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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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Monday, 14 March 11
IRON ORE TRADING WORLD EUROPE 2011
Press Release - Strategy and opportunity for miners, steelmakers, end users and the financial community.
The iron ore spot market is growing at a ...
Sunday, 13 March 11
COAL NO LONGER A CHEAP ENERGY SOURCE - THE SUNDAY LEADER
The Sunday Leader reported that, the addition of power generated through coal power to the country’s national grid was initially expected to r ...
Sunday, 13 March 11
THE FREIGHT MARKET SEEMS WILL BE FIRM FOR MARCH AND APRIL - VISTAAR
COALspot.com - The freight market continued to rise with the BDI crossing 1500 points and the cape size index up by 32 pct and all other segments al ...
Friday, 11 March 11
THE HANDY MARKET IS QUITE VOLATILE
Handy
Lacklustre week as the USG is the only bright light with high volumes of petcoke/coal into the Med (paying mid 20´s bss aps USG). Litt ...
Thursday, 10 March 11
DRY BULK MARKET SHOWING SIGNS OF STRONGER RECOVERY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market jumped by 3.37% yesterday, with the industry’s benchmark, the Baltic Dry Index (BDI), moving up to 1,472 points, levels no ...
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- Aditya Birla Group - India
- Kapuas Tunggal Persada - Indonesia
- Jaiprakash Power Ventures ltd
- Directorate General of MIneral and Coal - Indonesia
- ICICI Bank Limited - India
- Larsen & Toubro Limited - India
- Globalindo Alam Lestari - Indonesia
- Central Java Power - Indonesia
- Orica Mining Services - Indonesia
- Anglo American - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Power Finance Corporation Ltd., India
- Ministry of Mines - Canada
- Sinarmas Energy and Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Vedanta Resources Plc - India
- Petrochimia International Co. Ltd.- Taiwan
- GVK Power & Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Wilmar Investment Holdings
- Kumho Petrochemical, South Korea
- Barasentosa Lestari - Indonesia
- Independent Power Producers Association of India
- Interocean Group of Companies - India
- Parry Sugars Refinery, India
- MS Steel International - UAE
- Savvy Resources Ltd - HongKong
- Africa Commodities Group - South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mjunction Services Limited - India
- Deloitte Consulting - India
- Bayan Resources Tbk. - Indonesia
- Kobexindo Tractors - Indoneisa
- Siam City Cement PLC, Thailand
- Eastern Coal Council - USA
- Australian Coal Association
- Formosa Plastics Group - Taiwan
- Sakthi Sugars Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- OPG Power Generation Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Global Green Power PLC Corporation, Philippines
- Borneo Indobara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indo Tambangraya Megah - Indonesia
- Kideco Jaya Agung - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Parliament of New Zealand
- Global Business Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Jindal Steel & Power Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- New Zealand Coal & Carbon
- CNBM International Corporation - China
- Minerals Council of Australia
- Renaissance Capital - South Africa
- Sree Jayajothi Cements Limited - India
- Wood Mackenzie - Singapore
- Sindya Power Generating Company Private Ltd
- Meralco Power Generation, Philippines
- Straits Asia Resources Limited - Singapore
- Binh Thuan Hamico - Vietnam
- Eastern Energy - Thailand
- Commonwealth Bank - Australia
- Miang Besar Coal Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- Ministry of Finance - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- Karaikal Port Pvt Ltd - India
- Baramulti Group, Indonesia
- SMG Consultants - Indonesia
- Electricity Authority, New Zealand
- Leighton Contractors Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- The University of Queensland
- Ind-Barath Power Infra Limited - India
- Manunggal Multi Energi - Indonesia
- Gujarat Sidhee Cement - India
- TeaM Sual Corporation - Philippines
- Trasteel International SA, Italy
- Meenaskhi Energy Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- VISA Power Limited - India
