IMA-Daily Update Page 1

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The benchmark coal price (HBA) in September fell again, pegged at US$ 49.42 per ton Harga batubara acuan (HBA) September kembali anjlok, dipatok US$ 49,42 per ton HPE of Mining Products for the September 2020 Period Increased HPE Produk Pertambangan Periode September 2020 Meningkat Semester I/2020, Bumi Resources (BUMI) Production Increases 5 Percent Semester I/2020, Produksi Bumi Resources (BUMI) Naik 5 Persen Attract Millennial Investors, Antam Boosts Digital Gold Sales Gaet Investor Milenial, Antam Genjot Penjualan Emas Digital The average selling price of coal issuers fell, this is the recommendation of the analyst Rata-rata harga jual emiten batubara turun, ini rekomendasi analis Freeport and Pertamina Reprimanded EMR Minister Arifin Tasrif Freeport dan Pertamina Disentil Menteri ESDM Arifin Tasrif Bumi Resources (BUMI) Obtains 90 Percent of Coal Sales Contracts Bumi Resources (BUMI) Kantongi 90 Persen Kontrak Penjualan Batu Bara To support customary preservation, PT NHM helps four tribes around the mine for Rp. 1 billion per year Dukung Pelestarian Adat, PT NHM Bantu Empat Suku di Lingkar Tambang Rp 1 Miliar Per Tahun This causes the issuer's coal production is more efficient Ini penyebab produksi emiten batubara lebih efisien Just Soaring High, It Looks Like Coal Prices Will Drop Again Baru Melesat Tinggi, Harga Batu Bara Kayaknya Mau Ambrol

Kontan Pelaku Bisnis Bisnis CNBC Indonesia Kontan Sindonews Bisnis Harian Halmahera Kontan CNBC Indonesia

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Lagi Waiting for Copper Price to Penetrate US$ 7,000 Menanti Harga Tembaga Tembus US$7.000 Indonesia's Sept coal price at record low, miners say oversupply worsens Coal production falls 7% in Apr-Aug; offtake dips 13.4% Peru copper mining almost 'completely recovered' from pandemic: official Barrick takes dispute over Porgera mining rights to PNG Supreme Court Colombian July coal exports fall 15% on month, 6.6% on year Unleashing coal: inside India’s plans to open up commercial coal mining

Bisnis Energy World Financial Express Reuters Mining.com S&P Global Platts Mining Technology

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The benchmark coal price (HBA) in September fell again, pegged

at US$49.42 per ton Reporter: Ridwan Nanda Mulyana | Editor:

Handoyo

REFERENCE Coal Prices (HBA) in September continued their downward trend. The September HBA was pegged at US$ 49.42 per ton, down US$ 0.92 per ton from last month's HBA at US$ 50.34 per ton.

The Head of the Communication Bureau, Public Information Services and Cooperation (KLIK), Ministry of EMR, Agung Pribadi, said that the Covid-19 pandemic continues to suppress domestic coal consumption and global market interest. This lack of absorption is inseparable from the economic recovery of China and India, which are the main targets of Indonesian coal sales.

This condition has resulted in an abundance of coal reserves in the two countries so that the need for coal imports has decreased. "Covid-19 caused a decline in coal imports by China by 20% and demand from India has not yet recovered after the lockdown," said Agung in his written statement, Tuesday (1/9).

He explained, since Covid-19 was declared a global pandemic throughout 2020, the HBA had strengthened by 0.28% to US$ 67.08 per ton in March compared to February at US$ 66.89 per ton. Then, the HBA continued to weaken to US$ 65.77 per ton in April and US$ 61.11 per ton in May.

Furthermore, in June it fell again to US$ 52.98 per ton and in July it fell again to US$ 52.16 per ton. For information,...

Harga batubara acuan (HBA) September kembali anjlok, dipatok US$49,42 per ton

Reporter: Ridwan Nanda Mulyana | Editor: Handoyo

HARGA Batubara Acuan (HBA) bulan

September kembali melanjutkan tren penu-runan. HBA September dipatok US$ 49,42 per ton, turun US$ 0,92 per ton dari HBA bulan lalu yang sebesar US$ 50,34 per ton.

Kepala Biro Komunikasi, Layanan Informasi Publik dan Kerja Sama (KLIK), Kementerian ESDM Agung Pribadi mengatakan, pandemi Covid-19 masih terus menekan konsumsi batubara domestik dan minat pasar global. Minimnya serapan ini tak lepas dari belum pulihnya perekonomian Tiongkok dan India yang menjadi target utama penjualan batu-bara Indonesia.

Kondisi ini berujung pada cadangan batubara di kedua negara tersebut melimpah sehingga kebutuhan impor batubara menurun. "Covid-19 menyebabkan penurunan impor batubara oleh Tiongkok sebesar 20% dan belum pulihnya permintaan dari India pasca-lockdown," ungkap Agung dalam keterangan tertulisnya, Selasa (1/9).

Dia menjelaskan, sejak Covid-19 ditetapkan sebagai pandemi global sepanjang tahun 2020, HBA sempat menguat sebesar 0,28% pada angka US$ 67,08 per ton di bulan Maret dibanding bulan Februari US$ 66,89 per ton. Kemudian, HBA terus mengalami pelemahan ke angka US$ 65,77 per ton di bulan April dan US$ 61,11 per ton di bulan Mei.

Selanjutnya di bulan Juni kembali turun ke angka US$ 52,98 per ton dan di bulan Juli merosot lagi di US$ 52,16 per ton. Sebagai informasi,...

IMA-Daily Update Page 4

For information, the HBA itself is obtained from the average index of the Indonesia Coal Index (ICI), Newcastle Export Index (NEX), Globalcoal Newcastle Index (GCNC), and Platts 5900 in the previous month. The equivalent quality of calories is 6322 kcal per kilogram of GAR.

Later, this reference price will be used directly in the sale and purchase of coal commodities (spot) for one month at the point of delivery of free on board sales on a carrier vessel (FOB Vessel).

Sebagai informasi, HBA sendiri diperoleh dari rata-rata indeks Indonesia Coal Index (ICI), Newcastle Export Index (NEX), Globalcoal Newcastle Index (GCNC), dan Platts 5900 pada bulan sebelumnya. Kualitas yang disetarakan pada kalori 6322 kcal per kilogram GAR.

Nantinya, harga acuan ini akan digunakan secara langsung dalam jual beli komoditas batubara (spot) selama satu bulan pada titik serah penjualan secara Free on Board di atas kapal pengangkut (FOB Vessel).

HPE of Mining Products for the September 2020 Period

Increased

TOWARDS the end of August 2020, the prices of several mining product commodities showed a positive trend amid the Covid-19 pandemic. This is because the prices of several mining product commodities have increased significantly due to increased world demand.

This condition affects the determination of the export benchmark price (HPE) of mining products subject to export duty (BK) for the period of September 2020. This provision is stipulated in the Regulation of the Minister of Trade Number 70 of 2020, dated 27 August 2020.

"HPE for mining products for the period of September 2020 experienced fluctuations, including copper concentrate, iron concentrate, laterite iron concentrate, lead concentrate, zinc concentrate, iron sand concentrate, i lmenite and bauxite concentrates that have been washed, which increased compared to last month's period.

HPE Produk Pertambangan Periode September 2020

Meningkat

MENUJU periode akhir Agustus 2020, harga beberapa komoditas produk pertambangan menunjukkan tren positif di tengah pandemi Covid-19. Hal ini dikarenakan harga bebe-rapa komoditas produk pertambangan meng-alami kenaikan yang cukup signifikan akibat adanya permintaan dunia yang meningkat.

Kondisi ini mempengaruhi penetapan harga patokan ekspor (HPE) produk pertambangan yang dikenakan bea keluar (BK) untuk periode September 2020. Ketentuan ini ditetapkan dalam Peraturan Menteri Perdagangan Nomor 70 Tahun 2020, tanggal 27 Agustus 2020.

“HPE produk pertambangan periode September 2020 mengalami fluktuasi di antaranya komoditas konsentrat tembaga, konsentrat besi, konsentrat besi laterit, konsentrat timbal, konsentrat seng, konsentrat pasir besi, konsentrat ilmenite dan bauksit yang telah dilakukan pencucian mengalami kenaikan dibandingkan periode bulan lalu.

IMA-Daily Update Page 5

Prices of several mining product

commodities have started to increase due

to increased world demand. Meanwhile,

manganese concentrate commodity prices

decreased due to excess supplies and also

decreased market demand in manganese

refineries in China. In addition, rutile

concentrate has also experienced a decline

in price due to the decreasing demand for

rutile concentrate in the steel industry,"

said Director General of Foreign Trade Didi

Sumedi.

A number of mining products subject to BK

are copper concentrate, iron concentrate,

laterite iron concentrate, iron sand

concentrate, iron sand concentrate pellet,

manganese concentrate, lead concentrate,

zinc concentrate, ilmenite concentrate,

rutile concentrate, and washed bauxite.

The HPE base price calculation for

commodity iron concentrate, laterite iron

concentrate, iron sand concentrate,

manganese concentrate, ilmenite

concentrate and rutile concentrate are

sourced from Asian Metal and Iron Ore

Fine Australian. Meanwhile, copper

concentrate, iron sand concentrate pellets,

lead concentrate, zinc concentrate, and

bauxite are sourced from the London Metal

Exchange (LME).

Compared to the previous period, mining

products that experienced an average price

increase in the period of September 2020

were copper concentrate (Cu ≥ 15 percent)

with an average price of USD 2,855.44/WE

or an increase of 7.45 percent, iron

concentrate ( hematite, magnetite) (Fe ≥

62 percent and ≤ 1 percent TiO2) with an

average price of USD 99.70/WE or an

increase of 11.22 percent.

Harga beberapa komoditas produk pertambangan sudah mulai mengalami kenaikan dikarenakan adanya permintaan dunia yang meningkat. Sementara itu, komoditas konsentrat mangan mengalami penurunan harga dikarenakan adanya kelebihan supplai dan juga penurunan permintaan pasar di pabrik pemurnian mangan di Tiongkok. Selain itu, konsentrat rutil juga mengalami penurunan harga dikarenakan permintaan konsentrat rutil pada industri baja mengalami penurunan,” kata Direktur Jenderal Perdagangan Luar Negeri Didi Sumedi.

