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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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Saturday, 29 January 11
ANTAM ACQUIRES SAROLANGUN COAL MINING
According to Insider Stories, Nickel and gold miner PT Aneka Tambang Tbk (Antam) of Indonesia via its subsidiary PT Indonesia Coal Resources (ICR) h ...
Friday, 28 January 11
MPM SEEKS 40K TONS OF INDONESIAN COAL
An Indian paper producer Mysore Paper Mills Ltd., based in Bangalore is looking for 40,000 metric tons of non-coking coal of Indonesian o ...
Friday, 28 January 11
TRADING PERMIT DELAYS THREATEN EXPORTS - THE JAKARTA GLOBE
The Jakarta Globe reported that, an ongoing wrangle over licenses for mining traders could hurt investment, a coal mining association chief said on ...
Friday, 28 January 11
DRY BULK MARKET CLOSING IN TOWARDS CRISIS LEVELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The trials and tribulations of the dry bulk market seem to have no end during the first month of 2011, as the industry’s benchmark, the Baltic ...
Wednesday, 26 January 11
ADANI TO SET-UP RAIL, PORT AND POWER PROJECTS IN INDONESIA - MONEYCONTROL
Moneycontrol reported that, Adani Enterprises, the flagship company of India’s infrastructure conglomerate the Adani Group, today announced th ...
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- Bhushan Steel Limited - India
- LBH Netherlands Bv - Netherlands
- Straits Asia Resources Limited - Singapore
- Savvy Resources Ltd - HongKong
- Coastal Gujarat Power Limited - India
- Mercuria Energy - Indonesia
- Bharathi Cement Corporation - India
- ICICI Bank Limited - India
- Barasentosa Lestari - Indonesia
- Wilmar Investment Holdings
- The Treasury - Australian Government
- Mjunction Services Limited - India
- Jindal Steel & Power Ltd - India
- Mintek Dendrill Indonesia
- Vizag Seaport Private Limited - India
- Thiess Contractors Indonesia
- Posco Energy - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Kartika Selabumi Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Uttam Galva Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- VISA Power Limited - India
- Malabar Cements Ltd - India
- Sojitz Corporation - Japan
- Samtan Co., Ltd - South Korea
- Star Paper Mills Limited - India
- Essar Steel Hazira Ltd - India
- Binh Thuan Hamico - Vietnam
- Renaissance Capital - South Africa
- Rio Tinto Coal - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Finance - Indonesia
- CIMB Investment Bank - Malaysia
- Goldman Sachs - Singapore
- Gujarat Sidhee Cement - India
- MS Steel International - UAE
- South Luzon Thermal Energy Corporation
- Directorate Of Revenue Intelligence - India
- Jaiprakash Power Ventures ltd
- Videocon Industries ltd - India
- Ambuja Cements Ltd - India
- India Bulls Power Limited - India
- Metalloyd Limited - United Kingdom
- Lanco Infratech Ltd - India
- Sical Logistics Limited - India
- SMG Consultants - Indonesia
- Port Waratah Coal Services - Australia
- Bayan Resources Tbk. - Indonesia
- Orica Mining Services - Indonesia
- White Energy Company Limited
- OPG Power Generation Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Marubeni Corporation - India
- Vedanta Resources Plc - India
- Sinarmas Energy and Mining - Indonesia
- Meralco Power Generation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Manunggal Multi Energi - Indonesia
- Borneo Indobara - Indonesia
- Aditya Birla Group - India
- Parry Sugars Refinery, India
- Iligan Light & Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Orica Australia Pty. Ltd.
