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