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Thursday, 22 December 22
COAL AND GAS PRICE CAPS MAY COMPOUND POLITICAL RISK FOR AUSTRALIAN CORPORATES - FITCH RATINGS
 Australia’s introduction of temporary price caps on domestic sales of gas and coal used for electricity generation will probably have limited direct near-term credit impact for energy-sector issuers rated by Fitch Ratings, according to the agency. However, the caps highlight that energy companies face mounting political risks that could influence investor perceptions of the sector and capex plans over the long term.
The caps have been proposed for 12 months, but even if they are extended, the direct impact should generally be limited if prices for coal and gas fall over the coming years, in line with Fitch’s base-case assumptions.
The near-term impact on Australian thermal coal miners’ financial profiles will be further mitigated, as typically around 80% of the thermal coal produced in the country is exported, and therefore is not subject to the cap.
The natural gas sector will be more exposed, as domestic demand accounts for a larger share of supply. Santos (BBB/Stable) and Woodside Energy Group (BBB+/Stable) are large suppliers of gas to the domestic market. Such sales account for more than 40% of Santos’s gas production, but we estimate that only around 15% of total production goes to the east coast markets that are exposed to the price cap.
Woodside’s domestic gas sales, including pipeline gas from the NWS Project, Pluto and Wheatstone, account for less than 6% of its gas production, with the rest exported as LNG. For both companies, most gas is already produced under long-term contracts, which will be unaffected by the caps, limiting the near-term impact. The proportion of output affected could nonetheless rise over time if the caps are extended beyond 12 months.
The prevalence of long-term supply contracts will also reduce the impact of the caps for most domestic electricity and gas retailers, including Origin Energy (BBB/Stable). If global energy prices remain high, it is possible that the caps could offer a competitive advantage to some retailers that rely more on short-term supply contracts. That said, the superior sourcing ability and flexibility in contracts should limit downside risks for large retailers. For electricity sales, the highest-cost power generator generally determines the wholesale energy market price, and we anticipate a neutral to marginally positive financial effect for entities like Origin that have flexibility in their generation portfolio.
The price caps will add to a perception that Australia’s mining sector faces mounting political risk, even though we do not believe they will have a major impact on Fitch-rated issuers in the near term. For example, the government has announced plans to implement a new system to protect sites important to Australia’s indigenous peoples. Firms in the sector, as in other parts of the world, also face political risks associated with official efforts to promote the transition to renewable energy sources.
Mounting political risk may influence investors’ perceptions of the sector, and therefore the terms on which companies are able to access finance. This could also have ramifications for M&A plans or long-term capex strategies. Nonetheless, it is likely to take time to assess the impact, which may also be offset by other market developments.
Australia’s parliament on 16 December passed legislation empowering the government to regulate gas prices, alongside an AUD1.5 billion relief package for firms and households. It remains unclear how the relief package will affect power and gas market dynamics, but we expect its impact to be temporary. The authorities plan to cap domestic gas prices at AUD12 per gigajoule. Domestic thermal coal sales prices in New South Wales and Queensland will also be capped at AUD125 per tonne.
Source: Fitch Ratings
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Wednesday, 07 December 22
INDIA'S STEEL MINISTRY SEEKS IMPORT TAX WAIVER FOR COKING COAL - SOURCES REUTERS REPORTED
India’s steel ministry has asked the finance ministry for a waiver of import tax on coking coal among a slew of raw materials, as it scramble ...
Tuesday, 06 December 22
INDIA'S COAL PRODUCTION RISES 17% IN APR-NOV PERIOD - PTI
The country’s coal production increased 17 per cent to 524.20 million tonnes in the April-November period of the ongoing fiscal.
...
Tuesday, 06 December 22
INDONESIA AIMS TO STARTS COLLECTING COAL LEVY IN Q1 2023 - MINISTER, REUTERS REPORTED
Indonesia aims to establish a coal fund agency and start collecting a coal levy in the first quarter next year, to help ensure supply security for ...
Saturday, 03 December 22
COMPLEX RUSSIAN PRICE CAP MAKES MARITIME VISIBILITY A MUST - WINDWARD
Many commentators and analysts are speculating about the potential impact the Russian seaborne oil price cap will have on organizations and entitie ...
Friday, 02 December 22
INDONESIAN COAL PRICE REFERENCE PLUNGE TOWARD US$ 281.48 A TON AS DEMAND DROPS WORLDWIDE
COALspot.com: The cost of coal is falling so fast that it is beginning to put real money back in the pockets of end-users.
Indonesia ...
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- Makarim & Taira - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Banpu Public Company Limited - Thailand
- Electricity Generating Authority of Thailand
- Economic Council, Georgia
- Gujarat Sidhee Cement - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Sical Logistics Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- MS Steel International - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Maheswari Brothers Coal Limited - India
- Africa Commodities Group - South Africa
- Orica Australia Pty. Ltd.