Sejumlah produk pertambangan yang dikenakan BK adalah konsentrat tembaga, konsentrat besi, konsentrat besi laterit, konsentrat pasir besi, pellet konsentrat pasir besi, konsentrat mangan, konsentrat timbal, konsentrat seng, konsentrat ilmenit, konsentrat rutil, dan bauksit yang telah dilakukan pencucian.

Perhitungan harga dasar HPE untuk komo-ditas konsentrat besi, konsentrat besi laterit, konsentrat pasir besi, konsentrat mangan, konsentrat ilmenit, dan konsentrat rutil bersumber dari Asian Metal dan Iron Ore Fine Australian. Sedangkan konsentrat tembaga, pellet konsentrat pasir besi, konsentrat timbal, konsentrat seng, dan bauksit bersumber dari London Metal Exchange (LME).

Dibandingkan periode sebelumnya, produk pertambangan yang mengalami kenaikan harga rata-rata pada periode bulan September 2020 adalah konsentrat tembaga (Cu ≥ 15 persen) dengan harga rata-rata sebesar USD 2.855,44/WE atau naik sebesar 7,45 persen, konsentrat besi (hematit, magnetit) (Fe ≥ 62 persen dan ≤ 1 persen TiO2) dengan harga rata-rata sebesar USD 99,70/WE atau naik sebesar 11,22 persen.

IMA-Daily Update Page 6

Then, laterite iron concentrates (gutite, hematite, magnetite) with levels (Fe ≥ 50 percent and (Al2O3 + SiO2) ≥ 10 percent) with an average price of USD 50.95/WE or an increase of 11.22 percent, concentrate lead (Pb ≥ 56 percent) with an average price of USD 771.38/WE or an increase of 4.55 percent, zinc concentrate (Zn ≥ 51 percent) with an average price of USD

550.45/WE or an increase of 10.63 percent.

Furthermore, iron sand concentrate (lamella magnetite-ilmenite) (Fe ≥ 56 percent) with an average price of USD

59.53/WE or an increase of 11.22 percent, ilmenite concentrate (TiO2 ≥ 45 percent) with an average price amounting to USD 275.83/WE or an increase of 4.38 percent, and Bauxite that has been washed (Al2O3 ≥ 42 percent) with an average price of USD

22.96/WE or an increase of 6.12 percent.

Meanwhile, the products that had decreased compared to the previous HPE were manganese concentrate (Mn ≥ 49 percent) with an average price of USD 212.93/WE or a decrease of 21.18 percent

and rutile concentrate (TiO2 ≥ 90 percent) with an average price an average of USD 856.34/WE or decreased by 3.39 percent.

Meanwhile, iron sand concentrate pellets

(lamella magnetite-ilmenite) (Fe ≥ 54) with an average price of USD 117.98/WE did not change.

According to Didi, the HPE fo r the September 2020 period was determined after paying attention to various written inputs and coordination from various related agencies. sp

Lalu, konsentrat besi laterit (gutit, hematit, magnetit) dengan kadar (Fe ≥ 50 persen dan (Al2O3 + SiO2) ≥ 10 persen) dengan harga rata-rata sebesar USD 50,95/WE atau naik sebesar 11,22 persen, konsentrat timbal (Pb ≥ 56 persen) dengan harga rata-rata sebesar USD 771,38/WE atau naik sebesar 4,55 persen, konsentrat seng (Zn ≥ 51 persen) dengan harga rata-rata sebesar USD 550,45/WE atau naik sebesar 10,63 persen.

Selanjutnya, konsentrat pasir besi (lamela magnetit-ilmenit) (Fe ≥ 56 persen) dengan harga rata-rata sebesar USD 59,53/WE atau naik sebesar 11,22 persen, konsentrat ilmenit (TiO2 ≥ 45 persen) dengan harga rata-rata sebesar USD 275,83/WE atau naik sebesar 4,38 persen, dan Bauksit yang telah dilakukan pencucian (washed bauxite) (Al2O3 ≥ 42 persen) dengan harga rata-rata sebesar USD 22,96/WE atau naik sebesar 6,12 persen.

Sedangkan produk yang mengalami penurunan dibandingkan HPE periode sebelumnya adalah konsentrat mangan (Mn ≥ 49 persen) dengan harga rata-rata sebesar USD 212,93/WE atau turun sebesar 21,18 persen dan konsentrat rutil (TiO2 ≥ 90 persen) dengan harga rata-rata sebesar USD 856,34/WE atau turun sebesar 3,39 persen.

Sementara itu, pellet konsentrat pasir besi (lamela magnetit-ilmenit) (Fe ≥ 54) dengan harga ratarata USD 117,98/WE tidak meng-alami perubahan.

Menurut Didi, HPE periode September 2020 ini ditetapkan setelah memperhati-kan berbagai masukan tertulis dan koor-dinasi dari berbagai instansi terkait. sp

IMA-Daily Update Page 7

Semester I/2020, Bumi Resources (BUMI) Production

Increases 5 Percent Finna U. Ulfah

COAL mining company PT Bumi Resources Tbk recorded a production growth of 5 percent in the first semester of 2020.

Bumi Resources Director and Corporate Secretary Dileep Srivastava said the company can still maintain its operational performance even though the coal sector is still not conducive, and the pandemic continues.

BUMI's coal production volume during the first six months of this year was 41 million tons, up 5 percent from 39.1 million tons in semester I/2019.

The company's overburden removal rose 11 percent to 326.6 million bcm from the same period last year of 294.8 million bcm.

Meanwhile, BUMI's total coal inventory by the end of June 2020 is 2.7 million tons, up 5 percent from the previous 2.6 million tons in semester I/2019.

"Although market uncertainty still weighs on coal prices in the short term, the company believes that in the future the coal industry will continue to grow, especially with the development of coal downstream projects in the medium term," said Dileep, Tuesday (9/1/2020).

This year, BUMI is targeting production volumes in the range of 85 million tons to 89 million tons with an average price of US$ 46 per ton to US$ 49 per ton and a cost burden of US$ 32 per ton to US$ 34 per ton.

Meanwhile, BUMI posted a net loss during the first semester of 2020 of US$ 86.17 million. This realization is...

Semester I/2020, Produksi Bumi Resources (BUMI) Naik 5

Persen Finna U. Ulfah

EMITEN pertambangan batu bara PT Bumi

Resources Tbk mencatatkan pertumbuhan pro-duksi sebanyak 5 persen pada semester I/2020.

Direktur dan Corporate Secretary Bumi Resources Dileep Srivastava menyebutkan perseroan masih dapat menjaga kinerja operasional meskipun sektor batu bara masih belum kondusif, dan pandemi yang terus berlanjut.

Volume produksi batu bara BUMI sepanjang enam bulan pertama tahun ini sebesar 41 juta ton, naik 5 persen dari 39,1 juta ton pada semester I/2019.

Overburden removal perseroan naik 11 persen menjadi 326,6 juta bcm dari periode yang sama tahun lalu sebesar 294,8 juta bcm.

Adapun, total inventori batu bara BUMI hingga akhir Juni 2020 sebesar 2,7 juta ton, naik 5 persen dari sebelumnnya sebesar 2,6 juta ton pada semester I/2019.

“Meski ketidakpastian pasar masih mem-bebani harga batubara dalam jangka pendek, perseroan berkeyakinan bahwa ke depannya industri batubara akan terus berkembang, terutama dengan pengembangan proyek-proyek hilirisasi batubara dalam jangka menengah,” papar Dileep, Selasa (1/9/2020).

Pada tahun ini, BUMI menargetkan volume produksi di kisaran 85 juta ton hingga 89 juta ton dengan rata-rata harga US$46 per ton hingga US$49 per ton dan beban biaya sebesar US$32 per ton hingga US$34 per ton.

Sementara itu, BUMI membukukan rugi bersih sepanjang semester I/2020 sebesar US$86,17 juta. Realisasi itu...

IMA-Daily Update Page 8

This realization is inversely proportional

to the achievement in semester I/2019

which recorded a profit for the period

attributable to the parent entity of US$

80.7 million.

Based on the company's financial report,

this is in line with the decline in the

company's revenue to US$ 1.97 billion,

down 13 percent from the same period last

year of US$ 2.27 billion.

In fact, the cost of sales of the issuer coded

as BUMI's shares was successfully reduced

to only US$ 1.73 billion, 7 percent lower

than US$ 1.86 billion in the first semester

of 2019.

Dileep said that the decline in the

company's financial performance in the

first half of this year was caused by the

realization of coal prices in the first

semester of 2020 which experienced a

sharp decline of 12 percent.

Meanwhile, the realization of the coal sales

price in the first semester of 2020 was US$

46.9 per ton, lower than the first semester

of 2019 of US$ 53.2 per ton.

Meanwhile, sales volume was still stable at

41.2 million tons, consisting of sales from

PT Kaltim Prima Coal of 29.5 million tons

and PT Arutmin of 11.6 million tons.

“[The price drop] was due to unstable coal

demand from China, India and most of

Asia. This was triggered by the Covid-19

Pandemic as the main contributing factor,"

he added. Editor: Hafiyyan

Realisasi itu berbanding terbalik dengan capaian semester I/2019 yang men-catatkan laba periode yang dapat di-atribusikan kepada entitas induk sebesar US$80,7 juta.

Berdasarkan laporan keuangan perseroan, hal itu pun sejalan dengan penurunan pendapatan perseroan menjadi sebesar US$1,97 miliar, melemah 13 persen dari-

pada periode yang sama tahun lalu sebesar US$2,27 miliar.

Padahal, beban pokok penjualan emiten berkode saham BUMI itu berhasil ditekan menjadi hanya sebesar US$1,73 miliar, lebih rendah 7 persen dibandingkan dengan US$1,86 miliar pada semester I/2019.

