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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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Saturday, 09 October 10
SAIL SEEKS LONG-TERM COKING COAL SUPPLY FROM GLOBAL COMPANIES - BUSINESS STANDARD
State-owned Steel Authority of India (SAIL) Friday invited bids from global companies for long-term supply of coking coal to feed its expanding stee ...
Friday, 08 October 10
INVESTORS STILL RELUCTANT TO ENTER DOWNSTREAM INDUSTRIES - THE JAKARTA POST
The Jakarta Post reported that, mining companies are showing a low level of enthusiasm to enter the downstream industries, as required by the 2009 M ...
Friday, 08 October 10
VESSEL OWNERS ARE RELUCTANT FOR INDONESIA TO INDIA COAL TRIPS - FEARNBULK
Handy
Last week ended with a flourish of activity as the Chinese tried to fix any prompt vessels before the Golden week festivities, and since the ...
Thursday, 07 October 10
MIRACH ENERGY GAINS RIGHTS TO EAST KALIMANTAN COAL MINE - THE EDGE SINGAPORE
The Edge Singapore reported that, Mirach Energy says it has gained the rights to produce and sell coal in an open-pit coal mine in Samarinda, the ca ...
Tuesday, 05 October 10
EWP SEEKING VIETNAMS ANTHRACITE COAL
COALspot.com: South Korea’s EWP is seeking Min 200,000MT of Vietnam coal with plus or minus 30,000MT at EWP’s (Korea East West Power Co ...
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- New Zealand Coal & Carbon
- PTC India Limited - India
- Singapore Mercantile Exchange
- Leighton Contractors Pty Ltd - Australia
- GVK Power & Infra Limited - India
- Thiess Contractors Indonesia
- ASAPP Information Group - India
- Vizag Seaport Private Limited - India
- Deloitte Consulting - India
- Kideco Jaya Agung - Indonesia
- Ministry of Mines - Canada
- Krishnapatnam Port Company Ltd. - India
- Vijayanagar Sugar Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- GMR Energy Limited - India
- Sakthi Sugars Limited - India
- Edison Trading Spa - Italy
- Neyveli Lignite Corporation Ltd, - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Energy - Thailand
- Mercuria Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Bulk Trading Sa - Switzerland
- LBH Netherlands Bv - Netherlands
- Global Green Power PLC Corporation, Philippines
- Wood Mackenzie - Singapore
- Madhucon Powers Ltd - India
- Georgia Ports Authority, United States
- Manunggal Multi Energi - Indonesia
- Bangladesh Power Developement Board
- Coal and Oil Company - UAE
- GN Power Mariveles Coal Plant, Philippines
- Global Coal Blending Company Limited - Australia
- Standard Chartered Bank - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Renaissance Capital - South Africa
- TeaM Sual Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Riau Bara Harum - Indonesia
- Mjunction Services Limited - India
- Sojitz Corporation - Japan
- Antam Resourcindo - Indonesia
- Electricity Authority, New Zealand
- Larsen & Toubro Limited - India
- Semirara Mining Corp, Philippines
- Star Paper Mills Limited - India
- Banpu Public Company Limited - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Maheswari Brothers Coal Limited - India
- Petron Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Kepco SPC Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Toyota Tsusho Corporation, Japan
- Tamil Nadu electricity Board
- Mercator Lines Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Agrawal Coal Company - India
- San Jose City I Power Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The University of Queensland
- Sical Logistics Limited - India
- Ceylon Electricity Board - Sri Lanka
- Electricity Generating Authority of Thailand
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- Directorate Of Revenue Intelligence - India
- Therma Luzon, Inc, Philippines
- Lanco Infratech Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Port Waratah Coal Services - Australia
- Kumho Petrochemical, South Korea
- Latin American Coal - Colombia
- Goldman Sachs - Singapore
- PNOC Exploration Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Medco Energi Mining Internasional
- Kohat Cement Company Ltd. - Pakistan
- Bhatia International Limited - India
- GAC Shipping (India) Pvt Ltd
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Grasim Industreis Ltd - India
- Economic Council, Georgia
- Romanian Commodities Exchange
- South Luzon Thermal Energy Corporation
- Rio Tinto Coal - Australia
- Bhushan Steel Limited - India
- Marubeni Corporation - India
- Formosa Plastics Group - Taiwan
- Indo Tambangraya Megah - Indonesia
- CIMB Investment Bank - Malaysia
- Sindya Power Generating Company Private Ltd
- Aboitiz Power Corporation - Philippines
- Indian Oil Corporation Limited
- Gujarat Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Tata Chemicals Ltd - India
- Central Java Power - Indonesia
- Anglo American - United Kingdom
- CNBM International Corporation - China
- SMC Global Power, Philippines
- Uttam Galva Steels Limited - India
- Trasteel International SA, Italy
- Australian Coal Association
- PetroVietnam Power Coal Import and Supply Company
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- The State Trading Corporation of India Ltd
- MS Steel International - UAE
- Barasentosa Lestari - Indonesia
- Altura Mining Limited, Indonesia
- Intertek Mineral Services - Indonesia
- Orica Australia Pty. Ltd.
