Below is a list with tagged columns and company profiles.
Today's Headlines Mining
On 6 July 2023 Indonesia Investments released the June 2023 edition of its monthly report. In the report we present a number of analyses of topics (all related to the economy, politics and social matters) that were relevant in Indonesia in the month of June 2023.
The Indonesian government plans to allow an earlier submission of a request for the extension of mining concessions. Stakeholders say that this would considerably strengthen the investment climate in Indonesia's mining sector, specifically the coal mining industry, on the back of improved legal certainty.
In the first three quarters of 2018, Indonesia's total national coal production reached 319.08 million tons, or nearly 63 percent of the government's full-year 2018 target (set at 506.9 million tons), according to the latest data from the Energy and Mineral Resources Ministry.
The Indonesian government took another major step forward in becoming the majority stakeholder (through state-owned mining holding company Indonesia Asahan Aluminium, or Inalum) of mining giant Freeport Indonesia that operates the lucrative Grasberg mine in Papua.
After the much publicized signing by the Indonesian government and US mining giant Freeport McMoRan of the Heads of Agreement regarding the sale of a stake in Freeport Indonesia (the operator of the lucrative Grasberg mine in Papua) on 12 July 2018, we have not heard much about the deal that is valued at USD $3.85 billion.
Although Astra International, one of Indonesia's biggest diversified conglomerates, has been affected by subdued car sales in Indonesia in recent years, the company remains comfortably within the top ten of biggest listed companies in terms of market capitalization on the Indonesia Stock Exchange.
Local banks in Indonesia remain hesitant to disburse loans to companies that are engaged in Indonesia's mining sector due to the high degree of bad debt in this sector. Hence, credit disbursement to the country's mining sector continues to shrink. On the one hand, it is positive that Indonesia's banking sector becomes less dependent on the volatile movement of mining commodity prices.
Coal demand remains high, particularly due to robust demand from China, the world's largest coal importer. This brings the projection for the full-year 2018 coal price to the range of USD $98.50 - $107.00 per metric ton. So far this year the coal price (ICE NewCastle Coal January 2018) surged around 4 percent, while in full-year 2017 the price had surged 57.09 percent.
The rising coal price is a great boost for the corporate earnings of coal mining companies as well as the share prices of those companies that are listed on the Indonesia Stock Exchange. Newcastle Coal Futures (January 2018 delivery) touched USD $97.10 per metric ton at the end of last week, up 26 percent so far this year. Meanwhile, prices of energy commodities are expected to rise further in the remainder of the year.
Production and sales of heavy equipment in Indonesia is recovering more markedly in 2017 on the back of rising activity in the country's mining and construction sectors. Between 2012 and 2015 sales of heavy equipment plunged sharply in Indonesia. In 2016 a modest recovery was seen. This year, the recovery of Indonesia's heavy equipment sector is progressing at a faster pace.
Latest Columns Mining
In the last 12 months, the international copper price showed a neutral movement (moving more or less sideways). This is particularly due to a number of issues in China, the world’s second largest economy, which impact negatively on the copper price movement. China has become such an important market for a variety of commodities, including copper (used in construction and electronics), that other countries can be considered almost irrelevant. Why do analysts have low expectations of the copper market for the remainder of 2014?
Indonesian Minister of Energy and Mineral Resources Jero Wacik regrets to see Newmont Nusa Tenggara, one of Indonesia largest copper miners, file for international arbitration due to Indonesia’s export ban stipulated by Law 4/2009 on Mineral and Coal Mining (Minerba). This new law includes the ban on exports of ore concentrates from Southeast Asia’s largest economy. Instead, Indonesian miners are required to process the minerals domestically first. The ban was implemented on 12 January 2014.
Newmont Nusa Tenggara (NNT), one of Indonesia’s largest copper miners, said on Thursday (05/06) that it sees no other option than to declare a force majeure at its Batu Hijau copper mine in Sumbawa (West Nusa Tenggara) due to the export tax dispute with the Indonesian government. President Director of NNT Martiono Hadianto also informed the Indonesian Ministry of Energy and Mineral Resources that 80 percent of the company’s workers will be put on leave with reduced salaries.
On the last trading day of the week, the benchmark stock index of Indonesia (known as the Jakarta Composite Index of IHSG) rose 0.06 percent to the level of 4,973.06 points. Trading volume was low as investors are still carefully monitoring political and economic developments in Indonesia. Earlier in the week, political uncertainty increased when the country's second-largest political party (Golkar) decided to join the coalition that supports the Prabowo Subianto and Hatta Rajasa pair in the July presidential election.
Investors' appetite for mining and plantation stocks managed to support the benchmark stock index of Indonesia (known as the Jakarta Composite Index or IHSG) on Thursday's trading day (22/05). After the recent decline of the IHSG, market participants continued to accumulate stocks that are considered cheap. Furthermore, indices on Wall Street on Wednesday were up and impacted positively on Asian indices on Thursday, thereby providing positive market sentiments for the IHSG.
The benchmark stock index of Indonesia - known as the Jakarta Composite Index or IHSG - rose 0.17 percent to 4,921.39 points on Tuesday (13/05), impacted by investors' reaction to positive earnings reports of Indonesian coal miners in the first quarter of 2014. Today, foreign investors recorded net buying of IDR 64 billion (USD $5.6 million) and accounted for 31 percent of trading activity. However, investors remain cautious ahead of the presidential election that is scheduled for 9 July 2014 and wait for more clarity about the (vice) presidential candidates that will compete.
Indonesia Investments presents a selection of corporate earnings reports (covering the first quarter of 2014) of Indonesian companies that are listed on the Indonesia Stock Exchange (IDX), categorized by sector: (1) agriculture and mining, (2) basic industry and chemicals, (3) miscellaneous industry, (4) consumer goods, (5) property and real estate, (6) infrastructure, utilities and transportation, (7) finance, and (8) trade, services and investment. The tables display both net profit (loss) and revenues, together with year-on-year (yoy) growth.
Indonesia Investments presents a selection of corporate earnings reports (covering full-year 2013) of Indonesian companies that are listed on the Indonesia Stock Exchange, categorized by sector: (1) agriculture & mining, (2) basic industry & chemicals, (3) miscellaneous industry, (4) consumer goods, (5) property and real estate, (6) infrastructure, utilities and transportation, (7) finance, and (8) trade, services and investment. The tables display both net profit (loss) and revenues, together with year-on-year (yoy) growth.
Freeport Indonesia stated that the company's production of copper concentrate plunged since the Indonesian government implemented the ban on exports of unprocessed minerals on 12 January 2014. Currently, Freeport only produces to supply Smelting Gresik, Indonesia's first copper smelter and refinery. As such, Freeport only operates at 45 percent of production capacity regarding copper concentrate. According to Freeport Indonesia's spokeswoman Daisy Primayanti, production of copper concentrate fell to 3,150 tons per day.
Coal is one of the most important commodities for Indonesia in terms of state revenue as it accounts for about 85 percent of the country's total mining revenue. Therefore, when global coal prices fell sharply from 2011 (amid a slowing global economy), Indonesia felt the impact. In a response to lower coal prices, Indonesian miners actually increased coal output thus placing more downward pressure on coal prices and profit margins. Although the coal industry will remain frail for some time to come, long-term prospects are still strong.
