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Friday, 08 June 12
NO IMMEDIATE IMPACT ON ADARO'S RATING FROM BEP TRANSACTION - FITCH RATINGS
 Fitch Ratings has said that PT Adaro Indonesia's (Adaro, 'BB+'/ Stable) ratings are not immediately affected by its parent PT Adaro Energy Tbk's (Adaro Energy) planned investment in greenfield coal miner PT Bhakti Energi Persada (BEP).
Adaro Energy recently signed an agreement for the right to acquire up to 51% of BEP over three years for up to USD500m through a convertible loan or to issue a pre-specified number of shares of Adaro Energy to the shareholders of BEP (participating in this agreement) in exchange for 79.8% of BEP. Adaro Energy currently owns 10.22% of BEP.
BEP has seven coal concessions, all IUPs (Izin Usaha Pertambangans - mining business licences), with estimated Australasian Joint Ore Reserves Committee (JORC)-compliant coal resources of 9.53 billion tonnes. Fitch expects that a large part of the investment required before bringing these resources to production will relate to the coal hauling road connecting the mines to barging and shipping points. Coal resources of BEP are of low energy content (3,379kcal on a gross as received basis) and as such will trade at a substantial discount to benchmark thermal coal prices. However, the favourable geology of BEP mines will allow the extraction of coal at an extremely low strip ratio (i.e., units of overburden to be removed on per unit of coal extracted) over the average life of a mine of below 0.5x as estimated by Adaro Energy, supporting the economic viability of these operations. The materially shorter supply chain of BEP's mines at 130km (versus 320km for Adaro's existing mines) would provide further support.
However, BEP coal mines have substantially lower cash margins than Adaro Energy's currently main cash generating mine, Tutupan, and are more susceptible to low coal prices. There is also uncertainty relating to coal mining regulations in Indonesia at present, such as restrictions on coal exports and a resource export tax. Any unfavourable regulatory developments can affect the commerciality of BEP's operations. However, Adaro Energy's options to invest in rather than an outright purchase of BEP resources provide a meaningful level of flexibility and safety. Fitch believes that any investments in the first half of the three-year option period will not be significant and can be funded from Adaro Energy's projected internal cash generation.
If successfully executed, BEP can over time contribute to the increasing diversity of Adaro Energy's mining operations. The limited diversity of Adaro Energy's existing mine sites is one of the factors currently constraining its ratings.
The ratings of Adaro are based on the credit profile of Adaro Energy given their strong rating linkages as per Fitch's parent-subsidiary linkage methodology. At end-March 2012 Adaro Energy's funds from operations (FFO)-adjusted gross leverage was 2.4x and FFO interest coverage 7.0x.
Negative rating action may result from FFO gross leverage rising above 2.75x or FFO interest coverage falling below 5x for two consecutive years. Other negative rating guidelines are material deviation from its policy of maintaining strong liquidity; adverse regulatory developments that will significantly impair Adaro Energy's financial profile; further substantial investments that weaken Adaro's financial or operating risk profile and a sustained weakening of coal prices.
Source: Fitch (Hong Kong) Limited
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Sunday, 08 January 23
ELEVATED COAL PRICE A DRAG ON MARGINS OF DOMESTIC BASE METAL PLAYERS: ICRA
The increased price of coal continue to be a drag on the margin of domestic base metal players with no immediate relief in sight, rating agency ICR ...
Monday, 02 January 23
CHINA’S COAL CONSUMPTION TO PEAK BY 2035: REPORT - REUTERS
China’s primary energy consumption is likely to peak at nearly 6.03 billion tonnes of standard coal between 2030 and 2035, refining giant Chi ...
Thursday, 29 December 22
INDIA'S COAL DEMAND LIKELY TO PEAK BETWEEN 2030-2035: MINISTER - ANI
The demand for coal in India will continue and is likely to peak between 2030-2035, Union Minister of Coal, Mines, and Parliamentary Affairs Pralha ...
Thursday, 29 December 22
RIO TINTO AND PARTNERS COULD RECEIVE AS MUCH AS $450M IN GOVERNMENT COMPENSATION FOR COAL PRICE CAP - THE GUARDIAN
Compensation payments for the Gladstone power plant remain the sticking point in the federal government’s coal price cap compensation negotia ...
Wednesday, 28 December 22
MARKET INSIGHT - INTERMODAL
The United Nations Conference on Trade and Development (UNCTAD) published a Global Trade Update on December 13th highlighting that global trade wou ...
