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Monday, 07 February 11
COAL PRICES ON RISE: DEMAND FROM INDIA AND CHINA - ANALYZED SUNIL K KUMBHAT
 INDONESIA IS HEART OF ASIAN COAL BOOM
COALspot.com - Rising demand of Coal from India and China, coupled with global financial recovery, is driving thermal coal prices that have appreciated in the recent past few months and it is expected that the global prices of Coal shall remain firm and go up further.
Power generation is what is driving the demand of Coal in India and China . In India new coal-fired power plants, ranging in the size from 50 MW to 4,000 MW, are being built throughout India. Power plants are symbol of how rapidly India's economy is expanding.
Similarly China, shall remain a net importer of thermal coal for coming few years as it's economy is growing at firm speed and is expected to deliver mind-boggling growth in 2011. China's coal imports more than doubled to 150 million tonnes from the previous year. Closure of smaller mines, coupled with increased demand from power sector, has triggered China's demand for imported coal.
India has also emerged as one of the major importer of coal. The imports are likely to be around 100-150 million tonnes for the current year as it adds new thermal capacities. India imports about three-fourths of its coal requirement from Indonesia, while South Africa and Australia accounts for the rest.
The quality of Indonesian coal is much better than Indian coal. The gross calorific value of Indonesian coal ranges between 5,000 and 6,500 kilo calories per kilogram (kcl/kg); while for Indian coal it is only 3,000-4,500 kcl/kg- with high ash contents. Bulk of the imported coal in India is used by power companies, which use it to blend with the local coal to improve calorific value. The coal prices also depend upon the ash content and the calorific value .Indonesia’s strategic geographic location makes it the most preferred country for Indian companies for its proximity to the country, which means lower ocean freight charges and better timing compared to other countries such as Australia.
Indonesia's coal Industry has transformed itself from being an minor player in Asia's Coal market to the world's largest Exporter of Steam Coal .Indonesia has come from nowhere to challenge Australia as the world’s largest exporter of thermal coal and is expected soon to topple Australia as the largest coal exporter.
The higher energy demand in India would drive up import of coal .The overall energy generated in India could double within a decade.
Indian power sector will be heavily depend on coal for decades to come. At the same time, India's steel industry, also dependent on coal, is expected to treble its output within a decade.
But there is growing concern about where all the coal is going to come from. India has significant coal reserves suitable for power generation and boasts the world's biggest coal company - the government-owned Coal India Limited. But the expansion of the Indian economy has been so rapid, demand is outstripping domestic supply.
The government wants the economy to expand at 9-10 per cent a year to help lift millions of poor families out of poverty. But an energy supply crunch could compromise that growth target.
India has theoretically significant reserves but it will take a long time to get into actual production, There is a urgent need to re-examine the regulations and policies associated with exploration, exploitation and production. India is still not fully encouraging commercial coal mining by the private sector.
India's coal reserves are concentrated in the eastern states of Orissa, Jharkhand, Chhattisgarh, West Bengal and Madhya Pradesh, where basic logistics infrastructure (such as ports and railways) is lacking. Various government regulation concerning forestry and environmental restrictions are also hindering mine development. Unless such bottlenecks are addressed, growth in domestic coal production could be difficult.'
Due to government regulatory delays, infrastructure bottlenecks and security risks are encouraging Indian firms to look overseas to secure coal supply especially in Indonesia, South Africa, Mozambique, Australia etc. for their ambitious power projects in India.
Indonesia's thermal coal mines have a comparative advantage over Australia's because they are nearer to India but Australia's reputation as a reliable supplier is attractive to Indian buyers.’ Australian mines might be more expensive but they are reliable. Australia’s advantages are that the coal is good and the infrastructure is good'
In spit of all , Australia will face stiff competition from Indonesia - which has lower transport costs. A significant proportion of coal transport in Indonesia is water based, which allows for coal to be transported along rivers via barges to the open sea for loading onto larger vessels. Indonesia’s coal suppliers rely heavily on floating transhipment facilities due to economic reasons.
Indonesia's coal Industry has transformed itself from being an minor player in Asia's Coal market to the world's largest Exporter of Steam Coal .Indonesia has come from nowhere to challenge Australia as the world’s largest exporter of thermal coal and is expected soon to topple Australia as the largest coal exporter.
Indonesia’s government needs to accelerate reforms for foreign direct investment (FDI) in mining and energy sector to give direct control to foreign investors, in order to win confidence and attract/invite major international companies into Indonesia. There is need of more coordination between Ministry of Energy and Mineral Resources Deptt , Indonesian Investment Co-ordination Board (BKPM) ,and Various Regional administrations.
