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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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Tuesday, 26 April 22
INDIA'S COAL IMPORTS ARE SHIFTING, THERMAL MORE THAN COKING - REUTERS
India’s coal imports are starting to reflect shifting world trade and pricing dynamics in the wake of Russia’s invasion of neighbouring ...
Monday, 18 April 22
GERMAN COAL IMPORTERS EXPECT A BRIEF SPIKE IN PRICES ON EU BAN - REUTERS
A European Union embargo on Russian coal imports will push up prices in the short term before alternative supplies become available to steady the c ...
Monday, 18 April 22
FINNISH 'LOOPHOLES' ALLOW IMPORTS OF RUSSIAN COAL AND OIL TO CONTINUE - EURONEWS
Activists in Finland are calling for the government to clamp down faster on state-owned companies that continue to import raw materials from Russia ...
Monday, 18 April 22
GOVT IN DISCUSSION WITH WORLD BANK ON FRAMEWORK FOR COAL MINE CLOSURE - BUSINESS STANDARD
The coal ministry is in discussions with the World Bank for collaboration on the mine closure framework, a government official said on Wednesday.
...
Monday, 18 April 22
DEMAND FOR THERMAL COAL TO RISE DUE TO INCREASE IN ELECTRICITY DEMAND: INDIAN COAL MINISTRY - PTI
Coal block allocatees have a golden opportunity to augment production as the demand for thermal coal will rise due to an increase in electricity de ...
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- Binh Thuan Hamico - Vietnam
- Port Waratah Coal Services - Australia
- Kalimantan Lumbung Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- Krishnapatnam Port Company Ltd. - India
- Miang Besar Coal Terminal - Indonesia
- Aditya Birla Group - India
- Electricity Authority, New Zealand
- Essar Steel Hazira Ltd - India
- VISA Power Limited - India
- ASAPP Information Group - India
- GAC Shipping (India) Pvt Ltd
- Attock Cement Pakistan Limited
- Wood Mackenzie - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- GMR Energy Limited - India
- Riau Bara Harum - Indonesia
- Kumho Petrochemical, South Korea
- Indika Energy - Indonesia
- SMC Global Power, Philippines
- Carbofer General Trading SA - India
- TNB Fuel Sdn Bhd - Malaysia
- CIMB Investment Bank - Malaysia
- Bhushan Steel Limited - India
- Independent Power Producers Association of India
- Rashtriya Ispat Nigam Limited - India
- Videocon Industries ltd - India
- Coalindo Energy - Indonesia
- Mercuria Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- San Jose City I Power Corp, Philippines
- Uttam Galva Steels Limited - India
- PTC India Limited - India
- Eastern Energy - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Sinarmas Energy and Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Directorate Of Revenue Intelligence - India
- Larsen & Toubro Limited - India
- Aboitiz Power Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Africa Commodities Group - South Africa
- Chamber of Mines of South Africa
- LBH Netherlands Bv - Netherlands
- Ind-Barath Power Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Sindya Power Generating Company Private Ltd
- Samtan Co., Ltd - South Korea
- Formosa Plastics Group - Taiwan
- Latin American Coal - Colombia
- IHS Mccloskey Coal Group - USA
- Price Waterhouse Coopers - Russia
- White Energy Company Limited
- Kobexindo Tractors - Indoneisa
- Interocean Group of Companies - India
- Lanco Infratech Ltd - India
- Trasteel International SA, Italy
- Bulk Trading Sa - Switzerland
- Borneo Indobara - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bukit Makmur.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Cement Manufacturers Association - India
- Wilmar Investment Holdings
- Electricity Generating Authority of Thailand
- Heidelberg Cement - Germany
- Merrill Lynch Commodities Europe
- PetroVietnam Power Coal Import and Supply Company
- Oldendorff Carriers - Singapore
- Tata Chemicals Ltd - India
- Metalloyd Limited - United Kingdom
- IEA Clean Coal Centre - UK
- Jaiprakash Power Ventures ltd
- Edison Trading Spa - Italy
- Manunggal Multi Energi - Indonesia
- SMG Consultants - Indonesia
- Kepco SPC Power Corporation, Philippines
- Romanian Commodities Exchange
- Pendopo Energi Batubara - Indonesia
