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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, 17 November 10
DRY BULK MARKET LOOKING FOR SUPPORT IN COAL TRADES AND INDIAN IRON ORE EXPORTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Nikos Roussanoglou, Hellenic Shipping reported that, the dry bulk market is lacking support to end its 13-day slide, as evidenced by Monday’s ...
Tuesday, 16 November 10
'VALLAR PLC' TO BECOME 'BUMI PLC' POST DEAL - THE JAKARTA POST
The Jakarta Post reported that, The United Kingdom’s Vallar Plc will change its name to Bumi Plc following a cash and stock transaction with t ...
Tuesday, 16 November 10
ROTHSCHILD BUYS INDONESIAN COAL STAKES FOR $3 BILLION - BLOOMBERG
Bloomberg reported that, Nathaniel Rothschild, the only son of U.K. financier Jacob Rothschild, agreed to invest $3 billion in two Indonesian coal c ...
Sunday, 14 November 10
THE FREIGHT MARKET CONTINUED ITS DOWN FALL - VISTAAR SINGAPORE
COALspot.com: The freight market continued its down fall with BDI down by 7.29 pct and closed at 2,313 points.
All other segments were also under ...
Saturday, 13 November 10
INDONESIA SHIPPED 8.73 % MORE COAL IN OCTOBER THAN A MONTH EARLIER
COALspot.com: Indonesia, the world largest coal exporter, shipped 23.55 mln mt of coal in October 2010, which is 8.73 percent more compared to Septe ...
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- Indogreen Group - Indonesia
- PNOC Exploration Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Interocean Group of Companies - India
- Energy Link Ltd, New Zealand
- Kobexindo Tractors - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Coal and Oil Company - UAE
- LBH Netherlands Bv - Netherlands
- Oldendorff Carriers - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- SMG Consultants - Indonesia
- Wood Mackenzie - Singapore
- CNBM International Corporation - China
- GAC Shipping (India) Pvt Ltd
- Altura Mining Limited, Indonesia
- Ministry of Mines - Canada
- Bukit Baiduri Energy - Indonesia
- Energy Development Corp, Philippines
- Mjunction Services Limited - India
- CIMB Investment Bank - Malaysia
- Petron Corporation, Philippines
- Baramulti Group, Indonesia
- Merrill Lynch Commodities Europe
- Mercuria Energy - Indonesia
- ICICI Bank Limited - India
- VISA Power Limited - India
- Sojitz Corporation - Japan
- Uttam Galva Steels Limited - India
- Riau Bara Harum - Indonesia
- Vedanta Resources Plc - India
- Intertek Mineral Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Deloitte Consulting - India
- SN Aboitiz Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Heidelberg Cement - Germany
- Electricity Authority, New Zealand
- Attock Cement Pakistan Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Generating Authority of Thailand
- Australian Coal Association
- ASAPP Information Group - India
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- Indonesian Coal Mining Association
- Miang Besar Coal Terminal - Indonesia
- Planning Commission, India
- Eastern Energy - Thailand
- Krishnapatnam Port Company Ltd. - India
- Xindia Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Edison Trading Spa - Italy
- Tamil Nadu electricity Board
- Binh Thuan Hamico - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Larsen & Toubro Limited - India
- Chamber of Mines of South Africa
- Anglo American - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Aboitiz Power Corporation - Philippines
- Sakthi Sugars Limited - India
- Alfred C Toepfer International GmbH - Germany
- Indo Tambangraya Megah - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Wilmar Investment Holdings
- Videocon Industries ltd - India
- Mintek Dendrill Indonesia
- Maheswari Brothers Coal Limited - India
- Leighton Contractors Pty Ltd - Australia
- Central Electricity Authority - India
- South Luzon Thermal Energy Corporation
- Simpson Spence & Young - Indonesia
- Kideco Jaya Agung - Indonesia
- The Treasury - Australian Government
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thiess Contractors Indonesia
- Kepco SPC Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- TNB Fuel Sdn Bhd - Malaysia
- IEA Clean Coal Centre - UK
- Aditya Birla Group - India
- Jaiprakash Power Ventures ltd
- Karbindo Abesyapradhi - Indoneisa
- Bukit Makmur.PT - Indonesia
