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Tuesday, 19 January 10
COAL FOR DOMESTIC USERS
 While the government is already almost a year behind schedule in issuing regulations to implement the new mining law, mineral producers have been worried about the domestic market obligation (DMO) that the Energy and Mining Resources Ministry imposed through a ruling late last month.
Their concern is not so much about the requirement to allocate a portion of their output to domestic users, but the lack of clarity regarding how the volume of domestic needs for each mineral is set, how the obligation will be distributed among the producers and how the prices will be determined.
Mineral producers (other than oil and natural gas) are fully aware that they should fulfill domestic needs. That requirement is also by and large stipulated in their mining contracts. However, the DMO will create new uncertainty if this obligation is not based on clear-cut regulations.
Unfortunately, the Dec. 31, 2009 decree by the energy and mineral resources minister is mostly about repressive measures for companies failing to meet their DMO. It stipulates that producers who fail to realize their DMO are liable to a 50 percent cut of their output for the following year.
What is encouraging to note is that a similar penalty is also imposed on domestic users failing to take up their annual quota — their annual quota will also be cut by 50 percent. This enforcement is important because the volume of the DMO is based on the domestic market demand, which in turn is based on the annual needs of domestic industrial users each year.
The most affected by the DMO policy are certainly coal producers, who have made Indonesia the world’s largest seaborne exporter of thermal coal with an estimated output of 230 million tons last year, of which only about 50 million tons was used locally. However, the domestic demand for coal is estimated to almost double this year with the coming on stream of several power plants run by state electricity company PT PLN, all fired by coal. They are part of the government’s crash program to build 10,000 megawatts in additional capacity at PLN’s plants.
The government has strived to achieve the right balance between maximizing export revenues from coal and also securing supplies for domestic users. The challenge, though, is how to make producers accept domestic prices as fair compared what they get from exports.
Put another way, there should be an Indonesian coal reference price index that is acceptable to both producers and users, taking into account such factors as the coal’s calorific value, moisture content, etc. Such a reference price index is crucial because, unlike other minerals that have commodity exchanges of their own for price formation, coal doesn’t have any exchange of its own.
In the past, the domestic purchasing price of different grades of coal was often considered arbitrary, which acted as a disincentive for some producers to produce and sell higher-quality coal to PLN, the largest single domestic user.
Commercially, as long as the prices are right, producers will happily sell their output to the domestic market as this will cut the delivery time and freight costs.
The problem, though, is that the latest ministerial decree does not touch at all on a pricing mechanism for the implementation of the domestic market obligation, and this is creating a sense of uncertainty among producers.
Obviously the government needs to address this pricing issue immediately through another clear-cut regulation so as not to adversely affect new investment in the mining sector.
Source: Editorial, The Jakarta Post
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Sunday, 17 January 10
THE FUTURES FOR THREE YEARS (2010 - 2012) FIRMED UP - VISTAAR SINGAPORE
COALspot.com (Singapore): The freight market was a bit mixed with BDI up by about 159 points and closed at 3,299 points.
BDI
The cape index cont ...
Sunday, 17 January 10
NTPC TO DOUBLE CAPACITY BY 2017
NTPC, which will launch its follow-on public offer on February 3, plans to more than double its generating capacity to over 70,000 mega watts by 201 ...
Saturday, 16 January 10
HANDY CONTINUED FIRM CONDITIONS FOR MARKET IN THE ATLANTIC
HANDY
Continued firm conditions for the Handymax / Smax market in the Atlantic with the BSI having a continued upwards momentum. US$ 45,000 ac ...
Friday, 15 January 10
INDONESIA COAL - HEAVY RAINS HAVE LITTLE IMPACT ON COAL OUTPUT
Coal shipments from Indonesia's main coal-producing area are unlikely to be hit by heavy rains during January-February as many miners are prepared ...
Friday, 15 January 10
GOVT BRINGS IN DOMESTIC COAL MARKET OBLIGATION
The Energy and Mineral Resources Ministry has issued a ministerial decree requiring producers of coal and other minerals to allocate a proportion ...
