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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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Friday, 01 December 23
COAL MINERS GROUP EXPECTS INDONESIA’S 2023 COAL OUTPUT TO SURPASS TARGET - REUTERS
The Indonesian Coal Mining Association (ICMA) expects the country’s 2023 coal output to surpass the official target of 695 million metric ton ...
Friday, 24 November 23
COAL IMPORTS TO INDIA IN OCTOBER 2023 REACHED HIGHEST LEVELS IN NEARLY A YEAR AND A HALF - VESSELSVALUE, VESON NAUTICAL
In October, coal imports to India reached 13.8 mt in October 2023, according to Oceanbolt, a Veson Nautical solution, the highest level since May 2 ...
Friday, 24 November 23
COAL SHIPMENTS TO ADVANCED ECONOMIES DOWN 17% SO FAR IN 2023 - BIMCO
In the first ten months of 2023, coal shipments to advanced economies fell by 17% y/y, as demand for electricity declined and the share of electric ...
Friday, 24 November 23
INTELLIGENT COAL MINES CONTRIBUTE TO IMPROVING SAFETY STANDARDS - CHINA DAILY
Mechanization, automation and intelligent upgrades have contributed to improved safety in coal mines, though the level of development of intelligen ...
Friday, 24 November 23
WHY AUSTRALIA'S COAL MINES ARE GETTING BIGGER - IEEFA
Australia’s largest coal mines are getting larger. Mines in New South Wales (NSW) are ramping up production following the state’s recov ...
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- Goldman Sachs - Singapore
- Miang Besar Coal Terminal - Indonesia
- Cement Manufacturers Association - India
- Ceylon Electricity Board - Sri Lanka
- CIMB Investment Bank - Malaysia
- Baramulti Group, Indonesia
- PTC India Limited - India
- Economic Council, Georgia
- Karaikal Port Pvt Ltd - India
- Romanian Commodities Exchange
- Semirara Mining and Power Corporation, Philippines
- Edison Trading Spa - Italy
- Maheswari Brothers Coal Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Australian Coal Association
- Asmin Koalindo Tuhup - Indonesia
- Manunggal Multi Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Altura Mining Limited, Indonesia
- Videocon Industries ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Indo Tambangraya Megah - Indonesia
- Indika Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Rashtriya Ispat Nigam Limited - India
- Eastern Energy - Thailand
- Coal and Oil Company - UAE
- Uttam Galva Steels Limited - India
- South Luzon Thermal Energy Corporation
- Energy Link Ltd, New Zealand
- Chamber of Mines of South Africa
- Latin American Coal - Colombia
- Lanco Infratech Ltd - India
- Standard Chartered Bank - UAE
- Global Green Power PLC Corporation, Philippines
- Siam City Cement PLC, Thailand
- Wood Mackenzie - Singapore
- Orica Mining Services - Indonesia
- IEA Clean Coal Centre - UK
- Bukit Asam (Persero) Tbk - Indonesia
- SMC Global Power, Philippines
- Interocean Group of Companies - India
- Global Business Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- The University of Queensland
- Bulk Trading Sa - Switzerland
- Cigading International Bulk Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Vizag Seaport Private Limited - India
- Sarangani Energy Corporation, Philippines
- Mintek Dendrill Indonesia
- Aditya Birla Group - India
- International Coal Ventures Pvt Ltd - India
- Malabar Cements Ltd - India
- Bharathi Cement Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Oil Corporation Limited
- Minerals Council of Australia
- Vedanta Resources Plc - India
- Toyota Tsusho Corporation, Japan
- San Jose City I Power Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Tata Chemicals Ltd - India
- PNOC Exploration Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Thiess Contractors Indonesia
- Attock Cement Pakistan Limited
- Meralco Power Generation, Philippines
- Coalindo Energy - Indonesia
- Sical Logistics Limited - India
- Carbofer General Trading SA - India
- GMR Energy Limited - India
- Thai Mozambique Logistica
- Gujarat Sidhee Cement - India
- Power Finance Corporation Ltd., India
- Kalimantan Lumbung Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Petron Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Jindal Steel & Power Ltd - India
- Bhushan Steel Limited - India
- ICICI Bank Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercuria Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Commonwealth Bank - Australia
- Jorong Barutama Greston.PT - Indonesia
