Daily News Update Page 1

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Until Quarter III-2020, Vale Production Volume Grows 10% Hingga Kuartal III-2020, Volume Produksi Vale Tumbuh 10% Reluctant to acquire PLTU Paiton, this is Adaro Energy's (ADRO) focus on the electricity business Enggan akuisisi PLTU Paiton, ini fokus Adaro Energy (ADRO) di bisnis kelistrikan BUMI Pays Loan Interest of US$ 3.8 Million BUMI Bayar Bunga Pinjaman US$ 3,8 Juta Indika Energy (INDY) Global Bond Emissions Equivalent of Rp 6.62 Trillion Indika Energy (INDY) Emisi Global Bond Setara Rp6,62 Triliun Overtaken by Morowali Industrial to be the largest nickel producer, this is Vale's (INCO) response Disalip Morowali Industrial jadi produsen nikel terbesar, ini tanggapan Vale (INCO) Coal has consistently rallied for 4 days in a row, apparently this country Batu Bara Konsisten Reli 4 Hari Beruntun, Ternyata Gegara Ini Brazilian miner Vale hints at fourth-quarter production boost Metso Outotec delivers ‘next evolution’ in high pressure grinding rolls with HRCe BHP posts 7% rise in iron ore output, flags production hit in Q2 China’s coal imports drop 38.3% in September as imports quota is used up Yancoal scales back spending to weather unpredictable coal storm

Investor Daily Kontan Neraca Bisnis Kontan CNBC Indonesia Mining Weekly Int’l Mining Mining.com Global Times Australian Mining

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Daily News Update Page 2

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Thermal, coking coal imports in 12 ports dip 25% to 55 MT in Apr-Sep: IPA

Business Standard

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Daily News Update Page 3

Until Quarter III-2020, Vale Production Volume Grows 10%

Gita Rossiana (gita.rossiana@investor.co.id)

PT VALE Indonesia Tbk (INCO) recorded a

10% increase in nickel production to 55,792 metric tons in the January to September 2020 period. With this production, the company is optimistic to realize i ts production target of 73 thousand metric tons by the end of 2020.

CEO and President Director of Vale Indonesia Nico Kanter said the production volume until September 2020 increased by about 10% from the realization until September 2019 of 50,531 metric tons.

"Especially in the third quarter of 2020, the production volume increased 4%, compared to the second quarter of 2020," he said in a written statement on Monday (19/10).

Despite the Covid-19 pandemic, according to Nico, the company can still record higher volumes. With this achievement, the company is optimistic about the realization of production of 73 thousand metric tons of nickel by the end of 2020.

Meanwhile, Vale Indonesia targets to meet all the requirements for the Pomalaa smelter project in Southeast Sulawesi and Bahodopi in Central Sulawesi in the first half of 2021. The company estimates that the investment for the two smelter projects is around US$ 4 billion.

Previously, Vale Indonesia Finance Director Bernandus Irmanto said, for the smelter project in Pomalaa, the company is in the process of completing a f inal investment decision (FDI) . Then, the company is also…

Hingga Kuartal III-2020, Volume Produksi Vale Tumbuh 10%

Gita Rossiana (gita.rossiana@investor.co.id)

PT VALE Indonesia Tbk (INCO) mencatat

peningkatan produksi nikel sebanyak 10% menjadi 55.792 metrik ton pada periode Januari hingga September 2020. Dengan produksi ini, perseroan optimistis merealisasikan target produksi sebanyak 73 ribu metrik ton hingga akhir 2020.

CEO dan Presiden Direktur Vale Indonesia Nico Kanter mengatakan, volume produksi hingga September 2020 ini meningkat sekitar 10% dari realisasi hingga Septem-ber 2019 sebanyak 50.531 metrik ton.

"Khusus pada kuartal III-2020, volume produksi meningkat 4%, dibandingkan kuartal II-2020," kata dia dalam kete-rangan tertulis pada Senin, (19/10).

Kendati pandemi Covid-19, menurut Nico, perseroan masih bisa membukukan volume yang lebih tinggi. Dengan pen-capaian ini, perseroan optimistis terhadap realisasi produksi sebanyak 73 ribu metrik ton nikel pada akhir 2020.

Sementara itu, Vale Indonesia menarget-kan bisa memenuhi semua persyaratan untuk proyek smelter Pomalaa di Sulawesi Tenggara dan Bahodopi di Sulawesi Tengah pada semester I-2021. Perseroan memperkirakan investasi untuk kedua proyek smelter tersebut sekitar US$ 4 miliar.

Sebelumnya, Direktur Keuangan Vale Indonesia Bernandus Irmanto mengatakan, pada proyek smelter di Pomalaa, perseroan dalam proses menyelesaikan final investment decision (FDI). Kemudian, perseroan juga…

Daily News Update Page 4

Then, the company is also in the middle of equating views and meeting the require-

ments of strategic partners involved in the Pomalaa project.

So far, according to Irmanto, the company

has not experienced significant obstacles in fulfilling the requirements and obtaining

permits. The government, especially from the Investment Coordinating Board

(BKPM), is considered very helpful in the process of fulfilling these requirements.

In the smelter project in Pomalaa, the

company is collaborating with Sumitomo Metal Mining. Bernadus estimates that the

smelter project in the Southeast Sulawesi region will use around US$ 2.5 billion in

funds.

Meanwhile, in the smelter project in

Bahodopi, he continued, the company is still preparing the requirements for a final

investment decision and arranging permits. The company hopes to complete

all requirements and permits in the first semester of next year. The company will

partner with investors from China in the smelter. Both parties are bound by the

confidentiality agreement previously agreed upon. The investment value is

around US$ 1.5 billion.

While preparing for new smelter expansion, the company is now focusing on

operating a smelter factory in Sorowako, South Sulawesi. The company is in a study

to increase its production capacity in Sorowako to 90 thousand tons. "We hope

to reach production of 90 thousand tons before 2025 or before applying for a

business license extension," he explained.

Editor: Parluhutan (parluhutan@investor.co.id)

Kemudian, perseroan juga tengah menyamakan pandangan dan memenuhi

persyaratan dari mitra strategis yang terlibat dalam proyek Pomalaa.

Sejauh ini, menurut Irmanto, perseroan

tidak mengalami kendala berarti dalam memenuhi persyaratan dan juga mem-

peroleh perizinan. Pemerintah, terutama dari pihak Badan Koordinasi Penanaman

Modal (BKPM) dinilai sangat membantu proses pemenuhan persyaratan tersebut.

Pada proyek smelter di Pomalaa,

perseroan menggandeng Sumitomo Metal Mining. Bernadus memperkirakan proyek

smelter di kawasan Sulawesi Tenggara ini akan menggunakan dana sekitar US$ 2,5

miliar.

Sedangkan pada proyek smelter di

Bahodopi, lanjut dia, perseroan masih mempersiapkan persyaratan untuk

keputusan final investasi dan mengurus perizinan. Perseroan berharap bisa

menyelesaikan semua persyaratan dan perizinan pada semester satu tahun depan.

