Palm Oil Journal
Malaysian company Genting Plantations Berhad has completed acquisition of two plantation companies in Indonesia for a total cash consideration of US$42.15 million. SGX-listed Bumitama Agri Limited, meanwhile, has acquired additional land bank in Indonesia from one of its shareholders.
Coal Journal
Shares of coal producers were mostly in green zone Monday (Sept 19) as some investors continued to speculate on new supply-demand balance in the seaborne coal market. China Shenhua gained 1.7% in Hong Kong, while Adaro Energy (ADRO) recovered 2.58% in Jakarta. Weak price of crude oil, however, weighs further rally in the commodity.
Nickel Industry Update
State-owned mining company Aneka Tambang (ANTM) has finally appointed Kawasaki Heavy Industries and Wijaya Karya (WIKA) as contractors for the development of ferronickel (FeNi) smelter in Halmahera Island, North Maluku province. The Rp3.42 trillion worth of contract covers the development of phase I line I of the multibillion dollar project.
In GOLD They Trust
Gold is currently traded above US$1300 per ounce, representing 15% increase from average realized price in the third quarter of 2015. Some gold mines in Indonesia with all-in-sustaining costs (AISCs) below US$700 per ounce should gain more. Others, however, are struggling.
Relaxation of Mineral Ore Export: Self-Destructing (3)
Poor policy design lead to poor policy actions! That’s what exactly happened in the mineral sector since the deliberation of Law No. 04/2009 about mineral and coal. During SBY-Boediono years, policies on divestment of shares in mining business permit (IUP), for example, were changed several times. Government also fine-tuned mineral ore export policy several times.
Commodities & The Economy
Pretty much as predicted, Asian equities opened higher this morning to follow Wall Street, which ended significantly higher Monday. The Fed’s outlook on interest rate contributed to correction of USD, which might support commodities.
Fighting Gas Brokers: Walk the Talk
Luhut Binsar Pandjaitan, the interim energy and mineral resources minister, admitted that existence of brokers in domestic gas distribution contributed to significantly higher price paid by consumers, including industrial customers like steel, ceramic, tire, and other manufacturers. The previous minister Sudirman Said had once announced a plan to end such practice. The problem, the whole system seems not serious enough to act.
Rights Issue of J Resources
PT J Resources Asia Pacific (PSAB) Tbk plans to issue 2.64 billion new shares, representing 10% of its enlarged shares capital, through non-preemptive rights issue scheme. The gold producing company, controlled by the family of Johan Lensa, expects up to Rp954 billion from the action, which will significantly strengthen the balance sheet.
Commodities & The Economy
Weak price of most commodities weighed Indonesian economy from higher growth in the second quarter. Volatility remains out there, but most of them improved significantly since July, lifting hopes for economic recovery in producing areas in Sumatra, Sulawesi, and Kalimantan. Reentry of Indonesia in the aluminium and nickel chains might also help both export and State revenue side in the third quarter.
Coal: Further Rally?
The government has set coal reference price (HBA) for September 2016 at US$63.93 per ton, an increase of 9.83% from the same month last year and 9.5% above August 2016.This is also the highest price since May 2015. How further up the commodity will be?