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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, 11 October 10
COAL IMPORTS TO START IN 2015 - VIETNAM BUSINESS
Vietnam Business reported that, Viet Nam is now likely to import coal only from 2015, not 2013 as earlier forecast since many thermal power pl ...
Monday, 11 October 10
OCTOBER INDONESIAN COAL PRICE REFERENCE UP BY 2.92 PERCENT
COALspot.com: The Directorate General of Mineral, Coal and Geothermal of Indonesia has been publishing a monthly coal price reference (HBA) since Fe ...
Saturday, 09 October 10
MPPGCL SEEKS TO BUY 0.40 MLN MT OF COAL FOR ITS THERMAL POWER STATIONS
COALspot.com: India's Madhya Pradesh Generating Company Limited (MPPGCL), Jabalpur, Madhya Pradesh invites bidders through tender 07-03/Import/Coal ...
Saturday, 09 October 10
FREIGHT MARKET IS EXPECTED TO FIRM UP NEXT WEEK CAPT REDDY
COALspot.com: Inspite of Chinese holidays the BDI was up by 10 pct and closed at 2,696 points. The cape index shot up to 20 pct and closed at 4,076 ...
Saturday, 09 October 10
9TH ASIA PACIFIC MINING CONFERENCE & EXHIBITION 13 14 OCTOBER 2010 AT SHANGRI-LA HOTEL, JAKARTA.
COALspot.com: (Press Release) In October 2010, the Indonesian Mining Association (IMA) and the Indonesian Coal Mining Association (APBI) will host t ...
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- Siam City Cement PLC, Thailand
- Independent Power Producers Association of India
- Bukit Baiduri Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Port Waratah Coal Services - Australia
- GVK Power & Infra Limited - India
- Vizag Seaport Private Limited - India
- Electricity Authority, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Merrill Lynch Commodities Europe
- Cigading International Bulk Terminal - Indonesia
- Sojitz Corporation - Japan
- Carbofer General Trading SA - India
- Bahari Cakrawala Sebuku - Indonesia
- Central Java Power - Indonesia
- Indian Oil Corporation Limited
- Malabar Cements Ltd - India
- MS Steel International - UAE
- Coalindo Energy - Indonesia
- Eastern Coal Council - USA
- Romanian Commodities Exchange
- Energy Development Corp, Philippines
- Meenaskhi Energy Private Limited - India
- The Treasury - Australian Government
- Altura Mining Limited, Indonesia
- CNBM International Corporation - China
- Semirara Mining and Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Iligan Light & Power Inc, Philippines
- Aditya Birla Group - India
- Mercator Lines Limited - India
- Bharathi Cement Corporation - India
- Metalloyd Limited - United Kingdom
- Simpson Spence & Young - Indonesia
- Parry Sugars Refinery, India
- Siam City Cement - Thailand
- Larsen & Toubro Limited - India
- Ministry of Transport, Egypt
- Global Business Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Star Paper Mills Limited - India
- Indonesian Coal Mining Association
- Pipit Mutiara Jaya. PT, Indonesia
- Baramulti Group, Indonesia
- Banpu Public Company Limited - Thailand
- Kobexindo Tractors - Indoneisa
- IHS Mccloskey Coal Group - USA
- Kumho Petrochemical, South Korea
- Miang Besar Coal Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- Goldman Sachs - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Africa Commodities Group - South Africa
- Indo Tambangraya Megah - Indonesia
- South Luzon Thermal Energy Corporation
- VISA Power Limited - India
- Mercuria Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Globalindo Alam Lestari - Indonesia
- ICICI Bank Limited - India
- Kaltim Prima Coal - Indonesia
- Antam Resourcindo - Indonesia
- Essar Steel Hazira Ltd - India
- Anglo American - United Kingdom
- Eastern Energy - Thailand
- Deloitte Consulting - India
- Sical Logistics Limited - India
- Gujarat Sidhee Cement - India
- TNB Fuel Sdn Bhd - Malaysia
- Riau Bara Harum - Indonesia
- Australian Coal Association
- Central Electricity Authority - India
- Ambuja Cements Ltd - India
- Salva Resources Pvt Ltd - India
- Rio Tinto Coal - Australia
- Semirara Mining Corp, Philippines
- Therma Luzon, Inc, Philippines
- Georgia Ports Authority, United States
- Minerals Council of Australia
- Maheswari Brothers Coal Limited - India
- Savvy Resources Ltd - HongKong
- Thai Mozambique Logistica
- Bhushan Steel Limited - India
- Kepco SPC Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- Ind-Barath Power Infra Limited - India
