TABLE OF CONTENTS. No. Title Media Source Page

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Daily News Update Page 1

Berdasarkan segmentasi geografis, Indonesia merupakan tujuan penjualan terbesar bagi ADRO, yang meliputi 28% dari total penjualan batubara. Pasar Asia Tenggara, yang tidak termasuk Indonesia, memiliki pangsa pasar 22% dari total penjualan pada semester I-2021, dengan Malaysia sebagai yang pembeli terbesar.

Sementara itu, porsi penjualan ke China naik menjadi 20% di periode enam bulan pertama tahun ini. Ini sejalan dengan kenaikan permintaan di Negara Tirai Bambu itu terhadap produk batubara termal dan metalurgi ADRO.

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Daily News Update Page 4 Meanwhile, 18% of ADRO's sales were

directed to other East Asian markets, apart from China, and another 10% were sold to the Indian market.

In terms of production, Adaro recorded a production figure of 26.49 million tons, or a 3% decrease from the first semester of 2020 which reached 27.29 million tons. However, in the second quarter of 2021, ADRO's coal production reached 13.62 million tons, or an increase of 7% compared to the second quarter of 2021. The total overburden removal volume in the second quarter of 2021 reached 62.68 million bank cubic meters (mbcm), or an increase of 18% yoy, bringing the strip ratio for this quarter to 4.6 times.

ADRO management said that the seaborne thermal coal market in the second quarter of 2021 was still affected by limited supply, as major supplying countries such as Indonesia and Australia still struggled to increase production even at higher prices. Bad weather contributed to the tightening of supply in Indonesia due to the prolonged rainy season and delays in the supply of heavy equipment. Miners in Indonesia are also finding it difficult to cope with the increasing number of Covid-19 cases among frontline workers.

Meanwhile, metallurgical coal in the second quarter of 2021 received strong support from the Chinese market and outside China. This was driven by govern-ment stimulus that hit a record high as well as the reopening of global economic activity, thereby encouraging an increase in global steel production with China. On the other hand, the scarcity of coal originating from Australia and outside Australia (such as Mongolia and the United States) increased during this period. With supply conditions that are...

Sementara itu, sebanyak 18% penjualan ADRO dilempar ke pasar Asia Timur lainnya, selain China, dan 10% lainnya dijual ke pasar India.

Dari sisi produksi, Adaro mencatatkan angka produksi sebesar 26,49 juta ton, atau turun 3% dari semester I-2020 yang capai sebesar 27,29 juta ton.

Namun, pada kuartal II-2021, produksi batu-bara ADRO mencapai 13,62 juta ton, atau naik 7% dibandingkan dengan kuartal kedua 2021.

Total volume pengupasan lapisan penutup pada kuartal II-2021 mencapai 62,68 juta bank cubic meter (mbcm), atau naik 18% yoy, dan membuat nisbah kupas di kuartal ini mencapai 4,6 kali.

Manajemen ADRO menyebut, pasar batubara termal seaborne pada kuartal II-2021 masih terdampak oleh keterbatasan suplai, seiring negara-negara pemasok utama seperti Indonesia dan Australia masih kesulitan untuk meningkatkan produksi meskipun dengan harga lebih tinggi.

Cuaca buruk berkontribusi terhadap penge-tatan suplai di Indonesia karena musim hujan yang berkepanjangan serta keterlam-batan pasokan alat berat. Para penambang di Indonesia juga sulit mengatasi peningkatan jumlah kasus Covid-19 di antara para pekerja garis depan.

Sementara untuk batubara metalurgi pada kuartal II-2021 mendapatkan dukungan kuat dari pasar China maupun di luar China. Hal ini didorong oleh stimulus pemerintah yang mencatat rekor tertinggi serta dibukanya kembali kegiatan ekonomi global, sehingga mendorong peningkatan produksi baja global dengan China.

Di sisi lain, kelangkaan batubara yang ber-asal dari Australia dan luar Australia (seperti Mongolia dan Amerika Serikat) meningkat pada periode ini. Dengan kondisi suplai yang...

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Daily News Update Page 5 With supply conditions that are difficult to

meet high demand in the Chinese market and outside China, the price of seaborne metallurgical coal increased significantly compared to the previous quarter and year.

Dengan kondisi suplai yang sulit me-menuhi permintaan yang tinggi di pasar China maupun luar China, harga batubara metalurgi seaborne naik signifikan diban-dingkan kuartal maupun tahun sebelum-nya.

Coal Prices Heat, This is PTBA's

Strategy to Maintain Performance

Author: Denis Riantiza Meilanova

P

T BUKIT Asam Tbk. (PTBA) seeks to keep production costs under control amid the trend of strengthening coal prices. This is the company's strategy to anticipate price fluctuations.

PTBA President Director Suryo Eko Hadianto said the company did not want to be lulled by the trend of rising coal prices. For this reason, the company has made a number of efforts so that production costs do not increase.

"We don't want to be complacent and there will be a waste of production costs. Such as controlling the stripping ratio is maintained so that costs don't rise," said Suryo in a virtual event BeyondTalk: Strategy to Boost Performance, Thursday (5/8/2021).

According to him, many coal companies tend to loosen their production costs when prices rise because they feel that the margins are quite large. This is quite risky to do if at any time the price trend reverses.

"Usually many companies have a weakness when prices go up, their costs go up too. That's a danger when prices go down. We are not ready, costs are already high," he said.

Harga Batu Bara Memanas, Ini

Strategi PTBA Jaga Kinerja

P

T BUKIT Asam Tbk. (PTBA) berupaya menjaga biaya produksi tetap terkendali di tengah tren penguatan harga batu bara. Hal ini sebagai strategi perseroan untuk mengantisipasi terjadinya fluktuasi harga. Direktur Utama PTBA Suryo Eko Hadianto mengatakan, perseroan tidak ingin terlena dengan tren kenaikan harga batu bara. Untuk itu, perseroan melakukan sejumlah upaya agar biaya produksi tidak meng-alami peningkatan.

"Kami tidak ingin terlena dan terjadi pem-borosan cost production. Seperti pengen-dalian stripping ratio itu di-maintain supaya biayanya tidak naik," ujar Suryo dalam acara virtual BeyondTalk: Strategi Mendongkrak Kinerja, Kamis (5/8/2021). Menurutnya, banyak perusahaan batu bara yang cenderung melonggarkan biaya pro-duksinya ketika harga menguat karena merasa margin yang diperoleh cukup besar. Hal ini cukup berisiko dilakukan bila sewaktu-waktu tren harga berbalik.

"Biasanya banyak perusahaan punya kelemahan saat harga naik, cost-nya naik juga. Itu bahaya saat harga turun. Kita tidak siap, biaya sudah tinggi," katanya.

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Daily News Update Page 6 Meanwhile, the reference coal price (HBA)

has again set a new record, breaking through the US$130.99 per tonne mark in August 2021. This figure is the highest figure in more than a decade.

