PT Trimegah Bangun Persada Tbk (NCKL), also known as Harita Nickel, and PT Timah Tbk (TINS) are projected to be two promising metal issuers in the industry, driven by operational strengthening at NCKL and the declining tin ore exports from Myanmar to China, which benefits TINS.BRI Danareksa Sekuritas analysts Timoty Wijaya and Christian Sitorus predict that NCKL's performance during the first nine months of this year will remain robust, despite the slowdown in China’s industrial and manufacturing activities. NCKL's resilience is supported by a 3% quarter-on-quarter increase in the price of nickel pig iron (NPI), or low-grade ferronickel.In addition to this, NCKL’s solid performance is further reinforced by its sales of limonite to PT Obi Nickel Cobalt (ONC), which have been ongoing from May to August 2024. The two analysts estimate that NCKL’s nine-month performance in 2024 will generate profits of Rp 4.5 trillion, representing approximately 85% to 86% of consensus expectations."Therefore, we maintain an overweight rating on the metals sector. NCKL remains our top pick in the nickel category due to its strong operational performance and solid profit visibility," wrote Timothy and Christian in their recently published research.NCKL’s operational strength is already reflected in its performance during the first half of 2024, with Harita Nickel producing 63,414 tons of nickel in FeNi, exceeding its production capacity. Similarly, the production of Mixed Hydroxide Precipitate (MHP) nickel reached 38,334 tons, a 28% increase compared to the same period last year.Nevertheless, Timothy and Christian caution market participants about the potential for a temporary correction in NPI prices toward the end of the year, as restocking demand for NPI has decreased."We estimate that the NPI benchmark price will remain within the range of USD 11,500 to USD 12,000 per ton," the analysts noted.Commenting on NCKL’s projected performance, Harita Nickel’s Director of Health, Safety, and Environment (HSE), Tonny H. Gultom, stated that the company’s performance is progressing smoothly and on track, aligned with its previously set targets.This year, the company, listed under the NCKL ticker symbol, aims to produce 120,000 tons of nickel per year in MHP and 120,000 tons of nickel per year in FeNi. "We hope that everything continues to run smoothly until the end of the year," Tonny briefly told Investor Daily on Tuesday (October 15, 2024).TINS is equally noteworthy, with Timothy and Christian projecting it as another promising metal issuer due to increased production. "We anticipate TINS' profitability will rise, driven by operational cost efficiency from the Top Submerge Lance (TSL) Ausmelt smelter technology," the two analysts explained.Additionally, they forecast a 5 kiloton, or 5%, quarter-on-quarter increase in TINS' sales volume, which should start reflecting in the third quarter of 2024. "We favor TINS, as tin ore exports from Myanmar to China are decreasing, causing global supply constraints," they added.It is important to note that China is one of the largest export markets for metals globally, with its industrial and manufacturing activities surging. The country has even introduced a stimulus package aimed at boosting economic growth, addressing the slowdown, and maintaining stability.According to the Executive Director of the Center for Energy and Mining Law Studies, Bisman Bakhtiar, the stimulus package reflects the Chinese government’s serious efforts to bolster its economy and industrial performance.“As a result, this will positively impact the demand for several Indonesian mining commodities that have been supplying China,” Bisman told Investor Daily on Tuesday (October 15, 2024).In other parts, Harita Nickel is targeting a 300 megawatt-peak (MWp) Rooftop Solar Power Plant (PLTS) megaproject worth IDR 6.84 trillion to be completed next year. The project is touted as NCKL's biggest initiative in supporting Indonesia's clean energy transition.“This rooftop solar project is part of our efforts to reduce carbon emissions, in line with Indonesia's target to achieve Net Zero Emission (NZE) by 2060,” NCKL Head of Investor Relations Lukito Kurniawan Gozali explained.Lukito explained that NCKL is working on the project in two stages. The first involves the construction of a rooftop solar power plant with a capacity of 40 MWp, which is targeted to be completed by the end of 2024. Meanwhile, the second phase of construction will expand the capacity to 260 MWp by 2025.This project also marks NCKL's significant shift from using conventional energy to renewable energy in the company's operations. Because, until now, Harita Nickel still relies on coal-fired power plants (PLTU) to support operational activities in the mining and downstream sectors.

