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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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Saturday, 26 March 11
FLSMIDTH WINS MULTIMILLION DOLLAR MATERIAL HANDLING PROJECT IN INDONESIA
FLSmidth has signed a contract in Jakarta worth in excess of USD 135m (DKK 700m) with PT Adaro Indonesia, a subsidiary of PT Adaro Energy Tbk., to s ...
Saturday, 26 March 11
ADARO AIMS TO DOUBLE COAL PRODUCTION -THE JAKARTA POST
The Jakarta Post reported that, coal producer PT Adaro Indonesia is planning to soon boost its production capacity to 80 million tons annually, almo ...
Friday, 25 March 11
KNOWLEDGE INFRASTRUCTURE TO BAG 160,000 MT COAL SUPPLY ORDER FROM TNPL
COALspot.com - Delhi based Knowledge infrastructure Systems Pvt. Ltd offered lowest price of US$ 97.10 per metric ton for calorific value of 6000 GA ...
Friday, 25 March 11
THE CAPESIZE MARKET CONTINUED TO FALL - FEARNBULK
Handy
The Atlantic market remains stable with more activity from the Black Sea to Feast paying in the mid 20´s on supras.
The USG remain ...
Friday, 25 March 11
BORNEO ENERGI FY10 NET INCOME SOARS - INSIDER STORIES
Coking coal producer PT Borneo Lumbung Energi Tbk (BORN) booked a skyrocket net income by 499.72% from net loss position in 2009, as quoted by Insid ...
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- Samtan Co., Ltd - South Korea
- Sical Logistics Limited - India
- Therma Luzon, Inc, Philippines
- Economic Council, Georgia
- Edison Trading Spa - Italy
- South Luzon Thermal Energy Corporation
- Star Paper Mills Limited - India
- Australian Coal Association
- Thai Mozambique Logistica
- Power Finance Corporation Ltd., India
- Miang Besar Coal Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Siam City Cement PLC, Thailand
- McConnell Dowell - Australia
- Globalindo Alam Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Makarim & Taira - Indonesia
- Bhatia International Limited - India
- IHS Mccloskey Coal Group - USA
- Indika Energy - Indonesia
- PTC India Limited - India
- Thiess Contractors Indonesia
- Sojitz Corporation - Japan
- Bhoruka Overseas - Indonesia
- White Energy Company Limited
- Straits Asia Resources Limited - Singapore
- Banpu Public Company Limited - Thailand
- Mjunction Services Limited - India
- Meenaskhi Energy Private Limited - India
- Energy Link Ltd, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Dalmia Cement Bharat India
- Coalindo Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Oldendorff Carriers - Singapore
- Kalimantan Lumbung Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Krishnapatnam Port Company Ltd. - India
- Tamil Nadu electricity Board
- San Jose City I Power Corp, Philippines
- Lanco Infratech Ltd - India
- Trasteel International SA, Italy
- London Commodity Brokers - England
- SN Aboitiz Power Inc, Philippines
- Larsen & Toubro Limited - India
- Cigading International Bulk Terminal - Indonesia
- Mercator Lines Limited - India
- Barasentosa Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Petron Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- ASAPP Information Group - India
- Kapuas Tunggal Persada - Indonesia
- Africa Commodities Group - South Africa
- Coal and Oil Company - UAE
- Ministry of Transport, Egypt
- SMG Consultants - Indonesia
- GAC Shipping (India) Pvt Ltd
- Orica Mining Services - Indonesia
- Jaiprakash Power Ventures ltd
- European Bulk Services B.V. - Netherlands
- Energy Development Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Xindia Steels Limited - India
- Electricity Authority, New Zealand
- Bhushan Steel Limited - India
- Baramulti Group, Indonesia
- Pendopo Energi Batubara - Indonesia
- Semirara Mining Corp, Philippines
- Bangladesh Power Developement Board
- Georgia Ports Authority, United States
- Kaltim Prima Coal - Indonesia
- Karaikal Port Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Wood Mackenzie - Singapore
- The University of Queensland
- Interocean Group of Companies - India
- SMC Global Power, Philippines
- Kobexindo Tractors - Indoneisa
- Indogreen Group - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Vizag Seaport Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Global Coal Blending Company Limited - Australia