Meanwhile, PTBA has revised its coal production target this year from the previous 29.5 million tons to 30 million tons. The increase in production targets is in line with the addition of the national production target set by the government from 550 million tons to 675 million tons in 2021. "We have proposed a new RKAB of 30 million tons and it has been approved by the government. We cannot take large quantities because it is limited by infra-structure or transportation facilities. Do not let production increase, but cannot be sold," said Suryo. Editor : Hadijah Alaydrus

Adapun, harga batu bara acuan (HBA) kembali mencetak rekor baru, yakni menembus angka US$130,99 per ton pada Agustus 2021. Angka ini merupakan angka tertinggi dalam lebih dari 1 dekade terakhir.

Sementara itu, PTBA telah merivisi target produksi batu bara tahun ini dari sebelum-nya 29,5 juta ton menjadi 30 juta ton. Peningkatan target produksi ini seiring ada-nya penambahan target produksi nasional yang ditetapkan pemerintah dari 550 juta ton menjadi 675 juta ton pada 2021.

"Kami sudah ajukan RKAB baru sebesar 30 juta ton dan sudah disetujui pemerintah. Kami tidak bisa ambil banyak-banyak karena dibatasi infrastruktur atau sarana transportasi. Jangan sampai produksi me-ningkat, tapi tidak bisa dijual," kata Suryo.

Editor : Hadijah Alaydrus

RKAB Approved, BUMI Can

Reach Production Target of 89

Million Tons

Rahajeng KH, CNBC Indonesia

P

T BUMI Resources has obtained approval for a higher Annual Work Plan and Budget (RKAB), in accordance with the 2021 fiscal year guidelines. This way, the largest coal producer can achieve this year's production target of 85-89 million tons, without having to exceed the RKAB.

"Kaltim Prima Coal and Arutmin have received a higher RKAB approval. This means we can reach the initial guideline of 85-89 million tons in 2021 without exceeding the current RKAB," said BUMI Director and Corporate Secretary Dileep Srivastava to CNBC Indonesia, Thursday (5/8/2021).

RKAB Disetujui, BUMI Bisa

Capai Target Produksi 89 Juta

Ton

Rahajeng KH, CNBC Indonesia

P

T BUMI Resources telah mendapatkan persetujuan Rencana Kerja dan Anggaran Biaya Tahunan (RKAB) yang lebih tinggi, sesuai dengan panduan tahun anggaran 2021. Dengan begitu produsen batu bara terbesar ini bisa mencapai target produksi tahun ini sebesar 85-89 juta ton, tanpa harus melebihi RKAB.

"Untuk Kaltim Prima Coal dan Arutmin telah menerima persetujuan RKAB yang lebih tinggi. Berarti kami dapat mencapai pandeuan awal 85-89 juta ton pada 2021 tanpa melebihi RKAB saat ini," kata Direktur dan Sekretaris Perusahaan BUMI Dileep Srivastava kepada CNBC Indonesia, Kamis (5/8/2021).

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Daily News Update Page 7 The Ministry of Energy and Mineral

Resources (ESDM) has officially raised the coal production target in 2021 by 75 million tons to 625 million tons from the initial target of 550 million tons. This Ministerial Decree takes effect on the date of stipulation, namely April 6, 2021 by the Minister of Esdm Arifin Tasrif.

This is stated in the Decree of the Minister of Energy and Mineral Resources No.66.K/ HK.02/MEM.B/2021 regarding the Amend-ment to the Decree of the Minister of Esdm No.255.K/30/MEM/2020 concerning the Fulfillment of Domestic Coal Needs. 2021. Until the first semester of 2021, Indonesia's coal production is 297.94 million tons, or 47.67% of this year's target.

Dileep said the biggest production challenge this year was the continuous heavy rains. But the company is trying to maintain near-normal production during this time of the pandemic.

During this summer the demand for coal was very high, but he acknowledged the high rainfall had a negative impact on the delivery of coal supplies. This is because the high rainfall has hampered land trans-portation and security in several under-ground mines.

"In addition, no new capacity has emerged due to limited funds," said Dileep.

Throughout this year, the company projects the price of coal in the range of US$ 53-56 per ton. For BUMI's subsidiary, Kaltim Prima Coal, the price of coal is estimated at US$ 60-64 per ton, while Arutmin's is at US$ 39-42 per ton. "Indeed there are some that are causing price fluctuations such as increased demand due to summer burdens, the recovery from the pandemic and ongoing supply constraints caused by lack of new capacity, bad weather conditions, safety issues in major producing countries and rail transport problems," Dileep said. (rah/rah)

Kementerian Energi dan Sumber Daya Mineral (ESDM) resmi menaikkan target produksi batu bara pada 2021 ini sebesar 75 juta ton menjadi 625 juta ton dari target awal 550 juta ton. Keputusan Menteri ini mulai berlaku pada tanggal ditetapkan yakni 6 April 2021 oleh Menteri ESDM Arifin Tasrif. Hal ini tercantum dalam Keputusan Menteri Energi dan Sumber Daya Mineral No.66.K/ HK.02/MEM.B/2021 tentang Perubahan Atas Keputusan Menteri ESDM No.255.K/30/ MEM/2020 tentang Pemenuhan Kebutuhan Batu Bara Dalam Negeri Tahun 2021. Hingga semester I-2021 produksi batu bara RI sebesar 297,94 juta ton, atau 47,67% dari target tahun ini

Dileep mengungkapkan tantangan produksi terbesar tahun ini adalah hujan lebat yang terus berlanjut. Namun perusahaan ber-upaya mempertahankan produksi yang hampir normal selama masa pandemi ini. Selama musim panas ini permintaan batu bara sangat tinggi, namun dia mengakui tingginya curah hujan berdampak negatif pada pengiriman pasokan batu bara. Pasalnya curah hujan yang tinggi membuat terhambatnya transportasi darat dan keamanan di bebe-rapa tambang bawah tanah.

"Selain itu, tidak ada kapasitas baru yg muncul karena keterbatasan dana," kata Dileep.

Sepanjang tahun ini, perusahaan memproyek-sikan harga batu bara di kisaran US$ 53-56 per ton. Untuk anak usaha BUMI, yakni Kaltim Prima Coal, harga batu bara diperkirakan di level US$ 60-64 per ton, sementara Arutmin US$ 39-42 per ton.

"Memang ada beberapa yang menyebabkan fluktuasi harga seperti peningkatan permin-taan karena beban musim panas, pemulihan pandemi dan kendala pasokan yang ber-kelanjutan yang disebabkan oleh kurangnya kapasitas baru, kondisi cuaca buruk, masalah keamanan di negara produsen utama dan masalah transportasi kereta api," kata Dileep.

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Price Soars, Minister of Esdm

Issues Coal DMO Tightening

Rules

Rio Indrawan

T

HE MINISTRY of Energy and Mineral Resources (ESDM) issued a new regulation in order to tighten the obligation to fulfill coal for domestic purposes (Domestic Market Obligation/DMO), especially for power plants. This tightening of the rules of the game is realized by adding sanctions that will be received by coal producers who do not fulfill their obligations.

The regulation is in the form of the Decree of the Minister of ESDM Number 139.K/HK.02/MEM.B/2021 concerning the Fulfillment of Domestic Coal Needs which is stipulated on August 4, 2021. In this regulation, the government will impose sanctions in the form of fines to export bans for coal producers. who are unable to meet DMO commitments.

