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Thursday, 22 December 22
COAL AND GAS PRICE CAPS MAY COMPOUND POLITICAL RISK FOR AUSTRALIAN CORPORATES - FITCH RATINGS
 Australia’s introduction of temporary price caps on domestic sales of gas and coal used for electricity generation will probably have limited direct near-term credit impact for energy-sector issuers rated by Fitch Ratings, according to the agency. However, the caps highlight that energy companies face mounting political risks that could influence investor perceptions of the sector and capex plans over the long term.
The caps have been proposed for 12 months, but even if they are extended, the direct impact should generally be limited if prices for coal and gas fall over the coming years, in line with Fitch’s base-case assumptions.
The near-term impact on Australian thermal coal miners’ financial profiles will be further mitigated, as typically around 80% of the thermal coal produced in the country is exported, and therefore is not subject to the cap.
The natural gas sector will be more exposed, as domestic demand accounts for a larger share of supply. Santos (BBB/Stable) and Woodside Energy Group (BBB+/Stable) are large suppliers of gas to the domestic market. Such sales account for more than 40% of Santos’s gas production, but we estimate that only around 15% of total production goes to the east coast markets that are exposed to the price cap.
Woodside’s domestic gas sales, including pipeline gas from the NWS Project, Pluto and Wheatstone, account for less than 6% of its gas production, with the rest exported as LNG. For both companies, most gas is already produced under long-term contracts, which will be unaffected by the caps, limiting the near-term impact. The proportion of output affected could nonetheless rise over time if the caps are extended beyond 12 months.
The prevalence of long-term supply contracts will also reduce the impact of the caps for most domestic electricity and gas retailers, including Origin Energy (BBB/Stable). If global energy prices remain high, it is possible that the caps could offer a competitive advantage to some retailers that rely more on short-term supply contracts. That said, the superior sourcing ability and flexibility in contracts should limit downside risks for large retailers. For electricity sales, the highest-cost power generator generally determines the wholesale energy market price, and we anticipate a neutral to marginally positive financial effect for entities like Origin that have flexibility in their generation portfolio.
The price caps will add to a perception that Australia’s mining sector faces mounting political risk, even though we do not believe they will have a major impact on Fitch-rated issuers in the near term. For example, the government has announced plans to implement a new system to protect sites important to Australia’s indigenous peoples. Firms in the sector, as in other parts of the world, also face political risks associated with official efforts to promote the transition to renewable energy sources.
Mounting political risk may influence investors’ perceptions of the sector, and therefore the terms on which companies are able to access finance. This could also have ramifications for M&A plans or long-term capex strategies. Nonetheless, it is likely to take time to assess the impact, which may also be offset by other market developments.
Australia’s parliament on 16 December passed legislation empowering the government to regulate gas prices, alongside an AUD1.5 billion relief package for firms and households. It remains unclear how the relief package will affect power and gas market dynamics, but we expect its impact to be temporary. The authorities plan to cap domestic gas prices at AUD12 per gigajoule. Domestic thermal coal sales prices in New South Wales and Queensland will also be capped at AUD125 per tonne.
Source: Fitch Ratings
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Friday, 28 June 24
INDIAN POWER STATIONS STOCKED WITH BUMPER COAL SUPPLY AS TRANSPORT WOES EASE - BUSINESS STANDARD
Even as power demand has touched a historic high of 250 gigawatts (Gw) amid sweltering heat this June, India’s power stations are stocked wit ...
Friday, 28 June 24
INDIA'S CY23 COAL USE LARGER THAN NORTH AMERICA, EUROPE COMBINED - THE HINDU
For the first time, India’s coal consumption surpassed that of North America and Europe combined in the calendar year 2023, said Energy Insti ...
Monday, 24 June 24
PLN'S FINANCIAL SUSTAINABILITY RESTS ON ACCELERATED COAL RETIREMENT AND RENEWABLES DEPLOYMENT - MUTYA YUSTIKA
On 28 May 2024, Indonesia’s national electricity utility, PT Perusahaan Listrik Negara (PLN), released its financial report for 2023. Althoug ...
