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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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Thursday, 12 April 18
ALWAYS ACCESSIBLE
KNOWLEDGE TO ELEVATE
On 26 March 2018 Mr Justice Knowles determined that the berth warranty ‘always accessible’ must mean the vess ...
Wednesday, 11 April 18
CHINA UTILITIES PLAN NEW COAL IMPORT PRICE INDEX TO CURB VOLATILITY - REUTERS
China’s major utilities are preparing to launch their own coal price index for imports, an official at China Huaneng Group said, in a move th ...
Wednesday, 11 April 18
US-CHINA TARIFF THREATS RAISE GLOBAL TRADE RISKS - FITCH
Escalating tariff proposals by the U.S. and Chinese governments are increasing the risks of a full-blown trade war, says Fitch Ratings. The most li ...
Tuesday, 10 April 18
BUMA GRANTED ADDITIONAL LOAN FACILITY FROM BTMU TO SUPPORT GROWTH
Press Release: PT Delta Dunia Makmur Tbk. is pleased to announce that its subsidiary, PT Bukit Makmur Mandiri Utama ("BUMA"), signed an a ...
Monday, 09 April 18
APRIL INDONESIAN COAL PRICE REFERENCE DROPS TO LOWEST IN 2018
COALspot.com: According to latest ministerial decree, the Indonesian Coal Price Reference (HBA) decline 6.98 per cent in April 2018 compared to Mar ...
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- Kaltim Prima Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Dalmia Cement Bharat India
- Altura Mining Limited, Indonesia
- IHS Mccloskey Coal Group - USA
- Ambuja Cements Ltd - India
- Mercuria Energy - Indonesia
- Siam City Cement PLC, Thailand
- Medco Energi Mining Internasional
- South Luzon Thermal Energy Corporation
- Heidelberg Cement - Germany
- Barasentosa Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Mintek Dendrill Indonesia
- Rashtriya Ispat Nigam Limited - India
- Energy Development Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Wilmar Investment Holdings
- The University of Queensland
- Georgia Ports Authority, United States
- Global Green Power PLC Corporation, Philippines
- VISA Power Limited - India
- Tata Chemicals Ltd - India
- Metalloyd Limited - United Kingdom
- Global Business Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Videocon Industries ltd - India
- Globalindo Alam Lestari - Indonesia
- Planning Commission, India
- Kumho Petrochemical, South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Independent Power Producers Association of India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Sree Jayajothi Cements Limited - India
- Bhoruka Overseas - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Vizag Seaport Private Limited - India
- Star Paper Mills Limited - India
- Coal and Oil Company - UAE
- Chettinad Cement Corporation Ltd - India
- Semirara Mining Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Salva Resources Pvt Ltd - India
- Mercator Lines Limited - India
- Parry Sugars Refinery, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Riau Bara Harum - Indonesia
- CNBM International Corporation - China
- Siam City Cement - Thailand
- Aboitiz Power Corporation - Philippines
- Sojitz Corporation - Japan
- Oldendorff Carriers - Singapore
- ASAPP Information Group - India
- Bhushan Steel Limited - India
- Australian Commodity Traders Exchange
- Mjunction Services Limited - India
- Africa Commodities Group - South Africa
- Coalindo Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Posco Energy - South Korea
- Latin American Coal - Colombia
- Economic Council, Georgia
- SMG Consultants - Indonesia
- GAC Shipping (India) Pvt Ltd
- San Jose City I Power Corp, Philippines
- Trasteel International SA, Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Grasim Industreis Ltd - India
- Jindal Steel & Power Ltd - India
- Indogreen Group - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Thai Mozambique Logistica
- Price Waterhouse Coopers - Russia
- Indo Tambangraya Megah - Indonesia
- Maheswari Brothers Coal Limited - India
- Kepco SPC Power Corporation, Philippines
- Indonesian Coal Mining Association
- Parliament of New Zealand
- Goldman Sachs - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Standard Chartered Bank - UAE
- Bukit Baiduri Energy - Indonesia
- Makarim & Taira - Indonesia
- Jaiprakash Power Ventures ltd
- Sakthi Sugars Limited - India