The government sets the percentage of coal sales for domestic needs to coal business license holders at 25% of the approved annual coal production plan. DMO is specifically intended to meet the need for coal for the supply of electricity for public and private purposes, as well as raw materials or fuel for industry.

This rule applies to holders of a Mining Business Permit (IUP) for the Coal Production Operation stage, a Special Mining Business Permit (IUPK) for the Coal Production Operation stage, a Coal Mining Concession Work Agreement (PKP2B) for the Production Operation stage, and a Special Mining Business Permit. (IUPK) as Continuation of Contract/Agreement Operation.

Harga Melonjak, Menteri ESDM

Terbitkan Aturan Pengetatan

DMO Batu Bara

Rio Indrawan

K

EMENTERIAN Energi dan Sumber Daya Mineral (ESDM) menerbitkan aturan baru dalam rangka memperketat kewajiban peme-nuhan batu bara untuk kepentingan dalam negeri (Domestic Market Obligation/DMO), khususnya untuk pembangkit listrik. Pengetatan aturan main ini diwujudkan dengan menambah sanksi yang akan diterima produsen batu bara yang tidak memenuhi kewajibannya.

Beleid dalam bentuk Keputusan Menteri ESDM Nomor 139.K/HK.02/MEM.B/2021 tentang Pemenuhan Kebutuhan Batubara Dalam Negeri yang ditetapkan pada 4 Agustus 2021. Dalam aturan ini, pemerintah akan memberikan sanksi berupa denda hingga larangan ekspor bagi produsen batu bara yang tidak dapat memenuhi komitmen DMO. Pemerintah menetapkan persentase penjualan batu bara untuk kebutuhan dalam negeri kepada para pemegang izin usaha batu bara sebesar 25% dari rencana jumlah produksi batu bara tahunan yang sudah disetujui. DMO khususnya diperuntukan memenuhi kebutuhan batu bara bagi penyediaan tenaga listrik untuk kepentingan umum dan kepen-tingan sendiri, serta bahan baku atau bahan bakar untuk industri.

Aturan ini berlaku bagi pemegang Izin Usaha Pertambangan (IUP) tahap kegiatan Operasi Produksi Batu Bara, Izin Usaha Pertambangan Khusus (IUPK) tahap kegiatan Operasi Produksi Batu Bara, Perjanjian Karya Peng-usahaan Pertambangan Batu Bara (PKP2B) tahap Operasi Produksi, dan Izin Usaha Pertambangan Khusus (IUPK) sebagai Kelan-jutan Operasi Kontrak/ Perjanjian.

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Daily News Update Page 9 The prohibition on selling coal abroad will

apply until the business license holder fulfills the domestic demand for coal in accordance with the percentage of sales or in accordance with the sales contract. Except, for producers who do not have sales contracts with domestic coal users or whose coal specifications do not have a domestic market.

Later, the minister can determine other business entities to supply domestic coal needs.

In addition, producers who do not comply with the DMO provisions will also be subject to sanctions in the form of fines. In the fourth dictum letter b, it is stated that the fine is the amount of the difference in selling prices abroad minus the Coal Bench-mark Price for the supply of electricity for the public interest (DMO) multiplied by the volume of sales abroad in the amount of the obligation to fulfill domestic coal needs that are not fulfilled for Coal IUP-OP holders, Coal IUPK-OP, Production Operation PKP2B, and IUPK as Continuation of Contract/Agreement Operations that do not meet domestic coal demand for electricity supply for the public interest.

The fine also applies to companies that do not comply with the DMO other than for the supply of electricity and for the public interest. Meanwhile, companies that do not have sales contracts with domestic coal users or whose coal specifications do not have a domestic market, will be subject to an obligation to pay compensation funds in the amount of sales shortfall in accordance with the percentage of sales.

Provisions related to the prohibition of coal sales abroad and the imposition of fines or compensation funds are also applied to holders of Coal Transportation and Sales Permits who do not meet domestic coal needs in accordance with the sales contract.

Pelarangan penjualan batu bara ke luar negeri akan berlaku hingga pemegang izin usaha memenuhi kebutuhan batu bara dalam negeri sesuai dengan persentase penjualan atau sesuai dengan kontrak penjualan. Kecuali, bagi produsen yang tidak memiliki kontrak penjualan dengan pengguna batu bara di dalam negeri atau spesifikasi batu baranya tidak memiliki pasar dalam negeri.

Nantinya menteri bisa menetapkan badan usaha lain untuk memasok kebutuhan batu bara dalam negeri.

Selain itu, produsen yang tidak memenuhi ketentuan DMO tersebut juga akan dikenai sanksi berupa pembayaran denda.

Dalam diktum keempat huruf b, disebutkan bahwa denda sejumlah selisih harga jual ke luar negeri dikurangi Harga Patokan Batu-bara untuk penyediaan tenaga listrik untuk kepentingan umum (DMO) dikalikan volume penjualan ke luar negeri sebesar kewajiban pemenuhan kebutuhan batu bara dalam negeri yang tidak dipenuhi bagi pemegang IUP-OP Batubara, IUPK-OP Batubara, PKP2B tahap Operasi Produksi, dan IUPK sebagai Kelanjutan Operasi Kontrak/Perjanjian yang tidak meme-nuhi kebutuhan batu bara dalam negeri untuk penyediaan tenaga listrik untuk kepentingan umum.

Denda tersebut juga berlaku bagi perusahaan yang tidak memenuhi DMO selain untuk penye-diaan tenaga listrik dan untuk kepentingan umum. Sementara bagi perusahaan yang tidak memiliki kontrak penjualan dengan pengguna batu bara dalam negeri atau spesifikasi batu baranya tidak memiliki pasar dalam negeri, akan dikenai kewajiban pembayaran dana kompensasi sejumlah kekurangan penjualan sesuai dengan persentase penjualan.

Ketentuan terkait pelarangan penjualan batu bara ke luar negeri dan pengenaan denda atau dana kompensasi diberlakukan juga untuk pemegang Izin Pengangkutan dan Penjualan Batu bara yang tidak memenuhi kebutuhan batu bara dalam negeri sesuai dengan kontrak penjualan.

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Daily News Update Page 10 The Ministerial Decree also stipulates the

Selling Price of Coal for the Provision of Electric Power for Public Interest, which is US$ 70 per metric ton Free On Board (FOB) Vessel, which is based on the reference specification at 6,322 kcal/kg GAR calories, 8% Total Moisture, Total Sulfur 0.8%, and Ash 15%.

With this rule, the exemption from sanctions related to the 2020 coal DMO previously stated in the Ministerial Decree (Kepmen) of ESDM Number 255.K/30/ MEM/2020 regarding the fulfillment of domestic coal needs in 2021 is officially revoked.

Coal commodity is having the upper hand. How come? The reference coal price (HBA) was recorded to touch the highest position in the last 10 years. The August 2021 HBA recorded a surge to US$130.99 per tonne, the highest figure in more than a decade.

