Mitrais, Member of CAC Holdings Group

Mitrais Mining Newsletter

October 2019 | Vol. 44

Weekly News

Eramet's Nickel Plant in Indonesia to Start Ahead of Schedule in H1 2020

October 23, 2019

French miner and metals producer Eramet (ERMT.PA) said on Wednesday its Weda Bay Nickel plant in Indonesia would start operation ahead of schedule in the first half of 2020, and it reiterated production targets for this year.

Weda Bay, a nickel pig iron (NPI) project, is a nine-million-tonne nickel resource which will be run by Eramet and its joint venture partner, Tsingshan Holding Group.

The company is targeting production of 30,000 tonnes per annum of nickel content at Weda Bay of which 13,000 is offtake for Eramet.

“The plant’s ramp-up of production should benefit from a favorable backdrop for NPI, thanks to the establishment of the Indonesian ban,” the company said in a statement.

Indonesia, the world’s top producer of nickel, said in September it would ban ore exports of the metal from Jan. 1 next year as it seeks to process more of its resources at home.

The ban has helped push the benchmark nickel price CMNI3 up 50% to about $16,400 a tonne, making it the best performing metal on the London Metal Exchange this year.

Eramet previously flagged that Weda Bay would be ahead of schedule but had not provided a timeline. It said in September production would begin in the second half of 2020, reaching full capacity in 2021.

The company’s Paris-listed shares touched a one-month high and were up 4% by 1200 GMT.

Eramet mines manganese, nickel and mineral sands while its alloys division produces steel.

The miner said nickel cash costs at its SLN plant in New Caledonia fell to $5.76 per pound in the third quarter of 2019 versus an average of $6.05 in the first half of 2019.

It said it expected further cost reductions for the fourth quarter.

Sales in the quarter fell 6% to 895 million euros ($995 million) from 951 million euros a year earlier, as magnanese prices fell and on the impact of bringing quality processes into conformity at Aubert & Duval.


Weekly News

Collapse in Coal Prices Spurs Distress for Indonesian Miners

October 21, 2019

The global collapse in coal prices this year has dealt a particularly heavy blow to miners in Indonesia, the top exporter and one of the largest producers of the fuel.

Bonds from the country’s financially weak miners have suffered more than peers elsewhere in Asia due to a lack of diversification and state backing that many competitors enjoy. Prices of thermal coal — the kind burned by power plants — have slumped about 33% this year, and at least four U.S. firms have gone bankrupt.

As some lenders look to stop financing coal power plants and investors are under more pressure to “go green,” companies that mine or use coal are left with fewer funding options.

“Among the Indonesia coal names, some are facing severe stress,” said Bharat Shettigar, head of Asia ex-China corporate credit research at Standard Chartered Plc. “If prices stay depressed for the next 12 to 18 months, there could be restructuring of some U.S. dollar bonds in the Indonesia coal sector.”

Bonds sold by Indonesia coal miners Geo Energy Resources Ltd., PT ABM Investama and PT Bumi Resources have slumped in the past six months.

Geo Energy Resources, which has operations in Kalimantan, faces a potential early redemption of its bonds in April 2021 if it fails to meet certain minimum coal-reserve conditions.

That will be a “crucial liquidity point” for the company, according to Trung Nguyen, analyst at Lucror Analytics.

Geo Energy said by email that its cash balance was $199.6 million as of June 30, and it only needs to generate $100 million from its mines in three years to repay the $300 million bonds due in October 2022.

The company needs a minimum 120 million tons of coal reserves to prevent early redemption, and had around 78 million tons as of June 30 and a proposed acquisition of mines will bring the total to 109 million tons, it said.

ABM Investama was cut to B+ by Fitch Ratings earlier this year, reflecting its weakening business profile due to the loss of coal mining contracts with one of its customers, while Bumi Resources’ first-half net income fell by 47%.

Coal Investment

ABM Investama will be able to repay and refinance its bonds, and the company is focusing on cost reductions and operational efficiencies across the value chain, Adrian Erlangga, director at the company, said by email. He said he expects coal prices will increase in the long term because investments to build coal-fired power plants are outpacing those for new coal mines.

Bumi Resources expects its coal sale volume to increase to 87 to 90 million tons in fiscal 2019 from 80.3 million tons the previous year, said Dileep Srivastava, a director at the company. He said demand for the fuel is rising sharply in India while demand in Asia is normal.

A push among governments and large companies to shift to renewable power poses a threat to fossil fuels such as coal.

“Investors are starting to ask questions about the long-term prospects for thermal coal miners,” said Paul Lukaszewski, head of corporate debt for Asia and Australia at Aberdeen Standard Investments.


Weekly News

Arutmin, BUMI's Business Unit Continues the Sustainable Development Goals (SDGs) Program in Government Involvement in Education

October 21, 2019

PT Bumi Resources Tbk. (“BUMI” or “Company”) as the Largest Coal Producer in Indonesia through its business unit PT Arutmin Indonesia (Arutmin) is again carrying out activities in support of the number four Sustainable Development Goals (SDGs) program, Education. The Corporate Social Responsibility (CSR) activities held in October are:

1. Conduct the Inspiration Class in cooperation with the Banjarbaru City Government, South Kalimantan through the Department of Education. The topics are introducing coal mining allowances, environmentally friendly coal mines, discussing the immediate danger problem to health and introducing healthy lifestyles in front of hundreds of students in the city of Banjarbaru (18/10).

2. Other activities are from the Arutmin Kintap site, Kintap District, Tanah Laut Regency of South Kalimantan in providing educational facilities. The assistance provided was in the form of school uniform packages, shoes and bags for 221 children from elementary to high school around the Kintap Site mine area. The education package distributed was the work of the Arutmin target group in implementing economic empowerment in CSR program (17/10).

3. Annual Scholarship Assistance for students at the Senakin Site in two Subdistricts, North Kelumpang District and Central Kelumpang District, Kotabaru Regency, South Kalimantan with the theme of the Arutmin Education Award. Scholarships were given to 96 students in 27 schools, 18 elementary school (SD), 6 junior high schools (SMP) and 3 senior high schools (SMA) (17/10).

Mr. Saptari Hoedaja as President Director of PT Bumi Resources Tbk highly appreciated the CSR activities carried out by the Company and business units such as Arutmin in supporting the implementation of Government programs in the Sustainable Development Goals (SDGs) program. “This is one of Arutmin’s flagship programs in Education which provides training, scholarship assistance and assistance from Arutmin’s fostered groups in scholarship assistance around the Arutmin mining area. This education is a very important one because the younger siblings who receive this scholarship is a future leader. We will continue to participate and increase awareness of student education and are also very grateful to the Regional Government who always helps in this
activity,” said Saptari Hoedaja.


