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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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Monday, 13 December 10
ICE FUTURES EUROPE TO LAUNCH IHS MCCLOSKEY INDONESIAN SUB-BITUMINOUS FOB MARKER COAL CONTRACTS - MONDOVISIONE
Mondovisione reported that, IntercontinentalExchange (NYSE: ICE), a leading operator of global regulated futures exchanges, clearing houses and over ...
Monday, 13 December 10
NALCO TO START WORK ON RS 18K CR ($ 4,010,695,091) INDONESIAN PROJECT BY JUNE - MSN
MSN reported that, State-owned NALCO today said it has selected UAE-based RAK Minerals as JV partner for its Rs 18,000 crore (US$ 4,010,695,091 ...
Monday, 13 December 10
DEUTSCHE BANK RAISES COAL FORECASTS ON MARKET SHORTAGE - BLOOMBERG
Deutsche Bank AG raised price forecasts for thermal coal by as much as 17 percent on expectations that a shortage of the fuel will widen over the ne ...
Monday, 13 December 10
K SERA SERA TO SPEND RS325CR TO BUY COAL,OIL & GAS FIRMS STAKE - LIVE MINT
The company might have to dole out around Rs 225 crore (US$ 50,122,522) for picking up the majority stake in the coal mine in Indonesia and around R ...
Thursday, 09 December 10
OVERSUPPLY OF SHIPS BOUND TO KEEP DRY BULK FREIGHT RATES SUBDUED DURING 2011 SAYS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
An oversupply of vessels is expected to keep freight rates from flying as high as in recent years said a relative shipping report from BIMCO’s ...
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- Ministry of Transport, Egypt
- Indika Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Planning Commission, India
- VISA Power Limited - India
- Goldman Sachs - Singapore
- Semirara Mining and Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Sarangani Energy Corporation, Philippines
- The State Trading Corporation of India Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Parry Sugars Refinery, India
- Price Waterhouse Coopers - Russia
- Jindal Steel & Power Ltd - India
- Thai Mozambique Logistica
- Anglo American - United Kingdom
- Cement Manufacturers Association - India
- Wood Mackenzie - Singapore
- Kohat Cement Company Ltd. - Pakistan
- AsiaOL BioFuels Corp., Philippines
- Gujarat Sidhee Cement - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kobexindo Tractors - Indoneisa
- Sojitz Corporation - Japan
- Salva Resources Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Globalindo Alam Lestari - Indonesia
- Malabar Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Chettinad Cement Corporation Ltd - India
- Indian Oil Corporation Limited
- Sinarmas Energy and Mining - Indonesia
- Australian Commodity Traders Exchange
- Agrawal Coal Company - India
- Krishnapatnam Port Company Ltd. - India
- Tata Chemicals Ltd - India
- Sakthi Sugars Limited - India
- Indonesian Coal Mining Association
- New Zealand Coal & Carbon
- Global Business Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Independent Power Producers Association of India
- Simpson Spence & Young - Indonesia
- Central Java Power - Indonesia
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Sindya Power Generating Company Private Ltd
- Alfred C Toepfer International GmbH - Germany
- Toyota Tsusho Corporation, Japan
- Romanian Commodities Exchange
- Kapuas Tunggal Persada - Indonesia
- White Energy Company Limited
- Siam City Cement - Thailand
- Oldendorff Carriers - Singapore
- MS Steel International - UAE
- Tamil Nadu electricity Board
- Meralco Power Generation, Philippines
- PowerSource Philippines DevCo
- Edison Trading Spa - Italy
- GMR Energy Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhushan Steel Limited - India
- Makarim & Taira - Indonesia
- European Bulk Services B.V. - Netherlands
- Intertek Mineral Services - Indonesia
- Merrill Lynch Commodities Europe
- Global Green Power PLC Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Karaikal Port Pvt Ltd - India
- Petron Corporation, Philippines
- Dalmia Cement Bharat India
- CIMB Investment Bank - Malaysia
- SN Aboitiz Power Inc, Philippines
- Commonwealth Bank - Australia
- Medco Energi Mining Internasional
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Heidelberg Cement - Germany
- Electricity Authority, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- Holcim Trading Pte Ltd - Singapore
- Sical Logistics Limited - India
