Indonesia becomes China largest coal supplier

Wednesday, 02 Nov 2011

Indonesia has become China largest coal supplier with 6.6761 million tonnes of the fuel exported to China in September accounting for 34.92% of China total coal imports.

In the first three quarters of the current year, China imported a total of 42.7787 million tonnes of coal from Indonesia occupying 34.66% of China total coal imports.

Statistics also show that China coal imports stood at 19.12 million tonnes in September, the country highest monthly intake on record. The import volume from Australia was 3.4431 million tonnes taking up 18.01% of China’s total coal imports in the month, coal imports from Mongolia reached 2.3236 million tonnes accounting for 6.93%.

(source: steelhome)

Indonesia says Coal India to invest $3 bln in coal, steel

Apr 14, 2011 12:04pm GMT

* Feasibility study is expected to be concluded in June this year
* Coal India aims to invest in Central Kalimantan Province
* Coal India is looking to buy coking coal mine, build steel plant

JAKARTA, April 14 (Reuters) - Coal India , India's biggest coal producer, plans to invest up to $3 billlion in a coking coal mine, steel plant and a seaport on Indonesia's Kalimantan island, Agustin Teras Narang, the Central Kalimantan governor, said on Thursday.

Narang told Reuters on the sidelines of an infrastructure summit in Jakarta that Coal India was expected to complete feasibility studies in June in order to know what coal reserves they could develop.

"They (Coal India) will prepare all the funds for the projects," Narang said, adding that the parties had signed a preliminary agreement earlier this year.

However, the lack of a regulatory framework on land acquisition has made a lot of Indonesian projects uncertain, analysts and investors said during the three-day summit.

Central Kalimantan province has about 4.8 billion tonnes of coal reserves and coking coal is estimated to represent around 40 percent of that.
(Reporting by Fathiya Dahrul; Writing by Janeman Latul; Editing by Alan Raybould, sourced Thomson Reuters)

India second largest importers of Indonesian coal in 2010

Wednesday, 02 March 2011

Indonesia, the world largest coal exporter, shipped 24.68 million tons of coal in January 2011, which was 1.19 percent higher Y-o-Y but 10.84 percent lesser M-o-M. Indonesia has exported 284.83 million tons of coal including semi coking and LRC coal in year 2010, according to our source who is familiar with Indonesian coal exports.
Exports to China
January 2011 has witnessed a drop in Indonesia's coal exports to china by 43.63 percent compared to December 2010 exports. January exports of Indonesian coal to china amounted to 4.796 million tons as against 8.510 million tons in December 2010. Last year Chinese's utilities have imported more Indonesian coal than Indian Utilities. Out of Indonesian Coal Exports in 2010 China accounted for 74.570 million tons which is around 26.18 percent of the total coal exports.

India 2nd largest Importer
India became the second largest importer of Indonesian coal in 2010. 47.593 million tons of Indonesian coal has been imported both by government and private utilities of India in 2010. India’s January 2011 imports of Indonesian coal have jumped significantly. India has imported 6,099,932 MT of coal in January 2011 compared to just 3,885,454 MT in a month ago or 56.99 percent higher than December imports. In 2010 Indonesia has exported 16.70 percent of its total coal exports to India.

Top five Indonesian coal importers in 2010 were China, India, South Korea, Japan and Taiwan.

India reduces import duty for Indonesian coal
India has introduced special reduced rate of import duty for Indonesian coal since January 2011. Thereby Indonesian coal enjoys 2% cheaper import duty in India compared to other origins of coal. According to market players, Indonesian coal is subjected to a duty of 3 percent as against 5 percent for other origins of coal.

Indonesian coal traders must hold IUP OP KPP
Early January Indonesia has implemented temporary coal export ban on coal traders until 4th of February. After a month of ban, finally Indonesia has allowed few coal traders to resume coal exports. According to government officers, as of 18th February, Indonesia has issued 63 trading or export licenses to Indonesian coal trading companies. Still few hundreds of applications were in process with the mining department. This ban led to lower exports by around 10 percent compared to December 2010 exports.

