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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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Wednesday, 28 October 09
INVESTMENT IN MINING SECTOR HAMPERED BY LATE REGULATIONS
The Jakarta Post reported that, Indonesia may have to wait for a potential massive inflow of new investment into the mining sector due to delays in ...
Tuesday, 27 October 09
CHINA'S SEPT. COAL IMPORTS RISE AS ECONOMY RECOVERS
Bloomberg reported that, China, the world’s largest coal user and producer, increased imports of the fuel in September to meet rising domest ...
Monday, 26 October 09
DARWIN EYES PRIVATE INVESTMENT
The Jakarta Post reported that, the new energy and ministerial resources minister, Darwin Zahedy Saleh, has set his sights on accelerating the reali ...
Sunday, 25 October 09
THE FUTURE FREIGHT MARKET IS EXPECTED TO HAVE POSITIVE DIRECTION - VISTAAR
COALspot.com (Singapore): According to Vistaar Shipping an experienced ship operator in Singapore, the BDI shot up this week (19-24 October) by abou ...
Saturday, 24 October 09
NTPC SEEKS ALTERNATE COAL SUPPLY FOR KAHALGAON
State-run NTPC is looking at alternate sources of coal to fire its Kahalgaon (Bihar) and Farakka (West Bengal) and power stations, which are facing ...
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- Global Coal Blending Company Limited - Australia
- Meralco Power Generation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Cement Manufacturers Association - India
- Wood Mackenzie - Singapore
- Indonesian Coal Mining Association
- Tamil Nadu electricity Board
- Romanian Commodities Exchange
- Ambuja Cements Ltd - India
- Vizag Seaport Private Limited - India
- Energy Development Corp, Philippines
- Oldendorff Carriers - Singapore
- Rio Tinto Coal - Australia
- Minerals Council of Australia
- ASAPP Information Group - India
- Australian Coal Association
- Star Paper Mills Limited - India
- Anglo American - United Kingdom
- Iligan Light & Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Kohat Cement Company Ltd. - Pakistan
- Essar Steel Hazira Ltd - India
- Wilmar Investment Holdings
- New Zealand Coal & Carbon
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Oil Corporation Limited
- Tata Chemicals Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- White Energy Company Limited
- Bukit Makmur.PT - Indonesia
- PowerSource Philippines DevCo
- Therma Luzon, Inc, Philippines
- Aditya Birla Group - India
- International Coal Ventures Pvt Ltd - India
- Videocon Industries ltd - India
- Planning Commission, India
- Bukit Asam (Persero) Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Ceylon Electricity Board - Sri Lanka
- GAC Shipping (India) Pvt Ltd
- GVK Power & Infra Limited - India
- Central Java Power - Indonesia
- PTC India Limited - India
- Gujarat Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Thiess Contractors Indonesia
- Central Electricity Authority - India
- Indogreen Group - Indonesia
- Kepco SPC Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Sojitz Corporation - Japan
- Toyota Tsusho Corporation, Japan
- Pendopo Energi Batubara - Indonesia
- Jindal Steel & Power Ltd - India
- Ministry of Transport, Egypt
- Holcim Trading Pte Ltd - Singapore
- Power Finance Corporation Ltd., India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Deloitte Consulting - India
- Bharathi Cement Corporation - India
- McConnell Dowell - Australia
- Sakthi Sugars Limited - India
- ICICI Bank Limited - India
- Kartika Selabumi Mining - Indonesia
- Barasentosa Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- Bhatia International Limited - India
- Binh Thuan Hamico - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- The University of Queensland
- London Commodity Brokers - England
- Kapuas Tunggal Persada - Indonesia
- Riau Bara Harum - Indonesia
- Indo Tambangraya Megah - Indonesia
- Edison Trading Spa - Italy
- Directorate Of Revenue Intelligence - India
- Vedanta Resources Plc - India
- Mercator Lines Limited - India
- IEA Clean Coal Centre - UK
- Semirara Mining and Power Corporation, Philippines
- Agrawal Coal Company - India
- Singapore Mercantile Exchange
- Kumho Petrochemical, South Korea
- Antam Resourcindo - Indonesia
- Eastern Coal Council - USA
- Latin American Coal - Colombia
- Formosa Plastics Group - Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Attock Cement Pakistan Limited
- Krishnapatnam Port Company Ltd. - India
- Leighton Contractors Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Interocean Group of Companies - India
- Billiton Holdings Pty Ltd - Australia
- Indian Energy Exchange, India
- Petron Corporation, Philippines
- Mintek Dendrill Indonesia
- Karbindo Abesyapradhi - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Coastal Gujarat Power Limited - India
- Bhushan Steel Limited - India
- Merrill Lynch Commodities Europe
- Xindia Steels Limited - India
- South Luzon Thermal Energy Corporation
- Samtan Co., Ltd - South Korea
- Borneo Indobara - Indonesia
- Semirara Mining Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Eastern Energy - Thailand
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- Parry Sugars Refinery, India
- Metalloyd Limited - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Heidelberg Cement - Germany
- MS Steel International - UAE
- SMG Consultants - Indonesia
- Orica Australia Pty. Ltd.
