Mining-based stocks to move stable

JAKARTA: Listed mining companies are believed to maintain its performance although a concern over European debt crisis potential spur speculation on declining global coal needs.Coal demand in global market is estimated to be stable considering a rising energy needs across the globe, although being overshadowed by stalled economic recovery.The performance of listed coal producer in the short term is somehow bottled up due to global sentiment, yet in the long term, it will grow vigorously, attributed by rising coal demand, said Analyst at PT Samuel Sekuritas Indonesia Muhammad Alfatih.The coal demand will still be high primarily in China and India since the alternative energy is limited. Although facing an economic slowdown like in Europe or overheating in China, electricity demand still rises, he told Bisnis last week.This rise is in line with the population growth as the energy need to back industrial activity also increases.The worsened European debt crisis will not significantly mining business prospect in the second half, said PT United Tractors Tbk President Director Sara K. Loebis.It will still grow positive, yet, we have not calculated the sale in the second semester. We believe to achieve sale volume target at 3.5 million ton-4 million ton this year.So far, United Tractors sells all its coal products to Japan. Japan has just closed down its nuclear generator in Fukushima and now seeks more coal supply as alternative energy.Sara declined to disclose United Tractors largest buyer in Japan of the total sale as per May, reaching 1.8 million ton. In rule of thumb, I can say that half of the target will be met this year while the remaining is achieved in the next semester, she said.Confirming this optimism, the company has acquired two coal mining companies, first, 20% stocks of PT Bukit Enim Energi located in Borneo, valuing IDR20 billion and PT Duta Sejahtera in Borneo, through its subsidiary PT Tuah Turangga Agung.Energy based listed company still potentially serves as market driver, said Country Head and Head of Investment Banking UBS Indonesia, Rajiv Louis. The global coal producer supposes to use this momentum to penetrate Indonesia.The valuation of Indonesias stock market is solid and backed by largest global coal mining companies whose market capitalization exceed US$300 billion, he said.Non-oal mining companies will also become the market driver in the second half.Northstar's ownershipSeparately, the stock ownership of Northstar Tambang Persada Ltd in PT Delta Dunia Makmur Tbk is reduced to 33.37% as all new stocks of Delta Dunia being disposed through rights issue is absorbed by public.Northstar, owned by Texas Pacific Group, once controlled 40.6% shares of Delta Dunia must be diluted by 16.7% since they are not participating in the right issue of PT Bukit Makmur Mandiri Utama.From Delta Dunias public expose, it is stated that 100% stocks disposes through right issue or around 1.36 billion are fully absorbed by investors after experiencing 1.2 times oversubscribe from the current shareholders.Of such corporate action, the company derived IDR1.22 trillion (US$142 million) at IDR900 per unit with par value at IDR50 per share. The proceed will be used to finance capital expenditure and working capital of Bukit Makmur, including to back the inorganic growth through acquisition.Credit Suisse Ltd and PT Mandiri Sekuritas serve as financial consultant while Milbank Tweed, Hadley & McCloy LLP and Melli Darsa & CO will act as the law consultant. (T02/NOM)