TABLE OF CONTENTS. No. Title Media Source Page

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Daily News Update Page 1

Holders of Mining Business Permits (IUP) for Metal Mineral Production Operations and Special Mining Business Permits (IUPK) for Metal Mineral Production Operations that do not meet the percentage of physical progress in the construction of refining facilities of at least 90% in two periods of evaluation of the physical progress of refining facilities construction since the stipulation of Presidential Decree No. 12 of 2020 concerning the Determination of Non-Natural Disasters for the Spread of Covid-19 as a National Disaster, is subject to administrative fines taking into account the impact of the Covid-19 pandemic. The administrative fines referred to include:

a. imposed from the cumulative value of metal mineral sales abroad for 6 (six) months in 2 (two) periods of evaluation of the physical progress of the construction of refining facilities since the stipulation of Presidential Decree Number 12 of 2020 concerning Determination of Non-Natural Disasters for the Spread of Corona Virus Disease 2019 (Covid-19) as a National Disaster; and

b. not imposed on the type of purification facility construction activities affected by the Corona Virus Disease 2019 (Covid-19) pandemic based on the report document of the verification of the physical progress of the purification facility construction by the Independent Verifier.

Types of construction activities for purification facilities affected by the Corona Virus Disease 2019 (Covid-19) pandemic consist of:

a. Procurement, with sub-activities: 1. Fabrication; and

2. Delivery;

Berikut bunyi lengkap Keputusan Menteri ESDM tersebut:

Pemegang Izin Usaha Pertambangan (IUP) Operasi Produksi Mineral Logam dan Izin Usaha Pertambangan Khusus (IUPK) Operasi Produksi Mineral Logam yang tidak memenuhi persentase kemajuan fisik pembangunan fasilitas pemurnian paling sedikit 90% pada dua periode evaluasi kemajuan fisik pembangunan fasilitas pemurnian sejak ditetapkannya Keputusan Presiden Nomor 12 Tahun 2020 tentang Penetapan Bencana Nonalam Penyebaran Covid-19 sebagai Bencana Nasional, dikenakan denda administratif dengan mempertimbangkan dampak pandemi Covid-19.

Denda administratif yang dimaksud antara lain:

a. dikenakan dari nilai kumulatif penjualan mineral logam ke luar negeri selama 6 (enam) bulan pada 2 (dua) periode evaluasi kemajuan fisik pembangunan fasilitas pemurnian sejak ditetapkannya Keputusan Presiden Nomor 12 Tahun 2020 tentang Penetapan Bencana Nonalam Penyebaran Corona Virus Disease 2019 (Covid-19) sebagai Bencana Nasional; dan b. tidak dikenakan terhadap jenis kegiatan pembangunan fasilitas pemurnian yang terdampak pandemi Corona Virus Disease 2019 (Covid-19) berdasarkan dokumen laporan hasil verifikasi kemajuan fisik pembangunan fasilitas pemurnian oleh Verifikator Independen.

Jenis kegiatan pembangunan fasilitas pemurnian yang terdampak pandemi Corona Virus Disease 2019 (Covid-19) terdiri atas:

a. Procurement, dengan subkegiatan: 1. Fabrication; dan

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b. Construction, with sub-activities: 1. Mobilization of Materials, Equipment,

Tools, and/or Manpower;

2. Temporary Facility for Construction; 3. Preparation of Work;

4. Work Execution; and

5. Completion of Work and/or Mechanical Completion; and

c. Commissioning, with sub-activities: 1. Mobilization of Equipment, Tools, and/

or Manpower; and

2. Mobilization of Commissioning Materials.

The administrative fine as intended is calculated by the formula as following: Fine = ((90% - A - B)/90%) x 20% x C Information:

A: percentage of cumulative achievement of physical progress in the construction of purification facilities according to the results of verification by the Independent Verifier in the evaluation period;

B: the total weight of the percentage of refining facility construction activities affected by the Covid-19 pandemic according to the results of verification by the Independent Verifier in the evaluation period; and

C: cumulative value of sales of metallic minerals abroad in the evaluation period. The report on the results of verification of the physical progress of the refining facility construction by an Independent Verifier must be submitted by the Holder of Metal Mineral Production Operation IUP and Metallic Mineral Production Operation IUPK to the Minister of ESDM through the Director General of Mineral and Coal no later than 30 calendar days after this Ministerial Decree comes into force.

b. Construction, dengan subkegiatan: 1. Mobilization of Material, Equipment,

Tools, and/or Manpower;

2. Temporary Facility for Construction; 3. Preparation of Work;

4. Work Execution; dan

5. Completion of Work and/or Mechanical Completion; dan

c. Commissioning, dengan subkegiatan: 1. Mobilization of Equipment, Tools, and/

or Manpower; dan

2. Mobilization of Commissioning Material.

Denda administratif sebagaimana di-maksud dihitung dengan formula sebagai berikut:

Denda = ((90% - A - B)/90%) x 20% x C Keterangan:

A: persentase capaian kumulatif kemajuan fisik pembangunan fasilitas pemurnian sesuai hasil verifikasi oleh Verifikator Independen pada periode evaluasi;

B: total bobot persentase atas kegiatan pembangunan fasilitas pemurnian yang terdampak pandemi Covid-19 sesuai hasil verifikasi oleh Verifikator Independen pada periode evaluasi; dan

C: nilai kumulatif penjualan mineral logam ke luar negeri pada periode evaluasi.

Laporan hasil verifikasi kemajuan fisik pembangunan fasilitas pemurnian oleh Verifikator Independen wajib disampaikan Pemegang IUP Operasi Produksi Mineral Logam dan IUPK Operasi Produksi Mineral Logam kepada Menteri ESDM melalui Direktur Jenderal Mineral dan Batu Bara paling lambat 30 hari kalender sejak Keputusan Menteri ini mulai berlaku.

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The administrative fines referred to are deposited in stages to the state treasury through the perception bank and must be settled no later than 6 (six) months from the date of issuance of the order regarding payment of administrative fines for delays in the construction of refining facilities. In the event that the holders of IUP OP Metal Minerals and IUPK OP Metal Minerals do not submit a report on the results of verification of the physical progress of the refining facility construction within the period referred to, administrative fines will still be imposed in accordance with the provisions of the legislation.

This Ministerial Decree comes into force on the date of stipulation, June 4, 2021. (wia)

Denda administratif sebagaimana di-maksud disetorkan secara bertahap ke kas negara melalui bank persepsi dan wajib diselesaikan paling lambat 6 (enam) bulan sejak tanggal diterbitkannya surat perintah mengenai pembayaran denda administratif keterlambatan pembangunan fasilitas pemurnian.

Dalam hal pemegang IUP OP Mineral Logam dan IUPK OP Mineral Logam tidak menyampaikan laporan hasil verifikasi kemajuan fisik pembangunan fasilitas pemurnian dalam jangka waktu sebagai-mana dimaksud, denda administratif tetap dikenakan sesuai dengan ketentuan per-aturan perundang-undangan.

Keputusan Menteri ini mulai berlaku pada tanggal ditetapkan, 4 Juni 2021. (wia)

Until May Minerba PNBP Has

54.5% of Target

Rio Indrawan

T

HE GOVERNMENT noted that until May 2021, Non-Tax State Revenue (PNBP) for the mineral and coal sub-sector reached Rp. 22.34 trillion or reached 54.5% of the target set at Rp. 39.1 trillion.

