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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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Sunday, 08 January 12
THARPAK CONSORTIUM FORMED TO DEVELOP MEGA ENERGY COMPLEX IN SINDH PROVINCE, PAKISTAN
Press Release: On January 5th, TharPak, LLC met with officials of the Embassy of Pakistan in Washington DC to introduce and announce the formation o ...
Saturday, 07 January 12
COAL MARKETS SEE FALLING SPOT PRICES
COALspot.com – World’s thermal coal spot prices have slipped this week..
globalCOAL index in Newcastle Port, benchmark for Asian mark ...
Friday, 06 January 12
COAL INDIA LINKED COAL PRICES WITH INTERNATIONAL COAL PRICES
COALspot.com - Consumers of indigenous coal in India to pay International prices in the future. Coal India has recently moved from UHV pricing mecha ...
Friday, 06 January 12
CLARIDEN GLOBAL BRINGS YOU INDONESIA MINING 2012
Capitalizing Business & Investment Opportunities in an Uncertain Market.Press Release - Clariden Global brings you Indonesia Mining 2012, the dedi ...
Friday, 06 January 12
THE PANAMAX MARKET EXPERIENCED A SLOW START TO 2012 - FEARNLEYS AS
Handy
As usual after a holiday owners and charterers both try to get a feel of the market. An Armada of Supras were talking to ballast towards USG, ...
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- Central Java Power - Indonesia
- Simpson Spence & Young - Indonesia
- Timah Investasi Mineral - Indoneisa
- Goldman Sachs - Singapore
- Jaiprakash Power Ventures ltd
- Petron Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Straits Asia Resources Limited - Singapore
- Latin American Coal - Colombia
- Ministry of Finance - Indonesia
- Electricity Generating Authority of Thailand
- Wilmar Investment Holdings
- The University of Queensland
- Bulk Trading Sa - Switzerland
- Vedanta Resources Plc - India
- Malabar Cements Ltd - India
- Interocean Group of Companies - India
- Directorate General of MIneral and Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Samtan Co., Ltd - South Korea
- Power Finance Corporation Ltd., India
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Kobexindo Tractors - Indoneisa
- Larsen & Toubro Limited - India
- New Zealand Coal & Carbon
- Globalindo Alam Lestari - Indonesia
- Coal and Oil Company - UAE
- PTC India Limited - India
- CNBM International Corporation - China
- South Luzon Thermal Energy Corporation
- Makarim & Taira - Indonesia
- CIMB Investment Bank - Malaysia
- Bayan Resources Tbk. - Indonesia
- Bukit Baiduri Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sical Logistics Limited - India
- Standard Chartered Bank - UAE
- LBH Netherlands Bv - Netherlands
- Chettinad Cement Corporation Ltd - India
- Oldendorff Carriers - Singapore
- Pendopo Energi Batubara - Indonesia
- Madhucon Powers Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Maheswari Brothers Coal Limited - India
- Meralco Power Generation, Philippines
- India Bulls Power Limited - India
- Bukit Makmur.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Indogreen Group - Indonesia
- Kumho Petrochemical, South Korea
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement - Thailand
- Aboitiz Power Corporation - Philippines
- Tamil Nadu electricity Board
- Uttam Galva Steels Limited - India
- ICICI Bank Limited - India
- Minerals Council of Australia
- Formosa Plastics Group - Taiwan
- Kapuas Tunggal Persada - Indonesia
- Kaltim Prima Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Wood Mackenzie - Singapore
- Essar Steel Hazira Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Binh Thuan Hamico - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Coal Association
- Altura Mining Limited, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Mjunction Services Limited - India
- Baramulti Group, Indonesia
- Africa Commodities Group - South Africa
- Alfred C Toepfer International GmbH - Germany
- Vizag Seaport Private Limited - India
- Port Waratah Coal Services - Australia
- Dalmia Cement Bharat India
- Bhoruka Overseas - Indonesia
- TeaM Sual Corporation - Philippines
- Videocon Industries ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PowerSource Philippines DevCo
- Savvy Resources Ltd - HongKong
- Krishnapatnam Port Company Ltd. - India
- Attock Cement Pakistan Limited
- Petrochimia International Co. Ltd.- Taiwan
- Banpu Public Company Limited - Thailand
- Leighton Contractors Pty Ltd - Australia
- Mercator Lines Limited - India
- Siam City Cement PLC, Thailand
- Economic Council, Georgia
- Star Paper Mills Limited - India
- Ministry of Transport, Egypt
- Planning Commission, India
- The Treasury - Australian Government
- Bharathi Cement Corporation - India
- Australian Commodity Traders Exchange
- Kartika Selabumi Mining - Indonesia
- Merrill Lynch Commodities Europe
- Deloitte Consulting - India
- Karaikal Port Pvt Ltd - India
- Electricity Authority, New Zealand
- Borneo Indobara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- ASAPP Information Group - India
- SMG Consultants - Indonesia
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
- Ministry of Mines - Canada
- Antam Resourcindo - Indonesia
- SN Aboitiz Power Inc, Philippines
- Independent Power Producers Association of India
- Salva Resources Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Billiton Holdings Pty Ltd - Australia
- Eastern Coal Council - USA
- Therma Luzon, Inc, Philippines
- Orica Australia Pty. Ltd.