Dileep mengatakan bahwa penurunan kinerja keuangan perseroan pada paruh

pertama tahun ini disebabkan oleh realisasi harga batubara pada semester I/2020 mengalami penurunan tajam sebesar 12 persen.

Adapun, realisasi harga penjualan batu bara pada semester I/2020 sebesar US$46,9 per ton, lebih rendah daripada semester I/2019 sebesar US$53,2 per ton.

Sementara itu, volume penjualan masih stabil di angka 41,2 juta ton yang terdiri atas penjualan dari PT Kaltim Prima Coal

sebesar 29,5 juta ton dan PT Arutmin sebesar 11,6 juta ton.

“[Penurunan harga itu] karena permintaan batubara yang tidak stabil dari China, India, dan sebagian besar Asia. Hal ini dipicu oleh Pandemi Covid- 19 sebagai faktor penyebab utama,” imbuhnya. Editor :

Hafiyyan

IMA-Daily Update Page 9

Attract Millennial Investors, Antam Boosts Digital Gold Sales

Anisatul Umah, CNBC Indonesia

PT ANEKA Tambang Tbk (ANTM) in the future will boost gold sales through digital platforms. This is triggered by the increasing use of the internet, especially among millennials today.

This was conveyed by Retail & Digital Trading Manager of UBPP Logam Mulia Antam Abdul Muluk in a virtual discussion on Tuesday (01/09/2020).

"There has been a significant increase in internet users to 175 million, so that in the future, from the point of view of precious metals, we will develop business towards digital," he explained in the virtual discussion.

Currently, according to him, more and more people are interested in buying gold. The more people are interested in investing in gold, according to him, this also encourages more competitors to enter the gold industry.

"They entered the gold bullion business, but at Antam there is also digital gold, an attractive investment tool," he said.

He further said that currently more and more millennial investors are interested in investing in gold. Not only gold bullion, but also to several other products.

"Currently, the focus on digital metals is expanded, such as payment options and others. The increase in sales is significant with the increase in gold prices and the attractiveness of gold in these conditions will increase the sales side," he explained.

Gaet Investor Milenial, Antam Genjot Penjualan Emas Digital

Anisatul Umah, CNBC Indonesia

PT ANEKA Tambang Tbk (ANTM) ke depan bakal menggenjot penjualan emas melalui platform digital. Hal ini dipicu karena terus meningkatnya penggunaan internet, khususnya di kalangan milenial saat ini.

Hal tersebut disampaikan Retail & Digital Trading Manager UBPP Logam Mulia Antam Abdul Muluk dalam diskusi virtual pada Selasa (01/09/2020).

"Terjadi peningkatan signifikan pengguna internet sampai 175 juta , sehingga memang ke depan dari sisi logam mulia akan kembangkan bisnis ke arah digital," paparnya dalam diskusi virtual tersebut.

Saat ini menurutnya sudah semakin banyak orang tertarik untuk membeli emas. Semakin banyaknya orang berminat investasi emas, maka menurutnya ini juga mendorong semakin banyaknya kompe-titor masuk ke industri emas.

"Mereka masuk ke bisnis emas batangan, tapi di Antam ada juga emas digital, salah satu alat investasi menarik," tuturnya.

Lebih lanjut ia mengatakan, saat ini semakin banyak investor milenial tertarik berinvestasi pada emas. Tidak hanya emas batangan, namun juga ke beberapa produk lain.

"Saat ini fokus ke logam digital diperluas, seperti pilihan pembayaran dan lain-lain. Peningkatan penjualan signifikan dengan kenaikan harga emas dan menariknya emas dalam kondisi seperti ini tingkatkan sisi penjualan," jelasnya.

IMA-Daily Update Page 10

In terms of product supply, according to him, Antam's products are not sufficient to meet domestic demand, so imports are carried out. Therefore, it is undoubtedly affected by exchange rate fluctuations.

"Some of the opportunities we tried to add to our portfolio in gold with new products," he explained. (*)

Dari sisi suplai produk, menurutnya produk Antam belum cukup memenuhi kebutuhan di dalam negeri, sehingga di-lakukan impor. Oleh karena itu, tak ayal terdampak pada fluktuasi kurs.

"Beberapa opportunity tadi kita coba me-nambah portofolio dalam emas dengan produk baru," jelasnya. (*)

The average selling price of coal issuers fell, this is the

recommendation of the analyst Reporter: Dityasa H. Forddanta | Editor:

Anna Suci Perwitasari

THE GLOBAL economy that has not yet recovered is pressing down on commodity prices, including coal. As a result, the global average selling price (ASP) fell.

Along with this decline, PT Bumi Resources Tbk (BUMI)'s ASP in the first semester of 2020 was only US$ 46.9 per ton. This figure is down 11% compared to the same period the previous year which reached US$ 53.2 per ton.

Note only, this ASP refers to the coal ASP of Kaltim Prima Coal and Arutmin Indonesia.

The decrease in production cash costs or BUMI's cash cost could not even cover the decline. BUMI's cash cost during the first half of this year is US$ 32.4 per ton. This value decreased by 13.14% compared to the same period the previous year.

As a result, BUMI's financial performance weakens. In fact, BUMI's operational performance tends to strengthen.

As a result, BUMI's revenue in the January-June 2020 period fell 8% annually to US$ 440.44 million. This Bakrie Group issuer...

Rata-rata harga jual emiten batubara turun, ini rekomendasi

analis Reporter: Dityasa H. Forddanta | Editor:

Anna Suci Perwitasari

PEREKONOMIAN global yang belum pulih menekan harga komoditas, tak terkecuali batubara. Alhasil, rata-rata harga jual atau average selling price (ASP) global turun.

Seiring dengan penurunan tersebut, ASP PT Bumi Resources Tbk (BUMI) di semester I-2020 hanya US$ 46,9 per ton. Angka ini turun 11% dibanding periode yang sama tahun sebelumnya yang capai US$ 53,2 per ton.

Catatan saja, ASP ini mengacu pada ASP batu-bara Kaltim Prima Coal dan Arutmin Indonesia.

Penurunan biaya tunai produksi atau cash cost BUMI bahkan tak mampu menutupi penurunan tersebut. Cash cost BUMI sepanjang paruh pertama tahun ini sebesar US$ 32,4 per ton. Nilai ini turun 13,14% dibanding periode yang sama tahun sebelumnya.

Imbasnya, kinerja keuangan BUMI melemah. Padahal, kinerja operasional BUMI cenderung menguat.

Alhasil, pendapatan BUMI di periode Januari-Juni 2020 turun 8% secara tahunan menjadi US$ 440,44 juta. Emiten Grup Bakrie ini...

IMA-Daily Update Page 11

This Bakrie Group issuer was even forced to record a loss of US$ 86.11 million from the previous profit of US$ 87.16 million.

Even so, BUMI will still pursue operational targets. "Production volume remains at the initial target, 85 million-89 million tons," said Dileep Srivastava to Kontan.co.id, Tuesday (9/1).

Quarter three money, PT Bukit Asam Tbk (PTBA) also experienced the same thing. In the first quarter, the state-owned company ASP fell 4 percent annually to Rp 741,845 per ton.

Andrew Wijaya, RHB Sekuritas analyst, estimates that PTBA's ASP this year is only US$ 44.2 per ton, or the equivalent of around Rp 646,272 per ton. This estimate has been derived from the initial estimate of US$ 49 per tonne.

Even so, efforts to increase transportation capacity will have a positive impact when coal demand improves next year. Andrew still recommends trading buy shares of PTBA with a target price of Rp 2,400 per share.

Emiten Grup Bakrie ini bahkan terpaksa mencatat kerugian US$ 86,11 juta dari sebelumnya untung US$ 87,16 juta.

Meski begitu, BUMI tetap akan mengejar target operasional. "Volume produksi tetap pada target awal, 85 juta-89 juta ton," kata Dileep Srivastava kepada Kontan.co.id, Selasa (1/9).

Setali tiga uang, PT Bukit Asam Tbk (PTBA) pun mengalami hal serupa. ASP per-usahaan pelat merah ini di kuartal pertama kemarin turun 4% secara tahunan menjadi Rp 741.845 per ton.

Andrew Wijaya, analis RHB Sekuritas memperkirakan, ASP PTBA tahun ini hanya US$ 44,2 per ton atau setara sekitar Rp 646.272 per ton. Perkiraan ini sudah diturunkan dari perkiraan awal, US$ 49 per ton.

Meski begitu, upaya peningkatan kapasitas pengangkutan akan berdampak positif ketika permintaan batubara membaik tahun depan. Andrew masih merekomen-dasikan trading buy saham PTBA dengan target harga Rp 2.400 per saham.

Freeport and Pertamina Reprimanded EMR Minister

Arifin Tasrif Rina Anggraeni

MINISTER of Energy and Mineral Resources (MEMR) Arifin Tasrif asked the completion of the strategic project for the construction of PT Freeport's smelter in Gresik, East Java and the PT Pertamina (Persero) Tuban Refinery Project in East Java Province. This is in order to immediately provide real benefits for the Indonesian people.

Freeport dan Pertamina Disentil Menteri ESDM Arifin Tasrif

Rina Anggraeni

MENTERI Energi Dan Sumber Daya

Mineral (ESDM) Arifin Tasrif meminta proyek strategis pembangunan fasilitas pemurnian (smelter) PT Freeport di Gresik, Jawa Timur dan Proyek Kilang Tuban PT Pertamina (Persero) di Provinsi Jawa Timur dipercepat penyelesaiannya. Hal itu agar segera memberi manfaat nyata bagi bangsa Indonesia.

IMA-Daily Update Page 12

"I hope that the PT Freeport smelter project can be completed soon, we will continue to encourage this because if this is done we will only need to encourage the downstream industry so that it can develop," said Minister Arifin in an official statement in Jakarta, Wednesday (2/9/ 2020).

He continued, the construction of the PT

Freeport smelter was carried out within 5 years and is planned to be completed by the end of 2023. "The investment from this project is worth USD 3 billion," he said.

