Indonesian Coal Mining Association opposes low-grade Coal Export ban

Wednesday, 10 August 11

The Indonesian Coal Mining Association (ICMA) frowns on and challenges the government plan to ban the low-grade coal export inferior to 5,100 kcal/kg, to be effective 2014. “ICMA disagrees over this.

"We oppose it and plead for its postponement,” said, ICMA’s Executive Director Suhala Supriatna.

The government is currently drawing up a regulation to ban the export of coal below 5,100 kcal/kg (adb). The implementation of the regulation is expected as of January 12, 2014, aiming that the coal with low-grade can be upgraded upfront prior to export.

According to Suhala, there is no demonstrably proven and reliable technology to upgrade low calorific value coal to higher-grade coal. Currently existing is negligible technology only as applied by a Japanese UBC at an Arutmin mine. Binderless Coal Briquetting plant (BCB Plant) constructed in Tabang mine, Indonesia, which is owned by PT Bayan Resources.

When the regulation is enforced, many low grade coal producers will face the problem.

Constructing coal upgrading technology is costly, requiring at least over US$75 million. That is why, it entails incentives, such as a reduction in coal royalty and taxes. “we have not yet proposed. How much will the royalty and taxes be,” Suhala said.

According to him, the regulation is being drafted by bureaucrats, but they don’t understood the business as this is a tough regulation to implement. He calls [the government’s attention] not to control and dictate investments.

He notes at least there will be four low-grade coal producers being affected as they are already in the production stage. Those four coal producers together might produce 5 million ton or more per annum.

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(sourced coalspot)

Indonesia approves more permits to ease coal, metals ship delays

Fri Feb 18, 2011 9:43am GMT
* Govt approves export permits for another 29 firms
* Backlog on coal shipments remains
* Some traders borrowing permits to ship coal (Adds trader quotes, details)
By Fitri Wulandari

JAKARTA, Feb 18 (Reuters) - Indonesia has approved permits for 29 more firms to resume coal and metals exports, paving the way for traders and producers to begin clearing a backlog of shipments at the country's ports, a trade ministry official said on Friday.

Up to 3.5 million tonnes of coal shipments, destined to fuel power stations in China and India, have been delayed in recent weeks because of changes to coal and mining laws that required cargoes to undergo extra surveys in a bid to stem tax evasion.

With the latest set of approvals, a total of 81 firms are now allowed to resume exports, after 52 companies were given approval earlier this month, said Junaedi, head of the mining exports unit at the ministry.

Indonesia's trade ministry ordered surveyors in January to temporarily halt issuing surveyor reports to coal and mineral traders in the process of reapplying for trading permits under the new coal and mining law.

"The energy ministry notified us that they have issued trading permits for (an additional) 29 mining firms," said Junaedi, who like many Indonesians only has one name.

As part of obtaining export permits, Indonesia has required exports of mining products including coal and tin to be checked by surveyors, as the country seeks to keep illegal mining in check and boost revenue from the sector.

Surveyor reports, required for shipping coal and metals, show the origin of the cargoes and are used to calculate royalties.

Despite the 81 permits that have been issued, a backlog of cargoes still remains, with some shippers still waiting for export permits from the energy ministry, traders and shipping sources said.

Some desperate traders have also borrowed export permits from other shippers who have already obtained them.

"Some traders have submitted requests for the permit two months ago and they haven't got it," a port source said.

"So instead of waiting for the permit to be issued, they just ship the coal under the name of another shipper that already has the permit," the source said.

But traders could not give details how many vessels are still being held up in ports around Indonesia, the world's top thermal coal exporter that is expected to produce 340 million tonnes of coal this year.

Previously, the Indonesian Coal Mining Association said around 60 to 70 vessels or 3.5 million tonnes of coal were backed up in Indonesian ports.

"There is a backlog and vessel waiting times are up to about 20 days, which is pretty high for Indonesia," a trade source in Singapore said.

"From what I hear, there are a couple of ways to get around it...you can just borrow a miner's license and pay him," the source said. (Additional reporting by Yayat Supriatna in JAKARTA, and Rebekah Kebede in PERTH; Editing by Neil Chatterjee, sourced:reuters)

Tags:Indonesia approves exports permits,coal traders,firms,backlog, coal shipment, ship coal,coal and mining laws,cargoes surveys, stem tax,energy ministry,Indonesian Coal Mining Association

INDONESIA allowed 60 coal trading companies to export coal

Wed, Feb09, 2011
A temporary ban imposed on coal traders in January has lifted this week. As of today 60 coal trading companies were allowed to resume coal shipments the export market. Since 5th January 2011, all the coal exports through coal trading companies were banned due to lack of supporting regulations. Indonesia's trade ministry instructed surveyors to halt temporarily issuing surveyor reports to traders in the process of reapplying for trading permits under a new coal and mining law.
Minister of energy has signed a new regulation on 4th February allowing director of general of coal and mineral to sign and issue IUP OP KPP to traders.
According to media reports, director general of coal and minerals has already signed 60 permits and forwarded the list of qualified trading companies to trade department. On receipt of the list of IUPOPKPP holders, trade department has instructed independent surveyors to conduct the survey which is one the requirement to apply the export permit from customs office.
“We started pre-shipment survey for coal that belongs to coal traders”, said an independent surveyor.

