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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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Sunday, 05 September 10
HARUM ENERGY EYES 7.4 MILION TONS OF COAL OUTPUT IN 2010
Indonesia's coal miner PT Harum Energy Tbk, controlled by Indonesian tycoon Kiki Barki, is eyeing 7.4 million tons of coal production in 2010, a 27 ...
Sunday, 05 September 10
THE FREIGHT MARKET WAS BIT VOLATILE WITH NO CLEAR INDICATION OF THE MARKET - CAPT REDDY
COALsopot.com: The freight market was bit volatile with no clear indication of the market.
However the BDI continued the upward trend mainly due ...
Sunday, 05 September 10
NOROCHCHOLAI POWER PLANT TO BE COMMISSIONED ON JANUARY 1
Daily news reported that, the Norochcholai coal power plant will be commissioned on January 1, 2011 adding 300 megawatts to the national power grid ...
Friday, 03 September 10
BANPU CUTS INDONESIAN HOLDING BUT ITM REMAINS KEY STRATEGIC UNIT - BANGKOK POST
"SET-listed Banpu Plc, Asean's largest coal miner, yesterday announced the sale of an 8.72% stake in its listed coalmining holding company in ...
Friday, 03 September 10
NALCO, INDONESIAN FIRM DIFFER ON COAL SUPPLY TO SMELTER - DNA INDIA
A few days ago, National Aluminium Company (Nalco) advertised in Indonesian newspapers asking for companies to bid for coal supplies for its 500,000 ...
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- Kohat Cement Company Ltd. - Pakistan
- London Commodity Brokers - England
- European Bulk Services B.V. - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Mining Services - Indonesia
- Standard Chartered Bank - UAE
- Star Paper Mills Limited - India
- Interocean Group of Companies - India
- Bukit Baiduri Energy - Indonesia
- SMC Global Power, Philippines
- Madhucon Powers Ltd - India
- Aditya Birla Group - India
- Marubeni Corporation - India
- Straits Asia Resources Limited - Singapore
- Planning Commission, India
- Directorate Of Revenue Intelligence - India
- Coal and Oil Company - UAE
- Mintek Dendrill Indonesia
- LBH Netherlands Bv - Netherlands
- The University of Queensland
- Energy Development Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- Chamber of Mines of South Africa
- Mjunction Services Limited - India
- Edison Trading Spa - Italy
- Electricity Authority, New Zealand
- Bukit Makmur.PT - Indonesia
- Metalloyd Limited - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Ministry of Transport, Egypt
- Gujarat Sidhee Cement - India
- Iligan Light & Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- Bhoruka Overseas - Indonesia
- Deloitte Consulting - India
- PowerSource Philippines DevCo
- Power Finance Corporation Ltd., India
- Pendopo Energi Batubara - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Coalindo Energy - Indonesia
- Trasteel International SA, Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Generating Authority of Thailand
- South Luzon Thermal Energy Corporation
- Renaissance Capital - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining Corp, Philippines
- Banpu Public Company Limited - Thailand
- Globalindo Alam Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- India Bulls Power Limited - India
- Samtan Co., Ltd - South Korea
- Riau Bara Harum - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karbindo Abesyapradhi - Indoneisa
- Anglo American - United Kingdom
- GVK Power & Infra Limited - India
- Indian Oil Corporation Limited
- Georgia Ports Authority, United States
- Tamil Nadu electricity Board
- Siam City Cement PLC, Thailand
- VISA Power Limited - India
- Formosa Plastics Group - Taiwan
- Minerals Council of Australia
- Australian Commodity Traders Exchange
- Kaltim Prima Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Price Waterhouse Coopers - Russia
- GAC Shipping (India) Pvt Ltd
- Medco Energi Mining Internasional
- Thai Mozambique Logistica
- Xindia Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- MS Steel International - UAE
- New Zealand Coal & Carbon
- TNB Fuel Sdn Bhd - Malaysia
- Savvy Resources Ltd - HongKong
- McConnell Dowell - Australia
- IEA Clean Coal Centre - UK
- Lanco Infratech Ltd - India
- Ind-Barath Power Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Sree Jayajothi Cements Limited - India