He said the Tuban Refinery Project could be accelerated in completion, because the government is eagerly awaiting this refinery project. "The government also continues to encourage the acceleration of the Tuban Refinery Project. I hope that the

Tuban Refinery Project can also run according to the planned and expected schedule, completed in 2026 and even accelerated," the Minister hoped.

Currently the Tuban Refinery project is in the Engineering/General Engineering Design (GED) study stage with the overall progress of Basic Engineering Design (BED) reaching 51.56%. The Tuban Refinery Project is a very strategic project because the construction of an oil refinery

will be integrated with petrochemicals, with a crude oil processing capacity of 300 thousand barrels of oil per day and petrochemical production reaching 3,600 kilo tonnes per annum (ktpa).

The investment value reaches USD16 billion. In addition, the Tuban Refinery will also produce Euro V (environmentally friendly fuel) quality fuel, namely gasoline at 80 thousand barrels per day and diesel

at 98 thousand barrels per day.

"Saya berharap proyek smelter PT Freeport ini bisa segera selesai, kita akan terus mendorong ini karena jika ini selesai kita tinggal mendorong industri hilirnya supaya bisa berkembang," ujar Menteri Arifin dalam keterangan resmi di Jakarta, Rabu (2/9/2020).

Dia melanjutkan, pembangunan smelter PT Freeport ini dilaksanakan dalam jangka waktu 5 tahun dan direncanakan selesai pada akhir tahun 2023 mendatang. "Inves-tasi dari proyek ini adalah senilai USD 3 miliar," katanya.

Kata dia Proyek Kilang Tuban dapat di-percepat penyelesaiannya, karena proyek kilang ini sangat dinanti -nanti oleh Pemerintah. "Pemerintah juga terus men-dorong percepatan Proyek Kilang Tuban. Saya berharap Proyek Kilang Tuban juga dapat berjalan sesuai jadwal yang telah direncanakan dan diharapkan, selesai pada tahun 2026 bahkan diharapkan dapat dilakukan percepatan," harap Menteri.

Saat ini proyek Kilang Tuban berada pada tahap studi Engineering/General Engineerging Design (GED) dengan progres overall Basic Engineering Design (BED) mencapai 51,56%. Proyek Kilang Tuban merupakan proyek yang sangat strategis karena pembangunan kilang minyak akan terintegrasi dengan petrokimia, dengan kapasitas pengolahan minyak mentah sebesar 300 ribu barel minyak per hari dan produksi petro-chemical mencapai 3.600 kilo ton per annum (ktpa).

Adapun nilai investasinya mencapai USD16 miliar. Selain itu, Kilang Tuban juga akan memproduksi Bahan Bakar Minyak (BBM) dengan kualitas Euro V (BBM ramah lingkungan), yaitu gasoline sebesar 80 ribu barel per hari dan diesel sebesar 98 ribu barel per hari.

IMA-Daily Update Page 13

"I believe this project creates a very large multiplier effect because the target for the Domestic Component Level (TKDN) is quite high, namely at least 40%, and absorbs a workforce of 20 thousand people," concluded the Minister. (akr)

"Saya yakin proyek ini menciptakan multiplier effect yang sangat besar karena target Tingkat Komponen Dalam Negeri (TKDN) yang cukup tinggi, yaitu minimal 40%, dan menyerap tenaga kerja sebanyak 20 ribu orang," pungkas Menteri. (akr)

Bumi Resources (BUMI) Obtains 90 Percent of Coal Sales

Contracts Finna U. Ulfah

THE COAL mining company, PT Bumi Resources Tbk., Has secured sales contracts of up to 90 percent of the total production targeted this year in just the first eight months of 2020.

Bumi Resources Director & Corporate Secretary Dileep Srivastava said that the company is still maintaining its production volume guidelines ta rgeted at the beginning of this year, in the range of 85 million to 89 million tons.

"We have pocketed a sales contract of around 90 percent to achieve this year's production volume target," Srivastava told Bisnis, Tuesday (9/1/2020).

Meanwhile, until June 2020, BUMI's production volume has reached 41 million tons, up 5 percent from 39.1 million tons in the same period last year. The company's overburden removal rose 11 percent to 326.6 million bcm from the same period last year of 294.8 million bcm.

Meanwhile, sales volume in semester I/2020 was still stable at 41.2 million tons, consisting of sales from PT Kaltim Prima Coal of 29.5 million tons and PT Arutmin of 11.6 million tons.

Bumi Resources (BUMI) Kantongi 90 Persen Kontrak

Penjualan Batu Bara Finna U. Ulfah

EMITEN pertambangan batu bara, PT Bumi Resources Tbk., telah mengantongi kontrak penjualan hingga 90 persen dari total produksi yang ditargetkan tahun ini hanya dalam delapan bulan pertama 2020.

Director & Corporate Secretary Bumi Resources Dileep Srivastava mengatakan bahwa perseroan masih tetap memper-tahankan panduan volume produksi yang ditargetkan pada awal tahun ini, di kisaran 85 juta hingga 89 juta ton.

“Kami sudah mengantongi kontrak pen-jualan sekitar 90 persen untuk mencapai target volume produksi tahun ini,” ujar Srivastava kepada Bisnis, Selasa (1/9/ 2020).

Adapun, hingga Juni 2020, volum e produksi BUMI sudah mencapai 41 juta ton, naik 5 persen dari 39,1 juta ton pada periode yang sama tahun lalu. Overburden removal perseroan naik 11 persen menjadi 326,6 juta bcm dari periode yang sama tahun lalu sebesar 294,8 juta bcm.

Sementara itu, volume penjualan semester I/2020 masih stabil di angka 41,2 juta ton yang terdiri atas penjualan dari PT Kaltim Prima Coal sebesar 29,5 juta ton dan PT Arutmin sebesar 11,6 juta ton.

IMA-Daily Update Page 14

Srivastava explained that the company's biggest challenge in the remainder of this year is the sentiment in the coal business sector in line with the instability of market demand, especially in China and India.

This has affected global coal prices, which has an impact on the company's revenue, margins and cash flow.

Based on the company's financial state-ments, BUMI posted a net loss of US$ 86.17 million in the first semester of 2020, compared to a profit of US$ 80.7 million in the first semester of 2019.

According to Srivaastava, the company's performance fell in line with the 12 percent decline in coal prices to US$ 46.9 per ton. This has motivated BUMI to enrich the mix of coal products.

One of them is by producing coal that is adjusted to market needs, such as boosting high calorie coal production. During the first half of 2020, BUMI's production ratio between high and low calorie coal was 2: 1.

"In addition, the company will also intensify contract sales, maintain market share and reduce production costs. We will also maintain the normality of coal production at our mines during the current pandemic,” said Srivastava. Editor: Rivki Maulana

Srivastava menjelaskan bahwa tantangan terbesar perseroan di sisa tahun ini adalah sentimen di sektor bisnis batu bara seiring dengan tidak stabilnya permintaan pasar, terutama di China dan India.

Hal tersebut telah mempengaruhi harga batu bara global sehingga berdampak pada penda-patan, margin, hingga arus kas perseroan.

Berdasarkan laporan keuangan perseroan, BUMI membukukan rugi bersih sepanjang semester I/2020 sebesar US$86,17 juta, ber-banding untung US$80,7 juta pada periode semester I/2019.

Menurut Srivaastava, kinerja peseroan turun seiring dengan penurunan harga batu bara sebesar 12 persen menjadi US$46,9 per ton. Hal itu membuat BUMI terpacu untuk mem-perkaya bauran produk batu bara.

Salah satunya dengan produksi batu bara yang disesuaikan dengan kebutuhan pasar seperti menggenjot produksi batu bara kalori tinggi. Sepanjang paruh pertama 2020, rasio produksi BUMI antara batu bara kalori tinggi dan rendah adalah sebesar 2:1.

“Se lain itu, perseroan juga akan meng-intensifkan penjualan kontrak, menjaga pangsa pasar, dan mengurangi biaya produksi. Kami juga akan menjaga normalitas produksi batu bara di tambang kami selama pandemi saat ini,” papar Srivastava. Editor : Rivki Maulana

To support customary preservation, PT NHM helps four tribes around the mine for Rp1 billion per year

Author: Editor

PT NUSA Halmahera Minerals (NHM) is not only the new owner. The pattern of relationships with communities around the mine is new.

Dukung Pelestarian Adat, PT NHM Bantu Empat Suku di Lingkar

Tambang Rp1 Miliar Per Tahun Penulis: Redaksi

PT NUSA Halmahera Minerals (NHM) tidak hanya baru pemiliknya. Pola hubungan dengan masyarakat lingkar tambang pun baru.

IMA-Daily Update Page 15

NHM in the hands of PT Indotan Halmahera Bangkit and President Director (Presdir) of NHM H Robert Nitiyudo, really show their concern for the community.

One form of concern, namely the preservation of community customs and culture. As the information obtained by Halmahera Daily, from July to August, the President Director of NHM H Robert invited representatives from various community elements around the mine to Jakarta for a gathering. Starting from traditional leaders, sub-district village government, DPRD members, youth, to students.

Through the management representative of PT Indotan Halmahera Bangkit Amin Anwar, it was stated that in the meeting of NHM owner H Robert with four Sangaji, a memorandum of understanding (MoU) was signed which was witnessed by represen-tatives of the Sultanate of Ternate.

In the MoU, said Amin, PT NHM will provide assistance to the four customary institutions around the mine, each with Rp. 1 billion per year. This assistance is specifically for customary institutions to support customary preservation programs.

He explained that the assistance was intended for the preservation of traditional houses, the provision of supporting facilities and infrastructure in the context of preserving customs and culture, streng-thening the capacity of the customary institutions of the four tribes so that they had more capacity in preserving culture, traditions, arts, local wisdom and other forms of structural experimentation which were assets. social in building local community empowerment.

"In addition, it is hoped that the creation of a cross-actor network and cooperation in the context of actualizing the customs and socio-culture of the community in strategic regional and community activities. Besides that,...

