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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, 22 March 11
KRISHNAPATNAM PORT SETS ALL INDIA RECORD FOR COAL DISCHARGING
COALspot.com - "Krishnapatnam Port has set an all India record for discharging 71,587 tons of steam coal in just 24 hrs using the conventional ...
Sunday, 20 March 11
FREIGHT MARKETS COULD SOFTEN NEXT WEEK DUE TO JAPANESE PORTS CLOSURE AND LIBYAN CRISIS - VISTAAR
COALspot.com - The BDI was down by 1.98 pct (closing at 1531 points) mainly due to Cape index which was down by almost 11 pct and closed 1687 points ...
Friday, 18 March 11
FALL IN INDONESIAN COAL EXPORTS IN FEBRUARY 11
COALspot.com - Indonesian coal exports seen a fall of 10.76% during Feb 2011. The world’s largest coal exporter shipped 22.029 MMts of c ...
Thursday, 17 March 11
THE PACIFIC HANDY MARKET IS CURRENTLY STEADY - FEARNBULK
Handy
The Atlantic market is showing signs of recovery and does not seem to be affected by the Japan disaster. The market is very positional and i ...
Tuesday, 15 March 11
COAL PRODUCTION FORECAST TO SURGE ON RISING PRICES - THE JAKARTA GLOBE
The Jakarta Globe reported that, Indonesia’s coal production is forecast to increase by 20 percent this year as coal prices continue to ...
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- Siam City Cement - Thailand
- Electricity Authority, New Zealand
- Mercuria Energy - Indonesia
- SMC Global Power, Philippines
- Pendopo Energi Batubara - Indonesia
- Bulk Trading Sa - Switzerland
- Ambuja Cements Ltd - India
- Singapore Mercantile Exchange
- Miang Besar Coal Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Oldendorff Carriers - Singapore
- Indonesian Coal Mining Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parry Sugars Refinery, India
- Maharashtra Electricity Regulatory Commission - India
- Globalindo Alam Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Gujarat Sidhee Cement - India
- India Bulls Power Limited - India
- Uttam Galva Steels Limited - India
- Global Business Power Corporation, Philippines
- Malabar Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- White Energy Company Limited
- Petrochimia International Co. Ltd.- Taiwan
- Xindia Steels Limited - India
- Kideco Jaya Agung - Indonesia
- Karaikal Port Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Africa Commodities Group - South Africa
- ASAPP Information Group - India
- GN Power Mariveles Coal Plant, Philippines
- Carbofer General Trading SA - India
- Sree Jayajothi Cements Limited - India
- Sindya Power Generating Company Private Ltd
- Standard Chartered Bank - UAE
- International Coal Ventures Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Cement Manufacturers Association - India
- Heidelberg Cement - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Economic Council, Georgia
- Jaiprakash Power Ventures ltd
- Makarim & Taira - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Indo Tambangraya Megah - Indonesia
- Merrill Lynch Commodities Europe
- AsiaOL BioFuels Corp., Philippines
- Commonwealth Bank - Australia
- Straits Asia Resources Limited - Singapore
- McConnell Dowell - Australia
- Jindal Steel & Power Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- CIMB Investment Bank - Malaysia
- Holcim Trading Pte Ltd - Singapore
- Georgia Ports Authority, United States
- Central Electricity Authority - India
- Vizag Seaport Private Limited - India
- IHS Mccloskey Coal Group - USA
- Kobexindo Tractors - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Sojitz Corporation - Japan
- Agrawal Coal Company - India
- Borneo Indobara - Indonesia
- Mintek Dendrill Indonesia
- Electricity Generating Authority of Thailand
- ICICI Bank Limited - India
- Sinarmas Energy and Mining - Indonesia
- Indika Energy - Indonesia
- Bangladesh Power Developement Board
- PetroVietnam Power Coal Import and Supply Company
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Attock Cement Pakistan Limited
- Meralco Power Generation, Philippines
- Goldman Sachs - Singapore
- Independent Power Producers Association of India
- Karbindo Abesyapradhi - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- CNBM International Corporation - China
- Pipit Mutiara Jaya. PT, Indonesia
- The University of Queensland
- Global Green Power PLC Corporation, Philippines
- Power Finance Corporation Ltd., India
- Coalindo Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Chamber of Mines of South Africa
- Australian Commodity Traders Exchange
- Petron Corporation, Philippines
- Bhatia International Limited - India
- Essar Steel Hazira Ltd - India
- Altura Mining Limited, Indonesia
- South Luzon Thermal Energy Corporation
- The Treasury - Australian Government
- IEA Clean Coal Centre - UK
- Dalmia Cement Bharat India
- Port Waratah Coal Services - Australia
- Sakthi Sugars Limited - India
- Antam Resourcindo - Indonesia
- PTC India Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Aditya Birla Group - India
- Iligan Light & Power Inc, Philippines
- Interocean Group of Companies - India
- Indian Oil Corporation Limited
- Kartika Selabumi Mining - Indonesia
- Romanian Commodities Exchange
- Tata Chemicals Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Finance - Indonesia
- Rio Tinto Coal - Australia
- Bharathi Cement Corporation - India
- Minerals Council of Australia
- Orica Australia Pty. Ltd.