Monday, 24 June 24
INDIA'S COAL-BASED POWER DEMAND AT ALL-TIME HIGH, GOVERNMENT SAYS - REUTERS
India’s demand for coal-based power has risen by 7.3% this fiscal year to an all-time high, the government said in a statement on Wednesday.
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Monday, 24 June 24
CHINA'S COAL INDUSTRY TURNS GREENER THROUGH INNOVATIVE APPROACHES - PEOPLE'S DAILY
At an opencast mine operated by Inner Mongolia Pingzhuang Coal Group Co. Ltd., a subsidiary of CHN Energy Investment Group (CHN Energy), a 14-meter ...
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- Asmin Koalindo Tuhup - Indonesia
- Sojitz Corporation - Japan
- Sinarmas Energy and Mining - Indonesia
- Cement Manufacturers Association - India
- White Energy Company Limited
- Interocean Group of Companies - India
- Thai Mozambique Logistica
- New Zealand Coal & Carbon
- Barasentosa Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Xindia Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- Vizag Seaport Private Limited - India
- Aditya Birla Group - India
- Global Business Power Corporation, Philippines
- PowerSource Philippines DevCo
- Kobexindo Tractors - Indoneisa
- Central Electricity Authority - India
- Jindal Steel & Power Ltd - India
- Coalindo Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Carbofer General Trading SA - India
- Chamber of Mines of South Africa
- Larsen & Toubro Limited - India
- Timah Investasi Mineral - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- CNBM International Corporation - China
- Sree Jayajothi Cements Limited - India
- Global Coal Blending Company Limited - Australia
- Orica Australia Pty. Ltd.
- OPG Power Generation Pvt Ltd - India
- Latin American Coal - Colombia
- Miang Besar Coal Terminal - Indonesia
- Mintek Dendrill Indonesia
- Tata Chemicals Ltd - India
- Leighton Contractors Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Africa Commodities Group - South Africa
- Price Waterhouse Coopers - Russia
- Ind-Barath Power Infra Limited - India
- Eastern Energy - Thailand
- Borneo Indobara - Indonesia
- Kumho Petrochemical, South Korea
- Lanco Infratech Ltd - India
- Malabar Cements Ltd - India
- Dalmia Cement Bharat India
- Holcim Trading Pte Ltd - Singapore
- Economic Council, Georgia
- Ambuja Cements Ltd - India
- Bharathi Cement Corporation - India
- Indian Oil Corporation Limited
- Gujarat Sidhee Cement - India
- Baramulti Group, Indonesia
- Star Paper Mills Limited - India
- Medco Energi Mining Internasional
- Samtan Co., Ltd - South Korea
- Coastal Gujarat Power Limited - India
- Sarangani Energy Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Power Finance Corporation Ltd., India
- IHS Mccloskey Coal Group - USA
- Marubeni Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Eastern Coal Council - USA
- Sical Logistics Limited - India
- Thiess Contractors Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Madhucon Powers Ltd - India
- Formosa Plastics Group - Taiwan
- McConnell Dowell - Australia
- Petron Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Development Corp, Philippines
- Singapore Mercantile Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Orica Mining Services - Indonesia
- Electricity Generating Authority of Thailand
- Jorong Barutama Greston.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Indian Energy Exchange, India
- Indonesian Coal Mining Association
- Attock Cement Pakistan Limited
- CIMB Investment Bank - Malaysia
- Port Waratah Coal Services - Australia
- SMG Consultants - Indonesia
- Bhushan Steel Limited - India
- Manunggal Multi Energi - Indonesia
- Indika Energy - Indonesia
- Deloitte Consulting - India
- Kaltim Prima Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Indogreen Group - Indonesia
- Wilmar Investment Holdings
- Renaissance Capital - South Africa
- Karaikal Port Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Commonwealth Bank - Australia