PT Bumi Resources Tbk (BUMI) is currently conducting a study on coal downstreaming, with targeted products being methanol or ammonia.Bumi Resources Director, Rio Supin, stated that the company has signed a strategic partnership agreement with a new investor following the exit of Air Products & Chemical Inc (APCI) from the coal gasification project with its subsidiary, PT Kaltim Prima Coal (KPC).However, Rio did not provide full details about the new investor's name or country of origin in the coal downstreaming project."We signed the strategic agreement last year as a replacement for APCI. APCI withdrew, and we have a new replacement," Rio said in South Jakarta, quoted on Tuesday (15/9/2024).Rio mentioned that Bumi Resources is finalizing plans for the coal downstreaming industry, aiming to complete the study by 2025.Market ShareAccording to Rio, although the feasibility study (FS) has been completed, the company continues to assess market dynamics to determine which downstream product to focus on.BUMI notes that other coal mining companies with special mining licenses (IUPK) as extensions of the Coal Mining Work Agreement (PKP2B) are also producing similar downstream products, such as methanol.“If everyone produces methanol, what's the demand in Indonesia? If everyone produces methanol, where will it go? What's the market?” he asked.He added that coal-based methanol faces challenges competing in foreign markets due to its higher capital expenditure (capex) requirements compared to methanol production from natural gas.BUMI would have to invest heavily in infrastructure, including logistics and power plants, to produce methanol from coal.Aside from methanol, BUMI is also exploring ammonia production, which is more export-oriented. This product has a large market, especially if Japan succeeds in using ammonia in its power plants.However, BUMI faces the dilemma of whether Japan will accept grey ammonia from Indonesia, which still generates carbon emissions.“If current products lack CCUS (Carbon Capture, Utilization, and Storage) and green energy linkage, they will be considered grey products,” Rio explained.“Grey products might survive temporarily, but when regulations mandate blue and green ammonia, it will be challenging. Our industry is still young, and when the plant hasn’t yet paid off, debt isn’t repaid, and we haven’t reached the break-even point, it will be hard to compete when new regulations emerge.”0% Royalty AssuranceDuring the discussion, BUMI also raised the issue of 0% coal royalty for companies engaging in downstreaming activities.“The 0% coal royalty law exists, but further regulations on how to obtain it haven’t been issued,” Rio added.This regulation is included in Government Regulation in Lieu of Law (Perpu) No. 2 of 2022 on Job Creation.Article 128A Paragraph 2 of the law stipulates that special treatment for state revenue obligations related to coal development and/or utilization activities can include a 0% royalty.

What’s going on here?Sumitomo Metal Mining forecasts a nickel surplus by 2025, as Indonesia boosts its nickel pig iron production to reach new levels.What does this mean?Indonesia is fast-tracking its nickel pig iron production by 11.3%, hitting 1.67 million tons, contributing to an expected supply surplus in the nickel market. Global nickel demand is projected to grow by 7.1% to 3.55 million tons, yet supply might exceed demand with a 7.4% increase to 3.65 million tons. This surplus largely stems from Indonesia's new smelters, boosting the Class 1 nickel supply. Nickel is crucial for stainless steel and electric vehicle (EV) batteries, underscoring its role in the electric energy transition. Sumitomo, supplying materials for Panasonic, helps Tesla with battery production. However, challenges in the EV market outside China could temper nickel demand growth.Why should I care?For markets: A surplus of opportunity or caution.The upcoming nickel surplus could lead to more volatile prices, affecting investment strategies in commodities and related industries. Since nickel is essential for EV batteries and stainless steel, this surplus presents both risks and opportunities, especially for stakeholders in these sectors. Investors should watch the shifting dynamics and demand trends, particularly as the EV market outside China faces possible challenges.The bigger picture: Balancing growth and innovation.The interaction between rising nickel supply and the growing demand from EV production marks a vital stage in the global energy shift. As nations push for greener solutions, how the market adapts to these supply dynamics will shape long-term energy policies and economic strategies related to sustainable technology innovation. Indonesia's role is increasingly crucial, possibly reshaping global supply chains and economic alliances in metal commodities.

