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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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Wednesday, 27 April 11
KEWESPO CALLS FOR 765KT OF THERMAL COAL
COALspot.com - South Korea's East-West Power Co's (KEWESPO) has issued a tender to buy total 765,000 tonnes of thermal coal for delivery between J ...
Wednesday, 27 April 11
HARUM ENERGY TO PAY RP 659.1B IN DIVIDENDS - THE JAKARTA POST
The Jakarta Post reported that, Indonesian coal miner Harum Energy is planning to pay out Rp 659.1 billion (US$76.46 million) in dividends this year ...
Wednesday, 27 April 11
TSIS $5 MILLION PLANT TO START PRODUCING UPGRADED COAL - THE JAKARTA POST
The Jakartapost reported that, PT Total Sinergy International (TSI), in association with Agritrade Resources Limited of Hong Kong, will upgrade its ...
Wednesday, 27 April 11
RAIN CONSIDERS COAL MINES TAKEOVER - INSIDER STORIES
Indonesian's tenth largest coal miner in term of coal concession, PT Resource Alam Indonesia Tbk (KKGI), is considering to acquire several coalmine ...
Wednesday, 27 April 11
DRY BULK MARKET LACKS ACTIVITY, RATES KEEP RETREATING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the Easter Holidays for a large of the world now behind, the dry bulk market kept lacking activity on Tuesday, which led the Baltic Dry Index ( ...
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- Bangladesh Power Developement Board
- Cement Manufacturers Association - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Formosa Plastics Group - Taiwan
- OPG Power Generation Pvt Ltd - India
- Wood Mackenzie - Singapore
- Miang Besar Coal Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Petron Corporation, Philippines
- Attock Cement Pakistan Limited
- Rashtriya Ispat Nigam Limited - India
- Sojitz Corporation - Japan
- Thiess Contractors Indonesia
- Bulk Trading Sa - Switzerland
- Bhatia International Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate Of Revenue Intelligence - India
- GAC Shipping (India) Pvt Ltd
- Lanco Infratech Ltd - India
- CNBM International Corporation - China
- SMC Global Power, Philippines
- PTC India Limited - India
- Baramulti Group, Indonesia
- Jaiprakash Power Ventures ltd
- Therma Luzon, Inc, Philippines
- Madhucon Powers Ltd - India
- Mintek Dendrill Indonesia
- Kumho Petrochemical, South Korea
- London Commodity Brokers - England
- Mjunction Services Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Uttam Galva Steels Limited - India
- Indogreen Group - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Vedanta Resources Plc - India
- Merrill Lynch Commodities Europe
- Billiton Holdings Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Bharathi Cement Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- The University of Queensland
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kapuas Tunggal Persada - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Indika Energy - Indonesia
- Sakthi Sugars Limited - India
- Orica Mining Services - Indonesia
- Indian Energy Exchange, India
- Manunggal Multi Energi - Indonesia
- Siam City Cement - Thailand
- Central Java Power - Indonesia
- Marubeni Corporation - India
- Salva Resources Pvt Ltd - India
- Indian Oil Corporation Limited
- Alfred C Toepfer International GmbH - Germany
- Carbofer General Trading SA - India
- Georgia Ports Authority, United States
- Iligan Light & Power Inc, Philippines
- Singapore Mercantile Exchange
- Coal and Oil Company - UAE
- Latin American Coal - Colombia
- Tata Chemicals Ltd - India
- Anglo American - United Kingdom
- Meenaskhi Energy Private Limited - India
- Standard Chartered Bank - UAE
- Mercator Lines Limited - India
- Borneo Indobara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- IEA Clean Coal Centre - UK
- Grasim Industreis Ltd - India
- Bukit Baiduri Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Metalloyd Limited - United Kingdom
- Larsen & Toubro Limited - India
- Kartika Selabumi Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- Dalmia Cement Bharat India
- CIMB Investment Bank - Malaysia
- Gujarat Sidhee Cement - India
- Trasteel International SA, Italy
- Videocon Industries ltd - India
- South Luzon Thermal Energy Corporation
