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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, 01 November 11
ATLAS RESOURCES SETS IPO AT RP1,500 - INSIDER STORIES
Insider Stories reported that, coal miner PT Atlas Resources Tbk has set its initial public offering (IPO) at Rp1,500 (approximately US$ 0.169) per ...
Tuesday, 01 November 11
DRY BULK MARKETS CORRECTION SPILLS OVER ONTO NEW WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market is losing steam, as evidenced by the falls experienced last week, which were also apparent at the beginning of the new week. A l ...
Monday, 31 October 11
CHINAS HUNGER FOR INDONESIAN COAL AT THREE YEAR-HIGH AS WINTER NEARS - JOSEPH KIRSCHKE
COALspot.com - Chinese demand for power-station coal from Indonesia has soared to its highest level in three years, as central heating plants and po ...
Saturday, 29 October 11
ATLAS RESOURCES SEALS US$95 MIO LOAN - INSIDER STORIES
Insider Stories reported that, coal producer PT Atlas Resources Tbk, that is controlled by Indonesian businessman Andre Abdi, has secured US$95 mill ...
Saturday, 29 October 11
INDONESIA TO INDIA FREIGHT LIKELY TO REMAIN SOFT
COALspot.com - The market continued to slow down and all segment were down this week.
The biggest drop was in the Cape Index down by 8.19 pct&nbs ...
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- Sojitz Corporation - Japan
- Romanian Commodities Exchange
- Orica Mining Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karaikal Port Pvt Ltd - India
- Renaissance Capital - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Uttam Galva Steels Limited - India
- Georgia Ports Authority, United States
- India Bulls Power Limited - India
- OPG Power Generation Pvt Ltd - India
- London Commodity Brokers - England
- Parliament of New Zealand
- Maheswari Brothers Coal Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Madhucon Powers Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- PNOC Exploration Corporation - Philippines
- Ministry of Mines - Canada
- The Treasury - Australian Government
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Coal Council - USA
- IHS Mccloskey Coal Group - USA
- Global Coal Blending Company Limited - Australia
- Essar Steel Hazira Ltd - India
- Bukit Baiduri Energy - Indonesia
- Tamil Nadu electricity Board
- Planning Commission, India
- Globalindo Alam Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Pendopo Energi Batubara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Edison Trading Spa - Italy
- Oldendorff Carriers - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Toyota Tsusho Corporation, Japan
- Rio Tinto Coal - Australia
- Tata Chemicals Ltd - India
- Makarim & Taira - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Holcim Trading Pte Ltd - Singapore
- GMR Energy Limited - India
- McConnell Dowell - Australia
- Bhatia International Limited - India
- Ambuja Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Deloitte Consulting - India
- Meenaskhi Energy Private Limited - India
- Formosa Plastics Group - Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- SMG Consultants - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- European Bulk Services B.V. - Netherlands
- CIMB Investment Bank - Malaysia
- VISA Power Limited - India
- PowerSource Philippines DevCo
- Aboitiz Power Corporation - Philippines
- Bangladesh Power Developement Board
- Mercuria Energy - Indonesia
- Kumho Petrochemical, South Korea
- Kideco Jaya Agung - Indonesia
- Indonesian Coal Mining Association
- Chamber of Mines of South Africa
- Mercator Lines Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Kaltim Prima Coal - Indonesia
- Lanco Infratech Ltd - India
- Wilmar Investment Holdings
- Wood Mackenzie - Singapore
- Therma Luzon, Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Cement Manufacturers Association - India
- Central Java Power - Indonesia
- Dalmia Cement Bharat India
- Minerals Council of Australia
- Leighton Contractors Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The University of Queensland
- Coastal Gujarat Power Limited - India
- Electricity Authority, New Zealand
- Parry Sugars Refinery, India
- Kobexindo Tractors - Indoneisa
- Electricity Generating Authority of Thailand
- Bulk Trading Sa - Switzerland
- Indogreen Group - Indonesia
