TABLE OF CONTENTS No. Title Media Source Page

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IMA-Daily Update Page 1

However, the issuer did not include the acquisition of coal mining land in the plan. The reason, the acquisition requires consideration of many aspects, from technical to coal quality in the relevant land. "The potential for mining that we can acquire must be economically viable, both through the sale of coal and other businesses around the mine such as the Mouth Mine Power Plant," said Bukit Asam Corporate Secretary, Hadis Surya Palapa, Wednesday (5/2) then.

Even without acquiring a new mine, the issuer with the PTBA stock code is optimistic that coal production this year will reach 30 million tons. That number increased 5.26% compared to last year of 28.5 million tons. On that basis, PTBA chose to focus on implementing other projects, one of which was a coal downstream project. This issuer is preparing a factory in Tanjung Enim, South Sumatra to process coal into other products with gasification technology.

In the disclosure of information on the Indonesia Stock Exchange, PTBA Managing Director Arviyan Arifin explained, his party collaborated with Air Product & Chemicals Inc. from the United States to downstream low-calorie coal. The total investment value...

Tanpa Akuisisi, Bukit Asam

Optimistis Produksi Tahun Ini

Naik 5,26%

P

T BUKIT Asam Tbk fokus menggarap proyek hilirisasi dalam waktu dekat. Demi mendukung rencana kerja tahun 2020, perusahaan yang berdiri sejak 2 Maret 1981 ini sudah menyediakan dana belanja modal atau capital expenditure Rp 4,5 triliun.

Namun, emiten itu tidak memasukan akuisisi lahan tambang batubara dalam rencananya. Alasannya, akuisisi membutuhkan pertim-bangan banyak aspek, mulai teknis hingga kualitas batubara di lahan bersangkutan. "Potensi tambang yang bisa kami akuisisi tentu harus layak secara keekonomian, baik melalui jual-beli batubara maupun usaha lain di sekitar tambang misalnya PLTU Mulut Tambang," ungkap Sekretaris Perusahaan Bukit Asam, Hadis Surya Palapa, Rabu (5/2) lalu.

Meski tanpa mengakuisisi tambang baru, emiten dengan kode saham PTBA itu optimistis produksi batubara di tahun ini mencapai 30 juta ton. Jumlah itu naik 5,26% dibandingkan tahun lalu sebesar 28,5 juta ton. Atas dasar itu, PTBA memilih fokus melak-sanakan proyek lain, salah satunya proyek hilirisasi batubara. Emiten ini sedang menyiapkan pabrik di Tanjung Enim Sumatra Selatan untuk mengolah batubara menjadi produk lain dengan teknologi gasifikasi. Dalam keterbukaan informasi di Bursa Efek Indonesia, Direktur Utama PTBA Arviyan Arifin menerangkan, pihaknya bekerjasama dengan Air Product & Chemicals Inc dari Amerika Serikat untuk hilirisasi batubara kalori rendah. Nilai total investasi ...

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The total investment value for gasification development reaches US$ 3.2 billion. Air Products acts as an investor in the upstream and downstream business.

Gasification is the conversion of young coal into syngas (synthetic gas) and then processed into dimethyl ether (DME), methanol and mono ethylene glycol (MEG). That is a fuel that can replace LPG.

PTBA estimates that it can produce 1.4 million tons of DME, 300,000 tons of methanol and 250,000 tons of MEG. Currently, PTBA has completed a feasibility study for a coal gasification project and is entering the initial planning, front end engineering design (FEED) and engineering procurement and construction (EPC) stages.

PTBA hopes that the coal processing plant will operate by the end of the year 2023. The operation of this plant can help reduce gas imports by around US$ 1 billion per year. Reporter: Dimas Andi, Editor: Thomas Hadiwinata

Nilai total investasi pengembangan gasifi-kasi mencapai US$ 3,2 miliar. Air Products bertindak sebagai investor di bisnis upstream dan downstream.

Gasifikasi adalah konversi batubara muda menjadi syngas (synthetic gas) kemudian diproses menjadi dimethyl ether (DME), metanol dan mono ethylene glycol (MEG). Itu merupakan bahan bakar yang bisa menggantikan LPG.

PTBA memperkirakan bisa memproduksi 1,4 juta ton DME, 300.000 ton metanol dan 250.000 ton MEG. Saat ini, PTBA sudah menyelesaikan studi kelayakan proyek gasifikasi batubara dan segera masuk tahap perencanaan awal, front end engineering design (FEED) dan engineering procure-ment and construction (EPC).

PTBA berharap pabrik pengolahan batu-bara tersebut beroperasi pada akhir tahun 2023 mendatang. Operasional pabrik ini bisa membantu pengurangan impor gas sekitar US$ 1 miliar per tahun. Reporter: Dimas Andi, Editor: Thomas Hadiwinata

United Tractors (UNTR) Focuses

on Product Diversification

Finna U. Ulfah

T

HE CO AL minin g issuer of the conglomerate group Astra, PT United Tractors Tbk will focus on diversifying its products to reduce dependence on low-calorie coal this year.

United Tractors Investor Relations Ari Setiyawan said that the company continued its diversification strategy to have a more balanced portfolio between the thermal or low calorie coal business and the non-thermal coal business.

United Tractors (UNTR) Fokus

Diversifikasi Produk

Finna U. Ulfah

E

MITEN pertambangan batu bara grup konglo-merasi Astra, PT United Tractors Tbk. akan fokus untuk melakukan diversifikasi produk untuk mengurangi ketergantungan terhadap batu bara berkalori rendah pada tahun ini. Investor Relations United Tractors Ari Setiyawan mengatakan bahwa perseroan masih melanjutkan strategi diversifikasi agar memiliki portofolio yang lebih berimbang antara bisnis batu bara termal atau dengan kalori rendah dan bisnis non batu bara thermal.

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He said that in order to achieve this goal, the issuer coded UNTR shares were studying to add other mineral commodity mining areas such as coking coal, gold and nickel.

"No one has been in the pipeline and was acquired in the near future, but it is still under study," Ari said when contacted by Bisnis, Thursday (02/06/2020).

Meanwhile, the company has allocated a capital expenditure (capex) budget of US$ 450 million. The target is also lower when compared to the company's capex last year of US$ 650 million.

Ari said that most of the capex in 2019 was used by its subsidiary PT Pamapersada Nusantara (pama) to buy new heavy equipment.

Pama has bought quite a lot of heavy equipment from 2017 to 2019 so this year there is no need to buy as much heavy equipment as the previous year and capex also tends to be smaller than last year. He explained that of the total US$ 450 million capex this year, around US$ 250 million to US$ 300 million will be used for Pama and US$ 100 million for the Martabe gold mine, and the rest will be used for other business purposes.

In addition, in the effort to diversify coal products, the company is currently working on the Java 4 PLTU project in Tanjung Jati for units 5 and 6 which will have a capacity of 2,000 megawatts. Until December 2019, the project development progress has reached 88% and is targeted to operate commercially in 2021.

On the other hand, Ari did not mention the company's revenue increase target for this year. Editor: M. Taufikul Basari

Dia mengatakan bahwa untuk mencapai tujuan tersebut, emiten berkode saham UNTR tersebut tengah mengkaji untuk menambahkan lahan tambang komoditas mineral lainnya seperti coking coal, emas, dan nikel.

“Belum ada yang dalam pipeline dan di-akuisisi dalam waktu dekat ini tetapi masih dalam studi,” ujar Ari saat dihubungi Bisnis, Kamis (6/2/2020).