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- SN Aboitiz Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Ministry of Transport, Egypt
- Goldman Sachs - Singapore
- PowerSource Philippines DevCo
- Karbindo Abesyapradhi - Indoneisa
- Planning Commission, India
- Economic Council, Georgia
- Energy Link Ltd, New Zealand
- Xindia Steels Limited - India
- Thai Mozambique Logistica
- Ambuja Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Authority, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- The State Trading Corporation of India Ltd
- GVK Power & Infra Limited - India
- Heidelberg Cement - Germany
- Kepco SPC Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- White Energy Company Limited
- Eastern Coal Council - USA
- Sree Jayajothi Cements Limited - India
- Aboitiz Power Corporation - Philippines
- Star Paper Mills Limited - India
- Vizag Seaport Private Limited - India
- Intertek Mineral Services - Indonesia
- VISA Power Limited - India
- Global Coal Blending Company Limited - Australia
- Aditya Birla Group - India
- GMR Energy Limited - India
- Riau Bara Harum - Indonesia
- Parry Sugars Refinery, India
- Tamil Nadu electricity Board
- Maheswari Brothers Coal Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Bukit Makmur.PT - Indonesia
- Posco Energy - South Korea
- Straits Asia Resources Limited - Singapore
- Agrawal Coal Company - India
- Siam City Cement PLC, Thailand
- Kobexindo Tractors - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Renaissance Capital - South Africa
- Gujarat Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Parliament of New Zealand
- ASAPP Information Group - India
- IHS Mccloskey Coal Group - USA
- Mercuria Energy - Indonesia
- Romanian Commodities Exchange
- Barasentosa Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Coalindo Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kalimantan Lumbung Energi - Indonesia
- Electricity Generating Authority of Thailand
- MS Steel International - UAE
- Indonesian Coal Mining Association
- SMG Consultants - Indonesia
- LBH Netherlands Bv - Netherlands
- Bhushan Steel Limited - India
- Deloitte Consulting - India
- Maharashtra Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Energy Development Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Medco Energi Mining Internasional
- Sarangani Energy Corporation, Philippines
- Semirara Mining Corp, Philippines
- Coastal Gujarat Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Edison Trading Spa - Italy
- Power Finance Corporation Ltd., India
- Central Electricity Authority - India
- Interocean Group of Companies - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wilmar Investment Holdings
- Bhoruka Overseas - Indonesia
- Price Waterhouse Coopers - Russia
- Meralco Power Generation, Philippines
- Ministry of Mines - Canada
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TeaM Sual Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- European Bulk Services B.V. - Netherlands
- Jindal Steel & Power Ltd - India
- Kaltim Prima Coal - Indonesia
- Sical Logistics Limited - India
- Eastern Energy - Thailand
- Africa Commodities Group - South Africa
- Pendopo Energi Batubara - Indonesia
- Australian Commodity Traders Exchange
- Orica Australia Pty. Ltd.
- Independent Power Producers Association of India
- Indo Tambangraya Megah - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Commonwealth Bank - Australia
- Timah Investasi Mineral - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Toyota Tsusho Corporation, Japan
- The Treasury - Australian Government
- Kideco Jaya Agung - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Antam Resourcindo - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- New Zealand Coal & Carbon
- ICICI Bank Limited - India
- Chamber of Mines of South Africa
- Kohat Cement Company Ltd. - Pakistan
- Australian Coal Association
- Minerals Council of Australia
- Makarim & Taira - Indonesia
- Port Waratah Coal Services - Australia
- Binh Thuan Hamico - Vietnam
- Malabar Cements Ltd - India
- Rio Tinto Coal - Australia
- India Bulls Power Limited - India
- Global Business Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- International Coal Ventures Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
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