TABLE OF CONTENTS No. Title Media Source Page

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IMA-Daily Update Page 1

Bambang said this year the coal commodity was targeted to produce 530 million tons, assuming the price of coal at US$ 90 per ton on the assumption of an exchange rate of Rp 14,400. Thus, this year's coal PNBP target of Rp 44.3 trillion, this target was set in the Indonesian Parliamentary Budget Agency.

"Then we got the target from Banggar with an assumption of 530 million tons in 2020. For coal, the HBA assumption was US$ 90 per ton with an assumed exchange rate of Rp. 14,400. So at that time we set a PNBP of Rp.44.3 trillion," said Bambang.

Anjlok, Harga Batu Bara

'Hantui' Penerimaan Negara

HARGA batu bara terus melemah. Hal ini

pun berpengaruh pada penerimaan negara bukan pajak (PNBP) batu bara pada tahun 2019.

Dirjen Minerba Kementerian ESDM Bambang Gatot menyebutkan pada tahun 2019 harga batu bara trennya menurun. Meski memenuhi target pada APBN, PNBP batu bara di tahun 2019 menurun jumlah-nya dari tahun 2018.

"2018 ke 2019 memang harga turun, tadinya US$ 90 per ton. Di 2019 itu sampe US$ 60-70 per ton," kata Bambang di ruang komisi VII DPR Jakarta, Selasa (11/2/ 2020).

Dari data Kementerian ESDM target PNBP batu bara ditarget Rp 32,1 triliun, dengan realisasi hingga 154,62% sebesar Rp 49,63 triliun pada 2018. Jumlah realisasinya turun pada 2019 sebesar Rp 44,93 triliun, dengan capaian target sebesar 103,86% dari Rp 43,27 triliun.

Bambang mengatakan tahun ini komoditas batu bara ditarget bisa memproduksi 530 juta ton, dengan asumsi harga batu bara US$ 90 per ton pada asumsi kurs Rp 14.400. Sehingga, target PNBP batu bara tahun ini sebesar Rp 44,3 triliun, target ini ditetapkan di Badan Anggaran DPR RI.

"Lalu kami dapatkan target dari Banggar dengan asumsi produksi 530 juta ton pada 2020. Untuk batu bara asumsi HBA US$ 90 per ton dengan asumsi kurs Rp 14.400. Sehingga waktu itu kita dipatok PNBP Rp 44,3 triliun," papar Bambang.

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IMA-Daily Update Page 4 He said the problem of low coal prices still

overshadows the PNBP target. Bambang hopes that coal prices can reach US$ 70 per ton.

"Now the problem is we are facing an obstacle at the moment the price of coal is very low. At present US$ 63.32 per ton, lastly US$ 66 per ton. We hope to increase up to US$ 70 per ton in 2020," said Bambang. (eds/eds)

Dia mengatakan masalah harga batu bara yang rendah masih membayangi target PNBP. Bambang berharap harga batu bara bisa mencapai US$ 70 per ton.

"Nah masalahnya kami hadapi kendala saat ini harga batu bara sangat turun. Saat ini US$ 63,32 per ton, terakhir US$ 66 per ton. Kami harap bisa naik sampai US$ 70 per ton di 2020," kata Bambang. (eds/eds)

Amman Mineral Nusa Tenggara

copper concentrate sales are not

disrupted by corona outbreaks

Reporter: Ridwan Nanda Mulyana | Editor:

Yoyok

P

T AMM AN Mine ra l Nusa Ten ggara (AMNT) claimed not to be disturbed by the shock of business and the global economy due to the corona virus outbreaks based in China.

AMNT Head of Corporate Communication Kartika Oktaviana said, sales of AMNT copper concentrate were not interrupted because the Medco Energy Group subsidiary currently does not have a permanent contract with customers based in China.

Kartika said, so far the contracts with Chinese customers took place with minimal portions and fluctuating volumes. "We do not have a customer base in China. The dominant Amman Mineral Market is Japan, South Korea, the Philippines and Indonesian domestic. If it is relevant to Corona, it can be said that the company is not worried," Kartika told Kontan.co.id, Tuesday (11/2).

Penjualan konsentrat tembaga

Amman Mineral Nusa Tenggara

tidak terganggu wabah corona

Yoyok

PT AMMAN Minera l Nusa Ten gga ra

(AMNT) mengaku tidak terganggu gon-cangan bisnis dan perekonomian global akibat wabah virus corona yang berpusat di China.

Head of Corporate Communication AMNT

Kartika Oktaviana mengatakan, penjualan konsentrat tembaga AMNT tidak terganggu lantaran anak usaha Medco Energy Group tersebut saat ini tidak memiliki kontrak tetap dengan pelanggan yang berbasis di China.

Kartika bilang, selama ini kontrak dengan pelanggan China berlangsung dengan porsi yang minim dan volume yang berfluktuasi. "Kita tidak memiliki customer base di China. Market Amman Mineral yang dominan adalah ke Jepang, Korea Selatan, Filipina, dan domestik Indonesia. Kalau relevansinya dengan Corona, bisa dikata-kan bahwa perusahaan tidak khawatir," kata Kartika kepada Kontan.co.id, Selasa (11/2).

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IMA-Daily Update Page 5 Kartika, AMNT has no plans to send copper

concentrates to the Bamboo Curtain country. "From now on, until the next few months, there are no plans to ship to China," he said.

AMNT itself has enlarged uptake into the domestic market. Last year, supply to the domestic market, namely to PT Smelting Gresik, held a dominant portion, which was around 60% of the production of AMNT copper concentrate. "The rest is new to the countries mentioned earlier," Kartika added.

In a previous Kontan.co.id report, AMNT experienced a decline in copper concentrate production during 2019. The realization of AMNT production fell by around 7% compared to 2018.

Unfortunately, Kartika is still reluctant to provide detailed figures regarding the operational achievements achieved by AMNT. Kartika claims, the reduction in concentrate production is only temporary. According to him, this is a natural consequence of fluctuations in the mine cycle.

Because, Kartika revealed that AMNT still relies on production from the Batu Hijau Mine, and is now entering phase 7, the overburden removal stage.

"This decline is a natural consequence of fluctuations in the mine cycle and is temporary. Indeed, the Batu Hijau Mine is currently in phase 7 development, so that later it can get ore with better quality," Kartika said.

Kartika, AMNT belum ada rencana untuk melakukan pengiriman konsentrat tembaga ke Negeri Tirai Bambu itu. "Sejak sekarang, sampai beberapa bulan ke depan, tidak ada rencana shipment ke China," ungkapnya.

AMNT sendiri telah memperbesar serapan ke pasar domestik. Pada tahun lalu, pasokan ke pasar dalam negeri, yakni ke PT Smelting Gresik memegang porsi dominan, yakni sekitar 60% dari hasil produksi konsentrat tembaga AMNT. "Selebihnya baru ke negara-negara yang disebutkan tadi," imbuh Kartika.

Dalam pemberitaan Kontan.co.id sebelum-nya, AMNT mengalami penurunan produksi konsentrat tembaga sepanjang tahun 2019. Realisasi produksi AMNT turun sekitar 7% dibandingkan tahun 2018. Sayangnya, Kartika masih enggan mem-berikan detail angka mengenai raihan operasional yang diraih AMNT. Kartika mengklaim, penurunan produksi konsen-trat ini hanya bersifat sementara. Menurut-nya, hal itu merupakan konsekuensi yang wajar dari fluktuasi siklus tambang.

Sebab, Kartika mengungkapkan bahwa AMNT masih mengandalkan produksi dari Tambang Batu Hijau, dan saat ini telah memasuki fase 7, yaitu tahap pengupasan batuan penutup.