Adapun, perseroan mengalokasikan anggaran belanja modal atau capital

expenditure (capex) sebesar US$450 juta.

Target tersebut pun lebih rendah bila di-bandingkan dengan capex perseroan pada tahun lalu sebesar US$650 juta.

Ari mengatakan bahwa sebagian besar capex pada 2019 digunakan oleh anak usahanya PT Pamapersada Nusantara (pama) untuk membeli alat berat baru.

Pama yang sudah membeli alat berat cukup banyak pada 2017 hingga 2019 sehingga tahun ini tidak perlu untuk membeli alat berat sebanyak tahun sebelumnya dan capex pun cenderung menjadi lebih kecil daripada tahun lalu.

Dia menjelaskan dari total US$450 juta capex tahun ini akan digunakan sekitar US$250 juta hingga US$300 juta untuk Pama dan sebesar US$100 juta untuk tambang emas Martabe, dan sisanya untuk keperluan bisnis lain. Selain itu, masih dalam upaya diversifikasi produk batu bara, perseroan saat ini tengah menggarap proyek PLTU Jawa 4 di Tanjung Jati untuk unit 5 dan 6 yang akan memiliki kapasitas 2.000 megawatt. Hingga Desember 2019, progres pengembangan proyek ter-sebut sudah mencapai 88% dan ditargetkan beroperasi secara komersial pada 2021. Di sisi lain, Ari tidak menyebutkan target kenaikan pendapatan perseroan untuk tahun ini. Editor : M. Taufikul Basari

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This is a continuation of the

European lawsuit over Indonesia's

nickel export ban

Cantika Adinda Putri, CNBC Indonesia

D

EPUTY Trade Minister Jerry Sambuaga said the lawsuit filed by the European Union at the World Trade Organization (WTO) had entered a new phase.

Jerry explained at this time, the govern-ment was still waiting for the results of the consultation forum conducted by the European Union (EU). Previously, on 30 January 2020 in Geneva, Switzerland, the EU and Indonesia had already carried out an advance questionnaire regarding the regulation of the Nickel discussion in Indonesia.

At that time, the government had already answered all the questions that had been raised by the EU. Nevertheless, the EU has not yet decided what steps will be continued in the lawsuit session.

"Nickel in this case is waiting for the results of the European consultation forum. So in the WTO forum, the European Union asked us, [...] we are waiting for their response," Jerry said when met at the Senayan complex on Thursday (6/2/2020).

Possible answers from the EU will only be known, no later than one month. "About two weeks to a month. We don't know, so we hope sooner, so that there are more definitive decisions," Jerry continued. So, he continued, Indonesia could prepare what strategies for the future steps. Until now, Indonesia itself has prepared several strategies, if the EU continues its suit to the next panel.

Ini Kelanjutan Gugatan Eropa

Soal Pelarangan Ekspor Nikel RI

Cantika Adinda Putri, CNBC Indonesia

W

AKIL Menteri Perdagangan Jerry Sambuaga mengatakan gugatan yang dilayangkan oleh Uni Eropa di Organisasi Perdagangan Dunia (WTO) telah memasuki babak baru.

Jerry menjelaskan saat ini, pemerintah masih menunggu hasil dari forum konsultasi yang dilakukan oleh Uni Eropa (UE). Sebelumnya, pada 30 Januari 2020 lalu di Jenewa, Swiss UE dan Indonesia sudah melakukan advance questionnaire atau kuesioner tingkat lanjut perihal peraturan pembahasan Nikel di Indonesia.

Saat itu, pemerintah pun sudah menjawab semua pertanyaan-pertanyaan yang telah dilayangkan oleh UE. Kendati demikian, UE belum memutuskan langkah apa yang akan dilanjutkan di dalam sidang gugatannya tersebut.

"Nikel dalam hal ini sedang menunggu hasil dari forum konsultasi dari Eropanya. Jadi dalam forum WTO, Uni Eropa kan bertanya kepada kita, [...] kami sedang menunggu respon dari mereka," tutur Jerry saat ditemui di kompleks Senayan, Kamis (6/2/2020). Kemungkinan jawaban dari UE tersebut baru akan diketahui, paling lambat satu bulan mendatang. "Sekitar dua minggu sampai satu bulan. Kita nggak tahu, ya kita berharap lebih cepat, supaya ada keputusan yang lebih pasti," kata Jerry melanjutkan.

Sehingga, lanjut dia, Indonesia bisa menyiap-kan strategi apa untuk langkah ke depannya. Sampai saat ini, Indonesia sendiri sudah menyiapkan beberapa strategi, apabila UE melanjutkan gugatannya ke panel selanjut-nya.

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Indonesia has formed a legal team and has coordinated with other ministries/ institutions to fortify themselves, if the EU sues. The government will face whatever the EU will do.

"We are ready with our delegation that I lead together with the Ministry of Trade, Ministry of Foreign Affairs, MEMR, Industry, all related ministries/institu-tions. We are ready to face whatever the outcome," he said.

"I think we just face it. Because this is still in the consultation forum. The decision of the consultation forum is still and is being discussed by them. They are looking forward to how, yes we see that," concluded Jerry.

To note, Indonesia stopped exports of raw nickel decided last year and took effect on January 1, 2020. The EU then sued the WTO in November 2019. This policy is considered unfair because it limits the access of EU producers to nickel ore. (dru)

Indonesia sudah membentuk tim hukum dan telah melakukan koordinasi dengan kemen-terian/lembaga lainnya untuk membentengi diri, apabila UE jadi menggugat. Pemerintah pun akan menghadapi apapun yang akan dilakukan oleh UE.

"Kita siap dengan delegasi kita yang saya pimpin bersama dengan jajaran Kemendag, Kemenlu, ESDM, Perndustrian, semua lintas K/L yang terkait. Kami siap menghadapi apa pun hasilnya," tuturnya.

"Saya pikir kita hadapi saja. Kan ini masih dalam forum konsultasi. Forum konsultasi itu kan putusannya masih sedang akan di-rundingkan oleh mereka. Mereka sedang melihat ke depannya bagaimana ya kita melihat itu saja," pungkas Jerry.

Untuk diketahui, Indonesia menyetop ekspor nikel mentah diputuskan pada tahun lalu dan berlaku efektif pada 1 Januari 2020. UE kemudian menggugatnya kepada WTO pada November 2019. Kebijakan ini dianggap tak adil karena membatasi akses produsen UE terhadap bijih nikel. (dru)

Ifishdeco Tbk (IFSH) aims to

produce 2.3 million metric tons of

nickel in 2020

Reporter: Dimas Andi | Editor: Anna Suci

T

HE M INERAL min ing compan y, PT Ifishdeco Tbk (IFSH) has confirmed it will produce nickel of 2.3 million metric tons this year or approximately 191,000 metric tons per month.

IFSH Corporate Secretary Christo Pranoto said the production target was set taking into account the sizable nickel demand from local smelter entrepreneurs.

Ifishdeco Tbk (IFSH) targetkan

memproduksi nikel 2,3 juta

metrik ton di 2020

Reporter: Dimas Andi | Editor: Anna Suci

P

ERUSAHAAN t ambang min era l, P T Ifishdeco Tbk (IFSH) memastikan akan memproduksi nikel sebanyak 2,3 juta metrik ton pada tahun ini atau kurang-lebih 191.000 metrik ton per bulan.

