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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, 22 October 09
2ND UNITED INDONESIA CABINET UNVEILED
The Jakarta Post reported that, President Susilo Bambang Yudhoyono announced his second United Indonesia Cabinet on Wednesday night, comprising 34 m ...
Thursday, 22 October 09
PEABODY SET TO TAP ASIAN DEMAND FOR COAL
The Australian reported that, US coal giant Peabody Energy plans to double its Queensland and NSW coal exports in the next five years, as it looks t ...
Wednesday, 21 October 09
INDONESIA POWER FIRM SEEKS TO DEFER COAL SUPPLIES
Reuters reported that, Indonesia's state power firm is negotiating with two coal producers, including a unit of PT Bumi Resources Tbk, to defer a c ...
Wednesday, 21 October 09
MINING REGULATION GENERATES CONFUSION IN INDONESIA
The Jakarta Globe reported that, Mining industry representatives said on Friday they were confused by a recently issued regulation restricting the w ...
Wednesday, 21 October 09
LAW ACCOMMODATES NATIONAL AND INVESTOR INTERESTS
COALspot.com (Indonesia): According to ESDM, the government has issued five Lawson the energy and mineral resources sector. These laws will prioriti ...
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- Kumho Petrochemical, South Korea
- Jaiprakash Power Ventures ltd
- Madhucon Powers Ltd - India
- Wilmar Investment Holdings
- Miang Besar Coal Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Global Coal Blending Company Limited - Australia
- Bangladesh Power Developement Board
- Leighton Contractors Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- Mintek Dendrill Indonesia
- Baramulti Group, Indonesia
- Coal and Oil Company - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Tata Chemicals Ltd - India
- Borneo Indobara - Indonesia
- Price Waterhouse Coopers - Russia
- Kideco Jaya Agung - Indonesia
- Kartika Selabumi Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Orica Australia Pty. Ltd.
- Sical Logistics Limited - India
- Grasim Industreis Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Simpson Spence & Young - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement PLC, Thailand
- Dalmia Cement Bharat India
- Global Green Power PLC Corporation, Philippines
- Orica Mining Services - Indonesia
- Standard Chartered Bank - UAE
- Siam City Cement - Thailand
- Electricity Generating Authority of Thailand
- Indonesian Coal Mining Association
- Eastern Coal Council - USA
- PetroVietnam Power Coal Import and Supply Company
- New Zealand Coal & Carbon
- Port Waratah Coal Services - Australia
- Uttam Galva Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- The Treasury - Australian Government
- Meralco Power Generation, Philippines
- Attock Cement Pakistan Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thai Mozambique Logistica
- Vedanta Resources Plc - India
- Riau Bara Harum - Indonesia
- Rio Tinto Coal - Australia
- Independent Power Producers Association of India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Merrill Lynch Commodities Europe
- Mercator Lines Limited - India
- Bharathi Cement Corporation - India
- Xindia Steels Limited - India
- Bulk Trading Sa - Switzerland
- Chettinad Cement Corporation Ltd - India
- SMG Consultants - Indonesia
- Kaltim Prima Coal - Indonesia
- Posco Energy - South Korea
- Essar Steel Hazira Ltd - India
- Georgia Ports Authority, United States
- Karaikal Port Pvt Ltd - India
- Renaissance Capital - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Interocean Group of Companies - India
- Meenaskhi Energy Private Limited - India
- Carbofer General Trading SA - India
- Parliament of New Zealand
- South Luzon Thermal Energy Corporation
- Savvy Resources Ltd - HongKong
- Krishnapatnam Port Company Ltd. - India
- GVK Power & Infra Limited - India
- San Jose City I Power Corp, Philippines
- Commonwealth Bank - Australia
- Bhushan Steel Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- Latin American Coal - Colombia
- MS Steel International - UAE
- Bhoruka Overseas - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- GAC Shipping (India) Pvt Ltd
- PowerSource Philippines DevCo
- TeaM Sual Corporation - Philippines
- ASAPP Information Group - India
- Aboitiz Power Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- Heidelberg Cement - Germany
- Mercuria Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Minerals Council of Australia
- Therma Luzon, Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Petron Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kapuas Tunggal Persada - Indonesia
- Marubeni Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Sakthi Sugars Limited - India
- Romanian Commodities Exchange
- Semirara Mining and Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Anglo American - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Lanco Infratech Ltd - India
- CNBM International Corporation - China
- Rashtriya Ispat Nigam Limited - India
- Straits Asia Resources Limited - Singapore
- Power Finance Corporation Ltd., India
- Thiess Contractors Indonesia
- Central Java Power - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- Ministry of Mines - Canada
- Offshore Bulk Terminal Pte Ltd, Singapore
- Videocon Industries ltd - India
- International Coal Ventures Pvt Ltd - India
- ICICI Bank Limited - India
- Goldman Sachs - Singapore
- Iligan Light & Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Energy Development Corp, Philippines
- Tamil Nadu electricity Board
- Parry Sugars Refinery, India
- Indian Oil Corporation Limited
- White Energy Company Limited
- Gujarat Sidhee Cement - India
- Globalindo Alam Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Trasteel International SA, Italy
- AsiaOL BioFuels Corp., Philippines
- Medco Energi Mining Internasional
- Vijayanagar Sugar Pvt Ltd - India
- Agrawal Coal Company - India
- Larsen & Toubro Limited - India
- Malabar Cements Ltd - India
- Central Electricity Authority - India
- Formosa Plastics Group - Taiwan
- Ministry of Finance - Indonesia
- Bukit Baiduri Energy - Indonesia
- Electricity Authority, New Zealand
- Ambuja Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Australian Commodity Traders Exchange
- Makarim & Taira - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Indika Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- India Bulls Power Limited - India
- Binh Thuan Hamico - Vietnam
- Gujarat Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Manunggal Multi Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Indian Energy Exchange, India
- Energy Link Ltd, New Zealand
- IHS Mccloskey Coal Group - USA
- Cement Manufacturers Association - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Energy - Thailand
- Vizag Seaport Private Limited - India
- CIMB Investment Bank - Malaysia
- Star Paper Mills Limited - India
- LBH Netherlands Bv - Netherlands
- Salva Resources Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Antam Resourcindo - Indonesia
- GMR Energy Limited - India
- IEA Clean Coal Centre - UK
- Australian Coal Association
- Pendopo Energi Batubara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bhatia International Limited - India
- Altura Mining Limited, Indonesia
- Sree Jayajothi Cements Limited - India
- Africa Commodities Group - South Africa
- Aditya Birla Group - India
- Ministry of Transport, Egypt
- Planning Commission, India
- VISA Power Limited - India
- SMC Global Power, Philippines
- Samtan Co., Ltd - South Korea
- Singapore Mercantile Exchange
- Chamber of Mines of South Africa
- Metalloyd Limited - United Kingdom
- Deloitte Consulting - India
- Intertek Mineral Services - Indonesia
- Mjunction Services Limited - India
- Jindal Steel & Power Ltd - India
- London Commodity Brokers - England
- Alfred C Toepfer International GmbH - Germany
- Petrochimia International Co. Ltd.- Taiwan
- Indogreen Group - Indonesia
- Coastal Gujarat Power Limited - India
- The State Trading Corporation of India Ltd
- PNOC Exploration Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Directorate Of Revenue Intelligence - India
- Kobexindo Tractors - Indoneisa
- PTC India Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Wood Mackenzie - Singapore
- The University of Queensland
- Kalimantan Lumbung Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Gujarat Mineral Development Corp Ltd - India
- European Bulk Services B.V. - Netherlands
- Sojitz Corporation - Japan
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