"Penurunan ini konsekuensi wajar dari fluktuasi siklus tambang dan sifatnya sementara. Memang saat ini Tambang Batu Hijau berada pada pengembangan fase 7, sehingga nantinya bisa mendapatkan ore dengan kualitas lebih baik," kata Kartika.

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There is Dam Maintenance, Vale

Indonesia Production (INCO)

Down 5 Percent

Finna U. Ulfah

M

ETAL minin g compan y, P T Va le Indonesia Tbk., Recorded a 5 percent decline in nickel in matte products during 2019.

Reported by the company's disclosure of information on the Indonesian Stock Exchange (IDX), Vale's production volume in 2019 reached 71,025 tons, lower than the realization in 2018 of 74,806 tons. Although annual production fell, Vale recorded quarterly production increases of 3 percent to 20,404 tons in the fourth quarter of 2019. Vale's Senior Manager of Communication, Suparam Bayu Aji, said the company had predicted the decline in nickel in matte production. The decline in production, he continued, occurred because the company cared for mining infrastructure. One of the major treatments is the rejuvenation of the Lining Canal Canal Dam to ensure stable water supply to the hydropower plant. "So because of the reduced energy resources, production will definitely be lower," Bayu told Bisnis.com, Tuesday (02/11/2020).

According to Bayu, the realization of production will not be in line with sales because nickel prices throughout 2019 will move up. Based on Bloomberg data, in 2019 the price of nickel rose sharply 32.93 percent. Nickel prices even touched the level of US$ 18,885 per ton, the highest level since 2014.

Ada Perawatan Bendungan,

Produksi Vale Indonesia (INCO)

Turun 5 Persen

Finna U. Ulfah

EMITEN pertambangan logam, PT Vale

Indonesia Tbk., mencatat penurunan produk nikel dalam matte sebesar 5 persen sepanjang 2019.

Dilansir dari keterbukaan informasi perseroan di lBursa Efek Indonesia (BEI), volume produksi Vale pada 2019 mencapai 71.025 ton, lebih rendah dibandingkan realisasi pada 2018 sebanyak 74.806 ton. Kendati secara tahunan produksi turun, secara kuartalan Vale mencatat kenaikan produksi sebesar 3 persen menjadi 20.404 ton pada kuartal IV/2019.

Senior Manager Communication Vale, Suparam Bayu Aji mengatakan penurunan produksi nikel dalam matte sudah diprediksi oleh perseroan. Penurunan produksi, lanjutnya terjadi karena perseroan melakukan perawatan infra-struktur tambang. Salah satu perawatan yang cukup besar yaitu peremajaan Bendungan Larona Kanal Lining untuk memastikan pasokan air ke pembangkit listrik tenaga air (PLTA) stabil.

“Jadi karena sumber tenaganya berkurang, produksi pasti akan tercatat lebih rendah,” ujar Bayu kepada Bisnis.com, Selasa (11/2/2020).

Menurut Bayu, realisasi produksi tidak akan seturut dengan penjualan karena harga nikel sepanjang 2019 bergerak naik. Berdasarkan data Bloomberg, pada 2019 harga nikel menguat tajam 32,93 persen. Harga nikel bahkan sempat menyentuh level menyentuh level US$ 18.885 per ton, level tertinggi sejak 2014.

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IMA-Daily Update Page 7 In 2020, listed companies with INCO shares

target production growth which tends to be moderate and almost equal to the realization of production in 2019 in the range of 71,000 tons to 73,000 tons. INCO also has not been able to disclose the projected increase in revenue this year. Editor: Rivki Maulana

Pada 2020, emiten bersandi saham INCO menargetkan pertumbuhan produksi yang cenderung moderat dan hampir sama dengan realisasi produksi pada 2019 di kisaran 71.000 ton s.d 73.000 ton. INCO juga belum bisa membeberkan proyeksi kenaikan pendapatan pada tahun ini. Editor : Rivki Maulana

Monitor Prices, ESDM Ready to

Boost Indonesian Coal Production

Again

Anisatul Umah, CNBC Indonesia

THE MINISTRY of Energy and Mineral

Resources (ESDM) will revise coal production in the first semester of this year. ESDM Ministry's Mineral and Coal Director General Bambang Gatot Ariyono said if coal prices improved, revisions were made to increase coal production.

"We in the Corporate Work Plan and Budget (RKAP) set 550 million tons (production) although in the first semester it will be revised, if prices become good, this will be a revision to be able to increase coal production," he said in a hearing (RDP) in the House of Representatives Commission VII, Tuesday, (02/11/2020).

Bambang further explained based on the target of the 2020 PNBP Budget Agency (Banggar) with the assumption of a production of 530 million tons of Reference Coal Price (HBA) of US$ 90 per ton with an exchange rate of Rp 14,400. So that the Minerba revenue target for 2020 will be Rp 44.39 trillion.

Pantau Harga, ESDM Siap

Genjot Produksi Batu Bara RI

Lagi

Anisatul Umah, CNBC Indonesia

KEMENTERIAN Energi dan Sumber Daya

Mineral (ESDM) akan merevisi produksi batu bara pada semester satu tahun ini. Direktur Jenderal Mineral dan Batubara Kementerian ESDM Bambang Gatot Ariyono mengatakan apabila harga batu bara membaik, revisi dilakukan untuk meningkatkan produksi batu bara.

"Kita di Rencana Kerja dan Anggaran Perusahaan (RKAP) menetapkan 550 juta ton (produksi) walaupun di semester 1 akan direvisi, apabila harga jadi baik, ini akan jadi revisi untuk bisa meningkatkan produksi batu bara," ungkapnya dalam rapat dengar pendapat (RDP) di Komisi VII DPR RI, Selasa, (11/02/2020).

Lebih lanjut Bambang menerangkan ber-dasarkan target dari Badan Anggaran (Banggar) PNBP tahun 2020 dengan asumsi produksi 530 juta ton Harga Batubara Acuan (HBA) US$ 90 per ton dengan kurs Rp 14.400. Sehingga target penerimaan Minerba di tahun 2020 sebesar Rp 44,39 triliun.

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IMA-Daily Update Page 8 "Now the problem is we are facing

obstacles currently coal prices are very down, currently US$ 63.32 per ton, lastly US$ 66 per ton. Hopefully it can go up to US$ 70 per ton in 2020. But the deter-mination based on the RKAP still exceeds 530 million tons set by Banggar," he added.

Based on data from the Ministry of ESDM HBA February 2020 of US$ 66.89 per ton. Up from the January 2020 HBA of US$ 65.93 per ton.

The Head of the Ministry of ESDMs' Public Information and Cooperation Communi-cation Service, Agung Pribadi, said that based on global market conditions, the cause of the February 2020 HBA increase was influenced by the reduced supply of coal from mines in China.

After the Lunar New Year holiday and the spread of the corona virus and the decline in Australian coal production due to forest fires in Australia. "Meanwhile, coal demand has increased during the winter in China, Japan and South Korea," he said on Tuesday (02/02/2020). (gus)

"Nah masalahanya kami hadapi kendala saat ini harga batu bara sangat turun, saat ini US$ 63,32 per ton, terakhir US$ 66 per ton. Semoga bisa naik sampai US$ 70per ton di 2020. Tapi penetapan berdasarkan RKAP masih melebihi dari 530 juta ton yang ditetapkan Banggar," imbuhnya.

Berdasarkan data Kementerian ESDM HBA Februari 2020 sebesar US$ 66,89 per ton. Naik dari HBA Januari 2020 sebesar US$ 65,93 per ton.

Kepala Biro Komunikasi Layanan Infor-masi Publik dan Kerja Sama Kementerian ESDM, Agung Pribadi mengatakan ber-dasarkan kondisi pasar global, penyebab naiknya HBA bulan Februari 2020 dipengaruhi oleh berkurangnya pasokan batu bara dari tambang di China.

