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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, 08 January 11
AUSTRALIAN FLOODS MAY BOOST RIS COAL SALES - THE JAKARTA POST
The Jakarta Post reported that, Floods inundating Queensland have disrupted Australian coal production, and in turn may offer opportunities for Indo ...
Saturday, 08 January 11
GOVERNMENT REMAINS CAUTIOUS OVER FOREIGN INVESTMENT IN MINING SECTOR - THE JAKARTA GLOBE
The Jakarta Globe reported that, The government expects $3.2 billion of investment to flow into the mining sector this year as foreign investors tur ...
Friday, 07 January 11
14 LARGE-SCALE COAL BASES TO BE BUILT DURING 12TH FIVE-YEAR PLAN - GLOBAL TIMES
During the Twelfth Five-Year Plan period (2011-2015), China aims to build 14 large-scale coal bases, and annex and restructure 20 coal bases in orde ...
Friday, 07 January 11
JSW ENERGY LTD OF INDIA IS LOOKING FOR 45 MILLION TONS OF STEAM COAL FOR 25 YEARS
COALspot.com - Supply of 1.80 mmt (+/- 10%) of steam coal per annum for power plants at Toranagallu and Jaigad.
Accordign to JSWE's websit ...
Friday, 07 January 11
SRI LANKA NEW PORT TO OFFER SHIP FUEL IN MAY - LBO
LOB reported that, The Sri Lanka Ports Authority (SLPA) plans to start bunkering or ship fuel operations at a new port in southern Hambantota in May ...
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- Coastal Gujarat Power Limited - India
- Minerals Council of Australia
- Karaikal Port Pvt Ltd - India
- Georgia Ports Authority, United States
- Therma Luzon, Inc, Philippines
- London Commodity Brokers - England
- Indian Energy Exchange, India
- Pipit Mutiara Jaya. PT, Indonesia
- Bayan Resources Tbk. - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- OPG Power Generation Pvt Ltd - India
- Bangladesh Power Developement Board
- Carbofer General Trading SA - India
- Ministry of Mines - Canada
- Interocean Group of Companies - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Green Power PLC Corporation, Philippines
- White Energy Company Limited
- Energy Development Corp, Philippines
- Anglo American - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- Maharashtra Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Romanian Commodities Exchange
- Australian Coal Association
- Mjunction Services Limited - India
- IEA Clean Coal Centre - UK
- PTC India Limited - India
- Eastern Energy - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Straits Asia Resources Limited - Singapore
- Videocon Industries ltd - India
- Energy Link Ltd, New Zealand
- Dalmia Cement Bharat India
- Central Electricity Authority - India
- Thiess Contractors Indonesia
- Larsen & Toubro Limited - India
- The State Trading Corporation of India Ltd
- Indonesian Coal Mining Association
- New Zealand Coal & Carbon
- Star Paper Mills Limited - India
- Meenaskhi Energy Private Limited - India
- LBH Netherlands Bv - Netherlands
- PowerSource Philippines DevCo
- GVK Power & Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Sical Logistics Limited - India
- Riau Bara Harum - Indonesia
- Sojitz Corporation - Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kumho Petrochemical, South Korea
- Africa Commodities Group - South Africa
- Orica Mining Services - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Planning Commission, India
- Malabar Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- VISA Power Limited - India
- Lanco Infratech Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Sidhee Cement - India
- Miang Besar Coal Terminal - Indonesia
- Central Java Power - Indonesia
- Oldendorff Carriers - Singapore
- Semirara Mining Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Bharathi Cement Corporation - India
- Orica Australia Pty. Ltd.
