IMA-Daily Update Page 1

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Increasing the tax burden is a condition for mining contract extension, do the producers agree? Peningkatan beban pajak jadi syarat perpanjangan kontrak tambang, setujukah produsen? Semester I/2020, Antam's Ferronickel Production Reaches 12,762 Tons Semester I/2020, Produksi Feronikel Antam Capai 12.762 Ton State revenue must increase when PKP2B becomes IUPK, BUMI: We will obey the rules Penerimaan negara harus meningkat saat PKP2B jadi IUPK, BUMI: Kami akan patuhi aturan Looking Up to the Coal DME Project Fate As Pandemic Increases Meneropong Nasib Proyek DME Batu Bara Kala Pandemi Kian Ganas Nickel Sales Increase, Antam (ANTM) Presses Production Costs Penjualan Nikel Naik, Antam (ANTM) Tekan Biaya Produksi Depressed Coal Prices, Cut Production Into Corporate Solutions Harga Batu Bara Tertekan, Pangkas Produksi Jadi Solusi Korporasi The nickel commodity is still growing, Antam (ANTM) believes it can increase profit margins Komoditas nikel masih tumbuh, Antam (ANTM) yakin bisa tingkatkan marjin keuntungan Electricity Consumption Down, Absorption of Domestic Coal Impacted Konsumsi listrik turun, serapan batubara domestik terdampak Depressed Continually, Coal Prices Will Touch the Lowest Level? Tertekan Terus, Harga Batu Bara Bakal Sentuh Level Terendah?

Kontan Bisnis Kontan CNBC Indonesia Bisnis Bisnis Kontan Kontan CNBC Indonesia

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Gold price surpasses $1,860 – highest since 2011 Strong Cadia performance guides Newcrest to production record Copper miner Antofagasta maintains guidance The coronavirus stopped coal imports in Poland Indonesia Amends Mining Law to Encourage More Downstream Investment

Mining.com Australian Mining Mining Weekly Biznet Alert Asean Breifing

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Increasing the tax burden is a condition for mining contract

extension, do the producers agree? Reporter: Ridwan Nanda Mulyana | Editor:

Pratama Guitarra

THE GOVERNMENT is preparing a Government Regulation (PP) derived from Law Number 3 of 2020 concerning Mineral and Coal Mining (Minerba). One of the PPs that will be issued includes the terms of mining contract extension.

From the draft points of extension requirements received by KONTAN, among them is the addition of tax burden for mining producers to increase state revenue.

Previously, the Coal Mining Work Agreement (PKP2B) only issued 13.5% of coal production (DHPB)/royalty plus lump sum payments and PBBKB 7.5% (reimbursed), then there was a maximum sales tax of 5%, and Corporate Income Tax 45%.

Meanwhile, when PKP2B the contract was extended and changed its status to IUPK OP the tax changed to: royalties plus mining product sales (PHT) plus goods that belong to the state (BMN) by 15%. Then Prevaling Land and Building Tax (PBB).

Then the Prevailing Regional Tax, and Prevailing VAT by 10%, Prevailing Agency Income Tax by 25%, and Earning After Tax (EAT) by 10% with a portion of 6% for the region and 4% for the center.

Special Staff of the Minister of ESDM in the field of Minerba Governance Acceleration, Irwandy Arief said, the government provides strict conditions for extending the PKP2B contract to IUPK OP.

Peningkatan beban pajak jadi syarat perpanjangan kontrak

tambang, setujukah produsen? Reporter: Ridwan Nanda Mulyana | Editor:

Pratama Guitarra

PEMERINTAH sedang menyiapkan Peraturan

Pemerintah (PP) turunan dari Undang-Undang Nomor 3 Tahun 2020 tentang Pertambangan Mineral dan Batubara (Minerba). PP yang akan diterbitkan salah satunya berisi syarat perpanjangan kontrak pertambangan.

Dari draft poin syarat perpanjangan yang diterima KONTAN, diantaranya adalah pe-nambahan beban perpajakan bagi produsen pertambangan untuk peningkatan pene-rimaan negara.

Sebelumnya, Perjanjian Karya Produsen Pertambangan Batubara (PKP2B) hanya mengeluarkan dana hasil produksi batubara (DHPB)/royalti sebesar 13,5% ditambah lumpsum payment dan PBBKB 7,5% (reimburse), lalu ada sales tax maksimal 5%, dan PPh Badan 45%.

Sementara, ketika PKP2B kontraknya di-perpanjang dan berubah status menjadi IUPK OP pajaknya berubah menjadi: royalti ditambah penjualan hasil tambang (PHT) ditambah barang yang menjadi milik negara (BMN) sebesar 15%. Kemudian PBB Prevaling.

Lalu Pajak Daerah Prevailing , dan PPN Prevailing sebesar 10%, PPh Badan Prevailing sebesar 25%, serta Earning After Tax (EAT) sebesar 10% dengan porsi 6% untuk daerah dan 4% untuk pusat.

Staff Khusus Menteri ESDM Bidang Percepatan Tata Kelola Minerba, Irwandy Arief menyampaikan, pemerintah mem-berikan syarat yang ketat untuk memper-panjang kontrak PKP2B menjadi IUPK OP.

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"That is the main requirement, becoming one that is required by the government to increase state revenue," he said.

Unfortunately Irwandy was reluctant to reveal other points in the PP derived from the Minerba Law. But what is clear, said Irwandy, the most prominent point is the increase in royalty fees from PKP2B after becoming the IUPK OP.

APBI Executive Director Hendra Sinadia said, before the regulation was finalized, his party requested that the government again invite discussion of business actors. In particular it discusses the substance of the tariff details and types of taxes that are regulated.

Unfortunately he was reluctant to comment related to the amount of tax contained in the terms of the contract extension.

"We hope that it can be discussed further between the government and business players," Hendra told KONTAN, Wednesday (7/22).

Indeed, said Hendra, this regulation is very important and urgent to be published. Because this rule is important for the continuity of the coal business in the country. Especially for PKP2B whose contracts will expire.

PT Bumi Resources Tbk (BUMI) Director and Corporate Secretary, DIleep Srivastava, said that he was optimistic that Arutmin and KPC would get the IUPK OP.

When that happens, he said, BUMI is ready to comply with all obligations in accordance with applicable regulations. "BUMI will obey the rules, as usual," he explained to KONTAN.

Dileep was also reluctant to comment much related to the scheme of increasing state revenue proposed by the government, as well as the progress of requests for extension of Arutmin and KPC permits.

"Itu menjadi syarat utama, menjadi salah satu yang dipersyaratkan oleh pemerintah untuk peningkatan penerimaan negara," tuturnya.

Sayangnya Irwandy enggan membeberkan poin-poin lain dalam PP turunan dari UU Minerba. Namun yang terang, kata Irwandy, poin yang paling menonjol ialah kenaikan tarif royalti dari PKP2B setelah menjadi IUPK OP.

Direktur Eksekutif APBI Hendra Sinadia mengatakan, sebelum aturan itu difinalisasi, pihaknya meminta supaya pemerintah kembali mengajak diskusi pelaku usaha. Khususnya membahas mengenai substansi rincian tarif dan jenis pajak yang diatur.

Sayangnya ia enggan mengomentari terkait besaran pajak yang tertuang dalam poin-poin syarat perpanjangan kontrak itu.

"Kami harapkan agar dapat dibahas lebih lanjut antara pemerintah dan pelaku usaha," kata Hendra kepada KONTAN, Rabu (22/7).

Memang, kata Hendra, regulasi ini sangat penting dan mendesak untuk segera di-terbitkan. Pasalnya, aturan ini penting bagi kelangsungan bisnis batubara di tanah air. Terlebih bagi para PKP2B yang kontraknya akan berakhir.

Direktur dan Corporate Secretary PT Bumi Resources Tbk (BUMI), DIleep Srivastava menyampaikan, pihaknya optimistis Arutmin dan KPC bakal mendapatkan IUPK OP.

Saat itu terjadi, katanya, BUMI siap untuk mematuhi segala kewajiban sesuai aturan yang berlaku. "BUMI akan mematuhi peraturan, seperti biasanya," terangnya ke KONTAN.

Dileep pun enggan berkomentar banyak terkait skema peningkatan penerimaan negara yang diusulkan pemerintah, maupun tentang progres permohonan perpanjangan izin Arutmin dan KPC.

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To be sure, he hopes that the permit extension can be immediately announced by the Ministry of ESDM. Just so you know, the Arutmin contract will end on November 1, 2020. While the KPC mine on December 31, 2021.

Yang pasti, dia berharap agar per-panjangan izin tersebut dapat segera diumumkan Kementerian ESDM. Asal tahu saja, kontrak Arutmin akan berakhir pada 1 November 2020. Sedangkan tambang KPC pada 31 Desember 2021.

Semester I/2020, Antam's Ferronickel Production Reaches

12,762 Tons Denis Riantiza Meilanova

DURING the second quarter of 2020, the realization of PT Aneka Tambang Tbk's (Antam) ferronickel production reached 6,447 tons of nickel in ferronickel (TNi).

This achievement increased by 2 percent compared to the production achievement in the first quarter of 2020 which reached 6,315 TNi. On the other hand, ferronickel sales in the second quarter of 2020 reached 6,867 tonnes or grew by 11 percent compared to sales achievements in the previous quarter.

"Accumulated performance achievements of Antam's ferronickel unaudited production and sales during the first half of 2020 were recorded at 12,762 TNi and 13,045 TNi respectively," the company was quoted as saying on Wednesday (7/22/ 2020).

The ferronickel production and sales achievements have only reached around 48 percent each of the target set this year.

Meanwhile, nickel ore production used as raw material for Antam's ferronickel plant and sales to domestic customers in the second quarter of 2020 reached 745 thousand wet metric tons (WMT).

Semester I/2020, Produksi Feronikel Antam Mencapai

12.762 Ton Denis Riantiza Meilanova

SEPANJANG kuartal II/2020, realisasi produksi feronikel PT Aneka Tambang (Antam) Tbk tercatat mencapai 6.447 ton nikel dalam feronikel (TNi).

Capaian ini naik 2 persen dibandingkan capaian produksi pada kuartal I/2020 yang mencapai 6.315 TNi. Di sisi lain, penjualan feronikel pada kuartal II/2020 mencapai 6.867 TNi atau tumbuh sebesar 11 persen dibandingkan capaian penjualan pada kuartal sebelumnya.

