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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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Saturday, 22 January 11
POSSIBLE COAL EXPORT RESTRICTIONS ON INDONESIA UNLIKELY TO AFFECT CHURCHILL MINING - PROACTIVE INVESTORS
Proactive Investors reported that, Churchill Mining moved to reassure investors after a fall in its share price, stating that from talks with the au ...
Thursday, 20 January 11
INDONESIA MAY BAN LOW-QUALITY COAL EXPORTS FROM 2014 - BLOOMBERG
Bloomberg reported that, The Indonesian government plans to ban exports of coal with an energy value of less than 5,600 kilocalories a kilogram star ...
Thursday, 20 January 11
SUPRAS ARE DOING USD 7- 8K FOR INDONESIA-INDIA - FEARNBULK
Handy
Negative sentiment for forward positions in the Atlantic market due to lack of cargo availability and too many ballasters from the East. Con ...
Thursday, 20 January 11
ITMG TARGETS TO PRODUCE 25 MILLION TONS OF COAL THIS YEAR - BISNIS INDONESIA
Bisnis Indonesia reported that, Coal producer PT Indo Tambangraya Megah Tbk (ITMG) targets to produce 25 million tons of coal this year, a 13. ...
Thursday, 20 January 11
DRY BULK MARKETS FALL SEES NO END - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Pundits indicating that the dry bulk market’s sentiment remains weak were justified, as the industry’s benchmark, the Baltic Dry Index ( ...
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- Maheswari Brothers Coal Limited - India
- Indonesian Coal Mining Association
- Marubeni Corporation - India
- The State Trading Corporation of India Ltd
- Borneo Indobara - Indonesia
- European Bulk Services B.V. - Netherlands
- Bayan Resources Tbk. - Indonesia
- The University of Queensland
- Agrawal Coal Company - India
- SMG Consultants - Indonesia
- McConnell Dowell - Australia
- Jaiprakash Power Ventures ltd
- Petrochimia International Co. Ltd.- Taiwan
- Interocean Group of Companies - India
- Madhucon Powers Ltd - India
- Formosa Plastics Group - Taiwan
- GAC Shipping (India) Pvt Ltd
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
- Goldman Sachs - Singapore
- The Treasury - Australian Government
- Baramulti Group, Indonesia
- Kartika Selabumi Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Karaikal Port Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Tata Chemicals Ltd - India
- Central Java Power - Indonesia
- Bulk Trading Sa - Switzerland
- White Energy Company Limited
- Cigading International Bulk Terminal - Indonesia
- Vizag Seaport Private Limited - India
- Energy Link Ltd, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement PLC, Thailand
- LBH Netherlands Bv - Netherlands
- Gujarat Sidhee Cement - India
- Siam City Cement - Thailand
- Mercuria Energy - Indonesia
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
- Makarim & Taira - Indonesia
- OPG Power Generation Pvt Ltd - India
- Sojitz Corporation - Japan
- Economic Council, Georgia
- Sree Jayajothi Cements Limited - India
- Uttam Galva Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- Ministry of Finance - Indonesia
- Directorate Of Revenue Intelligence - India
- Indian Energy Exchange, India
- Pipit Mutiara Jaya. PT, Indonesia
- Coalindo Energy - Indonesia
- Dalmia Cement Bharat India
- Posco Energy - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- PowerSource Philippines DevCo
- Commonwealth Bank - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Meralco Power Generation, Philippines
- Videocon Industries ltd - India
- Riau Bara Harum - Indonesia
- Bukit Makmur.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Vijayanagar Sugar Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- SMC Global Power, Philippines
- Mjunction Services Limited - India
- Salva Resources Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Iligan Light & Power Inc, Philippines
- GVK Power & Infra Limited - India
- Deloitte Consulting - India
- Aboitiz Power Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- Singapore Mercantile Exchange
- Alfred C Toepfer International GmbH - Germany
- Gujarat Mineral Development Corp Ltd - India
- Jindal Steel & Power Ltd - India
- Parliament of New Zealand
- Simpson Spence & Young - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Star Paper Mills Limited - India
- India Bulls Power Limited - India
- Romanian Commodities Exchange
- VISA Power Limited - India
