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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, 20 September 12
DRY BULK INCHES FORWARD AFTER WEEKS OF BELOW PAR PERFORMANCE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has started to revive from its ashed, as the past couple of days, traders have reported an increased activity from China, result ...
Wednesday, 19 September 12
CHURCHILL STRENGTHENS LITIGATION TEAM WITH APPOINTMENT OF NICHOLAS SMITH AS MANAGING DIRECTOR
COALspot.com - Churchill Mining PLC (AIM: CHL) has announced that, Mr Nicholas Smith has joined the board of the Company and has been appointed as t ...
Wednesday, 19 September 12
DRY BULK TERMINALS SINGAPORE
Press Release - Dry bulk terminals are used all around the world to handle large quantities of bulk materials, like minerals, grains, etc. In today& ...
Tuesday, 18 September 12
JORC CODE REVISION - EXPOSURE DRAFT RELEASED FOR COMMENT
COALspot.com - The Australasian Joint Ore Reserves Committee (JORC) has today released for public comment the exposure draft of the JORC Code (2012) ...
Monday, 17 September 12
YEAR TO DATE, BUMA PRODUCED 231.1 MILLION BCM OF OVERBURDEN
COALspot.com - PT. Delta Dunia Makmur Tbk has removed 31.5 million bcm (+6.0 percent YoY) overburden in August 2012 totaled 31.5 million bcm ( ...
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- Electricity Generating Authority of Thailand
- Standard Chartered Bank - UAE
- Madhucon Powers Ltd - India
- Merrill Lynch Commodities Europe
- Rio Tinto Coal - Australia
- Port Waratah Coal Services - Australia
- Makarim & Taira - Indonesia
- The Treasury - Australian Government
- Global Business Power Corporation, Philippines
- Eastern Coal Council - USA
- PNOC Exploration Corporation - Philippines
- Bangladesh Power Developement Board
- Jindal Steel & Power Ltd - India
- Bulk Trading Sa - Switzerland
- Africa Commodities Group - South Africa
- Renaissance Capital - South Africa
- SN Aboitiz Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Gujarat Mineral Development Corp Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GAC Shipping (India) Pvt Ltd
- Therma Luzon, Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Energy Development Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Transport, Egypt
- Edison Trading Spa - Italy
- Tata Chemicals Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMG Consultants - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Star Paper Mills Limited - India
- Jaiprakash Power Ventures ltd
- Simpson Spence & Young - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- OPG Power Generation Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Baramulti Group, Indonesia
- Grasim Industreis Ltd - India
- IHS Mccloskey Coal Group - USA
- Economic Council, Georgia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sindya Power Generating Company Private Ltd
- London Commodity Brokers - England
- Indonesian Coal Mining Association
- Wilmar Investment Holdings
- The State Trading Corporation of India Ltd
- Thiess Contractors Indonesia
- Marubeni Corporation - India
- Iligan Light & Power Inc, Philippines
- Petron Corporation, Philippines
- New Zealand Coal & Carbon
- Borneo Indobara - Indonesia
- Videocon Industries ltd - India
- Commonwealth Bank - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Chettinad Cement Corporation Ltd - India
- Bharathi Cement Corporation - India
- Independent Power Producers Association of India
- CNBM International Corporation - China
- Sojitz Corporation - Japan
- Krishnapatnam Port Company Ltd. - India
- Heidelberg Cement - Germany
- Minerals Council of Australia
- Australian Commodity Traders Exchange
- Meralco Power Generation, Philippines
- Posco Energy - South Korea
- Bhushan Steel Limited - India
- Coal and Oil Company - UAE
- Energy Link Ltd, New Zealand
- Bhoruka Overseas - Indonesia
- Kaltim Prima Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ambuja Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Finance - Indonesia
- Siam City Cement PLC, Thailand
- Mjunction Services Limited - India
- Lanco Infratech Ltd - India
- Salva Resources Pvt Ltd - India
- Power Finance Corporation Ltd., India
- International Coal Ventures Pvt Ltd - India
- Indogreen Group - Indonesia
- Kideco Jaya Agung - Indonesia