- Semirara Mining and Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Petron Corporation, Philippines
- Electricity Generating Authority of Thailand
- Uttam Galva Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Indogreen Group - Indonesia
- Singapore Mercantile Exchange
- Bukit Makmur.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Edison Trading Spa - Italy
- IHS Mccloskey Coal Group - USA
- Sree Jayajothi Cements Limited - India
- Power Finance Corporation Ltd., India
- Samtan Co., Ltd - South Korea
- Makarim & Taira - Indonesia
- European Bulk Services B.V. - Netherlands
- Eastern Coal Council - USA
- Globalindo Alam Lestari - Indonesia
- Posco Energy - South Korea
- Wilmar Investment Holdings
- Rio Tinto Coal - Australia
- Barasentosa Lestari - Indonesia
- Aditya Birla Group - India
- Jorong Barutama Greston.PT - Indonesia
- Merrill Lynch Commodities Europe
- Aboitiz Power Corporation - Philippines
- Jaiprakash Power Ventures ltd
- The Treasury - Australian Government
- Ceylon Electricity Board - Sri Lanka
- Simpson Spence & Young - Indonesia
- Antam Resourcindo - Indonesia
- Medco Energi Mining Internasional
- CNBM International Corporation - China
- Economic Council, Georgia
- Bulk Trading Sa - Switzerland
- MS Steel International - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Sakthi Sugars Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Neyveli Lignite Corporation Ltd, - India
- Asmin Koalindo Tuhup - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- CIMB Investment Bank - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Parliament of New Zealand
- Trasteel International SA, Italy
- Siam City Cement - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Latin American Coal - Colombia
- India Bulls Power Limited - India
- Maheswari Brothers Coal Limited - India
- Baramulti Group, Indonesia
- Essar Steel Hazira Ltd - India
- Thai Mozambique Logistica
- Mercator Lines Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Manunggal Multi Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- SMC Global Power, Philippines
- Cement Manufacturers Association - India
- Ministry of Finance - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Commodity Traders Exchange
- Mercuria Energy - Indonesia
- Mintek Dendrill Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kobexindo Tractors - Indoneisa
- Jindal Steel & Power Ltd - India
- Grasim Industreis Ltd - India
- Siam City Cement PLC, Thailand
- Metalloyd Limited - United Kingdom
- Kartika Selabumi Mining - Indonesia
- Parry Sugars Refinery, India
- Price Waterhouse Coopers - Russia
- International Coal Ventures Pvt Ltd - India
- Chamber of Mines of South Africa
- Wood Mackenzie - Singapore
- Banpu Public Company Limited - Thailand
- Deloitte Consulting - India
- Bahari Cakrawala Sebuku - Indonesia
- SMG Consultants - Indonesia
- Sindya Power Generating Company Private Ltd
- McConnell Dowell - Australia
- Commonwealth Bank - Australia
- Bhoruka Overseas - Indonesia
- Global Coal Blending Company Limited - Australia
- Savvy Resources Ltd - HongKong
- Sarangani Energy Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- San Jose City I Power Corp, Philippines
- Indian Oil Corporation Limited
- Chettinad Cement Corporation Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indika Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- The University of Queensland
- PNOC Exploration Corporation - Philippines
- Coalindo Energy - Indonesia
- Port Waratah Coal Services - Australia
- South Luzon Thermal Energy Corporation
- Vedanta Resources Plc - India
- Borneo Indobara - Indonesia
- Attock Cement Pakistan Limited
- Ambuja Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Vizag Seaport Private Limited - India
- Global Business Power Corporation, Philippines
- Meralco Power Generation, Philippines
- GAC Shipping (India) Pvt Ltd
- Tata Chemicals Ltd - India
- Marubeni Corporation - India
- Independent Power Producers Association of India
- Renaissance Capital - South Africa
- Agrawal Coal Company - India
- GMR Energy Limited - India
- Kideco Jaya Agung - Indonesia
- Heidelberg Cement - Germany
- Salva Resources Pvt Ltd - India
- Ministry of Transport, Egypt
- Petrochimia International Co. Ltd.- Taiwan
- Holcim Trading Pte Ltd - Singapore
- Xindia Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Bhatia International Limited - India
- Goldman Sachs - Singapore
- AsiaOL BioFuels Corp., Philippines
- GN Power Mariveles Coal Plant, Philippines
- Karbindo Abesyapradhi - Indoneisa
- TeaM Sual Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- ASAPP Information Group - India
- Tamil Nadu electricity Board
- Coal and Oil Company - UAE
- Bhushan Steel Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Formosa Plastics Group - Taiwan
- Pendopo Energi Batubara - Indonesia
- Intertek Mineral Services - Indonesia
- Electricity Authority, New Zealand
- Standard Chartered Bank - UAE
- Cigading International Bulk Terminal - Indonesia
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