Management Discussion & Analysis

The distribution of the COVID-19 vaccine provides a forward impetus for the global economy. Supported by the distribution of vaccines and the return of people’s normal activities, the IMF predicted that the global economy growth would reach approximately 5.9% in 2021. The World Bank’s prediction was not so far off, which is in the range of 5.5%. Along with these growth predictions, super power countries such as the United States, China and the European Union would gain significant economic growth momentum in 2021. However, due to the aftershocks of the Covid19 Omicron variant, inflation rates in these countries had to be watched out for because they could affect the economic growth of the whole world.

Indonesia’s economy throughout 2021 grew by 3.69% (c-to-c). This growth was higher than 2020 of -2.07 percent due to the Covid-19 pandemic that hit the entire world, including Indonesia. Previously, the Indonesian economy was estimated to grow by 4.43%, but there was a revision to this figure due to the increase in the delta variant of Covid-19 cases in June 2021 which suppressed economic growth.

According to data released on the official website of the Ministry of Energy and Mineral Resources (ESDM), coal prices experienced a sharp increase in 2021. This increasing trend will provide optimism for industry players in the coal sector.

The Indonesian Reference Coal Price (HBA) opened at $75.84 per tonne in January 2021. Since then, Indonesia’s HBA has experienced a significant increase every month accompanied by the amount of coal production so that in December 2021 the number of coal production in 2021 increased by 7, 2% compared to the previous year to 606.22 million tons. The highest HBA reached $215.01 per tonne in November 2021 before dropping back to $159.79 per tonne in December 2021. Overall, coal experienced an increase in price of 168.01% (y-on-y) and economic growth by 4%. The obstacle to the decline in the HBA in December accompanied by the production was caused by weather that disrupted the operation in the mining area.