carsurin coal & minerals insider

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East Kalimantan Loading point moved to Muara Jawa so the anchor becomes more distant. Coal prices have stabilized so the the shipper / small traders already active. Restrictions for the diesel fuel industry so the coal loading which uses dump trucks are rather constrained.

South Kalimantan Coal shipment activities in South Kalimantan are still normal, buyers demand has increased so the prices also increased.

This is because of delayed shipments in previous months due to the rainy season. Export shipments which were handled by Carsurin slightly increased especially destined for India and China, while domestic

shipments remained stable. Based on the field monitoring result, the intensity of rainfall has begun to decline so mining went smoothly, both at Sungai

Danau & Batulicin, as well as Sungai Putin and Binuang. Sumatera People of the village of Muara Maung in Merapi Barat district complained of floating dust covering their homes, as coal-

hauling trucks keep driving on local routes despite Governor of South Sumatera's ban on access to public roads issued ear-lier in 2013.

Weather in April In its recent forecast, the Indonesian Meteorology, Climatology and Geophysics Agency or BMKG said that regions along the

northern coast of Sumatera down to the shores on the southern part of West Sumatera will see rain of medium intensity. Medium rainfall is also forecast in Jambi Palembang. Pontianak-Palangkaraya border regions will also experience medium rain. Samarinda will record medium rainfall. Banjarmasin is forecast to see medium-intensity.

I N T H E F I E L D B Y C A R S U R I N

A P R I L 2 0 1 3

VOLUME 47, ISSUE 4

CARSURIN COAL & MINERALS INSIDER W W W . C A R S U R I N . C O M

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C O A L P R I C E D R O P S B Y 2 . 5 8 P E R C E N T I N O N E W E E K Kontan.co.id, Jakarta : Coal prices have continued to plunge in the last seven days, as world markets, particularly the in-

dustrial sectors, are facing eco-nomic uncertainty. A number of European economies reported poor results while the US an-nounced budget cuts for the year. The coal price for April 2013 de-livery at ICE Futures fell 0.55

percent to US$ 90.55 per metric ton on Thursday (3/7) from the level published a day earlier. The commodity saw a 2.58-percent drop within a week -- a relatively substantial price correction. Earlier this month China started to apply new emission standards to six sectors of its industry responsible for significant levels of pollution. Vital sectors in the country -- power generation included -- mostly rely on coal as their source of energy, making China the world's largest user of coal. The new policy is certainly a hard blow for international coal producers. (March 10, 2013) I N D I A N I M P O R T E R S H I T H A R D B Y I N D O N E -S I A N C O A L P R I C E S U R G E Tambang.co.id, Kolkata : A recent surge in demand for coal to fuel power generators in India and a rumor of ban on export have initiated a rise in prices of Indonesian law-rank coal. While high-grade coal from South Africa had to suffer from weakening prices, last month saw prices of Indonesian coal with 3,800-4,200 gross calorific values (GCV) hiking up be-tween 10 and 15 percent, FOB. From January this year, prices of products from Indonesia had remained flat because production was hampered by poor weather. A change started to occur mid-February, when the government of Indonesia, the world's largest exporter of thermal coal, announced its plan to restrict exports of low-rank coal. (March 19, 2013) F E B R U A R Y ' S C O A L P R O D U C T I O N R E A C H E S 3 3 M I L L I O N M E T R I C T O N S Kontan.co.id, Jakarta : Indonesia reported a national produc-tion level of 33 million metric tons in February 2013: 25 mil-lion went to export markets while the remaining supplied do-mestic requirements. Last month's production was compara-tively flat. Edi Prasodjo, Director of Coal Business Development of the Ministry of Energy and Mineral Resources, said Indonesia's coal production over the first two months of 2013 totaled 66 million metric tons. He associated the higher level of production reported early in the year with the increased coal prices. The upward price movement was a result of rising demand in world markets and greater coal needs to supply domestic power generator projects.

The Indonesian coal index price released by the Directorate Gen-eral of Minerals and Coal of the Ministry of Energy and Mineral Resources for March 2013 stands at US$ 90.09 per metric ton, rep-resenting a 2-percent increase

from the government's February rate of US$ 88.35 per metric ton. (March 16, 2013) I N D O N E S I A A N D C H I N A S E E K C L E A N C O A L E N E R G Y T E C H N O L O G Y Republika.co.id , Nusa Dua : Both Indonesia and China hope to be able to form a partnership to conduct researches for the development of clean coal technologies and technological breakthroughs to find ways of using low-rank coal in the up-coming 'Indonesia-China Coal Summit' conference. "Coal will continue to be our primary source of energy, but since it leads to many issues including pollution to the environment, it is vital that we find technologies to help us produce green coal,"

said Head of the Agency for the Assessment and Application of Technology (BPPT), Dr. Marzan A. He underlined the significance of developing a coal-processing technology capable of reducing emission of carbon, a substance

known to have negative impacts on people's health and con-tribute to global warming. (March 20, 2013) S U C O F I N D O T O E X P A N D T O T H R E E A S I A N C O U N T R I E S bisnis.com, Jakarta : SOE engaging in survey service, PT Sucofindo ready to expand its business to Malaysia, Singapore and Hong Kong. Sucofindo President Director, Fahmi Sadiq said those countries are considered as strategic partners for Indonesia’s trade. He gave example in Malaysia, Sucofindo will focus on developing inspection and certification services in the plantation sector. Meanwhile in Singapore and Hong Kong, it will be developed inspection services, testing and certification of industrial and consumer products. The merger between Sucofindo and Surveyor Indonesia is being handling by the Government, the Company’s competitiveness in surveying services is expected to increase in international market. (March15, 2013) C O P P E R P R I C E S H I T H I S T O R I C A L L O W Kontan.co.id, Jakarta : Prices of copper plunged into their

