Daily News Update Page 1

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Allocate Capex Jumbo, Timah (TINS) Ready to Spur Production This Year Alokasikan Capex Jumbo, Timah (TINS) Siap Pacu Produksi Tahun Ini Pefindo Affirms A Rating of Merdeka Copper Pefindo Tegaskan Peringkat A Merdeka Copper This is what the Ministry of ESDM is doing to prevent illegal tin mining and exports Ini yang dilakukan Kementerian ESDM untuk cegah penambangan dan ekspor timah ilegal Astra Gold Mine (UNTR) Needs Diamond Drilling Contractor Tambang Emas Astra (UNTR) Butuh Kontraktor Bor Berlian Breaking Records, Coal Prices Break USD 90/ton Pecah Rekor, Harga Batubara Tembus USD 90/ton Copper prices could strengthen to US$ 10,000 this year Harga tembaga bisa menguat ke US$ 10.000 tahun ini Demand from China Soars, Nickel Prices Close to a 5-Year Record Permintaan dari China Melonjak, Harga Nikel Mepet Rekor 5 Tahun Indonesia Is Ready To Become A World Class Electric Car Battery Manufacturer Indonesia Siap Jadi Produsen Baterai Mobil Listrik Kelas Dunia Itochu to exit thermal coal business by 2024 Rio Tinto warned Oyu Tolgoi plans could be scrapped Whitehaven cautious of project spending China buying South African coal ‘could be game-changer but we shouldn’t be complacent’ Amid production woes, US coal deaths at historic low in 2020

Bisnis Neraca Kontan Bisnis Dunia Tambang Kontan Bisnis Sindonews Australian Mining Mining Technology Australian Mining Mining Weekly The News Tribune

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Daily News Update Page 2

Allocate Capex Jumbo, Timah (TINS) Ready to Spur Production

This Year Finna U. Ulfah

THE STATE-owned metal mineral

company, PT Timah Tbk., is allocating a larger capital expenditure (capex) in 2021 in line with plans to increase production.

TINS targets the production volume in 2021 to reach more than 50,000 tons, or higher than the estimated production in 2020. TINS also targets tin sales in 2021 to be around 92 percent of production or the equivalent of 46,000 tons.

Timah Corporate Secretary Muhammad Zulkarnaen said that the company allocated a capex of around Rp1.9 trillion which would come from internal cash and the use of long term financing.

Of that total, around 94 percent is for the company's investment costs while 6 percent is allocated for subsidiaries.

"Most of it in Timah, the capex will be used for capacity expansion to increase production, and the rest for business development and others," said Zulkarnaen to Bisnis, Wednesday (13/1/2021).

Based on Bisnis records, the capex allocation for the issuer coded for TINS shares is greater than the capex allocation for 2020 which is only Rp 1.5 trillion.

Meanwhile, initially TINS allocated a 2020 capex of Rp 2.5 trillion, but it was trimmed down to Rp 1.5 tril l ion in l ine with business challenges due to the Covid-19 pandemic.

The capex cut is to maintain the company's debt equity ratio at a low level last year.

Alokasikan Capex Jumbo, Timah (TINS) Siap Pacu Produksi Tahun

Ini Finna U. Ulfah

EMITEN BUMN logam mineral, PT Timah

Tbk., mengalokasikan belanja modal atau capital expenditure (capex) yang lebih besar pada 2021 seiring dengan rencana mening-katkan produksi.

TINS menargetkan volume produksi pada 2021 dapat mencapai lebih dari 50.000 ton, atau lebih tinggi daripada estimasi produksi pada 2020. TINS juga menargetkan pen-jualan timah pada 2021 sekitar 92 persen dari produksi atau setara 46.000 ton.

Sekretaris Perusahaan Timah Muhammad Zulkarnaen mengatakan bahwa perseroan mengalokasikan capex sekitar Rp1,9 triliun yang akan berasal dari kas internal dan penggunaan long term financing.

Dari total itu, sekitar 94 persen untuk biaya investasi perseroan sedangkan 6 persennya dialokasikan untuk entitas anak usaha.

“Sebagian besar di Timah, capex akan digunakan untuk perluasan kapasitas untuk meningkatkan produksi, dan sisanya untuk pengembangan usaha dan lain-lain,” ujar Zulkarnaen kepada Bisnis, Rabu (13/1/2021).

Berdasarkan catatan Bisnis, alokasi capex emiten berkode saham TINS tersebut lebih besar daripada alokasi capex 2020 yang hanya sebesar Rp1,5 triliun.

Adapun, semula TINS mengalokasikan capex 2020 sebesar Rp2,5 triliun, tetapi dipangkas menjadi Rp1,5 tril iun seiring dengan tantangan bisnis akibat pandemi Covid-19.

Pemangkasan capex itu sekaligus untuk mempertahankan debt equity ratio perseroan di tingkat rendah pada tahun lalu.

Daily News Update Page 3

Zulkarnaen explained that the company is optimistic that the metal and mineral industry, especially tin, will improve this year in line with the increasing trend in global tin prices.

He also explained that the growth in world refined tin consumption this year is also predicted to increase by 3.6 percent or around 353,900 tonnes compared to consumption of 341,600 tonnes in 2020.

This is what makes the company confident in raising its production and sales volume targets this year.

Meanwhile, TINS will optimize synergies with mining holding companies while intensifying exploration.

"We will also optimize the management of company funds and improve HR capabilities throughout the value chain," said Zulkarnaen. Editor: Hafiyyan

Zulkarnaen menjelaskan bahwa perseroan optimistis industri logam mineral, terutama komoditas timah, semakin membaik pada tahun ini seiring dengan tren kenaikan harga timah global.

Dia juga menjelaskan bahwa pertumbuhan konsumsi logam timah dunia pada tahun ini juga diprediksi naik 3,6 persen atau sekitar 353.900 ton dibandingkan dengan konsumsi 341.6500 ton pada 2020.

Hal itu lah yang membuat perseroan percaya diri untuk menaikkan target volume produksi dan penjualan pada tahun ini.

Sementara itu, TINS akan mengoptimalisasi sinergi dengan holding pertambangan sembari mengintensifkan eksplorasi.

“Kami juga akan mengoptimalkan penge-lolaan dana perusahaan dan meningkatkan kapabilitas SDM di seluruh rantai nilai,” papar Zulkarnaen. Editor : Hafiyyan

Pefindo Affirms A Rating of Merdeka Copper By: Ahmad Nabhani

PT PEMERINGKAT Efek Indonesia

(Pefindo) in a press release in Jakarta yesterday emphasized that the A rating for

PT Merdeka Copper Gold Tbk (MDKA) along with the company's 2020 first

sustainable bonds has been issued.

Meanwhile, the outlook for the corporate

rating is stable. Pefindo's management said the rating indicates the company's strong

ability, compared to other obligors in Indonesia, to meet its long-term financial

commitments.

Pefindo Tegaskan Peringkat A Merdeka Copper Oleh: Ahmad Nabhani

PT PEMERINGKAT Efek Indonesia

(Pefindo) dalam siaran persnya di Jakarta, kemarin menegaskan, peringkat A untuk PT Merdeka Copper Gold Tbk (MDKA) beserta obligasi berkelanjutan I tahun 2020 yang telah diterbitkkan perseroan.

Sedangkan prospek peringkat perseroan ditetapkan stabil. Manajemen Pefindo menyebutkan peringkat tersebut me-nandakan kemampuan kuat perseroan, dibandingkan dengan obligor lain di Indonesia untuk memenuhi komitmen keuangan jangka panjangnya.

