Antam nickel output drops 33%

State-owned mining company PT Aneka Tambang (ANTM) Tbk reported 33% drop in ferronickel output in the second quarter 2009 due to the production halt at FeNi III plant since May 2009. 

ANTM expects the plant to resume operation in September 2009. ANTM also reported 27% drop in high grade nickel ore to 913,206 WMT. During the quarter, ANTM reported 36% drop in nickel ore to 2.347 million wmt.Bauxite sales also dropped 74% to 87,800 tons. 

Gold sales, meanwhile, jumped 93% in second quarter compared to the previous quarter, but for the first half 2006, gold sales actually declined 36% from the same period last year. 

As a result, ANTM reported 16% decline in sales revenue to Rp4.396 trillion in H1 2009. Domestic sales of gold skyrocketed by 244% to Rp1.33 trillion in the period, and that had helped ANTM in fill the gap of falling revenue from nickel and bauxite. 

In contrast to its operational performance, ANTM stock price has surged 84% in the second quarter. 

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Medco profit drops 84%

Oil and gas producer PT Medco Energi Internasional Tbk reported net profit of US$9.58 million in the first half 2009, dropped 84% from the same period last year on substantial decline of sales revenue.

Medco posted net sales revenue of US$311 million, slashed 59% from US$762 million in H1 2008, mainly due to the fall of net oil and gas sales to US$227 million and free fall of net sales of chemicals and other petroleum products to US$15 million (against US$125 million).

Medco's cost of goods sold dropped 55%, while operating expenses also declined 24%. As a result, Medco booked operating profit of US$31.3 million against US$195 million in H1 29008.

Medco has total asset of US$2.07 billion as of June 30th, 2009, while its market cap as of today is US$1.1 billion. With annualized EPS of Rp62, Medco is currently traded with PE multiple 54. Expensive! 

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Mobile-8 loss surged 170%

PT Mobile-8 Telecom (FREN) reported net loss of Rp269.6 billion in the first half 2009, surged 170% from the same period last year on poor operating margin.

Mobile-8 reported operating revenues of Rp189 billion, dropped 58% from the same period last year on lower revenue from telecommunication and interconnection services. 

Meanwhile, operating expenses increased 17% to Rp551 billion. As a result, Mobile-8 reported operating loss of Rp361.5 billion against Rp11.9 billion in H1 2008.

The company was lucky because of gain on foreign exchange translation and gain on change in fair value of derivative financial instrument of a combined Rp224 billion, more than enough to cover the surge in interest expenses and financial charges of Rp228 billion. Else, the company would have posted bigger net loss.

Mobile-8 lost most its market value in the last two years. The peak price of Mobile-8 was in May 2007 at Rp330 to represent a market capitalization of Rp6.68 trillion (US$720 million). But since then, the stock crashed to as low as Rp50 or a market cap of Rp1.01 trillion. Today the stock was closed at Rp53.

The company has total liabilities of Rp4.25 trillion, almost 10 times its equity at Rp457 billion. Worse, its current liabilities were Rp1.4 trillion, while current asset was only Rp661 billion. Technically bankrupt. Cash in hands? Well, only Rp8.8 billion. If we look at its cash flow statement for H1 2009, cash receipts from customers were not enough to pay suppliers and employees. 

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Rig Tenders join forces with Marco Polo

Marco Polo Marine Ltd has entered into a JV agreement with PT Rig Tenders to penetrate the offshore oil and gas marine segment.

Marco Polo told Singapore Stock Exchange (SGX) this morning that the collaboration mechanism will be formalized between MP Ventures, a subsidiary of Marco Polo Marines Ltd, and Rig Tenders respectively through a 30:70 controlled entity, which will participate in selected offshore oil and gas opportunities, including vessel ownership and chartering services.

Rig Tenders is a 80.54%-owned subsidiary of Scomi Marine Berhad, listed in Malaysia Stock Exchange, engaging in business of owning and operating marine vessels serving the logistic needs of coal and oil/gas segments. Rig Tenders' major customers are Adaro, Arutmin, Chevron, CNOOC, and Total Indonesia.

Marco Polo Marine Ltd is a growing integrated shipping group principally engaged in the ship chartering and shipyard businesses. The group's shipyard which provides ship building, ship repair, and conversion services, is located in Batam Island, Indonesia, occupying a total land area of approximately 348,705 square meters, with a seafront of approximately 650 meters. The group is expanding the shipyard, and when completed, this would be one of the largest shipyards in Batam.

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Pinang-Pinang due diligence completed

Prosperity Resources Limited (PSP) told Australia Stock Exchange today that it has completed exploration due diligence on the Pinang-Pinang gold project in Aceh, Indonesia. 

PSP said initial assay results from the soil sampling are being compiled and will be released in due course. Prosperity, through its 90% owned Indonesian subsidiary, PT Prospindo, has signed a formal JV agreement with PT Multi Mineral Utama which allows for the subscription for 80% of the shares in Multi Mineral by the JV holding company created under the October 2008 cooperation agreement with PT Dana Mitra Utama.

The JV holding company will earn an 80% shareholding interest in the Multi Mineral Utama through total exploration expenditure of US$1.25 million.

Pinang-Pinang is a concession over 2,000 Ha in southern part of Aceh province controlled by PT Multi Mineral Utama.

Prosperity is focusing on metal projects in Indonesia, mainly gold, silver, copper, and nickel. The company is also seeking opportunities in iron ore and manganese. 

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Herald to resume drilling

Herald Resources (HER), a subsidiary of Bumi Resources (BUMI), plans to resume drilling activities in Lae Jehe, Sinar Pagi, and Buluh Laga prospects in lead-zinc concession controlled by PT Dairi Prima Mineral in North Sumatra this quarter.

Herald, acquired by BUMI for over US$600 million last year, is awaiting forestry approval in order to proceed to full development of the Dairi project. Due to the delay in obtaining forestry approval, the company has ceased port and road construction activities associated with the project.

The Lae Jehe prospect is located about 1.5km north of the main Anjing Hitam orebody. There was a temporary hiatus in drilling and related feasibility studies at Lae Jehe during the March and June quarters of 2009. But Herald told ASX this morning that drilling of the Lae Jehe to Basecamp sector is planned to commence during the 3rd quarter of 2009. 

Herald also said drilling for Buluh Laga prospect is scheduled to commence early in 3rd quarter of 2009.

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BUMI trading frenzy

PT Bumi Resources (BUMI) Tbk dominated stock trading this morning with over 800 million shares exchanged hands in less than two hours of trading. The stock surged 13% to Rp2750 after yesterday's 10% gain.

Yesterday, 905 million shares exchanged hands with total trading value of Rp2.1 trillion where foreign investors were in net buy of over 200 million shares through UOB, UBS, JP Morgan, Credit Suisse, AmCapital, and Macquarie. Credit Suisse, agent for US$375 million convertible bond being issued by Enercoal---BUMI's subsidiary, was the biggest net buyer of 136 million shares.

On Wednesday, July 29, 648 million shares exchanged hands with total trading value of Rp1.45 trillion, where CLSA was the biggest net buyer of 125 million shares. In the previous trading day, CLSA also collected a net of 85 million shares.

At Rp2750, BUMI gained 547% from its bottom in January 15. THe stock is currently traded 67% below its peak of Rp8550 in June 2008. It is true that BUMI is lagging behind peers like Adaro (27% below last year's peak), Indika (34%), or Bukit Asam (19%) in the recovery. But with expected lower net profit this year (lower volume and prices) and bigger debts?

Coal	31-Jul-09	30-Dec-08	YTD (%)	Peak	From Peak (%)	Low	From Low (%)
Adaro Energy	1,270	520	144	1,730	-27	530	140
ATPK Resources	260	128	103	2,625	-90	110	136
Bumi Resources	2,750	910	202	8,450	-67	425	547
Bayan Resources	5,450	940	480	5,450	0	840	549
Indo Tambangraya	26,300	10,500	150	35,000	-25	5,950	342
Resource Alam	2,500	1,750	43	1,750	43	950	163
Perdana Karya	370	335	10	1,440	-74	210	76
Bukit Asam	13,350	6,900	93	16,500	-19	4,150	222
Petrosea	10,200	3,600	183	10,150	-4	3,350	204
Indika	2350	1090	116	3575	-34	920	155

BUMI had total liabilities of US$3.35 billion in March 31, 2009, surged 136% from March 2008 as the company raised more loans to finance acquisitions, including Herald Resources (ASX). 