PT Vale Indonesia Tbk has set a target to achieve Net Zero Emission (NZE) by 2050, implementing various steps to meet this goal.Chief Sustainability and Corporate Affairs Officer of Vale Indonesia, Bernardus Irmanto, stated that one of the efforts is reducing CO2 emissions in Sorowako, South Sulawesi, by 33 percent by 2030."When we talk about technology and all partnerships for new projects, we all share the same goal of achieving net zero by 2050," said Bernardus during a presentation at the second day of the Investor Daily Summit held at the Jakarta Convention Center (JCC) Senayan on Wednesday, October 9, 2024.In addition to this, Vale Indonesia is committed to maintaining and even enhancing its use of lower-energy technologies in its new projects.Moreover, to support the target for renewable energy (EBT) mix, PT Vale Indonesia Tbk, as a member of the state-owned mining holding (MIND ID), has been a pioneer in renewable energy usage since the 1970s. Vale has also constructed hydroelectric power plants (PLTA)."Currently, we operate three hydroelectric power plants in Sorowako with a green energy capacity of around 365 megawatts. The four smelting furnaces operated by Vale are 100 percent powered by hydropower," he explained.According to Bernardus, this is what makes PT Vale's plant in Sorowako have the lowest carbon emissions in Indonesia, earning recognition from various parties.Thus, PT Vale Indonesia Tbk continues to develop a roadmap to meet its goals and responsibilities.

The Indonesian State-Owned Enterprises (SOE) Mining Holding, MIND ID, is committed to driving mineral downstreaming to boost the manufacturing sector.Corporate Secretary of MIND ID, Heri Yusuf, at the 2024 Trade Expo Indonesia (TEI), stated that as a strategic active holding, MIND ID has orchestrated all its members to maximize the value of coal and mineral commodities through downstreaming programs.According to him, the mineral industry has successfully implemented downstreaming programs that make Indonesian minerals more readily usable across various manufacturing industries in the country.Heri expressed his hope that a stronger absorption of minerals by the manufacturing industry would further increase the value-added benefits."This 2024 Trade Expo Indonesia is a good moment. We hope that a strong connection between the mineral and manufacturing industries and end users can be realized. Together, we can provide greater benefits for Indonesia's future," said Heri in a press release on Thursday, October 10.Heri highlighted that the MIND ID Group, through the consortium of PT Aneka Tambang Tbk and PT Indonesia Asahan Aluminium (Inalum), known as the Smelter Grade Alumina Refinery (SGAR), has succeeded in producing alumina domestically.This alumina will then be processed into aluminum, with domestic demand reaching 1 million tons per year.Additionally, MIND ID Group, through PT Freeport Indonesia (PTFI), has also started operating its copper concentrate smelter in the Gresik Java Integrated Industrial and Ports Estate (JIIPE) Special Economic Zone (KEK) in East Java.This project processes 1.7 million tons of copper concentrate from Papua and produces 650,000 tons of copper cathode, 50 tons of gold, and 210 tons of silver, which can be utilized across various industries in Indonesia.Heri also noted that MIND ID, through PT Bukit Asam Tbk, is taking coal downstreaming more seriously, particularly the coal gasification project, which converts coal into dimethyl ether (DME) domestically.This strategic initiative will enable coal to be converted into gas and subsequently transformed into various products based on industrial needs.Heri emphasized that strong integration between the mineral sector and the manufacturing industry will create a significant economic multiplier effect.Moreover, Indonesia could reduce its dependence on raw material imports, which deplete foreign exchange reserves."We hope to see new partners emerge as offtakers for our raw materials domestically. If industrialization takes place within the country, the creation of jobs, GDP growth, and other economic benefits will be extraordinary," concluded Heri.

