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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, 04 January 11
BALI, INDONESIA HOST OF WORLD RENEWABLE ENERGY AND ENERGY EFFICIENCY CONFERENCE
Press Release - Indonesian Renewable Energy Society (METI – IRES) has launched the plan for organizing the international gathering ...
Tuesday, 04 January 11
DRY BULK MARKET TO RANGE BETWEEN 1,700 AND 2,600 POINTS IN THE FIRST QUARTER OF 2011, ANALYSTS SAY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
As we entered 2011, ship owners and analysts, as well as shipbrokers are looking into their “crystal balls” to try to decode the dry bul ...
Monday, 03 January 11
TAXATION FOR COAL MINING COMPANIES IN INDONESIA - A TAX EXPERTS VIEW
COALspot.com - Mrs. Sri Wahyuni Sujono, managing partner of SF Consulting has wrote an exclusive report regarding taxation for coal mining companies ...
Sunday, 02 January 11
JAISWAL TO SEEK COAL MINES IN AFRICA - HINDUSTAN TIMES
Coal Minister Sriprakash Jaiswal will talk with his counterparts in South Africa and Mozambique during his visit from January 5 to secure coal asset ...
Saturday, 01 January 11
COAL PRODUCTION EXPECTED TO EXCEED 340 MILLION TONS THIS YEAR - THE JAKARTA POST
The Jakarta Post reported that, Indonesian coal miners expect to produce 340 million tons of coal in 2011, an increase of 23 percent from 275 millio ...
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- Riau Bara Harum - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Central Java Power - Indonesia
- Bulk Trading Sa - Switzerland
- Jorong Barutama Greston.PT - Indonesia
- ICICI Bank Limited - India
- Coalindo Energy - Indonesia
- Antam Resourcindo - Indonesia
- Ministry of Mines - Canada
- Price Waterhouse Coopers - Russia
- Indika Energy - Indonesia
- Goldman Sachs - Singapore
- CNBM International Corporation - China
- SMC Global Power, Philippines
- Essar Steel Hazira Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Iligan Light & Power Inc, Philippines
- Energy Development Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Mining Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- VISA Power Limited - India
- Therma Luzon, Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Deloitte Consulting - India
- Agrawal Coal Company - India
- Marubeni Corporation - India
- Petron Corporation, Philippines
- Australian Commodity Traders Exchange
- Standard Chartered Bank - UAE
- Global Coal Blending Company Limited - Australia
- Kepco SPC Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Economic Council, Georgia
- Sindya Power Generating Company Private Ltd
- Siam City Cement PLC, Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thai Mozambique Logistica
- Meralco Power Generation, Philippines
- Posco Energy - South Korea
- Indo Tambangraya Megah - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Mjunction Services Limited - India
- Bhatia International Limited - India
- Gujarat Sidhee Cement - India
- Ambuja Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- Attock Cement Pakistan Limited
- Cigading International Bulk Terminal - Indonesia
- Carbofer General Trading SA - India
- International Coal Ventures Pvt Ltd - India
- Makarim & Taira - Indonesia
- Intertek Mineral Services - Indonesia
- Bharathi Cement Corporation - India
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- GN Power Mariveles Coal Plant, Philippines
- Kartika Selabumi Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Rio Tinto Coal - Australia
- Rashtriya Ispat Nigam Limited - India
- PowerSource Philippines DevCo
- Minerals Council of Australia
- Jaiprakash Power Ventures ltd
- Miang Besar Coal Terminal - Indonesia
- Tata Chemicals Ltd - India
- Interocean Group of Companies - India
- Renaissance Capital - South Africa
- Bhoruka Overseas - Indonesia
- Vizag Seaport Private Limited - India
- The State Trading Corporation of India Ltd
- Port Waratah Coal Services - Australia
- Wood Mackenzie - Singapore
- OPG Power Generation Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Savvy Resources Ltd - HongKong
- PTC India Limited - India
- Sical Logistics Limited - India
- Anglo American - United Kingdom
- CIMB Investment Bank - Malaysia
- Jindal Steel & Power Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Indonesian Coal Mining Association
- Global Business Power Corporation, Philippines
- Commonwealth Bank - Australia
- Billiton Holdings Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Videocon Industries ltd - India
