This is adapted from some analysts...
Coal prices are generally denominated in USD and a bulk of their costs are denominated in Rupuah, as such, industry players could be net beneficiaries of a weakening Rupiah instead.
Separately CS also highlighted that Coal stocks have performed strongly yesterday, increasing 8-17% relative to the IDX on the back of better-than expected China PMI and IDR weakness, considering that they are beneficiaries of the IDR depreciation.
Coal prices may be in danger of slipping towards a four-year-low, but having reached parity with the cost of production in certain mines, Accenture is optimistic that they will rebound in about 10 months' time.
This would be good news for the growing cluster of coal-related firms on the Singapore Exchange (SGX).
Thermal coal at the Australian port of Newcastle, the Asian benchmark for the commodity used to fuel power stations, has fallen 17 per cent this year and now trades below US$80 a tonne.
This has sent shares for Indonesian coal producer Geo Energy Resources, the only pure coal play on the SGX so far, down 26 per cent this year to 37 cents.
Another firm Falcon Energy holds commercial rights for two coal concessions in Indonesia, while at least two more - NH Ceramics and United Fiber System - are in the midst of reverse takeovers to turn into Indonesian coal mining firms.
"The current (coal) price is reaching the limit of what can make a coal mine profitable," said Ogan Kose, managing director in commodities trading and investment at Accenture.
According to the consultancy, the cost of production in Australia is between US$80 and US$87 a tonne, and US$60-US$65 a tonne in Indonesia where coal is of poorer quality.
Indonesia and Australia - the largest coal exporters in the world - have continued to increase the supply of coal this year, even as growth in demand for coal from countries including China has dropped.
In a bid to curtail pollution, China, which accounts for more than 50 per cent of global demand, in June proposed an import ban on low-quality coal.
If implemented, as much as one-third of Indonesia's exports could be blocked, the Financial Times had reported following analysts' estimates.
But Mr Kose said of the Chinese measure: "I don't believe a word of it.
"At the end of the day, it's not like you can switch from one feedstock to another (easily)."
Other forms of energy feedstock cost significantly more, he said. "There's a significant cost which I don't think China is ready to commit to, to preserve its industry base."
"At the moment, coal is significantly cheap on a calorific value compared to the alternatives, which are mainly gas and fuel oil."
Nonetheless, coal prices, in his view, have already reached the bottom, and will rise in the mid to long term, exceeding US$100 per tonne in 18 months.
Coal will remain the primary source of energy through 2030, as demand - of which the Asia-Pacific will account for as much as 80 per cent - for low cost energy to support economic growth stays resilient, he added.
Geo Energy share price has gone below Jim Roger purchase price of $0.355 and call option price of $0.35. Will Geo Energy stay afloat its IPO price of $0.325 or will Jim Rogers purchase more of its shares below the call option price of $0.35?
In my opinion, it will be great to have Jim Rogers becoming a substantial shareholder of Geo Energy. Jim Rogers has recently purchase 6,100lots of ASIAPHOS LIMITED in IPO.