Category: Commodities

Revisiting Timah

Shares of PT Timah Tbk (TINS), the world’s second largest tin producer, surged by 5.37% to Rp1,080 Tuesday (July 16) to make a market capitalization of Rp8.04 trillion. That means Timah is among the best performing stocks with 43% gain year-to-date even though tin was traded at US$17,900 per ton, way below its peak inn the past 12 months.

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Corporate Actions to Watch: Mineral Processing

Looks like that State miner Aneka Tambang (ANTM) is moving closer to commercial operation of its new ferronickel smelter in Halmahera Timur (otherwise known FeNi Haltim project), North Maluku province. After power supply, the company has just launched public tender for the provision of calcium carbide supply.

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Masela Block: Why it matters…

Minister of energy and mineral resources Ignasius Jonan has signed revision of plan of development (PoD) for the giant Masela gas project after series of consultation with the Corruption Eradication Commission (KPK). With the signing of the revised PoD, Inpex and Shell are now expected to make final investment decision (FID) for the US$20 billion project within 12 months, so that construction can be started next year for commercial operation in 2027.

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Those Leaving Palm Oil Business

PT Provident Agro Tbk (PALM), a plantation joint venture between Saratoga (SRTG) and Provident Capital, divested further its assets. This time, the company sold shares in PT Inti Global Laksana (IGL) and PT Banyan Tumbuh Lestari (BTL), which develop plantations in North Sulawesi, to PT Buana Pratama Cipta for Rp227.7 billion. 

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Who Acquires Noble Group’s Plantation Assets?

In late May 2019, the troubled global commodities trader Noble Group announced that it had signed definitive agreements for the sale of plantation assets in Indonesia. The group said it would receive an aggregate consideration of US$67 million, consisted of US$38 million from selling PT Henrison Inti Persada (completed in late May) and US$29 million from PT Pusaka Agro Lestari.

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Indonesia, The Nickel Country

Nickel Mines Ltd is among the best performing stocks on the Australia Stock Exchange (ASX). Since early January, the stock has gained 100% to A$0.44 last Friday to make a market capitalization of A$610.13 million. This followed completion of four rotary kiln eletric furnaces (RKEF) to process nickel ores into nickel pig iron in Morowali Regency, Central Sulawesi province, Indonesia.

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Improved Earnings of Pertamina

State oil and gas firm PT Pertamina claimed its earnings improved in the first quarter (Q1) of this year, supported by higher oil prices and stronger rupiah against the US dollar. Finance Director Pahala N Mansury said Pertamina booked an unaudited net profit of US$677 million for the said period, better than Q1 of last year.

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The IDD Falling Behind Target?

The Indonesian Deepwater Development (IDD) project may experience another set back.  Chevron Pacific Indonesia as the operator of the IDD project has not submitted a revised Plant Of Development (POD) to the Special Task Force for Upstream Oil and Gas Business Activities  (SKK Migas). It appears that the visit of the Ministry of Energy and Mineral Resources (ESDM) to the headquarters of Chevron in Houston on May did not help expedite the POD revision process. 

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Steel Update

World crude steel production for the 64 countries reporting to the World Steel Association (Worldsteel) was 162.7 million tons (Mt) in May 2019, a 5.4% increase compared to May 2018. China’s crude steel production for May 2019 was 89.1 Mt, an increase of 10.0% compared to May 2018. India produced 9.2 Mt of crude steel in May 2019, up 5.1% in May 2018. 

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More Aggressive Investment in City Gas

Subject to approval from the House of Representatives (DPR), the ministry of energy & mineral resources’ budget for 2020 could be doubled to Rp9.67 trillion. Most of the increase is attributable to a more aggressive approach in the development of city gas infrastructure, which could save the State budget from a ballooning subsidy for liquefied petroleum gas (LPG). 

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Coal Journal

The Indonesian government has set its coal benchmark price for June at US$81.48 per ton, sliced 0.46% from May at US$81.86 a ton, marking a tenth straight monthly drop for the benchmark price and the lowest price since July 2017. The Indonesian benchmark price has been under pressure in recent months due to import restrictions in markets like China and India, although the decline rate in June slowed from the previous month’ rate.

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Bakrie vs Medco in Oil & Gas

PT Energi Mega Persada Tbk (ENRG), a company controlled by Bakrie Family, currently has market capitalization of Rp610 billion only. Medco Energi (MEDC), controlled by Panigoro Family, is valued Rp13.7 trillion. The two, of course, can’t be compared in the context of market capitalization, because MEDC has non oil and gas businesses, including its shares in copper & gold miner PT Amman Mineral Nusa Tenggara (previously Newmont Nusa Tenggara, wherein Bakrie Family used to be the second largest shareholder). ENRG, meanwhile, is focused on oil and gas business. 

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