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Friday, 16 March 18
INDONESIA COAL PRICE CAP POSES LIMITED RISKS TO PRODUCERS : FITCH
 Indonesia’s cap on the benchmark price of coal sold to the domestic electricity sector is unlikely to have a significant impact on the credit profiles of Fitch-rated mining firms, which export most of their production, says Fitch Ratings. In any case, our ratings are based on average benchmark price forecasts that are broadly in line with the cap of USD70/tonne imposed until end-2019, and so will not be affected.
The price cap, announced last week and set to apply from mid-March, is part of the government’s strategy to ensure low prices for electricity consumers as it looks to support industrial competitiveness and household disposable incomes. It froze electricity prices charged to industrial consumers earlier in the year, preventing Perusahaan Listrik Negara (PLN), the state-owned monopoly distributor, from passing on rising costs as coal prices were pushed up by an unusually cold Chinese winter. The Indonesian coal price benchmark, Harga Batubara Acuan (HBA), has exceeded USD95/tonne since January 2018, which might have necessitated an increase in government subsidies to PLN if the price cap had not been imposed.
The new regulations will mean coal miners miss out on some of the short-term upside from high prevailing coal prices, to the extent that they sell production to the domestic market. The government sets domestic market obligations for miners to ensure they meet local demand, which prevents them from simply diverting output toward the overseas market.
That said, only around one-fifth of Indonesia’s 461 million tonnes of coal production was sold in the domestic market in 2017, which suggests any loss of revenue will be limited. Indika would be the most affected among our rated coal miners, as around 15% of its volumes are sold to the domestic power sector. GEO Energy, Golden Energy Resources, ABM Investama and PT Toba Bara sell less than 10% of volumes to the domestic power sector. Domestic market obligations are likely to increase over the medium term, as the government looks to contain production and conserve coal resources for local power needs, but a sharp rise next year is unlikely.
Coal firms will therefore continue to receive the market price for the majority of their production. As a result, their financial performance might still exceed our expectations at the start of the year, when we had forecast an average Newcastle benchmark (6000 kcal) price of USD72/tonne in 2018 and USD67/tonne in 2019. The HBA on which the regulations are based broadly reflect Newcastle prices.
The new price regime does not include a floor on prices, and so provides no benefit to the mining firms in the event of a downturn. Prices will continue to fluctuate as before if the market price drops below USD70/tonne.
The price ceiling is unlikely to have any meaningful impact on PLN’s standalone credit profile. We would have expected the government to compensate PLN for losses through subsidies if high coal prices and fixed electricity prices had caused under recoveries. PLN’s IDR of ‘BBB’ is equalised with the sovereign rating due to its very strong government linkages.
Source: Fitch Ratings
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Thursday, 12 April 18
ALWAYS ACCESSIBLE
KNOWLEDGE TO ELEVATE
On 26 March 2018 Mr Justice Knowles determined that the berth warranty ‘always accessible’ must mean the vess ...
Wednesday, 11 April 18
CHINA UTILITIES PLAN NEW COAL IMPORT PRICE INDEX TO CURB VOLATILITY - REUTERS
China’s major utilities are preparing to launch their own coal price index for imports, an official at China Huaneng Group said, in a move th ...
Wednesday, 11 April 18
US-CHINA TARIFF THREATS RAISE GLOBAL TRADE RISKS - FITCH
Escalating tariff proposals by the U.S. and Chinese governments are increasing the risks of a full-blown trade war, says Fitch Ratings. The most li ...
Tuesday, 10 April 18
BUMA GRANTED ADDITIONAL LOAN FACILITY FROM BTMU TO SUPPORT GROWTH
Press Release: PT Delta Dunia Makmur Tbk. is pleased to announce that its subsidiary, PT Bukit Makmur Mandiri Utama ("BUMA"), signed an a ...
Monday, 09 April 18
APRIL INDONESIAN COAL PRICE REFERENCE DROPS TO LOWEST IN 2018
COALspot.com: According to latest ministerial decree, the Indonesian Coal Price Reference (HBA) decline 6.98 per cent in April 2018 compared to Mar ...