lowest within the last three months. Data on China's poor-performing manufacturing sector has brought down prices of indus-trial metals, and against the back-drop of currently highest levels of copper supplies in Shanghai, Lon-

don and New York since May 2010, The average price of the commodity for a three-month con-tractual delivery at LME was down on Friday (3/1) by 1.43 percent to US$ 7,703 per metric ton from the level recorded a day earlier. The metal also saw a 1.26-percent decline over a one-week period However, Goldman Sachs Group Inc, wrote in its report, Buy-ing the Dip, that the world markets would see prices going back up soon. The group believes that China would step up its imports while the housing sector in the US would be expand-ing -- factors leading the price of copper to recover to US$ 9,000 per MT within the next six months. (March 04, 2013)

C A R S U R I N C O A L & M I N E R A L S I N S I D E R

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W A R N I N G : T I N S M U G G L I N G R E M A I N S A N I S S U E Kontan.co.id, Banjarmasin : Executive Director of Indonesian

Resources Studies (IRESS), Marwan Batubara, urged the government to bring down tin smugglers operating in many parts of Bangka and Belitung. He also insisted that law en-forcers and businesses in-

volved in these unlawful practices be brought to justice. Indi-cations of tin smuggling, according to Marwan, are evident from many smelters found today in neighboring Singapore and Malaysia. Smuggling is proof of Indonesia's very weak law enforcement, which in turn harms the government and law-compliant, royalty-paying businesses. He also questioned the government's unintelligible move of allowing tin-processing plants to built outside the province of Bangka-Belitung, the country's main producers of the mineral (March 07, 2013) T H R E E R E G E N C I E S I N S O U T H K A L I M A N T A N P R O N E T O I L L E G A L M I N I N G Kompas, Banjarmasin : There are three regions in South Kali-

mantan identified as areas where illegal mining is highly likely to take place: Tanah Laut, Tanah Bumbu and Ko-t a b a r u . Head of South Kalimantan Pro-vincia l Forestry Off ice, Rakhmadi Kurdi, mentioned

several factors making them vulnerable to such operations. "They are remote and have vast areas of land with huge re-s e r v e s o f c o a l . " Sites operating with no government licenses and permits are estimated to total more than 100. Disguised operations have been running in separate locations with some in local forests. There were even reports that illegal miners have started to clear parts of protected forests in the regions. (March 07, 2013) M O R O W A L I O F F I C I A L S U R G E S E V E N M I N -E R S T O S T O P M I N I N G N I C K E L Bisnis.com, Palu : The regional government of Morowali in

Central Sulawesi recently or-dered seven IUP-holders to stop nickel exploration opera-tions following officers' findings of improper mining practices. "We carried out unannounced inspections two weeks ago on their sites, and found proof that

they did not follow statutory procedures -- technically and environmentally," said the region's secretary, Syahril Ishak. Ishak refused to name the seven companies, and only identi-fied them as miners operating in Bahodopi, a sub-district in Morowali where most IUP holders are operating. (March 02, 2013) A S T R A D A : E N E R G Y A N D M I N E R A L R E -

S O U R C E S M I N I S T E R I A L D E C R E E D O E S N O T A C C O M M O D A T E A R T I S A N A L M I N I N G Tambang.co.id, Jakarta : Decree Number 24 of 2012 of the Minister of Energy and Mining, which replaces Ministerial De-cree Number 28 of 2009, is considered to negate the govern-ment-initiated partnership and nucleus-plasma schemes, and contradict the main principles of Pancasila and the 1945 Con-stitution. The statement was made by Johan Murod, repre-senting the Board of Patrons of Bangka-Belitung's Association of Artisanal Miners or Astrada during a dialogue with Commis-sion VII of the House of Representatives. The association expects the government to allow locals to operate individual mining operations in the province and give them similar treat-ments received by large-scale mining companies like PT Ti-m a h ( P e r s e r o ) T b k o r P T K o b a t i n . In response to Astrada's petition, H. Jamaludin Jafar, SH, a member of the House Commission VI from the Partai Amanat Nasional fraction, explained his concern that any mining op-erations run by artisanal miners with no legal entity backing would risk harmful environmental impacts, especially at post-mining stages. Indonesia's tin industry observer, Bambang Herdiansyah, shared the same view, and believed that the only issue to be addressed would be the designation of areas for artisanal mining as other points had been catered for in both Government Regulation No. 23 and Energy and Mineral Resources Ministerial Decree No. 24 questioned by the asso-ciation. (March 06, 2013) P O L I C Y O N H A Z A R D O U S A N D T O X I C W A S T E U N S U I T A B L E F O R M I N I N G Bisnis.com, Jakarta : Government's regulatory provisions on toxic and hazardous waste management are considered by many to be unsuitable for application by the mining sector as

they do not clearly classify wastes generated from activities and operations by chemical con-tent, raw material and process. Director General of Minerals and Coal of the Ministry of Energy and Mineral Resources, Thamrin Sihite, said the government

