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Tuesday, 16 July 13
TAKE - OR - PAY CONTRACTS CONTINUE TO INCENTIVISE AUSTRALIAN COAL PRODUCERS DESPITE POTENTIAL NEGATIVE CASH MARGINS - WOOD MACKENZIE
 Australia's coal production has continued to grow, despite lower coal prices in 2013. Global investors and suppliers are therefore questioning whether more production will be shut down. Wood Mackenzie estimates that in 2013, only 4 million tonnes (mt) of coal production in Australia is at risk of closure even though 32mt of coal will be produced at negative margins, including sustaining capital. The decision to continue production instead of shutting it down can mainly be attributed to transport and port contracts in Australia, otherwise known as 'take-or-pay' contracts.
Take-or-pay contracts are fixed cost contracts that result in most producers paying for capacity regardless of tonnes shipped. Stronger growth in exports relative to new capacity build will reduce the average cost per tonne that miners pay for not fully utilising contracted capacity.
Mr. Viktor Tanevski, Coal Cost Analyst at Wood Mackenzie, says, "There have only been two mine closures so far in 2013 compared to seven in 2012. Despite the low coal price environment and current margin squeeze, take-or-pay contracts are incentivising coal producers to increase rather than reduce production, even if additional production is generating negative cash margins. This is because the fixed cost of infrastructure capacity makes the cost of shutting down even more expensive than the cost of maintaining production."
"We estimate that only 4mt, or just over 1% of Australia's coal exports in 2013, is at risk of closure based on Hard Coking Coal (HCC) price of US$171/t and thermal coal price of US$92/t. This is not a significant volume of output; however the amount at risk increases significantly under a lower price scenario.
Wood Mackenzie analyses that if average prices fall to US$122/t for HCC and US$77/t for thermal coal in 2013, then 45mt or 13% of Australia's coal exports in 2013 will be at risk of closure. At that price, a total of 204mt of production will be suffering negative margins.
In summary, Mr. Tanevski says, "Our expectation is that there will not be a significant dent in Australia's production this year. However, if prices do fall below expectations, the risk of closure for mines producing at negative margins will increase, reducing output."
Editor's notes:
Wood Mackenzie is the most comprehensive source of knowledge about the world's energy and metals industries. We analyse and advise on every stage along the value chain - from discovery to delivery, and beyond - to provide clients with the commercial insight that makes them stronger. For more information visit Wood Mackenzie.
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Tuesday, 22 October 13
NEWCASTLE PORT SERVED 38 OCEAN GOING VESSELS IN A WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 0.64 per cent week on week to 3.21 million mt for ...
Tuesday, 22 October 13
KOWEPO INVITED BIDS FOR MULTI GRADE COAL
COALspot.com - Korea Western Power Co., Ltd. (KOWEPO), a Korean electricity generator intends to procure 240,000 tons of multi grade coal for its Ta ...
Monday, 21 October 13
SOUTH CHINA COAL SWAP FOR 2014 DELIVERIES SHOW A POSITIVE TREND
COALspot.com : API 8 CFR South China Coal swaps for average Q4 2013 delivery fell 0.02 percept M-M on Friday 18 October 2013. The CFR South China Co ...
Sunday, 20 October 13
Q3'14 SUB-BIT INDO COAL SWAP CLOSED AT $ 61.80 PMT W/E 18 OCT' 13
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery fell 0.93 percept month on month on Friday 18 October 201 ...
Saturday, 19 October 13
NICKEL ORE SHIPMENTS KEEP SUPRAMAX CHARTER RATES STEADY - CAPT. REDDY
COALspot.com : The futures freight market continued to go down which was reflected in the physical markets as well.
The BDI continued to be soft ...
