Thursday, 08 March, 2012
Fitch Ratings says Indonesia's coal mining sector should continue to see strong growth prospects but can benefit from clearer and more predictable regulations.
"Fitch expects medium term demand supply dynamics for thermal coal to remain well balanced, leading to healthy prices and strong operational cash flows for Indonesian coal miners," says Shahim Zubair, Associate Director in Fitch's Asia-Pacific Energy & Utilities team. Low production costs are a major advantage for Indonesian coal producers.
In a special report, Fitch notes that the regulatory environment of the Indonesian coal industry is in a state of transition. Further clarity is required on certain major aspects, including the proposed ban on low-rank coal exports. If implemented, the ban can hit certain operators who have significant reserves in low-rank coal. Most of the large coal miners in Indonesia are export-oriented and their coal reserves are either below or marginally above this threshold.
"It is a tough act to balance the health of the industry against long-term domestic energy security of Indonesia" says Mr Zubair. "Fitch believes that Indonesia will take a pragmatic approach to industry regulations as failing to do so can have negative consequences for the sector in the long-run."
Fitch notes the sector's rapid expansion of production and acquisition of coal reserves. A number of operators have acquired, and will continue to acquire, green-field projects which generally entail higher operational and financial risks. However, as long as risks associated with such projects are sufficiently addressed and green-field project development exposure contained, these do not necessarily pose a significant threat to credit profiles.
Credit profiles of Indonesian coal miners remain sub-investment grade, owing to limited mine site diversification, evolving mining regulations, debt-funded expansion and, in some instances, corporate governance issues.
The full report "Indonesia: Coal Mining - Strong Medium-term Outlook; Clearer Regulations Highly Desirable" is available at 'www.fitchratings.com'.
(sourced coalspot.com
Showing posts with label new trade regulation. Show all posts
Showing posts with label new trade regulation. Show all posts
Thursday, March 8, 2012
Thursday, September 15, 2011
Canada threatens to tighten coal plant emissions rules
Thursday, 15 Sep 2011
It is reported that Mr Peter Kent Federal Environment Minister of Canada is serving notice that he won't tolerate companies trying to sneak around pending regulations to clamp down on greenhouse gas emissions.
Mr Kent said regulations for coal-fired electricity plants are not yet final and he could still change the rules especially if corporate interests are trying to skirt them. He added that "Until the final regs are written, they're not written. He emphasized that he has changed regulations at the last minute before for biofuels and he wouldn't hesitate to do it again if necessary.”
He also said in the interview the aim of that grace period was to make sure there was no stranded capital long term investments made under the old regime that would be rendered worthless if the new rules were to apply right away.
Mr Kent said he never intended to create a loophole that would prompt companies to build rule-breaking plants quickly. He suggested he will close that loophole, if necessary.
Calgary-based Maxim Power Corp. is rushing to build a coal-fired plant in western Alberta that would emit far more greenhouse gas than proposed federal regulations would allow. However, under the new regulations, a company already operating by July 2015 could take 45 years to comply.
Maxim officials have told the Alberta Utilities Commission the company had assurances from Environment Canada that its plant would fall under existing rules as long as it is up and running by that time.
Environment Canada has never backed up that claim, environmentalists pointed out.
One option could include changing the date when the stricter standards apply to new plants. The clock would not start ticking for older plants until July 2015 but new plants would face an earlier compliance date.
(sourced from winnipegfreepress)
It is reported that Mr Peter Kent Federal Environment Minister of Canada is serving notice that he won't tolerate companies trying to sneak around pending regulations to clamp down on greenhouse gas emissions.
Mr Kent said regulations for coal-fired electricity plants are not yet final and he could still change the rules especially if corporate interests are trying to skirt them. He added that "Until the final regs are written, they're not written. He emphasized that he has changed regulations at the last minute before for biofuels and he wouldn't hesitate to do it again if necessary.”
He also said in the interview the aim of that grace period was to make sure there was no stranded capital long term investments made under the old regime that would be rendered worthless if the new rules were to apply right away.
Mr Kent said he never intended to create a loophole that would prompt companies to build rule-breaking plants quickly. He suggested he will close that loophole, if necessary.
Calgary-based Maxim Power Corp. is rushing to build a coal-fired plant in western Alberta that would emit far more greenhouse gas than proposed federal regulations would allow. However, under the new regulations, a company already operating by July 2015 could take 45 years to comply.
Maxim officials have told the Alberta Utilities Commission the company had assurances from Environment Canada that its plant would fall under existing rules as long as it is up and running by that time.
