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Tuesday, 06 September 11
INDONESIAS PROPOSED COAL EXPORT BAN MAY HAVE IMPACT ON THE INDIAN POWER SECTOR - DIPESH DIPU
.jpg) COALspot.com - This is a special interview about Indonesian proposed coal export ban by 2014, with Mr. Dipesh Dipu, Director of Deloitte Touche Tohmatsu, India.
The Indonesian government is currently in the process of drafting a new regulation that could ban the export of low-grade coal by January 12, 2014. This is likely to apply to coal below 5700 kcal/kg on air dried basis in value.
As of now Indonesia is producing around 150 million tons of coal with calorific value below 5700 GAD (according to chairman of Indonesian coal mining association). However by 2014, there are possibilities the total production of below 5700 GAD coal may reach more than 200 million per annum.
Will Indonesian coal export ban impact on the Indian fuel requirements?
The earlier grade of coal that was being considered for proposed ban has GCV of 5100 kcal/kg of less (adb), which can be comparable to 3800-4200 kcal/kg (arb) domestic coal available in India. This grade of coal has found favor in India primarily due to likely price advantage but economics of power generation based on such grade of imported coal may be a suspect. This considering that such grades of coal from Indonesia typically have high moisture content, which makes transportation cost per unit of energy generated higher. The quantum of the low grade of coal (<5100 kcal/kg adb) procured from Indonesia is likely to remain relatively low.
However, if the new definition of low grade coal is applied (<5700 kcal/kg adb), it may be reasonable to believe that such a ban may have impact on the Indian power sector as volumes in this grade of coal are expected to rise in the proportion of coal exports to India. Several of the acquisitions made by Indian power generation companies in Indonesia have been in coal blocks that will produce coal of this grade, and a blanket ban on the exports can jeopardize power plant development in India.
On the other hand, the domestic Indonesian market may not be prepared to consume all the coal mined of this grade in view of the power generation capacity addition plans in Indonesia. In such a case, the coal mine development is likely to be deferred. The Indonesian law makers may need to reconsider domestic market demand, investment climate in coal sector and impact of the legislation on the export revenues.
What is the alternative source for Indian power industry if the proposed coal export ban come into effect by 2014?
Indian power generation companies have been forced to look out for coal assets abroad due to the investment and regulatory environment within the country. India boasts of more than 110 billion tonnes of coal reserves, which largely fall within a 300 meters of depth. If the regulatory and investment environment is amended to allow greater participation of private sector Indian dependence on imports will be reduced.
However, for imports, India will continue to look at Indonesia, South Africa, Australia and newer destinations like Mozambique and Columbia. But these sources also have constraints, domestic demands in South Africa is likely to restrict quantum jump in exports out of South Africa. Indonesia has also proposed domestic market obligations. Mozambique may have infrastructure constraints for large volumes of coal being transported from Tete province to ports of Maputo, Ncala or Beira. Australian coal is of high quality but may have higher costs of mining and transport.
What would be the additional cost if Indian consumers switch their sourcing origin from Indonesia?
Indonesia has competitive advantage due to its geographical closeness. However, on a per tonne basis, assuming comparable quality, costs of transport may make marginal difference when compared with South Africa and Mozambique.
When compared to Australian coal, due to the high quality, cost of energy may well be comparable even though shipping costs are higher. Between Indonesian coal (5500 kcal/kg adb priced at USD 90 per tonne) and Australian coal (6500 kcal/kg adb priced at USD 120 per tonne), indicative variable cost difference of power generation may be about Indian Rupees 0.20 to 0.30 per kWh (electricity unit) in favor of Indonesian coal.
Will it affect Indian economy growth or this coal export ban is ignorable as India can easily identify alternative sources of fuel?
The magnitude of growth in power generation in India will necessarily mean that coal will remain the mainstay. Natural gas has had issues of availability. Nuclear plant development is facing socio-political challenge in view of the risks of technology failure. Development of hydel power has also faced issues of land acquisition, rehabilitation & resettlement apart from the technical issues of hydro-geological features. Renewable sources such as solar and wind generation are still projected to constitute a small portion of India power generation mix. Identifying an alternative source that can match coal in its accessibility, availability and affordability in the context of scale of capacity addition required in India is a challenge.
What is the Indian government's role on this issue, whether government has to come out with the solution such as easing Indian mining and environment law, open up mining for foreigners, G2G arrangement, etc…?
