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Tuesday, 11 June 13
COAL: NO SIGN OF RECOVERY - GABRIELLA
 COALspot.com: We attended the 19th Annual Coaltrans Asia Conference, where we found most of the speakers were not very optimistic on the outlook for coal mining in the months ahead. The main concern is abundant supply outreaching demand growth.
We maintain an UNDERWEIGHT recommendation on the sector.
However, for investors still seeking some exposure to the coal mining sector, PTBA is a solid defensive play given:
1) its low cost structure and defensive earnings,
2) its abundant reserves supporting strong production growth and
3) its strong balance sheet. Going forward, we foresee further declines in EPS due to continued depressed coal prices which will result in lower Target Prices from current levels. Below are some key takeaways:
Coal Mining Conditions in Indonesia as the biggest exporter
As of May 2013, Indonesia’s coal resources amounted to 159bn tons with coal reserves of 32bn tons – about 3% of the world’s coal reserves. Presently, there are 76 Coal Agreements (PKP2B) and 3,892 coal licenses (IUP). Most of them are for operations in Kalimantan and Sumatra. The majority are in Kalimantan which has 61 PKP2B (80%) and 2,670 IUP (69%). All in all, Kalimantan accounts for around 90% of the total national coal production. Most of the IUP (around 80%) are at the exploration stage with the rest in the production stage. There are problems with around 400 IUP. Most of the coal production is undertaken by coal agreement holders and SOE (which account for around 70% of the national coal production).
Fuelling Indonesia’s domestic coal demand: an additional 55GW of power generation capacity
Indonesia’s electricity demand growth is still high (9.4% per year), with PLN, the state electricity company as the biggest coal buyer in Indonesia (66mn tons in 2013). PLN has stated that electricity supply in Indonesia will continue to rely on coal fired power plants (CFPP) for at least the next 10 years given the relatively cheap production costs involved. By 2020, PLN expects total additional power generation capacity to reach 55GW (PLN: 31GW, IPP: 24GW). Of this amount, 35GW or 65% is expected to come from coal power plants translating into additional coal demand of around 100mn tons p.a.
China’s Coal Import Restrictions: 50mn tons from Indonesia
From 2010 to 2012, China’s thermal coal imports increased each year, more than doubling from 71mn tons to 155mn tons, with Indonesia’s thermal coal amounting to 54% of the total in 2012. This year, China is expected to import 380mn tons of coal in total (+31% or half last year’s growth rate). One of the hot issues being discussed was China’s coal import restrictions stipulating: 1) a minimum CV of 3,750kcal/kg (NAR), 2) maximum sulphur content of 2% and 3) maximum ash content of 25%. Around 30% of China’s steam coal imports - or about 50mn tons coming from Indonesia - were lignite. India would benefit from China implementing an imports ban as it would mean lower prices. In 1Q13, however, China’s coal imports still showed an increase of 30% yoy.
Future of Indonesia’s low rank coal
The government seeks a greater role for domestic coal, especially in LRC (mine mouth power plants, gasification, liquefaction). Indonesia has abundant low rank coal resources, accounting for 40% of Indonesia’s total resources, with medium and high rank coal accounting for about 50% and 10%, respectively. There is a need to foster greater international cooperation to develop the technology for the utilization of low rank coal for domestic needs by implementing Clean Coal Technologies with build operate transfer schemes (BOT schemes) to improve calorific value and efficiency.
A Challenging Outlook
The outlook for coal mining will remain challenging, in our view, given the currently depressed coal prices (down 5% average YTD) and persistent global economic headwinds. China and India combined account for more than 30% of the world’s seaborne import volume. Their dominance is expected to continue with potential growth seen in India. Environmental and Regulatory issues will limit coal imports growth, however, as reflected in China’s draft proposal for a ban on imports and the current development of Hydropower and Nuclear generation.
Adding to the woes, Indonesia’s new draft regulation (increasing coal royalties, export quotas) has worsened the investment climate for coal producers in the country.
The author of this article Ms. Maureen Natasha, an equity analyst in PT Danareksa Sekuritas. Danareksa is a pioneering Indonesian financial institution and was the first to introduce mutual funds in Indonesia. It was also the first to launch a US Dollar-denominated fixed-income fund and promote syariah-based investments. Today, Danareksa is the only local company to offer direct market access services to clients worldwide and has grown to become the company that has underwritten the most equity and debt placements in Indonesia.