Perseroan akan menggandeng investor dari Tiongkok pada smelter tesebut. Kedua

belah pihak terikat confidentiality agree-ment yang disepakati sebelumnya. Nilai

investasi sekitar US$ 1,5 miliar.

Sambil mempersiapkan ekspansi smelter baru, perseroan kini fokus mengoperasi-kan pabrik smelter di Sorowako, Sulawesi Selatan. Perseroan dalam studi untuk meningkatkan kapasitas produksi di Sorowako menjadi 90 ribu ton. “Kami berharap bisa mencapai produksi 90 ribu ton sebelum 2025 atau sebelum meng-ajukan perpanjangan izin usaha,” terang dia. Editor : Parluhutan (parluhutan@investor.

co.id)

Daily News Update Page 5

Reluctant to acquire PLTU Paiton, this is Adaro Energy's (ADRO) focus on the electricity

business Reporter: Dimas Andi | Editor: Anna Suci

Perwitasari

PT ADARO Energy Tbk (ADRO) has

confirmed that it has no plans to acquire the Paiton Steam Power Plant (PLTU). This coal producer has also chosen to focus on completing the existing PLTU project as well as developing the power plant business independently in the future.

Currently, ADRO is working on the Bhimasena Power Indonesia (BPI) PLTU project in Batang, Central Java. Citing the company's performance report, until the end of June 2020, the PLTU project with a capacity of 2x1,000 megawatts (MW) has made 94% progress.

However, the impact of the Covid-19 pandemic has made the commercial operation date (COD) of the first unit of PLTU BPI postponed and the completion of power plant construction may also be delayed. "Evaluations are underway to minimize these delays," wrote ADRO management.

Although he cannot disclose the certainty of operational time, the President Director of Adaro Power & Adaro Water Wito Krisnahadi is confident that the BPI PLTU will make a long-term positive contribution to ADRO's performance, a member of the Kompas100 index.

The BPI PLTU project itself has an investment value of US$ 4.2 billion, which financial close was reached in June 2016. BPI will provide…

Enggan akuisisi PLTU Paiton, ini fokus Adaro Energy (ADRO) di

bisnis kelistrikan Reporter: Dimas Andi | Editor: Anna Suci

Perwitasari

PT ADARO Energy Tbk ( ADRO) telah

menegaskan tidak memiliki rencana untuk akuisisi Pembangkit Listrik Tenaga Uap (PLTU) Paiton. Produsen batubara ini pun memilih fokus menyelesaikan proyek PLTU yang ada sekaligus mengembangkan bisnis pembangkit secara mandiri di masa mendatang.

Saat ini, ADRO tengah menggarap proyek PLTU Bhimasena Power Indonesia (BPI) yang berada di Batang, Jawa Tengah. Mengutip laporan kinerja perusahaan, hingga akhir Juni 2020, proyek PLTU berkapasitas 2x1.000 megawatt (MW) tersebut telah mencapai kemajuan 94%.

Namun, imbas pandemi Covid-19 membuat commercial operation date (COD) unit pertama PLTU BPI ditunda dan penye-lesaian konstruksi pembangkit kemung-kinan juga tertunda. “Evaluasi sedang dilakukan untuk meminimalkan penun-daan ini,” tulis manajemen ADRO.

Meski belum bisa membeberkan kepastian waktu operasional, Presiden Direktur Adaro Power & Adaro Water Wito Krisnahadi yakin PLTU BPI akan mem-berikan kontribusi positif secara jangka panjang bagi kinerja ADRO, anggota indeks Kompas100 ini.

Proyek PLTU BPI sendiri memiliki nilai investasi sebesar US$ 4,2 miliar yang mana financial close tercapai pada Juni 2016 lalu. BPI akan menyediakan…

Daily News Update Page 6

BPI will provide electricity to PT Perusahaan Listrik Negara (Persero) for 25 years.

Apart from the BPI PLTU project, ADRO already has several other PLTUs. One of them is PLTU Makmur Sejahtera Wisesa which is located in Tabalong, South Kalimantan with a capacity of 2x30 MW. As of semester I-2020, PLTU MSW achieved an actual availability factor of 92.4% or higher than the target set at 91.8%.

ADRO has also operated PLTU Tanjung Power Indonesia (TPI) which is also located in Tabalong with a capacity of 2x100 MW. In the first semester of 2020, this PLTU reached the availability factor level of 98.1%, aka exceeding the target of 85.3%.

Wito said, going forward, ADRO will continue to strive to develop its business in the electricity sector, including in order to support the government for the develop-ment of renewable energy-based power plants.

"Several EBT projects are still being studied and have been carried out in stages for internal needs," he said , Monday (19/10).

Referring to ADRO's performance report, currently Adaro Power is developing a power plant project with a utilization capacity for other Adaro Group business units such as the Indonesia Bulk Terminal (IBT) and Adaro Metcoal Companies (AMC).

Wito explained, ADRO always develops power plants that are best suited to the situation in the field, both from the availability of primary energy, the energy profile required, to environmental aspects.

"In that context, we are developing several renewable energy generation projects such as hydro, biomass and solar panels," he explained.

BPI akan menyediakan listrik kepada PT Perusahaan Listrik Negara (Persero) selama 25 tahun.

Selain proyek PLTU BPI, ADRO telah memiliki beberapa PLTU lainnya. Salah satunya PLTU Makmur Sejahtera Wisesa yang berlokasi di Tabalong, Kalimantan Selatan dengan kapasitas 2x30 MW. Per semester I-2020, PLTU MSW mencapai faktor ketersediaan actual sebesar 92,4% atau lebih tinggi dari target yang ditetapkan sebesar 91,8%.

ADRO juga telah mengoperasikan PLTU Tanjung Power Indonesia (TPI) yang juga berlokasi di Tabalong dengan kapasitas 2x100 MW. Pada semester I-2020, PLTU ini mencapai level faktor ketersediaan sebesar 98,1% alias melampaui target sebesar 85,3%.

Wito menyampaikan, ke depannya, ADRO akan terus berupaya mengembangkan bisnis-nya di sektor ketenagalistrikan, termasuk dalam rangka mendukung pemerintah untuk pengembangan pembangkit berbasis energi baru terbarukan.

“Beberapa proyek EBT masih dikaji dan sudah dilakukan secara bertahap untuk kebutuhan internal,” ujar dia, Senin (19/10).

Merujuk laporan kinerja ADRO, saat ini Adaro Power sedang mengembangkan proyek proyek pembangkit listrik dengan kapasitas penggunaan bagi unit bisnis Grup Adaro lainnya seperti Indonesia Bulk Terminal (IBT) dan Adaro Metcoal Companies (AMC).

Wito menjelaskan, ADRO selalu mengem-bangkan pembangkit listrik yang paling cocok dengan situasi di lapangan, baik dari ketersediaan energi primer, profil energi yang dibutuhkan, hingga aspek-aspek lingkungan.

“Dalam rangka itu, kami mengembangkan beberapa proyek pembangkitan berbasis EBT seperti hidro, biomassa, dan panel surya,” terangnya.

