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Thursday, 25 November 10
ANALYSIS: COAL SECTOR: VALUE EMERGENCE - THE JAKARTA POST
 Coal demand will remain firm due to a build-up of coal-fired power plants in India, China and Indonesia. As a result, we have upgraded our coal price from US$95 per ton to a range of between $100, 105, 108, 110 and 115 per ton, respectively in 2011, 2012, 2013, 2014 and 2015 (inflation rate of 1 percent thereafter).
Additionally, Indonesia is one of the lowest cost coal producers in the world, which means that coal prices have to adjust with the incremental cost of production of higher-cost structured companies.
Thermal Seaborne coal demand is set to rise by 74 percent to 1,187 million tons in 2025 from 680 million tons in 2010, according to Coaltrans Coal Conference in Amsterdam last month. This is driven by a higher demand from China and India, which currently accounts for about 28 percent of the global thermal coal market.
China, which currently relies on coal to produce 80 percent of its power needs, is installing two new coal-fired power plants per week with capacities of 500 megawatts per plant. This pace will persist at least in the next decade, potentially doubling power capacity by 2020 and adding a 500-gigawatts new coal-fired electricity generation capacity according to the International Energy Agency. We highlight that with China consuming 43 percent of the global thermal coal production, imbalances between its indigenous production and consumption will drive global coal prices higher.
As for India, at present it imports about 8 percent of global coal production. But the number is set to grow to 25 percent by 2015. Indian thermal coal demand is expected to rise 810 million tons, or 131 percent, by 2025, driven by a 158 percent hike in coal-fired power capacity, in line with power demand, which will rise from the current 147 gigawatts to 380 gigawatts by 2025.
Meanwhile, Vietnam, which three years ago was the largest exporter of coal to China, is expected to become a net importer by 2015, putting further pressure on global supply in the medium term. Vietnam currently exports about 50 percent of its production or about 24 million tons, but this will fall to only 3 million tons, despite rising coal production from 48 million tons in 2009 to about 105 million tons in 2025.
Stripping out PT Bayan Resources’ (BYAN’s) price movements, the coal sector has underperformed the market by 9.8 percent year-to-date (ytd). We believe value is emerging, particularly for our top picks, and we raise our sector weighting to overweight.
At this stage, PT Bukit Asam (PTBA) has the highest upside potential based on Discounted Cash Flow (DCF), helped by the inclusion of the Banjarsari power project in our forecasts. We like PTBA’s railway expansion projects, which will increase PTBA’s railway capacity from 11 million tons currently to 47.7 million tons by 2015 or 82.7 million tons by 2018.
This will increase fourfold PTBA’s production from 12.7 million tons to 52.5 million tons by 2015 or by seven fold to 87.5 million tons by 2018. We also like PTBA for its government link, translating to more secured supply contracts to PLN. Additionally, we like its huge reserves (fives times Indonesia’s coal production), which will pave the way for it to become the second-largest coal producer after BUMI starting in 2018.
This means 33 percent compound annual growth rate (CAGR) for earning per share (EPS) in the next five years through 2015. It also has cash reserves of Rp 4.9 trillion with no debt and solid corporate governance. Our second pick is PT Indika Energy or INDY (+27 percent upside), due to Kideco’s strong performance (which contributes 76 percent of its pre-tax profit). This is followed by Adaro Energy (+19 percent), the largest market cap and second-highest average daily turnover after BUMI, which plans to nearly double production from about 42 million tons in 2010 to 80 million tons by 2014.
Surabhi Chopra, The writer is an analyst at PT Bahana Securities Source: The Jakarta Post
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Tuesday, 22 February 11
SUPRAMAX MARKET IS IMPROVING IN THE PACIFIC
BRS - A 10% rise in the BDI this week, mostly on the back of Panamax rates and improvements in the Supramax market in the Pacific. For the Capes, ra ...
Monday, 21 February 11
CHURCHILL MINING RECEIVES SIGNIFICANT INTEREST, PROPOSALS TO DEVELOP EAST KUTAI COAL PROJECT - PROACTIVE INVESTORS
Proactive Investors reported that, Churchill Mining has received a number of specific proposals to fund and develop its massive East Kutai coa ...
Monday, 21 February 11
ABOLISH 5% DUTY ON COAL IMPORTS: SHINDE
Indian Express reported that, with acute coal shortage of domestic coal threatening to destabilise its power generation plans, the power ministry ha ...
Saturday, 19 February 11
THE FREIGHT MARKET EXPECTED TO BE STEADY NEXT WEEK - VISTAAR
COALspot.com - The market was quite firm this week with freight rates in South east asia and India/Feast almost up by 30 pct.
However towards end ...
Thursday, 17 February 11
COAL-GEN EUROPE 2011 REAFFIRMS THE IMPORTANCE OF COAL
Press Release: The third COAL-GEN Europe conference and exhibition, kicked off on Tuesday 15 February, with leading experts, professionals and compa ...