Weekly News

Head of ESDM Jusuf Adoe Said: Moratorium as an Evaluation for Development

October 22, 2019

The purpose of the moratorium wasto review licenses for companies that want to carry out mining activities, especially manganese ore. Type C mining (quarrying) was excluded from the review. Before Mr. Viktor Laiskodat became Governor there had been no new mining licensesissued under the new system, which is an auction system for the IUPs awaiting licensing. “This system will be executed by the central government through the Ministry of Energy and Mineral Resources. There are some existing but incomplete permit applications needed details such as administration, engineering and financial administration.”

The purpose of moraturium is also to re-evaluate the requirements of the administrative, technical and financial administration system. Regarding companies that have already obtained a production operation permit, Jusuf said, “With the authority of Law 23 of 2014, which is to migrate all mining permit authority from state and district level to the province level.

The Head of ESDM of East Nusa Tenggara, Jusuf A. Adoe, reported to the press in his office on Wednesday (10/9/2019) afternoon.

Jusuf continued “Companies that already obtained production operation permits issued by the state or district level, have to write a letter to the authorities to withdraw their guarantee funds and transfer them to NTT provincial accounts. Some mining companies have now withdrawn theirinvestment collateral from the district account to the province account.

Regarding the number of mining companies that are still active in East Nusa Tenggara, Jusuf said that “there are many companies that are active but with the moratorium the government wants these companies to truly fulfill all the existing rules of administration, engineering, and financial administration.

The results of the evaluation of the Department of Energy and Mineral Resources of NTT, from the mineral and coalsector, after almost a year of moratorium; approximately 30 (thirty) companies have completed the obligations and documentation, and companies that haven’t manage to complete the obligation have now received a letter of notice.” concluded Jusuf.

Regarding the Smelter at Bolok industrial area, the Head of the ESDM Department of NTT stated “The construction of the processing and refining smelter built by one of these companies has been 49.5% completed.

From the results of the meeting with the company as the government expects the company to continue the building process to support the development of mining industry in East Nusa Tenggara.

We can only encourage that those who will later do the export to consider and follow the policy, the ore must go through a refining process and the export port must be from Kupang, the government will support the company to continue the construction of the smelter,” concluded Jusuf.

“These thirty companies which already fulfill their obligations most are manganese mining companies. So before the end the moratorium, our technical service will make a report to the Governor”, closed Jusuf.


Weekly News

Coal-Fired Power Plant Construction Stalls in Southeast Asia, Report Says

October 22, 2019

Construction of coal-fired power plants in Southeast Asia has slowed significantly since 2016, with only Indonesia starting any new stations in the first half of this year, according to a report by Global Energy Monitor.

The region, which has been targeted as a growth center in coming years for coal-fired power, saw 1,500 megawatts of capacity enter construction in the first six months of 2019, following 2,744 megawatts over the whole of 2018, according to the report, which is based on information from public sources, such as media articles and information from non-government agencies. That compares with a peak of 12,920 megawatts in 2016, it said.

Cool on Coal

Coal power construction slowing in Southeast Asia

Construction starts are a strong indicator of the strength of the coal power pipeline, said Ted Nace, executive director of GEM, which is funded by a range of climate change advocacy groups. “To go into construction you have to get someone to commit hundreds of millions of dollars. In Southeast Asia, it looks like it’s becoming a difficult case to convince people to commit that kind of money,” Nace said.

The amount of coal plant capacity in the pre-construction stage has more than halved since 2015, GEM said in the report. With renewable energy increasingly undercutting coal on price and financial institutions backing away from the fuel, it’s likely that much of that pre-construction pipeline was canceled rather than implemented, the report’s authors said.

Southeast Asia has been seen as a potential growth market for big thermal coal producers such as Australia and Indonesia as other parts of the world move toward cleaner energy. The International Energy Agency has forecast coal-fired generation in the region to grow by around a third over the next five years to meet strong electricity demand growth.


Weekly News

Freeport Posts Loss on Lower Copper Output, Prices

October 23, 2019

Freeport McMoRan Inc (FCX.N) posted a third-quarter loss on Wednesday in line with expectations due to lower copper production at its Peruvian and Indonesian mines and a drop in prices for the red metal.

The company has been shifting to underground mining from an open pit at its giant Grasberg mine in Indonesia and had previously warned that production would take a hit. [nL1N21R17K

The drawn out Sino-U.S. trade war and fears of slowing global growth have forced some of the biggest copper consumers, including China, to curb their appetite for the metal, pushing down prices.

“Copper markets today are clearly affected by the trade war,” Freeport Chief Executive Richard Adkerson said on a Wednesday conference call with investors.

Still, copper is a key material used to make electric vehicles and other technological equipment, fueling optimism on long-term demand, Adkerson said.


Weekly News

PT KPC (ZINC) Increase Share Ownership in Kapuas Prima Citra to 70%

October 23, 2019

PT Kapuas Prima Coal (ZINC) increased its share ownership in PT Kapuas Prima Citra up to 70% based on approval at the Extraordinary General Meeting of Shareholders (EGMS) held in Jakarta on 18 October 2019. Previously, PT Kapuas Prima Coal owned 30% shares of PT Kapuas Prima Citra. The transaction value for the purchase of this stock is Rp 43.6 billion. The shares released by PT Kapuas Prima Citra were previously owned by PT Indonesia Royal Resources.

PT Kapuas Prima Citra itself is a lead smelter (Pb) which is planned for commissioning in the fourth quarter of 2019 and becomes the first lead smelter (Pb) in Indonesia.


Weekly News

Indonesian Mine Brings DCS into Current Era

October 23, 2019

It’s the end of more than one era for PT Freeport Indonesia (PTFI).The mining company, which produces concentrates containing copper, silver and gold, is transitioning from surface operations to move underground, even as it wraps up a methodical, 17-year modernization program for its automation and control systems.

“Our primary mine is the Grasberg surface mine in Papua, Indonesia,” explained Bendang Sameto, APC engineer at PTFI, in a presentation about the mine’s various upgrades at this week’s Schneider Electric Innovation Days in Austin, Texas. “It will be closed, and we will move our mines underground. The crater is so wide it’s not feasible to mine from the surface any more.”

This transition to a completely underground operation comes on the tail end of a control-system modernization that has already spanned nearly two decades. The operation includes crushers and equipment to transport the crushed ore to stockpiles. After crushing and grinding and converting to slurry, it’s then transported to a pipeline, which carries it to a dewatering plant portside, where it’s readied to be sent by ship. Throughput topped out in 2001 and again in 2009 at 238,000 tons per day on average.

During that span, the company embarked on a modernization program to bring legacy Foxboro DCS system components up to the current EcoStruxure Foxboro DCS standard. DCS workstations and software were modernized, and new enclosures added. The 12-node local area network (LAN) was upgraded to fiberoptic. Controls were upgraded from CP40A controllers to Field Control Processors 270 (FCP270) with Field Device Systems Integrator (FDSI) modules.

