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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, 08 February 11
PUSTAKA JAYA PALU POWER LOOKING FOR 5800 GAD COAL
COALspot.com - According to market information, PT Pustaka Jaya Palu Power, a power plant operator of the Mpanau plant, Palu, Sulawesi has invited c ...
Tuesday, 08 February 11
BAYAN, KANGAROO EXTEND DUE DILIGENCE
Coal miner controlled by businessman Dato' Low Tuck Kwong PT Bayan Resources Tbk (BYAN) and Australia-listed coal company Kangaroo Resources Limite ...
Tuesday, 08 February 11
DRY BULK: IS THE TIDE TURNING? - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In what could be perceived as a change of market sentiment for the better, the dry bulk industry’s benchmark, the Baltic Dry Index (BDI) poste ...
Monday, 07 February 11
THE INDONESIAN COAL REFERENCE PRICE HAS JUMPED 13.03 PERCENT IN FEBRUARY 2011
COALspot.com - Indonesia’s Ministry of Energy and Mineral Resources has set the February 2011 Indonesian Coal Reference Price for therma ...
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 driv ...
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- TeaM Sual Corporation - Philippines
- IEA Clean Coal Centre - UK
- Bank of Tokyo Mitsubishi UFJ Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- Indian Energy Exchange, India
- Eastern Energy - Thailand
- Semirara Mining and Power Corporation, Philippines
- Indian Oil Corporation Limited
- Karaikal Port Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Petron Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Goldman Sachs - Singapore
- Riau Bara Harum - Indonesia
- International Coal Ventures Pvt Ltd - India
- Latin American Coal - Colombia
- Wood Mackenzie - Singapore
- The Treasury - Australian Government
- Miang Besar Coal Terminal - Indonesia
- Dalmia Cement Bharat India
- Maharashtra Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Ambuja Cements Ltd - India
- Australian Commodity Traders Exchange
- Borneo Indobara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- White Energy Company Limited
- Orica Australia Pty. Ltd.
- Jorong Barutama Greston.PT - Indonesia
- Trasteel International SA, Italy
- Rashtriya Ispat Nigam Limited - India
- Mjunction Services Limited - India
- Salva Resources Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Rio Tinto Coal - Australia
- Kepco SPC Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- GAC Shipping (India) Pvt Ltd
- Global Green Power PLC Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Vizag Seaport Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Agrawal Coal Company - India
- Georgia Ports Authority, United States
- Eastern Coal Council - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Bangladesh Power Developement Board
- Gujarat Mineral Development Corp Ltd - India
- Sindya Power Generating Company Private Ltd
- SMG Consultants - Indonesia
- Maheswari Brothers Coal Limited - India
- Coalindo Energy - Indonesia
- Economic Council, Georgia
- Aboitiz Power Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Anglo American - United Kingdom
- McConnell Dowell - Australia
- GMR Energy Limited - India
- London Commodity Brokers - England
- Manunggal Multi Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Central Java Power - Indonesia
- Energy Development Corp, Philippines
- Siam City Cement - Thailand
- Africa Commodities Group - South Africa
- Kalimantan Lumbung Energi - Indonesia
- Altura Mining Limited, Indonesia
- Parry Sugars Refinery, India
- Ceylon Electricity Board - Sri Lanka
- Energy Link Ltd, New Zealand
- Indonesian Coal Mining Association
- Central Electricity Authority - India
- Standard Chartered Bank - UAE
- Sarangani Energy Corporation, Philippines
- Orica Mining Services - Indonesia
- PTC India Limited - India
- Directorate Of Revenue Intelligence - India
- Pendopo Energi Batubara - Indonesia
- IHS Mccloskey Coal Group - USA
- Kartika Selabumi Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- Coal and Oil Company - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chamber of Mines of South Africa
- Madhucon Powers Ltd - India
- Bulk Trading Sa - Switzerland
- Parliament of New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Sakthi Sugars Limited - India
