CoalAsia 66 Lowres

A COMPROMISED DEAL
ICMA PUSHES INVESTMENT

FOR ENERGY SECURITY
A COMPROMISED DEAL
VOLUME 66 | APRIL 25 - MAY 25, 2016

Pandu P Sjahrir, Chairman of ICMA
COAL ASIA APRIL 25 - MAY 25, 2016
contents
12 INDUSTRY NEWS
32 ELECTRICITY NEWS
40 COMPANIES
Adaro confident on Batang project
financial closure
When state-owned electricity company PT
PLN, at the request of the government,
managed to successfully complete earlier
this year acquisition of the remaining land
requirement for the giant 2x1,000 MW coalfired power plant project in Batang, Central
Java, financial closure for the key project,
which had suffered lengthy delays, could be
finally be made in April of this year.
42 Resources Prima reports lower

coal reserves, resources in E.
Kalimantan concession
SGX-listed integrated coal mining
firm Resources Prima Group
Limited announced the following
updated estimates of coal
reserves and coal resources for
the mining concession area of its
East Kalimantan coal subsidiary PT
Rinjani Kartanegara (PT Rinjani)
as at December 31, 2015, based
on independent qualified persons
report (IQPR 12/15).
44
COMPANIES
Toba Baras profit down 27% to $25.7m in 2015
IDX-listed coal mining firm PT Toba Bara Sejahtera announced that

it booked US$25.7 million in profit (before minority interest), down
27.6 percent year on year (y-o-y), after taking into account finance
cost of $4.6 million and tax expense of $13. 4 million.
2 COAL ASIA APRIL 25 - MAY 25, 2016
contents
COMPANIES
46 ITMG benefits from cost efficiency

initiatives
Despite the weak price environment,
some coal miners continue to enjoy
profits, thanks to efficiency and cost
reduction measures. One of such
coal miners is IDX-listed PT Indo
Tambangraya Megah Tbk (ITMG),
which last year booked a net profit of
US$63 million, albeit a 69 percent drop
from $201 million in 2014.
48 Mercuria hurt by VAT dispute in

Indonesia
While many coal miners maintains
the view that the global coal market will

remain weak this year, Mandiri Group
through is coal mining subsidiary PT
Mandiri Intiperkasa anticipates a price
recovery in the second half of the year.
50 PTBA gears up for sustainable efficiency

IDX-listed coal mining company PT Bukit
Asam Tbk (PTBA) delivered positive
operational and financial performances
last year including a net profit margin of
14.83 percent, the highest in the industry,
thanks to successful efficiency initiatives.
53 Court rules heavy equipment not

categorized as motor vehicle
54
FOCUS
ICMA pushes
investment for
energy security
Indonesian Coal Mining

Association (ICMA) currently
focuses on promoting investment
for domestic energy security.
Pandu P Sjahrir, Chairman of
ICMA, said that the association
fully supports the governments
program to develop a combined
35,000 MW power plants, of which
20,000 MW will be fueled by coal.
contents
COVER STORY
A compromised deal
After months of debate, the government has finally revised a policy on

coal price dedicated for mine mouth power plants as part of efforts to
speed up the development of planned 35 GW power plants, giving greater
rooms for the state-owned electricity company PT PLN and other mine
mouth power plant developers to negotiate coal price produced by miners.
58
65 OPINION | Singgih Widagdo

Questioning About Coal Mine Mouth
Power Plants
68 ANALYSIS | Hendra Sinadia

The New Land and Building Tax
Ruling: Overlapping and Disincentive
The mining sector has been one of
the key sectors supporting Indonesias
economic growth for many decades.
70 ANALYSIS | Ian Wollff

Certainty in a mineral name
One key element of the future new mining
law is to raise the level of the exploration
and mining industries confidence in
Indonesia. For 33 years (1976 to 2009)
there was one working stable mining law.
74 JYD CHINESE
STEAM COAL MARKET
contents
COMPANIES
Asiamet completes assessment on
BKM deposit
Canadian firm Asiamet Resources Limited

(ARS) announced the results of a Preliminary
Economic Assessment (PEA) completed on its
Beruang Kanan Main (BKM) copper deposit
in Kalimantan, Indonesia.
116
82 OPINION | Bill Sullivan

RELAXING SOME MINERAL EXPORT
REQUIREMENTS JUST THE
BEGINNING?
90 FREIGHT REVIEW
Vessel Earnings Move To Year-toDate Highs
94 EVENT
96 WEATHER
100 COAL PRICE REFERENCE
102 SHARES PERFORMANCE
104 INDUSTRY NEWS
COMPANIES
118 Antam, Freeport plan anode slime

and precious metals refinery
120 International Copper Study Group

Copper Market Forecast 2016/2017
We welcome opinions articles from experts, executives on coal industry. The article, either in Indonesian
or English, should be sent to coalasia@petromindo.com and has between 1,000 and 1,500 words.
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Investor appetite
The government is continue working to settle outstanding difficulties on
electricity-related policies to encourage private companies to be involved in
the development of the planned 35 GW power plants, slated to be completed
before the end of 2019.
Since the official launching of the power capacity expansion project, the
government has issued a number of implementing guidelines which is hoped
to accommodate interests of both the state-owned electricity company
PT PLN as electricity buyer and the Independent Power Producers (IPPs)
to realize the plan to ramp up electrification rate to support the countrys
economic growth in the future.
Under the 35 GW project, about 20 GW is expected to be in the form of
coal-fired power plant, including mine mouth power plant, a project that
would be built near the coal mining sites as part of efforts to utilize domestic
coal as source of energy.
Minister of Energy and Mineral Resources Sudirman Said recently issued
Ministerial Decree No.05/2016 on determining price of coal dedicated for
mine mouth power plant. According to the regulation, coal price is calculated
based on production costs plus margin rate of between 15 percent and 25
percent. The previous regulation set a fix margin rate of 25 percent, which
according to the PLN, the current top coal buyer in the domestic market, is
too high amid the lingering coal price drop.
The regulation also gives assurance that if the mining company and
developer of mine mouth power plant fail to agree on coal price within 60
days of negotiation, the director general (of mineral and coal) will determine
the margin. It is not clear yet on how the Directorate General of Mineral and
Coal to settle this possible case but it gives at least certainty for developers
to work in.
Data from PLN shows there are currently 50 proposals submitted to build
mine mouth power plants across the country.
Many miners welcome the new regulation, describing it as win-win
solution to the long-standing problem on coal price determination for mine
mouth power plant. However, experts warn that the regulation would benefit
more big coal producers or mining companies having lower production cost
than the governments benchmark coal price.
The development of mine mouth power plants would give more
opportunities to coal mining companies in Sumatra which holds total reserves
of 13.3 billion tons and resources of 58.0 billion tons, mostly low to medium
rank coal. Sumatra Island only produces about 28 million tons of the total
national production of 418.5 million tons in 2015, of which the state owned
coal miner PT Bukit Asam produced 19 million tons last year.
Happy reading
Adianto P. Simamora
Editor in Chief
11
[ INDUSTRYNEWS ]
Dire Pratama to increase coal handling capacity
CA|Boim
DX-listed integrated coal mining

services company PT Darma Henwa
Tbk said that its subsidiary PT Dire
Pratama will increase coal handling
capacity this year to 11 million tons per
year from eight million tons.
Darma Henwa acquired Dire Pratama
last year. The latter company provides coal
handling services at the Lubuk Tutung
coal port in East Kalimantan.
Currently, PT Dire Pratama has a
coal handling capacity of 670,000 tons
on average per month with the (annual)
production target of eight million tons, at
the minimum. For 2016, PT Dire Pratama
targets to improve coal production up to
11 million tons per year, Darma Henwa
said in a statement.
The company further explained that
to conduct the coal handling services in
Lubuk Tutung port, PT Dire Pratama
operates plant facility covering conveyor
belt, crusher, hopper & breaker, sizer,
reclaimer and settling-pond. These
operational activities were supported by
a number of heavy equipment and light
vehicle units.
PT Dire Pratama has recorded a
number of accomplishments; one of which
was the all-time coal production record,
reaching 960,000 tons per month, the
highest since the Lubuk Tutung port was
established, Darma Henwa said
Meanwhile, Darma Henwa reported
revenues in 2015 rose by 2 percent to
US$240.12 million from $234.66 million
in the previous year.
This increase was attributed to the
increasing mining activities in 2015,
Darma Henwa said in a statement. The
largest contributor of revenues was
Bengalon Project (owned by coal mining
firm PT Kaltim Prima Coal) with a
contribution of $179.19 million and Asam
Asam Project which provided $58.84

million, it added.
The companys cost of revenues
in 2015 amounted to $216.22 million,
a 3 percent decline from $221.84 in
the previous year. The decrease was
contributed by the success of efficiency
program, supported by the decrease of
fuel price for the industry, in line with the
weakening of energy commodity prices in
the global market, the company explained.
Thus, even though the work volume
increased, the increasing work load can
be compensated by the increase in the
productivity of equipment and system,
which made the operations more efficient.
Other expenses of the company in
2015 amounted to $15.91 million, 267
percent jump from $4.34 million in
the previous year. This increase was
primarily because of the net tax expenses

of $1.63 million. In addition to taxes, other
components that affected the increase in
other expenses were other costs, which
grew significantly to $3.69 million, the
company said.
The company said it booked an income
of $465.75 thousand in 2015, a significant
surge compared to $83.07 thousand in 2014.
The comprehensive income in
2015 amounted to $1,112.23 thousand,
344 percent jump compared to the
comprehensive income in 2014 at
$251.93 thousand.
Darma Henwa said EBITDA in
2015 was $29.06 million, a 5.65 percent
decrease from $30.80 million in 2014.
This happened because other expenses in
2015 slightly increased compared to the
previous period, the statement ended.
Bara Jaya to resume coal

production once price improves
PTBA to complete coal mine

acquisition this year
IDX-listed coal mining firm PT Bukit
Asam Tbk (PTBA) hopes to complete the
acquisition of a coal mine this year as part
of expansion strategy as the company aims
to have assets outside its key production
center of South Sumatra.
Were targeting to complete (the
acquisition) this year, said PTBA
Corporate Secretary Joko Pramono, but
declined to provide further details.
He said that the acquisition would be
conducted either by its direct or indirect
subsidiary. The coal potential (of the
target) is quite huge, he said.
Last year, PTBA through subsidiary
PT Internasional Prima Coal acquired
South Kalimantan coal miners PT
Tabalong Prima Resources and PT Mitra
Hasrat Bersama for a combined US$36

million.
In the same year, the company through
subsidiary PT Bukit Multi Investama
acquired 95 percent interest in coal mining
services company PT Satria Bahana Satria.
Meanwhile, PTBA added that it will
increase the coal handling capacity of its
Kertapati jetty in Palembang, South Sumatra,
this year as the company anticipates rising
sales particularly on expected rising demand
from key domestic customer of state-owned
electricity firm PT PLN.
Joko said the capacity of the Kertapati
jetty will be increased to 3.7 million tons
from the current 2.5 million tons. He said
that the expansion project is expected to be
completed by the end of this year.
He said that the plan has been covered
under the companys 2016 capital
expenditure.
Joko added that going forward, the
Kertapati jetty will undergo further
expansion of capacity including a target to
expand it to 5.7 million tons next year.
Aside from Kertapati jetty, PTBA also
owns the Tarahan coal terminal in Lampung
with capacity of 25 million tons.
CA|Khalsa
IDX-listed coal mining company PT

Bara Jaya Internasional Tbk said it will only
resume coal production at its mines in East
Kalimantan once coal price improves as the
company wont sell the commodity at a loss.
We are still looking for coal demand
at appropriate price and we will not sell
our coal at a loss, Bara Jayas Corporate
Secretary Andreas Andy Santoso said to
Petromindo.com.
Bara Jaya, formerly known as PT
ATPK Resources Tbk, has two coal
mining subsidiaries PT Mega Alam
Sejahtera (MAS) and PT Sarana Mandiri
Utama. MAS was the only producing asset
before the company suspended operation
earlier this year due to the price drop.
MAS produced low rank coal 4,500 5,000 kcal/kg (adb) with total moisture 40
percent. MAS owns 41.5 million tons of
coal resources.
Bara Jaya has previously announced
plan to acquire a coal concession in Central
Kalimantan. The acquisition plan for coal
mines with coal quality above 5,000 kcal/kg
is in the process, Andreas said.
As per November of last year, Bara Jaya

only sold about 163,495 tons of coal, compared
to 2014 same period of 670,192 tons, thus
undermining its financial performance.
Andreas, however, is hopeful that a recovery in
the price of oil would trigger coal demand from
India at the right price level.
13
[ INDUSTRYNEWS ]
IDX-listed steel giant PT Krakatau

Steel Tbk plans to import coking coal
products from Australia for its blast
furnace in Cilegon, Banten, which is
currently near completion.
Well (import) from large Australian
(coal mining) firms, but we cant disclose
the name of the company yet, said
Krakatau President Director Sukandar.
For now, well certainly buy from
Australia. But if local producers have coal
(specifications) that meet our requirement,
theres possibility that we may also buy
from them, he added.
The blast furnace facility is expected to
be completed in September of this year. It
will have a capacity to produce 1.2 million
tons of hot metal, an intermediate product
for the production of various steel products.
The US$656.3 million blast furnace
will require about 833,660 tons per year of
coking coal, and 210,000 tons per year of
PCI coal.
its profit for the year would have been

positive at $1.4 million, the firm said.
MBSS anticipates continued pressure on
the entire industry. A recovery in coal export
demand seems unlikely given Chinas still
sluggish growth. Domestically, demand is
expected to experience some growth, but
with oversupply in the market it is unlikely
that prices will improve, the firm said.
Bumi Resources Q1 coal

output estimated at 21m tons
IDX-listed coal mining firm PT Bumi
Resources Tbk said that coal production in
the first quarter of this year is estimated at
21 million tons.
Mitrabahtera books $10m

losses in 2015
IDX-listed sea logistics and
transshipment service provider PT
Mitrabahtera Segara Sejati Tbk (MBSS)
announced that it recorded a net loss of
US$10.2 million in 2015 as sales declined
significantly.
Revenue was recorded $89.8 million in
2015, declining 33.6 percent year on year
(y-o-y). Barging services contributed the
majority of revenue at $57.4 million, while
the floating crane business contributed
$32.4 million.
The company also suffered several
non-recurring transactions amounting to
$11.6 million and part of that of $10.1
million were non-cash transactions. As a
result, the firm recorded a net loss for the
year of $10.2 million. Had the company
not suffered non-recurring transactions,
Coal mined is estimated at 21

million tons. But firm numbers are not yet
available, Director Dileep Srivastava told
Petromindo.com.
He said that about 70 percent of the first
quarter output came from its subsidiary PT
Kaltim Prima Coal and another 30 percent
from subsidiary PT Arutmin Indonesia.
Srivastava reiterated that the company
hopes to produce around 80 million tons
of coal this year, the same as realized
output last year, but this would depend
on the coal price and market condition,
suggesting that output may be higher if
market and price conditions are more
favorable.
CoalAsia doc.
Krakatau to import coking

coal from Australia
Dileep Srivastava
15
[ INDUSTRYNEWS ]
million tons of coking coal this year, up
from 800,000 tons last year.
CA|Khalsa
Samindo Resources sets flat

coal output target
Moodys downgrades Indika

to Caa1; outlook negative
Moodys Investors Service has
downgraded the corporate family rating
(CFR) of PT Indika Energy Tbk to Caa1
from B3.
At the same time, Moodys has also
downgraded the ratings on the $171
million notes due 2018 and issued by Indo
Energy Finance B.V., as well as the ratings
on the $500 million notes due 2023 and
issued by Indo Energy Finance II B.V..
Both ratings have been downgraded to
Caa1 from B3.
The two bond issuing entities are
wholly-owned subsidiaries of Indika and
both notes are unconditionally guaranteed
by Indika.
The ratings outlook is negative.
Moodys rating actions conclude
Moodys review of the ratings above,
initiated on 22 January 2016 when
Moodys placed the ratings on review for
downgrade, reflecting Moodys effort to
recalibrate ratings in the mining industry
to align with the fundamental shift in

the credit conditions faced by the global
mining sector.
Court approves Asmin

Koalindos debt settlement
deal
IDX-listed hard coking coal producer
PT Borneo Lumbung Energi & Metal
Tbk announced that the Central Jakarta
Commercial Court had recently approved
a debt settlement agreement reached
by its 99.99 percent-owned subsidiary
PT Asmin Koalindo Tuhup (AKT) and
creditors.
The company said in a statement that
the court also ended the suspension of
obligation for the payment of debts (or
PKPU), which had earlier been granted
to the company as part of condition to
restructure its debts.
AKT operates coal concession in
Muara Raya Regency, Central Kalimantan.
This magazine reported last year, that
AKT has been targeted to produce 1.8
IDX-listed coal mining services

company PT Samindo Resources Tbk has
set a flat coal production target for this year
from its only client, East Kalimantan coal
mining firm PT Kideco Jaya Agung, amid
the lingering weak coal price environment.
Company Corporate Secretary
Hananto Wibowo said that coal production
this year is targeted to reach 10 million
tons, relatively the same as last years.
Meanwhile, overburden removal
is projected to slightly increase to 45.2
million bcm from 33 million bcm last year,
he said.
He added that to help cope with the
current weak coal market condition;
the company will continue to focus on
efficiency measures.
FMA plans coal port in

Muara Enim
A private company called PT Fortuna
Marina Agung (FMA) plans to develop a
coal port in Gedung Buruk Village, Muara
Belida District, Muara Enim Regency,
South Sumatra Province, sripoku.com
reported recently.
The news portal quoted FMA General
Manager Syafwan Makmur as saying that
the planned port would have a capacity
of 300,000 tons of coal per month. Total
investment for the project is estimated at
Rp 220 billion.
The port, which will serve domestic
and export markets, will be built on a
60-ha plot of land. Syafwan said that the
company is interested in developing the
coal port project considering the huge coal
reserves in Muara Enim. He did not say
when construction of the project will start
and be completed.
BlackGold appoints mining

veteran as consultant
The group is an Indonesia-focused coal

mining company targeting Indonesias
growing power plant industry.
The group, through its local
subsidiaries, has the rights to three coal
concessions in Riau, Indonesia. Currently,
the group, through its subsidiary PT
Samantaka Batubara, has coal concession
for an area of 15,000 hectares, and has
over 200 million tons of coal resources
(JORC code).
ICR supplies coal to Tayan

smelter
CA|Cepi Setiadi
BlackGold Natural Resources

Limited announced the appointment
of Johanes Budisutrisno Kotjo as a
consultant to the group, effective March
30, 2016.
Kotjo brings to the group more than
22 years of experience in the mining and
energy industries, having assumed key
roles in various companies, including
President Commissioner of IDX-listed
PT Apac Citra Centertex Tbk from 1995
to 2014. He entered into his first resource
venture together with a major mining
player, Robert Friedland, in 1994, and has
successfully invested in various mining
ventures.
With more than 22 years of

experience in the mining and energy
industry, Kotjo brings to the group
a wealth of experience from his
successful career, said Phil Rickard,
CEO of BlackGold Group. I am
confident that he will make many
important contributions to BlackGold,
and I am thrilled to welcome him to our
advisory team.
Over the last 25 years, Kotjo has
been recognized as one of South East
Asias top business leaders, specializing
in acquisitions and capital markets
transactions, including those with public
listed entities. Kotjo graduated from the
Technical University of Berlin in 1977,
majoring in Chemical Engineering.
Ady Taufik Yudisia
Coal mining company PT Indonesia

Coal Resources (ICR), a wholly owned
subsidiary of PT Antam Tbk, has started
supplying sister company PT Indonesia
Chemical Alumina (ICA) in Tayan, West
Kalimatan province with 15,000 tons of
medium CV coal every two months.
Ady Taufik Yudisia, President
Director of ICR, told Petromindo.com that
the supply started in March 2016.
He said the coal is used for ICAs
2x12 MW power plant operated to support
the operation of the firms smelter. ICA
operates a smelter of chemical grade
alumina in Tayan.
ICR said it sold around 72,800 tons
of coal in the period of January-February
2016, representing 7 percent of the firms
annual target.
He said that the company supplied
as much as 22,700 tons to Antams
ferronickel unit in Pomalaa, Southeast
Sulawesi province, around 19,300 tons to
PT Ecogreen Eleochemicals in Batam and
30,800 tons to PT Kirana Graha Buana, a
coal trading company in Jambi.
Ady explained the total volume consist
around 31,000 tons of low calorific coal
20,000 tons of medium calorific coal and
21,600 tons of high calorific coal..
The firm now also has a stockpile of
around 100,000 tons from its Sarolangun
coal mine in Jambi.
17
19
[ INDUSTRYNEWS ]
MEMR introduces MOMI
The Ministry of Energy and Mineral
Resources (MEMR) introduce one of its
public service innovations called Minerba
One Map Indonesia (or MOMI) recently.
The Ministry said in a statement that
MOMI is a web-based information system
on mining areas in Indonesia.
It said that data input on 10,338 IUP
mining business permits, 74 PKP2B coal
miners, and 34 KK mineral miners had
been completed.
The Ministry added that MOMI has
also been integrated with other sectors
or subsector such as oil and gas map,
geothermal working area map, coal-fired
power plant map, forestry map, geological
map, coal terminal map, etc.
Access to MOMI can be made by clicking
http://maps.minerba.esdm.go.id/home.
Coal mining company PT Alfa Energi

claimed that coal production from its concession
in Samarinda, East Kalimantan Province in the
first quarter of the year is in line with target.
Company Director Aris Munandar
told Petromindo.com that the company
produced around 60,000 tons in the first
quarter, which is about a quarter of the
annual target of 250,000 tons.
Last year, the firm produced 300,000
tons of coal, but set a lower target of
250,000 tons for this year in view of the
continued market downturn.
The firm has a concession of about
2,000 ha with the coal CV of GAR 4300.
While doing mining activities, the firm
is also conducting the exploration. Based
on the previous JORC, the concession has
about 10 million tons in reserve.
BHPs Haju coal mine to

produce 1m tons this year
ASX-listed BHP Billiton has in recent
months started production at its Haju coal
CA|Khalsa
Alfa Energis output in Q1 in

line with target
Imelda Adhisaputra
mine in Central Kalimantan, which is

targeted to produce 1 million tons this year.
We recently commenced production
at Haju Mine and set production target at 1
million tons of coal for this year, BHPs
Director of Corporate Affairs Imelda
Adhisaputra said to Petromindo.com.
The Haju mine is operated by PT
Lahai Coal, which holds one of the
seven Coal Contracts of Work (CCoW)
within the IndoMet Coal Project, which
is 75 percent owned by BHP and 25
percent owned by PT Adaro Energy Tbk.
Haju mine commenced the commercial
production since September 2015.

The company said in a filing with the
ASX that coking coal output increased
from 15,000 tons at the start of the
production phase in September to 87,000
tons in October-December period of last
year, to make a total of 102,000 tons.
Imelda added that the global coal
sector is facing significant challenges,
including price declines of up to 30
percent over the past year. We continue
to look for ways to improve productivity
and reduce costs at each of our mines,
she said.
21
Seroja Investments replaces

old agreement with Adaro
MEMR awaits approval to set

up new directorate for nontax revenue
Resources (MEMR) has proposed to
set up a new directorate in charge of

non-tax state revenue, but the plan has
yet to be approved by the Ministry of
Administrative and Bureaucratic Reform,
Bisnis Indonesia reported.
The paper quoted Secretary General of
the MEMR Teguh Pamudji as saying that
the ministry initially set the target to set up
the new directorate in March of this year.
He explained that the directorate
will have two directors, one in charge
of supervising non-tax revenue from
the oil and gas sector, and another in
charge of non-tax revenue from the
coal and mining sector. While the latter
will be under the ministrys Directorate
General of Mineral and Coal, the
former will be under the Ministry of
Finances Directorate General of State
Budget.
Teguh said that the new directorate
is crucial amid lingering decline in nontax revenue obtained by the state during
the past several years. He said that
many industry players have yet to fulfill
their financial obligations to the state
properly. As such, the new directorate
will have to cooperate with governors
and regents where the industry players
are located.
CA|Lucky Ebenhaezer
SGX-listed Seroja Investments

Limited announced that its subsidiary
PT Pulau Seroja Jaya (PSJ) and PT
Adaro Indonesia have replaced the
coal transportation contract signed in
November 2010.
The old agreement, which would have
expired in October 2017, is terminated
by mutual consent and is replaced by
a new agreement between PSJ and PT
Maritim Barito Perkasa (MBP) which is an
indirectly owned subsidiary of PT Adaro
Energy Tbk. The new agreement was
signed on 20 April 2016.
The new agreement expires on Aug.
31, 2019 with an option to both parties
to extend the agreement for another three
years.
Under the new agreement, PSJ is
expected to transport about 7 million metric
tons of coal a year for the next four years
from the Adaro coalmines which will
generate estimated cumulative revenue of
US$48 million for the 4-year period from
2016 to 2019. This is part of the strategy of
PSJ to establish a stable and reliable stream
of business in its order books for next few
years where conditions are more volatile.
The new agreement is expected to

contribute positively to the revenue of the
group for the current financial year ending
Dec. 31, 2016.
Apart from the deemed interests of
Edwin Soeryadjaya and Sandiaga Uno,
who are key minority shareholders of
Adaro Energy, the ultimate holding
company of MBP, none of the
companys other directors or substantial
shareholders has any interest, direct or
indirect, in the above transactions save
for their interests (if any) in the share
capital of the company. Edwin and
Sandiaga are substantial shareholders of
the company. Edwin is also a director
and the Non-Executive Chairman of the
company.
The new agreement has been approved
by the companys audit committee in
accordance with th general mandate
passed by the shareholders at the last
annual general meeting of the company on
28 April 2015.
23
[ INDUSTRYNEWS ]
IDX-listed coal mining firm PT

Golden Energy Mines Tbk is seeking to
expand its export markets in Southeast
Asia and to increase sales in the domestic
market as part of strategy to compensate
for weaker demand in key markets of
China and India, Kontan reported.
The paper quoted Golden Energy
Corporate Secretary Sudin Sudirman
as saying that the company will expand
its export markets in the entire ASEAN
countries including Vietnam, Cambodia
and the Philippines.
Coal output for the export market
comes from subsidiary PT Borneo
Indobara, which operates mines in
South Kalimantan. This year, the
company is targeted to produce 6.5
million tons of coal.
Meanwhile, for the domestic
market, the coal will come from another
subsidiary PT Kuansing Inti Makmur,
which operates mines in Jambi. The
company is targeted to produce 2.2
million tons of coal this year.
Sudin said that Golden Energy, which
has allocated US$15 million in capital
expenditure this year, plans to acquire
new coal assets, but declined to provide
further details
Lestari Cipta wins coal supply

contract from PLN Batubara
PT Lestari Cipta Persada, through its
subsidiary PT Prolindo Cipta Nusantara
(PCN), has recently secured contract
to supply as much as 1.2 million tons
of coal per year to PT PLN Batubara, a
coal subsidiary of state-owned electricity
company PT PLN.
President Director of Lestari Cipta
Henry Soetio told Petromindo.com
recently that the contract was signed a few
weeks ago. It has been signed, and we
CA|Khalsa
Golden Energy seeks to

increase sales in ASEAN,
domestic markets
Henry Soetio
will supply around 300,000 tons in every

three months, he said.
This year we will be focusing
on the domestic market especially the
production from PCN in Sebamban, South
Kalimantan, he said. Rather than selling
coal to overseas markets with cheaper
price, we prefer to assist our government
for generating the power.
This year, PCN aims to produce
around 3.1 million tons of coal.
The company is budgeting around Rp
170 billion for capital expenditure this year.
We will upgrade and maintain
heavy equipment at the coal mine, such
as excavators, backhoes, he said adding
that some of the funds are allocated for
repairing jetty at Angsana, Batu Licin.
Noble eyeing domestic fuel,

coal market
SGX-listed global commodity
trader Noble Group has started business
to supply coal and liquid fuel to the
Indonesian market.
According to the companys

annual report released recently, it had
delivered its first cargoes of distillate to
Indonesia last year and has started its first
Indonesian diesel supply chain deliveries.
We, in partnership with our Oil
Liquids team, are developing new
opportunities to supply diesel and
other products to coal miners and
other consumers in both Indonesia and
Australia, the company said.
According to the report, the company
has 49 percent shares in PT Sriwijaya
Multi Terminal and PT Karimata Baru
Terminal, with principal activites are in
fuel storage, supply and distribution.
In Indonesia, while the regulatory
environment and changes in it continue
to play a part, our volumes and supply
relationships have increased. Our recent
initiatives in the domestic Indonesian coal
supply also continue to grow, as does the
role of our low energy coal trading hub
based in Sumatra, the company said
without giving further details.
Businesses warn against closure

of coal activities in Cirebon port
primarily as source of fuel, which in turn

will undermine their competitiveness
and may eventually lead to massive
layoffs.
The Ministry of Transportation
issued on March 10 a letter instructing
state-owned port operator PT Pelindo II
to suspend coal unloading and loading
activities at the Cirebon port by March
25 at the latest following complaints of
environmental pollution.
Head of the Cirebon Port Rivolindo
(one name) said that the port can resume
coal activities after Pelindo completes
revision of the environmental impact
assessment study (or Amdal) of the port.
The Cirebon port currently handles
about 3 million tons of coal per year, a
surge from 300,000 tons per annum in
2002, to serve the coal demand from

industries in West Java.
Cement maker PT Indocement
Tunggal Prakarsa reportedly would shut
down of its two cement processing plants
due to uncertainty over coal supply
following reports that the port authority in
Cirebon will suspend coal unloading and
loading activities.
News portal FokusJabar.com quoted
head of supply department at Indocement
Cirebon, Agus Triwono as saying that
due to uncertainty over coal supply, the
company decided to only operate one
cement processing plant, which will
consequently cut down the companys
output by half from normal level of 3,500
tons per day. Indocement requires about
800 tons of coal per day for one plant.
CA|Boim
oal miners and manufacturing

companies met recently
with the Cirebon Regency
Legislative Council (DPRD)
in a bid to stop the planned shut-down of
coal unloading and loading activities at the
Cirebon Port in West Java.
The companies during the meeting
asked the help of the legislative council
to issue a recommendation to cancel the
planned suspension of coal activities at the
port, reports said.
Head of the Cirebon chapter of
the Young Indonesian Businessmen
Association (HIPMI Cirebon) Eki
Bahtiar said that ending coal activities at
the Cirebon port will disrupt coal supply
to local manufacturing industries in
West Java which rely on the commodity
25
UTs February coal sales

volume drops 27%
CK obtains new mining

services contract
Mining services company PT Cipta
Kridatama (CK), a subsidiary of IDXlisted integrated mining firm PT ABM
Investama Tbk, has recently won a
new contract worth Rp 1.14 trillion (or
about US$82 million) from coal mining
company PT Indomining (IM), which is
a subsidiary of IDX-listed coal miner PT
Toba Bara Sejahtera Tbk.
ABM said that the new contract,
which is valid until 2021, was signed on

April 1 by Cipta President Director Irfan
Setiaputra and IM President Director
Arthur Simatupang.
Under the five-year contract, Cipta
will provide services for overburden
removal at a 683-hectare mine in SangaSanga, Kuta Kartanegara Regency, East
Kalimantan, the statement said, adding that
the overburden removal volume until end
of contract is projected to reach 65 million
bank cubic meters.
ABM said that this is the second
contract of Cipta with the Toba Bara
group, after it signed a $396 million
contract in June of last year with PT
Adimitra Baratama Nusantara, another
Toba Bara subsidiary, which also operates
mines in Sanga-Sanga.
CA|Boim
IDX-listed heavy equipment and coal

mining company PT United Tractors Tbk
(UT) reported that coal sales volume in
February of this year reached 583,000 tons,
or a 27 percent drop compared to 456,000
tons in the same month of last year.
The company operates four coal mines
including Prima Multi Mineral (PMM)
in South Kalimantan, and Asmin, Tuah
Turangga Agung (TTA), and Duta Nurcahya
(DN) located in Central Kalimantan.
Meanwhile, UTs mining contractor
unit PT Pamapersada Nusantara produced
8.0 million tons of coal in February, down
compared to 8.4 million tons in the same
month of 2015. Pamas overburden removal
was 55.9million bcm, down compared to
58.2 million bcm in February 2015.

