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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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Friday, 02 July 10
MINERALS RESOURCE TAXATION IN AUSTRALIA - PRESS RELEASE
Press Release : Rio Tinto acknowledges the Australian Government’s announcement that the Resource Super Profits Tax (RSPT) proposal will be re ...
Thursday, 01 July 10
TATA POWER TO RAISE US$300 MILLION THROUGH ITS COAL SPVS TO FUND ADDITIONAL ACQUISITIONS AND / OR REDUCE OUTSTANDING DEBT
Stock Markets Review reported that, Tata Power, India’s largest private power player has signed an agreement to raise US$300 million in Bhira ...
Thursday, 01 July 10
HELLENIC SHIPPING NEWS POLL: THE BDI WILL STAY ABOVE 3,000 POINTS IN THE SECOND HALF OF 2010
When Hellenic Shipping News Worldwide prepared June’s poll asking readers about where do they think that the Baltic Dry Index (BDI) will range ...
Thursday, 01 July 10
PANAMAX MARKETS CONTINUE TO DROP IN ALL BASINS - FEARNLEYS
Handy
Atlantic rates continue to slide with little activity. Supras open in USG get low 30´s to Med and mid 40´s to FEast. Hmax/Supra ...
Wednesday, 30 June 10
PTBA TO SUPPLY ADDITIONAL 180 MLN TONS OF COAL TO PLN FOR 20 YEARS
COALspot.com: Indonesia's state-owned coal mining company PT Tambang Batubara Bukit Asam Tbk (PTBA) has entered into a new contract with state owne ...
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- Meralco Power Generation, Philippines
- Timah Investasi Mineral - Indoneisa
- Ministry of Transport, Egypt
- Bangladesh Power Developement Board
- Ambuja Cements Ltd - India
- Vizag Seaport Private Limited - India
- South Luzon Thermal Energy Corporation
- Miang Besar Coal Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Economic Council, Georgia
- Pipit Mutiara Jaya. PT, Indonesia
- Coastal Gujarat Power Limited - India
- Banpu Public Company Limited - Thailand
- Chettinad Cement Corporation Ltd - India
- Eastern Coal Council - USA
- CNBM International Corporation - China
- Sojitz Corporation - Japan
- VISA Power Limited - India
- Dalmia Cement Bharat India
- GMR Energy Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Central Electricity Authority - India
- Bhoruka Overseas - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coalindo Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Binh Thuan Hamico - Vietnam
- Kartika Selabumi Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Directorate Of Revenue Intelligence - India
- Tamil Nadu electricity Board
- Coal and Oil Company - UAE
- Tata Chemicals Ltd - India
- Merrill Lynch Commodities Europe
- Borneo Indobara - Indonesia
- Mintek Dendrill Indonesia
- Maheswari Brothers Coal Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maharashtra Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Africa Commodities Group - South Africa
- GAC Shipping (India) Pvt Ltd
- Xindia Steels Limited - India
- Baramulti Group, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- New Zealand Coal & Carbon
- Parry Sugars Refinery, India
- Therma Luzon, Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Lanco Infratech Ltd - India
- Salva Resources Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- White Energy Company Limited
- Pendopo Energi Batubara - Indonesia
- Bharathi Cement Corporation - India
- Power Finance Corporation Ltd., India
- ASAPP Information Group - India
- Australian Coal Association
- Sinarmas Energy and Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Gujarat Sidhee Cement - India
- Indika Energy - Indonesia
- Rio Tinto Coal - Australia
- Siam City Cement - Thailand
- GVK Power & Infra Limited - India
- Ministry of Mines - Canada
- PowerSource Philippines DevCo
- PetroVietnam Power Coal Import and Supply Company
- Kepco SPC Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Standard Chartered Bank - UAE
- Rashtriya Ispat Nigam Limited - India
- Sindya Power Generating Company Private Ltd
- SMG Consultants - Indonesia
- IEA Clean Coal Centre - UK
- TNB Fuel Sdn Bhd - Malaysia
- TeaM Sual Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Bhatia International Limited - India
- Posco Energy - South Korea
- Mercuria Energy - Indonesia
- Petron Corporation, Philippines
- Kumho Petrochemical, South Korea
