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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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Thursday, 05 July 12
BUMI ACHIEVES HIGHER SELLING PRICE IN FIRST QUARTER
COALspot.com - PT Bumi Resources Tbk (BUMI), Indonesia's largest coal producer and exporter, has successfully maintained a higher sales margin, des ...
Tuesday, 03 July 12
DRY BULK MARKET INCHED FORWARD AT THE START OF THE WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market inched forward at the beginning of the new week, prior to the US holidays regarding the celebration of the 4th of July, which is ...
Monday, 02 July 12
ORPHEUS STRENGTHENS REVENUE STREAM WITH NEW ROYALTY AGREEMENT AT THE B2 COAL PROJECT
Orpheus Energy (ASX:OEG) is pleased to advise that it has executed a life of mine Royalty Agreement with Indonesian mining contractor PT Debbia Mini ...
Monday, 02 July 12
DRY BULK DEMAND TO RISE TO 3.6 BILLION TONNES IN 2012, BUT NEW BUILDING DELIVERIES ARE
In its latest analysis on the dry bulk market fundamentals, DVB Bank said that dry bulk cargo demand is forecast to rise to approximately 3.6 billio ...
Sunday, 01 July 12
AUSTRALIAS CARBON TAX - SUNIL K KUMBHAT
COALspot.com - Climate Change
Climate change and global warming have now become buzzwords the world over. The disastrous consequences for global ...
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- Bukit Makmur.PT - Indonesia
- Independent Power Producers Association of India
- Maharashtra Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sical Logistics Limited - India
- Wood Mackenzie - Singapore
- Australian Coal Association
- Bukit Baiduri Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sree Jayajothi Cements Limited - India
- International Coal Ventures Pvt Ltd - India
- Central Electricity Authority - India
- Larsen & Toubro Limited - India
- Indian Oil Corporation Limited
- Merrill Lynch Commodities Europe
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Finance - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- CNBM International Corporation - China
- Xindia Steels Limited - India
- Oldendorff Carriers - Singapore
- Barasentosa Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- PTC India Limited - India
- Jaiprakash Power Ventures ltd
- Chamber of Mines of South Africa
- Simpson Spence & Young - Indonesia
- Romanian Commodities Exchange
- The Treasury - Australian Government
- Holcim Trading Pte Ltd - Singapore
- Parliament of New Zealand
- Standard Chartered Bank - UAE
- Indo Tambangraya Megah - Indonesia
- GMR Energy Limited - India
- Riau Bara Harum - Indonesia
- Dalmia Cement Bharat India
- Africa Commodities Group - South Africa
- Bangladesh Power Developement Board
- Bayan Resources Tbk. - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Thiess Contractors Indonesia
- Mintek Dendrill Indonesia
- Jindal Steel & Power Ltd - India
- Kobexindo Tractors - Indoneisa
- Ministry of Mines - Canada
- European Bulk Services B.V. - Netherlands
- Global Business Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Carbofer General Trading SA - India
- Rashtriya Ispat Nigam Limited - India
- Ambuja Cements Ltd - India
- Eastern Coal Council - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- London Commodity Brokers - England
- Bukit Asam (Persero) Tbk - Indonesia
- Lanco Infratech Ltd - India
- Interocean Group of Companies - India
- GAC Shipping (India) Pvt Ltd
- OPG Power Generation Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Indika Energy - Indonesia
- White Energy Company Limited
- Tamil Nadu electricity Board
- Global Coal Blending Company Limited - Australia
- GN Power Mariveles Coal Plant, Philippines
- Maheswari Brothers Coal Limited - India
- Coalindo Energy - Indonesia
- VISA Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Commonwealth Bank - Australia
- Electricity Authority, New Zealand
- Makarim & Taira - Indonesia
- Borneo Indobara - Indonesia
- MS Steel International - UAE
- Straits Asia Resources Limited - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Intertek Mineral Services - Indonesia
- Essar Steel Hazira Ltd - India
- Aboitiz Power Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Kapuas Tunggal Persada - Indonesia