UT sold a total of 348 units of Komatsu
heavy equipment in February, down from
519 units in the same period of last year.
Of the 348 units sold in February, 69 units
were sold to the mining sector.
CA|Boim
[ INDUSTRYNEWS ]
CA|Khalsa
Geo Energy obtains SGX approval for

acquisition of Borneo International shares
GX-listed Geo Energy

Resources Limited said it has
obtained the required approval
from the stock exchange for
the acquisition of the remaining 34
percent shares in Borneo International
Resources Ltd.
The company wishes to announce
that it has on 18 March 2016 received the
approval in-principle of the Singapore
Exchange Securities Tradin Limited
(SGX-ST) for the Acquisition and the
listing and quotation for an aggregate of
up to 27,222,222 ordinary shares in the
capital of the company (consideration
shares), Geo Energy said in a statement.
The approval in-principle granted by
the SGX-ST for the listing and quotation
of the consideration shares is subject to

certain conditions, inter alia, compliance
with the SGXSTs listing requirements,
it added.
As has been previously reported,
Geo Energy entered on December 26,
2015 into conditional sale and purchase
agreement with Optimum Source Limited
for the acquisition of 68 ordinary shares
representing the remaining 34 percent
shareholding interest in Borneo not already
owned by the company.
The company explained that as
part of the consideration payable under
the agreement for the acquisition, the
following sums remain to be paid in the
form of cash, cash equivalents and shares,
or such form as both parties may agree:
i. US$ 3.5 million paid by way of

ordinary shares of the purchaser,
priced at S$0.18 per ordinary share,
at a foreign exchange conversion rate
of US$1 : S$1.4 after the approval for
the listing and quotation of the shares
by the Singapore Exchange Securities
Trading Limited (the SGX-ST); and
ii. US$ 4.5 million paid by 31 December
2016.
Borneo, through various intermediate
holding companies, holds an effective
equity interest in Indonesian coal firm
PT Sungai Danau Jaya of 98.96 percent.
The acquisition enables Geo Energy
to collectively own the entirety of this
interest.
27
[ INDUSTRYNEWS ]
CA|Boim
Cokal completes sale of AMM
SX-listed metallurgical coal

company Cokal Limited
announced the completion
of the sale of its 75 percent
interest in of PT Anugerah Alam
Manuhing (AMM) for US$ 150,000 to
PT Jinantra Karya Raya an Indonesian
company owning the tenements adjacent
to AMM.
Cokal said in a statement it
considered AMM a non-core tenement
located a considerable distance west,
in another geological formation, from
Cokals main tenements located in
Central Kalimantan.
While PT AAM contains high
Calorific Value (CV) thermal coal,
is contains little possibility of any
discovery of metallurgical coal, the
core focus for Cokal. It was therefore
considered appropriate in the current

climate to realize the value of AAM,
reduce ongoing liabilities and to use
the funds for working capital while
the board purse the funding options
previously announced, the company
explained.
In addition and as a result of the
experience built up over past five years
by Cokal in the Indonesian mining
regulatory process-Cokals Bumi Barito
Mineral Coal Project (BBM) being
the only mining project to be issued a
new Production Forestry Borrow and
Use Permit (IPPKH) approval since
the new process was announced by the
Indonesian Government on January 26,
2015Cokal will provide PT Jinantra
Karya Raya non-exclusive consulting
services on a retainer basis. The retainer
is for US$400,000 and expires on June

12, 2016.
According to Cokals website,
AAM is a foreign investment company
(PMA) with an ownership structure
comprising Cokal 75 percent and
Indonesian owners 25 percent. A total
of eleven coal outcrops were recorded
during a geological mapping survey
investigation which discovered coal
seam thicknesses ranging between
0.42m and 4.20m.
The field descriptions and
photographic evidence are supportive of a
high rank coal. These higher coal ranks are
characterised by very low volatile matter
content, very high carbon content and
high specific energies. At this stage, AAM
is interpreted to consist of thermal and
metallurgical coals of export quality.
31
[ ELECTRICITYNEWS ]
Krakatau to build new coalfired power plant
Resource Alam sets up new

subsidiary
IDX-listed coal mining company PT
Resource Alam Indonesia Tbk announced it
has set up a new subsidiary called PT Bumi
Hidro Energi, engaged in the development of
hydro and mini hydro power plants.
the board of directors of the new subsidiary
includes Bambang Prijonohadi as President
Director, Eric Adijanto and Tan Chandra
Yapri as Directors.
Meanwhile, the board of commissioners
includes Pintarso Adijanto as President
Commissioner, and Luiyanto Yamin and
Suparno Adijanto as commissioners. No
further details were provided.
PLN to develop two power

plants, transmission line in Nias
State-owned electricity company PT PLN
plans to develop two dual-fired power plants
and a new transmission line in Nias Regency,
North Sumatra, to increase power supply in

the region, which has been suffering from
blackouts recently following the shutdown of
leased plants.
PLN Director for Sumatra Region, Amir
Rosidin said that construction of the first gas
and diesel fired power plant with a capacity of
25 MW is expected to be completed and start
operation in August of this year.
He said that the company is currently in
the process of completing land acquisition for
the US$18.7 million power plant project.
He added that a GE engine from the US
has arrived in Singapore and is ready to be
shipped to Nias.
Meanwhile, for the second power plant,
with a capacity of 20 MW, PLN will hold a
tender next year. The company hopes to be
able to complete the second power plant also
in 2017.
Amir said PLN will also develop a 70
kV 120-km transmission line from North
Nias to South Nias to support the two
new power plants. He said that that the
transmission line project is expected to be
completed in 2018.
CA|Boim
IDX-listed steel giant PT Krakatau Steel

Tbk plans to develop a new 150 MW coalfired power plant at its steel plant complex
in Cilegon, Banten, to meet growing internal
demand for electricity as the capacity of the
steel plant is being expanded.
Krakatau Steel President Director
Sukandar (one name) said that the electricity
output will be entirely allocated for internal
use. He added that the project is currently at
the pre-qualification tender stage.
He said that the company has prepared
the necessary financing including from
external sources as the company has standby
loans worth US$260 million. He did not say
when the construction of the power plant will
start and complete.
Krakatau is developing a second hot
strip mill, with production capacity of 1.5
million tons per year, in Banten, which
is projected to start production in the first
half of 2018 as part of expansion program
to meet growing domestic demand in
the future. Krakatau currently has annual
production capacity of 3.9 million tons of hot

rolled coil (HRC).
DSSA: Sumsel-5 power

plant to start operation in
June
IDX-listed energy and mining firm
PT Dian Swastatika Sentosa Tbk (or
DSSA) said it will start commercial
operation of its 2x150 MW IPP coalfired power plant in South Sumatra by
the end of this semester.
According to the companys
Annual Report filed with the IDX,
construction works at Sumsel-5 power
plant have been completed and testing
and commissioning are currently
conducted prior to commercial
operation.
The appointed contractors for the
construction of this power plant are
China National Electric Engineering
Co. Ltd. and Harbin Power System
Engineering & Research Institute Co.
Ltd. Parsons Brinckerhoff Consultant

was appointed as Owners Engineer.
The US$400 million project is
located in Musi Banyuasin Regency.
The output will be purchased by
state-owned electricity firm PT PLN
under a 25- year power purchase
agreement.
Aside from Sumsel-5, DSSA is
also planning to develop a 2x50 MW
Kendari-3 coal-fired power plant in
Southeast Sulawesi with construction
expected to start this year.
Bumi Suksesindo, PLN

sign amendment to power
contract
IDX-listed gold mining firm
Merdeka Gold announced that its
subsidiary PT Bumi Suksesindo
(BSI) has signed an amendment to
its contract with public utility PT

Perusahaan Listrik Negara (Persero)
(PLN) for the supply of power to BSIs
gold mine in Banyuwangi regency,
East Java province.
Under the new contract, PLN will
raise the voltage of its power supply
from 345 kVA to 8,660 kVA.
PLN will provide a premium
service for BSI. In return, BSI
will pay PLN Rp 47 billion for the
power and installment of supporting
facilities. The payment will be made in
installment.
BSI holds permit for the Bukit
Tujuh concession. According to 2012
JORC, the Bukit Tujuh mine holds
ore reserves of 90 million tons in its
oxide layer. The project is expected
to produce 90,000 ounces of gold and
300,000 oz of silver per year from late
33
[ ELECTRICITYNEWS ]
PLN: E. Java enjoys power
surplus of 2,600 MW
CA|Khalsa
State-owned electricity company PT

PLN said that East Java is now enjoying
power surplus of 2,600 MW, a condition
that is expected to help lure fresh
investment in the province.
PLN said in a statement that East Java

has installed capacity of 8,600 MW, with
peak load of 6,000 MW. This means that
East Java is enjoying a surplus of more
than 2,000 MW, said Senior Manager for
Public Relations at the company, Agung
Murdifi in the statement.
He said that the power supply comes

from several power plants located in a
number of areas such as Probolinggo,
Tuban, Gresik, and Pacitan.
He added that aside from power
supply, PLN has developed a number
of supporting infrastructure facilities
including the Sambikerep relay station
(GI) 2x60 MVA, GI Sidoarjo 1x60 MVA,
and the uprating of GI Bulukandang from
30 MVA to 60 MVA.
Agung said that PLN is currently in
the process of completing the construction
of a number of power plants in the
province including the 350 MW PLTU
Tanjung Awar-Awar unit II coal-fired
power plant, which is expected to be
completed June 30; 450 MW PLTGU
Grati Peaker combined-cycle power plant
(targeted for completion end 2017; and
the 1x660 MW PLTU Adipala coal-fired
power plant (target for completion on
August 31, 2016).
Chinese consortium wins

Jawa-5 power plant tender
A consortium comprising of Chinese
companies China Oceanwide and Shanghai
Electricity, and PT Pembangkitan Jawa
Bali (PJB), a subsidiary of Indonesias
state-owned power company PT PLN,
has been named as the winning bidder for
the 2x1,000 MW PLTU Jawa-5 coal-fired
power plant, West Java, according to a
source.
The source told Petromindo.com
that the consortium outbid five other
consortia including consortium of SSP,
CNEC, Wika; YTL, Bumipertiwi, Indika;
Mitsubishi, Kepco, Siemens, Barito; GDF,
Mitsui, Adaro; and Sumitomo, Chubu,
Wasamitra.
As has been previously reported, the
PLTU Jawa-5 project will be located either
in West Java or Banten, to be decided
by the winning bidder. Total estimated
investment is around Rp 40 trillion.
IHI, Toshiba win orders for

Lontar power plant expansion
project
Japans IHI Corporation and Toshiba
Corporation said they have won contracts
to supply key equipment for the 315 MW
Lontar ultra super-critical coal-fired power
plant being developed by Indonesias
state-owned electricity company PT PLN
in Banten.
The two firms said in separate
statements that the contracts were obtained
from Sumitomo Corp, the leader of a
consortium appointed by PLN as the
EPC contractor for the project, which
is an expansion of the Lontar coal fired
power plant capacity by 315 MW from the
current 945 MW. They did not disclose the
value of the contracts.
IHI Corporation said it has been
awarded a contract to supply one boiler
for the construction of a fourth unit to

the Lontar power station. The fourth unit
will be built next to the existing units 1
to 3, and is expected to start commercial
operation in 2019.
Meanwhile, Toshiba said it has
received an order to supply a steam turbine
and generator (STG) for the project.
Toshiba said it will start delivery of the
STG in January 2018.
In order to respond to the increasing
electricity demand as a result of
rapid economic growth and societal
development, Indonesia is implementing
its 35GW power plants development
plans, with plans to install 35GW of
additional power generating facilities over
5 years from 2015 to 2019. This project,
based in the suburbs of Jakarta, is expected
to contribute as part of the early source of
electricity supply.
Inalum hopes construction of

power plant to start this year
State-owned aluminum producer PT
Indonesia Asahan Aluminium (Inalum)
said that the feasibility study for a planned
2x350 MW coal-fired power plant in
North Sumatra has been completed,
hoping that construction process can be
started in the fourth quarter of this year.
We expect groundbreaking to be held
(this year), said Inalum President Director
Winardi to Petromindo.com.
Inalum requires additional electricity
supply as the company plans to double
production capacity to 500,000 tons per
year in 2020.
The North Sumatra-based company
is teaming up with IDX-listed coal giant
PT Bukit Asam Tbk in the Rp 20 trillion
power plant project, whose completion is
projected in 2019.
35
[ ELECTRICITYNEWS ]
Mudajaya acquires interest in

W. Papua power plant project
from the Commercial Operation Date in Manokwari, West Papua

of Indonesia.
The financial close pursuant to the PPA is October 26, 2016, the
statement added.
Mudajaya said the proposed acquisition is subject to certain
conditions precedent (CPs) in the CSPA which include a
satisfactory result of financial, legal, technical and commercial
due diligence exercises (collectively referred to as the due
diligence exercise.
The consideration sum for the proposed acquisition will be
agreed by all parties upon satisfactory completion of the CPs and
due diligence exercise, it added.
The CSPA is not subject to the approvals of the shareholders
of Mudajaya or any government authorities in Malaysia, the
company said.
CA|Boim
alaysias Mudajaya Group Berhad signed an

agreement to acquire a 73.69 percent equity interest
in PT Harmoni Energi Indonesia Manokwari
(HEIM), which is developing a coal-fired power
plant in West Papua.
Mudajaya said in a statement that its indirect 95 percent
owned subsidiary PT Mudajaya Energi Indonesia signed the
conditional shares shale and purchase agreement (CSPA) with
PT HEIM and the latters parent firm PT Indomuda Satria
Internusa.
The statement said that PT HEIM is a special purpose vehicle
which has a Power Purchase Agreement (PPA) with Indonesian
state-owned electricity company PT PLN Papua and West Papua
Regional Branch for the development of a 2x7 MW coal-fired
steam power plant on a Build-Operate-Own basis for 25 years
PLN reduces coal-fired power

plant projects
State-owned electricity firm PT PLN
is reducing the number of coal-fired power
plant projects in the future as it seeks to
prioritize clean sources of energy, Kontan
reported.
The paper said that PLN has recently
completed its 2016-2025 electricity
procurement business plan. Under this
new plan, there is lesser number of coalfired power plant projects compared to the
previous 2015-2024 plan, with difference
reaching a combined capacity of 8,000 MW.
PLN Director of Business for East Java
and Bali region, Amien Subekti said that
the company will focus more on developing
power plant projects with clean sources of
energy. Well prioritize renewable, as a
consequence coal-fired power plants will be
postponed, but it doesnt mean there will be
none at all, he said.
Amien said that the change is needed
to help meet the governments energy
mix target, in which renewable sources
of energy are targeted to account for 23
percent by 2025.
State-owned electricity company PT

PLN has added another 270 MW of power
capacity to the South and Central Kalimantan
system following the completion of a coalfired power plant and a gas-fired power
plant, Antarakalsel.com reported.
Manager at PLN South Kalimantan
and Central Kalimantan regional office,
Idaman Lingga was quoted as saying
that the PLTU Pulang Pisau 120 MW
coal-fired power plant and the PLTG
Mangkanai 150 MW gas-fired power
plant, both located in Central Kalimantan,
have been completed in recent months.
He, however, said that there is a
serious obstacle in supply the electricity
CA|Khalsa
PLN adds 270 MW power

capacity in South, Central
Kalimantan
output to the consumers in the region as

construction of the entire transmission
facility has yet to be completed due to land
acquisition problem.
He said that transmission between
Mangkanai and Muara Teweh, and between
Muara Teweh and Butok have been
completed. However, one section in South

Barito has yet to be linked as local villagers
demanded excessive price for their land
required for the transmission project.
Idaman hopes the local administration
could help resolve the land acquisition
problem.
37
[ ELECTRICITYNEWS ]
PLTU Teluk Kaltim to
operate soon
Intraco aims to increase stake

in power plant project
IDX-listed heavy equipment company
PT Intraco Penta Tbk aims to increase
CA|Khalsa
State-owned electricity company

PT Perusahaan Listrik Negara (Persero)
(PLN) said PLTU Teluk Kaltim coal fired
power plant, with the capacity of 2x110
MW in Kariangau vilage, Balikpapan
Utara, East Kalimantan province, is now in
pre-commissioning phase.
We are testing the power plant
prior to commissioning, PLNs Senior
Manager of Public Relations Agung
Murdifi told Petromindo.com.
PT Pembangkitan Jawa Bali, a
subsidiary of PLN, said in its internal
magazine Info PJB that the power plant is
expected to enter Commercial Operations
Date (COD) in April 2016 for Unit 1 and

in June 2016 for Unit 2.
The groundbreaking ceremony for the
project was held on 25 March 2011 by
Dahlan Iskan then PLNs president director.
The project is part of the first phase
10,000 MW Fast Track Program (FTP-1).
The power plant is being developed by a
consortium consisting of PT Adhi Karya
and Sinohydro Corporation. So far, the
project is the biggest power plant project in
eastern Indonesia.
its stake in a joint venture company that

would develop 2x100 MW coal-fired
power plant in Pulau Baai, Bengkulu
Province, Bisnis Indonesia reported.
The paper quoted Intraco President
Director Petrus Halim as saying that in
an agreement with its partner Synohidro
Hong Kong Ltd, a subsidiary of Power
Construction Corporation of China,
the company has an option to increase
its stake from 30 percent to 49 percent
once the power plant has started
operation.
Intraco through subsidiary PT Inti
Daya Perkasa and Synohidro has set up a
joint venture company called PT Tenaga
Listrik Bengkulu (TLB), which would
develop the US$360 million power plant,
which would become the first coal-fired
power plant in Bengkulu. Construction is
expected to start in 2017, and targeted to
be completed in 2020.
Meanwhile, Kontan daily said the
power plant will be located on a 35ha plot of land owned by state-owned
port operator PT Pelindo II, which will
cooperate with Intraco to develop a jetty
to facilitate the shipment of coal for the
power plant, which will require 1 million
tons of coal per year, to be supplied by
Intraco.
Intraco Finance Director Imam
Liyanto said that about 75 percent, or $270
million of the funding requirement for the
power plant project will come from bank
loans, both foreign and local. Imam said
bank loans are expected to be raised in the
fourth quarter of this year. A number of
local banks have shown interest to provide
the loans, he said.
The consortium signed a power
purchase agreement (PPA) of the BOTscheme project with state owned electricity
firm PT PLN on November 25, 2015,
under which TLB will sell the power to
PLN at a price of US$7.3 per kWh for 25
years.
CA|Boim
Dian Swastatika units

increase capital
DX-listed energy firm PT Dian

Swastatika Sentosa Tbk announced
that power company PT DSSP Power
Sentosa, the companys indirect
subsidiary with effective ownership of more
than 99 percent, has increased its authorized
capital from Rp 1,000,000,000 consisting
of 1,000 shares to Rp 200,000,000,000
consisting 200,000 shares.
Dian said in a statement that DSSP
Power also increased its issued and paid
up capital from Rp 250,000,000 consisting
of 250 shares to Rp 60,250,000,000
consisting of 60,250 shares, with issuance
of 60,000 new shares, of which all new
shares were subscribed by PT DSSP
Power Mas Utama.
Shareholding structure of PT DSSP
Power Sentosa after the above-mentioned

capital increase consists of PT DSSP
Power Mas Utama as the owner of
60,249 shares with nominal value of Rp
60,249,000,000 and PT DSSE Energi
Mas Utama as the owner of 1 share with
nominal value of Rp 1,000,000.
Futhermore, Dian said that PT SKS
Listrik Kalimantan, companys indirect
subsidiary with effective ownership more
than 99 percent, has increased its authorized
capital from Rp 12,000,000,000 consisting
of 120,000 shares to Rp 200,000,000,000
consisting of 2,000,000 shares.
SKS Listrik Kalimantan also increased
its issued and paid up capital from Rp.
12,000,000,000 consisting of 120,000
shares to Rp 60,600,000,000 consisting of
606,000 shares, with issuance of 486,000

new shares, of which all new shares were
subscribed by PT DSSP Power Sentosa.
At the same time, the shareholders of
PT SKS Listrik Kalimantan, i.e Hillmas
Coal Pte. Ltd., Kalteng Investment
Pte. Ltd., Shaanxi North West Power
Corporation (Singapore) Pte. Ltd..
transferred all their shares to PT DSSP
Power Sentosa. Shareholding structure
of PT SKS Listrik Kalimantan after the
above-mentioned capital increase and
internal restructuring consists of PT
DSSP Power Sentosa as the owner of
600,000 shares with nominal value of Rp
60,000,000,000 and PT Blackmas Makmur
as the owner of 600 shares with nominal
value of Rp 600,000,000.
39
[ COMPANIES ]
Adaro confident on Batang

project financial closure
By Thomas Robiana Sembiring
be made in April of this year. It is now

facing another risk of delay as a key
foreign creditor has recently complained
about a central bank regulation requiring
the use of the rupiah in domestic
transaction including in the sales of
electricity to PLN.
But Garibaldi Tohir, President
Director of IDX-listed coal giant PT
Adaro Energy Tbk, which owns PT Adaro
Power, a member of a consortium along
with J-Power and Itochu Corp which won

tender for the estimated US$4 billion
power plant project in 2011, is confident
that financial closure for the project can
be made in June of this year, a slight twomonth delay.
Were confident that financial
closure can be reached by June 6 (of
this year) so that construction of the
Batang power plant can be realized, he
said on April 19.
CA|Khalsa
hen state-owned
electricity company
PT PLN, at the
request of the
government, managed to successfully
complete earlier this year acquisition of
the remaining land requirement for the
giant 2x1,000 MW coal-fired power plant
project in Batang, Central Java, financial
closure for the key project, which had
suffered lengthy delays, could be finally
Garibaldi Tohir
He said that the slight delay was

due to factor outside the control of the
consortium as Japan Bank for International
Cooperation (JBIC) has protested the
central bank regulation. JBIC and the
Indonesian authorities are currently in
negotiation process to resolve the problem,
he added.
Garibaldi believes that both parties
will come to an agreement as the
Batang power plant project, is deemed
important by both the Indonesian and
Japanese governments. He pointed
out that for Indonesia, the project will
help meet future power demand in
the countrys main Java-Bali power
system.
Bank Indonesia, the central bank,
issued last year a regulation requiring the
use of the rupiah in domestic transaction in
a bid to help stabilize the local unit. But
power industry experts have said that the
regulation would create difficulties for
independent power producers as they rely
on foreign loans notably US dollars, amid
the lack of domestic financing capacity,
while revenue from electricity sales will be
in rupiah.
BPI won tender for the Batang
power plant project in 2011, the first
unit of which was supposed to be
completed in 2016. The electricity
output will be sold to PLN under a
25-year supply contract. However, the
consortium could not reach financial
closure as it faced difficulties in
completing acquisition of the required
226 hectares of land amid opposition
from environmental groups and some
landowners demanding excessive
price. The government then assigned
PLN in November of last year to help
BPI in acquiring the remaining 29-ha
of land by applying the 2012 law on
land acquisition, which allows the
government to seize peoples land
for projects considered as public
facilities. Following the completion of

the land acquisition, the Batang power
plant project is now expected to be
completed in 2019.
Garibaldi said that since the
completion of the land acquisition
process, there has been significant
progress in the pre-construction of the
power plant project including the hand
of the project site to the consortium in
March.
Key player
Adaro, which owns a 34 percent
stake in the Batang power plant project,
is gearing up to play an aggressive drive
in the countrys power plant development
in response to the current President Joko
Widodo administrations program to push
for the development of a combined 35,000
MW power plants by 2019.
Garibaldi said that its experience in
terms of land acquisition and developing
relations with PLN and the government
in past power projects particularly
the Batang project are considered as
important assets for the company in
pursuing new future power projects
as the company aims to become a key
player in the power sector.
He said that the diversification into
power plant business also forms part of
the companys strategy to cut dependency
on revenue from coal amid the lingering
downturn of the commodity. He said
that Adaro is aiming to develop a total of
5,000 MW of power plants over the next
few years, and projected revenue from the
power plant business to account for about
a third of total revenue when the projects
are completed in 2020, while coal and
logistics to each also contribute about a
third.
Coal currently accounts for about
60 percent of total revenue, while
the power business unit accounts for
between 5-10 percent, said Adaro Chief
Finance Officer David Tendean. Last

year, net profit fell by 17 percent to
$151 million from the previous year,
while revenue declined by 19 percent
to $2.68 billion. David said that by
diversifying into power plants, Adaro is
expected to have a more stable business
model, ending reliance on coal as main
source of revenue.
Adaro currently has power plants
with combined capacity of 2,200 MW.
The company is currently in the process
to develop a 2x100 MW in Tabalong,
South Kalimantan with estimated
investment of about $500 million.
Financial closing for this project is also
expected in June of this year, with bulk
of the funding expected to come from
banks in Japan and Singapore. The
power plant project will be developed
by PT Tanjung Power Indonesia (TPI),
a joint venture with EWP Indonesia, a
subsidiary of Korea East-West Power.
Adaro holds a 65 percent interest in TPI.
Adaro is also teaming up with
China Shenhua Overseas and
Development to develop a 2x300 MW
mine mouth power plant at its coal
mine in East Kalimantan.
Garibaldi said that the planned new
power plant projects is just a start as the
company will continue to expand the
power plant business in the future to
meet growing electricity demand in this
Southeast largest economy, adding that
Adaro has sufficient coal resources to
support power plant development. This is
just the beginning, he said, as he pictured
Indonesia as similar to China some 25
years ago when the giant Asian country
was about to embark on massive power
plant development to support economic
growth.
Adaro shareholders re-appointed
Garibaldi as president director of the
company for another five-year term until
2021.
41
[ COMPANIES ]
Resources Prima reports lower

coal reserves, resources in
E. Kalimantan concession
GX-listed integrated coal

mining firm Resources Prima
Group Limited announced the
following updated estimates
of coal reserves and coal resources for
the mining concession area of its East
Kalimantan coal subsidiary PT Rinjani
Kartanegara (PT Rinjani) as at December
31, 2015, based on independent qualified
persons report (IQPR 12/15).
Although PT Rinjani has been granted
a Production Operation IUP (mining
business licence) to carry out coal mining
operations in the mining concession
area covering 1,933 ha, currently only
an area covering 308.54 ha of the total
mining concession area, has secured
a permit to borrow and use forest area
(IPPKH1) from the Indonesian Minister
of Forestry. The permit to borrow and
use forest area is required to allow the
Group to clear forested land to commence
mining operations at the mine site in East
Kalimantan, Indonesia.
On January 8, 2016, the Group
announced that PT Rinjani had, on January
6, 2016, received the in-principle approval
for a new permit to borrow and use forest
area covering an additional 899.47 ha of the

PT Rinjani mining concession (IPPKH2).
Currently, PT Rinjani is working with the
Indonesian Minister of Forestry to, amongst
others, (i) determine the approved areas
boundary coordinates; and (ii) measure
and quantify the volume of plants and
trees in cubic metres within the boundarys
coordinates, which are both pre-requisites
for the issuance of the IPPKH2.
Due to a delay in the approval process
for IPPKH2, it has been necessary for PT
Rinjani to dump overburden waste outside
the designated dumping areas specified in
the life of mine plan. This waste dumping
has resulted in the sterilisation of Coal
Reserves amounting to approximately
1.1 Mt during the financial period from
April 1, 2015 to December 31, 2015
(9MFYE15). This sterilisation, together
with depletion due to production during
9MFYE15 and a positive reconciliation
adjustment accounts for a 38 percent
reduction in Coal Reserves reported as
at December 31, 2015. A reconciliation
analysis comparing the geological model
coal tonnes against the actual production
coal tons since the start of mining
warranted a change to the coal recovery

parameters that resulted in a positive
reconciliation adjustment to the Coal
Reserves estimate. The dumping locations
for the waste overburden were selected so
that the coal sterilised was of a higher strip
ratio and therefore a higher extraction cost
within the deposit.
Exploration within the PT Rinjani
mining concession area has been limited
by the boundary constraints of the current
permit to borrow and use forest area
(IPPKH1). Consequently, no additional
exploration or development has been
undertaken during 9MFYE15 in the
mining concession area. Once IPPKH2
is obtained, the Group shall commence
further exploration in the additional 899.47
ha area permitted under IPPKH2. This
exploration may potentially lead to an
increase in the Coal Resource and Coal
Reserve estimates. Until the execution
of this IPPKH2 focused exploration
programme, there has been insufficient
exploration to estimate a Coal Resource
and it is uncertain if further exploration
will result in the estimation of a Coal
Resource in the IPPKH2 area.
Coal Reserves and Coal Resources Estimates for the PT Rinjani Mining Concession Area as at December 31, 2015
Category
RESERVES(5)
Proved
Probable
Total
RESOURCES(3&5)
Measured
Indicated
Inferred
Total
Mineral Type
Gross Attributable to Licence(1)

Tons (millions)
Grade
Tons (millions)
Net Attributable to the Company(4)

Grade
Change from previous update(2)(%)
Coal
Coal
Coal
1.4
1.3
2.7
Sub-bituminous B
Sub-bituminous B
Sub-bituminous B
1.1
1.0
2.2
Sub-bituminous B
Sub-bituminous B
Sub-bituminous B
-57%
15%
-38%
Coal
Coal
Coal
Coal
11.3
3.6
4.7
19.6
Sub-bituminous B
Sub-bituminous B
Sub-bituminous B
Sub-bituminous B
9.0
2.9
3.8
15.6
Sub-bituminous B
Sub-bituminous B
Sub-bituminous B
Sub-bituminous B
-19%
-10%
-1%
-14%
43
[ COMPANIES ]
Toba Baras profit down

27% to $25.7m in 2015
DX-listed coal mining firm PT Toba Bara Sejahtra Tbk.

announced that it booked US$25.7 million in profit (before
minority interest), down 27.6 percent year on year (y-o-y),
after taking into account finance cost of $4.6 million and tax
expense of $13. 4 million.
The company booked sales of US$ 348.7million in 2015,
30.3 percent lower compared to 2014, as a result of lower sales
volume and weaker NEWCIndex price. However, margins such as
gross profit margin, EBITDA margin, and operating profit margin

improved over the same period due to continuous operational
improvements and cost management disciplines.
A 32.8 percent decrease in cost of goods sold from US$ 413.8
million in 2014 to $278.1million in 2015 resulted mainly from
contraction in FOB cash cost, slipping by 17.7 percent y-o-y from
$51.3 per ton to $42.2 per ton in 2015. This stemmed from a
combination of cost management initiatives and better execution
CA|Boim
of mine plan. FOB cash cost is derived

from cost of goods sold plus marketing
and selling expenses and subtracting
depreciation and amortization. Based on
the mine plan, the 2015 production was set
at 6.1 million tons or 24.7 percent lower
compared to that in 2014. Sales volume
6.4 million ton or 19.0 percent lower
compared 2014
EBITDA margin solidly increased
from 13.4 percent in 2014 to 15.4
percent in 2015 and EBITDA per ton
stabilized from $ 8.5 to $8. 4 y-o-y
despite a 19.9 percent contraction in
EBITDA from $67. 0 million in 2014.
This was attributable to predominantly

better mine plan execution and cost
management initiatives including
lowering mining cost during a
challenging period.
The company currently has four
operating subsidiaries, three in coal mining
namely PT Adimitra Baratama Nusantara
(ABN), PT Indomining (IM), PT Trisensa
Mineral Utama (TMU) located in East
Kalimantan.
In the fourth quarter (4Q) of 2015,
the companys production volume of 1.5
million tons came in line with its 2015
quarterly guidance of between 1.5 2.0
million tons. Such production volume
resulted from operations of all three
operating subsidiaries with the following
respective contributions: ~1.0million tons
from ABN, ~0.3million tons from IM, and
~0.2million tons from TMU.
To date, ABN remained as the
main contributor to the companys
total production volume, while all three
subsidiaries achieved their respective
quarterly production volume targets
consecutively over the last four quarters.
Y-o-y stripping ratio (SR) declined by
7.5 percent to 12.3x in 2015 from 13.3x in
2014 due to continued efforts in improving
operational performance amidst the low
coal price environment, while complying
with disciplined mine plan execution.
ASP only contracted by 14.0 percent
y-o-y from $ 63.7 per ton in 2014 to $
54.8 per ton in 2015, which compared
favorably with NEWC Index price that
fell 16.4 percent y-o-y over the same
period. To date, the ASP outperformance
over the NEWC Index price has so far
materialized for three consecutive years
in 2013, 2014, and 2015. The company
capitalized on the market momentum
during the latter parts of 2013, 2014, and
2015 by selling forward to its quality
buyers the majority portion of its sales
volume predominantly based on fixed
pricing. This marketing initiative has

enabled the Company to maximize its
pricing strategy given the adverse coal
market condition.
2016 capex
Toba Bara Sejahtra said it has set
aside between US$10 million and $14
million for capital expenditure this
year, which is the same as last years
allocation, to support its ongoing
sustainability strategy.
The planned capex is expected to
support its operational mining facilities
and equipment (conveyor and heavy
equipment) and plantation entity, Toba
Bara said in a statement recently when
unveiling its 2015 financial performance
results, in which the company reported
lower sales revenue and profit due to
a combination lower sales volume and
selling price.
Toba Bara previously said that it
has set coal production target of 5-7
million tons for this year, or about the
same as last years. As part of efficiency
measures to help cope with the current
coal downturn, the company said it will
stabilize stripping ratio at 11x-12x level,
lower than last year 12.3x.
Given the continued adverse
and more complex market dynamics,
the company is expected to focus its
resources and efforts on strengthening
resilience and identifying viable avenues
to generate sustainable long term
growth, Toba Bara said in the statement.
For the past few years, the company
has been continuously improving cost
efficiencies by running executable mine
plans that meet the combined objective
of achieving profitable targets and
preserving reserves, it added.
In line with this objective, the
company said it focuses on its continuous
strategy of improving operational, cost
management, marketing capability.
45
[ COMPANIES ]
ITMG benefits from cost

efficiency initiatives
By Brigida Ernestina Elu Wea & Tri Subhki Rakhmatullah
CA|Mudasir
espite the weak price

environment, some coal
miners continue to enjoy
profits, thanks to efficiency
and cost reduction measures. One of
such coal miners is IDX-listed PT Indo
Tambangraya Megah Tbk (ITMG), which
last year booked a net profit of US$63
million, albeit a 69 percent drop from $201
million in 2014.
ITMG continued to carry out cost
efficiency strategy throughout 2015
covering mining operation, supply chain
and logistics, and overhead cost reduction.
Lower fuel prices boded well for the
companys efforts to cut down mining
operation and logistic costs.
ITMG owns four coal concessions
in Kalimantan operated by subsidiaries
namely PT Indominco Mandiri, PT
Trubaindo Coal Mining, PT Bharinto
Ekatama, PT Kitadin, and PT Jorong
Barutama Greston. In 2015, the company
produced 28.5 million tons of coal.
For this year, the company sets lower
indicative production volume target of
26.9 million tons.
The operational conditions at the
various mine sites are reevaluated.
One of the results, ITMG reduced its
stripping ratio (SR) while continuing
to produce various coal types into an
optimum position, the company said
in a statement.
ITMG is expected to lower the average
SR in Indominco, which contributed 47
percent of the total output in 2015, this
year. Indominco produced 13.4 million
tons of coal last year and sets production

target at 16 million tons this year.
Trubaindo contributed the second
largest coal production for ITMG as
much as 26 percent, or 7.3 million tons.
Trubaindo sets lower production target of
6.2 million tons for this year.
The results of capital investment, at
US$24.8 million in 2015, among others
the completion of In-Pit Crushing and
Conveying (IPCC) system at Indominco,
creates immediate impacts on lowering
production cost, while expansion of
infrastructure at Trubaindo ensures
flexible coal delivery in any amounts that

customers demand.
In 2015, Indominco achieved 23
percent production cost reduction to $33
per ton due to the various cost reduction
programs including lowering stripping
ratio and cheaper fuel price. Indominco
also rationalized capital expenditure by 50
percent last year.
Trubaindo and Bharinto posted 27
percent and 34 percent production cost
reductions to $36 per ton and $32 per
ton, respectively. These production cost
reductions were contributed by lower SR
and cheaper fuel price. Trubaindo and