Setelah libur Tahun Baru Imlek dan adanya penyebaran virus corona serta penurunan produksi batu bara Australia karena adanya kebakaran hutan di Australia. "Sementara itu, permintaan batu bara meningkat selama musim dingin di China, Jepang, dan Korea Selatan," ungkapnya, Selasa, (4/02/2020). (gus)

Tin miner Timah to invest Rp 2 trillion this year for expansion

Norman Harsono | The Jakarta Post

STATE-owned tin miner PT Timah is slated to invest around Rp 2 trillion (US$145.6 million)

to finance expansion projects this year, including the construction of a tin smelting plant. Timah corporate secretary Abdullah Umar Baswedan said in Jakarta on Monday that the funds would be partly used to finance the exploration of new tin reserves on the tin-rich Bangka Belitung Island.

Investment would also go into developing an US$80 million smelter in the province, repairing old ships, growing company subsidiaries and continuing exploration efforts in Africa, he added. The publicly listed miner has yet to publish its annual report for the 2019 financial year but Abdullah estimated that production reached between 65,000 and 70,000 tons last year. This

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IMA-Daily Update Page 9 year, production is projected to increase 5 percent. But revenue during the year would rely much on global tin prices, which have begun to decline since January due to the coronavirus epidemic in China, the world’s largest tin consumer.

“We cannot control global prices. But we can control and maintain our export volume,” said Abdullah, adding that Indonesia contributed 23 percent of the global tin market, “If we exclude China, it’s more than 40 percent.”

Timah president director Mochtar Riza Pahlevi Tabrani, also on Monday, said the company was looking into exploring mineral reserves in Nigeria and Tanzania. The company was particularly close to beginning operations in the former, where it only needs “a sort of environmental impact assessment” to begin.

“The biggest challenge in Africa is limited infrastructure,” he said, “The second issue is security.”

RKAB has the potential to be

revised, the national coal

production has the opportunity to

increase beyond the target

Herlina Kartika

NATIONAL coal production in 2020 will

potentially skyrocket from the target again. This is because the Ministry of Energy and Mineral Resources (ESDM) has again opened up opportunities to increase coal production in the second half of this year. ESDM Ministry's Director General of Minerals and Coal Bambang Gatot Ariyono revealed that he had opened an option to revise the Work Plan and Budget (RKAB) for the first semester period. Thus, national coal production could increase from the current target of 550 million. tons.

Bambang said, in making these changes his party would first consider the coal price movement factor.

RKAB berpotensi direvisi,

produksi batubara nasional

berpeluang naik melebihi target

Reporter: Ridwan Nanda Mulyana | Editor: Herlina Kartika

PRODUKSI batubara nasional tahun 2020

berpotensi bakal kembali meroket dari target. Sebab, Kementerian Energi dan Sumber Daya Mineral (ESDM) kembali membuka peluang untuk meningkatkan produksi batubara pada paruh kedua tahun ini.

Direktur Jenderal Mineral dan Batubara (Minerba) Kementerian ESDM Bambang Gatot Ariyono mengungkapkan, pihaknya membuka opsi untuk merevisi Rencana Kerja dan Anggaran Biaya (RKAB) periode semester I. Dengan begitu, produksi batubara nasional bisa meningkat dari target saat ini yang berada di angka 550 juta ton.

Bambang menyebut, dalam melakukan per-ubahan tersebut pihaknya akan lebih dulu mempertimbangkan faktor pergerakan harga batubara.

"We at the RKAB now set 550 million tons. Although later in the first semester there is

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IMA-Daily Update Page 10 a possibility that revisions will be made if

the price is good, in order to increase production," Bambang said in a hearing with the House of Representatives Commission VII, Tuesday (11/2).

Bambang said, the current coal production target was already higher than the assumption set by the Indonesian Parliament Budget Agency (Banggar) of 530 million tons in setting the mineral and coal Non-Tax State Revenues (PNBP) by 2020. Nevertheless, coal prices have not shown a trend strengthening, which is now in the range of US$ 66 per ton.

Bambang hoped that coal prices could strengthen at US$ 71 per ton. "The final price is around US$ 66, hopefully it can go up to US$ 71. But production still exceeds the 530 million tons set by Banggar," Bambang explained.

In Kontan.co.id notes, coal prices reflected in the Reference Coal Price (HBA) are indeed weakening. The average HBA in 2018 is still US$ 98.96 per ton. Last year, the average HBA dropped to US$ 77.89 per ton. This year the HBA opened at US$ 65.93 per ton in January, and only edged up 1.45% to US$ 66.89 per ton in the February HBA. Kontan.co.id also noted, at least in the last two years, the realization of national coal production has always skyrocketed from the target. In 2018, for example, at that time the target in the RKAB was set at 485 million tons. But, the realization of production in that year rose to 557 million tons.

In 2019, the initial target in the RKAB is set at 489.12 million tons. However, the realization of production until the end of last year rose to 616 million tons.

"Kita di RKAB sekarang menetapkan 550 juta ton. Walaupun nanti semester I kemungkinan akan dilakukan revisi

apabila harga menjadi baik, untuk bisa meningkatkan produksi," kata Bambang dalam Rapat Dengar Pendapat bersama Komisi VII DPR RI, Selasa (11/2).

Bambang mengatakan, target produksi batubara saat ini memang sudah lebih tinggi dari asumsi yang ditetapkan oleh Badan Anggaran (Banggar) DPR RI sebesar 530 juta ton dalam penetapan target Penerimaan Negara Bukan Pajak (PNBP) minerba tahun 2020. Kendati begitu, harga batubara belum menunjukkan tren penguatan, yang sekarang masih berada di kisaran US$ 66 per ton.

Bambang berharap, harga batubara bisa menguat di angka US$ 71 per ton. "Harga terakhir sekitar US$ 66, semoga bisa naik sampai US$ 71. Namun produksi masih melebihi daripada 530 juta ton yang ditetapkan oleh Banggar," terang Bambang. Dalam catatan Kontan.co.id, harga batu-bara yang tercermin dalam Harga Batubatu-bara Acuan (HBA) memang melemah. Rerata HBA pada 2018 masih sebesar US$ 98,96 per ton. Tahun lalu, rerata HBA anjlok ke angka US$ 77,89 per ton.

Tahun ini HBA dibuka di level US$ 65,93 per ton pada bulan Januari, dan hanya naik tipis 1,45% menjadi US$ 66,89 per ton pada HBA Februari.

Kontan.co.id juga mencatat, setidaknya dalam dua tahun terakhir ini, realisasi produksi batubara nasional selalu meroket dari target. Pada tahun 2018, misalnya, saat itu target di RKAB ditetapkan sebesar 485 juta ton. Tapi, realisasi produksi di tahun itu menanjak menjadi 557 juta ton.

Pada tahun 2019, target awal dalam RKAB dipatok di angka 489,12 juta ton. Namun, realisasi produksi hingga akhir tahun lalu menanjak hingga menjadi 616 juta ton. During this period, the Ministry of ESDM also revised the RKAB by providing additional production quotas. Bambang

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IMA-Daily Update Page 11 Gatot previously said, in the revised RKAB,

his party considered a number of things, including the fulfillment of domestic supply obligations (DMO) throughout the first semester, the company's operational capability, and the condition of coal prices. Bambang also once said, there are a number of obstacles and considerations why coal production is difficult to brake. According to him, companies holding Mining Business Licenses (IUP) production operations continue to increase, in line with the authority of local governments to issue licenses as stipulated in the regional autonomy regime.

In addition, said Bambang, adjustments to production are also related to market conditions, social impacts, labor, regional income, and state revenue.