Ridwan Djamaluddin, Director General of Mineral and Coal at the Ministry of Energy and Mineral Resources (ESDM), said that apart from being supported by commodity prices which tended to be good at the beginning of the year until now, the use of the Electronic Non-Tax State Revenue (e-PNBP) application is also claimed to increase revenues from the mineral and coal.

"The use of e-PNBP that we use is very helpful and creates better governance," said Ridwan, Thursday (10/6).

Hingga Mei PNBP Minerba

Sudah 54,5% dari Target

Rio Indrawan

P

EMERINTAH mencatat hingga Mei 2021 Penerimaan Negara Bukan Pajak (PNBP) subsektor mineral dan batu bara mencapai Rp22,34 triliun atau mencapai 54,5% dari target yang ditetapkan sebesar Rp39,1 triliun. Ridwan Djamaluddin, Direktur Jenderal Minerba Kementerian Energi dan Sumber Daya Mineral (ESDM), mengungkapkan selain didukung oleh harga komoditas yang cenderung baik pada awal tahun hingga kini, penggunan aplikasi Elektronik Penerimaan Negara Bukan Pajak (e-PNBP) juga diklaim meningkatkan penerimaan sektor mineral dan batu bara.

“Penggunaan e-PNBP yang kami gunakan sangat membantu dan membuat tata kelola yang lebih baik,” kata Ridwan, Kamis (10/6).

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Ridwan said the Covid-19 pandemic throughout 2020 had caused the price of mineral and coal commodities to plummet. Minerba PNBP also fell to Rp 34.6 trillion in 2020 from the previous Rp 45.49 trillion. With the e-PNBP, state revenues can be calculated automatically based on volume and quality. After the finalization process, the company can carry out sales activities.

e-PNBP Minerba has three main functions, namely: calculating, verifying, and paying PNBP for minerals and coal so that mining companies can calculate and pay PNBP for coal online faster and more precisely in accordance with regulations.

For information, the e-PNBP Minerba application is a web-based online application that is able to produce an accurate calculation of company liabilities along with an application for payment and settlement of Minerba PNBP which was launched in 2018. This service is an integration of the SIMPONI service at the Ministry of Finance where epayments -PNBP can be paid through this application. "In detail, this application can calculate fixed fees, royalties, area size, production amount, mining commodity prices, to show sales objectives," said Ridwan. (RI)

Ridwan mengatakan pandemi Covid-19 sepanjang 2020 telah mengakibatkan harga komoditas minerba anjlok. PNBP minerba pun turun menjadi Rp34,6 triliun pada 2020 dari sebelumnya bisa mencapai Rp45,49 triliun. Dengan adanya e-PNBP maka penerimaan negara dapat dihitung otomatis berdasarkan volume beserta kualitasnya. Setelah proses finalisasi, perusahaan dapat melakukan aktivitas penjualan.

e-PNBP Minerba memiliki tiga fungsi utama yaitu: menghitung, memverifikasi, dan mem-bayar PNBP mineral dan batubara sehingga per-usahaan pertambangan dapat melakukan perhi-tungan dan pembayaran PNBP minerba secara online lebih cepat dan lebih tepat sesuai dengan regulasi.

Sebagai informasi, aplikasi e-PNBP Minerba adalah aplikasi online berbasis web yang mampu menghasilkan perhitungan kewajiban perusahaan yang akurat beserta aplikasi untuk pembayaran dan pelunasan PNBP Minerba yang diluncurkan pada tahun 2018. Layanan ini merupakan sebuah integrasi dari layanan SIMPONI pada Kementerian Keuangan yang dimana pembayaran e-PNBP dapat dibayarkan melalui aplikasi ini.

“Secara rinci, aplikasi ini dapat menghitung iuran tetap, royalti, luas wilayah, jumlah produksi, harga komoditas tambang, hingga menunjukkan tujuan penjualan,” kata Ridwan.(RI)

Coal prices are considered to

still have the potential to rise

Reporter: Achmad Jatnika | Editor: Tendi

Mahadi

T

HE PRICE of ICE Newcastle coal contract in July 2021 again rose to the level of US$ 118.50 per metric ton on Wednesday (9/6). During June 2021,...

Harga batubara dinilai masih

berpotensi naik

Reporter: Achmad Jatnika | Editor: Tendi Mahadi

H

ARGA batubara ICE Newcastle kontrak Juli 2021 kembali naik ke level US$ 118,50 per metrik ton di hari Rabu (9/6). Selama bulan Juni 2021,...

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During June 2021, the price of ICE Newcastle coal in July contract rose 5.8% from the level of US$ 112 per metric ton at the end of May.

On a year to date (ytd) basis, the price of coal rose 47.94%, from US$ 80.10 per metric ton at the end of 2020. According to Traderindo.com Founder Wahyu Laksono, the current increase in coal follows energy trends, such as rising oil prices. remained at the level of US$ 70 per barrel.

Fundamentally, according to him, the stimulus is still the source of the increase in coal, with a lot of money in circulation. In addition, he sees that the strong demand for electricity in China coupled with the slowdown in local coal production combined with Australia's coal import ban, creates the perfect conditions for coal to continue rising.

He also considered that the Chinese authorities were exploring ways to control the spike in energy costs, including by limiting coal prices. The supply constraint is precisely the problem of investment policy even though demand is still high. "Coal experienced a dramatic spike in demand just when several major miners were hit by production problems, triggering a spike in prices from China to Europe and the US," Wahyu told Kontan, Thursday (10/6).

Another thing is that sweltering temperatures in North Asia are increasing demand for air conditioning, adding to already strong demand due to the industry's recovery from the pandemic. Other problems faced also such as mine safety in China, and high rainfall in Indonesia hampered production.

"The price spike is happening right now in the midst of an existential crisis for coal, with climate policies making it difficult to invest in new projects," he said.

Selama bulan Juni 2021, harga batubara ICE Newcastle kontrak Juli naik 5,8% dari level US$ 112 per metrik ton di akhir bulan Mei. Secara year to date (ytd) harga batubara ini naik 47,94%, dari US$ 80,10 per metrik ton di akhir tahun 2020. Menurut Founder Traderindo.com Wahyu Laksono, naiknya batubara saat ini mengikuti tren energi, seperti harga minyak yang tetap di level US$ 70-an per barel.

Secara fundamental, menurutnya stimulus masih menjadi sumber dari naiknya batu-bara, dengan banyaknya uang yang beredar. Selain itu, ia melihat bahwa permintaan yang kuat untuk listrik di China ditambah dengan perlambatan produksi batubara lokal yang dikombinasikan dengan larangan impor batubara Australia, menciptakan kondisi yang sempurna bagi batubara untuk terus naik.

Ia juga menilai bahwa pihak berwenang China yang sedang menjajaki cara untuk mengen-dalikan lonjakan biaya energi, termasuk dengan membatasi harga batubara. Terham-batnya pasokan justru oleh masalah kebijakan investasi padahal permintaan masih tinggi. “Batubara mengalami lonjakan permintaan yang dramatis tepat ketika beberapa penambang utama dilanda masalah produksi, memicu lonjakan harga dari China ke Eropa dan AS,” kata Wahyu kepada Kontan, Kamis (10/6).