Indonesian ban on coal below 5600 GAD by 2014
As per the news sources Indonesian government is contemplating a ban of coal with calorific value below 5600 Kcal/kg on GAD basis by 2014. In order to get export eligibility LRC coal producers asked to upgrade their coal to 5600 GAD or more. If not miners will have to depend on home market. This move of the Government makes the message clear that value added product should only be exported. This action encourages miners to establish additional facilities and generate additional employment or to sell the raw product within the country as more domestic consumption is predicted in the coming years. Export of Value added product enhances the inward remittances and fetches more taxes and revenue.

However, experts and some major stake holders are of the opinion that the proposed ban by 2014 may not be practical due to non availability of commercially viable upgrading and conversion technology at this moment. Also the infrastructure needed for this type of mammoth activity of beneficiation and upgrading of coal needs large sums of investments. According to industry sources, worldwide the upgrading technology is in the nascent stages and yet to be established. At this moment there is no proven technology is available to upgrade coal at a workable cost. Due to these reasons and also to protect the export income many big coal producers are lobbying with the Government to dilute the seriousness of the proposal.

Low calorific value coal accounts for almost 60% of the total Indonesian coal production or exports an exporter said. International coal prices are still at lower level and it will not be workable for upgraded coal to compete with coal that has been produced from other countries including new comers such as Mozambique and Mongolia. Once the logistical bottlenecks are cleared, these two countries become big competitors for other coal producing countries. In this context how the proposed ban on below 5600 GAD coal would take a shape is much crucial and an acid test for the Government to sustain the heavy pressure from LRC coal producers and also politically an important year due to Presidential/general elections.

Indian investment in LCV coal mines
According to industry sources, there was a spate of Indian companies’ investment in several low GCV coal mines in Indonesia with a motive of attaining fuel security. According to available data, more than two dozen Indian companies have already invested in coal mines in Indonesia and some of them are already in production. Majority of Indian investors in Indonesia were end-users and the purpose of investment was purely captive use. The reaction of this captive investor’s is yet to be seen if the bans seriously considered and implemented by 2014. In which case they might claim exemption for their captive usage in India or withdraw their existing investments and channelize the same to other upcoming promising destinations like Mongolia, Mozambique and Australia. One of the serious investor opined that in case such ban is inevitable the Indian investor arbitrage on the cost of upgradation Vs migrating to other viable destinations. However, one trend is clearly emerging that Indian coal mine investments abroad are seeing steady increase. The evidence of recent acquisition of Western Australia’s Griffin Coal Mines for a whopping US$ 750 Million by Lanco group or aggressive investments in Mozambique, South Africa and Queensland shows the urge of Indian industry main agenda of attaining a level of continuous and reliable coal supplies. Understand US coal started coming to India. One of the major cement plants in west coast India contracted for 7 shipments of high sulphur, high calorific value coal from US on CFR terms at much cheaper cost than Indonesia. According to a major power developer in India, majority of the Indian private power plants would start operating by end 2013, hence all the Indian industries are seriously scouting for acquiring mines abroad. In view of the current uncertainty of high calorific value coal mines availability in Indonesia and the threatening proposal of ban below 5600 gad coal making them to focus on other origin coals. Moving higher calorific value coals by capesize vessels are seen as the cheaper remedies to counter the vagaries of Indonesian low calorific value and high moisture coals with stringent regulations and threat of recurring Force Majors.

ICRP
Indonesia already successfully implemented monthly coal reference price for its coal. Coal producers were asked to comply with the government declared index prior to conclude any short term and long terms coal sales agreement with its buyers. Indonesian HBA have raised fifth straight month and it was at US$ 127.05 in February 2011.

