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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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Wednesday, 09 March 11
INDONESIA HAS SET THE MARCH 2011 INDONESIAN COAL REFERENCE PRICE FOR THERMAL COAL AT US$ 122.43 PER TON
COALspot.com - Indonesia’s Ministry of Energy and Mineral Resources has set the March 2011 Indonesian Coal Reference Price for thermal c ...
Tuesday, 08 March 11
US$ 8 BILLION WORTH OF INFRASTRUCTURE PROJECTS IN PIPELINE IN INDONESIA - WOOD MACKENZIE
India’s Increasing Demand for Thermal Coal Cannot Be Satisfied Without Emerging Coal Areas in Indonesia - Wood Mackenzie
At Coa ...
Tuesday, 08 March 11
INDIA'S VEDANTA TO ACQUIRE COAL MINES IN OVERSEAS
COALspot.com - India's Vedanta group is also looking at long-term off take agreements and possible acquire of coal mines overseas, the official sai ...
Tuesday, 08 March 11
MINERS SAY VALUE-ADDED LAW WILL HURT IN THE LONG RUN - THE JAKARTA GLOBE
The Jakarta Globe reported that, Government plans to require miners to give added value to their exported commodities could end up costing the count ...
Tuesday, 08 March 11
THE PANAMAX MARKET THIS WEEK FIRMED UP - BRS
Underlining the unpredictability of the current market, rates for all dry bulk segments swung up again last week. Stronger exports out of South Amer ...
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- GVK Power & Infra Limited - India
- SMG Consultants - Indonesia
- Indian Energy Exchange, India
- Bukit Baiduri Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Australian Commodity Traders Exchange
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- Coal and Oil Company - UAE
- Jorong Barutama Greston.PT - Indonesia
- SN Aboitiz Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Wilmar Investment Holdings
- Riau Bara Harum - Indonesia
- Eastern Energy - Thailand
- Cement Manufacturers Association - India
- Malabar Cements Ltd - India
- Baramulti Group, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining and Power Corporation, Philippines
- Carbofer General Trading SA - India
- Planning Commission, India
- Aboitiz Power Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Asmin Koalindo Tuhup - Indonesia
- The Treasury - Australian Government
- Global Green Power PLC Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- New Zealand Coal & Carbon
- Port Waratah Coal Services - Australia
- Formosa Plastics Group - Taiwan
- Petrochimia International Co. Ltd.- Taiwan
- The State Trading Corporation of India Ltd
- Mercuria Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- SMC Global Power, Philippines
- Tata Chemicals Ltd - India
- Deloitte Consulting - India
- OPG Power Generation Pvt Ltd - India
- Commonwealth Bank - Australia
- Salva Resources Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Jaiprakash Power Ventures ltd
- Globalindo Alam Lestari - Indonesia
- Standard Chartered Bank - UAE
- Thiess Contractors Indonesia
- Toyota Tsusho Corporation, Japan
- Sinarmas Energy and Mining - Indonesia
- Videocon Industries ltd - India
- Siam City Cement - Thailand
- Madhucon Powers Ltd - India
- Posco Energy - South Korea
- AsiaOL BioFuels Corp., Philippines
- Bhatia International Limited - India
- Indika Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Antam Resourcindo - Indonesia
- Borneo Indobara - Indonesia
- Ind-Barath Power Infra Limited - India
- Coalindo Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
- Essar Steel Hazira Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Xindia Steels Limited - India
- Trasteel International SA, Italy
- Anglo American - United Kingdom
- Kepco SPC Power Corporation, Philippines
- Bhushan Steel Limited - India
- Banpu Public Company Limited - Thailand
- CNBM International Corporation - China
- Ceylon Electricity Board - Sri Lanka
- Kideco Jaya Agung - Indonesia
- Ministry of Mines - Canada
- Sindya Power Generating Company Private Ltd
- Iligan Light & Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Mjunction Services Limited - India
- Independent Power Producers Association of India
- Maheswari Brothers Coal Limited - India
- Economic Council, Georgia
- Bulk Trading Sa - Switzerland
- Alfred C Toepfer International GmbH - Germany
- Pendopo Energi Batubara - Indonesia
- Australian Coal Association
- Straits Asia Resources Limited - Singapore
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- Makarim & Taira - Indonesia
- Oldendorff Carriers - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Attock Cement Pakistan Limited
- Central Electricity Authority - India
- Bangladesh Power Developement Board
- PTC India Limited - India
- Sakthi Sugars Limited - India
- GMR Energy Limited - India
- Indogreen Group - Indonesia
- Simpson Spence & Young - Indonesia
- Dalmia Cement Bharat India
- Energy Development Corp, Philippines
- Africa Commodities Group - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ICICI Bank Limited - India
- Orica Australia Pty. Ltd.