- Bukit Baiduri Energy - Indonesia
- Uttam Galva Steels Limited - India
- Eastern Energy - Thailand
- Indika Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Attock Cement Pakistan Limited
- Cigading International Bulk Terminal - Indonesia
- Vedanta Resources Plc - India
- Power Finance Corporation Ltd., India
- GMR Energy Limited - India
- San Jose City I Power Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Coal Association
- Directorate General of MIneral and Coal - Indonesia
- Commonwealth Bank - Australia
- Marubeni Corporation - India
- Altura Mining Limited, Indonesia
- McConnell Dowell - Australia
- Eastern Coal Council - USA
- Antam Resourcindo - Indonesia
- GAC Shipping (India) Pvt Ltd
- Heidelberg Cement - Germany
- Toyota Tsusho Corporation, Japan
- Sojitz Corporation - Japan
- Ceylon Electricity Board - Sri Lanka
- Simpson Spence & Young - Indonesia
- Agrawal Coal Company - India
- Central Electricity Authority - India
- Aboitiz Power Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Salva Resources Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- New Zealand Coal & Carbon
- GVK Power & Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- Bhoruka Overseas - Indonesia
- Thai Mozambique Logistica
- Coal and Oil Company - UAE
- Xindia Steels Limited - India
- Sindya Power Generating Company Private Ltd
- Baramulti Group, Indonesia
- The Treasury - Australian Government
- Wood Mackenzie - Singapore
- Leighton Contractors Pty Ltd - Australia
- Singapore Mercantile Exchange
- Karaikal Port Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- White Energy Company Limited
- IEA Clean Coal Centre - UK
- Indonesian Coal Mining Association
- Jaiprakash Power Ventures ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Authority, New Zealand
- Interocean Group of Companies - India
- Planning Commission, India
- Meralco Power Generation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Mjunction Services Limited - India
- Merrill Lynch Commodities Europe
- Videocon Industries ltd - India
- Siam City Cement - Thailand
- Global Coal Blending Company Limited - Australia
- ICICI Bank Limited - India
- Samtan Co., Ltd - South Korea
- Tata Chemicals Ltd - India
- PowerSource Philippines DevCo
- Borneo Indobara - Indonesia
- Cement Manufacturers Association - India
- VISA Power Limited - India
- Energy Link Ltd, New Zealand
- Sree Jayajothi Cements Limited - India
- Rashtriya Ispat Nigam Limited - India
- Global Business Power Corporation, Philippines
- Trasteel International SA, Italy
- Mercuria Energy - Indonesia
- Minerals Council of Australia
- Price Waterhouse Coopers - Russia
- Holcim Trading Pte Ltd - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Riau Bara Harum - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- Madhucon Powers Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Tamil Nadu electricity Board
- Sakthi Sugars Limited - India
- Romanian Commodities Exchange
- Star Paper Mills Limited - India
- Chamber of Mines of South Africa
- Meenaskhi Energy Private Limited - India
- Renaissance Capital - South Africa
- Kideco Jaya Agung - Indonesia
- Indian Energy Exchange, India
- Australian Commodity Traders Exchange
- Posco Energy - South Korea
- Semirara Mining Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- LBH Netherlands Bv - Netherlands
- Neyveli Lignite Corporation Ltd, - India
- Miang Besar Coal Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Wilmar Investment Holdings
- Petron Corporation, Philippines
- CNBM International Corporation - China
- ASAPP Information Group - India
- Goldman Sachs - Singapore
- OPG Power Generation Pvt Ltd - India
- Deloitte Consulting - India
- Parry Sugars Refinery, India
- Ind-Barath Power Infra Limited - India
- Georgia Ports Authority, United States
- Ministry of Transport, Egypt
- Ministry of Mines - Canada
- PTC India Limited - India
- Ministry of Finance - Indonesia
- Coalindo Energy - Indonesia
- Standard Chartered Bank - UAE
- Siam City Cement PLC, Thailand
- European Bulk Services B.V. - Netherlands
- Independent Power Producers Association of India
- Kartika Selabumi Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Pendopo Energi Batubara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Latin American Coal - Colombia
- TNB Fuel Sdn Bhd - Malaysia
- Iligan Light & Power Inc, Philippines
- Indian Oil Corporation Limited
- Bhushan Steel Limited - India
- Sarangani Energy Corporation, Philippines
- Coastal Gujarat Power Limited - India
- The University of Queensland
- Medco Energi Mining Internasional
- Globalindo Alam Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Rio Tinto Coal - Australia
- Orica Mining Services - Indonesia
- Bharathi Cement Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Lanco Infratech Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Aditya Birla Group - India
- Jindal Steel & Power Ltd - India
- Larsen & Toubro Limited - India
- SMC Global Power, Philippines
- Parliament of New Zealand
- SMG Consultants - Indonesia
- Kumho Petrochemical, South Korea
- Bukit Makmur.PT - Indonesia
- Ambuja Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Binh Thuan Hamico - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- South Luzon Thermal Energy Corporation
- Gujarat Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mintek Dendrill Indonesia
- Dalmia Cement Bharat India
- Intertek Mineral Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Barasentosa Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- Thiess Contractors Indonesia
- The State Trading Corporation of India Ltd
- Malabar Cements Ltd - India
- India Bulls Power Limited - India
- Oldendorff Carriers - Singapore
- Bhatia International Limited - India
- Formosa Plastics Group - Taiwan
- Vizag Seaport Private Limited - India
- Anglo American - United Kingdom
- Mercator Lines Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Carbofer General Trading SA - India
- Grasim Industreis Ltd - India
- London Commodity Brokers - England
- Metalloyd Limited - United Kingdom
- Central Java Power - Indonesia
- Therma Luzon, Inc, Philippines
- Edison Trading Spa - Italy
- Gujarat Mineral Development Corp Ltd - India
- Bangladesh Power Developement Board
- IHS Mccloskey Coal Group - USA
- Indogreen Group - Indonesia
- Kobexindo Tractors - Indoneisa
- Directorate Of Revenue Intelligence - India
- Global Green Power PLC Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Energy Development Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- SN Aboitiz Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
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