Hal lain juga karena suhu yang terik di Asia Utara yang meningkatkan kebutuhan AC, menambah permintaan yang sudah kuat karena pemulihan industri dari pandemi. Masalah lain yang dihadapi juga seperti keamanan tambang di China, dan curah hujan yang tinggi di Indonesia menghambat produksi.

“Lonjakan harga terjadi saat ini di tengah krisis eksistensi untuk batu bara, dengan kebijakan iklim yang mempersulit investasi dalam proyek-proyek baru,” ujarnya.

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Wahyu sees that coal prices will shift slightly back up. In the medium term, he sees that coal will still move in the range of US$ 90-US$ 130 per metric ton.

In the long term, he sees it will move in the range of US$ 50-US$ 140 per metric ton. Meanwhile, the annual consolidation moves in the range of US$ 80-US$ 90 per metric ton.

Wahyu melihat bahwa harga batubara akan sedikit bergeser kembali naik. Untuk jangka menengah ia melihat bahwa batubara masih akan bergerak di rentang US$ 90-US$ 130 per metrik ton.

Jangka panjang, ia melihat akan bergerak di rentang US$ 50-US$ 140 per metrik ton. Sedangkan untuk konsolidasi tahunan ber-gerak di rentang US$ 80-US$ 90 per metrik ton.

RI Mining Investment Sluggish

When Commodities Boom, How

come?

Anisatul Umah, CNBC Indonesia

I

NVESTMENT in the mineral and coal mining sector (minerba) in Indonesia actually sluggish in the midst of the commodities boom or the current surge in the prices of a number of mining commodities.

Based on data from the Directorate General of Mineral and Coal (Ditjen Minerba) of the Ministry of Energy and Mineral Resources (ESDM), as of May 2021, investment in the mineral and coal sector has only reached US$ 1.39 billion or around Rp. 20 trillion (assuming an exchange rate of Rp. 14,400 per US$). ). This realization figure has only reached 23.24% of this year's target set at US$ 5.98 billion or around Rp 86 trillion.

So, what is the cause of the sluggish investment in the mining sector? Why does the increase in commodity prices such as coal, gold, nickel, and copper not encourage miners to invest?

Investasi Tambang RI Melesu

Saat Commodities Boom, Kok

Bisa?

Anisatul Umah, CNBC Indonesia

I

NVESTASI di sektor tambang mineral dan batu bara (minerba) Indonesia malah melesu di tengah adanya momen

commodities boom atau lonjakan harga

sejumlah komoditas tambang saat ini. Berdasarkan data Direktorat Jenderal Mineral dan Batu Bara (Ditjen Minerba) Kementerian Energi dan Sumber Daya Mineral (ESDM), per Mei 2021 investasi di sektor minerba baru mencapai US$ 1,39 miliar atau sekitar Rp 20 triliun (asumsi kurs Rp 14.400 per US$). Angka realisasi ini baru mencapai 23,24% dari target tahun ini yang ditetapkan sebesar US$ 5,98 miliar atau sekitar Rp 86 triliun.

Lantas, apa yang menjadi penyebab lesunya investasi di sektor tambang ini? Mengapa kenaikan harga komoditas seperti batu bara, emas, nikel, hingga tembaga tidak menggairahkan penambang untuk berinvestasi?

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The Directorate General of Mineral and Coal in a statement to CNBC Indonesia said that there were several factors that caused the low realization of this mining investment, one of which was because mining companies postponed capital expenditures at the beginning of the year and would shift to the middle of this year. The government also acknowledged that in the first four months, from January to April 2021, Indonesia's mining investment could reach 25% of this year's full investment target. But in fact, the realization of investment is still lower than the initial target.

"This is due to the company's plan to postpone its capital expenditures at the beginning of the year and will start in the middle of the year, and some even spend it in the 4th quarter," said the Directorate General of Mineral and Coal in a statement to CNBC Indonesia, Thursday (10/06/ 2021).

The obstacles faced by the company to invest at the beginning of the year were mentioned because the permits related to other ministries/institutions had not yet been completed.

"The obstacles reported by several companies are waiting for the completion of supporting permits, especially those related to other sectors," said the statement from the Directorate General of Mineral and Coal.

However, his party will continue to facilitate the resolution of obstacles faced by the company and continue to monitor future performance.

"The strategy of the Directorate General of Mineral and Coal in the future will continue to facilitate the company's investment performance until the end of the year by monitoring and facilitating the resolution of problems."

Direktorat Jenderal Minerba dalam sebuah pernyataan kepada CNBC Indonesia mengatakan bahwa ada beberapa faktor yang menyebabkan rendahnya realisasi investasi tambang ini, salah satunya yaitu karena perusahaan tambang menunda belanja modal di awal tahun dan akan bergeser ke pertengahan tahun ini.

Pemerintah pun mengakui seharusnya dalam empat bulan pertama ini, Januari-April 2021 investasi tambang RI bisa mencapai 25% dari target investasi penuh tahun ini. Namun nyatanya, realisasi investasi masih lebih rendah dari target awal.

"Hal tersebut dikarenakan rencana perusahaan yang menunda belanja modalnya di awal tahun dan akan dimulai pada pertengahan tahun, dan bahkan ada yang baru membelanjakannya di triwulan ke-4," ungkap Ditjen Minerba dalam sebuah pernyataan kepada CNBC Indonesia, Kamis (10/06/2021).

Adapun kendala yang dihadapi perusahaan untuk berinvestasi di awal tahun disebut-kan karena belum tuntasnya perizinan yang berkaitan dengan kementerian/ lembaga lain.

"Kendala yang dilaporkan beberapa perusahaan yaitu menunggu selesainya perizinan pendukung, khususnya terkait dengan sektor lain," ungkap pernyataan Ditjen Minerba.

Namun demikian, pihaknya akan terus memfasilitasi penyelesaian kendala yang dihadapi perusahaan dan tetap mengawasi kinerja ke depannya.

"Strategi Ditjen Minerba ke depan akan terus memfasilitasi kinerja investasi per-usahaan tersebut sampai dengan akhir tahun dengan melakukan monitoring dan fasilitasi penyelesaian kendala."

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The Directorate General of Mineral and Coal is also optimistic that this investment will continue to increase along with the increase in production until the end of this year.

"The low investment in Q1 (quarter) 2021 reflects the beginning of the acceleration of investment achievement, which will increase in line with the production activity curve until the end of the year," he said.

Previously, Acting (Plt) Executive Director of the Indonesian Mining Association (IMA) Djoko Widajatno Soewanto said, there are several things that affect investment in the natural resources (SDA) sector.

Some of these factors include investment requirements regarding the environment, social responsibility, interest rates, economic growth (GDP/GDP), utilities, bureaucracy, quality of human resources, regulations, political stability and security, as well as socio-cultural factors.

According to him, Indonesia has the highest tax rate in Southeast Asia, so Indonesia is the last choice to invest. In addition, he added, the government also plans to increase the Value Added Tax (VAT) and royalties from gold and coal commodities.

"This hinders investment in the extractive industry. Not to mention, banks and members of the G20, are reluctant to fund fossil energy projects, making Indonesia move towards transitional energy," he explained.

