Category: Commodities

Mining Saves The Day

The State is slated to collect more of non tax revenues from coal and minerals this year, helping the government in compensating difficulties in tax collections. As of early November, the State has collected Rp34.4 trillion of non tax revenues from coal and mineral, higher than full year target of Rp32.4 trillion.

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Rio Tinto-Freeport Agreement Complicates Settlement for Grasberg

Setttlement of disputes between the government of Indonesia and Freeport McMoRan on the future of PT Freeport Indonesia and Grasberg mine in Papua province has never been easy, even when both sides claim of moving closer to it. Other than domestic politics, competition between ‘power brokers’, and security threats in Papua, an agreement between Freeport and Rio Tinto signed more than two decades ago complicates the issue.

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Holding Co for State Miners Finally

After years of talk, President Joko ‘Jokowi’ Widodo has reportedly signed government regulation for the assignment of state-owned aluminium producer INALUM as holding company for three other state miners plus the government’s 9.36% shareholding in PT Freeport Indonesia, which operates Grasberg, one of the largest copper and gold mines in the world.

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Growing Nickel & Bauxite Output

Nickel has retreated from its recent peak, and yet to fully recover. Some nickel miners in Sulawesi Island, however, have resumed production to feed the growing domestic processing of the commodity and resumption of low-grade nickel ore export.

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Mining & The Economy in Fourth Quarter

Pretty much as predicted mining sector improved year-on-year in the third quarter with 1.76% growth, but for the first nine months of 2017 the sector grew only 1.15%. The sector’s contribution to Gross Domestic Product (GDP) growth was 0.14% only from 5.06% growth in the quarter. What to expect in the fourth quarter?

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Electric Vehicles & Nickel

Shares of Tesla Inc collapsed 7% Thursday as investors responded negatively the Company’s performance in third quarter ended Sept 30. In the quarter, Tesla booked net loss of US$671 million, expanded from US$401 million in the second quarter. The stock, however, rebounded 2% Friday to make a market value of US$51 billion.

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Pertamina’s Financials & Major Pending Projects

State oil and gas company Pertamina booked net profit of nearly US$2 billion in the first nine months of 2017, thanks to higher average price of oil and gas, which lifted its sales revenue to US$31.38 billion from US$26.62 billion in the corresponding period of 2016. The Company was forced to sacrifice nearly US$1 billion of net profit to cover losses from fuel price gap under the public service obligation (PSO) scheme.

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Mining Save The Day

Shares of mining companies advanced further this morning to respond third quarter results and relatively strong price of coal and metal in the fourth quarter. For the State, strong performance of mining companies means higher revenues in the form of royalty and corporate income tax. Revenues in the form of royalty and tax from Timah (TINS), for example, jumped 61.6% year-on-year to Rp551 billion in Jan-Sep 2017.

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Relaxation of Mineral Export Ban Lifts Antam

State miner Aneka Tambang (ANTM) started to gain from the government’s policy to allow export of low-grade nickel ore and washed bauxite. The Company reported 73.1% jump in sales revenue to Rp3.95 trillion in third quarter of 2017. Its operating profit surged by 703% to Rp464 billion in the quarter alone.

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Coal Save The Day

Bayan Resources (BYAN), one of the largest coal producers, booked net profit of US$94 million in third quarter of 2017, skyrocketed 578% from the same period last year. BYAN, accordingly, reported net profit of US$215.4 million in Jan-Sep 2017 against loss of US$8.7 million in the corresponding period last year. Payment of taxes and royalties also increased significantly.

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Felda-Sondakh’s Eagle High Yet to See the Light?

Like other plantation firms, Astra Agro Lestari (AALI) and Sampoerna Agro (SGRO) suffered falling profit margins in the third quarter due to correction in crude palm oil (CPO) prices. They, however, remained strong with net profit of Rp362 billion and Rp49 billion respectively in the quarter. Eagle High Plantation (BWPT), a JV between Malaysia’s Felda Group and Indonesia’s Rajawali Group (Peter Sondakh), unfortunately, yet to see the light.

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Salim Plantation: Squeezed Margins in Third Quarter

PT Salim Ivomas Plantation (SIMP) Tbk booked net profit of Rp406.2 billion in Jan-Sep 2017, an increase of 37.6% from the corresponding period last year, thanks to strong performance in the first half. In the third quarter, pretty much as predicted, SIMP suffered from 67% fall year-on-year in net profit due to correction of crude palm oil (CPO) prices.

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