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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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Monday, 10 March 14
THE FREIGHT MARKET WAS QUITE FIRM THIS PAST WEEK
COALspot.com: The freight market was quite firm this past week with BDI sharply increased by 22.65 pct week on week and closed at 1543 points, while ...
Saturday, 08 March 14
LETTERS OF INDEMNITY - SKULD
KNOWLEDGE TO ELEVATE
In today's trading market, owners are frequently requested to accept a letter of indemnity (LOI) in exchange for complying ...
Friday, 07 March 14
DRY BULK MARKET TO BENEFIT FROM CHINA'S GDP GROWTH TARGET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
With the dry bulk market freight rates finally making waves, China's aim of 7.5% GDP growth for 2014 mean once again positive news for the shipping ...
Friday, 07 March 14
RBCT, WORLD'S LARGEST COAL EXPORTING TERMINAL SHIPPED 1.78% LESS COAL MONTH ON MONTH
COALspot.com: South Africa's Richards Bay Coal Terminal (RBCT) the single largest export coal terminal in the world, shipped 4.487 million tons of ...
Friday, 07 March 14
INDONESIA SHIPPED 7% LESS COAL IN JANUARY 2014 COMPARED TO ITS DECEMBER EXPORTS
COALspot.com: Indonesia, the world 4th largest coal producer and the Global largest multi grade coal exporter shipped around $1.8* billion ...
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- Straits Asia Resources Limited - Singapore
- Carbofer General Trading SA - India
- Mercator Lines Limited - India
- Semirara Mining Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Transport, Egypt
- Posco Energy - South Korea
- San Jose City I Power Corp, Philippines
- Central Java Power - Indonesia
- Riau Bara Harum - Indonesia
- Sindya Power Generating Company Private Ltd
- Port Waratah Coal Services - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Aboitiz Power Corporation - Philippines
- Parliament of New Zealand
- Mjunction Services Limited - India
- Wood Mackenzie - Singapore
- Electricity Authority, New Zealand
- Energy Development Corp, Philippines
- PowerSource Philippines DevCo
- TeaM Sual Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Petron Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- IEA Clean Coal Centre - UK
- Vedanta Resources Plc - India
- VISA Power Limited - India
- Goldman Sachs - Singapore
- Global Coal Blending Company Limited - Australia
- Metalloyd Limited - United Kingdom
- SMC Global Power, Philippines
- Directorate Of Revenue Intelligence - India
- Africa Commodities Group - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Renaissance Capital - South Africa
- White Energy Company Limited
- Therma Luzon, Inc, Philippines
- India Bulls Power Limited - India
- PNOC Exploration Corporation - Philippines
- Global Business Power Corporation, Philippines
- Bhatia International Limited - India
- CIMB Investment Bank - Malaysia
- Bhushan Steel Limited - India
- Merrill Lynch Commodities Europe
- Grasim Industreis Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Essar Steel Hazira Ltd - India
- Electricity Generating Authority of Thailand
- Independent Power Producers Association of India
- Heidelberg Cement - Germany
- Binh Thuan Hamico - Vietnam
- Indonesian Coal Mining Association
- Krishnapatnam Port Company Ltd. - India
- Mercuria Energy - Indonesia
- Borneo Indobara - Indonesia
- OPG Power Generation Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Indian Oil Corporation Limited
- Neyveli Lignite Corporation Ltd, - India
- Cement Manufacturers Association - India
- Oldendorff Carriers - Singapore
- Cigading International Bulk Terminal - Indonesia
- Georgia Ports Authority, United States
- Coalindo Energy - Indonesia
- Orica Mining Services - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Eastern Coal Council - USA
- Karbindo Abesyapradhi - Indoneisa
- McConnell Dowell - Australia
- Coal and Oil Company - UAE
- Kartika Selabumi Mining - Indonesia
- Ministry of Finance - Indonesia
- ASAPP Information Group - India
- Uttam Galva Steels Limited - India
- Deloitte Consulting - India
- Siam City Cement PLC, Thailand
- Holcim Trading Pte Ltd - Singapore
- Planning Commission, India
- Ministry of Mines - Canada
- Intertek Mineral Services - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kepco SPC Power Corporation, Philippines
- The University of Queensland
- Gujarat Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- Salva Resources Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Makarim & Taira - Indonesia
- Chettinad Cement Corporation Ltd - India
- Antam Resourcindo - Indonesia
- Tamil Nadu electricity Board
- Karaikal Port Pvt Ltd - India
- Agrawal Coal Company - India
- Maharashtra Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Indo Tambangraya Megah - Indonesia
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- New Zealand Coal & Carbon
- Indogreen Group - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Interocean Group of Companies - India
- Economic Council, Georgia
- Simpson Spence & Young - Indonesia
- Baramulti Group, Indonesia
- Malabar Cements Ltd - India
- Orica Australia Pty. Ltd.
