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