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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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Saturday, 11 July 09
THE IMPORT OF STEAM COAL FROM INDONESIA & S/A TO INDIA WILL CONTINUE TO INCREASE - VISTAAR
COALspot.com ( Singapore): Vistaar Shipping, an experienced ship operator in Singapore said, The market continued to be soft this with doubts a ...
Friday, 10 July 09
DMO AND ICPR AIMED AT SECURING DOMESTIC COAL SUPPLY
COALspot.com (Indonesia): According to website of DGCMG, the implementation of coal Domestic Market Obligation (DMO) and the Indonesian Coal P ...
Friday, 10 July 09
INDONESIAN MINING LAW IN TRANSITION
Further to the enactment of Law No. 4 of 2009 on Mineral and Coal Mining (“Law 4/2009”), the enactment of various implementing regulatio ...
Thursday, 09 July 09
COAL EXPORTS TO CHINA MAY FALL AS PRICES, SHIPPING RATES RISE
CHINA'S appetite for Australian coal may fall in July and August from earlier highs, due to a recent recovery in regional prices and higher interna ...
Thursday, 09 July 09
GARDA LISTS SHARES IN LOCAL BOURSE
Local coal company PT Garda Tujuh Buana officially listed its shares in the Indonesia Stock Exchange (IDX).
The listing followed the company's p ...
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- Electricity Authority, New Zealand
- Kapuas Tunggal Persada - Indonesia
- PNOC Exploration Corporation - Philippines
- Sojitz Corporation - Japan
- South Luzon Thermal Energy Corporation
- Petron Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Borneo Indobara - Indonesia
- Chettinad Cement Corporation Ltd - India
- OPG Power Generation Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Price Waterhouse Coopers - Russia
- Minerals Council of Australia
- Wilmar Investment Holdings
- Siam City Cement - Thailand
- TeaM Sual Corporation - Philippines
- MS Steel International - UAE
- Mercuria Energy - Indonesia
- Anglo American - United Kingdom
- Larsen & Toubro Limited - India
- Tamil Nadu electricity Board
- ICICI Bank Limited - India
- Simpson Spence & Young - Indonesia
- Electricity Generating Authority of Thailand
- Metalloyd Limited - United Kingdom
- Interocean Group of Companies - India
- Singapore Mercantile Exchange
- Essar Steel Hazira Ltd - India
- GAC Shipping (India) Pvt Ltd
- Maheswari Brothers Coal Limited - India
- Bulk Trading Sa - Switzerland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Leighton Contractors Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Miang Besar Coal Terminal - Indonesia
- Cement Manufacturers Association - India
- Bukit Makmur.PT - Indonesia
- Eastern Energy - Thailand
- Pendopo Energi Batubara - Indonesia
- Barasentosa Lestari - Indonesia
- Standard Chartered Bank - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Orica Mining Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining and Power Corporation, Philippines
- SMC Global Power, Philippines
- Coastal Gujarat Power Limited - India
- Meenaskhi Energy Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Parliament of New Zealand
- Bangladesh Power Developement Board
- Carbofer General Trading SA - India
- Thai Mozambique Logistica
- Vedanta Resources Plc - India
- Port Waratah Coal Services - Australia
- Mercator Lines Limited - India
- New Zealand Coal & Carbon
- Uttam Galva Steels Limited - India
- Madhucon Powers Ltd - India
- London Commodity Brokers - England
- Planning Commission, India
- Cigading International Bulk Terminal - Indonesia
- Ministry of Finance - Indonesia
- Makarim & Taira - Indonesia
- Energy Link Ltd, New Zealand
- Sical Logistics Limited - India
- Sinarmas Energy and Mining - Indonesia
- Goldman Sachs - Singapore
- Samtan Co., Ltd - South Korea
- Sindya Power Generating Company Private Ltd
- Ministry of Mines - Canada
- Indian Energy Exchange, India
- Riau Bara Harum - Indonesia
- Ind-Barath Power Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Australian Commodity Traders Exchange
- Tata Chemicals Ltd - India
- Manunggal Multi Energi - Indonesia
- Commonwealth Bank - Australia
- Binh Thuan Hamico - Vietnam
- White Energy Company Limited
- The Treasury - Australian Government
- VISA Power Limited - India
- Intertek Mineral Services - Indonesia
- Global Coal Blending Company Limited - Australia
- Baramulti Group, Indonesia
- Aditya Birla Group - India
- Bhushan Steel Limited - India
