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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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Friday, 23 October 09
AUSTRALIA APPROVES CHINESE TAKEOVER OF FELIX RESOURCES
* Australia give conditional approval to China's Felix deal
* Chinese owner must list the assets on Australian exchange
Reuters reported that, ...
Friday, 23 October 09
IVANHOE TARGETING 20 MILLION TONS OF COAL OUTPUT IN MONGOLIA
Bloomberg reported that, Ivanhoe Mines Ltd., developing a $4 billion copper and gold mine in Mongolia with Rio Tinto Group, is targeting long-term c ...
Friday, 23 October 09
XSTRATA PLANS $1BN AUSTRALIAN COAL PORT
Xstrata Plc, the world's biggest exporter of steam coal, plans to build a new $1 billion coal port in Australia, it said.
The proposed Balaclava ...
Friday, 23 October 09
MEXICO'S CFE SEEKS 6.24 MLN T COAL FOR 2010-12
Reuters reported that, Mexico's state-owned power monopoly plans to award a tender for 6.24 million tonnes of steam coal in December, according to ...
Friday, 23 October 09
CIL PRICE HIKE LIKELY TO PUSH POWER RATES UP
Business-Standard reported that, May squeeze cement companies’ margins, but the steel sector is unlikely to be affected much.
The upward re ...
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- Petron Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Sakthi Sugars Limited - India
- Samtan Co., Ltd - South Korea
- IEA Clean Coal Centre - UK
- Baramulti Group, Indonesia
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Posco Energy - South Korea
- Metalloyd Limited - United Kingdom
- Indian Oil Corporation Limited
- Meenaskhi Energy Private Limited - India
- ICICI Bank Limited - India
- Vizag Seaport Private Limited - India
- Coal and Oil Company - UAE
- SMC Global Power, Philippines
- The University of Queensland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pendopo Energi Batubara - Indonesia
- Economic Council, Georgia
- Indian Energy Exchange, India
- Planning Commission, India
- Bangladesh Power Developement Board
- Deloitte Consulting - India
- Kaltim Prima Coal - Indonesia
- Tata Chemicals Ltd - India
- Price Waterhouse Coopers - Russia
- Iligan Light & Power Inc, Philippines
- Mintek Dendrill Indonesia
- Aboitiz Power Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Xindia Steels Limited - India
- Attock Cement Pakistan Limited
- Electricity Authority, New Zealand
- Madhucon Powers Ltd - India
- Siam City Cement - Thailand
- Timah Investasi Mineral - Indoneisa
- Borneo Indobara - Indonesia
- Parry Sugars Refinery, India
- Rashtriya Ispat Nigam Limited - India
- Gujarat Sidhee Cement - India
- Globalindo Alam Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Mercator Lines Limited - India
- Siam City Cement PLC, Thailand
- Formosa Plastics Group - Taiwan
- Mercuria Energy - Indonesia
- Wood Mackenzie - Singapore
- Larsen & Toubro Limited - India
- Orica Australia Pty. Ltd.