Views and opinions / conclusion expressed herein are personal views of the author and not that of COALspot.com. This article is subject to disclaimer terms of PT. Danareksa Sekuritas.
If you believe an article violates your rights or the rights of others, please contact us.
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Wednesday, 12 June 24
CHINA ACCOUNTS FOR 16.3% OF AUSTRALIA'S COAL EXPORTS, FOLLOWED BY INDIA 14.4% - BANCHERO COSTA
Global coal trade has really picked up pace in recent months, and is now fully back to pre-Covid levels says Banchero Costa in its latest report.
...
Wednesday, 12 June 24
LNG NEWBUILDING VALUES AT RECORD HIGH: 78 NEWBUILD ORDERS PLACED IN 2024, DOUBLING 2023 - VESON NAUTICAL
The number of LNG newbuilding orders have more than doubled from the same period last year where 34 orders were placed, compared to 78 in the first ...
Monday, 10 June 24
CHINA'S MAY COAL IMPORTS RISE 11% ON LOWER DOMESTIC OUTPUT - REUTERS
China’s imports of coal rose 11% in May from a year earlier, customs data and Reuters records showed on Friday, as lower domestic output this ...
Tuesday, 04 June 24
HOW DO WESTERN SANCTIONS ON RUSSIA IMPACT THE GLOBAL METALS, MINING AND COAL MARKETS - WOOD MACKENZIE
The geopolitical landscape for Russia, as a major supplier of various commodities, has undergone a dramatic transformation since the invasion of Uk ...
Friday, 22 March 24
CASE STUDY: DANGERS OF COAL CARGO - SKULD
Recently, a bulk cargo vessel carrying coal from South Africa to Singapore suffered a fatal accident, resulting in the deaths of three crew members ...
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Showing 21 to 25 news of total 6871 |
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- San Jose City I Power Corp, Philippines
- Heidelberg Cement - Germany
- Jaiprakash Power Ventures ltd
- Lanco Infratech Ltd - India
- Coastal Gujarat Power Limited - India
- CNBM International Corporation - China
- India Bulls Power Limited - India
- Eastern Coal Council - USA
- Goldman Sachs - Singapore
- Uttam Galva Steels Limited - India
- SMC Global Power, Philippines
- Altura Mining Limited, Indonesia
- Kepco SPC Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- IHS Mccloskey Coal Group - USA
- Metalloyd Limited - United Kingdom
- Medco Energi Mining Internasional
- Indian Energy Exchange, India
- Global Business Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Parliament of New Zealand
- Independent Power Producers Association of India
- LBH Netherlands Bv - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vizag Seaport Private Limited - India
- Aboitiz Power Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Aditya Birla Group - India
- Standard Chartered Bank - UAE
- GAC Shipping (India) Pvt Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Kaltim Prima Coal - Indonesia
- Africa Commodities Group - South Africa
- Borneo Indobara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Sinarmas Energy and Mining - Indonesia
- GVK Power & Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Malabar Cements Ltd - India
- Indonesian Coal Mining Association
- ASAPP Information Group - India
- Ministry of Mines - Canada
- Mercuria Energy - Indonesia
- Ministry of Transport, Egypt
- Global Coal Blending Company Limited - Australia
- Alfred C Toepfer International GmbH - Germany
- Larsen & Toubro Limited - India
- Merrill Lynch Commodities Europe
- Kobexindo Tractors - Indoneisa
- PowerSource Philippines DevCo
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Development Corp, Philippines
- VISA Power Limited - India
- Barasentosa Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Coalindo Energy - Indonesia
- Mercator Lines Limited - India
- Global Green Power PLC Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Indogreen Group - Indonesia
- Ministry of Finance - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bangladesh Power Developement Board
- Australian Commodity Traders Exchange
- Parry Sugars Refinery, India
- Price Waterhouse Coopers - Russia
- TeaM Sual Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Manunggal Multi Energi - Indonesia
- Wood Mackenzie - Singapore
- Meralco Power Generation, Philippines
- Attock Cement Pakistan Limited
- Rio Tinto Coal - Australia
- Interocean Group of Companies - India
- South Luzon Thermal Energy Corporation
- Edison Trading Spa - Italy
- Mjunction Services Limited - India
- Kumho Petrochemical, South Korea