- Kaltim Prima Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- India Bulls Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Grasim Industreis Ltd - India
- Goldman Sachs - Singapore
- Therma Luzon, Inc, Philippines
- Central Java Power - Indonesia
- Barasentosa Lestari - Indonesia
- Malabar Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Marubeni Corporation - India
- Dalmia Cement Bharat India
- Savvy Resources Ltd - HongKong
- Mercator Lines Limited - India
- The Treasury - Australian Government
- Anglo American - United Kingdom
- Madhucon Powers Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Star Paper Mills Limited - India
- Leighton Contractors Pty Ltd - Australia
- CNBM International Corporation - China
- Indian Oil Corporation Limited
- MS Steel International - UAE
- Altura Mining Limited, Indonesia
- Ministry of Finance - Indonesia
- Bhatia International Limited - India
- Siam City Cement PLC, Thailand
- Sarangani Energy Corporation, Philippines
- Vedanta Resources Plc - India
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Transport, Egypt
- Thiess Contractors Indonesia
- Commonwealth Bank - Australia
- TeaM Sual Corporation - Philippines
- Orica Mining Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Indonesian Coal Mining Association
- Parry Sugars Refinery, India
- Maharashtra Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Karaikal Port Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Bharathi Cement Corporation - India
- PNOC Exploration Corporation - Philippines
- Bangladesh Power Developement Board
- Ceylon Electricity Board - Sri Lanka
- Meralco Power Generation, Philippines
- Maheswari Brothers Coal Limited - India
- Mintek Dendrill Indonesia
- Indian Energy Exchange, India
- SN Aboitiz Power Inc, Philippines
- Petron Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Sidhee Cement - India
- Kartika Selabumi Mining - Indonesia
- Simpson Spence & Young - Indonesia
- Makarim & Taira - Indonesia
- Singapore Mercantile Exchange
- Deloitte Consulting - India
- McConnell Dowell - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karbindo Abesyapradhi - Indoneisa
- Coal and Oil Company - UAE
- Tamil Nadu electricity Board
- Medco Energi Mining Internasional
- Banpu Public Company Limited - Thailand
- Georgia Ports Authority, United States
- Australian Commodity Traders Exchange
- London Commodity Brokers - England
- Posco Energy - South Korea
- Intertek Mineral Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhoruka Overseas - Indonesia
- Thai Mozambique Logistica
- Pipit Mutiara Jaya. PT, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- PowerSource Philippines DevCo
- Xindia Steels Limited - India
- Standard Chartered Bank - UAE
- Meenaskhi Energy Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Sojitz Corporation - Japan
- Gujarat Mineral Development Corp Ltd - India
- New Zealand Coal & Carbon
- Australian Coal Association
- Toyota Tsusho Corporation, Japan
- Ambuja Cements Ltd - India
- Rio Tinto Coal - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parliament of New Zealand
- Eastern Coal Council - USA
- The State Trading Corporation of India Ltd
- Minerals Council of Australia
- Planning Commission, India
- Energy Link Ltd, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Renaissance Capital - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GVK Power & Infra Limited - India
- Central Electricity Authority - India
- Bukit Asam (Persero) Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Orica Australia Pty. Ltd.
- Agrawal Coal Company - India
- Antam Resourcindo - Indonesia
- Energy Development Corp, Philippines
- Vizag Seaport Private Limited - India
- Ministry of Mines - Canada
- International Coal Ventures Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- The University of Queensland
- Power Finance Corporation Ltd., India
- Jindal Steel & Power Ltd - India
- Coastal Gujarat Power Limited - India
- Global Business Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Economic Council, Georgia
- Cigading International Bulk Terminal - Indonesia
- Sical Logistics Limited - India
- Indogreen Group - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Baramulti Group, Indonesia
- ICICI Bank Limited - India
- Sakthi Sugars Limited - India
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