- Dalmia Cement Bharat India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- Bukit Asam (Persero) Tbk - Indonesia
- MS Steel International - UAE
- GMR Energy Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Development Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Mjunction Services Limited - India
- Electricity Generating Authority of Thailand
- Grasim Industreis Ltd - India
- South Luzon Thermal Energy Corporation
- Anglo American - United Kingdom
- Australian Commodity Traders Exchange
- Sinarmas Energy and Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- Bhatia International Limited - India
- European Bulk Services B.V. - Netherlands
- Salva Resources Pvt Ltd - India
- Orica Mining Services - Indonesia
- Tamil Nadu electricity Board
- Jindal Steel & Power Ltd - India
- Sojitz Corporation - Japan
- Central Electricity Authority - India
- Bukit Baiduri Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Singapore Mercantile Exchange
- GVK Power & Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- Global Coal Blending Company Limited - Australia
- Manunggal Multi Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- White Energy Company Limited
- PetroVietnam Power Coal Import and Supply Company
- IHS Mccloskey Coal Group - USA
- The State Trading Corporation of India Ltd
- GAC Shipping (India) Pvt Ltd
- Simpson Spence & Young - Indonesia
- Sical Logistics Limited - India
- VISA Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Carbofer General Trading SA - India
- LBH Netherlands Bv - Netherlands
- London Commodity Brokers - England
- Energy Link Ltd, New Zealand
- Antam Resourcindo - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Aditya Birla Group - India
- New Zealand Coal & Carbon
- Binh Thuan Hamico - Vietnam
- Ministry of Mines - Canada
- Goldman Sachs - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indika Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Ceylon Electricity Board - Sri Lanka
- Meralco Power Generation, Philippines
- Merrill Lynch Commodities Europe
- Intertek Mineral Services - Indonesia
- Renaissance Capital - South Africa
- Ambuja Cements Ltd - India
- Bhushan Steel Limited - India
- Oldendorff Carriers - Singapore
- Kobexindo Tractors - Indoneisa
- Thai Mozambique Logistica
- Parliament of New Zealand
- Georgia Ports Authority, United States
- Kapuas Tunggal Persada - Indonesia
- The Treasury - Australian Government
- SN Aboitiz Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- Kartika Selabumi Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Indo Tambangraya Megah - Indonesia
- Australian Coal Association
- Lanco Infratech Ltd - India
- Rio Tinto Coal - Australia
- Barasentosa Lestari - Indonesia
- Coalindo Energy - Indonesia
- Riau Bara Harum - Indonesia
- Alfred C Toepfer International GmbH - Germany
- CNBM International Corporation - China
- Sindya Power Generating Company Private Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Videocon Industries ltd - India
- Power Finance Corporation Ltd., India
- Medco Energi Mining Internasional
- Bharathi Cement Corporation - India
- Ministry of Transport, Egypt
- Miang Besar Coal Terminal - Indonesia
- Marubeni Corporation - India
- Thiess Contractors Indonesia
- Wilmar Investment Holdings
- Kumho Petrochemical, South Korea
- Star Paper Mills Limited - India
- Bhoruka Overseas - Indonesia
- SMG Consultants - Indonesia
- Commonwealth Bank - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Eastern Energy - Thailand
- Krishnapatnam Port Company Ltd. - India
- Savvy Resources Ltd - HongKong
- Gujarat Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Semirara Mining Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Central Java Power - Indonesia
- Kideco Jaya Agung - Indonesia
- San Jose City I Power Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- OPG Power Generation Pvt Ltd - India
- Ministry of Finance - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Global Business Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Altura Mining Limited, Indonesia
- Trasteel International SA, Italy
- Essar Steel Hazira Ltd - India
- Heidelberg Cement - Germany
- Cement Manufacturers Association - India
- Neyveli Lignite Corporation Ltd, - India
- Kohat Cement Company Ltd. - Pakistan
- ASAPP Information Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Sree Jayajothi Cements Limited - India
- Straits Asia Resources Limited - Singapore
- PTC India Limited - India
- AsiaOL BioFuels Corp., Philippines
- Romanian Commodities Exchange
- Ind-Barath Power Infra Limited - India
- Indonesian Coal Mining Association
- Asmin Koalindo Tuhup - Indonesia
- Sarangani Energy Corporation, Philippines
- Bulk Trading Sa - Switzerland
- CIMB Investment Bank - Malaysia
- Independent Power Producers Association of India
- Makarim & Taira - Indonesia
- Vedanta Resources Plc - India
- Africa Commodities Group - South Africa
- Cigading International Bulk Terminal - Indonesia
- Indogreen Group - Indonesia
- Chamber of Mines of South Africa
- PowerSource Philippines DevCo
- Edison Trading Spa - Italy
- McConnell Dowell - Australia
- Uttam Galva Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Minerals Council of Australia
- Port Waratah Coal Services - Australia
- Gujarat Mineral Development Corp Ltd - India
- Therma Luzon, Inc, Philippines
- Maheswari Brothers Coal Limited - India
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