“We now have 800 Fieldbus Modules (FBMs) installed,” said Ade Jaya, control systems leader at PTFI. The Grasberg mine also includes 8,000 field wiring terminations, 950 control loops, about 6,000 calculation blocks and 730 operator graphic displays.

DCS modernization needed
The DCS upgrade objectives were to improve workstation reliability and maintainability, reduce or eliminate network-related problems and upgrade infrastructure to support new projects.

The first task was to evaluate and upgrade workstations in six different styles running various software versions. “Many workstations dated from the early 1990s,” said Jaya. “Spare workstations and components were no longer available for older workstations, which are not capable of running the current-system software, which fixes many bugs in the version we were running.”

Refurbished workstations were purchased and older ones were upgraded to a common standard with a system software upgrade, as well. Network issues such as missing terminators, improper grounding, dirty cabinets and damage from welding sparks were identified and corrected.

“We migrated from LAN to a mesh network, which can route around multiple faults,” said Jaya. Additional nodes were brought onto the mesh network, and the fiberoptic infrastructure was improved.

The older controllers and gateways were upgraded because of end-of-life issues and limited capabilities. “As I/O points increased and control loops became more complicated, some of these controllers had become overloaded,” said Jaya.

Schneider Electric’s current offering of controllers and workstations all require a mesh network, he added. “Establishing a good network design ensures total flexibility into the future,” said Jaya. For example, it has allowed PTFI to upgrade its FCP270 controllers to FCP280s—current state-of-the-art for the Schneider Electric EcoStruxure Foxboro DCS.


Weekly News

Freeport to Finish Grasberg Open Pit Mining by Year End

October 23, 2019

Diversified miner Freeport-McMoRan is expected to complete mining in the Grasberg open pit by the end of the year, while also ramping up production at its Deep Mine Level Zone (DMLZ) underground mine and Grasberg Block Cave (GBC) mine in Indonesia.

Arizona-based Freeport said copper ore extraction from the DMLZ underground mine, which is located east of the Grasberg ore body, averaged 9,900 t/d in the third quarter, up from 7,800 t/d in the second quarter. Production is expected to ramp up to 11,000 t/d by the end of the year and 28,000 t/d in 2020 before reaching full production of 80,000 t/d in 2022.

Freeport said it exceeded expectations at the DMLZ underground mine and the GBC underground mine in the third quarter. At the GBC underground mine, Freeport extracted 10,600 t/d of ore in the third quarter, up from 7,400 t/d of ore in the second quarter. Freeport expects to ramp up to 16,000 t/d by the end of the year, which is 1,000 t/d higher than the estimates given in the second quarter earnings. Production rates are expected to increase to 130,000 t/d over the next five years.

Freeport is mining the final stages of the Grasberg open pit as it transitions to the underground mines.

Freeport’s sales of copper from its Grasberg mine fell to 139mn lbs in the third quarter from 368mn lbs in the same quarter a year earlier.

In South America, Freeport reported sales of copper at 261mn lbs, down from 326mn lbs in the third quarter of 2019. In South America, Freeport has its 54pc-owned Cero Verde copper mine in Peru and 51pc-owned El Abra mine in Chile.

Freeport’s sales of copper from its North American mines rose to 395mn lbs from 350mn lbs a year earlier. The company operates seven mines in North America, five in Arizona, including the Morenci and Bagdad mines, and two in New Mexico.

Overall, Freeport reported a 14pc year over year decline in copper production to 864mn lbs in the quarter. Sales fell by 24pc to 795mn lbs.

Its average realized copper price fell to $2.62/lb in the latest quarter from $2.80/lb a year earlier. Unit cash costs rose to $1.59/lb from 93¢/lb.

Molybdenum sales were flat at 22mn lbs in the third quarter, with average realized price rising to $12.89/lb from $12.40/lb a year earlier.

Sales fell to $3.3bn in the third quarter from $4.9bn in the same year earlier period. Freeport reported a loss of $131mn in the third quarter after reporting a profit of $556mn in the same quarter of 2018.


Weekly News

Freeport-McMoRan CEO Says Low Copper Price "Not Sustainable" Amid Strong Demand

October 23, 2019

While trade tensions and sluggish global economic growth have weighed on the copper market, Freeport-McMoRan Inc. President and CEO Richard Adkerson said he expects strong demand to support prices.

“They’re simply not sustainable,” Adkerson said about decreased copper prices on an Oct. 23 earnings call, noting Wood Mackenzie estimates a US$3.30/lb copper price is needed to incentivize new production.

Adkerson pointed to low inventories of copper and increasing use of the metal in applications such as electric vehicles as signs that the copper market was in decent health. “Even with the economic effects we’re seeing, the demand for copper remains relatively strong throughout the world, in China and the U.S. and elsewhere,” he said.

In the third quarter, Freeport-McMoRan swung to a US$131 million net loss and fell short of consensus for adjusted EBITDA, according to Deutsche Bank analyst Chris Terry. Consensus was for US$617 million in adjusted EBITDA, he said in an Oct. 23 note, while Freeport-McMoRan reported US$564 million in adjusted EBITDA. Terry’s forecast was closer to the market at US$601 million.

At the giant Grasberg copper-gold mine in Indonesia, Freeport-McMoRan continued to transition from open-pit mining to underground operations during the quarter, where seismic issues in the Deep MLZ area has held back development. But with a new monitoring system to help predict and address issues, Adkerson said Freeport-McMoRan had largely put the problem behind it.

“We are now confident that based on our results … we have met the challenges of this rock situation,” he said.

Terry said in an interview with S&P Global Market Intelligence that Freeport-McMoRan had clearly made good progress in ramping up underground operations, helping decrease some of the risk associated with the transition. Still, he said it remains to be seen how the full ramp-up unfolds as Freeport-McMoRan moves to increase underground production from the mine over the next couple of years.

Terry also said he expects Freeport-McMoRan to post strong fourth-quarter production numbers.

On the earnings call, Adkerson also addressed the possibility of increasing shareholder distributions, which Freeport-McMoRan has put on hold in recent years as it pays down debt. While not pinning down a timeline, he said that, with an improving copper market, Freeport-McMoRan could focus more on shareholder distributions.

“Shareholders … have been patient,” he said. “They deserve to be rewarded for that.”

Freeport-McMoRan will consider both dividends and share buybacks, Adkerson said. He also reiterated, as in past quarters, that Freeport-McMoRan is looking at projects it already owns for potential growth rather than acquisitions.


Weekly News

Gulf Signs Manganese Ore Purchase & Supply Agreements

October 24, 2019

Gulf Manganese Corporation Limited (ASX: GMC) (“Gulf” or “the Company”) is pleased to advise that the Company’s Indonesian subsidiary PT Gulf Mangan Grup (“PT Gulf”) has signed an ore purchase agreement with Sulawesi-based PT Arfa Indo Sarana (“PT Arfa”) for supply of an initial 100 tonne parcel of high-grade (+49%) manganese ore. In addition, a Memorandum of Understanding (“MoU”) has also been executed between the two parties for the ongoing supply of high-grade manganese ore.

