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: 23 Jan 2018
Selection of Listed Indonesian Coal Mining Companies
CompanyP: 23 Jan 2018P: 22 Jan 2018Gain/LossP/E ttmYield %Gain/Loss YTD
Adaro EnergyADRO2,4202,3104.76%N/A0.00%28.72%
Bumi ResourcesBUMI2982980.00%N/A0.00%11.19%
Delta Dunia MakmurDOID1,0509906.06%N/A0.00%45.83%
Harum EnergyHRUM3,1302,70015.93%N/A0.00%52.68%
Indo Tambangraya MegahITMG28,50028,4750.09%N/A0.00%39.19%
Tambang Batubara Bukit AsamPTBA3,3203,3000.61%N/A0.00%32.80%
Toba Bara SejahtraTOBA2,6702,4508.98%N/A0.00%17.62%
Surya Esa PerkasaESSA2562502.40%N/A0.00%34.03%
Medco Energi InternasionalMEDC1,2801,285-0.39%N/A0.00%43.02%
Aneka Tambang (Antam)ANTM8007753.23%N/A0.00%25.98%
Combined Total43,72442,8332.08%37.13%

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