(RI)

Dalam Kepmen ini juga ditetapkan Harga Jual Batu bara untuk Penyediaan Tenaga Listrik untuk Kepentingan Umum yakni sebesar US$ 70 per metrik ton Free On Board (FOB) Vessel, yang didasarkan atas spesifikasi acuan pada kalori 6.322 kcal/kg GAR, Total Moisture 8%, Total Sulphur 0,8%, dan Ash 15%.

Dengan aturan ini, maka pembebasan sanksi terkait DMO batu bara 2020 yang sebelumnya tertuang dalam Keputusan Menteri (Kepmen) ESDM Nomor 255.K/ 30/MEM/2020 tentang pemenuhan kebu-tuhan batu bara dalam negeri 2021 resmi dicabut.

Komoditas batu bara sedang diatas angin. Bagaimana tidak? Harga batu bara acuan (HBA) tercatat menyentuh posisi tertinggi dalam 10 tahun terakhir. HBA Agustus 2021 tercatat melonjak hingga ke angka US$130,99 per ton, angka tertinggi lebih dari satu dekade terakhir. (RI)

Check out the strategies of a

number of issuers to deal with

rising coal prices

Reporter: Akhmad Suryahadi | Editor: Herlina Kartika Dewi

C

OAL prices are still smoldering. Citing Bloomberg data, coal prices are at the ICE Newcastle level for the September 2021 contract at the level of US$ 148.60 per tonne on Wednesday (4/8).

However, this increase in coal prices is an additional scourge for issuers who use this energy commodity as a source of fuel, one of which is PT Vale Indonesia Tbk (INCO).

Simak strategi sejumlah emiten

mengatasi kenaikan harga

batubara

Reporter: Akhmad Suryahadi | Editor: Herlina Kartika Dewi

H

ARGA batubara masih membara. Mengutip data Bloomberg, harga batubara berada di level ICE Newcastle untuk kontrak Septem-ber 2021 Septem-berada di level US$ 148,60 per ton pada perdagangan Rabu (4/8).

Meski demikian, kenaikan harga batubara ini menjadi momok tambahan bagi emiten yang menggunakan komoditas energi ini sebagai sumber bahan bakar, salah satunya PT Vale IndonesiaTbk (INCO).

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Daily News Update Page 11 Throughout the first semester of 2021,

INCO recorded coal consumption of 174,237 tons, a decrease of 13.47% from coal use in the same period last year of 201,365 tons.

However, the realized price of INCO's coal rose, from US$ 104.2 per tonne to US$ 120.1 per tonne.

In the second quarter of 2021, INCO consumed 81,773 tons of coal, down from consumption in the first quarter of 2021 of 92,464 tons. However, the realized price of coal used by INCO rose to US$ 126.3 from the previous US$ 114.7 in the first quarter. Vale Indonesia Finance Director Bernardus Irmanto said the decline in coal use was not due to price reasons, but due to technical issues occurring at the processing plant.

If seen, the decrease in coal consumption was compensated by the increase in consumption of high sulfur fuel oil (HSFO). “Energy needs remain the same. It's just that the energy that is planned to be produced by coal is replaced by HSFO for technical reasons," explained Irmanto. In the second quarter, INCO consumed 351,750 barrels of HFSO, up 21.81% from the realization of HFSO usage in the first quarter of 288,750 barrels.

Simultaneously, the average price of HFSO also increased, from US$ 48.51 in the first quarter to US$ 56.69 in the second quarter. Irmanto said that the increase in the prices of these two commodities would certainly push up production costs, which in turn would reduce production profits. However, he believes that the prospects for INCO's performance, which is supported by rising nickel prices, will still be bright.

Sepanjang semester I-2021, INCO mencatat konsumsi batubara sebanyak 174.237 ton, menurun 13,47% dari penggunaan batu-bara di periode yang sama tahun lalu sebesar 201.365 ton.

Meski demikian, harga terealisasi batubara INCO naik, dari semula US$ 104,2 per ton menjadi US$ 120,1 per ton.

Di kuartal II-2021, INCO mengonsumsi 81.773 ton batubara, turun dari konsumsi pada periode kuartal I-2021 sebesar 92.464 ton. Namun, harga realisasi batu-bara yang digunakan INCO naik menjadi US$ 126,3 dari sebelumnya US$ 114,7 di kuartal pertama.

Direktur Keuangan Vale Indonesia Bernardus Irmanto mengatakan, penu-runan penggunaan batubara bukan karena alasan harga, tetapi karena isu teknis yang terjadi di pabrik pengolahan.

Jika dilihat, penurunan konsumsi batubara dikompensasi dengan kenaikan konsumsi high sulphur fuel oil (HSFO).

“Secara kebutuhan energi tetap sama. Hanya saja energi yang rencananya diproduksi oleh batubara digantikan oleh HSFO karena alasan teknis,” terang Irmanto.

Pada kuartal kedua, INCO mengonsumsi 351.750 barel HFSO, naik 21,81% dari realisasi penggunaan HFSO pada kuartal pertama sebesar 288.750 barel.

Bersamaan, harga rata-rata HFSO pun mengalami kenaikan, dari US$ 48,51 di kuartal pertama menjadi US$ 56,69 di kuartal kedua.

Irmanto menyebut, kenaikan harga dua komoditas ini tentu mendorong kenaikan biaya produksi, yang kemudian akan mengurangi laba produksi. Namun, dia meyakini prospek kinerja INCO yang ditopang oleh kenaikan harga nikel masih akan cerah.

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Daily News Update Page 12 Irmanto admits that it is difficult to predict

future coal prices. However, as part of efforts to reduce carbon emissions from operations, INCO is conducting a study to replace coal and oil with environmentally friendly energy sources, such as LNG or bio mass.

"Hopefully at the end of this year we can get clarity from this study," explained Irmanto.

Cement issuers are also a sector that uses coal as fuel a lot. PT Indocement Tunggal Prakarsa Tbk (INTP) recorded an increase in cost of revenue by 6.44% to Rp 4.57 trillion. One component that experienced an increase was fuel and electricity, which rose 14.16% to Rp 1.83 trillion.

Indocement Director and Corporate Secretary Antonius Marcos said energy costs have increased mainly due to rising coal prices. In semester I-2021, as much as 43% of the total production costs come from energy costs.

Although energy costs have increased mainly due to the increase in coal prices, Marcos said a number of strategies were quite successful in maintaining INTP's performance.

The strategies implemented such as coal mixing (finding the most efficient coal price mix), more efficient factory operations, efficiency programs in all fields, as well as larger sales volumes made INTP's operating profit increase sharply by 69% in semester I-2021.

Kontan.co.id notes, INTP is also currently completing a refuse-derived fuel (RDF) reception facility project in Citeureup. This RDF facility will later process waste into fuel. INTP estimates that the project will be completed in the fourth quarter of this year.

Irmanto mengakui, sulit untuk

memprediksi-kan harga batubara ke depan. Namun, sebagai

bagian upaya mengurangi emisi karbon dari kegiatan operasi, INCO tengah melakukan studi untuk mengganti batubara dan minyak dengan sumber energi yang ramah ling-kungan, seperti LNG atau bio mass.

“Mudah-mudahan di akhir tahun ini kami bisa mendapatkan kejelasan dari studi ini,” terang Irmanto.

