Tue, Oct04, 2011
Indonesia only began selling thermal coal abroad 21 years ago but by 2006 it had overtaken Australia as the world biggest exporter now its government apparently wants to curb a business earning it more than USD 6 billion a year.
And by doing so hand back the advantage to Australian-based miners, by means of a technically dubious obligation on Indonesian producers to upgrade energy content of low grade coal or be banned from shipping it.
In the face of mounting opposition from the coal industry and trade bureaucrats, the Energy and Mineral Resources Ministry draft regulation has been revised and weakened for the third time leading some analysts to predict the measure will not be realized by the due date of January 2014.
Investment bank UBS dismissed the export ban recently as a non-event because the necessary technology is not yet workable at mining scale and if enforced the restriction would only cost revenue from a trade worth about USD 22 billion.
Mr Bob Kamandanu Indonesian Coal Mining Association chairman said the regulation when it first came to light, proposed to ban coal exports of calorific value below 5700 kilocalories per kilogram intending to force producers to upgrade such output by removing moisture. That would have affected about 170 million tonnes, 64% of last year total exports.
Mr Kamandanu says it is the wrong question because the concept is so flawed and risky to Indonesia key role as an exporter. He said that "Just don't do it. But resources law expert Mr Bill Sullivan warns that some mild version of the regulation is almost certain and, when on the books be available for upward adjustment.”
Mr Sullivan at the Jakarta legal firm Christian Teo Purwono and Partners says it is instructive to note which export producers are preparing to toe the ministry line, even while most of the industry remains firmly opposed.
Bumi Resources subsidiary Arutmin Coal is building one beneficiation plant in South Kalimantan partnered by Kobe Steel of Japan and plans another for South Sumatra.
Bumi controlled by the Bakrie family group is the most politically connected of the big coalminers and while Nirwan Bakrie runs the business side, elder brother and Golkar party chairman Mr Aburizal prepares for the 2014 presidential race.
(sourced from TheAustralian)
Indonesia only began selling thermal coal abroad 21 years ago but by 2006 it had overtaken Australia as the world biggest exporter now its government apparently wants to curb a business earning it more than USD 6 billion a year.
And by doing so hand back the advantage to Australian-based miners, by means of a technically dubious obligation on Indonesian producers to upgrade energy content of low grade coal or be banned from shipping it.
In the face of mounting opposition from the coal industry and trade bureaucrats, the Energy and Mineral Resources Ministry draft regulation has been revised and weakened for the third time leading some analysts to predict the measure will not be realized by the due date of January 2014.
Investment bank UBS dismissed the export ban recently as a non-event because the necessary technology is not yet workable at mining scale and if enforced the restriction would only cost revenue from a trade worth about USD 22 billion.
Mr Bob Kamandanu Indonesian Coal Mining Association chairman said the regulation when it first came to light, proposed to ban coal exports of calorific value below 5700 kilocalories per kilogram intending to force producers to upgrade such output by removing moisture. That would have affected about 170 million tonnes, 64% of last year total exports.
Mr Kamandanu says it is the wrong question because the concept is so flawed and risky to Indonesia key role as an exporter. He said that "Just don't do it. But resources law expert Mr Bill Sullivan warns that some mild version of the regulation is almost certain and, when on the books be available for upward adjustment.”
Mr Sullivan at the Jakarta legal firm Christian Teo Purwono and Partners says it is instructive to note which export producers are preparing to toe the ministry line, even while most of the industry remains firmly opposed.
Bumi Resources subsidiary Arutmin Coal is building one beneficiation plant in South Kalimantan partnered by Kobe Steel of Japan and plans another for South Sumatra.
Bumi controlled by the Bakrie family group is the most politically connected of the big coalminers and while Nirwan Bakrie runs the business side, elder brother and Golkar party chairman Mr Aburizal prepares for the 2014 presidential race.
(sourced from TheAustralian)
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