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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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Friday, 20 November 09
CHINESE COKING COAL SUPPLY TO BE 'TIGHT' IN 2010, KGI SAYS
Bloomberg Reported that, Stephen Wang, an analyst with KGI Securities in Taipei, comments on the outlook for Chinese steel production and demand for ...
Friday, 20 November 09
INDONESIAN CO PLANS JV WITH NAGARJUNA
Economic Times reported that, Infrastructure firm Nagarjuna Constructions Company (NCC) is set to form a joint venture with an Indonesian coal minin ...
Thursday, 19 November 09
S. KOREA TO BUY COAL FROM CHINA FOR US$ 85-90/T IN 2010
Head of one S. Korea power company on November 18 unveiled that S. Korea’s power companies may purchase coal from China at the contract price ...
Thursday, 19 November 09
SNAPSHOT OF INDONESIA'S COAL INDUSTRY - FACT BOX BY REUTERS
Indonesian plans to cap coal exports to meet domestic demand will not hit global supplies in the near term, but could start to bite in three to five ...
Thursday, 19 November 09
INDONESIA COAL EXPORTS CURB WILL TAKE TIME TO BITE
Indonesia's plans to cap coal exports to satisfy demand at home are unlikely to crimp global supplies for as long as five years, when new power pla ...
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- Bukit Makmur.PT - Indonesia
- Central Electricity Authority - India
- Marubeni Corporation - India
- Indian Oil Corporation Limited
- Wilmar Investment Holdings
- Energy Link Ltd, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ASAPP Information Group - India
- Meralco Power Generation, Philippines
- Videocon Industries ltd - India
- Trasteel International SA, Italy
- Cement Manufacturers Association - India
- Goldman Sachs - Singapore
- Metalloyd Limited - United Kingdom
- Kobexindo Tractors - Indoneisa
- Lanco Infratech Ltd - India
- Kaltim Prima Coal - Indonesia
- Ambuja Cements Ltd - India
- Bharathi Cement Corporation - India
- Altura Mining Limited, Indonesia
- Global Business Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- GMR Energy Limited - India
- SN Aboitiz Power Inc, Philippines
- Independent Power Producers Association of India
- The Treasury - Australian Government
- OPG Power Generation Pvt Ltd - India
- Indogreen Group - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Larsen & Toubro Limited - India
- Krishnapatnam Port Company Ltd. - India
- Dalmia Cement Bharat India
- Barasentosa Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Star Paper Mills Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- Standard Chartered Bank - UAE
- Bhushan Steel Limited - India
- Gujarat Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Bhoruka Overseas - Indonesia
- Deloitte Consulting - India
- Essar Steel Hazira Ltd - India
- South Luzon Thermal Energy Corporation
- Pipit Mutiara Jaya. PT, Indonesia
- PowerSource Philippines DevCo
- Ministry of Transport, Egypt
- London Commodity Brokers - England
- Ministry of Finance - Indonesia
- MS Steel International - UAE
- Karbindo Abesyapradhi - Indoneisa
- Chamber of Mines of South Africa
- Straits Asia Resources Limited - Singapore
- India Bulls Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Economic Council, Georgia
- Malabar Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Coal and Oil Company - UAE
- Directorate General of MIneral and Coal - Indonesia
- Grasim Industreis Ltd - India
- Sojitz Corporation - Japan
- Bhatia International Limited - India
- CNBM International Corporation - China
- Globalindo Alam Lestari - Indonesia
- Commonwealth Bank - Australia
- Kalimantan Lumbung Energi - Indonesia
- Minerals Council of Australia
- Maheswari Brothers Coal Limited - India
- Mjunction Services Limited - India
- Therma Luzon, Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Oldendorff Carriers - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Latin American Coal - Colombia
- Carbofer General Trading SA - India
- Georgia Ports Authority, United States
- Karaikal Port Pvt Ltd - India
- Attock Cement Pakistan Limited
- European Bulk Services B.V. - Netherlands
- Sree Jayajothi Cements Limited - India
- Alfred C Toepfer International GmbH - Germany
- Indika Energy - Indonesia
- Thai Mozambique Logistica
- Bukit Baiduri Energy - Indonesia
- PTC India Limited - India
- AsiaOL BioFuels Corp., Philippines