He also revealed several things that made investment in the mining sector slow, including the existence of global require-ments in the form of Environmental, Social, and Governance (ESG), dubious regula-tions, waste problems, environmental permits, and the Borrow-to-Use Forest Area Permit (IPPKH).

Ditjen Minerba pun optimistis bila investasi ini akan terus meningkat seiring dengan peningkatan produksi hingga akhir tahun ini.

"Rendahnya investasi di TW (triwulan) 1 2021 merefleksikan awal akselerasi capaian investasi yang akan meningkat seiring kurva kegiatan produksi sampai dengan akhir tahun," tandasnya.

Sebelumnya, Pelaksana Tugas (Plt) Direktur Eksekutif Asosiasi Pertambangan Indonesia (Indonesia Mining Association/ IMA) Djoko Widajatno Soewanto mengata-kan, ada beberapa hal yang memengaruhi investasi di bidang sumber daya alam (SDA).

Beberapa faktor tersebut antara lain per-syaratan investasi mengenai lingkungan hidup, tanggung jawab sosial, suku bunga, pertumbuhan ekonomi (GDP/PDB), utilitas, birokrasi, kualitas SDM, regulasi, stabilitas politik dan keamanan, serta faktor sosial budaya.

Menurutnya, Indonesia memiliki besaran pajak tertinggi di Asia Tenggara, sehingga Indonesia menjadi pilihan terakhir untuk berinvestasi. Di samping itu, imbuhnya, pemerintah juga berencana menaikkan Pajak Pertambahan Nilai (PPN) dan royalti dari komoditas emas dan batu bara.

"Ini menghambat investasi di industri ekstraktif. Belum lagi, perbankan dan anggota G20, mulai enggan mendanai proyek energi fosil, membuat Indonesia menuju energi transisi," jelasnya.

Dia pun membeberkan beberapa hal yang membuat investasi di sektor pertam-bangan lambat, antara lain adanya per-syaratan global berupa Environmental,

Social, and Governance (ESG), regulasi yang

meragukan, masalah limbah, izin ling-kungan, dan Izin Pinjam Pakai Kawasan Hutan (IPPKH).

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"With the existence of the Job Creation Law, the regulations are getting longer, so that legal certainty and doing business in the extraction industry have not been felt," he said.

Meanwhile, Executive Director of the Indonesian Coal Mining Association (APBI) Hendra Sinadia said that each company's investment plan has a different schedule. "Not all of it is 100% disbursed in the first quarter. It also depends on other factors, such as commodity prices, permits, regulations, and others," he said. (wia)

"Dengan adanya UU Cipta Kerja semakin panjang regulasinya, sehingga kepastian hukum dan berusaha di bidang industri ekstraksi belum dirasakan," tegasnya.

Sementara itu, Direktur Eksekutif Asosiasi Pertambangan Batu Bara Indonesia (APBI) Hendra Sinadia mengatakan, rencana investasi masing-masing perusahaan punya jadwal yang berbeda-beda.

"Tidak semuanya 100% dikucurkan di kuartal I. Juga sangat tergantung faktor-faktor lain, seperti misalnya harga komoditas, perizinan, regulasi, dan lain-lain," ujarnya. (wia)

BUMI won top mid cap award

for mining issuers in GCG from

IICD

Reporter | Editor: Khomarul Hidayat

P

T BUMI Resources Tbk (BUMI) won an award from the Indonesian Institute for Corporate Directorship (IICD).

BUMI ranks highest in the mining sector and ranks 15th out of 50 companies included in the mid-capitalization (mid cap) public listed company 2021 category. This award was given by IICD at The 12th IICD Corporate Governance Award 2021 in Jakarta, 31 May 2021.

The event was also attended by the Vice President of the Republic of Indonesia for the 2009-2014 period, Boediono who gave closing remarks, IICD Chairman Sigit Pramono and company representatives. This award is given to issuers who have implemented good corporate governance (GCG) practices in the previous year and are not related to serious cases that are contrary to GCG principles.

BUMI raih penghargaan top mid

cap emiten tambang dalam GCG

dari IICD

Reporter | Editor: Khomarul Hidayat

P

T BUMI Resources Tbk (BUMI) meraih penghargaan dari Indonesian Institute for Corporate Directorship (IICD).

BUMI menempati peringkat tertinggi dari sektor pertambangan dan peringkat ke 15 dari 50 perusahaan yang termasuk dalam kategori mid capitalization (mid cap) public listed company 2021. Penghargaan ini diberikan IICD dalam acara The 12th IICD Corporate Governance Award 2021 di Jakarta, 31 Mei 2021 lalu.

Dalam acara tersebut turut hadir Wakil Presiden RI periode 2009-2014 Boediono yamg memberikan sambutan penutup, Chairman IICD Sigit Pramono dan perwakilan perusahaan. Penghargaan ini diberkan kepada emiten-emiten yang telah mengimplementasikan praktik tata kelola perusahaan yang baik atau good corporate governance (GCG) pada tahun sebelumnya dan tidak terkait kasus serius yang bertentangan dengan prinsip-prinsip GCG.

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There are two groups assessed, namely 100 issuers with the largest market capitalization (big cap) and 100 issuers with medium market capitalization (mid cap).

As for the use of the assessment method based on the Asean CG Scorecard conducted by 10 qualified IICD assessors. Adika Nuraga Bakrie, Deputy President Director of BUMI appreciates the achievements that have been made by BUMI in improving corporate governance practices.

"We are very grateful for the prestigious awards given from independent institutions such as IICD. This will spur BUMI to continue to work hard to improve business success and corporate accountability and become a better public company," said Adika in a written statement, Thursday (10/6).

Terdapat dua kelompok yang dinilai, yaitu 100 emiten dengan market kapitalisasi terbesar (big cap) dan 100 emiten dengan market kapitalisasi menengah (mid cap). Adapun penggunaan metode penilaian ber-dasarkan Asean CG Scorecard yang dilaku-kan oleh 10 assessor IICD yang mumpuni. Adika Nuraga Bakrie, Deputy President Director BUMI mengapresiasi pencapaian yang telah dilakukan BUMI dalam mening-katkan praktik-praktik corporate gover-nance.

"Kami sangat berterima kasih terhadap penghargaan bergengsi yang diberikan dari lembaga independen seperti IICD. Ini akan memacu BUMI agar terus bekerja keras untuk meningkatkan keberhasilan usaha dan akuntabilitas perusahaan serta menjadi perusahaan terbuka yang lebih baik lagi," ujar Adika dalam keterangan tertulis, Kamis (10/6).

Indonesia tin miner Timah says meets rules, good practices

Sumber: Reuters | Editor: Yudho Winarto

I

NDONESIAN state tin miner PT Timah said on Thursday it adheres to regulations and good mining practices in its activities both on land and offshore and said it was committed to environmental sustainability.

Timah, the world's second largest refined tin producer, was responding to a Reuters report on Tuesday on how miners on the Indonesian island of Bangka are moving their mining activities offshore as reserves on land thinned.

Environmentalists have been worried about the impact of sea mining on the island's mangrove area while fishermen said their catches had significantly dwindled due to the sea mining.

"PT Timah is committed to implementing sustainable environmental responsibility in every line of its business, both in environmental and social contexts," it said in a statement.

It said that commitment applied from the initial operational stage to the post-mining reclamation stage.