Sekretaris Perusahaan IFSH Christo Pranoto mengatakan, target produksi tersebut ditetapkan dengan mempertimbangkan permintaan nikel yang cukup besar dari pengusaha-pengusaha smelter lokal.

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He also estimated nickel demand to be processed in domestic smelters in general at around 3 million metric tons per month. On the other hand, the IFSH still hopes for clarity regarding the governance of the domestic nickel trade from the government including the benchmark mineral prices (HPM) for nickel commodities.

In addition, Christo also said, this year there is a possibility that the IFSH will experience a 9% decline in profits due to the local nickel selling price which is not as good as the selling price in the export market. "To maintain financial performance, we utilize the potential demand from local smelters while maintaining the quality and provision of nickel ore transportation," he explained, Thursday (6/2).

He also hopes that the smelter processing nickel ore into nickel pig iron (NPI) and ferronickel which will start operating this year will support IFSH's revenue on a consolidated basis. In addition, the company is working on a ferronickel smelter project with rotary kin electric furnace (RKEF) technology, which will be operational in 2021.

For the record, last year, IFSH produced 2.26 million metric tons of nickel or lower than the company's target of 2.5 million metric tons.

This is due to government policies that temporarily suspended nickel ore exports for almost 4 weeks in October-November 2019.

This year's business expansion agenda PT Ifishdeco Tbk (IFSH) continues to focus on carrying out business expansion amid a ban on the export of nickel ore from the government starting this year.

Ia pun memperkirakan permintaan nikel untuk diolah di smelter dalam negeri secara umum berada di kisaran 3 juta metrik ton per bulan.

Di sisi lain, pihak IFSH masih berharap adanya kejelasan mengenai tata kelola perdagangan nikel domestik dari peme-rintah termasuk harga patokan mineral (HPM) untuk komoditas nikel.

Selain itu, Christo juga bilang, pada tahun ini ada kemungkinan IFSH mengalami penurunan laba sekitar 9% lantaran harga jual nikel lokal yang tidak sebaik harga jual di pasar ekspor.

“Untuk menjaga kinerja keuangan, kami memanfaatkan potensi permintaan dari

smelter lokal sekaligus menjaga kualitas

dan ketetapan pengangkutan ore nikel,” jelas dia, Kamis (6/2).

Ia juga berharap smelter pengolahan bijih nikel menjadi nikel pig iron (NPI) dan feronikel yang mulai beroperasi di tahun ini akan mendukung pendapatan IFSH secara konsolidasi. Di samping itu, per-usahaan sedang mengerjakan proyek smelter feronikel dengan teknologi rotary kin

electric furnace (RKEF) yang akan

beroperasi di tahun 2021 nanti.

Sebagai catatan, pada tahun lalu, IFSH memproduksi 2,26 juta metrik ton nikel atau lebih rendah dari target perusahaan sebesar 2,5 juta metrik ton.

Hal ini disebabkan adanya kebijakan pemerintah yang sempat menghentikan sementara ekspor bijih nikel selama hampir 4 pekan pada bulan Oktober-November 2019.

Agenda ekspansi bisnis tahun ini

PT Ifishdeco Tbk (IFSH) tetap fokus melaksanakan ekspansi bisnis di tengah adanya larangan ekspor bijih nikel dari pemerintah mulai tahun ini.

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IFSH Company Secretary Christo Pranoto said that his party was working on a ferronickel smelter that uses rotary kin electric furnace (RKEF) technology. The smelter is targeted to operate commercially in 2021.

To support the project, IFSH has prepared a capital expenditure (capex) fund of Rp 1.4 trillion by 2021. Specifically this year, the company has allocated funds of around Rp 1.1 trillion for the need to add machinery and infrastructure to the smelter project.

Christo continued, the source of funding for the construction of the RKEF smelter was partly obtained from IFSH partners who came from China. However, he has not yet explained in detail the partners who work with IFSH for the project.

"Funds for foundations, electricity, infra-structure, and blast furnace upgrades, in addition to shareholders will also come from other parties' financing that is being processed," he said, Thursday (6/2).

IFSH also opened up opportunities to seek capital expenditure funds from financial institutions as an alternative to stopping the export of nickel ore which is often a source of funding for smelter projects. In addition, IFSH is also exploring opportunities to acquire new Mining Business Permits (IUP) to maintain nickel availability. However, the plan is still in the process of internal discussions. Christo also has not been able to reveal the location of the land that will be acquired by the company.

To be sure, IFSH not only considers aspects such as the amount and content of nickel, but also geological conditions, hauling distance, and compliance with legal or licensing requirements.

Sekretaris Perusahaan IFSH Christo Pranoto menyampaikan, pihaknya tengah meng-garap smelter feronikel yang menggunakan teknologi rotary kin electric furnace (RKEF). Smelter tersebut ditargetkan dapat ber-operasi secara komersial pada tahun 2021 mendatang.

Untuk menunjang proyek tersebut, IFSH menyiapkan dana belanja modal atau capital

expenditure (capex) sebesar Rp 1,4 triliun

hingga tahun 2021 nanti. Khusus di tahun ini, perusahaan mengalokasikan dana sekitar Rp 1,1 triliun untuk kebutuhan penambahan mesin dan infrastruktur pada proyek smelter tersebut.

Christo melanjutkan, sumber pendanaan untuk pembangunan smelter RKEF sebagian diperoleh dari mitra IFSH yang berasal dari China. Namun, ia belum menjelaskan secara rinci mitra yang bekerja sama dengan IFSH untuk proyek tersebut.

“Dana untuk pondasi, listrik, infrastruktur, serta upgrade blast furnace, selain dari pemegang saham juga nantinya berasal dari pembiayaan pihak lain yang sedang diproses,” ungkap dia, Kamis (6/2).

IFSH pun membuka peluang pencarian dana belanja modal dari lembaga keuangan sebagai alternatif atas dihentikannya ekspor bijih nikel yang kerap menjadi sumber pendanaan proyek smelter.

Di samping itu, IFSH juga sedang menjajaki peluang akuisisi lahan Izin Usaha Pertam-bangan (IUP) baru demi menjaga keter-sediaan nikel. Namun, rencana tersebut masih dalam proses pembahasan internal. Christo juga belum bisa mengungkapkan lokasi lahan yang akan diakuisisi per-usahaan.

Yang pasti, IFSH tak hanya memper-timbangkan aspek seperti jumlah dan kadar nikel, melainkan juga kondisi geologis, jarak

hauling, serta pemenuhan syarat legal atau

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"All aspects are used as a basis for us to calculate the economic value of the IUP land acquisition," he concluded.

“Semua aspek tersebut dijadikan dasar bagi kami untuk menghitung nilai keekonomian dari akuisisi lahan IUP,” pungkas dia.

Corona Impact, China Asks Chile

to Postpone Copper Delivery

Finna U. Ulfah

T

HE CHILEAN Copper Commission or Cochilco launches copper buyers from China have called for a delay in shipping copper from Chile as unrest arises from the spread of the corona virus.

Cochilco Market Coordinator Victor Garay said many clients from China rescheduled some copper shipments. He added, the miners in Chile also had difficulty sending copper because of transportation limitations.

"Just like airlines that do not want to go to China, sea transportation companies also do not want to," Garay said as quoted by Bloomberg, Thursday (02/06/2020). The volume of copper shipments to China usually decreases ahead of the Lunar New Year holiday. Now, with a corona virus outbreak that is hindering manufacturing activity, demand for copper shipments is also limited.

