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18 Apr 2024, 08:28 AM

United Tractors Predicts Coal Prices to Hover Above USD 100

Antara Photo/Andri Saputra
United Tractors, a heavy equipment distributor, forecasts that coal prices this year will remain slightly above USD 100 (IDR 1.56 million), a decline from last year's USD 170 average due to slowing demand from China and India.Frans Kesuma, President Director of United Tractors, revealed that after experiencing high price volatility with an average Global Coal Newcastle Index (GCNI) price of USD 360 per ton in 2022, coal prices continued to decline and reached a new low in 2023.The GCNI coal price touched USD 122 per ton in November 2023, down 72 percent from the peak price of USD 434 per ton in September 2022, before experiencing an increase in December 2023 driven by rising natural gas prices due to tensions in the Middle East as a result of the Israel-Hamas conflict."The drop in coal prices is mainly due to a decrease in import demand from China and India, the two largest coal consumers in the world," explained Frans Kesuma in United Tractors' (UNTR) 2023 annual report.He said that China, still experiencing an economic slowdown, is trying to reduce imports and fulfill most of its coal needs from domestic mining production. The same situation also applies to India.The decrease in natural gas prices has also caused a decline in coal demand in Europe. Gas prices have gradually returned to normal since late 2022, prompting several European countries to reactivate gas-fired power plants to replace coal-fired power plants.Despite the continued decline, Frans mentioned that the average GCNI coal price in 2023 still stood at USD 173 per ton, higher than USD 142 in 2021.Based on the existing trends, analysts believe coal prices will reach a new equilibrium. The higher average GCNI coal price in 2023 compared to pre-pandemic levels suggests that a new price equilibrium will be formed above the psychological threshold of USD 100 per ton. During January-March, the average coal price ranged between USD 110 and USD 120 per ton."For coal mining businesses, this price level is still quite profitable as long as mine productivity and efficiency can be managed properly," said Frans.Frans also noted that coal prices strengthened starting from November 2023, nearing USD 130 per ton. If the Middle East conflict remains stable, prices are expected to dip in 2024 and 2025 but stay above pre-pandemic levels. This projection factors in slowed consumption growth in those years, with rising demand from China and India but declining demand in the US and Europe.Frans stressed that Turangga Resources, United Tractor's coal mining arm, will navigate market uncertainties by optimizing sales prices and quantities while staying prepared for further price declines.In 2023, Turangga Resources recorded coal sales of 11.8 million tons, including 2.5 million tons of coking coal, a 19 percent increase from 2022's 9.9 million tons.United Tractors' coal mining division reported a net income of IDR 30.5 trillion in 2023, down 2 percent from IDR 31.1 trillion in 2022.Indonesia targets coal production of 922.14 million tons this year, following a record-high output of 775 million tons in 2023, exceeding the target of 694.5 million tons. Coal exports totaled 518 million tons, with the rest allocated for domestic demand. However, export values dipped by 29.76 percent in January 2024 compared to the previous year, amounting to USD 2.41 billion.  Image source: Antara Photo/Andri SaputraSource: 
18 Apr 2024, 08:22 AM

Pefindo Affirms idA Bonds of Merdeka Battery (MBMA)

doc. PT Merdeka Battery Materials Tbk (MBMA)
PEFINDO assigned an idA rating to Bond I Year 2024 issued by PT Merdeka Battery Materials Tbk (MBMA) with a value of IDR 1.5 trillion. Simultaneously, PEFINDO affirmed the idA rating for MBMA. The outlook for the company's rating is stable. The rating reflects MBMA's vertically integrated operations, strong synergies with the group and strategic partners, and adequate mining reserves and resources. However, the ratings are limited by the risk of developing new projects and exposure to fluctuations in nickel prices. PEFINDO stated that the ratings could be upgraded if MBMA strengthens its business diversification, including adding downstream projects in the electric vehicle battery raw material value chain business.  The ratings could also be upgraded if MBMA successfully operates its new projects on time and generates higher revenue than projected by improving profitability indicators, which will positively impact its financial profile on a sustainable basis. However, PEFINDO also emphasized that the ratings could be downgraded if MBMA records lower revenue and profit margins than projected due to the non-achievement of performance targets from the new projects or a significant decline in nickel prices. The ratings could also be downgraded if MBMA adds substantial debt to finance new projects without being offset by higher revenues and EBITDA. MBMA is the parent company of several entities operating in the Indonesia Morowali Industrial Park (IMIP), including three Rotary Kiln Electric Furnace (RKEF) smelters, one nickel matte converter, and an Acid Iron Metal (AIM) project, as well as a nickel mine in Konawe. The company is also working on building High Pressure Acid Leaching (HPAL) plants at IMIP and Konawe. Data as of September 30, 2023, shows that MBMA's shareholders consist of PT Merdeka Energi Nusantara (50.03%), Huayong International (Hong Kong) Limited (7.55%), Winato Kartono (5.43%), and the rest is owned by the public (27.57%).Image source: doc. PT Merdeka Battery Materials Tbk (MBMA)Source: 
18 Apr 2024, 08:16 AM