Bharinto also rationalized their capital
expenditure by 68 percent last year.
Lower fuel prices (triggered by oil
price drop) and productivity improvement
help reducing miners production costs
significantly. In addition, low sea freight
rates favor more distant coal supplies.
New markets
ITMG plans to export coal to
Bangladesh and Myanmar this year as
part of expansion of its coal markets
particularly in Asia as it sees economic
slowdown and demand uncertainty in
China and India.
India is currently the worlds largest
thermal coal importing country as China
is rapidly retreating from international
market. But the government of Indias
reform measures to improve Indias
domestic coal production scenario are
expected to slow coal import growth.
ITMG Marketing Director Jusnan
Ruslan said the company aims to capitalize
growing coal demand particularly in Asian
countries which are quite aggressive in
developing coal-fired power plants.
The company exports about 83
percent of its production, with the
remainder sold in the domestic market.
Its traditional export markets include
China, India and Japan, which account
for about 60 percent of export, while
other export markets include Thailand,
the Philippines, South Korea, Taiwan,
Italy, US, and Hong Kong.
Asian countries are our main targets.
Many of developing countries in Asia
utilize coal (for power plants), so it is quite
prospective, Jusnan said. Last year, coal
demand in China fell, but were optimistic
demand for Indotambangs coal remains
strong because we have good quality
coal, he added.
Jusnan said that demand for the
companys coal at home remains limited
Coal production
Production (Mt)
2015
2014
Difference
(%)
Contribution to 2014
Production (%)
13.4
15.0
(11%)
47%
7.3
7.2
1%
26%
- Tandung Mayang
2.5
1.8
39%
9%
- Embalut
1.2
1.3
(8%)
4%
PT Bharinto Ekatama
2.8
2.5
12%
9%
PT Jorong Barutama Greston
1.3
1.3
0%
5%
28.5
29.1
(2%)
Subsidiary
PT Indominco Mandiri
PT Trubaindo Coal Mining
PT Kitadin
Total
Coal sales breakdown by destination
Italy
0.8 Mt
China
4.4 Mt
India Thailand
5.4 Mt 2.7 Mt
1.5
Japan
5.1 Mt
Usa
0.5 Mt
Coal sales FY15

Malaysia
Italy USA Hong Kong
Taiwan
2%1%
3%
Korea
4%
19%
4%
8%
Philippines
10%
Thailand
HK Taiwan
0.3 Mt 1.1 Mt
Philippines
2.1 Mt
Malaysia
0.3 Mt
Others
0.5 Mt
Korea
1.2 Mt
100%
18%
Japan
13%
16%
Indonesia
Indonesia
3.7 Mt
India
China
Total Coal Sales FY15: 28.2 Mt
Coal sales contract and pricing status

Contract status
Contracted 66%
Price status
Uncontracted 34%
Fixed 43%
Target sales 2016: 28.5 Mt
due to its higher quality, thus domestic

sales is expected to account for about 13
percent of total sales this year.
Of the 28.5 million tons coal sales
volume target this year, about 66 percent
Indexed 11%
Unpriced 12%
Unsold 34%
has been contracted, and 34 percent has

yet to find buyers. Of the contracted
volume, the company has managed to
reach price agreement with buyers for 43
percent of the volume.
47
[ COMPANIES ]
Mercuria hurt by VAT

dispute in Indonesia
By Petromindo Team
not been able to get restitution for VAT

totaling US$31 million. We are not only
suffering loss because of coal prices, but
also by not receiving our VAT restitution,
he told petromindo.com in a recent
interview.
Mercuria, as one of the worlds top
five independent commodity trading
firms set up in 2004, acquired KEL
in 2010 at a time when coal price was
still hovering around $80 per ton. The
Geneva-based company immediately
ramped up production at KEL, jumping
to 3.5 million tons in the first year after
the acquisition from a previous annual
CA|Mudasir
he global coal market

downturn has badly hurt
many coal miners. But for
global commodity trading
company Mercuria Energy Group Ltd,
which owns South Kalimantan coal miner
PT Kalimantan Energi Lestari (KEL),
a value added tax (VAT) dispute with
the Indonesian tax office has caused
further financial distress, and hampering
the foreign giant from making new
investments in the country.
Geoffrey M. Kelly, Global Head
of Business Development and Assets
at Mercuria Energy, said that KEL has
Geoffrey M. Kelly
output of 250,000-300,000 tons from

2004-2009.
Over a period of time, Mercuria
turned KEL into one of the premium
coal companies in Indonesia with
a comprehensive end-to-end mining
operation from mine to vessel, and a
US$35 million processing facility that can
upgrade its coal quality from 4,400 kcal/
kg to 6,000 kcal/kg (GAR). KEL has also
received a number of environmental and
tax awards.
KEL holds the third generation coal
contract mining of work (CCoW) expiring
in 2031, which clearly says that VAT on
production inputs can be restituted. But
Kelly said that since 2010, the company
has not been able to get the VAT refund
as the tax office declines to acknowledge
coal as VATable. Under the previous local
owner, KEL had been able to get the VAT
restitution.
Executive Director of the Indonesia
Coal Mining Association (ICMA)
Supriatna Suhala said that other coal
miners holding the same third generation
CCoW have also suffered similar problem,
while others have been successful in
getting the VAT refund. He urged the
tax office to end such discrimination as it
would create investment uncertainty in the
coal mining sector, urging the Ministry
of Finance to issue a guideline for the tax
office to treat coal as VATable.
The tax office has argued that since the
issuance of Government Regulation No
144 in 2000, coal is no longer considered
as VATable, which means that the miners
cant get restitution for the input VAT.
CA|Khalsa
But Supriatna said that the third generation

CCoW, signed with the government between
1997 and 2000, adopts the lex specialis
principle, which means that the VAT restitution
is nailed down until the contract expires.
Former director general of taxation
Sigit P. Pramudito was about to issue
a directive late last year for tax offices
across the country to honor the third
generation CCoW specifically with
regards to treating coal as VATable, but
suddenly announced his resignation in
December reportedly because of failure in
meeting the excessive tax revenue target.
In December 2015, KEL suspended
production activity due to the combination
of coal price drop and the VAT dispute,
but it has recently resumed production to
avoid laying off workers and to honor export
commitments made with foreign buyers to
maintain its reputation. KEL is expected
to produce about 2.5 million tons of coal
this year, slightly less than 3.1 million tons
in 2015. The company, which operates a
6,200-hectare coal concession in Kotabaru
Regency with mineable reserves of about 40
million tons, exports its entire coal output.
We will continue to produce coal

for the rest of the year unless something
material happens in the market, meaning
that if the market (price) stays around
this level, we can take few dollars loss
and continue. But if the market (price)
drops another $5 or more, maybe we
will reconsider, Kelly said, adding that
the company is expected to suffer a loss
of up to $3 million this year from coal
production due to the price drop, and
another $6 million if it could not get the
VAT refund. So, we are going to lose
approximately $9 million to $10 million
by producing coal this year.
Kelly hopes the Indonesian
government to be able to immediately
resolve the VAT dispute (ongoing for
more than 5 years), allowing KEL to get
the VAT refund, so that Mercuria can
proceed with planned new investments
in Indonesia. We do not want special
treatment, but we want our (mining)
contract to be honored and treated like
other 3rd generation CCOW holders,
he said.
Kelly said that Mercuria, which
has revenue over $100 billion last year,

plans to spend up to $1 billion in new
investments in Indonesia including in
new coal asset, two gold projects, and
downstream LNG project. We have many
potential new projects, but at the moment,
we have got everything on hold due to the
VAT issue, he said.
But we are looking at this positively.
The VAT issue is an administration error,
not a political error,he ended.
Meanwhile, David Hamzah Damian,
Partner, Tax Compliance and Litigation
Services of Danny Darussalam Tax
Center, confirmed that there are different
interpretation of law and regulation
regarding VAT reimbursement dispute
for third generation CCoWs. There are
different law interpretations in the tax
court on the issue, he said.
David revealed that he has
represented six holders of third
generation CCoW. Some of them are
still undergoing proceedings in the tax
court, he said. David notes that the
dispute settlement in the tax court takes
long time, normally 12 months.
49
[ COMPANIES ]
PTBA gears up for

sustainable efficiency
By Tri Subhki Rakhmatullah | Photos: Khalsa
DX-listed coal mining company PT

Bukit Asam Tbk (PTBA) delivered
positive operational and financial
performances last year including a net
profit margin of 14.83 percent, the highest
in the industry, thanks to successful
efficiency initiatives. The company aims
to maintain the relatively healthy margins
amid the current weak price environment

through sustainable efficiency programs.
PTBA succeeded in reducing
production cost by 10 percent last year to
Rp 356,866 per ton from Rp 394,784 per
ton in the previous year. The company
plans to achieve the same level of cost
reduction rate this year among others by
optimizing the electrification of mining

operations and boosting the utilization
of its own mining contractor, PT Satria
Bahana Sarana (SBS), an indirect mining
service subsidiary company through PT
Bukit Multi Investama.
PTBA spent Rp2.4 trillion of project
investment at Tanjung Enim mine in
FY15(A) total cost breakdown
Mining service; 33%

Royalty, 8%
Train Transportation; 29%
Travelling, 1%
Depreciation, 2%
Environmental, 1%
Electricity use alone, 1%
Others, 3%
Salaries, 12%
Fuel, 1%
Material, 2%
Heavy Equipment Rent, 3%
Car & Rent, 1%
Third Party, 2%
Long term domestic commitment

Supporting National Energy Policy
Having A Total Long Term Coal Supply with:

National Power Company\PLN (2010 2030)
Indonesia Power (2013 2022)
Huadian Bukit Asam Power\Power Plant (25 Years)
Bukit Pembangkit Innovative\Power Plant (30 Years)
Indonesia Fertilizer (30 Years)
Cilacap Power Plant (4 Years)
Supporting Power Plants Projects Development for :
3x10 MW Power Plant, Muara Enim (In Operation)
2x8 MW Power Plant, Lampung (In Operation)
2x110 MW Banjarsari Power Plant (InOperation)
2x610 MW Banko Tengah Power Plant (In Progress)
800 1200 MW Peranap (In Process)
1800MW Sumsel 9-10 Power Plants (In Bidding Process)
South Sumatra to electrify supporting

infrastructure for mining operations among
others dump truck, shovel, crusher station
and overland conveyor system.
PTBA has been utilizing a captive
4x65 MW coal-fired power plant in
Tanjung Enim to supply power for mining
activities since 1987. It also uses 2x8
MW coal-fired power plant for logistic
activities at Tarahan Port, in Lampung.
These captive power plants slash costs as
own power supply is cheaper compared to
electricity from state-owned power utility
PT PLN.
In addition, SBS increased its
investment to as much as Rp962.2 billion
to purchase a number of 100-ton capacity
Committed Volume
:
262 Mt
:
52 Mt
:
150 Mt
:
36 Mt
:
69 Mt
:
5 Mt
Total :
574 Mt
Coal Consumption
:
0.15 Mtpa
:
0.10 Mtpa
:
1.40 Mtpa
:
5.40 Mtpa
:
8.40 Mtpa
:
8.10 Mtpa
trucks and other supporting heavy

equipment to meet 30 million bank cubic
meters (mbcm) of overburden removal
volume target this year. The SBSs
investment is expected to significantly
boost the volume of mining activities,
which indirectly support PTBAs
efficiency initiative, the company said in
a statement.
The aforementioned efficiency
initiatives lead not only to PTBAs
survival amid current weak coal prices
environment but also to its positive
operational and financial performances.
When the worlds coal price index was
down by 29 percent in 2015, PTBA was
able to control the average selling price
(ASP) at Rp718,992 per ton compared

with Rp723,635 per ton in 2014.
To boost the electrification program
and support more sustainable efficiency
initiatives, PTBA allocates Rp3.5 trillion
of capital expenditure in 2016. The
capital expenditure will mainly be spent
for the development of 2x620 MW Banko
Tengah coal-fired power plant (Sumsel
8), PTBAs Corporate Secretary and
newly-elected Director Joko Pramono said
recently.
Joko added that state-controlled PTBA
continues expansion to become not only
a mining but also energy company by
cooperating with other state-owned entities
in power plant development. PTBA
and state-owned aluminum producer
PT Inalum had signed an agreement to
develop a 2x350 MW coal-fired power
plant at Inalums smelter in Kuala
Tanjung, North Sumatra. PTBA also had
signed an agreement to develop a 2x40
MW coal-fired power plant at IDX-listed
mining firm PT Antam Tbks smelter in
East Halmahera, North Maluku. PTBA,
PLN and Malaysias TNB will develop
800-1,200 MW Peranap coal-fired power
plant in Riau.
Optimism in 2016
For 2016, PTBA plans to boost coal
sales volume by 51 percent to 29.17 million
tons from 19.10 million tons last year. The
company has also set coal production and
purchase from third parties at 28.32 million
tons this year, or 37 percent higher than
20.74 million tons in 2015.
PTBA voices its optimism in fulfilling
the indicative operational targets as
supported by integrated mine-to-port
infrastructure system. State-owned
railway operator PT Kereta Api Indonesia
(KAI) has completed the double-track
railway from Tanjung Enim mine site
to Prabumulih, which may significantly
increase the coal transport volume of
51
[ COMPANIES ]
2015 sales breakdown by country
Japan, 9%
Malaysia, 7%
Taiwan, 22%
Philippines, 0,7%
Vietnam, 1%
Srilanka, 0,9%
Madagascar, 0,5%
India, 4%
Cambodia, 3%
Pakistan, 1%
Domestic, 53%
PTBA to 23.7 million tons this year from

15.79 million tons in 2014.
The company has increased the
coal transport capacity by operating the
fourth train loader at Tanjung Enim mine
since April 2016. KAI also adds more
locomotive and coal wagons to transport

PTBAs coal, which eventually supports
the Tarahan Ports 25 million tons per
annum of full-capacity operation in
Lampung. Tarahan Port is the largest
coal terminal in Sumatra since it can
accommodate Capsize bulk carrier vessels

with capacity of up to 210,000 DWT.
By the first quarter of 2016, the total
coal transport volume from Tanjung
Enim to Tarahan Port in Lampung and
Kertapati Port in Palembang reached 4.28
million tons, or an increase of 19 percent
compared with 3.59 million tons in the
same period of 2015.
PTBA, which owns 3.33 billion tons
mineable reserves, sold most of its coal or
53 percent to domestic market, particularly
PT PLN, in 2015. For 2016, the company,
according to Joko, will penetrate to new
export markets such as Bangladesh,
Pakistan and Myanmar. Currently, these
markets are still small, but they will keep
growing, he said. It also prioritizes high
quality coal through market branding for
export market.
Court rules heavy equipment not

categorized as motor vehicle
CA|Mudasir
he Constitutional Court (MK)

late in March granted a judicial
review of Law No 22/2009
on Road Transportation and
Traffic filed by some members of the
Indonesian Mining Services Association
(Aspindo) late in 2014, specifically on an
article that categorizes heavy equipment as
motor vehicle.
The MK ruled that heavy equipment is
not categorized as motor vehicle. Aspindo
Chairman Tjahjono Imawan welcomes the
ruling, saying that heavy equipment should
not be considered as motor vehicle for
transportation, but production equipment.
He said that by not categorizing heavy
equipment as motor vehicle, there is no
need for heavy equipment owners to pay
the so-called automotive tax to regional
administrations. Dont be afraid to reject
(the automotive tax) if they (the local

administrations) want to collect it, he said
on April 4.
Among of Aspindo members who filed
the judicial review included PT Tunas Jaya
Pratama, PT Multi Prima Universal, and
PT Marga Maju Mapan.
Tjahjono said that the MK ruling
would help ease the financial burden of
mining services companies particularly
the smaller ones amid the current mining
industry slowdown. He, however, stressed
that the main intention to file for the
judicial review is to ensure fairness by not
categorizing heavy equipment as motor
vehicle for transportation.
While did not disclosing the amount
of autmotive tax paid by heavy equipment
owners to local administrations annually,
heavy equipment operating in Kalimantan
alone paid about Rp 100 billion per year

in automotive tax to the local regency/
mayoralty administrations.
The struggle of Aspindos members
started in 2002 particularly in Kalimantan
when the local administrations issued
a policy categorizing heavy equipment
as motor vehicle in a bid to collect
automotive tax to support local
administration budget. The Aspindo
members went to the Supreme Court
and won the case against the local
administrations.
But their troubles continued as
Law No 28/2009 on Regional Tax and
Retribution (locally known as PDRD law)
categorizes heavy equipment as motor
vehicle in line with the definition set in
the road transportation and traffic law.
Attempt to file a judicial review of the
PDRD law with the MK failed in 2012.
And finally, in December 2014, some
members of Aspindo filed the successful
judicial review of the road transportation
and traffic law with the MK.
Tjahjono said that following the MK
ruling, the association will take further
legal action particularly as the PDRD law
still considers heavy equipment as motor
vehicle.
Laica Marzuki, former MK justice,
said that the MK ruling is final and
binding. While MK has ruled that heavy
equipment is not categorized as motor
vehicle, there is possibility by certain
parties including the local administrations
to issue new bylaws to collect retribution
or other form of taxes from the heavy
equipment, he warned.
53
[ FOCUS ]
Pandu P Sjahrir
ICMA pushes investment

for energy security
By Thomas Sembiring, Tri Subhki R
ndonesian Coal Mining Association

(ICMA) currently focuses
on promoting investment for
domestic energy security. Pandu
P Sjahrir, Chairman of ICMA, said
that the association fully supports the
governments program to develop a
combined 35,000 MW power plants, of
which 20,000 MW will be fueled by coal.
Our vision and mission for this
year is boosting the investment and
supporting the 35,000 MW power
project. We maintain communication
with the government discussing on how
to improve investment in the industry,
Pandu said to CoalAsia recently.
ICMA has 168 active members that
constitute almost 90 percent of coal
mining players in Indonesia, including
coal producers, traders and supporting
companies. ICMA members contribute up
to 80 percent of the countrys total coal
production.
The coal supply is very crucial where
20,000 MW out of 35,000 MW will be
generated from coal-fired power plants,
he said. ICMA recently conducted a joint
study with PricewaterhouseCoopers that
underlines insecure coal reserves at home
for sustainability of the megaproject due
to the current low coal prices.
The survey estimated that mineable
coal reserves were only 7.3 billion to 8.3
billion tons in 2015, extremely lower than
the 32.3 billion tons of proven reserves
per 2014 estimated by the Geology Office
at the Ministry of Energy and Mineral
Resources.
It also shows preliminary projection

that indicates the coal reserves will
deplete by 2033 to 2036, or sooner than
the 25-30 years lifetime of the 35,000
MW power plants, which will last until
2049 if theyre completed in 2019 as
planned. The conclusion is based on
declining capital expenditure of coal
mining companies by as much as 79
percent from US$1.9 billion in 2012 to
$0.4 billion in 2015.
The ICMA-PwC survey also
indicates a further decline in the capital
expenditure by 10 percent to 20 percent
in 2016. Thus, exploration activity
to find new coal reserves is relatively
halted, ICMA said in a statement.
Pandu mentioned that the situation
may reduce state revenue from the mining
sector and if the condition really occurs,
he warns Indonesia will inevitably have
to import coal to fuel its coal-fired power
plants in the future. That is why we offer
solutions for the government. We already
submit our findings to related ministries,
he said.
The solutions, according to Pandu,
include applying the coal pricing
formula of production cost plus margin
for all coal-fired power plants, not
only mine mouth power plants to help
make investment in coal mining more
attractive. It will increase the mineable
coal reserves, improve domestic energy
security as we do not have to import
coal, and in terms of cost, secure the
coal supply for the next 35 years,
he said.
The ICMA-PwC survey states that a

consequence of the cost-based pricing
system is that the government should pay
cost of insurance for about 1 percent of
the Rp1,400/kWh power tariff for new
coal-fired power plants, or 3 percent for
all coal-fired power plants.
The survey suggests the cost-based
pricing system is a better option rather
than the government doing nothing
which would put at risk the coal supply
sustainability at least until 2036. Costbased pricing system, the survey said,
would stimulate investment, incentivize
exploration and secure coal reserves for
power generation projects.
Margin formula
Pandu also commented on the newly
implemented Minister of Energy and
Mineral Resources Regulation No
9/2016, which sets the price margin of
coal dedicated for mine mouth power
plants at a range of 15-25 percent,
compared to a fix rate of 25 percent
under the previous regulation. He does
not voice any objection to the new profit
margin range.
Coal price dedicated for mine
mouth power plants is determined
based on production costs plus margin
formula. The new regulation stipulates
that the total production costs will be
decided by the Directorate General of
Mineral and Coal. The new margin
range provides room for power plant
developers to negotiate the margin with
coal miners.
55
[ FOCUS ]
The issue is about cost baseline. If

we can set reasonable costs for mining
industry, I believe there will be many
players who want to develop power
plants, he said. Pandu emphasizes that
the cost plus margin formula has to
applied to all coal-fired power plants not

only mine mouth power plants.
Pandu suggests that mining industry
has to agree on the cost structure.
Cost, he said, depends on coal quality,
stripping ratio and distance. We want a
level playing field and avoid miners to

focus more on lower stripping ratio. We
want players compete in efficiency,
he said.
When reasonable costs and margin
rate for miners have already been
set, Pandu wants all of the countrys

coal production to be dedicated for
domestic use. I have a goal that all coal
production in Indonesia to be allocated
for domestic market, he said, adding that
this is a long term vision that has to be

started with the appropriate policy.
For a long term vision, Pandu
commented that Indonesia should give
more focus on increasing domestic coal
demand. Coal export isw acceptable

for the short term, but for how long we
can export coal? PwC estimates that our
coal will deplete in the next 15 years,
he said.
Coal requirement post-realization of 35,000 MW

Coal Requirement Next 5 years
Capacity
Coal Cons p.a
Existing Coal Fired PP (30 Sept 2014)
22 MW
76 mln
Estimated Under 35 GW
20 MW
~75 mln
Total
42 MW
~150 mln
Domestic
Export
300 350 mln ton
Total
456 506 mln ton
Source: ICMA
Forecast Indonesia coal production

500
474
450
458
412
400
ICMAs Forecasts
382
353
349
350
300
332
332
248
214
199
101
118
133
2016E
2017E
2018E
280
254
402
250
382
345
295
287
200
198
150
50
56
65
66
67
72
2009
2010
2011
2012
2013
Source: ICMA
154
215
100
332
Export (MT)
76
87
2014
2015
Domestic (MT)
178
2019E
Production (MT)
57
[ COVERSTORY ]
A compromised deal
CA|Boim
By CoalAsia Team
fter months of debate, the

government has finally revised a
policy on coal price dedicated for
mine mouth power plants as part
of efforts to speed up the development of planned
35 GW power plants, giving greater rooms for
the state-owned electricity company PT PLN
and other mine mouth power plant developers to
negotiate coal price produced by miners.
Under the new Ministerial Regulation
No 9/2016, the price of coal for mine
mouth power plant is calculated based on

a formula of production cost plus margin
of 15-25 percent. Previously, the margin
rate regulated under the 2014 Directorate
General of Mineral and Coal Decree was
set at fix rate of 25 percent.
Article 10 of the new ministerial
regulation states the margin is determined
based on agreement between the coal
mining company and the developer of
mine mouth power plant.
According to the regulation, if a

mining company and developer of the
mine mouth power plant fail to agree
on the coal price within 60 days of
negotiation, the director general (of
mineral and coal) will determine the
margin by considering the principles
of expediency, openness, fairness, and
national/regional interests.
No further explanation about the
article was provided.
If coal producers and the two groups

of buyers (PLN and independent power
producers) fail to reach agreement, the
directorate holds the authority to intervene
and set the final margin, Director General
of Mineral and Coal, Bambang Gatot
Ariyono told reporters recently.
As of March 2016, PLN has received
50 proposals from companies interested
in building mine mouth power plants,
of which 30 proposed projects would be
located in Sumatra Province, home to the

countrys biggest low to medium rank coal
reserSumatra Island has also long been
suffering from lack of electricity supply.
Head of PLNs Coal Division, Harlen
said that the company would follow the
new regulation, although the company
initially expected the margin to be set at
maximum 10 percent in a bid to reduce
electricity tariff and in light of the current
drop in coal price.
He added that the company would

review the economic feasibility of the
various mine mouth plant projects.
PLN previously criticized the
high price margin of coal for minemouth power plants considering the
dwindling trend in coal price, fearing
that electricity price from the minemouth power plants could no longer be
competitive compared to other energy
sources.
59
Bambang Gatot Ariyono
Determining price of coal for minemouth power plant is an important issue

for both mining firms and power plant
developers to ensure the sustainable supply
of coal from miners amid fears that miners
could turn to the export market once
international price exceeds domestic price.
Mine mouth power plant is designed
to support more sustainable power supply
to meet the expected increase in demand
of electricity for national economic
development under the governments plan
to build 35 GW electricity generation
projects until 2019, of which 20 GW
would be generated by coal, including
mine-mouth power plants.
The government aims to increase
the countrys electrification ratio to 97.4
percent by the end of 2019 from the
current 84 percent. Indonesias existing
electricity capacity is 50.7 GW.
Indonesian Coal Mining Association
(ICMA) has released a joint survey
with PricewaterhouseCoopers (PwC)
that suggested coal miners should be
provided with incentives to supply the
fuel for power plants, otherwise they
would be discouraged from carrying out
exploration activities to find new reserves
amid the current drop in the price of the

commodity. This would in turn undermine
the countrys coal reserves and future
supply of the fuel for the 20,000 MW coalfired power plants now being developed or
under planning stage.
According to the study, theres
indication that the countrys coal reserves
have been declining at an annual rate of 2940 percent, which means that the reserves
will be depleted in 2033-2036. Meanwhile,
if the new power plants can be completed
by 2019, they would be in operation until
2049 as they have a lifetime of 25-30 years.
President Joko Widodo has asked
the related ministries to speed up the
realization of the 35 GW projects,
including through deregulation efforts to
attract investors.
To help realize the target, the
government has issued policies to
encourage investors to develop the power
plant projects..
The government has issued two
regulations, which are Ministry of Energy
and Mineral Resources Decree No.74/2015
on the endorsement of the electrical power
provision plan of PLN for year 2015-2024
and MEMR Regulation No. 3/2015 on
Procedures for the Purchasing by PLN of
electricity from mine mouth power plant,
PLTU (coal-fired), PLTG/PLTMG (gas
turbine power plant/gas engine power
plant), PLTA (hydropower plant) through
Direct Appointment.
The two regulations will make it easier
for PLN in making procurement and gives
it flexibility in setting its purchasing price
for power produced by independent power
producers (IPPs) without prior consent
from the Minister of Energy and Mineral
Resources.
President Joko Widodo on January 8,
2016 also signed Presidential Regulation No.
4/2016, which stipulates that PLN and IPPs
will get support in the forms of guarantee,
speedy licensing and non-licensing process,
primary energy provision, spatial affairs, and

land acquisition.
Cost of production
Director General of Mineral and Coal,
Bambang Gatot Ariyono acknowledged
that his office has discussed the new coal
price formula for the mine mouth power
plant with stakeholders, including mining
companies.
Bambang claims that the margin rate
of 15 percent to 25 percent is accepted by
the coal mining companies.
Now, the (fix) 25 percent margin
rate is not included (in the Decree of
Directorate General of Mineral and Coal),
so they (mining companies and developers
of mine mouth power plants) can negotiate
the profit margin ranging from 15 percent
to 25 percent, he said.
Bambangs office is responsible in
determining the cost of production of a
ton of coal to determine basic price of
the fuel for mine mouth power plants.
The cost of production is calculated
based on parameters of direct production
cost, indirect production and general and
administration expenses.
The direct production cost covers
CA|Boim
CA|Lucky Ebenhaezer
[ COVERSTORY ]
Singgih Widagdo
List of mine mouth power plant proposals

1
2
9
19
29
43
CENTRAL KALIMANTAN (6)

PT. KATINGAN RIA (PLTU MT)
PT. KORINDO (PLTU MT 2X50 MW)
PT. METRO ENERGY (PLTU MT 2X100 MW)
PT PJB DAN PT PRIMA MULTI ARTHA (PLTU MT 2X100 MW)
PT PANDU ADIDAYA (PLTU MT 1X300 MW)
PT UNGGUL PARAMITRA TEKNOLOGI (PLTU MT 2X135 MW)
ACEH (2)
23 PT. ABM INVESTAMA TBK (PLTU MT)
34 AGRABUDI JASA BERSAMA-SATRIA MANGGALA-SHANGHAI
PPE-SKODA ENERGO-VITKOVICE (PLTU MT 2X100 MW)
6
10
16
17
18
20
25
28
40
41
44
45
EAST KALIMANTAN (12)

PT RESOURCE ALAM INDONESIA (PLTU 2X100 MW)
ESSAR GROUP (PLTU MT 2X50 MW)
PT KIDECO JAYA AGUNG
PT ADIMITRA BARATAMA NUSANTARA (PLTU MT 2X100 MW)
PT MUARA WAHAU ENERGY (PLTU MT 100 MW, 200 MW, 300 MW)
PT POWER ALAM LESTARI (PLTU 2X100 MW)
PT MEC (PLTU 300 MW)
PT NATRUSTPARADIGMA LISTRIK MANDIRI (PLTU MT 2X100 MW)
PT ADARO (PLTU MT 2X100)
PT BUMI RESOURCES TBK (PLTU MT 2X200)
PT. TEKNOLOGI PERMATA INDONESIA (PLTU MT 2X150 MW)
KUTAI BARAT ENERGI (PLTU MT 2X100 MW)
SOUTH KALIMANTAN (4)
3
15
22
50
4
13
24
27
RIAU (4)
PT PERMATA ARUN ENERGI (PLTU MT)
PT. SAMANTAKA BATUBARA (PLTU MT 2X300 MW)
PT BUKIT ASAM (TBK) (PLTU MT)
PT TRIKA HUADIAN (PLTU MT 2X600)
LOCATION
cost of overburden removal, over burden

transport, coal digging, coal transport
from mine to processing facility and
coal transport from processing facility to
stockpile of power plant.
It is not clear yet on whether the
Directorate General of Mineral and
Coal would still use its 2015 Decree on
production cost benchmark to determine
the base price of coal for mine mouth
power plants and non-mine mouth power
3
7
31
32
33
36
37
42
JAMBI (8)
PT. GOLDEN ENERGY MINES (PLTU MT 2X600 MW, 2X100 MW)
MNC ENERGY AND NATURAL RESOURCES
PT BBM MEGA ENERGI (PLTU MT 2X600 MW)
PT. JAMBI LESTARI POWER (PLTU MT 2X600 MW)
PT PEMBANGKITAN PETRA DAYA (PLTU MT 2X600 MW)
PT TITAN MULTI POWER (PLTU MT 2X150 MW)
PT ENERGI INDONESIA BERSAMA (PLTU MT 2X600 MW)
PT INTITIRTA PRIMA SAKTI (PLTU MT 2X600 MW)
PT. GOLDEN ENERGY MINES (PLTU MT 2X100MW)

PT MOFATAMA (PLTU 2X100 MW)
JHONLIN ENERGI KALIMANTAN (PLTU 2X100 MW)
PT MITRA DAYATAMA PRIMA (PLTU 2X25 MW)
SOUTH SUMATRA (16)

PT BARA MITRA PERKASA (PLTU MT 4X150 / 2X300 MW)
PT. BHINAMITRA USAHAPERSADA (PLTU MT 2X300 MW)
PT ADHI KARYA (PERSERO) TBK. (PLTU 2 X 150 MW)
KONSORSIUM UCOAL-CHEC (PLTU MT 3600 MW)
PT GUMAY NIAGA ENERGI (PLTU MT 25 MW)
PT TEMPIRAI INTI ENERGI (PLTU 2X 200 MW)
PT BUKIT ASAM (TBK)
PT DSSP (PLTU MT 1X300 MW)
PT ENERGI MUSI MAKMUR (PLTU MT 2X300 MW)
PD PERTAMBANGAN DAN ENERGI SUMSEL (PLTU MT 2X115 MW)
SHENHUA PT GH EMM INDONESIA (PLTU MT 2X350 MW)
BARAMULTI SUGIH &TUAS POWER ENGINERING (PLTU MT 2X300 MW)
ENERGI ALAM RAYA, POWER CHINA SHANGHAI ELECTRIC POWER
(PLTU MT 2X300 MW)
47 MNC DAYA (PLTU MT 2X300 MW)
48 PT. INTIPUTERA KANAAN (PLTU MT 2X150 MW)
49 PT GUMAY PRIMA ENERGI (PLTU MT 2X200 MW)
5
8
11
12
14
21
24
26
30
35
38
39
46
plants within one island, or to revise it.