- Siam City Cement PLC, Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kalimantan Lumbung Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Larsen & Toubro Limited - India
- Uttam Galva Steels Limited - India
- Standard Chartered Bank - UAE
- Globalindo Alam Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- Electricity Authority, New Zealand
- Jaiprakash Power Ventures ltd
- Meenaskhi Energy Private Limited - India
- Chettinad Cement Corporation Ltd - India
- LBH Netherlands Bv - Netherlands
- Coalindo Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Intertek Mineral Services - Indonesia
- The Treasury - Australian Government
- Economic Council, Georgia
- GMR Energy Limited - India
- CNBM International Corporation - China
- Gujarat Sidhee Cement - India
- Marubeni Corporation - India
- Malabar Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Goldman Sachs - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhoruka Overseas - Indonesia
- Straits Asia Resources Limited - Singapore
- Madhucon Powers Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Karaikal Port Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Manunggal Multi Energi - Indonesia
- VISA Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Lanco Infratech Ltd - India
- Parliament of New Zealand
- Timah Investasi Mineral - Indoneisa
- Dalmia Cement Bharat India
- CIMB Investment Bank - Malaysia
- Australian Commodity Traders Exchange
- Baramulti Group, Indonesia
- Port Waratah Coal Services - Australia
- European Bulk Services B.V. - Netherlands
- Kideco Jaya Agung - Indonesia
- The State Trading Corporation of India Ltd
- Medco Energi Mining Internasional
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMC Global Power, Philippines
- Grasim Industreis Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Posco Energy - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement - Thailand
- Simpson Spence & Young - Indonesia
- Bangladesh Power Developement Board
- Georgia Ports Authority, United States
- Chamber of Mines of South Africa
- Bukit Baiduri Energy - Indonesia
- Electricity Generating Authority of Thailand
- AsiaOL BioFuels Corp., Philippines
- Carbofer General Trading SA - India
- Petrochimia International Co. Ltd.- Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Sical Logistics Limited - India
- Mjunction Services Limited - India
- IHS Mccloskey Coal Group - USA
- Makarim & Taira - Indonesia
- Sarangani Energy Corporation, Philippines
- Renaissance Capital - South Africa
- PNOC Exploration Corporation - Philippines
- Trasteel International SA, Italy
- Jorong Barutama Greston.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- TeaM Sual Corporation - Philippines
- Independent Power Producers Association of India
- Savvy Resources Ltd - HongKong
- Miang Besar Coal Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Sinarmas Energy and Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Indika Energy - Indonesia
- Coal and Oil Company - UAE
- San Jose City I Power Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- India Bulls Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Thai Mozambique Logistica
- TNB Fuel Sdn Bhd - Malaysia
- Kobexindo Tractors - Indoneisa
- Kaltim Prima Coal - Indonesia
- Ministry of Mines - Canada
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