Documente Academic
Documente Profesional
Documente Cultură
Rodrigo Echeverri
DEPARTMENT HEAD - REGIONAL MARKETING
PT ADARO INDONESIA
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The Future of Indonesia in the Asian Coal Market
Presentation Outline
3
The Future of Indonesia in the Asian Coal Market
Presentation Outline
4
China and Indonesia Coal Trade: 2008
Growing Together
(In Million Tonnes)
In 2008, China
imported almost as
CHINA EXPORTS much as it exported
7
China Coastal Demand
Domestic and Imported Coal in Coastal China
Since 2008, imports have
steadily gained market share in
China
The success of imports in the
Chinese coastal market is due to
their favorable delivered cost
compared to coals mined in
Shanxi, Shaanxi and Inner
Mongolia
Other origins have resorted to
sell off-Spec coals to the
Chinese market to be able to
compete with domestic Chinese
coals and Indonesian coals
Before 2014, due to
infrastructure constraints,
Chinese coal supply did not
grow at the same pace as
Source: WoodMackenzie, Coal Market Service, 2013 demand 8
China Production
Switching Basins in China
Before year 2000, coastal Chinese
power plants were designed
mainly for coals from old mines in
Shanxi and Shaanxi province
(typically 5000-5500 kcal/kg NAR
However, low mining costs and
significant resources have
motivated the development of
mega-mines in Inner Mongolia.
To support this development, the
Chinese government decided to
develop new railway links to
connect the coal producing
regions to coastal ports
The CV of coals from Inner
Mongolia is typically 4000-4800
Source: China Coal Resource, 2014; WoodMackenzie, Coal Market Service, 2013 NAR similar to the CV of
Indonesian coal
9
The Transition to Lower CV
Driven by the Chinese Domestic Market
8 Days
making coal imports from those
origins only arbitrage coals
Indonesia, on the other hand, has
South
secured a place as a base supplier Kalimantan
in spite of price movements
South
Africa Australia
12
China Coastal Demand
Production Costs in Indonesia
14
China and Indonesia Coal Trade: 2020
Growing Together The Challenges
(In Million Tonnes)
CHINA EXPORTS
Will China coal production capacity
CHINA IMPORTS continue to grow beyond the domestic
CHINA needs?
Will China ban certain
grades of coal? Will the government eliminate the
suggested cap in domestic production?
?
Will economics favor
Will China allow exports to grow again
domestic Chinese coal
again as infrastructure is
improved?
? in a bid to support local producers?
INDONESIA EXPORTS
Will China find a way to
Will the Indonesian Government allow
become less dependent on growth to continue at the same rate?
coal?
Will the International markets continue
Will China succeed in its
current coal to gas /liquids
to embrace Indonesian coal?
Will the Indonesian domestic market
?
development efforts? INDONESIA absorb the growth of Indonesia coal
production?
15
China Coal Market Projections
Fuel Mix - WoodMackenzie and IEA
In spite of using different sets of
assumptions, both IEA and
WoodMackenzie project similar
growth electricity capacity in
China
Both models coincide in
predicting limited development
in Nuclear Energy in China
Also, gas is a consensus point,
highlighting the challenge in
accessing domestic shale
deposits and the limited potential
A big unknown is to what extend
China will be successful in its
conversion of coal to liquids and
Source: WoodMackenzie, Coal Market Service, 2013
gas 16
China Coal Market Projections
Coal Demand Models for China
WoodMackenzie projects that coal demand in
China will grow by over one billion tonnes by
2020
The IEA New Policies model provides a forecast
which assumes many political and technical
challenges can be overcome
However, even in IEA New Policies scenario, coal
demand in China continues to grow steadily into
2020.
Hence, the range of forecasts for the additional
supply needed is very wide: 300 to 1000 million
tonnes of new production required by 2020
Forecasting where the coal is going to come
from is an even bigger challenge
Source: WoodMackenzie, Coal Market Service, 2013 However, in all cases Coal will remain the main
alternative and growth will continue at a strong
rate 17
China Coal Market Projections
Imports Projections
19
China Coal Demand
Coastal Coal-Fired Generation Growth
According to
WoodMackenzie,
coastal coal-fired
electricity generation
will continue to grow
at an average rate of
3% until 2020
We decided to study
the implication in coal
imports of assuming
lower average growth
in coastal coal-fired
generation capacity:
2% CAGR until 2020
Source: WoodMackenzie, Coal Market Service, 2013; China Coal Resource, 2014; Adaro Analysis 21
Coastal China Demand
Sensitivity with 2% CAGR
Some of the new power plants in
the south of China have been
designed for low-CV imported
coal, mainly from Indonesia
Indonesian coal will remain
extremely competitive, being able
to retain market share (or even
perhaps increase slightly)
The general decline in CV will also
increase the required traded
volumes of coal
We conclude that China will need
to import between 300 and 400
million tonnes of thermal coal by
2020
Source: WoodMackenzie, Coal Market Service, 2013; China Coal Resource, 2014; Adaro Analysis 22
The Future of Indonesia in the Asian Coal Market
Presentation Outline
23
Indonesia Coal Reserves and Resources 2013
Large and Accessible
3
2
4
1
However, the mines currently operating Current market conditions do not support
might plateau in 2-3 years, requiring the further project development
development of new projects
Market support will be required for the
Probable and Possible projects to come
online
Source: WoodMackenzie, Coal Supply Service, 2013 25
The Future of Indonesia in the Asian Coal Market
Presentation Outline
26
INDIA
Installed Capacity by Fuel
27
INDIA
Coal Supply: Domestic and Imports
WoodMackenzie expects that Indian domestic
production will reach more than one billion
tonnes by 2030, increasing more than 600
million tonnes from 2013 with 4.38% CAGR
(base year=2011).