In January 2020, China has postponed the purchase of new metals from its trading partners. In fact, China is the largest metal importer in the world. As a result, Cochilco also expects Chilean copper output to rise in 2020 because domestic miners need more supplies if at any time logistical constraints can be overcome.

Dampak Korona, China Minta

Chili Tunda Kirim Tembaga

Finna U. Ulfah

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HE CHILEAN Copper Commission atau Cochilco melansir para pembeli tembaga dari China telah meminta penundaan pengiriman tembaga dari Chili seiring keresahan yang timbul akibat penyebaran virus corona. Koordinator Pasar Cochilco Victor Garay mengatakan banyak klien dari China yang menjadwalkan ulang beberapa pengiriman tembaga. Dia menambahkan, para penam-bang di Chili juga kesulitan mengirim tembaga karena keterbatasan angkutan. “Sama seperti maskapai penerbangan yang tidak ingin pergi ke China, perusahaan angkutan laut juga tidak ingin,” ujar Garay seperti dikutip dari Bloomberg, Kamis (6/2/2020).

Volume pengiriman tembaga ke China biasanya berkurang menjelang libur tahun baru Imlek. Sekarang, dengan wabah virus corona yang menghambat aktivitas manu-faktur, permintaan pengiriman tembaga juga terbatas.

Pada Januari 2020, China sudah menunda pembelian logam baru dari mitra dagang-nya. Padahal, China merupakan importir logam terbesar di dunia. Akibatnya, Cochilco pun memperkirakan output tembaga Chili akan naik pada 2020 karena penambang di dalam negeri membutuhkan pasokan lebih banyak bila sewaktu-waktu kendala logistik bisa diatasi.

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Garay assessed that it is better to send mining products at this time than to keep mining products from increasing output. This scenario is expected to affect copper prices.

"The Chinese situation is a short-term situation. If it lasts a year, we must change the strategy. We will continue to monitor this and try to find out the impact for the first quarter of this year," said Garay. So far, the corona virus hasn't spread to Chile yet, but South American food exporters are feeling the effects. Purchases of Chinese food items including cherries, wine and seafood from the country have dropped 50 percent to 60 percent since the corona virus broke out. Editor: Rivki Maulana

Garay menilai lebik baik mengirimkan produk pertambangan saat ini ketimbang menahan produk hasil tambang agar outpun tetap meningkat. Skenario ini diharapkan bisa mempengaruhi harga tembaga

“Situasi China adalah situasi jangka pendek. Jika itu berlangsung setahun, kami harus mengubah strategi. Kami akan terus pantau ini dan mencoba mencari tahu dampaknya untuk kuartal pertama tahun ini,” papar Garay.

Sejauh ini, virus corona memang belum menyebar ke Chili, tetapi eksportir makanan negara Amerika Selatan merasakan dampak-nya. Pembelian barang makanan China termasuk ceri, anggur, dan makanan laut dari negara itu telah merosot 50 persen hingga 60 persen sejak virus corona merebak. Editor : Rivki Maulana

Downstream Industry Boosts

Investment and Exports

T

HE MINISTRY of Industry (Kemenperin) is determined to continue pushing down-stream industry because the activity aims to increase the added value of domestic raw materials. Therefore, it is necessary to support the implementation of a policy prohibiting the export of raw minerals. "That policy is indeed awaited by the Ministry of Industry. Because, with the ban, it can spur performance in the upstream industry sector, and at the same time it is also expected to invite investment in the sector into Indonesia," said Industry Minister Agus Gumiwang Kartasasmita.

Agus said, Indonesia has a wealth of natural resources that can be processed as industrial raw materials. Besides minerals, another potential commodity is crude palm oil (CPO).

Hilirisasi Industri Menggenjot

Investasi dan Ekspor

K

EMENTERIAN Perindustrian (Kemenperin) bertekad untuk terus mendorong hilirisasi industri karena aktivitas tersebut bertujuan meningkatkan nilai tambah dari bahan baku di dalam negeri. Oleh karena itu, perlu didukung implementasi kebijakan larangan ekspor mineral mentah.

“Kebijakan itu yang memang ditunggu oleh Kemenperin. Sebab, dengan larangan itu bisa memacu kinerja di sektor industri hulu, sekaligus juga diharapkan dapat mengundang investasi sektor tersebut masuk ke Indonesia,” kata Menteri Perindustrian Agus Gumiwang Kartasasmita.

Agus menyebutkan, Indonesia mempunyai kekayaan sumber daya alam yang dapat diolah sebagai bahan baku industri. Selain mineral, komoditas lainnya yang cukup potensial adalah minyak sawit mentah (crude palm oil/CPO).

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"Indeed CPO is a commodity that is being optimized for domestic needs, because we are building the B30 program and in the next two years it will be developed into B100," Agus said.

Therefore, Agus said that the government is optimistic about the downstream industry which is considered to be able to maintain the strength of the national economy so that it is not easily swayed amid fluctuations in commodity prices. In this case, the domestic processing industry needs to be spurred on by its growth and development because it plays an important role in increasing the added value of natural resources to be made from semi-finished goods to finished products.

"Therefore, we must focus on the down-stream industry, which will certainly bring a leap of progress for our economy. During this time, downstream industry has provided a broad multiplier effect, both state revenue through exports and increased employment," said Agus.

However, according to Agus, down-streaming needs to be supported by the use of new technology, including the application of the industrial era 4.0 to boost productivity more efficiently. "I am happy and proud. We all have the same view about the importance of innovation. The downstream view must be encouraged in Indonesia. This is the main program," Agus said.

Seeing this, Agus is optimistic, there are a number of large-scale global industries that are interested in entering and opening their production and research activities in Indonesia.

"In line with this, the government is encouraging improvements in the quality of human resources and R&D activities for innovation. That is Indonesia's comparative advantage compared to other countries," Agus added.

“Memang CPO merupakan komoditas yang sedang dioptimalkan menjadi kebutuhan domestik, karena kita sedang membangun program B30 dan dalam dua tahun ke depan akan dikembangkan menjadi B100,” papar Agus.

Oleh karena itu, Agus mengatakan peme-rintah optimistis terhadap hilirisasi industri yang dinilai dapat menjaga kekuatan per-ekonomian nasional agar tidak mudah terombang-ambing di tengah fluktuasi harga komoditas. Dalam hal ini, industri peng-olahan di dalam negeri perlu dipacu pertumbuhan dan pengembangannya karena berperan penting meningkatkan nilai tambah sumber daya alam untuk dibuat sebagai barang setengah jadi hingga produk jadi.

“Makanya, kita harus fokus pada hilirisasi industri, yang tentunya akan membawa lompatan kemajuan bagi ekonomi kita. Selama ini, hilirisasi industri telah mem-berikan multiplier effectyang luas, baik itu penerimaan negara melalui ekspornya maupun penyerapan tenaga kerja yang bertambah,” ungkap Agus.

Namun demikian, menurut Agus, hilirisasi perlu ditopang dengan penggunaan tekno-logi baru, termasuk penerapan era industri 4.0 untuk menggenjot produktivitasnya secara lebih efisien. “Saya senang dan bangga. Kita semua punya pandangan sama mengenai pentingnya inovasi. Pandangan hilirisasi harus didorong di Indonesia. Ini menjadi program utama,” tutur Agus.

Melihat hal tersebut, Agus optimis, sejumlah industri besar skala global ada yang berminat masuk dan membuka kegiatan produksi serta risetnya di Indonesia.