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Davomas bondholders win court ruling

Central Jakarta Commercial Court has ruled in favor of Java Investment Advisory Group and Precise Circle Limited for Suspension of Debt Payment Obligation (PKPU) on cocoa processor Davomas Abadi. 

Chief justice Makassau said both Java and Precise are legitimate bondholders of Davomas International Finance Company Pte Ltd, a wholly-owned subsidiary of Davomas Abadi, Bisnis Indonesia reported.

PKPU is the formal corporate restructuring governed by Law No. 37 of 2004 concerning Bankruptcy. The bankruptcy law provides a debtor which is unable to pay its debts as they fall due may apply to the Commercial Court for a suspension of payments to allow the debtor time to submit a composition plan (how the debt will be restructured).

Davomas International issued US$238 million 11% bonds due 2011. Davomas defaulted the interest payment scheduled May 8, 2009.

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Stanchart lost court case on derivatives

Standard Chartered Bank lost a court case on derivate transaction filed by PT Nubika Jaya. Court says the bank violated central bank regulation, Bisnis Indonesia reported.

Central Jakarta Commercial Court ruled in favor of Nubika Jaya, a palm oil producer, on Thursday, July 30. Stanchart is ordered to return US$5.25 million funds to Nubika, while Nubika shall return Rp52.18 billion to Stanchart.

Judges said Stanchart violated Bank Indonesia Regulation No. 7/6/2005 about Transparency of Banking Products and The Utilization of Customer's private data.

Nubika entered into a callable ratio forward currency option with Stanchart in September 12, 2008. The court of justices blamed Stanchart for the agreement written in English with "complex terms".

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Seram oil production drops 10%

Lion Energy (LIO) Limited reported oil production of 2,413 barrel per day in Seram (Non Bula) Block PSC for the second quarter 2009.

Lion, owner of 2.5% interest in the block, told ASX that Seram produced 2413 bpd of oil, dropped 10% from 2707 bpd in the previous quarter.

The majority shareholders of the block are CITIC Seram Energy Limited (51%), KUFPEC Indonesia Ltd (30%), and Gulf petroleum Investment (16.5%). CITIC is the operator of the joint venture.

The block contains the Oseil oilfield which has since initial field start-up in December 2002, produced cumulative crude oil of 8.2 million barrels as at June 30th, 2009.

The lowest production was in May 2009 with average of 2338 bpd, but then picked up to 2480 bpd last month. Out of total 219,625 barrels produced in Q2, HSFO was about 200,000 bpd, while the balance was naphtha.

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Conoco Indonesia oil production declined 38%

ConocoPhillips reported lower oil production from its Indonesian operation in the second quarter 2009 by 38%, but natural gas production inched up slightly by 0.5%.

Oil production declined from 26,000 bpd in Q1 to 16,000 bpd in Q2, so for the first half, the average production was 21,000 bpd. Compared to the average production in 2008, actually the first half 2009 is substantially higher by 40%. Meanwhile gas production in Q2 was 451 MSCFD, increased slightly from 449 MMSCFD in Q1. 

As for prices, crude oil price increased 30% to US$56 per barrel in Q2, while natural gas gained 24% to US$5.91 per MSCF.

ConocoPhillips has seven production sharing contracts (PSCs) comprising about 12.3 million gross acres. Four PSCs are offshore (South Natuna Sea Block B PSC, Ketapang PSC, Amborip VI PSC, and Kuma PSC). The remaining three PSCs are onshore: Corridor Block PSC and South Jambi "B" PSC in South Sumatra and Warim PSC in Papua.

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EAM updates Miwah Gold

East Asia Minerals Corporation told Toronto Stock Exchange (TSX) on Wednesday that assays have been received from the first two diamond drill holes at its flagship Miwah Gold project in Aceh province. 

East Asia encounters 3.29 g/t gold over 66 meters in wider internal of 1.71 g/t gold over 158 meters from initial diamond drill testing of Miwah. "These results support the interpretation of shallow out-flowed, laterally extensive gold mineralization controlled by multiple northerly trending higher-grade feeder structures that cut steeply through the 1.2 kilometre long (east-west) Miwah Gold Zone," EAM said. 

Drill hole EMD001 encountered 1.97 g/t gold over 57.1 metres, including 2.78 g/t gold over 38.3 metres. EMD002 encountered 1.71 g/t gold over 158.0 metres, including 3.29 g/t gold over 66.0 metres.

EMD001 and 002 were drilled in opposite directions from a common drill pad located approximately 200 metres east of the currently mapped western end of the Main Miwah Gold Zone.

The Miwah Property is in a very similar volcanic setting to the Martabe gold-silver deposit, also located in North Sumatra (Purnama and Baskara resources: 127.8 million tonnes at 1.4 g/t gold (5.5 million ounces gold) and 15 g/t silver (60 million ounces silver), and the alteration system is of a comparable size. 

Miwah also exhibits a likeness to the size, style and geometry of the alteration system developed at the Pierina gold deposit in Peru (67.7 Mt grading 2.98 g/t gold and 22 g/t silver, giving a total 6.49 million ounces gold and 47.9 million ounces silver).

East Asia Minerals (EAS-TSXV) is an Asian-based, Canadian mineral exploration company with gold and copper exploration properties in Indonesia, and uranium exploration properties in Mongolia. In Indonesia the Company has a 70 to 85% interest in six advanced gold and gold-copper properties located in Aceh Province, Sumatra, and Sangihe Island, North Sulawesi. 

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Arrow updates CBM exploration

Arrow Energy Ltd, Australia, said the first exploration work program on the West Sangatta PSC block, East Kalimantan, is progressing well with spud date anticipated in October 2009. 

Arrow told ASX on Thursday that this activity is being carried out in partnership with Ephindo Iltahbi CBM Holding Inc and PT Pertamina Hulu Energi Metan A, a subsidiary of state-owned oil and gas company Pertamina.

The West Sangatta PSC is situated next to coal concession of PT Kaltim Prima Coal, Indonesia's giant coal producer. Arrow's cash position at the end of the quarter was $378 million.

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BUMI announces pricing of US$375 million bond

PT Bumi Resources (BUMI) Tbk announced the pricing of its privately placed US$375 million 5-year 9.25% coupon guaranteed convertible bond due 2014. 

The bonds are expected to be issued by Enercoal Resources Pte Ld, a wholly-owned subsidiary of BUMI, and convertible into existing ordinary shares of BUMI. The bonds are expected to be issued at a 30% conversion premium. Credit Suisse (Singapore) Limited is acting as the sole placement agent for the bonds.

BUMI told investors that concurrent with the issuance and placement of the bonds, the issuer will enter into a cash-settled call spread transaction (Capped Call Option) with an affiliate of Credit Suisse. Under the option agreement, the issuer will purchase call options on the number of shares of the company into which the bonds are convertible.

"If on the expiration date of the Capped Call Option, the market price of the shares is higher than the strike price, then the counterparty (CS affiliate) will pay to the issuer an amount calculated by reference to the difference between the then market price of the shares subject to a cap," BUMI wrote.

BUMI is currently the largest coal producer in Indonesia with coal shipped over 51 million tons last year from two subsidiaries, PT Kaltim Prima Coal and PT Arutmin Indonesia. 

BUMI surged 10.23% today to Rp2425 with 905 million shares exchanged hands, the highest price seen since October 6, 2008. BUMI reached its peak in June 2008 at Rp8550, but then crashed to as low as Rp425 in January 15, 2009. Since then the stock regained grounds and posted 470% gain so far. At Rp2425, BUMI currently has market capitalization of US$4.7 billion.

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Salim appoints 5 investment banks

PT Salim Ivomas Pratama, a 90%-owned company of Indofood Agri Resources Ltd, has appointed five investment banks as underwriters of Rp1 trillion bonds.

Indofood Agri, listed in SGX, said the underwriters are PT Danareksa Sekuritas, PT CIMB Securities Indonesia, PT Kim Eng Securities, PT Mandiri Sekuritas, and PT OSK Nusadana Securities Indonesia.

Indofood Agri's stock price dropped from S$2.87 in July 2008 to as low as S$0.375 in October 2008 or 86% crash. But since then, with the recovery of CPO prices, the stock regained grounds and closed at S$1.52 today to reflect a 304% gain.