- Tamil Nadu electricity Board
- Oldendorff Carriers - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- The University of Queensland
- Banpu Public Company Limited - Thailand
- Altura Mining Limited, Indonesia
- Sakthi Sugars Limited - India
- Romanian Commodities Exchange
- The State Trading Corporation of India Ltd
- Rashtriya Ispat Nigam Limited - India
- IEA Clean Coal Centre - UK
- SMC Global Power, Philippines
- Alfred C Toepfer International GmbH - Germany
- Agrawal Coal Company - India
- Kalimantan Lumbung Energi - Indonesia
- The Treasury - Australian Government
- Meralco Power Generation, Philippines
- Bukit Baiduri Energy - Indonesia
- PTC India Limited - India
- Bulk Trading Sa - Switzerland
- Directorate Of Revenue Intelligence - India
- Kapuas Tunggal Persada - Indonesia
- Energy Link Ltd, New Zealand
- Parry Sugars Refinery, India
- Minerals Council of Australia
- GN Power Mariveles Coal Plant, Philippines
- Billiton Holdings Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- ASAPP Information Group - India
- Central Java Power - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Posco Energy - South Korea
- Riau Bara Harum - Indonesia
- Straits Asia Resources Limited - Singapore
- Rio Tinto Coal - Australia
- Goldman Sachs - Singapore
- VISA Power Limited - India
- Bhatia International Limited - India
- Kohat Cement Company Ltd. - Pakistan
- San Jose City I Power Corp, Philippines
- Georgia Ports Authority, United States
- PetroVietnam Power Coal Import and Supply Company
- GVK Power & Infra Limited - India
- Therma Luzon, Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Meenaskhi Energy Private Limited - India
- Aboitiz Power Corporation - Philippines
- Heidelberg Cement - Germany
- International Coal Ventures Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Planning Commission, India
- Ministry of Finance - Indonesia
- Merrill Lynch Commodities Europe
- Parliament of New Zealand
- Wood Mackenzie - Singapore
- Global Green Power PLC Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Mercator Lines Limited - India
- South Luzon Thermal Energy Corporation
- Bayan Resources Tbk. - Indonesia
- ICICI Bank Limited - India
- Essar Steel Hazira Ltd - India
- Iligan Light & Power Inc, Philippines
- Mercuria Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement PLC, Thailand
- Kepco SPC Power Corporation, Philippines
- Ministry of Transport, Egypt
- Vedanta Resources Plc - India
- Gujarat Mineral Development Corp Ltd - India
- Metalloyd Limited - United Kingdom
- Ministry of Mines - Canada
- MS Steel International - UAE
- Maharashtra Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Makarim & Taira - Indonesia
- Semirara Mining Corp, Philippines
- GMR Energy Limited - India
- Binh Thuan Hamico - Vietnam
- Jaiprakash Power Ventures ltd
- Standard Chartered Bank - UAE
- Pendopo Energi Batubara - Indonesia
- Edison Trading Spa - Italy
- LBH Netherlands Bv - Netherlands
- Electricity Authority, New Zealand
- Coal and Oil Company - UAE
- Anglo American - United Kingdom
- Antam Resourcindo - Indonesia
- India Bulls Power Limited - India
- Grasim Industreis Ltd - India
- Trasteel International SA, Italy
- Australian Commodity Traders Exchange
- Krishnapatnam Port Company Ltd. - India
- Pipit Mutiara Jaya. PT, Indonesia
- London Commodity Brokers - England
- GAC Shipping (India) Pvt Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Coal Association
- PNOC Exploration Corporation - Philippines
- Siam City Cement - Thailand
- Savvy Resources Ltd - HongKong
- Bangladesh Power Developement Board
- Uttam Galva Steels Limited - India
- Maheswari Brothers Coal Limited - India
- Independent Power Producers Association of India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Videocon Industries ltd - India
- Mjunction Services Limited - India
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