Dalam periode tersebut, Kementerian ESDM juga melakukan revisi RKAB dengan

memberikan tambahan kuota produksi. Bambang Gatot sebelumnya mengatakan, dalam revisi RKAB itu pihaknya memper-timbangkan sejumlah hal, antara lain pemenuhan wajib pasok dalam negeri atau

domestic market obligation (DMO)

sepan-jang semester I, kemampuan operasional perusahaan, serta kondisi harga batubara. Bambang juga pernah bilang, ada sejumlah kendala dan pertimbangan mengapa produksi batubara sulit untuk direm. Menurutnya, perusahaan yang memegang Izin Usaha Pertambangan (IUP) operasi produksi terus meningkat, seiring dengan kewenangan pemerintah daerah untuk mengeluarkan izin sebagaimana yang di-atur dalam rezim otonomi daerah.

Selain itu, kata Bambang, penyesuaian produksi juga terkait dengan kondisi pasar, dampak sosial, tenaga kerja, pendapatan daerah, dan penerimaan negara.

Coal Royalties Will Be Freed, The

Conditions Are Product

Downstreaming

THE GOVERNMENT intends to provide

relief to the coal industry that wants to downstream the product. Now the government is working on what incentives will be given.

One of them, according to the Director General of Mineral and Coal of the Ministry of ESDM, Bambang Gatot, is freeing royalties, aka mandatory deposits to the state. According to him, this was proposed by the Coordinating Minister for the Economy Airlangga Hartarto.

Royalti Batu Bara Mau

Dibebaskan, Syaratnya Hilirisasi

Produk

P

EMERINTAH be rniat memb eri kan keringanan pada industri batu bara yang mau melakukan hilirisasi produk. Kini pemerintah sedang menggodok apa insentif yang akan diberikan.

Salah satunya, menurut Dirjen Minerba Kementerian ESDM Bambang Gatot adalah menggratiskan royalti alias setoran wajib ke negara. Hal ini menurutnya diusulkan oleh Menko Perekonomian Airlangga Hartarto.

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IMA-Daily Update Page 12 "First, how much royalties, this is the

Coordinating Minister (Economy) said to zero. Then how much is the selling price and what kind of taxation," said Bambang during a meeting with the House of Representatives Commission VII, Jakarta, Tuesday (02/11/2020).

"This has not been decided yet, it is still being discussed," he continued.

Bambang said this incentive would indeed reduce non-tax state revenue (PNBP). Even so he is not worried because Indonesia will benefit from the downstream coal sector. "It hasn't been decided yet. Yes (PNBP) is reduced a little, but the benefits down-stream are large," Bambang said.

The ESDM Ministry itself, according to Bambang, has been involved in discussing this incentive. One of them is by calculating the operational components of a coal company.

"Yes, it's from the government, (involved) in terms of calculations. But what it's like has not been decided yet," said Bambang. Gasification is one of the downstream options. What is the full plan?

The coal gasification project that will be worked on by PT Bukit Asam (PTBA) will be one of the incentives given. Bambang said that the project was very large in investment so incentives were needed. "For coal it just started because the investment was very large. Around US$ 3 billion in PTBA. We are currently evaluating the policy. This is why it must be given incentives. But the decision was in the government," said Bambang.

Bambang revealed that investment in the gasification project is indeed quite large because all the machinery and technology used must be purchased.

"Pertama, royaltinya berapa, ini Pak Menko (Perekonomian) bilang sampai nol. Lalu harga jualnya berapa dan perpajakannya seperti apa," ungkap Bambang saat rapat bersama Komisi VII DPR, Jakarta, Selasa (11/2/2020).

"Ini belum diputuskan, masih dibahas," lanjutnya.

Bambang mengatakan insentif ini memang akan mengurangi pendapatan negara bukan pajak (PNBP). Meski begitu dia tidak khawatir pasalnya Indonesia akan menda-patkan manfaat pada sektor hilir batu bara. "Itu kan belum diputuskan. Ya (PNBP) berkurang sedikit tapi manfaat di hilir besar," ungkap Bambang.

Kementerian ESDM sendiri, menurut Bambang sudah dilibatkan dalam pem-bahasan insentif ini. Salah satunya lewat aspek hitung-hitungan komponen operasi-onal perusahaan batu bara.

"Ya iya kan dari pemerintah, (dilibatkan) dalam hal kalkulasi hitung-hitungan. Tapi seperti apa nanti kan belum diputuskan," kata Bambang.

Gasifikasi menjadi salah satu opsi hilirisasi. Bagaimana rencana lengkapnya?

Proyek gasifikasi batu bara yang akan digarap PT Bukit Asam (PTBA) akan menjadi salah satu yang diberikan insentif. Bambang menyebut kalau proyek ini sangat besar investasinya sehingga butuh diberikan insentif.

"Untuk batu bara itu baru mulai karena sangat besar investasinya. Sekitar US$ 3 miliar di PTBA. Ini kita sedang evaluasi kebijakannya. Ini makanya harus diberikan insentif. Tapi keputusan itu di pemerintah," ungkap Bambang.

Bambang mengungkapkan investasi pada proyek gasifikasi memang tergolong besar dikarenakan semua mesin dan teknologi yang digunakan harus dibeli.

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IMA-Daily Update Page 13 "In China, gasification can be up to avtur,

but all the machines and technology itself. If we buy all machines and technology, it will be expensive," said Bambang. (ang/ang)

"Kalau di China, gasifikasi bisa sampai avtur tapi semua mesin dan teknologi sendiri. Kalau di kita mesin dan teknologi semua beli. Jadi mahal," kata Bambang. (ang/ang)

Build Smelter, Vale Indonesia

(INCO) Find Strategic Partners

Finna U. Ulfah

METAL mining issuer, PT Vale Indonesia

Tbk., Admitted that it is still looking for a strategic partner for one of its smelter construction projects in Central Sulawesi, which is planned to be developed this year. Vale Indonesia's Senior Manager of Communication, Suparam Bayu Aji said that this year the company plans to develop two rotation projects, namely in Bahodopi, Central Sulawesi and in Pomalaa, Southeast Sulawesi.

"For those in Southeast Sulawesi we have collaborated with Sumitomo Metal Mining, while for those in Central Sulawesi we are still in the process of finding a strategic partner," Bayu told Bisnis on Tuesday (02/11/2020).

To note, the issuer coded INCO share plans to build a nickel smelter in Pomalaa, Central Sulawesi, while in Bahodopi, Southeast Sulawesi it is planned to ferronickel smelters.

Based on Bisnis' record, the Bahodopi and Pomalaa project is said to produce first class nickel products. The product is different from the nickel matte that Vale Indonesia normally produces through its factory in Sorowako, South Sulawesi.

Bangun Smelter, Vale Indonesia

(INCO) Cari Mitra Strategis

Finna U. Ulfah

EMITEN pertambangan logam, PT Vale

Indonesia Tbk., mengaku masih mencari mitra strategis untuk salah satu proyek pembangunan smelternya di Sulawesi Tengah yang direncanakan dikembangkan pada tahun ini.

Senior Manager Communication Vale Indonesia, Suparam Bayu Aji mengatakan bahwa pada tahun ini perseroan berencana untuk mengembangkan dua proyek penghiliran yaitu di Bahodopi, Sulawesi Tengah dan di Pomalaa, Sulawesi Tenggara.

“Kalau yang di Sulawesi Tenggara kami sudah kerja sama dengan Sumitomo Metal Mining, sedangkan untuk yang di Sulawesi Tengah kami masih dalam proses mencari mitra strategis,” ujar Bayu kepada Bisnis, Selasa (11/2/2020).

Untuk diketahui, emiten berkode saham INCO itu berencana untuk membangun smelter nikel di Pomalaa, Sulawesi Tengah, sedangkan di Bahodopi, Sulawesi Tenggara direncanakan untuk smelter feronikel. Berdasarkan catatan Bisnis, proyek Bahodopi dan Pomalaa disebut akan menghasilkan produk olahan nikel kelas satu. Produk tersebut berbeda dengan nickel matte yang biasa diproduksi Vale Indonesia melalui pabrik di Sorowako, Sulawesi Selatan.

