Below is a list with tagged columns and company profiles.

Today's Headlines Coal

  • Amid Sluggish Global Economy Value of Indonesian Exports Revised Down

    With China’s economic growth slowing to 7.3 percent year-on-year (y/y) in the third quarter of 2014, Indonesian exports will be affected as China is one of Indonesia’s most important trading partners. Prior to the release of China’s Q3-2014 GDP growth result, the outgoing government of Indonesia had already trimmed its export target for 2014 as global commodity prices have still not picked up. In fact prices of palm oil, coal, rubber, copper and iron ore have fallen in the first three quarters of 2014 according to Indonesian government data.

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  • Illegal Coal Shipments from Indonesia Form a Persistent Problem

    R. Sukhyar, Director General for Coal and Mineral Resources at the Indonesian Ministry of Energy and Mineral Resources, stated that the country is plagued by structural illegal coal shipments from coal-rich regions in Kalimantan and Sumatra. Sukhyar estimates that each year between 30 and 40 million tons of coal is exported illegally from Indonesia, Southeast Asia’s largest economy. Based on current coal prices, this would imply that USD $1.2 billion worth of coal is shipped illegally per year causing the government to miss out on royalties.

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  • Indonesia Coal Update: Export, Production and New License System

    Indonesia Coal Update: Export, Production and New License System

    The Indonesian government cannot inform yet about the exact impact of the recently introduced ‘Listed Exporter’ status (Indonesian: Eksportir Terdaftar, ET) on Indonesian coal exports. In the first three quarters of 2014, Indonesia exported a total of 234.8 million tons of coal. The government targets to produce between 390 and 420 million tons of coal this year (of which 90 million tons are required to be absorbed by the domestic market). However, newly introduced rules in the coal industry have led to confusion and may limit coal exports.

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  • Joko “Jokowi” Widodo to Reform Indonesian Energy Sector

    Indonesia’s seventh president Joko Widodo, who will take office on 20 October 2014, wants to conduct several reforms in Indonesia’s energy sector in an attempt to combat illegal practices and optimize state income. Firstly, Joko Widodo, popularly known as Jokowi, plans to audit operations of state-owned Pertamina’s energy trading unit Petral to halt alleged fuel smuggling and corruption. Secondly, Jokowi wants to impose major changes at Pertamina. Lastly, the president-elect wants to curb coal exports to ensure domestic supplies for power plants.

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  • Coal Mining News Update Indonesia: Production, Export and China Ban

    Indonesia’s Ministry of Energy and Mineral Resources said that in the period January-August 2014 Indonesian coal production reached 280 million tons and coal exports 224 million tons. Director General for Coal and Mineral Resources R. Sukhyar added that miners that hold Coal Contracts of Work (PKP2B) account for 80 percent of total domestic coal production, while Mining Business Permit (IUP) holders account for the remainder. The Ministry targets total coal production to reach between 390 and 420 million tons in 2014.

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  • Introduction New Export Rules for Indonesian Coal Miners Delayed

    Indonesia's tighter coal export policy, originally scheduled to be implemented on 1 September 2014 has been delayed one month. Director General for Coal and Mineral Resources at the Ministry for Energy and Mineral Resources, R. Sukhyar, explained that this delay does not mean that the policy will be changed. Indonesian coal miners still need to obtain a ‘listed exporter’ status (Eksportir Terdaftar, ET) from the ministry to export coal. The new rule applies to miners that hold Coal Contracts of Work (PKP2B) and Mining Business Permits (IUP).

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  • Electricity in Indonesia: Plenty Natural Resources but Shortage of Electricity

    Despite having abundant natural resources at its disposal (including coal and gas), Indonesia has difficulty to supply enough electricity to its people and businesses. Robust economic growth over the past decade has given rise to increased domestic demand for electricity but the country has not been able to adequately meet demand resulting in frequent blackouts and in one of the lowest electrification rates (the percentage of Indonesian households connected to the nation's electricity grid) in the region (about 80.4 percent at end-2013).

