JAKARTA. The new policy on mineral export has brought negative impacts to some mineral mining issuers. Recently, the shares prices of the mineral mining issuers dropped after the issuance of this regulation.
PT Medco Energy International Tbk (MEDC) is one of the issuers, which suffer negative impacts of the regulation. Last year, the issuer succeeded to acquire Newmont Nusa Tenggara and renamed the company to Amman Mineral Nusa Tenggara. The new regulation has compounded the issuer to export mining products.
The new policy has brought negative sentiments for MEDC, the parent of Amman Mineral. During the last two days, the share price of MEDC has dropped by 2.88%. On Wednesday (18/1), the price of MEDC’s stake was Rp 1,390 per a share. This has dropped by 10.61% from the highest price of MEDC’s stake at Rp 1,555 per a share on 4 January.
During the same period, the prices of a share of PT Vale Indonesia Tbk (INCO) and PT Bumi Resources Minerals Tbk (BRMS) have dropped by 1.62% to Rp 2,470 and by 1.25% to Rp 79, respectively.
This policy also affected to the shares of Freeport-Mc Moran Inc. The price of a Freeport’s share continued decreasing by 0.86% to US$ 15.06.
Head of Research at MNC Securities Edwin Sebayang said, the policy is potentially to deteriorate the performance of the mining issuers. In this case, the new policy, which allows the mineral exports, may suppress the prices of minerals, such as nickel, due to the abundant supplies.
This will deteriorate the issuers’ performance. “We downgraded INCO’s prospect, on the grounds that the revenues of the issuer are potentially to decrease,” Edwin told KONTAN, Wednesday (18/1).
Analyst DBS Group of Lee Eun Young said, the nickel’s price once dropped by 4% to US$ 9,660 per ton after the announcement of that policy. Lee predicts that the increasing exports of nickel ore from Indonesia to China will lead China to produce nickel pig iron (NPI). This will bring negative impacts to nickel price.
However, Director of Investa Saran Mandiri Hans Kwee estimates that the decline in nickel price will only be temporary. Hans recommends ‘buy’ for INCO and MEDC with the target price of Rp 2,850 and Rp `1,950 per a share, respectively.
However, the new policy is beneficial for some issuers, such as PT Aneka Tambang Tbk (ANTM). During the last two days, ANTM’s share price dropped by 1.1% to Rp 895 per a share. However, the price hiked by 6% to Rp 920 on the day of the announcement of the policy.
The new policy allows mining company to export low-grade nickel ore in one condition that the exporter has fulfilled as much as 30% of local demands. This policy is beneficial for ANTM. “Perhaps, ANTM is the only exporter that can meet the qualification,” Lee wrote in his research.
(Muhammad Farid/Translator)
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