Category: Commodities

Thermal coal fell by 12% on Monday to US$140 per ton to tracking further correction of natural gas and oil plus, higher output in some producing countries, and softened demand. Thermal coal, accordingly, has collapsed 65% year-on-year, pretty much in line with downfall of natural gas (-71%).

By law, the government should ban export of mineral ores (including copper concentrates and bauxite) by June 2023, next month. A public hearing between minister of energy & mineral resources Arifin Tasrif and Commission VII of the House of Representatives (DPR) on Wednesday (May 24), however, agreed on some adjustments.

Coal miners operating under the mining business permit (IUP) regime reported squeezed margins in the first quarter of 2023 due to implementation of President Joko ‘Jokowi’ Widodo’s new regulation about royalty since the fourth quarter of 2022. PT TBS Energy Tbk (TOBA), which is linked to powerful cabinet member Luhut Binsar Pandjaitan, has also been seriously affected.

Pretty much as predicted, coal miners operating in both IUP and IUPK regime have been forced to give more to the State. Those operating under the mining business permit (IUP) have finally paid more after decades of indecisiveness from the government. Financial reports of coal miners listed on the Indonesia Stock Exchange (IDX) suggested ‘successful’ implementation of Jokowi’s decree last year.

Shares of nickel player PT Trimegah Bangun Persada Tbk (NCKL), popular as Harita Nickel, ended substantially lower by 6.92% to Rp1,345 on Wednesday (Apr 26) as some realized gains from the recent IPO at Rp1,250. Some hope NCKL won’t end up like Lygend Resources, partner of Harita, which already lost 31% from its IPO late last year. 

If implemented, we’re getting closer to an export ban of bauxite ores. President Joko ‘Jokowi’ Widodo said earlier that export ban on bauxite will be implemented in June 2023. This will give the country a stronger position in the world of aluminum because it will likely lead to more investments in smelter grade alumina (SGA) and aluminium.

President Joko ‘Jokowi’ Widodo has on Thursday (Mar 30) inaugurated Kehati Sawerigading Wallacea botanical garden in Luwu Timur, South Sulawesi, which was established by PT Vale Indonesia (INCO) Tbk in post-mining area. Jokowi, a main proponent of domestic nickel processing into stainless steel and EV battery, pledged to order all nickel mining companies to copy Vale’s post-mining initiatives.

Thermal coal regained grounds to US$209 per ton early this week, but lost 11.5% year-on-year. We anticipate further correction of Indonesia’s export because thermal coal is the largest export commodity, contributing nearly US$55 billion, an increase of 67.5% from 2021. In January 2023, export of thermal coal already declined 8.2% from December 2022.

President Joko ‘Jokowi’ Widodo complained about lack of domestic production of compound fertilizer (NPK) while State budget for subsidizing natural gas continues to increase. He shouldn’t just stopped there. The president should immediately act to speed up the stalled major gas projects in the country.

Shares of coal miners are still experiencing a decline in price, inline with decline in coal price. During January 2023, coal price fell 32.75% to US$262 per ton even though it still represents 24.47% gain year on year. The end of coal bonanza?

Nickel moved closer to US$30,000 per ton on the London Metal Exchange (LME) on Monday (Jan 31) as the Philippines, the world’s second-largest supplier of nickel ore, plans to follow Indonesia, currently the world’s largest producer of processed nickel, not entirely banning export of nickel ores, but imposing levies.

Freeport McMoRan (FCX) has just released full year 2022 financials, including operational data at PT Freeport Indonesia (PTFI), one of the world’s largest producers of copper and gold. Based on operational data, PT Freeport Indonesia should have recorded sales revenue of US$9.25 billion, an increase of 13.7% from 2021, thanks mainly to higher sales volume.