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Friday, 21 February 14
INDONESIA COAL OUTPUT CAP TO HURT MINERS RELIANT ON VOLUME GROWTH, FITCH SAYS
 Fitch Ratings says that the credit profiles of mining sub-contractors and miners highly reliant on increasing volumes to support high debt servicing will be most affected if Indonesia strictly implements limits on thermal coal production. The Indonesian Ministry of Energy and Mineral Resources announced its plans to cap Indonesia's total coal output at 397m metric tonnes in 2014 - 6% lower than the 421m tonnes produced in 2013 - in an attempt to ensure Indonesia's long-term energy security and also on the expectation that a lower output may result in higher prices for its coal exports.
The announcement comes amidst some of the larger Indonesian miners announcing 2014 production targets that are up to 10% higher than their production in 2013. Mining companies have been seeking to increase production to partly compensate for substantially reduced dollar margins per tonne of coal following a steep decline in international seaborne thermal coal prices, especially those companies burdened with high debt levels and weak liquidity. For example, PT Bumi Resources Tbk expects to increase production from 74m tonnes in 2012 to about 100m tonnes in 2015.
Fitch understands that the higher production budgets of these miners have yet to be approved by the Ministry of Energy and Mineral Resources. Production caps are not new to Indonesia, although they have not been strictly applied before. How effectively the production caps are implemented, however, remains to be seen. The monitoring and control of production of those miners operating under coal contracts of work (CCOW), which are issued by the federal government, would be easier than that of mines operating under Mining Business Licences (IUPs), which are mostly issued by provincial governments. Indonesia's six largest miners account for about 50% of Indonesia's total coal production. Mines operating under CCOW concessions account for almost 80% of current production.
Fitch does not expect a 5%-10% production cut from 2013 levels to materially impact the credit profiles of miners with low financial leverage, such as PT Adaro Indonesia (BB+/Stable), PT Indo Tambangraya Mehgah Tbk, PT Harum Energy Tbk and PT Kideco Jaya Agung. Also, the operating cash generation of Indonesian coal miners is more sensitive to declines in prices than volumes due to a large variable cost structure. Moreover, the impact of lower output would be partly mitigated if the reduction in coal exports from Indonesia helps support seaborne coal prices. Fitch expects Asian coal markets to remain well supplied and any reduction of coal exports from Indonesia is likely to have only a very limited impact on coal prices, although it may alleviate any further downside pressure on prices. The 24m tonne reduction in production amounts to about 3% of global seaborne thermal coal volumes.
Fitch also says that the proposed production cap will negatively impact the business volumes of mining sub-contractors. An industry-wide coal production cap implemented during a weak price environment would likely lead some coal miners to continue mining at lower strip ratios (in areas that require less removal of overburden) for an extended period to enhance profitability. Apart from the decline in business volumes, the generally fixed prices per unit of overburden/coal extracted and their high operating leverage would render these companies more vulnerable to a reduction in coal volumes than the miners themselves. Over 70% of Indonesian coal mining and overburden removal volumes are done through sub-contracted miners.
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Wednesday, 12 March 14
DRY BULK VESSELS STILL THE CREAM OF THE CROP FOR SHIP OWNERS
Dry bulk carriers have remained the most popular vessel type among ship owners as proven by the sheer number of second hand vessel sales and new ...
Tuesday, 11 March 14
HOLD HARMLESS CLAUSES ARE NOT ALWAYS MUTUAL! - ITIC
KNOWLEDGE TO ELEVATE
ITIC provides an insurance related contract review service to all of its members. As the leading professional indemnity i ...
Tuesday, 11 March 14
NEWCASTLE SHIPPED 6.98% LESS COAL WEEK ON WEEK
COALspot.com: In the week ended 10 March 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, total 2 ...
Tuesday, 11 March 14
INDONESIAN SUB-BITUMINOUS COAL SWAPS CONTINUES TO FALL
COALspot.com – Indonesia, the world’s largest exporter of the thermal coal's swaps for delivery April - June 2014 slip again thi ...
Monday, 10 March 14
API 8 CFR SOUTH CHINA COAL SWAPS LOST 4.28 PERCENT MONTH ON MONTH FOR Q2 DELIVERY
COALspot.com: API 8 CFR South China Coal swaps for average Q2 14 deliveries lost 4.28 percent month on month and closed at US$ 73.97 per mt as on Fr ...