- Mjunction Services Limited - India
- Africa Commodities Group - South Africa
- Siam City Cement PLC, Thailand
- Thiess Contractors Indonesia
- Sree Jayajothi Cements Limited - India
- Power Finance Corporation Ltd., India
- London Commodity Brokers - England
- Straits Asia Resources Limited - Singapore
- Asmin Koalindo Tuhup - Indonesia
- India Bulls Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Deloitte Consulting - India
- Ind-Barath Power Infra Limited - India
- Singapore Mercantile Exchange
- Interocean Group of Companies - India
- Iligan Light & Power Inc, Philippines
- Altura Mining Limited, Indonesia
- ASAPP Information Group - India
- Energy Development Corp, Philippines
- SMC Global Power, Philippines
- Parliament of New Zealand
- Meenaskhi Energy Private Limited - India
- Port Waratah Coal Services - Australia
- Ambuja Cements Ltd - India
- Australian Coal Association
- Minerals Council of Australia
- OPG Power Generation Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Trasteel International SA, Italy
- Grasim Industreis Ltd - India
- Semirara Mining Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Uttam Galva Steels Limited - India
- GVK Power & Infra Limited - India
- Chamber of Mines of South Africa
- Bulk Trading Sa - Switzerland
- LBH Netherlands Bv - Netherlands
- Renaissance Capital - South Africa
- Therma Luzon, Inc, Philippines
- Standard Chartered Bank - UAE
- Billiton Holdings Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Carbofer General Trading SA - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bangladesh Power Developement Board
- PTC India Limited - India
- ICICI Bank Limited - India
- McConnell Dowell - Australia
- Madhucon Powers Ltd - India
- The University of Queensland
- Jaiprakash Power Ventures ltd
- Eastern Energy - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- CNBM International Corporation - China
- Georgia Ports Authority, United States
- Pendopo Energi Batubara - Indonesia
- Eastern Coal Council - USA
- Riau Bara Harum - Indonesia
- Borneo Indobara - Indonesia
- Coastal Gujarat Power Limited - India
- Xindia Steels Limited - India
- Videocon Industries ltd - India
- Ministry of Mines - Canada
- Mintek Dendrill Indonesia
- Ministry of Finance - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Central Electricity Authority - India
- San Jose City I Power Corp, Philippines
- The Treasury - Australian Government
- Banpu Public Company Limited - Thailand
- Barasentosa Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Rio Tinto Coal - Australia
- Lanco Infratech Ltd - India
- Kartika Selabumi Mining - Indonesia
- Mercator Lines Limited - India
- Bukit Makmur.PT - Indonesia
- Wilmar Investment Holdings
- Manunggal Multi Energi - Indonesia
- Indian Energy Exchange, India
- Coal and Oil Company - UAE
- Savvy Resources Ltd - HongKong
- Formosa Plastics Group - Taiwan
- Kepco SPC Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Economic Council, Georgia
- Leighton Contractors Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Baramulti Group, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Star Paper Mills Limited - India
- Indo Tambangraya Megah - Indonesia
- PNOC Exploration Corporation - Philippines
- IEA Clean Coal Centre - UK
- Vedanta Resources Plc - India
- Attock Cement Pakistan Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Bharathi Cement Corporation - India
- Orica Australia Pty. Ltd.
- Posco Energy - South Korea
- Vizag Seaport Private Limited - India
- Directorate Of Revenue Intelligence - India
- GAC Shipping (India) Pvt Ltd
- Rashtriya Ispat Nigam Limited - India
- Aboitiz Power Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Marubeni Corporation - India
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
- Gujarat Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Bhatia International Limited - India
- Ceylon Electricity Board - Sri Lanka
- Latin American Coal - Colombia
- Mercuria Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Indogreen Group - Indonesia
- SMG Consultants - Indonesia
- IHS Mccloskey Coal Group - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karbindo Abesyapradhi - Indoneisa
- Aditya Birla Group - India
- Electricity Generating Authority of Thailand
- Orica Mining Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Timah Investasi Mineral - Indoneisa
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