The phenomenal growth in Indonesia’s coal exports in last five years reflects the ability of its coal industry to respond to the rapid growth in Asian demand for thermal coal.
Indonesia has huge coal reserves and exporting coal to many countries for use in power plants for generating energy but it is paradoxical that Indonesia is short of energy. Many Indian companies (Tata , Reliance,Jindal ,L&T, Monnet, Adani ,Essar etc) are capable of sharing power technology and setting up mega power plants in Indonesia
Indonesian private companies can buy equity stakes in Indian power plants in exchange / barter for long-term coal supply. Since India is today one of the fastest growing economies and also has a shortage of power supply then such deals can be beneficial to both parties .Indonesian government or Indonesian companies can invite Coal barter bids (CBB) ,where from foreign companies for development of ports , Roads , Railway lines , Power Plants etc. In Coal barter bids , coal will be supplied to party who will set up Power plants or develop infrastructure etc. Coal mining in Indonesia can be an extremely lucrative sector for overall economic growth. Indonesian government should make single window clearance system to operate business in Indonesia to encourage foreign enterprises and Investment for Coal barter bids. Indonesian Coal companies are fully aware that India is a market into which they can export or thru barter transactions, its major share of Coal Production.
Today Indonesia has stable economic outlook and if reform efforts towards basic infrastructures continues it may become Economic Tiger of Asia by 2020.
Today Indonesia is the heart of the Asian Coal boom.
Analyst - Sunil K Kumbhat , Jodhpur (Rajasthan), India
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Thursday, 17 February 11
UNCERTAINTY AND VOLATILITY - FEARNBULK
Handy
Recovering market as evidenced by the solid USD 16k/day achieved by a handymax from Continent to east Med with scrap. More short period requ ...
Tuesday, 15 February 11
INDONESIAN COAL FOR HARYANA THERMAL PLANTS - PUNJAB NEWS LINE
To tide over the recurring coal shortage at thermal plants Haryana Power Generation Corporation Limited (HPGCL) has gone for Malaysian coal for its ...
Tuesday, 15 February 11
TONNAGE OVERSUPPLY TO CHOKE FREIGHT RATES IN THE COMING MONTHS SAYS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In a new report assessing the dry bulk market, BIMCO’s analysis suggests that freight rates for Capesize vessels are likely to remain depresse ...
Sunday, 13 February 11
COAL MARKETS 2011 TO HIGHLIGHT INDONESIAN COAL AND NEW SOURCES OF COAL SUPPLY
“Over 300 senior decision-makers from coal mining, power and trading companies expected to congregate in Singapore”
Press Release - K ...
Sunday, 13 February 11
YEAR OF RABBIT PUSHING FREIGHT MARKET UP
COALspot.com – “The market finally moved up with firmness in all sectors with some positive signs of markets recovering”, said Cap ...
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- Coastal Gujarat Power Limited - India
- Meenaskhi Energy Private Limited - India
- Bukit Makmur.PT - Indonesia
- Ministry of Finance - Indonesia
- European Bulk Services B.V. - Netherlands
- Ceylon Electricity Board - Sri Lanka
- Jaiprakash Power Ventures ltd
- CIMB Investment Bank - Malaysia
- Xindia Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Wood Mackenzie - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Star Paper Mills Limited - India
- Salva Resources Pvt Ltd - India
- Malabar Cements Ltd - India
- Indian Energy Exchange, India
- GN Power Mariveles Coal Plant, Philippines
- Port Waratah Coal Services - Australia
- Gujarat Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- London Commodity Brokers - England
- The Treasury - Australian Government
- Vijayanagar Sugar Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Siam City Cement PLC, Thailand
- Economic Council, Georgia
- Orica Australia Pty. Ltd.