- Kideco Jaya Agung - Indonesia
- Attock Cement Pakistan Limited
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- Sree Jayajothi Cements Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Therma Luzon, Inc, Philippines
- Anglo American - United Kingdom
- Simpson Spence & Young - Indonesia
- Edison Trading Spa - Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Intertek Mineral Services - Indonesia
- Central Electricity Authority - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMC Global Power, Philippines
- Global Green Power PLC Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Coal and Oil Company - UAE
- Energy Link Ltd, New Zealand
- Antam Resourcindo - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Globalindo Alam Lestari - Indonesia
- Romanian Commodities Exchange
- Indian Energy Exchange, India
- Eastern Energy - Thailand
- Tamil Nadu electricity Board
- Global Business Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Xindia Steels Limited - India
- Bukit Makmur.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- The State Trading Corporation of India Ltd
- Maheswari Brothers Coal Limited - India
- Merrill Lynch Commodities Europe
- San Jose City I Power Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- Trasteel International SA, Italy
- Riau Bara Harum - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sakthi Sugars Limited - India
- Cement Manufacturers Association - India
- Minerals Council of Australia
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- PowerSource Philippines DevCo
- Meenaskhi Energy Private Limited - India
- Singapore Mercantile Exchange
- Planning Commission, India
- Bulk Trading Sa - Switzerland
- Sarangani Energy Corporation, Philippines
- GVK Power & Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- IEA Clean Coal Centre - UK
- ASAPP Information Group - India
- Bukit Baiduri Energy - Indonesia
- Siam City Cement - Thailand
- Baramulti Group, Indonesia
- Georgia Ports Authority, United States
- Neyveli Lignite Corporation Ltd, - India
- Australian Commodity Traders Exchange
- Interocean Group of Companies - India
- Ind-Barath Power Infra Limited - India
- Bhoruka Overseas - Indonesia
- Salva Resources Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Ministry of Transport, Egypt
- Price Waterhouse Coopers - Russia
- Indogreen Group - Indonesia
- Electricity Generating Authority of Thailand
- Oldendorff Carriers - Singapore
- Commonwealth Bank - Australia
- Banpu Public Company Limited - Thailand
- Siam City Cement PLC, Thailand
- PetroVietnam Power Coal Import and Supply Company
- Wood Mackenzie - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- AsiaOL BioFuels Corp., Philippines
- Makarim & Taira - Indonesia
- Thai Mozambique Logistica
- Formosa Plastics Group - Taiwan
- Madhucon Powers Ltd - India
- Australian Coal Association
- Central Java Power - Indonesia
- Parliament of New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Larsen & Toubro Limited - India
- Deloitte Consulting - India
- Bhatia International Limited - India
- CNBM International Corporation - China
- European Bulk Services B.V. - Netherlands
- Electricity Authority, New Zealand
- Chettinad Cement Corporation Ltd - India
- New Zealand Coal & Carbon
- SN Aboitiz Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Ministry of Mines - Canada
- Pendopo Energi Batubara - Indonesia
- Tata Chemicals Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Chamber of Mines of South Africa
- Medco Energi Mining Internasional
- Indika Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Agrawal Coal Company - India
- Power Finance Corporation Ltd., India
- Dalmia Cement Bharat India
- Aboitiz Power Corporation - Philippines
- Altura Mining Limited, Indonesia
- Heidelberg Cement - Germany
- Directorate General of MIneral and Coal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Jorong Barutama Greston.PT - Indonesia
- Mercator Lines Limited - India
- Global Coal Blending Company Limited - Australia
- PNOC Exploration Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Grasim Industreis Ltd - India
- Standard Chartered Bank - UAE
- London Commodity Brokers - England
- Indian Oil Corporation Limited
- Economic Council, Georgia
- McConnell Dowell - Australia
- Kalimantan Lumbung Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Petron Corporation, Philippines
- Energy Development Corp, Philippines
- Independent Power Producers Association of India
- Timah Investasi Mineral - Indoneisa
- Eastern Coal Council - USA
- Petrochimia International Co. Ltd.- Taiwan
- Africa Commodities Group - South Africa
- The University of Queensland
- Latin American Coal - Colombia
- Gujarat Mineral Development Corp Ltd - India
- Coalindo Energy - Indonesia
- Carbofer General Trading SA - India
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