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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, 26 February 23
MAWANI AND JEDDAH CHAMBER SIGN AN AGREEMENT TO BUILD INTEGRATED LOGISTICS PARK
Press Release: The Saudi Ports Authority (Mawani) and Jeddah Chamber of Commerce and Industry have today inked an agreement to set up an integrated ...
Saturday, 25 February 23
INDONESIA IS STILL BY FAR THE TOP SUPPLIER OF COAL TO CHINA - BANCHERO COSTA
After a slow start in the first quarter, global coal trade has really picked up pace last year, and is now fully back to pre-Covid levels, said ban ...
Wednesday, 22 February 23
MARKET INSIGHT - INTERMODAL
The short-term outlook of the global soybean market is currently pivoted by a combination of weather patterns that are affecting the harvest progre ...
Saturday, 18 February 23
OIL UNLIKELY TO BREAK ABOVE $100/BBL THIS YEAR, J.P.MORGAN SAYS –- REUTERS
Brent oil prices are unlikely to breach the $100 a barrel level this year, barring any significant geopolitical drivers, with OPEC+ potentially add ...
Saturday, 18 February 23
CHINA'S COAL PRICES FALL TO 1 YR-LOW, CLOUDING DEMAND AND IMPORT OUTLOOK - REUTERS
China’s thermal coal prices hit their lowest levels in a year this week on rising inventories as domestic mine production is recovering faste ...
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- Maharashtra Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- ASAPP Information Group - India
- Bulk Trading Sa - Switzerland
- Videocon Industries ltd - India
- South Luzon Thermal Energy Corporation
- Singapore Mercantile Exchange
- Latin American Coal - Colombia
- Pendopo Energi Batubara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Sindya Power Generating Company Private Ltd
- Krishnapatnam Port Company Ltd. - India
- Iligan Light & Power Inc, Philippines
- Vizag Seaport Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Bhushan Steel Limited - India
- Gujarat Sidhee Cement - India
- Malabar Cements Ltd - India
- Economic Council, Georgia
- Petrochimia International Co. Ltd.- Taiwan
- Wilmar Investment Holdings
- Orica Mining Services - Indonesia
- IEA Clean Coal Centre - UK
- Kobexindo Tractors - Indoneisa
- GMR Energy Limited - India
- Sakthi Sugars Limited - India
- San Jose City I Power Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- MS Steel International - UAE
- Jorong Barutama Greston.PT - Indonesia
- Sojitz Corporation - Japan
- Simpson Spence & Young - Indonesia
- Renaissance Capital - South Africa
- Agrawal Coal Company - India
- Manunggal Multi Energi - Indonesia
- Uttam Galva Steels Limited - India
- Coal and Oil Company - UAE
- Power Finance Corporation Ltd., India
- Cigading International Bulk Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Australian Commodity Traders Exchange
- Attock Cement Pakistan Limited
- Chettinad Cement Corporation Ltd - India
- GAC Shipping (India) Pvt Ltd
- Sinarmas Energy and Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- McConnell Dowell - Australia
- Dalmia Cement Bharat India
- Bhoruka Overseas - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Central Electricity Authority - India
- PTC India Limited - India
- Straits Asia Resources Limited - Singapore
- Mjunction Services Limited - India
- Kartika Selabumi Mining - Indonesia
- CNBM International Corporation - China
- Port Waratah Coal Services - Australia
- Maheswari Brothers Coal Limited - India
- The Treasury - Australian Government
- Merrill Lynch Commodities Europe
- Directorate Of Revenue Intelligence - India
- Gujarat Mineral Development Corp Ltd - India
- Miang Besar Coal Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- CIMB Investment Bank - Malaysia
- Ind-Barath Power Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Bhatia International Limited - India
- Anglo American - United Kingdom
- Thai Mozambique Logistica
- Sree Jayajothi Cements Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bahari Cakrawala Sebuku - Indonesia
- European Bulk Services B.V. - Netherlands
- Baramulti Group, Indonesia
- Therma Luzon, Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Eastern Coal Council - USA
- Parry Sugars Refinery, India
- Trasteel International SA, Italy
- Aboitiz Power Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mercator Lines Limited - India