Tags :import duty on coal by India, raw material, steel mills, power plant,

Churchill Mining receives significant interest, proposals to develop East Kutai Coal project -Proactive Investors

Monday, 21 February, 2011

Proactive Investors reported that, Churchill Mining has received a number of specific proposals to fund and develop its massive East Kutai coal project in Indonesia and that the interest in East Kutai is significant.

Some of these would allow Churchill to take full control of the project.

Initial proposals have ranged from an emphasis on direct entry into the project at the local Indonesian company level through to procuring a large stake in the company.

Certain potential investment partners have also proposed that the mining and infrastructure elements of the EKCP should be separated to be dealt with and funded on a separate basis.

In addition to that, a number of investors have expressed interest in either buying out the 25% of the project held by Churchill’s Indonesian partners or providing funding to Churchill to complete this action itself and bring the project under the company's sole control.

In all cases, prospective partners have been required to address their ability to fund the capital required to develop the project.

Churchill is currently examining three specific proposals from Indonesia, India and the Middle East, in which the acquisition of Ridlatama's 25% holding in the EKCP is an integral component.

The due diligence process being conducted by various potential investor partners is at different stages of completion.

Last month, Churchill confirmed that it was “discussing a variety of options to take the project forward” in response to media reports that it was in talks with several Indian power companies to sell the Indonesian coal project.

Northland Capital, Churchill’s nominated advisor (NOMAD) on the AIM market, confirmed that Churchill plans to sell and it is negotiating with Indian companies.

In September last year, the company and Ridlatama initiated an administrative review to further protect the legal standing of the four mining licenses which constitute East Kutai.

The review will address ongoing irregular actions and misrepresentations by third parties in Indonesia in respect to the mining licences for the East Kutai coal project.

Churchill reported that last Thursday, the regional administrative tribunal indicated that the results of this process in respect of the licenses held by the EKCP will be announced by mid-March 2011.

East Kutai is a world-class thermal coal deposit. It has a 961 million tonne JORC mining reserve and 2.73 billion tonnes of JORC resources. The sheer scale of the project is reflected by the US$1.2 billion (direct capital costs) needed to build the mine.

Once operational the proposed open pit would produce 30 million tonnes of high grade thermal coal each year, for an initial 25-year life. It would generate cashflow of US$500 million each year.

Churchill hired corporate heavyweight Credit Suisse back in April 2010 to complete a strategic review and help it evaluate the various options for East Kutai’s project financing.

Source: Proactive Investors (by Sergei Balashov)

Tags: Credit Suisse, project finance, open pit, large stake in the company, investment partner, EKCP, EOI, India, middle east

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Indonesian coal for Haryana Thermal plants

Feb15, 2011

To tide over the recurring coal shortage at thermal plants Haryana Power Generation Corporation Limited (HPGCL) has gone for Indonesian coal for its thermal plants in the state.

Punjab News Line reported that, according to official sources, HPGCL has placed an order for 1.45 million tones MT of imported coal on PEC Limited. The public sector company will supply the Indonesian coal for Khedar, Panipat and Yamunanagar thermal plants.FOB cost of imported coal is between 74.75 $ and 76.75$.The gross calorific value of imported coal will be around 6300. A senior official said that the HPGCL has saved in several crore on this particular imported coal order as other government companies had quoted much higher rate of 92$ per MT. The minimum saving per MT works out to be Rs. 750 (US$ 16.47).

Ministry of Power has given annual target of 1.45 million tons (MT) of coal imports for the current financial year. HPGCL has imported only 0.079 MT during the first five months of the year. According to Central Electricity Report coal shortage at Panipat is due to failure of HPGCL to import coal.

It may be mentioned that thermal plants in Haryana are getting coal ‘F’ grade coal with very high ash content. Due to poor coal quality the units at Khedar thermal plant were not able to achieve full load of 600 MW. To tide over the problem of high ash content HPGCL has place order on four different firms for supplying the washed coal to improve the power generation. These firms will get coal from Mahanadi coal fields and then wash the coal at washries before supplying to thermal plants.

