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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 February 11
SUPRAMAX MARKET IS IMPROVING IN THE PACIFIC
BRS - A 10% rise in the BDI this week, mostly on the back of Panamax rates and improvements in the Supramax market in the Pacific. For the Capes, ra ...
Monday, 21 February 11
CHURCHILL MINING RECEIVES SIGNIFICANT INTEREST, PROPOSALS TO DEVELOP EAST KUTAI COAL PROJECT - PROACTIVE INVESTORS
Proactive Investors reported that, Churchill Mining has received a number of specific proposals to fund and develop its massive East Kutai coa ...
Monday, 21 February 11
ABOLISH 5% DUTY ON COAL IMPORTS: SHINDE
Indian Express reported that, with acute coal shortage of domestic coal threatening to destabilise its power generation plans, the power ministry ha ...
Saturday, 19 February 11
THE FREIGHT MARKET EXPECTED TO BE STEADY NEXT WEEK - VISTAAR
COALspot.com - The market was quite firm this week with freight rates in South east asia and India/Feast almost up by 30 pct.
However towards end ...
Thursday, 17 February 11
COAL-GEN EUROPE 2011 REAFFIRMS THE IMPORTANCE OF COAL
Press Release: The third COAL-GEN Europe conference and exhibition, kicked off on Tuesday 15 February, with leading experts, professionals and compa ...
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- Orica Australia Pty. Ltd.
- SN Aboitiz Power Inc, Philippines
- Planning Commission, India
- Antam Resourcindo - Indonesia
- Makarim & Taira - Indonesia
- Economic Council, Georgia
- Independent Power Producers Association of India
- Gujarat Mineral Development Corp Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Bharathi Cement Corporation - India
- Simpson Spence & Young - Indonesia
- Riau Bara Harum - Indonesia
- Mercator Lines Limited - India
- Billiton Holdings Pty Ltd - Australia
- Indika Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- McConnell Dowell - Australia
- PNOC Exploration Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Deloitte Consulting - India
- Kohat Cement Company Ltd. - Pakistan
- Timah Investasi Mineral - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- ASAPP Information Group - India
- Xindia Steels Limited - India
- Thai Mozambique Logistica
- Indogreen Group - Indonesia
- Wood Mackenzie - Singapore
- Energy Development Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Chettinad Cement Corporation Ltd - India
- Africa Commodities Group - South Africa
- The University of Queensland
- Vizag Seaport Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Renaissance Capital - South Africa
- Iligan Light & Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- Trasteel International SA, Italy
- India Bulls Power Limited - India
- European Bulk Services B.V. - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Singapore Mercantile Exchange
- Kideco Jaya Agung - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Asmin Koalindo Tuhup - Indonesia
- GVK Power & Infra Limited - India
- Price Waterhouse Coopers - Russia
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- Borneo Indobara - Indonesia
- Karaikal Port Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Essar Steel Hazira Ltd - India
- Meralco Power Generation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Mintek Dendrill Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tata Chemicals Ltd - India
- Samtan Co., Ltd - South Korea
- Posco Energy - South Korea
- Leighton Contractors Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- ICICI Bank Limited - India
- Romanian Commodities Exchange
- Pendopo Energi Batubara - Indonesia
- The Treasury - Australian Government
- Carbofer General Trading SA - India
- Indonesian Coal Mining Association
- PetroVietnam Power Coal Import and Supply Company
- Meenaskhi Energy Private Limited - India
- Formosa Plastics Group - Taiwan
- Chamber of Mines of South Africa
- Edison Trading Spa - Italy
- Power Finance Corporation Ltd., India
- Interocean Group of Companies - India
- PTC India Limited - India
- SMG Consultants - Indonesia
- Madhucon Powers Ltd - India
- Eastern Energy - Thailand
- Sarangani Energy Corporation, Philippines
- GMR Energy Limited - India
- Ceylon Electricity Board - Sri Lanka
- Ministry of Transport, Egypt