“Sejalan hal itu, pemerintah sedang men-dorong peningkatan kualitas sumber daya manusia dan kegiatan litbang untuk inovasi. Itu menjadi keunggulan komparatif Indonesia dibanding negara lain,” imbuh Agus.

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Evidently, according to Agus, based on the Ministry of Industry's records, downstream industry has been running in various sectors, including mining and plantations. For example in the Morowali Industrial Estate, Central Sulawesi, which has succeeded in downstreaming stainless steel stainless steel.

As an illustration, the original price is only around USD40-60, whereas when it becomes stainless steel the price can be above USD2000. Meanwhile, through the Morowali Industrial Zone, it has been able to penetrate its export value of USD4 billion, both shipping products of hot rolled coil coil lock rolled coil to the United States and China.

The contribution of the Morowali Industrial Estate is also shown from the achievement of investment that continues to show an increase, from 2017 amounting to USD3.4 billion to USD5 billion throughout 2018. The number of employees absorbed was quite large to 30 thousand people.

"Another leap of progress in the application of downstream industries, namely exports of processed palm oil which is dominated by downstream products has tended to increase in the last five years. Its contribution to foreign exchange earnings is quite significant. In 2018, the export volume ratio of raw materials and down-stream products is 19 percent compared to 81 percent," said Agus.

Moreover, according to Agus Indonesia is the largest producer of crude palm oil (CPO) and crude palm kernel oil (CPKO) with production in 2018 of 47 million tons. The growth rate of palm oil production is also expected to increase significantly. "Meanwhile, exports of palm oil and its derivatives have contributed to the country's foreign exchange to USD22 billion per year," Agus said.

Terbukti, menurut Agus, berdasarkan catatan Kemenperin, hilirisasi industri telah berjalan di berbagai sektor, antara lain pertambangan dan perkebunan. Contohnya di Kawasan Industri Morowali, Sulawesi Tengah, yang sudah berhasil melakukan hilirisasi terhadap nickel ore menjadi stainless steel.

Sebagai gambaran, harga nickel ore kalau dijual hanya sekitar USD40-60, sedangkan ketika sudah menjadi stainless steel harganya bisa di atas USD2000. Sementara itu, melalui Kawasan Industri Morowali, sudah mampu menembus nilai ekspornya sebesar USD4 miliar, baik itu pengapalan produkhot rolled coilmaupuncold rolled coilke Amerika Serikat dan China.

Kontribusi Kawasan Industri Morowali, juga diperlihatkan dari capaian investasi yang terus menunjukkan peningkatan, dari tahun 2017 sebesar USD3,4 miliar menjadi USD5 miliar sepanjang tahun 2018. Jumlah penyerapan tenaga kerjanya pun terbilang sangat besar hingga 30 ribu orang.

“Lompatan kemajuan lainnya pada penerapan hilirisasi industri, yakni ekspor dari olahan sawit yang didominasi produk hilir cenderung meningkat dalam kurun lima tahun terakhir. Kontribusinya ter-hadap perolehan devisa cukup signifikan. Pada tahun 2018, rasio volume ekspor bahan baku dan produk hilir sebesar 19 persen banding 81 persen,” papar Agus. Apalagi, menurut Agus Indonesia merupa-kan produsen terbesar minyak sawit mentah (CPO) dan minyak kernel sawit mentah (CPKO) dengan produksi pada 2018 sebesar 47 juta ton. Laju pertum-buhan produksi minyak sawit pun diper-kirakan meningkat signifikan. “Sementara itu, ekspor minyak sawit dan produk turunannya telah menyumbang devisa negara hingga USD22 miliar per tahun,” ucap Agus.

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On the other hand, the Ministry of Industry is proactively encouraging the develop-ment of the internet of things (IoT) in order to strengthen the structure of digital technology in Indonesia in an effort to implement the 4.0 industrial revolution. Moreover, Indonesia will transform into an IoT business ecosystem valued at Rp444 trillion by 2022.

Indonesia's opportunity to become an IoT ecosystem is considered to be very large. This potential can be seen from the number of internet users in the country of more than 140 million people. Therefore, the transformation of industry 4.0 is one of the keys to the successful development of Indonesia in the future.

In fact, the implementation of Industry 4.0 is also considered to encourage increased investment by companies, especially those related to the use of the latest technology such as IoT. This step is believed to be able to support an increase in the productivity and competitiveness of the manufacturing sector and can create an innovation ecosystem. gro

Disisi lain, Kemenperin turut proaktif mendorong pengembangan internet of things (IoT) guna memperkuat struktur teknologi digital di Indonesia dalam upaya menuju implementasi revolusi industri 4.0. Apalagi, Indonesia bakal bertransformasi menjadi ekosistem bisnis IoT bernilai sebesar Rp444 triliun pada tahun 2022. Peluang Indonesia menjadi ekosistem IoT dinilai sangat besar. Potensi ini bisa dilihat dari jumlah pengguna internet di Tanah Air yang lebih dari 140 juta orang. Oleh karena itu, transformasi industri 4.0 adalah salah satu kunci sukses pembangunan Indonesia pada masa mendatang.

Bahkan, implementasi industri 4.0 juga dinilai akan mendorong peningkatan investasi oleh perusahaan, terutama yang terkait dengan penggunaan teknologi terkini seperti IoT. Langkah tersebut diyakini dapat mendukung peningkatan pada produktivitas dan daya saing sektor manufaktur serta dapat menciptakan eko-sistem inovasi. gro

Moody's Maintains Ba3 Rating

for Indika Energy

Rahajeng Kusumo Hastuti, CNBC Indonesia

R

ATING Agency Moody's Investors Service maintains the rating of the company group PT Indika Energy Tbk (INDY) at Ba3 with a stable outlook.

The rating applies to Energy Finance II Bonds worth US$ 285 million, which mature in 2023, Indika Energy Capital II Pte Ltd Bonds worth US$ 265 million, which will mature in 2022, and Indika Energy Capital III Pte Ltd Bonds. valued at US$ 575 million due in 2024.

Moody's Pertahankan Peringkat

Ba3 untuk Indika Energy

Rahajeng Kusumo Hastuti, CNBC Indonesia

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EMBAGA Pemeringkat Moody's Investors Service mempertahankan peringkat grup perusahaan PT Indika Energy Tbk (INDY) pada peringkat Ba3 dengan outlook stabil. Peringkat tersebut berlaku untuk Obligasi Energy Finance II senilai US$ 285 juta, yang jatuh tempo 2023, Obligasi Indika Energy Capital II Pte Ltd senilai US$ 265 juta yang jatuh tempo 2022, dan Obligasi Indika Energy Capital III Pte Ltd. senilai US$575 juta yang jatuh tempo 2024.

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Moody's analyst Maisam Hasnain said the rating for Indika Energy Group reflects expectations of the obligor's ability to repay debt.

"Despite the weakening in its credit metrics, Indika Energy's credit profile will be supported by stable operations, strong liquidity, and compliance with careful and prudent financial policies," Maisam said in his official statement on Thursday (02/06/ 2020).

Moody's rate, Indika Energy has committed to maintain a solid balance sheet in the midst of falling coal prices. Maisam said the company has a large cash balance of around US$ 611 million as of 30 September 2019, with no short-term debt until 2022.