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IMA-Daily Update Page 14 Meanwhile, nickel matte is only used for

stainless steel stainless steel industry. Meanwhile, first-class nickel is a raw material for premium products such as electric batteries for electronic vehicles (EV).

Nevertheless, Bayu has not mentioned the estimated total investment that will be disbursed by INCO for the two projects. Editor: M. Taufikul Basari

Adapun, nickel matte hanya digunakan untuk industri baja anti karat stainless steel. Adapun, nikel kelas satu merupakan bahan baku produk premium seperti baterai listrik untuk electronic vehicle (EV). Kendati demikian, Bayu belum menye-butkan estimasi total investasi yang akan dikucurkan INCO untuk kedua proyek tersebut. Editor : M. Taufikul Basari

Director General of Mineral and

Coal Targets Rp44.39 Trillion

PNBP This Year

THE DIRECTORATE General (Dirjen) of

Minerba, Ministry of ESDM of the Republic of Indonesia, targets the 2020 Non-Tax State Revenues (PNBP) of Rp 44.39 trillion. "For 2020 it is targeted to be 44.93 trillion," said Director General of Minerba of the ESDM Ministry Bambang Gatot Ariyono in a Hearing Meeting at the House of Representatives Commission VII, Jakarta, Tuesday (02/11/2020).

Bambang detailed several sources of state revenue including PNPB Minerba totaling Rp. 26,209 trillion. The figure came from fixed fee income of Rp 549.9 trillion and royalty opinion of Rp 25.659 trillion. Meanwhile other PNPB in the form of mining product sales amounted to Rp 18.185 trillion.

The PNBP 2020 target is assuming a production of 530 million tons, with a Reference Coal Price (HBA) of USD 90/ton and an exchange rate of Rp 14,400. As agreed in the DPR's Budget Agency (Banggar) meeting of USD 90 per ton.

Dirjen Minerba Targetkan PNBP

Tahun Ini Rp 44,39 Triliun

DIREKTORAT Jenderal (Dirjen) Minerba

Kementerian ESDM RI, menargetkan Pendapatan Negara Bukan Pajak (PNBP) tahun 2020 sebesar Rp 44,39 triliun.

"Untuk tahun 2020 ditargetkan 44,93 triliun," kata Dirjen Minerba Kementerian ESDM Bambang Gatot Ariyono dalam Rapat Dengar Pendapat di Komisi VII DPR RI, Jakarta, Selasa (11/2/2020).

Bambang merincikan beberapa sumber pendapatan negara diantaranya, PNPB Minerba sebanyak Rp 26,209 triliun. Angka tersebut berasal dari pendapatan iuran tetap sebanyak Rp 549,9 triliun dan pendapat royalti sebesar Rp 25,659 triliun. Sementara itu PNPB lainnya berupa penjualan hasil tambang sebesar Rp 18,185 triliun.

Target PNBP 2020 ini dengan asumsi produksi 530 juta ton, dengan Harga Batu bara Acuan (HBA) USD 90/ton dan kurs Rp 14.400. Sebagaimana disepakati dalam rapat Badan Anggaran (Banggar) DPR sebesar USD 90 per ton.

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IMA-Daily Update Page 15 While Australia's IMF forecast Coral Price in

2020 tends to fall to USD 71 per ton.

"But the January 2020 HBA was USD 65.93 per ton," Bambang said.

Russian coal

This happens because the entry of Russian coal into the Asia Pacific Market. So that the potential for excess supply and have an impact on coal prices decline.

Not only that global energy demand is still sluggish due to a slowdown in the world economy (European and Chinese markets are sluggish).

Bambang also revealed five identification of PNPB problems in the mineral and coal sector. First, there are 3,154 Mining Business Permit Holders (IUP) spread across 32 provinces and 231 regencies and 11 mineral and coal producing cities. Second, more than 60 percent of regional IUPs do not understand how to calculate PNBP. Third, there are complaints by mining companies about the amount of fines or underpayments when audits are conducted.

Fourth, when audits are carried out on regional IUP holders many companies have terminated and the company's address is unclear. Fifth, there needs to be a method or system to cover all PNBP obligations of the Company throughout Indonesia in real time. Anisyah Al Faqir, Merdeka.com

Sementara forecast IMF Australia Coral Price pada tahun 2020 cenderung turun pada angka USD 71 per ton.

"Tetapi HBA pada Januari 2020 sebesar USD 65,93 per ton," kata Bambang.

Batu Bara Rusia

Hal ini terjadi karena masuknya batu bara Rusia ke Pasar Asia Pasifik. Sehingga berpotensi kelebihan supply dan ber-dampak pada penurunan harga Batubara. Tidak hanya itu permintaan energi global masih lesu akibat perlambatan ekonomi dunia (pasar Eropa dan China sedang lesu). Bambang juga membeberkan lima iden-tifikasi permasalahan PNPB di sektor minerba. Pertama, Pemegang Izin Usaha Pertambangan (IUP) sebanyak 3.154 yang tersebar di 32 provinsi dan 231 kabupaten dan 11 kota penghasil mineral dan batu bara.

Kedua, lebih dari 60 persen IUP daerah kurang memahami cara menghitung PNBP. Ketiga, adanya keluhan perusahaan tambang tentang besarnya pengenaan denda atau kurang bayar ketika dilakukan audit.

Keempat, ketika dilakukan audit pada pemegang IUP daerah banyak perusahaan yang sudah terminasi dan alamat per-usahaan tidak jelas. Kelima, perlu ada metode atau sistem untuk mengcover seluruh kewajiban PNBP Perusahaan di seluruh Indonesia secara realtime. Anisyah Al Faqir, Merdeka.com

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The Ministry of ESDM Targeting

Rp105 trillion Investment from

the Mineral and Coal Sector

THE MINISTRY of Energy and Mineral

Resources is targeting investments in the mineral and coal (minerba) sector to reach US$ 7.7 billion or around Rp 105.5 trillion (assuming an exchange rate of Rp 13,700 per US dollar) by 2020.

ESDM Ministry's Mineral and Coal Director General Bambang Gatot Ariyono said the target increased by percent from the realization of 2019 due to the large number of smelter construction projects.

For the record, the realization of investment in the mineral sector last year reached US$ 6.5 billion or 105 percent of the investment target that had been set by the Work Plan and Budget (RKAB), US$ 6.1 billion.

"In 2020, our target is still US$ 7.7 billion, because of what? Because the biggest is from the IUPK (Special Mining Business License). The IUPK is for processing and refining factories," Bambang said during the House of Representatives Commission VII meeting in Jakarta, Tuesday (11/2).

He also explained that the increase in investment will continue until 2021. However, Bambang said that the trend will decline afterwards, because the smelter processing and refining facilities project has been completed.

"2021 targets will fall to US$ 5.6 billion, then 2022 will be US$ 4.3 billion, then 2023 will go down. Because of what? Because of this the smelter construction has started to decrease," he said.

Kementerian ESDM Bidik

Investasi Rp105 T dari Sektor

Minerba

K

EMENTE RIAN ES DM mena rge tkan investasi di sektor mineral dan batubara (minerba) mencapai US$7,7 miliar atau sekitar Rp105,5 triliun (asumsi kurs Rp13.700 per dolar AS) pada 2020.

Direktur Jenderal Mineral dan Batubara Kementerian ESDM Bambang Gatot Ariyono menyebut target tersebut meningkat persen dari realisasi 2019 lantaran banyaknya proyek pembangunan fasilitas pengolahan dan pemurnian (smelter).

