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Monday, 07 February 11
COAL PRICES ON RISE: DEMAND FROM INDIA AND CHINA - ANALYZED SUNIL K KUMBHAT
 INDONESIA IS HEART OF ASIAN COAL BOOM
COALspot.com - Rising demand of Coal from India and China, coupled with global financial recovery, is driving thermal coal prices that have appreciated in the recent past few months and it is expected that the global prices of Coal shall remain firm and go up further.
Power generation is what is driving the demand of Coal in India and China . In India new coal-fired power plants, ranging in the size from 50 MW to 4,000 MW, are being built throughout India. Power plants are symbol of how rapidly India's economy is expanding.
Similarly China, shall remain a net importer of thermal coal for coming few years as it's economy is growing at firm speed and is expected to deliver mind-boggling growth in 2011. China's coal imports more than doubled to 150 million tonnes from the previous year. Closure of smaller mines, coupled with increased demand from power sector, has triggered China's demand for imported coal.
India has also emerged as one of the major importer of coal. The imports are likely to be around 100-150 million tonnes for the current year as it adds new thermal capacities. India imports about three-fourths of its coal requirement from Indonesia, while South Africa and Australia accounts for the rest.
The quality of Indonesian coal is much better than Indian coal. The gross calorific value of Indonesian coal ranges between 5,000 and 6,500 kilo calories per kilogram (kcl/kg); while for Indian coal it is only 3,000-4,500 kcl/kg- with high ash contents. Bulk of the imported coal in India is used by power companies, which use it to blend with the local coal to improve calorific value. The coal prices also depend upon the ash content and the calorific value .Indonesia’s strategic geographic location makes it the most preferred country for Indian companies for its proximity to the country, which means lower ocean freight charges and better timing compared to other countries such as Australia.
Indonesia's coal Industry has transformed itself from being an minor player in Asia's Coal market to the world's largest Exporter of Steam Coal .Indonesia has come from nowhere to challenge Australia as the world’s largest exporter of thermal coal and is expected soon to topple Australia as the largest coal exporter.
The higher energy demand in India would drive up import of coal .The overall energy generated in India could double within a decade.
Indian power sector will be heavily depend on coal for decades to come. At the same time, India's steel industry, also dependent on coal, is expected to treble its output within a decade.
But there is growing concern about where all the coal is going to come from. India has significant coal reserves suitable for power generation and boasts the world's biggest coal company - the government-owned Coal India Limited. But the expansion of the Indian economy has been so rapid, demand is outstripping domestic supply.
The government wants the economy to expand at 9-10 per cent a year to help lift millions of poor families out of poverty. But an energy supply crunch could compromise that growth target.
India has theoretically significant reserves but it will take a long time to get into actual production, There is a urgent need to re-examine the regulations and policies associated with exploration, exploitation and production. India is still not fully encouraging commercial coal mining by the private sector.
India's coal reserves are concentrated in the eastern states of Orissa, Jharkhand, Chhattisgarh, West Bengal and Madhya Pradesh, where basic logistics infrastructure (such as ports and railways) is lacking. Various government regulation concerning forestry and environmental restrictions are also hindering mine development. Unless such bottlenecks are addressed, growth in domestic coal production could be difficult.'
Due to government regulatory delays, infrastructure bottlenecks and security risks are encouraging Indian firms to look overseas to secure coal supply especially in Indonesia, South Africa, Mozambique, Australia etc. for their ambitious power projects in India.
Indonesia's thermal coal mines have a comparative advantage over Australia's because they are nearer to India but Australia's reputation as a reliable supplier is attractive to Indian buyers.’ Australian mines might be more expensive but they are reliable. Australia’s advantages are that the coal is good and the infrastructure is good'
In spit of all , Australia will face stiff competition from Indonesia - which has lower transport costs. A significant proportion of coal transport in Indonesia is water based, which allows for coal to be transported along rivers via barges to the open sea for loading onto larger vessels. Indonesia’s coal suppliers rely heavily on floating transhipment facilities due to economic reasons.
Indonesia's coal Industry has transformed itself from being an minor player in Asia's Coal market to the world's largest Exporter of Steam Coal .Indonesia has come from nowhere to challenge Australia as the world’s largest exporter of thermal coal and is expected soon to topple Australia as the largest coal exporter.
Indonesia’s government needs to accelerate reforms for foreign direct investment (FDI) in mining and energy sector to give direct control to foreign investors, in order to win confidence and attract/invite major international companies into Indonesia. There is need of more coordination between Ministry of Energy and Mineral Resources Deptt , Indonesian Investment Co-ordination Board (BKPM) ,and Various Regional administrations.