Daily News Update Page 4

Pefindo also said that the rating also reflects the company's low cash cost, potential for higher revenue from the acid iron metal (AIM) project, and high demand for gold. However, the ratings are constrained by its limited mining resources, exposure to fluctuations in commodity prices, unfavorable weather and the risk of mining development in new areas.

The rating can be raised, according to Pefindo, if the company is able to improve its mining profile by increasing gold and copper reserves and the progress of the better AIM project development. This must also be followed by a conservative capital structure and strong cash flow protection while maintaining good profitability margins.

This gold mining company continued exploration activities in three different areas in Indonesia (Tujuh Bukit in East Java, Wetar Island in Southwest Maluku, and Pani in Gorontalo) in December 2020.

According to a written statement from the company's management, Merdeka Copper has spent Rp. 24.93 billion for exploration activities carried out by the company in December 2020. Work on the Upper High Grade Zone (UHGZ) of the Tujuh Bukit copper and gold resource is being explored through a combination of surface and underground drilling.

The focus of the current drilling program is the Upper High Grade Zone area (referred to as the Initial Mining Area - "IMA") which contains the largest zone of adjacent high grade drilling results for copper and gold to date, and is well positioned for drilling from current drop location.

It was stated that the total expenditure for exploration activities related to the Tujuh Bukit UHGZ in December was Rp 22 billion consisting of subsidence development, underground resource definition drilling and surface hydrological drilling.

Pefindo juga menyebutkan, peringkat tersebut juga mencerminkan biaya tunai (cash cost) perseroan yang rendah, potensi perolehan pendapatan yang lebih tinggi dari proyek acid iron metal (AIM), dan permintaan emas yang tinggi. Namun, peringkat tersebut dibatasi oleh sumber daya tambang yang terbatas, eksposur terhadap fluktuasi harga komoditas, dan cuaca yang tidak menguntungkan serta risiko pengem-bangan tambang di daerah baru.

Peringkat tersebut dapat dinaikan, menurut Pefindo, apabila perseroan mampu untuk me-ningkatkan profil tambang dengan memper-besar cadangan emas dan tembaga serta progres perkembangan proyek AIM yang lebih baik. Hal tersebut juga harus diikuti oleh struktur permodalan yang konservatif dan perlindungan arus kas yang kuat dengan tetap memper-tahankan marjin profitabilitas yang baik.

Perusahaan tambang emas ini terus me-lanjutkan kegiatan eksplorasi di tiga daerah berbeda di Indonesia (Tujuh Bukit di Jawa Timur, Pulau Wetar di Maluku Barat Daya, dan Pani di Gorontalo) pada Desember 2020. Menurut keterangan tertulis manajemen perseroan, Merdeka Copper telah mengeluarkan dana sebesar Rp 24,93 miliar untuk kegiatan eksplorasi yang dilakukan perseroan pada bulan Desember 2020. Pengerjaan Upper High Grade Zone (UHGZ) dari sumber daya tembaga dan emas Tujuh Bukit sedang dieksplorasi melalui kombinasi pengeboran permukaan dan bawah tanah.

Fokus dari program pemboran saat ini adalah area Upper High Grade Zone (disebut sebagai Area Penambangan Awal - "IMA") yang berisi zona terbesar dari hasil pengeboran bermutu tinggi yang berdekatan untuk tembaga dan emas hingga saat ini, dan dalam kondisi baik di-posisikan untuk pengeboran dari lokasi penu-runan saat ini.

Disebutkan, total pengeluaran untuk kegiatan eksplorasi yang terkait dengan Tujuh Bukit UHGZ pada bulan Desember adalah Rp 22 miliar yang terdiri dari pengembangan penurunan, pemboran definisi sumber daya bawah tanah dan pemboran hidrologi permukaan.

Daily News Update Page 5

Meanwhile, the Wetar Island exploration program focuses on mapping and sampling of regional EM target rock shale near Lerokis, compilation of new tests, and collection of petrological samples from Barumanu, integration of regional mapping data, GIS and database updates. The total estimated cost of this activity for December is Rp0.53 billion.

Sedangkan program eksplorasi Pulau Wetar berfokus pada pemetaan dan pengambilan sampel serpihan batuan target EM regional dekat Lerokis, kompilasi pengujian baru, dan pengumpulan sampel petrologi dari Barumanu, integrasi data pemetaan regional, GIS dan pembaruan basis data. Total perkiraan biaya kegiatan ini untuk Desember adalah Rp 0,53 miliar.

This is what the Ministry of ESDM is doing to prevent illegal

tin mining and exports Reporter: Filemon Agung

THE MINISTRY of Energy and Mineral Resources (ESDM) admits that it is still working to formulate regulations to minimize the practice of exporting tin in the form of concentrate.

The Director of Mineral Development and Business of the Ministry of ESDM Yunus Saefulhak said that so far, referring to the existing mechanism, the export of raw materials abroad is not possible.

"The Ministry of ESDM and the Ministry of Trade continue to work on formulating regulations that can close the gap for tin exports in the form of concentrate," Yunus told Kontan.co.id, Wednesday (13/1).

Yunus added, based on the existing trade system mechanism, the sale of tin raw material abroad is actually not possible.

Meanwhile, the tin trade system is regulated in the Minister of ESDM Regulation Number 25 of 2018 concerning Mineral and Coal Mining Business and Regulation of the Minister of Trade 53 of 2018 in conjunction with MOT 33 of 2015.

Ini yang dilakukan Kementerian ESDM untuk cegah penam-

bangan dan ekspor timah ilegal Reporter: Filemon Agung

KEMENTERIAN Energi dan Sumber Daya

Mineral (ESDM) mengakui masih terus ber-upaya menyusun regulasi untuk meminima-lisir praktik ekspor timah dalam bentuk konsentrat.

Direktur Pembinaan dan Pengusahaan Mineral Kementerian ESDM Yunus Saefulhak mengungkapkan sejauh ini merujuk meka-nisme yang ada, ekspor raw material ke luar negeri tidaklah memungkinkan. "Kemen-terian ESDM dan Kementerian Perdagangan terus berupaya menyusun regulasi yang dapat menutup celah terjadinya ekspor timah dalam bentuk konsentrat," ujar Yunus kepada Kontan.co.id, Rabu (13/1).

Yunus menambahkan, berdasarkan Meka-nisme Tata niaga yang ada maka penjualan raw material timah ke luar negeri sejatinya tidak memungkinkan dilaksanakan.

Adapun, tata niaga timah diatur dalam Peraturan Menteri ESDM Nomor 25 Tahun 2018 tentang Pengusahaan Pertambangan Mineral dan Batubara dan Peraturan Menteri Perdagangan 53 Tahun 2018 juncto Permendag 33 Tahun 2015.

Daily News Update Page 6

"Tin that can be sold abroad must be processed and refined domestically until

reaching the minimum level of Sn> 99.9% and in the form of pure tin bars with

certain sizes and shapes," said Yunus.

On the other hand, the two regulations also contain provisions whereby tin sand

export activities are prohibited because they have not met the above restrictions

and conditions. If there is an indication or practice of exporting tin sand, the offender

will be subject to legal sanctions.

Yunus continued, currently the imple-

mentation of MEMR supervision is carried out on licensed business activities with

several production reporting and sales verification modules so that all legal sales

are recorded and pay production fee obligations.