NHM di tangan PT Indotan Halmahera Bangkit dan Presiden Direktur (Presdir) NHM H Robert Nitiyudo, benar-benar me-nunjukkan kepeduliannya kepada masya-rakat.

Salah satu bentuk kepeduliannya, yakni pelestarian adat dan budaya masyarakat. Sebagaimana informasi yang diperoleh Harian Halmahera, sejak Juli hingga Agustus, Presdir NHM H Robert mengundang perwakilan dari berbagai elemen masya-rakat lingkar tambang ke Jakarta untuk silaturahmi. Mulai dari tokoh adat, peme-rintah desa kecamatan, anggota DPRD, pemuda, hingga mahasiswa.

Melalui perwakilan manajemen PT Indotan Halmahera Bangkit Amin Anwar, disebutkan dalam pertemuan pemilik NHM H Robert dengan empat Sangaji, sudah dilakukan penandatangan nota kesepahaman (MoU) yang disaksikan perwakilan Kesultanan Ternate.

Dalam MoU tersebut, kata Amin, salah satunya PT NHM akan memberikan bantuan bagi ke empat lembaga adat di lingkar tambang, masing-masing Rp 1 miliar per tahun. Bantuan itu khusus bagi lembaga adat untuk mendukung program pelestarian adat.

Dijelaskan, bantuan tersebut diperuntukkan bagi pelestarian rumah adat, pengadaan sarana dan prasarana penunjang dalam rangka pelestarian adat dan budaya, penguatan kapasitas kelembagaan adat empat suku agar semakin memiliki kemampuan dalam melestarikan budaya, tradisi, kesenian, kearifan lokal dan bentuk eksperesi kuktural lainnya yang merupakan modal sosial dalam membangun keber-dayaan masyarakat lokal.

“Disamping itu diharapkan terciptanya jaringan lintas pelaku dan kerjasama dalam rangka aktualisasi adat istiadat dan sosial budaya masyarakat dalam kegiatan strategis daerah dan masyarakat. Di samping itu...

IMA-Daily Update Page 16

Besides that, the owner of PT NHM asked the tribal chief to carry out a compensation program for orphaned children," explained Amin.

Not only that, continued Amin, H Robert personally added Rp. 50 million per month to each customary institution as operational funds. "It's from the personal pocket of the NHM President Director. It is intended that the Rp. 1 billion budget can actually be used for the development and preservation of adat programs," explained Amin.

As previously reported, the meeting was the wish of H Robert as the new owner of PT NHM who wanted to get input as well as learn and hear firsthand the problems faced by the community while operating under Newcrest's command. Especially with regard to the Community Develop-ment and Empowerment (PPM) program.

"Hopefully, in the future the implemen-tation of the PPM program will be better for the communities surrounding the mine in particular and the Halut community in general can be even better," explained Amin.

On the other hand, continued Amin, PT NHM still adheres to the Minister of EMR Regulation No. 41 Tahub 2916 regarding PPM in mining and mineral and coal business activities, so each mining business entity is required to prepare and have a Master Plan for Community Development and Empowerment (PPM).

The PPM program itself, said Amin, is one of the government's serious efforts to embody the concept of corporate social responsibility (CSR) in the mining world, with the aim of further encouraging the economy, education, socio-culture, health and the environment around the mine, both in a sustainable manner. individually or collectively.

Disamping itu pemilik PT NHM meminta kepada kepala suku untuk melakukan program santunan kepada anak-anak yatim piatu,” terang Amin.

Tak hanya itu, sambung Amin, secara pribadi, H Robert menambahkan Rp 50 juta per bulan kepada masing-masing lembaga adat sebagai dana operasional. “Itu dari kantong pribadi Presdir NHM. Dimaksudkan, agar anggaran Rp 1 miliar, benar-benar dimanfaatkan untuk program pengembangan dan pelestarian adat,” terang Amin.

Sebagaimana diberitakan sebelumnya, perte-muan tersebut merupakan keinginan H Robert selaku pemilik baru PT NHM yang ingin mendapatkan masukan sekaligus belajar dan mendengar langsung perma-salahan yang dihadapi masyarakat selama beroperasi di bawah komando Newcrest. Khususnya berkaitan dengan program Pengembangan dan Pemberdayaan Maaya-rakat (PPM).

“Harapannya, kedepan implementasi program PPM lebih baik untuk masyarakat lingkar tambang khususnya dan masyarakat Halut umumnya bisa lebih baik lagi,” terang Amin.

Di sisi lain lanjut Amin, PT NHM tetap ber-pedoman pada Permen ESDM No 41 Tahub 2916 tentang PPM pada kegiatan usaha pertambangan dan mineral dan batubara, maka setiap maka badan usaha pertam-bangan diwajibkan untuk menyusun dan mempenyai Rencana Induk Pengembangan dan Pemberdayaan Masyarakat (PPM).

Program PPM sendiri, kata Amin, merupakan salah satu upaya serius dari pemerintah untuk mengejawantahkan consep corporate social responsibility (CSR) di dunia tambang, dengan tujuan untuk lebih mendorong perekonomian, pendidikan, sosial budaya, kesehatan, dan lingkungan hidup di sekitar tambang, baik secara individu maupun secara kolektif.

IMA-Daily Update Page 17

"So that the level of life of the community around the mine becomes better and independent," he explained.

Contacted separately, Sangaji Pagu Simon Toloa confirmed the meeting and signing of the MoU between PT NHM and four around the mine. Namely, the Pagu, Boeng, Modole, and Kao (Towoliko) tribes. "We are very grateful because H. Robert really cares about the indigenous communities around the mine," Simon said when contacted by the Halmahera Daily, yesterday.

He said, assistance amounting to Rp 1 billion per year, will later be disbursed per semester (6 months), the money is to support programs of customary institutions. "Such as the construction of traditional houses, traditional clothing, and others related to cultural customs," he explained.

In addition, Simon continued, from Rp. 1 billion, around 20 percent will be set aside specifically for orphans. "So, each customary institution will set aside 20 percent to help orphans in their respective customary territories," he said.

With his hopes for the future, Simon really hopes that this good relationship will continue and will be even better in the future. "This for me personally is a tremendous contribution from NHM for customary institutions. Indeed, there was one from the NHM while at Newcrest, but not as big as the current one. Therefore, we are very grateful for NHM's care, especially the owner H Robert who cares for the communities around the mine," he said.

The same thing was conveyed by Sangaji Boeng Johosua Kojoba. According to him, NHM is currently showing its concern for the community, especially the indigenous people around the mine.

“Agar tingkat kehidupan masyarakat sekitar tambang menjadi lebih baik dan mandiri,” urainya.

Dihubungi terpisah, Sangaji Pagu Simon Toloa membenarkan adanya pertemuan dan penandatanganan MoU antara PT NHM dengan empat di lingkar tambang. Yakni, suku Pagu, Boeng, Modole, dan Kao (Towoliko). “Kami sangat bersyukur karena H Robert benar-benar peduli dengan komunitas adat yang ada di lingkar tambang,” kata Simon ketika dihubungi Harian Halmahera, kemarin.

Dia menyebut, bantuan sebesar Rp 1 miliar per tahun, nantinya akan dicairkan per semester (6 bulan), uang itu untuk men-dukung program-program lembaga adat. “Seperti pembangunan rumah adat, pakaian adat, dan lain sebagainya yang berhubungan dengan adat budaya,” terangnya.

Selain itu, lanjut Simon, dari Rp 1 miliar ada sekira 20 persen yang nantinya di-sisihkan khusus untuk yatim piatu. “Jadi, masing-masing lembaga adat akan menyi-sihkan 20 persen untuk membantu anak-anak yatim di wilayah adatnya masing-masing,” ujarnya.

Disinggung harapan ke depan, Simon sangat berharap hubungan baik ini akan terus terjalin dan akan lebih baik lagi ke depan. “Ini bagi saya pribadi merupakan konstribusi yang luar biasa dari NHM bagi lembaga adat. Memang pernah ada dari NHM saat di newcrest, tapi tidak sebesar yang diberikan saat ini. Makanya, kami sangat berterima kasih atas kepedulian NHM, terutama pemilik H Robert yang peduli bagi masyarakat di lingkar tambang,” ucapnya.

Senada disampaikan Sangaji Boeng Johosua Kojoba. Menurutnya, NHM saat ini, menunjukkan kepeduliannya kepada masyarakat, khususnya masyarakat adat di lingkar tambang.

IMA-Daily Update Page 18

"With this budget, of course, it will greatly assist traditional institutions in customary preservation. This is very extraordinary. In the future, the people of Halut will be able to see what the Boeng traditional house looks like. We will build it," he said.

The same assessment was expressed by Sangaji Kao (Towoliko) Zulkifli Tukang. According to him, assistance for this customary institution has only been present in the 23 years since the NHM was present. "During the Newcrest there was. The value is Rp. 250 million, and that is only once. When it is near the transfer (divestment) of shares. Therefore, we are very grateful to the new NHM, especially H Robert as the owner," he said.

He also has the same hope, the good relationship that has just been created now can be maintained forever. "Because to be honest, institutional work costs money. With this mandatory assistance, of course, it will be used to preserve the Kao tribal customs," he said. (dit/fir)

“Dengan anggaran itu, tentunya akan sangat membantu lembaga adat dalam pelestarian adat. Ini sangat luar biasa. Ke depan, nantinya masyarakat Halut bisa melihat rumah adat Boeng itu seperti apa. Kami akan bangun itu,” ujarnya.

Penilaian yang sama pula diutarakan Sangaji Kao (Towoliko) Zulkifli Tukang. Menurutnya, bantuan bagi lembaga adat ini terbilang baru selama 23 tahun NHM hadir. “Semasa newcrest sempat ada. Nilainya Rp 250 juta, itu pun hanya satu kali. Saat dekat pengalihan (divestasi) saham. Karena itu, kami sangat berterima kasih kepada NHM yng baru ini, khususnya H Robert sebagai pemilik,” katanya.