- India Bulls Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Singapore Mercantile Exchange
- Ministry of Transport, Egypt
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Central Java Power - Indonesia
- Tata Chemicals Ltd - India
- Timah Investasi Mineral - Indoneisa
- Goldman Sachs - Singapore
- Indian Energy Exchange, India
- Petron Corporation, Philippines
- SMG Consultants - Indonesia
- Antam Resourcindo - Indonesia
- Vizag Seaport Private Limited - India
- Attock Cement Pakistan Limited
- Karbindo Abesyapradhi - Indoneisa
- IEA Clean Coal Centre - UK
- Bulk Trading Sa - Switzerland
- Eastern Energy - Thailand
- Grasim Industreis Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- The University of Queensland
- Therma Luzon, Inc, Philippines
- Orica Mining Services - Indonesia
- Siam City Cement PLC, Thailand
- Kalimantan Lumbung Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Energy Development Corp, Philippines
- Medco Energi Mining Internasional
- Meenaskhi Energy Private Limited - India
- Australian Commodity Traders Exchange
- Wilmar Investment Holdings
- Billiton Holdings Pty Ltd - Australia
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Trasteel International SA, Italy
- Anglo American - United Kingdom
- Meralco Power Generation, Philippines
- Savvy Resources Ltd - HongKong
- Port Waratah Coal Services - Australia
- ICICI Bank Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Sidhee Cement - India
- Global Green Power PLC Corporation, Philippines
- Vedanta Resources Plc - India
- Bharathi Cement Corporation - India
- Marubeni Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Metalloyd Limited - United Kingdom
- Economic Council, Georgia
- Samtan Co., Ltd - South Korea
- Semirara Mining and Power Corporation, Philippines
- ASAPP Information Group - India
- AsiaOL BioFuels Corp., Philippines
- Electricity Generating Authority of Thailand
- Posco Energy - South Korea
- South Luzon Thermal Energy Corporation
- Cement Manufacturers Association - India
- Krishnapatnam Port Company Ltd. - India
- Edison Trading Spa - Italy
- TNB Fuel Sdn Bhd - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Uttam Galva Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
- SMC Global Power, Philippines
- Malabar Cements Ltd - India
- Siam City Cement - Thailand
- Planning Commission, India
- Indonesian Coal Mining Association
- Formosa Plastics Group - Taiwan
- Iligan Light & Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Altura Mining Limited, Indonesia
- Sindya Power Generating Company Private Ltd
- Deloitte Consulting - India
- New Zealand Coal & Carbon
- Thai Mozambique Logistica
- Offshore Bulk Terminal Pte Ltd, Singapore
- McConnell Dowell - Australia
- Sakthi Sugars Limited - India
- Power Finance Corporation Ltd., India
- Latin American Coal - Colombia
- Bhatia International Limited - India
- Heidelberg Cement - Germany
- Kumho Petrochemical, South Korea
- Banpu Public Company Limited - Thailand
- The State Trading Corporation of India Ltd
- Minerals Council of Australia
- Pendopo Energi Batubara - Indonesia
- PNOC Exploration Corporation - Philippines
- Indogreen Group - Indonesia
- Georgia Ports Authority, United States
- Manunggal Multi Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhushan Steel Limited - India
- Kideco Jaya Agung - Indonesia
- Sojitz Corporation - Japan
- Renaissance Capital - South Africa
- Mercator Lines Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Baramulti Group, Indonesia
- Karaikal Port Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Kepco SPC Power Corporation, Philippines
- Agrawal Coal Company - India
- Petrochimia International Co. Ltd.- Taiwan
- Binh Thuan Hamico - Vietnam
- TeaM Sual Corporation - Philippines
- Energy Link Ltd, New Zealand
- Orica Australia Pty. Ltd.
- Star Paper Mills Limited - India
- Directorate Of Revenue Intelligence - India
- Mercuria Energy - Indonesia
- Mjunction Services Limited - India
- Kaltim Prima Coal - Indonesia
- Rio Tinto Coal - Australia
- Coal and Oil Company - UAE
- Semirara Mining Corp, Philippines
- CIMB Investment Bank - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- GVK Power & Infra Limited - India
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