- Kaltim Prima Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- Agrawal Coal Company - India
- TNB Fuel Sdn Bhd - Malaysia
- Latin American Coal - Colombia
- Kepco SPC Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Cigading International Bulk Terminal - Indonesia
- White Energy Company Limited
- Maheswari Brothers Coal Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- LBH Netherlands Bv - Netherlands
- Sindya Power Generating Company Private Ltd
- Attock Cement Pakistan Limited
- Altura Mining Limited, Indonesia
- Indian Energy Exchange, India
- Coastal Gujarat Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Vedanta Resources Plc - India
- Semirara Mining Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- VISA Power Limited - India
- Orica Mining Services - Indonesia
- CNBM International Corporation - China
- Kalimantan Lumbung Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Central Java Power - Indonesia
- Toyota Tsusho Corporation, Japan
- Gujarat Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Bangladesh Power Developement Board
- Heidelberg Cement - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- SMC Global Power, Philippines
- IEA Clean Coal Centre - UK
- Global Green Power PLC Corporation, Philippines
- Parliament of New Zealand
- Bulk Trading Sa - Switzerland
- Anglo American - United Kingdom
- Globalindo Alam Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- Central Electricity Authority - India
- Sical Logistics Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Bhoruka Overseas - Indonesia
- Minerals Council of Australia
- New Zealand Coal & Carbon
- Karbindo Abesyapradhi - Indoneisa
- Standard Chartered Bank - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ambuja Cements Ltd - India
- San Jose City I Power Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Lanco Infratech Ltd - India
- Tamil Nadu electricity Board
- Maharashtra Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Sinarmas Energy and Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Cement Manufacturers Association - India
- Global Coal Blending Company Limited - Australia
- Metalloyd Limited - United Kingdom
- Larsen & Toubro Limited - India
- South Luzon Thermal Energy Corporation
- Ministry of Finance - Indonesia
- Sakthi Sugars Limited - India
- Rio Tinto Coal - Australia
- Ministry of Mines - Canada
- Grasim Industreis Ltd - India
- Kobexindo Tractors - Indoneisa
- Therma Luzon, Inc, Philippines
- Malabar Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Bhatia International Limited - India
- Rashtriya Ispat Nigam Limited - India
- Sojitz Corporation - Japan
- Miang Besar Coal Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Parry Sugars Refinery, India
- Aditya Birla Group - India
- Bukit Makmur.PT - Indonesia
- CIMB Investment Bank - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Mercuria Energy - Indonesia
- Videocon Industries ltd - India
- Electricity Generating Authority of Thailand
- Medco Energi Mining Internasional
- Electricity Authority, New Zealand
- Commonwealth Bank - Australia
- Straits Asia Resources Limited - Singapore
- Binh Thuan Hamico - Vietnam
- Australian Commodity Traders Exchange
- Merrill Lynch Commodities Europe
- TeaM Sual Corporation - Philippines
- Marubeni Corporation - India
- Bhushan Steel Limited - India
- Banpu Public Company Limited - Thailand
- Wilmar Investment Holdings
- Eastern Coal Council - USA
- Coal and Oil Company - UAE
- Alfred C Toepfer International GmbH - Germany
- Goldman Sachs - Singapore
- Port Waratah Coal Services - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Energy Link Ltd, New Zealand
- Georgia Ports Authority, United States
- Indian Oil Corporation Limited
- MS Steel International - UAE
- PowerSource Philippines DevCo
- Baramulti Group, Indonesia
- Manunggal Multi Energi - Indonesia
- Gujarat Sidhee Cement - India
- Intertek Mineral Services - Indonesia
- Oldendorff Carriers - Singapore
- Star Paper Mills Limited - India
- AsiaOL BioFuels Corp., Philippines
- Dalmia Cement Bharat India
- London Commodity Brokers - England
- Australian Coal Association
- Petron Corporation, Philippines
- Mjunction Services Limited - India
- Kumho Petrochemical, South Korea
- Siam City Cement - Thailand
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