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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, 20 September 12
DRY BULK INCHES FORWARD AFTER WEEKS OF BELOW PAR PERFORMANCE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has started to revive from its ashed, as the past couple of days, traders have reported an increased activity from China, result ...
Wednesday, 19 September 12
CHURCHILL STRENGTHENS LITIGATION TEAM WITH APPOINTMENT OF NICHOLAS SMITH AS MANAGING DIRECTOR
COALspot.com - Churchill Mining PLC (AIM: CHL) has announced that, Mr Nicholas Smith has joined the board of the Company and has been appointed as t ...
Wednesday, 19 September 12
DRY BULK TERMINALS SINGAPORE
Press Release - Dry bulk terminals are used all around the world to handle large quantities of bulk materials, like minerals, grains, etc. In today& ...
Tuesday, 18 September 12
JORC CODE REVISION - EXPOSURE DRAFT RELEASED FOR COMMENT
COALspot.com - The Australasian Joint Ore Reserves Committee (JORC) has today released for public comment the exposure draft of the JORC Code (2012) ...
Monday, 17 September 12
YEAR TO DATE, BUMA PRODUCED 231.1 MILLION BCM OF OVERBURDEN
COALspot.com - PT. Delta Dunia Makmur Tbk has removed 31.5 million bcm (+6.0 percent YoY) overburden in August 2012 totaled 31.5 million bcm ( ...
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- Indo Tambangraya Megah - Indonesia
- Tata Chemicals Ltd - India
- Edison Trading Spa - Italy
- Vizag Seaport Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Directorate General of MIneral and Coal - Indonesia
- Barasentosa Lestari - Indonesia
- Oldendorff Carriers - Singapore
- Deloitte Consulting - India
- Mercuria Energy - Indonesia
- CNBM International Corporation - China
- Bharathi Cement Corporation - India
- Latin American Coal - Colombia
- Independent Power Producers Association of India
- Bahari Cakrawala Sebuku - Indonesia
- Global Green Power PLC Corporation, Philippines
- Orica Mining Services - Indonesia
- MS Steel International - UAE
- Energy Development Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Simpson Spence & Young - Indonesia
- Indian Oil Corporation Limited
- Formosa Plastics Group - Taiwan
- Therma Luzon, Inc, Philippines
- Savvy Resources Ltd - HongKong
- Krishnapatnam Port Company Ltd. - India
- Romanian Commodities Exchange
- Riau Bara Harum - Indonesia
- Australian Coal Association
- Petrochimia International Co. Ltd.- Taiwan
- GAC Shipping (India) Pvt Ltd
- Gujarat Mineral Development Corp Ltd - India
- Africa Commodities Group - South Africa
- ASAPP Information Group - India
- Siam City Cement - Thailand
- Antam Resourcindo - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Indonesian Coal Mining Association
- Price Waterhouse Coopers - Russia
- Holcim Trading Pte Ltd - Singapore
- Mjunction Services Limited - India
- Maheswari Brothers Coal Limited - India
- Metalloyd Limited - United Kingdom
- Borneo Indobara - Indonesia
- Sojitz Corporation - Japan
- Wood Mackenzie - Singapore
- Planning Commission, India
- VISA Power Limited - India
- Standard Chartered Bank - UAE
- Salva Resources Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Petron Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Agrawal Coal Company - India
- McConnell Dowell - Australia
- Minerals Council of Australia
- Grasim Industreis Ltd - India
- Coastal Gujarat Power Limited - India
- SMG Consultants - Indonesia
- Australian Commodity Traders Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- London Commodity Brokers - England
- Anglo American - United Kingdom
- PTC India Limited - India
- Ministry of Finance - Indonesia
- Altura Mining Limited, Indonesia
- Ministry of Transport, Egypt
- ICICI Bank Limited - India
- Kobexindo Tractors - Indoneisa
- Indogreen Group - Indonesia
- Trasteel International SA, Italy
- Baramulti Group, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thai Mozambique Logistica
- Ministry of Mines - Canada
- Manunggal Multi Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- South Luzon Thermal Energy Corporation
- Banpu Public Company Limited - Thailand
- Vedanta Resources Plc - India
- Posco Energy - South Korea
