Category: Commodities

State Capitalism: Coal

We’ve seen strong State capitalism in oil & gas where most expired blocks have been granted to or taken over by Pertamina in the past few years. Acquisition of Freeport Indonesia, one of the world’s largest gold and copper producers, by INALUM is also seen in this context. INALUM has also been strengthened with the government’s decision to give some nickel blocks previously controlled by Vale Indonesia to its subsidiary Aneka Tambang. 

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Coal Journal

Thermal coal rose 1.92 to US$99.20 per ton on Wednesday (Jan. 16) but declined 6.12% yearly. Natural gas fell 2.94% yesterday, but rose 5.43% annually, helping thermal coal prices. The global supply-demand concerns remain a concern.

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Sinarmas-Stanmore Update

Shares of Stanmore Coal Limited (SMR) opened significantly lower by 2.51% to A$0.97 in Sydney this morning on broad market sentiment and third supplementary bidder’s statement from Golden Investments (Australia) Pte Ltd, an entity controlled indirectly by Sinarmas Group, for the acquisition of SMR. 

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Placing Hope on the Cepu Block

The declining national oil and gas production rate is a huge concern. As of 2018, the daily national production average is 775,000 barrels of oil per day (BOPD). It doesn’t help the situation that the production of the Mahakam Block and the Rokan Block had gone down ever since their management rights were transferred to PT Pertamina. Fortunately, the Cepu Block, which is being managed by ExxonMobil, has seen an increase in production.

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Recovery of Plantation Sector?

Natural rubber gained 3% to 186.9 yen per Kg yesterday, the highest level since February 2018. Palm oil was last settled at RM2,109 per ton, still way below last year, but has improved substantially in the past few weeks. Recovery of natural rubber and palm oil is politically important, especially for incumbent candidate in April election.

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Targeting Newcrest’s Gosowong Gold Mine (5)

Gold advanced 0.61% to US$1,293 per ounce this morning, the highest level since June 2018, but still way below average price in the first half of 2018. Shares of Newcrest Mining Ltd, controlling shareholder of Gosowong gold mine in Halmahera Island, North Maluku province, have gained 10% since late last month.

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Coal Journal

Thermal coal slipped further by 0.66% to US$98.35 per ton Monday (Jan 7) on global supply-demand concerns. The commodity declined 3.32% month-on-month and 6.6% year-on-year. Falling price of natural gas, which tumbled 34.71% month-on-month, might have contributed to correction in coal prices.

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Medco & Ophir Energy Acquisition

Shares of Medco Energy (MEDC) gained only slightly by 0.73% this morning on reports about possible acquisition of London-listed Ophir Energy Plc. On Monday, shares of Ophir Energy jumped 7.53% on London Stock Exchange (LSE) to make a market capitalization of 252.5 million pound sterling. 

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More Investment Stories: Oil & Gas

The government has on Thursday (Dec 27) declared winners of three exploration blocks in oil and gas with investment commitments of US$10.95 million. The State gets US$6 million of signature bonus from the blocks, which use the gross split scheme. The much-anticipated investment, of course, is the Corridor producing block in Sumatra, where three giants are competing.

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Freeport Deal is Done, Next?

Indonesian entities have officially controlled 51% shares of PT Freeport Indonesia, one of the world’s largest copper and gold producers. Payments have been made by INALUM, state-owned mining giant, to Freeport McMoRan and Rio Tinto Plc for their respective shares. President Joko ‘Jokowi’ Widodo, meanwhile, can enter next year’s election with something to tell. 

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The Campaign Trails

A recent survey from LSI Denny JA pointed to declining electability of Prabowo-Sandiaga to 30.6%, while Jokowi-Ma’ruf Amin gained slightly to 54.2%, despite mass rally early this month to commemorating the same rally two years ago against Jokowi’s ally Basuki Tjahaja Purnama (Ahok). “Jokowi is not Ahok…The implication is different,” claimed LSI Denny JA, which conducted the survey on 5-12 December.

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