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
CompanyP: 22 Sep 2017P: 21 Sep 2017Gain/LossP/E ttmYield %Gain/Loss YTD
Adaro EnergyADRO1,8151,860-2.42%N/A0.00%4.31%
Bumi ResourcesBUMI206212-2.83%N/A0.00%-24.26%
Delta Dunia MakmurDOID895910-1.65%N/A0.00%70.48%
Harum EnergyHRUM2,1802,190-0.46%N/A0.00%-0.91%
Indo Tambangraya MegahITMG19,75019,7250.13%N/A0.00%14.16%
Tambang Batubara Bukit AsamPTBA10,27510,425-1.44%N/A0.00%-19.57%
Toba Bara SejahtraTOBA1,8001,7701.69%N/A0.00%44.00%
Surya Esa PerkasaESSA1,8001,7602.27%N/A0.00%20.00%
Medco Energi InternasionalMEDC9208952.79%N/A0.00%-31.85%
Aneka Tambang (Antam)ANTM675680-0.74%N/A0.00%-23.73%
Combined Total40,31640,427-0.27%1.30%

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):

Month  2012  2013  2014  2015
 2016  2017
January 109.29  87.55  81.90  63.84  53.20  86.23
February 111.58  88.35  80.44  62.92  50.92  83.32
March 112.87  90.09  77.01  67.76  51.62  81.90
April 105.61  88.56  74.81  64.48  52.32  82.51
May 102.12  85.33  73.60  61.08  51.20  83.81
June  96.65  84.87  73.64  59.59  51.87  75.46
July  87.56  81.69  72.45  59.16  53.00  78.95
August  84.65  76.70  70.29  59.14  58.37  83.97
September  86.21  76.89  69.69  58.21  63.93  92.03
October  86.04  76.61  67.26  57.39  69.07
November  81.44  78.13  65.70  54.43  84.89
December  81.75  80.31  69.23  53.51 101.69

in USD/ton
Source: Ministry of Energy and Mineral Resources

Discuss