"Akumulasi capaian kinerja produksi dan penjualan unaudited feronikel Antam sepanjang semester pertama tahun 2020 tercatat sebesar masing-masing 12.762 TNi dan 13.045 TNi," demikian dikutip dari keterangan resmi perusahaan, Rabu (22/7/2020).

Adapun capaian produksi dan penjualan feronikel tersebut baru mencapai masing-masing sekitar 48 persen dari target yang ditetapkan tahun ini.

Sementara itu, produksi bijih nikel yang digunakan sebagai bahan baku pabrik feronikel Antam dan penjualan kepada pelanggan domestik pada kuartal II/2020 mencapai 745 ribu wet metric ton (WMT).

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This realization grew 18 percent compared to the achievement of nickel ore production in the first quarter of 2020 which reached 629 thousand WMT.

The achievement of nickel ore sales during April-June 2020 was 168 thousand WMT.

In general, Antam's nickel ore production from January to June 2020 reached 1.37

million WMT with sales reaching 168 thousand WMT. Editor: David Eka Issetiabudi

Realisasi ini tumbuh 18 persen dibanding-kan capaian produksi bijih nikel pada kuartal I/2020 yang mencapai sebesar 629 ribu WMT.

Capaian penjualan bijih nikel sepanjang April-Juni 2020 tercatat sebesar 168 ribu WMT.

Secara akumulai produksi bijih nikel Antam sepanjang Januari-Juni 2020 mencapai 1,37 juta WMT dengan tingkat penjualan men-capai 168 ribu WMT. Editor : David Eka Issetiabudi

State revenue must increase when PKP2B becomes IUPK, BUMI: We will obey the rules

Reporter: Ridwan Nanda Mulyana | Editor: Handoyo

PT BUMI Resources Tbk (BUMI) is waiting

for the extension of the licenses of two of its subsidiaries who hold the first generation Coal Mining Work Agreement (PKP2B).

If the government gives permission, two BUMI subsidiaries, namely PT Arutmin Indonesia and PT Kaltim Prima Coal (KPC) will change their status to Production Operation Special Mining License (IUPK OP). One of the requirements to become an IUPK OP as an extension of PKP2B is an increase in state revenue.

BUMI Director and Corporate Secretary DIleep Srivastava said that his party was optimistic that Arutmin and KPC would get IUPK OP. When that happens, he said, BUMI is ready to comply with all obligations in accordance with applicable regulations.

Penerimaan negara harus meningkat saat PKP2B jadi IUPK, BUMI: Kami akan patuhi aturan

Reporter: Ridwan Nanda Mulyana | Editor: Handoyo

PT BUMI Resources Tbk (BUMI) tengah menunggu perpanjangan izin dua anak usahanya yang memegang Perjanjian Karya Pengusahaan Pertambangan Batu-bara (PKP2B) generasi pertama.

Jika pemerintah memberi izin, dua anak usaha BUMI, yakni PT Arutmin Indonesia dan PT Kaltim Prima Coal (KPC) bakal berganti status menjadi Izin Usaha Pertambangan Khusus (IUPK) Operasi Produksi (OP). Salah satu syarat untuk menjadi IUPK OP sebagai perpanjangan dari PKP2B adalah peningkatan pene-rimaan negara.

Direktur dan Corporate Secretary BUMI DIleep Srivastava mengatakan, pihaknya optimistis Arutmin dan KPC bakal mendapatkan IUPK OP. Saat itu terjadi, katanya, BUMI siap untuk mematuhi segala kewajiban sesuai aturan yang berlaku.

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"Yes (optimistic about getting an extension and becoming an IUPK OP), BUMI will comply with regulations, as usual," Dileep said when contacted by Kontan.co.id, Wednesday (7/22).

Dileep did not reveal how the taxation or deposit scheme would change to the state, if Arutmin and KPC would later become IUPK. However, he assured that even though overall there was an increase in costs, economies of scale could be maintained with optimization steps and management of additional costs.

Dileep was also reluctant to comment much related to the scheme of increasing state revenue proposed by the govern-ment, as well as the progress of requests for extension of Arutmin and KPC permits. To be sure, he hopes that the permit extension can be immediately announced by the Ministry of ESDM.

"Maybe so. We are waiting for an official decision from the authorities immediately for IUPK. After that, maybe we will comment more deeply," said Dileep.

In Kontan.co.id's notes, Arutmin has submitted an extension to the Ministry of ESDM in October 2019, while KPC in March 2020. The first generation PKP2B whose contract expires in the near future is PT Arutmin Indonesia.

Arutmin has in Satui, Senakin, Batulicin, and Asam-Asam, South Kalimantan with an area of 57,107 hectares (ha). The Arutmin contract will expire on November 1, 2020. While the KPC mine is located in Sangatta, East Kutai, East Kalimantan with an area of 90,938 hectares (ha), and the contract will expire on December 31, 2021.

If the permit continues and becomes the IUPK OP as an extension of the contract, for the first generation PKP2B the revenue component of the country will change from the original: current state revenue consists of...

"Ya (optimis mendapatkan perpanjangan dan menjadi IUPK OP), BUMI akan mematuhi peraturan, seperti biasanya," kata Dileep saat dihubungi Kontan.co.id, Rabu (22/7).

Dileep memang tak membeberkan bagaimana perubahan skema perpajakan atau setoran ke negara, jika Arutmin dan KPC nantinya men-jadi IUPK. Namun, dia meyakinkan bahwa sekalipun secara keseluruhan ada pening-katan biaya, skala keekonomian bisa tetap terjaga dengan langkah-langkah optimasi dan pengelolaan biaya tambahan.

Dileep pun enggan berkomentar banyak terkait skema peningkatan penerimaan negara yang diusulkan pemerintah, maupun tentang progres permohonan perpanjangan izin Arutmin dan KPC. Yang pasti, dia berharap agar perpanjangan izin tersebut dapat segera diumumkan Kementerian ESDM.

"Mungkin demikian. Kami menunggu kepu-tusan resmi dari pihak berwenang segera untuk IUPK. Setelah itu, mungkin kami akan berkomentar lebih dalam," sebut Dileep.

Dalam catatan Kontan.co.id, Arutmin sudah mengajukan perpanjangan izin kepada Kementerian ESDM pada Oktober 2019, sedangkan KPC pada Maret 2020. PKP2B generasi pertama yang kontraknya berakhir dalam waktu dekat adalah PT Arutmin Indonesia.

Arutmin memiliki di Satui, Senakin, Batulicin, dan Asam-asam, Kalimantan Selatan dengan luas mencapai 57.107 hektare (ha). Kontrak Arutmin akan berakhir pada 1 November 2020. Sedangkan tambang KPC berlokasi di Sangatta, Kutai Timur, Kalimantan Timur dengan luas wilayah mencapai 90.938 hektare (ha), dan kontraknya akan berakhir pada 31 Desember 2021.

Jika izin berlanjut dan menjadi IUPK OP sebagai perpanjangan kontrak, untuk PKP2B generasi pertama komponen penerimaan negaranya bakal berubah dari semula: penerimaan negara yang diperoleh saat ini terdiri dari...

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current state revenue consists of (1) coal proceeds (DHPB)/royalty of 13.5%, (2) lump sum payment, (3) PBBKB 7.5% (reimbursed), (3) maximum sales tax of 5%, and (4) corporate income tax 45%. Whereas PKP2B other than the first generation (generation 1+) is only subject to DHPB 13.5%.

Then it becomes: (1) royalty+IPM+BMN of 15% (government proposal), (2) Prevaling PBB, (3) Pre-sailing local taxes, (4) Prevailing VAT of 10%, (5) Income Tax Prev. by 25%, and (6) EAT by 10% with a portion of 6% for the region and 4% for the center.

penerimaan negara yang diperoleh saat ini terdiri dari (1) dana hasil produksi batubara (DHPB)/royalti sebesar 13,5%, (2) Lumpsum Payment, (3) PBBKB 7,5% (reimburse), (3) sales tax maksimal 5%, dan (4) PPh badan 45%. Sedangkan untuk PKP2B selain generasi pertama (generasi 1+) hanya dikenakan DHPB 13,5%.

Lalu menjadi: (1) royalti+PHT+BMN sebesar 15% (usulan pemerintah), (2) PBB Prevaling, (3) Pajak daerah prevailing, (4) PPN Prevailing sebesar 10%, (5) PPh Badan Prev. sebesar 25%, dan (6) EAT sebesar 10% dengan porsi 6% untuk daerah dan 4% untuk pusat.

Looking Up to the Coal DME Project Fate As Pandemic

Increases Tirta Citradi, CNBC Indonesia

THE IMPORT of LPG that has been tedious

in recent years has indeed upset RI-1 Joko Widodo (Jokowi). This excessive dependence on imports must be addressed, especially as Indonesia is rich in

natural resources.

Excessive import of oil and gas has made

the Indonesian trade balance come up short. As a result the current account balance recorded a deficit. LPG import is one of the highlights besides the high oil imports.

LPG is actually one of the government programs that was promoted in 2007. At that time LPG was introduced as a household fuel for oil substitution.

Meneropong Nasib Proyek DME Batu Bara Kala Pandemi Kian

Ganas Tirta Citradi, CNBC Indonesia

IMPOR LPG yang jor-joran dalam bebe-

rapa tahun terakhir memang membuat RI-1 Joko Widodo (Jokowi) kesal bukan main. Ketergantungan terhadap impor yang berlebihan ini harus disikapi, apalagi

Indonesia kaya akan sumber daya alam.

Impor migas yang berlebihan telah mem-buat neraca dagang RI tekor. Alhasil neraca transaksi berjalannya mencatatkan defisit. Impor LPG menjadi salah satu sorotan selain tingginya impor minyak.

LPG sejatinya merupakan salah satu program pemerintah yang digalakkan pada 2007 silam. Kala itu LPG diperkenalkan sebagai bahan bakar rumah tangga untuk

substitusi minyak.

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Over time, the success of this program has made the need for LPG in the country experience a rapid increase. But the increase in consumption was not accompanied by an increase in production.

Since 2014-2018, domestic LPG consumption has increased from 6.1 million tons to 7.5 million tons. This means that there is an increase in LPG needs reaching 5.3% per year (CAGR). Meanwhile, at the same time production actually decreased from 2.4 million tons to 2 million tons or decreased 4.4% per year (CAGR).

Increased demand that is not accompanied by an increase in production makes Indonesia must rely on imports. The proportion of domestic production to total LPG needs is only 25%. As many as 75% of LPG needs in the country are supplied from abroad, aka imports.