- Aditya Birla Group - India
- Makarim & Taira - Indonesia
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Interocean Group of Companies - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Star Paper Mills Limited - India
- Larsen & Toubro Limited - India
- Medco Energi Mining Internasional
- Essar Steel Hazira Ltd - India
- Price Waterhouse Coopers - Russia
- Indian Oil Corporation Limited
- Tata Chemicals Ltd - India
- Australian Coal Association
- Siam City Cement PLC, Thailand
- Oldendorff Carriers - Singapore
- London Commodity Brokers - England
- Grasim Industreis Ltd - India
- Edison Trading Spa - Italy
- GVK Power & Infra Limited - India
- Bharathi Cement Corporation - India
- Cement Manufacturers Association - India
- Deloitte Consulting - India
- Kalimantan Lumbung Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Formosa Plastics Group - Taiwan
- Energy Development Corp, Philippines
- Minerals Council of Australia
- Salva Resources Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Vedanta Resources Plc - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Borneo Indobara - Indonesia
- Indonesian Coal Mining Association
- Wood Mackenzie - Singapore
- Xindia Steels Limited - India
- The State Trading Corporation of India Ltd
- Toyota Tsusho Corporation, Japan
- Bukit Baiduri Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Planning Commission, India
- Sarangani Energy Corporation, Philippines
- Carbofer General Trading SA - India
- Chamber of Mines of South Africa
- Meralco Power Generation, Philippines
- LBH Netherlands Bv - Netherlands
- Rio Tinto Coal - Australia
- Tamil Nadu electricity Board
- Standard Chartered Bank - UAE
- Coastal Gujarat Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Altura Mining Limited, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Commonwealth Bank - Australia
- Posco Energy - South Korea
- Marubeni Corporation - India
- OPG Power Generation Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- Mintek Dendrill Indonesia
- Bayan Resources Tbk. - Indonesia
- VISA Power Limited - India
- PNOC Exploration Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Electricity Generating Authority of Thailand
- Intertek Mineral Services - Indonesia
- Goldman Sachs - Singapore
- Heidelberg Cement - Germany
- Neyveli Lignite Corporation Ltd, - India
- Africa Commodities Group - South Africa
- Samtan Co., Ltd - South Korea
- Mercuria Energy - Indonesia
- Coalindo Energy - Indonesia
- Indogreen Group - Indonesia
- Global Coal Blending Company Limited - Australia
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- Parliament of New Zealand
- Romanian Commodities Exchange
- Meenaskhi Energy Private Limited - India
- Global Business Power Corporation, Philippines
- SMG Consultants - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Thiess Contractors Indonesia
- IHS Mccloskey Coal Group - USA
- Ministry of Transport, Egypt
- Binh Thuan Hamico - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Kideco Jaya Agung - Indonesia
- White Energy Company Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Independent Power Producers Association of India
- SMC Global Power, Philippines
- Ambuja Cements Ltd - India
- Savvy Resources Ltd - HongKong
- Global Green Power PLC Corporation, Philippines
- Riau Bara Harum - Indonesia
- Lanco Infratech Ltd - India
- Ministry of Finance - Indonesia
- Petron Corporation, Philippines
- ICICI Bank Limited - India
- Gujarat Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Barasentosa Lestari - Indonesia
- Georgia Ports Authority, United States
- Kepco SPC Power Corporation, Philippines
- PowerSource Philippines DevCo
- Electricity Authority, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- Indika Energy - Indonesia
- Eastern Energy - Thailand
- New Zealand Coal & Carbon
- The University of Queensland
- Bangladesh Power Developement Board
- Kumho Petrochemical, South Korea
- Siam City Cement - Thailand
- Bukit Makmur.PT - Indonesia
- TeaM Sual Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Madhucon Powers Ltd - India
- Semirara Mining Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Sical Logistics Limited - India
- Central Java Power - Indonesia
- Antam Resourcindo - Indonesia
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