Indonesia’s coal suppliers

Vote Discussion

@CoaltransEvents #CoaltransAsia
Q1. Which of the following best describes
your occupation?
1. I work for a coal producer;

2. I work for a coal buyer;

3. I work for a trading company;

4. I work for a shipping company

5. I work for a services company

(surveyor, mining contactor etc)

6. I work somewhere else

@CoaltransEvents #CoaltransAsia
 Vote now 0

Q1. Which of the following best describes

your occupation?
1. I work for a coal producer; 1 21.4%

2. I work for a coal buyer; 2 28.6%

3. I work for a trading company;

3 12.5%

4. I work for a shipping company

4 3.6%

5. I work for a services company

5 12.5%
(surveyor, mining contactor etc)

6 21.4%
6. I work somewhere else

@CoaltransEvents #CoaltransAsia
Q2. Have we reached the floor price for
thermal coal?
1. No. Prices will continue to fall because suppliers
continue to increase production to lower their
marginal costs;

2. Yes. China will return to the market for winter

stock-build and prices will increase;

3. No, but soon. A major weather event globally is

inevitable and this will see prices rally;

4. No, but soon. Prices will remain depressed

forcing supply cuts preventing further price falls

@CoaltransEvents #CoaltransAsia
 Vote now 0

Q2. Have we reached the floor price for

thermal coal?
1. No. Prices will continue to fall because suppliers 1 40.3%
continue to increase production to lower their
marginal costs;
2 14.5%
2. Yes. China will return to the market for winter
stock-build and prices will increase;

3. No, but soon. A major weather event globally is 3 3.2%

inevitable and this will see prices rally;

4. No, but soon. Prices will remain depressed 4 41.9%

forcing supply cuts preventing further price falls

@CoaltransEvents #CoaltransAsia
Q3. How low can Pacific thermal coal prices fall in
CY2014 (all basis globalCOAL Newcastle Index):

1. US$60/mt;
2. US$65/mt;
3. US$70/mt;
4. US$75/mt;
5. Lower than US$60/mt

@CoaltransEvents #CoaltransAsia
 Vote now 0

Q3. How low can Pacific thermal coal prices fall in

CY2014 (all basis globalCOAL Newcastle Index):

1. US$60/mt; 1 11.1%

2. US$65/mt; 2 31.9%

3. US$70/mt;
3 41.7%
4. US$75/mt;
5. Lower than US$60/mt 4 6.9%

5 8.3%

@CoaltransEvents #CoaltransAsia
Q4. Do you think Indonesian mining companies still
have room to reduce costs?
1. Yes, plenty. By increasing efficiency, renegotiating rates
with contractors / service providers and cutting down
strip ratios further;

2. Yes, very slightly. Contractors / service providers still

have margins which can be reduced as an alternative to
the mines closing down;

3. No, cutting strip ratios further would significantly reduce

life of mines and contractors/ service providers cannot
reduce rates any further;

4. Not sure. Everyone seems to be lying about their costs

as they keep reducing prices and increasing production.

@CoaltransEvents #CoaltransAsia
 Vote now 0

Q4. Do you think Indonesian mining companies still

have room to reduce costs?
1. Yes, plenty. By increasing efficiency, renegotiating rates
with contractors / service providers and cutting down 1 18.7%
strip ratios further;

2. Yes, very slightly. Contractors / service providers still

2 34.7%
have margins which can be reduced as an alternative to
the mines closing down;

3. No, cutting strip ratios further would significantly reduce 3 21.3%

life of mines and contractors/ service providers cannot
reduce rates any further;

4. Not sure. Everyone seems to be lying about their costs 4 25.3%

as they keep reducing prices and increasing production.

@CoaltransEvents #CoaltransAsia
Q5. Should Indonesian coal producers be concerned
about Australian producers' take or pay obligations ?
1. It is not an issue because Indonesia and Australian
supplies are independent of each other;

2. Australian suppliers produce predominantly a high

CV coal product while Indonesian quality is falling. It
is irrelevant;

3. This is the key issue preventing supply /demand

fundamentals from reacting to price;

4. I’m only concerned about my company and don’t

care what others do.

@CoaltransEvents #CoaltransAsia
 Vote now 0

Q5. Should Indonesian coal producers be concerned

about Australian producers' take or pay obligations ?
1. It is not an issue because Indonesia and Australian
supplies are independent of each other; 1 19.7%

2. Australian suppliers produce predominantly a high

CV coal product while Indonesian quality is falling. It 2 28.9%
is irrelevant;

3. This is the key issue preventing supply /demand 3 43.4%

fundamentals from reacting to price;

4. I’m only concerned about my company and don’t

care what others do. 4 7.9%

@CoaltransEvents #CoaltransAsia
Q6. What will happen to Chinese domestic prices over
the next 3 months (as measured by the Bohai-Rim
Steam-Coal Price Index)?
1. Prices will increase steeply (by more than RMB20/mt)
due to rising domestic demand and reduced supply due
to small mine closures;

2. Prices will fall (by more than RMB20/mt) due to

continuing excess domestic supply and competition from
imports;

3. Prices will remain stable within a +/-RMB10/mt range;

4. I have no idea. Domestic prices depend upon Shenhua.

Nobody understands Shenhua's policies.

