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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, 01 October 10
COAL TRADERS POWER FOREIGN ASSET BUYS - ECONOMIC TIMES
Economic Times reported that, the rush to own coal assets is leading to innovative alliances. are teaming up with utilities like , Reliance Power an ...
Thursday, 30 September 10
LOW CALORIFIC VALUE COAL MAY BE SOLD BELOW COAL REFERENCE PRICE IN INDONESIA
COALspot.com: Indonesia, the world’s largest coal exporter has issued another ministerial decree to regulate the selling price of coal of Indo ...
Thursday, 30 September 10
INITIAL PHASE OF MOATIZE MINING BY EARLY NOVEMBER - ALL AFRICA
All Africa report that, the initial phase of mining coal at Moatize, in the western Mozambican province of Tete, will begin by early November, and t ...
Thursday, 30 September 10
THE PANAMAX CONTINUED ITS DOWNWARD TREND FROM LAST WEEK - FEARNBULK
HANDY
Activity remains slow this week combined with a lack of fresh enquiry and tonnage over-supply in the Atlantic. Indexes are all negative exce ...
Thursday, 30 September 10
INDONESIAN COAL FOR POWER PLANT - LANKA GAZETTE
Lanka Gazette reported that, A cargo vessel with coal on board to generate electricity for the Norochcholai Coal Power Plant will arrive in Sri Lank ...
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- Indian Oil Corporation Limited
- Straits Asia Resources Limited - Singapore
- MS Steel International - UAE
- Coalindo Energy - Indonesia
- Mercuria Energy - Indonesia
- London Commodity Brokers - England
- Africa Commodities Group - South Africa
- Agrawal Coal Company - India
- Energy Development Corp, Philippines
- Vizag Seaport Private Limited - India
- Bhushan Steel Limited - India
- Bulk Trading Sa - Switzerland
- Tata Chemicals Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- SMG Consultants - Indonesia
- Sree Jayajothi Cements Limited - India
- Baramulti Group, Indonesia
- Banpu Public Company Limited - Thailand
- Riau Bara Harum - Indonesia
- Ambuja Cements Ltd - India
- Marubeni Corporation - India
- CNBM International Corporation - China
- Meralco Power Generation, Philippines
- Romanian Commodities Exchange
- SN Aboitiz Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- Eastern Energy - Thailand
- Karaikal Port Pvt Ltd - India
- Mercator Lines Limited - India
- Economic Council, Georgia
- Kohat Cement Company Ltd. - Pakistan
- Orica Australia Pty. Ltd.
- Savvy Resources Ltd - HongKong
- Samtan Co., Ltd - South Korea
- Borneo Indobara - Indonesia
- Kartika Selabumi Mining - Indonesia
- PowerSource Philippines DevCo
- European Bulk Services B.V. - Netherlands
- Bukit Baiduri Energy - Indonesia
- McConnell Dowell - Australia
- Madhucon Powers Ltd - India
- San Jose City I Power Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
- Indika Energy - Indonesia
- Thai Mozambique Logistica
- Barasentosa Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Mjunction Services Limited - India
- Planning Commission, India
- The State Trading Corporation of India Ltd
- Standard Chartered Bank - UAE
- Wilmar Investment Holdings
- Gujarat Sidhee Cement - India
- Timah Investasi Mineral - Indoneisa
- Deloitte Consulting - India
- Sakthi Sugars Limited - India
- Grasim Industreis Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Jaiprakash Power Ventures ltd
- Sindya Power Generating Company Private Ltd
- Edison Trading Spa - Italy
- Coal and Oil Company - UAE
- Antam Resourcindo - Indonesia
- Tamil Nadu electricity Board
- TNB Fuel Sdn Bhd - Malaysia
- Chettinad Cement Corporation Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- The University of Queensland
- New Zealand Coal & Carbon
- PNOC Exploration Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Maheswari Brothers Coal Limited - India
- Petron Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- GMR Energy Limited - India
- Salva Resources Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Indian Energy Exchange, India
- Indogreen Group - Indonesia
- Cement Manufacturers Association - India
- Aditya Birla Group - India
