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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, 05 January 11
BUKIT ASAM TARGETS 20% BUY TO GROW COAL TRANSPORT CAPACITY - THE JAKARTA GLOBE
The Jakarta Globe reported that, Indonesian coal producer Tambang Batubara Bukit Asam is considering buying an additional 20 percent stake in Bukit ...
Wednesday, 05 January 11
FLOODING IN AUSTRALIA WILL CAUSE COAL PRICES TO SPIKE AT LEAST 20 PERCENT
Rising coal prices are set to spike at least 20 per cent higher because of supply shortages due to severe flooding in Australia, adding cost pressur ...
Wednesday, 05 January 11
DRY BULK MARKET BEGINS NEW YEAR ON SOUR NOTE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Seasonal factors like the worst flooding in Australia’s Queensland in half a century, coupled with thin trade activity has put the dry bulk ma ...
Tuesday, 04 January 11
THE WCI-CHINA ROUTE WAS TRADED IN THE MID US$ 10,000S - BRS DRY BULK
As reported by BRS Dry Bulk, after a stronger than expected performance in 2010, rates finished on a sombre note in December with the BDI at1,773 po ...
Tuesday, 04 January 11
BALI, INDONESIA HOST OF WORLD RENEWABLE ENERGY AND ENERGY EFFICIENCY CONFERENCE
Press Release - Indonesian Renewable Energy Society (METI – IRES) has launched the plan for organizing the international gathering ...
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- South Luzon Thermal Energy Corporation
- CNBM International Corporation - China
- Billiton Holdings Pty Ltd - Australia
- PTC India Limited - India
- Kartika Selabumi Mining - Indonesia
- Malabar Cements Ltd - India
- MS Steel International - UAE
- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
- ASAPP Information Group - India
- Maharashtra Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- SMG Consultants - Indonesia
- Mintek Dendrill Indonesia
- Latin American Coal - Colombia
- Alfred C Toepfer International GmbH - Germany
- Energy Link Ltd, New Zealand
- Bhatia International Limited - India
- Planning Commission, India
- Parry Sugars Refinery, India
- Gujarat Mineral Development Corp Ltd - India
- Madhucon Powers Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Bukit Baiduri Energy - Indonesia
- Carbofer General Trading SA - India
- Tamil Nadu electricity Board
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tata Chemicals Ltd - India
- International Coal Ventures Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Sarangani Energy Corporation, Philippines
- Orica Australia Pty. Ltd.
- Cigading International Bulk Terminal - Indonesia
- Vedanta Resources Plc - India
- Medco Energi Mining Internasional
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Global Coal Blending Company Limited - Australia
- Attock Cement Pakistan Limited
- Miang Besar Coal Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- Krishnapatnam Port Company Ltd. - India
- Makarim & Taira - Indonesia
- SN Aboitiz Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Heidelberg Cement - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Agrawal Coal Company - India
- Rashtriya Ispat Nigam Limited - India
- Mercuria Energy - Indonesia
- New Zealand Coal & Carbon
- Karbindo Abesyapradhi - Indoneisa
- Coal and Oil Company - UAE
- Savvy Resources Ltd - HongKong
- Siam City Cement - Thailand
- India Bulls Power Limited - India
- Ind-Barath Power Infra Limited - India
- Economic Council, Georgia
- Thiess Contractors Indonesia
- The Treasury - Australian Government
- Xindia Steels Limited - India
- Interocean Group of Companies - India
- Riau Bara Harum - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Oldendorff Carriers - Singapore
- Videocon Industries ltd - India
- Kobexindo Tractors - Indoneisa
- Simpson Spence & Young - Indonesia
- Grasim Industreis Ltd - India
- Independent Power Producers Association of India
- Globalindo Alam Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Aditya Birla Group - India
- SMC Global Power, Philippines
- Chamber of Mines of South Africa
- Gujarat Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Directorate Of Revenue Intelligence - India
- Eastern Coal Council - USA
- Romanian Commodities Exchange
- Kideco Jaya Agung - Indonesia
- Ambuja Cements Ltd - India
- Parliament of New Zealand
- Banpu Public Company Limited - Thailand
- Eastern Energy - Thailand
- Coastal Gujarat Power Limited - India
- Posco Energy - South Korea
