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Saturday, 31 October 09
PRODUCERS BENEFIT FROM COAL'S TIGHT SUPPLY AND STRONG DEMAND
 The Jakarta Post reported that, The outlook for Indonesian coal producers appears promising with strong volume growth coming from both the domestic and export markets.
Despite the delayed completion of the 10,000 megawatts (MW) coal-fired steam power plant (PLTU) program, we expect to see additional electricity capacity starting in the fourth quarter of 2009. PLTU Labuan (2x300 MW) was scheduled to operate its first unit in September 2009 and the second unit by December 2009.
PLTU Rembang (2x315 MW) and Indramayu (2x330 MW) should start to operate by January 2010. As nine out of 10 projects in Java-Bali are now in their construction stages, there should be a total add-on capacity of 6,830 MW by the end of 2010. Six PLTU projects (total capacity162 MW) outside the Java-Bali region have already started the construction stage in the fourth quarter of this year with an additional 5 to follow suit.
The Government of Indonesia has finally approved the coal volume required for the domestic market obligation (DMO) at 75 million tons per year starting from 2010, 10.3 percent higher year-on-year from 68 million tons of domestic consumption estimated for 2009.
The volume set for the DMO would amount to 30 percent of the 2010 total estimate for coal production at 250 million tons or up 8.7 percent year-on-year from the 2009 estimate of 230 million tons (chart 1). PLN itself has signed 20-year coal supply contracts, effective once the PLTUs are operational, amounting to 30m tons per year of low-rank coal.
We foresee that the implementation of the DMO has limited the flexibility for coal producers to aggressively penetrate the export market. On top of that, the government has recently revealed its intention to apply a restriction on export quotas at 150 million tons per year starting from 2010.
The regulations would also require each coal producer to allocate 25 percent of their total coal production for the domestic market, or to face penalties in the form of restrictions on their exports.
We see, however, that this last regulation might not be necessary due to the anticipated increase in the volume of coal production going forward, exceeding the domestic demand requirements.
On a more positive note, the government seems willing to accommodate Indonesian coal producers' wishes for minor interventions in regulating the sales price for coal under the DMO provisions. The sales price will be with reference to the international market price to avoid high spreads between export and domestic pricing.
Based on the Newcastle Index, the year-to-date coal price has averaged US$70.7 per ton. Despite a downward trend since the fourth quarter of 2008, coal prices have been relatively steady throughout 2009.
We believe that the price of coal has found its new equilibrium at current levels, supported by stronger demand for higher energy needs mostly in the South East Asian region. Hence, we now expect the coal price to average US$75/t in 2010.
Government also plans to cut the royalty tax rate (DPHB) on low calorific value coal. The proposed DPHB rate is 9 percent for coal with CV<5,000kcal/kg (vis-*-vis 13.5 percent previously) and 7.5 percent for CV<4,500kcal/kg.
We see that upon implementation, lower royalty rates will mean incentives towards growth expectations in the sector.
Stronger domestic demand starting from 2010 paired with recovery of global demand will provide higher volume support for demand for both thermal and coking coal. In our view India will provide the highest growth in thermal coal demand, boosting imports by about 18% to 40m tons beginning this year, in line with the government's plan to double coal-fired electricity generation capacity by 2017.
Indonesia has also made preparations to start the 10,000 MW program phase II which is scheduled to start in 2012 and to operate by 2014.
We estimate coal-fired power plants will take around 48 percent from the total portion of 9,963 MW. Furthermore, coal supply may not grow at the same pace as demand due to export restrictions set on major coal exporters, such as Vietnam and China to secure their domestic needs.
Supported by the fact that the China government has decided to reduce its export quota by 50 percent from 40 million tons to 20 million tons.
As one of the world's major coal exporters, Indonesia will certainly have the upper hand in the tightening supply of coal.