- Tamil Nadu electricity Board
- Altura Mining Limited, Indonesia
- Edison Trading Spa - Italy
- The University of Queensland
- Agrawal Coal Company - India
- PNOC Exploration Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- ASAPP Information Group - India
- Kohat Cement Company Ltd. - Pakistan
- Bhoruka Overseas - Indonesia
- Commonwealth Bank - Australia
- Holcim Trading Pte Ltd - Singapore
- Simpson Spence & Young - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tata Chemicals Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Indonesian Coal Mining Association
- Carbofer General Trading SA - India
- Semirara Mining Corp, Philippines
- Formosa Plastics Group - Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Eastern Energy - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petrochimia International Co. Ltd.- Taiwan
- Vedanta Resources Plc - India
- Samtan Co., Ltd - South Korea
- Manunggal Multi Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Mjunction Services Limited - India
- Georgia Ports Authority, United States
- Mintek Dendrill Indonesia
- Straits Asia Resources Limited - Singapore
- Chamber of Mines of South Africa
- Anglo American - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- Renaissance Capital - South Africa
- SMC Global Power, Philippines
- Electricity Generating Authority of Thailand
- Standard Chartered Bank - UAE
- Pendopo Energi Batubara - Indonesia
- Gujarat Sidhee Cement - India
- Electricity Authority, New Zealand
- IHS Mccloskey Coal Group - USA
- Maharashtra Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- VISA Power Limited - India
- Aboitiz Power Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Mercator Lines Limited - India
- Cigading International Bulk Terminal - Indonesia
- Medco Energi Mining Internasional
- Thiess Contractors Indonesia
- Heidelberg Cement - Germany
- Indogreen Group - Indonesia
- Globalindo Alam Lestari - Indonesia
- Africa Commodities Group - South Africa
- Kalimantan Lumbung Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Sical Logistics Limited - India
- Kapuas Tunggal Persada - Indonesia
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- Deloitte Consulting - India
- Dalmia Cement Bharat India
- Trasteel International SA, Italy
- Planning Commission, India
- GMR Energy Limited - India
- SN Aboitiz Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Rio Tinto Coal - Australia
- Semirara Mining and Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Oldendorff Carriers - Singapore
- San Jose City I Power Corp, Philippines
- Latin American Coal - Colombia
- Larsen & Toubro Limited - India
- Thai Mozambique Logistica
- Neyveli Lignite Corporation Ltd, - India
- TeaM Sual Corporation - Philippines
- Marubeni Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- IEA Clean Coal Centre - UK
- Ministry of Transport, Egypt
- Ambuja Cements Ltd - India
- Bharathi Cement Corporation - India
- Energy Link Ltd, New Zealand
- Cement Manufacturers Association - India
- Minerals Council of Australia
- Iligan Light & Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Banpu Public Company Limited - Thailand
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- Essar Steel Hazira Ltd - India
- Global Green Power PLC Corporation, Philippines
- Coal and Oil Company - UAE
- Kobexindo Tractors - Indoneisa
- Energy Development Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Metalloyd Limited - United Kingdom
- Aditya Birla Group - India
- PTC India Limited - India
- Siam City Cement - Thailand
- Kartika Selabumi Mining - Indonesia
- Indika Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Borneo Indobara - Indonesia
- Wilmar Investment Holdings
- Meralco Power Generation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Grasim Industreis Ltd - India
- Bulk Trading Sa - Switzerland
- Power Finance Corporation Ltd., India
- Kumho Petrochemical, South Korea
- GVK Power & Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Krishnapatnam Port Company Ltd. - India
- SMG Consultants - Indonesia
- Merrill Lynch Commodities Europe
- Eastern Coal Council - USA
- Intertek Mineral Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Kideco Jaya Agung - Indonesia
- McConnell Dowell - Australia
- Ministry of Mines - Canada
- Orica Mining Services - Indonesia
- Therma Luzon, Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- MS Steel International - UAE
- Central Electricity Authority - India
- Romanian Commodities Exchange
- International Coal Ventures Pvt Ltd - India
- Sakthi Sugars Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercuria Energy - Indonesia
- Bangladesh Power Developement Board
- Sarangani Energy Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Leighton Contractors Pty Ltd - Australia
- ICICI Bank Limited - India
- Attock Cement Pakistan Limited
- Lanco Infratech Ltd - India
- Independent Power Producers Association of India
- PowerSource Philippines DevCo
- Jorong Barutama Greston.PT - Indonesia
- Makarim & Taira - Indonesia
- Australian Coal Association
- Posco Energy - South Korea
- India Bulls Power Limited - India
- Directorate Of Revenue Intelligence - India
- Baramulti Group, Indonesia
- Sree Jayajothi Cements Limited - India
- Coalindo Energy - Indonesia
- Sojitz Corporation - Japan
- New Zealand Coal & Carbon
- Singapore Mercantile Exchange
- Riau Bara Harum - Indonesia
- Goldman Sachs - Singapore
- Indo Tambangraya Megah - Indonesia
- AsiaOL BioFuels Corp., Philippines
- CNBM International Corporation - China
- Petron Corporation, Philippines
- Parry Sugars Refinery, India
- Binh Thuan Hamico - Vietnam
- Kaltim Prima Coal - Indonesia
- Interocean Group of Companies - India
- Madhucon Powers Ltd - India
- Bhushan Steel Limited - India
- Parliament of New Zealand
- Uttam Galva Steels Limited - India
- Bhatia International Limited - India
- Indian Oil Corporation Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Toyota Tsusho Corporation, Japan
- White Energy Company Limited
- Ind-Barath Power Infra Limited - India
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