- Jindal Steel & Power Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Barasentosa Lestari - Indonesia
- ICICI Bank Limited - India
- Bhushan Steel Limited - India
- Bukit Makmur.PT - Indonesia
- IEA Clean Coal Centre - UK
- Antam Resourcindo - Indonesia
- Maheswari Brothers Coal Limited - India
- London Commodity Brokers - England
- Metalloyd Limited - United Kingdom
- Sojitz Corporation - Japan
- Deloitte Consulting - India
- Global Green Power PLC Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Georgia Ports Authority, United States
- Meenaskhi Energy Private Limited - India
- GMR Energy Limited - India
- Meralco Power Generation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Sakthi Sugars Limited - India
- Wood Mackenzie - Singapore
- Goldman Sachs - Singapore
- Binh Thuan Hamico - Vietnam
- PowerSource Philippines DevCo
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Finance - Indonesia
- Semirara Mining Corp, Philippines
- Star Paper Mills Limited - India
- Borneo Indobara - Indonesia
- Marubeni Corporation - India
- Kapuas Tunggal Persada - Indonesia
- GAC Shipping (India) Pvt Ltd
- Orica Mining Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Energy Development Corp, Philippines
- Uttam Galva Steels Limited - India
- Electricity Authority, New Zealand
- Formosa Plastics Group - Taiwan
- Mercator Lines Limited - India
- Intertek Mineral Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Sindya Power Generating Company Private Ltd
- Altura Mining Limited, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Coal Association
- Indogreen Group - Indonesia
- Merrill Lynch Commodities Europe
- Renaissance Capital - South Africa
- Siam City Cement PLC, Thailand
- OPG Power Generation Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- CIMB Investment Bank - Malaysia
- Mjunction Services Limited - India
- The University of Queensland
- Kaltim Prima Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Africa Commodities Group - South Africa
- White Energy Company Limited
- Rio Tinto Coal - Australia
- Straits Asia Resources Limited - Singapore
- Iligan Light & Power Inc, Philippines
- Indian Oil Corporation Limited
- Price Waterhouse Coopers - Russia
- Petrochimia International Co. Ltd.- Taiwan
- Bulk Trading Sa - Switzerland
- Kumho Petrochemical, South Korea
- Ceylon Electricity Board - Sri Lanka
- Gujarat Sidhee Cement - India
- IHS Mccloskey Coal Group - USA
- Ministry of Transport, Egypt
- Therma Luzon, Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Samtan Co., Ltd - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Electricity Generating Authority of Thailand
- Wilmar Investment Holdings
- Edison Trading Spa - Italy
- Central Electricity Authority - India
- Central Java Power - Indonesia
- Vizag Seaport Private Limited - India
- Petron Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Holcim Trading Pte Ltd - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Mines - Canada
- Kepco SPC Power Corporation, Philippines
- Minerals Council of Australia
- Bahari Cakrawala Sebuku - Indonesia
- Singapore Mercantile Exchange
- Thai Mozambique Logistica
- TeaM Sual Corporation - Philippines
- Indonesian Coal Mining Association
- Salva Resources Pvt Ltd - India
- Bangladesh Power Developement Board
- Sical Logistics Limited - India
- Trasteel International SA, Italy
- LBH Netherlands Bv - Netherlands
- PNOC Exploration Corporation - Philippines
- Port Waratah Coal Services - Australia
- Bayan Resources Tbk. - Indonesia
- Cement Manufacturers Association - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Anglo American - United Kingdom
- Bharathi Cement Corporation - India
- Global Business Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- GVK Power & Infra Limited - India
- Australian Commodity Traders Exchange
- Manunggal Multi Energi - Indonesia
- Indika Energy - Indonesia
- Power Finance Corporation Ltd., India
- San Jose City I Power Corp, Philippines
- Larsen & Toubro Limited - India
- VISA Power Limited - India
- Bhoruka Overseas - Indonesia
- Lanco Infratech Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- The State Trading Corporation of India Ltd
- Standard Chartered Bank - UAE
- McConnell Dowell - Australia
- Pendopo Energi Batubara - Indonesia
- Jaiprakash Power Ventures ltd
- Aboitiz Power Corporation - Philippines
- Coalindo Energy - Indonesia
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