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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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Friday, 17 December 10
NALCO SHORTLISTS COAL FIRMS FOR INDONESIA PROJECT - BUSINESS-STANDARD
Business-Standard reported that, State-owned NALCO today said it has shortlisted two firms for supply of coal for its Rs 18,000-crore (US$ 3,953,003 ...
Thursday, 16 December 10
LANCO BAGS AUSTRALIAN COAL MINER GRIFFITH - DNA
As part of its strategy to secure coal supplies for meeting its needs in expanding power generation capacities, infrastructure major Lanco Infratech ...
Thursday, 16 December 10
COAL INDIA IN TALKS WITH INDONESIAN CO TO BUY ITS COAL MINES - APN NEWS
APN News reported that, World’s largest coal producer Coal India is in talks with Indonesia’s Sinar Mas Group for acquiring coal mines i ...
Wednesday, 15 December 10
GOVT SETS NEW MINIMUM LEVEL FOR DOMESTIC MARKET SALES - THE JAKARTA POST
The Jakarta Post reported that, Indonesian coal producers are required to sell at least 24.17 percent of their production to the domestic market nex ...
Wednesday, 15 December 10
CAPESIZE RATES ARE NOW AT THEIR LOWEST LEVEL SINCE AUGUST
It was a repeat performance for the market this week, with another increase in earnings for the small sizes but a sharp drop for the Capes. Overall ...
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- Banpu Public Company Limited - Thailand
- Toyota Tsusho Corporation, Japan
- Kumho Petrochemical, South Korea
- Global Business Power Corporation, Philippines
- Indonesian Coal Mining Association
- Sakthi Sugars Limited - India
- Krishnapatnam Port Company Ltd. - India
- LBH Netherlands Bv - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- Makarim & Taira - Indonesia
- Anglo American - United Kingdom
- Mintek Dendrill Indonesia
- Aboitiz Power Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Commonwealth Bank - Australia
- The Treasury - Australian Government
- Manunggal Multi Energi - Indonesia
- Economic Council, Georgia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GVK Power & Infra Limited - India
- Madhucon Powers Ltd - India
- Power Finance Corporation Ltd., India
- Baramulti Group, Indonesia
- Dalmia Cement Bharat India
- Georgia Ports Authority, United States
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Petron Corporation, Philippines
- Mercator Lines Limited - India
- Singapore Mercantile Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Makmur.PT - Indonesia
- The University of Queensland
- Independent Power Producers Association of India
- Bhushan Steel Limited - India
- CNBM International Corporation - China
- TNB Fuel Sdn Bhd - Malaysia
- Bahari Cakrawala Sebuku - Indonesia
- Salva Resources Pvt Ltd - India
- Eastern Coal Council - USA
- Rio Tinto Coal - Australia
- Global Green Power PLC Corporation, Philippines
- SMG Consultants - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indogreen Group - Indonesia
- Star Paper Mills Limited - India
- Siam City Cement PLC, Thailand
- Goldman Sachs - Singapore
- GAC Shipping (India) Pvt Ltd
- Karaikal Port Pvt Ltd - India
- Sical Logistics Limited - India
- Intertek Mineral Services - Indonesia
- Siam City Cement - Thailand
- Global Coal Blending Company Limited - Australia
- London Commodity Brokers - England
- Mjunction Services Limited - India
- Jaiprakash Power Ventures ltd
- Leighton Contractors Pty Ltd - Australia
- Edison Trading Spa - Italy
- Ceylon Electricity Board - Sri Lanka
- Bhatia International Limited - India
- Therma Luzon, Inc, Philippines
- PNOC Exploration Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Ambuja Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Standard Chartered Bank - UAE
- Marubeni Corporation - India
- Pendopo Energi Batubara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karbindo Abesyapradhi - Indoneisa
- Energy Development Corp, Philippines
- McConnell Dowell - Australia
- White Energy Company Limited
- Bharathi Cement Corporation - India
- Coal and Oil Company - UAE
- Chettinad Cement Corporation Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Australia Pty. Ltd.
