Acquisition Opportunities & Challenges from New Mining Regulations
Freeport McMoRan’s willingness to change its contract of work (COW) into special mining business permit (IUPK) creates bigger acquisition opportunity in the coming years. Newmont and Sumitomo Corp have earlier divested their shares in Batu Hijau gold-copper mine to domestic business groups.
Market on New Mining Regulations (3)
Freeport McMoRan has reportedly agreed to convert its contract of work (COW) into special mining business permit (IUPK), which paves the way for the resumption of copper concentrate export, easing off some concerns about economic, social, and political impacts of new mining regulations. PT Amman Mineral Nusa Tenggara, second largest copper producer, will likely follow suit.
Market on New Mining Regulations (2)
Nickel stopped falling Friday after significant correction earlier on Thursday as some market participants downplayed full impact of low-grade nickel ore export from Indonesia. Copper, meanwhile, advanced slightly as both Freeport Indonesia and Amman Mineral Nusa Tenggara were weighing their options to convert contract of works into special mining business permit (IUPK).
ANTM Overbought, INCO Oversold?
Shares of Aneka Tambang (ANTM) and Vale Indonesia (INCO) were traded heavily Friday (Jan 13) to respond new mining regulations issued by the government. ANTM ended higher by 6.36% with 249 million shares exchanged hands, while INCO crashed 15.93% with almost 139 million shares traded. Have investors overtly positive toward ANTM and negative toward Vale/INCO?
Mining Stocks on New Regulations
Shares of Aneka Tambang (ANTM) gained 3.5% Friday morning as investors shared beliefs that this company will be benefited from new policy allowing export of low-grade nickel ores. Vale Indonesia (INCO), on the other hand, dropped 9.2%, as investors worried on negative impact of low-grade nickel export to nickel prices.
Coal Journal No. 02/2017: Output to Watch
United States of America started 2017 with recovery in coal production. US Energy Information Agency (EIA) estimated coal production of 13.8 million tons for the week ended January 7, 2017, an increase of 19.6% from the corresponding week last year.
New Mineral Regulations: On Freeport & Amman Mineral
Shares of Freeport McMoRan ended sharply lower by 3.8% in New York last night even when copper advanced 2.5% as market responded new regulations on minerals in Indonesia. Perception about supply side boosted copper because export of copper concentrates from Indonesia is affected.
New Regulation on Nickel & Bauxite: Implications?
Minister of energy and mineral resources Ignasius Jonan has issued Regulation No. 5/2017 allowing export of low-grade nickel (below 1.7% Ni) and bauxite ores. Nickel price fell 3% immediately on London Metal Exchange (LME) to respond the policy, which might benefit some in the short-term, but compromising mid and long-term prospect of domestic smelter investments.
Govt Regulation No. 1/2017 on Minerals
President Joko ‘Jokowi’ Widodo has finally signed Government Regulation No. 1/2017, which is the fourth amendment of Govt Reg No. 23/2014 about mineral and coal business operation. The new regulation basically extends export of minerals, including copper concentrates from Freeport and Newmont (now Amman Mineral) beyond January 11, 2017 with certain conditions.
Mother of All Problems: Interpretation of Law No. 4/2009 on Mineral & Coal
Article 93 of Law No. 4/2009 about Mineral and Coal clearly states that holder of mining business permit (IUP) and Special IUP (IUPK) is not allowed to transfer IUP and IUPK to others. We all know, however, thousands of IUP have been transferred to or acquired by others in the past eight years or so.