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Billiton Holdings Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- Rio Tinto Coal - Australia
- Siam City Cement - Thailand
- Uttam Galva Steels Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Latin American Coal - Colombia
- Kaltim Prima Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Bhatia International Limited - India
- Coastal Gujarat Power Limited - India
- Siam City Cement PLC, Thailand
- Maharashtra Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Bukit Makmur.PT - Indonesia
- Ministry of Finance - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Anglo American - United Kingdom
- International Coal Ventures Pvt Ltd - India
- Malabar Cements Ltd - India
- Australian Coal Association
- GN Power Mariveles Coal Plant, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Attock Cement Pakistan Limited
- Kideco Jaya Agung - Indonesia
- Jindal Steel & Power Ltd - India
- GVK Power & Infra Limited - India
- Ministry of Transport, Egypt
- Global Coal Blending Company Limited - Australia
- Indonesian Coal Mining Association
- Georgia Ports Authority, United States
- AsiaOL BioFuels Corp., Philippines
- Rashtriya Ispat Nigam Limited - India
- Merrill Lynch Commodities Europe
- Leighton Contractors Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMC Global Power, Philippines
- Independent Power Producers Association of India
- IHS Mccloskey Coal Group - USA
- Xindia Steels Limited - India
- Energy Link Ltd, New Zealand
- Chamber of Mines of South Africa
- Power Finance Corporation Ltd., India
- India Bulls Power Limited - India
- Electricity Authority, New Zealand
- Lanco Infratech Ltd - India
- Manunggal Multi Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Minerals Council of Australia
- CIMB Investment Bank - Malaysia
- Mintek Dendrill Indonesia
- Renaissance Capital - South Africa
- Electricity Generating Authority of Thailand
- Kapuas Tunggal Persada - Indonesia
- Sarangani Energy Corporation, Philippines
- Central Electricity Authority - India
- Sojitz Corporation - Japan
- VISA Power Limited - India
- Altura Mining Limited, Indonesia
- Parliament of New Zealand
- Ind-Barath Power Infra Limited - India
- Heidelberg Cement - Germany
- ASAPP Information Group - India
- Singapore Mercantile Exchange
- Karbindo Abesyapradhi - Indoneisa
- TeaM Sual Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Kobexindo Tractors - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- PTC India Limited - India
- Parry Sugars Refinery, India
- Carbofer General Trading SA - India
- Intertek Mineral Services - Indonesia
- White Energy Company Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Interocean Group of Companies - India
- Dalmia Cement Bharat India
- IEA Clean Coal Centre - UK
- Vedanta Resources Plc - India
- Indo Tambangraya Megah - Indonesia
- Eastern Coal Council - USA
- Sical Logistics Limited - India
- Videocon Industries ltd - India
- Ministry of Mines - Canada
- Kalimantan Lumbung Energi - Indonesia
- Wood Mackenzie - Singapore
- ICICI Bank Limited - India
- Sinarmas Energy and Mining - Indonesia
- Posco Energy - South Korea
- Central Java Power - Indonesia
- Aboitiz Power Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Global Business Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Commodity Traders Exchange
- Oldendorff Carriers - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bayan Resources Tbk. - Indonesia
- Bhoruka Overseas - Indonesia
- Commonwealth Bank - Australia
- Kumho Petrochemical, South Korea
- Orica Mining Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Makarim & Taira - Indonesia
- Larsen & Toubro Limited - India
- Meenaskhi Energy Private Limited - India
- Medco Energi Mining Internasional
- Directorate General of MIneral and Coal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kepco SPC Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Trasteel International SA, Italy
- Goldman Sachs - Singapore
- Ceylon Electricity Board - Sri Lanka
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Miang Besar Coal Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Thiess Contractors Indonesia
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