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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, 07 March 12
ASSESS ASIAS POTENTIAL, DEVELOPMENTS AND APPETITE FOR SHALE AT SHALE GAS SUMMIT
Press Release - Assess Asia’s Potential, Developments and Appetite for Shale at Shale Gas Summit on 23-24 Apr, 2012 in Beijing
China is rep ...
Wednesday, 07 March 12
3RD MOZAMBIQUE COAL CONFERENCE
3rd Mozambique Coal Conference
2-4 July 2012 | Joaquim Chissano International Conference Centre , Maputo, Mozambique
http://www.immevents.com/mo ...
Wednesday, 07 March 12
DRY BULK MARKET KEEPS UP TIMID REBOUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept its rising momentum yesterday, rising for the eighth straight session, on the back of renewed demand for smaller bulk c ...
Wednesday, 07 March 12
BUKIT ASAM EYES 39% RISE IN COAL SALES - INSIDER STORIES
Insider Stories reported that, PT Bukit Asam Tbk is scouting a 39% increase in coal sales volume to 18.66 million tons this year from last year with ...
Wednesday, 07 March 12
PETROSEA SEALS US$188 MIO CONTRACT - INSIDER STORIES
Insider Stories reported that, coal mining contractor PT Petrosea Tbk has secured a US$188 million additional contract from its affiliated firm PT S ...
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- Sree Jayajothi Cements Limited - India
- Central Electricity Authority - India
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- Agrawal Coal Company - India
- Thiess Contractors Indonesia
- Mercator Lines Limited - India
- Jaiprakash Power Ventures ltd
- Star Paper Mills Limited - India
- Rio Tinto Coal - Australia
- CNBM International Corporation - China
- Formosa Plastics Group - Taiwan
- Heidelberg Cement - Germany
- Salva Resources Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Kideco Jaya Agung - Indonesia
- GVK Power & Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Electricity Generating Authority of Thailand
- Africa Commodities Group - South Africa
- Sakthi Sugars Limited - India
- ASAPP Information Group - India
- SMG Consultants - Indonesia
- Chettinad Cement Corporation Ltd - India
- Electricity Authority, New Zealand
- LBH Netherlands Bv - Netherlands
- Indian Oil Corporation Limited
- Ministry of Transport, Egypt
- Power Finance Corporation Ltd., India
- Port Waratah Coal Services - Australia
- Madhucon Powers Ltd - India
- Singapore Mercantile Exchange
- Ministry of Mines - Canada
- Sical Logistics Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- AsiaOL BioFuels Corp., Philippines
- Coastal Gujarat Power Limited - India
- Planning Commission, India
- Dalmia Cement Bharat India
- Makarim & Taira - Indonesia
- Latin American Coal - Colombia
- Trasteel International SA, Italy
- Interocean Group of Companies - India
- Wood Mackenzie - Singapore
- Directorate Of Revenue Intelligence - India
- GMR Energy Limited - India
- Bhoruka Overseas - Indonesia
- Sindya Power Generating Company Private Ltd
- Global Coal Blending Company Limited - Australia
- Ind-Barath Power Infra Limited - India
- Wilmar Investment Holdings
- Attock Cement Pakistan Limited
- Bhushan Steel Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Australian Commodity Traders Exchange
- Minerals Council of Australia
- Borneo Indobara - Indonesia
- Siam City Cement - Thailand
- Orica Mining Services - Indonesia
- Metalloyd Limited - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Asmin Koalindo Tuhup - Indonesia
- Grasim Industreis Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Carbofer General Trading SA - India
- Coal and Oil Company - UAE
- Cigading International Bulk Terminal - Indonesia
- Commonwealth Bank - Australia
- GAC Shipping (India) Pvt Ltd
- Manunggal Multi Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Chamber of Mines of South Africa
- Banpu Public Company Limited - Thailand
- Deloitte Consulting - India
- Gujarat Mineral Development Corp Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- VISA Power Limited - India
- Georgia Ports Authority, United States
- Orica Australia Pty. Ltd.
- IEA Clean Coal Centre - UK
- Kobexindo Tractors - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- PTC India Limited - India
- ICICI Bank Limited - India
- Oldendorff Carriers - Singapore
- PNOC Exploration Corporation - Philippines
- Indika Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- London Commodity Brokers - England
- Maheswari Brothers Coal Limited - India
- Parry Sugars Refinery, India
- Standard Chartered Bank - UAE
- Aboitiz Power Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Aditya Birla Group - India
- Videocon Industries ltd - India
- Kapuas Tunggal Persada - Indonesia
- Independent Power Producers Association of India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Cement Manufacturers Association - India
- Mintek Dendrill Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Savvy Resources Ltd - HongKong
- Mercuria Energy - Indonesia
- San Jose City I Power Corp, Philippines
- McConnell Dowell - Australia
- The Treasury - Australian Government
- OPG Power Generation Pvt Ltd - India
- Parliament of New Zealand
- Ceylon Electricity Board - Sri Lanka
- Tamil Nadu electricity Board
- Global Business Power Corporation, Philippines
- Eastern Energy - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Riau Bara Harum - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Merrill Lynch Commodities Europe
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vizag Seaport Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Uttam Galva Steels Limited - India
- Altura Mining Limited, Indonesia
- Malabar Cements Ltd - India
- Central Java Power - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhatia International Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bahari Cakrawala Sebuku - Indonesia
- Economic Council, Georgia
- Samtan Co., Ltd - South Korea
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- Posco Energy - South Korea
- Billiton Holdings Pty Ltd - Australia
- Vedanta Resources Plc - India
- Sarangani Energy Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- PowerSource Philippines DevCo
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Energy Development Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- SN Aboitiz Power Inc, Philippines
- White Energy Company Limited
- Toyota Tsusho Corporation, Japan
- Antam Resourcindo - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- MS Steel International - UAE
- Sojitz Corporation - Japan
- Goldman Sachs - Singapore
- Australian Coal Association
- Lanco Infratech Ltd - India
- South Luzon Thermal Energy Corporation
- IHS Mccloskey Coal Group - USA
- Gujarat Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Anglo American - United Kingdom
- Marubeni Corporation - India
- Karaikal Port Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Kumho Petrochemical, South Korea
- Straits Asia Resources Limited - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Indo Tambangraya Megah - Indonesia
- Essar Steel Hazira Ltd - India
- Petron Corporation, Philippines
- India Bulls Power Limited - India
- Binh Thuan Hamico - Vietnam
- Ambuja Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indogreen Group - Indonesia
- Bangladesh Power Developement Board
- Medco Energi Mining Internasional
- Tata Chemicals Ltd - India
- SMC Global Power, Philippines
- Indonesian Coal Mining Association
- Globalindo Alam Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Mjunction Services Limited - India
- Edison Trading Spa - Italy
- Larsen & Toubro Limited - India
- Romanian Commodities Exchange
- GN Power Mariveles Coal Plant, Philippines
- Coalindo Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Simpson Spence & Young - Indonesia
- Meenaskhi Energy Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Renaissance Capital - South Africa
- Gujarat Sidhee Cement - India
- Bharathi Cement Corporation - India
- New Zealand Coal & Carbon
- Barasentosa Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Thai Mozambique Logistica
- Semirara Mining Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rashtriya Ispat Nigam Limited - India
- Jindal Steel & Power Ltd - India
- Energy Link Ltd, New Zealand
- Baramulti Group, Indonesia
- The University of Queensland
- Therma Luzon, Inc, Philippines
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