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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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Sunday, 16 September 12
GLOBAL LOW DEMAND ; INDONESIA COAL AND CFR SOUTH CHINA COAL SWAPS DIP
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for November 2012 delivery lost 1.345 percent W-O-W on Friday, 14 September 2012, closing but gai ...
Sunday, 16 September 12
THE FREIGHT RATES FROM INDONESIA TO INDIA EXPECTED TO BE STEADY - VISTAAR
COALspot.com - The freight market was mixed with most indices closing positive except for the Panamax index.
The main sentiment seems to be ...
Saturday, 15 September 12
FINANCE MINISTRY OPPOSES TAX INCENTIVE PLAN FOR COAL MINERS - JP
The Jakarta Post reported that, the Finance Ministry has turned down the idea of providing a fiscal incentive to the country’s coal mining ind ...
Friday, 14 September 12
DRY BULK MARKET LOOKS TOWARDS CHINA FOR SOME POSITIVE NEWS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the dry bulk market freight rates submerged underwater for a large part of the year, dry bulk owners are looking for some positive enhancement ...
Friday, 14 September 12
GOVT OFFERS CONDITIONAL TAX HOLIDAY TO AILING COAL MINERS - JP
The Jakarta Post, one of the leading English news paper in Indonesia reported that, acknowledging difficulties encountered by coal miners due to a p ...
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- Indika Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Larsen & Toubro Limited - India
- Aditya Birla Group - India
- IHS Mccloskey Coal Group - USA
- Latin American Coal - Colombia
- GN Power Mariveles Coal Plant, Philippines
- London Commodity Brokers - England
- Sojitz Corporation - Japan
- Bhoruka Overseas - Indonesia
- Bukit Makmur.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Coalindo Energy - Indonesia
- Oldendorff Carriers - Singapore
- Star Paper Mills Limited - India
- Indonesian Coal Mining Association
- Savvy Resources Ltd - HongKong
- Mintek Dendrill Indonesia
- Altura Mining Limited, Indonesia
- Kartika Selabumi Mining - Indonesia
- Sical Logistics Limited - India
- Deloitte Consulting - India
- Semirara Mining Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Merrill Lynch Commodities Europe
- International Coal Ventures Pvt Ltd - India
- ASAPP Information Group - India
- Kepco SPC Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Pendopo Energi Batubara - Indonesia
- Vedanta Resources Plc - India
- Neyveli Lignite Corporation Ltd, - India
- Mjunction Services Limited - India
- Thiess Contractors Indonesia
- Meralco Power Generation, Philippines
- Singapore Mercantile Exchange
- Mercuria Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Sinarmas Energy and Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Antam Resourcindo - Indonesia
- Agrawal Coal Company - India
- Manunggal Multi Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Indian Energy Exchange, India
- TeaM Sual Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Port Waratah Coal Services - Australia
- Madhucon Powers Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bulk Trading Sa - Switzerland
- Independent Power Producers Association of India
- Krishnapatnam Port Company Ltd. - India
- Attock Cement Pakistan Limited
- CIMB Investment Bank - Malaysia
- Wilmar Investment Holdings
- The University of Queensland
- Thai Mozambique Logistica
- Trasteel International SA, Italy
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- Grasim Industreis Ltd - India
- Indo Tambangraya Megah - Indonesia
- Mercator Lines Limited - India
- Malabar Cements Ltd - India
- Eastern Energy - Thailand
- PTC India Limited - India
- Therma Luzon, Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Indogreen Group - Indonesia
- Ministry of Finance - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Sakthi Sugars Limited - India
- Maheswari Brothers Coal Limited - India
- Barasentosa Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Jindal Steel & Power Ltd - India
- SN Aboitiz Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- SMC Global Power, Philippines
- Cigading International Bulk Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Videocon Industries ltd - India
- Karaikal Port Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Africa Commodities Group - South Africa
- Cement Manufacturers Association - India
- Directorate General of MIneral and Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Mines - Canada
- Kaltim Prima Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Uttam Galva Steels Limited - India
- Makarim & Taira - Indonesia
- Central Java Power - Indonesia
- SMG Consultants - Indonesia
- Formosa Plastics Group - Taiwan
- Samtan Co., Ltd - South Korea
- Straits Asia Resources Limited - Singapore
- McConnell Dowell - Australia
- CNBM International Corporation - China
- Kobexindo Tractors - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Bhatia International Limited - India
- Power Finance Corporation Ltd., India
- Bharathi Cement Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- The State Trading Corporation of India Ltd
- Ind-Barath Power Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Global Business Power Corporation, Philippines
- ICICI Bank Limited - India
- Bhushan Steel Limited - India
- Metalloyd Limited - United Kingdom
- Romanian Commodities Exchange
- The Treasury - Australian Government
- Standard Chartered Bank - UAE
- Planning Commission, India
- Georgia Ports Authority, United States
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- White Energy Company Limited
- Minerals Council of Australia
- Orica Australia Pty. Ltd.
- Rashtriya Ispat Nigam Limited - India
- VISA Power Limited - India
- Carbofer General Trading SA - India
- GAC Shipping (India) Pvt Ltd
- GVK Power & Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Meenaskhi Energy Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Eastern Coal Council - USA
- Ceylon Electricity Board - Sri Lanka
- European Bulk Services B.V. - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- PowerSource Philippines DevCo
- Salva Resources Pvt Ltd - India
- Commonwealth Bank - Australia
- Interocean Group of Companies - India
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement PLC, Thailand
- Lanco Infratech Ltd - India
- Global Green Power PLC Corporation, Philippines
- Parliament of New Zealand
- Chamber of Mines of South Africa
- Kalimantan Lumbung Energi - Indonesia
- IEA Clean Coal Centre - UK
- Borneo Indobara - Indonesia
- Renaissance Capital - South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Goldman Sachs - Singapore
- Dalmia Cement Bharat India
- Sarangani Energy Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Australian Commodity Traders Exchange
- Sree Jayajothi Cements Limited - India
- Edison Trading Spa - Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- New Zealand Coal & Carbon
- Anglo American - United Kingdom
- Bangladesh Power Developement Board
- Siam City Cement - Thailand
- Baramulti Group, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Coal and Oil Company - UAE
- Wood Mackenzie - Singapore
- Essar Steel Hazira Ltd - India
- Medco Energi Mining Internasional
- Parry Sugars Refinery, India
- Indian Oil Corporation Limited
- Price Waterhouse Coopers - Russia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Holcim Trading Pte Ltd - Singapore
- PNOC Exploration Corporation - Philippines
- Ambuja Cements Ltd - India
- Coastal Gujarat Power Limited - India
- Jaiprakash Power Ventures ltd
- Heidelberg Cement - Germany
- Energy Development Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- MS Steel International - UAE
- GMR Energy Limited - India
- Posco Energy - South Korea
- Tata Chemicals Ltd - India
- Orica Mining Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Xindia Steels Limited - India
- LBH Netherlands Bv - Netherlands
- India Bulls Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Gujarat Sidhee Cement - India
- Economic Council, Georgia
- Bukit Baiduri Energy - Indonesia
- Electricity Authority, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Vizag Seaport Private Limited - India
- Ministry of Transport, Egypt
- Toyota Tsusho Corporation, Japan
- Bahari Cakrawala Sebuku - Indonesia
- Rio Tinto Coal - Australia
- Iligan Light & Power Inc, Philippines
- Tamil Nadu electricity Board
- Pipit Mutiara Jaya. PT, Indonesia
- Petron Corporation, Philippines
- Central Electricity Authority - India
- San Jose City I Power Corp, Philippines
- Energy Link Ltd, New Zealand
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