regulation draft on toxic and hazardous wastes would need to be revised. The draft puts fly ash and bottom ash, residues of coal combustion processes, under this category of wastes. Criteria for determining matters as toxic and hazardous, in-cluding the levels of mercury and selenium contained, would have to be clearly stated in the provisions, and laboratory analyses used as bases for waste classification. Thamrin pointed out that different types of bottom ash and fly ash have different chemical makeups, and not all of them are toxic and hazardous. Deputy Minister of Energy and Mineral Resources, Susilo Siswoutomo, promised to refer to the Basel Convention on waste management already ratified by the government of Indonesia. Reference to the international rules will ensure alignment of all national regulations related to toxic and hazardous wastes. (March 15, 2013) D E V E L O P M E N T O F M I N E R A L S M E L T E R S T O T A K E M O R E T H A N 5 Y E A R S Bisnis.com, Padang : The five-year timeframe allowed by the


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government under Law No. 4/2009 for KK-holding miners for the development and construction of mineral ore smelters

may not be enough. Head of Mining Law Working Group of Perhapi, Hendra Sinadia, re-cently said that a smelter pro-ject would take at least seven years to complete all stages of its construction. Achmad Ardianto, Chairman of

Perhapi, added that the government should have calculated accurately the time needed for completion of a smelter-construction project. Such an undertaking would require a longer duration to ensure supplies of raw materials and economies of scale. Every commodity has its own characteris-tics, and calls for different processing and refining phases. Therefore, for guaranteed economies of scale and raw mate-rial supplies, cluster-based smelter development is to be de-signed and applied by the government. (March 07, 2013)

P T F R E E P O R T R E Q U I R E D T O B U I L T S M E L T E R B Y 2 0 1 4 Bisnis.com, Jakarta : Indonesian Ministry of Energy and Min-eral Resources has asked PT Freeport Indonesia to submit a

proposal and attach it with a list of identified and potential chal-lenges in setting up a local min-eral ore smelter for a review and further assistance by the government. Director General of Minerals and Coal of the Min-istry of Energy and Mineral Re-

sources, Thamrin Sihite, said it would be improper for Free-port to talk about economies of scale of a smelter construc-tion project. Domestic processing and refinery of minerals by KK-holders are statutory, and these companies are required by law to have smelters developed and built by no later than 2014. President Director of PT Freeport Indonesia, Rozik B. Sutjipto, said his company would be prepared to take part in and support a smelter construction feasibility study jointly administered with a government-appointed agency -- either a state-owned entity or a team of university experts. The com-pany is currently undergoing an internal review of several options related to the study as part of the implementation of state-mandated Law Number 4/2009. (March 12, 2013) P T B A S E L L S C O A L T O I N D O N E S I A P O W E R Investor.co.id, Jakarta : PT Tambang Batubara Bukit Asam Tbk (PTBA) was awarded a sale & purchase contract by PT Indonesia Power (PT IP). Under the agreement, the company

is required to supply up to 51.8 million metric tons of coal for its client's Suralaya coal-fired power generation project in Merak, Banten. "The contract value is based on the govern-ment's coal price and the esti-mated costs of transporting the

product by rail from the mining site to the designated port,"

said PTBA's Corporate Secretary, Joko Pramono. He added that the terms of the agreement would be mutually adjusted to accommodate annual arrangements made by both parties to the contract over the period lasting from January 1, 2013, to December 31, 2022. PTBA is to supply PT IP shipments of coal with a calorific value of 5,000 kcal/kg, FOB (Free on Board), Port of Tarahan. (March 15, 2013) K U T A I T I M U R A D M I N I S T R A T I O N W I L L S E T I T S O W N R U L E S O N M I N I N G M O R A T O R I U M Tambang.co.id, Jakarta : The regent of Kutai Timur, Isran Noor, questioned the recent move made by East Kalimantan's governor, Awang Faroek, to issue a letter on moratorium, and considered its application baseless. The region would there-fore draft and issue a regional regulation if the provincial gov-ernment insisted on exercising the policy. While the letter only calls for temporary suspension of license application approv-als, Noor has decided not to follow the instruction given. He was concerned that compliance would cause his region to lose a substantial part of revenues it has been generating from the mining sector. The governor of East Kalimantan, Awang Faroek, recently issued Letter of Instruction Number 180/1375-KH/2013 con-cerning temporary mining licensing suspension. He appealed that regents/mayors under his jurisdiction to not issue any new permits within the given timeframe. Kutai Timur Bureau of Statistics confirmed in its 2012 report that the regency's economy was still dependent on the mining sector (88.43-percent by 2011). Operations of PT KPC, one of the largest coal miners in Asia, have been a major source of income for the regency. As a protest against the provincial government policy, the regent has reportedly prepared a bylaw -- a move expected to keep the region enjoying today's level of reve-nues from the mining sector. (March 22, 2013) I T M G S U F F E R S D E C L I N I N G C O A L R E S E R V E S Kontan.co.id, Jakarta : A recent strategy taken by PT Indo Tambangraya Tbk (ITMG) to boost coal sales appears to have

a side effect. The company's coal reserves were down by 7.03 percent as at December 31, 2012 to 549.1 million met-ric tons (2011: 590.6 million). ITMG management said that their 2012 high sales perform-

ance was responsible for the dwindling reserves. They man-aged to sell 27.19 million metric tons of coal last year, 10.08 percent higher than the total sold in 2011 (24.7 million). Indo-minco mine remained ITMG's main coal source, contributing some 14.46 million tons of the commodity. At a production level of 7.83 million MT, Trubaindo made it as ITMG's second-largest coal contributor. Other operations -- Jorong, Kitadin and Bharinto -- made up the rest. Higher sales were possible as ITMG managed to step up production: coal produced reached a total of 27.5 million in 2012, up 10 percent from 2011 (25 million). With the current level already a high, the company believes that an even higher level of production and sales is still achievable. ITMG has set a coal production & sales target of 29 million metric tons. (March 23, 2013)