- Indo Tambangraya Megah - Indonesia
- Price Waterhouse Coopers - Russia
- Power Finance Corporation Ltd., India
- Formosa Plastics Group - Taiwan
- Marubeni Corporation - India
- LBH Netherlands Bv - Netherlands
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Banpu Public Company Limited - Thailand
- Toyota Tsusho Corporation, Japan
- Interocean Group of Companies - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kideco Jaya Agung - Indonesia
- Bhushan Steel Limited - India
- Heidelberg Cement - Germany
- Thai Mozambique Logistica
- Vedanta Resources Plc - India
- Minerals Council of Australia
- Leighton Contractors Pty Ltd - Australia
- Sical Logistics Limited - India
- Kapuas Tunggal Persada - Indonesia
- Lanco Infratech Ltd - India
- Antam Resourcindo - Indonesia
- Gujarat Sidhee Cement - India
- Bharathi Cement Corporation - India
- Tamil Nadu electricity Board
- Bayan Resources Tbk. - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Holcim Trading Pte Ltd - Singapore
- SMC Global Power, Philippines
- Carbofer General Trading SA - India
- Romanian Commodities Exchange
- Coastal Gujarat Power Limited - India
- Edison Trading Spa - Italy
- New Zealand Coal & Carbon
- Electricity Generating Authority of Thailand
- PNOC Exploration Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Barasentosa Lestari - Indonesia
- MS Steel International - UAE
- Intertek Mineral Services - Indonesia
- Larsen & Toubro Limited - India
- Mintek Dendrill Indonesia
- Deloitte Consulting - India
- Billiton Holdings Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Merrill Lynch Commodities Europe
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- ASAPP Information Group - India
- Cement Manufacturers Association - India
- Metalloyd Limited - United Kingdom
- Wilmar Investment Holdings
- Bhatia International Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Oldendorff Carriers - Singapore
- Mercator Lines Limited - India
- Indika Energy - Indonesia
- Singapore Mercantile Exchange
- Bhoruka Overseas - Indonesia
- Malabar Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- India Bulls Power Limited - India
- Mercuria Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Authority, New Zealand
- Xindia Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- VISA Power Limited - India
- GVK Power & Infra Limited - India
- Renaissance Capital - South Africa
- Posco Energy - South Korea
- Simpson Spence & Young - Indonesia
- Samtan Co., Ltd - South Korea
- Siam City Cement PLC, Thailand
- Asmin Koalindo Tuhup - Indonesia
- Sree Jayajothi Cements Limited - India
- Ind-Barath Power Infra Limited - India
- Aditya Birla Group - India
- CNBM International Corporation - China
- Star Paper Mills Limited - India
- Cigading International Bulk Terminal - Indonesia
- Baramulti Group, Indonesia
- SN Aboitiz Power Inc, Philippines
- The University of Queensland
- OPG Power Generation Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Semirara Mining Corp, Philippines
- Ministry of Finance - Indonesia
- CIMB Investment Bank - Malaysia
- Binh Thuan Hamico - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Independent Power Producers Association of India
- Bukit Asam (Persero) Tbk - Indonesia
- Videocon Industries ltd - India
- Meralco Power Generation, Philippines
- European Bulk Services B.V. - Netherlands
- Jaiprakash Power Ventures ltd
- Attock Cement Pakistan Limited
- Grasim Industreis Ltd - India
- Kaltim Prima Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Makarim & Taira - Indonesia
- Medco Energi Mining Internasional
- Jindal Steel & Power Ltd - India
- Straits Asia Resources Limited - Singapore
- Global Coal Blending Company Limited - Australia
- PetroVietnam Power Coal Import and Supply Company
- Kobexindo Tractors - Indoneisa
- Uttam Galva Steels Limited - India
- Thiess Contractors Indonesia
- South Luzon Thermal Energy Corporation
- Bukit Makmur.PT - Indonesia
- Commonwealth Bank - Australia
- Planning Commission, India
- Australian Coal Association
- Ministry of Transport, Egypt
- Tata Chemicals Ltd - India
- Kumho Petrochemical, South Korea
- Ministry of Mines - Canada
- Bahari Cakrawala Sebuku - Indonesia
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