"For illegal activities and sales outside the Indonesian customs area, there are other

agencies and law enforcement officials who carry out surveillance and

prosecution," said Yunus.

In Kontan.co.id's notes, Senior Economist Faisal Basri revealed that illegal tin mining

and export practices are still rampant and carried out openly. A number of

unscrupulous officials, regional officials and politicians are also suspected of

supporting the mining and exporting activities of fake tin.

Faisal said that these elements were involved in becoming mine owners directly

or indirectly. According to him, many Mining Business Permit (IUP) holders do

not meet the requirements, so they only become collectors of il legal mining

products. He emphasized that the rampant illegal mining and exports made legal tin

business players less competitive.

"Timah yang dapat dijual ke luar negeri harus dilakukan pengolahan dan pemurnian di dalam negeri sampai mencapai batasan minimum kadar Sn>99,9% dan dalam bentuk timah murni batangan dengan ukuran dan bentuk tertentu," kata Yunus.

Disisi lain, kedua beleid juga memuat ketentuan dimana kegiatan ekspor pasir timah dilarang karena belum memenuhi batasan dan ketentuan di atas. Jika nantinya ada indikasi atau praktek ekspor pasir timah maka pelanggar akan di-kenakan sanksi hukum.

Yunus melanjutkan, saat ini pelaksanaan pengawasan KESDM dilaksanakan ter-hadap kegiatan usaha yang berizin dengan beberapa modul pelaporan produksi dan verifikasi penjualan sehingga seluruh penjualan legal tercatat dan membayar kewajiban iuran produksi.

"Untuk kegiatan ilegal dan penjualan keluar wilayah kepabeanan Indonesia, ada instansi lain dan aparat penegak hukum yang melakukan pengawasan dan penindakan," terang Yunus.

Dalam catatan Kontan.co.id, Ekonom Senior Faisal Basri mengungkapkan praktik penambangan dan ekspor timah ilegal masih marak dan dilakukan secara terang-terangan. Sejumlah oknum aparat, pejabat daerah dan politisi pun diduga turut mendukung aktivitas penambangan dan ekspor timah abal-abal tersebut.

Faisal bilang para oknum tersebut terlibat dengan menjadi pemilik tambang secara langsung maupun tidak langsung. Menurutnya, banyak pemegang Izin Usaha Pertambangan (IUP) yang tidak memenuhi syarat, sehingga hanya menjadi penadah hasil tambang ilegal. Dia menekankan, maraknya penambangan dan ekspor ilegal tersebut membuat pelaku usaha timah legal kalah saing.

Daily News Update Page 7

"They (unscrupulous apparatus/officials) are like kings there. Many IUP holders do

not meet the requirements, because their only goal is to collect illegal mining

products which are cheaper than legal mines," said Faisal.

Likewise, Indonesian tin mining

practitioner, Teddy Marbinanda, said that the involvement of elements of the

apparatus in illegal tin mining has rendered industry players who comply

with the law powerless.

Teddy said that ignoring the chaos in tin governance would be detrimental to the

state. This is because the state loses resources without getting adequate

income.

"Up to 90% of illegal mining locations are

in the PT Timah IUP. Most of the illegal mining products are sold to other parties

at low prices. It is not fair for PT Timah and the state," he explained.

From the export side, a number of

neighboring countries are still importing tin sand from Indonesia. In fact, the export

of tin sand has been banned. In fact, Singapore, which does not have a tin mine,

can export tin blocks.

According to Faisal, this condition occurred due to weak enforcement of regulations

even though the rules were complete. Apart from that, the government also does

not seem that serious about the tin commodity.

"I almost never see the Minister of ESDM, Pak Luhut (Coordinating Minister for

Maritime Affairs and Investment) discussing tin. For nickel, bauxite often," he

said.

"Mereka (oknum-oknum aparat/pejabat)

seperti raja di sana. Banyak pemegang IUP

tidak memenuhi syarat. karena tujuannya

hanya mau jadi penadah hasil tambang

ilegal yang harganya lebih murah di-

bandingkan tambang legal," kata Faisal.

Senada, praktisi pertambangan timah

Indonesia, Teddy Marbinanda menyam-

paikan bahwa keterlibatan oknum aparat

di pertambangan timah ilegal membuat

pelaku industri yang patuh secara legal

menjadi tidak berdaya.

Kata Teddy, pengabaian atas kekacauan

tata kelola timah akan merugikan negara.

Sebab, negara kehilangan sumber daya

tanpa mendapat penghasilan yang me-

madai.

"Hingga 90% lokasi penambangan ilegal

ada di IUP PT Timah. Sebagian besar hasil

penambangan ilegal dijual ke pihak lain

dengan harga murah. Tidak adil bagi PT

Timah dan negara," terangnya.

Dari sisi ekspor, sejumlah negara tetangga

tercatat masih mengimpor pasir timah dari

Indonesia. Padahal, ekspor pasir timah

sudah dilarang. Bahkan, Singapura yang

tidak punya tambang timah bisa meng-

ekspor balok timah.

Menurut Faisal, kondisi itu terjadi karena

lemahnya penegakan aturan meski

aturannya sudah lengkap. Selain itu,

pemerintah juga tampak tidak begitu

serius memperhatikan komoditas timah.

"Saya hampir tidak pernah melihat Menteri

ESDM, Pak Luhut (Menteri Koordinator

Bidang Kemaritiman dan Investasi) mem-

bahas timah. Kalau nikel, bauksit sering,"

sebut dia.

Daily News Update Page 8

Astra Gold Mine (UNTR) Needs Diamond Drilling Contractor

Anggara Pernando

THE GOLD mining unit of PT United Tractors Tbk. (UNTR) is looking for contractors specializing in diamond core drilling.

In its announcement , PT Agincourt Resources, the managing arm of the Martabe mine in North Sumatra, said that contractors must have sufficient experience.

"Requirements include having 8 to 15 heli-portable diamond drills," the company said in its announcement.

UNTR Investor Relations Ari Setiyawan said the Martabe gold mine was looking for vendors to carry out exploration.

"Diamond core drilling is a type, what exploration is doing is the Martabe gold mine," said Ari, Tuesday (12/1/2021).

Martabe is the gold mining business of the Astra Group through PT Agincourt Sumber Daya, which is under the auspices of UNTR.

The Martabe gold mine is included in the sixth generation contract with a working area of 1,303 km². This location is precisely in Tapanuli, Central Tapanuli, North Tapanuli and Mandailing Natal, North Sumatra.

Martabe is reported as of December 31, 2019 to contain 7.8 Moz of gold and 64 Moz of silver. Production began at Martabe on 24 July 2012.

The operating capacity of the Martabe Gold Mine is more than 5.5 mtpa of ore to produce over 400,000 oz of gold and 2-3 Moz of silver per year.

Tambang Emas Astra (UNTR) Butuh Kontraktor Bor Berlian

Anggara Pernando

UNIT tambang emas PT United Tractors

Tbk. (UNTR) mencari kontraktor dengan spesialisasi diamond core drilling.

Dalam pengumumannya, PT Agincourt Resources lengan pengelola tambang Martabe di Sumatra Utara menyebutkan para kontraktor harus memiliki penga-laman yang cukup baik.

"Persyaratan antara lain memiliki 8 hingga 15 heli-portable bor diamond," ulas per-usahaan dalam pengumumannya.

Investor Relations UNTR Ari Setiyawan menyebutkan tambang emas Martabe tengah mencari vendor untuk melakukan eksplorasi.