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A D A R O , I N D O , P T B A B O O S T C O A L O U T P U T S A M I D P R I C E D E C L I N E bisnis.com, Jakarta : Although prices are still declining, three coal companies with the largest market capitalization, PT

Adaro Energy Tbk (ADRO), PT Indo Tambangraya (ITMG), and PT Perusahaan Tambang Batu Bara Bukit Asam Tbk (PTBA) keep boosting their output this year. Adaro targeted an increase of 6% -12% to 50 million tons - 53 million tons.

Indo Tambangraya set the growth by 5.4% to 29 million tons, while Bukit Asam eyed 27% higher output from 15.6 million tons to 19.8 million tons. Coal price benchmark in January reached US$87.55 per ton, February reached US$88.35 per ton, and March US$90.09 per ton. Although there’s an increasing trend, the average price was US$88.66 per tons, still lower than last year’s coal price benchmark of US$95.48 per ton. In line with the price drop, those three companies are also planning to cut operating expenditure. (19 March 2013) W E A K C O A L S A L E S A F F E C T A D A R O ' S R E -S U L T S Kontan.co.id, Jakarta : Falling prices of coal had an effect on

the performance of PT Adaro Energy Tbk (ADRO) in 2012. The company saw its revenues declining by 6.6 percent to US$ 3,72 billion and its net profit down significantly by 30.5 per-cent to US$ 383 million. "Our

business has always been dependent on the world's coal mar-kets, and the effect of plunging coal prices on our 2012 re-sults was expected and unavoidable," said Garibaldi Thohir, President Director of Adaro. (March 22, 2013) G A R I B A L D I A C Q U I R E S T K G A Kontan.co.id, Jakarta : The recent backdoor listing of PT Toko Gunung Agung Tbk by PT Permata Energy resulted in a change in TKGA's board membership structures. The listed company also has a new name: PT Permata Prima Sakti Tbk. Garibaldi Thohir, President Director of PT Adaro Energy Tbk (ADRO), appears as a new member of the board, serving as Vice President Commissioner of TKGA. The changes followed a limited public offering in which new shares were sold to mark the shift of core business of the company from book

publishing & sales to coal. TKGA is set to acquire a total of 480,000 of shares in PT Per-mata Energy Resources at a price of Rp 1 million per share, generating some Rp 480 billion. The acquisition will give Toko

Gunung Agung a 99.79-percent stake in Permata Energy. (March 05, 2013) T I M A H S P E N D S R P 2 5 . 8 5 B I L L I O N O N J A N U -A R Y - F E B R U A R Y E X P L O R A T I O N S Bisnis.com, Jakarta : PT Timah Tbk (TINS) reported Rp 8.65

billion in capital expenditure (capex) and another Rp 17.2 billion in operational expenditure (opex) for explorations car-ried out between January and February 2013. Corporate Sec-retary of the company, Agung Nugroho, unveiled that Timah's prospect drilling operation last month resulted in a measured reserve of 1,534 metric tons. Geological and geophysical sur-veys and prospect drilling had identified both inferred and identified resources of 3,050 MT and 1,374 MT respectively. Nugroho added that his company went to the regional waters of Kundur and Bangka for prospect and detailed drillings. Work in Kundur only covered protected or alternatives sites due poor weather and high tides. On-shore drilling operations in Bangka and Belitung, indicated as primary, have found sediments with quartz and tourmaline ingrained. Alluvial drill-ing work is still ongoing for evaluation purposes to estimate production levels on the island of Bangka. (March 08, 2013) A N T A M T O S E T U P A Z I R C O N I U M P L A N T Kontan.co.id, Jakarta : PT Aneka Tambang Tbk (ANTM) plans to construct a plant for refining zirconium to produce an end compound: zirconium oxide (zirconia). A site for the project has been designated at Mandor in the regency of Landak in West Kalimantan. The plan has been proposed for the research and engineering capacity building program run by the Indonesian Ministry of Research and Technology, and will involve three entities for its implementation stages. In addition to the zirconium refinery project, Antam is also developing line-4 of its ferronickel plant in Pomalaa, South-East Sulawesi, estimated to cost approximatly US$ 102 mil-lion, out of a total investment of US$ 450 million-US$ 500 million. It aims at improving the efficiency and capacity of the currently operational ferronickel plant. Approval has been obtained from both the Ministry of Energy and Mineral Re-sources and the Indonesian Investment Coordinating Board (BKPM) for the purchase of 7.5-percent holding in PT Nusa Halmahera Minerals (NHM) from Newcrest Mining Limited. (March 06, 2013) P T F R E E P O R T R E Q U I R E D T O B U I L T S M E L T E R B Y 2 0 1 4 Bisnis.com, Jakarta : Indonesian Ministry of Energy and Min-eral Resources has asked PT Freeport Indonesia to submit a proposal and attach it with a list of identified and potential challenges in setting up a local mineral ore smelter for a re-view and further assistance by the government. Director Gen-eral of Minerals and Coal of the Ministry of Energy and Mineral Resources, Thamrin Sihite, said it would be improper for Free-port to talk about economies of scale of a smelter construc-tion project. Domestic processing and refinery of minerals by KK-holders are statutory, and these companies are required by law to have smelters developed and built by no later than 2014. President Director of PT Freeport Indonesia, Rozik B. Sutjipto, said his company would be prepared to take part in and support a smelter construction feasibility study jointly administered with a government-appointed agency -- either a state-owned entity or a team of university experts. The com-pany is currently undergoing an internal review of several options related to the study as part of the implementation of


