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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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Saturday, 28 May 11
GOLDEN MINES IPO AT RP 2,300 - RP 3,500
Coal miner PT Golden Energy Mines, a wholly owned subsidiary of PT Dian Swastatika Sentosa Tbk (DSSA) which is controlled by Indonesian businessman ...
Friday, 27 May 11
LARGER DRY BULK CARRIERS LEAD BDIS RALLY THIS WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Larger dry bulk vessels have kept on leading the market’s rise this week, with the BDI (Baltic Dry Index) rising by a more than healthy 3.43% ...
Wednesday, 25 May 11
70 PERCENT OF HARUMS PRODUCTION SOLD - BISNIS INDONESIA
Coal producer PT Harum Energy Tbk claimed that out of this year's total production target of 10 million tons, 70% or 7 million tons had been sold, ...
Wednesday, 25 May 11
MINERS BACK GOVT PLAN TO FREEZE MINING PERMITS - THE JAKARTA POST
Indonesian coal miners hailed the government’s decision to impose a moratorium on the issuance of new mining permits, saying the freeze would ...
Wednesday, 25 May 11
DRY BULK MARKET ENTERS WEEK ON A HIGH NOTE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has managed to end its downward trend of the past few weeks and surge back on higher ground. Yesterday, the Baltic Dry Index (BD ...
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- Jaiprakash Power Ventures ltd
- Economic Council, Georgia
- Chettinad Cement Corporation Ltd - India
- Directorate Of Revenue Intelligence - India
- MS Steel International - UAE
- Directorate General of MIneral and Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Central Java Power - Indonesia
- GVK Power & Infra Limited - India
- Makarim & Taira - Indonesia
- Indogreen Group - Indonesia
- Marubeni Corporation - India
- Cement Manufacturers Association - India
- Miang Besar Coal Terminal - Indonesia
- SMC Global Power, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- Thai Mozambique Logistica
- Anglo American - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- Malabar Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Singapore Mercantile Exchange
- TeaM Sual Corporation - Philippines
- Standard Chartered Bank - UAE
- Sojitz Corporation - Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- LBH Netherlands Bv - Netherlands
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- CNBM International Corporation - China
- McConnell Dowell - Australia
- Karaikal Port Pvt Ltd - India
- Australian Commodity Traders Exchange
- International Coal Ventures Pvt Ltd - India
- ICICI Bank Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bulk Trading Sa - Switzerland
- Kumho Petrochemical, South Korea
- AsiaOL BioFuels Corp., Philippines
- Bayan Resources Tbk. - Indonesia
- Gujarat Sidhee Cement - India
- Formosa Plastics Group - Taiwan
- Merrill Lynch Commodities Europe
- Global Business Power Corporation, Philippines
- New Zealand Coal & Carbon
- Antam Resourcindo - Indonesia
- Sarangani Energy Corporation, Philippines
- Aditya Birla Group - India
- SN Aboitiz Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- Central Electricity Authority - India
- Posco Energy - South Korea
- Bhatia International Limited - India
- Banpu Public Company Limited - Thailand
- The State Trading Corporation of India Ltd
- Star Paper Mills Limited - India
- The University of Queensland
- Ministry of Finance - Indonesia
- Carbofer General Trading SA - India
- Krishnapatnam Port Company Ltd. - India
- Eastern Coal Council - USA
- Mercuria Energy - Indonesia
- Indian Energy Exchange, India
- Semirara Mining and Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meenaskhi Energy Private Limited - India
- Deloitte Consulting - India
- Toyota Tsusho Corporation, Japan
- Orica Australia Pty. Ltd.
