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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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Monday, 11 March 13
SUB-BIT FOB INDONESIA COAL SWAPS FELL 1.41 PERCENT W-W
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q2’ 2013 delivery has lost 1.41percent and CFR South China coal shipment ...
Sunday, 10 March 13
INDIA - INDONESIA SUPRAMAX FREIGHT : FIRM TREND
COALspot.com – This week freight market was raised and remained firm in all segments.
The BDI was up by 6.70 pct closed at 843 points, ...
Sunday, 10 March 13
INDONESIA'S FORESTRY DEPARTMENT IS TO INCREASE BORROW-TO-USE PERMITS (IJIN PINJAM PAKAI) FEE SOON
COALspot.com : Indonesia to increase borrows-to-use permit fees by 33.33 percent. The government of Indonesia is planning to increase the state&rsqu ...
Friday, 08 March 13
EKO SANTOSO BUDIANTO APPOINTED AS PRESDIENT DIRECTOR OF BERAU COAL ENERGY
COALspot.com - PT Berau Coal Energy has appointed Eko Santoso Budianto as new president director, replacing Rosan Roeslani. Berau’s extraordin ...
Friday, 08 March 13
INDONESIAN HBA UP FOR FIVE CONSECUTIVE MONTHS
COALspot.com - The Indonesian government has declared bench mark price for coal has moved upwards in March 2013.
The monthly coal reference ...
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- Chamber of Mines of South Africa
- Economic Council, Georgia
- Baramulti Group, Indonesia
- Bharathi Cement Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Trasteel International SA, Italy
- Oldendorff Carriers - Singapore
- Billiton Holdings Pty Ltd - Australia
- Aditya Birla Group - India
- Karbindo Abesyapradhi - Indoneisa
- Borneo Indobara - Indonesia
- Formosa Plastics Group - Taiwan
- Larsen & Toubro Limited - India
- Chettinad Cement Corporation Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Vizag Seaport Private Limited - India
- Kumho Petrochemical, South Korea
- SN Aboitiz Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Dalmia Cement Bharat India
- Asmin Koalindo Tuhup - Indonesia
- Sical Logistics Limited - India
- Africa Commodities Group - South Africa
- Latin American Coal - Colombia
- Maharashtra Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- Directorate Of Revenue Intelligence - India
- European Bulk Services B.V. - Netherlands
- Straits Asia Resources Limited - Singapore
- Sree Jayajothi Cements Limited - India
- Edison Trading Spa - Italy
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Electricity Authority - India
- Petron Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Heidelberg Cement - Germany
- Indo Tambangraya Megah - Indonesia
- Sojitz Corporation - Japan
- Alfred C Toepfer International GmbH - Germany
- Orica Australia Pty. Ltd.
- GN Power Mariveles Coal Plant, Philippines
- TeaM Sual Corporation - Philippines
- Commonwealth Bank - Australia
- Posco Energy - South Korea
- Gujarat Sidhee Cement - India
- Medco Energi Mining Internasional
- Sinarmas Energy and Mining - Indonesia
- Lanco Infratech Ltd - India
- Essar Steel Hazira Ltd - India
- The Treasury - Australian Government
- Toyota Tsusho Corporation, Japan
- Mjunction Services Limited - India
- Power Finance Corporation Ltd., India
- Kobexindo Tractors - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- MS Steel International - UAE
- Jorong Barutama Greston.PT - Indonesia
- Merrill Lynch Commodities Europe
- Binh Thuan Hamico - Vietnam
- Electricity Authority, New Zealand
- Energy Link Ltd, New Zealand
- Attock Cement Pakistan Limited
- Neyveli Lignite Corporation Ltd, - India
- GMR Energy Limited - India
- Wood Mackenzie - Singapore
- Indika Energy - Indonesia
- Barasentosa Lestari - Indonesia
- SMG Consultants - Indonesia
- Makarim & Taira - Indonesia
- Ministry of Transport, Egypt
- Holcim Trading Pte Ltd - Singapore
- Coastal Gujarat Power Limited - India
- Videocon Industries ltd - India
- Indonesian Coal Mining Association
- CIMB Investment Bank - Malaysia
- Pendopo Energi Batubara - Indonesia
- Bhushan Steel Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Price Waterhouse Coopers - Russia
- Goldman Sachs - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- India Bulls Power Limited - India
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- Metalloyd Limited - United Kingdom
