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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, 01 March 11
GANGAVARAM PORT, AN INDIAN MODERN PORT CREATES RECORD
COALspot.com - Gangavaram Port, the deepest and the most modern port in India creates yet another record by discharging 65349 MT Coking Coal in 24 h ...
Monday, 28 February 11
COAL INDIA HIKES PRICES BY 12% FOR SELECT CONSUMERS - ECONOMIC TIMES
Economic Times reported that, Coal India has raised prices by an average 12% for some of its consumers from Sunday, boosting its revenue by 6,000 cr ...
Saturday, 26 February 11
CIL TO HIKE COAL PRICES BY 15 PC FROM TONIGHT - THE TIMES OF INDIA
The Times of India reported that, an Indian State-run coal producer, Coal India will raise the price of coal on an average by about 15 per cent with ...
Saturday, 26 February 11
SUPRAMAX INDEX WAS UP ABOUT 10 PERCENT THIS WEEK - VISTAAR
COALspot.com - The market started on a weak note and seemed to have lost the momentum seen the previous week. The main sectors affected were Cape an ...
Saturday, 26 February 11
PEABODY ENERGY ENTERS INTO COAL SOURCING AGREEMENT ACCESSING INDONESIAN COAL FOR EXPORT
Peabody Energy today said it has entered into an agreement with Indonesia's PT Cahaya Energi Mandiri (CEM) to source 2 million tons of coal for Asi ...
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- Vizag Seaport Private Limited - India
- Iligan Light & Power Inc, Philippines
- SMC Global Power, Philippines
- Manunggal Multi Energi - Indonesia
- Mercuria Energy - Indonesia
- Orica Mining Services - Indonesia
- Salva Resources Pvt Ltd - India
- MS Steel International - UAE
- Semirara Mining and Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- AsiaOL BioFuels Corp., Philippines
- South Luzon Thermal Energy Corporation
- Karaikal Port Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Authority, New Zealand
- IHS Mccloskey Coal Group - USA
- Therma Luzon, Inc, Philippines
- Bangladesh Power Developement Board
- Siam City Cement PLC, Thailand
- Australian Commodity Traders Exchange
- Power Finance Corporation Ltd., India
- Kalimantan Lumbung Energi - Indonesia
- Banpu Public Company Limited - Thailand
- The State Trading Corporation of India Ltd
- Madhucon Powers Ltd - India
- LBH Netherlands Bv - Netherlands
- Semirara Mining Corp, Philippines
- Thiess Contractors Indonesia
- Larsen & Toubro Limited - India
- Samtan Co., Ltd - South Korea
- Intertek Mineral Services - Indonesia
- Bhatia International Limited - India
- Medco Energi Mining Internasional
- Agrawal Coal Company - India
- VISA Power Limited - India
- Eastern Coal Council - USA
- Cement Manufacturers Association - India
- IEA Clean Coal Centre - UK
- Kohat Cement Company Ltd. - Pakistan
- Energy Development Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Ministry of Transport, Egypt
- Leighton Contractors Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- Mjunction Services Limited - India
- Standard Chartered Bank - UAE
- Cigading International Bulk Terminal - Indonesia
- PowerSource Philippines DevCo
- Neyveli Lignite Corporation Ltd, - India
- Independent Power Producers Association of India
- Toyota Tsusho Corporation, Japan
- Kaltim Prima Coal - Indonesia
- Indian Oil Corporation Limited
- Borneo Indobara - Indonesia
- PNOC Exploration Corporation - Philippines
- Aditya Birla Group - India
- Goldman Sachs - Singapore
- The Treasury - Australian Government
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Economic Council, Georgia
- Global Business Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kepco SPC Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- ASAPP Information Group - India
- Antam Resourcindo - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Minerals Council of Australia
- Indonesian Coal Mining Association
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- White Energy Company Limited
- Formosa Plastics Group - Taiwan
- Bukit Baiduri Energy - Indonesia
- Chamber of Mines of South Africa
- Kobexindo Tractors - Indoneisa
- Vedanta Resources Plc - India
- Makarim & Taira - Indonesia
- Interocean Group of Companies - India
- Miang Besar Coal Terminal - Indonesia
- New Zealand Coal & Carbon
- Parliament of New Zealand
- Karbindo Abesyapradhi - Indoneisa
- ICICI Bank Limited - India
- Eastern Energy - Thailand
- Romanian Commodities Exchange
- Gujarat Mineral Development Corp Ltd - India
- Uttam Galva Steels Limited - India
- Baramulti Group, Indonesia
- Bharathi Cement Corporation - India
- Orica Australia Pty. Ltd.
