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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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Wednesday, 19 January 11
DRY BULK MARKET HAS BOTTOMED OUT, AS WEATHER IN AUSTRALIA DIALS DOWN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has finally halted its plunge, after a devastating week of yet more losses. The industry’s benchmark, the Baltic Dry Index ...
Tuesday, 18 January 11
MINISTRY SEEKS COAL FROM INDONESIA - SUNDAY OBSERVER
Sunday Observer reported that, Ministry of Power and Energy is to explore the possibilities of importing quality coal from Indonesia.
Minister Pa ...
Tuesday, 18 January 11
DRY BULK MARKET HAS BOTTOMED OUT, AS WEATHER IN AUSTRALIA DIALS DOWN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has finally halted its plunge, after a devastating week of yet more losses. The industry’s benchmark, the Baltic Dry Index ...
Sunday, 16 January 11
STANCHART GLOBAL RESEARCH SEES COAL PRICE RISING ON SUPPLY DISRUPTION - BURSA MALAYSIA MARKET NEWS
Bursa Malaysia Market News reported that, Standard Chartered Global Research has upgraded its 2011 forecasts for global thermal coal prices based on ...
Saturday, 15 January 11
SUPRAMAX VESSELS FIXED AROUND $ 8K FOR TRIP VIA INDONESIA TO INDIA - VISTAAR
COALspot.com - The BDI continues to drop and has touched below 1,500 points with the cape index severely affected with the index touching 1,595 poin ...
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- McConnell Dowell - Australia
- Sindya Power Generating Company Private Ltd
- PTC India Limited - India
- San Jose City I Power Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Australian Coal Association
- Ministry of Finance - Indonesia
- Maheswari Brothers Coal Limited - India
- Price Waterhouse Coopers - Russia
- New Zealand Coal & Carbon
- Edison Trading Spa - Italy
- Borneo Indobara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Bulk Trading Sa - Switzerland
- Karbindo Abesyapradhi - Indoneisa
- Malabar Cements Ltd - India
- Mjunction Services Limited - India
- Thai Mozambique Logistica
- Ambuja Cements Ltd - India
- Global Business Power Corporation, Philippines
- Singapore Mercantile Exchange
- Meralco Power Generation, Philippines
- Ministry of Transport, Egypt
- Wilmar Investment Holdings
- Electricity Generating Authority of Thailand
- Chettinad Cement Corporation Ltd - India
- Economic Council, Georgia
- Maharashtra Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Orica Australia Pty. Ltd.
- Vedanta Resources Plc - India
- Wood Mackenzie - Singapore
- IEA Clean Coal Centre - UK
- Deloitte Consulting - India
- Mercator Lines Limited - India
- South Luzon Thermal Energy Corporation
- AsiaOL BioFuels Corp., Philippines
- Petron Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Semirara Mining Corp, Philippines
- Bhatia International Limited - India
- Ind-Barath Power Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- Videocon Industries ltd - India
- Makarim & Taira - Indonesia
- MS Steel International - UAE
- Savvy Resources Ltd - HongKong
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement - Thailand
- Bhoruka Overseas - Indonesia
- Grasim Industreis Ltd - India
- ASAPP Information Group - India
- Parry Sugars Refinery, India
- Sakthi Sugars Limited - India
- Sojitz Corporation - Japan
- Meenaskhi Energy Private Limited - India
- Anglo American - United Kingdom
- Directorate Of Revenue Intelligence - India
- Energy Development Corp, Philippines
- Georgia Ports Authority, United States
- Latin American Coal - Colombia
- Thiess Contractors Indonesia
- Sree Jayajothi Cements Limited - India
- Therma Luzon, Inc, Philippines
- Energy Link Ltd, New Zealand
- Central Java Power - Indonesia
- Indogreen Group - Indonesia
- ICICI Bank Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Carbofer General Trading SA - India
- Eastern Coal Council - USA
- Planning Commission, India
- CNBM International Corporation - China
- Global Coal Blending Company Limited - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Kartika Selabumi Mining - Indonesia
- Indian Energy Exchange, India
- Leighton Contractors Pty Ltd - Australia
- Kohat Cement Company Ltd. - Pakistan
- Indian Oil Corporation Limited
- Indo Tambangraya Megah - Indonesia
- Baramulti Group, Indonesia
