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