- Coastal Gujarat Power Limited - India
- Kideco Jaya Agung - Indonesia
- Trasteel International SA, Italy
- Barasentosa Lestari - Indonesia
- Bhatia International Limited - India
- Kobexindo Tractors - Indoneisa
- Bhoruka Overseas - Indonesia
- Thiess Contractors Indonesia
- Coal and Oil Company - UAE
- Straits Asia Resources Limited - Singapore
- Attock Cement Pakistan Limited
- Gujarat Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Port Waratah Coal Services - Australia
- Ambuja Cements Ltd - India
- Thai Mozambique Logistica
- CIMB Investment Bank - Malaysia
- Metalloyd Limited - United Kingdom
- Tamil Nadu electricity Board
- Bahari Cakrawala Sebuku - Indonesia
- Petron Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Bangladesh Power Developement Board
- Grasim Industreis Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Indo Tambangraya Megah - Indonesia
- Mintek Dendrill Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Rio Tinto Coal - Australia
- Planning Commission, India
- Krishnapatnam Port Company Ltd. - India
- Sical Logistics Limited - India
- Semirara Mining Corp, Philippines
- Renaissance Capital - South Africa
- ICICI Bank Limited - India
- Indika Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Xindia Steels Limited - India
- Larsen & Toubro Limited - India
- Kapuas Tunggal Persada - Indonesia
- Therma Luzon, Inc, Philippines
- Georgia Ports Authority, United States
- Eastern Energy - Thailand
- AsiaOL BioFuels Corp., Philippines
- Indogreen Group - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Lanco Infratech Ltd - India
- Australian Coal Association
- New Zealand Coal & Carbon
- Ministry of Mines - Canada
- Electricity Generating Authority of Thailand
- Minerals Council of Australia
- Kalimantan Lumbung Energi - Indonesia
- Oldendorff Carriers - Singapore
- Edison Trading Spa - Italy
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- Power Finance Corporation Ltd., India
- Meenaskhi Energy Private Limited - India
- Mercator Lines Limited - India
- PNOC Exploration Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Global Business Power Corporation, Philippines
- MS Steel International - UAE
- CNBM International Corporation - China
- Chettinad Cement Corporation Ltd - India
- Merrill Lynch Commodities Europe
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sakthi Sugars Limited - India
- Central Electricity Authority - India
- Samtan Co., Ltd - South Korea
- Sindya Power Generating Company Private Ltd
- Altura Mining Limited, Indonesia
- Indian Oil Corporation Limited
- Medco Energi Mining Internasional
- South Luzon Thermal Energy Corporation
- Standard Chartered Bank - UAE
- Global Coal Blending Company Limited - Australia
- Manunggal Multi Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Intertek Mineral Services - Indonesia
- Eastern Coal Council - USA
- Anglo American - United Kingdom
- IHS Mccloskey Coal Group - USA
- Global Green Power PLC Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Latin American Coal - Colombia
- Chamber of Mines of South Africa
- Kohat Cement Company Ltd. - Pakistan
- Wood Mackenzie - Singapore
- Ceylon Electricity Board - Sri Lanka
- Energy Development Corp, Philippines
- Kumho Petrochemical, South Korea
- Leighton Contractors Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- TeaM Sual Corporation - Philippines
- Electricity Authority, New Zealand
- Bharathi Cement Corporation - India
- Bhushan Steel Limited - India
- Orica Australia Pty. Ltd.
- Maharashtra Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- ASAPP Information Group - India
- Orica Mining Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Africa Commodities Group - South Africa
- International Coal Ventures Pvt Ltd - India
- London Commodity Brokers - England
- Heidelberg Cement - Germany
- Carbofer General Trading SA - India
- Globalindo Alam Lestari - Indonesia
- PTC India Limited - India
- Kepco SPC Power Corporation, Philippines
- Wilmar Investment Holdings
- IEA Clean Coal Centre - UK
- Vedanta Resources Plc - India
- Ind-Barath Power Infra Limited - India
- Cement Manufacturers Association - India
- Banpu Public Company Limited - Thailand
- Ministry of Transport, Egypt
- Semirara Mining and Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Independent Power Producers Association of India
- Parry Sugars Refinery, India
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