PT Putra Perkasa Abadi (PPA) received the prestigious Subroto Award 2024 from the Ministry of Energy and Mineral Resources (ESDM) on Thursday, October 10, 2024.The Subroto Award is the highest accolade in the energy and mineral resources sector, presented by the Ministry of ESDM to stakeholders who have demonstrated outstanding performance in advancing the sector.Putra Perkasa Abadi reaffirmed its commitment to operational safety through a principle it has upheld for over two decades, known as "Safe & Strong Operational Performance." This slogan is supported by an "unlimited budget for safety" policy, underscoring PPA's dedication to creating a safe working environment and innovating mining safety technologies.At the event, President Joko Widodo and Minister of Energy and Mineral Resources Bahlil Lahadalia were present to inaugurate the prestigious awards for Indonesia's energy and mineral resources sector."PPA highly values the health and safety of its workers, with the highest accident statistics in mining being related to moving objects (vehicles). Therefore, PPA developed technology to enhance worker safety, in line with our tagline, 'Safe and Strong Operational Performance,'" said PPA President Director Joko Triraharjo after receiving the award.PPA won the Subroto Award in the Mining Safety, Technical, and Environmental Protection category, specifically for Technical and Environmental Innovation in Mining, with the Mining Safety category for Mining Services Companies, through its innovation in heavy equipment safety called Pre-Collision Prevention Drive Assist (PRECISE).PRECISE is a technology installed on heavy equipment to detect obstacles and calculate their distance while the unit is operating. The system allows the equipment to automatically reduce speed and brake, effectively preventing accidents."This Subroto Award is a source of pride for the entire PPA Group, and in the future, we will continue to enhance our technological innovations in mining safety. We also hope that the innovations we have developed can be adopted by other companies to create a safer working environment," Joko added.This award adds to PPA's achievements at the Good Mining Practice (GMP) Award, organized by the Directorate General of Mineral and Coal in late September.PPA secured four Aditama (gold) awards for its sites at Adaro Indonesia, MLP, Bukit Asam, and Borneo Indobara. This achievement makes PPA the first Mining Services Company to win the "Best of the Best" trophy in the category of Standardization and Mining Services Management for three consecutive years from the Ministry of Energy and Mineral Resources (ESDM).

PT Petrindo Jaya Kreasi Tbk has taken a significant step in acquiring PT Petrosea Tbk as the former’s integration strategy in the mining sector.Petrindo is hoping that the acquisition can cement its position as a mining company that is well-integrated from the upstream to the downstream sectors. According to PT Petrindo Jaya Kreasi Tbk’s chief financial officer Kartika Hendrawan, Petrosea -- which is also a mining contractor -- will strengthen the mining infrastructures under Petrindo.“This acquisition makes Petrindo not only as a mine owner, but the company will have the capacity to carry out the mining activities and provide the necessary infrastructures,” Kartika Hendrawan said at the 2024 BNI Investor Daily Summit in Jakarta on Tuesday.The 2024 BNI Investor Daily Summit is a two-day event taking place on Oct. 8-9 at the Jakarta Convention Center (JCC). Kartika was a panelist at one of the summit’s sessions titled “The Future of Mining: Driving Efficiency and Sustainability through Technology”.The 2024 BNI Investor Daily Summit is supported by BNI, Astra, Chandra Asri Group, Freeport, Pupuk Indonesia, Pluang, PIK 2, Petrindo Jaya Kreasi, Petrosea, APRIL, Vale, AWS-ViBiCloud, Inalum, Huawei, Ambeven, Sritex, Pelindo, Bukit Asam, Ambeven, Huawei, and Telkom Indonesia.

