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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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- McConnell Dowell - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Port Waratah Coal Services - Australia
- Intertek Mineral Services - Indonesia
- Renaissance Capital - South Africa
- Samtan Co., Ltd - South Korea
- Global Green Power PLC Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Meralco Power Generation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- Posco Energy - South Korea
- Mintek Dendrill Indonesia
- Indonesian Coal Mining Association
- Siam City Cement - Thailand
- CIMB Investment Bank - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Tata Chemicals Ltd - India
- Indogreen Group - Indonesia
- Binh Thuan Hamico - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- Bhoruka Overseas - Indonesia
- Petron Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Indo Tambangraya Megah - Indonesia
- Power Finance Corporation Ltd., India
- VISA Power Limited - India
- Planning Commission, India
- Banpu Public Company Limited - Thailand
- Marubeni Corporation - India
- Larsen & Toubro Limited - India
- Bhushan Steel Limited - India
- Altura Mining Limited, Indonesia
- Parliament of New Zealand
- London Commodity Brokers - England
- Jaiprakash Power Ventures ltd
- SMC Global Power, Philippines
- Trasteel International SA, Italy
- Xindia Steels Limited - India
- Georgia Ports Authority, United States
- Riau Bara Harum - Indonesia
- Antam Resourcindo - Indonesia
- Ministry of Finance - Indonesia
- Heidelberg Cement - Germany
- Kumho Petrochemical, South Korea
- Kartika Selabumi Mining - Indonesia
- India Bulls Power Limited - India
- Central Java Power - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Goldman Sachs - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Maheswari Brothers Coal Limited - India
- Coalindo Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Latin American Coal - Colombia
- AsiaOL BioFuels Corp., Philippines
- Bukit Makmur.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- TeaM Sual Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Energy Link Ltd, New Zealand
- LBH Netherlands Bv - Netherlands
- Mercator Lines Limited - India
- IHS Mccloskey Coal Group - USA
- Savvy Resources Ltd - HongKong
- Agrawal Coal Company - India
- Bulk Trading Sa - Switzerland
- Tamil Nadu electricity Board
- Cigading International Bulk Terminal - Indonesia
- Africa Commodities Group - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- CNBM International Corporation - China
- The Treasury - Australian Government
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Price Waterhouse Coopers - Russia
- Thai Mozambique Logistica
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mjunction Services Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Australian Coal Association
- Energy Development Corp, Philippines
- Orica Australia Pty. Ltd.
- Sojitz Corporation - Japan
- Bhatia International Limited - India
- Oldendorff Carriers - Singapore
- Karaikal Port Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Coastal Gujarat Power Limited - India
- The University of Queensland
- Wood Mackenzie - Singapore
- Sinarmas Energy and Mining - Indonesia
- Grasim Industreis Ltd - India
- SMG Consultants - Indonesia
- ICICI Bank Limited - India
- Barasentosa Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Globalindo Alam Lestari - Indonesia
- White Energy Company Limited
- Vizag Seaport Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Ambuja Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Sree Jayajothi Cements Limited - India
- Gujarat Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- SN Aboitiz Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Ministry of Transport, Egypt
- OPG Power Generation Pvt Ltd - India
- Sakthi Sugars Limited - India
- Bangladesh Power Developement Board
- Semirara Mining Corp, Philippines
- ASAPP Information Group - India
- Holcim Trading Pte Ltd - Singapore
- Salva Resources Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Central Electricity Authority - India
- Borneo Indobara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- Uttam Galva Steels Limited - India
- Anglo American - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Iligan Light & Power Inc, Philippines
- Australian Commodity Traders Exchange
- Eastern Energy - Thailand
- IEA Clean Coal Centre - UK
- Merrill Lynch Commodities Europe
- GMR Energy Limited - India
- Therma Luzon, Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Indika Energy - Indonesia
- Bharathi Cement Corporation - India
- Indian Energy Exchange, India
- Singapore Mercantile Exchange
- Timah Investasi Mineral - Indoneisa
- Baramulti Group, Indonesia
- Toyota Tsusho Corporation, Japan
- Economic Council, Georgia
- Wilmar Investment Holdings
- South Luzon Thermal Energy Corporation
- Karbindo Abesyapradhi - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Minerals Council of Australia
- GAC Shipping (India) Pvt Ltd
- Independent Power Producers Association of India
- Kohat Cement Company Ltd. - Pakistan
- Commonwealth Bank - Australia
- Malabar Cements Ltd - India
- Electricity Authority, New Zealand
- Star Paper Mills Limited - India
- The State Trading Corporation of India Ltd
- Attock Cement Pakistan Limited
- PTC India Limited - India
- Aboitiz Power Corporation - Philippines
- Eastern Coal Council - USA
- Interocean Group of Companies - India
- Dalmia Cement Bharat India
- Rio Tinto Coal - Australia
- Billiton Holdings Pty Ltd - Australia
- Aditya Birla Group - India
- Siam City Cement PLC, Thailand
- Formosa Plastics Group - Taiwan
- Lanco Infratech Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Directorate Of Revenue Intelligence - India
- Sarangani Energy Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Sical Logistics Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Coal and Oil Company - UAE
- Medco Energi Mining Internasional
- Jindal Steel & Power Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kobexindo Tractors - Indoneisa
- International Coal Ventures Pvt Ltd - India
- New Zealand Coal & Carbon
- Essar Steel Hazira Ltd - India
- Ministry of Mines - Canada
- Makarim & Taira - Indonesia
- San Jose City I Power Corp, Philippines
- Indian Oil Corporation Limited
- Maharashtra Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Bukit Baiduri Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- PowerSource Philippines DevCo
- Kaltim Prima Coal - Indonesia
- Carbofer General Trading SA - India
- Mercuria Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Deloitte Consulting - India
- Global Business Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Kepco SPC Power Corporation, Philippines
- Vedanta Resources Plc - India
- Madhucon Powers Ltd - India
- Romanian Commodities Exchange
- GVK Power & Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Thiess Contractors Indonesia
- Edison Trading Spa - Italy
- Videocon Industries ltd - India
- Leighton Contractors Pty Ltd - Australia
- Chamber of Mines of South Africa
- Simpson Spence & Young - Indonesia
- Parry Sugars Refinery, India
- MS Steel International - UAE
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