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SBY-Boediono team grilled over campaign funds

The Election Monitoring Body (Bawaslu) grilled SBY-Boediono's campaign team over alleged violation of campaign financing rules. 

Kompas.com reported today that Djoko Suyanto (deputy chairman of campaign team, also president commissioner of coal giant PT Adaro Energy Tbk), Amir Syamsyuddin (legal advisor), and Garibaldi Boy Thohir (treasurer of SBY-Boediono campaign team, who is also CEO of PT Adaro Energy Tbk) arrived at Bawaslu office on 13.45 reportedly to clarify the report filed by Indonesia Corruption Watch (ICW).
Bawaslu told reporters after the meeting that the monitory body asked SBY-Boediono team to clarify the alleged violation of Presidential Election Law on campaign financing.
Bawaslu member Wirdyaningsih said the main target of clarification is donation from Bank Tabungan Pensiunan Nasional (BTPN), a bank controlled by Texas Pacific Group, at the amount of Rp3 billion (US$300,000).
"Do they know that the BTPN is controlled by foreign parties," Wirdyaningsih said.
According to Wirdyaningsih, Article 103 point 1 of Law No. 42 forbids president candidate to receive donation from "foreign parties". If found guilty, SBY-Boediono could be jailed for 12-48 months and fines three times Rp3 billion.
But Bawaslu has yet to make final conclusion about the donations. Bawaslu will first ask for clarification from economists and experts.

What SBY-Boediono team says?

The team believes the companies mentioned by ICW in the report do not fall into the definition of "foreign investment company". Listed companies like BTPN shall be regulated by Capital Market Law. Under the capital market law, there is no differentiation between Indonesian or foreign shareholders.

The problem, explanation of Article 103 Point 1 (a) of Law No. 42 says..."foreign parties' in this law means foreigners, foreign private enterprises, including private companies in Indonesia which shares controlled by foreign parties.
Well, looks like the legal battle will be on definition of "foreign parties". BTPN is a legal entity registered in Indonesia. But its true that the shares are majority controlled by foreign investors. What about other companies, especially those listed at stock market? Bumi Resources, for example, is currently controlled by foreign investors almost 75%. If all companies controlled by foreign investors in the stock market fall into this category of violation, then whoever got donation from such companies would end up in jail. Is it possible that the "elected" president and vice president would end up in jail for two years?

Lesson learnt? You have to be careful when giving financial contribution to political activism. And the candidates shall scrutinize thoroughly the financial contributions.

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BCA profit surged 36% to US$330 million, people?

Bank Central Asia (BBCA) reported net profit of Rp3.3 trillion or about US$330 million in the first half 2009, surged 36% from the same period last year. What crisis?

Indonesia's major banks keep telling "good news" to their "shareholders", but probably not for the depositors and debtors. 

BCA said its strong first half results were driven by increases in net interest income and fee-based income, and by a tax rate of 23% in the first half 2009 compared to 30% in the first half 2008. 

The bank received a benefit of a 5% reduction of income tax rate following the implementation of Government Regulation No. 81/2007 for qualified listed companies so that BCA's full year 2008 income tax rate was adjusted to 25%. How generous the government is.

Indonesians are also generous to BCA. Third party funds grew by 15.2% to Rp219.4 trillion at the end of June 2009, where total deposits increased 13.7%. Outstanding loans? Well, it increased 12.3% only to Rp107.3 trillion.

They got people's money for 2%, and then loaned them to people at above 14%. Such a huge spread is considered "inefficient" for the economy, but generous for the shareholders. That's why BCA, like BRI, booked over Rp19 trillion net profit in the 2004-2009 period only. Where in the world you can get that?

BCA is controlled by Budi Hartono family (Djarum Group). Market capitalization? US$9 billion. Unbelievable! Djarum and Farallon acquired 51% shares of BCA for few hundred million USD, and in seven years, they got US$4.5 billion plus dividends. Probably the dividends only had repaid the capital investment to acquire the bank.

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Natarang Mining to produce gold Q1 2010

Kingsrose Mining Ltd, parent company of PT Natarang Mining, predicts the commissioning of the process plant in Way Linggo Project, Sumatra, by the end of the first quarter 2010. 

Kingsrose told ASX today that the up-scaled project is not expected to produce approximately 45,000 ounces of gold and around 500,000 ounces of silver in Way Linggo contract of work.

The concession covers an area of 10,540 hectares, located over a zone of structural complexity at the northern end of the Semangka Graben where pull-apart basins, fault splays, and dilational jogs occur related to the Trans Sumatra Fault Zone.

Underground mine development and plant construction activities in Way Linggo have been accelerated following Kingsrose' successful A$20 million capital raising.

An experienced process metallurgist, Murray Hill has been retained to overview the completion and commissioning of the Way Linggo plant, Kingsrose said in the report. 

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Mitra Rajasa in red still

PT Mitra Rajasa (MIRA) Tbk, parent company of drilling service company PT Apexindo Pratama Duta (APEX) Tbk, reported net loss of Rp115.85 billion in the first half 2009 due to huge financial expenses.

MIRA reported net sales revenue of Rp873 billion and operating profit of Rp306 billion in H1 09. But the company's financial charges reached Rp373 billion. As a result, the company booked loss before tax of Rp67.7 billion.

The biggest financial expenses are bank interest and penalties (Rp232 billion) and bonds (Rp86 billion). The company was lucky to book Rp67 billion gain on derivative transaction. Otherwise, MIRA's net loss would be bigger.

The company's current ratio also worsened. It has current liabilities of Rp2.85 trillion, while current asset at Rp2.02 trillion. The company has total liabilities of Rp12.08 trillion, while its equity was only Rp1 trillion as of June 30, 2009. 

At Rp540 per share, MIRA currently has market capitalization of US$210 million. The stock surged almost 100% in the period of March-May, but then retreated to Rp540 today.

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Straits reported lower gold output in Mt Muro

Straits Resources Ltd (SRL) reported gold production in Mt Muro, Indonesia of 8597 ounces in second quarter 2009, declined 15% from the first quarter.

SRL, controls 100% participating interest in the Mt Muro concession, told ASX this morning that as a result of the reduced production performance brought about by a range of operating bottlenecks, cash costs increased for the quarter to US$1106 per ounce. 

SIlver production, on the other hand, increased slightly to 55,776 ounces from 54,185 ounces in the first quarter. Extensive planning and re-evaluation has recently been completed and commitment has been made to a production plant at the Mt Muro operation based around the development of the Serujan open pit, the Brinjin, and Merindu elluvial mines and the Soan deposit which is forecast to deliver 320,000 recovered gold equivalent ounces over a minimum five years time.

Integral to the plan is the decision to recapitalize the mining and transport fleet and moving to an owner operate strategy during the second half of 2009. Under this plan, SRL expected that in excess of 68,000 gold equivalent ounces will be produced in FY 2009/10 at an average cash operating cost of US$620 per ounces and reducing thereafter, SRL said.

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Hijau Pundi filed lawsuit against Alam Sutera

PT Hijau Pundi Nusa has filed lawsuit against property developer PT Alam Sutera Realty Tbk, PT Alfa Goldland Realty, and some individuals.

The first defendant in the case is The Ning King, the second is PT Alfa Goldland Realty, the third is Thee Ning Kong, and the fourth is PT Alam Sutera Tbk. Object of the lawsuit is five parcels of land in Pakulonan Village, Serpong sub-regency, Tangerang, Banten province.

PT Alam Sutera Realty Tbk told Capital Market Supervisory Agency (Bapepam) and IDX management last week that PT Hijau Pundi Nusa seeks compensation of Rp208.8 billion.

Alam Sutera reported net profit of Rp58.8 billion last year against Rp20.3 billion in the previous year. The company has total asset of Rp3.069 trillion as of March 31, 2009. The stock is currently traded at Rp113, reflecting market capitalization of US$190 million.

 

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Titan Kimia profit jumps 164%

Polyethylene and bi-axially oriented polypropylene producer PT Titan Kimia Nusantara (FPNI) reported net profit of Rp241 billion in the first half 2009, surged 164% from the same period last year.

Titan Kimia, a subsidiary of Malaysia's Titan Chemicals Sdn Bhd, reported better operating margins in the period where sales increased but cost of raw materials declined.

Titan Kimia reported operating profit of Rp297 billion, jumped 118% from the same period last year. Titan Kimia operates two polyethylene (PE) resin plants in Merak, Banten province with combined capacity of 450,000 tons per year. This is actually bigger than PT Chandra Asri Petrochemical Center (CAPC) which has 300,000 tons per year of PE capacity. But CAPC's PE plant is integrated with ethylene supply from its own naphtha cracker.

