This Week's Headlines (8 - 14 Jan 2022)

14 Jan 2022


  Indonesia allows 37 coal vessels to leave as export ban eased 


  Indonesia said on Thursday it would allow 37 vessels loaded with coal to depart, in the strongest
  sign yet that the world's biggest thermal coal exporter is relaxing its ban on shipments. 


  A senior cabinet minister said in a statement the ban implemented on Jan. 1 had been eased for
  miners that have met a requirement to sell a portion of their output for local power generation,
  after the state utility procured enough coal to ensure 15 days of operation. 


  "I request that this is supervised closely so this also becomes a moment for us to improve domestic
  governance," Coordinating Minister of Maritime and Investment Affairs Luhut Pandjaitan said
  in the statement. 


  The 37 vessels included 14 ships whose clearance was announced earlier in the week. 


  Later on Thursday, 18 of the vessels, carrying around 1.3 million tonnes of coal, secured energy
  ministry verification, which is needed for a departure permit, according to a document
  reviewed by Reuters. 


  The 18 vessels, the document said, were carrying coals from companies that had fulfilled their
  Domestic Market Obligation (DMO), under which miners are required to sell 25% of output to
  local buyers with a price cap at $70 per tonne for power plants. 


  Among the companies were units of Adaro Energy, Indika Energy and Golden Energy Mines,
  the document showed. 


  Indonesia set the export ban after state power company Perusahaan Listrik Negara (PLN)
  reported critically low coal stocks at power plants and said Indonesia was on the brink of
  widespread power outages. The ban sent shockwaves through global energy markets,
  especially in Indonesia's largest coal customers, including Japan and South Korea. 


  Indonesian authorities blamed its coal supply crisis on miners failing to meet their DMO. 


  There were about 120 vessels either loading or waiting to load off Indonesian's coal ports in
  Kalimantan on the island of Borneo on Wednesday, according to Refinitiv Eikon data. 


  "We recognise that allowing loaded ships to depart is a small step in easing and progress needs
  to be made towards lifting the export ban," research group CreditSights said. 


  "Indonesia's government will monitor DMO compliance every month, which we think will help
  to avoid the abrupt imposition of coal export bans in the future," it said in a note. 




  In a parliamentary hearing, Energy minister Arifin Tasrif was asked about the DMO
  implementation and export ban, while a number of lawmakers called for greater transparency
  over DMO compliance. 


  "The plan of easing the coal export ban is taking place and will continue to be evaluated and
  we will ensure that the vessels that have been allowed to export are those which have fulfilled
  the DMO," Arifin said. 


  The maritime and investment ministry said in its statement that mining companies that had met
  their sales contract with PLN and 100% of their DMO requirements for 2021 would be allowed
  to begin exporting. 


  Without naming the companies, Arifin said there were 47 miners that had surpassed their DMO
  requirement and 32 miners that had fulfilled between 75% to 100% of their
  domestic responsibilities. 


  Miners that had not fulfilled their PLN contracts and DMO would face fines, he added. 


  Citi in a research note on January 5 estimated around 490 out of 631 coal miners in the country
  had not yet fulfilled their DMO obligations. These 490 coal miners represent about 35%-40% of
  Indonesia's total production, it said. 


  Indonesia's two largest coal groups, PT Bumi Resources and Adaro Energy, as well as state coal
  miner Bukit Asam, were among companies that said in stock exchange filings they had met
  DMO requirements. 


  Source: Reuters




  Indonesia to Start Vaccine Booster Rollout on
  January 12


  Indonesia will start rolling out Covid-19 vaccine booster shots for adults aged over 18 years
  old on January 12. 


  “The president has decided that the booster vaccination program will start on January 12. We will
  give the [boosters] to adults aged over 18 years old, in accordance with the World Health
  Organization’s recommendation,” Health Minister Budi Gunadi Sadikin told a virtual
  press conference on Monday. 


  An individual can get their booster jab six months after their second dose. At least 21 million people
  are eligible to get the booster, according to Budi.  


  A district or city can administer booster shots only if its first and second dose vaccination rates
  have reached at least 70 and 60 percent respectively.  


  “About 244 districts or cities that have met this criteria,” Budi said. 


  The minister added that the booster drive could adopt homologous or heterologous methods.
  A homologous vaccination uses the same vaccine type as the initial vaccine. 


  Budi added, “heterologous vaccination [is when we] use different vaccine types.”  


  Further details on the booster vaccination program will have to wait for recommendations from the
  National Food and Drug Monitoring Agency (BPOM), as well as the Indonesian Technical Advisory
  Group on Immunization (Itagi).  


  According to Budi, Itagi is likely to release its report on Jauary 10


  Omicron in Indonesia 


  Budi also gave the latest updates on Omicron cases in Indonesia. The country so far has recorded
  152 Omicron infections, of which 6 are locally transmitted. More than half of the 152 identified
  Omicron cases are asymptomatic, while the rest suffer from mild symptoms. 


  “About 23 percent [of the said Omicron cases] or 34 people have recovered and returned to their
  homes,” Budi said. 


  Source: JakartaGlobe




  Lotte Chemicals resumes construction of US$4
 billion petrochemical factory in Cilegon, Banten 


  PT Lotte Chemical Indonesia (LCI), part of South Korea-based Lotte Chemical Corporation,
  resumes the construction of its US$ 4 billion investment of a petrochemical factory in
  Cilegon, Banten, after the COVID-19 pandemic delayed the project. 


  The company signed memorandum of agreement with its contractors and the Indonesian
  Ministry of Investment to hasten the construction of the factory, as well as engineering, procurement,
  and construction (EPC) agreement between LCI and its contractors such as Lotte Engineering
  and Construction and Hyundai Engineering & Co. Ltd. in Jakarta on Friday, January 7, 2022. 


  Investment Minister Bahlil Lahadalia said the realization of the investment was a significant
  new milestone for the petrochemical industry in Indonesia. He said the investment from LCI was
  one of the largest in Southeast for the industry. 


  The project, dubbed Lotte Chemical Indonesia New Ethylene Project (LINE Project) also marks
  the first naphtha cracker project in Indonesia in 25 years. The construction is expected to be
  finished in 2025.  


  “The products produced here will create a significant import substitute effect and will also help the
  country’s trade balance in the future,” Bahlil said in a press conference following the signing,
  as quoted by Bisnis. 


  The petrochemical complex will have a production capacity of nearly 2 million tons annually
  with an annual production of 1 million tons of ethylene, 520,000 tons of propylene, 250,000 tons
  of polypropylene, and various other derivatives. Currently, about 50% of Indonesia’s petrochemical
  demand is supplied by importing the materials. 


  LCI Vice Chairman and CEO Kim Gyo-hyun said the LINE Project will massively add value
  to Indonesia’s already substantially large economy. 


  “This project is vastly interconnected, provide added value and high externality for the economy
  as well as strategic value to Indonesia’s economy. Furthermore, it will create jobs and further
  economic growth for Indonesia,” he said. 


  Based on data from the Central Statistics Agency, exports of chemical products (code HS 38
  under the Standard International Trade Classification) from January to October 2021 reached
  $5.54 billion, or up by 85% compared to the same period of 2020 of $2.99 billion. 


  Meanwhile, Imports of HS 38 chemical products reached $3.15 billion in the January to
  October 2021 period, up 33.71% compared to $2.35 billion in the same period last year. This
  is equal to a trade surplus of $2.39 billion for this product in 2021. 


  Source: Bisnis