Daily News Update Page 7

Regarding EBT, ADRO through Adaro Power has a plan to increase the capacity of solar panels at the Kelanis Coal Special Terminal which is currently in the technical study phase and finalizing the EPC contract. Through this expansion, the capacity of solar panels there will increase from 130 kWp to 597 kWp.

Wito added, ADRO is also developing EBT for captive power. Later, the power plant owned by this coal company will reach areas where electricity is not yet available by PLN or areas that do not have alternative power plants other than diesel powered generators.

Terkait EBT, ADRO melalui Adaro Power memiliki rencana untuk meningkatkan kapasitas panel surya di Terminal Khusus Batubara Kelanis yang sedang dalam fase studi teknis dan finalisasi kontrak EPC. Lewat ekspansi ini, kapasitas panel surya di sana akan meningkat dari 130 kWp menjadi 597 kWp.

Wito menambahkan, ADRO juga melaku-kan pengembangan EBT untuk captive power. Nantinya, pembangkit milik per-usahaan batubara ini akan menjangkau area yang belum tersedia listrik oleh PLN atau area yang tidak memiliki alternatif pembangkit listrik di luar pembangkit bertenaga diesel.

BUMI Pays Loan Interest of US$3.8 Million By: Ahmad Nabhani

COMMITTED to continue to cut debt, PT

Bumi Resources Tbk (BUMI) made an interest payment on the eleventh tranche A

loan worth US$ 3.8 million. With this payment, Bumi Resources has paid a total

loan of US$ 331.6 million. This information was conveyed by the company in a press

release in Jakarta yesterday.

Bumi Resources Director and Corporate Secretary, Dileep Srivastava, said that the

total payment of US$ 331.6 million consists of principal tranche A worth US$ 195.8

million and interest of US$ 135.8 million. "Payment of interest includes accrued

interest and unpaid interest (back interest)," he said.

The next payment for tranche A will be due in January 2021. Dileep revealed,…

BUMI Bayar Bunga Pinjaman US$3,8 Juta

Oleh: Ahmad Nabhani

BERKOMITMEN untuk terus pangkas utang, PT Bumi Resources Tbk (BUMI) melakukan pembayaran bunga pinjaman tranche A yang kesebelas senilai US$ 3,8 juta. Dengan pembayaran ini , Bumi Resources sudah membayar total pinjaman sebesar US$ 331,6 juta. Informasi tersebut disampaikan perseroan dalam siaran persnya di Jakarta, kemarin.

Kata Direktur dan Sekretaris Perusahaan Bumi Resources, Dileep Srivastava, total pembayaran senilai US$ 331,6 juta terdiri atas pokok tranche A senilai US$ 195,8 juta dan bunga sebesar US$ 135,8 juta. "Pembayaran bunga termasuk bunga akrual dan bunga yang belum dibayar (back interest)," ujarnya.

Adapun pembayaran berikutnya untuk tranche A akan jatuh tempo pada Januari 2021. Dileep mengungkapkan,…

Daily News Update Page 8

Dileep revealed, for PIK coupons from 11 April 2018 to 16 October 2020 for tranche B and tranche C are also starting to be capitalized. Meanwhile, until the first semester of 2020, Bumi Resources recorded coal sales of 41.2 million tons. This sales is relatively stable compared to the same period last year. Meanwhile, the company's production reached 41 million tons, up 5 percent from the previous 39.1 million tons.

Dileep said that Bumi Resources coal sales consisted of sales from its subsidiary, PT Kaltim Prima Coal (KPC) amounting to 29.5 million tons and PT Arutmin Indonesia amounting to 11.6 million tons. However, the realization of the lower average coal price has eroded Bumi Resources' profit and income. The realization of the coal sales price as of June 2020 reached US$ 46.9 per ton, 12% lower than the same period last year at US$ 53.2 per ton.

Dileep mengungkapkan, untuk kupon PIK dari 11 April 2018 hingga 16 Oktober 2020 untuk tranche B dan tranche C juga mulai dikapitalisasi. Sementara, hingga semester I-2020, Bumi Resources mencatat pen-jualan batu bara sebanyak 41,2 juta ton. Penjualan ini relatif stabil dibandingkan periode sama tahun lalu. Sedangkan produksi perseroan mencapai 41 juta ton, naik 5% dari sebelumnya 39,1 juta ton.

Disampaikan Dileep, penjualan batu bara Bumi Resources terdiri atas penjualan dari anak usahanya, PT Kaltim Prima Coal (KPC) sebesar 29,5 juta ton dan PT Arutmin Indonesia sebesar 11,6 juta ton. Namun, realisasi rata-rata harga batu bara yang lebih rendah menggerus keuntungan dan pendapatan Bumi Resources. Realisasi harga penjualan batu bara hingga Juni 2020 mencapai US$ 46,9 per ton, lebih rendah 12% dibandingkan periode sama tahun lalu US$ 53,2 per ton.

Indika Energy (INDY) Global Bond Emissions Equivalent of

Rp6.62 Trillion Finna U. Ulfah

THE COAL mining company, PT Indika

Energy Tbk., issued foreign currency bonds with a value of up to US$ 450 million or equivalent to Rp.6.62 trillion at the Jisdor exchange rate on Tuesday (20/10/2020) of Rp14,729 per US dollar.

Citing the company's disclosure on the official website of the Indonesia Stock Exchange (IDX), the issuer coded as INDY securities issued global debt securities worth US$ 450 million with a coupon of 8.25 percent which will mature in 2025.

Indika Energy (INDY) Emisi Global Bond Setara Rp6,62

Triliun Finna U. Ulfah

EMITEN pertambangan batu bara, PT

Indika Energy Tbk., menerbitkan obligasi valas dengan nilai mencapai US$450 juta atau setara Rp6,62 triliun dengan kurs Jisdor Selasa (20/10/2020) Rp14.729 per dolar AS.

Mengutip keterbukaan informasi perseroan di laman resmi Bursa Efek Indonesia (BEI), emiten berkode efek INDY itu menerbitkan surat utang global senilai US$450 juta dengan kupon 8,25 persen yang akan jatuh tempo pada 2025.

Daily News Update Page 9

The company, through its subsidiary, PT Indika Energy Capital IV Pte Ltd., will list the bonds on Singapore Exchange Securities Trading Limited.

Meanwhile, the company together with other business entities such as PT Indika Inti Corpindo (IIC) , PT Tripatra Engineering (TPE), PT Tripatra Multi Energi (TIME), PT Tripatra Engineers and Constructors (TPEC), and Tripatra (Singapore) Pte. Ltd. (TRIS) will act as guarantor for the bonds.

The management of Indika Energy explained that the proceeds from the bond issuance will be used for repayment (refinancing) of maturing debts and investing in the company's non -coal business.

In more detail, the issuance is to refinance the US$ 265 million bond that will mature in 2022 with a 6.25 percent coupon issued by Indika Energy Capital II Pte. Ltd., and refinancing a portion of the US$ 500 million outstanding bond due in 2023 worth US$ 285 million with a 6.375 percent tenor issued by Indo Energy Finance II B.V.

