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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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Monday, 02 April 18
THIESS SECURES $240M SATUI EXTENSION
The successful implementation of an innovative mining plan by Thiess at the Satui coal mine in South Kalimantan, has resulted in a $240 million con ...
Friday, 30 March 18
SHIPPING INDUSTRY CONFIDENCE HITS FOUR-YEAR HIGH - MOORE STEPHENS
Shipping Confidence Survey
In February 2018, the average confidence level expressed by respondents was up from 6.2 in November 2017 t ...
Friday, 30 March 18
EXPLAINING POLAND'S COAL PARADOX - FORBES
In the U.S. coal is succumbing to market forces despite the Trump Administration’s push to support the industry. Abundant, cheap and cleaner ...
Friday, 30 March 18
THIESS SECURES $140M MT OWEN INCREASE
Thiess has secured a A$140 million increase to its contract with Glencore for coal mining services at Mt Owen in the Hunter Valley, Australia. Mt O ...
Wednesday, 28 March 18
THIESS WINS $280M WAHANA EXTENSION
Thiess has been awarded a three-year $280 million contract extension at the Wahana coal mine in South Kalimantan, Indonesia.
According to Thie ...
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- Holcim Trading Pte Ltd - Singapore
- Kumho Petrochemical, South Korea
- Energy Link Ltd, New Zealand
- Uttam Galva Steels Limited - India
- McConnell Dowell - Australia
- Sakthi Sugars Limited - India
- Africa Commodities Group - South Africa
- International Coal Ventures Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Indo Tambangraya Megah - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Mercator Lines Limited - India
- Essar Steel Hazira Ltd - India
- Iligan Light & Power Inc, Philippines
- Baramulti Group, Indonesia
- San Jose City I Power Corp, Philippines
- Planning Commission, India
- Tamil Nadu electricity Board
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- Orica Australia Pty. Ltd.
- Sojitz Corporation - Japan
- Bharathi Cement Corporation - India
- Ambuja Cements Ltd - India
- Bhoruka Overseas - Indonesia
- Bhushan Steel Limited - India
- Parliament of New Zealand
- Kobexindo Tractors - Indoneisa
- PowerSource Philippines DevCo
- GAC Shipping (India) Pvt Ltd
- Aboitiz Power Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Economic Council, Georgia
- Savvy Resources Ltd - HongKong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- South Luzon Thermal Energy Corporation
- Kideco Jaya Agung - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Standard Chartered Bank - UAE
- PNOC Exploration Corporation - Philippines
- SMC Global Power, Philippines
- Eastern Coal Council - USA
- IHS Mccloskey Coal Group - USA
- Coal and Oil Company - UAE
- Dalmia Cement Bharat India
- Directorate Of Revenue Intelligence - India
- Larsen & Toubro Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Trasteel International SA, Italy
- London Commodity Brokers - England
- Malabar Cements Ltd - India
- Metalloyd Limited - United Kingdom
- Edison Trading Spa - Italy
- Ministry of Mines - Canada
- Marubeni Corporation - India
- Orica Mining Services - Indonesia
- Ministry of Finance - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Coal Association
- Petrochimia International Co. Ltd.- Taiwan
- Cement Manufacturers Association - India
- Oldendorff Carriers - Singapore
- White Energy Company Limited
- Indonesian Coal Mining Association
- Vizag Seaport Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Binh Thuan Hamico - Vietnam
- Siam City Cement - Thailand
- Sical Logistics Limited - India
- Semirara Mining and Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Meralco Power Generation, Philippines
- Vedanta Resources Plc - India
- Alfred C Toepfer International GmbH - Germany
- Price Waterhouse Coopers - Russia
- Global Green Power PLC Corporation, Philippines
- ICICI Bank Limited - India
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- Thiess Contractors Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Georgia Ports Authority, United States
- Electricity Authority, New Zealand
- Samtan Co., Ltd - South Korea
- Renaissance Capital - South Africa