"Diamond core drilling ini tipenya, yang dilakukan eksplorasi adalah tambang emas Martabe," kata Ari, Selasa (12/1/2021).

Martabe merupakan bisnis tambang emas Astra Group melalui PT Agincourt Sumber Daya yang berada di dalam naungan UNTR.

Tambang emas Martabe termasuk dalam kontrak generasi keenam dengan wilayah kerja seluas 1.303 km². Lokasi ini tepatnya berada di Tapanuli, Tapanuli Tengah, Tapanuli Utara dan Mandailing Natal, Sumatra Utara.

Martabe dilaporkan hingga 31 Desember 2019 mengandung 7,8 Moz emas dan 64 Moz perak. Produksi dimulai di Martabe pada 24 Juli 2012.

Kapasitas operasi Tambang Emas Martabe lebih dari 5,5 mtpa bijih untuk meng-hasilkan lebih dari 400.000 oz emas dan 2-3 Moz perak per tahun.

Daily News Update Page 9

For contractors who are interested in this work, it is said that they can apply from 11-25 January 2021 at 17.00 WIB by completing the administration to TB-MDG-MartabeSupplyContract@agincourtresources.com. Editor: Anggara Pernando

Bagi kontraktor yang tertarik dengan pekerjaan ini disebutkan dapat mengajukan diri mulai 11 - 25 Januari 2021 pukul 17.00 WIB dengan melengkapi administrasi ke TB -MDG-MartabeSupplyContract@agincourtresources.com. Editor : Anggara Pernando

Breaking Records, Coal Prices Break USD 90/ton

Author: Mayang Sari, Editor: Ocky PR.

THE PRICE of coal in the ICE Newcastle

thermal coal futures contract increased

significantly on Tuesday (12/01/2021). The coal contract price reached USD

90.5/ton. This price is recorded as the highest price since the last one year.

China's coal demand supported t he increase in coal prices. Some analysts

project that the strengthening of coal prices will continue during the first quarter

of 2021.

Domestic coal supply in China results in

limited electricity production in China. This cannot keep up with the demand for

electricity use in the local area. The Chinese government finally made a

decision to limit the use of electricity by factories outside working hours.

Another factor that supports the increase

in coal prices is the increasing demand for electricity during winter in China and

ahead of the Chinese New Year celebrations. The reduced supply of

domestic coal will push China's import quota, which will result in an increase in

seaborne coal prices.

Pecah Rekor, Harga Batubara Tembus USD 90/ton

Penulis : Mayang Sari, Editor : Ocky PR.

HARGA batubara kontrak futures

(berjangka) batubara termal ICE Newcastle naik signifikan pada Selasa (12/01/2021). Harga kontrak batubara tersebut tembus level USD 90,5/ton. Harga ini tercatat sebagai harga tertinggi sejak satu tahun terakhir.

Permintaan batubara China menyokong kenaikan harga batubara. Sejumlah analis memproyeksikan penguatan harga batu-bara masih berlanjut selama kuartal pertama 2021.

Suplai batubara domestik di China ber-imbas pada terbatasnya produksi listrik di China. Hal ini tidak dapat mengimbangi kebutuhan penggunaan listrik di daerah setempat. Pemerintah China akhirnya membuat keputusan pembatasan peng-gunaan listrik oleh pabrik-pabrik di luar jam kerja.

Faktor lain yang mendukung kenaikan harga batubara adalah meningkatnya permintaan listrik saat musim dingin di China dan menjelang perayaan Tahun Baru Imlek. Berkurangnya suplai batubara domestik akan mendorong kuota impor China sehingga berdampak pada pening-katan harga seaborne coal.

Daily News Update Page 10

Currently, economic recovery in China will increase demand for coal. The depletion of

coal stocks in China will also increase the opportunities for coal imports by China to

cover the deficit in coal stocks. The Chinese government continues to strive to increase

local production and relax import policies so that prices fall and demand can be met.

Central Capital Futures analyst Wahyu

Tribowo Laksono observes that energy commodities are just starting to rise. This

makes coal one of the commodities that has been pushed up.

Saat ini pula, pemulihan perekonomian di China akan meningkatkan permintaan terhadap batubara. Stok batubara di China yang mulai menipis pun akan meningkatkan peluang impor batubara oleh China untuk menutupi defisit stok batubara. Pemerintah China terus berupaya untuk menaikkan pro-duksi lokalnya dan melonggarkan kebijakan impor supaya harga turun dan permintaan dapat terpenuhi.

Analis Central Capital Futures Wahyu Tribowo Laksono mengamati komoditas energi saat ini memang baru mulai bangkit. Hal ini membuat batubara menjadi salah satu komoditas yang ikut tergerek naik.

Copper prices could strengthen to US$ 10,000 this year

Reporter: Intan Nirmala Sari | Editor: Wahyu T. Rahmawati

HAVING successfully breached the

psychological level of US$ 8,000 per metric ton, the price of copper in 2021 has the potential to continue to climb closer to the level of US$ 10,000 per metric ton.

Central Capital Futures analyst Wahyu Tribowo Laksono revealed that several sentiments are the key to strengthening copper prices in early 2021, such as the reflationary trade. This condition reflects the investment trend, in which the market is pursuing assets related to economic growth and inflation.

As for fundamentals, the strengthening of copper prices is also supported by the supply factor which has been disrupted due to the Covid-19 pandemic. In particular, there were production bottle-necks in Chile, which is also one of the largest copper producers in the world.

Harga tembaga bisa menguat ke US$ 10.000 tahun ini

Reporter: Intan Nirmala Sari | Editor: Wahyu T. Rahmawati

SUKSES tembus level psikologis US$ 8.000

per metrik ton, harga tembaga di 2021 ber-

potensi untuk terus menanjak mendekati

level US$ 10.000 per metrik ton.

Analis Central Capital Futures Wahyu

Tribowo Laksono mengungkapkan, bebe-

rapa sentimen menjadi kunci penguatan

harga tembaga di awal 2021, seperti

reflationary trade. Kondisi tersebut men-

cerminkan tren investasi, dimana pasar

mengejar aset-aset yang berkaitan dengan

pertumbuhan ekonomi dan inflasi.

Adapun dari sisi fundamental, penguatan

harga tembaga turut didukung faktor

suplai yang mengalami disrupsi akibat

pandemi Covid-19. Khususnya, terjadi

hambatan produksi di Cile yang juga salah

satu produsen tembaga terbesar di dunia.

Daily News Update Page 11

Meanwhile, demand from China shows an increase. Moreover, the Bamboo Curtain Country is also the largest copper consumer in the world, contributing around 50% of total global demand.

Another factor that keeps copper attractive and worthy of attention is the trend of electric vehicles (EV) and batteries in China, Europe and the US. As is well known, copper is one of the main complementary components of electric vehicles and batteries.

In the future, Wahyu views that there are several discourses that are still a concern for the drivers of copper prices. Among others, related to the Fed's policy on US inflation. Many parties predict that there will be a tapering stimulus or begin to reduce the amount of stimulus that is flushed. If that happens, there is an opportunity for the greenback to rebound and eventually hit commodity prices.

Wahyu assessed that this year the price of copper could still increase, although it may not be as strong as 2020. In addition, copper prices are currently considered to be priced in or in accordance with market predictions. Quoting Bloomberg, on Wednesday's trade (13/1) the price of copper rose 1.42 percent to US$ 7,975 per metric ton.

