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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, 22 December 10
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Wednesday, 22 December 10
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Wednesday, 22 December 10
DRY BULK MARKET LOOKING FOR DIRECTION AMID HOLIDAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market isn’t exhibiting a “festive” behavior, thus cheering ship owners and investors alike. Instead, the industry&rs ...
Tuesday, 21 December 10
CHINA COAL CAP TO BOOST GLOBAL M&A - FINANCIER WORLD WIDE
Financier World Wide reported that, Chinese state-run media has reported that the Central Government intends to cap domestic coal production for fea ...
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- Makarim & Taira - Indonesia
- Parliament of New Zealand
- Binh Thuan Hamico - Vietnam
- Australian Commodity Traders Exchange
- Renaissance Capital - South Africa
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- Xindia Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- CNBM International Corporation - China
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- Latin American Coal - Colombia
- Meralco Power Generation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Manunggal Multi Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GMR Energy Limited - India
- PowerSource Philippines DevCo
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- The Treasury - Australian Government
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- Chettinad Cement Corporation Ltd - India
- Vizag Seaport Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- Energy Development Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Commonwealth Bank - Australia
- Kumho Petrochemical, South Korea
- Madhucon Powers Ltd - India
- Orica Australia Pty. Ltd.
- Coastal Gujarat Power Limited - India
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- PNOC Exploration Corporation - Philippines
- Ministry of Transport, Egypt
- VISA Power Limited - India
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- Karaikal Port Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dalmia Cement Bharat India
- Indian Energy Exchange, India
- Formosa Plastics Group - Taiwan
- Chamber of Mines of South Africa
- Banpu Public Company Limited - Thailand
- Lanco Infratech Ltd - India
- Kideco Jaya Agung - Indonesia
- Posco Energy - South Korea
- San Jose City I Power Corp, Philippines
- Indonesian Coal Mining Association
- The University of Queensland
- Trasteel International SA, Italy
- Global Coal Blending Company Limited - Australia
- Ambuja Cements Ltd - India
- Vedanta Resources Plc - India
- Mintek Dendrill Indonesia
- Globalindo Alam Lestari - Indonesia
- Marubeni Corporation - India
- Baramulti Group, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- New Zealand Coal & Carbon
- PetroVietnam Power Coal Import and Supply Company
- IEA Clean Coal Centre - UK
- Intertek Mineral Services - Indonesia
- ICICI Bank Limited - India
- Jorong Barutama Greston.PT - Indonesia
- SMC Global Power, Philippines
- Energy Link Ltd, New Zealand
- Indogreen Group - Indonesia
- Eastern Coal Council - USA
- Kobexindo Tractors - Indoneisa
- Tata Chemicals Ltd - India
- Toyota Tsusho Corporation, Japan
- Electricity Generating Authority of Thailand
- Indika Energy - Indonesia
- London Commodity Brokers - England
- Medco Energi Mining Internasional
- Parry Sugars Refinery, India
- European Bulk Services B.V. - Netherlands
- GVK Power & Infra Limited - India
- Bhoruka Overseas - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Indian Oil Corporation Limited
- Gujarat Sidhee Cement - India
- GAC Shipping (India) Pvt Ltd
- Straits Asia Resources Limited - Singapore
- Coalindo Energy - Indonesia
- Economic Council, Georgia
- India Bulls Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement PLC, Thailand
- Planning Commission, India
- SMG Consultants - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Rio Tinto Coal - Australia
- Gujarat Mineral Development Corp Ltd - India
- Global Business Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Tamil Nadu electricity Board
- ASAPP Information Group - India
- Aditya Birla Group - India
- Mercuria Energy - Indonesia
- Petron Corporation, Philippines
- Borneo Indobara - Indonesia
- Indo Tambangraya Megah - Indonesia
- Malabar Cements Ltd - India
- Sakthi Sugars Limited - India
- Sinarmas Energy and Mining - Indonesia
- Heidelberg Cement - Germany
- Minerals Council of Australia
- Eastern Energy - Thailand
- The State Trading Corporation of India Ltd
- SN Aboitiz Power Inc, Philippines
- Interocean Group of Companies - India
- Antam Resourcindo - Indonesia
- CIMB Investment Bank - Malaysia
- Cigading International Bulk Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Videocon Industries ltd - India
- Aboitiz Power Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Ministry of Mines - Canada
- Vijayanagar Sugar Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Sojitz Corporation - Japan
- Kalimantan Lumbung Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Grasim Industreis Ltd - India
- IHS Mccloskey Coal Group - USA
- Deloitte Consulting - India
- Merrill Lynch Commodities Europe
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Electricity Authority - India
- Ministry of Finance - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Singapore Mercantile Exchange
- Kartika Selabumi Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Kaltim Prima Coal - Indonesia
- Siam City Cement - Thailand
- Power Finance Corporation Ltd., India
- White Energy Company Limited
- Directorate General of MIneral and Coal - Indonesia
- PTC India Limited - India
- Edison Trading Spa - Italy
- Australian Coal Association
- Bulk Trading Sa - Switzerland
- Barasentosa Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Thai Mozambique Logistica
- Wilmar Investment Holdings
- Wood Mackenzie - Singapore
- McConnell Dowell - Australia
- Orica Mining Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Cement Manufacturers Association - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bhatia International Limited - India
- Bhushan Steel Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Sarangani Energy Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- Holcim Trading Pte Ltd - Singapore
- Ceylon Electricity Board - Sri Lanka
- Miang Besar Coal Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- MS Steel International - UAE
- Billiton Holdings Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Coal and Oil Company - UAE
- Electricity Authority, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Leighton Contractors Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Meenaskhi Energy Private Limited - India
- Maheswari Brothers Coal Limited - India
- Savvy Resources Ltd - HongKong
- Global Green Power PLC Corporation, Philippines
- Mjunction Services Limited - India
- Simpson Spence & Young - Indonesia
- Salva Resources Pvt Ltd - India
- Attock Cement Pakistan Limited
- Uttam Galva Steels Limited - India
- Anglo American - United Kingdom
- Independent Power Producers Association of India
- Georgia Ports Authority, United States
- Goldman Sachs - Singapore
- Carbofer General Trading SA - India
- Semirara Mining and Power Corporation, Philippines
- Romanian Commodities Exchange
- LBH Netherlands Bv - Netherlands
- Riau Bara Harum - Indonesia
- Larsen & Toubro Limited - India
- Iligan Light & Power Inc, Philippines
- Mercator Lines Limited - India
- Altura Mining Limited, Indonesia
- Agrawal Coal Company - India
- TNB Fuel Sdn Bhd - Malaysia
- Bangladesh Power Developement Board
- Star Paper Mills Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Essar Steel Hazira Ltd - India
- Bukit Makmur.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Sindya Power Generating Company Private Ltd
- Sical Logistics Limited - India
- Oldendorff Carriers - Singapore
- Metalloyd Limited - United Kingdom
- Price Waterhouse Coopers - Russia
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