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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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Thursday, 09 September 10
DRY BULK MARKET IS LOOKING TO INCREASE GAINS ON OCTOBER IRON ORE CONTRACTS
The “success” story that the dry bulk market has been displaying during the past couple of weeks is being materialized as we head toward ...
Tuesday, 07 September 10
INDIA IMPORTS 1.63 MLN T OF COAL FOR THE PERIOD 30 AUGUST - 5 SEPTEMBER - SOURCES
COALspot.com: India has imported 1.07 million tons of power plant coal, 0.520 mln tons of coking coal and around 41,000 mt of Anthracite coal for th ...
Tuesday, 07 September 10
GOVERNMENT DECLARED INDONESIAN COAL PRICE REFERENCE DECLINE FOR THIRD-STRAIGHT MONTH
COALspot.com: Indonesian thermal coal price reference, a monthly benchmark price declared by Ministry of Energy and mineral resources of Repub ...
Tuesday, 07 September 10
MERCATOR TO BUY COAL MINE IN INDONESIA THIS FISCAL
Mercator Lines, India’s second-largest shipping company which has diversified into coal mining, will buy a coal mine in Indonesia with more th ...
Monday, 06 September 10
DRY BULK MARKET GAINS 6.05% ON WEEK, BOOSTED BY CAPESIZE VESSELS
The dry bulk market is looking to capitalize last week’s gains of more than 6 percent in this week, as the capesize segment seems to be on a h ...
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- Pendopo Energi Batubara - Indonesia
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- Standard Chartered Bank - UAE
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- Jindal Steel & Power Ltd - India
- Latin American Coal - Colombia
- Meralco Power Generation, Philippines
- Coal and Oil Company - UAE
- PNOC Exploration Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kideco Jaya Agung - Indonesia
- Kepco SPC Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Indo Tambangraya Megah - Indonesia
- Orica Mining Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Manunggal Multi Energi - Indonesia
- Planning Commission, India
- McConnell Dowell - Australia
- Global Green Power PLC Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Cement Manufacturers Association - India
- Mercuria Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Global Business Power Corporation, Philippines
- SMG Consultants - Indonesia
- The Treasury - Australian Government
- Port Waratah Coal Services - Australia
- New Zealand Coal & Carbon
- Bahari Cakrawala Sebuku - Indonesia
- Binh Thuan Hamico - Vietnam
- Wilmar Investment Holdings
- GMR Energy Limited - India
- Deloitte Consulting - India
- Anglo American - United Kingdom
- Mercator Lines Limited - India
- Alfred C Toepfer International GmbH - Germany
- Independent Power Producers Association of India
- Dalmia Cement Bharat India
- Samtan Co., Ltd - South Korea
- Directorate General of MIneral and Coal - Indonesia
- Edison Trading Spa - Italy
- Xindia Steels Limited - India
- San Jose City I Power Corp, Philippines
- Bhoruka Overseas - Indonesia
- Australian Commodity Traders Exchange
- Formosa Plastics Group - Taiwan
- Vizag Seaport Private Limited - India
- Simpson Spence & Young - Indonesia
- Romanian Commodities Exchange
- Bukit Baiduri Energy - Indonesia
- Thai Mozambique Logistica
- Kartika Selabumi Mining - Indonesia
- The State Trading Corporation of India Ltd
- Rashtriya Ispat Nigam Limited - India
- Parry Sugars Refinery, India
- Interocean Group of Companies - India
- Bulk Trading Sa - Switzerland
- GVK Power & Infra Limited - India
- Energy Development Corp, Philippines
- Wood Mackenzie - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ICICI Bank Limited - India
- Singapore Mercantile Exchange
- Heidelberg Cement - Germany
- Indogreen Group - Indonesia
- The University of Queensland
- GAC Shipping (India) Pvt Ltd
- Maheswari Brothers Coal Limited - India
- Gujarat Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Attock Cement Pakistan Limited
- Toyota Tsusho Corporation, Japan
- Trasteel International SA, Italy
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- Mintek Dendrill Indonesia
- PowerSource Philippines DevCo
- Marubeni Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Kalimantan Lumbung Energi - Indonesia
- Videocon Industries ltd - India
- Renaissance Capital - South Africa
- Indika Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Africa Commodities Group - South Africa
- Goldman Sachs - Singapore
- ASAPP Information Group - India
- Indian Energy Exchange, India
- Leighton Contractors Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- Sarangani Energy Corporation, Philippines
- Bhatia International Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Barasentosa Lestari - Indonesia
- Economic Council, Georgia
- VISA Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Metalloyd Limited - United Kingdom
- South Luzon Thermal Energy Corporation
- Petrochimia International Co. Ltd.- Taiwan
- MS Steel International - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Holcim Trading Pte Ltd - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Thiess Contractors Indonesia
- Semirara Mining and Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Ambuja Cements Ltd - India
- Savvy Resources Ltd - HongKong
- Globalindo Alam Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Makarim & Taira - Indonesia
- Riau Bara Harum - Indonesia
- Essar Steel Hazira Ltd - India
- Orica Australia Pty. Ltd.