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state-mandated Law Number 4/2009. (March 12, 2013) A D A R O C U T S C A P I T A L E X P E N D I T U R E T O U S $ 2 0 0 M I L L I O N bisnis.com, Jakarta : A second national giant coal miner, PT Adaro Energy Tbk (ADRO-coded stock), has cut its capital

expenditure in 2013 from US$400 million to US$150 million- US$200 million. This was revealed in PT Bahana Securities’ research released on Wednesday (3/13). An analyst of Bahana Irwan Budiarto stated capital expenditure (capex) cut

following low coal prices. "Most of the capex will be spent in the first half," he said. Irwan said Adaro will use capital expenditure to fund three projects. This year, Adaro expects to produce 50-53 million tons of coal. The target is 6% -12% higher than the 2012 production of 47.2 million tons and the above prediction Bahana, which is at 49.5 million tons. (March 14, 2013) A B M I N V E S T A M A C O A L U N I T G E T S $ 1 5 0 M L O A N F O R A C E H P R O J E C T S The Jakarta Globe, Jakarta : Reswara Minergi Hartama, a unit of ABM Investama, has obtained a combined $150 million loan, a corporate secretary at ABM said in a statement on Thursday. The loan was acquired from Qatar National Bank, Bank QNB Kesawan and Indonesia Exim Bank. The company plans to use the proceeds to help finance development of coal mining assets in Nagan Raya and West Aceh in Aceh. Through Reswara, ABM owns several coal mine concessions in Indone-sia. The QNB Group — including Indonesian unit QNB Kesa-wan — will channel $75 million to Reswara, with the other half of the $150 million coming from Exim Bank. In Aceh, ABM Investama plans to build a coal crusher, renovate a 12.5-kilometer road to aid transportation of mined coal, and build a stockpile, barge loader, offices and other facilities to support operations. Adrian E. Sjamsul, director of corporate strategy at ABM, said work was expected to be complete by the end of this year. Reswara controls 550 million metric tons of coal reserves through four concessions in South Kalimantan and Aceh. ABM announced in January that it had entered a deal to supply 255,000 tons of coal to Lafarge Cement Indonesia, a cement maker with operations in Aceh. The contract was se-cured by Reswara’s unit Media Djaya Bersama. Coal sold by Media Djaya will be used as fuel in a cement plant belonging to Lafarge Cement Indonesia, a local affiliate of major French industrial company Lafarge. (March 16, 2013) P T B U K I T A S A M O P E R A T E S P L T U P E L A B U -H A N T A R A H A N Republika.co.id, Palembang : PT Bukit Asam Tbk's coal-fired electric generator went online in July 2012 with a 3x10-MW combined capacity, and the company is now making prepara-tions to run its project in the Port of Tarahan. "Our plan is to start commissioning our 2x8-MW generator in Tarahan to supply electricity to the local port. Port operations are cur-rently dependent on the energy sourced from PT PLN," said PTBA's Corporate Secretary, Joko Pramono. President Director

of PT Bukit Asam, Milawarma, said that the power generation project in Tarahan was part of the company's strategic plan for expanding the port which directly faces the Strait of Sunda. "Port expansion involves increasing its handling capac-ity: from 13 million to 25 million metric tons per annum by 2014. When infrastructures and facilities are in place, Tarahan will be able to handle cargo ships of 80,000-150,000 DWT. The expansion would need greater supplies of electricity," Milawarma concluded. (March 20, 2013) P T T I M A H N E T P R O F I T S L U M P S 5 2 % bisnis.com, Jakarta : PT Timah net profit during last year fell 52% to IDR431.57 billion from IDR896.78 billion in 2011. In line with that, earnings per share also slumped to IDR86 from IDR178. The Company’s Corporate Secretary, Agung Nugroho said lower net profit was caused by lower selling price of tin. In 2011, the average price of US$26,714 per ton, while in 2012 only US$21,505 per ton. While Company’s revenue fell by 10.6% to IDR7.82 trillion from IDR8.75 trillion. sales of refined tin and tin solder are still the largest contribution to revenue which reached IDR7.18 trillion or 91.8% of total revenue. Revenue of prod-ucts and goods sales during 2012 decreased, such as refined

and tin solder sales, coal sales from shipyard services, explora-tion, electricity and workshop services. Of all sales products, only tin chemical sales which posted growth to IDR109.79 billion from IDR61.43 billion in 2011.( March 21, 2013)

