Persistent Volatility in Energy & Metals
Volatility remains in the energy and mining market. Shares of energy companies retreated worldwide Friday (Feb 19) to tracking crude oil, which fell 3.41% to US$29.72 per barrel on Nymex (WTI crude) after gaining significantly Thursday. Rally in crude oil was short-lived. Shares of coal producers also retreated despite reports about consistent production cut in the United States.
ChemOne’s Coal-to-Chemical in Kalimantan: Another JAC?
Media reported yesterday that Singapore-based ChemOne will be working with Indonesian counterparts in the development of US$1.7 billion methanol plant in East Kalimantan, using coal as feedstock. This is not the first time we read such news. In fact, lots of companies have announced initiatives to develop coal-to-chemical projects in the country, but none has materialized.
Further Pressures on IUP Holders of Coal
Indonesia is determined to further rationalise its coal production. Other than external pressures from falling prices of thermal coal, ongoing pressures from the government will likely kick out more producers from the market.
Revisiting Medco-Newmont Acquisition
It’s been nearly three months since Arifin Panigoro, significant shareholder of Medco Energi (MEDC), announced a plan to acquire 76% shares in PT Newmont Nusa Tenggara (NNT) for US$2.2 billion. Newmont Mining Ltd yet to release anything about the proposed acquisition. Gold prices, however, have gained more than 15% since then.
Sumitomo-Freeport Deal
Sumitomo Metal Mining Co Ltd has entered into an agreement with Freeport McMoRan for the acquisition of 13% shares in Morenci copper mine for US$1 billion cash. Following the acquisition, Sumitomo Metal Mining’s ownership grows to 28% in the mine, which generated US$2.2 billion of revenues for FCX last year.
Relaxation of Mineral Ore Export: Self-Destructing
Indonesian Mineral Business Association (Apemindo) has urged the government to relaxing mineral ore export ban, blaming the policy was behind slow progress of investments in smelters. As metals hit their new lows in 13 years, however, relaxing the policy might only make things worse and sacrificing long term benefits.
Oriental Holdings & Mr Karli Boenjamin
Unlike crude oil, palm oil continues its rally. The benchmark April contracts of crude palm oil (CPO) advanced RM30 to RM2626 per ton Friday (Feb 12), while May contracts jumped RM36 to RM2626, highest level in more than seven months. Interestingly, Malaysian planters continue to accummulating assets in Indonesia. Other than Kulim Berhad, Oriental Holdings Berhad has recently acquired plantation asset in Sumatera.
M&A in Plantation: Kulim (Again) & Boy Thohir et al
Malaysian company Kulim Berhad continues its spending spree. This time, the Company acquires four plantation companies in Indonesia for a cash consideration of Rp1.64 trillion. This is, by far, the largest acquisition in plantation sector this year as palm oil hovers below US$700 per ton (CIF Rotterdam).
M&A in Oil & Gas: Mandala Energy
Mandala Energy Limited, a Southeast Asia focused oil and gas exploration and production company backed by global investment company KKR, has decided to acquire two more oil and gas assets in Indonesia.
M&A in Oil & Gas: Kulim Deal
WTI crude oil regained grounds to US$28.52 per barrel Wednesday (Feb 10), but it is low enough to force downward revision of acquisition consideration of Indonesian oil and gas asset by Malaysian company Kulim Sdn Bhd.