- Coalindo Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Posco Energy - South Korea
- Energy Link Ltd, New Zealand
- Rio Tinto Coal - Australia
- Sakthi Sugars Limited - India
- Altura Mining Limited, Indonesia
- Siam City Cement PLC, Thailand
- Eastern Coal Council - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Uttam Galva Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Lanco Infratech Ltd - India
- Meenaskhi Energy Private Limited - India
- Price Waterhouse Coopers - Russia
- Miang Besar Coal Terminal - Indonesia
- Grasim Industreis Ltd - India
- Sindya Power Generating Company Private Ltd
- Tamil Nadu electricity Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Carbofer General Trading SA - India
- Maharashtra Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Gujarat Sidhee Cement - India
- Bhushan Steel Limited - India
- Bangladesh Power Developement Board
- Bukit Asam (Persero) Tbk - Indonesia
- Malabar Cements Ltd - India
- Petron Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- CNBM International Corporation - China
- Bharathi Cement Corporation - India
- Sical Logistics Limited - India
- Ceylon Electricity Board - Sri Lanka
- Kobexindo Tractors - Indoneisa
- Oldendorff Carriers - Singapore
- Minerals Council of Australia
- Aditya Birla Group - India
- Ministry of Transport, Egypt
- AsiaOL BioFuels Corp., Philippines
- White Energy Company Limited
- Kohat Cement Company Ltd. - Pakistan
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement - Thailand
- SMC Global Power, Philippines
- Aboitiz Power Corporation - Philippines
- Power Finance Corporation Ltd., India
- Indonesian Coal Mining Association
- Eastern Energy - Thailand
- India Bulls Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- PTC India Limited - India
- Georgia Ports Authority, United States
- Timah Investasi Mineral - Indoneisa
- Mjunction Services Limited - India
- Madhucon Powers Ltd - India
- IHS Mccloskey Coal Group - USA
- Central Electricity Authority - India
- Australian Coal Association
- Ministry of Finance - Indonesia
- Vedanta Resources Plc - India
- International Coal Ventures Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Indian Oil Corporation Limited
- Chamber of Mines of South Africa
- Parliament of New Zealand
- Sojitz Corporation - Japan
- Intertek Mineral Services - Indonesia
- Electricity Authority, New Zealand
- Borneo Indobara - Indonesia
- Jaiprakash Power Ventures ltd
- Semirara Mining Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Electricity Generating Authority of Thailand
- Antam Resourcindo - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Medco Energi Mining Internasional
- Straits Asia Resources Limited - Singapore
- European Bulk Services B.V. - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Ministry of Mines - Canada
- Commonwealth Bank - Australia
- Tata Chemicals Ltd - India
- TeaM Sual Corporation - Philippines
- Agrawal Coal Company - India
- Central Java Power - Indonesia
- CIMB Investment Bank - Malaysia
- SN Aboitiz Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Banpu Public Company Limited - Thailand
- Merrill Lynch Commodities Europe
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