The phenomenal growth in Indonesia’s coal exports in last five years reflects the ability of its coal industry to respond to the rapid growth in Asian demand for thermal coal.
Indonesia has huge coal reserves and exporting coal to many countries for use in power plants for generating energy but it is paradoxical that Indonesia is short of energy. Many Indian companies (Tata , Reliance,Jindal ,L&T, Monnet, Adani ,Essar etc) are capable of sharing power technology and setting up mega power plants in Indonesia
Indonesian private companies can buy equity stakes in Indian power plants in exchange / barter for long-term coal supply. Since India is today one of the fastest growing economies and also has a shortage of power supply then such deals can be beneficial to both parties .Indonesian government or Indonesian companies can invite Coal barter bids (CBB) ,where from foreign companies for development of ports , Roads , Railway lines , Power Plants etc. In Coal barter bids , coal will be supplied to party who will set up Power plants or develop infrastructure etc. Coal mining in Indonesia can be an extremely lucrative sector for overall economic growth. Indonesian government should make single window clearance system to operate business in Indonesia to encourage foreign enterprises and Investment for Coal barter bids. Indonesian Coal companies are fully aware that India is a market into which they can export or thru barter transactions, its major share of Coal Production.
Today Indonesia has stable economic outlook and if reform efforts towards basic infrastructures continues it may become Economic Tiger of Asia by 2020.
Today Indonesia is the heart of the Asian Coal boom.
Analyst - Sunil K Kumbhat , Jodhpur (Rajasthan), India
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Tuesday, 29 March 11
JAPAN FACTOR RIPPLING THROUGH THE SHIPPING MARKETS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the world watching the latest developments regarding the nuclear crisis in Japan and the devastating effects of the recent tragedy that struck ...
Tuesday, 29 March 11
DUTY EXEMPTION UNLIKELY TO IMPACT COKING COAL PRICES - PTI NEWS
Press Trust of India News reported that, the exemption to certain types of coking coal from customs duty is not likely to impact steel prices at pre ...
Monday, 28 March 11
HARUM ENERGY FY10 EARNING UP 7.23% - INSIDER STORIES
Thermal coal producer PT Harum Energy Tbk (HRUM), controlled by Indonesian businessman Kiki Barki through his son Lawrence Barki, posted a slight in ...
Monday, 28 March 11
IBT RAISES CAPACITY OF PULAU LAUT TERMINAL - THE JAKARTA POST
The Jakarta Post reported that, coal infrastructure and logistics firm PT Indonesia Bulk Terminal (IBT), a subsidiary of PT Adaro Energy Tbk, plans ...
Saturday, 26 March 11
THE FREIGHT MARKET REMAINED A BIT VOLATILE THIS WEEK - CAPT. REDDY
COALspot.com - "The freight market remained a bit volatile this week", says Capt. Reddy, director of Vistaar Shipping Singapore.
Howeve ...
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- Energy Development Corp, Philippines
- ICICI Bank Limited - India
- Banpu Public Company Limited - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Sojitz Corporation - Japan
- Billiton Holdings Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Carbofer General Trading SA - India
- Medco Energi Mining Internasional
- ASAPP Information Group - India
- Gujarat Mineral Development Corp Ltd - India
- Wood Mackenzie - Singapore
- Ministry of Mines - Canada
- Grasim Industreis Ltd - India
- Gujarat Sidhee Cement - India
- PNOC Exploration Corporation - Philippines
- Africa Commodities Group - South Africa
- Binh Thuan Hamico - Vietnam
- Directorate Of Revenue Intelligence - India
- Electricity Generating Authority of Thailand
- Karaikal Port Pvt Ltd - India
- Electricity Authority, New Zealand
- Bhatia International Limited - India
- Ambuja Cements Ltd - India
- Formosa Plastics Group - Taiwan
- CNBM International Corporation - China
- Eastern Coal Council - USA
- Mintek Dendrill Indonesia
- Commonwealth Bank - Australia
- Ministry of Finance - Indonesia
- Romanian Commodities Exchange
- Independent Power Producers Association of India
- Orica Australia Pty. Ltd.