Indonesian coal mining association claimed that, around 3.5 million tons of coal piled at loading ports due to exports ban on coal traders since early January, and may be cleared within this month. Some coal traders have declared force majeure and some postponed shipments due to new ban coal traders early January. Around 60 to 70 vessels was also anchored in coal loading anchorages and waiting for coal since early January 2011, said stevedoring and shipping agent.
Traders optimized that, they can clear delayed cargoes as soon as possible and other industries, which are integrated to coal loading and transportation also will return to normal after slowing down for almost one month.

Indonesian coal reference price has also jumped significantly in February compared with January 2011. Energy Ministry has declared February ICRP at US$ 127.05 per metric ton, which was 13.03 percent higher than January HBA of US$ 112.40.(CS)

(sourced:coalspot)
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Indonesian energy minister has signed a degree for coal transportation permits on Friday

Saturday, 05 February 11
Minister of Energy, Darwin Minister Saleh said, that, he had signed a degree for transportation and sale of coal, which was the hot topic in Indonesian coal industry since early last month, as quoted by Investor Daily.
“I already signed the decree” minister said yesterday, Investor daily reported.
According to the minister, “ he was very cautioned to take a decision as any decision should not lead to any problem later date.
"We were not slow, but there should be a balance between speed and caution” he said. The extra caution was necessary because this is the delegation of authority from the minister to the director general. Moreover, coal is a strategic commodity, so the decision which ever we take should not be disturbed the national interest” minister further said, according to media.
He further explained, "the part of authority to handle coal sector has already transferred to local government. Therefore, central government must take the necessary safeguard to secure national interest", as quoted by Investor Daily.
Previously, Indonesian Coal Mining Association (APBI) deplores, if the minister will not issue the mining permit production operations and sale soon, then it might affect coal ports.
On 24th January 2011, APBI has sent a letter to Minister of Energy to issue the IUP OP K PP as soon as possible. ICMA also has notified that, around 60 - 70 vessels were arrested at coal loading ports around Indonesia and losing around US$ 20000-30000 dollars per day.
Temporarily export restriction has cost around 3.5 million tons with around 227. 5 million dollars loses. If the export delay continues, then the coal which was piled for a longer period may catch fire itself.

Some Indonesia coal traders declare force majeure on rule change-assoc

JAKARTA Feb 1,2011
(Reuters) Some Indonesian coal traders have declared force majeure after a trade rule change, with around 60-70 vessels stuck in various ports and 3.5 million tonnes unable to be shipped, the chairman of the Indonesian Coal Mining Association said on Tuesday.

It was not immediately clear which trading companies and which buyers were affected, Bob Kamandanu told reporters, after a new trade regulation caused the delays in the world's top thermal coal exporter.
The problems have come after the trade ministry ordered surveyors in January to temporarily halt issuing surveyor reports to traders who are in the process of reapplying for trading permits under a new coal and mining law system. The surveyor reports are documents required for shipping the fuel.
The rule appeared to affect traders who do not own mines and buy blended coal, or aggregate coal, from various small miners, as well as traders who buy coal in barges. It was not clear which firms had declared force majeure.

"The vessels have been stuck in various coal ports around the country. Stockpiles have been building up because the coal can't be loaded to vessels," Bob Kamandanu said.
Most of the vessels were shipping the coal to buyers in India and China, he said.
Indonesia has required exports of mining products including coal and tin to be checked by surveyors before shipping them out as the country seeks to keep illegal mining in check and boost revenue from the sector.

"They have submitted requests for processing permits to the energy and mines ministry since three months ago but with no response," Kamandanu told reporters.
Surveyor reports show the origin of the cargoes and are used to calculate royalties.
The trade rule so far has not affected shipments from coal firms such as top producers Bumi Resources and Adaro Energy , as surveyors are still allowed to issue reports for coal exports from producers.
But it could affect the country's production if the delays run for a longer period, said Kamandanu.
The delays come as Indian traders and end-users are close to resuming prompt buying on thermal coal after a break of several months, some of India's largest traders said last week.
Australia's thermal coal prices on the globalCOAL weekly index, a benchmark for Asia, closed at $127 per tonne for the week to date on Monday, up from $124.25 a week earlier.(Reporting by Alfian; Writing by by Fitri Wulandari; Editing by Neil Chatterjee, sourced: reuters)