- Central Electricity Authority - India
- Aditya Birla Group - India
- Kohat Cement Company Ltd. - Pakistan
- SMG Consultants - Indonesia
- Tata Chemicals Ltd - India
- The State Trading Corporation of India Ltd
- AsiaOL BioFuels Corp., Philippines
- Coalindo Energy - Indonesia
- Medco Energi Mining Internasional
- Bulk Trading Sa - Switzerland
- Straits Asia Resources Limited - Singapore
- Xindia Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Bhatia International Limited - India
- PTC India Limited - India
- Petron Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Cigading International Bulk Terminal - Indonesia
- Central Java Power - Indonesia
- Thai Mozambique Logistica
- Makarim & Taira - Indonesia
- Jaiprakash Power Ventures ltd
- Globalindo Alam Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- GVK Power & Infra Limited - India
- Eastern Energy - Thailand
- Grasim Industreis Ltd - India
- Singapore Mercantile Exchange
- Commonwealth Bank - Australia
- New Zealand Coal & Carbon
- Star Paper Mills Limited - India
- Kaltim Prima Coal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Madhucon Powers Ltd - India
- Rio Tinto Coal - Australia
- Vijayanagar Sugar Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Antam Resourcindo - Indonesia
- TeaM Sual Corporation - Philippines
- Indika Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Indian Oil Corporation Limited
- Indian Energy Exchange, India
- Jindal Steel & Power Ltd - India
- Barasentosa Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Simpson Spence & Young - Indonesia
- Sarangani Energy Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Ministry of Transport, Egypt
- Kalimantan Lumbung Energi - Indonesia
- VISA Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- The University of Queensland
- Mintek Dendrill Indonesia
- Chamber of Mines of South Africa
- CNBM International Corporation - China
- Videocon Industries ltd - India
- Manunggal Multi Energi - Indonesia
- Toyota Tsusho Corporation, Japan
- Carbofer General Trading SA - India
- ASAPP Information Group - India
- Port Waratah Coal Services - Australia
- Goldman Sachs - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Interocean Group of Companies - India
- Siam City Cement PLC, Thailand
- SN Aboitiz Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Energy Development Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Mercuria Energy - Indonesia
- Borneo Indobara - Indonesia
- GMR Energy Limited - India
- Heidelberg Cement - Germany
- Gujarat Sidhee Cement - India
- Banpu Public Company Limited - Thailand
- MS Steel International - UAE
- Karbindo Abesyapradhi - Indoneisa
- Agrawal Coal Company - India
- Maharashtra Electricity Regulatory Commission - India
- Intertek Mineral Services - Indonesia
- Formosa Plastics Group - Taiwan
- Kepco SPC Power Corporation, Philippines
- Anglo American - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Kapuas Tunggal Persada - Indonesia
- Mjunction Services Limited - India
- Sindya Power Generating Company Private Ltd
- Bukit Baiduri Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Power Finance Corporation Ltd., India
- Sree Jayajothi Cements Limited - India
- Coastal Gujarat Power Limited - India
- Posco Energy - South Korea
- Latin American Coal - Colombia
- European Bulk Services B.V. - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- IEA Clean Coal Centre - UK
- Deloitte Consulting - India
- Electricity Generating Authority of Thailand
- Wood Mackenzie - Singapore
- Parry Sugars Refinery, India
- Leighton Contractors Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Attock Cement Pakistan Limited
- The Treasury - Australian Government
- Bukit Makmur.PT - Indonesia
- Independent Power Producers Association of India
- Merrill Lynch Commodities Europe
- Global Business Power Corporation, Philippines
- Romanian Commodities Exchange
- Riau Bara Harum - Indonesia
- Indogreen Group - Indonesia
- Wilmar Investment Holdings
- Rashtriya Ispat Nigam Limited - India
- Australian Commodity Traders Exchange
- Minerals Council of Australia
- Pendopo Energi Batubara - Indonesia
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