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Timah said since 2016 it had installed 3,105 units of fish shelters and 1,475 units of coral transplant in seas surrounding Bangka-Belitung province.

This year, the company plans to install an additional 1,920 units of fish shelter and aims to release 20,000 squid chicks to help repopulate the waters where it operates.

Tin deposits in the mining hub of Bangka-Belitung have been heavily exploited on land, leaving parts of the islands off the southeast coast of Sumatra island resembling a lunar landscape with vast craters and highly acidic, turquoise lakes.

In some places, restored mining land were often re-dug by unlicensed miners seeking remaining deposits.

Timah said it continues its efforts to restore former mining area into conservation area or eco-tourism centres, among other public facilities.

Positive Trends in Coal Prices,

These are Stock Recommendations

Author: Edo Fernando, Editor: Umar RP.

O

NE of the mining commodities that experienced a significant price increase was coal. As previously reported, the price of Newcastle coal in the October 2021 contract is set at USD 102.70 per ton. Thus, the potential for increased performance of coal companies is also believed to experience a positive trend.

Stefanus Darmagiri, an analyst from BRI Danareksa Sekuritas, said that the strengthening of coal prices was known to have occurred since the fourth quarter of 2020, which had an impact on increasing the profitability of a number of coal issuers under its scope. Some of them even claimed to have experienced a profit recovery. Based on his analysis, Stefanus said that shares owned by PT Adaro Energy Tbk (ADRO), PT Indo Tambangraya Megah Tbk (ITMG) and PT United Tractors Tbk (UNTR) are the most recommended for the coal mining sector.

Tren Positif Harga Batubara, Ini

Rekomendasi Saham

Penulis: Edo Fernando, Editor: Umar RP.

S

ALAH satu komoditas tambang yang

meng-alami kenaikan harga cukup signifikan adalah batubara. Diberitakan sebelumnya, harga batu bara Newcastle pada kontrak bulan Oktober 2021 mendatang dipatok sebesar USD102,70 per ton. Dengan demikian, potensi meningkat-nya kinerja perusahaan batu bara juga diyakini akan mengalami tren positif.

Stefanus Darmagiri, seorang analis dari BRI Danareksa Sekuritas mengatakan bahwa menguatnya harga batu bara ini diketahui telah terjadi sejak kuartal keempat tahun 2020 lalu sehingga berdampak pada peningkatan profitabilitas sejumlah emiten batu bara yang berada di bawah cakupannya. Beberapa di antaranya bahkan mengaku telah mengalami pemulihan laba.

Berdasarkan analisanya, Stefanus mengatakan bahwa saham yang dimiliki oleh PT Adaro Energy Tbk (ADRO), PT Indo Tambangraya Megah Tbk (ITMG) dan PT United Tractors Tbk (UNTR) menjadi yang paling direkomen-dasikan untuk sektor tambang batubara.

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Exposure to rising coal prices, sales of heavy equipment and gold have made UNTR's shares so attractive. He recommends buying at the target level of IDR 30,000. Meanwhile, for ADRO, you can set a buy target at Rp. 1,600 and ITMG at the level of Rp. 16,500.

The smooth price of coal in the global market is believed to have a positive impact on increasing UNTR's performance this year. This is also because the heavy equipment sales target targeted by the company also rose to 60 percent yoy at 2,500 units.

However, Stefanus also emphasized the potential for a reversal in global coal prices, which is predicted to occur in the third quarter of 2021 from its peak level. This is related to the Chinese government's plan to try to stabilize coal prices by increasing the amount of supply from producing countries.

On the other hand, Meilki Darmawan as an analyst from Henan Putihrai Sekuritas recommended PTBA shares. This choice was taken because it considers the company's stable coal sales to the domestic market compared to its peers, namely ITMG and ADRO. Where the two companies rely more on exports.

Eksposur akan harga batu bara yang menguat, penjualan alat berat dan juga emas, men-jadikan saham UNTR begitu atraktif. Dirinya merekomendasikan untuk melakukan buy di target level Rp30.000. Sementara itu untuk ADRO bisa dipasang target buy di angka Rp1.600 dan ITMG di level Rp16.500.

Moncernya harga batubara di pasaran global diyakini akan berdampak positif pada meningkatnya kinerja UNTR pada tahun ini. Hal ini juga dikarenakan target penjualan alat berat yang dibidik perusahaan, juga naik menjadi 60 persen secara yoy di sebanyak 2.500 unit.

Meski demikian Stefanus juga menekankan mengenai adanya potensi pembalikan harga batu bara global, yang diprediksi akan terjadi di kuartal ketiga tahun 2021 dari level puncaknya. Ini terkait rencana pemerintah Tiongkok yang berupaya untuk mencoba men-stabilkan harga batu bara dengan meningkatkan jumlah pasokan dari negara-negara produsen. Di lain pihak, Meilki Darmawan selaku analis dari Henan Putihrai Sekuritas merekomen-dasikan saham PTBA. Pilihan tersebut diambil karena mempertimbangkan stabilnya pen-jualan batu bara perusahaan ke pasar domestik dibandingkan dengan peers-nya yakni ITMG dan juga ADRO. Di mana kedua perusahaan itu lebih mengandalkan pada ekspor.

That's right, the coal price sets

another record! Highest 10 Years

Tirta, CNBC Indonesia

T

HE PRICE of ICE Newcastle thermal coal again touched a record high throughout the year.

Tuh kan Harga Batu Bara Cetak

Rekor Lagi! Tertinggi 10 Tahun

Tirta, CNBC Indonesia

H

ARGA batu bara termal ICE Newcastle kembali menyentuh rekor tertinggi sepanjang tahun.

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In yesterday's trading (10/6/2021), the price of the black stone futures contract closed up 4.6% to US$ 123.95/ton.

With this price increase, the global reference coal is now approaching its highest level in the last decade. Previously, the highest price of coal in 2021 was US$ 118.9/ton on 28 May. Meanwhile, the lowest price throughout the year was at US$ 75.7/ton on January 6, 2021.

The average monthly price of the black stone continues to increase. The average price of Newcastle coal in January 2021 is US$ 86.13/ton. The average price rose to US$ 103.15/ton in May. There was an increase of almost 20% in that period. Thermal coal prices across Asia have surged to near-decade highs amid strong demand and some supply constraints. Triggering the price hikes was strong demand from Japan and South Korea, major buyers of high-grade Australian thermal coal amid high consumption of electricity for air conditioning in the Northern Hemisphere along with summer sentiment.

"The rise in thermal coal prices also reflects a readjustment of coal flows across Asia as part of the China-Australia dispute," wrote Clyde Russel, columnist for the Reuters energy sector.

Australian exporters have had to switch from China to other buyers, mainly India but also small importers such as Vietnam and Bangladesh, and offer competitive prices to replace other suppliers, such as Indonesia and Russia.

India's cross-sea coal imports of all types of coal fell slightly in May. Imports fell to 17.62 million tonnes from April's 18.68 million, according to Refinitiv ship and port tracking data.

Pada perdagangan kemarin (10/6/2021) harga kontrak futures (berjangka) si batu hitam ditutup melesat 4,6% ke US$ 123,95/ton. Dengan kenaikan harga tersebut kini batu bara acuan global itu sudah mendekati level tertingginya dalam satu dekade terakhir. Sebelumnya harga tertinggi batu bara di tahun 2021 adalah US$ 118,9/ton pada 28 Mei lalu. Sementara harga terendahnya di sepanjang tahun adalah di US$ 75,7/ton pada 6 Januari 2021.