- Gujarat Mineral Development Corp Ltd - India
- Electricity Generating Authority of Thailand
- Eastern Energy - Thailand
- Simpson Spence & Young - Indonesia
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- Borneo Indobara - Indonesia
- Mercuria Energy - Indonesia
- Central Java Power - Indonesia
- IHS Mccloskey Coal Group - USA
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- Tamil Nadu electricity Board
- Africa Commodities Group - South Africa
- Formosa Plastics Group - Taiwan
- European Bulk Services B.V. - Netherlands
- Cement Manufacturers Association - India
- Medco Energi Mining Internasional
- Heidelberg Cement - Germany
- Coastal Gujarat Power Limited - India
- Wilmar Investment Holdings
- Globalindo Alam Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Kohat Cement Company Ltd. - Pakistan
- MS Steel International - UAE
- Savvy Resources Ltd - HongKong
- Videocon Industries ltd - India
- Australian Coal Association
- Maheswari Brothers Coal Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Rashtriya Ispat Nigam Limited - India
- Indian Energy Exchange, India
- Merrill Lynch Commodities Europe
- Latin American Coal - Colombia
- Binh Thuan Hamico - Vietnam
- Gujarat Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Electricity Authority, New Zealand
- PTC India Limited - India
- Sarangani Energy Corporation, Philippines
- Thai Mozambique Logistica
- New Zealand Coal & Carbon
- Iligan Light & Power Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Thiess Contractors Indonesia
- Ministry of Transport, Egypt
- Bulk Trading Sa - Switzerland
- SMC Global Power, Philippines
- Barasentosa Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Vizag Seaport Private Limited - India
- Indika Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Finance - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Port Waratah Coal Services - Australia
- Grasim Industreis Ltd - India
- SN Aboitiz Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Parliament of New Zealand
- Altura Mining Limited, Indonesia
- Renaissance Capital - South Africa
- Energy Link Ltd, New Zealand
- Larsen & Toubro Limited - India
- Kobexindo Tractors - Indoneisa
- Meralco Power Generation, Philippines
- Essar Steel Hazira Ltd - India
- PowerSource Philippines DevCo
- Semirara Mining and Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Tata Chemicals Ltd - India
- Lanco Infratech Ltd - India
- Kepco SPC Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Neyveli Lignite Corporation Ltd, - India
- Aditya Birla Group - India
- Antam Resourcindo - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Jindal Steel & Power Ltd - India
- CIMB Investment Bank - Malaysia
- Cigading International Bulk Terminal - Indonesia
- Deloitte Consulting - India
- Xindia Steels Limited - India
- ASAPP Information Group - India
- Malabar Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- Sojitz Corporation - Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- Wood Mackenzie - Singapore
- Vedanta Resources Plc - India
- Ministry of Mines - Canada
- Minerals Council of Australia
- Central Electricity Authority - India
- Riau Bara Harum - Indonesia
- Attock Cement Pakistan Limited
- Uttam Galva Steels Limited - India
- Bangladesh Power Developement Board
- Chamber of Mines of South Africa
- Posco Energy - South Korea
- IEA Clean Coal Centre - UK
- ICICI Bank Limited - India
- India Bulls Power Limited - India
- Meenaskhi Energy Private Limited - India
- Indian Oil Corporation Limited
- AsiaOL BioFuels Corp., Philippines
- Oldendorff Carriers - Singapore
- Sindya Power Generating Company Private Ltd
- South Luzon Thermal Energy Corporation
- Agrawal Coal Company - India
- Kapuas Tunggal Persada - Indonesia
- Orica Mining Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- Coalindo Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Australian Commodity Traders Exchange
- Interocean Group of Companies - India
- Metalloyd Limited - United Kingdom
- San Jose City I Power Corp, Philippines
- Parry Sugars Refinery, India
- Holcim Trading Pte Ltd - Singapore
- Gujarat Sidhee Cement - India
- Carbofer General Trading SA - India
- Romanian Commodities Exchange
- Trasteel International SA, Italy
- Billiton Holdings Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- VISA Power Limited - India
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