"For 2021, copper can still reach US$ 10,000 per metric ton, where the range for the first quarter of 2021 is in the range of US$ 7,000 per metric ton to US$ 9,000 per metric ton," Wahyu told Kontan.co.id, Wednesday (13/1).

He added that there is a chance that US dollar pressure will provide more room for copper to slide to the level of US$ 10,000 per metric ton this year. In addition, US inflation is also closely related to the outlook for commodity prices, followed by the bullish trend of gold and silver price patterns, which makes copper continue to follow this trend.

Sementara itu, demand atau permintaan dari China menunjukkan peningkatan. Apalagi Negeri Tirai Bambu juga merupakan konsu-men tembaga terbesar di dunia yang berkon-tribusi sekitar 50% dari total permintaan global.

Faktor lainnya yang menjadikan tembaga tetap menarik dan layak dilirik yakni tren electric vehicles (EV) dan baterai di China, Eropa, dan AS. Sebagaimana diketahui, tembaga merupakan salah satu komponen utama pelengkap kendaraan listrik dan baterai tersebut.

Ke depan, Wahyu memandang terdapat beberapa wacana yang masih jadi perhatian bagi penggerak harga tembaga. Antara lain terkait kebijakan The Fed terhadap inflasi AS. Banyak pihak yang memprediksi akan adanya tapering stimulus atau mulai mem-perkecil jumlah stimulus yang diguyur. Jika itu terjadi, ada peluang bagi greenback untuk rebound dan akhirnya menekan harga komoditas.

Wahyu menilai tahun ini harga tembaga masih bisa naik meski kemungkinan tidak akan sekuat 2020. Selain itu, harga tembaga saat ini dianggap sudah priced in atau sesuai dengan prediksi pasar. Mengutip Bloomberg, pada perdagangan Rabu (13/1) harga tembaga naik 1,42% ke level US$ 7.975 per metrik ton.

"Untuk 2021, tembaga masih bisa ke US$ 10.000 per metrik ton, dimana rentang untuk kuartal pertama 2021 di kisaran US$ 7.000 per metrik ton hingga US$ 9.000 per metrik ton," kata Wahyu kepada Kontan.co.id, Rabu (13/1).

Dia menambahkan, peluang tekanan dolar AS akan memberi ruang lebih banyak untuk tembaga meluncur ke level US$ 10.000 per metrik ton tahun ini. Ditambah lagi, inflasi AS juga erat kaitannya terhadap prospek harga komoditas, disusul tren pola harga emas dan perak masih bullish, yang mem-buat tembaga masih akan mengekor tren tersebut.

Daily News Update Page 12

"Apart from supply from China, environ-mental issues in the long term will still

support the price of copper. So both in the short and long term, as well as in terms of

supply and demand, copper will still be fundamentally positive," said Wahyu.

"Selain suplai dari China, isu lingkungan pun dalam jangka panjang masih akan men-

dukung harga tembaga. Jadi baik jangka pendek dan panjang, serta dilihat dari supply

dan demand secara fundamental tembaga masih akan positif," tandas Wahyu.

Demand from China Soars, Nickel Prices Close to a 5-Year

Record Lorenzo Anugrah Mahardhika

NICKEL prices scored a rebound and are

approaching their highest level in 5 years as demand from China increases. The

prospect of nickel prices is also reinforced by the trend in demand for electric

vehicles.

At the close of trading Tuesday (12/1/ 2021), the price of nickel on the London

Metal Exchange (LME) was observed to have risen to US$ 17,891 per ton. This

record is getting closer to the position of the highest nickel price in September 2019

at US$ 18,600 per ton.

As for the price level recorded last week,

nickel prices have risen 62 percent since falling to their lowest level in March 2020.

The drop in prices is due to China's economic growth being stunted due to the

corona virus pandemic.

Meanwhile, the rebound in nickel prices is bolstered by the prospect of China's

economic recovery. This encourages the level of demand for this commodity. The

rally in nickel prices is also supported by a better outlook for iron ore this year.

Permintaan dari China Melonjak, Harga Nikel Mepet

Rekor 5 Tahun Lorenzo Anugrah Mahardhika

HARGA nikel mencetak rebound dan men-

dekati level tertingginya dalam 5 tahun seiring dengan kenaikan permintaan dari

China. Prospek harga nikel juga diperkuat dengan tren permintaan kendaraan listrik.

Pada penutupan perdagangan Selasa (12/1/2021), harga nikel pada London

Metal Exchange (LME) terpantau sempat naik hingga US$17.891 per ton. Catatan ini

semakin dekat dengan posisi harga nikel tertinggi pada September 2019 sebesar

US$18.600 per ton.

Adapun level harga yang dicatatkan pada

pekan lalu membuat harga nikel telah naik 62 persen sejak jatuh pada level teren-

dahnya pada Maret 2020. Anjloknya harga disebabkan oleh pertumbuhan ekonomi

China yang terhambat karena pandemi virus corona.

Sementara itu, rebound harga nikel di-topang oleh prospek pemulihan ekonomi

China. Hal tersebut mendorong tingkat permintaan komoditas ini. Reli harga nikel

juga didukung oleh outlook komoditas bijih besi (iron ore) yang lebih baik pada

tahun ini.

Daily News Update Page 13

ED&F Man Capital Markets analyst Edward Meir said that nickel and copper are among the base metals that benefit the most amid the prospect of a recovery in current global macroeconomic conditions and green economic developments.

Moreover, after the US Congress approved the victory of the elected president, Joe Biden, which is believed to produce many environmentally friendly policies, including encouraging the penetration of electric vehicles.

The increased penetration of electric vehicles is a positive catalyst for nickel because this commodity is the main raw material for electric vehicle batteries, which are considered very efficient.

"Nickel and copper are among the commodities most utilized from the current macro prospect, and not to mention that in the long term nickel prices are strongly supported by their use as electric vehicle batteries," Meir was quoted as saying by Bloomberg. Editor: Rivki Maulana

Analis ED&F Man Capital Markets Edward Meir mengatakan bahwa nikel dan tembaga menjadi salah satu logam dasar yang mendapatkan keuntungan paling banyak di tengah prospek pemulihan kondisi makro ekonomi global saat ini dan perkembangan ekonomi hijau.

Apalagi, setelah Kongres AS mengesahkan kemenangan presiden terpilih, Joe Biden, yang diyakini akan membuahkan banyak kebijakan ramah lingkungan, termasuk mendorong penetrasi kendaraan listrik.

Peningkatan penetrasi kendaraan listrik menjadi katalis positif bagi nikel karena komoditas itu merupakan bahan baku utama baterai kendaraan listrik yang dinilai sangat efisien.

“Nikel dan tembaga adalah salah satu komoditas yang paling dimanfaatkan dari prospek makro saat ini, dan belum lagi secara jangka panjang harga nikel sangat didukung oleh penggunaannya sebagai baterai kendaraan listrik,” ujar Meir dikutip dari Bloomberg. Editor : Rivki Maulana

Indonesia Is Ready To Become A World Class Electric Car Battery

Manufacturer Heru Febrianto

INDONESIA is currently approaching a

number of major world-class battery and electric car players, starting with a company from China, namely Contem-porary Amperex Technology Co. Limited or CATL, the South Korean company LG Energy Solution, the Japanese company Panasonic, to the famous electric car company from the United States, Tesla.