- The University of Queensland
- Holcim Trading Pte Ltd - Singapore
- Salva Resources Pvt Ltd - India
- Grasim Industreis Ltd - India
- Samtan Co., Ltd - South Korea
- Independent Power Producers Association of India
- Oldendorff Carriers - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wilmar Investment Holdings
- Semirara Mining and Power Corporation, Philippines
- Georgia Ports Authority, United States
- Uttam Galva Steels Limited - India
- San Jose City I Power Corp, Philippines
- Parliament of New Zealand
- Merrill Lynch Commodities Europe
- The Treasury - Australian Government
- European Bulk Services B.V. - Netherlands
- Madhucon Powers Ltd - India
- PNOC Exploration Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- ASAPP Information Group - India
- Indian Energy Exchange, India
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- Coastal Gujarat Power Limited - India
- SMG Consultants - Indonesia
- GAC Shipping (India) Pvt Ltd
- Leighton Contractors Pty Ltd - Australia
- India Bulls Power Limited - India
- Heidelberg Cement - Germany
- Latin American Coal - Colombia
- Chettinad Cement Corporation Ltd - India
- Siam City Cement - Thailand
- Energy Link Ltd, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Edison Trading Spa - Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Singapore Mercantile Exchange
- Banpu Public Company Limited - Thailand
- Aditya Birla Group - India
- Bangladesh Power Developement Board
- Asmin Koalindo Tuhup - Indonesia
- Altura Mining Limited, Indonesia
- Mercator Lines Limited - India
- McConnell Dowell - Australia
- Directorate General of MIneral and Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Eastern Energy - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Electricity Generating Authority of Thailand
- Mercuria Energy - Indonesia
- Planning Commission, India
- Straits Asia Resources Limited - Singapore
- Aboitiz Power Corporation - Philippines
- Indogreen Group - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Larsen & Toubro Limited - India
- Ministry of Finance - Indonesia
- White Energy Company Limited
- Vijayanagar Sugar Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Tamil Nadu electricity Board
- Electricity Authority, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Cement Manufacturers Association - India
- Thiess Contractors Indonesia
- Sree Jayajothi Cements Limited - India
- Malabar Cements Ltd - India
- Baramulti Group, Indonesia
- Africa Commodities Group - South Africa
- Sakthi Sugars Limited - India
- Sinarmas Energy and Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Global Green Power PLC Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Medco Energi Mining Internasional
- Krishnapatnam Port Company Ltd. - India
- Star Paper Mills Limited - India
- Mintek Dendrill Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bhushan Steel Limited - India
- SN Aboitiz Power Inc, Philippines
- Parry Sugars Refinery, India
- GVK Power & Infra Limited - India
- Lanco Infratech Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Central Electricity Authority - India
- Ministry of Transport, Egypt
- London Commodity Brokers - England
- Kumho Petrochemical, South Korea
- Eastern Coal Council - USA
- Manunggal Multi Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- GMR Energy Limited - India
- Trasteel International SA, Italy
- Gujarat Mineral Development Corp Ltd - India
- TeaM Sual Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Borneo Indobara - Indonesia
- Ind-Barath Power Infra Limited - India
- MS Steel International - UAE
- Indian Oil Corporation Limited
- Romanian Commodities Exchange
- Pendopo Energi Batubara - Indonesia
- LBH Netherlands Bv - Netherlands
- Metalloyd Limited - United Kingdom
- Vedanta Resources Plc - India
- Semirara Mining Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Sojitz Corporation - Japan
- Pipit Mutiara Jaya. PT, Indonesia
- Kideco Jaya Agung - Indonesia
- Power Finance Corporation Ltd., India
- Australian Coal Association
- Chamber of Mines of South Africa
- Bukit Baiduri Energy - Indonesia
- Xindia Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Maharashtra Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- New Zealand Coal & Carbon
- South Luzon Thermal Energy Corporation
- Formosa Plastics Group - Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- IHS Mccloskey Coal Group - USA
- Barasentosa Lestari - Indonesia
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