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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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Saturday, 11 February 12
WILL HISTORY REPEAT ITSELF IN THIS SHIPPING CYCLE? - CLARKSONS / HELLENIC SHIPPING
A slightly dubious "best man" joke runs as follows… Best man (giving his wedding speech): "Have you noticed how history repeat ...
Friday, 10 February 12
TONNAGE KEEPS ON COMING - DREWRY
Drewry Maritime Research’s latest edition of its Dry Bulk Forecaster pulls no punches in its assessment of a market that looks certain to cont ...
Friday, 10 February 12
GIVE PERMIT POWERS TO GOVERNORS: MINERS - THE JAKARTA POST
The Jakarta Post reported that, following clashes between mining companies and local residents, the Indonesian Mining Association (IMA) wants to tra ...
Thursday, 09 February 12
AUSTRALIA'S EPIC TO ACQUIRE 15,500 HA COAL EXPLORATION LICENCES IN EAST KALIMANTAN, INDONESIA
COALspot.com - Epic Resources Limited to acquire two coal concessions in Kutai Barat regency, East Kalimantan, Indonesia.
According to company's ...
Thursday, 09 February 12
RESOURCE ALAM BUYS 28,521HA CONCESSIONS - INSIDER STORIES
Insider Stories reported that, PT Resource Alam Indonesia Tbk (KKGI), owned by Adijanto family, today announced acquisition of 75% interest in PT Ka ...
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- Bhushan Steel Limited - India
- Commonwealth Bank - Australia
- Lanco Infratech Ltd - India
- White Energy Company Limited
- Edison Trading Spa - Italy
- Orica Australia Pty. Ltd.
- Ind-Barath Power Infra Limited - India
- Tamil Nadu electricity Board
- Sakthi Sugars Limited - India
- OPG Power Generation Pvt Ltd - India
- Coal and Oil Company - UAE
- Sical Logistics Limited - India
- Merrill Lynch Commodities Europe
- Central Electricity Authority - India
- Toyota Tsusho Corporation, Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bangladesh Power Developement Board
- Standard Chartered Bank - UAE
- Global Coal Blending Company Limited - Australia
- GVK Power & Infra Limited - India
- Jaiprakash Power Ventures ltd
- Global Green Power PLC Corporation, Philippines
- Marubeni Corporation - India
- Banpu Public Company Limited - Thailand
- Karaikal Port Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Binh Thuan Hamico - Vietnam
- Larsen & Toubro Limited - India
- Timah Investasi Mineral - Indoneisa
- Directorate Of Revenue Intelligence - India
- Billiton Holdings Pty Ltd - Australia
- Parry Sugars Refinery, India
- Kartika Selabumi Mining - Indonesia
- Riau Bara Harum - Indonesia
- Gujarat Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Baramulti Group, Indonesia
- Sojitz Corporation - Japan
- Energy Development Corp, Philippines
- Latin American Coal - Colombia
- Sarangani Energy Corporation, Philippines
- Australian Commodity Traders Exchange
- Krishnapatnam Port Company Ltd. - India
- Singapore Mercantile Exchange
- Attock Cement Pakistan Limited
- Bhoruka Overseas - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Borneo Indobara - Indonesia
- McConnell Dowell - Australia
- Uttam Galva Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Intertek Mineral Services - Indonesia
- Mercuria Energy - Indonesia
- Chamber of Mines of South Africa
- Bharathi Cement Corporation - India
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Electricity Generating Authority of Thailand
- Dalmia Cement Bharat India
- Aditya Birla Group - India
- Georgia Ports Authority, United States
- Manunggal Multi Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- IHS Mccloskey Coal Group - USA
- Jorong Barutama Greston.PT - Indonesia
- ASAPP Information Group - India
- Planning Commission, India
- Independent Power Producers Association of India
- Minerals Council of Australia
- CIMB Investment Bank - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Australian Coal Association
- Heidelberg Cement - Germany
- Bahari Cakrawala Sebuku - Indonesia
- Energy Link Ltd, New Zealand
- Eastern Coal Council - USA
- Malabar Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- Power Finance Corporation Ltd., India
- Africa Commodities Group - South Africa
- PNOC Exploration Corporation - Philippines