Of course this is very sad to make Indonesia have abundant reserves of gas and coal that can be used as an alternative energy source. The problem in addition to being dependent on imports, LPG consumption in the country is also inseparable from government subsidies.

One step to reduce the dependence on LPG imports is to encourage the development of Dimethyl Ether (DME) derived from the coal gasification process.

"Coal can be substituted into gas so that it does not need to import LPG. Because it can be made from our abundant coal. How come we import it," Jokowi said when opening the National Development Planning Conference at the State Palace, Presidential Palace Complex, Jakarta, Monday (16/12/2019) ago.

Indonesia is indeed a country that has abundant coal and is one of the biggest exporters in the Asian region. If referring to the Ministry of ESDM data, Indonesia's coal reserves as of January 2020 reached 39.9 billion tons.

Seiring dengan berjalannya waktu, keber-hasilan program ini membuat kebutuhan LPG di Tanah Air mengalami kenaikan yang pesat. Namun kenaikan konsumsi tersebut tak dibarengi dengan kenaikan produksi.

Sejak 2014-2018, konsumsi LPG di dalam negeri naik dari 6,1 juta ton menjadi 7,5 juta ton. Artinya ada kenaikan kebutuhan LPG mencapai 5,3% per tahunnya (CAGR). Sementara itu di saat yang sama produksi justru mengalami penurunan dari 2,4 juta ton menjadi 2 juta ton atau mengalami penurunan 4,4% per tahun (CAGR).

Peningkatan kebutuhan yang tak dibarengi dengan kenaikan produksi membuat RI harus mengandalkan impor. Proporsi produksi domestik terhadap total kebutuhan LPG hanya sebesar 25%. Sebanyak 75% kebutuhan LPG dalam negeri dipasok dari luar negeri alias impor.

Tentu hal ini sangatlah miris membuat Indonesia memiliki cadangan gas dan batu bara yang melimpah yang bisa digunakan sebagai sumber energi alternatif. Masalah-nya selain bergantung pada impor, konsumsi LPG di dalam negeri juga tak terlepas dari subsidi pemerintah.

Salah satu langkah untuk mengurangi keter-gantungan impor LPG adalah dengan men-dorong pengembangan Dimethyl Ether (DME) yang berasal dari proses gasifikasi batu bara.

"Batubara bisa disubstitusi menjadi gas sehingga nggak perlu impor LPG. Karena bisa dibuat dari batubara kita yang melimpah. Kok kita impor?" ujar Jokowi saat membuka Musyawarah Rencana Pembangunan Nasional di Istana Negara, Kompleks Istana Kepre-sidenan, Jakarta, Senin (16/12/2019) lalu.

Indonesia memang negara yang memiliki batu bara berlimpah dan menjadi salah satu eksportir terbesar di kawasan Asia. Jika mengacu pada data Kementerian ESDM, cadangan batu bara RI per Januari 2020 mencapai 39,9 miliar ton.

IMA-Daily Update Page 10

Assuming no more exploration activities and annual production averaging 500-600 million tons, the reserves will only be exhausted in more than 70 years. As many as 75% of total production are exported to China, India and Japan, which account for 63% of the total export share.

The majority of coal found in the country is coal with low and moderate calorific value (<6,000 Kcal/Kg). Low-calorie coal (<4,100 Kcal/Kg) can actually be used for making DME through a process called gasification.

Furthermore DME can be used for various household activities such as cooking, even as fuel for transportation. To encourage energy independence and downstreaming of coal products, the government has provided a series of incentives.

Some fiscal incentives provided by the central government to attract investment in the downstream realm of coal products include tax holiday facilities for 10-20 years (PMK number 35 in 2018), granting tax allowance (PP number 9 in 2016), reduction/elimination of royalties for low-calorie coal, to the elimination of VAT for the downstream coal industry.

At present, one of the state -owned companies engaged in the coal sector, PT Bukit Asam Tbk (PTBA) is currently working on a DME development project in Tanjung Enim, South Sumatra. Coal that is used is coal with a low calorific value (4,000 Kcal/Kg).

According to Ministry of ESDM documents, this project will not only produce DME, but also methanol and MEG. The project is planned to be operational in 2023. When it starts operation, the coal gasification project will consume 8 million tons of coal per year and produce 1.4 million tons of DME, 300 thousand tons of methanol and 4,250 tons of MEG.

Dengan asumsi tanpa aktivitas eksplorasi lagi dan produksi per tahun rata-rata men-capai 500-600 juta ton, maka cadangan tersebut baru habis lebih dari 70 tahun lagi. Sebanyak 75% dari total produksi di ekspor ke China, India dan Jepang yang mencapai 63% dari total pangsa ekspor.

Mayoritas batu bara yang ditemukan di dalam negeri merupakan batu bara dengan nilai kalori rendah dan sedang (< 6.000 Kcal/Kg). Batu bara dengan nilai kalori rendah (< 4.100 Kcal/Kg) sebenarnya dapat digunakan untuk pembuatan DME melalui proses yang disebut gasifikasi.

Selanjutnya DME dapat digunakan untuk ber-bagai aktivitas rumah tangga seperti me-masak, bahkan sebagai bahan bakar untuk transportasi. Untuk mendorong kemandirian energi dan hilirisasi produk batu bara, peme-rintah telah memberikan serangkaian insentif.

Beberapa insentif fiskal yang diberikan pemerintah pusat untuk menarik investasi di ranah hilirisasi produk batu bara ini antara lain fasilitas tax holiday selama 10-20 tahun (PMK nomor 35 tahun 2018), pemberian tax allowance (PP nomor 9 tahun 2016), reduksi/ penghapusan royalti untuk batu bara ber-kalori rendah, hingga penghapusan PPN untuk industri hilir batu bara.

Saat ini, salah satu perusahaan pelat merah yang bergerak di sektor batu bara yakni PT Bukit Asam Tbk (PTBA) tengah menggarap proyek pengembangan DME di Tanjung Enim Sumatra Selatan. Batu bara yang digunakan adalah batu bara dengan nilai kalori rendah (4.000 Kcal/Kg).

Menurut dokumen Kementerian ESDM, proyek ini tak hanya akan menghasilkan DME saja tetapi juga metanol serta MEG. Rencananya proyek ini baru akan beroperasi pada 2023. Saat mulai beroperasi, proyek gasifikasi batu bara ini akan mengkonsumsi 8 juta ton batu bara per tahun dan meng-hasilkan 1,4 juta ton DME, 300 ribu ton metanol dan 4.250 ton MEG.

IMA-Daily Update Page 11

From these calculations, it is clear that with the coal gasification project being DME, it will save LPG imports by 1-1.4 million tons per year. Clear budget savings are certainly not small.

The development of this project had to spend a lot of money. The capital expenditure required by PTBA to work on this project is estimated to reach US$ 2.98 billion, equivalent to Rp 43.7 trillion, assuming the exchange rate uses the BI middle rate at Rp 14,655/US$.

But in the midst of a Covid-19 pandemic like this, there are a number of factors that have influenced the economics of this project. When the global economy slumped like it is today, coal prices plummeted due to weak demand.

The drop in coal prices was also accompanied by a drop in gas prices. According to calculations by the Indonesian coal mining company association (APBI) there were 85 million tons of demand disrupted due to the pandemic.

This resulted in a drop in the price of Indonesia's benchmark coal in July at a price of US$ 52.16/ton, marking the lowest price since February 2016 or four years ago.

Assuming the price of low-calorie coal is at US$ 27.22/ton, the gasification project that PTBA will work on will produce an internal rate of return (IRR) of 11.52%. However, the current low-calorie coal price is at US$ 24/ton. Gas prices also dropped.

Of course this is a challenge for down-stream product development programs such as coal gasification which is known as capital intensive and high risk. But the thing that must not be forgotten also is to realize energy independence and reduce import dependence as well as things that must be fought for. CNBC INDONESIA RESEARCH TEAM (twg/twg)

Dari kalkulasi tersebut jelas dengan adanya proyek gasifikasi batu bara menjadi DME akan menghemat impor LPG sebesar 1-1,4 juta ton per tahunnya. Penghematan anggaran yang jelas tidak sedikit tentunya.

Pengembangan proyek ini harus merogoh kocek yang juga besar. Belanja modal yang harus dikeluarkan PTBA untuk menggarap proyek ini diperkirakan mencapai US$ 2,98 miliar atau setara dengan Rp 43,7 triliun dengan asumsi kurs menggunakan kurs tengah BI di Rp 14.655/US$.

Namun di tengah pandemi Covid-19 seperti ini, ada beberapa faktor yang turut mem-pengaruhi keekonomian proyek ini. Saat ekonomi global terpuruk seperti sekarang ini, harga batu bara anjlok karena per-mintaan yang melemah.

Anjloknya harga batu bara juga dibarengi dengan anjloknya harga gas. Menurut kalkulasi asosiasi perusahaan tambang batu bara RI (APBI) ada 85 juta ton permintaan terganggu akibat pandemi.

Hal ini berujung pada anjloknya harga batu bara acuan RI bulan Juli dipatok sebesar US$ 52,16/ton sekaligus menandai harga terendah sejak Februari 2016 atau empat tahun silam.

Dengan asumsi harga batu bara berkalori rendah berada di US$ 27,22/ton maka proyek gasifikasi yang akan digarap oleh PTBA akan menghasilkan internal rate of return (IRR) sebesar 11,52%. Namun saat ini harga batu bara berkalori rendah RI sudah berada di level US$ 24/ton. Harga gas pun juga turun.

Tentu ini jadi tantangan tersendiri bagi program pengembangan produk hilir seperti gasifikasi batu bara yang terkenal capital intensive dan berisiko tinggi. Namun hal yang tidak boleh dilupakan juga adalah mewujudkan kemandirian energi dan mengurangi ketergantungan impor juga hal yang harus diperjuangkan. TIM RISET CNBC INDONESIA (twg/twg)

IMA-Daily Update Page 12

Nickel Sales Increase, Antam (ANTM) Presses Production Costs

Finna U. Ulfah

METAL mining issuer, PT Aneka Tambang

Tbk., Managed to record growth in production and sales performance of nickel during the second quarter of 2020 despite facing business challenges due to the Covid-19 pandemic sentiment.

Based on the study of consultant Wood Mackenzie, the achievement of ANTM's cash production costs of US$ 3.33 per pound is below the average global ferronickel producer in the range of US$ 4.85 per pound.

In the second quarter of 2020, issuers with coded ANTM shares produced 6,447 tons of ferronickel in ferronickel (TNi). Realization was up 2 percent compared to the first three months of this year of 6,315 TNi.