- Indogreen Group - Indonesia
- GMR Energy Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Holcim Trading Pte Ltd - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Videocon Industries ltd - India
- European Bulk Services B.V. - Netherlands
- Formosa Plastics Group - Taiwan
- Directorate General of MIneral and Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bharathi Cement Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- CNBM International Corporation - China
- Oldendorff Carriers - Singapore
- Gujarat Electricity Regulatory Commission - India
- Bukit Baiduri Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- LBH Netherlands Bv - Netherlands
- Semirara Mining Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Grasim Industreis Ltd - India
- San Jose City I Power Corp, Philippines
- Xindia Steels Limited - India
- Power Finance Corporation Ltd., India
- Meralco Power Generation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Dalmia Cement Bharat India
- Asmin Koalindo Tuhup - Indonesia
- Indian Oil Corporation Limited
- Vizag Seaport Private Limited - India
- Bhoruka Overseas - Indonesia
- Globalindo Alam Lestari - Indonesia
- IEA Clean Coal Centre - UK
- Posco Energy - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Alfred C Toepfer International GmbH - Germany
- Edison Trading Spa - Italy
- TNB Fuel Sdn Bhd - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Renaissance Capital - South Africa
- Indonesian Coal Mining Association
- Indo Tambangraya Megah - Indonesia
- India Bulls Power Limited - India
- Latin American Coal - Colombia
- AsiaOL BioFuels Corp., Philippines
- PTC India Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Therma Luzon, Inc, Philippines
- Sakthi Sugars Limited - India
- Lanco Infratech Ltd - India
- ASAPP Information Group - India
- Gujarat Sidhee Cement - India
- Central Java Power - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chamber of Mines of South Africa
- Salva Resources Pvt Ltd - India
- Ministry of Transport, Egypt
- Toyota Tsusho Corporation, Japan
- Ceylon Electricity Board - Sri Lanka
- Global Business Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- SMG Consultants - Indonesia
- Romanian Commodities Exchange
- Merrill Lynch Commodities Europe
- GVK Power & Infra Limited - India
- Georgia Ports Authority, United States
- Medco Energi Mining Internasional
- Kideco Jaya Agung - Indonesia
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- Rashtriya Ispat Nigam Limited - India
- Mjunction Services Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Coal and Oil Company - UAE
- Rio Tinto Coal - Australia
- Coalindo Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Star Paper Mills Limited - India
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- The University of Queensland
- McConnell Dowell - Australia
- Indika Energy - Indonesia
- Attock Cement Pakistan Limited
- Bhatia International Limited - India
- Africa Commodities Group - South Africa
- Kobexindo Tractors - Indoneisa
- Thiess Contractors Indonesia
- Trasteel International SA, Italy
- Altura Mining Limited, Indonesia
- Ambuja Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Agrawal Coal Company - India
- Kepco SPC Power Corporation, Philippines
- Australian Coal Association
- Orica Australia Pty. Ltd.
- Jaiprakash Power Ventures ltd
- Siam City Cement PLC, Thailand
- Neyveli Lignite Corporation Ltd, - India
- Marubeni Corporation - India
- Energy Development Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Mintek Dendrill Indonesia
- Jindal Steel & Power Ltd - India
- Iligan Light & Power Inc, Philippines
- Malabar Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Wood Mackenzie - Singapore
- Deloitte Consulting - India
- Kumho Petrochemical, South Korea
- Billiton Holdings Pty Ltd - Australia
- Heidelberg Cement - Germany
- Banpu Public Company Limited - Thailand
- Aboitiz Power Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Parry Sugars Refinery, India
- PowerSource Philippines DevCo
- SN Aboitiz Power Inc, Philippines
- Central Electricity Authority - India
- IHS Mccloskey Coal Group - USA
- Sree Jayajothi Cements Limited - India
- Bayan Resources Tbk. - Indonesia
- Timah Investasi Mineral - Indoneisa
- The State Trading Corporation of India Ltd
- Jorong Barutama Greston.PT - Indonesia
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