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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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Monday, 24 June 24
PHILIPPINES COAL SUPPLY ENOUGH UNTIL 2030 - PHILSTAR GLOBAL
The country’s existing coal-fired power plants are sufficient to ensure enough base load capacity in the next six years, Energy Secretary Rap ...
Friday, 14 June 24
NEXTDECADE, SAUDI ARAMCO SIGN 20-YEAR LNG SUPPLY DEAL - REUTERS
U.S. liquefied natural gas (LNG) provider NextDecade has signed a non-binding agreement with Saudi Aramco 2222.SE to supply 1.2 million tonnes per ...
Friday, 14 June 24
NEWBUILDING PRICES CLIMB 3% TO HIGHEST LEVEL IN 16 YEARS - NIELS RASMUSSEN
“Since the start of the year, newbuilding prices have risen 3% to their highest level since 2008. Compared to their most recent low in late 2 ...
Friday, 14 June 24
INDIA TARGETS HIGHER DOMESTIC COAL PRODUCTION, REDUCED IMPORTS: GOVT - REUTERS
India wants to reduce coal imports and increase domestic production, federal coal minister G. Kishan Reddy said on Thursday.
The cou ...
Thursday, 13 June 24
US LNG TO ASIA FOR POWER GENERATION EXPECTED TO CUT EMISSIONS VERSUS COAL - RYSTAD ENERGY
The value-chain emissions of liquified natural gas (LNG) are lower on average than for coal-fired power generation, even when the fuel is shipp ...
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- Tamil Nadu electricity Board
- Ambuja Cements Ltd - India
- Coal and Oil Company - UAE
- Central Electricity Authority - India
- Bhoruka Overseas - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- Manunggal Multi Energi - Indonesia
- Minerals Council of Australia
- Binh Thuan Hamico - Vietnam
- Commonwealth Bank - Australia
- Timah Investasi Mineral - Indoneisa
- Electricity Generating Authority of Thailand
- New Zealand Coal & Carbon
- Sakthi Sugars Limited - India
- Wood Mackenzie - Singapore
- Mintek Dendrill Indonesia
- Sojitz Corporation - Japan
- Orica Australia Pty. Ltd.
- McConnell Dowell - Australia
- Sree Jayajothi Cements Limited - India
- Indian Oil Corporation Limited
- Petrochimia International Co. Ltd.- Taiwan
- Pendopo Energi Batubara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Kapuas Tunggal Persada - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Mjunction Services Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Chettinad Cement Corporation Ltd - India
- White Energy Company Limited
- Xindia Steels Limited - India
- The State Trading Corporation of India Ltd
- Australian Commodity Traders Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Videocon Industries ltd - India
- Barasentosa Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Grasim Industreis Ltd - India
- Parliament of New Zealand
- PNOC Exploration Corporation - Philippines
- ICICI Bank Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Riau Bara Harum - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Independent Power Producers Association of India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Globalindo Alam Lestari - Indonesia
- Lanco Infratech Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Global Green Power PLC Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Ministry of Finance - Indonesia
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Energy Development Corp, Philippines
- Bulk Trading Sa - Switzerland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Makarim & Taira - Indonesia
- Mercator Lines Limited - India
- Energy Link Ltd, New Zealand
- London Commodity Brokers - England
- The Treasury - Australian Government
- Meralco Power Generation, Philippines
- Ministry of Mines - Canada
- Bukit Baiduri Energy - Indonesia
- GMR Energy Limited - India
- SMC Global Power, Philippines
- Gujarat Sidhee Cement - India
- AsiaOL BioFuels Corp., Philippines
- Coastal Gujarat Power Limited - India
- Essar Steel Hazira Ltd - India
- CNBM International Corporation - China
- Kumho Petrochemical, South Korea
- International Coal Ventures Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Indika Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Power Finance Corporation Ltd., India
- Merrill Lynch Commodities Europe
- Interocean Group of Companies - India
- Straits Asia Resources Limited - Singapore
- Leighton Contractors Pty Ltd - Australia
- Vedanta Resources Plc - India
