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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, 10 October 11
MOZAMBIQUE CHANNEL TO BE THE NEW PIRACY HOTSPOT FOR THIS YEAR SAYS MARITIME SECURITY EXPERT - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The Mozambique Channel, as well as the entrance to the Persian Gulf, are expected to become some of the new pirate hotspots for piracy, says Richard ...
Sunday, 09 October 11
FREIGHT MARKET ENDED WITH A POSITIVE DIRECTION - VISTAAR
COALspot.com - The market ended with a positive note with all the segments up except for handy size. The biggest gainer was Panamax index up by 11 p ...
Saturday, 08 October 11
INDONESIAN MINER PLANS $167M IPO TO FUEL SUMATRA COAL BOOM - JG
The Jakarta Globe reported that, coal miner Atlas Resources aims to raise as much as Rp 1.5 trillion ($167 million) in an initial public offering to ...
Friday, 07 October 11
MINING REGULATIONS , OBSTACLES AND GROWTH : INDIA VS INDONESIA - SUNIL K KUMBHAT
COALspot.com - The Govt of India has passed long pending Mines & Minerals (Regulation and Development) Bill, 2011, which seeks to replace ...
Friday, 07 October 11
$100M FOR EXPANSION INTO KALIMANTAN MINING: AKR
The Jakarta Globe, one of the leading English news paper in Indonesia reported that, AKR Corporindo, a fuel and chemical distributor, has set aside ...
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- Bhoruka Overseas - Indonesia
- Grasim Industreis Ltd - India
- Heidelberg Cement - Germany
- CNBM International Corporation - China
- Meenaskhi Energy Private Limited - India
- Sree Jayajothi Cements Limited - India
- MS Steel International - UAE
- Kalimantan Lumbung Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- Jindal Steel & Power Ltd - India
- Chettinad Cement Corporation Ltd - India
- SN Aboitiz Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- SMC Global Power, Philippines
- Gujarat Mineral Development Corp Ltd - India
- South Luzon Thermal Energy Corporation
- Medco Energi Mining Internasional
- Anglo American - United Kingdom
- Global Coal Blending Company Limited - Australia
- Banpu Public Company Limited - Thailand
- Aditya Birla Group - India
- Eastern Coal Council - USA
- Mercator Lines Limited - India
- Latin American Coal - Colombia
- Rio Tinto Coal - Australia
- Coalindo Energy - Indonesia
- Coal and Oil Company - UAE
- Mintek Dendrill Indonesia
- TeaM Sual Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Coastal Gujarat Power Limited - India
- Ministry of Transport, Egypt
- Kobexindo Tractors - Indoneisa
- Independent Power Producers Association of India
- GVK Power & Infra Limited - India
- Antam Resourcindo - Indonesia
- Indika Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Sindya Power Generating Company Private Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Carbofer General Trading SA - India
- Lanco Infratech Ltd - India
- Therma Luzon, Inc, Philippines
- Wilmar Investment Holdings
- The State Trading Corporation of India Ltd
- IEA Clean Coal Centre - UK
- Global Green Power PLC Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Indo Tambangraya Megah - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Borneo Indobara - Indonesia
- Orica Mining Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Africa Commodities Group - South Africa
- Baramulti Group, Indonesia
- Renaissance Capital - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- Georgia Ports Authority, United States
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- Madhucon Powers Ltd - India
- Mercuria Energy - Indonesia
- Indian Energy Exchange, India
- Sical Logistics Limited - India
- GMR Energy Limited - India
- Altura Mining Limited, Indonesia
- Bangladesh Power Developement Board
- Dalmia Cement Bharat India
- Asmin Koalindo Tuhup - Indonesia
- Central Java Power - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PowerSource Philippines DevCo
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Minerals Council of Australia
- Malabar Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- LBH Netherlands Bv - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Bhushan Steel Limited - India
- ASAPP Information Group - India
- Ambuja Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Commonwealth Bank - Australia
- Goldman Sachs - Singapore
- Australian Commodity Traders Exchange
- Maheswari Brothers Coal Limited - India
- Semirara Mining and Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bulk Trading Sa - Switzerland
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- Trasteel International SA, Italy
- Globalindo Alam Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- McConnell Dowell - Australia
- Star Paper Mills Limited - India
- Wood Mackenzie - Singapore
- VISA Power Limited - India
- Price Waterhouse Coopers - Russia
- Salva Resources Pvt Ltd - India
- Ministry of Mines - Canada
- Ministry of Finance - Indonesia
- Petron Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Tamil Nadu electricity Board
- Holcim Trading Pte Ltd - Singapore
- Karaikal Port Pvt Ltd - India
- Parliament of New Zealand
- Planning Commission, India
- PTC India Limited - India
- Romanian Commodities Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Siam City Cement - Thailand
- Sojitz Corporation - Japan
- The Treasury - Australian Government
- IHS Mccloskey Coal Group - USA
- Energy Link Ltd, New Zealand
- Port Waratah Coal Services - Australia
- Mjunction Services Limited - India
- Aboitiz Power Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Bhatia International Limited - India
- Singapore Mercantile Exchange
- Oldendorff Carriers - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Power Finance Corporation Ltd., India
- Standard Chartered Bank - UAE
- Maharashtra Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- Sakthi Sugars Limited - India
- London Commodity Brokers - England
- Bharathi Cement Corporation - India
- Eastern Energy - Thailand
- Toyota Tsusho Corporation, Japan
- Tata Chemicals Ltd - India
- Thai Mozambique Logistica
- SMG Consultants - Indonesia
- Indian Oil Corporation Limited
- Electricity Generating Authority of Thailand
- Vedanta Resources Plc - India
- New Zealand Coal & Carbon
- CIMB Investment Bank - Malaysia
- Ind-Barath Power Infra Limited - India
- Videocon Industries ltd - India
- Posco Energy - South Korea
- Makarim & Taira - Indonesia
- The University of Queensland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indonesian Coal Mining Association
- Economic Council, Georgia
- Xindia Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Central Electricity Authority - India
- Sinarmas Energy and Mining - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Jaiprakash Power Ventures ltd
- Edison Trading Spa - Italy
- Ceylon Electricity Board - Sri Lanka
- Kumho Petrochemical, South Korea
- Iligan Light & Power Inc, Philippines
- ICICI Bank Limited - India
- Riau Bara Harum - Indonesia
- European Bulk Services B.V. - Netherlands
- Larsen & Toubro Limited - India
- White Energy Company Limited
- Cigading International Bulk Terminal - Indonesia
- Interocean Group of Companies - India
- Agrawal Coal Company - India
- Barasentosa Lestari - Indonesia
- Cement Manufacturers Association - India
- Kepco SPC Power Corporation, Philippines
- India Bulls Power Limited - India
- Essar Steel Hazira Ltd - India
- Marubeni Corporation - India
- Attock Cement Pakistan Limited
- Semirara Mining Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Uttam Galva Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- GAC Shipping (India) Pvt Ltd
- Krishnapatnam Port Company Ltd. - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chamber of Mines of South Africa
- Bukit Makmur.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Simpson Spence & Young - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Australian Coal Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Manunggal Multi Energi - Indonesia
- San Jose City I Power Corp, Philippines
- Intertek Mineral Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Meralco Power Generation, Philippines
- Savvy Resources Ltd - HongKong
- Directorate Of Revenue Intelligence - India
- Energy Development Corp, Philippines
- Merrill Lynch Commodities Europe
- Siam City Cement PLC, Thailand
- Vizag Seaport Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- Indogreen Group - Indonesia
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