Emiten semen juga menjadi sektor yang banyak menggunakan batubara sebagai bahan bakar. PT Indocement Tunggal Prakarsa Tbk (INTP) mencatatkan kenaikan beban pokok pendapatan sebesar 6,44% menjadi Rp 4,57 triliun. Salah satu komponen yang mengalami kenaikan adalah bahan bakar dan listrik, yang naik 14,16% menjadi Rp 1,83 triliun.

Direktur dan Sekretaris Perusahaan Indo-cement Antonius Marcos mengatakan, biaya energi mengalami kenaikan terutama akibat kenaikan harga batubara. Pada semester I-2021, sebanyak 43% dari total biaya pro-duksi berasal dari biaya energi.

Meskipun biaya energi mengalami kenaikan terutama akibat kenaikan harga batubara, Marcos menyebut sejumlah strategi cukup berhasil menjaga kinerja INTP.

Strategi yang dilakukan seperti coal mixing (mencari campuran harga batubara ter-efisien), pengoperasian pabrik yang semakin efisien, program efisiensi di segala bidang yang dilakukan, serta volume penjualan yang lebih besar membuat laba usaha INTP meningkat tajam sebesar 69% pada semester I-2021.

Catatan Kontan.co.id, INTP juga saat ini sedang menyelesaian proyek fasilitas pene-rimaan refuse-derived fuel (RDF) di Citeureup. Fasilitas RDF ini nantinya akan mengolah limbah menjadi bahan bakar. INTP memperkirakan, proyek akan selesai di kuartal keempat tahun ini.

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Daily News Update Page 13 BRIDanareksa Sekuritas analyst Maria

Renata in her research, Wednesday (4/8) said that INTP was able to mitigate cost increases because this cement issuer uses coal from its inventory, uses alternative fuels, and using a higher portion of low calorific value (LCV) coal.

Maria noted, as of June 2021, 11.7% of INTP's fuel mixture came from alternative fuels. This percentage increased from 9.3% at the end of 2020. Meanwhile, the portion of low-calorie coal used reached 87% of total fossil fuels.

The estimated high coal price in the second semester of 2021, coupled with the debt repayment schedule for small -scale companies, has the potential to open up opportunities for cement players to increase the average selling price (ASP). Maria maintains the recommendation to buy INTP shares with a target price of Rp 15,400.

Another BRIDanareksa analyst, Stefanus Darmagiri, also recommends buying INCO shares with a target price of Rp 6,300.

Analis BRIDanareksa Sekuritas Maria Renata dalam risetnya, Rabu (4/8) mengatakan, INTP mampu memitigasi kenaikan biaya karena emiten semen ini menggunakan batubara dari persediaannya, menggunakan bahan bakar alternatif, dan menggunakan porsi batubara berkalori rendah atau low calorific value (LCV) yang lebih tinggi. Maria mencatat, per Juni 2021, sebanyak 11,7% dari campuran bahan bakar INTP berasal dari bahan bakar alternatif. Persentase ini meningkat dari 9,3% di akhir 2020. Adapun, porsi batubara kalori rendah yang digunakan mencapai 87% dari total bahan bakar fosil.

Tingginya perkiraan harga batubara di semester II-2021 dibarengi dengan jadwal pelunasan utang perusahaan kecil berskala kecil, berpotensi membuka peluang bagi pemain semen untuk meningkatkan harga jual rerata (ASP).

Maria mempertahankan rekomendasi beli saham INTP dengan target harga Rp 15.400. Analis BRIDanareksa lainnya yakni Stefanus Darmagiri juga merekomendasikan beli saham INCO dengan target harga Rp 6.300.

PTBA Aims to Produce 60

Million Tons per Year in 2026

P

T BUKIT Asam Tbk. (PTBA) has ambitions to increase coal production to a level of 60 million tons per year in 2026. PTBA President Director Suryo Eko Hadianto revealed that the company has planned production capacity growth to increase its coal sales in the next 5 years.

PTBA Bidik Produksi 60 Juta

Ton per Tahun di 2026

PT BUKIT Asam Tbk. (PTBA) berambisi

me-ningkatkan produksi batu bara hingga level 60 juta ton per tahun pada 2026 mendatang. Direktur Utama PTBA Suryo Eko Hadianto mengungkapkan perseroan telah merencana-kan pertumbuhan kapasitas produksi untuk meningkatkan penjualan batu baranya dalam 5 tahun ke depan.

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Daily News Update Page 14 "We plan for 2026, approximately we have

entered the production range of 48-60 million tons per year," said PTBA President Director Suryo Eko Hadianto in the BeyondTalk virtual event: Strategy to Boost Performance, Thursday (5/8/2021). In the development plan for the next 5 years, PTBA will also enter the energy business and expand the captive market for coal sales.

According to Suryo, the coal market competition will be tougher in the future, along with environmental issues. For this reason, mastery of the captive market is very important to face market competition. "The captive market is a market where it is clear that the goods only come from PTBA, the volume and price are fixed in the long term. There is no more competition because the contract is long-term. we will be safe," he said.

After revising the 2021 RKAB, PTBA targets production this year to reach 30 million tons from the previous set of 29.5 million tons. The increase in production targets is in line with the addition of the national production target set by the government from 550 million tons to 675 million tons in 2021.

Meanwhile, contacted separately, PTBA Corporate Secretary Apollonius Andwie C said that the realization of the company's coal production until the first semester of 2021 had reached 13.27 million tons, an increase of 10.6 percent compared to the same period last year, which was 12 million tons. Editor : Hadijah Alaydrus

"Kami rencanakan 2026, kira-kira kami sudah masuk kisaran produksi 48-60-an juta ton per tahun," ujar Direktur Utama PTBA Suryo Eko Hadianto dalam acara virtual BeyondTalk: Strategi Mendongkrak Kinerja, Kamis (5/8/2021).

Dalam rencana pengembangan 5 tahun ke depan, PTBA juga akan masuk ke bisnis energi dan membesarkan captive market untuk penjualan batu baranya.

Menurut Suryo, persaingan pasar batu bara akan semakin ketat ke depan, seiring adanya isu lingkungan hidup. Untuk itu, penguasaan captive market sangat penting untuk menghadapi persaingan pasar. "Captive market itu pasar yang sudah jelas barangnya hanya dari PTBA, volume dan harga sudah pasti secara jangka panjang. Tidak ada persaingan lagi karena kontraknya sudah jangka panjang. Kalau persaingan ketat, tapi kami sudah kuasai captive market yang besar, maka persaingan seperti apa itu kami akan aman," katanya.

Setelah merevisi RKAB 2021, PTBA menargetkan produksi tahun ini dapat mencapai 30 juta ton dari sebelumnya yang ditetapkan sebesar 29,5 juta ton. Peningkatan target produksi ini seiring adanya penambahan target produksi nasional yang ditetapkan pemerintah dari 550 juta ton menjadi 675 juta ton pada 2021.

Sementara itu, dihubungi secara terpisah, Sekretaris Perusahaan PTBA Apollonius Andwie C menyampaikan bahwa realisasi produksi batu bara perseroan sampai dengan semester I/2021 telah mencapai 13,27 juta ton atau naik 10,6 persen dibandingkan periode yang sama tahun lalu, yakni 12 juta ton. Editor : Hadijah Alaydrus

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Soaring Nearly 3%, Coal Price

Towards a New Record?