- Meralco Power Generation, Philippines
- SMC Global Power, Philippines
- Planning Commission, India
- Kaltim Prima Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Singapore Mercantile Exchange
- Xindia Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Coalindo Energy - Indonesia
- Indian Energy Exchange, India
- VISA Power Limited - India
- Karaikal Port Pvt Ltd - India
- Ministry of Mines - Canada
- OPG Power Generation Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Thiess Contractors Indonesia
- Port Waratah Coal Services - Australia
- Agrawal Coal Company - India
- Marubeni Corporation - India
- Sarangani Energy Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Australian Coal Association
- Renaissance Capital - South Africa
- Bukit Baiduri Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Vedanta Resources Plc - India
- Indian Oil Corporation Limited
- Gujarat Mineral Development Corp Ltd - India
- Salva Resources Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Wilmar Investment Holdings
- LBH Netherlands Bv - Netherlands
- Bukit Makmur.PT - Indonesia
- Parliament of New Zealand
- Simpson Spence & Young - Indonesia
- San Jose City I Power Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Ministry of Finance - Indonesia
- Rio Tinto Coal - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Interocean Group of Companies - India
- PTC India Limited - India
- Jaiprakash Power Ventures ltd
- The State Trading Corporation of India Ltd
- Bhoruka Overseas - Indonesia
- Bulk Trading Sa - Switzerland
- Maheswari Brothers Coal Limited - India
- AsiaOL BioFuels Corp., Philippines
- PNOC Exploration Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- PowerSource Philippines DevCo
- Global Business Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- Siam City Cement - Thailand
- Uttam Galva Steels Limited - India
- White Energy Company Limited
- New Zealand Coal & Carbon
- Meenaskhi Energy Private Limited - India
- Tata Chemicals Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Parry Sugars Refinery, India
- Romanian Commodities Exchange
- Mercator Lines Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- ASAPP Information Group - India
- Eastern Coal Council - USA
- Grasim Industreis Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Central Java Power - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Carbofer General Trading SA - India
- Coal and Oil Company - UAE
- Mintek Dendrill Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Energy Development Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Kalimantan Lumbung Energi - Indonesia
- Riau Bara Harum - Indonesia
- London Commodity Brokers - England
- Rashtriya Ispat Nigam Limited - India
- Tamil Nadu electricity Board
- Orica Mining Services - Indonesia
- Electricity Generating Authority of Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CNBM International Corporation - China
- Madhucon Powers Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Indogreen Group - Indonesia
- IHS Mccloskey Coal Group - USA
- Global Coal Blending Company Limited - Australia
- Jindal Steel & Power Ltd - India
- ICICI Bank Limited - India
- Georgia Ports Authority, United States
- Bangladesh Power Developement Board
- McConnell Dowell - Australia
- Savvy Resources Ltd - HongKong
- Deloitte Consulting - India
- Banpu Public Company Limited - Thailand
- Kartika Selabumi Mining - Indonesia
- Semirara Mining Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kepco SPC Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Thai Mozambique Logistica
- Malabar Cements Ltd - India
- GVK Power & Infra Limited - India
- South Luzon Thermal Energy Corporation
- Minerals Council of Australia
- Standard Chartered Bank - UAE
- International Coal Ventures Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- IEA Clean Coal Centre - UK
- Bhatia International Limited - India
- Therma Luzon, Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Independent Power Producers Association of India
- The University of Queensland
- Star Paper Mills Limited - India
- Cement Manufacturers Association - India
- Altura Mining Limited, Indonesia
- Ambuja Cements Ltd - India
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