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