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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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Sunday, 10 September 23
CHINA AUGUST COAL IMPORTS OF 44.3 MLN T HIT RECORD - REUTERS
China, the world’s top coal consumer, imported 44.3 million metric tons of the fuel last month, customs data showed, the highest amount in an ...
Tuesday, 22 August 23
CHINA'S COAL PRODUCTION LOGS STEADY GROWTH IN JANUARY-JULY: XINHUA
China’s output of raw coal went up 3.6 percent year on year in the first seven months of this year, official data showed.
The ...
Sunday, 13 August 23
THE COMMODITIES FEED: LNG SUPPLY RISKS LINGER - ING
Energy – OPEC sees deficit over remainder of 2023
Oil prices came under some pressure yesterday with ICE Brent settling a litt ...
Wednesday, 09 August 23
COAL TRADE TO RETURN TO 2019 LEVELS - BALTIC EXCHANGE
The International Energy Agency’s mid-year Coal Market Update for 2023 brings both positive and concerning news for the global coal industry. ...
Sunday, 23 July 23
ANALYSIS-INDIA'S COAL MINING BET STUMBLES AS WARY BANKS WEIGH RISING RISKS - REUTERS
India’s drive to ramp up coal output to meet growing energy demand is faltering due to banks’ reluctance to finance newly auctioned min ...
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- PowerSource Philippines DevCo
- PTC India Limited - India
- Borneo Indobara - Indonesia
- Sojitz Corporation - Japan
- Cement Manufacturers Association - India
- MS Steel International - UAE
- Africa Commodities Group - South Africa
- Energy Development Corp, Philippines
- TeaM Sual Corporation - Philippines
- Indika Energy - Indonesia
- Agrawal Coal Company - India
- Commonwealth Bank - Australia
- Toyota Tsusho Corporation, Japan
- Petrochimia International Co. Ltd.- Taiwan
- The University of Queensland
- Kepco SPC Power Corporation, Philippines
- Dalmia Cement Bharat India
- Simpson Spence & Young - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- TNB Fuel Sdn Bhd - Malaysia
- Altura Mining Limited, Indonesia
- London Commodity Brokers - England
- SN Aboitiz Power Inc, Philippines
- Deloitte Consulting - India
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- Jindal Steel & Power Ltd - India
- International Coal Ventures Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Salva Resources Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- CIMB Investment Bank - Malaysia
- Karaikal Port Pvt Ltd - India
- Australian Coal Association
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- Independent Power Producers Association of India
- Manunggal Multi Energi - Indonesia
- Ambuja Cements Ltd - India
- Meralco Power Generation, Philippines
- Power Finance Corporation Ltd., India
- Global Green Power PLC Corporation, Philippines
- Sical Logistics Limited - India
- Ministry of Finance - Indonesia
- Timah Investasi Mineral - Indoneisa
- India Bulls Power Limited - India
- White Energy Company Limited
- Bukit Makmur.PT - Indonesia
- The State Trading Corporation of India Ltd
- Latin American Coal - Colombia
- Coastal Gujarat Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Indian Oil Corporation Limited
- Riau Bara Harum - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Indonesian Coal Mining Association
- Barasentosa Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sakthi Sugars Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Tamil Nadu electricity Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- LBH Netherlands Bv - Netherlands
- Grasim Industreis Ltd - India
- Mercuria Energy - Indonesia
- Singapore Mercantile Exchange
- Heidelberg Cement - Germany
- Ministry of Transport, Egypt
- Pipit Mutiara Jaya. PT, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Binh Thuan Hamico - Vietnam
- Alfred C Toepfer International GmbH - Germany
- ASAPP Information Group - India
- Larsen & Toubro Limited - India
- Bhushan Steel Limited - India
- Kobexindo Tractors - Indoneisa
- Aditya Birla Group - India
- GAC Shipping (India) Pvt Ltd
- Orica Australia Pty. Ltd.
