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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, 31 August 09
INDONESIA ADARO'S NET PROFIT SOARS 1,506 PERCENT ON HIGH PRICES
The Jakarta Post reported that, the country's second largest coal producer, PT Adaro Energy said Sunday that its first-half net profit soared 1,506 ...
Sunday, 30 August 09
THE FUTURES FOR THREE YEARS FOR 2010-2012 IS AROUND PANAMAX / US$ 15,500 & SUPRAMAX / US$ 13,500 PER DAY
COALspot.com (Singapore): The dry bulk market continued to be soft this week and the BDI was almost stable and closed at 2,421 points this week.
...
Friday, 28 August 09
INDONESIA SEEKS TO INCREASE COAL PRODUCTION TO BOLSTER REVENUE
The Jakarta Post, the leading english news paper in Indonesia reported that, Indonesia expects to increase coal production by up to 20 million tons ...
Friday, 28 August 09
MERCURIA ENERGY OPENS INDONESIA TRADING OFFICE
COALspot.com ( Indonesia): Mercuria Energy Group has opened a new office in Jakarta, Indonesia, focussed on trading coal.
Jakarta-based Emanuele ...
Friday, 28 August 09
COAL MINE BUYERS DUST OFF THEIR CASH ( ANALYZED BY REUTERS)
* Coal asset buyers give up waiting for bargains
* Mining majors expected to buy not sell
* South Africa a target, Indonesia less so
By Jackie ...
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- Kartika Selabumi Mining - Indonesia
- SMC Global Power, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Bharathi Cement Corporation - India
- Uttam Galva Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Wood Mackenzie - Singapore
- Singapore Mercantile Exchange
- IEA Clean Coal Centre - UK
- Altura Mining Limited, Indonesia
- Directorate Of Revenue Intelligence - India
- Sakthi Sugars Limited - India
- Manunggal Multi Energi - Indonesia
- Malabar Cements Ltd - India
- Banpu Public Company Limited - Thailand
- Sical Logistics Limited - India
- Orica Mining Services - Indonesia
- Kumho Petrochemical, South Korea
- Star Paper Mills Limited - India
- Larsen & Toubro Limited - India
- SMG Consultants - Indonesia
- AsiaOL BioFuels Corp., Philippines
- San Jose City I Power Corp, Philippines
- Essar Steel Hazira Ltd - India
- Grasim Industreis Ltd - India
- Ind-Barath Power Infra Limited - India
- Indika Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bulk Trading Sa - Switzerland
- Riau Bara Harum - Indonesia
- Karaikal Port Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Thai Mozambique Logistica
- Directorate General of MIneral and Coal - Indonesia
- Planning Commission, India
- Tata Chemicals Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kobexindo Tractors - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bhoruka Overseas - Indonesia
- Borneo Indobara - Indonesia
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- Trasteel International SA, Italy
- Globalindo Alam Lestari - Indonesia
- ASAPP Information Group - India
- Coalindo Energy - Indonesia
- Mintek Dendrill Indonesia
- Gujarat Sidhee Cement - India
- Bukit Asam (Persero) Tbk - Indonesia
- Commonwealth Bank - Australia
- Siam City Cement - Thailand
- Baramulti Group, Indonesia
- Indian Oil Corporation Limited
- VISA Power Limited - India
- IHS Mccloskey Coal Group - USA
- Energy Development Corp, Philippines
- Indian Energy Exchange, India
- Iligan Light & Power Inc, Philippines
- Goldman Sachs - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- European Bulk Services B.V. - Netherlands
- Vedanta Resources Plc - India
- Indonesian Coal Mining Association
- Mercator Lines Limited - India
- Alfred C Toepfer International GmbH - Germany
- The University of Queensland
- Eastern Coal Council - USA
- Lanco Infratech Ltd - India
- PNOC Exploration Corporation - Philippines
- Standard Chartered Bank - UAE
- Parry Sugars Refinery, India
- Tamil Nadu electricity Board
- Billiton Holdings Pty Ltd - Australia
- The Treasury - Australian Government
- Electricity Authority, New Zealand
- London Commodity Brokers - England
- Deloitte Consulting - India
- Minerals Council of Australia
- Holcim Trading Pte Ltd - Singapore
- Maheswari Brothers Coal Limited - India
- Latin American Coal - Colombia
- Salva Resources Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Bhushan Steel Limited - India