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- Mintek Dendrill Indonesia
- Agrawal Coal Company - India
- India Bulls Power Limited - India
- Sakthi Sugars Limited - India
- GAC Shipping (India) Pvt Ltd
- Samtan Co., Ltd - South Korea
- Riau Bara Harum - Indonesia
- Global Coal Blending Company Limited - Australia
- Malabar Cements Ltd - India
- Wood Mackenzie - Singapore
- Bukit Makmur.PT - Indonesia
- Mercuria Energy - Indonesia
- The State Trading Corporation of India Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maheswari Brothers Coal Limited - India
- Directorate Of Revenue Intelligence - India
- Parliament of New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Baiduri Energy - Indonesia
- Petron Corporation, Philippines
- Bhushan Steel Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kobexindo Tractors - Indoneisa
- Straits Asia Resources Limited - Singapore
- Therma Luzon, Inc, Philippines
- Chamber of Mines of South Africa
- Heidelberg Cement - Germany
- Energy Development Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- International Coal Ventures Pvt Ltd - India
- ICICI Bank Limited - India
- OPG Power Generation Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Mjunction Services Limited - India
- Sinarmas Energy and Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Energy Link Ltd, New Zealand
- Africa Commodities Group - South Africa
- Planning Commission, India
- Siam City Cement PLC, Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indonesian Coal Mining Association
- Indika Energy - Indonesia
- GVK Power & Infra Limited - India
- TeaM Sual Corporation - Philippines
- MS Steel International - UAE
- Vedanta Resources Plc - India
- Bulk Trading Sa - Switzerland
- IEA Clean Coal Centre - UK
- Price Waterhouse Coopers - Russia
- Commonwealth Bank - Australia
- LBH Netherlands Bv - Netherlands
- Antam Resourcindo - Indonesia
- Power Finance Corporation Ltd., India
- Larsen & Toubro Limited - India
- Uttam Galva Steels Limited - India
- Attock Cement Pakistan Limited
- Sarangani Energy Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Kideco Jaya Agung - Indonesia
- Tata Chemicals Ltd - India
- Thai Mozambique Logistica
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Finance - Indonesia
- Latin American Coal - Colombia
- AsiaOL BioFuels Corp., Philippines
- European Bulk Services B.V. - Netherlands
- Kohat Cement Company Ltd. - Pakistan
- Renaissance Capital - South Africa
- Billiton Holdings Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Chettinad Cement Corporation Ltd - India
- Central Java Power - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Lanco Infratech Ltd - India
- Rio Tinto Coal - Australia
- Videocon Industries ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Aboitiz Power Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Electricity Authority, New Zealand
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- London Commodity Brokers - England
- Bharathi Cement Corporation - India
- Semirara Mining Corp, Philippines
- Bangladesh Power Developement Board
- Trasteel International SA, Italy
- Star Paper Mills Limited - India
- Port Waratah Coal Services - Australia
- Ind-Barath Power Infra Limited - India
- ASAPP Information Group - India
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- Marubeni Corporation - India
- The Treasury - Australian Government
- Indian Oil Corporation Limited
- Bukit Asam (Persero) Tbk - Indonesia
- PowerSource Philippines DevCo
- Alfred C Toepfer International GmbH - Germany
- Baramulti Group, Indonesia
- Makarim & Taira - Indonesia
- Timah Investasi Mineral - Indoneisa
- Xindia Steels Limited - India
- Singapore Mercantile Exchange
- Ministry of Mines - Canada
- CNBM International Corporation - China
- Goldman Sachs - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Orica Mining Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- McConnell Dowell - Australia
- New Zealand Coal & Carbon
- Eastern Energy - Thailand
- Savvy Resources Ltd - HongKong
- Simpson Spence & Young - Indonesia
- Global Business Power Corporation, Philippines
- Coal and Oil Company - UAE
- Economic Council, Georgia
- Coalindo Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Karaikal Port Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Sidhee Cement - India
- Ambuja Cements Ltd - India
- Georgia Ports Authority, United States
- Standard Chartered Bank - UAE
- Orica Australia Pty. Ltd.
- Aditya Birla Group - India
- Medco Energi Mining Internasional
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- South Luzon Thermal Energy Corporation
- White Energy Company Limited
- Siam City Cement - Thailand
- Binh Thuan Hamico - Vietnam
- San Jose City I Power Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Edison Trading Spa - Italy
- Petrochimia International Co. Ltd.- Taiwan
- Carbofer General Trading SA - India
- Jaiprakash Power Ventures ltd
- Thiess Contractors Indonesia
- The University of Queensland
- Kaltim Prima Coal - Indonesia
- Independent Power Producers Association of India
- Romanian Commodities Exchange
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- CIMB Investment Bank - Malaysia
- Madhucon Powers Ltd - India
- Interocean Group of Companies - India
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- Meenaskhi Energy Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Directorate General of MIneral and Coal - Indonesia
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- Indogreen Group - Indonesia
- Vizag Seaport Private Limited - India
- Australian Commodity Traders Exchange
- Meralco Power Generation, Philippines
- Posco Energy - South Korea
- Bhoruka Overseas - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Barasentosa Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Manunggal Multi Energi - Indonesia
- Central Electricity Authority - India
- Sojitz Corporation - Japan
- Essar Steel Hazira Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- PTC India Limited - India
- SMG Consultants - Indonesia
- Deloitte Consulting - India
- Sical Logistics Limited - India
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- Australian Coal Association
- Cigading International Bulk Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Banpu Public Company Limited - Thailand
- Metalloyd Limited - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Coal Council - USA
- Altura Mining Limited, Indonesia
- Ceylon Electricity Board - Sri Lanka
- VISA Power Limited - India
- Minerals Council of Australia
- Kapuas Tunggal Persada - Indonesia
- Tamil Nadu electricity Board
- IHS Mccloskey Coal Group - USA
- Globalindo Alam Lestari - Indonesia
- Cement Manufacturers Association - India
- SN Aboitiz Power Inc, Philippines
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- Parry Sugars Refinery, India
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- Indian Energy Exchange, India
- Anglo American - United Kingdom
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- Dalmia Cement Bharat India
- Ministry of Transport, Egypt
- Kumho Petrochemical, South Korea
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