- Borneo Indobara - Indonesia
- Carbofer General Trading SA - India
- Kaltim Prima Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Oldendorff Carriers - Singapore
- Larsen & Toubro Limited - India
- Krishnapatnam Port Company Ltd. - India
- Karaikal Port Pvt Ltd - India
- Wilmar Investment Holdings
- Sindya Power Generating Company Private Ltd
- Directorate Of Revenue Intelligence - India
- Antam Resourcindo - Indonesia
- Madhucon Powers Ltd - India
- Simpson Spence & Young - Indonesia
- Altura Mining Limited, Indonesia
- Agrawal Coal Company - India
- Iligan Light & Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sical Logistics Limited - India
- Thiess Contractors Indonesia
- Samtan Co., Ltd - South Korea
- Aditya Birla Group - India
- Star Paper Mills Limited - India
- Baramulti Group, Indonesia
- LBH Netherlands Bv - Netherlands
- Metalloyd Limited - United Kingdom
- Intertek Mineral Services - Indonesia
- Indogreen Group - Indonesia
- SN Aboitiz Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Bahari Cakrawala Sebuku - Indonesia
- Central Java Power - Indonesia
- Goldman Sachs - Singapore
- Bangladesh Power Developement Board
- Thai Mozambique Logistica
- Parry Sugars Refinery, India
- Meenaskhi Energy Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Planning Commission, India
- Salva Resources Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- Posco Energy - South Korea
- Cigading International Bulk Terminal - Indonesia
- Tata Chemicals Ltd - India
- The University of Queensland
- Sinarmas Energy and Mining - Indonesia
- Australian Coal Association
- Bhushan Steel Limited - India
- Bharathi Cement Corporation - India
- Billiton Holdings Pty Ltd - Australia
- VISA Power Limited - India
- Siam City Cement - Thailand
- Kepco SPC Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- PowerSource Philippines DevCo
- Alfred C Toepfer International GmbH - Germany
- Indian Energy Exchange, India
- Renaissance Capital - South Africa
- Romanian Commodities Exchange
- Bayan Resources Tbk. - Indonesia
- India Bulls Power Limited - India
- Medco Energi Mining Internasional
- Rashtriya Ispat Nigam Limited - India
- ASAPP Information Group - India
- Attock Cement Pakistan Limited
- Coalindo Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Port Waratah Coal Services - Australia
- TeaM Sual Corporation - Philippines
- Standard Chartered Bank - UAE
- Bukit Makmur.PT - Indonesia
- Siam City Cement PLC, Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Chamber of Mines of South Africa
- Orica Mining Services - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bhatia International Limited - India
- Sarangani Energy Corporation, Philippines
- Africa Commodities Group - South Africa
- Therma Luzon, Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Malabar Cements Ltd - India
- Jindal Steel & Power Ltd - India
- Indonesian Coal Mining Association
- Semirara Mining Corp, Philippines
- Trasteel International SA, Italy
- Vizag Seaport Private Limited - India
- Global Coal Blending Company Limited - Australia
- Rio Tinto Coal - Australia
- Maheswari Brothers Coal Limited - India
- Ceylon Electricity Board - Sri Lanka
- Karbindo Abesyapradhi - Indoneisa
- Savvy Resources Ltd - HongKong
- OPG Power Generation Pvt Ltd - India
- Edison Trading Spa - Italy
- GVK Power & Infra Limited - India
- Economic Council, Georgia
- MS Steel International - UAE
- Georgia Ports Authority, United States
- SMG Consultants - Indonesia
- Electricity Authority, New Zealand
- Singapore Mercantile Exchange
- Latin American Coal - Colombia
- Dalmia Cement Bharat India
- San Jose City I Power Corp, Philippines
- Anglo American - United Kingdom
- Ind-Barath Power Infra Limited - India
- Ministry of Transport, Egypt
- Heidelberg Cement - Germany
- Uttam Galva Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Deloitte Consulting - India
- Semirara Mining and Power Corporation, Philippines
- Eastern Energy - Thailand
- IHS Mccloskey Coal Group - USA
- Eastern Coal Council - USA
- Marubeni Corporation - India
- GAC Shipping (India) Pvt Ltd
- PTC India Limited - India
- IEA Clean Coal Centre - UK
- Cement Manufacturers Association - India
- European Bulk Services B.V. - Netherlands
- Kalimantan Lumbung Energi - Indonesia
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