- Bayan Resources Tbk. - Indonesia
- Jindal Steel & Power Ltd - India
- Interocean Group of Companies - India
- Indonesian Coal Mining Association
- Rio Tinto Coal - Australia
- Altura Mining Limited, Indonesia
- Africa Commodities Group - South Africa
- Toyota Tsusho Corporation, Japan
- Central Electricity Authority - India
- Global Green Power PLC Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- The Treasury - Australian Government
- Commonwealth Bank - Australia
- SN Aboitiz Power Inc, Philippines
- Tata Chemicals Ltd - India
- London Commodity Brokers - England
- Barasentosa Lestari - Indonesia
- Australian Commodity Traders Exchange
- Vizag Seaport Private Limited - India
- Simpson Spence & Young - Indonesia
- Indika Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Miang Besar Coal Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate General of MIneral and Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Samtan Co., Ltd - South Korea
- Standard Chartered Bank - UAE
- Pendopo Energi Batubara - Indonesia
- Tamil Nadu electricity Board
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mintek Dendrill Indonesia
- Kumho Petrochemical, South Korea
- India Bulls Power Limited - India
- TeaM Sual Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Bharathi Cement Corporation - India
- Salva Resources Pvt Ltd - India
- Xindia Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Essar Steel Hazira Ltd - India
- VISA Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Trasteel International SA, Italy
- PowerSource Philippines DevCo
- GN Power Mariveles Coal Plant, Philippines
- OPG Power Generation Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Posco Energy - South Korea
- Larsen & Toubro Limited - India
- Ministry of Mines - Canada
- Mercuria Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Agrawal Coal Company - India
- Sarangani Energy Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Kobexindo Tractors - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Chamber of Mines of South Africa
- Renaissance Capital - South Africa
- Port Waratah Coal Services - Australia
- Power Finance Corporation Ltd., India
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- Medco Energi Mining Internasional
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Mineral Development Corp Ltd - India
- Iligan Light & Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GAC Shipping (India) Pvt Ltd
- Straits Asia Resources Limited - Singapore
- Metalloyd Limited - United Kingdom
- Madhucon Powers Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kaltim Prima Coal - Indonesia
- Heidelberg Cement - Germany
- Bhushan Steel Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- GMR Energy Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- GVK Power & Infra Limited - India
- Eastern Energy - Thailand
- Manunggal Multi Energi - Indonesia
- The University of Queensland
- Marubeni Corporation - India
- Romanian Commodities Exchange
- Cement Manufacturers Association - India
- IHS Mccloskey Coal Group - USA
- Siam City Cement PLC, Thailand
- White Energy Company Limited
- Electricity Authority, New Zealand
- Uttam Galva Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Gujarat Sidhee Cement - India
- Sical Logistics Limited - India
- Aditya Birla Group - India
- Dalmia Cement Bharat India
- Bukit Makmur.PT - Indonesia
- Parliament of New Zealand
- European Bulk Services B.V. - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Star Paper Mills Limited - India
- Binh Thuan Hamico - Vietnam
- Goldman Sachs - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- Bangladesh Power Developement Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Antam Resourcindo - Indonesia
- Attock Cement Pakistan Limited
- Merrill Lynch Commodities Europe
- Semirara Mining and Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Formosa Plastics Group - Taiwan
- SMC Global Power, Philippines
- Independent Power Producers Association of India
- SMG Consultants - Indonesia
- Globalindo Alam Lestari - Indonesia
- Lanco Infratech Ltd - India
- Karaikal Port Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Coal and Oil Company - UAE
- Krishnapatnam Port Company Ltd. - India
- Minerals Council of Australia
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