Rata-rata harga bulanan si batu hitam terus mengalami kenaikan. Rata-rata harga batu bara Newcastle bulan Januari 2021 sebesar US$ 86,13/ton. Rata-rata harga naik menjadi US$ 103,15/ton di bulan Mei. Ada kenaikan sebesar hampir 20% pada periode tersebut. Harga batu bara termal di seluruh Asia telah melonjak ke level tertinggi hampir satu dekade terakhir di tengah permintaan yang kuat dan beberapa kendala pasokan.

Pemicu kenaikan harga adalah permintaan yang kuat dari Jepang dan Korea Selatan, pembeli utama batu bara termal Australia bermutu tinggi di tengah tingginya konsumsi listrik untuk AC di belahan bumi utara seiring dengan adanya sentimen musim panas.

"Kenaikan harga batu bara termal juga mencerminkan penyesuaian kembali aliran batu bara di seluruh Asia sebagai bagian dari perselisihan China-Australia" tulis Clyde Russel, kolumnis untuk sektor energi Reuters. Eksportir Australia harus beralih dari China ke pembeli lain, terutama India tetapi juga importir kecil seperti Vietnam dan Bangladesh, dan menawarkan harga yang kompetitif untuk menggantikan pemasok lain, seperti Indonesia dan Rusia.

Impor batu bara lintas laut India untuk semua jenis batu bara sedikit turun di bulan Mei. Impor turun menjadi 17,62 juta ton dari 18,68 juta April, menurut data pelacakan kapal dan pelabuhan Refinitiv.

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The decline in imports occurred because India implemented a lockdown to control the soaring Covid-19 outbreak.

But despite the decline, detailed data showed that imports from Australia rose to 6.43 million tonnes and became the second highest import since January 2015 or slightly lower than 6.80 million in January this year.

Imports from Indonesia fell to 5.52 million tonnes in May, down from 6.3 million in April, and well below the average level of around 8 to 10 million tonnes per month in effect before China's ban on Australian coal was implemented. CNBC INDONESIA RESEARCH TEAM (twg/twg)

Penurunan impor terjadi dikarenakan India yang menerapkan lockdown untuk mengen-dalikan wabah Covid-19 yang melonjak. Namun meskipun turun, rincian data menunjukkan bahwa impor dari Australia naik menjadi 6,43 juta ton dan menjadi impor tertinggi kedua sejak Januari 2015 atau sedikit lebih rendah dari 6,80 juta pada Januari tahun ini.

Impor dari Indonesia turun menjadi 5,52 juta ton di bulan Mei, turun dari 6,3 juta di bulan April, dan jauh di bawah tingkat rata-ratanya sekitar 8 hingga 10 juta ton per bulan yang berlaku sebelum larangan China atas batu bara Australia diterapkan. TIM RISET CNBC INDONESIA (twg/twg)

CHART: Top miners leave money on the table amid copper price rally

Frik Els

W

HILE the trend is clearly downward since hitting record highs a month ago, copper is still trading within earshot of five digits per tonne.

The recovery since the depth of the pandemic lit a fire under copper stocks, but not all miners have been able to take full advantage of the rally. In fact, many big names have seen output drop this year, or showed tepid growth.

Big names like BHP (reduced workforce in Chile), Southern Copper (lower grades), Antofagasta (reduced workforce) and Rio Tinto missed an opportunity, while for Norilsk (suspended operations), MMG (lower grades) and Vale (restrictions and maintenance) the start of the year was nothing short of dismal.

Overall, the 27 biggest producers represented on the graph (from a virtual conference held by Roskill) which are responsible for 65% of global copper mine output hardly moved the needle at the beginning of this year following a year of declining output.

State-owned Codelco through sheer size was able to make the most of prices that averaged some $8,500 during the first quarter of this year compared to $5,640 in Q1 2020.

Tunnel vision

The real standout was Freeport-McMoRan, which upped production by nearly 25% to 910m pounds or 412,000 tonnes during the period, with the Phoenix-based company going underground at the end of Grasberg’s open pit life.

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At its average realized price (which at $8,686 exceeded the LME average) during the quarter, the value of the expansion tonnes came to a cool $705 million in extra revenue when others left money on the table.

According to Freeeport’s Q1 filing, a total of 50 new drawbells were constructed at the Grasberg Block Cave and Deep Mill Level Zone (DMLZ) bringing the total open drawbells to over 420. The two operations now bring to the surface 98,500 tonnes of ore per day.

Gold production at Grasberg nearly doubled in Q1, to just shy of 300,000 ounces – gold and silver credits helped bring down net cash costs after royalties, treatment charges and export duties to a mere $0.29/lbs ($640 a tonne).

Absolutely fabulous

At full production in 2022, the Grasberg complex will produce 1.55 billion pounds (703kt) of copper and 1.6 million ounces of gold per year.

Freeport CEO Richard Adkerson pointed out during the company’s Q2 conference call last year that at full tilt, Grasberg is the globe’s largest gold mine, even though the gold is a byproduct:

“The high grades of copper combined with this gold component make Grasberg one of the mining industry’s truly most valuable fabulous assets in its history.

“As gold prices approximate $1,800 an ounce, revenues from gold are projected to completely offset the total cost of production at Grasberg.”

Gold today approximates $1,900 and since Adkerson said these words, copper has gained more than 50%.

Most fabulous of all time? Open for debate, but going underground could not have been a better bet. Almost as if it was timed.

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Piedmont looks at IPCC, Metso Outotec alkaline pressure leach for

lithium project

Posted by Daniel Gleeson

P

IEDMONT Lithium’s plan to build out an integrated lithium hydroxide business from a base in North Carolina, USA, has advanced with the release of a scoping study that, it says, confirms that Carolina Lithium will be one of the world’s largest and lowest-cost producers of lithium hydroxide with a “superior” sustainability footprint.

Piedmont Carolina Lithium contemplates a single, integrated site, comprising quarrying, spodumene concentration, by-products processing, and spodumene conversion to lithium hydroxide at its site in Gaston County. There are currently no such integrated sites operating anywhere in the world, with the company saying the economic and environmental advantages of this strategy are compelling.

The latest study outlined a production target of around 4.96 Mt of 6% Li2O spodumene concentrate (SC6), averaging approximately 248,000 t/y of SC6 over the 20-year mine life. This equates to an average of 1.95 Mt/y of ore processed, totalling some 37.4 Mt of run-of-mine ore at an average grade of 1.09% Li2O (undiluted) over the 20-year run-of-mine life.

Of the total production target of 4.96 Mt of SC6, some 1.19 Mt will be sold to third parties during the operational life and approximately 3.77 Mt will be supplied to Piedmont’s chemical plant operations for conversion into lithium hydroxide. This results in a total production target of about 582,000 t of lithium hydroxide, averaging approximately 29,095 t/y of lithium hydroxide over 20 years, the company said. The study also assumes production targets of 4.83 Mt of quartz concentrate, 7.51 Mt of feldspar concentrate, and 1.34 Mt of mica concentrate over the life of operations.