Hidayat Setiaji, CNBC Indonesia

T

HE PRICE of new coal soared sharply. Now the price has returned to above US$ 150/ton.

Yesterday, the price of coal in the ICE Newcastle market was recorded at US$ 152.75/ton. Up 2.79% from the previous day.

The previous day, the price of the black stone rose 1.5%. This means that in the last two days the price jumped 4.34%.

If this increase continues, it is unlikely that coal prices will break a new record. The previous record was set on July 19, 2021, when the price was at US$ 153.7/ton, the highest since at least 2008.

One of the factors driving the increase in coal prices is the increase in natural gas prices. On Friday (6/8/2021) at 08:11 WIB, the price of natural gas was at US$ 4,157/MMBtu, up 0.41%.

In the past week, natural gas prices shot up 6.21%. Over the past month, it has increased by 15.6%.

As a result, the cost of generating electricity powered by natural gas becomes expensive. In Europe, Refinitiv notes costs are EUR 42.15/MWh.

Meanwhile, the cost of coal generation is much cheaper at EUR 36.8/MWh. This makes coal back in demand because it is more competitive. The demand for coal rises, so does the price. CNBC INDONESIA RESEARCH TEAM (aji/aji)

Melesat Nyaris 3%, Harga Batu

Bara Menuju Rekor Baru?

Hidayat Setiaji, CNBC Indonesia

H

ARGA baru bara melonjak tajam. Kini harga sudah kembali ke atas US$ 150/ton. Kemarin, harga batu bara di pasar ICE Newcastle tercatat US$ 152,75/ton. Melesat 2,79% dari hari sebelumnya. Hari sebelumnya, harga si batu hitam naik 1,5%. Artinya dalam dua hari terakhir harga melonjak 4,34%.

Jika kenaikan ini berlanjut, maka buka tidak mungkin harga batu bara menembus rekor baru. Rekor sebelumnya tercipta pada 19 Juli 2021, kala itu harga berada di US$ 153,7/ton, tertinggi sejak setidaknya 2008.

Salah satu faktor pendorong kenaikan harga batu bara adalah harga gas alam yang juga naik. Pada Jumat (6/8/2021) pukul 08:11 WIB, harga gas alam berada di US$ 4,157/MMBtu, naik 0,41%.

Dalam sepekan terakhir, harga gas alam melesat 6,21%. Selama sebulan ke belakang, kenaikannya mencapai 15,6%. Akibatnya, biaya pembangkitan listrik bertenaga gas alam menjadi mahal. Di Eropa, Refinitiv mencatat biayanya men-capai EUR 42,15/MWh.

Sementara biaya pembangkitan dengan batu bara jauh lebih murah yaitu EUR 36,8/MWh. Ini membuat batu bara kembali diminati karena lebih kompetitif. Permin-taan batu bara naik, harga pun terungkit.

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Tin trading on ICDX in a bullish

trend

Reporter: Achmad Jatnika | Editor: Handoyo

T

HE INDONESIA Commodity and Derivatives Exchange (ICDX) released data on tin trading in Indonesia which showed a bullish trend throughout 2021.

In a release received by Kontan, Wednesday (5/8), according to Research & Development ICDX, the price of tin, which was around US$ 21,000 per ton at the beginning of the year, continued to climb up to penetrate to levels above US$ 35,000 per ton, at the close of the first semester of 2021.

In terms of volume, tin exports through ICDX also showed positive performance, with total export volume in semester I/2021 reaching 12,868.93 metric tons, an increase of 202% from semester II/2020. "The increasing demand for tin amid the issue of tight supply due to the Covid-19 pandemic which has spread again in various major tin producing countries, especially Asia, is still the main catalyst that drives tin prices," he said.

According to ICDX, Indonesia, which is the second largest tin producer in the world, has not experienced any problems due to the Covid-19 pandemic. "However, PT Timah Tbk as the largest tin producer in Indonesia, stated that it will maintain a stable production this year in the range of 31 thousand to 34 thousand tons (11/7)," he explained.

Another positive catalyst that lifted tin prices, according to him, was the Chinese electric vehicle company, Xpeng Motors,...

Perdagangan timah di ICDX

dalam tren bullish

Reporter: Achmad Jatnika | Editor:

Handoyo

I

NDONESIA Commodity and Derivatives Exchange (ICDX) merilis data perdagangan timah di Indonesia yang menunjukkan tren bullish di sepanjang tahun 2021.

Dalam rilis yang diterima Kontan, Rabu (5/8), menurut Research & Development ICDX, harga timah yang berkisar US$ 21.000 per ton di awal tahun terus menanjak naik hingga menembus ke level di atas US$ 35.000 per ton, di penutupan semester I/2021.

Dari sisi volume, ekspor timah yang dilakukan melalui ICDX juga menunjukkan kinerja yang positif, dengan total volume ekspor pada semester I/2021, mencapai 12.868,93 metrik ton, angka ini naik 202% dari semester II/2020.

“Meningkatnya permintaan timah di tengah isu ketatnya pasokan akibat pandemi Covid-19 yang kembali merebak di berbagai negara produsen utama timah, khususnya Asia, masih menjadi katalis utama yang menggerakkan harga timah,” katanya. Menurut ICDX, Indonesia yang merupakan produsen timah terbesar kedua di dunia tidak mengalami kendala akibat dari pandemi Covid-19. “Namun PT Timah Tbk selaku produsen timah terbesar di Indonesia, menyatakan bahwa akan tetap menjaga produksi tahun ini stabil di kisaran 31 ribu hingga 34 ribu ton (11/7),” jelasnya. Katalis positif lain yang mengangkat harga timah menurutnya adalah perusahaan kendaraan elektrik asal China, Xpeng Motors,...

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Daily News Update Page 17 Xpeng Motors, on July 31 officially

announcing the launch of its manufacturing plant in the Wuhan economic and technological development zone, with a projected production capacity of 100,000 vehicles per year.

"The news has also become a positive catalyst for tin prices, because tin commodities are widely applied in the soldering industry and also in batteries," he concluded.

Xpeng Motors, pada tanggal 31 Juli secara resmi mengumumkan peluncuran pabrik manufakturnya di zona pengembangan ekonomi dan teknologi Wuhan, dengan proyeksi kapasitas produksi mencapai 100.000 kendaraan per tahun.

“Berita tersebut turut menjadi katalis positif bagi harga timah, pasalnya komoditi timah banyak diaplikasikan dalam industri solder dan juga baterai,” pungkasnya.

China will restart coal mines in northern provinces as power demand

surges

Bloomberg News

C

HINA’s top planning authority authorized more shuttered coal mines to restart production as key policymakers seek to balance progress on climate goals against still surging power demand.

Operations will restart for a year at 15 coal mines across northern provinces including Shanxi and the Xinjiang region, delivering as much as about 44 million tons of coal, according to a statement by the National Development and Reform Commission. Authorities last week announced the restart of 38 coal mines in Inner Mongolia.