Vale Indonesia's Divestment Set for Completion by July 2024

The Ministry of Energy and Mineral Resources (ESDM) is targeting the divestment process of 14% of PT Vale Indonesia Tbk (INCO) shares to finish in July 2024.Minister of Energy and Mineral Resources Arifin Tasrif said that before completing the divestment process, the government will finalize the extension of Vale Indonesia's Special Mining Business License (IUPK) first.According to him, there are several considerations related to the issuance of the IUPK, namely if it does not have one, it will be difficult to get approval from the Financial Services Authority (OJK) due to high uncertainty."(Both) parties (MIND ID and PT Vale Indonesia) agreed that the IUPK should be issued before the divestment of shares, the conditional sales and purchase agreement is binding, and there is anti-trust approval from several countries to see the government's seriousness in issuing the IUPK for PT Vale Indonesia," Mr Arifin said in a press release on Sunday (7/4).Arifin continued, that the draft IUPK license extension has been sent to the Minister of Investment/Head of the Investment Coordinating Board through letter number T-154/MB.04/MEM.S/2024 dated March 22, 2024, regarding Introduction to the Granting of IUPK as a Continuation of PT Vale Indonesia's Contract / Agreement Operations.Previously, the Ministry had conducted an evaluation related to the technical administrative aspects of the environment, finance, and company performance. Arifin added that as one of the approvals for the determination of the entire area development plan (PPSW) to apply for a contract extension to IUPK, PT Vale Indonesia is obliged to carry out investment commitments and their financing. "What has been agreed is the investment project for the Sorowako nickel mine and HPAL of USD 2 billion which will start-up in 2027, then investment in the nickel mine and HPAL in Pomalaa of USD 4.6 billion which will start-up at the end of 2026, and investment in the Bahodopi nickel mine and RKEF of USD 2.6 billion which will start-up in 2026," he added. The flow of the divestment process is expected to be completed in July 2024 with several milestones, namely on April 19, 2024, an extraordinary general meeting of shareholders (EGMS) will be held. Then, on June 5, 2024, there will be a rights issue confirmation by the OJK. June 21-27, 2024 is the rights issue period, and July 1, 2024, is the allotment of share distribution. Kontan noted that Vale Indonesia Management hopes that the IUPK document from the government can be issued soon. With this IUPK, certainty related to the company's future investment plans will be guaranteed. Vale Indonesia Senior Manager Communication Bayu Aji said that Vale has not received the IUPK document, but all the requirements have been fulfilled. Vale is still waiting for the IUPK document as it is still in the hands of the government."At the moment, we have not received the documents and it is hoped that it will be soon," said Bayu in Jakarta, some time ago. He explained that the IUPK will provide assurance and certainty of investment plans amid Vale Indonesia's efforts to develop three new nickel smelter projects with a total investment of USD 9 billion in South Sulawesi (Sorowako), Southeast Sulawesi (Polamaa), and Central Sulawesi (Bahodopi). Image source: KONTAN / doc. INCOSource: 
18 Apr 2024, 08:04 AM