However, in order to achieve that level of
domestic production, significant reforms will be
needed before the end of the current decade.
Social and political constrains might also limit
the upside of domestic production.
On the other hand, IEA New Policies Scenario
expects that India production will only grow
with 2.03% CAGR (base year=2011), which is
only half of WoodMackenzie growth forecast.
However, even if all plans come forward,
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SOUTHEAST ASIA COAL REQUIREMENTS FOR ELECTRICITY
Coal Demand by Country
Myanmar Vietnam
Southeast Asia is
expected to remain
one of the fastest-
growing regions in
Thailand Cambodia the world well into
Philippines
the next decade
Access to gas and
other resources is
Malaysia
and will continue to
be limited
The only country
Indonesia capable of producing
enough coal to
Imports support the
Domestic demands of the
region is Indonesia
Source: WoodMackenzie Energy Market Service, 2013; Adaro Analysis 30
SOUTHEAST ASIA COAL REQUIREMENTS FOR ELECTRICITY
Coal Demand by Country
Southeast Asian
Total countries (other than
361 MT Indonesia) will need to
import more than 130
million tonnes of coal
Total
212 MT by 2020
Indonesian domestic
demand will continue
to grow at a steady rate,
reaching over 130
million tonnes by 2020
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SUMMARY
Too much demand for Indonesian coal?
Probable Projects
Possible Projects
34
Our Model Introduction to Adaro
Pit-to-Port Integration
Domestic
supply
South
Kalimantan
35
Our Model Introduction to Adaro
Pit-to-Power Integration
PT Adaro Energy
Adaro Indonesia (AI) 100% Saptaindra 100% Maritim Barito 100% Makmur Sejahtera 100%
Coal mining, S Kalimantan Sejati (SIS) Perkasa (MBP) Wisesa (MSW)
Balangan 75% Coal mining and Coal barging and 2x30MW mine-
Coal mining, S Kalimantan hauling contractor shiploading operator mouth power plant
operation in
Harapan Bahtera
Mustika Indah Permai (MIP) Jasapower 100% 100% S Kalimantan
Internusa (HBI)
Coal mining, S Sumatra 75% Indonesia (JPI)
Third-party barging
Overburden crusher Bhimasena Power 34%
Bukit Enim Energi (BEE) and shiploading
and conveyor 2x1000MW power
Coal mining, S Sumatra 61% operator Sarana Daya 51.2% plant operator in
IndoMet Coal 25% Mandiri (SDM) Central Java
Project (IMC), BHP JV Channel dredging
Coal mining, C Kalimantan contractor South Kalimantan 65%
Power Project
Bhakti Energi Indonesia Bulk 100%
10.2% 2x100MW power
Persada (BEP) Terminal (IBT)
plant operator in
Coal mining, E Kalimantan Coal and fuel terminal
S Kalimantan
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Our Model Introduction to Adaro
Focus on Two Product Ranges
ENVIROCOAL SPECIFICATIONS
E5000 E4000
Unit
Typical Typical
Calorific Value NAR 4,600 kcal/kg 3,700 kcal/kg
Total Moisture ARB 28% - 30.0% 38.0% - 40.0%
Ash ADB 2% - 3% 3% - 4%
Sulphur ADB 0.15% - 0.25% 0.15% - 0.25%
Volatile Matter ADB 40.0% 40.0%
HGI - 45 65
Initial
Ash Fusion Temperature
deformation 1,150 1,150
(reducing atmosphere)
deg. C
37
Our Model Introduction to Adaro
Proven Track Record of Production Growth
2013 2012 2011 2010
Units Actual Actual Actual Actual
Production volume Mt 52.3 47.2 47.7 42.2
E5000 Mt 37 39.5 42.3 39.7
E4700 & E4900 Mt 8 n.a. n.a. n.a.
E4000 Mt 8 7.6 5.4 2.5
Strip ratio bcm/tonne 5.75 6.4 5.9 5.5
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The Future of Indonesia in the Asian Coal Market
Presentation Outline
39
The Future of Indonesia in the Asian Coal Market
Presentation Conclusions
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The Future of Indonesia in the Asian Coal Market
Presentation Conclusions
41