In terms of logistics, it is expected that the initial 100 tonne parcel will be transported to the port of Bau Bau in Sulawesi in November. The ore will then be shipped to the Port of Tenau in Kupang. Once the shipment has arrived in Kupang it will undergo a final quality analysis process before being cleared for export to Gulf’s customers.

The Company is also pleased to report that 17 IUP’s (Izin Usaha Pertambangan or permit to conduct a mining business) have been approved by the NTT ESDM (the Ministry of Energy and Mineral Resources in Kupang) and the Provincial Government thus allowing these miners to recommence manganese production. In line with Gulf’s broader ore procurement strategy, negotiations are already underway with a number of these NTT miners to secure further manganese ore supply partners.

In addition, Gulf notes and is encouraged by the support from the local authorities demonstrated by a recent media article which outlines ESDM’s support for the ongoing development of the Kupang Smelting Hub Facility.

Management Commentary

Gulf’s Managing Director, Hamish Bohannan, said:

“With the initial shipment of high-grade ore confirmed from Sulawesi we now have a clear line of sight on our first DSO export. This trial shipment will provide the Company with important feedback on supply chain logistics which will be crucial as we scale up our operations over the coming months.

“We are also pleased to see 17 IUP’s approved by the ESDM which paves the way for us to very quickly grow our high-grade ore supply pipeline through agreements with these local mining groups. Our incountry team is in active discussion with a number these miners and we look forward to reporting further updates as additional supply agreements are signed.”


Weekly News

Ore Miners in Indonesia Will Need to Optimise Land Use -Ministry

October 24, 2019

Ore mining companies operating in Indonesia will need to optimise their use of land given to them under planned new rules, a ministry official told Reuters.

“Exploration is needed to increase ore resources and reserves, which could lengthen the mine’s lifespan,” Yunus Saefulhak, director of minerals at the Energy and Mineral Resources Ministry, told Reuters in an interview.

Miners of Indonesia’s resources such as nickel, copper and bauxite often utilise only a small portion of their concession and sit on massive unexplored area, he said.

The government plans to create parameters to measure exploration activities.

These could include comparing the size of a concession with the area explored, he said.

The ministry might also compare how much mining companies spend on exploration and their revenue.

Saefulhak said international miners usually spend 1.6% of their revenue on exploration. He said the government has not decided how much miners operating in Indonesia should spend.

Asked about the environmental impact of pushing for more mining exploration, he said miners do not need to clear forest during exploration.

“Once they can prove the reserve and its economic feasibility, they can then apply for permits to clear the area,” he said. (Reporting by Wilda Asmarini, Bernadette Christina, Fransiska Nangoy; editing by Jason Neely)


Weekly News

UPDATE 1-Indonesia to Revise Domestic Nickel Ore Rule to Put Floor On Price

October 24, 2019

Indonesia’s mining ministry is revising a rule that governs the domestic price of nickel ore to ensure smelters follow government benchmark prices, a ministry official told Reuters.

The move comes after nickel miners complained to the government that domestic smelters were pushing down the price of ore, making prices very unattractive in the home market.

The government is aiming to have the revision issued by January 2020 when a ban on exports of nickel ore takes effect, Yunus Saefulhak, director of minerals at Energy and Mineral Resources, said in an interview late on Wednesday.

Indonesia aims to establish a fully integrated nickel industry onshore by processing the ore into metals and chemical used in batteries for electric vehicles (EVs) and building EVs locally, but policy changes have had ramifications for domestic and internerational nickel trading. .

The government’s planned revision to the rule will make the benchmark price the floor price which must be used for ores trade, said Saefulhak.

Indonesia’s ban of exports of unprocessed nickel was brought forward from the earlier schedule of January 2022 as part of the government’s push to develop and expand the onshore smelting industry.

“We already have benchmark prices, but they are not complied with,” Saefulhak. “We will make the wording firmer so there are no more below-normal prices,” he said.

The government wants to avoid problems that might arise from low ore price as miners tend to cut safety and environment management costs when prices are low, he added.

The nickel miners association (APNI) said that up to July this year, low grade nickel ore were priced at an average $15 per wet tonnes while the government ore benchmark price moved within the range of $25.4 per wet tonnes to $28.96 between January and July.


Weekly News

Adaro Energy: A Potential Turnaround Play On Recovery In Coal Prices

October 24, 2019


  • Adaro Energy is still delivering positive earnings growth in 1H2019 despite declining in coal prices, due to strong demand for thermal coal and its tight cost management.
  • The company’s diversification into coking coal and power plants help to buffer the company against volatility in the thermal coal market.
  • Key risks to watch out for include increasing capital expenditures and concession extension for its coal mining subsidiary Adaro Indonesia.
  • Adaro Energy trades at 8.2 times consensus forward FY2020 P/E and offers a forward FY2020 dividend yield of 4.9%.

Elevator Pitch

The share price Indonesia-listed coal mining company PT Adaro Energy Tbk (OTCPK:ADOOY) (OTC:PADEF) [ADRO:IJ] is now about half of its January 2018 peak, as the stock was sold down on declining coal prices.

Adaro Energy currently trades at 8.2 times consensus forward FY2020 P/E representing a discount to the stock’s historical five-year average forward P/E of approximately 9 times. The stock also offers a consensus forward FY2020 dividend yield of 4.9%. The company’s 1H2019 earnings have been stronger than expected thanks to the company’s tight cost management and strong demand for thermal coal. Going forward, Adaro Energy’s diversification into coking coal and power plants should help to buffer the company against volatility in the thermal coal market.

Adaro Energy is a potential investment candidate as a play on an eventual recovery in coal prices, as the second largest coal miner in the country with undemanding valuations. But investors need to watch out for risks relating to concession extension of its coal mining subsidiary Adaro Indonesia, and rising capital expenditures.

Company Description

Listed on the Indonesia Stock Exchange in July 2008, Adaro Energy is a vertically-integrated coal mining company with its mines primarily located in South Kalimantan. Its subsidiary, Adaro Indonesia, is the second largest coal miner in Indonesia with a 8.6% share of total coal production in the country in 2018, trailing only Kaltim Prima Coal, owned by Bumi Resources (OTCPK:PBMRF) (OTCPK:PBMRY) [BUMI:IJ], which has a 10.4% market share.

Adaro Energy derives more than 90% of its top line from coal mining and trading, with ancillary revenues from mining services and electricity generation. It has over 13.6 billion metric tons of coal resources (including options to acquire an additional 7.9 billion metric tons) and 1.2 billion metric tons of coal reserves across thermal and metallurgical coal.