- Parry Sugars Refinery, India
- Kalimantan Lumbung Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Star Paper Mills Limited - India
- Chettinad Cement Corporation Ltd - India
- Lanco Infratech Ltd - India
- Indian Oil Corporation Limited
- Kartika Selabumi Mining - Indonesia
- Antam Resourcindo - Indonesia
- Agrawal Coal Company - India
- Marubeni Corporation - India
- Ambuja Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Goldman Sachs - Singapore
- Posco Energy - South Korea
- Dalmia Cement Bharat India
- Cigading International Bulk Terminal - Indonesia
- Singapore Mercantile Exchange
- Therma Luzon, Inc, Philippines
- Bangladesh Power Developement Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kaltim Prima Coal - Indonesia
- Mercator Lines Limited - India
- Manunggal Multi Energi - Indonesia
- Siam City Cement - Thailand
- Thai Mozambique Logistica
- TeaM Sual Corporation - Philippines
- Australian Commodity Traders Exchange
- Orica Mining Services - Indonesia
- Grasim Industreis Ltd - India
- Port Waratah Coal Services - Australia
- Makarim & Taira - Indonesia
- Standard Chartered Bank - UAE
- Sical Logistics Limited - India
- Bulk Trading Sa - Switzerland
- Sarangani Energy Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Madhucon Powers Ltd - India
- Carbofer General Trading SA - India
- Savvy Resources Ltd - HongKong
- Banpu Public Company Limited - Thailand
- London Commodity Brokers - England
- Bukit Asam (Persero) Tbk - Indonesia
- Georgia Ports Authority, United States
- McConnell Dowell - Australia
- Toyota Tsusho Corporation, Japan
- White Energy Company Limited
- San Jose City I Power Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Central Java Power - Indonesia
- Price Waterhouse Coopers - Russia
- Meenaskhi Energy Private Limited - India
- GVK Power & Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Bhatia International Limited - India
- Salva Resources Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Vizag Seaport Private Limited - India
- Gujarat Sidhee Cement - India
- Pendopo Energi Batubara - Indonesia
- Global Business Power Corporation, Philippines
- Ministry of Transport, Egypt
- Iligan Light & Power Inc, Philippines
- Minerals Council of Australia
- Samtan Co., Ltd - South Korea
- Meralco Power Generation, Philippines
- GMR Energy Limited - India
- Directorate Of Revenue Intelligence - India
- Independent Power Producers Association of India
- Malabar Cements Ltd - India
- PowerSource Philippines DevCo
- Kohat Cement Company Ltd. - Pakistan
- Bhoruka Overseas - Indonesia
- Metalloyd Limited - United Kingdom
- PTC India Limited - India
- Medco Energi Mining Internasional
- International Coal Ventures Pvt Ltd - India
- Bhushan Steel Limited - India
- Global Coal Blending Company Limited - Australia
- Romanian Commodities Exchange
- OPG Power Generation Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kumho Petrochemical, South Korea
- Sindya Power Generating Company Private Ltd
- European Bulk Services B.V. - Netherlands
- Coastal Gujarat Power Limited - India
- Jindal Steel & Power Ltd - India
- Karaikal Port Pvt Ltd - India
- Tata Chemicals Ltd - India
- Coalindo Energy - Indonesia
- Semirara Mining Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Latin American Coal - Colombia
- Gujarat Electricity Regulatory Commission - India
- MS Steel International - UAE
- Sinarmas Energy and Mining - Indonesia
- Cement Manufacturers Association - India
- Rashtriya Ispat Nigam Limited - India
- Parliament of New Zealand
- Economic Council, Georgia
- AsiaOL BioFuels Corp., Philippines
- Essar Steel Hazira Ltd - India
- Bharathi Cement Corporation - India
- Rio Tinto Coal - Australia
- The University of Queensland
- Africa Commodities Group - South Africa
- Barasentosa Lestari - Indonesia
- Orica Australia Pty. Ltd.
- Borneo Indobara - Indonesia
- Renaissance Capital - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- SMC Global Power, Philippines
- Ministry of Finance - Indonesia
- Siam City Cement PLC, Thailand
- New Zealand Coal & Carbon
- Formosa Plastics Group - Taiwan
- India Bulls Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Coal Council - USA
- Indian Energy Exchange, India
- Indika Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
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