Sunday, 11 Sept 2011
It is reported that a ban on the export of lower quality coal in Indonesia, the world’s top thermal coal exporter, could open a window of opportunity for South African producers.
Investment bank Dahlman, Rose & Company in a report stated that the Energy and Mineral Resources Ministry of Indonesia has drafted a decree, which would affect coal with a heating content below 5700 kilocalorie per kilogram or roughly 10,300 British thermal unit per pound.
Indonesia is the largest seller to both China and India, two of the world’s fastest growing economies. Should the decree pass, Dahlman, Rose & Company said it expected South African coal to be bid away to Asia even more, which could increase the price in the Atlantic basin and benefit exporters from both the Appalachian and Illinois basin regions.
South Africa based XMP Consulting senior coal analyst Mr Xavier Prevost said that the opportunity for South Africa would be to leverage on the gap in the market created by the possible ban.
Notwithstanding that South Africa had good export markets, he said that the country had to overcome many bottlenecks affecting its coal industry.
Mr Prevost called for improvement in the country’s rail capacity and for investment in new coal projects. Coal exporters have been eager to send more coal abroad to meet the rising demand from Asia, but have been hampered by infrastructure bottlenecks.
(sourced from GannoDiamond)
It is reported that a ban on the export of lower quality coal in Indonesia, the world’s top thermal coal exporter, could open a window of opportunity for South African producers.
Investment bank Dahlman, Rose & Company in a report stated that the Energy and Mineral Resources Ministry of Indonesia has drafted a decree, which would affect coal with a heating content below 5700 kilocalorie per kilogram or roughly 10,300 British thermal unit per pound.
Indonesia is the largest seller to both China and India, two of the world’s fastest growing economies. Should the decree pass, Dahlman, Rose & Company said it expected South African coal to be bid away to Asia even more, which could increase the price in the Atlantic basin and benefit exporters from both the Appalachian and Illinois basin regions.
South Africa based XMP Consulting senior coal analyst Mr Xavier Prevost said that the opportunity for South Africa would be to leverage on the gap in the market created by the possible ban.
Notwithstanding that South Africa had good export markets, he said that the country had to overcome many bottlenecks affecting its coal industry.
Mr Prevost called for improvement in the country’s rail capacity and for investment in new coal projects. Coal exporters have been eager to send more coal abroad to meet the rising demand from Asia, but have been hampered by infrastructure bottlenecks.
(sourced from GannoDiamond)
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