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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 January 20
SUPRAMAX: A NUMBER OF INDONESIAN ROUND TRIPS WERE REPORTED AT BELLOW USD 5,000 PD LEVELS - FEARNLEYS
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Wednesday, 08 January 20
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JANUARY INDONESIAN COAL PRICE REFERENCE SLIPS US$ 0.37 MOM
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
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- Attock Cement Pakistan Limited
- Renaissance Capital - South Africa
- Krishnapatnam Port Company Ltd. - India
- Port Waratah Coal Services - Australia
- The Treasury - Australian Government
- London Commodity Brokers - England
- Simpson Spence & Young - Indonesia
- Maheswari Brothers Coal Limited - India
- CNBM International Corporation - China
- SMC Global Power, Philippines
- Bayan Resources Tbk. - Indonesia
- Manunggal Multi Energi - Indonesia
- Australian Coal Association
- LBH Netherlands Bv - Netherlands
- Global Business Power Corporation, Philippines
- Aditya Birla Group - India
- Latin American Coal - Colombia
- Antam Resourcindo - Indonesia
- Orica Mining Services - Indonesia
- Ambuja Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- Parliament of New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Samtan Co., Ltd - South Korea
- CIMB Investment Bank - Malaysia
- Vedanta Resources Plc - India
- Sinarmas Energy and Mining - Indonesia
- Gujarat Sidhee Cement - India
- Ind-Barath Power Infra Limited - India
- SMG Consultants - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- India Bulls Power Limited - India
- Riau Bara Harum - Indonesia
- GVK Power & Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kumho Petrochemical, South Korea
- Globalindo Alam Lestari - Indonesia
- McConnell Dowell - Australia
- Mercator Lines Limited - India
- Videocon Industries ltd - India
- Economic Council, Georgia
- Singapore Mercantile Exchange
- Kartika Selabumi Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Kalimantan Lumbung Energi - Indonesia
- San Jose City I Power Corp, Philippines
- Romanian Commodities Exchange
- Pendopo Energi Batubara - Indonesia
- Heidelberg Cement - Germany
- Bhatia International Limited - India
- Power Finance Corporation Ltd., India
- Bukit Makmur.PT - Indonesia
- Bulk Trading Sa - Switzerland
- The State Trading Corporation of India Ltd
- Binh Thuan Hamico - Vietnam
- The University of Queensland
- Makarim & Taira - Indonesia
- Therma Luzon, Inc, Philippines
- Eastern Coal Council - USA
- Coalindo Energy - Indonesia
- Tata Chemicals Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- Sical Logistics Limited - India
- Electricity Generating Authority of Thailand
- European Bulk Services B.V. - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Central Java Power - Indonesia
- Thiess Contractors Indonesia
- Global Coal Blending Company Limited - Australia
- Karbindo Abesyapradhi - Indoneisa
- Medco Energi Mining Internasional
- Independent Power Producers Association of India
- Georgia Ports Authority, United States
- Bangladesh Power Developement Board
- Indo Tambangraya Megah - Indonesia
- Malabar Cements Ltd - India
- ICICI Bank Limited - India
- Alfred C Toepfer International GmbH - Germany
- Holcim Trading Pte Ltd - Singapore
- Metalloyd Limited - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Indogreen Group - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Indika Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Merrill Lynch Commodities Europe
- Wood Mackenzie - Singapore
- Marubeni Corporation - India
- Xindia Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Edison Trading Spa - Italy
- Baramulti Group, Indonesia
- Karaikal Port Pvt Ltd - India
- Indonesian Coal Mining Association
- Interocean Group of Companies - India
- Wilmar Investment Holdings
- PowerSource Philippines DevCo
- Bhushan Steel Limited - India
- Salva Resources Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Posco Energy - South Korea
- Chettinad Cement Corporation Ltd - India
- Global Green Power PLC Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Trasteel International SA, Italy
- Grasim Industreis Ltd - India
- Sindya Power Generating Company Private Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Authority, New Zealand
- Kaltim Prima Coal - Indonesia
- Sojitz Corporation - Japan
- Commonwealth Bank - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- VISA Power Limited - India
- Minerals Council of Australia
- Ministry of Finance - Indonesia
- IEA Clean Coal Centre - UK
- Bhoruka Overseas - Indonesia
- GAC Shipping (India) Pvt Ltd
- Cement Manufacturers Association - India
- Vizag Seaport Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Agrawal Coal Company - India
- PTC India Limited - India
- Lanco Infratech Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Orica Australia Pty. Ltd.
- White Energy Company Limited
- Billiton Holdings Pty Ltd - Australia
- Ministry of Transport, Egypt
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coastal Gujarat Power Limited - India
- TeaM Sual Corporation - Philippines
- Madhucon Powers Ltd - India
- PNOC Exploration Corporation - Philippines
- Semirara Mining Corp, Philippines
- Ministry of Mines - Canada
- Anglo American - United Kingdom
- Central Electricity Authority - India
- TNB Fuel Sdn Bhd - Malaysia
- Meenaskhi Energy Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Indian Energy Exchange, India
- Standard Chartered Bank - UAE
- International Coal Ventures Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Kepco SPC Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Africa Commodities Group - South Africa
- Energy Link Ltd, New Zealand
- Siam City Cement PLC, Thailand
- Intertek Mineral Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- New Zealand Coal & Carbon
- Semirara Mining and Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Mintek Dendrill Indonesia
- Uttam Galva Steels Limited - India
- ASAPP Information Group - India
- Mercuria Energy - Indonesia
- Larsen & Toubro Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Baiduri Energy - Indonesia
- Chamber of Mines of South Africa
- Tamil Nadu electricity Board
- Borneo Indobara - Indonesia
- Petron Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- Deloitte Consulting - India
- IHS Mccloskey Coal Group - USA
- Energy Development Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Dalmia Cement Bharat India
- Savvy Resources Ltd - HongKong
- Siam City Cement - Thailand
- Bharathi Cement Corporation - India
- Australian Commodity Traders Exchange
- Banpu Public Company Limited - Thailand
- Star Paper Mills Limited - India
- Jaiprakash Power Ventures ltd
- Rashtriya Ispat Nigam Limited - India
- Kideco Jaya Agung - Indonesia
- Eastern Energy - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Oldendorff Carriers - Singapore
- Sakthi Sugars Limited - India
- MS Steel International - UAE
- Ceylon Electricity Board - Sri Lanka
- Essar Steel Hazira Ltd - India
- SN Aboitiz Power Inc, Philippines
- Coal and Oil Company - UAE
- Barasentosa Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Mjunction Services Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Goldman Sachs - Singapore
- Meralco Power Generation, Philippines
- Kobexindo Tractors - Indoneisa
- Toyota Tsusho Corporation, Japan
- Timah Investasi Mineral - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Planning Commission, India
- Thai Mozambique Logistica
- Parry Sugars Refinery, India
- Carbofer General Trading SA - India
- South Luzon Thermal Energy Corporation
- GMR Energy Limited - India
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