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