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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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- Carbofer General Trading SA - India
- Merrill Lynch Commodities Europe
- Baramulti Group, Indonesia
- Jaiprakash Power Ventures ltd
- Timah Investasi Mineral - Indoneisa
- Therma Luzon, Inc, Philippines
- Bulk Trading Sa - Switzerland
- India Bulls Power Limited - India
- Meralco Power Generation, Philippines
- South Luzon Thermal Energy Corporation
- Power Finance Corporation Ltd., India
- Port Waratah Coal Services - Australia
- Barasentosa Lestari - Indonesia
- Wood Mackenzie - Singapore
- Global Green Power PLC Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Marubeni Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Cement Manufacturers Association - India
- Binh Thuan Hamico - Vietnam
- London Commodity Brokers - England
- Miang Besar Coal Terminal - Indonesia
- Goldman Sachs - Singapore
- Sarangani Energy Corporation, Philippines
- Sakthi Sugars Limited - India
- Semirara Mining Corp, Philippines
- Makarim & Taira - Indonesia
- Manunggal Multi Energi - Indonesia
- Indika Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Borneo Indobara - Indonesia
- Electricity Authority, New Zealand
- Madhucon Powers Ltd - India
- Indian Energy Exchange, India
- Africa Commodities Group - South Africa
- Minerals Council of Australia
- VISA Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GMR Energy Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mintek Dendrill Indonesia
- Economic Council, Georgia
- Jindal Steel & Power Ltd - India
- Coal and Oil Company - UAE
- Singapore Mercantile Exchange
- Siam City Cement - Thailand
- Global Coal Blending Company Limited - Australia
- Australian Coal Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Energy Link Ltd, New Zealand
- Samtan Co., Ltd - South Korea
- Maheswari Brothers Coal Limited - India
- Ministry of Transport, Egypt
- Independent Power Producers Association of India
- Leighton Contractors Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- Chettinad Cement Corporation Ltd - India
- SN Aboitiz Power Inc, Philippines
- Renaissance Capital - South Africa
- Oldendorff Carriers - Singapore
- Electricity Generating Authority of Thailand
- Wilmar Investment Holdings
- Essar Steel Hazira Ltd - India
- IEA Clean Coal Centre - UK
- SMC Global Power, Philippines
- Anglo American - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- Thai Mozambique Logistica
- Grasim Industreis Ltd - India
- Eastern Energy - Thailand
- Riau Bara Harum - Indonesia
- Australian Commodity Traders Exchange
- Vizag Seaport Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- McConnell Dowell - Australia
- Price Waterhouse Coopers - Russia
- Coastal Gujarat Power Limited - India
- Coalindo Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- LBH Netherlands Bv - Netherlands
- Globalindo Alam Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- Commonwealth Bank - Australia
- GVK Power & Infra Limited - India
- Indonesian Coal Mining Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Ministry of Mines - Canada
- Indo Tambangraya Megah - Indonesia
- Kideco Jaya Agung - Indonesia
- OPG Power Generation Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Vedanta Resources Plc - India
- Ind-Barath Power Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bangladesh Power Developement Board
- Romanian Commodities Exchange
- Xindia Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Attock Cement Pakistan Limited
- Georgia Ports Authority, United States
- Vijayanagar Sugar Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Deloitte Consulting - India
- New Zealand Coal & Carbon
- Orica Mining Services - Indonesia
- Videocon Industries ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bayan Resources Tbk. - Indonesia
- Latin American Coal - Colombia
- Orica Australia Pty. Ltd.
- Trasteel International SA, Italy
- Gujarat Sidhee Cement - India
- Petrochimia International Co. Ltd.- Taiwan
- Global Business Power Corporation, Philippines
- Eastern Coal Council - USA
- SMG Consultants - Indonesia
- Indogreen Group - Indonesia
- Krishnapatnam Port Company Ltd. - India
- ICICI Bank Limited - India
- Medco Energi Mining Internasional
- Bhushan Steel Limited - India
- Karaikal Port Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Siam City Cement PLC, Thailand
- PTC India Limited - India
- ASAPP Information Group - India
- Simpson Spence & Young - Indonesia
- Chamber of Mines of South Africa
- Uttam Galva Steels Limited - India
- Ministry of Finance - Indonesia
- Antam Resourcindo - Indonesia
- Iligan Light & Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Central Electricity Authority - India
- Savvy Resources Ltd - HongKong
- Agrawal Coal Company - India
- The University of Queensland
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Baiduri Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- International Coal Ventures Pvt Ltd - India
- Aditya Birla Group - India
- Holcim Trading Pte Ltd - Singapore
- Central Java Power - Indonesia
- Directorate Of Revenue Intelligence - India
- Asmin Koalindo Tuhup - Indonesia
- Meenaskhi Energy Private Limited - India
- Star Paper Mills Limited - India
- Kobexindo Tractors - Indoneisa
- Energy Development Corp, Philippines
- IHS Mccloskey Coal Group - USA
- The Treasury - Australian Government
- Alfred C Toepfer International GmbH - Germany
- Rio Tinto Coal - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TeaM Sual Corporation - Philippines
- Altura Mining Limited, Indonesia
- Tamil Nadu electricity Board
- Gujarat Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Parliament of New Zealand
- Parry Sugars Refinery, India
- Bhoruka Overseas - Indonesia
- Sical Logistics Limited - India
- CIMB Investment Bank - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Intertek Mineral Services - Indonesia
- Bharathi Cement Corporation - India
- The State Trading Corporation of India Ltd
- Indian Oil Corporation Limited
- Petron Corporation, Philippines
- Bhatia International Limited - India
- Interocean Group of Companies - India
- Ambuja Cements Ltd - India
- Kumho Petrochemical, South Korea
- Standard Chartered Bank - UAE
- Kepco SPC Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Dalmia Cement Bharat India
- Malabar Cements Ltd - India
- Larsen & Toubro Limited - India
- Sojitz Corporation - Japan
- Banpu Public Company Limited - Thailand
- Thiess Contractors Indonesia
- Sindya Power Generating Company Private Ltd
- European Bulk Services B.V. - Netherlands
- Planning Commission, India
- White Energy Company Limited
- Cigading International Bulk Terminal - Indonesia
- Mercator Lines Limited - India
- PowerSource Philippines DevCo
- CNBM International Corporation - China
- Neyveli Lignite Corporation Ltd, - India
- Salva Resources Pvt Ltd - India
- Edison Trading Spa - Italy
- Pendopo Energi Batubara - Indonesia
- Tata Chemicals Ltd - India
- Mjunction Services Limited - India
- Mercuria Energy - Indonesia
- Metalloyd Limited - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- PNOC Exploration Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Heidelberg Cement - Germany
- Jorong Barutama Greston.PT - Indonesia
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