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Astra Agro profit drops 51%

Plantation giant PT Astra Agro Lestari (AALI) Tbk booked net profit of Rp769.8 billion in the first half 2009, slashed 51% from the same period last year on lower prices of crude palm oil.

Astra Agro reported net sales revenue of Rp3.537 trillion, declined 23% from the same period last year. With higher cost of goods sold and general expenses, AALI recorded operating profit of Rp1.155 trillion, dropped 50% from Rp2.35 trillion in H1 2008.

With annualized EPS of Rp978, the stock is currently traded at PE multiple 19. AALI currently has market capitalization of US$2.89 billion.

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Victory West Moly continues Malala molybdenum project in Sulawesi

Victory West Moly, listed in Australia Stock Exchange (ASX), reiterated its commitment for ongoing exploration and development activities at its Malala Molybdenum Project in Sulawesi. 

Victory West Moly (VWM) told ASX this morning that it maintains a full-time workforce of around 70 employees based at the Nancy Camp who continue to implement the company's strategy to move the anomaly B molybdenum prospect through to production.

"Trenching is ongoing, with an additional five trenches to be excavated and sampled within the coming months. The company's geologists plan on undertaking geological mapping and sampling activities over two large target areas defined by molybdenum-in-soil geochemistry and recent stream sediment geochemical results," VWM said in a statement.

VWM, previously known as Richfield Group Limited, is exploring mineral resources in several mining rights (kuasa pertambangan/KP) in Sulawesi. They are PT Sembilan Sumber Mas, PT Promistis, and PT Indo Surya. These KPs are located in northern west part of Sulawesi Island.

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Salim Group enters Solagran

Solagran Limited, Australia, has commenced a partnership with Salim Group in the development of human and animal health and nutrition for Asian markets. 

Solagran told ASX this morning that a nomineed of Salim Group has taken 36.9 million shares in Solagran for A$5.54 million. Salim will then control 13% of the ordinary fully paid shares of Solagran. 

Solagran said earlier that the new strategic partner will provide critical support to Solagran's ongoing product commercialization efforts and, in particular, its strategy of gaining access to the vast Asian market with a new range of OTC products for general health and well being, and potential penetration of the pharmaceutical market.

Solagran is focusing on strategies to commercialize its pharmaceutical product range, in particular Ropren which was recently approved in Russia as a hepatoprotector for use in treating chronic hepatitis and hepato-biliary dysfunction.

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Tjiptardjo named as new tax office boss

Mochammad Tjiptardjo, director of intelligence and investigation at Directorate General for Tax, has been promoted as the new director general to replace Darmin Nasution who has been sworn in as senior deputy governor of Bank Indonesia.

Djoko Slamet, spokesperson of DG Tax, told Detikfinance.com that presidential decree for Tjiptardjo's promotion has been issued.

Minister of Finance Sri Mulyani Indrawati has confirmed Tjiptardjo's appointment. "We hope he could continue the reform at Tax Office," Sri Mulyani told Tempointeraktif.com.

Tjiptardjo is known for his work on Asian Agri tax evasion investigation. PAN legislator Drajad Wibowo praised the decision saying Tjiptardjo's track record gives hopes for strengthening reform at the Tax Office. "We hope cases like Asian Agri will not hanging in balance for years because it's not healthy for the Tax Office," Wibowo said.

Tjiptardjo was head of Southern Sumatra tax office. (hs/ya)

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IDX adds 1.1%

IDX composite index gained 1.1% today, thanks to last minutes rally. Coal stocks gained significantly. 

Regional sentiment also helped IDX, led by Shanghai's 1.9% gain. But it's coal that gained the most. Bumi Resources increased 3.7%, while Bukit Asam surged 4.5% on reports that its net profit would double in the first half 2009. Their peers in the region also continued the rally on higher coal prices. China Coal, for example, gained 4%. Shenhua increased 3.9%, Adaro +3.3%, while Rio Tinto gained 3.8% in Australia.

Telkom increased 2.9% as CIMB upgrades the outlook on the sector. Unilever is among the best performer with 10.6% gain today, a confirmation of its strong fundamental performance. Plantations closed mixed with IOI Corp and IJM lost ground in Kuala Lumpur, while Indofood Agri Resources surged almost 6% in Singapore. Plantations listed at IDX also ended mixed with London Sumatra, SMART, and Bakrie Sumatra gained over 1%, but Gozco and Tunas Baru lost 2.4% and 1.6% respectively.

Banking stocks ended mainly lower, led by Permata (-1.7%), Mandiri (-1.4%) and Danamon (-1%), while BNI and CIMB Niaga gained 1.1% and 1.5% respectively. (th/ya)

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Bank Century's NPL 43%

The troubled Bank Century reported gross non-performing loan (NPL) of 42.96% as of June 2009 against 3.13% in June 2008 while net NPL at 7.3%.

According to the bank's un-audited financial report, loss category loan reached Rp4.68 trillion, consisted of marketable securities (Rp1.858 trillion), loans to third party (Rp1.71 trillion), and other receivables from third party at Rp1.1 trillion.

The bank, hit by fraud allegedly committed by its former shareholders, booked net interest income of Rp13.6 billion in the first half 2009 and other operational income of Rp17.29 billion. With human resources cost of Rp54 billion and administration/general expenses of Rp48 billion, the bank should have booked operating loss. But the company's book "improved" only with income from provision of productive assets write-offs (Rp172 billion). 

As a result, Century reported operating profit of Rp74.88 billion against Rp45 billion in H1 2008. Combined with non-operational income, the bank finally booked net profit of Rp139.99 billion in H1 2009. But with retained loss of Rp8.76 trillion, it's unclear how the bank would repay Rp6.76 trillion (US$670 million) funds injected by Lembaga Penjaminan Simpanan (Depositors Insurance Co) as temporary capital.

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Santos oil production drops 46%

Santos, Australia, reported 46% drop of crude oil production in its Indonesian operation for the first half 2009. 

Santos reported to Australia Stock Exchange (ASX) last week that Indonesian oil output reached 303,900 barrels in H1 2008, dropped 46% from 566,100 barrels in the same period last year. Santos reported significant drop in second quarter 2009 to 127,100 barrels against 268,900 barrels in Q2 2008.

Crude oil production in Q2 was 28% lower when compared to Q1 2009 due to natural field decline and the sale of Kakap PSC. 

But sales gas production of 7.1 PJ in Q2 2009 was 16% higher than Q2 2008 due to higher Maleo gas offtakes. 

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China asks for more LNG

China has formally asked additional supply of one million tons of liquefied natural gas (LNG) from Indonesia, but Upstream Oil and Gas Regulatory Body (BPMigas) has reportedly declined to focus on domestic supply, Detikfinance.com reported.

The popular online publication quoted Sulistya Hastuti Wahyu saying "China asked additional supply of one million tons. But Mr Priyono (BPMigas chairman) said, domestic supply will be the priority."

China asked additional supply on Sunday, July 26, when the first LNG shipment from Tangguh plant (Papua) arrived in Fujian LNG Terminal.

Tangguh LNG is built with US$5 billion investment, sourced its natural gas supply from six gas fields in three production sharing contracts (PSCs): Wiriagar, Berau, and Muturi. The gas is transported through 22-km pipeline to the LNG plants.

BP is the owner of 37.16% shares in the project. Other partners are MI Berau BV (16.3%), CNOOC Ltd (13.9%), Nppon Oil Exploration (Berau) Ltd (12.23%), KG Berau/KG Wiriagar (10%), LNG Japan Corporation (7.35%), and Talisman (3.06%). 

Tangguh has a long-term contract to supply 2.6 million tons of LNG to LNG Fujian, China, 1.15 million tons to K-Power and Posco, South Korea, plus a flexible contract to supply up to 3.7 million tons per year to Sempra LNG in Baja California, Mexico. 

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CUE: Oyong gas production will be on target

Cue Energy Ltd, owner of 15% participating interest in Sampang PSC operated by Santos, was optimistic that first gas production from Oyong field will be on target this quarter.

Cue Energy told Australia Stock Exchange (ASX) this morning that construction of the Oyong Gas phase development has progressed as scheduled ahead of anticipated first gas in late third quarter 2009.

