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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, 12 November 09
GANGAVARAM PORT SETS RECORD BY DISCHARGING 80,514 TONNE OF COAL CARGO
Gangavaram Port, the deepest port in the country with water depth of 20 meters, has achieved an unprecedented milestone by discharging 80,514 metric ...
Thursday, 12 November 09
FOREIGN INVESTMENT IN RUSSIAN COAL SECTOR
Reuters reported that, Russia's coal mines, particularly in the Arctic and Far East, are attracting interest from foreign investors as commodity pr ...
Thursday, 12 November 09
BANPU TO INVEST US$ 466 M
Plan targets 33.5m tonnes of coal per year
Bangkok Post reported that, Banpu Plc, Asean's largest coal miner, is planning capital investments of ...
Wednesday, 11 November 09
NORTHSTAR TAKES 40 PER CENT OF INDONESIAN MINING COMPANY
AltAssets reported that, PT Northstar Pacific Partners, the Indonesian affiliate of US private equity firm TPG, has taken a 40 per cent stake in Ind ...
Wednesday, 11 November 09
INDONESIAN COAL MINERS SOLD BIG VOLUMES OF 2010 TO CHINA
* China has scooped up large volumes of Indonesian coal
* Total exports to China in 2010 seen to exceed 20 million T
* Chinese, Indian demand may ...
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- TeaM Sual Corporation - Philippines
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- The Treasury - Australian Government
- Global Business Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- GAC Shipping (India) Pvt Ltd
- Uttam Galva Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Malabar Cements Ltd - India
- Coalindo Energy - Indonesia
- Altura Mining Limited, Indonesia
- Trasteel International SA, Italy
- ASAPP Information Group - India
- Ministry of Finance - Indonesia
- Price Waterhouse Coopers - Russia
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- Bukit Makmur.PT - Indonesia
- MS Steel International - UAE
- Metalloyd Limited - United Kingdom
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- Kepco SPC Power Corporation, Philippines
- India Bulls Power Limited - India
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- Interocean Group of Companies - India
- London Commodity Brokers - England
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- Parry Sugars Refinery, India
- Petrochimia International Co. Ltd.- Taiwan
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- PowerSource Philippines DevCo
- Renaissance Capital - South Africa
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- Sojitz Corporation - Japan
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- Planning Commission, India
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- Larsen & Toubro Limited - India
- Wood Mackenzie - Singapore
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- CNBM International Corporation - China
- Intertek Mineral Services - Indonesia
- Latin American Coal - Colombia
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- Globalindo Alam Lestari - Indonesia
- Therma Luzon, Inc, Philippines
- White Energy Company Limited
- Jindal Steel & Power Ltd - India
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- Savvy Resources Ltd - HongKong
- Neyveli Lignite Corporation Ltd, - India
- Edison Trading Spa - Italy
- Asmin Koalindo Tuhup - Indonesia
- Indian Oil Corporation Limited
- Mercuria Energy - Indonesia
- Antam Resourcindo - Indonesia
- Gujarat Sidhee Cement - India
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- Indonesian Coal Mining Association
- Merrill Lynch Commodities Europe
- Salva Resources Pvt Ltd - India
- Essar Steel Hazira Ltd - India
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- New Zealand Coal & Carbon
- Rashtriya Ispat Nigam Limited - India
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- Aditya Birla Group - India
- Bhatia International Limited - India
- Bhushan Steel Limited - India
- Kartika Selabumi Mining - Indonesia
- Goldman Sachs - Singapore
- SMC Global Power, Philippines
- Singapore Mercantile Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Coal Council - USA
- Grasim Industreis Ltd - India
- European Bulk Services B.V. - Netherlands
- IEA Clean Coal Centre - UK
- Indika Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Petron Corporation, Philippines
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- VISA Power Limited - India
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- Meralco Power Generation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Parliament of New Zealand
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- Carbofer General Trading SA - India
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- Kohat Cement Company Ltd. - Pakistan
- Sical Logistics Limited - India
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- Coal and Oil Company - UAE
- Billiton Holdings Pty Ltd - Australia
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- San Jose City I Power Corp, Philippines
- Australian Coal Association
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- Global Green Power PLC Corporation, Philippines
- Global Coal Blending Company Limited - Australia
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- Independent Power Producers Association of India
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- Electricity Generating Authority of Thailand
- OPG Power Generation Pvt Ltd - India
- Energy Development Corp, Philippines
- The University of Queensland
- Bharathi Cement Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Kumho Petrochemical, South Korea
- Romanian Commodities Exchange
- Ambuja Cements Ltd - India
- Chamber of Mines of South Africa
- Indian Energy Exchange, India
- Sinarmas Energy and Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Barasentosa Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Africa Commodities Group - South Africa
- Indo Tambangraya Megah - Indonesia
- Bukit Baiduri Energy - Indonesia
- ICICI Bank Limited - India
- Power Finance Corporation Ltd., India
- Commonwealth Bank - Australia
- Krishnapatnam Port Company Ltd. - India
- Orica Australia Pty. Ltd.
- Jorong Barutama Greston.PT - Indonesia
- SMG Consultants - Indonesia
- Oldendorff Carriers - Singapore
- Eastern Energy - Thailand
- Australian Commodity Traders Exchange
- Semirara Mining and Power Corporation, Philippines
- Makarim & Taira - Indonesia
- GVK Power & Infra Limited - India
- Star Paper Mills Limited - India
- Heidelberg Cement - Germany
- Miang Besar Coal Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- McConnell Dowell - Australia
- Meenaskhi Energy Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Siam City Cement PLC, Thailand
- Bangladesh Power Developement Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- South Luzon Thermal Energy Corporation
- Karaikal Port Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Mercator Lines Limited - India
- Iligan Light & Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Directorate Of Revenue Intelligence - India
- Bahari Cakrawala Sebuku - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Banpu Public Company Limited - Thailand
- Vedanta Resources Plc - India
- Kaltim Prima Coal - Indonesia
- Central Electricity Authority - India
- Bayan Resources Tbk. - Indonesia
- Tamil Nadu electricity Board
- Manunggal Multi Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- AsiaOL BioFuels Corp., Philippines
- PNOC Exploration Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Thiess Contractors Indonesia
- Electricity Authority, New Zealand
- Samtan Co., Ltd - South Korea
- Ministry of Mines - Canada
- Borneo Indobara - Indonesia
- Ministry of Transport, Egypt
- TNB Fuel Sdn Bhd - Malaysia
- PTC India Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Lanco Infratech Ltd - India
- Mintek Dendrill Indonesia
- Kobexindo Tractors - Indoneisa
- Economic Council, Georgia
- Attock Cement Pakistan Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- International Coal Ventures Pvt Ltd - India
- Minerals Council of Australia
- Videocon Industries ltd - India
- Riau Bara Harum - Indonesia
- Formosa Plastics Group - Taiwan
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