Indonesia may suffer US$8.3 billion of non oil and gas deficit with China in 11 months of 2013, but with India, Indonesia enjoyed trade surplus of US$8.37 billion. Indonesia’s non oil and gas export revenues from India even surpassed United States in November 2013, thanks to two main commodities: thermal coal and palm oi. It is in this context we need to monitor closely development of Indian investment in coal assets in Kalimantan and Sumatra.

India is already major player in Indonesian coal industry through Tata Power’s 30% ownership in Kaltim Prima Coal and Arutmin Indonesia. We also know that Tata Power holds 26% shares in Baramulti Suksessarana (BSSR). These investments give Tata Power access to substantial production and reserves.

Tata is the largest player from India in Indonesian coal industry, but clearly not alone. We have identified more than 20 major groups from the country here, while some others, including NTPC and Coal India Ltd are working on some acquisitions.

1/ ESSAR GROUP: Essar invested US$118 million to acquire Ares coal mine in East Kalimantan in 2010. The initial plan was to start commercial operation in July 2013 with annual production rate of 4 million tons per annum. Just a matter of when this company will source from its own coal reserves in Kalimantan…

2/ MONNET ISPAT: This company has completed acquisition of PT Sarwa Sembada Karya Bumi, which controls 25,000 hectares of coal concession in Jambi, Sumatra. The company is in the process of securing regulatory clearances to start commercial production with annual rate of 5 million tons of thermal coal.

3/ GMR INFRASTRUCTURE: This company holds 30% shares in PT Golden Energy Mines (GEMS) Tbk, a company controlled by Sinarmas Group, which gives access to more than 10 million tons per annum of thermal coal production. Other than that, GMR Infra also controls PT Barasentosa Lestari, which controls 25,000 hectares of coal concession in South Sumatra, with reserves of 700 milloion tons and annual production target of 1-5 million tons.

4/ ADANI GLOBAL: This company controls PT Lamindo Inter Multikon and PT Mitra Niaga Mulia with 2607 hectares of concessions in Bunyu Island, East Kalimantan. The concessions have combined reserves of 267 million tons. They produced 1 million tons per annum in 2008/09, 2.3 million tons in 2011/12 and 4 million tons in 2012/13.

5/ MERCATOR LINES: This company acquired Oorja coal mine in partnership with Mega Coal Indonesia in 2007. It has three producing mines with 1.5 million tons per annum of coal (5300-5500 Kcal/Kg). With reserves of 75 million tons, Mercator plans to boost production to 4 million tons in 2014.

6/ ARCHEAN GROUP: This company established PT Core Mineral Indonesia in 2004. It claims coal reserves of above 200 million tons with annual production of 3.6 million tons and target of 10 million tons per annum in 2013. It controls companies like PT Bara Kurnia Sakti (East Kalimantan), PT Core Mineral (Bengkulu), PT Kaltim Global (Bengkulu), and PT Sarolangun Bara Prima (Jambi).

7/ NMDC: This is reportedly the company planning to acquire PT Renuka Coalindo Tbk, which controls PT Jambi Prima Coal (JPC). JPC has JORC of 92 million tons with initial production target of 1.2 million tons per annum, scaled up to 4-5 million tons per annum.

8/ BAJAJ GROUP: Bajaj acquired PT Jankar Prima in 2010 with 4148 hectares of concession in South Barito, Kalimantan and coal reserves above 70 million tos of 5300-5800 Kcal. The company is currently in construction stage with initial production target of 3-4 million tons per annum.

Other Indian companies to watch are:

1/ NG Group of Companies: Acquired 15,000 hectares of concession in East Kalimantan in 2008 with target to produce 2 million tons per annum.

2/ Bhoruka Mines Ltd: East Kalimantan since 2008, producing 50,000 tons per month with target of 1 million tons per annum.

3/ Greta Group: Acquired 6097 hectares of thermal coal concession in PPU, East Kalimantan.

4/ Rohit Ferro-Tech Ltd: It controls PT Bara Prima Mandiri with coking coal asset in Central Kalimantan. First shipment was in November 2013 with target of 500,000 tons per annum.

5/ Simhapuri Energy Ltd (Madhucon Group): It has over 900 million tons of coal reserves in South Sumatra. Production plan is not clear.

6/ Sarda Energy & Minerals Ltd through Sarda Global Ventures Pte Ltd acquired coal mine in Indonesia in 2008 with initial production target of 2011. Status is not clear.

7/ Emmsons International; This company has two Indonesian subsidiaries PT Star Emmsons and PT Bara Energy Makmur Indonesia with production target to start in 2013/2014 financial year.

8/ Thriveni Resomin Pte Ltd: This company claimed to have started coal production in Jambi back in August 2010 with 1.5 million tons of output in 2012 and planned 3 million tons per annum in 2013.

9/ OTHERS: Apple Coal (4 million tons per annum?), Rena’sance Infracon (offtake with some IUPs), Siridi Sai Goodearth (9 coal concessions in Indonesia, 5100-7200 Kcal, more than 380 million tons of reserves), Punj Llloyd, Jindal Steel (SSG thermal coal and MBA coking coal with reserves of 250 million tons and 70 million tons respectively and output target of 5 million tons).

If all of these companies produce coal at the planned rates, India’s coal demand might in the future solely be supplied by Indian companies with coal concessions in Sumatra and Kalimantan. Lucky that companies like Aditya Birla (once tried to get into Bumi Resources), NALCO, Reliance Power, and Nava Bharat yet to find their ways into Indoensian coal assets.

DISCLAIMER: NO POSITION IN STOCKS MENTIONED IN THIS ARTICLE