- Malabar Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- PNOC Exploration Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Australian Coal Association
- Salva Resources Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Maheswari Brothers Coal Limited - India
- GN Power Mariveles Coal Plant, Philippines
- SMG Consultants - Indonesia
- Barasentosa Lestari - Indonesia
- CNBM International Corporation - China
- Kepco SPC Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Therma Luzon, Inc, Philippines
- GMR Energy Limited - India
- AsiaOL BioFuels Corp., Philippines
- Eastern Energy - Thailand
- White Energy Company Limited
- TeaM Sual Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Indika Energy - Indonesia
- The Treasury - Australian Government
- ASAPP Information Group - India
- Simpson Spence & Young - Indonesia
- Meralco Power Generation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Tata Chemicals Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parry Sugars Refinery, India
- Ministry of Mines - Canada
- Manunggal Multi Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Merrill Lynch Commodities Europe
- Gujarat Mineral Development Corp Ltd - India
- Essar Steel Hazira Ltd - India
- Bhushan Steel Limited - India
- Petron Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Sarangani Energy Corporation, Philippines
- Africa Commodities Group - South Africa
- Parliament of New Zealand
- Ministry of Finance - Indonesia
- Meenaskhi Energy Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- Commonwealth Bank - Australia
- Kartika Selabumi Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Baramulti Group, Indonesia
- Central Electricity Authority - India
- Bayan Resources Tbk. - Indonesia
- The State Trading Corporation of India Ltd
- Global Green Power PLC Corporation, Philippines
- Mercuria Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Intertek Mineral Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Wood Mackenzie - Singapore
- Sojitz Corporation - Japan
- Goldman Sachs - Singapore
- Latin American Coal - Colombia
- Rio Tinto Coal - Australia
- Indian Energy Exchange, India
- Timah Investasi Mineral - Indoneisa
- Bhatia International Limited - India
- Carbofer General Trading SA - India
- Attock Cement Pakistan Limited
- Cement Manufacturers Association - India
- Thiess Contractors Indonesia
- Siam City Cement - Thailand
- Makarim & Taira - Indonesia
- Energy Link Ltd, New Zealand
- Singapore Mercantile Exchange
- Romanian Commodities Exchange
- PTC India Limited - India
- Sical Logistics Limited - India
- Bulk Trading Sa - Switzerland
- Indo Tambangraya Megah - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Indogreen Group - Indonesia
- Indonesian Coal Mining Association
- Krishnapatnam Port Company Ltd. - India
- Dalmia Cement Bharat India
- Heidelberg Cement - Germany
- Asmin Koalindo Tuhup - Indonesia
- Coastal Gujarat Power Limited - India
- Videocon Industries ltd - India
- Posco Energy - South Korea
- Borneo Indobara - Indonesia
- Eastern Coal Council - USA
- Bangladesh Power Developement Board
- Larsen & Toubro Limited - India
- Leighton Contractors Pty Ltd - Australia
- Independent Power Producers Association of India
- Pipit Mutiara Jaya. PT, Indonesia
- Economic Council, Georgia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- Miang Besar Coal Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- Global Business Power Corporation, Philippines
- Vedanta Resources Plc - India
- Orica Australia Pty. Ltd.
- Mercator Lines Limited - India
- ICICI Bank Limited - India
- Uttam Galva Steels Limited - India
- Central Java Power - Indonesia
- Grasim Industreis Ltd - India
- Global Coal Blending Company Limited - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sakthi Sugars Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Kalimantan Lumbung Energi - Indonesia
- Ambuja Cements Ltd - India
- Agrawal Coal Company - India
- Wilmar Investment Holdings
- Vijayanagar Sugar Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Vizag Seaport Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Antam Resourcindo - Indonesia
- Kideco Jaya Agung - Indonesia
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