- Attock Cement Pakistan Limited
- Vizag Seaport Private Limited - India
- San Jose City I Power Corp, Philippines
- The Treasury - Australian Government
- Bhatia International Limited - India
- ASAPP Information Group - India
- Kartika Selabumi Mining - Indonesia
- GMR Energy Limited - India
- Australian Commodity Traders Exchange
- SMC Global Power, Philippines
- Carbofer General Trading SA - India
- Thai Mozambique Logistica
- European Bulk Services B.V. - Netherlands
- Lanco Infratech Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Mercator Lines Limited - India
- Grasim Industreis Ltd - India
- CIMB Investment Bank - Malaysia
- PTC India Limited - India
- Samtan Co., Ltd - South Korea
- GAC Shipping (India) Pvt Ltd
- Malabar Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Antam Resourcindo - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ambuja Cements Ltd - India
- Thiess Contractors Indonesia
- Alfred C Toepfer International GmbH - Germany
- Petron Corporation, Philippines
- Xindia Steels Limited - India
- Siam City Cement - Thailand
- Bharathi Cement Corporation - India
- Coal and Oil Company - UAE
- The State Trading Corporation of India Ltd
- Videocon Industries ltd - India
- Medco Energi Mining Internasional
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Electricity Generating Authority of Thailand
- Makarim & Taira - Indonesia
- Tata Chemicals Ltd - India
- Romanian Commodities Exchange
- Aboitiz Power Corporation - Philippines
- Goldman Sachs - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Oil Corporation Limited
- Bhoruka Overseas - Indonesia
- Price Waterhouse Coopers - Russia
- Georgia Ports Authority, United States
- IHS Mccloskey Coal Group - USA
- Intertek Mineral Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Sical Logistics Limited - India
- Indian Energy Exchange, India
- Simpson Spence & Young - Indonesia
- Planning Commission, India
- Madhucon Powers Ltd - India
- Economic Council, Georgia
- Iligan Light & Power Inc, Philippines
- Ministry of Transport, Egypt
- PowerSource Philippines DevCo
- Heidelberg Cement - Germany
- LBH Netherlands Bv - Netherlands
- Oldendorff Carriers - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Tamil Nadu electricity Board
- Semirara Mining and Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Therma Luzon, Inc, Philippines
- South Luzon Thermal Energy Corporation
- Coalindo Energy - Indonesia
- Marubeni Corporation - India
- White Energy Company Limited
- Indika Energy - Indonesia
- Mercuria Energy - Indonesia
- London Commodity Brokers - England
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Riau Bara Harum - Indonesia
- Energy Development Corp, Philippines
- Dalmia Cement Bharat India
- Sojitz Corporation - Japan
- Holcim Trading Pte Ltd - Singapore
- Bukit Baiduri Energy - Indonesia
- Bangladesh Power Developement Board
- Sarangani Energy Corporation, Philippines
- Cement Manufacturers Association - India
- Agrawal Coal Company - India
- Bhushan Steel Limited - India
- Latin American Coal - Colombia
- PNOC Exploration Corporation - Philippines
- Semirara Mining Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Indonesian Coal Mining Association
- McConnell Dowell - Australia
- Banpu Public Company Limited - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Standard Chartered Bank - UAE
- Asmin Koalindo Tuhup - Indonesia
- SN Aboitiz Power Inc, Philippines
- Posco Energy - South Korea
- Energy Link Ltd, New Zealand
- Chettinad Cement Corporation Ltd - India
- Toyota Tsusho Corporation, Japan
- IEA Clean Coal Centre - UK
- Bukit Makmur.PT - Indonesia
- Central Electricity Authority - India
- AsiaOL BioFuels Corp., Philippines
- International Coal Ventures Pvt Ltd - India
- Edison Trading Spa - Italy
- Salva Resources Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- India Bulls Power Limited - India
- Rio Tinto Coal - Australia
- Orica Australia Pty. Ltd.
- Altura Mining Limited, Indonesia
- Bulk Trading Sa - Switzerland
- Star Paper Mills Limited - India
- Coastal Gujarat Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Mintek Dendrill Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
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