In terms of sales, ANTM recorded 11 percent performance growth compared to sales in the first quarter of 2020, to 6,867 TNi for the April-June 2020 period.

From this, the cumulative production of ANTM for ferronickel commodities reached 12,762 TNi and sales of 13,045 TNi during the first half of 2020.

This achievement is equivalent to 48 percent of each of the targets set by the company earlier this year.

For nickel ore, the company managed to record production growth of up to 18 percent from 628 thousand wet metric tons (WMT) in the first quarter of 2020, to 745 thousand WMT.

Penjualan Nikel Naik, Antam (ANTM) Tekan Biaya Produksi

Finna U. Ulfah

EMITEN pertambangan logam, PT Aneka

Tambang Tbk., berhasil membukukan pertumbuhan kinerja produksi dan penjualan nikel sepanjang kuartal II/2020 kendati dihadapi tantangan bisnis akibat sentimen pandemi Covid-19.

Berdasarkan studi konsultan Wood Mackenzie, capaian biaya tunai produksi ANTM sebesar US$3,33 per pon berada di bawah rata-rata produsen feronikel global di kisaran US$4,85 per pon.

Pada kuartal II/2020, emiten berkode saham ANTM memproduksi feronikel sebesar 6.447 ton nikel dalam feronikel (TNi). Realisasi itu naik 2 persen di-bandingkan dengan tiga bulan pertama tahun ini sebesar 6.315 TNi.

Dari sisi penjualan, ANTM mencatatkan pertumbuhan kinerja 11 persen daripada apaian penjualan pada kuartal I/2020, menjadi sebesar 6.867 TNi untuk periode April- Juni 2020.

Dari itu, secara kumulatif produksi ANTM untuk komoditas feronikel mencapai 12.762 TNi dan penjualan sebesar 13.045 TNi sepanjang paruh pertama 2020.

Capaian itu setara dengan 48 persen daripada masing-masing target yang sudah ditetapkan perseroan pada awal tahun ini.

Untuk komoditas bijih nikel, perseroan berhasil mencatatkan pertumbuhan produksi hingga 18 persen dari 628 ribu wet metric ton (WMT) pada kuartal I/2020, menjadi sebesar 745 ribu WMT.

IMA-Daily Update Page 13

Meanwhile, the company managed to record 168 thousand WMT of nickel ore sales in the second quarter of 2020, improving its first three-month perfor-mance which failed to record sales.

Thus, during the first half of this year the company's nickel ore production reached 1.37 million WMT with sales reaching 168 thousand WMT.

To note, the nickel ore is used as raw

material for ferronickel smelters for the purpose of selling to domestic customers.

Aneka Tambang Company Secretary Kunto Hendrapawoko said that the company managed to record growth in production and sales performance in line with improving global economic conditions and growing nickel demand.

ANTM is optimistic that it can increase the profit margin of the nickel business in 2020.

"This is in line with the company's efforts to improve business competitiveness through a focus on efforts to reduce production cash costs and the imple-mentation of strategic policies related to appropriate and optimal cost efficiency initiatives," Kunto said as quoted from an official statement received by Bisnis on Wednesday (7/22/2020).

He explained, during the first half of ANTM managed to have a ferronickel cash cost of US$ 3.33 per pound and solidified the company's position as a low-cost global ferronickel producer.

Meanwhile, based on the study of consultant Wood Mackenzie, the achieve-ment of ANTM's cash production costs is below the average global ferronickel producer in the range of US$ 4.85 per pound.

Sementara itu, perseroan berhasil mem-bukukan penjualan bijih nikel sebesar 168 ribu WMT pada kuartal II/2020, memper-baiki kinerja tiga bulan pertamanya yang gagal membukukan penjualan.

Dengan demikian, sepanjang paruh pertama tahun ini produksi bijih nikel perseroan mencapai 1,37 juta WMT dengan tingkat penjualan mencapai 168 ribu WMT.

Untuk diketahui, bijih nikel itu digunakan sebagai bahan baku pabrik feronikel dengan tujuan penjualan kepada pelanggan domestik.

Sekertaris Perusahaan Aneka Tambang Kunto Hendrapawoko mengatakan bahwa perseroan berhasil mencatatkan pertum-buhan kinerja produksi dan penjualan seiring dengan membaiknya kondisi ekonomi global dan tumbuhnya tingkat permintaan nikel.

ANTM mengaku optimistis dapat me-ningkatkan marjin keuntungan dari bisnis nikel pada 2020.

“Hal tersebut sejalan dengan upaya perseroan untuk meningkatkan daya saing usaha melalui fokus pada upaya penurunan biaya tunai produksi serta implementasi kebijakan strategis terkait inisiatif efisiensi biaya yang tepat dan optimal,” ujar Kunto seperti dikutip dari keterangan resmi yang diterima Bisnis, Rabu (22/7/2020).

Dia menjelaskan, sepanjang paruh pertama ANTM berhasil memiliki biaya tunai produksi feronikel sebesar US$3,33 per pon dan mengukuhkan posisi perseroan sebagai salah satu produsen feronikel global berbiaya rendah.

Adapun, berdasarkan studi konsultan Wood Mackenzie, capaian biaya tunai produksi ANTM itu berada di bawah rata-rata produsen feronikel global di kisaran US$4,85 per pon.

IMA-Daily Update Page 14

The company will also focus on maintaining the nickel export market, especially in the East Asian region such as China and South Korea, along with the Indian market which is still implementing a lockdown. For new markets, ANTM is exploring several potential markets, with the main target being the European Union market. Editor: Hafiyyan

Perseroan juga akan fokus memper-tahankan pasar ekspor nikel, terutama wilayah Asia Timur seperti China dan Korea Selatan, seiring dengan pasar India yang masih menerapkan lockdown. Untuk pasar baru, ANTM tengah menjajaki beberapa pasar potensial, dengan bidikan utama adalah pasar Uni Eropa. Editor : Hafiyyan

Depressed Coal Prices, Cut Production Into Corporate

Solutions Finna U. Ulfah

INDONESIA is predicted to experience an excess supply of coal this year if the issuers with the largest market share are not aggressive enough to cut production this year.

Bloomberg Intelligence analyst Michelle Leung said that cumulatively, coal issuers such as PT Bumi Resources Tbk. (BUMI), PT Adaro Energy Tbk. (ADRO), PT Bukit Asam Tbk. (PTBA), PT Bayan Resources Tbk. (BYAN), and PT Indo Tambanraya Megah Tbk. (ITMG) will only cut production 4.6 percent to 214 million tons by 2020.

This figure is lower than market expectations that expect big companies that cut production by 13 percent throughout 2020 to 530 million tons.

"The reason is that production cuts are expected by the market because a severe oversupply could push coal prices to fall deeper after dropping 20 percent this year to the lowest level since May 2016," Michelle said as quoted by her research publication, Tuesday (7/21/2020).

Harga Batu Bara Tertekan, Pangkas Produksi Jadi Solusi

Korporasi Finna U. Ulfah

INDONESIA diprediksi mengalami kele-bihan pasokan batu bara pada tahun ini jika emiten-emiten dengan pangsa pasar ter-besar tidak cukup agresif untuk memangkas produksinya pada tahun ini.

Analis Bloomberg Intelligence Michelle Leung mengatakan bahwa secara kumulatif, emiten batu bara seperti PT Bumi Resources Tbk. (BUMI), PT Adaro Energy Tbk. (ADRO), PT Bukit Asam Tbk. (PTBA), PT Bayan Resources Tbk. (BYAN), dan PT Indo Tambanraya Megah Tbk. (ITMG) hanya akan memangkas produksi 4,6 persen menjadi 214 juta ton pada 2020.

Angka itu lebih rendah daripada ekspektasi pasar yang mengharapkan emiten-emiten kakap itu memangkas produksi hingga 13 persen sepanjang 2020 menjadi 530 juta ton.

“Pasalnya, pemangkasan produksi sangat diharapkan pasar karena kelebihan pasokan yang parah dapat mendorong harga batu bara anjlok lebih dalam setelah sempat turun 20 persen pada tahun ini ke level terendah sejak Mei 2016,” ujar Michelle seperti dikutip dari publikasi risetnya, Selasa (21/7/2020).

IMA-Daily Update Page 15

He estimated that the price of Indonesia's reference coal (HBA) remained at a low position until 2021 in line with the projected deterioration in domestic coal supply that had worsened.

Moreover, given the plans to tighten coal imports by China and India, Indonesia's traditional consumers, which makes export potential more uncertain.

The HBA is projected to fall 25 percent to US$ 58 per ton, lower than the estimated price by the Ministry of Energy and Mineral Resources (ESDM) in the range of US$ 61.7 per ton.

The market expects that there will be at least a production cut of around 20 percent in Indonesia so that there is stability that can drive prices. Meanwhile, until May 2020, Michelle noted that domestic coal production had dropped 9 percent.

Thus, domestic coal production is expected to decrease by 16 percent for the period June to December in order to achieve the expected reduction in supply by 20 percent throughout 2020.

On the other hand, this is expected to be a consideration for the issuers considering that the company's performance will depend on rising and falling prices.

Michelle rate, BYAN and ITMG are the most aggressive issuers to reduce production, while PTBA and ADRO are considered still trying to increase production by 4 percent and 0 percent respectively.

Quoting the BYAN report published in May 2020, the large capitalized issuer has cut production guidelines by around 19.2 percent compared to those set at the beginning of this year. The BYAN production guide for 2020 dropped to 26 million tons compared to the previous guide of 31-33 million tons.

Dia memperkirakan, harga batu bara acuan (HBA) Indonesia tetap berada di posisi rendah hingga 2021 seiring dengan proyeksi kelebihan pasokan batu bara dalam negeri yang memburuk itu.

Apalagi, mengingat adanya rencana pengetatan impor batu bara oleh China dan India, konsumen tradisional Indonesia, yang membuat potensi ekspor lebih tidak pasti.

HBA diproyeksi turun 25 persen menjadi US$58 per ton, lebih rendah daripada perkiraan harga oleh Kementerian Energi dan Sumber Daya Mineral (ESDM) di kisaran US$61,7 per ton.

Pasar mengharapkan setidaknya terdapat pemangkasan produksi sekitar 20 persen di Indonesia sehingga terdapat kestabilan yang dapat mendorong harga. Adapun, hingga Mei 2020, Michelle mencatat produksi batu bara dalam negeri sudah turun 9 persen.

Dengan demikian, produksi batu bara dalam negeri diharapkan berkurang 16 persen untuk periode Juni hingga Desember agar tercapai ekspektasi pengurangan pasokan sebesar 20 persen sepanjang 2020.