Dia pun memiliki harapan yang sama, hubungan baik yang baru tercipta saat ini bisa terus terjaga selamanya. “Karena jujur saja untuk kerja-kerja kelembagaan mem-butuhkan biaya. Dengan bantuan yang bersifat amanat ini, tentunya akan di-manfaatkan untuk melestarikan kembali adat suku Kao,” ujarnya. (dit/fir)

This causes the issuer's coal production is more efficient

Reporter: Dityasa H. Forddanta | Editor: Anna Suci Perwitasari

THE CORONA virus pandemic which had

made oil prices slumped had a slight positive impact on coal issuers.

PT Bumi Resources Tbk (BUMI) for example. The cash cost of coal production or the company's cash cost during the half-time yesterday was US$ 32.4 per ton. This value decreased by 13.14% compared to

the same period the previous year.

Ini penyebab produksi emiten batubara lebih efisien

Reporter: Dityasa H. Forddanta | Editor: Anna Suci Perwitasari

PANDEMI virus corona yang sempat membuat harga minyak terpuruk ternyata memberikan sedikit dampak positif untuk emiten batubara.

PT Bumi Resources Tbk (BUMI) misalnya. Biaya tunai produksi batubara atawa cash cost perusahaan sepanjang paruh waktu kemarin sebesar US$ 32,4 per ton. Nilai ini turun 13,14% dibanding periode yang sama tahun sebelumnya.

IMA-Daily Update Page 19

"The decline is partly due to the decline in

oil prices," said Director of BUMI Dileep

Srivastava to Kontan.co.id, Tuesday (1/9).

The low price of oil has decreased the cost

of fuel, which is one of the main

components of production costs. Thus, the

production process can be a little more

efficient as cash costs decrease.

Apart from low oil prices, BUMI's lower

cash cost is also the impact of successful

negotiations between BUMI and

contractors and suppliers. "Until the end of

the year, we will try to keep the cash cost

at the level of US$ 32 per ton," said Dileep.

BUMI is not the only issuer experiencing a

downward trend in cash costs.

Andrey Wijaya, RHB Sekuritas analyst,

estimates that the cash cost of PT Bukit

Asam Tbk (PTBA) by the end of this year is

only US$ 30.7 per ton. The amount is the

result of a revision from the previous

estimate, US$ 33 per ton.

PTBA coal transportation transportation

costs by train are equivalent to 35% of the

total cost. "PTBA can still negotiate better

transportation rates," Andre wrote in his

research on August 31.

Moreover, PTBA's coal transportation

capacity will continue to increase. Until

2024, the capacity is estimated to reach 40

million tons per year. The estimated

capacity by the end of this year is 30

million tons.

"Penurunan tersebut salah satunya akibat penurunan harga minyak," ujar Direktur

BUMI Dileep Srivastava kepada Kontan.co.id,

Selasa (1/9).

Rendahnya harga minyak membuat biaya bahan bakar yang merupakan salah satu komponen utama biaya produksi turun. Sehingga, proses produksi bisa sedikit lebih efisien seiring dengan penurunan

cash cost.

Selain rendahnya harga minyak, penu-runan cash cost BUMI juga imbas berhasil-nya negosiasi antara BUMI bersama kontraktor dan supplier. "Hingga akhir tahun kami upayakan cash cost tetap di level US$ 32 per ton," jelas Dileep.

BUMI bukan satu-satunya emiten yang mengalami tren penurunan cash cost.

Andrey Wijaya, analis RHB Sekuritas mem-

perkirakan, cash cost PT Bukit Asam Tbk (PTBA) hingga akhir tahun ini bahkan hanya US$ 30,7 per ton. Besaran tersebut merupakan hasil revisi dari estimasi sebelumnya, US$ 33 per ton.

Biaya transportasi pengangkutan batubara PTBA menggunakan kereta setara 35% dari keseluruhan cost. "PTBA masih bisa menegosiasikan tarif angkutan yang lebih baik," tulis Andre dalam riset 31 Agustus.

Terlebih, kapasitas pengangkutan batubara PTBA masih akan terus meningkat. Hingga 2024, kapasitasnya diperkirakan mencapai 40 juta ton per tahun. Adapun perkiraan kapasitas hingga akhir tahun ini sebesar 30 juta ton.

IMA-Daily Update Page 20

Just Soaring High, It Looks Like Coal Prices Will Drop Again

Tirta Citradi, CNBC Indonesia

RECENTLY the price of Newcastle thermal

coal has shot up significantly. However, in yesterday's trade, the prices of these leading commodities from Indonesia and Australia experienced another correction.

Tuesday (9/1/2020), Newcastle coal prices for contracts that are actively being traded slipped to US$ 52.6/ton from the previous price of US$ 52.75/ton. Coal prices fell 15 cents, or 0.28%.

The recent increase in coal prices has not basically reflected the fundamentals of the coal market. Price spikes still reflect technical factors in the futures market.

However, demand for coal from consuming countries, especially in Asia, is still weak. Just look at India's coal imports this year.

Based on the tracking data of the Refinitiv vessel, last month's imports of thermal coal and coke reached 12.2 million tons. Until the end of August, India's coal imports were estimated to reach 12.7 million tons for the maximum figure.

The decline in India's import volume is inseparable from the implementation of a national lockdown that was adopted by the country last March to control the spread of the corona virus in the second most populous country in the world as well as the second largest importer after China.

India's coal import volume in July was also at 12 million tons, which means it is not too different from the import volume in August. India's coal imports were...

Baru Melesat Tinggi, Harga Batu bara Kayaknya Mau Ambrol Lagi

Tirta Citradi, CNBC Indonesia

BELAKANGAN ini harga batu bara termal Newcastle melesat signifikan. Namun pada perdagangan kemarin, harga komoditas unggulan Indonesia dan Australia ini kembali mengalami koreksi.

Selasa (1/9/2020), harga batu bara Newcastle untuk kontrak yang aktif ditransaksikan tergelincir ke US$ 52,6/ton dari sebelumnya di harga US$ 52,75/ton. Harga batu bara turun 15 sen atau 0,28%.

Kenaikan harga batu bara yang terjadi akhir-akhir ini pada dasarnya belum mencerminkan fundamental pasar batu bara. Lonjakan harga masih mencerminkan faktor teknikal di pasar berjangka (futures).

Bagaimanapun juga permintaan terhadap batu bara dari negara-negara konsumennya terutama di Asia masih lemah. Tengok saja impor batu bara India sepanjang tahun ini.

Berdasarkan data pelacakan kapal Refinitiv, impor batu bara termal maupun kokas India pada bulan lalu tercatat mencapai 12,2 juta ton. Hingga akhir Agustus impor batu bara India diperkirakan mencapai 12,7 juta ton untuk angka maksimalnya.

Penurunan volume impor India ini tak terlepas dari penerapan lockdown nasional yang ditempuh oleh negara tersebut pada Maret lalu untuk mengendalikan penyebaran virus corona di negara terpadat kedua di dunia sekaligus importir kedua terbesar setelah China.

Volume impor batu bara India di bulan Juli juga berada di angka 12 juta ton yang artinya tidak terlalu berbeda dengan volume impor Agustus. Impor batu bara India...

IMA-Daily Update Page 21

India's coal imports were the worst recorded in June with total imports of only 8.8 million tonnes.

Although there was improvement in July, imports still fell 17% (yoy) compared to the same period last year. August coal imports also plunged 24% (yoy) to below 16 million tonnes last year, reported Reuters.

For the first eight months of this year, India's coal imports were recorded at 113.96 million tonnes or 18.9% lower than the same period last year. This clearly has a significant impact on suppliers of imported coal from India, namely Indonesia and Australia.

Reuters reported India's imports from Indonesia, which supply thermal coal for power plants, fell 23% (yoy) to 46.4 million tonnes in the last eight months. This volume decreased from the 60.25 million tonnes recorded in the January-August period last year.

Turning to Kangaroo Country, shipments of coking coal, which is widely used for steelmaking from Australia to India, also dropped 23% (yoy) to 23.4 million tonnes. This figure is also down from 30.5 million tonnes in the same period in 2019. CNBC INDONESIA RESEARCH TEAM (twg/twg)

Impor batu bara India tercatat paling parah di bulan Juni dengan total impor hanya 8,8 juta ton saja.

Meski ada perbaikan di bulan Juli, tetapi impornya masih turun 17% (yoy) di-bandingkan dengan periode yang sama tahun lalu. Impor batu bara Agustus pun anjlok 24% (yoy) di bawah 16 juta ton tahun lalu, melansir Reuters.

Untuk delapan bulan pertama tahun ini, impor batu bara India tercatat mencapai 113,96 juta ton atau 18,9% lebih rendah dibanding periode yang sama tahun lalu. Hal ini jelas berdampak signifikan ter-hadap para pemasok batu bara impor India yakni Indonesia dan Australia.

Reuters melaporkan impor India dari RI yang memasok batu bara termal untuk pembangkit listrik turun 23% (yoy) menjadi 46,4 juta ton pada delapan bulan terakhir. Volume tersebut turun dari 60,25 juta ton yang tercatat pada periode Januari-Agustus tahun lalu.

Beralih ke Negeri Kanguru, pengiriman batu bara kokas yang banyak digunakan untuk pembuatan baja dari Australia ke India juga drop 23% (yoy) menjadi 23,4 juta ton. Angka ini juga turun dari 30,5 juta ton pada periode yang sama tahun 2019. TIM RISET CNBC INDONESIA (twg/twg)

Waiting for Copper Price to Penetrate US$7,000

Finna U. Ulfah

COPPER prices are believed to have the potential to break the level of US$ 7,000 per ton in the next few trades as there are many positive catalysts available in the market to push prices to higher levels.

Menanti Harga Tembaga Tembus US$7.000

Finna U. Ulfah

HARGA tembaga diyakini berpotensi menembus level US$7.000 per ton dalam beberapa perdagangan ke depan seiring dengan banyak katalis positif yang tersedia di pasar untuk mendorong harga ke level yang lebih tinggi.

IMA-Daily Update Page 22

Capital Futures analyst Wahyu Laksono said that the copper price to break above US$ 7,000 per tonne, the highest level since 2017, this year is not a probability anymore, but it is just a matter of time.