Weathering The Storm

It has been a challenging one to two years for Adaro Energy, as its share price more than halved from its all-time share price peak of IDR2,600 as of January 30, 2018 to as low as IDR1,030 on August 16, 2019. Adaro Energy last closed at IDR1,355 on October 23, 2019. This has coincided with the decline in coal price from close to $120 per metric ton to approximately $70 per metric ton now.

Adaro Energy’s Share Price Chart Since January 2018

Source: Gurufocus

Historical Coal Price Since January 2018

Source: Trading Economics

Notwithstanding the challenging market environment, Adaro Energy delivered a strong set of results for 1H2019.

Adaro Energy’s EBITDA and core net income were up +17% YoY and +38% YoY at $691 million and $371 million respectively for 1H2019. This was driven by a +18% YoY increase in coal production to 28.47 million metric tons and a +22% YoY growth in sales volume to 28.77 million metric tons. Adaro Energy’s average selling price was also resilient, decreasing by only -9% YoY and -3% QoQ in 2Q2019 versus a double-digit decline in global coal prices.

The company’s cost management also stood out, as its coal cash costs per metric ton decreased -7% YoY to $28 per metric ton which it attributed to its sustained efforts on cost efficiency. Strip ratio was lower by -12% YoY at 4.48 times in 1H2019, as the increase in coal production exceeded overburden removal growth. Adaro Energy’s EBITDA margin of 38.9% for 1H2019 was also significantly higher than peers’ average in the 20-25% range.

Looking ahead, Adaro Energy’s 1H2019 EBITDA of $691 million implies that it should be able to meet its full-year FY2019 EBITDA target of $1.0-1.2 billion despite coal prices declining QoQ in 3Q2019 as per the coal price chart above. The company’s coal production target for FY2019 is 54-56 million metric tons, roughly double of what it produced in 1H2019. With respect to cost management, the company aims to achieve a cash cost of $30-32 per metric ton for the full-year versus $28 per metric ton in 1H2019. Adaro Energy is targeting a strip ratio of 4.56 times for FY2019 which is -10% lower YoY versus FY2018, and it achieved a strip ratio of 4.48 times for 1H2019.

It is impossible to predict future coal prices, but the general consensus is that coal prices should remain depressed due to a mix of factors, including global economic slowdown, increased domestic production of coal in China, higher level of coal stockpiles at China’s ports and power plants and favorable weather conditions (dry weather) leading to a higher production and supply of domestic coal in Indonesia.

Nevertheless, Adaro Energy’s earnings should be relatively resilient thanks to its cost management discussed above and strong industry demand for coal. Although low gas prices, increased thermal coal supply and government policies have depressed thermal coal prices in the near-term, long term demand for thermal coal is expected to remain steady at 1 billion metric tons with India and South-east Asia replacing China as the key growth drivers as per Wood Mackenzie’s forecasts below. As an example, India’s coal imports grew +17% YoY to 89 million metric tones in 1H2019, as domestic coal production could not meet demand from India’s power and industrial sectors. Going forward, increased electrification, cement manufacturing and liquid fuel production are expected to support coal demand in the developing markets.

Long Term Thermal Coal Demand

Source: Wood Mackenzie

Positive On Diversification Into Coking Coal And Power Plants

Adaro Energy has also diversified outside of its core thermal coal operations in recent years. In 2016, Adaro Energy acquired Adaro MetCoal Companies, which owns coking coal mines in Central and East Kalimantan, from BHP Group (BHP) for approximately $120 million.

More recently, Adaro Energy and private equity manager EMR Capital, via a 48%-52% joint venture, completed the acquisition of Rio Tinto’s (RIO) 80% stake in the Kestrel underground coal mine in Queensland, Australia for $2.25 billion in August 2018. The Kestrel mine produced 4.25 million metric tons of hard coking coal and 843,000 metric tons of thermal coal in 2017. The acquisition was significant for Adaro Energy, as it was one of its biggest investments outside its home market, Indonesia, and enabled the company to increase its exposure to coking coal or metallurgical coal.

The Kestrel mine produced and sold 3.45 million metric tons and 3.25 million metric tons of coking coal respectively in 1H2019. Kestrel’s hard coking coal was primarily sold to Asian customers in India, Japan, South Korea, Malaysia and Taiwan. The Kestrel mine’s 1H2019 sales volume was already two-thirds of FY2018’s sales volume of approximately 4.8 million metric tons, and the company expects 6.5-6.7 million metric tons of sales volume for FY2019.

The demand outlook for coking coal is arguably better than that of thermal coal as per the chart below, as coking coal is a major component of steel-making that cannot be substituted by other materials. Wood Mackenzie expects global seaborne demand for metallurgical coal to increase from 313 million metric tons in 2019 to 422 million metric tons in 2040 in line with steel demand.

Long Term Metallurgical Coal/Coking Coal Demand

Source: Wood Mackenzie

Adaro Energy recorded $60 million in income from joint ventures in 1H2019, which was approximately five times 1H2018’s joint venture income of $12 million. This was largely due to the recognition of earnings from the Kestrel mine for a full six months in 1H2019. The company targets for the Kestrel mine to contribute $80-90 million in earnings for full-year FY2019.

Power plants will be the next significant part of Adaro Energy’s diversification plans. Two new power plants are expected to start contributing earnings in 2020 and beyond. Adaro Energy has a 34% stake in PT Bhimasena Power Indonesia, a 2×1,000 MW coal-fired power plant in the Batang district of Central Java, which it is partnering with Japan’s Itochu Corporation (OTCPK:ITOCF) (OTCPK:ITOCY). The construction of PT Bhimasena Power Indonesia is 79% completed as of end-June 2019. The other new power plant is PT Tanjung Power Indonesia, a 2x100MW coal-fired power plant in the Tabalong regency, South Kalimantan, where Adaro Energy has a 65% stake and is partnering with PT East-West Power Indonesia, a subsidiary of South Korea’s Korea East-West Power Co Ltd. PT Tanjung Power Indonesia has completed construction and it is currently under commissioning.

Strong Balance Sheet Despite Increase In Capital Expenditures

Adaro Energy’s capital expenditures are expected to be between $450-600 million for FY2019, versus historical capital expenditures in the $150-200 million range between FY2014 and FY2017 and $400 million for FY2018. The increase in capital expenditures this year is primarily due to the construction of the thermal power plants discussed in the preceding section, and additional investments in Adaro MetCoal Companies, a company it acquired in 2016.

The higher capital expenditure is mitigated by two key factors. Firstly, Adaro Energy’s balance sheet remained strong as of end-1H2019. Its net debt-to-equity and net debt-to-trailing 12 months EBITDA were 0.09 times and 0.26 times respectively. Secondly, Adaro Energy’s current coal reserves can last for approximately 20 decades, so it can concentrate on its diversification efforts without being overly-concerned about replenishing its coal reserves.