PT Aneka Tambang Tbk (ANTM) is now focusing on several downstream projects following the first bauxite injection at the Smelter Grade Alumina Refinery (SGAR) in Mempawah.Corporate Secretary Syarif Faisal Alkadrie stated that the first bauxite injection on September 24, 2024, has further strengthened ANTAM's position in the national aluminum supply chain.He also mentioned that ANTAM is currently overseeing other downstream projects for nickel commodities and the development of the electric vehicle (EV) battery ecosystem."Regarding the FeNi Haltim project, ANTAM is currently exploring alternatives to continue the commissioning process of the Feronickel Haltim Plant in North Maluku to ensure production stability before commercial operations," Faisal told Kontan on Thursday, October 10.Faisal explained that once fully operational, the plant will have a production capacity of 13,500 TNi.As for the development of the EV battery ecosystem in Indonesia, ANTAM and its strategic partners are committed to accelerating the achievement of milestones in line with the company's 2024 targets.Kontan noted that one of ANTAM's ongoing strategic projects is the nickel downstream project in Buli, East Halmahera.This project involves an international consortium of CBL (CATL, Brunp, Lygend) and includes the construction of various facilities, such as nickel ore mines, a Rotary Kiln-Electric Furnace (RKEF) plant, a High Pressure Acid Leach (HPAL) plant, as well as material and battery recycling plants.Significant progress has been made in this project. As of June 2024, the RKEF project is in the pre-EPC (Engineering, Procurement, and Construction) and Pre-Project Financing stages.Meanwhile, the HPAL project is in the process of forming a joint venture.The RKEF plant is expected to start operations in 2027, while the HPAL plant is targeted to begin operations a year later, in 2028.

Indonesian officials have emphasized the importance of developing downstream industries, particularly in electric vehicle (EV) battery production, to enhance the country's economic value.Speaking at the inauguration of PT BLM Energi Baru Indonesia’s Lithium Iron Phosphate (LFP) battery manufacturing plant in the Kendal Industrial Park, Central Java, on Tuesday, Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan highlighted that focusing resources on downstream industrial development is a directive from President Joko Widodo.One of the key policies driving this initiative was the cessation of raw material exports, aimed at building economic value within the nation, he said.According to the minister, the LFP battery plant is a strategic investment collaboration between Indonesia’s Investment Authority (INA) and China’s Changzhou Liyuan New Energy Technology Co., Ltd., a leading global LFP battery producer. This partnership aims to meet the growing global demand for LFP batteries, fueled by the rapid expansion of electric vehicle usage worldwide.Luhut further explained that the LFP plant represents a cornerstone of Indonesia's integrated EV ecosystem. By completing the lithium battery production chain, Indonesia will be able to meet the demand for lithium batteries for up to three million EVs globally.INA chairman Ridha Wirakusumah also highlighted the rapidly increasing demand for LFP batteries due to the global transition to EVs and renewable energy, presenting a significant opportunity for Indonesia. By building strong production capacity, the country will be well-positioned to supply the rising demand for LFP cathode materials in the future.