The dwindling coal stock at thermal plants of state is a cause of worry. Today Khedar thermal plant and Panipat thermal plant have 10000 MT and 56000 MT of coal stock which is just sufficient for one and three days respectively. The coal stock comes under super critical position. Similarly Yamuna Nagar thermal has coal stock of 58000 MT just sufficient for six days. As per Central Electricity Authority parameters if coal stock is less than 7 days it comes under critical poison and if coal stock is less than 4 days it becomes super critical. The thermal plants are expected to keep a coal stock of 25 days for smooth running of units. (1 INR = 0.0219708 USD www.xe.com)

Source: Punjab News Line

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Indonesia may regulate price of coal sold to state utility PLN

Wed Feb 16, 2011 11:56am GMT

JAKARTA Feb 16 (Reuters) - Indonesia may regulate the price of coal sold to state utility firm PT Perusahaan Listrik Negara (PLN) if negotiations between the company and several coal producers fail to reach an agreement, the energy ministry told lawmakers in a report.

The ministry said that since November PLN has faced problems from coal suppliers asking for higher prices due to the increasing world prices caused by extreme cold weather and floods in Australia.

PLN has been negotiating prices with six companies and it expects to complete the talks by the end of this month. According to the ministry, PLN has not yet reached an agreement with PT Tambang Batubara Bukit Asam and Kaltim Prima Coal, a unit of top miner Bumi Resources .

"If agreement cannot be reached between PLN and these suppliers, we will recommend to issue a ministerial decree which will determine prices of coal sold to PLN," the ministry said in the report.

The ministry said the price would refer to the existing coal price benchmark issued monthly by the ministry, and would limit the increase in PLN's coal costs to not more than 2.13 trillion rupiah ($238.9 million) for this year.

PLN, the biggest domestic consumer of coal, estimates its coal-fired power plants will burn 52 million tonnes this year, up from 36 million tonnes in 2010.

For the monthly coal price benchmark in the world's largest exporter of thermal coal see . ($1 = 8914.5 Rupiah) (Reporting by Alfian; Editing by Neil Chatterjee,sourced:Thomson Reuters)

(sourced:Thomson Reuters)
Tags:Indonesia coal news, Indonesia coal policy, government regulating coal pricing, state coal utility, PT Perusahaan Listrik Negara(PLN), negotiations, coal producers in Indonesia, agreement, suppliers, Bumi Resources, PT Tambang Batubara Bukit Asam, Kaltim Prima Coal, Indonesia coal benchmark price, thermal coal prices,

Bayan Resources, Kangaroo Resources Ltd. extend due diligence

Tue,Feb08, 2011
Coal miner controlled by businessman Dato' Low Tuck Kwong PT Bayan Resources Tbk (BYAN) and Australia-listed coal company Kangaroo Resources Limited have agreed to extend a due diligence period to enable the accomplishment of small number of outstanding items, quoted by Insider Stories.

Insider Stories further reported, in an official statement obtained today, both companies initially set a 30 days of the due diligence on January 28 2011.
The extension won't delay the transaction's accomplishment. Both Bayan and Kangaroo are continuing to finalize independent experts' reviews on the assets, ahead of shareholder meetings to approve the transaction.
On December 28 2010, Bayan and Kangaroo Resources entered into a share purchase agreement.

Bayan will inject Kangaroo Resources with 9 coal concession assets in East Kalimantan with coal resources of 3.8 billion metric tons.
In return, Kangaroo Resources will issue new shares, enabling Bayan Resources to control Kangaroo Resources.

