McCloskey director of finance and consultancy services Colin Gubbins said that coal demand in Asia would continue to increase over the 13 years up to 2020 due to an increase in coal usage in most Asian countries, including India, China, and South Korea.
India’s coal imports were projected to increase by almost sixfold to 29 million tons this year from 5 million tons in 2006.
The opening of new power stations in South Korea would also drive demand, which is expected to increase to 64 million tons this year from only five million tons in 2006. Malaysia will also increase its imports to 14 million tons in 2007 from 1.5 million tons the year before.
Gubbins said that another important factor that would strengthen Indonesia’s position as Asia’s largest coal exporter, and which is believed to have estimated coal deposits of around 63 billion tons, was the fact that China, also one of the world’s major coal producers, would further cut its coal exports.
China, he said, would actually increase its coal imports to meet supply shortages in the domestic market following the closure of many mines and the reduction in coal supplies from Vietnam.
In order to be able to benefit from the opportunities, the Indonesian government should strive to increase production by offering investors a more attractive mining policy, he said.
Indonesia, the world’s largest coal exporter, is expected to produce 183 million tons of coal this year, about 134 million tons of which would be exported. Next year, production is projected to increase to 198 million tons, about 145 million of which will be exported.
Based on government estimates, total coal production will reach 320 million tons in 2020, 170 million tons of which will be allocated for domestic use, while the remaining 150 million tons will be exported.
In 2025, coal production is expected to increase to 370 million tons, of which about 220 million tons will be allocated for domestic use.
Bambang Setiawan, director for coal mining supervision at the Energy and Mineral Resources Ministry, said that the increase in the allocation of coal for the domestic market would not really affect the country’s coal export plan as the surge in local demand could be filled by lower grade coal.
The opening of many coal-fired power plants currently being built or planned under the government’s fast-track program to provide an additional 10,000 MW of power supply over three years was expected to increase coal demand on the domestic market by 45 million tons, mostly lower grade coal, by 2010, Bambang said.
No wonder TRI-STATE Capital (TSC) upgraded their equity rating on KALG!
This upgrade makes perfect sense.
Contact Info
KAL Energy, Inc.
93-95 Gloucester Place
London, W1U 6JQ
United Kingdom
Phone: +44 20 7487 8426
Fax: +44 20 7691 9725 (direct)
Email:
a.caminschi@mininghouse.com
KAL Energy Inc. (OTCBB: KALG), through its wholly owned subsidiary Thatcher Mining Pte., has the rights to two coal concessions situated near the Mahakam River in North Eastern Kalimantan, Indonesia. This river is a main transportation system for transporting coal to nearby markets. Consulting Geologist, Jonathan O’Dell, has estimated that blocks 16 & 24 could contain over 192,000,000 tons of thermal coal. Today Indonesia is the leading exporter of thermal coal and export prices vary from $30.00 to $60.00 plus per ton. This region has been an active coal exporter since the 1990s, and in 2004 Indonesia passed Australia as the largest exporter of thermal coal. Governmental signing was achieved on Sep. 14th, 2006. Title & Ownership structure has been extensively reviewed by HHP, the in-country affiliate of Baker & McKenzie International.
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