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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, 20 August 12
CHINESE COAL SWAPS RISE, INDONESIAN COAL CONTRACTS SOFT
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for October 2012 delivery lost -2.05 percent W-o-W on Friday (17 August 2012) closing but gained ...
Saturday, 18 August 12
BULK FREIGHT MARKETS CONTINUED THEIR DECLINE IN LINE WITH WEAK DEMAND - VISTAAR
COALspot.com - This week also the indices fell on all segments with BDI touching lowest in almost 3 years.
The BDI closed at 714 points down by 7 ...
Thursday, 16 August 12
PUBLIC PRIVATE PARTNERSHIPS CONFERENCE 2012
Press Release - Asia’s Premier Public Private Partnerships Conference 2012 will showcase commercial opportunities for investors and developers ...
Wednesday, 15 August 12
UT GENERATED RP 3.09 TRILLION NET INCOME
COALspot.com - As of June 2012 Indonesia’s heavy equipment market grew 14%, from 8,448 units to 9,618 units (based on UT’s internal mark ...
Tuesday, 14 August 12
SAKARI ENTERED INTO JV IN CAMBODIA TO EXPLORE COAL OPPORTUNITIES
COALspot.com - Sakari joints hands with The Royal Group of Companies in Cambodia to explore and develop coal opportunities throughout the country.
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- Minerals Council of Australia
- Pendopo Energi Batubara - Indonesia
- SMC Global Power, Philippines
- ICICI Bank Limited - India
- Global Business Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Ind-Barath Power Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- PNOC Exploration Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- GMR Energy Limited - India
- Holcim Trading Pte Ltd - Singapore
- CIMB Investment Bank - Malaysia
- Energy Link Ltd, New Zealand
- PTC India Limited - India
- Parry Sugars Refinery, India
- PetroVietnam Power Coal Import and Supply Company
- Baramulti Group, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indogreen Group - Indonesia
- Salva Resources Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- India Bulls Power Limited - India
- Straits Asia Resources Limited - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Xindia Steels Limited - India
- Kumho Petrochemical, South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Wood Mackenzie - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vedanta Resources Plc - India
- MS Steel International - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- European Bulk Services B.V. - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Georgia Ports Authority, United States
- Formosa Plastics Group - Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Economic Council, Georgia
- The University of Queensland
- Coal and Oil Company - UAE
- Kapuas Tunggal Persada - Indonesia
- VISA Power Limited - India
- Chamber of Mines of South Africa
- Electricity Generating Authority of Thailand
- Jindal Steel & Power Ltd - India
- South Luzon Thermal Energy Corporation
- Orica Australia Pty. Ltd.
- Tamil Nadu electricity Board
- Deloitte Consulting - India
- Makarim & Taira - Indonesia
- Siam City Cement - Thailand
- Mercator Lines Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Commonwealth Bank - Australia
- Port Waratah Coal Services - Australia
- Thiess Contractors Indonesia
- San Jose City I Power Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Singapore Mercantile Exchange
- Therma Luzon, Inc, Philippines
- Carbofer General Trading SA - India
- Directorate Of Revenue Intelligence - India
- Power Finance Corporation Ltd., India
- Bayan Resources Tbk. - Indonesia
- Ministry of Finance - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Price Waterhouse Coopers - Russia
- Independent Power Producers Association of India
- Petron Corporation, Philippines
- Planning Commission, India
- Goldman Sachs - Singapore
- Kobexindo Tractors - Indoneisa
- Toyota Tsusho Corporation, Japan
- Sakthi Sugars Limited - India
- Timah Investasi Mineral - Indoneisa
- White Energy Company Limited
- Merrill Lynch Commodities Europe
- Sinarmas Energy and Mining - Indonesia
- Indika Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Gujarat Mineral Development Corp Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- Banpu Public Company Limited - Thailand
- Mercuria Energy - Indonesia
- Central Java Power - Indonesia
- Vizag Seaport Private Limited - India
- Gujarat Sidhee Cement - India
- Posco Energy - South Korea
- Bulk Trading Sa - Switzerland
- Rashtriya Ispat Nigam Limited - India
- Global Green Power PLC Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- McConnell Dowell - Australia
- Globalindo Alam Lestari - Indonesia
- Central Electricity Authority - India
- Karaikal Port Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Attock Cement Pakistan Limited
- Jaiprakash Power Ventures ltd
- OPG Power Generation Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Bhatia International Limited - India
- Indian Energy Exchange, India
- Parliament of New Zealand
- Essar Steel Hazira Ltd - India
- Madhucon Powers Ltd - India
- Borneo Indobara - Indonesia
- Africa Commodities Group - South Africa
- Kaltim Prima Coal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Larsen & Toubro Limited - India
- GVK Power & Infra Limited - India
- Australian Commodity Traders Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maheswari Brothers Coal Limited - India
- Heidelberg Cement - Germany
- Antam Resourcindo - Indonesia
- Mjunction Services Limited - India
- Edison Trading Spa - Italy
- Malabar Cements Ltd - India
- Australian Coal Association
- SMG Consultants - Indonesia
- Romanian Commodities Exchange
- Altura Mining Limited, Indonesia
- Ambuja Cements Ltd - India
- Indonesian Coal Mining Association
- Agrawal Coal Company - India
- Medco Energi Mining Internasional
- The Treasury - Australian Government
- IHS Mccloskey Coal Group - USA
- Manunggal Multi Energi - Indonesia
- Trasteel International SA, Italy
- Kideco Jaya Agung - Indonesia
- London Commodity Brokers - England
- Meralco Power Generation, Philippines
- Global Coal Blending Company Limited - Australia
- Intertek Mineral Services - Indonesia
- CNBM International Corporation - China
- Bangladesh Power Developement Board
- Energy Development Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Iligan Light & Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Sical Logistics Limited - India
- Aditya Birla Group - India
- Aboitiz Power Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Eastern Coal Council - USA
- Interocean Group of Companies - India
- Rio Tinto Coal - Australia
- Simpson Spence & Young - Indonesia
- Eastern Energy - Thailand
- TeaM Sual Corporation - Philippines
- Latin American Coal - Colombia
- Star Paper Mills Limited - India
- Orica Mining Services - Indonesia
- ASAPP Information Group - India
- Miang Besar Coal Terminal - Indonesia
- Tata Chemicals Ltd - India
- Anglo American - United Kingdom
- International Coal Ventures Pvt Ltd - India
- PowerSource Philippines DevCo
- Coalindo Energy - Indonesia
- Electricity Authority, New Zealand
- Semirara Mining Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Oldendorff Carriers - Singapore
- Lanco Infratech Ltd - India
- Cement Manufacturers Association - India
- Ministry of Transport, Egypt
- Leighton Contractors Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bhushan Steel Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- New Zealand Coal & Carbon
- Dalmia Cement Bharat India
- Riau Bara Harum - Indonesia
- Thai Mozambique Logistica
- Bharathi Cement Corporation - India
- Renaissance Capital - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Mintek Dendrill Indonesia
- Grasim Industreis Ltd - India
- Videocon Industries ltd - India
- Standard Chartered Bank - UAE
- Indian Oil Corporation Limited
- Barasentosa Lestari - Indonesia
- IEA Clean Coal Centre - UK
- Wilmar Investment Holdings
- Ministry of Mines - Canada
- Semirara Mining and Power Corporation, Philippines
- Marubeni Corporation - India
- Sojitz Corporation - Japan
- Samtan Co., Ltd - South Korea
- Kohat Cement Company Ltd. - Pakistan
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