- Bank of Tokyo Mitsubishi UFJ Ltd
- Agrawal Coal Company - India
- Bharathi Cement Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Australian Coal Association
- Manunggal Multi Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Orica Mining Services - Indonesia
- Goldman Sachs - Singapore
- Madhucon Powers Ltd - India
- Rio Tinto Coal - Australia
- Aboitiz Power Corporation - Philippines
- Renaissance Capital - South Africa
- Sindya Power Generating Company Private Ltd
- IHS Mccloskey Coal Group - USA
- Wood Mackenzie - Singapore
- Mercator Lines Limited - India
- Intertek Mineral Services - Indonesia
- Tata Chemicals Ltd - India
- Kaltim Prima Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Simpson Spence & Young - Indonesia
- Tamil Nadu electricity Board
- Sinarmas Energy and Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- India Bulls Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Lanco Infratech Ltd - India
- Global Green Power PLC Corporation, Philippines
- Heidelberg Cement - Germany
- Indonesian Coal Mining Association
- Dalmia Cement Bharat India
- Asmin Koalindo Tuhup - Indonesia
- Electricity Authority, New Zealand
- Bukit Baiduri Energy - Indonesia
- IEA Clean Coal Centre - UK
- Bahari Cakrawala Sebuku - Indonesia
- Sree Jayajothi Cements Limited - India
- Metalloyd Limited - United Kingdom
- Altura Mining Limited, Indonesia
- Coastal Gujarat Power Limited - India
- Xindia Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- White Energy Company Limited
- Vizag Seaport Private Limited - India
- Oldendorff Carriers - Singapore
- Kideco Jaya Agung - Indonesia
- Barasentosa Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- OPG Power Generation Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Medco Energi Mining Internasional
- Bangladesh Power Developement Board
- PNOC Exploration Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Coal and Oil Company - UAE
- Coalindo Energy - Indonesia
- Planning Commission, India
- Parry Sugars Refinery, India
- Jorong Barutama Greston.PT - Indonesia
- VISA Power Limited - India
- Semirara Mining Corp, Philippines
- Uttam Galva Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Samtan Co., Ltd - South Korea
- CIMB Investment Bank - Malaysia
- PowerSource Philippines DevCo
- Edison Trading Spa - Italy
- PTC India Limited - India
- Ambuja Cements Ltd - India
- Minerals Council of Australia
- Riau Bara Harum - Indonesia
- Larsen & Toubro Limited - India
- Timah Investasi Mineral - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Parliament of New Zealand
- Bukit Makmur.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Attock Cement Pakistan Limited
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement PLC, Thailand
- Commonwealth Bank - Australia
- Iligan Light & Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Georgia Ports Authority, United States
- Savvy Resources Ltd - HongKong
- Kobexindo Tractors - Indoneisa
- Jindal Steel & Power Ltd - India
- Price Waterhouse Coopers - Russia
- Meralco Power Generation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Global Coal Blending Company Limited - Australia
- Indika Energy - Indonesia
- Ministry of Mines - Canada
- Binh Thuan Hamico - Vietnam
- Romanian Commodities Exchange
- San Jose City I Power Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Pendopo Energi Batubara - Indonesia
- GMR Energy Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Independent Power Producers Association of India
- Sakthi Sugars Limited - India
- Petron Corporation, Philippines
- Chamber of Mines of South Africa
- ASAPP Information Group - India
- Thiess Contractors Indonesia
- Kapuas Tunggal Persada - Indonesia
- Straits Asia Resources Limited - Singapore
- Ministry of Transport, Egypt
- Indian Oil Corporation Limited
- Eastern Energy - Thailand
- Videocon Industries ltd - India
- Indo Tambangraya Megah - Indonesia
- Energy Link Ltd, New Zealand
- Energy Development Corp, Philippines
- The Treasury - Australian Government
- Power Finance Corporation Ltd., India
- Therma Luzon, Inc, Philippines
- Interocean Group of Companies - India
- Sical Logistics Limited - India
- Borneo Indobara - Indonesia
- Wilmar Investment Holdings
- Bhushan Steel Limited - India
- Grasim Industreis Ltd - India
- Electricity Generating Authority of Thailand
- Baramulti Group, Indonesia
- Mjunction Services Limited - India
- Trasteel International SA, Italy
- TNB Fuel Sdn Bhd - Malaysia
- Essar Steel Hazira Ltd - India
- Vedanta Resources Plc - India
- Africa Commodities Group - South Africa
- Latin American Coal - Colombia
- London Commodity Brokers - England
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