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  • Heavy Equipment Market in Indonesia Burdened by Low Commodity Prices

    The production of heavy equipment in Indonesia in the first half of 2014 fell by 25 percent (year-on-year) to 2,292 units. The decline in production is due to the still weak state of the mining and construction sectors in Southeast Asia’s largest economy. Main reasons being the implementation of the mineral ore export ban in January 2014 and low commodity prices, for example coal. Limited construction projects have been undertaken in the first half of 2014 as investors wanted to wait for the results of Indonesia’s legislative and presidential elections first.

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  • Coal Mining in Indonesia: Coal Production Grows in First Half of 2014

    Indonesian coal production reached 213 million tons in the first half of 2014, a 7.6 percentage point growth from the same period in the previous year (198 million tons), as coal miners have been boosting coal output amid sluggish international coal prices. Approximately 75 percent of this output (158 million tons) was exported abroad. Indonesia is the world’s largest thermal coal producer and exporter. The country’s coal primarily consists of the medium-quality type (between 5100 and 6100 cal/gram) and the low-quality type (below 5100 cal/gram).

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  • IPO of Coal Miner Mitrabara Adiperdana on the Indonesia Stock Exchange

    Mitrabara Adiperdana, an Indonesia-based coal miner, is planning to conduct an initial public offering (IPO) on the Indonesia Stock Exchange in July 2014. The company will offer 273.03 million shares, or 22 percent of its enlarged share base, to the public at a price range of IDR 1,150 to IDR 1,350 per share. Through this corporate action, the miner targets to raise IDR 368.6 billion (USD $31 million). Reportedly, after the IPO, Japan’s Idemitsu Kosan Co Ltd has an option to purchase a 27.68 percent stake in the Indonesian coal miner.

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Latest Columns Coal

  • Indonesian Companies in Focus: Coal Miner Adaro Energy

    Indonesian Companies in Focus: Coal Miner Adaro Energy

    Adaro Energy, one of Indonesia's leading coal mining companies, is still plagued by the globe's weak coal prices. However, the company's estimated lower cash and operational costs give a positive boost to the miner's corporate earnings this year. According to Danareksa Sekuritas' estimates the cost of mining for Adaro Energy (outside royalty payments) will range between USD $26 - $28 per ton in 2016, slightly down from USD $28 per ton last year. Meanwhile, the miner's stripping ratio is expected to decline to 4.7x in 2016 (from 5.2x last year).

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  • Indonesian Companies in Focus: Astra International Facing Challenges

    Indonesian Companies in Focus: Astra International Facing Challenges

    One of the leading diversified conglomerates in Indonesia, Astra International, is facing challenges. Demand for cars has been on the decline in Indonesia over the past two years. This is a big challenge for the company because the automotive sector accounts for about half of Astra's total earnings. Meanwhile, its heavy equipment & mining segment and the financial services segment have been under severe pressure. Net income in the heavy equipment & mining segment plunged 55 percent (y/y) in Q1-2016, while net income in the financial services segment tumbled 46 percent (y/y) over the same period.

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  • Tambang Batubara Bukit Asam: Only Coal Miner in Indonesia to See Growth?

    Tambang Batubara Bukit Asam: Only Coal Miner in Indonesia to See Growth?

    State-controlled coal mining company Tambang Batubara Bukit Asam may be the only Indonesian coal producer that will post higher sales in 2016, both in terms of volume and revenue. The nation's other coal miners are expected to see further dropping coal sales due to sluggish global demand although coal prices may stabilize this year. According to Trimegah Securities Bukit Asam's coal sales volume will rise 25 percent (y/y) to 23.9 million tons in 2016, while revenue is estimated to rise 9 percent (y/y) to IDR 15 trillion (approx. USD $1.1 billion), and coal mining operational costs to fall by 3 percent (y/y) to USD $39.8 per ton.