Environment Canada has never backed up that claim, environmentalists pointed out.
One option could include changing the date when the stricter standards apply to new plants. The clock would not start ticking for older plants until July 2015 but new plants would face an earlier compliance date.
(sourced from winnipegfreepress)
Monday, August 8, 2011
Xstrata decries unilateral policy changes - CEO
Monday, 08 Aug 2011
Mr Mick Davis CEO of Xstrata said that it's the prerogative of governments to seek a greater share of the profits from mining resources when commodity prices are high, but changes in regulations and taxes should always be prospective, not retrospective.
Delivering the diversified miner's interim results, Mr Davis said that he was concerned that too many governments contemplate significant new legislation or changes to their fiscal regime which target the mining industry, without consulting the sector.
He added that "It is perhaps unsurprising that resource nationalism risks rise when commodity prices are high, ranging from threats of nationalization in its most extreme form, to additional imposts on the industry and increased legislation. It is of course, the prerogative of governments to seek a greater share of the rents from mining the nation's resources and to impose legislation as they see fit. However, an important principle should always be adhered to; changes in resource rent sharing between the owner of the resource and the beneficiator of that resource should be prospective and not retrospective."
Mr Davis said that mining companies take on board significant financial and operational risk when they invest their capital in projects and that it was not fair to rewrite the basis on which those investments were made. He added that "New legislation and taxes must take into account the realities of how mining investment decisions are made, involving billion of dollars for long term operations that may only repay the initial outlay over many years before the mine can begin to generate returns."
Mr Davis was especially scathing on Australia's proposed carbon emissions tax, labeling it a bloody stupid idea. He said that "A unilateral carbon price won't reduce carbon output. It's a blunt instrument designed to raise income."
He said the tax would only succeed to lower Australia’s competitiveness as a mining destination in exchange for no likely reduction in global emissions.
Mr Davis was, however, more moderate in his stance to newly elected Peruvian President Ollanta Humala, who prior to his election was known to favor increasing taxation on miners, and once campaigned to nationalize Peru's mining industry.
Xstrata' Peruvian assets are an important part of its strategy to increase copper volumes by 50% over 2009 levels by the end of 2014, with the Antapaccay extension planned for the group’s Tintaya mine in southern Peru due for commissioning in 2012, at a cost of USD 1.47 billion. Additional to this is the Las Bambas Greenfield project, scheduled to be operational by 2014.
Mr Davis said Humala has underlined the government's intention to maintain Peru's economic growth and stability by re nominating the governor of the Central Bank of Peru, while reappointing experienced cabinet ministers, including the minister of mines and energy.
He said that "Other positive signals from the new administration include a commitment to respect fiscal stability agreements, currently in place for all of Xstrata’s projects."
Mr Davis made no reference to the debate on the nationalization of mines in South Africa, where the group is currently constructing the second phase of the Lion chrome smelter. It is also home to some coal operations. He added that "Our highly diversified portfolio of assets and growth options by geography is an important means of mitigating these risks. With a range of potential growth projects in many different countries, diversified companies can prioritize new investments in the most favorable jurisdictions that offer a stable investment climate for the long-term commitments required to build a mine."
sourced MiningMX
Mr Mick Davis CEO of Xstrata said that it's the prerogative of governments to seek a greater share of the profits from mining resources when commodity prices are high, but changes in regulations and taxes should always be prospective, not retrospective.
Delivering the diversified miner's interim results, Mr Davis said that he was concerned that too many governments contemplate significant new legislation or changes to their fiscal regime which target the mining industry, without consulting the sector.
He added that "It is perhaps unsurprising that resource nationalism risks rise when commodity prices are high, ranging from threats of nationalization in its most extreme form, to additional imposts on the industry and increased legislation. It is of course, the prerogative of governments to seek a greater share of the rents from mining the nation's resources and to impose legislation as they see fit. However, an important principle should always be adhered to; changes in resource rent sharing between the owner of the resource and the beneficiator of that resource should be prospective and not retrospective."
Mr Davis said that mining companies take on board significant financial and operational risk when they invest their capital in projects and that it was not fair to rewrite the basis on which those investments were made. He added that "New legislation and taxes must take into account the realities of how mining investment decisions are made, involving billion of dollars for long term operations that may only repay the initial outlay over many years before the mine can begin to generate returns."
Mr Davis was especially scathing on Australia's proposed carbon emissions tax, labeling it a bloody stupid idea. He said that "A unilateral carbon price won't reduce carbon output. It's a blunt instrument designed to raise income."
