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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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Tuesday, 04 January 11
DRY BULK MARKET TO RANGE BETWEEN 1,700 AND 2,600 POINTS IN THE FIRST QUARTER OF 2011, ANALYSTS SAY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
As we entered 2011, ship owners and analysts, as well as shipbrokers are looking into their “crystal balls” to try to decode the dry bul ...
Monday, 03 January 11
TAXATION FOR COAL MINING COMPANIES IN INDONESIA - A TAX EXPERTS VIEW
COALspot.com - Mrs. Sri Wahyuni Sujono, managing partner of SF Consulting has wrote an exclusive report regarding taxation for coal mining companies ...
Sunday, 02 January 11
JAISWAL TO SEEK COAL MINES IN AFRICA - HINDUSTAN TIMES
Coal Minister Sriprakash Jaiswal will talk with his counterparts in South Africa and Mozambique during his visit from January 5 to secure coal asset ...
Saturday, 01 January 11
COAL PRODUCTION EXPECTED TO EXCEED 340 MILLION TONS THIS YEAR - THE JAKARTA POST
The Jakarta Post reported that, Indonesian coal miners expect to produce 340 million tons of coal in 2011, an increase of 23 percent from 275 millio ...
Friday, 31 December 10
STC TO FINALIZE 12 MILLION MT OF COAL IMPORT CONTRACT TO TWO INDIAN AND A DUBAI BASED COAL TRADER - SOURCES
COALspot.com - World's single largest coal import tender floated by STC on behalf of state utility NTPC to finalize its suppliers or already finali ...
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- GN Power Mariveles Coal Plant, Philippines
- Alfred C Toepfer International GmbH - Germany
- Indian Oil Corporation Limited
- Bangladesh Power Developement Board
- Rashtriya Ispat Nigam Limited - India
- Makarim & Taira - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Deloitte Consulting - India
- Australian Coal Association
- Romanian Commodities Exchange
- The University of Queensland
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Sidhee Cement - India
- Merrill Lynch Commodities Europe
- India Bulls Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- SMG Consultants - Indonesia
- Georgia Ports Authority, United States
- Star Paper Mills Limited - India
- PTC India Limited - India
- Sarangani Energy Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Toyota Tsusho Corporation, Japan
- The State Trading Corporation of India Ltd
- Sical Logistics Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Thiess Contractors Indonesia
- Ministry of Finance - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- TeaM Sual Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Transport, Egypt
- Independent Power Producers Association of India
- IEA Clean Coal Centre - UK
- Samtan Co., Ltd - South Korea
- Manunggal Multi Energi - Indonesia
- Interocean Group of Companies - India
- Renaissance Capital - South Africa
- Vizag Seaport Private Limited - India
- Bukit Makmur.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parliament of New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Kumho Petrochemical, South Korea
- Binh Thuan Hamico - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Wilmar Investment Holdings
- Mintek Dendrill Indonesia
- Kobexindo Tractors - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Lanco Infratech Ltd - India
- Wood Mackenzie - Singapore
- Timah Investasi Mineral - Indoneisa
- CNBM International Corporation - China
- Global Coal Blending Company Limited - Australia
- VISA Power Limited - India
- Central Java Power - Indonesia
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- ASAPP Information Group - India
- Holcim Trading Pte Ltd - Singapore
- Electricity Authority, New Zealand
- Rio Tinto Coal - Australia
- Central Electricity Authority - India
- Eastern Coal Council - USA
- IHS Mccloskey Coal Group - USA
- Savvy Resources Ltd - HongKong
- Globalindo Alam Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Energy Development Corp, Philippines
- Anglo American - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Planning Commission, India
- Heidelberg Cement - Germany
- Leighton Contractors Pty Ltd - Australia
- Tamil Nadu electricity Board
- Orica Mining Services - Indonesia
- Xindia Steels Limited - India
- GMR Energy Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Aditya Birla Group - India
