I believe that this investment by Vallar Cash Shell should put them in excellent positioning heading into the next decade and beyond. Vassar, or PT Bumi Resources, is not only the world’s largest steam coal exporter, but it also will have the greatest access to asia’s developing markets, specifically China. According to the EIA, China is the world’s largest coal consumer and I believe is likely to continue to buy coal as they develop there infrastructure and economy. I think that as a result of this and the various other developing countries in Asia including India, Vietnam and Singapore that PT Bumi Resources will be a good stock to invest in, in the long term as its profit margins will rise significantly due to the high demand it will receive from countries neighboring Indonesia. In addition PT Bumi Resouces will have low interest costs, as it has better access to the world’s capital markets than its competitors since PT Bumi is a London listed company. From a regional perspective in Indonesia and Southeast Asia it will be intriguing to see how the newly formed PT Bumi Resources will affect the coal market.
Sources: http://http://online.wsj.com/article/SB10001424052748704312504575618771973862424.html?mod=WSJ_Energy_leftHeadlines
http://http://www.eia.doe.gov/cabs/China/Coal.html
I agree that having access to a market as big as China's is a great asset to have. Although, I am not too sure China will continue its mammoth increase in coal usage over the next several decades. While its economy is likely to continue to grow at a blistering pace, its use of coal is actually expected to slow and then peak at around 2020. This is due to China's commitment to limiting its carbon footprint even as its economy is still developing. While the US may also be pledging to limit its carbon footprint, it will certainly not have the same state-instituted limitations on carbon emissions as are possible in China, where their communist government has much greater control over such matters—and for that matter—all matters.
ReplyDeletehttp://www.chinafaqs.org/blog-posts/experts-weigh-future-coal-use-china