September 16, 2020 Read More →

Nine of 10 Indonesian coal companies losing money

Focus Malaysia:

ACCORDING the Institute for Energy Economics and Financial Analysis (IEEFA), the Indonesian government must let the market decide the future for financially broken coal companies wishing to avoid payments of much-needed royalties and loans, since only one leading coal company is able to make profits.

Exacerbated by Covid-19, coal prices have dropped about 52% in five months and Indonesia’s coal export markets including China and India are slashing imports and increasingly turning to domestic sources to bolster energy security.

“The Indonesian coal industry is in trouble structurally and financially, with companies now struggling to break even,” financial analyst Ghee Peh said.

Peh, also the author of the report ‘No Bailout, Don’t Throw Good Money After Bad’, added that only one of the 11 listed Indonesian coal companies that were reviewed is at cash breakeven or better, with the current coal benchmark price of US$47 per tonne. 

[Staff Report]

More: One out of 10 Indonesian coal companies profitable, while others in the red

Posted in: IEEFA In the News

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