- Uttam Galva Steels Limited - India
- Borneo Indobara - Indonesia
- McConnell Dowell - Australia
- Price Waterhouse Coopers - Russia
- Pendopo Energi Batubara - Indonesia
- Australian Commodity Traders Exchange
- Ministry of Mines - Canada
- Petrochimia International Co. Ltd.- Taiwan
- Madhucon Powers Ltd - India
- Global Green Power PLC Corporation, Philippines
- Vedanta Resources Plc - India
- Neyveli Lignite Corporation Ltd, - India
- Kideco Jaya Agung - Indonesia
- Makarim & Taira - Indonesia
- Edison Trading Spa - Italy
- Global Coal Blending Company Limited - Australia
- Riau Bara Harum - Indonesia
- GAC Shipping (India) Pvt Ltd
- LBH Netherlands Bv - Netherlands
- Interocean Group of Companies - India
- Eastern Energy - Thailand
- Mintek Dendrill Indonesia
- Gujarat Sidhee Cement - India
- Wood Mackenzie - Singapore
- Simpson Spence & Young - Indonesia
- Central Java Power - Indonesia
- Jindal Steel & Power Ltd - India
- Parliament of New Zealand
- San Jose City I Power Corp, Philippines
- Tata Chemicals Ltd - India
- Salva Resources Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Parry Sugars Refinery, India
- Renaissance Capital - South Africa
- Mercuria Energy - Indonesia
- Africa Commodities Group - South Africa
- Sinarmas Energy and Mining - Indonesia
- TeaM Sual Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Petron Corporation, Philippines
- Siam City Cement PLC, Thailand
- White Energy Company Limited
- Semirara Mining Corp, Philippines
- Banpu Public Company Limited - Thailand
- Timah Investasi Mineral - Indoneisa
- Sarangani Energy Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Billiton Holdings Pty Ltd - Australia
- Australian Coal Association
- Vizag Seaport Private Limited - India
- Baramulti Group, Indonesia
- Orica Australia Pty. Ltd.
- Aditya Birla Group - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Merrill Lynch Commodities Europe
- PNOC Exploration Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Mercator Lines Limited - India
- Planning Commission, India
- The State Trading Corporation of India Ltd
- Tamil Nadu electricity Board
- ICICI Bank Limited - India
- Coalindo Energy - Indonesia
- Siam City Cement - Thailand
- Bulk Trading Sa - Switzerland
- Xindia Steels Limited - India
- Electricity Generating Authority of Thailand
- Sakthi Sugars Limited - India
- Orica Mining Services - Indonesia
- Indian Energy Exchange, India
- Intertek Mineral Services - Indonesia
- Energy Development Corp, Philippines
- Thiess Contractors Indonesia
- GVK Power & Infra Limited - India
- Agrawal Coal Company - India
- Romanian Commodities Exchange
- Toyota Tsusho Corporation, Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Miang Besar Coal Terminal - Indonesia
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- Kumho Petrochemical, South Korea
- Sindya Power Generating Company Private Ltd
- Coastal Gujarat Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Formosa Plastics Group - Taiwan
- Meenaskhi Energy Private Limited - India
- Directorate Of Revenue Intelligence - India
- Singapore Mercantile Exchange
- Antam Resourcindo - Indonesia
- Bangladesh Power Developement Board
- Posco Energy - South Korea
- Semirara Mining and Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Aboitiz Power Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Ind-Barath Power Infra Limited - India
- The University of Queensland
- Power Finance Corporation Ltd., India
- Indonesian Coal Mining Association
- Kohat Cement Company Ltd. - Pakistan
- TNB Fuel Sdn Bhd - Malaysia
- Port Waratah Coal Services - Australia
- Rashtriya Ispat Nigam Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Binh Thuan Hamico - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Sical Logistics Limited - India
- Leighton Contractors Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Maharashtra Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Medco Energi Mining Internasional
- SMC Global Power, Philippines
- VISA Power Limited - India
- Electricity Authority, New Zealand
- Heidelberg Cement - Germany
- Bahari Cakrawala Sebuku - Indonesia
- Anglo American - United Kingdom
- IHS Mccloskey Coal Group - USA
- Eastern Coal Council - USA
- Bayan Resources Tbk. - Indonesia
- PetroVietnam Power Coal Import and Supply Company
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