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Simpson Spence & Young - Indonesia
- Commonwealth Bank - Australia
- CIMB Investment Bank - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Finance - Indonesia
- Bukit Makmur.PT - Indonesia
- GMR Energy Limited - India
- Deloitte Consulting - India
- Star Paper Mills Limited - India
- Jaiprakash Power Ventures ltd
- Essar Steel Hazira Ltd - India
- Coal and Oil Company - UAE
- McConnell Dowell - Australia
- Coalindo Energy - Indonesia
- Thai Mozambique Logistica
- Planning Commission, India
- Edison Trading Spa - Italy
- Ceylon Electricity Board - Sri Lanka
- Bayan Resources Tbk. - Indonesia
- Tamil Nadu electricity Board
- Sakthi Sugars Limited - India
- Ambuja Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- Bhushan Steel Limited - India
- Billiton Holdings Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Lanco Infratech Ltd - India
- Barasentosa Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Australian Coal Association
- Gujarat Sidhee Cement - India
- Indo Tambangraya Megah - Indonesia
- Posco Energy - South Korea
- Sical Logistics Limited - India
- Bhoruka Overseas - Indonesia
- Metalloyd Limited - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Altura Mining Limited, Indonesia
- PTC India Limited - India
- Marubeni Corporation - India
- Sree Jayajothi Cements Limited - India
- Carbofer General Trading SA - India
- Singapore Mercantile Exchange
- CNBM International Corporation - China
- GAC Shipping (India) Pvt Ltd
- Videocon Industries ltd - India
- Directorate Of Revenue Intelligence - India
- Kideco Jaya Agung - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Indogreen Group - Indonesia
- Mercator Lines Limited - India
- Indika Energy - Indonesia
- Heidelberg Cement - Germany
- Savvy Resources Ltd - HongKong
- Global Coal Blending Company Limited - Australia
- Straits Asia Resources Limited - Singapore
- Central Electricity Authority - India
- London Commodity Brokers - England
- Binh Thuan Hamico - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Ministry of Mines - Canada
- Parry Sugars Refinery, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Georgia Ports Authority, United States
- Krishnapatnam Port Company Ltd. - India
- Jorong Barutama Greston.PT - Indonesia
- Electricity Generating Authority of Thailand
- Global Green Power PLC Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Africa Commodities Group - South Africa
- SN Aboitiz Power Inc, Philippines
- Dalmia Cement Bharat India
- Trasteel International SA, Italy
- Ind-Barath Power Infra Limited - India
- Central Java Power - Indonesia
- Riau Bara Harum - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- TeaM Sual Corporation - Philippines
- Xindia Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- Grasim Industreis Ltd - India
- Tata Chemicals Ltd - India
- Merrill Lynch Commodities Europe
- Energy Link Ltd, New Zealand
- Siam City Cement - Thailand
- Price Waterhouse Coopers - Russia
- Rashtriya Ispat Nigam Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Renaissance Capital - South Africa
- Asmin Koalindo Tuhup - Indonesia
- India Bulls Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- GVK Power & Infra Limited - India
- Sojitz Corporation - Japan
- Kartika Selabumi Mining - Indonesia
- Pendopo Energi Batubara - Indonesia
- Indian Energy Exchange, India
- Chettinad Cement Corporation Ltd - India
- Mintek Dendrill Indonesia
- Wilmar Investment Holdings
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Malabar Cements Ltd - India
- Wood Mackenzie - Singapore
- Attock Cement Pakistan Limited
- Bulk Trading Sa - Switzerland
- Sarangani Energy Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Latin American Coal - Colombia
- Vijayanagar Sugar Pvt Ltd - India
- The University of Queensland
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