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Thursday, 25 November 10
ANALYSIS: COAL SECTOR: VALUE EMERGENCE - THE JAKARTA POST
 Coal demand will remain firm due to a build-up of coal-fired power plants in India, China and Indonesia. As a result, we have upgraded our coal price from US$95 per ton to a range of between $100, 105, 108, 110 and 115 per ton, respectively in 2011, 2012, 2013, 2014 and 2015 (inflation rate of 1 percent thereafter).
Additionally, Indonesia is one of the lowest cost coal producers in the world, which means that coal prices have to adjust with the incremental cost of production of higher-cost structured companies.
Thermal Seaborne coal demand is set to rise by 74 percent to 1,187 million tons in 2025 from 680 million tons in 2010, according to Coaltrans Coal Conference in Amsterdam last month. This is driven by a higher demand from China and India, which currently accounts for about 28 percent of the global thermal coal market.
China, which currently relies on coal to produce 80 percent of its power needs, is installing two new coal-fired power plants per week with capacities of 500 megawatts per plant. This pace will persist at least in the next decade, potentially doubling power capacity by 2020 and adding a 500-gigawatts new coal-fired electricity generation capacity according to the International Energy Agency. We highlight that with China consuming 43 percent of the global thermal coal production, imbalances between its indigenous production and consumption will drive global coal prices higher.
As for India, at present it imports about 8 percent of global coal production. But the number is set to grow to 25 percent by 2015. Indian thermal coal demand is expected to rise 810 million tons, or 131 percent, by 2025, driven by a 158 percent hike in coal-fired power capacity, in line with power demand, which will rise from the current 147 gigawatts to 380 gigawatts by 2025.
Meanwhile, Vietnam, which three years ago was the largest exporter of coal to China, is expected to become a net importer by 2015, putting further pressure on global supply in the medium term. Vietnam currently exports about 50 percent of its production or about 24 million tons, but this will fall to only 3 million tons, despite rising coal production from 48 million tons in 2009 to about 105 million tons in 2025.
Stripping out PT Bayan Resources’ (BYAN’s) price movements, the coal sector has underperformed the market by 9.8 percent year-to-date (ytd). We believe value is emerging, particularly for our top picks, and we raise our sector weighting to overweight.
At this stage, PT Bukit Asam (PTBA) has the highest upside potential based on Discounted Cash Flow (DCF), helped by the inclusion of the Banjarsari power project in our forecasts. We like PTBA’s railway expansion projects, which will increase PTBA’s railway capacity from 11 million tons currently to 47.7 million tons by 2015 or 82.7 million tons by 2018.
This will increase fourfold PTBA’s production from 12.7 million tons to 52.5 million tons by 2015 or by seven fold to 87.5 million tons by 2018. We also like PTBA for its government link, translating to more secured supply contracts to PLN. Additionally, we like its huge reserves (fives times Indonesia’s coal production), which will pave the way for it to become the second-largest coal producer after BUMI starting in 2018.
This means 33 percent compound annual growth rate (CAGR) for earning per share (EPS) in the next five years through 2015. It also has cash reserves of Rp 4.9 trillion with no debt and solid corporate governance. Our second pick is PT Indika Energy or INDY (+27 percent upside), due to Kideco’s strong performance (which contributes 76 percent of its pre-tax profit). This is followed by Adaro Energy (+19 percent), the largest market cap and second-highest average daily turnover after BUMI, which plans to nearly double production from about 42 million tons in 2010 to 80 million tons by 2014.
Surabhi Chopra, The writer is an analyst at PT Bahana Securities Source: The Jakarta Post
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Friday, 03 December 10
INDONESIAN LOW RANK COAL IS ATTRACTING COAL BUYERS FROM INDIA AND CHINA
COALspot.com - Bhakti Energi Persada has sold out its whole coal production until the end of 2011, Jeffry Mulyono said during McCloskey Asia P ...
Thursday, 02 December 10
INDIA'S COAL SHORTAGE TO DEEPEN NEXT YEAR - MONEY CONTROL
Money Control reported that, India's coal deficit will deepen sharply next year, its coal minister said on Tuesday, forcing Asia's third largest e ...
Thursday, 02 December 10
CIL INCHES CLOSER TO PEABODY STAKE DEAL - THE TELEGRAPH INDIA
The Telegraph India reported that, state-run Coal India Ltd (CIL) hopes to complete negotiations to buy over 10 per cent in Australian miner Peabody ...
Thursday, 02 December 10
DRY BULK MARKET WEIGHED DOWN BY CAPESIZE BLUES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The negative sentiment currently undergoing in the capesize market has kept the dry bulk market’s benchmark, the Baltic Dry Index (BDI) on the ...
Monday, 29 November 10
NUCLEAR SUPERTANKERS TO SHAKE UP SHIPPING - THIS IS MONEY
This is money reported that, plans are under way that could see nuclear-powered supertankers sailing the world’s shipping lanes, refuelling on ...
