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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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Friday, 04 February 11
ADARO ENERGY FY10 COAL SALES UP 6 PERCENT TO 43.84 MILLION
As reported by insider stories, Indonesian coal miners PT Adaro Energy Tbk has produced 42.20 million tons of coal in 2010, a 4 percent increase com ...
Thursday, 03 February 11
MERCATOR LINES TO INVEST RS 200-250 CRORE ON COAL MINE IN INDONESIA - ECONOMIC TIMES
Economic Times reported that, Mercator Lines, the HK Mittal-controlled shipping-to-mines major, will invest about 200-250 crore (US$ 43.825 - 54.781 ...
Thursday, 03 February 11
DRY BULK MARKET LOOKS SET TO BOTTOM OUT NIKOS - ROUSSANOGLOU, HELLENIC SHIPPING
With the dry bulk market having lost more than 72% of its value in the last month or so and having retreated to a 2-year low, it seems that the bott ...
Wednesday, 02 February 11
INDONESIA MAY MISS COAL EXPORT TARGET IN 2011
COALspot.com - Indonesian Trade ministry has instructed independent surveyors temporarily not to issue pre-shipment survey report (LS) to the compan ...
Wednesday, 02 February 11
BAYAN TO SUPPLY COAL TO TP UTILITIES LTD
Insider Stories has reportd that, Indonesia's one of the leading coal miner PT Bayan Resources Tbk (BYAN) owned by businessman Dato' Low Tuck ...
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- Jaiprakash Power Ventures ltd
- Australian Commodity Traders Exchange
- Asmin Koalindo Tuhup - Indonesia
- Mjunction Services Limited - India
- Bangladesh Power Developement Board
- Altura Mining Limited, Indonesia
- Independent Power Producers Association of India
- Banpu Public Company Limited - Thailand
- Directorate Of Revenue Intelligence - India
- The State Trading Corporation of India Ltd
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- OPG Power Generation Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- The Treasury - Australian Government
- Latin American Coal - Colombia
- GVK Power & Infra Limited - India
- Borneo Indobara - Indonesia
- Coal and Oil Company - UAE
- Toyota Tsusho Corporation, Japan
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- Interocean Group of Companies - India
- ASAPP Information Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Indika Energy - Indonesia
- Indogreen Group - Indonesia
- Ambuja Cements Ltd - India
- Malabar Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Alfred C Toepfer International GmbH - Germany
- Krishnapatnam Port Company Ltd. - India
- Africa Commodities Group - South Africa
- Ministry of Finance - Indonesia
- Port Waratah Coal Services - Australia
- Cement Manufacturers Association - India
- Sojitz Corporation - Japan
- Central Electricity Authority - India
- Electricity Authority, New Zealand
- Baramulti Group, Indonesia
- London Commodity Brokers - England
- Ministry of Transport, Egypt
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thai Mozambique Logistica
- Carbofer General Trading SA - India
- Intertek Mineral Services - Indonesia
- CNBM International Corporation - China
- Kumho Petrochemical, South Korea
- White Energy Company Limited
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Barasentosa Lestari - Indonesia
- Posco Energy - South Korea
- Sarangani Energy Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Bukit Asam (Persero) Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Madhucon Powers Ltd - India
- IHS Mccloskey Coal Group - USA
- Billiton Holdings Pty Ltd - Australia
- Bayan Resources Tbk. - Indonesia
- Commonwealth Bank - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- Formosa Plastics Group - Taiwan
- SMG Consultants - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Indian Oil Corporation Limited
- Dalmia Cement Bharat India
- Electricity Generating Authority of Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Marubeni Corporation - India
- Larsen & Toubro Limited - India
- Therma Luzon, Inc, Philippines
- Heidelberg Cement - Germany
- Meenaskhi Energy Private Limited - India
- Sical Logistics Limited - India
- European Bulk Services B.V. - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- Antam Resourcindo - Indonesia
- Pendopo Energi Batubara - Indonesia