Di sisi lain, hal ini diharapkan menjadi pertimbangan para emiten mengingat kinerja perseroan pun salah satunya akan bergantung pada naik dan turunya harga.

Michelle menilai, BYAN dan ITMG adalah emiten yang paling agresif untuk mengu-rangi produksi, sedangkan PTBA dan ADRO dinilai masih berusaha untuk meningkatkan produksi masing-masing sebesar 4 persen dan 0 persen.

Mengutip laporan BYAN yang diterbitkan pada Mei 2020, emiten berkapitalisasi terjumbo itu telah memangkas panduan produksi sekitar 19,2 persen daripada yang sudah ditetapkan pada awal tahun ini. Panduan produksi BYAN pada 2020 turun menjadi 26 juta ton dibandingkan dengan panduan sebelumnya sebesar 31-33 juta ton.

IMA-Daily Update Page 16

Management of Bayan Resources said that the revision of the guidelines was carried out taking into account the performance of the first quarter of 2020 in line with the Tabang Mine which ceased operations from March 25 to May 14, 2020 due to security concerns related to Covid-19.

In addition, the decline in BYAN's coal production volume guide was also caused by the excess supply in the market and the company's high level of coal inventory, the rest of last year.

On the other hand, Bumi Resources Director and Corporate Secretary Dileep Srivastava said that the company would maintain production guidance this year in the range of 85-89 million tons.

"There is no change in the guideline target for this year," Dileep told Bisnis.

However, the guidelines have actually been below the company's mine production capacity this year at around 90-95 million tons. Dileep explained, the company will tend to focus on cutting production costs of US$ 2 to US$ 4 per ton so that production costs are in the position of US$ 30 per ton.

At present, the average production cost of the company is in the range of US$ 34 per ton.

Manajemen Bayan Resources mengatakan bahwa revisi panduan tersebut dilakukan dengan mempertimbangkan kinerja kuartal I/2020 sejalan dengan Tambang Tabang yang menghentikan operasionalnya mulai 25 Maret hingga 14 Mei 2020 karena masalah keamanan terkait Covid-19.

Selain itu, penurunan panduan volume produksi batu bara BYAN itu juga di-sebabkan jumlah pasokan yang berlebih di pasar dan tingkat persediaan batu bara perseroan yang tinggi, sisa dari tahun lalu.

Di sisi lain, Direktur dan Corporate Secretary Bumi Resources Dileep Srivastava mengata-kan bahwa perseroan akan mempertahan-kan panduan produksi tahun ini di kisaran 85-89 juta ton.

“Tidak ada perubahan target panduan untuk tahun ini,” ujar Dileep kepada Bisnis.

Namun, sesungguhnya panduan itu telah berada di bawah kapasitas produksi tambang perseroan pada tahun ini di kisaran 90-95 juta ton. Dileep menjelaskan, per-seroan akan cenderung fokus untuk me-mangkas biaya produksi US$2 hingga US$4 per ton sehingga biaya produksi berada di posisi US$30 per ton.

Saat ini, rata-rata biaya produksi perseroan berada di kisaran US$34 per ton.

COAL PRODUCTION TABLE (million tons)

2019 Estimated 2020

Growth yoy (%)

Apr-Dec 2019

Apr-Dec 2020 (Estimated)

Growth yoy (%)

BUMI 86 85 -1,5 66 64 -3,4 ADRO 54 54 0 40 40 -1,6 BYAN 32 26 -18,5 24 19 -23,4 PTBA 29 30 4,1 23 25 6 ITMG 23 19 -18,8 18 15 -17,6 Total Indonesian Production

610 530 -13,1 462 382 -17,4

Five Issuers' Market Share

36,8% 40,4% 37,3% 42,4%

Sumber: Bloomberg Intelligence

IMA-Daily Update Page 17

CUT PRODUCTION

Meanwhile, Corporate Secretary of Bukit Asam Apollonius Andwie C. said that the company was still limited to opening options for cutting coal production while looking at market developments both in terms of demand and price.

"If later the results indicate that it is

necessary to make adjustments to production volume, of course we will do the option," Apollonius told Bisnis on Saturday (07/18/2020).

Meanwhile, PTBA targets this year's production to reach 30.3 million tons, up four percent from last year's realization of 29.1 million tons.

Adaro Energy's Head of Corporate Communication Division Febriati Nadira

said that the company had anticipated a decline in production compared to last year's realization in line with the current coal market conditions.

The company predicts coal production this year will be below the target this year,

which is 54 million - 58 million tons. In 2019, the company has produced 58 million tons, higher than the guidelines set last year of 54 million - 56 million tons.

"We will also keep abreast of market developments while continuing to carry out operations according to plan at the company's mine," Febriati told Bisnis on Friday (07/17/2020).

The Company will also focus on efforts to improve operational excellence, control costs and efficiency, and execute strategies for business continuity and maintain solid performance. Editor: Hafiyyan

PANGKAS PRODUKSI

Sementara itu, Sekretaris Perusahaan Bukit Asam Apollonius Andwie C. menga-takan bahwa perseroan masih sebatas membuka opsi pemangkasan produksi batu bara sembari mencermati perkem-bangan market baik dari sisi permintaan maupun harga.

“Apabila nanti hasilnya menunjukkan perlu untuk dilakukan penyesuaian terhadap volume produksi, tentunya opsi tersebut akan kami lakukan,” ujar Apollonius kepada Bisnis, Sabtu (18/7/2020).

Adapun, PTBA menargetkan produksi tahun ini sebesar 30,3 juta ton, naik empat persen dari realisasi tahun lalu sebesar 29,1 juta ton.

Head of Corporate Communication Division Adaro Energy Febriati Nadira mengatakan bahwa perseroan sudah mengantisipasi adanya penurunan produksi dibandingkan dengan realisasi tahun lalu seiring dengan memperhatikan kondisi pasar batu bara saat ini.

Perseroan memprediksi produksi batu bara tahun ini berada di kisaran bawah target tahun ini, yaitu 54 juta - 58 juta ton. Pada 2019, perseroan telah memproduksi 58 juta ton, lebih tinggi daripada panduan yang ditetapkan tahun lalu sebesar 54 juta - 56 juta ton .

“Kami juga akan terus mengikuti perkem-bangan pasar dengan tetap menjalankan kegiatan operasi sesuai rencana di tambang milik perseroan,” ujar Febriati kepada Bisnis, Jumat (17/7/2020).

Perseroan juga akan fokus terhadap upaya peningkatan keunggulan operasional, pengendalian biaya dan efisiensi, serta eksekusi strategi demi kelangsungan bisnis dan mempertahankan kinerja yang solid. Editor : Hafiyyan

IMA-Daily Update Page 18

The nickel commodity is still growing, Antam (ANTM) believes

it can increase profit margins Reporter: Ridwan Nanda Mulyana | Editor:

Tendi Mahadi

PT ANEKA Tambang Tbk (ANTM) recorded the growth of production and sales of nickel in the second quarter of this year. The increase occurred in the production and sale of nickel ore and ferronickel.

Referring to the ANTM nickel commodity anaudited report, in the second quarter (Q2) or April-June 2020, the SOE mineral issuer produced 6,447 tons of ferronickel (TNi). That figure rose slightly by 2% compared to production in the first quarter (January-March 2020) which reached 6,315 TNi.

Meanwhile, ANTM's ferronickel sales performance in Q2 reached 6,867 TNi, growing 11% compared to sales achieve-ments in Q1-2020.

ANTM Corporate Secretary Kunto Hendrapawoko said that the accumulated production and sales performance of ANTM ferronickel during the first semester of 2020 (January-June 2020) were 12,762 TNi and 13,045 TNi respectively.

"When compared with the target set, the production achievements and sales of unaudited ferronickel (Semester I) reached around 48% of the annual target," Kunto said in a written statement received by Kontan.co.di, Wednesday (7/22).

Then, for the nickel ore commodity, ANTM recorded production reaching 745 thousand wet metric tons (WMT). The nickel ore production is used...

Komoditas nikel masih tumbuh, Antam (ANTM) yakin bisa

tingkatkan marjin keuntungan Reporter: Ridwan Nanda Mulyana | Editor:

Tendi Mahadi

PT ANEKA Tambang Tbk (ANTM) mencatat-kan pertumbuhan produksi dan penjualan pada komoditas nikel pada Kuartal II tahun ini. Kenaikan terjadi pada produksi dan penjualan bijih nikel maupun feronikel.

Merujuk pada laporan anaudited komoditas nikel ANTM, pada periode triwulan kedua (Q2) atau April-Juni 2020, emiten mineral BUMN itu memproduksi feronikel sebanyak 6.447 ton (TNi). Angka itu naik tipis sebesar 2% dibanding produksi pada triwulan I (Januari-Maret 2020) yang mencapai 6.315 TNi.

Sementara itu, kinerja penjualan feronikel ANTM pada Q2 mencapai 6.867 TNi, tumbuh 11% dibandingkan capaian penjualan pada periode Q1-2020.

Sekretaris Perusahaan ANTM Kunto Hendrapawoko menyampaikan, akumulasi capaian kinerja produksi dan penjualan unaudited feronikel ANTM sepanjang Semester pertama tahun 2020 (Januari-Juni 2020) masing-masing tercatat sebesar 12.762 TNi dan 13.045 TNi.

"Jika dibandingkan dengan target yang ditetapkan, capaian produksi dan penjualan feronikel unaudited (Semester I) mencapai masing-masing sekitar 48% dari target tahunan," kata Kunto dalam keterangan ter-tulis yang diterima Kontan.co.di, Rabu (22/7).

Lalu, untuk komoditas bijih nikel, ANTM mencatatkan produksi mencapai 745 ribu wet metric ton (WMT). Produksi bijih nikel itu digunakan sebagai...

IMA-Daily Update Page 19

The nickel ore production is used as raw

material for ANTAM's ferronickel smelter

and sales to domestic customers in Q2-

2020.

That number grew 18% compared to the

achievement of nickel ore production in

Q1-2020 of 629 thousand WMT.

Meanwhile, the sales achievement of

unaudited nickel ore in Q2-2020 was

recorded at 168 thousand wmt, growing

significantly when compared to the level of

sales in Q1-2020.

During the first semester of 2020, ANTM's

nickel ore production reached 1.37 million

wmt with sales reaching 168 thousand

wmt.

Kunto said, along with the improving

global economic conditions and the

growing level of nickel demand, ANTM is

optimistic that it can increase the profit

margin of the nickel business in 2020.