Meanwhile, no oil production revenue was received by CUE from Oyong field during the second quarter 2009 due to timing of oil cargoes. The average production rate for the field for Q2 was approximately 3500 barrels of oil per day. Production was shut in for five days while modifications were made to the production barge for phase two gas production. 

Regarding the Wortel Field, CUE said a plan of development for the field was submitted to Upstream Oil and Gas Regulatory Body (BPMigas) for approval.

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PTPN III profit drops 60%

State-owned plantation company PT Perkebunan Nusantara III reported net profit of Rp210 billion in the first half 2009, dropped 60% from the same period last year on lower sales and margin.

According to the company's financial report published this morning, PTPN III reported net sales revenue of Rp2.01 trillion, declined 19% from the same period last year, while cost of goods sold increased 10%. As a result, PTPN recorded operating profit of Rp208 billion, slashed 73% from Rp779.5 billion in H1 2008.

PTPN III is one of the largest state-owned plantations with total asset of Rp5.13 trillion as of June 30, 2009. The company has total liabilities of Rp2.68 trillion. Government has repeatedly announced initial public offering (IPO) plan for this company, along with other state-owned plantations. It is not clear when the IPO will finally be materialized. (ya)

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Govt expects lower cost recovery for oil and gas

The Government of Indonesia was optimistic in cutting down the cost recovery by US$1 billion this year to US$10 billion. Government also raised the crude oil price benchmark for 2009 State Budget to US$61 per barrel.

Antara News quoted Anggito Abimanyu, head of Fiscal Policy Agency at Ministry of Finance, saying there is a window of opportunity to cut the cost recovery. Unfortunately he didn't explain the details of where government could cut the costs to be reimbursed to oil and gas contractors.

In a related development, government and the House of Representatives (DPR) agreed to revise up the benchmark price for crude oil to US$61 per barrel from US$45 per barrel as the crude has been hovering above US$68 per barrel in the international market. Government expects oil production would reach 960,000 bpd this year. 

In a bid to cut down the cost recovery and to prevent disputes with contractors, government will issue regulation on cost recovery scheme where details of costs that could be reimbursed will be outlined based on comparative data from other countries.

Oil and gas contributed to almost 30% of the State budget. Controlling the cost recovery will clearly boost significantly the State's income from the sector. Actually, energy and mineral resources minister has issued decree No. 22/2008 about cost of various activities in the oil and gas sector that couldn't be reimbursed by the State.

Indonesia's oil production reached 956,000 bpd in the January-April 2009. 

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Tone down your expectations

The election is over. SBY-Boediono's camp (including the coalition members) will rule in the next five years. They got overwhelming 60.8% of legitimate votes or 41% of total registered voters. But that's not going to bring significant change to the direction of this country.

People would start to talk about 5% or 7% economic growth target. They don't really care actually who will grow, as long as the aggregate growth is there to talk. They will repeat over and over the 5% inflation rate. But they don't really care how much people's purchasing power at the middle to low income group will be raised. 

Don't talk about inequality, which enlarged significantly in the past 10 years or so, coz you might be classified as terrorist. Don't talk about inequity, you'll be considered communist. 

Raising tax for the rich and provide affordable education and healthcare for middle-low income groups? You'll be considered socialist. "We're capitalists," they said.

Get more from natural resources concessionaires? "No way, they are our major contributors in this political process," they argued.

They will repeat over and over the low BI benchmark rate of 6.75%. But they don't care about how much actually people pay for their motorcycle or housing. FYI, the average motorcycle financing is 35%-42% in the first quarter 2009. So, talking about 6.75% BI rate would be meaningless for ordinary people. They even don't know why banks cut significantly interest rate for time deposits or saving accounts.

"Because you're poor. We give better rates for the rich, those with time deposits over US$100,000," they said.

Oh, and they will talk about free education or 20% State budget for education only to finance the bureaucracy in the education department/offices, not to build new schools or better libraries, scholarships, etc. "Well, conditions apply," they said.

Healthcare? What are you talking about? Public infrastructure? Hey, don't expect too much, be realistic. "We're busy to give out some cabinet seats here," they said.

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Samarinda Airport project & political changes

Construction of new airport in Samarinda, capital city of East Kalimantan province, has been temporarily stopped. This is going to be a big test for SBY-Boediono administration.

East Kalimantan governor Awang Faroek Ishak considered PT Nuansa Cipta Realtindo (NCR) not a professional investor. Pressures might be mounted further, especially after an audit conducted by Supreme Audit Agency (BPK) found potential losses to the State in this project.

"We agreed to stop the construction temporarily," Faroek said.

NCR is a company appointed by local administrations to build the airport few years back. The company is part of SBY-Kalla administration's inner circle.

NCR got the project from local administration through a dubious process few years back, but those in power pay little attention to it. It turned out to be a mess. Who shall be responsible for this? Will the new administration do something about it, especially after the political changes where NCR might not get the same level of protection?

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KPU declared SBY-Boediono as the winner, Megawati & Kalla to file lawsuits

General Election Commission (KPU) has formally declared SBY-Boediono as the winner of July 8 presidential-vice presidential election. 

KPU said SBY-Boediono got 73.87 million votes or 60.8% of legitimate votes counted, while Megawati-Prabowo got 32.5 million votes or 26.8%, and Kalla-Wiranto with 15 million votes or 12.4%.
Megawati-Prabowo, the runner up, rejected to sign the results. Kalla-Wiranto, meanwhile, signed the results. But both teams decided to challenge the process and the results to Constitutional Court. 

"We accept the final votes counting, but not the process. That's why we will file our claims to Constitutional Court on Monday," Burhanuddin Napitupulu, member of Kalla-Wiranto team said.

This reflects internal dynamics at Golkar Party led by Jusuf Kalla. The party is split about its future, to join a coalition with SBY or become opposition party. This decision, to accept the election result, will clearly pave the way for a smooth rejoining of Golkar into SBY-Boediono administration.

Megawati-Prabowo, on the other hand, straightforwardly rejected to sign the results and will challenge the process to Constitutional Court on Tuesday. "We have 30 days to collect data and evidences," Gayus Lumbuun, head of legal team of Megawati-Prabowo said.

Megawati and Prabowo didn't attend the official announcement by KPU this morning. Kalla, Wiranto, SBY, and Boediono were all there. KPU's headquarter and the surrounding area have been heavily guarded by police officers in the past few days. But the announcement was relatively peaceful.

A group of people from ARUS (Aliansi Rakyat untuk SBY) or People's Alliance for SBY staged a rally near KPU's headquarter asking everybody to accept the election results. They waved banners written with the following statement: Menolak hasil pemilu = musuh rakyat = teroris or Rejecting election result = people's enemy = terrorist. Well, looks like this is just too much. Someday they will conclude critics = terrorists. I guess both parties shall respect each other. 

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Confession of "the groom-to-be"

Ahmadi AKA Ahmad Jenggot has surrendered to Special Anti-Terror Police Force on Tuesday. He is the schoolmate of Saefudin Zuhry, who has been detained earlier, for his connection to the terrorism group.

Ahmadi told police that Noor Din M Top, the most wanted police fugitive, has prepared him as "the groom" for suicide bombing. "The groom" is the term used by terrorist group for someone who will commit suicide bombing.

Amhadi and Saefudin were classmates at Madrasah Wathoniyah Islamiyah (Islamic boarding school) in Kebarongan, Kemranjen sub-regency, Banyumas Regency, Central Java. The school is only hundred meters away from the home of terrorist suspect Abu Dujana. 

According to Tempointeraktif.com, Ahmadi's home is only two kilometers from Saefudin's house or five KM from Bahrudin Latif AKA Baridin's home. Baridin, suspected as father in law of Noor Din M Top, is the head of Al-Muaddib boarding school foundation, and is currently a fugitive. Baridin disappeared from his home before police raided and "discovered" bomb materials in the backyard. (Although some suspicious of the way police "easily" found the materials)

Mahfudz, director of Al-Muaddib, admitted Saefudin and Ahmadi often came to the boarding school. Ahmadi, 39, has a daughter Nida, while his wife Rokiah is pregnant. Ahmadi makes his living from hand-sweepers. He made the sweepers himself and sell them in various areas.

Ahmadi is only one of the grooms-to-be, prepared by terrorist perpetrators like Noordin M Top. Why they want to be the "grooms"?

