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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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Thursday, 24 February 11
DRY BULK MARKET KEEPS LOSING GROUND, CAPESIZES SUFFERING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market lost further ground yesterday, as the industry’s benchmark, the Baltic Dry Index was rapidly falling, ending the session d ...
Thursday, 24 February 11
SUPRAS ARE FIXED AT CLOSE TO 10K FOR TRIPS VIA INDONESIA TO INDIA WITH COAL - FEARNBULK
Handy
After a short lived surge in rates the Atlantic market has flattened out due to too many spot vessels. The USGulf has cooled down somewhat f ...
Wednesday, 23 February 11
LIMITED AVAILABILITY OF COAL COULD TRIP MEGA POWER PLANT - THE ECONOMIC TIMES
The Economic Times, an Indian leading news paper reported that, an acute shortage of domestic coal is threatening to destabilize new power generatio ...
Wednesday, 23 February 11
DRY BULK MARKET BACK ON RETREAT MODE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The two week rise of dry bulk freight rates seems to have come to a halt this week, with the industry’s benchmark, the Baltic Dry Index (BDI) lo ...
Wednesday, 23 February 11
INDONESIA NEEDS TO REVISE EXPORT BAN ON 5600 GAD COAL EXPORT - INDUSTRY
COALspot.com - The Indonesian government may be forced to revise its 2014 timeline for the proposed ban on all low quality coal exports, Patrick Han ...
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- Antam Resourcindo - Indonesia
- ICICI Bank Limited - India
- IHS Mccloskey Coal Group - USA
- TeaM Sual Corporation - Philippines
- Electricity Generating Authority of Thailand
- Australian Coal Association
- McConnell Dowell - Australia
- OPG Power Generation Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Sojitz Corporation - Japan
- Lanco Infratech Ltd - India
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Rashtriya Ispat Nigam Limited - India
- Indika Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Aditya Birla Group - India
- Siam City Cement PLC, Thailand
- Rio Tinto Coal - Australia
- Commonwealth Bank - Australia
- Gujarat Sidhee Cement - India
- Tamil Nadu electricity Board
- India Bulls Power Limited - India
- Malabar Cements Ltd - India
- Ministry of Transport, Egypt
- Kohat Cement Company Ltd. - Pakistan
- Manunggal Multi Energi - Indonesia
- Interocean Group of Companies - India
- Barasentosa Lestari - Indonesia
- Energy Development Corp, Philippines
- Binh Thuan Hamico - Vietnam
- LBH Netherlands Bv - Netherlands
- MS Steel International - UAE
- Aboitiz Power Corporation - Philippines
- Chamber of Mines of South Africa
- Parliament of New Zealand
- Bharathi Cement Corporation - India
- Sarangani Energy Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- San Jose City I Power Corp, Philippines
- Tata Chemicals Ltd - India
- Maheswari Brothers Coal Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Meralco Power Generation, Philippines
- Directorate Of Revenue Intelligence - India
- Formosa Plastics Group - Taiwan
- Marubeni Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- White Energy Company Limited
- Videocon Industries ltd - India
- Orica Mining Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ind-Barath Power Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Leighton Contractors Pty Ltd - Australia
- Goldman Sachs - Singapore
- Timah Investasi Mineral - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Riau Bara Harum - Indonesia
- Dalmia Cement Bharat India
- Petron Corporation, Philippines
- VISA Power Limited - India
- Bukit Makmur.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Georgia Ports Authority, United States
- Indonesian Coal Mining Association
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- GVK Power & Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Billiton Holdings Pty Ltd - Australia
- Edison Trading Spa - Italy
- Deloitte Consulting - India
- TNB Fuel Sdn Bhd - Malaysia
- Xindia Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Petrochimia International Co. Ltd.- Taiwan
- Singapore Mercantile Exchange
- Wood Mackenzie - Singapore
- The State Trading Corporation of India Ltd
- Wilmar Investment Holdings
- PTC India Limited - India
- Indian Energy Exchange, India
- Mercuria Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Mercator Lines Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Miang Besar Coal Terminal - Indonesia
- The Treasury - Australian Government
- European Bulk Services B.V. - Netherlands
- Orica Australia Pty. Ltd.
