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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, 12 January 11
BULKER DELIVERIES WEIGHING IN ON FREIGHT RATES KEEPING SENTIMENT ON A NEGATIVE MODE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A flurry of new buildings still hitting the water has caught up for good with the freight market, with capesizes unable to weather the storm. With r ...
Tuesday, 11 January 11
SUPRAMAX TRIP VIA INDONESIA TO INDIA US$ 8,000 PER DAY
Despite continued growth in the bulk trades, the delivery of new vessels is beginning to take its toll. The BDI continued its decline, finishing las ...
Tuesday, 11 January 11
DRY BULK MARKET REACHES NEW LOWS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market’s benchmark index, the Baltic Dry Index (BDI) lost further ground in the beginning of the week, following the trend of the ...
Monday, 10 January 11
MINING INVESTMENT TARGET TOO LOW - TEMPO INTERACTIVE
TEMPO Interactive reported that, the Indonesian Mining Association’s executive director, Priyo Pribadi, believes the government’s invest ...
Monday, 10 January 11
COAL MONGOLIA IS INVITING YOU TO THE INTERNATIONAL COAL SECTOR INVESTORS CONFERENCE
COALspot.com - (Press Release) - The Coal Mongolian Conference will take place at Chinggis Hotel, in Ulaanbaatar on 24-25, Feb 2011. The coal bonanz ...
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- AsiaOL BioFuels Corp., Philippines
- Wood Mackenzie - Singapore
- San Jose City I Power Corp, Philippines
- TeaM Sual Corporation - Philippines
- White Energy Company Limited
- Posco Energy - South Korea
- Meenaskhi Energy Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indonesian Coal Mining Association
- GAC Shipping (India) Pvt Ltd
- Therma Luzon, Inc, Philippines
- Chamber of Mines of South Africa
- GVK Power & Infra Limited - India
- Energy Development Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- SN Aboitiz Power Inc, Philippines
- Carbofer General Trading SA - India
- Global Green Power PLC Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Latin American Coal - Colombia
- Commonwealth Bank - Australia
- Standard Chartered Bank - UAE
- Indian Oil Corporation Limited
- Eastern Coal Council - USA
- Toyota Tsusho Corporation, Japan
- Straits Asia Resources Limited - Singapore
- Siam City Cement - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PTC India Limited - India
- Renaissance Capital - South Africa
- Billiton Holdings Pty Ltd - Australia
- Bangladesh Power Developement Board
- Metalloyd Limited - United Kingdom
- VISA Power Limited - India
- Indian Energy Exchange, India
- IEA Clean Coal Centre - UK
- Kaltim Prima Coal - Indonesia
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- Indika Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Xindia Steels Limited - India
- Thai Mozambique Logistica
- Port Waratah Coal Services - Australia
- The University of Queensland
- Georgia Ports Authority, United States
- Cigading International Bulk Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Karaikal Port Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Sidhee Cement - India
- Coal and Oil Company - UAE
- European Bulk Services B.V. - Netherlands
- Jaiprakash Power Ventures ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Intertek Mineral Services - Indonesia
- London Commodity Brokers - England
- Trasteel International SA, Italy
- Essar Steel Hazira Ltd - India
- Chettinad Cement Corporation Ltd - India
- Mercuria Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- India Bulls Power Limited - India
- Malabar Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Independent Power Producers Association of India
- Attock Cement Pakistan Limited
- Borneo Indobara - Indonesia
- Globalindo Alam Lestari - Indonesia
- Uttam Galva Steels Limited - India
- Interocean Group of Companies - India
- Maharashtra Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kumho Petrochemical, South Korea
- Videocon Industries ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Ind-Barath Power Infra Limited - India
- Marubeni Corporation - India
- Australian Coal Association
- Eastern Energy - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Singapore Mercantile Exchange
- Romanian Commodities Exchange
- Mintek Dendrill Indonesia
- Holcim Trading Pte Ltd - Singapore