Sebagai catatan, realisasi investasi sektor minerba tahun lalu mencapai US$6,5 miliar atau 105 persen dari target investasi yang sudah dipatok Rencana Kerja dan Anggaran Belanja (RKAB), US$6,1 miliar. "Di 2020, target kami masih US$7,7 miliar, karena apa? Karena ini yang terbesar adalah dari IUPK (Izin Usaha Pertam-bangan Khusus). IUPK ini adalah untuk pabrik-pabrik pengolahan dan pemur-nian," kata Bambang saat rapat Komisi VII DPR di Jakarta, Selasa (11/2).

Ia pun menjelaskan peningkatan investasi akan berlanjut hingga 2021. Namun, Bambang mengatakan tren tersebut akan turun setelahnya, karena proyek fasilitas pengolahan dan pemurnian smelter yang sudah rampung.

"2021 target turun menjadi US$5,6 miliar kemudian 2022 US$4,3 miliar, kemudian 2023 turun. Karena apa? Karena ini memang pembangunan smelter sudah mulai berkurang," ungkapnya.

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IMA-Daily Update Page 17 Then, he revealed that the contribution of

regional Mining Business Permit (IUP) for investment was also quite large this year, with funds reaching US$ 988 million or around Rp13.5 trillion.

Bambang revealed the investment value of the mineral and coal sector is still dominated by the downstream sector. He explained the value of investments related to mining exploration itself is not so large. According to Bambang, this is a challenge for the government to be able to create a special investment climate for exploration that is more attractive for investors. He said the value of exploration itself is strongly influenced by metal prices.

"Compared to global mining, we (Indonesia) are also small in our case (exploration) how to increase investment attractiveness. The investment develop-ment is influenced by metal prices. Viewed, global non exploration budget is influenced by prices rather than metals," he said. (ara/sfr)

Kemudian, ia mengungkap bahwa kontri-busi Izin Usaha Pertambangan (IUP) daerah untuk investasi juga cukup besar pada tahun ini, dengan dana mencapai US$988 juta atau sekitar Rp13,5 triliun.

Bambang mengungkapkan nilai investasi sektor minerba masih didominasi oleh sektor hilir. Ia menjelaskan nilai investasi terkait eksplorasi tambang sendiri tak begitu besar.

Menurut Bambang, hal tersebut menjadi tantangan bagi pemerintah untuk bisa menciptakan iklim investasi khusus eksplo-rasi yang lebih menarik bagi para investor. Ia mengatakan nilai eksplorasi sendiri sangat dipengaruhi oleh harga logam

"Dibandingkan dengan pertambangan global, kita (Indonesia) juga kecil kami dalam hal ini (eksplorasi) bagaimana me-ningkatkan daya tarik investasi. Perkem-bangan investasi ini dipengaruhi harga logam. Dilihat, global non exploration budget dipengaruhi harga daripada logam," ungkap-nya. (ara/sfr)

Freeport's Acquisition Has No

Impact on Papua's Economy

Rio Indrawan

T

HE ACQUISITION of PT Freeport Indonesia by the government through PT Indonesia Asahan Aluminum (Inalum) is considered not to provide benefits to the Indonesian economy, especially the Papua economy as previously promised. Even economic growth in Papua has actually been minus in the last two years. Gus Irawan Pasaribu, Deputy Chairperson of the House of Representatives Commission VII, revealed that the government and Freeport were too blamed on this condition. Whereas in the past during...

Akuisisi Freeport Tidak Berikan

Dampak Bagi Ekonomi Papua

Rio Indrawan

AKUISISI PT Freepor t Indonesia ol eh

pemerintah melalui PT Indonesia Asahan Aluminium (Inalum) dinilai tidak kunjung memberikan manfaat bagi ekonomi Indonesia, khususnya ekonomi Papua seperti yang dijanjikan sebelumnya. Bahkan pertum-buhan ekonomi di Papua justru minus dalam kurun dua tahun terakhir.

Gus Irawan Pasaribu, Wakil Ketua Komisi VII DPR, mengungkapkan pemerin tah dan Freeport terlalu banyak berkilah dengan kondisi ini. Padahal dulu saat...

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IMA-Daily Update Page 18 Whereas in the past during the negotiation

process the government always promised great economic benefits if Freeport was acquired.

"Our existence at Freeport has no benefit at all. We become the majority there 51% owned. Mining holding is 41% and local government is 10%. We were hoping that in 2018 we would take over, in 2019 we could get dividends. But the fact is that there are no dividends. Let alone 2018, 2019, 2020, there is no reason either because they want to focus on underground mining," Gus said during a meeting with the Directorate General of Mineral and Coal of the Ministry of Energy and Mineral Resources (ESDM), Tuesday (11/2).

Yet according to Gus underground mining activities have been carried out since 2018 so there should have been a contribution to Freeport's production and the results can already be felt by the people of Papua. "I remember very well in 2017, we visited there including underground. 550 km in length. Indeed, the benefits of being the majority shareholder do not yet exist," he said.

Bambang Gatot Ariyono, Director General of Minerals and Coal at the Ministry of ESDM, said that the Papuan economy is down due to the impact of shifting Freeport's underground mining activities from open mines in 2019. This will certainly affect Freeport's copper and gold production. "In 2020, Freeport only does development that produces (ore) but not 100%. It is expected that in 2021 there will be full capacity production," he said.

According to Bambang, Freeport is also preparing preparations for the transfer of mining activities. Freeport must prepare not only technical but also time consuming non-technical.

Padahal dulu saat proses negosiasi pemerintah selalu menjanjikan adanya manfaat ekonomi yang besar jika Freeport diakuisisi.

“Keberadaan kita di Freeport belum ada manfaatnya sama sekali. Kita menjadi mayoritas di sana 51% saham yang dimiliki. Holding tambang 41% dan pemda 10%. Kan kita tadinya berharap 2018 kita ambil alih, 2019 dapat dividen. Tapi faktanya dividen nggak ada yang masuk. Jangankan 2018, 2019, 2020 pun nggak ada juga dong alasannya karena mau fokus di underground mining,” kata Gus disela rapat dengan Ditjen Minerba Kementerian Energi dan Sumber Daya Mineral (ESDM), Selasa (11/2).

Padahal menurut Gus kegiatan tambang bawah tanah sudah dilakukan sejak 2018 jadi harusnya sudah ada kontribusi bagi produksi Freeport dan hasilnya sudah bisa dirasakan oleh masyarakat Papua.

“Saya ingat betul tahun 2017, kami kunjungan ke sana termasuk underground. 550 km panjangnya. Memang manfaat sebagai pemegang saham mayoritas ini belum ada,” katanya.

Bambang Gatot Ariyono, Direktur Jenderal Mineral dan Batu Bara Kementerian ESDM, mengatakan ekonomi Papua turun karena ada dampak peralihan kegiatan tambang Freeport ke bawah tanah dari tambang terbuka pada 2019. Ini tentu mem-pengaruhi produksi tembaga dan emas Freeport.

“Pada 2020, Freeport hanya melakukan development yang menghasilkan (ore) tapi tidak 100%. Diharapkan pada 2021 sudah ada produksi full capacity,” ujarnya.

Menurut Bambang, persiapan perpindahan kegiatan tambang juga dirasakan Freeport. Freeport harus mempersiapkan tidak hanya teknis tapi juga nonteknis yang memakan waktu.

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IMA-Daily Update Page 19 "The capacity is down, so those involved

must go down, employees go down, contractors go down, all go down. This is because the activities are moving out of phase and now it will only start because Freeport is preparing documents, including environmental documents," said Bambang. He further believed that Freeport's contribution could only be felt 3-4 years after it was acquired, not only by the community and the economy but also by Inalum who could pay debts on loans to buy Freeport shares.

"Later it will produce dividends so that dividends within 3-4 years will be completed to complete the loan (Inalum)," said Bambang.

