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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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Wednesday, 17 November 10
DRY BULK MARKET LOOKING FOR SUPPORT IN COAL TRADES AND INDIAN IRON ORE EXPORTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Nikos Roussanoglou, Hellenic Shipping reported that, the dry bulk market is lacking support to end its 13-day slide, as evidenced by Monday’s ...
Tuesday, 16 November 10
'VALLAR PLC' TO BECOME 'BUMI PLC' POST DEAL - THE JAKARTA POST
The Jakarta Post reported that, The United Kingdom’s Vallar Plc will change its name to Bumi Plc following a cash and stock transaction with t ...
Tuesday, 16 November 10
ROTHSCHILD BUYS INDONESIAN COAL STAKES FOR $3 BILLION - BLOOMBERG
Bloomberg reported that, Nathaniel Rothschild, the only son of U.K. financier Jacob Rothschild, agreed to invest $3 billion in two Indonesian coal c ...
Sunday, 14 November 10
THE FREIGHT MARKET CONTINUED ITS DOWN FALL - VISTAAR SINGAPORE
COALspot.com: The freight market continued its down fall with BDI down by 7.29 pct and closed at 2,313 points.
All other segments were also under ...
Saturday, 13 November 10
INDONESIA SHIPPED 8.73 % MORE COAL IN OCTOBER THAN A MONTH EARLIER
COALspot.com: Indonesia, the world largest coal exporter, shipped 23.55 mln mt of coal in October 2010, which is 8.73 percent more compared to Septe ...
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- India Bulls Power Limited - India
- Economic Council, Georgia
- Simpson Spence & Young - Indonesia
- Pendopo Energi Batubara - Indonesia
- Merrill Lynch Commodities Europe
- Riau Bara Harum - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cement Manufacturers Association - India
- Gujarat Sidhee Cement - India
- MS Steel International - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Mercator Lines Limited - India
- GMR Energy Limited - India
- Global Green Power PLC Corporation, Philippines
- Bhushan Steel Limited - India
- Toyota Tsusho Corporation, Japan
- Barasentosa Lestari - Indonesia
- London Commodity Brokers - England
- Altura Mining Limited, Indonesia
- Madhucon Powers Ltd - India
- Ministry of Mines - Canada
- Mjunction Services Limited - India
- Global Coal Blending Company Limited - Australia
- Eastern Energy - Thailand
- Sakthi Sugars Limited - India
- Edison Trading Spa - Italy
- Kartika Selabumi Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- SMG Consultants - Indonesia
- Manunggal Multi Energi - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indogreen Group - Indonesia
- Rio Tinto Coal - Australia
- Oldendorff Carriers - Singapore
- Therma Luzon, Inc, Philippines
- Chamber of Mines of South Africa
- SMC Global Power, Philippines
- Samtan Co., Ltd - South Korea
- Electricity Generating Authority of Thailand
- Neyveli Lignite Corporation Ltd, - India
- Commonwealth Bank - Australia
- McConnell Dowell - Australia
- Ministry of Transport, Egypt
- PowerSource Philippines DevCo
- Australian Coal Association
- Banpu Public Company Limited - Thailand
- Orica Australia Pty. Ltd.