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Daily News Update Page 18 The decision comes as China seeks to tame thermal coal prices that have jumped about a third this year and hit a record in May amid supply disruptions and strong demand that’s the result of extreme summer heat and a rebound in industrial output.

It also follows last month’s recommendation from China’s top policymakers for an easing of aggressive steps to curb emissions as the nation seeks to meet power demand and maintain growth. Members of the Politburo have called for a coordinated, orderly approach to reach carbon neutrality, the official Xinhua News Agency reported.

Thermal coal futures on the Zhengzhou Commodity Exchange traded 0.5% higher at 894.2 yuan ($138.34) a ton at 11:00 a.m. local time. Prices are expected to stay elevated, with officials warning that China’s power shortage is poised to worsen.

Resources industry digs up export record

Nickolas Zakharia

A

USTRALIA’s resources industry has shipped $299.6 billion worth of exports during the 2020-21 financial year, according to new data from the Australian Bureau of Statistics.

Australia achieved a record-high trade surplus of $89 billion in the same period, with resources contributing its highest ever share of export revenue to the surplus at 66 per cent. The resources export record was made up of minerals, coal, metals, and oil and gas exports. Iron ore contributed 33 per cent of total export revenue at a record $151.9 billion.

Iron ore is Australia’s strongest export commodity, and has been strengthened by record demand and prices in the 2020-21 financial year.

In June, metalliferous ores increased by 8 per cent and delivered a fourth consecutive record month.

Metalliferous ores made up almost half of Australia’s export value in the June quarter at $20.49 billion, including $17.55 billion worth of iron ore.

Gold and copper also earned their highest export revenue at $28.4 billion and $11.5 billion respectively.

Coal mining generated $4.1 billion in export revenue for the June 2021 quarter compared with $3.6 billion in the same period last year.

“Australian mining has continued to support the nation’s export and economic success with new records set for total export value and a range of mineral commodities,” Minerals Council of Australia chief executive officer Tania Constable said.

“While metropolitan lockdowns continue to affect our economic growth, Australia’s regional industries like mining are keeping the nation strong and helping to fund the support required for individuals and businesses to get through the COVID-19 pandemic.”

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Daily News Update Page 19 Iron ore major Fortescue Metals Group shipped a record 182.2 tonnes of iron ore in the 2020-21 financial year, including 49.3 million tonnes in the June quarter.

“This was an outstanding performance despite the impact of wet weather, as well as COVID-19 restrictions requiring many of our team members to remain on site for extended periods during WA’s lockdowns,” Fortescue chief executive officer Elizabeth Gaines said in July.

“We greatly appreciate the ongoing cooperation of the entire Fortescue family as we continue to manage the impacts of COVID-19.”

Nornickel reports net debt increase in H1 2021 as environmental

damages weigh in

By Vladimir Basov

R

USSIAN mining giant Norilsk Nickel (Nornickel), the world’s largest palladium and high-grade nickel and a major producer of platinum and copper, reported today that for the six months ended June 30, 2021 (H1 2021), the company’s consolidated revenue increased 33% y-o-y to USD 8.9 billion.

The company attributed its higher H1 2021 revenue to higher metal prices and increase of palladium sales volumes, which have more than offset production losses caused by the temporary suspension of Oktyabrsky and Taimyrsky mines due to their flooding and Norilsk concentrator, following an incident in February this year.

Nornickel’s EBITDA increased threefold y-o-y to USD 5.7 billion due to higher revenue and lower base effect of H1 2020, when USD 2.1 billion environmental provision related to the diesel fuel spill in Norilsk industrial area in May 2020 was recognized.

The company’s free cash flow decreased 48% y-o-y to USD 1.4 billion driven by the reimbursement for the environmental damages in the amount of USD 2.0 billion and increased capital expenditures.

Net debt increased 64% y-o-y to USD 7.7 billion owing to lower free cash flow, payment of final dividend for 2020 and the share buyback, with net debt/EBITDA ratio increased marginally to 0.7x as of June 30, 2021.

Nornickel is a diversified mining and metallurgical company, the world’s largest producer of palladium and high-grade nickel and a major producer of platinum and copper. The company also produces cobalt, rhodium, silver, gold, iridium, ruthenium, selenium, tellurium, sulphur and other products. The production units of Norilsk Nickel Group are located at the Norilsk Industrial District, on the Kola Peninsula and Zabaykalsky Krai in Russia as well as in Finland.

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Glencore to return $2.8bn to shareholders in 2021

Reuters

G

LENCORE will return $2.8 billion to shareholders in 2021 after soaring commodity prices helped the mining and trading company to a record performance for the first six months of the year, it said on Thursday.

The London-listed company joins rivals Rio Tinto and Anglo American in declaring bonanza payouts after record half-year profits buoyed by a rebound in demand for commodities. “Following covid-19’s severe global impacts in early 2020, the subsequent economic recovery has seen prices of most of our commodities surging to multi-year highs,” said Glencore CEO Gary Nagle, who took the helm of the company in July.

Provided commodity prices hold up and net debt stays in check, Glencore could increase payouts further, chief financial officer Steven Kalmin said.

“We wouldn’t leverage the business further to pay distributions but we are happy to move towards 100% payout ratio given where the balance sheet is,” Kalmin told reporters on a call. Glencore cut debt to $10.6 billion from $15.8 billion at the end of 2020.

This was within its target range of $10-$16 billion, which the miner said it would need to reach before increasing dividends and in February, it recommended a total payout of $1.6 billion. It will now add a further $1.2 billion.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) rose 79% to a record $8.7 billion in the six months to June, compared with $4.8 billion a year earlier, broadly in line with analysts’ consensus.

The results surpass a previous high in 2018, when Glencore was again buoyed by a strong commodity rally.

Glencore’s trading or marketing division, which sets it apart from the other big diversified miners, cashed in on volatility in the market and recorded a EBIT of $1.8 billion in the period. The division is expected to hit the top end of its guidance of $2.2-$3.2 billion per annum. Tight supply

Prone to boom and bust, the mining sector is still recovering from a period of cost-cutting that halted exploration projects and acquisitions and has raised the risk of supply shortfalls as demand increases with economic recovery.

Nagle told analysts in a call the company favoured expanding existing projects over greenfield projects or acquisitions.

Glencore shares shed 1.2% by 1105 GMT, but still outperformed most of its peers that tracked wider stocks lower.

Analysts at Citi said the strong results “set the stage” for a bigger buyback at the year-end and that Glencore’s commodity mix was weighted towards the metals, such as cobalt and copper, needed for the transition to electric vehicles and other low emission technology.

(21)

Daily News Update Page 21 But investors focused on ESG (environmental, social and governance) factors have pressed for changes at mining companies.

Glencore in June bought the stakes it didn’t already own in its Colombia thermal coal mine from partners BHP plc and Anglo American, boosting its coal assets when others are looking to exit the sector. The deal should complete in the first half of 2022.

It has pledged to reach net-zero carbon emissions by 2050 as its output of fossil fuels declines over time and it says it is taking steps to reduce emissions.

Glencore said legal costs, including its own investigations, rose to $216 million during the first half from $56 million in the same year-ago period, having “provided for one specific narrow aspect of these investigations”. It did not provide further explanation.