"In addition, it is also used to fund the company's plan to expand its non-coal business activities," wrote Indika Energy Management, Tuesday (20/10/2020).

On the other hand, the company has successfully held a roadshow and pricing process for the issuance of these bonds and has signed a Purchase Agreement on 15 October 2020.

The purchase agreement was entered into by Indika Energy Capital IV as the issuer, company and other bond underwriters, Standard Chartered Bank (Singapore) Limited, Mandiri Securities Pte. Ltd. and Deutsche Bank AG, Singapore branch as joint bookrunners, and initial buyers.

Perseroan melalui entitas anak usaha PT Indika Energy Capital IV Pte Ltd., akan mencatatkan surat utang itu di Singapore Exchange Securities Trading Limited.

Adapun, perseroan bersama dengan entitas usaha lainnya seperti PT Indika Inti Corpindo (IIC), PT Tripatra Engineering (TPE), PT Tripatra Multi Energi (TIME), PT Tripatra Engineers and Constructors (TPEC), dan Tripatra (Singapore) Pte. Ltd. (TRIS) akan bertindak sebagai penjamin obligasi itu.

Manajemen Indika Energy menjelaskan bahwa dana hasil emisi obligasi itu akan digunakan untuk pembayaran kembali (refinancing) utang yang akan jatuh tempo dan investasi di bisnis non batu bara perseroan.

Lebih rinci, emisi itu untuk merefinancing obligasi US$265 juta yang akan jatuh tempo pada 2022 dengan kupon 6,25 persen yang diterbitkan Indika Energy Capital II Pte. Ltd., dan refinancing sebagian dari jumlah terutang obligasi US$500 juta yang akan jatuh tempo pada 2023 senilai US$285 juta bertenor 6,375 persen yang diterbitkan oleh Indo Energy Finance II B.V.

“Selain itu, juga untuk pendanaan rencana perseroan untuk melakukan ekspansi kegiatan usaha non-batu bara,” tulis Mana-jemen Indika Energy, Selasa (20/10/2020).

Di sisi lain, perseroan telah sukses meng-gelar proses roadshow dan penentuan harga (pricing) untuk penerbitan surat utang itu dan telah menandatangani Perjanjian Pembelian (Purchase Agreement) pada 15 Oktober 2020.

Perjanjian pembelian tersebut dilakukan oleh Indika Energy Capital IV sebagai penerbit, perseroan beserta penjamin obligasi lainnya, Standard Chartered Bank (Singapore) Limited, Mandiri Securities Pte. Ltd. dan Deutsche Bank AG, cabang Singapura sebagai joint bookrunners, dan para pembeli awal.

Daily News Update Page 10

"With the completion of the roadshow and pricing process, Issuers, Guarantor and

Early Buyers have signed a Purchase Agreement on October 15, 2020," wrote

Indika Energy Management. Editor: Aprianto

Cahyo Nugroho

“Dengan telah diselesaikannya proses roadshow dan pricing, Penerbit, Para Penjamin dan Para Pembeli Awal telah menandatangani Perjanjian Pembelian (Purchase Agreement) pada tanggal 15 Oktober 2020,” tulis Manajemen Indika Energy. Editor : Aprianto Cahyo Nugroho

Overtaken by Morowali

Industrial to be the largest nickel producer, this is Vale's

(INCO) response Reporter: Ridwan Nanda Mulyana | Editor:

Anna Suci Perwitasari

THE MAP of the national nickel industry is

shifting rapidly. In just 4 years, Indonesia Morowali Industrial Park (IMIP) was able to overtake PT Vale Indonesia Tbk (INCO) in controlling nickel products in Indonesia.

INCO's management also opened their voices regarding this condition. INCO Chief Financial Officer Bernardus Irmanto admitted that in volume terms, the nickel derivative products produced by INCO were overtaken by IMIP. With a new business model, IMIP is very aggressive in developing its business.

"Almost every 12 months-18 months they add new production lines. If we look at the production volume, indeed IMIP's nickel pig iron (NPI) production currently exceeds PT Vale's Nickel Matte produc-tion," said Bernardus to Kontan.co.id, Monday (19/10).

According to him, the control of nickel production should not only be seen in terms of volume. But it must also be seen from the types of products produced,…

Disalip Morowali Industrial jadi

produsen nikel terbesar, ini tanggapan Vale (INCO)

Reporter: Ridwan Nanda Mulyana | Editor: Anna Suci Perwitasari

PETA industri nikel nasional bergeser

dengan cepat. Dalam kurun waktu 4 tahun saja, Indonesia Morowali Industrial Park (IMIP) mampu menyalip posisi PT Vale Indonesia Tbk (INCO) dalam penguasaan produk nikel di Indonesia.

Manajemen INCO pun buka suara terkait dengan kondisi tersebut. Chief Financial Officer INCO Bernardus Irmanto mengakui, secara volume, produk turunan nikel yang diproduksi INCO memang tersalip oleh IMIP. Dengan model bisnis baru, IMIP sangat agresif dalam pengembangan bisnisnya.

"Hampir setiap 12 bulan-18 bulan mereka menambah line produksi baru. Kalau kita lihat dari volume produksi, memang produksi nickel pig iron (NPI) IMIP saat ini jauh melebihi produksi Nickel Matte PT Vale," kata Bernardus kepada Kontan.co.id, Senin (19/10).

Menurut dia, penguasaan produksi nikel selayaknya tidak hanya dilihat dari sisi volume. Melainkan harus juga dilihat dari jenis produk yang dihasilkan,…

Daily News Update Page 11

But it must also be seen from the types of products produced, as well as the down-stream industry uptake and growth prospects for these types of products. Meanwhile, INCO's average production in the last five years is around 76,000 tons.

"NPI will currently be absorbed by stainless steel producers, which is the focus of several companies that build smelters at IMIP. Meanwhile, nickel matte has more optionality, can be further processed and absorbed by various industries," explained Bernardus.

Referring to the data presented by the Special Staff of the Minister of EMR for Mineral and Coal Management Irwandy Arif, in 2014, Vale stil l controlled nickel production with a share of 77%. Followed by Antam with 19% and other companies with 3%.

However, the map of the downstream nickel industry to the intermediate product has changed drastically. In 2018, IMIP already controlled 50% of downstream nickel production in Indonesia.

Vale's portion also decreased to 22% and Antam's only 5%. The state-owned nickel company has even been overtaken by Virtue Dragon which holds a nickel production portion of 11%, Harita Group 6% and other companies as much as 6%.

"What will happen in 2023, surely the composition will change drastically again. This is an extraordinary development," said Irwandy in a webinar on the use of nickel which was held on Tuesday (13/10).

According to Irwandy, the downstream nickel industry is increasingly competitive and is still promising, both for the develop-ment of the stainless steel-based industry and for the battery industry. Unfortunately, until now all products produced by smelters in Indonesia are still in intermediate products or semi-finished products.

Melainkan harus juga dilihat dari jenis produk yang dihasilkan, serta serapan dan prospek pertumbuhan industri hilir untuk jenis produk tersebut. Adapun, rata-rata produksi INCO dalam lima tahun terakhir ialah sekitar 76.000 ton.