- Directorate Of Revenue Intelligence - India
- Savvy Resources Ltd - HongKong
- Chamber of Mines of South Africa
- Meenaskhi Energy Private Limited - India
- Banpu Public Company Limited - Thailand
- Miang Besar Coal Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- White Energy Company Limited
- Petron Corporation, Philippines
- Interocean Group of Companies - India
- Electricity Authority, New Zealand
- Baramulti Group, Indonesia
- Tamil Nadu electricity Board
- Xindia Steels Limited - India
- Wood Mackenzie - Singapore
- Thiess Contractors Indonesia
- Merrill Lynch Commodities Europe
- Iligan Light & Power Inc, Philippines
- Bhatia International Limited - India
- Cigading International Bulk Terminal - Indonesia
- Central Java Power - Indonesia
- MS Steel International - UAE
- Ministry of Mines - Canada
- Gujarat Mineral Development Corp Ltd - India
- SN Aboitiz Power Inc, Philippines
- Edison Trading Spa - Italy
- Lanco Infratech Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Central Electricity Authority - India
- London Commodity Brokers - England
- European Bulk Services B.V. - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Therma Luzon, Inc, Philippines
- PTC India Limited - India
- PowerSource Philippines DevCo
- Marubeni Corporation - India
- Borneo Indobara - Indonesia
- Sical Logistics Limited - India
- Bangladesh Power Developement Board
- Pendopo Energi Batubara - Indonesia
- TeaM Sual Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Sarangani Energy Corporation, Philippines
- GMR Energy Limited - India
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- LBH Netherlands Bv - Netherlands
- Ceylon Electricity Board - Sri Lanka
- Carbofer General Trading SA - India
- Minerals Council of Australia
- Romanian Commodities Exchange
- Essar Steel Hazira Ltd - India
- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- Ministry of Finance - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Billiton Holdings Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Uttam Galva Steels Limited - India
- SMC Global Power, Philippines
- Leighton Contractors Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- OPG Power Generation Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Indian Oil Corporation Limited
- Kartika Selabumi Mining - Indonesia
- Cement Manufacturers Association - India
- Attock Cement Pakistan Limited
- Australian Coal Association
- Singapore Mercantile Exchange
- Rio Tinto Coal - Australia
- Renaissance Capital - South Africa
- PNOC Exploration Corporation - Philippines
- New Zealand Coal & Carbon
- Aditya Birla Group - India
- Bharathi Cement Corporation - India
- Power Finance Corporation Ltd., India
- Kohat Cement Company Ltd. - Pakistan
- India Bulls Power Limited - India
- International Coal Ventures Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Deloitte Consulting - India
- Ministry of Transport, Egypt
- Antam Resourcindo - Indonesia
- Eastern Energy - Thailand
- Vedanta Resources Plc - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Malabar Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Larsen & Toubro Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Karaikal Port Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- McConnell Dowell - Australia
- Binh Thuan Hamico - Vietnam
- Indian Energy Exchange, India
- The State Trading Corporation of India Ltd
- Orica Australia Pty. Ltd.
- Eastern Coal Council - USA
- Bukit Makmur.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Commonwealth Bank - Australia
- Bayan Resources Tbk. - Indonesia
- Madhucon Powers Ltd - India
- Electricity Generating Authority of Thailand
- PetroVietnam Power Coal Import and Supply Company
- GVK Power & Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Intertek Mineral Services - Indonesia
- Samtan Co., Ltd - South Korea
- Anglo American - United Kingdom
- Bulk Trading Sa - Switzerland
- Sinarmas Energy and Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Agrawal Coal Company - India
- Indika Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Ind-Barath Power Infra Limited - India
- Orica Mining Services - Indonesia
- The Treasury - Australian Government
- ICICI Bank Limited - India
- IEA Clean Coal Centre - UK
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