"This is in line with ANTM's efforts to

improve business competitiveness through

a focus on efforts to reduce production

cash costs and the implementation of

strategic policies related to appropriate

and optimal cost efficiency initiatives," said

Kunto.

Meanwhile, this step is reflected in the

achievement of the unaudited ANTM cash

cost ferronickel during the first semester of

2020 which reached US$ 3.33 per pound of

nickel. "This achievement solidifies

ANTM's position as part of the low-cost

global ferronickel producer group,"

concluded Kunto.

Produksi bijih nikel itu digunakan sebagai

bahan baku pabrik feronikel ANTAM dan

penjualan kepada pelanggan domestik

pada Q2-2020.

Angka itu tumbuh 18% dibandingkan

capaian produksi bijih nikel pada Q1-2020

sebesar 629 ribu WMT. Sementara itu,

capaian penjualan unaudited bijih nikel

pada Q2-2020 tercatat sebesar 168 ribu

wmt, tumbuh signifikan jika dibandingkan

dengan tingkat penjualan pada Q1-2020.

Sepanjang periode Semester I-2020,

produksi bijih nikel ANTM mencapai 1,37

juta wmt dengan tingkat penjualan men-

capai 168 ribu wmt.

Kunto mengatakan, seiring dengan

membaiknya kondisi ekonomi global serta

tumbuhnya tingkat permintaan nikel,

ANTM optimis untuk dapat meningkatkan

marjin keuntungan dari bisnis nikel pada

tahun 2020.

"Hal tersebut sejalan dengan upaya ANTM

untuk meningkatkan daya saing usaha

melalui fokus pada upaya penurunan biaya

tunai produksi serta implementasi

kebijakan strategis terkait inisiatif efisiensi

biaya yang tepat dan optimal," terang

Kunto.

Adapun, langkah tersebut tercermin pada

capaian tingkat biaya tunai unaudited

feronikel ANTM sepanjang periode

Semester I-2020 yang mencapai US$ 3,33

per pon nikel. "Capaian tersebut mengu-

kuhkan posisi ANTM sebagai bagian dari

kelompok produsen feronikel global

berbiaya rendah," pungkas Kunto.

IMA-Daily Update Page 20

Electricity Consumption Down, Absorption of Domestic Coal

Impacted Reporter: Filemon Agung | Editor:

Handoyo

THE INDONESIAN Coal Mining Association (APBI) assesses that the decline in electricity consumption also affects domestic coal uptake, especially in the second quarter of 2020.

APBI Executive Director Hendra Sinadia explained in general the domestic uptake in the first half of this year was quite affected by the impact of the Covid-19 pandemic. "It's low, especially in the second quarter after implementing the PSBB policy," Hendra told Kontan.co.id, Wednesday (7/22).

Hendra added, APBI projected that domestic coal uptake this year could reach 120 million tons or lower than the Domestic Market Obligation (DMO) target set by the Ministry of ESDM of 155 million tons. He also ensured that the deepest decline was indeed sourced from the electricity sector.

Meanwhile, PT Adaro Energy Tbk agrees the low absorption of coal by the plant owned by PT Perusahaan Listrik Negara (PLN). "Adaro's supply to PLN in Semester I has decreased, mainly due to reduced coal demand for the PLTU/IPP that we supply due to a decrease in electricity demand from PLN," ADRO Marketing Director Hendri Tan told Kontan.co.id, Wednesday (7/22).

Hendri added, until the end of the year the company projects a decline of 5% to 8% in total. Nevertheless,...

Konsumsi listrik turun, serapan batubara domestik terdampak

Reporter: Filemon Agung | Editor: Handoyo

ASOSIASI Pertambangan Batubara

Indonesia (APBI) menilai turunnya konsumsi listrik turut mempengaruhi serapan batubara domestik khususnya di kuartal II 2020.

Direktur Eksekutif APBI Hendra Sinadia menjelaskan secara umum se rapan domestik di paruh pertama tahun ini cukup terimbas dampak pandemi Covid-19. "Memang rendah khususnya kuartal II setelah penerapan kebijakan PSBB," ungkap Hendra kepada Kontan.co.id, Rabu (22/7).

Hendra menambahkan, APBI mem-proyeksikan serapan batubara domestik tahun ini bisa mencapai 120 juta ton atau lebih rendah dari target Domestic Market Obligation (DMO) yang ditetapkan Kemen-terian ESDM sebanyak 155 juta ton. Ia pun memastikan penurunan paling dalam memang bersumber dari sektor kelistrikan.

Sementara itu, PT Adaro Energy Tbk mengamini rendahnya serapan batubara oleh pembangkit milik PT Perusahaan Listrik Negara (PLN). "Pasokan Adaro ke PLN di Semester I ini mengalami penurunan, utamanya disebabkan berkurangnya kebutuhan batubara PLTU/IPP yg kita supply akibat penurunan demand listrik dari PLN," ungkap Direktur Pemasaran ADRO Hendri Tan kepada Kontan.co.id, Rabu (22/7).

Hendri menambahkan, hingga akhir tahun nanti pihaknya memproyeksikan penurunan mencapai 5% hingga 8% secara total. Kendati demikian,...

IMA-Daily Update Page 21

Nevertheless, he said he would not revise the contract because the reduction was still within the quantity tolerance level in the contract.

On the other hand, Hendri made sure to enter the third quarter of this year, the absorption of coal for PLN's power plants began to increase compared to the previous second quarter. This is considered in line with the improving electricity demand for PLN.

Meanwhile, Hendra explained that his party had conveyed the condition of decreasing domestic absorption to the government. The decline in domestic absorption is also seen as having an impact on the DMO target this year. "We have already said, and hope that there is a DMO reconciliation and the provisions of the fines will not be enforced," explained Hendra.

Hendra also ensured, with the economic recovery in the rest of the year, an increase in domestic uptake might occur. Never-theless, the decrease in overall uptake in this year is difficult to avoid. Meanwhile, signals of economic recovery are starting to emerge. This is evident from the presentation of Minister of Finance Sri Mulyani in our APBN exposure live on Monday (7/20).

The increase in electricity consumption by industry is a sign that there is an economic boom. "Electricity consumption increased by 5.4 percent last June. So there is a sign of a turn around or reversing direction of our economy," said Minister of Finance Sri Mulyani. If in May, electricity consumption was minus 10.7% then in June there was an increase of 5.4%.

More specifically, the Minister said, electricity consumption for social needs grew by 3.7%, household electricity consumption rose by 12.7%, and electricity consumption for industry rose by 3.7%.

Kendati demikian, pihaknya memastikan belum akan melakukan revisi kontrak pasalnya penurunan tersebut masih dalam taraf toleransi kuantitas dalam kontrak.

Disisi lain, Hendri memastikan memasuki kuartal III tahun ini serapan batubara untuk pembangkit PLN mulai meningkat ketimbang kuartal II lalu. Hal ini dinilai sejalan dengan membaiknya demand listrik PLN.

Adapun, Hendra menjelaskan pihaknya telah menyampaikan kondisi penurunan serapan domestik ke pemerintah. Penurunan serapan domestik ini dinilai juga bakal berdampak pada target DMO tahun ini. "Sudah kita sampaikan, dan harapannya agar ada rekonsiliasi DMO dan ketentuan denda tidak diberlakukan," terang Hendra.

Hendra pun memastikan, dengan pulihnya ekonomi di sisa tahun ini maka pening-katan serapan domestik mungkin terjadi. Kendati demikian, penurunan serapan secara keseluruhan dalam tahun ini rasanya sulit untuk dihindari. Adapun, Sinyal pemulihan ekonomi mulai nampak. Ini yang nampak dari paparan Menteri Keuangan Sri Mulyani dalam paparan APBN Kita secara live, Senin (20/7).

Kenaikan konsumsi listrik oleh industri menjadi tanda mulai ada geliat ekonomi. “Konsumsi listrik meningkat 5,4 persen pada Juni lalu. Jadi ada tanda turn around atau berbalik arah ekonomi kita,” ujar Menteri Keuangan Sri Mulyani. Jika bulan Mei, konsumsi listrik minus 10,7% maka pada bulan Juni ada kenaikan 5,4%.

Lebih rinci, Menkeu menyebut, konsumsi listrik untuk kebutuhan sosial tumbuh 3,7%, konsumsi listrik rumah tangga naik 12,7%, dan konsumsi listrik untuk industri naik 3,7%.

IMA-Daily Update Page 22

Even so, electricity consumption for business needs is still minus 10.5 percent. "Industrial electricity from negative has gone up. So in total, electricity consump-tion which was minus now is in the positive zone of 5.4 percent," he added.

Of the portion, electricity consumption for social needs accounted for 3.5% of total consumption, household electricity con-sumption contributed 42.3%, electricity consumption for industry accounted for 31.7%, and electricity consumption for business purposes accounted for 18.4%.

Meski begiti, konsumsi listrik untuk keperluan bisnis masih minus 10,5 persen. "Listrik industri dari negatif sudah naik. Jadi secara total, konsumsi listrik yang tadinya minus sekarang sudah di zona positif 5,4 persen," imbuhnya.

Dari porsinya, konsumsi listrik untuk kebutuhan sosial menyumbang 3,5% dari total konsumsi, konsumsi listrik rumah tangga berkontribusi 42,3%, konsumsi listrik untuk industri menyumbang 31,7%, dan konsumsi listrik untuk keperluan bisnis menyumbang 18,4%.

Depressed Continually, Coal Prices Will Touch the Lowest

Level? Tirta Citradi, CNBC Indonesia

COAL prices rose slightly but yesterday experienced a correction. Coal prices are still depressed and not yet excited. There is a possibility that the price will return to its lowest point.

Wednesday (7/22/2020) Newcastle's coal reference price for actively tr aded contracts fell 0.93% to US$ 53.5/ton. In the period of July 15-22, coal prices had corrected 3.6%.

Coal prices touched their lowest point on April 27, 2020 at the level of US$ 50.9/ton. After touching its lowest level this year, coal prices then moved sideways and never broke above US$ 60/ton.

The outbreak of the Covid-19 outbreak in Australia to date has not been assessed as affecting the production of the Kangaroo State. Outbreak hotspots are...

Tertekan Terus, Harga Batu Bara Bakal Sentuh Level

Terendah? Tirta Citradi, CNBC Indonesia

HARGA batu bara sempat naik tipis tetapi kemarin kembali mengalami koreksi. Harga batu bara masih tertekan dan belum bergairah. Ada kemungkinan harga akan kembali menyentuh titik terendahnya.

