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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, 25 January 24
THE RED SEA ESCALATION IMPLICATIONS ON GLOBAL SEABORNE TRADE - MARIA BERTZELETOU
In recent days, discussions have intensified about the potential impact on the seaborne trade and ton-miles due to the evolving dynamics of market ...
Thursday, 25 January 24
RED SEA SHIPPING DISRUPTIONS KEEP GEOPOLITICAL PREMIUM FOR COMMODITIES - FITCH RATINGS
Shipping disruptions and re-routing away from the Red Sea will maintain the geopolitical premium in the main commodity markets, including for oil a ...
Friday, 19 January 24
INDONESIA TARGETS 710 MLN METRIC TONS COAL OUTPUT IN 2024 AFTER RECORD 2023 - REUTERS
Indonesia, a major thermal coal exporter, aims to produce 710 million metric tons of coal in 2024, its mining minister said on Monday, after postin ...
Friday, 19 January 24
DRUMMOND COLOMBIA COAL OUTPUT ROSE 7.1% IN 2023 - REUTERS
Coal production from miner Drummond’s Colombia operations rose 7.1% in 2023 to 29.5 million metric tons, while exports declined by 2.6% to 27 ...
Friday, 19 January 24
CHINA'S 2023 COAL OUTPUT HITS RECORD HIGH - REUTERS
China’s coal output reached a record high in 2023, data from the statistics bureau showed on Wednesday, amid an ongoing focus on energy secur ...
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- Larsen & Toubro Limited - India
- Gujarat Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- PTC India Limited - India
- Ministry of Transport, Egypt
- Altura Mining Limited, Indonesia
- TeaM Sual Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- Attock Cement Pakistan Limited
- GN Power Mariveles Coal Plant, Philippines
- ICICI Bank Limited - India
- Siam City Cement - Thailand
- Electricity Generating Authority of Thailand
- GMR Energy Limited - India
- Bayan Resources Tbk. - Indonesia
- Renaissance Capital - South Africa
- Dalmia Cement Bharat India
- Kalimantan Lumbung Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Vedanta Resources Plc - India
- White Energy Company Limited
- Global Business Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Rio Tinto Coal - Australia
- Karbindo Abesyapradhi - Indoneisa
- Central Java Power - Indonesia
- Edison Trading Spa - Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jindal Steel & Power Ltd - India
- Petron Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Gujarat Sidhee Cement - India
- Australian Commodity Traders Exchange
- Lanco Infratech Ltd - India
- Simpson Spence & Young - Indonesia
- Vizag Seaport Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Indogreen Group - Indonesia
- Eastern Coal Council - USA
- SMC Global Power, Philippines
- Power Finance Corporation Ltd., India
- Metalloyd Limited - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- GVK Power & Infra Limited - India
- Xindia Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- MS Steel International - UAE
- Tata Chemicals Ltd - India
- Ministry of Mines - Canada
- Maheswari Brothers Coal Limited - India
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- CNBM International Corporation - China
- Sinarmas Energy and Mining - Indonesia
- Ministry of Finance - Indonesia
- PowerSource Philippines DevCo
- Semirara Mining Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Price Waterhouse Coopers - Russia
- Coastal Gujarat Power Limited - India
- Standard Chartered Bank - UAE
- Malabar Cements Ltd - India
- Cement Manufacturers Association - India
- Kepco SPC Power Corporation, Philippines
- Star Paper Mills Limited - India
- Eastern Energy - Thailand
- Bharathi Cement Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Medco Energi Mining Internasional
- Chettinad Cement Corporation Ltd - India
- Pendopo Energi Batubara - Indonesia
- Coalindo Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Bangladesh Power Developement Board
- Petrochimia International Co. Ltd.- Taiwan
- Kideco Jaya Agung - Indonesia
- Bhatia International Limited - India
- Barasentosa Lestari - Indonesia
- Commonwealth Bank - Australia
- GAC Shipping (India) Pvt Ltd
- Sarangani Energy Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- Ambuja Cements Ltd - India
- Thai Mozambique Logistica
- Merrill Lynch Commodities Europe
- Globalindo Alam Lestari - Indonesia
- Chamber of Mines of South Africa
- SMG Consultants - Indonesia
- Parry Sugars Refinery, India
- Energy Link Ltd, New Zealand
- Indian Oil Corporation Limited
- Wood Mackenzie - Singapore
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Sical Logistics Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Port Waratah Coal Services - Australia
- Orica Australia Pty. Ltd.