- Malabar Cements Ltd - India
- Tata Chemicals Ltd - India
- Videocon Industries ltd - India
- Minerals Council of Australia
- Cement Manufacturers Association - India
- Kobexindo Tractors - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Baramulti Group, Indonesia
- Bayan Resources Tbk. - Indonesia
- London Commodity Brokers - England
- Central Electricity Authority - India
- Tamil Nadu electricity Board
- Salva Resources Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Edison Trading Spa - Italy
- Barasentosa Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Agrawal Coal Company - India
- Chettinad Cement Corporation Ltd - India
- Semirara Mining Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- The State Trading Corporation of India Ltd
- Larsen & Toubro Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thai Mozambique Logistica
- Parry Sugars Refinery, India
- Manunggal Multi Energi - Indonesia
- McConnell Dowell - Australia
- Holcim Trading Pte Ltd - Singapore
- Coal and Oil Company - UAE
- Uttam Galva Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- OPG Power Generation Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- VISA Power Limited - India
- Orica Mining Services - Indonesia
- Intertek Mineral Services - Indonesia
- Savvy Resources Ltd - HongKong
- Aditya Birla Group - India
- Altura Mining Limited, Indonesia
- Goldman Sachs - Singapore
- Kartika Selabumi Mining - Indonesia
- Bhoruka Overseas - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bukit Baiduri Energy - Indonesia
- Wilmar Investment Holdings
- Mjunction Services Limited - India
- Indian Energy Exchange, India
- Planning Commission, India
- Directorate General of MIneral and Coal - Indonesia
- Georgia Ports Authority, United States
- Rio Tinto Coal - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Global Coal Blending Company Limited - Australia
- Sarangani Energy Corporation, Philippines
- Oldendorff Carriers - Singapore
- CIMB Investment Bank - Malaysia
- Siam City Cement - Thailand
- Thiess Contractors Indonesia
- Global Business Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Eastern Energy - Thailand
- Energy Link Ltd, New Zealand
- Australian Coal Association
- Essar Steel Hazira Ltd - India
- Price Waterhouse Coopers - Russia
- Therma Luzon, Inc, Philippines
- Samtan Co., Ltd - South Korea
- Neyveli Lignite Corporation Ltd, - India
- GVK Power & Infra Limited - India
- Australian Commodity Traders Exchange
- Coalindo Energy - Indonesia
- Latin American Coal - Colombia
- Singapore Mercantile Exchange
- IHS Mccloskey Coal Group - USA
- PowerSource Philippines DevCo
- Aboitiz Power Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Toyota Tsusho Corporation, Japan
- MS Steel International - UAE
- PetroVietnam Power Coal Import and Supply Company
- GAC Shipping (India) Pvt Ltd
- Attock Cement Pakistan Limited
- PTC India Limited - India
- Sree Jayajothi Cements Limited - India
- Economic Council, Georgia
- Petron Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Renaissance Capital - South Africa
- Marubeni Corporation - India
- Indika Energy - Indonesia
- Star Paper Mills Limited - India
- Meenaskhi Energy Private Limited - India
- Bulk Trading Sa - Switzerland
- Ministry of Transport, Egypt
- International Coal Ventures Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Borneo Indobara - Indonesia
- Makarim & Taira - Indonesia
- European Bulk Services B.V. - Netherlands
- SN Aboitiz Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Kaltim Prima Coal - Indonesia
- Posco Energy - South Korea
- Sical Logistics Limited - India
- Semirara Mining and Power Corporation, Philippines
- Bhushan Steel Limited - India
- GMR Energy Limited - India
- Indian Oil Corporation Limited
- Dalmia Cement Bharat India
- White Energy Company Limited
- Standard Chartered Bank - UAE
- Maheswari Brothers Coal Limited - India
- Coastal Gujarat Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Jindal Steel & Power Ltd - India
- Deloitte Consulting - India
- New Zealand Coal & Carbon
- SMG Consultants - Indonesia
- Bukit Makmur.PT - Indonesia
- Mercator Lines Limited - India
- Leighton Contractors Pty Ltd - Australia
- Vedanta Resources Plc - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kapuas Tunggal Persada - Indonesia
- Jaiprakash Power Ventures ltd
- Parliament of New Zealand
- Lanco Infratech Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Trasteel International SA, Italy
- San Jose City I Power Corp, Philippines
- Indogreen Group - Indonesia
- Antam Resourcindo - Indonesia
- The Treasury - Australian Government
- Chamber of Mines of South Africa
- Pendopo Energi Batubara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Power Finance Corporation Ltd., India
- SMC Global Power, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercuria Energy - Indonesia
- Bangladesh Power Developement Board
- Sindya Power Generating Company Private Ltd
- Madhucon Powers Ltd - India
- Anglo American - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- Gujarat Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Interocean Group of Companies - India
- TNB Fuel Sdn Bhd - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Iligan Light & Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Indonesian Coal Mining Association
- India Bulls Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Metalloyd Limited - United Kingdom
- Central Java Power - Indonesia
- Xindia Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Straits Asia Resources Limited - Singapore
- Merrill Lynch Commodities Europe
- TeaM Sual Corporation - Philippines
- Sakthi Sugars Limited - India
- The University of Queensland
- Simpson Spence & Young - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Heidelberg Cement - Germany
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