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