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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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Thursday, 26 November 09
CIL EYES OVERSEAS ACQUISITIONS TO BRIDGE SUPPLY GAP
Coal Minister Sriprakash Jaiswal on Wednesday said that state-run coal major Coal India is looking to acquire coal blocks in the US and
othe ...
Wednesday, 25 November 09
NAPOCOR SCRAPS AWARD OF 715,000 TONS COAL
Top Philippine electricity producer National Power Corp. (Napocor) said on Wednesday it had cancelled plans to award 715,000 tons in coal supply con ...
Wednesday, 25 November 09
RISING FREIGHT RATES HIT COAL IMPORTERS
While state-owned NTPC’s 12.5 million tonne coal import order may have been aimed at plugging the shortage of coal at its thermal power plants ...
Wednesday, 25 November 09
CSN TO BUY RIVERSDALE STAKE TO BOOST COAL SUPPLIES
Cia. Siderurgica Nacional SA plans to buy 16.3 percent of Australian coal-exploration company Riversdale Mining Ltd. for about A$190.5 million ($175 ...
Tuesday, 24 November 09
ICRA DOWNGRADES TNPL`S RATING TO LAA
Credit rating agency, ICRA has revised the long term rating for the Rs 11.25 billion long-term fund-based bank facilities and Rs 1.5 billion non-con ...
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- Parry Sugars Refinery, India
- Singapore Mercantile Exchange
- Bhoruka Overseas - Indonesia
- McConnell Dowell - Australia
- Sical Logistics Limited - India
- Kumho Petrochemical, South Korea
- Eastern Coal Council - USA
- CNBM International Corporation - China
- Ministry of Transport, Egypt
- Parliament of New Zealand
- Coal and Oil Company - UAE
- Chettinad Cement Corporation Ltd - India
- Price Waterhouse Coopers - Russia
- Power Finance Corporation Ltd., India
- Kobexindo Tractors - Indoneisa
- Grasim Industreis Ltd - India
- Aditya Birla Group - India
- International Coal Ventures Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The University of Queensland
- Deloitte Consulting - India
- Georgia Ports Authority, United States
- Bharathi Cement Corporation - India
- Independent Power Producers Association of India
- Rashtriya Ispat Nigam Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Malabar Cements Ltd - India
- Renaissance Capital - South Africa
- Aboitiz Power Corporation - Philippines
- Carbofer General Trading SA - India
- Manunggal Multi Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Sojitz Corporation - Japan
- Salva Resources Pvt Ltd - India
- Ambuja Cements Ltd - India
- South Luzon Thermal Energy Corporation
- Videocon Industries ltd - India
- Pendopo Energi Batubara - Indonesia
- Binh Thuan Hamico - Vietnam
- Eastern Energy - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Timah Investasi Mineral - Indoneisa
- Therma Luzon, Inc, Philippines
- Wood Mackenzie - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Directorate Of Revenue Intelligence - India
- Toyota Tsusho Corporation, Japan
- Savvy Resources Ltd - HongKong
- Electricity Authority, New Zealand
- Heidelberg Cement - Germany
- Orica Mining Services - Indonesia
- Siam City Cement PLC, Thailand
- Karbindo Abesyapradhi - Indoneisa
- Wilmar Investment Holdings
- ASAPP Information Group - India
- Meenaskhi Energy Private Limited - India
- Africa Commodities Group - South Africa
- Port Waratah Coal Services - Australia
- Jorong Barutama Greston.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Indian Oil Corporation Limited
- Iligan Light & Power Inc, Philippines
- Standard Chartered Bank - UAE
- Baramulti Group, Indonesia
- Energy Development Corp, Philippines
- Anglo American - United Kingdom
- ICICI Bank Limited - India
- GVK Power & Infra Limited - India
- Vizag Seaport Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Sakthi Sugars Limited - India
- Barasentosa Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Antam Resourcindo - Indonesia
- Oldendorff Carriers - Singapore
- Merrill Lynch Commodities Europe
- London Commodity Brokers - England
- Indika Energy - Indonesia
- White Energy Company Limited
- Indogreen Group - Indonesia
- Global Green Power PLC Corporation, Philippines
- Semirara Mining Corp, Philippines
- Tata Chemicals Ltd - India
- Commonwealth Bank - Australia
- PetroVietnam Power Coal Import and Supply Company
- Banpu Public Company Limited - Thailand
