Indonesia Eyes New Coal Price Formula, Mining Shares Plunge

In essence, the government wants to make the domestic coal price cheaper as this would provide room for state-owned electricity company Perusahaan Listrik Negara (PLN) to reduce electricity tariffs.

Problematically for the company, the benchmark Indonesian coal price (Harga Batubara Acuan, or HBA) soared 9.6 percent month-on-month (m/m) to USD $92.03 per metric ton in September 2017, from USD $83.97 in the preceding month. Indonesia's HBA is now at its highest (most expensive) position since December 2016.

Considering PLN buys most of the coal (for its coal-fired power stations) on the Indonesian market, the recently surging coal price causes a steep rise in operational costs. The company requires about 90 million tons of coal each year to fuel its coal-fired power plants.

Those companies that sell a big portion of their coal production to PLN were particularly affected on Wednesday's trading day (13/09) as investors are concerned that these companies' corporate earnings are affected most severely by the looming new rules that would cap the domestic coal price. Meanwhile, those Indonesian coal miners that export a big chunk of their output are considered less affected. However, Indonesian law requires all coal miners to set aside a portion of their output for domestic sales, thus all coal mining companies are basically affected.

Read more: Overview of Indonesia's Coal Industry

For example, Tambang Batubara Bukit Asam's shares plunged 17.25 percent to IDR 10,075, while shares of Bumi Resources fell 9.17 percent to IDR 218 a piece, and Adaro Energy declined 8.04 percent to IDR 1,715 per share.

Last Update: 29 Mar 2021

Selection of Listed Indonesian Coal Mining Companies

Company	P: 29 Mar 2021	P: 28 Mar 2021	Gain/Loss	P/E ttm	Yield %	Gain/Loss YTD
Adaro EnergyADRO	1,205	1,220	-1.23%	N/A	0.00%	-14.84%
Bumi ResourcesBUMI	61	65	-6.15%	N/A	0.00%	-49.59%
Delta Dunia MakmurDOID	424	432	-1.85%	N/A	0.00%	19.77%
Harum EnergyHRUM	5,250	5,200	0.96%	N/A	0.00%	22.09%
Indo Tambangraya MegahITMG	12,175	12,200	-0.20%	N/A	0.00%	-9.65%
Tambang Batubara Bukit AsamPTBA	2,680	2,700	-0.74%	N/A	0.00%	-5.96%
Toba Bara SejahtraTOBA	498	496	0.40%	N/A	0.00%	-10.27%
Surya Esa PerkasaESSA	380	368	3.26%	N/A	0.00%	58.33%
Medco Energi InternasionalMEDC	600	610	-1.64%	N/A	0.00%	-4.76%
Aneka Tambang (Antam)ANTM	2,260	2,430	-7.00%	N/A	0.00%	-16.61%
Combined Total	25,533	25,721	-0.73%			-4.19%

Green colour indicates upward movement Red colour indicates downward movement P = price; E = earnings; D = dividend; Yield = D/P "N/A" indicates P/E < 0 (negative earnings) "-" indicates E,D,P or YTD is not available

Indonesian Government's Benchmark Thermal Coal Price (HBA):

Month	2012	2013	2014	2015	2016	2017
January	109.29	87.55	81.90	63.84	53.20	86.23
February	111.58	88.35	80.44	62.92	50.92	83.32
March	112.87	90.09	77.01	67.76	51.62	81.90
April	105.61	88.56	74.81	64.48	52.32	82.51
May	102.12	85.33	73.60	61.08	51.20	83.81
June	96.65	84.87	73.64	59.59	51.87	75.46
July	87.56	81.69	72.45	59.16	53.00	78.95
August	84.65	76.70	70.29	59.14	58.37	83.97
September	86.21	76.89	69.69	58.21	63.93	92.03
October	86.04	76.61	67.26	57.39	69.07
November	81.44	78.13	65.70	54.43	84.89
December	81.75	80.31	69.23	53.51	101.69

^{in USD/ton
Source: Ministry of Energy and Mineral Resources}

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