"NPI saat ini semuanya akan diserap oleh produsen baja nirkarat, yang merupakan fokus dari beberapa perusahaan yang membangun smelters di IMIP. Sedangkan nickel matte lebih memiliki optionality, bisa diproses lanjut dan diserap oleh berbagai industri," terang Bernardus.

Merujuk pada data yang dipaparkan Staf Khusus Menteri ESDM Bidang Tata Kelola Mineral dan Batubara Irwandy Arif, pada tahun 2014, produksi nikel masih dikuasai oleh Vale dengan porsi 77%. Disusul Antam dengan 19% dan perusahaan lain-nya sebanyak 3%.

Namun, peta industri hilir nikel hingga produk setengah jadi ( intermediate product) itu telah berubah dengan drastis. Pada 2018, IMIP sudah menguasai 50% dari produksi hilir nikel di Indonesia.

Porsi Vale pun susut jadi 22% dan Antam hanya 5% saja. Perusahaan nikel BUMN itu bahkan sudah tersalip oleh Virtue Dragon yang memegang porsi produksi nikel sebesar 11%, Harita Group 6% dan per-usahaan lainnya sebanyak 6%.

"Apa yang terjadi pada 2023, pasti kompo-sisinya akan berubah drastis lagi. Luar biasa perkembangannya," ungkap Irwandy dalam webinar tentang pemanfaatan nikel yang digelar Selasa (13/10).

Menurut Irwandy, industri hilir nikel semakin kompetitif dan masih menjanji-kan, baik untuk pengembangan industri berbasis stainless steel maupun untuk industri baterai . Sayangnya, hingga sekarang seluruh produk yang dihasilkan smelter di Indonesia masih dalam inter-mediate product atau produk setengah jadi.

Daily News Update Page 12

Overall, more than 90% of Indonesian smelter products are still NPI-based products. "The development of smelter production is quite significant, but 99%, or all of them 100% are still intermediate products. 90% more are NPI products," said Irwandy.

Based on the type of purity , nickel produced in Indonesia is still dominated by second-class nickel which produces NPI or FerroNel. Meanwhile, the first class nickel portion to produce nickel matte and Mixed Hydroxide Precipitate (MHP) is still small.

Currently, global nickel demand is still dominated by the stainless steel industry at 71%. Meanwhile, other industrial needs are still small, such as the battery which is 3%.

However, smelter construction in Indonesia has begun to vary. Irwandy revealed that at least six companies are planning to build a nickel smelter with High Pressure Acid Leaching (HPAL). Of the six HPAL smelters, five of them are targeted to operate in 2021.

The six companies building the HPAL smelter are PT Halmahera Persada Lygend, PT Adhikara Cipta Mulia, PT Smelter Nickel Indonesia, PT Huayue, PT QMB and PT Vale Indonesia.

Not to mention, the MIND ID mining holding plan is to build an HPAL smelter that is integrated with the battery industry for electric vehicles (EV) and storage of electrical energy (storage) . MIND ID through Antam, together with PT Pertamina (Persero) and PT PLN (Persero) are planning to build two integrated battery factories.

In line with Irwandy, Bernardus is also optimistic that the nickel market will continue to grow. Although the stainless steel industry still dominates,…

Secara keseluruhan, lebih dari 90% produk smelter Indonesia masih berupa produk berbasis NPI. "Perkembangan produksi smelter cukup signifikan, tetapi 99%, atau semuanya 100% masih intermediate produk. 90% lebih adalah produk NPI," ujar Irwandy.

Berdasarkan jenis kemurniannya, nikel yang produksi di Indonesia juga masih didomi-nasi oleh nikel kelas dua yang menghasilkan NPI atau FeroNikel. Sedangkan porsi nikel kelas satu untuk menghasilkan nikel matte dan Mixed Hydroxide Precipitate (MHP) masih mini.

Saat ini, kebutuhan nikel global juga masih didominasi untuk industri stainless steel sebesar 71%. Sedangkan untuk kebutuhan industri lainnya masih mini, seperti baterai yang sebesar 3%.

Namun, pembangunan smelter di Indonesia sudah mulai beragam. Irwandy mengung-kapkan, paling tidak sudah ada enam perusahaan yang berencana membangun smelter nikel dengan High Pressure Acid Leaching (HPAL). Dari keenam smelter HPAL itu, lima diantaranya ditargetkan bisa beroperasi pada tahun 2021 mendatang.

Keenam perusahaan yang membangun smelter HPAL itu adalah PT Halmahera Persada Lygend, PT Adhikara Cipta Mulia, PT Smelter Nikel Indonesia, PT Huayue, PT QMB dan PT Vale Indonesia.

Belum lagi, rencana holding pertambangan MIND ID untuk membangun smelter HPAL yang terintegrasi dengan industri baterai untuk kendaraan listrik (EV) dan penyim-panan energi listrik (storage). MIND ID melalui Antam, bersama PT Pertamina (Persero) dan PT PLN (Persero) rencananya akan membangun dua pabrik baterai integrasi.

Senada dengan Irwandy, Bernardus juga optimistis pasar nikel akan semakin berkembang. Meski industri stainless steel masih mendominasi,…

Daily News Update Page 13

Although the stainless steel industry still dominates, the battery and electric car industries are driving the development of the nickel industry. Referring to a number of analysts, Bernardus said that by 2030 the world nickel market could double.

"Note that the adoption of electric cars is as expected. The stainless steel market will continue to grow but is not expected to be significant," said Bernardus.

By looking at this projection, the nickel ore processing plant that is expected to grow is HPAL, which will process limonite ore into MHP and MSP. Furthermore, it will be processed into nickel sulphate as a battery precursor material. However, currently the HPAL development project is still limited.

INCO is also investing to develop the HPAL factory. "PT Vale is a company that will invest in the development of the HPAL factory by cooperating with Sumitomo," said Bernardus.

Furthermore, he also welcomed the positive interest of Tesla, which is rumored to be building a battery factory in Indonesia. However, Bernardus emphasized that the plan must be addressed with caution considering that Tesla is very concerned about environ-mental issues and sustainable nickel supply.

"So it is necessary to think about how Indonesia can play a strategic role in the electric car battery business arena while maintaining the sustainability aspect," said Bernardus.

For information, referring to data from the Geological Agency of the Ministry of EMR, until July 2020, the total balance of Indonesia's nickel ore resources reached 11.88 billion tons. Meanwhile, the total resource of nickel metal is 174 million tons.

Meski industri stainless steel masih men-dominasi, tapi industri baterai dan mobil listrik mendorong pengembangan industri nikel. Merujuk pada sejumlah analis, Bernardus menyampaikan bahwa pada tahun 2030 pasar nikel dunia bisa naik dua kali lipat.

"Dengan catatan bahwa adopsi mobil listrik seperti yang diharapkan. Pasar stainless steel akan tetap tumbuh tapi diperkirakan tidak akan signifikan," kata Bernardus.