Source:The Jakarta Post
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Monday, 30 November 09
THE FUTURES FOR THREE YEARS (2010-2012) WAS SOFT COMPARED TO LAST WEEK - VISTAAR SINGAPORE
COALspot.com (Singapore): BDI continued to drop this week and touched below 4,000 mark level. The drop in BDI was almost 12 pct and closed at 3,975 ...
Monday, 30 November 09
INDIA UTILITIES MOVE TO COAL INDEX - PRICING
Indian state utilities are leading a switch to coal index-linked pricing from fixed prices to secure imports and to be visibly paying fair market pr ...
Monday, 30 November 09
RECAPITAL TO ACQUIRE BERAU COAL
Unlisted Indonesian coal producer Berau will redeem outstanding bonds before the acquisition by Recapital Advisers is completed by the end of this y ...
Friday, 27 November 09
IMPORTING LIGNITE INTO COAL RICH KOSOVO
Balkan Insight has discovered that one of Kosovo’s biggest firms is being forced to import lignite from Malaysia and Indonesia, despite estima ...
Friday, 27 November 09
SOUTH AFRICA STILL TOPS IN COAL EXPORT RANKINGS
Mining Weekly reported that, Despite significant coal-mining capacity recently discovered in the Southern African region, according to senior coal a ...
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- Ind-Barath Power Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Pendopo Energi Batubara - Indonesia
- Barasentosa Lestari - Indonesia
- Mintek Dendrill Indonesia
- International Coal Ventures Pvt Ltd - India
- India Bulls Power Limited - India
- London Commodity Brokers - England
- Leighton Contractors Pty Ltd - Australia
- The Treasury - Australian Government
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
- White Energy Company Limited
- Holcim Trading Pte Ltd - Singapore
- Merrill Lynch Commodities Europe
- Kumho Petrochemical, South Korea
- Ministry of Finance - Indonesia
- Standard Chartered Bank - UAE
- Tamil Nadu electricity Board
- Essar Steel Hazira Ltd - India
- Orica Mining Services - Indonesia
- Trasteel International SA, Italy
- Krishnapatnam Port Company Ltd. - India
- Indo Tambangraya Megah - Indonesia
- Australian Commodity Traders Exchange
- Timah Investasi Mineral - Indoneisa
- Global Business Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Bukit Makmur.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- New Zealand Coal & Carbon
- Salva Resources Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Eastern Coal Council - USA
- Rashtriya Ispat Nigam Limited - India
- Binh Thuan Hamico - Vietnam
- Parliament of New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Bangladesh Power Developement Board
- Baramulti Group, Indonesia
- Semirara Mining and Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Latin American Coal - Colombia
- Jorong Barutama Greston.PT - Indonesia
- Indogreen Group - Indonesia
- Banpu Public Company Limited - Thailand
- Central Electricity Authority - India
- Oldendorff Carriers - Singapore
- Bharathi Cement Corporation - India
- Ministry of Mines - Canada
- Simpson Spence & Young - Indonesia
- Bhatia International Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Borneo Indobara - Indonesia
- Attock Cement Pakistan Limited
- Chamber of Mines of South Africa
- Aboitiz Power Corporation - Philippines
- Sakthi Sugars Limited - India
- Georgia Ports Authority, United States
- Indian Energy Exchange, India
- Xindia Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Global Coal Blending Company Limited - Australia
- Bayan Resources Tbk. - Indonesia
- Edison Trading Spa - Italy
- GAC Shipping (India) Pvt Ltd
- Madhucon Powers Ltd - India
- Heidelberg Cement - Germany
- GVK Power & Infra Limited - India
- Formosa Plastics Group - Taiwan
- Billiton Holdings Pty Ltd - Australia
- Central Java Power - Indonesia
- Iligan Light & Power Inc, Philippines
- Electricity Authority, New Zealand
- Global Green Power PLC Corporation, Philippines
- Port Waratah Coal Services - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- McConnell Dowell - Australia
- Medco Energi Mining Internasional
- Vizag Seaport Private Limited - India
- Ministry of Transport, Egypt
- Petrochimia International Co. Ltd.- Taiwan
- Jaiprakash Power Ventures ltd
- Petron Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Singapore Mercantile Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indonesian Coal Mining Association