"Copper may be able to reach US$ 7,500 in the medium term, it could even test US$ 8,000 per ton by the end of this year or early 2021," said Wahyu when contacted by Bisnis, Tuesday (1/9/2020).

He explained that the movement of copper prices is still supported by both technical and fundamental.

Fundamentally, there are three main reasons that will become the foundation for the price to move higher, namely the projected US inflation that will support commodity prices, the weakening US dollar, and the bullish gold and silver pattern which will also affect the prices of other metals.

Based on Bloomberg data, at the close of trading Monday (31/8/2020) the price of copper on the London stock exchange parked at the level of US$ 6,667 per ton, up 0.69 percent. This level is the highest level for copper since 2018.

Meanwhile, copper prices on the Comex exchange on Tuesday (1/9/2020) trading at 14.47 WIB were at the level of US$ 308.15 per pound, up 0.65 percent. That level is also the highest since two years ago.

During the current year 2020, copper prices on the London stock exchange have managed to strengthen by 7.99 percent. In fact, in mid-March 2020 the price had dropped to the level of US$ 4,371 per ton.

On the other hand, VP Commodity Research Motilal Oswal Financial Services Limited Navneet Damani said that the price of copper, which is often used as a benchmark for economic growth, has strengthened more supported by supply fundamentals than demand.

Analis Capital Futures Wahyu Laksono mengatakan bahwa harga tembaga untuk menembus ke atas US$7.000 per ton, level tertinggi sejak 2017, pada tahun ini bukan sebuah probabilitas lagi, tetapi hanya menunggu waktu saja.

“Tembaga mungkin bisa ke US$7.500 dalam jangka menengah, bahkan bisa menguji US$8.000 per ton pada akhir tahun ini atau awal 2021,” ujar Wahyu saat dihubungi Bisnis, Selasa (1/9/2020).

Dia menjelaskan bahwa pergerakan harga tembaga masih didukung baik teknikal maupun fundamental.

Secara fundamental, terdapat tiga alasan utama yang akan menjadi pondasi harga bergerak lebih tinggi, yaitu proyeksi inflasi AS yang akan mendukung harga-harga komoditas, pelemahan dolar AS, dan pola bullish emas dan perak yang juga akan mempengaruhi harga logam lainnya.

Berdasarkan data Bloomberg , pada penutupan perdagangan Senin (31/8/2020) harga tembaga di bursa London parkir di level US$6.667 per ton, naik 0,69 persen. Level itu merupakan level tertinggi tembaga sejak 2018.

Sementara itu, harga tembaga di bursa Comex pada perdagangan Selasa (1/9/2020) hingga pukul 14.47 WIB berada di level US$308,15 per pon, naik 0,65 persen. Level itu juga merupakan yang tertinggi sejak dua tahun lalu.

Sepanjang tahun berjalan 2020, harga tembaga di bursa London telah berhasil menguat sebesar 7,99 persen. Padahal, pada medio Maret 2020 harga sempat anjlok hingga menyentuh level US$4.371 per ton.

Di sisi pihak, VP Commodity Research Motilal Oswal Financial Services Limited Navneet Damani mengatakan bahwa harga tembaga yang kerap dijadikan patokan pertumbuhan ekonomi telah menguat lebih didukung fundamental pasokan dibanding permintaan.

IMA-Daily Update Page 23

This is because the economy is still overshadowed by a severe slowdown if the Covid-19 pandemic case does not end and a vaccine that is powerful enough to fight the deadly virus has not been found.

Prices are further supported by market concerns over tight supplies as a major South American producer faces large numbers of infected workers and strikes.

Most of the copper mines in Chile, the world's largest producer, have been forced to stop again to limit the spread of Covid-19. Meanwhile, some other mines cut copper production due to labor shortages.

Thus, the supply figure is believed to be lower than in previous months. Bloomberg estimates that Chile's production this year will only reach 200,000 tonnes, down about 1 percent of annual global

production. Citing research from US financial company Jefferies, global copper inventories have the potential to drop by 30 percent since March. Editor: Rivki

Maulana

Pasalnya, ekonomi masih dibayangi perlambatan yang cukup parah jika kasus pandemi Covid-19 tidak kunjung usai dan belum ditemukan vaksin yang cukup ampuh melawan virus mematikan itu.

Harga lebih didukung oleh kekhawatiran pasar terhadap pengetatan pasokan akibat produsen utama Amerika Selatan dihadapi banyaknya pekerja yang terinfeksi virus dan pemogokan kerja.

Sebagian besar tambang tembaga di Chili, produsen terbesar di dunia, terpaksa dihenti-kan kembali untuk membatasi penyebaran Covid-19. Sementara itu, sebagian tambang lainnya memangkas produksi tembaga seiring dengan keterbatasan tenaga kerja.

Dengan demikian, angka pasokan pun diyakini lebih rendah daripada bulan-bulan sebelumnya. Estimasi Bloomberg, produksi Chili pada tahun ini hanya akan mencapai 200.000 ton, turun sekitar 1 persen dari produksi global tahunan. Mengutip riset perusahaan keuangan asal AS, Jefferies, persediaan tembaga global berpotensi turun hingga 30 persen sejak Maret. Editor : Rivki Maulana

Indonesia's Sept coal price at record low, miners say oversupply worsens

INDONESIA has set the coal benchmark price at the lowest level on record amid subdued demand from big buyers, while the country's miners group said a global oversupply of coal was worsening.

The government set its coal benchmark price (HBA) at $49.42 per tonne, the Energy and Mineral Resources Ministry said on Tuesday, down from $50.34 per tonne last month.

September marked a sixth consecutive month of decline in the benchmark price, which is used in spot trading in Indonesia, the world's top thermal coal exporter.

"COVID-19 has resulted in a 20 per cent drop in coal imports by China and demand from India is yet to recover post-lockdown," energy ministry spokesman Agus Pribadi said in the statement.

IMA-Daily Update Page 24

Indonesia is increasingly looking to diversify markets for its coal and is targeting Vietnam as potential growth market.

Coal miners everywhere are in "survival mode", Hendra Sinadia, executive director of Indonesia Coal Miners Association (ICMA), said at a virtual seminar on Tuesday, as the global coal oversupply situation worsens.

A global demand correction due to the coronavirus pandemic is expected at around 100 million tonnes, Sinadia said, citing IHS Markit, while output levels of the world's biggest suppliers are not coming down significantly.

"On the supply side, production in Indonesia, as well as other suppliers such as Russian and Australia, are running relatively normally," he said.

ICMA estimated that Indonesia's coal output in January-July was 323 million tonnes, or around 59 per cent of the government's 550 million tonnes target. ICMA said in July their members would cut their 2020 production by 15 per cent-20 per cent of their targets, amid low prices. Reuters

Coal production falls 7% in Apr-Aug; offtake dips 13.4% By: FE Bureau

COAL India (CIL), the world’s largest coal miner, on Tuesday reported around 7% year-on-

year decline in its production to 195.54 million tonne during April to August as against 210.15 million tonne during the same period last year.

Coal offtake also declined 13.4% y-o-y to 208.36 million tonne (MT) in the first five months of

the current fiscal as compared with 204.65 MT in the corresponding period last fiscal, the state-run coal behemoth said in a stock exchange filing.

The company’s production, however, rose 7.1% y-o-y to 37.17 MT in August, 2020 as against 34.70 MT in August, 2019. In the month of August coal offtake also increased 9.3% y-o-y to 44.34 MT as compared with 40.57 MT in the same period last year.

“Coal India shrugging off the Covid-constricted growth and monsoonal downpour came back strongly in the month of August 2020 logging 9.3% growth in coal offtake and 7.1% growth in coal output compared to August a year ago. For the first time in the ongoing fiscal, CIL has clocked growth in both the facets,” the company said in a release.

“The growth slowdown is contained and going forward in the ensuing months of the fiscal we

endeavour to maintain our production and off-take tempo,” said a senior official of CIL.

Mahanadi Coalfields (MCL), a CIL subsidiary, recorded a 45.6% coal output growth despite having received 41% more rainfall in August, 2020 than a year ago month. Since the beginning of the monsoon from, June 1 till end August, 2020, MCL was beleaguered by 45% of

increased rainfall compared to same period last year.

IMA-Daily Update Page 25

Peru copper mining almost 'completely recovered' from pandemic: official

COPPER mining in Peru, the world’s No. 2 producer, is almost completely recovered from the impacts of the coronavirus pandemic, a government official said on Tuesday.

Peru’s copper production, however, fell 2.2% in July, compared with the same period a year earlier, to 198,796 tons, under the weight of the pandemic, which restricted mining, the vice minister of energy and mines, Jaime Galvez, said in a virtual conference.

The Peruvian government decreed a quarantine due to the coronavirus in mid-March, with special restrictions on mining activity. The industry, a key economic engine for the Andean country, began to gradually normalize operations in May.

Earlier in August, the government said production of the red metal plunged 20.4% in the first half of 2020 versus the same period in 2019.

Reporting by Marco Aquino; writing by Cassandra Garrison; editing by Chris Reese and Jonathan Oatis

Barrick takes dispute over Porgera mining rights to PNG Supreme Court

Cecilia Jamasmie

CANADA’s Barrick Gold (TSX: ABX) (NYSE: GOLD) will take a dispute over mining rights to

the Porgera gold mine in Papua New Guinea to the country’s Supreme Court after a lower court dismissed the company’s attempt to regain its license.

The world’s second-largest gold producer and its Chinese partner, Zijin Mining, became

embroiled in a dispute with the PNG government in April, when Prime Minister James Marape rejected their application for a lease extension.

The companies temporarily halted operations in response. They also served Marape with a dispute notice arguing the refusal of the Porgera license extension violated a bilateral investment treaty between PNG and Australia. The move, they said, also infringed international law governing foreign investment.

Barrick said at the time that if the parties were unable to settle the row through negotiations,

it would take PNG to international arbitration.

PNG’s National Court dismissed this week Barrick’s request for a review of Marape’s decision,

which the miner now plans to take to the country’s top court.