The U.S. Department of Justice is scrutinising Glencore over alleged corruption in dealings in the Democratic Republic of Congo, Venezuela and Nigeria.

Any settlement would remove an important risk factor from Glencore’s stock, which is still well below its flotation price, analysts said. (By Clara Denina and Zandi Shabalala; Editing by David Goodman and Barbara Lewis)

US coal exports reach two-year high in June: Census

Author: Morgan Snook, Editor: Aastha Agnihotri

The US exported a combined total of 7.11 million mt thermal and metallurgical coal in June, the highest monthly level since June 2019, according to Census Bureau data released Aug. 5. Thermal coal accounted for 3.25 million mt and met coal 3.86 million mt of US coal exported in June, a year on year increase of 78.7% and 65.2%, respectively.

Metallurgical coal exports rise

US metallurgical coal exports climbed to a five-month high in June at 3.86 million mt, up 14.3% on the month and 65.2% on the year. Through June, the port at Norfolk, Virginia, originated the most US met coal exports at 11.74 million mt, up 3.9% on the year. Mobile, Alabama, originated the second-highest volume of US met coal exports for the same period, 4.1 million mt, up 13.4% on the year. From January through June, the bulk of US met coal was exported to China.

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Daily News Update Page 22 US met coal volumes headed for China increased ninefold from the year-ago period to 4.42 million mt in 2021. After China, the next highest volume of US met coal was exported to Brazil at 2.84 million mt, a 2.6% decrease from the same period last year.

Thermal coal exports

In June, most US thermal coal exports originated at the port of Baltimore at 1.04 million mt, the highest level for the corresponding month in over 9.5 years. New Orleans exported 922,108 mt of thermal coal in June, a three-year high for the corresponding month.

Since the start of 2021 through June, the lion's share of US thermal coal was headed to India at 7.22 million mt, up 89.9% from the year-ago period. The second-highest volume of US thermal coal was bound for South Korea at 2.16 million mt, down 23.9% on the year.

In June, 521,833 mt of thermal coal was destined for Japan, a 9.5-year high for the corresponding month and more than triple the year-ago month.

China’s coal conundrum

David Uren

I

N THE LEAD-UP to the 100th anniversary of the Chinese Communist Party last month, hundreds of Chinese coal mines were ordered to shut down to ensure the celebrations weren’t marred by any fatal accidents.

There had been a spate of coal- and gas-related tragedies, but the enforced closures led to shortages, contributing to rising prices for coal both for power stations and steel mills.

According to the South China Morning Post, 130 mines with a combined capacity of 186 million tonnes a year were closed in Shanxi, the biggest coal-producing province, while similar measures were implemented in other provinces.

The shutdown pushed prices to new peaks. Domestic Chinese thermal coal prices reached the equivalent of US$150 a tonne, and the metallurgical coal needed by steel mills rose above US$300 a tonne. Those prices are more than double the levels earlier this year.

The China Coal Transport and Distribution Association called on state-owned coal miners to restart their shuttered operations, and the National Development and Reform Commission authorised the release of 10 million tonnes of coal from the government’s strategic stockpile.

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Daily News Update Page 23 The coal market highlights the irreconcilable pressures confronting the Chinese government. It wants to lower carbon emissions in line with Xi Jinping’s promise to the United Nations last year of a peak in China’s emissions by 2030 and net-zero emissions by 2060. China’s embrace of ambitious climate targets was designed to get ahead of America on the eve of last year’s US presidential election.

The Chinese authorities also want to reduce the dependence of economic growth on real estate and infrastructure, which are pushing debts to unsustainable levels. There’s also concern that the unbridled growth of the steel industry as it responds to demand from these sectors is contributing to inflation by dragging commodity prices ever higher.

In pursuit of these goals, the government has ordered steel production this year not to exceed the 1.05 billion tonnes produced in 2020. It has also handed out some economic punishment to Australia by banning purchases of Australian coal, on which it had spent $14 billion in 2018–19.

On the other hand, the authorities are concerned that China’s growth would have slowed last year without the benefit of the government’s stimulus spending on real estate and infrastructure and they fear more of the same will be required over the year ahead. They worry that slow growth will raise unemployment and undermine popular support for the government.

For the moment, the concern about slowing growth appears to be winning. Steel prices have fallen in the wake of a politburo statement last Friday that ordered local governments to rein in their ‘campaign-style’ carbon-reduction plans, saying work to meet emissions targets should be ‘orderly and unified’.

Although the politburo’s comments are Delphic, the Financial Times cited the interpretation of Morgan Stanley that ‘With the politburo’s comment, we expect steel production controls will be more gradual paced going forward.’

Beijing believed that local authorities were taking the order to cut emissions and steel production too literally, particularly after steel production had surged 11% in the first six months of the year. Harsh cutbacks to steel production were pushing up the price of steel as construction and industrial firms tried to secure supplies. If the steel mills couldn’t respond to the demands of the infrastructure and property-development industries, China would struggle to reach its growth targets.

University of Peking finance professor Michael Pettis says it’s important to distinguish between what Beijing refers to as ‘high-quality growth’ driven by industrial output and household consumption and ‘residual growth’, which is the infrastructure and real estate spending unleashed whenever the central government’s growth targets look like being missed.

In a newsletter, he says there has been a fierce debate over whether Beijing should be more concerned by rising debts or slowing growth. He argues that the ‘residual growth’ costs more to the economy than it delivers and brings no gain to living standards. But he says the central government is likely to force local governments to increase their support for property and infrastructure developments over coming months, pushing GDP growth towards 8% this year and raising debt levels to new heights.

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Daily News Update Page 24 Reducing carbon emissions will become a lower priority, and China’s steel mills and power stations will continue to struggle with shortages of their key commodities, coal and iron ore. It may be reading too much into Friday’s politburo statement, but it’s striking that at the meeting of G20 climate and energy ministers in Italy last month, China joined India and Russia in opposing a resolution to mandate the shutdown of coal-fired power and to ban international finance of coal mining.

The stance taken by the trio has cast a shadow over hopes for a radical strengthening of global climate action at the Glasgow climate conference in three months. China’s burst of good intentions last year on curbing emissions may be confronting economic reality.

The decision to ban Australian coal, which has been enforced since last October, has been problematic for both China’s steel mills and its power stations. Although the steel mills have been able to replace Australian coal with Mongolian coal, the latter is lower quality and industry analysts say its use without blending with the high-quality coal that Australia is known for will result in damage to the coke ovens at the major mills and ultimately the loss of steel-making capacity.

China’s biggest source of thermal coal imports, in Australia’s absence, has been Indonesia, but its production has been hampered by heavy rainfall, and supplies from Russia and South Africa have also been interrupted.

A drought in southern China cut the availability of hydro power. Although China has been rolling out wind and solar power, their intermittent supply means the country has been relying more heavily on coal to meet the surge in demand for power over the summer.

For both metallurgical and thermal coal, the ban on Australian imports has resulted in a two-tier market, with Chinese buyers having to pay more for coal than the rest of the world. Australia is having to settle for lower prices, but has largely succeeded in replacing China as a customer.

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