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- Kartika Selabumi Mining - Indonesia
- Videocon Industries ltd - India
- Sree Jayajothi Cements Limited - India
- Bukit Makmur.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Goldman Sachs - Singapore
- Australian Commodity Traders Exchange
- Attock Cement Pakistan Limited
- Aditya Birla Group - India
- Standard Chartered Bank - UAE
- Antam Resourcindo - Indonesia
- Therma Luzon, Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bahari Cakrawala Sebuku - Indonesia
- London Commodity Brokers - England
- SN Aboitiz Power Inc, Philippines
- Makarim & Taira - Indonesia
- Simpson Spence & Young - Indonesia
- Interocean Group of Companies - India
- Electricity Generating Authority of Thailand
- San Jose City I Power Corp, Philippines
- Mjunction Services Limited - India
- Orica Mining Services - Indonesia
- MS Steel International - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- Uttam Galva Steels Limited - India
- Thiess Contractors Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- South Luzon Thermal Energy Corporation
- LBH Netherlands Bv - Netherlands
- Planning Commission, India
- Rio Tinto Coal - Australia
- Eastern Energy - Thailand
- Sojitz Corporation - Japan
- Siam City Cement - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Indian Oil Corporation Limited
- GN Power Mariveles Coal Plant, Philippines
- AsiaOL BioFuels Corp., Philippines
- Coastal Gujarat Power Limited - India
- Siam City Cement PLC, Thailand
- Ministry of Transport, Egypt
- Bukit Baiduri Energy - Indonesia
- Vizag Seaport Private Limited - India
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- Tamil Nadu electricity Board
- Kobexindo Tractors - Indoneisa
- Indika Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- New Zealand Coal & Carbon
- Indian Energy Exchange, India
- Indogreen Group - Indonesia
- Eastern Coal Council - USA
- Kaltim Prima Coal - Indonesia
- Renaissance Capital - South Africa
- VISA Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- McConnell Dowell - Australia
- Alfred C Toepfer International GmbH - Germany
- Medco Energi Mining Internasional
- Vedanta Resources Plc - India
- Kapuas Tunggal Persada - Indonesia
- Economic Council, Georgia
- Intertek Mineral Services - Indonesia
- Rashtriya Ispat Nigam Limited - India
- European Bulk Services B.V. - Netherlands
- Mercator Lines Limited - India
- Cigading International Bulk Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- Kideco Jaya Agung - Indonesia
- Indo Tambangraya Megah - Indonesia
- GMR Energy Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Globalindo Alam Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Grasim Industreis Ltd - India
- Jaiprakash Power Ventures ltd
- Deloitte Consulting - India
- Borneo Indobara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Carbofer General Trading SA - India
- Bulk Trading Sa - Switzerland
- Dalmia Cement Bharat India
- Merrill Lynch Commodities Europe
- Iligan Light & Power Inc, Philippines
- CNBM International Corporation - China
- Formosa Plastics Group - Taiwan
- ICICI Bank Limited - India
- Kumho Petrochemical, South Korea
- Toyota Tsusho Corporation, Japan
- Thai Mozambique Logistica
- Coal and Oil Company - UAE
- Posco Energy - South Korea
- TeaM Sual Corporation - Philippines
- Romanian Commodities Exchange
- Kepco SPC Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Australian Coal Association
- OPG Power Generation Pvt Ltd - India
- Malabar Cements Ltd - India
- Mintek Dendrill Indonesia
- Sical Logistics Limited - India
- Bhushan Steel Limited - India
- Baramulti Group, Indonesia
- GVK Power & Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Energy Link Ltd, New Zealand
- India Bulls Power Limited - India
- Global Coal Blending Company Limited - Australia
- Petron Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chettinad Cement Corporation Ltd - India
- Ambuja Cements Ltd - India
- Oldendorff Carriers - Singapore
- Madhucon Powers Ltd - India
- Bhatia International Limited - India
- Pendopo Energi Batubara - Indonesia
- Riau Bara Harum - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- PTC India Limited - India
- SMC Global Power, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Tata Chemicals Ltd - India
- Metalloyd Limited - United Kingdom
- Manunggal Multi Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Commonwealth Bank - Australia
- Kalimantan Lumbung Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Larsen & Toubro Limited - India
- Minerals Council of Australia
- Latin American Coal - Colombia
- Mercuria Energy - Indonesia
- Lanco Infratech Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Parry Sugars Refinery, India
- PetroVietnam Power Coal Import and Supply Company
- Karaikal Port Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Singapore Mercantile Exchange
- Barasentosa Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Xindia Steels Limited - India
- Marubeni Corporation - India
- GAC Shipping (India) Pvt Ltd
- The Treasury - Australian Government
- Orica Australia Pty. Ltd.
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Trasteel International SA, Italy
- Bangladesh Power Developement Board
- Independent Power Producers Association of India
- Essar Steel Hazira Ltd - India
- Central Electricity Authority - India
- Star Paper Mills Limited - India
- Coalindo Energy - Indonesia
- CIMB Investment Bank - Malaysia
- The University of Queensland
- Pipit Mutiara Jaya. PT, Indonesia
- PowerSource Philippines DevCo
- Africa Commodities Group - South Africa
- Energy Development Corp, Philippines
- Electricity Authority, New Zealand
- Bhoruka Overseas - Indonesia
- Straits Asia Resources Limited - Singapore
- Ceylon Electricity Board - Sri Lanka
- Salva Resources Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Parliament of New Zealand
- Binh Thuan Hamico - Vietnam
- Aboitiz Power Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- SMG Consultants - Indonesia
- Ministry of Mines - Canada
- Ind-Barath Power Infra Limited - India
- White Energy Company Limited
- Heidelberg Cement - Germany
- Cement Manufacturers Association - India
- Samtan Co., Ltd - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Anglo American - United Kingdom
- Meenaskhi Energy Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Georgia Ports Authority, United States
- Miang Besar Coal Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Chamber of Mines of South Africa
- ASAPP Information Group - India
- Central Java Power - Indonesia
- Maheswari Brothers Coal Limited - India
- IHS Mccloskey Coal Group - USA
- Wilmar Investment Holdings
- Neyveli Lignite Corporation Ltd, - India
- Jindal Steel & Power Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bayan Resources Tbk. - Indonesia
- Gujarat Sidhee Cement - India
- Indonesian Coal Mining Association
- Bharathi Cement Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Edison Trading Spa - Italy
- Gujarat Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- Agrawal Coal Company - India
- Semirara Mining Corp, Philippines
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