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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, 08 October 09
MINING TO ATTRACT $6B: BKPM
The Jakarta Post reported that, Indonesia’s mining sector could expect investment of up to US$6 billion in the 2010-2012 period, in part becau ...
Thursday, 08 October 09
INDIA DEMAND TO HELP DIRE COAL OUTLOOK - MACQUARIE
Reuters reported that, Macquarie Securities said on Wednesday its bearish short-term outlook on thermal coal may begin improving in a year's time o ...
Thursday, 08 October 09
ESSAR UNIT WINS INR 479 CR (US$ 103,272,401) ORISSA PROJECT
The firm will develop and operate the terminal at Paradip port; the contract will stretch up to 30 years
Live Mint reported that, Essar Shipping ...
Wednesday, 07 October 09
ESSAR, JINDAL IN TAKEOVER TUSSLE FOR AUSTRALIAN COAL MINER
Reuters reported that, Privately owned Essar Group has launched a surprise A$144.2 million ($128.1 million) bid for Australian coal minnow Rocklands ...
Wednesday, 07 October 09
ADARO SECURES $500 M LOAN
The Jakarta Post reported that, The country's second largest coal producer, PT Adaro Energy announced on Wednesday that it has secured US$500 milli ...
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- Sindya Power Generating Company Private Ltd
- Lanco Infratech Ltd - India
- Therma Luzon, Inc, Philippines
- Merrill Lynch Commodities Europe
- Aboitiz Power Corporation - Philippines
- Kumho Petrochemical, South Korea
- Orica Mining Services - Indonesia
- Sical Logistics Limited - India
- Maheswari Brothers Coal Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Anglo American - United Kingdom
- Bangladesh Power Developement Board
- TeaM Sual Corporation - Philippines
- Star Paper Mills Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coalindo Energy - Indonesia
- Oldendorff Carriers - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Madhucon Powers Ltd - India
- ICICI Bank Limited - India
- Trasteel International SA, Italy
- International Coal Ventures Pvt Ltd - India
- Chamber of Mines of South Africa
- Globalindo Alam Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Economic Council, Georgia
- New Zealand Coal & Carbon
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- Aditya Birla Group - India
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- Australian Coal Association
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- Latin American Coal - Colombia
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- Ministry of Finance - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Business Power Corporation, Philippines
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- Metalloyd Limited - United Kingdom
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- Posco Energy - South Korea
- VISA Power Limited - India
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- Medco Energi Mining Internasional
- Australian Commodity Traders Exchange
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- Coal and Oil Company - UAE
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- OPG Power Generation Pvt Ltd - India
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- White Energy Company Limited
- Indian Energy Exchange, India
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- Rashtriya Ispat Nigam Limited - India
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- Electricity Authority, New Zealand
- Thiess Contractors Indonesia
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- Samtan Co., Ltd - South Korea
- Central Java Power - Indonesia
- Sakthi Sugars Limited - India
- Krishnapatnam Port Company Ltd. - India
- Global Green Power PLC Corporation, Philippines
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- The University of Queensland
- Bayan Resources Tbk. - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
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- San Jose City I Power Corp, Philippines
- Bhoruka Overseas - Indonesia
- Electricity Generating Authority of Thailand
- Bhatia International Limited - India
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- Kaltim Prima Coal - Indonesia
- Petron Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Ambuja Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- CNBM International Corporation - China
- Indonesian Coal Mining Association
- Port Waratah Coal Services - Australia
- Siam City Cement - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Sarangani Energy Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Xindia Steels Limited - India
- Thai Mozambique Logistica
- McConnell Dowell - Australia
- Bharathi Cement Corporation - India
- Commonwealth Bank - Australia
- Wood Mackenzie - Singapore
- ASAPP Information Group - India
- Borneo Indobara - Indonesia
- Semirara Mining Corp, Philippines
- Bhushan Steel Limited - India
- India Bulls Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Indika Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- PowerSource Philippines DevCo
- Straits Asia Resources Limited - Singapore
- Grasim Industreis Ltd - India
- London Commodity Brokers - England
- PTC India Limited - India
- Holcim Trading Pte Ltd - Singapore
- Antam Resourcindo - Indonesia
- Larsen & Toubro Limited - India
- Kobexindo Tractors - Indoneisa
- Makarim & Taira - Indonesia
- Vizag Seaport Private Limited - India
- MS Steel International - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Georgia Ports Authority, United States
- Jorong Barutama Greston.PT - Indonesia
- Standard Chartered Bank - UAE
- Planning Commission, India
- Singapore Mercantile Exchange
- Ministry of Transport, Egypt
- CIMB Investment Bank - Malaysia
- Sojitz Corporation - Japan
- Karaikal Port Pvt Ltd - India
- Independent Power Producers Association of India
- Salva Resources Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Uttam Galva Steels Limited - India
- Savvy Resources Ltd - HongKong
- IEA Clean Coal Centre - UK
- Malabar Cements Ltd - India
- Attock Cement Pakistan Limited
- Bulk Trading Sa - Switzerland
- Timah Investasi Mineral - Indoneisa
- Global Coal Blending Company Limited - Australia
- GAC Shipping (India) Pvt Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Minerals Council of Australia
- Asmin Koalindo Tuhup - Indonesia
- LBH Netherlands Bv - Netherlands
- Energy Link Ltd, New Zealand
- Africa Commodities Group - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Romanian Commodities Exchange
- Iligan Light & Power Inc, Philippines
- The Treasury - Australian Government
- Directorate General of MIneral and Coal - Indonesia
- Banpu Public Company Limited - Thailand
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement PLC, Thailand
- Semirara Mining and Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- Altura Mining Limited, Indonesia
- Eastern Coal Council - USA
- Sree Jayajothi Cements Limited - India
- Price Waterhouse Coopers - Russia
- Simpson Spence & Young - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bukit Baiduri Energy - Indonesia
- Ministry of Mines - Canada
- SMG Consultants - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Power Finance Corporation Ltd., India
- Parliament of New Zealand
- Wilmar Investment Holdings
- Videocon Industries ltd - India
- PNOC Exploration Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Goldman Sachs - Singapore
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- GVK Power & Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Australia Pty. Ltd.
- Indian Oil Corporation Limited
- Bukit Makmur.PT - Indonesia
- Carbofer General Trading SA - India
- The State Trading Corporation of India Ltd
- Kepco SPC Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Baramulti Group, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Tamil Nadu electricity Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Essar Steel Hazira Ltd - India
- IHS Mccloskey Coal Group - USA
- Riau Bara Harum - Indonesia
- Formosa Plastics Group - Taiwan
- SN Aboitiz Power Inc, Philippines
- Vedanta Resources Plc - India
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- Cement Manufacturers Association - India
- Interocean Group of Companies - India
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- European Bulk Services B.V. - Netherlands
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