Rabu (22/7/2020) harga batu bara acuan Newcastle untuk kontrak yang aktif diperdagangkan melemah 0,93% ke US$ 53,5/ton. Pada periode 15 - 22 Juli, harga batu bara telah terkoreksi 3,6%.

Harga batu bara menyentuh titik terendah pada 27 April 2020 di level US$ 50,9/ton. Setelah menyentuh level terendahnya di tahun ini, harga batu bara kemudian ber-gerak sideways dan tak pernah tembus ke atas US$ 60/ton.

Merebaknya kembali wabah Covid-19 di Australia sampai saat ini belum dinilai dapat mempengaruhi produksi Negeri Kangguru. Hotspot wabah adalah...

IMA-Daily Update Page 23

Outbreak hotspots are Melbourne, Victoria, which is geographically far from the main export coal producing regions in NSW and Queensland.

In this region, restrictions on mobility have not been tightened, but Sydney and NSW have recorded growth in the number of cases. At this stage, the outbreak is unlikely to have a significant impact on Australia's coal production or export.

Thermal coal imports in the twelve major ports of India fell 35% to 17.71 million tons in the first quarter of the current Indian fiscal year (April to June), according to the Indian Port Association (IPA).

Affected by the pandemic, coal imports of coke also recorded a decrease of 28% to 10.69 million tons in the quarter. These ports have handled 27.13 million tons of thermal coal and 14.95 million tons of coking coal during the April-June period of the previous fiscal year.

Turning to other countries, Vietnam's coal imports surged by 60.3% (yoy) in June 2020 to 6.3 million tons, according to Refinitiv Coal Flow data. Vietnam is one of the few markets where coal demand has grown amid the Covid-19 pandemic.

The country is actively turning to imported coal to meet the increasing needs of the coal-fired power sector. Figures for the first six months of 2020 show Vietnam imported a total of 31.5 million tons of coal, up 53.8% compared to semester I-2019.

The most coal imports came from Australia (10.8 million tons), Indonesia (9.8 million tons) and Russia (4.4 million tons).

From the supply side, China's crude coal production reached 334.28 million tons in June, down 1.2% from June 2019 but up 4.84% from May 2020, when referring to data from the National Statistics Bureau showing on July 16.

Hotspot wabah adalah Melbourne, Victoria, yang secara geografis jauh dari daerah penghasil batubara ekspor utama di NSW dan Queensland.

Di wilayah ini, pembatasan mobilitas belum diperketat, tetapi Sydney dan NSW telah men-catatkan pertumbuhan dalam jumlah kasus. Pada tahap ini, wabah tersebut kemungkinan tidak akan berdampak signifikan pada produksi atau ekspor batu bara Australia.

Impor batu bara termal di dua belas pelabuhan utama India turun 35% menjadi 17,71 juta ton pada kuartal pertama tahun fiskal India saat ini (April hingga Juni), menurut Asosiasi Pelabuhan India (IPA).

Terkena dampak pandemi, impor batu bara kokas juga mencatatkan penurunan sebesar 28% menjadi 10,69 juta ton pada kuartal tersebut. Pelabuhan-pelabuhan ini telah menangani 27,13 juta ton batu bara termal dan 14,95 juta ton batu bara kokas selama periode April-Juni tahun anggaran sebelumnya.

Beralih ke negara lain, impor batubara Vietnam tercatat melonjak 60,3% (yoy) pada Juni 2020 menjadi 6,3 juta ton, menurut data Refinitiv Coal Flow. Vietnam menjadi salah satu dari sedikit pasar di mana permintaan batu bara telah tumbuh di tengah pandemi Covid-19.

Negara ini secara aktif beralih ke batu bara impor untuk memenuhi kebutuhan yang terus meningkat dari sektor pembangkit listrik tenaga batu bara. Angka untuk enam bulan pertama tahun 2020 menunjukkan Vietnam mengimpor total 31,5 juta ton batu bara atau naik 53,8% dibandingkan dengan semester I-2019.

Impor batu bara paling banyak berasal dari Australia (10,8 juta ton), Indonesia (9,8 juta ton) dan Rusia (4,4 juta ton).

Dari sisi pasokan, produksi batu bara mentah China mencapai 334,28 juta ton pada Juni, turun 1,2% dari Juni 2019 tetapi naik 4,84% dari Mei 2020, jika mengacu pada data dari Biro Statistik Nasional menunjukkan pada 16 Juli.

IMA-Daily Update Page 24

Average daily output reached 11.14 million tons in June, edging up 0.86 million tons from May. The country's total coal production rose 0.6% YoY to 1.81 billion tons in the first six months of this year, while output dropped 0.5% in the first three months, indicating coal mining activity increased in the second quarter.

This is consistent with the increase in

Chinese coal consumption in the second quarter, as the economy recovered from a sharp fall in demand due to lockdown in the first quarter. CNBC INDONESIA RESEARCH

TEAM (twg/twg)

Output rata-rata harian mencapai 11,14 juta ton pada bulan Juni, naik tipis 0,86 juta ton dari Mei. Total produksi batu bara negara itu naik 0,6% YoY menjadi 1,81 miliar ton dalam enam bulan pertama tahun ini, sedangkan output turun 0,5% dalam tiga bulan pertama, menunjukkan aktivitas penambangan batu bara meningkat pada kuartal kedua.

Ini konsisten dengan peningkatan konsumsi batu bara Tiongkok pada kuartal kedua, karena ekonominya pulih dari penurunan tajam permintaan akibat lockdown pada kuartal pertama. TIM RISET CNBC INDONESIA (twg/twg)

Gold price surpasses $1,860 – highest since 2011 MINING.com Editor

GOLD prices kept their upward momentum on Wednesday, passing the nine-year peak set during the previous trading day, as investors place bets more stimulus measures will ease the economic impact of the coronavirus pandemic.

Spot gold was up 1.0% to $1,860.43/oz by 11:30 a.m. EDT, after reaching its highest since September 2011 earlier in the day at $1,864.90/oz. US gold futures were 1.3% higher at $1,867.40/oz in New York.

“The fact that governments, central banks and pretty much everyone else are looking to more fiscal and monetary policy inputs is helping drive the yellow metal,” Michael Hewson, chief market analyst at CMC Markets UK told Reuters.

“With equities struggling to push higher, gold is likely to test $1,900/oz over the next few days and weeks,” Hewson said, adding that “only an improvement in the pandemic situation and the economy could stop gold’s bull run.”

Bullion has surged nearly 22% this year and is now within $70 of an all-time high, bolstered by low interest rates and waves of government stimulus to revitalize virus-hit economies.

Deepening negative yields in the US Treasury market are fueling gold’s recent rally, with five-year treasuries currently yielding -1.15% once the effects of inflation are stripped out, a seven-year low.

“Gold is a superior form of purchasing power protection and as real rates dive significantly below zero here, gold is relatively more attractive as a hedge,” Sprott Inc. CEO Peter Grosskopf told Bloomberg.

IMA-Daily Update Page 25

“The damage inflicted to the dollar as a result of fiscal spending and falling real interest rate

due to monetary easing provide bullish factors for gold,” said Yuichi Ikemizu, head of the

Japan Bullion Market Association. “As long as this environment continues, gold will continue

to rise.”

So far this year, investors have poured record amounts into gold-backed exchange-traded

funds (ETFs), increasing their holdings by 28% to more than 105 million ounces, according to

data compiled by Bloomberg, taking the total value to $195 billion.

Silver boon

Silver is also posting a significant bull rally as the driving forces behind gold spill into other

precious metals.

Spot silver jumped more than 8% on Wednesday — the biggest gain since March — and has

been getting an added boost from supply concerns and optimism about a rebound in

industrial demand.

Trading at more than $22/oz, the spot price has gained 14% in the past week and is near a

seven-year high.

Silver for September delivery also rose as much as 8.3% on the Comex to $23.35 an ounce, the

highest for a most-active contract since 2013.

“In the very short-term term the direction is still upwards,” Carsten Fritsch, a Commerzbank

AG analyst, said of gold and silver. “You see that prices continue to march higher. There might

be some setbacks, but these are just brief and short-lived and are being used as a buying

opportunity.” (With files from Bloomberg and Reuters)

IMA-Daily Update Page 26

Strong Cadia performance guides Newcrest to production record Nickolas Zakharia

NEWCREST Mining has continued its bullish development at its Cadia gold mine in New South Wales, leading to operational records headlining the June quarter.

The company achieved a record annualised mine ore volume of 31.8 million tonnes a year and record annualised mill throughput rate of 34.2 million tonnes a year at Cadia for the June quarter.

This solid quarter led Cadia to exceed its annual production guidance and also achieved a 21 per cent increase in gold production compared to the March quarter.

Cadia’s operations have not been stalled by COVID-19 and have not experienced any “disruptions to the supply of goods or services or to its workforce.”

Newcrest managing director and chief executive officer Sandeep Biswas said Cadia’s performances highlighted its benefits as an asset to the company.

“Newcrest has safely delivered a strong fourth quarter enabling us to meet our Group gold production guidance for the year, notwithstanding the challenges of addressing the risks associated with the COVID-19 pandemic,” he said.

“Cadia exceeded the top end of its production guidance range and achieved record annualised mine and mill throughput rates in the quarter, further highlighting the strength of this world-class asset.”

Newcrest produced 573,000 ounces of gold in the June quarter overall, marking a 7 per cent increase from the March quarter.

Biswas said the company had not encountered a single positive case of COVID-19 across its workforce.

“This is a reflection of the extensive program of preventative actions we have implemented, the support of our host communities and governments in the jurisdictions in which we operate and the adherence to safe practices by our people,” he said.

Newcrest’s all-in sustaining cost (AISC) also increased by 7 per cent to $878 an ounce in the June quarter.

“The 7 per cent increase was primarily driven by higher levels of sustaining capital at Cadia and Lihir, timing of sales at Lihir and lower by-product credits reflecting a lower realised copper price,” Newcrest stated.

The company’s other Australian asset, the Telfer gold mine in Western Australia, achieved a 37 per cent increase to its mill throughput in the June quarter, with gold production at 17 thousand ounces higher than the March quarter.

Stripping and mining in Telfer’s Main Dome was completed in the June quarter, with all open pit mining activities now taking place at the mine’s West Dome.

IMA-Daily Update Page 27

Copper miner Antofagasta maintains guidance By: Mariaan Webb, Creamer Media Deputy Editor Online

CHILEAN copper miner Antofagasta has maintained its guidance at the lower end of its original target range for the year, having gained experience in working safely in the new era of Covid-19.