Based on the official statement released by Freeport McMoRan as one of Freeport Indonesia's shareholders, the realization of copper concentrate production was only 607 million pounds or 47.6% drop compared to the production of concentrate in 2018 which was 1.16 billion pounds. In addition to copper concentrate production, Freeport Indonesia's gold production also fell. Last year, 863 thousand ounces of gold production was far below the realization in 2018 which reached 2.416 million ounces.

As production declines, gold sales in 2019 also fell to 973 thousand ounces compared to 2018 of 2.36 million ounces.

The Central Statistics Agency (BPS) noted that economic growth in Papua experienced a significant economic decline of 15.72%. Economic decline in Papua has occurred since the fourth quarter of 2018 which was recorded down 17.95%.

BPS acknowledged that the economic downturn in Papua was caused by a decrease in PT Freeport Indonesia's production. The decline in production...

“Kapasitasnya turun, jadi yang terlibatnya mesti turun, pegawai turun, kontraktor turun, turun semua. Ini karena kegiatannya perpindahan dari fase dan sekarang baru akan mulai karena Freeport mempersiapkan dokumen, termasuk dokumen lingkungan-nya” ungkap Bambang.

Lebih lanjut Ia meyakini kontribusi Freeport baru bisa dirasakan 3-4 tahun setelah diakuisisi, tidak hanya dirasakan oleh masyarakat dan ekonomi tapi juga Inalum yang bisa membayar utang atas pinjaman untuk pembelian saham Freeport.

“Nanti itu akan menghasilkan dividen sehingga dividen itulah dalam waktu 3-4 tahun akan diselesaikan untuk menyelesai-kan pinjaman (Inalum),” kata Bambang. Berdasarkan keterangan resmi yang dirilis Freeport McMoRan sebagai salah satu

pemegang saham Freeport

Indonesia, menunjukkan realisasi produksi konsentrat tembaga hanya 607 juta pon atau anjlok 47,6% jika dibanding dengan produksi konsentrat pada 2018 yakni sebesar 1,16 miliar pon.

Selain produksi konsentrat tembaga, produksi emas Freeport Indonesia juga turun. Sepanjang tahun lalu produksi emas 863 ribu ounce jauh dibawah realisasi pada 2018 yang mencapai 2,416 juta ounce. Seiring penurunan produksi, penjualan emas sepanjang 2019 juga turun menjadi 973 ribu ounce dibandingkan 2018 sebesar 2,36 juta ounce.

Badan Pusat Statistik (BPS) mencatat pertumbuhan ekonomi di Papua mengalami penurunan ekonomi yang cukup dalam yakni 15,72%. Penurunan ekonomi di Papua sudah terjadi sejak kuartal IV 2018 yang tercatat turun 17,95%.

BPS mengakui turunnya perekonomian di Papua disebabkan penurunan produksi PT Freeport Indonesia. Penurunan produksi itu terjadi...

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IMA-Daily Update Page 20 The decline in production occurred

because of a shift in mining activities, from open pit mines to underground mines. Still based on BPS data, mining and excavation dropped drastically during 2019 which was -43.21%. If seen quarterly, it continues to decline and has also occurred since the fourth quarter of 2018.

In the fourth quarter of 2018 the mining and quarrying industry in Papua fell -43.68%, the first quarter of 2019 -48.47%, the second quarter of 2019 57.48%, the third quarter of 2019 38.31% and the fourth quarter of 2019 19.04%. (RI)

Penurunan produksi itu terjadi lantaran adanya peralihan kegiatan tambang, dari tambang terbuka ke tambang bawah tanah. Masih berdasarkan data BPS, pertam-bangan dan penggalian anjlok drastis selama 2019 yakni -43,21%. Jika dilihat secara kuartalan memang terus menurun dan terjadi juga sejak kuartal IV 2018. Pada kuartal IV 2018 industri pertambangan dan penggalian di Papua turun -43,68%, kuartal I 2019 -48,47%, kuartal II 2019 57,48%, kuartal III 2019 38,31% dan kuartal IV 2019 19,04%. (RI)

Iron ore, coking coal shrug off China coronavirus, look to stimulus:

Russell

By Clyde Russell

IT may seem slightly odd to ask if a commodity that has shed 15% of its value in a little over

two weeks has actually fallen enough, but iron ore is looking quite resilient in the face of China’s coronavirus epidemic.

In theory iron ore and steel should be among commodities most exposed to the expected economic hit from the virus, which has killed more than 1,000 people and infected more than 42,000.

The epidemic has led authorities in Beijing to quarantine the central city of Wuhan, where the outbreak started, but more seriously for the economy, it has led to extended holidays after the week-long Lunar New Year break.

Given steel’s central role in construction, infrastructure and manufacturing, especially vehicles, it is likely that demand for the metal will slump in the first quarter.

How big a hit China’s economy will take is still subject to debate, with some analysts seeing growth in gross domestic product halving to about 3% year-on-year, while others expect the blow to be slightly more modest.

Even the best case scenarios are likely to prove deleterious to China’s steel sector.

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IMA-Daily Update Page 21 Benchmark 62% ore MT-IO-QIN62=ARG, as assessed by commodity price reporting agency Argus, ended Monday at $81.35 a tonne, down 14.9% since Jan. 22, when the virus concerns really started to grab media headlines.

While a drop of nearly 15% is nothing to sneeze at, it is worth noting the price is still higher than the 2019 low, which was $78.15 a tonne on Nov. 11, when concern about a trade dispute with the United States was hitting sentiment.

The price action seems to suggest the market was more concerned by the trade dispute, which actually did not appear to have much impact on China’s steel production or demand, than by the virus, which is likely to have a very real effect on both.

It is also worth noting that while iron ore prices plunged when China resumed trading after the Lunar New Year break, they have since largely stabilised, staying in a fairly narrow $3 range since Feb. 3.

Domestic iron ore futures on the Dalian Commodity Exchange have outperformed the spot price recently, with their decline since Jan. 20 standing at only 9.2% by Tuesday.

COKING COAL STABLE

Iron ore is only one component for the steel-making process, the other being coking coal, and here the price action is even more subdued.

Coking coal futures traded in Singapore, which are based on the price of Australian free-on-board cargoes, ended at $150 a tonne on Monday.

They hardly show any impact of the virus, with the recent low being just $146.08 a tonne on Feb. 4, and the contract is still up 10.3% since the end of last year.

Coking coal futures on the Dalian Commodity Exchange have also rallied, ending Monday at 1,225 yuan ($175.50) a tonne, slightly off the prior close of 1,227.5 yuan, but up 3.7% from the recent low of 1,181 yuan, and also up 5.2% from the end of last year.

The relatively sanguine performance of iron ore and coking coal in the face of the virus contrasts with Brent crude , which has dropped 18.3% since Jan. 20, and a steeper 22.7% from its high this year on Jan. 6.

While crude oil consumption in China is likely to be affected by the virus, its overall impact on imports may not be so dramatic as refiners and the government are likely to use the drop in prices to build strategic and commercial oil stockpiles.

For iron ore and steel, it would appear market participants are looking beyond the virus to the likelihood of increased stimulus spending by Beijing.

Once the virus is contained there is wide expectation for the government to announce measures to support growth, and steel mills will be hoping that infrastructure and other steel-intensive industries are favoured. (Editing by Clarence Fernandez)

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MICROMINE’s Geobank 2020 offers simpler & more efficient data

management for geologists

Posted by Paul Moore

MAKING an informed decision in the minerals discovery process requires access to reliable

information and secure data management, with modern visualisation and workflow sequencing. These are among the key features of mining software major MICROMINE’s new geological data management software release, Geobank 2020, which will be showcased at PDAC in Toronto in March.

MICROMINE says it has made significant additions and modifications to its popular software product, which “promise to add value to geologists and mining engineers by making data management simpler and more efficient.”