MDKA Completed 165 Drilling Activities in Exploration Areas during Q1 2024

KONTAN / Akmalal Hamdhi
Several issuers have reported exploration results in the first three months of 2024. One of them is PT Merdeka Battery Materials Tbk (MBMA).The company currently has several asset portfolios. Namely, the Sulawesi Cahaya Mineral nickel mine (SCM mine), rotary kiln-electric furnace smelters (RKEF smelters), nickel matte converters, and acid iron metal projects.            MBMA also has several downstream development projects. These include a high-pressure acid leach (HPAL) processing facility and the Indonesia Konawe Industrial Park (IKIP), an industrial estate focused on battery raw materials.During the first quarter of this year, MBMA completed exploration at the SCM mine in Konawe, Southeast Sulawesi for IDR 24.2 billion (equivalent to USD 1.5 million). It consisted of life-of-mine resource determination drilling and related test work.The exploration work was carried out by PT Sulawesi Cahaya Mineral. The test methods are diamond drilling, geological mapping, sampling, and geophysical surveys.The selection of the test area to be explored is an area close to the current mining pit and following the future mining plan.The exploration result is that 165 drill holes have been completed with a total of 4,175 meters during the period.According to MDKA management, the diamond drilling (DD) program will continue using 15 drill rigs for resource/infill and exploration drilling. Geophysical surveys and geological mapping will continue to be conducted by MDKA. The aim is to determine the next exploration drilling target.Image source: KONTAN / Akmalal HamdhiSource: 
18 Apr 2024, 08:03 AM

Singaraja Putra Tbk (SINI) Partners with Petrosea (PTRO) to Tap IDR 30 Trillion Coal Mine Potential

doc. Petrosea
PT Singaraja Putra Tbk (SINI) has the potential to reap huge revenues from the coal mine that will be operated by one of its subsidiaries, PT Pasir Bara Prima (PBP). PBP has partnered with PT Petrosea Tbk (PTRO) as the mining service contractor to develop the coal mine.The cooperation between PBP and PTRO was agreed upon through the signing of the Mining Services Agreement Term Sheet between the two parties on March 27, 2024. The scope of work includes overburden excavation and coal stripping.Estimated overburden production reaches 240 million Bank Cubic Meters (BCM) and coal production of 26 million tons for nine years, from 2024 to December 31, 2032. In the disclosure of information released on the Indonesia Stock Exchange (IDX) on April 4, 2024, SINI's Corporate Secretary conveyed the estimated revenue that could potentially be achieved from the operation of the coal mine.The PBP operation is planned to produce coal with GAR 5,000 quality and has the potential to generate total revenue for nine years of USD 1.95 billion. Assuming the current market price of USD 75 per ton and the rupiah exchange rate against the US dollar of IDR 15,500, the value is equivalent to IDR 30 trillion.The forecast is also achieved with a projected production volume of 26 million tons for nine years (2024 - 2032). "Therefore, the company is very optimistic that it will get a large positive contribution to support the continuity of the company's business and the interests of all stakeholders," said SINI's disclosure.In coal mining activities, SINI and its subsidiaries claim to fulfill all important aspects such as technical, safety, environmental, social, and other aspects. "The existence of this partnership is an important milestone achievement. In carrying out coal mining operations, the company and its subsidiaries focus on selecting contractors who are professional and credible in their fields," said the Corporate Secretary of SINI.Previously, on Wednesday (3/4), Petrosea's management announced the signing of a term sheet for a mining services agreement with PT Pasir Bara Prima, a subsidiary of PT Singaraja Putra Tbk (SINI). This partnership is related to overburden stripping and coal production in the mine area located in Kapuas Tengah, Kapuas, Central Kalimantan with a value of approximately USD 511.45 million.The estimated overburden is 240 million BCM and coal production is 26.4 million tons for nine years until 2032. To illustrate, if converted at the current exchange rate of IDR 15,850 per US dollar, the contract value obtained by PTRO is equivalent to IDR 8.1 trillion.Meanwhile, the movement of SINI and PTRO shares increased before the stock exchange was on a long Eid holiday. On Friday (5/4), SINI's price soared 9.73% to IDR 620 per share. Meanwhile, PTRO rose 2.05% to IDR 4,480 per share.  Image source: doc. PetroseaSource: 
17 Apr 2024, 18:05 PM