Dengan melihat proyeksi tersebut, pabrik pengolahan bijih nikel yang diharapkan tumbuh adalah HPAL, yang akan mem-proses bijih limonite menjadi MHP dan MSP. Selanjutnya, akan diolah menjadi nikel sulphate sebagai bahan precursor baterai. Namun, saat ini proyek pengembangan HPAL masih terbatas.

INCO pun sedang berinvestasi untuk mengembangkan pabrik HPAL. "PT Vale adalah satu perusahaan yang akan ber-investasi dalam pengembangan pabrik HPAL dengan menggandeng Sumitomo," sebut Bernardus.

Lebih lanjut, dia pun menyambut positif adanya ketertarikan Tesla yang dikabarkan akan membangun pabrik baterai di Indonesia. Namun, Bernardus menekankan bahwa rencana tersebut harus disikapi dengan hati-hati mengingat Tesla sangat concern terhadap isu lingkungan dan pasokan nikel yang berkelanjutan.

"Jadi perlu dipikirkan bagaimana Indonesia bisa memainkan peran strategis dalam percaturan bisnis batterai mobil listrik dengan tetap mengedepankan aspek sustainability," kata Bernardus.

Sebagai informasi, merujuk pada data dari Badan Geologi Kementerian ESDM, hingga Juli 2020, total neraca sumber daya bijih nikel Indonesia mencapai 11,88 miliar ton. Sedangkan total sumber daya logam nikel sebesar 174 juta ton.

Daily News Update Page 14

Then, the nickel ore reserve balance until July 2020 was recorded at 4.34 billion tons. Meanwhile, the total reserves of nickel metal are 68 million tons. The data was collected from 328 locations in Indonesia. Central Sulawesi, Southeast Sulawesi and North Maluku are the three provinces with the largest nickel resources and reserves.

Meanwhile, currently there are 292 nickel companies holding Mining Business Permits (IUP) and 4 companies holding Contract of Work (KK). Currently there are 11 existing nickel smelters with various types of products being produced, and there are still 18 other nickel smelter projects under construction.

Quoting data from the Directorate General of Mineral and Coal at the Ministry of EMR, nickel production in 2019 reached 1.78 million tons. It was about double the production in 2018 which amounted to 857,166 tons. In this year, the nickel refined production plan reaches 2,023,490 tons.

Lalu, neraca cadangan bijih nikel hingga Juli 2020 tercatat sebesar 4,34 miliar ton. Sementara total cadangan logam nikel sebesar 68 juta ton. Data tersebut di-kumpulkan dari 328 lokasi di Indonesia. Sulawesi Tengah, Sulawesi Tenggara dan Maluku Utara menjadi tiga provinsi dengan sumber daya dan cadangan nikel terbesar.

Adapun, saat ini terdapat 292 perusahaan nikel yang memegang Izin Usaha Pertambangan (IUP) dan 4 perusahaan yang memegang Kontrak Karya (KK). Saat ini terdapat 11 smelter nikel eksisting dengan berbagai jenis produk yang dihasilkan, dan masih ada 18 proyek smelter nikel lainnya yang sedang di-bangun.

Mengutip data Ditjen Minerba Kemen-terian ESDM, produksi olahan nikel pada tahun 2019 mencapai 1,78 juta ton. Melesat sekitar dua kali lipat dari produksi pada tahun 2018 yang sebesar 857.166 ton. Pada tahun, rencana produksi olahan nikel mencapai 2.023.490 ton.

Coal has consistently rallied for 4 days in a row, apparently this

country Tirta Citradi, CNBC Indonesia

CHINA's high domestic coal price is still

the main sentiment driving the Newcastle thermal coal price.

Last Monday (19/10), the price of jet stones for actively traded contracts was able to close with appreciation.

The Newcastle reference contract coal price rose 1.13% to US$ 58.15/ton. In the period 6-13 October 2020,…

Batu Bara Konsisten Reli 4 Hari Beruntun, Ternyata Gegara Ini

Tirta Citradi, CNBC Indonesia

HARGA batu bara domestik China yang

tinggi masih jadi sentimen utama pengerek harga batu bara termal Newcastle.

Senin kemarin (19/10), harga batu legam untuk kontrak yang aktif diperdagangkan

masih mampu ditutup dengan apresiasi.

Harga batu bara kontrak acuan Newcastle naik 1,13% ke US$ 58,15/ton. Pada

periode 6-13 Oktober 2020,…

Daily News Update Page 15

In the period 6-13 October 2020, the price of this coal fell by 13.4%. However, after that, on October 14-19, the price of coal rose by 8.4%.

The price of coal has not yet reached its highest level in October at US$ 62.3. The price of this jet rock dropped 6.51% in a day and became the deepest daily correction this year after China reportedly blocked Australian coal imports.

There is no certainty about the rumors circulating among these traders to date. The Australian Government is stil l investigating the rumors. However, China's import quota policy often creates uncertainty which makes the price of imported seaborne coal under pressure.

Import quotas are a form of policy to protect China's domestic coal industry. However, currently the tight supply has made the domestic coal price rise very high.

The price of Qinhuangdao thermal coal with a calorie of 5,500 Kcal/Kg which was the reference for the Bamboo Curtain country last week has exceeded the target range set by the government.

China's domestic coal price is pegged at RMB 618/ton or in the current exchange rate equivalent to nearly US$ 92/tonne. Far beyond the informal target range of RMB 500 - RMB 570 per tonne or what is more commonly known as the green zone.

Reuters reported that the price of thermal coal at Newcastle Port on October 16 was at US$ 51.29/ton. This means that the difference between China's domestic coal price (spread) and imports reached US$ 40.71/ton.

Under normal conditions, this price difference should make Chinese traders, importers and stun Chinese companies…

Pada periode 6-13 Oktober 2020, harga batu bara ini anjlok 13,4%. Namun setelah itu pada 14-19 Oktober harga batu bara naik 8,4%.

Harga batu bara memang belum sampai ke level tertingginya di bulan Oktober di US$ 62,3. Harga batu legam ini sempat anjlok 6,51% dalam sehari dan menjadi koreksi harian terdalam sepanjang tahun ini setelah China dikabarkan memblokir impor batu bara Australia.

Belum ada kepastian soal desas-desus yang beredar di kalangan trader tersebut sampai saat ini. Pemerintah Australia masih terus menyelidiki rumor tersebut . Namun kebijakan kuota impor China acap kali mem-beri ketidakpastian yang membuat harga batu bara impor lintas laut (seaborne) menjadi tertekan.

Kuota impor merupakan salah satu bentuk kebijakan untuk melindungi industri batu bara domestik China. Namun saat ini ketatnya pasokan membuat harga batu bara domestic-nya naik sangat tinggi.

Harga batu bara termal Qinhuangdao ber-kalori 5.500 Kcal/Kg yang jadi acuan Negeri Tirai Bambu pekan lalu telah melampaui rentang target yang ditetapkan oleh pemerintah.

Harga batu bara domestik China dipatok di RMB 618/ton atau dalam kurs saat ini setara dengan hampir US$ 92/ton. Jauh melam-paui rentang target informal yang dipatok di RMB 500 - RMB 570 per ton atau yang lebih dikenal dengan sebutan zona hijau.