- Mjunction Services Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Thai Mozambique Logistica
- Bharathi Cement Corporation - India
- Grasim Industreis Ltd - India
- Petron Corporation, Philippines
- Medco Energi Mining Internasional
- Ministry of Finance - Indonesia
- Goldman Sachs - Singapore
- Simpson Spence & Young - Indonesia
- Aditya Birla Group - India
- San Jose City I Power Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Posco Energy - South Korea
- ICICI Bank Limited - India
- Ministry of Transport, Egypt
- Banpu Public Company Limited - Thailand
- GAC Shipping (India) Pvt Ltd
- Interocean Group of Companies - India
- Indian Oil Corporation Limited
- Jaiprakash Power Ventures ltd
- Bahari Cakrawala Sebuku - Indonesia
- Merrill Lynch Commodities Europe
- Directorate General of MIneral and Coal - Indonesia
- TeaM Sual Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Indo Tambangraya Megah - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Antam Resourcindo - Indonesia
- Vizag Seaport Private Limited - India
- Borneo Indobara - Indonesia
- Altura Mining Limited, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Billiton Holdings Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Anglo American - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Timah Investasi Mineral - Indoneisa
- Videocon Industries ltd - India
- Directorate Of Revenue Intelligence - India
- Kalimantan Lumbung Energi - Indonesia
- Price Waterhouse Coopers - Russia
- LBH Netherlands Bv - Netherlands
- Trasteel International SA, Italy
- Independent Power Producers Association of India
- Siam City Cement PLC, Thailand
- ASAPP Information Group - India
- Attock Cement Pakistan Limited
- Global Business Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Carbofer General Trading SA - India
- Economic Council, Georgia
- Karbindo Abesyapradhi - Indoneisa
- Bhushan Steel Limited - India
- Gujarat Sidhee Cement - India
- Power Finance Corporation Ltd., India
- Straits Asia Resources Limited - Singapore
- Sical Logistics Limited - India
- Cigading International Bulk Terminal - Indonesia
- Coal and Oil Company - UAE
- Australian Commodity Traders Exchange
- Kepco SPC Power Corporation, Philippines
- Australian Coal Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- White Energy Company Limited
- Latin American Coal - Colombia
- Bukit Makmur.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Global Green Power PLC Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Energy Development Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Heidelberg Cement - Germany
- Commonwealth Bank - Australia
- Port Waratah Coal Services - Australia
- Gujarat Mineral Development Corp Ltd - India
- IEA Clean Coal Centre - UK
- PTC India Limited - India
- Kapuas Tunggal Persada - Indonesia
- Intertek Mineral Services - Indonesia
- Malabar Cements Ltd - India
- Indika Energy - Indonesia
- Indian Energy Exchange, India
- GVK Power & Infra Limited - India
- Metalloyd Limited - United Kingdom
- Baramulti Group, Indonesia
- MS Steel International - UAE
- Samtan Co., Ltd - South Korea
- Star Paper Mills Limited - India
- SMC Global Power, Philippines
- Riau Bara Harum - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bhoruka Overseas - Indonesia
- Coalindo Energy - Indonesia
- Africa Commodities Group - South Africa
- Mintek Dendrill Indonesia
- Sakthi Sugars Limited - India
- Central Electricity Authority - India
- Singapore Mercantile Exchange
- Eastern Energy - Thailand
- Barasentosa Lestari - Indonesia
- New Zealand Coal & Carbon
- Larsen & Toubro Limited - India
- Sree Jayajothi Cements Limited - India
- Vedanta Resources Plc - India
- Xindia Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Meralco Power Generation, Philippines
- CNBM International Corporation - China
- Salva Resources Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Agrawal Coal Company - India
- Siam City Cement - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Rashtriya Ispat Nigam Limited - India
- Savvy Resources Ltd - HongKong
- Marubeni Corporation - India
- Thiess Contractors Indonesia
- Ceylon Electricity Board - Sri Lanka
- International Coal Ventures Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
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