Concession Extension Risk

Adaro Energy’s coal mining subsidiary, Adaro Indonesia, operates in Tanjung regency of South Kalimantan province under a Coal Cooperation Agreement with the Indonesia government. Prior to a new mining law introduced in 2009, mining operators in Indonesia operated on contractually-based concessions referred to as contracts of work or CoW and coal contracts of work or CCoW. After 2009, new mining operators ran their operations with mining business licenses also referred to as Izin Usaha Pertambangan Khusus or IUPK issued under the new regime. IUPKs were awarded following a competitive bidding process by the local or central government of Indonesia.

Adaro Indonesia’s current CCoW under the old regime will expire in October 2022, and there are concerns with the terms under which its current CCoW can be converted into an IUPK under the new regime. Key contractual terms that could be potentially changed include royalty rates and tax rates.


Adaro Energy trades at 7.9 times consensus forward FY2019 P/E and 8.2 times consensus forward FY2020 P/E based on its share price of IDR1,355 as of October 23, 2019. This represents a discount to the stock’s historical five-year average forward P/E of approximately 9 times.

The stock offers a trailing 6.6% dividend yield and a consensus forward FY2020 dividend yield of 4.9%.

Variant View

The key risk factors for Adaro Energy are higher-than-expected capital expenditures, lower-than-expected coal price, unexpected events that disrupt coal mining activities such as bad weather and any regulatory developments negatively impacting the Indonesian coal mining sector.


Weekly News

The Meaning of "We Explore" for Bukit Asam

October 24, 2019

MIND ID represents the new spirit of the Mining Industry Holding family. As a State-Owned Enterprise, Bukit Asam becomes a creator and development agent that has been given three mandates by the government, namely managing resources from Indonesia’s strategic coal and mineral reserves, building downstream mineral and coal industries, and becoming a world-class company.

MIND ID emphasizes Bukit Asam’s position as explorer of natural resources for civilization, prosperity and Indonesia’s brighter future.

Understanding the significance of “we explore”, means instilling a spirit of self and potential exploration into each individual, exuding a spirit of exploration to find new ways to do things better and more efficient, to inspire co-workers and to invite the best talents.

All MIND ID members must be willing to find new things and new ways in doing their operational activities to always grow and develop as representative of their industry. They must be relevant to any situation development, flexible and agile in looking for the best opportunities in the world industry development, with noble intentions to explore natural resources based on Good Mining Practices.


Weekly News

‘We were asked to help Pak Erick’: State Firm Heads To Be Named Deputy SOE Ministers

October 25, 2019

The heads of state-owned mining holding company Indonesia Asahan Aluminium (Inalum) and the largest state lender Bank Mandiri met with President Joko “Jokowi” Widodo on Friday to discuss plans to bring them on board as codeputy ministers in the State-Owned Enterprises (SOE) Ministry.

Inalum president director Budi Gunadi Sadikin and Bank Mandiri president director Kartika “Tiko” Wirjoatmodjo appeared at the Presidential Palace in Jakarta on Friday after President Jokowi invited deputy minister hopefuls to meet with him two days after he swore in the new Indonesia Onward Cabinet.

The two state firm heads were tasked with strengthening SOEs under the leadership of SOE Minister Erick Thohir, a media mogul and Jokowi’s former campaign team chairman.

Pak Tiko and I were asked [by Jokowi] to help Pak Erick,” said Budi, who is also a former Bank Mandiri president director, after meeting with the President.

“The point is, the President wants SOEs to be competitive, to be global players, to be bigger and to be able to build a solid economy together with the private sector,” said Tiko, who joined Bank Mandiri in 2003 as a strategy and financial analysis department head.

Jokowi also asked them to help elevate SOEs on the world stage, as well as to strengthen the competitiveness of Indonesian talent, added Tiko.

The President is scheduled to swear in the deputy minister hopefuls Friday afternoon.

Budi Gunadi and Tiko were both promoted to their positions as heads of the state firms by former SOE minister Rini Soemarno, whose final months in office were marred by controversies as she reshuffled state firm directors despite Jokowi’s request that his ministers not make any strategic decisions during the lame duck period.

The controversy peaked when Suprajarto, the president director of the most profitable state lender, Bank Rakyat Indonesia, was rotated to lead a smaller state housing lender Bank Tabungan Negara (BTN). Suprajarto said he was never consulted about the decision and declined the appointment.

Tiko and Budi Gunadi said on Friday they would resign shortly from their current positions to take up new roles in the Cabinet.

“I will resign today and there will be an extraordinary shareholders meeting in probably the next 40 days [to approve the resignation],” said Tiko. Bank Mandiri is publicly listed and, therefore, any change to its board of directors requires approval at a shareholders meeting.

“It should be easier for me [to resign] as my company is not publicly listed,” Budi Gunadi added.


Weekly News

Indonesian Coal Miners May be Impacted by Low Thermal Coal Prices

October 25, 2019

Bloomberg reported that the collapse in thermal coal prices this year has dealt a particularly heavy blow to miners in Indonesia, the top exporter and one of the largest producers of the fuel. Bharat Shettigar, head of Asia ex-China corporate credit research at Standard Chartered Plc, said “Among the Indonesia coal names, some are facing severe stress. “If prices stay depressed for the next 12 to 18 months, there could be restructuring of some US dollar bonds in the Indonesia coal sector.”

Prices of thermal coal have slumped about 33 per cent this year, and at least four US firms have gone bankrupt.


Weekly News

ANTAM Receives The 11th IICD CG Conference & Award for Best Non-Financial Sector and Top 50 Big Cap

October 23, 2019

PT Aneka Tambang Tbk (ANTAM; IDX: ANTM; ASX: ATM) announces The Company has received Best Non-Financial Sector and Top 50 The Biggest Market Capitalization Public Listed Companies categories at The 11th Indonesia Institute for Corporate Directorship (IICD) Corporate Governance Conference & Award 2019. The award was received by ANTAM’s Finance Director, Mr. Dimas Wikan Pramudhito on October 14, 2019 in Jakarta.

ANTAM’s Finance Director, Dimas Wikan Pramudhito said:

“ANTAM has a strong commitment on the implementation of Good Corporate Governance (GCG) principle on our business and operation to create an added value to our stakeholders as well as our shareholders. The award recognizes ANTAM to continue improving GCG practices, notably information disclosure and accountability to our  shareholder.”

The 11th Corporate Governance Conference & Award 2019 is an award of IICD to companies that have implemented the principles and practices of GCG using the Asean CG Scorecard OECD (The Organization for Economic Co-operation and Development) assessment method.

The Asean CG Scorecard instrument is a development of the OECD Principle on CG which includes: (1) shareholder rights; (2) equal treatment of shareholders; (3) the role of stakeholders; (4) disclosure and transparency; and (5) board responsibilities.