- Pendopo Energi Batubara - Indonesia
- Gujarat Sidhee Cement - India
- Minerals Council of Australia
- Kalimantan Lumbung Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Leighton Contractors Pty Ltd - Australia
- Australian Commodity Traders Exchange
- Uttam Galva Steels Limited - India
- McConnell Dowell - Australia
- Bhoruka Overseas - Indonesia
- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- VISA Power Limited - India
- Interocean Group of Companies - India
- Romanian Commodities Exchange
- Central Electricity Authority - India
- Global Business Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Sree Jayajothi Cements Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Jorong Barutama Greston.PT - Indonesia
- Indogreen Group - Indonesia
- Bharathi Cement Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Port Waratah Coal Services - Australia
- Ceylon Electricity Board - Sri Lanka
- Star Paper Mills Limited - India
- Savvy Resources Ltd - HongKong
- Karbindo Abesyapradhi - Indoneisa
- Bangladesh Power Developement Board
- Standard Chartered Bank - UAE
- Baramulti Group, Indonesia
- Ministry of Mines - Canada
- Bahari Cakrawala Sebuku - Indonesia
- Bhatia International Limited - India
- Maheswari Brothers Coal Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- GMR Energy Limited - India
- Edison Trading Spa - Italy
- Indo Tambangraya Megah - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Banpu Public Company Limited - Thailand
- Kaltim Prima Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Parry Sugars Refinery, India
- Eastern Coal Council - USA
- Metalloyd Limited - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Gujarat Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Parliament of New Zealand
- Orica Mining Services - Indonesia
- IEA Clean Coal Centre - UK
- Wilmar Investment Holdings
- Electricity Generating Authority of Thailand
- ICICI Bank Limited - India
- Directorate Of Revenue Intelligence - India
- Sindya Power Generating Company Private Ltd
- Aboitiz Power Corporation - Philippines
- Energy Link Ltd, New Zealand
- Cigading International Bulk Terminal - Indonesia
- Makarim & Taira - Indonesia
- Posco Energy - South Korea
- European Bulk Services B.V. - Netherlands
- Price Waterhouse Coopers - Russia
- Economic Council, Georgia
- Malabar Cements Ltd - India
- CNBM International Corporation - China
- Sarangani Energy Corporation, Philippines
- SMC Global Power, Philippines
- Billiton Holdings Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Mercator Lines Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Tata Chemicals Ltd - India
- Mintek Dendrill Indonesia
- The Treasury - Australian Government
- Goldman Sachs - Singapore
- Wood Mackenzie - Singapore
- Videocon Industries ltd - India
- Intertek Mineral Services - Indonesia
- Oldendorff Carriers - Singapore
- Globalindo Alam Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- Vedanta Resources Plc - India
- South Luzon Thermal Energy Corporation
- Rio Tinto Coal - Australia
- Madhucon Powers Ltd - India
- Thai Mozambique Logistica
- Formosa Plastics Group - Taiwan
- Georgia Ports Authority, United States
- Kideco Jaya Agung - Indonesia
- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Attock Cement Pakistan Limited
- Renaissance Capital - South Africa
- Vizag Seaport Private Limited - India
- Samtan Co., Ltd - South Korea
- Iligan Light & Power Inc, Philippines
- Mjunction Services Limited - India
- SMG Consultants - Indonesia
- Kumho Petrochemical, South Korea
- Bukit Baiduri Energy - Indonesia
- San Jose City I Power Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Energy - Thailand
- Xindia Steels Limited - India
- Planning Commission, India
- Therma Luzon, Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Trasteel International SA, Italy
- Petron Corporation, Philippines
- Chamber of Mines of South Africa
- Straits Asia Resources Limited - Singapore
- Semirara Mining Corp, Philippines
- Electricity Authority, New Zealand
- Coalindo Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Indian Energy Exchange, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coal and Oil Company - UAE
- Siam City Cement - Thailand
- Kartika Selabumi Mining - Indonesia
- Central Java Power - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Thiess Contractors Indonesia
- Carbofer General Trading SA - India
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