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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, 15 September 11
INDIAN GOVT PLANS TO DEVELOP 9 NEW MAJOR PORTS BY 2016 - INVEST MONEY / HELLENIC SHIPPING
The government has announced to make a investment of more than Rs 22,000 crore (approximately US$ 4,623,791,331) to develop nine new major ...
Thursday, 15 September 11
BOTSWANA COAL AND ENERGY CONFERENCE 2011
Press Release - Botswana Coal and Energy Conference 2011 | 29-30 November 2011 | Gaborone. Botswana represents Africa’s exciting new coal and ...
Thursday, 15 September 11
DRY BULK MARKET EDGING FURTHER UP THE SCALE, CLOSING IN ON 2,000 POINTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market was up once again yesterday, reaching 1,927 points, or 1.375 higher on the day. Thus, it has kept its rising trend established d ...
Wednesday, 14 September 11
INDO STRAITS BAGS 2.4 MILLION TON COAL TRANSPORTATION CONTRACT FROM ARUTMIN
COALspot.com - PT Indo Straits Tbk (PTIS) bagged a contract to tranship about 2.40 million tons of coal over an initial period of 6 months fro ...
Wednesday, 14 September 11
DUTA PERTIWI DISCOVERS COAL RESERVE - INSIDER STORIES
Insider Stories reported that, PT Duta Pertiwi Nusantara Tbk (DPNS) yesterday steeply jumped 24.56% to Rp710 a share after the company discove ...
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- Independent Power Producers Association of India
- Meenaskhi Energy Private Limited - India
- Savvy Resources Ltd - HongKong
- Barasentosa Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- TeaM Sual Corporation - Philippines
- Madhucon Powers Ltd - India
- Globalindo Alam Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- OPG Power Generation Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Bangladesh Power Developement Board
- Banpu Public Company Limited - Thailand
- Karaikal Port Pvt Ltd - India
- Grasim Industreis Ltd - India
- PTC India Limited - India
- Uttam Galva Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Interocean Group of Companies - India
- Kalimantan Lumbung Energi - Indonesia
- Malabar Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Cement Manufacturers Association - India
- Bukit Baiduri Energy - Indonesia
- Siam City Cement - Thailand
- Commonwealth Bank - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Star Paper Mills Limited - India
- Australian Commodity Traders Exchange
- Ministry of Transport, Egypt
- Eastern Coal Council - USA
- Iligan Light & Power Inc, Philippines
- Australian Coal Association
- The Treasury - Australian Government
- Orica Australia Pty. Ltd.
- Jaiprakash Power Ventures ltd
- Xindia Steels Limited - India
- Kobexindo Tractors - Indoneisa
- Price Waterhouse Coopers - Russia
- New Zealand Coal & Carbon
- GN Power Mariveles Coal Plant, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining Corp, Philippines
- Gujarat Sidhee Cement - India
- Formosa Plastics Group - Taiwan
- Economic Council, Georgia
- Petrochimia International Co. Ltd.- Taiwan
- GAC Shipping (India) Pvt Ltd
- Coalindo Energy - Indonesia
- Indonesian Coal Mining Association
- Chamber of Mines of South Africa
- Parliament of New Zealand
- Medco Energi Mining Internasional
- TNB Fuel Sdn Bhd - Malaysia
- LBH Netherlands Bv - Netherlands
- Mercator Lines Limited - India
- Toyota Tsusho Corporation, Japan
- Global Business Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Marubeni Corporation - India
- Africa Commodities Group - South Africa
- Central Java Power - Indonesia
- Electricity Authority, New Zealand
- Central Electricity Authority - India
- Energy Link Ltd, New Zealand
- Larsen & Toubro Limited - India
- Sinarmas Energy and Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- VISA Power Limited - India
- Sindya Power Generating Company Private Ltd
- The State Trading Corporation of India Ltd
- Global Green Power PLC Corporation, Philippines
- Wilmar Investment Holdings
- AsiaOL BioFuels Corp., Philippines
- Vedanta Resources Plc - India
- Singapore Mercantile Exchange
- Makarim & Taira - Indonesia
- Merrill Lynch Commodities Europe
- Bhushan Steel Limited - India
- Sarangani Energy Corporation, Philippines
- Eastern Energy - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asmin Koalindo Tuhup - Indonesia
