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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, 19 July 11
82 MIO TONS OF COAL TO BE SUPPLIED FOR DOMESTIC MARKET
Indonesian Coal miners were required to supply 82 million tons of coal to Domestic market in this year. This is a 2.53 percent higher than last year ...
Monday, 18 July 11
IMFA BUYS A INDONESIAN COAL MINE FOR USD 8.7 M
Indian Metals and Ferro Alloys (IMFA), the largest producer of ferro chrome in the country, today said it has acquired 70 per cent stake in an Indones ...
Sunday, 17 July 11
THE COAL PRICES ARE SOFTENING DUE TO LESS DEMAND - VISTAAR
COALspot.com: The markets were down last week with BDI down by 6.63 points and closing at 1,353 points. The most affected was Cape index which was d ...
Friday, 15 July 11
DRY BULK MARKET SUFFERS NEW BLOW, RETREATS EVEN FURTHER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market fell even lower yesterday on the back of lower demand for larger vessels, like Capesizes and Panamaxes. The industry’s ben ...
Friday, 15 July 11
BUKIT ASAM 1H COAL SALES UP 44 PERCENT
The state-controlled PT Tambang Batubara Bukit Asam Tbk (PTBA) is estimated to post 6.5 million tons of coal sales in the first half of this year, a ...
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- Electricity Generating Authority of Thailand
- Global Coal Blending Company Limited - Australia
- PNOC Exploration Corporation - Philippines
- Formosa Plastics Group - Taiwan
- New Zealand Coal & Carbon
- Energy Development Corp, Philippines
- Singapore Mercantile Exchange
- Ministry of Finance - Indonesia
- Wilmar Investment Holdings
- PowerSource Philippines DevCo
- Parry Sugars Refinery, India
- LBH Netherlands Bv - Netherlands
- London Commodity Brokers - England
- Thai Mozambique Logistica
- Meenaskhi Energy Private Limited - India
- Uttam Galva Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Banpu Public Company Limited - Thailand
- VISA Power Limited - India
- Heidelberg Cement - Germany
- Australian Coal Association
- Standard Chartered Bank - UAE
- International Coal Ventures Pvt Ltd - India
- Sojitz Corporation - Japan
- Australian Commodity Traders Exchange
- ICICI Bank Limited - India
- MS Steel International - UAE
- Energy Link Ltd, New Zealand
- Meralco Power Generation, Philippines
- Indo Tambangraya Megah - Indonesia
- Sakthi Sugars Limited - India
- Deloitte Consulting - India
- OPG Power Generation Pvt Ltd - India
- Chamber of Mines of South Africa
- SMG Consultants - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- CNBM International Corporation - China
- Toyota Tsusho Corporation, Japan
- Gujarat Sidhee Cement - India
- Merrill Lynch Commodities Europe
- Semirara Mining and Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Star Paper Mills Limited - India
- Metalloyd Limited - United Kingdom
- Posco Energy - South Korea
- Salva Resources Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Mjunction Services Limited - India
- IHS Mccloskey Coal Group - USA
- Sical Logistics Limited - India
- Eastern Coal Council - USA
- Attock Cement Pakistan Limited
- Petron Corporation, Philippines
- Trasteel International SA, Italy
- The State Trading Corporation of India Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Oil Corporation Limited
- Orica Mining Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Renaissance Capital - South Africa
- Latin American Coal - Colombia
- Bukit Makmur.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- McConnell Dowell - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhatia International Limited - India
- Africa Commodities Group - South Africa
- Alfred C Toepfer International GmbH - Germany
- Lanco Infratech Ltd - India
- PTC India Limited - India
- Commonwealth Bank - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Parliament of New Zealand
- Ministry of Mines - Canada
- Edison Trading Spa - Italy
- Georgia Ports Authority, United States
- South Luzon Thermal Energy Corporation
- Krishnapatnam Port Company Ltd. - India
- Coalindo Energy - Indonesia
- Planning Commission, India
- Semirara Mining Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Bharathi Cement Corporation - India
- Kumho Petrochemical, South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhushan Steel Limited - India
- Essar Steel Hazira Ltd - India
- Karaikal Port Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Mintek Dendrill Indonesia
- Orica Australia Pty. Ltd.
