Category: Commodities

Why BUMI/Arutmin’s gross profit margin was only one-third of Adaro?

Dear President Joko Widodo and Finance minister Sri Mulyani Indrawati. We know that you’re probably overwhelmed with efforts to handle Covid-19 pandemic. We know that some coal miners, including Bumi Resources (BUMI) and Adaro Energy (ADRO) have also ‘contributed’ some money/medical supplies. Still, we use this opportunity to remind your staffs at the tax office, who can still examine compliance of companies from home, to take a deeper look into financial statements of the companies.

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COVID-19 Affects RUU Minerba

The coronavirus disease (COVID-19) continues to spread in Indonesia. So much so that it has paralyzed many sectors. The Oil and Gas sector has also been affected, with investments planned for the upstream side delayed. Also...

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Coal Journal

The global coal market rose 0.9% to US$69.68 per ton on Thursday (March 26) but fell 21.97% on a yearly basis, still under pressure from the effects of the novel coronavirus epidemic, which has clouded the outlook for coal demand. Prices are expected to remain vulnerable as more and more countries try to move to more environmentally friendly energy.

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Revisiting energy stocks

Brent crude oil recovered only 0.55% to US$32,8 per barrel in Asian trading this morning, while WTI inched up 0,65% to US$31.2 per barrel. Coronavirus pandemic, which hurts worldwide demand, and conflict between Russia and OPEC...

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Oil War starts

Oil futures fell as much as 30% Monday morning in Asian trading following Saudi Arabia’s decision to boost crude output and cutting prices by US$6 to US$8 per barrel by April. The decision is made in response to the collapse of OPEC deal with Russia to cut production amidst falling demand due to the Coronavirus outbreak. So, the outbreak has basically triggered the oil war.

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Revisiting Bukit Asam

State coal miner Bukit Asam (PTBA) booked net profit of Rp4.06 trillion last year, dropped 19.27% from 2018 due to squeezed margins. Sales revenues actually inched up to Rp21.8 trillion, but operating profit declined by 19.4% to Rp5.01 trillion.

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No More Royalties?

Large coal producers, such as PT Adaro Energy, PT Bumi Resources, and PT Bayan Resources can breathe easier because the Omnibus Law for Job Creation would free them from royalty. Though the new rule would also apply to other mineral mining companies, the royalties imposed on coal mining companies are quite high––that’s 13.5 percent for PKP2B holders and 7 percent for IUP holders. 

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Mining & Energy Projects Update

Most metals, including nickel, are now under pressure from the Coronavirus outbreak. Indonesia, however, will continue to become a more significant player in the nickel-to-stainless steel and EV battery. Some new capacities will enter commercial operation this year, especially those in Halmahera, North Maluku province.

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Producers Respond to Mandatory National Vessel for Coal Export

The Ministry of Trade requires all export of coal to use Indonesian vessels. The new rule came with a revision of Minister of Trade Regulation (Permendag) No. 82 Year 2017 on the Use of Sea Transportation and National Insurance for Export and Import of Certain Goods. The regulation was a part of the Economic Policy XV meant to strengthen the competitive edge of Indonesia’s logistics services. The 2017 regulation has been amended twice with Permendag No. 48 Year 2018 and Permendag No. 80 Year 2018. The last amendment noted the implementation of national insurance beginning on Feb 1, 2019, with the mandatory use of national vessel coming to force on May 1, 2020. 

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Omnibus Law: Plantation

Draft of Omnibus Law on Job Creation is designed to amend or abolish some articles in the Law No. 39/2014 about plantation, creating friendlier environment for the business community. It addresses land title, plantation schedule, launching of new varieties of plants, foreign ownership, and plasma plantation scheme.

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