- Sakthi Sugars Limited - India
- Kaltim Prima Coal - Indonesia
- SMG Consultants - Indonesia
- Minerals Council of Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Lanco Infratech Ltd - India
- South Luzon Thermal Energy Corporation
- Maharashtra Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Electricity Generating Authority of Thailand
- Parry Sugars Refinery, India
- International Coal Ventures Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Coal and Oil Company - UAE
- CNBM International Corporation - China
- Directorate General of MIneral and Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Anglo American - United Kingdom
- Indika Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- ASAPP Information Group - India
- Bhatia International Limited - India
- Thai Mozambique Logistica
- Trasteel International SA, Italy
- Indogreen Group - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- IEA Clean Coal Centre - UK
- GMR Energy Limited - India
- Georgia Ports Authority, United States
- MS Steel International - UAE
- India Bulls Power Limited - India
- Planning Commission, India
- Carbofer General Trading SA - India
- Edison Trading Spa - Italy
- Kohat Cement Company Ltd. - Pakistan
- Bulk Trading Sa - Switzerland
- Ind-Barath Power Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Vizag Seaport Private Limited - India
- PowerSource Philippines DevCo
- CIMB Investment Bank - Malaysia
- Salva Resources Pvt Ltd - India
- Renaissance Capital - South Africa
- Ambuja Cements Ltd - India
- ICICI Bank Limited - India
- Port Waratah Coal Services - Australia
- Mercuria Energy - Indonesia
- Posco Energy - South Korea
- Energy Development Corp, Philippines
- London Commodity Brokers - England
- Holcim Trading Pte Ltd - Singapore
- San Jose City I Power Corp, Philippines
- Heidelberg Cement - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Videocon Industries ltd - India
- Rio Tinto Coal - Australia
- Oldendorff Carriers - Singapore
- Therma Luzon, Inc, Philippines
- Jindal Steel & Power Ltd - India
- Timah Investasi Mineral - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Agrawal Coal Company - India
- Manunggal Multi Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- Antam Resourcindo - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karbindo Abesyapradhi - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Romanian Commodities Exchange
- Kumho Petrochemical, South Korea
- Wood Mackenzie - Singapore
- Latin American Coal - Colombia
- Siam City Cement PLC, Thailand
- Coastal Gujarat Power Limited - India
- Thiess Contractors Indonesia
- Mintek Dendrill Indonesia
- Ministry of Mines - Canada
- McConnell Dowell - Australia
- Essar Steel Hazira Ltd - India
- Simpson Spence & Young - Indonesia
- Binh Thuan Hamico - Vietnam
- Pendopo Energi Batubara - Indonesia
- Bhoruka Overseas - Indonesia
- The University of Queensland
- IHS Mccloskey Coal Group - USA
- Ministry of Finance - Indonesia
- European Bulk Services B.V. - Netherlands
- SMC Global Power, Philippines
- Indo Tambangraya Megah - Indonesia
- Baramulti Group, Indonesia
- Deloitte Consulting - India
- Kepco SPC Power Corporation, Philippines
- Goldman Sachs - Singapore
- Tata Chemicals Ltd - India
- White Energy Company Limited
- GVK Power & Infra Limited - India
- Sical Logistics Limited - India
- Dalmia Cement Bharat India
- Power Finance Corporation Ltd., India
- Sojitz Corporation - Japan
- Borneo Indobara - Indonesia
- Attock Cement Pakistan Limited
- Kapuas Tunggal Persada - Indonesia
- Aboitiz Power Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Mjunction Services Limited - India
- Global Coal Blending Company Limited - Australia
- Straits Asia Resources Limited - Singapore
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Riau Bara Harum - Indonesia
- SN Aboitiz Power Inc, Philippines
- Standard Chartered Bank - UAE
- Kideco Jaya Agung - Indonesia
- Maheswari Brothers Coal Limited - India
- Metalloyd Limited - United Kingdom
- Petron Corporation, Philippines
- Indian Energy Exchange, India
- Aditya Birla Group - India
- Indian Oil Corporation Limited
- Orica Mining Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bharathi Cement Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
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