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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, 25 September 10
PRESSURE ON S6 AND S7 ROUTES SEEMS TO BE CONTINUED NEXT WEEK CAPT. REDDY
COALspot.com: The freight market has been flat this week due to holidays in China and low activity saw all sectors down and soft.
The BDI was dow ...
Thursday, 23 September 10
CHURCHILL MINING SHARES JUMP ON EAST KUTAI COAL PROJECT FEASIBILITY RESULTS - STOCKOPEDIA
AIM listed mining group Churchill Mining (LON:CHL) and its Indonesian partners the Ridlatama Group, have completed a feasibility study on the 2.73bn ...
Thursday, 23 September 10
DRY BULK RATES EXPECTEDLY FALL TO ONE MONTH LOWS - HELLENIC SHIPPING
With of the Far East trade routes closed this week on various national holidays, demand for ocean transportation of raw materials has been significa ...
Wednesday, 22 September 10
INDIA TO BE BIGGEST BUYER OF INDONESIAN COAL BY 2011 - BUSINESS STANDARD
India will pass Japan to be the biggest buyer of Indonesian coal by 2011, said Bob Kamandanu, chairman of the Indonesian Coal Mining Association.
...
Wednesday, 22 September 10
DRY BULK MARKET SENTIMENT TURNS SOUTH AS IRON ORE DEMAND DECLINES
The dry bulk market has once again turned the tide, with the industry’s benchmark, the Baltic Dry Index (BDI) turning south during the previou ...
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- Uttam Galva Steels Limited - India
- GMR Energy Limited - India
- Energy Link Ltd, New Zealand
- New Zealand Coal & Carbon
- Rio Tinto Coal - Australia
- Chamber of Mines of South Africa
- Australian Coal Association
- Bukit Baiduri Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Coalindo Energy - Indonesia
- Oldendorff Carriers - Singapore
- Larsen & Toubro Limited - India
- Medco Energi Mining Internasional
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- Coal and Oil Company - UAE
- Global Business Power Corporation, Philippines
- Latin American Coal - Colombia
- Electricity Generating Authority of Thailand
- Lanco Infratech Ltd - India
- OPG Power Generation Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Bukit Makmur.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Commonwealth Bank - Australia
- Barasentosa Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Riau Bara Harum - Indonesia
- Thai Mozambique Logistica
- Semirara Mining Corp, Philippines
- Maheswari Brothers Coal Limited - India
- SMG Consultants - Indonesia
- Ministry of Finance - Indonesia
- Agrawal Coal Company - India
- Sinarmas Energy and Mining - Indonesia
- ASAPP Information Group - India
- Siam City Cement PLC, Thailand
- Ind-Barath Power Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Edison Trading Spa - Italy
- Sical Logistics Limited - India
- SN Aboitiz Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Holcim Trading Pte Ltd - Singapore
- The University of Queensland
- Marubeni Corporation - India
- Interocean Group of Companies - India
- Videocon Industries ltd - India
- Coastal Gujarat Power Limited - India
- Orica Mining Services - Indonesia
- Ministry of Mines - Canada
- Krishnapatnam Port Company Ltd. - India
- Renaissance Capital - South Africa
- SMC Global Power, Philippines
- Planning Commission, India
- Vedanta Resources Plc - India
- Minerals Council of Australia
- Indika Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Trasteel International SA, Italy
- TNB Fuel Sdn Bhd - Malaysia
- AsiaOL BioFuels Corp., Philippines
- London Commodity Brokers - England
- Samtan Co., Ltd - South Korea
- Kobexindo Tractors - Indoneisa
- San Jose City I Power Corp, Philippines
- Deloitte Consulting - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Meralco Power Generation, Philippines
- Bharathi Cement Corporation - India
- Petron Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Sidhee Cement - India
- Indian Energy Exchange, India
- Port Waratah Coal Services - Australia
- IEA Clean Coal Centre - UK
- Orica Australia Pty. Ltd.
