Straits Asia Resources (AJ1.SG) is off 1.6% at $2.48, extending decline from $2.80 December high, down 11.4% since then, hurt by investors’ concern over delays to obtaining permit for Northern Leases area of its Sebuku mine.

CIMB, which has Underperform rating, pushes back its entire production schedule for Northern Leases and now assumes the earliest production would start is FY12; other risks include limited reserves and execution risks.

But the house raises the target price to $2.27 from $2.01 on upgraded benchmark coal-price assumptions; says the outlook for the thermal coal market is underpinned by strong demand from China and India, driven by increased electricity demand and more coal-fired power plants coming onstream.

Kim Eng also cites SAR as a key beneficiary of expectations of robust Indonesia coal production growth, which industry watchers forecast at around 11%/annum in 2009-15.

Support tipped at $2.41 Nov. 18 low.