Weekly News

Bumi Resources Seeks Strategic Partner for Rp 22.4 Trillion Gasification Investment

PT Bumi Resources Tbk (BUMI) is seeking a strategic partner to develop coal downstreaming or gasification. The project requires investment funds of US$ 1.6 billion or Rp 22.4 trillion.

BUMI President Director Saptari Hoedaja said coal, being an affordable energy source, can be developed as a source of raw materials. The source can be processed as dimethyl ether (DME) and as a fuel mixture, which can reduce oil imports. In addition, gasification results can also be used for domestic and export needs.

“We’ve done a feasibility study and we’re currently seeking the appropriate technology. This requires around US$ 1.6 billion,” Mr Hoedaja told CNBC Indonesia, Friday (25/10).

In order to anticipate fluctuating coal prices, BUMI has also started diversifying its business to gold, copper, and zinc mining.


Weekly News

Antam Still Awaits Assurance Regarding Management of Two Nickel Blocks

October 23, 2019

PT Aneka Tambang Tbk (ANTM) or Antam is still awaiting assurance from the government regarding the management of nickel mines at North Bahadopi and Matadape Blocks, whose rights were won by the company last year.

According to Antam CEO Arie Prabowo Ariotedjo, the management of the two Special Mining Operation Permit Areas (WIUPK) is still awaiting an exploration Special Mining Operation Permit (IUPK) to be issued by the Ministry of Energy and Mineral Resources.

“It’s been a year and [the permit] is still not issued,” Mr Ariotedjo told, Monday (21/10).

Antam won the rights to manage the North Bahadopi and Matadape Blocks in August 2018. However, the company is still unable to officially manage the blocks due to alleged maladministration in the priority offering process identified by the Indonesian Ombudsman.


Weekly News

Coal Demand from China Is Estimated To Rise by 2% Next Year

China, the country with the largest coal consumption in the world, has balanced production to maintain fair prices on the global market. Analysts believe that the policy will keep coal prices at US$ 70 per ton.

Andy Wibowo Gunawan, an analyst at Mirae Asset Sekuritas, estimates that China’s coal production will rise by 8% in 2020 to 3.47 billion tons. Meanwhile, coal demand in China is projected to increase by 2% to 4.07 billion tons in 2020.

Gunawan explained that China had increased the capacity of thermal power plants by 51.5 million kWh. This investment accounts for 39.8% of China’s total new investment in power generation. “Indicating that coal demand from China will stay,” Gunawan said on Monday (21/10) today.

For the Indonesian market, Gunawan remains optimistic that the government will continue to encourage coal sales to fulfil domestic needs. The price of coal in the domestic market is also estimated to be in the range of US$ 70 per ton, assuming inflation in 2020 is stable at the level of 3.1%.


Weekly News

Even in Southeast Asia, Coal Is Losing Its Lustre—Only Indonesia Has Been Building New Plants in 2019

New coal plant development in Southeast Asia is down for the second year in a row, a new report from Global Energy Monitor has revealed. Could this herald the transition to clean energy for the world’s most climate-vulnerable region?

Southeast Asia is the only region in the world where coal has a growing share in the energy mix. But according to new data from San Francisco-based non-governmental organisation Global Energy Monitor (GEM) the signs are that the coal industry is on the wane, even here.

In the first six months of this year, only Indonesia, the world’s fifth biggest producer of the fossil fuel, started to build new coal-fired power plants.

This year is shaping up to be the second in succession in which the regional coal pipeline has narrowed, with 1,500 megawatts (MW) worth of coal power being built in the first half of 2019, after only 2,744 MW entered construction in 2018.

Southeast Asia is home to three of the world’s 10 largest coal power pipelines, but the low rate of new construction suggests that much of this capacity will not be realised, GEM concluded in its report, More fizz than boom.

Not only is the building of coal plants in decline in Southeast Asia, but the number of plants in the pre-construction stage also continues to fall, declining by 52 per cent between mid-2015 and mid-2019, according to GEM data.

With so few coal projects progressing from pre-construction to construction, if recent trends continue, the report’s authors believe that most of the 53,510 MW in pre-construction is more likely to be cancelled than be built.

Commenting on the data, Ted Nace, executive director of GEM, said that new construction is “the acid test of whether a proposed project is real or just some plans on paper”.

“To go into construction you have to get someone to commit hundreds of millions of dollars. In Southeast Asia, it looks like it’s becoming a difficult case to convince people to commit that kind of money,” he said.

Less enthusiasm for new coal in Southeast Asia is reflected in the reluctance of the region’s banks to fund new plants. In a significant 11 days for coal financing in May this year, all of Southeast Asia’s biggest three banks, Singapore’s OCBC, DBS and UOB, declared that they would stop coal funding after a period of sustained pressure from environmental groups.

Even so, DBS are still involved in a number of coal projects in the region, including the Vung Ang 2 power station in Vietnam. OCBC is the lender for the Nghi Son 2 and Van Phong 1 coal projects in Vietnam, but the bank has said that these will be the last coal projects that it funds. OCBC has confirmed that the bank is not involved in financing the Vung Ang 2 project.

The region’s banks have responded to a global shift away from coal financing, with more than 100 institutions worldwide helping to effect a 20 per cent drop in newly completed coal plants last year.

Though Indonesia stands out this year as Southeast Asia’s only big supporter of new coal, a fall in prices of the commodity prompted Indonesian president Joko Widodo to signal that the country may begin to move away from coal towards renewable energy.

“Coal power is facing something of a perfect storm,” said Christine Shearer, director of GEM’s coal programme. “Communities are rejecting it due to the high levels of pollution, renewable energy technology is undercutting it in terms of quality and cost, and financial institutions are backing away fast, making funding an increasing challenge for coal proponents.”

Burning coal for energy is the single biggest contributor to man-made greenhouse gas emissions, and yet use of the fossil fuel is predicted to double to make up 40 per cent of the energy mix in Southeast Asia—one of the world’s most climate-vulnerable regions—by 2040.


Weekly News

METALS-Nickel Firms as Plant Closure Amplifies Supply fears

Nickel touched a one-week high on Thursday after Papua New Guinea ordered the closure of a nickel processing plant over its failure to take remedial action after a slurry spill, intensifying supply concerns.

The plant owned by Metallurgical Corp of China (MCC) produced nickel hydroxide containing 16,429 tonnes of nickel and 1,497 tonnes of cobalt in the first half of 2019, according to MCC.

Benchmark nickel on the London Metal Exchange (LME)ended 1.6% higher at $16,860 a tonne, after touching its highest since Oct. 16.

“The shutdown at the plant comes at a time when people are potentially factoring in a supply shortfall in 2020 with the Indonesia ban coming into place,” said Capital Economics analyst Kieran Clancy.

Indonesia, the world’s top nickel ore supplier, said in September that it will stop ore exports in 2020, pushing forward a ban by two years and lifting prices.