ZA, being interrogated by police, told police that Noordin said the suicide bombers are guaranteed "seats" in Heaven. "And when entering the Heaven's gate, 40 angels will greet you," Alex Bambang Riatmodjo, head of Central Java police, quoted ZA.

If the grooms-to-be are not satisfied nor convinced about the Heaven seat, Noordin will add a "bonus". What's the bonus? Well, the parents of the "grooms" will also get 100% guarantee for Heaven.

Imam Samudra---executed in Nusakambangan last November for his role in Bali bombing in October 2002 that killed hundreds of people, according to Tempointeraktif.com report, also used the "doctrine". He managed to order five of loyal followers to rob a gold store where they got Rp30 million to, among others, finance the Bali bombing. In October 1st, 2002, three weeks before the bombing, Imam Samudra asked these people to come to Solo, Central Java, where Imam asked their willingness to be suicide bombers.

These five people considered the "order" to heavy and rejected. Imam then used the "Heaven trick". "Not only you guys will enter the Heaven, but your parents will get assurance for Heaven as well," Imam said. One of the five, Arnasan, took the offer, while the other four rejected. It's Arnasan who finally pulled the detonator trigger and had himself killed with hundreds of people, mainly tourists.

Police found two suicide bombers in the last week's bombings at JW Marriott and Ritz-Carlton. But they have yet to identify who are they. Several people, including Ibrohim, the florist at Plaza Mutiara, has been disappeared since the bombing. Ibrohim reportedly played significant role in "gathering information" about the target and helped terrorists to bring explosive materials to the JW Marriott hotel.

Nur Said AKA Nurhasbi AKA Nurdin Aziz has initially been considered the suicide bomber at Marriott. But DNA test failed to confirm that. Nur Said is now considered the "bomb expert", inheriting the expertise from Dr Azahari. Some believe Nur Said made the bomb at Marriott and Ritz-Carlton and stayed at Marriott's room 1808. But the man taped by Marriott's CCTV when check in the hotel was the man who committed the suicide bombing.

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Five years prison for Sugiharto Wiharjo

Tanjung Karang district court, Lampung, sentenced Sugiharto Wiharjo, owner of Tripanca Bank, five years prison for embezzling Rp750 billion funds from the bank. Such a light sentence!

The sentence is lighter than prosecutors' demand of seven years prison. Worse, the businessman is only ordered to pay Rp50 billion fines for the crimes.

Court found Sugiharto Wiharjo AKA Alay of embezzling Rp750 billion from the bank he owned through various "schemes". Two directors of Tripanca Bank, Podijono Wiyatno and RE Soedarman, had also been sentenced three years and three months jail plus Rp10 billion fines in the same case.

According to witnesses and evidences found by police, the convicts embezzled the funds through dubious loans to 177 names. Tripanca Group, parent of Tripanca Bank, collapsed late last year leaving five major banks (BRI, Mandiri, Deutsche Bank, BEI, and Mega) in a massive Rp1.7 trillion losses (bad loans). Public funds from two local administrations in Lampung at the combined amount of Rp135 billion also disappeared from the bank. It is not clear how these administrations will recover. Similarly, it is not clear how the five banks will recoup their money.

But five years prison is clearly a light sentence. Prosecutors may have to read Bernie Maddoff's case.

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Where is Dewi Tantular?

Bank Century management disclosed today that it was Dewi Tantular, sister of Robert Tantular (former controlling owner of Century), who took out US$18 million of Boedi Sampoerna's funds in the bank.

Dewi Tantular was division head for notes at Bank Century. She is currently a fugitive and police has yet to find her whereabouts. Prosecutors said Robert, currently detained as suspect in the scandal, managed to ask Boedi Sampoerna to move his US$90 million funds from Surabaya branch to Jakarta.

According to Interpol data, her full name is Theresia Dewi Tantular, born February 24, 1960. She is the fugitive list alongside Al Warraq Hesham Talaat Mohammed Besheer and Rizvi Ali Rafat, both were shareholders of Bank Century.

Dewi holds a bachelor of arts in economics from Carleton University, Ottawa, Canada. She joined Bank CIC International in 1994 as a Bank Notes Division Head, and following the merger in 2004 that became Bank Century, she occupied the same position.

Where is she? Well, some said she's in Singapore. Her other brother Anton Tantular is also a fugitive in a Century-related Antaboga scandal alongside Hartawan Aluwi. Anton Tantular is also the shareholder of PT Artha Berjangka Nusantara, futures trading company. Other names listed at Artha Berjangka are Robert Soeharsono and Mustafa Boediman. Dewi, Anton, and Robert Tantular are the children of Hindarto Tantular, the owner of Bank Central Dagang (closed down even after receiving Rp1.4 trillion of Bank Indonesia's liquidity assistance).

Both Robert Tantular and Hartawan Aluwi are son-in-laws of Sukanta Tanudjaja (founder of the troubled PT Great River Industries). Their brother-in-law Sunjoto Tanudjaja is also a fugitive in a different scandal with state-owned Bank Mandiri. 

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Omar Dhani passed away

Former minister/commander of air force under Soekarno regime, Omar Dhani, passed away today at Air Force Hospital, Jakarta.

Born in Solo, Central Java, in January 23, 1924, Dhani's name has mainly been linked to the defunct Communist Party due to his approval to teach Marxism in schools and courses of Air Force. 

He studied at Royal Air Force Staff College in Andover, England in 1956. When he was 38, January 19, 1962, Soekarno promoted Dhani as minister/commander of air force.

But the controversial September 30 tragedy turned his career into an ultimate end. He was brought to extraordinary military court in 1966 as a suspect. He was sentenced to death for his "role" in the tragedy.

In December 1982, Omar Dhani and Dr Soebandrio were summoned by Higher Military Court where they got clemency. But it took 13 years for Dhani to get the freedom in August 16, 1995.

Dhani is a key "witness" of the September 30, 1965 tragedy. In an interview with Tempo magazine eight years ago, Dhani explicitly said that CIA involved in the tragedy and that they used Soeharto's hands.

Dhani also admitted he is a Soekarnoist. He also said he's not a communist, but he's not anti-communist. Dhani wrote a book titled "Pergunakanlah Hati, Tangan, dan Pikiranku: Pledoi Omar Dhani."
Omar Dhani has five children (including Perry Nursparyan Omar Dhani, Tommy Setiotomo, Omar Nuris P, Dian Sri Indrapuri) and 10 grandchildren.

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Newmont Batu Hijau gold & copper output

Newmont Mining reported 9.5% increase in gold production in its Batu Hijau mine (PT Newmont Nusa Tenggara), while copper production surged 28%.

According to Newmont's second quarter financial report, gold output for six months of 2009 was 173,000 ounces, while copper at 201 million pounds.

Equity gold and copper sales during the second quarter at Batu Hijau in Indonesia were 48,000 ounces and 47 million pounds, respectively, in line with expectations, at costs applicable to sales of $229 per ounce and $0.58 per pound, respectively. 

Total costs applicable to sales were lower than expected as a result of lower diesel costs and a higher build in ore stockpile inventory. Costs applicable to sales allocated to gold were lower than expected due to the lower allocation of costs to gold as a result of co-product accounting. 

For 2009, the Company continues to expect equity gold and copper sales of between 225,000 and 250,000 ounces and 210 and 230 million pounds, respectively, at costs applicable to sales of between $280 and $320 per ounce and $0.50 and $0.65 per pound, respectively.

In April 2009, Newmont and Sumitomo paid the required $1.7 million of the GOI's arbitration costs and in May secured the release of 31% of PTNNT's shares pledged to the Senior Lenders. In addition, the 2006 and 2007 shares have been re-offered to the local and regional governments for $109 million and $282 million, respectively. In July, Newmont and Sumitomo and the GOI agreed to value the 14% interest in PTNNT, associated with the 2008 and 2009 divestiture shares at approximately $494 million ($3.526 billion for 100%) of PTNNT, and the 2008 and 2009 divestiture shares were re-offered to the GOI. (th/ya)

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JP Morgan appeals on Kalbe case

US-based bank JP Morgan Chase has filed an appeal to Jakarta High Court to challenge the verdict of Central Jakarta district court in relation to legal battle with PT Kalbe Farma (KLBF) Tbk.

Kalbe Farma told investors that it had on July 21 received an appeal notification from Central Jakarta district court.

