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Decade-high coal prices drive strong H1 mining performance
Indonesian coal miners have booked either a profit increase or a reversal of last year's losses in strong first-half performance on the back of high prices due to increased demand as economies reopen and supply pressure amid the China-Australia trade spat.
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Backhoes operate at the Binungan open-pit coal mine belonging to PT Berau Coal in East Kalimantan, in this 2020 file photo. (JP/Indra Harsaputra )
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ecord-high coal prices have helped Indonesian miners post strong results in the first half of the year, giving rise to market optimism as economies around the world begin to reopen following the easing of COVID-19 restrictions.
Newcastle coal futures, the benchmark for thermal coal in the Asia-Pacific, was trading on Wednesday at US$177 per ton, just below a decade high reached a few days earlier, and up 267 percent from last year’s prices, according to financial markets platform Investing.com.
Indonesian mining companies posted stronger financial performances in the first half of 2021, including publicly listed PT Adaro Energy and state-owned PT Bukit Asam. Adaro Energy reported 9.6 percent year-on-year (yoy) growth in net profit to nearly $170 million, while Bukit Asam saw its net profit rise a whopping 38.01 percent yoy to Rp 1.77 trillion ($124.92 million).
“This is in part due to the success of the management in seizing the opportunity of surging [prices], be it Newcastle or the [Indonesian Coal Index 3], which reached the highest levels in 10 to 13 years,” Farida Thamrin, Bukit Asam’s director of finance and risk management, told an online press conference on Monday.
The prices of coal and other commodities have been on an upward trend as China and other countries reopen following pandemic lockdowns, leading to a surge in demand for many commodities.
Read also: Indonesian coal price hits decade high
Farida said Bukit Asam’s coal exports to China grew ninefold and exports to the Philippines fivefold in the first half of the year compared to a year earlier.
