Several big coal mining companies, listed on the Indonesia Stock Exchange, saw their shares slide drastically on Wednesday (13/09) after Indonesian Energy and Mineral Resources Minister Ignasius Jonan announced to be considering formulating new rules to determine the price of coal for domestic supplies. However, no time-frame was given as Jonan will first listen to input from the mining sector.
In essence, the government wants to make the domestic coal price cheaper as this would provide room for state-owned electricity company Perusahaan Listrik Negara (PLN) to reduce electricity tariffs.
Problematically for the company, the benchmark Indonesian coal price (Harga Batubara Acuan, or HBA) soared 9.6 percent month-on-month (m/m) to USD $92.03 per metric ton in September 2017, from USD $83.97 in the preceding month. Indonesia's HBA is now at its highest (most expensive) position since December 2016.
Considering PLN buys most of the coal (for its coal-fired power stations) on the Indonesian market, the recently surging coal price causes a steep rise in operational costs. The company requires about 90 million tons of coal each year to fuel its coal-fired power plants.
Those companies that sell a big portion of their coal production to PLN were particularly affected on Wednesday's trading day (13/09) as investors are concerned that these companies' corporate earnings are affected most severely by the looming new rules that would cap the domestic coal price. Meanwhile, those Indonesian coal miners that export a big chunk of their output are considered less affected. However, Indonesian law requires all coal miners to set aside a portion of their output for domestic sales, thus all coal mining companies are basically affected.
Read more: Overview of Indonesia's Coal Industry
For example, Tambang Batubara Bukit Asam's shares plunged 17.25 percent to IDR 10,075, while shares of Bumi Resources fell 9.17 percent to IDR 218 a piece, and Adaro Energy declined 8.04 percent to IDR 1,715 per share.
Last Update: 22 Sep 2017
Selection of Listed Indonesian Coal Mining Companies
|Company||P: 22 Sep 2017||P: 21 Sep 2017||Gain/Loss||P/E ttm||Yield %||Gain/Loss YTD|
|Delta Dunia MakmurDOID||895||910||-1.65%||N/A||0.00%||70.48%|
|Indo Tambangraya MegahITMG||19,750||19,725||0.13%||N/A||0.00%||14.16%|
|Tambang Batubara Bukit AsamPTBA||10,275||10,425||-1.44%||N/A||0.00%||-19.57%|
|Toba Bara SejahtraTOBA||1,800||1,770||1.69%||N/A||0.00%||44.00%|
|Surya Esa PerkasaESSA||1,800||1,760||2.27%||N/A||0.00%||20.00%|
|Medco Energi InternasionalMEDC||920||895||2.79%||N/A||0.00%||-31.85%|
|Aneka Tambang (Antam)ANTM||675||680||-0.74%||N/A||0.00%||-23.73%|
Green colour indicates upward movement
Red colour indicates downward movement
P = price; E = earnings; D = dividend; Yield = D/P
"N/A" indicates P/E < 0 (negative earnings)
"-" indicates E,D,P or YTD is not available
Indonesian Government's Benchmark Thermal Coal Price (HBA):
Source: Ministry of Energy and Mineral Resources