- Kalimantan Lumbung Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Agrawal Coal Company - India
- Videocon Industries ltd - India
- Sree Jayajothi Cements Limited - India
- Thai Mozambique Logistica
- Energy Link Ltd, New Zealand
- Formosa Plastics Group - Taiwan
- Meenaskhi Energy Private Limited - India
- Power Finance Corporation Ltd., India
- Australian Coal Association
- The University of Queensland
- Rashtriya Ispat Nigam Limited - India
- Bhoruka Overseas - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Antam Resourcindo - Indonesia
- Straits Asia Resources Limited - Singapore
- Cement Manufacturers Association - India
- Krishnapatnam Port Company Ltd. - India
- Petrochimia International Co. Ltd.- Taiwan
- PTC India Limited - India
- Tamil Nadu electricity Board
- Asmin Koalindo Tuhup - Indonesia
- Bukit Baiduri Energy - Indonesia
- Minerals Council of Australia
- Georgia Ports Authority, United States
- Sindya Power Generating Company Private Ltd
- Semirara Mining and Power Corporation, Philippines
- Deloitte Consulting - India
- Gujarat Mineral Development Corp Ltd - India
- Ambuja Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement PLC, Thailand
- Marubeni Corporation - India
- Grasim Industreis Ltd - India
- Carbofer General Trading SA - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- The State Trading Corporation of India Ltd
- AsiaOL BioFuels Corp., Philippines
- PNOC Exploration Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Makarim & Taira - Indonesia
- IEA Clean Coal Centre - UK
- Renaissance Capital - South Africa
- Bhushan Steel Limited - India
- McConnell Dowell - Australia
- MS Steel International - UAE
- Trasteel International SA, Italy
- Madhucon Powers Ltd - India
- Bulk Trading Sa - Switzerland
- Xindia Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Oldendorff Carriers - Singapore
- GMR Energy Limited - India
- Riau Bara Harum - Indonesia
- Samtan Co., Ltd - South Korea
- Karaikal Port Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Tata Chemicals Ltd - India
- Planning Commission, India
- Neyveli Lignite Corporation Ltd, - India
- Pendopo Energi Batubara - Indonesia
- Bharathi Cement Corporation - India
- Ind-Barath Power Infra Limited - India
- Petron Corporation, Philippines
- Sakthi Sugars Limited - India
- White Energy Company Limited
- Posco Energy - South Korea
- Electricity Authority, New Zealand
- Thiess Contractors Indonesia
- Siam City Cement - Thailand
- ICICI Bank Limited - India
- Singapore Mercantile Exchange
- Kohat Cement Company Ltd. - Pakistan
- Eastern Energy - Thailand
- Chamber of Mines of South Africa
- Coal and Oil Company - UAE
- Economic Council, Georgia
- Mintek Dendrill Indonesia
- Indian Oil Corporation Limited
- Jorong Barutama Greston.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Banpu Public Company Limited - Thailand
- New Zealand Coal & Carbon
- Central Electricity Authority - India
- Bukit Makmur.PT - Indonesia
- Electricity Generating Authority of Thailand
- Indika Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- SMG Consultants - Indonesia
- Sical Logistics Limited - India
- Timah Investasi Mineral - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Commonwealth Bank - Australia
- Maheswari Brothers Coal Limited - India
- Romanian Commodities Exchange
- Maharashtra Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Bhatia International Limited - India
- Savvy Resources Ltd - HongKong
- Essar Steel Hazira Ltd - India
- Therma Luzon, Inc, Philippines
- London Commodity Brokers - England
- Billiton Holdings Pty Ltd - Australia
- Wilmar Investment Holdings
- Vedanta Resources Plc - India
- Orica Australia Pty. Ltd.
- Intertek Mineral Services - Indonesia
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Gujarat Sidhee Cement - India
- OPG Power Generation Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Orica Mining Services - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bukit Asam (Persero) Tbk - Indonesia
- Dalmia Cement Bharat India
- Salva Resources Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Baramulti Group, Indonesia
- The Treasury - Australian Government
- Anglo American - United Kingdom
- Binh Thuan Hamico - Vietnam
- Star Paper Mills Limited - India
- European Bulk Services B.V. - Netherlands
- Bayan Resources Tbk. - Indonesia
- Central Java Power - Indonesia
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