Piedmont envisages a total initial capital cost of $838.6 million for the project and an after-tax net present value (8% discount) of $1.92 billion.

While still very much preliminary, the flowsheet and mining process for this planned operation is of interest to any lithium developer looking for a ‘sustainable’ mining footprint. The company currently envisages using a Metso Outotec alkaline pressure leach process as part of its plan. This will reduce emissions, eliminate sulphuric acid roasting and reduce solid waste, it said.

At the same time, in-pit crushing and conveyor systems are on the agenda, eliminating mining trucks in the study to reduce fossil fuel consumption.

Piedmont has also been working with a solar developer to build and operate a solar farm on Piedmont property capable of producing electricity to supply up to 100% of Piedmont needs. The company will also co-locate all operations on the same proposed site in Gaston County to minimise any transit and allow unused by-product streams to be repurposed for site redevelopment, it said. This adds up, Piedmont says, to highly efficient land and water use compared with South American lithium brine production.

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Keith D Phillips, President and Chief Executive Officer of Piedmont, said: “We are exceedingly pleased with the results of our updated scoping study. The economics of our project continue to impress, but I am particularly proud of the project’s sustainability profile.

“As we move forward to complete a definitive feasibility study for Carolina Lithium later in 2021, Piedmont has engaged Evercore and JPMorgan as financial advisors to evaluate potential strategic partnering and financing options for its North Carolina project. Given the project’s unique position as the only American spodumene project, with world-class scale, economics, and sustainability, we expect strategic interest to be robust.

Australian thermal coal best-in-class

Henry Ballard

A

USTRALIAN thermal coal exports have consistently delivered higher quality product than world-leading coal exporter Indonesia, according to a Minerals Council of Australia (MCA) report.

As carbon emission regulations tighten globally, MCA’s ‘Australian Export Thermal Coal: The

Comparative Quality Advantages’ report found the true value of Ausralian coal exports, as the

world seeks to decarbonise.

Superior qualities of Australian coal, as reported by the MCA, included its specific energy levels (SE), measuring the amount of energy content per weight of coal burnt.

“The report notes the higher specific energy (SE) of Australian coal at 25 megajoules per kilogram (MJ/kg) compared to Indonesian coal at 19.4MJ/kg…enabling less coal to be burnt per kilowatt hour of power station output and lower levels of CO2 emissions than from lower-quality coals,” the report stated.

Australia and the United States were tied for the highest quality coal, by this measure, closely followed by Columbia and South Africa. However, these three competitors only rank fourth, fifth and sixth globally in total coal exports.

Indonesia – the world’s largest exporter of coal at 390 million tonnes per year – was rated ‘inferior’ in a majority of the coal quality ratings, while Australian coal was rated ‘satisfactory for general boiler performance’ in all categories but ash content.

The MCA acknowledged the balance required into the future between emissions reductions and keeping people employed through the coal industry.

“These quality features are important in sustaining demand for Australian thermal coal while supporting jobs and investment – especially in regional New South Wales and Queensland – and better environmental and emissions outcomes for end users,” the MCA stated.

This will become increasingly important over the coming decade, as a report from Fitch Solutions said Australia and Indonesia are expected to continue leading in global coal exports.

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“Coal will remain the dominant source of power for most of Southeast Asia and Australia in the coming decade at least, which will support the mining of coal and coal trade in the region,” Fitch stated.

“Nevertheless, stricter environmental standards in Asia will continue to hurt coal miners by increasing compliance costs and delaying project development.”

The MCA report concluded with a discussion on technologies to reduce emissions, which it said would be imperative to reach the emissions reduction goals of the Paris Agreement. “Investment in reducing emissions from the use of thermal coal in Australia includes an agreement between Glencore and China Huaneng to use CO2 capture technology at the Millmerran coal-fired power station in Queensland – a project supported by Low Emission Technology Australia and the Australian coal industry,” the MCA stated.

Coal expected to remain dominant source of power in the coming

decade - Fitch Solutions

By: Simone Liedtke, Writer

C

OAL is expected to remain the dominant source of power for most of Southeast Asia and Australia in the coming decade, at least, and Fitch Solutions Country Risk and Industry Research says that will support the mining of coal and coal trade in the region.

Coal currently remains the most practical means to stimulate affordable electricity generation growth at the pace and scale needed to support continued economic growth in the region. Nevertheless, the research agency notes that stricter environmental standards in Asia will continue to hurt coal miners by increasing compliance costs and delaying project development.

Additionally, Fitch Solutions notes that reducing carbon footprints has gained significant impetus since 2020, with the shift to a low-carbon economy to have a significant impact on the regulatory frameworks of most major mining markets in Southeast Asia and Australia as governments commit to their Nationally Determined Contributions of the Paris Agreement. “Asia Pacific governments will face considerable challenges on this front, where major mining countries, including Indonesia and Australia, will remain largely reliant on fossil fuels (primarily coal) for energy generation,” Fitch Solutions comments.

It adds that Indonesia and Australia will continue to produce the bulk - between 85% and 90% - of total thermal coal output in the region.

It adds that these countries also will continue to account for about 12% of global coal production in the coming decade, as the outlook for thermal coal production in Indonesia and Australia is bolstered by government support, domestic needs and strong demand from coal-fired power plant operators in the region.

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Nevertheless, Fitch Solutions says that, while absolute production levels will remain elevated over the coming decade at least, production growth will slow in the long term owing to weak coal prices and rising environmental regulations.

AUSTRALIA

With regard to Australia, the agency says the coal industry will experience limited production growth over the long term, as prices stabilise and environmental regulations heighten along with increasing competition from lower-cost foreign producers.

Coal production growth in Australia will average 0.05% year-on-year from 2021 through to 2030, with output increasing minimally from 297-million tonnes this year to 298-million tonnes in 2030.

“As investors become wary of climate change issues and global energy consumption patterns shift away from coal, established players will increasingly leave the high-cost Australian coal market, while smaller players enter,” the agency comments.

It adds that Anglo American, Peabody Energy and Vale have all started liquidating their Australian coal portfolios, with Rio Tinto having completely exited the coal market. In place of these established players, smaller, lesser-known players (mostly private equity) have entered the market, some of whom have no prior mining experience.

Nevertheless, in the coming three years, Fitch Solutions suggests that Australia's yearly thermal coal output will rise owing to increasing production at Mach Energy's Mount Pleasant mine (10-million tonnes a year), and Sojitz and U&D Coal's Orion Downs mine (1.5-million tonnes a year).

The ramp-up at Whitehaven Coal's Vickery mine, which started in 2019, will take about six years to reach its yearly rated capacity of eight-million tonnes, and the Carmichael project is also expected to produce between eight-million and ten-million tonnes of thermal coal a year and cost $1.4-billion during its initial phase.

Further, Fitch Solutions says environmental issues and protectionism will also continue to put pressure on Australia's coal sector in the coming years. As a case in point, the agency notes that, though the Queensland government has approved Adani Group's Carmichael coal, rail and port projects, the group has had to fund 100% of the project itself, as announced in November 2018.

In November 2020, the group has rebranded its Australian unit as Bravus Mining and Resources. Banking giants HSBC and Deutsche Bank, as well as European banks such as BNP Paribas, Crédit Agricole and Société Générale, refused to bankroll the expansion owing to intense lobbying by environmental activists.