Indonesian coal industry observer,
Singgih Widagdo said that the government
should optimally promote the utilization
of coal for energy source, instead as
commodity, by among others increasing
domestic coal demand through mine
mouth power plant development.
Based on our coal geological
distribution, mine mouth power plant is the
best option. Hence, promoting coal export
is not wise in the wake of increasing

domestic electricity demand, Singgih told
CoalAsia.
Singgih noted that the new regulation
is still better than the previous one
regarding coal quality. The new regulation
states the coal for mine mouth power
plant is not limited to only low rank coal,
but any coal quality that is economically
feasible for mine mouth power plant
development.
61
However, the regulation is

overregulated with regards to the
maximum distance of 20 kilometers from
mine (area) to the mine mouth power plant
and the profit margin rate, which is no
less than 15 percent and no more than 25
percent of total production cost, he said.
The regulation says mine mouth
power plant should be built within the
maximum distance of 20 kilometer from
coal mine site in order to save cost of coal
transportation.
The government should not overregulate matters by allowing a maximum
distance of 20 kilometers between location
of power plant and the coal mine as a
location of power plant is determined
based on various technical aspects.
According to Singgih, the margin
restriction of between 15 percent and 25
percent should not be implemented to all
levels of capacity of mine mouth power
plants.
It would be adequate for minemouth power plants with the capacity
below 300 MW to have a margin
restriction, which would be applied to
the respective mine owners. For the
power plants with capacity above 300
MW, the government should hand over
the decision on the amount of margin to
the relevant parties, he said.
Singgih also added that geological
science should become the first
consideration.
Without the basis of geological
knowledge, the decision on the rate of
margin, with concerns only on the mine,
would not be enough to optimize the coal
resource, he said.
Competitiveness rules
Corporate Secretary of IDX-listed coal
mining firm PT Bukit Asam Tbk (PTBA)
Joko Pramono said that the issue on mine
mouth power plant actually is not about
the margin rate.
But it is more about how we

utilize uneconomical coal to (become)
economical coal and at the same time
provide investment return, he told
CoalAsia recently.
Joko, who has been recently elected
as a new director at PTBA, said that
the important thing is synergy between
coal mining company and the power
plant company, which determines the
competitiveness of production costs.
The synergy can reduce risks that
lead to cheaper mining costs, he said.
PTBA claims that the company is
more competitive than competitors due
to the lower production costs contributed
by the synergy between the coal mining
companies and power plant entity.
The synergy ensures the sustainability
of both investments in coal mining and
power plant, he said.
PTBA, the largest coal producer in
Sumatra, is transforming from a mining
company into an energy company,
operating captive coal-fired power
plants for internal use and mine mouth
power plant (2x110 MW Banjarsari).
PTBA recently has also conducted
groundbreaking of a 2x620 MW Banko
Tengah (also called Sumsel-8) coal-fired
power plant, which is expected to begin
commercial operation in 2019.
Meanwhile. Garibaldi Thohir,
President Director of IDX-listed coal
mining firm PT Adaro Energy Tbk,
acknowledged that determining the range
of margin rate could become part of a
win-win solution for stakeholders related
to the mine mouth power plant project as
it would allow PLN to pursue business to
business negotiation.
At the end of the day, mining companies
with more efficient production cost can
provide the best deal to PLN, he said.
Adaro, the countrys second largest
coal producer with 53 million tons output
last year, is embarking on agressive
CoalAsia doc.
[ COVERSTORY ]
Garibaldi Thohir
expansion of its power business as it has

already operated a 2x30 MW mine mouth
power plant in South Kalimantan.
Senior official at the South Sumatra
provincial administration, Ruslan Bahri
previously said that there are at least eight
mine-mouth plants to be developed in the
province until 2019.
He said that the provinces huge coal
reserves at around 9.5 billion tons have
lured investors to develop mine mouth
power plants.
This year alone, there are two
projects, namely the Banjarasi coalfired power plant in Lahat Regency, and
South Sumatra-5 coal-fired plant in Musi
Banyuasin Regency, Ruslan said.
Director of Centre for Indonesian
Resources Strategic Studies (CIRRUS)
Budi Santoso pointed out that the
new regulation would benefit mining
companies having production cost lower
than the governments benchmark.
For PLN side, the pass-through of
coal price could make the production cost
of electricity become more expensive.
Thus, the consumers could pay higher
price of electricity or certain areas can not
be electrified, he told CoalAsia.
List of mine mouth power plant proposals as of March 2016

NO
COMPANY
location
power plant CAPACITY
adjacent RUPTL
FS/PRe FS
PT. KATINGAN RIA
KATINGAN ReGeNCy, CeNTRAl KAlIMANTAN
MINe MouTh PoweR PlANT
CFPP KAlSelTeNG 3 (2X100 Mw)
N/A
PT. KoRINDo
KoTAwARINGIN BARAT, CeNTRAl KAlIMANTAN
2X50 Mw
CFPP KAlSelTeNG 3 2X100 Mw
N/A
PT. GolDeN eNeRGy MINeS
JuJuhAN MuARA BuNGo JAMBI, KAlSelTeNG, TANAh

BuMBu GI SATuI SouTh KAlIMANTAN
2X100 Mw PlTu MT KAlSelTeNG 2

(2X100Mw), 2X600 Mw
CFPP JAMBI (2X600 Mw)

CFPP KAlSelTeNG 3 2X100 Mw
N/A
PT PeRMATA ARuN eNeRGI
PRANAP RIAu
N/A
CFPP RIAu KeMITRAAN (2X600 Mw)
PT BARA MITRA PeRKASA
BANyuASIN
4X150/2X300 Mw
CFPP SuMSel 6
PT ReSouRCe AlAM INDoNeSIA
KuTAI KARTANeGARA eAST KAlIMANTAN
2X100 Mw
CFPP KAlTIM 4 (2X100 Mw),

KAlTIM 3 (2X200 Mw)
N/A
MNC eNeRGy AND NATuRAl ReSouRCeS
eAST KAlIMANTAN, SouTh SuMATRA, JAMBI
N/A
N/A
PT. BhINAMITRA uSAhAPeRSADA
BANyuASIN ReGeNCy
2X300 Mw
CFPP SuMSel 6
N/A
PT. MeTRo eNeRGy
KuAlAKuRuN, GuNuNG MAS, CeNTRAl KAlIMANTAN
KAlSelTeNG-1 MT 2X100 Mw
N/A
10
eSSAR GRouP
KuTAI BARAT
2X50 Mw
CFPP KAlTIM 3 (2X200 Mw)
N/A
11
PT ADhI KARyA (PeRSeRo) TBK.
MuARA eNIM SouTh SuMATRA
2X150 Mw
CFPP SuMSel 6
N/A
12
KoNSoRSIuM uCoAl-CheC
BABAToMAN, MuSIBANyuASIN
3600 Mw
CFPP SuMSel 6
N/A
13
PT. SAMANTAKA BATuBARA
PeRANAP, INDRAGIRI hulu ReGeNCy RIAu
2X300 Mw
N/A
14
PT GuMAy NIAGA eNeRGI
PRABuMulIh SouTh SuMATRA
25 Mw
CFPP SuMSel 6
15
PT MoFATAMA
TAMIANG lAyANG, BARITo TIMuR
2X100 Mw
CFPP KAlSelTeNG3
16
PT KIDeCo JAyA AGuNG
PASeR ReGeNCy, eAST KAlIMANTAN
N/A
N/A
17
PT ADIMITRA BARATAMA NuSANTARA
MuARA TAwAR, KuTAI KeRTANeGARA ReGeNCy, eAST

KAlIMANTAN
2X100 Mw
N/A
18
PT MuARA wAhAu eNeRGy
MuARAwAhAu, KuTAITIMuR ReGeNCy, eAST KAlIMANTAN
100 Mw, 200 Mw, 300 Mw
19
PT PJB DAN PT PRIMA MulTI ARThA
KATINGAN ReGeNCy, CeNTRAl KAlIMANTAN
2X100 Mw
20
PT PoweR AlAM leSTARI
loA JANAN, KuTAI KeRTANeGARA ReGeNCy, eAST KAlIMANTAN
2X100 Mw
21
PT TeMPIRAI INTI eNeRGI
MuSI ReGeNCy, BANyu ASIN
2X 200 Mw
CFPP SuMSel 6
PRe FS
22
JhoNlIN eNeRGI KAlIMANTAN
BATu lICIN, SouTh KAlIMANTAN
2X100 Mw
KAlSelTeNG 3
PRe FS
23
PT. ABM INveSTAMA TBK
weST ACeh
N/A
CFPP NAGAN RAyA 2X200
N/A
24
PT BuKIT ASAM (TBK)
PeRANAP RIAu, BANJAR SARI eXPANSIoN,

BANGKo TeNGAh/M.eNIM
N/A

CFPP SuMSel-6 (2X300)
N/A
25
PT MeC
MuARA wAhAu, KuTAI TIMuR ReGeNCy, eAST KAlIMANTAN
300 Mw
N/A
26
PT DSSP
BAyuNG lINCIR
1X300 Mw
SouTh SuMATRA 7
FS
27
PT TRIKA huADIAN
PRANAP RIAu
2X600
CFPP RIAu PRANAP
N/A
28
PT NATRuSTPARADIGMA lISTRIK MANDIRI
SANGGATA, KuTAI TIMuR
2X100 Mw
KAlTIM 3
N/A
29
PT PANDu ADIDAyA
BARITo TIMuR, CeNTRAl KAlIMANTAN
1X300 Mw
KAlSelTeNG 3
N/A
30
PT eNeRGI MuSI MAKMuR
MuARA eNIM, SouTh SuMATRA
2X300 Mw
SouTh SuMATRA 6
N/A
31
PT BBM MeGA eNeRGI
SoRolANGuN, JAMBI
2X600
JAMBI
N/A
32
PT. JAMBI leSTARI PoweR
JAMBI
2X600
JAMBI
N/A
33
PT PeMBANGKITAN PeTRA DAyA
SARolANGuN, JAMBI
2X600 Mw
JAMBI
PRe FS
34
KoNS: AGRABuDI JASA BeRSAMA-SATRIA

MANGGAlA-ShANGhAI PoweR PlANT
eleCTRIC-SKoDA eNeRGo-vITKovICe
MeulABoh ACeh
2X200 Mw
MeulABoh ACeh
PRe FS
35
PD PeRTAMBANGAN DAN eNeRGI SuMSel
MuSI BANyu ASIN
2X115 Mw
CFPP SuMSel 6
N/A
36
PT TITAN MulTI PoweR
MuARA KIlIS
2X150 Mw
N/A
37
PT eNeRGI INDoNeSIA BeRSAMA
BATANGhARI, JAMBI
2X600 Mw
N/A
38
SheNhuA PT Gh eMM INDoNeSIA
MeSuJI, lAMPuNG
2X350 Mw
CFPP MT SuMBAGSel 1
N/A
39
BARAMulTI SuGIh &TuAS PoweR eNGINeRING
PAlI ReGeNCy, SouTh SuMATRA
2X300 Mw
CFPP SuMSel 6
N/A
40
PT ADARo
wAhAu, eAST KAlIMANTAN
2X100 Mw
CFPP MT KAlTIM 2X200
N/A
41
PT BuMI ReSouRCeS TBK
eAST KAlIMANTAN
2X200 Mw
N/A
42
PT INTITIRTA PRIMA SAKTI
JAMBI
2X600 Mw
N/A
43
PT uNGGul PARAMITRA TeKNoloGI
TAMIyANG lAyANG ReGeNCy, eAST BARITo
2X135 Mw
CFPP KAlSelTeNG 3
N/A
44
PT. TeKNoloGI PeRMATA INDoNeSIA
PeNAJAM, eAST KAlIMANTAN
2X135 Mw
KAlTIM 3
N/A
45
KuTAI BARAT eNeRGI
MelAK, KuTAI BARAT, eAST KAlIMANTAN
2X100 Mw
KAlTIM
PRe FS
46
eNeRGI AlAM RAyA, PoweR ChINA

ShANGhAI eleCTRIC PoweR
MuARA eNIM, SouTh SuMATRA
2X300 Mw
SouTh SuMATRA
PRe FS
47
MNC DAyA
MuSI BANyu ASIN
2X300 Mw
SouTh SuMATRA
PRe FS
48
PT. INTIPuTeRA KANAAN
SouTh SuMATRA
2X150 Mw
SouTh SuMATRA
N/A
49
PT GuMAy PRIMA eNeRGI
RAMBANG KAPAK TeNGAh PRABuMulIh SelATAN
2X200 Mw
SouTh SuMATRA
PRe FS
50
PT MITRA DAyATAMA PRIMA
KINTAP TANAh lAuT ReGeNCy SouTh KAlIMANTAN
2X25 Mw
SouTh KAlIMANTAN
N/A
PRe FS
N/A
AvAIlABle
N/A
PRe FS
N/A
N/A
63
[ COVERSTORY ]
Regulation changes in the last two years

The Director General of Mineral and Coal Decree No
953.K/32/DJB/2015 on production cost benchmark to determine
base price of coal for mine mouth power plants and non-mine
mouth power plants within one island. (Issued on October 2015)
No
Cost Type
Direct production cost
1 overburden removal
2 overburden transport
3 Coal digging
4 Coal transport from mine to processing facility
5
Coal transport from processing facility to stockpile of

power plant
Indirect production cost

6 Coal processing
7 Amortization and depreciation
General cost and administration
- Supervision and management of environment,
reclamation and post mining
8 - work health and safety
- empowerment and community development
9 overhead
10 Regular fee
11 Production fee/royalty assumption
12 Margin
Unit
Cost
uSD/bcm
uSD/ton/km
uSD/ton
uSD/ton/km
2.17 - 2.41
0.87 - 1.74
1.55 - 1.70
0.20 - 0.28
Agreement
between miner
and IuPTl
permit holder
uSD/ton
uSD/ton
uSD/ton
1.19 - 1.98
5.50 - 6.88
uSD/ton
0.50 - 0.55
uSD/ton
uSD/ton
uSD/ton
uSD/ton
1.66 - 2.07
0.10 - 0.11
20.3%
25%

579.K/32/DJB/2015 on production cost benchmark to determine
base price of coal for mine mouth power plants or other uses.
(issued on April 2015)
No
Cost Type
1 overburden removal
2 overburden transport
3 Coal digging
4 Coal transport from mine to processing facility
5
Coal transport from processing facility to stockpile of

power plant

6 Coal processing
7 Amortization and depreciation
General cost and administration
- Supervision and management of environment,
reclamation and post mining
8 - work health and safety
- empowerment and community development
9 overhead
10 Regular fee
11 Production fee/royalty assumption
12 Margin
Unit
Cost
uSD/bcm
uSD/ton/km
uSD/ton
uSD/ton/km
2.41
1.74
1.70
0.28
Agreement
between miner
and IuPTl
permit holder
uSD/ton
uSD/ton
uSD/ton
1.98
6.88
uSD/ton
0.55
uSD/ton
uSD/ton
uSD/ton
uSD/ton
2.07
0.11
20.3%
25%
The Director General of Coal and Mineral Decree No

466.K/32/DJB/2015 on the formula to determine coal price for
mine-mouth power plant projects and domestic other purposes.
(Issued on February 2015).
No.
Type of cost
1. overburden removal
2. overburden transport
3. Coal digging
4. Coal transport from mine to processing location
5.
Coal transport from processing to location of

mine-mouth power plant

6. Coal processing
7. Amortization and depreciation
General and administration cost
8. Monitoring, environmental, reclamation, and post mining
9. work safety and health
10. Community development and empowerment
11. land acquisition/compensation
12. overhead
13. Fixed fee
14. Royalty/production fee assumption
15. Margin
Unit
uS$/bcm
uS$/bcm/km
uS$/ton
uS$/ton/km
uS$/ton
Cost
2.41
1.74
1.70
0.28
Agreement
between the
miners and
power plant
firms
uS$/ton
uS$/ton
1.98
1.17
uS$/ton
uS$/ton
uS$/ton
uS$/ton
uS$/ton
uS$/ton
uS$/ton
uS$/ton
0.27
0.07
0.21
1.99
2.07
0.11
20.3%
25%

479/K/30/DJB/2014 on coal production cost reference for openpit miners to be used among others as a basis to determine coal
price for mine-mouth power plants, and to calculate coal royalty.
(in 2014)
No
Type of cost
Direct Production Costs
1 overburden Removal
2 Coal extraction
3 Coal transport from mine location to processing facility
Indirect Production Costs
4 Coal Processing
5 Amortization and Depreciation
General and Administration Costs
Monitoring and Management,
6 environmental
Reclamation and Post Mining
7 health and work Safety
8 Community Development
9 land Acquisition
10 overhead
11 land Rent
12 Royalty (assumption)
13 Margin
Unit
Cost
uSD/BCM/km
uSD/ton
uSD/ton/km
2.41
1.70
0.28
uSD/ton
uSD/ton
1.98
1.17
uSD/ton
0.27
uSD/ton
uSD/ton
uSD/ton
uSD/ton
uSD/ton
uSD/ton
uSD/ton
0.07
0.2 1
1.99
2.07
0.11
16,9%
25 %
OPINION
By Singgih Widagdo - Indonesian Coal Observer
Questioning About Coal

Mine Mouth Power Plants
e have to admit that

the government
has mistakenly
set the long-term
vision in managing our coal resources.
As a consequence, the growth of coal
production has soared high above that
of the domestic demand. Such high
amount of production certainly needs to
be absorbed into the export market. The
pressure over the coal price, expected to
continue within the next few years, has
certainly hit the coal mining business
sector in the country. The government is,
therefore, forced to cut down the target of
state revenue from the coal mining sector.
To revisit the long-term vision
in managing the coal industry, the
government has to take all necessary
efforts to make coal as the energy
resource, because coal has become a mere
commodity over the years. One of the
efforts that should be done is, increasing
the domestic demand, specifically
through coal mine-mouth power plant
constructions.
With the geological condition on
the spread of coal sources in Indonesia,
constructions of coal mine-mouth power
plants would be the perfect option.
Considering the coal utilization in
Indonesia that is very far behind those
of other countries with coal resources,
such as South Africa, India, and China,
the evaluations and corrections of various
cross-ministry policies in the bid to
increase the domestic demand should
become the governments short-term

priorities for the near future. The coal
mine-mouth power plant construction
should not be the only means to increase
the domestic demand. Other efforts to do
that on the part of other industry sectors
requiring high technologies should also
start right now. To accelerate the process,
the government should become the
locomotive of the pioneering industry of
utilizing the coal in sectors that require
huge capitals and high technologies.
Improving the Domestic Demand
Encouraging coal exports is definitely
not the right step in the midst of projection
of ever increasing demand of energy
for domestic use. The coal prices in the
international market have been under
pressure for the last few years, and this
condition is expected to continue for a
long time. China and India, previously
the main targets of export destinations of
coal from Indonesia as the worlds biggest
coal exporter, have changed their policies
related to their coal managements, having
impacts on Indonesia, which prioritized its
coal production for these countries import
markets.
Earlier in 2016, Chinas electricity
consumption only increased approximately
0.3 percent, but the country cut down the
coal imports by 10.2 percent and the coal
production by 6.4 percent. Their thermal
(coal and gas) power generation was
decreased by 4.3 percent to 679 TWh.
On the other hand, the hydro-electricity
production was increased by 22.6 percent

to 129 TWh. This is the highest increase
ever recorded. China was even capable of
breaking the record by building 32 GW
power plants with wind installation and 18
GW power plants with solar installation
in 2015.
The slow growth of economy,
which has decreased energy utilization
in economic activities, has actually
pushed China to increase its utilization
of renewable energies (nuclear and
hydro energies) in meeting the countrys
electricity power demand. With
consistency in increasing its renewable
energy, China is expected to cut down its
mixed-coal power plant supply by 50 up to
55 percent by 2030.
India has essentially done the same
thing. It is widely acknowledged that
almost all coal business stakeholders
in Indonesia have a view that India
has replaced China as the prospective
destination of our coal exports.
Observing the projection of Indian
coal demand, it is only logical to see
India as the promising export market.
Coal consumption throughout India has
increased double folds within the last ten
years, due to the ever increasing demand
to supply the local coal-fuelled power
plants. In 2014, the total demand for
the coal power plants only reached 782
Mt. It increased to 865 Mt in 2015. The
demand for coking coal was relatively
low, reaching only 58 Mt, while the
demand for lignite reached 47 Mt.
65
[ OPINION ]
Mining Law (Mines and Minerals
[Development and Regulation]
Amendment Act 2015), has opened up the
sector to domestic and foreign companies
for commercial mining, thus ending 40
years of state monopoly on coal sales.
With such various efforts, the Indian
government would definitely manage to
cut down the countrys demand on coal
imports by 2017.
Though the coal consumption shows
an increasing growth, India has decided to
cut down the supply for coal power plants
to 55 percent by 2040. However, such cuts
would relatively depend on the successful
construction of other energy sources.
India has set a target to build its renewable
energy that will supply approximately 175
GW power by 2022.
Considering the policies of the
Chinese and Indian governments in
managing their future coal industries,

all of which, resulting in decreasing
demands for their coal imports, should
become a turning point for Indonesia
in restoring and optimizing the coal
management and utilization for domestic
use. By setting the domestic coal
utilization, the homework on restoring
coal as the vital and strategic values for
the interest of positive growth of the
national economy should become the
main target.
By observing the vital and strategic
values, the Non-tax National Revenue
(PNBP) would not be the only way
to encourage growth of domestic coal
utilization. Similarly, determining the
price of coal to supply the local minemouth power plants should not be set in
the interest of PNBP revenue, even to the
extent of the cost plus.
CA|Boim
Based on the economic calculation

in relation to the continuing increase of
demand of coal imports, India has sought
to increase its national coal production
from 612 Mt in 2015 to 1.5 billion tons
by 2020. However, India still has to face a
number of problems challenging the efforts
to increase the targets of its coal production
related to the weak performance of most of
its mining companies throughout last year,
land acquisitions for mining concessions,
forestry and environmental issues, and
transportation bottlenecks. Nevertheless,
the Indian governments serious efforts to
increase production have been balanced
by its efforts to reform the mining industry
to survive the competition and boost
efficiency.
The Coal Mines (Special Provisions)
Bill, adopted by parliament in March
2015, together with the adoption of the
Restoring coal to its vital and strategic

role has become the urgent step for the
government to take. Considering the
undeniable fact that in the new era of
global demand on energy, we should
accommodate not only the interests for
investment, technology, and environment,
but also the inevitable interests for
adequate management of our coal
resources.
Coal Mine-mouth Power Plants
Early in April 2016, the Minister
of Energy and Mineral Resources
(ESDM) issued Ministerial Regulation
No. 9 Year 2016 regarding Procedure of
Procurement and Stipulation of the Price
of Coal for Mine-mouth Power Plants.
In this regulation, the basic principles to
determine the coal qualities are far better
regulated than those in the old regulation
stipulating that the coal products to supply
the mine-mouth power plants should be
the low-rank ones. The new regulation
allows the use of more economical coal in
the mine-mouth power plants.
On the other hand, the locations of the
power plants allowing the farthest distance
of 20 kilometers from the Mining Business
License (IUP) concessions, Special Mining
Business License (IUPK) holders, and
Coal Contract of Works (PKP2B/CCOW)
companies have been over-regulated. It so
happens to the margin calculation allowing
the lowest 15 percent and the highest 25
percent of the total cost of coal production.
The ministerial regulation stipulates
that if the coal price cannot be agreed
by and between the respective mining
company and the coal mine-mouth power
plant within 60 days, the director general
will determine the margin by considering
the principles of expediency, openness,
fairness, and national/regional interests.
The regulation, however, does not elaborate
the basis of such consideration, as the coal
price margin can go below 15 percent.
Considering the main purpose

of the coal mine-mouth power plant
investment on the electricity out-put, also
the electricity user industry (apart from
the procurement of electricity power
for the society) that should compete
in the open market, the over-regulated
ministerial stipulation will not be flexible
in integrating the interests of mining
companies with the interests of coal
mine-mouth power plant investors. With
the present condition, there are several
reconsiderations to be made by the
government, particularly ESDM Ministry.
They are as follows.
First, the government (ESDM
Ministry) should not over-regulate
matters by allowing a maximum distance
of 20 kilometers between a location of
coal mine-mouth power plant and the
mine as a location of a power plant is
determined based on various technical
reasons (water-boiler necessity, land
structure, land conditions, etc.). On the
other hand, geological conditions of
the coal spread and the mine plan, for
time to time, can make such distance
restriction not appropriate. Enforcing
such restriction would make the mine
plan prepared only to comply with
the regulation of keeping the distance
not more than 20 kilometers. On the
downside, the government may suffer
losses due to inadequate utilization of
potential coal resources.
Second, the margin restriction of
between 15 and 25 percent should not be
implemented to all levels of capacity of
coal mine-mouth power plants. Setting a
margin between 15 and 25 percent may
help coal mining companies in facing the
pressures in the coal market. However,
such restriction would not entirely
appropriate to accommodate the interests
of power plant investors in calculating
their investments. By estimating the coal
spread and the transmission conditions,
the small-scale coal mine-mouth power

plants are expected to grow fast. This
requires efforts to keep small-scale mining
companies in operation with reasonable
profits.
For any large-scale coal mine-mouth
power plant with more than one investor
and big companies as mine owners, the
margin calculation should be based on
business-to-business considerations
between the parties. It would be adequate
for coal mine-mouth power plants with
the capacity below 300 MW to have a
margin restriction set by the government,
which would be applied to the respective
mine owners. For the power plants
with the capacity above 300 MW,
the government should hand over the
decision on the amount of margin to the
relevant parties, which are the mining
and power plant investors, based on the
fact that as big investors, they must have
comprehensive financial calculations.
For the government, the procurement of
sufficient electricity power infrastructure
should become the main goal in
accommodating the larger scale of the
nations interest of generating the growth
of the economic sector.
Third, considering coal as the
energy resource, geological science
should become the first consideration.
The knowledge should come after
that. Without the basis of geological
knowledge, the decision on the amount
of margin, with concerns only on the
mine, would not be enough to optimize
the coal resource.
Eventually, we have to acknowledge
that managing coal as energy should be
integrated into the long-term vision because
coal has the vital and strategic values. And
the government should start all the efforts
right now. This was stated by the former
US President, Jimmy Carter: by acting
now, we can control our future instead of
letting the future control us.
67
ANALYSIS
By Hendra Sinadia
Deputy Executive Director of APBI-ICMA and Secretary of Indonesian Mining Institute.
He can be reached at hendra.sinadia@gmail.com
CA|Khalsa
The New Land and Building Tax

Ruling : Overlapping and Disincentive
he mining sector has been one

of the key sectors supporting
Indonesias economic growth for
many decades. The sector makes
a significant contribution to the countrys
GDP, exports, government revenues,
employment and, perhaps most importantly,
the economic development of the remote
regions where mining operations are
located. However, the contribution has been
declining due to global commodity price
downturn. In this unfavorable circumstance

miners have to deal with non-investment
friendly regulations which add more
financial burden.
One of the latest regulations impacting
the industry is a regulation issued by
Indonesian tax authority concerning
land and building tax (Pajak Bumi dan
Bangunan/PBB). Miners are complaining
on the recently issued PBB ruling which
create further legal uncertainty in the
sector. In the media, ICMA is reported

reviewing option to contest the regulation
to the Supreme Court.
PBB regulations
Land and building tax (PBB) is a form
of property tax chargeable on all land and/
or buildings, unless exempted. PBB is part
of the regional taxes which are governed
under Regional Taxes and Retribution
(Pajak Daerah dan Retribusi/PDRB) Law
in which each regional government has to
issue a local regulation to regulate PBB in
its jurisdiction. The scope of PBB under
PDRB Law covers all land and building
with exception on mining, forestry, and
plantation which are governed by separate
regulation.
Legal basis of PBB is Law No.
12/1985 on Land and Building Tax (PBB
Law). In the consideration point (d) of
the Law is stated that our tax system
particularly on property tax has created
double taxes so that the system should
be simplified to provide legal certainty.
Imposition of PBB on mineral and coal
sector is governed by DGTs rulings.
Prior to the issuance of DGT Regulation
No. 47/2015 concerning Procedures for
Imposition of Land and Building Tax
in the Mineral and Coal Sector, the tax
authority issued Regulation No. 32/2012.
Object of tax on PBB under the
Regulation No. 47/2015 is land and
building located in an area used for
mineral and coal mining. This includes
onshore and offshore area and body of
earth beneath the surface area. Onshore

area covers wide area such as productive
area, non-productive area, buffer zone,
non-emplacement area, and other areas.
The body of the earth defined as the body
of the earth for exploration and production
operation. The amount of the tax payable
of PBB Mineral and Coal is calculated
based on the multiplication of the tariff of
the tax and the value of the taxable object
or property.
Subject of taxation of PBB Mineral
and Coal is person or entity that
indisputably has the right to the earth (land
area) and/or to utilizing the earth, and/or
to possesing, controlling, and/or taking
advantage from the building and taxable
object of PBB Mineral and Coal. Taxpayer
of PBB Mineral and Coal is subject of
taxation and obligatorily subject to the
payment of PBB Mineral and Coal.
The selling price of mining product
is using the average selling price of
metal mineral, non-metal mineral, rock,
or coal. The average selling price is the
average price of sales as agreed by the
seller and buyer in a year prior to fiscal
year. In the case that the selling price is
determined based on a special relationship,
the selling price is calculated based on a
normal market price. The Regulation also
stipulate detail of production cost, cost of
land stripping, cost of extraction, cost of
processing/refining, cost of transporation
of mining products, etc.
Overlapping
The main problem of the issue is that
the PBB regulations have created legal
uncertainty as the object and subject of the
regulations overlap with other regulation.
Law No. 20/1997 on Non-Tax State
Revenue (PNBP) in Article 2 paragraph 1b
has clearly defined revenues from natural
resources utilization including royalty in
the mining sector are classified as PNBP.
Details type and tariff of PNBP payment
on mineral and coal sector is governed

further under Government Regulation
(GR) No. 9/2012.
Under PBB Mineral and Coal
Regulation, taxation object of PBB is
calculated based on multiplication of PBB
tariff with calculation of sales value of
mineral and coal in the body of the earth
is in the substance similar with object of
PNBP which is calculated based on sales
value of mineral and coal as regulated
under PNBP Law juncto GR 12/2012.
Subject of taxation of PBB Mineral and
Coal is practically same as taxpayer of
PNBP natural resources as defined in
Article 2 paragraph 1b of PNBP Law.
The imposition of PBB on the area
and production creates double taxation as
concession area owned by CoW, CcoW,
and IUP holder have been subject to the
dead rent. On the gross sales of mining
product, the government has collected
mining royalty for mineral and coal. Both
dead rent and mining royalty are imposed
by the government based on PNBP
Law and respective mining contracts
or agreements. On the other hand, net
income of the miners have been subject to
corporate income tax, of which the tariff
follow provisions in the mining contract.
To charge PBB on resources and
reserves (in the ground) of which the
ownership belong to the state, is legally
not correct as the transfer of ownership
of mining products from the Nation to
mining company takes effect right after the
company has settled the royalty payment.
Therefore the government should only
apply the value of the sale of taxable
object (NJOP) based on value of the
building and land prices as usual.
The substance of the DGT regulations
does not in line with the objective
of PBB Law (Law No. 12/1985). As
aforementioned, PBB Law issued with
the objective is to simplify the tax system
to provide legal certainty. If we look
into the elucidation point (d) of the Law