- Indian Energy Exchange, India
- Singapore Mercantile Exchange
- Wilmar Investment Holdings
- OPG Power Generation Pvt Ltd - India
- Mintek Dendrill Indonesia
- Bharathi Cement Corporation - India
- Toyota Tsusho Corporation, Japan
- Madhucon Powers Ltd - India
- Simpson Spence & Young - Indonesia
- CIMB Investment Bank - Malaysia
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- Marubeni Corporation - India
- Indian Oil Corporation Limited
- Videocon Industries ltd - India
- Romanian Commodities Exchange
- Siam City Cement - Thailand
- Riau Bara Harum - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- GMR Energy Limited - India
- Formosa Plastics Group - Taiwan
- Parliament of New Zealand
- GVK Power & Infra Limited - India
- Deloitte Consulting - India
- Australian Commodity Traders Exchange
- Planning Commission, India
- LBH Netherlands Bv - Netherlands
- Ministry of Mines - Canada
- Ministry of Finance - Indonesia
- Cement Manufacturers Association - India
- Merrill Lynch Commodities Europe
- Maheswari Brothers Coal Limited - India
- Bukit Makmur.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Uttam Galva Steels Limited - India
- Aditya Birla Group - India
- VISA Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
- Commonwealth Bank - Australia
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- Essar Steel Hazira Ltd - India
- CNBM International Corporation - China
- Posco Energy - South Korea
- Kepco SPC Power Corporation, Philippines
- MS Steel International - UAE
- Bukit Baiduri Energy - Indonesia
- Sakthi Sugars Limited - India
- Vedanta Resources Plc - India
- Kartika Selabumi Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Indonesian Coal Mining Association
- Heidelberg Cement - Germany
- Sree Jayajothi Cements Limited - India
- Goldman Sachs - Singapore
- Malabar Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Borneo Indobara - Indonesia
- Standard Chartered Bank - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Binh Thuan Hamico - Vietnam
- Manunggal Multi Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- Eastern Energy - Thailand
- Global Green Power PLC Corporation, Philippines
- Orica Australia Pty. Ltd.
- The State Trading Corporation of India Ltd
- The Treasury - Australian Government
- Central Electricity Authority - India
- New Zealand Coal & Carbon
- India Bulls Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Agrawal Coal Company - India
- Alfred C Toepfer International GmbH - Germany
- Directorate Of Revenue Intelligence - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Independent Power Producers Association of India
- Parry Sugars Refinery, India
- Tata Chemicals Ltd - India
- Chamber of Mines of South Africa
- Minerals Council of Australia
- Jorong Barutama Greston.PT - Indonesia
- Antam Resourcindo - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Latin American Coal - Colombia
- Altura Mining Limited, Indonesia
- TeaM Sual Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- Ambuja Cements Ltd - India
- IEA Clean Coal Centre - UK
- Attock Cement Pakistan Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sarangani Energy Corporation, Philippines
- Meralco Power Generation, Philippines
- PNOC Exploration Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Carbofer General Trading SA - India
- Central Java Power - Indonesia
- Renaissance Capital - South Africa
- Holcim Trading Pte Ltd - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Kumho Petrochemical, South Korea
- Gujarat Mineral Development Corp Ltd - India
- Port Waratah Coal Services - Australia
- Chettinad Cement Corporation Ltd - India
- Kideco Jaya Agung - Indonesia
- Rio Tinto Coal - Australia
- Neyveli Lignite Corporation Ltd, - India
- Karbindo Abesyapradhi - Indoneisa
- PowerSource Philippines DevCo
- Billiton Holdings Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Price Waterhouse Coopers - Russia
- Leighton Contractors Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Anglo American - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
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