- Coalindo Energy - Indonesia
- McConnell Dowell - Australia
- Sakthi Sugars Limited - India
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indonesian Coal Mining Association
- Minerals Council of Australia
- Metalloyd Limited - United Kingdom
- Grasim Industreis Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- The Treasury - Australian Government
- Directorate General of MIneral and Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Altura Mining Limited, Indonesia
- Australian Commodity Traders Exchange
- Petron Corporation, Philippines
- Medco Energi Mining Internasional
- Chamber of Mines of South Africa
- Directorate Of Revenue Intelligence - India
- Maharashtra Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Madhucon Powers Ltd - India
- Sree Jayajothi Cements Limited - India
- Electricity Generating Authority of Thailand
- Global Business Power Corporation, Philippines
- Bhushan Steel Limited - India
- Kepco SPC Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- PNOC Exploration Corporation - Philippines
- Vedanta Resources Plc - India
- Marubeni Corporation - India
- South Luzon Thermal Energy Corporation
- Global Green Power PLC Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Ministry of Mines - Canada
- San Jose City I Power Corp, Philippines
- SMC Global Power, Philippines
- Krishnapatnam Port Company Ltd. - India
- Sinarmas Energy and Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Uttam Galva Steels Limited - India
- Mercuria Energy - Indonesia
- GVK Power & Infra Limited - India
- Attock Cement Pakistan Limited
- Siam City Cement - Thailand
- Mercator Lines Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Africa Commodities Group - South Africa
- Sindya Power Generating Company Private Ltd
- ICICI Bank Limited - India
- Riau Bara Harum - Indonesia
- Eastern Energy - Thailand
- Coastal Gujarat Power Limited - India
- Banpu Public Company Limited - Thailand
- Bhatia International Limited - India
- Latin American Coal - Colombia
- Ind-Barath Power Infra Limited - India
- Cement Manufacturers Association - India
- Commonwealth Bank - Australia
- Orica Australia Pty. Ltd.
- Kohat Cement Company Ltd. - Pakistan
- Mjunction Services Limited - India
- Port Waratah Coal Services - Australia
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Baramulti Group, Indonesia
- Jindal Steel & Power Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Energy Exchange, India
- Formosa Plastics Group - Taiwan
- Dalmia Cement Bharat India
- Economic Council, Georgia
- Posco Energy - South Korea
- Thai Mozambique Logistica
- Petrochimia International Co. Ltd.- Taiwan
- Salva Resources Pvt Ltd - India
- Standard Chartered Bank - UAE
- Karaikal Port Pvt Ltd - India
- Agrawal Coal Company - India
- Energy Link Ltd, New Zealand
- European Bulk Services B.V. - Netherlands
- Power Finance Corporation Ltd., India
- Larsen & Toubro Limited - India
- Singapore Mercantile Exchange
- Videocon Industries ltd - India
- Malabar Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Essar Steel Hazira Ltd - India
- Indika Energy - Indonesia
- Indogreen Group - Indonesia
- Maheswari Brothers Coal Limited - India
- Meenaskhi Energy Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- Sojitz Corporation - Japan
- Price Waterhouse Coopers - Russia
- White Energy Company Limited
- Parry Sugars Refinery, India
- Bhoruka Overseas - Indonesia
- Barasentosa Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- New Zealand Coal & Carbon
- Aboitiz Power Corporation - Philippines
- Ambuja Cements Ltd - India
- PowerSource Philippines DevCo
- Chettinad Cement Corporation Ltd - India
- Kideco Jaya Agung - Indonesia
- Edison Trading Spa - Italy
- Simpson Spence & Young - Indonesia
- Iligan Light & Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Cigading International Bulk Terminal - Indonesia
- Oldendorff Carriers - Singapore
- LBH Netherlands Bv - Netherlands
- Coal and Oil Company - UAE
- Semirara Mining and Power Corporation, Philippines
- Borneo Indobara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- Goldman Sachs - Singapore
- Trasteel International SA, Italy
- Semirara Mining Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Tata Chemicals Ltd - India
- London Commodity Brokers - England
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