Therefore, Fitch Solutions says Australia will be at risk of a sudden tightening of environmental regulations, placing in limbo numerous new coal mining projects in the pipeline.

As per Fitch Solutions’ Global Mines Database, 79 of the 176 new coal projects globally are in Australia, although not all of them will be developed.

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INDONESIA

As for Indonesia, the country will remain the largest coal producer in absolute terms in Southeast Asia in the coming decade, at least, although production growth will slow in the coming years.

Coal production growth in Indonesia will average 0.48 % year-on-year from this year to 2030, with output increasing from 468-million tonnes this year to 487-million tonnes in 2030. Coal will remain a key fuel of choice for Indonesia's power expansion and a key generation source over the coming decade as coal supply remains abundant and cheaper in the market, alongside a government commitment for the source particularly to protect its coal mining industry.

Fitch Solutions says the relatively low cost of the feedstock means that coal will remain the fuel of choice to meet surging power demand in the country, as the government aims to boost domestic coal demand and support coal prices, and they expect lower demand internationally when more markets move towards cleaner generation sources.

Coal power generation accounted for about 60.7% of Indonesia’s power mix in 2020, and this figure should rise to 65% by 2030.

Dynamics in Indonesia will reduce coal supply on the international market and provide some support to prices.

The combination of slower coal production growth and strong domestic demand growth will cap the country’s exportable surplus over the coming years, and the agency says weak export growth will be compounded by the government erecting barriers to coal exports in order to ensure adequate supply for domestic power plants.

The Energy and Mineral Resources Ministry fixed coal’s Domestic Market Obligation for 2020, with 25% of mining production reserved for domestic use.

In the long term, it is suggested that the coal output growth will continue to slow, in line with lower coal prices, poor transportation networks and stringent regulations that will increase costs for miners.

PT Bumi Resources is the largest coal miner in Indonesia, while PT Indo Tambangraya Megah specialises in the production of premium-grade coal for the global energy market.

VIETNAM

Vietnam’s coal mining sector, meanwhile, will outperform in the coming decade in comparison with other countries in Southeast Asia, excluding Indonesia. Coal production growth in Vietnam will average 1.02% year-on-year from 2021 through to 2030, with output increasing from 39-million tonnes this year to 42-million tonnes in 2030.

The resource industry in Vietnam is largely State-led and heavily regulated by the government, Fitch Solutions comments, noting that State-owned miner Vinacomin is the largest coal producer in the country at present as it accounts for 95% of domestic coal production and has a production capacity of between 40-million and 45-million tonnes a year.

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The bulk of its coal reserves are located in the northern area of Quang Ninh province and the Red River Delta Basin. The country is rapidly developing new coal-fired power plants, which will bode well for the coal mining sector.

In July 2017, the government tasked the Ministry of Industry and Trade with developing a roadmap for the coal mining sector to ensure sustainable supplies and a more competitive marketplace.

Official forecasts put coal consumption at 100-million tonnes a year by 2030.

Nevertheless, Fitch Solutions says the mining sector will continue to be dampened by decreasing coal prices in the long term, higher natural resources tax, which was implemented since July 2016, as well as higher production costs owing to the depletion of coal layers, which are easier to access.

In fact, traditionally an exporter, Vietnam turned into a net importer of coal in 2016. THAILAND & MYANMAR

Meanwhile, Fitch Solutions notes that Thailand and Myanmar will continue to incorporate the least amount of coal in their power mix compared with other countries in Asia in the coming decade.

Thailand’s coal-fired power as a percentage of total electricity generation from all sources will amount to only between 16% and 17%, while Myanmar’s figure will remain within 6% to 8% from 2021 to 2030.

This is compared with between 30% and 60% of the power mix for the rest of Southeast Asia and Australia, which the agency says will be the main factor causing coal mining sectors in both countries to remain small in the coming years.

The outlook for Thailand's coal mining industry is far from positive, it laments, adding that coal production growth in Thailand will average 1.10 % year-on-year from 2021 to 2030, with output increasing minimally from 24-million tonnes this year to 25-million tonnes in 2030.

Depleting domestic coal reserves will see Thailand increasing imports of coal to fuel its reliance on coal for power generation. Owing to coal being the most cost-effective fuel source, it will still account for a substantial portion of power generation over the coming years.

However, public distrust towards coal-fired power generation over environmental and health issues will continue to rise, limiting investment in coal mining.

Currently, Fitch Solutions says, the majority of the electricity generated in Thailand comes from gas, and that Thailand's latest Power Development Plan (PDP 2018-2037) sets out power capacity expansion targets to reach 77 GW, and a shift in power mix targets amid efforts to diversify away from gas.

While the country will look to reduce its dependence on gas-power generation from an estimated 65.4% in 2018 to 53% by 2037, Fitch Solutions says new sources of power will come from non-fossil sources (35% of the power mix) and, to a lesser extent, from coal (12%).

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Myanmar’s electricity also comes mainly from gas, with coal mining to remain limited in the long term. Coal production growth in Myanmar will average 8.9% year-on-year from 2021 to 2030, with output increasing from 2.5-million tonnes this year to 4.7-million tonnes in 2030. Additionally, with the political upheaval in Myanmar since the February coup on the government by the Tatmadaw (Myanmar military) expected to last for many years, investment in the mining sector will see a sharp decline as international firms seek to leave the market.

For now, Fitch Solutions says mining operations are running smoothly, although firms will increasingly exit the market as international pressures rise.

Currently, most coal mining in Myanmar is done in Shan state, with Eden Group operating the largest coal mine in Tigyit with a capacity of 828 000 t/y.

However, Fitch Solutions says that most coal mines in Shan state are located underground, beneath residential homes and there is significant social backlash as blasts create noise pollution, and waste flows into the Nam Pang River, contaminating the largest tributary of the Than Lwin river.

According to a 2008 law, the central government has the sole authority to mine natural resources, granting coal mining permits to entrepreneurs without the consent of locals.

With strong public opposition, the outlook for the coal mining sector in Myanmar remains bleak.

Coal mining will also come under significant pressure in the Philippines in the coming years as the country’s government has declared a moratorium on coal power projects and will no longer approve the construction of any new coal-fired power plants.

“The government has stressed that coal will remain the dominant power generation source for years to come, with several projects in the pipeline that were already approved prior to the announcement,” Fitch Solutions says.

Coal projects with environmental compliance certificates and permits from local governments will also be excluded from the ban. Coal production growth in the Philippines will stagnate from 2021 to 2030, with output remaining at about 14-million tonnes throughout the period.

In recent years, Fitch Solutions says, coal mining and coal-fired power projects have been facing very strong and increasing public opposition, including the involvement of several religious associations, who signed a manifesto to advance the coal divestment movement and to disallow investments into new 'dirty' assets.

It says that, in May 2020, more than 42 faith-based institutions, including Catholic churches, announced that they were divesting $1.4-billion from fossil fuels, which follows after the launch of Church-CSO Empowerment for Environmental Sustainability, with various church leaders and civil society groups having jointly

urged domestic banks to stop funding new coal-fired power projects.

In September 2019, more than 50 civil society groups and people’s organisations participated in a nationwide protest, urging President Rodrigo Duterte to impose a moratorium on new coal-fired power plants.

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