12/1985, the government appear to realize
inefficiency of our tax system which
has created double taxes that burdening
taxpayers. Thus it is deemed necessary to
have a simplication of tax system which
is simple, easy, fair and provide legal
certainty.
Disincentives
The DGT regulation adds more
financial burden for miners who struggling
to cope with low commodity prices. In the
coal sector, according to a study conducted
by ICMA and IMI, in the price range of
$55-65/ton, roughly 65-72% coal miners
in Indonesia are in negative margin.
Global price downturn has brought down
Peabody an American coal giant which
has filed for bankruptcy. The fall of
copper, nickel, and other mineral prices
has eroded profitability of Indonesian
mineral producers. In this situation, the
government should help the industry at
least by providing investment friendly
regulations. The DGT regulation is seen
as disincentives for the industry and
discourage exploration activities.
For coal sector, the DGT regulation
will add more financial burden which
put coal miners (mostly holder of 3rd
generation of CcoW and IUP) in difficult
situation to sustain their operation.
More cost cutting will be unavoidable,
including reduction of manpower,
as result of this regulation. This
might put the future of long-term coal
supply for the national electrification
program is at risk. In view of the
above, the government should review
the imposition of PBB on mineral and
coal to ensure legal certainty is uphold
in the sector. In addition, the review
of the regulation is expected to ensure
mineral and coal producers to sustain
their operation under unfavorable
circumstance.
69
[ ANALYSIS ]
CERTAINTY IN A
MINERAL NAME
By Ian Wollff
The author is an expatriate principal geologist of about 30 years
experience in the Indonesian exploration and mining industry.
The authors web site is www.ianwollff.com
Background.
One key element of the future
new mining law is to raise the level of
the exploration and mining industries
confidence in Indonesia. For 33 years
(1976 to 2009) there was one working
stable mining law. Then the post 2009
implementing regulations destroyed
industry confidence , first with the
sudden change from an initial 20% to
51% divestment, then the realization that
district issuances of IUPs was a nightmare
of overlapping and poorly recorded
tenements, and finally with the value
adding regulation (along with the non
Mines Department regulation of excessive
export taxes), that bought about a sudden
effective ban on raw ore exports. Recent
political spats between ministers over the
future of the Freeport extension & smelter,
and the Masela oil & gas development
(on shore /off shore) further reduces the
level of confidence in the exploration
and mining industry. Commodity prices
are down, production is typically down
and clearly taxes & non tax revenue from
the mining sector will contribute less to
GDP. The lower the GDP, then the more
difficult and expensive it becomes for the
government to issue bonds or seek other
forms of funding to develop Indonesias
future. The lower the GDP, then there is

less services for the Indonesian people,
or the tax rgime needs to be broadened
to include greater contributions from
the less fortunate. To reinvigorate a well
established profitable exploration and
mining enterprises, industry confidence
need to be lifted through a more practical
mining law, and more importantly, through
a clearer set of implementing regulations.
Why defining minerals is important.
In undertaking exploration, investors
tend to focus on a mineral commodity
which appeals to their business interests.
Some seek coal, others look for gold or
simply sand & gravel to support the soon
to be booming infrastructure construction
industry. It is essential from the outset
of exploration that the investor will be
confident that once they find the mineral,
they will be able to develop a mine and
sell a product. Any form of uncertainty
over the mineral rights, or of possible
interference in having full and exclusive
mineral rights will deter investment. The
C&C process has been introduced to
eliminate spatially overlapping claims
for the same mineral. However there
are potential gaps in the definition of
minerals to confirm full exclusivity or
non encroachment by competitors. For

example the government earlier quashed
one attempt to apply for sand and gravel
license over a coal mines overburden area,
as it was a scam to extort the coal miner.
Thus a clear definition of mineral rights
is an important factor in building industry
confidence.
Regulation 23/2010. Article 2 listing of
minerals for mining.
The proposed new mining law
(currently in discussion & drafting
phase), and subsequent implementing
regulations can update and improve upon
the definition of minerals to give greater
certainty to the industry.
Radioactive minerals (Regulation
23/2010) has 3 elements and one mineral
listed as radium, thorium, uranium,
monazite and other radioactive minerals.
There is now the opportunity to review
and update this clause:1) Perhaps to
include Rare Earth Minerals as a diverse
collection of minerals, some of which can
be radioactive, 2) Potassium as found in
most clays or feldspar minerals common
to igneous rocks is an other radioactive
mineral as is well know by oil & gas
plus coal mining geologists evaluating
down hole geophysical logs. Clearly the
regulation or elucidation may specifically

mention an exclusion of potassium
materials. 3) Radium is typically a gas
that may be difficult to consider as a
recoverable mining product and thus may
be excluded from this list.
Monazite is an ore of thorium,
that is used to improve the strength of
magnesium, as incandescent gaslight
mantles, some forms of glass (camera
lenses), and a catalyst in the cracking of
petroleum products, plus other chemical
uses. Its radioactive properties are stable
with a half life of 14 billion years.
Monazite is typically mined from black
sands, and can be a common minor
component of Indonesias black sand
beaches. One story goes that BATAN
found relatively high radiation on one
beach in Sulawesi that scared the local
community who sought transmigration
away from their village. Indeed a NGO
could abuse this radioactive classification
of Monazite (or low levels of radium,
or traces of radioactive decay minerals
in some zircon etc) to scare the tourist
industry. Note that Article 2 has thorium
listed as both a metal and a radioactive
mineral, so it may be prudent to
declassify Monazite as a radioactive
mineral. This should be a similar non
radioactive classification for Potassium
(common feldspars/clays) minerals. It is
also interesting to note that there is no
regulation specifically obliging radioactive
minerals to have an increase of value
adding / processing.
Perhaps the definition of radioactive
minerals could be included in the
elucidation by prescribing the exploration
and production of such minerals is for their
radioactive component and go on to define
the level of radioactivity. This would be
designed also to eliminate acceptable
background levels of radiation in almost
all rocks, and nullify investor, community
or NGO concerns.
There are 59 listed metallic minerals

named according to the element, or genetic
mineral, and sometimes both are listed,
for example magnetite & iron, lead
& galena, bauxite & alumina. There
are 43 listed non metallic minerals also
named according to the element or genetic
mineral. It is noted that zircon occurs as a
non metallic mineral and zirconium occurs
as a metallic mineral. It is also intriguing
that arsenic, magnesite and phosphate are
considered as non metallic wherein their
principal mineral elements are metals.
There are many thousands of natural
mineral names that suggest defining the
metallic & non metallic commodities by
their mineral names will always leave
some potential loopholes, such as mining
for chalcopyrite, but forgetting to include
malachite. Perhaps it would be clearer
to specify ores by their target elements,
for example copper and associated
elements. This would automatically
include the weathered oxidized minerals
and the underlying fresh sulphide or
silicate primary mineral complexes.
There are 47 rock names mentioned
on the bases of specific mineral (Perlite),
or broad rock type (Granite), or according
to geological setting (river gravels) or
mine processing (river gravels sieved
without sand). The description also
endeavors to distinguish between rocks
for commercial purpose in terms of
potential included other minerals; (sand
not containing elements of metal minerals
or elements of nonmetal minerals in
considerable amounts when sighted from
the perspective of mining economy).
A new rock definition may chose
to follow the mining character of the
rock and the intended purpose of the
rock product. Rocks tend to fall into
2 categories, those of a loose nature
(clay, sand, gravel, friable tuff etc) and
hard nature (insitu granite, andesite
etc). The purpose of the rock product
appears to be 1) construction [road, base,

concrete mix, brick], 2) ornamental stone
[polished marble], 3) semi precious stones
[onyx, jade] or chemical uses/create an
different commodity [Limestone for
lime or cement]. Thus rocks could have
a definition with an option for further
description, such as; Hard construction
rocks, including but not limited to
Andesite or semi precious stone,
including but not limited to Jadite.
There are 5 rocks listed with coal
(coal, solid bitumen, asphalt rocks, peat).
Clarification regarding the contained coal
bed methane or oil shale may improve
certainty. Also there is some research
ongoing looking at the option to recover
Rare Earth Minerals from the waste of
some carbon rich sediments (carbonaceous
claystone etc) that often accompany coals
and such.
List of 10,790 IUP as at Feb 2013.
Once the new mining law has been
passed, and then the IUPs may need to
be reissued, to restate their legal bases
according to the Central government
instead of the District government. This
reissuance can also take the opportunity to
be more consistent and legally clear about
the nomenclature of the minerals.
The list of 10,790 IUP (C&C plus
Non C&C) as at Feb 2013 contains
some 263 different names of mining
commodities, compared to the 158
listed under regulation 23/2010 Article
2. Some of these IUP mining items are
simply variations on spelling (Tras &
Trass), others are mixtures of English
and Indonesian, or mixture of element
and mineral (Zircon, Zirkon, Zirkonium).
It would seem that the regional officers
recording the exploration / mining
commodity may have followed some local
naming and often included more than one
mineral commodity in the license (Pasir
Darat Sirtu dan Batu Belah) or (Timah
71
CA|Khalsa
[ ANALYSIS ]
dan Mangan DMP) and (Emas, Perak,

Tembaga, Zeng, Timbal dan Logam
Tanah Jarang). Unfortunately there are
also some very broad and apparently all
encompassing minerals (Logam, Non
Logam, Batu dan clay). In contrast there
are some general terms that may be
too limiting, should a closer geological
scrutiny be applied (Granite may exclude
Granodiorite), or (Andesite may exclude
Dacite).
A more complex issue seems to be the
inclusion of associated minerals, often
listed as DMP (Dan Mineral Perikut)
The regulation 23/2010 does not seem to

adequately address the issue, but implies
associated minerals are included in the
principal specified mineral. Article 44 (1)
Where other non-associated minerals
mining commodities are found The
IUPs mineral description address this
issue in a variety of ways, (1-Tembaga,
2-Tembaga DMP, 3-Tembaga, emas
DMP, 4-Tembaga, Emas dan Perak). It
is unclear if IUPs for single minerals is
to include associated minerals (Timah,
and Timah DMP), indeed it would be
impractical in most cases to mine only one
mineral without the associated minerals.

The issue goes further, wherein mining
and recovering one commodity may be
practical and economical in some cases,
but in other cases associated minerals
may /may not be economical to recover,
or may impose a processing / financial
penalty on the principal mineral, for
example phosphorus in iron ore is a
significant penalty. In some cases it may
be near impossible to extract one mineral
without including an associated mineral,
for example some magnetite sands contain
minor crystal inclusions of ilmenite.
Sometime the secondary elements will

lower profit margins, and contribute to less
tax to the state.
The 23/2010 regulation does not
clearly state the relationship between the
different categories of mining products.
Article 6 states that one mining permit
area may be granted one or several mining
permits. It would seem that one mining
area can have adjacent or overlapping
tenements for each of the mining products
(metal mining, non-metal mining, rock
mining, coal mining, radioactive minerals).
Indeed this would allow optimum benefit
for the government if one concession
is targeting primary copper in the hills,
while another concession is targeting
alluvial rocks in the river for construction.
If these tenements belonged to the same
private group we might expect good
coordination, but if they belong to separate
parties, then there could be difficulties in
implementation. It would be unworkable if
one company mined the metallic minerals
of copper and associated metallic minerals,
but another company sought rights over
the non metallic sulphur minerals of the
first metal mining company.
23/2010 Article 44 does consider
other mining commodities in some cases;
Where other non-associated minerals
mining commodities are found within
a Mining Permit Area location given
through a Mining Permit, the Exploration
Mining Permit holder and the Production
Operation Mining Permit holder shall
be given first priority to commercialize
the other mining commodities found.
Elucidation of Article 44 Section (1):
Other mining commodities in this
provision are minerals other than
nonmetal minerals that are found within
a nonmetal mineral Mining Permit
Area, for example, metal minerals or
coal. For example, a river gravel mine
for construction material may discover,
and apply for, alluvial gold. This should
also allow an alluvial gold mine to apply

for and sell some of the river gravel and
sand to the local construction industry,
or the overburden hard rock of a primary
gold mine may be applied for and sold as
construction material. Exploration may
start out looking for one set of minerals
but end up finding or developing a
different set of minerals. For example
epithermal gold veins may be gold and
silver rich at shallow depth, but such
minerals are replaced by copper, lead and
zinc at depth. In another case a hard rock
tin skarn may be of interest to one party,
but the same deposit could be of interest
for iron ore mine to another party.
Alternative criteria.
There are some proposals to classify
minerals according to their importance
to Indonesia, using such terms as vital,
strategic etc. In the past strategic has
largely been associated with radioactive
minerals, wherein the outcome seems that
they are so important that they are not
developed!! Strategic has also strangely
been associated with tin, even though
Indonesia does not seem to consume
much tin. If the concept of strategic is to
reflect employment or securing foreign
currency, then surely Freeports copper
and gold would be more strategic!!
Strategic or vital is being discussed in
relation to securing coal, oil & gas to
secure Indonesias energy needs. Here the
sense of national security is mixed with
the need for these commodities to generate
strategic foreign currency and settle the
balance of trade. However developing
Indonesias phosphate exploration
industry, to offset the near 100% import
needs for phosphate fertilizer, does not
seem to be on the strategic horizon.
We have seen a land rush to obtain
plots of land proposed for logistic bases
for the Masela project. The next rush
may be to secure the limited sites for
suitable sand, gravel and hard rock for

the various national infrastructure sites.
This may urge certain sites to become
strategic sand and rock sites.
It would seem that a revision of the
concept and treatment of vital or strategic
is required. Instead of not developing the
minerals such as uranium, the connation
of strategic may be to provide meaningful
government encouragement in other
mining commodities. Perhaps strategic
mineral/rock exploration could be immune
from all forms of forestry restrictions, plus
tax incentives for production.
Flexibility for good or bad intentions.
Regulation 23/2010 Article 2.3
contains a fairly standard phrase
Changes in the grouping of mining
commodities as intended by section 2
shall be determined by the Minister.
This, and similar phrases through the
regulation provide the Minister with the
good ability to clarify or improve the
regulations. However the present mindset
of some domestic and international
investors is one of uncertainty over the
political motivations. In a nightmare
scenario the Minister could use such
clauses to act in a manner to place certain
investors at risk, as was done when
the foreign shareholding was raised
from 20 to 51% etc. Confidence in the
regulation can be instilled through 1)
good legal & technical drafting, 2) using
the elucidations to provide greater clarity
of the intentions of the law, and 3) more
detailed socialization of the regulations
recorded on the ESDM web site.
Conclusion.
By having regulations that removes
ambiguities or potential loopholes
relating to the description of the rocks and
minerals, then further confidence can be
installed into the proposed new exploration
and mining laws and regulations.
73
Market Overview
China domestic steam coal market
remained unchanged overall from April 8 to
14, 2016. BSPI (Bohai-rim Steam Coal Price
Index) for 5,500 kcal/kg steam coal ended at
CNY389/mt on April 13, unchanged from on
April 6. The most active steam coal contract
for May 2016 delivery closed at CNY370/
mt on Zhengzhou Commodity Exchange on
April 14, up by CNY7/mt from April 7.
Negative impact from a railage cut was
weaker than expected. Firstly, the railway rate
cut was not uniform, easing traders and end
users eager to depress coal prices. Secondly,
a differentiated pricing mode dented cargo
delivery interest of medium and small coal
miners, who had to bear a transportation cost
higher or much higher than large coal miners as
the railway rate cut was exclusive to the latter.
At northern ports, steam coal inventory
gained to different extents except for at
Qinhuangdao Port. On April 12, steam coal
inventory totaled 13.399 million mt at five
northern ports, rising by 1.258 million mt or
10.36% week-on-week and soaring by 3.245
million mt or 31.96% month-on-month. A
Hebei-based trader quoted 5,500 kcal/kg
steam coal (S: 0.8%) at CNY385/mt FOB
Qinhuangdao Port, saying waterborne steam
coal prices were much likely to drop once a
general railway rate cut came into fact.
Power plants kept normal purchase with
low inventory, and their coal consumption
would decline with rising hydropower
Steam coal spot and futures market comparison, 2015 - 2016

CNY/mt
Board lot
500
464,000
450
364,000
400
264,000
350
164,000
300
64,000
250
14/Apr/15
14/Jul/15
Qinhuangdao port 5,500 kcal
(36,000)
14/Jan/16
14/Apr/16
Closing price of main contract TC1501
Turnover of TC1501 (Board lot)
14/Oct/15
China 5,500 kcal coal price trend in ports, 2015 - 2016

CNY/mt
550
500
450
400
350
14/Apr/15
14/Jul/15
Qinhuangdao Port
14/Oct/15
14/Jan/16
Shanghai Port
Jingtang Port
14/Apr/16
Guangzhou Port
measures for mine workers.

End users increased purchase for
imported coal on rising domestic coal
prices, leading to a surge in import volume
in March. However, market participants
are not upbeat about the coming market,
citing dull coal demand in April and May,
rising hydropower generation and the
governments support in clean energy.
Steam Coal Market in Chinas Major
generation. April and May are typically dull

season for coal consumption, as end users
demand will decline as clean energy like
hydropower and nuclear power will hurt.
Pithead prices are likely to edge
upwards by CNY3-5/mt in late April, as
coal supply is tightened owing to slowerthan-expected production resumption by
coal miners, recent mine consolidation and
shutdown, as well as the 276 working days
Producing Regions
Shanxi
Shanxi coal price trend, 2015 - 2016
Shaanxi coal price trend, 2015 - 2016
CNY/mt
CNY/mt
250
340
320
230
300
210
280
260
190
240
170
220
200
14/Apr/15
14/Jul/15
Datong 5,500 kcal FOR
14/Oct/15
14/Jan/16
Shuozhou 5,200 kcal FOR
150
14/Apr/16 14/Apr/15
14/Jul/15
14/Oct/15
Shenmu 6,000 kcal pithead
14/Jan/16
14/Apr/16
Yulin 5,500 kcal Pithead
75
Steam coal prices in China's main producing regions, 2016
CNY/mt
Region
Shuozhou, Shanxi
Shuozhou, Shanxi
Datong, Shanxi
Datong, Shanxi
Xinzhou, Shanxi
Yulin, Shaanxi
Shenmu, Shaanxi
Xian, Shaanxi
Xian, Shaanxi
Erdos, IM
Baotou, IM
Dongsheng, IM
Dongsheng, IM
Huolingguole, IM
CV (kcal/kg)
Specification (%)
Apr 14th Apr 7th
Chg Delivery (Inc. VAT)
230
230
0
5,200
A:21-27, V:28-40, S:<1
FOR
210
210
0
4,800
A:22-28, V:28-40, S:<1
FOR
230
230
0
5,500
A:10-16, V:28-32, S:1.0
FOR
235
235
0
5,800
A:15.38, V:33.35, S:1.0
FOR
160
160
0
5,000
A:25, V>31, S:1.2-1.8
FOR
190
190
0
5,500
A:15, V:28-34, S:<1
Pithead
190
190
0
6,000
A:20, V:32-38, S:<1
Pithead
380
380
0
6,000
A:14, V:35, S:0.6
Ex-works
300
310
0
5,500
A:20, V:32, S:0.5
Ex-works
80
80
0
4,500
A:11, V:29, S:1.3
Pithead
210
210
+10
5,000
A:20, V:30, S:0.2
FOR
140
140
0
5,200
A:20, V:33-36, S:0.5-0.8
Pithead
250
250
0
5,500
A:10, V:33-36, S: 0.5-0.8
FOR
120
120
0
3,500
A:25, V<46, S<0.5
Pithead
Note: IM, Inner Mongolia; FOR, free-on-rail; CV, NAR basis; A, ash content on air dry basis; V, volatile matter on air dry basis;
S, total sulfur on air dry basis
Source: JYD Information Co., Ltd.
Qinhuangdao port domestic coal price trend, 2015 - 2016

CNY/mt
550
500
450
400
350
300
250
14/Apr/15
14/Jul/15
4,500 kcal
14/Oct/15
5,000 kcal
14/Jan/16
5,500 kcal
14/Apr/16
5,800 kcal
Guangzhou port domestic coal price trend, 2015 - 2016

CNY/mt
550
500
450
400
350
14/Apr/15
14/Jul/15
14/Oct/15
5,500 kcal
14/Jan/16
5,000 kcal
14/Apr/16
Steam Coal Market at Chinas Major Ports

Qinhuangdao Port
The coastal steam coal market at
Qinhuangdao Port kept stable this week.
On April 14, inbound rail coal haulage fell
to 418,000 mt and outbound shipments
slipped to 403,000 mt, which together
pushed inventory lower to 4.4185 million
mt. 23 vessels were awaiting at the port for
coal loading, and 8 more were expected.
On April 14, ex-stock offers for 4,500
kcal/kg stood at CNY305-315/mt and
those for 5,000 kcal/kg steam coal kept at
CNY345-355/mt. 5,500 kcal/kg steam coal
ex-stock prices stayed at CNY385-395/mt,
and 5,800 kcal/kg steam coal was offered at
CNY405-415 /mt FOB Qinhuangdao Port.
Guangzhou Port
Guangzhou Port stayed steady this week.
On April 14, coal inventory at Guangzhou
Port stood at 1.28 million mt, of which
820,000 mt were held by Xinsha Company
and 460,000 mt by Xiji Company.
On April 14, ex-stock prices for
Shanxi mixed 4,500 kcal/kg steam coal
stood at CNY355-365/mt, while Shanxi
mixed 5,000 kcal/kg steam coal prices
kept at CNY380-390/ mt. 3# 5,574 kcal/kg
steam coal from Yitai Coal saw ex-stock
prices at CNY445/mt.
Jingtang Port
Jingtang Port kept stable this week.
On April 14, coal inventory reached at
760,000 mt at SIDC Jingtang Port, rising
by 70,000 mt on the week. On April 14,
4,500 kcal/kg steam coal was offered at
CNY305-315/mt FOB Jingtang Port. Exstock prices for 5,000 kcal/kg steam coal
stood at CNY345-355/mt, while those for
5,500 kcal/kg steam coal were pegged at
CNY380-390/mt and 5,800 kcal/kg steam
coal saw prices at CNY410-420/mt.
Imported Steam Coal Market in China

Australia
Australian NEWC 6,000 kcal/kg
steam coal index stood at $50.49/mt FOB
Newcastle Port on April 14, rising by $0.39/
mt or 0.78% from on April 7. South African
Richards Port 6,000 kcal/kg steam coal
index stood at $53.36/mt FOB Richards
Port, rising by $1.43/mt or 2.75% week-onweek. European (ARA) 6,000 kcal/kg steam
coal index was pegged at $46.38/mt DES
Amsterdam, Rotterdam and Antwerp Ports,
up by $1.7/mt or 3.80% on a weekly basis.
Indonesia
Indonesias Ministry of Energy and
Mineral Resources set its April thermal
coal reference price, also known as Harga
Batubara Acuan, at $52.32/mt FOB, up
1.4% from March. On April 14, ex-stock
prices for 4,800 kcal/kg Indonesian steam
coal and 3,800 kcal/kg steam coal each
stood at CNY400/mt and CNY275/mt
respectively, including the 17% VAT, both
unchanged from April 7.
Jingtang port domestic coal price trend, 2015 - 2016

CNY/mt
550
500
450
400
350
300
250
14/Apr/15
14/Jul/15
4,500 kcal
14/Oct/15
5,000 kcal
14/Jan/16
5,500 kcal
14/Apr/16
5,800 kcal
Guangzhou port domestic and imported coal price comparison

CNY/mt
550
500
450
Chinas Major Coal Producers

Yangquan Coal Industry Co., Ltd,
a major anthracite producer in northern
Chinas Shanxi province, set its coal sales
target at 66.67 million tons this year, up
6% from actual sales a year ago, said the
company in a statement late April 8.
Yangquan Coal expected operating
revenue to drop 11.6% on year to 14.9
billion yuan ($2.3 billion), and coal output
down 0.8% to 32.93 million tons in 2016,
the statement said.
News and Commentary
China Q1 coal industry FAI drops
24.5pct on yr
Chinas fixed-asset investment (FAI) in
coal mining and washing industry amounted
to 30.2 billion yuan ($4.66 billion) in the first
400
14/Apr/15
14/Jul/15
14/Oct/15
Shanxi 5,500kcal
14/Jan/16
Australia 5,500kcal
Qinhuangdao port coal stockpile, 2016

Date
Apr 14th
Apr 13th
Apr 12th
Apr 11th
Apr 8th
'000mt
Rail transferred volume Coal handling Number of vessel queue Number of vessel expected Stockpile
372
392
22
2
4,395
372
392
22
2
4,395
390
350
21
2
4,415
395
300
19
8
4,375
301
571
23
10
4,215
Coal in stock at major ports, 2016

Date
14/Apr/16
'000mt
Caofeidian port
Guangzhou port
Tianjin port
Huanghua port
Apr 14th
1,910
1,425
2,201
2,190
Apr 13th
1,910
1,425
2,201
2,190
Apr 12th
1,880
1,425
2,234
1,849
Apr 11th
1,870
1,588
2,234
1,586
Apr 8th
1,740
1,630
2,174
1,613
77
Guangzhou port imported coal price trend, 2015 - 2016

CNY/mt
600
550
500
450
400
350
300
250
14/Apr/15
14/Jul/15
14/Oct/15
Indonesia 3,800 kcal
14/Jan/16
Indonesia 4,700 kcal
14/Apr/16
Australia 5,500 kcal
China coastal ocean freight curve, 2014 - 2015

CNY/mt
45
40
35
30
25
20
15
10
14/Apr/15
14/Jul/15
14/Oct/15
14/Jan/16
QHD-GZ 50,000-60,000 DWT

QHD-FZ 30,000-40,000DWT
14/Apr/16
QHD-SH 40,000-50,000DWT
QHD-NB 15,000-20,000DWT
Imported steam coal Ex-stockpile price, 2016

Port
Origin
GZ
CNY/mt
CV
Apr 14th
Apr 7th
Chg
Indonesia
3,800
GZ
Indonesia
4,800
GZ
Australia
5,500
FCG
Indonesia
3,800
FCG
Indonesia
5,500
FCG
FCG
Australia
South Africa
5,500
5,500
285
365
410
280
450
440
460
285
365
410
280
440
430
460
0
0
0
0
+10
+10
0
GZ=Guangzhou, FCG=Fangchenggang
quarter this year, dropping 24.5.2% from the

year prior, showed data from the National
Bureau of Statistics (NBS) on April 15.
Private investment in the sector stood at
18.9 billion yuan, falling 20.2% year on year.
In the same period, fixed-asset
investment in all mining industry in the
country posted a yearly decline of 18.1% to
117.8 billion yuan; of this, private investment
in mining industry stood at 73 billion yuan,
dropping 7.1% from the previous year.
Meanwhile, the total fixed-asset
investment in ferrous mining industry
over January-March also witnessed a
yearly drop of 18.1% to 13.1 billion yuan;
while that in oil and natural gas industry
plummeted 40.3% on year to 24.1 billion
yuan, according to the NBS data.
The fixed-asset investment in nonferrous mining industry stood at 17.8 billion
yuan during the same period, up 8.9% from
the year-ago level, data showed.
China Q1 coal output down 5.3 percent on year
China produced 811.27 million tons of
coal in the first quarter this year, sliding
5.3% year on year, a slower decline than
the drop of 6.4% over January-February,
data from the National Bureau of Statistic
(NBS) showed on April 15.
In March, Chinas raw coal output
posted a year-on-year decrease of 4.5% to
293.8 million tons, data showed.
Chinas coal producers were still
in great but narrowing losses in March.
Around 70% of the coal mines in Chinas
main production areas surveyed by China
Coal Resource (CCR) website were in
losses in March, mainly due to continued
supply glut and flat demand.
The share of lossmaking mines in
surveyed thermal coal mines contracted
from 95.8% a month ago to 95.1% in
March, with capacity combined accounting
for 79.9% of the total surveyed thermal coal
capacity, down from 85.6% a month ago.
The share of lossmaking mines in

surveyed coking coal mines dropped from
95.9% in February to 94.3% in March,
with capacity combined taking 93.7% of
the total surveyed coking coal capacity,
down from 95.9% in the previous month.
Led by the states policy of capacity
elimination in coal sector rolled out on
February 5 this year, 17 provinces and cities
in China have specified their capacity cut
plans, which are expected to exceed the
central governments target, analysts said.
Ocean freight
China coastal freight change, 2016
Shenhua starts pilot run of new coal-toolefin project

Shenhua Group started the pilot run of
its new coal-to-olefin project at Urumqi in
Xinjiang Uygur Autonomous Region on
April 12, local media reported.
The project, which was built and
operated by Xinjiang Coal & Chemical
Branch Company under Shenhua group,
has a designed capacity of 0.68 million
tons per annum.
Shenhua Group has invested a total
22.88 billion yuan ($3.53 billion) on
the project, the most-invested-ever coal
chemical project since the establishment of
the autonomous region, said Peng Xiaochun,
Party secretary of the branch company.
It has reportedly finished its
construction, and is expected to be put
into operation before or after International
Labors Day holidays in early May.
Meanwhile, the branch company,
approved by Shenhua Group on April 10,
will be altered to the Groups subsidiary
through official procedures. The move
means that all the companys taxes will be
a part of local governments revenue, which
undoubtedly provides sound support for
local economic development, Peng said.
China power plants' coal inventory, daily consumption & usage days
China's six biggest coastal power plants coal inventory, 2016
China Mar coal exports soar 297pct on yr

China exported a total 1.27 million tons
of coal in March, soaring 296.9% on year
Shipping line
Tianjin-Zhenjiang
Tianjin-Shanghai
Qinhuangdao-Shanghai
Qinhuangdao-Ningbo
Qinhuangdao-Nanjing
Qinhuangdao-Guangzhou
Jingtang- Ningbo
CNY/mt
Ship type (DWT)

10,000-15,000
20,000-30,000
40,000-50,000
15,000-20,000
30,000-40,000
50,000-60,000
40,000-50,000
Apr 14th
Apr 7th
Chg.
29.2
28.9
+0.3
20.4
19.9
+0.5
16.2
15.2
+1
22.7
22.2
+0.5
23.2
22.4
+0.8
21.2
16.3
19.5
15.2
+1.7
+1.1
$/mt
International ocean freight change, 2016

Shipping line
Australia-China
Indonesia-China
Ship type (DWT)

60,000-70,000
60,000-70,000
Apr 14th
Apr 7th
6.37
3.27
6.97
3.57
Chg.
+0.6
+0.3
Date
Apr 14th
'000mt
JERDIN
Shanghai Electric
Yuedean
Guodian
Datang
Huaneng
Total
1,910
252
2,881
1,984
750
3,435
11,212
Apr 13th
1,810
282
2,882
1,982
737
3,400
11,093
Apr 12th
1,910
295
3,002
1,950
790
3,436
11,383
Apr 11th
1,750
315
2,934
2,127
786
3,428
11,340
Apr 8th
1,750
315
2,934
2,127
786
3,428
11,340
China's six biggest coastal power plants coal daily consumption, 2016
Date
'000mt
JERDIN
Shanghai Electric
Yuedean
Guodian
Datang
Huaneng
Apr 14th
103
28
101
121
53
173
Total
579
Apr 13th
101
25
90
120
52
159
547
Apr 12th
113
25
101
120
55
167
581
Apr 11th
102
21
85
112
50
160
530
Apr 8th
102
21
85
112
50
160
530
Huaneng
Total
Day
China's six biggest coastal power plants coal usage days, 2016
Date
JERDIN
Shanghai Electric
Yuedean
Guodian
Datang
Apr 14th
18.5
28.5
16.4
14.2
19.9
19.4
Apr 13th
17.9
11.3
32
16.5
14.2
21.4
20.3
Apr 12th
Apr 11th
Apr 8th
16.9
11.8
29.7
16.3
14.4
20.6
19.6
17.2
17.2
15
15
34.5
34.5
19
19
15.7
15.7
21.4
21.4
21.4
21.4
and up 39.56% on month, showed data from

the General Administration of Customs
(GAC) on April 13.
It was the fourth consecutive rise on both
year-on-year and month-on month basis,
mainly attributed to low price advantage of
Chinas coal amid supply glut and falling
prices in domestic market. Yet, coal exports
still stayed at a relatively low level.
The value of the March exports was
$92.86 million, increasing 166.7% from
a year ago and up 30.65% from February.

That translated to an average price of
$73.12/t, falling $35.69/t on year and
down $4.98/t on month.
In the first quarter of the year, Chinas coal
exports surged 185.1% on year to 2.79 million
tons, with value up 90% to $109.4 million.
China Mar coal imports up 15.6 pct on yr
China imported 19.69 million tons of
coal in March, rising 15.62% on year and
79
up 45.42% on month, showed data from

the General Administration of Customs
(GAC) on April 13.
The increase in coal imports was mainly
due to the rising demand at steel mills amid
rebounding steel market and the increased
coal consumptions at utilities amid faster
production recovery of industrial enterprises.
Total value of the imports in March
stood at $928.3 million, dropping 13%
year on year but up 40.91% month on
month. That translated to an average price
of $47.15/t, dropping 15.51% from the
year prior and down $1.51/t on month.
In the first quarter this year, China
imported a total 48.46 million tons of coal,
falling 1.2% on year; total value of the
imports stood at $2.31 billion, slumping
28.8% from the year before.
China loosens import restrictions on N.
Korean anthracite
China allowed imports of North Korea
anthracite for civilian and not for nuclear
or missile programs purpose recently,
on condition that importers provide
commitment letters with company heads
signature and official seal, sources said.
It was a looser policy compared
with strict ban on coal, iron and iron ore
imports announced by Chinas Ministry of
Commerce on April 5. Yet, it was still in
line with the Chinese governments aim to
restrict North Koreas attempt in nuclear
tests and missile launch.
Anthracite imports, once confirmed
related with North Koreas nuclear or missile
programs, will be rejected by customs
authorities to enter China, trade sources said.
Some traders said it is all right to
import North Korean anthracite as long as
the commitment letter is submitted to the
customs. Sources at Rizhao and Longkou
port also reported normal anthracite
arrivals, and stocks at Longkou port were
0.65 million tons or so.
Prices of imported North Korean

anthracite were stable recently. The price of
North Korean anthracite with 15% ash was
$42 and $40 or so, CFR Rizhao and Longkou
port, respectively, both unchanged on week.
A Shandong-based steel mill source
said that the DDP price of screened North
Korean anthracite stood at 430 yuan/t
with VAT, and unscreened 420 yuan/t,
respectively, after a 10 yuan/t price rise on
tight supply earlier this month.
Better demand for imported anthracite was
observed at areas along Chinas Yangtze River
than Shandong province, one trader noted.
While some Shandong-based traders
said steel makers preferred domestic
anthracite to the imported, given the slight
price gap on delivered basis.
The supply of imported anthracite from
North Korea may increase in the future,
which may lead prices to decline slightly.
mining and management costs.