C O A L M I N E R B U K I T A S A M I N V E S T S $ 8 0 M I N M Y A N M A R The Jakarta Globe, Jakarta : State-controlled coal miner Bukit Asam has set aside $80 million to expand its business into Myanmar, joining a string of firms jostling for a slice of the Southeast Asian nation’s burgeoning economy. The company said last week it planned to build a mine-mouth coal-fired power plant in Myanmar, which will become the biggest of its kind in the country. The company’s net income shed 6 percent to Rp 2.9 trillion ($299 million) last year, down from Rp 3.09 trillion a year earlier. Revenue rose 10 percent to Rp 11.59 trillion, from Rp 10.58 trillion in 2011. Bukit Asam sells 45 percent of the coal it produces to overseas buyers, including those in Japan, Taiwan and Vietnam. Based in Muara Enim, South Sumatra, the company has plans to develop infrastruc-ture for its Indonesian coal mines. In October 2012, Bukit Asam said that it had budgeted around $580 million over the next four years to build infrastructure facilities to support its core business. It laid out plans to develop two mine-mouth

coal-fired power plants in Su-matra with a combined capac-ity of 1,460 megawatts. The company, 65 percent owned by the government, has also signed a memorandum of un-derstanding with state electric-ity supplier PLN and a Malay-


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sian utility firm to develop a 1,200-megawatt coal-fired power plant, which will produce electricity for exporting to Malaysia. (Maret 26, 2013) A B M I N V E S T A M A S U B S I D I A R Y S E A L S C O A L C O N T R A C T W O R T H U S $ 2 2 5 M I L L I O N bisnis.com , Jakarta : PT Cipta Kridatama, a subsidiary of PT

ABM Investama Tbk (ABMM), acquired coal mining contract with PT Realita Jaya Mandiri worth US$225 million. A coal mining contract was signed by by the President Director of Cipta Kridatama Boedi Santoso, President Director of Realita

Jaya Mandiri (RJM) Arif Syaifuddin, and the Director Realita Jaya Mandiri of Agustinus Harmasi, last Friday (3/15), as quoted from the press statement received on Tuesday (3/19). The contract lasts for five years until 2018 for coal mining services in Musi Banyuasin, South Sumatra. Cipta Kridatama (CK) will work on overburden removal and rental of heavy equipment. President Director of CK Boedi Santoso said cooperation with RJM is in line with the Company's efforts to be the best partner in providing operational supply of environmentally friendly coal. (20 March 2013) V A L E I N D O N E S I A B L A M E S F A L L I N G N I C K E L P R I C E F O R P R O F I T D I P The Jakarta Globe, Jakarta : Net income at the Indonesian unit of global nickel giant Vale last year fell to less than a quarter of the figure a year earlier, unaudited results released on Thursday showed, a dramatic plunge the company blamed on lower global prices for the metal. Vale Indonesia posted a net income of $67.5 million in 2012, down 80 percent from $333.8 million the previous year. Revenue fell to 19 percent to $967.3 million from $1.2 billion. The biggest nickel producer in Indonesia said its average realized price per metric ton in 2012 was $13,552, down 26 percent on the 2011 figure. The value of Vale Indonesia’s sales fell 22 percent last year compared to 2011. The Jakarta-based company said its cost of generating revenue rose 10 percent, mainly due to higher fuel price and increased supply costs associated with furnace repair activities executed in the first half of 2012. Vale Indonesia has mining operations in Sorowako, South Sulawesi; Pomalaa, Southeast Sulawesi; and Bahodopi, Central Sulawesi. (March 01, 2013) M E R A P I L A H A T R E S I D E N T S S E A L P T B A U R O A D A C C E S S Sripoku, Lahat : Dozens of local people from the village of Merapi in the district of Merapi Barat, Lahat regency, blocked the entrance to a mine operated by PT Bara Alam Utama

(BAU) on Thursday (3/7/2013). They demanded compensation from the management for the damage to rubberwood planta-tions nearby caused by the com-pany's coal-processing wastes. Their trees no longer produce latex; many have even died.

Yandri (34), a Merapi villager, said that locals were angered by the fact that PT BAU did not properly manage their wastes. Waste water generated in coal-mining activities flooded com-munity rubber plantations, preventing easy access to tapping areas. (March 07, 2013) B U M I P L C B A C K S U P B E R A U , L E A V E S N O N E I N B U M I The Jakarta Post, London : London listed Bumi plc is prepar-ing for management changes and funding assistance for its Jakarta-listed subsidiary PT Berau Coal Energy, while at the same time seeing its representatives leaving another subsidi-ary PT Bumi Resources (BUMI) in a separation move. Bumi plc chief executive officer Nick Von Schirnding, who attended Berau’s extraordinary general meeting of shareholders in Ja-karta on Thursday, said that his company would continue improving Berau after the London firm executes a separation plan with Indonesian shareholder Bakrie Group. Bumi plc is working on a separation plan with its 23.8 percent indirect shareholder Bakrie Group. Under the plan, politically wired Bakrie Group will take over Bumi plc’s entire 29.2 per-cent stake in Bumi Resources in a share swap and cash trans-action worth US$278 million. Von Schirnding said that Bumi plc would consider options for the usage of the money — in-cluding as Berau’s capital expenditure, to reduce the level of debt or support organic growth — after its separation pro-posal is approved in the next shareholders meeting in London. Bumi plc will need a 75 percent vote from shareholders to pass the Bakrie Group’s proposal. Von Schirnding said that he saw no issue concerning the vote, including blocking for the passage of the proposal from Bakrie Group’s rival Nathaniel Rothschild, Bumi plc co-founder, who holds a 14.8 percent stake. (March 08 , 2013) M I N E R S O W E R P 1 . 8 B I L L I O N I N F E E S Kompas, Kefamenanu : A total of 39 manganese mining com-

