Nickel: Closer to US$14,000, Next?
Nickel advanced to US$13,700 per ton on the London Metal Exchange (LME) Friday (Jan 26), the highest level since May 2015, lifted by short-term supply issues, especially disruption of nickel ore from the Philippines due to bad weather. Shares of Vale Indonesia (INCO) also advanced 1% to make 100% gain since July 2017.
Grasberg Mine: Take It or Leave It, Too Big to Fail
Shares of Freeport McMoRan (FCX) ended lower by 1.41% to US$19.54 Friday (Jan 26) on the New York Stock Exchange (NYSE) to make market capitalization of US$28.3 billion. Gaining significantly since October 2017, Freeport is still smaller than five major companies listed on Indonesia Stock Exchange (IDX).
Coal: Pressures on Sebuku Group
Sebuku Group, consisted of mining licenses for coal and minerals, has been under pressures for many years due to opposition from local residents and environmental groups in Pulau Laut, Kotabaru, South Kalimantan province. Pressures intensified with the recent decision from South Kalimantan provincial administration to revoke three coal mining licenses.
BlackGold One Step Closer to Riau Power Project, But…
Shares of BlackGold Natural Resources Ltd, a company with coal mining operation in Indonesia, advanced 3% on Singapore Exchange (SGX) Wednesday (Jan 24) as it moved closer to building a coal-fired power plant in Riau province. At the last quoted price, BlackGold, controlled by Indonesian businessmen, had market cap of S$95 million.
Coal Journal
Thermal coal was traded above US$106 per ton Monday, supported by various factors, including China’s strong demand for seaborne coal due to difficulties confronted by domestic producers to grow output. China Shenhua Energy Co Ltd, one of the largest coal producers in the world, produced only 295.4 million tons of coal last year, inched up 1.9% from 2016, while gross power generation grew 11.4%.
Coal Journal
Thermal coal stays closer to US$106 per ton in international market, supported by, among others, weak output in China and United States. Energy and mineral resources Ignasius Jonan jokingly pointed to the relatively strong price behind willingness of mining companies to sign amendment of their respective coal contract of works (CCoWs). Adaro Indonesia and subsidiaries of Bayan Resources, as you know, have recently signed the amendments.
Mining Industry Updates
Tin is currently traded at US$20,275 per ton, down 4.14% year-on-year, but state miner PT Timah Tbk (TINS) expects to double its net profit this year to around Rp1 trillion. The Company has earlier set capital expenditures of Rp2.6 trillion this year, flat compared to last year, while output will likely be higher than last year.
China-Japan Competition in Indonesian Oil & Gas (2)
Competition between Japan and China in Indonesia’s oil and gas assets will continue to intensify. Japan, by far, has bigger share in two major LNG projects: Tangguh LNG and Abadi LNG (Masela Block). Japan, through Inpex, was owner of 50% interest in Offshore Mahakam Block, key gas supplier for Indonesia’s largest LNG producer Badak LNG.
China-Japan Competition in Indonesian Oil & Gas (1)
Compared to global players like BP, Chevron and ExxonMobil, PetroChina is a new player. Entering Indonesia 16 years ago, the Company, which now has market capitalization of US$223.4 billion, slightly below Chevron (US$244 billion), is still considered a small player in Indonesia.
Coal Journal
Shares of coal producers were mostly higher grounds in the region this morning on strong thermal coal price. Indonesian government, meanwhile, has set reference price of thermal coal for January 2018 at US$95.54 per ton (FOB, calories of 6322 Kcal/Kg, sulphur 0.8%, and moisture 8%), an increase of 10.8% year-on-year.