Early this year JP Morgan filed lawsuit against Kalbe, seeking US$19.2 million payment because, according to JP, Kalbe refused to honor two exchange-rate derivative contracts last year. Kalbe then filed counter lawsuit in Central Jakarta District Court, seeking US$120 million of compensation. Early last month, Kalbe won the case.

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Adaro shareholders restructure ownerships

PT Adaro Energy (ADRO) Tbk announces that the key shareholders intends to restructure some of their holdings of stock into a single entity called PT Adaro Strategic Investment, which directly owns 43.91% shares of ADRO.

ADRO told investors this morning that the shares of Rachmat family, Thohir family, Subianto family, Mr Edwin Soeryadjaja, and Mr Sandiaga Salahuddin Uno, are consolidated into PT Adaro Strategic Investment.

Adaro is the second largest coal producer in Indonesia with market capitalization of Rp38.4 trillion or about US$3.8 billion. So, the value of ASI's shareholding in Adaro is about US$1.7 billion. The stock has surged 140% this year. 

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Husky spent US$2 million in Indonesia

Husky Energy, Canada, has spent US$2 million for oil and gas exploration activities in Indonesia in the first half 2009. 

The amount spent is very small compared to the company's spending of US$230 million in offshore China projects in the same period.

Husky has interests in several oil and gas blocks. The Madura BD field development plan has been approved by the Government of Indonesia and Husky continues to await approval of an extension to the production sharing contract. "Engineering work has been tendered and will commence upon receipt of the PSC extension," Husky management told investors on Wednesday. 

In the East Bawean II PSC, in which Husky holds a 100% interest, the Transocean Adriatic XI jack-up rig will drill two exploration wells, the first of which was spud on July 8, 2009. 

During the second quarter of 2009, existing 2-D seismic was interpreted for Husky's 100% interest in the North Sumbawa II block, comprising 5,000 square KM in the East Java Sea. Planning is now underway to acquire 800 KM of new 2-D seismic by early next year.

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Churchill updates East Kutai coal project

Churchill Mining Plc, the Indonesia-focused mining company with a JORC-compliant resource of 3.18 billion tons of thermal coal at its East Kutai coal project, remains confident it could produce 20 million tons per annum of coal for at least 20 years despite the delay in the first JORC-compliant coal reserve statement.

"I am disappointed that the JORC category updates are taking longer than anticipated and would like to thank investors for their patience and appreciation of the vast volume of data, which needs to be analyzed to make the calculations," Paul Mazak, Managing Director of Churchill said in a statement sent to Indonesia Today. 

Churchill is presently finishing the upgrade into categories of its 3.18 billion tons JORC-compliant classifications for 1.412 billion tons (measured 118 million tons, indicated 322 MT, inferred 972 MT) of this global resource with the balance due to be modelled by July 2009.

In May 2007, Churchill announced a sales agreement to purchase a 75% interest in the East Kutai coal project from PT Techno Coal Utama. 

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Bakrie to build copper smelter

PT Multicapital, a company controlled by Bakrie Group, plans to build copper smelter in West Nusa Tenggara in a JV with PT Daerah Maju Bersaing.

The copper smelter is part of a JV agreement between Multicapital and PT Daerah Maju Bersaing, a company established by local administrations in West Nusa Tenggara, to purchase 10% shares of gold and copper producer PT Newmont Nusa Tenggara.

Others are US$4 million guaranteed payment from Multicapital to DMB per year starting next year even if Newmont doesn't pay dividend. Multicapital will have 75% shares in the JV, PT Multi Daerah Bersaing, while DMB with 25%. Multicapital will finance the acquisition of 10% NNT shares for US$391 million.

The newly deliberated Mineral and Coal Law obliges mining companies to process locally the mineral ores. Some groups have announced plans to build copper smelters in Kalimantan and Sulawesi.

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Bankruptcy lawsuit threatens Humpuss

Bisnis Indonesia reported today that Parbulk II, a company based in Norway, waits response from shipping company PT Humpuss Intermoda Transportasi (HITS) Tbk to settle its claim of US$30 million. 

Parbulk II's legal representative Tony Budidjaja said poor response will trigger the company filing bankruptcy lawsuit. At the heart of the dispute is US$30 million overdue payment from Heritage Maritime Ltd SA, a subsidiary of Humpuss which hired MV Mahakam vessel.

Heritage and Parbulk II signed bareboat charter for MV Mahakam, where HITS is the guarantor for Heritage. The charter cost is about US$38,500 per day with outstanding liabilities of US$30 million. Parbulk II, according to the report, has even asked Humpuss to return the vessel.

Humpuss Intermoda is controlled by Tommy Soeharto with total asset of Rp2.97 trillion as of December 31, 2008. Its market capitalization is currently Rp2.8 trillion. This company booked net loss of Rp66.7 billion last year against net profit of Rp240 billion in 2007 due to lower operating profit margin.

In the first quarter 2009, Humpuss reported net loss of Rp55 billion against net profit of Rp72 billion in Q1 2008 on declining margin as well.

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DNA test pointed to other suspects

The search for suicide bombers entered a new uncertainty after DNA tests confirmed that the suspected bombers are not the names widely circulated in the past few days, Nur Said and Ibrahim.

Police conducted DNA test on the family members of both Nur Said and Ibrahim. The results are not match with the bodies suspected as suicide bombers. "As a result, until now we have yet to identify the bodies (suspected suicide bombers)," Nanan Sukarna, police spokesperson said.
But police managed to publish the sketches of the bombers' faces. They have the following characteristics: the bomber at Marriott has an age between 20-40, around 165 cm tall, while the one at Ritz-Carlton (left in the picture) is about 17-20 years old, white skin, black and short hair, 180 cm tall, shoes 42-43. 

Nur said, alumni of the controversial Islamic boarding school Al-Mukmin Ngruki, has been widely discussed as the suicide bomber at JW Marriott Hotel last Friday. The speculations were triggered by police statement that someone checked in the hotel in July 15 under the name of Nurdin Aziz with fake ID card.

If not Nurdin AKA Nur Hasdi AKA Nurhasbi and Ibrahim (florist at Ritz-Carlton), then who are these guys?

Professor Anak Agung Banyu Perwita told Kompas.com that they might be foreigners even though it's way too premature to make a connection with Al Qaeda network.

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Newcrest Gosowong gold output surged 37%

Newcrest Mining Limited, Australia, reported 37% lift in gold production at Gosowong due to higher grades, mill throughput, and recoveries.

Newcrest told Australia Stock Exchange (ASX) today that gold production in Gosowong reached 109,764 ounces for the second quarter 2009, increased 37% from 79,878 ounces in the first quarter 2009 and 4% higher than second quarter of 2008 at 104,065 ounces.
With averaged gold price of A$1223 in Q2 2009 and A$1352 in Q1 2009, Gosowong generated US$134 million of gold sales revenue in Q2 2009 and US$108 million in Q1 2009 or a combined US$242 million in first half 2009.
Newcrest is the controlling shareholder in Gosowong with 82.5%. Newcrest told investors that increased gold production target is 450,000 oz per annum from the project with throughput rates of 65tph by mid 2010. Gosowong is a world class epithermal goldfield with 5 million oz discovered to date. Ten drilling rigs are currently in operation from both surface and underground. Kencana field has 3.6 million oz of gold discovered to date, while Gosowong Toguraci field with 1.4 million oz. The expansion project, Newcrest said, has IRR over 50% on the current reserves. With 5 million oz and US$600 per oz, the value of Gosowong reserves is around US$3 billion. Wonder how much the project generated to the State.

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Yet another shooting at Freeport

Kompas.com reported another shooting at a convoy of busses of PT Freeport Indonesia in mile-52-53, Timika, Papua this morning. 

According to the report, a convoy of 12 busses were pushed back to the check point at mile-50 even though they were guarded by police and military officers. No casualties reported so far.

Last Friday, a convoy of trucks loaded with logistics for Freeport was also hit by shootings at mile-49. Two weeks ago, three people, including an Australian, killed in series of shootings in Timika.

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Freeport Indonesia copper & gold output surged

Freeport McMoRan (FCX) reported strong output growth at Freeport Indonesia for both copper and gold in the first six months of 2009 to compensate lower prices. Freeport Indonesia booked net sales of about US$2.87 billion in H1 2009, increased 35% from the same period last year.

FCX told New York Stock Exchange on Tuesday that copper production reached 807 million of recoverable pounds in the first half 2009, almost doubled from 422 million pounds in the same period last year. Sales increased from 436 million pounds to 801 million pounds. The average realized price for copper in the first six months of 2009 is US$2.06 per pound, dropped significantly from US$3.84 per pound in H1 2008.