Designed in collaboration with clients and users, Product Strategy Manager, Ian Whitehouse explained Geobank 2020 has been built with many enhancements to provide users with a platform to interact with their geological data using creative intuitive interfaces and customisable forms.

“One of the most highly anticipated features of Geobank 2020 is the new form designer. The form designer streamlines and facilitates business processes and, in turn, increases data management accuracy and efficiency,” Whitehouse explained. “The ability to design and build forms also enables users to create intuitive interfaces and rich tools to produce better information. It’s about configuring our tools to facilitate our clients’ processes, rather than them having to change their processes to fit our tools.”

With a new and improved licence manager, Geobank 2020 also gives users access to licence borrowing, activation and transfer functions. Geobank 2020 has also been configured so those already using the popular software solution can seamlessly operate both new and older versions of Geobank. An independent management tool is in place to ensure the different versions do not interfere with one another. The latest release also enables data sharing between all of the popular industry file types.

“MICROMINE appreciates most geologists use multiple software solutions and products, so integration has been an important consideration for us and it’s where Geobank 2020 really delivers,” he added. “Within Geobank 2020, it is possible to pass data parameters to third-party applications in a ready-to-work state. A ‘connector’ has also been included so Geobank 2020 offers full .dat Unicode support. In an era where efficiency and productivity go hand-in-hand, system integration will save users time and offer greater data reliability. MICROMINE’s aim was to develop a solution that addresses the industry’s evolving needs and our clients’ feedback. As a result, Geobank 2020 offers a dynamic, efficient and scalable software solution that will help companies of all sizes better record, access, review, integrate and utilise their essential geological data.”

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Newcrest, Harmony to resume permitting talks for PNG project

Cecilia Jamasmie

NEWCREST Mining (ASX: NCM) and Harmony Gold (JESE: HAR) (NYSE: HMY) scored a win on

Tuesday after Papua New Guinea’s national court dismissed a stay order on work relating to their Wafi-Golpu gold-copper project, which allows the partners to resume permitting talks with the government.

The proceeding had been requested by the governor of the Morobe province, where the project is located. He alleged he should have been consulted during the negotiation of the joint venture deal setting out the terms upon which the mine would be built.

Negotitations hit a roadblock in September, when PNG demanded to keep 40% of the gold produced from Wafi-Golpu. The government then withdrew support for the memorandum of understanding, citing delays caused by legal proceedings.

Newcrest and Harmony had been hoping to secure a mining lease for the $5.4 billion deposit early last year.

The 50-50 partners said they were looking forward to re-engaging with national authorities and progressing on discussions about the special mining licence.

“The Wafi-Golpu Joint Venture is well placed to resume discussions with the PNG Government, given the constructive progress already made on the various agreements required for completion,” Harmony Gold chief executive, Peter Steenkamp, said in a separate statement. Located near the port city of Lae, in the Morobe province, Wafi-Golpu is expected to take about five years from the grant of the mining lease to the time it generates its first ore.

At peak production, the mine is forecast to churn out 320,000 ounces of gold and 150,000 tonnes of copper a year.

Vale loses spot as world's top iron-ore producer to Rio Tinto

By: Reuters

BRAZIL's Vale on Tuesday posted a sharp output decline and $671-million in net additional

provisions stemming from a deadly dam burst about a year ago, underlining the enduring effects of the incident on the iron ore giant.

In a statement, the company reported a 22.4% fall in fourth-quarter iron-ore production from the same period last year and a 9.6% drop in quarterly terms. With that, Vale officially lost its position in 2019 as the world's top iron-ore producer to Rio Tinto.

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IMA-Daily Update Page 24 In late January 2019, a Vale-owned tailings dam in the town of Brumadinho burst, killing some 270 people. The incident led to serious production stoppages, pledges by Vale to reconstruct or decommission many of its other dams and the firing of a number of executives.

In a filing, Vale said it was decreasing the provisions previously allotted to "decharacterizing," or modifying some smaller internal dikes, at nine dams similar to the one that burst last year by $447-million.

However, the company said it will be decharacterizing some smaller internal dikes at some dams, which will lead to an additional $315 million in provisions.

Additionally, the company said, regulations released in August require the decharacterization of some "drained stack structures," which are a different kind of commonly used tailings dam. That process will require an additional $716-million in provisions, it said.

Including other smaller adjustments, the total negative effect of the new provisions will be $671 million, which will be formally recognized when full-year financial results are released on February 20, the company said.

In addition to a drop in iron ore output, Vale reported a fall in fourth-quarter production in annual terms for all other products, with pellet and coal production falling some 40.5% and 39.6%, respectively.

The company left its 2020 iron-ore production guidance unchanged, but revised its pellet production forecast down to 44-million tonnes from 49-million, partly as a result of the suspension of the Laranjeiras dam over stability concerns.

Credit Suisse said in a note that the additional provisions and production figures were disappointing, but also said Vale iron ore sales exceeded expectations, thanks to inventory drawdowns.

Industry analysts were also pleased that Vale kept its 2020 iron ore production guidance steady at 340-million to 355-million tonnes.

Brazil-listed common shares in Vale were up 3.7% in afternoon trade, as China iron ore futures registered their biggest one-day gain in seven months. Brazil's benchmark Bovespa equities index was up 2.5%.

Thermal coal traders target Chinese demand amid production

standstill

Author: Amanda Flint, Joseph Clarke, Jenny Ma, Fred Wang; Editor: Jason Lindquist

THE IMPACT of the coronavirus outbreak on Chinese coal has resulted in a production

standstill, as the effects reverberate across the wider commodity markets and with shipowners reluctant to move their vessels into the Pacific basin, market sources said Tuesday.

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IMA-Daily Update Page 25 According to S&P Global Platts Analytics, the situation in China has yet to return to "business as usual" and said it would take weeks until economic and transport activity returned to normal -- although it was challenging to gauge the extent to which activity had returned due to insufficient data.

Only a few Chinese producers -- notably in Datong and Shandong -- have recently looked to restart coal production at some of their mines.

As the world's largest consumer and producer, Colombian thermal coal traders have yet again been looking to take advantage of an open arbitrage to move their tons out of the Atlantic Basin and into the Chinese and also Indian markets.

"The first port of call will be Colombian and Russian coal if Chinese production remains restricted," a European coal analyst said.

The surplus of European thermal coal stocks in the Antwerp-Rotterdam-Amsterdam region has also incentivized Russian producers specifically to move their tons elsewhere, mainly to China, where the demand for imports remains high as uncertainty around the coronavirus looms. Colombian coal is a more uncommon product in China, given its long voyage time and its differing quality level. However, as Capesize rates continue to slide, Colombian producers have found it lucrative to send their tons to the Far East, with Capesize freight on the route pegged at $16/mt by a European coal trader Tuesday.

Even with the undesirable voyage times associated with Colombian exports into Asia, stringent custom clearances placed on Australian thermal coal has meant Colombian coal is now equally advantageous, if not more so, according to market participants.

Australian imports are taking about 40-60 days for custom clearance, while non-Australian materials are taking about 30 days.

"Overall, it takes about the same time to import Australian coal as compared to Colombian coal," a China-based trader said.

Market sources in China had reported offers for 6,000 kcal/kg NAR Colombian coal at $68-$69/mt CFR China Tuesday, and that Colombian coal was around "50 cents cheaper" than its Australian counterpart after adjusting to the same calorific value, a China-based trader said. Possible buyer defaults

Unlike LNG cargoes intended for delivery into Asia, which have been forced to divert into Europe due to force majeure on ships implemented by the Chinese government, thermal coal traders have yet to see any defaults on coal imports.

"The Chinese market very much needs coal," one European market participant said, and as long as the coronavirus remained a high threat to Chinese industry, demand would remain "very robust".

Others were more skeptical, with one trader saying coal was still likely to face the same risk of default, if sellers were unable to successfully deliver their ships into Chinese ports.

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