There is a need to look at domestic sources with pro-active and constructive approach and make all necessary legal and statutory amendments that make the resources available and mineable. Easing the regulations may not be one of such measures but making those regulations work in sync with each other in a time bound and predictable manner must certainly be.
There is certainly a case for opening the domestic coal sector for private participation, including independent miners, and for foreign participation so that newer technology and enhanced scale of operations are implemented in India. The regulation also needs to permit risk capital to come in for prospecting and exploration.
For imports the G2G relations can be leveraged to secure coal assets. India has good relationship with Indonesia and has also signed a tax treaty with Mozambique in 2010 which will facilitate investments. Government may also engage with these countries to ease exports to India and extend fiscal support to coal mining companies investing in mining and associated infrastructure development.
About Dipesh Dipu
Dipesh Dipu works as Director with Deloitte Touche Tohmatsu India Pvt. Ltd in the Energy and Resources consulting practice of the firm and anchors the Firm’s initiative in the mining and metals sectors.
He is a mining engineering graduate from Indian School of Mines and is a Chartered Financial Analyst (CFA). He has also done executive program in business management from Indian Institute of Management Calcutta. Dipesh has recently been awarded the Abheraj Baldota Gold Medal for the Young Mining Engineer of the Year 2007 by the Mining Engineers’ Association of India in recognition of his contributions in the improvement of mining industry in India.
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Wednesday, 05 October 11
WITH CHINA ON HOLIDAY, DRY BULK MARKET REMAINS STAGNANT - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has remained to healthy levels after last month’s rally, but with China going on holiday this week, things are looking sta ...
Tuesday, 04 October 11
INDONESIA RAISES COAL BENCHMARK (HBA) FOR FIRST TIME IN 4 MONTHS
COALspot.com - Indonesia raised the monthly reference price for sales in October by 2.56 percent, the first increase since June.
The Ministry of ...
Tuesday, 04 October 11
COAL MINING GROUP WANTS EXPORT TAX, NOT EXCISE - JG
One of the leading English news paper in Indonesia, The Jakarta Globe reported that, the government shall reimpose a duty on coal exports, classifyi ...
Sunday, 02 October 11
INDIAN COAL IMPORTS PICKED UP - CAPT. REDDY
COALspot.com - The BDI dropped by 1 pct and Cape index dropped by 6 pct closing at 1,899 points and 3,136 points respectively. However all other seg ...
Saturday, 01 October 11
2012 TO BE ANOTHER CHALLENGING YEAR - CEO, REMI MARITIME
Shipowners are facing another challenging year in 2012 said Mr. Leonidas Polemis CEO of Remi Maritime Corporation, urging caution towards operating ...
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- IHS Mccloskey Coal Group - USA
- Posco Energy - South Korea
- Orica Mining Services - Indonesia
- Carbofer General Trading SA - India
- PNOC Exploration Corporation - Philippines
- The University of Queensland
- Tata Chemicals Ltd - India
- VISA Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Mines - Canada
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Attock Cement Pakistan Limited
- GVK Power & Infra Limited - India
- Renaissance Capital - South Africa
- Banpu Public Company Limited - Thailand
- Straits Asia Resources Limited - Singapore
- Baramulti Group, Indonesia
- Eastern Coal Council - USA
- Standard Chartered Bank - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Xindia Steels Limited - India
- Bharathi Cement Corporation - India
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indo Tambangraya Megah - Indonesia
- Cement Manufacturers Association - India
- Kapuas Tunggal Persada - Indonesia
- Global Business Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- MS Steel International - UAE
- Asmin Koalindo Tuhup - Indonesia
- Timah Investasi Mineral - Indoneisa
- Indogreen Group - Indonesia
- Orica Australia Pty. Ltd.