In addition, the rating is also based on aspects of Environmental, Social, and Governance (ESG) including, mitigation conducted by Indika Energy to prevent environmental damage and reduce carbon emissions. In this effort, Indika carries out clean and environmentally friendly coal production.

The coal company is also diversifying its markets in Asia-region countries that have high energy needs and coal is an economical energy source.

Second, sustainability initiatives, particularly in the fields of education, health, environment, and community empowerment carried out by the Indika Foundation. Third, although the majority shareholder owns 68% of the company's shares, the risk of corporate governance is mitigated by Indika Energy's status as a publicly listed company and its good reputation for maintaining sound financial policies.

Analis Moody's Maisam Hasnain mengata-kan peringkat untuk Indika Energy Group mencerminkan ekspektasi akan kemam-puan obligor untuk melunasi utangnya. "Meski terdapat pelemahan dalam metrik kreditnya, profil kredit Indika Energy akan didukung oleh operasinya yang stabil, likuiditas yang kuat, serta kepatuhan terhadap kebijakan keuangan yang cermat dan hati-hati," ujar Maisam dalam kete-rangan resminya, Kamis (6/2/2020). Moody's menilai, Indika Energy telah berkomitmen menjaga neraca keuangan agar tetap solid di tengah penurunan harga batubara. Maisam mengatakan perusahaan ini memiliki saldo kas besar sekitar US$ 611 juta per 30 September 2019, tanpa hutang jangka pendek hingga 2022.

Selain itu, pemberian rating ini juga berdasarkan aspek Environmental, Social, and Governance (ESG) diantaranya, mitigasi yang dilakukan Indika Energy untuk mencegah kerusakan lingkungan dan mengurangi emisi karbon. Dalam upayanya ini, Indika melakukan produksi batubara bersih dan ramah lingkungan.

Perusahaan batu bara ini juga melakukan diversifikasi pasar di negara-negara Asia-region yang memiliki kebutuhan energi tinggi dan batubara merupakan sumber energi yang ekonomis.

Kedua, inisiatif sustainability (keber-lanjutan) khususnya dalam bidang pendidikan, kesehatan, lingkungan, dan pemberdayaan masyarakat yang dilakukan oleh Indika Foundation. Ketiga, meski pemegang saham mayoritas memiliki 68% saham perusahaan, risiko tata kelola perusahaan dimitigasi dengan status Indika Energy sebagai perusahaan terbuka dan reputasinya yang baik dalam mem-pertahankan kebijakan keuangan yang cermat.

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"This same rating and stable outlook reflects Moody's expectations of Indika Energy to maintain its credit profile, and its conservative approach to investment and shareholder returns. The company also maintains strong liquidity and proactive debt management," Maisam said. (dob/dob)

"Rating yang sama dan outlook yang stabil ini merefleksikan ekspektasi Moody's ter-hadap Indika Energy untuk menjaga profil kredit, dan pendekatannya konservatifnya terhadap investasi maupun imbal hasil pemegang saham. Perusahaan juga mem-pertahankan likuiditas yang kuat dan manajemen hutang yang proaktif," kata Maisam. (dob/dob)

Copper Prices Enter the

Consolidation Area

Finna U. Ulfah

C

OPPER prices entered the consolidation area after a sharp decline in recent trading due to the sentiment of the corona virus outbreak. The outbreak is projected to slow down the economic growth of China, one of the countries with the largest economy in the world.

Capital Futures analyst Wahyu Laksono said copper has become one of the most depressed commodities besides oil due to corona virus sentiment. Because the demand from China accounts for about 50 percent of world metal demand. On the other hand and corona virus has weakened China's economic activity.

In fact, at the beginning of the year, the prospect of copper prices was believed to be better. The market assesses that demand for copper will improve and on the other hand supply is increasingly limited so that in the long run copper has promising prospects.

"In the short term it is still bad because of the corona virus, but in the long run the copper is still quite good," Wahyu said to Bisnis, Thursday (02/06/2020).

Harga Tembaga Masuk Area

Konsolidasi

Finna U. Ulfah

H

ARGA tembaga memasuki area konsoli-dasi setelah terjadi penurunan tajam dalam beberarapa perdagangan terakhir akibat sentimen wabah virus corona. Wabah itu diproyeksi memperlambat pertumbuhan ekonomi China, salah satu negara dengan ekonomi terbesar di dunia.

Analis Capital Futures Wahyu Laksono mengatakan tembaga telah menjadi salah satu komoditas yang paling tertekan selain minyak akibat sentimen virus corona. Pasalnya, permintaan dari China menyum-bang sekitar 50 persen terhadap permin-taan logam dunia. Di sisi lain dan virus corona telah melemahkan aktivitas eko-nomi China.

Padahal, di awal tahun, prospek harga tembaga diyakini lebih cetah. Pasar menilai kebutuhan terhadap tembaga akan semakin membaik dan di sisi lain pasokan semakin terbatas sehingga dalam jangka panjang tembaga punya prospek yang menjanjikan. “Secara jangka pendek memang masih buruk karena virus corona, tetapi jangka panjang tembaga masih cukup baik,” ujar Wahyu kepada Bisnis, Kamis (6/2/2020).

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Therefore, reversing the current strengthening of copper prices after the longest decline in history gives a signal that copper prices have entered the consolidation area to move to strengthen. Wahyu said the copper price consolidation area was around US$ 5,000 per ton. At present, the price of copper will test the lowest level since May 2017 in the range of US$ 5,464 per ton, if through that level copper has the potential to drop to the lowest level since January 2016 in the range of US$ 4,317 per ton.

However, he projected that throughout the first quarter of this year copper prices would move in the range of US$ 4,300 per ton to US$ 6,500 per ton. The movement will be determined by the world's anticipation of the impact of the corona virus outbreak.

At the close of trading on Thursday (2/2/2020), copper prices on the London stock exchange moved up 1.85 percent to US$ 5,722 per ton. The strengthening was supported by liquidity assistance by the Chinese government to the market which also aroused risky investment sentiment, including copper.

"The year 2020 will be determined by the extent to which the issue of the corona virus is spreading, is this virus a black swan 2020 that is pressing the financial markets and global commodities?" Editor: Rivki Maulana

Oleh karena itu, berbalik menguatnya harga tembaga saat ini setelah mengalami penurunan terlama sepanjang sejarah memberikan sinyal bahwa harga tembaga telah memasuki area konsolidasi untuk bergerak menguat.

Wahyu mengatakan,area konsolidasi harga tembaga berada di sekitar US$5000-an per ton. Saat ini, harga tembaga akan menguji level terendah sejak Mei 2017 di kisaran US$5.464 per ton, jika menembus level tersebut tembaga berpotensi anjlok ke level terendah sejak Januari 2016 di kisaran US$4.317 per ton.

Namun, dia memproyeksi sepanjang kuartal pertama tahun ini harga tembaga bergerak di kisaran US$4.300 per ton hingga US$6.500 per ton. Pergerakan akan ditentukan oleh antisipasi dunia terhadap dampak wabah virus corona.

Pada penutupan perdagangan Kamis (6/2/2020), harga tembaga di bursa London bergerak naik 1,85 persen menjadi US$5.722 per ton. Penguatan tersebut didukung oleh bantuan likuidas oleh pemerintah China ke pasar yang juga membangkitkan sentimen investasi aset berisiko, termasuk tembaga.