Meanwhile, gold production increased from 467,000 ounces to 1.348 million ounces in the period with average realized price of US$919 per ounce, inched up slightly from US$917 in H1 2008.

As a result, combined sales revenue of Freeport Indonesia is estimated at US$2.87 billion in H1 2009 against US$2.12 billion in H1 2008. Wondering how much the company paid to Indonesian government in terms of taxes and royalties, and how much shared down to the Papuans.

FCX controls 90.64% shares in PT Freeport Indonesia. FCX share price surged 259% from its bottom at US$16.8 in December 2008 to US$60.4 in June 11, but then retreated to US$58.7 on Tuesday, July 21.

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Oilex and West Kampar block

Oilex Ltd, Australia, is trying to recover approximately US$4.1 million owed to it by PT Sumatera Persada Energi (SPE), operator of the West Kampar PSC. 

The US$4.1 million is secured by a charge over 22.5% of the interest held by SPE in the oil and gas block. Oilex is also working to ensure transfer of operatorship from SPE to Oilex or an acceptable third party. Oilex is the owner of 45% interest in the block and then resume the seismic and drilling work program, acquire approval from BPMigas (upstream oil and gas regulatory body) for the Pendalian oil field development project.

Oilex told Australia Stock Exchange (ASX) this morning that the company and SPE met in May 2009 to discuss commercial solution to the issues which involved a sale of SPE's interest to a third party whereby SPE repays its debts to Oilex and Oilex or the third party becomes the operator of the PSC.

"A number of third parties have expressed an interest and negotiations are proceeding with some of these parties," Oilex said in a statement.

Oilex is vigorously pursuing its rights under various legal agreements to recover the funds owed by SPE to Oilex. All operational activity on the PSC is currently suspended by the operator pending resolution of commercial and financial disputes within the JV.

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Dutch couple killed in the bombings

Police feared two unidentified victims of Friday's bombings are Dutch couple EJC Keaning & Pieter Burer. 

Police spokesperson Nanan Soekarno said confirmation of the couple's death is pending data from Dutch Embassy in Jakarta. The embassy claimed it lost three of its citizens.
Republika reported two death bodies have been identified. One of them is identified as Mrs EJC Keaning. The second has also been identified but police declined to disclose his name. He might be the husband of Mrs Keaning.

Rakyat Merdeka quoted Nanan that the guy, considered as husband of Mrs Keaning, is Pieter Burer. 

The couple was staying at Ritz Carlton when the bomb blast last Friday. The Dutch daily newspaper De Telegraaf reported on Monday that the couple had been the guest of Ritz-Carlton hotel while on holiday.

The third Dutch citizen has yet to be identified.

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Bankruptcy lawsuit against Davomas

Java Investment Advisory Group Incorporated and Precise Circle Limited had on July 14, 2009 filed bankruptcy lawsuit against cocoa processor PT Davomas Abadi Tbk.

Davomas told Capital Market Supervisory Agency (Bapepam) today that the company has received letter from Central Jakarta Commercial Court dated July 16, 2009 about the lawsuit. Davomas is asked to appear before judges on July 23, 2009.

Davomas defaulted interest payment for the 11% Guaranteed Senior Secured Notes due in 2011 issued by Davomas International Finance Company Pte Ltd on May 8, 2009. Davomas told Bapepam last month that it was in early discussions with a committee established by Notes holders for a possible restructuring of US$238 million 11% GSSN due 2011. 

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Stocks open higher

IDX Composite index opened higher by 1.2% this morning on optimism that Friday bombings that killed nine people and injured 53 people will not affect Indonesia's long-term prospects.

Indonesia Stock Exchange (IDX) closed on Monday for holiday. Last Friday, the composite index declined 0.5% after substantial drop in morning session to respond the bombings.

Regional and global factors also contributed to the recovery. Wall Street closed higher by 1.2% on Monday to reach 8848. Other markets in the region are mainly in positive territory this morning with Strait Times and All Ordinaries are the only exceptions. Commodities recovered in the past few days to tracking the movement of crude oil prices. Brent closed at US$66 per barrel on Monday, while in New York Mercantile Exchange the crude edged up to US$65 per barrel.

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State fertilizer cos booked US$210 M profit

PT Pupuk Sriwijaya, parent company of state-owned fertilizer producers, reported net profit of Rp2.112 trillion last year, surged 32% from 2007 on higher sales and operating margin.

According to Pusri's financial report published this morning, the company recorded net sales revenue of Rp36 trillion or about US$3.6 billion (at Rp10000/USD) last year, jumped 63% from 2007 at Rp22.2 trillion.

Pusri is the parent company of PT Petrokimia Gresik, PT Pupuk Kujang, PT Pupuk Kaltim, PT Pupuk Iskandar Muda, and PT Rekayasa Industri (engineering firm). Pupuk Kaltim is in the process to raise funds from the capital market.

Pusri booked operating profit of Rp4.78 trillion last year, increased 73% from 2007 and then net profit of Rp2.12 trillion (against Rp1.58 trillion in 2007).

Pusri had a consolidated asset of Rp31 trillion as of December 31, 2008, increased 36% from December 2007. The fertilizer companies normally produce ammonia, urea, and compound fertilizers.

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Large gold & copper porphyry discovered in Romang

Robust Resources Limited, Australia, announced this morning that exploration in the Solat Caldera, which forms the northern two-thirds of Romang Island, eastern part of Indonesia, has revealed strong evidence for the existence of at least one gold-rich multi-commodity porphyry system. 

Robust told Australia Stock Exchange (ASX) that this new discovery is in a different and distinct geological setting to Robust's initial gold-silver and base metals discovery in the Lakuwahi Caldera which forms the southern one-tird of Romang Island and where a highly successful two rig diamond program is continuing.

The coastal expression of the anomalies in the Solat Caldera is marked by extensive hydrothermal alteration with quartz/sulphide stockworking over a continuous outcrop of approximately 2 Km. Channel and grap samples along Solat Caldera returned values up to 12.3g/t gold, 6.1% copper, 6.86% lead, 15.8% zinc, and 142 g/t silver.

The northern two-thirds of Romang Island is interpreted to be a volcanic caldera similar to the Lakuwahi caldera in the South, but approximately two to two and a half times larger. It also appears older and more highly eroded than Lakuwahi.

"Recent processing of detailed aeromagnetics has indicated multiple mineral targets marked by distinct magnetic lows, interpreted to represent areas of mineralizing hydrothermal activity," Robust said.

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Terror Groups

Investigation on masterminds of Jakarta bombings that killed nine people and injured over 50 people leads to terrorist group known as Cilacap Group, based in Cilacap, Central Java. 

Some reported that Baharudin Latief AKA Baridin, leader of Cilacap Group, (some said he has been detained but others doubt), had informed police that the suicide bomber at JW Marriott last Friday is one of his members. But police has yet to confirm. DNA test is being conducted to confirm whether the suspected member, Nur Hasdi AKA Nur Sahid AKA Nurhasbi, is the suicide bomber. 

Baharudin's group reportedly has eight members, two of them might be the suicide bombers. Early last week, police found two bombs and explosive materials in the backyard of Baharudin AKA Bahrudin, leader of Al-Muaddib Islamic boarding school in Binangun, Cilacap.

June 21, 2009, police arrested Saefudin Zuhri and Abu Dujana from their homes in Cilacap, Central Java. Zuhri is considered a supplier of explosives to Palembang Group (to be explained below). Zuhri is described as nephew of Bahrudin. Bahrudin is a mysterious man. His neighbors even don't know the man who married Bahrudin's daughter Ariani Rahma three years ago. Some speculate that Noordin M. Top is the guy who married Rahma.

Palembang Group

Last April, Central Jakarta district court sentenced 18 years prison for Muhammad Hasan AKA Fajar Taslim, known as member of Palembang Group terrorism network. Hasan's colleagues, Ali Masyudi and Wahyudi, were sentenced 10 and 12 years prison respectively.

Police arrested them in July 2, 2008. Police found 20 bombs, of which 16 were considered ready to be exploded. Muhammad Hasan, Singaporean, joined Jamaah Islamyah and Osama bin Laden's network in Afghanistan. After five months of training, Hasan joined Azhari's network. This group planned to hijack airplanes and attack Changi Airport in Singapore.

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