In 2015, Yangquan Coal realized
operating revenue of 16.86 billion yuan, down
19.6% year on year; while net profit slumped
91.6% on year to 83.39 million yuan.
Coal output of the company increased
6.9% from the year prior to 33.2 million
tons in the same year; the company
purchased 34.94 million tons of coal from
its parent and subsidiaries last year, up
15.4% on year, with purchased raw coal
from parent at 11.98 million tons.
Coal sales rose 14.6% on year to 62.82
million tons. Of this, sales of coal lump and
pulverized coal fell 12.8% and down 9.6%
on year to 4.85 million and 5.02 million tons,
respectively; sales of washed coal slack rose
22.4% on year to 51.1 million tons.
Coal sales price dropped 30.1% on
year to an average 242.3 yuan/t last year,
the company said.
Yangquan Coal 2016 coal sales target

up 6 percent on year
Yangquan Coal Industry Co., Ltd,
a major anthracite producer in northern
Chinas Shanxi province, set its coal sales
target at 66.67 million tons this year, up
6% from actual sales a year ago, said the
company in a statement late April 8.
Yangquan Coal expected operating
revenue to drop 11.6% on year to 14.9
billion yuan ($2.3 billion), and coal output
down 0.8% to 32.93 million tons in 2016,
the statement said.
Despite plunging domestic coal prices,
Yangquan Coal still managed to make
profit last year, thanks to a year-on-year
reduction of 31.9% in production cost to
172.3 yuan/t. Operating cost dropping
20.4% on year to 13.71 billion yuan in
2015, the company said.
The company profit mainly come
from coal businesses, which depends
mainly on the increase of raw coal output
and sales, as well as proper controls on
Daqin Railway Q1 net profit may slide

50 percent on year
Daqin Railway Co., Ltd, the operator of
Chinas leading coal-dedicated Daqin rail
line, expected its net profit to slide 50% in
the first quarter this year, the company said
in a quarterly statement on April 12.
That means the first quarter profit may
drop to 1.86 billion yuan ($287 million), based
on its year-ago net profit of 3.72 billion yuan.
Daqin Railway, which mainly transported
coal from Shanxi, Inner Mongolia and other
major production bases via Qinhuangdao port
to be shipped to end-users in south China,
attributed the profit slump to flat coal demand
at domestic market and a 0.001 yuan/t cut in
rail coal freight from February 4 this year.
Daqin is losing its dominant role in
rail coal transport, due to the operation of
Shuohuang (Shuozhou, Shanxi Huanghua
port, Hebei), Zhangtang (Zhangjiakou,
Hebei Caofeidian port) and Zhunchi
(Zhunger- Shenchi) railways that diverts
Inner Mongolian coal to other northern ports.
Shanxi province is increasing the

in-situ conversion of coal to electricity
and chemical products, instead of directly
delivering coal to other provinces, to
enhance profitability.
In March, Daqin line realized coal
transport of 28.89 million tons, down
19.23% year on year, while the volume over
the first quarter dropped 21.43% on year to
83.28 million tons, the company said.
China urges power firms to sign long
term contracts with coal miners
China has asked state-owned power
plants to negotiate long-term supply contracts
with coal producers in a bid to stabilize the
market and ease pressure on the countrys
loss-making miners, according to a draft
document released by relative department.
The document was sent to major
coal buyers in the power sector and
coal producers by State-Owned Asset
Supervision and Administration
Commission (SASAC) in advance of a
meeting due to take place on March 31
between both sides.
The government is trying to manage
the decline in its huge coal sector, which
is suffering from falling demand and a
concerted state effort to cut pollution and
greenhouse gas emissions.
With an annual capacity surplus of around
2 billion tons, China plans to shut down
around 500 million tons of coal production
in the coming three to five years. The
government has held regular meetings with
miners urging them to maintain discipline
curb production and avoid price wars.
According to a draft document the big
five state power groups and major state
coal suppliers like the Shenhua Group and
the China Coal Group have been asked to
agree to a plan boosting long-term stable
cooperation between the sectors.
SASAC has urged state coal and
power firms to sign long-term supply
contracts as well as maintain market

discipline as part of the plan.
A mechanism to allow upstream coal
suppliers and downstream coal consumers
to share market risks more fairly should be
established, it said.
Coal and power firms traditionally
meet at the end of each year to agree prices
and supply volumes for the following year,
leading to tense negotiations and frequent
stand-offs between the two sides.
New guidelines were introduced by
regulators in 2014 to allow them to set
volumes only and give the market a greater
say in pricing.
Chronic oversupply and a collapse in
prices, has resulted in power firms buying
more from the spot market in recent years.
Tensions have recently been rising
between the two sectors, with one coal firm
complaining last year that power plants
had been playing suppliers off against one
another in order to force prices down further.
Huadian Power International
Corporation, the listed unit of the Huadian
Group, one of big five state utilities, posted
a 21% rise in net profit last year, while the
Chinese coal sector was struggling with
heavy losses and widespread closures.
Daqin Mar coal transport down 19.3 percent
on year
Daqin line, Chinas leading coaldedicated rail line, transported 28.89
million tons of coal in March this year,
climbing 24.5 % on month but down
19.32% on year the 19th consecutive
year-on-year drop, said a statement released
by Daqin Railway Co., Ltd on April 9.
In March, Daqins daily coal transport
averaged 0.93 million tons, 16.3% higher
than Februarys 0.8 million tons.
As a result, Daqin rail line realized coal
transport of 83.28 million tons in the first
quarter this year, falling 21.43% year on year.
Daqin rail line has started routine spring
maintenance on April 6, and it will last

3 hours each morning for 25 days. This
may reduce a total 5 million tons of coal
transport during the whole period, based on
a daily drop of 0.2 million tons averagely.
The maintenance, which traditionally
had bolstered thermal coal prices at coastal
ports, may not exert much influence on
the market as daily haulage by Daqin
has already dropped greatly amid weak
demand and diversion of coal shipment by
new railways to other northern ports.
JYD Coal Industry Research Center
JYD Online Co., Ltd. is mainly
engaged in businesses of Information,
Spot Trading and Online Financing.
JYD Coal Industry Research
Center, as a very import part of Energy
Consulting department of JYD Online
Co., Ltd. aims to bring liquidity and
transparency to Chinese coal industry,
giving you the information you need to
help you closely follow, analyze and
evaluate changes in the marketplace,
and formulate the business strategy.
China Steam Coal Market Weekly
Report is published every week on
steam coal price assessment, market
alert, moving news, commentary
and speculation. The report provides
concise weekly insight into Chinese
steam coal market.
Besides weekly report, JYD Coal
Industry Research Center also publishes
weekly report, monthly report, quarterly
report, annual report, international trade
analysis report, Chinese coal producer/
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production database, Chinese coal
operating ports distribution map, report
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For more information, please
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81
OPINION
By Bill Sullivan
Christian Teo & Partners (in asscociation with Stephenson Harwood LLP)
RELAXING SOME MINERAL

EXPORT REQUIREMENTS
JUST THE BEGINNING?
INTRODUCTION
Indonesia has moved to relax the
export requirements for some minerals but
not for coal.
Metal minerals, non-metal minerals
and rocks, that have met the minimum
requirements for processing and refining
or that may be temporarily exported in
concentrate form until January 2017, may
now be exported without the need for the
exporter to become a Registered Exporter.
More importantly, in the case of metal
mineral producers temporarily exporting
in concentrate form, the requirement to
achieve a specified level of progress in
domestic refining facility construction,
as a pre-condition to renewing their
Export Approvals, has been significantly
modified. Concentrate exporters are also
being allowed to more easily amend their
Construction Plans and recover their
refinery construction guarantee deposits.
The remaining metal mineral
concentrate export requirements, however,
continue to be onerous
In this article, the writer will review
the newly relaxed export requirements
for metal minerals, non-metal minerals
and rocks before considering whether or
not the recent relaxation of these export
requirements may be the beginning of
bigger changes to come in this area,
especially with regard to a more general
relation of the existing export ban on

unprocessed metal minerals.
BACKGROUND
The export requirements for metal
minerals, non-metal minerals, rocks
and coal became steadily more onerous
starting in 2012. The drivers of these more
onerous export requirements were (i) the
introduction of a domestic processing and
refining obligation as part of the 2009
Mining Law (DP&R Obligation), (ii)
the announcement of an export ban on
all unprocessed metal minerals to take
effect in January 2014 and as a way of
enforcing the DP&R Obligation (Export
Ban), (iii) the Governments growing
concern about the level of illegal mineral
exports and (iv) the urgent need of the
Government to collect more revenue from
the mining industry.
Readers interested in knowing
more about the 2012 to 2015 history
of the export requirements for metal
minerals, non-metal minerals, rocks
and coal are referred to the writers
previous articles on this subject including
(i)Export Requirements for Certain
Mineral Products New Rules and
New Complexity, Coal Asia Magazine,
July August 2012; (ii) Measures to
Stop Illegal Mineral & Coal Exports
A Probable Triumph of Form over
Substance, Coal Asia Magazine, July

August 2014 and (iii) New Mineral
and O&G Export L/C Requirements
Exercising Market Power and Trying to
Cover the O&G Revenue Shortfall, Coal
Asia Magazine, February - March 2015.
Metal mineral producers, temporarily
exporting in concentrate form until
January 2017, have found the requirement
to establish a certain level of progress in
domestic refining facility construction, as
a pre-condition to renewing their Export
Approvals every six months, particularly
burdensome. Satisfying the Government
that the construction progress requirement
has been met essentially involves a huge
commitment of senior management time
and technical resources, on an almost
continuous basis, so as to avoid any
disruption to exports once the current
Export Approval expires.
Foreshadowing the Governments
acceptance of the need to ease the
regulatory burden on metal mineral
concentrate exporters, the Director of
Minerals at the Ministry of Energy &
Minerals Resources (ESDM) was
quoted, in the 6 February 2016 edition of
The Jakarta Post, as having said:
Several matters have to be adjusted
to adapt to the current situation. This
adjustment is not only meant for Freeport
but also for numerous other companies
that are having difficulty with smelter

projects.
The recently revised export
requirements for metal minerals, nonmetal minerals and rocks are set out in
Minister of Trade (MoT) Regulation
No. 119 of 2015, dated 23 December
2015, re Export Provisions for Processed
and Refined Mineral Products (MoTR
119/2015) and in Minister of Energy
& Mineral Resources Regulation No.
5 of 2016, dated 5 February 2016, re
Procedures and Requirements for the
Issuance of Recommendations for the
Export of Processed and Refined Minerals
(MoEMRR 5/2016).
The new export requirements, as set
out in MoTR 119/2015 and MoEMRR
5/2016, became effective in February
2016.
COMMENTARY
1. Overview
MoTR 119/2015 sets out the export
requirements that now apply to all
exporters of metal minerals, non-metal
minerals and rocks but not to exporters of
coal.
MoEMRR 5/2016 sets out
certain additional requirements, for
obtaining the all important Export
Approval Recommendation (EA
Recommendation), that now apply only
to exporters of metal minerals in semirefined or concentrate form but not to
exporters of fully refined metal minerals,
non-metal minerals, rocks or coal.
2. Current Export Requirements
Applicable to all Metal Minerals, NonMetal Minerals and Rocks
2.1 Categories of Mining Products:
MoTR 119/2015 differentiates between
three categories of mining products as
follows:
(a) Category 1 Mining Products:

Exportable mining products that have met
the minimum requirements for processing
or refining being;
(i) metal minerals;
(ii) non-metal minerals; and
(iii) ocks (C1 Mining Products);
(b) Category 2 Mining Products:
Exportable metal minerals that may be
temporarily exported, in semi-refined or
concentrate form, until 12 January 2017
(C2 Mining Products); and
(c) Category 3 Mining Products: Nonexportable mining products being:
(i) ore / raw materials;
(ii) mining products that have not met
the minimum requirements for
processing;
(iii) metal minerals that have not met the
minimum requirements for processing
and/or refining;
(iv) non-metal minerals that have not
met the minimum requirements for
processing; and
(v) rocks that have not met the minimum
requirements for processing (C3
Mining Products) (Article 4 of
MoTR 119/2015).
2.2 Permitted Exporters: Export of
C1 Mining Products and C2 Mining
Products may only be carried out by a
company which (i) holds a Operation
Production Mining Business License
(IUP) and a Clear & Clean (C&C)
Certificate or (ii) holds a Special
Operation Production IUP (IUPK) and
a C&C Certificate or (iii) holds a Special
Operation Production IUP for Processing
& Refining or (iv) holds an Industrial
Business License (IUI) or (v) holds an
Industrial Registration (TDI) (Article
5 of MoTR 119/2015).
2.3 No Export Approval/Export

Approval: C1 Mining Products may
be exported after going through the
verification and technical surveying
process (Tracking) but without
obtaining an Export Approval from MoT
(Article 6(1) of MoTR 119/2015).
C2 Mining Products may only be
exported after (i) obtaining an Export
Approval and (ii) Tracking has been
completed (Article 6(2) of MoTR
119/2015).
Exporters of C1 Mining Products and
C2 Mining Products no longer need to
obtain and maintain Registered Exporter
status.
MoT has delegated its authority,
in respect of the issuance of Export
Approvals, to the Director General of
Foreign Trade (DGoFT) (Article 6 (3)
of MoTR 119/2015).
In order to obtain an Export Approval,
would-be exporters of C2 Mining Products
only (C2MP Exporters) must submit a
written application, to DGoFT, along with
the following supporting documents:
(a) copy of the C2MP Exporters
Operation Production IUP, Operation
Production IUPK, Special Operation
Production IUP for Processing &
Refining or IUI;
(b) copy of C2MP Exporters NPWP;
(c) copy of C2MP Exporters TDP; and
(d) original of C2MP Exporters
Export Approval Recommendation
from Director General of Minerals
& Coal (DGoMC) (EA
Recommendation) (Article 7(1) of
MoTR 119/2015).
The EA Recommendation should, as
a minimum, specify the data and remarks
on loading port, type, description of
goods, HS Code and amount of processed
and/or refined mining products, that
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OPINION
will be exported (Article 7(2) of MoTR
119/2015).
DGoFT is meant to issue an Export
Approval not later than five working days
after the date on which the application is
received in good order (Article 7(3) of
MoTR 119/2015).
The Export Approval is valid for six
months from its issuance date and may be
extended/renewed for successive periods
of six months each (Article 7(4) of MoTR
119/2015).
2.4 Tracking: Tracking is carried out:
(a) to ensure that mining products, to be
exported, have met the applicable
minimum processing or refining
requirements;
(b) prior to the loading of mining
products; and
(c) by Surveyors approved by MoT.
The results of Tracking are to be
presented in the form of a Survey (Laporan
Survey or LS) to be used as one of the
supporting documents for customs and
excise purposes as required for applications
for the Export Notification of Goods
(Pemberitahuan Ekspor Barang or PEB)
submitted to the Customs & Excise Office.
The Survey may only be issued if the
quantitive analysis result evidences that
the mining products to be exported have
met the applicable minimum processing or
refining requirements.
Issuance of Surveys takes place
not later than one day after the date of
examination of the mining products to be
loaded for export and each Survey may
only be used for one shipment/ application
for one PEB Number (Article 12 of MoTR
119/2015).
The Surveyor is responsible for
ensuring that the processed or refined
mining products to be exported are in
accordance with the relevant Survey
(Article 16 of MoTR 119/2015).
2.5 Exemptions: MoTR 119/2015 does

not apply to the export of those mining
products being:
(a) exhibits for exhibition purposes,
accompanied by evidence showing
participation in the relevant exhibition;
(b) personal goods of passengers, goods
of transportation crew, cross-border
goods and delivery goods;
(c) art pieces or craft works made of rocks
which have been processed until they
have artistic value and functions as
produced by small or medium scale
enterprises and in a maximum volume
in accordance with annual production
capacity accompanied by a statement
letter from the responsible institution
in the relevant industry or trade field;
(d) industrial products comprised of
material originating from imports and
supported with a statement letter from
a technical institution in the relevant
industry;
(e) industrial products comprised of
material originating from scrap and
supported with a statement letter from
a technical institution in the relevant
industry; and
(f) sample products for mineral testing
in the context of research and
development cooperation and where
the relevant exporter has obtained
prior approval from DGoFT (Articles
20 and 21 of MoTR 119/2015).
3. Current Additional Export
Requirements that Apply to C2MP
Exporters Only
3.1 EA Recommendation Applications:
In order to obtain EA Recommendations,
C2MP Exporters must submit an EA
Recommendation application (EAR
Application) to DGoMC on behalf of
MoEMR (Article 3 (1) of MoEMRR 5/2016).
EAR Applications must be
accompanied by the following supporting
documents:
(a) statement letter on the legality of

submitted documents;
(b) copy of C&C Certificate in the case of
holders of Production Operation IUPs;
(c) Certificate/Report of Analysis
showing that the relevant C2 Mining
Products have met the minimum
refining requirement, issued within
the last one month by an independent
Surveyor;
(d) copies of C2MP Exporters payment
receipts for non-tax state revenue due
to the State for the last one year;
(e) copies of Cooperation Agreements
with the holders of (i) Metal Mineral
Production Operation IUPs that have
obtained C&C Certificates and/or (ii)
Contracts of Work for Metal Minerals
and/or (iii) Special Production
Operation IUPs for Processing &
Refining;
(f) Construction Plan for Domestic
Refining Facility (DR Facility) that
has been approved by DGoMC, on
behalf of MoEMR, and includes, among
other things, the construction schedule
for the relevant DR Facility including
technologies to be used, investment
values and production capacity per year;
(g) Construction Costs Report audited by
a Public Accountant registered at the
Ministry of Finance (MoF) in the
case of applicants which have realized
their proposed construction cost
for the ongoing construction of the
relevant DR Facility;
(h) Work Plan and Budget for the current
year that has been approved by the
relevant government authority;
(i) evidence of deposit of seriousness
guarantee for construction of DR
Facility (SG Deposit);
(j) evidence of environmental
management performance for holders
of Production Operation IUPs for
Metal Minerals and Contracts of Work
for Metal Minerals being:
(i) copy of a valid layout point

determination issued by the
authorized institution that has been
legalized;
(ii) test results of standard compliance
of water and air quality from a
party with a laboratory that has
been accredited in the current year;
(iii) copy of approval letter re
Reclamation Plan for five years
that has been legalized; and
(iv) copy of receipt for deposit re
Guarantee of Reclamation for
the present year that has been
legalized;
(k) Evidence of environmental
management performance for holders
of Special Production Operation IUPs
for Processing & Refining being:
(i) copy of a valid layout point
determination issued by the authorized
institution and that has been legalized;
and
(ii) test results of standard compliance of
water and air quality from a party with
a laboratory that has been accredited
in the current year; and
(l) Export Plan which includes details
of, among other things, the type and
quantity of the relevant C2 Mining
Products, the applicable tariff post/HS,
port of loading, port of discharge and
country of destination (Article 5 of
MoEMRR 5/2016).
EA Recommendations are valid for a
period of six months and may be extended/
renewed for successive periods of six
months each (Article 8(1) of MoEMRR
5/2016).
3.2 Extension of EA Recommendations:
Applications to extend EA
Recommendations (EAR Extension
Applications) must be submitted to
DGoMC, on behalf of MoEMR, not
earlier than forty five calendar days
and not later than thirty calendar days
before the existing EA Recommendation

expires (Article 8(2) of MoEMRR
5/2016).
EAR Extension Applications are to be
accompanied by the following supporting
documents of the relevant C2MP Exporter:
(a) copy of existing Export Approval;
(b) evidence of the realization of
construction of DR Facility during the
previous six months and Construction
Plan for DR Facility for the next six
months;
(c) cumulative construction cost of DR
Facility during the last six month
period audited by a Public Accountant
registered at MoF;
(d) test results of standard compliance
of water quality by a party with a
laboratory that has been accredited in
the past six months;
(e) copies of payment receipts for non-tax
state revenue due to the State for the
past six months; and
(f) Export Plan which includes details
of, among other things, the type
and quantity of C2 Mining Products
that have met the minimum refining
requirements for metal minerals or
anode slime, tariff post/HS, port of
loading, port of discharge and country
of destination (Article 9 of MoEMRR
5/2016).
In evaluating EAR Extension
Applications, DGoMC takes into account:
(a) whether or not the type and quality
of the relevant C2 Mining Products
have met the minimum refining
requirements for C2 Mining Products;
and
(b) the certain permitted amount for
export having regard to the following
considerations:
(i) environmental management
performance;
(ii) reserve amount which is the
residual reserve calculated on
the basis of the mined reserve

as reduced by the relevant DR
Facilitys needs;
(iii) input capacity of the relevant DR
Facility; and
(iv) progress of construction of the
relevant DR Facility (Article 10(1)
of MoEMRR 5/2016).
The relevant percentage of DR
Facility construction progress required
for approval of an EAR Application is
as follows:
(a) Stage I - the actual construction
progress must amount to 7.5%
including placement of GS Deposit;
(b) Stage II - the actual construction
progress must be more than 7.5%
but less than or equal to 30%
including placement of GS Deposit;
and
(c) Stage III - the actual construction
progress must be more than 30%
including placement of GS Deposit
(Article 25 of MoEMRR 5/2016).
Approval of an EAR Extension
Application requires that the progress
of DR Facility construction achieved
during the period covered by the
previous EA Recommendation be
at least 60% of the target calculated
cumulatively provided that, in the
event the progress target has not been
achieved, then the EAR Extension
will still be issued if the construction
progress of the relevant DR Facility
is similar to the progress for the
previous period (Article 10(2) and
10(3) of MoEMRR 5/2016).
3.3 Construction Plans for DR Facilities:
C2MP Exporters must submit to and
have approved by DGoMC, on behalf of
MoEMR, the Construction Plans for their
DR Facilities (Article 11 (1) of MoEMRR
5/2016).
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OPINION
In the event that there is any
proposed change in the Construction
Plan for a DR Facility, which includes
any change in the capacity, product,
technology, construction schedule or
investment value, then the relevant
C2MP Exporter may submit, for
DGoMC approval, an amendment of
the Construction Plan (Article 13 of
MoEMRR 5/2016).
In the event that there is a change

in the investment value of actual or
proposed DR Facility construction, due

to a change in the Construction Plan,
then the relevant SG Deposit must be
adjusted in accordance with the actual
investment value as follows:
(a) if the actual investment value is larger
than the proposed investment value, the
applicant must make up the deficiency
in the SG Deposit after the amendment
of the Construction Plan is approved; or
(b) if the actual investment value is smaller
than the proposed investment value, the
applicant may submit an application
for reimbursement of the excess SG
Deposit after the amendment of the
Construction Plan is approved (Article
21 of MoEMRR 5/2016).
CA|Boim
3.4 Guarantees of Seriousness: C2MP

Exporters must also provide guarantees in
the form of SG Deposits.
SG Deposits are to be paid into a joint
account with the State Owned Enterprise
Bank in Indonesia.
Provision of a SG Deposit does not

eliminate the obligation of the relevant
C2MP Exporter to actually carry out the
obligation to increase added value through
construction of its proposed DR Facility
The required SG Deposit amount is
calculated as being:
(a) 5% of the value of the relevant DR Facility
construction investment to date; and
(b) 5% of the remaining value of the
relevant DR Facility construction
investment that is still to be carried out
C2MP Exporters may apply for

reimbursement of their SG Deposits
(SGD Reimbursement) at the time they
submit their EAR Extension Applications.
SGD Reimbursement is only
allowed if the relevant C2MP Exporter
has achieved DR Facility construction
progress of at least 60%.
C2MP Exporters have two
opportunities, of six months each, to
achieve the minimum DR Facility
construction progress target of at least
60% and thereby qualify for SGD
Reimbursement (Article 19 of MoEMRR
5/2016).
The evaluation of SGD
Reimbursement applications is
calculated based on the construction
progress of the relevant DR Facility as
follows:
(a) If the percentage of DR Facility
construction progress is less than
70%, then the amount of SGD
Reimbursement is calculated based on
the following formula:
P = 5% x (TI SI) - A
P = amount of SGD Reimbursement
TI= total Investment
SI= remaining investment which has not
been realized
A= acccumulation of previous
reimbursements
(b) If the percentage of DR Facility
construction progress is greater than
or equal to 70% percent, then all of
the SG Deposit may be reimbursed
4. Discussion and Evaluation of the
Major Changes
4.1 Immediate Implications
4.1.1 No Registered Exporter
Requirement: Doing away with the
Registered Exporter requirement, in
respect of metal minerals, non-metal
minerals and rocks, will be welcomed by
and may be of some minor significance to

exporters of fully processed and refined
metal minerals, exporters of non-metal
minerals and exporters of rocks but is
unlikely to make any material difference
to these exporters overall cost of doing
business, spur any increase in the level
of business activity of these exporters
or encourage new entrants to the local
mining industry.
In the case, however, of exporters
of metal minerals in concentrate form
(i.e., C2MP Exporters) and as should
be readily apparent from 3 above, the
continuing conditions on their right to
export are still so burdensome that the
fact they no longer have to obtain or
maintain Registered Exporter status will
surely pass almost unnoticed.
4.1.2 Reduced Construction Progress
Requirement: Notwithstanding
4.1.1 above, reducing the DR Facility
construction progress requirement does
have the potential to be very significant
because C2MP Exporters are no longer
required to establish that they have
achieved not less than 60% of the target
progress on a cumulative basis during the
period covered by the most recent Export
Approval. On the writers interpretation
of the reduced requirement, it will be
sufficient to obtain an Export Approval
for the next six months if the relevant
C2MP Exporter has achieved, in the
current period, substantially the same
construction progress as in the period
immediately prior to the current period,
regardless of how small that construction
progress may have been during the
previous period. Indeed, the use of the
word similar, in specifying the reduced
construction progress requirement,
arguably contemplates that construction
progress achieved, in the current period,
which is actually less than the construction
progress achieved during the previous
period may still be sufficient to obtain an

Export Approval for the next six months.
The use of the word similar essentially
introduces a degree of vagueness/an
element of flexibility in evaluating DR
Facility construction progress for the
purposes of determining whether or not to
issue an EA Recommendation for Export
Approval extension/renewal. It also seems
to be the case that a particular C2MP
Exporter can fall short of the basic 60%
target cumulative progress requirement
in multiple periods without necessarily
jeopardizing the extension/renewal of its
Export Approval.
The significance of the reduced
construction progress requirement rests
in the fact that, for the first time, ESDM
is recognizing the reality of DR Facility
construction; namely, (i) it is likely to
often be a very slow exercise with only
quite modest incremental progress being
made in any six month period and (ii) six
months is an extremely short time over
which to measure construction progress
given the size and technical complexity
of DR Facility projects. The smooth
and continuous construction progress
implicitly assumed by the original
construction progress requirement was
always unrealistic and showed a woeful
lack of understanding, on the part of
ESDM, as to how big construction
projects take place in the real world.
As such, reducing the construction
progress requirement is to be welcomed
as introducing a much needed element
of reality into the EA Recommendation/
Export Approval process.
4.1.3 Changing Construction Plans
and SG Deposit Variation: For the first
time, ESDM is now willing to explicitly
recognize that, owing to the medium to
long term nature of most DR Facility
projects, it is inevitable that Construction
Plans will often change as a particular
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OPINION
DR Facility project progresses and the
relevant C2MP Exporter and its technical
advisers rethink different aspects of
the DR Facility project in order to take
into account any number of extraneous
factors such as technology changes and
changes in government policy. Allowing/
requiring individual C2MP Exporters to
adjust their Construction Plans over time
and, more importantly, adjust their SG
Deposits, including by obtaining a SGD
Reimbursement in those instances where
the total investment cost will fall as a
result of the change in Construction Plans,
introduces a valuable element of flexibility
as well as, in some cases, freeing up funds
that may be used to complete the relevant
DR Facility.
4.1.4 Easier Reimbursement of
SG Deposits: Allowing 100% SGD
Reimbursement when 70% of DR Facility
construction has been achieved also has
the potential to be quite significant given
the size of the GS Deposits in the case of
large GR Facility projects where the total
investment cost may run into hundreds
of millions of dollars if not more. At
a time when all C2MP Exporters are
suffering, as a result of greatly reduced
metal mineral prices and the consequent
increased wariness of financiers and
investors, having large amounts of capital
tied up in SG Deposits is clearly highly
undesirable.
4.2 Longer Term Implications
The longer term implications of
the recent relaxation of mineral export
requirements depends on whether or
not thats it or is merely the start of
something bigger, especially in the case of
metal minerals.
Doing away with the Registered
Exporter requirement, in respect of
metal minerals, non-metal minerals
and rocks, may simply be part of the
current Governments ongoing policy

reform program which has repeatedly
highlighted the need to reduce the
amount of red tape that businesses
have to deal with and in an endeavor
to stimulate greater economic activity.
In this regard, the Registered Exporter
requirement is rightly to be seen as
part of the excessive red tape facing
mineral producers and exporters.
However, if the dropping of the
Registered Exporter requirement is
really no more than just an effort to
reduce excessive red tape, it is very
surprising that the Registered Exporter
requirement has only been dropped in
minerals and rocks but not coal and
when Indonesia has vastly more coal
producers and coal exporters than it
does producers and exporters of metal
minerals, non-metal minerals and
rocks. From a red tape elimination
perspective only then, it would have
actually made much more sense to
eliminate the Registered Exporter
requirement in the case of metal
minerals, non-metal minerals, rocks and
coal or even just in respect of coal but
not in respect of metal minerals, nonmetal minerals and rocks.
Various explanations are possible
as to why the Registered Exporter
requirement has only been dropped in
minerals and rocks but not coal. These
possible explanations include that
the Government is more concerned
about reducing illegal coal exports and
protecting its revenue from coal mining
than it is about reducing the excessive
red tape facing producers and exporters
in the local coal mining industry. It is
also possible that dropping the Registered
Exporter requirement in respect of
metal minerals, non-metal minerals and
rocks only is being undertaken on an
experimental basis in order to see what

the consequences, if any, are for illegal
exports and Government revenue. Should
no material adverse consequences be
detected, then the Registered Exporter
requirement may eventually be dropped
for coal exporters as well.
A more interesting explanation,
however, is that dropping the Registered
Exporter requirement in respect of metal
minerals, non-metal minerals and rocks
only is the first, tentative step by the
Government in allowing the resumption of
exports of C3 Mining Products, including
unprocessed metal minerals, at least
on a temporary basis. There have been
increasing indications, in statements by
MoEMR and other Government officials
over the past couple of months, that the
export ban on unprocessed metal minerals
is, once again, being reconsidered and that,
at a minimum, the January 2017 deadline
for full domestic processing and refining
of all metal minerals will be pushed out
to a later date. Given the political capital
that has been invested in the Export Ban,
it would be entirely understandable if the
Government is moving very cautiously to
relax the Export Ban even on a temporary
basis only. As such, initially dropping
the Registered Exporter requirement in
respect of C1 Mineral Products only may
be an early tangible sign of this cautious
approach being implemented.
Reducing the DR Facility
construction progress requirement for
EA Recommendations, introducing
greater flexibility into the changing of
Construction Plans and allowing the
easier withdrawal of GS Deposits in
the case of C2MP Exporters, certainly
goes well beyond the scope of a limited
reduction of red tape exercise only. The
Government is, very arguably, showing
it understands the short to medium term
impracticality of the requirement to build
DR Facilities and, accordingly, looking
for ways to ease the overall burden of

this requirement on C2MP Exporters.
While it is unlikely that the Government
will be willing to drop, altogether, the
DP&R Obligation or the Export Ban
on C3 Mining Products, full domestic
processing & refining of all metal minerals
is increasingly looking like a longer term
aspirational objective only for the
Government rather than something that
the Government expects to be capable of
realization in even the medium term and
on a large scale.
Perhaps the best evidence of the
Governments changed thinking about
the achievability, in even the medium
term, of full implementation of the
DP&R Obligation is to be found in the
draft of the New Mining Law prepared
by ESDM. This draft of the New Mining
Law provides for, among other things,
(i) CoW holders to have a further five
years, from when the New Mining Law
comes into effect, to carry out the DP&R
Obligation and (ii) C2MP Exporters to
continue to be able to export concentrate
for a further five years, from when the
New Mining Law comes into effect. This
is the same as giving C2MP Exporters
and, possibly, exporters of C3 Mining
Products as well a further five years to
complete the construction of their DR
Facilities. Assuming the New Mining Law
is passed by the Indonesian Parliament
(DPR) in 2016 and in substantially the
same form as the existing ESDM draft,
this will effectively push out the deadline
for full implementation of the DP&R
Obligation until late 2021 at the earliest.
ESDM clearly believes that the DPR is
on side with regard to its draft of the
New Mining Law and the contemplated
relaxation of full implementation of the
DP&R Obligation as evidenced by the
following statement from MoEMR, made
in the context of the need to recognize the
hurdles facing smelter development and
quoted in the 17 February edition of The

Jakarta Post:
Informally, the House of
Representatives Commission VII [which
oversees mining and energy] has agreed
to our proposal to amend the law.
The reason for this change in
Government/ESDM thinking is not hard
to understand. As the projections of the
size of the Governments likely revenue
shortfall in 2016 and beyond grow ever
larger, the need for the Government to find
additional sources of revenue, including
from the mining industry, becomes ever
more pressing. It is entirely understandable
then that the continuing loss of substantial
revenues from the Export Ban on C3
Mining Products has simply become no
longer acceptable to the Government.
Put simply, the full enforcement of the
Export Ban and insistence upon full
implementation of the DP&R Obligation
has increasingly come to be seen by the
Government as a luxury it can no longer
afford. Readers interested in learning more
about the Governments revenue problems
and its expectation that the mining
industry will make up a large portion of
the shortfall are referred to the writers
earlier article Mining Policy Reform Is
GoI Willing to Pay the Price for More
Revenue from the Mining Industry?, Coal
Asia Magazine, April May 2015.
SUMMARY AND CONCLUSIONS
Coal producers will, understandably,
be disappointed that the Registered
Exporter requirement continues to apply
to them.
C2MP Exporters, however, have good
reason to be very pleased by the relaxation
of the additional export requirements
applicable to C2 Mineral Products and, in
particular, the easing of the DR Facility
construction progress requirement for
Export Approval extension/renewal.
Even producers/would-be exporters
of C3 Mining Products also have some

reason to hope that at least partial relief
from the Export Ban may be finally in
sight.
The recent changes in mineral export
requirements are, most likely, not really
about reducing red tape at all but, rather,
about relaxing the DP&R Obligation and
the Export Ban. This is something the
Government has clearly been thinking
about, on and off, for some time and
despite repeated denials to the contrary.
Given the further five years to be
allowed to complete construction of DR
Facilities, as envisaged by ESDMs draft
New Mining Law, it seems likely we are
now seeing the first tentative steps by the
Government to make full implementation
of the DP&R Obligation a long term
aspirational objective only and certainly
not something that it is going to be the
Governments dominant priority in even
the medium term. For better or for worse,
the Governments dominant priority is
now clearly revenue raising.
The great pity, of course, is that it
has taken so long for economic reality to
finally gain some influence over policy
making in respect of the local mining
industry.
[This article has been contributed
by Bill Sullivan, Licensed Foreign
Advocate with Christian Teo & Partners.
Christian Teo & Partners is a Jakarta
based, Indonesian law firm and a leader
in Indonesian mining law and regulatory
practice. Christian Teo & Partners
operates in association with international
law firm Stephenson Harwood LLP which
has nine offices across Asia, Europe and
the Middle East: Beijing, Dubai, Hong
Kong, London, Paris, Piraeus, Seoul,
Shanghai and Singapore. Readers may
contact the author at email: bsullivan@
cteolaw.com; office: 62 21 5150280;
mobile: 62 815 85060978]
89
CA|Boim
Vessel Earnings Move To Year-to-Date Highs