- IEA Clean Coal Centre - UK
- Sical Logistics Limited - India
- Coalindo Energy - Indonesia
- Carbofer General Trading SA - India
- San Jose City I Power Corp, Philippines
- Samtan Co., Ltd - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Coal Association
- Sindya Power Generating Company Private Ltd
- Chettinad Cement Corporation Ltd - India
- Rio Tinto Coal - Australia
- PTC India Limited - India
- Savvy Resources Ltd - HongKong
- Mercuria Energy - Indonesia
- Ambuja Cements Ltd - India
- Bhoruka Overseas - Indonesia
- Interocean Group of Companies - India
- Independent Power Producers Association of India
- PetroVietnam Power Coal Import and Supply Company
- Karaikal Port Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Mercator Lines Limited - India
- Grasim Industreis Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Wood Mackenzie - Singapore
- Kartika Selabumi Mining - Indonesia
- Energy Development Corp, Philippines
- Indian Oil Corporation Limited
- Semirara Mining Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Intertek Mineral Services - Indonesia
- Africa Commodities Group - South Africa
- Meenaskhi Energy Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Goldman Sachs - Singapore
- The University of Queensland
- LBH Netherlands Bv - Netherlands
- Energy Link Ltd, New Zealand
- Videocon Industries ltd - India
- Agrawal Coal Company - India
- Electricity Generating Authority of Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Anglo American - United Kingdom
- Commonwealth Bank - Australia
- Bulk Trading Sa - Switzerland
- VISA Power Limited - India
- Kaltim Prima Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Sidhee Cement - India
- Orica Australia Pty. Ltd.
- SMG Consultants - Indonesia
- AsiaOL BioFuels Corp., Philippines
- SMC Global Power, Philippines
- Thai Mozambique Logistica
- Wilmar Investment Holdings
- Kapuas Tunggal Persada - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Sinarmas Energy and Mining - Indonesia
- Star Paper Mills Limited - India
- Romanian Commodities Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Price Waterhouse Coopers - Russia
- PNOC Exploration Corporation - Philippines
- Posco Energy - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Siam City Cement - Thailand
- ICICI Bank Limited - India
- Malabar Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Larsen & Toubro Limited - India
- Tata Chemicals Ltd - India
- Cement Manufacturers Association - India
- Aditya Birla Group - India
- Deloitte Consulting - India
- CIMB Investment Bank - Malaysia
- PowerSource Philippines DevCo
- Riau Bara Harum - Indonesia
- Antam Resourcindo - Indonesia
- Sojitz Corporation - Japan
- Siam City Cement PLC, Thailand
- Mjunction Services Limited - India
- The State Trading Corporation of India Ltd
- Manunggal Multi Energi - Indonesia
- Renaissance Capital - South Africa
- Parry Sugars Refinery, India
- Kohat Cement Company Ltd. - Pakistan
- Economic Council, Georgia
- CNBM International Corporation - China
- OPG Power Generation Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Indika Energy - Indonesia
- Vedanta Resources Plc - India
- Coastal Gujarat Power Limited - India
- Directorate Of Revenue Intelligence - India
- Kobexindo Tractors - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- ASAPP Information Group - India
- MS Steel International - UAE
- Thiess Contractors Indonesia
- Marubeni Corporation - India
- Makarim & Taira - Indonesia
- Dalmia Cement Bharat India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Planning Commission, India
- Minerals Council of Australia
- Eastern Energy - Thailand
- Uttam Galva Steels Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meralco Power Generation, Philippines
- Therma Luzon, Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Sarangani Energy Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- Bukit Baiduri Energy - Indonesia
- Jindal Steel & Power Ltd - India
- South Luzon Thermal Energy Corporation
- Coal and Oil Company - UAE
- Maheswari Brothers Coal Limited - India
- Globalindo Alam Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
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