Coal exports from Indonesia have been growing this year, with China ramping up its imports. In its latest weekly report, shipbroker Banchero Costa said that “global coal trade has really picked up pace over the past year, and is now fully back to pre-Covid levels. In Jan-Aug 2024 the positive trend continued, with global coal loadings increasing by +2.5% y-o-y to 900.7 mln t, from 879.0 mln t in the same period last year, based on vessel tracking data from AXS Marine. In Jan-Aug 2024, exports from Indonesia increased by +8.3% y-o-y to 345.3 mln t, whilst from Australia were up +3.3% y-o-y to 232.6 mln t. From Russia exports declined by -14.1% y-o-y to 110.7 mln t in JanAug 2024, from the USA increased by +6.0% y-o-y to 59.4 mln t, from South Africa declined -4.1% y-o-y to 38.9 mln t. Shipments from Colombia increased by +12.0% y-o-y to 39.6 mln t in JanAug 2024, from Canada down by -0.3% y-o-y to 32.6 mln t, and from Mozambique were down by -11.2% y-o-y to 14.0 mln t.”Source: Banchero CostaAccording to Banchero Costa, “seaborne coal imports into Mainland China increased by +11.6% y-o-y to 267.8 mln t in Jan-Aug 2024, to India increased by +9.5% y-o-y to 165.6 mln t, to Japan declined by -7.3% yo-y to 100.5 mln t in Jan-Aug 2024. Shipments to South Korea declined by -6.4% y-o-y to 75.2 mln t, to Vietnam surged by +24.9% y-o-y to 40.1 mln t, to the EU down -38.2% yo-y to 39.9 mln tonnes, to Taiwan declined by -3.9% y-o-y to 38.4 mln tonnes in Jan-Aug 2024. Indonesia is the world’s largest seaborne exporter of coal, accounting for 38.3% of the global seaborne coal market so far in 2024”.It added that “export volumes from Indonesia were relatively depressed during 2020 and 2021, due to disruption from Covid19 and from government policies favouring domestic consumption, but bounced back to an all-time record high in 2022, and continued to grow further in 2023. Total seaborne coal exports from Indonesia in 2022 reached 448.8 mln tonnes, +7.9% y-o-y, according to AXS Marine vessel tracking data. In 2023, coal exports from Indonesia increased further by +10.2% y-o-y to 494.6 mln tonnes.Source: Banchero CostaThe vast majority of Indonesian coal exports are loaded in East Kalimantan and South Kalimantan (the island of Borneo), with some volumes also shipped from southern Sumatra island. The main coal export terminals in Indonesia are: Taboneo/ Banjarmasin (66.5 mln t loaded in Jan-Aug 2024), Tanjung Bara (28.3 mln t), Muara Banyuasin (25.5 mln t), Muara Berau (24.8 mln t), Balikpapan (24.8 mln t), Muara Pantai (24.3 mln t), Samarinda (21.0 mln t), Bunati (19.6 mln t), Adang Bay (13.3 mln t), Senipah Terminal (13.3 mln t), Tanjung Pemancingan (11.5 mln t), Muara Satui (9.1 mln t), Sangkulirang (9.0 mln t). The majority (49%) of coal volumes from Indonesia in 2023 were loaded on Panamax vessels, with 31% on Supramax vessels, 11% on PostPanamax, and just 8% on Capesize tonnage”.The shipbroker added that “China continues to be the top importer of Indonesian seaborne coal exports, accounting for 41.3% of shipments in Jan-Aug 2024. In Jan-Aug 2024, shipments from Indonesia to China increased by +5.4% at 142.8 mln tonnes, following a +47.9% y-o-y surge in the same period of last year. About 21.4% of exports, or 74.0 mln tonnes in Jan-Aug 2024, were shipped to India, representing a rebound of +20.7% y-o-y.However, this follows a -22.3% y-o-y decline in the same period of last year. Shipments to the Philippines have also increased by +8.6% y-o-y to 25.4 mln tonnes in Jan-Aug 2024, with the Philippines accounting for 7.4% of Indonesian exports. Exports to Japan increased by +6.4% y-o-y in Jan-Aug 2024 to 17.9 mln t, with Japan accounting for 5.2%. South Korea imported 17.2 mln t of coal from Indonesia in Jan-Aug 2024, up +2.6% y-o-y. Malaysia received 16.1 mln tonnes, down -6.5% y-o-y. Last but not least, exports to Vietnam surged by +37.3% y-o-y to 16.2 mln t in Jan-Aug 2024”, Banchero Costa concluded.