- Binh Thuan Hamico - Vietnam
- Merrill Lynch Commodities Europe
- Rashtriya Ispat Nigam Limited - India
- Grasim Industreis Ltd - India
- Ind-Barath Power Infra Limited - India
- Uttam Galva Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Meralco Power Generation, Philippines
- Kideco Jaya Agung - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Eastern Coal Council - USA
- Mercuria Energy - Indonesia
- Rio Tinto Coal - Australia
- Gujarat Sidhee Cement - India
- PTC India Limited - India
- Siam City Cement - Thailand
- Central Java Power - Indonesia
- Semirara Mining and Power Corporation, Philippines
- New Zealand Coal & Carbon
- IEA Clean Coal Centre - UK
- Salva Resources Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Power Finance Corporation Ltd., India
- Neyveli Lignite Corporation Ltd, - India
- Wilmar Investment Holdings
- VISA Power Limited - India
- Minerals Council of Australia
- CIMB Investment Bank - Malaysia
- SMC Global Power, Philippines
- Energy Link Ltd, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sindya Power Generating Company Private Ltd
- Vizag Seaport Private Limited - India
- Renaissance Capital - South Africa
- Oldendorff Carriers - Singapore
- Coalindo Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- ICICI Bank Limited - India
- Global Business Power Corporation, Philippines
- PowerSource Philippines DevCo
- Tamil Nadu electricity Board
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- Bahari Cakrawala Sebuku - Indonesia
- Orica Australia Pty. Ltd.
- Sinarmas Energy and Mining - Indonesia
- Anglo American - United Kingdom
- Bhoruka Overseas - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Siam City Cement PLC, Thailand
- Global Green Power PLC Corporation, Philippines
- Energy Development Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Videocon Industries ltd - India
- Eastern Energy - Thailand
- Romanian Commodities Exchange
- Indo Tambangraya Megah - Indonesia
- Aditya Birla Group - India
- Lanco Infratech Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- MS Steel International - UAE
- Essar Steel Hazira Ltd - India
- Kartika Selabumi Mining - Indonesia
- Indonesian Coal Mining Association
- Bhushan Steel Limited - India
- Agrawal Coal Company - India
- Chettinad Cement Corporation Ltd - India
- Singapore Mercantile Exchange
- TeaM Sual Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- Cigading International Bulk Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Goldman Sachs - Singapore
- LBH Netherlands Bv - Netherlands
- Iligan Light & Power Inc, Philippines
- Makarim & Taira - Indonesia
- Samtan Co., Ltd - South Korea
- Chamber of Mines of South Africa
- Deloitte Consulting - India
- Tata Chemicals Ltd - India
- Kaltim Prima Coal - Indonesia
- Medco Energi Mining Internasional
- Parry Sugars Refinery, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Price Waterhouse Coopers - Russia
- Miang Besar Coal Terminal - Indonesia
- Sakthi Sugars Limited - India
- Attock Cement Pakistan Limited
- Jindal Steel & Power Ltd - India
- Ministry of Mines - Canada
- Bulk Trading Sa - Switzerland
- Parliament of New Zealand
- Trasteel International SA, Italy
- Bharathi Cement Corporation - India
- Bhatia International Limited - India
- Petron Corporation, Philippines
- Riau Bara Harum - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kepco SPC Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Standard Chartered Bank - UAE
- Metalloyd Limited - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Holcim Trading Pte Ltd - Singapore
- Indian Energy Exchange, India
- Australian Coal Association
- The University of Queensland
- AsiaOL BioFuels Corp., Philippines
- Star Paper Mills Limited - India
- Aboitiz Power Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Edison Trading Spa - Italy
- Economic Council, Georgia
- Orica Mining Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Mintek Dendrill Indonesia
- Straits Asia Resources Limited - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Mercator Lines Limited - India
- Xindia Steels Limited - India
- Thiess Contractors Indonesia
- Wood Mackenzie - Singapore
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