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