@CoaltransEvents #CoaltransAsia
 Vote now 0

Q6. What will happen to Chinese domestic prices over

the next 3 months (as measured by the Bohai-Rim
Steam-Coal Price Index)?
1. Prices will increase steeply (by more than RMB20/mt)
due to rising domestic demand and reduced supply due 1 7.1%
to small mine closures;

2. Prices will fall (by more than RMB20/mt) due to 2 30.4%

continuing excess domestic supply and competition from
imports;
3 26.8%
3. Prices will remain stable within a +/-RMB10/mt range;

4. I have no idea. Domestic prices depend upon Shenhua.

Nobody understands Shenhua's policies. 4 35.7%

@CoaltransEvents #CoaltransAsia
Q7. With the depressed level of the GC Newcastle
Index, the focus of many traders and producers has
turned to alternative price mechanisms when searching
for a "fair" price. Which index most accurately captures
both absolute pricing and market movements?
1. ICI;
2. JPU 1 April reference price;
3. McCloskey sub-bit marker;
4. Platts;
5. HBA/HPB
@CoaltransEvents #CoaltransAsia
 Vote now 0

Q7. With the depressed level of the GC Newcastle

Index, the focus of many traders and producers has
turned to alternative price mechanisms when searching
for a "fair" price. Which index most accurately captures
both absolute pricing and market movements?
1. ICI; 1 23.2%

2. JPU 1 April reference price; 2 10.1%

3. McCloskey sub-bit marker; 3 23.2%

4. Platts; 4 27.5%

5. HBA/HPB
5 15.9%

@CoaltransEvents #CoaltransAsia
Q8. What will happen to Chinese thermal
coal imports in 2014?
1. Total thermal imports will rise by more than
20Mt above 2013's figure;

2. Total thermal imports will fall by more than

20Mt from 2013's figure;

3. Total thermal imports will remain broadly

unchanged (i.e. within +/-10Mt from 2013's
figure);

4. I have no idea. Imports are dependent upon

factors I cannot predict.

@CoaltransEvents #CoaltransAsia
 Vote now 0

Q8. What will happen to Chinese thermal

coal imports in 2014? 1 20.9%
1. Total thermal imports will rise by more than
20Mt above 2013's figure;

2. Total thermal imports will fall by more than 2 17.9%

20Mt from 2013's figure;

3. Total thermal imports will remain broadly 3 38.8%

unchanged (i.e. within +/-10Mt from 2013's
figure);

4. I have no idea. Imports are dependent upon 4 22.4%

factors I cannot predict.

@CoaltransEvents #CoaltransAsia
Q9. What will be the impact of Regulation No.
32 proposed by the Indonesian Government?
1. It will eradicate the domestic coal trading industry;

2. It will control significantly illegal mining in Indonesia;

3. Small producers will be affected as coal gathering and

sales by traders are not feasible;

4. It will have a material impact on coal prices;

5. All of the above;

6. None of the above.

@CoaltransEvents #CoaltransAsia
 Vote now 0

Q9. What will be the impact of Regulation No.

32 proposed by the Indonesian Government?
1. It will eradicate the domestic coal trading industry; 1 10.9%

2. It will control significantly illegal mining in Indonesia; 2 23.6%

3. Small producers will be affected as coal gathering and 3 25.5%

sales by traders are not feasible;

4 7.3%
4. It will have a material impact on coal prices;

5. All of the above; 5 27.3%

6. None of the above. 6 5.5%

@CoaltransEvents #CoaltransAsia
Q10. What will be the impact of the KPK's
("Corruption Eradication Commission") involvement in
the renegotiation of CCoW's?
1. It brings certainty that CCoW's will be
renegotiated on an accelerated basis;

2. There will be no impact. CCoW's will

not be renegotiated;

3. No significant impact. This is a publicity

stunt.

@CoaltransEvents #CoaltransAsia
 Vote now 0

Q10. What will be the impact of the KPK's

("Corruption Eradication Commission") involvement in
the renegotiation of CCoW's?
1. It brings certainty that CCoW's will be 1 36.6%

renegotiated on an accelerated basis;

2. There will be no impact. CCoW's will 2 21.1%

not be renegotiated;
3 42.3%
3. No significant impact. This is a publicity
stunt.

