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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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Sunday, 01 November 09
MINES REGULATION AMENDMENT BILL TO BE TABLED IN PARLIAMENT
Thaindia News reported that, A bill seeking to amend the Mines and Minerals Development Regulation Act, 1957, will be introduced in the winter sessi ...
Sunday, 01 November 09
THE COAL MOVEMENT TO INDIA FROM SOUTH AFRICA AND INDONESIA WOULD BE CONTINUE INCREASE - VISTAAR SINGAPORE
COALspot.com (Singapore): The BDI continued to be firm with an increase of 60 points and closed at 3,103 points.
The cape index also was firm an ...
Sunday, 01 November 09
INDONESIA ADARO Q3 NET PROFIT JUMPS ON COAL DEMAND
* Q3 net profit up 131.6 percent to 1.27 trillion rupiah
* Q3 revenue up 56.8 percent to 7.12 trillion rupiah
Reuters reported that, Indonesia' ...
Sunday, 01 November 09
PT INDIKA MAY BUY STAKES IN BHPB INDONESIA OPERATIONS
Dow Jones reported that Indonesian coal producer PT Indika Energy may buy stakes in BHP Billiton Limited's Indonesian coal operations and in local ...
Sunday, 01 November 09
ADAVALE RESOURCES MAKES COAL ACQUISITIONS IN INDONESIA
Adavale Resources Limited has entered into an agreement to acquire the rights to two thermal coal projects Tapan and Jambi in Sumatra Indonesia, hel ...
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- Indonesian Coal Mining Association
- Wood Mackenzie - Singapore
- SMG Consultants - Indonesia
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- Singapore Mercantile Exchange
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- Africa Commodities Group - South Africa
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- Parliament of New Zealand
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- LBH Netherlands Bv - Netherlands
- Neyveli Lignite Corporation Ltd, - India
- Barasentosa Lestari - Indonesia
- India Bulls Power Limited - India
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- Bharathi Cement Corporation - India
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- London Commodity Brokers - England
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- The State Trading Corporation of India Ltd
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- Planning Commission, India
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- Indian Oil Corporation Limited
- Ministry of Transport, Egypt
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- Sojitz Corporation - Japan
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- Latin American Coal - Colombia
- Holcim Trading Pte Ltd - Singapore
- Merrill Lynch Commodities Europe
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- Global Business Power Corporation, Philippines
- Aditya Birla Group - India
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- Eastern Coal Council - USA
- Gujarat Sidhee Cement - India
- Billiton Holdings Pty Ltd - Australia
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- Rio Tinto Coal - Australia
- TNB Fuel Sdn Bhd - Malaysia
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- Chettinad Cement Corporation Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Commonwealth Bank - Australia
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- Thiess Contractors Indonesia
- Ceylon Electricity Board - Sri Lanka
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- New Zealand Coal & Carbon
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- Renaissance Capital - South Africa
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- Indogreen Group - Indonesia
- Electricity Generating Authority of Thailand
- Bangladesh Power Developement Board
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- Sical Logistics Limited - India
- Miang Besar Coal Terminal - Indonesia
- Romanian Commodities Exchange
- Minerals Council of Australia
- Australian Coal Association
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- Port Waratah Coal Services - Australia
- VISA Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
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- Siam City Cement PLC, Thailand
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- Jorong Barutama Greston.PT - Indonesia
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- IHS Mccloskey Coal Group - USA
- South Luzon Thermal Energy Corporation
- Aboitiz Power Corporation - Philippines
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- Mjunction Services Limited - India
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- Interocean Group of Companies - India
- Kobexindo Tractors - Indoneisa
- Bayan Resources Tbk. - Indonesia
- McConnell Dowell - Australia
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- Gujarat Electricity Regulatory Commission - India
- MS Steel International - UAE
- Antam Resourcindo - Indonesia
- Bulk Trading Sa - Switzerland
- Price Waterhouse Coopers - Russia
- Ministry of Mines - Canada
- Salva Resources Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- SN Aboitiz Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
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- Central Electricity Authority - India
- PetroVietnam Power Coal Import and Supply Company
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- Cement Manufacturers Association - India
- Metalloyd Limited - United Kingdom
- Sindya Power Generating Company Private Ltd
- Energy Link Ltd, New Zealand
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- Sinarmas Energy and Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Power Finance Corporation Ltd., India
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- Jindal Steel & Power Ltd - India
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- SMC Global Power, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
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- Intertek Mineral Services - Indonesia
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- The University of Queensland
- Global Coal Blending Company Limited - Australia
- Bhoruka Overseas - Indonesia
- Straits Asia Resources Limited - Singapore
- The Treasury - Australian Government
- Semirara Mining Corp, Philippines
- Dalmia Cement Bharat India
- Cigading International Bulk Terminal - Indonesia
- Australian Commodity Traders Exchange
- Heidelberg Cement - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Meralco Power Generation, Philippines
- Rashtriya Ispat Nigam Limited - India
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- Independent Power Producers Association of India
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- Indika Energy - Indonesia
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- PTC India Limited - India
- Samtan Co., Ltd - South Korea
- Bahari Cakrawala Sebuku - Indonesia
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- Directorate General of MIneral and Coal - Indonesia
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- Chamber of Mines of South Africa
- Alfred C Toepfer International GmbH - Germany
- CIMB Investment Bank - Malaysia
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