- Sinarmas Energy and Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Sindya Power Generating Company Private Ltd
- SN Aboitiz Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sakthi Sugars Limited - India
- Trasteel International SA, Italy
- Star Paper Mills Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Power Finance Corporation Ltd., India
- Larsen & Toubro Limited - India
- Samtan Co., Ltd - South Korea
- Coastal Gujarat Power Limited - India
- Central Electricity Authority - India
- Eastern Energy - Thailand
- Kartika Selabumi Mining - Indonesia
- PowerSource Philippines DevCo
- Simpson Spence & Young - Indonesia
- CNBM International Corporation - China
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Standard Chartered Bank - UAE
- Australian Commodity Traders Exchange
- Baramulti Group, Indonesia
- Therma Luzon, Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Attock Cement Pakistan Limited
- Indo Tambangraya Megah - Indonesia
- Borneo Indobara - Indonesia
- SMC Global Power, Philippines
- Coal and Oil Company - UAE
- Kideco Jaya Agung - Indonesia
- Grasim Industreis Ltd - India
- Mjunction Services Limited - India
- Global Green Power PLC Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Central Java Power - Indonesia
- Iligan Light & Power Inc, Philippines
- Indogreen Group - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Independent Power Producers Association of India
- Ambuja Cements Ltd - India
- Thiess Contractors Indonesia
- Latin American Coal - Colombia
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Minerals Council of Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhoruka Overseas - Indonesia
- Ministry of Mines - Canada
- Bulk Trading Sa - Switzerland
- Global Business Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Eastern Coal Council - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Energy Link Ltd, New Zealand
- Vizag Seaport Private Limited - India
- Altura Mining Limited, Indonesia
- Semirara Mining Corp, Philippines
- The University of Queensland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Renaissance Capital - South Africa
- Essar Steel Hazira Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Thai Mozambique Logistica
- Jorong Barutama Greston.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- London Commodity Brokers - England
- New Zealand Coal & Carbon
- Africa Commodities Group - South Africa
- Kepco SPC Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Agrawal Coal Company - India
- Kapuas Tunggal Persada - Indonesia
- Romanian Commodities Exchange
- Ceylon Electricity Board - Sri Lanka
- AsiaOL BioFuels Corp., Philippines
- Salva Resources Pvt Ltd - India
- Bhatia International Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Heidelberg Cement - Germany
- Sical Logistics Limited - India
- Bukit Baiduri Energy - Indonesia
- Economic Council, Georgia
- Meenaskhi Energy Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Bangladesh Power Developement Board
- Port Waratah Coal Services - Australia
- Savvy Resources Ltd - HongKong
- Anglo American - United Kingdom
- Carbofer General Trading SA - India
- CIMB Investment Bank - Malaysia
- Bhushan Steel Limited - India
- Karaikal Port Pvt Ltd - India
- SMG Consultants - Indonesia
- Posco Energy - South Korea
- Kumho Petrochemical, South Korea
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Parry Sugars Refinery, India
- Electricity Authority, New Zealand
- Global Coal Blending Company Limited - Australia
- Makarim & Taira - Indonesia
- Oldendorff Carriers - Singapore
- Vedanta Resources Plc - India
- Cigading International Bulk Terminal - Indonesia
- Mintek Dendrill Indonesia
- Pendopo Energi Batubara - Indonesia
- ASAPP Information Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Madhucon Powers Ltd - India
- Metalloyd Limited - United Kingdom
- Coalindo Energy - Indonesia
- Cement Manufacturers Association - India
- Indian Oil Corporation Limited
- Bahari Cakrawala Sebuku - Indonesia
- IEA Clean Coal Centre - UK
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