Peabody opens office in Balikpapan

Saturday, 14 Jan 2012

Peabody Energy announced the opening of an office in Balikpapan, Indonesia a seaport city in the East Kalimantan province. The move further expands the company’s presence in the world’s largest supplier of seaborne thermal coal.

Peabody Balikpapan office complements ongoing sourcing and business development activities in Indonesia and supports an office in the capital city of Jakarta. Indonesia is the fastest-growing supplier of thermal coal to both China and India and Peabody is positioning itself to assist local suppliers in moving Indonesian coal throughout the Pacific Rim. The company has secured multiple term offtake agreements from resource-rich East Kalimantan.

Mr Yosef Setiyawan Director of Engineering Indonesia will lead the office and has responsibility for supporting business development and structured transactions. Setiyawan brings extensive experience in mining engineering, technical services and business development from his tenure at BHP Billiton in Australia and Indonesia. He reports to Mr Keith Downham Vice President of Resource Development Indonesia.

US$ 8 billion worth of infrastructure projects in pipeline in Indonesia -Wood Mackenzie

Tuesday, March08, 2011

India’s Increasing Demand for Thermal Coal cannot be satisfied without emerging coal areas in Indonesia - Wood Mackenzie

At Coaltrans India 2011 in New Delhi today, Wood Mackenzie says that emerging coal supply areas in Indonesia will be instrumental to meeting rapidly growing coal demand from India.

Drawing on information contained within Wood Mackenzie’s Coal Supply Service and Global Cost and Margin Tool, Presenter and Coal Research Analyst, Rohan Kendall said, “Indonesia will account for 40 percent of growth in seaborne thermal coal supply over the next ten years, with the emerging coal areas of the South Sumatra basin and Wahau coal field making an important contribution to this growth. There is US$8 billion of infrastructure projects in the pipeline in these emerging areas that will support export growth.”

Emerging coal regions are a good fit for developing economies, such as India, because the basins contain abundant reserves. These areas are experiencing upstream investment as Indian power generators such as Reliance and Adani look to secure coal supplies for new power stations. There are currently several ultra-mega power plants being built in India with a capacity of over 4,000 Megawatts each; and still more are planned. The projects currently in development are similar in capacity to those in China and are expected to be operational between the second half of 2011 and 2014.

Kendall expands, “Coal production costs are low in emerging basins in Indonesia, which is why they are attractive to Indian power generators. The costs of investing upstream to secure coal requirements are much lower than Indian power generators would otherwise pay if they were to purchase all of their coal on the seaborne market. Also, for power stations that are being built on the coast, it is more realistic to seek seaborne supplies which do not depend on India’s rail network for transport.”

Wood Mackenzie says in order for emerging thermal coal supply areas to fulfil their potential, infrastructure challenges need to be overcome. Kendall says, “There is currently insufficient infrastructure in these areas to support large scale coal exports. There are numerous projects proposed which combined would add 140 million tons per annum (Mtpa) of capacity. We believe that some of these are unlikely to progress given regulatory challenges.”

In summary, coal supplies from emerging basins in Indonesia are expected to increase strongly over the next ten years. The large reserves in these areas will be instrumental to meeting India’s future thermal coal requirements. Coal from emerging areas is cost competitive with established basins but the main question remaining is when and how the infrastructure issues can be overcome to bring the coal to market.

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Tags : Indonesian coal traders, suppliers, exporters, miners

Arch to export coal through British Columbia port

By: Liezel Hill, 19th January 2011
TORONTO (miningweekly.com) – NYSE-listed Arch Coal has signed a five-year agreement with Canada's Ridley Terminals, which will allow Arch to export coal through the bulk-commodity marine terminal near Prince Rupert, in British Columbia.
Arch is looking for ways to increase exports to Asian markets, and announced last week it had bought a 38% interest in a brownfields coal-export port facility project, on the Columbia River in Washington.
The deal with Ridley will give Arch throughput capacity at the terminal of up to two-million tons of coal for 2011, and up to 2,5-million tons for 2012 to 2015.
"This transaction is another important step in accomplishing our strategic objective of expanding Powder River Basin coal sales into the Asia-Pacific region," chairperson and CEO Steven Leer said in a statement.
"This throughput agreement gives us direct, immediate access to the growing seaborne thermal market. It also complements our recently announced investment in the Millennium Bulk Terminal in Longview, Washington, and other continuing terminal negotiations."
Edited by: Liezel Hill