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- Straits Asia Resources Limited - Singapore
- Singapore Mercantile Exchange
- Toyota Tsusho Corporation, Japan
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- Heidelberg Cement - Germany
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- Posco Energy - South Korea
- Star Paper Mills Limited - India
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- Georgia Ports Authority, United States
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- Eastern Coal Council - USA
- Energy Link Ltd, New Zealand
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- Marubeni Corporation - India
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- Larsen & Toubro Limited - India
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- The University of Queensland
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- London Commodity Brokers - England
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- Energy Development Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- VISA Power Limited - India
- New Zealand Coal & Carbon
- Kohat Cement Company Ltd. - Pakistan
- Commonwealth Bank - Australia
- Bayan Resources Tbk. - Indonesia
- Renaissance Capital - South Africa
- Kobexindo Tractors - Indoneisa
- Bhoruka Overseas - Indonesia
- Kumho Petrochemical, South Korea
- Kalimantan Lumbung Energi - Indonesia
- The Treasury - Australian Government
- Meralco Power Generation, Philippines
- LBH Netherlands Bv - Netherlands
- OPG Power Generation Pvt Ltd - India
- Australian Commodity Traders Exchange
- Antam Resourcindo - Indonesia
- Cement Manufacturers Association - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IEA Clean Coal Centre - UK
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- Aditya Birla Group - India
- Binh Thuan Hamico - Vietnam
- Barasentosa Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Tata Chemicals Ltd - India
- Tamil Nadu electricity Board
- Price Waterhouse Coopers - Russia
- Deloitte Consulting - India
- Kideco Jaya Agung - Indonesia
- ICICI Bank Limited - India
- Cigading International Bulk Terminal - Indonesia
- Bangladesh Power Developement Board
- CIMB Investment Bank - Malaysia
- Bukit Makmur.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Rio Tinto Coal - Australia
- Mercuria Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Makarim & Taira - Indonesia
- Samtan Co., Ltd - South Korea
- Indian Oil Corporation Limited
- Oldendorff Carriers - Singapore
- ASAPP Information Group - India
- Bhatia International Limited - India
- Grasim Industreis Ltd - India
- Ministry of Finance - Indonesia
- Jaiprakash Power Ventures ltd
- Billiton Holdings Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- Madhucon Powers Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Coalindo Energy - Indonesia
- Orica Mining Services - Indonesia
- PTC India Limited - India
- Ambuja Cements Ltd - India
- Vedanta Resources Plc - India
- Sinarmas Energy and Mining - Indonesia
- PowerSource Philippines DevCo
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- European Bulk Services B.V. - Netherlands
- Baramulti Group, Indonesia
- Petron Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
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- Karbindo Abesyapradhi - Indoneisa
- Sojitz Corporation - Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GMR Energy Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Green Power PLC Corporation, Philippines
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- Simpson Spence & Young - Indonesia
- Karaikal Port Pvt Ltd - India
- South Luzon Thermal Energy Corporation
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- Intertek Mineral Services - Indonesia
- Maheswari Brothers Coal Limited - India
- Aboitiz Power Corporation - Philippines
- Minerals Council of Australia
- Agrawal Coal Company - India
- GVK Power & Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Coal and Oil Company - UAE
- Eastern Energy - Thailand
- Dalmia Cement Bharat India
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- Bulk Trading Sa - Switzerland
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- Pipit Mutiara Jaya. PT, Indonesia
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
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- Carbofer General Trading SA - India
- Independent Power Producers Association of India
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- International Coal Ventures Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Sree Jayajothi Cements Limited - India
- The State Trading Corporation of India Ltd
- Essar Steel Hazira Ltd - India
- Directorate Of Revenue Intelligence - India
- Electricity Authority, New Zealand
- Power Finance Corporation Ltd., India
- GAC Shipping (India) Pvt Ltd
- Borneo Indobara - Indonesia
- Chamber of Mines of South Africa
- Iligan Light & Power Inc, Philippines
- Standard Chartered Bank - UAE
- Lanco Infratech Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Trasteel International SA, Italy
- Indonesian Coal Mining Association
- Central Java Power - Indonesia
- Edison Trading Spa - Italy
- Wood Mackenzie - Singapore
- Parliament of New Zealand
- Indian Energy Exchange, India
- India Bulls Power Limited - India
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- Sindya Power Generating Company Private Ltd
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- SMC Global Power, Philippines
- GN Power Mariveles Coal Plant, Philippines
- White Energy Company Limited
- Siam City Cement PLC, Thailand
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- Port Waratah Coal Services - Australia
- Therma Luzon, Inc, Philippines
- Planning Commission, India
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- Xindia Steels Limited - India
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- Economic Council, Georgia
- Uttam Galva Steels Limited - India
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Central Electricity Authority - India
- Merrill Lynch Commodities Europe
- Siam City Cement - Thailand
- McConnell Dowell - Australia
- Anglo American - United Kingdom
- Wilmar Investment Holdings
- Manunggal Multi Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Mjunction Services Limited - India
- Videocon Industries ltd - India
- Thai Mozambique Logistica
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- Directorate General of MIneral and Coal - Indonesia
- Goldman Sachs - Singapore
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- Ministry of Transport, Egypt
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