Reuters melaporkan harga batu bara termal di Pelabuhan Newcastle pada 16 Oktober berada di level US$ 51,29/ton. Artinya selisih harga (spread) batu bara domestik China dengan impor mencapai US$ 40,71/ton.

Dalam kondisi normal, selisih harga tersebut seharusnya membuat para trader, importir dan perusahaan setrum China…

Daily News Update Page 16

importers and stun Chinese companies switch to cheaper imported coal which is also accompanied by a relaxation of the import quota policy considering that the new year is approaching.

On the other hand, China's economic growth, which rose by 4.9% in the third quarter, further proves that the need for commodities from the world's largest importing country will also increase.

However, due to the Covid-19 pandemic as well as policies to protect its domestic industry, China's coal imports during the last nine months dropped 4% more than 239.4 million tons compared to last year.

To meet increasing domestic needs, the Chinese government continues its efforts to boost local coal production. In the future, if China's domestic coal price continues to rise, it is not impossible that the Newcastle coal price will also be lowered. CNBC INDONESIA RESEARCH TEAM (twg/twg)

importir dan perusahaan setrum China beralih ke batu bara impor yang lebih murah yang juga dibarengi dengan relaksasi kebijakan kuota impor mengingat tahun baru semakin dekat.

Di sisi lain, pertumbuhan ekonomi China yang tercatat naik 4,9% pada kuartal ketiga semakin membuktikan bahwa kebutuhan akan komoditas dari negara importir ter-besar di dunia itu juga akan terkerek naik.

Namun akibat pandemi Covid-19 dan juga kebijakan untuk melindungi industri dalam negerinya, impor batu bara China sepanjang sembilan bulan terakhir drop 4% lebih 239,4 juta ton dibandingkan tahun lalu.

Untuk memenuhi kebutuhan domestik yang meningkat, pemerintah China terus ber-upaya untuk menggenjot produksi batu bara lokal. Ke depan jika harga batu bara domestik China terus naik, bukan tidak mungkin kalau harga batu bara Newcastle juga akan ikut terderek. TIM RISET CNBC INDONESIA (twg/twg)

Brazilian miner Vale hints at fourth-quarter production boost By: Reuters

BRAZILIAN mining company Vale reported on Monday an increase in iron-ore output in the third quarter and predicted a further boost in fourth-quarter output at some units, as a number of mines ramp up production or come online.

In a securities filing, the company said it produced 88.7-million tonnes of iron ore in the quarter, up 31.2% from the previous quarter and up 2.3% from the same period a year before, boosted by increased output at its Itabira and Timbopeba complexes and its Fazendao mine, all in southern Brazil.

Production at Itabira was temporarily stopped in the second quarter due to to a coronavirus outbreak among workers, while Itabira and Fazendao had been dogged by regulatory issues.

While the company managed to boost iron ore output, it still has a long way to go to reach its annual goal of 310-million to 330-million tonnes. Through the third quarter, it had produced 216-million tonnes.

Daily News Update Page 17

Vale said in the Monday statement that six-million tonnes of iron ore output at its Serra Leste mine in northern Brazil would come on line in the fourth quarter. It added that some

logistical issues in the iron ore pellet and fines market had been resolved in September, which would allow for improved timing between production and sales in that segment in the fourth

quarter.

Nickel production, Vale said, came in at 47 100 t, down 20.7% from the previous quarter and down 8.4% from the same period in 2019, hit partially by maintenance work.

The company said that nickel and copper output were already increasing in the fourth

quarter, as maintenance work drew to a close. Its output of the metal at Voisey's Bay and Onca Puma should also improve, the company said, thanks to decreased coronavirus-related

work stoppages and the completion of maintenance projects, respectively.

Metso Outotec delivers ‘next evolution’ in high pressure grinding rolls with HRCe

Posted by Daniel Gleeson

METSO Outotec has launched the “next evolution of the high pressure grinding roll”, with the

delivery of its HRC™e HPGR.

The original HRC HPGR was launched back in 2014 by Metso (now Metso Outotec),

pioneering the use of flanges and non-skewing design. The grinding performance that brings energy efficiency, lower circulating loads and increased throughput is now strengthened with

an additional evolution in design, Metso Outotec says.

The new HRCe comes with a decreased installation capital expenditure compared with the original HRC. Changes in design allow for maximum productivity with proven technology that

leads to superior grinding efficiency.

Christoph Hoetzel, Head of Grinding business line at Metso Outotec, said: “We are very excited about the new HRCe, which combines proven technology and customer-focused evolutions.

Metso Outotec is the only OEM that has been able to design and develop reliable flanged HPGR technology that has demonstrated superior performance for many years in the mining

industry. We will continue utilising our proven technology but have evolved the design to maximise value for our customers and superior grinding efficiency.”

The high throughput comes from the elimination of the edge effect with the flange design, which will ultimately maximise the amount of crushed material, the company says. With the

anti-skew assembly, customers will find faster restarts and no downtime from skewing events, according to Metso Outotec.

Daily News Update Page 18

The HRCe also comes with a large feed size acceptance of 60-120 mm and improved energy efficiency compared with similar HPGRs, the company says. It also boasts typical capacities of 1,810-6,930 t/h.

Key benefits of the new HPGR include:

Improved energy efficiency of up to 15%;

Lower circulating load of up to 24%;

Increased throughput of up to 19%;

Elimination of edge effect from combination of proven flange design and anti-skew assembly; and

Elimination of downtime caused by skewing events.

BHP posts 7% rise in iron ore output, flags production hit in Q2 Reuters

BHP Group posted a 7.2% rise in first-quarter iron ore production on Tuesday, supported by

stable demand from China, the world’s top consumer of the steelmaking ingredient.

Major miners have pinned their recovery hopes on an economic rebound by China, backed by

Beijing’s commodity-intensive stimulus measures, as the world still grapples with the fallout

of the covid-19 pandemic.

The world’s largest listed miner said it produced 74 million tonnes (Mt) of Western Australia

Iron Ore in the three months ended Sept. 30, up from 69 Mt a year earlier and slightly above a

UBS estimate of 73.5 Mt.

Uncertainty elsewhere, however, remains a concern. Rival Rio Tinto warned last week that a

resurgence in coronavirus cases was putting global economic growth at risk, and that steel

production outside China has sharply dropped.

BHP said second-quarter iron ore production will be impacted by work at its Mining Area C

and South Flank projects in Western Australia. It kept full-year forecasts unchanged.

Among other commodities, the company’s metallurgical coal production rose 5% to 10 Mt,

while energy coal output slid 17%.

The miner said it is “monitoring for any potential impacts from restrictions on coal imports

into China.”

(By Nikhil Kurian Nainan and Shashwat Awasthi; Editing by Maju Samuel)

Daily News Update Page 19

China’s coal imports drop 38.3% in September as imports quota is

used up

AS China's coal-consuming enterprises get close to using up their annual coal import quotas,

the country's coal imports saw a 38.3 percent plunge in September from the previous year,

according to data released by the National Bureau of Statistics (NBS) on Monday.