Freight Market Overview
The benchmark Baltic Exchange Dry Index rose from an all-time
low of 290 points in early February to 597 points on 14 April, as
average vessel earnings across the four dry bulk carrier sizes reached
year-to-date highs. Even though this marks the first time in 2016 that
the BDI has risen above the year-ago level, vessel earnings remain
depressed by historical standards. The 1q16 average for the BDI of
358 points was the lowest quarterly average since the BDI inception
in 1985, and remains short of last years annual average of 718.
Average earnings for 180k dwt Capesizes 5 TC average

reached climbed to the highest level of 2016 at $6,184/day, a
sudden gain from $2,518/day just two weeks earlier. The rising
spot market has fed through to the period market with the Cape
one-year period rate climbing to $6,500/day, up $1,250/day
month-on-month, although this compares with a year-ago level of
$10,000/day.
At $5,577/day, Panamax average earnings also stand at a
2016-high, chiefly thanks to the Panamax Atlantic round voyage
climbing to a seven-month high of $7,027/

day from $4,173/day at the beginning of
March. The Atlantic round voyage is now
at a premium of over $2,300/day to its
Pacific equivalent.
Average earnings for Supramax
vessels of 52,000 dwt have climbed to
$5,374/day. As with the Panamax market,
rate gains have been most apparent in the
Atlantic basin. The Indonesia-East Coast
India S8 route assessed by the Baltic
Exchange has risen to $4,497/day, another
2016-high.
Dry Bulk Trade Developments
Trade data show iron ore trade
volumes were already strong before an
upturn in chartering supported the rise in
Capes at the start of April. Australian iron
ore exports have demonstrated growth
in the first two months of the year while
exports from Australias largest iron
ore terminal of Port Hedland climbed
to a monthly all-time high of 39.5 Mt
in March, up 8% year-on-year. Iron ore
export data from the Brazilian government
indicate a substantial gain in this years
shipments. The 1q16 total of 85.3 Mt is up
6.0 Mt on the 1q15.
Chinese iron ore imports climbed
to a three-month high of 85.8 Mt in
March. Although stockpiles of iron ore
at 42 Chinese ports increased to their
highest level in a year at over 100 Mt,
Chinese crude steel production in March
rose on an annual basis for the first time
since December 2014, climbing almost
3% year-on-year to 70.7 Mt to the
third-highest monthly total on record.
Domestic steel prices have jumped in
recent months with the World Steel
Dynamics Chinese domestic price for
hot rolled band surging to a twelvemonth high of $352/t in mid-April.
This over $100/t higher than the midFebruary price.
Panamax and Supramax demand

continues to be driven by strong South
American grain exports, with a record 2q
in prospect. Brazils exports of soya and
corn combined surged to a record 11.9 Mt
in March, up 56% year-on-year, as soya
shipments rose to an eight-month high of
9.9 Mt.
However, the boost to earnings from
the grain trade continues to be tempered
by coal trade developments. Panamax
demand in the Atlantic has been impacted
by the ongoing falls in US coal exports
(excluding Canadian cargoes), which
declined by a third to 3.9 Mt in February,
as steam coal exports slumped to a sixyear low. UK coal imports fell 2.2 Mt
year-on-year to 1.0 Mt in February, the
second lowest month in the last 16 years.
After three strong months for exports,
Colombian steam coal exports fell in
March, although shipments to Asia rose
to a near four-year high of 0.8 Mt on
increased exports to India, a significant
boost to tonne-mile demand.
Geared vessel demand in the Pacific
has suffered from the Malaysian bauxite
mining ban in place since January. China
imported 24 Mt of bauxite from Malaysia
last year, but only stockpiled ore is
currently being shipped. Furthermore,
the start of 2016 saw a slowing in the
previously strong global steel trade with
combined shipments from China, Japan,
South Korea, the EU and Brazil in the
1q16 estimated to be the lowest quarterly
total since the 1q15.
Fleet Supply Developments
Net fleet growth across the dry bulk
fleet slowed to the lowest level since
December 2015 in March at under 0.1
Mdwt as demolition activity countered
newbuilding additions. Last month
also saw the second-highest month for
Capesize deletions on record with 15
vessels (2.7 Mdwt) scrapped, with an

additional 19 vessels yet to arrive at the
demolition yard. A further 16 Panamax
vessels (1.1 Mdwt) were removed from
the fleet last month, continuing the robust
pace seen since December.
Net fleet growth was strongest in the
Handymax/Supramax fleet of 40,00064,999 dwt, primarily as a result of the
high arrivals of new Ultramax designs of
60,000-64,999 dwt. Consequently, the
Handymax/Supramax fleet has expanded
by 1.7% since the start of 2016, with
Handysize net fleet growth at 1.1%. The
Panamax fleet has witnessed zero growth,
with Capesize net expansion at 0.6%.
Market Outlook Freight Futures
The rise in the physical freight market
has been matched by increases in Capesize
and Panamax freight futures (FFA). The
April-December 2016 FFA contract price
for the Capesize (172k dwt) was trading at
around $7,400/day on 14 April, up from
around $5,600/day on 17 March when
Capesize physical spot earnings were at
an all-time low. There has been a smaller
increase in the equivalent contract for the
Panamax 4 TC average which has risen to
near $5,600/day.
This report is prepared by Simpson
Spence & Young (SSY) Consultancy and
Research. Whilst care has been taken to
ensure that the information contained in
this report is accurate, it is supplied without
guarantee. SSY Consultancy & Research
Ltd can accept no responsibility for any
errors or omissions or any consequences
arising therefrom. The views expressed are
those of SSY Consultancy & Research Ltd
and do not necessarily reflect the views
of any other associated company. For
further information/inquires, please contact
Michael Drachmann in SSY Indonesia on
drachmann@ssyjkt.com
91
Apr-10
$0
Newcastle-Qingdao
Queensland-Japan
Richards Bay-Qingdao
Apr-16
Mar-16
Feb-16
Jan-16
Indonesia-Qingdao
E. Kalimantan-Krishnapatnam
Newcastle-Qingdao
Dec-15
Nov-15
Oct-15
Sep-15
Aug-15
Jul-15
Jun-15
May-15
Apr-15
Mar-15
Feb-15
Jan-15
Dec-14
Nov-14
Oct-14
Sep-14
Aug-14
Jul-14
Jun-14
May-14
Apr-14
Mar-14
Feb-14
Jan-14
Dec-13
Nov-13
Oct-13
Sep-13
Aug-13
Jul-13
Jun-13
May-13
Apr-13
Mar-13
Feb-13
Jan-13
Dec-12
Nov-12
Oct-12
Sep-12
Aug-12
Jul-12
Jun-12
May-12
Apr-12
Mar-12
Feb-12
Jan-12
Dec-11
Nov-11
Oct-11
Sep-11
Aug-11
Jul-11
Jun-11
May-11
Apr-11
Mar-11
Feb-11
Jan-11
Dec-10
Nov-10
Oct-10
Sep-10
Aug-10
Jul-10
Jun-10
May-10
USD/t
Apr-16
Mar-16
Feb-16
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
Aug-15
Jul-15
Jun-15
May-15
Apr-15
Mar-15
Feb-15
Jan-15
Dec-14
Nov-14
Oct-14
Sep-14
Aug-14
Jul-14
Jun-14
May-14
Apr-14
Mar-14
Feb-14
Jan-14
Dec-13
Nov-13
Oct-13
Sep-13
Aug-13
Jul-13
Jun-13
May-13
Apr-13
Mar-13
Feb-13
Jan-13
Dec-12
Nov-12
Oct-12
Sep-12
Aug-12
Jul-12
Jun-12
May-12
Apr-12
Mar-12
Feb-12
Jan-12
Dec-11
Nov-11
Oct-11
Sep-11
Aug-11
Jul-11
Jun-11
May-11
Apr-11
Mar-11
Feb-11
Jan-11
Dec-10
Nov-10
Oct-10
Sep-10
Aug-10
Jul-10
Jun-10
May-10
USD/t
FREIGHT
Panamax coal spot freight rates

$30
$25
$20
$15
$10
$5
$0
Sources: SSY
Capesize coal spot freight rates
$30
$25
$20
$15
$10
$5
Sources: SSY
93
[ EVENT ]
The 6th Edition of

CON-MINE 2016
GEM Indonesia, a subsidiary of Gemisen Group organizes
the 6th Indonesia International Construction and Mining
Machinery, Equipment, Vehicle, Services and Technology
Exhibition (Con-Mine) in JIXexpo Kemayoran, Jakarta.
The Con-Mine expo held on March 29 April 1 is annual
business-to-business international trade exhibition, which
specialized in bus, coach, truck, heavy-duty vehicle,
equipment and components in Indonesia.
Photos: Mudasir
zes
g
gy
al
ch
95
[ WEATHER ]
Flood forecast for May 2016

The heavy rains that fell across the archipelago throughout
last year affected the operations of many coal miners. There are
worries that Indonesia will continue having an extended wet
season this year.
In the following four pages, we publish maps provided
by the governments Meteorological, Climatological and
Geophysical Agency (BMKG) highlighting the areas in coal

producing regions East Kalimantan, South Kalimantan and
southern Sumatra that face flood risks in May 2016.
Please check if your mining areas are among those prone to
floods during the period.
Editor
Flood-prone areas in South Kalimantan
KALIMANTAN
Muara Uya
SULAWESI
South
Kalimantan
PAPUA
JAVA
Jaro
EAST
KALIMANTAN
Jaro
LEGEND
High flood risk
Medium flood risk
Low flood risk
No flood risk
CENTRAL
KALIMANTAN
Murung Pudak
Upau
Tanjung
Juai
Tanta
Banua Lawas
Amuntai Selatan
Danau Panggang
Babirik
Daha Utara
Daha Selatan
Halong
Amuntai Utara
Amuntai
Pandawan
Barabai
Simpur
Kuripan
Bakarangan
Tapin Tengah
Kandangan
Rantau
Marabahan
Simpang Empat
Astmbul
Pandawan
Sungai Durian
Hampang
Piani
Kelumpang Hulu
Simpang Empat
Pengaron
Sei Pinang
BANJARMASIN
Martapura
Banjarbaru
Karang Intan
Kotabaru
Kusan Hulu
Cempaka
Araino
Kintap
Pelaihari
Batu Licin
SULAWESI SEA
SUMATRA
Satui
Kusan Hilir
Palaihari
Panyipatan
Sources: BMKG
Jorong
Indonesian rainfall forecasts
0 - 20 mm
21 - 50 mm
51 - 100 mm
101 - 150 mm
151 - 200 mm
201 - 300 mm
301 - 400 mm
401 - 500 mm
> 500 mm
Low
Medium
High
Very High
Flood-prone areas in Central Kalimantan
EAST
KALIMANTAN
WEST
KALIMANTAN
Laung Tuhup
Puruk Cahu
Lahei
Muara Teweh
Montalat
Mentaya Hulu
Katingan Tengah
Timpah
Dusun Utara
Pulau Malan
Parenggean
Kota Besi
Gunung Pure
Gunung Bintang awai

Dusun Selatan
Buntok
Pematang Karau
Katingan Hilir
Tasik Payawan
Teweh Timur
Teweh Tengah
Karau Kuala
PALANGKARAYA
Jenamas
Sampit
Pangkalan Bun
LEGEND
High flood risk
Medium flood risk
Low flood risk
No flood risk
Kualakapuas
SOUTH
KALIMANTAN
JAVA SEA
97
[ WEATHER ]
Flood-prone areas in East Kalimantan
Nunukan
SUMATRA
KALIMANTAN SULAWESI
PAPUA
JAVA
Tarakan
Tanjung Selor
MAL AYSIA
Tanjungredeb
Long
Bangun
Long
Iram
Bontang Utara
Bontang Selatan
Barong Tongkok
Tenggarong
Samarinda Ilir
Samarinda Ulu
SAMARINDA
CENTRAL
KALIMANTAN
Balikpapan Utara
Bong Kali
Balikpapan
LEGEND
Tanah Grogot
High flood risk

Medium flood risk
Low flood risk
No flood risk
SULAWESI SEA
East
Kalimantan
Flood-prone areas in Southern part of Sumatra
RIAU
Kualatungkal
Tungkal Ulu
Tebo Tengah
Muara Sebo
Muarabungo
JAMBI
Mersam
Gunung Kerinci
Muaratembes
Air Hangat
Sungaipenuh
Ranaupanjang
Muara Bulian
Pangkalpinang
Sitinjau Laut
Limun
Batang Asai
Pelawan Singkut
Babat Toman
PALEMBANG
Sungai Gerong
Lebong Selatan
Lubuklinggau
Talang Ubi
Curup
BENGKULU
Prabumulia
Kayuagung
Lahat
Baturaja
Martapura
Gedung Tataan
BANDAR
LAMPUNG
Wonosobo
Palas
Penengahan
SUMATRA
KALIMANTAN
SULAWESI
South
Sumatra
JAVA
LEGEND
PAPUA
High flood risk

Medium flood risk
Low flood risk
No flood risk
99
[ EVENT
COALPRICEREFERENCE
]
]
HBA coal reference price up 1.36%

The government set its coal reference price (HBA) for April
2016 at US$52.32 per ton FOB, 1.36 percent higher than $51.62
per ton set in March.
Coal reference price is based on coal with CV (GAR) of 6,322
kcal/kg. It is calculated based on the monthly average of four
international coal indices: Indonesian coal index/ ICI 1, Platts-1,
New Castle Export Index, and Newcastle Global Coal Index.

Director General of Mineral and Coal at the Ministry of
Energy and Mineral Resources Bambang Gatot Ariyono said
that the increase in the HBA in the past couple of months may be
temporary as the price of the commodity is expected to remain
under pressure this year.
Coal reference price April 2016

Specification
No
Brand
CV
(kcal/kg,
GAR)
Total
Moisture
(%ar)
Total
Sulphur
(%)
Ash (%)
1
2
3
4
5
6
7
8
Gunung Bayan I
Prima Coal
Pinang 6150
Indominco IM_East
Melawan Coal
Envirocoal
Jorong J-1
Ecocoal
7,000
6,700
6,200
5,700
5,400
5,000
4,400
4,200
10.0
12.0
14.5
17.5
22.5
26.0
32.0
35.0
1.0
0.6
0.6
1.6
0.4
0.1
0.3
0.2
15.0
5.0
5.5
4.8
5.0
1.2
4.2
3.9
Source: Directorate General of Mineral, Coal and Geothermal at The Ministry of Energy and Mineral Resources
Feb
2016
Mar
2016
Apr
2016
54.36
56.42
51.01
41.93
42.24
40.71
32.73
30.23
55.11
57.13
51.65
42.50
42.74
41.16
33.09
30.55
55.87
57.84
52.29
43.06
43.25
41.60
33.45
30.87
Other coal prices for evaluation in April 2016

No
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
Trademark/Brand trade
Other coal
Gunung Bayan II
Marunda Thermal Coal
Trubaindo HCV_HS
Medco Bara 6500
Trubaindo HCV_LS
AGM Waruba Coal
Pinang 6000 NAR
ArutminSatui 10
ArutminSenakin
Arutmin A6250
Mandiri A
Wahana Coal
Medco Bara 6200
IndomincoIM_West / 6500
TAJ Coal
Mandiri B
Trubaindo MCV_LS
SKB Coal
Baramarta Coal
Arutmin A6100
Insani Coal
BCS Coal
IndomincoIM_West / 6350
Bangun Coal
Pinang 6000
Indominco IMM_MCVHS
Multi Coal Low
Multi Coal Middle
Pinang 5900
Arutmin A5900
Multi Coal High
KCM Coal
TSA coal
Tanito Coal
Mahakam Coal
Ebony High Sulphur
Pinang 5700
IBP 5500
Arutmin A5700
BSS Coal
LannaHarita Coal
Pinang 5500
Mahoni Medium Sulphur
Mahoni
Mahakam Coal B
Mahoni B
Kideco Coal
Agathis
LannaHarita Coal
IBP 5000
Sungkai Medium Sulphur
Sungkai
Sungkai High Sulphur
Arutmin A5000
AGM Warute Coal
IBP 4600
Bas Gumay Coal
IBP 4400
IBP 4200
PIC Coal
BIB 4000
Borneo BIB
AGM Warutas Coal
PKN 3500
BMPclenco32
LIM 3010
LIM 3000
Typical qualities
CV (kcal/ kg, GAR) TM (%ar) TS (%) Ash (%)
7,000
6,600
6,553
6,500
6,423
5,313
6,300
6,300
6,250
6,250
6,210
6,200
6,200
6,171
6,200
6,148
6,143
6,130
6,112
6,100
6,050
5,915
6,029
6,072
6,000
5,970
5,950
5,900
5,900
5,900
5,765
5,730
5,700
5,700
5,700
5,700
5,700
5,500
5,700
5,520
5,500
5,500
5,500
5,500
5,400
5,300
5,125
5,100
5,000
5,000
5,000
5,000
5,000
5,000
4,350
4,600
4,400
4,400
4,200
4,200
4,000
3,800
3,800
3,520
3,200
3,010
2,995
12.00
11.00
12.00
10.00
11.50
23.00
14.00
11.00
11.00
10.00
10.00
12.00
10.00
15.50
10.00
10.00
14.00
9.00
9.50
11.50
19.00
15.10
15.50
10.02
16.00
15.50
16.00
16.00
19.00
12.00
16.00
10.50
18.00
17.50
17.50
18.00
19.00
20.00
11.00
10.00
22.00
21.00
20.00
20.00
23.00
22.50
24.50
25.00
27.00
25.00
26.00
26.00
26.00
22.40
33.00
28.00
35.00
30.00
32.00
33.00
38.00
41.00
40.00
43.40
48.00
47.50
50.10
2.00
0.50
1.69
3.28
0.71
0.24
0.60
1.00
1.00
1.20
0.70
0.90
4.00
0.76
1.00
1.26
0.76
2.20
0.95
1.00
0.15
0.56
0.71
2.20
0.60
1.65
1.00
2.00
0.90
0.90
3.20
0.90
2.00
1.00
1.00
1.75
0.50
1.00
0.80
0.45
1.00
0.40
1.30
0.80
1.50
0.80
0.10
0.82
1.20
1.00
1.30
0.90
1.70
0.54
0.40
0.50
0.50
0.50
0.50
1.75
0.50
0.40
0.15
0.15
0.50
0.60
0.60
10.00
10.00
4.21
9.38
4.76
4.00
5.50
10.00
12.00
12.00
4.65
10.00
12.00
5.22
14.00
4.70
5.20
17.00
13.00
12.50
3.20
9.40
5.22
14.91
5.00
5.05
7.00
7.00
4.50
13.00
7.00
20.50
8.00
8.50
8.50
4.70
5.00
7.00
14.00
15.50
6.00
5.50
4.70
4.70
8.00
4.60
2.00
4.50
6.00
7.00
4.50
4.50
4.50
8.90
4.00
7.00
4.96
7.00
6.00
6.00
6.00
5.00
5.23
3.40
5.00
5.30
5.30
Feb 2016
Mar 2016
Apr 2016
51.13
54.63
51.24
43.54
54.22
42.46
52.03
50.29
49.10
48.85
38.14
49.37
37.25
49.72
48.45
37.04
50.33
42.44
48.63
47.46
50.24
47.17
48.87
42.27
48.92
44.74
46.16
41.79
45.64
45.85
36.00
42.30
38.92
42.97
42.97
41.24
45.62
40.92
44.81
44.69
40.36
43.44
40.64
42.64
36.40
40.12
41.88
37.61
33.96
35.23
34.59
36.19
32.99
37.45
31.52
33.40
30.25
31.36
29.25
23.87
25.91
19.03
19.37
16.88
14.04
13.34
12.58
51.87
55.33
51.94
44.24
54.91
42.95
52.69
50.96
49.77
49.52
38.61
50.02
37.92
50.35
49.12
37.49
50.97
43.11
49.29
48.11
50.83
47.77
49.49
42.93
49.53
45.35
46.76
42.39
46.21
46.48
36.58
42.91
39.48
43.54
43.54
41.80
46.18
41.45
45.42
45.29
40.87
43.96
41.17
43.17
36.90
40.61
42.34
38.07
34.39
35.68
35.04
36.64
33.44
37.92
31.87
33.79
30.60
31.74
29.59
24.20
26.20
19.30
19.64
17.11
14.23
13.52
12.76
52.61
56.04
52.63
44.95
55.59
43.44
53.34
51.64
50.44
50.20
39.08
50.68
38.59
50.98
49.79
37.95
51.60
43.78
49.96
48.76
51.42
48.37
50.10
43.58
50.14
45.96
47.36
42.98
46.79
47.10
37.16
43.53
40.04
44.10
44.10
42.36
46.73
41.98
46.03
45.89
41.39
44.49
41.70
43.70
37.40
41.11
42.81
38.53
34.83
36.13
35.48
37.08
33.88
38.38
32.22
34.19
30.94
32.11
29.92
24.53
26.49
19.56
19.91
17.34
14.42
13.70
12.93
*) Brand BIB 5700 and BIB 5500 not used anymore
101
[ SHARESPERFORMANCE ]
IDX-Listed coal miners shares performance
No
Company
14
15
1 ADARO ENERGY Tbk (ADRO)
740
700
730
2 ATLAS RESOURCES Tbk (ARII)
450
450
8.000
4 BERAU COAL ENERGY Tbk (BRAU)

5 BORNEO LUMBUNG ENERGI & METAL Tbk (BORN)
6 BUMI RESOURCES Tbk (BUMI)
21
745
680
705
695
690
660
670
650
665
450
450
410
410
390
450
450
410
410
8.000
8.000
8.000
8.000
7.500
8.000
7.500
7.500
7.500
82
82
82
82
82
82
82
82
82
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
1600
1600
1600
1670
1670
1670
1670
8 HARUM ENERGY Tbk (HRUM)
840
835
840
885
870
850
9 INDIKA ENERGY Tbk (INDY)
215
212
219
273
331
345
6.750
6.500
6.550
6.950
6.575
6.600
7 GOLDEN ENERGY MINES Tbk (GEMS)
10 INDO TAMBANGRAYA MEGAH Tbk (ITMG)

11 RESOURCES ALAM INDONESIA Tbk (KKGI)
12 TAMBANG BATUBARA BUKIT ASAM (Persero) Tbk (PTBA)
30
645
665
680
670
695
690
705
450
450
415
385
385
385
404
404
404
7.350
7.500
7.500
7.500
7.500
7.500
7.500
7.900
7.900
7.900
82
82
82
82
82
82
82
82
82
82
82
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
1670
1670
1670
1670
1670
1670
1670
1670
1670
1670
1670
1700
1700
865
870
870
855
885
875
880
870
870
850
885
870
870
860
345
345
345
345
345
345
311
280
262
283
281
281
281
275
6.575
6.525
6.725
6.575
6.575
6.575
6.625
6.675
6.675
6.675
7.100
6.925
6.875
6.875
467
489
498
540
550
515
480
500
505
500
505
486
486
491
500
495
499
7.000
6.575
6.825
6.800
6.750
6.500
6.550
6.375
6.425
6.275
6.200
6.450
6.225
6.650
6.550
6.550
6.675
BAYAN RESOURCES Tbk (BYAN)
460
8.200
440
8.000
420
7.800
Price (Rp)
Price (Rp)
ATLAS RESOURCES Tbk (ARII)
400
380
340
GOLDEN ENERGY MINES Tbk (GEMS)
INDO TAMBANGRAYA MEGAH Tbk (ITMG)
ATLAS RESOURCES Tbk (ARII)
60
50
50
40
40
Price (Rp)
60
30
20
10
Date (Mar - Apr 2016)
BORNEO LUMBUNG ENERGI & METAL Tbk (BORN)
HARUM ENERGY Tbk (HRUM)
20
400
880
350
870
300
860
250
850
840
150
100
820
50
-
14 15 16 17 18 21 22 23 24 28 29 30 31 1 4 5 6 7 8 11
HARUM ENERGY Tbk (HRUM)
RESOURCES ALAM INDONESIA Tbk (KKGI)
14 15 16 17 18 21 22 23 24 28 29 30 31 1 4 5 6 7 8 11
INDIKA ENERGY Tbk (INDY)
TAMBANG BATUBARA BUKIT ASAM Tbk (PTBA)

7200
7000
6800
Price (Rp)
400
300
200
6600
6400
6200
6000
5800
14 15 16 17 18 21 22 23 24 28 29 30 31 1 4 5 6 7 8 11
BUMI RESOURCES Tbk (BUMI)
200
830
14 15 16 17 18 21 22 23 24 28 29 30 31 1 4 5 6 7 8 11
INDIKA ENERGY Tbk (INDY)
890
810
Price (Rp)
30
10
14 15 16 17 18 21 22 23 24 28 29 30 31 1 4 5 6 7 8 11
100
BAYAN RESOURCES Tbk (BYAN)
BORNEO LUMBUNG ENERGI & METAL Tbk (BORN) BUMI RESOURCES Tbk (BUMI)
500
INDO TAMBANGRAYA MEGAH Tbk (ITMG)
14 15 16 17 18 21 22 23 24 28 29 30 31 1 4 5 6 7 8 11
600
14 15 16 17 18 21 22 23 24 28 29 30 31 1 4 5 6 7 8 11
7.400
7.000
14 15 16 17 18 21 22 23 24 28 29 30 31 1 4 5 6 7 8 11
Price (Rp)
BERAU COAL ENERGY Tbk (BRAU)
7.600
7.200
Price (Rp)
ADARO ENERGY Tbk (ADRO)
1700
1680
1660
1640
1620
1600
1580
1560
1540
14 15 16 17 18 21 22 23 24 28 29 30 31 1 4 5 6 7 8 11
710
430
GOLDEN ENERGY MINES Tbk (GEMS)
7.200
7.100
7.000
6.900
6.800
6.700
6.600
6.500
6.400
6.300
6.200
11
6.650
90
80
70
60
50
40
30
20
10
14 15 16 17 18 21 22 23 24 28 29 30 31 1 4 5 6 7 8 11
Apr 2016
6
440
14 15 16 17 18 21 22 23 24 28 29 30 31 1 4 5 6 7 8 11
31
6.150
Price (Rp)
Price (Rp)
Price (Rp)
29
440
BERAU COAL ENERGY Tbk (BRAU)
Price (Rp)
28
360
Price (Rp)
24
6400
ADARO ENERGY Tbk (ADRO)

760
740
720
700
680
660
640
620
600
580
17
Mar 2016
22
23
18
3 BAYAN RESOURCES Tbk (BYAN)
16
RESOURCES ALAM INDONESIA Tbk (KKGI)
5600
14 15 16 17 18 21 22 23 24 28 29 30 31 1 4 5 6 7 8 11
TAMBANG BATUBARA BUKIT ASAM Tbk (PTBA)
Photo: Ipunk AF
MINERALS
SILVER ORE (rhodonite)
[ INDUSTRYNEWS ]
Newcrest: Mine production
resumed at Toguraci,
Kencana remains suspended
Antam cooperates with

pawnshop operator to expand
gold sales
IDX-listed mining company PT Aneka
Tambang Tbk (Antam) has signed an MoU
with state-owned pawnshop operator PT
Pegadaian in a cooperation that is expected
to help expand the gold sales of the former
company.
Antam said in a statement that the
MoU was signed recently by company
President Director Tedy Badrujaman

and Pegadaians President Director
Riswinandi. Under the cooperation, Antam
will capitalize on Pegadaians outlets
across the country in a bid to help increase
the sales of its certified gold products.
Gold sales have become Antams
largest source of revenue since last year,
accounting for 70 percent of revenue, after
the government introduced a ban on export
of nickel ores. Ferronickel accounted for
about 26 percent of total revenue last year.
Antam produces gold from its Pongkor
and Cibaliung mines in West Java. The
company also processed gold purchased from
other producers. The company has set gold
sales volume this year at around 10 tons.
Antam said has previously opened
13 gold boutiques located in Jakarta (2
outlets), Bandung, Surabaya (2 outlets),
Makassar, Palembang, Semarang,
Balikpapan, Banjarmasin, Medan,
Denpasar and Yogyakarta. Antam
also innovates its gold business by
offering gold with batik motifs and gold
depository services.
CA|Khalsa
ASX-listed Newcrest Mining Ltd said

that mining activities recommenced at
the Toguraci mine, part of the Gosowong
operation located in Halmahera Island,
North Maluku Province.
The company said in a statement that since
the geotechnical event at Kencana mine, also
in Gosowong, on February 8, 2016, mining at
Gosowong has been suspended. During the
period of suspension, technical studies and
rehabilitation work have been undertaken at
both Toguraci and Kencana and some low
grade stockpiled material has been processed.
The rate of mining at Toguraci will
gradually increase over time, with full
production from Toguraci not expected for
at least two months, the statement said.
Mining at Kencana remains
suspended. Technical studies in relation to
Kencana are well advanced but yet to be
completed, it added.
Production and cost guidance for
Gosowong for the 2016 financial year
will be updated after recovery and

resumption plans have been completed,
the company said.
Gosowong is owned and operated by
PT Nusa Halmahera Minerals (PTNHM),
an Indonesian company 75 per cent owned
by Newcrest, which holds contract of work
that is valid until 2029.
In the financial year ending 30 June
2015, Gosowong produced 331,555 ounces
of gold and 410,970 ounces of silver. Since
mine operations commenced in 1999, over
four million ounces of gold and three million
ounces of silver have been produced.
Government rejects PT
Freeport share price offer
The government has finally sent a
letter to gold and copper giant PT Freeport
Indonesia in response to the US$1.7 billion
price offered by the company for its 10.64
percent stake, saying that its too expensive.
Director General of Mineral and Coal
at the Ministry of Energy and Mineral
Resources Bambang Gatot Ariyono said
that the letter was sent recently. We
rejected the share price offer, he said,
but declined to disclose the price the
government wants for the shares as it is
part of price negotiation strategy.
PT Freeport on January 13 made
the $1.7 billion price offer for the 10.64
percent shares to be divested to Indonesian
investors as part of a mandatory divestment
program, taking into account its gold and
copper reserves that last until 2041. This
also assumes that the government would
renew PT Freeports current mining
contract which is set to expire in 2021.
Bambang said that the ministry has

insisted to use the replacement cost
mechanism, valuing the PT Freeport
shares based on the investment which has
been made by the company until it made
the share price offer. Assuming that PT
Freeport has made about US$9.7 billion in
investment until 2015, excluding financial
obligations and amortization, the 10.64
percent shares should be valued at $1.03
billion.
Mineral downstream products

to be exempted from royalty
The government is planning to alter
royalty collection mechanism in the
mineral mining sector by collecting the
royalty in the upstream side instead of
the downstream side, Kontan reported
recently.
Under the plan, the royalty will be
applied on mineral ores instead of refined
or processed mineral products. As such,
products such as nickel in matte and
ferronickel will no longer be subject to

royalty payment, the paper said.
The paper said that the plan
emerged during a meeting of economics
ministers. Coordinating Minister for the
Economy Darmin Nasution said that
the plan is part of efforts to encourage
the development of domestic mineral
smelters.
Director General of Mineral and Coal
Bambang Gatot Ariyono said that the plan
would require the revision of Government
Regulation No 9/2012 on non-tax state
revenue.
He said that it remains unclear as
to when the revision of the government
regulation would be completed, but added
that he expected the planned new policy
can be implemented this year.
Bambang predicted that the royalty
tariff to be applied on upstream
products would be higher than the
current royalty tariff applied on
downstream products.
105
[ INDUSTRYNEWS ]
Despite higher production,
Cakra delays smelter projects
IDX-listed mining company PT
Cakra Mineral Tbk has seen its monthly
production of zirconium exceeding
target amid strong overseas demand,
Kontan reported.
The paper quoted company Corporate
Secretary Dexter Sjarif Putra as saying that
monthly production level normally stood
at 350-400 tons, but output in January
had reached 400-500 tons, in February
500-600 tons, and in March 700 tons
amid stronger demand from consumers in
Germany, Japan, Italy, and Ukraine.
Cakras zirconium out primarily
comes from its subsidiary PT Takaras
Inti Lestari in Central Kalimantan, while
another subsidiary PT Murui Jaya Perdana
has only started production recently.
Dexter, however, said that despite the
strong demand, price remains low, a factor
that has prompted the company to postpone
export to China. As such, he declined to
provide sales project for this year. Zirconium

price currently stands at around US$950 per
ton, compared to $2,150 per ton in 2013.
The relatively lower price has also
forced Cakra to postpone the planned
development of $60 million iron ore
smelter in cooperation with Z&N
International Co Ltd., and ferronickel
smelter with Shanxi SuoEr Technology
worth $68 million, Dexter said.
He added that Cakra has also
postponed a planned acquisition of a
coking coal project amid lingering drop in
coal price.
Finders to resume exploration

at Wetar copper project
ASX-listed Finders Resources Ltd
said that it plans to resume this year
exploration activities on Wetar Island,
Maluku Tenggara Barat Regency,
Maluku Province, where the company is
developing a copper project.
Finders said in a statement last week
that exploration will be focusing initially

on the nearby satellite Meron massive
sulphide deposit and then on other copper
and gold targets identified on the island by
previous explorers, including Karkopang.
No further details were provided.
But according to company website,
similar style mineralization and potential
for additional resources has been
identified near the Kali Kuning deposit at
Meron and Karkopang on Wetar Island.
Partial drilling of Meron by a previous
explorer has shown encouraging copper
assays, it said.
Finders owns 95 percent of the Wetar
Copper Project, which comprises the
development, mining and processing of
sulphide copper deposits at Kali Kuning
and Lerokis on Wetar Island. Finders is
developing a 25,000 ton per annum (tpa)
copper cathode SX-EW plant as part of the
expansion of the copper project, which is
expected to start production in the early
part of the second quarter of 2016.
market obligation (or DMO) policy linking

it with demand for mineral ores from
domestic smelters being developed in
various regions, Bisnis Indonesia reported.
The paper quoted Sujatmiko, Head of
Public Communications at the ministry,
as saying that the planned policy comes
as there is increasing number of domestic
smelters which have been completed.
He added that the planned DMO
policy for mineral commodities can only
be realized after the government completes
the verification process of the mineral IUP
mining business permits.
The Indonesia Smelter Industry
Association (AP3I) has recently called
on the government to ensure mineral ores
supply for domestic smelters, following
talks that the government was planning to
relax the mineral ore export ban policy.
Minister of Energy and Mineral Resources
Sudirman Said later assured that the
government was not planning to allow
miners to resume mineral ores export.
Bukakas unit acquires 51%

of MKAL
Krakatau appoints new

director, commissioners
IDX-listed steel giant PT Krakatau
Steel Tbk announced changes to its board
of directors and commissioners during a
shareholders meeting recently.
The company said it has dismissed
Anggiasari Hindratmo as director and
appointed Tambok P. Setyawati S. as a
new director.
Krakatau has also dismissed Achmad
Sofjan Ruky as chief commissioner
and Hilmar Fand as independent
commissioner.
It said that Binsar H. Simanjuntak has
been promoted as Chief Commissioner,

