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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, 16 June 11
FREIGHT MARKET FAILS TO RECOVER - DREWRY / HELLENIC SHIPPING
With demand failing to improve enough to contain the colossal increases in supply, the dry bulk freight market stayed near the dreadfully low levels ...
Thursday, 16 June 11
VALLAR CONTROLS 84.7 PERCENT STAKE IN BERAU COAL - INSIDER STORIES
Insider Stories reported that, London-based investment company Vallar Plc, via its subsidiary dubbed Vallar Investments UK Limited, today announced ...
Wednesday, 15 June 11
INDONESIA NEW COAL POLICY WORRIES INDIA POWER FIRMS - MYDIGITALFC
Tata Power, Adani group, Lanco Infratech and Reliance Power, among other Indian coal importers, are waiting to assess the impact of the Indonesian g ...
Wednesday, 15 June 11
BAYAN RESOURCES OWNS 56 PERCENT KANGAROO - INSIDER STORIES
Australia-listed coal miner Kangaroo Resources Limited (KRL) has obtained final approval from its shareholders to complete its US$277 million acquis ...
Wednesday, 15 June 11
DRY BULK MARKET WEAKENS AGAIN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Despite this time of year traditionally being one of the busiest for the dry bulk market, it seems that in the post-crisis era trade patterns are co ...
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- Directorate Of Revenue Intelligence - India
- Mintek Dendrill Indonesia
- Australian Commodity Traders Exchange
- Baramulti Group, Indonesia
- Eastern Energy - Thailand
- International Coal Ventures Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Indika Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Lanco Infratech Ltd - India
- Makarim & Taira - Indonesia
- PNOC Exploration Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Altura Mining Limited, Indonesia
- Sindya Power Generating Company Private Ltd
- Wilmar Investment Holdings
- OPG Power Generation Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Kartika Selabumi Mining - Indonesia
- PowerSource Philippines DevCo
- PetroVietnam Power Coal Import and Supply Company
- Salva Resources Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Ministry of Transport, Egypt
- Asmin Koalindo Tuhup - Indonesia
- Indogreen Group - Indonesia
- Siam City Cement PLC, Thailand
- Malabar Cements Ltd - India
- Vizag Seaport Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Formosa Plastics Group - Taiwan
- Indian Energy Exchange, India
- Merrill Lynch Commodities Europe
- Parliament of New Zealand
- Interocean Group of Companies - India
- Ministry of Mines - Canada
- Minerals Council of Australia
- Sical Logistics Limited - India
- Straits Asia Resources Limited - Singapore
- Videocon Industries ltd - India
- Energy Development Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Anglo American - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Economic Council, Georgia
- Rio Tinto Coal - Australia
- Electricity Authority, New Zealand
- Jaiprakash Power Ventures ltd
- LBH Netherlands Bv - Netherlands
- Eastern Coal Council - USA
- Kobexindo Tractors - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Commonwealth Bank - Australia
- CNBM International Corporation - China
- Iligan Light & Power Inc, Philippines
- Larsen & Toubro Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Latin American Coal - Colombia
- South Luzon Thermal Energy Corporation
- Edison Trading Spa - Italy
- Pendopo Energi Batubara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Siam City Cement - Thailand
- London Commodity Brokers - England
- Timah Investasi Mineral - Indoneisa
- Toyota Tsusho Corporation, Japan
- Coal and Oil Company - UAE
- Oldendorff Carriers - Singapore
- Parry Sugars Refinery, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petron Corporation, Philippines
- The Treasury - Australian Government
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- SMG Consultants - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Marubeni Corporation - India
- Carbofer General Trading SA - India
- Tata Chemicals Ltd - India
- Samtan Co., Ltd - South Korea
- Agrawal Coal Company - India
- Central Electricity Authority - India
- Leighton Contractors Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- Kalimantan Lumbung Energi - Indonesia
- Romanian Commodities Exchange
- Ind-Barath Power Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Star Paper Mills Limited - India
- Dalmia Cement Bharat India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jindal Steel & Power Ltd - India
- Aboitiz Power Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Bhoruka Overseas - Indonesia
- CIMB Investment Bank - Malaysia
- Renaissance Capital - South Africa
- Bhushan Steel Limited - India
- Orica Australia Pty. Ltd.
- Global Green Power PLC Corporation, Philippines
- Gujarat Sidhee Cement - India
- Indonesian Coal Mining Association
- New Zealand Coal & Carbon
- Electricity Generating Authority of Thailand
- McConnell Dowell - Australia
- Kumho Petrochemical, South Korea
- Jorong Barutama Greston.PT - Indonesia
- IEA Clean Coal Centre - UK
- Borneo Indobara - Indonesia
- IHS Mccloskey Coal Group - USA
- ASAPP Information Group - India
- Heidelberg Cement - Germany
- Holcim Trading Pte Ltd - Singapore
- GVK Power & Infra Limited - India
- Energy Link Ltd, New Zealand
- MS Steel International - UAE
- TNB Fuel Sdn Bhd - Malaysia
- VISA Power Limited - India
- India Bulls Power Limited - India
- Thai Mozambique Logistica
- Manunggal Multi Energi - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bharathi Cement Corporation - India
- Wood Mackenzie - Singapore
- Semirara Mining and Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMC Global Power, Philippines
- Central Java Power - Indonesia
- Bhatia International Limited - India
- TeaM Sual Corporation - Philippines
- Mercator Lines Limited - India
- Grasim Industreis Ltd - India
- Standard Chartered Bank - UAE
- Kapuas Tunggal Persada - Indonesia
- Singapore Mercantile Exchange
- Barasentosa Lestari - Indonesia
- Therma Luzon, Inc, Philippines
- Cement Manufacturers Association - India
- Ceylon Electricity Board - Sri Lanka
- Madhucon Powers Ltd - India
- Attock Cement Pakistan Limited
- Gujarat Mineral Development Corp Ltd - India
- Thiess Contractors Indonesia
- Alfred C Toepfer International GmbH - Germany
- Ministry of Finance - Indonesia
- Port Waratah Coal Services - Australia
- The State Trading Corporation of India Ltd
- Australian Coal Association
- Chamber of Mines of South Africa
- Bangladesh Power Developement Board
- The University of Queensland
- Bukit Makmur.PT - Indonesia
- Mjunction Services Limited - India
- Planning Commission, India
- Tamil Nadu electricity Board
- Georgia Ports Authority, United States
- Kepco SPC Power Corporation, Philippines
- PTC India Limited - India
- Kaltim Prima Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Ambuja Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Medco Energi Mining Internasional
- Metalloyd Limited - United Kingdom
- Mercuria Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Vedanta Resources Plc - India
- Indo Tambangraya Megah - Indonesia
- Meralco Power Generation, Philippines
- Savvy Resources Ltd - HongKong
- Sakthi Sugars Limited - India
- SN Aboitiz Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ICICI Bank Limited - India
- Goldman Sachs - Singapore
- GMR Energy Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Trasteel International SA, Italy
- Aditya Birla Group - India
- Orica Mining Services - Indonesia
- Power Finance Corporation Ltd., India
- Meenaskhi Energy Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Indian Oil Corporation Limited
- Maharashtra Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Sinarmas Energy and Mining - Indonesia
- Sarangani Energy Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Global Business Power Corporation, Philippines
- Deloitte Consulting - India
- Binh Thuan Hamico - Vietnam
- Karaikal Port Pvt Ltd - India
- Sojitz Corporation - Japan
- White Energy Company Limited
- Billiton Holdings Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Xindia Steels Limited - India
- Posco Energy - South Korea
- Simpson Spence & Young - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
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