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vizag Seaport Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- European Bulk Services B.V. - Netherlands
- Indian Oil Corporation Limited
- Price Waterhouse Coopers - Russia
- Australian Coal Association
- Riau Bara Harum - Indonesia
- Georgia Ports Authority, United States
- Offshore Bulk Terminal Pte Ltd, Singapore
- Simpson Spence & Young - Indonesia
- PowerSource Philippines DevCo
- Merrill Lynch Commodities Europe
- Vedanta Resources Plc - India
- Kideco Jaya Agung - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Antam Resourcindo - Indonesia
- Wilmar Investment Holdings
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Finance - Indonesia
- Barasentosa Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Star Paper Mills Limited - India
- McConnell Dowell - Australia
- Metalloyd Limited - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Uttam Galva Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- Latin American Coal - Colombia
- Meralco Power Generation, Philippines
- Gujarat Sidhee Cement - India
- Ind-Barath Power Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Interocean Group of Companies - India
- Neyveli Lignite Corporation Ltd, - India
- Independent Power Producers Association of India
- New Zealand Coal & Carbon
- Parliament of New Zealand
- Kumho Petrochemical, South Korea
- Videocon Industries ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Commonwealth Bank - Australia
- Coastal Gujarat Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Anglo American - United Kingdom
- San Jose City I Power Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Makarim & Taira - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bukit Makmur.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Bhatia International Limited - India
- Parry Sugars Refinery, India
- Siam City Cement - Thailand
- Samtan Co., Ltd - South Korea
- Madhucon Powers Ltd - India
- Mjunction Services Limited - India
- Trasteel International SA, Italy
- Malabar Cements Ltd - India
- Central Electricity Authority - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Singapore Mercantile Exchange
- Rashtriya Ispat Nigam Limited - India
- Port Waratah Coal Services - Australia
- SMG Consultants - Indonesia
- ASAPP Information Group - India
- Essar Steel Hazira Ltd - India
- Maheswari Brothers Coal Limited - India
- Thai Mozambique Logistica
- Altura Mining Limited, Indonesia
- Siam City Cement PLC, Thailand
- Planning Commission, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Iligan Light & Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Gujarat Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- India Bulls Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Heidelberg Cement - Germany
- Global Green Power PLC Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Semirara Mining Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Larsen & Toubro Limited - India
- Oldendorff Carriers - Singapore
- OPG Power Generation Pvt Ltd - India
- Dalmia Cement Bharat India
- South Luzon Thermal Energy Corporation
- PTC India Limited - India
- Karaikal Port Pvt Ltd - India
- Bhushan Steel Limited - India
- Chamber of Mines of South Africa
- Wood Mackenzie - Singapore
- Sree Jayajothi Cements Limited - India
- The State Trading Corporation of India Ltd
- Chettinad Cement Corporation Ltd - India
- Mercuria Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Mercator Lines Limited - India
- Kartika Selabumi Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- Power Finance Corporation Ltd., India
- Electricity Authority, New Zealand
- Deloitte Consulting - India
- Directorate General of MIneral and Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Cigading International Bulk Terminal - Indonesia
- London Commodity Brokers - England
- Indian Energy Exchange, India
- Karbindo Abesyapradhi - Indoneisa
- Aboitiz Power Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Energy Link Ltd, New Zealand
- Borneo Indobara - Indonesia
- Formosa Plastics Group - Taiwan
- Sojitz Corporation - Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Minerals Council of Australia
- Romanian Commodities Exchange
- Globalindo Alam Lestari - Indonesia
- Eastern Energy - Thailand
- Grasim Industreis Ltd - India
- Bhoruka Overseas - Indonesia
- TeaM Sual Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Kepco SPC Power Corporation, Philippines
- Thiess Contractors Indonesia
- Manunggal Multi Energi - Indonesia
- Petron Corporation, Philippines
- The Treasury - Australian Government
- ICICI Bank Limited - India
- Mintek Dendrill Indonesia
- Medco Energi Mining Internasional
- Coalindo Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Economic Council, Georgia
- Coal and Oil Company - UAE
- GN Power Mariveles Coal Plant, Philippines
- White Energy Company Limited
- Therma Luzon, Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Indika Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Tamil Nadu electricity Board
- Sical Logistics Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Ambuja Cements Ltd - India
- Australian Commodity Traders Exchange
- Marubeni Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Pendopo Energi Batubara - Indonesia
- LBH Netherlands Bv - Netherlands
- Electricity Generating Authority of Thailand
- Gujarat Mineral Development Corp Ltd - India
- GMR Energy Limited - India
- Bangladesh Power Developement Board
- Central Java Power - Indonesia
- Energy Development Corp, Philippines
- Indonesian Coal Mining Association
- International Coal Ventures Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Aditya Birla Group - India
- Goldman Sachs - Singapore
- Agrawal Coal Company - India
- Kaltim Prima Coal - Indonesia
- Africa Commodities Group - South Africa
- Lanco Infratech Ltd - India
- Ministry of Transport, Egypt
- Jaiprakash Power Ventures ltd
- Salva Resources Pvt Ltd - India
- Sakthi Sugars Limited - India
- Binh Thuan Hamico - Vietnam
- CNBM International Corporation - China
- IEA Clean Coal Centre - UK
- SMC Global Power, Philippines
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