“Tahun 2020 akan ditentukan oleh sejauh mana isu virus corona ini merebak, apakah virus ini merupakan black swan 2020 yang menekan pasar finansial dan komoditas global?” ujar Wahyu. Editor : Rivki Maulana

Barrick Gold denies Freeport-McMoran tie-up in the works

By Helen Reid

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ARRICK Gold is not looking to merge with copper miner Freeport-McMoran, CEO Mark Bristow said on Thursday, although he is interested in the company’s Grasberg mine in Indonesia, and indicated he wants to expand in the Pacific Rim.

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Rumours the world’s second-largest gold miner planned to combine with Freeport are “completely wrong”, Bristow told Reuters on the sidelines of the Mining Indaba conference in Cape Town.

But he said he was interested in Freeport’s Grasberg mine in Indonesia - the world’s largest gold mine, and second-largest copper mine.

“People say, are you interested in Grasberg? I say I have to be, it’s a tier one asset,” he said. Tier one assets refer to high-grade, long-life mines.

The CEO wants to grow Barrick’s copper business to capitalise on a projected increase in demand because of the rising popularity of electric vehicles.

“If you’re going to be a world-class gold miner, you’re going to have to accept copper. In ten years’ time the most strategic metal on this planet is copper, if you believe the EV story, and I do,” said Bristow.

He cautioned, however, that he was far from finding a deal that would work.

Freeport-McMoran, which traces its roots back to 1834, could bring with it legacy risk, he said. “Freeport is a very old company and it has bought lots of very old companies so there’s risk, rehabilitation liabilities... and also you would never want to go in a place like Indonesia without proper due diligence,” he said.

Freeport-McMoran’s CEO has said he would consider acquisitions, mergers, or other deals once three ongoing expansion projects finish by 2022.

PAPUA NEW GUINEA OFFER

Struggling with unrest at the Porgera mine in Papua New Guinea (PNG), Bristow told Reuters that Barrick offered the government a 52% share of the economic benefits of the mine in response to government demands for a larger stake.

“Our principle is 50-50, like we did with Tanzania,” he said. “In fact in this case we will pay a little bit more than 50.”

Barrick last month signed a deal with Tanzania that gave the state a 16% stake in each of the company’s three gold mines in the country and an equal share of the economic benefits from the mines, ending a bitter tax dispute.

If Barrick succeeds in resolving the dispute in PNG, the market will be more comfortable with the company taking on more risk in the copper- and gold-rich Pacific Rim, Bristow said. Papua New Guinea called off negotiations with ExxonMobil on the P’nyang gas project last Friday, blaming the energy giant for inflexibility over the government’s demand for a bigger stake.

Asked about the Lumwana copper mine in Zambia, Bristow said he wouldn’t necessarily sell it, and could instead look for a partner in Zambia or a deal with a copper processor.

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Copper price & coronavirus: Don’t expect small SARS-like impact

Frik Els

T

HE COPPER price continued to recover on Thursday as investors bet on a quick bounce back in economic activity in China once the viral outbreak is brought under control.

After bottoming on Monday below $2.50 a pound, the lowest since May 2017, copper has rebounded by more than 5% to trade as high as $2.6225 a pound ($5,780 a tonne) in New York on Thursday.

In a note, Capital Economics says the gains may be speculative based on some investors’ conviction that the metal was oversold after falling through its 200-day moving average. But, says the London-based independent researcher, “it is too early to call the bottom”:

If the 2002-03 SARS outbreak is any guide, China’s copper consumption could decline by roughly 500,000 tonnes as a result of the coronavirus.

That would be much larger than the deficit of around 100,000 tonnes we had expected in the copper market this year.

Corona is no SARS

There was little indication on Thursday that Beijing was close to ending the crisis as confirmed cases climbed to 28,060, suspected cases to 24,702 and the death toll topped 564, according to official media.

In a report, commodities research consultants Wood Mackenzie warns that comparisons to SARS may underestimate the impact on copper, which due to its widespread use in industry and construction, is vulnerable to broader economic weakness.

Today China is responsible for roughly half the world’s copper consumption, but in 2003 the country’s share was only 19%.

WoodMac also points out that SARS emerged as a national health emergency in April 2003, when most people had returned to their working cities from the Chinese New Year Holiday, minimizing disruption to industrial activity.

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Another reason the current outbreak could have a larger impact is that disruption due to SARS was mainly focused on the Guangdong province and Beijing, but the coronavirus is now spreading to most of the country’s economic centres.

Metso breaks records as it looks forward to more growth

Posted by Daniel Gleeson

I

T WAS a record year in terms of profitability for Metso in 2019; a year that saw the minerals processing company make several strategic decisions to fundamentally change its group structure.

Orders received across the group increased 5% to €3.7 billion ($4.1 billion), with sales growing 15% to €3.635 billion. Adjusted EBITA rose from €369 million in 2018 to €474 million (13% of sales) in 2019, while operating profit jumped to €418 million from €351 million.

Metso President and CEO, Pekka Vauramo, said 2019 was in many ways historical and transformational for the company.

“It also marked a record in our financial performance, as our sales increased in both segments and our profitability was higher than ever in the company’s history,” he said.

The company also launched some major new products – including the Metso Truck Body and the VPX filter – in addition to publishing the Metso Climate Program, which aims for notable reductions in emissions.

The year will be remembered for two major strategic decisions from Metso.

“The first was the acquisition of McCloskey, a Canadian supplier of mobile aggregates crushers and screens,” Vauramo said. “After the closing of the acquisition in October, Metso’s offering strengthened in the mobile aggregates equipment market, which is estimated to see the industry’s fastest-growing demand.”

“The second and truly transformative step was the decision related to the partial demerger of Metso, after which Metso’s Minerals business will be combined with Outotec to create Metso Outotec, a unique company in the minerals, metals and aggregates industries,” Vauramo said. At the same time as this, the company took the decision to allow its valves business to continue as an independent listed company named Neles.

Vauramo said: “We are confident that, as a result of this transaction, both companies will be well-positioned to grow and create value for our customers and other stakeholders.”

Shareholders of both Metso and Outotec approved the transaction in October at respective meetings and internal preparations have proceeded according to plan, Vauramo said.

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The completion of the transaction still requires approvals from the competition authorities in various markets, but according to the company’s estimate, closing should take place on June 30, 2020.

Australian resources exports continue to soar - ABS

By: Esmarie Iannucci, Creamer Media Senior Deputy Editor: Australasia

N

EW data by the Australian Bureau of Statistics (ABS) has shown that Australia’s minerals, metals and energy exports reached a record new high of A$290-billion in 2019, a 17% increase from the previous record set in 2018.

The ABS showed that iron-ore exports reached a record A$97-million during the year, while gold reached a record A$24-billion and copper a record A$10-billion, while coal exports remained high at A$65-billion.

The Minerals Council of Australia on Thursday said that the ABS data emphasised the importance of the resources industry to the Australian economy.

“Mining provides the economic bedrock for the Australian government to meet its immediate and long-term challenges,” said CEO Tania Constable.

“The growth in resources exports benefits all Australians through the considerable taxes and royalties the industry pays – funding the teachers, nurses, police and infrastructure projects on which all Australians rely.”

US rare earths production up 44% in 2019 - report

MINING.com Editor

T

HE US Geological Survey (USGS) announced Thursday that US mines produced approximately $86.3 billion in minerals in 2019 – more than $2 billion higher than revised 2018 production totals.

US metal mine production in 2019 was estimated to be $28.1 billion, or almost $500 million higher than in 2018. The principal contributors to the total value of metal mine production in 2018 were gold (32%), copper (28%), iron ore (19%) and zinc (7%).