- Pipit Mutiara Jaya. PT, Indonesia
- Pendopo Energi Batubara - Indonesia
- Sree Jayajothi Cements Limited - India
- Timah Investasi Mineral - Indoneisa
- Ministry of Transport, Egypt
- VISA Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Chamber of Mines of South Africa
- Holcim Trading Pte Ltd - Singapore
- Straits Asia Resources Limited - Singapore
- Indonesian Coal Mining Association
- Central Electricity Authority - India
- Planning Commission, India
- India Bulls Power Limited - India
- Price Waterhouse Coopers - Russia
- Borneo Indobara - Indonesia
- SMG Consultants - Indonesia
- Gujarat Sidhee Cement - India
- Iligan Light & Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Energy Development Corp, Philippines
- Global Business Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- IEA Clean Coal Centre - UK
- Parry Sugars Refinery, India
- Jindal Steel & Power Ltd - India
- Wilmar Investment Holdings
- IHS Mccloskey Coal Group - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Posco Energy - South Korea
- Essar Steel Hazira Ltd - India
- Bharathi Cement Corporation - India
- Parliament of New Zealand
- Kaltim Prima Coal - Indonesia
- Cement Manufacturers Association - India
- Makarim & Taira - Indonesia
- Vedanta Resources Plc - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indika Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement - Thailand
- London Commodity Brokers - England
- Sinarmas Energy and Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Independent Power Producers Association of India
- Asmin Koalindo Tuhup - Indonesia
- Malabar Cements Ltd - India
- Carbofer General Trading SA - India
- Minerals Council of Australia
- Mintek Dendrill Indonesia
- European Bulk Services B.V. - Netherlands
- International Coal Ventures Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Savvy Resources Ltd - HongKong
- Ambuja Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- ICICI Bank Limited - India
- Dalmia Cement Bharat India
- Globalindo Alam Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Australian Commodity Traders Exchange
- Attock Cement Pakistan Limited
- Eastern Coal Council - USA
- Cigading International Bulk Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Africa Commodities Group - South Africa
- Xindia Steels Limited - India
- Ministry of Finance - Indonesia
- Energy Link Ltd, New Zealand
- Coastal Gujarat Power Limited - India
- Coalindo Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Samtan Co., Ltd - South Korea
- Rashtriya Ispat Nigam Limited - India
- Chettinad Cement Corporation Ltd - India
- Indogreen Group - Indonesia
- The Treasury - Australian Government
- Ind-Barath Power Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Videocon Industries ltd - India
- White Energy Company Limited
- Indian Energy Exchange, India
- Binh Thuan Hamico - Vietnam
- Bukit Makmur.PT - Indonesia
- PowerSource Philippines DevCo
- Meralco Power Generation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Salva Resources Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- McConnell Dowell - Australia
- Baramulti Group, Indonesia
- Interocean Group of Companies - India
- Thai Mozambique Logistica
- Karaikal Port Pvt Ltd - India
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