Amman Mineral Invests IDR 101.26 Billion to Explore Three IUPK Mine Areas
The Panigoro family company PT Amman Mineral Internasional Tbk (AMMN) reported an exploration expenditure of USD 6.38 million or equivalent to IDR 101.26 billion during the first quarter of 2024 (jisdor exchange rate of IDR 15,873).  AMMN's management stated in the disclosure of information that during the first quarter, its subsidiary PT Amman Mineral Nusa Tenggara (AMNT) carried out exploration activities in IUPK Blocks I, II, and III located in Sumbawa."There are no exploration activities in Block IV, Lampui," said management, quoted on Friday (12/4/2024). During the first quarter, AMMN incurred total exploration costs of USD 6.38 million.  In more detail, the total cost was USD 3.18 million for Block I Batu Hijau with the results of 30 drill holes, including those that have been completed and those that are still in process with a total of 14,561.6 meters.Furthermore, USD 2.61 million was used for exploration activities in Elang Block II. The result was 11 holes of core drilling totaling 4,893 meters.  The third is Block III Rinti for USD 590,000 with exploration results of core drilling of 2 drill holes including those completed or ongoing, totaling 1,374 meters.On the other hand, Amman Mineral International President Director Alexander Ramlie said AMMN's production target is driven by high-grade fresh ore from phase 7 that will be mined and processed.  By 2024, AMMN expects to produce 833,000 dry metric tons of concentrate. "The concentrate is projected to contain 456 million pounds of copper and slightly more than 1 million ounces of gold," Alexander said on Wednesday (27/3/2024).In more detail, AMMN targets gold production of 1,009-kilo ounces of gold and copper production of 456 million pounds throughout 2024. Meanwhile, Adjusted C1 cost was recorded at USD 0.35 per pound.Image source: Bisnis.comSource: 
02 Apr 2024, 11:45 AM

RMKE Energy, Atlas Resources Collaborate in Coal Trading

Bisnis / Husnul Iga Puspita
PT RMK Energy (RMKE), through its subsidiary PT Royaltama Multi Komoditi Nusantara (RMKN), has established a collaboration with PT Atlas Resource (ARII), through its subsidiary PT Gorby Putra Utama (GPU), on coal trading with an operational cooperation (KSO) and offtake mechanism.RMKE Energy President Director Vincent Saputra said several strategies have been prepared to achieve this year’s targets, including collaboration with mining producers in South Sumatra to increase coal sales volume.Besides collaboration, RMKE is also optimizing in-house coal production and good cost control management amidst high rainfall challenges in the first quarter of this year.“The biggest challenge in the first quarter of this year is the very high rainfall, but we are still optimistic about increasing coal sales volume through collaboration with ARII and several potential mines in South Sumatra,” Vincent said on Monday, March 25, 2024.Vincent added that this collaboration would also improve the group's financial performance through collaboration with Rantai Mulia Kencana and RMKO. “We will continue such collaborations in the future by providing integrated logistics solutions to mining producers in South Sumatra,” he said.ARII is one of the coal producers in Indonesia, with concession land totaling more than 200,000 Ha. Exploration and coal production activities are coordinated through six hubs, one of which is the Mutara Hub. The management of the Mutara Hub is carried out by the company’s subsidiary, including GPU, which has 4,395 hectares of land.In this collaboration agreement, RMKE will conduct free-on-board (FOB) barge coal transactions produced from GPU’s coal mining concession area in Beringin Makmur 2 Village, Rawas Ilir District, North Musi Rawas Regency, South Sumatra. The traded coal amounts to 600,000 metric tons (MT) or 50,000 MT of coal per month, shipped through the Sriwijaya Bara Logistic Jetty, Pulai Gading Village, Bayung Lencir District, Musi Banyuasin Regency, South Sumatra.With this collaboration, RMKE and ARII can improve their operational performance with facilities built by RMKO through investments from Rantai Mulia Kencana. Through this collaboration, RMKE can increase its revenue from coal sales.  Image source: Bisnis / Husnul Iga PuspitaSource: 
02 Apr 2024, 11:37 AM