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- Eastern Energy - Thailand
- SMG Consultants - Indonesia
- The University of Queensland
- Straits Asia Resources Limited - Singapore
- Krishnapatnam Port Company Ltd. - India
- Mercator Lines Limited - India
- Gujarat Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Semirara Mining and Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Port Waratah Coal Services - Australia
- Global Business Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Latin American Coal - Colombia
- Merrill Lynch Commodities Europe
- Goldman Sachs - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Salva Resources Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Energy Development Corp, Philippines
- Independent Power Producers Association of India
- Ministry of Transport, Egypt
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Coal Council - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Vizag Seaport Private Limited - India
- The Treasury - Australian Government
- Makarim & Taira - Indonesia
- Binh Thuan Hamico - Vietnam
- PowerSource Philippines DevCo
- Larsen & Toubro Limited - India
- Sarangani Energy Corporation, Philippines
- Australian Commodity Traders Exchange
- OPG Power Generation Pvt Ltd - India
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- Kohat Cement Company Ltd. - Pakistan
- Mintek Dendrill Indonesia
- Tamil Nadu electricity Board
- Timah Investasi Mineral - Indoneisa
- Kumho Petrochemical, South Korea
- Indogreen Group - Indonesia
- Georgia Ports Authority, United States
- ASAPP Information Group - India
- Price Waterhouse Coopers - Russia
- Therma Luzon, Inc, Philippines
- Tata Chemicals Ltd - India
- Barasentosa Lestari - Indonesia
- Ministry of Mines - Canada
- GVK Power & Infra Limited - India
- Siam City Cement PLC, Thailand
- VISA Power Limited - India
- Anglo American - United Kingdom
- Electricity Generating Authority of Thailand
- Sinarmas Energy and Mining - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Billiton Holdings Pty Ltd - Australia
- Commonwealth Bank - Australia
- Parliament of New Zealand
- Essar Steel Hazira Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- European Bulk Services B.V. - Netherlands
- Coal and Oil Company - UAE
- Uttam Galva Steels Limited - India
- Romanian Commodities Exchange
- Mjunction Services Limited - India
- Thiess Contractors Indonesia
- Metalloyd Limited - United Kingdom
- Meenaskhi Energy Private Limited - India
- Samtan Co., Ltd - South Korea
- Maheswari Brothers Coal Limited - India
- South Luzon Thermal Energy Corporation
- SMC Global Power, Philippines
- IHS Mccloskey Coal Group - USA
- Gujarat Sidhee Cement - India
- Iligan Light & Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Antam Resourcindo - Indonesia
- Agrawal Coal Company - India
- Trasteel International SA, Italy
- Posco Energy - South Korea
- Bhatia International Limited - India
- Interocean Group of Companies - India
- Economic Council, Georgia
- Thai Mozambique Logistica
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Petron Corporation, Philippines
- New Zealand Coal & Carbon
- Mercuria Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Carbofer General Trading SA - India
- Holcim Trading Pte Ltd - Singapore
- Star Paper Mills Limited - India
- Marubeni Corporation - India
- Wilmar Investment Holdings
- The State Trading Corporation of India Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Borneo Indobara - Indonesia
- Indo Tambangraya Megah - Indonesia
- Cement Manufacturers Association - India
- Central Java Power - Indonesia
- McConnell Dowell - Australia
- Rashtriya Ispat Nigam Limited - India
- GAC Shipping (India) Pvt Ltd
- Ministry of Finance - Indonesia
- Ambuja Cements Ltd - India
- Savvy Resources Ltd - HongKong
- Indonesian Coal Mining Association
- Petrochimia International Co. Ltd.- Taiwan
- International Coal Ventures Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- GMR Energy Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vedanta Resources Plc - India
- Siam City Cement - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Edison Trading Spa - Italy
- Kapuas Tunggal Persada - Indonesia
- Chamber of Mines of South Africa
- Kepco SPC Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Chettinad Cement Corporation Ltd - India
- Oldendorff Carriers - Singapore
- Jaiprakash Power Ventures ltd
- Attock Cement Pakistan Limited
- Lanco Infratech Ltd - India
- Electricity Authority, New Zealand
- Heidelberg Cement - Germany
- SN Aboitiz Power Inc, Philippines
- ICICI Bank Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Indian Oil Corporation Limited
- GN Power Mariveles Coal Plant, Philippines
- Malabar Cements Ltd - India
- MS Steel International - UAE
- Bangladesh Power Developement Board
- Altura Mining Limited, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Riau Bara Harum - Indonesia
- Sakthi Sugars Limited - India
- IEA Clean Coal Centre - UK
- Leighton Contractors Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- Parry Sugars Refinery, India
- Karbindo Abesyapradhi - Indoneisa
- Karaikal Port Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- TeaM Sual Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Baramulti Group, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Minerals Council of Australia
- Dalmia Cement Bharat India
- Bharathi Cement Corporation - India
- Bhushan Steel Limited - India
- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Coastal Gujarat Power Limited - India
- PTC India Limited - India
- Kaltim Prima Coal - Indonesia
- Deloitte Consulting - India
- Ind-Barath Power Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Central Electricity Authority - India
- AsiaOL BioFuels Corp., Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Pendopo Energi Batubara - Indonesia
- Standard Chartered Bank - UAE
- Coalindo Energy - Indonesia
- Rio Tinto Coal - Australia
- Bayan Resources Tbk. - Indonesia
- Africa Commodities Group - South Africa
- Directorate Of Revenue Intelligence - India
- CNBM International Corporation - China
- LBH Netherlands Bv - Netherlands
- Indika Energy - Indonesia
- India Bulls Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Singapore Mercantile Exchange
- Alfred C Toepfer International GmbH - Germany
- Kobexindo Tractors - Indoneisa
- Renaissance Capital - South Africa
- Wood Mackenzie - Singapore
- Orica Australia Pty. Ltd.
- Aditya Birla Group - India
- Meralco Power Generation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- San Jose City I Power Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Medco Energi Mining Internasional
- Indian Energy Exchange, India
- Ceylon Electricity Board - Sri Lanka
- Madhucon Powers Ltd - India
- Bulk Trading Sa - Switzerland
- Sical Logistics Limited - India
- Planning Commission, India
- Power Finance Corporation Ltd., India
- Kideco Jaya Agung - Indonesia
- Sree Jayajothi Cements Limited - India
- Orica Mining Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Cigading International Bulk Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- White Energy Company Limited
- London Commodity Brokers - England
- Videocon Industries ltd - India
- Grasim Industreis Ltd - India
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