- Bhushan Steel Limited - India
- Cement Manufacturers Association - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Electricity Authority - India
- The State Trading Corporation of India Ltd
- Sarangani Energy Corporation, Philippines
- Xindia Steels Limited - India
- MS Steel International - UAE
- Mintek Dendrill Indonesia
- Commonwealth Bank - Australia
- Price Waterhouse Coopers - Russia
- Miang Besar Coal Terminal - Indonesia
- Edison Trading Spa - Italy
- Singapore Mercantile Exchange
- Grasim Industreis Ltd - India
- Coalindo Energy - Indonesia
- Global Business Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aditya Birla Group - India
- Eastern Energy - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Barasentosa Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Oil Corporation Limited
- Kepco SPC Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Cigading International Bulk Terminal - Indonesia
- Romanian Commodities Exchange
- Sree Jayajothi Cements Limited - India
- Thai Mozambique Logistica
- Ambuja Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Riau Bara Harum - Indonesia
- GVK Power & Infra Limited - India
- Carbofer General Trading SA - India
- PNOC Exploration Corporation - Philippines
- Posco Energy - South Korea
- GMR Energy Limited - India
- Sojitz Corporation - Japan
- Agrawal Coal Company - India
- Tata Chemicals Ltd - India
- Energy Development Corp, Philippines
- Gujarat Sidhee Cement - India
- Bhatia International Limited - India
- Indika Energy - Indonesia
- Anglo American - United Kingdom
- Sindya Power Generating Company Private Ltd
- SMC Global Power, Philippines
- Lanco Infratech Ltd - India
- Chamber of Mines of South Africa
- Medco Energi Mining Internasional
- Iligan Light & Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- European Bulk Services B.V. - Netherlands
- Rio Tinto Coal - Australia
- Maharashtra Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- London Commodity Brokers - England
- Indonesian Coal Mining Association
- Energy Link Ltd, New Zealand
- White Energy Company Limited
- Coastal Gujarat Power Limited - India
- Parliament of New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Global Green Power PLC Corporation, Philippines
- Trasteel International SA, Italy
- McConnell Dowell - Australia
- Asmin Koalindo Tuhup - Indonesia
- VISA Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indo Tambangraya Megah - Indonesia
- Semirara Mining Corp, Philippines
- Renaissance Capital - South Africa
- Marubeni Corporation - India
- Indian Energy Exchange, India
- GAC Shipping (India) Pvt Ltd
- Manunggal Multi Energi - Indonesia
- Sakthi Sugars Limited - India
- Bangladesh Power Developement Board
- Meenaskhi Energy Private Limited - India
- Global Coal Blending Company Limited - Australia
- Ind-Barath Power Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- Thiess Contractors Indonesia
- Heidelberg Cement - Germany
- Kohat Cement Company Ltd. - Pakistan
- IEA Clean Coal Centre - UK
- Gujarat Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Mercuria Energy - Indonesia
- Orica Mining Services - Indonesia
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