- Standard Chartered Bank - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Uttam Galva Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- New Zealand Coal & Carbon
- ASAPP Information Group - India
- Attock Cement Pakistan Limited
- Chettinad Cement Corporation Ltd - India
- Coastal Gujarat Power Limited - India
- Oldendorff Carriers - Singapore
- Leighton Contractors Pty Ltd - Australia
- The University of Queensland
- Singapore Mercantile Exchange
- Edison Trading Spa - Italy
- Samtan Co., Ltd - South Korea
- Manunggal Multi Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Kohat Cement Company Ltd. - Pakistan
- Bangladesh Power Developement Board
- GAC Shipping (India) Pvt Ltd
- Indika Energy - Indonesia
- Interocean Group of Companies - India
- Planning Commission, India
- Maharashtra Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Asmin Koalindo Tuhup - Indonesia
- Bukit Makmur.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Krishnapatnam Port Company Ltd. - India
- Binh Thuan Hamico - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Cement Manufacturers Association - India
- PowerSource Philippines DevCo
- McConnell Dowell - Australia
- Madhucon Powers Ltd - India
- Bulk Trading Sa - Switzerland
- LBH Netherlands Bv - Netherlands
- White Energy Company Limited
- Rashtriya Ispat Nigam Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Indogreen Group - Indonesia
- Alfred C Toepfer International GmbH - Germany
- OPG Power Generation Pvt Ltd - India
- Mjunction Services Limited - India
- India Bulls Power Limited - India
- Vedanta Resources Plc - India
- Petron Corporation, Philippines
- Ministry of Finance - Indonesia
- Heidelberg Cement - Germany
- Posco Energy - South Korea
- Thiess Contractors Indonesia
- Directorate Of Revenue Intelligence - India
- Energy Link Ltd, New Zealand
- Borneo Indobara - Indonesia
- SMC Global Power, Philippines
- GMR Energy Limited - India
- Tata Chemicals Ltd - India
- Coal and Oil Company - UAE
- Orica Australia Pty. Ltd.
- Sinarmas Energy and Mining - Indonesia
- Commonwealth Bank - Australia
- Australian Commodity Traders Exchange
- Economic Council, Georgia
- Parliament of New Zealand
- Orica Mining Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Straits Asia Resources Limited - Singapore
- London Commodity Brokers - England
- IEA Clean Coal Centre - UK
- Aboitiz Power Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- International Coal Ventures Pvt Ltd - India
- Trasteel International SA, Italy
- CIMB Investment Bank - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sindya Power Generating Company Private Ltd
- Bhoruka Overseas - Indonesia
- Kideco Jaya Agung - Indonesia
- Power Finance Corporation Ltd., India
- Marubeni Corporation - India
- SN Aboitiz Power Inc, Philippines
- Wood Mackenzie - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Jindal Steel & Power Ltd - India
- Xindia Steels Limited - India
- TeaM Sual Corporation - Philippines
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Electricity Generating Authority of Thailand
- Ministry of Mines - Canada
- San Jose City I Power Corp, Philippines
- Renaissance Capital - South Africa
- Agrawal Coal Company - India
- PTC India Limited - India
- Ceylon Electricity Board - Sri Lanka
- Kapuas Tunggal Persada - Indonesia
- Videocon Industries ltd - India
- Global Green Power PLC Corporation, Philippines
- Wilmar Investment Holdings
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Jaiprakash Power Ventures ltd
- Kartika Selabumi Mining - Indonesia
- Medco Energi Mining Internasional
- Mintek Dendrill Indonesia
- Makarim & Taira - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sakthi Sugars Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Grasim Industreis Ltd - India
- Tamil Nadu electricity Board
- SMG Consultants - Indonesia
- Chamber of Mines of South Africa
- Billiton Holdings Pty Ltd - Australia
- Latin American Coal - Colombia
- Kalimantan Lumbung Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Dalmia Cement Bharat India
- Barasentosa Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- European Bulk Services B.V. - Netherlands
- Intertek Mineral Services - Indonesia
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