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  • Indonesia's United Tractors Plagued by Weak Demand for Heavy Equipment

    Indonesia's United Tractors Plagued by Weak Demand for Heavy Equipment

    United Tractors, the largest distributor of heavy equipment in Indonesia, is still facing challenges due to persistently weak demand for heavy equipment amid low commodity prices. Business activity in the agribusiness, mining and infrastructure sectors have slowed This context is expected to lead to slowing net profit for the company in both 2015 and 2016. The company, a subsidiary of Astra International (Indonesia's largest diversified conglomerate), controls a market share of around 40 percent in Indonesia's heavy equipment market.

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  • Coal Production in Indonesia Down 15.4% to 263 Million Tons in January-August

    Coal Production in Indonesia Down 15.4% to 263 Million in January-August

    Coal production in Indonesia fell 15.4 percent to 263 million tons in the first eight months of 2015 (from 311 million tons in the same period last year) as Indonesian coal miners cut production due to low global coal demand. Last week it was reported that Indonesia’s reference thermal coal price hit another all-time low at USD $58.21 per metric ton (FOB), down 1.6 percent from the August reference rate, and the fifth consecutive month of decline. Meanwhile, Indonesia’s coal exports fell 18 percent to 211 million tons (y/y) in the January-August period.

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  • Rising Unemployment in Indonesia as Coal Miners Cease Production

    Rising Unemployment in Indonesia as Coal Miners Cease Production

    In the 2000s many Indonesian companies diversified their business to include coal mining (or shifting their core business to coal mining altogether) due to lucrative opportunities amid the 2000s commodities boom. However, since 2009 mining companies have had to face tough times. Especially since 2011 commodity prices have shown a declining trend and there remains little hope of a rebound on the short term as the sluggish global economic growth trend persists, particularly led by the economic slowdown in China.

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  • Coal Mining Industry Indonesia: Troubled Licenses & Falling Prices

    Coal Mining Industry Indonesia: Troubled Licenses & Falling Prices

    The government of Indonesia is eager to use current low coal prices as the context to push for consolidation in the country’s coal mining sector. Sudirman Said, Minister of Energy and Mineral Resources, announced that the government may revoke over 4,000 troubled mining licenses this month and install a better licensing system. Licenses that may be revoked are Mining Business Permits (IUPs), not the long-standing Coal Contracts of Work (PKP2B) that are held by companies such as Bumi Resources and Berau Coal Energy.

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  • Indonesia’s Reference Coal Price Hits All-Time Low in May 2015

    Indonesia’s Reference Coal Price Hits All-Time Low in May 2015

    On Monday (11/05), it was announced that the reference coal price of Indonesia declined 5.2 percent (month-on-month) to an all-time low of USD $61.08 per metric ton in May. This benchmark price, which is set by the government each month based on the average of four coal indexes (Indonesia Coal Index, Platts Index, New Castle Export Index and New Castle Global Coal Index), continued to plummet due to the coal oversupply in combination with weak global coal demand (particularly falling demand from China).

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  • Coal Mining Industry Indonesia: Higher Royalties for IUP-Holders

    Coal Mining Industry Indonesia: Higher Royalties for IUP-Holders

    The government of Indonesia plans to raise royalties for coal mining companies that hold a Mining Business Permit (Izin Usaha Pertambangan, abbreviated IUP) by revising Government Regulation No. 9 - 2012 on Tariff and Types of Non-Tax Revenue in a move to generate more state income. R. Sukhyar, Director General for Coal and Mineral Resources at the Indonesian Ministry of Energy and Mineral Resources, said that the domestic coal industry remains a vital source of state income, particularly amid diminished mineral exports.

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  • WUP, WPR and WPN Mining Areas in Indonesia

    WUP, WPR and WPN Mining Areas in Indonesia

    Mining Effort Area (Wilayah Usaha Pertambangan or 'WUP'), Community Mining Area (Wilayah Pertambangan Rakyat or 'WPR') and Country Reserves Area (Wilayah Pencadangan Negara or 'WPN') are determined based on the Mining Area (Wilayah Pertambangan). The WUP and WPN is determined by the Minister of Energy and Mineral Resources (Minister). The WPR is determined by the regent/major. The determination shall be based on mapping of the geological and rock formation carrier data and/or mapping of the geophysical and geochemical data and estimates of the resource reserves.

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