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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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Monday, 02 April 18
THIESS SECURES $240M SATUI EXTENSION
The successful implementation of an innovative mining plan by Thiess at the Satui coal mine in South Kalimantan, has resulted in a $240 million con ...
Friday, 30 March 18
SHIPPING INDUSTRY CONFIDENCE HITS FOUR-YEAR HIGH - MOORE STEPHENS
Shipping Confidence Survey
In February 2018, the average confidence level expressed by respondents was up from 6.2 in November 2017 t ...
Friday, 30 March 18
EXPLAINING POLAND'S COAL PARADOX - FORBES
In the U.S. coal is succumbing to market forces despite the Trump Administration’s push to support the industry. Abundant, cheap and cleaner ...
Friday, 30 March 18
THIESS SECURES $140M MT OWEN INCREASE
Thiess has secured a A$140 million increase to its contract with Glencore for coal mining services at Mt Owen in the Hunter Valley, Australia. Mt O ...
Wednesday, 28 March 18
THIESS WINS $280M WAHANA EXTENSION
Thiess has been awarded a three-year $280 million contract extension at the Wahana coal mine in South Kalimantan, Indonesia.
According to Thie ...
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- Sinarmas Energy and Mining - Indonesia
- Makarim & Taira - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Transport, Egypt
- Petrochimia International Co. Ltd.- Taiwan
- Parliament of New Zealand
- Ministry of Finance - Indonesia
- Sree Jayajothi Cements Limited - India
- South Luzon Thermal Energy Corporation
- Sakthi Sugars Limited - India
- Parry Sugars Refinery, India
- Mintek Dendrill Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meralco Power Generation, Philippines
- Star Paper Mills Limited - India
- Wilmar Investment Holdings
- IEA Clean Coal Centre - UK
- Indian Oil Corporation Limited
- Bahari Cakrawala Sebuku - Indonesia
- GVK Power & Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Alfred C Toepfer International GmbH - Germany
- Ambuja Cements Ltd - India
- The State Trading Corporation of India Ltd
- Kideco Jaya Agung - Indonesia
- Coastal Gujarat Power Limited - India
- TeaM Sual Corporation - Philippines
- Petron Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Formosa Plastics Group - Taiwan
- SMC Global Power, Philippines
- Bhatia International Limited - India
- Indo Tambangraya Megah - Indonesia
- Sarangani Energy Corporation, Philippines
- New Zealand Coal & Carbon
- Standard Chartered Bank - UAE
- Miang Besar Coal Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Planning Commission, India
- Directorate Of Revenue Intelligence - India
- CNBM International Corporation - China
- Electricity Generating Authority of Thailand
- ICICI Bank Limited - India
- Barasentosa Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Riau Bara Harum - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Indika Energy - Indonesia
- Essar Steel Hazira Ltd - India
- The Treasury - Australian Government
- Thiess Contractors Indonesia
- Minerals Council of Australia
- Edison Trading Spa - Italy
- Bukit Makmur.PT - Indonesia
- Siam City Cement PLC, Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- London Commodity Brokers - England
- Sojitz Corporation - Japan
- Heidelberg Cement - Germany
- Orica Australia Pty. Ltd.