- Essar Steel Hazira Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Krishnapatnam Port Company Ltd. - India
- Grasim Industreis Ltd - India
- Marubeni Corporation - India
- LBH Netherlands Bv - Netherlands
- Mjunction Services Limited - India
- Wilmar Investment Holdings
- Maharashtra Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- Gujarat Mineral Development Corp Ltd - India
- Manunggal Multi Energi - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- San Jose City I Power Corp, Philippines
- India Bulls Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Sindya Power Generating Company Private Ltd
- Heidelberg Cement - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Mintek Dendrill Indonesia
- VISA Power Limited - India
- Kobexindo Tractors - Indoneisa
- Makarim & Taira - Indonesia
- Deloitte Consulting - India
- Bahari Cakrawala Sebuku - Indonesia
- Aditya Birla Group - India
- IEA Clean Coal Centre - UK
- New Zealand Coal & Carbon
- London Commodity Brokers - England
- ASAPP Information Group - India
- Thiess Contractors Indonesia
- Leighton Contractors Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- The Treasury - Australian Government
- Banpu Public Company Limited - Thailand
- Riau Bara Harum - Indonesia
- Mercuria Energy - Indonesia
- Minerals Council of Australia
- Kapuas Tunggal Persada - Indonesia
- Salva Resources Pvt Ltd - India
- Orica Mining Services - Indonesia
- Ind-Barath Power Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- Goldman Sachs - Singapore
- Bukit Baiduri Energy - Indonesia
- Economic Council, Georgia
- Bhushan Steel Limited - India
- Georgia Ports Authority, United States
- Iligan Light & Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Agrawal Coal Company - India
- Africa Commodities Group - South Africa
- Samtan Co., Ltd - South Korea
- Meenaskhi Energy Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Sojitz Corporation - Japan
- The University of Queensland
- Energy Development Corp, Philippines
- Savvy Resources Ltd - HongKong
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- Antam Resourcindo - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Electricity Authority - India
- Meralco Power Generation, Philippines
- Straits Asia Resources Limited - Singapore
- Jaiprakash Power Ventures ltd
- SN Aboitiz Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- European Bulk Services B.V. - Netherlands
- Oldendorff Carriers - Singapore
- Uttam Galva Steels Limited - India
- Borneo Indobara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- McConnell Dowell - Australia
- Indian Energy Exchange, India
- Interocean Group of Companies - India
- Singapore Mercantile Exchange
- Trasteel International SA, Italy
- Madhucon Powers Ltd - India
- Australian Coal Association
- Latin American Coal - Colombia
- Posco Energy - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Carbofer General Trading SA - India
- Romanian Commodities Exchange
- PetroVietnam Power Coal Import and Supply Company
- Pipit Mutiara Jaya. PT, Indonesia
- Anglo American - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- Siam City Cement PLC, Thailand
- Indonesian Coal Mining Association
- Aboitiz Power Corporation - Philippines
- Electricity Authority, New Zealand
- Global Green Power PLC Corporation, Philippines
- Indika Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercator Lines Limited - India
- Sree Jayajothi Cements Limited - India
- Independent Power Producers Association of India
- Sakthi Sugars Limited - India
- Bukit Makmur.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Videocon Industries ltd - India
- Planning Commission, India
- OPG Power Generation Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Intertek Mineral Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
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