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- Bhushan Steel Limited - India
- Renaissance Capital - South Africa
- Ministry of Finance - Indonesia
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- GN Power Mariveles Coal Plant, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Globalindo Alam Lestari - Indonesia
- Central Electricity Authority - India
- Marubeni Corporation - India
- Therma Luzon, Inc, Philippines
- The State Trading Corporation of India Ltd
- Electricity Authority, New Zealand
- Sindya Power Generating Company Private Ltd
- LBH Netherlands Bv - Netherlands
- Oldendorff Carriers - Singapore
- Romanian Commodities Exchange
- Price Waterhouse Coopers - Russia
- Aboitiz Power Corporation - Philippines
- Sakthi Sugars Limited - India
- PTC India Limited - India
- Bangladesh Power Developement Board
- Kideco Jaya Agung - Indonesia
- Agrawal Coal Company - India
- ASAPP Information Group - India
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- Port Waratah Coal Services - Australia
- Coastal Gujarat Power Limited - India
- Merrill Lynch Commodities Europe
- Gujarat Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Sojitz Corporation - Japan
- Karbindo Abesyapradhi - Indoneisa
- Kobexindo Tractors - Indoneisa
- Australian Commodity Traders Exchange
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- Eastern Energy - Thailand
- Bhoruka Overseas - Indonesia
- Chamber of Mines of South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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- London Commodity Brokers - England
- Directorate Of Revenue Intelligence - India
- Semirara Mining and Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Global Green Power PLC Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Kohat Cement Company Ltd. - Pakistan
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- Manunggal Multi Energi - Indonesia
- IEA Clean Coal Centre - UK
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- Tata Chemicals Ltd - India
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- Siam City Cement PLC, Thailand
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- International Coal Ventures Pvt Ltd - India
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- Sical Logistics Limited - India
- Videocon Industries ltd - India
- Planning Commission, India
- Jorong Barutama Greston.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Ind-Barath Power Infra Limited - India
- Standard Chartered Bank - UAE
- Trasteel International SA, Italy
- Orica Mining Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Eastern Coal Council - USA
- Vedanta Resources Plc - India
- CIMB Investment Bank - Malaysia
- Thiess Contractors Indonesia
- Salva Resources Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
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- Malabar Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Interocean Group of Companies - India
- Directorate General of MIneral and Coal - Indonesia
- Latin American Coal - Colombia
- Pipit Mutiara Jaya. PT, Indonesia
- Rio Tinto Coal - Australia
- Sinarmas Energy and Mining - Indonesia
- Baramulti Group, Indonesia
- GVK Power & Infra Limited - India
- Essar Steel Hazira Ltd - India
- Ministry of Transport, Egypt
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- Ministry of Mines - Canada
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- VISA Power Limited - India
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- SMC Global Power, Philippines
- Mercator Lines Limited - India
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- Kartika Selabumi Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Vizag Seaport Private Limited - India
- ICICI Bank Limited - India
- Cement Manufacturers Association - India
- Energy Link Ltd, New Zealand
- Goldman Sachs - Singapore
- Parliament of New Zealand
- Coalindo Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Wilmar Investment Holdings
- Commonwealth Bank - Australia
- Altura Mining Limited, Indonesia
- The University of Queensland
- White Energy Company Limited
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- Timah Investasi Mineral - Indoneisa
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- Coal and Oil Company - UAE
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- Africa Commodities Group - South Africa
- Savvy Resources Ltd - HongKong
- Independent Power Producers Association of India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sarangani Energy Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Tamil Nadu electricity Board
- Ambuja Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Posco Energy - South Korea
- Thai Mozambique Logistica
- Bukit Makmur.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Aditya Birla Group - India
- New Zealand Coal & Carbon
- Intertek Mineral Services - Indonesia
- Metalloyd Limited - United Kingdom
- Xindia Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Wood Mackenzie - Singapore
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- Holcim Trading Pte Ltd - Singapore
- PetroVietnam Power Coal Import and Supply Company
- AsiaOL BioFuels Corp., Philippines
- Electricity Generating Authority of Thailand
- Indian Oil Corporation Limited
- Bulk Trading Sa - Switzerland
- PowerSource Philippines DevCo
- Anglo American - United Kingdom
- Borneo Indobara - Indonesia
- Edison Trading Spa - Italy
- Deloitte Consulting - India
- Samtan Co., Ltd - South Korea
- Australian Coal Association
- Mintek Dendrill Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMG Consultants - Indonesia
- Meenaskhi Energy Private Limited - India
- Power Finance Corporation Ltd., India
- Toyota Tsusho Corporation, Japan
- Makarim & Taira - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indonesian Coal Mining Association
- Economic Council, Georgia
- Kumho Petrochemical, South Korea
- Orica Australia Pty. Ltd.
- Indian Energy Exchange, India
- Siam City Cement - Thailand
- Medco Energi Mining Internasional
- Indika Energy - Indonesia
- Georgia Ports Authority, United States
- Maheswari Brothers Coal Limited - India
- Central Java Power - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Minerals Council of Australia
- Grasim Industreis Ltd - India
- Larsen & Toubro Limited - India
- Gujarat Sidhee Cement - India
- MS Steel International - UAE
- Mercuria Energy - Indonesia
- Carbofer General Trading SA - India
- Gujarat Mineral Development Corp Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Simpson Spence & Young - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Heidelberg Cement - Germany
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- The Treasury - Australian Government
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- Global Coal Blending Company Limited - Australia
- Madhucon Powers Ltd - India
- Bayan Resources Tbk. - Indonesia
- Indogreen Group - Indonesia
- Mjunction Services Limited - India
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