The company is operating close to forecast production levels, CEO Ivan Arriagada said on Wednesday, announcing half-year output of 371 700 t, which is in line with its expectations and 4% lower than in the same period last year.

Antofagasta has managed to expand its activity in areas that it initially restricted, such as mine development and maintenance, he said. “We believe we can continue to operate at current levels until the end of the year, assuming no further Covid-19-related restrictions are imposed.”

The miner is forecasting full-year production at the lower end of its original 725 000 t to 755 000 t range, at a net cash cost of $1.20/lb.

The company is operating with about two-thirds of its workforce at its operations with most of the balance working from home.

Growth projects at Los Pelambres, Centinela and Zaldívar have largely been suspended since March with some limited work continuing, mostly on the desalination plant at Los Pelambres. Antofagasta announced that it planned to restart the Los Pelambres expansion and Zaldívar chloride leach projects gradually during the third quarter, fully integrating new health protocols for Covid-19 into the revised project execution plans.

Major copper miners operating in Chile, the world's top copper producer, have largely maintained output even as measures to combat the coronavirus have devastated other parts of its economy.

Unions at Antofagasta’s Zaldívar mine recently claimed that workers risked their lives to maintain production at prepandemic levels "with a high cost to our health", claiming that there had been a number of confirmed coronavirus cases among the mine’s work force.

Antofagasta and unionised workers at Zaldívar have entered into mediation with the government to stave off a strike, after workers voted in favour of a walk-off, rejecting a new contract offer which they said had stripped them of current benefits.

The company reported on Wednesday that negotiations with the workers’ union at Zaldívar and the supervisers’ union at Centinela were in the first week of the government mediation phase, which would complete this week. If both the union and the company agree, mediation could be extended a further five working days .

The labour agreement with the largest workers’ union at Centinela was successfully agreed in June. Negotiations with the two other unions at Centinela will be completed during the rest of the year.

IMA-Daily Update Page 28

The coronavirus stopped coal imports in Poland

3.25 MILLION TONS – that’s how much coal Poland bought abroad in the first four months of the year. This is a huge drop in comparison to previous years – writes Karolina Baca-Pogorzelska, contributor at BiznesAlert.pl.

Demand and production

The coronavirus hurt the coal sector not only in Poland, but also across the world. The demand for coal plummeted dramatically, but its production dropped as well. In Poland’s Silesia some mines were temporarily closed, which made it possible to contain the rapid growth of coal mounds for a while.

According to the Industrial Development Agency’s data, in May the domestic producers finally managed to sell a little bit more coal than they extracted (a 0.3 m ton difference), which means that the growth of reservers was temporarily stopped. More recent data are unavailable. This also pertains to Eurostat. We made a comparison of coal imports to Poland between this year and a couple of years back.

Currently, full data are available for only four months, but they do encompass April, which was the first full month impacted by the coronavirus. If this trend sticks, it is very possible that this year’s foreign purchases of the black gold will finally drop below 10 million tons.

This is because during the first four months Poland bought only 3.25 m tons of coal outside of its borders. Why ‘only’? If we examine the Eurostat data from the previous years, it is plain to see that import ran out of steam not only because of the coronavirus, but also because of the warm winter and the growing participation of renewable energy sources (RES) in Poland’s power system. Suffice it to say that after the first six months PV grew to over 2.1 GW of installed capacity.

On top of that, power generation from coal has been systematically decreasing to about 70% (RES have priority in the system). Believing this trend is only temporary or blaming COVID-19 is just wishful thinking. Especially that thermal coal still dominates imports and coking coal, used for producing steel, is in the minority.

Last year between January and April, Poland imported 5.71 million tons of coal, a year earlier that figure was 5.66 million tons.

The situation gets even more interesting if we look at coal from Russia, which is the biggest exporter of coal to Poland. In this instance Eurostat provides data for the period between January and May and the drops are spectacular. During the first five months of this year, 2.7 million tons of the fuel arrived to Poland. In the same period last year the figure was 4.76 million tons, and in 2018, which was a record-breaking year (when the total import of hard coal to Poland reached almost 20 m tons) it was 5.05 m tons.

What about coal prices across the world? The quotes from 17 of July said a ton of coal in the ARA ports (Amsterdam – Rotterdam – Antwerp) cost USD 55.55, whereas at the end of January the price was at almost USD 60 (on 13 of July a similar price peak was visible at ARA). However, at the end of April the prices were significantly lower and oscillated around USD 47.5 per ton.

IMA-Daily Update Page 29

What can we expect from the second half of the year? Well, it’s 2020 so forecasting makes absolutely no sense. We do not know when the second wave of the pandemic will hit and how strong it will be. We also don’t know whether it will force Poland and other countries to suspend work in coal mines. We also don’t know what the demand for power will look like if there is a lockdown (because it’s difficult to believe it will be as big as in the spring). So for now any predictions about coal are unreliable, but that doesn’t mean we shouldn’t be talking about that sector’s future in Poland.

Indonesia Amends Mining Law to Encourage More Downstream Investment

Posted by ASEAN Briefing, Written by Ayman Falak Medina • Indonesia’s government made significant amendments to the country’s Mining Law as it

aims to attract more downstream investment into the sector.

• As part of the amendments, the central government will now take control of the issuance of mining permits.

• The new law also introduces new business licenses for the mining of rocks and radioactive materials.

• Companies holding Contract of Work (CoW) and Coal Contract of Work (CCoW) licenses will get a guarantee extension in the form of a new business license.

In May 2020, Indonesia’s government made significant changes to the 2009 Mining Law

through the issuance of Law no 3 of 2020 (Mining Law Revision), which aims to encourage

more investment into the country’s downstream mining industry.

A major portion of the amendments relates to mining permits and their rights and

obligations. Several new licenses have been introduced, such as rock mining certificates and

assignment licenses – the latter can be used to explore radioactive materials.

Another important amendment is the government guarantee for the extension of Contract of

Work (CoW) and Coal Contract of Work (CCoW) permit holders in the form of an Operation

Continuation IUPK license. This will enable businesses holding these two licenses to continue

their operations for effectively a further 20 years.

Indonesia’s mining and petroleum industries contribute to some 60 percent of total exports.

The country is responsible for significant production of a variety of commodities and

minerals, such as thermal coal – for which Indonesia is the world’s largest exporter and

accounts for 90 percent of Southeast Asia’s coal production.

In addition, Indonesia is a major exporter of copper, gold, and bauxite, and nickel. It is also the

world’s largest exporter of palm oil and refined tin.

IMA-Daily Update Page 30

Central government authority

Under the 2009 Mining Law, both the central and regional governments played a key role in the country’s mining industry – to set mining policies, grant licenses, and manage conflict resolution.

A key reform in the Mining Law Revision is the removal of the authority of regional governments to issue all types of mining licenses.

This now falls solely under the authority of the central government. The amendment is part of the government’s efforts to seek improvement in the country’s ease of doing business standings by centralizing the licensing functions of major sectors of the economy.

The newly revised Law, however, does allow the central government to delegate authority to regional governments for the issuance of local community-based mining licenses.

New licensing regime

The 2009 Mining Law recognizes three mining permits. These are:

• Mining business permit (IUP);

• Community mining permit (IPR); and

• Special mining business permit (IUPK).

The amended law has incorporated new types of mining permits. These are:

• Operation Continuation IUPK;

• Rock mining license (SIPB); and

• Assignment license – used for the mining of radioactive materials.

Extension of CoW and CCoW contracts

A CoW contract is essentially a contract between the Indonesian government and the contract holder that sets out the company’s obligations and rights in regard to the mining procedures.

The CoW has a special status as the terms set out in a CoW can override applicable Indonesian laws. This means, for example, the taxation provisions under the CoW is applicable to the CoW holder, regardless if the government changes the country’s tax regulations.

The legal framework for CCoWs is similar to that of CoWs but is more specific to aspects of coal mining.

Under the 2009 Mining Law, the government sought to convert CoW and CCoW contracts to IUPs, IUPKs, and IPRs.

Pursuant to the Mining Law Revision, the government has introduced the Operation Continuation IUPK license for the holders of CoW and CCoW contracts.

The government will guarantee the issuance of the Operation Continuation IUPK license to holders of expiring CoW and CCoW contracts, which just effectively extends the CoW and CCoW contracts.

Under the Operation Continuation IUPK license, CoW and CCoW holders can receive:

• 20 years extension (given in two 10-year extensions) if the CoW or CCoW contracts has never been extended; or

IMA-Daily Update Page 31

• 10-year extension, if the CoW or CCoW contract has been extended before.

Investors should be aware that the issuance of the Operation Continuation IUPK license is, in reality, dependent on the several factors, such as contribution to state revenue as well as the CoW or CCoW company demonstrating good performance in mining operations.

CoW and CCoW companies will need to convert their contracts to an Operation Continuation IUPK license between one to five years before the expiration of their CoW or CCoW contract.

Mining area changes

As part of the amendments to the Mining Law, metal mineral operations under the Operation Continuation IUPK license will not be limited to the maximum area of 25,000 hectares whereas coal productions under the same license will not be limited to the 15,000 hectares as stated in the previous law.

Transfer of licenses

The 2009 Mining Law restricted the transfer of IUP and IUPK licenses unless the transferee is a company that holds 51 percent of the shares of the said IUP or IUPK contract.

Under the amended law, IUP/IUPKs can now be transferred to third parties, which will require approval from the Ministry of Energy and Mineral Resources (MEMR). This is on the condition that the IUP/IUPK company has completed its exploration activities with evidence from data on the relevant reserves in addition to fulfilling the administrative, financial, and technical requirements.

Divestment obligations

Foreign mining companies were already instructed to divest 51 percent of their shares to an Indonesian party (central government, regional government, state-owned enterprises, and/or national private entity) under the 2009 Mining Law. The law stated that divestment should begin by the fifth year of production and 51 percent of shares should be divested by the 10th year.

The revised law is silent on the five to ten-year timeline, rather stating that the divestment obligation should be done in ‘stages’.

Investors should wait for the implementing regulations, which will provide the timing of the divestments.

The government took 51 percent control of PT Freeport Indonesia shares, the principal operating subsidiary of mining giant Freeport-McMoRan, in 2018 from 9.36 percent previously in a US$3.5 billion dollar deal.

Freeport-McMoRan through PT Freeport Indonesia controls the Grasberg mine in Papua province, said to be the largest gold mine and second-largest copper mine in the world.