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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, 25 January 11
DRY BULK RATES CONTINUED TO TUMBLE LAST WEEK - BRS
With weather-related problems affecting the short-term outlook, and new building deliveries the longer-term picture, dry bulk rates continued to tum ...
Tuesday, 25 January 11
R-POWER TO INVEST $5BN IN INDONESIA - THE TIMES OF INDIA
The Times of India reported that, In what is being seen as one of the largest foreign investments in Indonesia, Reliance Power will infuse $5 billio ...
Monday, 24 January 11
GOVT PROMISES COAL FOR PLN DESPITE PRICE SPIKES - THE JAKARTA POST
The Jakarta Post reported that, the government says state electricity company PT PLN will receive enough coal to fire its power plants, despite pric ...
Monday, 24 January 11
DRY BULK MARKETS DOWNTURN SEES NO RELIEF - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept falling for yet another week, with the industry’s benchmark, the Baltic Dry Index (BDI) losing an additional 4.79 ...
Sunday, 23 January 11
THE AVERAGE CHARTER RATE FOR CAPE SIZE VESSELS WAS AT $ 8,859 PD ALMOST CLOSE TO 2008 LOWS - VISTAAR
COALspot.com - The BDI continues to drop and saw a drop of about 5 pct this week closing at 1,370 points. “ In May 2010 the BDI touched ...
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- Energy Development Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- Billiton Holdings Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Borneo Indobara - Indonesia
- Posco Energy - South Korea
- San Jose City I Power Corp, Philippines
- Sakthi Sugars Limited - India
- Sindya Power Generating Company Private Ltd
- Minerals Council of Australia
- London Commodity Brokers - England
- Jindal Steel & Power Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Meralco Power Generation, Philippines
- Deloitte Consulting - India
- Sojitz Corporation - Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Oil Corporation Limited
- Bhatia International Limited - India
- Power Finance Corporation Ltd., India
- Petrochimia International Co. Ltd.- Taiwan
- South Luzon Thermal Energy Corporation
- Coal and Oil Company - UAE
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Aditya Birla Group - India
- Latin American Coal - Colombia
- Ceylon Electricity Board - Sri Lanka
- Kaltim Prima Coal - Indonesia
- GVK Power & Infra Limited - India
- Edison Trading Spa - Italy
- Kideco Jaya Agung - Indonesia
- Bayan Resources Tbk. - Indonesia
- Global Green Power PLC Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Planning Commission, India
- Intertek Mineral Services - Indonesia
- Xindia Steels Limited - India
- Siam City Cement - Thailand
- Toyota Tsusho Corporation, Japan
- European Bulk Services B.V. - Netherlands
- Orica Australia Pty. Ltd.
- Samtan Co., Ltd - South Korea
- Sinarmas Energy and Mining - Indonesia
- Vizag Seaport Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Wilmar Investment Holdings
- Mercator Lines Limited - India
- Independent Power Producers Association of India
- Gujarat Mineral Development Corp Ltd - India
- Central Java Power - Indonesia
- Eastern Energy - Thailand
- Australian Commodity Traders Exchange
- OPG Power Generation Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Bhushan Steel Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Parliament of New Zealand
- Ministry of Transport, Egypt
- Siam City Cement PLC, Thailand
- Directorate Of Revenue Intelligence - India
- Savvy Resources Ltd - HongKong
- The University of Queensland
- Parry Sugars Refinery, India
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Energy Exchange, India
- LBH Netherlands Bv - Netherlands
- Heidelberg Cement - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Antam Resourcindo - Indonesia
- Port Waratah Coal Services - Australia
- Maheswari Brothers Coal Limited - India
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- Kobexindo Tractors - Indoneisa
- Agrawal Coal Company - India
- PetroVietnam Power Coal Import and Supply Company
- Kumho Petrochemical, South Korea
- Merrill Lynch Commodities Europe
- Indogreen Group - Indonesia
- Vedanta Resources Plc - India
- Energy Link Ltd, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- PTC India Limited - India
- Baramulti Group, Indonesia
- Petron Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Kepco SPC Power Corporation, Philippines
- Thiess Contractors Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- MS Steel International - UAE
- Semirara Mining and Power Corporation, Philippines
- Mjunction Services Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Therma Luzon, Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Price Waterhouse Coopers - Russia
- Vijayanagar Sugar Pvt Ltd - India
- Indonesian Coal Mining Association
- Semirara Mining Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Central Electricity Authority - India
- Bhoruka Overseas - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Medco Energi Mining Internasional
- Madhucon Powers Ltd - India
- Lanco Infratech Ltd - India
- Georgia Ports Authority, United States
- Star Paper Mills Limited - India
- International Coal Ventures Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Dalmia Cement Bharat India
- Larsen & Toubro Limited - India
- TeaM Sual Corporation - Philippines
- Electricity Generating Authority of Thailand
- Pendopo Energi Batubara - Indonesia
- Attock Cement Pakistan Limited
- Manunggal Multi Energi - Indonesia
- Altura Mining Limited, Indonesia
- Barasentosa Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- Malabar Cements Ltd - India
- Australian Coal Association
- Commonwealth Bank - Australia
- Mercuria Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Cement Manufacturers Association - India
- CNBM International Corporation - China
- Directorate General of MIneral and Coal - Indonesia
- Bharathi Cement Corporation - India
- Goldman Sachs - Singapore
- Singapore Mercantile Exchange
- GMR Energy Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bangladesh Power Developement Board
- Meenaskhi Energy Private Limited - India
- Electricity Authority, New Zealand
- Carbofer General Trading SA - India
- Timah Investasi Mineral - Indoneisa
- White Energy Company Limited
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- Jaiprakash Power Ventures ltd
- Bulk Trading Sa - Switzerland
- Iligan Light & Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Sical Logistics Limited - India
- PNOC Exploration Corporation - Philippines
- Ministry of Mines - Canada
- VISA Power Limited - India
- Gujarat Sidhee Cement - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- The Treasury - Australian Government
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Uttam Galva Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- IEA Clean Coal Centre - UK
- ICICI Bank Limited - India
- Rio Tinto Coal - Australia
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- New Zealand Coal & Carbon
- Mintek Dendrill Indonesia
- Videocon Industries ltd - India
- PowerSource Philippines DevCo
- Sarangani Energy Corporation, Philippines
- SMC Global Power, Philippines
- Leighton Contractors Pty Ltd - Australia
- Chamber of Mines of South Africa
- Trasteel International SA, Italy
- SMG Consultants - Indonesia
- Interocean Group of Companies - India
- Jorong Barutama Greston.PT - Indonesia
- Grasim Industreis Ltd - India
- The State Trading Corporation of India Ltd
- Wood Mackenzie - Singapore
- AsiaOL BioFuels Corp., Philippines
- Sree Jayajothi Cements Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Marubeni Corporation - India
- Tata Chemicals Ltd - India
- Thai Mozambique Logistica
- Indo Tambangraya Megah - Indonesia
- IHS Mccloskey Coal Group - USA
- ASAPP Information Group - India
- Ministry of Finance - Indonesia
- Makarim & Taira - Indonesia
- Anglo American - United Kingdom
- Economic Council, Georgia
- Ind-Barath Power Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Riau Bara Harum - Indonesia
- Chettinad Cement Corporation Ltd - India
- Africa Commodities Group - South Africa
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Romanian Commodities Exchange
- Karaikal Port Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Ambuja Cements Ltd - India
- Renaissance Capital - South Africa
- Simpson Spence & Young - Indonesia
- Indika Energy - Indonesia
- India Bulls Power Limited - India
- Rashtriya Ispat Nigam Limited - India
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