panies operating in the regency of Timor Tengah Utara (TTU), East Nusa Tenggara, are falling behind with fee payments -- due from 2010 to 2012 -- totaling Rp 1,862,637,800, with the following

breakdown: exploration - Rp 1,459,918,200; operation-production - Rp 402,719,600. The regent of TTU, Raymundus Sau Fernandes, in a meeting with 40 foreign and local inves-tors held at his office, said that investing companies with fee payments in arrears would be subject to heavy penalties. Head of the region's Mining and Energy Office, Robertus Na-has, revealed that those still owing money to the government included a number of miners who had transferred their mining stakes without informing the government through the regional office, making it difficult for his staff to contact them regard-ing their fee payment obligations. (March 05, 2013) P T M A M A H A K C O A L M I N E I N N E G O T I A T I O N W I T H B A R G E O P E R A T O R Tambang.co.id, Jakarta : Kangaroo Resources, a company listed on the Australian Stock Exchange, is discussing options with a barging service provider for the shipment of its coal. The company has 133,000 metric tons of coal currently in the


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stockpile to be transported to Balikpapan's coal terminal. Platts, an energy information agency, unveiled that the coal waiting to be shipped came from the Australian business' coal miner in East Kalimantan, PT Mamahak Coal Mining. Kangaroo holds a 99-percent interest in Mamahak. In December 2012, Mamahak signed a contract to supply coal to Bayan Resources at an agreed price of US$ 75 per metric t on. On March 7, the miner had to temporarily halt its coal shipments following disputes between its mining contractor, PT Putra Perkasa Abadi, and its field personnel. (March 20, 2013)

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G R A V I T Y G E O P H Y S I C S T E C H N I Q U E S

Gravity techniques may seem a strange way to explore for coal but the following case history will explain. It relates to exploring for anomalous “lows’ in the regional gravity field. It works best when low density sediments overly higher density basement rocks. Several years ago an exploration company of the Australian BHP Group undertook a gravity survey for possible hidden alluvial gold deposits located in channels in the eroded irregu-lar surface of the Palaeozoic basement in the former Clermont Gold Field area of Central Queensland, Australia. The basic geology was the (featureless) black soil plains (weathered basaltic volcanics) overlying alluvials known elsewhere to be gold bearing. In turn these overlay a Palaeozoic basement of slates. The plan was to search for channels in the higher den-sity basement where possibly concentrations of gold might be found. The theory was that the density contrast could be such that channels would show up as gravity “lows”. By way of further explanation, over the nearby Blair Athol steam coal deposit the difference in the vertical component of the earth’s gravity field showed a massive gravity “low”. (At the Blair Athol open cut deposit, the flat lying No 3 seam is a maximum 30 m at its thickest.) In its program BHP found a large gravity “low” . Drilling be-neath the black soil plain at its lowest gravity anomaly point revealed not gold bearing alluvials but a seam of coal 33m thick This is the Wolfang deposit! Just as the proof of the pudding is in the eating so the proof of the anomaly is in the drilling! Tip. If your company has a concession whereby potential flatlying coal sediments overly higher density basement, consider using gravity survey methods as part of your range of tools search-ing for coal seams. [By Antony H. Osman FAusIMM (CP) MMICA FGS - Senior Geological , Coal & Minerals Advisor — CARSURIN. For all inquiries relating to planning and assess-ment of JORC / KCMI compliant coal programs plus assessment of marketabil-ity, coal & minerals; contact [email protected]]

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TIP OF THE MONTH

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S P E C I A L I U P F O R C O A L T R A D I N G –

U P D A T E S The long waited implementing regulation setting out, in detail, what are the rights and obligations of a holder of a Special IUP for Trading (“Special IUP”) is yet to be issued (“Special IUPs Implementing Regulation”). This inevitably gives rise to some uncertainty for all holders of and/or applicants for Spe-cial IUPs. Commencing year 2013, the Special IUPs issue by Ministry of Energy and Mineral Resources (“MoEMR”) now specify the name of producers of coal (“Coal Producers”) that Special IUP Holders are allowed to off-take coal from and to further sell to their buyers. This leads to the question of whether or not holders of Special IUP for Trading may off-take coal from producers other than the producers specified in its Special IUP for Sales. One of the provisions under the Special IUP states that, in the event that a Special IUP Holder intends to carry out sales and transportation of coal from companies other than the Coal Producers, then the Special IUP Holder is obliged to submit an application for adjustment of its Special IUP to Directorate General of Mineral and Coal (“DGoMC”). Based on verbal confirmation from DGoMC, the “Special IUP’ Adjustment”, as provided for in Special IUP, means that Spe-cial IUP Holder will need to obtain approval from DGoMC prior to entering into any new sale and purchase of coal agree-ments which are not yet included in Special IUP Holder’s Work Plan and Budget (Rencana Kerja dan Anggaran Belanja or “RKAB”) for the preceding year. If the names of the coal producers are already included in the RKAB of the preceding year submitted by the: (i) producer of coal (as the holder of IUP OP) itself and (ii) Special IUP Holder (as the holder of the Special IUP for Trading) and approved by DGoMC, then separate approval from DGoMC of the new sale and purchase of coal agreements is not required. In the event that a Special IUP Holder submits application to obtain approval prior to entering a new coal sale and pur-chase agreement, and the application submitted by Special IUP Holder is acceptable, the DGoMC will issue written ap-proval of the new sale and purchase of coal agreements. In endeavour to avoid having to go back and forth to DGoMC and obtain individual approval of each new coal sale and pur-chase agreement, it is advisable for all Special IUP Holders to include all those coal producers from which it may want to source coal from in the near future, being the holders of Op-