He said the tax would only succeed to lower Australia’s competitiveness as a mining destination in exchange for no likely reduction in global emissions.
Mr Davis was, however, more moderate in his stance to newly elected Peruvian President Ollanta Humala, who prior to his election was known to favor increasing taxation on miners, and once campaigned to nationalize Peru's mining industry.
Xstrata' Peruvian assets are an important part of its strategy to increase copper volumes by 50% over 2009 levels by the end of 2014, with the Antapaccay extension planned for the group’s Tintaya mine in southern Peru due for commissioning in 2012, at a cost of USD 1.47 billion. Additional to this is the Las Bambas Greenfield project, scheduled to be operational by 2014.
Mr Davis said Humala has underlined the government's intention to maintain Peru's economic growth and stability by re nominating the governor of the Central Bank of Peru, while reappointing experienced cabinet ministers, including the minister of mines and energy.
He said that "Other positive signals from the new administration include a commitment to respect fiscal stability agreements, currently in place for all of Xstrata’s projects."
Mr Davis made no reference to the debate on the nationalization of mines in South Africa, where the group is currently constructing the second phase of the Lion chrome smelter. It is also home to some coal operations. He added that "Our highly diversified portfolio of assets and growth options by geography is an important means of mitigating these risks. With a range of potential growth projects in many different countries, diversified companies can prioritize new investments in the most favorable jurisdictions that offer a stable investment climate for the long-term commitments required to build a mine."
sourced MiningMX
Tuesday, February 1, 2011
Indonesia Blocks 3.5 Million Tons of Coal Shipments
February 1, 2011,
Bloomberg, By Bambang Djanuarto and Yoga Rusmana
Indonesia’s government has blocked shipments of at least 3.5 million metric tons of coal since Jan. 15, after a delay in issuing new trading permits, an industry group said.
About 70 vessels, each with a capacity of 50,000 tons, are stuck at ports because surveyors checking shipments won’t allow the exports before traders obtain fresh licenses from the Energy and Mineral Resources Ministry, said Bob Kamandanu, chairman of the Indonesian Coal Mining Association.
“Some traders have declared force majeure because of the permit issue,” Kamandanu told reporters in Jakarta today, without identifying them. “More shipments will be halted as a lot more ships are entering the ports.”
Indonesia’s mining law of 2009 requires traders to convert old permits into new trading licenses issued by the Energy and Mineral Resources Ministry before they ship products overseas, said Djunaedi, head of mining exports at the Trade Ministry said Jan. 26. The ministry halted the process of giving out new licenses while waiting for the ministerial decree to be issued, Djunaedi, who uses one name, said at the time.
Alberth Yusuf Tobogu, export director of mining and industry products at the Trade Ministry, and Djunaedi didn’t answer two calls to their mobile phones seeking comment.
Force majeure is a legal clause that allows producers to miss deliveries because of circumstances beyond their control.
Indonesia, the world’s largest thermal coal exporter, has since 2008 required all exports of coal, metal ores and concentrate to be verified by government-appointed surveyors to prevent illegal shipments of commodities.
Bloomberg, By Bambang Djanuarto and Yoga Rusmana
Indonesia’s government has blocked shipments of at least 3.5 million metric tons of coal since Jan. 15, after a delay in issuing new trading permits, an industry group said.
About 70 vessels, each with a capacity of 50,000 tons, are stuck at ports because surveyors checking shipments won’t allow the exports before traders obtain fresh licenses from the Energy and Mineral Resources Ministry, said Bob Kamandanu, chairman of the Indonesian Coal Mining Association.
“Some traders have declared force majeure because of the permit issue,” Kamandanu told reporters in Jakarta today, without identifying them. “More shipments will be halted as a lot more ships are entering the ports.”
Indonesia’s mining law of 2009 requires traders to convert old permits into new trading licenses issued by the Energy and Mineral Resources Ministry before they ship products overseas, said Djunaedi, head of mining exports at the Trade Ministry said Jan. 26. The ministry halted the process of giving out new licenses while waiting for the ministerial decree to be issued, Djunaedi, who uses one name, said at the time.
Alberth Yusuf Tobogu, export director of mining and industry products at the Trade Ministry, and Djunaedi didn’t answer two calls to their mobile phones seeking comment.
Force majeure is a legal clause that allows producers to miss deliveries because of circumstances beyond their control.
Indonesia, the world’s largest thermal coal exporter, has since 2008 required all exports of coal, metal ores and concentrate to be verified by government-appointed surveyors to prevent illegal shipments of commodities.
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)
(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)
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