Tsingshan Unit Plans Indonesian Battery Plant As Trade Frictions Mount / Tsingshan Holding Group
The battery unit of Tsingshan Holding Group Co., the world’s top nickel producer, plans to build a plant in Indonesia, the latest in a series of Chinese investments that will help the Southeast Asian nation step up from commodities production to more lucrative processing and manufacturing.REPT BATTERO Energy Co.’s first overseas battery factory could be housed alongside Tsingshan’s existing operations in Weda Bay and may begin operating as soon as next year. The intention is to steal a march on rivals planning new capacity elsewhere and take advantage of its parent for raw materials and infrastructure. Locating in Indonesia could also head off concerns over trade frictions that threaten to disrupt exports from China.“Many battery manufacturers are building factories and ramping up in Europe and North America, but we expect their capacity will only operate from around 2026 or after,” Jason Hong, US general manager of REPT, said in an interview. “We want to get ahead of them with the factory in Indonesia.”China is one of Indonesia’s top investors, spending more than USD 7 billion there last year, with much of the cash deployed on building out processing facilities for the nation’s abundant reserves of raw materials. Jakarta has ambitions to develop as a hub for electric vehicles, a sector in which China leads in sales. Indonesia is the world’s biggest miner of nickel and No. 2 for cobalt, ingredients crucial to EV battery production.REPT began by selling batteries for energy storage systems but has since expanded to carmakers, including Stellantis NV, Li Auto Inc., and SAIC Motor Corp. It ranked as China’s No. 9 in terms of EV battery installations in the first two months of 2024, up from No. 11 last year, according to China Automotive Battery Innovation Alliance.New ListingThe company was listed in Hong Kong in December when EV sales growth slowed after a period of rapid expansion. REPT warned last month that its net loss in 2023 could be as much as 2 billion yuan (USD 277 million), or four times worse than the previous year, due to lower prices, delayed payments from customers, and the costs of expansion.China’s dominance in EVs and the processing of many critical minerals has drawn scrutiny from trade officials in the US and European Union. Hong said policy uncertainty is potentially an issue for the company, and putting a factory in Indonesia could help mitigate the threat. But no final agreements have been reached, and REPT could consider other Southeast Asian locations too, the company added.The US is keen to develop supply chains that don’t rely on China, while Jakarta is lobbying for closer trade ties with Washington to ensure its exports can benefit from the green subsidies available in the Biden administration’s Inflation Reduction Act. The two countries are also partners in a landmark climate finance pact.“Labor and power costs in Indonesia are similar to China,” said Hong. “Tsingshan has comprehensive infrastructure built, and its extensive experience in the country would help with budget estimates,” he said. “We also have a good relationship with the Indonesian government, which is supportive of new energy sectors.”Still, Indonesia isn’t without risks. For one, the nation’s power supply is heavily reliant on coal, the dirtiest fossil fuel, which could raise environmental concerns among buyers and investors. A deadly explosion at a Tsingshan nickel plant in January has also unnerved some of REPT’s customers.“We did have clients concerned about how we can prevent this from happening again,” Hong said. “They are attaching great importance to this matter.” Image source: / Tsingshan Holding GroupSource: 
02 Apr 2024, 11:32 AM

PT J Resources Leads the Change with 54% Carbon Emissions Reduction / PIKIRAN RAKYAT BMR
National mining company PT J Resources Asia Pacific (PSAB) has taken an important step in reducing carbon emissions by launching the first two units of electric trucks at the J Resources office, Bakan Site, Bolaang Mongondow Regency, North Sulawesi. These two electric trucks, with a carrying capacity of 70 tons, will officially operate at J Resources Site Bakan and only take 90 minutes to be fully charged at the electric charging station.The unveiling of the electric trucks is the result of a collaboration between PT J Resources Asia Pacific (PSAB) and mining contractor PT Samudera Mulia Abadi (SMA).JRBM President Director Anang Rizkani Noor stated that this partnership marks a historic step, making this the first and only electric truck launch in Indonesia.Noor also thanked the local government, especially the Bolaang Mongondow and South Bolaang Mongondow governments, for their continued support in facilitating the successful operations of J Resources in the area.With the launch of this first electric truck, PT J Resources Asia Pacific (PSAB) proves its commitment to adopting environmentally friendly solutions and moving towards a sustainable future in the mining industry.Previously, the company has switched from fuel oil (BBM) to electricity for the operations of two of its subsidiaries, namely the Bakan site (PT J Resources Bolaang Mongondow) and Doup site (PT Arafura Surya Alam).With the change in energy sources at the two sites and the use of electric trucks, PSAB managed to reduce carbon emissions by 54% per year compared to the use of fuel oil.The two carbon emission reduction measures are part of PSAB's achievements in Scope 1 and Scope 2 of the ESG (Environment, Social, and Governance) Protocol, whose annual achievement measurements the company began implementing this year. These two carbon emission reduction initiatives are the company's contribution to realizing net zero emissions in Indonesia by 2060.The initiative to change energy sources at two sites and use two electric trucks can reduce carbon emissions by 54% per year compared to carrying out these activities using fuel energy sources.In doing so, PSAB has set a new standard in the mining industry and is leading the transformation to a sustainable and environmentally friendly future. Image source: / PIKIRAN RAKYAT BMRSource: 


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