The domestic production of critical rare-earth mineral concentrates increased by 8,000 metric tons (over 44%) in 2019 to 26,000 metric tonnes, making the US the largest producer of rare-earth mineral concentrates outside of China.

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The 43rd annual Mineral Commodity Summaries report from the USGS National Minerals Information Center is the earliest comprehensive source of 2019 world mineral production data for the world.

“The data we are releasing today is vital to understanding which minerals are vulnerable to disruptions in America’s supply chains and provides the analytical foundation for President Trump’s broader strategy to make our economy and defense more secure,” said Jim Reilly, USGS Director in a media statement.

The steel, aerospace and electronics industries processed nonfuel mineral materials creating an estimated $3.13 trillion in value-added products in 2019, which represents a 2.5% increase over 2018.

Foreign dependence continues

The US continues to rely on foreign sources for some raw and processed mineral materials. In 2019, imports made up more than one-half of US apparent consumption for 46 nonfuel mineral commodities, and the US was 100% net import reliant for 17 of those.

For 2019, critical minerals as defined by President Trump’s Executive Order 13817, comprised 14 of the 17 mineral commodities with 100% net import reliance and 17 additional critical mineral commodities had a net import reliance greater than 50% of apparent consumption. The largest number of nonfuel mineral commodities were supplied to the US from China, followed by Canada.

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The Trump administration released “A Federal Strategy to Ensure a Reliable Supply of Critical Minerals,” last year. The strategy directed the US Department of the Interior to locate domestic supplies of critical minerals, ensure access to information necessary for the study and production of minerals and expedite permitting for minerals projects.

USGS said it will conduct at least one multi-commodity critical mineral resource assessment every two years, supplying the results to Federal land managers and the public.

The $86.3 billion worth of nonfuel minerals produced by U.S. mines in 2019 comprised industrial minerals, which includes natural aggregates as well as ferrous and nonferrous metals.

The estimated value of US industrial minerals production in 2019 was $58.2 billion, about 3% more than that of 2018.

US production of 13 mineral commodities were valued at more than $1 billion each in 2019. These were, in decreasing order of value: crushed stone, cement, construction sand and gravel, gold, copper, industrial sand and gravel, iron ore, lime, salt, zinc, soda ash, phosphate rock and molybdenum concentrates.

In 2019, 13 states each produced more than $2 billion worth of nonfuel mineral commodities. The states were, ranked in descending order of production value: Nevada, Arizona, Texas, Minnesota, California, Florida, Utah, Alaska, Missouri, Michigan, Wyoming, Georgia and Pennsylvania.

The report found that vanadium was produced in Utah for the first time since 2013, and of the $36.1 billion of domestically recycled products, iron and steel scrap contributed $17.6 billion.

Arch Coal (ARCH) Reports Q4 Loss, Tops Revenue Estimates

Contributor: Zacks Equity Research - Zacks

A

RCH Coal (ARCH) came out with a quarterly loss of $0.10 per share versus the Zacks Consensus Estimate of a loss of $0.20. This compares to earnings of $4.44 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of 50%. A quarter ago, it was expected that this coal producer would post earnings of $3.29 per share when it actually produced earnings of $4.03, delivering a surprise of 22.49%.

Over the last four quarters, the company has surpassed consensus EPS estimates four times. Arch Coal, which belongs to the Zacks Mining - Miscellaneous industry, posted revenues of $549.48 million for the quarter ended December 2019, surpassing the Zacks Consensus Estimate by 12.73%. This compares to year-ago revenues of $650.96 million. The company has topped consensus revenue estimates four times over the last four quarters.

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The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Arch Coal shares have lost about 18.3% since the beginning of the year versus the S&P 500's gain of 3.2%.

What's Next for Arch Coal?

While Arch Coal has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Arch Coal was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.77 on $505.10 million in revenues for the coming quarter and $10.03 on $2.09 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Mining - Miscellaneous is currently in the top 38% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Russia Looks To Double Coal Exports To China

By Viktor Katona

R

USSIA has been historically associated with oil and gas exports, yet the news somewhat underreports its coal market presence. Although neither the world’s largest coal producer nor exporter, Russia seems to continue with its strategic aim to ramp up coal exports, all the while domestic carbon demand is about to plummet.

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Step by step, first by getting its spare production capacity ready, now by ensuring appropriate infrastructure solutions are there to transport all the goods, Moscow is laying the groundwork for a large-scale expansion that is about to take place in the mid-2020s. Another story that juggles on the border of the political and economical, East Asian markets and nations take central stage in Russia’s export policy, once again.

At first glance, 2019 was not the ideal year for the Russian coal industry. Bumping down from last year’s all-time high, coal production decreased 0.2 percent year-on-year to 439 million tons. Prices both in Europe and Asia have reached multi-year lows this summer, especially the former has seen quotations plummeting amid robust coal-to-gas switch dynamics and market oversupply – both have recovered somewhat in the autumn months, yet Europe witnessed another steep drop this Januarys. Domestic Russian demand for coal was stagnating, too, as coal usage in thermal stations, especially in Southern Siberia where it is predominantly mined, decreased by 3 percent year-on-year all the while coking coal demand remained stagnant. This might seem as a harbinger of future stagnation, yet the industry remains upbeat on Asian demand. In fact, the deeper one digs into Russia’s export plans vis-à-vis East Asia the more interesting it gets.

Exports of Russian coal in 2019 have risen 1 percent year-on-year – ramping up deliveries to the Asia Pacific region was the most powerful driver of growth, whilst the above stated weak European demand counteracted the Asian drive. The Asian surge has not been all rosy in terms of profitability – the Platts’ FOB Russia Pacific (6300kcal/kg) GAR price averaged 78.10 USD per metric ton in 2019, down 29 percent year-on-year from the 2018 level of 108.70 per metric ton – and consequently, coal exporters’ revenues dropped 10-15 percent from 2018. Yet despite the price weakness which given the equally warm winter of 2019/2020 will persist even further, big producers like SUEK or KRU continue to dream big. Testament to their ambition, both companies have used the 2019 demand languor to modernize their producing assets.

Russia’s coal strategy, as ascertained in the nation’s 2035 Energy Strategy, is a long-haul ambition which would not necessarily yield immediate results. In case of coal exports towards the Asia Pacific region, this cannot be done that easily as infrastructure constraints limit producers. As most of oil and gas is now exported via pipelines and coal has become the most important exported commodity in terms of railway throughput (30% of Russian Railways throughput is coal), transportation authorities have been looking into possibilities to expand export capacities. Although mired in delays, the expansion of the Trans-Siberian Railways first to 125mtpa by 2021 and then to 180mtpa by 2024 is Russia’s primordial bid to offer and sell more.

The thing is that Russia’s main production hub in the Kuzbass is roughly equidistant to Western Europe and to East Asia – hence heretofore the export policy maintained a sort of balance between the two directions. Europe, however, was the main reason why global coal demand eventually decreased year-on-year, hence it makes very little sense to place one’s bets on EU markets. The above notwithstanding, the infrastructure squeeze has led the state rail operator, Russian Railways, to offer substantially reduced tariffs on deliveries to Russia’s European ports. One of the least utilized for coal deliveries (some 15 million tons were railed there in 2019), Russia’s Black Sea ports have been witnessing a renaissance of exports as shippers avail themselves of cheap rail tariffs and an increasing takeaway capacity that is bound to reach 50mtpa this year.

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