- Karbindo Abesyapradhi - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Jorong Barutama Greston.PT - Indonesia
- Mercuria Energy - Indonesia
- CNBM International Corporation - China
- Binh Thuan Hamico - Vietnam
- Petron Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Ministry of Finance - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Independent Power Producers Association of India
- Kumho Petrochemical, South Korea
- Borneo Indobara - Indonesia
- Uttam Galva Steels Limited - India
- Sical Logistics Limited - India
- Port Waratah Coal Services - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parry Sugars Refinery, India
- Karaikal Port Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- IEA Clean Coal Centre - UK
- Renaissance Capital - South Africa
- Bangladesh Power Developement Board
- Tata Chemicals Ltd - India
- Agrawal Coal Company - India
- Alfred C Toepfer International GmbH - Germany
- Chettinad Cement Corporation Ltd - India
- Medco Energi Mining Internasional
- Wilmar Investment Holdings
- Sinarmas Energy and Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Bulk Trading Sa - Switzerland
- Sarangani Energy Corporation, Philippines
- Heidelberg Cement - Germany
- Sree Jayajothi Cements Limited - India
- Timah Investasi Mineral - Indoneisa
- Central Java Power - Indonesia
- Latin American Coal - Colombia
- International Coal Ventures Pvt Ltd - India
- Goldman Sachs - Singapore
- Jaiprakash Power Ventures ltd
- Aditya Birla Group - India
- Bharathi Cement Corporation - India
- Georgia Ports Authority, United States
- Siam City Cement PLC, Thailand
- Videocon Industries ltd - India
- Mintek Dendrill Indonesia
- Kapuas Tunggal Persada - Indonesia
- Thiess Contractors Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Coalindo Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Singapore Mercantile Exchange
- ASAPP Information Group - India
- Parliament of New Zealand
- Posco Energy - South Korea
- SN Aboitiz Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Siam City Cement - Thailand
- AsiaOL BioFuels Corp., Philippines
- Sindya Power Generating Company Private Ltd
- Meralco Power Generation, Philippines
- Intertek Mineral Services - Indonesia
- Indian Oil Corporation Limited
- Gujarat Mineral Development Corp Ltd - India
- Indonesian Coal Mining Association
- Bhoruka Overseas - Indonesia
- Salva Resources Pvt Ltd - India
- Grasim Industreis Ltd - India
- Electricity Authority, New Zealand
- Bhatia International Limited - India
- PTC India Limited - India
- Dalmia Cement Bharat India
- Carbofer General Trading SA - India
- Meenaskhi Energy Private Limited - India
- VISA Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Sojitz Corporation - Japan
- Antam Resourcindo - Indonesia
- Deloitte Consulting - India
- The Treasury - Australian Government
- Krishnapatnam Port Company Ltd. - India
- GAC Shipping (India) Pvt Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Rashtriya Ispat Nigam Limited - India
- Gujarat Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Trasteel International SA, Italy
- Bahari Cakrawala Sebuku - Indonesia
- White Energy Company Limited
- Kaltim Prima Coal - Indonesia
- GVK Power & Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Formosa Plastics Group - Taiwan
- Holcim Trading Pte Ltd - Singapore
- Australian Commodity Traders Exchange
- Vizag Seaport Private Limited - India
- Baramulti Group, Indonesia
- Malabar Cements Ltd - India
- Jindal Steel & Power Ltd - India
- European Bulk Services B.V. - Netherlands
- Standard Chartered Bank - UAE
- PetroVietnam Power Coal Import and Supply Company
- Bayan Resources Tbk. - Indonesia
- Directorate Of Revenue Intelligence - India
- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
- ICICI Bank Limited - India
- San Jose City I Power Corp, Philippines
- Star Paper Mills Limited - India
- LBH Netherlands Bv - Netherlands
- Bukit Baiduri Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Billiton Holdings Pty Ltd - Australia
- Eastern Coal Council - USA
- Central Electricity Authority - India
- Interocean Group of Companies - India
- Cigading International Bulk Terminal - Indonesia
- The University of Queensland
- Directorate General of MIneral and Coal - Indonesia
- Global Business Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Indian Energy Exchange, India
- Minerals Council of Australia
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- New Zealand Coal & Carbon
- Anglo American - United Kingdom
- IHS Mccloskey Coal Group - USA
- PNOC Exploration Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Power Finance Corporation Ltd., India
- Petrochimia International Co. Ltd.- Taiwan
- Metalloyd Limited - United Kingdom
- Price Waterhouse Coopers - Russia
- Marubeni Corporation - India
- Makarim & Taira - Indonesia
- Larsen & Toubro Limited - India
- Xindia Steels Limited - India
- Lanco Infratech Ltd - India
- Coal and Oil Company - UAE
- Romanian Commodities Exchange
- Africa Commodities Group - South Africa
- Wood Mackenzie - Singapore
- Tamil Nadu electricity Board
- Iligan Light & Power Inc, Philippines
- Attock Cement Pakistan Limited
- Indika Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kobexindo Tractors - Indoneisa
- Coastal Gujarat Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The State Trading Corporation of India Ltd
- South Luzon Thermal Energy Corporation
- GN Power Mariveles Coal Plant, Philippines
- Ambuja Cements Ltd - India
- Planning Commission, India
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