BIDDERS FOR COAL PROJECT
Reuters reported that, Mongolia has shortlisted eight potential partners for its huge Tavan Tolgoi coking coal project, according to Temuulen Ganzor ...
Friday, 23 October 09
2010 WILL BE 'BRIDGE YEAR' FOR COAL - CONSOL CHIEF
Mining Weekly reported that, After a difficult 2009, 2010 will likely be a “bridge” year for the US coal industry, followed by improved ...
Friday, 23 October 09
INDIAN GROUP INTERESTED IN MOZAMBICAN COAL
Mining Weekly reported that, India’s leading steelmaker, the Steel Authority of India Limited (Sail), has confirmed that it is seeking to acqu ...
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- Central Electricity Authority - India
- Krishnapatnam Port Company Ltd. - India
- Sojitz Corporation - Japan
- TNB Fuel Sdn Bhd - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- New Zealand Coal & Carbon
- Bhoruka Overseas - Indonesia
- London Commodity Brokers - England
- IEA Clean Coal Centre - UK
- AsiaOL BioFuels Corp., Philippines
- Chettinad Cement Corporation Ltd - India
- Videocon Industries ltd - India
- Malabar Cements Ltd - India
- Parry Sugars Refinery, India
- Bulk Trading Sa - Switzerland
- Electricity Authority, New Zealand
- TeaM Sual Corporation - Philippines
- Power Finance Corporation Ltd., India
- Bukit Makmur.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Mintek Dendrill Indonesia
- Kobexindo Tractors - Indoneisa
- Kumho Petrochemical, South Korea
- Meenaskhi Energy Private Limited - India
- Intertek Mineral Services - Indonesia
- McConnell Dowell - Australia
- Manunggal Multi Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Eastern Energy - Thailand
- Vedanta Resources Plc - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Renaissance Capital - South Africa
- Directorate General of MIneral and Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Borneo Indobara - Indonesia
- Siam City Cement - Thailand
- Romanian Commodities Exchange
- Toyota Tsusho Corporation, Japan
- Bangladesh Power Developement Board
- Kartika Selabumi Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Altura Mining Limited, Indonesia
- Barasentosa Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Development Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Attock Cement Pakistan Limited
- Bhushan Steel Limited - India
- Petron Corporation, Philippines
- Economic Council, Georgia
- Formosa Plastics Group - Taiwan
- Chamber of Mines of South Africa
- Sinarmas Energy and Mining - Indonesia
- Tata Chemicals Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- SMC Global Power, Philippines
- Maheswari Brothers Coal Limited - India
- Directorate Of Revenue Intelligence - India
- Therma Luzon, Inc, Philippines
- Anglo American - United Kingdom
- Port Waratah Coal Services - Australia
- Kepco SPC Power Corporation, Philippines
- Indogreen Group - Indonesia
- Rio Tinto Coal - Australia
- OPG Power Generation Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- LBH Netherlands Bv - Netherlands
- Wilmar Investment Holdings
- Merrill Lynch Commodities Europe
- Semirara Mining Corp, Philippines
- Orica Australia Pty. Ltd.
- Mercuria Energy - Indonesia
- PowerSource Philippines DevCo
- International Coal Ventures Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Wood Mackenzie - Singapore
- Standard Chartered Bank - UAE
- Leighton Contractors Pty Ltd - Australia
- Eastern Coal Council - USA
- PTC India Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Vizag Seaport Private Limited - India
- Commonwealth Bank - Australia
- Coal and Oil Company - UAE
- Australian Coal Association
- Singapore Mercantile Exchange
- Larsen & Toubro Limited - India
- Meralco Power Generation, Philippines
- Interocean Group of Companies - India
- CNBM International Corporation - China
- Sical Logistics Limited - India
- Samtan Co., Ltd - South Korea
- Independent Power Producers Association of India
- Indonesian Coal Mining Association
- Global Business Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- MS Steel International - UAE
- Heidelberg Cement - Germany
- Deloitte Consulting - India
- GMR Energy Limited - India
- Aditya Birla Group - India
- Siam City Cement PLC, Thailand
- Edison Trading Spa - Italy
- White Energy Company Limited
- Planning Commission, India
- Baramulti Group, Indonesia
- Ambuja Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- SMG Consultants - Indonesia
- Thiess Contractors Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Riau Bara Harum - Indonesia
- Uttam Galva Steels Limited - India
- Simpson Spence & Young - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Holcim Trading Pte Ltd - Singapore
- The University of Queensland
- Binh Thuan Hamico - Vietnam
- Lanco Infratech Ltd - India
- Jaiprakash Power Ventures ltd
- Iligan Light & Power Inc, Philippines
- Bhatia International Limited - India
- Georgia Ports Authority, United States
- Savvy Resources Ltd - HongKong
- Antam Resourcindo - Indonesia
- Banpu Public Company Limited - Thailand
- Global Coal Blending Company Limited - Australia
- Essar Steel Hazira Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Madhucon Powers Ltd - India
- Price Waterhouse Coopers - Russia
- Karbindo Abesyapradhi - Indoneisa
- Sakthi Sugars Limited - India
- Ceylon Electricity Board - Sri Lanka
- Bharathi Cement Corporation - India
- Marubeni Corporation - India
- Billiton Holdings Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Posco Energy - South Korea
- Latin American Coal - Colombia
- Grasim Industreis Ltd - India
- Cement Manufacturers Association - India
- GAC Shipping (India) Pvt Ltd
- Jindal Steel & Power Ltd - India
- Indian Energy Exchange, India
- Karaikal Port Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- VISA Power Limited - India
- Indian Oil Corporation Limited
- SN Aboitiz Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- Tamil Nadu electricity Board
- San Jose City I Power Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The Treasury - Australian Government
- Coalindo Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Gujarat Sidhee Cement - India
- ASAPP Information Group - India
- Makarim & Taira - Indonesia
- Aboitiz Power Corporation - Philippines
- Oldendorff Carriers - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Mjunction Services Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Finance - Indonesia
- Ministry of Transport, Egypt
- Mercator Lines Limited - India
- Trasteel International SA, Italy
- Central Java Power - Indonesia
- Salva Resources Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Minerals Council of Australia
- Australian Commodity Traders Exchange
- Energy Link Ltd, New Zealand
- IHS Mccloskey Coal Group - USA
- Xindia Steels Limited - India
- Orica Mining Services - Indonesia
- Agrawal Coal Company - India
- Jorong Barutama Greston.PT - Indonesia
- Medco Energi Mining Internasional
- Sree Jayajothi Cements Limited - India
- Metalloyd Limited - United Kingdom
- Globalindo Alam Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Rashtriya Ispat Nigam Limited - India
- PetroVietnam Power Coal Import and Supply Company
- CIMB Investment Bank - Malaysia
- Ind-Barath Power Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- PNOC Exploration Corporation - Philippines
- GVK Power & Infra Limited - India
- The State Trading Corporation of India Ltd
- Goldman Sachs - Singapore
- Carbofer General Trading SA - India
- Dalmia Cement Bharat India
- Indo Tambangraya Megah - Indonesia
- ICICI Bank Limited - India
- Star Paper Mills Limited - India
- Electricity Generating Authority of Thailand
- Kaltim Prima Coal - Indonesia
- Parliament of New Zealand
- India Bulls Power Limited - India
- Ministry of Mines - Canada
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