Roy Maningkas as Independent
Commissioner, and Tubagus Farich
Nahril as Independent Commissioner. The
shareholders have also appointed Ridwan
Djamaludin as a new member of the Board
of Commissioners.
DMO for mineral

commodities to be arranged
per region
Although mineral miners have no
longer been allowed to export ores since
2014, the Ministry of Energy and Mineral
Resources plans to apply a domestic
IDX-listed engineering and

construction firm PT Bukaka Teknik
Utama Tbk announced that its subsidiary
PT Bukaka Mandiri Sejahtera (BMS),
which is 95 percent owned by the firm,
has bought a 51 percent stake in PT Mitra
Karya Agung Lestari. (MKAL).
BMS pays Rp 1.09 billion for
the shares, the firm said, adding the
acquisition is part of the companys plan
to develop smelter business.
The firm did not provide details
regarding MKAL.
In June of last year, the firm, which
relisted its shares on the Indonesian Stock
Exchange last year following nine years of
delisting, said it plans to develop a nickel
smelter in Palopo, South Sulawesi, with
total investment estimated at around Rp
400 billion.
107
[ INDUSTRYNEWS ]
Vice President promises to
help solve land problems for
Chinese smelter
Vice President Jusuf Kalla promised
that the government will help Chinese
mining firm Virtue Dragon Nickel
Industry solve the land problems faced by
its smelter project in Southeast Sulawesi
province within a month.
The promised expressed by the Vice
President in a meeting with the firms
management on the sidelines of his
working visit to Sanya, Haiman, China
over the weekend, Bisnis.com.
(We hope it can be solved) in a
month, Kalla said.
Virtue Dragon plans to build a
ferronickel plant in Konawe regency,
Southeast Sulawesi with a total investment
of US$5 billion through 2020, including $1
billion in the first phase. Once completed,
the smelter may have a production capacity
of 3 million tons of ferronickel per year.
The development of the project will
be carried out in three phases, first on 100
ha of lands, then on 200 ha of lands in
the second and third phases. The firm is
the first company to occupy the Konawe
industrial zone.
Kalla said the problem faced by the
firm is that it has started the development
of its smelter despite that land acquisition
for the project had not yet been completed.
Franky Sibarani, Chairman of the
National Investment Coordinating Board
(BKPM), explained the problem faced
by the firm occurred due to the fact
some of the lands inside the Kowane
industrial zone are irrigation lands.
Using such lands need coordination
with the Ministry of Public Works and
Housing and the Ministry of Spatial and
Agrarian affairs.
A lesson that can be taken from this is
that a license is not immediately effective
unless there are lands available with clear
status, Franky said.
Jusuf Kalla
Chiyoda awarded contract for

copper smelter project in RI
Japans Chiyoda Corporation
announced recently that its subsidiary,
Chiyoda Singapore (PTE) Limited, has
been awarded an offshore Engineering
and Procurement contract for Indonesia
Copper Smelter (ICS) project by PT
Freeport Indonesia (PTFI).
Chiyoda said in a statement that
scope of work under the US$900 million
contract covers offshore engineering and
procurement services for copper smelter,
refinery and ancillary facilities to produce
copper finished cathode by processing
up to 2 million tons per year of Grasberg
copper concentrates.
PTFI, a subsidiary on US-based
Freeport McMoRan Copper & Golf In,
operates the Grasberg minerals district,
one of the worlds largest copper and gold
deposits, in the highland areas of Mimika
District, Papua Province.
The company is planning to develop
copper smelter in Gresik, East Java.
Chiyoda group said it was awarded this
contract due in large part to its performance
in delivering many projects in materials and
resource sector since the 1990s, wealth of
construction experiences for copper smelter
related facilities, one of which in Indonesia,
and excellent technologies.
109
[ INDUSTRYNEWS ]
Tumpang Pitu gold concession
declared as national vital
object
leach system, the mining process will not

produce tailings.
Merdeka has said that production at
the Tumpang Pitu gold project is expected
to start in the fourth quarter of this year.
According to 2012 JORC, the Bukit Tujuh
mine holds ore reserves of 90 million tons
in its oxide layer. The project is expected to
produce 90,000 ounces of gold and 300,000
oz of silver per year from late 2016 to 2025.
Pertamina, NHM sign oil fuel

contract
State owned oil and gas firm PT
Pertamina (Persero) has signed in early
March a contract with gold mining
company PT Nusa Halmahera Minerals
(NHM) to provide oil fuels for the latter.
The contract was signed by
Pertaminas VP of Industrial Fuel
Marketing Giri Santoso and NHMs
Commercial Director Stephen Hovens,
Pertamina said in a statement.
Under the contract which is effective
through 2017, Petamina will provide 3,500
to 4,000 kl of oil fuels per month for NHM.
The value of the contract is Rp 350 billion.
NHM operates gold mine in
Gosowong, Halmahera Utara regency,
North Maluku province.
CA|Cepi Setiadi

Resources (MEMR) has declared the
Tumpang Pitu gold concession in
Banyuwangi, East Java, as a national
vital object, allowing the police to tighten
security around the concession and
banning local villagers from entering the
area without proper permit, detik.com
reported recently.
Zaenal Arifin, an official at the
MEMR, denied suggestion that the move
was response to the riot in November of
last year, where villagers attacked and
vandalized the facilities at the gold mine
as the request for the national vital object
status a few months prior to the incident.
The Tumpang Pitu (or also known
as Bukit Tujuh mine) gold concession
is operated by PT Bumi Suksesindo, a
subsidiary of IDX-listed PT Merdeka
Copper Gold Tbk. The company has
previously said that production is
expected to start in the fourth quarter of
this year.
According to 2012 JORC, the Bukit
Tujuh mine holds ore reserves of 90
million tons in its oxide layer. The project
is expected to produce 90,000 ounces of

gold and 300,000 oz of silver per year
from late 2016 to 2025.
Meanwhile, the Ministry of Forestry
and Environment is set to dispatch a team
to look into and evaluate the mine plan
for the Tumpang Pitu gold project to
help ensure that the planned gold mining
activities would not trigger social conflict
and environmental problem.
This was said by Director General
of Forest Zoning and Environment at the
ministry, San Afri Awang as reported by
Kompas.
The statement comes following
concerns including expressed by an NGO
that the mining process at the Tumpang
Pitu gold concession, owned by PT Bumi
Suksesindo (BSI), a subsidiary of IDXlisted PT Merdeka Copper Gold Tbk, will
involve the use of cyanide.
BSI External Affairs Manager
Bambang Wijonarko told Kompas that
the mining process at Tumpang Pitu will
use the heap leach system, in which a
mixture of water and cyanide will be used
in part of the process. He, however, said
that process will be tightly supervised
and control so as not to pollute the
environment. He added that with the heap
CA|Cepi Setiadi
EMR Capital-led consortium officially

owns Martabe gold mine
consortium led by EMR

Capital completed on March
17 the acqusition of PT
Agincourt Resources, the
owner of the Martabe gold mine in South
Tapanuli Regency, North Sumatra.
Agincourt said in a statement that
HK-listed G-Resources, which initially
owned 95 percent of Agincourt, has
now been replaced by the consortium,
whose shareholders include Australias
EMR Capital (61.4%), Farallon Capital
(20.6%), Indonesian palm oil tycoon
Martua Sitorus (11%), and Robert Budi
Hartono and Michael Bambang Hartono
(7%), the owners of Djarum Group, one
of Indonesias largest cigarette makers
which has also diversified into property
and finance. The ownership of the South
Tapanuli regency and North Sumatra
provincial administrations remains
unchanged.
Agincourt said that Martabe mine

has started expanding its operations, with
installment of secondary crusher scheduled
for next year, which will allow the mine to
increase throughput of the processing plant
up to 5 million tons per year.
The company added that request
has been made with the government
to allow it to develop the Barani and
Rambang Jorang pits. Together with the
Pit Purnama, the two smaller pits will
increase the mines lifetime by another
two years. The process of acquisition of
200 hectares land has been started.
The Martabe gold mine is anticipated
to produce 260,000 ounces of gold this
year, and about 2.3 million ounces of
silver, both of which lower than output
last year. Capital expenditure for this
year is estimated at around US$67
million, while exploration cost projected
at $12 million.
According to G-Resources annual

report for the year ended December 31,
2014, the Martabe Mine had a resource
base of 7.4 million ounces of gold and 70
million ounces of silver.
Meanwhile, G-Resources Group
announced earlier that Owen L Hegarty
has tendered his resignation as executive
director and vice-chairman of the company
with effect from March 24, 2016.
Hegarty wishes to devote more time to
pursue his other business engagements.
Hegarty has confirmed that he has
no claim against the company in respect
of fees or in respect of compensation for
loss of office and there is no disagreement
between him and the board. Save as
disclosed above, there is no matter relating
to Hegartys resignation that needs to be
brought to the attention of the shareholders
of the company, G-Resources said.
111
[ INDUSTRYNEWS ]
Vale reappoints Kanter as

president in board changes
Vale also announced the amendment and appointment of

Members of the Board of Commissioners
To approve and accept the appointment of Mark James
Travers as Vice President Commissioner; the re-appointment
of Jennifer Anne Maki as President Commissioner; Stuart
Alan Harshaw as Commissioner; Nobuhiro Matsumoto as
Commissioner; Andrea Maques de Almeida as Commissioner;
Robert Alan Morris as Commissioner; Akira Nozaki as
Commissioner; Irwandy Arif as Independent Commissioner; and
Idrus Paturusi as Independent Commissioner, with effect from the
closing of this meeting until the closing of the companys annual
general meeting of shareholders in 2018.
Accordingly, the composition of the Board of Commissioners of
the Company effective as of the closing of the meeting is as follows:
President Commissioner : Jennifer Anne Maki
Vice-President Commissioner : Mark James Travers
Commissioner : Stuart Alan Harshaw
Commissioner : Nobuhiro Matsumoto
CA|Lucky Ebenhaezer
DX-listed integrated nickel mining company PT Vale

Indonesia Tbk said it has reappointed Nicolas D. Kanter as
President Director until 2018 in the latest changes to its board
of directors and commissioners.
The company said in a statement following shareholders
meeting the reappointment of Bernardus Irmanto as Vice
President Director; and Febriany Eddy as Director, with effect
from the closing of this meeting until the closing of the companys
annual general meeting of shareholders in 2018.
The company said it has accepted and ratified the resignation of
Josimar Pires from his title as Director of the company and waive the
90 (ninety) days prior notice requirement in respect of his resignation.
It approved and accepted the appointment of Lovro Paulic as
Director of the company, with effect from the closing of this meeting
until the companys annual general meeting of shareholders in 2018.
The composition of the members of the Board of Directors of
the company effective as of the closing of the meeting is as follows:
President Director : Nicolas D. Kanter
Vice President Director : Bernardus Irmanto
Director : Lovro Paulic
Director : Febriany Eddy
Nicolas D. Kanter
Commissioner : Andrea Maques de Almeida

Commissioner : Robert Alan Morris
Commissioner : Akira Nozaki
Independent Commissioner : Irwandy Arif
Independent Commissioner: Idrus Paturusi
Meanwhile, Vale has allocated a lower capital expenditure
(capex) of US$90 million-$100 million for this year, compared to
$106.39 million last year.
Company Vice President Bernardus said that the capex will
be focused on renewal of production equipment both at the mines
and processing plant in Sorowako, South Sulawesi.
Compared to last year, the capex (for this year) is lower.
And we see a possibility of further lowering it again. Our current
production capacity is in line with what has been planned, so
theres not much spending required, he said.
Bernardus said that renewal and maintenance of equipment
is crucial to help improve efficiency amid the current commodity
downturn.
He said that funding for the capex will come from internal
source. According to its end 2015 financial report, Vale Indonesia
had total cash reserves of $194.75 million.
Vale Indonesia has set production target of 80,000 tons of
nickel in matte this year, lower than last years record output of
81,177 tons.
Consortium preparing
$2b bid for Newmont
n Indonesian consortium
led by veteran investment
banker Agus Projosasmito is
preparing to offer about U$2
billion for control of Newmont Mining
Corp.s operations in Indonesia after lining
up bank financing, people with knowledge
of the matter said as reported by The
Jakarta Post recently.
The Post said that the investor group
plans to bid for about 80 percent of local
operating company PT Newmont Nusa
Tenggara over the next week at the
earliest, the people said, asking not to
be named before an announcement. It is
poised to borrow about $1 billion from
banks including BNP Paribas SA, Malayan
Banking Bhd. and Societe Generale SA,
as well as state-owned lenders PT Bank
Negara Indonesia and PT Bank Mandiri,
according to the people.
PT Medco Energi Internasional, the
Jakarta-listed oil and gas producer founded
by businessman Arifin Panigoro, would be
a shareholder of Newmont Nusa Tenggara
together with Projosasmito after the

planned purchase, the people said. As part
of the deal, the investor group will offer to
buy the 24 percent stake in the Newmont
operations held by the Bakrie familys PT
Bumi Resources Minerals, according to
the people.
Newmont is seeking to sell its local
business after Indonesia banned raw ore
shipments in January 2014 and put a
progressive tax on concentrates, a semiprocessed ore thats shipped to smelters
for processing into finished metal. The
move is part of a wider policy to boost
revenue by turning the country into a
manufacturer of higher-value products
and encourage construction of domestic
smelters and refineries.
Medco shares have jumped 81 percent
since the start of the year, outpacing the
5.4 percent rise in the benchmark Jakarta
Stock Exchange index. The stock fell 4
percent on April 1, giving Medco a market
value of 4.8 trillion rupiah ($357 million).
Projosasmito has more than 30 years
experience in the Indonesian capital

markets, including stints as president
director of local brokerage PT Danareksa
Sekuritas and president commissioner
of Jakarta-based PT Nusantara Capital
Securities, according to a biography
on Nusantaras website. He is now the
founder and chief executive officer of coal
miner PT Ithaca Resources.
Newmont Nusa Tenggara owns Batu
Hijau, the second-biggest copper and
gold mine in Indonesia, after FreeportMcMoRan Inc.s Grasberg asset, which
has the worlds biggest gold reserves. The
open-pit Newmont mine, whose name
means green rock in Bahasa Indonesia,
was discovered in 1990 in the southwest
region of Sumbawa island.
Other banks may join the financing
later, according to the people. Details of
the transaction havent been finalized, and
theres no certainty a firm offer will result,
the people said. Newmont Mining owned
31.5 percent of its Indonesian operations
at the end of September last year, with
other stakes held by Japanese trading
house Sumitomo Corp. and local investors,
according to a quarterly report.
Medco is in talks with various parties,
and we are in the process of acquiring
some major asset in Indonesia, President
Commissioner Muhammad Lutfi said by
phone Friday, declining to comment on the
identity of the target.
A spokesman for Newmont said by
e-mail that the U.S. miner and Sumitomo
are in discussions with certain interested
parties, but to date, none has secured
fully committed financing or final deal
terms.
113
[ INDUSTRYNEWS ]
CA|Khalsa
Timah announces
changes to board
Riza Pahlevi
DX-listed state owned tin firm

PT Timah Tbk announced the
appointment of Riza Pahlevi as
president director to replace Sukrisno
as part of major changes to its Board of
Directors and Commissioners.
The firms shareholders meeting also
appointed three directors -- Purwijayanto,
Muhamad Rizki and Emil Ermindra -- to
assist Riza but their specific positions
in the Board of Directors have yet to be
determined, the firm said in a statement.
Fahri Ali retains his position
as President Commissioner, while
the meeting appointed two new
commissioners, namely Bagas Angkasa
and Milawarma, to replace Suhendro and

Emon Pangkapi.
Members of the Board of
Commissioners and Directors are as
follows:
Board of Commissioners
- Fahri Ali : President Commissioner
- Bagas Angkasa : Independent
Commissioner
- Milawarma : Independent
Commissioner
- Erfi Triassunu : Commissioner
- Eko Prasojo: Commissioner
- Mochtar Husein : Commissioner
Board of Directors:
- M Riza Pahlevi Tabrani : President
Director
Purwijayanto : Director
Muhamad Rizki : Director
Emil Ermindra : Director
The shareholders meeting also

decided to distribute 30 percent of the
firms 2015 profit of Rp 101.56 billion,
equal to Rp 30.8 billion as dividends,
while keeping 68 percent of the profit
or Rp 69.08 billion as general reserve
and 2 percent or Rp 2.03 billion as
environmental funds. Of the Rp 30.8
billion dividends, Rp 19.81 billion will be
handed to the government and Rp 10.67 to
the investing public.
Smelter licensing authority

handed over to BKPM
Ministry of Industry. The MEMR had

demanded that it should hold authority
over the licensing of domestic smelters
projects as the smelter owners hold
IUP mining business permits for their
mineral mines. Meanwhile, the Ministry
of Industry demanded it hold the
licensing authority because the smelter
projects require the industry business
permit, or IUI.
Minister of Industry Saleh Husin
said that although the licensing
authority has been transferred to
BKPMs one stop integrated services,
the 2017 target for the completion of
domestic smelter projects remains in

place. The MEMR previously suggested
for the deadline to be pushed back
as miners have difficulties to meet
the 2017 target amid the lingering
commodity price drop.
Meanwhile, Minister of Finance
Bambang Brodjonegoro said that
smelter projects are entitled to tax
incentives such tax allowance once they
have been completed. If the investors
further move downstream such as
developing stainless steel industry, they
can get additional incentives including
tax holiday.
CA|Mudasir
he Office of the Coordinating

Minister for Economy
finally decided to hand over
the licensing authority for
the development of domestic mineral
smelters to the Investment Coordinating
Board (BKPM).
The decision was made at a meeting of
economics ministers recently. Meanwhile,
the Ministry of Industry is given authority
to supervise the development of the
domestic smelters.
The decision is expected to end
dispute between the Ministry of Energy
and Mineral Resources (MEMR) and the
115
[ COMPANIES ]
Asiamet completes assessment

on BKM deposit
anadian firm Asiamet

Resources Limited (ARS)
announced the results of
a Preliminary Economic
Assessment (PEA) completed on its
Beruang Kanan Main (BKM) copper
deposit in Kalimantan, Indonesia. The
PEA has been finalized in compliance
with the guidelines of Canadian

National Instrument 43-101 by
independent Australian mine planning
consultants, Orelogy.
The PEA is the first study undertaken
to evaluate the economics of developing
an open pit mine and heap leach solvent
extraction electro-winning facility (SX-
EW) to directly produce copper cathode

based on the near surface copper deposit
reported in the 2015 BKM Resource
estimate (ARS NR October 21, 2015).
Results of the PEA study demonstrate
excellent potential for developing a robust,
low strip ratio, low capital intensity
copper project with low operating costs,
strong cash flow generation capacity and

significant upside potential through further
Resource growth.
Asiamet considers target production
of 25,000 tons of copper cathode per
year for an initial 8 year LOM to be
the most appropriate option for the
PEA given the significant exploration
potential already identified close to the
BKM deposit. Copper mineralization at
BKM remains open in several directions
and locally at depth. Adjacent high
potential prospects at Beruang Kanan
South (BKS), Beruang Kanan West
(BKW) and BKZ Polymetallic (BKZ)
also represent attractive targets for
additional mineralization as demonstrated
by the strong surface and drilling results
returned to date e.g. 10m at 2.52% Cu
incl. 2m at 7.45% Cu from 19.5m at BKS
(ARS NR November 16, 2015).
Increasing the Mineral Resource base,
and thus the potential feed available to the
BKM processing facilities evaluated in the
current PEA, is likely to have a strongly
positive impact on the BKM Copper
Project value and will be a key focus for
Asiamet going forward.
Analysis conducted as part of the PEA
to test the BKM projects sensitivity to the
copper price highlights a robust project
with the potential for a large lift in value
at higher copper prices i.e. NPV10 of
US$269.1M at US$3.50Ib and NPV10 of
US$334.0M at US$3.75Ib.
Asiamet Resources CEO Tony
Manini commented: Asiamet is
extremely pleased with the results of
the BKM project PEA. To exceed our
expectations on this most important
milestone speaks volumes for the quality
of the asset and the potential of the BKM
deposit. The opportunity to develop
a robust, low strip ratio, low capital
intensity copper mine with low operating
costs at a time when the copper market
is forecast to be in supply deficit and
BKM Project Preliminary Economic Assessment Results Summary

Unit
Base Case
life of Mine (loM)
BKM - Economic Summary
years
CopperCathode Sold
Million lbs
391.0
$uS/lb
3.25
$uS
1,270.6 M
Copper Price (loM Average)

Gross Revenue
loM C1 operating Costs
$uS
499.5 M
$uS/lb
1.28
$uS
19.8 M
loM All In operating Cost
$uS
582.8 M
loM All In operating Costs
$uS/lb
1.49
Initial Capital Cost (including a 15% Contingency)
$uS
163.8 M
Taxes
$uS
136.6 M
loM C1 operating Cost (recovered copper)

Royalties $uS 63.5 M off-site transport
NPv and IRR (Base Case)

Discount Rate Percent
(%)
10
Pre-Tax Net Free Cash Flow(including royalties)
$uS
524.0 M
Pre-Tax NPv
$uS
290.7 M
Pre-Tax IRR
47.5
Pre-Tax Payback Period
years
2.1
After-Tax Net Free Cash Flow (incl. royalties)
$uS
387.5 M
After-Tax NPv
$uS
204.3 M
After-Tax IRR
38.7
years
2.4
After Tax Payback Period
a stronger price environment is highly

compelling.
The Company considers the PEA base
case economics to be highly attractive
and is firmly of the view that additional
detailed study work and exploration in
and around BKM will further enhance the
value of the project. The BKM deposit
remains open in several directions and
the adjacent high potential prospects
at BKS, BKW and BKZ represent
excellent targets for additional copper
mineralization as demonstrated by
the strong surface and drilling results
returned to date. Our confidence in
delivering this upside has provided strong
support for assessing a larger project in
the PEA than originally envisaged.
We look forward to building on the
strong momentum we have established
over the past year with a continued

flow of news from ongoing project
optimization and study work, drilling
to increase Resource confidence and to
test some of the exciting targets around
BKM, and various corporate initiatives
focused on partnering and funding
for the ongoing development of the
Company and its projects.
Success in developing BKM
to its full capacity will provide the
foundations for Asiamet to continue
building a leading Asian copper and
gold company through the exploration
and development of its large asset base
in Indonesia. I would like to thank
the highly experienced Asiamet team
together with its expert consultants for
delivering a high quality PEA to time
and budget.
117
[ COMPANIES ]
Antam, Freeport plan anode slime

and precious metals refinery
tate-controlled mining
company PT Aneka Tambang
Tbk (Antam) plans to team
up with gold and copper
giant PT Freeport Indonesia (PTFI),
and copper smelter operator PT
Smelting to develop an anode slime
and precious metals refinery in Gresik,
East Java.
The IDX-listed mining company has

recently signed a MoU with PTFI and PT
Smelting to set up a joint venture company
that would develop the anode slime and
precious metals refinery to extract valuable
metals such as gold and silver from anode
slime, a by-product of copper smelter.
We hope to be able to have a 3040 percent stake in the joint venture
company, said Antam President Director

Tedy Badrujaman.
He explained that the planned refinery
would be located in Gresik, where PT
Smelting operates the countrys only
copper smelter, and PTFI plans to build a
US$2.3 billion copper smelter. PTFI owns
a 25 percent stake in PT Smelting, while
Mitsubishi Materials Corp controls a 60.5
percent stake. Other stakeholders include

Mitsubishi Corp Unimetal Ltd and Nippon
Mining and Metals Co Ltd.
Tedy said that the anode slime refinery
would have an annual capacity to process
up to 6,000 tons of anode slime, which
would come from PT Smeltings copper
smelter and the planned PTFI copper
smelter, which has been targeted by the
government to be completed in 2017.
He said that Antam would finance
its equity participation in the project
from part of last years rights issue
proceeds. The company last year raised
Rp 5.37 trillion in proceeds via rights
issue, the bulk of which was allocated
for its ferronickel plant project in East
Halmahera, North Maluku Province. The

remaining proceeds currently stand at Rp
1.87 trillion. No further details about the
project were provided. PTFI will carry
out the feasibility study, Tedy said.
While refinery is a thin-margin
business, Tedy said that it would help
provide gold feed to support the companys
gold products business, and is in line with
the governments efforts to push for the
development of downstream industries. He
added that the government is likely to ban
the export of anode slime in the near future.
Under the MoU with PTFI and PT
Smelter, Antam holds an option to buy a
certain volume of the precious metals to be
produced by the planned refinery.
In January of last year, Antam
commenced the operations of a top blown
rotary converter (TBRC) facility at its
precious metals processing and refinery
business unit. The installment of the
TBRC facility is intended for extracting
gold metals and other valued metals such
as selenium, palladium, platinum and
others from anode slime. The US$500,000
TBRC facility has a processing capacity
of 500 tons of anode slime per year. With
an assumption of 1 percent gold content in
one ton of anode slime, Antam said at the
time that it expected to increase its gold
production by 5 tons on top of the current
gold production from the Pongkor and
Cibaliung gold mines in West Java. Antam
plans to increase its processing capacity to
2,000 tons of anode slime per year in the
future.
Since the past two years, gold sales has
accounted for about 70 percent of Antams
total revenue as the government has banned
the export of nickel ores. Ferronickel
sales accounted for about 25-26 percent.
Antams precious metals business unit
has been certified by the London Bullion
Market Association (LBMA).
Aside from the planned anode slime
and precious metals refinery project,
and the ferronickel plant project in

East Halmahera, Antam is about to
complete the expansion of its ferronickel
plant in Pomalaa, Southeast Sulawesi,
and is teaming up with state-owned
aluminum producer PT Indonesia Asahan
Aluminium (Inalum) and Aluminum
Corporation of China to develop a smelter
grade alumina plant in West Kalimantan,
with a production capacity of 2 million
tons of alumina per year, which is
targeted to be completed in the fourth
quarter of 2019.
Antams aggressive expansion drive
comes at a time when the company has
been suffering financial losses due to the
current drop in commodity prices. The
company has recently reported that net
profit last year widened to Rp 1.44 trillion
from net loss of Rp 753.53 billion in the
previous year.
In a bid to help obtain additional
revenue in the future as the company could
no longer export mineral ores following
the 2014 export ban policy, Antam is
looking into the possibility of investing
overseas including in nickel mines in the
Philippines and gold mines in Myanmar.
The fastest way of obtaining additional
revenue is by selling raw mineral ores,
Tedy said.
Antam last year booked a 12 percent
increase in revenue at Rp 10.5 trillion, of
which gold accounted for Rp 7.31 trillion.
Gold sales increase by 42 percent to
14,179 kg, although the companys gold
output from the Pongkor and Cibaliung
mines last year fell slightly to 2,210 kg
from 2,342 kg in the previous year.
Meanwhile, ferronickel accounted for
26 percent of the total sales, or Rp 2.72
trillion. The companys ferronickel output
last year increased by 2 percent to 17,211
tons of nickel in ferronickel (TNi). Sales
volume last year was also quite strong
at 18,643 TNi despite the overall weak
global commodity market.
119
[ COMPANIES ]
International Copper Study Group
Copper Market Forecast 2016/2017
he International Copper Study

Group (ICSG) met in Lisbon,
Portugal on 9th-10th March
2016 Government delegates
and industry advisors from most of the
worlds leading copper producing and using
countries met to discuss key issues affecting
the global copper market. In the meeting of
the Statistical Committee, the ICSG view
of the world balance of refined copper
production and use was developed.
Copper Market Forecast 2016-2017
In developing its global market balance,
ICSG uses an apparent demand calculation
for China, the leading global consumer of
copper, accounting for about 45% of world
demand. Apparent copper demand for China
is based only on reported data (production
+ net trade +/- SHFE stock changes) and
does not take into account changes in
unreported stocks [State Reserve Bureau
(SRB), producer, consumer and merchant/
trader], which can be significant during
periods of stocking or de-stocking and which
can markedly alter global supply-demand
balances.
According to ICSG projections, the
copper market is expected to remain
essentially balanced in 2016 and 2017. This
compares with a small deficit of 127,000
t and a surplus of 175,000 t for 2016 and
2017, respectively, forecast at our October
2015 meeting. Downward revisions have
been made for both production and usage in
view of global weaker economic outlook,
and project delays and price related
production cuts.
In developing its projections, ICSG
recognizes that global market balances
can vary from those projected owing
to numerous factors that could alter
projections for both production and usage.
In this context it can be noted that actual
market balance outcomes have on recent

occasions deviated significantly from ICSG
market balance forecasts due to unforeseen
developments.
World mine production after adjusting
for historical disruption factors is expected
to increase by around 1.5% in 2016 (lower
than the 3.5% growth in 2015) to reach
19.4 Mt (million tonnes). While concentrate
production is expected to grow by 4%, growth
will be partially offset by a decline in SX-EW
production due to price related production
cuts in the Democratic Republic of Congo
and closures in Chile. Higher global mine
production growth of around 2.3% is expected
in 2017 as additional supply is expected to
arise from expansions at existing operations,
ramp-up in production from mines that have
recently come on stream and output from a
few new mine projects.
After increasing by around 1.6% in 2015,
world refined copper production in 2016
is expected to increase by only 0.5% to 23
Mt. Although primary refined production
(excluding SX-EW) is expected to grow by
of around 3%, growth will be partially offset
by an anticipated decline of 1% in secondary

production (from scrap) and a decline of 8%
in SX-EW output. For 2017, world refined
production is expected to grow by 2%
benefiting from a growth of around 7% in SXEW output. China will be biggest contributor
to world growth in both years.
ICSG expects world apparent refined
usage in 2016 to remain essentially flat.
This is mainly because apparent demand
in China is expected to remain essentially
flat (+0.5%), although underlying real
demand growth in China is estimated by
others at around 3-4%. Usage in the rest
of the world in 2016 is expected to remain
practically unchanged. For 2017, the growth
in world apparent refined usage is expected
at around 1.8% with underlying Chinese
industrial demand growth expected at around
3%, while usage in the rest of the world is
expected to increase by about 1%.
Next Meetings of ICSG
The next Meetings of the Study Group
will be held in Lisbon, Portugal on the Monday
24th and Tuesday 25th October 2016.
Forecast to 2017
Mine production
Refined production
Refined usage
2015
2016
2017
2015
2016
2017
2015
2016
2017
Africa
1,895
1,823
2,152
1,373
1,268
1,448
258
243
246
1,946
2,299
2,344
2,393
N.America
2,660
2,551
2,676
1,886
1,871
497
495
497
latin America
7,892
8,239
8,637
3,310
3,185
3,168
2,349
985
1,080
1,120
930
1,004
1,019
Asean-10 / oceania
1,905
2,297
15,152
11,101
11,604
11,948
14,833
14,842
Asia ex Asean/CIS
2,388
2,455
2,544
China 4/
1,706
1,745
1,850
7,964
8,350
8,700
11,349
11,400
11,700
480
485
103
103
103
Asia-CIS
614
678
728
408
2,747
3,117
3,124
3,151
eu
859
879
896
2,707
2,669
925
900
909
1,050
1,041
1,059
842
845
855
europe others
TOTAL
19,138 19,821 20,889 22,821 23,198 23,920 22,878 23,000 23,416
World adjusted 1/ 2/ 19,138 19,432 19,869 22,821 22,943 23,436 22,878 23,000 23,416
% change
3.5%
1.5%
2.3%
1.6%
0.5%
2.1%
-0.1%
0.5%
1.8%
world Refined Balance (China apparant usage basis)
-57
-56
20
world Refined Balance Adjusted for Chinese Bonded Stocks Change 3/
-167
1/ Based on a formula for the difference between the projected copper availability in concentrates and the projected use in primary refined
production; 2/ Allowance for supply disruptions based on average ICSG forecast deviations for previous 5 years. 3/ For details of this
adjustment see paragraph 3 of the press release. 4/ Apparent copper demand for China is based only on reported data (production +
net trade +/- ShFe stock changes) and does not take into account changes in unreported stocks (State Reserve Bureau (SRB), producer,
consumer and merchant/trader)
Regions
(1000 t)
A COMPROMISED DEAL
ICMA PUSHES INVESTMENT

FOR ENERGY SECURITY
A COMPROMISED DEAL
VOLUME 66 | APRIL 25 - MAY 25, 2016

Pandu P Sjahrir, Chairman of ICMA

CoalAsia 66 Lowres

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A COMPROMISED DEAL

ICMA PUSHES INVESTMENT

VOLUME 66 | APRIL 25 - MAY 25, 2016

COAL ASIA APRIL 25 - MAY 25, 2016

42 Resources Prima reports lower

Toba Baras profit down 27% to $25.7m in 2015

IDX-listed coal mining firm PT Toba Bara Sejahtera announced that

2 COAL ASIA APRIL 25 - MAY 25, 2016

COAL ASIA APRIL 25 - MAY 25, 2016

46 ITMG benefits from cost efficiency

48 Mercuria hurt by VAT dispute in

the view that the global coal market will

50 PTBA gears up for sustainable efficiency

53 Court rules heavy equipment not

Indonesian Coal Mining

4 COAL ASIA APRIL 25 - MAY 25, 2016

After months of debate, the government has finally revised a policy on

65 OPINION | Singgih Widagdo

68 ANALYSIS | Hendra Sinadia

6 COAL ASIA APRIL 25 - MAY 25, 2016

70 ANALYSIS | Ian Wollff

COAL ASIA APRIL 25 - MAY 25, 2016

Canadian firm Asiamet Resources Limited

82 OPINION | Bill Sullivan

118 Antam, Freeport plan anode slime

120 International Copper Study Group

8 COAL ASIA APRIL 25 - MAY 25, 2016

COAL ASIA APRIL 25 - MAY 25, 2016

Tri Subhki Rakhmatullah

Thomas Robiana Sembiring

Nizma Sari Nurulita

FINANCE & ADMINISTRATION DIRECTOR

Tria Purnama Sari

Subscription inquires contact

10 COAL ASIA APRIL 25 - MAY 25, 2016

COAL ASIA APRIL 25 - MAY 25, 2016

Dire Pratama to increase coal handling capacity

12 COAL ASIA APRIL 25 - MAY 25, 2016

DX-listed integrated coal mining

Asam Project which provided $58.84

primarily because of the net tax expenses

Bara Jaya to resume coal

PTBA to complete coal mine

Hasrat Bersama for a combined US$36

IDX-listed coal mining company PT

As per November of last year, Bara Jaya

COAL ASIA APRIL 25 - MAY 25, 2016

IDX-listed steel giant PT Krakatau

its profit for the year would have been

Bumi Resources Q1 coal

Mitrabahtera books $10m

14 COAL ASIA APRIL 25 - MAY 25, 2016

Coal mined is estimated at 21

Krakatau to import coking

COAL ASIA APRIL 25 - MAY 25, 2016

Samindo Resources sets flat

Moodys downgrades Indika

16 COAL ASIA APRIL 25 - MAY 25, 2016

to align with the fundamental shift in

Court approves Asmin

IDX-listed coal mining services

FMA plans coal port in

BlackGold appoints mining