- PowerSource Philippines DevCo
- SMC Global Power, Philippines
- Oldendorff Carriers - Singapore
- Salva Resources Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Price Waterhouse Coopers - Russia
- GAC Shipping (India) Pvt Ltd
- Medco Energi Mining Internasional
- Indogreen Group - Indonesia
- Coastal Gujarat Power Limited - India
- Videocon Industries ltd - India
- MS Steel International - UAE
- Indo Tambangraya Megah - Indonesia
- Indian Energy Exchange, India
- Interocean Group of Companies - India
- Sindya Power Generating Company Private Ltd
- New Zealand Coal & Carbon
- Ministry of Finance - Indonesia
- Orica Mining Services - Indonesia
- Semirara Mining Corp, Philippines
- Coalindo Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Essar Steel Hazira Ltd - India
- Rio Tinto Coal - Australia
- Altura Mining Limited, Indonesia
- Bayan Resources Tbk. - Indonesia
- The Treasury - Australian Government
- Aboitiz Power Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Xindia Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- Indika Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Kideco Jaya Agung - Indonesia
- Simpson Spence & Young - Indonesia
- Economic Council, Georgia
- Meenaskhi Energy Private Limited - India
- Savvy Resources Ltd - HongKong
- Kohat Cement Company Ltd. - Pakistan
- Ceylon Electricity Board - Sri Lanka
- SMG Consultants - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Barasentosa Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Anglo American - United Kingdom
- Sree Jayajothi Cements Limited - India
- Globalindo Alam Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Kobexindo Tractors - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Metalloyd Limited - United Kingdom
- Jindal Steel & Power Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Electricity Authority, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Makarim & Taira - Indonesia
- ICICI Bank Limited - India
- Siam City Cement PLC, Thailand
- IEA Clean Coal Centre - UK
- Parliament of New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Port Waratah Coal Services - Australia
- Kumho Petrochemical, South Korea
- Mercator Lines Limited - India
- Central Java Power - Indonesia
- Carbofer General Trading SA - India
- Madhucon Powers Ltd - India
- Trasteel International SA, Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thiess Contractors Indonesia
- Cement Manufacturers Association - India
- Tata Chemicals Ltd - India
- Renaissance Capital - South Africa
- The University of Queensland
- VISA Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Mintek Dendrill Indonesia
- GMR Energy Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- CNBM International Corporation - China
- Samtan Co., Ltd - South Korea
- Alfred C Toepfer International GmbH - Germany
- Meralco Power Generation, Philippines
- Eastern Energy - Thailand
- TeaM Sual Corporation - Philippines
- Vedanta Resources Plc - India
- Ambuja Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Bukit Baiduri Energy - Indonesia
- The State Trading Corporation of India Ltd
- Ministry of Transport, Egypt
- Neyveli Lignite Corporation Ltd, - India
- Bulk Trading Sa - Switzerland
- Kepco SPC Power Corporation, Philippines
- Indian Oil Corporation Limited
- Thai Mozambique Logistica
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- Iligan Light & Power Inc, Philippines
- Wilmar Investment Holdings
- Indonesian Coal Mining Association
- Grasim Industreis Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Mjunction Services Limited - India
- Siam City Cement - Thailand
- Formosa Plastics Group - Taiwan
- Wood Mackenzie - Singapore
- London Commodity Brokers - England
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Romanian Commodities Exchange
- Deloitte Consulting - India
- PTC India Limited - India
- Petron Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Star Paper Mills Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Agrawal Coal Company - India
- Petrochimia International Co. Ltd.- Taiwan
- Bhatia International Limited - India
- Posco Energy - South Korea
- Therma Luzon, Inc, Philippines
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