- Bhushan Steel Limited - India
- Mercator Lines Limited - India
- PTC India Limited - India
- TeaM Sual Corporation - Philippines
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- White Energy Company Limited
- GVK Power & Infra Limited - India
- Indonesian Coal Mining Association
- Georgia Ports Authority, United States
- VISA Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Carbofer General Trading SA - India
- Attock Cement Pakistan Limited
- Indian Oil Corporation Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sakthi Sugars Limited - India
- Africa Commodities Group - South Africa
- Goldman Sachs - Singapore
- IHS Mccloskey Coal Group - USA
- Power Finance Corporation Ltd., India
- Timah Investasi Mineral - Indoneisa
- Malabar Cements Ltd - India
- Madhucon Powers Ltd - India
- Sree Jayajothi Cements Limited - India
- PowerSource Philippines DevCo
- Vizag Seaport Private Limited - India
- Manunggal Multi Energi - Indonesia
- Central Electricity Authority - India
- GAC Shipping (India) Pvt Ltd
- Parry Sugars Refinery, India
- Baramulti Group, Indonesia
- South Luzon Thermal Energy Corporation
- Standard Chartered Bank - UAE
- Bhatia International Limited - India
- Antam Resourcindo - Indonesia
- Straits Asia Resources Limited - Singapore
- Bangladesh Power Developement Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ambuja Cements Ltd - India
- The Treasury - Australian Government
- Gujarat Mineral Development Corp Ltd - India
- Dalmia Cement Bharat India
- Posco Energy - South Korea
- Mintek Dendrill Indonesia
- Kideco Jaya Agung - Indonesia
- Bayan Resources Tbk. - Indonesia
- Toyota Tsusho Corporation, Japan
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- Sindya Power Generating Company Private Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhoruka Overseas - Indonesia
- Electricity Authority, New Zealand
- Sojitz Corporation - Japan
- Intertek Mineral Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Development Corp, Philippines
- Wood Mackenzie - Singapore
- Aboitiz Power Corporation - Philippines
- Tamil Nadu electricity Board
- Kaltim Prima Coal - Indonesia
- Mjunction Services Limited - India
- Leighton Contractors Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Ministry of Transport, Egypt
- Miang Besar Coal Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Formosa Plastics Group - Taiwan
- ICICI Bank Limited - India
- Thiess Contractors Indonesia
- Metalloyd Limited - United Kingdom
- Eastern Energy - Thailand
- Aditya Birla Group - India
- Ceylon Electricity Board - Sri Lanka
- Parliament of New Zealand
- Therma Luzon, Inc, Philippines
- Wilmar Investment Holdings
- Simpson Spence & Young - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Grasim Industreis Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Kumho Petrochemical, South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Alfred C Toepfer International GmbH - Germany
- Central Java Power - Indonesia
- CNBM International Corporation - China
- CIMB Investment Bank - Malaysia
- Global Green Power PLC Corporation, Philippines
- Mercuria Energy - Indonesia
- Merrill Lynch Commodities Europe
- Star Paper Mills Limited - India
- Kepco SPC Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Kartika Selabumi Mining - Indonesia
- Independent Power Producers Association of India
- Cement Manufacturers Association - India
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Electricity Regulatory Commission - India
- Xindia Steels Limited - India
- Altura Mining Limited, Indonesia
- Heidelberg Cement - Germany
- Karaikal Port Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rashtriya Ispat Nigam Limited - India
- Romanian Commodities Exchange
- Bulk Trading Sa - Switzerland
- Indogreen Group - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Iligan Light & Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Australian Commodity Traders Exchange
- Chettinad Cement Corporation Ltd - India
- Borneo Indobara - Indonesia
- Indo Tambangraya Megah - Indonesia
- Singapore Mercantile Exchange
- PNOC Exploration Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- Savvy Resources Ltd - HongKong
- Maharashtra Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Tata Chemicals Ltd - India
- MS Steel International - UAE
- The State Trading Corporation of India Ltd
- Makarim & Taira - Indonesia
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