- Interocean Group of Companies - India
- Holcim Trading Pte Ltd - Singapore
- VISA Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Romanian Commodities Exchange
- Central Java Power - Indonesia
- White Energy Company Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Uttam Galva Steels Limited - India
- Larsen & Toubro Limited - India
- Indonesian Coal Mining Association
- Directorate General of MIneral and Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- Price Waterhouse Coopers - Russia
- Bharathi Cement Corporation - India
- Altura Mining Limited, Indonesia
- Vedanta Resources Plc - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ASAPP Information Group - India
- IHS Mccloskey Coal Group - USA
- Binh Thuan Hamico - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- McConnell Dowell - Australia
- Bayan Resources Tbk. - Indonesia
- San Jose City I Power Corp, Philippines
- Global Business Power Corporation, Philippines
- London Commodity Brokers - England
- Indian Oil Corporation Limited
- Goldman Sachs - Singapore
- Bhoruka Overseas - Indonesia
- Manunggal Multi Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- Agrawal Coal Company - India
- Bukit Makmur.PT - Indonesia
- GAC Shipping (India) Pvt Ltd
- Chettinad Cement Corporation Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Singapore Mercantile Exchange
- Grasim Industreis Ltd - India
- Timah Investasi Mineral - Indoneisa
- Gujarat Sidhee Cement - India
- Neyveli Lignite Corporation Ltd, - India
- Ambuja Cements Ltd - India
- Ministry of Transport, Egypt
- India Bulls Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meenaskhi Energy Private Limited - India
- Energy Link Ltd, New Zealand
- IEA Clean Coal Centre - UK
- Tamil Nadu electricity Board
- Therma Luzon, Inc, Philippines
- Marubeni Corporation - India
- Barasentosa Lestari - Indonesia
- PowerSource Philippines DevCo
- Edison Trading Spa - Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Power Finance Corporation Ltd., India
- Kumho Petrochemical, South Korea
- The University of Queensland
- Samtan Co., Ltd - South Korea
- Coastal Gujarat Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Star Paper Mills Limited - India
- Karaikal Port Pvt Ltd - India
- Heidelberg Cement - Germany
- Meralco Power Generation, Philippines
- Directorate Of Revenue Intelligence - India
- Wood Mackenzie - Singapore
- Ministry of Finance - Indonesia
- TeaM Sual Corporation - Philippines
- Chamber of Mines of South Africa
- Eastern Coal Council - USA
- Sical Logistics Limited - India
- CIMB Investment Bank - Malaysia
- MS Steel International - UAE
- Minerals Council of Australia
- Medco Energi Mining Internasional
- Electricity Generating Authority of Thailand
- Semirara Mining Corp, Philippines
- Metalloyd Limited - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- Thai Mozambique Logistica
- Gujarat Electricity Regulatory Commission - India
- Parliament of New Zealand
- Kartika Selabumi Mining - Indonesia
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- Krishnapatnam Port Company Ltd. - India
- Mintek Dendrill Indonesia
- Vizag Seaport Private Limited - India
- Merrill Lynch Commodities Europe
- Electricity Authority, New Zealand
- Mercator Lines Limited - India
- Parry Sugars Refinery, India
- LBH Netherlands Bv - Netherlands
- Lanco Infratech Ltd - India
- Sarangani Energy Corporation, Philippines
- Orica Mining Services - Indonesia
- Siam City Cement PLC, Thailand
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