NICKEL: Inventories of nickel in LME-registered warehouses fell 3,894 tonnes, or about 5%, to 79,800 tonnes, the lowest since January 2009. Total stocks have halved in the past month. MNISTX-TOTAL

The nickel cash to three-month spread remained in a contango after touching a premium of more than $200 a tonne this month as traders anticipated metal returning to the exchange. CMNI0-3

ING said nickel’s physical indicators – including stainless steel overhang and weak premiums – pointed to weak demand and “suggest a disconnect between the recent strength on the LME and the physical market, implying a correction or even crash is inevitable”.

FLOOR PRICE: Indonesia’s mining ministry is revising a rule that governs the domestic price of nickel ore to ensure smelters follow government benchmark prices, a ministry official told Reuters.

NICKEL BALANCE: Global demand for nickel is expected to increase to 2.52 million tonnes in 2020, with output rising to 2.48 million tonnes, the International Nickel Study Group said.

COPPER: Normal operations resumed at top copper producer Codelco after workers struck a deal with the government after staging a one-day strike in solidarity with a nationwide protest in Chile.

MINE BAN: The Philippines mining regulator has recommended lifting a three-year suspension of the environmental permit for what could be one of the world’s largest copper mines, the Tampakan project.

COPPER: Benchmark copper touched a one-month high but ended unchanged at $5,880 a tonne.

The copper market faces a possible 320,000 tonne deficit this year, reversing to a surplus of 281,000 tonnes in 2020, the International Copper Study Group said.

OTHER PRICES: LME aluminium edged down 0.3% to $1,724 a tonne, zinc gained 0.9% at $2,491, lead touched its highest since July 2018 but ended barely changed at $2,225, and tin was up 1.3% at $16,770.


Weekly News

Indonesia Opens Tender for Three Geothermal Prospects at Galunggung, Lainea and Wilis

The Ministry of Energy and Mineral Resources in Indonesia has opened a tender for three geothermal working areas in the country. The working areas for tender are Galunggung 55 MW, Lainea 20 MW, and Wilis 20 MW.

The Indonesian Ministry of Energy and Mineral Resources (MEMR) has announced concession tenders for three geothermal prospects (Galunggung 55 MW, Lainea 20 MW, and Wilis 20 MW),

The individual announcements:

  • Galunggung 55 MW (pdf) – probable reserve of 130 MWe with estimated reservoir temperature of 225 degrees Celsius
  • Linea 20 MW (pdf) – probable reserve of 66 MWe with estimated reservoir temperature of 200 degrees Celsius
  • Wilis 20 MW (pdf) – probable reserve of 50 MWE with estimated reservoir temperature of 200 degrees Celsius

The eligibility to participate in the tenders of these Geothermal Working Areas are business entities having experiences and scope of works in geothermal, oil and gas, mineral/coal mining, or electricity generation.

The business entities/consortium qualified to participate in the tender process must fill in the registration form and submit the administration requirements.


Mining People on The Move

PT Aneka Tambang Tbk - Fachrul Razi

ppointment Of Antam’s President Commissioner As Minister Of Religious Affairs Of The Republic Of Indonesia

PT Aneka Tambang Tbk (ANTAM; IDX: ANTM; ASX: ATM) hereby announces that ANTAM’s President Commissioners, Mr. Fachrul Razi, has recently been appointed as Minister of Religious Affairs of The Republic of Indonesia on October 23, 2019.

Following such appointment, Mr. Fachrul Razi no longer assumes his position as ANTAM’s President Commissioner since the date of his appointment as Minister of Religious Affairs of The Republic of Indonesia, in accordance with the provisions of ANTAM’s Articles of Association and compliance to the applicable regulations. The ANTAM’s Board of Commissioners and Directors would like to congratulate for a new appointment and thank Mr. Fachrul Razi for his dedication and best support to the Company during his tenure.

ANTAM published this release as part of public disclosure pursuant to the Indonesia Financial Services Authority Regulation No. 31/POJK.04/2015 on the Disclosure on Material Information or Facts by Issuers or Public Companies.


Mining People on The Move

BlackGold Natural Resources - Philip Cecil Rickard

BlackGold Natural Resources Chairman, Chief Executive Resigns

BLACKGOLD Natural Resources chairman and chief executive Philip Cecil Rickard is resigning in light of changes to the group’s business strategy and direction, it said on Wednesday.

Mr Rickard, 50, said he has chosen to spend time with his family, since BlackGold’s planned investment in a coal-fired power plant project in Riau, Indonesia failed to pan out. The company had announced it was pulling its plans for the project 11 months ago.

The firm was also entangled in an Indonesian power plant graft scandal last year.

Mr Rickard has helmed the company since March 2018, and will not seek re-election at the company’s upcoming annual general meeting (AGM) to be held on Oct 31.

Andreas Rinaldi, 69, has been appointed CEO-designate with effect from Wednesday. He will replace Mr Rickard as CEO after the upcoming AGM.

Philip Soh Sai Kiang will be re-designated from independent director to independent non-executive chairman of the board following the conclusion of the company’s AGM.


Mining People on The Move

Kingrose Mining Limited - Grant Mills

Non-executive Director Resigns

Kingsrose Mining (ASX: KRM, “Kingsrose” or “the Company”) announces that Grant Mills has submitted his resignation as a Director of the Company, effective as of 30 November 2019 and that the Company has accepted his resignation.

Mr Mills, who has been a Director of Kingsrose since August 2017, plans to focus on development of his various personal business interests.

Interim Chairman Dr Mike Andrews thanked Mr Mills for his dedication to the Company and his assistance in implementing the operational strategy.

“During his tenure on our Board Grant has fulfilled the role of non-executive director with great professionalism and diligence. On Behalf of the Board, I wish Grant all the best with his future business endeavours,” Dr Andrews said.

Kingsrose intend to appoint a new Director in due course.


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Publications regularly surveyed are: The Jakarta Post, Jakarta Globe, Bisnis Indonesia, Kontan, Coalspot and various online news services.

The information contained in this newsletter is intended to provide general information only. Opinions offered in any of the articles/releases contained in the newsletter are those of the individual making the representations and should not be considered to represent the opinion of Mitrais. Nothing in this newsletter is intended to provide legal advice or to be relied on as binding in any dispute, claim, action, demand or proceeding. The news articles/releases in the newsletter may also contain forward looking statements such as but not limited to statements concerning future operations of companies. All forward-looking statements may be subject to certain assumptions, a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ materially from those expressed or implied. Readers are cautioned that such statements are not guarantees of future performances and that actual performances and explorations and financial results may differ materially from any estimates or projections. Mitrais accepts no responsibility for the adequacy or accuracy of the information contained in this newsletter, nor the responsibility to update any person regarding any inaccuracy, omission or change in such information.

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