- Kepco SPC Power Corporation, Philippines
- Ministry of Mines - Canada
- Ceylon Electricity Board - Sri Lanka
- Barasentosa Lestari - Indonesia
- PowerSource Philippines DevCo
- Deloitte Consulting - India
- Ind-Barath Power Infra Limited - India
- Bhoruka Overseas - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Energy Development Corp, Philippines
- Eastern Energy - Thailand
- London Commodity Brokers - England
- Renaissance Capital - South Africa
- Grasim Industreis Ltd - India
- The State Trading Corporation of India Ltd
- Wilmar Investment Holdings
- Baramulti Group, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Vedanta Resources Plc - India
- Coal and Oil Company - UAE
- Semirara Mining Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Planning Commission, India
- GMR Energy Limited - India
- Edison Trading Spa - Italy
- Timah Investasi Mineral - Indoneisa
- Mjunction Services Limited - India
- Posco Energy - South Korea
- Parliament of New Zealand
- Ministry of Transport, Egypt
- Bayan Resources Tbk. - Indonesia
- Therma Luzon, Inc, Philippines
- Madhucon Powers Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Lanco Infratech Ltd - India
- Metalloyd Limited - United Kingdom
- Central Java Power - Indonesia
- Bhushan Steel Limited - India
- European Bulk Services B.V. - Netherlands
- Banpu Public Company Limited - Thailand
- Orica Mining Services - Indonesia
- Coastal Gujarat Power Limited - India
- SMG Consultants - Indonesia
- SN Aboitiz Power Inc, Philippines
- Marubeni Corporation - India
- Australian Coal Association
- Gujarat Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Sical Logistics Limited - India
- Salva Resources Pvt Ltd - India
- Eastern Coal Council - USA
- Larsen & Toubro Limited - India
- Aboitiz Power Corporation - Philippines
- Anglo American - United Kingdom
- Meenaskhi Energy Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Simpson Spence & Young - Indonesia
- Kumho Petrochemical, South Korea
- Binh Thuan Hamico - Vietnam
- Leighton Contractors Pty Ltd - Australia
- VISA Power Limited - India
- Indogreen Group - Indonesia
- LBH Netherlands Bv - Netherlands
- Thai Mozambique Logistica
- Directorate General of MIneral and Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Riau Bara Harum - Indonesia
- Bukit Makmur.PT - Indonesia
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- Kohat Cement Company Ltd. - Pakistan
- Directorate Of Revenue Intelligence - India
- Medco Energi Mining Internasional
- Formosa Plastics Group - Taiwan
- Thiess Contractors Indonesia
- GVK Power & Infra Limited - India
- New Zealand Coal & Carbon
- Global Coal Blending Company Limited - Australia
- Latin American Coal - Colombia
- Intertek Mineral Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Star Paper Mills Limited - India
- Mercator Lines Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Videocon Industries ltd - India
- Manunggal Multi Energi - Indonesia
- Tamil Nadu electricity Board
- Price Waterhouse Coopers - Russia
- Trasteel International SA, Italy
- Wood Mackenzie - Singapore
- Indian Energy Exchange, India
- Maheswari Brothers Coal Limited - India
- Savvy Resources Ltd - HongKong
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
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