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