Indonesia Siap Jadi Produsen Baterai Mobil Listrik Kelas

Dunia Heru Febrianto

INDONESIA kini tengah mendekati

sejumlah pemain utama baterai dan mobil listrik kelas dunia, mulai dari perusahaan asal China yakni Contemporary Amperex Technology Co. Limited atau CATL, per-usahaan Korea Selatan LG Energy Solution, perusahaan asal Jepang Panasonic, hingga perusahaan mobil listrik ternama asal Amerika Serikat Tesla.

Daily News Update Page 14

This is none other than to create an integrated electric vehicle industry from

upstream to downstream in the country. Thus, not only becomes a consumer, but

Indonesia is also part of the world's battery and electric vehicle producers.

Head of the Electric Vehicle/EV Battery Project Acceleration Team, Agus Tjahajana

Wirakusumah, said that to become the largest battery producer, steps that must

be taken are to find the largest markets.

Currently the largest markets for batteries are China, Europe and America. According

to him, if you want to become a global player, you must enter the markets of the

three countries. The way to get into this market is through cooperating with battery

players who sell to that market. "If we look at batteries, if we want to become global

players, we have to enter that market. If we want to enter that market, of course we

have to partner with battery players who sell to that market," he explained in

Jakarta, Wednesday (13/1/2021 ).

According to him, since the acceleration team was formed by the Minister of BUMN in February 2020, the team has made plans to select potential partners. At first, the team recognized 11 big battery players in the world. The criteria that the team sees to become partners are based on ability, track record, desire to invest, and brand.

"Of the 11 we can get out of six, and finally get the best three and then we communicate, namely with LG, Contem-porary Amperex Technology Co. Ltd (CATL) from China and we talk with Japan, with Panasonic," he said.

His party has realized that electric vehicles in Indonesia are currently not fast, it is very far from China. This market issue is also one of the considerations for potential investors to invest in the country.

Hal itu tak lain untuk mewujudkan industri kendaraan listrik terintegrasi dari hulu hingga hilir di Tanah Air. Dengan demikian, tak hanya menjadi konsumen, namun Indonesia juga menjadi bagian dari produsen baterai dan kendaraan listrik dunia. Ketua Tim Percepatan Proyek Baterai Kendaraan Listrik (Electric Vehicle/EV Battery), Agus Tjahajana Wirakusumah, mengatakan untuk menjadi produsen baterai terbesar, langkah yang harus diambil adalah mencari pasar-pasar terbesar.

Saat ini pasar terbesar untuk baterai adalah China, Eropa, dan Amerika. Menurutnya, jika ingin masuk menjadi pemain global, maka harus masuk ke pasar tiga negara tersebut. Cara untuk bisa masuk ke pasar tersebut yaitu melalui menggandeng pemain baterai yang menjual ke pasar tersebut. "Kalau kita lihat baterai, kita kalau mau jadi pemain global, ya harus masuk ke pasar itu. Kalau mau masuk ke pasar itu, tentu harus meng-gandeng pemain baterai yang menjual ke pasar itu," jelasnya di Jakarta, Rabu (13/1/ 2021).

Menurutnya, sejak tim percepatan dibentuk oleh Menteri BUMN pada Februari 2020 lalu, tim telah membuat perencanaan untuk memilih calon mitra. Mulanya tim mengenal ada 11 pemain baterai besar di dunia. Kriteria yang dilihat oleh tim untuk menjadi partner adalah berdasarkan kemampuan, rekam jejak, keinginan untuk investasi, dan mereknya.

"Dari 11 kita bisa keluar enam, dan akhirnya bisa mendapatkan tiga yang terbaik dan kemudian kita berkomunikasi, yaitu dengan LG, Contemporary Amperex Technology Co. Ltd (CATL) dari China dan kita berbincang-bincang dengan Jepang, dengan Panasonic," tuturnya.

Pihaknya sudah menyadari jika kendaraan listrik yang ada di Indonesia saat ini belum pesat, sangat jauh jika berkaca ke China. Perihal pasar ini juga menjadi salah satu pertimbangan calon investor untuk mau berinvestasi di Tanah Air.

Daily News Update Page 15

"Our partners see how big our market is here. The calculation in us, in the team, by looking at the projections made by the Ministry of Industry and the team itself that did the calculations, we see that it is not too big compared to China," he explained.

He said, based on calculations by the Ministry of Industry, it is projected that in 2025 there will only be around 400 thousand units of electric vehicles in Indonesia. According to him, thi s calculation is still considered small for an international battery manufacturer.

"Therefore, we must export the excess rather than the upstream capacity. So, there must be a balance capacity from upstream to downstream," he said.

The Indonesian government has signed a Memorandum of Understanding (MoU) with LG Energy Solution to build a battery factory worth US$ 9.8 billion or around Rp. 142 trillion last Friday (18/12/2020). Head of the Investment Coordinating Board (BKPM) Bahlil Lahadalia said that in January 2021, the BUMN consortium will sign the Heads of Agreement (HoA), following this MoU.

Agus said that the BUMN consortium that is part of the Holding Indonesia Battery led by MIND ID and PT Aneka Tambang Tbk, PT Pertamina (Persero) and PT PLN (Persero) is expected to cooperate with LG. "The four of us are very ready. Pak Erick's approval is out, we just have to see what our partners want. The shareholders already understand what to do from the legal document side," said Agus who is also the President Commissioner of PT Inalum ( Persero) or MIND ID.

Meanwhile, Minister of State-Owned Enterprises (BUMN) Erick Thohir said that his party would hold discussions with Tesla in February 2021 to develop cooperation in the development of the electric car industry in the country.

"Mitra kami melihat berapa besar market kami di sini. Hitungan yang ada di kami, di tim, dengan melihat proyeksi yang dilakukan oleh Kementerian Perindustrian dan tim sendiri yang lakukan perhitungan, kami melihat memang tidak terlalu besar sekali dibanding-kan dengan China," jelasnya.

Dia mengatakan, berdasarkan perhitungan Kementerian Perindustrian, diproyeksikan pada 2025 mendatang baru akan ada sekitar 400 ribu unit kendaraan listrik di Indonesia. Perhitungan ini menurutnya masih dianggap kecil bagi pabrik baterai berskala internasional. "Oleh karena itu, kita harus mengekspor kelebihan daripada kapasitas di hulu. Jadi, harus ada balance capacity dari hulu sampai hilir," tuturnya.

Pemerintah Indonesia sudah melakukan penandatanganan Nota Kesepahaman atau Memorandum of Understanding (MoU) dengan LG Energy Solution untuk membangun pabrik baterai senilai US$ 9,8 miliar atau sekitar Rp 142 triliun, Jumat (18/12/2020) lalu. Kepala Badan Koordinasi Penanaman Modal (BKPM) Bahlil Lahadalia sempat mengatakan pada Januari 2021 ini, akan dilakukan penanda-tanganan Heads of Agreement (HoA) oleh konsorsium BUMN, menyusul MoU ini.

Agus mengatakan, konsorsium BUMN yang tergabung dalam Holding Indonesia Battery yang dipimpin MIND ID beserta PT Aneka Tambang Tbk, PT Pertamina (Persero) dan PT PLN (Persero) ini diharapkan akan bekerja sama dengan LG. "Kami berempat sudah sangat siap. Persetujuan dari Pak Erick sudah keluar, tinggal nanti melihat mitra kita maunya seperti apa. Para pemegang saham sudah mengerti apa yang harus dilakukan dari sisi legal document-nya," tutur Agus yang juga merupakan Komisaris Utama PT Inalum (Persero) atau MIND ID.

