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