eration Production Mining Business License (Ijin Usaha Per-tambangan Operasi Produksi or “IUP OP”) which (i) have IUP OPs on the Clean and Clear List and (ii) have obtained the Clean and Clear Certificate from DGoMC, in its RKAB for the coming financial year. DGoMC could not confirm when we may expect the Special IUPs Implementing Regulation to be issued and, therefore, until such time as the implementing regulation has been is-sued, DGoMC may, from time to time, change its unwritten policy re the terms and conditions of Special IUPs.

By Bill Sullivan, Licensed Foreign Advocate & Nurvita K. Siregar ,Senior Associ-ate with Christian Teo Purwono & Partners. is a Jakarta based, Indonesian law firm & a leader in Indonesian mining law & regulatory practice. [email protected] and [email protected]]

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LEGAL CORNER

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C A R S U R I N Q U A L I T Y W I T H I N T E G R I T Y

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ASKRINDO BUILDING, 5th Floor

Jl. Angkasa Block B9 Kav. 8, Kemayoran

Jakarta 10610 — INDONESIA

Ph: +62.21.654.0425 | Fax: +62.21.654.0418

E: [email protected], [email protected]

Coal & Minerals Services :

Geology survey, Mapping, Drilling, etc

Quality Control for mines production

Laboratory Services

Shipment survey (Quality & Quantity)

Export Verification

Maritime inspection ISPS Services :

Internal audit (minimum once a year)

Training (as required, for refreshing, change of PFSO, etc)

Drill (minimum once in 3 months)

Exercise (minimum once in a year)

Assessing and planning for ports and ships security worldwide accord-ing to the ISPS Code.

Reviewing / revising of PFSP, re-assessment of PFSA if needed

Consultancy LLOYD’S AGENCY :

Pre-shipment and Out Turn Surveys

Marine, Vessel and Cargo Damage Surveys

Claims Investigation and Settlement

Vessel Movements and Casualties Reporting

Storage / Warehouse Risk Assessment Surveys. PETROLEUM & CHEMICAL Services :

Loading and Discharging Supervision for Crude Oil, Petroleum Product, Petrochemical and Oleo chemical

Sampling and expediting for Crude Oil, Petroleum Product, Petrochemi-cal and Oleo chemical

ROB Bunker Survey

Pre-shipment Inspection

Tank Cleanliness Inspection

Wall wash test

Inventory Taking

Gas Free Inspection and Certification

Investigation survey for Cargo Oil losses

MARINE & CARGO Services :

Pre-Hire Survey

On / Off Hire Survey

Draught Survey

Towing and Lashing Survey

Investigation Survey

Condition Survey : - Pre-entry - Pre-purchase - Follow up - Valuation - Suitability

Hull and Machinery Survey

Cargo Hold Cleanliness

Bunker Survey (Quantity & Quality)

Project Cargo Management

Container Inspection

Damage Survey (Cargo & Vessel)

Weighing & Measurement

Nautical Inspection for the : - Panama Bureau of Shipping - Bahamas Maritime Authority

Ship Repairer’s Liability

Loss of Hire

Tally and Condition Survey

Container Inspection

Stuffing / Unstuffing and Seals / Unsealing

Preshipment and Preloading Condition

Weighing and Measuring

Pre-breakbulk, Opening Seals/Unsealing

Cargo Damage Survey

Cargo Quantity / Quality

Port Captaincy

PALM OIL Services :

Loading & discharging

Quantity & Quality determination

Remaining on board inspection

Sampling & analysis

Losses investigation

Tank cleaning inspection COTTON Services :

Seal Breaking

Devanning

Tally

Weighing

Sampling

Taring

Surveying / inspection

Sorting of bales to mark OIL & GAS Services :

Inspection & Certification - Pressure Vessels - Cranes / Lifting Gear - Pressure Safety Valves - Welding Inspection

Calibration of ATG

Non Destructive Test

Man Power Supply

Maintenance - Mechanical / Electrical - Engineering - Painting and Blasting - Fire Proofing

EPCI Project Management

HISTORY

Carsurin was founded in 1968 by Captain Hein Christopher Tiwan as Indonesia’s first private company specializing in independ-ent surveying and superintending services for the maritime and petroleum industries.

Since its inception, Carsurin has been dedicated to meeting the needs of its clients whilst delivering services with quality and integrity.

As Indonesia’ leading independent survey-ing and superintending services company, our corporate culture is based upon 5 universal and easily understood values:

1. Integrity: we will not compromise our integrity when delivering our services to our clients

2. Quality: we will provide our services with adherence to the highest standards of quality achiev-able

3. Commitment: we are committed to delivering our services in a professional manner

4. Determination: we are determined to work hand in hand with our clients to provide long-term solu-tions and services that are in their best interests

5. Development: we are committed to continuous develop-ment in human capital

PT. CARSURIN makes no warranties as to the accuracy of the information and assumes no liability when information is used in any way or form.

COPYRIGHT © 2012, PT. CARSURIN

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