Sementara itu, Menteri Badan Usaha Milik Negara (BUMN) Erick Thohir mengatakan pihaknya akan melakukan diskusi dengan Tesla pada Februari 2021 untuk mengembangkan kerja sama pembangunan industri mobil listrik di Tanah Air.

Daily News Update Page 16

According to him, this discussion is one of Indonesia's steps to become a major player

in the electric car industry. "God willing, in February, I will open talks with Tesla to

develop this cooperation," said Erick in his written statement. (nng)

Menurutnya, diskusi ini sebagai salah satu langkah RI menjadi pemain utama industri

mobil listrik. “Insya Allah, di bulan Februari ini, saya akan membuka pembicaraan dengan

Tesla untuk mengembangkan kerja sama ini," jelas Erick dalam keterangan tertulisnya. (nng)

Itochu to exit thermal coal business by 2024 Vanessa Zhou

ITOCHU Corporation plans to start divesting its thermal coal mining assets in Australia from

this year.

In a move towards decarbonisation, the trading company announced in 2019 that it planned

to divest its coal assets and not develop any new coal-fired power plants or purchase any

thermal coal mining plants.

The company has been in the Australian coal business for about 50 years and holds interests

in five coal projects.

These include a 15 per cent interest in the Whitehaven Coal-managed Maules Creek thermal

coal mine and a 10 per cent interest the Glencore-managed Ravensworth thermal and coking

coal project, which are located in New South Wales.

It also holds a 12.5 per cent interest in the Wandoan thermal coal joint venture (JV) project

with Glencore and SCAP Wandoan in Queensland, which operation has been on hold since

2013.

The decision to exit thermal coal was announced in Itochu’s outline of medium-term plan,

which will be effective until the 2024 financial year.

Itochu is also set to rename its non-ferrous & metal materials department to non-ferrous

metal & recycle department.

The company owns two other coking coal assets in Queensland (the Oaky Creek and Karin

greenfield joint ventures), and one coking coal project (the Suprabari Mapanindo in the

Kalimantan Island) in Indonesia.

Daily News Update Page 17

Rio Tinto warned Oyu Tolgoi plans could be scrapped Matthew Hall

THE GOVERNMENT of Mongolia is dissatisfied with progress and could potentially cancel

the development and financial plans for the Oyu Tolgoi copper-gold mine.

The underground extension at Oyu Tolgoi has long been an embattled project, touted by as one of the world’s largest copper-gold deposits but beset by delays, development struggles, and cost blow-outs that have led to tensions between the Government of Mongolia and operator Rio Tinto.

Oyu Tolgoi is operated by Rio Tinto via the multinational miner’s majority ownership of Turquoise Hill Resources, which in turn owns 66% of Oyu Tolgoi with the remaining stake held by the Mongolian state.

Open pit mining began at Oyu Tolgoi a decade ago, but Rio Tinto has long maintained that the bulk of the site’s value sits underground. In 2015, Rio Tinto and Turquoise Hill Resources signed a development and financing plan with the government, which provided the basis for the funding of the underground expansion. In 2016, the companies signed off on a $5.3bn development cost for the expansion but a revised estimate last year came in almost $1.5bn over the mark, with work towards production in 2022 now estimated to cost $6.75bn.

In an update, Turquoise Hill said the government had advised Rio Tinto of its dissatisfaction with the results of the company’s definitive estimate for the Oyu Tolgoi underground expansion, which revised the budget to $6.75bn. Rio Tinto said that increased estimate accounted for the known and forecast impacts of the Covid-19 pandemic, but the government has become concerned that rising development costs are eroding any economic benefit it would receive from the mine expansion. According to Turquoise Hill, “the Government of Mongolia has indicated that if the Oyu Tolgoi project is not economically beneficial to the country, it would be necessary to review and evaluate whether it can proceed”.

Mongolia had already set up a committee to conduct an independent review into the cost increases and delays at the Oyu Tolgoi project before Rio Tinto issued its definitive estimate, with the committee expected to report back in mid-2021 after evaluating the project management, mine planning, cost management, and other relevant areas.

This is far from the first time the country has cast doubts over the project’s benefits. The project has been politically divisive in the country, with nationalist politicians calling for the arrangement to be renegotiated to better favour Mongolia. Despite its 34% stake in the mine, the government has in the past borrowed from Rio Tinto to fund its share of development and construction costs – Mongolia will not receive its share of revenue from Oyu Tolgoi’s expansion until its debts are repaid to the company.

Rio Tinto’s concerns over its relationship with the Government of Mongolia were actually relieved in December 2019, when the country’s parliament unanimously reconfirmed the validity of all Oyu Tolgoi mine-related agreements that had been approved in the past decade.

Daily News Update Page 18

Rio Tinto said: “Rio Tinto has been informed by the Government of Mongolia that it may unilaterally terminate the Underground Development and Financing Plan (UDP). Rio Tinto and its partners have thus far invested over $11bn since 2010 based on the foundational agreements: IA, ARSHA, and UDP. Each of these agreements was managed with the Government of Mongolia and within the governance framework as agreed and accepted. Rio Tinto has been engaged with the Government in good faith in relation to the topics raised in Resolution 92 and remains open to improving the UDP to increase the benefits of Oyu Tolgoi to all shareholders.

“Oyu Tolgoi LLC, Rio Tinto and Turquoise Hill Resources are committed to working with the Government of Mongolia to ensure that [Oyu Tolgoi] remains on track for the next phase of its underground development, which unlocks the most valuable part of the project, and are continuing to evaluate all viable alternatives for a successful resolution of the outstanding issues with the Government of Mongolia.”

Turquoise Hill separately said that it is “committed to engaging immediately with the Government of Mongolia and Rio Tinto” to address issues around the Oyu Tolgoi development and finance plans with consideration to the economic benefits being adequately shared between all parties.

Oyu Tolgoi is expected to be the fourth largest copper mine in the world by 2030 and constitutes an important asset for Rio Tinto’s growth plans. But with Mongolia’s presidential election slated for June 2021, the tensions around Oyu Tolgoi’s delays and benefit to Mongolia’s economy could bring the issue back to the fore in Mongolian politics.

Whitehaven cautious of project spending Nickolas Zakharia

WHITEHAVEN Coal is wary of investing in its development projects due to turbulent coal

markets that have been amplified by Chinese restrictions on imports from Australia.

The company does not expect to make a final investment decision for its Narrabi Underground Mine Stage 3 Extension, Vickey Extension or Winchester South metallurgical coal projects in the 2021 financial year.

Whitehaven managing director and chief executive Paul Flynn said the company’s project expenditure would occur under its strict capital allocation framework, which would see greenfield projects constructed sequentially.

“We are continuing to progress our development pipeline but work is proceeding cautiously and in line with the company’s strict capital allocation framework,” he said.

Whitehaven has submitted environmental impact statements for both the Narrabi Stage 3 Extension project in New South Wales and the Winchester South project in Queensland, while supplying a maiden reserve statement of 350 million tonnes at Winchester South.

Daily News Update Page 19

The three development projects are aimed to bolster Whitehaven’s run-of-mine coal production in the next 10 years.

In the wake of China’s withdrawal from the Australian coal market, Whitehaven’s outlook suggests that local seaborne coal is being sold to India, Pakistan and the Middle East – markets that have historically traded to China.

Whitehaven also highlighted that demand for its product in India was growing as the company anticipated its sales volumes to return to pre-COVID levels in 2021.

Despite tensions looming, the company delivered a 64 per cent rise to its run-of mine production to 5.1 million tonnes during the December 2020 quarter, with its managed sale coal production up by 15 per cent to 3.9 million tonnes on the previous corresponding period.