Bayan also entered into share sale and purchase agreements with three buyers PT Ilthabi Bara Utama, Prime Mine Resources Limited, Romo Nitiyudi Wachjo, on December 28 2010 to acquire 9 coal concession assets in East Kalimantan.
Tags: coal miner, PT Bayan Resources, Kangaroo Resources, agreed, diligence period, Australia coal news, Indonesia coal news, share purchase, agreement, East kalimantan, buyers, PT Ilthabi Bara Utama, Prime Mine Resources, Romo Nitiyudi Wacho

PUSTAKA JAYA PALU POWER LOOKING FOR 5800 GAD COAL

Feb08, 2011
According to market information, PT Pustaka Jaya Palu Power, a power plant operator of the Mpanau plant, Palu, Sulawesi has invited coal suppliers to supply 16,000 MT of coal with Calorific Value (GAD) 5,600 - 5,800 kcal/kg per month.

The tender has required suppliers to offer coal for the period of 2 to 5 years and the first shipment of coal should be delivered early April 2011 against this tender.
CCoW or IUP holders only allowed to participate in the tender and participants are required to submit their tender document on or before 21 February 2011 at 14:00 west Indonesia standard time.

The tender documents can be collected from PT Pustaka Jaya Palu Power, Rukan Artha Gading Niaga Blok H No. 23, Jl. Kelapa Gading Barat, Kelapa Gading, Jakarta Utara 14240 between 9 - 14 February 2011.
(sourced:coalspot)

Tags:PT Pustaka Jaya Palu Power, looking for coal suppliers, 5800 GAD coal, Mpanau plant, invited tender, offers, CCoW or IUP holders, Indonesia coal news, Indian steam coal traders, Indonesian Coal Mining Association

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R-POWER TO INVEST $5BN IN INDONESIA

Tuesday, 25 January 2011
The Times of India reported that, In what is being seen as one of the largest foreign investments in Indonesia, Reliance Power will infuse $5 billion (around Rs 22,000 crore) in two projects-one each in South Sumatra and Jambi provinces. The investment covers coal mining, setting up of railway lines, ports and power projects.

According to a senior company official, who did not wish to be identified, the project in South Sumatra involves development of a 2- billion MT coal mine, a 200-km railway line, a port and a 2,000-MW power project at a cost of $3.5 billion. The project in Jambi involves another coal mining unit, along with a port, railway line and a small power plant. It will cost $1.5 billion without the power project.

Reliance Coal Resources, a subsidiary of Reliance Power, will sign two MoUs with representatives of the governments of both the provinces in New Delhi on Tuesday. Reliance ADA Group chairman Anil Ambani and Indonesian President Susilo Bambang Yudhoyono are exected to be present during the occasion. Fiscal concessions, including land, are being offered to Reliance Power to make it attractive for them to invest in Indonesia, the official said. The investment for the development of the coal mine, rail & port infrastructure and the power project in Sumatra would be made in the next five years.

In 2010, Reliance Power's wholly owned subsidiary Reliance Coal Resources had acquired three coal mines owned by two companies PT Sriwijaya Bintang Tiga Energi and PT Brayan Bintang Tiga Energi in the South Sumatra province. The three mines are spread over 1,25,000 acres and have over 2 billion MT of coal. The Indonesian government is providing the other concessions as Reliance Power would develop the other projects associated with it which include the railway line, port and power.

Coal from these mines will be exported for Reliance Power's Krishnapatnam Ultra Mega Power Project in Andhra Pradesh. which is based on imported coal and also used for its 2000 mw project in Indonesia. These mines would ensure steady supply to the Krishnapatnam Project and also be more economical than other imported coal. Officials said talks are already on with banks to finance the first project in south Sumatra. Source: The Times of India

Indonesia coking coal miner Borneo's 2010 net profit at $177 mln

Fri Jan 21, 2011 10:59am GMT

JAKARTA Jan 21 (Reuters) - PT Borneo Lumbung Energi and Metal , Indonesia's only listed coking coal miner, reported 2010 full year net profit at $177 million with coal sales volume of 1.65 million tonnes, said Geroad Jusuf, the firm's corporate secretary, on Friday.
This was a turnaround from a 99.8 billion rupiah ($11 million) loss in 2009.
(Reporting by Fathiya Dahrul; Editing by Neil Chatterjee, sourced Reuters)