- Medco Energi Mining Internasional
- Carbofer General Trading SA - India
- Edison Trading Spa - Italy
- Asmin Koalindo Tuhup - Indonesia
- PNOC Exploration Corporation - Philippines
- Marubeni Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Globalindo Alam Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
- Oldendorff Carriers - Singapore
- Essar Steel Hazira Ltd - India
- Energy Development Corp, Philippines
- Renaissance Capital - South Africa
- Romanian Commodities Exchange
- Leighton Contractors Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- Videocon Industries ltd - India
- LBH Netherlands Bv - Netherlands
- Mjunction Services Limited - India
- The University of Queensland
- Manunggal Multi Energi - Indonesia
- Bhushan Steel Limited - India
- Australian Commodity Traders Exchange
- Bukit Makmur.PT - Indonesia
- Wilmar Investment Holdings
- Thai Mozambique Logistica
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Formosa Plastics Group - Taiwan
- Star Paper Mills Limited - India
- Riau Bara Harum - Indonesia
- Attock Cement Pakistan Limited
- IHS Mccloskey Coal Group - USA
- Indonesian Coal Mining Association
- Global Green Power PLC Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Metalloyd Limited - United Kingdom
- Barasentosa Lestari - Indonesia
- Altura Mining Limited, Indonesia
- Straits Asia Resources Limited - Singapore
- Port Waratah Coal Services - Australia
- Sical Logistics Limited - India
- Independent Power Producers Association of India
- Bukit Baiduri Energy - Indonesia
- Indogreen Group - Indonesia
- Orica Australia Pty. Ltd.
- Larsen & Toubro Limited - India
- Malabar Cements Ltd - India
- Antam Resourcindo - Indonesia
- Bulk Trading Sa - Switzerland
- Ind-Barath Power Infra Limited - India
- Deloitte Consulting - India
- Sakthi Sugars Limited - India
- Makarim & Taira - Indonesia
- Intertek Mineral Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- SMC Global Power, Philippines
- AsiaOL BioFuels Corp., Philippines
- Sree Jayajothi Cements Limited - India
- Parliament of New Zealand
- Wood Mackenzie - Singapore
- Electricity Generating Authority of Thailand
- Latin American Coal - Colombia
- India Bulls Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Chamber of Mines of South Africa
- McConnell Dowell - Australia
- Interocean Group of Companies - India
- The Treasury - Australian Government
- Trasteel International SA, Italy
- Energy Link Ltd, New Zealand
- PTC India Limited - India
- International Coal Ventures Pvt Ltd - India
- Planning Commission, India
- Agrawal Coal Company - India
- Karbindo Abesyapradhi - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Vedanta Resources Plc - India
- Savvy Resources Ltd - HongKong
- Kohat Cement Company Ltd. - Pakistan
- OPG Power Generation Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Kaltim Prima Coal - Indonesia
- Electricity Authority, New Zealand
- Cement Manufacturers Association - India
- Semirara Mining Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Siam City Cement PLC, Thailand
- Central Java Power - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kapuas Tunggal Persada - Indonesia
- Aditya Birla Group - India
- Karaikal Port Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thiess Contractors Indonesia
- Alfred C Toepfer International GmbH - Germany
- ICICI Bank Limited - India
- Heidelberg Cement - Germany
- Indian Oil Corporation Limited
- Kobexindo Tractors - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Madhucon Powers Ltd - India
- Anglo American - United Kingdom
- Georgia Ports Authority, United States
- Bahari Cakrawala Sebuku - Indonesia
- London Commodity Brokers - England
- Eastern Energy - Thailand
- Mercator Lines Limited - India
- Commonwealth Bank - Australia
- Global Business Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Iligan Light & Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- MS Steel International - UAE
- San Jose City I Power Corp, Philippines
- Minerals Council of Australia
- Grasim Industreis Ltd - India
- Orica Mining Services - Indonesia
- CIMB Investment Bank - Malaysia
- Singapore Mercantile Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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