- ASAPP Information Group - India
- Electricity Generating Authority of Thailand
- Kapuas Tunggal Persada - Indonesia
- Mjunction Services Limited - India
- MS Steel International - UAE
- Rio Tinto Coal - Australia
- White Energy Company Limited
- Ambuja Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Barasentosa Lestari - Indonesia
- Australian Commodity Traders Exchange
- Georgia Ports Authority, United States
- Pendopo Energi Batubara - Indonesia
- Makarim & Taira - Indonesia
- PowerSource Philippines DevCo
- Bukit Makmur.PT - Indonesia
- VISA Power Limited - India
- Central Java Power - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Coal Council - USA
- Tamil Nadu electricity Board
- Metalloyd Limited - United Kingdom
- Straits Asia Resources Limited - Singapore
- Kartika Selabumi Mining - Indonesia
- Indian Energy Exchange, India
- TeaM Sual Corporation - Philippines
- Larsen & Toubro Limited - India
- Essar Steel Hazira Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Anglo American - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- Port Waratah Coal Services - Australia
- IHS Mccloskey Coal Group - USA
- GVK Power & Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- Energy Development Corp, Philippines
- Borneo Indobara - Indonesia
- Planning Commission, India
- Jaiprakash Power Ventures ltd
- Kohat Cement Company Ltd. - Pakistan
- AsiaOL BioFuels Corp., Philippines
- Xindia Steels Limited - India
- Simpson Spence & Young - Indonesia
- Parry Sugars Refinery, India
- SN Aboitiz Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Oldendorff Carriers - Singapore
- Central Electricity Authority - India
- Global Coal Blending Company Limited - Australia
- Star Paper Mills Limited - India
- Bhoruka Overseas - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CNBM International Corporation - China
- Sree Jayajothi Cements Limited - India
- Alfred C Toepfer International GmbH - Germany
- TNB Fuel Sdn Bhd - Malaysia
- Merrill Lynch Commodities Europe
- Independent Power Producers Association of India
- Deloitte Consulting - India
- Riau Bara Harum - Indonesia
- Samtan Co., Ltd - South Korea
- Dalmia Cement Bharat India
- Aboitiz Power Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kepco SPC Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Singapore Mercantile Exchange
- Ind-Barath Power Infra Limited - India
- Iligan Light & Power Inc, Philippines
- Heidelberg Cement - Germany
- Maharashtra Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Kaltim Prima Coal - Indonesia
- Bangladesh Power Developement Board
- Africa Commodities Group - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Agrawal Coal Company - India
- Siam City Cement - Thailand
- Price Waterhouse Coopers - Russia
- Marubeni Corporation - India
- Sindya Power Generating Company Private Ltd
- India Bulls Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Indogreen Group - Indonesia
- Binh Thuan Hamico - Vietnam
- Grasim Industreis Ltd - India
- Indonesian Coal Mining Association
- Chettinad Cement Corporation Ltd - India
- Wilmar Investment Holdings
- Directorate General of MIneral and Coal - Indonesia
- The State Trading Corporation of India Ltd
- The Treasury - Australian Government
- Sojitz Corporation - Japan
- Bayan Resources Tbk. - Indonesia
- Mercator Lines Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- McConnell Dowell - Australia
- European Bulk Services B.V. - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Kobexindo Tractors - Indoneisa
- Parliament of New Zealand
- Ministry of Mines - Canada
- Ministry of Transport, Egypt
- Medco Energi Mining Internasional
- London Commodity Brokers - England
- Semirara Mining Corp, Philippines
- Antam Resourcindo - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bhatia International Limited - India
- Ministry of Finance - Indonesia
- SMG Consultants - Indonesia
- Intertek Mineral Services - Indonesia
- Savvy Resources Ltd - HongKong
- Billiton Holdings Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Renaissance Capital - South Africa
- Salva Resources Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Electricity Authority, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Posco Energy - South Korea
- Sakthi Sugars Limited - India
- New Zealand Coal & Carbon
- Trasteel International SA, Italy
- Madhucon Powers Ltd - India
- Bukit Baiduri Energy - Indonesia
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