- GN Power Mariveles Coal Plant, Philippines
- Minerals Council of Australia
- Petrochimia International Co. Ltd.- Taiwan
- Grasim Industreis Ltd - India
- SMC Global Power, Philippines
- Dalmia Cement Bharat India
- Jorong Barutama Greston.PT - Indonesia
- Romanian Commodities Exchange
- Power Finance Corporation Ltd., India
- GAC Shipping (India) Pvt Ltd
- Binh Thuan Hamico - Vietnam
- Global Green Power PLC Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Kepco SPC Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Therma Luzon, Inc, Philippines
- Bhoruka Overseas - Indonesia
- Carbofer General Trading SA - India
- Intertek Mineral Services - Indonesia
- Indika Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Iligan Light & Power Inc, Philippines
- Bangladesh Power Developement Board
- Sree Jayajothi Cements Limited - India
- Gujarat Electricity Regulatory Commission - India
- Ministry of Transport, Egypt
- Savvy Resources Ltd - HongKong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- India Bulls Power Limited - India
- Economic Council, Georgia
- Interocean Group of Companies - India
- Anglo American - United Kingdom
- Siam City Cement PLC, Thailand
- Siam City Cement - Thailand
- CIMB Investment Bank - Malaysia
- Port Waratah Coal Services - Australia
- Directorate General of MIneral and Coal - Indonesia
- IEA Clean Coal Centre - UK
- Antam Resourcindo - Indonesia
- Simpson Spence & Young - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Coal and Oil Company - UAE
- Maheswari Brothers Coal Limited - India
- Madhucon Powers Ltd - India
- SN Aboitiz Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Medco Energi Mining Internasional
- Sindya Power Generating Company Private Ltd
- Borneo Indobara - Indonesia
- White Energy Company Limited
- Eastern Energy - Thailand
- Altura Mining Limited, Indonesia
- Tamil Nadu electricity Board
- Bayan Resources Tbk. - Indonesia
- Indonesian Coal Mining Association
- Baramulti Group, Indonesia
- Indian Energy Exchange, India
- Sinarmas Energy and Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Ambuja Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Vizag Seaport Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- The University of Queensland
- Straits Asia Resources Limited - Singapore
- Electricity Authority, New Zealand
- Agrawal Coal Company - India
- Goldman Sachs - Singapore
- Makarim & Taira - Indonesia
- Jaiprakash Power Ventures ltd
- Riau Bara Harum - Indonesia
- Kartika Selabumi Mining - Indonesia
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Cement Manufacturers Association - India
- Barasentosa Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Globalindo Alam Lestari - Indonesia
- Mercuria Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Price Waterhouse Coopers - Russia
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Larsen & Toubro Limited - India
- Rio Tinto Coal - Australia
- Aboitiz Power Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vedanta Resources Plc - India
- Leighton Contractors Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- Wood Mackenzie - Singapore
- Tata Chemicals Ltd - India
- Malabar Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- GMR Energy Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bahari Cakrawala Sebuku - Indonesia
- The Treasury - Australian Government
- Central Electricity Authority - India
- Bulk Trading Sa - Switzerland
- Kideco Jaya Agung - Indonesia
- Videocon Industries ltd - India
- Mercator Lines Limited - India
- Holcim Trading Pte Ltd - Singapore
- ASAPP Information Group - India
- Independent Power Producers Association of India
- Sarangani Energy Corporation, Philippines
- Xindia Steels Limited - India
- Thiess Contractors Indonesia
- Aditya Birla Group - India
- AsiaOL BioFuels Corp., Philippines
- GVK Power & Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Timah Investasi Mineral - Indoneisa
- Global Business Power Corporation, Philippines
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