- Star Paper Mills Limited - India
- Minerals Council of Australia
- Vijayanagar Sugar Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Barasentosa Lestari - Indonesia
- Chamber of Mines of South Africa
- Banpu Public Company Limited - Thailand
- Semirara Mining and Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Lanco Infratech Ltd - India
- IHS Mccloskey Coal Group - USA
- Australian Commodity Traders Exchange
- Globalindo Alam Lestari - Indonesia
- GMR Energy Limited - India
- Vizag Seaport Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Xindia Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Sakthi Sugars Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ambuja Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Central Electricity Authority - India
- Energy Link Ltd, New Zealand
- Alfred C Toepfer International GmbH - Germany
- GVK Power & Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Coastal Gujarat Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- The Treasury - Australian Government
- Jaiprakash Power Ventures ltd
- Kobexindo Tractors - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Bulk Trading Sa - Switzerland
- Videocon Industries ltd - India
- International Coal Ventures Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- London Commodity Brokers - England
- Formosa Plastics Group - Taiwan
- PTC India Limited - India
- South Luzon Thermal Energy Corporation
- Romanian Commodities Exchange
- Timah Investasi Mineral - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Kumho Petrochemical, South Korea
- MS Steel International - UAE
- Bhoruka Overseas - Indonesia
- Ind-Barath Power Infra Limited - India
- Madhucon Powers Ltd - India
- Altura Mining Limited, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- European Bulk Services B.V. - Netherlands
- Price Waterhouse Coopers - Russia
- Rio Tinto Coal - Australia
- Edison Trading Spa - Italy
- ICICI Bank Limited - India
- Aditya Birla Group - India
- Dalmia Cement Bharat India
- Mintek Dendrill Indonesia
- Singapore Mercantile Exchange
- Standard Chartered Bank - UAE
- Jindal Steel & Power Ltd - India
- Sical Logistics Limited - India
- The State Trading Corporation of India Ltd
- Kaltim Prima Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Indian Energy Exchange, India
- GN Power Mariveles Coal Plant, Philippines
- Thiess Contractors Indonesia
- Trasteel International SA, Italy
- SMG Consultants - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Power Finance Corporation Ltd., India
- Ceylon Electricity Board - Sri Lanka
- Latin American Coal - Colombia
- Commonwealth Bank - Australia
- Sojitz Corporation - Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Larsen & Toubro Limited - India
- Siam City Cement - Thailand
- Sree Jayajothi Cements Limited - India
- Attock Cement Pakistan Limited
- Anglo American - United Kingdom
- Marubeni Corporation - India
- Parry Sugars Refinery, India
- CNBM International Corporation - China
- Bangladesh Power Developement Board
- Iligan Light & Power Inc, Philippines
- Eastern Energy - Thailand
- Savvy Resources Ltd - HongKong
- Bayan Resources Tbk. - Indonesia
- Medco Energi Mining Internasional
- Directorate General of MIneral and Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Meenaskhi Energy Private Limited - India
- Australian Coal Association
- Indika Energy - Indonesia
- Thai Mozambique Logistica
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