- Formosa Plastics Group - Taiwan
- OPG Power Generation Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- MS Steel International - UAE
- Siam City Cement PLC, Thailand
- Medco Energi Mining Internasional
- New Zealand Coal & Carbon
- Minerals Council of Australia
- Sakthi Sugars Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sarangani Energy Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Krishnapatnam Port Company Ltd. - India
- Aboitiz Power Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Directorate Of Revenue Intelligence - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- South Luzon Thermal Energy Corporation
- Electricity Authority, New Zealand
- Riau Bara Harum - Indonesia
- Barasentosa Lestari - Indonesia
- Ministry of Mines - Canada
- GMR Energy Limited - India
- Edison Trading Spa - Italy
- IHS Mccloskey Coal Group - USA
- Sinarmas Energy and Mining - Indonesia
- McConnell Dowell - Australia
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- Mercator Lines Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aditya Birla Group - India
- Meralco Power Generation, Philippines
- Petron Corporation, Philippines
- Wilmar Investment Holdings
- Sojitz Corporation - Japan
- Mjunction Services Limited - India
- ASAPP Information Group - India
- Gujarat Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Binh Thuan Hamico - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Thiess Contractors Indonesia
- Parliament of New Zealand
- Karbindo Abesyapradhi - Indoneisa
- LBH Netherlands Bv - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Lanco Infratech Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Bharathi Cement Corporation - India
- Global Coal Blending Company Limited - Australia
- Tamil Nadu electricity Board
- PetroVietnam Power Coal Import and Supply Company
- Ceylon Electricity Board - Sri Lanka
- Jindal Steel & Power Ltd - India
- Bulk Trading Sa - Switzerland
- Electricity Generating Authority of Thailand
- Banpu Public Company Limited - Thailand
- Ministry of Finance - Indonesia
- Coalindo Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Energy Link Ltd, New Zealand
- Kepco SPC Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Grasim Industreis Ltd - India
- Makarim & Taira - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- International Coal Ventures Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Indogreen Group - Indonesia
- Indo Tambangraya Megah - Indonesia
- Parry Sugars Refinery, India
- Iligan Light & Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Anglo American - United Kingdom
- Semirara Mining Corp, Philippines
- Merrill Lynch Commodities Europe
- Sindya Power Generating Company Private Ltd
- Global Business Power Corporation, Philippines
- Goldman Sachs - Singapore
- Australian Commodity Traders Exchange
- SMG Consultants - Indonesia
- Central Java Power - Indonesia
- Sical Logistics Limited - India
- Orica Mining Services - Indonesia
- Tata Chemicals Ltd - India
- Economic Council, Georgia
- Larsen & Toubro Limited - India
- Vedanta Resources Plc - India
- TNB Fuel Sdn Bhd - Malaysia
- Simpson Spence & Young - Indonesia
- Star Paper Mills Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Baramulti Group, Indonesia
- Ambuja Cements Ltd - India
- Dalmia Cement Bharat India
- Africa Commodities Group - South Africa
- Timah Investasi Mineral - Indoneisa
- CNBM International Corporation - China
- Deloitte Consulting - India
- Agrawal Coal Company - India
- Planning Commission, India
- SMC Global Power, Philippines
- Ministry of Transport, Egypt
- Savvy Resources Ltd - HongKong
- Samtan Co., Ltd - South Korea
- Oldendorff Carriers - Singapore
- Bhoruka Overseas - Indonesia
- The State Trading Corporation of India Ltd
- Cement Manufacturers Association - India
- Price Waterhouse Coopers - Russia
- Coastal Gujarat Power Limited - India
- Kideco Jaya Agung - Indonesia
- Bukit Makmur.PT - Indonesia
- Power Finance Corporation Ltd., India
- Heidelberg Cement - Germany
- Rio Tinto Coal - Australia
- ICICI Bank Limited - India
- Madhucon Powers Ltd - India
- Central Electricity Authority - India
- PowerSource Philippines DevCo
- Pendopo Energi Batubara - Indonesia
- Altura Mining Limited, Indonesia
- Kartika Selabumi Mining - Indonesia
- Bhushan Steel Limited - India
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