- Bukit Makmur.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Chettinad Cement Corporation Ltd - India
- Videocon Industries ltd - India
- Cigading International Bulk Terminal - Indonesia
- Ministry of Mines - Canada
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Chamber of Mines of South Africa
- Agrawal Coal Company - India
- Kalimantan Lumbung Energi - Indonesia
- Anglo American - United Kingdom
- TeaM Sual Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- PTC India Limited - India
- White Energy Company Limited
- Asmin Koalindo Tuhup - Indonesia
- Therma Luzon, Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Straits Asia Resources Limited - Singapore
- Power Finance Corporation Ltd., India
- Sojitz Corporation - Japan
- Rio Tinto Coal - Australia
- Africa Commodities Group - South Africa
- Meenaskhi Energy Private Limited - India
- OPG Power Generation Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Medco Energi Mining Internasional
- Timah Investasi Mineral - Indoneisa
- Binh Thuan Hamico - Vietnam
- Eastern Energy - Thailand
- Bukit Baiduri Energy - Indonesia
- PowerSource Philippines DevCo
- Ministry of Finance - Indonesia
- Posco Energy - South Korea
- Jindal Steel & Power Ltd - India
- International Coal Ventures Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- New Zealand Coal & Carbon
- Australian Commodity Traders Exchange
- Heidelberg Cement - Germany
- Kideco Jaya Agung - Indonesia
- Attock Cement Pakistan Limited
- The State Trading Corporation of India Ltd
- Parliament of New Zealand
- Central Electricity Authority - India
- Xindia Steels Limited - India
- Australian Coal Association
- Independent Power Producers Association of India
- Georgia Ports Authority, United States
- Global Business Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Sarangani Energy Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Rashtriya Ispat Nigam Limited - India
- Merrill Lynch Commodities Europe
- Electricity Generating Authority of Thailand
- Dalmia Cement Bharat India
- Simpson Spence & Young - Indonesia
- Meralco Power Generation, Philippines
- Ministry of Transport, Egypt
- Thiess Contractors Indonesia
- Aboitiz Power Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Antam Resourcindo - Indonesia
- Cement Manufacturers Association - India
- Gujarat Mineral Development Corp Ltd - India
- Mjunction Services Limited - India
- GVK Power & Infra Limited - India
- Economic Council, Georgia
- Renaissance Capital - South Africa
- Petron Corporation, Philippines
- Aditya Birla Group - India
- Marubeni Corporation - India
- Jaiprakash Power Ventures ltd
- TNB Fuel Sdn Bhd - Malaysia
- GMR Energy Limited - India
- Madhucon Powers Ltd - India
- Romanian Commodities Exchange
- Ambuja Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Ceylon Electricity Board - Sri Lanka
- India Bulls Power Limited - India
- Global Coal Blending Company Limited - Australia
- Kapuas Tunggal Persada - Indonesia
- Wilmar Investment Holdings
- Sindya Power Generating Company Private Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CNBM International Corporation - China
- ICICI Bank Limited - India
- Makarim & Taira - Indonesia
- Bhatia International Limited - India
- Oldendorff Carriers - Singapore
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- Sree Jayajothi Cements Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Kohat Cement Company Ltd. - Pakistan
- Barasentosa Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Energy Link Ltd, New Zealand
- Interocean Group of Companies - India
- Edison Trading Spa - Italy
- GAC Shipping (India) Pvt Ltd
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bangladesh Power Developement Board
- CIMB Investment Bank - Malaysia
- Intertek Mineral Services - Indonesia
- Central Java Power - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Indo Tambangraya Megah - Indonesia
- Pendopo Energi Batubara - Indonesia
- Sinarmas Energy and Mining - Indonesia
- MS Steel International - UAE
- Indogreen Group - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Formosa Plastics Group - Taiwan
- Carbofer General Trading SA - India
- Semirara Mining Corp, Philippines
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