- Riau Bara Harum - Indonesia
- Central Java Power - Indonesia
- Mintek Dendrill Indonesia
- Vedanta Resources Plc - India
- Simpson Spence & Young - Indonesia
- Bayan Resources Tbk. - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Makarim & Taira - Indonesia
- PNOC Exploration Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mjunction Services Limited - India
- Goldman Sachs - Singapore
- The State Trading Corporation of India Ltd
- Bhatia International Limited - India
- Marubeni Corporation - India
- Interocean Group of Companies - India
- Formosa Plastics Group - Taiwan
- TeaM Sual Corporation - Philippines
- Rio Tinto Coal - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maharashtra Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- Metalloyd Limited - United Kingdom
- Planning Commission, India
- Neyveli Lignite Corporation Ltd, - India
- Bukit Makmur.PT - Indonesia
- Tamil Nadu electricity Board
- Karaikal Port Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Billiton Holdings Pty Ltd - Australia
- Bhushan Steel Limited - India
- Ind-Barath Power Infra Limited - India
- Madhucon Powers Ltd - India
- Bulk Trading Sa - Switzerland
- PTC India Limited - India
- Mercuria Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Alfred C Toepfer International GmbH - Germany
- Ministry of Mines - Canada
- Thai Mozambique Logistica
- Economic Council, Georgia
- Lanco Infratech Ltd - India
- Trasteel International SA, Italy
- Ministry of Finance - Indonesia
- Global Coal Blending Company Limited - Australia
- Medco Energi Mining Internasional
- Straits Asia Resources Limited - Singapore
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- Electricity Generating Authority of Thailand
- Posco Energy - South Korea
- Thiess Contractors Indonesia
- Kalimantan Lumbung Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Petron Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Dalmia Cement Bharat India
- Bukit Asam (Persero) Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- New Zealand Coal & Carbon
- IEA Clean Coal Centre - UK
- Latin American Coal - Colombia
- Sindya Power Generating Company Private Ltd
- Jindal Steel & Power Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Xindia Steels Limited - India
- Indian Energy Exchange, India
- Attock Cement Pakistan Limited
- LBH Netherlands Bv - Netherlands
- Minerals Council of Australia
- Ceylon Electricity Board - Sri Lanka
- Orica Australia Pty. Ltd.
- Petrochimia International Co. Ltd.- Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Cement Manufacturers Association - India
- VISA Power Limited - India
- Coalindo Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Miang Besar Coal Terminal - Indonesia
- Borneo Indobara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- India Bulls Power Limited - India
- MS Steel International - UAE
- Australian Coal Association
- Altura Mining Limited, Indonesia
- Edison Trading Spa - Italy
- Cigading International Bulk Terminal - Indonesia
- PowerSource Philippines DevCo
- Indo Tambangraya Megah - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- SMG Consultants - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- SMC Global Power, Philippines
- Jaiprakash Power Ventures ltd
- Australian Commodity Traders Exchange
- AsiaOL BioFuels Corp., Philippines
- Holcim Trading Pte Ltd - Singapore
- Sree Jayajothi Cements Limited - India
- Global Business Power Corporation, Philippines
- Star Paper Mills Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Central Electricity Authority - India
- Meralco Power Generation, Philippines
- San Jose City I Power Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Mercator Lines Limited - India
- Bangladesh Power Developement Board
- Uttam Galva Steels Limited - India
- Siam City Cement - Thailand
- SN Aboitiz Power Inc, Philippines
- The Treasury - Australian Government
- Larsen & Toubro Limited - India
- OPG Power Generation Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Romanian Commodities Exchange
- Bukit Baiduri Energy - Indonesia
- Chamber of Mines of South Africa
- Kideco Jaya Agung - Indonesia
- Indonesian Coal Mining Association
- CIMB Investment Bank - Malaysia
- Agrawal Coal Company - India
- Energy Link Ltd, New Zealand
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