IMA-Daily Update Page 26

“The company disagrees with numerous grounds outlined in the ruling,” Barrick Niugini Ltd. (BNL), which operated Porgera, said in a statement.

It also said that the government’s move last week to grant a 20-year lease for the mine to state-backed firm Kumul Minerals Holdings (KML) was “unlawful” and “invalid.” BNL added it was unaware of any consultation with local owners about the “non-transparent” and “rushed” decision to cut the company out.

The Toronto-based gold giant said it would will challenge that move, too, and it has launched a separate complaint with the World Bank’s International Centre for the Settlement of Investment Disputes.

The fight over the Porgera’s lease keeps the mine, which last year produced almost 600,000 ounces of gold, in complete halt. It comes at a time when fears of global economic collapse triggered by the covid-19 pandemic have sent gold prices to record highs.

Settlement attempts

Barrick offered in May an extra 15% stake in the Porgera mine to local landowners, in a fresh attempt to break the impasse with the government over the mine’s future.

PNG later threatened Barrick with criminal proceedings, claiming the company’s joint venture in the country was planning to illegally export $13 million in gold and silver to Australia. BNL refuted the allegations.

The ongoing dispute has done to Barrick what the pandemic did not — dent its expected output for the year. It now expects to produce between 4.6 million and 5 million ounces of gold this year — 200,000 ounces lower than its previous estimate.

Barrick revealed at the time that PNG was also asking the company and Zijin to pay $191-million in back taxes, arising from tax audits conducted between 2006 and 2015.

Marape, who claims the lease was not extended owing to environmental and community concerns, said this week he wanted to reopen the mine “at the earliest.” He also added that the country was not “a banana republic” and that it was up to Barrick to get on a plane and discuss how they could remain in PNG under KMHL’s lease.

Tier one potential

Barrick’s president and chief executive officer, Mark Bristow, said in March that Porgera had “tier one potential” but faced many challenges in the form of “legacy issues and an unruly neighborhood.”

The gold mine, located in PNG’s northern highlands region, is a joint venture between Barrick and Zijin Mining. Each owns 47.5% of the mine, with the remaining 5% held by landowner group Mineral Resources Enga.

Porgera contributes to about 10% of the nation’s exports and employs over 3,300 Papua New Guinea nationals.

The open pit and underground gold mine sits at an altitude of 2,200-2,600 metres in Enga province, and is about 600 km (370 miles) northwest of Port Moresby.

IMA-Daily Update Page 27

Other mining companies operating in PNG, including Australia’s Newcrest (ASX: NCM), have not been impacted by the decision regarding Porgera. The miner has “welcomed” the Prime Minister’s support for its Wafi Golpu gold and copper asset, adding that its special mining lease at the Lihir operations remains in good standing, with a renewal not needed until 2035.

Colombian July coal exports fall 15% on month, 6.6% on year Author: Tyler Godwin, Editor: Aastha Agnihotri

COLOMBIA exported 5.73 million mt of coal in July, down 15.1% from June and 6.6% lower than the year-ago month, according to data from government statistics agency DANE published Sept. 1.

July coal exports were down 22.5% from the five-year average for the corresponding month and was the lowest for the month since 5.57 million mt in 2010.

However, through the first seven months of 2020, Colombia has exported 51.3 million mt of coal, up 14.9% from the same period in 2019 and the third-highest total in the last 29 years, only behind 54.78 million mt in 2017 and 54.23 million mt in 2018.

Export receipts from coal totaled $301.45 million in July, down 16.6% from June and 34.1% lower on the year. It was the lowest total for coal receipts in a month since $274.42 million in March 2016.

On a price per ton basis, exports were at $52.61/ mt FOB, down from $53.52/mt in June and $74.52/mt in the year-ago month. It was the second-lowest figure in

the last four years, only higher than $51.33/mt in May.

It was also the third straight month with receipts under $54/mt, which marked only the second time in the last 13 years. The other occasion was a four-month stretch between December 2015 and March 2016.

Through the first seven months of 2020, receipts were a combined $2.97 billion, or $57.86/mt, down from $3.69 billion, or $82.63/mt, in the same period a year earlier.

IMA-Daily Update Page 28

Workers at the Cerrejon mine went on strike Aug. 31 after negotiations broke down between the mine and labor union Sintracarbon, according to a union statement. The mine, which is equally owned by Glencore, BHP and Anglo American, said in August it exported just 9.5 million mt in the first six months of 2020, down 3.8 million mt from a year earlier and the lowest figure for a six-month period in 18 years.

The second-largest mine in Colombia exported over 26.3 million mt in 2019.

Unleashing coal: inside India’s plans to open up commercial coal mining

By Heidi Vella

INDIA is energy hungry. The country, and its roughly 1.3 billion inhabitants, is the third largest energy consumer in the world and it is estimated to have the fastest growing power needs of any nation.

Around three-quarters of India’s electricity supply comes from coal-fired power stations, a number of which are fed by pricey imports. To boost domestic supply, the government is opening up the country’s vast coal reserves to commercial development.

In June, Prime Minister Narendra Modi launched the auction of 41 coal mines, which have an estimated annual production capacity of nearly one-third of the total national output. The move, Modi said, was tantamount to ‘unshackling reserves from decades of lockdown’, adding that he hoped it could lead to India becoming a net exporter of the fuel.

The plans, however, go against the country’s climate change commitments in line with the 2015 Paris Accord, which are contingent on India reducing its dependence on coal power, as well as the global trend of divesting from coal.

International interest is likely to be weak

India consumed around 977 million tonnes (mt) of coal last year (year-end March 2020). About 729mt of this was produced domestically and roughly 248mt was imported. Around 600mt of the domestically produced coal came from Coal India Ltd, a government company. The rest was produced under ‘captive’ mining licences for individual industrial use. Coal from the new mining licences, however, can be sold on the open market.

Modi has said India will spend INR500bn ($6.6 billion) “for creating infrastructures around coal mining,” adding the country was targeting gasification of 100mt of coal by 2030.

Rahul Tongia, a fellow at Brookings India and part of the Cross-Brookings Initiative on Energy and Climate, who is soon to publish a book on the future of coal in India, says that because Indian coal is not very calorie-rich, it’s mostly Indian power plants that will want it.

“It’s not as if India is about to turn into a global exporter, what is likely to happen is, in the short run, new entrants will displace imports, which are more expensive,” says Tongia.

IMA-Daily Update Page 29

Debasish Mishra, Deloitte partner and leader for energy, resources, and industrials for Deloitte in India, agrees that international market interest is likely to be lacklustre.

“Given the concerns around CO2 emissions and the climate emergency, coal is a negative commodity globally. I don’t think any country in the G20 block other than India has an increasing coal consumption trend. Even China, which consumes half of global coal, has managed to stagnate its consumption in the last few years,” he explains.

India is the world’s second largest consumer and producer of coal and its consumption has been growing at around 4.5% per annum.

Local interest will have to do

Furthermore, Mishra says, despite the attraction of the domestic market, it is quite challenging for international companies to develop a coal mine in India due to issues around land acquisition and environment and forest clearances.

However, Indian conglomerates who have experience in the metals and mining sector, as well as power plant owners, may be interested, he says. The government hopes that the private sector can create efficiencies, better management, and adoption of new technologies to make the overall process cheaper and more affordable.

To attract these investors, the government has reduced upfront payments, relaxed payment schedules, and linked the price of coal to a soon-to-be launched national coal index.

Nevertheless, Wood Mackenzie’s head of thermal coal research, Dale Hazelton, thinks that even domestic interest could be thin on the ground.

“These mines have to compete with already established large players, which may make it difficult to get a foothold in the market,” he explains.

“Most of these blocks have complicated geology, poor access to rail networks, and other surface land issues. Ultimately, there are four mines that were active prior to the March 2014 ban from the Supreme Court of India that may enter production, but we do not expect much from the other coal mines due to the constraints.”

Why coal is likely to be essential in India’s current power mix

Coal power generation in India, like every other country, is facing increasing competition from renewables. In 2014, renewable energy provided 31GW of the country’s electricity and now it produces 90GW, with additional capacity in the pipeline.

Given India’s climate change ambitions, which include reducing its coal use to 60%, as opposed to the current 75%, of its energy mix by 2030, should the government not be focusing away from coal entirely and on renewables instead? Coal production and burning, after all, contributes heavily to air pollution and India is already home to 14 of the world’s 20 worst cities for air quality, according to the 2019 AirVisual report.

Cheaper, domestically produced coal being available is not, according to Tongia, going to ‘magically’ result in India using more coal.

“I don’t think that just by having private sector participation we’re going to unleash enormously higher demands than what was already the organic trajectory for coal in India, but that doesn’t mean coal has no trajectory,” he says.

IMA-Daily Update Page 30

“Let’s differentiate between usage and new capacity; a coal mine today will serve an existing need; the government absolutely needs to do this.”

Mishra agrees that India’s new plans for domestic coal mining won’t result in new coal power plants being built as the country already has overcapacity.

“New capacity is mostly coming in the form of solar and wind, this new coal will be used in existing thermal plants; the country is determined to meet its target of 40% renewables but at the moment we still need coal,” he says.

“What we are expecting is, in the next five years, when the cost of battery storage comes down, then we won’t need to look at coal going forward.”

He adds that the growing energy demand, around 6% every year, means it is unlikely the existing coal-fired power assets will become stranded.

Future action and a pathway to zero-coal

“Yes, India needs to encourage renewables, it needs to also have a critical storage plan and pathway, but those are not quite ready for primetime in the very short run,” concludes Tongia.

Instead, he says, India should look at an exit plan for coal and cleaning up existing coal plants. In 2017, world standard emissions norms on plants were supposed to come into play but failed to do so and, after lobbying, a five-year extension was granted. A further delay has been requested due to Covid-19.

“The important thing is to establish a plateau to a zero-coal plan, as well as cleaning-up power plants with technology. India has never been serious about doing this,” he says. “But a driver for this change will be local air pollution, because, frankly, that’s something more palpable to the population than carbon.”