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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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Wednesday, 02 February 11
HUGE TONNAGE OVERSUPPLY LOOMING FOR DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the dry bulk market taking another dive yesterday, to just over 1,000 points (1,084), losing more than 2% on the day, it’s more than obvi ...
Monday, 31 January 11
S. SUMATRA COAL RAILWAY TO BE COMPLETED ON SCHEDULE - THE JAKARTA POST
The Jakarta Post reported that, despite land acquisition problems, state coal mining company PT Bukit Asam is upbeat that the development of a railw ...
Monday, 31 January 11
COAL MINER PTBA TO DRIVE OUTPUT WITH ACQUISITIONS - THE JAKARTA GLOBE
The Jakarta Globe reported that, State coal company Perusahaan Tambang Batubara Bukit Asam said its output would increase 34 percent to 17.6 million ...
Saturday, 29 January 11
PRESSURE ON SHIPPING MARKET MAY CONTINUE UNTIL MID FEBRUARY 2011
COALspot.com - The BDI continues to drop and saw a drop of about 5 pct this week closing at 1370 points.
In May 2010 the BDI touched 4,209 ...
Saturday, 29 January 11
ANTAM ACQUIRES SAROLANGUN COAL MINING
According to Insider Stories, Nickel and gold miner PT Aneka Tambang Tbk (Antam) of Indonesia via its subsidiary PT Indonesia Coal Resources (ICR) h ...
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- Coal and Oil Company - UAE
- SMG Consultants - Indonesia
- Singapore Mercantile Exchange
- ICICI Bank Limited - India
- PowerSource Philippines DevCo
- VISA Power Limited - India
- Sindya Power Generating Company Private Ltd
- Bukit Baiduri Energy - Indonesia
- Xindia Steels Limited - India
- Rio Tinto Coal - Australia
- Parliament of New Zealand
- Eastern Energy - Thailand
- Power Finance Corporation Ltd., India
- Wood Mackenzie - Singapore
- Metalloyd Limited - United Kingdom
- Vizag Seaport Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- Energy Link Ltd, New Zealand
- Karaikal Port Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Globalindo Alam Lestari - Indonesia
- Petron Corporation, Philippines
- Sojitz Corporation - Japan
- Intertek Mineral Services - Indonesia
- Mercuria Energy - Indonesia
- Merrill Lynch Commodities Europe
- Meralco Power Generation, Philippines
- Heidelberg Cement - Germany
- Price Waterhouse Coopers - Russia
- Siam City Cement PLC, Thailand
- Thiess Contractors Indonesia
- Therma Luzon, Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Eastern Coal Council - USA
- Chettinad Cement Corporation Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Savvy Resources Ltd - HongKong
- Central Electricity Authority - India
- Barasentosa Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Bharathi Cement Corporation - India
- Kaltim Prima Coal - Indonesia
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- Vedanta Resources Plc - India
- Billiton Holdings Pty Ltd - Australia
- White Energy Company Limited
- Parry Sugars Refinery, India
- Meenaskhi Energy Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Ind-Barath Power Infra Limited - India
- Goldman Sachs - Singapore
- Krishnapatnam Port Company Ltd. - India
- Jindal Steel & Power Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Oldendorff Carriers - Singapore
- Indonesian Coal Mining Association
- Bangladesh Power Developement Board
- Africa Commodities Group - South Africa
- Coastal Gujarat Power Limited - India
- Romanian Commodities Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhatia International Limited - India
- Aboitiz Power Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Tata Chemicals Ltd - India
- Bulk Trading Sa - Switzerland
- Directorate Of Revenue Intelligence - India
- Malabar Cements Ltd - India
- Videocon Industries ltd - India
- Miang Besar Coal Terminal - Indonesia
- Coalindo Energy - Indonesia
- Lanco Infratech Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- GMR Energy Limited - India
- Larsen & Toubro Limited - India
- Riau Bara Harum - Indonesia
- Bayan Resources Tbk. - Indonesia
- Indian Energy Exchange, India
- ASAPP Information Group - India
- Global Business Power Corporation, Philippines
- The University of Queensland
- Maharashtra Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Kideco Jaya Agung - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kumho Petrochemical, South Korea