- Renaissance Capital - South Africa
- Chamber of Mines of South Africa
- Global Business Power Corporation, Philippines
- The University of Queensland
- Bukit Baiduri Energy - Indonesia
- Siam City Cement - Thailand
- Baramulti Group, Indonesia
- Iligan Light & Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Ind-Barath Power Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Kobexindo Tractors - Indoneisa
- Rio Tinto Coal - Australia
- India Bulls Power Limited - India
- Aditya Birla Group - India
- Xindia Steels Limited - India
- Bhushan Steel Limited - India
- Thai Mozambique Logistica
- Deloitte Consulting - India
- Billiton Holdings Pty Ltd - Australia
- Indogreen Group - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Mercuria Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- San Jose City I Power Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Economic Council, Georgia
- IHS Mccloskey Coal Group - USA
- Mercator Lines Limited - India
- Global Green Power PLC Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Sindya Power Generating Company Private Ltd
- Therma Luzon, Inc, Philippines
- Simpson Spence & Young - Indonesia
- MS Steel International - UAE
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Anglo American - United Kingdom
- Indonesian Coal Mining Association
- Agrawal Coal Company - India
- Kalimantan Lumbung Energi - Indonesia
- Sical Logistics Limited - India
- Attock Cement Pakistan Limited
- Kumho Petrochemical, South Korea
- Tata Chemicals Ltd - India
- Trasteel International SA, Italy
- ASAPP Information Group - India
- Goldman Sachs - Singapore
- McConnell Dowell - Australia
- GN Power Mariveles Coal Plant, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- Jindal Steel & Power Ltd - India
- Carbofer General Trading SA - India
- VISA Power Limited - India
- Larsen & Toubro Limited - India
- Medco Energi Mining Internasional
- Vizag Seaport Private Limited - India
- Banpu Public Company Limited - Thailand
- Manunggal Multi Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Globalindo Alam Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Metalloyd Limited - United Kingdom
- Holcim Trading Pte Ltd - Singapore
- LBH Netherlands Bv - Netherlands
- Central Electricity Authority - India
- Bhoruka Overseas - Indonesia
- Energy Development Corp, Philippines
- Malabar Cements Ltd - India
- Eastern Coal Council - USA
- Salva Resources Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Kartika Selabumi Mining - Indonesia
- Indian Energy Exchange, India
- Mjunction Services Limited - India
- Savvy Resources Ltd - HongKong
- Kepco SPC Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Merrill Lynch Commodities Europe
- Tamil Nadu electricity Board
- Coalindo Energy - Indonesia
- Central Java Power - Indonesia
- Lanco Infratech Ltd - India
- Africa Commodities Group - South Africa
- Orica Mining Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Karaikal Port Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Australian Commodity Traders Exchange
- Kaltim Prima Coal - Indonesia
- SMG Consultants - Indonesia
- Borneo Indobara - Indonesia
- Coal and Oil Company - UAE
- Uttam Galva Steels Limited - India
- Interocean Group of Companies - India
- Rashtriya Ispat Nigam Limited - India
- Bharathi Cement Corporation - India
- GMR Energy Limited - India
- Wood Mackenzie - Singapore
- Marubeni Corporation - India
- Commonwealth Bank - Australia
- Semirara Mining Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Singapore Mercantile Exchange
- Oldendorff Carriers - Singapore
- Timah Investasi Mineral - Indoneisa
- Antam Resourcindo - Indonesia
- Posco Energy - South Korea
- Eastern Energy - Thailand
- Power Finance Corporation Ltd., India
- Toyota Tsusho Corporation, Japan
- Australian Coal Association
- Vedanta Resources Plc - India
- Maheswari Brothers Coal Limited - India
- Samtan Co., Ltd - South Korea
- PTC India Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Mines - Canada
- Dalmia Cement Bharat India
- Bangladesh Power Developement Board
- Port Waratah Coal Services - Australia
- Altura Mining Limited, Indonesia
- Bulk Trading Sa - Switzerland
- Georgia Ports Authority, United States
- Neyveli Lignite Corporation Ltd, - India
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining and Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Intertek Mineral Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cement Manufacturers Association - India
- Vijayanagar Sugar Pvt Ltd - India
- Romanian Commodities Exchange
- SN Aboitiz Power Inc, Philippines
- Latin American Coal - Colombia
- Karbindo Abesyapradhi - Indoneisa
- Electricity Authority, New Zealand
- Madhucon Powers Ltd - India
- Straits Asia Resources Limited - Singapore
- PowerSource Philippines DevCo
- Grasim Industreis Ltd - India
- White Energy Company Limited
- Energy Link Ltd, New Zealand
- PNOC Exploration Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Independent Power Producers Association of India
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