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- Agrawal Coal Company - India
- Tata Chemicals Ltd - India
- The Treasury - Australian Government
- Makarim & Taira - Indonesia
- Australian Coal Association
- Rashtriya Ispat Nigam Limited - India
- Formosa Plastics Group - Taiwan
- PTC India Limited - India
- Kobexindo Tractors - Indoneisa
- Port Waratah Coal Services - Australia
- Globalindo Alam Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Dalmia Cement Bharat India
- Tamil Nadu electricity Board
- Vijayanagar Sugar Pvt Ltd - India
- Mercator Lines Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- Wood Mackenzie - Singapore
- Ind-Barath Power Infra Limited - India
- Africa Commodities Group - South Africa
- Meralco Power Generation, Philippines
- Kideco Jaya Agung - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Billiton Holdings Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Straits Asia Resources Limited - Singapore
- Energy Link Ltd, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PowerSource Philippines DevCo
- Semirara Mining and Power Corporation, Philippines
- Deloitte Consulting - India
- Gujarat Sidhee Cement - India
- TeaM Sual Corporation - Philippines
- Wilmar Investment Holdings
- Cement Manufacturers Association - India
- Barasentosa Lestari - Indonesia
- Parliament of New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- The University of Queensland
- Posco Energy - South Korea
- Merrill Lynch Commodities Europe
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Vizag Seaport Private Limited - India
- European Bulk Services B.V. - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Medco Energi Mining Internasional
- Metalloyd Limited - United Kingdom
- Lanco Infratech Ltd - India
- IEA Clean Coal Centre - UK
- Global Business Power Corporation, Philippines
- Renaissance Capital - South Africa
- LBH Netherlands Bv - Netherlands
- GAC Shipping (India) Pvt Ltd
- Romanian Commodities Exchange
- Bhoruka Overseas - Indonesia
- Iligan Light & Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- Binh Thuan Hamico - Vietnam
- Power Finance Corporation Ltd., India
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Star Paper Mills Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Riau Bara Harum - Indonesia
- Thiess Contractors Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Altura Mining Limited, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Savvy Resources Ltd - HongKong
- Ministry of Transport, Egypt
- Sical Logistics Limited - India
- Thai Mozambique Logistica
- Sojitz Corporation - Japan
- Sindya Power Generating Company Private Ltd
- Anglo American - United Kingdom
- McConnell Dowell - Australia
- Indo Tambangraya Megah - Indonesia
- Sree Jayajothi Cements Limited - India
- Commonwealth Bank - Australia
- Planning Commission, India
- Neyveli Lignite Corporation Ltd, - India
- Kohat Cement Company Ltd. - Pakistan
- Malabar Cements Ltd - India
- Singapore Mercantile Exchange
- Global Coal Blending Company Limited - Australia
- Mintek Dendrill Indonesia
- Bhushan Steel Limited - India
- Madhucon Powers Ltd - India
- Videocon Industries ltd - India
- Eastern Energy - Thailand
- Maheswari Brothers Coal Limited - India
- CIMB Investment Bank - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Timah Investasi Mineral - Indoneisa
- Orica Australia Pty. Ltd.
- TNB Fuel Sdn Bhd - Malaysia
- Standard Chartered Bank - UAE
- San Jose City I Power Corp, Philippines
- Goldman Sachs - Singapore
- International Coal Ventures Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- Indian Oil Corporation Limited
- Pendopo Energi Batubara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ASAPP Information Group - India
- Baramulti Group, Indonesia
- MS Steel International - UAE
- Uttam Galva Steels Limited - India
- Minerals Council of Australia
- Manunggal Multi Energi - Indonesia
- Antam Resourcindo - Indonesia
- Chamber of Mines of South Africa
- Indogreen Group - Indonesia
- Heidelberg Cement - Germany
- Jaiprakash Power Ventures ltd
- Xindia Steels Limited - India
- Ministry of Finance - Indonesia
- Salva Resources Pvt Ltd - India
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Ambuja Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Indonesian Coal Mining Association
- Essar Steel Hazira Ltd - India
- Attock Cement Pakistan Limited
- Australian Commodity Traders Exchange
- Karbindo Abesyapradhi - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Mercuria Energy - Indonesia
- ICICI Bank Limited - India
- Siam City Cement - Thailand
- Mjunction Services Limited - India
- Directorate Of Revenue Intelligence - India
- Trasteel International SA, Italy
- Ceylon Electricity Board - Sri Lanka
- Kumho Petrochemical, South Korea
- Marubeni Corporation - India
- Electricity Generating Authority of Thailand
- Petron Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- CNBM International Corporation - China
- The State Trading Corporation of India Ltd
- Bulk Trading Sa - Switzerland
- Electricity Authority, New Zealand
- PNOC Exploration Corporation - Philippines
- Borneo Indobara - Indonesia
- Central Electricity Authority - India
- Bukit Makmur.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- SMC Global Power, Philippines
- South Luzon Thermal Energy Corporation
- Central Java Power - Indonesia
- OPG Power Generation Pvt Ltd - India
- Larsen & Toubro Limited - India
- Coalindo Energy - Indonesia
- India Bulls Power Limited - India
- Price Waterhouse Coopers - Russia
- Interocean Group of Companies - India
- Oldendorff Carriers - Singapore
- Bangladesh Power Developement Board
- Indian Energy Exchange, India
- Aditya Birla Group - India
- Georgia Ports Authority, United States
- Ministry of Mines - Canada
- Banpu Public Company Limited - Thailand
- GMR Energy Limited - India
- Vedanta Resources Plc - India
- Parry Sugars Refinery, India
- Orica Mining Services - Indonesia
- Coastal Gujarat Power Limited - India
- Kaltim Prima Coal - Indonesia
- Semirara Mining Corp, Philippines
- Toyota Tsusho Corporation, Japan
- IHS Mccloskey Coal Group - USA
- Jindal Steel & Power Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- SMG Consultants - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Independent Power Producers Association of India
- Alfred C Toepfer International GmbH - Germany
- London Commodity Brokers - England
- New Zealand Coal & Carbon
- Latin American Coal - Colombia
- Energy Development Corp, Philippines
- White Energy Company Limited
- VISA Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Coal and Oil Company - UAE
- Aboitiz Power Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Siam City Cement PLC, Thailand
- Indika Energy - Indonesia
- Sakthi Sugars Limited - India
- Samtan Co., Ltd - South Korea
- Carbofer General Trading SA - India
- Rio Tinto Coal - Australia
- Miang Besar Coal Terminal - Indonesia
- Bhatia International Limited - India
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