In September, China imported 18.68 million tons of coal, a year-on-year decrease of 38.3

percent, a month-on-month decrease of 1.98 million tons, and the pace of decline expanded by 1 percentage point from the previous month, NBS said.

From January to September, China imported 240 million tons of coal, a year-on-year decrease

of 4.4 percent.

The reason for the decline in coal imports was that 2020's coal import quotas are about to be used up, Ren Huiyun, a coal analyst at SCI99 said on Monday.

The exact number of this year's annual quota is not fully clear, but it is expected to be similar with last year. China imported 95.78 million tons of coal in the first quarter, up 28.4 percent

year-on-year, and imported 170 million tons of coal in the first six months, up 12.7 percent from a year earlier. The increases show Chinese coal consuming companies sped up

consumption to use up this year's quotas.

Indonesia and Australia are China's two largest sources of coal. Ren noted that China reduced Australian coal imports from the second half of the year onward, particularly its thermal coal,

which fell 55 percent in August year-on-year.

She added that northeast China currently has a strong demand for coal due to the coming the winter season, so agencies have allocated new quotas for the region.

The NBS said China produced 330 million tons of raw coal in September, a year-on-year decrease of 0.9 percent. The rate of decrease was 0.8 percentage points more than the

previous month.

However, imports of crude oil and natural gas rose in September. China imported 48.48 million tons of crude oil in the month, a year-on-year increase of 17.6 percent, with the pace

of that increase expanding by 5.0 percentage points compared to the increase of the previous month.

China imported 8.66 million tons of natural gas in September, a year-on-year increase of 5.5

percent, though the growth rate dropped by 7.7 percentage points from the previous month.

Daily News Update Page 20

Yancoal scales back spending to weather unpredictable coal storm Salomae Haselgrove

YANCOAL is confident that the company is well placed to manage Australia’s uncertain

market relationship with China and the current lows in coal prices.

The company is aiming to reduce operating costs where possible by optimising production and has added 700,000 tonnes to its stockpiles, which are historically depleted during the fourth quarter ahead of Asia’s winter.

Chief executive officer David James Moult confirmed that the company will be deferring all non-essential capital expenditure until 2021 but does not expect this to have a detrimental impact on production.

“During the remainder of 2020, we expect to see a recovery of (the) global economic conditions but this will be offset by coal supply cuts not matching demand reduction and elevated gas supply,” Moult said.

“In China, the arbitrage between domestic and import prices remain above $US25 ($35) per tonne, supporting the demand for imported coal and it is unclear if China will relax its custom clearance times and allow for further imports.

“Uncertainty will remain regarding the direction of coal prices over the rest of the year.”

Yancoal’s coal index relevant to its products is down by 25 to 30 per cent compared with 12 months ago and its realised price has also fallen from $107 per tonne in the third quarter of 2019 to $70 per tonne for the third quarter of 2020.

Despite these challenges, Yancoal’s saleable coal production for the first three quarters of 2020 is 11 per cent ahead of the 2019 volume, thanks to increased output from the Moolarben mine in New South Wales.

Moolarben’s processing plant performed above Yancoal’s expectations, thanks to higher than expected volumes by-passed at the plant, with the company producing 5.1 million tonnes of saleable thermal coal during the third period, up 6 per cent on quarter two.

Fellow New South Wales operation Mount Thorley has caught up to 2019’s year-to-date saleable coal production levels of 3.5 million tonnes of met thermal coal, after prior disruptions such as bushfires and ongoing rains.

At the Hunter Valley operations, New South Wales production was scaled back to 4.1 million tonnes in the third quarter compared to 4.4 million tonnes in the second, to ride out soft market conditions.

The Middlemount met thermal coal mine in Queensland achieved an 11 per cent increase quarter on quarter to 700,000 tonnes of saleable coal production despite low stocks impacting output at the start of the period.

Daily News Update Page 21

The Straford Duralie (New South Wales) site experienced low run of mine volumes but managed to match its year-to-date saleable production of 100,000 tonnes of met/thermal coal, while Yarrabee’s (Queensland) saleable coal production dropped by 11 per cent to 800,000 tonnes.

Despite the uncertainty ahead, Yancoal is still future focussed, having received the required approvals to increase Moolarben’s run of mine production from 21 million tonnes to 24 million tonnes annually.

Studies are underway to address further licensing requirements and to assess the optimal production profile.

Thermal, coking coal imports in 12 ports dip 25% to 55 MT in Apr-Sep: IPA

DISRUPTIONS caused by the COVID-19 pandemic continued to impact cargo movement in

India, with thermal and coking coal imports at 12 major ports falling 25.13 per cent year-on-year to 55.41 million tonnes (MT) in April-September, according to the apex ports' body IPA.

Coal volumes at the 12 major ports declined for the sixth straight month in September 2020, as per the Indian Ports Association (IPA).

Thermal coal imports dropped 23.24 per cent to 34.52 MT during April-September, while coking coal shipments fell 28.04 per cent to 20.89 MT, IPA said.

These ports had handled 44.98 MT of thermal coal and 29.03 MT of coking coal in April-September period of the previous financial year.

Together, thermal and coking coal handling saw a decline of 25.13 per cent at these ports in the April-September period at 55.41 MT, the IPA, which maintains cargo data handled by these ports, said in its latest report.

Thermal coal is the mainstay of India's energy programme as 70 per cent of power generation is dependent on the dry fuel, while coking coal is used mainly for steel making.

India is the third-largest producer of coal after China and the US, and has 299 billion tonnes of resources and 123 billion tonnes of proven reserves, which may last for over 100 years.

In the wake of the COVID-19 outbreak, sharp declines were also witnessed in handling of containers, coal and POL (petroleum, oil and lubricant) among other commodities.

The 12 ports witnessed considerable decline in cargo traffic, registering a 14 per cent dip in the first half of the current fiscal to 298.55 million tonnes (MT) as against 348.23 MT during April-September of the last fiscal.

Shipping Minister Mansukh Mandaviya last month said cargo traffic at 12 major ports declined considerably March onwards, adversely impacted by the COVID-19 pandemic.

Daily News Update Page 22

India has 12 major ports under the control of the central government -- Deendayal (erstwhile Kandla), Mumbai, JNPT, Mormugao, New Mangalore, Cochin, Chennai, Kamarajar (earlier Ennore), V O Chidambarnar, Visakhapatnam, Paradip and Kolkata (including Haldia).

While Kamarajar port saw 31.63 per cent decline in cargo handling to 10.77 MT in April-September, Chennai port suffered a drop of 25.71 per cent to 18.38 MT, as per IPA data.

Cochin Port saw a dip of 24.42 per cent to 12.58 MT during the period.

Cargo handling at JNPT port slipped 21.71 per cent to 26.94 MT, while it declined 18.78 per cent to 25.56 MT at Kolkata. Mumbai port logged a fall of 18.74 per cent to 24.45 MT.

"There was a considerable decline in the total traffic, containers traffic and other than containers traffic in March, April, May, June, July and August, 2020 as compared to the corresponding months in 2019," Mandaviya had told Parliament last month.