- Samtan Co., Ltd - South Korea
- Central Java Power - Indonesia
- Latin American Coal - Colombia
- Oldendorff Carriers - Singapore
- Ceylon Electricity Board - Sri Lanka
- Karbindo Abesyapradhi - Indoneisa
- SMC Global Power, Philippines
- Leighton Contractors Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Bhatia International Limited - India
- Riau Bara Harum - Indonesia
- Bukit Makmur.PT - Indonesia
- Indian Energy Exchange, India
- Xindia Steels Limited - India
- Georgia Ports Authority, United States
- Aboitiz Power Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Eastern Energy - Thailand
- Wood Mackenzie - Singapore
- Medco Energi Mining Internasional
- Cement Manufacturers Association - India
- Aditya Birla Group - India
- Sakthi Sugars Limited - India
- Kartika Selabumi Mining - Indonesia
- Parliament of New Zealand
- Tamil Nadu electricity Board
- Gujarat Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Intertek Mineral Services - Indonesia
- Manunggal Multi Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Attock Cement Pakistan Limited
- Singapore Mercantile Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Binh Thuan Hamico - Vietnam
- Savvy Resources Ltd - HongKong
- South Luzon Thermal Energy Corporation
- The University of Queensland
- European Bulk Services B.V. - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Essar Steel Hazira Ltd - India
- Thai Mozambique Logistica
- VISA Power Limited - India
- Australian Coal Association
- Electricity Authority, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Altura Mining Limited, Indonesia
- Pendopo Energi Batubara - Indonesia
- Romanian Commodities Exchange
- Vedanta Resources Plc - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Anglo American - United Kingdom
- Globalindo Alam Lestari - Indonesia
- PowerSource Philippines DevCo
- Mercator Lines Limited - India
- Goldman Sachs - Singapore
- Banpu Public Company Limited - Thailand
- ICICI Bank Limited - India
- MS Steel International - UAE
- Global Coal Blending Company Limited - Australia
- Larsen & Toubro Limited - India
- Sinarmas Energy and Mining - Indonesia
- Planning Commission, India
- Orica Australia Pty. Ltd.
- PTC India Limited - India
- Bayan Resources Tbk. - Indonesia
- Dalmia Cement Bharat India
- Asmin Koalindo Tuhup - Indonesia
- Carbofer General Trading SA - India
- Miang Besar Coal Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- Ministry of Mines - Canada
- White Energy Company Limited
- Coastal Gujarat Power Limited - India
- San Jose City I Power Corp, Philippines
- Interocean Group of Companies - India
- TNB Fuel Sdn Bhd - Malaysia
- Semirara Mining Corp, Philippines
- Indika Energy - Indonesia
- Coalindo Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Siam City Cement - Thailand
- McConnell Dowell - Australia
- Mercuria Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Straits Asia Resources Limited - Singapore
- Parry Sugars Refinery, India
- Gujarat Sidhee Cement - India
- GVK Power & Infra Limited - India
- Mintek Dendrill Indonesia
- Trasteel International SA, Italy
- GN Power Mariveles Coal Plant, Philippines
- Antam Resourcindo - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- Central Electricity Authority - India
- Kalimantan Lumbung Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Sical Logistics Limited - India
- Kepco SPC Power Corporation, Philippines
- Agrawal Coal Company - India
- GMR Energy Limited - India
- Ind-Barath Power Infra Limited - India
- Chamber of Mines of South Africa
- Kumho Petrochemical, South Korea
- Uttam Galva Steels Limited - India
- India Bulls Power Limited - India
- Directorate Of Revenue Intelligence - India
- Indian Oil Corporation Limited
- ASAPP Information Group - India
- Barasentosa Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Sarangani Energy Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Price Waterhouse Coopers - Russia
- Malabar Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Alfred C Toepfer International GmbH - Germany
- Deloitte Consulting - India
- Kapuas Tunggal Persada - Indonesia
- Cigading International Bulk Terminal - Indonesia
- TeaM Sual Corporation - Philippines
- Vizag Seaport Private Limited - India
- CIMB Investment Bank - Malaysia
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