- Kepco SPC Power Corporation, Philippines
- PTC India Limited - India
- Interocean Group of Companies - India
- Sakthi Sugars Limited - India
- San Jose City I Power Corp, Philippines
- Orica Mining Services - Indonesia
- Chamber of Mines of South Africa
- Cigading International Bulk Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Tamil Nadu electricity Board
- Gujarat Sidhee Cement - India
- Formosa Plastics Group - Taiwan
- GAC Shipping (India) Pvt Ltd
- Toyota Tsusho Corporation, Japan
- GVK Power & Infra Limited - India
- Mjunction Services Limited - India
- Sree Jayajothi Cements Limited - India
- Jorong Barutama Greston.PT - Indonesia
- London Commodity Brokers - England
- Mintek Dendrill Indonesia
- McConnell Dowell - Australia
- Minerals Council of Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- Dalmia Cement Bharat India
- Semirara Mining and Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Indika Energy - Indonesia
- Mercator Lines Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Transport, Egypt
- GN Power Mariveles Coal Plant, Philippines
- Electricity Generating Authority of Thailand
- Energy Development Corp, Philippines
- Star Paper Mills Limited - India
- Ambuja Cements Ltd - India
- Carbofer General Trading SA - India
- Wilmar Investment Holdings
- Alfred C Toepfer International GmbH - Germany
- Latin American Coal - Colombia
- Samtan Co., Ltd - South Korea
- Georgia Ports Authority, United States
- Madhucon Powers Ltd - India
- International Coal Ventures Pvt Ltd - India
- Renaissance Capital - South Africa
- Antam Resourcindo - Indonesia
- Semirara Mining Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Timah Investasi Mineral - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Siam City Cement - Thailand
- Indo Tambangraya Megah - Indonesia
- CIMB Investment Bank - Malaysia
- Manunggal Multi Energi - Indonesia
- Makarim & Taira - Indonesia
- Maheswari Brothers Coal Limited - India
- Posco Energy - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- MS Steel International - UAE
- The Treasury - Australian Government
- South Luzon Thermal Energy Corporation
- Central Java Power - Indonesia
- Sical Logistics Limited - India
- Bhushan Steel Limited - India
- Marubeni Corporation - India
- Australian Commodity Traders Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Indogreen Group - Indonesia
- OPG Power Generation Pvt Ltd - India
- Economic Council, Georgia
- Borneo Indobara - Indonesia
- Ministry of Mines - Canada
- Commonwealth Bank - Australia
- India Bulls Power Limited - India
- Jaiprakash Power Ventures ltd
- Karbindo Abesyapradhi - Indoneisa
- Edison Trading Spa - Italy
- CNBM International Corporation - China
- Pipit Mutiara Jaya. PT, Indonesia
- Leighton Contractors Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Trasteel International SA, Italy
- LBH Netherlands Bv - Netherlands
- Baramulti Group, Indonesia
- SMC Global Power, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Deloitte Consulting - India
- Orica Australia Pty. Ltd.
- Kobexindo Tractors - Indoneisa
- Standard Chartered Bank - UAE
- European Bulk Services B.V. - Netherlands
- Port Waratah Coal Services - Australia
- Electricity Authority, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Bukit Makmur.PT - Indonesia
- Cement Manufacturers Association - India
- Ministry of Finance - Indonesia
- Planning Commission, India
- Ceylon Electricity Board - Sri Lanka
- Medco Energi Mining Internasional
- Petrochimia International Co. Ltd.- Taiwan
- Anglo American - United Kingdom
- SN Aboitiz Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Agrawal Coal Company - India
- Thai Mozambique Logistica
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Indian Oil Corporation Limited
- Global Coal Blending Company Limited - Australia
- Grasim Industreis Ltd - India
- Bhoruka Overseas - Indonesia
- Binh Thuan Hamico - Vietnam
- Australian Coal Association
- Independent Power Producers Association of India
- Sinarmas Energy and Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Uttam Galva Steels Limited - India
- Attock Cement Pakistan Limited
- Sarangani Energy Corporation, Philippines
- Altura Mining Limited, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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