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- Indo Tambangraya Megah - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- AsiaOL BioFuels Corp., Philippines
- Bukit Makmur.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Orica Mining Services - Indonesia
- Minerals Council of Australia
- Simpson Spence & Young - Indonesia
- LBH Netherlands Bv - Netherlands
- The University of Queensland
- Bukit Baiduri Energy - Indonesia
- Renaissance Capital - South Africa
- Vedanta Resources Plc - India
- PetroVietnam Power Coal Import and Supply Company
- Grasim Industreis Ltd - India
- Eastern Coal Council - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bhushan Steel Limited - India
- Baramulti Group, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Karaikal Port Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Maheswari Brothers Coal Limited - India
- Deloitte Consulting - India
- Australian Coal Association
- Latin American Coal - Colombia
- Mercuria Energy - Indonesia
- Malabar Cements Ltd - India
- Interocean Group of Companies - India
- Kartika Selabumi Mining - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Indian Oil Corporation Limited
- Electricity Authority, New Zealand
- CIMB Investment Bank - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Savvy Resources Ltd - HongKong
- Tamil Nadu electricity Board
- Price Waterhouse Coopers - Russia
- PNOC Exploration Corporation - Philippines
- Central Electricity Authority - India
- Madhucon Powers Ltd - India
- Banpu Public Company Limited - Thailand
- Bangladesh Power Developement Board
- Altura Mining Limited, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Coal Blending Company Limited - Australia
- ICICI Bank Limited - India
- Power Finance Corporation Ltd., India
- Sinarmas Energy and Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Central Java Power - Indonesia
- Iligan Light & Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Pipit Mutiara Jaya. PT, Indonesia
- Kepco SPC Power Corporation, Philippines
- Mjunction Services Limited - India
- Petron Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Global Business Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Neyveli Lignite Corporation Ltd, - India
- PTC India Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GAC Shipping (India) Pvt Ltd
- Directorate General of MIneral and Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Makarim & Taira - Indonesia
- Videocon Industries ltd - India
- Bayan Resources Tbk. - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Planning Commission, India
- Indogreen Group - Indonesia
- VISA Power Limited - India
- Commonwealth Bank - Australia
- Posco Energy - South Korea
- New Zealand Coal & Carbon
- Thiess Contractors Indonesia
- Aditya Birla Group - India
- Coalindo Energy - Indonesia
- India Bulls Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mintek Dendrill Indonesia
- White Energy Company Limited
- Essar Steel Hazira Ltd - India
- Barasentosa Lestari - Indonesia
- Mercator Lines Limited - India
- The Treasury - Australian Government
- Manunggal Multi Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Pendopo Energi Batubara - Indonesia
- GVK Power & Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Singapore Mercantile Exchange
- Merrill Lynch Commodities Europe
- South Luzon Thermal Energy Corporation
- Ministry of Finance - Indonesia
- PowerSource Philippines DevCo
- Kideco Jaya Agung - Indonesia
- Meralco Power Generation, Philippines
- Gujarat Sidhee Cement - India
- Therma Luzon, Inc, Philippines
- Dalmia Cement Bharat India
- Kapuas Tunggal Persada - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Australian Commodity Traders Exchange
- Sarangani Energy Corporation, Philippines
- Agrawal Coal Company - India
- Indian Energy Exchange, India
- Africa Commodities Group - South Africa
- Toyota Tsusho Corporation, Japan
- IEA Clean Coal Centre - UK
- Economic Council, Georgia
- Borneo Indobara - Indonesia
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
- Larsen & Toubro Limited - India
- Edison Trading Spa - Italy
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement - Thailand
- Indonesian Coal Mining Association
- Gujarat Mineral Development Corp Ltd - India
- IHS Mccloskey Coal Group - USA
- Semirara Mining and Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Eastern Energy - Thailand
- Indika Energy - Indonesia
- Parliament of New Zealand
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- Sindya Power Generating Company Private Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Cement Manufacturers Association - India
- Trasteel International SA, Italy
- TeaM Sual Corporation - Philippines
- SMG Consultants - Indonesia
- CNBM International Corporation - China
- Leighton Contractors Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- MS Steel International - UAE
- Goldman Sachs - Singapore
- Jindal Steel & Power Ltd - India
- Oldendorff Carriers - Singapore
- Medco Energi Mining Internasional
- The State Trading Corporation of India Ltd
- Alfred C Toepfer International GmbH - Germany
- Attock Cement Pakistan Limited
- McConnell Dowell - Australia
- Siam City Cement PLC, Thailand
- Kohat Cement Company Ltd. - Pakistan
- SMC Global Power, Philippines
- Semirara Mining Corp, Philippines
- Uttam Galva Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Binh Thuan Hamico - Vietnam
- Wood Mackenzie - Singapore
- Standard Chartered Bank - UAE
- Parry Sugars Refinery, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Straits Asia Resources Limited - Singapore
- Samtan Co., Ltd - South Korea
- Ministry of Transport, Egypt
- Rio Tinto Coal - Australia
- Antam Resourcindo - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Star Paper Mills Limited - India
- Vizag Seaport Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coastal Gujarat Power Limited - India
- Anglo American - United Kingdom
- Thai Mozambique Logistica
- Kaltim Prima Coal - Indonesia
- Chamber of Mines of South Africa
- Holcim Trading Pte Ltd - Singapore
- Global Green Power PLC Corporation, Philippines
- Tata Chemicals Ltd - India
- GMR Energy Limited - India
- Intertek Mineral Services - Indonesia
- Bhatia International Limited - India
- Wilmar Investment Holdings
- Sakthi Sugars Limited - India
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Lanco Infratech Ltd - India
- Timah Investasi Mineral - Indoneisa
- Marubeni Corporation - India
- ASAPP Information Group - India
- SN Aboitiz Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- European Bulk Services B.V. - Netherlands
- Sojitz Corporation - Japan
- Carbofer General Trading SA - India
- International Coal Ventures Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Energy Link Ltd, New Zealand
- London Commodity Brokers - England
- Jaiprakash Power Ventures ltd
- Kumho Petrochemical, South Korea
- Ministry of Mines - Canada
- Directorate Of Revenue Intelligence - India
- Chettinad Cement Corporation Ltd - India
- Ambuja Cements Ltd - India
- Energy Development Corp, Philippines
- Xindia Steels Limited - India
- Riau Bara Harum - Indonesia
- Bharathi Cement Corporation - India
- Billiton Holdings Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Romanian Commodities Exchange
- Ind-Barath Power Infra Limited - India
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