- The Treasury - Australian Government
- Toyota Tsusho Corporation, Japan
- SMC Global Power, Philippines
- Bukit Makmur.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Star Paper Mills Limited - India
- India Bulls Power Limited - India
- Aditya Birla Group - India
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Bukit Baiduri Energy - Indonesia
- Rio Tinto Coal - Australia
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Wilmar Investment Holdings
- Kideco Jaya Agung - Indonesia
- International Coal Ventures Pvt Ltd - India
- Heidelberg Cement - Germany
- SN Aboitiz Power Inc, Philippines
- The University of Queensland
- Rashtriya Ispat Nigam Limited - India
- Gujarat Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Jindal Steel & Power Ltd - India
- Dalmia Cement Bharat India
- Bukit Asam (Persero) Tbk - Indonesia
- Thiess Contractors Indonesia
- Cement Manufacturers Association - India
- PowerSource Philippines DevCo
- Bangladesh Power Developement Board
- San Jose City I Power Corp, Philippines
- Lanco Infratech Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Electricity Authority, New Zealand
- Meenaskhi Energy Private Limited - India
- IHS Mccloskey Coal Group - USA
- Bhatia International Limited - India
- Economic Council, Georgia
- Eastern Energy - Thailand
- Samtan Co., Ltd - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Commonwealth Bank - Australia
- Indika Energy - Indonesia
- Georgia Ports Authority, United States
- Xindia Steels Limited - India
- Global Coal Blending Company Limited - Australia
- GN Power Mariveles Coal Plant, Philippines
- Parliament of New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- GVK Power & Infra Limited - India
- Sindya Power Generating Company Private Ltd
- PNOC Exploration Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Chamber of Mines of South Africa
- Eastern Coal Council - USA
- GMR Energy Limited - India
- Renaissance Capital - South Africa
- Sical Logistics Limited - India
- Videocon Industries ltd - India
- Ceylon Electricity Board - Sri Lanka
- Bhushan Steel Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Central Electricity Authority - India
- Jorong Barutama Greston.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Intertek Mineral Services - Indonesia
- Interocean Group of Companies - India
- Mercator Lines Limited - India
- Goldman Sachs - Singapore
- Indian Energy Exchange, India
- Coalindo Energy - Indonesia
- Power Finance Corporation Ltd., India
- TeaM Sual Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- The State Trading Corporation of India Ltd
- Kumho Petrochemical, South Korea
- Bayan Resources Tbk. - Indonesia
- Globalindo Alam Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Kepco SPC Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Iligan Light & Power Inc, Philippines
- Attock Cement Pakistan Limited
- Karaikal Port Pvt Ltd - India
- New Zealand Coal & Carbon
- IEA Clean Coal Centre - UK
- Sakthi Sugars Limited - India
- Aboitiz Power Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Global Business Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Maharashtra Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Ind-Barath Power Infra Limited - India
- Mintek Dendrill Indonesia
- Ambuja Cements Ltd - India
- Parry Sugars Refinery, India
- Madhucon Powers Ltd - India
- European Bulk Services B.V. - Netherlands
- Essar Steel Hazira Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Makarim & Taira - Indonesia
- Malabar Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Bhoruka Overseas - Indonesia
- White Energy Company Limited
- Medco Energi Mining Internasional
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- Kaltim Prima Coal - Indonesia
- Merrill Lynch Commodities Europe
- Carbofer General Trading SA - India
- Tamil Nadu electricity Board
- Sree Jayajothi Cements Limited - India
- Kartika Selabumi Mining - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Orica Australia Pty. Ltd.
- Larsen & Toubro Limited - India
- Jaiprakash Power Ventures ltd
- Energy Link Ltd, New Zealand
- Marubeni Corporation - India
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