Flynn said the company had tightened its guidance as a result of improved performance.

“Across our open cut operations we are seeing much more consistent and better performance across production and overburden management and our guidance range has tightened accordingly,” he said.

“During the latter part of the December quarter there was a strong rebound in pricing and we are increasingly optimistic that underlying market dynamics are supportive of continued improvement in this area.”

Whitehaven has reduced its 2021 financial year guidance for managed coal production from 21-22.8 million tonnes to 21-22.5 million tonnes.

China buying South African coal ‘could be game-changer but we shouldn’t be complacent’

By: Martin Creamer, Creamer Media Editor

NORMALLY, China does not import coal from South Africa, but 2021 has seen a shift.

Shipments to mainland China were reported on Monday by the African Source Markets’

Weekly Coal Index Report.

“It could be a game-changer but we shouldn’t be too complacent,” African Source Markets

CEO Bevan Jones said in response to Mining Weekly on Wednesday.

China’s power plants have been permitted to import coal from several countries without clearance restrictions, The Global Times of China has reported. This has resulted in 2021

starting on a bullish note for South African coal.

“I’m not sure how sustainable it is as a trend. Obviously, it’s on the back of the Australian ban.

Assuming that comes right, then the Australians will enjoy a competitive advantage once more, because of the freight rates.

Daily News Update Page 20

“The Chinese buyers have normally not really taken South African material and have typically tended to favour Australian coal. But they don’t seem to be too concerned when it comes to price, and it could be a game-changer for South African coal exports.

“In all honesty, all those Far East Asian markets are up for grabs. Whilst the South Africans are chasing the Chinese buyers, the Australians are chasing our existing Indian buyers. There’s fighting over various different market shares going on, so we shouldn’t be too complacent about it being all sunshine and roses because now there’s this wonderful new market. It’s putting pressure on our existing Indian, Pakistan and Sri Lankan markets as well,” Jones told Mining Weekly.

Exports of thermal coal to China were worth $4-billion to Australia in 2019 – and the combined export revenue received by Australia from China for both thermal coal and metallurgical coal in that year totalled $13.7-billion.

On the potential for Australia’s coal export loss to China becoming South Africa’s coal export gain, the coal team at Anglo American stated in a written response: “To some extent yes. China has been buying more Indonesian and Russian but several cargoes per month of South African have been reported sold to China for Q1.”

The Anglo team added, however, that trace elements were always an issue for importers, which excluded certain coals from being able to move to China: “Some South African coals can qualify but certainly trace elements remain a barrier to entry into the Chinese market.”

China last bought coal from South Africa in decent volumes in 2014. After that, import duties were applied and in 2015, trace element restrictions imposed, the Anglo team added.

These are the responses of XMP Consulting senior coal analyst Xavier Prevost to Mining Weekly’s questions:

Has Australia’s coal export loss to China become South Africa’s coal export gain?

After five to six years without any exports to China, last December, when a couple of shipments were sent to China, at the beginning of the ‘trade war’ between China and Australia, all said: 'We’re exporting to China again!' but since then, no more was exported, Why? I expect that although China needs to replace Australian imports with other coals, South Africa is not it their list of priorities. Our coals were banned from China some years back because they didn’t like our high chlorine and some of the trace elements. Last year shipments were probably an experiment to find out if we could replace, in part, Australian coal. We probably didn’t make the grade, so no more exports.

In 2019, Australia exported $4-billion worth of thermal coal to China. Does the current scenario point to that level of foreign exchange coming to South Africa and not Australia in 2021?

Definitely not! South African exports of about 72Mt in 2020, cannot, even if China accepts our coal, replace Australian exports, we don’t have enough tonnage and we don’t have the types of coal required. We could export thermal coal, but not metallurgical (coking) coal.

Which countries have replaced Australia as suppliers of metallurgical coal to China?

I think a number of countries; US, Russia and others.

Daily News Update Page 21

Is there a chance of South Africa also supplying metallurgical coal to China?

Never. We don’t have proper met coal in South Africa. Our best is Grootegeluk’s (Exxaro's) blend coking coal. All other coking coal producers are no longer operating. India buys our thermal low ash, high FC coal to use it in sponge iron production, therefore they call it ‘metallurgical’. China doesn’t need the same coal, they want straight coking coal.

The response of Richards Bay Coal Terminal (RBCT) was that it was not in a position to comment: “We’ll be releasing our annual data during January, which will show the geographical supply out of South Africa over the past 12 months. Any current changes would need to be provided by the coal exporters themselves, as to the trend,” RBCT added.

Data compiled by Refinitiv showed China’s imports from Australia to be a mere 447 523 t in December, the lowest since the global provider of financial market data started compiling vessel-tracking statistics and port particulars in January 2015.

In November, Bloomberg reported that more than 60 vessels carrying Australian coal had been refused permission to offload their cargo, and then in December, thermal coal exports to China from Australia's busiest coal terminal of Newcastle stopped completely.

Meanwhile, Reuters reports that demand is up owing to the colder-than-usual weather across much of north Asia as well as limited availability of spot cargoes of liquefied natural gas for gas-fired power generation.

Amid production woes, US coal deaths at historic low in 2020 By DYLAN LOVAN Associated Press

FIVE miners died in U.S. coal mines in 2020, an all-time low mark for an industry in a year

that saw continuing declines in production as electric providers move away from burning coal.

The federal Mine Safety and Health Administration, which tracks the deaths, said Wednesday there were 29 total deaths in all the nation’s mines, a sixth-straight year that total mine fatalities were kept below 30.

The previous low in yearly coal deaths was eight in 2016, and there were 12 last year. Workplace deaths in coal mines have remained low since 2014, the first year annual deaths were less than 20. Since then, the totals have exceeded 12 only twice. A century ago in 1920, the nation had more than 2,200 coal deaths, before machines replaced manpower underground.

Kentucky and West Virginia each had two coal mining deaths in 2020, and there was one in Pennsylvania. The death of a coal miner on the job in Pennsylvania in February was attributed to natural causes and did not count as a mining-related accident.

Coal production has declined steadily over the last decade, as dozens of coal-fired power plants have shuttered. There are no new coal power plants being built in the U.S.

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For the quarter from April to June in 2020, U.S. coal mines produced about 115 million tons, compared to nearly 180 million tons over the same time in 2019, a drop of 36%. The nation's power plants consumed 30% less coal in the first half of 2020, according to the federal Energy Information Administration.

The EIA said about 70 percent of new electric generating capacity going online in 2021 will come from solar and wind sources.

David Zatezalo, the U.S. federal mine safety chief, said officials focused on reducing mining accidents related to the use of vehicles and conveyor belts across all mines, which include coal, metal and non-metal mining operations.

“We also focused on chronic problem areas, such as disproportionate accidents among contractors and inexperienced miners," Zatezalo said in a release. He said those deaths were reduced by 13% in 2020 compared to the year before.

MSHA said 2020 was also the first year in its history that it recorded no seatbelt-related deaths at mining sites. Zatezalo said MSHA inspectors issued 195 citations in 2020 for sanitary conditions related to the COVID-19 pandemic.

Last year, coal mining giant Murray Energy, once the nation's largest privately owned coal operator, filed for bankruptcy. And the Tennessee Valley Authority's Paradise Plant in western Kentucky burned its last load of coal in February, despite opposition to its closing from President Donald Trump and top Kentucky lawmakers.