• 5 minutes Trump vs. MbS
  • 9 minutes Saudis Threaten Retaliation If Sanctions are Imposed
  • 15 minutes Can the World Survive without Saudi Oil?
  • 7 mins WTI @ $75.75, headed for $64 - 67
  • 1 hour EU to Splash Billions on Battery Factories
  • 1 hour US top CEO's are spending their own money on the midterm elections
  • 9 hours Petrol versus EV
  • 18 mins The Dirt on Clean Electric Cars
  • 46 mins The Balkans Are Coming Apart at the Seams Again
  • 3 hours OPEC Is Struggling To Deliver On Increased Output Pledge
  • 6 hours 10 Incredible Facts about U.S. LNG
  • 4 hours U.N. About Climate Change: World Must Take 'Unprecedented' Steps To Avert Worst Effects
  • 14 hours E-mopeds
  • 3 hours Uber IPO Proposals Value Company at $120 Billion
  • 1 hour A $2 Trillion Saudi Aramco IPO Keeps Getting Less Realistic
  • 1 day These are the world’s most competitive economies: US No. 1
  • 1 day The end of "King Coal" in the Wales
Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Trending Discussions

The Rush for Coal: Are Price Increases Coming

I've been talking a lot about coal lately.

Specifically, how India's need for thermal coal imports is going to tighten this market, both in terms of prices, and bids for coal deposits within shipping distance of Asia.

India simply doesn't have enough coal. As of yesterday, one-third of the nation's coal-fired power plants were running at "critical" levels of coal stocks (meaning less than seven days of supply). And 10% are at "super-critical", with less than four days of stock.

I've been on this theme for about six months. And finally some of the signs of India's "dash for coal" are starting to appear.

First, buy-outs of coal deposits. Last week, Canadian-listed coal developer CIC Energy received a $400 million takeover offer from a "multi-billion dollar Indian conglomerate". CIC is moving forward the Mmambula coal field in southeastern Botswana (thanks for the heads-up, Saee).

India is even getting active in the junior side of the coal business. This week India's Bhushan Steel announced its intent to buy a stake in Bowen Energy, an Australian coal explorer and developer with projects in the Bowen Basin.

Then there's the signals from the coal market itself. This week, the chairman of the Indonesian Coal Mining Association told attendees at the Coaltrans Upgrading Coal Forum in Jakarta that India will pass Japan as Indonesia's biggest coal export customer by 2011.

"In the past, India only bought high-quality coal, but now they started buying a lot of low-rank coal also because of an increase in domestic consumption," chairman Bob Kamandanu said. He predicted India's coal imports from Indonesia will rise to 70 million tonnes, up from 40 million tonnes this year.

In addition, Bloomberg reported this week that traders handling Richards Bay, the biggest export port for South African coal, believe rising demand from India could push coal prices at this locale to a two-year high.

The piece also quoted T.K. Chatterjee, procurement manager at Indian power major NTPC, as saying, "India will be importing in a big way... This will lead to an increase in prices."

By. Dave Forest of Notela Resources


x


Back to homepage

Trending Discussions


Leave a comment
  • Anonymous on September 24 2010 said:
    The levels are dire. I have seen it first hand myself. India have had opportunities to buy for some time now, but seem to have hessitated. This has been there main mistake. They will never really sort out their internal issues for local coal deposits for ages. They need a heavy block of coal rapidly, but the 2013+ forecasts are dire. The only near term producer that could cool the gapping ucler. The only real one with major potential I see is Churchill Mining / PT Coal Development group. At 35m tonnes that will give them something to chew on. Even that will take a couple of years. They really need to BUY and stop WATCHING. Nice article

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News