@CoaltransEvents #CoaltransAsia
Q11. Will the Indonesian Government implement
strictly the regulation that all IUP-OP holders need to
form a separate company and obtain an IUP-OP(K) to
carry out the export of coal?
1. Yes, this is being implemented aggressively;

2. No, IUP-OP holders are allowed to export without

any additional license requirement;

3. Government may consider to issue IUP-OP(K) license

to all IUP-OP holders;

4. This regulation will be completely scrapped.

@CoaltransEvents #CoaltransAsia
 Vote now 0

Q11. Will the Indonesian Government implement

strictly the regulation that all IUP-OP holders need to
form a separate company and obtain an IUP-OP(K) to
carry out the export of coal?
1 19.6%
1. Yes, this is being implemented aggressively;

2. No, IUP-OP holders are allowed to export without 2 39.2%

any additional license requirement;
3 29.4%
3. Government may consider to issue IUP-OP(K) license
to all IUP-OP holders;
4 11.8%
4. This regulation will be completely scrapped.

@CoaltransEvents #CoaltransAsia
Q12. Which Indonesian Presidential candidate
do you think would be most supportive
towards the Indonesian coal industry?

1. Joko Widodo;

2. Prabowo Subianto;

3. Not sure.
@CoaltransEvents #CoaltransAsia
 Vote now 0

Q12. Which Indonesian Presidential candidate

do you think would be most supportive
towards the Indonesian coal industry?

1. Joko Widodo; 1 47.1%

2. Prabowo Subianto; 2 25.0%

3 27.9%
3. Not sure.
@CoaltransEvents #CoaltransAsia
Q13. What value difference do end-users place
on single mine versus homogeneously blended
cargoes?
1. Zero;
2. US$1.00/mt;
3. US$2.50/mt;
4. US$5.00/mt;
5. End users do not buy blended
coal.
@CoaltransEvents #CoaltransAsia
 Vote now 0

Q13. What value difference do end-users place

on single mine versus homogeneously blended
cargoes?
1 33.9%

1. Zero;
2 22.6%
2. US$1.00/mt;
3. US$2.50/mt; 3 24.2%

4. US$5.00/mt; 4 3.2%

5. End users do not buy blended 5 16.1%

coal.
@CoaltransEvents #CoaltransAsia
Q14. "Reliability" in coal purchasing can mean many
things. It can include stable quality, timely delivery
and consistent supply. Which geographical location is
the best for securing "reliable" thermal coal supplies?
1. Central Kalimantan;
2. South Kalimantan;
3. East Kalimantan;
4. Philippines;
5. Sumatra;
6. Only Australia is reliable....
@CoaltransEvents #CoaltransAsia
 Vote now 0

Q14. "Reliability" in coal purchasing can mean many

things. It can include stable quality, timely delivery
and consistent supply. Which geographical location is
the best for securing "reliable" thermal coal supplies?
1. Central Kalimantan; 1 5.7%

2. South Kalimantan; 2 14.3%

3. East Kalimantan; 3 41.4%

4. Philippines; 4 1.4%

5. Sumatra; 5 1.4%

6. Only Australia is reliable.... 6 35.7%

@CoaltransEvents #CoaltransAsia
 Q15. What will be the main driver for low CV coal
prices over the next 5 years?
1. Growth of the power sector and coal demand in India;

2. A low calorific value coal ban in China;

3. Import tax on coal in Korea;

4. Emerging market demand from Thailand, Vietnam and

Philippines;

5. All of the above;

6. None of the above.

@CoaltransEvents #CoaltransAsia
 Vote now 0

Q15. What will be the main driver for low CV coal

prices over the next 5 years?
1 47.2%
1. Growth of the power sector and coal demand in India;
2 3.8%
2. A low calorific value coal ban in China;
3 0.0%
3. Import tax on coal in Korea;
4 3.8%
4. Emerging market demand from Thailand, Vietnam and
Philippines; 5 41.5%

5. All of the above; 6 3.8%

6. None of the above.

@CoaltransEvents #CoaltransAsia
 11

Q16. Did you find this session

worthwhile?
1. Yes. It was interesting to hear the views on important
issues involving thermal coal;

2. No. It was dull. Too many of the same issues are

repeated every year;

3. Yes. I come to spend time on my blackberry answering

email and this session gives me a chance to do it;

4. No. Asleep already.

@CoaltransEvents #CoaltransAsia
 Vote now 11

Q16. Did you find this session

worthwhile?
1 79.7%
1. Yes. It was interesting to hear the views on important
issues involving thermal coal;
2 10.2%
2. No. It was dull. Too many of the same issues are
repeated every year;
3 1.7%
3. Yes. I come to spend time on my blackberry answering
email and this session gives me a chance to do it;
4 8.5%
4. No. Asleep already.

@CoaltransEvents #CoaltransAsia